May 12, 2025 • 15 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) US and China both reported “substantial progress” after two days of talks in Switzerland aimed at de-escalating a trade war, marking what Chinese Vice Premier He Lifeng called “an important first step” toward resolving differences.
(2) The UK will increase English-speaking requirements for migrants, and make it harder for them to stay in the country as part of efforts to rein in levels of net immigration that have touched records in recent years.
(3) Donald Trump’s effort to secure peace in Ukraine is reaching a decisive moment with Ukraine’s Volodymyr Zelenskiy challenging Vladimir Putin to engage in talks this week.
(4) After four days that saw the worst fighting between India and Pakistan in half a century, as well as some nuclear saber-rattling, Donald Trump on Saturday declared that both countries had reached a “FULL AND IMMEDIATE CEASEFIRE.”
(5) As President Trump reconfigures global trade, the euro is riding its biggest rally in two decades and traders including Amundi and Templeton say that's just the beginning.
(6) President Donald Trump’s administration is likely to accept a luxury Boeing 747-8 jumbo jet from Qatar’s royal family, in what may be the most valuable gift ever received from a foreign government, ABC News reported Sunday.
Podcast conversation: The Airline Hack One Entrepreneur Uses Not to Miss a Connection
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Day Bag You podcast, available every
morning on Apple, Spotify or whatever you listen. It's Monday,
the twelfth of May in London. I'm Caroline Hepcare.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today. Stock Markets gain
after Washington and Beijing offer positive signals on their weekend
trade talks, with more details expected today.
Speaker 2 (00:28):
The UK's labor government moves to reign in migration amid
growing support for reform.
Speaker 1 (00:33):
UK Plus, It's just the beginning. Traders bet the euros
ascent is a title wave in the making.
Speaker 2 (00:40):
Let's start with a roundup of our top stories.
Speaker 1 (00:43):
Stock Markets are rising after the US and China announced
they had made headway in two days of trade talks
in Switzerland. While neither scient disclosed specifics, both agreed to
establish a new framework for negotiations, led by US Treasury
Secretary Scott Bessant and Chinese Vice Premier Rli Feng. Speaking
after Sunday's talks, Besant struck an optimistic tone.
Speaker 3 (01:03):
I'm happy to report that we made substantial progress when
the United States and China in the very important trade talks. First,
I want to thank our Swiss host. The Swiss government
has been very kind in providing us this wonderful venue,
and I think that led to a great deal of
the productivity we've seen. We will be giving details tomorrow,
(01:26):
but I can tell you that the talks were productive.
Speaker 1 (01:30):
Besan says. The US plans to share more details today,
while Holle Feng promised a joint statement. It comes after
President Trump increased tariffs on Chinese imports to one hundred
and forty five percent and China responded with tariff's on
US goods of one hundred and twenty five percent.
Speaker 2 (01:48):
The UK will make it harder for migrants to stay
in the country in the latest attempt to shrink Britain's
record levels of net migration, The Labor government plans to
change visa rules, toughenugh English language tests and titan rules
on overseas recruitment. Home Secretary Ivett Cooper says it'll help
to bring the numbers down.
Speaker 1 (02:09):
Those changes.
Speaker 4 (02:10):
The combination of just those low skilled visa changes and
also the care worker change is together. That is a
reduction of probably in the region of up to fifty
thousand low skilled worker visas, a reduction in the course
of this year alone.
Speaker 2 (02:25):
The Home Secretary's new policy comes after years of debate
around Britain's high migration levels. Support for the government has
fallen into a five year low in opinion polls. Yugov's
latest poll has the party at twenty two percent and
the anti immigration Reform UK Party taking the lead with
twenty nine percent.
Speaker 1 (02:44):
Vladimir Lanski says he will be waiting for Vladimir Putin
in Turkey on Thursday. The leaders of Russia and Ukraine
are being pushed to begin piece talks by the United
States and europe. Ukraine's president says Kiev is ready to
end this war. Your nasivial Kremiam in Ukraine.
Speaker 5 (03:01):
WI absolutely no problem engaging in negotiations. We're ready for
any format. I will be in Turkey this Thursday, the fifteenth,
I may. I expect Britain to come to Turkey as well.
