April 16, 2024 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Top Israeli military officials reasserted that their country has no choice but to respond to Iran's weekend drone and missile attack, even as European and US officials boosted their calls for Israel to avoid a tit-for-tat escalation that could provoke a wider war.
(2) China announced faster-than-expected economic growth in the first quarter – along with some numbers that suggest things are set to get tougher in the rest of the year.
(3) Federal Reserve Bank of New York President John Williams has told Blomberg the central bank will likely start lowering interest rates this year if inflation continues to gradually come down.
(4) Goldman Sachs's back-to-basics approach is paying off as it posted profits that vaulted past expectations.
(5) The UK will criminalise the creation of sexually explicit deepfake images as part of plans to tackle violence against women.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Daybacurate podcast, available every morning on Apple, Spotify or wherever
you listen. It's Tuesday, the sixteenth of April in London.
I'm Caroline Hepka.
Speaker 2 (00:18):
And I'm Stephen Carroll. Coming up today. Military officials in
Israel vowed to strike back against Iran as allies are
a restraint.
Speaker 1 (00:26):
China's growth beats expectations, but a strong start to the
year is already fading.
Speaker 2 (00:31):
Plus, the UK announces plans to criminalize the creation of
intimate deep fake images, but how easy will it be
to enforce.
Speaker 1 (00:39):
Let's start with a roundup of our top stories.
Speaker 2 (00:42):
Israel's top military commander says the country has no choice
but to hit back after Iran's weekend drone and missile attack.
In a speech to troops at the airbase, which was
targeted on Saturday nights at Strike, Herzy Halev said the
missiles fired into Israel will be met with a response.
His comments come as US and European officials have boosted
(01:03):
their calls to avoid an escalation. Is what UK Prime
Minister Ishi Sunak tell the House of Commons.
Speaker 3 (01:08):
We are working urgently with our allies to de escalate
the situation and prevent further bloodshed. We want to see
karma heads prevail, and we are directing all our diplomatic
efforts to that end. Yesterday I spoke to my fellow
G seven leaders. We are united in our condemnation of
this attack. We discussed further potential diplomatic measures which we
(01:31):
will be working together to coordinate in the coming days.
I will also shortly be speaking to Prime Minister Netanyahoo
to express our solidarity with Israel in the face of
this attack and to discuss how we can prevent further
escalation soon.
Speaker 2 (01:46):
Next comments Echo, there was a French President, Emmanuel Macron,
who says France will do everything it can to avoid
flare ups. Meanwhile, around Deputy Foreign Minister vowed to counter
any Israeli attack with a more severe, faster, and more
immediate blas in.
Speaker 1 (02:01):
The United States. Events in the Middle East mean a
month's long Republican blockade of military aid for key allies
could be about to end, but getting a bill over
the line still isn't a done deal. As Bloomberg's head
backs to reports.
Speaker 4 (02:15):
Speaker Mike Johnson is planning separate votes this week on
new aid to both Israel and Ukraine. This in an
attempt to assemble fragile coalitions to speed weaponry to both places.
Speaker 5 (02:26):
We have terrorist in tyrants and terrible leaders around the world.
Speaker 2 (02:30):
Like Putin and g and in Iran, and they're watching
to see if America will stand up for its allies
and in our own interest around the globe, and we will.
Speaker 4 (02:39):
Now, his party majority is very slim, and he may
need Democrat support, and he very well may get it.
The mpasse over eight has been dragging on since October
ed Baxter Bloomberg Radio.
Speaker 2 (02:52):
China's economy grew faster than expected in the first three
months of twenty twenty four, with GDP climbing five point
three percent from a year earlier, but the surprisingly strong
numbers were offset by industrial production and retail sales figures
for March that were weaker than forecast. Blackrocks Vice chairman
Philip Hildebrand says one strong print doesn't affect underlying issues
(03:14):
over time.
Speaker 6 (03:14):
The challenge is going to be this domestic demand problem
and of course the fact that China is really in deflation.
So these are big challenges. And then when you look
Further down the line you look at population growth and
so forth, you know, you really see growth declining on
a structural basis, and that's going to be a challenge
going forward. So I'd say this as roughly as expected
(03:35):
with this big caveat around domestic demand.
Speaker 2 (03:39):
Philip Helderbrand added many of these challenges are far from
unique to China and reflect the state of the global economy.
