Israeli Airstrike Kills Dozens in Rafah, South Africa Election Countdown | Daybreak: Europe 05/27/24

Summary

Bloomberg Daybreak Europe discusses the G7 finance chiefs' concerns over China's trade practices and the potential threat to the global economy from China's industrial overcapacity. French Finance Minister Bruno Le Maire emphasizes the G7's commitment to long-standing political and financial support for Ukraine. The show also covers the T+1 rule's implementation in the U.S., reducing trade settlement time, and its possible impact on market efficiency and sales. Additionally, discussions on South Africa's elections, the ANC party's challenges, and the potential for coalitions are featured.

Takeaways

• 📈 Asian stocks started the week with gains, with the MSCI Asia-Pacific Index up 0.5% and Chinese indices also seeing positive movement.
• 🌍 G7 finance chiefs criticized China's trade practices and expressed concern over the impact of China's economic model on global markets.
• 🇯🇵 The Bank of Japan's cautious approach to cementing inflation expectations at 2% boosted the Nikkei and dollar-yen exchange rates.
• 📉 Despite better Wall Street performances, key equity futures opened slightly in the red, with moderate losses on boards after a positive Friday.
• 💰 The US Treasury is preparing to launch a series of 56-day bill auctions for the first time since the early 2000s, aiming to inject liquidity into treasuries.
• 🏦 The European Central Bank's forward guidance on rate cuts is being questioned, with some members suggesting a wait-and-see approach beyond June.
• 🇪🇺 French Finance Minister Bruno Le Maire confirmed G7 commitment to long-standing funding support for Ukraine amidst global economic threats.
• 🗳️ South Africa's ruling ANC party risks losing its parliamentary majority for the first time since the end of apartheid in the upcoming elections.
• 💡 The transition to T+1 settlement rules in the U.S. equity market aims to increase efficiency and may attract more global investors to the U.S. market.
• 🛫 Qatar Airways flight experienced severe turbulence over Turkey, resulting in 12 people injured, highlighting recent aviation incidents.

Q & A

What is the main topic of discussion for the week on 'Bloomberg Daybreak Europe'?

The main topic of discussion for the week on 'Bloomberg Daybreak Europe' is the data that will dominate, including the Fed's preferred inflation indicator.

What is the current situation in the Gaza strip as mentioned in the script?

Israel is pressing ahead with operations in the southern Gaza city of Rafah, despite a U.N. court ruling.

What concerns did G7 finance chiefs express regarding China's trade practices?

G7 finance chiefs blasted China's trade practices and threatened tougher protections for their economies due to China producing more and more cheaper industrial devices which could be a threat to the global economy.

What is the French Finance Minister's view on the economic model of China?

The French Finance Minister, Bruno Le Maire, believes that China's economic model of producing cheaper industrial devices could be a threat not only for the EU and the U.S., but for the global world economy.

What is the current status of the equity futures market as mentioned in the script?

The equity futures market is opening slightly in the red with moderate losses after a better Wall Street Friday.

What commentary has been driving sentiment in the Asian market?

Commentary from the Bank of Japan Governor, suggesting cautiousness is needed to cement inflation expectations at 2%, has been driving sentiment in the Asian market.

What is the current situation regarding the G7's stance on China's trade practices?

The G7 has accused China of hurting the economies of trade partners and has featured heavily in their communiqué, with a unified voice on the question of China.

What discussions took place at the G7 summit regarding Ukraine?

The G7 discussed the future earnings of Russian assets and the possibility of disbursing them to Ukraine, but the technical elements of this plan are still being worked out.

What is the current stance of the UK Chancellor of the Exchequer on rising protectionism?

UK Chancellor of the Exchequer, Jeremy Hunt, is a defender of the open market and cautioned even his allies against protectionism, emphasizing the importance of not unintentionally creeping back into protectionism.

What is the impact of the T+1 rule that begins in the U.S. on market efficiency?

The T+1 rule, which shortens the settlement period for U.S. trades to one day instead of two, aims to increase market efficiency and attract more global investors by speeding up settlements.

What are the concerns regarding the implementation of the T+1 rule?

There are concerns that the T+1 rule could increase the number of failed trades and necessitate additional accommodations by banks, such as adjusting staff schedules and potentially increasing automation.

Outlines

00:00

📈 Global Market Overview and China's Economic Impact

The script opens with a summary of global economic events, highlighting Asian stock gains and the focus on data such as the Fed's preferred inflation indicator. It discusses Israel's operations in Gaza despite a U.N. court ruling, and the G7 finance chiefs' criticism of China's trade practices, which they see as a threat to the global economy. The French Finance Minister's interview emphasizes the issue with China producing cheaper industrial devices and the potential threat to the global economy. Key equity futures and market trends are also mentioned, with a note on the Bank of Japan's cautious approach to cementing inflation expectations.

05:01

🌍 G7 Summit Discussion and Middle East Conflict Update

This paragraph delves into the discussions from the G7 summit, particularly the focus on China's economic practices and the overcapacity issue raised by the U.S. and the EU. It also addresses the technical difficulties in dealing with frozen Russian assets and the challenges faced in reaching a consensus on their use to support Ukraine. The conversation shifts to the Middle East, detailing the escalation of violence between Israel and Hamas, including the Israeli airstrike on a displaced persons' camp and the ICJ ruling that Israel has yet to comply with.

10:02

🕊️ Potential for Peace Talks and Impact on South African Elections

The script discusses the precarious situation of peace talks between Israel and Hamas, with the attack on a crowded area in Rafah complicating the negotiations. It mentions the differing views on ceasefires between Israel, which seeks hostage release, and Hamas, which aims for a long-lasting cessation of hostilities. The conversation then moves to South Africa's upcoming elections and the challenges faced by the ANC party, which may lose its parliamentary majority for the first time since the end of apartheid. The impact of former President Jacob Zuma and the potential for coalitions are also discussed.

15:06

🏛️ South Africa's Political Future and Economic Challenges

The script continues the discussion on South Africa's elections, with insights from Melanie Verwoerd, a former ANC political analyst. It explores the potential outcomes of the elections, the stability of coalitions, and the role of President Cyril Ramaphosa. There's an analysis of the ANC's support base and the impact of smaller parties, as well as the concerns about the stability of coalitions at a national level. The conversation also touches on the possibility of Ramaphosa's continued presidency and the peaceful transition of power.

20:08

🛫 Qatar Airways Incident and Geopolitical Updates

This paragraph reports on a severe turbulence incident involving a Qatar Airways flight over Turkey, which resulted in injuries. It also covers the arrival of a U.S. bipartisan delegation and Nvidia's Jensen Huang in Taiwan amid China's military drills around the island. The U.S. has accused China of military provocations, and the script mentions an upcoming discussion on the European Central Bank's monetary policy stance.

25:11

📉 Market Analysis and Economic Indicators

The script provides an overview of market trends, with Asian stocks gaining and U.S. and U.K. markets closed for holidays. It discusses Israel's operations in Gaza and the G7's stance on China's trade practices. The focus then shifts to economic indicators, including the Fed's preferred inflation gauge and the potential for a rate cut in the Eurozone. The script also includes an interview with the French Finance Minister, Bruno Le Maire, on China's industrial overcapacity and its implications for the global economy.

30:13

🏦 ECB's Monetary Policy and German-French Relations

The script covers a statement from an ECB Executive Board member on the potential for a rate hike and the data-dependent nature of future monetary policy decisions. It also discusses the meetings between French President Emmanuel Macron and German officials, focusing on the creation of a European Capital Markets Union and the strengthening of Franco-German ties. The importance of personal chemistry between leaders and the potential impact on reforms and cooperation across Europe are highlighted.

35:15

💼 UK's National Service Proposal and Labour Party's Review of Stake Reduction

The script discusses British Prime Minister Rishi Sunak's proposal of a national service program, which has been met with mixed reactions, particularly among younger voters. It also mentions the Labour Party's pledge to review plans for the UK government to reduce its stake in certain industries. The conversation suggests that the national service proposal is an attempt to appeal to older voters who may have drifted away from the Conservative Party.

40:19

🤖 AI Developments and Market Efficiency with T+1 Rule

This paragraph covers the funding round of $6 billion for Elon Musk's AI company, with a focus on his vision for AI and the need for regulation. It also discusses the implementation of the T+1 rule in the U.S., which aims to increase market efficiency by reducing the settlement time for trades from two days to one. The potential impact on market participants, failed trades, and the need for automation and adaptation by banks are also explored.

45:24

🏦 U.S. Bank Holiday and ECB Rate Cut Speculations

The script notes that it is a U.S. bank holiday and that starting from the next day, trades will begin to settle under the new T+1 rule. It also discusses the evolution of ECB rate cut expectations, with the market anticipating a first cut around June and subsequent cuts being more uncertain. The script highlights the importance of taking a meeting-by-meeting approach to rate decisions and not necessarily cutting at every subsequent meeting.

Keywords

💡Bloomberg Daybreak Europe

Bloomberg Daybreak Europe is a financial news program that provides comprehensive coverage of the morning's market-opening news, data, and analysis. It serves as a key source of information for investors and business professionals. In the context of the video, it sets the stage for the day's financial discussions and news, including market updates and interviews with key figures in finance and economics.

💡Inflation Indicator

An inflation indicator is an economic measure that signals changes in the overall price level of goods and services in an economy. It is crucial for central banks and investors as it influences monetary policy decisions and investment strategies. In the video, the Federal Reserve's preferred inflation indicator is mentioned as a significant data point that will shape market expectations and central bank policies.

💡G7 Finance Chiefs

The G7 Finance Chiefs refer to the top financial officials from the seven largest advanced economies in the world, which include the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom. Their meetings and discussions often set the tone for international economic policies and cooperation. In the script, they are discussed in relation to their stance on China's trade practices and their implications for global economies.

💡Trade Practices

Trade practices refer to the methods, rules, and strategies that countries use to engage in international trade. These practices can include tariffs, subsidies, and other measures that affect the flow of goods and services across borders. The script mentions that G7 finance chiefs have criticized China's trade practices, indicating concerns over fair competition and economic imbalances.