Speaker 1 (03:12):
So Lensky's planned trip comes after US President Donald Trump
insisted the two leaders meet despite Moscow's reluctance to agree
to a thirty day ceasefire. The UK and other European
countries say they're reading a dramatic increase in sanctions on
Russia should not engage with negotiations.
Speaker 2 (03:30):
A ceasfar has been agreed between India and Pakistan after
some of the worst fighting in more than half a century.
US person Donald Trump is reported to have angered key
Indian officials on Saturday by announcing the agreement on truth
social before they could The way the seas far unfolded
may have helped set the stage for even more intense
(03:50):
fighting down the road in Pakistan. News of the seaspar
was met with fireworks and celebrations. The head of India's
Foreign Ministry, Victram Misseryday's statement over the weekend.
Speaker 6 (04:02):
It was agreed between them that both sides would stop
all fighting and military action on land and in the
air and see instructions have been given on both sides
to give effect to this understanding. The Director's General of
Military Operations will talk again on the twelfth of May
(04:25):
at twelve hundred dollars.
Speaker 2 (04:27):
That was India's Foreign Secretary vic from Mystery, speaking there
as both sides have reported drone attacks on their borders
with Kashmir just hours after the announcement was made.
Speaker 1 (04:38):
The US and Iran have agreed to continue talks about
the Islamic Republic's nuclear program. The news comes after discussions
over the weekend were described as encouraging by Washington and
useful by Tehran. However, India's excuse me, However, Iran's foreign
minister reiterated that Iran's ability to enrich uranium, a key
sticking point in negotiations, isn't up for discussion. Man's foreign minister,
(05:01):
who'd mediated the talks, says a fifth round of deliberations
will take place after the delegations consult with their respective leaderships.
Speaker 2 (05:09):
President Trump is heading to the Middle East today, aiming
to tap into billions of dollars in potential investment. The
visit to Saudi Arabia, the United Arab Emirates, and Cutter
comes as ABC News has reported that the Trump administration
is set to accept a luxury Boeing jet from Cuttar's
royal family. Reports suggests that the aircraft may be the
(05:30):
most valuable gift ever received from a foreign government in
the US. Speaking on truth Social President Trump suggested the
seven four seven jet would be a gift quote to
replace the forty year old Air Force one temporarily after
delays prevented Boeing delivering two new versions that were ordered
during President Trump's first term.
Speaker 1 (05:51):
Pharmaceutical stocks have dropped after President Trump announced plans to
sign an executive order later aimed at significantly reducing US
description drug prices with more here's Bloomberg's team, we're out
of bio.
Speaker 7 (06:03):
While the details remain unclear, the President claims the order
will require that Americans pay no more than the lowest
price charge for the same medication in any other country.
In a post on truth Social Trump said the move
could lower US drug prices buy as much as eighty percent.
Americans currently pay the highest prices in the world for
prescription medications. However, drug makers argue that such reforms would
(06:29):
cut into their revenues and undermine the development of breakthrough
therapies that could extend and improve lives. In London, Tea,
we're at a bio Bloomberg Radio.
Speaker 2 (06:38):
Let's look at the markets then after our top stories.
Asian stocks rising on this trade war de escalation. We
await a further news, of course today, but at the moment,
S and P five hundred Emuni futures are after a
flying startup by one point five percent, nows that future
is off almost two percent this morning. US city futures
also up eight tenths of one percent. Germany set to
(06:58):
dex At INDEXCS at a record high on Friday, recovering
after a major slump in March. The dollar is also
strengthening against traditional haven so the BlueBag Dollar Spot index
up a tenth of one percent, and you've got global
bonds in retreat. Ten year US yields up a couple
of basis points. Gold is also tumbled. We're down one
point four percent currently. Shares of Asian pharmaceutical companies that
(07:20):
have fallen on this idea that we'll perhaps see President
Trunk trying to slash US prescription drug prices and the
India Pakistan truce sees Pakistani stock surging nine point two percent,
overall Indians nifty fifty jumping three percent.
Speaker 1 (07:35):
Well, in a moment, we'll bring you more on what
we learned from those US China trade talks, plus why
some traders are betting on the euro continuing to strengthens. First,
a word on another story that caught ery this morning.
