June 3, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Donald Trump’s combative trade policies have tipped the world economy into a downturn, with the US among the hardest hit, the OECD said. The Paris-based organization slashed its global forecasts for the second time this year, citing the impact of the American president’s tariff onslaught.
(2) US President Donald Trump is eager to land more trade deals, but talks with China and Europe continue to languish amid communications breakdowns and fresh tariff threats.
(3) Far-right lawmaker Geert Wilders pulled his Freedom Party out of the Netherlands’ ruling coalition, causing the government to collapse and triggering a snap election.
(4) Thames Water’s preferred bidder KKR has pulled out of a rescue deal in a major setback for the utility. The US alternative asset manager “will not be in a position to proceed, and its preferred partner status has now lapsed,” Thames said in a statement Tuesday.
(5) Private credit firms enjoy a “significant” capital advantage over traditional banks that’s unlikely to disappear, according to Bill Winters, chief executive officer of Standard Chartered
Podcast Conversation: Musk’s Chatbot Can Be ‘Non-Woke’ or Truthful, Not Both: Dave Lee
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
They say's the Bloomberg Daybreak Here podcast, available every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
third of June in London. I'm Stephen Carroll.
Speaker 3 (00:17):
And I'm Lizzie Berdon.
Speaker 1 (00:18):
Coming up today, The OECD slashes global growth forecasts, with
the US expected to be hit hardest.
Speaker 2 (00:24):
Heard Fielders triggers a snap election in the Netherlands as
he pulls his far right Freedom Party out of the
ruling coalition.
Speaker 1 (00:30):
Plus a deal goes down the Drain. KKR pulls out
of Thames Water's equity raising process, in a blow for
the struggling British utility.
Speaker 4 (00:38):
Let's start with the round up of our top stories.
Speaker 1 (00:40):
COOECD has slashed its growth forecasts due to US President
Trump's trade policies. The organization expects global economic expansion to
slow to two point nine percent this year, down from
the three point one percent it was expecting just three
months ago. Meanwhile, it sees US growth tumbling to one
point six percent, down from the two point two percent
it was full casting in March. Our senior editor Bill
(01:02):
Ferries says, there's one word that's driving sentiment lower.
Speaker 5 (01:06):
Uncertainty takes it all. There is a wild amount of
uncertainty in global economic forecast right now, given the uncertain
trade tariff battles going on. We're in that ninety day
pause from the US reciprocal tariffs. We had US China
tariffs jump to one hundred and forty five percent before
falling down into the double digits again. Even in double digits,
(01:29):
they would be far higher than historical levels.
Speaker 1 (01:32):
Bill Ferries speaking there, The OECD published its forecast just
as its members ministers convened in Paris for an annual meeting,
with top representatives from the US, EU and China all
scheduled to attend.
Speaker 6 (01:43):
Well.
Speaker 2 (01:43):
I mean while the OCD says that the UK Chancellor
Rachel Reeves will expose the economy to significant downside risk
if she doesn't create more fiscal headroom. The organization predicted
Britain will be the second fastest growing economy in the
G seven, but warrant the state of the public finances
was a signal downside risk. The Chancellor is under pressure
from her party to spend more on welfare and public
(02:05):
sector wage rises. The headroom Reeves has left against her
target is so tight that even small moves in borrowing
costs can erase it well.
Speaker 1 (02:14):
The weakening economic outlook comes as the White House said
that President Donald Trump and Chinese President Jan Ping are
likely to speak this week. Beijing hasn't commented on the
prospect of a direct conversation. The leaders of the world's
two largest economies haven't spoken since Trump's inauguration. Meanwhile, China
says that the US has seriously undermined a recent tariff
truce with this decision to impose a range of new
(02:36):
restrictions on the country. Blimboke's chief geoeconomics analyst, Jennifer Welch,
is urging caution over expectations of an imminent call.
Speaker 7 (02:44):
If a phone call happens this week, I think that
is a good thing for training negotiations that probably will
help restart momentum or at least clear the error in
a way in which these tensions are kind of boiling
on the back burner. But I think a call is unlikely,
And when that means is that tensions could continue to
boil because they are only being addressed really at lower levels,
(03:05):
and it would take a higher level engagement.
Speaker 3 (03:07):
To put them to rest or at least to put
them into the.
Speaker 7 (03:09):
Background to the point where they're non interfering with talks further.
Speaker 1 (03:13):
Jennifer Welch from Bloomberg Economics there speaking as a private
survey showed that China's manufacturing survey had its worst slumps
ince September twenty twenty two. The kaishin Manufacturing Purchasing Managers
index fell to forty eight point three in May, as
high US tariffs took a toll on the country's smaller
exporters well.
