Daybreak Weekend: Jobs Preview, Poland Election, Trump Tariffs

Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.640 --> 0:00:13.040 This is Bloomberg day Break Weekend, our global look at 0:00:13.039 --> 0:00:15.440 the top stories in the coming week from our Daybreak 0:00:15.440 --> 0:00:18.200 anchors all around the world. Straight Ahead on the program, 0:00:18.200 --> 0:00:20.480 a look ahead to the November jobs report here in 0:00:20.520 --> 0:00:23.960 the US how that may impact FED policy moving forward. 0:00:24.120 --> 0:00:26.800 Plus a look at where oil prices may be heading 0:00:27.000 --> 0:00:30.720 in an upcoming Trump administration. I'm Tom Busby in New York. 0:00:30.800 --> 0:00:33.120 I'm Caroline Hepge here in London, where we're shining a 0:00:33.159 --> 0:00:37.159 spotlight on Poland ahead of the country's presidential election in 0:00:37.200 --> 0:00:38.160 twenty twenty five. 0:00:38.560 --> 0:00:41.600 I'm Derek Prisner, looking at President elect Trump's announcement of 0:00:41.680 --> 0:00:43.360 new tariffs on Chinese goods. 0:00:43.920 --> 0:00:47.479 That's all It's truly had on Bloomberg Daybreak Weekend on 0:00:47.560 --> 0:00:52.040 Bloomberg eleven Trio, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:52.479 --> 0:00:57.360 Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius 0:00:57.520 --> 0:01:00.920 XM one twenty one, and around the world Bloomberg Radio, 0:01:00.960 --> 0:01:03.080 dot Com and the Bloomberg Business Act. 0:01:08.240 --> 0:01:10.400 The Day to You, I'm Tom Busby. We begin today's 0:01:10.400 --> 0:01:14.199 program with the November Jobs Report, Non farm payroll numbers 0:01:14.200 --> 0:01:17.759 out this coming Friday, eight thirty am Wall Street Time 0:01:18.280 --> 0:01:20.560 for more on what to expect and what that data 0:01:20.840 --> 0:01:23.720 could mean for the FED, we're joined by Michael McKee, 0:01:23.760 --> 0:01:28.720 Bloomberg International Economics and Policy correspondent. Well, Michael, let's begin 0:01:28.760 --> 0:01:32.840 with a look back back at October's dismal jobs report 0:01:33.280 --> 0:01:36.640 and the reasons behind that. Before we look at November. 0:01:37.640 --> 0:01:41.920 Well, twelve thousand jobs according to the Bureau of Labor 0:01:41.959 --> 0:01:45.800 Statistics during the month of November, and that was largely 0:01:46.040 --> 0:01:50.760 influenced by what we saw in terms of the potential 0:01:50.840 --> 0:01:55.560 port strike, the Boeing strike, and the hurricanes that hit 0:01:55.720 --> 0:01:59.640 during the month, and so largely dismissed by most people. 0:02:00.120 --> 0:02:02.840 What we'll have to see is whether we get the 0:02:02.960 --> 0:02:06.320 rebound that one might expect, and if so, how strong 0:02:06.360 --> 0:02:08.959 that is, because at the same time that we saw 0:02:09.000 --> 0:02:12.680 this extraordinarily low number, we've been in the middle of 0:02:12.720 --> 0:02:16.040 a decline in the number of jobs created each month, 0:02:16.080 --> 0:02:19.760 simply because the economy is sort of plateauing at this point. 0:02:19.800 --> 0:02:24.440 Strong growth, but most of the job gains have been made, 0:02:25.880 --> 0:02:26.240 but it. 0:02:26.240 --> 0:02:28.960 Is shaping up to be a very different number for 0:02:29.120 --> 0:02:31.520 job creation in November. I mean we have had some 0:02:31.600 --> 0:02:35.080 good news some mixed news. Jobless claims, initial claims low, 0:02:35.120 --> 0:02:38.520 but continuing claims a sign of long term unemployment. That's 0:02:38.520 --> 0:02:40.560 in a two year high, So a little troublesome there. 0:02:41.919 --> 0:02:45.080 Yeah, we'll have to watch that. It isn't clear why 0:02:45.120 --> 0:02:47.800 that is. It would suggest that people are having a 0:02:47.800 --> 0:02:50.480 harder time finding a job, but that may also be 0:02:50.680 --> 0:02:54.079 hurricane related. The people who initially filed claims have done so, 0:02:54.080 --> 0:02:56.160 so we don't see the initial claims keep going up. 0:02:56.480 --> 0:02:58.880 But the people who lost their jobs because their jobs 0:02:58.919 --> 0:03:02.680 sort of disappeared, they have had a hard time finding 0:03:02.800 --> 0:03:06.160 jobs because so many jobs disappeared in those hurricane areas. 0:03:06.360 --> 0:03:08.480 We're just going to have to wait and see. 0:03:09.400 --> 0:03:12.320 Now, the unemployment rate still just four point one percent. 0:03:12.919 --> 0:03:15.959 You know, you talked about strike settles and that's good news. 0:03:16.280 --> 0:03:19.240 But we've also had retailers gearing up for the big holidays, right. 0:03:19.520 --> 0:03:23.320 Travel still strong coming into Thanksgiving, consumer spending still up, 0:03:23.880 --> 0:03:27.240 So there is good news pointing to November's numbers. 0:03:27.760 --> 0:03:29.600 I was traveling at the beginning of the month and 0:03:29.639 --> 0:03:32.320 a lot of people were traveling the our beginning of 0:03:32.360 --> 0:03:35.080 the week last week and a lot of people traveling 0:03:35.560 --> 0:03:38.880 airports and everything kind of crowded, and that just suggests 0:03:38.920 --> 0:03:41.520 that people still have money and they're still willing to 0:03:41.600 --> 0:03:46.640 go out and spend it on things that are not necessities. 0:03:47.040 --> 0:03:49.760 And so if that's the case, we're likely to see 0:03:50.520 --> 0:03:55.720 continued strength in growth and that will continue to incent 0:03:55.920 --> 0:03:59.640 companies who need people to hire people. The hard part 0:03:59.760 --> 0:04:02.160 is when you get to a point in the economy now, 0:04:02.280 --> 0:04:05.440 is projecting what growth is going to be like and 0:04:05.760 --> 0:04:09.120 whether you're going to need more people. It seems fairly 0:04:09.160 --> 0:04:12.760 obvious that we're going to need more help part time 0:04:12.800 --> 0:04:15.960 help for the Christmas season, and we're going to probably 0:04:16.000 --> 0:04:20.120 need more help in the leisure and hospitality space. So 0:04:20.279 --> 0:04:22.799 at least those two areas are someplace we can look 0:04:22.880 --> 0:04:24.480 for some kind of gains. 0:04:25.520 --> 0:04:29.360 So the big questions and what right now is Bloomberg 0:04:29.480 --> 0:04:32.880 expecting to see in the November numbers and what'll it 0:04:32.920 --> 0:04:35.160 all mean when the Fed meets again for the last 0:04:35.160 --> 0:04:37.239 time this year December seventeenth and eighteenth. 