Apple in Talks To Use Google AI in iPhones, BOJ Hike Probable | The Pulse with Francine Lacqua 03/18

Summary

Apple is reportedly in talks to integrate Google's Gemini AI engine into iPhones, potentially reshaping the industry. Meanwhile, the Bank of Japan is anticipated to end its negative interest rate policy, a significant shift after 17 years. The discussion also touches on the impact of NVIDIA's AI conference on the stock market and the broader tech sector, as well as the geopolitical implications of Putin's election victory and the EU's response to the situation in Ukraine.

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Q & A

What major development is Apple reportedly in talks for regarding the iPhone?

Apple is reportedly in talks to integrate Google's Gemini AI engine into the iPhone, which could mark a significant industry shakeup.

What central bank is expected to make a key policy decision affecting global markets?

The Bank of Japan (BOJ) is expected to hike rates for the first time in 17 years, which is anticipated to have a significant impact on global markets.

What did Vladimir Putin indicate about Russia's future actions following the recent election?

Vladimir Putin warned that Russia will not be stopped from pursuing its goals, following a predictable victory in a tightly controlled midterm election.

What is the significance of the upcoming NVIDIA conference for the technology sector?

The NVIDIA conference is highly anticipated for potential new product announcements, and it is seen as a key event that could influence the outlook for tech stocks.

How might the BOJ's policy decision affect the Japanese Yen?

The BOJ's decision to end its negative interest rate policy and potentially raise rates could lead to a strengthening of the Japanese Yen against other currencies.

What is the current state of the luxury watch market?

The luxury watch market, as tracked by the index of the top 50 luxury watches by value, appears to be stabilizing after a two-year slump.

What impact is Boeing's safety incident having on the airline industry?

Boeing's safety incident has resulted in a reduced production rate for their 737 MAX planes, which is causing potential price increases for airline tickets, particularly during peak travel times.

What is the current status of the Bitcoin market?

Bitcoin prices are currently experiencing volatility, with the cryptocurrency seeing record inflows and high valuations, although there are concerns about whether valuations are too high and frothy.

How might the European Investment Bank (EIB) change its approach to defense financing?

There are proposals for the EIB to step up defense financing by focusing more on dual-use projects, which have both civilian and military applications, in order to boost European defense spending.

What are the expectations for the upcoming European Central Bank (ECB) policy decision?

While the ECB is not expected to make significant changes to its policy stance in the upcoming meeting, the language in the minutes and the voting patterns may shift, reflecting the bank's stance on inflation and economic growth.

Outlines

00:00

📺 'The Pulse' with Francine Lacqua - Tech and Market Updates

The segment begins with Francine Lacqua introducing the show 'The Pulse' and outlining the day's agenda. Key topics include Apple's rumored plans to integrate Google's Gemini AI engine into iPhones, the Bank of Japan's (BOJ) expected rate hike after 17 years, and decisions from the Federal Reserve and the Bank of England. Additionally, Vladimir Putin's warning about Russia's unwavering pursuit of its goals post-election is highlighted. The discussion also touches on the European stock market's reaction to these developments and the anticipation surrounding NVIDIA's AI conference.

05:02

🚀 NVIDIA's AI Conference and the Future of Semiconductors

The conversation shifts to NVIDIA's significant influence on the global stock market and the expectations from its annual AI conference. The discussion includes the potential announcement of new products and the impact on the semiconductor industry. The segment also covers the importance of AI in various sectors, including advertising and automotive, and the potential for AI to disrupt these industries further. The rivalry between NVIDIA and other tech giants like AMD and TSMC is also discussed, along with the implications for the broader market and investment strategies.

12:02

🌏 Central Bank Decisions Impacting the Global Economy

The focus turns to the central banks, particularly the Federal Reserve and the Bank of Japan, and their anticipated decisions that could affect half of the world's economy. The BOJ's expected end to its negative interest rate policy and the potential implications for the yen and global markets are discussed. The conversation also touches on the European Central Bank's policy decisions and the impact of economic data on the US dollar's performance against other currencies.

17:05

🛫 Boating Industry Challenges and AI's Role in Tech Advancements

The discussion delves into the challenges faced by the boating industry due to COVID and Airbus' booking backlog, leading to potential price increases for air travel. The impact of Boeing's safety incident on aircraft production and its ripple effect on airlines is examined. Additionally, the conversation explores the increase in cocoa futures and the influence of weather and supply issues on commodity prices. The segment concludes with a look at the growing interest in AI and its potential impact on various sectors, including the luxury watch market.

Keywords

💡Apple

Apple Inc. is a technology company that specializes in consumer electronics, computer software, and online services. In the context of the video, Apple is in talks to integrate Google's Gemini AI engine into the iPhone, indicating a potential significant development in the smartphone industry and Apple's product offerings.

💡Google's Gemini AI

Google's Gemini AI refers to an artificial intelligence engine developed by Google, likely to provide advanced computational capabilities and machine learning functionalities. In the video, it is suggested that this AI engine might be integrated into Apple's iPhone, which would enhance the device's capabilities and user experience.

💡Federal Reserve

The Federal Reserve, often referred to as the Fed, is the central banking system of the United States, responsible for implementing monetary policy and regulating the country's financial institutions. In the video, the Fed's policy meeting is mentioned, which is significant as it can influence global financial markets and economic conditions.

💡Bank of Japan

The Bank of Japan (BOJ) is the country's central bank, tasked with issuing and regulating the Japanese yen and maintaining price stability. The video discusses the BOJ's expected rate hike for the first time in 17 years, which would be a major shift in its monetary policy and could have wide-ranging effects on the global economy.

💡Vladimir Putin

Vladimir Putin is the President of Russia, a position he has held for several non-consecutive terms. In the context of the video, Putin's warning that Russia will not be stopped from pursuing its goals is significant as it reflects the country's political stance and international relations, particularly in the context of tightly controlled midterm elections.

💡NVIDIA

NVIDIA is a technology company known for its graphics processing units (GPUs) and artificial intelligence technologies. In the video, NVIDIA is hosting its annual AI conference, which is significant because it could lead to new product announcements and advancements in AI that might impact the global technology market.

💡AI

Artificial Intelligence (AI) refers to the development of computer systems that can perform tasks typically requiring human intelligence, such as visual perception, speech recognition, decision-making, and language translation. The video emphasizes the growing importance of AI in various sectors, including technology and finance, as companies like Apple and NVIDIA are expected to make significant AI-related announcements.

💡Stock Market

The stock market is a marketplace where shares of publicly traded companies are bought and sold. It serves as an indicator of economic health and is influenced by various factors, including corporate performance, economic indicators, and global events. In the video, the stock market is discussed in relation to the potential impact of AI advancements and central bank decisions.

💡Cryptocurrency

Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates on decentralized networks, such as blockchain technology. In the video, Bitcoin is mentioned as an example of a cryptocurrency, which has been experiencing price fluctuations and is seen as an indicator of market sentiment towards riskier assets.

💡Central Banks

Central banks are financial institutions responsible for managing a country's or region's monetary policy, issuing currency, and regulating commercial banks. In the video, central banks like the Federal Reserve and the Bank of Japan are discussed in relation to their policy decisions, which can significantly affect global economic conditions and financial markets.

💡Luxury Watches

Luxury watches are high-end timepieces often associated with prestigious brands, craftsmanship, and exclusivity. In the video, the luxury watch market is mentioned in the context of its potential stabilization after a two-year slump, suggesting shifts in consumer behavior and market trends.

Highlights

Apple is in talks to build Google's Gemini AI engine into the iPhone, signaling a potential industry shakeup.

The Bank of Japan (BOJ) is expected to hike rates for the first time in 17 years, indicating a significant policy shift.

Vladimir Putin warns that Russia will not be stopped from pursuing its goals after a predictable victory in a tightly controlled election.

The Federal Reserve's policy meeting is approaching, with market participants awaiting clues on the direction of U.S. monetary policy.

NVIDIA's annual AI conference is starting, with high expectations for new product announcements and insights into the future of AI technology.

The U.S. stock market is seeing record inflows, with more than $56 billion attracted to U.S. stock funds in a single week, largely due to the AI story.

