Daybreak Europe: January 20, 2023

we're looking at in today's papers. And I'm Leanne Gern's plus read Hastings season finale. The Netflix CEO announces that he's stepping down from the top job. That's all straight ahead on Bloomberg Daybreak Europe on DAB Digital Radio London, Bloomberg eleven three oh New York, Bloomberg Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine six, San Francisco, cyrus XM Channel one nine Team and around the world on Bloomberg Radio dot Com and var the Bloomberg Business

At good Morning. I'm Stephen Carroll and I'm Caroline Hick. Here all the stories that we're following today. The FAD needs to continue raising rates if it wants to get inflation onto a sustainable path. That's the view of two of the bank's top decision makers, who say price rise

data is still coming in too hot. Federal Reserve Vice Chair Laole Brainard says more work is needed as we move the policy rate closer to what we call a sufficiently restrictive level, taking into account the risks around both our employment and inflation balls in parallel the balanty of continuing to run off. That said, inflation remains by and policy is going to need to remain sufficiently restrictive for some times and make sure it gets down to superson

on a sustained basis. He little. Bernard's view was supported by the New York Fed President John Williams, who said officials have yet to complete their aggressive tightening campaign. While both policymakers notably chose not to take a view on where rates will peak, bond traders are increasingly betting the Fed will stop short of five Inflation in Japan has hit the highest level in more than four decades, adding

to the pressure on the Bank of Japan. Consumer prices excluding fresh food rose four percent in December year on year as energy costs rose sharply. The data was in line with expectations and comes just days after the boj said that it would keep its yield curve control in place. The central Bank now owns over half of all Japanese government bombs. On the final day of the World Economic Forum DAVAS, attendees say they are hopeful of a mild

recession this year. The positive tone reflects the surprising strength of bank earnings and consumer resilience. Morgan Stanley CEO James Gorman summed up the optimism. There's clear evidence inflation has in fact Peekedner is coming down. Right How quickly when the Fed will get us to two percent and win remains the debate, but it's clear the slope of the

line as positive is to everybody's favorite. And the second is not just the opening up of China, but China has embraced the rest of the world more aggressively in the last few weeks, witnessed by the Vice Premier meeting with Treasure Secretary yelling but economists and we're damn beast

than finance executives like Gorman. The i m F managing director Chrystlina Georgieva warned Davos elites are sleepwalking into crisis as the Fund prepares to revise its global growth forecast and will have more from javas from Bloomberg's Francy Laquais in just a moment here In the UK, employers have gone on a hiring spree. According to the Recruitment and Employment Confederation, one hundred and eighty thousand new job vacancies

were added just in early twenty three. The data comes as the Business Secretary, Grant Shaps, visited Davos to make the case for UK investment. Here's what he told Bloomberg's editor at large, Fancy Laquax. In the UK, we have four of the ten best universities in the world, so we have a lot of the science and technology in glat Green Tech. We are open for business and we want to scale up Britain. The Business Secretary may be optimistic about the outlook for the UK, but consumers are

less so. Research firm JFK said that it's measure of consumer sentiment fell three points to minus forty five this month, the first decline in four months. Incorporate News, Netflix CEO read Hastings is stepping aside after two decades at the top of the firm he founded. Hastings is handing the reins to deputies Ted Surrounders and Greg Peter's, but will remain as executive chairman, TV Executive and Hang CEO. John Klein says the road ahead looks bumpy. It's very, very

difficult for established incumbents to change a culture. But it can be done, but it's a big mission. It's a little harder to do with three people at the top, which is what Netflix now has. John Klein was speaking to Bloomberg after the streaming giant reported almost seven point seven milli and the subscribers in its latest quarter, well

ahead of analyst expectations. Netflix says the decision to offer a cheaper AD supported package has helped to boost growth, and JP Morgan's Jamie Diamond says that working from home is no good for younger staff or bosses. More on that story now from Bloomberg's Charlie Pellet. It is the Wall Street Titans latest salvo against remote work. In an interview from the World Economic Forum in Dubos on CNBC, the JP Morgan CEO said, quote it doesn't work for

young kids, or spontaneity or management. His comments come amid an industry wide slowdown in finance and increasing signs of a recession, which has pushed big banks to slash bonuses, cut jobs, and pause hiring in New York. Charlie Pellet Bloomberg Daybreak Europe. So those are top stories this morning.

