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tv   Bloomberg Daybreak Europe  Bloomberg  June 22, 2022 1:00am-2:00am EDT

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dani: this is "bloomberg daybreak: europe." i am dani burger in london alongside manus cranny on the road at the qatar economic forum in doha. manus: richmond fed president thomas barkan says rates should be raised as fast as possible. jay powell prepares to testify in senate. stocks turned red on the session. oil follows equities. crude drops with economic concerns and focused. president biden gears up for a slowdown. showdown talks with industry leaders. plus, inflation squeeze. u.k. cpi seen rising to a 40 year height. the boe'chief economist says he's ready price pressures --
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says he's ready to sacrifice growth to contain price pressures. we will have podium sessions from boeing. we will catch up with the accor ceo. revenge tour, revenge tourism, what's happening now. he is going to join us to talk through everything about the property market and the metaverse later on here today. a packed session. dani: sounds like things are going to get existential. i am grounded in the real world, at least for this morning, sometimes not. some breaking lines come through from the iea, this is their report in terms of infrastructure spending when it comes to oil, saying that they see global energy investments set to rise by 8% this year. it's all about inflation. they are saying that almost half of that overall increase in spent is from higher cost, labor, services, materials,
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that's eating into what's accounting for the spending in the energy sector. manus: another headline coming through on the income for the whole sector. it's going to be for trillion dollars in -- it's going to be $ 4 trillion in 2022. if you think about those windfall taxes delivered in the u.k.. we had some commentary about windfall taxes, which were very definite, not welcome. that's twice the five-year average, $4 trillion in 2022. dani: people in the energy department talking to oil executives. they are also talking about clean energy. let me take us quickly through what equities look like this morning, because it is shaping up to be an ugly morning. i know you will have oil a bit on your board as well. we are looking at stocks unable to sustain the gains that we had
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seen yesterday. perhaps this lends itself to goldman talking about how hedge funds short the market the most since that shorted the market the most -- short the market the most since -- shorted the market the most since 2008 last week. hs tech down almost 1% and the msci asia-pacific index. manus: stocks down, yields down as well. barkan has a clear message for the fed and bond watchers. is not a -- he's not a voting member. normalize as fast as possible but do not break anything. seeing yields move lower this morning, just off the top of the peak. let's just see, because you have a number of these. bmo saying they are skeptical that the 0.75% is going to enter. bitcoin down by -- endure.
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bitcoin down. dollar-yen, 24 year low. we are just off that. nouriel roubini says 140 is going to trigger a removal of yield curve control. that could deliver financial assets into the world. oil down. this is a clear indication the market is off more premium at $30, and they are now much more focused on, what is your downside risk for recession? everybody is standing by. paul wallace will help us in dubai with the latest on the will market, then we've got a preview on that u.k. inflation print. dani: then we will switch over to the fed news in hong kong to break down barkan's comments. meanwhile, juliette saly is always on hand to look at some of the biggest market moves in asia. juliette: -- manus: we've just ripped through
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the international energy report, the top line on the report. it really sort of talks about the profits, a whole host of issues going forward. let's get to the team around the world and kick it off. fed talk, first of all. let's get, let's get to the federal reserve. you know what? let's talk about oil first of all, because it is down 3.25%. paul is standing by. he's had a few conversations. give us the latest on this drop-down in the oil market and the capacity, the tightness of this market. paul: it is pretty dramatic, we are down about 3.5% today in wti, it is barely over $105 a barrel at the moment. this comes as just almost everyone in the oil market is talking about how tight supplies are. we had both the world's biggest independent crude trader and
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exxon mobil saying yesterday that supplies are going to be a problem, potentially for many years to come, at least that's what exxon said. if you look at that iea report, it's talking about spending barely going up, if at all, in real terms. you do have supply problems, yet, clearly what we are seeing today is that macroeconomic concerns are dominating the moves in crude markets. a lot of traders are just looking at what the fed is doing, they are looking at the potential for recessions in europe and the u.s. and they are getting worried. dani:, pau -- all right, paul, thank you very much. bank of england chief economist says policymakers sacrifice growth in order to bring down inflation in the u.k. he said the boe was ready to act more aggressively. >> you should be confident that we would do what we need to do
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to get inflation back to target. at least in my view, that will require further tightening of monetary policy overcoming let's. dani: let's get straight to bloomberg economic's chief european economist, jimmy rush. will these numbers give us more of a hint as to where and when inflation will peak? jamie: we are expecting to come -- inflation to come in at 9.1% in may, which is not much different from the a core number -- accor number of 9%. that's what they will be looking for in the detail of the numbers. when it comes to the peak, that's going to come in october. we know that because that's when regulatory prices go up. we are expecting costs to lift inflation to 10.5%. the peak is not going to change.
