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This is the Bloomberg Daybreak Europe

podcast. Good morning. It's Tuesday, the

10th of March. I'm Steven Carroll in

Brussels. Coming up today, the Iran War

will end very soon. The US President

Donald Trump seeks to cool market and

political pressure as the conflict

continues. Oil prices tumble as traders

caution that Donald Trump's reassurance

won't be enough to get tankers moving.

Plus, inflated problems, governments and

central banks try to assess the impact

of the ongoing war on their economies.

Let's start with a roundup of our top

stories. 11 days into the war with Iran,

the US President Donald Trump says he

now believes the conflict will end very

soon. Speaking in Florida, he added that

he does not expect hostilities to end

this week, but that the US operation was

ahead of schedule

>> very soon. Look, everything they have is

gone, including their leadership. In

fact, there two levels of leadership and

even actually, as it turns out, more

than that, but two levels of leadership

are gone.

>> US officials have repeatedly insisted

they can sustain the conflict

indefinitely. However, Trump's remarks

signaled a desire to show that American

involvement will not be open-ended. At a

separate event, the president

acknowledged that there are still

unanswered questions surrounding

leadership in Thran.

>> Think of it. We had leaders and they're

gone. Then we had new leaders and

they're gone. And now nobody has any

idea who the people are that are going

to be the head of the country.

>> The comments underscored the challenges

ahead for Trump, who will need to

reconcile his promises of total victory

with the consequences of continuing the

war. More than 1,300 Iranians have died

in the war so far, according to an

official toll that has not been updated

for several days. Some 486 people have

died in Israeli strikes in Lebanon,

according to the country's health

ministry. Six people have died in the

UAE, while several deaths have been

reported in other Gulf countries. There

have been seven American casualties and

at least 11 Israeli deaths reported.

Oil prices plunged more than 10% after

President Trump's suggestion that the

war would end soon. In a further bid to

steady markets, Trump said the US Navy

would escort tankers through the

straight of Hormuz and that Washington

would wave certain oil related

sanctions. His remarks followed comments

from the EU economy commissioner

Valdastonkus who said the US had told

its G7 partners that any sanctions

relief for Russia would be temporary.

Even with those steps, Eric Vand

nostrand, CIO at Lazard Asset

Management, said crude remains

significantly higher than pre-war

levels. Oil markets might feel good

today because they eased off the the

highs we saw earlier in the uh earlier

in the US trading session, but we're

still in one of the bigger oil shocks of

the past couple years. Eric Van Nostrand

also cautioned that Trump's press

conferences have not been a reliable

guide to US policy in the past. The

president did not provide further

details on the tanker escort plan or the

scope of sanctions relief beyond saying

that he had discussed the issue with

Russian President Vladimir Putin in a

phone call earlier on Monday. Well,

meanwhile, Vladimir Putin has urged his

country's oil and gas producers to take

advantage of higher prices because the

spike will be temporary. He told a

meeting of energy executives they should

use the additional export revenue to

reduce their debts to Russian banks. It

came as Putin and Donald Trump spoke for

the first time this year. They discussed

the war in Iran as well as Venezuela and

the US-led peace talks between Russia

and Ukraine. Here's Bloomberg reporter

Michael Heath. Russia of course is in a

prime seat here because it it remains

sort of semi-allied to Iran yet it's

been quartered by the US president in in

a sense Russia is sort of in this swing

position of of winning it whichever way

it turns. Bloomberg's Michael Heath. A

planned round of peace talks with

Ukraine last week was postponed due to

the war in Iran with neither side

indicating when they will resume.

Airlines are reviewing their growth

plans as they consider how travel demand

and fuel costs are being affected by the

war. Bloomberg understands that plane

makers and aircraft leasing firms are

worried that some of their customers may

push back deals for new jets. Sources

have told us that some Gulf and Asian

carriers have put discussions on plane

purchases and leasing on hold as they

assess the financial impact of the

conflict. John Pearson, the CEO of

international courier service DHL

Express, has told Bloomberg his firm is

prepared for any change in oil prices.

We have a very established fuel

searchcharge mechanism that um that

aligns itself with oil price as that

goes up and down. It's been a recognized

standard within the industry for 20 or

if not 30 years. It's very transparently

communicated on our website to our

customers. Our customers are very

familiar with it. So we we ride these um

sort of waves of oil prices every day.

DHL Express's John Pearson there

speaking earlier this morning. Jeffre

says Boeing is especially exposed to the

Middle East almost half of the orders

for its upcoming 777XJet

and a third of the 787 Dreamliner

purchases from carriers in the region.

