Good morning. This is Bloomberg Daybreak
Europe. I'm Tom McKenzie in London.
These are the stories that set your
agenda. Table for three. Donald Trump
pushes for a trilateral meeting with
Ukraine and Russia with the US and its
allies now promising future security
guarantees for Kev. European futures
tick higher with global stocks close to
record highs. Treasuries hold steady
after S&P confirms its long-term credit
rating for the US, citing higher tariff
revenues. And Intel soarses on news of a
$2 billion investment by Soft Bank.
Bloomberg learns the US government is
considering taking a 10% stake in the
chip maker. We bring you our scoop.
[Music]
Good morning. It is Tuesday, 19th of
August. Let's check in on these markets.
Their modest gains at the close of
European stocks yesterday up just a
tenth of a percent. US futures
essentially flat by the end of the
close. the focus of course on the
geopolitics and the meeting of course at
the white house and it seems that at
least on the surface there's been some
gradual progress on that front. European
futures then pointing high by 210 of a
percent. 5100 futures here in the UK
looking to add just 13 points. S&P
futures again after the flat close
yesterday a little softer down a tenth
of a percent. NASDAQ 100 futures
pointing lower by 37 points. The focus
though really for the markets beyond
geopolitics is all about that speech of
course on Friday. Fed chair J Pal at
Jackson Hole. Let's flip the board and
have a look cross asset. Then the
Treasury markets in focus. S&P
confirming their views in terms of the
creditworthiness of the US government
and pointing interestingly to that
increase in terms of revenues coming
through from tariffs. 433 right now.
You've seen three days of a little bit
of selling pressure coming through for
treasuries and markets and traders maybe
readjust their views in terms of what
power may say about September for the
Fed. Euro dollar at 116 largely
unchanged. Brent in focus of course and
that ties to what we've been hearing
from the presidents of Ukraine and the
US currently down 6/10en of a percent.
Gold up just five points close to 2/10en
of a percent high. UBS by the way
raising their forecast for the yellow
metal for 2026
on increased Fed cuts and weaker dollar.
Let's check in on the Asian markets
right now. How they are fairing with
Chinese stocks still close to those
decade highs. Minimum low standing by in
Hong Kong.
Hey Tom. Yes, across the region, we are
seeing this sea of red here and the
Asia-Pacific index just treading water
today and it looks like investors are
still a little bit on edge as we look
towards Jackson Hole. But we're keeping
an eye on Japanese bond yields because
today was a big day. They there there is
the auction for the one-year bond as
well as for the 20-year bond. And you
look at the bid to cover ratio, right?
Just not too long ago. The demand
looking pretty tepid below the 12 month
average. If we flip the board, you can
see this meltup across the Japanese bond
yields here. And it continues to be
those political uncertainty domestically
um and as well as that fiscal spending
surge that investors are concerned
about. So this continuing to be a drag
on the fixed income market. Of course,
we're also looking ahead to the CPI data
from Japan on Friday. But we flip the
board, take a look at what's happening
in China. And again, quite a different
picture here. A sea of green. And we
continue to see this slow burn right in
this surge in interest in the Chinese
market. If you flip the board, you can
see that the margin balances now is now
hovering close to the levels that we
have seen back in 2015. And a lot of
interest now coming through from the
institutional investors. That's why some
traders are saying that this boom is
different from the boom and bust cycle
that we have been seeing of late because
a lot of retail investors are still on
the sidelines. is a sort of slow burn
that the Chinese government has been
wanting to see. Hopefully that that will
create a sort of wealth creation effect
that could lead to a translation into
better consumer sentiment in the real
economy. So yes, we are still keeping an
eye on this Asia rally in China, Tom.
>> Okay, the Shanghai comp up 4/10en of a
percent so far in the session. To your
point, Minlo, thank you very much indeed
with a check on the Asian markets.
joining us out of Hong Kong. So,
President Trump says he has pitched a
one-on-one meeting between Russian
President Vladimir Putin and Ukraine's
leader Vladimir Zalinski. That would be
followed by a trilateral summit
involving all three of them. It comes
after his Monday meeting with Zalinski
and several European leaders at the
White House.
>> In a very significant step, President
Putin agreed that Russia would accept
security guarantees for Ukraine. And
this is one of the key points that we
need to consider and we're going to be
considering that at the table also like
who will do what essentially I'm
optimistic that collectively we can
reach an agreement that would deter any
future aggression against Ukraine and I
think that the European nations are
going to take a lot of the burden. We're
going to help them and we're going to
make it very secure.
Blueber's Oliver Crook joins me now from
Brussels. Been following all of this for
us. Remarkable scenes again from the
White House. We we see that on a fairly
regular basis, but nonetheless to see so
many European European leaders alongside
of course the president of Ukraine
sitting at that table with the US
president with President Trump flattery
it seems was one of the tactics. Maybe a
win for European leaders. Certainly a
focus on security guarantees.