The offshore you on held losses having dipped earlier after
the week PBOC fixing.
Speaker 1 (03:52):
Now the European Union is launching a fleet of trade
investigations into China, saying that it has been played for years.
The block is threatening tariffs on electric vehicles and investigating
potentially illegal Chinese support for wind, solar, rail and the
medical sectors. Our Greater China editor John lu says it's timing.
(04:13):
Alongside German leader Earla Schultz's visit to Beijing is.
Speaker 7 (04:17):
Clear exports is something Beijing is hoping will be a
pillar that it can depend on to get the economy
going again. That's not going to work if tariffs are
being put in place in Europe.
Speaker 1 (04:30):
New ads that Schultz and she meet earlier met earlier
today and that the German leader had said that trade
would be top of the agenda. Beijing has dismissed charges
that the rapid growth of its ev industry was due
to government's subsidies as groundless, instead pointing to its innovation prowess.
Speaker 2 (04:48):
The New York FAD president John Williams still expects the
Central Bank to cut interest rates this year. His comments
come as a key US inflation measure rose by more
than expected in March, prompting traders to scale ail back
bets on cutts. In twenty twenty four, in an exclusive
interview with Bloomberg, John Williams said he expects rate reductions
this year as inflation continues to gradually come down.
Speaker 8 (05:11):
I think Marty policy is working at the rates that
we have now, so I think I think Marte policy
is in a good place. We will need a start
a process at some point to bring interest rates back
to more normal levels, and my own view is that, well,
you know that process will likely start this year, but
again it's going to be driven driven by the data
(05:33):
in achieving our goals.
Speaker 2 (05:34):
Speaking to Bloomberg's Mike McKee, Williams also pointed to strong
consumer spending as evidence of the country's economic strength. His
comments are somewhat at odds with those of fellow voting
member Mary Daily, who says there's no urgency to alter
interest rates.
Speaker 1 (05:50):
Analyst had expected Goldman Sachs's first quarter profit to drop. Instead,
net income rose by twenty eight percent, the impressive showing
BOOS CEO David Solomon, who had faced a chorus of
criticism about his leadership.
Speaker 9 (06:05):
We feel very good about our first quarter results, which
reflect the strength of our world class and interconnected franchises
and the earnings power of our firm. This performance was
aided by the swift actions we took last year to
narrow our strategic focus and played our core strengths.
Speaker 1 (06:22):
Solomon also echoed other US finance CEO's caution about the
stock market's record highs in spite of major global headwinds.
Gomm Sax's shares rose as much as six percent, the
most intra day since December, before pairing some of those gains.
Speaker 2 (06:39):
The UK government is cracking down on explicit deep fake
images online. It's part of a set of reforms aimed
at preventing violence against women. Poomberg's Tea out of Bio
has the details.
Speaker 10 (06:50):
Creating and sharing sexually explicit AI generated images could now
be punishable with jail time in the UK. That's according
to the Ministry of Justice, who aiming to stem the
rise of deep fake pictures and videos made possible by
rapidly developing technology. A potential new law will mean creating
such deep fakes without consent, even if the images are
(07:12):
not shared, could mean prosecution, an unlimited fine or prison.
People familiar with the matter say the government is also
planning talks with big tech giants like Apple and Meta
to persuade them to sign a voluntary charter granting parents
more control over their teen's social media use. In London,
Tea added Bayo Bloomberg Radio.
Speaker 1 (07:34):
And those are our top stories this morning. On the
markets this hour, the MISI Asia Pacific index is currently
down one point eight percent, US SOX fifty futures also
dropping one point two percent, and ten year US treasury
yields fairly steady at four point sixty one percent this morning.
Speaker 2 (07:50):
In a moment, we'll get the latest on the tensions
in the Middle East, plus some analysis of those Chinese
economic figures out this morning. But another story that caught
our eye today, Alfa Romeo has been forced to change
the names of one of its cars after it annoyed
the Italian government. So the suv was originally named Milano,
but last week the Industry Minister head out at the
(08:11):
CEO of Stillants, which owns the brand, for using the
name because the car is made in Poland. As a result,
CEO Carlistavirus has said the car is going to be
renamed Junior. He said they worked over the weekend to
change the name. He said it's a signal of appeasement
as they have a big library of names. But it's
been an issue that the company's been facing criticism over
(08:31):
because they have been moving jobs abroad, essentially to lower
production sites.