💡Industrial Devices

Industrial devices are machinery, tools, or equipment used in the manufacturing and production processes. They are a critical component of industrial production and can significantly impact the efficiency and competitiveness of a country's manufacturing sector. The script discusses concerns over China producing cheaper industrial devices, which could pose a threat to the global economy by potentially undercutting other manufacturers.

💡Equity Futures

Equity futures are financial derivatives that track the value of a stock index or a single stock. They allow investors to speculate on the future direction of stock prices and are used for hedging and investment purposes. In the video, equity futures are mentioned as a measure of market sentiment and as an indicator of how stock markets may perform at the opening.

💡Bank of Japan Governor

The Governor of the Bank of Japan is the head of Japan's central bank and plays a pivotal role in setting monetary policy and managing the country's financial stability. In the script, the Governor's commentary on cautiousness in cementing inflation expectations is highlighted, which influences market reactions and investor sentiment.

💡Nikkei

The Nikkei is a stock market index that represents the Tokyo Stock Exchange and is a key indicator of the market's performance in Japan. It includes the prices of the 225 largest companies listed on the exchange. The script mentions the Nikkei as one of the Asian market boards that investors are closely watching, with its movements influenced by various economic factors, including the Bank of Japan's policies.

💡Currency Pairings

Currency pairings refer to the quotation of the relative value of one currency unit against another. In the foreign exchange market, currency pairs are the primary means of trading currencies. The script discusses currency pairings such as the Euro and the Pound, indicating their movements and the broader market context that investors consider.

💡VIX Index

The VIX Index, also known as the 'fear index,' measures market volatility and investor sentiment. It is based on the prices of put and call options on the S&P 500 index and is often used as a gauge of market fear or complacency. The script notes the VIX Index continuing to drop, suggesting that despite headline risks, investors may not be expecting significant market turbulence in the near term.

💡Protectionism

Protectionism refers to government policies that protect domestic industries from foreign competition by taxing imports, subsidizing local producers, or imposing regulations. In the video, there is a discussion about the risk of unintentionally creeping back into protectionism, highlighting the debate over trade policies and their impact on global commerce.

💡Overcapacity

Overcapacity occurs when the production capacity in an industry exceeds the market demand for its products. This can lead to price wars, lower quality, and economic inefficiencies. The script mentions the G7's concern over China's industrial overcapacity, indicating a consensus on the need to address the issue to maintain fair trade and economic stability.

💡Ukrainian Finance Minister

The Ukrainian Finance Minister is a key economic figure in Ukraine, responsible for managing the country's financial policies and representing Ukraine's economic interests on the global stage. In the script, the presence of the Ukrainian Finance Minister at the G7 summit signifies the importance of international support and discussions around financing for Ukraine amidst geopolitical tensions.

💡PCE Indicator

The PCE (Personal Consumption Expenditures) indicator is the Federal Reserve's preferred measure of inflation. It reflects the changes in prices of goods and services consumed by individuals in the U.S. and is closely watched by policymakers and investors for its implications on monetary policy decisions. The script highlights the upcoming release of the PCE indicator, which is expected to show moderation and is a critical data point for U.S. investors.

💡ECB

The European Central Bank (ECB) is the central bank for the eurozone and is responsible for monetary policy across the region. The ECB's decisions on interest rates and other monetary measures significantly impact the eurozone's economy. In the script, there is a discussion about the timing and frequency of potential interest rate cuts by the ECB, reflecting the market's anticipation and speculation around the ECB's monetary policy actions.

💡South Africa Elections

The South Africa Elections refer to the democratic process of electing the country's government. The script discusses the upcoming elections and the potential implications for the ruling ANC party, which risks losing its parliamentary majority for the first time since the end of apartheid in 1994. The elections are a significant political event with broad implications for South Africa's future direction and policies.

💡National Service

National Service is a program where citizens, often young people, are required or expected to undertake a period of service, typically in the armed forces, public services, or community projects. In the script, the UK Prime Minister Rishi Sunak's proposal to introduce a program of national service is mentioned, indicating a political move that could have significant social and economic implications.

💡T+1 Rule

The T+1 Rule refers to a settlement cycle where securities transactions must be settled one business day after the trade date. This rule is being adopted in the U.S. to streamline the settlement process and make it more efficient. In the script, the anticipation of the T+1 Rule's implementation is discussed, highlighting the potential impact on market efficiency and the adjustments that market participants may need to make.

Highlights

Asian stocks gained at the start of a week dominated by economic data, including the Federal Reserve's preferred inflation indicator.

Israel continues operations in the southern Gaza city of Rafah despite a UN court ruling.

G7 finance chiefs criticize China's trade practices and discuss protections for their economies.

French Finance Minister discusses the economic model issue with China producing cheaper industrial devices.

Equity futures open slightly in the red following a better Wall Street Friday.

Bank of Japan Governor suggests cautiousness is needed to cement inflation expectations at 2%.

Euro area and pound trading sideways, with gold up 0.4%.

G7 finance chiefs issue a joint communiqué accusing China of hurting trade partner economies.

UK Chancellor Jeremy Hunt emphasizes the importance of not unintentionally reverting to protectionism.

Ukrainian finance minister discusses the handling of frozen Russian assets at the G7 summit.

Hamas-run health ministries report at least 35 Palestinians killed in an Israeli airstrike.

US Treasury preparing to launch a series of 56 repurchase agreements for the first time since the early 2000s.

MLIV strategist Ven Ram discusses the potential impact of liquidity operations on bond markets.

Former ANC political analyst Melanie Verwoerd provides insights on South Africa's elections and the ANC's prospects.

Discussion on the potential for coalitions in South Africa's government following the election.

Bloomberg Daybreak Europe covers various key events including South Africa's general election and the EU Foreign Affairs Council.

Qatar Airways flight experiences severe turbulence over Turkey, resulting in 12 injuries.

NVIDIA CEO Jensen Huang and a bipartisan delegation of U.S. lawmakers arrive separately in Taiwan.

ECB's forward guidance questioned by Bundesbank President, suggesting a data-dependent approach is more appropriate.

Olaf Scholz and Emmanuel Macron discuss the creation of a European Capital Markets Union.

French Finance Minister Bruno Le Maire discusses G7's united stance on addressing China's industrial overcapacity.

UK Prime Minister Rishi Sunak proposes a program of national service as part of the election campaign.

Labour Party pledges to review plans for the UK government to reduce its stake.

Markets preparing for the T+1 rule which begins in the U.S., changing trade settlement from two days to one.

Elon Musk's AI company, Neuralink, secures a $6 billion funding round with more announcements expected in the coming weeks.

Transcripts

JOUMANNA: GOOD MORNING, THIS IS "BLOOMBERG DAYBREAK EUROPE,"

I'M JUMA NEVER SAID SHE IN DUBAI.

ASIAN STOCKS GAINED, KICKING OFF A WEEK DOMINATED BY DATA

INCLUDING THE FED'S PREFERRED INFLATION INDICATOR.

ISRAEL IS PRESSING AHEAD WITH OPERATIONS IN THE SOUTHERN GAZA

CITY OF RAFAH, DESPITE A U.N. COURT RULING.

G7 FINANCE CHIEFS BLAST CHINA'S TRADE PRACTICES AND WRITTEN TO

PROTECTIONS FOR THEIR ECONOMIES. WE WILL BRING OUR EXCLUSIVE

INTERVIEW WITH THE FRENCH FINANCE MINISTER.

>> WE HAVE AN ISSUE WITH THE ECONOMIC MODEL IN WHICH CHINA

IS PRODUCING MORE AND MORE CHEAPER INDUSTRIAL DEVICES.

IT COULD BE A THREAT NOT ONLY FOR THE EU, NOT ONLY FOR THE

U.S., BUT THE GLOBAL WORLD ECONOMY. JOUMANNA:

GOOD MORNING, AGAIN, THIS IS JOUMANNA BERCETCHE IN DUBAI

STANDING IN FOR TOM MACKENZIE, IT IS A U.K. BANK HOLIDAY.

WE WILL TAKE A LOOK AT HOW KEY EQUITY FUTURES ARE TRADING.

AS YOU CAN SEE, ALL OF THE FUTURES ARE OPENING SLIGHTLY IN

THE RED THIS MORNING. MODERATE LOSSES ON THESE

BOARDS, AFTER A BETTER WALL STREET FRIDAY, WE SAW THE

ESSENCE END UP 0.7% HIGHER, NASDAQ UP 1%, INVESTORS CHEERED

ON BY SLIGHTLY LOWER-THAN-EXPECTED INFLATION

NUMBERS AND THE UNIVERSITY OF MICHIGAN SENTIMENT INDICATORS.

ASIAN MARKET BOARDS THIS MORNING.

WE ARE KEEPING A CLOSE EYE ON JAPAN.

SOME INTERESTING COMMENTARY COMING THROUGH FROM THE BANK OF

JAPAN GOVERNOR UEDA.

ASIA-PACIFIC ACTUALLY UP 0.5%, COMING OFF A WEEK OF LOSSES

LAST WEEK, CHINESE INDICES UP 0.3%.

LET'S GET TO THAT BANK OF JAPAN COMMENTARY.

IT HAD BEEN DRIVING SOME OF THE SENTIMENT OVERNIGHT WITH THE

BANK OF JAPAN GOVERNOR SUGGESTING CAUTIOUSNESS WAS

NEEDED IN ORDER TO CEMENT INFLATION EXPECTATIONS AT 2%.

>> WE HAVE MADE PROGRESS IN MOVING AWAY FROM ZERO AND

LIFTING INFLATION EXPECTATIONS.

BUT WE MUST NOW RANCOR THEM AT THE 2% INFLATION TARGET.

WE WILL PROCEED CAUTIOUSLY AS TO OTHER CENTRAL BANKS WITH OUR

INFLATION TARGETING FRAMEWORKS. JOUMANNA:

WE WILL PROCEED CAUTIOUSLY. IT IS GIVING A BOOST TO THE

NIKKEI AND DOLLAR-YEN THIS MORNING.

