September 18, 2025 • 20 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Federal Reserve officials lowered their benchmark interest rate by a quarter percentage point and penciled in two more reductions this year following months of intense pressure from the White House to slash borrowing costs.
(2) The Bank of England is set to rein in its quantitative tightening program amid concerns that its gilt sales are worsening volatility in the bond market.
(3) King Charles III urged the defense of Ukraine and the environment as he welcomed US President Donald Trump and top tech and finance executives for a lavish state dinner at Windsor Castle on Wednesday.
(4) Walt Disney’s ABC network is taking Jimmy Kimmel Live! off the air indefinitely amid a backlash to remarks the late-night host made about the killing of Republican activist Charlie Kirk.
(5) European Union member states approved negotiations with Canada and the UK that would give them access to the bloc’s €150 billion ($178 billion) fund aimed at accelerating investment in the defense industry.
(6) French unions are leading widespread anti-austerity protests Thursday, raising the pressure on newly appointed Prime Minister Sebastien Lecornu as he struggles to find allies to piece together a budget.
(7) The world's biggest food company - Nestlé - has been shaken by scandal and management upheaval. After years of strategic drift and rising debt, investors are pressing incoming CEO Philipp Navratil to restore stability.
Podcast Conversation: Apple and Citi CEOs Join Trump and King Charles at State Dinner
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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 (00:09):
This is the bloom Big Day BAQT podcast. Good morning,
It's Thursday, the eighteenth of September. I'm Caroline Hepkat in London.
Speaker 3 (00:15):
And I'm Stephen Caroline Brussels. Coming up today, Jerome Powell
rallies Federal Reserve rate setters to back a twenty five
basis point cut, as Trump's appointee Myron ups for fifty.
Speaker 2 (00:27):
The US President joins the King and Tech Royalty for
a glittering state banquet at Windsor Castle.
Speaker 3 (00:34):
Plus pulling the Plug, Disney takes Jimmy Kimmel's talk show
off air over remarks he made about Charlie Kirk's killing.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
The Federal Reserve Church. Jerome Powell has rallied his committee
of policymakers to back the Central Bank's first interest rate
cut of the year. The quarter point reduction came after
a significant slowdown in job growth and an unprecedented push
by the White House for much lower rates, but with
the effects of tariffs on inflation still uncertain, Powell made
clear that Fed officials will face difficult trade offs in
(01:06):
the coming months. As they consider whether to keep cutting.
Speaker 4 (01:09):
You can think of this in a way as a
risk management cut because if you look at the SEP,
actually the projections for growth this year next actually ticked
up just a little bit, and inflation and unemployment didn't
really move once. So what's different now. What's different now
is that you see a very different picture of the
risks to the labor market.
Speaker 3 (01:27):
The decision to cut rights was nearly unanimous, with the
loan descent coming from FED Governor Stephen Myron, a close
ally of Donald Trump, who favored a larger reduction. FED
Governors Christopher Waller and Michelle Bowman, who dissented in July
in favor of a rate cut, supported this move well.
Speaker 2 (01:43):
The Bank of England is expected to rein in its
quantitative tightening program amid concerns that its guilt sales are
worsening volatility in the bond market. Economists and investors are
expecting the Bank's Monastory Policy Committee to slow the speed
at which it reduces its whole things of government bonds
to seventy billion pounds a year, down from one hundred billion.
(02:05):
Officials may also decide to self view a long dated
guilts the Bank will announce the changes alongside its interest
rate decision today, where it's widely expected to hold rates
at four percent, a mid high inflation of three point
eight percent.
Speaker 3 (02:18):
In August, Britain's King Charles praised US President Donald Trump's
efforts to support Ukraine against tyranny. After a day of
lavish celebrations in honor of the special relationship, The UK
monarch underlined the strength of the ties between the two
countries in his speech at the state banquet.
Speaker 5 (02:37):
In two World Wars, we fought together to defeat the
forces of tyranny. Today, as a tyranny once again threatens Europe,
we and our allies stand together in support of Ukraine.
Coming to the terror aggression and secure peace.
Speaker 3 (02:59):
King Charles has come on Ukraine. Came after a day
of royal spectacle. The two heads of state, inspected troops,
rode in a horse drawn carriage and later a wreath
for the late Queen Elizabeth. The ceremony seems to have
impressed the US President.
Speaker 6 (03:13):
This is surely one of the highest honors of my life.
So she's effect for you, and so to respect for
your country for many decades, His Majesty, the King is
epitomized the fortitude, nobility, and the spirit of the British
monarchy and the British people.
Speaker 3 (03:29):
Donald Trump speaking at the state banquet and Windsor Castle
in diplomatic talks later today, the UK's Prime Minister, cair
Starmer hopes to press Trump on trade terms and the
war in Ukraine, although major breakthroughs aren't expected. The Prime
minister will do so without his top ambassador, who he
fired last week for his ties to the late Jeffrey Epstein.
