'Bloomberg Surveillance: Early Edition' Full (06/26/23)

FRANCINE: GOOD MORNING EVERYONE AND

WELCOME TO "BLOOMBERG SURVEILLANCE: EARLY EDITION."

RUSSIA'S DEFENSE MINISTER VISITS TROOPS IN UKRAINE.

MOSCOW LIFTS COUNTERTERROR MEASURES PUT IN PLACE DURING A

SHORT-LIVED MUTINY. MERCENARIES REMAIN IN THE

COUNTRY AFTER HE AGREES -- THERE ARE FEW SIGNS OF MARKET

TURMOIL.

LET'S TAKE A LOOKING AT THE FUTURES -- LOOK AT THE MARKETS.

FUTURES IN THE U.S. FLAT. THE BIG QUESTION IS WHY ARE WE

SEEING SO MUCH CALM IN THE MARKETS AFTER THE PRETTY

EXTRAORDINARY WEEKEND WE HAD IN RUSSIA.

THE FOCUS ON WHAT HAPPENS NEXT.

WE DON'T KNOW WHAT KIND OF DEAL WAS BROKERED.

THE OTHER QUESTION IS IS A CLEAR ADVANTAGE TO UKRAINE?

FOR THE MOMENT, A AND OIL STABILIZING.

A LOT OF TRADERS FIGURING OUT WHAT THIS MEANS LONGER-TERM BUT

THERE IS NOT AN ACTUAL WAY OF LOOKING AT THIS RISK.

EURO-DOLLAR 1.0894. BRENT CRUDE PRETTY MUCH

UNCHANGED. WE ARE GETTING SOME EXPECTATIONS.

INTERESTING TO SEE ON THE WEEKEND.

IT'S COMING IN AT THE 88 -- THE BUSINESS CONFIDENCE INDEX

COMING IN AT 88.5. SEEING A BIT OF WEAKNESS ACROSS

THE BOARD AND THAT'S BOTH HER EXPECTATIONS WHICH ARE LOWER

THAN EXPECTED BUT ALSO HOW THEY ASSESS THE SITUATION IN GERMANY.

THE PICTURE FOR EURO-DOLLAR THEN WE GO TO CENTRAL PORTUGAL

FOR A FULL ROUND UP IN CONVERSATIONS WITH A LOT OF

CENTRAL BANKS TO FIGURE OUT WHAT INFLATION DOES.

MOSCOW HAS LIVED COUNTERTERROR MEASURES DURING -- PUT IN PLACE

DURING THE BRIEF MUTINY.

THE FIRST PUBLIC OUTING SINCE THE WEEKEND'S DRAMATIC EVENTS.

WE ARE JOINED BY MARIA TADEO. AN EXTRAORDINARY WEEKEND IS

PROBABLY AN UNDERSTATEMENT. WHAT DOES THIS CRISIS MEAN FOR

VLADIMIR PUTIN? IS IT OVER OR JUST THE

BEGINNING? MARIA:

THIS IDEA THAT THE RUSSIAN DEFENSE MINISTER HAS MAGICALLY

REAPPEARED, FIRST THING IN THE MORNING WE GOT FROM THE RUSSIAN

MEDIA OUTLETS. YOU SEE HIM ON WHAT APPEARS TO

BE A HELICOPTER AND EXPECTING TROOPS IN THE WAR IN UKRAINE

BURIED WE KNOW VERY WELL A LOT OF WHAT HAPPENED OVER THE

WEEKEND, OF THE ISSUE WITH THE TENSIONS BETWEEN PRO-GOSHEN --

WAGONER. THIS MORNING IT APPEARS THE

MESSAGE THE KREMLIN WANTS TO SEND TO THE WORLD IS IT IS AND

NOW EXPECTING TROOPS.

IT'S DIFFICULT TO GAUGE BECAUSE HE'S GONE RADIO SILENT.

ONE OF THE FUNDAMENTAL THINGS. THE SATURDAY MORNING HE TOLD

THE RUSSIAN PEOPLE THEY WERE WITNESSING TREES AND BRADEN

TALKING ABOUT FATAL AND CRITICAL CONSEQUENCES.

DRAWING A PARALLEL TO 1917. ON THE MONDAY MORNING NO SIGHT

OF VLADIMIR PUTIN, OF THE CHARGES OF MUTINY DROPPED ON

WAGONER. PRIGOZHIN GOING TO BELARUS.

WHAT KIND OF DEAL CUT HERE WAS UNCLEAR.

WE HEARD FROM THE TOP EUROPEAN DIPLOMAT WHO SAYS VLADIMIR

PUTIN CREATED A MONSTER AND THAT MONSTER HAS COME BACK TO

HAUNT HIM. THE IMAGE OF VLADIMIR PUTIN IS

THE ALL-POWERFUL LEADER HAS BEEN RATTLED BY PRIGOZHIN

WHETHER HE STAYS IN RUSSIA OR GOES TO BELARUS. FRANCINE:

WHAT'S INCREDIBLE IS WE ARE

VERY THIN ON DETAILS, A LOT OF FOCUSES ON LUKASHENKO OF

BELARUS AND THE ROLE HE PLAYED. WHAT DID SHE TELL YOU?

MARIA: VLADIMIR PUTIN AND LUKASHENKO

HAVE A VERY TRANSACTIONAL RELATIONSHIP AT TIMES.

SHE CHALLENGED LUKASHENKO IN THE 2020 ELECTION.

SHE SAYS IF YOU THINK HE IS THE HERO OF THE DAY AND IS DOING

THIS FOR THE GOOD OF HIS HEART YOU ARE WRONG.

LET'S TAKE A LOOK.

>> HE IS NOT A PEACEMAKER. HE WAS PUTIN'S MESSENGER.

LUKASHENKO PASSED THE MESSAGE TO PRIGOZHIN WHICH ALLOWED

PRIGOZHIN TO STOP THE MARCH AND SAVE FACE.

SOMEHOW I CAN SAY LUKASHENKO SAVED BOUDIN BUT IT DOESN'T

MAKE LUKASHENKO A HERO. THE PROBLEM IS THE INTEREST OF

BELARUS ARE NOT CONSIDERED AT ALL. MARIA:

SHE IS THE OPPOSITION LEADER OF BELARUS.

SHE LATER -- REITERATED HER COUNTRY NOW FINDS ITSELF IN A

RATHER DANGEROUS POSITION. YOU'VE LUKASHENKO WITH A MURKY

DEAL. THE TACTICAL NUCLEAR WEAPONS.

VLADIMIR PUTIN HAS SAID HE WILL STATION SOME MORE IN BELARUS.

FRANCINE: THANK YOU SO MUCH MARIA TADEO.

LET'S ALSO GET MORE ON WHAT THIS MEANS FOR THE FUTURE OF

THE WAR IN UKRAINE.

YOU HAVE UNPARALLELED INSIGHT TO WHAT THIS COULD MEAN FOR THE

WAR GOING FORWARD. IT'S EXTREMELY DIFFICULT.

WHAT'S BEEN THE REACTION IN UKRAINE OF WAGNER'S ARMED

REBELLION? MARC: IT WAS VERY MUCH WELCOMED.

THE BASIC CALCULATION IN UKRAINE IS BINARY REALLY.

ANYTHING BAD FOR THE KREMLIN, ANYTHING BAD FOR BOUDIN SHOULD

BE GOOD FOR UKRAINE. THE ASSUMPTION IS THEY HAD

HOPED OBVIOUSLY THIS WOULD CONTINUE AND THERE WOULD BE

MORE DESTABILIZATION SO THEY'RE A LITTLE BIT MORE CAUTIOUS NOW

BUT NEVERTHELESS THEY STILL BELIEVE NO MATTER WHAT HAPPENS

BOUDIN HAS BEEN WEAKENED AND THAT SHOULD HELP, HOW EXACTLY

THE WHAT HELP WE DON'T KNOW YET. WE'VE SEEN MORE OF THE SAME WE

HAVEN'T SEEN ANY OBVIOUS LINKAGE OR IMPACT TO THE

BATTLEFIELD.

IN THE LONGER TERM THIS WILL CREATE PROBLEMS WITH MORALE IN

THE RUSSIAN FORCES.

BUT EQUALLY THERE ARE DIPLOMATS HERE TO ISSUE A WORD OF CAUTION

WHICH IS WE CAN BE SURE THAT THE RESPONSE TO THIS WON'T BE

THAT BOUDIN, HE HAS TO DOUBLE DOWN.

PRIGOZHIN AFTER ALL WAS STUPID -- -- WAS DEMANDING A MORE

EFFECTIVE WAR. HE CRITICIZED THE REASONINGS OF

THE WAR. LOOKING FOR A MUCH MORE TOUGHER

APPROACH. FRANCINE:

VERY QUICKLY.

PRIGOZHIN FOR THE WORLD NEEDS MORE INSTABILITY AND FAR MORE

AND UNSTABLE AND LIVEWIRE THAN PRESIDENT PUTIN IS.

DO WE KNOW WHAT THE AGREEMENT IS AND CAN VLADIMIR PUTIN, ONE

DAY CALLING THIS TREASON AND THENCE -- AND THEN GET AWAY

WITH IT. MARC: WE DO NOT KNOW WHAT THE DEAL

WITH IT IS. WE DON'T KNOW WHERE PRIGOZHIN

IS . WE DON'T KNOW WHAT WILL HAPPEN

TO HIS FORCES. GETTING THE OPPORTUNITY TO SIGN

CONTRACTS WITH THIS REGULAR MILITARY AND RUSSIA.

WE DON'T KNOW IF WAGONER WILL CONTINUE IN THE FORM IT HAS NOW.

WHAT IS CLEAR IS PRIGOZHIN FELT THE NEED TO STAND DOWN.

WHATEVER THE DEAL IS, IT IS NOT PERFECT FOR HIM.

THE MILITARY DID NOT RUSH TO OPPOSE HIM BUT EVEN HIS FRIENDS

IN THE MILITARY DID NOT SUPPORT HIM. HE MAY HAVE SIMPLY DECIDED.

FRANCINE: WE ARE ALSO JOINED BY THE

DEUTSCHE BANK CHIEF ECONOMIST. THANK YOU FOR JOINING US.

HAVING A CONVERSATION ON INFLATION AND RECESSION BUT

IT'S UNCLEAR FROM THE MARKET AND ECONOMIST'S PERSPECTIVE TO

LOOK AT HOW THESE DRAMATIC EFFECTS IN RUSSIA COULD CHANGE

THE WAR AND CHANGE THE WORLD ECONOMY.

>> IT'S BEEN A ROLLER COASTER WEEKEND.

BY AND LARGE TODAY IT'S A DISASTER AVERTED.

IF HE HAD BEEN SUCCESSFUL IN MOVING ONTO MOSCOW YOU WOULD

THEN HAVE ULTRANATIONALIST WITH POTENTIAL ACCESS TO NUCLEAR

WEAPONS. IT WOULD'VE BEEN TRULY CATASTROPHIC.

A SOMEWHAT WEAKENED BOUDIN NOW. BUT CERTAINLY MAY HAVE SOME

WEAKNESSES. THERE IS SOME DOUBTS.

I THINK ON THE WHOLE THIS MORNING WE PROBABLY ARE IN A

BETTER POSITION. ONE THING HAS BEEN REMOVED AND

AVOIDED. SO FROM THAT POINT OF VIEW I

WOULD EXPECT US TO BE QUITE POSITIVE IN THE COMING DAYS.