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that's definitely coming in october. manus: thank you very much. let's see what that print is a little bit later on. our economics corresponded, jimmy rush, there. jerome powell is due to face lawmakers a little bit later today and he is likely to be asked, what is the central bank's more aggressive monetary policy, what does it mean for jobs? thomas barkan said the fed should raise rates as fast as it can without causing undue harm to markets and the economy. thomas: we are in a situation where inflation is high, its broad-based, persistent, and rates are still well below normal. i think the spirit is you want to get back to where you want to go as fast as you can without breaking anything. manus: there you go. there is a lot of people giving those instructions, do not break
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anything. what does that mean? dan: you know, i sort of see barkin as background noise ahead of the main event today. he is not part of the core triumvirate that you need to listen to most carefully. he is in front of lawmakers. inflation is a big political issue. people will want to make hay out of that. my view is whether to see whether he is asked directly by a senator in a way he cannot dismiss, will you or are you prepared to induce a recession? not just these euphemisms like unemployment could rise a bit. are you prepared to induce a recession to get inflation back to target? let's see how direct he is in response to that question. dani: i wish we could just transport you there. dan: it has not been framed quite so starkly.
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dani: fair enough. dan: in much of the public discourse. dani: he definitely has avoided using that r word, using recession. manus: i would love dan to turn up in that shirt. dani: [laughter] dan: wednesday and friday are blocked tic days in singapore. dani: dan maas with the best shirt game in town. let's get over to juliette saly. i know you also have some fx on the mind this morning. juliette: i do. i did not know it was that day in singapore. we are seeing asian stocks down by about 0.8%. that relief rally certainly did not seem to last. we had that very long losing streak and then a bounce on the relief rally. it was probably more of a re-despite -- probably more of a respite than a rebound.
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we see the bond rather continue, particularly in australia -- bond rally continue, particularly in australia. of course, that shrinking yield gap really weighing into the asian currency market. you have the yuan at lows against the dollar. the peso at its lowest in 16 years. let's split the board. there has been some more i guess sort of calm and positive upbeat momentum in china with citi upgrading the ev stoxx, in particular. -- tv stock -- ev stocks, in particular. china certainly one market that we are continuing to see outperform some of the other areas in the asia-pacific. manus? manus: jules, thank you the
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roundup. just imagine, a couple of months ago we were talking about the invest ability thesis for china. breaking news from credit agricole, upping their game on net income to 6 billion euros by 2025. glasses off so we can read the text. return on equity, 12% by 2025, upping their game from 11%. it is still a payout ratio of 50% in 25. they maintain the payout ratio. the one question i asked everybody as i was walking around, what happens next at credit suisse? we can take that offline. it is day two right here at the qatar economic forum. we have heard from elon musk, and bob diamond, standard chartered, bill winters, they are jumped into the conversation. group one holdings, and boeing.
