Trump Tariffs China Uk Europe Among Us Trade Partners Targeted Daybreak Europe 06 03 2026

TITLE: Trump Tariffs: China, UK, Europe Among US Trade Partners Targeted | Daybreak Europe 06/03/2026 CHANNEL: Bloomberg Television DATE: 2026-06-03 ---TRANSCRIPT--- LIZZY: THIS IS “BLOOMBERG DAYBREAK: EUROPE.” PRESIDENT TRUMP IS PROPOSING LEVIES AFTER GOODS WERE PRODUCED WITH FORCED LABOR STOCKS HIT AN ALL-TIME HIGH IN THE ASIAN SESSION. AND SPACEX COULD SET THE TERMS OF ITS RECORD BREAKING IPO AS SOON AS TODAY. THERE ARE REPORTS IT’S LOOKING TO RAISE $75 BILLION. GOOD MORNING AND WELCOME TO WEDNESDAY. HERE IS THE PICTURE IN MARKETS, ASIAN STOCKS AT A FRESH RECORD AS TRADERS DOUBLED DOWN ON THE AI TRADE. UP 710 7% ON THE MSCI PACIFIC INDEX. BEAR IN MIND THE S&P TOPPED SEVEN HUNDRED 600 IN YESTERDAY’S WALL STREET SESSION, THE NINTH STRAIGHT CLOSE HIGHER. MATCHING THE STREAK IN MAY LAST YEAR, WHICH MATCHES THE LONGEST WINNING STREAK SINCE 1995. YESTERDAY’S MOVE WAS THANKS IN PART TO ATTACK. IF WE FLIP CROSS ASSET, CAUTION FROM GEOPOLITICS BECAUSE WE HAVE OIL EXTENDING ITS ADVANCE AT $97 A BARREL, TRADERS NERVOUS DESPITE PRESIDENT TRUMP’S PROJECTED OPTIMISM BECAUSE THE U.S. AND IRAN TALKS CONTINUE TO STALL. AS YOU CAN SEE FROM THE YEN, FLIRTING WITH 160 PER DOLLAR, KEEPING TRADERS ON ALERT FOR ANOTHER INTERVENTION. WE ARE WAITING FOR A SPEECH FROM THE GOVERNOR OF THE BANK OF JAPAN LATER TODAY. IN THE BOND SPACE, 10-YEAR TREASURY YIELD UP AT 4.4 5% AND YESTERDAY A REBOUND ON THE FIRST OF THE TRIO OF JOBS DATA REPORTS OUT OF THE U.S., SOAKING THAT’S THE FED’S NEXT MOVE WILL BE A HIKE. LET’S LOOK AT RISK EVENTS ON THE AGENDA TODAY. WE WILL GET THE LATEST ECONOMIC OUTLOOK AND THEN THE U.S. ADP EMPLOYMENT REPORT. THE DRUMBEAT UP TO FRIDAY’S BIG JOBS REPORT. THEN THE FED BEIGE BOOK. LET’S SET YOU UP FOR THE DAY AHEAD. WE BEGIN WITH THE U.S. PROPOSING TARIFFS OF AT LEAST 10% ON IMPORTS FROM MOST OF ITS MAJOR TRADING PARTNERS FOLLOWING AN INVESTIGATION INTO GOODS ALLEGEDLY PRODUCED BY FORCED LABOR AS PRESIDENT TRUMP SIX TO REBUILD THE SWEEPING TARIFF WALL STRUCK DOWN BY THE U.S. SUPREME COURT. LET’S GET ANALYSIS AS WE SPEAK TO ROZ MATHESON. IS THIS JUST THE COUNTRY BY COUNTRY TARIFFS DEEMED UNCONSTITUTIONAL IN ANOTHER FORM? GOOD MORNING. ROZ: IN A WAY IT IS, IF LIKE A FROG TRYING TO HOP ACROSS A LILY PAD. ALL THOSE STEPS TO REBUILD HIS TARIFF REGIME BECAUSE HIS USE OF EMERGENCY POWERS WAS OVERTURNED SO THEY USED ANOTHER ACT TO ENACT TARIFFS BUT THEY ARE SHORT-TERM AND ROLL UP IN JULY. THE IDEA IS WHEN THESE ROLLOFF, HOPEFULLY THE OTHER TARIFFS CAN BE ENACTED IN A MUCH MORE LEGALLY STICKY — AND ARE MUCH MORE LEGALLY STICKY THAN PREVIOUS ACTIONS. USING THE LEVER OF ALLEGATIONS OF FORCED LABOR TO IMPOSE TARIFFS ON A LOT OF DIFFERENT COUNTRIES AND PLACES, INCLUDING THE EU, WHICH IS JUST TRYING TO FINALIZE ITS TRADE DEAL WITH THE U.S., ENACTING 10% TO 12.5% TARIFFS ON THESE PLACES. THERE COULD BE EXEMPTIONS FOR FOOD, TEXTILES, METALS. THERE’S A LOT WE DON’T KNOW. THERE WILL BE A CONSULTATION PERIOD IN PUBLIC HEARINGS AND SO ON, THEY ARE BASICALLY TRYING TO STITCH THIS TOGETHER SO WHEN EXISTING TARIFFS ROLL UP IN JULY THERE IS A SYSTEM THAT CAN COME IN. THERE ARE OTHER INVESTIGATIONS GOING ON. THESE ARE EFFORTS TO REBUILD THAT TARIFF WALL. LIZZY: ARE TRADING PARTNERS EXPECTED TO REACT — TO RETALIATE? ROZ: SOME PLACES MIGHT WAIT AND SEE IF THEY CAN NEGOTIATE CHANGES. THIS U.S. ADMINISTRATION IS KNOWN TO BE ABLE TO CHANGE ITS MIND. SOME COUNTRIES HAVE OPTED AGAINST RETALIATION. CHINA HAS SHOWN IT CAN RETALIATE. THIS IS ON THE HEELS OF THAT BIG SUMMIT BETWEEN XI JINPING AND DONALD TRUMP. CERTAINLY THERE’S A WILLINGNESS TO SHOW THEY CAN STRIKE BACK IF NEEDED. IT MIGHT BE THEY SAY TARIFFS AREN’T AIMED AT US SPECIFICALLY, THEY ARE ACROSS A WIDE VARIETY OF COUNTRIES AND MAYBE THEY TAKE A MORE WAIT AND SEE APPROACH IN TERMS OF HOW TO RESPOND BUT IT SHOWS BEYOND THE WARMTH AND RAPPORT OF THE MEETING BETWEEN DONALD TRUMP AND XI JINPING, THERE ARE FUNDAMENTAL DIFFERENCES GOING ON AND DEEP STRUCTURAL DIFFERENCES BETWEEN FREIGHT — BETWEEN TRADE AND A LONG-TERM FUTURE. YOU HAVE JAPAN, INDIA, THE EU, WHICH IS TRYING TO WRAP UP A TRADE DEAL. THE U.K. MOST COUNTRIES WILL PROBABLY WANT MORE DETAILS. BUT IT LOOKS LIKE MANY WILL GET HIT BY THIS POTENTIALLY. LIZZY: OK, INC. YOU VERY MUCH FOR THAT UPDATE. IT LOOKS LIKE IT TARIFFS ARE NOT HOLDING BACK ASIAN