No Ukraine Breakthrough, Global Stocks Record High, China Holds Taiwan Drills

Your morning briefing, the business news you need in just 15 minutes.

On today's podcast:

(1) President Donald Trump said he made “a lot of progress” in talks with Ukrainian President Volodymyr Zelenskiy over a possible peace deal, but that it might take a few weeks to get it done and there’s no set timeline.

(2) Global stocks held at record highs, while silver rallied to a new peak before turning sharply lower as trading winds down heading into year-end.

(3) In the UK, opposition parties are calling for British-Egyptian democracy activist Alaa Abdel Fattah to be deported, after it emerged that he had posted social media messages over a decade ago, calling for Zionists to be killed.

(4) Thierry Breton, the former European Union official who was sanctioned last week by the Trump administration, said the bloc must resist US attempts to influence its legislation aimed at regulating social media platforms.

(5) China kicked off military maneuvers around Taiwan that will include live-fire drills, a move that comes after the US announced one of its biggest arms packages ever for the self-run democracy.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:10):
This is the Bloomberg Daybreak Ero podcast. Good morning, It's Monday,
the twenty ninth of December. I'm Stephen Caroll in London.
Coming up today Donald Trump. Holl's face to face talks
at Vladimir Zlenski. As sticking points remain in the Ukraine
peace plan. Global stocks continue their rise, with precious metals
and copper joining the end of year rally, plus a

(00:31):
stern warning. China kicks off military drills around Taiwan following
a US arms deal. Let's start with a roundup of
our top stories. A Russia Ukraine peace deal is closer
than ever, according to the US President Donald Trump made
the pronouncement after hosting his Ukrainian counterpart, Vladimir Zelenski for
talks in Florida. Speaking after the meeting, Trump offered an

(00:53):
upbeat assessment of a possible peace deal, but said it
may take a few weeks to finalize.

Speaker 3 (00:58):
I really believe we're probably missed a president closer than
by far closer than ever before with both parties. We
had sometimes when he was close and president, butten wasn't
then when that president button was close and he wasn't
you saw that in the White House, But I think
they both want to see it happen.

Speaker 2 (01:19):
President Trump there, speaking as v Vladimir Zelenski said the
peace framework is ninety percent to greed and the US
Ukraine security guarantees are one hundred percent of greed, but
the key issues relating to territory remain unresolved. The US
president says he's now aiming to convene a meeting with
Zelenski and European leaders in January. Global stocks have risen

(01:41):
to yet another record high as a much expected year
end rally took hold the MSCILE Country World Index steady
and age after climbing by one point four percent last
week as the tech sector led the gains. The moves
in the stock market came as silver gyrated after smashing
through eighty dollars announce for the first time, powered by
speculative trades in a persistent mismatch between supply and demand.

(02:03):
It's currently trading just slightly below that level. Meanwhile, copper
is also surged towards a record thirteen thousand dollars a
ton on the London Metal Exchange in a stunning end
of ye rally. Fueled by concerns over tighter supply. Gainst
top fifteen percent in December as investors bet that are
rushed to get metal to the US ahead of a
possible import tariff will force buyers elsewhere to pay more.

(02:28):
In the UK, opposition parties are calling for a British
Egyptian democracy activist, Allah Abdel Fatta to be deported after
it emerged that he had posted social media mesages over
a decade ago calling for Zionists to be killed. Fata
returned to the UK on Friday after being detained for
six years in Egypt on charges of spreading false news.
He was pardoned after years of lobbying by conservative and

(02:49):
labor governments. Toy leader Kemmi Baideno Can Reform UK's Nigel
Farage have called for the Home Secretary to look into
whether the Egyptian dissident can be stripped of his UK
citizenship sworted. In a statement, Fata has apologized for the posts,
some of which he said had been completely twisted out
of their meeting. A former EU official hit with the

(03:09):
US visa ban has called on the block to fight back.
Terry Breton says that you should resist US attempts to
influence its legislation aimed at regulating social media. Speaking of
Francis Teafan television, Breton said counteraction is needed.

