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• 00:00TOM: I’M TOM MACKENZIE IN LONDON, THESE ARE THE STORIES THAT SET YOUR AGENDA. PARTIAL TRUTHS. THE U.S. AS RUSSIA AND UKRAINE HAVE AGREED TO A CEASE-FIRE IN THE BLACK SEA ENSURING SAFE NAVIGATION ON SHIPPING ROUTES, BUT THE KREMLIN SAYS A DEAL DEPENDS ON SOME SANCTIONS RELIEF. U.S. COPPER FUTURES SURGE ON A BLOOMBERG REPORT THAT PRESIDENT TRUMP COULD SLAP IMPORT DUTIES ON THE METAL WITHIN WEEKS. THE PRESIDENT ALSO SAYS HE WANTS TO LIMIT EXEMPTIONS ON RECIPROCAL TARIFFS. PLUS, THE U.K. CHANCELLOR LOOKS TO CUT BILLIONS AND SPENDING AS THE GOVERNMENT FACES GLOBAL HEADWINDS AND CRITICS WITHIN ITS OWN PARTY. WE LOOK AHEAD TO RACHEL REEVES SPRING STATEMENT. TOM: GOOD MORNING, HAPPY WEDNESDAY. EUROPEAN FUTURES LOOKING FOR DIRECTION AFTER POSTING GAINS OF AROUND ZERO POINT 7% YESTERDAY. FTSE 100 FUTURES IN THE U.K. ON A DAY WHERE OF COURSE THE CHANCELLOR WILL BE IN THE SPOTLIGHT AROUND THE SPRING STATEMENT, CURRENTLY FLAT AS WELL FOR FTSE 100 FUTURES, THERE’S A FOCUS ON CPI, THAT DATA CROSSING AT 7:00 A.M. U.K. TIME, WE WILL BREAK THAT FOR YOU WITH THAT EXPECTATION A TOPLINE NUMBER WILL COME IN AT 3%. S & P FUTURE STATE SITE AFTER THREE DAYS OF GAINS FOR U.S. STOCKS ENDED UP 0.2% BY THE END OF THE CARLOADS. FLAT POINTING TO THE MODEST LOSSES. ABOUT .1% FOR THE S & P FUTURES. NASDAQ 100 FUTURES AFTER DECENT GAINS OF .5% BY THE END OF THE CLOSE PUTTING LOWER BY 28 POINTS. LET’S FLIP THE BOARD AND HAVE A LACROSSE ASSET, THE CONSUMER DATA OUT OF THE U.S. IN TERMS OF THE CONSUMER SENTIMENT SURVEY POINTING TO A SIGNIFICANT SLOWDOWN FOR THE MONTH OF MARCH. THE LOWEST AND BIGGEST DROP THAT WE’VE SEEN IN ABOUT FOUR YEARS AND THAT DOES REMIND US THE CONSUMERS IN THE U.S. ARE CONCERNED ABOUT THE TARIFF IMPACTS, THEY ARE CONCERNED ABOUT HIGHER PRICES, 433 ON THE BENCHMARK U.S. 10 YEAR. YIELDS MOVING TO BASIS POINTS ON THE SESSION. THE POUND AND FOCUS AHEAD OF THE SPRING STATEMENT BUT PRIOR TO INFLATION STATEMENT, THE U.K. 129 AND THE POUND DOWN POINT 10%. COPPER, THIS IS THE LISTING PRICING ON THE EXCHANGE IN THE U.S., UP 1.5% OF THE SESSION. DIVERGING SIGNIFICANTLY FROM THE BENCHMARK PRICING HERE ON THE LME AND THE U.K. THIS ON THE TARIFF STORY BUT ALSO ON BLOOMBERG REPORTING ABOUT GLENCORE RESTRICTING WERE AT LEAST TEMPORARILY SUSPENDING SOME EXPORTS FROM THE MARKET IN CHILE. BRENT AT 73 30, CURRENTLY ON OIL UP .4%. LET’S CHECK IN ON THE ASIAN MARKETS FOR YOU TODAY AS WELL, THE BENCHMARK MSCI ASIA-PACIFIC INDEX CURRENTLY UP .3 PERCENT. A LITTLE BIT OF A REVIVAL IN THOSE SPIRITS WHEN IT COMES TO WHAT’S HAPPENING IN CHINA ON THE HSTECH INDEX, TECH AND FOCUS, A DEAL BETWEEN ALIBABA AND B & W AROUND IN AI. HSTECH UP 1% AFTER SOFTNESS YESTERDAY, CSI 300 AND THE MAINLAND DOWN .10%. THE NIKKEI GAINING. LET’S GET TO THE GEOPOLITICS, THE FOCUS ON TALKS BETWEEN RUSSIA-UKRAINE AND U.S. BECAUSE THE U.S. SAYS RUSSIA AND UKRAINE HAVE AGREED TO A CEASE-FIRE IN THE BLACK SEA, THE KREMLIN CONFIRM THE TRUCE BUT SAYS IT IS CONDITIONAL ON LIFTING SANCTIONS. THIS GET THE DETAILS WITH BLOOMBERG’S OLIVER CROOK, WHAT EXACTLY WAS AGREED TO BETWEEN THESE THREE SIDES WHEN IT COMES TO THIS PARTIAL, PARTIAL CEASE-FIRE IN THE BLACK SEA? OLIVER: LET’S GET TO THE THEORY OF WHAT’S BEEN AGREED TO HEAR BECAUSE OBVIOUSLY FOR THE UNITED STATES, WHOSE TRYING TO ENCOURAGE YOU GET BOTH OF THESE PEOPLE, THE RUSSIAN AND UKRAINIAN SIDE OF THE TABLE TO GET INCREMENTAL STEPS TO THE FULL CEASE-FIRE, THIS WILL BE ANOTHER STEP. THIS IS THE ENFORCEMENT OF THE ENERGY CEASE-FIRE THAT HAD ALREADY BEEN AGREED TO A LITTLE BIT ABOUT A WEEK AGO WERE BASICALLY THERE IS NO MORE STRIKING ON ENERGY INFRASTRUCTURE, BUT THE IDEAS TO RESTORE COMMERCIAL SHIPPING WITHIN THE BLACK SEA IN ORDER TO BASICALLY TRY TO NORMALIZE THAT SITUATION FURTHER. THE ISSUE IS THAT WE HAD BASICALLY FOUR DIFFERENT STATEMENTS OUT FROM THESE. TWO FROM THE WHITE HOUSE, ONE FROM RUSSIA AND ANOTHER ONE FROM ITS MEETING WITH UKRAINE. THERE KREMLIN AND UKRAINIAN STATEMENT, AND THEY DON’T ALL TOTALLY ALIGNED. THIS IS WHAT WE HEARD FROM THE UNITED STATES SAYING THAT BASICALLY THEY WILL HELP THE RUSSIANS RESTORE ACCESS TO THE WORLD MARKET FOR AGRICULTURE AND FERTILIZER EXPORT TO LOWER MARITIME INSURANCE COSTS. THESE ARE BASICALLY ABSTRACT AMBITIONS, WAYS THAT WILL HELP THE RUSSIANS GET BACK TO THE MARKET. WE SAW THE KREMLIN STATEMENT ON THE OTHER HAND, THEY SAID THEY WILL AGREE TO THE SITUATION IN THE BLACK SEA AND THIS PARTIAL CEASE-FIRE, ONLY IF THERE IS A LIFTING OF SANCTIONS, REMOVAL OF SANCTIONS ON FINANCIAL INSTITUTIONS INVOLVED IN ENSURING INTERNATIONAL FOOD TRADE, THEIR RECONNECTION’S FOR FINANCIAL INSTITUTIONS IS SWIFT. WE REMEMBER THE SWIFT PAYMENT SYSTEM IS AT THE CENTER OF THE PAYMENT REGIME AGAINST THE RUSSIANS. REMOVING SANCTIONS ON RUSSIANS PRODUCING FOODS. REMOVING SANCTIONS ON ANY SHIPS THAT ARE FLYING THE RUSSIAN FLAGS THAT ARE INVOLVED IN THESE SORT OF FOOD TRADES. SO THE NEXT QUESTION WILL BE, BASICALLY HOW MUCH DAYLIGHT IS THERE, AGAIN, WE DON’T KNOW THE ANSWER THE QUESTION BETWEEN HOW TRUMP SEES THINGS AND PUTIN SEES THINGS BECAUSE THE TRUMP ADMINISTRATION HAS BEEN ACTIVE IN SAYING THIS CEASE-FIRE IS EFFECTIVELY AGREED TO AT THE HIGHEST LEVEL, THEY JUST NEED TO WORK OUT THE DETAILS. AS WE GET CLOSER TO THE NITTY-GRITTY OF WHAT’S BEING