Speaker 2 (03:30):
The weaker than expected data from China comes as President
Trump's ninety day pause on his so called reciprocal tariffs
is coming to an end next month, but as the
deadline looms, the White House is struggling to secure trade deals.
The European unions preparing for another round of talks with
the US tomorrow. The blocks trying to fast track negotiations
before the July ninth deadline, when Trump said he'd hit
(03:53):
nearly all of their imports with a fifty percent tariff.
Speaker 4 (03:57):
However, the EU has warned that it may.
Speaker 2 (03:59):
Speed up it taliatory measures if the US president follows
through on his repeated threat. Despite promising that a range
of deals are just around the corner. So far, only
the UK has reached an outline agreement with the US
on tariffs, and that deal still isn't in place.
Speaker 1 (04:14):
Kirt Fielders has pulled his Freedom Party out of the
Netherlands ruling coalition. The move collapsed the government and automatically
triggered a new election. Builders chose to walk away from
the government after his three coalition partners refused to agree
to his plans to curb migration. The Freedom Party had
proposed closing the border to asylum seekers, temporarily halting family reunification,
(04:34):
and returning asylum seekers to Syria. The aex Index egauged
tracking the twenty five largest stocks listed on the euroext Amsterdam,
fell as much as zero point five percent before pairing
some of the loss.
Speaker 2 (04:46):
KKR has pulled out of plans to take a stake
in the distressed utility company Thames Water, the UK's largest
water company, announced. KKR had indicated it would not be
in a position to proceed after a completed due diligence terms,
faces out government takeover if it can't find a private
buyer willing to take on its billions in debt, so
its is telling Bloomberg.
Speaker 4 (05:06):
That a rival bidder.
Speaker 2 (05:07):
Scottish provider Castle Water is said to be ready to
step in and give Thames Water equity.
Speaker 1 (05:13):
And Standard Charter CEO Bill Winters says that the UK
is overdoing it on regulation. Speaking to Bloomberg, the UK
Bank CEO was asked about how to drive growth and
he said, there are vast numbers of regulators in Britain.
Speaker 8 (05:25):
We've aired on the side a very very extensive microprudential supervision.
We've got really huge numbers of individuals in the UK
and the PRA and the FCA who are focusing on
our business. And I think there I think one they're
too intrusive, it's too costly and too I don't think
you actually get a good return on that because at
(05:46):
some point the board and senior management start to think, well,
if it's okay with the regulator, it must be okay.
Speaker 1 (05:51):
The Standard Charters CEO added that the cost of capital
for a bank is now significantly higher than the private
credit company. His comments come as Britain's government is debate deregulation,
including ring fencing rules brought in after the Great Financial Crisis.
Speaker 4 (06:05):
Those are your top stories on the markets?
Speaker 2 (06:07):
These top six hundred is three tenths lower this morning,
the fifteen one hundred and ten by two tenths of
one percent, the Dutch market four tenths lower after that
news around the collapse of the Dutch government. On Wall Street,
SMP minifutures and nasdak features both half a percent lower,
a touch of strength, and the dollar today up a
tenth of one percent after the recent weakness, the eurostraining
at one fourteen eighteen against the dollar in the tenure
Treasury eel down two basis points at four point four
(06:29):
to two percent.
Speaker 1 (06:30):
Well, at a moment, we're going to dive into that
OECD report and the latest in Dutch politics. But first
even another story that caught our eye this morning, how
making an ideological AI might be more difficult than it seems.
Speaker 2 (06:43):
Something our opinion columns Dave Lee has been writing about,
and particular in reference to grock, which is the AI
on Elon Musk's X platform, which promised to be a
non woke alternative to chat, GPT and its rivals.
Speaker 4 (06:56):
A date, Dave writes, the problem with that.
Speaker 2 (06:58):
Idea is is that answers at AI provides are generally
based on data it's scraped off the Internet. The technology
can be either non woke or truthful, but not both
at the same time, and he points to several efforts
that are made both with Grock but also with other
AI chatbots as well, to try and manipulate those results
or steer them in a particular direction. Essentially, it doesn't work.
Nobody ends up happy at the end of it, and
(07:19):
it is a challenge as we're using these sort of
chatbots more and more to see what exactly can be
I suppose what can be done with it? And there's
Dave pot said, well, appealing for some artificial selective intelligence
is of limited practical use. You can read the full
piece on Bloomberg dot com Forward Slash Opinion.
