May 1, 2025 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) The US and Ukraine reached a deal over access to the country’s natural resources, offering a measure of assurance to officials in Kyiv who had feared that President Donald Trump would pull back his support in peace talks with Russia.
(2) Meta quelled Wall Street concerns about the impact of the Trump administration’s trade war on advertising sales, reporting first-quarter revenue that beat expectations and forecasting additional spending.
(3) President Donald Trump acknowledged that his sweeping tariff program had risked imperiling him politically, but said he would not rush deals to appease nervous investors during a town hall on Wednesday.
(4) The European Union is planning to share a paper with the US next week that will set out a package of proposals to kick-start trade negotiations with the Trump administration.
(5) Microsoft shares jumped after the company reported stronger-than-expected quarterly sales and profit growth, suggesting customer demand for cloud services has held steady despite a wave of tariffs and economic turbulence.
(6) The Swedish furniture chain IKEA operates in more than 60 countries worldwide, including a significant presence in the United States.The CEO of the Ingka group - which operates most of IKEA's stores - has been speaking to Bloomberg about how they're adapting to the tariff uncertainty.
Podcast conversation: What Meta Really Means About ‘Worse’ European Service: Dave Lee
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. Today's The Bloomberg Daybreak
Euroup podcast available every morning on Apple, Spotify or wherever
you listen. It's Thursday, the first of May in London.
I'm Stephen Carroll. Coming up today. The US and Ukraine
sign a deal over access to the country's natural resources.
(00:24):
Donald Trump concedes his approach to global trade poses significant
political risks, as Microsoft and Meta shrug off economic turbulence
to deliver results that defy expectations plus unclear instructions, The
boss of Ikia's owner tells us they've no choice but
to wait and see as tariffs create uncertainty for businesses
(00:45):
and consumers. Let's start with a roundup of our top stories.
The United States and Ukraine have reached a deal over
access to Ukraine's natural resources. Under the agreement, America will
be given privileged access to new investment projects to deliver
things like aluminium, graph oil, and natural gas. The deal
is seen as an important step in securing President Trump's
(01:05):
goodwill toward Kiev, as his administration continues efforts to end
the war that began with Russia's full scale invasion more
than three years ago. His US Treasury Secretary Scott Bessant.
Speaker 2 (01:15):
Today's agreement signals clearly to Russian leadership that the Trump
administration is committed to a peace process centered on a free,
sovereign and prosperous Ukraine over the long term. It's time
for this cruel and senseless war to end.
Speaker 1 (01:34):
Scott Besont, speaking there is the signing eases tensions between
the two countries. Ukrainian President Vladimir Zelenski traveled to Washington
in February to sign a deal, but returned empty handed
after a tense on camera exchanged with President Trump and
Vice President j D. Vance in the Oval Office. Donald
Trump has acknowledged that his sweeping tariff program poses significant
(01:55):
political risks to his presidency, but the US president says
he won't rush into deals to appeace nervous investors. Speaking
during a town hall event, Trump said he remained determined
to push on and he believes he'll be able to
convince people how good this is. Trump was also asked
by News Nation host Bill O'Reilly if he agreed that
his tariff proposals had a perception problem.
Speaker 3 (02:17):
Yeah, but I'm an honest guy, and we have to
save the country. We were losing five billion dollars a
day with this man that we had as a president.
The autopen as president. Nobody even knows who the president was.
We're losing. Think of it. We're losing five billion dollars
a day, and a big chunk of it was from China.
(02:37):
Now China is sending its boats back. The boats are
not being unloaded because they have a one hundred and
forty five percent tariff, which is, you know, a record
setting type tariff.
Speaker 1 (02:47):
Trump spoke at that News Nation town hall event via
a video link after data shows that the US economy
contracted at the start of the year for the first
time since twenty twenty two.
Speaker 4 (02:58):
Inflation ofju justed.