THE EURO AREA TRADING SIDEWAYS TODAY, 1.0 850, BUT IT IS UP

OVER THE LAST MONTH, THE POUND SIMILAR MOVEMENT, 1.2740 WHERE

WE'RE AT THIS MORNING, GOLD IS UP 0.4%.

WE DID SEE THE CURRENCY DIP TOWARDS THE END OF LAST WEEK,

BUT THE SAME THEMES APPLY, WE WE CONTINUE TO SEE RESERVE

BUYING GIVING SUPPORT TO THE BULLYING.

THE VIX INDEX CONTINUES TO DROP DESPITE THE HEADLINE RISKS

COMING THE NEXT FEW MONTHS. CHINESE TRADE PRACTICES HAVE

BEEN SIZED BY G7 FINANCE CHIEFS, WHO ARE THREATENING

ESCALATION. IN A JOINT COMMUNIQUE AFTER

THEIR MEETING IN ITALY, THE ACCUSED CHINA OF HURTING THE

ECONOMIES OF TRADE PARTNERS. LET'S GET MORE WITH OLIVER

CROOK. CHINA WAS A BIG PART OF THE

DISCUSSION AT THE G7. WHAT CAME AWAY FROM THE SUMMIT?

IT FEATURED HEAVILY IN THE COMMUNIQUE. OLIVER:

THE CONTEXT OF THE TIMING WAS INTERESTING BECAUSE A COUPLE OF

WEEKS BEFORE, HE SAW THE BIDEN ADMINISTRATION THROW UP TARIFFS

ON EV'S AND A FEW OTHER GOODS. LET'S NOT FORGET WE'RE

EXPECTING THE SAME FROM THE EU IN A COUPLE OF WEEKS TIME.

WE WILL HAVE TO BE PRECISE TO TALK ABOUT THIS QUESTION OF

OVERCAPACITY. WHICH YELLEN KICKED OFF IN THE

PRESS CONFERENCE WITH THE G7 MEETING.

FOR THE G7, IT WAS A VENUE FOR THEM TO SAY THEY ARE SPEAKING

WITH A UNIFIED VOICE ON THIS QUESTION OF CHINA.

THE LANGUAGE ITSELF WAS SOMEWHAT HEDGED, AS YOU WILL

HEAR FROM THE COMMUNIQUE, CHINA WAS ONLY MENTIONED TWICE, AND

TRADE AND OVERCAPACITY ONLY ONES AFRAID LISTEN TO JEREMY

HUNT, THE CHANCELLOR OF THE EXCHEQUER COMMEND WHAT HE HAD

TO SAY ABOUT RISING PROTECTIONISM.

>> IT IS REALLY IMPORTANT THAT THE WORLD IS NOT

UNINTENTIONALLY CREEP BACK INTO PROTECTIONISM.

OUR STARTING POINT IS THAT WE REALLY THINK HARD BEFORE

IMPOSING TARIFFS OR TRADE REMEDIES. OLIVER:

OF THE PEOPLE I SPOKE TO , JEREMY HUNT WAS THE LAST

DEFENDER OF THE OPEN MARKET. CAUTIONING EVEN HIS ALLIES

AGAINST SOME OF THAT PROTECTIONISM.

YOU THINK ABOUT THAT OVERCAPACITY ARGUMENT AND THE

U.S. THROWING UP BARRIERS, THE EUS

WELL, THAT LEAVES THE U.K. VULNERABLE TO EXTRA

OVERCAPACITY BUT THE CHANCELLOR

IS NOT CONCERNED HE WANTS TO PRESERVE OPEN LINES OF TRADE

THROUGHOUT THE WORLD. JOUMANNA: IT IS THE U.S.

THAT IS THE KEY PROTAGONIST LOOKING TO PRESSURE CHINA.

I ALSO NOTICED THE UKRAINIAN FINANCE MINISTER WAS IN

ATTENDANCE. I KNOW THAT UKRAINE WAS ONE OF

THE BIG TOPIX DISCUSSED. NAMELY BECAUSE THERE HAVE BEEN

CONVERSATIONS ABOUT WHAT TO DO WITH THOSE FROZEN RUSSIAN

ASSETS. DID ANYTHING COME OUT OF THIS

SUMMIT? OLIVER: THERE WAS A LOT OF POSITIVE

TALK AND A LOT OF TALK ABOUT THE WILL AND INITIATIVE, AND

EVERYBODY IN BROAD STROKES, IN AGREEMENT.

BUT IN TERMS OF KNEELING DOWN BACKER TEXTURE -- NAILING DOWN

THE ARCHITECTURE OF RUSSIAN ASSETS, THAT WAS NOT FULLY

DEALT WITH. I WAS A BIT SURPRISED HOW

DIFFICULT THE TECHNICAL ISSUES SEEM TO HAVE BEEN.

THE G7 MINISTERS SEEM TO HAVE COALESCED AROUND THE AMERICAN

PLAN, WHICH IS TO SAY THE FUTURE EARNINGS OF RUSSIAN

ASSETS COULD BE DISBURSED TODAY, TO THE TUNE OF ABOUT $50

BILLION, BUT THERE ARE ALL THESE TECHNICAL ELEMENTS THAT

ARE MISSING. HERE IS JEREMY HUNT.

>> THE G7 WAS ABSOLUTELY UNITED IN ITS SUPPORT OF UKRAINE.

IT ALWAYS HAS BEEN. BUT I FELT THAT IT WAS STRONGER

THAN I'VE SEEN IT BEFORE.

I THINK THAT SENDS A VERY BIG SIGNAL TO PUTIN THAT WE WILL

NOT LET HIM SUCCEED. OLIVER: A LOT OF POSITIVE TALK, SORT OF

LACKING ON THE DETAILS. THEY NEED TO HAMMER THIS

ARCHITECTURE OUT AND BUY TWO AND A HALF WEEKS TIME WHEN THE

G7 LEADERS MEETING TAKES PLACE IN SOUTHERN ITALY, THAT WILL BE

THE HOLY GRAIL FOR THEM TO GET UKRAINIAN FINANCING ON STABLE

FOOTING NOT JUST FOR THIS YEAR, BUT YEARS TO COME. JOUMANNA:

AND POSSIBLY WITH A CHANGE IN U.S.

PRESIDENT, WHICH ALSO MAY THROW A SPANNER IN THE WORKS.

AMAZING COVERAGE OVER THE WEEKEND. IN MIDDLE EAST NEWS.

THE HAMAS RUN HEALTH MINISTRIES HAS AT LEAST 35 PALESTINIANS

HAVE BEEN KILLED IN AN ISRAELI AIRSTRIKE AT A CAMP FOR

DISPLACED PEOPLE IN WRAPUP. IT CAME TWO DAYS AFTER THE ICJ

ORDERED ISRAEL TO HALT ITS OPERATIONS IN ORDER TO SPARE

CIVILIANS. LET'S GET MORE FROM ONUR ANT.

THERE HAS BEEN INTENSIFICATION IN A TAX ON BOTH SIDES OVER THE

WEEKEND WITH ROCKETS FIRED INTO TEL AVIV.

THE RESPONSE FROM ISRAEL OVER THE WEEKEND WITH MISSILES

DIRECTED AT CAMPS IN ROUGH. WHAT ELSE DO WE KNOW ABOUT

THESE STRIKES?

>> SUNDAYS 76 INFLATION -- SUDDEN ESCALATION IN VIOLENCE

CAME AFTER HAMAS LAUNCHED ROCKETS IN TEL AVIV.

ALL OF THOSE ROCKETS WERE INTERCEPTED BY ISRAELI AIR

DEFENSES, FOLLOWING WHICH, ISRAEL CARRIED OUT THE STRIKE

IN A PART OF RAFAH THAT WAS OVERLY CROWDED AND RESULTED IN

THE DEATH OF DOZENS OF PEOPLE. THAT AREA IN RAFAH THAT WAS HIT

ON SUNDAY WAS NOT ONE OF THOSE WHERE ISRAELI AUTHORITIES WERE

URGING RESIDENTS TO MOVE ELSEWHERE, WHICH IS WHAT THEY

HAVE BEEN DOING THE LAST FEW WEEKS IN EXPECTATION OF THE

RAFAH INVASION WHICH SHOULD NOT MATERIALIZE.

THAT MEANT BASICALLY THE AREA

THAT WAS HIT ELIMINATED A EVEN ABOUT RESULTED -- ILLUMINATED A

KEY MEMBER OF HAMAS RESULTED IN THE DEATH OF SUVA.

THERE IS DISAGREEMENT OVER WHAT THE ICJ COURT RULING MEANT.

JOUMANNA: THE BACKDROP TO ALL OF THIS IS

WE FOUND OUT TOWARDS THE END OF THE WEEK LAST WEEK AFTER THAT

VIDEO WAS RELEASED TO THE PUBLIC ABOUT THE ABDUCTED

ISRAELI FEMALE SOLDIERS, THAT ISRAEL DUE TO PUBLIC PRESSURE,

ARE NOW LOOKING TO REENGAGE IN TALKS WITH THOMAS ONCE MORE VIA

MEDIATORS. WHAT IS THE LATEST ON THOSE

TALKS GIVEN THEIR HAS BEEN INTENSIFICATION OF VIOLENCE

OVER THE WEEKEND.

>> THE VIOLENCE PUTS IN DANGER THE POSSIBLE RESUMPTION OF

TALKS. THE QATARI FOREIGN MINISTER,

WHO HAS BEEN ONE OF THE KEY MEDIATORS IN THE TALKS FOR

MONTHS NOW, MET WITH INTELLIGENCE CHIEFS OF THE U.S.