Speaker 1 (07:36):
Well, let's get more on those latest forecasts from the
OECD now showing that the impact of Donald Trump's trade
policies is really having an impact on the global economy
and our markets. Report of Valerie title joins us now
for more.
Speaker 3 (07:46):
Well, I want to.
Speaker 1 (07:47):
Start with what the OECD says is the impact on
the US. They've slashed the growth forecasts. How does it
compare to what the FED and markets are expecting.
Speaker 9 (07:56):
Yeah, so they've slashed their growth forecast, but it's really
just the same as what economists across the street and
even the FED have done in the last few months
is downgrade their outlook for US growth. I want to
say though, that the OECD numbers are still a bit
more positive on US growth than the consensus analyst estimate.
On Bloomberg, they're calling for twenty twenty five US growth
(08:18):
to be one point six percent. The consensus estimate at
the moment is around one point three. The Fed's estimate
is also around one point seven, but the last time
they give an estimate was back in March. They're due
to give estimates and projections at their next meeting, so
that estimate might be a little stale, but it just
goes to show that there has been a big downgrade
of US growth from kind of the exuberance that we
(08:38):
felt in January, all that optimism when Trump came back
into the office. You know, estimates for twenty twenty five
GDP were north of two percent, and they have been
knocked down in the last few months due to the
uncertainty that the administration has released, and also the trade
war possibly denting economic activity, and.
Speaker 2 (08:55):
Of course that on Sergey some of the markets of
having to be parsing in real time as the divilopments
play out. The latest is that whether or not Donald
Trump and Cheating Thing will speak directly. The White House
says yes, China says they have no information about a
potential call.
Speaker 4 (09:09):
I mean, how are markets perceiving this?
Speaker 9 (09:11):
I feel like we just went through this a few
weeks ago, didn't.
Speaker 3 (09:14):
We have Did they speak on the phone?
Speaker 4 (09:16):
Did they not speak on the phone?
Speaker 9 (09:17):
But I mean net net It would be a great
thing for risk if at risk assets generally, if Trump
and She did get on the phone and spoke and
spoke to each other.
Speaker 3 (09:27):
There is a thought out there that there is.
Speaker 9 (09:29):
A need for a high level call in order to
get over some sticking points and some issues in order
to start this discussion between these two world's largest economies.
We've heard from former US trade negotiator Kelly and Shaw
earlier this morning saying it's not unusual to see a
high level leader call before there is a breakthrough in progress.
(09:50):
But Asian markets were quite positive overnight on the fact
that the White House said that it's likely to happen
this week. So we'll continue I guess to trade headlines
and what the White House says and what the China
Foreign Ministry said. They said they had no information to
share on any Trump she call.
Speaker 1 (10:06):
So that's the US China talk, so lack thereof. Meanwhile,
the US Trade Representative Jane miss and Grit is in
Paris for this SECD ministerial meeting that's happening this week.
He's got a lot of meetings potentially in his diary.
But a market's expecting progress on specifically the talks with
the EU.
Speaker 9 (10:23):
I think there's a lot of pessimism about the prospect
of the US and the EU coming to some agreement
before the pause and the tariffs roll off.
Speaker 3 (10:32):
Remember that date is early in July, so less than.
Speaker 9 (10:36):
Yeah, yeah, around a month's time, And it doesn't seem
it doesn't seem it's hard for the market to obviously
price that in, given there's still a lot of time
between now and then, but it doesn't seem like from
what I'm reading, there's a lot of positivity around the
outlook of getting something done before that date. Remember it
was only two weeks ago that Trump had to threaten
fifty percent tariff on the EU just to get them
(10:57):
to write something down on paper to present to them
about what they want out of these negotiations.
Speaker 3 (11:01):
So it does seem like it's come to a sticking point.
Speaker 9 (11:04):
I don't know if the market's going to pay too
much attention to it. It's more focused on maybe the
more likely deals to come, that being with the Asian
nations like Japan and.
Speaker 3 (11:12):
South Korea, that seem a bit closer at.
Speaker 9 (11:15):
Least to getting you know, not an agreement, but something
on paper as a you know, kind of what the
EU or what the UK signed with the US a
few weeks ago.
Speaker 2 (11:24):
Okay Valery title our market supporter, thank you very much
for joining us.
Speaker 1 (11:28):
Now to the European politics, The Dutch government has collapsed
after the right far right leader get Filders announced that
he was pulling his party out of the coalition now.
The move comes after his three partners failed to back
his Freedom Party's plan to curb migration.
Speaker 4 (11:43):
And for more.
Speaker 1 (11:43):
Was joined by a mere News director Roslin Matheson. Roz,
just take us through the latest, because this has been
a fast moving story this morning.