0:04:37.880 --> 0:04:41.240 Well, the forecast is for around two hundred thousand, which 0:04:41.240 --> 0:04:43.599 would be a significant snap back and stronger than we 0:04:43.680 --> 0:04:47.279 had seen in previous months. The general feeling is that 0:04:47.320 --> 0:04:50.599 the risk is even to the upside on that. The 0:04:50.720 --> 0:04:56.400 question is does the data between now and Friday continue 0:04:56.400 --> 0:04:59.040 to support that. The ism numbers we're going to get, 0:04:59.120 --> 0:05:01.960 the jobless aims numbers, we're going to get it, and 0:05:02.000 --> 0:05:05.919 the ADP numbers, if those are also strong, we'll maybe 0:05:05.920 --> 0:05:10.720 see that even revised up. The biggest question is at 0:05:10.720 --> 0:05:14.359 this point what happens with unemployment. The forecast is for 0:05:14.440 --> 0:05:17.599 a four point two percent rate, up from four point one. 0:05:17.920 --> 0:05:20.760 The FED is watching that more closely because that isn't 0:05:20.839 --> 0:05:24.240 affected by the same things that the headline numbers are. 0:05:24.520 --> 0:05:28.560 The strikes and the hurricanes don't really impact that, and 0:05:28.640 --> 0:05:33.000 so if that goes up, then it pushes the FED 0:05:33.040 --> 0:05:36.120 to maybe stay on hold. Right now, the general feeling 0:05:36.279 --> 0:05:39.520 is that the FED knows what's happening with inflation, and 0:05:39.560 --> 0:05:42.159 they have a pretty good idea of what's happening with jobs, 0:05:42.160 --> 0:05:45.719 and if that's confirmed by the payrolls report on Friday, 0:05:45.760 --> 0:05:49.320 then they will probably go ahead and cut once more. 0:05:49.720 --> 0:05:52.280 And then, of course, with the new administration coming in, 0:05:52.360 --> 0:05:54.240 all bets are off for twenty twenty five. 0:05:54.600 --> 0:05:58.360 Yeah, I'll say well. Also, Powell has said in the 0:05:58.400 --> 0:06:02.120 last couple of weeks he's in no rush it's all 0:06:02.320 --> 0:06:05.039 as always data driven, but he's in no rush to 0:06:05.160 --> 0:06:08.320 cut again right away. So kind of playing it both 0:06:08.360 --> 0:06:10.880 ways or is it really just data dependent. 0:06:11.279 --> 0:06:13.719 It's data dependent, but he is playing it both ways. 0:06:13.800 --> 0:06:17.719 What he wants is the option to have the markets 0:06:18.080 --> 0:06:22.480 price in a given at the moment until the FED 0:06:22.520 --> 0:06:24.760 sees the data that they have to work with. If 0:06:25.160 --> 0:06:29.080 the markets were to price in a cut and believe 0:06:29.120 --> 0:06:31.280 that they are going to continue that and you get 0:06:31.320 --> 0:06:34.560 this whip saw this volatility in the markets that the 0:06:34.600 --> 0:06:38.000 Fed doesn't want to see. They would prefer that everybody 0:06:38.400 --> 0:06:41.359 stays sort of half and half until all the data 0:06:41.400 --> 0:06:43.839 are in, until they're ready to look at it and 0:06:43.880 --> 0:06:44.560 make a decision. 0:06:44.920 --> 0:06:47.479 Well, the November jobs report from the Bureau of Labor 0:06:47.520 --> 0:06:50.400 Statistics out this coming Friday, our thanks to Michael McKee, 0:06:50.440 --> 0:06:54.480 Bloomberg International Economics and Policy Correspondent. We move next to 0:06:54.520 --> 0:06:58.400 the energy market and what plans from the incoming Trump administration. 0:06:58.640 --> 0:07:02.080 Lower demand out of China and continued geopolitical tensions may 0:07:02.120 --> 0:07:04.640 need for oil prices in the New Yar term and 0:07:05.200 --> 0:07:07.440 in the year ahead. It's a lot to consider and 0:07:07.480 --> 0:07:11.120 for more. We're joined by Alex Longley Bloomberg Oil trading 0:07:11.200 --> 0:07:14.400 reporter Alex thank you for joining us. I want to 0:07:14.440 --> 0:07:18.080 start with you where oil prices are right now? 0:07:18.600 --> 0:07:21.160 Well, and it's a good question in the context of 0:07:21.240 --> 0:07:24.000 when people normally hear about oil prices right and the pandemic. 0:07:24.040 --> 0:07:26.280 In twenty twenty, the main thing you'd have heard, if 0:07:26.320 --> 0:07:27.800 you're not in a day to day follower of the 0:07:27.800 --> 0:07:30.320 oil market, is negative prices. Then in twenty twenty two, 0:07:30.600 --> 0:07:32.240 the next thing you hear is one hundred and forty 0:07:32.240 --> 0:07:34.040 dollars a barrel. You've gone from being paid to take 0:07:34.040 --> 0:07:35.880 oil to pay one hundred and forty dollars a barrel. 0:07:36.440 --> 0:07:38.840 The last few months have been a remarkably stable period. 0:07:38.840 --> 0:07:40.640 In fact, most of twenty twenty four has been a 0:07:40.640 --> 0:07:43.920 remarkably stable period for oil prices. We find ourselves now 0:07:44.800 --> 0:07:47.520 sort of somewhere in the kind of seventy to seventy 0:07:47.600 --> 0:07:49.679 five region, and that's where oil prices have been trading 0:07:49.720 --> 0:07:52.720 pretty much since the middle of October. And if you 0:07:52.800 --> 0:07:56.120 exclude the period where we sort of heightened volatility with 0:07:56.440 --> 0:07:59.520 Iran firing missiles it Israel. Actually oil has been trading 0:07:59.560 --> 0:08:02.240 kind of in there's seventy to seventy five or sixty 0:08:02.280 --> 0:08:05.120 five to seventy range, depending on what benchmark you look at. 0:08:06.080 --> 0:08:08.560 Since pretty much the end of September, that's a remarkably 0:08:08.600 --> 0:08:10.720 stable period for what is one of the most volatile 0:08:10.760 --> 0:08:12.120 commodity markets in the world. 0:08:12.640 --> 0:08:16.200 And here in the US we are certainly reaping the benefits. 0:08:16.200 --> 0:08:19.320 Gasoline averaging three zero five a gallon a year ago 0:08:19.320 --> 0:08:22.840 it was three twenty six a gallon. So this stability 0:08:23.000 --> 0:08:25.560 is exactly what everyone here was hoping to see. 0:08:26.120 --> 0:08:28.520 Yes, exactly. I think we've already heard that sort of 0:08:29.120 --> 0:08:32.200 Prior to the holiday period, the Department for Transportation was 0:08:32.240 --> 0:08:35.120 expecting a record travel season. I think one of the 0:08:35.120 --> 0:08:38.240 interesting things more broadly about demand is that in the 0:08:38.280 --> 0:08:41.160 oil market, it has generally surprised to the upside. People 0:08:41.240 --> 0:08:44.520 have been consuming more oil than generally was expected to 0:08:44.520 --> 0:08:45.040 be the case. 0:08:45.080 --> 0:08:45.320 Now. 0:08:45.480 --> 0:08:49.600 Obviously, so far this year, global economic slowdown has hindered 0:08:49.720 --> 0:08:52.240 demand growth to a degree. But the point is oil 0:08:52.280 --> 0:08:55.680 demand is still growing, and as much as we invest 0:08:55.679 --> 0:08:58.240 in the energy transition, the fact of the matter is 0:08:58.720 --> 0:09:01.040 in various parts of the oil market, demand is here 0:09:01.080 --> 0:09:03.839 to stay. Another thing that's hugely important when we look 0:09:03.840 --> 0:09:06.439 at the price of gasoline price at the pump, particularly 0:09:06.480 --> 0:09:09.520 in the US, but actually across the