The Fed, Banks, and Credit Suisse

So again, Ira, about all all I know about your business? I can sum up and believe me, I don't want to know anymore. I can sum up in one function WI RP and all I know is the markets tell me that rates are going to peak in May and then start going down. Are we going to hear anything like that from FED Chairman J Pale tomorrow? Well, I don't think so. I think actually Jay Powell will probably say,

you know, we're still in inflation fighting mode. We're going to you know, hike one more time, and we're going to let the data guide us going forward. So so I think he's going to try to say that, Look, unless the unemployment rate goes up or inflation comes down a lot we're not going to be cutting interest rates.

I think the financial market anks that we've seen over the last ten days or so is really what's what's driving the market to think that the Fed's going to wind up easing monetary policy a lot earlier than it was thinking just two or three weeks ago, and really not much has changed with the underlying economy. I think just the markets pricing in the risk that that will be contagient from what's going on with the banking sector.

I a couple of months ago, you came onto the show and Ted and said that there was a cap on yield, especially on the front end of the curve, because rate cuts were being priced in. Are rate cuts still being priced in? Yeah, so so we're we're cutting. We're actually pricing for a few interest rate cuts, at least two interest rate cuts before the end of the year. And I think that you know that that's going to

that's starting to be priced out now right. Some of the market acction that we've seen today, I think with some of the more explicit protection for the positors that governments are doing, the fact that we've tried to work out the credit suee situation, all of those things are making it the markets kind of reprice the cuts that were priced in UM. But but the you know, we still are going to price in cuts, right because at

some point in the near future. UM. I still think that it's pretty likely and you know, we've thought this and this is only changed incrementally over the last week. UM. Is that is that the Fed's gonna hike one or two more times, and then they're going to and then they're going to pause, and then more than likely the

next move is going to be a cut. The bigger question, I think is when will that first cut start, When will that first cup be and then the magnitude and pace of cuts thereafter, And the market is you know, basically had priced before all of this financial market turmoil um UM had been pricing basically very slow pace of cuts in twenty twenty four. UM. Now I think that that was always unlikely because when the Fed starts to cut, they're cutting because there's a there's usually a problem in

the economy, and and they'll cut more aggressively. So the yeah, the market is pricing for cuts. It's actually pricing for cuts in the second half this year. I think though eventually those are going to be priced out in the next week or so, and I think that that could easily start tomorrow with J Powell's press conference And Ira, do you think FED Chairman J Powe will address the banking turmoil which is a phrase I've been using, I've

been avoiding crisis. Do you think he will address it or will have to be maybe response to some questions or how do you think he need he deals with this? Yeah, I think turmoils the right word for it. Certainly it's not yet a crisis, right and the FED and other policymakers are working hard to avoid it becoming a crisis.

But yeah, J Powell definitely has to address that, and I think the way that that they'll couch it, and I think that there will be something in the post meeting statement and then he'll be a little bit more detailed. In his opening remarks at the press conference, half an hour later, is saying we hiked interest rates by twenty five basis points because inflation is still a problem. We

are aware that the banking sector has some issues. We are using our liquidity and funding facilities to the best of our ability, and we're using our credential regulatory authority in order to, you know, make sure that the financial sector is as safe and sound as we can make it. So I think that he'll try to different connect the monetary policy and the and the banking regulator and funding policy. All right, we're going to head down to Washington, DC.

We thank you though for your comments here today our Jersey chief US Interest Rate Strategists. You're listening to the team Ken's our live program Bloomberg Markets weekdays at ten am, easting on Bloomberg dot com, the I Heart Radio app, and the Bloomberg Business app, or listen on demand wherever you get your podcast. Well, how's this for a headline on the Bloomberg terminal hike. You lose pause, you lose more.

That's twenty five basis point FED call, and the author of that is Anna Wong, Chief us as for Bloomberg Economics, and give us a sense of kind of the tight rope this FED is walking right now as it begins. It's it's two day meeting, right So on one hand, the FED has a very compelling case to pause, as many people want them to because you know, the financial market, it's very skittish. We're still in the middle of the banking crisis. You don't know which shoe is going to

drop tomorrow. On the other hand, inflation is still at forty year high, and in fact, inflation and in this current you know, banking crisis is the highest in any other banking crisis in the last one hundred and forty years we found. So there's still a very good case to continue hiking. This is why it will be a very very tough decision tomorrow. And you use the term banking crisis, and I've been hesitant to use that term. I'm not sure what it is. It's it's not two

thousand and eight. To me, give us a sense, your sense as a trained economist, how serious is this that what we've experienced over the past couple of weeks. Well, I so, first of all, I think in the compared to all the other banking crisis, which is defined as a bank run that could lead to closure, merging, or take over one or more financial institutions, well, I think this bank run that we're seeing is not as crazy as the past nine bank runs in a banking crisis

in the past one hundred and forty years. But it could get worse. I'm not saying it won't, but but I think that, you know, the economic impact of the current crisis, I'm our predictions is that it is not as severe as the previous ones. Well, Anna Paul Sweeney mentioned this earlier in the show. You made a pretty exciting call about five percent of a terminal rate. Then we had Jamie Diamond talk about a six percent terminal rate,

which kind of got the markets excited as well. As we talk about this banking termoil, is there a possibility that the term all weight goes in the other directions? Well, you know, the terminal rate was going to five point seven five before the the collapse of the SVP. It was the heading towards the direction of six, right, But

now it's fallen back to just right below five. And I think that given our prediction of what the fight would do, which is another hike of twenty five pips so that they get determined the FI funds rate to five percent, maybe there will signal in the SEP just in other twenty five pips and then that would get us to five point two five in May and perhaps pause and hold at that level in the rest of the year. And where are we in terms of the

discussion about the economy and recession. Where where do you think that argument stands right now? I think that this is the times where the model is kind of syndicating themselves. The model of one hundred percent recession can basically the model takes past recession as inputs, and in the past recessions, whenever the FED raises rates this rapidly, something breaks, and the models are telling us something will break before September.

So we just updated our models. Those those things are still telling us that a recession will hit before by the time of September this year. Anna, there was a great chart on the Bloom Interminal about the financial conditions

index and how is in a restrictive territory. But I think of like eighty three basis points worth of restrictive territory, and I'm wondering how much of this kind of chaos, which from what I understand, the consensus consensus is that it's idiosyncratic, is actually an overreaction as opposed to perhaps doing the job of the FED for the FED. Well, you know, this gets back to the question of what

is financial conditions? And remember a month ago everybody was saying why why why, Powell saying that financial conditions tightened when the financial Conditions index on the terminal, and as do other indexes of their show that it has eased. Well. One thing that the Food pays a lot of attention to is credit lending standards, right, and this is the kind of channel that most people are talking about now with this banking crisis and how they could cause the

economy to contract. But the thing is bank lending has been declining and contracting very sharp even before the banking crisis because of the rise in interest rate. So I think to a degree when people say financial conditions is tightening right now and the economy is going to contract more deeply, well to a very much high degree, that already kind of happened. It was in training the last six months before the banking crisis. So I think it's

kind of an overreaction right now in that sense. And I know economists and FED watchers really parse the words of the FED chairman during his press conference, his or her pressed conference. What are you really going to be focused on tomorrow when we do get to Q and A with FED Chairman Powell, I will be focused on whether he draws the line between monitor policy and financial stability tools. I think he will channel Christine Lagarde and say that inflation is still too high. We've got to

use interest rate policy to fight inflation financial stability. We have enough tools to support them, using our discount window and all the liquidity tools that we have developed over the past you know, fifteen years. We know we have

confidence in the banking crisis. So he has to come out with a lot of confidence about the US banking crisis so that people are not further spooked, but at the same time show that the FED is serious about fighting inflation and a thirty seconds here, do you think that the chair will speak about the possibility of pausing quantitative tightening or anything with that regard to bond purchases

or selling. No, but I think he will be very clear that the usage of account window and the expansion of veil and sheets through with his account window is not saying that the QT is effectively dead. But then they will continue to monitor the situation of reserves demand to make sure that there wouldn't be some discontinuous fights. Thirty seconds here, what would be a mistake by pal tomorrow? Anna, I think a mistake it would be if he paused

great hikes and also to signal imminent pause. All right, great stuff, Anna Wong Chief, you as economists Bloomberg Economics. I love this academic background BA and economics and statistics from Berkeley. I mean, who does that? And then she doubles down on this whole thing. It's a PhD in economics from the University of Chicago. It's Matthey. It is It's very Matthey. But that's why, that's why she's the chief.

He's economist of Bloomberg Economic Yeah, and she was, you know, she's been in the government and you know, so she knows how this whole thing works. Former FOOO Reserve Principal economist for five years, so she was at the FED. She knows what levers get pulled, and she knows what data points are really important to this federal feeder reservant, to this FED chairman. So we love having access to the great mind of Annawank Chief. He as economist for

Bloomberg Economics. She's based down in Washington, DC. You're listening to the tape cancer our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tuning half, Bloomberg dot Com, and the Bloomberg Business alf You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty. All right,

here's the conversation of the morning for me. Here's a guy, Jerome Julius, senior credit analyst covers the European banks for Bloomberg Intalent and she joined in twenty nineteen, which means I did not hire him, but I you're really really good things about him. You know, before Bloomberg, he was at Merrill Lynch and Barkley's and you know, Fitch Ratings. So he's been around the block a few times. And he's gonna explain to me what is an eighty one

bond and why do I care about it? Because boy, I'm hearing a lot about that in the context of UBS's acquisition of Credit Swiss. So we welcome Drone Julius, Dron. What do you got for us? Hi? Thanks, thank you for inviting me along. Right, So at one bombs? What are they? Eighty one? It stands for additional Tier one and it's an instrument that's used by banks, mostly outside of the US for the regulatory capital purposes. They are

the most junior type of bombs. And they said just above Corman equity, so just above the shareholders, and they share. They are a bit equity like they share with equity. A couple of features that make them equity. They are perpetual instruments, although the issue does have a call option

on all those bonds. They've got a discretionary coupon that differs from pretty much every other fixed income instrument which has a which have must pay coupons, right, and the discretionary coupon is similar to a diffidend on a stock. They've also got a principle most absorption language that means that they have a certain triggers set in motion is activated, than an investor could could lose all of its all

of its money. Um, so they're going a nutshell. Other key features of an eighty one bond, it's it's a big market. It started in twenty thirteen, and you know, it's a ten about ten years ago, and I can't remember talking about how much is outstanding, but it's pretty much every bank in Europe and that's the area that I did I focus on, has got some of those instruments outstanding, some more than others. But it's it's a

big market. Well, then fold into us the idea or folding the idea as you say that the Swiss eighty one story is just that, a Swiss story. At the end of the day, how are you seeing the read through into whether or not people still want to touch this type of bondum. So, so, what happens with Credit Squiss is that the eighty one bombs issued by Credit Suis have effectively been wiped out right, They've been written down to zero, while the credit shareholders walked away with

three billion Swiss francs. No, that's not a lot of money, but it's also much about the money. It's about the principle that the claims hierarchy if your life has been abandoned, has been turned all its heads, because normally you shouldn't see shareholders with some recoveries while eighty one bombholders are wiped out. And that's the huge controversy that you've seen play out yesterday and for a long time to come.

I am now, what's the read across um. It's um, you know, it's it's not it's not a perfect read, of course, because Switzerland has got its own jurisdiction. It's not part of the European Union. UM, the UK has a different sort of set of rules again, but they're all broadly similar and UM they're also bolved by the same constituencies across the globe the eighty one bonds, so

there is certainly a reader course. UM. I think what it has done is it has UM made eighty one bond holders potential investors, UM wonder if they shouldn't require or the amount of higher yields on US board. And that's why you saw us everyones sell off yesterday. There's been a bit of a recovery today, to be honest, But yesterday, all of a sudden, both across UM, across all currencies that every one boards, they they sort of

bye between four to eight points on on average. And that really is a reflection of the fact that UM, you know, all of some as they're come to realize that in a similar situation worre to play out elsewhere, they may end up with nothing, while share all of

us still gets some recovery. Yeah, if I were, you know, an a one bondholder, I'd be upset too, but it was in their perspective, so you know, shame on me, I guess I don't know, So Jaron talk to us about just the credit market for European banks in general these days post Credit Swiss and you know the threat of you know, are concerned about a recession Howard banks,

bonds trading in general these days. Well it's uh, you know, everything is it's clearly a trading wide particularly well it's all started with the Silicon Valley Bank grad that also had its repercussions over in Europe, and that's also was the trigger I think of the of the problems that engulfed Credit Suiss. You're playing a little bank in Silicon Valley for European credit wars, don't go down that route. Um, people were looking around, Uh you know, are there any

other banks that have liquidity problems? And the really course wasn't wasn't perfect because you know, Silicon Valley Bank, Uh, you know, the key one of the key problems there was this the unrelized gains on it's health. The majority portfolio that didn't apply to Credit Swiss. It doesn't, of course a large bomb portfolio, but the large majority of that was in its training book, was already marked and market.

That wasn't the issue. The issue was the fact that credit swees already had some liquidity problems in the fourth quarter, there were huge outflows, and um, it's it's perhaps not a surprise that if liquidity concerns come to the all that's that's that inst this I started to get jittery about about companies, about banks that have had liquid holes in the past. So we had a fifty basis point

a hike from the ECB last week. We've got a Bank of England decision this Friday, I believe, March twenty third, eight am I believe for for that for those folks, how well are the bond market or the bond holders digesting about fifty basis point rate hike and what still might be a very hawkish meeting and decision this Friday. Well, I'm not an expert, uh, you know, the the central

bank rates, the policy rates and everything. Um, what I would say is that in general, higher rates should be a good thing for banks, right because until you know, for the past decade, everybody was complaining about how low rates were and how that depressed the returns that banks were to make. So that's not finally changing. Rates are going up, margins are going up. That interesting becomes going

up for the large majority of banks. But there are some side effects and you know the unrealized games on healthy maturity boomboogs is one of them. But overall that interesting income should benefit from higher rates. The question mark is, and I heard you rest referred to it before I joined the call is what does that do to landing? You know, what do to economy and to the UH to long demands and the willing is also bank still to land and that's you know that that is one

of the big announcewers. All right, John, thank you so much for joining us. John Julius, he's a senior credit analyst for the European banks at Bloomberg Intelligence based in London. You're listening to the Team cancer a live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot com, the I Heart Radio app, and the Bloomberg Business app.

We're listening on demand wherever you get your podcast. Clearly, one of the lead stories for the last week plus has been this UBS and credit Swiss situation, and we just had Jerome Julius on from Bloomberg Intelligence. He follows the credit side of it, and I note that Bloomberg Intelligence is going to be hosting a webinar this Friday, and this is and they're focusing closely solely on this UBS credit Swiss thing and the implications for the space.

And we've got an all star lineup. Alison Williams, who is our senior bank analyst in the US, covers UBS and credit Swiss. Jerome Julius who we just spoke with. He covers the European banks from the credit side, so we can go to that at one issue. And then Elliot Stein, he's ahead of our litigation here at Bloomberg Intelligence. He can go to the you know, the whole angle about will there be some of these at one bondholders with ab sewing and kind of what's the outlook there.

Details on this you can find if you're a terminal user go to s m n R go and if you're not a terminal user, you can find it all the information out on social media, I know on Twitter at BBG Intelligence go check that out. They have all the details there. We've already got a bunch of investors signed up. So if you want to get smart on this UBS Credit Swiss thing and what it means maybe for the space going forward, this webinar could be a

good spot to start. Speaking of that. You can also read the great work from and listen to a Shnale Bassok on Bloomberg Media all over the place. She is our Wall Street reporter. She's been covering this story. And I guess one of the angles, Shale and thanks coming into our Bloomberg studio here. One of the angles is what happens to this Credit Swiss First Boston spin out led by one mister Michael Klein, banker to the stars.

What's the status of that thing? A banker to very specific powerful stars that have lost a lot of money recently on Credit Swiss. So I think that that's an important element of a lot of this is where does Michael Klein stand in a lot of the discussions. Remember, Michael Line was once a board member of Credit Swees. He was supposed to become the leader of this First Boston spinoff that everyone was talking about on Wall Street

because it was the return of First Boston. But now there are some interesting things to think about as Credit merges with UBS, which is that in essence, for years you had UBS and I was front row seat covering this really trying to punch above their way rise up when it comes to invest in banking across the world, particularly particularly in the United States. When I look at the League tables today, UBS is number twelve, Credit Spieces

number thirteen. This is for mergers and acquisitions a down market currently, so you know, not to make of that, but as long as I've covered at Credit Spees was really six or seven, there were top ten investment bank. There's really a lot to be gained aut it there with a lot of really key relationships with private equity

firms around the world. So you know, as our reporting stands right now, UBS has told counterparts at Credit Spees that they select, they want to select bolstering that investment bank and then dump riskier parts of that investment bank. We've heard some of that from executives as well, but they really did not come out full scale and say whether First Boston spinoff was a complete no go. The preference here is to bolster the investment bank inside of

UBS as much as they can. So that's the European story. Let's cross the Atlantic and bring it back here state side and talk about the First Republic story, because there's a lot of really big names circulating kind of in the air when First Republic is mentioned, Jamie Diamond, Warren Buffett, Tom Barrick, who's a board member on First Republic as well, and I'm sure there's plenty of others as well, walk

us through what we know. Yeah, listen, right now, we're at a point where you had a series of bank failures already in the United States. Some of those have led to deals, and some of them have led to very messy sales processes that have not led to deals at all yet. But when you look at First Republic, there's a worry here that if the problems exacerbate, then you really have a problem that will spill over into

the banking system in a bigger way. That is one reason why you're watching all of these bank executives in particular. So if you talk about the Diamond and the other bank side of things, the reason they put the deposits in, the reason that they're discussing a potential way to convert that into equity, whether there's even more assistance needed, whether the government needs to step up in the bigger way. There are seriously a lot of counterparties here involved thinking

about what the right move is next. We are weeks away from earning season. I think that's a really important catalyst here because we don't have a lot of data in terms of how bad things really are under the surface. That is something that the market is uncertain and uncomfortable about. But you saw our scoop overnight about the idea here that the FED is considering, or you know, federal officials

are considering more extraordinary moves around deposit insurance. That is something that is booing the market here and making sure that this is something that depositors know that the government is really thinking about saves for the deposit system in the United States. Jamie Divans doing a wonderful personation of JP Morgan kind of stepping in here much less like JP Morgan did back in Panic. And I'll get you the book because I read a great book on it.

It's everybody has it. But I'll get it to a second. Um, which wise I'm gonna get it to I'm googling. You give me the answer I to find the book. Um, is it unusual if it feels kind of unusual to see a bank executive taking such a leadership role which kind of feels almost quasi regulatory. If you will give us a sense of kind of what you're reporting has turned up. Yeah, it's interesting that you mentioned that because I think that there are a couple times in history

that we can look at. This is my news letter last week actually okay, uh, the House of Morgan. Oh yeah, have read that. Very good, awesome, So if you want to get a sense of history, JP Morgan and saving the banking thing that seem a little bit Also, by the way, the Morgan Library, we're talking about it. If you go there, it's where the exact room where JP Morgan brought in bank chiefs, shut the doors, locked the doors and made them figure it out that night. So

we're getting way. Oh yeah, I think it's thirty seven Stree. It's open physically there. Yeah. JP Morgan himself, the capitalist, his actual library. Uh, they're rare copies of the Gutenberg Bibles. I actually just go to We're going to take a til trip. Yeah, anyways, memory Lane. But you know, there are a couple of instances. I think the LTCM rescue

is another one where bank chiefs got together. One where the bank chiefs or bank executives got together and did not require the FEDS, which I think is still an outstanding story. Archagos is another example of this where they kind of just had to figure it out and that did not work out. So well, that's what happens, hary to interrupted, isn't this what happened in like oh eight, Like Lloyd Blank find basically took that role. Um No, you know, I think two thousand and eight overwhelmed everybody.

It was really the government. It was Geittner, Yeah, um uh, Hank Paulson, Hank, Hank, Paulson, um, and and those folks that literally, uh, every weekend there's a famous moment and two big to fail where you're going to just remember this moment where Sorkin writes about Geitner going for a

run and processing all these problems. But anyways, yes, no, but to the point that you guys are making the banks themselves are playing a large role in this set of rescues, The government itself has complications because there are Remember in two thousand and eight, they did raise the

FDIC deposit limits. I was joking in my mind earlier, because I'm a nerdy person, that the FDIC deposit caps are facing inflation, right because they have been raised in the wake of two thousand and eight, and now we're facing an issue here again, where do they get raised? Is there another tier system? Is there a number of years in which they can provide full, full scale backstops

the broader system. And by the way, this is all happening in a very contentious DC where there's a debt limit that we are discussing as well, so you know, this is a different time. Last time we got this dire of a debt ceiling debate was twenty eleven, so not at the same time as we were discussing these Banking Act stops. But yeah, the banks certainly are playing a large role. But remember, let's not act like they don't have something in it for them. They've already gained

billions of dollars worth of deposits and inflows recently. And by the way, if there are more issues in the banking system, it could ripple into them as well. It's funny, I don't I'm kind of thinking about this. Should I be asking where's Brian moynahand on this? He's a big around. They're all around. Actually, they're all currently today in DC at the Financial Services Forum. Okay, you know it's funny.

I was talking to a banker yesterday and I was like, one of my sources saw you walk into the White House. I was like, are you working with the government or are you joining the Are you joining the government? And just started laughing. Everyone's in DC. And so it has definitely been, you know, a group effort, but yes, Jamie Diamond has been playing a very key role. What's next year?

I mean I actually kind of went into last weekend thinking I was going to come We're all going to come back on Monday with talking about another bank or two or three that had failed or was failing, and we didn't get that. What are you hearing out there? I think the volatility is very concerning the fact that you have First Republic up forty percent and down forty

percent in a matter of twenty four hours. You know, these are bank stocks, These are supposed to be safe assets, So you know, the trouble that's under the surface is significant. The FED day tomorrow, of course, as you guys probably been talking about constantly, you know, there are a lot of uncertainties about how markets move. Remember it's not just the banks that are feeling pain. That's the buy side as well. They've lost a lot of money last year and they're losing a lot of money this year on

crowded trades that are now unwinding, right right. Interesting. We'll have to see what we hear from the Fed tomorrow as they give their perspective. Fed Chairman Jpal that'll be coming up tomorrow. We'll certainly have that. You're listening to the tape cans are our live program, Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New

York station, Jo Say Alexa play Bloomberg eleven thirty. Let's talk commodities here, let's talk copper. Let's talk like a real company. Uncle As Seidler, vice president of investor Relations. For the company's name Arubius Rubis Arubis Okay, Now the symbol I'm using here on my Bloomberg term. It's a public traded company in Germany, NDA Space gy Equity and you pop it up there and it brings you everything you need to know. And it's a It's based in Hamburg, Germany.

It's the largest copper producer in Europe and the largest copper recycler that's got a market cap of three point eight two billion euros euros. Thank you very much, Agola, thanks so much for joining us here, Arubis Copper. Talk to us about I want to talk you about the copper recycling business. Talk to us about how you guys play in a copper recycling business. How important is that to you guys? It is important because it's standing for well,

input material wise for forty percent of our business. So we are a copper producer, as you said, and we are using as an input material almost one million ton of different recycling materials. And now we're doing our first move here in the US market in terms of recycling. We are just planning to build a big recycling site or the first one for complex recycling materials that is circuit boards for example here in the US in Augusta

in Georgia. So we broke ground last June and now we're looking forward to spend six hundred forty million euros there and yeah, looking for two hundred people around working for us over that stuff. Yes, that's definitely a very global business here. But would you say most of the business that you have are now concentrated in Germany or

how would you describe where you guys play. Well, Actually, the copper business is a global business, so we are sourcing globally, especially when it comes to our primary materials, that is a material coming from the mines. Here we are processing roughly two point one billion tons of copper concentrate that is sourced globally. The recycling market for US currently is more a European one. We are sourcing thirteen percent from the US and now want to go there,

but it is sourcing wise a global market. It is we are producing copper cassots and why a rod. That's also a commodity, so to say, that's more a European market. Where do you source copper from? Typically typically, well, Bulgaria is a market in Europe for US. We have a primary smelter in Bulgaria as well. The other ones is coming from South America. We are sourcing from Indonesia, from Australia, you name it, wherever it comes from. I want to

shift gears a little bit here. I'm going to talk about the pricing action right now in Clark commodity space ahead of the FED tomorrow. We're seeing risk metals like carper rallying. You think that's a little maybe optimistic saying that, like the commodities market is signaling there's going to be pass or how do you interpret that? All talking about copper, it is always we are named doc copper. So how the copper prices developing, that the mirror of the how

the global economy is developing. Copper prices are currently coming up. Talking about the other medals, we are producing gold, silver, nickel as well. In this times copper gold is always a safe haven. So we've seen the commodity prices for precious metals coming up. This is something we are benefiting from and we are quite optimistic. China is coming up.

The demand is increasing after the long period of COVID and that means for us we are not directly dealing with China, but China is demanding for fifty percent of the global copper market and that is where the price increase, supplies fluctuations come from. That they drive the prices. So what does the opening of China mean both from supply

and demand of products? Do you think, well, first of all, they will ask for more primary materials because that country is needed copper and they are even though they are producing in that country a lot of copper. They are net still a importer of refined coppa. That is good for the recycling market. They do well as we all do. After the Ukraine War, they try to look and have a safe haven for their supply chains, and I think hopefully the reopen them will ease a little bit more

than supply chains. Also for the European American automotive industry. I would say, so our listeners are everybody right now really able? Me just brought it how everyone is so interested in this banking crisis and looking at it from every angle imaginable sign A note earlier that adalysts are saying that this is actually bullish for the prospects of

oil prices. Abahts us connect the dats there and why that is actually, as we are one of the leading copper companies in Europe, I'm not allowed to have an open opinion on the copper prices. I can. I can quote Goldman Sex for example. They just published something where they see that they see the copper price as well above ten thousand euros, so it will go up. This is what we expect, all right. So recycling, I'm just looking at our PGeo function on the Bloomberg termin kind

of gives you some segment breakout. It's still a single digits as a percentage of your total revenue recycling. Is that correct what we have? Yeah? Not we are not talking in terms of revenue, but but it discounting for a lot of our businesses. So talk to us about why are you building this plan in Augusta, Georgia, other than they be close to the Augusta National Golf Course and hopefully get tickets. I mean, talk to about the

future recycling. M All I know is I'm separating all kinds of stuff in my house every day when I usually just toss it away, no mass. So what's happening in the copper recycling businesses? Big? Is it growing? It is extremely gloring, especially in the US. And if you do so at home, it is a kind of urban mining. So it's good that you do so you should recycle it all now. Actually for us, we are coming from the market angle. The market for recycling material in the

US is so promising. Currently we are talking about a market volume of roughly six million tons and we have growth rates about five to six percent per year. And we are the first as I said, complex recycling company building a recycling plant here in the US. And at the end, the material you bringing to your recycling companies, what you are recycling is coming to us one day and we are bringing it back into the US market.

So when we're working at all this these confluence of geopolitical factors here, we're working at the war in Ukraine now in its second ear, China is reopening. Give us a little bit of a broad outlook of just where your how you see the outlook for the commodity space evolving from here? Yeah, actually talking talking for copper, as

it is some material for the green transition. It is about every electronic vehicle needs copper, or every windmill, every solar panel meets that, and that the green and climate change things we need to avoid. For all these industries, you need the metals we are producing, and therefore we think that the copper outlook is extremely positive. All right on the side, Thanks so much. I'm just looking at my Google maps here for Hamburg. I've never been, but

it looks really cool town. They got the Elbow River coming in and then comes into the town to the city of Hamburg, get breaks into like a million different fingers. So there's water everywhere it is in Hamburg. How cool is that? So I need to get Actually, I've learned that we have more bridges than Venice has more than Amsterdam too. I'm not sure about that. So anyway, put Hamburg on your list of places. Ago looks pretty cool.

Angles Sidler, vice president of investor relations for a Ruby, which is the largest copper producer in Europe and the largest copper recycling worldwide. Uncle that joins us live here in our Bloomberg Interactive Broker studio. We appreciate her making the trip. This is Bloomberg. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm

Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three. And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio