Daybreak Europe: January 30th, 2023

Britain in the doll drooms. Those are the stories we're looking at in today's newspapers, and I'm leanne Gern's plus slim pickings. A deal's drought leads to pay being cut

in half for top performing bankers in Asia. That's all straight ahead on Bloomberg day Break Europe on DAB Digital Radio, London, Bloomberg eleven three oh New York, Bloomberg Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties, San Francisco, cyrus XM Channel one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business Set. Good morning, I'm Stephen Carroll and I'm Caroline Hecker. Here

are the stories that we're following today. Shares in some Adanni Group companies have continued to fall after a rebuttal of fraud allegations from a short seller failed to soothe investor confidence. The Indian conglomerate, in the midst of a two and a half billion dollar share sale, is seeking to stem a route that's wiped out more than fifty billion dollars of its market value. On Sunday, Gamdanni published a four hundred and thirteen page response to Hindenburg researchers

allegations of widespread corporate mouthfeasance. Bloomberg Market reporter Annabel Drulers has been breaking down what's in it. The language is extremely strong and basically he says that everything in there is a lie. It is tantamound to security fraud. And on top of that, there's a very nationalistic tone that comes through it as well, because basically a Danny is saying that as an attack on India on its growth ambitions.

And then you put that into context as well, because a Danny is someone who's very close to the Prime Minister Ranger Moody and is seen as really key to carrying out a lot of Moody's programs. Alibeldoria spoke as Hendenburg today double down on its position, saying that a Danny's rebuttal fails to specifically answer the vast majority of their findings. Well here in the UK, new data suggests that outlook for business is improving as optimism reaches its

highest level in six months. Bloom Bigs, You and Potts has all the details. Growing hopes of a brighter economic outlook and cooling price pressures are boosting business confidence, lays Banking Group's monthly Business parameter is showing a reading at a six month high. That's despite more signs that activity declined at the start of this year. Confidence indicators, though, are sending conflicting messages. As forecast has worn the UK

is likely heading into recession. That picture was reinforced by a separate survey by business group the c b I. It says private sector activity fell over the winter due to head winds including strikes, staff shortages and the soaring cost of living in London. I'm you and pot spoin Boy Daybreak Europe. The Prime Minister, She's saying. Arkasaks the Conservative Party chairman and deems the Howe for serious breaches

of ethics rules. The news follows weeks of damaging headlines related as a Howie and a multimillion pound tax bill. Cabinet Minister Michael Gove says the government was abiding by due process. I think it's important in all these situations and our allegations are made, that they are investigated impartially,

independently and in full. We don't want to precipitate rough the judgment, but we do once all the facts are laid out, neat decisive action and that is what the Prime Is has given today, decisive action, but only after a full and proper investigation. Michael Gove there speaking to reporters on Sunday as the news broke. The government now wants to refocus its plan on overhauling the NHS as heads into another week of disruption with strikes planned across

multi sectors. Meanwhile, Bloomberg understands that top investment bankers in Asia are seeing their pay packets cut in half this year. Sources tell us that on average, managing directors at banks including Goldman Sachs, Morgan Stanley and Bank of America are seeing compensation drop by between forty and fifty. Meanwhile, non performers are seeing pay reductions of up to sev and many have also been left out of the bonus pool altogether.

The news comes as a slumping dealmaking ended the industry's war for talent, with banks increasingly looking for ways to keep a lid on spiraling costs. Wall Streets focus will be split between global central banks and more big earnings this week with a preview of what's look out for. Here's Bloomberg's Charlie Palace, Microsoft end Intel rattled investors last week. Lisa Shalott's chief investment officer for Wealth Management of Morgan Stanley. She says it's a bad omen for the US economy.