MARKETS THIS MORNING. WE’RE IN THE GREEN FOR THE BROADER MSCI INDEX, ON HOLIDAY AND SOUTH KOREA. LET’S GET A DEEPER DIVE INTO THE ASIAN CONTINENT. LET’S GET TO WINNIE HSU. WINNIE: ASIAN STOCKS ARE UP FOR A FOURTH DAY AND AS YOU MENTIONED, INVESTORS BRUSHING OFF CONCERNS AROUND PREPAREST — PROPOSED TARIFFS AND GEOPOLITICAL TENSIONS IN THE MIDDLE EAST AND FOCUS ON THE AI TRADE. TAIWAN LEADING GAINS. THE ONSHORE BENCHMARK CSI 300 UP 1.3% AS MAINLAND INVESTORS PULL MONEY AWAY FROM HONG KONG STOCKS AND FOR MORE INTO MAINLAND AI NAMES. WE HAVE POSITIVE DATA COMING THROUGH SHOWING THERE’S A PICKUP. LOOKING CROSS ASSET, WE ARE COST — CLOSELY WATCHING OUT FOR THE JAPANESE YEN, IT’S BEEN WEAKENING THE PAST THREE DAYS AND NOW HOVERING JUST A LOW THE 160 LEVEL AGAINST THE DOLLAR AS IT SEEMS LIKE TRADERS ARE UNWILLING TO PUSH THROUGH THAT LEVEL GIVEN INTERVENTION RISKS. WE CONTINUOUSLY HEAR AUTHORITIES ARE READY TO TAKE STEPS IF NECESSARY AND WE WILL BE CLOSELY WATCHING OUT FOR A SPEECH LATER TODAY. WE WANT TO LOOK AT THIS INTERESTING CHART, YEAR-TO-DATE, SHOWING DESPITE THIS BLISTERING RALLY IN SOUTH KOREA AND TAIWAN, IT SEEING NET OUTFLOWS FROM FOREIGN INVESTORS AND THE FAVORITE IS JAPANESE STOCKS, SEEING A NET INFLOW OF 74 BILLION U.S. DOLLARS. ON TRACK FOR AN ANNUAL INFLOW SINCE 2013. A LOT TO LIKE ABOUT JAPAN IN TERMS OF HOW CONCENTRATED AND LESS VOLATILE IT IS AND A LOT OF OFF TRADES WHEN IT COMES TO THE AI SUPPLY TRADE. THESE ARE CATCHING UP AS THE AI TRADE BROADENS OUT. LIZZY: THANK YOU FOR THE UPDATE. WINNIE HSU ON THE ASIAN MARKETS. LOOKING AHEAD TO WALL STREET’S SESSION, FUTURES MILDLY LOWER, JUST A TOUCH, AFTER A SESSION THAT SAW AI OPTIMISM DRIVING THE S&P 500 TO ITS NINTH STRAIGHT POSITIVE SESSION. LET’S SPEAK TO OUR MLIV STRATEGIST. WITH US IN LONDON TODAY. IT SEEMS LIKE IT GOES AI, GEOPOLITICS, TARIFFS IN THAT ORDER IN TERMS OF WHAT THE MARKETS CARE ABOUT RIGHT NOW. FOR THE RECORD, WHY DON’T MARKETS SEEM TO CARE ABOUT TARIFFS? VEN: GOOD MORNING. I WOULD SAY THE MARKETS CARE ABOUT THREE THINGS IN THIS PARTICULAR ORDER — AI, AI, A IPO’D THEY DON’T CARE ABOUT GEOPOLITICS AND CERTAINLY NOT ABOUT TARIFFS. THIS ADMINISTRATION HAS BEEN KNOWN TO CHANGE HIS MIND OFTEN. GOVERNMENTS KNOW IT AND NO ONE IS TAKING IT AS SERIOUSLY AS IF HE HAD ANNOUNCED AT THE FIRST TIME. THE SINGLE BIGGEST DRIVER OF THE MARKET AT THIS MOMENT IS AI AND THE OF PRODUCTIVITY IN EARNINGS. I THINK THE MARKETS WILL STAY EVEN THOUGH VALUATIONS ARE EXCESSIVELY ENTHUSIASTIC. LIZZY: YOU CAN SEE HOW AI OPTIMISM IS POWERING ALL THE SURVEYS FROM BUSINESS TO LABOR MARKET SURVEYS TO INDUSTRIAL SURVEYS. SPEAKING OF THE JOBS MARKET, MORE DATA YESTERDAY, LAYOFFS FALLING, THAT COULD REINFORCE THE CASE FOR A RATE HIKE. LET’S LISTEN TO WHAT THE CLEVELAND FED PRESIDENT HAD TO SAY.

IT’S REASONABLE TO KEEP RATES STEADY BUT IF RECENT TRENDS CONTINUE, IT MAY SEEM BE APPROPRIATE TO ACT. BASED ON THE DATA, I’M MORE CONCERNED ABOUT THE GROWING RISKS OF PERSISTENTLY ELEVATED INFLATION THAN THE RISKS TO FULL EMPLOYMENT AND MONETARY POLICY MAY NOT BE SUFFICIENTLY RESTRICTIVE TO BRING INFLATION DOWN TO 2%. LIZZY: A THIRD OF THE WAY THROUGH THE JOBS DATA WE ARE GETTING THIS WEEK, ARE WE BASICALLY BRACING FOR A FED TIGHTENING? VEN: I THINK IT’S BECOMING MORE AND MORE URGENT. THE LABOR MARKET HAS BEEN RESILIENT FOR A LONG TIME AND IT DOESN’T LOOK LIKE THERE’S ANY MAJOR HEADWINDS FOR THE U.S. ECONOMY AS WE SAW FROM THE JONES REPORT YOU MENTIONED. I THINK THE FED AT THE MID RATE, THEY ARE EXACTLY WHERE THEY NEED TO BE BUT IT’S BASED ON THE FED’S OWN PROJECTIONS OF INFLATION AND GDP. MEANING IF THERE’S AN INFLATION OVERSHOOT RELATIVE TO THE 2.7 THEY MENTIONED IN MARCH, THEY NEED TO RAISE RATES IN THE NEUTRAL RATE HAS TO BE AROUND FOR, FOR —4, 4.25. LIZZY: ALSO SOME HAWKISH SPEAK FROM THE BANK OF ENGLAND, SAYING THE CASE FOR A HIKE IS STRENGTHENING OF THE WAR DRAGS ON BUT THE MARKETS AND ROUGHLY PRICING IN A HIKE UNTIL SEPTEMBER. WHAT’S THE RISK IT COULD COME SUMER? VEN: A REAL RISK COME OF MOOD MUSIC IS CHANGING. MEGAN GREEN IS SAYING SOONER RATHER THAN LATER, THEY NEED TO ACT AS IF THERE’S NO END IN SIGHT TO THE WAR. EVEN BAILEY WAS SAYING WE CAN’T WAIT FOR SECOND ROUND EFFECTS TO FILTER THROUGH. I THINK THE SOONER THE BOE ASK, THE BETTER IT IS TO CONTAIN INFLATION BECAUSE THEY PROBABLY LEARNED THE LESSON FROM 2022 WHEN THEY WENT TO VERY SLOW AND IT COST THEM A LOT IN TERMS OF