world is there's 0:09:09.520 --> 0:09:12.200 been a transformation in the number of plants that are 0:09:12.200 --> 0:09:16.000 converting crude into refined products, and that includes gasoline and diesel, 0:09:16.280 --> 0:09:19.640 the fuels that keep the world ticking along. And that 0:09:19.760 --> 0:09:22.360 twenty twenty two period I mentioned before, when prices were 0:09:22.400 --> 0:09:26.439 exceptionally high, the world didn't have enough oil refineries really 0:09:26.480 --> 0:09:28.480 to produce the fuel that needed and that's why you 0:09:28.480 --> 0:09:32.040 saw crazy high gasoline prices, crazy high diesel and heating 0:09:32.040 --> 0:09:34.480 oil prices. And what we've seen over the last twelve 0:09:34.559 --> 0:09:37.320 to eighteen months is a series of giant new plants 0:09:37.360 --> 0:09:39.400 come online in other parts of the world, and that 0:09:39.440 --> 0:09:42.680 means lower prices for everyone because there's more ability to 0:09:42.720 --> 0:09:44.600 produce gasoline in the global system. 0:09:45.000 --> 0:09:48.559 And we've also seen more countries come back online like Libya, 0:09:49.720 --> 0:09:52.520 you know, i Ran, I know has had you know, 0:09:52.720 --> 0:09:55.840 pretty much a back and forth there. But also you 0:09:55.880 --> 0:10:00.320 know with the Opek plus countries, you know they've increased production, 0:10:00.400 --> 0:10:03.120 they've rolled back production, so a lot of volatility there, 0:10:03.120 --> 0:10:05.440 but bottom line, there's no demand destruction. 0:10:05.600 --> 0:10:10.480 We are flush with oil, yes, exactly. And this comes 0:10:10.480 --> 0:10:14.240 against the backdrop of the OPEC plus countries already kind 0:10:14.240 --> 0:10:17.199 of having for several months delayed their production increases that 0:10:17.240 --> 0:10:19.280 they were planning because they want to bring barrels back 0:10:19.320 --> 0:10:22.079 to the market for precisely the reasons you say, lots 0:10:22.080 --> 0:10:24.760 of countries outside the grouping have been lifting their output. 0:10:24.800 --> 0:10:27.200 That includes the US, where production is that are close 0:10:27.240 --> 0:10:31.959 to a record, but also a handful of others Canada, Brazil, Guyana, 0:10:32.240 --> 0:10:34.120 and lots of these countries have been able to lift 0:10:34.160 --> 0:10:38.160 output because oil prices have been so relatively high for 0:10:38.240 --> 0:10:42.280 several years now that's incentivized higher volumes of production. You 0:10:42.400 --> 0:10:45.280 reference to Iran. That's another country where, particularly under the 0:10:45.280 --> 0:10:48.000 Biden administration, we've seen a perhaps looser approach to the 0:10:48.080 --> 0:10:51.000 enforcement of sanctions and that's meant more Iranian oil flowing 0:10:51.040 --> 0:10:53.480 to the markets. That's kept the markets well supplied. You 0:10:53.480 --> 0:10:56.400 could make a similar argument about Venezuela over recent years 0:10:56.400 --> 0:11:00.160 as well. That combination of what we would call non 0:11:00.240 --> 0:11:03.040 OPEC supplier supply from outside the groups that are the 0:11:03.080 --> 0:11:05.560 countries that are signed up to the output cuts is 0:11:05.600 --> 0:11:09.000 partly what has helped depress prices relatively in recent years. 0:11:09.120 --> 0:11:11.720 And then the final thing is within OPEC itself, yes, 0:11:12.160 --> 0:11:16.240 that producer group has been reducing output, but not everyone 0:11:16.320 --> 0:11:17.920 has been at the same pace. And there are a 0:11:18.000 --> 0:11:20.560 handful of cheetahs within that producer group which have been 0:11:21.320 --> 0:11:23.800 promising to return their cuts to where they should be. 0:11:24.080 --> 0:11:26.319 But that sort of holistic picture is why there's so 0:11:26.400 --> 0:11:28.120 much supply on global markets at the moment. 0:11:28.440 --> 0:11:32.000 And OPEK has another decision later in December right on 0:11:32.040 --> 0:11:34.680 whether to gradually increase output. 0:11:34.760 --> 0:11:38.320 Again, yes, exactly, we're expecting that decision. We'll see what 0:11:38.360 --> 0:11:42.240 comes of that. They have already begun, we've reported discussing 0:11:42.280 --> 0:11:46.839 another plan to extend to the delay to resuming output increases. 0:11:47.800 --> 0:11:49.760 I think what the market has been looking for in 0:11:49.800 --> 0:11:52.960 advance of that decision has been any suggestion that those 0:11:53.040 --> 0:11:55.959 curbs will be delayed for several months. And this comes 0:11:56.000 --> 0:11:58.520 back to a view from the International Energy Agency, which 0:11:58.600 --> 0:12:01.040 pretty much everyone in the market is talking about, which 0:12:01.040 --> 0:12:02.960 is that twenty twenty five is going to be a 0:12:02.960 --> 0:12:05.640 story of lots of oil on the market. And again 0:12:05.720 --> 0:12:08.360 that's not because demand growth is particularly slow, but it's 0:12:08.400 --> 0:12:11.240 because supply growth is so high. Again, we come back 0:12:11.280 --> 0:12:14.640 to Brazil, Guyana, the US, the IEA say lots of 0:12:14.640 --> 0:12:16.360 barrels are going to come onto the market, and that's 0:12:16.360 --> 0:12:18.959 giving Opek a slight headache. I think the real question 0:12:19.040 --> 0:12:21.760 for next year is how big that oversupply will be. 0:12:22.200 --> 0:12:24.400 Okay, well, a lot to look forward to, boy our 0:12:24.440 --> 0:12:28.240 thanks to Alex Longley, Bloomberg Oil Trading Reporter, and coming 0:12:28.280 --> 0:12:30.600 up on Bloomberg day Break weekend, we'll shine a spotlight 0:12:30.679 --> 0:12:34.280 on Poland ahead of that country's presidential election next year. 0:12:34.720 --> 0:12:49.079 I'm Tom Busby, and this is Bloomberg. This is Bloomberg 0:12:49.120 --> 0:12:51.280 day Break Weekend, our global look ahead at the top 0:12:51.320 --> 0:12:54.280 stories for investors in the coming week. I'm Tom Busby 0:12:54.320 --> 0:12:56.880 in New York. Up later in our program, we'll look 0:12:56.920 --> 0:12:59.640 at how Donald Trump is already making good on campaign 0:12:59.760 --> 0:13:03.439 val to slap punishing tariffs on goods coming into the US. 0:13:03.679 --> 0:13:07.520 But first a closer look at Poland. Its thriving IT 0:13:08.000 --> 0:13:11.120 sector has made it quote the new Silicon Valley of 0:13:11.160 --> 0:13:14.679 Eastern Europe, but it's grappling with questions about its political future. 0:13:15.000 --> 0:13:17.880 Its ruling party has chosen Warsaw's mayor to run for 0:13:17.960 --> 0:13:21.200 president the next year's election, an ally to Prime Minister 0:13:21.280 --> 0:13:24.360 Donald Tusk and his current legislative agenda, and it comes 0:13:24.400 --> 0:13:28.319 as Poland prepares to take over the EU's rotating presidency. 