>> Yeah, Tom, I think you're right to
highlight that. It's a very rare event
to see all of these leaders come and sit
in one place. Whether it's the East Room
of the White House as it was on this
occasion and this was not like an
organized G7 meeting. This is something
that happened impromptu. These are
people that lead countries across the
world. Dropped everything. Decided to
arrive on Monday to the White House to
have these discussions with President
Trump. And that is Tom, as you say, part
of the European attempt to validate
Trump's effort. They may not be 100%
pleased about how he's going about it,
but there is a consciousness within
Europe and within Ukraine as well since
the sort of catastrophic meeting back in
February that the Trump train in terms
of dealing with Russia and Ukraine is
leaving the station. And maybe even if
you're on that train, you're not exactly
sure about the path it's taking or its
final destination, the only thing worse
is not being part of that conversation
and not having any influence in that
conversation. That is clear to European
leaders, which is why they were there on
Monday, yesterday, speaking with Donald
Trump. Ahead of that meeting, as you saw
them around the table there, they took
questions or not questions from the
press. They made sort of statements
individually so to sort of outline what
their priority was very clearly. What
they wanted to do was make progress on
the thing. I think everybody has got
questions about what are these article 5
style security guarantees that the
United States is talking about. What is
everybody's role in it and what is the
US's commitment to that? I think they
will be reassured by the fact that
Donald Trump continuously throughout the
day reiterated that the United States is
committed in some form to these security
guarantees. Again, a lot we don't know
about them. We also had a number of the
leaders pushing again on this idea of
the ceasefire which Trump had sort of
abandoned over the last 48 hours. That
was namely Emanuel Mum and Frederick
Mertz who are pushing that but also this
idea um of this trilateral meeting going
forward that needs to take place between
Trump, Zilinsky and Putin. all said that
this is going to be an absolute um
priority. Um so I have to say that on
those three points, we don't have a
total clarity on what will happen next.
We do not have the sort of details on
the article 5 security guarantees. Does
this mean European troops within Ukraine
as defensive troops? Does it mean that
the United States would engage if Russia
were to impose on Ukrainian sovereignty
again in the future? Those are still
open questions. But again, there is a
clear impetus by the Trump
administration to make this move
quickly. I mean, maybe in the next
couple of weeks, could you see a
meeting? That is a sort of state of play
as we enter Tuesday.
>> Okay. So the details in terms of those
security guarantees still to be worked
out and we watch for any progress in the
coming days on the sequencing of the
next steps. Then Oie, you touched on
some of this, but how should we be
thinking about the prospects of a
meeting between Zalinski
and Putin and then the meeting that may
follow that? What is the sequencing?
What do we know? What is the likelihood
that these meetings will actually take
place?
So what I believe that the European
leaders would like to have seen is just
a trilateral meeting kind of right out
of the gate. That is something that they
all sort of emphasized in their
discussions in Washington DC yesterday.
However, we did hear from President
Donald Trump after the meeting and we
heard um from him on Truth Social saying
the following. He said, "At the
conclusion of the meetings, I called
President Putin and began the
arrangements for a meeting at a location
to be determined between President Putin
and President Zalinski. After that
meeting takes place, we will have a
trilateral meeting or trilat which would
be the two presidents plus myself. So
that is going to be as far as the most
concrete information we've got, what
will be coming next. We also heard um
from Zalinsky um yesterday talking about
the prospects of that trilateral
meeting, its importance in getting the
war concluded. Have a listen to what he
had to say.
>> We need to stop this war to stop Russia
and we need support American and
European partners. We will do our best
uh for this. So and I think we we show
that we are strong people and we
supported the idea of the United States
of personally of President Trump to stop
this war to make uh diplomatic way of
finishing this war and we are ready for
trilateral as president said this is a
good signal about tr I think this is
very good
>> and Tom just two two final points here
on the sort of sequencing and the next
steps the obvious sort of uh impetus
from the European leaders is to give a
full faith effort that Trump's um
technique will be a successful one. But
if it fails to be, as many of the
European leaders have suspected in the
past that Putin is just playing for
time, they want to make very clear that
their side of this battle, this side,
their side of this war was not the
impediment to peace. And Tom, the other
next step is whatever these security
guarantees are, these need to be sold
domestically to the audiences in France,
in Germany, in the United Kingdom. If
we're really talking about potentially
in the future deploying national troops
as peacekeeping operations within
Ukraine, that is not a done deal at the
national level. So that is going to be
part of the work for these European
leaders as they return back to their
homes.
>> Okay, you highlight a really important
detail of course that has to be worked
through domestically as well. Well,
Bloomberg's Oliver Crook in Brussels
with the latest on that meeting and
future steps. Ollie, thank you.
Meanwhile, to the fiscal picture over in
the US, S&P has affirmed its double A+
rating for the United States, saying
tariff revenues will partially offset
weaker fiscal revenues from Donald
Trump's so-called big beautiful bill.
