Transcripts For BLOOMBERG Bloomberg 20240703

Uncalled a critical moment for the region. Stocks in asia rising as investors await the results of diplomatic efforts that may help contain the israelhamas war. Gold is moving lower. Vladimir putin arrived in china on a Rare International trip for talks with xi jinping as the u. S. Presses beijing to reduce tensions in the middle east. Let me bring you breaking news the corporate space. We are getting numbers out of ericsson. The Swedish Telecom maker has Third Quarter net sales come in at 64. 47, will call it 5 billion swedish krona. He got perhaps a number that they already announced a 5. 2 drop previously with 64. 5 billion what they announced last week. This is a drop on the 60 billion a year earlier. You are seeing headlines come around their adjusted gross margin. It is 39. 2 . The ebitda margin dropped as well. We are waiting for the Fourth Quarter margin as well especially as we go into a tough time. We are seeing similar Market Trends for the Fourth Quarter and headlines across as well. The thing that is a Sticking Point is last week in addition to pronouncing the earnings they talked about the impairment charge related to linage. It is 32 billion and they are sticking with that when it comes to their overall earnings. We will bring you more analysis as we get it because earnings headlines are coming in and will affect the market trade when the european markets open at 8 00 a. M. London time. You are seeing a regional divergence starting off with the futures trade. It is read but only marginally. Your stoxx 50 futures virtually unchanged. A pullback in nasdaq 100 futures about 10 . In asia, a complete a different story and that part of the world and is counterintuitive what you are seeing in asian markets, a little bit of green on the screen. This is important because youre looking at the hang seng and nikkei and dollaryen as well. This is going to be a big part of the conversation about how much support it needs from the pboc. You are getting data coming into tomorrow that will suggest the economy in china is weakening but we knew that scared the green on the screen is from the expected support that followed. You are saying that having a real effect across asia pacific region. The dollaryen as well just shy of the 150 mark. 7. 31 on dollar versus the offshore yuan, crossing the crucial 7. 30 mark. Lets go cross assets. We start to talk about Monetary Policy being fed in. The bond selloff resumes. The 2year yield is 5. 10. The 10 year yield is 4. 75. That is creating a bid for the greenback. Interest rate differentials drive the dollar value higher and push the euro lower response. 1. 05 on the eurodollar. Brent crude is 89. 53. The theme is there are no massive market moves. The overall takeaway is investors are waiting for what the geopolitical conflict is going to bring in terms of diplomatic efforts in the market we prepared their the market readthrough. It is our top story, u. S. President joe biden will travel to israel tomorrow in a bid to prevent the conflict of engulfing the entire region. The visit comes as gaza braces for an expected ground offensive. He is coming here at a critical moment for israel, for the region, and for the world. He is coming here to do the following. First, the president will reaffirm the United States solidarity with israel and ironclad commitment to its security. Second, President Biden will underscore are Crystal Clear message to any actor, state or nonstate, trying to take advantage of this crisis to attack israel. Dont. Kriti lets get more from Bloomberg Oliver crook live in tel aviv. Talk to us about bidens latest trip and how much of a deterrent is it really . Oliver it will certainly be a deterrent continues to build the narrative that the United States has the back of israel under any circumstances. It will potentially deter would israel really launch a ground offensive while United States president is here . He is expected to arrive tomorrow and will go to israel, tel aviv, and jordan where he will meet with arab leaders including the president of egypt and the president of the palestinian authority, Mahmoud Abbas and the king jordan. The message will be clear from biden which is support for israel and deterrence, trying to deter the conflict from escalating. This is a top priority for everybody in the region. There is the question of diplomacy. He needs to address aid in getting it to gaza. We heard from Antony Blinken saying israelis are open to and devising a plan to create the conditions under which aid can get into gaza. However, that is the stage of rhetoric. The reality is there are 3000 people died in gaza according to the authorities and the humanitarian situation is completely devolving. There is a break off and the question is will the south border point into egypt, rafah, but that crossing open . We had thousands of tons of humanitarian aid waiting on the border that has not crossed in yet. Kriti that is a heartbreaking perspective. Talk to us about the other side, the war effort from the israelis. Oliver for the