There is definitive risk to the earnings profile as both pricing power and volumes decline coming off what has been a historic stimulus over the last two and a half years and a paw forward in demand. This week, we will hear from tech giants including Apple, Alphabet, Metal Platforms, Qua, Calm, and Amazon, also reporting x on Mobile for GM, McDonald's and Starbucks in New York. Charlie Pellette Bloomberg Daybreak Europe. Okay,

those are a few of our top stories this morning. Now, I think this is I mean, if you've ever had a hard day at work and you're looking at the start of this week, um At a spare thought for Rio Tinto. Apparently they have lost a highly radioactive capsule along the highway in Western Australia. They're looking for it, of course, but they have yes, they have not seen it though for eighteen days. And it's also tiny. It's just millimeters long. Yeah, I mean it doesn't seem like

it's going to be particularly easy to find. Now. The Western Australian government has said that the package basically they found this because the package that was holding us there was one of the bolts that were missing and that was one of the discovered that this very important gauge was missing as well. Um At the head of ourn Orfrea tend to Simon trut saying a statement that they recognized this is very concerning and are sorry for the alarm that it has caused in Western Australia as a result.

I mean they're searchings of highway to try and find it. Yeah, absolutely so. As I say, spare thought for for them looking for that tiny widget. Also, though we were talking We have talked a lot about AI chat bots and there's a new one apparently Yes, by Do, the Chinese search giant getting involved in this space, set to launch according to Bloomberg sources, and AI chat bot that's in the form of chat GPT as well. It would be China's most prominent entry into this space. Already. By Do

has spent billions on AI research. They've been putting work into this area for a very long time. But it would be a pretty big launch into this area. And by Do shares rising on that. Yeah, absolutely, really really interesting. Okay. Up next, BP goes Barish on demand short sellers come up short and Britain in the duld rooms. Now the paper review on blue birdday Break Europe. The news you need to know from today's papers. Bloom Berkeley and Garon's

joins us now with more details. Other stories in today's paper is good morning to you, Leanne. Let's start with the Financial Times their headline, BP cuts long term forecast for oil and gas demand. Stephen, good morning to you too.

Great to see you today this Monday. Now, this lower forecast really reflects countries pursuing energy Stephen, energy security by investing in domestic renewable energy, and lots of this comes after Russia's invasion of Ukraine, which is really pushing countries away from oil and gas as they do want to become very independent when it comes to energy, and BPS annual Energy Outlook really highlights that it expects weaker economic

growth because of the energy crisis that we're facing. And Bloomberg's will William Mathis he says the energy transition is going too slowly to hit climate change goals, and this is according to the British oil major's Annual Energy Outlook, So we cannot get to those twenty twenty five net zero goals that have been set at these climate agreements, which is something that when this all looks together, the Rush's invasion of Ukraine has had a real big effect

on the economy and also on energy. Yeah, absolutely, look BPS outlook is always really closely watched, and you've got to bear in mind that big oils expected to have made on a billion dollars in profits, and you know how they distribute those is going to be the source of a lot of scrutiny. You know, whether all of that goes and share buy backs perhaps a bit more of it will be Hoover. Then Caroline's renewable energy becoming another very big part of opening up jobs and a

transition and moving economies forward. Let's go to the Wall Street Journal next, then Leanne and they hit their headline, short sellers feel the pain in the stock markets three rally, So short seller's fortunes have really reversed this month, and this comes as the stock market has really started to claw back some of the losses that we've seen, especially

over last year. Remember short seller has made those absolutely massive gains in two and this is when markets around the world just took those absolutely massive plunges that we

covered here extensively. And what's really driving this rally in the markets, well as cooling inflation, is really stoking bets that the Federal Reserve will pivot away from interest rate rises and the second half of this year and actually starting to cut them as things do start to call according to the Wall Street Journal, and the strong US labor market and also China opening giving lots of investors hope as we move forward into tw twenty three, and

investors betting against stocks this is unbelievable, have wrapped up eighty one billion dollars on short positions this month. That is absolutely huge amount of money. And that's according to the managing director of predictive Analytics at S three Partners who has been speaking to the Wall Street Journal. One billion dollars okay, so short sellers and then lastly the Telegraph, the lack of a growth plan is leaving Britain in