Let's get more from Blue's fellow Titel.
Val, what did S&P say? Is this a win for
Trump? uh you can call it a win for
Republicans that this uh big beautiful
bill the the spending in the big
beautiful bill is looked at by S&P's
ratings as frankly okay because it's
offset by meaningful tariff revenue
that's the kind of words they use in
this statement uh overnight they said
amid the rise in effective tariff rates
we expect meaningful tariff revenue to
generally offset the weaker fiscal
outcomes from that big beautiful bill as
you mentioned now this comes along uh
data from July showing that tariff
revenue was around $30 billion. And
Treasury Secretary Scott Bessent
speaking to Bloomberg last week says he
expects tariff revenue in this uh in
this fiscal year to exceed 1% of GDP.
That would be exceeding $30 billion for
this year. So a better picture when it
comes to tariff revenue means the bottom
line for the US government is looking a
bit better. However, we have seen a
creep higher in long-end yields off the
back of this. It might not be deficit
concerns that are leading those 30-year
yields to rise. Maybe it's worries about
inflation after that hot PPI print. Or
perhaps it's uh you know boosting uh
economist uh expectations of growth.
Remember the long end is basically
trading off of inflation and growth
expectations as well as deficit
concerns. So you could argue the move
higher in yields recently has been on a
better economic backdrop.
>> Meanwhile, Val, here in the UK, traders
betting that the Bank of England will
hold rates for the rest of the year.
It's been quite the turnaround. Just in
the last couple of weeks, really earlier
this month, there was a higher chance
markets were betting that there would be
another 25 basis point cut by the end of
this year from the BOE. Now that's at
50/50.
Why?
>> Uh, frankly, the data last week came in
better than expected. We did not get our
worst fears confirmed about the labor
market. And then the GDP figures on
Thursday also came in better than
expected. We do have UK CPI tomorrow to
keep on this narrative. Uh but what the
back end of the guilt market is telling
us is that better growth expectations
just boosting uh these yields higher.
Now you can also complicate the fact
that yes better growth expectations
means maybe higher yields but that also
reduces the fiscal headroom for the UK
government. And what makes matters worse
is UK linkers those are trading at highs
of the year in terms of yield the
highest actually since 1998. They
surpassed the Liz trust highs yesterday.
And this is a very complicated thing for
the UK government. 25% of their debt
pile is in inflation linked bonds, which
means as long as inflation is above
target uh and running above the Bank of
England's target, it means that their
debt financing cost uh to finance these
linkers rises as well. So that's
something that also complicates this
kind of doom loop that the UK has gotten
themselves into.
>> Wow, that 25% figure that that's uh
that's chunky.
>> Highest in the G7.
>> Is it the highest in the G7? Okay,
there's the challenge. Ben's Valerie
Titel always given uh the additional
detail and contest fal thank you on the
market check and of course on the
rericing around the bank of England you
can get a roundup of the stories you
need to know to get your day going in
today's edition of dayb breakak terminal
subscribers can go to dayb or da yb go
on the terminal of course the details
the analysis and the fallout at least
the implications of that meeting at the
white house yesterday between European
leaders and the presence of Vladimki and
Trump is in focus all of the context
text around those conversations and the
next steps being reported out for you on
that page. Coming up, could an end to
the war in Ukraine see additional
supplies of gas being put on the market?
Could it ease the prices? Prices are
already down in terms of European gas
spot futures. Is there more that can be
done on that front? The European gas
markets in focus tied of course to that
conflict. That's coming up. This is
Bloomberg.
[Applause]
We need to stop this war to stop Russia
uh for this.
>> If everything works out well today,
we'll have a trilad and I think there
will be a reasonable chance of ending
the war when we do that. The coalition
of willing uh countries, that's 30
countries already working together on
security guarantees will now work with
the US on those guarantees.
Voteski, Donald Trump and Kia Star
speaking in Washington yesterday after
those meetings. Meanwhile, European
natural gas prices fell to a fresh 2025
low ahead of Trump's meeting with
Ukraine's Phil Silinski. We are not
there yet, of course, but an agreement
to end the war could ease global
supplies of gas. Let's get more with our
European energy reporter Priscilla as a
Roa in terms of how to think about the
gas price changes on the news flow when
it comes to the conflict in Ukraine.
What is behind the fall in prices? The
the conflict continues. We do not have
additional Russian gas on the market and
yet prices have fallen. What is behind
that, Priscilla?
>> Hi, good morning Tom. Behind this fall
in prices, there's this market
expectation that there's going to be
more gas supplies, Russian gas supplies
available in the global market. That
doesn't mean that Russian gas will
return to Europe. That mean since the
since Russian's invasion of Ukraine and
when Russia cut the supplies to Europe,
Europe has started to rely more on
global markets which means that it
competes with other countries with China
with Southeast Asian nations with Egypt
for seaborn cargos. Uh with more Russian
gas available, other buyers could access
this pole and there's going to be less
competition for Europe. Why do I say
that it's going to be harder for Europe
to access this? Or Vanderlayan has
stated over the weekend that the the EU
intends to progress with sanctions on
Russian energy and at the same time the
EU has agreed on the trade deal with the
US to buy a lot of US energy that is
going to come online. So it's not
looking like this Russian gas will come
to Europe, but the availability of
supplies in the global markets will ease
the pressure.