AGREED TO IN THESE CONVERSATIONS, HOW ENFORCEABLE THEY ARE WILL BE THE PRINCIPAL QUESTION GOING INTO A FULL CEASE-FIRE, WHICH THE TRUMP ADMINISTRATION WOULD LIKE TO REACH BEFORE APRIL 20, WHICH SEEMS VERY AMBITIOUS TO MANY OF THE OBSERVERS FROM UKRAINE AND EUROPE. TOM: TRUMP HIMSELF IN AN INTERVIEW YESTERDAY CONCEDING THAT POSSIBLY THE RUSSIAN PRESIDENT IS SLOW WALKING NEGOTIATIONS. WHAT ARE THE NEXT STEPS FROM HERE? OLIVER: THAT INTERVIEW WAS SORT OF INTERESTING, BUT I THINK THE NEXT STEPS IS BASICALLY TO SEE WHAT THE COMMENTARY IS FROM THE UNITED STATES AS TO WHETHER OR NOT THIS IS BASICALLY WHAT THEY’VE AGREED TO WITH THE RUSSIANS. THIS A BIG QUESTION OF ENFORCEABILITY IF YOU START TO SORT OF HAVE RUSSIAN SHIPS FLYING THEIR FLAG, ARE THEY BASICALLY ONLY CARRYING FOOD SUPPLIES AT FERTILIZER, HOW DO YOU BASICALLY ENFORCE THAT? THE TRUMPET MINISTRATION WANTS AT FULL CEASE-FIRE BY JANUARY THE 20TH. AS YOU MENTION HE WAS ON NEWSMAX TALKING ABOUT HE HAS BEEN IN SIMILAR POSITIONS AT DEALS IN REAL ESTATE WHERE HE DOESN’T REALLY WANT TO SIGN THE CONTRACT BUT WANTS TO STAY INTO THE GAME AND HE SAYING THAT THAT’S MAYBE WHAT RUSSIA IS BASICALLY DOING. OUR ATTENTION AS FAR AS EUROPE IS CONCERNING AS THIS EU EMERGENCY LEADERS MEETING THAT IS GOING ON IN PARIS TOMORROW. THE REASON EUROPE IS NOW BECOMING A LITTLE BIT MORE RELEVANT IN THESE CONVERSATIONS IS THAT IF SWIFT RECONNECTION IS ON THE TABLE, THIS IS PART OF THE EUROPEAN SANCTION REGIME SO THEY HAVE TO DISCUSS IT. BUT FOR EUROPEANS THAT MADE EVENT WILL BE DISCUSSING WHAT THEY ARE WILLING TO PUT FORWARD IN THE SECURITY GUARANTEES AND DURABLE CEASE-FIRE FOR THE RUSSIANS AND UKRAINIAN DEAL STILL FOR DONALD TRUMP, WHICH IS THE PRINCIPAL QUESTION FOR EUROPEAN LEADERS, WHAT CAN THEY BRING TO THE TABLE? TOM: SOME PROGRESS WITH A LOT OF DETAILS THAT STILL NEED TO BE IRONED OUT. BLOOMBERG’S OLIVER CROOK WITH THE LATEST ON THE UPDATE, THANK YOU. U.S. PRESIDENT DONALD TRUMP PLANS TO LIMIT EXCEPTIONS TO HIS TARIFF PUSH. IT IS THE LATEST CRYPTIC HINT ABOUT A PLAN APRIL THE SECOND ANNOUNCEMENT OF RECIPROCAL DUTIES ON GLOBAL TRADING PARTNERS. THIS IS NOW A DAILY EVENT. FOR MORE ON THIS THAT SPRING AND BLOOMBERG’S VALERIE TYTEL WHO ON A DAILY BASIS AS CHARTS THE MARKET REACTION TO THE TRUMP TEAR FREDERICK. VALERIE, HOW ARE MARKETS POSITION TODAY ON THE LATEST COMMENTARY FROM THE MARKETS? VALERIE: THERE IS A LOT OF CONFUSION, WILL THESE TARIFFS BE LIMITED, WILL THEY BE LENIENT, WILL THEY BE RECIPROCAL OR LESS THAN THAT, A LOT OF CONFUSION, BUT IT NEEDS TO BE SAID IT HAS NOT BEEN RALLYING THE EQUITY MARKET IN THE LAST FEW SESSIONS. THE S & P 500 HAS CLOCKED THREE STRAIGHT DAYS OF GAINS, SOMETHING WE HAVE NOT SEEN FOR THE INDEX SINCE EARLY’S FEBRUARY. WRIST SENTIMENT IS ON A BETTER FOOTING. WE WERE READING THROUGH ALL OF THESE COMMENTS FROM THE TRUMP ADMINISTRATION WAITING FOR THE APRIL 2 IMPLEMENTATION INSTEAD. ONE OTHER THING THAT THE U.S. EQUITY MARKET SHRUGGED OFF YESTERDAY WAS THE CONSUMER CONFIDENCE MISS, THERE WAS A MESS WHEN IT CAME TO THE CONSUMER BOARD CONSUMER CONFIDENCE HEADLINE NUMBER, ALSO LOOK AT THE SIX-MONTH FORWARD EXPECTATION NUMBER THAT’S AT THE LOWEST LEVEL IN 12 YEARS, BUT THE MARKET HAS SHRUGGED THIS OFF, I THINK IT’S TELLING US WE KNOW CONSUMER CONFIDENCE IS LOW, BUT WE NEED TO SEE IT IMPACT CONSUMER SPENDING UNTIL WE START GETTING WORRIED ABOUT THE OUTLOOK FOR THE EQUITY MARKET. WE DO GET THAT CONSUMER SPENDING DATA, PERSONAL SPENDING DATA ON FRIDAY. HOLD FIRE FOR THAT ONE. THE EQUITY MARKET NOT TOO RATTLED. ONE MARKET THAT IS BEING RATTLED BY THE RECENT COMMENTS FROM THE TRUMP ADMINISTRATION IS THE COPPER MARKET. BLOOMBERG HAS REPORTED THAT THE TRUMP ADMINISTRATION IS LOOKING AT COPPER TARIFFS TO IMPLEMENT THEM IN A MATTER OF WEEKS. WE ARE NOW SEEING THIS DIVERGENCE IN BETWEEN CO. MEXICO, COPPER AND LME COPPER AS CO-MAKES COPPER HIT A NEW RECORD HIGH OVERNIGHT. THIS IS SOMETHING THAT IS VERY UNUSUAL FOR THE COPPER MARKET AS WE SEE TRADERS TRYING TO SCRAMBLE IN SOME WAY TO IMPORT COPPER BEFORE THESE TARIFFS ARE IMPLEMENTED. TOM: UNPRECEDENTED DIVERGENCE IN TERMS OF PRICING ON THE CO-MAKES EXCHANGE THEM U.S. AND LME IN LONDON. BLOOMBERG VALERIE TYTEL, THANK YOU ON TARIFFS AND COPPER. NOW TO THE U.K., CHANCELLOR RACHEL REEVES DO TO UNVEIL THE U.K. SPRING ECONOMIC STATEMENT TODAY. SHE’S EXPECTED TO CUT GOVERNMENT SPENDING BY BILLIONS OF POUNDS IN THE FACE OF HIGHER BORROWING COSTS, AND A WEEKEND OUTLOOK SINCE HER OCTOBER BUDGET. BLOOMBERG’S LIZZY BURDEN AT WESTMINSTER FOR US. THERE’S BEEN A LOT OF DRUMBEAT LEADING UP TO THIS STATEMENT, JUST FRAME THE IMPORTANCE FOR THIS POLITICALLY AND ECONOMICALLY FOR THIS NATION. > > GOOD MORNING, TOM. THIS IS NOT WHAT RACHEL REEVES WOULD’VE LIKED TO BE DOING TODAY. IF YOU’RE UP TO HER, WE WOULD ONLY HAVE ONE FISCAL EVENT A YEAR, AND THIS TODAY WOULD JUST BE A ROUTINE UPDATE TO THE OFFICE FOR BUDGET RESPONSIBILITIES FORECAST. BUT, BECAUSE OF THE SLUGGISH GROWTH IN THE U.K. ECONOMY, WHICH SHE WOULD BLAME ON GLOBAL FACTORS, IN OTHER WORDS, DONALD TRUMP’S TRADE WAR AND THE LEGACY FROM THE CONSERVATIVES, AND BECAUSE OF THE RISE IN GOVERNMENT BORROWING COSTS, IN OTHER WORDS THIS RISE IN GILT YIELD SINCE THE START OF 20 25, WHATEVER HEADROOM RACHEL REEVES LEFT HER SELF AFTER THE OCTOBER BUDGET, 9.9 BILLION POUNDS, WHICH BY THE