Speaker 10 (11:50):
Well, that's right, and in a way, this government has
been inherently fragile for months and there's been these bouts
of uncertainty where Wilders has threatened to walk or there's
been tension over things including migration policy, and he surprised
us a little bit this morning by actually saying that
he is going to withdraw and thereby triggering the collapse
(12:11):
of the government and a move to election. And it's
just been these long running tensions over his push for
quite a.
Speaker 3 (12:19):
Strident plan on migration.
Speaker 10 (12:22):
He wants to shut the borders, he wants to make
sure that Syrians return to Syria, he wants a temporary
pause in family reunions, and so on. It struck strife
within his coalition, which is actually a sentence and to
write coalition already, and it's just been a long running
vein through the government and so this time it seems
(12:43):
like he has decided to walk away. The question is
what is he hoping to achieve by this? He was
barred from being prime minister even though he performed strongly
in the last election, and he was barred from being
prime minister as part of the coalition conversation. Is hoping
by collapsing the government and triggering a new election that
(13:03):
he might get another go at it.
Speaker 2 (13:05):
So what happens next from here? We're heading to an election?
Speaker 10 (13:10):
Well, that's right, We're not exactly sure when the election
might be, but it might be within a matter of months.
In the meantime, there needs to be some sort of
continuity at least of administration in the Netherlands, and you know,
we expect that we'll get a lot of parties out
there very quickly starting to campaign. It was interesting because
Wilda's party had been fading a little bit for a while,
(13:32):
but it's resurgent to get in the polls just in
recent weeks because again he's been leaning really heavily on
his anti immigrant rhetoric and that seems to have given
him a pop in the polls, perhaps again a factor
in his thinking. So the question is for the Netherlands,
a country that, like many in Europe and beyond, is
grappling with some quite difficult issues around migration, and that
(13:55):
conversation in society is proving quite fraught. You know, does
he really amped that up going into an election and again,
what are his intentions out of that?
Speaker 1 (14:05):
Well, yeah, what does this mean more broadly for Europe
and the Netherlands place in Europe, Because we've also seen
Donald tuss calling this vote of confidence after the far
right candidate there, the right wing candidate won the presidential
election in that nail biting victory. What's the balance of
power now in Europe this morning after all of this.
Speaker 10 (14:23):
Well, it's interesting because the Netherlands had particular issues around migration.
Of course, you know, long running decline in things like
the shipping industry and factories in port cities like Rotterdam,
and that's kind of been fertile territory for some of
these narratives to take hold. But it's a similar story
in other countries in Europe. You've got challenges around housing
(14:43):
and again the migration debate seems to be rearing its
head again. And you know, as you say, in the
Polish election, we saw the result there where the nationalist
candidate won the presidency and that's going to create all
sorts of complications for the Government of Tusk going forward.
And part of it was about really bringing Poland very
(15:05):
much into the EU tent and similar for other countries
and whether their policies on migration go out of alignment
with the EU more broadly, and then you get all
sorts of tensions around access to funds and so on.
So it'd be very interesting to watch the debate in
the Netherlands, but as you say, there's quite a read
through to other parts of Europe.
Speaker 2 (15:24):
And the question of migration, as you mentioned, central to
a last the political debate that's happening in many countries.
In Germany next to where we're seeing the current government
under Friedrich Martz also trying to change migration policy reacting
to the strong performance of the far right in the
last election there only a couple of months ago. Is
this something that we're seeing any sort of coherent policy
(15:47):
emerging as to how what European countries will now approach
this issue.
Speaker 10 (15:52):
Well, it's interesting because it does tend to bubble up
at the same time in different countries, and you mentioned
Germany being a case in point. But there doesn't necessarily
seem to be a lot of coherence and cooperation in
the way that politicians are acting because fundamentally they're acting
out of self interest in their own country for their
own voters, and so the messaging is a bit different.
(16:13):
I mean, in Germany, mayors has to tread carefully. He
can't be seen to be getting too close to the
far right AfD, and he's you know, obviously very clearly
ruled out cooperating with them in Parliament, and that there
is a level of concern in Germany about taking that
narrative too far to the right. So you know, you
do get these threads that are coming up at the
(16:34):
same time. But again it doesn't necessarily mean that they're
all getting on the phone talking to each other and working.
Speaker 3 (16:40):
Out their policies.
Speaker 10 (16:42):
And interestingly, you know, the far right and the center
right in Europe isn't necessarily one big autonomous moving piece.