0:13:28.720 --> 0:13:31.360 So what lies ahead for more, Let's go to London 0:13:31.360 --> 0:13:35.360 and bring in Bloomberg Daybreak Europe anchor Caroline hepgar Tom. 0:13:35.480 --> 0:13:38.760 Prime Minister Donald Tusk has begun his government's bid to 0:13:38.800 --> 0:13:44.040 secure the Polish presidency in Ernest. Rafal Schaskowsky is a 0:13:44.080 --> 0:13:47.760 former member of the European Parliament and has been mayor 0:13:47.800 --> 0:13:51.600 of Warsaw since twenty eighteen. He's won the approval of 0:13:51.760 --> 0:13:56.240 seventy five percent of the centrist coalition the Civic Platform 0:13:56.559 --> 0:14:00.920 to become the party's presidential nominee, beating out opponent Foreign 0:14:00.960 --> 0:14:05.920 Minister Radasla Sikorski in the process. Now, winning the presidency 0:14:06.040 --> 0:14:11.439 with responsibility for foreign affairs is crucially important for Tusk's administration, 0:14:11.760 --> 0:14:14.560 which has vowed to restore the rule of law and 0:14:14.600 --> 0:14:20.440 bring Poland back towards the European mainstream. Incumbent President Andre 0:14:20.680 --> 0:14:24.160 Duda is an ally of the former nationalist Law and 0:14:24.360 --> 0:14:28.480 Justice administration and has clashed with Tusk in his first 0:14:28.520 --> 0:14:32.520 year in office. The Law and Justice Party have nominated 0:14:32.720 --> 0:14:37.360 Karl Novrodsky, the president of the Institute of National Remembrance, 0:14:37.640 --> 0:14:40.680 a head of the ballot, which is expected in May 0:14:40.840 --> 0:14:45.520 next year. Current President Duda's second and final term ends 0:14:45.600 --> 0:14:50.240 in August, but he has cultivated close ties with President 0:14:50.320 --> 0:14:54.000 eelect Donald Trump and visited him in New York in April. 0:14:54.440 --> 0:14:58.680 Trump's return to the White House raises many considerations for 0:14:58.760 --> 0:15:02.920 European leaders, particularly when it comes to ongoing support for 0:15:03.040 --> 0:15:06.320 Ukraine in the conflict, where the Russia, Poland and NATO 0:15:06.440 --> 0:15:10.760 member is a staunch back of neighboring Ukraine. So what 0:15:11.000 --> 0:15:14.520 lies ahead for Poland as the country seeks to determine 0:15:14.640 --> 0:15:18.880 its next political chapter, and will the country's decision bring 0:15:18.960 --> 0:15:23.000 it closer or further away from an alliance with Trump's 0:15:23.200 --> 0:15:27.480 United States is something I've been discussing with Bloomberg's Warsaw 0:15:27.520 --> 0:15:31.160 Bureau chief Pyotr Skolimowski Hi. 0:15:31.280 --> 0:15:33.880 Indeed, so the role of the president in Poland is 0:15:34.160 --> 0:15:38.520 very often or has been very often underestimated. It's generally 0:15:38.560 --> 0:15:41.520 believed it's just ceremonial. But as we've seen over the 0:15:41.560 --> 0:15:45.440 past few years, and especially since Donald Tusk and his 0:15:45.600 --> 0:15:50.360 party took over after winning the election last year, we've 0:15:50.400 --> 0:15:52.800 seen that the president plays a very important role. He 0:15:52.840 --> 0:16:00.120 can veto legislation, he can appoint judges. He also sits 0:16:00.160 --> 0:16:04.960 on or represents Poland at NATO meetings in relations with 0:16:05.160 --> 0:16:08.080 the UN, for example. So what we've seen over the 0:16:08.120 --> 0:16:12.720 past year is that whenever Donald Tusk tried to introduce 0:16:12.760 --> 0:16:16.080 his legislative agenda, which was basically to reverse some of 0:16:16.160 --> 0:16:20.920 the changes in the judiciary that previous government has has introduced, 0:16:21.680 --> 0:16:24.120 the current the current president, who is very close to 0:16:24.160 --> 0:16:29.680 the opposition, wielded his veto power and that was the 0:16:30.080 --> 0:16:35.240 issue where could not really introduce his legislative agenda. And 0:16:35.440 --> 0:16:38.880 obviously he's now trying to get someone in place who 0:16:38.920 --> 0:16:41.160 could help him win. 0:16:41.040 --> 0:16:45.600 That case, and that might be Warsaw's mayor, who himself 0:16:46.560 --> 0:16:51.320 was a European politician previously in the EU. How lightly 0:16:51.480 --> 0:16:55.840 is it that Raphael Chalskowski is going to win? Does 0:16:55.840 --> 0:17:00.640 the ruling party normally manage to retain the presidency? 0:17:01.120 --> 0:17:06.280 Normally they do. Obviously, it all depends when, when, when 0:17:06.320 --> 0:17:10.439 the when the the elections are scheduled. But in this 0:17:10.520 --> 0:17:16.840 case Rafl Saskowski is already an experienced campaigner. We have 0:17:16.880 --> 0:17:19.679 to remember that a few years ago he also he 0:17:19.680 --> 0:17:22.760 already ran for the president and he lost very marginally 0:17:22.800 --> 0:17:26.600 to the incumbent Andre Duda, the current president, who comes 0:17:26.600 --> 0:17:32.960 from the Nationalist launch Justice opposition. Shaskowski is very experienced. Obviously, 0:17:33.640 --> 0:17:36.040 some say he may not be as experienced as necessary 0:17:36.040 --> 0:17:40.840 when it comes to security policy, defense policy or international relations. 0:17:40.880 --> 0:17:42.520 We have to remember that he's a mayor of war 0:17:42.600 --> 0:17:45.800 So and he's been running the city for for a 0:17:45.880 --> 0:17:48.320 very long time now. But at the same time he's 0:17:48.400 --> 0:17:52.679 also a previous you minister into his government in the 0:17:52.680 --> 0:17:57.400 previous one. He also is used to be a lawmaker 0:17:57.400 --> 0:17:59.760 at the European Parliament, so he definitely has a lot 0:17:59.760 --> 0:18:03.240 of experience in this respect and the polls show that 0:18:03.280 --> 0:18:06.960 he is definitely in a popposition to to actually make 0:18:07.000 --> 0:18:07.879 it this time around. 