0:02

Bloomberg Audio Studios, podcasts,

0:05

radio news. This

0:10

is the Bloomberg Daybacurate podcast, available

0:12

every morning on Apple, Spotify or wherever

0:14

you listen. It's Tuesday, the sixteenth of

0:16

April in London. I'm Caroline Hepka.

0:18

And I'm Stephen Carroll. Coming up today. Military

0:21

officials in Israel vowed to strike back

0:23

against Iran as allies are a restraint.

0:26

China's growth beats expectations,

0:28

but a strong start to the year is already

0:30

fading.

0:31

Plus, the UK announces plans to criminalize

0:34

the creation of intimate deep fake

0:36

images, but how easy will it be to

0:38

enforce.

0:39

Let's start with a roundup of our top stories.

0:42

Israel's top military commander says the country

0:44

has no choice but to hit back

0:46

after Iran's weekend drone and missile

0:49

attack. In a speech to troops at

0:51

the airbase, which was targeted on Saturday

0:53

nights at Strike, Herzy Halev said

0:55

the missiles fired into Israel

0:58

will be met with a response. His

1:00

comments come as US and European officials

1:02

have boosted their calls to avoid an escalation.

1:05

Is what UK Prime Minister Ishi Sunak tell the House

1:07

of Commons.

1:08

We are working urgently with our allies

1:10

to de escalate the situation and

1:12

prevent further bloodshed. We want

1:14

to see karma heads prevail, and

1:16

we are directing all our diplomatic efforts

1:19

to that end. Yesterday I spoke

1:21

to my fellow G seven leaders. We

1:23

are united in our condemnation

1:26

of this attack. We discussed

1:28

further potential diplomatic measures

1:30

which we will be working together to coordinate

1:33

in the coming days. I will also shortly

1:36

be speaking to Prime Minister Netanyahoo to

1:38

express our solidarity with Israel

1:40

in the face of this attack and to discuss

1:42

how we can prevent further escalation

1:46

soon.

1:46

Next comments Echo, there was a French President, Emmanuel

1:48

Macron, who says France will do everything it

1:51

can to avoid flare ups. Meanwhile,

1:53

around Deputy Foreign Minister vowed to counter

1:55

any Israeli attack with a more severe,

1:58

faster, and more immediate blas in.

2:01

The United States. Events in the Middle

2:03

East mean a month's long Republican

2:05

blockade of military aid for

2:07

key allies could be about to end,

2:10

but getting a bill over the line still isn't

2:12

a done deal. As Bloomberg's head backs

2:14

to reports.

2:15

Speaker Mike Johnson is planning separate votes

2:17

this week on new aid to both Israel

2:20

and Ukraine. This in an attempt

2:22

to assemble fragile coalitions to

2:24

speed weaponry to both places.

2:26

We have terrorist in tyrants and terrible

2:29

leaders around the world.

2:30

Like Putin and g and in

2:32

Iran, and they're watching to see if

2:34

America will stand up for its allies

2:37

and in our own interest around the globe, and we will.

2:39

Now, his party majority is very slim, and he

2:41

may need Democrat support, and he very

2:44

well may get it. The mpasse over

2:46

eight has been dragging on since

2:48

October ed Baxter Bloomberg Radio.

2:52

China's economy grew faster than expected in

2:54

the first three months of twenty twenty four,

2:56

with GDP climbing five point three

2:58

percent from a year earlier, but the surprisingly

3:01

strong numbers were offset by industrial

3:03

production and retail sales figures for March

3:06

that were weaker than forecast. Blackrocks

3:08

Vice chairman Philip Hildebrand says one

3:10

strong print doesn't affect underlying

3:13

issues over time.

3:14

The challenge is going to be this domestic demand

3:17

problem and of course the fact that China

3:19

is really in deflation. So these

3:21

are big challenges. And then when you look Further down

3:23

the line you look at population growth

3:25

and so forth, you know, you really see

3:28

growth declining on a structural basis,

3:30

and that's going to be a challenge going forward. So

3:33

I'd say this as roughly as expected with

3:36

this big caveat around domestic demand.

3:39

Philip Helderbrand added many of these challenges

3:41

are far from unique to China

3:43

and reflect the state of the global

3:45

economy. The offshore you on held

3:47

losses having dipped earlier after

3:50

the week PBOC fixing.

3:52

Now the European Union is launching

3:55

a fleet of trade investigations into

3:57

China, saying that it has been played

4:00

for years. The block is threatening tariffs

4:02

on electric vehicles and investigating potentially

4:05

illegal Chinese support for wind,

4:07

solar, rail and the medical sectors.