The semiconductor industry is expected to continue its growth, with NVIDIA's next-generation H100 chip anticipated to drive the stock further.

The AI industry is still in its early stages, with many sectors yet to be fully disrupted by artificial intelligence, indicating potential for future growth and innovation.

Bitcoin and gold prices are rising, reflecting market behaviors and investor sentiments differently from traditional assets.

The European Investment Bank is being urged to step up defense spending, highlighting the changing priorities and focus on security within Europe.

The Bank of England's policy decisions are closely watched, with expectations of a gradual move away from the dollar and potential rate cuts in the future.

Russia's economic strategy is shifting towards a wartime economy, with Putin expected to continue his assertive stance in international relations.

The impact of the COVID era on the aviation industry is still being felt, with Boeing's production issues and Airbus' booking backlog affecting airlines and travel prices.

Luxury watch demand may be stabilizing after a two-year slump, potentially indicating a shift in consumer sentiment towards riskier assets.

The cocoa market is experiencing price increases due to bad weather and sick trees, affecting global supply chains and consumer prices.

AI and cryptocurrency sectors are seeing increased interest and investment, reflecting a broader trend towards digital assets and technologies.

The global economy is being supported by fundamental factors beyond central bank policies, with tech stocks and AI advancements playing a significant role.

The market is anticipating a busy week with central bank decisions and major tech conferences, potentially leading to significant movements in global stock markets.

Transcripts

>> NEWSMAKERS AND MARKET MOVERS. THIS IS "THE PULSE"

WITH FRANCINE LACQUA. FRANCINE: GOOD MORNING, EVERYONE.

I'M FRANCINE LACQUA HERE IN LONDON WITH CONVERSATIONS THAT

MATTER. HERE'S WHAT'S COMING UP ON

TODAY'S PROGRAM. BLOOMBERG HAS LEARNED THAT

APPLE IS IN TOP TO BUILD GOOGLE'S JIM -- GEMINI AI

ENGINE INTO THE APPLE IPHONE IN OF A SHAKEUP FOR THE INDUSTRY.

THE BOJ EXPECTED TO HIKE RATES FOR THE FIRST TIME IN 17 YEARS.

WE WILL ALSO GET DECISIONS FROM THE FED, THE BANK OF ENGLAND,

AND THE S&P. PLUS, VLADIMIR PUTIN WARNS THAT

RUSSIA WILL NOT BE STOPPED FROM PURSUING ITS GOALS AFTER A

PREDICTABLE VICTORY IN A TIGHTLY CONTROLLED MIDTERM

ELECTION. I LIKE TO TALK ABOUT TODAY.

WE ARE GOING INTO A VERY BUSY WEEK.

STOCKS HERE IN EUROPE I GUESS RISING A TOUCH.

INVESTORS AWAITING POLICY DECISIONS FROM THE U.S.

AND JAPAN THIS WEEK FOR SOME NEAR-TERM TRADING CUES.

I WANT TO LOOK AT S&P FUTURES. THEY ARE ACTUALLY ON THE WAY UP.

A LOT OF FOCUS WILL BE ON NASDAQ FUTURES BECAUSE OF WHAT

WE ARE HEARING. APPLE IN TALKS TO ADOPT

GOOGLE'S AI ENGINE, BUT ALSO THE FACT IS A BIG CONFERENCE

STARTING THIS AFTERNOON WITH NVIDIA.

KEY HIGHLIGHT LATER ON WITH THE CO-FOUNDER.

YOU CAN SEE THE S&P FUTURES GAINING.

A LITTLE BIT MORE OF A MUTED APPROACH, BUT CONSUMER PRODUCTS

ACTUALLY LEADING THE ADVANCED. THE OTHER THING WE ARE LOOKING

AT, THE FEDERAL RESERVE'S POLICY MEETING.

LET'S ALSO LOOK AT TREASURIES. THAT MAY INDICATE THE DIRECTION

OF GLOBAL STOCKS. PRIOR TO THE BLACKOUT PERIOD,

WE DID HEAR FROM JERRY JAY POWELL INDICATING THE CENTRAL

BANK IS CLOSE TO HAVING THE CONFIDENCE TO CUT WHILE OTHERS

DEBATED HOW DEEP, HOW SHALLOW THOSE CLIENTS WOULD BE.

THE BIG ONE, OF COURSE, THIS YEAR, NOT ONLY THE 10-YEAR

TREASURY IS NEARING A THREE-WE CAN'T, BUT THE BIG WINNERS,

WHAT WE ARE EXPECTING FROM THE BOJ, SO YOU LOOK AT THIS.

THIS IS A HUGE ONE AND WE COULD HAVE A REVERSAL AS SOON

TOMORROW. BITCOIN, 67,800. IT IS SHAPING UP TO BE A BIG

WEEK FOR TECH STOCKS WITH NEWS OF POTENTIAL DEAL BETWEEN APPLE

AND GOOGLE THAT COULD SEE THE NEXT GENERATION OF IPHONES

POWERED BY GOOGLE'S GEMINI AI ENGINE.

NVIDIA IS HOSTING ITS ANNUAL AI CONFERENCE THIS WEEK WITH

EXPECTATIONS HIGH FOR A NEW PRODUCT ANNOUNCEMENT.

THERE'S SO MUCH, OF COURSE, HOPE THAT EVERYTHING GETS

POWERED WITH AI. IT FEELS LIKE NVIDIA IS

SUPPORTING THE WHOLE GLOBAL STOCKS MARKET.

>> IT REALLY IS. WE SAW THE DATA LAST WEEK FROM

THE TEAM AT BANK OF AMERICA SHOWING RECORD INFLOWS. U.S.

STOCK FUNDS ATTRACTING RECORD INFLOWS OF MORE THAN $56

BILLION IN ONE SINGLE WEEK. A LOT OF THAT OBVIOUSLY GOING

INTO THE AI STORY, WHICH SOME BY GOLDMAN SAY IT WILL NOT JUST

BENEFIT A HANDFUL OF STOCKS BUT THE WHOLE MARKET GENERALLY.

THERE IS A LOT RIDING TODAY ON NVIDIA, ON WHAT THE CEO SAYS

WITH HIS KEYNOTE SPEECH EXPECTED IN THE AFTERNOON, HE

NORMALLY TENDS TO ANNOUNCE NEW TECHNOLOGIES, NEW PRODUCTS, AND

WHAT THAT WILL MEAN FOR THE OUTLOOK GOING FORWARD.

THE CONFERENCE IS ACTUALLY SO IMPORTANT FOR NVIDIA'S STOCK.

I THINK IT WAS THE TEAM AT BANK OF AMERICA, AND I MIGHT BE

WRONG, BUT CALLED IT THE AI WOODSTOCK. FRANCINE: I LOVE IT.

>> IT REALLY IS A FESTIVAL OF SORTS FOR THE AI INDUSTRY, BUT

AGAIN, TO ILLUSTRATE HOW IMPORTANT THIS IS NOT JUST FOR

NVIDIA BUT THE WHOLE STOCK MARKET.

THE STOCK ROSE DESPITE IT BEING A VERY VOLATILE WEEK.

IT ROSE FOR A 10TH WEEK LAST WEEK, WHICH IS A RECORD

STRAIGHT FOR NVIDIA. FRANCINE: I HAVE BEEN GETTING LITTLE

SNIPPETS OF WHAT WE CAN EXPECT. ARE WE THINKING ABOUT NEW

PRODUCTS, OR WILL THEY JUST EXPLAIN HOW THEY WILL EXPAND IN

THE FUTURE?

>> I THINK IT IS A MIX OF ALL OF THOSE THINGS.

I THINK PEOPLE WILL BE LOOKING AT THE CUES FROM THE CEO'S AT

THE KEYNOTE ABOUT IF THIS MARKET WILL GET EVEN MORE

BIGGER AND IF BEYOND CURRENT DEMAND, THAT WILL BE DRIVEN.