Okay. So, the R Russian gas may not be
coming to to Europe anytime soon, but if
there was Priscilla, if there was a
peace deal between Ukraine and Russia,
what what kind of time frame are traders
thinking about in terms of additional
Russian gas on the global markets?
>> I think rather than than timing or how
soon this is going to come back, the
market expectations is in which shape or
form. Let's say that if there's an
agreement, we're talking here if and
when there's uh there's this
conversation in the markets, there's the
expectations that the US could lift
sanctions on article LNG2, which is an
LNG project in Siberia that is being
sanctioned by Joe Biden by the previous
administration. And if sanctions are
lifted in that specific project, those
vessels are ready to go. and some of
them are already going out to countries
that are not linked to the sanctions.
So, we could see more LG coming to the
market as soon as those sanctions are
lifted. In terms of pipeline supplies, I
think this is going to be a bit more
complicated. I don't know if you
remember, but earlier in the year, there
was the end of the transit agreement for
Russian pipeline supplies through
Ukraine to some countries in central
eastern Europe, including Slovakia and
Austria. and this pipelines flows. They
could eventually return, but that it
would entail an agreement with Ukraine
on what the conditions of their supplies
would be like. But in terms of like the
global balance, LG will matter more
because cargos could be moved around the
world to meet demand while pipeline
supplies are very restricted to specific
countries including Slovakia, Hungary
that relied on the supplies previously
to the end of this agreement at the
beginning of the year.
>> Okay. European energy reporter Priscilla
Azetta Roa, thank you very much indeed.
in terms of how we should think about
the potential the potential of
additional Russian gas on the global
markets. Coming up to technology, shares
of Intel soaring in after hours trade
after Soft Bank buys a stake in the US
chip maker. We're going to bring you
that story next. This is Bloomberg.
Welcome back to Bloomboat Daybreak
Europe. Happy Tuesday. Soft Bank has
agreed to buy $2 billion $2 billion
worth of Intel stock in a surprise move
to shore up the struggling US chipmaker.
Meanwhile, Bloomberg has learned the
Trump administration is in discussions
to take a stake of about 10% in the
company. Let's get more with our Asia
Tech correspondent Annabelle Drul
standing by in Hong Kong. Annabelle,
what is the motive then? What is the
rationale for Soft Bank buying $2
billion of Intel?
>> Yeah, that actually that part is a
little bit unclear. I mean both
companies put out a statement when this
was confirmed saying that they were
really of course uh echoing the strength
of each of them but it's also
interesting the timing given that you
had lit Bhutan for instance meeting with
Donald Trump just a few days ago there
has been some questions whether this is
of course politically motivated but as
an aside I mean you are seeing sort of
some questions I guess in in the share
price reaction today because you've got
Salt Bank for instance it's been very
much under pressure at one time down the
most since April of this year for
instance Intel on on the other hand has
absolutely soared in postmarket trade.
In the session, we actually saw it
closing down 4% but it has more than
rebounded since rising 5%. But just to
recap, as you said, uh the main headline
here is that SoftBank is looking at a $2
billion investment in Intel. Uh they're
buying stock or new shares that are
going to be issued at $23 a share. That
is a small discount to the last close.
And essentially, it just continues to
build their investment into into the AI
story. SoftBank had sort of perceived as
being a bit of a lagard in this space.
But some of their stocks for instance in
the investment portfolio include Nvidia,
TSMC of course and you do have SoftBank
very heavily involved in project
Stargate as well.
>> In terms of the US government stake,
this has been reported out of course
Annabelle by by Bloomberg last week. Now
we had the details. It could be 10%.
>> What do we know about the thinking of
the US government, the Trump
administration in terms of their
position around Intel?
Yeah, this is an interesting one as
well. I mean, of course, Lit Bhutan, for
instance, was someone who was facing a
lot of pressure from President Trump
just a few weeks ago. President Trump
seems to have very much reversed his
course or his thinking around Lit
Bhutan's fate at the helm of Intel as
well. What we understand, and this is a
Bloomberg scoop from people that are
within the Trump administration, plus
those that are familiar with the matter
or close to the matter, is that
essentially Intel had been set to
receive funding through the US Chips and
Science Act, that's going to be
converted into equity instead. And so if
it were about to receive say 11 billion
through the Science Act, that would
instead be converted again into that
near 10% stake, as you said, around a
10% stake uh from the Trump
administration. Of course, it might not
proceed. the size of that state could
change. Uh but but it is really notable
uh given that you do of course have the
US really pushing to try and shore up
that that uh onshoring of course of
semiconductor capabilities and really
trying to bring back that presence to
the US as well.