Speaker 4 (03:26):
They cannot force us to change laws that we voted
for democratically, just to please, to please who, to please
the US social media platforms. No, we must stand up,
we must resist.

Speaker 2 (03:40):
That was former EU Digital chief Terry Breton, speaking on
French television yesterday. Recently, the US administration imposed visa bans
on Breton, as well as several activists, describing their attempts
to fight online hate speech as censorship aimed at American
tech companies. Breton went on to say that he has
received widespread political backing following the US visa ban announcement.

(04:04):
Bank of America's CEO expects the Trump administration to de
escalate trade tensions next year after tariff related shocks in
twenty twenty five. Speaking to CBS News, Brian moynihan says
he expects an average of fifteen percent tariffs for the
broad base of countries, with higher rates for those that
won't commit to lowering non tariff barriers.

Speaker 5 (04:25):
You're starting to see the resolution of the discussions in
the fifteen percent here seventeen different numbers. When you put China,
Chin is a different question because the national security interests,
the rare orse minerals, magnet's batteries, just the AI all
that stuff.

Speaker 6 (04:41):
It's a very different case.

Speaker 2 (04:43):
Bank of America's Brian moynihan, speaking there to CBS has
faced the nation. In April, Trump announced a baseline rate
of ten percent tariffs on all imports into the US.
Bloomberg Economics estimates that the average US tariff right rows
two fourteen percent and from two percent after Trump returned
to the White House. And China has begun military drills

(05:05):
around Taiwan following a US deal to sell the island
arms worth up to eleven billion dollars. The operation underscore
is how sensitive the Taiwan question is to Beijing. According
to a statement from the Chinese military, the exercises will
include live fire drills and involve all major branches of
the military. The maneuvers follow the decision on Friday to

(05:26):
unveil largely symbolic sanctions against twenty US defense companies and
ten executives. And those are your top stories. In a moment,
will bring you the latest on the Ukraine, peace talks,
plus what's driven the price of silver to a record high.
Another story that we've been reading this morning on how
AI is affecting not only the work that we're doing,

(05:46):
but the games that we're playing as well. Nikitchell has
written a great essay about this. He looks at how
technology has been encroaching on our leisure activities right, and
that software has matched or surpassed us in virtually any
activity involving cards, boards, or dice. And even if you've
bet on horse races or doing fantasy sports, you've probably
competed against artificial intelligence without realizing it. Nothing is safe.

(06:09):
Even managed to find researchers teaching neural networks to play
the board game Katan. So there are questions, of course,
about what this means for the human experience of game
playing as well. Kit spoke to the philosopher Susan Schneider
about this. She talked about her worries about so called
intellectual leveling. So what if large language models end up
steering us all towards the same TV shows, the same destinations,

(06:31):
the same games, while telling all of us that it's
just for you. This kind of flattening, Kit says, is
already happening in poker. He's been writing a book about
that in particular. But can games still be fun if
machines are involved? Does it take away the key element
of competition and what makes it challenging? Some food for
thought as we're coming towards the end of this year, where,

(06:51):
of course, so much of the conversation has been dominated
by how AI is changing the world we live in.
We'll find that piece on Bloomberg dot com or put
a link to it in our podcast show notes. Well,
let's bring you more in now though. On the talks
between the US and Ukrainian leaders in Florida, Donald Trump
says a lot of progress was made. We'll get the
details now with our TI Phaser correspondent Rosalind Mathson has
been following this story for us RAS. Good Morning, vlosmore

(07:14):
Zelenski talked about several areas being one hundred percent agreed
after these talks. What do we know about where progress
was made?

Speaker 1 (07:22):
Well, in terms of where progress was made, it was
mainly things around security guarantees according to the Ukrainian leader,
at least that those are agreed US Ukraine's security guarantees.
That is, the US President Donald Trump also talked about that.
On the question of US europe Ukraine security guarantees, Zelensky said,

(07:44):
these were almost agreed, and that's where Europe will have
a big role in assuring the future security of Ukraine,
and that's something that Donald Trump has been insisting on.
He also talked about progress around the role of the military.
That probably includes the size of the military after the
war and continued military support for Ukraine. It also, you know,

(08:07):
as understandings around Ukraine's economy, and that includes trade arrangements
with the US in essence, how to ensure that US
gets some kind of economic benefit from the support it's
given Ukraine.

Speaker 6 (08:21):
So there seems to have been progress in all those areas.

Speaker 1 (08:24):
Certainly the conversations between Zelensky and Donald Trump seemed to
be much warmer than they were, you know, at least
a year ago, and that there is progress there, but
a lot of other areas and really key areas where
progress has not been made.

Speaker 2 (08:38):
Yeah, indeed, such a change since that particular White Eyes
meeting that we can all remember between the presidents as well.
Let's talk about the sticking points then, where do we
see I suppose the party's furthest apart on this plan, Well.

Speaker 1 (08:51):
The biggest areas obviously land, and that's this question of territory,
and Russia obviously wants Ukraine to seed territory still held
by Ukraine in the Dombas region, and that's territory that
Russia has failed to take and hold in the years
that this war has gone on. Ukraine is obviously refusing that,
and territory really is the fundamental issue here for Ukraine.

(09:16):
Sadinsky's talked about a potential demilitarized zone in that area
of the Dombas as long as Russia pulls back its forces,
but that's something Moscow is unlikely to agree to, so
fundamental questions around land. There's also a question on the
Zaparizia and nuclear power plant, which is occupied at the
moment by Russia. Ukraine wants to share ownership of that

(09:37):
plant with the US. There's possible that it could be
joint ownership split three ways including Russia, the US and Ukraine,
although very unwieldy as a result, So questions around land
who controls what? And Ukraine's still wanting a sense in
the end of what happens if Russia were to attack again,
what kind of guarantees really in all of this, how

(09:59):
binding are they particularly, And that's where Donald Trump has
prevaricated a bit, is how binding.

Speaker 6 (10:05):
Would all of this be?

Speaker 1 (10:06):
So still quite a few very significant sticking points there, and.

Speaker 2 (10:11):
Of course these are talks that were happening between the
US and Ukraine. How acceptable is any of this likely
to be to Russia.

Speaker 1 (10:19):
Well, Donald Trump's been doing a bit of a double
track here where he's been talking to the Russian leader
and then separately talking to the Ukrainian leader. He does
talk about possibly still trying to get them together at
some point, So he's doing a dance between these two sides.
And obviously for Russia, there are questions around territory. There
are also questions around the size of Ukraine's army after

(10:42):
the war. Russia wants guarantees against future eastward expansion by NATO,
that's the military alliance. They want guarantees on Ukraine's neutral
status if it joins the European Union. So there are
still things here that Russia says that they want. And
we see these agreements edging a little bit one way,
and then Russia says, hang on, that's too far in

(11:02):
favor of Ukraine and then Ukraine says, hang on, these are.

Speaker 6 (11:05):
Too far in favor obviously of Russia.

Speaker 1 (11:07):
And so we're still in that area where Trump is
negotiating separately with each leader, but you're not getting any
real negotiation still between Russia and Ukraine directly.

Speaker 2 (11:17):
And on that point, then how much closer or how
far away does an end to the war look like
after what we've seen this ramping up of diplomatic activity
in recent weeks.

Speaker 1 (11:28):
That's right, we have seen a ramp up in diplomatic activity.
We're also seeing fighting going on still on the ground.
We're seeing energy, you know, strikes on energy facilities, shipping facilities.
On the weekend, Moscow launched a very large air strike
on Kiev and on energy facilities. And Vladimir Putin has
refused Donald Trump's calls for a truce. He's saying we

(11:49):
have to have an agreement first before there's any truth.
So the fighting goes on, and Donald Trump himself, you know,
he says, after all these conversations on the weekend, it
might take weeks.