I can't help but think if Jamie Diamond is talking about people not working from home, what he'd make of the latest days that we've had from Bear Room they're renting website, website in London, saying that more people are actually trying to rent out their spare rooms to try and make ends meet, which might mean an end to their home offer space as well. If they're trying to kind of look at their soaring bills in January and trying to see how they can make and look at it.

It's a really it's a real issue. You know, I kind of been the only person on Zoom watching people, you know, having to work from very very tight accommodation, and yet do you have to balance with whether you can easily get to work. Interesting the r m T when it comes to all the strike action on trains, they have now seen a best and final offer apparently, so for train drivers is going to be five percent backdated pay rise for two and then another four percent

this year. The r m T Union says that they're going to have a think about it. Okay, well, well they're thinking about that coming up next. Don't expect tax cuts, the super rich fallout of love with Britain and labor Labor is Davos charm offensive. Now for review on Blue Birthday Break Europe. The news you need to know from today's papers. So joining us this morning, Bluem Beggs and Anne Garran's. Let's begin with the Financial Times. It has the headline Jeremy Hunt wants not to expect tax cuts

in the March budget. Yes, indeed, Caroline, good morning to you. So some Conservatives want to start reducing taxes right now, but the chancellors told those MPs that it would actually be irresponsible to do so in as March budget. And this is at a time when inflation is so high.

The newspaper says. Jeremy Hunt hopes that by the next year inflation will be coming under control, which will allow a pre election giveaway, which is actually expected in autumn However, Tory strategists have also told the newspaper that a path to victory in the next general election is steep and narrow. Hang on a second, Bloomberg's Joe mays As report did that Richie soon I told people up in Morecombe that he wants to cut their tax Yeah, that's absolutely true.

So he was up in Walcomb yesterday and this was for the leveling up agenda that the Prime Minister was dashing out cash for and the ft also, says Tory strategist say the party will aim to show voters the economy has turned a corner and that brighter times do lie ahead. And Richie soonac did make it clear he wants to cut taxes, but just not right now, okay. The Times meanwhile says the super rich falling out of love with Britain. Oh this is sad, isn't it. This

is not what we like to hear. Yes, a little bit less people, you know, living here. But the latest exodus continues. And this is really a trend that did begin after the Brexit vote in twenty sixteen, when thousands of millionaires left to the UK. Dozens of really well paid bankers were forced by the employees to relocate around Europe.

And according to data from Henley in Part, there's a further one thousand, four hundred high net worth individuals defined as those with wealth in the excess of one million dollars and left to Britain. But really the hangover from the Brexit vote, okay, and perhaps no surprise and the EBA data that we had out yesterday showed almost two thousand million euro bankers over in Europe just this year. So yeah, it's close to two thousand of those super well paid and now in Europe. But if these very

wealthy individuals don't like Britain, where are they going? Well, they're going to greener pastures maybe, And these globe trotting millionaires have been tempted to go to places like the Middle Eastern Asia instead of coming back here to the UK. Maybe sunnier climates. It's the weather, definitely, alrightly. And in the Guardian the headline is Kiir Starma and Rachel Reeves

full of vacuum in Davos charm offensive, yes exactly. And Kia Starma and Rachel Reeves have taken advantage of the absence of a Rishi suonak in his Chancellor Jeremy Hand at the World Economic Forum in Davos, and according to the newspaper, Labor's top team were there to show the world the party is back to the political middle ground and is a pro business party. The Prime Minister may have been missing, but Grant Chaps was there talking about his plans to scale up Britain over a lunch. You

know what. The lunch was very healthy, grilled vegetables and roast chicken breast chefs. So the UK government had growth strategy. I think that almost meets your standards for foods. Yes, he'll just take out the chicken. But there we are. Apparently he had a lunch, very healthy lunch. But listen, this is really red versus blue, and it seems like the charm offensive for Keir Starman Rachel Reeves went the

way they wanted it to. Okay, really good, Thank you so much, Leon, Go and there for our review of the newspaper as well. Of course, speaking of Davos, where else should we go But to Bloomberg's anchor and editor at large, Francie Lackwad, the world's elite have flocked back to Davils this week. This is the final day there'll be a panel with the RMF Managing director Chrislina Georgiava, the ECB President Christine Lagarde, and the French Finance Minister

Bruno Lamaire. But there has been some grumbling about who did not attend the World Economic Forum. So Francine Lackwise joins us. Now, really good to have you on the show this morning. Fran We knew, good morning. We knew there weren't going to be any Russian or Chinese billionaires,

but the surprise perhaps was the absent Americans. In fact, if you look at the chief seven leaders in general, Caroline, there was less room for a feel good public appearances and so there was only one seven leader and that was all of shots. I think the reason you come from Davos or two Davas a big speech. Either you're optimistic about the world or you have a very strong message,

and we're kind of in this limbo. So if you look at who we've had in the past, we had that huge, huge speech from the President she of China about five years ago saying that they wanted to open up in the world. We didn't have, of course, Donald Trump in many years asking for business. Um for you

know to come to the US. This time, we didn't really have anyone huge from the U. S elegation, So we didn't have the President Joe Biden, we didn't have the Vice president, who didn't even have the Secretary of State Anthony Blinkett. And what was it a little bit strange is actually there was Janet Yellett, but she was in Switzerland to meet with the Vice Premier of China,

not in Davos. And then but they decided to meet in euro so the vice president of China was here and then he drove two hours to Urik to meet away to charge herself before she flew to Africa. So it's a little bit of a strange Devils. I think a lot of people are back that wanted to deal, but you were missing the kind of headline. You know, the Prime minister that you try and usually doorstep for the president that you want to try and speak to him.

I remember again chasing the Iranian president years ago. They haven't come for a long time, So maybe devils just changing a little bit. Front sine. Now we know that anyone who's anyone a Davos speaks to you. So among the interviews you've had this week, Who's who has done out for you? So we've spoken, Um, it's even two three soevern wealth funds. I think the total they have

like two trillion assets under management. It was interesting to hear them talk about optimated, which I think it's probably true. Rife and Davos. Everyone is talking about the procession possibly being avoided reaching peak inflation because of China reopening, but also because markets have been up in the last two weeks. And if you look at it from a legal perspective, these were the same people that were really read down beat about three you know, if it was three four

weeks ago. Even so, there has been a turning points at the start of the year, and I was really interested speaking to the Southern wealth funds. They had a bit more of a those reality because they have to allocate capitals. So I really really enjoyed a lot of her interviews with that. We spoke to the Norwegians over wealth fund we spoke to the q I A and then look, a lot of the focus were was Wall Street.

We had all of the Titans dropped by the studio and we spoke to them about bonuses and compensation, and then of course let's not forget Ukraine. We had the Polish prime minister, we had the Ukraine and Cortany minister. And it always stops in your track. I know we cover it day out, but when you have someone physically pregnant with you talking about some of the hearts up on the ground, it's um. You know, it's not something

that that you forget very easy. Now. Absolutely it does around that point home that there is a war on the European continent ongoing. Um. Look, just briefly, you mentioned the Guitar Investment Authority. You spoke to the CEO. I mean, is there much has been made of the pivot to the Middle East, emerging markets, a booming region, a booming region, and the ready to deals. So we had tried to, you know, speak to the q i AM almost all year and they really do only like speaking that partly

because maybe he's morel arxed. It's on a world stage and he wants to also speak to the companies that failed, and I have to say a lot of the company's owned by the q I A show up also meet with him here and Davos. The other story that really surpresates football. You know, let's Let's remember there was all this, there's like the shop parade and I have a couple of people from the news room. Let's say, oh, can you get me a T shirt of Monte Trash for

this was Mancester United. But it's not that kind of shop. You don't go in as by merchandise. This is the shop. But basically they're speaking to investors and this is a week where not only the you know, were the rumors that they would you know, that they could sell at stake, but also that it was the first bit of the jim wrap. But that came on. So I asked QUI,

do you want to buy football? And he lost nervously and he said, of what, we're first looking at everything, but you know, the Premier League, there's nothing really quite like it. We also spoke to the track to the business secture of being a k and I said, look, is the Primari League really all for sale? And he also laughed and said, look were open for business. This is Bloomberg Daybreak Europe, your morning if on the stories

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I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe