June 2, 2025 • 20 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Ukraine staged a dramatic series of strikes across Russia, deploying drones hidden in trucks deep inside the country to hit strategic airfields as far away as eastern Siberia.
(2) The UK will create an “always on” munitions production capacity to allow it to scale-up its defense industry when needed, as it increasingly shifts to a war footing with Russia’s assault on Ukraine showing little sign of ending.
(3) A nationalist candidate backed by Donald Trump won Poland’s presidential election, defeating the centrist mayor of Warsaw in a blow to the country’s pro-European Union government.
(4) Six people were injured in an attack on an event in Boulder, Colorado, held in support of Israeli hostages, police and FBI officials said, sparking renewed concern about threats of antisemitic violence in the US. The FBI says the suspect was heard to yell 'Free Palestine' while using a makeshift flamethrower.
(5) China accused the US of violating their recent trade deal and vowed to take measures to defend its interests, dimming the prospect of an immediate leadership call that Donald Trump wants to have to further bilateral talks.
(6) The dollar will tumble to levels last seen during the Covid-19 pandemic by the middle of next year, hit by interest rate cuts and slowing growth, according to predictions by Morgan Stanley.
Podcast Conversation: Jesse Armstrong: ‘I’m Interested in the Power, Not the Money’
Podcast Image Source: Ukrainian Security Service
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.
Speaker 2 (00:09):
This is the Bloomberg DAYBAQ podcast, available every morning on Apple,
Spotify or wherever you listen. It's Monday, the second of
June in London. I'm Caroline Hepcare and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today.
Speaker 1 (00:20):
Ukraine uses drones hidden in trucks and an audacious strike
on russia strategic airfields as the two countries prepare for talks.
Speaker 2 (00:28):
A nationalist candidate backed by Donald Trump wins Poland's presidential
election with just over fifty percent of the vote.
Speaker 3 (00:36):
Plus no deal.
Speaker 1 (00:38):
China accuses the US of breaking their recent trade accord
and vows retaliation, sending safe haven assets higher.
Speaker 2 (00:45):
Let's start with a roundup of our top stories.
Speaker 1 (00:47):
Ukraine has used drones hidden in trucks to hit strategic
airfields across Russia in a series of dramatic strikes out
of peace talks due to take place later today. Keeve's
Security Service says more than forty Rush aircraft were damaged,
including long range bombers capable of deploying nuclear weapons. Ukraine
claims the operation caused lasses totaling at least two billion dollars.
(01:10):
Here's Ukraine's president Vladmozlanski, thirty.
Speaker 4 (01:14):
Four percent of the strategic cruise missile carriers stationed at
air bases were hit. Our personnel operated across multiple Russian
regions in three different time zones, and the people who
assisted us were withdrawn from Russian territory before the operation.
They are now safe. It is genuinely satisfying when something
(01:37):
I authorized a year and six months ago comes to
fruition and deprives Russians of over forty units.
Speaker 5 (01:44):
Of strategic aviation.
Speaker 3 (01:47):
We will continue this work.
Speaker 1 (01:51):
Zelenski's comments came as his country also came under one
of the longest barrages from Russian missiles and drones. On Sunday,
at least twelve people were killed in a strike on
a military training center. The attacks from both sides come
as Moscow and Kiev prepared to send delegations to Turkey
for a second round of talks today. The opening round
last month ended with a prisoner exchange agreement and discussions
(02:14):
on a potential ceasefire.
Speaker 2 (02:16):
The UK plans to build new submarines, munitions factories, and
cyber warfare technology to counter the threat posed by Russia.
The multi billion pound purchases are part of the government's
review of the country's military capabilities. Defense Secretary John Healey
says threats are increasing.
Speaker 6 (02:35):
The country's armed forces are only as strong as the
industry that stands behind them. The investment is not just
about filling warehouses with fresh missiles. It's about making sure
that in Britain we have an industrial base that can
innovate and that can scale up its production if we're
faced with conflict in the future.
Speaker 2 (02:52):
Defense Secretary John Healey there, who is speaking ahead of
the official launch of the Strategic Defense Review. The UK
Army is its smallest size since the Napoleonic era due
to chronic under investments.
Speaker 1 (03:06):
A nationalist's candidate backed by Donald Trump has won Poland's
presidential election. Karol Nevrotsky defeated the centrist mayor of Warsaw
and a blow to the country's pro EU government. According
to Bloomberg News calculations, the conservative historian and former boxer
won fifty point nine percent of the vote, while his opponent,
Rafa Traskowski took forty nine point one percent. While Poland's
(03:30):
Prime Minister Donald Tusk holds political power, the president can
veto legislation nominate the Central Bank Governor and serves as
Commander in chief of the Armed Forces.
Speaker 2 (03:40):
Six people have been injured in an attack on an
event for Israeli hostages in Colorado. Police and FBI officials
say that the suspect was heard to shout Free Palestine
and threw an incendiary device into the crowd during the attack.
