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This is the Blueberg Day BAQ podcast. Good morning, It's Friday, the eleventh of July. I'm Caroline Hebket in London.
And I'm Stephen Carolin Brussels. Coming up today. US President Donald Trump raises the prospect of higher global tariffs after threatening Canada with a thirty five percent rate on some goods.
JP Morgan's Jamie Darman tells European leaders they're losing to the US and China as he warns of market complacency over tariffs.
Plus the inside story of the former Morgan Stanley banker shaking up Santander's wealth business and why not Everyone is Happy.
Let's start with a roundup of our top stories.
US President Donald Trump now says he's eyeing blanket tariffs of fifteen to twenty percent on most trading partners. The comments in a phone interview with NBC News would mark a significant increase in the current US global baseline of ten percent. The President also reportedly dismissed concerns that further tariffs could negatively affect stocks or inflation, pointing to recent
rises in the US equity market. Stefan Hoffer, Asia, chief investment stratist at LGT Bank says in the long term, the impact of tariffs is far harder to assess.
Frankly, we are in uncharted territory. We've never seen anything like this. There is no playbook for this. We've gone from an effective import tariff pre President Trump's second second presidency of just below two percent to the Liberation Day twenty seven percent down to you know, it's a moving target and these kind of distortions are very, very difficult to map out onto a model where we land finally.
Stefan Hoffer speaking there as US stock futures have turned weaker and the greenback has climbed against major piers on the Latest News Well.
Separately, in a post on truth Social Trump said that the US will impose a tariff of thirty five percent on Canadian products starting on the first of August. Now that will be ten percent higher than the current rate applied to all goods not covered under the existing US Mexico Canada free Trade Agreement. Bloomberg's Jill Desis says the White House is so far signaling that the free trade agreement holds this.
US and CA that the trade agreement between the US and Canada and Mexico that those goods aren't included in this thirty five percent tariff threat. I think that's really really important because what that ultimately tells us then is
that what Trump's ultimately doing. It appears, and again I have to caution this is a very quickly evolving story, but what that does mean potentially is that this is essentially a ten percent tariff increase over a group of goods that were covered already with a twenty five percent tariffs.
Bloombergs, Gilds is there in response to the US person's threat, Canada's Prime Minister, Martin Karney so that he would continue to defend workers and businesses. A large proportion of Canada's exports to the US do fall under the rules of the USMCA, so would be unaffected by the new rate.
I mean, while Jamie Diamond is sounding a warning about the muted market reaction to tariffs. Speaking at an event in Dublin hosted by Ireland's Foreign Ministry, the JP Morgan CEO said, unfortunately, I think there is complacency. The Wall Street stalwart also weighed in and what he believes is a major European competitiveness problem, as Bimbrooks Crispets reports.
You're losing. That's the stark assessment of Jamie Diamond, who says the EU has a huge problem at the moment when it comes to competitiveness, citing the region's sluggish growth. The JP Morgan boss pointed out that Europe's economic weight has declined significantly, falling from ninety percent of USGDP to just over sixty five percent in the past ten to fifteen years. He says the best way to reverse that decline is to build an internal market that functions more
effectively across all industries. Diamonds comments come as the EU seeks to conclude an intram trade deal with the US that could allow the block to lock in a ten percent tariff rate beyond the August first deadline as they negotiate a permanent agreement in London Crispit Bloomberg Radio.
French Prime Minister Francois Beroux has called on the European Central Bank to do more to support the economy as his government struggles to contain a budget deficit and slowing growth in France. In an interview with LC Television, Beayrou said he dreams of the ECB, quote feeling it has a role to play for growth in the EU, in other words, to support activity rather than putting brakes on it.
He added that rate cuts were a possible option. His comments represent a rare critique of the Central Bank, which has already delivered eight cuts in a year to bring boring costs to two percent. During a contrast between the ECB and the Federal Reserve, Beairu said that France faces similar challenges to the US, but without the strong dollar that gives the FED the option to create money and fuel optimism in the economy.
UK's Prime Minister Kiir Starmer says he's agreed to what he calls a groundbreaking deal to return small boat migrants to France. The British leaders agreed to a pilot's scheme with the French President Emmanuel Macrart Downing Street. He says the agreement will mean for every person sent back, the UK will accept an asylum seeker who hasn't attempted an illegal crossing.