GETTING DOUBLE-DIGIT INFLATION. WE ARE NOT GOING TO GET DOUBLE-DIGIT INFLATION THIS TIME AROUND, BUT I THINK THERE’S A SOLID CASE TO TO ACT SOONER RATHER THAN LATER AND THAT WILL MEAN THE BANK OF ENGLAND HAS TO START RAISING RATES LATER ON MUCH MORE. THERE’S A CASE TO GO SOONER AND THAT’S WHY THINK SEPTEMBER 8 PRICING MIGHT COME FOR SOME TESTING INCOMING LINKS. LIZZY: VERY INTERESTING, THANK YOU. STILL AHEAD ON DAYBREAK EUROPE, HOPES BETWEEN — OF A DEAL BETWEEN THE U.S. AND IRAN FADING. WE HAVE THE LATEST FROM THE MIDDLE EAST, BUT FIRST SPACEX CLOSING IN ON ONE OF THE BIGGEST DOG MARKET DEBUTS IN HISTORY. WE WILL HAVE DETAILS NEXT. THIS IS BLOOMBERG. ♪ LIZZY: WELCOME BACK TO “BLOOMBERG DAYBREAK EUROPE.” BLOOMBERG HAS LEARNED THAT SPACE IS PLANNING TO — SPACEX IS PLANNING TO SET THE TERMS OF ITS IPO AS EARLY AS WEDNESDAY AFTERNOON IN THE U.S. REUTERS REPORTING THAT SPACEX AIMS TO PRICE SHARES AT $135 APIECE FOR ITS RECORD-BREAKING $75 BILLION IPO. LET’S BRING IN OUR ASIA AVIATION AND TRANSPORT REPORTER DANNY LEE. WHAT MORE DO WE KNOW ABOUT THE IPO ON THE PROCESS? REAL — AND THE PROCESS? RICK EXCITEMENT AROUND THIS. DANNY: WE NOW KNOW THAT THE SPACEX LISTING IS LOOKING TO SELL ABOUT 556 MILLION SHARES WITH THAT $135 APIECE, THAT WILL TAKE IT TO THE $75 BILLION THAT SPACEX IS LOOKING TO RAISE. WHAT WE GET IS THAT WEDNESDAY AFTERNOON TIMELINE IN THE U.S. FOR THE MARKETING OF THIS, THE TERMS OF THE IPO, AND THEN WE WILL GET TO THE MARKETING FOR A WEEK OR SO THAT THE BANKS WILL UNDERTAKE TO GAUGE DEMAND OF THIS STOCK. WE WILL QUICKLY SOON AFTER GET THE FINAL PRICING AND THEN WE WILL GO INTO POTENTIALLY PUBLICLY TRADING THE COMPANY. A LOT HAPPENING IN A SHORT AMOUNT OF TIME. THE PACE IS QUICKENING AS WE SEE AERIAL ANTICIPATION AND EXCITEMENT INTO THIS AI TRADE, FRANKLY. THE FACT THAT THERE IS NOT JUST A LOT OF ANTICIPATION FROM INSTITUTIONAL INVESTORS BUT ALSO THE RETAIL INVESTORS WHO ARE LOOKING TO REALLY CASH IN AND CLAMOR FOR THIS STOCK, AND ALSO FOR THE BANKS INVOLVED LOOKING FOR A PAYDAY, AND EQUALLY FOR STAFF PAST AND PRESENT WHO ARE GOING TO BE GETTING A WINDFALL FROM ALL THIS. LOTS OF STUFF HAPPENING IN THE NEXT DAYS OR WEEK OR SO. WE WILL SEE HOW THIS STOCK DOES TRADE BECAUSE THERE’S A LOT OF OTHER COMPANIES IN THE PIPELINE AS WELL. LIZZY: I CAN FEEL YOUR EXCITEMENT. BLOOMBERG’S ASIA AVIATION AND TRANSPORT REPORTER DANNY LEE. MARVELL TECHNOLOGY SHARES SEARCHED THE MOST IN 26 YEARS AFTER THE NVIDIA CEO, JENSEN HUANG, PREDICTED THE SEMI CONDUCTOR NETWORKING COMPANY COULD BE THE NEXT BUSINESS TO HIT A $1 TRILLION VALUATION, JOINING THE CLUB. THE STOCK, WHICH NVIDIA HAS A STAKE IN, SAW THE BIGGEST SINGLE GAINS IN A DAY SINCE JUNE OF 2000 AS JENSEN HUANG APPEARED ON STAGE WITH THE MARBLEL CEO MATT MURPHY — MARVELL CEO MATT MURPHY. THE NEXT TRILLION DOLLAR COMPANY, LADIES AND GENTLEMEN. THAT WOULD BE EXCITING. LET’S DO IT TOGETHER. LIZZY: I AM JOINED BY SENIOR STRATEGIST NEIL CAMPLING. GIVEN SOME OF THE HUGE NUMBERS AROUND A I RECENTLY, WAS THIS A SURPRISE CALL FROM JENSEN HUANG? YOU MIGHT EXPECT HIM TO BIG UP A BUSINESS HE HAS GOT A HAND IN, RIGHT? YOU JUST BASICALLY MADE THREE TIMES YOUR MONEY ON THE ORIGINAL INVESTMENT LAST YEAR. MARVELL IS A KEY PART OF NVIDIA’S ECOSYSTEM. MARVELL SITS IN THE INFRASTRUCTURE LAYER SO IT’S REALLY ABOUT EXPANDING THE ADDRESSABLE MARKET. IT IS IMPORTANT IN THAT SINCE. TO COME OUT WITH THAT KIND OF A STATEMENT AND TO ADD OR THAN OVER $50 BILLION TO A MARKET CAP OF ONE STOCK IS QUITE SOME EFFORT. IT SHOWS THE KIND OF CLAMOR FOR INVESTORS LOOKING FOR WAYS OF PLAYING INTO THAT AI TRADE. LIZZY: ANOTHER STORY GETTING A LOT OF HYPE TODAY IS UBER CAPPING ITS AI USE AMONG STAFF BECAUSE OF RISING COSTS. THAT SOUNDS COUNTERINTUITIVE. YOU WOULD THINK AI WOULD REDUCE COSTS. I THINK THERE’S TWO PARTS TO THIS IN TERMS OF AI USAGE. FOR US IN OUR EVERYDAY LIVES, WE ARE USING AI IN TERMS OF THE TOOLSETS FROM OPENAI OR YOU ARE NOW SEEING GOOGLE SEARCHES WITH AI USAGE. WHAT WE ARE TALKING ABOUT IS THINGS LIKE ANTHROPIC WITH THE USE OF CLAUDE, THESE ARE PROFESSIONAL TOOLS AND THEY COST MONEY, OR IN DIGITAL TERMS, THEY COST TOKENS. WHATUBER IS DOING IS CAPPING THEIR EMPLOYEE’S USE OF THESE PARTICULAR TOOLS. THIS IS SOMETHING WE NEED TO KEEP AN EYE ON. IF WE SEE CORPORATES GOING ACTUALLY WE NEED TO REDUCE THE SPEND ON AI BECAUSE IT IS TOO EXPENSIVE, WE MAY BE SEEING SOME FIRST SIGNS OF STRESS, IF YOU LIKE, IN