Speaker 1 (08:36):
And if you frustrate the unions and it becomes a
sort of political issue, then I mean that's the trouble,
isn't it, Because Italian workers have been striking because of
the loss of jobs. So yes, amazing what is in
a name and how frustrating it can be to politicians they.
Speaker 2 (08:54):
Said no to Milano. Anyway, More on that story you'll
find on Bloomberg to Common on the terminal, But let's
go back to our top story now. In Israeli is
still weighing its options on how to respond to around
weekend drone and missile attack. European and US leaders have
called for restraint, but Israeli military officials say the country
has no choice but to respond. Our Meadileas Breaking News
(09:15):
editor Patrick Sykes is with us for more. Patrick, what
do we know about the options that are under consideration
by Israel morning?
Speaker 5 (09:23):
Yes, the Israeli War Cabinet met for a second day yesterday,
but there's still no final position yet. Israeli official saying
at least publicly that, as you say, they have no
choice to respond, but keeping relatively quiet on the specific options.
They're also pointing out their respond at a time of
their choosing. I think we can think about the sort
(09:45):
of range of options on their table from the least
escalatory right through to the most as being you know,
on the former side of the spectrum, a direct strike
on something related to the Iranian weekend strike which involved
missiles and drones, through to obviously Iran's nuclear program, are
(10:05):
much more much longer term, longer term thorn in Israel.
Israel's side and something that it sees as an extential threat.
The closer we are to the lower end of that spectrum,
I think the greater the chances that this either ends
there or fizzles out, the great the further we are
to the latter. I think the in term we're going
(10:27):
to see Iran also feel that it needs to respond,
and so it continues.
Speaker 1 (10:32):
Yeah, and so there have also been a lot of
calls for restraint from Israel's allies, and perhaps that is weighing. Then,
given you know that the deliberations and how difficult they are,
is there any sign that the calls around restraint are
weighing on the decision making weighing on Benjamin at Niau, I.
Speaker 5 (10:53):
Think only in an absence we could say. Really the
only sign of that is that Netta, who's personal term
on this has been relatively more measured compared with some
of the right wing parts of his cabinet. One cabinet
member yesterday said Israel should go berserk as a deterrance
to Iran from doing future strikes like that of last weekend.
(11:17):
I think the odd thing here is it's kind of
parallel with the Iranian position of a few weeks ago,
right when they were considering how to respond to this
suspected Israeli attack on their consulate in Damascus, where you
had parts of the government, the regime officials, saying that
we need to act right away, we need to be
really aggressive, and then others saying, hang on, we need
(11:38):
to show restraint, we need to think about this more strategically.
So I think, in an odd parallel way, the fate
of the whole issue is going to depend on which
side of those cabinets and power dynamics went out.
Speaker 2 (11:54):
Padrick, what's the latest that we've heard from Iran on this?
What are they preparing for?
Speaker 5 (12:00):
Yeah, their message is and it has been from the start, really,
it has been one of the Terrans saying they're very
keen to frame what they did as a one off,
not as a start of a broader conflict. They say
they're not looking for a broader conflict. They also frame
what they did as an act of self defense, as
I said, in reaction to that strike on the consulate,
(12:23):
But they are at the same time given this veiled
threat that if Israel does respond, then we will we
will be forced to do so ourselves as well. And
obviously it's that Shane reaction risk that's the real risk here,
rather than I think any individual strike we had the
Uranian deputy Foreign Minister overnight, saying that they would counter
(12:46):
any Israeli attack with a quote more severe, faster and
more immediate blow. So, you know, rather than the last time,
where Iran waited I think around twelve days not quite
two weeks before undertaking its attack, He's given the impression,
you know, with each retaliation, the gaps between them are
going to get strong, going to get shorter, and the
(13:06):
gravity of them is only going to get greater.
Speaker 1 (13:08):
That's the risk, Okay, indeed the risk. Patrick, Thank you
so much for being with us. Patrick Sykes is our
Middle East Breaking News editor.
Speaker 2 (13:17):
To China next, where the economy grew more than expected
in the first three months of the year, growth boosted
by the industrial sector, but there were signs of weakness
emerging in March. Our Asia Economics correspondent Katia Dimitrieva joins
us now for more. Katy, are great to have you on.
What's the good news? First of all in these numbers, well, we.