Speaker 1 (02:59):
GDP increased at an annualized rate of zero point three percent,
dragged down by a surge in imports as firms appeared
to be front running US tariffs. Trump says he should
get a pass on the data, as his administration was
just getting used to things. The European Union will present
US officials with proposals next week aim at kickstarting trade negotiations.
Speaker 4 (03:20):
Bloomberg has learned. The ideas include.
Speaker 1 (03:22):
Lowering trade and non tariff barriers, as well as boosting
European investment in the US. Our sources say the EU
is also preparing for a worst case scenario if negotiations fail,
including lists of US goods to hit with counter tariffs
and possible export restrictions.
Speaker 4 (03:37):
Here's Bloomberg's kayy lines in Washington.
Speaker 5 (03:40):
What's important about this is we understand that this proposal
on trade includes both tariff and non tariff barriers, perhaps
in recognition of the kind of language we've heard from
administration officials around the issues with Europe specifically.
Speaker 1 (03:53):
That's Spoomberg' kay lines in Washington. It comes as ABRISS
think tank says Kirstarmer's government won't be able to avoid
uncomfortable trade offs on areas such as human rights when
negotiating trade partnerships in an increasingly unstable and uncertain world.
The IPPR, which is close links to the Labor Party,
says the UK will need to be pragmatic about trade
deals with countries that don't share all our values and
(04:16):
flexible in observing international law. Microsoft shares sewared in after
hours trading on the back of better than expected sales
and profit growth. Total revenue during the third quarter of
the financial euros by thirteen percent to just over seventy
billion dollars. Gains were bolstered by the firm's Azure Cloud unit,
which attributed sixteen percentage points of its growth to artificial
(04:40):
intelligence products. CEO sach Andadalla says the company's AI capabilities
are growing rapidly.
Speaker 6 (04:45):
Now I'll highlight examples, starting with infrastructure. We continue to
expand our data center capacity. This quarter alone, reopened dcs
in ten countries across four continents. Model capabilities are doubling
in performance every six months thanks to multiple compounding scaling laws.
Speaker 4 (05:06):
Microsoft's such An Adella.
Speaker 1 (05:07):
Speaking there, Microsoft shares rose by almost seven percent in
after hours trading yesterday. Staying with tech news, Meta also
reported estimate beating financial results defying tariff concerns. The Facebook
and Instagram parent announced forty two point three billion dollars
in first quarter sales, beating analyst expectations for forty one
(05:29):
point four billion dollars. Speaking after the news, Meta CEO
Mark Zuckerberg told investors the firm.
Speaker 4 (05:34):
Is ready to face market volatility.
Speaker 7 (05:36):
We've had a strong start to the year. Our community
keeps growing, with more than three point four billion people
now using at least one of our apps each day.
Our business is also performing very well, and I think
we're well positioned to navigate the macroeconomic uncertainty.
Speaker 1 (05:54):
Max Zuckerberg, speaking there, The company says it expects to
spend between sixty four and seventy two billion dollars this year,
attributing some of the increase to tariffs imposed by the
Trump administration. Meta also says it's responding to the trade
war by rethinking suppliers and optimizing its supply chain. And
Polls open today in some parts of England for local
(06:17):
and mayoral elections. Changes to councils means there are fewer
positions being voted on than in previous years, but the
vote is the first big set of polls since Labour's
landslide election victory last year. Those are your top stories
on the markets. We had US docs jumping into Wednesday's close,
extending a winning streak, the S and P five hundred
finishing up two tenths of one percent, seven sessions in
(06:38):
a row now of gains, and futures pointing higher again
one point one percent higher for smp E mini futures,
while Nasdaq futures are up by one and a half
percent of course, the earnings for Microsoft and Meta in
focus there as well. Treasuries also clinching a seven day
winning streak tenure yields of fawn over twenty basis points.
Speaker 4 (06:55):
They're up two today to four point one to.
Speaker 1 (06:57):
Eight percent on the tenuere The dollar also continuing to recover,
trading a quarter of one percent higher on the Bloomberg
Dollar Spot Index. The yen is six tenth week or
after the Bank of Japan held interest rates steady. We're
also watching gold prices down again today by one point
eight percent to three thousand, two hundred and twenty eight
dollars at troy ounce. In a moment, we'll bring you
(07:18):
more on the US Ukraine deal on natural resources, plus
what the boss of the group operating hundreds of Ikea
stores around the world told us about the impact of tariffs.
But on the question of Meta's earnings, I was been
reading Bloomberg Opinion Dave Lee's column about this this morning,
and in particular comments that drew a lot of attention
(07:39):
in Meta's statement about how their warning of a materially
worse user experience for European users because of rules introduced
under the EA's Digital Markets Acts now, Davelye says this
essentially means that the social media giant will now expect
to make significantly less money from users in Europe than
it otherwise would have. So what actually might be verterially
(07:59):
worse is actually for Meta itself unclear exactly how it
would make the user experience worse for users of Meta's platform.
Meta made about sixteen percent of its global revenue in
the EU last year. They're currently in this battle with
the EU over the EU demands under the legislation to
offer less personalized ads and better protect users personal data
(08:19):
as a result, and now Meta offered a version of this,
the EU hasn't approved that yet. It also didn't welcome
Meta's idea for a paying subscription that would give users
no ads. But as davely points out, these changes are
coming at a delicate time for advertising sales. Growth outside
the US is slowing. Although this report was very strong
from Meta, and the impact of tarfs, particularly in what
it means for Chinese advertisers advertising targeting American consumers, is
(08:42):
still unclear. Lots of detail in his piece. You can
read at Bloomberg dot com for its last opinion, and
we'll put a link to it in.
Speaker 4 (08:47):
Our podcast show notes as well.
Speaker 7 (08:51):
Well.
Speaker 1 (08:51):
Let's bring you more now on the deal between the
US and Ukraine over access to natural resources. Our EMEA
and NES director Rosalind Matheson joins US now for more
Roz good mourning.
Speaker 4 (08:59):
What exactly does this deal entail?
Speaker 8 (09:02):
Well, what it does is actually gives the US privileged
access to new investment projects, and that's to develop Ukraine's
natural resources, of which it has potentially quite a bit.
It is changed somewhat for the initial deal that was
talked about, and that's too after some objections from the
(09:23):
Ukrainians that the negotiations got quite contentious of course throughout.
And what it does now cover is actually reimbursing the
US for future military assistance to Ukraine rather than all
the military assistance that's.
Speaker 4 (09:38):
Been provided already.
Speaker 8 (09:40):
And it does keep the door open under the terms
of this deal for Kiev to push ahead with its
intent at least or its desire to join the EU.
But what it is is essentially a fund which is
financed by revenues from these new licenses will be everything
from critical minerals to oil and gas. The US gets
first claim on the profits that are transferred into that fund,
(10:03):
and it's jointly managed by both nations. So this gives
Ukraine and economic link to the US, strong economic ties.
It gives the US some investment opportunities in Ukraine. It's
not a hard security guarantee though for Ukraine.
Speaker 4 (10:19):
So overall, I mean, is this a good deal for Kiev?
Speaker 8 (10:23):
Well, it's better, arguably than the original terms of the deal,
which we're seen as very much favoring the US and
giving the US in essence control over a large part
of Ukraine's economy. So some of the terms have been
altered here in the final version, and the US would
argue that economic ties really are a version of security
(10:46):
ties because it binds the US into Ukraine's future and
its future success. But it's not a hard security guarantee,
and certainly it's not a military guarantee, and it's not
anything that says that the US would come to Ukraine's
aid militarily potentially in the future. So it does give
Ukraine something in its pocket, and it does also signal
(11:09):
to Donald Trump that the Ukraine is serious about trying
to reach a cease far.