Okay, Asia tech correspondent Annabelle
Drul. Thank you for the latest in terms
of Intel that SoftBank stake and of
course the US government potentially
looking to take 10% and join Annabelle
and Sheranne for Bloomberg Tech Asia on
Friday this week where they will be
looking at the rise of humanoid robots.
Meanwhile, Bloomberg understands that
Shiin is considering moving its base
back to China to help its hopes for a
Hong Kong IPO. The fast fashion retailer
is currently domic in Singapore, but
sources say it has consulted lawyers
about setting up a parent company in
Beijing in the hope that it would sway
authorities in China to sign off on its
listing in Hong Kong. The company is
running out of places to float after
failing to secure regulatory approval in
New York and London. Coming up,
President Trump pushes for a one-on-one
meeting between Vladimir Putin and
Vadimir Zalinski following talks with
the Ukrainian leader. We're going to
discuss with Hannah Shellst from the
think tank Ukrainian Prism. That
analysis is coming up. This is
Good morning. This is Bloomberg Day
Europe. Tom McKenzie in London. These
are the stories that set your agenda.
Table for three. Donald Trump pushes for
a trilateral meeting with Ukraine and
Russia with the US and its allies now
promising future security guarantees for
Kev. European futures tick higher with
global stocks close to record highs.
Treasuries hold steady after S&P
confirms its long-term credit rating for
the US citing higher tariff revenues.
And Intel sores on news of a $2 billion
investment by SoftBank. Bloomberg learns
the US government is considering taking
a 10% stake in the chip maker. To the
markets then European stocks eaked out
modest gains of about a 10th percent by
the close yesterday. Looking to build on
that today, just by a tenth rangebound
really equities as they look for the
next major catalyst. It ultimately
wasn't that meeting at the White House.
Possibly it's going to be JPAL. We know
the focus is there of course with that
speech on Friday at a Jackson Hole.
Footsy 100 futures looking to add 11
points. S&P futures after closing flat
yesterday pointing a little lower down
2/10 of a percent. NASDAQ 100 futures
looking to drop around 2/10 of as well
losing 55 points so far in the session.
As you look at the futures picture for
the NASDAQ 100. Let's flip the board and
have a look crosset then. You've seen a
bit of selling across US treasuries in
the last few days. That's moderated
today. Stability across US treasuries in
the session this Tuesday. 433 right now
and the benchmark US 10en year. Euro
dollar at 116 the single currency
trading versus the US dollar largely
unchanged. Brent knows where a bit more
action is. You've seen a bit of little
bit weakness for the oil prices on the
back of those meetings at the White
House between the Ukrainian president
and his US counterpart. European leaders
of course there as well. Brent down 710%
and gold etching higher up 210%. UBS
sees higher prices for gold with a view
that you could get to around 3,700 by
June of next year. So, President Trump
says he has called Vladimir Putin to
urge him to begin making plans for a
summit with Vladimir Zilinski. It comes
after his meeting with the Ukrainian
president and several European leaders
at the White House on Monday. US
Secretary of State Marco Rubio says
Washington is working on security
guarantees for Kev.
>> Ukraine post conflict has a right to
enter into a security agreements with
other countries and we will work with
our European allies and non-European
countries by the way to build such a
security guarantee. We're working on
that right now. We'll continue to work
on that and that'll be something that'll
have to be in place after a peace deal
so that uh Ukraine can feel safe moving
forward.
Well, let's bring back in Bloomberg's
Oliver Crook in Brussels who was
following all of this of course for us
yesterday. We were hearing then Ollie
from the Secretary of State talking
about those security guarantees and that
did seem to be one of the clear
takeaways from the meetings at the White
House. There would be a security and
guarantee for for Ke for Ukraine. The
question is what form that takes, what
that looks like.
>> Yeah. So there are a number of questions
around this article 5 style security
guarantee that the United States started
talking about over the weekend after
that meeting with Trump. I think the
first point to make there is that that's
something that what I think is very
interesting. The United States seems to
suggest came out of the Putin Trump
meeting. This is something that can be
unilaterally applied by the United
States. It doesn't need Russian consent.
Potentially it's helpful to get it
because it means the Russians understand
and have come to a sort of agreement,
but it's something that the United
States could have committed to in the
past. Regardless of that fact, however,
I think that the European leaders will
leave the White House in part reassured
by a the fact that Trump has not talked
about territorial concessions without
Ukraine as the sort of main decider
about that. But then secondly, it seems
a real commitment to being a part of the
security architecture in some way or
another post peace deal. Of course, you
still need to get to the peace deal.
There's a lot of thorny issues there.
But casting our gaze forward, I think
that the European leaders will be very
pleased to have basically got those
reassurances from the president of the
United States, despite the fact that
there's still ambiguity about what the
security guarantees mean. Does it mean
that the United States would be an
active participant in defending
militarily Ukraine after uh if there
were another invasion, another sort of
um incursion on sovereignty by Russia
after a peace deal? Does it mean that
there will be European troops stationed
within Ukraine? This is something now
that when we cast our our minds forward,
all of these European leaders have come
to the table very sort of unified in
their approach to Donald Trump, they
still need to sell this at home. I'll
give you the example of Frederick Mertz
in Germany. I've spoken to a number of
German politicians through the last few
months about this idea of potentially
deploying German troops as peacekeeping
operations within Ukraine. This is not
something that has great traction even
in mainstream German politics. to say
nothing of the fact that the AFD, the
far right within Germany has just
overtaken the CDU in popularity in
recent polling and they are totally
opposed to these sorts of things. So
there is also a domestic audience to
sell this um whole conversation to on
the European side. That being said, this
is a far cry from the sort of disastrous
meeting you saw 6 months ago. As we all
saw, you know, Zilinsky was wearing his
sort of black suit there. They sort of
joked about that in the Oval Office. So
overall a more positive conversation
that occurred between Trump than than
six months ago and I think constructive.
That being said, there are still a lot
of open questions and will have to be
cast forward to see whether or not there
will in fact be that trilateral meeting
which all the European leaders have been
pushing for.
>> Okay, Oliver on the ground in Brussels
with the latest. Ollie, thank you. Let's
get more analysis and bring in Hannah
Shellas now, security studies program
director at the think tank Ukrainian
Prism. Hannah, good morning. Thank you
for joining us. Given what you saw and
heard yesterday from the White House in
these meetings, do you assess now that
Ukraine potentially is a step closer to
some kind of deal with Russia?
>> The problem is that we can be closer to
the deal, but are we closer to the
peace? And that is the main question
that all Ukrainians are asking. The
meeting in Washington definitely went
much better than everybody expected. at
least their first impression that there
were less pressure than expected uh for
the president Zilinski and that
President Trump uh went after the
meeting with the much better mood if you
compare the pictures from the uh uh
white house yesterday and from Alaska a
few days ago. His mood was definitely uh
dramatically different. But is it just
the mood, the first emotions, or does it
mean also that we have a certain
substance and agreement between uh
Ukraine, our European allies and the
United States? That's the open question.
Well, on so Hannah, on the question of
substance, when it comes to this
security guarantee from the US and its
European allies, what is the minimum
that the US would need to provide in
terms of that security guarantee to
reassure and satisfy Keev?
You know, Ukraine already had a bad
experience with what we considered as
guarantees because let's remember that
in 1994 Ukraine rejected the third
biggest in the world arsenal of the
nuclear weapons where exactly in that
Budapest memorandum it was stated the
security asurances for Ukraine. Then
later in 2003 and 2014 the US said sorry
there are no guarantees there are just
asurances. Even that in Russian and
Ukrainian language it was translated as
guarantees and in that memorandum there
were already promises about territorial
integrity of Ukraine not attacking uh
Ukraine and helping it in case it is
necessary. So now Ukraine having that
experience of 1994 uh is much more
careful about any type of the guarantees
that are brought that they should be
binding first of all not just legally
binding but to be sure that uh the
political will will not prevent any of
the not only US president but depending
who would join these guarantees to
implement them because honestly after
the latest events I would say the last
year in many countries where they had
the US guarantees like South Korea, like
Israel, like uh Japan. I heard from many
experts and politicians, can we really
now trust the US guarantees if uh the
political will can change any type of
the support or promises that they made
before? That what Ukraine fears as well.
>> Okay. And that's important historical
context, isn't it? In terms of the in
terms of where we are uh right now in
terms of those potential security
guarantees, taking an eye back to 1994.
When it comes to territory, Hannah,
is it fair to assume that the president,
that the Ukrainian president will have
to concede that some territory will
remain in Russian hands domestically,
politically? What is Zalinski able to do
in terms of that question? How far is he
able to go in terms of accepting that
some territory will need to remain in
Russian hands?
They say that the change of the
territorial integrity of Ukraine is
impossible without uh not only change of
the constitution uh what is already very
difficult process according to our uh
constitution that should go through the
uh constitutional court with the two
hearings in the parliament. So it can
take one and a half year at least but
without referendum that's clearly stated
in the constitution as for now and we
see that there is no support in Ukraine
among the population for the changes of
the uh uh territorial integrity of
Ukraine because we are not speaking
about the territory we are speaking
about people Ukrainian people live at
this territory. There is no Russian
ethnics or Russian territories. The
Netsk always been Ukrainian. By the way,
it was established by the British as the
city, not even by the Russian Empire. So
in this way uh that is very difficult
for Zilinski to make any significant
promises. But also uh let's remember we
have legal changes and we have de facto
acceptance that the certain territories
are remaining under the Russian
occupation at least temporarily and
probably what they could discuss.
yesterday. It is the second variant
acknowledging that at least temporarily
some of these territories would remain
under the Russian control. But then
there would be all the questions to the
Russian Federation that they need to
provide human rights for Ukrainians
living in these territories. And if we
take Crimea for example, Russians closed
all Ukrainian schools and churches. If
you go to Detsk Bjdansk just for having
Ukrainian songs at your telephone,
students can be arrested and we have a
weekly searches at the educational
facilities if kids have the Ukrainian
songs or even the Ukrainian keyboard at
their telephones. So that's why
Ukrainians are really um uh would not
agree to any significant changes and
Russian control over here because we
understand that it would be a very
strong suppression of the Ukrainian
population at the Roman land.
