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This is the Bloomberg Debic Curate podcast. Good morning, It's Monday, the twenty ninth of June. I'm Caroline Hipkea in London.
And I'm Stephen Caroline Brussels. Coming up today, the United States and Iran once again agree to stop attacking each other ahead of their latest round of talks.
Vladimir Putin admits Russians are experiencing fuel supply problems as Ukrainian drones strike refineries.
The US Trade chief meets his Chinese counterpart as relations between Brussels and Beijing deteriorate.
Plus, the grass Isn't always Greenlander Why the European territory keeps attracting investors that it may not even want. Let's start with a roundup of our top stories.
The United States and Iran have agreed to stop attacking each other before negotiations resumed this week in Doha. An American officials said technical talks are scheduled to continue on the d which was reached earlier this month. The move to cool tensions follows a series of strikes by both sides that began on Thursday and intensified over the weekend. On Sunday, Iran assisted it had the right to full
control of the Straight of Hormos. Our Senior Washington editor Wendy Benjaminson says the dispute is shifting the focus of the talks.
They are going to resume this week. However, the focus has changed because the Straight of Hormose is so critical to restoring pre war prices, pre war flows of oil and gas, and things like that, that the focus on the talks is not going to be technical talks about Iran's nuclear ambitions, but instead talks about the Straight of hor Moos.
Wendy Benjaminson says the two sides remain at odds over key parts of the agreement. Those include whether Iran will impose tolls or other charges on ships passing through the Strait of Hormos and the fragile ceasefire between Israel and Lebanon. On Friday, Bloomberg reported that Oman had told European officials vessels may ultimately be required to pay fees to transit the waterway.
Russia's President of Vladimir Putin has for the first time publicly acknowledged fuel supply problems within the country that as Ukraine ramps up at tags on Russia's energy infrastructure. Moscow is now weighing a range of measures to support its domestic fuel market, including a full ban on diesel exports after drone strikes on refineries reduce fuel production. Speaking during a televised meeting with oil executives and government officials, Putin had this to say, and.
You are well aware that problems persist for both motorists and businesses. Unfortunately, there are also cues at gas stations, and finding the right grade of gasoline isn't always easy. And of course we understand the difficulties faced by agricultural producers and farming during the summer.
Those comments from President Putin come as Ukraine says that it has struck another major oil refinery in southern Russia. Writing on telegram, Ukrainian President Vlodomi Zelinski said the attack would reduce the resources fueling Russia's war machine and marked quote another step toward peace.
Britain has abandoning plans to replace its aging warships ahead of a key NATO summit. Instead, the UK will deploy six drone enabled vessels, arguing they can deliver greater firepower with fewer sailors and at a lower cost. Former NATO Commander General John McColl says that's not enough.
The armed forces are very keen to move in that direction of transformation, but this level of resource, I regret, is not sufficient to move sufficiently in that direction to deter Russia as part of the alliance, or indeed to meter obligations within the Alliance.
John McCall is among a growing number of senior military figures warning that the government is failing to match its defense ambitions with adequate funding. Former Defense Secretary John Healy resigned last month after failing to secure an additional twenty eight billion pounds for defense from Prime Minister Cair Starmer. Prime Minister is due to meet at NATO Secretary General Mark Rotta later today, where Britain's defense spending plans are expected to come under close scrutiny.
Well, the front runner to replace Kiss Starma as Prime Minister, will pledge to shift power away from London. Andy Burnham speaks later this morning in Manchester as both the public and investors look for details of his policy agenda. Bloombags James Walcock has more.
Andy Burnham has momentum, but does the former Mayor of Manchester have better answers to Britain's woes than the past series of prime ministers. In his first major speech is Becoming an MP, Burnham's team tell us we should expect him to talk about devolution, performing public procurement in the labor market and fixing trust in politics, but critics note Burnham's ambitions don't change the UK's fiscal or economic reality.
London, James Woolcock Blue Megradia, China says that can withstand to freeze and economic and trade ties with the European Union a head of scheduled talks between the two parties. That's according to a social media account associated with China Central Television, which said the EU had altered its approach to negotiations, using pressure and conditions to strengthen its position. Our chief North Asia correspondent Steven Engel says, the situation is tense.
China, you know, basically communicating through state media. We had Global Times, we had CCTV online account talking about they're ready to go full tilt against the European Union, even if that means freezing commercial ties and freezing relations right now. Essentially, the Chinese point of view is that the Europeans have been concentrating almost all of their efforts on securing chips and rare earths, where China wants more clarity on market access to Europe.
Bloomberg Steven Engel, speaking earlier this morning, you tried commission marrow chef it as scheduled to meet China's Commerce Minister Wang Wan Tao in Brussels today. The Block is pressing Beijing to address a widening trade imbalance that reached about three hundred and sixty billion euros last year and has continued to expand this year.
US banks are giving up on betts for a stronger Euro this year. That's as markets predict that the US will outpace Europe in terms of raising borrowing costs. Bag C but Adebayo has more.
Wall Street lenders, including JP Morgan and Morgan Stanley, are predicting a slide in the euro. Estimates see the currency dropping over three percent over the next twelve months, as trade is factor in a rate increase from the Federal Reserve in twenty twenty six, and no longer expect one in Europe. The new outlook is a turnaround from earlier this year, when policymakers in Europe, worried the euro was too strong after it hit its highest rate in five years.
There are still some who hold a more benign view on the euro, believing the Fed will also hold off from a hike and remaining negative on the dollar next year. Still, those expecting a euro rally aren't disappearing fast in London, do you?
Added by Bloomberg Radio.
And those are our top stories. So looking at the markets this morning as we come to quarter end and the end of the first half of this year. Brent CREWDE futures trading on a seventy two handle up about half of one percent this morning. Seventy two dollars, thirty four SMP and nasdac EMAINI futures are in the green, up about half of one percent. Your SOX fifty futures also are gaining a little bit, but only up about tenth of one percent.
Dollar range bound.
The cospy this morning, dropping by two point well by one point nine percent right now. We've seen extreme volatility there and bonds look vulnerable. US benchmark treasuries are declining. Tenure yield up a basis point now trading at four thirty eight this morning, And to watch this week. Of course, the European inflation readings CPI across a number of European countries. US jobs report for June comes out, of course, on Thursday is a major holiday in the US. On Friday, those are the markets.
In a moment, we'll bring you more on what's at stake in the EU China trade meetings today, plus why investors drawn to Greenland are wondering if the island is really open for business. But another story that caught a rye this morning on India's rush to protect its traditional products. A Conscious Thing has been reporting on how a Prada fashion show last year sparked a debate in India and
around the world. A sandal that was featured by the Italian brand closely resembled an Indian kolhapuri, which is a traditional sandle named after Kolhapur. It's out in Maharashta. It sparked a backlash online, and Prada went on to acknowledge eventually the design's Indian origins, but it's become part of a wider legal and cultural debate about how products that
have roots to a specific place can be protected. India's on a drive to issue ten thousand geographical indications as they're non for this kind of legal protection by twenty thirty. But it's complicated to put a legal stamp on products or traditions that have migrated across borders that may be attached to a place now, but in fact may also be claimed by other places as well, and it gets
a bit complicated. You've got the champagne example, which has been around for a very long time, and that's, as the country points out and speaking to experts, that's been effectively protected because of not only their EU legal heft that comes behind it, but also a litigious group of producers who have been very careful to protect it against any impostors, shall we say that might be calling them
a champagne. But it's not quite that easy when you spread across many of these products, which you know have very interesting cultural histories.
Yeah.
Absolutely, And it's about how you protect the wages, I suppose, and the living of the people who are practicing, you know, these traditional methods. I mean, it was interesting with this particular standal, which actually I hadn't realized until I saw the photographs in the piece, you know how recognizable it is. But they're made with particular materials, but even those local artisans have complained that actually these gi these geographical indications,
they haven't protected their business. So it's also about how you can make what the French have used incredibly effectively, and Italians, lots of other European countries have used effectively as a kind of tool for safeguarding certain industries. You know how you can translate that also for India to actually mean that those products then are increased in value of the livelihoods of those people making them, maybe are sustained.