TERMS OF, ARE WE GETTING THE RETURNS WE NEED TO SEE FROM THE AI? SOME INVESTORS GOING WE NEED TO KEEP AN EYE ON IT, THIS COULD BE, THE CANARY IN THE AI CHIPM INE AND IT COULD BE SOMETHING WE NEED TO WATCH OUT FOR. LIZZY: IT IS THAT KEY DISTINCTION BETWEEN TOKENS AND SUBSCRIPTIONS MAKING IT EXPENSIVE. FINALLY, WE GOT ALL THIS EXCITEMENT AROUND TECH. WHAT ARE WE EXPECTING WHEN BROADCOM REPORTS LATER? BROADCOM IS THE THIRD BIGGEST CONTRIBUTOR TO THE S&P GAINS THIS QUARTER THUS FAR. THE STOCK HAS RISEN SUBSTANTIALLY RECENTLY. WE ARE LOOKING FOR SIGNS OF WHAT GOOGLE HAVE DONE BECAUSE THEY ARE A MAIN PARTNER FOR GOOGLE TPU’S, THESE PROCESSING UNITS AS AN ALTERNATIVE TO THE NVIDIA ECOSYSTEM. WE ARE EXPECTING NEARLY 50% GROWTH IN YOUR ON YOUR REVENUES. HIGH EXPECTATIONS INTO THE PRINT BUT IT’S A KEY PARTNER IN TERMS OF THE AI ECOSYSTEM. LIZZY: WE LOOK FORWARD TO THOSE NUMBERS AFTER THE MARKET CLOSE LATER TODAY. NEIL CAMPLING, THANK YOU VERY MUCH. COMING UP, OUR EXCLUSIVE INTERVIEW WITH THE FORMER NATO SECRETARY-GENERAL JENS STOLTENBERG ON WHY RELATIONSHIP BETWEEN THE U.S. AND ITS EUROPEAN ALLIES ARE MORE DIFFICULT TO MANAGE THESE DAYS. THAT’S NEXT. THIS IS BLOOMBERG. ♪ LIZZY: WELCOME BACK TO “BLOOMBERG DAYBREAK EUROPE.” THE FORMER NATO SECRETARY-GENERAL JENS STOLTENBERG SAYS TENSIONS BETWEEN THE U.S. AND EUROPEAN ALLIES ARE NOW MORE DIFFICULT TO MANAGE COMPARED TO WHEN HE LEFT OF THE ALLIANCE. PRESIDENT DONALD TRUMP HAS REPEATEDLY CRITICIZED EUROPEAN NATIONS FOR NOT BACKING HIS EFFORTS TO REOPEN THE STRAIT OF HORMUZ. JENS STOLTENBERG, WHO IS CURRENTLY SERVING AS NORWAY’S FINANCE MR., WAS SPEAKING EXCLUSIVELY TO BLOOMBERG AT THE BLOOMBERG NEWS MAKERS EVENT IN OSLO. JENS: NATO, AND THAT MEANS EUROPEAN NATO ALLIES AND EUROPE, IS MORE PREPARED THAN WE HAVE BEEN FOR DECADES. MEANING THAT IT DEPENDS A BIT WHAT YOU MEAN BY PREPARED. ONE THING IS TO BE MENTALLY PREPARED. I DON’T THINK THEY ARE MENTALLY PREPARED FOR WAR, MEANING THAT WAR IS SOMETHING WE CONTINUE TO REGARD AS UNTHINKABLE, THIS LARGE-SCALE WAR, AND THAT’S A BIT DANGEROUS BECAUSE WE HAVE SEEN THAT WAR IS POSSIBLE, ALSO AND OUR CLOSE NEIGHBORHOOD. IF YOU LOOK AT THE MILITARY CAPABILITIES, NATO ALLIES, EUROPEAN COUNTRIES, THEY HAVE MORE FORCES, HIGHER READINESS, MORE HIGHER CAPABILITIES, STRONGER DEFENSE INDUSTRY, NEW DEFENSE PLANS, MORE TROOPS DEPLOYED IN THE EASTERN PART OF THE ALLIANCE. I AM NOT SAYING THAT EVERYTHING IS IN PLACE. I AM NOT SAYING THAT WE DO NOT NEED TO DO MORE BUT I AM SAYING THAT COMPARED TO WHERE WE WERE, FOR INSTANCE BACK IN 2014 WHEN I ARRIVED AND NATO, WE ARE ON A TOTALLY DIFFERENT PLACE. BECAUSE GRADUALLY, EUROPEAN ALLIES REALIZED THAT WE CANNOT TAKE PEACE FOR GRANTED. AND THEREFORE, THEY STARTED SLOWLY TO INVEST MORE IN DEFENSE. AND YES, THERE IS STILL A LOT TO DO BUT TOTALLY DIFFERENT WORLD. I REMEMBER AT MY FIRST NATO SUMMIT AS SECRETARY GENERAL IN 2016, IT WAS EXTREMELY CONTROVERSIAL FOR NATO TO MAKE A DECISION TO DEPLOY COMBAT READY TROOPS TO THE EASTERN PART OF THE ALLIANCE. WE MAKE THAT DECISION IN WARSAW IN 2016. IN THE FOLLOWING YEARS, WE FOR THE FIRST TIME MATT HAD ACTUALLY COMBAT READY BATTALIONS IN THE BALTIC COUNTRIES IN POLAND, ROMANIA, SOMETHING WHICH WHAT’S ON THINK WILL BE FOR RUSSIA ANNEXED CRIMEA. ON THE MORNING OF THE FULL-SCALE INVASION, ON THE 24TH OF FEBRUARY, WE ACTIVATE AND NATO DEFENSE PLANS AND THEY ARE STILL ACTIVATED. AND THAT MEANS THAT SUPREME ALLIED COMMANDER HAS AMENDED TO MOVE MORE FORCES. WE GAVE HIM A MANDATE TO OPERATE AND HE USED THAT MANDATE TO FURTHER INCREASE OUR PRESENCE. IN THAT WAY, WE ARE MORE PREPARED THAN WE HAVE BEEN FOR MANY YEARS. LIZZY: THE FORMER NATO SECRETARY-GENERAL JENS STOLTENBERG SPEAKING. OTHER TOP STORIES WE ARE FOLLOWING AROUND THE WORLD THIS MORNING. CHINA’S FOREIGN MINISTER SAYS THE U.K. MUST SET OUT A PAD FOR MORE CHINA’S INVESTMENT AS RELATIONS BETWEEN THE TWO COUNTRIES NORMALIZE. HE WAS SPEAKING DURING A VISIT TO BEIJING BY THE BRITISH FOREIGN SECRETARY. SHE TOLD HIM THAT U.K. IS WILLING TO MANAGE DIFFERENCES WITH CHINA CONSTRUCTIVELY AND DEEPEN TRADE AND FINANCE CORPORATION. STAYING IN THE U.K., THE WOULD BE U.K. PREMIER, ANDY BURNHAM, CANCELED A CALL WITH HEDGE FUND MANAGERS THIS WEEK THAT WAS DUE TO DISCUSS FISCAL POLICY IN THE BOND MARKET. THE CALL WAS AGREED TO BEFORE AS PART OF HIS RISE GREATER MANCHESTER MAYOR. HIS SPOKESPERSON SAID IT WAS CANCELED SO HE COULD FOCUS