>> Hannah Shalist, security studies program
prism on some of the challenges in terms
of moving the needle on these
conversations and the take of course on
what we saw at the White House
yesterday. Hannah, thank you. Staying on
geopolitics but shifting to India China
relations now because Indian Prime
Minister Narendra Modi has hailed
Russian leader Vladimir Putin. It does
tie into China at some point as a friend
and discussed bilateral cooperation with
him in a phone call. The call comes as
Mod's government also moves to bolster
relations with China. Modi is due to
meet with Chinese foreign minister Wangi
today as both nations push to normalize
relations amid diplomatic tensions with
the US.
develop confidence to dispel
interference, expand cooperation and to
further consolidate the momentum of
improvement and development of China
India relations so that while pursuing
our respective rejuvenation, we can
contribute to each other's success
relationship. Excellency, our two
nations now seek to move ahead. This
requires a candid and constructive
approach from both sides.
>> For more, let's bring in Bloomberg
government reporter Sudi Ranjansen in
New Delhi. Sudi, what can we expect then
from Wangi's meeting with Modi later
today?
While we are not expecting major
announcements but it's very clear that
this meeting is going to set up uh the
you know the bilateral meeting between
President Shriin Ping and Prime Minister
Modi later in the month. uh and this
also shows in a way how the relationship
between India and China from a complete
you know freeze and and and you know a
very very bad acrimonious relationship
is turning uh the other way around
the Chinese foreign minister yesterday
uh met with the Indian foreign minister
he's meeting India's national security
adviser talks on the border seems to be
on a very going on in a very positive
mode So all in all uh what what we can
expect is a gradual but a definitive
thaw and warming of relations between
India and China.
>> Okay, a thor and a warming of relations
between India and China. We look ahead
to that meeting of course between the
Indian prime minister and Wang E the
foreign minister of China. Bloomberg
government reporter Sudi Ranjan Sen,
thank you on the details and the context
around that in light of course of the
pressure that both countries are coming
under from President Trump and that
administration. Coming up, we're going
to switch focus. It's a new humanoid
robot built to tackle industrial labor
gaps head on. We're going to speak to
Ano Robert from the company behind the
robots.
That is coming up next.
This is Bloomberg.
Welcome back to Bloomberg Daybreak
Europe to humanoid robots now because
Hexagon has released its new humanoid
bot called AON. The tech company says it
is built to tackle labor shortages using
AIdriven mission control. Hexagon hopes
AON will be used across multiple sectors
including transportation, manufacturing,
and logistics. It comes, of course, as
Elon Musk doubles down on Tesla's
ambitious bet on robotics with the
company's upcoming Optimus 3 model.
Joining me now is Ano Robert, the
president of Hexagon's robotics
division. Ano, good morning. So, talk to
us about AON. What what can it do? what
are its capabilities and what are the
gaps that it may be able to fill for
some of your customers and clients.
>> Sure. Uh first thank you for having me
Tom and good morning. Aon was really a
human robot built specifically for
industrial use cases as you mentioned.
And one of the key things is is autonomy
actually. And so what can it do? It can
do part and object manipulation referred
to as pick and place and sorting. It can
do machine tending bringing parts to a
certain machine in the in the line. It
can actually do also inspection
inspection of either the space it works
in or the parts it deals with. Uh it can
do reality capture. So digital twin of
your environment and of course it can do
it operation. So one of the key
differentiating factors we have of
course that we use a lot of AI but at
the fundamentally is actually a very
sophisticated sensor suite. So we have
over 22 sensors in the robot that
enables all the use cases I just
mentioned.
>> Okay. And you've partnered with Nvidia.
You've worked closely with Nvidia, the
maker of course of those AI accelerators
and other hardware and software on on
this project. What what is the biggest
kind of roadblock to rolling this kind
of technology out? Is it the is it the
hardware or is it the software? Is it
the AI?
>> Uh it's a bit of both actually. So in
terms of dexterity, think of replicating
human movements with agility. We still
have a bit of challenges at the
actuators, so the motors that the the
robot uses. And the second one on AI is
really how do you take into account
changing environment and completing the
same task when the environment changes
which of course is a lot of AI behind it
as you mentioned. Uh so things that are
very simple for us as humans. Taking a
simple example of you know putting a
nail in a wall. If the hammer is on the
left on the right the nail is on the
table not on the table we can figure
this out in seconds. We need the human
know to be able to do the same. And
that's all through spatial intelligence
and also semantic intelligence.
>> And what kind of demand Anna what kind
of demand are you seeing for for these
robots? Are you are you are orders being
placed already? Are you getting
customers lining up to buy these things
or is there or is there a bit of
caution? Is there a bit of skepticisms
skepticism still uh amongst potential
potential customers?
>> Yes, I think the skepticism is mostly
behind us to be honest. We've announced
in June two pilot customers both
Chaffler and Pilatus. Very very proud of
those partnerships. We're going to
announce a few more in the next couple
of months. And so I think we're seeing
demand pick up quite quite well. Uh
frankly, as you mentioned at the
beginning of the the segment, right, is
the labor shortage is becoming very real
both in the US and Europe. Uh and so we
need those humanoids to come and take a
part uh in the uh the factories.
>> What what are the biggest barriers to to
adoption at this point?
>> I would say barriers of adoption as I
mentioned it's the the the precision of
some of the movements that we have and
as you can imagine the factory line is
very precise. Um I think the second one
is that the human need to operate fully
autonomously in that environment. So at
the moment as you're probably well aware
most of the human deployments are within
constraint environments and we need that
to be in an open factory. There's a lot
of safety concerns around it that we're
obviously addressing. Uh and the last
one is really the multi-purpose side of
it. That's the main advantage of a
humanoid frankly over many other forms
of robots currently used in factories is
that they can do many things through AI
learning.
>> Yeah.
>> So we need that range to continue to
expand with customer needs and that's
why we're working very very closely with
about 20 customers at the moment. Two
pilots 18 that we're just you know
dealing with to better understand what
those multi-purpose really mean. Yeah,
>> I know. Presumably, if you're a factory
worker, you should be slightly concerned
about this technology.
>> You know what? We we've uh we hear that
quite a bit. Uh our goal is really to
complement the workforce. There's two
main driving factors. One is labor
challenges as I mentioned before also
safety concerns. A lot of the tasks in
the factories are both repetitive,
tedious, but also as artists in many
cases. And so we're trying to tackle
this and pus is a great example where
the whole structure of the humanoid was
really to complement the workforce and
allow the workers that are the
specialist effectively right in those
lines to really move towards higher
value work solving true engineering
problems optimization things that they
don't have the time to do today and so
on. So we really feel strongly that this
is a the humanoids will complement the
workforce both for necessity labor
shortage but also allowing them to work
on higher value work.
Okay Robert, president of Hexagon's
robotics division on the release of Aon
what it could mean for future work and
for enterprises adopting uh humanoid
robots. Ano thank you and one earnings
story to bring you this morning. fullear
underlying profit. A BHP has fallen by
more than a quarter to its lowest level
since the pandemic. The results from the
world's largest miner were broadly in
line with market expectations and came
as prices of BHP's key earners, iron ore
and cooking coal, cocing coal, not
cooking coal, uh cocing coal, came under
pressure from soft demand, of course,
from China. Take a listen.
Everybody's chasing higher standards of
of of living uh to feed that growth, to
feed those higher standards of living.
The reality is the world's going to need
more of the commodities that uh that BHP
produces. There's more steel needed to
build cities, more copper uh needed not
only to to electrify the world, but for
the for data centers, so for AI. Um and
so we've tried to to orient the BHP
portfolio towards those commodities that
the world's going to need more of.
Okay, there's plenty more coming up.
We're going to give you the UBS forecast
on gold and why traders are fading those
bets on BOE rate cut. Stay with us. This
is Bloomberg.
Welcome back. So the rally that gold's
had year to date has been pronounced
outstripping of course what we've seen
in terms of in terms of equities 27%
year to date. UBS says there is further
to go as you look in to June of 2026.
They project out to next year. They are
setting a target of $3,700
per troy ounce. And they say that is
largely going to come down to cuts from
the Fed, a weaker US dollar and question
marks about Fed independence as well.
The call there from UBS. Let's flip the
board and have a look. Talking of
central banks, the BOE and money markets
pairing their bets in terms of the BOE
now not expecting the Bank of England to
go again this year, keeping rates at 4%.
That is the expectation. Quite a
turnaround from earlier this month when
another cut of 25 basis points by the
end of this year had been priced in. Now
it's less than 50% chance. That is on
the back of stickier inflation and of
course slightly better growth as well.
Inflation data dropping tomorrow with
the headline number expected to see an
increase of 3.7% of course well above
the Bank of England's target. Bloomberg
terminal users can access these charts
of course by going to GTV go on the
Bloomberg terminal. Stay with us. We
will be speaking with the Spanish
foreign minister. That's at 8:30 a.m. UK
time. For more on the European response
to what we saw yesterday in Washington,
Ukraine, and European defense, the
opening trade is up next. This is