Speaker 6 (12:01):
There's no set timeline.

Speaker 1 (12:02):
He's been very careful to move away from specific dates
he used to sort of claim that he would get
this war done very quickly, and obviously it's a year
on and he hasn't so now he's talking in general
terms about weeks. The question is does he have a
follow up conversation with the Russian leader today? What does
that call achieve? If anything? Is there potentially a meeting
between the US, Europe and Ukraine in January?

Speaker 6 (12:25):
Does that propel things forward?

Speaker 1 (12:27):
But there's no set timeline here and no great sense
again that they're making much progress on these fundamental issues
around land.

Speaker 6 (12:33):
So for now, at least, no end to the war
is in sight.

Speaker 2 (12:37):
Okay, ros Mathsen, our chief Asia correspondent, thank you very
much for joining us. Stay with us. More from Bloomberg
Daybreak Europe coming up after this. On the markets now,
the price of silver hit a record high this morning,
after a blistering run for precious metals this year. Our
executive editor for Asian Markets, Paul Dobson, joins us now

(12:58):
for more. Paul starting and with silver, bit of a
wild ride going on. Every time I look at the price,
it's moved pretty significantly. What's driving the rally that we're
seeing today and over the past number of days.

Speaker 7 (13:09):
Yeah, Hi there, good morning, Stephen, As you say, very
volatile market conditions for precious metals and silver in particular.
We've really had a big burst hire at the open
in Asia today. I think the things that are behind
the move are one, quite a lot of hype. Precious
metals tend to attract a lot of retail investment interest,

(13:32):
which can be very much want to jump on the
trend mentality, So there's definitely quite a lot of speculative bets,
people piling into ETFs and betting that the price will
just continue to ramp up. But behind that there's this
underlying picture of an imbalance in supply and demand. We've

(13:53):
seen central bank buying throughout the year use of silver
in industrial processes which makes it and out a little
bit differently to gold as well, particularly in solar power equipment.
And you know, people looking forwards to the prospect of
more interest rate cuts from central banks after the three

(14:15):
that we've seen in reasonably quick succession from the Fed
at the end of this year, making people more confident
in precious medals which don't carry a gield relative to
our high currency, which of course does carry some sort
of interest rate on deposits.

Speaker 2 (14:32):
So thinking about that then going into next year is
that a trade that's likely to continue in that direction.
What's the outlook then for these prescious metals in twenty
twenty six.

Speaker 7 (14:41):
It certainly feels like the bulls are outnumbering the bears
at the moment. Now that might make you feel potentially
that this is a one sided trade and that the
rug could get pulled from unto the feed of investors
and calls calling quite nasty corrections along the way, which
you know, we sort of saw in a microcosmic way
intra day today with the silver move. But there's definitely

(15:03):
consensus on higher prices provided that central bank demand continues,
particularly from the likes of China and emerging market. So
Goldman Sachs for example, has gold pegged at four nine
hundred or more going into twenty twenty six, but there
are plenty of calls for five thousand dollars and even
higher than that. You know, we've had that narrative as
well this year about the debasement trade, the idea that

(15:25):
people don't want any traditional currency, they would rather hold
something physical in their hands, gold, silver, platinum, whatever they
can do, and that does become something of a self
fulfilling prophecy if people are worried that the price is
going to go higher, they'll want to jump in and
buy it now rather than wait until later. So you know,

(15:46):
it's quite possible that at some point we reach it
much higher levels. But it's also certain that as we
get quite thin liquidity at these stretched levels, we're going
to see much more volatility and rapid corrections backwards, as
well as the rally or that underlying sentiment offering some
sort of support.

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