WAY WAS THE THIRD SMALLEST HEADROOM IN HISTORY, APPEARS NOW TO HAVE BEEN WIPED OUT, SO THAT’S WHY THE CONSERVATIVES, THE OPPOSITION ARE BRANDING THIS AS AN EMERGENCY BUDGET, BUT OF COURSE RACHEL REEVES SET HER FISCAL RULES ARE NONNEGOTIABLE. THERE WON’T BE ANY MORE TAX RISES. SHE DID THAT IN THE OCTOBER BUDGET. SO IT LOOKS LIKE THE MONEY WILL COME FROM SPENDING CUTS, WHICH IS PRETTY AWKWARD BECAUSE SHE’S ALSO, YOU REMEMBER, SAID THERE WOULDN’T BE AUSTERITY. TOM: FROM THE LABOR GOVERNMENT, UNCOMFORTABLE FOR BACK BENCHES. AT THE VERY LEAST SOME OF THE CABINET. WHERE WILL SHE FIND THE REVENUE, WHERE WILL SHE BE DIGGING BEHIND THE SOFA FOR ADDITIONAL REVENUE? > > OUR ECONOMISTS CALCULATE SHE’S GOT FIND 17 BILLION POUNDS. WE ALREADY KNOW THAT SHE’S GOING TO CUT WELFARE BY 5 BILLION POUNDS. THERE’S BEEN SOME ACCOUNTING WIZARDRY AND THAT THEY HAVE CUT THE AID BUDGET TO FUND DEFENSE, BUT THAT COUNTS BY HER RULES AS INVESTMENTS, SO THAT GIVES HER 2.4 BILLION POUNDS, THAT LEAVES 10 BILLION POUNDS THAT WILL HAVE TO BE SHAVED OFF DEPARTMENTAL BUDGETS, DAY-TO-DAY SPENDING, AND WE WILL FIND OUT WHAT THE TOTAL OF THAT IS BUT WILL FIND OUT WHICH DEPARTMENTS WILL FEEL THE PINCH UNTIL THE SPENDING REVIEW THAT COMES IN JUNE. WE’VE TALKED ABOUT HOW POLITICALLY DIFFICULT THIS IS, WE CAN COME BACK TO THAT, BUT REALLY, ON A BIG PICTURE LEVEL, THIS HEADROOM, WHATEVER SHE LEAVES YOURSELF TODAY COULD BE WIPED OUT AGAIN BY THE OCTOBER 2020 FIVE BUDGET, GIVEN THE GLOBAL INSURGENCY, YOU KNOW THAT WE’VE GOT TRUMP’S LIBERATION DAY ON APRIL THE SECOND, ALL THESE TARIFFS COMING INTO PLAY. YES, THE U.K. MIGHT NOT BE DIRECTLY IN THE FIRING LINE BUT IT COULD BE IN THE CROSSHAIRS OF THE RETALIATION, AND THAT COMES INTO FORCE JUST DAYS AWAY FROM THE PAYROLL TAX HIKE THAT REEVES ANNOUNCED BACK IN OCTOBER, SO BY LATER THIS YEAR IT COULD BE THAT REEVES HAS TO COME BACK WITH ANOTHER BUDGET, AND WHEN I SPOKE TO HER LAST WEEK, SHE WAS NOT APOLOGETIC ABOUT HER PREVIOUS TAX RISES. JUST COMING BACK TO THE POLITICS, YOU MENTION HOW THERE IS JUST QUIET, NOT JUST AMONG THE BACK BENCHES, THE LEFT WING OF HER PARTY, BUT ALSO IN THE CABINET, I WOULD SAY, LOOK, THE TROUBLE IS, AND THIS IS A CHANCELLOR I’VE BEEN INTERVIEWING SINCE BEFORE SHE TOOK OFFICE EAR, THIS IS SOMEBODY WHO HAS BEEN WATCHING THE LIZ TRUSS DEBACLE WITH FEAR. SHE DOES NOT, RACHEL REEVES, WANT TO UPSET THE BOND VIGILANTES TODAY, AND IT MAY BE SHE’S MORE AFRAID OF THEM THAN SHE IS OF THE LEFT WING OF HER PARTY. TOM: THAT IN THE CONTEXT OF THE 10 YEAR YIELD TO THE U.K. GILTS UP ABOUT .10 PERCENT SINCE SEPTEMBER. BLOOMBERG’S LIZZY BURDEN IN WESTMINSTER WITH A PREVIEW. WE WILL HAVE SPECIAL COVERAGE OF COURSE OF THE CHANCELLOR’S SPRING STATEMENT TODAY FROM 12:15 P.M. U.K. TIME, SUBSCRIBERS WILL ALSO BE ABLE TO WATCH ON THE TERMINAL AND WE WILL BE LIVE STREAMING OUR COVERAGE ON YOUTUBE. COMING UP, HSBC DOUBLES DOWN ON ASIA AND THE MIDDLE EAST. WE WILL SPEAK EXCLUSIVELY WITH THE BENGS HEAD OF EUROPE AND AMERICA SPANKING AT THE LENDERS GLOBAL INVESTMENT SUMMIT IN HONG KONG. THAT’S COMING UP. TOM: BLOOMBERG ANALYSIS FOUND SHAWNEE — CHINESE BANKS ARE SNAPPING UP BANKERS THAT WERE LAID OFF FROM WALL STREET FIRMS IN HONG KONG REVERSING A TREND FROM PREVIOUS YEARS. AROUND 40 BANKERS HAVE JOINED IN THE LAST 12 MONTHS. HSBC IS DOUBLING DOWN ON OPERATIONS IN ASIA AND THE MIDDLE EAST. THAT’S CROSSOVER RIGHT NOW TO THE BLOOMBERG’S REBECCA CHOONG WILKINS WHO STANDS BY FOR US AT THE HSBC GLOBAL INVESTMENT SUMMIT WITH ANOTHER VERY SPECIAL GUEST. REBECCA? REBECCA: THANK YOU SO MUCH, WE ARE HERE LIVE AT HSBC SUMMIT. ANNA WE ARE SPEAKING WITH HSBC’S EUROPE — EXCUSE ME, EUROPE AND AMERICA SPANKING HEAD. SUCH A PLEASURE TO HAVE YOU HERE WITH US. I KNOW YOU THROUGH AND THROUGH AS A CREDIT AND PRIVATE CREDIT GURU. TRENDS YOU’RE EXPECTING A SEE THROUGH THIS YEAR, ARE WE GOING TO SEE THAT SORT OF UNCERTAINTY RESOLVE ITSELF IN ANY WAY? > > SURE, THE YEAR STARTED OUT IN UNBELIEVABLE FORM, WE ARE COMING OFF OF 2024, WHICH WAS AN ALL-TIME RECORD YEAR IN THE CREDIT MARKETS FOR NEW ISSUANCE, AND TWO THINGS HAPPEN. WE HAD A HUGE AMOUNT OF VOLATILITY A LEAK — IN THE EQUITY MARKETS. MOST RECENTLY OFF OF TRUMPS COMMENTS ON MARCH 10 AROUND THE POTENTIAL FOR A RECESSION IN THE U.S. AND NOT PUTTING THAT AWAY IN THE WAY YOU WOULD’VE EXPECTED THEM TO. THAT SORT OF REACTION HAS FLOWN THROUGH THE CREDIT MARKETS IN THE FORM OF REDUCING APPETITE IN THE IMMEDIATE TERM FOR SOME OF THE MOST RISKING CREDITS. WHAT WE ARE FINDING IS THAT THE MARKET, WHICH STARTED OUT WITH ABOUT 65% OF THE MARKET TRADING ABOVE PAR IN JANUARY, THAT HAS COME DOWN TO ABOUT 15%. SO, THE WAVE OF REPRICING’S THAT WE HAVE SEEN HAS NOW COME THROUGH THE SHOOT, AND THE MARKET HAS FOUND A GOOD, STEADY LEVEL OF ISSUANCE WERE CREDITS AVAILABLE IN SIZE FOR TRANSACTIONS AT THE MARKETS ARE WILLING TO ABSORB, AND WE FEEL VERY OPTIMISTIC ABOUT REMAINING OPEN FOR THE REST OF THE YEAR. REBECCA: ONE UNEXPECTED CHALLENGE THIS YEAR, WE STARTED THE YEAR THINKING ESSENTIALLY PRESIDENT TRUMP WOULD UNLEASH GLOBAL DEALMAKING WITH THIS DEREGULATION PUSH, INSTEAD THE TERROR OF CONCERN HAS REALLY BEEN VERY PROMINENT, WHAT I’VE HEARD A LOT FROM INVESTORS HERE IS THE ISSUE OVER INSURGENCY. I GUESS I WANT TO ASK, HOW LONG DO YOU THINK THAT IT TAKES TO RESOLVE SOME OF THAT? WHAT IS IT THAT THE