Speaker 1 (11:15):
What does this mean for Donald Trump though? Is it
something that he can claim as a victory at a
time when he's under pressure over the impact of his
trade policies on the US economy.
Speaker 4 (11:25):
Well, that's right.
Speaker 8 (11:26):
He does need to declare at least a few victories,
and it gives him something. He can say, I've got
a tangible deal here in my pocket. He is looking
at an economy in the US where it's under some
pressure over He is quite volatile policy making when it
comes to trade, and you can see that showing up
in sentiment and other data in the US now. And
(11:47):
he does need some runs on the board. He says
he's got trade deals coming with individual countries, but he
doesn't have any of those so far. And of course
we know, you know, separately, fighting has resumed in Gaza.
Israel is back in there, its troops are back in
there fighting Hamas in Gaza. So there's been no quick
resolution to that conflict either. It does give me a win,
(12:09):
but there's still no broader CEASPA yet arranged when it
comes to Ukraine.
Speaker 4 (12:14):
Okay, Rosla mats and our Amaa andis director, thank you
very much.
Speaker 1 (12:18):
Well, let's turn fron of the story now. Donald Trump
saying he's not going to rush into deals to appease
investors uncertainty over his tariff. So US consumer confidence though
slumping to its lowest level in almost five years, and
it's been dented elsewhere to by fears over the impact
of the trade levees. The Swedish furniture chain ike operates
in more than sixty countries worldwide, including a significant presence
(12:38):
in the United States. The CEO of the Inca Group,
which operates most of IKEA's stores, has been speaking to
Bloomberg about how they're adapting to the tariff uncertainty.
Speaker 9 (12:47):
We liking any companies benefit from stable relations, predictable relations,
and of course where there it's free trade or low
TARO for arrangements, normally that leads to less inflation and
less uncertainty in general. Or we just have to wait
to see, so.
Speaker 4 (13:05):
I thinker group CEO Jessper Broden.
Speaker 1 (13:07):
They're speaking to Bloomberg Jennifer Creary, who joins us now
for more.
Speaker 4 (13:11):
Jennifer, good morning.
Speaker 1 (13:12):
How worried then, is Jessper Broden about the impact of
tariffs on the Ikea business?
Speaker 10 (13:18):
Yeah, So, as you heard, yesper was calling for stable
and predictable trade relations. So the implication being that it's
very difficult for Ikea and other companies to navigate Donald
Trump's volatile trade policies. Now, he's not saying much about
how much tariffs are actually going to impact IKEA's supply chain.
You know, he hasn't committed to any definitive measures yet.
But what's interesting about Aki is that it sources most
(13:41):
about seventy percent of its products from Europe, while the
rest of it is made in Asia. So of course
I'll be impacted by any levies on imports from China
to the US, US being its second largest market, so
some of those pressure points will be you know, they'll
have to these questions like a lot of companies are asking,
(14:02):
you know, can they make cost savings through negotiations with
suppliers or will they have to raise prices? And what's
interesting is, you know, Ikia, as a value reta, will
be in this tricky spot because they'll still need to
be affordable because you know, as we all know, buying
fellosure can get pretty expensive.
Speaker 1 (14:18):
Is Yes, we're Brodens seeing any signs of the weaker
consumer confidence issues that we've seen highlighted in data both
in the US but also elsewhere.
Speaker 10 (14:27):
Yeah, so I asked them this yesterday, and he said
consumer confidence has declined in the past few months. But
you caveat of that by saying, you know, this is
not something that is exclusive to IKE. It's affecting all companies.
But you know, if you look at it, it's last set
of results last year, so it's last year's full year results.
AKA already reported a decline of about almost thirty eight
(14:49):
percent in operating profit and that came after it announced
that it invested two point one billion euros in cutting
prices and that has come at the expense of some
of those financial guest and so it's already under pressure
starting the year on kind of a week of foot
and of course with tariff and other kind of you know,
inflation on the cost of war materials, that's just going
(15:11):
to pile additional challenges onto the retailer. But you know,
I asked him, are you going to hike prices? And
there's no indication yet. He was very tight lipped about that.