There's a lot of differences in those parties and sometimes
there's a lot of disagreement and they don't necessarily get
on You can see that in a you know obviously
in fronts in Italy between the pen and Maloney, for example.
(17:04):
So it's not necessarily coherent movement, is what I'm saying,
and differences do arise, but it's interesting because that conversation
is cropping up again in a bunch of places at
the same time.
Speaker 2 (17:15):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 6 (17:21):
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Speaker 2 (17:27):
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Speaker 6 (17:33):
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Speaker 2 (17:42):
And I'm Stephen Carroll. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
They say's the Bloomberg Daybreak Here podcast, available every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
third of June in London. I'm Stephen Carroll.
Speaker 3 (00:17):
And I'm Lizzie Berdon.
Speaker 1 (00:18):
Coming up today, The OECD slashes global growth forecasts, with
the US expected to be hit hardest.
Speaker 2 (00:24):
Heard Fielders triggers a snap election in the Netherlands as
he pulls his far right Freedom Party out of the
ruling coalition.
Speaker 1 (00:30):
Plus a deal goes down the Drain. KKR pulls out
of Thames Water's equity raising process, in a blow for
the struggling British utility.
Speaker 4 (00:38):
Let's start with the round up of our top stories.
Speaker 1 (00:40):
COOECD has slashed its growth forecasts due to US President
Trump's trade policies. The organization expects global economic expansion to
slow to two point nine percent this year, down from
the three point one percent it was expecting just three
months ago. Meanwhile, it sees US growth tumbling to one
point six percent, down from the two point two percent
it was full casting in March. Our senior editor Bill
(01:02):
Ferries says, there's one word that's driving sentiment lower.
Speaker 5 (01:06):
Uncertainty takes it all. There is a wild amount of
uncertainty in global economic forecast right now, given the uncertain
trade tariff battles going on. We're in that ninety day
pause from the US reciprocal tariffs. We had US China
tariffs jump to one hundred and forty five percent before
falling down into the double digits again. Even in double digits,
(01:29):
they would be far higher than historical levels.
Speaker 1 (01:32):
Bill Ferries speaking there, The OECD published its forecast just
as its members ministers convened in Paris for an annual meeting,
with top representatives from the US, EU and China all
scheduled to attend.
Speaker 6 (01:43):
Well.
Speaker 2 (01:43):
I mean while the OCD says that the UK Chancellor
Rachel Reeves will expose the economy to significant downside risk
if she doesn't create more fiscal headroom. The organization predicted
Britain will be the second fastest growing economy in the
G seven, but warrant the state of the public finances
was a signal downside risk. The Chancellor is under pressure
from her party to spend more on welfare and public
(02:05):
sector wage rises. The headroom Reeves has left against her
target is so tight that even small moves in borrowing
costs can erase it well.
Speaker 1 (02:14):
The weakening economic outlook comes as the White House said
that President Donald Trump and Chinese President Jan Ping are
likely to speak this week. Beijing hasn't commented on the
prospect of a direct conversation. The leaders of the world's
two largest economies haven't spoken since Trump's inauguration. Meanwhile, China
says that the US has seriously undermined a recent tariff
truce with this decision to impose a range of new
(02:36):
restrictions on the country. Blimboke's chief geoeconomics analyst, Jennifer Welch,
is urging caution over expectations of an imminent call.
Speaker 7 (02:44):
If a phone call happens this week, I think that
is a good thing for training negotiations that probably will
help restart momentum or at least clear the error in
a way in which these tensions are kind of boiling
on the back burner. But I think a call is unlikely,
And when that means is that tensions could continue to
boil because they are only being addressed really at lower levels,
(03:05):
and it would take a higher level engagement.
Speaker 3 (03:07):
To put them to rest or at least to put
them into the.
Speaker 7 (03:09):
Background to the point where they're non interfering with talks further.
Speaker 1 (03:13):
Jennifer Welch from Bloomberg Economics there speaking as a private
survey showed that China's manufacturing survey had its worst slumps
ince September twenty twenty two. The kaishin Manufacturing Purchasing Managers
index fell to forty eight point three in May, as
high US tariffs took a toll on the country's smaller
exporters well.
Speaker 2 (03:30):
The weaker than expected data from China comes as President
Trump's ninety day pause on his so called reciprocal tariffs
is coming to an end next month, but as the
deadline looms, the White House is struggling to secure trade deals.
The European unions preparing for another round of talks with
the US tomorrow. The blocks trying to fast track negotiations
before the July ninth deadline, when Trump said he'd hit
(03:53):
nearly all of their imports with a fifty percent tariff.
Speaker 4 (03:57):
However, the EU has warned that it may.
