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This is the Bloomberg Daybreet podcast.

Good morning. It's Thursday the 2nd of

April. I'm Caroline Hepka in London.

Coming up today, messaging conflict.

President Trump threatens to escalate

the war with Iran while saying the end

of hostilities is very close. European

allies feared Trump could defang NATO

over their refusal to support the

conflict in the Middle East. Plus, NASA

astronauts lift off on a trip to circle

the moon, taking them deeper into space

than anyone in history. Let's start with

a roundup of our top stories. 5 weeks

into the war with Iran, President Trump

has delivered a prime time address in

which he has said that US operations are

close to completion while also pledging

more aggressive actions. The speech

comes as the president is grasping for

an off-ramp in a conflict that has

quickly slipped out of control. But

rather than reassuring markets that he

could bring the war to a swift end, his

remarks appear to have rattled

investors.

>> We are on track to complete all of

America's military objectives shortly,

very shortly. We are going to hit them

extremely hard over the next two to

three weeks. We're going to bring them

back to the stone ages where they

belong.

>> Those comments sent the price of crude

soaring as stocks tumbled and treasury

yields climbed in tandem with the US

dollar. President Trump also said that

the straight of Hormuz would reopen

naturally once hostilities subside

without providing details as he offered

no concrete plan for reopening the vital

waterway. and he pledged to take more

aggressive measures if Iran does not

negotiate a ceasefire with the US.

>> If during this period of time no deal is

made, we have our eyes on key targets.

If there is no deal, we are going to hit

each and every one of their electric

generating plants very hard and probably

simultaneously.

We have not hit their oil, even though

that's the easiest target of all because

it would not give them even a small

chance of survival or rebuilding, but we

could hit it and it would be gone and

there's not a thing they could do about

it.

>> The president also did not present any

new arguments or explanations for the

war. instead reiterating his desire to

destroy Iran's military and nuclear

capabilities. Ahead of Trump's address,

Iranian President Masoud Peshkan took

the unusual step of releasing a letter

addressed to uh the Americans American

people arguing that his country has no

enmity with the US.

US allies meanwhile are meeting to

prepare a diplomatic outreach to Iran

which is starting to operate the

straight of Hormuz like a toll booth. A

Bloomberg investigation reveals how Iran

friendly tankers are being given secret

codes and charged around a dollar per

barrel of oil for safe passage.

Reopening the strait has become a key

priority for governments around the

world with UK Prime Minister K Starmer

pushing for talks. We're exploring each

and every diplomatic avenue that is

available to us. And the UK has now

brought together 35 nations around our

statement of intent to push as one for

maritime security across the Gulf.

>> The British leader has been a frequent

target of the White House for refusing

to join in the war. Those talks that

Starmer references are happening later

today here in London and the US is not

expected to be attending them.

European leaders meanwhile are concerned

that President Trump's threats to

withdraw from NATO could erode the

alliance at a critical moment in its

history. When asked by the Telegraph

newspaper if he would consider pulling

the US out of the treaty, President

Trump said, "Oh yes, I would say it's

beyond reconsideration."

In the same interview, the president

called the block a paper tiger and

criticized European members refusal to

send ships to unblock the straight of

Hormuz. NATO's supreme allied commander

for transformation Pierre Vanier says

the alliance must weather the storm.

>> A crisis is when your the the ties of

your car are flat. Uh a a shock is when

you hit a tree. We we are in a world

where hitting trees now it's a new

normal. And I think for an alliance,

it's a strong um a strong challenge to

be able to adapt at a very high speed to

these shocks.

Vanier added that it's a moment when we

need to have cool heads. His comments

came as the FT reported Trump had

threatened to stop supplying weapons to

Ukraine in order to pressure the

Europeans to join a coalition of the

willing to reopen the Strait of Hormuz.

The war in Iran has prompted a surge in

UK petrol prices. It's a development

which adds to the pressure facing Prime

Minister K Starmmer to help those

struggling with the cost of living.

Blue's TA Adabio has the story.