AND ISRAEL LAST WEEK IN PARIS, AND THIS WEEK, WE EXPECTED

TALKS TO RESUME AGAIN. IF ANYTHING, SUNDAYS ATTACK

PUTS ON DISPLAY THE SIGNIFICANT DIFFERENCE BETWEEN THE TWO

SIDES. FOR MONTHS, THE INTEREST HAD

TRIED TO BRIDGE THE GAP BETWEEN ISRAEL ON THE ONE SIDE AND

HAMAS ON THE OTHER, ISRAEL SEES A POSSIBLE CESSATION OF

HOSTILITIES AS AN OPPORTUNITY TO GET THE ISRAELI HOSTAGES

HELD BY HAMAS IN GAZA TO BE RELEASED, WHEREAS FOR HAMAS,

THE LANGUAGE IN ANY DEAL SHOULD BE CONSTRUCTED IN A WAY, SO

THAT THE CEASEFIRE CAN BE EQUIVALENT TO A PERMANENT,

LONG-LASTING IF NOT PEACE, AT LEAST CESSATION OF HOSTILITIES.

THAT IS THE KEY DIFFERENCE BETWEEN THE TWO SIDES.

IF ANYTHING, SUNDAYS ATTACK PUTS IN DANGER THE RESUMPTION

OF TALKS WE EXPECTED YOU TO PLACE THIS WEEK.

JOUMANNA: THE LATEST OUT OF THE REGION.

BOND TRADERS WHO ARE STUCK IN A WAITING GAME OVER FED POLICY

MAY SOON GET SOME WELCOME SUPPORT.

FOR THE FIRST TIME SINCE THE EARLY 2000'S, THE U.S.

TREASURY IS PREPARING TO LAUNCH A SERIES OF 56.

YOU HEARD IT HERE FIRST. WHILE THE CENTRAL BANK TAPERS THE

PACE OF ITS BALANCE SHEET RUNOFF. THIS AHEAD OF INFLATION

INDICATORS HAD TO BE RELEASED LATER THIS WEEK.

FOR MORE, MLIV STRATEGIST VEN RAM. THE DETAILS ARE IMPORTANT

BECAUSE IT COULD BE CONSTRUED AS A BUYBACK, BUT NOT WITH THE

AIM OF PURSUING MONETARY POLICY, IT'S IMPORTANT TO NOTE

THESE ARE LIQUIDITY OPERATIONS. THE FED IS INTRODUCING THEM

BECAUSE THEY WANT TO HELP

INCLUDE OR INJECT LIQUIDITY IN TREASURIES BUT WHAT IMPACT WILL

THAT HAVE ON BOND MARKETS?

>> IT WILL HAVE MARGINAL IMPACT. SOME KIND OF IMPACT, BUT

MARGINAL, BECAUSE THE OVERARCHING POLICY FACTORS THAT

WILL WEIGH ON THE MARKET IS INFLATION AND MONETARY POLICY.

AT THE MARGIN, THIS REDUCTION OF THE BUYBACK WILL IMPROVE

LIQUIDITY, BECAUSE THESE TREASURIES GO OFF THE RUN, AND

IT IS VERY HARD TO TRADE THEM, VARIABLY, AND IT HELPS TO BRING

BACK THE SECURITIES. THE MORE IMPORTANT MEASURE WILL

BE THE RUNOFF IN QT. THAT WILL REDUCE FROM 60

BILLION TO 25 BILLION, THAT WILL HELP TREASURIES A LOT MORE

THAN LIQUIDITY MEASURES, BUT OVERALL THERE IS NO GETTING

AWAY FROM WHAT THEMES NATION NUMBERS MEAN FOR THE FED'S

POLICY. WE WILL GET PCE THIS WEEKEND IF

IT IS 2.8%, IT WILL BE HARD TO ARGUE THAT THE FED WILL CUT

RATES BY A WHOLE LOT. JOUMANNA: ULTIMATELY, INFLATION

EXPECTATIONS, THE ANALYSIS OF WHERE R-STAR WILL BE WILL

DETERMINE WHERE THOSE RATES WILL END UP.

I WANT TO ASK ABOUT THE ECB BECAUSE OUR COLLEAGUE OLIVER

CROOK WAS INTERVIEWING THE BUNDESBANK PRESIDENT JOACHIM

NAGEL OVER THE WEEKEND, ONE OF THE MORE HAWKISH MEMBERS OF THE

ECB, I THOUGHT IT INTERESTING HE DOESN'T THINK JUN SHOULD BE

A LIVE MEETING, HE IS HAPPY TO WAIT UNTIL SEPTEMBER.

OF COURSE, MARKETS ARE CENTERED AROUND JUNE BEING THE TIMING OF

THIS FIRST RATE CUT, WOULD IT BE A BIG SURPRISE IF THEY DON'T

OVERTURN AT THIS POINT?

>> I WOULD BE SURPRISED IF THEY DIDN'T GO.

NAGEL IS A REALLY OUTLINE HAWKISH MEMBER, SO IT'S NOT A

SURPRISE HE WOULD SAY THAT, BUT THE BULK OF THE GOVERNING

COUNCIL HAS COME AROUND TO THE VIEW THAT JUNE IS WHEN THEY

WILL GO FIRST, AND I THINK WE WILL GET THAT REDUCTION.

WHAT IS INTERESTING IS WHAT WILL HAPPEN BEYOND JUNE.

ARE WE GOING TO GET CUTS AT EVERY MEETING?

AT ALTERNATE MEETINGS, AND HOW MAKE CUMULATIVE CUTS WILL WE

GET BY THE END OF THE YEAR? THE MARKETS HAVE BEEN FACTORING

IN THREE RATE CUTS BY THE END OF THE YEAR, THAT'S A BIT OF A

TALL ORDER, ESPECIALLY IN A SITUATION WHERE THE FED WILL

NOT CUT TOO MUCH, SO TWO CUTS IS WHAT THE MARKET SHOULD

PERHAPS EXPECT. JOUMANNA: WE SPEND SO MUCH TIME TALKING

ABOUT THE TIMING OF THE FIRST RATE CUT, BUT NOT ENOUGH

TALKING ABOUT HOW FREQUENTLY THESE CUTS WILL OCCUR

SUBSEQUENTLY. THANK YOU FOR JOINING US AROUND

THE SET TODAY. THAT WAS MLIV STRATEGIST VEN

RAM. QUICK LOOK AT WHAT ELSE WE HAVE

ON OUR RADAR. IN TERMS OF KEY EVENTS THIS

WEEK, WE HAVE THE EU FOREIGN AFFAIRS COUNCIL.

THAT STARTS TODAY BUT IT IS A TWO DAY MEETING SO WE WILL GET

COMMUNIQUES FROM THAT TOMORROW. WEDNESDAY IS THE DEADLINE FOR

BHP-ANGLO AMERICAN TALKS. BHP HAVE NOW MADE THREE OFFERS

TO PURCHASE ANGLO AMERICAN. THIS TIME AROUND, THEY ARE

GIVING THEM A COUPLE DAYS TO COME BACK WITH A RENEGOTIATED

OFFER, WE WILL SEE WHETHER THERE IS FURTHER INFORMATION

ABOUT POTENTIAL DIVESTMENTS. FRIDAY, THE BIG EVENT FOR U.S.

INVESTORS WILL BE THAT PCE INDICATOR, THE FED'S PREFERRED

INFLATION GAUGE. IT IS EXPECTED SHOW MODERATION

TO THE LOWEST LEVEL THIS YEAR.

ALSO COMING UP, SOUTH AFRICA'S PRESIDENT URGES PEOPLE TO TURN

OUT IN THE COUNTRY'S GENERAL ELECTION.

WE ARE LIVE IN CAPE TOWN AHEAD OF WEDNESDAY'S POLL.

THIS IS BLOOMBERG.

JOUMANNA: WELCOME BACK TO "BLOOMBERG

DAYBREAK EUROPE." PRESIDENT CYRIL RAMAPHOSA IS

URGING CITIZENS TO TURN OUT IN WEDNESDAY'S ELECTION, AS SOUTH

AFRICA'S RULING ANC PARTY RISKS LOSING HIS PARLIAMENTARY

MAJORITY FOR THE FIRST TIME SINCE THE END OF APARTHEID IN

1994. THE MINISTER SAYS THE PARTY

WILL COME OUT ON TOP.

>> THEY AND SEE STILL RUB -- THE ANC REPRESENTS THE BEST

INTERESTS OF ALL SOUTH AFRICANS. THAT IT WILL CLIMB THE WAVE, SO

TO SPEAK, OF OPTIMISM AND COME OUT WITH 15%, AND ONCE AGAIN BE

GIVEN AN OPPORTUNITY TO CONTINUE TO BUILD DEMOCRACY IN

THIS COUNTRY.

TO BUILD OUR ECONOMY AND TO ENSURE THAT THE INEQUALITY AND

DIVISIONS IN OUR SOCIETY ARE INTENDED TO IN THE ANC WAY.

JOUMANNA: KEY ELECTIONS COMING UP THIS

WEEKEND. LET'S BRING IN MY COANCHOR

JENNIFER ZABASAJJA WHO IS IN

CAPE TOWN WITH A GUEST. >> GOOD MORNING, I HAVE MELANIE

VERWOERD, FORMER ANC POLITICAL ANALYST, AND FORMER BLOOMBERG

CONTRIBUTOR, THANK YOU FOR BEING HERE, YOU ARE PARTLY

PRIMED TO TALK ABOUT THIS.

WE SHOWED THE PRIME MINISTER EXPECTING THE RULING ANC TO GET

TO 15%. MELANIE: IT IS A BIT OF OPTIMISM AND

SPENDING BY THE AND SEE AT THIS STAGE.

IT LOOKS UNLIKELY THERE WILL GET OVER 50%.

MOST PROBABLY 45 AND UPWARD SEEMS LIKELY AT THIS STAGE.

>> WHERE DID THEY LOSE OUT ON THAT PERCENTAGE ON THE MAJORITY?

MELANIE: THEY LOSE IT EVERYWHERE ACROSS

THE COUNTRY. THEY HAVE LOST THEIR BASE

SUPPORT WHICH IS MOSTLY AFRICAN SUPPORT, BLACK SOUTH AFRICANS.

THEY HAVE LOST A LOT OF VOTES BECAUSE OF JACOB ZUMA AND THE

MK PARTY. THAT IS THE SECOND-BIGGEST

PROVINCE IN TERMS OF RUNNING NUMBERS.