FRANCINE: EVERYBODY CARES ABOUT HOW THIS

WAR ENDS AND WHO WINS. DOES IT HAVE AN IMPACT ON THE

ECONOMY OF THE WORLD? DAVID: RUSSIA DIDN'T PLAY THAT MUCH OF

A ROLE. ONCE WE WORKED OUR WAY THROUGH

THE GAS PROBLEM AND OIL PROBLEM THE REST WASN'T THAT IMPORTANT.

IT DOES HAVE AN IMPACT THROUGH DEFENSE STOCKS GENERALLY

THROUGH A SENTIMENT PARTICULARLY AMONG INVESTORS.

THERE IS CERTAINLY A NEGATIVE INDIRECT IMPACT WE'VE SEEN AND

IT WILL CONTINUE TO BE THERE. YOU HAVE A LAND WAR IN EUROPE.

WITH A GUY WE DON'T KNOW HOW HE MIGHT REACT IN EXTREME

SITUATIONS.

FRANCINE: DO YOU WORRY ABOUT WHERE WE ARE

FOR THE WORLD ECONOMY. LOOKING AT POLICY FROM THE FED

I DON'T KNOW WHETHER MISTAKE COULD HAPPEN BECAUSE THEY RAISE

TOO QUICKLY.

DAVID: I BELIEVE THE SHORT TERM IS AN

ISSUE IN EUROPE AND THE U.S. BECAUSE WE TO WORK OUR WAY

THROUGH THE PROBLEM WITHOUT

CAUSING IT DISCRETION -- WE HAVE SEEN MAJOR TECHNOLOGICAL

INNOVATION. I WOULD EXPECT IF WE WERE

SITTING HERE THREE YEARS FROM NOW EVERYTHING WOULD LOOK

BETTER THAN IT IS TODAY. I'M QUITE OPTIMISTIC ABOUT

WHERE WERE GOING IN THE MEDIUM TERM.

FRANCINE: YOU OF ONE OF THE MOST AGGRESSIVE CALLS FOR RECESSION

IN THE U.S.. ARE YOU NOT PERPLEXED AT THE

FACT WE MANAGED TO RAISE INTEREST RATES WITHOUT ANYTHING

MAJOR BREAKING.

DAVID: IF WE WATCHED PAST CYCLES , WE

DON'T REALLY KNOW EXACTLY WHAT'S GOING ON.

CERTAINLY HAVE AN UNUSUALLY STRONG LABOR MARKET BELOW 3%.

YET YOU HAVE CORE INFLATION BEING VERY STICKY WITH THE FED

AND ECB HAVING GONE OUT AND RATES AND WE DON'T SEE OF AN

IMPACT OR CLOSE TO WHAT WE SAW. COMPLEXITY IS THE RIGHT WORD.

I THINK IT WILL RESOLVE ITSELF IT WILL JUST TAKE MORE TIME.

THERE IS SCOPE FOR POLICY ERRORS, FOR OVERSHOOTING,

PRODUCING A SESSION THAT STEEPER THAN IT WOULD NEED TO

BE.

THERE IS ALSO SCOPE FOR UNDERSHOOTING IT.

THIS IS A VERY DEMANDING PERIOD FOR CENTRAL-BANK POLICY.

YOU HAVE THE FISCAL AND MONETARY ARM THAT WE HAD FIVE

YEARS AGO IN REVERSE NOW. THAT ISN'T HELPING.

IN SOME SENSE MONETARY POLICY HAS TO WORK HARDER TO GET THE

FISCAL STIMULUS DOWN AND THAT'S A BIT UNFORTUNATE. FRANCINE:

WE WILL TALK MORE ABOUT THAT. DEUTSCHE BANK CHIEF ECONOMIST

STAYS WITH US. WE WILL TALK NOT ONLY ABOUT

WHAT MONETARY POLICY CAN DO TO COUNTER FISCAL POLICY BUT ALSO

HOW TRADERS SHOULD INVEST IN THIS OUTLOOK.

WE'LL HAVE PLENTY MORE FROM THE DEUTSCHE BANK CHIEF ECONOMIST.

WE LOOK AT GOLD AND THE OTHER THINGS WE ARE WATCHING OUT FOR

IN THE TRADING SESSION. THIS IS BLOOMBERG.

♪

FRANCINE: WELCOME BACK.

TALKING WITH THE DEUTSCHE BANK CHIEF ECONOMIST. THANK YOU SO

MUCH FOR STICKING AROUND. WE LOOK AT WHAT YOU'RE

EXPECTING, HOW DOES THAT COMPARE WITH THE EUROPEAN

ECONOMY. I KNOW THEY ARE IN DIFFERENT

CYCLES REACTING TO DO DIFFERENT MONETARY POLICIES. DAVID:

IT'S SLOWER TO CATCH UP, INFLATION WILL STAY HIGHER FOR

LONGER AND WHAT WE SEE NOW IS WAIT SENTIMENT FEEDING INTO

THAT.

YOU WANT TO CATCH UP BEFORE THE PANDEMIC.

THAT'S GOING TO TAKE A WHILE. WE SEE IT MOVING IN THAT

DIRECTION. IT WILL TAKE A NUMBER OF YEARS

BEFORE WE GET THERE. THE WAGE PRICE DYNAMIC LARGELY

IN THE EUROPEAN SECTOR WILL BE A LOT MORE DETRIMENTAL TO

INFLATION.

SO WE BELIEVE THE ECB WILL PROBABLY HAVE TO GO TO A 4%

TERMINAL RATE IN THE MARKET IS BETTING ON 375. FRANCINE:

DO YOU WORRY ABOUT GERMANY IN PARTICULAR BECAUSE OF

INNOVATION BUT THE PROXIMITY. DAVID:

IT'S ALMOST A HISTORIC PIVOT IN THE SENSE EUROPEANS AND THE

GERMANS IN PARTICULAR BECAUSE OF ALLOTMENT -- LARGE

MANUFACTURING SECTOR FALLING BEHIND BECAUSE OF THE

TECHNOLOGICAL GAP GETTING HIGHER AND HIGHER.

GENERATIVE AI ON TOP OF THAT. BUT ALSO THE CHANGE IN U.S.

POLICY.

ALMOST 2 TRILLION FOR THE IRA AND THE CHIP ACT AND

INFRASTRUCTURE ACT.

THIS IS A VERY SIGNIFICANT PLANS FOR THE NEXT WAVE OF

INVESTMENT AND SOME HIGH TECH GREEN INDUSTRIES MOVING FROM

EUROPE TO THE U.S..

IN OUR SENSES IT'S PROBABLY ABOUT 20% OF THE PLANNING THAT

WAS SUPPOSED TO BE IN EUROPE FOR CAP X WILL MOVE TO THE U.S..

THAT WILL HURT PRODUCTIVITY IN THE OUTLOOK.

I THINK THE SHORT TERM HAS TO WATCH IT BUT IT'S MANAGEABLE.

THE CORE ISSUE IN EUROPE IS THE MEDIUM-TERM OUTLOOK AND HOW TO

OVERCOME THAT. FRANCINE:

WE WILL HAVE PLENTY MORE FROM THE MARKETS AND TRY TO FIGURE

OUT HOW TRADERS ARE IMPACTING THAT. THIS IS BLOOMBERG. ♪

FRANCINE: INVESTORS HAVE BEEN ASSESSING

THE IMPLICATIONS OF THE DRAMATIC CHALLENGE TO VLADIMIR

PUTIN'S RULE IN RUSSIA. LET'S GET MORE ON THE MARKET

REACTION FROM BLOOMBERG. THANK YOU FOR JOINING US.

WHY ARE THE MARKETS SO CALM ABOUT THIS?

>> I THINK IT'S MORE LIKELY IN STARTED AND ENDED OVER THE

WEEKEND. THEY DON'T KNOW HOW TO PRICE IT.

WHAT'S THERE TO PRICE AS THE QUESTION, THEREFORE THERE IS

NOT MUCH FOR PRICING. FIXING THIS FOR GOLD.

THE SITUATION IN THE KREMLIN WERE WELL-FOUNDED.

FROM A MARKETS PERSPECTIVE WERE CONCERNED ABOUT WHAT HAPPENS

THROUGH NATURAL GAS. IN THE EURO AREA INFLATION

PICTURE. IF THIS IS CONTAINED THEN

PERHAPS THIS IS ALL WE NEED TO PRICE IT. FRANCINE:

WHAT DOES THAT MEAN GOING FORWARD?

WHAT ASSET CLASS ARE WE LOOKING AT?

>> IF THERE ARE TENSIONS AROUND THE KREMLIN WE'VE ALREADY SEEN

GOLD MARCH HIGHER. THOSE GAINS CAN CONTINUE IF

THERE IS A PROTRACTED TENSION. OVER THE LONGER TERM YOU WANT

TO SEE HOW THAT'S GOING TO PLAY ONCE YOU KEEP GOING.

FRANCINE: THANK YOU AS ALWAYS. COMING UP VLADIMIR PUTIN FACE

IS THE BIGGEST CHALLENGE TO HIS TWO DECADE RULE.

WE DISCUSSED MORE WITH THE FORMER U.K.

AMBASSADOR TO RUSSIA. THAT'S NEXT AND THIS IS

BLOOMBERG. ♪

FRANCINE: RUSSIA'S DEFENSE VISITS TROOPS

IN UKRAINE IN THE FIRST APPEARANCE SINCE PRIGOZHIN

DEMANDED HIS REMOVAL IN MOSCOW. UKRAINE SAYS MERCENARIES REMAIN

IN THE COUNTRY AFTER PRIGOZHIN AGREES TO EXILE.

THERE ARE FEW SIGNS OF MARKET TURMOIL.

OIL STOCKS AND CURRENCIES AFTER THE WEEKEND EVENTS IN RUSSIA

AND WEEK GAINS. GOOD MORNING EVERYONE.

I'M FRANCINE LACQUA IN LONDON.

IT'S BEEN A DRAMATIC WEEKEND AS THE MERCENARY GROUPS MOVE

TOWARDS MOSCOW. THE BIGGEST THREAT.

FOR MORE ON THIS LET'S GET STRAIGHT TO BLOOMBERG'S ROZ

MATHESON. YOU ALWAYS MAKE SENSE OF

INEXPLICABLE EVENTS. WE SAW PROBABLY THE MOST

DRAMATIC EVENTS NOT MANY PEOPLE WERE EXPECTING OVER THE WEEKEND.

WHAT EXACTLY DID WE JUST LIVE THROUGH?

DID HE RETREAT BECAUSE HE DIDN'T HAVE THE CAPABILITY OF

GOING TO MOSCOW OR DID HE BROKER A GOOD DEAL.

>> WE DON'T KNOW. WHAT WE DO KNOW IS PRIGOZHIN

SAYS HE DIDN'T WANT TO TOPPLE PUTIN. IN PARTICULAR THE DEFENSE

MINISTER WHO'S BEEN CRITICAL OF FOR MONTHS NOW.

HE SAID HE DIDN'T WANT TO CONFRONT VLADIMIR PUTIN BUT

VLADIMIR PUTIN SAID THIS IS A MOOT -- A MUTINY AGAINST ME SO

HE DID SET THEM UP FOR THAT SHOWDOWN.

IT'S UNCLEAR WHAT HAPPENED IN THE END WITH THIS DEAL THAT

ENABLED FOR GOSHEN -- PRIGOZHIN TO PULL THEM FROM MOSCOW AND

BACK INTO UKRAINE. THE QUESTION IS WHERE IS HE

NOW, WHERE ARE HIS MEN. WHAT KIND OF ARRANGEMENTS WERE

MADE BEHIND-THE-SCENES. DID HE GET SOME KIND OF

UNDERSTANDING AND SEE SOME CHANGES IN THE ESTABLISHMENT.

WHAT WAS THE TRADE-OFF. WHAT DID VLADIMIR PUTIN GET OUT

OF THIS. FRANCINE:

IT'S VERY UNCHARACTERISTIC FOR VLADIMIR PUTIN TO NOT OF COME

OUT TODAY. PRIGOZHIN HAS ALSO BEEN QUIET.

IS IT IMPOSSIBLE TO TELL AT THIS POINT WHAT HAPPENS NEXT?

>> WHAT WE KNOW IS THERE'S BEEN RADIO SILENCE TODAY.

THIS SEEMS TO HAPPEN. WE ARE FIGHTING GOING ON.

THE STREETS OF MOSCOW BACK TO NORMAL.

WE MARKETS THAT WILL TRADE AGAIN. NOTHING TO SEE HERE.

THAT SEEMS TO BE WHAT THE STATE MEDIA IS PUSHING.

AND WHY PUTIN HAS NOT COME OUT IN PUBLIC.

IT MIGHT SUGGEST OR SOMETHING MORE GOING ON HERE.

BUT THE REAL QUESTION IN THE

END IS DESPITE THIS MOMENT WHAT DOES IT MEAN FOR VLADIMIR PUTIN

IN THE LONG TERM.

>> LET'S ALSO BRING IN THE UK'S AMBASSADOR TO RUSSIA UNTIL 2022.

YOU KNOW VLADIMIR PUTIN. YOU KNOW HIS INNER THINKING,

HIS INNER CIRCLE. HOW DID THIS WEEKEND SHAPE OUT.

IT'S QUITE UNCHARACTERISTIC TO SAY THIS IS TREASON AND THEN

FORGIVE THEM.

>> IT'S REALLY HARD TO MAKE SENSE OF WHAT HAPPENED OVER THE

WEEKEND AND WHAT HE THOUGHT HE WAS DOING.

WHY MR. PRUDEN IN THE KREMLIN WENT INSIDE A DAY FROM TALKING

ABOUT TRADERS AND ATTEMPTS TO OVERTHROW THE STATE TO

ESSENTIALLY ALL CHARGES DROPPED, NOTHING TO SEE HERE.

THIS MORNING VERY CLEAR ATTEMPTS TO GIVE THE IMPRESSION

OF A RETURN TO NORMALITY. THE DEFENSE MINISTER APPEARING

ON TELEVISION. THE BEST WAY TO UNDERSTAND

WHAT'S HAPPENING HERE IS AS A PRODUCT OF THE WEAKNESS IN THE

RUSSIAN STATE. WEAK INSTITUTIONS, STRONG

PATRONAGE NETWORKS. COMPETING INTERESTS BUT THE WAY

I DESCRIBED IT, IT'S A BIT LIKE A TANK OF PIRANHAS.

HAPPY AS LONG AS THE FOOD KEEPS COMING IN.

WHAT HAPPENS NEXT I THINK WE SHOULD SEE THIS IS ONE ACT IN A

DRAMA I DON'T THINK BY ANY MEANS WE SEE THE END OF THIS.

FRANCINE: COULD HAVE YOU TAKEN IT.

IT'S VERY UNCLEAR HOW MUCH SUPPORT HE HAD FROM THE

MILITARY HIGH-RANKING OFFICIALS. >> WE MAY NEVER KNOW THE ANSWER

TO THAT QUESTION.

WHAT HE DID DO WAS TAKE TO THE AIRWAVES, OPENLY CRITICIZING

THE BASIS OF THE INVASION OF UKRAINE AND THE IDEA IT WAS

DENOUNCED. HE THEN SEIZED CONTROL OF HIM

OF THE MILITARY HEADQUARTERS,

IT'S A BIG DEAL AND THEN SET OFF ON A LONG DRIVE TO MOSCOW.

WHAT HE PLANNED TO DO ONCE HE GOT TO MOSCOW IT'S POSSIBLE HE

HADN'T EVEN PROPERLY THOUGHT THAT THROUGH.

THE IDEA TURNING UP IN MOSCOW WITH EVEN A SUBSTANTIAL NUMBER

OF MEN, THIS DEFIES BELIEF REALLY.

AS TO THE DEAL I DON'T KNOW WHAT HAPPENED THERE.

WE MAY NEVER KNOW THE FULL DETAILS OF THAT.

WHAT I AM SURE IS MR. PRUDEN WILL NOT FORGIVE AND FORGET.

FRANCINE: WHAT DOES THAT MEAN FOR

PRUDEN'S TENURE? COULD WE SEE HIM REPLACED.

WE ARE FROM NATIONAL SECURITY INTELLIGENCE THAT WOULD BE A

REAL PROBLEM FOR MANY COUNTRIES AROUND THE WORLD IF PRIGOZHIN

WOULD BE THE NEXT PRESIDENT. HE'S MORE UNSTABLE AND HIGHLY

VOLATILE COMPARED TO VLADIMIR PUTIN.

>> I THINK WE CAN RULE OUT THE IDEA THAT PRIGOZHIN WILL BE THE

NEXT PRESIDENT OF RUSSIA. WHAT'S HAPPENED OVER THE

WEEKEND HAS DAMAGED MR. PRUDEN. A LOT OF IT IS SELF-HARM.

THIS IS A CONSEQUENCE OF THE WAY HE'S COME TO RUN RUSSIA IN

RECENT YEARS. I THINK OF HIS SPEECH ON THE

SATURDAY MORNING. THE REFERENCE TO 1917 AND THE

STAB IN THE BACK, IMPLIES RUSSIA'S SUSCEPTIBLE TO SOME

SORT OF REVOLUTION WILL COUP.

THE IDEA THERE MIGHT BE SOME SORT OF PALACE COUP, I FIND

THAT QUITE IMPLAUSIBLE AT THE MOMENT AND TO BE A HIGHLY RISKY

VENTURE FOR ANYONE TO UNDERTAKE THAT. I THINK IT'S IMPLAUSIBLE.

THE BEST THING WESTERN GOVERNMENTS CAN DO IS STAY WELL

CLEAR OF THIS.

WE ARE SEEING UNCERTAINTY ESSENTIALLY TRYING TO WORK OUT

WHAT TO DO IN THE RUSSIAN SYSTEM. AS WITH REGARDS TO THEIR

STANDING. I THINK IT'S QUITE SERIOUSLY

DAMAGED. PEOPLE LIKE XI JINPING WILL BE

LOOKING AT MOSCOW THIS MORNING TRYING TO WORK OUT WHAT'S GOING

ON. FRANCINE:

WILL WE SEE CHANGES TACTICALLY TO HELP RUSSIA CONTINUES ITS

WAR IN UKRAINE OR CHANGES OF THE TOP OF THE DEFENSE MINISTRY?

WAS IT FOR MONEY THAT HE BACKED AWAY OR WAS IT FOR CHANGES?

>> WE DO NOT KNOW WHY PRIGOZHIN BACKED AWAY.

WITH REGARD TO THE WAR ANY IMPACT ON MORALE FOR THE

RUSSIAN ARMY FIGHTING IN UKRAINE AND IMPACT OF THEIR

CAPABILITIES. WHAT WE WON'T SEE IS ANY CHANGE

IS THE FUNDAMENTAL GOALS. THEIR GOAL IS TO SUBJUGATE OR

BREAK. AS REGARDS THE POLITICS I THINK

WHAT WE WILL SEE HERE IS A CONTINUED PERIOD OF UNCERTAINTY

ABOUT THE WAY THINGS ARE GOING,

BEAR IN MIND THERE IS A THEORY A PRESIDENTIAL ELECTION IN

RUSSIA NEXT YEAR.

WHETHER IT MEANS ANOTHER TERM FOR PRUDEN OR A MANAGED

SUCCESSION, I THINK THAT GOT MUCH HARDER. FRANCINE:

DO WE KNOW HOW MUCH THE PEOPLE INSIDE RUSSIA UNDERSTAND WHAT

HAPPENED OVER THE WEEKEND? FOR EXAMPLE LOOKING AT

BERLUSCONI AT THE TIME BECAUSE IF VLADIMIR PUTIN IS WEEKEND

THAT WILL AFFECT MORALE TO TROOPS. LAURIE:

THE RUSSIAN STATE HAS PRETTY MUCH TOTAL CONTROL OVER THE TV

AND RADIO MEDIA. I'M SURE THEY WILL BE USING

THAT IN THE COMING WEEKS AND MONTHS TO REASSERT A SENSE OF

NORMALITY AND GRIT -- GRIP AND PURPOSE ON THE TOP.

THE BIGGER QUESTION IS THE SENSE THAT THERE IS SOMETHING

JUST CHANGED. SOMETHING JUST HAPPENED.

NOBODY KNOWS QUITE TO MAKE OF THAT.

I THINK THEIR RESPONSE WILL BE EVEN DEEPER REPRESSION.

I FULLY EXPECT THAT NOW TO -- THAT NOW.

FRANCINE: THE LEADER OF BELARUS, THIS IS

TAKING ON A MUCH BIGGER ROLE. LAURIE:

A GREAT DEAL WE DON'T KNOW

ABOUT EITHER THE DEAL, PERSONALLY I FIND IT DEEPLY

IMPLAUSIBLE THAT THE PRESIDENT OF BELARUS PLAYED A BROKERING

ROLE IN THAT. HE IS NOT STRONG ENOUGH AND NOT

TAKEN SERIOUSLY ENOUGH.

MY GUESS IS HE WAS POSSIBLY USED AS A CONDUIT FOR MESSAGES.

FRANCINE: DO YOU THINK THE WEST HAD ANY

DEALING IN THIS?

THERE'S A SECOND TRAIN OF THOUGHT SAYING IT WAS PROBABLY

THE WEST THAT WAS BEHIND THIS. LAURIE:

THERE WILL CERTAINLY BE ALLEGATIONS OF THAT IN THE

RUSSIAN PROPAGANDA OVER THE COMING DAYS.

THAT'S A STANDARD PROPAGANDA REACTION TO TRY TO TRANSFER

INTERNAL TENSIONS ON SOME SORT OF EXTERNAL MALIGNED FORCES.

GOING BACK TO WHAT HE SAID ON SATURDAY MORNING WITH A

REFERENCE TO 1917 AND TRADERS FROM WITHIN.

THAT WAS THE WAY HE WAS BEING SPUN.

ONE FINAL POINT ON THIS IT'S CRITICALLY IMPORTANT WESTERN

GOVERNMENTS DO NOT FEED THE FEAR OR ANXIETY IN RUSSIA.

THERE PRETTY SURE THERE WEREN'T AND THERE'S NO INTEREST IN

WESTERN GOVERNMENTS OF BEING SEEN WITH THAT. FRANCINE:

WHAT DOES THIS MEAN FOR HOW THEY DRIVE THE WAR FORWARD?

LAURIE: IT'S CERTAINLY POSITIVE FROM

UKRAINE'S POINT OF VIEW BUT WHAT I WOULD NOT DO IS MAKE A

QUICK JUMP UP FROM THAT TO ANY SUGGESTION THAT THE WAR IS

NEARLY OVER OR THAT UKRAINE HAS A CLEAR STRATEGIC ADVANTAGE ON

THE BATTLEFIELD. THEY WILL CONTINUE TO FACE A

TOUGH FIGHT. A LOT MORE PEOPLE WILL DIE IN

THAT WAR.

THE WARS LAUNCHED ILLEGALLY AND UNNECESSARILY BY MR. PRUDEN

AGAINST UKRAINE. FRANCINE: DOES IT CHANGE THE PARAMETERS?