Truly unprecedented. That's how motoring

group the RAAC have described March as

fuel price increases. It's after a

record surge prompted by the conflict in

the Middle East led to the fastest

rising costs over a single month. Now

the situation has intensified calls for

the government to step in. Though Prime

Minister K Starmmer has acknowledged the

situation, he stopped short of

announcing any major new support during

a speech yesterday. By contrast, other

countries including Germany, Slovenia,

and Hungary have introduced measures

such as price caps and fuel tax cuts. In

the UK, both the main opposition

conservative party and pole leading

reform have called for plans to unwind a

reduction to fuel duty to be reversed.

In London, Ta Adabio, Bloomberg Radio.

The Trump administration is preparing to

outline a tiered system for tariffs on

steel and aluminium products. 50%

tariffs on a large number of derivative

products will be maintained while other

products will be tariffed at a lower 25%

rate and some will fall below that

level. Bloomberg understands that the

expected announcement could come as

early as today in response to push back

from American companies over widespread

levies posing difficulties for imports

into the US. The move comes a year after

President Trump announced his liberation

day tariffs. US imports from April to

December 2025 were down just 1.7%

compared to the same period a year

prior. And lastly, a crew of NASA

astronauts are going to be closer to the

moon than any other person than any

human in some 50 years. Here's the

moment that Artemis 2, the mission, took

off.

3 2 1 booster ignition and liftoff.

Good. Roll pitch.

>> Roger. Roll pitch.

>> Houston now controlling the flight of

Integrity on the Artemis 2 mission.

Round one.

So that was the rocket taller than the

Statue of Liberty taking off reaching

speeds of around 17,500

m per hour as it hurtled to space. Its

crew um is now set to travel further

into space than anyone in history and

fly by the moon surface in about 4 days

time. So those are our top stories. Of

course, President Trump made reference

to Artemis 2 uh and that uh takeoff that

that moon orbital trip in his uh speech

to the nation only a few hours ago. But

the main subject of the speech was of

course around Iran, talking about

hitting Iran extremely hard over the

next two to three weeks. Potentially oil

prices have surged on the back of that.

We are up 5.7% for Bren crude futures

again reversing the moves that we saw

yesterday. We're back to $106.91 for

brain food futures. Uh this as we see a

reversal in global stock gains that we

saw yesterday. The MEI Asia Pacific

index is down by 2.3% this morning.

Stock futures for Europe slumping 1.9%.

You have 10ear US Treasury yields

surging six basis points at 437 uh this

morning and the dollar also

strengthening 4/10en of 1% on the

uncertainty and really the message that

markets did not want to hear a potential

prolongation of the war in Iran. Well,

in a moment, we're going to bring you

the latest on the prospect of

escalations in that war. Plus, we'll

discuss German efforts to take on

alleged scammers in a fraud worth

apparently some 300 million euros.

Now, President Trump has returned uh to

rhetoric around bombing Iran back to the

stone ages and hitting Iran extremely

hard over the next two to three weeks if

there is no deal. It has rattled

markets. It has sent oil prices higher.

Joining us now to discuss is Bloomberg's

Washington Deputy Bureau Chief Laura

Davidson. Laura, very good to speak to

you and thank you for being with us.

It's only a few hours overnight of

course London time that President Donald

Trump gave that prime time address in

order really to sell the American public

on his Iran war. Is it any clearer to

you to the public when the war against

Iran on the US side will end?

Uh it is not at all clear and perhaps

even less clear than before the speech

um occurred. Uh there was a lot of um

optimism going into the speech that uh

he might may lay out a little bit more

of his thinking about um you know what

the the process would be to end this

war, what key objectives he's looking

for and uh you know if there are any red

lines that uh you know he's he's he's um

kind of drawing around uh this conflict.

Um instead we heard a lot of what he's

already said um even in in some mixed

messaging from him in terms of that he

you know plans to step up uh strikes on

Iran in the next two to three weeks uh

while also um talks ongoing which seem

quite at conflict. He also didn't

necessarily commit to to ending the war

within that two to three week timeline

as we've heard him say previously. So

this has uh been a uh you know sort of a

something that has really sparked a lot

of alarm both in Washington among

Republicans looking at the political

risk here and as we've seen um in

markets uh you know a real reversal of

some of the more positive trends we were

seeing earlier in the week. Uh you know

Trump uh you know in his uh speech you

know acknowledged some of the economic

pain um acknowledging that um gas prices

were up but said uh that those prices

would soon um decline as well as that

the stock market would would continue uh

to rise and we see a reversal there. you

know really as he was speaking we saw

the opposite of that if we saw you know

uh uh oil prices spiking and and and

stocks declining.