THEY HAVE LOST SUPPORT AROUND JOHANNESBURG, THE BIGGEST

PROVINCE IN SOUTH AFRICA, AND THAT HURTS THEM.

>> YOU BRING UP FORMER PRESIDENT JACOB ZUMA.

YOU WROTE A BLOOMBERG OPINION COLUMN THAT SAID HE MAY NOT

MAKE THE DIFFERENCE A LOT OF PEOPLE WERE EXPECTING.

>> HE IS NOT IN PARLIAMENT.

MELA THE CONSTITUTIONAL COURT RULED

HE CANNOT STAND IS A PRESIDENTIAL CANDIDATE.

ALL THAT THE PARTY HAS TWO OFFER VOTERS AT THE MOMENT IS

JACOB ZUMA.

THERE IS NOT REAL -- PICK UP ZUMA IS GETTING ELDERLY.

I AM SURE THEY WILL GET SOMETHING LIKE 10% OR AROUND

THAT NUMBER, BUT VERY MUCH A FLASH IN THE PAN, ONE CANNOT

SEE THEM IN FIVE YEARS FROM NOW UNLESS THINGS CHANGE

DRAMATICALLY WITHIN THAT PARTY.

>> DOES IT STILL HAVE AN IMPACT ON SOUTH AFRICA AND THE

DEMOCRACY MOVING FORWARD, ESPECIALLY BECAUSE OF THE

POLICY THEY HAVE BEEN PUSHING FOR? MELANIE:

NOT REALLY, BECAUSE WHAT ULTIMATELY HAPPENS IS CABINET

DECIDES THE WAY THE COUNTRY WILL GO FORWARD, AND DECIDES ON

POLICY. MK WILL ALMOST 100% I CAN SAY

THEY WILL NOT BE IN CABINET, FIRST OF ALL, SO ALL THEY CAN

DO IS MAKE NOISE IN PARLIAMENT, AT 10%, THEY ARE ABOUT 40%, SO

THEY WILL MAKE A LOT OF NOISE AND MAY BE DISRUPTIVE

PARLIAMENT, BUT THEY WOULD HAVE IMPACT ON ANY OF THE POLICIES.

THE ANC WILL STILL BE SUCH A DOMINANT FACTOR THAT THEY WON'T

BE ABLE TO MAKE THAT MUCH OF A DIFFERENCE.

IN THE END COME WITH ALL THE NOISE, IT WON'T MAKE A BIG

DIFFERENCE.

>> LET'S TALK ABOUT COALITIONS BECAUSE A LOT OF PEOPLE EXPECT

A COALITION. CANNOT WORK ON A NATIONAL LEVEL?

SOME PROVINCES, IT DOES NOT WORK, BUT YOU HAVE EXPERIENCED

COALITIONS TO A CERTAIN EXTENT. MELANIE: WE HAVE SEEN AT LOCAL

GOVERNMENT -- ACTUALLY, THE MAJORITY OF LOCAL GOVERNMENTS,

IT HAS WORKED, BUT THEY HAVE BEEN THE SMALLER, LOCAL

AUTHORITIES. THE BIG DISASTERS HAVE BEEN IN

THE BIGGER MUNICIPALITIES. AND THAT'S THE CONCERN.

COULD YOU HAVE COALITIONS THAT COLLAPSED THE COUNTRY?

IF THE ANC GETS ABOUT 45%, IT WILL BE STABLE, IT WILL BE

COALITIONS WITH SMALLER PARTIES OR INDEPENDENCE AND THAT WILL

BE FAIRLY STABLE. OUR CURRENT PRESIDENT IS IN A

HEAVY SPACE TO INCLUDE PEOPLE. WE HAD A HISTORY IN THE

BEGINNING OF NATIONAL UNITY WITH ALL THE POLITICAL PARTIES

REPRESENTED. THE ANC HAS BEEN IN A

PARTNERSHIP THROUGH ALL THESE YEARS WITH WHAT IS CALLED THE

TRIPARTITE ALLIANCE WITH THE TRADE UNIONS, AND THEY HAVE

ALSO BROUGHT IN LITTLE PARTIES, AND AT SOME STAGE THEY HAD THE

FREEDOM FRONT PLUS. WE HAVE DONE THAT ON A NATIONAL

LEVEL. THE ONLY REAL RISK WHAT WOULD

CONCERN MARKETS IS IF THEY ARE FORCED TO GO IN COALITION WITH

THE EFF, WHICH WE HAVE SEEN A LOCAL GOVERNMENT, HAS BEEN VERY

UNSTABLE, AND COULD BE VERY DISRUPTIVE.

OTHERWISE, IT WILL WORK, ESPECIALLY IF THE ANC IS ABOUT

45%.

>> DOES THAT MEAN CYRIL RAMAPHOSA, IS STAYING IN THE

PRESIDENTIAL POSITION? MELANIE: THE QUESTION IS LONG-TERM, THAT

WOULD BE HIS CHOICE ULTIMATELY. WHENEVER HE DECIDES TO LEAVE,

IT WILL NOT BE A MESSY TRANSITION, IT WILL BE A

PEACEFUL HANDOVER.

>> MELANIE VERWOERD JOINING US IN CAPE TOWN WHERE THE SUN IS

SLIGHTLY COMING UP. BACK TO YOU. JOUMANNA:

BEAUTIFUL SHOT OVER CAPE TOWN THIS MORNING.

THAT WAS HORIZON'S AND AFRICA ANCHOR JENNIFER ZABASAJJA.

PLENTY MORE IN COVERAGE OF SOUTH AFRICA'S ELECTIONS.

WE SPEAK TO THE CAPE TOWN MAYOR AT 730 U.K.

TIME, AND THE LEADER OF THE GOOD PARTY AT 9:30 U.K. TIME.

THIS IS BLOOMBERG.

JOUMANNA: WELCOME BACK TO "BLOOMBERG

DAYBREAK EUROPE."

NOW SOME OTHER STORIES MAKING USE. A QATAR AIRWAYS FLIGHT HIT

SEVERE TURBULENCE OVER TURKEY INJURING 12 PEOPLE.

THE BOEING 787 LANDED AS SCHEDULED IN DUBLIN AND QATAR

AIRWAYS SAYS IT IS INVESTIGATING THE INCIDENT.

LAST WEEK A SINGAPORE AIRLINES FLIGHT MADE AN EMERGENCY

LANDING IN BANGKOK AFTER SEVERE TURBULENCE KILLED ONE PASSENGER

AND INJURED DOZENS OF OTHERS. NVIDIA VOS JENSEN HUANG AND A

BIPARTISAN DELEGATION OF U.S. LAWMAKERS ARRIVE SEPARATELY IN

TAIWAN. BUILDERS LEADERS WILL MEET WITH

THE PRESIDENT. IT COMES AFTER CHINA WRAPPED UP

ITS LARGEST MILITARY DRILLS AROUND THE ISLAND IN A YEAR.

THE U.S. HAS ACCUSED BEIJING OF MILITARY

PROVOCATIONS FOR A LATER ON THE SHOW, WE WILL TALK ABOUT THE

BUDDHIST BANK PRESIDENT WHO TELLS US THE ECB SHOULD WAIT

UNTIL SEPTEMBER TO MAKE ANOTHER MOVE, AFTER A GENERATE COUNTRY

THE MARKET IS PRICING IN 21 BASE POINTS OF THE PROBABILITY

OF A RATE CUT FOR JUNE, LESS SO, FOR SEPTEMBER.

MORE FROM THAT INTERVIEW ON THE SIDELINES OF THE G7 IN JUST A

FEW MOMENTS. THIS IS BLOOMBERG.

♪

>> GOOD MORNING. THIS IS "BLOOMBERG DAYBREAK:

EUROPE."

THESE ARE THE STORIES THAT CITE YOUR AGENDA.

ASIAN STOCKS GAINED KICKING OFF A WEEK SET TO BE DOMINATED BY

DATA INCLUDING THE FED'S PREFERRED INFLATION INDICATOR.

U.S. AND U.K. MARKETS ARE CLOSED FOR HOLIDAYS.

ISRAEL IS PRESSING AHEAD WITH OPERATIONS IN THE SOUTHERN GAZA

CITY OF RAFAH DESPITE A U.N. COURT RULING THAT ORDERED IT TO

STOP.

G7 FINANCE CHIEFS BLAST CHINA'S TRADE PRACTICES AND

THREATEN TOUGHER PROTECTIONS FOR THEIR ECONOMIES AND

CRITICAL INDUSTRIES. WE WILL BRING YOU OUR EXCLUSIVE

INTERVIEW WITH >> THE FRENCH FINANCE, BRUNO LE MAIRE.

WE HAVE -- WITH BRUNO LE MAIRE.

>> CHINA IS PRODUCING MORE AND MORE CHEAPER INDUSTRIAL DEVICES.

IT COULD BE A THREAT NOT ONLY FOR THE E.U., NOT ONLY FOR THE

U.S., BUT FOR THE GLOBAL WORLD ECONOMY.

>> SHOTS FIRED FROM SOME OF THESE EUROPEAN FINANCE

MINISTERS TO CHINA ON THE BACK OF THAT G7.

A BIG STORY FOR TODAY. I AM SITTING IN FOR TOM

MACKENZIE. IT IS A U.K. BANK HOLIDAY.

YOU CAN SEE ALL OF THE MAJOR EQUITY FUTURES ARE SEEING

OPENINGS SLIGHTLY IN THE RED SO THE EURO STOXX 50 FUTURE SEEING

ABOUT 10 BASIS POINTS LOWER, FTSE 100, ABOUT .3% WEAKER AS

WE HEAD INTO WHAT COULD BE QUITE A CRUCIAL WEEK FOR MARKET

DIRECTION. FRIDAY, THE BIG EVENT WITH THAT

PCE NUMBER COMING THROUGH FROM THE U.S.

