Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Daybacurate podcast, available every morning on Apple, Spotify or wherever you listen. It's Monday, the twenty fifth of March in London. I'm Caroline HEPKEA coming up today. As the deathtop from the Moscow concert hall attack continues to rise, Putin makes
furious claims of Ukrainian involvement. Once bitten twice, not so shy global bond traders once again load up on rate cut wages and deadline day for Donald Trump, the presidential contender faces having his assets seized unless he posts a court bond worth more than half a billion dollars. Let's start with a roundup of our top stories. Russia has charged four men in connection with the Moscow concert hall terrorist attack, in which at least one hundred and thirty
seven people were killed. The men had a number of viable of injuries and one needed treatment during the heat hearing. The court ordered that all four be detained until the trial in May. Islamic State has taken responsibility for the attack and posted footage of the assault, but Vladimir Putin and other officials have made vague claims of Ukrainian involvement. That is something that Vladimir Zelenski has strenuously denied.
It's just it's obvious that both Putin and others are trying to shoot responsibility on someone else. They've already been blowing up houses, shootings and explosions, and they always blame others.
The Ukrainian President's comments, spoken there by a translator, come amid concerns that Putin could use the attack to justify a new mass mobilization of troops for the ongoing invasion of the country. On Friday, Russia unleashed the biggest missile and drone assault on Ukraine so far this year. French authorities have raised their security alert level to the maximum
following the deadly attack on Friday in Moscow. The Prime Minister Gabrielle Attal said that the increased country wide awareness level was justified given the quote Islamic states claim that it was responsible for the attack and the threats weighing on our country. Attal made the announcement in a tweet on Sunday evening, following a Defense and Security Council meeting
organized by President Immanu and Maco. At the Elise Palace. Meanwhile, in markets, bond traders are once again betting that the Third ECB and Bank of England are close to cutting rates. After entering the year banking on March, rates, traders are now leaning towards June as the start of the easing cycle. But after previous bets that central banks would be swift to loosen monetary policy backfired, consensus is now building that this time things are different. Matthew A. Dixon is the
head of fixed income strategy at Bank of America. He says that we still haven't see the full effects of rate hikes.
It takes twelve to twenty four months for rate hikes to actually impact the economy. So if you're looking at a lagging economic intoget inflation and the rate leg come back and talk to me first half for twenty twenty five to the back half of twenty twenty five and tell me if rate hikes haven't worked. So they've gotten the soft slash, no landing, they're going to continue to
play for that. With one hundred and seventy million people in the labor force, every one percent increasing employment, what's about too many people out of work?
It's worth playing for Matthew Ditchalk making the case for rate cuts to come.
There.
The prospect of lower rates is particularly boosting the allure of shorter data obligations, which stand to gain the most as rate cut speculation continues to build. Now the UK chances of Jeremy Hunt has pledged to maintain Britain's triple lock state pension if his party wins the next election. The commitment means that the state benefit would continue to rise by the highest of either inflation averagjournings or two
and a half percent annually. Now, he told the BBC's Lawercusbo that he is confident that the government can grow the economy enough to pay for this.
That is an expensive commitment and you can only and indeed and you can only make that commitment if you're confident that you're going to deliver the economic growth that's going to pay for it. What we saw in the budget was because we have a plan for growth, the OBI say that we will get back to two percent ish growth over the next day to speak. That means that we can start to make that very important.
So that was the chaser Jeremy Hunt and now his comments come as the Labour party also reaffirmed its commitment to the triple lock. The Institute for Fiscal Studies, though, has calculated that the state pension cost the government eleven billion pounds a year more than had it risen in line with either inflation or earnings since twenty ten. Now to Ireland, where the Education Minister Simon Harris has been named leader of his party Phinogoyl, making him Prime Minister elect.
The move comes after previous leader and Premier Lea Varadkar announced his intention to resign last week. Now Harris stood uncontested for the leader spot and used his first speech to emphasize a commitment to cooperation in Ireland and beyond.
We will always be a party that will work with everybody across this island of Ireland to embed peace and prosperity and to make sure we harness the untapped potential of the all Ireland economy. We will always support democracy and freedom and we condemn onreservedly the horrific illegal invasion of Ukraine by Putin and we stand by Ukraine always.
