[music]

Bloomberg Audio Studios podcasts radio

news.

This is the Bloomberg day podcast. Good

morning. It's Wednesday the 15th [music]

of April. I'm Caroline Hepka in London.

>> And I'm Steven Carol in Brussels. Coming

up today, [music] as the US and Iran

seek more talks, European economies are

counting the cost of the energy crisis

caused by the war. The US Treasury

Secretary says President Trump's tariff

rates could be restored by July.

>> Plus, 50% of the time, it's right every

time. Research suggests AI chatbots only

give right answers to half of medical

questions.

>> Let's start with a roundup of our top

stories.

>> The United States and Iran are looking

to arrange a second round of peace talks

in the coming days. According to the New

York Post, the President Trump said

talks could resume over the next 48

hours in Pakistan. This comes as America

presses ahead with a naval blockade of

the Strait of Hormuz to curb Thran's oil

exports. However, the US president told

Fox Business uh that he still foresees

hostilities coming to an end shortly.

>> I think it's close to over. Yeah. I I

mean, I view it as very close to over.

You know what? If I pulled up stakes

right now, it would take them 20 years

to rebuild that country. And we're not

finished. We'll see what happens. I

think they want to make a deal very

badly.

>> Trump separately told ABC News that he

is not considering extending the

ceasefire beyond its expiration on the

22nd of April. Despite the optimism,

French President Emanuel Macron and

British Prime Minister Kier Starmer will

host a video conference from Paris on

Friday with countries willing to help

restore free transit through the

Straight of Hormuz once the war is over.

The Wall Street Journal reports that a

European plan is likely to include

Germany, which the paper says could

outline its commitment as early as

tomorrow.

The ongoing wrangling over a possible

deal to end hostilities and restore

access to Gulf energy supplies comes as

the International Monetary Fund has

downgraded its economic outlook.

Assuming the conflict is relatively

short-lived, the IMF now expects global

growth to rise by 3.1% this year. That's

compared with a 3.3% forecast back in

January. However, the fund warns that in

a more severe scenario where oil prices

average $110 over the year, global

economic growth would then fall below

2%. The Citadel founder and CEO Ken

Griffin has been echoing that sentiment.

Here are some of the key points he made

while attending the SEM for World

Economy 2026 summit.

>> We have a classic energy price shock

unfolding across the world as we speak.

That of course will create demand

destruction. It will cause economies

across the world to to decelerate. The

risk of a recession has increased and

central banks are making some really

difficult decisions. This really is a

very very treacherous moment for the

world economy.

>> That was Ken Griffin speaking. The

caution comes uh coming from the head of

one of the world's biggest financial

firms comes as the president of the

European Central Bank warned that higher

energy costs have pushed the Euro zone

away from the ECB's expected outlook.

Speaking exclusively to Bloomberg,

Christine Lagard had this to say.

you have to look at, you know, the price

of the barrel, uh the price of the

various categories of fuel, uh the price

of futures and all of that applied to

gas as well to determine where we are

exactly relative to these two. But we

are somewhere I think in between the

baseline and the uh and the adverse

scenario.

Well, asked whether that means that the

ECB now has a bias towards tightening

monetary policy, Lagard said it does

not. However, she added that the

economic crisis brought on by the Iran

war means an early exit from her role is

not an option.

>> When there is big clouds on the horizon,

the captain does not leave the ship. And

this captain is not going to leave the

ship because I see clouds.

Christine Lagard spoke to Bloomberg as

traders bet on two full quarter point

rate hikes by the ECB this year with

about a 30% chance of a third.

Britain will suffer the largest economic

shock of any G7 country from the Iran

war and will struggle to cushion the

blow. That's according to the

International Monetary Fund, which cut

its forecast for UK GDP growth this year

by half a percentage point. The IMF's

chief economist, Pierre Olivier

Goransha, says the UK is being worst hit

because of its reliance on energy

imports. Now, a lot of this gas is

produced domestically, but there is

still a part of it that is imported and

the part is imported is at market

prices. It's much more expensive and

that kind of sets the price for energy

in the UK.

>> Ghau downplayed the prospect of a 1970s

style wage price spiral due to weak

domestic demand. The IMF warned that

Britain's fragile fiscal position means

the chancellor can't afford new

household support without tax rises or

spending cuts. The UK government

yesterday sold 10-year bonds at the

highest yield since the 2008 financial

crisis. Well, the economic downgrade

comes as Britain's politicians are using

increasingly angry rhetoric about the

US's role in starting the war.

Chancellor Rachel Reeves told the Mirror

newspaper, "The war is hurting

households.

You know, I feel very frustrated and

angry that the US went into this war

without a clear exit plan, without a

clear idea of what they were trying uh

to achieve, and as a result, the

straight of Hammuz is now blocked.

>> Reeves didn't set out any support for

households in the interview, which was

done ahead of her traveling to the IMF

and World Bank meetings in Washington,

DC.

The US Treasury Secretary says President

Trump's tariffs could be restored by

July. Speaking at a Wall Street Journal

event yesterday, Scott Bessant indicated

levies could return to the levels that

were in place before the Supreme Court

struck many of them down. We had a

setback at the Supreme Court in terms of

the tariff policy, but we will be

implementing or conducting section 301

studies so that the tariffs could be

back in place at the previous level by

beginning of July.

US Treasury Secretary Scott Bessent

adding that because the section 301

tariff authority has already been tested

in the courts, business leaders are able

to start making decisions about capital

expenditures. After the Supreme Court

struck down many of his global tariffs,

Trump imposed a temporary 10% levy that

covers many imports which is due to

expire in late July.

>> And some breaking news this hour. The

Dutch chip equipment maker ASML is

forecasting lower net sales in the

second quarter of this year. The company

sees net sales of between 8.4 and 9

billion euros. It also slightly upgraded

its forecast for the full year. ASML CEO

Kristoff Fuk saying in the earnings

statement that demand for chips is

outpacing supply and in response our

customers are accelerating their

capacity expansion plans for 2026 and

beyond. So that in the ASML results

>> and AI chat bots are giving users

problematic medical advice. That's

according to a new study which

highlights growing concern about how

people are using generative platforms.

Bloomberg's TA Adabio has the story.

>> When researchers asked popular AI

platforms including chat GPT and Gemini

health related questions, they found

about half the responses given were

problematic. Findings published this

week in medical journal BMJ Open show

the chat bots performed relatively

better on closedended prompts and

queries related to vaccines and cancer.

Still, 20% of their answers were found

to be highly problematic. The results

shed light on an increasing unease about

the use of generative AI platforms which

aren't licensed to give medical advice

in health related contexts. Just one of

those platforms, OpenAI, says more than

200 million people ask its chat GPT

model health and wellness questions

every week. In London, Ta Adio,

Bloomberg Radio. And those are a few of

our top stories for you this morning.

Amazing how many people are asking AI

health related questions. Have to find

reliable sources for information, don't

you? Right, let's think about the

markets. Will this ceasefire extend into

something more permanent? Certainly

markets look a bit more optimistic about

the picture in uh the Middle East. So

Brent crude futures at the moment

trading at $9559 actually up only 8/10en

of 1% this morning. Stocks are also

rallying. Many markets have recouped

already the losses that they've seen

since the start of the conflict uh in

Iran and China CSI 300 index was the

latest to do that. The all country world

index is up by 210 of 1%. Having said

that, stock futures for Europe are down

about a tenth of 1%. bond markets, we

have seen yields spike. Will they fall

back? Questions about that. A blueberg

index showing the average yield on euro

high-grade bonds is at 3.65%. So that's

well above the 3.17%

average over the past 12 months. So big

question for bond markets this morning.

Those are the markets.

>> In a moment, we'll bring you more on

European plans to help shipping resume

through the straight of Hormuz. Plus,

why Europe's chemicals industry is

particularly vulnerable to supply

disruptions being caused by the Iran

war. But another story, or perhaps an

image that caught our eye this morning,

of a different kind of diplomacy in a

very volatile world. Finland's president

is visiting Canada on a trip that

includes plenty of weighty discussions

about Arctic security and issues that

both countries have with their

neighbors. But the images that you will

probably see around the internet this

morning are of the two leaders attending

a practice session with the Ottawa

Charge ice hockey team. Uh perhaps

unsurprising [laughter]

that Alexander Stub would be involved in

this. He's a triathlete. His athleticism

comes up in almost every conversation

that you may hear or read with him. Uh

but Mark Carney, I have to say,

surprised me. Also pretty adept on the

ice. Didn't know he was a big ice hockey

fan, but he is Canadian, I suppose. And

you know, it was an example not only of

uh world leaders who were also friends.