MARKETS REALLY NEED TO SEE HER? > > NOTWITHSTANDING THAT UNCERTAINTY, WE ARE SEEING A MEANINGFUL UPTICK IN M & A SUPPLY COME THROUGH THE CREDIT MARKETS. WE HAVE A LINE ASIDE ON 20 BILLION OF ISSUANCE IN THE NEXT COUPLE WEEKS COMING THROUGH THE MARKET. WHY ANIMAL SPIRITS ARE NOT FULLY BACK, WE ARE IN A MUCH BETTER POSITION THIS YEAR VERSUS LAST YEAR AND ANNOUNCED M & A BEING UP ABOUT 13% YEAR-OVER-YEAR. THAT COMBINED WITH THE POSITIVE TONE AND THE CREDIT MARKETS WILL CONTINUE TO BE ABLE TO GET THIS. AS TO WHAT EXACTLY IS THE MOMENT THAT WILL SIGNAL TOTAL CLARITY ON TARIFFS AND GEOPOLITICS, I THINK THAT WILL REMAIN UNCERTAIN, OBVIOUSLY WE ARE ALL LOOKING FORWARD TO APRIL 2 TO SEE WHAT THE TRUMP ADMINISTRATION ANNOUNCES ON THE DAY, BUT FOR THE MOST PART, I THINK WHAT WE ARE SEEING IN THE CREDIT MARKETS IS RELATIVELY ACCOMMODATIVE CONDITIONS. THE EQUITY MARKETS HAVE BEEN A DIFFERENT STORY. CREDIT MARKETS REMAIN VERY HEALTHY. REBECCA: HSBC IS KNOWN AS THE’S DEBT UNDERWRITING POWERHOUSE. HOW ARE YOU VIEWING RISKS AROUND PRIVATE CREDIT, ARE THEY –, ARE THEY SHIFTING? > > PRIVATE CREDIT IS UNDERTAKING BY THE LARGEST PLATFORMS IN THE WORLD THAT ARE SOME OF OUR BIGGEST CLIENTS. SO WE SUPPORT THEIR ORIGINATIONS AND PRIVATE CREDIT THROUGH FINANCING FOR THEIR PLATFORMS. AND FOR US, THAT SOME OF THE BEST RISK-ADJUSTED CONCERN IN BANKING RIGHT NOW. SO OUR SUPPORT FOR THOSE PLATFORMS ALLOWS THEM TO CONTINUE TO DEPLOY CREDIT THAT HAS, FOR THE MOST PART, MOVED OUTSIDE OF THE BANKING SYSTEM EITHER BECAUSE IT’S HIGHER LEVERAGE ARE HIGHER RISK THAN OUR REGULATORS WANT US TO TAKE ON. WE VIEW THAT AS SORT OF HAVING ACHIEVED AN EQUILIBRIUM OR BOTH PRIVATE CREDIT AND BANK CREDIT CAN THRIVE. ONE OF THE THINGS WE ARE SEEING COMING THROUGH THE SYNDICATED LOAN MARKETS NOW ARE TRANSACTIONS THAT HAD BEEN EXECUTED IN PRIVATE CREDIT FORMAT OVER THE LAST COUPLE OF YEARS WITH CONDITIONS IN THE SYNDICATED MARKET WEREN’T QUITE SO HEALTHY, NOW IT’S COMING BACK THROUGH TO THE SYNDICATED MARKETS BECAUSE — AND WE BELIEVE BOTH WILL AND CAN CONTINUE TO COEXIST. REBECCA: THE OTHER BIG PUSH HAS BEEN FOR BANKING INNOVATION. I’M CURIOUS WHAT YOUR AMBITIONS ARE, IN ASIA SPECIFICALLY ON WHAT SOME OF THE CHALLENGES ARE. > > INNOVATION BANKING WE ARE YEAR INTO THE INNOVATION BANKING PROPOSITION FOR HSBC. IT’S BEEN A RESOUNDING SUCCESS. IT’S LED GLOBALLY BY DAVE SAVO. WE ARE EXTREMELY EXCITED ABOUT THE EFFORT THAT WE HAVE AGAINST WHAT IS THE FULL ECOSYSTEM OF CLIENTS AND PARTNERS IN THE INNOVATION SPACE. WE COVER EVERYONE FROM THE FOUNDERS, THE LPS, THE GPS, THE FUNDS THEMSELVES AN END TO END FOR THE OPPORTUNITY SET SO THAT WE CONSIDER OURSELVES A PARTNER FOR THE CLIENT THROUGH THE ENTIRE LIFECYCLE. WE ARE ABLE TO PLUG INTO WHAT THEY OPERATE. WE COVER 90% OF ALL THE CAPITAL FLOWS IN THE WORLD THROUGH OUR NETWORK AND ARE ABLE TO, THROUGH THAT, REALLY CREATE SCALE FOR THESE COMPANIES FASTER THAN ANYONE ELSE THAT THEY HAD PREVIOUSLY WORKED WITH. SO WE ARE FINDING WE ARE REALLY ATTRACTIVE PARTNER FOR THEM AS THEY TRY TO GROW AND SCALE THEIR BUSINESSES. LAST, IN TERMS OF GLOBAL CAPITAL FLOWS, OUR CEO HIGHLIGHTED IN THE OPENING REMARKS THAT OF THE 20 BIGGEST QUARTERS FOR FINANCIAL FLOWS, 16 OF THE FASTEST GROWING ARE EITHER INTRA-ASIA OR BETWEEN ASIA AND THE MIDDLE EAST, AND 13 OF THE LARGEST ARE EITHER INTRA-ASIA OR IN BETWEEN ASIA AND THE MIDDLE EAST. AND WE ARE SEEING THAT PLAY THROUGH INNER INNOVATION ECOSYSTEM. REBECCA: WE HAVE 30 SECONDS OR LESS. I KNOW YOU HAD THIS GOOD WINDOW INTO U.S. CORPORATE’S INTO CHINA, SO I’M THINKING ABOUT CAPITAL FLOWS HERE, OBVIOUSLY IT’S BEEN TOUGH IN TERMS OF FBI, WHAT YOU EXPECTING FOR 2025? > > FOR ALL THE NOISE ASIA REMAINS THE PRICE FOR OUR CLIENTS. THE CLIENTS THAT ARE HEADQUARTERED IN THE U.S. ARE NOT DOING BUSINESS IN CHINA ARE FIGHTING THAT CONDITIONS ARE IMPROVING STEADILY. WE SEEN A NUMBER OF NEW MEASURES COMING OUT OF THE GOVERNMENT. A 30 POINT PLAN TO SUPPORT CONSUMER SPENDING AND TO TRY TO STABILIZE THE WEALTH EFFECT BOTH THROUGH THE MARKET AND THROUGH THE REAL ESTATE MARKETS. I THINK BUT WE ARE STARTING TO SEE OUR STABILIZATION AND BROAD COLLECTION OF THE MARKET AND GROW FROM THERE. SO WE REMAIN OPTIMISTIC. REBECCA: A PLEASURE TO HAVE YOU. THAT’S HEAD OF EUROPE THAT AMERICA IS AT HSBC. TOM, BACK TO YOU. TOM: GREAT CONVERSATION, ASIA REMAINS A PRICE FOR OUR CLIENTS. REBECCA’S — BLOOMBERG’S REBECCA CHOONG WILKINS SPEAKING WITH HSBC AND AMERICA’S BANKING HAD AT THE BANK INVESTMENT SUMMIT IN HONG KONG. PRESIDENT TRUMP ANNOUNCED AN INVESTIGATION INTO HOW A JOURNALIST WAS ADDED TO A TEXT GROUP WITH TOP OFFICIALS. WE WILL GET THE LATEST ON THAT CONTROVERSY NEXT. THIS IS BLOOMBERG. TOM: WELCOME BACK TO BLOOMBERG DAYBREAK: EUROPE. OTHER NEWS MAKING HEADLINES IS WEDNESDAY, PRESIDENT TRUMP HAS ANNOUNCED AN INVESTIGATION INTO HOW A JOURNALIST WAS ADDED TO A TEXT GROUP OF TOP U.S. OFFICIALS DISCUSSING PLANS FOR MILITARY STRIKES IN YEMEN. HE EXPRESSED SUPPORT WITH NATIONAL SECURITY ADVISOR MICHAEL WALTZ AND SUGGESTED PROCEDURES MIGHT NOT CHANGE DURING THE AFTERMATH WITH A CRIMINAL INVESTIGATION UNLIKELY. WALTZ SAYS HE TAKES FULL RESPONSIBILITY. > > WE ARE GOING TO GET TO THE BOTTOM OF IT. I JUST TALKED TO ELON ON THE WAY HERE. WE’VE GOT THE BEST TECHNICAL MINDS LOOKING AT HOW THIS HAPPENED, BUT I CAN TELL YOU FOR 100%, I DON’T