In the town of Boulder, local police chief Stephen Redfern
says that the neighborhood will stand strong.
Speaker 7 (04:02):
Older is not immune to tragedy sadly, and I know
a lot of people are scared right now. A lot
of people are upset and questioning how this happened and why.
All I know is Boulder has recovered before from acts
of violence and we will again.
Speaker 2 (04:19):
Boulder's police chief Stephen redferns speaking their authorities have confirmed
a forty five year old man has been arrested.
Speaker 1 (04:27):
Trade tensions between the US and China are ratteting up.
China has accused the US of violating a recent trade
deal between the two countries. The Chinese Ministry of Commerce
rejected President Trump's claim that Beijing breached the agreement in
a statement issued on Monday. Beijing accuses the US of
discriminatory restrictions, including new AI chip export controls and their
(04:48):
avocation of Chinese student visas. Speaking on Friday, Donald Trump
told reporters he hopes talks will continue soon.
Speaker 3 (04:56):
And I was very nice to then.
Speaker 6 (04:57):
I help them because they were in trouble with the
style budge a massive amount of business.
Speaker 3 (05:03):
But I'm sure that I'll speak to President she and
hopefully we'll work that out.
Speaker 8 (05:07):
But yeah, that's there's a violation of the.
Speaker 1 (05:09):
Agreement, President Donald Trump speaking there. Following the news, Agent
shares dropped, along with US stock index futures, a gauge
of Chinese stocks traded in Hong Kong, fell as much
as two point nine percent, the most nearly two months.
Speaker 2 (05:22):
Morgan Stanley is forecasting a nine percent drop in the
US and Dollar index in the next twelve months. The
bank joins the course of voices questioning the outlook for
the currency as fears overgrowth and trade grow. The Dollar
index has already dropped nearly ten percent from its peak
in February. The scrutiny of American assets comes alongside worries
(05:43):
over fiscal discipline. Treasury Secretary Scott Bessent was asked if
the US Treasury could run out of cash as the
deadline for increasing the federal debt ceiling gets closer.
Speaker 5 (05:54):
The United States of America is never going to default.
That is never going to happen. That we are on
the warning track and we will never hit.
Speaker 2 (06:03):
The wall, try sectary Scott Bessett, speaking to CBS's Face
the Nation yesterday. Republican congressional leaders have attached an increase
in the debtlimit to President Trump's tax and spending bill
that potentially puts avoiding a default at the mercy of
negotiations over the bill.
Speaker 1 (06:23):
At least ten percent of the UK's wealthy, non arme
population is estimated to have left the country. That's according
to a new report from former Treasury economist, which estimates
that twenty six thousand non doms left last year.
Speaker 3 (06:35):
Bloomberg James Wilcock has more.
Speaker 8 (06:37):
The report from economist Charles Walker used his migration and
tax data to say the number of ultra wealthy taxpayers
leaving the UK surge last year. But the main question
for the government is if the figures are right, is
this potential exodus going to become a fiscal problem. A
separate recent report said the Treasury would start to lose
money if twenty five percent of this wealthy non don
(07:00):
population were to leave. Both papers were commissioned by Andrew Barclay,
an entrepreneur and policyfellow at the Center right on wood
Thing Tank in London, James Wilcock Bloomberg Radio, and.
Speaker 2 (07:12):
Those are our top stories for you this morning. Looking
at the markets, Asian shares are down, the MSCI Asia
Pacific Index dropping by eight tenths of one percent. It
had declined as the most in about a month earlier
this morning on continued trade tensions. US stop futures are
also down this morning, both of the NAZAC and the
S and P five hundred. You've also got the Bloomberg
(07:34):
Dollar Spot Index down a tenth of one percent. Macroeconomic
headwinds for the dollar. Oil prices are up after OPEC
plus agreed to lift output two point three almost two
point four percent high. Now for breakthrough futures. You remember
had President Trump talking about doubling tariffs and steel and
aluminium imports over the weekend. Got lots of key data
(07:56):
this week ism and manufacturing, to the jobs out on
Friday and the ECB rate decision on Thursday. Teny Treasury
yields this morning up one and a half basis points
at four forty two.
Speaker 5 (08:08):
But it's going to be a busy week, Stephen certainly is.
Speaker 1 (08:10):
In a moment, we'll bring you more on Ukraine's attack
on Russia's long range bomber fleet, plus why China is
accusing the US of violating their recent trade deal.
Speaker 3 (08:19):
But another story that we've.
Speaker 1 (08:20):
Been reading as well today and listening to, I should say,
the latest weekend interview for Michelle hasain with Succession creator
Jesse Armstrong about his new film looking at the tech industry.
Unsurprisingly what ripe ground given the character is involved in
the tech industry in the real life. To try and
create a satirical drama in the style of Succession film
called Mountainhead.
Speaker 2 (08:41):
Apparently it's going to it's sort of funnier, it's darker humor.
