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>> Bloomberg Audio Studios, podcasts,

radio, news.

This is Bloomberg Daybreak Weekend, our

global look at the top stories in the

coming week from our Daybreak anchors

all around the world. Straight ahead on

the program, we look to some key

inflation data in the US. I'm Nathan

Hager in Washington.

>> I'm Caroline Hepket in London, where

we're looking ahead to talks in Paris

about sharing France's nuclear

capabilities with other European

countries.

>> I'm Doug Krer looking ahead to

legislative elections in Vietnam.

>> That's all straight ahead on Bloomberg

Daybreak Weekend on Bloomberg 1130 New

York. Bloomberg 991 Washington DC,

Bloomberg 929 Boston, DAB Digital Radio

London, SiriusXM121,

and around the world on

Bloombergradio.com

and the Bloomberg Business App.

Good day to you. I'm Nathan Hager. We

begin today's program with some key

inflation data in the US. The consumer

price index for the month of February

comes out on Wednesday at 8:30 a.m. Wall

Street time. For a look ahead to the

numbers and what they could mean for Fed

policy, we're joined by Bloomberg News

senior strategist Edward Harrison, the

author of Bloomberg's The Everything

Risk Newsletter. Ed, it's great to speak

with you. And of course, Edward, we just

got that big surprise on February jobs.

What's the risk of a market surprise on

the inflation front? Hey Nathan, I think

uh the risk is there certainly uh the

risk is probably less there for CPI uh

than it is for uh the PCE index which is

the one that the Fed really tracks uh

more closely given the fact that we have

this war in Iran. I think they might

look through some of the gasoline prices

and look towards the core, you know, not

including uh food, not including energy.

And so the numbers to look for are the

core for uh CPI, which is um the

Bloomberg economist uh estimate is at

2.4% on average and the estimates that

we have for the PCE core, however, are

3.1%.

So that's the number that to key in on

for this week because that's the the

highest number of of the numbers that

we're looking at.

>> Why are we seeing that dispersion, Ed,

between what the Fed keeps its eye on

and what really matters to the American

consumer, the the CPI number that we're

getting this week.

>> Yeah. Well, you know, I think a lot of

it has to do with the different measures

of uh that go in that play into those

particular indices. And what the Fed

said in the past is that the PCE number

is more reflective of the overall trend

of the economy. And one of the reasons

that they're using the core as the

number that they're watching more

closely is to rule out volatile food and

energy prices that irrespective of

what's happening in Iran are going to

move around irrespective. Um and so you

know they want to look at what's the the

trend level and if the trend level is

3.1%

it was 3% in the um in December which is

the last reading that we got for PCE

then that's really not a level at which

they would feel comfortable cutting

interest rates. Suddenly, we're we're

starting to think about, you know, an

extended hold and potentially the next

move being a rate hike, not a cut,

>> even after that surprise drop in jobs

numbers that we saw just this past week

uh in the February number.

>> Yeah. So, that number that we saw uh

this past week, it it it points to what

I would call stagflation light. That

means that not only do we have

inflation, but we also have slowing

growth. And this is something that's

very difficult for the Fed to deal with

because, you know, they're looking at

inflation and their ability to stop

inflation. But then when growth is

slowing at the same time, their hands

are tied because the inflation's already

elevated. If we do continue to to see a

prolonged conflict in the Middle East,

could that have knock-on effects on

overall inflation if we continue to see

energy prices elevated like they are

right now?

>> Yes, I think it could. Uh Nathan, I

think that if you have a protracted

uh conflict, it could add to inflation

expectations, not just for the next

year, but it could get you a sense that

inflation is is trending higher. Since

we already have this core PCE number

that I've been talking about at 3%

suddenly, you know, mindsets change and

and people start thinking this could be

in for the long haul as sort of an

inflationary number that that that we're

going to have. Let me just say, by the

way, that the we've been above the Fed's

target for 5 years now. So, we're

getting to a point where that that

inflationary mindset starts to creep in,

>> which raises the question I think you're

alluding to about whether inflation

expectations may be coming unanchored

now. Is is that what you're getting at?

