This is Bloomberg DAYBAK for this Tuesday, the twenty seventh of June in London.
Coming up today, talking tough, Putin labels, Wagner mercenary commanders, traders as Progosian denies, coup.
Attempt, the sun rises on CenTra, Central Banker's head into the Portuguese mountains as rates near their.
Peak, Investors take flight. ODI Asset Management suspended its flagship heads fund on surging redemption requests.
And these new toys and putting the eye in IMF. Those are the stories we're looking at in today's papers.
I'm Jews Wilcock class retail therapy. A decline in UK shop price inflation offers a glimmer of hope for the Bank of England.
That's all straight ahead on Bloomberg Daybreak Europe. The business news you need to start your day in just one fifteen minute podcast on Apple, Spotify, the Bloomberg Business app and everywhere you get your podcasts.
Good morning.
I'm Stephen Carroll and I'm Caroline Hetger. Here are the stories that we're following today.
Russia's President Vladimir Putin has condemned the leaders of the Wagner Mercenary group as traitors. In his first public comments since the weekend's revolt, the Russian leader said the attempted mutiny had failed to divide the country.
Dear friends, today I address once again all Russian citizens. I thank you for your endurance, solidarity and patriotism. Civil solidarity showed that any ransom, any attempts to organize internal unrest are doomed to fail.
Vladimir Putin's pre recorded address to the Nation voice thereby a translator, came hours after Wagner leader Yevgeny Progosion insisted he hadn't been attempting a coup. The Mercenary chief said the march on Moscow by Wagner troops had been a protest about injustices and mistakes made during Russia's invasion of Ukraine.
Meanwhile, top central bankers and policymakers are gathering in Portugal today for the annual ECB Forum on Central Banking. Bloomberg's editor at large, Francine Lacua reports now from Cintra.
A lot of debate on officials about what to do with three rises, and they'll get vital FaceTime here in Cindra, Portugal to iron out their differences. The question is whether a pause is warranted to appraise a still unfolding effects of policy tightening to date, or whether more action is required after the summer break to tackle stubborn underlying price gains from Cintra Portugal, Francin Lacquel Bloomberg Radio.
And we'll have more from Francin Laqua in just a moment.
To other news, ODI Asset Management has suspended its flagship hedge fund after being hit by redemption requests totaling nineteen percent of the fund. Investors have been fleeing the firm following fresh sexual assault allegations made against founder crisp and Odi, which he denies. Odi himself managed the European Fund until
he was removed from the partnership this month. Fund is known for its wild swings between profit and loss and had its best every performance last year, returning one hundred and fifty two percent to investors.
US Treasury Secretary Janet Yellen plans to visit China in early July, in a further sign of cooling tensions between Washington and Beijing. Bloomberg's Washington correspondent Amri Horden broke the news. She points out that Yellen would be the second US Cabinet official to travel to the country in recent months.
She has continuously said, even an interview with me at the G seven Finance ministers meeting in Japan, that when their time was appropriate, she had all plans to go, and then of course were on the heels a Sertoy state Anthony Blincoln's trip. He just wrapped that up, so that really opened the door to have more of these principal to principle meetings between Beijing and Washington.
Amri Hordn says that the trip will include high level economic talks with her new Chinese counterparts. The visit comes as the Biden administration continues to work on an executive order that would regulate and potentially cut off certain US investments in China.
The news comes as China's premier spoke out against what he called deglobalization trends in the West. Speaking of the World Economic Forum in Tianjin, Li Kiang said economic issues should not be brought into the political sphere.
Some in the West are hyping up the so called phraseologies of reducing dependencies and de risking. These two concepts, I would say are forced propositions governments and relevant organizations should not overreach themselves, still less, overstretch the concept of risk or turn it into an ideological tool.
Speaking through a translator, China's premier also told the audience in the northern Chinese city that the world's second largest economy is still on track to hit its annual growth target of around five percent.
Credit Sweez has agreed to pay nine hundred thousand dollars in fines allegations that it reported trades late and misapplied key indicates to hundreds of thousands of transactions. The US Financial Industry Regulatory Authority said that the bank's brokerage reported about nine thousand trades late between November twenty fifteen and March this year. The transactions involved securitized products, corporate debt,
and agency debt securities, according to FINRA. The news comes after UBS closed its deal to purchase the troubled lender earlier this month.
UK food prices eased for a second month to fourteen point six percent. Bloomberg's Ewan Parts reports it's a.