israelis, it has been focused on aerial bombardment and some operations from the sea that have bombarded gaza. They have been strikes in the north on hezbollah as well but the question is the ground operation. It is when it will take place in the israelis this weekend confirmed they will be a ground component in the next stage of this war. What will the scope be . We heard from the defense secretary of israel last night and heres what he said standing next to Antony Blinken. This will be a long war. The price will be high, but we are going to win for israel, for the jewish people, and for the values that both countries believe in. Oliver so, his message is bracing for a long war with a very high price. The question will be what form will it take in the ground vision take . Ground invasion take . Is there appetite to occupy gaza . The israelis said that is not something they want to do. Will this remain a one front more . War . Iran has been saying the time for a political solution is running out and the inevitability for a second front is approaching. Biden is walking directly into this complex calculation will we get a raid sirens across the country. Kriti bloombergs oliver crook live in tel aviv bring us the latest on both sides of the trinitarian crisis and thank you for your reporting. I went to continue with the Major Players and move on to russian president Vladimir Putin who has arrived in beijing for the third belt and road forum according to Chinese State media. Joining us now is Stephen Engle who is covering the story closely. Talk to us about the timing of this. The last time these two leaders met it was under very different circumstances. The war in ukraine had not taken all caps. Had not taken off yet. Stephen february of last year Vladimir Putin came to beijing and met with xi jinping and they solidified with a handshake no limits partnership. Within weeks, vladimir invaded ukraine and is dragging on as we know. China has been urged by western allies to use its influence on Vladimir Putin in moscow to deescalate in ukraine. It will be interesting with Vladimir Putin coming here whether the no limits partnership has been strained a bit by the overreliance of that partnership of russia relying on chinas economic help as the war drags on. With the other big flashpoint in the world, the middle east. The front page of the global times which is state media here, it says china urges israel to avoid total punishment in the gaza strip the foreign minister of china long the who has spoken wang yi was talked with counterpart in tehran as well as riyadh and turkey. There are diplomatic efforts going on behind the scenes by the chinese and wang yi is a critical individual here as the top people met in china because Joseph Burrell the top diplomat from the eu was here in beijing over the weekend and we talked to him briefly. He said he had a meeting with wang yi and expressed to get china to use its influence in tehran to deescalate and that is something the state media report mentioned, that the urged tehran that the most important thing is to help deescalate the communitarian crisis happening in gaza ahead of what is likely to be an israeli invasion. That is something Anthony Blinken is in an hourlong conversation on sunday with wang yi user influence to deescalate. There will be a Conference Tomorrow evening with wang yi and tomorrow morning watching the belt and road forum is xi jinping and a putin who will meet with him tomorrow morning. I do not expect publicly those two gentlemen to mention the conflict in the middle east and definitely they will not mention the war in ukraine publicly but they will talk about both of those conflicts. Kriti i love that you mentioned the reliance on china is a big piece of it and they are reporting that the yuan accounted for half of the value of all fx trading in moscow as of september. In january 2022 it was only 0. 4 . Talk to us about the success of the broader belt and Road Initiative. Is it still a broad china asserting dominant story of 10 years ago . Stephen it has scaled back for sure. Italy was the only g7 member was a signatory to the belt and Road Initiative and they are pulling out with the maloney government saying it is not going two ways. It is a one way partnership. In china is benefiting more. You are seeing debt levels in crises across africa and elsewhere in asia developing asia. Zambia had a default in ethiopia and sri lanka, all these countries in debt crises right now and they need Debt Forgiveness or restructuring. The biggest creditor and these develop mental loans is china. How willing are they to give debt relief at a time when they are having a slowing economy and their own debt crisis some property as well . Interesting times ahead and it will play out tomorrow as the belt and road forum kicks off. Kriti the fact that the form could provide alternatives to traditional imf and World Bank Solutions is quite telling of chinas role in the global economy. Stephen engle there in beijing. Thank you for your reporting. I want to go back to the european story in