ONE QUESTION I HAVEN'T ASKED IS WE'VE ALWAYS SAID IN THE PAST

IF VLADIMIR PUTIN IS CORNERED YOU DON'T KNOW WHAT HE WILL DO.

DO YOU THINK HE IS CORNERED RIGHT NOW? LAURIE:

I WOULD NOT SAY HE IS CORNERED. I WOULD COUNSEL AGAINST THE

LOGIC THAT WE SHOULD GIVE PRUDEN SOMETHING OF WHAT HE

WANTS.

WE ARE LONG PAST THE STAGE AT ANY ATTEMPT WILL LEAD TO BETTER

RESULTS OF THEM ESSENTIALLY FACING HIM DOWN.

NOBODY WANTS DIRECT CONFLICT BETWEEN NATO AND RUSSIA, WE

DON'T WANT IT, RUSSIA DOES NOT WANTED.

BOTH SIDES OF GONE TO GREAT LENGTHS IN THE FUTURE TO AVOID

THAT HAPPENING. IT DOES NOT CHANGE THE

FUNDAMENTALS. CERTAINTY TO UKRAINE.

FRANCINE: THANK YOU SO MUCH FOR ALL OF

YOUR INSIGHT.

TO GREECE. THE COUNTRY'S SECOND VOTE.

TO FORM A SINGLE PARTY GOVERNMENT.

THE MARKETS ARE PREVIOUSLY RALLIED BEHIND IT AS HE MADE

THE ECONOMY CENTRAL TO HIS CAMPAIGN.

WE WILL BE JOINED BY POLITICAL SCIENTISTS.

THAT'S COMING UP SHORTLY AND THIS IS BLOOMBERG.

>> YESTERDAY WAS RATHER TENSE FOR FORCES.

ANY WEAKNESS OF PUTIN'S REGIME IS AN OPPORTUNITY TO APPRISE

AGAIN IN BELARUS.

IT STARTED THIS MARCH UNEXPECTEDLY ENDED WAS

UNEXPECTEDLY FINISHED.

THE YOU NOT -- THEY HAVE AN OPERATION HEADQUARTERS WHERE

MAJOR GROUPS HAVE JOINED. WE WORK ON THE PLAN OF ACTIONS.

THE GOAL IS TO GET RID OF RUSSIAN TROOPS AND TO ENSURE

THE TRANSITION OF DEMOCRACY. WE ARE READY TO ACT.

NOW WE SEE THIS WENT DIFFERENTLY AND NOW THERE ARE

MORE THREATS BECAUSE WE HAVE HEARD THIS CAN COME TO BELARUS.

>> WHAT DO YOU MAKE OF THAT? YOU SAY YOU ASPIRE TO IT

DEMOCRATIC BELARUS BUT AT THIS POINT YOU HAVE LUKASHENKO AND

TACTICAL NUCLEAR WEAPONS FROM RUSSIA.

ARE YOU CONCERNED ABOUT THE FUTURE OF YOUR COUNTRY AT THIS

POINT?

>> I'M CONCERNED ABOUT THE FUTURE OF MY COUNTRY SINCE 2020

BECAUSE THEY ARE FACING -- BECAUSE REPRESSIONS ARE

CONTINUING AND INTENSIFYING.

BUT ALSO WE FACE A THREAT OF OUR INDEPENDENCE.

SO RUSSIAN FORCES IN BELARUS

AND KOSOVO -- AND POSSIBLE PRIGOZHIN 'S ARRIVAL AS FAR AS

I UNDERSTAND WILL NOT, ALONE HELP, WITH HIS MERCENARIES AND

TO THEM, THE TRADE OF ARMS FOR EXAMPLE.

IT'S NOT EXCLUDED PRIGOZHIN COULD BE INVOLVED IN ANOTHER

ATTACK ON UKRAINE FROM BELARUS TERRITORY. FRANCINE:

THAT WAS THE BELARUSIAN OPPOSITION LEADER EXPRESSING

CONCERNS. MORE ON THIS WEEKENDS DEVELOPMENTS IN RUSSIA.

A FULL ROUND UP OF WHAT THIS MEANS FOR THE NEXT COUPLE OF

MONTHS AND BEYOND. THIS IS BLOOMBERG.

FRANCINE: ECONOMICS, FINANCE, POLITICS.

THIS IS "BLOOMBERG SURVEILLANCE: EARLY EDITION."

WAGONER MERCENARY -- WAGNER MERCENARY GROUP LEADER PRIGOZHIN

WAS ONCE AN ALLY OF RUSSIAN PRESIDENT VLADIMIR PUTIN BUT

HAS BECOME A FIERCE CRITIC OF THE RUSSIAN MILITARY FOR ITS

FAILURES DURING MOSCOW'S WAR IN UKRAINE.

>> THE FORMER CATERER WHO WENT ON TO LEAD A POWERFUL MERCENARY

GROUP.

HE WAS A PETTY CRIMINAL IN HIS EARLY LIFE AND JAILED FOR

NEARLY A DECADE. HE LATER GOT INVOLVED IN

SEVERAL BUSINESSES INCLUDING CATERING.

HE BECAME KNOWN AS PUTIN'S SHAFT PERSONALLY SERVING FOOD

TO THE LEADER. THE TWO APPEARED TO SHARE A

CLOSE RELATIONSHIP. HE ADMITTED TO BEING THE

FOUNDER AND HEAD OF A RUSSIAN PRIVATE MILITARY CONTRACTOR.

THIS AFTER YEARS OF DENIALS AND EVEN USING COURTS TO SUE THOSE

WHO SUGGESTED HE LED THE GROUP. THE WORST -- THEY'D CLOSE LINKS

TO THE COMMUNITY.

WAGNER WAS UTILIZED IN THE CAPTURE IN UKRAINE.

WHILE ALLOWING MOSCOW THE ABILITY TO DENY ANY INVOLVEMENT

IN THE GROUP'S OPERATIONS. THEY HAVE BEEN IDENTIFIED IN

AIDING GOVERNMENTS AND STAMPING OUT DISSENT. IN SYRIA AND SUDAN.

THEY HAVE BEEN INVOLVED IN SOME OF THE FIERCEST FIGHTING IN

UKRAINE. NOTABLY IN THE COUNTRY IN THE

EAST. HE RETURNED TO RECRUITING CRIMINALS FROM PRISON WITH THE

PROMISE OF FREEDOM.

HE GREW INCREASINGLY VOCAL OF RUSSIA'S CONFLICT OF UKRAINE

AND MILITARY STRATEGY.

HE DIRECTLY BLAMED THE DEFENSE MINISTER.

HE LATER CLAIMED THE DEFENSE MINISTER ORDERED AN AIRSTRIKE

ON TROOPS AND RETALIATED BY SENDING HIS CONTRACTORS TO

TAKING TOWNS IN RUSSIA AND WHAT HE CALLED A MARCH TO JUSTICE AT

THE TIME VLADIMIR SAW THIS IS TREASON.

>> ALL THOSE WHO DELIBERATELY EMBARKED ON THE PATH OF

BETRAYAL ARMED REBELLION AND TERRORIST METHODS.

>> HE LATER SAID HE WAS -- >> AS FOR BETRAYING THE MOTHERLAND.

THE PRESIDENT WAS DEEPLY MISTAKEN. WE ARE PATRIOTS OF OUR

HOMELAND. WE HAVE FOUGHT AND ARE FIGHTING.

FRANCINE: SAMUEL ON THE LEADER OF WAGNER.

THE EU COUNCIL AGREEING ON A TOP OFF PACKAGE TO ARMS FUND

USED FOR UKRAINE. LIFTING THAT TO MORE THAN 12

BILLION EUROS. IT WAS ONLY FOR FIVE DAYS AGO

BEFORE THIS DRAMATIC WEEKEND THAT WE WERE LOOKING AT UKRAINE

RECONSTRUCTION FUND AND NOW THE EU COUNCIL AS AGREED TO PUT

MORE MONEY IN IT. PRETTY DRAMATIC DEVELOPMENT

OVER THE WEEKEND ON FRIDAY. THE HEAD OF THE PRIVATE

MILITARY GROUP CALLING THE MILITARY PEOPLE.

WAGONER TOOK CONTROL OF THE RUSSIAN MILITARY HEADQUARTERS.

PRESIDENT PUTIN DELIVERED A TELEVISED SPEECH AND VOWED TO

CRUSH THE REBELLION AS UNITS HAD TO TOWARDS MOSCOW.

IN A TRUCE BROKERED BY BELARUS HE SAID THE COLUMN WOULD HEAD

BACK TO CAMP. PRUDEN GUARANTEED SAFE PASSAGE

TO BELARUS AND SAID HE WOULD NOT BE PROSECUTED.

IT ALSO ALLOWED FIGHTERS TO JOIN THE RUSSIAN ARMY.

HE SAID FIGHTING IN UKRAINE HAD NOT BEEN AFFECTED.

TOP CENTRAL BANKERS AND POLICYMAKERS WILL BE SPEAKING

ON THE FUTURE OF MONETARY POLICY AND INFLATION.

WE WILL BE LIVE FOR THE ANNUAL ECB FORUM ON CENTRAL BANKS.

WILL SPEAK TO CENTRAL BANK GOVERNORS.

WE HAVE MORE EXCLUSIVES LOOKING FORWARD TO HEARING FROM ANDREW

BAILEY. BLOOMBERG SURVEILLANCE:

EARLY EDITION CONTINUES IN THE NEXT HOUR. THIS IS BLOOMBERG.

♪

>> THIS IS "BLOOMBERG SURVEILLANCE EARLY EDITION"

WITH DANI BURGER AND KRITI GUPTA.

>> OUR TOP STORIES TODAY, AN EERIE CALM FALLS ON RUSSIA

AFTER A SHORT-LIVED MUTINY POSES THE GREATEST THREAT TO

VLADIMIR PUTIN'S POWER.

THE U.N. WEEKENDS AS WEAK CONSUMER

SPENDING DATA SITS IN THE ECONOMIC GLOOM.

GOLDMAN IS DISMISSING MANAGING DIRECTORS AMID A DEAL SLUMP

WHILE J.P. MORGAN LETS GO OF INVESTMENT

BANKERS IN NORTH AMERICA. WELCOME TO "BLOOMBERG

SURVEILLANCE EARLY EDITION." I AM TOM MACKENZIE STEPPING IN

FOR DANI BURGER.

WHAT A WEEKEND, HISTORIC IN THE WAY OF GEOPOLITICS.

ARGUED WITH A FOCUS ON MARKETS NOW IS ON RECESSION RISKS, ON

THE REACTION FUNCTION FROM THE CENTRAL BANKS AND ALSO SLIGHTLY

WEAKER AGAIN DATA OUT OF CHINA. KRITI:

IT IS BUT I HAVE TO SAY THEY ARE ALMOST CONNECTED, THE

GEOPOLITICS WE SAW OVER THE WEEKEND WITH THE MOOD WE ARE

SEEING IN TERMS OF THE RECESSIONARY TACTIC BEING THAT

WHAT COULD WEAKNESS IN RUSSIA HAVE AT A TIME WHEN INFLATION

IS STILL A REALLY GOOD -- REALLY BIG PROBLEM ESPECIALLY

IN THE COMMODITY COMPLEX. TO YOUR POINT, IT REALLY IS THE

ECONOMIC DATA STARTING TO SWING THE MOOD. THE THEME OF RECESSION

CERTAINLY DRIVING THE TRADE. THAT WEAK CONSUMER SPENDING

DATA OUT OF CHINA THAT YOU MENTION AT THE TOP OF THE SHOW

SENDING THE SHANGHAI COMPOSITE DOWN 1.5%.

