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This is the Bloomberg Daybakut podcast, available every morning on Apple, Spotify or wherever you listen. It's Wednesday, the twenty seventh of March. Here in London. I'm Caroline Hepka and.
I'm Lizzie Burden. Coming up today the latest on the Baltimore Bridge collapse disaster. As emergency services moved from rescue to recovery.
The Japanese yen hits its lowest level against the dollars since the nineties, as Japan moves a step closer to currency intervention.
Plus, you can't buy happiness, but you can buy chocolate. But as the price of coco hits a record high, it's likely to cost you a whole lot more.
Let's start with a roundup of our top stories.
Six people are presumed dead following the collapse of Baltimore's Francis Scott Key Bridge after it was struck by a container ship. More from Boomberg's Dan Schwartzman.
Now, the search for survivors at the Francis Scott Key Bridge collapse site in Baltimore, Maryland was suspended overnight, with the six people missing deemed to be deceased. The six were construction workers from a business called Browner Builders, and we're doing repair work on the bridge. Coastguard Rear Admiral Shannon Gilreath explains why the operation was transitioning to a new phase.
Based on the length of time that we've gone in the search, the extensive search efforts that we've put into it, the water temperature that at this point we do not believe that we're going to find any of these individuals still alive.
That's Coastguard Rear Admiral Shannon Gilreath. The search for the missing is resuming this morning. Dan Schwartzman, Bloomberg Radio.
The incident also adds pressure to already strained global supply chains, Baltimore being one of the busiest ports on the US East Coast.
Now.
The Japanese y end slid to its lowest against the US dollars is nineteen ninety, with Japan's Finance minister warning of bold action. The Cauncy's pair slid to one hundred and fifty one ninety seven in trading this morning, before pulling back when Minister Shinichi Zuki hinted at potential intervention that is past the level that prompted Japan to weighed
into markets. In October twenty twenty two, hedge funds and asset managers combined held a near record level of bearish positions against Japan's currency last week.
As many as eight million UK workers are at risk of losing their jobs to AI. This according to a think tank, The Institute for Public Policy Research, is forecasting that the new technology could add three hundred and six billion pounds a year to the UK economy or wype out nearly a quarter of its jobs. James Wilcock has.
More a job's apocalypse. That's what the IPPR is calling it. They analyzed twenty thousand tasks in the UK across all job types to see how easy they could be to automate. What emerged is a sesaw model. In the worst case scenario, seven point nine million jobs are lost to no economic gain. In the best case scenario, zero jobs are lost to the tune of thirteen percent and your GDP growth. LinkedIn's UK boss Jean Chamberlain is on the optimistic side.
This is really important to kind of consider what does AI actually provide.
It doesn't replace someone's job.
This is just about giving people a helping hend a starting point.
But for the IPPR it's a bleaker outlook. They say. The key factor in where on the seesaw we end up is how government plans the labor forces transition to AI, and currently they say there isn't one in London, James Walcock, Bloomberg Radio.
Meanwhile, more than a quarter of UK tech businesses want to sell their firm abroad. A Berkeley survey of tech founders exit strategies found that sixteen percent want to sell their firms to a foreign buyer and ten percent would sell shares abroad. More than half said that the lack of funding, talent and infrastructure is holding back their company's growth.
The data suggests that Prime Minister is she Sunac still has work to do to persuade British companies to stay in the UK as they try to scale up.
Coco futures reached a record ten thousand dollars per metric ton this week. The commodity has since raised those gains, taking a break from a historic rally which has seen prices double in twenty twenty four. Poor harvests from West African growers ravaged by bad weather have spurred a third straight annual Coco supply deficit, which has sent prices soaring. Bloomberg's on duro a Ganga says there are a number of factors behind the production slow down.
Ghana has also been having challenges with regards to financing and so the government was not able to adequately subsidize fertilizer. Internationally, we are also seeing their new rules incoming in Europe which will block Coco that destroys for US and has child libor in the Coco production Valichin from heating.