But yes, it's much faster because it's not going to
have the multiple sort of seasons that Succession had. But
it is such an interesting interview with Jesse Armstrong and
our own Michelle has sayed, But she asked them some
really interesting questions about how close to real life is
(09:01):
this whole who.
Speaker 1 (09:03):
Inspire Twitch character clearly, but also really interesting to see
his comments about the British film industry and this as well,
talking about saying that he worries about with so many
big name creations coming out of the US, the future
of British drama and the important of the BBC and
that as well. So, I mean a really interesting conversation.
You can hear the podcast and read the interview on
our website. We'll put a link in our show notes.
Speaker 7 (09:24):
Now.
Speaker 2 (09:24):
Ukrainian and Russian officials are due to hold a second
round of talks later today, which could pave the way
for a potential CEASEPAR, but it comes after a series
of major attacks on both sides this weekend. Our EMEA
news director Ross and Matheson joins us now for more
on this Good morning, oz. Let's start with the Ukrainian
attacks on Russian airfields all over Russia as far away
(09:47):
as Siberia. What do we know about what was damaged
and how significant those attacks are given this three year war.
Speaker 9 (09:56):
Well, what we've heard from Ukraine is that there was
significant damage to a number of airplanes, including long range
bombers that are designed to carry both conventional but also
nuclear weapons. And as you say, the real thing here
is that they hit so deep inside Russia. It seems
like this was an eighteen month planned operation where they
(10:17):
managed to get drones inside Russia on trucks and then
launched them using wooden based systems. And so this was
very audacious really by Ukraine and to show again that
anywhere in Russia really is territory that they can reach.
Speaker 5 (10:36):
Russia's disputing the.
Speaker 9 (10:38):
Damage claim and saying that they managed to deflect at
least some of these drones from some airfields and that
the damage to airplanes was minor. Obviously, Ukraine says that
it managed to do several billion dollars worth of damage.
But either way, again it's more the symbolism of what
they've done in hitting so far right the way you say,
(10:59):
to eastern Siberia.
Speaker 1 (11:01):
And at the same time Ukraine came under attack one
of the longest barrages that had seen from Russian missiles
and drones, air sirens lasting for more than nine hours.
I mean, how do all of these escalations set the
tone for the talks that are due to take place
and it's unbult today.
Speaker 9 (11:15):
Well, it's interesting to see that at least for now
the talks are going ahead given this backdrop, as you say,
of mutual attacks across the weekend, But the idea probably
is to again demonstrate that even after a number of
years of war and with Ukraine obviously struggling for long
range missiles and access to certain weapons, is that they
(11:36):
can still hurt each other and still hit each other.
Speaker 10 (11:39):
You know.
Speaker 9 (11:39):
Ukraine is saying we may not have masses of troops
on the ground and curse, but we can still come
at you inside Russia, and Russia obviously wanting to send
the same message with it strikes on the weekend. So
they're coming into these talks both sort of showing you
know what, this is what we can do. Does that
necessarily lay the groundwork for a conducive station.
Speaker 5 (12:00):
It's a bit hard to say.
Speaker 9 (12:02):
I mean, the first rounds of talks that we saw
led to some prisoner swaps, which is obviously something, but
no real conversation around a ceasefar. Ukraine says that it's
yet to receive this apparent memorandum from Russia detailing what
its demands would be, so it's very hard to see
how these conversations can move forward without that list and
(12:23):
Ukraine again saying fundamentally what they really need is the
leaders to get together, and so that's the leaders of
Ukraine and Russia to be sitting in a room together,
because the only person who can really agree to end
this wark from the Russia side is Vladimir Putin. So
these talks are going ahead, but obviously, you know, we're
moving pretty slowly here.
Speaker 2 (12:43):
Yeah, And I suppose the lasts thought is about how
the US is playing into these discussions right now.
Speaker 9 (12:50):
Well, that's right, and we know that the Secretary of
State Marco Rubio spoke with the Russian his Russian counterpart
on the weekend, and the message from that seemed to
be it's really up to Russia and Ukraine to talk
directly and to find solutions here. And the US is
obviously still very much in the conversation but not wanting
to be the direct mediator. And the frustration that we've
(13:12):
seen growing from US President Donald Trump, who had hoped
to get a very quick deal here and a quick
seasphone that's obviously not happened, has now said, really, it's
up to you guys to do so. And so the
message from the US is they're obviously on the phone
a lot to the Ukrainians are on the phone to
the Russians, but they're not wanting to be the ones
(13:32):
in the middle of the negotiation, at least for now.
Speaker 2 (13:35):
And meanwhile, of course everyone around the world is watching
the footage because the footage, also the Ukrainian footage unverified
of the attack on the air of planes, has got
the attention of military surely all over the world because
the attacks were on sitting aircraft on the tarmac, a
forty Russian aircraft at least according to Ukrainian authority. So
(13:58):
I think everyone's going to be looking at that, and.