THE KEY UNDERPERFORMER IN THE ASIA-PACIFIC INDEX BUT ALSO

DRAGGING DOWN THE REST OF THE ASIAN BENCHMARKS.

WHAT IS IMPORTANT AND WHAT HAPPENED IN THE FX SPACE

BECAUSE WE ARE SEEING RECORD WEAKNESS EVEN WITH THE WEAK

CONSUMER DATA.

USE OF THE PBOC'S TRY TO STEP IN AND STAND THE DECK LIE --

DECLINED AND STILL IT ENSUED. IN THE AMERICAN MARKETS, NOT A

GREAT READ. YOU ARE SEEING BONDS CATCH A

LITTLE BIT. ALREADY FIVE BASIS POINTS LOWER

ON THE 10 YEAR YIELD.

LOOKING AT 3.68 REALLY TELLS YOU THE MOOD IS SOUR INDEED.

TOM: IT IS. THE SENTIMENT HAS CERTAINLY

SHIFTED. IT MAY NOT BE OVERLY DRAMATIC.

AT THE START BEFORE THE OPEN, THE FUTURES POINTED TO GAINS OF

AROUND .2%, .3%.

HERE IN THE YOU TAKE UP .6% BUILDING ON THE LOSSES ACROSS

EUROPEAN EQUITIES. IS THIS PROFIT-TAKING OR THE

START OF A MORE SUSTAINED DOWNTURN?

YOU HAVE A SURVEY COMING OUT OF GERMANY UNDERSCORING THE

WEAKNESS IN EUROPE'S LARGEST ECONOMY.

THE SENTIMENT SURVEY FROM ALL YEAR.

WE HAD THAT SURPRISE SOFTNESS IN THE PMI DATA OF LAST WEEK.

WE HAVE INFLATION DATA OUT OF EUROPE.

JAY POWELL WILL BE AT THE SUMMIT AS WELL.

THE BENCHMARK IS DOWN CURRENTLY IN THE SESSION .5% HERE IN

EUROPE.

THERE HAS BEEN A MOVE TO THE LONGER DATA PART OF SOVEREIGN

DEBT IN TERMS OF THE YIELD VERSION IN EUROPE.

THE MOST PRONOUNCED WE HAVE SEEN IN DECADES.

EURO-DOLLAR, 1.08 IT IS AN INTERESTING ONE.

HSBC AND THE WORK FROM HOME STORY ARE LOOKING TO MOVE OUT

OF THEIR ICONIC TOWER, POTENTIALLY MOVING BY 2026.

KRITI: IT IS FASCINATING TO SEE THAT

THOSE KIND OF MOVES ARE ACTUALLY HAVING AN IMPACT.

IT IS GOING TO BE INTERESTING TO SEE HOW THAT SUSTAINS BUT

LET'S GO BACK TO THE MAIN STORY OVER THE WEEKEND.

THE IMPACT OF THE WAGNER MERCENARY GROUPS BEING ASSESSED

AROUND THE WORLD.

MARIA, AND STORABLE WEEKEND, IS THE CRISIS OVER FOR VLADIMIR

PUTIN? IS EVERYTHING BACK TO NORMAL

FOR HIM? MARIA:

IT IS VERY DIFFICULT TO GAUGE BECAUSE THE KREMLIN AND VADA

MERRICK PUTIN HIMSELF HAVE GONE RADIO SILENT ON THIS TOPIC.

THE LAST TIME I SAW VLADIMIR PUTIN WAS ON THE SATURDAY

MORNING WHERE HE SAID THE COUNTRY WAS WITNESSING AND

EXPERIENCING ESSENTIALLY TREASON AND HE TALKED ABOUT

FATAL CONSEQUENCES. WHAT WE KNOW IS THAT THE HEAD

OF WAGNER'S DECIDED TO PULL BACK.

HE APPEARS TO BE ALIVE AND ON HIS WAY TO BELARUS.

HAD A BELARUS ASSOCIATE BROKER THIS DEAL BUT THE DETAILS OF IT

CONTINUE TO BE VERY MURKY. WHAT IS VERY MUCH WORKING AND

KICKING THIS MORNING IS THE KREMLIN PR MACHINE.

THIS MORNING, WE HAD FOOTAGE FROM THE DEFENSE MINISTER OF

RUSSIA ON A HELICOPTER. HE APPEARED TO BE INSPECTING

RUSSIAN TROOPS AND THE WAR IN UKRAINE.

A LOT OF THIS SIGNALING THAT IT IS BACK TO NORMAL BUT AGAIN,

THERE IS NO INFORMATION ON WHEN THE TAPE WAS RECORDED.

WHEN A LOT OF THE ISSUES HAVE BEEN A SOURCE OF TENSION FOR

MONTHS. THE TOP EUROPEAN TOP --

DIPLOMAT THIS MORNING SUGGESTING HE HAS CREATED A

MONSTER THAT HAS COME BACK TO HAUNT HIM AND NO MATTER WHAT

HAPPENS NOW, HIS IMAGE AS A MAN THAT CONTROLS EVERYTHING HAS

BEEN RATTLED ALREADY. TOM:

OF COURSE A LOT OF QUESTIONS ABOUT THE DEAL AND WHAT THIS

MEANS AND OF COURSE, IT WAS NEGOTIATED BY BELARUS.

HE IS APPARENTLY GOING TO BE HEADING THERE IN TERMS OF EXILE.

YOU HAVE BEEN SPEAKING TO A REALLY IMPORTANT PERSON IN

TERMS OF THE CONNECTIONS AROUND THE POLITICS OF BELARUS AND

THEIR VIEWS. EXPLAIN FOR US WHAT IS BEING

SAID BY THE OPPOSITION LEADERS. MARIA:

JUST TO RECAP ON THE SATURDAY, THE LEADER OF BELARUS, ALTHOUGH

AGAIN, WE SHOULD KNOW AND STRESSED INTERNATIONAL KENNEDY

HAS POINTED OUT MANY TIMES THEY BELIEVE HE RIGGED THE 2020

ELECTION. HE HAS A RELATIONSHIP WITH

VLADIMIR PUTIN THAT GOES BACK YEARS AND DECADES.

THIS IS AT TIMES A VERY TRANSACTIONAL RELATIONSHIP.

HE ANNOUNCED HE HAD MEDIATED BETWEEN THE TWO MEN AND CUT A

DEAL THAT NOW SEES FOR GOSHEN HAVING TO BELARUS.

I DID SPEAK WITH THE HEAD OF THE OPPOSITION WHO TOLD ME HE

IS NOT A HERO OR MEDIATOR AND IF YOU THINK HE IS DOING THIS

FROM THE GOOD OF HIS HEART YOU ARE PROBABLY WRONG.

>> WE FACE THREAT TO OUR INDEPENDENCE BECAUSE OF NUCLEAR

WEAPONS.

RUSSIAN FORCES IN BELARUS AND NOW POSSIBLE PROVISIONS OR

ARRIVAL TO OUR COUNTRY. AS FAR AS I UNDERSTAND, PER

GOSHEN LIKELY WILL NOT COME ALONE BUT WILL COME WITH HIS

MERCENARIES.

PROVISION MIGHT BE INVOLVED MILITARY TRADE OF ARMS. IT IS

NOT EXCLUDED THAT PER GOSHEN COULD BE INVOLVED IN ANOTHER

ATTACK ON UKRAINE FROM BELARUS TERRITORY.

MARIA: SHE CHALLENGED LUKASHENKO IN

THE 2020 ELECTION AND HAD TO GO INTO EXILE.

HER HUSBAND IS IN PRISON TO THIS DAY AS WE SPEAK SHE

POINTED AT THIS MOVE FROM PER GOSHEN THAT ADDS ANOTHER THREAT

TO THE INDEPENDENCE AND SOVEREIGNTY OF HER COUNTRY.

KRITI: MARIA TADEO IN BRUSSELS ALL

OVER THAT STORY FROM EVERY ANGLE. WE THANK YOU AS ALWAYS.

STICKING WITH THE FALLOUT. OIL IS ADVANCING AS BAXTER'S

WAY THE POTENTIAL FOR MORE TURMOIL IN RUSSIA AFTER A

SHORT-LIVED REBELLION IN THE MAJOR OPEC-PLUS PRODUCER OVER

THE WEEKEND. THE SAUDI ARAMCO CEO SAYS

DESPITE THE RECESSION RISKS IN SEVERAL COUNTRIES, THE

ECONOMIES OF DEVELOPING COUNTRIES ESPECIALLY CHINA AND

INDIA ARE DRIVING HEALTHY OIL DEMAND GROWTH OF MORE THAN 2

MILLION BARRELS PER DAY THIS YEAR. THAT IS HIGH BY HISTORICAL

STANDARDS. JOINING US NOW IS BLOOMBERG'S

WILL KENNEDY. TO SEE THE FALLOUT IN THE OIL

PRICES AT A TIME WHEN WE ARE

ALSO GETTING WEAK CONSUMER DATA, -- >> CLEARLY, WHAT

HAPPENED IN RUSSIA OVER THE WEEKEND IS IMPORTANT.

RUSSIA PRODUCES MORE THAN 10 MILLION BARRELS A DAY.

AND EXPORTS MORE THAN 80% OF THAT.

IT IS ACTUALLY CRUCIAL AND I THINK TRADERS WILL BE VERY

ALIVE TO THE POSSIBLE THREATS POSED BY INCREASING TURMOIL

INSIDE RUSSIA. IT IS WORTH SAYING THERE HAS

BEEN NO IMPACT ON OIL PRODUCTION AND WILL OF THE MOST

SALIENT FEATURES OF THE OIL MARKET HAS BEEN HOW RUSSIA HAS

BEEN ABLE TO MAINTAIN PRODUCTION AND GET THAT

PRODUCTION TO GLOBAL MARKETS. EXPORTS ARE RIDING HIGH AND

HAVE REJECT THOSE TOWARD ASIA CHINA AND INDIA.

IT IS ADDING TO THE OVERALL SUPPLY BALANCE WHICH, DESPITE

THE DEMAND FACTORS, THE WORLD HAS AMPLE SUPPLY FROM RUSSIA

AND ELSEWHERE. TOM: WHAT ABOUT WHEN IT COMES TO

SOFT COMMODITIES? THERE IS STILL THIS VISCERAL

SENSITIVITY.

THE STRATEGIST SAYS WE SHOULD BE FOCUSED ON WHEAT IN TERMS OF

THE REACTION FUNCTION OF RISK IN RUSSIA.

>> RUSSIA REMAINS ABSOLUTELY CRUCIAL TO THE GLOBAL FOOD

SYSTEM. A LOT OF THOSE EXPERTS COME

THROUGH THE BLACK SEA, COME THROUGH AREAS WHERE WE SAW A

LOT OF ACTION OVER THE WEEKEND. IF THERE IS MORE POLITICAL

TURMOIL IN RUSSIA, YOU COULD HAVE AN IMPACT ON WHEAT.

IN THE BACKGROUND, YOU HAVE THIS CONTINUING DEBATE OVER THE

AGREEMENT TO ALLOW EXPORTS OF WHEAT FROM UKRAINE WHICH IS

ALWAYS BUBBLING AWAY IN THE BACKGROUND WHETHER RUSSIA WILL

AT THE DAWN OF THAT AGREEMENT ARE NOT.