>> Yeah absolutely. Um the president is

also leaving the reopening of the

straight of Hormuz which is the main

economic challenge globally to others.

He talked about they must grab it and

cherish it. They can do it easily. I

mean one consequence of the war is is

the economic crisis for allies in Europe

and in Asia. Does that mean anything in

Washington? Is there diplomatic fallout

from that? Yes. This has been, you know,

one of the biggest reversals um on

Trump's part during um this whole

process of, you know, just a couple

weeks ago, his singular focus was on

reopening the straight of Hormuz, sort

of lambasting allies to to join the US

military in that um effort and he's just

in the you know, in recent days

suggested that he would end this

conflict uh without um there being any

sort of resolution on what happens with

the straight of Hormuz. uh we we've seen

um sort of other allies both in uh

Europe uh the Gulf region as well as

Asia sort of uh band together without

the US to sort of take on this task of

what uh next steps would look like

either diplomatic or militarily. Uh the

UK is convening a a a call uh today with

about 35 representatives um from

different countries to discuss exactly

what this this process would look like.

Um so we're seeing you know kind of with

the US and specifically not being

invited. So as the US has has um taken a

real hardline approach here, uh other

countries have decided to uh you know

sort of exclude the US from this talks

seeing that that may be an easier way or

at least a a more palatable way to um

approach the Iranians with some sort of

solution uh to open a waterway that's

critical to global trade that has been

effectively closed.

>> Yeah. Iran's response. Um, President

Trump's demands are maximalist and

illogical is is uh what we have heard uh

as a sort of reply from Iran. what hope

of diplomacy now if we don't know you

know when the war is going to end

>> even uh less optimistic than it was uh

you know a couple days ago um we saw um

the Iranian president put out this open

letter to the American public and I just

want to underscore how unusual of a move

that is uh uh from the uh Iran's part to

to not go through mediators to not sort

of have these behind the door

discussions but rather to put out

something uh that's public facing um

sort of intended to uh send a message uh

you know beyond just uh diplomats in the

White but to um uh ordinary Americans

saying that you know Iran is in a strong

position. You know the letter suggested

that uh you know that the White House

was using overly bombastic language and

and not being truthful with its own uh

people. And so this is you know sort of

a a you know a real um uh you know if if

Trump is punching them then Iran is

punching back here and saying look you

know we um are coming from this from a

position of strength. We don't see a

need to negotiate right now and uh we're

not going to to give in to to

strongarming.

>> Yeah indeed that letter was very

interesting. You can read the full thing

on the Bloomberg terminal of course

where we've printed it out for you and

it is addressed to the people of the

United States uh talking about Iran

being one of the oldest continuous

civilizations in uh human uh history and

going on from there to make the Iranian

case as you say just very briefly on

President Trump's approval ratings in in

all of this. Um, you know, I don't want

to ignore the absolute humanitarian

catastrophe that this is causing in the

Middle East, but tell us about the

approval ratings with midterms l uh

looming also for the US president. There

are a lot of warning signs in these

numbers uh for Republicans as they head

into the midterms. Uh you know, the

latest poll from CNN shows uh Trump's

approval rating um on his job

performance totally around 35% approval.

Uh which is not tip uh you know, it's on

the low end but not out of the range of

normal for him. Uh but what's a really

concerning number is that on his

handling of the economy is at 31%. Um

this is an issue that Republicans were

hoping to run on in the midterms out tax

cuts and and other uh the strength of

the economy. It's looking like uh more

Americans than not uh you know almost

from a ratio of 2 to1 uh don't approve

of of the way that Trump has steered um

the economic matters.

>> Yeah. Okay. So a very difficult picture

after President Donald Trump's address

to the nation a few hours ago. Laura,

thank you so much for being with me and

explaining it. That is Bloomberg's

Washington Deputy Bureau Chief Laura

Davidson. Really appreciate your time in

understanding what the president's

points were and how they've translated

into markets and into politics. I do

want to point to one story that I think

is also very interesting as a

consequence of this war in the Middle

East. We are in the middle of a global

tug of war for fuel. It's got to be said

Jack Whittleles and another number of

other Bloomberg reporters have been

writing about this. a 12,000 uh mile

journey showing the scramble for diesel.