So let's wait in Zoon.
Speaker 1 (15:25):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 11 (15:31):
Look for us on your podcast feed every morning on
Apple Spotify, and anywhere else you get your podcasts.
Speaker 1 (15:37):
You can also listen live each morning on London Dab Radio,
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Speaker 11 (15:43):
Our flagship New York station, is also available on your
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Speaker 4 (15:51):
I'm Caroline Hipka and I'm Stephen Carroll.
Speaker 1 (15:53):
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. Today's The Bloomberg Daybreak
Euroup podcast available every morning on Apple, Spotify or wherever
you listen. It's Thursday, the first of May in London.
I'm Stephen Carroll. Coming up today. The US and Ukraine
sign a deal over access to the country's natural resources.
(00:24):
Donald Trump concedes his approach to global trade poses significant
political risks, as Microsoft and Meta shrug off economic turbulence
to deliver results that defy expectations plus unclear instructions, The
boss of Ikia's owner tells us they've no choice but
to wait and see as tariffs create uncertainty for businesses
(00:45):
and consumers. Let's start with a roundup of our top stories.
The United States and Ukraine have reached a deal over
access to Ukraine's natural resources. Under the agreement, America will
be given privileged access to new investment projects to deliver
things like aluminium, graph oil, and natural gas. The deal
is seen as an important step in securing President Trump's
(01:05):
goodwill toward Kiev, as his administration continues efforts to end
the war that began with Russia's full scale invasion more
than three years ago. His US Treasury Secretary Scott Bessant.
Speaker 2 (01:15):
Today's agreement signals clearly to Russian leadership that the Trump
administration is committed to a peace process centered on a free,
sovereign and prosperous Ukraine over the long term. It's time
for this cruel and senseless war to end.
Speaker 1 (01:34):
Scott Besont, speaking there is the signing eases tensions between
the two countries. Ukrainian President Vladimir Zelenski traveled to Washington
in February to sign a deal, but returned empty handed
after a tense on camera exchanged with President Trump and
Vice President j D. Vance in the Oval Office. Donald
Trump has acknowledged that his sweeping tariff program poses significant
(01:55):
political risks to his presidency, but the US president says
he won't rush into deals to appeace nervous investors. Speaking
during a town hall event, Trump said he remained determined
to push on and he believes he'll be able to
convince people how good this is. Trump was also asked
by News Nation host Bill O'Reilly if he agreed that
his tariff proposals had a perception problem.
Speaker 3 (02:17):
Yeah, but I'm an honest guy, and we have to
save the country. We were losing five billion dollars a
day with this man that we had as a president.
The autopen as president. Nobody even knows who the president was.
We're losing. Think of it. We're losing five billion dollars
a day, and a big chunk of it was from China.
(02:37):
Now China is sending its boats back. The boats are
not being unloaded because they have a one hundred and
forty five percent tariff, which is, you know, a record
setting type tariff.
Speaker 1 (02:47):
Trump spoke at that News Nation town hall event via
a video link after data shows that the US economy
contracted at the start of the year for the first
time since twenty twenty two.
Speaker 4 (02:58):
Inflation ofju justed.
Speaker 1 (02:59):
GDP increased at an annualized rate of zero point three percent,
dragged down by a surge in imports as firms appeared
to be front running US tariffs. Trump says he should
get a pass on the data, as his administration was
just getting used to things. The European Union will present
US officials with proposals next week aim at kickstarting trade negotiations.
Speaker 4 (03:20):
Bloomberg has learned. The ideas include.
Speaker 1 (03:22):
Lowering trade and non tariff barriers, as well as boosting
European investment in the US. Our sources say the EU
is also preparing for a worst case scenario if negotiations fail,
including lists of US goods to hit with counter tariffs
and possible export restrictions.