the translation from what is going on in the middle east. Two people were killed by gunfire in downtown brussels on monday night in an attack which is being investigated as possibly terrorist related. Lets get to maria tadeo in brussels. What is the latest on the ground there . Maria this shooting took place in brussels and two people are dead. It brings back memories of the 2016 terror attacks that hit this country. It was 7 00 p. M. Yesterday that two people were shot dead in a third peterson person shot was recovering in hospital. They were shot unprovoked by a man on the streets. We know that this man who belgium Authorities Say is suspected of carrying out the shooting in the name of terror and they acknowledged there is a social media video from this person. He vindicates his ax and says he is doing this indicates his ex and says he is doing it for the islamic state. He is still on the run and has not been caught. The belgium Authorities Say this is being investigated as a terror attack the belgian Prime Minister acknowledged those videos and messages from this person. There is not a lot of information at the time being but this individual is a 45yearold man who comes from tunisia and did not have the right to be in belgium legally in this country. Nonetheless, that is the profile the Prosecutor Office is investigating this as a possible terror motive. Kriti a lot of people woke up to those headlines this morning surprised to see something of that scale right here in europe. Maria tadeo in brussels. Coming up, the latest announcements on the israelhamas war. Professor Mahjoob Zweiri from Qatar University joins the next in the program. This is bloomberg. At ameriprise financial, our advice is personalized, based on your goals, whatever they may be. All that planning has paid off. Looks like you can make this work. We can make this work. And the feeling of confidence that comes from our advice . I can make this work. That seems to be universal. I can make this work. I can make this work. No wonder more than 9 out of 10 clients are likely to recommend us. Because advice worth listening to is advice worth talking about. Ameriprise financial. Kriti iran has warned an expansion of the war between israel and hamas is increasingly becoming unavoidable. Joining me now for a proper update is Mahjoob Zweiri, director of Global Study Center and professor of the middle east at Qatar University. A pleasure to have you, professor. Lets start with the risk of iran getting more involved. What was actually look like what does that actually look like the uncle mahjoob i have a strong view on this. I felt that this is a divergent of the whole story. What is happening in gaza is at the core business for focus. What is happening in gaza is an occupation, killing more than 3000 people, injuring more than 10,000 people. It is a sign of two things. The weakness of International Community led by the United States and secondly, that there is a lack of will to solve this problems which has lasted for more than 75 years. When you bring in other elements, the Major Players are failing to address the issues which are humanitarian issues and humanitarian port for thousand people and the suffering of the people in the last 16 years under siege. I ran has a major issue with israel and the United States and they will capitalize on the story but i ran is not the major issue. The major issue is what has happened in gaza and how the International Community is closing their eyes of all of those killing and casualties and how they are not able to understand 2. 3 Million People living without water and electricity and without basic normal rights for life. How those people are suffering without having a serious condemnation from the socalled modern world in the 21st century. Kriti it is a crucial and dire humanitarian situation and i dont think anyone is doubting that around the world, but professor, lets talk about the concerns from the International Community about irans funding of hamas and hezbollah and if the aid is turning into a regional escalation. It happens through the awning funding channels. What are the odds of that . Mahjoob this argument, the counterargument is what the United States does with israelis and how much they are spending what they are doing now sending all those troops and technologies and intelligence supporting. Im sorry to say this is an argument to say that what hamas is doing is wrong because iran is supporting her what israel is doing is right because the u. S. Is supporting. This is an inhuman argument and dehumanization of people in gaza and allowing what is happening on them. I am not denying that iran is benefiting and they have interest to see hamas winning. Iran has its own political agenda in the region. America has an agenda. These are complex agenda and who is paying the price . Humans, women, children. 