You've got soaring fuel prices forcing

traders into these longer and really

strange journeys for cargos going on

these routes that they otherwise just

would not take and sort of wouldn't make

economic sense. Uh they quote in the

story that I want to highlight and I'll

put a link to it in our podcast show

notes. They highlight a Sparta

commodities trader saying Europe is

still short of diesel, but the situation

in Asia is so much more acute that

prices there are pulling barrels halfway

around the world. So there are some

really uh strange and difficult things

happening in the world when it comes to

getting hold of barrels of crude oil.

Stay with us. More from Bloomberg day

cube coming up after this.

Right. Right. Want to turn our attention

though to something different. Remember

5 years ago the collapse of Wire Card?

Well, Germany is taking on a global

payments scandal. Prosecutors say that

they have uncovered an alleged scam that

actually involves four German payment

firms. Joining us now is Bloomberg's EU

finance reporter Nicholas Comfort to

discuss this. Nicholas, good to have you

on the program. What are these

allegations and how have they actually

come to light?

Good morning. So, yes, back in November,

we had uh the German authorities say

that there was this 300 million euros or

more than€300 million euros in damages

to to credit card holders from around

the world who had been signed up to uh

um websites, porn or dating or streaming

websites, fake websites which they had

not wanted to sign up to because their

credit card details been stolen by three

criminal networks. And these networks

allegedly used um these these four

German payment companies. Um the

prosecutors and and the authorities at

the time, they were a bit short on

detail. But this deep dive that we've

done now and the story we put out today

shows that uh um really from the how the

players involved uh how it all started

with a a a client broker, a guy who had

introduced these payment companies to

lucrative customers from pornography,

from uh um from from gambling and other

types of uh of adult entertainment. Uh

and then uh how how they had sort of

this had been too good to pass up for

these payment companies. And when he got

arrested back in 2020 on a on a

different matter, they thought to

themselves, "Oo, uh, who is this guy

we've been doing business with?" And

they looked closer and then they filed

sort of suspicious activity reports to,

uh, to to to money laundering watchd

dogs.

>> Yes, that is interesting. Um, in terms

of the exposure, I suppose the reliance

on high-risk clients as they're called,

you know, as um, for the profits and

growth of these businesses. I mean how

has this all come about I suppose?

So German payment companies they uh they

were looking for an edge and they they

said to themselves we have a higher risk

appetite than uh than than payment

companies in other parts of the world

for example the United States whether

that was for regulatory reasons the the

watchdogs not looking as closely here as

they might be doing in other

jurisdictions or maybe cultural ones. uh

sort of pornography is not a taboo issue

in Germany for example, but they they

said this is this is a this is a niche

which we can use to really to to to well

initially to base our business on. But

it it even as they as they became bigger

as sort of as online shopping got got

more and more uh uh um became more

common, people used more cards uh

payments, this was still a really

important part of their business because

it was so profitable. Um they've now uh

ditched those clients that have the

payment companies. they um that because

of because of regulatory pressure um

also related to this particular

particular scandal but it was for the

longer time these these companies that

were trying to cast themselves as fintex

of tomorrow they were still very much

reliant on the business model of

yesterday

>> yeah that's interesting what do the

individuals and businesses say though

>> that's important yes so let's start with

the individuals uh so um there were uh

allegedly people at these criminal

networks there were allegedly people at

at the payment companies also who

cooperated according to to the German

authorities. Now in in our reach

reaching out to them the individuals

have their lawyers have either declined

to comment or they have not responded to

to our comments. One of the the the

executives who uh uh um allegedly was in

um involved in this uh he has uh denied

the allegations in correspondence with

the authorities but that's um to the

authorities. The companies, as I said,

they they they say they've they've

ditched clients. They they've no longer

work with high-risisk clients because

the regulatory pressure. You could argue

whether it's because they were jumping

or or or p or being pushed, but they

they no longer work with them. They say

that they're they're uh they they've

done the work to to remediate to to get

back in line with expectations.

>> But it's definitely cast a shadow over

the industry as it copes with other

challenges. for example, just those

post-pandemic uh growth expectations not

panning out.

>> This is Bloomberg Daybreak Europe, your

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