(03:50):
The visit is also a chance for the two governments
to sign investment deals, with the British government announcing US
companies were planning one hundred and fifty billion pounds in
Esmond's to coincide with the occasion.
Speaker 2 (04:03):
Now Disney is taking Jimmy Kimmel's talk show off the
air indefinitely amid a backlash to remarks that he made
about the killing of Republican activist Charlie Kirk. The comments,
which focused on the response of the Trump supporting MAGA
movement to Kirk's killing, angered many right wing commentators and
brought criticism from members of the Trump administration. Following that
(04:26):
the head of the US broadcast Regulator told Podcasts host
Benny Johnson, there was a strong case to punish Kimmel
and Disney.
Speaker 7 (04:36):
From the moment that I have become shearman of the FCC,
I want to reinvigorate the public interest. And what people
don't understand is that the broadcasters, and you've gotten this right,
are entirely different than people that use other forms of communication.
They have a license granted by us at the FCC,
and that comes within an obligation to operate in the
public interest.
Speaker 2 (04:57):
That was FCC Chair Brendan cars Making on The Benny Show.
Disney's ABC network took Kimmel's show off air after next
Our Media, which owns dozens of USTv affiliates, said that
it would pull the program in definitely from its stations
over the remarks, which it said were offensive and insensitive.
In a statement, the Writer's Guilds of America criticized the move, saying, quote,
(05:21):
if free speech applied only to ideas we like, we
needn't have bothered to write it into the Constitution.
Speaker 3 (05:28):
European Union countries have agreed to open talks with the
UK and Canada on access to its new one hundred
and fifty billion euro defense fund. Bloomberg's Micalcubala has more The.
Speaker 8 (05:38):
Security Action for Europe program, known as SAFE, aims to
boost investment in the EU defense industry. Brussels will now
begin negotiations to allow British and Canadian firms to take
part in joint weapons projects funded by the plan. Other countries,
including Albania, Turkey and South Korea have also asked to join.
SAFE is designed to accelerate production of critical military equipment
(06:01):
such as drones or cyber defense. Nineteen new countries have
already applied for loans under the program. In Brussels and
Michalcobala Bloomberg.
Speaker 2 (06:10):
Radio, French unions will lead widespread down to austerity protests today,
That says newly elected Prime Minister Sebastia la Cornu searches
for political allies to help draw up a budget. All
major labor organizations have instructed members to demonstrate against spending
cuts proposed in July that they say amount to unprecedented brutality.
(06:34):
Cyril Chabanier, president of the French Confederation of Christian Workers,
says the protests are about sparking change.
Speaker 9 (06:43):
We are protesting primarily against the budget. That means we
really want to create pressure so that the budget presented
by Francois Bairou, which could be surprised by mister Lecornu,
will be profoundly modified. So it's that that is important
to place pressure so that we are understood.
Speaker 2 (07:02):
French trade unionist Cyril Chaboner speaking there. Lecornu is yet
to indicate though, which fiscal concessions he's willing to make
to the budget initially proposed by previous Prime Minister Francois Beiru,
who was forced to resign after losing a confidence vote
earlier this month.
Speaker 3 (07:19):
Meto wants to turn its smart glasses into a must
have product, with a new model boasting in built screens.
The social media giant is rebranding the product is AI Glasses,
with a price tag of seven hundred and ninety nine dollars.
Meta CEO Mark Zuckerberg says he's bringing super intelligence to
consumer electronics.
Speaker 10 (07:38):
This is going to be the most important technology in
our lifetimes. AI should serve people, not just be something
that sits in a data center automating large parts of society.
So we design our glasses to be able to empower
people with new capabilities as soon as they become possible.
Speaker 3 (07:59):
Zuckerberg. We're speaking at metas annual events to showcase new
technology the company's helping. The new display glasses will be
a stepping stone to full augmented reality glasses.
Speaker 2 (08:09):
Okay, those were a few of our top stories for
you this morning. So in terms of the markets, US
stock futures are up after the further rate cut yesterday.
NASA Future is in particular up by seven tenths of
one percent, and you did have global stocks rally on
the back of that cart with more penciled in treasuries
this morning, rallying a tad for spot zero six four
(08:30):
ten yields down two basis points. Bank of England not
expected to cut rates. It's all about quantitative tightening and
what they're doing in terms of their guilt sales reducing
those is the expectation. European stock futures are also up
this morning, four tenths of one percent, oil holding on
to declines that we saw yesterday. Break Read futures down
(08:52):
another three tenths of one percent this morning, weighing that
rate cut and increase US fuel Inventory's gold is also
download to tens this morning. Those are the markets in
a moment.