Speaker 1 (14:00):
Those are the images that are being played as we're
counting down to those talks as well. Ras I just
wanted to ask you briefly about the UK as well.
Though the government here set to launch its strategic Defense
review today. The goal, we're told is to send a
message to Moscow. What do we know about what's going
to be announced?
Speaker 5 (14:15):
Well, that's right.
Speaker 9 (14:16):
I mean a lot of countries the UK is looking
around and saying, well, what are the future challenges and
threats going to be and how can we prepare for those?
You know, we've got conflict, as you say, still in Ukraine,
in the Middle East, you got the US making clear
that countries in Europe, including the UK, need to become
more self reliant and so how do you adapt for that,
and how do you make your military more flexible, more
(14:38):
nimble even and how do you invest and where do
you invest? And so we're expecting announcements confirmation around that
in terms of building new munitions factories for example, so
building the pipeline in the UK for weaponry, possibly also
investing in future attack submarines. I mean those tach decades
to build, but you've got to make a decision at
(14:58):
some point to invest in them. And also just retention,
how do you make the UK military more appealing for
people and then how do you keep your top shelf
talent when they joined.
Speaker 5 (15:10):
So a lot in that to come today.
Speaker 1 (15:12):
Ross all of this is happening at a time we're
also elsewhere and you're watching the results out of the
Polish presidential election over the weekend as well, the nationalist
candidate being coming out on top, beating the centrist mayor
of Warsaw. This is continuing a sort of political status
that we've seen in Poland, following on from Andros Duda,
with you putting Prime Minister of Poland in a difficult
(15:35):
situation from here.
Speaker 5 (15:37):
Well, that's right. The result looks really really tight.
Speaker 9 (15:40):
I mean, the exit poles were swinging last night between
the two of them, and now we see a very
very close result. But as you say, the sort of
the Antieu candidate in a way in front. It'll be
interesting to see if there are any challenges to this
result because it is very very close. But as you say,
what it shows again is that Polanism is like other
(16:02):
countries in Europe, exceptionally polarized. And you've got, you know,
those who want to stay very much close to Europe
and those who are I guess seeing the appeal in
some of the retoric of candidates who've embraced the agenda
of those like Donald Trump.
Speaker 3 (16:17):
Okay, Rasell marsonari Ami, a news director, Thank you.
Speaker 2 (16:19):
Now, let's turn our attention away from Europe to China,
which has accused the US of violating its recent trade
deal and has wowed to take measures to defend its
own interests. Jenny Marsh leads our team covering economics and
government in China and joins us now, Jenny, good morning.
What exactly is Beijing said the US is doing the
accusation today?
Speaker 10 (16:39):
So the Ministry of Commerce in Beijing has come out
this morning on a public holiday in China basically say,
you know, the US insists on sort of continuing to
go its own way. They're saying, then it's going to
have to sort of respond with forceful measures. So they
haven't sort of been specific about what those are, but
it's sort of hinting at retaliation. And this comes after
(17:03):
last week the sort of this steady trickle of news
of extra restrictions that the Trump administration is applying in
the tech industry, so sort of throttling access to chip
design software that Chinese chip makers use, also curtailing the
export of jet engine parts that are crucial to China's
(17:23):
ability to develop its own jetliner industry. And that came
as well after sort of the global bound we saw
right after the Geneva Geneva agreement on the Huawei chips,
trying to ban use of them anywhere in the world.
So the Chinese are basically saying, you're violating the consensus
not only of the Geneva agreement but of this The
last call that was had between Trump and she which
(17:45):
was on January seventeenth, before Trump came into office, formally,
and I think the context there is, you know, over
the weekend, Trump has been saying, you know, he needs
to have a call with President She to sort things out,
and they're kind of saying, now, well, you know, Trump
isn't even sticking to what was agreed the last time
the two leaders spoke. So the influence there kind of is,
(18:06):
you know, it's very doubtful that she's going to get
on the phone with Trump in this kind of climate.
Speaker 1 (18:12):
Jenny, we had seen this big turnaround in sentiment, as
you mentioned, after the Geneva agreement. Again, how far does
this set us back in terms of the relations between
the US and China.
Speaker 10 (18:24):
I think this is a good reality check because you're
completely right. There was so much optimism after that Geneva agreement,
which kind of brought the tariffs down from one hundred
and forty five percent all the way down to thirty
for China, you know, and so that was a great
win in terms of the tariff pause, but it didn't
really sort of fundamentally change anything about the US China relationship.
(18:47):
It wasn't really a deal that they worked out in Geneva.
They just agreed to sort of hit the brakes and
pause things, and all of the things that sort of
the fundamentally sort of difficult issues that underpin this relationship,
they still remain there. So the US still wants to
block China's access to high tech chips because the US
wants to be the world's tech superpower. China still wants
(19:07):
to you know, develop Huawei into a company that can
rival and video, and it's going to use its the
leverage it has, which is you know, rare earths, these
very sort of niche metals that are crucial to everything
from sort of nuclear reactor rods to jet planes. And
so it's becoming this interesting battle where the fight isn't
really over the tariffs anymore, you know, the terariff fight.
(19:29):
We've sort of seen that play out. But now the
real sort of leverage in the negations to come is
going to be around the chip curbs and there export controls,
and it's interesting to see who actually has the most
leverage on that.
Speaker 1 (19:44):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:50):
Look for us on your podcast speed every morning on Apple,
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Speaker 1 (19:56):
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Speaker 2 (20:02):
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Speaker 5 (20:10):
I'm Caroline Hepka and.
Speaker 3 (20:11):
I'm Stephen Carol.
Speaker 1 (20:12):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg DAYBAQ podcast, available every morning on Apple,
Spotify or wherever you listen. It's Monday, the second of
June in London. I'm Caroline Hepcare and.
Speaker 3 (00:18):
I'm Stephen Carroll. Coming up today.
Speaker 1 (00:20):
Ukraine uses drones hidden in trucks and an audacious strike
on russia strategic airfields as the two countries prepare for talks.
Speaker 2 (00:28):
A nationalist candidate backed by Donald Trump wins Poland's presidential
election with just over fifty percent of the vote.
Speaker 3 (00:36):
Plus no deal.
Speaker 1 (00:38):
China accuses the US of breaking their recent trade accord
and vows retaliation, sending safe haven assets higher.
Speaker 2 (00:45):
Let's start with a roundup of our top stories.
Speaker 1 (00:47):
Ukraine has used drones hidden in trucks to hit strategic
airfields across Russia in a series of dramatic strikes out
of peace talks due to take place later today. Keeve's
Security Service says more than forty Rush aircraft were damaged,
including long range bombers capable of deploying nuclear weapons. Ukraine
claims the operation caused lasses totaling at least two billion dollars.
(01:10):
Here's Ukraine's president Vladmozlanski, thirty.
Speaker 4 (01:14):
Four percent of the strategic cruise missile carriers stationed at
air bases were hit. Our personnel operated across multiple Russian
regions in three different time zones, and the people who
assisted us were withdrawn from Russian territory before the operation.
They are now safe. It is genuinely satisfying when something
(01:37):
I authorized a year and six months ago comes to
fruition and deprives Russians of over forty units.
Speaker 5 (01:44):
Of strategic aviation.
Speaker 3 (01:47):
We will continue this work.
Speaker 1 (01:51):
Zelenski's comments came as his country also came under one
of the longest barrages from Russian missiles and drones. On Sunday,
at least twelve people were killed in a strike on
a military training center. The attacks from both sides come
as Moscow and Kiev prepared to send delegations to Turkey
for a second round of talks today. The opening round
last month ended with a prisoner exchange agreement and discussions
(02:14):
on a potential ceasefire.
Speaker 2 (02:16):
The UK plans to build new submarines, munitions factories, and
cyber warfare technology to counter the threat posed by Russia.
The multi billion pound purchases are part of the government's
review of the country's military capabilities. Defense Secretary John Healey
says threats are increasing.
Speaker 6 (02:35):
The country's armed forces are only as strong as the
industry that stands behind them. The investment is not just
about filling warehouses with fresh missiles. It's about making sure
that in Britain we have an industrial base that can
innovate and that can scale up its production if we're
faced with conflict in the future.
Speaker 2 (02:52):
Defense Secretary John Healey there, who is speaking ahead of
the official launch of the Strategic Defense Review. The UK
Army is its smallest size since the Napoleonic era due
to chronic under investments.
Speaker 1 (03:06):
A nationalist's candidate backed by Donald Trump has won Poland's
presidential election. Karol Nevrotsky defeated the centrist mayor of Warsaw
and a blow to the country's pro EU government. According
to Bloomberg News calculations, the conservative historian and former boxer
won fifty point nine percent of the vote, while his opponent,
Rafa Traskowski took forty nine point one percent. While Poland's
(03:30):
Prime Minister Donald Tusk holds political power, the president can
veto legislation nominate the Central Bank Governor and serves as
Commander in chief of the Armed Forces.
Speaker 2 (03:40):
Six people have been injured in an attack on an
event for Israeli hostages in Colorado. Police and FBI officials
say that the suspect was heard to shout Free Palestine
and threw an incendiary device into the crowd during the attack.
In the town of Boulder, local police chief Stephen Redfern
says that the neighborhood will stand strong.
Speaker 7 (04:02):
Older is not immune to tragedy sadly, and I know
a lot of people are scared right now. A lot
of people are upset and questioning how this happened and why.
All I know is Boulder has recovered before from acts
of violence and we will again.
Speaker 2 (04:19):
Boulder's police chief Stephen redferns speaking their authorities have confirmed
a forty five year old man has been arrested.
Speaker 1 (04:27):
Trade tensions between the US and China are ratteting up.