It's that time of year where you're starting to think
maybe about your summer holidays after some good recent good weather.
This unfortunately falls into the category of articles that I
(07:55):
cannot avoid reading. And then feeling bad about all of
my choices when it comes to traveling. This is at
travel hacks from what Bloomberg Pursuits are dubbing a group
the distinguished travel hackers.
Speaker 2 (08:06):
Yeah, they're absolutely brilliant. So this is Damon John who's
one of the Shark Tank judges, and he does I
just can't believe how many miles he travels. Four hundred
thousand miles in the air every year, spens so like
two hundred and fifty days a year traveling. He says,
you always must carry a salt scarf on flights. I
(08:28):
totally sympathize double book connections and just stay hungry even
if you feel jet lagged.
Speaker 1 (08:34):
I agree with that one. That's a step too far
for me. Silk scarfine, but I have to eat right.
You could read more on that Bloomberg dot com as
slash Pursuits. Well, let's bring you more on our top
stories now. China and the US have both said that
this weekend's trade talks produced substantial progress. It's the clearest
sign that further escalations of the trade war may be avoided.
They've promised more details to come today. Let's bring in
(08:57):
our Greater China Executive editor John leu More. John, great
to talk to you. What then, have we learned from
these two days of meetings and what are we hoping
for or expecting today?
Speaker 8 (09:06):
Well, what we have so far as rhetoric and the
rhetoric that we've gotten has been very positive. We have
Secretary Scott Besson saying progress was made. We had Chinese
Vice Premieer Holy fun actually complementing the American delegation, and
so everything seems to be pointing to de escalation, seems
(09:28):
to be pointing to talks aimed at trying to resolve
this trade war that we have on our hands, and
we're just waiting for the details.
Speaker 6 (09:37):
Now.
Speaker 2 (09:37):
Okay, how much are the markets they taken away from this?
Speaker 8 (09:40):
It's obviously risk one. Today. US stocks are up, Chinese
stocks are up, They're down a bit from their session highs.
Gold is down. So I think people are feeling better
about the situation, and I would say they see a
light at the end of this tunnel. A lot depends
on what will be in the details. We have just
gone through a month of great volatility in markets. Chinese
(10:06):
stocks just recouped all of their losses since Liberation Day
today and so I think everybody is a bit on edge.
Speaker 1 (10:13):
Still, John, tires are already hitting US business is their
risk of a stagflationary blow to the US. But how
much is at stake for China's economy and these talks
as well.
Speaker 8 (10:24):
There's a lot at stake for Chinese companies who export
well over five hundred billion US dollars to the United States.
It's a huge market for Chinese goods. If these tariffs
stay in place, there is not going to be any
trade between the United States and China, and the threat
of decoupling, I think would have massive implications, not only
(10:46):
for China, but for the global economy. And you know,
the prospect of something less than one hundred percent no trade,
something less than what we have now, I think is
very optimistic and is getting people feeling good about the future.
And it will be good for the Chinese economy. The
government is introducing lots of stimulus. If it can keep
(11:08):
some of that trade with the US, that will help
a lot.
Speaker 2 (11:10):
Okay, very interesting. Thank you so much, John for being
with us this morning. Biteberg's Greater China executive editor, John
lu what.
Speaker 1 (11:18):
As President Trump reconfigures global trade, the euro is riding
its biggest rally in two decades, and traders including A.
Mondy and Templeton say it's just the beginning. The common
currency jumped by fourteen percent the three and a half
year high last month. Joining US Now for more our
FX and rates reporter Naomi Jiujitsu Naomi Good Mornings. The
tide could be turning in favor of the euro. What
(11:40):
does this mean?
Speaker 9 (11:41):
So the euro has been staging a massive comeback after
it fell close to parody against the dollar earlier this year.
It's been a really big beneficiary of the seller that
we've been seeing in the dollar after Trump's terriff announcement
and investment hases like a Mundy and also Deutsche believe
that it stands to rise to around one twenty by
(12:02):
the end of the year.
Speaker 2 (12:03):
So then, I mean, because obviously the trade war is
ongoing and that is perhaps one of the key drivers.