I THINK IT IS WORTH SAYING AGAIN THAT THE MARKET ACTUALLY

REMAINS FAIRLY MUTED WHICH I THINK REFLECTS THAT ALTHOUGH

THERE ARE HEIGHTENED RISKS, HEIGHTENED POLITICAL

POSSIBILITIES IN THE FUTURE, RIGHT NOW, THOSE KEY FLOWS OF

COMMODITY FROM RUSSIA ARE CONTINUING. TOM:

WILL KENNEDY ON THAT RELATIVELY MUTED RESPONSE FROM THE

COMMODITY MARKETS AS PRODUCTION EXPORTS CONTINUE AROUND OIL AS

WE WEIGH UP THOSE POTENTIAL FUTURE RISKS.

MORE JOB CUTS FOR BIG BANKS. GOLDMAN SACHS HAS STARTED

CUTTING MANAGING DIRECTORS ACROSS THE GLOBE.

JOINING US NOW IS TOM METCALF. WHAT WE MAKE OF THESE CUTS?

THIS IS A STEADY DRIP DRIP OF CUTTING TO THE BONE FOR SOME OF

THESE BANKS. IS THERE MORE TO COME?

>> THAT IS EXACTLY RIGHT. THIS IS ONE OF A SERIES OF CUTS

WE HAVE BEEN REPORTING ON.

MY TAKE AWAY IS THIS IS NOT THE END OR ANYTHING LIKE THAT.

I SUSPECT THERE WILL BE PLENTY MORE OF THESE STORIES GOING

FORWARD.

THERE REALLY IS NOT ANY KIND OF DEAL FLOW IN THERE.

THIS IS HOW THE BANKS ARE GOING TO RESPOND.

IT IS DEFINITELY A BIG DOWNTURN FOR THIS PART OF THE INVASIVE

-- INVESTMENT WORLD. KRITI: I WANT TO STICK WITH THE

BANKING STORY BECAUSE IN YOUR CAREER, HE ALSO SPENT TIME IN

SAN FRANCISCO.

I WANT TO TALK TO YOU ABOUT THE DEVELOPMENTS AROUND THE

REMNANTS OF SILICON VALLEY BANK. WHAT IS THE SURPRISE?

>> I LOVE THIS STORY ABOUT WHO ARE THE PEOPLE WHO BENEFITED

FROM THE RESCUE. THE THING THAT JUMPED OUT FROM

OUR STORY WAS SEQUOIA, THAT IS TOP-TIER VENTURE CAPITAL FIRM

THAT HAD SOMETHING LIKE $1 BILLION ON DEPOSIT AT SVB.

FOR ME, THAT IS INTERESTING THING IS WHENEVER YOU HAVE

THESE MASS RESCUES, IT TURNS OUT IT IS PEOPLE WHO MAY BE DID

NOT REALLY NEED THAT WHO GET IT. YOU HAD TO AND A BEIJING-BASED

TECH FIRM AS WELL. THAT ALL GOT SORT OF GUARANTEED

BY THE U.S. GOVERNMENT. TOM: $1 MILLION IN DEPOSIT.

TOM RUNNING A SURROUNDING UP THE TOP BANKING NEWS FOR US.

COMING UP, FIGURING SENIOR ECONOMIST JOINS US AND WE ARE

TALKING ABOUT RUSSIAN GEOPOLITICS AND ALSO WEAKER

EUROPE AND INFLATION DATA COMING OUT AND U.S.

STOCKS ARE NOW AT A REAL JUNCTURE.

MORE ON THAT STILL AHEAD. THIS IS BLOOMBERG.

KRITI: THIS IS "BLOOMBERG SURVEILLANCE

EARLY EDITION. ."

GLOBAL MARKETS IS STAYING RELATIVELY MUTED AS INVESTORS

ASSESS A WEEK IN A GEOPOLITICAL TURMOIL.

JOINING US NOW IS THE SENIOR ECONOMIST OVER AT BERENBERG.

YOU PICKED A PERFECT DAY TO JOIN US BECAUSE THERE ARE SOME

OF A DIFFERENT CROSSCURRENTS. AS WE SEE THE READOUT IN THE

COMMODITY SPACE AT A TIME WHEN INFLATION IS STILL TOP OF MIND,

HOW BIG OF A DEAL IS THIS WHEN YOU'RE FACTORING IT INTO YOUR

ECONOMIC MODELS?

>> IT'S NOT ACTUALLY EASY TO SEE WHAT THE CONSEQUENCES ARE.

I THINK IF THE WEEKEND ON SATURDAY CERTAINLY LOOK LIKE WE

HAD VERY SIGNIFICANT THINGS HAPPENING.

IT DID NOT HAPPEN SO MARKETS NOW NEED TO CONTEMPLATE WHAT

THE FUTURE HOLDS. THE ISSUE IS AROUND PUTIN.

HOW SECURE IS HE, DOES THAT AFFECT THE COURSE OF THE WAR,

DOES THE UNCERTAINTY ON THE RUSSIAN SIDE AFFECT THE WAY

UKRAINE CAN CONDUCT ITS COUNTEROFFENSIVE.

THERE IS THIS PHRASE THAT YOU OFTEN HEAR, THE FOG OF WAR.

THAT IS AS HIGH AS IT HAS EVER BEEN AND MARKETS WILL HAVE A

VERY HARD TIME GAINING VARIOUS SCENARIOS.

I DON'T REALLY THINK THERE'S ANYTHING MATERIAL IN THE NEWS

THAT MARKETS CAN TAKE RISK ON THIS MOMENT AT THIS TIME. KRITI:

IS THAT A FUNCTION SIMPLY OF THE SANCTIONS THAT HAVE BEEN

PLACED ON THE RUSSIAN ECONOMY? IS THAT THIS IDEA THAT THE

READTHROUGH THAT PERHAPS MARKETS WERE WATCHING A YEAR OR

SO AGO JUST DON'T APPLY ANYMORE BECAUSE OF THOSE STEPS TAKEN?

>> THERE IS AN ELEMENT OF THAT AND ALSO I WOULD KEEP IN MIND

THAT MOST OF THE ADVANCED WORLD NOW IS BASICALLY UNCOUPLED FROM

THE RUSSIAN ECONOMY. THE ADJUSTMENT IN THE ENERGY

SECTORS AND FOOD SECTORS IS NOW ALMOST COMPLETELY MADE.

WE STILL HAVE SOME LEGACY EFFECTS ON PRICES.

MOST OF THE ECONOMIC ISSUES WE HAD TO DEAL WITH ON THE WESTERN

FRONT IS HOMEGROWN.

NEAR TERM, WAR IS NEVER GOOD, THERE'S UNCERTAINTY AROUND

CERTAINLY SOME OF THE VERY SIGNIFICANT TAIL RISKS.

HOW DOES A LESS STRONGER-THAN-EXPECTED PUTIN

REACT TO THIS. THE MOST IMPORTANT THING IS, WE

ARE ACTUALLY LEARNING TO LIVE WITH THE RISK OF WAR.

ECONOMIES FUNCTION BETTER THAN EXPECTED.

INFLATION SEEMS TO BE A BIT WORSE.

THE NEWS OF THE WEEK AND IS POTENTIALLY -- MATERIAL FOR THE

COURSE OF THE WAR BUT IT IS MY EASY TO SEE WHAT THE

READTHROUGH SHOULD BE AT THIS STAGE. TOM:

AND EUROPE IS DEALING LARGELY FROM RUSSIAN OIL AND GAS.

IT GOT THROUGH THE WINTER AND NOW THE DATA IS LOOKING PRETTY

UNFAVORABLE.

THE ESA'S SENTIMENT OUT TODAY IS THE LOWEST LEVEL WE HAVE

SEEN YEAR TO DATE. IS IT BASE CASE THAT YOU ARE

GOING TO SEE A RECESSION IN EUROPE AND HOW DEEP IS THAT

RECESSION LIKELY TO BE?

>> NO RECESSION IN EUROPE. STAGNATION FOR A FEW MORE

QUARTERS ARE STILL HIGH BUT STILL NO RECESSION.

IN THE U.S., THERE IS PROBABLY LIKELY TO BE A FED ENGINEERED

MANY RECESSION. WE NEED TO SPLIT THE TWO ISSUES.

LET'S GO BACK A YEAR AGO, THE EXPECTATION WAS TWO PHASES OF

PAIN. HEADING INTO LAST WINTER, YOU

GET THE PAIN FROM THE ENERGY SHOCK.

THE SECOND PHASE OF PAIN IS MONETARY POLICY.

WHEN START TO KICK IN? THE FIRST PHASE, EUROPE MANAGE

MUCH BETTER THAN EXPECTED. A BIG PRICE SHOCK RELATIVE TO

INITIAL EXPECTATIONS FOR A RECESSION, MAYOR STAGNATION

TURNED OUT TO BE A VERY GOOD OUTCOME.

NOW THE QUESTION IS WHAT EFFECT DOES THAT HAVE ON ECONOMIES?

KEEP IN MIND THE REASON WHY ECONOMIES HAVE BEEN BETTER THAN

EXPECTED IS DEMAND HAS BEEN MUCH MORE RESILIENT.

WHEN YOU TRY TO FACTOR IN NEGATIVE SHOCK FROM INITIAL

POLICY IN A CONTEXT OF STRONG DEMAND, IT MAY JUST BE THAT YOU

GET STAGNATION FOR A WHILE. THE RISK HERE IS THAT IF

INFLATION RISK SEEMS TO PERSIST, CENTRAL BANKS GO TOO

FAR AND THEN YOU GET THE RECESSION.

WE SEEM TO BE TOLERATING HIGHER INTEREST RATES MUCH BETTER THAN

EXPECTED. TOM:

ON THOSE POTENTIAL RISKS GOING TOO FAR, MARKETS NOW PRICING

AROUND 3.9%. DO YOU SAY SUB 4% IN TERMS OF

THE ECB AND ARE THE DUBS GOING TO HAVE MORE RISK TO THE NAIL

IN TERMS OF THE DATA PUSHING THROUGH TO PUSH BACK ON SOME OF

THE HOCKS PUSHING FOR MORE AND LONGER?

>> IT IS COMPLICATED BECAUSE THERE IS A REAL TRADE-OFF

BETWEEN REACTING TO NEAR-TERM INFORMATION WHICH IS ALWAYS

VERY UNCERTAIN, PREDICTING MONTHLY CPI IS IMPOSSIBLE.

AND KNOWING WHAT THE POLICY WILL DO OVER A 12 MONTH PERIOD

WHEN IT COMES TO INFLATION. I THINK FROM THE ECB, WE GET

ONE OR TWO MORE HIKES. THE QUESTION IS THEN, CAN

CENTRAL BANKS HOLD THEIR NERVE IF YOU FACE NEAR-TERM ART

UPSIDES AND PRICES. THE BANK OF ENGLAND IS NOT

HOLDING ITS NERVE. WILL THE FED? THAT IS AN OPEN QUESTION.

THE RISK HERE IS THAT WITH THE LIKES OF MONETARY POLICY, IF

YOU REACT TO POTENTIAL NEAR-TERM UPSIDE THE PRICES AND

GO ANOTHER 50 OR 100 BASIS POINTS, THEN YOU OVERCORRECT.

THEN LATER THIS YEAR YOU START TO SEE THE RECESSION.

THE RISK THAT MARKETS SHOULD KEEP IN MIND IS CENTRAL BANKS

SAY THEY ARE FORWARD-LOOKING BUT REACT FAR TOO MUCH TO

INCOME AND ECONOMIC DATA AND ARE BACKWARD LOOKING IN THEIR

ASSESSMENT TOO OFTEN.