I THINK WE SEE A LITTLE NOISE

FROM RIVALS, MD -- AMD, MICROSOFT, GOOGLE DEVELOPING

THEIR OWN CHIPS. WHAT CAN THEY DO TO STAY AHEAD

OF THE PACK? THE BE 100 IS THE NEXT

GENERATION TO THE H 100, WHICH HAS BEEN REALLY DRIVING THE

STOCK. FRANCINE: IT'S BASICALLY MICROCHIPS THAT

CAN DO MORE ADVANCED THINGS?

>> IT'S JUST A MORE POWERFUL CHIP ESSENTIALLY, USING

SMALLER, DENSER CIRCUITRY, SO GIVING THEM MORE POWER FOR

LOWER ENERGY CONSUMPTION. THAT IS DUE TO COME OUT THIS

YEAR, SO I THINK IT WOULD BE GOOD TO SEE WHEN THAT IS

AVAILABLE AND IF CURRENT CUSTOMERS ARE GOING TO WAIT FOR

THAT TO ARRIVE, AND THEN THERE'S THE QUESTION ABOUT

THEIR RELEVANT CYCLE, SO THEY HAVE CURRENTLY BEEN ON A

TWO-YEAR DEVELOPMENT CYCLE AND THEY ARE TALKING ABOUT MOVING

TO A ONE-YEAR DEVELOPMENT CYCLE, SO THAT WILL ESSENTIALLY

SPEED UP THE RATE AT WHICH THEY BRING NEW PRODUCTS TO THE

MARKET, POTENTIALLY ALLOWING IT TO KEEP A COMPETITIVE EDGE OVER

THESE RIVALS. FRANCINE: I WAS GOING TO ASK ABOUT THE

RIVALS. WHAT DOES IT MEAN FOR THE REST

OF THE INDUSTRY? WE HAD THIS HUGE APPLE'S GROUP.

IS THAT A HUGE DEAL?

>> IT LOOKS LIKE IT COULD BE A HUGE DEAL, YET.

YOU SUDDENLY HAVE 2 BILLION OR SO APPLE I.S.

-- APPLE IOS USERS ON THE GEMINI AI ENGINE.

THAT KIND OF GIVES GOOGLE A REAL BIG EDGE IN TERMS OF THE

SCALE AND MONEY THAT'S COMING IN TO CONTINUE TO DEVELOP WITH

THAT AND ALL THE INFORMATION AND FEEDBACK YOU GET FROM

PEOPLE USING YOUR PLATFORM. I THINK DEFINITELY FOR GOOGLE,

IT WOULD BE A BIG, BIG SCOOP TO GET APPLE INTO THE ECOSYSTEM.

>> WHEN YOU LOOK AT WHAT IS SUPPORTING THIS ECONOMY, I KNOW

THERE'S A LOT OF TALK ABOUT TREASURY.

WE HAVE SCALED OVER IN TERMS OF FED CUTS, BUT WHAT ARE ACTUALLY

FUNDAMENTALLY SUPPORTING THIS ECONOMY?

IT SEEMS, FOR EXAMPLE, BITCOIN, BUT ALSO GOLD IS RISING.

THE MARKET IS BEHAVING A LITTLE BIT DIFFERENTLY.

>> YEAH, IT IS. WILL EARNINGS KIND OF SUPPORT

THIS? BECAUSE WE HAVE SEEN KIND OF AN

EVERYTHING RALLY. WE DID SEE SOME CRACKS, THOUGH,

AT THE END OF LAST WEEK. BITCOIN FALLING FROM ITS HIGHS.

ALSO NVIDIA FALLING.

1% MOVE IN NVIDIA IS A VERY BIG MOVE IN TERMS OF MARKET CAP,

AND THAT REALLY SWAYS THINGS, BUT IT IS STILL HOLDING UP

STRONG, AND VALUATIONS ARE STILL HIGH.

IT SEEMS THAT EVERY SINGLE WEEK WHEN I COME INTO THE OFFICE,

THERE'S SOMEONE ON WALL STREET SAYING THAT VALUATIONS ARE TOO

HIGH AND ARE GETTING FROTHY, AND SOMEONE ELSE SAYING THERE'S

ALL THESE REASONS WHY THEY WILL BE SUBSTANTIATED, AND EARNINGS

REALLY HAVE TO COME INTO PLAY TO SUPPORT VALUATIONS RIGHT

NOW, ESPECIALLY IN TERMS OF TECH.

WHERE WE SEE YIELDS THIS WEEK WILL BE INCREDIBLY IMPORTANT.

MARKETS A LITTLE BIT FRUSTRATED WITH JAY POWELL'S SILENCE ON

THAT. IT WILL BE REALLY INTERESTING

TO SEE WHERE THE MACRO PICTURE GOES FROM HERE AND WHAT

INVESTORS WILL FOCUS ON IN THE MARKET. FRANCINE:

IS THERE STILL AN INDUSTRY THAT HAS YET TO BE DISRUPTED BY AI

OR THE DISRUPTION HAS YET TO BE PRICED IN?

>> YEAH, I THINK THERE'S STILL

A LOT OF INDUSTRIES. WE ARE STILL AT THE EARLY STAGE.

EVEN SOME OF THE MORE ADVANCED INDUSTRIES LIKE ADVERTISING,

FOR EXAMPLE.

EVERY INDUSTRY IS USING GENAI IN SOME WAY, SHAPE, OR FORM,

BUT THEY ARE STILL LEARNING IT. NVIDIA TALKED ABOUT THERE IS

NOT REALLY ANY AI IN THE AUTOMOTIVE INDUSTRY RIGHT NOW.

WE BARELY HAVE AUTONOMOUS DRIVING.

THERE ARE SO MANY INDUSTRIES WHERE WE ARE AT THE VERY EARLY

STAGES OF HOW PEOPLE ARE THINKING ABOUT HOW GENAI COULD

BENEFIT OR DISRUPT THOSE INDUSTRIES. FRANCINE:

IS THERE ANOTHER RIVAL THAT COULD BENEFIT FROM NVIDIA OR

DOES IT LIKE THE LAST TIME THE WHOLE INDUSTRY UP WITH IT?

>> IS CLEARLY PEOPLE AT TSMC WHO ARE POTENTIALLY PARTNERS IN

NVIDIA IN DEVELOPING THESE TECHNOLOGIES, COULD DEFINITELY

BENEFIT IF THEY COME OUT AND GIVE AN OPTIMISTIC OUTLOOK

ABOUT PRODUCT DEVELOPMENT CYCLES.

IT PUTS THE PRESSURE EVEN MORE ON THE LIKES OF AMD TO CONTINUE

WITH THEIR OWN INVESTMENT, TO MAKE SURE THEY AT LEAST DO NOT

MAKE THAT GAP VIGOR AND HOPEFULLY AIM TO CLOSE IT WITH

NVIDIA.

-- TO MAKE SURE THEY AT LEAST DO NOT MAKE THAT GAP BIGGER AND

HOPEFULLY AIM TO CLOSE IT WITH NVIDIA. FRANCINE:

COMING UP, THE PEN'S NEGATIVE INTEREST RATE POLICY EXPECTED

TO POSSIBLY END TOMORROW. MORE ON THAT NEXT.

♪

FRANCINE: IT'S A BIG WEEK FOR CENTRAL

BANKS. THE FED AND BANK OF JAPAN AMONG

THOSE SET TO MAKE GREAT CALLS THAT WILL AFFECT HALF OF THE

WORLD'S ECONOMY. WE ARE JOINED BY THE HEAD OF

RESEARCH FOR GLOBAL MARKETS AND INTERNATIONAL SECURITIES AT

MUFG. WELCOME TO THE PROGRAM.

IS TOMORROW THE DAY?

>> YES, I THINK TOMORROW IS THE DAY.

I DON'T THINK I CAN RECALL SO MUCH TELEGRAPHED NEWS BREAKING

HEADLINES FROM NUMEROUS DIFFERENT SOURCES AND NOT ONE

DENIAL FROM THE BOJ. I THINK WE ARE ABSOLUTELY SET

UP. THE MARKET IS PRICED. FRANCINE:

THE MARKET IS READY, THERE'S NO SURPRISE.

THERE ARE A COUPLE OF THINGS THEY COULD DO WITH THE BALANCE

SHEET.