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dani: also coming up, how can investors position for stagflation? will it be stagflation that we need to position for? we are going to speak with chris brightman, ceo and cio at research affiliates. that's next. this is bloomberg. ♪
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♪ >> a recession is inevitable at some point. >> it's almost unavoidable. >> there's going to be a recession. >> seeing a cooling of the economy is something that we believe is appropriate. elon: as to whether there is a recession in the near-term, i think that is more likely than not. >> kind of a tough period here. >> are economists have increased their odds of a recession this year, but really more focused into next year. >> we can stabilize the energy
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market, i believe if the fed does their jobs, we will have inflation under control. >> inflation is not going to care itself -- cure. >> itself there>> will be more surprises. >> it is not transitory. the consequence will be a recession. manus: at the second annual qatar economic forum discussing the risk of the united states heading into that dreaded r word, recession. dani: yeah, it really is the topic now. are we headed towards a recession? if so? , what sort of a recession would it be and what implication would it have on this market? let me take it to the charts, and finally has been reprieve for the value folks out there that have gotten crushed over the last decade. so far this year, it is value's time to shine, outperforming growth. some of those red bars are indicating u.s. recession typically value will
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underperform given it's tied to the more cyclical parts of the market. what's going to happen this time around? joining us to help answer that is chris brightman, ceo and cio at research affiliates. thanks for joining. great to see you in the studio. i know you like value. what happens to value if we do indeed enter a recession? chris: i think it is important to understand the type of recession that we are about to enter,or maybe not. i think the fact of the matter is, we are already in stagflation. growth is slowing. the more real-time numbers you look at, the more obvious that the economy has been slowing. it is unarguable that we are in a high inflation environment. and the sword of -- the sort of slow down and economic turmoil that we experienced during periods of stagflation are very
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different than the sort of recession that we became used to during the three to four decade period of disinflation and low to negative interest rates that we've become accustomed to. this is a very different environment and a very different kind of recession. manus: let's just extrapolate that. good morning, it's manus. i am in doha. people are trying to work out the type of recession. i am drawn to jim reed at deutsche bank. he's talking about a growth recession. a growth recession is one where we don't technically fall into a recession, but there is a quasi-slow down. can you build on the narrative in terms of, how do i invest in a growth recession? chris: well, i am not sure exactly what he meant, but i can see that growth stocks are not going to be the safe haven that they had been.
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one has to understand that there are a lot of speculative assets that were pumped up by easy money, by negative real interest rates, by quantitative easing. obviously, we see where some of that was. warren buffett famously said that we do not find out who's been swimming naked until the tide goes out. those who have been skinny-dipping obviously include spac's, lossmaking ev companies, crypto, stablecoins, nft's, etc. that you really do want to stay away from companies that have been pumped up. it's not just there, but it's growth stocks throughout the world, but of course, concentrated in the u.s. so, i would generally avoid the u.s., although there is huge dispersion in pricing in the u.s. market, so it's not easy
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to just make simple geographic calls. we have oil majors in the u.s. trading at single-digit multiples of forward earnings as we are entering a stagflationary period. that's a great opportunity. dani: you are describing all these pockets of the market, it feels like a lot of the market that had these very inflated valuations. do you see or have we already faced a reckoning in this market for folks who chased those rallies? chris: well, yes, of course. there are a lot of the speculative parts of the u.s. market have corrected by 60%. that's quite a decline. dani: do they have further to go, though? chris: yes. what i see in the short run, if we are looking at trades instead of long-term investment strategy, what i see in the short run is a lot of volatility without much of trend until we get some clarity on whether this tightening cycle, and it's a global tightening cycle, of course, is going to successfully
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cure the disease that we are experiencing. if you go back a month or two ago, the fed was telling and guiding the markets of the market forward pricing in bonds in the u.s. was saying, well, the fed is going to take the fed funds rate up to 3% early 2023. by that time, that will fix inflation, no recession will be -- no recession, we will be back to business as usual. that was very sanguine. bond traders have been taught not to fight the fed. now, now we are just a month or two later and it is 4%, and it is 4%, is that going to be enough? the fed does not know. people will say, is the fed going to cause a recession. i think this is a great exaggeration of the degree of precision with which the fed can
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actually guide the economy. it is not really the fed that caused the inflation. the fed and world central banks cannot precisely fix it. they are going to be raising rates, we know that. rates are going to be going up at least through mid-2023. was going to happen after that? -- what's going to happen after the? manus: what does that create if you extrapolate that forward into the fx market? at a g10 meeting in 1971, where the treasury secretary said the dollar is our currency, but it is your problem. isn't that currently the situation at the moment? former treasury secretary mnuchin last night saying it is still the reserve currency, you are calling rate hikes through to 2023. what does that do to the dollar? chris: i think we are in an uptrend in the dollar. and that is going to force other central banks, and perhaps the
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last holdout is the bank of japan, to follow the u.s. with raising rates. the alternative is continued currency depreciation, which means whatever sort of inflationary environment is already occurring in global commodity markets is exacerbated by a country with a central bank that refuses to participate in rising interest rates. therefore, having their currency depreciate. i am speaking from london. the u.k. is a country with an even higher inflation rate than the u.s. why is that? it's quite obvious, because if you take the u.s. dollar price of globally traded goods and then add to it some currency depreciation on top of it, you get an even higher inflation rate. there is no escape for the bank of england. i guess they are committed to 25 basis point increases, so you are going to have many, many, many 25 basis point increase in the future.