1000 killed in gaza, 1000 children, more than 400 women. Those who are talking about human rights need one million wakeup calls so they can understand this. The issue is a divergent approach of going to other stories without focusing on the humanitarian issue and delaying this shows the hypocrisy of the International Community and lack of integrity when things happen in our country, everyone defends. When things happen in gaza, no one wants to do anything. Kriti a lot of people are looking at the humanitarian expectation and how this can work. Egypt and the humanitarian corridor is a big piece of the conversation around the world and World Leaders have actually condemned the way the israel has responded to the hamas attack. Mahjoob no, actually. Kriti before we actually dive into that, i want to ask you about the sanctions. I want to bring a chart to the International Audience talking about irans oil output and the role it plays in the global oil story. The country accounts for 11 of opecs total production. This chart shows when you Start Talking about a market narrative, this is a Financial Network and this is where the bull case oil sands. Stans. One of the questions that financial communities want to know is what do sanctions on iran regardless of the narrative potentially look like in the next coming weeks . Mahjoob whatever sanction has hardly had the economy. Iran is not a normal country when it comes to economy. Iran has a 1. 4 Million Barrels a day in a normal situation and now they are doing it on the black market with 600,000 barrels a day and they paid money for the international order. The sanctions are a major enemy of the iranian economy and state and these sanctions will last for a long time. I think it will last in light of this kind of iranian politics in the region which is basically not welcome. Irans oil is suffering from problems with infrastructure and Financial Regulation and policies. When you talk about oil sector in iran it is a huge story to dig deep and to see why iran through all of this ability to have and produce and provide oil, they are not capable to be economically secure. There are other elements regarding the structure of the economy of iran, lack of regulation and policies infrastructure which have not been renewed for more than 30 years. Kriti it is something we will be keeping a close eye on. It has International Ramifications as you point out. Mahjoob zweiri, we have to leave it there, professor of contemporary politics of the middle east at Qatar University. Coming up, Country Garden enters the final hours to avoid the first ever public valor bond default. We will go into details next. This is bloomberg. Kriti welcome back to daybreak europe. The clock is ticking down for Country Garden to avoid its first ever public dollar bond default with the end of a 30 day grace period on a 15. 4 million coupon looming. You are seeing how much the value of those bonds have dropped. They are trading at below 10 of face value. Lets get to Kevin Kingsbury joining us now. Does anyone want to buy this stuff . Kevin not really. Most of the bonds are five cents on the dollar it shows you how little investors have as far as return recovery they might get out of these bonds. The next couple of days, it has been months in the making, the company in late july warned it had a big loss and a record firsthalf loss. We are at the point now this is the third bond has had a 30 day grace period for interest payments. If it does not make it, we will see it go into debt restructuring like other chinese developers. It is a default straightaway or will announce a debt restructuring. Kriti certainly something we will keep an eye on. Kevin kingsbury with a quick report. Thank you for your analysis. More ahead. This is bloomberg. So, youve got the power of xfinity at home. Now take it outside with xfinity mobile. Like speed . Its the Fastest Mobile Service around. With the best price for two lines of unlimited. Only 30 bucks a line per month. Thats hundreds in savings a year when you wave bye to the other guys. All on the most reliable 5g network nationwide. You really shouldnt walk out the front door without it. Switch today at xfinitymobile. Com. Good morning welcome back to daybreak europe, lets get to the top stories that set your agenda. President joe biden is set to visit israel tomorrow and what has been called a critical moment for the region. Meanwhile stocks in asia rising on low volume investors awaiting the results of those diplomatic efforts that just might help contain the israel hamas war. Gold in the meantime moving lower. Plus russias Vladimir Putin arrives in china on a Rare International trip for talks with xi jinping to help reduce tensions in the middle east. Those are your geopolitical headlines. Lets get it quick check on the markets because the risk sentiment is an interesting one to navigate. When you look at futures they are lower but only marginally. It is nothing i would write home about but it speaks to the idea there is no major momentum. There is also a rush to hop into this market. As you start to see these marginal moves also note there is very low volume and that is a similar story in the asia trade. As you look at those asian markets, green on the screen it sure. But it is also coming amid low