AS FOR ASIAN MARKETS, IT IS A SLIGHTLY DIFFERENT TYPE OF

SENTIMENT THIS MORNING. WE ARE SEEING THE MSCI IS TRADE

IN THE GREEN AFTER A WEEK OF LOSSES LAST WEEK, ABOUT .2%

HIGHER IN TRADING TODAY. THE CHINESE INDICES BRUSHING

OFF SOME OF THE COMMENTARY COMING OUT OF THE MEETING,

TRADING IN THE GREEN THIS MORNING AS WELL AND THE NIKKEI

UP 5%, THIS ON THE BACK OF COMMENTS FROM THE BANK OF JAPAN

GOVERNOR SUGGESTING THAT THEY CAN PROCEED CAUTIOUSLY WITH

RATE HIKES. AS FOR OTHER ASSETS THAT WE ARE

FOLLOWING THIS MORNING AS WELL, LET'S TAKE A LOOK AT SOME OF

THOSE CURRENCY PAIRINGS. HERE ARE TRADING SIDEWAYS.

THE POUND TRADING AT -- BOTH OF THEM ARE UP 1% IN THE LAST

MONTH. GOLD ALSO SEEING A BIT OF LOVE

THIS MORNING, OF 14 PERCENT AFTER DIPPING TOWARDS THE END

OF THE LAST WEEK. STILL COMING OFF A RECORD HIGH

IN THE BULLYING TOWARDS THE BIG

FASHION BULLY ON -- THE BULLION TOWARDS THE BEGINNING

OF THE WEEK. ECB EXECUTIVE BOARD MEMBER SAYS

THE TIME OF RIGHT FOR A HIKE. SPEAKING AT THE ECONOMY FASTER,

HE SAID ANY MOVE TOWARDS AFTERWORDS WILL BE "DATA

DEPENDENT." HE SAID THERE ARE CONDITIONS

FOR A CHANGE IN MONETARY POLICY AT THE JUNE 6 MEETING.

IT IS NOT JUST THE DOVES WE HAVE BEEN SPEAKING TO.

HAVE BEEN SPEAKING EXCLUSIVELY TO THE EUNICE BANK PRESIDENT.

HE SAYS THEY SHOULD WAIT UNTIL SEPTEMBER FOR ANY SUBSEQUENT

RATE CUTS.

>> MY EXPECTATION IS THAT THERE IS A FLATTENING OF THE WAGE

DATA THAT IS OCCURRING OVER THE NEXT MONTH SO I BELIEVE THAT

SOME RELIEF COMING WAS FROM THE DATA SET BUT NEVERTHELESS,

WHICH DATA ARE STILL STRONG SO WE HAVE TO KEEP OUR VIGILANCE

WHEN IT COMES TO THE NEXT RATE DECISION.

>> IT SOUNDS LIKE IT'S NOT CONCERNING YOU THAT MUCH.

WE ARE EXPECTING INFLATION TO COME UP IN GERMANY, SPAIN,

FRANCE, THE EURO ZONE, TO SLOW ITS DESCENT.

DOES THAT NOT CONCERN YOU?

>> HAS A CENTRAL BANKER, YOU ARE ALWAYS CONCERNED BUT I SEE

THE TREND IS THE MORE IMPORTANT ISSUE.

OVER THE LAST COUPLE MONTHS, INFLATION RATES CAME DOWN SO

WHAT I EXPECT FOR THE NEXT MONTH THAT INFLATION IS COMING

DOWN FURTHER. THE HEADLINE WILL COME DOWN AND

CAME DOWN HERE ALREADY SO WHAT

I SEE IS THE PROBABILITY IS INCREASING.

IN 30 DAYS, WE WILL SEE THE FIRST RATE CUT IN THE EURO ZONE.

>> DO YOU THINK WE CAN RULE OUT BACK-TO-BACK CUTS GIVEN THE

UNCERTAINTY ON THE OUTLOOK FOR INFLATION?

>> I BELIEVE IT IS A VERY IMPORTANT POINT.

IT IS A KIND OF AUTOPILOT THAT WHEN THERE IS MAY BE THE FIRST

RATE CUT THAT THERE IS A CONSEQUENCE, LET ME SAY, MORE

RATE CUTS COMING. I BELIEVE THIS IS NOT HELPFUL

DISCUSSION.

WE REALLY FOLLOWED THE MEETING HERE.

THAT SHOULD STILL BE THE CASE. IF THERE IS A RATE CUT IN JUNE,

WE HAVE TO WAIT AND I BELIEVE WE HAVE TO WAIT UNTIL

SEPTEMBER, JULY. IT'S TOO EARLY TO SPECULATE.

>> --UNDER THE CIRCUMSTANCES PARTICULARLY?

>> I BELIEVE THE FORWARD GUIDANCE WAS HELPFUL MAYBE IN

AN ENVIRONMENT WHERE THERE ARE BLUE SKIES, THE SUN IS SHINING,

BUT NOW, WE ARE IN A WORLD THAT IS MORE DIFFICULT.

IT IS A VERY UNCERTAIN WORLD. A LOT OF GEOPOLITICAL RISKS SO

THE DATA THAT IS INCOMING IS THE MOST IMPORTANT INDICATOR

THAT WE HAVE TO FOLLOW.

>> VERY INSIGHTFUL COMMENTARY FROM THE BUNDESBANK PRESIDENT,

POURING COLD WATER, THE SUGGESTION OF SUBSEQUENT RATE

CUTS EVEN IF THE ECB DO GO FOR THAT RATE CUT IN JUNE.

OBVIOUSLY, NOTABLE GIVEN THAT HE'S ONE OF THE HAWKS ON THE

ECB COMMITTEE. OLAF SCHOLZ SAID THE CREATION

OF A EUROPEAN CAPITAL MARKETS UNION WILL BE A PRIORITY DURING

MEETINGS WITH FRENCH PRESIDENT EMMANUEL MACRON.

PRESIDENT MACRON IS IN GERMANY ON A STATE VISIT WHERE HE WILL

ATTEND CELEBRATIONS MARKING THE 75TH ANNIVERSARY OF THE GERMAN

CONSTITUTION AND HOLD A JOINT CABINET MEETING ON TUESDAY WITH

GERMAN COUNTERPARTS SO LET'S GET MORE ON THE STORY WITH

BLOOMBERG'S CHRISTOPHE ROLLED -- CHRISTOPHE.

VERY INTERESTING TO SEE THEM TALKING ABOUT THAT ONCE MORE.

THIS HAS BEEN A PERENNIAL TOPIC AS WELL AS NEW LEADERS WERE

CONCERNED BUT WHAT WERE THE MAIN TALKING POINTS IN BERLIN

SO FAR? CHRISTOPHE: GOOD MORNING.

YOU MENTIONED THE COMMENTS ABOUT THE CAPITAL MARKET UNION

WERE MADE BY OLAF SCHOLZ JUST BEFORE EMMANUEL MACRON LANDED

IN BERLIN . WHEN HE ARRIVED, THERE WAS WORK

BY THE GERMAN PRESIDENT AND THEY FOCUS VERY MUCH ON THE

IMPORTANCE OF THE FRANCO GERMAN RELATIONSHIP IN ORDER TO PUSH

THROUGH SOME PEOPLE -- SOME REFORMS ACROSS EUROPE TO ALLOW

CLOSER COOPERATION BASICALLY RELATED TO A WIDE RANGE OF

DIFFERENT INITIATIVES. DEFENSE SPENDING, POLITICAL

COOPERATION AND AS YOU ALREADY MENTIONED, THE CAPITAL MARKETS

SO THERE ARE INDEED QUITE A LOT OF TALKING POINTS THAT GO

THROUGH GERMANY. TODAY AND TOMORROW.

>> LET ME JUST ASK YOU MORE SPECIFIC QUESTIONS ABOUT WHAT

IS GOING TO BE THE FOCUS OF TODAY'S MEETINGS.

OBVIOUSLY, HE IS THERE FOR THE 75 YEAR COMMEMORATION OF THE

CONSTITUTION. WHAT IS GOING TO HAPPEN TODAY

SPECIFICALLY?

>> HE IS GOING TO GO TO THE CITY WHERE HE'S GOING TO HOLD A

PRETTY EAGERLY AWAITED SPEECH BASICALLY STRESSING THE

HIGHLIGHTS THE IMPORTANCE OF STRONGER AND DEEPER TIES

BETWEEN FRANCE AND GERMANY WHICH IN THE PAST HAVE BEEN ONE

OF THE KEY DRIVERS TO ALLOW COOPERATION ACROSS EUROPE.

WE AND OTHERS HAVE REPORTED THE TIES IN THE RELATIONSHIP

BETWEEN EMMANUEL MACRON AND OLAF SCHOLZ, THE GERMAN

CHANCELLOR, HAVE PROBABLY BEEN A BIT MORE DIFFICULT THAN

COMPARED TO THE RELATIONSHIP BETWEEN EMMANUEL MACRON AND HIS

PREVIOUS SUCCESSOR, ANGELA MERKEL, SO I THINK IT'S GOING

TO BE IMPORTANT TO SEE HOW MUCH CONCRETE PROGRESS THAT CAN

REALLY MAKE TO REALLY COOPERATE MORE DEEPLY AND MORE CLOSELY

THAN FRANCE AND GERMANY HAVE PROBABLY DONE OVER THE LAST TWO

TO THREE YEARS.

>> AS OFTEN IS THE CASE WITH THESE TYPES OF MEETINGS, I'M

SURE MANY ANALYSTS WILL BE WATCHING OUT FOR THE PERSONAL

CHEMISTRY BETWEEN THESE TWO LEADERS GIVEN WHAT YOU JUST

SAID ABOUT SORT OF THE TENSIONS THAT HAVE EXISTED BETWEEN THE

TWO OF THEM OVER THE LAST COUPLE OF YEARS.

THANK YOU SO MUCH FOR JOINING US TODAY ON THE SHOW.