But why do you think this is happening now?
Speaker 9 (12:12):
So if we look at what we've the move that
we've seen in the dollar, that's really key. Like for
the past fifteen years or so, European investors, they've been
investing abroad and a lot of this has been going
into the US, like US stocks and bonds because they
believe that US growth would outpace the rest of the
(12:32):
world and that rates in the US would be higher
than in a lot of other countries. And that's been
true for years. But over the past few months we've
seen Trump's policies and they've raised a lot of uncertainties,
and they've raised a lot of questions about how secure
US assets are. And this is a really big deal
because US assets, and especially US treasuries, they're considered to
(12:55):
be among the safest assets in the world. And this
is what's triggered aside in the dollar and the end
the year has benefited from this.
Speaker 1 (13:03):
So where does the euro go from here?
Speaker 3 (13:04):
Then?
Speaker 1 (13:05):
We've seen this strengthening since as you say, that low
and near parity only a couple of months ago. Since then,
the trajectory has been largely upward. Does that look likely
to continue?
Speaker 8 (13:16):
It has?
Speaker 9 (13:16):
Like, yeah, it's been upward. It could continue. It's trading
around one to twelve at the moment, but a growing
number of investors and banks believe that it could rise
more like Deutsche's for example, is forecasting it to rise
to one twenty by the end of the year, and
then even more to one thirty by twenty twenty seven,
and that's a huge jump from where we are now.
(13:38):
A lot of people believe that this will be moved.
This will be driven by diversification flows. So that means
that in the coming years, as European investors, as you
start to pair back their investments in the US, like
even just a little bit, like whether it's by shifting
funds out of the US or decreasing the amount of
(14:03):
new investments into the US, this could push the Euro
even higher.
Speaker 2 (14:07):
Yeah, that's very positive, isn't it in terms of how
the Euro is being seen. What do you think the
risks are to that sort of very optimistic scenario.
Speaker 9 (14:17):
Okay, So in terms of risks, if we see the
US significantly dial down its tariffs on Europe and on
other countries, or if Trump turns down his other aggressive
policy positions, that could help to encourage the view that, yeah,
like the US still is a secure place to keep investments.
And then at the same time, you know, the Euro
(14:40):
has been benefiting on this view that like Germany and
other European countries will increase fiscal spending and if they're
slow to do this and if their economies are slow
to grow as a result of this, you know, it
could have a negative impact on the region and this
could make people think that, like maybe be shifting money
back to Europe isn't the right thing to do, and
(15:03):
this could hold the Europe back from gaining further.
Speaker 1 (15:07):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (15:13):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (15:19):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (15:25):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 1 (15:34):
And I'm Stephen Carroll. 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 (00:10):
This is the Bloomberg Day Bag You podcast, available every
morning on Apple, Spotify or whatever you listen. It's Monday,
the twelfth of May in London. I'm Caroline Hepcare.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today. Stock Markets gain
after Washington and Beijing offer positive signals on their weekend
trade talks, with more details expected today.
Speaker 2 (00:28):
The UK's labor government moves to reign in migration amid
growing support for reform.
Speaker 1 (00:33):
UK Plus, It's just the beginning. Traders bet the euros
ascent is a title wave in the making.
Speaker 2 (00:40):
Let's start with a roundup of our top stories.
Speaker 1 (00:43):
Stock Markets are rising after the US and China announced
they had made headway in two days of trade talks
in Switzerland. While neither scient disclosed specifics, both agreed to
establish a new framework for negotiations, led by US Treasury
Secretary Scott Bessant and Chinese Vice Premier Rli Feng. Speaking
after Sunday's talks, Besant struck an optimistic tone.
Speaker 3 (01:03):
I'm happy to report that we made substantial progress when
the United States and China in the very important trade talks. First,
I want to thank our Swiss host. The Swiss government
has been very kind in providing us this wonderful venue,
and I think that led to a great deal of
the productivity we've seen. We will be giving details tomorrow,
(01:26):
but I can tell you that the talks were productive.
Speaker 1 (01:30):
Besan says. The US plans to share more details today,
while Holle Feng promised a joint statement. It comes after
President Trump increased tariffs on Chinese imports to one hundred
and forty five percent and China responded with tariff's on
US goods of one hundred and twenty five percent.