Speaker 2 (03:59):
Speed up it taliatory measures if the US president follows
through on his repeated threat. Despite promising that a range
of deals are just around the corner. So far, only
the UK has reached an outline agreement with the US
on tariffs, and that deal still isn't in place.
Speaker 1 (04:14):
Kirt Fielders has pulled his Freedom Party out of the
Netherlands ruling coalition. The move collapsed the government and automatically
triggered a new election. Builders chose to walk away from
the government after his three coalition partners refused to agree
to his plans to curb migration. The Freedom Party had
proposed closing the border to asylum seekers, temporarily halting family reunification,
(04:34):
and returning asylum seekers to Syria. The aex Index egauged
tracking the twenty five largest stocks listed on the euroext Amsterdam,
fell as much as zero point five percent before pairing
some of the loss.
Speaker 2 (04:46):
KKR has pulled out of plans to take a stake
in the distressed utility company Thames Water, the UK's largest
water company, announced. KKR had indicated it would not be
in a position to proceed after a completed due diligence terms,
faces out government takeover if it can't find a private
buyer willing to take on its billions in debt, so
its is telling Bloomberg.
Speaker 4 (05:06):
That a rival bidder.
Speaker 2 (05:07):
Scottish provider Castle Water is said to be ready to
step in and give Thames Water equity.
Speaker 1 (05:13):
And Standard Charter CEO Bill Winters says that the UK
is overdoing it on regulation. Speaking to Bloomberg, the UK
Bank CEO was asked about how to drive growth and
he said, there are vast numbers of regulators in Britain.
Speaker 8 (05:25):
We've aired on the side a very very extensive microprudential supervision.
We've got really huge numbers of individuals in the UK
and the PRA and the FCA who are focusing on
our business. And I think there I think one they're
too intrusive, it's too costly and too I don't think
you actually get a good return on that because at
(05:46):
some point the board and senior management start to think, well,
if it's okay with the regulator, it must be okay.
Speaker 1 (05:51):
The Standard Charters CEO added that the cost of capital
for a bank is now significantly higher than the private
credit company. His comments come as Britain's government is debate deregulation,
including ring fencing rules brought in after the Great Financial Crisis.
Speaker 4 (06:05):
Those are your top stories on the markets?
Speaker 2 (06:07):
These top six hundred is three tenths lower this morning,
the fifteen one hundred and ten by two tenths of
one percent, the Dutch market four tenths lower after that
news around the collapse of the Dutch government. On Wall Street,
SMP minifutures and nasdak features both half a percent lower,
a touch of strength, and the dollar today up a
tenth of one percent after the recent weakness, the eurostraining
at one fourteen eighteen against the dollar in the tenure
Treasury eel down two basis points at four point four
(06:29):
to two percent.
Speaker 1 (06:30):
Well, at a moment, we're going to dive into that
OECD report and the latest in Dutch politics. But first
even another story that caught our eye this morning, how
making an ideological AI might be more difficult than it seems.
Speaker 2 (06:43):
Something our opinion columns Dave Lee has been writing about,
and particular in reference to grock, which is the AI
on Elon Musk's X platform, which promised to be a
non woke alternative to chat, GPT and its rivals.
Speaker 4 (06:56):
A date, Dave writes, the problem with that.
Speaker 2 (06:58):
Idea is is that answers at AI provides are generally
based on data it's scraped off the Internet. The technology
can be either non woke or truthful, but not both
at the same time, and he points to several efforts
that are made both with Grock but also with other
AI chatbots as well, to try and manipulate those results
or steer them in a particular direction. Essentially, it doesn't work.
Nobody ends up happy at the end of it, and
(07:19):
it is a challenge as we're using these sort of
chatbots more and more to see what exactly can be
I suppose what can be done with it? And there's
Dave pot said, well, appealing for some artificial selective intelligence
is of limited practical use. You can read the full
piece on Bloomberg dot com Forward Slash Opinion.
Speaker 1 (07:36):
Well, let's get more on those latest forecasts from the
OECD now showing that the impact of Donald Trump's trade
policies is really having an impact on the global economy
and our markets. Report of Valerie title joins us now
for more.
Speaker 3 (07:46):
Well, I want to.
Speaker 1 (07:47):
Start with what the OECD says is the impact on
the US. They've slashed the growth forecasts. How does it
compare to what the FED and markets are expecting.
Speaker 9 (07:56):
Yeah, so they've slashed their growth forecast, but it's really
just the same as what economists across the street and
even the FED have done in the last few months
is downgrade their outlook for US growth. I want to
say though, that the OECD numbers are still a bit
more positive on US growth than the consensus analyst estimate.