FRIEND FINANCE MINISTER BRUNO LE MAIRE SAYS THE G7 IS UNITED

IN ITS CONCERN OVER THE THREAT TO THE GLOBAL ECONOMY FROM

CHINA'S INDUSTRIAL OVERCAPACITY. SPEAKING TO US EXCLUSIVELY FROM

THE GROUPS MEETINGS IN ITALY, HE ALSO CONFIRMED ITS

COMMITMENT TO FUNDING SUPPORT FOR UKRAINE.

>> WE ARE ON THE RIGHT TRACK TO GET FINAL APPROVAL BY THE G7

LEADERS SUMMIT. WE WANT TO ENSURE LONG-STANDING

FUNDING FOR UKRAINE.

AND MAKE NO MISTAKE, THE G7 COUNTRIES ARE FULLY COMMITTED

TO PROVIDE LONG-STANDING POLITICAL AND FINANCIAL SUPPORT

FOR UKRAINE SO THERE ARE MANY OPTIONS ON THE TABLE.

WE WILL WORK ON THOSE OPTIONS TO FIND THE BEST ONE.

WE NEED TO HAVE THE MOST SOLID OPTION FROM BOTH.

I WANT TO LEAVE NO UNCERTAINTY. WE WILL FIND AN AGREEMENT AND

WE WILL PROVIDE TO UKRAINE THE NECESSARY FUNDING.

>> IN TERMS OF CHINA, WHERE WOULD YOU SAY YOU AGREE WITH

THE UNITED STATES AND DISAGREE? WHERE IN YOUR APPROACH DO YOU

THINK THAT THERE IS TOTAL SYNCHRONICITY AND WHERE DO YOU

WANT TO SEE SOME CHANGES? BRUNO: WE HAVE THE G7 LEVEL THAT WE

HAVE AN ISSUE WITH THE CHINESE INDUSTRY OF OVERCAPACITY AND

THIS IS NOT A QUESTION -- TO QUESTION ANYTHING AGAINST CHINA.

CHINA IS AN ECONOMIC PARTNER BUT WE HAVE AN ISSUE WITH THE

ECONOMIC MODEL IN WHICH CHINA IS PRODUCING MORE AND MORE

CHEAPER INDUSTRIAL DEVICES BECAUSE IT COULD BE A THREAT

NOT ONLY FOR THE E.U., NOT ONLY FOR THE U.S., BUT FOR THE

GLOBAL WORLD ECONOMY, AND WE NEED TO ADDRESS THAT ISSUE.

HAVING SO MANY INDUSTRIAL DEVICES FOR THE GREEN INDUSTRY

AT A VERY CHEAP PRICE ON THE GLOBAL MARKET COULD JEOPARDIZE

THE WHOLE WORLD ECONOMY AND THE GROWTH IN THE WORLD SO THAT IS

WHY WE NEED TO ADDRESS THE ISSUE.

WE NEED TO ENGAGE CHINA, AND WE NEED TO FIND SOLUTIONS.

JOUMANNA: THAT WAS FRENCH FINANCE

MINISTER BRUNO LE MAIRE WITH OLIVER CROOK.

THE YUCAIPA MINISTER, RISHI SUNAK, HAS PUT FORWARD A

PROGRAM OF NATIONAL SERVICE AND ONE OF HIS FIRST -- IN ONE OF

HIS FIRST PLEDGES OF THE ELECTION CAMPAIGN.

LET'S GET MORE FROM OUR MANAGING EDITOR, ADAM.

I THINK MANY PEOPLE WERE SURPRISED TO HEAR ABOUT THIS

ANNOUNCEMENT OVER THE WEEKEND, ESPECIALLY BECAUSE BRITAIN

SCRAPPED MANDATORY NATIONAL SERVICE IN THE 1960'S.

ALSO IN LIGHT OF THE POLLING WHICH SUGGESTS MANY YOUNGER

PEOPLE ARE NOT IN FAVOR OF MANDATORY SERVICE.

SO WHY DOES THE PRIME MINISTER WANT TO REVIVE IT? ADAM:

GOOD MORNING.

THE UNDERLYING FACT HERE IS THAT WE ARE STARTING AN

ELECTION CAMPAIGN. THE ELECTION WAS CALLED LAST

WEEK AND THE CONSERVATIVES UNDER RISHI SUNAK HAVE COME OUT

OF THE GATE WITH WHAT IS THEIR FIRST EYE CATCHING CAMPAIGN

PROMISE AND THE POLLS BEING VERY MUCH SET AGAINST THEM AT

THIS MOMENT. HIS PARTY HAS BEEN TRAILING THE

LABOR OPPOSITION BY AROUND 25 PERCENTAGE POINTS FOR A VERY

LONG TIME NOW IN POLLS AND HE'S TRYING TO NARROW THAT GAP IN

ONE OF THE WAYS TO DO THAT IS TO APPEAL TO SOME OF THE VOTERS

WHO MAY HAVE DRIFTED AWAY FROM HIS CONSERVATIVE PARTY AND HAVE

BEEN ATTRACTED TO A SMALLER, NEWER PARTY, CALLED REFORM.

THE THINKING IS -- THE SUSPICION IS THAT THIS POLICY

IS REALLY AIMED AT BRINGING BACK SOME OF THOSE VOTERS.

OLDER VOTERS WHO HAVE COME OUT MORE STRONGLY IN FAVOR OF A

POLICY LIKE THIS. BUT OF COURSE, THERE'S BEEN

REACTION AGAINST IT ESPECIALLY FROM YOUNG VOTERS.

THERE'S BEEN SCRUTINY OF THE FUNDING, OF HOW IT MIGHT BE

PAID FOR, HOW IT MIGHT BE PUT INTO PRACTICE, AND THE HOME

SECRETARY, JAMES, WHEN ASKED ABOUT THIS ON TELEVISION

YESTERDAY, HE SAID THAT IT IS DIFFICULT TO ENFORCE AND HAVE A

CRIMINAL SANCTION IF YOU DON'T DO IT.

IT IS AN EARLY SKIRMISH IN AN ELECTION CAMPAIGN WHICH HAS

JUST GOT UNDERWAY. IT IS CERTAINLY AN EYE CATCHING

PROMISE BUT IT IS ONE THAT HAS NOT BEEN -- HAD A HOME IN THE

BRITISH NATIONAL PSYCHE FOR MANY DECADES NOW. JOUMANNA:

IT WAS A BIT OF A SURPRISE FRY

THINK MANY PEOPLE OVER THE WEEKEND

TURNING TO THE LABOUR PARTY, THEY HAVE PLEDGED TO REVIEW

PLANS FOR THE U.K. GOVERNMENT TO REDUCE THEIR

STAKE IF THEY WIN THE UPCOMING GENERAL ELECTION.

YOU KNOW, TELL US MORE ABOUT THAT AND WHERE THIS FRAMING IS

COMING FROM. ADAM: WELL, AS EVER WITH THE LABOUR

PARTY AT THE MOMENT, YOU KNOW, WE ARE NOT ABLE TO TALK ABOUT

TOO MANY SPECIFICS.

THEY REMAIN TIGHTLIPPED ABOUT MANY OF THEIR POLICIES.

THEY ARE CULTIVATING A MORE PRO-BUSINESS ATTITUDE THAN IN

YEARS GONE BY AND THAT IS A BIG PART OF THEIR PLEDGE ROSE FOR

THE CAMPAIGN AND FOR HOW THEY SAY THEY WILL GOVERN WHEN THEY

ARE IN OFFICE AND THEY ARE MAKING LOTS OF OUTREACH ON

THOSE LEVELS.

THE STATEMENT YESTERDAY OR BLOOMBERG'S REPORTING LAST

NIGHT AND INTO THIS MORNING IS VERY NEUTRAL AND THERE IS NO

PARTICULAR SENSE -- ALL THEY SAY ON THE RECORD IS LABOR WILL

REVIEW THE DETAILS SO THAT THE GOVERNMENT'S REMAINING STEAK

WAS DUE TO BE PUT OUT FOR SALE I THINK IN JUNE AND THAT IS NOW

THE MIDDLE OF THE ELECTION CAMPAIGN SO THE FUTURE OF WHAT

HAPPENS WITH THAT GOVERNMENT OF COURSE IS STILL THE LARGEST

SHAREHOLDER, SOME 15 OR SO YEARS AFTER THE FINANCIAL

CRISIS SO LABOR WILL REVIEW THAT AND YOU KNOW, I WOULD NOT

WANT TO SPECULATE ENTIRELY ON WHAT THEY WILL DO BUT THE

GOVERNMENT HAS BEEN GENERALLY SELLING DOWN THAT TAKE OVER THE

YEARS AND HELPING TO REDUCE THAT. JOUMANNA:

A BIG ONE FOR INVESTORS AS WELL. THEY HAVE BEEN DOING QUITE WELL

THIS YEAR UP UNTIL THE LAST FEW DAYS. , MANAGING EDITOR.

COMING UP, MARKETS ARE PREPARING FOR THE DAWN OF THE T

PLUS ONE RULE WHICH BEGINS TOMORROW IN THE U.S.

WE WILL BREAK DOWN WHAT THIS MEANS FOR YOU, NEXT.

>> WELCOME BACK TO THE SHOW. WE ARE GETTING SOME BREAKING

NEWS OUT FROM ELON MUSK'S AI SO THE NEWS HAS JUST BEEN REPORTED

NOW SAYING THAT THEY HAVE ANNOUNCED A FUNDING ROUND OF $6

BILLION. ELON MUSK FOLLOWING THAT UP

WITH COMMENTARY SAYING THAT THERE WILL BE MORE TO ANNOUNCE

IN THE COMING WEEKS. SO THAT IS INTERESTING TO NOTE.

INVESTORS INCLUDE SEQUOIA CAPITAL AND FIDELITY AND ALL OF

THIS PART AND PARCEL OF HIS BIG VISIONS FOR AI.

HE HAS BEEN OUTSPOKEN ABOUT ITS PROMISES AS WELL AS ITS

LIMITATIONS, ONE OF THE MAIN PEOPLE IN THE SPACE TALKING

ABOUT THE NEED FOR REGULATION AROUND IT.

THIS AS HE EXPANDS HIS OWN AI CAPABILITIES THROUGH X AI.