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the dollar is a bit expensive on a ppp basis. manus: is that going to save the currency? we are going to have to actually just pasue there. go ahead. chris: i was just going to say that the ppp, purchasing power parity, is the standard metric for measuring valuation of currencies. of course, the u.s. dollar looks expensive. but we all know that valuation is not a good timing tool and equity markets or currencies or anything else, and so i think the dollar probably does get more expensive before we see this finish. manus: ok, let's see whether the smile is rich and whether it entered. research affiliates their -- chris brightman there over at research affiliates. thanks for joining us. dani: we have the world's bubble iest housing market flashing
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warning signs. we will have that story for you, next. this is bloomberg. ♪
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♪ dani: welcome back to "bloomberg daybreak: europe." i am dani burger in london with manus cranny in doha. a world economy already contending with raising inflation, stock market turmoil, and a grueling war, facing yet another threat. the global monetary squeeze or tightening is squeezing homebuyers. it's all about looking out for those inflationary signals and whether the has turned to recession. coming u as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network
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manus: it is "daybreak: europe." these are the stories setting your agenda. dani: pedal to the floor. richmond fed president thomas barkin says rates should be raised as fast as possible. that's as jay powell prepares to testify in the senate. stocks turn red on recession fears. oil follows equities. crude drops with economic concerns in focus. president biden gears up for a showdown talk with industry executives. plus, inflation squeeze. u.k. cpi seen rising to a 40 year high. that as the u.k. cpi seen rising -- that is the -- that as the boe's chief economist says he's ready to sacrifice growth to contain price pressures. ray dalio posting on linkedin, saying look, don't mean naïve. the squeeze will go from a cost-of-living squeeze to one where folks have lower
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purchasing power. let me quickly jump into the risk as a picture this might. equities filing -- this morning. equities filing -- equities falling. equities lower across-the-board. our last guest, chris brightman from research affiliates, says prepare for stagflation. for that reason, he does not really like the u.s. much as well. we are looking at we'll down more than 3% -- oil down more than 3%. is this some of the war premium being taken out, is this biden talks? we are looking at a stronger dollar this morning. we are seeing a flight to safety in that context. finally, bitcoin down 1.5%, but of course, not as weak as it has been. manus? manus: yeah, we just got to wait for the upside calls to come
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through on that bitcoin. mixed martial arts, the singapore-based one championship is at the forefront of trying to capitalize on that trend in the asian market. joining us is hua fung teh. he is the president of group one holdings. and not to outshine the guest, we've got haslinda with us as well. dani: singapore represent. manus: you are all singapore. the lion city. welcome to the show. hua fung: thanks for having me. manus: looking across your business, what comes into my mind as an independent observer, can you grow your business? you know, what is the global reach of your business? if i look at combat sports in asia, can it be monetized in the same way, in the same scale in the u.s. and in europe? hua fung: it certainly can. first of all, combat sports and
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martial arts really has been around for a long time. this is thousands of years of history in asia. every single asian country has a martial art. luckily for us, it is a sport and an art form really that has been exported successfully for many years. you walk around any city in europe, the u.s., middle east or africa, you will find a martial arts school or a martial arts gym. this is a big sport but the commercialization of it in asia lags the commercialization in the u.s. what we see is a ton of audience, not just in asia, but the u.s. as well. we are monetizing, by the way, in asia. monetization levers comprise both traditional monetary streams like sponsorships. but because we were born in the digital age in 2011, we are