On Bloomberg, they're calling for twenty twenty five US growth
(08:18):
to be one point six percent. The consensus estimate at
the moment is around one point three. The Fed's estimate
is also around one point seven, but the last time
they give an estimate was back in March. They're due
to give estimates and projections at their next meeting, so
that estimate might be a little stale, but it just
goes to show that there has been a big downgrade
of US growth from kind of the exuberance that we
(08:38):
felt in January, all that optimism when Trump came back
into the office. You know, estimates for twenty twenty five
GDP were north of two percent, and they have been
knocked down in the last few months due to the
uncertainty that the administration has released, and also the trade
war possibly denting economic activity, and.
Speaker 2 (08:55):
Of course that on Sergey some of the markets of
having to be parsing in real time as the divilopments
play out. The latest is that whether or not Donald
Trump and Cheating Thing will speak directly. The White House
says yes, China says they have no information about a
potential call.
Speaker 4 (09:09):
I mean, how are markets perceiving this?
Speaker 9 (09:11):
I feel like we just went through this a few
weeks ago, didn't.
Speaker 3 (09:14):
We have Did they speak on the phone?
Speaker 4 (09:16):
Did they not speak on the phone?
Speaker 9 (09:17):
But I mean net net It would be a great
thing for risk if at risk assets generally, if Trump
and She did get on the phone and spoke and
spoke to each other.
Speaker 3 (09:27):
There is a thought out there that there is.
Speaker 9 (09:29):
A need for a high level call in order to
get over some sticking points and some issues in order
to start this discussion between these two world's largest economies.
We've heard from former US trade negotiator Kelly and Shaw
earlier this morning saying it's not unusual to see a
high level leader call before there is a breakthrough in progress.
(09:50):
But Asian markets were quite positive overnight on the fact
that the White House said that it's likely to happen
this week. So we'll continue I guess to trade headlines
and what the White House says and what the China
Foreign Ministry said. They said they had no information to
share on any Trump she call.
Speaker 1 (10:06):
So that's the US China talk, so lack thereof. Meanwhile,
the US Trade Representative Jane miss and Grit is in
Paris for this SECD ministerial meeting that's happening this week.
He's got a lot of meetings potentially in his diary.
But a market's expecting progress on specifically the talks with
the EU.
Speaker 9 (10:23):
I think there's a lot of pessimism about the prospect
of the US and the EU coming to some agreement
before the pause and the tariffs roll off.
Speaker 3 (10:32):
Remember that date is early in July, so less than.
Speaker 9 (10:36):
Yeah, yeah, around a month's time, And it doesn't seem
it doesn't seem it's hard for the market to obviously
price that in, given there's still a lot of time
between now and then, but it doesn't seem like from
what I'm reading, there's a lot of positivity around the
outlook of getting something done before that date. Remember it
was only two weeks ago that Trump had to threaten
fifty percent tariff on the EU just to get them
(10:57):
to write something down on paper to present to them
about what they want out of these negotiations.
Speaker 3 (11:01):
So it does seem like it's come to a sticking point.
Speaker 9 (11:04):
I don't know if the market's going to pay too
much attention to it. It's more focused on maybe the
more likely deals to come, that being with the Asian
nations like Japan and.
Speaker 3 (11:12):
South Korea, that seem a bit closer at.
Speaker 9 (11:15):
Least to getting you know, not an agreement, but something
on paper as a you know, kind of what the
EU or what the UK signed with the US a
few weeks ago.
Speaker 2 (11:24):
Okay Valery title our market supporter, thank you very much
for joining us.
Speaker 1 (11:28):
Now to the European politics, The Dutch government has collapsed
after the right far right leader get Filders announced that
he was pulling his party out of the coalition now.
The move comes after his three partners failed to back
his Freedom Party's plan to curb migration.
Speaker 4 (11:43):
And for more.
Speaker 1 (11:43):
Was joined by a mere News director Roslin Matheson. Roz,
just take us through the latest, because this has been
a fast moving story this morning.
Speaker 10 (11:50):
Well, that's right, and in a way, this government has
been inherently fragile for months and there's been these bouts
of uncertainty where Wilders has threatened to walk or there's
been tension over things including migration policy, and he surprised
us a little bit this morning by actually saying that
he is going to withdraw and thereby triggering the collapse
(12:11):
of the government and a move to election. And it's
just been these long running tensions over his push for
quite a.
Speaker 3 (12:19):
Strident plan on migration.