The Bank of England is facing the

prospect of UK inflation rebounding

rapidly due to higher oil prices. A

range of economists see CPI jumping to

between three and 5% depending on where

oil settles. Bloomberg's James Wilco has

more.

>> $66 a barrel. That was the spot oil

price back in February. The Bank of

England last met then and they thought

it would broadly stay that way. But the

volatility of the past week has called

that into question. Bloomberg economics

estimate if prices linger around $100 a

barrel and end the year at 80 that would

push inflation up nearly one whole

percentage point. That in turn would

have a major effect on both guilts and

UK mortgages would likely put the

government in economic hot water. In the

meantime, many assume the bank will be

cautious about any further rate cuts

when it meets next week given how burned

they were from the previous energy price

surge. In London, James Walco, Bloomberg

Radio. Russia's invasion of Ukraine

added to the problems for the commercial

real estate market. Investors are facing

up to another headwind for the sector.

Bloomberg's Yuan Pots has more. It's an

industry with valuations that are hyper

sensitive to interest rates. So the war

in the Middle East which has spiked

energy prices and therefore rate

increase expectations is a serious

headwind for commercial real estate.

It's a tricky backdrop for the industry

as key players gather in can for the

MPIN property conference. The year

started with signs of optimism that

bigger deals might be back on the

horizon after a sustained hiatus, but

two months into 2026 and it seems the

industry has another new problem to deal

with. In London, I'm Yan Pods, Bloomberg

Radio. And those are your top stories on

the markets. Oil prices lower this

morning, 6.4% for brown crude, $9242

a barrel at the moment. WTI is down

below $89 a barrel as well. Well, the

Msei Pacific index up by 3/10en, excuse

me, up by 3% this morning after

yesterday's sell-off. Euro stock 50

futures are 1.3% higher. The rubber

dollar spot out index is a tenth of 1%

weaker. And I'll just mention the

earnings out of Saudi Aramco this

morning, announcing a $3 billion share

buyback program and raising its

dividend. Investors, of course, focused

on how the company weathers the impact

of the war in the Middle East. It's been

rushing to rroot some exports as the

straight of Hormuz remains at a

standstill as well. It's been pairing

back output too because of fuller

storage tanks and shut uh the biggest

refinery in Saudi Arabia following a

drone attack as well. So those earnings

of interest from Saudi Aramco this

morning. In a moment, we'll bring you

more on why Donald Trump's comments on

the Iran war giving markets pause for

thought. Plus, do we still need to be

worried about the conflict driving up

inflation around the world? But first,

another story that caught our eye this

morning, reflecting on a wild day in

markets. Bloomberg opinion's John

Authors has been writing about the

remarkable moves that we saw in oil

prices yesterday, surging to almost $120

before swimming swinging back below $100

by the end of the day. And despite the

valley of headlines, John writes that

it's impossible to explain all of the

moves just with what the developments of

recent days. Sentiment, he says, plays a

big part, too. and some traders, he

writes, were evidently willing to panic,

but it's equally true that they weren't

comfortable leaving oil above the

landmark of $100.

So, he concludes that enough cool heads

are prevailing, at least for now. Of

course, the longer that the straight of

hormuz is closed, the more challenging

that might be as well. Um, and if you

wanted a lighter take on some of this

too, John's pieces, as usual, come with

a playlist. And he actually points out

there are relatively few songs about oil

that you can find. H he has picked out a

few though. You'll find that piece of

Bloomberg opinion and we'll put a link

to it in our podcast show notes as well.

Well, let's bring you up to date then

with events in the Middle East. Markets

appear to have been by the US

president's latest comments on the Iran

war. Our Middle East managing editor

Paul Wallace joins us now for more. So

Paul, we have seen oil prices come down

after Donald Trump said he believes the

war will end very soon. Does that look

likely?