KNOW THIS GUY, I KNOW HIM BY HIS HORRIBLE REPUTATION AND HE REALLY IS A BOTTOM SCUM OF JOURNALIST, AND I KNOW I’M IN THE SENSE THAT HE HATES THE PRESIDENT, BUT I DON’T TEXT HIM, HE WASN’T ON MY PHONE AND WE WILL FIGURE OUT HOW THIS HAPPENED. TOM: MARIO DRAGHI SAYS GERMANY’S DECISION TO INCREASE DEFENSE SPENDING IS A GAME CHANGER, THE FORMER ECB PRESIDENT AND EX ITALIAN PRIME MINISTER HAS WARNED OF RISKS ON HOW IT’S IMPLEMENTED. HE ALSO SAYS IT’S NOT IN EUROPE’S INTEREST TO RETALIATE AGAINST U.S. TARIFFS BECAUSE IT’S FAR MORE RELIANT ON TRADE THAN THE U.S. OR CHINA. COMING UP, WE ARE COUNTING DOWN TO THE U.K.’S CPI INFLATION DATA OUT OF THE TOP OF THE HOUR. THAT AHEAD OF THE CHANCELLOR SPRING STATEMENT. STAY WITH US. THIS IS BLOOMBERG. TOM: GOOD MORNING, THIS IS BLOOMBERG DAYBREAK CURE UP, I’M TOM MACKENZIE IN LONDON, THESE ARE THE STORIES THAT SET YOUR AGENDA. PARTIAL TRUTHS, THE U.S. AS RUSSIA AND UKRAINE HAVE AGREED TO A CEASE-FIRE IN THE BLACK SEA, ENSURING SAFE NAVIGATION ON’S SHIPPING ROUTES, BUT THE KREMLIN SAYS A DEAL DEPENDS ON SOME SANCTIONS RELIEF. U.S. COPPER FUTURES SURGE ON THE BLOOMBERG REPORT THAT PRESIDENT TRUMP WOULD SLAP IMPORT DUTIES ON THE METAL WITHIN WEEKS. THE PRESIDENT ALSO SAYS HE WANTS TO LIMIT EXCEPTIONS ON RECIPROCAL TARIFFS. PLUS, THE U.K. CHANCELLOR LOOKS TO CUT BILLIONS AND SPENDING AS A GOVERNMENT FACES GLOBAL HEADWINDS AND CRITICS WITHIN ITS OWN PARTY. WE LOOK AHEAD TO RACHEL REEVES SPRING STATEMENT. SO, A FOCUS ON U.K. EQUITIES, A FOCUS ON THE POUND, WE HAVE INFLATION DATA BEFORE THE SPRING STATEMENT, INFLATION DATA’S DROPPING AT AROUND 7:00 A.M., HEADLINE EXPECTS TO COME IN AT 3% IN LINE WITH THE PREVIOUS MONTH. EUROPEAN FUTURES LOOKING FOR DIRECTION AFTER GAINS YESTERDAY AROUND .7%. FTSE 100 FUTURES ALSO FLAT SO FAR IN THE SESSION. INFLATION DATA IN THE SPRING STATEMENT COULD OF COURSE CHANGE THE DIRECTION FOR U.K. ACTORS IN THE SESSION. S & P FUTURES POINTING TO LOSSES OF .10 PERCENT AFTER THREE STRAIGHT DAYS OF GAINS FOR U.S. STOCKS. NASDAQ 100 FUTURES ALSO POINTING LOWER BY 31 POINTS. YOU HAVE CONSUMER SENTIMENT CONFIDENCE DATA COMING OUT IN TERMS OF SURVEYS OUT OF THE U.S. FALLING IN MARCH, THE LOWEST LEVEL IN FOUR YEARS. THAT’S WHAT THE BOARD AND HAVE A LACROSSE ASSETS, YIELDS ARE UP ACROSS CURVE SO FAR IN THE SESSION. SUCH CHECKING IN ON THE U.S. BENCHMARK. YIELDS UP TO BASIS POINTS, 433 RIGHT NOW ON THE 10-YEAR. IN FOCUS AHEAD OF THE SPRING STATEMENT AT INFLATION 129 RIGHT NOW THE POUND. COPPER AS WELL, THAT’S THE EXCHANGE OF THE U.S. IN TERMS OF PRICING, MASSIVE DIVERGENCE BETWEEN PRICING ON THE COMB X VERSUS THE LME IN LONDON. 1.5% IS THE UPSIDE ON THE TARIFF RISK AROUND COPPER AND RESTRICTED FLOWS OUT OF CHILE AS WELL. BRENT TRADING UP .3%. BRIEFLY CHECKING IN ON ASIA AS WELL WHERE THE BENCHMARK, MSCI ASIA-PACIFIC IS CURRENTLY IN POSITIVE TERRITORY UP .2%. CSI 300 DOWN .4%. HSTECH INDEX REBOUNDING TO SOME EXTENT AFTER PRESSURE IN RECENT DAYS UP .6%. OVER IN JAPAN YOU’RE SEEING GAINS OF 246 POINTS. LET’S GET BACK OUT TO WESTMINSTER WITH THE PREVIEW OF THE SPRING STATEMENT. CHANCELLOR RACHEL REEVES EXPECTED TO CUT SPENDING BY BILLIONS OF POUNDS WHEN SHE UNVEILS THAT STATEMENT LATER TODAY. BLOOMBERG GOT THE VIEWS OF FORMER CHANCELLOR, JOSH OSBORNE ON THE SIDELINES OF A JUST BE GLOBAL INVESTMENT SUMMIT. TAKE A LISTEN. > > THE OVERALL MESSAGE NEEDS TO BIT OF A RESET. THE GOVERNMENT DIDN’T GET OFF TO THE BEST OF START, SO THEY HAD A LOT OF GOODWILL. THEY INHERITED PROBLEMS, BUT THE RESULT IS THAT IT’S LIKE THIS ON THE OTHER SET OF THE WORLD, THERE’S QUITE A NEGATIVE SENTIMENT ABOUT THE U.K., AND THEN NEEDS TO BE CHANGED. TOM: BLOOMBERG’S LIZZY BURDEN IS IN WESTMINSTER FOR US ON ABINGTON GREEN. LIZZIE, CAN RACHEL REEVES THEN HIT THE RESET BUTTON IN TERMS OF THE ECONOMIC FORTUNES OF THE U.K.? > > I WOULD LOVE TO BE MORE OPTIMISTIC FOR YOU, BUT THE SLUGGISH GROWTH PICTURE IN THE U.K. AND THE RISE IN GOVERNMENT BORROWING COSTS, THE RISING GILT YIELDS SINCE THE START OF THE YEAR MEAN THAT IT’S PRETTY LIKELY THAT HER HEADROOM HAS BEEN WIPED OUT. HER HEADROOM AGAINST HER FISCAL RULES AND ARE ECONOMIST JUDGE THAT SHE’S ACTUALLY GOING TO HAVE TO FIND 17 BILLION POUNDS DOWN THE BACK OF THE SOFA TODAY. THIS IS GOING TO BE POLITICALLY DIFFICULT BECAUSE REEVES ALREADY TOLD US THAT SHE ONLY WANTED TO HAVE ONE BUDGET A YEAR, THE CONSERVATIVES ARE BRANDING THIS AN EMERGENCY BUDGET. SHE TOLD US THAT SHE DIDN’T WANT TO RETURN TO AUSTERITY, BUT IT LOOKS LIKE THEY’RE GOING TO BE DEPARTMENTAL SPENDING CUTS ON TOP OF THE WELFARE CUTS THAT HAVE ALREADY BEEN ANNOUNCED, ON TOP OF THE CUTS TO THE AID BUDGET TO FUND DEFENSE, ON TOP OF THAT CUT TO THE PENSIONER’S WINTER FUEL ALLOWANCE. TO MANY IN HER CABINET AS WELL AS HER PARTY, THIS IS STUFF THAT I LABOR CHANCELLOR HAS NO BUSINESS DOING. AND YOU ASK AND SHE HIT THE RESET BUTTON, THE TROUBLE IS, GIVEN THE GLOBAL HEADWINDS, IT MAY BE THAT WHATEVER HEADROOM SHE LEAVES YOURSELF TODAY COULD AGAIN BE WIPED OUT BY THE OCTOBER 2025 BUDGET AND THEN SHE MAY HAVE TO COME BACK AND DO EVEN MORE. WHEN I SPOKE TO HER LAST WEEK SHE WAS NOT APOLOGETIC ABOUT THE TAX RISES THAT SHE DID LAST YEAR, DO WE SEE MORE OF THOSE AHEAD? AS ONE ECONOMIST PUT IT TO ME THIS WEEK, I THINK THIS IS WHAT GEORGE OSBORNE WAS SUGGESTING, IT MAY LOOK FROM THE OUTSIDE PERSPECTIVE