Speaker 3 (09:02):
More on the Fed and Bank of England decisions, plus
the nightmare at Nesle, the challenges facing the new top
team at the world's biggest food company. But I just
want to take a moment to talk a little bit
about the banquet at Windsor Castle. Needless to say, pretty
opulent affair in Saint Georgie's hole. One hundred and sixty
guest and I note more than fourteen hundred pieces of cutlery,
(09:23):
which I'm very glad that I was not involved in
having to wash or polish.
Speaker 2 (09:27):
Absolutely, but I think the key takeaway I watched it
last night, which is why I'm a little bleary eyed
this morning. President Chop was full of praise and admiration,
not just for the King but also for the UK
for the special relationship. He called it more than that
we like two notes in one chord, or two verses
of the same poem. Stephen, I don't think that the
UK could have had a better speech in diplomatic terms
(09:50):
from the US leader, and certainly if you listened with
a conservative or reform UK here so Britain has used
it's royal diplomacy in all of that pomp to really
create a genuinely warm feeling. Does that soft power now
bring economic benefits when you get to the nitty grinity
of the politics today, huge sums in terms of tech investment,
(10:12):
does that actually deliver for jobs and growth in the UK?
Did the UK get Is it getting a good deal
out of these tech sums?
Speaker 3 (10:21):
I mean, on a modulizer note, I solute your Britishness
that you stayed up late and sacrificed your sleep to
watch the stage banquet. It is a historic exactly, It's
a big moment. I mean, to be honest, I was
struck looking at it. Is that the despite the fact
that this was you know, the top tier list of guests,
all these CEOs, you know, it's even towards some from
Blackstone and all the tech CEOs we've talked about being there,
they couldn't see each other the table, that the table
(10:43):
dressings are so high that you would not have been
able to look at or speak to the person setting
opposite you, because I mean it looked nearly the same
height as the table itself with the pile.
Speaker 2 (10:52):
Again, did I watched it too closely? Because apparently it
was meant to look like a dragon. The table decorations,
yes they were. They everything was themed. Absolutely, everything was
meant to be a pointer to heritage, et cetera.
Speaker 3 (11:05):
And even though of course Donald Trump does not drink alcohol,
they did have a special nineteen forty five vintage port
hoverly after dinner drinks, which was meant to be a
nod to him being the forty fifth president of the
United States. As you say, every detail paid attention to
the focus, of course, shifting today to the more serious
conversations as that meeting coming up with Keir Starmer or
later on at a press conference, as well as plenty
(11:25):
more to come on Donald Trump's state visit to the UK.
Speaker 2 (11:29):
Now, let's bring you some details of the Federal Reserve
decision yesterday, with the US Central Bank signaling more cuts
are to come this year. This as we look ahead
to today's Bank of England decision, where rates are expected
to stay on hold at four percent. Our market supporter
value title joins us now for more, Rennie, good morning.
Valve the FED cut by a quarter point as markets expected.
(11:49):
What did Powell tell us about what happens next?
Speaker 11 (11:52):
Look, he was not as strong in his language about
the pace of rate cuts or even the door for
October being white open for yet another rate cut, and
that really kind of disappointed the equity market and the
treasury market at the end of the session, So he
wasn't super clear, and he also wasn't super clear that
when it comes to their dual mandate that the risks
(12:14):
to labor market now completely outweigh the risks to inflation.
When he was talking about the dual mandate, he has
said that the downside risks to unemployment have risen, but
the two mandates are moving more into an equal framework.
So there wasn't any big flashing sign out there that
for him, the labor market needed a quick adjustment in
(12:35):
policy rates. And actually Caroline, when he was asked about
whether they discussed fifty bases points and whether what he
felt about a fifty basis point cut, he said that
it had little support within the committee at all today
for a fifty basis point rate reduction and said that
you tend to do those things when you feel that
policy is out of place and you need to move quickly,
(12:56):
and that is not at all how I feel, so
to me and to the market, that meant that this
argument that Christopher Waller has put forward that the labor
market is flashing red and needs urgent rate cuts has
just not necessarily convinced the rest of the members yet,
and maybe even perhaps even Christopher Waller himself is less
convinced about that framework because he did not dissent at
(13:18):
this meeting. There was only one discent, Caroline. It came
from the new member, Stephen Myron, who voted for a
fifty basis point rate reduction. But Christopher Waller and Bowman,
who dissented in the previous decision, did not dissent this
time for a larger than expected rate cut. They did
vote for a twenty five basis point rate reduction, So
that to me is kind of the more duvish. The
(13:41):
leaders of the duvish camp previously, that being Christopher Waller,
might be less convinced in their case, perhaps after that
really hot retail sales figure we got two days ago, Valerie.