ON HIS BID TO RETURN TO PARLIAMENT. LATER TODAY, THE FORMER HAVE SECRETARY AND POSSIBLE LATER LEADERSHIP CANDIDATE WES STREETING WILL BE SPEAKING WITH FRANCINE LACQUA ON STAGE AT SXSW LONDON. FOLLOW THAT CONVERSATION OUT BLOOMBERG.COM AND TERMINAL USERS CAN FIND OUT LIVE GO. THE PRESIDENT DONALD TRUMP HAS APPOINTED BILL PAUL TO THE HEAD OF THE FEDERAL HOUSING AGENCY AS ACTING DIRECTOR OF NATIONAL INTELLIGENCE. THE MOVE ELEVATES A LOYALIST WITH NO NATIONAL SECURED A TO U.S. SPY CHIEF. TRUMP POSTED ON SOCIAL MEDIA THAT HE WOULD REMAIN IN HIS FEDERAL HOUSING RULE AND AS CHAIRMAN OF THE GOVERNMENT ADMINISTERED MORTGAGE GIANTS FANNIE MAE AND FREDDIE MAC. A LOT ON HIS PLATE. COMING UP ON A DAYBREAK EUROPE, AS THE YEN TRADES A WHISKER AWAY FROM 160 PER DOLLAR, JAPAN’S FINANCE MINISTERS SENDS A MESSAGE MARKETS. WE WILL BRING YOU MORE ON THAT NEXT. WE WILL ALSO CHECK IN ON THESE BROADER MARKETS AS WE ARE SEEING EUROPEAN STOXX 50 FUTURES DOWN 0.2%. AS I FUTURES NOW FLAT TO THE UPSIDE. STAY WITH US — NASDAQ FUTURES NOW FLAT TO THE UPSIDE. STAY WITH US FOR MORE. THIS IS “BLOOMBERG DAYBREAK EUROPE” COMING TO YOU FROM LONDON. ♪ LIZZY: LIVE FROM LONDON, THIS IS BLOOMBERG DAYBREAK: EUROPE. PRESIDENT TRUMP ADDS A NEW BRAKES TO HIS TARIFF WAR, PROPOSING LEVIES OF AT LEAST 10% ON TRADING PARTNERS. THE AI RALLY ROLLS ON. GLOBAL STOCKS HIT ANOTHER ALL-TIME HIGH IN THE ASIAN SESSION LED BY GAINS BY CHIPMAKERS. BLOOMBERG LEARNS SPACEX COULD SET THE TERMS FOR HIS RECORD-BREAKING IPO AS SOON AS TODAY. REUTERS REPORTS IT IS LOOKING TO RAISE $75 BILLION. WELCOME TO THE SHOW. 6:30 A.M. IN LONDON. THIS IS THE PICTURE IN MARKETS. ASIAN STOCKS AT A FRESH RECORD AS TRADERS DOUBLED DOWN ON THE AI TRADE. WE DON’T EVEN HAVE KOREA TRADING TODAY, YET UP .7% ON THE MSCI ASIA PACIFIC INDEX. FUTURES LOWER ON BOTH SIDES OF THE ATLANTIC. WE DID FLICKR INTO THE GREEN FOR NASDAQ FUTURES BUT BACK IN THE RED NOW. BEAR IN MIND, THE S&P TOPPED 67 00 — 7600, MATCHING THE NINE-DAY STREAK IN MAY LAST YEAR WHICH MATCHES THE LONGEST WINNING STREAK SINCE 1995. THAT AGAIN COMES BACK IN PART TWO TECH. FLIP OVER TO THE CROSS ASSET PICTURE AND YOU CAN SEE THE CAUTION CREEPING IN BECAUSE OF THE GEOPOLITICS IN THIS SPACE. BRENT IS HIGHER AT 1.3% AT $97 A BARREL. BECAUSE THOSE WHO ARE MOST AFFECTED BY THIS ARE THOSE WHO IMPORT THE MOST ENERGY, YOU ARE SEEING THE SHOW UP IN THE YEN. FLIRTING WITH 160 PER DOLLAR, KEEPING TRADERS ON ALERT FOR ANOTHER YEN INTERVENTION. FINALLY, IN THE BOND SPACE, WE HAVE SEEN TREASURY YIELDS REBOUNDING YESTERDAY ON THE FIRST OF THE TRIO OF JOBS DATA REPORTS OUT OF THE U.S. THIS WEEK, STOKING BETS OF THE FED’S NEXT MOVE WILL BE A HIKE. WE PLAYED YOU SOME OF THAT HAWKISH FED SPEAK EARLIER IN THE PROGRAM. NOW UP TWO BASIS POINTS ON THE 10 YEAR. THAT IS WHAT’S HAPPENING ON MARKETS. LET’S FLIP OVER TO THE FRONT PAGES AND KICK OFF AT THE FINANCIAL TIMES. THEY LEAD WITH THE PEAS ASKING WHETHER THE MIDDLE EAST CRISIS CAN SAVE ANY — IN A YEAR IT HAS SEEN IT BEING HIT BY A DOWNTURN IN THE CHEMICALS SECTOR. THE COMPANY FOCUS. FLIPPING TO THE WALL STREET JOURNAL, THEY ARE LOOKING AT THE U.S. ADMINISTRATION IN WHAT IT DESCRIBES AS PRESIDENT TRUMP’S TAKEOVER OF THE REGULATORY MACHINE. AND COMING BACK TO EUROPE. LET’S GO TO ITALY. IRAN ALSO IN THE HEADLINE WHICH TRANSLATES AS A NIGHT OF RATES IN THE GULF. YOU CAN GET A ROUNDUP OF ALL THE STORIES YOU NEED TO KNOW TO GET YOUR DAY GOING IN TODAY’S EDITION OF THE DAYBREAK NEWSLETTER WHICH YOU CAN FIND BY GOING TO DAYB . INDITEX BREAKING NUMBERS. FIRST-QUARTER EARNINGS DROPPING ACROSS THE TERMINAL. WE ARE LOOKING AT FIRST QUARTER EBIT AT 1.6 — 1.7 6 BILLION EUROS, EVER SLIGHTLY BEATING ESTIMATES. WE ARE LOOKING AT NET INCOME OF 1.38 BILLION EUROS. THE ESTIMATE WAS 1.4 BILLION EUROS SO I SLIGHT MISS WHEN IT COMES TO NET INCOME. THE EXPECTATION WAS THE OUTLOOK WOULD BE BROADLY POSITIVE, ALTHOUGH THE COMPANY NEEDS TO FIND STRONGER SALES GROWTH TO JUSTIFY ALL THE INVESTMENT AND HAS MADE INTO LOGISTICS INFRASTRUCTURE THE PAST FEW YEARS. FOR CONTEXT, THINK ABOUT PEERS, THEY HAVE BEEN WARNING THAT HIGHER FREIGHT AND ENERGY COSTS COULD PUSH UP CLOTHING PRICES. SO, LOOKING AT THESE INITIAL NUMBERS OUT OF INDITEX BUT FIRST QUARTER EBIT MARGIN MISSING ESTIMATES. WE WILL WAIT FOR MORE COMMENTARY WHEN IT LOOKS FOR THE OUTLOOK AHEAD. 