LIKE THE U.K.’S HAD GOVERNMENT AFTER GOVERNMENT THAT SIMPLY APPEARS TO JUST BE MANAGING ITS DECLINE. TOM: BLOOMBERG’S LIZZY BURDEN ENDING ON THAT BRIGHT KNOW. JOINING US AHEAD OF THE SPRING STATEMENT AND LIZZIE WILL COVER THAT FOR US THROUGHOUT THE DAY. LET’S GET MORE OF HER PERSPECTIVE IN TERMS OF WHAT ALL THIS MEANS FOR THE U.K. EQUITY MARKETS AND BRING IN AHEAD HEAD OF U.K. EQUITY RESEARCH AT WE WERE TO AN INVESTMENT MANAGEMENT. THANK YOU VERY MUCH, THANK YOU FOR COMING INTO THE STUDIO. WHERE IS YOUR FOCUS GOING TO BE WITH THAT LENS ON THE U.K. EQUITY MARKET? WHAT IS OF GREATEST IMPORTANCE WHEN IT COMES TO THE SPRING STATEMENTS? > > OVERALL, THE GREATEST IMPORTANCE IS THAT THERE AREN’T ANY BIG SURPRISES. AND PEOPLE OBVIOUSLY THINK BACK OF THE TRUST TIMES WHEN THERE WAS A LOT MORE SURPRISES. IT’S NOT JUST THE EQUITY MARKET THAT WILL WATCH US CAREFULLY, IT’S ALSO THE TREASURY MARKET. BECAUSE IT’S CLEAR IF WE LOOK AT THE PROGRESS REPORT THAT THE CHANCELLOR WILL BE LOOKING AT, ECONOMIC GROWTH THOUSAND PICKED UP, INFLATION IS STILL HIGH, AND IT LOOKS LIKE THE HEADROOM THAT SHE HAD IN OCTOBER HAS TURNED INTO A LOSS, SO THINGS HAVEN’T COME EITHER WAY, OBVIOUSLY ADJUSTING EVERY SIX MONTHS IS UNHELPFUL FOR MARKETS, SO WE WILL HEAR SOME MORE SPENDING CUTS BUT THE EQUITY MARKETS WILL REALLY HIT THE FORMER A COMPANY POINT OF VIEW, THEY COULD STILL PLAN AHEAD BASED ON THE CHANGES THAT WE ALREADY KNOW BECAUSE WE KNOW THAT THE NATIONAL INSURANCE CONTRIBUTION WILL GO UP IN APRIL, WHAT IMPACT THAT WILL HAVE, SO THERE’S PLENTY THAT BUSINESS HAS TO WORRY ABOUT, AND THEN WE HAVE TO SEE WHAT THE TARIFF CHANGES ACTUALLY WILL DO. TOM: YIELDS ARE UP ON THE BENCHMARK 10 YEAR BY ABOUT 100 BASIS POINTS SINCE SEPTEMBER OF LAST YEAR. ARE YOU SUGGESTING THAT BOND VIGILANTES ARE WAITING IN THE WINGS AT THIS POINT FOR THE U.K. CHANCELLOR? HOW SENSITIVE ARE THE BOND MARKETS AT THIS POINT? > > I THINK QUITE SENSITIVE BECAUSE WHAT THEY DON’T WANT TO HEAR THAT WILL BE EITHER A LOT OF NEW DEBT ISSUANCE THAT WILL HAVE IMPACT ON THE U.K. GILT MARKET, BUT ALSO MAY BE A BIT MORE INSIGHT IN HOW THIS BIG DEBT PILE IS GOING TO BE REFINANCED BECAUSE AT THE MOMENT, MOST OF THE 30-40 YEAR DEBT IS BEING REFINANCED WITH 30-40 YEAR DEBT. AND THAT’’S REALLY VERY EXPENSIVE. SO, NOT SURE IF THE CHANCELLOR IS GOING TO TOUCH ON THAT, BUT THERE COULD BE MORE EFFICIENT WAYS OF FINANCING THAT AND THAT HAS IMPACTS ON THE BANKS THAT DEAL WITH THAT, BUT ALSO WITH ALL THE SOFT GILTS. TOM: FTSE 100 IS UP ABOUT 6% YEAR TO DATE. SMALL MID-CAPS DOWN AROUND 3%. SO THERE’S SOME DIVERGENCE THERE. WHAT IS YOUR OUTLOOK FOR U.K. EQUITIES AS YOU WAY UP ALL OF THESE DIFFERENT VARIABLES, IS THERE FURTHER UPSIDE TO THE FTSE 100 THIS MORNING? > > IT’S ALWAYS DIFFICULT TO KNOW WHAT IS DRIVING THEIR DIFFERENCE, BUT WE BELIEVE THAT THE FTSE 100 GENERALLY HAS A LOT OF LARGER INTERNATIONAL VALUE STOCKS AND WHAT WE’VE SEEN YEAR TO DATE THAT PARTICULARLY GROWTH IN TECHNOLOGY STOCKS HAVE TAKEN A STEP BACK, AND THE CHEAPER COMPANIES HAVE DONE WELL. AND THAT IS EXACTLY WHAT THE FTSE 100 HAS, LOTS OF CHEAP COMPANIES. THE 50 TO 50, THEY ARE MORE DOMESTIC BASED. WE JUST TOUCHED ON THAT U.K. ECONOMIC GROWTH IS JUST NOT HAPPENING, AND THIS IS REALLY HURTING. TOM: DOES THAT DIVERGENCE CONTINUED THROUGH THIS YEAR? ARE YOU TARGETING PARTICULAR LEVELS ON THESE INDEXES AND THAT DIVERGENT THE STORY OF 2025? > > YOU DON’T REALLY THINK ABOUT, WE PICK STOCKS AND GENERALLY WE PICK GLOBAL STOCKS REGARDLESS OF WHERE THEY ARE LISTED AND THERE ARE QUITE A FEW IN THE FTSE 100. BUT WHAT HAPPENS TO THE U.K. ECONOMY, WHAT HAPPENS TO THE POUND IS REALLY IMPORTANT, WE’VE SEEN WITH SOME POUND STRENGTHENING AND THAT BENEFIT SOME DOMESTIC COMPANIES BECAUSE THEY MAY BUY THINGS IN U.S. DOLLARS AND THEN SOME ARE IN POUND. THERE’S A LOT OF DYNAMICS. IF THE TARIFFS GO NOT THE WAY WE WANT THEM IN GENERAL, INTERNATIONAL COMPANIES, FTSE 100 COMPANIES WILL BE IMPACTED MORE THAN DOMESTIC COMPANIES. I WISH I HAD A CRYSTAL BALL, THERE’S LOTS OF MOVING PARTS. TOM: WHAT ARE YOU BUYING UP THIS POINT? > > AT THE MOMENT WE CONTINUE TO FOCUS ON COMPANIES THAT HAVE A STRUCTURAL GROWTH ADVANTAGE, AND WE NEED TO BE VERY, VERY MINDFUL OF WHAT TARIFFS DO TO THEM. BUT ULTIMATELY WE DON’T KNOW WHAT HAPPENS. WILL THE TARIFFS BE GRAPHED — PASSED ON AND THEN THE END CONSUMER WILL PAY MORE AND MORE INFLATION. CAUTIOUS OPTIMISM IS SOMETHING THAT WE FOLLOW CLOSELY. TOM: CAUTIOUS OPTIMISM, THANK YOU VERY MUCH. HEAD OF U.K. EQUITY RESEARCH AT WAIVER 10 INVESTMENT MANAGEMENT AS WE LEAD UP TO THAT SPRING STATEMENT, WHAT TO WATCH AND WHAT IS SALIENT FOR THESE U.K. EQUITY MARKETS. THANK YOU. WE WILL CONTINUE THE COVERAGE, THAT STATEMENT AT 12:15 P.M. U.K. TIME. IN TERMS OF THE COVERAGE, THAT’S WHAT IT STARTS. SUBSCRIBERS CAN WATCH ON THE TERMINAL, AND WE WILL BE LIVE STREAMING OUR COVERAGE ON YOUTUBE. OTHER STORIES MAKING NEWS, SANTANDER WITHIN THE BANKING SPACE HAS BECOME THE FIRST EU BANK IN ALMOST A DECADE TO BE VALUED AT MORE THAN A HUNDRED BILLION EUROS. THAT’S AS INVESTORS INCREASINGLY PILE INTO THE BANKING SECTOR. U.S. BANKS HAVE HAD THEIR BEST WINNING STREAK SINCE BEFORE THE TURN OF THE MILLENNIUM. SHARES OF EUROPE’S BANKS HAVE BEEN SOARING AFTER THE ECP AND AT A TIME OF NEGATIVE INTEREST RATES IN 2020 TWO, GIVING A MASSIVE BOOST TO BANK