Speaker 11 (13:34):
Can talk about factories. I think that was the one
piece of very good, very strong news in the GDP report.
Of course, growth coming in higher than any economist had forecast,
and it was really led by this portion of GDP,
which is secondary market so secondary industry is you could
(13:56):
think of that as factories and exports. We kind of
knew that's story going into these numbers because of the
strong exports growth in the first two months of the year,
but already kind of sizzling in fizzling rather in March.
You look outside of manufacturing, though, and there isn't really
much to be very happy about in the economy consumer side.
(14:18):
It was particularly weak when it came to retail sales,
real estate market also sales and prices declining further. And
even on the headline GDP, you know, we look at
the effect of deflation, the effect of prices kind of
being lower in the past few quarters, and the GDP
deflator actually was below zero again for another quarter. So
(14:43):
this is all around. You know. The headline number is good,
Factories are strong, Manufacturing demand abroad is strong, particularly in
the US, but there are so many other, so many
other headwinds this year for China.
Speaker 1 (14:58):
Yeah, absolutely, so maybe the on some thin ice. The
other issue the German chance that Olaf Schultz has met
with the Chinese president she after issuing this warning about
over capacity and the treatment of foreign firms. It comes
as the EUS also launching all of these investigations into China.
It was Margareta Vesiga who talked about, you know, the
(15:19):
EU being played and that teaches you a lesson. I mean,
that's quite change in tone by Europe towards China.
Speaker 11 (15:27):
Yeah, and these two things are in fact connected. When
you have an economy like China that's already under a
lot of pressure from the West, both the US and
Europe to stop this kind of you know, they say
over capacity issue, but what that really means is that
Western nations are concerned about dumping about China kind of
(15:51):
inflating by helping local companies, domestic companies over foreign companies,
kind of lower their prices and export the goods into
markets where they're going to be competing with the US
and with the European companies. And so if you have
an economy that's driven largely by that, and that's really
the one leg on the three leg stool, if you
(16:12):
want to say, that's going to be supporting the economy
throughout the year. Of course these other countries are going
to be. Their ears are kind of perking up right now,
probably when they saw this data and thinking, okay, what
does this mean for the rest of the year. This
is something that US Treasury Secretary Jennet Yellen also mentioned,
as my colleague Eric Martin reported very same issue will
be coming up the IMF meetings.
Speaker 2 (16:36):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (16:42):
Look for us on your podcast feed every morning on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 2 (16:48):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (16:54):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (17:02):
I'm Caroline Hepka 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. This is the Bloomberg
Daybacurate podcast, available every morning on Apple, Spotify or wherever
you listen. It's Tuesday, the sixteenth of April in London.
I'm Caroline Hepka.
Speaker 2 (00:18):
And I'm Stephen Carroll. Coming up today. Military officials in
Israel vowed to strike back against Iran as allies are
a restraint.
Speaker 1 (00:26):
China's growth beats expectations, but a strong start to the
year is already fading.
Speaker 2 (00:31):
Plus, the UK announces plans to criminalize the creation of
intimate deep fake images, but how easy will it be
to enforce.
Speaker 1 (00:39):
Let's start with a roundup of our top stories.
Speaker 2 (00:42):
Israel's top military commander says the country has no choice
but to hit back after Iran's weekend drone and missile attack.
In a speech to troops at the airbase, which was
targeted on Saturday nights at Strike, Herzy Halev said the
missiles fired into Israel will be met with a response.
His comments come as US and European officials have boosted
(01:03):
their calls to avoid an escalation. Is what UK Prime
Minister Ishi Sunak tell the House of Commons.
Speaker 3 (01:08):
We are working urgently with our allies to de escalate
the situation and prevent further bloodshed. We want to see
karma heads prevail, and we are directing all our diplomatic
efforts to that end. Yesterday I spoke to my fellow
G seven leaders. We are united in our condemnation of
this attack. We discussed further potential diplomatic measures which we
(01:31):
will be working together to coordinate in the coming days.
I will also shortly be speaking to Prime Minister Netanyahoo
to express our solidarity with Israel in the face of
this attack and to discuss how we can prevent further
escalation soon.
Speaker 2 (01:46):
Next comments Echo, there was a French President, Emmanuel Macron,
who says France will do everything it can to avoid
flare ups. Meanwhile, around Deputy Foreign Minister vowed to counter
any Israeli attack with a more severe, faster, and more
immediate blas in.