>> Yeah, that's exactly what I'm getting

at. What we've seen thus far is that

inflation expectations haven't been u

unanchored that even in the beginning

stages of this uh particular conflict in

the Middle East uh you know if you look

at break evens that's the the the number

that gets you between inflation

protected securities and treasuries and

if you look at uh swaps rates in the

market that show you uh you know what

expectations are in 2 years or 5 years

you know the the the longer longer term

ones, 5 years, 10 years, those

expectations have remained uh solid. Uh

it's when those go off that the Fed is

most concerned.

>> Thank you, Ed. As always, that's Edward

Harrison, senior strategist at Bloomberg

News, author of Bloomberg's The

Everything Risk Newsletter. Let's take a

look now at some stocks making news in

the week ahead. I'm Nathan Hager joined

by Bloomberg Equities reporter Matthew

Griffin on another week where we're

going to see some pretty big names

reporting earnings starting on Tuesday

when we'll be in the cloud with Oracle.

Could we see a benefit for Oracle from

the AI spending boom? Matthew? Well,

Nathan, I think that is the question

that is going to be front and center of

investors minds because the huge outlays

on AI from Oracle have been greeted

enthusiastically on Wall Street in the

past and have been punished on Wall

Street. I mean, you just look at what

the stock did in 2024.

Uh, up 61% a 20% boost last year. All of

this AI spending, their move to position

themselves as an AI cloud provider made

Oracle a darling on Wall Street.

But after that, you have had questions

arise about what the return is going to

be on this spending. The stock's now

down about 50% from its September record

high. And you actually saw the shares

plunge in December after the company

raised its spending on data centers. So

they're reporting in a moment where this

is really a question

>> and they're reporting in a moment where

we've just heard in the last few days

that Oracle has plans to cut thousands

of jobs just ahead of this earnings

report. What more do investors want to

see from Larry Ellison's company?

Matthew?

>> Yes. I think they're going to be looking

again at this cost benefit payoff. I

mean, you have analysts looking for

revenue growth here. Uh, they see just

under 16 billion dollars of revenue

versus 14 billion in the year ago

quarter. And I think that's also at the

heart and center of whether these tens

of billions of dollars of capital

expenditure are going to pay off on the

top and ultimately the bottom line. You

know, you see that in the reports of

some of the Magnificent Seven companies

this quarter where again it's it's the

question not just of are you spending

are you an AI player but are you

generating revenue to fund those

expenditures the job cuts are actually

aimed at freeing up money to pay for

capital expenditures for the AI boom

that's what people familiar with the

matter have told us so again I think uh

investors are going to be looking for

both sid sides of the ledger there.

>> And we're going to hear another side of

the AI story, I think, probably on

Thursday when Adobe reports. I got to

think this is one of those stocks that's

been caught up in the question about

whether software companies are going to

be hit by the AI disruption.

>> Yes, Nathan. Adobe shares have tumbled

actually during uh what investors

analysts have started to call the SAS

apocalypse. this giant sell-off in

software stocks, uh, Adobe's shares. Um,

again, you think about this happening

in, you know, the last couple of months,

but these concerns have really been

swirling for a while. Adobe down about

20% year-to date, but actually got a

really lukewarm reception on Wall Street

back in December, even though they had a

pretty upbeat forecast. because you

already had people questioning, do the

numbers matter now if what you do can be

replicated by cheap AI tools. So the

commentary on that may be as important,

you know, whether the company sees

itself as shielded as any actual number

they report.

>> And hasn't there been a question as well

about whether the AI tools that Adobe

says it has are are going to have their

own payoff? It's been kind of dealing

with that struggle as well, hasn't it?

>> Yes, absolutely. Uh, so I was looking at

what analysts were saying and what Piper

Sandler says is investors are going to

be honing in on metrics related to how

much money the company is making from

AI. Now, they do see that the stock may

be derisked here. uh the company has

given guidance you know taking a step

back again the shares have slid and so

they actually see that there could be

some upside here if AI adoption is

better than expected but yes I think

you're absolutely right that's a key

question for investors

>> and along with those marquee names in

the tech space we're going to hear from

a big name in retail when Kohl's opens

its books I guess the question here is

how's the consumer doing

>> yes absolutely Kohl's is the latest big

consumer name uh they are uh estimated

to report next week and uh you know the

the question of the health of the

American consumer is really another

thing that's front and center for

investors minds as if they didn't have

enough to think about you know you think

about US unexpectedly shedding jobs uh

you've had this idea that consumers are

trading down but actually Kohl's so far

has held up against this backdrop up.

They raised their fullear outlook in

November

um because consumers had shown that they

were willing to spend on brands that

they really wanted. And so again, so far

Kohl's has been a relative winner here.

But I I don't think investors see that

as a guarantee and they're going to be

looking closely at consumer behavior and

I think again at the commentary from

executives about whether the consumer is

under pressure, what that looks like.

Yeah, another very busy week once again

on the earnings front. Thank you for

this, Matthew. Great having you on with

us. That's Bloomberg equities reporter

Matthew Griffin. And coming up on

Bloomberg Daybreak Weekend, we'll look

ahead to talks in Paris on spreading

France's nuclear umbrella across Europe.

I'm Nathan Hager and this is Bloomberg.

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>> This is Bloomberg Daybreak Weekend, our

global look ahead at the top stories for

investors in the coming week. I'm Nathan

Hager in Washington. Up later in our

program, we look ahead to legislative

elections in Vietnam. But first,

Europe's defense debate is entering a

new phase. For decades, the continent

has relied on the US nuclear umbrella.

But with war on Europe's borders,

escalating tensions in the Middle East,

and growing uncertainty about America's

long-term commitments, that calculation

is shifting. It's a conversation that

exposes deep divisions across the block

over defense spending, strategic

autonomy, and how far Europe should go

to secure itself. On one hand, countries

like Poland want to ramp up efforts

aggressively, whereas Spain sees no need

to meet US set NATO targets. Next week,

European diplomats gather in Paris to

discuss whether France's nuclear

deterrent could play a broader role,

including the possibility of stationing

nuclear capable jets in allied

countries. Let's get more from Bloomberg

Daybreak Europe anchor Caroline Heepker

in London.

>> Nathan, in Europe, only France and

Britain have access to nuclear weapons,

but that may be about to change. The

wars in the Middle East and in Ukraine

and Europe's relationship with the

United States has made other countries

think again about their nuclear options.

Next week, talks start in Paris about

hosting nuclear capable jets in allied

European countries. It's part of a wider

conversation about how Europe defends

itself. Those discussions have only been

accelerated by events in Iran. Well,

joining me now to discuss Bloomberg's

Pot Scolamowski, who runs our coverage

of economies and governments in Central

and Eastern Europe from Warsaw, and

Rodrigo Oria, our bureau chief in Spain.

Welcome to both of you. Thank you for

being with me. I want to get a sense of

how your two different countries

represent really opposite sides of the

debate inside the EU on defense

spending. Pota Poland has expressed this

wish for more autonomous capabilities.

Does that mean nuclear weapons?

>> Yes, indeed. So that's probably what

Polish leaders have been trying to say.

Um and we've been hearing it for quite

some time. So even the previous

president Andre Duda expressed this

interest in Poland acquiring or taking

part in what's called nuclear sharing

program with the US. the the idea was

rebuffed, but then now it's coming back

and the new president said just last

month that that he would be in favor of

Poland looking at developing its nuclear

uh weapons. Uh we heard from Prime

Minister Tusk as well um earlier this

month pretty much saying we eventually

Poland will look at developing these

autonomous capabilities meaning nuclear

bomb. Whether and when it's going to

happen, it's obviously nothing imminent

at this point. what Poland is looking

at, that's what what the government

seems to be focused on is is working

with France. They they already have a

treaty with France that was signed last

last year that sort of stipulates the

possibility of working together in in

sharing uh capabilities. Uh and Tusk was

really enthusiastic right from the start

when uh when when Macron floated this

idea and again repeated it now during um

uh recently that um that that uh France

will be willing to share um its its

nuclear capable uh jets and stationed in

other countries. So they're they're

definitely willing to take part in that

um in that uh endeavor. A and of course

this is as Poland uh spends a great deal

is is a significant defense spender in

Europe. Yes indeed. So so obviously that

comes on top of the fact that that

Poland is spending almost 5% of of GDP

on on defense. There is obviously this

this certain um difference of opinion

between the president and the prime

minister how the money should be spent.

Uh Polish president is very much in

favor and and he's been endorsed by

Donald Trump. He's very close to to MAGA

movement in the US and he's all in favor

of of Poland spending money on in US as

it has been spending previously um to

buy weapons. Uh on the other hand,

Polish prime minister is is definitely

gravitating towards some form of

European solution when it comes to

defense spending and he he thinks in

terms of if US is is really diverging

and trying to decouple from uh from uh

from Europe then then Poland should take

part in in trying to work on on some

form of of joint um solutions when it

comes to to defense in Europe. So that's

where the differences are. But it does

not impact the fact that you know where

where we have the consensus the fact

that we need to spend more and more.

>> Yeah indeed. Uh it's quite a different

picture though with different ideas in

Spain. Rodrigo Spain's leader Pedro

Sanchez is increasingly seen as one of

the most aggressive voices pushing back

against the war in Iran. I suppose I'd

like to understand from you firstly why

that position that Spain has taken.

>> So that position is not um totally

surprising given his position on other

issues in recent years. He also took a

contrarian if you want position uh

compared to other western countries when

it came to Israel and Gaza. and he his

government also took a very strong

position against increasing um the NATO

spending targets. So this is kind of you

could say the third within that that

trend. The third time he does something

like this. In this specific case what

the government has argued is that the

military bases that the US operates from

in Spain, there are two of those.

They've been used for over 50 years and

the and and they're ma mainly used as u

logistic support spaces for refueling

and things like that. And the government

has the Spanish government has said

those bases cannot be used for any

attack operations. So they don't want

the bases to be used for American

military to use as a touching stone to

attack Iran. Now what is the argument to

justify that? What they're saying is

that the attack against Iran has been um

unilateral from the attackers Israel and

and the US and that it h has not been

framed within the UN charter or any

international laws. And so they are

saying that any operations of this

scale, any wars of these of this scale

have to follow international law and

that they cannot allow their bases to be

used in operations that are outside uh

the international order and that is the

government's uh official line on this

issue that they want to follow the rules

and that the Americans are not following

them and therefore they cannot partner

with them.

>> Okay. I mean there has been in some

senses a similar sort of difficulty for

the UK. Kama the prime minister here

talking about allowing um US military to

use British bases for defensive strikes

against Iran. But a debate about what

that actually means. Look in terms of

Spain I mean again Pedro Sanchez's view

sort of chimes also with the fact that

Spain has not really galvanized defense

spending. It's been quite resistant to

that idea of spending a great deal more

which has been what President Donald

Trump has wanted. Why that thinking do

you think in Spain Rodrigo?

>> Yes. I mean quite resistant I think is

in fact an an understatement because

they are the only NATO member that has

said we are not going to do this and

there is no way we're changing our our

position. And while everybody else has

gone to the 5% target set that the

Americans came up with, they have said

that they're sticking to one uh 2.1%.

There are two arguments for this are one

that with 2.1%

they can meet all the the demands and

all the needs all the requirements for

defensive spending. What they are saying

is that the 5% number was kind of pulled

out of the blue and that there is no

actual justification for it. There is no

explanation as to why that's the magic

number. And that if you look at the

military needs at weapons and and all

other kind of military needs, you can

cover those with 2.1% in Spain's case.

And that's the main one. The other one

is that if you go up to 5% you have to

start pulling money out of other

expenses, other parts of your budget.

And that going up to 5% without an

explanation as to why you're going to

that number means that you'll have less

money for things such as social welfare,

healthcare, education. That is the

government's official uh line on this

and that is their position. If we have

to put money into this, we'll have to

take it out of other places and there is

no reason that has been given to us as

to why we have to do that.

>> Okay, so that's the Spanish view.

Meanwhile, back to Poland, Pa. Um, what

about these nuclearpowered jets? Because

there's discussion about having nuclear

capable fighter jets being stationed

elsewhere in Europe, not for Spain, but

Germany, the UK, Belgium, other

countries, and also Poland are looking

at this. you know, Manuel M's been

talking about it and and there's going

to be a meeting to discuss this. What do

you think might emerge from that?