2026, THE CURRENCY IMPACT ON SALES DOWN 1%. THOSE NUMBERS FROM INDITEX, THE LATEST WHEN IT COMES TO THE EARNINGS PICTURE. LET’S TURN BACK TO THE GEOPOLITICS. U.S. FORCES HAVE INTERCEPTED IRANIAN BALLISTIC MISSILES AND DRONES IN NEIGHBORING MIDDLE EAST COUNTRIES, AND STRUCK A COMMAND CENTER IN THE ISLAMIC REPUBLIC IN RESPONSE. IN TERMS OF THE MARKET’S REACTION, COPPER DOWN FROM A THREE WEEK HIGH AMID ALL THIS PESSIMISM OVER THE OUTLOOK FOR A DEAL TO END THE MIDDLE EAST WAR. GOLD EDGING LOWER. WE CAN GO TO DUBAI TO ART OR WEISE CORRESPONDENT — TO OUR MIDDLE EAST CORRESPONDENT. BRING US THE LATEST ON A POTENTIAL DEAL. ABEER: YES, ATTACKS AGAINST BAHRAIN AND KUWAIT THAT WERE SHOT DOWN BY THE UNITED STATES, WHICH RESPONDED BY ATTACKING MILITARY TARGETS IN IRAN. BUT, DESPITE THE FRAGILITY OF THE ALREADY EXISTING CEASEFIRE, WE ARE PREPARING OR EXPECTING THAT THIS CEASEFIRE TO BE EXTENDED FOR 60 DAYS. THAT IS THE FRAMEWORK THAT THE U.S. AND IRAN ARE WORKING ON. NOTHING HAS BEEN REACHED. THE DISCUSSIONS WERE GOING ON OVER THE PAST FEW DAYS. IRAN DID SAY IT SUSPENDED TALKS WITH THE U.S. OVER ISRAEL’S ATTACKS OVER LEBANON. TO WHICH WE REPORTED AS WELL THAT PRESIDENT TRUMP AND PRIME MINISTER BENJAMIN NETANYAHU HAD SPOKEN OVER THE PHONE WHERE PRESIDENT TRUMP DISSUADED BENJAMIN NETANYAHU FROM STRIKING BEIRUT. HE ACTUALLY SAID TROOPS HEADED THERE MADE THEIR WAY BACK AFTER THE PHONE CALL. NETANYAHU IN RESPONSE SAID HE WILL NOT ATTACK BEIRUT IT HAS EZBOLLAH STOPS ATTACKING ISRAEL. HE DID SAY THAT ATTACKS AGAINST LEBANON IN THE SOUTHERN PART OF THE COUNTRY WILL CONTINUE. WHAT WE ARE WORKING WITH IS STILL EXPECTATIONS OF THIS INTERIM DEAL WHICH WOULD REOPEN THE STRAIT OF HORMUZ, EXTEND THE CEASE-FIRE FOR 60 DAYS AND THEN DISCUSSIONS OVER OTHER STICKING POINTS, INCLUDING IRAN’ ENRICHMENT PROGRAM OR THE NUCLEAR PROGRAM AND ALSO ITS FROZEN ASSETS, THE OIL SANCTIONS. THOSE WERE COME AT US — THOSE WILL COME AT A LATER STAGE. LIZZY: WHAT ABOUT THE STRAIT OF HORMUZ? IT LOOKS LIKE PRESIDENT TRUMP COULD BE REVIVING FREEDOM IN ORDER TO GET SHIPS MOVING THROUGH THE STRAIT. WHAT IS THE LATEST THERE? ABEER: SO, THE MOVEMENT OF SHIPS THROUGH THE STRAIT OF HORMUZ IS STILL A FRACTION OF WHAT IT WAS BEFORE THE WAR ABOUT FOUR MONTHS AGO. WHAT PRESIDENT TRUMP IS CURRENTLY FOCUSED ON, AND THIS IS WHAT YOU ARE GETTING OUT OF U.S. OFFICIALS, IS NAILING DOWN THE DETAILS TO GET THIS INTERIM DEAL DOWN THE LINE. WHAT PRESIDENT TRUMP TOLD ABC NEWS YESTERDAY WAS THAT HE WANTS IRAN TO MAKE CONCESSIONS WRITTEN ABOUT ITS NUCLEAR PROGRAM. WHAT IRAN HAS SAID IN THE PAST, THAT HAS GIVEN VERBAL CONCESSIONS ABOUT THE NUCLEAR PROGRAM. WE KNOW HISTORICALLY OR EVEN DURING THESE NEGOTIATIONS, IRAN SAID IT WAS WILLING TO MOVE SOME ITS HIGHLY ENRICHED URANIUM TO A THIRD COUNTRY. TALKS ABOUT RUSSIA OR PAKISTAN HAD EMERGED. FOR NOW, WHAT THE DEAL WILL LOOK FOR IS AN IMMEDIATE REOPENING OF THE STRAIT OF HORMUZ TO GET THOSE TANKERS MOVING AGAIN, TO GET OIL PRICES TO SETTLE DOWN. YOU MENTIONED COPPER AND GOLD THAT ARE KIND OF MOVING IN TANDEM WITH WHAT WE ARE SEEING HAPPENING IN THE MIDDLE EAST BUT ALSO OTHER CRUDE PRODUCTS, JET FUEL, AND OTHER PRODUCTS THAT WE’VE TALKED ABOUT MULTIPLE TIMES OVER THE PAST FOUR MONTHS ARE MOVING TO EXPONENTIALLY HIGH PRICES. THE DEAL RIGHT NOW IS IN FOCUS TO GET THE REOPENING OF HORMUZ, TO GET ALL THE PRICES OF THESE PRODUCTS TO SETTLE DOWN AND THEN NEGOTIATE THE REST OF THOSE STICKING POINTS, INCLUDING LEBANON WHICH HAS EMERGED AS AN IMPORTANT STICKING POINT FOR IRAN OVER THE PAST COUPLE DAYS. LIZZY: THANK YOU VERY MUCH, BRINGING US THE LATEST FROM THE REGION. ABEER, WHO WILL BE BACK ANCHORING HORIZONS MIDDLE EAST & AFRICA TOMORROW. THINKING OF HOW THE LATEST OF THE GEOPOLITICS HAS MOVED OIL HIGHER AND THAT FEEDING INTO THE YEN MOVEMENTS WE ARE SEEING THIS MORNING, JAPAN’S FINANCE MINISTER REITERATED AUTHORITY SURVEYOR TO RESPOND TO MOVES AS NEEDED AT ANY TIME. THE COMMENTS CAME AS THE YEN TOWARDS LEVELS THAT LAST TRIGGERED INTERVENTION IN LATE APRIL. WE CAN GET ANALYSIS WITH PAUL JACKSON, BLOOMBERG JAPAN ECONOMY EDITOR. HOW LIKELY IS FURTHER INTERVENTION? GOOD MORNING. PAUL: WELL, THE POSSIBILITY OF FURTHER INTERVENTION IS DEFINITELY THERE. I THINK POLICYMAKERS WILL BE WAITING FOR A SPEECH FROM THE BANK OF JAPAN GOVERNOR. HE’S SPEAKING LATER TODAY. AND IF YOU CAN GIVE A HAWKISH SIGNAL, KIND OF REASSURE MARKETS THAT HE’S GOING TO GO AHEAD WITH A RATE HIKE LATER THIS MONTH, THAT WOULD HELP TO, FIRST OF ALL, GIVE SOME REASSURANCE THAT