PROFITABILITY. SHELL CEO SAYS THE COMPANY WILL CONTINUE TO LOOK FOR POTENTIAL ACQUISITIONS BUT LEARNED THAT THE RISKS INHERENT OF PURSUING A MAJOR DEAL. HE DIDN’T ANSWER DIRECTLY WHETHER SHELL WOULD CONSIDER LOOKING AT ITS RIVAL, BP. > > THE BAR IS HIGH BECAUSE IF YOU ARE GOING TO GO FOR A BIG ACQUISITION, ONE HAS TO RECOGNIZE THAT — AND WE ARE FOCUSED ON IF WE DO SOMETHING IN THE INORGANIC SPACE, THAT THE BORROWER IS HIGH AND IF WE GO AND READY TO DO THAT. TOM: CK HUTCHINSON IS SAID TO BE GOING AHEAD WITH THE PLAN TO SELL TO PANAMA PORTS TO A BLACKROCK LEAD GROUP, BLOOMBERG HAS LEARNED THE PARTY’S AIM TO SIGN AN AGREEMENT BY APRIL THE SECOND WITH THE SALE NETTING 90 BILLION U.S. DOLLARS FOR CK HUTCH. CHINA HAS CRITICIZED THE DEAL WITH BEIJING DIRECTING OFFICIALS TO INVESTIGATE POTENTIAL NATIONAL SECURITY AND ANTITRUST VIOLATIONS. BLOOMBERG HAS LEARNED THAT U.S. TARIFFS ON COPPER IMPORTS COULD COME WITHIN WEEKS, WHICH WOULD BE MONTHS EARLIER THAN THE DEADLINE FOR A DECISION. THAT SENSE COPPER TRADING TO NEW YORK FOR RECORD WITH A METAL SINCE PARING SOME OF ITS EARLIER GAINS. FOR MORE LET’S BRING IN BLOOMBERG’S BRIAN FOWLER WITH THE DETAILS. BRIAN, WHAT COULD BE THE GLOBAL IMPACT THEN OF THESE COPPER TARIFFS? WE SEEN THE DIVERGENCE AND DRAMATIC AS IT HAS BEEN BETWEEN THE PRICING IN THE U.S. VERSUS HERE IN THE U.K., THE LME, THE GLOBAL IMPACT OF THESE POTENTIALLY $.25 TARIFFS ON COPPER? > > THE BOTTOM LINE IS INFLATION, AS YOU SAID, COPPER WAS AT A RECORD, THAT’S PARTLY BECAUSE THEIR OUTPUT STOPPAGES IN CHILE, BUT REALLY IT’S BECAUSE OF NOTIONS THAT THESE TARIFFS WILL KICK IN A LOT EARLIER THAN PREVIOUSLY THOUGHT, SO WE’VE GOT A LOT OF COMPANIES RUSHING TO GET AHEAD OF THOSE DUTIES BY FRONT LOADING IMPORTS, SO THERE’S A SUPPLY SQUEEZE IN THE U.S., AS WE HEARD EARLIER IN THE SHOW, U.S. PRICES ARE HIGHER THAN THEY ARE IN LME ON THE LME, AND THAT PUTS A LOT MORE PRESSURE ON U.S. MANUFACTURERS, PEOPLE ARE ALREADY SEEING THAT U.S. MANUFACTURERS ARE PAYING MORE FOR ALUMINUM, STEEL AND OTHER BUILDING SUPPLIES AND THEIR COUNTERPARTS OVERSEAS BECAUSE OF TARIFFS. THIS WOULD OF COURSE INCREASE THAT BURDEN ON THEM, SO WE COULD SEE U.S. MANUFACTURING LOSE SOME OF ITS COMPETITIVE EDGE FOR SHORT TERM, THE LONG-TERM OF COURSE, THE HOPE FOR THE TRUMP ADMINISTRATION IS THAT THE TARIFFS WILL ENCOURAGE MORE PRODUCERS IN THE U.S. TO BOOST OUTPUT AND THAT WOULD REDUCE THE RELIANCE AT THE U.S. HAS ON OVERSEAS SUPPLIERS, ESPECIALLY CHINA. BUT I THINK, RIGHT NOW, IT’S ESPECIALLY A SQUEEZE IN THE U.S., BUT IF THOSE TARIFFS KICK IN AT 25%, AS YOU SAY, I THINK WE WILL SEE INFLATION GO GLOBAL, REALLY, FOR ALL. AND OF COURSE, COPPER IS A UBIQUITOUS METAL IN WIRING FOR EVERYTHING FROM HOUSES, BUILDINGS, CARS AND MACHINERY. SO THAT WILL HURT EVERYBODY. TOM: THERE IS THE IMPORTANT CONTEXT AS WE COUNT DOWN TO POTENTIAL TARIFFS ON COPPER. BLOOMBERG’S CORRESPONDENT WITH THE DETAILS. THANK YOU. COMING UP, FUNDING FOR EUROPEAN STARTUPS AS GET A RECORD HIGH, HIT A RECORD HIGH IN 2024, STILL DWARFS BY U.S. FIGURES, WE DO A DEEP DIVE IN TERMS OF THE FUNDING LANDSCAPE. THAT IS NEXT. THIS IS BLOOMBERG. ♪ TOM: EUROPE’S TALENT POOL HAS REACHED NEW HEIGHTS DESPITE FUNDING SHORTAGES. VENTURE CAPITALISTS REACHING OVER $52 BILLION LAST YEAR. THAT’S ACCORDING TO THE LATEST REPORT BY EUROPE’S LEADING VC LAW FIRM. THEY HAVE BEEN SCRUTINIZING THE DATA COMING THROUGH WITH THIS REPORT. THANK YOU FOR JOINING US IN THE STUDIO. YOU BEEN LOOKING FOR DEALS ABOUT 375 VENTURE CAPITAL AND GROWTH EQUITY INVESTMENTS AMONGST YOUR CLIENTS AND PARTNERS. WHAT STOOD OUT TO YOU IN TERMS OF SOME OF THE THEMES, SOME OF THE TRANSITIONS HAPPENING WITHIN THIS SPACE? REX THANKS FOR HAVING US. SO, 20 24 WAS THEIR RECALIBRATION YEAR, SO WE HAVE THE HIGHS OF 2021, THE LOWS OF 2023. WHAT WAS REALLY NICE LAST YEAR WAS TO SEE A COMPLETE RESET ON SOME OF THESE DEAL TERMS. SO 2023 WAS CRUNCH TIME, WE SAW A HUGE FOCUS ON INVESTOR CONSENT RIGHTS, HORRIBLE POSITIONS WITH RESPECT TO LIQUIDATION PREFERENCES AND THINGS LIKE THIS. FOR THE FIRST TIME FINALLY WE SEE A BIT OF A REBALANCE, AND THAT’S CLEARLY SET OUT. TOM: THAT’S BECAUSE 2023 WAS A CHALLENGING YEAR IN TERMS OF ACCESS TO FUNDING BROADLY. > > THERE IS THAT IN 2023 WAS A HUGE EXPANSION OF THE MARKET, SO THERE WAS SIMPLY A HUGE NUMBER OF EARLY-STAGE BUSINESSES WITH UNPROVEN BUSINESS PLANS AND THINGS LIKE THIS, SO QUITE NATURALLY, THE STRESS ON THOSE DEAL TERMS ARE HIGH, BUT ALSO THE AMOUNT OF MONEY AS WELL. TOM, WHICH PARTS OF THE TECH ECOSYSTEM ARE ATTRACTING THE MOST CAPITAL AT THIS POINT? > > GREAT QUESTION, I FIND THAT WE ARE FINALLY REACHING WHAT I WOULD SAY THE MATURATION OF THE AI MARKETS, SO WE ARE NO LONGER WORRYING ABOUT WHETHER WE ARE ON THE APPLICATION SIDE OR THE INFRASTRUCTURE SIDE AND ACTUALLY, THAT’S NOW CREATING THIS NEW SPACE OF SASS, WHICH IS FLYING WITH RESPECT TO FINANCING. IF YOU ARE BE TO SEE THEM I THINK YOU ARE PROBABLY STRUGGLING. TOM: THAT’S INTERESTING THAT YOU SEE THE AIP’S MATURING. DOES IT LOOK FROTHY TO YOU WERE RATIONAL? > > IT’S IMPROVING. CERTAINLY NOT SOME OF THE CRAZY VALUATIONS THAT WE HAVE SEEN IN PRIOR YEARS. I HAVE HAD A FEW DEALS RECENTLY WHERE NO INVESTOR REALLY WANTS TO SIT BEHIND THE PRICING OF THEM. BUT FOR THE MOST PART, IT IS GETTING A LOT MORE RECENT. TOM: WHAT ASSUMPTIONS ARE YOU MAKING AROUND