Speaker 1 (02:01):
The United States. Events in the Middle East mean a
month's long Republican blockade of military aid for key allies
could be about to end, but getting a bill over
the line still isn't a done deal. As Bloomberg's head
backs to reports.
Speaker 4 (02:15):
Speaker Mike Johnson is planning separate votes this week on
new aid to both Israel and Ukraine. This in an
attempt to assemble fragile coalitions to speed weaponry to both places.
Speaker 5 (02:26):
We have terrorist in tyrants and terrible leaders around the world.
Speaker 2 (02:30):
Like Putin and g and in Iran, and they're watching
to see if America will stand up for its allies
and in our own interest around the globe, and we will.
Speaker 4 (02:39):
Now, his party majority is very slim, and he may
need Democrat support, and he very well may get it.
The mpasse over eight has been dragging on since October
ed Baxter Bloomberg Radio.
Speaker 2 (02:52):
China's economy grew faster than expected in the first three
months of twenty twenty four, with GDP climbing five point
three percent from a year earlier, but the surprisingly strong
numbers were offset by industrial production and retail sales figures
for March that were weaker than forecast. Blackrocks Vice chairman
Philip Hildebrand says one strong print doesn't affect underlying issues
(03:14):
over time.
Speaker 6 (03:14):
The challenge is going to be this domestic demand problem
and of course the fact that China is really in deflation.
So these are big challenges. And then when you look
Further down the line you look at population growth and
so forth, you know, you really see growth declining on
a structural basis, and that's going to be a challenge
going forward. So I'd say this as roughly as expected
(03:35):
with this big caveat around domestic demand.
Speaker 2 (03:39):
Philip Helderbrand added many of these challenges are far from
unique to China and reflect the state of the global economy.
The offshore you on held losses having dipped earlier after
the week PBOC fixing.
Speaker 1 (03:52):
Now the European Union is launching a fleet of trade
investigations into China, saying that it has been played for years.
The block is threatening tariffs on electric vehicles and investigating
potentially illegal Chinese support for wind, solar, rail and the
medical sectors. Our Greater China editor John lu says it's timing.
(04:13):
Alongside German leader Earla Schultz's visit to Beijing is.
Speaker 7 (04:17):
Clear exports is something Beijing is hoping will be a
pillar that it can depend on to get the economy
going again. That's not going to work if tariffs are
being put in place in Europe.
Speaker 1 (04:30):
New ads that Schultz and she meet earlier met earlier
today and that the German leader had said that trade
would be top of the agenda. Beijing has dismissed charges
that the rapid growth of its ev industry was due
to government's subsidies as groundless, instead pointing to its innovation prowess.
Speaker 2 (04:48):
The New York FAD president John Williams still expects the
Central Bank to cut interest rates this year. His comments
come as a key US inflation measure rose by more
than expected in March, prompting traders to scale ail back
bets on cutts. In twenty twenty four, in an exclusive
interview with Bloomberg, John Williams said he expects rate reductions
this year as inflation continues to gradually come down.
Speaker 8 (05:11):
I think Marty policy is working at the rates that
we have now, so I think I think Marte policy
is in a good place. We will need a start
a process at some point to bring interest rates back
to more normal levels, and my own view is that, well,
you know that process will likely start this year, but
again it's going to be driven driven by the data
(05:33):
in achieving our goals.
Speaker 2 (05:34):
Speaking to Bloomberg's Mike McKee, Williams also pointed to strong
consumer spending as evidence of the country's economic strength. His
comments are somewhat at odds with those of fellow voting
member Mary Daily, who says there's no urgency to alter
interest rates.
Speaker 1 (05:50):
Analyst had expected Goldman Sachs's first quarter profit to drop. Instead,
net income rose by twenty eight percent, the impressive showing
BOOS CEO David Solomon, who had faced a chorus of
criticism about his leadership.
Speaker 9 (06:05):
We feel very good about our first quarter results, which
reflect the strength of our world class and interconnected franchises
and the earnings power of our firm. This performance was
aided by the swift actions we took last year to
narrow our strategic focus and played our core strengths.
Speaker 1 (06:22):
Solomon also echoed other US finance CEO's caution about the
stock market's record highs in spite of major global headwinds.
Gomm Sax's shares rose as much as six percent, the
most intra day since December, before pairing some of those gains.