Speaker 3 (13:50):
I mean, a lot of the focus around this meeting
has been on the presence of Stephen Myron on that
policy making committee, and as you say, he was the dissenter.
He voted for fifty basis points as well. He'd come
from his job in the White House beforehand, and with
all of the questions around FED independence that were in
the background for this decision as well. I mean, how
significant is it that we only had one descent, I suppose,
(14:12):
and what does it mean for those questions around the
independence of the FED.
Speaker 11 (14:16):
Well, Myron not only dissented, but in his dot in
that dot plot, he not only wanted a fifty basis
point rate reduction. Yes, in yesterday's meeting, he wanted a
fifty basis point in October and a fifty basis point
in December. So he wants one hundred and fifty basis
points of rate reduction before year end. So in that
kind of way, there was a pretty strong standout on
(14:38):
the Governor Board from Stephen Myron. It just does not
seem that he has convinced any other members around him
that the market, the labor market is in a case
where it needs those rapid cuts. But when it comes
to questions about independence, Powell was asked about that. He
was even asked about Lisa Cook's court case that's headed
(14:59):
to the Supreme Court. He didn't comment on any of that,
and pushback saying that this decision was made independent of
politics and looking at the data. That data has clearly
shown that labor market risks have risen and that in
some way warrants a move towards neutral and a less
restrictive policy stance.
Speaker 2 (15:18):
Yeah, and pile talking about meeting by meeting that this
situation will continue, you know as they go forwards. In
terms of the Bank of England today, no change to
interest rates expected, but the focus is on guilt sales.
What are the markets going to be watching about this?
Speaker 11 (15:35):
So the number of the market is projecting at least
for this update when it comes to their quantitative tightening
program is for it to be reduced from one hundred
billion to around seventy billion annual pace a year. That's
probably going to be the focus of the decision today.
We know that these guilt sales in some way have
been complicating the liquidity in the back end of the
(15:55):
guilt market that it has risen to multi decade highs
in the last month alone. However, when it comes to
the rate decision and the policy moving forward, there really
wasn't any surprises in the labor market data or the
inflation data we've gotten this week, so we the market
in some way is expecting the Bank of England to
not necessarily guide for any further rate reductions into the
(16:18):
end of the year. The market actually isn't really penciling
in one for a few months time, headed well into
twenty twenty six, so it's really going to be more
about the quantitative tightening program and maybe what that says
about their confidence in the long end of the guild market.
Speaker 3 (16:31):
Okay, Valerie Titeler market supporter, thank you very much, Stay
with us. More from Bloomberg Daybreak Europe coming up after this.
Speaker 2 (16:41):
Now the world's biggest food company, Nesle, has been shaken
by scandal and management top people after years of strategic drift,
advising debt investors oppressing the incoming CEO, Philip Nevatil to
restore stability. Bloomberg's Dasha Afanasieva has been writing about the
challenges that he faces, and she joins us now. Good morning, Dasha.
So Navata was brought in as CEO to replace Lauren Frex,
(17:05):
who was fired after an undisclosed romantic relationship. We learned
this week that the company's own chairman will now retire
early and will be replaced by the former Zara boss,
Pablo Isler, from next month. So it's a new top team.
What's their most important job now?
Speaker 1 (17:22):
It's all changed at Nasslie. As you said in your intro,
Nasse since twenty two has kind of been adrift. I'm
talking about falling volumes, low sales, high costs, and the
task and the new management team is really to reignite growth.
And the task was the same really just over a
(17:44):
year ago when the previous CEO got appointed and he
had his pan in place, but it hasn't really fully
taken hold.
Speaker 3 (17:51):
Dasha. What did the scandal around Laura Frex and his
relationship expose about the company.
Speaker 1 (17:57):
It exposed very poor corporate governance and about a week
board because these things kind of happened under their watch
and maybe are too strong a chairman, and I think
it's raised for a lot of investors. It's raised questions
over whether that also explains these enforced errors that we've
had in recent years, things like the problems with the
(18:21):
vitamins and minerals business, things like contamination issues in French
mineral water and the overall sort of sluggish growth and
you know, Paul pricing that kind of thing.
Speaker 11 (18:34):
So see you.
Speaker 2 (18:34):
Philip Naverti spoke to staff yesterday. What did he say.
Speaker 1 (18:38):
He praised the company's global reach and its brands, but
he said, I'm going to come back later with the
plan to return us to growth or strong growth. So
it's a sort of watch this space kind of meeting
that finished half an hour.
Speaker 3 (18:54):
Early, which was of note in that sort of conversation
as well aside from the border turmoil at Nesle talk
to us about some of the other challenges the companies facing.
Of course, I'm thinking a Swiss company, tariff's clearly going
to be an issue for them.