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able to have digital revenues. >> you want to be big in markets like the u.s. as well as canada. you signed that multi-year deal with amazon. i mean, where will that take you? what kind of numbers are you looking at? hua fung: amazon is today, for all intents and purposes, one of the largest sports broadcasters and digital platforms in the world. the nfl had their u.s. rights with amazon as well, at least on the digital side. we are very honored to be partners with amazon in the u.s. this is a multi-year deal from of america -- deal for north america. >> what are you expecting from this deal? hua fung: today, we are already number two in the world per nielsen for digital viewership, number two after the nba. we are top five as well for cumulative reach in 2021. we are already doing collect an axis of 13 billion organic video
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views. manus: in terms of monetizing that, and i think this part of it, it's a difference between the pay-per-view model, those special, unique moments, you've got physical events as well. pay-per-view, just put it in context for us, what portion of the business revenue is going to be that versus general streaming? hua fung: i would say today, pay-per-view is a very small part of our business. traditionally, we rely on general meteorites and sponsorship revenue. manus: what kind of margins are you on in the business? hua fung: pay-per-view in general, right, is a high-margin business. you're taking an existing event, you can add a couple of fights to it and make those fights pay-per-view. over time, especially as we get into the u.s. and north america, where pay-per-view, you know, is part of the viewing habits, this will become a bigger part of our
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business and add margin to our business. >> you raised $150 million, valuing the company at $1 billion. of course, you know, the target is to be over $1 billion. but the whole idea was to have a valuation of $100 billion. how will you get there? when will you get there? hua fung: i would be lying if i said there was a specific date that i could commit to. look, the most valuable sports property in the world is the nfl. their valuation is in excess of $100 billion. that's a single country sport, single country of over 300 people. asia has -- 300 million people. asia has over 4 billion people. ultimately, a valuation is a valuation. it's a proxy for the impact we want the platform to make. the mission of the company is to unleash real-life superheroes. it is not to be the richest company, the most valuable
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company. we want to, you know, make impact in a big way. that valuation is really a proxy for how we think about the impact. >> we are and qatar, and qia is one of your investors. hua fung: they are. martial arts travels very well in the middle east is no different. with qia's investment in december of last year, we are making very deliberate plans to expand in the middle east. we should be expecting very interesting announcements in the very immediate future. manus: what is it that the sovereign wealth fund wants? do they want you to be a walking global replica of ufc? hua fung: oh, no, no. we are hardly a replica of the ufc. we are based in asia, where martial arts is from. . its thousands of years of history -- it is thousands of years of history. very successful, not taking away anything.
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they've built a great business but we are just very different. we are from asia, we have multiple martial arts. they focus on mixed martial arts. we have submission grappling, kickboxing, muay thai. we do e-sports, general entertainment. this is groupon. group 1 has one championship. the group that reduce to the apprentice one championship on board. qia is a key investor. we want to give them good financial returns. i think both of us mutually hope to see one championship to more in the middle east, and obviously with their investment, qatar will be a starting point for us. manus: good to have you with us this morning. she gives me strength and hope every morning. hua fung: she gives all of us strength and hope. one of the faces of singapore. in southeast asia. manus: the lion city.