>> THERE IS. THERE'S ALSO DYNAMIC THAT NEED

TO BE ADDRESSED. THE INTEREST RATE STRUCTURE AND

JGB PURCHASE IN RELATION TO THE YIELD PURCHASE AND THERE'S

OTHER ASSETS LIKE REITS, COMMERCIAL PAPER, CORPORATE

BONDS -- ALL THAT HAS TO BE ADDRESSED, AND GUIDANCE WILL BE

HUGELY IMPORTANT AS WELL, BUT I THINK -- MY SENSE IS MAYBE THE

MARKETS ARE THINKING IT'S ONE AND DONE, AND I THINK THAT THE

BOJ WILL ANNOUNCE AND I THINK CERTAINLY SHOULD ANNOUNCE IT IN

A KIND OF CELEBRATORY FASHION. THERE HAS BEEN MILD INFLATION

IN JAPAN FOR NEARLY 30 YEARS. THE Q/Q E FRAMEWORK THAT WAS

PUT IN PLACE BY GOVERNOR KURODA IS GOING TO START BEING

DISMANTLED TOMORROW, AND THERE SHOULD BE A POSITIVE MESSAGE

GIVEN TO THE MARKETS THAT MILD DEFLATION IN JAPAN IS OVER AND

EQUITY MARKETS SEEM TO BE CERTAINLY TAKING THAT ON BOARD.

FRANCINE: WHAT IS THE MOST DIFFICULT PART

OF THE OPERATION TOMORROW? THE MESSAGE AND ARE TALKING

ABOUT?

DOES THAT NEED TO BE ONE OF I GUESS HOPE AND FINALLY

ACHIEVING SOMETHING OR DOES IT NEED TO BE MORE CAUTIOUS?

>> THAT IS THE DIFFICULT ASPECT. THERE'S THE CELEBRATORY ASPECT

WHICH I THINK THEY SHOULD CERTAINLY DO IN TERMS OF

EMPHASIZING THAT DEFLATION HAS ENDED, BUT AT THE SAME TIME,

THEY HAVE TO BE CAUTIOUS IN TERMS OF STEPPING AWAY FROM THE

FRAMEWORK THAT HAS BEEN IN PLACE.

THERE WAS A HUGELY IMPORTANT SPEECH BY THE DEPUTY GOVERNOR

ON FEBRUARY 8. IT IS ON THE BOJ'S WEBSITE.

I URGE VIEWERS TO HAVE A READ IF YOU WANT TO SEE WHAT COULD

HAPPEN TOMORROW. BROKE DOWN THE TYPE OF MEASURES

THAT COULD BE TAKEN, AND IN RELATION TO JGB'S, WHAT HE SAID

WAS IN MOVING AWAY FROM A QUANTITATIVE POLICY FOCUS TO

ONE ALLOWING INTEREST RATES TO BE DETERMINED BY THE MARKET,

YOU HAVE TO DO THAT IN A CAUTIOUS MANNER, AND THEY ARE

GOING TO ANNOUNCE FURTHER JGB PURCHASES.

WE THINK PROBABLY THE PACE REMAINING WITH THE FLEXIBILITY

OF DOING MORE IF THERE'S ANY DISRUPTIVE PRICE ACTIONS, SO

THERE WILL BE THAT FLEXIBILITY TO ENSURE THERE IS NOT ANY KIND

OF DISRUPTIVE BIG JUMP IN YIELDS. FRANCINE:

IS THAT POSITIVE FOR YEN OR IS A LOT OF THE GOOD NEWS PRICED

IN?

>> IF YOU HAD ASKED ME TWO OH -- OR THREE WEEKS AGO, I WOULD

HAVE SAID IT WAS POSITIVE FOR SURE.

IF IT IS WHAT I THINK IN TERMS OF TOMORROW, THE YOUNG CAN

STRENGTHEN A LITTLE BIT, BUT I THINK THERE WILL BE A LOT OF

CAUTION. IF THE FED DROPPED ONE OF THEIR

DOTS, YIELDS COULD JUMP FURTHER. THE BIG LESSON FROM LAST WEEK

IS WITH DOLLAR-AND JUMPING UP

TO 1.40 9 -- UP TO 149, IT'S REALLY IMPORTANT.

>> WE ALSO HAD NOT BEEN NEWS FROM CHINA. I DON'T KNOW IF THAT

COMPLICATES WHAT WE ARE EXPECTING IN TERMS OF STRONGER

STIMULUS.

>> IT DOES. THAT'S THE IDEA THAT MARKETS

ARE HAVING RIGHT NOW.

IT DOES SEEM THAT THE MARKET IS AT EASE WITH WHATEVER NEWS HE

GETS OUT OF CHINA, EITHER THAT ECONOMIC GROWTH IS NOT STRONG

ENOUGH AND IT'S DISAPPOINTING ESTIMATES OR WE WILL NOT GET

ENOUGH STIMULUS, BUT REALLY STRONG FACTORY OUTPUT

INVESTMENT GROWTH TO START THE YEAR.

CHINA RETAIL ONLY KIND OF MATCHED ESTIMATES, A LITTLE BIT

OF A SLOWDOWN AFTER THE LUNAR NEW YEAR, KIND OF SPENDING BOOM

HOLIDAY PERIOD, BUT THE WEAK POINT IS STILL VERY MUCH

PROPERTY INVESTMENT. THAT IS STILL IN CONTRACTION.

THAT'S THE WORRY POINT FOR INVESTORS, BUT THE FACT THAT

THE ECONOMY IS DOING A BIT BETTER THAN EXPECTED PERHAPS

MAKES THAT AROUND 5% GDP GROWTH GOAL FOR THIS YEAR MORE

ACHIEVABLE. THE IDEA IS THAT POLICYMAKERS

DON'T HAVE TO DO MORE STIMULUS AT THE ECONOMY THROUGHOUT THE

YEAR. I THINK THIS IS POSITIVE NEWS.

THIS IS WHAT CHINA HAS BEEN TRYING TO DO FOR A NUMBER OF

YEARS NOW, AND MANAGING THE RECOVERY FROM COVID HAS BEEN

TRICKIER THAN EXPECTED. THE CONSUMPTION STORY AND THE

PROPERTY STORY IS STILL A SOURCE OF CONCERN AND FOR

MARKETS, THIS DOES SUGGEST THAT MAYBE AT LEAST THE CENTRAL BANK

ON THE MONETARY STIMULUS FRONT WILL BE A LITTLE MORE RETICENT

TO ADD TO SUPPLIES FOR THE YEAR. FRANCINE:

YOU HAVE JUST COME BACK FROM CHINA.

ARE YOU CONFIDENT IT IS NOT AS BAD AS PEOPLE SAY?

>> CERTAINLY THE PEOPLE I SPOKE TO IN SHANGHAI WERE DEFINITELY

MORE OPTIMISTIC THAN WHAT I SENSED FROM THE END IN LONDON.

SHANGHAI WAS CERTAINLY VERY BUSY.

I CERTAINLY FELT THE OPTIMISM WAS HIGHER THAN WHAT I

ANTICIPATED. WE DO HAVE A REASONABLY

OPTIMISTIC VIEW THAT ALTHOUGH THE HOUSING SECTOR AND THAT

ASPECT IS NOT GOING TO GO AWAY AS A NEGATIVE FEATURE, EVEN A

MODERATE PICKUP IN CONSUMER CONFIDENCE COULD CERTAINLY HAVE

AN IMPACT IN HELPING GROWTH PICKUP FROM HERE. FRANCINE:

THANK YOU SO MUCH FOR JOINING US TODAY.

COMING UP, MORE CENTRAL BANKS. A PREVIEW OF THE EUROPEAN

CENTRAL BANK'S POLICY DECISION HAPPENING THIS WEEK.

THAT'S NEXT AND THIS IS BLOOMBERG. ♪

FRANCINE: IT'S NOT JUST THE BOJ SET TO

MAKE A KEY DECISION THIS WEEK. WE WILL ALSO HEAR FROM THE BOE.

STILL WITH US, THE HEAD OF RESEARCH FOR GLOBAL MARKETS AND

INTERNATIONAL SECURITIES AT MUFG.

THERE'S A LOT OF QUESTIONS ABOUT DOLLAR AND IF THERE IS

SLOWLY, GRADUALLY A MOVE AWAY FROM THE DOLLAR FOR OTHER

CENTRAL BANKS.

>> OUR VIEWERS THEY WILL CUT FOR THE FIRST TIME IN JUNE.

IF THEY START IN JUNE, I SEE NO LOGICAL REASON FOR THEM TO

SUDDENLY STOP. I THINK WE COULD GET 125 BASIS

POINT CUTS. I THINK THE CONSUMPTION SIDE OF

THE ECONOMY IS SLOWING. SOME OF THE LEADING INDICATORS,

THE SURVEY DATA. I THINK THERE IS ENOUGH TIME

FOR ENOUGH DATA TO ROLL IN TO JUSTIFY THE BEGINNING OF RATE

CUTS IN JUNE. WE THINK THERE IS REASONS TO BE

BEARISH ON THE U.S. DOLLAR. FRANCINE:

WHEN YOU LOOK AT FOREIGN, WHAT'S THE MOST INTERESTING

PAIRING RIGHT NOW AGAINST THE DOLLAR?

>> GIVEN WHAT WE ARE SPEAKING ABOUT, POSSIBLY DOLLAR-AGAIN.

YOU NEED THAT SCENARIO I JUST SPOKE ABOUT, AND THEN I THINK

YOU CAN GET A PRETTY BIG MOVE,

POTENTIALLY DOWN TO THE 30'S. DOLLAR-YEN IS A PRETTY

INTERESTING ONE. FRANCINE: I WAS GOING TO ASK ABOUT

STERLING. I DON'T KNOW IF THIS IS

POLITICS. THE BOE IS IN A BIT OF A CHICK

-- TRICKY SPOT. WHAT ARE WE EXPECTING IN THE

WEEK AHEAD? QUICK SNOW MOVE IS GENERALLY

EXPECTED FOR THE PERIOD.

THE CHANGE WILL BE IN THE LANGUAGE, IN THE MINUTES, AND

THERE COULD BE A SHIFT IN THE VOTES.

WE HAD TWO VOTING FOR RATE HIKES , THE OTHER SIX HOLDING

LAST TIME. ONE OF THE TWO VOTING FOR RATE

HIKES COULD MOVE INTO THE HOLD

BACK -- BEHOLD PACK -- THE OLD PACK.

GENERAL CONSENSUS IS THERE WILL STILL BE A THREE-WAY SPLIT.

THE EMPLOYMENT DATA HAS BEEN A LEADING INDICATOR.

WEDNESDAY'S INFLATION DATA IS GOING TO BE QUITE CRITICAL, BUT

YOU WOULD NOT EXPECT. BAILEY HAS CALLED THE MARCH

MEETING LIVE, BUT I DON'T THINK IT REALLY IS.

>> IT'S A LIVE VOTE WITHOUT A PRESS CONFERENCE, WHICH IS

REALLY FRUSTRATING FOR TRADERS AND JOURNALISTS.

THERE'S JUST SO MUCH -- I DON'T KNOW IF IT SEEMS SAFE COMPARED

TO OTHER COUNTRIES OR IF A LOT COULD CHANGE.

>> WE HAVE HAD 18 MONTHS OF PRETTY MUCH DREADFUL ECONOMIC

DATA. WE HAVE HAD THE LARGEST ENERGY

PRICE SHOCK IN EUROPE WHICH HAS NOW REVERSED.

I THINK THERE IS SCOPE THIS YEAR FOR SOME MODERATE PICKUP

IN DOMESTIC DEMAND FUELED BY THE CONSUMER.

THE U.K.'S JUSTIFICATION WAS FAR MORE COMPELLING THAN I

THINK IT WAS FOR THE FED OR ECB OR ELSEWHERE.

I THINK IN THAT CONTEXT, IF WE DO GET THAT EVEN MODERATE

IMPROVEMENT IN GROWTH WITH THE BANK OF ENGLAND BE

UNJUSTIFIABLY MORE CAUTIOUS BECAUSE OF WAGES, AUGUST I

THINK IS THE EARLIEST, AND AT -- IN THAT SENSE, THERE IS

SCOPE FOR THE POUND TO STRENGTHEN. FRANCINE:

THEY ALSO CAN CUT TOO CLOSE TO THE ELECTION.

IS THAT SOMETHING THEY SHOULD BE THINKING ABOUT?

>> CAN THEY NOT? I THINK IF THERE COMPELLING

ENOUGH REASONS AND THE INFLATION DATA BACKS OF THE

TIMING OF THE RATE CUTS -- IF THE ELECTION IS NOVEMBER, IT

ARGUES OF THIS -- IT ARGUES AUGUST COULD CERTAINLY BE THE

TIME FOR A START. FRANCINE: COMING UP, VLADIMIR PUTIN

SECURES ANOTHER SIX YEARS AS RUSSIAN PRESIDENT.

WE DISCUSSED WHAT IT MEANS FOR THE WAR IN UKRAINE AND WESTERN

SECURITY. THAT'S COMING UP SHORTLY AND

THIS IS BLOOMBERG.

♪

FRANCINE: SO, BLOOMBERG HAS LEARNED THAT

APPLE IS IN TALKS TO PURCHASE THE GEMINI ENGINE INTO THE

IPHONE IN A DEAL THEY CAN CHECK OF THE INTEREST -- INDUSTRY.

THE BOJ IS EXPECTED TO HIKE RATES FOR THE FIRST TIME IN 17

YEARS AND WE WILL ALSO GET DECISIONS FROM THE FED.

VLADIMIR PUTIN WARNS THAT RUSSIA WILL NOT BE STOPPED FROM

PURSUING ITS GOALS AFTER A PREDICTABLE VICTORY IN THE

TIGHTLY CONTROLLED PRESIDENTIAL ELECTION.

WELCOME TO "THE PULSE." EU LEADERS ARE MEETING TO

DISCUSS THE SITUATION IN THE MIDDLE EAST. THIS IS AFTER

GERMANY AND FRANCE CALLED FOR THE EUROPEAN INVESTMENT BANK TO

STEP UP DEFENSE SPENDING. I THINK THE MEETING IS ABOUT TO

START. WHAT ARE WE EXPECTING FROM IT.

-- IT?

>> WE JUST HAVE THE MINISTERS WALKING IN, TAKING QUESTIONS

FROM JOURNALISTS, AND FOR MANY IT WAS WHAT DOES THE RUSSIAN

ELECTION MEAN FOR THE WAR IN THE UKRAINE?

FOR MANY THEY SAID IT WAS BE -- IT WOULD MEAN THAT THINGS WOULD

BE SHORED UP AND THERE WERE QUESTIONS ON HOW TO SUPPORT

UKRAINE WITH BIG MACRO MOVEMENTS TO BOOST EUROPEAN

DEFENSE SPENDING AND THE REAL RUSSIAN FOR THE UKRAINIANS IS

HOW TO GET THAT AMMUNITION ON THE BATTLEFIELD AND WE KNOW

THAT THERE IS A CHECK PLANNED AND I ASKED THE LATVIAN FOREIGN

MINISTER HOW CLOSE WE ARE TO GETTING THE DELIVERY OF SHELLS

AND THEY SAID IT COULD HAPPEN IN THE NEXT COUPLE OF WEEKS BUT

THAT THE HANGUP IS IN BRUSSELS ON PAYING THE MONEY AND GETTING

THE ORDERS OUT IN THAT IS WHAT THEY WILL DISCUSS IN THE

MEETING.

AS WELL AS A NUMBER OF OTHER ISSUES, INCLUDING ISRAEL AND

GAZA. FRANCINE: OTHER COUNTRIES HAVE ALSO

BASICALLY ASKED OF THE EIB TO STEP UP AND FOCUS MORE ON

DEFENSE FINANCING. TAKE US THROUGH THEIR PROPOSAL.

>> THERE'S THE SITUATION ON THE GROUND AND THE I.B.

HAS -- THE EUROPEAN INVESTMENT

BANK HAS LAUNCHED DUAL USE PROJECTS, MEANING PROJECTS AND

TECHNOLOGIES THAT ARE BOTH CIVILIAN AND MILITARY AND

APPLICATION. WHEN WE TALK ABOUT BOOSTING

SPENDING, TANKS, FIGHTER JETS, DON'T HAVE APPLICATIONS, WHICH

IS WHAT FRANCE, GERMANY, WANT TO CHANGE ON THE RULES WITHIN

THE EIB TO GET MORE OF THAT CAPITAL FLOWING IN THE DEFENSE

SECTOR AND ENCOURAGE THEM WITH CONFIDENCE TO BE ABLE TO INVEST

IN THOSE SECTORS. WE SAW IT TODAY IN THE

RESEARCH, THE SHORTFALL OF NATO. SAYING THAT IN ORDER FOR ALL

NATO COUNTRIES TO HIT THAT REQUIREMENT IT WOULD REQUIRE AN

ADDITIONAL 56 BILLION EUROS IN SPENDING, CREATING THE STARK

ISSUE THAT WE HAVE HERE AHEAD OF THEIR EU MEETING LATER THIS

WEEK. FRANCINE:

OLIVER, THANK YOU SO MUCH. VLADIMIR PUTIN SAYS RUSSIA BUT

NOT BE STOPPED FROM PURSUING ITS GOALS AFTER HE SWEPT TO A

RECORD VICTORY IN A TIGHTLY CONTROLLED ELECTION.

FOR MORE ON THIS, LET'S GET STRAIGHT TO ROSA.

WHAT ARE YOU EXPECTING FROM VLADIMIR PUTIN IN THE NEXT

WEEKS AND MONTHS, GIVEN HIS DECISIVE VICTORY, YESTERDAY?

ROSA: WELL, WE EXPECT CONTINUATION OF

WHAT HE HAS BEEN DOING SO FAR.

PUTIN 2024, IT'S A CRITICAL YEAR.

HE SEES THE WEST AS DIVIDED AND NOT ABLE TO DELIVER ON ITS

PROMISES TOWARDS UKRAINE. THEREFORE, A GREAT OPPORTUNITY

FOR HIM TO DOUBLE DOWN IN UKRAINE.

ON THE DIVISION IN THE WEST AND SOUTH. FRANCINE:

ROSA, HOW WOULD YOU CHARACTERIZE THE EU RIGHT NOW?

I KNOW THAT THERE IS A LOT OF DIVISION, IT'S VERY DIFFICULT

TO GET MONEY FROM THE U.S. INTO UKRAINE, CERTAIN COUNTRIES

IN EUROPE THINK THAT WE ARE GIVING TOO MUCH TO UKRAINE.

BUT ACTUALLY IT SEEMS TO BE HOLDING UP OK. OLIVER:

EUROPE IS HOLDING UP ON UKRAINE. IT'S ACTUALLY QUITE REMARKABLE,

COMPARED TO, TOO, TO TWO YEARS AGO.

NO ONE WOULD HAVE EXPECTED THIS LEVEL OF UNITY.

OF COURSE, THE EUROPEAN UNION WAS CONSTRUCTED AS AN ACTOR

WORKING IN PEACE, NOT FOR DEFENSE OR WAR.

SO, IT DOES REQUIRE CONSIDERABLE TRANSFORMATION,

CONSIDERABLE INVESTMENT ON DEFENSE IN ORDER TO STEP UP THE

ACTION. ADD ON TO THAT THE FACT THAT

THE U.S. LEADERSHIP IS DWINDLING AT THE

MOMENT.

IT ACTUALLY IS QUITE A REQUEST ON EUROPEAN LEADERS TO STEP UP

AND FILL THE GAP.

BUT YOU ARE RIGHT, IT IS HOLDING UP QUITE WELL AND I

EXPECT IT WILL CONTINUE TO DO SO IN 2024 AND 2025 BUT THERE

WILL BE A LOT OF ATTENTION FOCUSING ON THE DIVISIONS, THE

DIFFICULTIES IN GETTING THE COMMITMENTS, THE DIFFICULTIES

IN GETTING THE INVESTMENTS IN TERMS OF FINANCES.

BUT IT WILL HOLD UP.

FRANCINE: TURN OUT FOR THE ELECTION, FOR

THE THREE DAYS OF VOTING, ACCORDING TO THE CENTRAL

ELECTION COMMISSION, IT WAS HIGHER THAN BACK IN 2019.

DO YOU BELIEVE THOSE NUMBERS, WHAT DO THEY INDICATE?

ROSA: PEOPLE IN RUSSIA ARE SCARED.

PEOPLE HAVE BEEN -- THEY, THE KREMLIN HAS PASSED A NUMBER OF

LAWS AND PROCEDURES, RULES, IN ORDER TO GET PEOPLE TO GO AND

VOTE. FOR INSTANCE ANYONE WORKING IN

THE PUBLIC SECTOR WAS CAJOLED INTO VOTING.

WE SHOULD REALLY TAKE THESE FIGURES WITH SALT.

FOR PUTIN NOT TO RECEIVE THAT KIND OF ENDORSEMENT WOULD HAVE

BEEN A MASSIVE BLOW. SO, HE HAS INVESTED HEAVILY IN

MAKING SURE HE WOULD GET GOOD TURNOUT AND, OBVIOUSLY, IT

COULD RESULT. FRANCINE:

I MEAN, THERE ARE OF COURSE A NUMBER OF NEWS OUTLETS,

BLOOMBERG SOURCES, SAYING VLADIMIR PUTIN IS GETTING READY

FOR A VERY LONG CONFRONTATION WITH THE WEST. DOES THAT

CONFRONTATION MINIMIZE IF DONALD TRUMP GETS IN THE WHITE

HOUSE QUESTION MARK HOW ARE YOU EXPECTING A TRUMP PRESIDENCY TO

REACT TO THE EMBOLDENED VLADIMIR PUTIN?

ROSA: IT'S CLEAR THAT VLADIMIR PUTIN

IS INVESTED IN TRUMP WINNING THE ELECTION IN THE UNITED

STATES. THIS IS THE SORT OF OUTCOME

THAT PUTIN WOULD WELCOME. IT'S ALSO CLEAR THAT PUTIN IS

IN THIS FOR THE LONG GAME. HOWEVER, I THINK WE SHOULDN'T

EXPECT THE LONG GAME TO BE AS FAVORABLE TO PUTIN AS IS

COMMONLY ASSUMED.

THE REGIME, NOBODY LIKES THE REGIME IN RUSSIA.

PEOPLE ARE SCARED. THEY HAVE TO VOTE FOR PUTIN,

BUT IT DOESN'T NECESSARILY MEAN THAT THE RUSSIAN FUTURE IS RUN,

SHAPED EXCLUSIVELY BY PUTIN . I THINK IT IS IMPORTANT FOR THE

WEST TO INVEST IN SUPPORTING RUSSIAN OPPOSITION ABROAD.

TO SUPPORTING CIVIL SOCIETY IN RUSSIA.

MAKING THE LONG-TERM INVESTMENT FOR WHAT MIGHT BE COMING IN THE

FUTURE, A MORE PLURALIST RUSSIA. SHOULD TRUMP BE ELECTED IN THE

UNITED STATES, THAT CHANGES THE GLOBAL PICTURE GENERALLY.

WE WOULD HAVE AN UNPREDICTABLE

LEADER OF THE UNITED STATES, ONE WHO IS POSITIVELY INCLINED

TOWARDS MAKING ALLIANCES OR DEALS WITH AUTHORITARIAN

LEADERS AROUND THE WORLD. FRANCINE:

HOW FAR DO YOU THINK PUTIN CAN GO?

EVERY COUPLE OF WEEKS THERE ARE THREATS ABOUT NUCLEAR ARMAMENT,

WE UNDERSTAND THAT THEY ARE PUTTING A SQUEEZE ON COUNTRIES

LIKE MOLDOVA, THE BALTIC STATES, ALL IN THE NAME OF

PROTECTING RUSSIAN MINORITIES. ARE WE GOING TO SEE A VERY

BELLIGERENT VLADIMIR PUTIN IN THE NEXT 12 MONTHS?