Sign of how serious food price inflation has become. The reading of nearly fifteen percent is being hailed as progress. The British Retail Consortium says that price rises may have peaked with both food inflation and wider shot price inflation, calling for a second month in a row. The Trade Association says the easing was led by grossers cutting the
prices of basics like milk, cheese and eggs. The data comes as supermarket's face increasing scrutiny from the governments, with the biggest player sets bequised by MPs on Parliament Business Committee. Later today in London, I'm Une Potsiplinberg day Break Europe.
Those are a few of today's the top stories for you. A theme though, from China are concerns about independent financial analysis in China. This caught our attention today China has banned a couple of writers from Weibo. These are key commentators when it comes to stocks to jobless rates. Wu
Chiaobo has been suspended from Weibo. This is someone who has nearly five million followers on that platform, and so China potentially cracking down again on people who make you do some financial analysis and publish it on the social media platform.
You know, he's someone who's interesting because he regularly writes for Kaishan Global. He's published books on things like ten cent for example of China's economic transformation as well. Now, his recent posts have actually already been deleted from the site, so it's not clear if there was something that he posted that perhaps spark this move being taken by way Bo. But there are two other writer as well who weren't named, but they were banned from the website for spreading what
weaibo called negative and harmful information. But it's an interesting time when we're looking at influential writers who you know, communicate viawebo to huge audiences their views on the Chinese economy. This is part of a broader debate over how much information I suppose Chinese investors have when they're making these decisions.
Yeah. Absolutely, And it's also quite telling that one of the phrases was that these unnamed individuals attacked and undermined Chinese policy. So again sort of a concern abound financial analysis and how that is disseminated across China.
Yeah, indeed. Well, look, the IMFs, Geita, Goop Andath meanwhile, has told central bankers that they must must remain committed to fighting inflation. The fund's first deputy managing director spoke at the ECB's annual Forum in the Portuguese town of CenTra, setting up a meeting where many monetary policy bakers are near a turning point in their hiking cycle. Well, Bloomberg's editor at large, Francine lackways in center for us this morning and she joins us, now, good morning to you, Francine.
So Irallian Coles and Kita Gopinath to over dinner last night to the central bankers tell him to keep hiking. Is that the conversation that's dominating this meeting.
It is so. The premise I think for everything is basically the central banks for the moment have stayed the course. They've been managing to raise infustrates quite significantly without putting everyone into acession. The big question now is whether they pause, and this is true for the ECB, it's also true for the SAID and the BOE. Is whether they pause because they want to appraise the still unfolding effects with
policy techning today, or whether more action is required. So I thought it was extremely telling Stephen to hear from Jita Gopinath, who was here. She was opening the Central Forum, and she was basically saying that the most important, so that the second that the most important of the two evils is inflation. She believes that taken a long time to get back to targets, and so she basically put
it very bluntly. She was looking policy makers in the eye and saying, well, this means that central banks, including these be must remain committed to fight the inflation despite risks of weaker economic growth. Now, the IMS is also looking at it from a perspective on if you look at the inflation and what that does to consumers demand, it really does hit the porest. So they want to make sure that everyone is taken care of as much
as they could. She's also very interestingly talked about structural shifts in the economy that could produce more upside risks, and so again she mentioned financial stresses that could during her tension between price and financial stability objectives. So now that we have stability, is the right time to increase rates to get inflation down?
Okay, So in that case, how much debate is there among ECB officials about the September meeting.
Well, there's a lot of debate. Get lunchy as well, because if you look at what they've done so far. So let's remember that in the twelve months since I was in CenTra last time, they actually hiked to interest rates by four hundred basis points. And if you look at some of the inslation coming in red hot, it's not as easy as to say, look, all inflation is hot. You have core inflation and that's the sticky parts, and that's actually you know, stronger than expected, but you have
underlying inflation that's really coming down. So, for example, Bloomberg Economics saying, look, if you look at the headline inflation materially falling get and drew, driven primarily by energy inflation getting deeper negative territory, it's unclear how they handle this. So you have you know, twenty members part of the
cd Government Council, and frankly, there are three camps. Is stay the course high progressively, it's you know, let's be here, maybe do something in July and that definitely wait for September, and then I think there's also people in the middle that are still undecided and just want to see more data.
Francine, this isn't just a gathering of ECB central bankers as well. They have all of the other leading central banks present to Andrew Bailey's in the Bank of England among them. He's facing quite a different challenge to his ECV counterparts.
Yeah, he certainly is. And actually I was on playing with the chieved Commissa the Banking Eland, who was very pleasant. We did not contrary policy despite my best efforts. So we saw our suitek the Bank of England decision to lift raised by sixty basis points in June, and of course that was a surprise. But if you look at the cards that they will dealt, it's very hard to argue it wasn't justified by the recent one of data. They also remember, as central banks need to make sure
that markets think they're credible. So if you have a hot inflation friends, like they did the day before their Bank in England decision, it would have been very difficult for them, I think, not to argue by fifty basis points. The obvious next question for the Bank of England is whether it will be the first of many. So again, if you speak to bloom Boom Islamics, they think that the coin services inflation would have to keep writing significantly.
That's not their base case. But if you'll get you know, the kind of speak inflation that we're seeing right now, also probably not helped with some of the physical packages that was put in place by the government. They may just build data by data, month by month to decide what they do next.
Okaycine, great to have you on the program, and of course great to be there at CenTra and to hear all about it. Blueberg's editor at large Francine Laqua.
Up next, putting the I in IMF and Anti's new toys.
Now the paper review on Bluebird Daybreak Europe. The news you need to know from today's.
Papers for bloom Books. James will Cup joins us now for a look at what's in the papers, and we're starting with the Telegraph, which has written up some research from the International Monetary from the IMF, pointing the finger at corporate greed.
I mean, Stephen, this isn't just my pitch to go and join Francene in Portugal. There's more to it than that. Obviously, the IMF are at CenTra and they're putting out their research at the moment, and Francine just gave us this
masterful look at sort of the economics of that. But the Telegrapher picked up some of the political implications because the IMF are saying that profit increases accounted for almost half the increase in the Eurozon's post pandemic inflation rate, and companies increase prices by quote more than spiking costs of imported energy. So set in sootstone this conversation we're
having at the moment in the UK about greedflation. Supermarket CEOs and representatives are set to be in front of Parliament today and the IMF is saying definitively that actually it is people improving their margins now their big fear is. They then say that some wage catch up is to be expected, and they say that if pay were to be increased by the five point five percent rate needed to guide real wages back to their pre pandemic levels, and those are EU UK levels are even higher by
the end of next year to create a balanced inflation target. Well, to get back to the target central banks have companies profit share would need to drop to its lowest level since the mid nineteen nineties. So their message is quite clear as the sort of international monetary fund that actually companies need to feel at least some of the pain, and if they were to feel enough pain needed to get inflation back to target, it would be the worst pain since the nineteen nineties.
Yeah.
Absolutely, And all of those profits, of course have helped with the European stock market, you know, to outperform. Since the start of the year, Andy Haldane has written an editorial in The Financial Times about world the Industrial Revolution.
Yeah.
I mean, look again, if I were to have this plane ticket to Portugal, I too, like Francine, could be sat next to the Bank's former chief economist, Andy hall Dane. But I'll have to settle for the FT's editorial. Now, what's interesting is he's taking a longer view on this. He has long He was giving speeches back in twenty fifteen talking about secular stagnation, this idea of low growth rates, the idea that the UK, among many modern advanced economies,
is getting stuck in low interest rate policy. And he's saying, well, actually, the modern world, this new industrial revolutionary terms, it is creating three new races. First a race to decarbonized green technology, a second a race to remilitarize, and third this ongrowing
sort of race to reshure. And he's saying, you are seeing areas like Sheffield and Manchester areas of cheap local labor and cheap local land, having big manufacturing booms, and you're seeing actually real improvement in terms of secular trends. And he's actually quite positive about this. In the long term, this may be reversing big low issues for low interest rates and pushing growth in investment in R and D.
Yeah.
I can hear make UK the Manufacturers Association in the UK rubbing their hands with glee.
Yeah.
But in the flip side though, he doesn't comment at all on whether the UK is winning any of those just that those races are reshaping the global economy.
Interesting stuff. Let's go next to the Wall Street Journal writing about salaries.
Well, often we say Stephen here that you know, more money makes you happier, but alsojournal is saying, actually more money on your own terms makes you happier. But any work individual worker category, freelancers were the happiest with their work relationship even if they were paid much, much, much less.
It is in the US.
This is in the US. Yes, so it's Wall.
Street Channel And it's not like zero outs contract workers though, is it. Because it's a long read, you're going to be a little bit up the pole.
Well, it is still the aggregate. But I will admit that the big difference here is that if you then break that down sectorally, workers in tech, construction, real estate and finance were the ones who had a pay satisfaction, which then breaks down and the darker story is that those in educational healthcare were least happy and those working for gig economies like Uber, Instacart and door dash offen reported to such low pay that they couldn't afford to eat. So it does there is a divide there.
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