Speaker 1 (19:08):
So Nestle's almost all of Nessi's supply chain is quite localized.
The exception, the major exception would be an espresso, which
is all produced in Switzerland, and America is a major
market for that, although they didn't actually fully break it out.
Over all, it's like a six billion Swiss frank business
I think that more broadly, But like every company, you know,
(19:31):
obviously they have raw materials coming from various countries, so
they still have to import things, but at least the
final products are typically made locally, certainly in America, so
that's a source of relief. But of course tariffs complicate
the picture for all global companies.
Speaker 3 (19:48):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:55):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (20:01):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (20:07):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 3 (20:16):
And I'm Stephen Carol. 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 (00:09):
This is the bloom Big Day BAQT podcast. Good morning,
It's Thursday, the eighteenth of September. I'm Caroline Hepkat in London.
Speaker 3 (00:15):
And I'm Stephen Caroline Brussels. Coming up today, Jerome Powell
rallies Federal Reserve rate setters to back a twenty five
basis point cut, as Trump's appointee Myron ups for fifty.
Speaker 2 (00:27):
The US President joins the King and Tech Royalty for
a glittering state banquet at Windsor Castle.
Speaker 3 (00:34):
Plus pulling the Plug, Disney takes Jimmy Kimmel's talk show
off air over remarks he made about Charlie Kirk's killing.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 3 (00:44):
The Federal Reserve Church. Jerome Powell has rallied his committee
of policymakers to back the Central Bank's first interest rate
cut of the year. The quarter point reduction came after
a significant slowdown in job growth and an unprecedented push
by the White House for much lower rates, but with
the effects of tariffs on inflation still uncertain, Powell made
clear that Fed officials will face difficult trade offs in
(01:06):
the coming months. As they consider whether to keep cutting.
Speaker 4 (01:09):
You can think of this in a way as a
risk management cut because if you look at the SEP,
actually the projections for growth this year next actually ticked
up just a little bit, and inflation and unemployment didn't
really move once. So what's different now. What's different now
is that you see a very different picture of the
risks to the labor market.
Speaker 3 (01:27):
The decision to cut rights was nearly unanimous, with the
loan descent coming from FED Governor Stephen Myron, a close
ally of Donald Trump, who favored a larger reduction. FED
Governors Christopher Waller and Michelle Bowman, who dissented in July
in favor of a rate cut, supported this move well.
Speaker 2 (01:43):
The Bank of England is expected to rein in its
quantitative tightening program amid concerns that its guilt sales are
worsening volatility in the bond market. Economists and investors are
expecting the Bank's Monastory Policy Committee to slow the speed
at which it reduces its whole things of government bonds
to seventy billion pounds a year, down from one hundred billion.
(02:05):
Officials may also decide to self view a long dated
guilts the Bank will announce the changes alongside its interest
rate decision today, where it's widely expected to hold rates
at four percent, a mid high inflation of three point
eight percent.
Speaker 3 (02:18):
In August, Britain's King Charles praised US President Donald Trump's
efforts to support Ukraine against tyranny. After a day of
lavish celebrations in honor of the special relationship, The UK
monarch underlined the strength of the ties between the two
countries in his speech at the state banquet.
Speaker 5 (02:37):
In two World Wars, we fought together to defeat the
forces of tyranny. Today, as a tyranny once again threatens Europe,
we and our allies stand together in support of Ukraine.
Coming to the terror aggression and secure peace.
Speaker 3 (02:59):
King Charles has come on Ukraine. Came after a day
of royal spectacle. The two heads of state, inspected troops,
rode in a horse drawn carriage and later a wreath
for the late Queen Elizabeth. The ceremony seems to have
impressed the US President.
Speaker 6 (03:13):
This is surely one of the highest honors of my life.
So she's effect for you, and so to respect for
your country for many decades, His Majesty, the King is
epitomized the fortitude, nobility, and the spirit of the British
monarchy and the British people.
Speaker 3 (03:29):
Donald Trump speaking at the state banquet and Windsor Castle
in diplomatic talks later today, the UK's Prime Minister, cair
Starmer hopes to press Trump on trade terms and the
war in Ukraine, although major breakthroughs aren't expected. The Prime
minister will do so without his top ambassador, who he
fired last week for his ties to the late Jeffrey Epstein.
(03:50):
The visit is also a chance for the two governments
to sign investment deals, with the British government announcing US
companies were planning one hundred and fifty billion pounds in
Esmond's to coincide with the occasion.
Speaker 2 (04:03):
Now Disney is taking Jimmy Kimmel's talk show off the
air indefinitely amid a backlash to remarks that he made
about the killing of Republican activist Charlie Kirk. The comments,
which focused on the response of the Trump supporting MAGA
movement to Kirk's killing, angered many right wing commentators and
brought criticism from members of the Trump administration. Following that
(04:26):
the head of the US broadcast Regulator told Podcasts host
Benny Johnson, there was a strong case to punish Kimmel
and Disney.
Speaker 7 (04:36):
From the moment that I have become shearman of the FCC,
I want to reinvigorate the public interest. And what people
don't understand is that the broadcasters, and you've gotten this right,
are entirely different than people that use other forms of communication.
They have a license granted by us at the FCC,
and that comes within an obligation to operate in the
public interest.
Speaker 2 (04:57):
That was FCC Chair Brendan cars Making on The Benny Show.
Disney's ABC network took Kimmel's show off air after next
Our Media, which owns dozens of USTv affiliates, said that
it would pull the program in definitely from its stations
over the remarks, which it said were offensive and insensitive.
In a statement, the Writer's Guilds of America criticized the move, saying, quote,
(05:21):
if free speech applied only to ideas we like, we
needn't have bothered to write it into the Constitution.
Speaker 3 (05:28):
European Union countries have agreed to open talks with the
UK and Canada on access to its new one hundred
and fifty billion euro defense fund. Bloomberg's Micalcubala has more The.
Speaker 8 (05:38):
Security Action for Europe program, known as SAFE, aims to
boost investment in the EU defense industry. Brussels will now
begin negotiations to allow British and Canadian firms to take
part in joint weapons projects funded by the plan. Other countries,
including Albania, Turkey and South Korea have also asked to join.
SAFE is designed to accelerate production of critical military equipment
(06:01):
such as drones or cyber defense. Nineteen new countries have
already applied for loans under the program. In Brussels and
Michalcobala Bloomberg.
Speaker 2 (06:10):
Radio, French unions will lead widespread down to austerity protests today,
That says newly elected Prime Minister Sebastia la Cornu searches
for political allies to help draw up a budget. All
major labor organizations have instructed members to demonstrate against spending
cuts proposed in July that they say amount to unprecedented brutality.
(06:34):
Cyril Chabanier, president of the French Confederation of Christian Workers,
says the protests are about sparking change.
Speaker 9 (06:43):
We are protesting primarily against the budget. That means we
really want to create pressure so that the budget presented
by Francois Bairou, which could be surprised by mister Lecornu,
will be profoundly modified. So it's that that is important
to place pressure so that we are understood.
Speaker 2 (07:02):
French trade unionist Cyril Chaboner speaking there. Lecornu is yet
to indicate though, which fiscal concessions he's willing to make
to the budget initially proposed by previous Prime Minister Francois Beiru,
who was forced to resign after losing a confidence vote
earlier this month.
Speaker 3 (07:19):
Meto wants to turn its smart glasses into a must
have product, with a new model boasting in built screens.
The social media giant is rebranding the product is AI Glasses,
with a price tag of seven hundred and ninety nine dollars.
Meta CEO Mark Zuckerberg says he's bringing super intelligence to
consumer electronics.
Speaker 10 (07:38):
This is going to be the most important technology in
our lifetimes. AI should serve people, not just be something
that sits in a data center automating large parts of society.
So we design our glasses to be able to empower
people with new capabilities as soon as they become possible.
Speaker 3 (07:59):
Zuckerberg. We're speaking at metas annual events to showcase new
technology the company's helping. The new display glasses will be
a stepping stone to full augmented reality glasses.
Speaker 2 (08:09):
Okay, those were a few of our top stories for
you this morning. So in terms of the markets, US
stock futures are up after the further rate cut yesterday.
NASA Future is in particular up by seven tenths of
one percent, and you did have global stocks rally on
the back of that cart with more penciled in treasuries
this morning, rallying a tad for spot zero six four
(08:30):
ten yields down two basis points. Bank of England not
expected to cut rates. It's all about quantitative tightening and
what they're doing in terms of their guilt sales reducing
those is the expectation. European stock futures are also up
this morning, four tenths of one percent, oil holding on
to declines that we saw yesterday. Break Read futures down
(08:52):
another three tenths of one percent this morning, weighing that
rate cut and increase US fuel Inventory's gold is also
download to tens this morning. Those are the markets in
a moment.
Speaker 3 (09:02):
More on the Fed and Bank of England decisions, plus
the nightmare at Nesle, the challenges facing the new top
team at the world's biggest food company. But I just
want to take a moment to talk a little bit
about the banquet at Windsor Castle. Needless to say, pretty
opulent affair in Saint Georgie's hole. One hundred and sixty
guest and I note more than fourteen hundred pieces of cutlery,
(09:23):
which I'm very glad that I was not involved in
having to wash or polish.
Speaker 2 (09:27):
Absolutely, but I think the key takeaway I watched it
last night, which is why I'm a little bleary eyed
this morning. President Chop was full of praise and admiration,
not just for the King but also for the UK
for the special relationship. He called it more than that
we like two notes in one chord, or two verses
of the same poem. Stephen, I don't think that the
UK could have had a better speech in diplomatic terms
(09:50):
from the US leader, and certainly if you listened with
a conservative or reform UK here so Britain has used
it's royal diplomacy in all of that pomp to really
create a genuinely warm feeling. Does that soft power now
bring economic benefits when you get to the nitty grinity
of the politics today, huge sums in terms of tech investment,
(10:12):
does that actually deliver for jobs and growth in the UK?
Did the UK get Is it getting a good deal
out of these tech sums?
Speaker 3 (10:21):
I mean, on a modulizer note, I solute your Britishness
that you stayed up late and sacrificed your sleep to
watch the stage banquet. It is a historic exactly, It's
a big moment. I mean, to be honest, I was
struck looking at it. Is that the despite the fact
that this was you know, the top tier list of guests,
all these CEOs, you know, it's even towards some from
Blackstone and all the tech CEOs we've talked about being there,
they couldn't see each other the table, that the table
(10:43):
dressings are so high that you would not have been
able to look at or speak to the person setting
opposite you, because I mean it looked nearly the same
height as the table itself with the pile.
Speaker 2 (10:52):
Again, did I watched it too closely? Because apparently it
was meant to look like a dragon. The table decorations,
yes they were. They everything was themed. Absolutely, everything was
meant to be a pointer to heritage, et cetera.
Speaker 3 (11:05):
And even though of course Donald Trump does not drink alcohol,
they did have a special nineteen forty five vintage port
hoverly after dinner drinks, which was meant to be a
nod to him being the forty fifth president of the
United States. As you say, every detail paid attention to
the focus, of course, shifting today to the more serious
conversations as that meeting coming up with Keir Starmer or
later on at a press conference, as well as plenty
(11:25):
more to come on Donald Trump's state visit to the UK.
Speaker 2 (11:29):
Now, let's bring you some details of the Federal Reserve
decision yesterday, with the US Central Bank signaling more cuts
are to come this year. This as we look ahead
to today's Bank of England decision, where rates are expected
to stay on hold at four percent. Our market supporter
value title joins us now for more, Rennie, good morning.
Valve the FED cut by a quarter point as markets expected.
(11:49):
What did Powell tell us about what happens next?
Speaker 11 (11:52):
Look, he was not as strong in his language about
the pace of rate cuts or even the door for
October being white open for yet another rate cut, and
that really kind of disappointed the equity market and the
treasury market at the end of the session, So he
wasn't super clear, and he also wasn't super clear that
when it comes to their dual mandate that the risks
(12:14):
to labor market now completely outweigh the risks to inflation.
When he was talking about the dual mandate, he has
said that the downside risks to unemployment have risen, but
the two mandates are moving more into an equal framework.
So there wasn't any big flashing sign out there that
for him, the labor market needed a quick adjustment in
(12:35):
policy rates. And actually Caroline, when he was asked about
whether they discussed fifty bases points and whether what he
felt about a fifty basis point cut, he said that
it had little support within the committee at all today
for a fifty basis point rate reduction and said that
you tend to do those things when you feel that
policy is out of place and you need to move quickly,
(12:56):
and that is not at all how I feel, so
to me and to the market, that meant that this
argument that Christopher Waller has put forward that the labor
market is flashing red and needs urgent rate cuts has
just not necessarily convinced the rest of the members yet,
and maybe even perhaps even Christopher Waller himself is less
convinced about that framework because he did not dissent at
(13:18):
this meeting. There was only one discent, Caroline. It came
from the new member, Stephen Myron, who voted for a
fifty basis point rate reduction. But Christopher Waller and Bowman,
who dissented in the previous decision, did not dissent this
time for a larger than expected rate cut. They did
vote for a twenty five basis point rate reduction, So
that to me is kind of the more duvish. The
(13:41):
leaders of the duvish camp previously, that being Christopher Waller,
might be less convinced in their case, perhaps after that
really hot retail sales figure we got two days ago, Valerie.
Speaker 3 (13:50):
I mean, a lot of the focus around this meeting
has been on the presence of Stephen Myron on that
policy making committee, and as you say, he was the dissenter.
He voted for fifty basis points as well. He'd come
from his job in the White House beforehand, and with
all of the questions around FED independence that were in
the background for this decision as well. I mean, how
significant is it that we only had one descent, I suppose,
(14:12):
and what does it mean for those questions around the
independence of the FED.