I mean global trade drills have been in a huge data flox for the past year and a half as well. This is part of that story too. It's to be interesting to see how much the international organizations that have particularly protected or protected these kinds of products will stand up to scrutiny as more places want to. I suppose put a stamp on those pieces really interesting read and we'll put a link to it on our podcast notes. Well, let's bring you more now on the EU China trade
talks happening in Brussels today. Our Brussels spirity Suzan lynches with us for more. Suzan, the East Trade Commissioner Marschefovitch is going to meet China's Commerce Minister Wang went Tao at a sensitive time for trade relations. What do the Europeans want from these meetings?
Yeah, I think the context here is this recent debate that the European leaders had just a couple of weeks ago here in Brussels, where they have this substantial discussion on China, and it was really an indication of the hardening of Stanta, a kind of a willingness by European leaders across the board to adopt more confrontation approach when it comes to Beijing. Now in saying that they did refrain from mandating the European Commission from doing anything radical
anything at the time soon. But what we do know is that Earthen Underline at that meeting presented a very clear eyed position and perspective on where she sees EU trade relations with China, sitting making lots of warnings there about the de penalty of the EU and China, and we were told at the time no leaders disagreed. Even those countries that do so much trade with China realize
that the Europeans have a China problem. There's an issue of overcapacity there's an issue of this huge trade imbalance that's growing, and then something needs to be done. Now, what we do know is that probably around autumn fall time September at the European Commission will come forward with something. But whether it's about kind of strengthening existing defense trade defense instruments, or perhaps going that bit further remains.
To be seen.
So that's kind of the background for this discussion today.
That's interesting.
A China problem. Well, we've had some signals from China, so ahead of these meetings, there's been this social media account that's associated with State TV reporting that Beijing can endure a deterioration of ties with the EU. It's quite sort of forceful language. How will those messages go down in Brussels.
Yeah.
I think the issue, of course for the European Union is that it is so aware of its vulnerability here is that China continues to have so much leverage, and I think a very good example was a few weeks ago we reported a Chinese semiconductor maker was temporarily taking off taken off an EU sanctions list because automakers in Europe and Germany had complained to the Commission that they needed the parts that they couldn't they couldn't do their
work without these, So it kind of captured this conundrum facing Europe. At the same time, I think there's a winningness now, as I said, say, for the Europeans to use some of their own levels their own China still wants to do business obviously in the European market for example, but I do think that this threat of retaliation in some way, and significantly the in prior instance, we've seen
that China would be prepared to target individual countries. You know, it's even in the last couple of months men should and as some products which obviously are produced by certain countries France for example, when it comes to food and drink for example. So yes, I think that's weighing on mind.
But at the end of the day, as Europe looks of this whole broader competitiveness problem, this issue of Chinese over capacity, of excessive of anti dumping, and of excessive aid by the Chinese at a time when of course domestic demand is going down in China, that is becoming a serious concern now for the Europeans.
Yeah. Indeed, and perhaps an indication of other trade relations that might have been improving a big event here in Brussels last night, certainly a massive fireworks display which anyone who went to bed early was woken up promptly by. This was the celebration of two hundred and fifty years of the United States taking over parks San Cantonaera in Brussels as well, and that was something that a lot of European officials, including Marschefcvic, was that as well. You
were there too, Sosan. I mean, is this a demonstration of perhaps improved relations with the US.
Yeah, it was quite interesting.
Sepkovich, the EU Trade Commissioner, was like a celebrity there meeting and greeting at the Greater to go to the VIP section that was there. And yeah, I mean, I think last night you had some senior European Union figures. You had Roberta Metzlat, the head of the European Parliament.
You also had Mark Ruta, the Nation Secretary General, who was very prominent there in the front row with the three US ambassadors because you have an ambassador to NATO, to the EU and to Belgium, also the Belgian Prime Minister Barta Weavor and I think again Rusta was for example, Hales is the best, the greatest Secretary General of NATO ever, So there was a lot of bun on me. And I think we know that Ruster's strategy is to keep the Americans on board, particularly when it comes to defense.