0:18:09.080 --> 0:18:11.919 In terms of Donald Tusk and his policy agenda, he 0:18:11.960 --> 0:18:16.640 wants to bring Poland closer to the European mainstream. Obviously 0:18:16.680 --> 0:18:20.920 the Law and Justice opposition would disagree with that. What 0:18:21.000 --> 0:18:23.720 is what is the thrust of what Tusk wants to do? 0:18:25.359 --> 0:18:27.880 So over the last eight years, when when the Law 0:18:27.920 --> 0:18:31.760 and Justice was in power, Poland was in constant conflict 0:18:31.840 --> 0:18:34.760 with the EU. The main the main accusations they were 0:18:34.840 --> 0:18:37.920 leveled at Poland. That's time was that it's trying, it's 0:18:37.960 --> 0:18:42.240 it's it's started. We are seeing certain democratic backsliding, meaning 0:18:42.640 --> 0:18:45.320 there are changes in the judiciary that are being introduced 0:18:45.359 --> 0:18:48.960 by the by the previous ruling party that that sort 0:18:49.000 --> 0:18:53.560 of remove certain checks and balances on on how the 0:18:54.720 --> 0:18:58.080 nation is or how the administration is run. Now, Tusca's 0:18:58.119 --> 0:19:02.439 promised to to reverse those changes to make Poland again 0:19:02.840 --> 0:19:08.920 the place where rolla law is being respected, and obviously 0:19:08.960 --> 0:19:10.520 he needs the president to do that. I mean that 0:19:10.640 --> 0:19:13.560 the changes have have gone so far under the previous 0:19:13.560 --> 0:19:17.440 administration that he really needs the president to sign off 0:19:17.560 --> 0:19:20.320 on reversal of those changes. There are also issues that 0:19:20.359 --> 0:19:23.840 he has also promised. These are, for example, changes in 0:19:24.160 --> 0:19:27.960 Poland's very strict abortion laws. He also wants his government, 0:19:27.960 --> 0:19:31.360 his coalition that he runs, to make changes there and 0:19:31.440 --> 0:19:34.440 to loosen up those laws. And the current president, who 0:19:34.440 --> 0:19:36.720 is very conservative, is definitely against that. 0:19:37.680 --> 0:19:40.399 Yeah, and that caused a lot of protests at the 0:19:40.480 --> 0:19:46.840 time in Poland. In terms of Poland's economy, why I 0:19:46.920 --> 0:19:50.440 mentioned this is becoming an attractive destination for investors. Why 0:19:50.600 --> 0:19:52.800 is that and what's the economic backdrop to this? 0:19:54.040 --> 0:19:54.240 Yeah? 0:19:54.280 --> 0:19:56.639 So, so Polish economy has been growing very very fast, 0:19:57.480 --> 0:20:02.320 and apart from the the period of the pandemic which 0:20:02.400 --> 0:20:05.280 hit all the economies across the world, it's been expanding 0:20:05.400 --> 0:20:08.000 very very quickly. We're seeing a lot of investment coming 0:20:08.040 --> 0:20:11.200 in from from across the board, but it also has 0:20:11.040 --> 0:20:16.199 a very well established and home grown sec it sector 0:20:16.240 --> 0:20:19.879 here and it also attracted a lot of investment from 0:20:20.320 --> 0:20:24.600 abroad from big corporations, it corporations that set up their 0:20:24.840 --> 0:20:28.760 backroom operations. This has been a sector that's been growing 0:20:28.800 --> 0:20:31.119 here in Poland. Poland is also has been a very 0:20:31.119 --> 0:20:36.960 attractive destination when it comes to batteries. It also attracted 0:20:37.000 --> 0:20:40.080 investor investors from for example, South Korea from the US. 0:20:40.640 --> 0:20:44.520 It's also building a nuclear power plant quite or starting 0:20:44.560 --> 0:20:47.680 to build it. It has a lot of spending when 0:20:47.680 --> 0:20:50.640 it comes to defense that are being planned. It's now 0:20:50.720 --> 0:20:54.439 the biggest spender as part of as a share of 0:20:54.520 --> 0:20:59.600 GDP on defense, which is also again another place where 0:20:59.640 --> 0:21:02.960 the economy could grow and where a lot of the 0:21:03.040 --> 0:21:05.800 destment are coming in for example from South Korea from 0:21:05.800 --> 0:21:11.239 the US. So there's a lot of pentap demanders. The 0:21:11.280 --> 0:21:16.120 society is still catching up with with Western standards, so 0:21:17.040 --> 0:21:20.960 it's a very attractive investment, destination and and economy is 0:21:21.000 --> 0:21:22.000 growing very very fast. 0:21:22.800 --> 0:21:26.679 In terms of the EU rotating presidency, what might that 0:21:26.840 --> 0:21:30.080 mean for Poland? I mean, you know, it's only six months, 0:21:30.080 --> 0:21:33.840 but often the country that holds that does get some 0:21:34.040 --> 0:21:37.520 sway perhaps over the over the EU policy agenda. What 0:21:37.520 --> 0:21:39.280 do you think Poland might bring to that role. 0:21:40.320 --> 0:21:43.720 Yes, so indeed the country that holds rotating presidency sets 0:21:43.760 --> 0:21:46.200 the agenda or helps to set the agenda. 0:21:45.800 --> 0:21:46.280 For the EU. 0:21:46.560 --> 0:21:50.800 Obviously it's going to be an important element time. At 0:21:50.800 --> 0:21:52.840 this point, we have Hunger, which is which is the 0:21:53.160 --> 0:21:56.520 rotating president of the of the EU, and it hasn't 0:21:56.560 --> 0:21:59.360 gone very well to to to say the least. Now 0:21:59.400 --> 0:22:02.919 Poland wants to change that. It wants to sort of 0:22:03.080 --> 0:22:09.919 present that as an opportunity to showcase it's it's its strength. Obviously, 0:22:09.920 --> 0:22:12.840 it will be a time when President Trump is going 0:22:12.920 --> 0:22:15.399 to come in, so it will need to to build 0:22:15.440 --> 0:22:18.760 relations there. There are certain certain areas where Poland needs 0:22:18.760 --> 0:22:21.640 to wants to focus. He wants Poland wants more focused 0:22:21.640 --> 0:22:23.840 on defense and security, so it wants to make some 0:22:23.920 --> 0:22:28.640 headways in terms of where EU spends more on defense 0:22:28.640 --> 0:22:31.919 and tries to pull more of the resources to to 0:22:31.920 --> 0:22:35.639 to for investments there. It also wants to move ahead 0:22:35.680 --> 0:22:38.960 with with enlargement. So Poland has been a huge supporter 0:22:39.080 --> 0:22:41.639 of Ukraine. And we've already heard with from one of 0:22:41.640 --> 0:22:44.919 the ministers except one of the priorities for our presidency 0:22:44.960 --> 0:22:48.920 is actually to open negotiating chapters with those countries don't 0:22:48.920 --> 0:22:52.399 want to join in, which are Ukraine and Moldova. So 0:22:53.040 --> 0:22:56.600 quite a packed agenda, but you know, sort of hovering 0:22:56.600 --> 0:22:59.720 over all of this is a US presidency of Donald 0:22:59.760 --> 0:23:02.199 Trump and that will be probably a key focus. 0:23:02.640 --> 0:23:05.920 Yeah. Absolutely, And just in terms of thinking about the 0:23:06.880 --> 0:23:11.720 presidential candidate for election next year, there's still a process, 0:23:11.800 --> 0:23:16.280 isn't there. I mean, Donald Tusk and his Civic coalition 0:23:16.440 --> 0:23:19.400 have held their primary for their candidate, but then Law 0:23:19.440 --> 0:23:22.159 and Justice will have a candidate. To just what's the 0:23:22.200 --> 0:23:25.800 next process in terms of picking the presidential candidate and 0:23:25.840 --> 0:23:26.920 then the vote and so on. 0:23:28.359 --> 0:23:32.560 Indeed, so at this point it seems like we over 0:23:32.600 --> 0:23:36.159 the last weekend the campaign effectively started. So we know 0:23:36.400 --> 0:23:40.119 the Law the Civic Platforms candidate, and we know the 0:23:40.200 --> 0:23:45.439 laun Justice candidate. So the laund Justice picked a fairly 0:23:45.640 --> 0:23:51.359 unknown figure Carolin Navrewski, who's a historian and he was 0:23:51.400 --> 0:23:57.200 previously or he's currently the head of National Remembrance Institute. 