Speaker 4 (03:37):
Here's Bloomberg's kayy lines in Washington.
Speaker 5 (03:40):
What's important about this is we understand that this proposal
on trade includes both tariff and non tariff barriers, perhaps
in recognition of the kind of language we've heard from
administration officials around the issues with Europe specifically.
Speaker 1 (03:53):
That's Spoomberg' kay lines in Washington. It comes as ABRISS
think tank says Kirstarmer's government won't be able to avoid
uncomfortable trade offs on areas such as human rights when
negotiating trade partnerships in an increasingly unstable and uncertain world.
The IPPR, which is close links to the Labor Party,
says the UK will need to be pragmatic about trade
deals with countries that don't share all our values and
(04:16):
flexible in observing international law. Microsoft shares sewared in after
hours trading on the back of better than expected sales
and profit growth. Total revenue during the third quarter of
the financial euros by thirteen percent to just over seventy
billion dollars. Gains were bolstered by the firm's Azure Cloud unit,
which attributed sixteen percentage points of its growth to artificial
(04:40):
intelligence products. CEO sach Andadalla says the company's AI capabilities
are growing rapidly.
Speaker 6 (04:45):
Now I'll highlight examples, starting with infrastructure. We continue to
expand our data center capacity. This quarter alone, reopened dcs
in ten countries across four continents. Model capabilities are doubling
in performance every six months thanks to multiple compounding scaling laws.
Speaker 4 (05:06):
Microsoft's such An Adella.
Speaker 1 (05:07):
Speaking there, Microsoft shares rose by almost seven percent in
after hours trading yesterday. Staying with tech news, Meta also
reported estimate beating financial results defying tariff concerns. The Facebook
and Instagram parent announced forty two point three billion dollars
in first quarter sales, beating analyst expectations for forty one
(05:29):
point four billion dollars. Speaking after the news, Meta CEO
Mark Zuckerberg told investors the firm.
Speaker 4 (05:34):
Is ready to face market volatility.
Speaker 7 (05:36):
We've had a strong start to the year. Our community
keeps growing, with more than three point four billion people
now using at least one of our apps each day.
Our business is also performing very well, and I think
we're well positioned to navigate the macroeconomic uncertainty.
Speaker 1 (05:54):
Max Zuckerberg, speaking there, The company says it expects to
spend between sixty four and seventy two billion dollars this year,
attributing some of the increase to tariffs imposed by the
Trump administration. Meta also says it's responding to the trade
war by rethinking suppliers and optimizing its supply chain. And
Polls open today in some parts of England for local
(06:17):
and mayoral elections. Changes to councils means there are fewer
positions being voted on than in previous years, but the
vote is the first big set of polls since Labour's
landslide election victory last year. Those are your top stories
on the markets. We had US docs jumping into Wednesday's close,
extending a winning streak, the S and P five hundred
finishing up two tenths of one percent, seven sessions in
(06:38):
a row now of gains, and futures pointing higher again
one point one percent higher for smp E mini futures,
while Nasdaq futures are up by one and a half
percent of course, the earnings for Microsoft and Meta in
focus there as well. Treasuries also clinching a seven day
winning streak tenure yields of fawn over twenty basis points.
Speaker 4 (06:55):
They're up two today to four point one to.
Speaker 1 (06:57):
Eight percent on the tenuere The dollar also continuing to recover,
trading a quarter of one percent higher on the Bloomberg
Dollar Spot Index. The yen is six tenth week or
after the Bank of Japan held interest rates steady. We're
also watching gold prices down again today by one point
eight percent to three thousand, two hundred and twenty eight
dollars at troy ounce. In a moment, we'll bring you
(07:18):
more on the US Ukraine deal on natural resources, plus
what the boss of the group operating hundreds of Ikea
stores around the world told us about the impact of tariffs.
But on the question of Meta's earnings, I was been
reading Bloomberg Opinion Dave Lee's column about this this morning,
and in particular comments that drew a lot of attention
(07:39):
in Meta's statement about how their warning of a materially
worse user experience for European users because of rules introduced
under the EA's Digital Markets Acts now, Davelye says this
essentially means that the social media giant will now expect
to make significantly less money from users in Europe than
it otherwise would have. So what actually might be verterially
(07:59):
worse is actually for Meta itself unclear exactly how it
would make the user experience worse for users of Meta's platform.
Meta made about sixteen percent of its global revenue in
the EU last year. They're currently in this battle with
the EU over the EU demands under the legislation to
offer less personalized ads and better protect users personal data
(08:19):
as a result, and now Meta offered a version of this,
the EU hasn't approved that yet. It also didn't welcome
Meta's idea for a paying subscription that would give users
no ads. But as davely points out, these changes are
coming at a delicate time for advertising sales. Growth outside
the US is slowing. Although this report was very strong
from Meta, and the impact of tarfs, particularly in what
it means for Chinese advertisers advertising targeting American consumers, is
(08:42):
still unclear. Lots of detail in his piece. You can
read at Bloomberg dot com for its last opinion, and
we'll put a link to it in.
Speaker 4 (08:47):
Our podcast show notes as well.
Speaker 7 (08:51):
Well.
Speaker 1 (08:51):
Let's bring you more now on the deal between the
US and Ukraine over access to natural resources. Our EMEA
and NES director Rosalind Matheson joins US now for more
Roz good mourning.
Speaker 4 (08:59):
What exactly does this deal entail?
Speaker 8 (09:02):
Well, what it does is actually gives the US privileged
access to new investment projects, and that's to develop Ukraine's
natural resources, of which it has potentially quite a bit.
It is changed somewhat for the initial deal that was
talked about, and that's too after some objections from the
(09:23):
Ukrainians that the negotiations got quite contentious of course throughout.
And what it does now cover is actually reimbursing the
US for future military assistance to Ukraine rather than all
the military assistance that's.
Speaker 4 (09:38):
Been provided already.
Speaker 8 (09:40):
And it does keep the door open under the terms
of this deal for Kiev to push ahead with its
intent at least or its desire to join the EU.
But what it is is essentially a fund which is
financed by revenues from these new licenses will be everything
from critical minerals to oil and gas. The US gets
first claim on the profits that are transferred into that fund,
(10:03):
and it's jointly managed by both nations. So this gives
Ukraine and economic link to the US, strong economic ties.
It gives the US some investment opportunities in Ukraine. It's
not a hard security guarantee though for Ukraine.
Speaker 4 (10:19):
So overall, I mean, is this a good deal for Kiev?
Speaker 8 (10:23):
Well, it's better, arguably than the original terms of the deal,
which we're seen as very much favoring the US and
giving the US in essence control over a large part
of Ukraine's economy. So some of the terms have been
altered here in the final version, and the US would
argue that economic ties really are a version of security
(10:46):
ties because it binds the US into Ukraine's future and
its future success. But it's not a hard security guarantee,
and certainly it's not a military guarantee, and it's not
anything that says that the US would come to Ukraine's
aid militarily potentially in the future. So it does give
Ukraine something in its pocket, and it does also signal
(11:09):
to Donald Trump that the Ukraine is serious about trying
to reach a cease far.
Speaker 1 (11:15):
What does this mean for Donald Trump though? Is it
something that he can claim as a victory at a
time when he's under pressure over the impact of his
trade policies on the US economy.
Speaker 4 (11:25):
Well, that's right.
Speaker 8 (11:26):
He does need to declare at least a few victories,
and it gives him something. He can say, I've got
a tangible deal here in my pocket. He is looking
at an economy in the US where it's under some
pressure over He is quite volatile policy making when it
comes to trade, and you can see that showing up
in sentiment and other data in the US now. And
(11:47):
he does need some runs on the board. He says
he's got trade deals coming with individual countries, but he
doesn't have any of those so far. And of course
we know, you know, separately, fighting has resumed in Gaza.