Speaker 2 (06:39):
The UK government is cracking down on explicit deep fake
images online. It's part of a set of reforms aimed
at preventing violence against women. Poomberg's Tea out of Bio
has the details.
Speaker 10 (06:50):
Creating and sharing sexually explicit AI generated images could now
be punishable with jail time in the UK. That's according
to the Ministry of Justice, who aiming to stem the
rise of deep fake pictures and videos made possible by
rapidly developing technology. A potential new law will mean creating
such deep fakes without consent, even if the images are
(07:12):
not shared, could mean prosecution, an unlimited fine or prison.
People familiar with the matter say the government is also
planning talks with big tech giants like Apple and Meta
to persuade them to sign a voluntary charter granting parents
more control over their teen's social media use. In London,
Tea added Bayo Bloomberg Radio.
Speaker 1 (07:34):
And those are our top stories this morning. On the
markets this hour, the MISI Asia Pacific index is currently
down one point eight percent, US SOX fifty futures also
dropping one point two percent, and ten year US treasury
yields fairly steady at four point sixty one percent this morning.
Speaker 2 (07:50):
In a moment, we'll get the latest on the tensions
in the Middle East, plus some analysis of those Chinese
economic figures out this morning. But another story that caught
our eye today, Alfa Romeo has been forced to change
the names of one of its cars after it annoyed
the Italian government. So the suv was originally named Milano,
but last week the Industry Minister head out at the
(08:11):
CEO of Stillants, which owns the brand, for using the
name because the car is made in Poland. As a result,
CEO Carlistavirus has said the car is going to be
renamed Junior. He said they worked over the weekend to
change the name. He said it's a signal of appeasement
as they have a big library of names. But it's
been an issue that the company's been facing criticism over
(08:31):
because they have been moving jobs abroad, essentially to lower
production sites.
Speaker 1 (08:36):
And if you frustrate the unions and it becomes a
sort of political issue, then I mean that's the trouble,
isn't it, Because Italian workers have been striking because of
the loss of jobs. So yes, amazing what is in
a name and how frustrating it can be to politicians they.
Speaker 2 (08:54):
Said no to Milano. Anyway, More on that story you'll
find on Bloomberg to Common on the terminal, But let's
go back to our top story now. In Israeli is
still weighing its options on how to respond to around
weekend drone and missile attack. European and US leaders have
called for restraint, but Israeli military officials say the country
has no choice but to respond. Our Meadileas Breaking News
(09:15):
editor Patrick Sykes is with us for more. Patrick, what
do we know about the options that are under consideration
by Israel morning?
Speaker 5 (09:23):
Yes, the Israeli War Cabinet met for a second day yesterday,
but there's still no final position yet. Israeli official saying
at least publicly that, as you say, they have no
choice to respond, but keeping relatively quiet on the specific options.
They're also pointing out their respond at a time of
their choosing. I think we can think about the sort
(09:45):
of range of options on their table from the least
escalatory right through to the most as being you know,
on the former side of the spectrum, a direct strike
on something related to the Iranian weekend strike which involved
missiles and drones, through to obviously Iran's nuclear program, are
(10:05):
much more much longer term, longer term thorn in Israel.
Israel's side and something that it sees as an extential threat.
The closer we are to the lower end of that spectrum,
I think the greater the chances that this either ends
there or fizzles out, the great the further we are
to the latter. I think the in term we're going
(10:27):
to see Iran also feel that it needs to respond,
and so it continues.
Speaker 1 (10:32):
Yeah, and so there have also been a lot of
calls for restraint from Israel's allies, and perhaps that is weighing. Then,
given you know that the deliberations and how difficult they are,
is there any sign that the calls around restraint are
weighing on the decision making weighing on Benjamin at Niau, I.
Speaker 5 (10:53):
Think only in an absence we could say. Really the
only sign of that is that Netta, who's personal term
on this has been relatively more measured compared with some
of the right wing parts of his cabinet. One cabinet
member yesterday said Israel should go berserk as a deterrance
to Iran from doing future strikes like that of last weekend.
(11:17):
I think the odd thing here is it's kind of
parallel with the Iranian position of a few weeks ago,
right when they were considering how to respond to this
suspected Israeli attack on their consulate in Damascus, where you
had parts of the government, the regime officials, saying that
we need to act right away, we need to be
really aggressive, and then others saying, hang on, we need
(11:38):
to show restraint, we need to think about this more strategically.