4:10

Our Greater China editor John lu says

4:12

it's timing. Alongside German

4:14

leader Earla Schultz's visit to Beijing

4:17

is.

4:17

Clear exports is

4:19

something Beijing is hoping will

4:22

be a pillar that it can depend on to

4:24

get the economy going again. That's not

4:26

going to work if tariffs are being put in place

4:28

in Europe.

4:30

New ads that Schultz and she meet

4:33

earlier met earlier today and that the

4:35

German leader had said that trade would be top

4:37

of the agenda. Beijing has dismissed

4:39

charges that the rapid growth of its ev

4:41

industry was due to government's subsidies

4:44

as groundless, instead pointing

4:46

to its innovation prowess.

4:48

The New York FAD president John Williams still expects

4:50

the Central Bank to cut interest rates

4:53

this year. His comments come as a key US

4:55

inflation measure rose by more than expected

4:58

in March, prompting traders to scale ail

5:00

back bets on cutts. In twenty twenty

5:02

four, in an exclusive interview with

5:04

Bloomberg, John Williams said he expects

5:06

rate reductions this year as inflation

5:09

continues to gradually come down.

5:11

I think Marty policy is working at the rates

5:13

that we have now, so I think I

5:16

think Marte policy is in a good place.

5:18

We will need a start a process at

5:21

some point to bring interest rates back to more

5:23

normal levels, and my own view is that,

5:25

well, you know that process will

5:27

likely start this year, but

5:29

again it's going to be driven driven by the data

5:33

in achieving our goals.

5:34

Speaking to Bloomberg's Mike McKee, Williams also

5:37

pointed to strong consumer spending as

5:39

evidence of the country's economic strength. His

5:41

comments are somewhat at odds with those of fellow

5:43

voting member Mary Daily,

5:46

who says there's no urgency to alter

5:48

interest rates.

5:50

Analyst had expected Goldman Sachs's

5:52

first quarter profit to drop. Instead,

5:55

net income rose by twenty

5:57

eight percent, the impressive showing

6:00

BOOS CEO David Solomon, who had

6:02

faced a chorus of criticism about

6:04

his leadership.

6:05

We feel very good about our first quarter results,

6:07

which reflect the strength of our world class

6:09

and interconnected franchises and

6:11

the earnings power of our firm. This

6:14

performance was aided by the swift

6:16

actions we took last year to narrow our

6:18

strategic focus and played our core

6:20

strengths.

6:22

Solomon also echoed other US

6:25

finance CEO's caution about

6:27

the stock market's record highs

6:29

in spite of major global headwinds. Gomm

6:31

Sax's shares rose as much as six

6:33

percent, the most intra day since

6:35

December, before pairing some of

6:37

those gains.

6:39

The UK government is cracking down on explicit

6:41

deep fake images online. It's

6:44

part of a set of reforms aimed at preventing

6:46

violence against women. Poomberg's Tea

6:48

out of Bio has the details.

6:50

Creating and sharing sexually explicit

6:52

AI generated images could now

6:55

be punishable with jail time in the UK.

6:57

That's according to the Ministry of Justice,

6:59

who aiming to stem the rise of deep

7:01

fake pictures and videos made possible

7:04

by rapidly developing technology. A

7:06

potential new law will mean creating

7:09

such deep fakes without consent, even

7:11

if the images are not shared, could

7:13

mean prosecution, an unlimited

7:15

fine or prison. People

7:18

familiar with the matter say the government is

7:20

also planning talks with big tech giants

7:22

like Apple and Meta to persuade

7:24

them to sign a voluntary charter granting

7:27

parents more control over their teen's

7:29

social media use. In London,

7:31

Tea added Bayo Bloomberg Radio.

7:34

And those are our top stories this morning.

7:36

On the markets this hour, the MISI Asia

7:39

Pacific index is currently down one point eight

7:41

percent, US SOX fifty futures also

7:43

dropping one point two percent, and ten year

7:45

US treasury yields fairly steady at

7:47

four point sixty one percent this morning.

7:50

In a moment, we'll get the latest on the tensions in the

7:52

Middle East, plus some analysis of those

7:54

Chinese economic figures out

7:56

this morning. But another story that caught our

7:59

eye today, Alfa Romeo has

8:01

been forced to change the names of one of its cars

8:03

after it annoyed the Italian government. So the

8:06

suv was originally named Milano,

8:08

but last week the Industry Minister head

8:10

out at the CEO of Stillants, which owns the brand,

8:12

for using the name because the car is made in Poland.

8:16

As a result, CEO Carlistavirus

8:18

has said the car is going to be renamed Junior.

8:20

He said they worked over the weekend to change the

8:22

name. He said it's a signal of appeasement

8:25

as they have a big library of

8:27

names. But it's been an issue that the

8:29

company's been facing criticism over because

8:31

they have been moving jobs

8:34

abroad, essentially to lower production sites.

8:36

And if you frustrate the unions and

8:38

it becomes a sort of political issue,

8:41

then I mean that's the trouble,

8:43

isn't it, Because Italian workers have

8:45

been striking because

8:47

of the loss of jobs. So yes, amazing

8:50

what is in a name and how frustrating

8:52

it can be to politicians they.

8:54

Said no to Milano. Anyway, More

8:57

on that story you'll find on Bloomberg

8:59

to Common on the terminal, But let's go

9:01

back to our top story now. In Israeli is still weighing

9:04

its options on how to respond to around weekend

9:06

drone and missile attack. European and

9:09

US leaders have called for restraint, but Israeli military

9:11

officials say the country has no choice

9:13

but to respond. Our Meadileas Breaking News

9:15

editor Patrick Sykes is with us for more.

9:18

Patrick, what do we know about the options that

9:20

are under consideration by Israel morning?

9:23

Yes, the Israeli War Cabinet

9:25

met for a second day yesterday, but there's still

9:28

no final position yet. Israeli

9:30

official saying at least publicly that, as

9:32

you say, they have no choice to respond, but

9:35

keeping relatively quiet on the specific options.

9:38

They're also pointing out their respond at a time

9:41

of their choosing. I

9:43

think we can think about the sort of range

9:45

of options on their table from

9:49

the least escalatory right through to the

9:51

most as being you know, on the former side of the spectrum,

9:54

a direct strike on something related

9:57

to the Iranian weekend strike

9:59

which involved missiles and

10:01

drones, through to obviously

10:03

Iran's nuclear program, are much more much

10:06

longer term, longer term thorn in

10:08

Israel. Israel's side and something that

10:10

it sees as an extential threat.

10:13

The closer we are to the

10:15

lower end of that spectrum, I think the

10:18

greater the chances that this either

10:21

ends there or fizzles out, the great

10:23

the further we are to the latter. I think

10:26

the in term we're going to see Iran also

10:28

feel that it needs to respond, and

10:30

so it continues.

10:32

Yeah, and so there have also been

10:34

a lot of calls for restraint from

10:37

Israel's allies, and perhaps that is

10:39

weighing. Then, given you know that the

10:42

deliberations and how difficult they are,

10:45

is there any sign that the calls around

10:47

restraint are weighing on the decision

10:49

making weighing on Benjamin at Niau, I.

10:53

Think only in an absence we could

10:55

say. Really the only sign of that is that Netta,

10:58

who's personal term on this has

11:00

been relatively more measured compared

11:02

with some of the right wing parts

11:05

of his cabinet. One cabinet member

11:07

yesterday said Israel should go berserk

11:10

as a deterrance to Iran from

11:12

doing future strikes

11:15

like that of last weekend. I

11:17

think the odd thing here is it's kind of parallel

11:19

with the Iranian position of a few weeks ago, right

11:22

when they were considering how to respond

11:24

to this suspected Israeli attack

11:26

on their consulate in Damascus,

11:28

where you had parts of the government,

11:30

the regime officials, saying

11:33

that we need to act right away, we need to be

11:35

really aggressive, and then others saying,

11:37

hang on, we need to show restraint, we need

11:40

to think about this more strategically.

11:42

So I think, in an odd parallel way,

11:45

the fate of the whole issue

11:48

is going to depend on which side of those

11:51

cabinets and power dynamics went out.

11:54

Padrick, what's the latest that we've heard from Iran on

11:56

this? What are they preparing for?

12:00

Yeah, their message is and it has been

12:02

from the start, really, it has been one of the Terrans

12:04

saying they're very keen to

12:06

frame what they did as a one off,

12:09

not as a start of a broader conflict.

12:11

They say they're not looking for a broader conflict.

12:14

They also frame what they did as an

12:16

act of self defense, as I said, in reaction

12:19

to that strike on the consulate, But

12:23

they are at the same time given this veiled

12:25

threat that if Israel does respond,

12:29

then we will we will

12:31

be forced to do so ourselves as

12:33

well. And obviously it's that Shane reaction

12:35

risk that's the real risk here,

12:38

rather than I think any individual

12:40

strike we had the Uranian deputy Foreign

12:43

Minister overnight, saying that they

12:45

would counter any Israeli attack with

12:47

a quote more severe, faster and

12:49

more immediate blow. So, you

12:52

know, rather than the last time, where Iran waited

12:54

I think around twelve days not quite

12:56

two weeks before undertaking

12:59

its attack, He's given the impression,

13:01

you know, with each retaliation, the gaps

13:03

between them are going to get strong, going to get shorter,

13:06

and the gravity of them is only going to

13:08

get greater.

13:08

That's the risk, Okay, indeed

13:11

the risk. Patrick, Thank you so much for being with

13:13

us. Patrick Sykes is our Middle East Breaking

13:15

News editor.

13:17

To China next, where the economy grew more

13:19

than expected in the first three

13:21

months of the year, growth boosted

13:23

by the industrial sector, but there were signs of weakness

13:25

emerging in March. Our Asia Economics

13:27

correspondent Katia Dimitrieva joins us

13:29

now for more. Katy, are great to have you on. What's

13:32

the good news? First of all in these numbers,

13:34

well, we.

13:34

Can talk about factories. I

13:37

think that was the one piece of very good,

13:39

very strong news in the GDP report.

13:42

Of course, growth coming in higher

13:44

than any economist had forecast,

13:47

and it was really led by this portion

13:49

of GDP, which is secondary

13:53

market so secondary industry is

13:55

you could think of that as factories

13:57

and exports. We kind of knew that's story

14:00

going into these numbers because

14:02

of the strong exports growth in the first two

14:04

months of the year, but already kind of sizzling

14:07

in fizzling rather in March.

14:10

You look outside of manufacturing, though, and there

14:13

isn't really much to be very

14:15

happy about in the economy consumer

14:18

side. It was particularly weak when it

14:20

came to retail sales, real estate

14:22

market also sales and prices

14:26

declining further. And even

14:28

on the headline GDP, you know, we

14:30

look at the effect of deflation, the

14:33

effect of prices kind of being lower

14:36

in the past few quarters, and the GDP

14:38

deflator actually was below

14:40

zero again for another quarter.

14:43

So this is all around.

14:45

You know. The headline number is good, Factories

14:48

are strong, Manufacturing demand abroad

14:50

is strong, particularly in the US, but

14:53

there are so many other, so

14:56

many other headwinds this year for China.

14:58

Yeah, absolutely, so maybe the on

15:00

some thin ice. The other issue

15:03

the German chance that Olaf Schultz has met

15:05

with the Chinese president she after

15:07

issuing this warning about over capacity and the treatment

15:10

of foreign firms. It comes as the EUS also

15:12

launching all of these investigations

15:14

into China. It was Margareta Vesiga

15:17

who talked about, you know, the

15:19

EU being played and that teaches

15:21

you a lesson. I mean, that's quite change in tone

15:24

by Europe towards China.

15:27

Yeah, and these two things are in

15:29

fact connected. When you

15:31

have an economy like China that's

15:33

already under a lot of pressure

15:36

from the West, both the US and Europe to

15:39

stop this kind of you

15:41

know, they say over capacity issue,

15:43

but what that really means is

15:46

that Western nations are concerned about

15:48

dumping about China kind

15:50

of inflating by helping

15:53

local companies, domestic companies over

15:55

foreign companies, kind of lower their

15:57

prices and export

15:59

the goods into markets where they're going to be competing

16:02

with the US and with the European companies.

16:04

And so if you have an economy that's driven

16:07

largely by that, and that's really the one

16:10

leg on the three leg stool, if

16:12

you want to say, that's going to be supporting the economy throughout

16:14

the year. Of course these other countries

16:16

are going to be. Their ears

16:18

are kind of perking up right now, probably when they saw

16:21

this data and thinking, okay, what does

16:23

this mean for the rest of the year. This is

16:25

something that US Treasury Secretary

16:27

Jennet Yellen also mentioned, as my

16:29

colleague Eric Martin reported very same

16:31

issue will be coming up the IMF meetings.

16:36

This is Bloomberg Daybreak Europe, your morning

16:38

brief on the stories making news from London

16:40

to Wall Street and beyond.

16:42

Look for us on your podcast feed every

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morning on Apple, Spotify, and anywhere

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else you get your podcasts.

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You can also listen live each morning on London

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and Bloomberg dot Com.

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17:02

I'm Caroline Hepka and I'm Stephen Carol.

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Join us again tomorrow morning for all the news

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you need to start your day right here on

17:08

Bloomberg Daybreak Europe