>> Yes, indeed. So, Tusk has been very keen

on on the idea right from the start when

it was first floated, I believe last

year, and then obviously now officially

sort of communicated by by Macron. So

indeed there's a there's a meeting um in

Paris um uh nuclear um about nuclear

energy but what Tusk also said is that

we assume on on the sidelines of that

meeting there's going to be more

consultations going on about about this

idea. He also mentioned that uh when it

comes to this this plan uh he will be in

touch or or will be communicating with

with other allies especially from the

Nordic region where cooperation between

Poland and Nordics and and all the

countries around the the Baltics have

been growing tighter. Um there's

definitely willingness on the on the

Polish side to um to engage in that that

plan. uh clearly the experience that

they had with with the previous idea of

nuclear sharing with with the US which

was rebuffed told them that at least

that route is closed and and it sort of

speaks or or fits very nicely in in how

the the the government sees its

cooperation or how it it wants to build

its its defense. Um it sees the the US

sort of disengaging although it wants to

keep us close still. We Poland still

hosts 10,000 around 10,000 troops on its

soil, but but it wants to to have or be

part of the of the cooperation with

Europe and and sort of the fact that

that these clear enabled or capable jets

will be stationed in Poland is very much

something that that Poland will be keen

on. But obviously the de devil is in the

details. It's it's hard to say how

quickly it could be done. And the other

question is is purely political in that

sense. Um, obviously France is going

into election next year. Emanuel Mccron

is not running in this election and and

the polls show that far right could

could take power and that's a big

question mark for everyone in Eastern

Europe as a matter of fact. So if we

commit to that idea, what happens next

after Macron is gone and would that plan

change and if we overcommit would that

mean US uh will not be willing to to

work with us on on that project in the

future. So, so there's a lot of um

issues here to to consider before it all

happens.

>> Yeah, I think it's going to be

interesting to see where this issue

leads. Thank you so much to both of you

for joining me. Boomberg's Rodrigo

Ouela, our bureau chief in Spain, and

Pet Scolyki who runs our coverage of

economies and government in Central and

Eastern Europe are joining me from

Warsaw. really appreciate your time as

we'll bring you full coverage then of

what happens next with the discussions

around this advanced deterrence, the

idea of these nuclear capable fighter

jets maybe being stationed uh across

Europe uh not just in France. We'll see

where those uh discussions lead. I'm

Caroline Hepka here in London. You can

catch us every weekday morning for

Blueberg Daybreak Europe beginning at

6:00 a.m. in London. That's 1:00 a.m. on

Wall Street. Nathan,

>> thanks Caroline. And coming up on

Bloomberg Daybreak Weekend, we turn to

Vietnam where legislative elections are

set to take place. I'm Nathan Hager and

this is Bloomberg.

So, there's a lot of noise about AI, but

time's too tight for more promises. So,

let's talk about results. At IBM, we

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can use AI to fill their HR questions,

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where it actually pays off. Deep in the

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create smarter business. IBM. This

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This is Bloomberg Daybreak Weekend, our

global look ahead at the top stories for

investors in the coming week. I'm Nathan

Hager in Washington. We go to Vietnam

next where legislative elections are set

to take place. For more, let's check in

with Doug Krer, host of the Bloomberg

Daybreak Asia podcast. Thanks, Nathan.

Next weekend, voters across Vietnam will

be going to the polls and they will

elect deputies to the 16th National

Assembly along with members of the

people's councils. And then on April

6th, Vietnam's National Assembly will

convene. To help us understand what to

look for, I'm joined by Bloomberg's

Franchesca Stevens. She is our Vietnam

bureau chief. And Francesca joins us

from Hanoi. Thank you so much for being

here. As we know, Vietnam is a communist

country with one party rule, not unlike

China. Help us understand what this

election means for Vietnam.

Um so the background to this is in

January we had the Communist Party

Congress and that was when Tolam, the

party chief got um elected for a full

5-year term as party chief. And we also

understood at the party congress that

was when he was put forward to take the

position of president as well. And so

what we'll be watching for when the uh

National Assembly meets is if that uh

dual position is confirmed um and that

will be a significant move for Vietnam,

the first time uh in many years that the

president and party chief has been put

forward at Congress and then backed by

the National Assembly. So Tolaman had

previously held the presidency and uh

the party chief position but only on a

temporary basis and his predecessor

Winfu Chong had also held it on a

temporary basis. So that's one of the

big things that we're we're watching out

for when the uh National Assembly meets.

But it's also when um we'll find out who

the new prime minister will be. Um again

at party congress in January we had

heard that laying hun had been tipped to

be the new prime minister and he's

currently head of the central

organization committee. Um so we're

watching to see if that position is

confirmed as well. Before Christmas,

there were many uh different rumors

flying around in Hanoi as to who would

be getting the different positions. But

as we get closer to April the 6th, we're

all watching to see see what happens

there. And then once the National

Assembly confirms who's in the top

positions, we'll start to see more of

the policy steps unfold for Vietnam over

the next uh next few months. I'm curious

about the way in which the economy has

been impacted by US tariff policy and

whether that has necessarily been a

negative. I know that over the years a

lot of manufacturing moved out of China

into places like Vietnam and for a while

it seemed as though Vietnam's economy

was a beneficiary of that derisking from

China. Can you talk about the overall

impact and what it's been like for the

Vietnamese economy? It was a roller

coaster uh for Vietnam trade talks last

year. We were all shocked when we saw

the 46% tariff that was first announced,

but Tolam won Claudit here for his his

quick response and jumping on the phone

with Donald Trump and then we saw that

reduced to a 20% deal announced by

Donald Trump on his truth social in

July. Um but crucially with a 40% tariff

on any goods deemed to be trans shipped

through the country all through the year

the uncertainty over what was happening

with the trade talks and how that would

impact exporters was a was the key

economic theme here. There were at least

six rounds of trade talks um with teams

of negotiators flying out to DC on a

fairly regular basis and Vietnam making

multiple pledges to buy uh more American

goods um in an effort to reduce the

trade gap between the two. The two sides

were said to have moved on from the

initial sticking points which were

around transshipment and how you define

that and rules of origin. Um and we

understood that the focus had moved to

areas such as intellectual property

sovereignty enforcement. We also saw the

the trade minister replaced in the

process of the talks in a sign of the

frustration in Hanoi at how they were

going. But despite all of that,

Vietnam's exports to the US uh only

continued to grow last year and the

massive trade gap that had initially

caught Donald Trump's eye and continued

to get bigger. Um so on the trade deal

front we now expect to see a long slow

walk on that front and it's actually

hard to see whether one will now

materialize after the US Supreme Court's

decision. And so from the economic

perspective you know we were expecting

to see exports slow down and and

actually in in contrast Vietnam defied

that.

>> So what's the picture on sentiment right

now? Is there a sense of optimism?

there is this huge growth story and even

if it doesn't reach 10% I think that the

the trajectory for Vietnam over the next

few years still looks hugely positive I

mean last year it was 8.02% 02%.

And we see so much manufacturing

activity in the northern provinces. Got

your Foxcon, your Lux share, um your

Gatech making Apple AirPods and iPads

and watches and you know Samsung making

around 60% of its phones here. So there

is this sort of huge boom in activity.

There is a lot of bullishness around the

direction that Vietnam is going in from

an economic perspective and and the

growth potential here. But of course, we

are also at risk from what what happens

in the rest of the world and you know

seeing what's happening in the Middle

East at the moment you know how that's

going to trickle through and impact us

here. What happens in the US has a has a

huge impact on on what happens here in

Vietnam. It's the biggest export market

for for Vietnam and and exporters and

the business community know that that

Vietnam needs to keep that keep that

market open but also manage relations

with China. It's you know it's just over

the border in the north. Vietnam imports

a huge amount of its raw materials and

production components from from China.

In fact, it's you know it's Vietnam's

largest trading partner. So it's heavily

reliant on China for uh maintaining its

manufacturing driven growth as well. So

there's just this this this you know

fascinating story here around this

domestic growth story but also um a

nation that really sort of sits in this

kind of key JO political position which

is a position that it wants to expand

further as well I think.

>> What about the equity market in Vietnam?

Last October, as I recall, Footsie

Russell upgraded Vietnam's market from

frontier to secondary emerging status.

How is that expected to impact the

market?

>> Yeah, so the the decision was announced

last year, but it doesn't actually come

into effect until September this year,

and in fact, there is actually an

interim review taking place in the next

few weeks. Um, we don't expect there to

be any issues with that interim review.

the government has taken a a lot of

different steps to try and make sure

that that process goes through. Um in

just a few weeks ago, the the government

moved to um allow foreign investors to

trade through global brokerages directly

instead of with local firms and and

again that was one of the steps that um

Footsie Russell had been had been

looking for from uh from the government

here. It's been quite the wait for

Vietnam to get here. They were first

added to the watch list for potential

reclassification back in September 2018.

But since then, big steps have been

taken to bring the market into line with

global standards. That's included things

like removing the requirement for

overseas investors to fully preund

equity trades and establishing a formal

process for handling failed trades. Um

so there are various um estimates of how

much uh foreign capital that should

attract when the when the decision goes

through in September. Various estimates

from around 3 to five or six billion in

um in foreign capital inflows. Um but

obviously we're waiting to see what

happens when that upgrade happens in in

September.

>> Francesca, we'll leave it there. Thank

you so very much. Francesca Stevens is

Bloomberg's Vietnam bureau chief joining

from Hanoi. We go to Australia next

where in the last week Goldman Sachs

held its Australia week alternatives and

macro summit. It was there that we

caught up with Goldman CEO David

Solomon. He spoke with Bloomberg's Heidi

Strad Watts. Heidi began the

conversation by asking Solomon for his

views on the Chinese markets. Here's

what he had to say.

>> China's one of the largest economies in

the world. It's going to continue to be

one of the largest economies in the

world. You know, at the moment, I'm very

focused on the bilateral relationship

between the US and China. I'm looking

forward to President Trump's visit with

President Xi that's planned for later

this month, the beginning of April.

It'll be interesting to see what comes

out of that. And, you know, whether or

not China and the US can make more

progress, you know, on their bilateral

relationship. I think that's important

for growth in the world, and I think

it's important for both the US and

China. And I think at the moment that's

fragile. And so, I'm very curious to

see, you know, how that progresses. In

the meantime, Chinese markets have done

very well in the last 12 months. That's

increased capital flows, you know, into

the region. We obviously participate in

that, but we're going to watch those

bilateral meetings and progress in the

bilateral relationship very closely.

>> What would you like to come out in terms

of deliverables from

>> I'd like to see, you know, more

certainty and clarity around um how the

bilateral relationship will work going

forward. I think there are things that

the US wants or things that China wants.

I'd like more clarity around what that's

going to look like, you know, not just

in 2026, but, you know, over the coming

years. And I think that's still

relatively uncertain.

>> What are we not talking about enough?

Um, I know we've talked a little bit

about private credit. You don't think

it's sort of a systemic risk at this

point?

>> Um, I I think credit formation

um around the world is really correlated

to, you know, economic growth and

economic activity.

I do think that we've gone if I just

look at the US market which is obviously

you know a very when you talk about

private credit a very very large market

in the context of private credit we've

gone a long time without a credit cycle

we've gone a long time without a

recession I do think when you have these

longdated cycles there are variety of

things that happen one credit spreads

narrow two lending standards people have

more capital to play they get aggressive

lending standards deteriorate a little

bit due diligence standards deteriorate

and so we're watching very closely to

see if there's been a little bit too

much aggression, frothiness in those

markets. But fundamentally, when you

look at the underlying credit

portfolios, particularly below

investment grade credit, while there

have been a bunch of idiosyncratic

events where there have been problems,

the broad portfolios are performing

reasonably well. Why are they performing

reasonably well? Because the economy is

doing fine. And it's very hard to have

broad underperformance in a broad

diversified credit portfolio if the

economy is doing well. When we do have a

slowdown in the economy, you will see

it. I think because of the length of the

cycle, you probably will find places

where the losses are higher than people

expect. We're very very focused on back

leverage and things that could affect or

amplify in a more difficult economic

environment, you know, credit

deployment. But at the moment, when you

look broadly across portfolios, we're

not seeing things that are super

concerning. That's a completely

different issue than retail

participation and retail investors

wanting liquidity from what are

fundamentally illquid products. And so

that's getting a lot of attention, but

that's different than the underlying

credit portfolios. But I do think that

when there is a slowdown in the economy

or we do get to a place where we have uh

you know a recession, you're you're

going to see losses in credit portfolios

and you know those losses could be

meaningful. But you know we'll watch

that closely while the economy is

chugging along. You know that's that's

not the primary focus.

>> That was David Solomon Goldman Sachs CEO

speaking with Bloomberg's Heidi Strad

Watts in Sydney. I'm Doug Krer. You can

catch us weekdays for the Daybreak Asia

podcast. It's available wherever you get

your podcast. Nathan, thanks Doug. And

that does it for this edition of

Bloomberg Daybreak Weekend. Join us

again Monday morning at 5:00 a.m. Wall

Street time for the latest on Markets

overseas and the news you need to start

your day. I'm Nathan Hager. Stay with

us. Top stories and global business

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