Speaker 10 (12:22):
He wants to shut the borders, he wants to make
sure that Syrians return to Syria, he wants a temporary
pause in family reunions, and so on. It struck strife
within his coalition, which is actually a sentence and to
write coalition already, and it's just been a long running
vein through the government and so this time it seems
(12:43):
like he has decided to walk away. The question is
what is he hoping to achieve by this? He was
barred from being prime minister even though he performed strongly
in the last election, and he was barred from being
prime minister as part of the coalition conversation. Is hoping
by collapsing the government and triggering a new election that
(13:03):
he might get another go at it.
Speaker 2 (13:05):
So what happens next from here? We're heading to an election?
Speaker 10 (13:10):
Well, that's right, We're not exactly sure when the election
might be, but it might be within a matter of months.
In the meantime, there needs to be some sort of
continuity at least of administration in the Netherlands, and you know,
we expect that we'll get a lot of parties out
there very quickly starting to campaign. It was interesting because
Wilda's party had been fading a little bit for a while,
(13:32):
but it's resurgent to get in the polls just in
recent weeks because again he's been leaning really heavily on
his anti immigrant rhetoric and that seems to have given
him a pop in the polls, perhaps again a factor
in his thinking. So the question is for the Netherlands,
a country that, like many in Europe and beyond, is
grappling with some quite difficult issues around migration, and that
(13:55):
conversation in society is proving quite fraught. You know, does
he really amped that up going into an election and again,
what are his intentions out of that?
Speaker 1 (14:05):
Well, yeah, what does this mean more broadly for Europe
and the Netherlands place in Europe, Because we've also seen
Donald tuss calling this vote of confidence after the far
right candidate there, the right wing candidate won the presidential
election in that nail biting victory. What's the balance of
power now in Europe this morning after all of this.
Speaker 10 (14:23):
Well, it's interesting because the Netherlands had particular issues around migration.
Of course, you know, long running decline in things like
the shipping industry and factories in port cities like Rotterdam,
and that's kind of been fertile territory for some of
these narratives to take hold. But it's a similar story
in other countries in Europe. You've got challenges around housing
(14:43):
and again the migration debate seems to be rearing its
head again. And you know, as you say, in the
Polish election, we saw the result there where the nationalist
candidate won the presidency and that's going to create all
sorts of complications for the Government of Tusk going forward.
And part of it was about really bringing Poland very
(15:05):
much into the EU tent and similar for other countries
and whether their policies on migration go out of alignment
with the EU more broadly, and then you get all
sorts of tensions around access to funds and so on.
So it'd be very interesting to watch the debate in
the Netherlands, but as you say, there's quite a read
through to other parts of Europe.
Speaker 2 (15:24):
And the question of migration, as you mentioned, central to
a last the political debate that's happening in many countries.
In Germany next to where we're seeing the current government
under Friedrich Martz also trying to change migration policy reacting
to the strong performance of the far right in the
last election there only a couple of months ago. Is
this something that we're seeing any sort of coherent policy
(15:47):
emerging as to how what European countries will now approach
this issue.
Speaker 10 (15:52):
Well, it's interesting because it does tend to bubble up
at the same time in different countries, and you mentioned
Germany being a case in point. But there doesn't necessarily
seem to be a lot of coherence and cooperation in
the way that politicians are acting because fundamentally they're acting
out of self interest in their own country for their
own voters, and so the messaging is a bit different.
(16:13):
I mean, in Germany, mayors has to tread carefully. He
can't be seen to be getting too close to the
far right AfD, and he's you know, obviously very clearly
ruled out cooperating with them in Parliament, and that there
is a level of concern in Germany about taking that
narrative too far to the right. So you know, you
do get these threads that are coming up at the
(16:34):
same time. But again it doesn't necessarily mean that they're
all getting on the phone talking to each other and working.
Speaker 3 (16:40):
Out their policies.
Speaker 10 (16:42):
And interestingly, you know, the far right and the center
right in Europe isn't necessarily one big autonomous moving piece.
There's a lot of differences in those parties and sometimes
there's a lot of disagreement and they don't necessarily get
on You can see that in a you know obviously
in fronts in Italy between the pen and Maloney, for example.
(17:04):
So it's not necessarily coherent movement, is what I'm saying,
and differences do arise, but it's interesting because that conversation
is cropping up again in a bunch of places at
the same time.
Speaker 2 (17:15):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 6 (17:21):
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Speaker 2 (17:27):
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Speaker 6 (17:33):
Our flagship New York station, is also available on your
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I'm Caroline Hepka.
Speaker 2 (17:42):
And I'm Stephen Carroll. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg day Break Europe
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