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thank you for being with us. haslinda is here on the ground throughout. they may have an announcement to make later in the day, maybe. dani? dani:. great interview love to see singapore represented in the house. still representing singapore, let's get over to juliette saly. juliette: bloomberg understands president biden will today call on congress to enact a gasoline tax holiday as he looks to cool soaring pump prices heading into summer. biden said earlier this week he was deciding whether a suspension of the tax. average u.s. pump prices are currently hovering around five dollars a gallon. the largest party in mario draghi's italian coalition has split after foreign minister luigi dimaio quit over the party's refusal to back military support for ukraine. he says he is leaving the five-star movement, which he
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used to lead, and will start a new parliamentary group. current five-star leader giuseppe conte opposes the government's policy of sending weapons to ukraine. shares in germany's by your tumbled after the u.s. a print project at a multibillion-dollar appeal from the company that it should be shielded from legal claims that it's round of weedkiller causes cancer. the justices left intact a $25 million awarded to a californian man who says decades of exposure to round up caused his lymphoma. the u.s. is banning the use of anti-personnel landmines by its military around the world. the white house says mines have a disproportionate impact on civilians, including children. the u.s. joins the vast majority of countries which have already limited their use. it says it will work to destroy its stockpile of about 3 million landmines. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: juliette saly in
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singapore, thank you so much. coming up on the program, the spotlight is on energy investment. we delve into the details of the international agency -- energy agency's world investment report and the state of the oil market, next. this is bloomberg. ♪
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♪ >> we are doing very, very well. i think we were within the first to decide, to commit to electric mobility. we are introducing new ev's. we have a four-inch, the widest range -- full-range, the widest range of ev's in the market. the iconic car behind me, which was very well received, so we
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are doing well. we are, in a few days, we are going to ground break for our second gigafactory producing batteries. though, actually, it is no headwind. >> ok, a tailwind then, conversely. are you saying you're able to find sufficient supplies of batteries? is that not a challenge? herbert: actually, we are according to plan. we always said by 2025, he would sell about 25% of our product electric. >> from commodities that you use in the cars to commodities that used to make the cars. there's a lot of focus on energy supply to germany and energy supply to many parts of europe. are you concerned about the possibility that gas could be cut off, either by europe or by russia? herbert: i think everyone is concerned now, because europe and the northern part of germany where we are living is especially prone to russian gas
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supplies, and it's not so easy to change fast. i think a lot of progress has been made to buy more liquid gas from the u.s., from other parts of the world. there's a lot in the ramp up, but it's going probably not fast enough if there were to be a major disruption. i think everybody is preparing well. everybody is looking for alternatives. here, we still have two caol fired -- coal-fired power plants. we are in the process to substitute with gas, but we have some flexibility in shifting. so yes, we are concerned, but also, we are preparing. >> the fallback plan involves more fossil fuels in the short-term? herbert: in the short-term, not in the long-term. in the end, renewables are becoming so competitive, so cheap. there's no way around renewables anymore. and they are just more competitive. manus: volkswagen ceo herbert
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diess speaking from the qatar economic forum to bloomberg's anna edwards on the shift to ev's and the impact of disruption from russian gas supplies. we have had the international energy report released a little bit earlier today talking about inflation and revenue. but it found that capital flows in the sector are set to rise by 8% this year. for more, that's get to our resident team leader for energy and commodities, paul wallace. he's right here in doha. the iea talks about the uplift and spending, but a lot of that has to do with inflation. i saw some of the. people that you are harried in the hallways yesterday on the supply side. i think that is only 4 words but i know the conversations you have had have been about the potential constriction in supply took him. how tight is this market? paul: it is very tight at the moment. that's what people were telling us yesterday, russell hardy to
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exxon mobil's ceo, darren woods. he says he sees the bond market stain type for another 3 to 5 years because of a lack of investment due to the coronavirus pandemic. energy companies are going to take a lot of time to catch up with the investment that they just didn't do in the last few years. so yes. and the iea report almost ties in with that. it talks about an increase in sort of capex of 8% this year. that's barely anything in real terms. essentially, oil companies are not spending that much more. dani: patience that perhaps in the last opec meeting that they would increase output. they did not live up to those expectations. what is the market expecting from them now to do between august and september in terms of raising supply? paul: well that is something
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that russell hardy said to us yesterday, was that $64,000 question. just what opec, and particularly saudi arabia, is going to do post august. we just don't know at the moment. obviously, joe biden is going to the kingdom next month. and if he gets his way and if he manages to strike some kind of deal with the saudis and improve relations between the u.s. and the kingdom, then i think there is definitely a chance saudi arabia will do something to or at least try and significantly increase output beyond august. we could see the same thing with the united arab emirates. manus: ironicallymanus:, that was one of the lines that came from the president. we caught up with him here yesterday in terms of that reset in world politics. one other thing which i think everybody is trying to grapple with is, what is the g7 oil cap? what does it look like, what does it feel like?