China has accused the US of violating a recent trade
deal between the two countries. The Chinese Ministry of Commerce
rejected President Trump's claim that Beijing breached the agreement in
a statement issued on Monday. Beijing accuses the US of
discriminatory restrictions, including new AI chip export controls and their
(04:48):
avocation of Chinese student visas. Speaking on Friday, Donald Trump
told reporters he hopes talks will continue soon.
Speaker 3 (04:56):
And I was very nice to then.
Speaker 6 (04:57):
I help them because they were in trouble with the
style budge a massive amount of business.
Speaker 3 (05:03):
But I'm sure that I'll speak to President she and
hopefully we'll work that out.
Speaker 8 (05:07):
But yeah, that's there's a violation of the.
Speaker 1 (05:09):
Agreement, President Donald Trump speaking there. Following the news, Agent
shares dropped, along with US stock index futures, a gauge
of Chinese stocks traded in Hong Kong, fell as much
as two point nine percent, the most nearly two months.
Speaker 2 (05:22):
Morgan Stanley is forecasting a nine percent drop in the
US and Dollar index in the next twelve months. The
bank joins the course of voices questioning the outlook for
the currency as fears overgrowth and trade grow. The Dollar
index has already dropped nearly ten percent from its peak
in February. The scrutiny of American assets comes alongside worries
(05:43):
over fiscal discipline. Treasury Secretary Scott Bessent was asked if
the US Treasury could run out of cash as the
deadline for increasing the federal debt ceiling gets closer.
Speaker 5 (05:54):
The United States of America is never going to default.
That is never going to happen. That we are on
the warning track and we will never hit.
Speaker 2 (06:03):
The wall, try sectary Scott Bessett, speaking to CBS's Face
the Nation yesterday. Republican congressional leaders have attached an increase
in the debtlimit to President Trump's tax and spending bill
that potentially puts avoiding a default at the mercy of
negotiations over the bill.
Speaker 1 (06:23):
At least ten percent of the UK's wealthy, non arme
population is estimated to have left the country. That's according
to a new report from former Treasury economist, which estimates
that twenty six thousand non doms left last year.
Speaker 3 (06:35):
Bloomberg James Wilcock has more.
Speaker 8 (06:37):
The report from economist Charles Walker used his migration and
tax data to say the number of ultra wealthy taxpayers
leaving the UK surge last year. But the main question
for the government is if the figures are right, is
this potential exodus going to become a fiscal problem. A
separate recent report said the Treasury would start to lose
money if twenty five percent of this wealthy non don
(07:00):
population were to leave. Both papers were commissioned by Andrew Barclay,
an entrepreneur and policyfellow at the Center right on wood
Thing Tank in London, James Wilcock Bloomberg Radio, and.
Speaker 2 (07:12):
Those are our top stories for you this morning. Looking
at the markets, Asian shares are down, the MSCI Asia
Pacific Index dropping by eight tenths of one percent. It
had declined as the most in about a month earlier
this morning on continued trade tensions. US stop futures are
also down this morning, both of the NAZAC and the
S and P five hundred. You've also got the Bloomberg
(07:34):
Dollar Spot Index down a tenth of one percent. Macroeconomic
headwinds for the dollar. Oil prices are up after OPEC
plus agreed to lift output two point three almost two
point four percent high. Now for breakthrough futures. You remember
had President Trump talking about doubling tariffs and steel and
aluminium imports over the weekend. Got lots of key data
(07:56):
this week ism and manufacturing, to the jobs out on
Friday and the ECB rate decision on Thursday. Teny Treasury
yields this morning up one and a half basis points
at four forty two.
Speaker 5 (08:08):
But it's going to be a busy week, Stephen certainly is.
Speaker 1 (08:10):
In a moment, we'll bring you more on Ukraine's attack
on Russia's long range bomber fleet, plus why China is
accusing the US of violating their recent trade deal.
Speaker 3 (08:19):
But another story that we've.
Speaker 1 (08:20):
Been reading as well today and listening to, I should say,
the latest weekend interview for Michelle hasain with Succession creator
Jesse Armstrong about his new film looking at the tech industry.
Unsurprisingly what ripe ground given the character is involved in
the tech industry in the real life. To try and
create a satirical drama in the style of Succession film
called Mountainhead.
Speaker 2 (08:41):
Apparently it's going to it's sort of funnier, it's darker humor.
But yes, it's much faster because it's not going to
have the multiple sort of seasons that Succession had. But
it is such an interesting interview with Jesse Armstrong and
our own Michelle has sayed, But she asked them some
really interesting questions about how close to real life is
(09:01):
this whole who.
Speaker 1 (09:03):
Inspire Twitch character clearly, but also really interesting to see
his comments about the British film industry and this as well,
talking about saying that he worries about with so many
big name creations coming out of the US, the future
of British drama and the important of the BBC and
that as well. So, I mean a really interesting conversation.
You can hear the podcast and read the interview on
our website. We'll put a link in our show notes.
Speaker 7 (09:24):
Now.