DEAL ACTIVITY THROUGH 2025? > > IF IT’S ANY NEED TO GO BY, IT CERTAINLY VERY ENCOURAGING RIGHT NOW, I’VE GOT A HUGE AMOUNT OF M & A, WHICH IS ALREADY KICKING OFF THE NEW YEAR, WHICH IS PROMISING. I DON’T THINK WE ARE NECESSARILY BACK TO PURE HAPPY EXIT SOUNDS, BUT WE ARE SEEING A HUGE AMOUNT OF SECONDARIES AS WE SEEN IN THE REPORT, AND A NUMBER OF COMPANIES GETTING SOME LIQUIDITY AWAY AT THE START OF THIS YEAR, WHICH IS GOOD. ON THE FINANCING SIDE, THAT’S PICKING UP AS WELL. I’M ULTIMATELY VERY POSITIVE. TOM: ON SECONDARY TRANSACTIONS, THOSE HAVE PICKED UP SIGNIFICANTLY, IS THAT LARGELY DOWN TO THE PUBLIC MARKETS ESSENTIALLY BEING ALL THE CLOSED OFF AT THIS POINT AND WHAT IS YOUR SENSE AS TO WHEN THE PUBLIC MARKETS KIND OF BECOME AN EASIER PLACE WHEN THIS STARTS TO PICK UP AGAIN? > > THAT’S PROBABLY RIGHT, WE SEE OUR LATER STAGE COMPANIES BEING IN A BIT OF A HOLDING PATTERN FOR THAT LIQUIDITY POINT. FUTURE — FEW BRIDGE FINANCING IS GOING THROUGH. PEOPLE TAKING PROPER TIME TO PREPARE FOR THOSE EXITS, WHICH IS REALLY NICE AS WELL. TOM: THERE’S NOT A NECESSARY AND UNHEALTHY AMOUNT OF DYNAMIC. GROWTH STAGE FUNDING, THIS IS BEEN A THEME IN EUROPE IN TERMS OF HOW IT’S LIMITED AND YOU ARE STILL SEEING THAT, WHAT IS HOLDING BROAD STAGE FUNDING BACK IN WHAT WE NEED TO HAPPEN TO CHANGE THAT DYNAMIC? WORKS GREAT QUESTION. I THINK THERE’S BEEN A SHIFT IN FOCUS POINTS FOR SOME OF THESE COMPANIES. SO — THAT ACTUALLY GOES TO SOME OF THE DEAL TERMS WE ARE SEEING, SO INSTEAD OF PEOPLE GOING CRAZY TO HEAR ROCKET VALUATIONS, NOWADAYS IT’S MORE ABOUT CREATING A MORE SUSTAINABLE REASON AND DARE I SAY, A PROFIT, WHICH IS QUITE NICE. I THINK THERE’S BEEN A SHIFT IN WHAT FOUNDERS ARE THINKING ABOUT, SO IT’S NO LONGER ACHIEVING THIS FOCUS, IT’S ACHIEVING A HEALTHY, SUSTAINABLE BUSINESS. ACCESS TO LIQUIDITY WILL SLOW DOWN LATER STAGE GROWTH. AND TO BE HONEST, WE ARE GOING THROUGH THE TAIL EDGE OF FINANCING AS WELL WHERE VALUATIONS HAVEN’T BEEN SO GREAT. IT HAS TO TAKE A NUMBER OF ADDITIONAL BOXES. TOM: ON AI, TO WHAT EXTENT IS THE EXCITEMENT SOME WOULD SAY RATIONALLY FOR AROUND THE AI DRAWING FUNDS AWAY FROM OTHER SECTORS, THE THAT A CHALLENGE FOR THE SPACER IS IT MORE NUANCED? BECK’S WE ARE DEALING WITH AI FOR A LONG TIME. I THINK THIS IS THE SECOND WAVE OF AI OR DARE I SAY THE THIRD WAVE. DOING VENTURE DEALS FOR OVER 15 YEARS. I WAS DOING VENTURE DEALS 15 YEARS AGO. IT’S NOT NECESSARILY A NEW THING BUT IT’S A SLIGHTLY NUANCED THING. I WOULDN’T SAY MONEY IS BEING DRAWN AWAY FROM OTHER COMPANIES BECAUSE OF A IDEALS BECAUSE ULTIMATELY THE CHECK SIZES DIFFERENTLY APPROACH. THEY ARE VERY DIFFERENT INVESTORS. SO NATURALLY, SOMEONE THAT’S RAISING MONEY FOR B TO B IS GOING TO BE DIFFERENT FROM AN AI COMPANY WITH HARD TO VALUE PROSPECTS. TOM: THANK YOU VERY MUCH, REALLY INTERESTING INSIGHTS INTO THE FUND FLOWS AND THE DEALMAKING WITHIN THE EUROPEAN TECH SPACE. JAMIE MOORE, PARTNER. THERE’S PLENTY MORE COMING UP. WE BREAK DOWN AT WHAT’S HAPPENING IN TERMS OF U.S. CONSUMER. U.S. INFLATION DROPPING IN EIGHT MINUTES. STAY WITH US. THIS IS BLOOMBERG. > > I DO BELIEVE THAT INVESTORS ARE REASSESSING THEIR PARAMETER OF THIS NEW GLOBAL EQUATION THAT IS DRIVEN BY THE GEOPOLITICS. > > AND THAT UNCERTAINTY IS DRIVEN BY THE UNDERLYING OUTLOOK OF INFLATION. INFLATION WILL BE AN IMPORTANT DRIVER OF THE OUTLOOK. > > THE TIER FOUR IS LIKELY TO CAUSE A RISE IN INFLATION, SOMEWHAT AND A SLOWDOWN IN GROWTH. > > TARIFFS IN GENERAL WILL BE MASSIVE. I WAS TALKING ABOUT THE UNEXPECTED CONSEQUENCE OF CHINESE COMPANIES HAVING TO FIND OTHER MARKETS. OVERALL, I THINK CHINA HAS KEPT A VERY FIRM MESSAGE THAT THEY WILL KEEP GLOBALIZATION FIRM AND UNILATERAL IN TEARS. TOM: GUESS AT THE SUMMIT WITH THEIR THOUGHTS ON UF TARIFFS ON THE IMPACT ON TRADE. THAT IS IN THE MIND OF U.S. CONSUMERS AS WELL. THE CONCERN ABOUT THE TARIFF IMPACT ON HIGHER PRICES. YOU ARE SEEING THAT IN TERMS OF THE CONSUMER CONFIDENCE GAUGE EDGING TO ITS LOWEST LEVEL. THAT’S THE BLUE LINE, IN FOUR YEARS EXPECTATION SIX MONTHS OUT FALLING TO THE LOWEST LEVEL IN 12 YEARS. THOUGHT DOES NOT PAINT A POSITIVE PICTURE IN TERMS OF HOW THE U.S. CONSUMER IS FEELING. WE SEE HOW THAT IMPACTS RETAIL SALES AND THAT IS A GAP AT THE MOMENT. LET’S FLIP THE BOARD AND LOOK AT THE COPPER STORY. THIS IS REMARKABLE IN TERMS OF DIVERGENCE YOU SEE IN TERMS OF PRICING ON THE EXCHANGE IN U.S. VERSUS THE LME IN LONDON ON REPORTS THAT TRUMP IS LOOKING TO ADD TARIFFS ON COPPER, POTENTIALLY WITHIN THE NEXT FEW DAYS, THE NEXT FEW WEEKS AS WELL AND YOU SEE A SUSPENSION OF EXPORTS FROM GLENCORE. THOSE TWO FACTORS COME INTO COMBINED WITH MUCH HIGHER PRICES, RECORD PRICES ON THE EXCHANGE DIVERGING FROM THE PRICING ON THE LME. LET’S BRIEFLY CHECK IN ON GILTS IN THE THIRTY-YEAR. THIS IS THE FOCUS, RACHEL REEVES, AS IS THE 10. THE CONCERN LEADING UP TO SPRING STATEMENT. SHE WANTS TO BALANCE THOSE RISK AND WE KNOW THAT SHE IS FOCUSED ON WHAT THE BOND COMMUNITY IS THINKING, INVESTMENT COMMUNITY IS THINKING ABOUT SPRING STATEMENT. YIELDS, BY THE WAY ON THE 10 YEAR UP ABOUT 100 BASIS POINTS SINCE SEPTEMBER. WE WILL HAVE LIVE COVERAGE OF THE CHANCELLOR’S SPRING STATEMENT TODAY FROM 12:15 P.M. U.K. TIME. SUBSCRIBERS WILL BE ABLE TO WATCH ON THE TERMINAL, AND WE WILL BE LIVE STREAMING ON YOUTUBE. THE OPENING TRADE IS UP NEXT. THIS IS BLOOMBERG.