Israel is back in there, its troops are back in
there fighting Hamas in Gaza. So there's been no quick
resolution to that conflict either. It does give me a win,
(12:09):
but there's still no broader CEASPA yet arranged when it
comes to Ukraine.
Speaker 4 (12:14):
Okay, Rosla mats and our Amaa andis director, thank you
very much.
Speaker 1 (12:18):
Well, let's turn fron of the story now. Donald Trump
saying he's not going to rush into deals to appease
investors uncertainty over his tariff. So US consumer confidence though
slumping to its lowest level in almost five years, and
it's been dented elsewhere to by fears over the impact
of the trade levees. The Swedish furniture chain ike operates
in more than sixty countries worldwide, including a significant presence
(12:38):
in the United States. The CEO of the Inca Group,
which operates most of IKEA's stores, has been speaking to
Bloomberg about how they're adapting to the tariff uncertainty.
Speaker 9 (12:47):
We liking any companies benefit from stable relations, predictable relations,
and of course where there it's free trade or low
TARO for arrangements, normally that leads to less inflation and
less uncertainty in general. Or we just have to wait
to see, so.
Speaker 4 (13:05):
I thinker group CEO Jessper Broden.
Speaker 1 (13:07):
They're speaking to Bloomberg Jennifer Creary, who joins us now
for more.
Speaker 4 (13:11):
Jennifer, good morning.
Speaker 1 (13:12):
How worried then, is Jessper Broden about the impact of
tariffs on the Ikea business?
Speaker 10 (13:18):
Yeah, So, as you heard, yesper was calling for stable
and predictable trade relations. So the implication being that it's
very difficult for Ikea and other companies to navigate Donald
Trump's volatile trade policies. Now, he's not saying much about
how much tariffs are actually going to impact IKEA's supply chain.
You know, he hasn't committed to any definitive measures yet.
But what's interesting about Aki is that it sources most
(13:41):
about seventy percent of its products from Europe, while the
rest of it is made in Asia. So of course
I'll be impacted by any levies on imports from China
to the US, US being its second largest market, so
some of those pressure points will be you know, they'll
have to these questions like a lot of companies are asking,
(14:02):
you know, can they make cost savings through negotiations with
suppliers or will they have to raise prices? And what's
interesting is, you know, Ikia, as a value reta, will
be in this tricky spot because they'll still need to
be affordable because you know, as we all know, buying
fellosure can get pretty expensive.
Speaker 1 (14:18):
Is Yes, we're Brodens seeing any signs of the weaker
consumer confidence issues that we've seen highlighted in data both
in the US but also elsewhere.
Speaker 10 (14:27):
Yeah, so I asked them this yesterday, and he said
consumer confidence has declined in the past few months. But
you caveat of that by saying, you know, this is
not something that is exclusive to IKE. It's affecting all companies.
But you know, if you look at it, it's last set
of results last year, so it's last year's full year results.
AKA already reported a decline of about almost thirty eight
(14:49):
percent in operating profit and that came after it announced
that it invested two point one billion euros in cutting
prices and that has come at the expense of some
of those financial guest and so it's already under pressure
starting the year on kind of a week of foot
and of course with tariff and other kind of you know,
inflation on the cost of war materials, that's just going
(15:11):
to pile additional challenges onto the retailer. But you know,
I asked him, are you going to hike prices? And
there's no indication yet. He was very tight lipped about that.
So let's wait in Zoon.
Speaker 1 (15:25):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 11 (15:31):
Look for us on your podcast feed every morning on
Apple Spotify, and anywhere else you get your podcasts.
Speaker 1 (15:37):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 11 (15:43):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
Speaker 4 (15:51):
I'm Caroline Hipka and I'm Stephen Carroll.
Speaker 1 (15:53):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg day
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