>> Hi Stephen. You know, in some ways it

depends on what Trump wants. I mean,

yeah, he could end it very soon if he

decided that the US had done enough to

achieve his goals and presumably that it

had done enough for him to be able to

sell a victory to the American public. I

think that latter point is extremely

important for him um given all the sort

of chaos that this war has caused in the

Middle East and in global financial

markets. So yeah, if he decides that,

you know, he's not going to go for

regime change anymore, that he will

stick to pure military aims such as

severely degrading Iran's ballistic

missile and drone capability and naval

capability, then yes, he could end it

very soon or at least take it to the

next phase, which would presumably be

much less intense and would see some

kind of reopening of the state of of the

streets of Humuz and Gulf Arab states

being targeted less by Iran. on. So yes,

that is possible, but it depends so much

on what what Trump himself is thinking

and what he's willing to see as victory

and how much pain he's willing to accept

himself for the US economy um in in

terms of higher energy prices and all

that. And of course, at the same time,

Israel has been part of these strikes

too on Iran and also as we've been

reporting on on his linked targets in

Lebanon as well. If Donald Trump were to

decide that he wanted to end the war,

would Israel be willing to stop

attacking Iran as well?

>> See, that's a big question and and

there's certainly some strong thinking

and this ties in with plenty of public

comments from ex-Israeli officials and

all that that they don't and the

government even itself is sort of

implying this. It doesn't want this war

to end yet. It wants to degrade Iran

further. I think it is important to note

though that even Israel is sort of

softening its tone on regime change. It

was more hinting at regime change even

more firmly than the Americans were when

this war started on February 28th, but

it's pulling back a bit. So that might

be a sign that Israel itself no longer

thinks that regime change is possible.

And if that's the case, then maybe it

would just have no choice but to accept

Trump saying, "Okay, we're done. we're

we're stopping strikes on Iran. Now,

it's quite difficult to see a situation

where the US stops and says war's over

and Israel keeps bombing Iran on a

frequent basis. I'm sure Israel will say

it retains the right to do that at any

time if it if it sees a threat, but you

know, I don't think it would. It's

difficult to see it carrying on as it

has been doing in the in the last 10

days.

>> Okay, Paul, thank you very much. Paul

Wallace, our Middle East managing

editor. Stay with us. More from

Bloomberg Daybreak Europe coming up

after this. Although markets are

breathing a sigh of relief, at least for

now, over the prospects the war could

end, our central banks off the hook. We

saw yesterday how a huge surge in oil

prices led to a repricing of government

debt and rate move expectations. We have

Bloomberg opinion columnist Daniel Moss

with us now for more. Daniel, when we're

looking at things this morning versus

yesterday morning, the markets look to

be in a different place, but are the

inflation risks from the Iran war very

different, or do we just need to be

prepared for more price spikes?

Expectations on this are changing in

some instances by the day. So, you're

asking me, do things look very different

for central banks than they did

yesterday? Sure. But yesterday look they

looked very different from last

Wednesday when there was a major

meltdown on Asian indexes. What policy

makers would really love to be able to

do is to look through this and see what

of higher energy prices has embedded

itself uh in underlying trends of the

economy. It is way too soon to say that.

On the other hand, to make that bet,

they need to be confident hostilities

are going to end soon. Uh Donald Trump

has given mixed messages on this just in

the last 24 hours. What's it going to be

like in the next 72? Which central banks

need to be most worried about this? Is

it a much bigger problem in for example

South Korea than in the UK for the Bank

of England? Economies are coming to this

space right now where we are because

this is a movable feast at 2:15 p.m. in

Singapore on Tuesday. They're coming at

it from different places. You mentioned

Korea. Korea was doing pretty well. Its

economy was reasonably strong. They've

got an unemployment problem, but the

tech sector was doing very very well on

the back of demands for anything AI

related. and policy makers there had

indicated that their cuts were over and

they see thanks to their own dot plot

interest rates being unchanged for the

next 6 months or so. Now one thing we

can say with a degree of confidence is

that anyone in Asia who was thinking

about an imminent cut in rates has to

think again.

If we get another couple of weeks of

conflict, then there'll be a

recalibration. Look, talking hawkishly,

saying you're ready to take whatever

measures are needed. You're hoping you

don't have to act on that. Talking

hawkish is easy. Actually following

through is a lot harder when some of

your economies are in a pretty soft

spot. Are there when it comes to looking

through the price moves, are there

lessons to be learned from previous

Middle East crisis about what the

lasting effects look like? It's very

difficult. Let me draw on another

analogy for you. The world economy has

absorbed a lot of blows in the past 12

months and is still standing. It's

almost a year ago since the liberation

day moment in the Rose Garden when

widespread tariffs were imposed by the

administration. You think of everything

the drama that transpired in the weeks

following that. Oh, there's going to be

a deep downturn. It's sell America.

American assets will never be the same.

Well, none of those things has

transpired.

This is Bloomberg Daybreak Europe, your

morning brief on the stories making news

from London to Wall Street and beyond.

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