But no, look, I think it does go to show the power of the relationship between.
The United States and the EU. Despite all the problems.
This event had been controversial for some Americans living in the city. It was their big celebration of two hundred and fifty years of independence. Some were worried about, you know, it's politicized nature celebrating Donald Trump, for example. But I think there was been eight thousand people at this including some senior officials. So it does goes to show that, of course the United States still have heft here and of course the trade and actually Stephen I have a
huge amount of corporates as well. At one point the ambassador to Belgium declared revealed that the event cost over five million and thankful the corporate sponsors who made that happen. So there was your usual list of American companies, everybody from Harry Davidson to the more the newer companies like Measure and Google, so there was a kind of an insight into the state of the US presence here in Europe corporate level as well.
So Zan and land shar Russels Piurity, thank you very much for joining us. Stay with us. More from Bloomberg Daybreak Europe coming up after this.
So fascinating insight. Then, So what goes on well in the business day and afterwards of course in the evening with all of those liberation Susie Lynch, thanks for your time.
Well.
Donald Trump's fixation on Greenland has thrust it into an uncomfortable, if potentially lucrative position by drawing investor interests. The question now is whether the territorally actually wants outside investment in our Copenhagen beer chief. Sarah Scholein joins us now for more on this. Sarah, good to speak to you. What kind of investors have been drawn then to Greenland?
Good morning.
Yeah, we've definitely seen a big search and interest from all sorts of international investors. Of course, many Americans, Danish, European they're still looking to get in on some of the seeming the endless opportunities that Greenland offers in minerals, energy, tourism, infrastructure and defense, but so far it's just incredibly difficult to make any money out there, especially in minerals. That
has been described at grace lengths. The locals, officials and business leaders that are putting a very processor's spin the interest from international investors because they also know that they need this kind of investment if they want to eventually they want to get independence, they want to get out of control from Denmark.
So it's just a lot of things.
Going on and that they know that they really need to welcome these investors.
Yeah, it's an interesting piece of reporting of the conversations of what the experience of some of those investors have been though, and some of them privately questioning whether Greenland really wants the investment at all.
Yeah, it's the deception they have been given, and we hear it's been very mixed.
Greenland is very open.
They also say they said that many times Greenland is open for business, but when it really comes down to actually setting up business, many people find regulatory hurdles, legal uncertainty, lots of disputes, and then the things are moving very slowly. There have been a case of some examples in recent years where companies that have really gotten burned, and I think one of the most famous.
One is in the Quinifel.
It's one of the world's largest undeveloped earth deposits, where there's Australian mining company Energy Transition Miniermals. They spent nearly fifteen years their in development getting the mind ready and then uranium, which also mined this site, became the defining issue in one of the elections and then all of a sudden, Greenland banned uranium mining and this Australian company had to give up all an investment, and I think that really become a prominent example of how easily the
Greenlandic Greenlanders can take these projects hostage. So local politics really take up a lot of space in Greenland. And for international investors that are used to maybe invest in Europe in the US there is a different environment. So it's it's just a very complicated situation because the Greenland is also just essentially trying to protect your NATI. Sure, they were trying to protect the population and they've seen what can happen in other places if they give up
too much control. Iceland is often referred to an example in the tourism industry.
Great tourism in Iceland.
The problem for a lot of Iceland, and there's a lot of money actually ends up in foreign hands because it's international companies that have come in.
Yeah, and of course you've got to remember it's still very very sparsely populated. Isn't there only fifty seven thousand Greenlanders in all? I mean, do you think the situation is likely to change?
Well, it has to.
Greenland has a goal where it wants to diversify its economy. They also want to lessen reliance on the Danish subsidies. They get around seven hundred billion dollars from the Danish government every year, and they have a goal of advancing towards independence. To get that, they do need foreign investments and they need an economy that is less reliant right now on fishing, and they need more tours and they
need more minerals. So it's still in this it's a really tough dilemma for them because they really want the investment, but they're also very afraid to give up the control.
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