Speaker 2 (01:48):
The UK will make it harder for migrants to stay
in the country in the latest attempt to shrink Britain's
record levels of net migration, The Labor government plans to
change visa rules, toughenugh English language tests and titan rules
on overseas recruitment. Home Secretary Ivett Cooper says it'll help
to bring the numbers down.
Speaker 1 (02:09):
Those changes.
Speaker 4 (02:10):
The combination of just those low skilled visa changes and
also the care worker change is together. That is a
reduction of probably in the region of up to fifty
thousand low skilled worker visas, a reduction in the course
of this year alone.
Speaker 2 (02:25):
The Home Secretary's new policy comes after years of debate
around Britain's high migration levels. Support for the government has
fallen into a five year low in opinion polls. Yugov's
latest poll has the party at twenty two percent and
the anti immigration Reform UK Party taking the lead with
twenty nine percent.
Speaker 1 (02:44):
Vladimir Lanski says he will be waiting for Vladimir Putin
in Turkey on Thursday. The leaders of Russia and Ukraine
are being pushed to begin piece talks by the United
States and europe. Ukraine's president says Kiev is ready to
end this war. Your nasivial Kremiam in Ukraine.
Speaker 5 (03:01):
WI absolutely no problem engaging in negotiations. We're ready for
any format. I will be in Turkey this Thursday, the fifteenth,
I may. I expect Britain to come to Turkey as well.
Speaker 1 (03:12):
So Lensky's planned trip comes after US President Donald Trump
insisted the two leaders meet despite Moscow's reluctance to agree
to a thirty day ceasefire. The UK and other European
countries say they're reading a dramatic increase in sanctions on
Russia should not engage with negotiations.
Speaker 2 (03:30):
A ceasfar has been agreed between India and Pakistan after
some of the worst fighting in more than half a century.
US person Donald Trump is reported to have angered key
Indian officials on Saturday by announcing the agreement on truth
social before they could The way the seas far unfolded
may have helped set the stage for even more intense
(03:50):
fighting down the road in Pakistan. News of the seaspar
was met with fireworks and celebrations. The head of India's
Foreign Ministry, Victram Misseryday's statement over the weekend.
Speaker 6 (04:02):
It was agreed between them that both sides would stop
all fighting and military action on land and in the
air and see instructions have been given on both sides
to give effect to this understanding. The Director's General of
Military Operations will talk again on the twelfth of May
(04:25):
at twelve hundred dollars.
Speaker 2 (04:27):
That was India's Foreign Secretary vic from Mystery, speaking there
as both sides have reported drone attacks on their borders
with Kashmir just hours after the announcement was made.
Speaker 1 (04:38):
The US and Iran have agreed to continue talks about
the Islamic Republic's nuclear program. The news comes after discussions
over the weekend were described as encouraging by Washington and
useful by Tehran. However, India's excuse me, However, Iran's foreign
minister reiterated that Iran's ability to enrich uranium, a key
sticking point in negotiations, isn't up for discussion. Man's foreign minister,
(05:01):
who'd mediated the talks, says a fifth round of deliberations
will take place after the delegations consult with their respective leaderships.
Speaker 2 (05:09):
President Trump is heading to the Middle East today, aiming
to tap into billions of dollars in potential investment. The
visit to Saudi Arabia, the United Arab Emirates, and Cutter
comes as ABC News has reported that the Trump administration
is set to accept a luxury Boeing jet from Cuttar's
royal family. Reports suggests that the aircraft may be the
(05:30):
most valuable gift ever received from a foreign government in
the US. Speaking on truth Social President Trump suggested the
seven four seven jet would be a gift quote to
replace the forty year old Air Force one temporarily after
delays prevented Boeing delivering two new versions that were ordered
during President Trump's first term.
Speaker 1 (05:51):
Pharmaceutical stocks have dropped after President Trump announced plans to
sign an executive order later aimed at significantly reducing US
description drug prices with more here's Bloomberg's team, we're out
of bio.
Speaker 7 (06:03):
While the details remain unclear, the President claims the order
will require that Americans pay no more than the lowest
price charge for the same medication in any other country.
In a post on truth Social Trump said the move
could lower US drug prices buy as much as eighty percent.
Americans currently pay the highest prices in the world for
prescription medications. However, drug makers argue that such reforms would
(06:29):
cut into their revenues and undermine the development of breakthrough
therapies that could extend and improve lives. In London, Tea,
we're at a bio Bloomberg Radio.
Speaker 2 (06:38):
Let's look at the markets then after our top stories.
Asian stocks rising on this trade war de escalation. We
await a further news, of course today, but at the moment,
S and P five hundred Emuni futures are after a
flying startup by one point five percent, nows that future
is off almost two percent this morning. US city futures
also up eight tenths of one percent. Germany set to
(06:58):
dex At INDEXCS at a record high on Friday, recovering
after a major slump in March. The dollar is also
strengthening against traditional haven so the BlueBag Dollar Spot index
up a tenth of one percent, and you've got global
bonds in retreat. Ten year US yields up a couple
of basis points. Gold is also tumbled. We're down one
point four percent currently. Shares of Asian pharmaceutical companies that
(07:20):
have fallen on this idea that we'll perhaps see President
Trunk trying to slash US prescription drug prices and the
India Pakistan truce sees Pakistani stock surging nine point two percent,
overall Indians nifty fifty jumping three percent.
Speaker 1 (07:35):
Well, in a moment, we'll bring you more on what
we learned from those US China trade talks, plus why
some traders are betting on the euro continuing to strengthens. First,
a word on another story that caught ery this morning.
It's that time of year where you're starting to think
maybe about your summer holidays after some good recent good weather.
This unfortunately falls into the category of articles that I
(07:55):
cannot avoid reading. And then feeling bad about all of
my choices when it comes to traveling. This is at
travel hacks from what Bloomberg Pursuits are dubbing a group
the distinguished travel hackers.
Speaker 2 (08:06):
Yeah, they're absolutely brilliant. So this is Damon John who's
one of the Shark Tank judges, and he does I
just can't believe how many miles he travels. Four hundred
thousand miles in the air every year, spens so like
two hundred and fifty days a year traveling. He says,
you always must carry a salt scarf on flights. I
(08:28):
totally sympathize double book connections and just stay hungry even
if you feel jet lagged.
Speaker 1 (08:34):
I agree with that one. That's a step too far
for me. Silk scarfine, but I have to eat right.
You could read more on that Bloomberg dot com as
slash Pursuits. Well, let's bring you more on our top
stories now. China and the US have both said that
this weekend's trade talks produced substantial progress. It's the clearest
sign that further escalations of the trade war may be avoided.
They've promised more details to come today. Let's bring in
(08:57):
our Greater China Executive editor John leu More. John, great
to talk to you. What then, have we learned from
these two days of meetings and what are we hoping
for or expecting today?
Speaker 8 (09:06):
Well, what we have so far as rhetoric and the
rhetoric that we've gotten has been very positive. We have
Secretary Scott Besson saying progress was made. We had Chinese
Vice Premieer Holy fun actually complementing the American delegation, and
so everything seems to be pointing to de escalation, seems
(09:28):
to be pointing to talks aimed at trying to resolve
this trade war that we have on our hands, and
we're just waiting for the details.
Speaker 6 (09:37):
Now.
Speaker 2 (09:37):
Okay, how much are the markets they taken away from this?
Speaker 8 (09:40):
It's obviously risk one. Today. US stocks are up, Chinese
stocks are up, They're down a bit from their session highs.
Gold is down. So I think people are feeling better
about the situation, and I would say they see a
light at the end of this tunnel. A lot depends
on what will be in the details. We have just
gone through a month of great volatility in markets. Chinese
(10:06):
stocks just recouped all of their losses since Liberation Day
today and so I think everybody is a bit on edge.
Speaker 1 (10:13):
Still, John, tires are already hitting US business is their
risk of a stagflationary blow to the US. But how
much is at stake for China's economy and these talks
as well.
Speaker 8 (10:24):
There's a lot at stake for Chinese companies who export
well over five hundred billion US dollars to the United States.
It's a huge market for Chinese goods. If these tariffs
stay in place, there is not going to be any
trade between the United States and China, and the threat
of decoupling, I think would have massive implications, not only
(10:46):
for China, but for the global economy. And you know,
the prospect of something less than one hundred percent no trade,
something less than what we have now, I think is
very optimistic and is getting people feeling good about the future.
And it will be good for the Chinese economy. The
government is introducing lots of stimulus. If it can keep
(11:08):
some of that trade with the US, that will help
a lot.
Speaker 2 (11:10):
Okay, very interesting. Thank you so much, John for being
with us this morning. Biteberg's Greater China executive editor, John
lu what.
Speaker 1 (11:18):
As President Trump reconfigures global trade, the euro is riding
its biggest rally in two decades, and traders including A.
Mondy and Templeton say it's just the beginning. The common
currency jumped by fourteen percent the three and a half
year high last month. Joining US Now for more our
FX and rates reporter Naomi Jiujitsu Naomi Good Mornings. The
tide could be turning in favor of the euro. What
(11:40):
does this mean?
Speaker 9 (11:41):
So the euro has been staging a massive comeback after
it fell close to parody against the dollar earlier this year.
It's been a really big beneficiary of the seller that
we've been seeing in the dollar after Trump's terriff announcement
and investment hases like a Mundy and also Deutsche believe
that it stands to rise to around one twenty by
(12:02):
the end of the year.
Speaker 2 (12:03):
So then, I mean, because obviously the trade war is
ongoing and that is perhaps one of the key drivers.
But why do you think this is happening now?
Speaker 9 (12:12):
So if we look at what we've the move that
we've seen in the dollar, that's really key. Like for
the past fifteen years or so, European investors, they've been
investing abroad and a lot of this has been going
into the US, like US stocks and bonds because they
believe that US growth would outpace the rest of the
(12:32):
world and that rates in the US would be higher
than in a lot of other countries. And that's been
true for years. But over the past few months we've
seen Trump's policies and they've raised a lot of uncertainties,
and they've raised a lot of questions about how secure
US assets are. And this is a really big deal
because US assets, and especially US treasuries, they're considered to
(12:55):
be among the safest assets in the world. And this
is what's triggered aside in the dollar and the end
the year has benefited from this.
Speaker 1 (13:03):
So where does the euro go from here?
Speaker 3 (13:04):
Then?
Speaker 1 (13:05):
We've seen this strengthening since as you say, that low
and near parity only a couple of months ago. Since then,
the trajectory has been largely upward. Does that look likely
to continue?
Speaker 8 (13:16):
It has?
Speaker 9 (13:16):
Like, yeah, it's been upward. It could continue. It's trading
around one to twelve at the moment, but a growing
number of investors and banks believe that it could rise
more like Deutsche's for example, is forecasting it to rise
to one twenty by the end of the year, and
then even more to one thirty by twenty twenty seven,
and that's a huge jump from where we are now.
(13:38):
A lot of people believe that this will be moved.
This will be driven by diversification flows. So that means
that in the coming years, as European investors, as you
start to pair back their investments in the US, like
even just a little bit, like whether it's by shifting
funds out of the US or decreasing the amount of
(14:03):
new investments into the US, this could push the Euro
even higher.
Speaker 2 (14:07):
Yeah, that's very positive, isn't it in terms of how
the Euro is being seen. What do you think the
risks are to that sort of very optimistic scenario.
Speaker 9 (14:17):
Okay, So in terms of risks, if we see the
US significantly dial down its tariffs on Europe and on
other countries, or if Trump turns down his other aggressive
policy positions, that could help to encourage the view that, yeah,
like the US still is a secure place to keep investments.
And then at the same time, you know, the Euro
(14:40):
has been benefiting on this view that like Germany and
other European countries will increase fiscal spending and if they're
slow to do this and if their economies are slow
to grow as a result of this, you know, it
could have a negative impact on the region and this
could make people think that, like maybe be shifting money
back to Europe isn't the right thing to do, and
(15:03):
this could hold the Europe back from gaining further.
Speaker 1 (15:07):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (15:13):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (15:19):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (15:25):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 1 (15:34):
And I'm Stephen Carroll. 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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