ROSA: THE FIRST THING WE HAVE SEEN IS

THAT RUSSIA HAS TURNED ITS ECONOMY TOWARDS A WARTIME

ECONOMY AND IS DOING WELL. SECONDLY, COUNTRIES SUCH AS

MOLDOVA OR ESTONIA, WHICH HAS A SIZABLE RUSSIAN MY NOTE --

MINORITY, ARE ON HIGH ALERT, BECAUSE PUTIN COULD USE EXCUSES

TO INVADE. THIRDLY, WE SHOULD NOT

UNDERESTIMATE THE OTHER WAYS IN

WHICH THE KREMLIN MANAGES TO SOW DIVISIONS IN THE GLOBAL

SOUTH THROUGH MILITARY SUPPORT, SUPPORTING COUPS OR

AUTHORITARIAN COUNTRIES IN AFRICA.

WE HAVE SEEN A STRING OF CO UPS IN 2023 AND IN DEMOCRACIES BY

INVESTING IN DISINFORMATION AHEAD OF ELECTIONS AND

GENERALLY UNDERMINING DEMOCRATIC INSTITUTIONS AND

STRUCTURES THROUGH CYBERATTACKS, HYBRID ATTACKS.

YOU KNOW, THE KREMLIN HAS ACTUALLY DEVELOPED QUITE A FEW

WAYS IN WHICH THEY CAN INTERFERE IN OTHER COUNTRIES

BEYOND MILITARY INTERVENTION. FRANCINE:

ROSA, THANK YOU SO MUCH FOR JOINING US.

ROSA IS THE DIRECTOR OF CARNEGIE EUROPE, COMING TO US

ONE DAY AFTER THE RUSSIAN ELECTIONS.

COMING UP, GOOGLE AND A SEARCH FOR AI SOLUTIONS.

THAT'S COMING UP SHORTLY. THIS IS BLOOMBERG. ♪

>> FRANCINE: YOU ARE LOOKING LIVE AT THE PRINCIPAL ROOM.

COMING UP, AN INTERVIEW WITH THE CHIEF EXECUTIVE AT BARCLAYS

AT 7:15 A.M. THIS IS BLOOMBERG. ♪

WELL, BLOOMBERG HAS LEARNED APPLE AND GOOGLE ARE IN TALKS

TO SEE THE NEXT GENERATION OF IPHONES POWERED BY THE GOOGLE

GEMINI AI ENGINE. HOPES ARE HIGH THAT NVIDIA WILL

BE UNVEILING NEW PRODUCTS. ALEX IS NOW WITH US.

THIS IS WILDLY EXCITING, THERE IS SO MUCH HOPE PINNED ON THE

FUTURE OF AI, WHAT YOU THINK OF APPLE LOOKING EXTERNALLY FOR

THOSE SOLUTIONS?

>> ON THE ONE HAND, YOU HAVE WHAT IT SAYS ABOUT THEIR

EFFORTS IN HOUSE. CLEARLY THEY ARE PROGRESSING

WELL, AS WELL AS THE COMPANY COULD EXPECT.

THE OTHER PIECE IS OF COURSE WHAT THEY COULD OFFER THEIR

CUSTOMERS AND IF THEY ARE GOING TO KEEP THE IPHONE AS THE

DOMINANT SMARTPHONE GLOBALLY, THEY PROBABLY NEED TO HAVE

SOMETHING IN THE GENERATIVE AI SPACE, AND THIS SOLVES A

PROBLEM FOR APPLE, WHERE IT IS GOOD TO SEE WHERE THE SHARES

ARE IN THE PREMARKET LEVEL. BALANCING THESE THINGS IS

WHAT'S GOING ON. THE THINK IT WILL BE REALLY

INTERESTING IS THE EXTENT TO WHICH APPLE DECIDES TO PIVOT.

IF THEY END UP TAKING GEMINI, TALKING WITH OPENAI, DO THEY

AFTER A FEW YEARS DEVELOP THEIR OWN PRODUCT TO REPLACE IT?

OR WILL THEY GO ALL IN ON THIS? HOW EXCITED -- FRANCINE:

HOW EXCITED ARE YOU FOR THE NVIDIA CONFERENCE? ALEX:

OVEREXCITED. [LAUGHTER] IT'S AMAZING HOW A YEAR AGO, OR

I WILL TELL YOU, TWO YEARS AGO WE BARELY BLINKED AT THIS

CONFERENCE AND NOW IT IS BECOMING PRETTY SIGNIFICANT.

SOME PEOPLE, SOME INVESTORS, OPTIMISTICALLY PUTTING IT IN

THE SAME BRACKET AS THOSE APPLE CONFERENCES. FRANCINE:

THEY ARE SINGLE-HANDEDLY SUPPORTING THE EQUITY MARKET IN

THE U.S. ALEX: IN A SENSE, BUT THAT'S THE RISK.

IF THE CONFERENCE DISAPPOINTS OR THE PRODUCT WROTE BACK --

ROADMAP DOESN'T LOOK EXCITING, YOU GET A LOSS IN PROFIT TAKING.

YOU THINK ABOUT PRO LAST YEAR WHERE IN THE COURSE OF THAT

PRESENTATION THEY UNVEILED THE DEVICE AND WIPED $80 MILLION

OFF THE MARKET CAP OF APPLE.

OFTEN YOU HEAR THE ADAGE BEING BUY THE RUMOR, SELL THE NEWS.

THE STOCK HAS BEEN TRADING PRETTY HIGHLY.

WE HAVE SEEN THEM SURPRISING ON THE UPSIDE TIME AND AGAIN.

IF THERE IS POSITIVE NEWS IN TERMS OF WHAT THEY ARE

PRESENTING, YOU CAN EXPECT A SIMILAR REACTION. FRANCINE:

THANK YOU SO MUCH, ALEX. A BIG WEEK FOR CENTRAL BANKS,

DECISIONS AFFECTING HALF THE WORLD ECONOMY.

THE BOJ IS WIDELY EXPECTED TO END ITS NEGATIVE RATE POLICY

TOMORROW. SO, THE DECK IS CLEAR FOR THE

BOJ TO RAISE RATES THIS WEEK. HOW WILL IT PLAY OUT ON THE

MARKETS?

>> GOOD TO SEE YOU. IT'S BEEN LINED UP FOR THE BOJ

TO ACT.

IT'S THE BIGGEST DAY INCREASE FOR JAPANESE EMPLOYEES IN A

NATION. THE BANKS ARE CLEAR FOR THE

BANK OF JAPAN TO RAISE RATES. IT WILL BE A TRIGGER -- TRICKY

MEASURE OF NORMALIZATION.

IF WE GET TO A TERMINAL RATE OF 50 BASIS POINTS, THAT WILL BE

PRETTY NORMALIZED FOR JAPAN.

ANY CULTIVATION ON THE END HAS STOCKS TAKING INTO ACCOUNT THAT

RATE.

THEY ARE NOT LIKELY TO BE GETTING EXCITED REGARDLESS OF

WHAT THE BOJ DOES TOMORROW. THE BIGGER PART OF THE EQUATION

FOR THE DOLLAR-YEN CONTINUES TO BE ON THE FED SIDE OF THE

EQUATION, MEANING ANY BIG REACTIONS IN THE END WILL HAVE

TO WAIT UNTIL AFTER WE KNOW WHAT THE FED DOES WITH THE DOT

PLOT ON WEDNESDAY. THE DOLLAR-YEN SHOULD

STRENGTHEN MORE BUT A DOVISH PIVOT, I THINK THE YEN WILL

FIND A BITTER AFTER THAT.