Apparently they text each other uh all

the time. Uh but also a photo call that

went right.

>> Can I just say because the potential for

this to go wrong was pretty high.

>> Yeah. Look, everybody played ball with

that one, I think. Uh yes, I suppose

being able to show that you have many

strings to your bow maybe is very

important for leaders. Look, I think

it's a really interesting dynamic,

right? Isn't it? Because what we're

actually thinking about is middle powers

working together. This was the idea that

Carney articulated in that now very

famous Davos address u middle powers

must act together. If we're not at the

table, we're on the menu. Remember that

line.

>> I also do want to read Stub's book

because again uh he's an international

affairs um you very knowledgeable on

that front. He's written a new book

rebalancing the new world order. But

yeah, the question over all of this, can

middle powers really, you know, sort of

step up in this new era?

>> We actually do have a podcast about that

middle powers call from Mark Carney as

well. You'll find it on your here's why

feed wherever you get your podcasts.

Well, let's bring you more now though on

the situation in the Middle East. While

the US Nan are seeking to set up another

round of talks, European leaders are

also coming up with their plan to

restore shipping to the straight of

Hormuz when the war ends. Our chief

Europe correspondent Oliver Crook is

here with us for more. Oliver, first of

all, who is involved in this plan and

what do we know about it?

>> So, the architect of this plan, the

originator of it is Emanuel M. He was

one of the first European leaders to

really discuss a day after force in

somewhere in the Persian Gulf in order

to sort of soothe uh the uh the

attentions of the shipping lanes, making

sure that ships had confidence in moving

in. But he was very clear from the very

beginning. This is not a offensive

military operation. This is a defensive

military operation and this is something

really for the day after. So there's a

meeting that's going to be chaired in

Paris by Emanuel Mak and Kier Starmer

with a number of different nations to

sort of put into effect what was

officially sort of formalized last week

after we got that ceasefire. We had a

signed letter from a number of European

leaders saying that they were willing to

put forward a force. But again, we've

had a great deal of difficulty pinning

down what exactly that force would be

doing. What we understand is they could

be contributing in ways such as sort of

mind sweeping. But again, it's to try to

give confidence to uh shipping in the

sort of wake of a peace agreement of

some kind or an extended uh ceasefire.

And that is going to be the discussion

that really uh is going to be happening

on Friday. There's a real question I

think also for the Europeans, what

diplomacy uh is being played here with

Iran. Are they talking to the Iranians

and in what degree? And of course, for

them, this is not really in their

control. So, I think what they're trying

to do is articulate a menu of options,

start to put that into sort of practice

and what those orders would look like

and then potentially so that they can

roll it out the day after. Again, we're

still very much in the day of.

>> Yeah. President Trump again this morning

has repeated his criticism of NATO uh

and he's been disparaging, for example,

about the UK's military. How do you

think all of this is likely to go down

with the United States?

>> I think it's uh hard to predict as ever.

I mean, we now have a sort of ret

retroactive sort of coalition of the

begrudging, which is something that I

guess Trump has been kind of

alternatingly asking for from the

Europeans and NATO. You know, one day he

says, "We really need NATO. We want

NATO. We want the Europeans involved."

The next day he says, "We really don't

need them and we really don't care if

they're involved and we're never going

to forget the fact that they were not

involved." And again, last week was

where we got and once again, President

Trump bringing up Greenland repeatedly.

This is often the way to sort of animate

the European allies into doing

something. So I think as much as the

Europeans obviously want to see a free

flow of ships within the Straits of

Hormuz, part of the audience here is

definitely Donald Trump.

>> Meanwhile, this is all happening at a

time that we've had yet another set of

warnings about the effect the war is

having on the European economy.

>> Yeah. So there are two things here,

right? There's the question of what the

impact will be in the future, how it

will bear on the ECB, and then the

impact that it's having sort of today.

So we can go through some of the

inflation data we've got over the last

couple of uh of weeks and months. So the

Euro zone, if you look at CPI, when you

look back from February versus March, in

March it went up to 2.5%, in February it

was at 2%. Germany, similar story. In

March came in at almost 3%, 2.8%.

Previously, it was bang on the ECB

target of 2%. France up to 1.8% from

1.1%. And when you look and you drill

down into the numbers, particularly for

the Euro zone, this is 100% an energy

story. You saw core, you saw services

that was still coming down. However, you

got that boost from energy. And when we

think about where Brent has been over

the last couple of months, I mean, in

the month of January, we were at 90 or

sorry, we say we were at $60 a barrel.

We came up to 120 just about. We're now

at about 95. That is a range that nobody

at the ECB is comfortable with. So, when

we think about the timeline going

forward, ceasefires been effect one

week. We get one more week and then the

week after that is when we get the ECB

rate decision. So, hopefully we'll get

some more clarity there. But again, as

we were just discussing a little bit

earlier, Lagarde really seeing the

downside risks beginning to materialize.

So that commentary will be absolutely

key in two weeks.

>> Yeah, it certainly will be. Thank you,

Ollie, for being with us. That is our

chief Europe correspondent, Oliver Krug.

>> Stay with us. More from Bloomberg

Daybreak Europe coming up after this.

Well, surging oil and gas prices due to

the Iran war are also putting Europe's

industrial economy under massive strain.

It's particularly acute in the

production of chemicals that go into

everything from food to painkillers. Our

German industry reporter Marilyn Martin

joins us now for more on this. Marilyn,

good morning. What sort of energy price

rises are chemicals producers seeing

because of the war and how is it

affecting their production?

>> Yes. So for chemicals, you mainly have

oil and gas as a feed stock. So you need

it as a feed stock and for energy um to

produce the chemicals. So they're of

course majorly hit by spikes in those

two commodities. Um the main thing is

that you have some commodity chemicals

which really depend to 70 to 90% on oil

and gas costs. So you can see that those

companies are now trying to pass on the

costs to consumers and customers. Um so

you see that for example with the

production of ammonia um they try to

pass it on and now you have like

agriculture sector which is being hit by

that because they have to bear the brunt

of like higher fertilizer prices. So you

can see that um while companies try to

pass it on we don't really know who are

able to. We saw a lot of price hike

announcements um but you don't know how

much will be traded on the spot market

how much is in contracts and how quickly

that will feed through to customers. But

overall because chemicals are everywhere

um you will see the effects for for

customer industries. Um yeah

[clears throat] sooner or later.

>> Yes that is very interesting that you've

gone through each of these sectors. What

industries which industries are being

worst affected then by these chemicals

getting more expensive.

>> Yes. So as I said they go into

everything. So you see that um across

the economy but one sector that is

particularly dependent on them is

automotives in Germany for example. So

while the chemical sector trades within

themselves for most of the products um

the end customer that you see is largely

like automotives for one quarter of

German chemical production and Germany

is by far the largest chemical producer

in Europe. So that's like one of the

sectors that will be hit hard. Then also

construction of course um but as I said

everything painkillers food you name it.

>> There have been many warnings Marlon

about the vulnerability of these

chemical supplies over recent years. Are

there any solutions to this?

>> The year is discussing some options. um

they have the critical chemicals

alliance so where they have a format

where they kind of see which kind of

molecules they want to they want to um

say are critical for Europe's resilience

and then classify as being able to

receive state aid or um do like

implement trade measures things like

that but this is all still on the table

and you have a rift between for example

France which would like to have certain

molecule groups for example ammonia

ethylene classified as critical and then

eligible for state aid or some other

measures. And then you have Germany as

yeah as I said the major chemical

producer in Europe which is really

opposing such measures and rather yeah

streng wants to strengthen like

framework conditions lower energy prices

bureaucracy you name it.

>> This is Bloomberg [music]

Daybreak Europe your morning brief on

the stories making news from London to

Wall Street [music] and beyond. Look for

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Bloomberg Daybreak Europe.

>> [music]