This will show others trying to make the same journey that it will be in vain, and the jobs they've been promised in the UK will no longer exist because of the nationwide crackdown we're delivering on illegal working.
Starmer has been politically damaged by record numbers of people crossing the English Channel in small boats. Roughly twenty one thousand illegal migrants have made the journey so far this year.
President Donald Trump says that he plans to make a major state went on Russia on Monday, as the US prepares to send more American weapons to Ukraine paid for by NATO allies. In a telephone interview with NBC News, Trump said that he also expects the Senate to pass a quote biting sanctions bill on Russia after he criticized Vladimir Putin for his continued attacks on Ukraine. Russia has been pounding Kiev and other Ukrainian cities with record numbers
of drones and missiles. Ukrainian President Vladimir Zelinski was optimistic though about more aid, at a meeting of US and European allies in Rome.
We must stop Russian droms and missiles, and these means more air defense supplies and more investments in interceptor drowns, air defense systems, and of course fissans and I urged all our partners, increase your investments when Russia increases its attacks. We cannot have a shortage of funding for drum production.
And Zelinsky speaking there at the Ukraine Recovery Conference in Rome, where allies announced more than ten billion euros in additional funding, the Ukrainian leader said that he since had a positive dialogue with President Trump over the delivery of Patriot air defense batteries with.
Those are your top stories on the markets. The Bloomberg Dollar Spot Index two tenths stronger this morning, so the Euro is weaker at one sixteen seventy seven, the pound at one thirty five fifty seven. The Canadian dollar is three tenths weaker this morning at one thirty six ninety seven. On equity markets, after the record finished the S and P five hundred yesterday, features are two tenths lower for SMP Emini's European stop futures down two tenths of one percent this morning as well.
In a moment, more on how markets are reading the latest moves by Donald Trump on trade, plus the rising style banker who is shaking things up at a traditionally stayed unit of Spain's Santander. But before we get to that a word on our story that we've been reading about this morning. The UK is set to end issuing of paper share certificates.
Yeah, this is a story for our colleagues Joe Mays and Tom Reese saying the Chancellor is going to announce this in the her Mansion House speech next week. It's something that the industry has long sought. It's been an end of an era though. I mean, this has been a tradition that's been around for four hundred years. You get a paper certificate when you have a share, and there's a paper registry to log all of these as well. And essentially this is part of a digital shift happens
in other parts of the world. It's enforced in the European Union since the start of this year for existing securities and going back to try to tage three for new shares being issued as well. It's been recommended for a long time. It's going to, according to the Chancellor, going to reduce the costs for business and sports. We're going to have to hold these paper certificates.
No, I mean, look, I get the argument right.
It would be much but much better to digitize if it's quicker and cheaper. Although having a share certificate, you know, if you want to get into the weeds of it, it does give you a direct relationship with the company, right they have to write to you, and then you get to go to the AGM, you get to vote and so on. So you know, there is obviously that bizire of people that if you go, if you digitize it, that you keep the same rights if you're a shareholder.
It also makes less exciting if you move into a new house and you're clearing out an attic and you can find a box with things in it that doesn't you know that's not going to happen anymore.
Yeah, exactly listen that you know, maybe that Sharon Apple, that's somebody buried.
Yeah, it would be quite useful, now, wouldn't it.
Thought exactly. Well, let's get back to the market's conversation around how investors are thinking about the latest set of trade headlines. So Donald Trump ramping up his rhetoric when it comes to Canada, threatening those higher tariffs and saying the EU may get a tariff letter as soon as today. On Markets Life Strash as Mark Cranfield is with us for more. Mark, great to talk to you. Can you just explain to us how markets reacted to those Canada headlines.
So we had the threat of a higher tariff, but then some mitigation in maintaining the exceptions under the existing trade deal.
Yeah, yet another whipplush day, especially the foreign exchange market. You look at the Canadian do that's probably a good example of how people have been reacting to it. We saw the cadiing dollar weeken dramatically at first, and then gradually clawback some of its strength as the bit more information came through. It's still weaker on the day, but nowhere near as bad as it was first thing. This morning,
the dollar is slightly firmer overall. But there is one very clear interesting theme emerging in the foreign exchange market, and that's the divergence between the Chinese yuan and the Japanese yen. They're going in opposite directions, and that just shows that traders are looking beyond tariffs. There's also local themes that play as well. You've got the Chinese central bank supporting its currency, wants to have a strong, stable currency,
and then you've got local issues in Japan. They're coming up towards upper house elections, which look as though it's going to be a very close call. No one's too sure how it's going to go. And then Japan struggle to try and get a trade deal with the United States, which doesn't seem to be moving forward very well, and
the yen is suffering because of that. So even within all the choppy movements that we've seen today, we are getting a bit of a theme appearing in the foreign exchange market where the winners are graining a bit more traction, the losers are just losing even more ground.
What do you think it tells us about how markets are treating all of these trade headlines.
Is it fatigue frustration?
There's certainly a bit of headline fatigue on that the fact that we often traders are used to hearing that trade letters are going out or they're about to trawis about to be imposed, but then there's a negotiation period,
so it doesn't actually hit straight away. So people are getting used to the fact that they shouldn't read too much into it, they shouldn't price it fully into the market, and yet they need to some extent to be aware of what's happening in there, and yet it's happening so frequently.
Of course, people are wondering whether or not they should even trade it at all, particularly when you see things like the US stock market continuing to grind higher, making new records, Bitcoin making new records, and some parts of the markets seemingly unaffected by what charists are doing at all. So there's no uniformity anymore. If they go back to say Liberation Day, when the whole Swaver things were first announced, it was just negative across financial markets. The conditions have
changed quite a bit now. People are being more discerning between different aspects of that, and that's something that's beginning to play out a bit more.
Okay, Mark Crinfield, our market's life strastis thank you very much for joining us.
To Spain now, where a former Morgan Stanley banker is shaking up Santander's unique catering for the bank's richest customers and not everyone is happy about it. Our Spanish equities reporter Macarena Munuos Monjano joins us now for more on this and welcome to the program. Macarena tell us about Haavier Garcia Carranza, who he is and how he's changing things to this part of Santander that were seen as really quite stayed before.
Hi.
Good morning.
Yes. So the bank last year point at Ergatia Carranza as the global head of its wealth unit, which includes private banking, asset management and the insurance business. And he has made some big changes at the unit. He used to be an investment banker at Morgan Stanley and joined the Spanish bank in twenty sixteen. So in his new
role he has changed a number of managers. He's cutting costs, he's boosting some new businesses such as independent advisement in private banking or the life and pension business in insurance. So this unit is a relatively small one. It represents like thirteen percent of the bank's profit, but it's a very profitable one with a seventy percent return on tange global equity. And the aim is that it keeps growing. We hear these years should grow at a double digit.
Okay, now you've put apportioned that some bankers are nervous about the changes that he's making in that unit.
Why well, So as part of the changes there are some job cuts. We year, it's about ten percent of the stuff in the unit. But also the bank is hiring some top talent from other lenders, so they brought a private banker from Julius bar They are also hiring people from Caisher Bank, so it's kind of a mix. But the net number is a ten percent reduction. So that's why what it's causing the nervousness.
Okay, nervousness.
How do the changes then fit into the broader future strategy in the picture for Santander.
Well, so this is a key area for the bank as it looks to boost fees now that interest rates are lower so and that is hurting the lending revenue. So this is how so growing in fees is key and this business of private banking, asset management and insurance is a great fee generator. So this is a key area for the bank.
Okay, Makarana, thank you very much for joining us. Makarnemnos Montano. They're joining us from Madrid with the latest on that story, and you can read the full story on Bloomberg dot com and on the terminal as well of Macarenas reporting rising star at Santander shakes up the bank's stayed wealth business.
A really interesting moment to be looking, of course at how Santander is moving things around given the upheaval that we've seen in so many parts of the European banking sector of various talk about mergers and acquisitions as well. In fact, even the commerce bank build for uniw Credit. I note this morning that there's some commentary out of one of the German ministers as well talking about that deal,
which we know has been quite controversial about. You know that the German government has been kind of watching very closely as as UNI Credit has been ramping up at stake in commerce.
Bank, cross border deals in finance and banking. Controversial, yes, still in Europe, that is the case.
You know.
It was a really interesting piece also because Girlcia Kranz of course was here in London, based in London for Morgus Stanley before going to Santander and shaking things up.
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