Speaker 2 (09:24):
Ukrainian and Russian officials are due to hold a second
round of talks later today, which could pave the way
for a potential CEASEPAR, but it comes after a series
of major attacks on both sides this weekend. Our EMEA
news director Ross and Matheson joins us now for more
on this Good morning, oz. Let's start with the Ukrainian
attacks on Russian airfields all over Russia as far away
(09:47):
as Siberia. What do we know about what was damaged
and how significant those attacks are given this three year war.
Speaker 9 (09:56):
Well, what we've heard from Ukraine is that there was
significant damage to a number of airplanes, including long range
bombers that are designed to carry both conventional but also
nuclear weapons. And as you say, the real thing here
is that they hit so deep inside Russia. It seems
like this was an eighteen month planned operation where they
(10:17):
managed to get drones inside Russia on trucks and then
launched them using wooden based systems. And so this was
very audacious really by Ukraine and to show again that
anywhere in Russia really is territory that they can reach.
Speaker 5 (10:36):
Russia's disputing the.
Speaker 9 (10:38):
Damage claim and saying that they managed to deflect at
least some of these drones from some airfields and that
the damage to airplanes was minor. Obviously, Ukraine says that
it managed to do several billion dollars worth of damage.
But either way, again it's more the symbolism of what
they've done in hitting so far right the way you say,
(10:59):
to eastern Siberia.
Speaker 1 (11:01):
And at the same time Ukraine came under attack one
of the longest barrages that had seen from Russian missiles
and drones, air sirens lasting for more than nine hours.
I mean, how do all of these escalations set the
tone for the talks that are due to take place
and it's unbult today.
Speaker 9 (11:15):
Well, it's interesting to see that at least for now
the talks are going ahead given this backdrop, as you say,
of mutual attacks across the weekend, But the idea probably
is to again demonstrate that even after a number of
years of war and with Ukraine obviously struggling for long
range missiles and access to certain weapons, is that they
(11:36):
can still hurt each other and still hit each other.
Speaker 10 (11:39):
You know.
Speaker 9 (11:39):
Ukraine is saying we may not have masses of troops
on the ground and curse, but we can still come
at you inside Russia, and Russia obviously wanting to send
the same message with it strikes on the weekend. So
they're coming into these talks both sort of showing you
know what, this is what we can do. Does that
necessarily lay the groundwork for a conducive station.
Speaker 5 (12:00):
It's a bit hard to say.
Speaker 9 (12:02):
I mean, the first rounds of talks that we saw
led to some prisoner swaps, which is obviously something, but
no real conversation around a ceasefar. Ukraine says that it's
yet to receive this apparent memorandum from Russia detailing what
its demands would be, so it's very hard to see
how these conversations can move forward without that list and
(12:23):
Ukraine again saying fundamentally what they really need is the
leaders to get together, and so that's the leaders of
Ukraine and Russia to be sitting in a room together,
because the only person who can really agree to end
this wark from the Russia side is Vladimir Putin. So
these talks are going ahead, but obviously, you know, we're
moving pretty slowly here.
Speaker 2 (12:43):
Yeah, And I suppose the lasts thought is about how
the US is playing into these discussions right now.
Speaker 9 (12:50):
Well, that's right, and we know that the Secretary of
State Marco Rubio spoke with the Russian his Russian counterpart
on the weekend, and the message from that seemed to
be it's really up to Russia and Ukraine to talk
directly and to find solutions here. And the US is
obviously still very much in the conversation but not wanting
to be the direct mediator. And the frustration that we've
(13:12):
seen growing from US President Donald Trump, who had hoped
to get a very quick deal here and a quick
seasphone that's obviously not happened, has now said, really, it's
up to you guys to do so. And so the
message from the US is they're obviously on the phone
a lot to the Ukrainians are on the phone to
the Russians, but they're not wanting to be the ones
(13:32):
in the middle of the negotiation, at least for now.
Speaker 2 (13:35):
And meanwhile, of course everyone around the world is watching
the footage because the footage, also the Ukrainian footage unverified
of the attack on the air of planes, has got
the attention of military surely all over the world because
the attacks were on sitting aircraft on the tarmac, a
forty Russian aircraft at least according to Ukrainian authority. So
(13:58):
I think everyone's going to be looking at that, and.
Speaker 1 (14:00):
Those are the images that are being played as we're
counting down to those talks as well. Ras I just
wanted to ask you briefly about the UK as well.
Though the government here set to launch its strategic Defense
review today. The goal, we're told is to send a
message to Moscow. What do we know about what's going
to be announced?
Speaker 5 (14:15):
Well, that's right.
Speaker 9 (14:16):
I mean a lot of countries the UK is looking
around and saying, well, what are the future challenges and
threats going to be and how can we prepare for those?