Speaker 11 (14:16):
Well, Myron not only dissented, but in his dot in
that dot plot, he not only wanted a fifty basis
point rate reduction. Yes, in yesterday's meeting, he wanted a
fifty basis point in October and a fifty basis point
in December. So he wants one hundred and fifty basis
points of rate reduction before year end. So in that
kind of way, there was a pretty strong standout on
(14:38):
the Governor Board from Stephen Myron. It just does not
seem that he has convinced any other members around him
that the market, the labor market is in a case
where it needs those rapid cuts. But when it comes
to questions about independence, Powell was asked about that. He
was even asked about Lisa Cook's court case that's headed
(14:59):
to the Supreme Court. He didn't comment on any of that,
and pushback saying that this decision was made independent of
politics and looking at the data. That data has clearly
shown that labor market risks have risen and that in
some way warrants a move towards neutral and a less
restrictive policy stance.
Speaker 2 (15:18):
Yeah, and pile talking about meeting by meeting that this
situation will continue, you know as they go forwards. In
terms of the Bank of England today, no change to
interest rates expected, but the focus is on guilt sales.
What are the markets going to be watching about this?
Speaker 11 (15:35):
So the number of the market is projecting at least
for this update when it comes to their quantitative tightening
program is for it to be reduced from one hundred
billion to around seventy billion annual pace a year. That's
probably going to be the focus of the decision today.
We know that these guilt sales in some way have
been complicating the liquidity in the back end of the
(15:55):
guilt market that it has risen to multi decade highs
in the last month alone. However, when it comes to
the rate decision and the policy moving forward, there really
wasn't any surprises in the labor market data or the
inflation data we've gotten this week, so we the market
in some way is expecting the Bank of England to
not necessarily guide for any further rate reductions into the
(16:18):
end of the year. The market actually isn't really penciling
in one for a few months time, headed well into
twenty twenty six, so it's really going to be more
about the quantitative tightening program and maybe what that says
about their confidence in the long end of the guild market.
Speaker 3 (16:31):
Okay, Valerie Titeler market supporter, thank you very much, Stay
with us. More from Bloomberg Daybreak Europe coming up after this.
Speaker 2 (16:41):
Now the world's biggest food company, Nesle, has been shaken
by scandal and management top people after years of strategic drift,
advising debt investors oppressing the incoming CEO, Philip Nevatil to
restore stability. Bloomberg's Dasha Afanasieva has been writing about the
challenges that he faces, and she joins us now. Good morning, Dasha.
So Navata was brought in as CEO to replace Lauren Frex,
(17:05):
who was fired after an undisclosed romantic relationship. We learned
this week that the company's own chairman will now retire
early and will be replaced by the former Zara boss,
Pablo Isler, from next month. So it's a new top team.
What's their most important job now?
Speaker 1 (17:22):
It's all changed at Nasslie. As you said in your intro,
Nasse since twenty two has kind of been adrift. I'm
talking about falling volumes, low sales, high costs, and the
task and the new management team is really to reignite growth.
And the task was the same really just over a
(17:44):
year ago when the previous CEO got appointed and he
had his pan in place, but it hasn't really fully
taken hold.
Speaker 3 (17:51):
Dasha. What did the scandal around Laura Frex and his
relationship expose about the company.
Speaker 1 (17:57):
It exposed very poor corporate governance and about a week
board because these things kind of happened under their watch
and maybe are too strong a chairman, and I think
it's raised for a lot of investors. It's raised questions
over whether that also explains these enforced errors that we've
had in recent years, things like the problems with the
(18:21):
vitamins and minerals business, things like contamination issues in French
mineral water and the overall sort of sluggish growth and
you know, Paul pricing that kind of thing.
Speaker 11 (18:34):
So see you.
Speaker 2 (18:34):
Philip Naverti spoke to staff yesterday. What did he say.
Speaker 1 (18:38):
He praised the company's global reach and its brands, but
he said, I'm going to come back later with the
plan to return us to growth or strong growth. So
it's a sort of watch this space kind of meeting
that finished half an hour.
Speaker 3 (18:54):
Early, which was of note in that sort of conversation
as well aside from the border turmoil at Nesle talk
to us about some of the other challenges the companies facing.
Of course, I'm thinking a Swiss company, tariff's clearly going
to be an issue for them.
Speaker 1 (19:08):
So Nestle's almost all of Nessi's supply chain is quite localized.
The exception, the major exception would be an espresso, which
is all produced in Switzerland, and America is a major
market for that, although they didn't actually fully break it out.
Over all, it's like a six billion Swiss frank business
I think that more broadly, But like every company, you know,
(19:31):
obviously they have raw materials coming from various countries, so
they still have to import things, but at least the
final products are typically made locally, certainly in America, so
that's a source of relief. But of course tariffs complicate
the picture for all global companies.
Speaker 3 (19:48):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:55):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (20:01):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (20:07):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 3 (20:16):
And I'm Stephen Carol. 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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