>> NEWSMAKERS AND MARKET
MOVERS, THIS IS THE PULSE WITH FRANCINE LACQUA. FRANCINE: GOOD MORNING, EVERYONE.
WELCOME TO THE PULSE. THE CONVERSATIONS THAT MATTER.
GLOBAL STOCKS SLIDE, BOND YIELDS CLIMB AFTER HAWKISH FED
MINUTES SIGNAL MORE RATE HIKES. JANET YELLEN IN BEIJING SHORTLY
TO EASE TENSIONS BETWEEN THE WORLD'S TWO BIGGEST ECONOMIES
AMID A TRADE WAR. META-TAKES AIM AT TWITTER WITH
THE LAUNCH OF THREADS. MILLIONS SIGN UP, BUT IT IS NOT
YET AVAILABLE IN A FEW COUNTRIES. THE FUTURE OF BRITAIN'S
NATIONAL HEALTH SERVICE. WHAT IS IN STORE FOR THE
CREAKING HEALTH CARE SYSTEM OVER THE NEXT 75 YEARS?
A LOT OF FOCUS ON THE FED MINUTES.
LET ME TELL YOU WHAT THAT IS MEANING. WHAT WE FOUND OUT FROM THE FED
MINUTES IS THAT A LARGE MAJORITY OF PARTICIPANTS, SOME
VOTED FOR A HIKE ALREADY THE LAST TIME AROUND, BUT MOST
ARE EXPECTING INTEREST RATES TO GO HIGHER FROM NOW.
WE ARE SEEING REPRICING'S ACROSS-THE-BOARD.
EVERYDAY I WAKE UP AND I SAY THANK YOU TO A LOT OF VIEWERS
WHO SAY THIS COULD BE THE DAY THE TWO-YEAR GOES 5.5%.
GIVEN ALL THE COMPOSITION OF THE U.K.
ECONOMY, THEY FORECAST OR IT IS NOT -- OR IT IS AT LEAST A REAL
POSSIBILITY THAT BANK OF ENGLAND INTEREST RATES HAVE TO
GO OUT TO 7%. THE PICTURE ACROSS EUROPE, WE
GET FRANCE WHERE RIOTS HAVE BEEN ERUPTING. YOU CAN SEE EUROPE STILL IN THE
GREEN THEN WE WAIT TO SEE WHAT IS HAPPENING IN THE U.S.
JOINING US TO TALK ABOUT WHAT ALL OF THIS MEAN FOR THE NEXT
COUPLE OF MONTHS, THE EMERGING MARKETS PORTFOLIO MANAGER AT
EMCO. SO GOOD TO HAVE YOU ON THE PULSE. THIS IS LIKE A REVIVAL.
WE HAVEN'T SPOKEN TO YOU IN QUITE SOME TIME.
YOU PICK THE MOST EXCITING DAY. HOW DO SEE THE GLOBAL ECONOMY
DEVELOPING? >> THANKS FOR HAVING ME, GREAT
TO BE HERE. I LOVE THE MOVING PARTS IN
EMERGING MARKETS. WHAT HAS BEEN QUITE INTERESTING
IS HOW MUCH EM HAVE PERFORMED THIS YEAR DESPITE ONGOING FEARS
ABOUT THE FED, DESPITE ONGOING FEARS ABOUT THE BANK AND ECB
AND SO ON. BECAUSE EM CENTRAL BANKS
MANAGED TO HIKE SO AGGRESSIVELY AND SO QUICKLY, NOW THEY ARE AT
A POINT WHERE THEY CAN START CUTTING RATES OR LEAST PAUSING
THE FACT THAT WE WILL SEE IF IT HIKE IN JULY. >> THERE IS A FUNNY LITTLE
THING WITH THE FED IS THEY KEEP ON TELLING THE MARKETS THEY ARE
GOING TO HIKE. THE MARKET DOESN'T BELIEVE IT.
ARE YOU EXPECTING THE FED TO BE MORE AGGRESSIVE? >> IT IS PLAUSIBLE WE SEE MORE
THAN ONE HIKE THIS YEAR. WHEN YOU COMPARE U.S.
TO BRAZIL WHERE REAL RATES ARE POSITIVE WITH YOU LOOK AT SOUTH
AFRICA OR THE CZECH REPUBLIC, THAT PROTECTS THE EM CENTRAL
BANKS AND ALLOWS THEM TO GO IN THE OPPOSITE DIRECTION OF THE
FED EVEN IF WE SEE FURTHER TIGHT OF THE DEVELOPED MARKET.
IF WE LOOK AT HOW WELL THE CURRENCIES HAVE DONE YEAR TO
DATE, IT REINFORCES POTENTIAL EASING BY EM CENTRAL BANK'S.
STRONGER CURRENCIES, LESS INFLATION, ROOM FOR THESE BANKS
TO I WOULD SAY NEVER IGNORE THE FED, BUT NONETHELESS ACTUALLY
GO IN THE OPPOSITE DIRECTION. >> WHAT THE FED IS DOING IS
REPRICING DOLLAR AND CHANGING TREASURIES. INVESTOR APPETITE. .
>> IT'S INTERESTING BECAUSE EM HAS FACED EVERY POSSIBLE SHOCK
ONE CAN IMAGINE. WE HAVE HAD FED TIGHTENING,
GEOPOLITICS. NOW AFTER HAVING GOTTEN BLOODY
SO TO SPEAK EM LOOKS COMPELLING ON THE CURRENCY SIDE, THE BOND
SIDE, AND IT CAN HAVE A PRETTY DECENT RUNWAY OVER THE NEXT FEW
MONTHS. ONE THING WE ARE MINDFUL OF IS
IN THE FACE OF FURTHER TIGHTENING, WHEN WE THINK ABOUT
EM CENTRAL BANKS, THEY GO UP IN AN ELEVATOR, THEY GO UP IN A
LIFT IN TERMS OF THE RATE HIKES AND THEN THEY GO DOWN THE
STAIRS , SO THE CUTS MAY BE GRADUAL, WHICH SUPPORTS
CURRENCIES. FRANCINE: I WANT TO TALK ABOUT CHINA.
TREASURY SECRETARY JANET YELLEN IS EXPECTED TO LAND IN CHINA
LATER THIS HOUR. SHE WANTS TO OPEN CHANNELS
DESPITE THE TURBULENT RELATIONSHIP.
OUR VISIT COMES DAYS AFTER CHINA RESTRICTED THE EXPORT OF
TWO METALS. THIS IS SOMETHING JANET YELLEN
SAID IN APRIL, SHE WANTS TO LOOK AFTER AMERICAN INTEREST
AND NOT HER CHINA ECONOMICALLY. WHAT DOES THAT LOOK LIKE AND
HOW DO INVESTORS TAKE ADVANTAGE? >> I FEEL LIKE I HAD A DEGREE
IN GEOLOGY IN THE PAST 24 HOURS. FRANCINE: THE LITTLE COMPONENTS.
>> ON THE CHINA FRIEND, THERE ARE PROBABLY TWO TRACKS.
THE GEOPOLITICAL TRACK, THE COMMERCIAL TRACK.
IF WE DON'T SEE A DÉTENTE NEAR TERM. ULTIMATELY WHEN WE SPEAK TO OUR
COLLEAGUES, IT SEEMS THAT THE ONE AREA WHERE THERE IS COMMON
GROUND, WHERE THERE IS BIPARTISAN SUPPORT IS BEING
HAWKISH TOWARDS CHINA. WE HOPE THAT THIS TRIP REDUCES
TENSION SOMEWHAT. GOING FORWARD WE STILL SEE
ONGOING TENSIONS. WITH REGARD TO HOW TO TAKE
ADVANTAGE OF IT, THERE IS ACTUALLY I THINK PEOPLE ARE
WAKING UP TO THE FACT THAT AS WE EXPECT FURTHER NOISE BETWEEN CHINA AND THE U.S., CHINA AND
TAIWAN, PEOPLE ARE LOOKING AT WHERE THEY ARE INVESTED AND THOSE INVESTED IN EQUITIES,
HALF THE BENCHMARK IS CHINA AND TAIWAN, ARE LOOKING AT THAT AND
SAYING MAYBE I SHOULD SHIFT INTO EM DEBT WHICH IS FAR LESS
EXPOSURE. THEY ARE TRYING TO SHIFT
EXPOSURE AND DIVERSIFIED. FRANCINE: THANK YOU SO MUCH.
YOU STAY WITH US AND WE WILL TALK ABOUT EASTERN EUROPE AS
WELL. EUROPE'S ENERGY FLOWS, WE WILL
DISCUSS THAT WITH OUR EXCLUSIVE INTERVIEW FROM THE EUROPEAN
COMMISSION. THIS IS BLOOMBERG. FRANCINE:
WELCOME BACK TO THE PULSE. A CRISIS A YEAR ON.