You know, we've got conflict, as you say, still in Ukraine,
in the Middle East, you got the US making clear
that countries in Europe, including the UK, need to become
more self reliant and so how do you adapt for that,
and how do you make your military more flexible, more
(14:38):
nimble even and how do you invest and where do
you invest? And so we're expecting announcements confirmation around that
in terms of building new munitions factories for example, so
building the pipeline in the UK for weaponry, possibly also
investing in future attack submarines. I mean those tach decades
to build, but you've got to make a decision at
(14:58):
some point to invest in them. And also just retention,
how do you make the UK military more appealing for
people and then how do you keep your top shelf
talent when they joined.
Speaker 5 (15:10):
So a lot in that to come today.
Speaker 1 (15:12):
Ross all of this is happening at a time we're
also elsewhere and you're watching the results out of the
Polish presidential election over the weekend as well, the nationalist
candidate being coming out on top, beating the centrist mayor
of Warsaw. This is continuing a sort of political status
that we've seen in Poland, following on from Andros Duda,
with you putting Prime Minister of Poland in a difficult
(15:35):
situation from here.
Speaker 5 (15:37):
Well, that's right. The result looks really really tight.
Speaker 9 (15:40):
I mean, the exit poles were swinging last night between
the two of them, and now we see a very
very close result. But as you say, the sort of
the Antieu candidate in a way in front. It'll be
interesting to see if there are any challenges to this
result because it is very very close. But as you say,
what it shows again is that Polanism is like other
(16:02):
countries in Europe, exceptionally polarized. And you've got, you know,
those who want to stay very much close to Europe
and those who are I guess seeing the appeal in
some of the retoric of candidates who've embraced the agenda
of those like Donald Trump.
Speaker 3 (16:17):
Okay, Rasell marsonari Ami, a news director, Thank you.
Speaker 2 (16:19):
Now, let's turn our attention away from Europe to China,
which has accused the US of violating its recent trade
deal and has wowed to take measures to defend its
own interests. Jenny Marsh leads our team covering economics and
government in China and joins us now, Jenny, good morning.
What exactly is Beijing said the US is doing the
accusation today?
Speaker 10 (16:39):
So the Ministry of Commerce in Beijing has come out
this morning on a public holiday in China basically say,
you know, the US insists on sort of continuing to
go its own way. They're saying, then it's going to
have to sort of respond with forceful measures. So they
haven't sort of been specific about what those are, but
it's sort of hinting at retaliation. And this comes after
(17:03):
last week the sort of this steady trickle of news
of extra restrictions that the Trump administration is applying in
the tech industry, so sort of throttling access to chip
design software that Chinese chip makers use, also curtailing the
export of jet engine parts that are crucial to China's
(17:23):
ability to develop its own jetliner industry. And that came
as well after sort of the global bound we saw
right after the Geneva Geneva agreement on the Huawei chips,
trying to ban use of them anywhere in the world.
So the Chinese are basically saying, you're violating the consensus
not only of the Geneva agreement but of this The
last call that was had between Trump and she which
(17:45):
was on January seventeenth, before Trump came into office, formally,
and I think the context there is, you know, over
the weekend, Trump has been saying, you know, he needs
to have a call with President She to sort things out,
and they're kind of saying, now, well, you know, Trump
isn't even sticking to what was agreed the last time
the two leaders spoke. So the influence there kind of is,
(18:06):
you know, it's very doubtful that she's going to get
on the phone with Trump in this kind of climate.
Speaker 1 (18:12):
Jenny, we had seen this big turnaround in sentiment, as
you mentioned, after the Geneva agreement. Again, how far does
this set us back in terms of the relations between
the US and China.
Speaker 10 (18:24):
I think this is a good reality check because you're
completely right. There was so much optimism after that Geneva agreement,
which kind of brought the tariffs down from one hundred
and forty five percent all the way down to thirty
for China, you know, and so that was a great
win in terms of the tariff pause, but it didn't
really sort of fundamentally change anything about the US China relationship.
(18:47):
It wasn't really a deal that they worked out in Geneva.
They just agreed to sort of hit the brakes and
pause things, and all of the things that sort of
the fundamentally sort of difficult issues that underpin this relationship,
they still remain there. So the US still wants to
block China's access to high tech chips because the US
wants to be the world's tech superpower. China still wants
(19:07):
to you know, develop Huawei into a company that can
rival and video, and it's going to use its the
leverage it has, which is you know, rare earths, these
very sort of niche metals that are crucial to everything
from sort of nuclear reactor rods to jet planes. And
so it's becoming this interesting battle where the fight isn't
really over the tariffs anymore, you know, the terariff fight.
(19:29):
We've sort of seen that play out. But now the
real sort of leverage in the negations to come is
going to be around the chip curbs and there export controls,
and it's interesting to see who actually has the most
leverage on that.
Speaker 1 (19:44):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (19:50):
Look for us on your podcast speed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (19:56):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (20:02):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
Speaker 5 (20:10):
I'm Caroline Hepka and.
Speaker 3 (20:11):
I'm Stephen Carol.
Speaker 1 (20:12):
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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