-- BIDDER AFTER THAT. FRANCINE: THERE ARE A NUMBER OF THINGS

THAT THE BOJ COULD DO ON THE BALANCE SHEET AND I DON'T KNOW

HOW MANY OF THOSE EXPERT THINGS ARE PRICED IN. VAN:

NOT MUCH IS PRICED IN. IF THE BOJ STARTS THINKING OR

SOUNDING HAWKISH AFTER RAISING RATES TOMORROW AND THEN THEY

SAY THAT LOOK, WE CAN GRADUALLY RAISE RATES BY MEASURED STEPS

FROM HERE, DOING AWAY WITH CONTROL AND ETF PURCHASES,

THOSE WILL BE TAKEN AS HAWKISH SIGNS AND THAT IS NOT PRICED IN

AT ALL . A QUICK FIRST STOP FOR THE YEN

WILL BE 1.4 FOUR PER DOLLAR AND BEYOND THEIR IT COMES TO HOW

MUCH MORE THE BOJ CAN GO FURTHER INTO THE YEAR IN TERMS

OF RATE HIKES. FRANCINE:

IT'S WIDELY POSSIBLE FED CHAIRS, IF DONALD TRUMP BECAME

PRESIDENT AGAIN. WHAT DO YOU THINK WILL SUPPORT

DOLLAR BUT TREASURIES AS WELL GOING FORWARD? VAN:

WELL, I THINK KNOW, THE DOLLAR WILL BE SOME OF THE FED BEING

HAWKISH. WHAT WE ARE HEARING ABOUT THE

POSSIBLE FED SPECULATION ON THE STATE, WE DON'T KNOW WHO THE

PRESIDENT IS GOING TO BE OR WHO THE FED CHAIR IS GOING TO BE.

AT THIS POINT THERE ISN'T MUCH FOR THE MARKETS PRICING THE

NEXT FED CHAIR, BUT THERE IS A LOT THAT THE FED WILL LOOK

FORWARD TO IN TERMS OF THE DOT PLOT AND THE SUMMARY OF

ECONOMIC PROJECTION THAT WE WILL GET FROM THE FED.

DRIVING THE NARRATIVE FOR THE NEXT THREE MONTHS. FRANCINE:

HAVE YOU SEEN A SHIFT FOR TRADERS LAUNCHING ONTO THE

HIGHER FOR LONGER NARRATIVE MORE THAN THEY DID A WEEK AGO?

VAN: ABSOLUTELY. WE GOT A PRETTY BIG SELLOFF

LAST WEEK. 25 BASIS POINTS, THAT SURGE WE

HAVEN'T SEEN A LONG TIME. ON THE TWO-YEAR, I THINK THE

MARKETS HAVE KIND OF PRICED IT HIGHER FOR LONGER IN THE FED

TRAJECTORY. EVEN IF THE FED SAYS -- TAKES

BACK ONE OF THE RATE CUTS THEY HAVE PENCILED IN, THEY ONLY

INDICATED TWO FOR 2024. IF THEY GO FOR THAT KIND OF

NARRATIVE TOMORROW, WEDNESDAY, I THINK THAT TREASURE LEE'S --

TREASURIES WON'T SELL OFF A LOT BECAUSE OF THE HUMONGOUS

SELLOFF LAST WEEK. A DOVISH DOT PLOT WILL HAVE A

BIGGER ASYMMETRY OF REACTION. FRANCINE:

VAN, AS ALWAYS, THANK YOU FOR JOINING US.

I URGE EVERYONE TO GO INTO READ SOME OF HIS GREAT WRITING.

IT'S ON SOCIAL MEDIA AND ON THE BLOOMBERG TERMINAL.

COMING UP, A DISASTROUS START TO THE YEAR SPILLING OVER TO

AIRLINES. PASSENGERS DISCUSS WHAT IT

MEANS AHEAD OF THE KEY TRAVEL SEASON WITH CHARLIE WELLS.

THIS IS BLOOMBERG. ♪

FRANCINE: WELL, INCREASING APPETITE FOR

RISKIER ASSETS COULD BE DESTABILIZING THE DEMAND FOR

LUXURY WATCHES. OUR INDEX FOLLOWS THE MOST 50

LUXURY WATCHES BY VALUE WAS FLAT, SUGGESTING THE TRUE --

TWO-YEAR SLUMP COULD BE NEAR AN END. CHARLIE WELLS IS ALL OVER

LUXURY WATCHES. THE SECONDHAND LUXURY WATCH

MARKET APPEARS TO BE STABILIZING. CHARLIE:

CAN I TELL YOU MY THEORY? RISK ON SENTIMENT BRINGS WRIST

ON SENTIMENT. [LAUGHTER] THESE PEOPLE ARE ALSO

DAYTRADING, BITCOIN PEOPLE SEEING GREAT RETURNS OVER TIME,

WILLING TO PONY UP FOR THE MORE EXPENSIVE WATCHES.

ROLEX AND TECH PHILIPPE ARE GOING TO BE LAUNCHING NEW

MODELS NEXT MONTH AND THERE COULD BE A WAIT AND SEE ELEMENT

STABILIZING THE MARKET CHARLIE: I DIDN'T -- MARKET. FRANCINE:

I DIDN'T EVEN KNOW WE HAD THIS INDEX.

THE OTHER THING WE ARE WATCHING OUT FOR IS BOEING. CHARLIE:

THIS IS BIG. THEIR SAFETY INCIDENT FROM

JANUARY MEANS THAT REGULATORS WILL ONLY LET THEM PRODUCE 38

OF THOSE 730 SEVEN PLANES. WE HAVE BEEN REPORTING ON HOW

THAT HAS BEEN SPILLING OVER TO AIRLINES WITH NEW REPORTING ON

HOW THIS COULD BE IMPACTING THE CONSUMER WITH PRICE INCREASES.

AMEX GLOBAL BUSINESS TRAVEL HAS SAID THAT ON THE ROUTE FROM NEW

YORK TO LOS ANGELES, SO IMPORTANT, BUSINESS CLASS FARES

COULD BE UP AT PEAK TRAVEL. LOOKING AT THE ROUTE FROM SAN

FRANCISCO TO SEATTLE, THAT COULD BE UP 18%. FRANCINE:

THIS IS NOT JUST BOEING? CHARLIE:

IT'S ALSO COVID AND AIRBUS. ONE ESTIMATE SAID THAT THE

COVID ERA DELAYS DENIED AIRLINES 4000 PLANES, SO THEY

WERE CUT -- KIND OF TRYING TO DEAL WITH SETBACKS.

AIRBUS IS BOOKED FOR 10 MORE YEARS, LITERALLY AIRLINES

TRYING TO GET ENOUGH PLANES, DEALING WITH A SAFETY ISSUE AT

BOEING. AIRBUS HAS HAD SOME ENGINE

ISSUES ON SOME OF THEIR PLANES, GROUNDING HUNDREDS OF THEM AS

WELL. FRANCINE: THERE IS ALSO THE HEADLINES

CROSSING THE TERMINAL SAYING THAT COCO FUTURES HAVE DOUBLED.

-- COCOA FUTURES HAVE DOUBLED. CHARLIE:

I LOVE CHOCOLATE AND WE HAVE SEEN IN THESE MARKETS THE BAD

WEATHER, THE SICK TREES. THAT SEEMS TO BE WEIGHING ON

THE SUPPLY ISSUE WITH A LOT OF THESE COMMODITIES, NOT REALLY

SUBSIDING DEMAND BUT IT COULD BRING IN HIGHER PRICES.

FRANCINE: ANYTHING ELSE YOU ARE WATCHING

OUT FOR? THERE ARE A LOT OF COMPANIES IN

THE U.S. THAT HAVE TO DO WITH AI CHARLIE:

THEY ARE BIG, WE HAVE GREAT NEWS FROM APPLE AND GEMINI

DRIVING SENTIMENT. LOOK, WE HAVEN'T SEEN SO MUCH

RISK ON SENTIMENT SPILLING OUT INTO CRYPTO.

A LOT MORE INTEREST, THERE. LET'S SEE WHAT THE WEEK AHEAD,

BRINGS. -- WHAT THE WEEK AT BRINGS.

FRANCINE: CHARLIE WELLS, THANK YOU.

COMING UP, A CHIEF EXECUTIVE FROM BARCLAYS JOINS US AT 11:15

AM U.K. TIME, 7:15 NEW YORK. "SURVEILLANCE" IS AHEAD.

THIS IS BLOOMBERG. ♪