THEY ARE GOING TO GO THROUGH A SERIOUS RUN -- FUNDING ROUND OF

$6 BILLION. ELSEWHERE, MARKETS ARE

PREPARING FOR THE DAWN OF THE T PLUS ONE RULE WHICH BEGINS

TOMORROW. IT MEANS U.S. TRADES WILL NOW SETTLE IN ONE

DAY RATHER THAN IN TWO. FOR MORE ON THIS, I'M JOINED BY

BLOOMBERG'S KRITI GUPTA. IN MY PREVIOUS LIFE, I WAS A

BOND GIRL, BOND TRADER, AND BACK THEN, AT TREASURIES DID

SETTLE T PLUS ONE BUT EQUITIES HAVE BEEN TWO PLUS TWO ALL THIS

TIME UNTIL TODAY SO WHY THE CHANGE? KRITI:

THIS IS A LITTLE BIT OF FOAM -- FOMO BUT ALSO PTSD.

WE REMEMBER THE MEAN CRAZE WE SIGNED THE STOCK MARKET.

A LOT OF GLOBAL INVESTORS WERE EXPOSED TO THAT KIND OF

VOLATILITY IN A WAY THEY COULD NOT HANDLE IT WHEN YOU HAVE THE

RETAIL CREW GET IN ON SOME OF THAT VOLUME.

YOU MENTIONED THE BOND MARKET. THE FX MARKET IS STILL EPLUS

TWO SO IT'S NOT JUST THE EQUITY MARKET THAT HAS THIS DELAY BUT

IT IS SPECIFICALLY FOR INTERNATIONAL INVESTORS.

THE IDEA IS TO MAKE IT A LITTLE BIT MORE EFFICIENT SO MAKE SURE

DESPITE ALL OF THE INVESTORS AROUND THE WORLD THAT ARE

EXPOSED TO THE U.S. MARKET, THEY ARE ABLE TO GET

THEIR SETTLEMENTS IN FASTER. RIGHT NOW, IT TAKES UP TO A

WEEK TO ACTUALLY, BETWEEN PUSHING THE BUY BUTTON TO GET

TO THE ACTUAL TRADE AND ULTIMATELY FOR THE SELLER TO

GIVE THAT TRADE UP AS WELL OR GIVE THE SHARE OF THE STOCK

THEY ARE LOOKING AT AS WELL SO FOUR DAYS TO FIVE DAYS TO MAKE

THAT PROCESS GO AND TO MAKE IT A LITTLE BIT MORE EFFICIENT.

THIS WILL NOT ONLY ENTICE MORE INVESTORS TO INVEST IN THE

UNITED STATES BUT ALSO TO MAKE THEIR LIVES AND PERHAPS SOME OF

THE BANKS LIVES A LITTLE BIT EASIER AS WELL. JOUMANNA:

IT'S INTERESTING WHAT YOU ARE SAYING ABOUT HOW LONG IT TAKES

FOR BOTH SIDES OF THE TRADE TO GET ON THAT.

THE STATED PURPOSE IS TO INCREASE EFFICIENCY IN THIS

MARKET BUT COULD IT ALSO INCREASE THE NUMBER OF SALES?

KRITI: IT ABSOLUTELY COULD AND THAT IS

ONE OF THE SCARY PARTS OF THIS. WHY NOT MAKE IT A T PLUS ZERO?

WHY NOT MAKE AN IMMEDIATE SETTLEMENT WITHIN THE UNITED

STATES? BY 4:00 ON THE MARKET CLOSES,

IT IS ALL SETTLED IN DOWN FOR. THE THOUGHT PROCESS IS YOU NEED

A LITTLE BIT OF TIME TO CATCH SOME OF THOSE FAILED TRADES AND

THAT IS KIND OF ONE OF THE NIGHTMARES IN TERMS OF ADOPTING

THIS SYSTEM. IF YOU LOOK OUT THE INDUSTRY IS

SAYING, THERE IS A SPIKE IN THE NUMBER OF FAILED TRADES, AND

THEY ARE SEEING SOME BANKS AROUND THE WORLD REALLY

ACCOMMODATE FOR THIS. CITIGROUP IS JUST ONE BANK THAT

IS ACTUALLY SAYING WE ARE GOING TO MOVE SOME OF OUR STAFF TO

KUALA LUMPUR AND WORK ON A TUESDAY TO SATURDAY SCHEDULE TO

ACCOMMODATE SOME OF THIS LONG-TERM SHIFT.

EVENTUALLY, THE HOPE IS EVERYONE WILL BE ON THE SAME

PAGE BUT THIS IS ALSO STAGGERED BY COUNTRY.

CANADA, FOR EXAMPLE, GETTING ONTO THIS IN THE 28TH.

YOU HAVE THE LIKES OF THE U.K. WHO MAY NOT GET ONTO THIS UNTIL

2027. JOUMANNA: ONE THING THAT I AM THINKING

ABOUT IS THAT IT ALSO MAY CATALYZE AN INCREASED AMOUNT OF

AUTOMATION IN THE SPACE AS WELL TO MITIGATE THE AMOUNT OF HUMAN

CAPITAL THAT IS NEEDED TO MAKE THAT SHIFT.

WHAT ARE MARKETS PARTICIPANTS SAYING ABOUT -- MARKET

PARTICIPANTS SAYING ABOUT THE IMPACT IT WILL HAVE? KRITI:

THEY ARE SAYING THIS MAY NOT BE THE GAME CHANGER GIVEN

AUTOMATION HAS BEEN A LONG TREND BUT THE ADDED COMPONENT

TO THIS IS ALSO THE FX PIECE AS WELL. THIS IS NOT JUST AN EQUITY

MARKET STORY. THE FACT THAT YOU HAVE NOT ONLY

THE ADDITIONAL STEP OF SETTLING THE TRADES BUT THE FACT THAT

YOU HAVE AN ADDITIONAL STEP FOR INTERNATIONAL INVESTORS, MAKING

SURE YOU HAVE THAT DOLLAR, IT CREATES A VERY LONG KIND OF

PACE AND IF WE ARE TALKING ABOUT AUTOMATION, THIS IS WHERE

IT COULD GET EFFICIENT IN THAT ADDITIONAL STEP IN OTHER

MARKETS WHEN YOU LOOK AT CROSS-ASSET CORRELATIONS BUT

RIGHT NOW, YOU AND I BOTH KNOW VERY WELL THAT TRADING IS

CONSIDERED ON THE DECLINE SIMPLY BECAUSE OF THAT THREAT

OF AUTOMATION. THIS MAY NOT NECESSARILY

ACCELERATE IT THOUGH. JOUMANNA: THAT IS A GOOD POINT.

ALSO ANOTHER GOOD POINT WE NEED TO BRING UP IS THAT IT IS A U.S.

BANK HOLIDAY TODAY SO I GUESS ALL OF THESE TRAITS ARE GOING

TO START TRADING WITH TWO PLUS ONE SETTLEMENT AS OF TOMORROW,

SOMETHING WORTH BRINGING TO MIND. KRITI GUPTA, THANK YOU.

PLENTY MORE COMING UP ON OUR SHOW.

WE WILL BE BACK IN JUST A FEW MOMENTS, BUT THIS IS BLOOMBERG.

JOUMANNA:

-- >> WHAT DID WE REALLY RIGHT OVER THE LAST TWO YEARS IS THAT

WE REALLY FOLLOWED THE MEETING TO MEETING HERE, UNDERSTANDING,

AND I BELIEVE THAT SHOULD STILL BE THE CASE SO IF THERE IS A

RATE CUT IN JUNE, WE HAVE TO WAIT, AND I BELIEVE WE HAVE TO

WAIT UNTIL MAYBE SEPTEMBER. I THINK JULY. BUT ASSESS IT.

IT IS TOO EARLY TO SPECULATE. JOUMANNA:

THE BUNDESBANK PRESIDENT THERE. LET'S TAKE A LOOK AT HOW ECB

RATE EXPECTATIONS HAVE EVOLVED OVER THE LAST COUPLE MONTHS AND

YOU CAN SEE FROM THIS TERMINAL CHART BACK AT THE BEGINNING OF

THE YEAR, THE EXPECTATIONS THAT THEY WOULD BE CUTTING SOONER

AND FASTER. NOW, WE ARE SEEING THE FIRST

CUT IS PRETTY MUCH PRICED IN FOR AROUND JUNE AND THE SECOND

CUT HAPPENING AROUND SEPTEMBER AND OF COURSE, MANY OF THEM

SAYING THEY WILL HAVE TO TAKE A MEETING BY MEETING APPROACH AND

NOT NECESSARILY CUT AT EVERY SUBSEQUENT MEETING SO EVEN

THOUGH THE FIRST CUT IS PRICED IN STILL FOR JUNE, SUBSEQUENT

RATE CUTS ARE NOW A BIG QUESTION OVER THEM.

THE OTHER CHART WE ARE WATCHING ON THE BACK OF SOME COMMENTARY

WE GOT FROM CHRIS WALLACE OVER THE WEEKEND.

HE WAS TELLING MARKET PARTICIPANTS THAT IF YOU WANT

TO GET AN IDEA OF WHERE THAT MUTUAL RATE FOR THE U.S.

IS OVER THE LONG-TERM, YOU MIGHT AS WELL TAKE A LOOK AT

WHERE 10 YEAR YIELDS ARE TRADING.

THE LONG-TERM RATE IS SOMETHING TO BEAR IN MIND GIVEN THAT

COMMENTARY BUT PLENTY MORE IN OUR COVERAGE OF SOUTH AFRICA'S

ELECTIONS THROUGHOUT THE PROGRAMMING TODAY.

WE SPEAK TO THE CAPE TOWN MAYOR AT 7:30 U.K.

TIME, AND PATRICIA, THE TOURISM MINISTER AND LEADER OF THE GOOD

PARTY AT 9:30 U.K. TIME. LATER, YOU DON'T WANT TO MISS

OUR INTERVIEW WITH THE PRESIDENT OF THE INSTITUTE.

THAT IS AT 9:20 AM, U.K.