WE OVER EASED IN 2020 AND 2021. WE PROBABLY DID THE RIGHT THING

LAST YEAR AND NOW THE RISK IS THAT WE OVER TIGHT IT TO THE

DEGREE THAT CENTRAL BANKS GO WAY TOO FAR AND WE HAVE TO

RAISE A RECESSION CALL. BUT TO THE EXTENT THAT THE

ECONOMY SEEMS TO BE TOLERATING HIGHER INTEREST RATES.

IF THEY HOLD THEIR NERVE PROBABLY WE DON'T SEE ANY

ECONOMIC RISK FROM THAT. KRITI: LET'S TALK ABOUT THE OTHER

REASON WE HAVE MY HIT YET WITH THE -- WHICH IS CHINA.

THE WEAK CONSUMER SPENDING DATA ADDING TO THE DAY LOSE.

MASSIVE MARKET REACTION.

WHAT IS THE READTHROUGH INTO EUROPE, INTO THE UNITED STATES

WHEN THE CHINESE WE OPENING TRADE IS STILL NOT FULLY AT

PLAY HERE? IS IT THE SAME READTHROUGH SAY

WE WOULD'VE GOTTEN 15 YEARS AGO? >> THE FIRST THING I WOULD

MENTION FOR EUROPE, IT IS NOT SO MUCH THE CHINESE CONSUMER

THAT MATTERS FOR EXPERTS -- EXPORTS, IT IS INVESTMENT.

WHEN CHINA HAS A STRONG INVESTMENT IT SETS IN A LOT OF

CAPITAL GOODS FROM ABROAD AND A LOT OF EUROPEAN CAPITAL GOODS.

SO FAR, THE DISAPPOINTMENT FOR EUROPE IS NOT SO MUCH BEEN THE

CHINESE CONSUMER BY CHINESE INVESTMENT WHICH HAS BEEN WEEK.

WHAT I WOULD SAY AT THIS STAGE IS IF CONSUMERS IN CHINA REMAIN

WEEK, BUT WILL INCREASE THE PROBABILITY THAT THE CHINESE

AUTHORITIES RESPONSE. THEY CAN DO THAT FOR THE

MONETARY CHANNEL, THE FISCAL CHANNEL.

WHAT WE MIGHT SEE IN THE COURSE OF THIS IS IF CHINA CONSUMER IS

WEAK ENOUGH FOR A POLICY REACTION ON THE FISCAL SIDE AND

TO GET MUCH MORE INVESTMENT INTO THE SECOND HALF OF THIS

YEAR AND INTO NEXT YEAR, THE NEW MIGHT SEE AFTER A

SHORT-TERM NEGATIVE SURPRISE TO GLOBAL TRADE BECAUSE OF WEAK

CHINA, YOU THEN GIVE AN UPSIDE SURPRISE ONCE THAT INVESTMENT

STARTS UP. TOM: WATCHING THAT REACTION TO

POTENTIALLY WEAKER AND MAY BE SUSTAINED WEAKER CHINESE

CONSUMER ACCOUNT. HITTING THE RUSSIA EFFECT.

THE ECB CENTRAL BANK AND BANKS AND WHAT TO WATCH WHEN IT COMES

TO CHINA'S STILL UNDER PRESSURE ECONOMY.

STAYING WITH THE EUROPE STORY AND POLITICS, GREECE HAS SCORED

A LANDSLIDE VICTORY. THE NEW ELECTORAL SYSTEM AWARDS

AS MANY AS 50 SEATS TO THE WINTER.

IT IS GOING TO ALLOW HIM TO FORM A SINGLE PARTY GOVERNMENT

AND INVESTOR FRIENDLY POLICIES IS WHAT HE IS GOING TO BE

HOPING TO IMPLEMENT. GIVEN WHERE WE WEAR WITH GREECE

12 OR 13 YEARS AGO, GREECE IS NOW STANDING OUT ACROSS THE

EUROPEAN POLITICAL SPACE AS A BASTION OF POLITICAL STABILITY.

ANOTHER FOUR YEARS OF THE MARKET FRIENDLY.

>> THE IRONY WE ARE WORRIED ABOUT RUSSIA AND CHINA AND THE

REST BUT GREECE SEEMS TO HAVE IT TOGETHER STANDS OUT TO ME.

THEY ARE OUTPERFORMING ON THE EQUITIES FRONT, ON THE BOND

FRONT. WHO WOULD HAVE THOUGHT 15 YEARS

AGO THAT IF YOU BUY GREEK BONDS IN 2023, YOU WOULD BE

OUTPERFORMING THE REST OF THE WORLD? TOM:

ATHENS A STOCK EXCHANGE OF A MORE THAN 30% YEAR TODAY AND

UNEMPLOYMENT HAS HAVE TO. THEY HAVE DONE WELL ON THAT.

THE NEXT THING TO WATCH AND IT IS SOMETHING THE GOVERNMENT IN

ATHENS IS DETERMINED TO ACHIEVE IS GETTING THE RATINGS AGENCIES

TO IMPROVE THE RATING ON SOVEREIGN DEBT.

THE RATINGS AGENCIES ARE EXPECTING TO REASSESS IN THE

SECOND HALF OF THIS YEAR. IF IT MOVES OUT, THAT IS GOING

TO BE ANOTHER FEATHER IN THE CAP. KRITI:

ONE OF THE CONCERNS IS HOW SUSTAINABLE THIS GROWTH IS

BECAUSE AT THE END OF THE DAY, A GOOD CHUNK OF THAT IS COMING

FROM TOURISM FROM THE UNITED STATES AND EUROPE AS WELL.

BUT IN A DOWNTURN OR A RECESSION THAT WE HAVE

EXPECTING FOR TWO YEARS OR SO, HOW LONG DOES THAT GROWTH

REALLY SUSTAINED? I THINK THERE ARE GOING TO BE

GEOPOLITICAL CONSEQUENCES GIVEN HIS MAIN PILLARS AND PLATFORMS

WAS THE ECONOMIC GROWTH. TOM:

THEY HAVE A MAJORITY BUT HE HAS DUG UP THESE RIGHT-WING PARTIES

THAT ARE GOING TO BE POTENTIALLY NIPPING AT HIS

HEELS AND CAUSING CONTROVERSY. AS YOU SAY, IT IS SIGNIFICANT

IN TERMS OF THE MAKEUP AND THE FABRIC OF EUROPEAN POLITICS AND

WE WILL SEE HOW HE PUTS HIS CABINET TOGETHER AS WELL IN THE

DAYS AND WEEKS AHEAD. KRITI: ABSOLUTELY AND I THINK THE

CRUCIAL PIECE THAT YOU JUST MENTIONED, NOT THE LAST WEEK,

THERE WAS THAT TRAGIC CAPSIZING OF THE BOAT OFF THE

MEDITERRANEAN COAST. THERE WERE CONCERNS THAT WERE WAY ON HIS

PLATFORM. IT LOOKS LIKE IT DID NOT AND

LIGHT OF THE ECONOMIC SUCCESS. TOM:

COMING UP, MARKETS ASSESSING A WEEKEND OF GEOPOLITICAL TURMOIL.

WE WILL HAVE MORE ON THE AND THE FOCUS ON RUSSIA.

STAY WITH US. THIS IS BLOOMBERG. ♪

KRITI: THIS IS BLOOMBERG SURVEILLANCE

EARLY ADDITION.

AN EERIE CALM FALLS ON RUSSIA. INVESTORS ASSESS THE RISKS AND

POTENTIAL FOR FURTHER TURMOIL. CHINA SUPPRESSES SUPPORT FOR

RUSSIA'S EFFORTS TO MAINTAIN STABILITY AS DIPLOMATS MEET.

CONSUMER SPINNING DATA ADDS TO ECONOMICALLY. FOUR JOB CUTS.

GOLDMAN DISMISSING MANAGING DIRECTORS AMID A JOB SLUMP.

TOM, A LOT TO DIGEST. INFLATION, RECESSION ON TOP OF

MINE. I THINK GEOPOLITICS TAKES THE

CAKE TODAY. TOM:

GEOPOLITICS IS DRIVING INTEREST TO FIND OUT WHAT IS GOING ON,

WHAT THAT DEAL MEANS BETWEEN PUTIN AND THE HEAD OF THE

WAGNER GROUP FOLLOWING THAT ATTEMPTED MUTINY OVER THE

WEEKEND. WHEN IT COMES TO MARKETS, IT IS

MORE ABOUT THE DATA, RECESSION RISKS AND THE DETERMINATION OF

THE CENTRAL BANKS TO GO HIGHER AND LONGER ON INTEREST RATES.

HEADED TO SENTRA AND THAT SYMPOSIUM WHERE WE ARE GOING TO

HEAR FROM JAY POWELL, ANDREW BAILEY OF THE BOE.

EUROPEAN EQUITIES DOWN .4%. BUILDING ON THE LOSSES WE SAW

LAST WEEK. THE EURO, WHICH TOOK A HIT ON

THE BACK OF SOFT DATA,

PARTICULARLY THE PMI'S, DOWN 1.08.

THE BUSINESS SENTIMENT SURVEY OUT OF GERMANY DROPPING TO THE

LOWEST LEVEL TO DATE, UNDERSCORING THE CONTINUED

FRAGILITY AROUND THE GERMAN ECONOMY STRUGGLING TO MOVE ON

FROM ITS PERCEPTION IT LAUNCHED IN THE FIRST QUARTER.

YIELDS DOWN FIVE BASIS POINTS, 2.30 AS GERMAN LONG INTO DEBT

REMAINS.

WORK FROM HOME IS READJUSTING HOW MUCH SPACE THEY THINK THEY

NEED. WHAT IS THE SET UP LOOKING LIKE

FOR U.S.? KRITI: I THINK THE MICRO STORY, THE

TURN IN THE BANKING SECTOR NOT HAVING A READ THROUGH STATESIDE

RIGHT NOW. IT IS MOSTLY MACRO AND ASIA

DRIVEN. CONSUMER SPENDING DATA OUT OF

CHINA SENT THE CHINESE SHANGHAI COMPOSITE INDEX DOWN, TAKING

THE BENCHMARK LOWER. RECORD LEANNESS IN THE OFFSHORE.

STEMMING THAT DECLINE, IT DID NOT WORK.

SEEING DOLLAR YUAN AT 7.23. THE READTHROUGH IS INTERESTING.

YOU MENTIONED RECESSION CONCERNS AND GROWTH CONCERNS.

THAT SEEMS TO BE WEIGHING ON FUTURES WHICH OVERNIGHT OPEN

POSITIVE, PERHAPS IN LIGHT OF RUSSIAN NEWS. FUTURES DOWN .13%.

IT IS 530 DOWN -- 3.69 ON THAT 10 YEAR YIELD.

TOM: LET'S GET BACK TO THE RUPTURES

IN RUSSIA. VLADIMIR PUTIN FACED WHAT WAS

THE BIGGEST CHALLENGE TO HIS TWO DECADE RULE WITH THAT

SHORT-LIVED MUTINY.

THE BAG IN HER MERCENARY -- WAGONER MERCENARY GROUP.

TWO AND THE WHAT HE FOR OUR REVOLT. JOINING US FOR MORE IS

BLOOMBERG'S MARK CHAMPION, IN KYIV.

GIVE US WHAT WE KNOW ABOUT THIS DEAL AND WHETHER OR NOT IT IS

LIKELY TO HOLD. MARK: ESSENTIALLY, WE KNOW VERY

LITTLE ABOUT THE CONTENT OF THE DEAL.