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janet yellen floating this. are you any clearer about what that might be? paul: we are not very clear yet on the technicalities of the mechanics, exactly how it would work. there's definitely some confusion in the market. there's also a bit of division in the market. we think some european countries coming out and saying they would not want this to happen. the bigger picture is that the u.s. is trying to figure out a way to keep russian oil flows flowing, so to keep the global oil market supplied, but at the same time, limit the amount of money russia is making off those. the u.s. thinks this might be a way to achieve both those things, keep the market well supplied, but very much ca how much moneyp russia is going to make off those sales. it's extremely difficult to do. i mean, the politics alone, you've got to coordinate with a whole host of countries to make it work. it is untested as well. no one knows if, you know, no
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one knows if this would actually be sort of physically possible. manus: i was obsessed with counterparty risk and the gap markets. i have moved on emotionally. what do you think people are most concerned about? you've got this monster deal for allergy here -- monster deal for lng here, that's five years out, not today's solution. a real crisis we have in supply. paul: as you said, the qatar lng deals are very significant. total, exxon investing $2 billion. as you said, it is five years off. this really underscores the problem. even if you decide to invest today in gas or oil, unless it's something like shale i the u.s.n, it's not going to come on stream for years. right now, there is no obvious
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solution. in the oil market, you are looking at the saudis and the emiratis. manus: they need a surety on policy, that is the blockage in the fracking market. thank you very much. let's see what today yields for you in the hallway. i am right behind you. that is paul wallace, our team leader on oil and energy. breaking news coming through on ecb speaking. dani: that's right. the bank of france speaking to french radio ring of, bringing us back to the do whatever it takes era of mario draghi, saying they will do what's needed to meet inflation go in 2022. on monday, he said euro area growth is resilient, recession is not expected, they should try to reach the neutral zone in an orderly manner. manus? manus: coming up in the show, it's all about inflation. it is due in 15 minutes. the cpi for the united kingdom.
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this is bloomberg. ♪
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♪ dani: welcome back to "bloomberg daybreak: europe." dani burger here in london with manus cranny in doha at the qatar economic forum. bank of england's chief economist say policymakers would sacrifice growth to bring down inflation in the region. he said the boe was ready to act more aggressively. let's bring back jamie rush. what are we expecting from cpi numbers today? just how bad could inflation continue to get? where does the peak look like it will be? jamie: we are expecting inflation at 9.1% for may,
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which is not much different. the next big jump will come in october, when regulatory prices are lifted again, as we are expecting it to be 10.5%. there is a general sense of alarm about inflation. we have been getting that from bank of england speakers recent. the labor market is tight. they have opened the doors of a 50 basis point hike in august and i am fairly sure they will do that. manus: the issue is this, is it inflation, is that their only concern? what about the currency? it is down 10% so far this year. are they bothered about currency or what is the other big issue? jamie: they really are. we've had catherine man, the chief economist of the bank of england both emphasize the role of the exchange rate as the fed is monster hiking. the pound is weakening off. they are both very concerned about that. manus: ok, we will leave it there. let's see what the print comes through, 1.2226 on cable.
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can rate hikes alone phase the old british pound? our jamie rush. that is it for me. . i will be here tomorrow but i will be in studio. we will kick off today's discussions with the accor ceo, the boeing ceo. i would love to be a fly on the wall for the private meeting with him and the qatar airways ceo. dani: fascinating how much the energy prices and this, you know, revenge tourism, has really impacted the sector. really great interviews to watch out for. that's it for us. "bloomberg markets: europe" is up next. this is bloomberg. ♪
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