The market, Bloomberg's on duero Oganga speaking there. Pressures are also building in the financial market, where some traders have sold futures to hedge against the physical holdings.
Now, former President Donald Trump's social media startup sort in its first trading day as a public company. Here's the moment that Bluemok's cowl Massa called Trump Media and Technology Group at the.
Close uppermost sixty percent. It ties today it's first official day of trading. We know it was a spac and so of course a merger with Digital World acquisition. It's an unprofitable company. This is something that we've been trying to dig into a little bit more today finishing the day with a sixteen percent gain, but soaring. It did also trigger a brief volatively related trading hot but nonetheless, as I said, some outperformance in that one day two will be an interesting trade, no doubt.
So Blombog's Carol Massa there She says that the now seven point nine billion dollar valued company has a meme like appeal. It's become the most expensive US dot T bet against. Short Sellers are having to pay up to three hundred times the average cost to borrow its shares. There are a very tiny amount of shares actually available to borrow this according to the financial analytics firm S
three Partners. So that on the presence former presidents social media start up behind Truth Social now a search and rescue operation for survivors of the collapse Francis Scott Key Bridge in the US city of Baltimore has been suspended. Officials say that they are now transitioning their efforts to
recovery missions. With six people presumed dead, the aftermath of the bridge is collapse throws another spotlight on the fragile nature of global supply chains that have already been strained by the drought in the Panama and missile attacks in the Red Sea. Our trades are Brendan Murray joins US. Now we understand the bridge collapse will cause weeks, if not months of trade disruptions.
Yeah, exactly. I think that the initial and the next steps are going to be a lot of finger pointing at how this happened. You know, how did the ship itself not have a backup system if it's power failed, Why did the bridge pilings not have fenders around them, some protective equipment around them, And how did a bridge collapse so easy and so thoroughly in this situation. The immediate effect on supply chains is going to be the
Port of Baltimore has closed indefinitely. They're going to have, you know, weeks or months of salvage operations to clean up the site. All that cargo is going to have to go somewhere else, places like Norfolk, Virginia, Charleston, South Carolina, Savannah, Georgia. The big ships will have to go to New York and New Jersey. So there's going to be a period where supply chains have these wrinkles that need to be
ironed out. It's going to be it's going to mean delays for people and businesses for their parts and their products, and it's going to possibly mean some higher costs in the short term.
And BRENDA just give us a sense of the scale of the trade that was going through this port. You had lots of cars and light trucks going through it. How does it compare to other sorts of blockages that we've seen in Maine waterways.
So Baltimore has about three percent of the cargo volume on the US East Coast and Gulf Coast, so it's a small amount of containerized cargo that goes through there, but as you mentioned, it's a big auto export and import gateway. So a lot of the companies that ship their cars in and out of their companies like BMW and Volkswagen and Ford and GM, some of them have docks that are not affected by this, they're on the ocean side of the bridge. Some of them will have
operations that will be affected. So we'll have to sort of pick through the situation on the ground there to see which ones will be affected and which ones.
Won't, And if we zoom out, what's the kind of big picture read through to global trade and the ability of these isolated events to impact global flows.
So there isn't going to be a widespread impact, but there will be isolated situations. Baltimore was also a big coal export port, so it's and a lot of that went to developing countries, say India, so you know that still use a lot of coal for fuel. So there will be isolated situations like that. There was a lot of construction equipment that went through Baltimore. You know, it's coming up on spring in the construction season, and a
lot of farm equipment went through there. It's you know, a couple month or two from planting season for a lot of farmers in the Midwest. So there will be some isolated industries that are affected, but most of the economs we talked to says it won't really mean much of a blip on the US economy as a whole, or really any more widespread effect on the global economy.
Okay, Brendan Murray our trade, So thank you so much for bringing us the trade impact of that story. Of course, it's also had a serious human toll, six people presumed dead, and we will continue to bring you the latest on that story throughout the program.
Now let's also turn our attention though to the main market story. This morning, Japan is edging close it would seem to currency intervention, with its strongest warning yet from the Finance Minister, Janezi Suzuki say we will take bold measures against successive moves without ruling out any options. That is, the Japanese yen slid to the weakest level in about thirty four years against the US dollar. So joining us now for more on this developing story. Bloomberg's executive editor
for Asian Markets, Paul Dobson, Paul, good morning. Just explain what is behind the slide in the Japanese currency. Firstly, yeah, hi theren thanks for having me. It's quite contrarian kind of a move by the in actual fact, because just this month we saw the Bank of Japan raise interest rates, taking it out of negative territory for the first time in more than a decade. No normally that should lift the currency, and yet we're still seeing more yen weakness.
So there's a few things that would explain parts of the reason for that. First of all, while the boj did hikit stressed that it was going to be cautious in moves from here, talking about retaining a commensative stance as well, and that sort of emphasized the still huge gap in relative yields between Japan and the rest of the world and the US in particular, so traders looking at carried trades and where to deposit their money going to earn much higher interest rates in dollars than they
are in yen. On top of that, you know, the fact that it was just so well telegraphed by the BJ that we knew that this was coming also in the end help them, you know, move it through without causing too much market volatility, but didn't give them any
any boost in terms of yen strength. And so that in addition to some of the currency weakness, and then over the other side of the trade, you've got a stronger dollar as people continue to push back those bets for when the FED will begin to cut interest rates on the other side of things. So those things combined have provided this backdrop for a week a yen.
Today.
In particular, we heard from one of the BJ's more hawkish members, and he again stressed that kind of a commotative position, and so that was taken as a bit of a red rag to a bull as it were, for the currency market, pushing it through those levels that we've been watching for some time around the one point fifty one ninety five level.
Paul can just spell out for us, when the finance minister says that they'll take bold measures against excessive moves, what does that mean.
Yeah, well, so there's almost like a traffic light signal system from the finance ministry. Remember it's the government, not the central bank that intervenes in currency markets in Japan, so they have a sort of scale of warnings, and the market is so used to detecting the changes in tone depending on the rhetoric that's chosen by the officials.
So this latest comment bold action is another step up in terms of sort of getting the market ready for the possibility that the government would step into the market and begin buying the yen in order to support it. We're not there yet, and there are still perhaps a couple of extra levels on the Richter scale of warnings from the MOF, but we're getting pretty close. So they're telling us that they're serious about this right now.
And it can get expensive. I mean, in twenty twenty two, Tokyo spent you know, billions in terms of supporting the yen.
It can, but I think the view both the government and the Central Bank for that matter, is that a week en from here is not really helpful. Well, in the past, a week een would help Japanese exporters, that would help to counter balance, you know, some of the stresses in the market. At these levels, those exporters don't really stand to benefit that much more. On the flip side of it, the weaker exchange trait makes inflation a little bit more unruly and undesirable, so they're minded to
protect it even if it costs. What they say is they don't mind if it's weakening so much. It's not the outright level so much as the pace of depreciation. But I think that probably in the aftermath of that hike from the central bank, the last thing that they want to see is too rapid depreciation of the currency. From here.
And Paul, you've seen this powering the nick closing three tenser percent off a record high. How much is that down to the yen and this story about currency intervention the BOJ how much is it about fundamentals in Japanese equities.
Yeah, well a little bit half and half, I would say, you know, so, based on what I just said that a week yen from here is that helpful for exporters. Nevertheless, you know does have some supportive function for the equities market, and so you would see a little bit of strength off the back of that. But there's a pretty good news story in the backdrop for Japanese companies in general anyway.
They're able to raise prices, which is something that was quite surprising or even on thought of a few years ago. But this inflationary environment is enabling them to widen their profit margins and without fear of driving away customers. They also are taking steps to improve their corporate governance right across the board, unwinding kind of cross shareholdings, getting rid of so much cash that they have pent up on
the balance sheet, and looking to expansion as well. So there's quite a good feel good facts are behind the moves. So even if you're looking at Japanese equities measured in the dollar rather than the end, they've still been on a pretty good upward path this year.
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