RATES WILL CONTINUE TO GO UP IN JAPAN. BUT I THINK IT ALSO HAS TO GIVE SOME MESSAGING THAT WON’T BE THE END OF IT EITHER. THAT WILL — THEY WILL KEEP GOING. ONE OF THE PROBLEMS HERE IS THAT MARKETS ARE KIND OF ALREADY PRICING IN OR EXPECTING THE BANK OF JAPAN TO RAISE INTEREST RATES . I THINK EVEN JUST THIS MORNING WE ARE SEEING A PROBABILITY OF 83% IN OVERNIGHT SWAPS. IN TERMS OF THE MESSAGING, IT DOES NOT REALLY NEED TO SAY — HE DOES NOT NEED TO SAY HE WILL RAISE RATES AS FAR AS SIGNALING TO THE MARKET. BUT FOR POLICYMAKERS WORRIED ABOUT THE YEN, WHICH IS NOT HIS PURVIEW, BUT THEY WOULD PROBABLY APPRECIATE IT IF HE DID GIVE A HAWKISH SIGNAL. OF COURSE, IF HE IS STILL CONSIDERING THE POSSIBILITY OF WERE NOT GOING THIS MONTH, THEN HE HAS TO PUT THE BRAKES ON EXPECTATIONS WITH THIS SPEECH TODAY. THAT COULD REALLY CAUSE A LOT OF TROUBLE FOR THE YEN. THAT IS NOT THE BASELINE SCENARIO, BUT WE WILL NEED TO SEE THAT. I THINK DURING THE MEANTIME, IF WE GET ENOUGH OF A HAWKISH MESSAGE TODAY, THE FINANCE MINISTRY WILL BE LOOKING TO HOLD ON UNTIL THAT MEETING AND DECISION ON JUNE 16 BEFORE TAKING ANY FURTHER ACTION IN THE MARKET. LIZZY: ALSO, IN RESPONSE TO THE LATEST IN THEW MIDDLE EAST, YOU’VE HAD JAPAN APPROVING THIS $19.4 EXTRA BUDGET TO CUSHION HOUSEHOLDS FROM ALL THE INFLATION TIED TO THE TURBULENCE GEOPOLITICALLY. WHAT DOES THAT MEAN FOR THE BOND MARKET? PAUL: WELL, THIS IS HIGHLY EMBARRASSING REALLY FOR THE GOVERNMENT, FOR PRIME MINISTER TAKAICHI WHO SAID WE WILL NOT CONTINUE ALL THIS EXTRA BUDGET STUFF LIKE PREVIOUS GOVERNMENTS. WHERE WE WILL HAVE A RESPONSIBLE FISCAL POLICY. YET, HERE SHE IS WITH AN EXTRA BUDGET, $19 BILLION ANNOUNCED SIX WEEKS, TWO MONTHS AFTER THE ANNUAL BUDGET COMES OUT. IT IS NOT A GOOD LOOK. YOU WOULD HAVE EXPECTED A BIT MORE NERVOUSNESS IN THE MARKETS WHEN THIS CAME OUT, BUT I THINK WE HAVE TO SAY THAT TAKAICHI HAS DONE A PRETTY GOOD JOB OF TURNING THE OPTICS AROUND IN THEIR FAVOR BY FRONTLOADING A LOT OF THE EXPLANATION OF THE CREATIVE ACCOUNTING THAT THEY’VE USED TO PAY FOR THIS EXTRA BUDGET. AND ESSENTIALLY WHAT THEY’VE DONE IS THEY HAVE STRUCK OFF SOME OF THE BOND ISSUANCE FROM LAST YEAR’S ANNUAL BUDGET DUE TO HIGHER TAX REVENUE WHICH ENABLED THEM NOT TO USE ALL THOSE BONDS. THEY HAVE KIND OF MOVE TO THOSE IN THE ACCOUNTS TO THIS EXTRA BUDGET. YOU HAVE KIND OF MOVED — IN ESSENCE, $19 BILLION OF ISSUANCE FROM LAST YEAR TO THIS YEAR. EVERYTHING EVENS OUT OVER TIME. BY EXPLAINING THAT TO MARKETS AHEAD OF TODAY’S ANNOUNCEMENT, I THINK THEY HAVE MANAGED TO EASE A LOT OF THE CONSENTS OF THE MARKET. THE FACT OF THE MATTER REMAINS, THERE’S A LOT OF FISCAL CONCERNS REMAINING OUT THERE TO DECIDE WITH WHAT TO DO WITH THE SALES TAX REDUCTION. THAT IS FOUR TO ¥5 TRILLION. THERE IS DEFENSE SPENDING COSTS WHICH WILL CERTAINLY HAVE TO GO UP. BORROWING COSTS ON THE NATIONAL DEBT WILL GO UP ESPECIALLY FOR THE BANK OF JAPAN. THIS IS BEFORE WE GET TO INVESTMENT PLANS OF TAKAICHI, PART OF HER GROWTH AGENDA FOR THE FUTURE. STILL PLENTY OF FISCAL CONCERNS FOR BOND MARKETS TO BE WORRIED ABOUT OVER THE COMING WEEKS. LIZZY: NOT OVER YET. PAUL JACKSON, THANK YOU VERY MUCH. AS WE LOOK AT YIELDS UP ACROSS MOST OF THE JAPANESE CURVE THIS MORNING. THE TENURE UP SIX BASIS POINTS. THE TWO-YEAR UP TO BASIS POINTS BUT STEADY ON THE 30 AND 40 YEAR. COMING UP ON DAYBREAK EUROPE, BUILDING THE FIRST GLOBAL BANK AND IN THE PROCESS TOWARDS $76 BILLION IN STOCK TO ITS FOUNDER. WE WILL BRING OF THE DEEP DIVE ON THE COMPANY NEXT. THIS IS BLOOMBERG. ♪ LIZZY: WELCOME BACK TO BLOOMBERG DAYBREAK EUROPE. REVOLUT TRYING TO PULL OFF AN IPO IN THE NEXT TWO YEARS SAID COULD LEND ITS FOUNDER UP IN $76 BILLION IN STOCK. BLOOMBERG’S AISHA JOINS ME FROM AMSTERDAM. HOW CLOSE IS HE TO BUILDING THE FIRST GLOBAL BANK? AISHA: GOOD MORNING. THAT’S RIGHT. THEY ALREADY HAVE 75 MILLION CUSTOMERS AROUND THE WORLD FROM THE U.K. TO MEXICO TO EUROPE WHERE I AM TODAY. HOWEVER HIS AMBITION IS TO GROW THE FIRM TO 100 MILLION CUSTOMERS. THE FIRM SAYS THEY ARE ON TRACK TO DO THAT BY THIS TIME NEXT YEAR. THEY WANT TO GROW INTO NEW MARKETS. THERE ARE MANY UNTAPPED MARKETS AROUND THE WORLD. THEY ARE LOOKING FOR 30 ADDITIONAL COUNTRIES BY 2030 AND THEY HAVE SET ASIDE AN ADDITIONAL $13 BILLION IN INVESTMENT. THIS WEEK THEY SAID THEY WOULD TOP UP THEIR FUNDS TO FRANCE BY 100 MILLION. THEY ARE HIRING CONSTANTLY. IT IS AN ABSOLUTE JUGGERNAUT AND WHAT IS CRITICAL IN TERMS