the doll rooms. Look, we just had the Lloyd's Business baromater saying, actually businesses are feeling what I mean, the signals are really pushed pull on there in the UK. That's part of the problem, absolutely, Caroline. You couldn't have said it even better. So this is a warning from the Director General of the British Chambers of Commerce, and she's been writing in the Telegraph. Her name is Chevurne Haveland and she repeated government changes in policy for business

is a recipe for disaster. So she feels that the government keep on changing their position en and as we hit, as we go into a possible recession, this is just making things more and more confusing. And she delivered a damning verdict on Jeremy Hunt's speech in this very building on Friday. We know Mr Handle's here. I actually saw him. I just want to put that out there. He was here.

I spotted him along with Stephen Carroll Um and this really came as the Chancellor announcers plan to get the economy moving again, and the BCC Director General said, any business leader looking at whether they will invest in the year ahead as they face a wall of increased costs and taxes will have taken little cheer from what they've heard. So in a nutshell, that's a pretty damning statement from her. But she's saying increased taxes, energy prices, not enough support

from the government is pushing businesses into a really difficult position. Okay. Thumbs down then from the British Chambers of Commerce when it comes to that four ease speech from Jeremy Hunt that he made hit in the bloom Bug Building. Thank you so much, Leon Gons with a look through the newspapers. Now, let's move on to the other big issues of the week.

While the Fed is expected to down shift the pace of rate highs the twenty five basis points at this week's meeting, the European Central Bank and Bank of England both seen raising interest rates by fifty basis points and this will be key for markets. So Bloomberg Value Titel is with us on the week ahead. A great to have you with this value Monachly policy meetings a plenty, Oh boy, Yes, the Fed kicks it off on Wednesday night. As you mentioned, they have the rate decision and a

press conference. Thursday the Bank of England rate decision. We also get their quarterly monetary policy report, which will be their upgraded growth and inflation forecast. Would be key to see. How you know that their assessment of the UK economy, given we've seen so many upgrades recently from economists on the street. And then also on Thursday the ECB rate decision and the press conference again, will regard be sticking to her line that a series of fifty basis points

hikes are needed, so a slew of central banks. It makes me nervous just thinking about it, and it is a bit excited, I'm sure as well. Talk to us about the key data that we're watching out for this week, Asia, Yes, some big U s data. The highlight is the non farm Payrolls report on Friday, which is the broad monthly report of the US labor market. We know the labor market has been incredibly tight and posing a lot of issues for the FED. But we also get some key

survey metrics. We get the U S I s M Manufacturing on Wednesday, and on Friday, right after the payroll report, we get the U S I s M Services. Now this is important because we've seen a lot of softening in the survey data. It's yet to show up in the hard data like the unemployment rate. But does the softening in the survey data continue. We also get some upgraded um UH wage inflation data out of the US, as well as the Jolts data out of the US.

That's the job opening data. You know, we've had this number around two percent of openings per unemployed person in the US. Does that? Does that continue? And in Europe we also get the CPI across the Eurozone. The big print is the Eurozone print on Wednesday. Yeah okay, But then also we've got loads of earnings to European banks and tech. Yes, yes, the European banks. We get UBS UNI credit on Tuesday. On Thursday, we then get Deutsche Bank, UH and Santan Dair. And that's not to that's not

to overshadow we have some big, big tech earnings. We have META on Wednesday and then on Thursday we have a sull of them alf Alphabet, Apple, Amazon, and Qualcom. So let's hope by the end of this week maybe we have a good direction on where the U. S economy is going and what central bankers think about it. But I've I've thought that for many months now. This is Bloomberg Daybreak Europe, your morning brief on the stories

making news from London to Wall Streets and beyond. Look for us on your podcast feed every morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning on London d A B Radio, the Bloomberg Business app, and Bloomberg dot Com. Our flagship New York station is also available on your Amazon and Exa devices. Just say Alexa played Bloomberg thirty. I'm Caroline

Hitka and 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.