volume. Hang seng volume about 20 below its five day average so really green on screen does not mean a ton if there is less investor participation. At the same time in the broader asia region you are expecting data to come out softer tomorrow so there is an expectation that chinese stimulus on the back of that softer data is going to fuel the market a little more. A little anticipation on that if you did want to put a fundamental narrative into it but i caution against that. Dollaryen it just shy of 150. Well call it that crucial level that i folks look for from currency intervention and the dollar you on, 731 crushing crossing the crucial 730 level. It is not just the equity argot that matters it is the bond market, looking at the two and 10 year yields both higher on overnight trading but just marginally. The 10 year yield of 474 higher by about four basis points creating a bid into the dollar you are seeing strength in the greenback right out to the detriment of eurodollar at 10 five, weaker by about 1 10 of 1 . Our classic trip check on brent crude trading about 90 a barrel. We have an iron that given the geopolitical risk and what happens next with a ron, iran may face more and sanctions and given that is about 11 of opecs output that is going to have International Ramifications. A quick check on the israeli shekel as we monitor developments in the israel hamas war. You are seeing a little strength in the israeli shekel but context is everything. The bank of israel is actively using its fx reserves as cash reserves to prop up the currency so how successful is that when youre looking at for a one on that currency pair. It will keep you apprised. Back to the core issue that is of the markets narrative in that is geopolitics. Joe biden will travel to israel tomorrow in a bid to prevent the conflict from engulfing the region. The visit comes as gaza braces for an expected ground offensive. He is coming here at a critical moment for israel, for the region and the world. And he is coming here to do the following. First the president will reaffirm the United States solidarity with israel in our ironclad commitment to solidarity and suck it will underscore Crystal Clear message to any act or state or nonstate trying to take advantage of this crisis to attack israel. Dont. Lets get more from oliver kruk live in tel aviv. Talk to us a little more about President Bidens trip, how much of a deterrent is it . Oliver this is the Big Development overnight, the confirmation that President Biden will come here to tel aviv, not just here to tel aviv. He will also venture to jordan. This will happen tomorrow and he is coming with a few messages. One is a clear message of support for Israel Financial and military and one is political. The second is deterrence. He is coming to show that support and the Aircraft Carrier group in the Eastern Mediterranean sent by the United States. Also the question of diplomacy. He is going to jordan and will be speaking to the egyptian president. He will be speaking to King Abdullah of jordan and speaking to the president of the palestinian authority. There he is going to, first of all talk about this line that hamas is not only an enemy of israel but of the Palestinian People. A notion that does not have by any stretch universal currency in this region but he does need to do something in order to get aid into gaza where the situation is very quickly deteriorating and has been for a long period of time. Yesterday lincoln said the israelis are prepared to set up the conditions and are looking at how to set up the conditions in order to get humanitarian aid in but that has stopped at the level of rhetoric. Right now the reality on the ground is dire, we have trucks with thousands of tons of goods and aid sitting at the order of egypt and Southern Gaza that they cannot get in and this is going to be high on the agenda. Particularly with leaders of the arab world. Kriti that is just one part of the equation, they are talking about the actual ground offensive which we were expecting to be this past weekend. What is the latest on the war effort . Oliver it is very ambiguous in terms of if and when we are going to get an invasion from the ground. We know there has been aerial bombardment from this still overnight. We understand there has been bombardment from the sea as well but the question is when on the offensive and what does it look like. Is this a full all of the troops rolling in, is this more tactical and deliberate. Again it has been very hard to see. We have been speaking to a number of officials on this but we also heard from the Israeli Defense minister last night standing alongside blinken. Here is what he had say. This will be a long war. The price will be high. But we are going to win. For israel, for the jewish people. And for the values that both countries believe in. Oliver we know at least that the israelis are braced for a long and costly war. The question is how long. And also if they are successful in dismantling hamas which is their stated objective what comes next . This is obviously an early question to ask but this is an inevitable question so one that certainly the United States will have to be asking and from their experience with their involvement in the middle east and again the question is will this remain a one front war. Irans rhetoric has been sharper it just sharpening over the last few days saying of things do not improve in gaza that there will be at least a second front that opens with the border of lebanon. We know the israelis have evacuated civilians from the lebanese border to kilometers out and this is the very delicate equation and also dangerous situation that President Biden flies into in tel aviv where we are getting air raid sirens at least twice a day. Kriti a crucial situation that does not seem to be abating any soon, wish you all the safety and the world. We thank you for joining us this morning. Lets go to the eu take on what is happening in the middle east. Eu leaders will meet today to discuss a common approach to the middle east conflict comes after the block announced a humanitarian aid bridge out of gaza with two flights expected this week. Lets get to maria in brussels. European leaders have been criticized for erratic policy on this issue in the last seven days. We have seen a lot of back and forth. What can we expect from today . Maria a huge back and forth and going into this meeting we should now take note, perhaps the tone of this meeting will change given the events that we saw play out yesterday in brussels. We talked about this at the top of the show, two People Killed and with the belgian Prime Minister now openly says what was a terrorist attack. You can imagine some of the National Security concerns may also play into this meeting which was called as a video conference. This is an extraordinary meeting that was not on the agenda but has been called to try to put an end to the cacophony we saw play out over the past week. At some of the objectives of the meeting before this took place in brussels was to coordinate the eu response. We know the European Union has said clearly they stand with israel but there is an issue of support and sensitivity. Political sensitivity when it comes to the Palestinian People we know the European Union has saidand to the humanitarian aide know that on the humanitarian front there has been a huge backandforth from the european commission. They now say they will triple that aid but that was in stark contrast to the review that they announced a week ago into that humanitarian aid. So it is unclear where it stands. We also know one of the key points in the media will be about the diplomacy behind the scenes but also it is stated by the eu not to escalate this conflict. Not to see it spread out into the region. However does the eu carry the geopolitics behind it . Do they have the power to play a meaningful role given the erratic behavior over the last week . A lot of the credibility has been eroded and with that meeting reinstated can they do it . It is still an open question. Kriti to be the face of that erratic policy is probably not the best place to be right now which brings me to the eus ursula, also criticized after her trip to israel. Is her job in jeopardy . Maria no. That would be the short answer to this. Is her reelection as a Commission President , i have heard a lot of rumors and speculation that has dominated the brussels press for two days as to whether or not she made a mistake by going to israel. Not the fact that she went israel to support the israeli people but the issue that got her in hot water here is the meeting she had with netanyahu. A lot of the european political spectrum has criticized turf sitting she should have been more critical and focused and repeating in front of the israeli Prime Minister that they have a duty to not hit civilians. This has been a very political controversy that has played out in brussels but not just really across the european press. I should know yesterday that the spokesman for the president again said this was a decision she made consciously. She wanted to show support to the people of israel and will continue to travel where she deems fit and will not apologize for the trip. They have however insisted that the commission is working on this humanitarian angle and the Prime Minister of israel and the president had a number of discussions. The content however has not been revealed. Kriti something where watching closely, thank you for joining us from brussels with a crystal report. From brussels we go abroad. Vladimir putin has arrived in beijing for the third belt and road forum, according to Chinese State media. Joining us now for mores bloombergs chief north asia correspondent live at the forum. Stephen, for an International Audience pivoting to the european trading day what do we need to know about this meeting . Stephen there are three main themes you can track here at the belt and road forum. It is the third and first one after the pandemic and the first one after all these global debt issues really surfaced in developing africa and elsewhere, like zambia. Of course china is one of the biggest creditors to africa and elsewhere in the asiapacific region to developing nations and their terms for repayment have said to been fairly tough. They are looking to recoup investments at a time when geopolitical shocks in the ukraine as well as now in the middle east are putting a greater burden on Debt Repayment and also the inflationary pressures that come with that. Right now that is the general background of the bri forum. At the backdrop of that is geopolitical issues with Vladimir Putin arriving this morning. How is that relationship going to go forward now that we are more than a year and a half into the ukraine war with no end in sight . By all accounts, by all the numbers we have seen, the economic relationship between russia and china is a no limits partnership between president xi and pollutant but the economic relationship has really been one way. Yes china is buying energy from russia but russias imports from china have increased 53 this year. And about half of the fx exchange and russia are now in you on. It was less than half a percent a year ago so you can see the reliance that russia has on china. That dynamic tomorrow morning when president xi jinping meets with vladamir putin is going to be key. The third point i wanted to mention is whats happening in the middle east. And what is the back channels negotiations and dialogue happening. Clearly we would like to get an update on what Vladimir Putin and xi jinping may say, i am not betting the farm we will get anything on that. On the sidelines it has been in state media so far yesterday and this morning, long the top diplomat foreign minister of china has spoken to his counterparts in israel, in saudi arabia, and turkey israel is to ron tehran. We know that Antony Blinken has spoken over the weekend with wong yi for about an hour to get china to use its influence on china to help deescalate. That is something along the also said he talked with officials, his counterpart in tehran. Deescalate and make sure there is not a humanitarian crisis in gaza if they can use their influence. It is also something the eus top diplomat joseph perella, he was in beijing this weekend and left before the bri started. The bri is the belt and Road Initiative. He said he had talks in person with wong yi about similar subjects. Kriti certainly something we will be watching closely and i think the common theme here from a markets perspective is what the translation is to oil. Tehran piece and i think the bull case right now rests with what happens in iran. Thank you our chief north asia correspondent joining us. I mention the oil story, lets add one more fact your venezuelas government will resume talks with the u. S. Backed opposition, it clears a path for the Biden Administration to ease some of the sanctions on the south American Country including on its oil industry. The deal includes allowing band opposition candidates to run in the 2024 president ial vote. This matters a lot because we know that exxon specifically had a big presence in venezuela. They had to shut it down when the u. S. Sanctions were put on and that did actually remove oil supply from the entire world. Now we are having these talks come back into play, does that mean a lot of these Global Big Oil companies can actually access a very oil rich country that is venezuela. We will keep you apprised, just those talks not really being priced into the market but brent crude trading shy of 90. The middle east farther in focus but it could be a counterbalance for some if we are talking about uranian output getting taken off the output market. That is one piece of the story we will bring you more as we discover it coming up on the show Goldman Sachs leading another big day for wall street banking. We will discuss a dive into that next, stick with us this is bloomberg. Kriti wall street giant Goldman Sachs is set to report earnings today ahead of the market open. At this comes a week after the bank announced an agreement to sell its green sky lending platform, all part of their decision to step back from consumer banking. It is not the only one on the agenda, bank of america do to report. Joining us now to get a little taste of what we might expect in the u. S. Session, charlie there are two pieces of the equation. Banking and trading revenue. Lets start with banking what do we see . Charlie on the Goldman Sachs front there have been such low expectations for investment banking. We are now going into the eighth straight quarter were goldman is expected to show a profit drop in a lot you can blame on investment banking. We have known for so long that activity has been muted. What we want to look for today is forward guidance, is there pent up demand for ipos or not . We have seen a string over this past fall. Will there be more coming up, that is the question people want to know . Kriti are we going to see an arm, instacart, birkenstock or was that just a brief flirtation with entering the ipo market . Talk to us a little about the trading revenue i asked in the context of Goldman Sachs making this big push in the commodity even jeff curry was expecting a super cycle and then things went solve south. Charlie trading is so important and the second piece of the puzzle for goldman. Expectations there are low but again if you put this into context last year was such a big year for trading it goldman and in a lot of ways the traders to save the bank in many senses. They would certainly say that. But it is expected to be muted down about 20 yearoveryear but of course last year it was so bumper for goldman. Kriti i love that you said traders would certainly say that you cant expect a trader to be that humble. It is part of the game you have to have an ego or you dont get paid. Talk to us about loan provisions here because as we talk about recession in the macro narrative i think tanks are a great gauge to say how much do we need to be prepared for a downturn . Charlie we thought that would be the dominant story of this earning session for Earnings Report season for banks but it was a little quieter at least last week. We have got bank of america coming up and they have had a troubled year. We look at their share price, it is down about 18 this year. They are expecting to show thirdquarter earningspershare up about half a percentage point but the focus really will be on the consumer because they have a huge retail unit. How bad do they think the consumer is going to fair in the quarters ahead. How much are they setting aside for some of these charge off loan loss provisions. I think that is going to be important and bank of america could get of us some indication today of what they see. Kriti it is something to watch closely because it does set the tone for Morgan Stanley as well reporting later in the week. It Charlie Wells diving through all of those earnings we are expecting. Thank you for the crucial report. Up next white rollsroyce is set to announce the deepest job cuts yet under its ceo. We are going to dive into it, stick with us, this is bloomberg. Kriti welcome back to daybreak europe, rollsroyce is set to announce deep job cuts which will target whitecollar employees including senior management. The ceo of the u. K. Manufacturer is streamlining the workforce in preparation for an upswing in demand for large aircraft engines. A representative client comment. Joining us now is our u. K. Correspondent all over the story. What do we actually know so far . Lizzie these are the deepest job cuts under this ceo about 6 of the staff and roughly half are in the u. K. Thing senior management. This ceo since taking over has managed to more than double the stock price more than presiding over this rebound and longdistance travel which means that there is a reignition of demand for large aircraft. Which means that rollsroyce can benefit and all of these job cuts are about catering to that shift and demand. Kriti thats not just the only piece of news we have on the job front. On the economic side we are getting some data as well coming out about 7 a. M. What are we expecting there . Lizzy there is an unusual bifurcation in this jobs data because of a delay in the responses to the surveys that make up the data that have skewed the numbers so markets are going to have to wait. Were going to get the payrolls and wage data today, the Employment Data next week. But what we are expecting in these numbers is a continuation of the cooling in the labor market. Your member the last bank of england decision when they held rates. The thorn in the boes sign it was the hot wage growth but nonetheless they went ahead with holding rates. You might expect this pivot to more forwardlooking indicators as we reach the peak of Table Mountain as they put it that we also heard from the chief economist the bank of england yesterday hinting that may be more hikes may be needed. As this persistent inflation which in my mind is associated is not uniquely but associated with domestic pricing decisions and wage numbers, these are the key indicators we have drawn out as indicators of the specific policy inflation. Here we have consistent amounts of inflation it seems natural that we have a persistent Monetary Policy too. Kriti markets will have to wait for the allimportant unemployment numbers next week. Lizzy we also get cpi tomorrow but moving in the right direction today will be a comfort for the boe. Kriti certainly something we will be watching closely in terms of the cable rate as well, 121 on the pound. Bloomberg u. K. Correspondent there thank you for the update, up next stick with us markets today begins in a few minutes. Or market analysis, geopolitics. This is bloomberg. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into its an amazing thing when you stream on the xfinity 10g network. When you show generosity of spirit to someone. And you want people to be saved and to have a better life, then you dont stop. The idea that we have saved five Million Peoples lives, its overwhelming. Its everything. Anna this is Bloomberg Markets live in london. Our live managing editor joins us from singapore to take us through all of the Market Action this hour. Tom