OF GROWTH TODAY IS, AS THEY GO TO NEW MARKETS, THEY ARE TAKING THE ENTIRE PRODUCT AND LOOKING FOR LICENSES AS SOON AS THEY GET THERE. LIZZY: FOR 100 MILLION CUSTOMERS IN 100 COUNTRIES, IT HAS A LOFTY VALUATION TARGET. WHAT COULD CHALLENGE THAT? AISHA: GREAT QUESTION. IF IN THE U.K., WHERE I HAVE BEEN REPORTING ON REVOLUT FOR ALMOST FIVE YEARS, THEY HAVE BEEN WAITING FOR THEIR U.K. BANK LICENSE FOR MANY YEARS, WHICH DID THEY JUST SECURED EARLIER THIS YEAR. IT TOOK MANY YEARS. INDIA IS ANOTHER PLACE WHERE IT TOOK A WHILE FOR THEM TO START ON BOARDING CUSTOMERS. AS A FIRM OF THAT SIZE GOES TO NEW MARKETS THEY HAVE TO DEAL WITH DIFFERENT REGULATORS AND MORE RED TAPE. THAT IS ONE OF THE HURDLES IN TERMS OF ACHIEVING THAT AIM. IT IS ALSO RISK, COMPLIANCE, ONBOARDING BOARDING SO MANY MORE CUSTOMERS. IT JUST REQUIRES A LOT MORE CHECKS AND CONTROLS. THE OTHER ISSUE IS, THEY HAVE TO KEEP MAKING SURE THEY GROW AT THE SPEED AT WHICH THEY ARE GROWING AND INVESTORS ARE VERY BULLISH ON THEM. THEY SEE THEY HAVE A HUGE RUNWAY. IN EUROPE THEY ALREADY HAVE MILLIONS OF CUSTOMERS. THE QUESTION IS, CAN THE FIRM BECOME PEOPLES PRIMARY OR MAIN BANK? THAT IS AN AMBITION THEY ARE STILL LOOKING FOR. LIZZY: BLOOMBERG’S AISHA GANI OUT OF AMSTERDAM. OUT OF THE WORLD’S LARGEST FASHION RETAILER, THE OWNER OF ZARA THAT ESTIMATES FOR EBIT FIRST QUARTER AND SAYS ONLINE SALES GREW 11% IN MAY, POINTING TO A STRONGER SECOND QUARTER. IT LOOKS LIKE GROWTH PICKED UP AT THE START OF THE SECOND QUARTER. IT LOOKS LIKE THERE IS MORE CONFIDENCE IN ZARA OWNERS RESILIENCE IN THE FACE OF WEAKENING CONSUMER SPENDING. WHAT IS THE TAKE AWAY OF THESE NUMBERS FOR YOU? IT IS INTERESTING. ZARA IS ALWAYS INTERESTING. IT IS HARD TO ZOOM IN ON HOW THE WAR IN IRAN MAY HAVE IMPACTED THEM. THEY MAY HAVE HAD TO REROUTE SUPPLY ROUTES. THE NUMBERS THEMSELVES TOTALLY QUITE POSITIVE STORY. WHAT REALLY STANDS OUT IS THE GROWTH MARGIN HERE. IT CLIMBED FROM 60.6 PERCENT TO 61.2%. THAT IS VERY HIGH. IT SHOWS THEY ARE DOING A GREAT TOUR VERY INTENSE JOB AT CONTROLLING COSTS WHILE REVENUES CONTINUE TO GROW. YES, CONFIDENCE THAT THEY CAN WEATHER WEAKENING DEMAND FROM CONSUMERS GLOBALLY, AND THEY KEEP GOING. LIZZY: WHAT — HOW DOES THAT COMPARE TO WHAT WE HAVE HEARD FROM THE LIKES OF NEXT AND H&M? THERE IS A LINE IN EARNINGS TODAY THAT COMES OUT ALMOST IN EVERY EARNINGS REPORT ON THE OUTLOOK THAT TALKS ABOUT HOW THE BUSINESS MODEL THAT RELIES HEAVILY ON PROXIMITY SOURCING GIVES THEM A UNIQUE PROPOSITION. THIS BASICALLY REFERS TO THEIR LOGISTICS FREIGHT STRUCTURES, AS YOU MENTIONED. BEFORE NEAR SHORING AND FOR ENSURING WERE CONCEPTS EVERYBODY KNEW ABOUT, THEY WERE FOCUSED ON A LOT OF PRODUCTION NEAR THEIR HUBS IN SPAIN. THE IMPACT OF THINGS LIKE HIGHER PRICES WAS ALWAYS EASIER FOR THEM TO CONTROL THEM THEIR BIGGER RIVALS LIKE H&M. THEY NEVER HAVE THAT SAME SORT OF PAIN FROM BIG ENERGY PRICE SPIKES OR DISRUPTIONS. THEY DO SUFFER FROM THESE, BUT NOT IN THE SAME WAY OTHERS DO. ROUGHLY 50% OF THEIR PRODUCTION IS MADE IN SPAIN, PORTUGAL, MOROCCO, OR NEARBY COUNTRIES LIKE TURKEY. THAT IS THE EDGE THEY HAVE HAD HISTORICALLY AND THEY KEEP DOUBLING DOWN ON THAT. LIZZY: BLOOMBERG SUSTAINING BUREAU CHIEF. MORE COMING UP ON DAYBREAK EUROPE. WE SENT YOU UP WITH TERMINAL CHARTS TO FRAME YOUR DAY AHEAD. STAY WITH US. THIS IS BLOOMBERG. WE ARE DEFINITELY IN A MOMENT WHEN THAT IS ONE OF THE REASONS WHY PEOPLE THAT NEED THIS CABIN OR COMING TO THE MARKETS. CAPITAL IS AVAILABLE. IF YOU ARE ADVISING COMPANIES THAT NEED CAPITAL, WHEN CAPITAL IS AVAILABLE, IF YOU ARE CAPITAL CONSUMPTIVE AND IT IS AVAILABLE, TAKE THE CAPITAL. LIZZY: GOLDMAN SACHS CEO DAVID SOLOMON ON THE MOOD IN MARKETS. IS THAT A MOOD JUSTIFIED? LET’S LOOK AT THE FIRST OF THREE INSTALLMENTS OF JOB STATED THIS WEEK. JOLTS IN YESTERDAY. JOB OPENINGS AT THE HIGHEST LEVEL IN NEARLY TWO YEARS. LAYOFFS IN THE BLUE FALLING AND THE QIC’S FALLING AS WELL BELOW EXPECTATIONS, THE YELLOW. ALL THREE LINES POINT INTO RESILIENCE IN THE LABOR MARKET ADDING TO BENTZ THE FED WILL HIKE RATES. FLIP THE BOARD OVER. ARA IS POWERING THE AMERIAN — AMERICAN ECONOMIC ENTHUSIASM. FLIP THE BOARD ONE MORE TIME. ALL OF THE RISK APPETITE ON THE AI TRADE. CRYPTO DOES NOT SEEM TO BE ABLE TO CATCH A BREAK, BREAKING THE 70 K LEVEL. WILL WE SEE TRADERS COMING IN AND STOPPING IT FROM GETTING TO 60 KIND? — 60K? AND I, GUY, AND TOM WANT TO GET THE MARKET OPEN. THIS IS BLOOMBERG.