August 14, 2025 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US Treasuries held onto gains after traders boosted bets that the Federal Reserve will cut interest rates at its next meeting.
(2) President Donald Trump said he may name the next Federal Reserve chair “a little bit early” and added that he was down to three or four potential candidates as he looks for a successor to Jerome Powell.
(3) US President Donald Trump warned he would impose “very severe consequences” if Vladimir Putin didn’t agree to a ceasefire agreement later this week, following a call with European leaders ahead of his meeting with the Russian president.
(4) Apple is plotting its artificial intelligence comeback with an ambitious slate of new devices, including robots, a lifelike version of Siri, a smart speaker with a display and home-security cameras.
(5) Short sellers are betting against Greggs Plc at levels not seen since the global financial crisis, as the UK bakery chain struggles to convince investors that opening more shops will boost lackluster sales.
(6) Bloomberg reports into how Tisza, an upstart Hungarian political movement, is making surprising gains against Viktor Orban's grip on the country's politics.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak euro podcast. Good morning, It's Thursday,
the fourteenth of August. I'm Stephen Carolyn London. Coming up today.
The US President suggests he'll announce the next Federal Reserve
chair a little earlier as market's further ramp up rate
cut expectations from iPods to I robots. Bloomberg learns that
Apple's AI push will focus on tabletop virtual companions and
(00:33):
smart home security. Plus, we look at why Victor Orban's
once unshakable grip on power and hungary now appears to
be slipping. Let's start with a roundup of our top stories.
US trosuries have held on to gains after traders boosted
bets of the Federal Reserve will cut interest rates at
its next meeting. The bond rally shows how market sentiment
(00:54):
has shifted dramatically from two weeks ago, when expectations for
a September cut were less than fifty to fifty. Interest
rate swaps now fully priced in a quarter point move
next month, with some traders piling into batson at being
a half point. US Treasury Secretary Scott Besson believes that
should just be the start. Here's what he told Bimberg's
an Marie Hordern.
Speaker 3 (01:14):
I do think we could go into a series of
rate cuts here, starting with a fifty basis point rate
cut in September.
Speaker 1 (01:22):
Fifty basis rate cut in September.
Speaker 3 (01:24):
Is that signal that the economy, though, is not doing well.
That signals that there's an adjustment and that the rates
are too constrictive. If you look at any model that
the if you we should probably be one hundred and
fifty one hundred and seventy five basis points lower. So
(01:45):
I think the committee needs to step back.
Speaker 2 (01:48):
Scott Bassets was speaking as Chicago five President Austin Goolsby
said the next rate meetings will be live as policymakers
way mixed economic data and the US Center Bank isn't
the only one being pressured by the Treasury Secretary. Bessant
also told Bloomberg he believes the Bank of Japan is
falling behind the curve and addressing inflation, adding that they
are going to be hiking and need to get their
(02:09):
inflation problem under control. The list of candidates for the
next chair of the Federal Reserve is continuing to narrow
according to Donald Trump. The US president says he may
move sooner rather than later on naming his pick for
the job when Jerome Powell's term ends next May.
Speaker 4 (02:25):
With more hairs.
Speaker 2 (02:25):
Binberg's Charlie Palace.
Speaker 4 (02:27):
Word came during the President's Kennedy Center news conference.
Speaker 5 (02:31):
I'll be naming a new chairman sometime within the next
I think I'll name it a little bit earlier.
Speaker 4 (02:35):
The new chairman.
Speaker 5 (02:37):
I'm down to three or four names.
Speaker 4 (02:40):
All good, all great, well keeping up his attacks on
fedchaer G.
Speaker 5 (02:43):
Powell, and he got it all wrong. He's too late.
We call him Jerome too late Bell. It will live
with him forever. I believe that name will live with
him forever.
Speaker 4 (02:53):
Trump has hammered Powell over the Central Bank's decision to
hold interest rates steady, repeatedly calling in the past for
him to resign. In New York Charlie Pellot Bloomberg Radio what.
Speaker 2 (03:04):
Donald Trump says Vladimir Putin will face severe consequences if
he doesn't agree to a cease fire with Ukraine this week.
The two leaders are meeting tomorrow in Alaska for the
first time since the war in Ukraine began. Trump says
there will likely be further discussions.
Speaker 5 (03:19):
There's a very good chance that we're going to have
a second meeting, which will be more productive than the first,
because the first is I'm going to find out where
we are and what we're doing. Again, this is Biden's world.
This isn't my work. He got us into this thing,
and they should have never happened. This war would have
never happened if our president. But it is what it is,
and I'm here to fix it.
Speaker 2 (03:38):
Yes, President Adam that he hopes the upcoming talks with
Putin can be used to set up a quick second
meeting with Ukrainian leader Vladimir Zelenski after allies pressured him
to involve Ukraine in the discussions. Bloomberg understands that Trump
assured European leaders during a call yesterday that he wouldn't
negotiate on seeding Ukrainian territory to Putin. Apple is developing
(03:59):
a new suite of AI devices to try and corner
the demand for smart consumer electronics. A tabletop robot assistant,
a smart speaker, and cameras that can run a home
security system are part of the slate of planned releases
seen by Bloomberg, Our Managing editor, Mark German says it's
a very different approach to AI compared to the likes
(04:21):
of Chat GPT.
Speaker 6 (04:23):
So the conventional wisdom is that Apple is lagging right now,
It has no future, the product pipeline is very limited.
They're struggling in AI. The world is ending and Tim
Cook should be fired as CEO. And it is true
that they are struggling terribly in AI. But at the
end of the day, Apple is a hardware company and
they have been planning this big new hardware pipeline.
Speaker 2 (04:47):
Goverman's exclusive reporting details how Apple CEO Tim Cook is
telling employees the company must win in AI despite the
company's new budding products. OpenAI may threaten the company's home
term with its plans to build its own new AI
driven devices with the help of former Apple design chief
Johnny Ive. Short sellers are betting that Greggs's growth plans
(05:12):
are half baked. The proportion of the UK pastry chain's
stock out on loan reached nine percent of total shares
this week, the highest level since two thousand and eight.
Bloomberg's James Wilcock has more.
Speaker 7 (05:25):
There is currently one greg shop for every twenty six
thousand people in the British population. That's the nearly two thousand,
six hundred and fifty stores, and the bakery chain wants
to expand to three thousand. So short sellers are asking
the loaded question how many sausage rolls is too many?
Between signed consumers opting for price er alternatives and the
(05:48):
rise of drugs like a zenpic, traders of this year
start a bet the stop price might flake in London.
James Wilcock Bloomberg.
Speaker 2 (05:56):
Radio following house prices are more widespread than any time
in the past year, according to a key survey from
UK estate agents. The Royal Institution of Chartered Surveyors said
it's indicator tracking home values dropped six percentage points to
minus thirteen last month. That's the worst reading since July
twenty twenty four. The figures come as fears of tax
(06:17):
rises and a bleaker economic outlook way on demand, while
rising inflation pours cold water on hopes for future rate cuts.
Those are your top stories on the markets. The MSCIS
specific indexes down two tenths of one percent. The Niicke
in Tokyo is down by one and a half percent.
As we're looking at that strength in the Japanese yen
up by seven tents tw one hundred and forty six
forty two following those comments from US Treasury Secretary Scott
(06:40):
Bess and European stoft features looking pretty flat at the moment,
so to our Wall Street futures who do have the
producer price inflation numbers out later, which is an interesting
one to watch in terms of the categories that feed
into the Fed's preferred price gauge that's scheduled for later
this month. The tenure treasury yield holding on to the
gains from yesterday at four point two four percent. This morning,
(07:02):
the Bloomberg Dollar Spot index is a tenth weaker. Well,
in a moment, we'll bring you more on those ramped
up expectations for FED rate cuts, plus why Hungary's Victor
Orban is seeing his popularity slip and even in areas
which were once his strongholds. But in the story that
I've been reading this morning about how hotels spas are
now being marketed as a place for parents and their
(07:25):
children to go together, Alexis ben Vista has been writing
about this for Bloomberg Pursuits that while hotel spas were
once sanctuaries of adults, only serenity. They're now being marketed
as a quote multi generational wellness experience. The under sixteen
crowd is being seen as a lucrative next frontier for
these spas, so they've got special products formulated for younger
(07:46):
skin adapted treatments as even baby reflexology and services aimed
at teens and tweens are targeting things like the harmful
effect of screens. Take for example, the mandin Oriental in
Saint Vincent and Grenade's offering a texture's treat to leave
muscle tension for frequent phone use. Now the shift and
demand is also coming from parents who, instead of wanting
to escape their children, want to spend more time with
(08:08):
them in a bonding experience in the SPA. I have
to be on very skeptical about all of this. Alexis
does include that viewpoint in her piece too, but it
is a fascinating business strategy from these high endspos agree
more about it on bloombererg dot com. We'll put a
link to the article in our podcast show notes as well.
Speaker 3 (08:24):
Well.
Speaker 2 (08:24):
Let's bringing more now on the markets and how expectations
are in the fed's next move are rippling through them.
Comments from the US Treasury Secretary, also driving the Japanese
yen higher. Today our market's live strategy, Mary Nicola's with
me now for more, Mary, Markets are currently pricing at
about thirty basis points of easing from the FED at
its meeting next month. Talk to us about how that's
being perceived and playing out across markets.
Speaker 8 (08:47):
Yeah.
Speaker 1 (08:47):
So, actually we're seeing a positive response, especially from Asian currencies,
with most of them gaining ground against the dollar this morning.
The reaction in equities though, is a little bit less notable,
But we have to remember they had a really stellar
day yesterday and it's really Japan that's seeing the most
notable losses. But again, they had a strong couple of days,
(09:08):
and the stronger yen obviously adds to the pressure on
the equity markets, especially if their earnings outlooks looks less
supportive with a stronger yen.
Speaker 2 (09:19):
What are the market perceptions now of the chance of
a fifty basis point cut now, like Scott Bessen was
talking about.
Speaker 1 (09:26):
Yeah, so, so far we are not seeing any pricing
of a fifty basis point cut from the markets. You
could argue that dubvish signals from the FED chair powel
at Jackson Hole at the end of next week would
probably over excite traders and shift towards more aggressive pricing.
So I think we'd have to wait and see until
what unfolds in Jackson Hole to really get that aggressive push.
(09:48):
So as of now, as you mentioned, where the markets
are pricing in closer to thirty basis points of cuts
in September, but there's strong odds that the FED delivers
the same again at each of the final two meetings
of twenty twenty five.
Speaker 2 (10:04):
Okay, so that's where we are in FED pricing now.
I wanted to come back to Japan though, because gott
bess and also did talk about the BOJ in that
interview with Bloomberg, saying it was behind the curve and
we're seeing some movement in the end as a result
of that.
Speaker 1 (10:18):
Yeah, having the BOJ behind the curve is it nothing
new for markets, but it's interesting to see how the
EN is gaining ground and jgbs are faltering as a result,
especially after those comments coming through. And overall, what his
comments suggests is that not only will it put pressure
on the end to appreciate, but it also reiterates Washington's
(10:38):
bias for a weeker dollar, and if you look at
the yen specifically, it's under more pressure to strengthen given
how undervalue it is versus its long term averages. And
then if we look at JGBS, it's going to be
very difficult to escape its underperformance. There's a persistent market anxiety,
you see it ahead of all the different but you
(11:01):
also have that tension coming through because of quantitative tightening
stagflation risks which are brewing, and that could even escalate
tomorrow tomorrow when the country reveals its GDP numbers.
Speaker 2 (11:14):
And Mary, I've been reading on the Market's live blog
as well. I've been writing two about the euro and
the Japanese yen and all of this as well.