So I think, in an odd parallel way, the fate
of the whole issue is going to depend on which
side of those cabinets and power dynamics went out.
Speaker 2 (11:54):
Padrick, what's the latest that we've heard from Iran on this?
What are they preparing for?
Speaker 5 (12:00):
Yeah, their message is and it has been from the start, really,
it has been one of the Terrans saying they're very
keen to frame what they did as a one off,
not as a start of a broader conflict. They say
they're not looking for a broader conflict. They also frame
what they did as an act of self defense, as
I said, in reaction to that strike on the consulate,
(12:23):
But they are at the same time given this veiled
threat that if Israel does respond, then we will we
will be forced to do so ourselves as well. And
obviously it's that Shane reaction risk that's the real risk here,
rather than I think any individual strike we had the
Uranian deputy Foreign Minister overnight, saying that they would counter
(12:46):
any Israeli attack with a quote more severe, faster and
more immediate blow. So, you know, rather than the last time,
where Iran waited I think around twelve days not quite
two weeks before undertaking its attack, He's given the impression,
you know, with each retaliation, the gaps between them are
going to get strong, going to get shorter, and the
(13:06):
gravity of them is only going to get greater.
Speaker 1 (13:08):
That's the risk, Okay, indeed the risk. Patrick, Thank you
so much for being with us. Patrick Sykes is our
Middle East Breaking News editor.
Speaker 2 (13:17):
To China next, where the economy grew more than expected
in the first three months of the year, growth boosted
by the industrial sector, but there were signs of weakness
emerging in March. Our Asia Economics correspondent Katia Dimitrieva joins
us now for more. Katy, are great to have you on.
What's the good news? First of all in these numbers, well, we.
Speaker 11 (13:34):
Can talk about factories. I think that was the one
piece of very good, very strong news in the GDP report.
Of course, growth coming in higher than any economist had forecast,
and it was really led by this portion of GDP,
which is secondary market so secondary industry is you could
(13:56):
think of that as factories and exports. We kind of
knew that's story going into these numbers because of the
strong exports growth in the first two months of the year,
but already kind of sizzling in fizzling rather in March.
You look outside of manufacturing, though, and there isn't really
much to be very happy about in the economy consumer side.
(14:18):
It was particularly weak when it came to retail sales,
real estate market also sales and prices declining further. And
even on the headline GDP, you know, we look at
the effect of deflation, the effect of prices kind of
being lower in the past few quarters, and the GDP
deflator actually was below zero again for another quarter. So
(14:43):
this is all around. You know. The headline number is good,
Factories are strong, Manufacturing demand abroad is strong, particularly in
the US, but there are so many other, so many
other headwinds this year for China.
Speaker 1 (14:58):
Yeah, absolutely, so maybe the on some thin ice. The
other issue the German chance that Olaf Schultz has met
with the Chinese president she after issuing this warning about
over capacity and the treatment of foreign firms. It comes
as the EUS also launching all of these investigations into China.
It was Margareta Vesiga who talked about, you know, the
(15:19):
EU being played and that teaches you a lesson. I mean,
that's quite change in tone by Europe towards China.
Speaker 11 (15:27):
Yeah, and these two things are in fact connected. When
you have an economy like China that's already under a
lot of pressure from the West, both the US and
Europe to stop this kind of you know, they say
over capacity issue, but what that really means is that
Western nations are concerned about dumping about China kind of
(15:51):
inflating by helping local companies, domestic companies over foreign companies,
kind of lower their prices and export the goods into
markets where they're going to be competing with the US
and with the European companies. And so if you have
an economy that's driven largely by that, and that's really
the one leg on the three leg stool, if you
(16:12):
want to say, that's going to be supporting the economy
throughout the year. Of course these other countries are going
to be. Their ears are kind of perking up right now,
probably when they saw this data and thinking, okay, what
does this mean for the rest of the year. This
is something that US Treasury Secretary Jennet Yellen also mentioned,
as my colleague Eric Martin reported very same issue will
be coming up the IMF meetings.
Speaker 2 (16:36):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (16:42):
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and anywhere else you get your podcasts.
Speaker 2 (16:48):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (16:54):
Our flagship New York station is also available on your
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Speaker 2 (17:02):
I'm Caroline Hepka 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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