That was the Phinnogoyl leader Simon Harris speaking there. It's expected that Harris will be formally voted in as t Shirk, the Prime Minister in Ireland, on the ninth of April, when Parliament returns after its Easter break. Today's deadline, we'll see Donald Trump either have to post a bond to cover a four hundred and fifty four million dollar civil forward verdict or risk the seizure of some of his assets.
The former president says he has almost five hundred million dollars in cash, but would need closer to a billion dollars in reserves to cover the amount and also retain enough cash to run his real estate company. The deadline coincides with Trump's appearance in a Manhattan court for a hearing related to accusations that he falsified business records before the twenty sixteen election. And those are today's top stories
for you. Now, let's talk a little bit more about Russia holding a national day of mourning on Sunday after the terrorist attack that killed at least one hundred and thirty seven people in Moscow. Four men have now been charged with terrorism. Joining me this morning is Tony Halpin. Tony, good morning. You lead our economics and government coverage in Russia and the wider region. Still a lot of unknowns does seem that the evidence points towards the attack being carried out by Islamic State.
Yes, good morning. Certainly Islamic State have claimed it. They've published videos showing what they say are the four men who were carrying out the attack. Putin, as you mentioned, though, continues to point toward Ukraine, even though they are unable to provide any evidence showing that they alleged that the four attackers who were detained were on their way to Ukraine.
Russia itself, of course, is deeply in shock and people are really reflecting that it harks back to a period in the early two thousands when terrorist attacks were frequent and cause real alarm.
The narrative from the Kremlin, though, Tony, is that the attack came from Ukraine.
Yes, and there are probably two reasons for that.
I mean.
The first is, in any normal country, a massacre of this size would immediately raise questions about the competence of the security services and there be political demands for to role in the leadership. But nothing of that sort is
happening in Russia. Because put In, even though he dismissed warnings of a terrorist attack just a few days before it actually took place, doesn't, of course, want to hold the FSB accountable for these failures, and it serves the Russian state's purpose to try and blame things on Ukraine because they're desperately trying to maintain support for the war, and that's raising questions about what they might be planning next.
In terms of the motivation behind the attack, then, I mean the US intelligence had warned about this, right, yes, they.
Gave quite a specific warning at the seventh of March, saying that there was a risk of terrorist attacks on large scale gatherings, including concerts, and put it on Tuesday, met with top Federal Security Service officials and publicly dismissed that warning as some sort of American propaganda designed to frighten and divide Russian society. So that's pretty embarrassing for
the Russian leader. Islamic State, of course, has targeted Russia in the past, and particularly since Russia went into Syria in twenty fifteen in support of Kasha Alaha forces in that country civil war, So it is not.
A surprise that Islamic State has claimed.
It, but we still don't know if they're actually fully responsible.
Meanwhile, Sunday also saw the third major Russian attack against Ukraine in four days. So what actually about the course of Russia's war in Ukraine.
Yeah, since Britin was re elected last Sunday, Russia has definitely stepped up air attacks on Ukraine, targeting energy infrastructure, in particular on Sunday. In fact of Russian missile briefly crossed into Poland and that paused Polish authorities to protest to Russia and to no FI NATO allies. Ukraine has been striking back as well. It struck two Russian ships off Crimea on Sunday.
So there's a general.
Intensification of missile attacks even as there's not much change on the ground in the war.
Tony also, just lastly, what is the mood done in Russia and in Moscow?
Well, people are in shock.
This is the biggest attack and loss of life in Moscow since two thousand and two. Many people have grown up believing that this sort of terrorist attack was part of their past, and now suddenly it's returned to their presence and it's created a great deal of in security and distress.
The city is in.
Mourning and the country is in mourning, and people are really trying to process what's happened.
Tony Halpin, thank you so much for being with us this morning. That Tony Halpin leads our economics and government coverage of Russia and the wider region. Now, as we heard last week, the Federal Reserve and key global peers finally appears set to begin reducing interest rates as soon as June. So let's move on to talk about bond traders who have started to cautiously begin reloading wages that actually burned them only a few weeks ago. So have they got it right this time around? Johnny Snow to
discuss is Bloomberg's FFX rashist Dave Finity, Good morning. This really stood out to me in the piece. Jim Reed, Deutsche Bank's global head of economic research, reckons that markets have pivoted towards Dubvish policy seven times in this cycle, and on at least six previous occasions. The outcomes have actually been hawkish. So it's not been a very good record.
Yes, it's certainly a very tough trade. Indeed, I mean the markets have been looking well, expecting or hoping, however you want to view it, for the Federal Reserve and other central banks to cut rates as inflation as is seen to be slowing, and obviously when you think I like to last year, there was obviously worries were a session which hasn't materialized yet, but there was expectations of that and based of that, markets were going okay, fed
other central banks, you will be cutting rates now as we know that didn't turn out the case.
And what actually has happened.
Is inflation's pre nstking them they've expected, and in economy has actually been growing more than expected. As a result of that, yields have stayed high and pushed higher than expected. So every time there's been a dipping yields because the market's way forward looking, so it's quite happy to run with this idea. As soon as there are dipping yields, it goes down, down, down, Then reality, shall we say,
sets in and the treasury is pushed back up. So they keep losing on these bets that yours will go lower this time though, particularly someone like the Swiss National Bank last week which cut rates, they're thinking maybe this is finally the time.
They're right.
Obviously, we'll have to see other data comes out, because it isn't worry if the data does come out, continue to be elevated and so strong growth stick inflation. Then the question is how much those central banks actually need to cut rates.
Well, what prompted trade is to jump the gun a few weeks ago.
Then again, it's all expectations of what you think is going to happen any week data, particularly if it's inflation data or week growth data, that will get the market excited, going okay, this is the start.
Something a trend that is going to happen.
And unfortunately what's happened is the expectations you've men are going too this year. They literally thought there'll be a seventy seven per cent chance in mid January of the Federals are cutting rates in March. Now we know obviously that didn't happen. And the reason being is obviously that inflation data, whether it be the CPI measure or the Fed Federals preferred the shore of course personal consumption Expension index, they actually remain elevated and actually upticked, which is what
the market did not want. And therefore markets dial back expectations for freight cuts and that's where US shields go. So again the idea of US feels pushing lower got beaten up.
One more time.
Yeah, absolutely, so, then where do you think the major action in the market is right now?
I think in terms of yours the main if you look at FX, it's very sort of sideways based.
If you look at implied volutility very low.
So really the markets aren't looking too much at the FX side equation. Obviously, we want to see what Banka Japan does. Does it intervene in the markets to prop up the end. If so, you may see some volatility there, But the market really still looking towards rates as the more active trades we say that will give them the bigger bang for the buck. Of course, the catches that
been burned how many times? I think the the US core PC data, which again is the Federal reserves A third measure inflation that comes out again this week, the monthly data does if that stays elevated, then it raises the question yet again, Well, the Fed signal three dots sorry threeweight cuts in its dot plot should it actually be two? Which't is not good for the trade that
years go lower. Having said that, if that data comes in weak, then that will empower the bond balls to say, yes, finally inflation is under control.
The path it has been broken, and you're more.
Like see in the front run them, so you'll see treasury is more like being bid very very quickly into this idea that finally yields are headed lower.
Yeah. I mean it's a bit tricky, isn't it, Because that core PCE number, the Personal Consumption Expenditures Index, which is seen as rising by zero point three percent. That data comes out on Friday. You've also got the Eurozone in the Japanese inflation data, and it comes out again on what is a holiday in a lot of countries, on Good Friday, and then you've got Easter Monday, where a lot of markets are also closed. So do you think that could be tricky in terms of market timing.
Yes, definitely.
And it's just ironic the way it turned out, because you're going to have thin liquidity on those days because of the holidays, and a lot of traders will be off, a lot of markets be closed, so thin liquidity will more than exacerbate the move in whichever direction it goes. As you said, the inflation data is supposed to come out quite high, and it's quite solitary.
We say a point three percent month over.
A month, which is not really consistent with the fence target of two percent and the hero of you have at two point eight again very very sticky because it was that before. So this idea is if if traders have started to load up one way and they have to get out of the trade inin liquidity positions, that's definitely not ideal and you can see an exacerbated move.
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