0:23:57.840 --> 0:24:00.439 And the next steps at this point are obviously campaign 0:24:00.480 --> 0:24:03.200 will kick off. We're going to see a lot of campaigning, 0:24:03.320 --> 0:24:06.440 and it's quite a long campaign by published standards, because 0:24:06.440 --> 0:24:13.399 the elections are not expected until May. And obviously the 0:24:13.720 --> 0:24:16.520 key question is whether it's going to be resolved in 0:24:16.560 --> 0:24:19.760 the first round. For that, the main candidate will have 0:24:19.840 --> 0:24:24.320 to gather at least fifty percent of the vote probably unlikely, 0:24:25.119 --> 0:24:27.880 but then we're going to go into second round. At 0:24:27.880 --> 0:24:30.720 this point, these are the two main candidates on Narreotsky, 0:24:31.359 --> 0:24:35.720 the Lawn Justice candidate and Shoskovsky, but there's also sort 0:24:35.720 --> 0:24:39.720 of a dark horse of the whole campaign, the current 0:24:39.720 --> 0:24:44.840 Parliamentary speaker, who is also very keen together the vote. 0:24:44.920 --> 0:24:47.560 So it's going to get excited definitely. 0:24:47.520 --> 0:24:51.720 My thanks to Bloomberg's also bureau chief Pyoto Skolimowski. So 0:24:51.960 --> 0:24:55.080 where Next for Poland will be following that story as 0:24:55.119 --> 0:24:58.560 the country considers who to pick as its next president 0:24:58.640 --> 0:25:02.080 in twenty twenty five. I'm Caroline hepget here in London. 0:25:02.240 --> 0:25:05.000 You can catch us every weekday morning for Bloomberg Daybreak. 0:25:05.040 --> 0:25:08.200 Europe beginning at six am in London. That's one am 0:25:08.280 --> 0:25:09.080 on Wall Street. 0:25:09.160 --> 0:25:13.080 Tom, Thanks Caroline, and coming up on Bloomberg day Break weekend, 0:25:13.480 --> 0:25:16.160 we'll look at how campaign threats by Donald Trump over 0:25:16.320 --> 0:25:20.320 tariffs may soon become a reality. I'm Tom Busby, and 0:25:20.440 --> 0:25:34.840 this is Bloomberg. This is Bloomberg day Break Weekend, our 0:25:34.880 --> 0:25:37.280 global look ahead at the top stories for investors in 0:25:37.320 --> 0:25:40.160 the coming week. I'm Tom Busby in New York. Donald 0:25:40.200 --> 0:25:43.560 Trump's inauguration nearly two months away, but he's already making 0:25:43.600 --> 0:25:46.960 good on his vow of tariffs on goods being imported 0:25:47.000 --> 0:25:50.000 into the US. We turned out at Doug Prisner, host 0:25:50.000 --> 0:25:53.000 of the Daybreak Asia podcast, for more on what it 0:25:53.040 --> 0:25:55.680 could mean for big exporting economies. 0:25:56.200 --> 0:25:59.280 Tom. In the past week, President electromp announced a new 0:25:59.320 --> 0:26:03.640 additional tarraff of ten percent on Chinese goods, beyond what's 0:26:03.680 --> 0:26:06.240 already been put in place, and Trump went on to 0:26:06.240 --> 0:26:08.840 say that his administration would impose a new twenty five 0:26:08.880 --> 0:26:13.560 percent tariff on goods from Canada and Mexico. Now, many 0:26:13.640 --> 0:26:16.160 market watchers have been of the view that any proposed 0:26:16.200 --> 0:26:19.680 tariffs were simply a part of a negotiating strategy joining 0:26:19.720 --> 0:26:22.280 US now for a closer look as John Leu, Bloomberg 0:26:22.359 --> 0:26:25.680 News Executive Editor for Greater China, John joins us from 0:26:25.720 --> 0:26:28.840 our studios in Beijing. John, thank you so much. It's 0:26:28.880 --> 0:26:32.080 always a pleasure. I appreciate you taking time. The announcement 0:26:32.119 --> 0:26:35.399 of these tariffs came very soon after Trump selected Scott 0:26:35.440 --> 0:26:39.320 Bessant as US Treasury Secretary. Now Bessent, we know has 0:26:39.400 --> 0:26:43.879 called for a gradual approach when it comes to implementation 0:26:44.000 --> 0:26:46.480 of trade restrictions, and he also appears to be open 0:26:46.560 --> 0:26:50.160 to the process of negotiation. How are these new tariffs 0:26:50.200 --> 0:26:51.960 being read right now in Beijing. 0:26:52.840 --> 0:26:55.280 We don't have a clear sense at the moment, but 0:26:55.840 --> 0:26:59.480 all of the expectations that we've heard from analysis are 0:26:59.520 --> 0:27:04.120 the bees will be very careful and measured in how 0:27:04.160 --> 0:27:08.439 they respond to this tweet that we've gotten this post 0:27:08.480 --> 0:27:12.879 on truth social again. President Trump has yet to take office, 0:27:12.920 --> 0:27:15.840 and so he's not able to actually enact these tariffs, 0:27:15.840 --> 0:27:19.040 and so I think in the meantime, the Chinese government 0:27:19.080 --> 0:27:22.600 will be trying to communicate with his administration, with officials 0:27:22.640 --> 0:27:26.800 around him, trying to find what a negotiating room there 0:27:26.920 --> 0:27:30.600 may be, and looking not to overreact and make things worse. 0:27:30.840 --> 0:27:32.679 One of the things that was a part of that 0:27:32.840 --> 0:27:37.880 post Trump's concern about the transmission of illegal drugs out 0:27:37.880 --> 0:27:42.160 of China entering the US. He cited fentanyl in particular. 0:27:42.600 --> 0:27:45.080 So it looks as though we're in a realm now 0:27:45.119 --> 0:27:48.320 that's almost separate from economic issues, right. 0:27:48.920 --> 0:27:52.920 It's true. I think tariffs are a tool that President 0:27:53.000 --> 0:27:58.280 Trump will use to achieve various differing objectives. Fentanyl has 0:27:58.320 --> 0:28:03.600 been an issue that's he's been very focused on. He 0:28:03.800 --> 0:28:07.800 was in his first administration. This was an issue that 0:28:07.840 --> 0:28:11.760 he brought up with Hijing Ping Again, President Biden has 0:28:11.800 --> 0:28:14.679 brought this up with the Chinese government as well, and 0:28:14.760 --> 0:28:18.280 so it's not surprising that President and Trump would be 0:28:18.320 --> 0:28:20.800 harping on this now that he's getting ready to get 0:28:20.800 --> 0:28:21.520 back into office. 0:28:21.600 --> 0:28:24.040 So if we look at the idea of negotiation, as 0:28:24.080 --> 0:28:27.960 you understand what leverage does China have over the US 0:28:28.000 --> 0:28:29.320 at this point. 0:28:29.040 --> 0:28:33.040 Well, the trade relationship is one that gives the US 0:28:33.400 --> 0:28:37.800 the more powerful hand as it was because China is 0:28:38.320 --> 0:28:42.160 by far exporting much much more to the United States 0:28:42.160 --> 0:28:45.040 than it is importing from the US. Well, one thing 0:28:45.080 --> 0:28:49.640 that we've seen Beijing do is take measures that would 0:28:50.440 --> 0:28:53.760 it seems allow the government to put restrictions on the 0:28:53.800 --> 0:28:57.960 export of some strategic medals to the US, to Europe, 0:28:58.000 --> 0:29:00.719 to other countries, and so that potentially could be one 0:29:00.840 --> 0:29:04.360 lever that Beijing pulls to try to gain some leverage 0:29:04.360 --> 0:29:05.160 in that negotiation. 0:29:05.320 --> 0:29:07.480 Now, you and I in the past have talked about 0:29:08.160 --> 0:29:11.480 the vulnerability of the Chinese economy right now, given how 0:29:11.720 --> 0:29:14.560 weak it is, and you just mentioned that the US 0:29:14.640 --> 0:29:19.120 essentially has the upper hand. Should Beijing be particularly concerned 0:29:19.120 --> 0:29:21.720 given the set of given circumstances that we're talking about. 0:29:22.320 --> 0:29:26.720 I think Beijing is very concerned, given how much reliance 0:29:26.840 --> 0:29:29.640 the economy has on exports and how big of an 0:29:29.760 --> 0:29:32.880 end market the United States is. I think that Beijing 0:29:32.920 --> 0:29:35.440 actually probably has a little bit more time than it 0:29:35.520 --> 0:29:40.560 might first seem that's because before President Trump takes office, 0:29:41.040 --> 0:29:43.480 I think we're going to see a lot of frontloading 0:29:43.840 --> 0:29:48.200 of imports from buyers in the United States trying to 0:29:48.240 --> 0:29:51.240 get their goods out of China before those Trump tariffs 0:29:51.280 --> 0:29:53.760 come into effect. And so I think in the last 0:29:53.840 --> 0:29:55.960 couple of months of twenty twenty four you might see 0:29:55.960 --> 0:29:59.640 a real jump in Chinese exports, in turn a lot 0:29:59.640 --> 0:30:02.320 of for the economy. In the last quarter. 0:30:02.720 --> 0:30:05.480 Is there a way that companies based in China can 0:30:05.520 --> 0:30:09.120 create a bit of a work around maybe loopholes that 0:30:09.200 --> 0:30:12.480 some of these tariffs inadvertently create. Maybe you do a 0:30:12.520 --> 0:30:15.520 percentage of production on the mainland, but then transfer to 0:30:15.640 --> 0:30:19.560 a country to finish the production process that may not 0:30:19.680 --> 0:30:21.960 be in the crosshairs of some of these tariffs. 0:30:22.240 --> 0:30:24.920 So this is what makes the twenty five percent tariff 0:30:25.040 --> 0:30:29.120 that President Trump announced on Mexico very interesting, because we 0:30:29.160 --> 0:30:32.720 have seen quite a number of Chinese companies setting up 0:30:32.760 --> 0:30:37.680 operations in Mexico doing what you said, essentially doing some 0:30:38.080 --> 0:30:41.320 last bit of the manufacturing process in Mexico and then 0:30:41.600 --> 0:30:45.080 exporting that good into the United States, thereby avoiding the 0:30:45.120 --> 0:30:48.280 tariffs that are in place on Chinese products. We've seen 0:30:48.320 --> 0:30:50.520 factories set up in Southeast Asia and other countries to 0:30:50.520 --> 0:30:54.320 take advantage of the same loophole in the tariffs. And 0:30:54.360 --> 0:30:57.400 so it would not surprise me if we see President 0:30:57.440 --> 0:31:02.840 Trump going after these difer channels by which Chinese exports 0:31:02.840 --> 0:31:03.960 have been getting into the US. 0:31:04.120 --> 0:31:07.160 John, you and I have talked about the export controls 0:31:07.240 --> 0:31:10.720 imposed by the Bided administration on certain parts of the 0:31:10.800 --> 0:31:15.520 Chinese economy, especially where high technology was concerned. When you 0:31:15.560 --> 0:31:19.280 look at the choices that the incoming administration has export 0:31:19.320 --> 0:31:22.880 controls versus tariffs, let's say, how do they compare. 0:31:23.440 --> 0:31:26.880 I think tariffs are a very blunt instrument because they 0:31:27.560 --> 0:31:30.719 have the ability to impact lots and lots of different 0:31:30.720 --> 0:31:33.600 products all at once, especially in the way that President 0:31:33.600 --> 0:31:36.760 Trump has talked about imposing them sixty percent tariffs on 0:31:36.880 --> 0:31:40.880 all Chinese goods. That would hit everything all at once. 0:31:41.360 --> 0:31:45.400 I think the difference the question is how much priority 0:31:45.440 --> 0:31:51.600 does President Trump put on denying Chinese access to advanced technology. 0:31:52.160 --> 0:31:53.880 That is something that was front and center for the 0:31:53.880 --> 0:31:58.000 Biden administration. President Trump during the campaign at talked more 0:31:58.040 --> 0:32:03.160 about shrinking the trade deficit that he did talk about 0:32:03.560 --> 0:32:06.960 limiting Chinese access to chips, for example. So then when 0:32:06.960 --> 0:32:09.520 there is ultimately a negotiation, I think we will find 0:32:09.520 --> 0:32:13.360 out then how much value President Trump places on denying 0:32:13.480 --> 0:32:14.880 Chinese access to technology. 0:32:14.960 --> 0:32:18.400 So obviously this is Trump's second term. He has somewhat 0:32:18.400 --> 0:32:22.520 of a relationship already formed with Chinese President Chi Jinping. 0:32:22.920 --> 0:32:24.400 Is that a good thing or a bad thing? 0:32:24.800 --> 0:32:29.280 I think President Trump feels like those personal relationships are 0:32:29.440 --> 0:32:33.280 going to help him get a better deal, and the 0:32:33.320 --> 0:32:36.400 way that he speaks about President Xi Jinping in very 0:32:36.600 --> 0:32:40.400 respectful terms, talking about their friendship. It would seem that 0:32:40.760 --> 0:32:44.520 he wants to have a personal relationship that he can 0:32:44.560 --> 0:32:47.720 rely on to try and get a deal through. Whether 0:32:47.840 --> 0:32:51.960 or not that actually is fact in case on the ground, 0:32:52.240 --> 0:32:53.840 I think we have to wait and find out. 0:32:53.720 --> 0:32:56.280 And this is just the beginning of the process. John, 0:32:56.400 --> 0:32:59.120 thanks for joining us. John lou There, Bloomberg News Executive 0:32:59.240 --> 0:33:02.760 Editor for Greater China, joining us from our studios in Beijing. 0:33:03.320 --> 0:33:06.080 We moved next to crypto recently. As I'm sure you're 0:33:06.120 --> 0:33:09.560 well aware, Bitcoin reached all time highs as the market 0:33:09.600 --> 0:33:13.960 embraced the support for crypto from the incoming Trump administration. Now, 0:33:14.080 --> 0:33:17.720 the overall value of the digital asset market has surged 0:33:17.760 --> 0:33:22.240 by about a trillion dollars since the election on November fifth. 0:33:22.440 --> 0:33:24.880 A closer look now at the crypto landscape with our 0:33:24.920 --> 0:33:28.400 guest Peter Chung. He is head of research at Presto Research. 0:33:28.760 --> 0:33:31.440 He joins us from Hong Kong. Peter, thanks for making 0:33:31.480 --> 0:33:33.480 time to chat with us. Let me get your reaction 0:33:33.600 --> 0:33:36.680 to the fundamentals that have been driving the price action 0:33:37.160 --> 0:33:40.240 in a bitcoin lately. Give me your assessment on what's 0:33:40.320 --> 0:33:41.280 driving this rally? 0:33:41.680 --> 0:33:44.560 Yeah, I think this rally has been happening in two parts. 0:33:44.720 --> 0:33:48.360 First is you know, right after the election, when bitcoin 0:33:48.480 --> 0:33:52.880 was at around sixty seven sixty seven thousand dollars, it 0:33:52.960 --> 0:33:57.480 was in reaction to the election result, and it is 0:33:58.120 --> 0:34:03.000 part of a broad macro reflation trade, so that raised 0:34:03.000 --> 0:34:05.520 the big coeen price from sixty seven thousand to around 0:34:05.560 --> 0:34:09.600 ninety thousand. And the second part is also related to Trump, 0:34:09.640 --> 0:34:13.080 but more crypto specific. I think the market is becoming 0:34:13.120 --> 0:34:17.560 more confident on Trump delivering on his pre crypto campaign 0:34:17.680 --> 0:34:22.920 promises based on the chatters around the key cabinet nominations, 0:34:23.880 --> 0:34:26.120 so I think they gave the market a confidence that 0:34:26.200 --> 0:34:31.160 the Trump has every intention to deliver on his campaign promises. 0:34:31.280 --> 0:34:33.560 There seems to be two parts to that story. One 0:34:33.840 --> 0:34:37.600 the idea of friendlier regulation, and the other seems to 0:34:37.600 --> 0:34:40.360 be this pledge to set up a national bitcoin stockpile. 0:34:40.440 --> 0:34:42.640 Which do you think is having a greater influence. 0:34:43.040 --> 0:34:47.360 I think more lately it's the idea of bigcoin strategic 0:34:47.800 --> 0:34:52.840 reservoir stockpile. I think the recent cabinet nominations and especially 0:34:52.920 --> 0:34:55.640 the Scott Besson who just got nominated, I think he 0:34:55.719 --> 0:34:58.880 mentioned that everything is on the table with regard to 0:34:59.760 --> 0:35:03.520 big coin strategic reserve or stockpile. So the market is 0:35:03.800 --> 0:35:07.800 increasingly more confident that it could happen. I think the 0:35:07.840 --> 0:35:11.160 Polly market is assigning something like a sixty percent probability 0:35:11.160 --> 0:35:11.360 to that. 0:35:11.800 --> 0:35:12.000 Yeah. 0:35:12.040 --> 0:35:14.360 The other thing that we're hearing is that the transition 0:35:14.520 --> 0:35:18.200 team has been talking about the possibility of creating the 0:35:18.200 --> 0:35:23.239 first ever White House post dedicated to digital asset policy. 0:35:23.320 --> 0:35:25.680 It's kind of stunning. You were talking about everything that's 0:35:25.719 --> 0:35:28.279 happened since the election. I think that a lot of 0:35:28.320 --> 0:35:33.080 the US ETFs that invest directly in bitcoin have amassed 0:35:33.120 --> 0:35:36.440 about more than one hundred billion dollars in assets since 0:35:36.560 --> 0:35:39.080 launching back in January. Is this a trend that you 0:35:39.160 --> 0:35:40.399 expect to continue now? 0:35:40.719 --> 0:35:43.960 Yeah, I mean I think so. I think with the ETF, 0:35:44.280 --> 0:35:49.160 it basically has paved a way much easier access for 0:35:49.239 --> 0:35:53.560 the institutional investors to come in and make a long 0:35:53.640 --> 0:35:57.600 term investment. I mean, big COUNTF has been around for 0:35:58.719 --> 0:36:02.480 actually two years, but before it was a futures based ETF, 0:36:02.920 --> 0:36:05.840 which isn't really included for the long term investors. With 0:36:05.880 --> 0:36:09.120 the introduction of a spot ETF at the beginning of 0:36:09.160 --> 0:36:11.719 the year, which is far more efficient in terms of 0:36:11.760 --> 0:36:16.719 attracking the underlying asset. You know, that removes a lot 0:36:16.719 --> 0:36:19.040 of kind of entry barriers for many of the long 0:36:19.080 --> 0:36:22.680 term institutional investors. And now that you know the new 0:36:22.760 --> 0:36:27.280 president elect is giving far more credits to this asset 0:36:27.280 --> 0:36:30.799 class with his pro crypto policies, I think many of 0:36:30.800 --> 0:36:34.279 the long term institutional investors who were a bit heads 0:36:34.280 --> 0:36:37.520 stunted prior to this event, I think is more willing 0:36:37.560 --> 0:36:39.760 to take a look at this new emerging asset class. 0:36:39.800 --> 0:36:42.960 So pro crypto policies in the US, maybe we understand 0:36:42.960 --> 0:36:46.400 that to mean less regulation. Is that what is happening 0:36:46.440 --> 0:36:49.680 where you are in the Asia Pacific? I'm thinking, whether 0:36:49.680 --> 0:36:52.080 it's Hong Kong or Singapore, are you seeing a move 0:36:52.160 --> 0:36:54.799 to deregulate the crypto market A bit? 0:36:55.239 --> 0:36:58.040 Yeah, I'm a little heads stunted in using the word 0:36:58.239 --> 0:37:01.719 deregulation to describe what's happening right now. It's more I 0:37:01.719 --> 0:37:05.320 think the more accurate way of describing is a regulatory clarity, 0:37:06.280 --> 0:37:09.759 because I think previously what was happening was it was 0:37:09.840 --> 0:37:16.640 more policy driven approached by the SEC through enforcement actions, 0:37:16.680 --> 0:37:18.960 and some of them were you know, Ukraargia was not 0:37:19.120 --> 0:37:24.680 very lawful and also very vague guidance from the regulatory agency. 0:37:25.360 --> 0:37:27.960 Going forward, you know, I think there's going to be 0:37:28.000 --> 0:37:31.400 more clear rulemaking by these regulatory bodies in the US, 0:37:31.640 --> 0:37:33.200 and I think that's going to have an impact on 0:37:34.080 --> 0:37:36.480 the jurisdictions in Asia as well. I think many of 0:37:36.480 --> 0:37:39.040 the governments in Asia has been kind of looking at 0:37:39.080 --> 0:37:41.399 the US and using that as a benchmark for their 0:37:41.440 --> 0:37:45.560 own regulatory framework. And now that the US is more 0:37:45.719 --> 0:37:49.360 in a position where they are willing to provide further 0:37:49.480 --> 0:37:54.759 regulatory clarity through legislative process as well as, you know, 0:37:54.840 --> 0:37:57.279 by having SEC who's more willing to work with the 0:37:57.320 --> 0:38:00.480 crypto industry, I think that's going to have an impact 0:38:00.520 --> 0:38:02.600 on the many of the governments in this part of 0:38:02.640 --> 0:38:03.040 the world. 0:38:03.160 --> 0:38:06.120 That's Peter Chung, head of research at Presto Research, and 0:38:06.160 --> 0:38:08.480 I'm Doug Krisner. You can catch us weekdays here for 0:38:08.520 --> 0:38:13.200 the Daybreak Asia podcast. It's available on Apple, Spotify, or 0:38:13.239 --> 0:38:15.520 wherever you get your podcast. Tom. 0:38:16.040 --> 0:38:18.399 Thank you, Doug, and that does it for this edition 0:38:18.440 --> 0:38:21.160 of Bloomberg day Break Weekend. Join us again Monday morning 0:38:21.200 --> 0:38:23.440 at five am Wall Street Time for the latest on 0:38:23.560 --> 0:38:26.279 markets overseas and the news you need to start your day. 0:38:26.840 --> 0:38:30.000 I'm Tom Buzzby. Stay with us. Top stories and global 0:38:30.040 --> 0:38:33.160 business headlines are coming up right now