IT LED TO A RANGE OF RESPONSES INCLUDING JOINT GAPS PURCHASES AND A CASH TRADING PLATFORM.
MARIA TADEO HAS AN INTERVIEW FOR US. >> WHAT A YEAR IT WAS FOR THE
ENERGY MARKETS AND WE ARE JOINED BY THE VICE PRESIDENT OF
THE EUROPEAN COMMISSION. YOU PUT TOGETHER WHAT YOU SAID
TO ME LIKE A RELATIONSHIP MATCHMAKING, BUT WE ARE NOT
GOING TO FIND LOVE, WE ARE GOING TO FIND BUYERS OF GAS.
I KNOW YOU GOT TO 10 MILLION CUBIC METERS.
WHAT IS INSIDE THE NUMBERS? WHAT CAME OUT OF THE TOTAL
NUMBERS? >> WE>> THE DEMAND AGGREGATION. BUT ALSO THE FACT THAT WE HAVE
BEEN OVERSUPPLIED BECAUSE WE GOT THE OFFERS FOR MATCHING
OVER 10 PCM. WE MANAGED TO COVER MOST OF THE
EUROPEAN TERRITORY INCLUDING TERRITORIES NOT EASIER TO
SUPPLY LIKE MULLED OVER AND UKRAINE.
WE GOT THE DEMAND COMPLETELY MATCHED.
PRICEWISE IT WAS BETTER THAN WHAT THEY GET FROM TRADITIONAL
SUPPLIERS. THIS SECOND ROUND
, WE START WITH INTERNATIONAL TENDER TOMORROW. >> D REACH OUT TO THE SELLERS
AND WHAT IS THE NEXT GOAL. WINTER IS AROUND THE CORNER.
HOW MUCH CAN YOU GET? >> I THINK THAT WE ARE
PERMANENTLY COMMUNICATING WITH OUR MEMBER STATES AND THE
ENERGY PLAYERS, LET'S NOT BE COMPLACENT.
WE MANAGED LAST WINTER. WE HAVE BEEN A LITTLE BIT LUCKY.
EVERYTHING HAD TO FIT INTO MAKE IT THROUGH THE NEXT WINTER.
THEREFORE, WE HOPE THAT BY THE END OF THE SUMMER, WE HOPE WE
WILL HAVE FULLY FILLED THE GAS STORAGE ACROSS EUROPE AND THEN
WE WANT TO WORK THE RESERVE BECAUSE YOU NEVER KNOW WHAT
MIGHT HAPPEN. >> YOU SAY WE WANT TO BE ON
STORAGE LOOKING GOOD. ON A SCALE FROM ONE TO 10, HOW
MUCH DO YOU WORRY ABOUT THE WINTER?
PRICES WENT DOWN, BUT THE DAMAGE , THE REPERCUSSIONS, WE
STILL FEEL IT. IT IS PAINFUL STILL. >> IT IS.
THE LAST YEAR WAS INDEED A YEAR OF SURVIVAL.
THIS YEAR THEY ARE TELLING US THEY ARE STILL MANUFACTURING
AND PRODUCING WELL BELOW THE POTENTIAL AND WE NEED TO GET
THEM BACK TO THE MARKET. WE NEED NOT ONLY ENOUGH OF
ENERGY, BUT BETTER PRICES. WE'RE ARE TRYING TO INCREASE
TRANSPARENCY. I WOULD DEFINITELY BE WORRIED
UNTIL NEXT SPRING. DEFINITELY WE SHOULD NOT BE
COMPLACENT. >> THERE IS A LOT OF TALK ABOUT
RECESSION IN EUROPE, BUT I WONDER IF YOUR PLATFORM BECOMES
A ROLE MODEL FOR THE WAY TO CONNECT BUYERS AND SELLERS, DO
YOU SEE THIS BEING EXTENDED TO CRITICAL RAW MATERIALS?
IS THAT DOABLE? >> ONE DIRECTION IS TO USE THE
PLATFORM FOR THE PURCHASE OF HYDROGEN BECAUSE THAT IS THE
NEXT BIG THING. IT COULD ALSO REALLY SERVE AS
AN EXCELLENT LOOP RENT -- BLUEPRINT FOR THE PURCHASE OF
RAW MATERIALS. WE SEE HOW THIS NEW
GEOPOLITICAL WORLD IS IMPACTING SUPPLY CHAIN AND RAW MATERIALS.
WE SHOULD POOL OUR POLITICAL WEIGHT AND DEAL WITH THAT UNTIL
NOW. >> YOU SAY THE YOUR IN UNION
SHOULD POOL THAT WEIGHT. THE CHINESE RESPONDED THIS WEEK
WITH SOME EXPORT CONTROLS. IS THAT A WARNING? >> I THINK THAT WE HAVE BEEN
EXPECT THAT SOONER OR LATER THIS MIGHT COME GET I WAS
PUSHING FOR ALREADY QUITE SOME TIME THAT WE NEED TO HAVE THIS
OPEN STRATEGIC ECONOMY. WE ARE PAYING A LOT FOR
DEPENDENCIES. LOOK IN MUCH THE DEPENDENCY ON
THE RUSSIANS LIE GAS AND OIL. WE WANT TO PROCEED WITH
STRATEGIC STOCKPILING. USE OF THE PLATFORM AS WE DID
FOR THE GAS AS DOING SOMETHING SIMILAR FOR THE CRITICAL RAW
MATERIAL. WE HAVE TO INVEST IN CRITICAL
RAW MATERIALS TO HAVE THE STRATEGIC SUPPLIES WE NEED. >> BUT YOU DON'T WORRY ABOUT
ATTENTIONAL RETALIATION FROM THE CHINESE? >> OF COURSE WE ARE ANALYZING
THE CURRENT SITUATION AND DISCUSSING AND AMONG MEMBER
STATES, BUT I WOULD SAY THE CONCLUSION IS CLEAR THAT WE
NEED TO DIVERSIFY THE SUPPLIERS. WE NEED TO BRING ENOUGH
INVESTMENT TO DEVELOP THE POSSIBILITY OF DIVERSIFICATION
OF SUPPLY CHAIN FOR OUR KEY INVESTORS. >> SPEAKING OF THE CORNERSTONE
OF EUROPEAN POLICY, THERE WAS A STORY THAT SUGGESTED THE COST
OF THIS COULD GO INCREMENTALLY TO 700 SENIOR.
THIS IS FROM THE PRIVATE SECTOR. I DO WONDER, THAT BILL GOES IN
CRESCENDO EVERY THREE MONTHS. WHY IS THERE THIS BIG GAP? A LOT HAS TO WITH PRICE
DEVELOPMENTS ON THE GLOBAL MARKET. WE HAVE SEEN WE CANNOT AND AND. -- BE DEPENDENT. WE NEED TO MAKE SURE WE ARE
MUCH MORE INDEPENDENT. DO YOU THINK THE EUROPEAN
TAXPAYER WILL STAY WITH YOU ON THE DEAL? >> WE HAVE TO BE CAUTIOUS ABOUT
THE FACT THAT WE SHOULDN'T TALK ONLY ABOUT THE IMPORTANCE OF
THE GREEN TRANSITION, BUT HOW TO PROTECT THE MOST VULNERABLE
PARTS IN THE SOCIETY IMPACTED BY THE CHANGE.
I THINK GREEN AND SOCIAL HAVE TO GET TOGETHER AND GO TOGETHER.
OTHERWISE IT IS DIFFICULT TO MAKE THESE TRANSFORMATIVE
CHANGES IF YOU DO NOT HAVE ENOUGH OF THE PUBLIC SUPPORT.
GREEN IS GREAT, BUT IT HAS TO COME TOGETHER WITH A SOCIAL
POLITICAL METHOD. >> A FINAL QUESTION BACK TO THE
U.K. BECAUSE I KNOW YOU'VE LEFT THAT
CHAPTER OF YOUR LIFE, SO HERE'S MY QUESTION, YOU DO KNOW THERE
ARE REPORTS ABOUT THE CV TARIFF THAT COULD BE IMPLEMENTED TO
CARS MADE IN THE U.K. AND THE EUROPEAN UNION UNLESS
THERE ARE A NUMBER OF COMPONENTS MADE IN BOTH MARKETS.
THEY SAY IT COULD KILL MANY ELECTRIC VEHICLES.
DO YOU SEE POTENTIAL TO HAVE LEEWAY SO THIS DOES NOT GET
IMPLEMENTED? >> WE ARE PRETTY SURE THAT IF
WE WILL NOT GIVE OUR BATTERY SECTOR THE CHANCE TO GROW RIGHT
NOW, WE MIGHT NEVER HAVE IT. WE KNOW THAT THERE IS A CURVE
IN ACCEPTABILITY AND SALES WHICH WILL BE HERE BETWEEN NOW
AND 2026-2027 AND THE BATTERY SECTOR WILL NOT BE PART OF IT. THIS IS VERY IMPORTANT FOR US
BECAUSE BATTERIES WOULD REPRESENT 50% OF THE VALUE OF
THE CAR SO WE WANT TO GIVE EVERY CHANCE TO THEM TO PROSPER.
>> WOULD YOU RECONSIDER THIS TARIFF IF THE INDUSTRY SAYS
THIS IS GOING TO COST A LOT AND THE U.K.
GOVERNMENT SAYS, THIS IS GOING TO HURT US? >> WE ARE AFRAID THAT IF WE GET
SOFT ON THIS ISSUE IN THREE YEARS WE WILL HAVE THE SAME
DISCUSSION. I THINK WE HAVE TO PUT
EVERYTHING ON THE TABLE AND AS IT STANDS RIGHT NOW WE WANT TO
MAKE SURE OUR BATTERY SECTOR PROSPERS ENOUGH AND IT IS
BECOMING A PART OF THE VALUE CHAIN ACROSS EUROPE. >> THANK YOU SO MUCH, ALWAYS GOOD TO SEE YOU ON BLOOMBERG TV.
GOOD LUCK, WE WILL SEE HOW IT GOES. FRANCINE? FRANCINE: MARIA, THANK YOU SO MUCH AND
THE EU COMMISSION VP. THIS WAS A GREAT CONVERSATION
TRYING TO PUSH THE COMMISSION OR ONE OF THE PLANS FOR RAW
MATERIALS. ALSO ENERGY. IF YOU LOOK AT EMERGING
MARKETS, HOW MUCH IS THE POTENTIAL HIGH ENERGY PRICE A
DOWNER THE NEXT COUPLE OF YEARS? >> IT IS CURIOUS BECAUSE
FOCUSING ON EASTERN EUROPE WE HAVE MORE EXPOSURE TO THE
REGION THAN IN LIVING MEMORY AND A LOT OF THE FACT THAT
ENERGY PRICES ARE WELL-OFF THE HIGHS.
WE ARE SEEING A SMATTERING OF DOWNSIDE INFLATION SURPRISES.
WITH THAT IN MIND, WE HAVE QUITE A LOT OF EXPOSURE IN THE
BOND MARKET. ON THE CREDIT SIDE BETWEEN
LOWER INFLATION AND ALSO LESS GEOPOLITICAL FRICTION AND
GEOPOLITICAL FRICTION, A LOT OF DOLLAR BONDS, EUROBONDS,
SERBIA, MACEDONIA, ROMANIA ARE VERY INTERESTING. >> THANK YOU FOR JOINING US IS
ALWAYS. DON'T BE A STRANGER. IT'S BEEN WAY TOO LONG.
COMING UP, MEDA'S NEWLY LAUNCHED APP IS TAKING A.M.
AT TWITTER. THE NEW RISK FOR TWITTER NEXT. FRANCINE: THE META-FOUNDER MARK
ZUCKERBERG SAYS THREADS HAS REACHED 10 MILLION SIGN-UPS SO
FAR THIS MORNING. IT IS TAKING DIRECT AIM AT ELON
MUSK'S TWITTER, BUT IT IS NOT LAUNCHING IN THE EUROPEAN UNION
SO FAR. I HAVE TO SAY IT IS FANTASTIC.
HOW DOES THE FUNCTIONALITY COMPARED TO TWITTER. >> THERE IS WHETHER THE SOCIAL
GRAPH IS ABLE TO BUILD THE CONNECTIONS QUICKLY THAT YOU
WOULD WANT IN A SOCIAL NETWORK AND SO FAR IT LOOKS LIKE IT HAS.
IT IS SOMETHING OTHER WOULD-BE COMPETITORS HAVE STRUGGLED TO
DO. ON THE FUNCTIONALITY, THERE ARE
A FEW THINGS THAT ARE NOT QUITE THERE YET WHICH PRESUMABLY
COULD BE QUITE IMPORTANT. THERE ISN'T A DESKTOP VERSION.
FOR A LOT OF POWER USERS, THEY USE IT ON DESKTOPS.
THAT COULD BE A BIT OF A HURDLE. PEOPLE CONSTANTLY HAVE TWITTER
OPEN. THERE'S NO LIVESTREAM OR TWITTER SPACE EQUIVALENT.
THOSE THINGS PRESUMABLY WILL COME.