Speaker 4 (11:20):
What's going on there.
Speaker 1 (11:22):
Yeah, I think we could see a lot more downside
for euro yen as a result of all this. So
we're seeing a kickstart and a push on the Japanese currency.
And if we look it's it's rallied quite significantly since
over the past year and so, and it's you know,
near near near the highs. And what we're seeing now,
(11:43):
if there's more pressure on the Bank of Japan to
to accelerate its rate hikes and to see upside pressure
on yields that actually plays in most with Euro with
euro yen because of the fact that the interest rate
differential is let's say, a lot than it is with
the US, so it will be more forgiving for investors
(12:06):
to actually bet on yen gains versus the Euro than
the dollars, so that they don't have to take on
such a big carry.
Speaker 2 (12:16):
Okay, well, thank you for bringing that to our attention
as Well'm Marry Nicolo, our Markets Live strategist.
Speaker 4 (12:20):
There.
Speaker 2 (12:21):
We're turning to Hungary next, where the Prime minster, Victor Orban,
is watching his hold on power slip away, even in
areas which are once strongholds of support. Bloomberg is reporting
from the eastern city of Debretzen, where a multi billion
euro Chinese battery plant hasn't been enough to maintain the
popularity of Orban's FIDESH party. Bloomberg's Andras Gurgili joins me
(12:42):
now from Budapest for more. Andrew's great to have you
with us. Talk to us about Victor Orban's prospects heading
into elections due to take place next spring after a
decade and a half, and power is the urban era
about to end in Hungary.
Speaker 9 (12:58):
Yeah, so good question. So until about last year or so,
it would have seen quite unthinkable for Hungry's small position
parties to beat Orban. After all, he has so much
of the media, the judiciary and other institutions on his side,
and of course he's a charismatic speaker who has delivered
already four victories in a row. So that all changed
past year when an equally telegenic challenger appeared in the
(13:21):
form of Peter Madjar, who now has the leader against
Orban's party in most polls. Of course, it is still
too early to write Orban off and it's a long
way to the elections in April.
Speaker 2 (13:33):
How is Orban's alliance with Donald Trump shaping the conversation
around his popularity.
Speaker 9 (13:40):
So he was Orban as the first in Europe to
indoors Trump quite early in the game, and for years
Republicans in the US have looked to Hunger as a
kind of role model for the kind of society they
want to build in the States. Perhaps, but that hasn't
translated into any sort of tangible gain for Orban in
the campaign. For example, you know, he can deliver sort
(14:01):
of a trade deal for Hungary with pump and that
would be difficult anyway because Hungary is part of the
European Union and has to trade via the Block with
the US.
Speaker 2 (14:11):
So talk to us about the strategy being employed by
the opposition in Hungary now, even in places like de
Brett Sand, which is traditionally a stronghold of Orban's party.
Speaker 9 (14:22):
Yeah, so the opposition leader, Peter Maliar, who is actually
a former insider in Orban's regime. He knows the regime,
you know, from the inside. So he's been exploiting that
to his advantage and he's been rising rapidly in the polls.
The economy is struggling, so that's not helping Orban and
so he's losing support even in some of his traditional bays.
(14:43):
And that's why we travel to debrett Cent for our reporting.
It's the most populous city after the Comfortable with Apesh.
If Worban loses that to the TIS party, then that's
probably quite a game changer.
Speaker 2 (14:55):
One of the things that's really interesting about Debrettson as
well is that it's the location for this a guesst
foreign investment in Hungary, this Chinese battery plant.
Speaker 9 (15:04):
That's that's right. So The background to this is that
the Europine Union has suspended billions of euros in funding
that Hungary was getting from the Block.
Speaker 10 (15:13):
And and so Orbat has turned to China as one
of his main sources of financing an investment. He has
taken large loans from Chinese development banks for infrastructure projects
and and then turning to the bretson. So he is
having these these battery plants built and invited manufacturers, battery
manufacturers and car makers from China to move the European
(15:36):
hubs to Hungary. But that comes with springs attached, so
h and and also environmental risks, and that's one of
the things that the opposition has been able to exploit
and and and and and turn focused to and and
organize their resistance to urban about.
Speaker 2 (15:58):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 8 (16:04):
Look for us on your podcast feed every morning on Apple,
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Speaker 2 (16:10):
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Speaker 8 (16:16):
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Speaker 2 (16:24):
I'm Caroline Hepka and I'm Stephen Carroll. Join us again
tomorrow morning for all the news you need to start
your day right here on Bloomberg Daybreak Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak euro podcast. Good morning, It's Thursday,
the fourteenth of August. I'm Stephen Carolyn London. Coming up today.
The US President suggests he'll announce the next Federal Reserve
chair a little earlier as market's further ramp up rate
cut expectations from iPods to I robots. Bloomberg learns that
Apple's AI push will focus on tabletop virtual companions and
(00:33):
smart home security. Plus, we look at why Victor Orban's
once unshakable grip on power and hungary now appears to
be slipping. Let's start with a roundup of our top stories.
US trosuries have held on to gains after traders boosted
bets of the Federal Reserve will cut interest rates at
its next meeting. The bond rally shows how market sentiment
(00:54):
has shifted dramatically from two weeks ago, when expectations for
a September cut were less than fifty to fifty. Interest
rate swaps now fully priced in a quarter point move
next month, with some traders piling into batson at being
a half point. US Treasury Secretary Scott Besson believes that
should just be the start. Here's what he told Bimberg's
an Marie Hordern.
Speaker 3 (01:14):
I do think we could go into a series of
rate cuts here, starting with a fifty basis point rate
cut in September.
Speaker 1 (01:22):
Fifty basis rate cut in September.
Speaker 3 (01:24):
Is that signal that the economy, though, is not doing well.
That signals that there's an adjustment and that the rates
are too constrictive. If you look at any model that
the if you we should probably be one hundred and
fifty one hundred and seventy five basis points lower. So
(01:45):
I think the committee needs to step back.
Speaker 2 (01:48):
Scott Bassets was speaking as Chicago five President Austin Goolsby
said the next rate meetings will be live as policymakers
way mixed economic data and the US Center Bank isn't
the only one being pressured by the Treasury Secretary. Bessant
also told Bloomberg he believes the Bank of Japan is
falling behind the curve and addressing inflation, adding that they
are going to be hiking and need to get their
(02:09):
inflation problem under control. The list of candidates for the
next chair of the Federal Reserve is continuing to narrow
according to Donald Trump. The US president says he may
move sooner rather than later on naming his pick for
the job when Jerome Powell's term ends next May.
Speaker 4 (02:25):
With more hairs.
Speaker 2 (02:25):
Binberg's Charlie Palace.
Speaker 4 (02:27):
Word came during the President's Kennedy Center news conference.
Speaker 5 (02:31):
I'll be naming a new chairman sometime within the next
I think I'll name it a little bit earlier.
Speaker 4 (02:35):
The new chairman.
Speaker 5 (02:37):
I'm down to three or four names.
Speaker 4 (02:40):
All good, all great, well keeping up his attacks on
fedchaer G.
Speaker 5 (02:43):
Powell, and he got it all wrong. He's too late.
We call him Jerome too late Bell. It will live
with him forever. I believe that name will live with
him forever.
Speaker 4 (02:53):
Trump has hammered Powell over the Central Bank's decision to
hold interest rates steady, repeatedly calling in the past for
him to resign. In New York Charlie Pellot Bloomberg Radio what.
Speaker 2 (03:04):
Donald Trump says Vladimir Putin will face severe consequences if
he doesn't agree to a cease fire with Ukraine this week.
The two leaders are meeting tomorrow in Alaska for the
first time since the war in Ukraine began. Trump says
there will likely be further discussions.
Speaker 5 (03:19):
There's a very good chance that we're going to have
a second meeting, which will be more productive than the first,
because the first is I'm going to find out where
we are and what we're doing. Again, this is Biden's world.
This isn't my work. He got us into this thing,
and they should have never happened. This war would have
never happened if our president. But it is what it is,
and I'm here to fix it.
Speaker 2 (03:38):
Yes, President Adam that he hopes the upcoming talks with
Putin can be used to set up a quick second
meeting with Ukrainian leader Vladimir Zelenski after allies pressured him
to involve Ukraine in the discussions. Bloomberg understands that Trump
assured European leaders during a call yesterday that he wouldn't
negotiate on seeding Ukrainian territory to Putin. Apple is developing
(03:59):
a new suite of AI devices to try and corner
the demand for smart consumer electronics. A tabletop robot assistant,
a smart speaker, and cameras that can run a home
security system are part of the slate of planned releases
seen by Bloomberg, Our Managing editor, Mark German says it's
a very different approach to AI compared to the likes
(04:21):
of Chat GPT.
Speaker 6 (04:23):
So the conventional wisdom is that Apple is lagging right now,
It has no future, the product pipeline is very limited.
They're struggling in AI. The world is ending and Tim
Cook should be fired as CEO. And it is true
that they are struggling terribly in AI. But at the
end of the day, Apple is a hardware company and
they have been planning this big new hardware pipeline.
Speaker 2 (04:47):
Goverman's exclusive reporting details how Apple CEO Tim Cook is
telling employees the company must win in AI despite the
company's new budding products. OpenAI may threaten the company's home
term with its plans to build its own new AI
driven devices with the help of former Apple design chief
Johnny Ive. Short sellers are betting that Greggs's growth plans
(05:12):
are half baked. The proportion of the UK pastry chain's
stock out on loan reached nine percent of total shares
this week, the highest level since two thousand and eight.
Bloomberg's James Wilcock has more.
Speaker 7 (05:25):
There is currently one greg shop for every twenty six
thousand people in the British population. That's the nearly two thousand,
six hundred and fifty stores, and the bakery chain wants
to expand to three thousand. So short sellers are asking
the loaded question how many sausage rolls is too many?
Between signed consumers opting for price er alternatives and the
(05:48):
rise of drugs like a zenpic, traders of this year
start a bet the stop price might flake in London.
James Wilcock Bloomberg.
Speaker 2 (05:56):
Radio following house prices are more widespread than any time
in the past year, according to a key survey from
UK estate agents. The Royal Institution of Chartered Surveyors said
it's indicator tracking home values dropped six percentage points to
minus thirteen last month. That's the worst reading since July
twenty twenty four. The figures come as fears of tax
(06:17):
rises and a bleaker economic outlook way on demand, while
rising inflation pours cold water on hopes for future rate cuts.
Those are your top stories on the markets. The MSCIS
specific indexes down two tenths of one percent. The Niicke
in Tokyo is down by one and a half percent.
As we're looking at that strength in the Japanese yen
up by seven tents tw one hundred and forty six
forty two following those comments from US Treasury Secretary Scott
(06:40):
Bess and European stoft features looking pretty flat at the moment,
so to our Wall Street futures who do have the
producer price inflation numbers out later, which is an interesting
one to watch in terms of the categories that feed
into the Fed's preferred price gauge that's scheduled for later
this month. The tenure treasury yield holding on to the
gains from yesterday at four point two four percent. This morning,
(07:02):
the Bloomberg Dollar Spot index is a tenth weaker. Well,
in a moment, we'll bring you more on those ramped
up expectations for FED rate cuts, plus why Hungary's Victor
Orban is seeing his popularity slip and even in areas
which were once his strongholds. But in the story that
I've been reading this morning about how hotels spas are
now being marketed as a place for parents and their
(07:25):
children to go together, Alexis ben Vista has been writing
about this for Bloomberg Pursuits that while hotel spas were
once sanctuaries of adults, only serenity. They're now being marketed
as a quote multi generational wellness experience. The under sixteen
crowd is being seen as a lucrative next frontier for
these spas, so they've got special products formulated for younger
(07:46):
skin adapted treatments as even baby reflexology and services aimed
at teens and tweens are targeting things like the harmful
effect of screens. Take for example, the mandin Oriental in
Saint Vincent and Grenade's offering a texture's treat to leave
muscle tension for frequent phone use. Now the shift and
demand is also coming from parents who, instead of wanting
to escape their children, want to spend more time with
(08:08):
them in a bonding experience in the SPA. I have
to be on very skeptical about all of this. Alexis
does include that viewpoint in her piece too, but it
is a fascinating business strategy from these high endspos agree
more about it on bloombererg dot com. We'll put a
link to the article in our podcast show notes as well.
Speaker 3 (08:24):
Well.
Speaker 2 (08:24):
Let's bringing more now on the markets and how expectations
are in the fed's next move are rippling through them.
Comments from the US Treasury Secretary, also driving the Japanese
yen higher. Today our market's live strategy, Mary Nicola's with
me now for more, Mary, Markets are currently pricing at
about thirty basis points of easing from the FED at
its meeting next month. Talk to us about how that's
being perceived and playing out across markets.
Speaker 8 (08:47):
Yeah.
Speaker 1 (08:47):
So, actually we're seeing a positive response, especially from Asian currencies,
with most of them gaining ground against the dollar this morning.
The reaction in equities though, is a little bit less notable,
But we have to remember they had a really stellar
day yesterday and it's really Japan that's seeing the most
notable losses. But again, they had a strong couple of days,
(09:08):
and the stronger yen obviously adds to the pressure on
the equity markets, especially if their earnings outlooks looks less
supportive with a stronger yen.
Speaker 2 (09:19):
What are the market perceptions now of the chance of
a fifty basis point cut now, like Scott Bessen was
talking about.
Speaker 1 (09:26):
Yeah, so, so far we are not seeing any pricing
of a fifty basis point cut from the markets. You
could argue that dubvish signals from the FED chair powel
at Jackson Hole at the end of next week would
probably over excite traders and shift towards more aggressive pricing.
So I think we'd have to wait and see until
what unfolds in Jackson Hole to really get that aggressive push.
(09:48):
So as of now, as you mentioned, where the markets
are pricing in closer to thirty basis points of cuts
in September, but there's strong odds that the FED delivers
the same again at each of the final two meetings
of twenty twenty five.
Speaker 2 (10:04):
Okay, so that's where we are in FED pricing now.
I wanted to come back to Japan though, because gott
bess and also did talk about the BOJ in that
interview with Bloomberg, saying it was behind the curve and
we're seeing some movement in the end as a result
of that.
Speaker 1 (10:18):
Yeah, having the BOJ behind the curve is it nothing
new for markets, but it's interesting to see how the
EN is gaining ground and jgbs are faltering as a result,
especially after those comments coming through. And overall, what his
comments suggests is that not only will it put pressure
on the end to appreciate, but it also reiterates Washington's
(10:38):
bias for a weeker dollar, and if you look at
the yen specifically, it's under more pressure to strengthen given
how undervalue it is versus its long term averages. And
then if we look at JGBS, it's going to be
very difficult to escape its underperformance. There's a persistent market anxiety,
you see it ahead of all the different but you
(11:01):
also have that tension coming through because of quantitative tightening
stagflation risks which are brewing, and that could even escalate
tomorrow tomorrow when the country reveals its GDP numbers.
Speaker 2 (11:14):
And Mary, I've been reading on the Market's live blog
as well. I've been writing two about the euro and
the Japanese yen and all of this as well.
Speaker 4 (11:20):
What's going on there.
Speaker 1 (11:22):
Yeah, I think we could see a lot more downside
for euro yen as a result of all this. So
we're seeing a kickstart and a push on the Japanese currency.
And if we look it's it's rallied quite significantly since
over the past year and so, and it's you know,
near near near the highs. And what we're seeing now,
(11:43):
if there's more pressure on the Bank of Japan to
to accelerate its rate hikes and to see upside pressure
on yields that actually plays in most with Euro with
euro yen because of the fact that the interest rate
differential is let's say, a lot than it is with
the US, so it will be more forgiving for investors
(12:06):
to actually bet on yen gains versus the Euro than
the dollars, so that they don't have to take on
such a big carry.
Speaker 2 (12:16):
Okay, well, thank you for bringing that to our attention
as Well'm Marry Nicolo, our Markets Live strategist.
Speaker 4 (12:20):
There.
Speaker 2 (12:21):
We're turning to Hungary next, where the Prime minster, Victor Orban,
is watching his hold on power slip away, even in
areas which are once strongholds of support. Bloomberg is reporting
from the eastern city of Debretzen, where a multi billion
euro Chinese battery plant hasn't been enough to maintain the
popularity of Orban's FIDESH party. Bloomberg's Andras Gurgili joins me
(12:42):
now from Budapest for more. Andrew's great to have you
with us. Talk to us about Victor Orban's prospects heading
into elections due to take place next spring after a
decade and a half, and power is the urban era
about to end in Hungary.
Speaker 9 (12:58):
Yeah, so good question. So until about last year or so,
it would have seen quite unthinkable for Hungry's small position
parties to beat Orban. After all, he has so much
of the media, the judiciary and other institutions on his side,
and of course he's a charismatic speaker who has delivered
already four victories in a row. So that all changed
past year when an equally telegenic challenger appeared in the
(13:21):
form of Peter Madjar, who now has the leader against
Orban's party in most polls. Of course, it is still
too early to write Orban off and it's a long
way to the elections in April.
Speaker 2 (13:33):
How is Orban's alliance with Donald Trump shaping the conversation
around his popularity.
Speaker 9 (13:40):
So he was Orban as the first in Europe to
indoors Trump quite early in the game, and for years
Republicans in the US have looked to Hunger as a
kind of role model for the kind of society they
want to build in the States. Perhaps, but that hasn't
translated into any sort of tangible gain for Orban in
the campaign. For example, you know, he can deliver sort
(14:01):
of a trade deal for Hungary with pump and that
would be difficult anyway because Hungary is part of the
European Union and has to trade via the Block with
the US.
Speaker 2 (14:11):
So talk to us about the strategy being employed by
the opposition in Hungary now, even in places like de
Brett Sand, which is traditionally a stronghold of Orban's party.
Speaker 9 (14:22):
Yeah, so the opposition leader, Peter Maliar, who is actually
a former insider in Orban's regime. He knows the regime,
you know, from the inside. So he's been exploiting that
to his advantage and he's been rising rapidly in the polls.
The economy is struggling, so that's not helping Orban and
so he's losing support even in some of his traditional bays.
(14:43):
And that's why we travel to debrett Cent for our reporting.
It's the most populous city after the Comfortable with Apesh.
If Worban loses that to the TIS party, then that's
probably quite a game changer.
Speaker 2 (14:55):
One of the things that's really interesting about Debrettson as
well is that it's the location for this a guesst
foreign investment in Hungary, this Chinese battery plant.
Speaker 9 (15:04):
That's that's right. So The background to this is that
the Europine Union has suspended billions of euros in funding
that Hungary was getting from the Block.
Speaker 10 (15:13):
And and so Orbat has turned to China as one
of his main sources of financing an investment. He has
taken large loans from Chinese development banks for infrastructure projects
and and then turning to the bretson. So he is
having these these battery plants built and invited manufacturers, battery
manufacturers and car makers from China to move the European
(15:36):
hubs to Hungary. But that comes with springs attached, so
h and and also environmental risks, and that's one of
the things that the opposition has been able to exploit
and and and and and turn focused to and and
organize their resistance to urban about.
Speaker 2 (15:58):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 8 (16:04):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 2 (16:10):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 8 (16:16):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
Speaker 2 (16:24):
I'm Caroline Hepka and I'm Stephen Carroll. Join us again
tomorrow morning for all the news you need to start
your day right here on Bloomberg Daybreak Europe
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