WE KNOW THAT HE TOOK DOWN, HE HAD SEVERAL THOUSAND TROOPS ON

THE WAY TO MOSCOW. THEY DISPERSED AND WE DO NOT

KNOW WHERE HE IS NOW.

HE IS GONE, ACCORDING TO HIS PRESS PEOPLE HE WILL GET BACK

ONLINE AS SOON AS HE IS IN NORMAL COMMUNICATIONS POSITIONS.

AS TO THE DEAL, WE KNOW THERE IS SOME ELEMENT WHERE THE

WAGNER TROOPS WILL BE OFFERED THE POSSIBILITY AND AMNESTY AND

POSSIBILITY OF SIGNING CONTRACTS WITH THE REGULAR ARMY.

WE DO NOT KNOW MUCH. HE HAD SEVERAL DEMANDS.

ONE OF THEM INCLUDED THE RESIGNATION OF DEFENSE MINISTER

SHOWING GOUT, SHOWN ON TV THIS MORNING VISITING TROOPS IN

UKRAINE. WE DO NOT KNOW WHAT HAPPENED

THERE. WE DO NOT KNOW IF WE ARE AT THE

BEGINNING OR THE END OF THIS PARTICULAR CYCLE, SO WE COULD

SEE SOME MORE SURPRISES AND WE JUST DO NOT KNOW. TOM:

YOU ARE ON THE GROUND IN KYIV AND HAVE BEEN THERE A NUMBER OF

WEEKS. WHAT IS YOUR SENSE OF HOW, IN

TERMS OF HOW THE INITIATIVE IS UNFOLDING FOR THE UKRAINIAN

ARMED FORCES AS THEY PURSUE THIS OFFENSIVE?

DOES IT PLAY TO THEIR ADVANTAGE? HOW IS IT AFFECTING OPERATIONS

ON THE GROUND? MARC: WE HOPE IT WILL.

THEIR CALCULATION IS ANYTHING THAT IS BAD FOR PUTIN, ANYTHING

THAT DISTURBS THE REGIME, MAKES THEM FOCUS ON INTERNAL ISSUES,

HAS GOT TO BE GOOD FOR UKRAINE, HAS GOT TO EVENTUALLY BE SOME

-- WHETHER THAT IS THE CASE, WE WILL HAVE TO WAIT AND SEE.

SO FAR, THE DAILY NEWS OF WHAT IS GOING ON DOES NOT SHOW ANY

DIRECT LINK TO EVENTS IN RUSSIA. EVERY DAY, THERE ARE MOVEMENTS

BY EITHER SIDE.

THE UKRAINE'S AFTER THE COUNTEROFFENSIVE IN THE SOUTH,

THEY ARE PURSUING THAT. THERE ARE SOME MOVES THAT LOOK

DIFFERENT THAN WHAT HAVE BEEN HAPPENING IN PREVIOUS DAYS.

KRITI: THAT IS THE PHYSICAL MOVEMENTS

OF THE KEY PLAYERS THERE. TALK TO US ABOUT THE DISINFORMA

TION CAMPAIGN. WHAT STOOD OUT ABOUT HIS RESUME

IS THAT IN 2016 WITH THE MEDDLING OF THE U.S.

ELECTIONS, ONE -- HE WAS ONE OF THE PEOPLE TO IMPLEMENT THAT

DISINFORMATION CAMPAIGN. WHAT DOES DISINFORMATION LOOK

LIKE RELATIVE TO THIS ISSUE NOW? MARC:

THE KREMLIN IS TRYING TO PER SE -- PORTRAY BUSINESS AS USUAL.

IT HAS BEEN PUNCTURED.

HE MOVED WAY OFF SCRIPT BY ATTEMPTING THIS, NOT A COUP.

HE SAID IT WAS NOT A COUP ATTEND.

AS FAR AS WE KNOW, IT WAS NOT.

WHAT HE WANTED WAS, HE RUNS THIS BIG MERCENARY GROUP

WAGNER, THEY HAVE A LOT OF POWER IN AFRICA BUT HAVE BEEN

INVOLVED IN UKRAINE. THE THREAT TO HIM WAS THAT

WAGNER WAS GOING TO BE DISMANTLED AND HE WAS GOING TO

LOSE HIS MONEY, HIS BASE, HIS EVERYTHING.

HE MADE THIS MOVE WHAT HE WANTED. WE CANNOT BE SURE.

PUBLICLY, HE SAID HE WANTED THE RESIGNATION OF OFFICIALS HE HAS

BEEN FEUDING WITH A FEW MONTHS. BEYOND THAT, WE DO NOT KNOW A

GREAT DEAL ABOUT WHAT WAS GOING ON IN PRIVATE CONVERSATIONS.

KRITI: MARK CHAMPION REPORTING LIVE ON

THE GROUND IN KYIV. WE THANK U.S. ALWAYS.

STAY SAFE, WE LOOK FORWARD TO WHAT YOU HAVE TO REPORT.

FOR MORE ANALYSIS, LET'S BRING IN THE POLITICAL SCIENTIST

SPECIALIZING IN THE LEGISLATIVE PROCESS IN MODERN RUSSIA.

WALK US THROUGH THIS DYNAMIC MARK JUST LAID OUT, THE IDEA HE

CLAIMS THIS WAS NOT A COUP ATTEMPT AGAINST VLADIMIR PUTIN

HIMSELF, BUT RATHER AGAINST THE DEFENSE MINISTER.

SHED LIGHT ON THE DYNAMIC BETWEEN PRIGOZHIN AND DEFENSE

MINISTER SHOWING GOUT.

>> IT DID LOOK MORE LIKE A BUSINESS DEAL THAN A POLITICAL

MOVE.

THE POPULAR DISCRETION OF RUSSIA AGAINST -- IS A COUNTRY

IS UNFAIR BUT WE HAVE A CHAIN OF SHADY BUSINESS MASQUERADING

AS POLITICAL LEADERSHIP, MAY BE CLOSER TO TRUTH.

IT IS TRUE PRIGOZHIN GAINED AGAINST THE DEFENSE MINISTER.

BUT RECENTLY, SOME OF THE THINGS HE SAID IT SEEMED TO

POINT RACKLEY TO THE PRESIDENT AND -- DIRECTLY TO THE

PRESIDENT AND HIS SCRIPTION FOR THE MARCH OF JUSTICE, WHICH IS

THE NAME HE GAVE TO HIS PERSONAL PRIVATE DEFENSIVE, WAS

THAT WE SHOULD STOP BELIEVING THE CORRUPTION, ETC.

THIS WAS A DESCRIPTION OF POLITICAL SYSTEM IN GENERAL,

RATHER THAN SOMETHING DYSFUNCTIONAL AT THE DEFENSE

MINISTRY. SO, HE WAS TRYING TO CREATE

SOME SORT OF PUBLIC, POLITICAL POSITION FOR HIMSELF.

HE EVEN BEFORE THAT ATTEMPTED COUP OR NEW NEEDS, HE MADE A --

OR MUTINY'S, MAKING SPEECHES AND LOOKING ALL IN ALL LIKE A

POTENTIAL PRESIDENTIAL CAMPAIGN. THAT AGAIN WAS BASED ON HIS

DISSATISFACTION WITH THE WAY HE WAS TREATED.

IF WE LISTEN TO WHAT HE SAYS, HE SAID WE HAD A LUCRATIVE

BUSINESS IN AFRICA, WE, WAGNER DID.

BUT, MOTHERLAND WAS IN DANGER. WE HELPED.

THEY ARE NOT TREATING US FAIRLY. NOW, THEY WANT TO DISMANTLE

WAGNER. EITHER PAY US OR LET US GO BACK

TO AFRICA TO MAKE MONEY. IT WAS VERY MUCH IN THE OPEN,

SO THERE WAS THE BUSINESS PART AND THE POLITICAL PART.

JUDGING BY THE EVENTS OF THIS WEEKEND, THE BUSINESS PART WON

OVER THE POLITICAL. KRITI: I LOVE THAT YOU TALKED ABOUT IT

AS A KIND OF THROUGH THE BIDS THIS -- THROUGH THE BUSINESS

LINENS. YOU TALKED ABOUT THE POTENTIAL

UNWINDING OF THE WAGNER WEGNER -- WAGNER NETWORK.

IS IT LIKELY HE REMAINS THIS MILLIONAIRE IN MINSK?

WHAT DOES HIS FUTURE LOOK LIKE? EKATERINA:

I DO NOT THINK WE SHOULD CONCERN OURSELVES WITH HIS

PERSONAL FUTURE. WHAT I WOULD BE LOOKING AT IS

THE FATE OF THE INSTITUTION, WAGNER, WHICH IS NOT THE ONLY

PRIVATE MILITARY COMPANY IN RUSSIA BUT BY FAR THE MOST

PUBLIC ONE. WHAT WAS HAPPENING DURING THIS

LAST WEEK'S CAN BE DESCRIBED AS AN ATTEMPT ON THE PART OF

MINISTRY OF DEFENSE TO GET BACK ALL THE ARMED FORCES UNDER ITS

WING. SO, THE REGULARS WERE TRYING TO

GET RID OF THE IRREGULARS BY EITHER ABSORBING THEM OR

DEALING WITH THEM OTHERWISE.

YOU SHOULD REMEMBER HOW THE DEPUTY MINISTER OF DEFENSE

DECLARED BY JULY FIRST, THE VOLUNTEERS SHOULD SIGN CONTACTS

WITH THE MINISTRY OF DEFENSE. AND SO BECOME REGULAR,

CONTRACTED SOLDIERS UNDER THE DEFENSE MINISTRY AND PRIGOZHIN

REFUSED PUBLICLY TO DO THIS, EVEN AFTER THE PRESIDENT

SECONDED THIS ORDER BY SAYING THAT IT IS FOR THE GOOD OF THE

SOLDIERS SO THEY CAN HAVE SOCIAL GUARANTEES FROM THE

STATE, ETC. SO, THEY SHOULD SIGN THE

CONTRACT BUT PRIGOZHIN SAID NO. USING IN HIS DESCRIPTIVE

LANGUAGE OF PHRASE, WE WILL NOT GO DOWN BY THE PATH OF

DISORDER, WHICH IS COLORFUL. THAT WAS THE NUCLEUS OF THE

CONFLICT. NOW, WHAT WE WANT TO SEE IS

WHAT HAPPENS TO WAGNER? ARE THEY BEING DISMANTLED?

ARE SOME PEOPLE, WILL SOME PEOPLE BE PROSECUTED FOR MUTINY

OR FOR OTHER CRIMES CONNECTED WITH THE THINGS THEY USUALLY DO?

WILL THEY BE MADE TO SIGN CONTRACTS OR MAYBE GIVEN A

CHOICE OF EITHER SIGNING CONTACTS OR GOING HOME

SCOT-FREE? THIS IS INTERESTING, RATHER

THAN WHAT HAPPENS TO PRIGOZHIN. PEOPLE OF HIS BUSINESS MODEL

READILY DIE A NATURAL DEATH. TOM: WOW. YES.

HISTORY BEARS THAT OUT, AT LEAST RECENT HISTORY IN RUSSIA.

I WANT TO FOCUS ON WHAT HAPPENS WITH WAGNER NOW, GIVE US A TELL

IN TERMS OF THE SUCCESS OF PUTIN TO ABSORB THAT MILITARY

GROUP INTO THE TRADITIONAL RUSSIAN, WHETHER OR NOT AT

SHOWS PLUTO'S -- POLITICAL SUPPORT.

I WENT TO REFERENCE ONE OF OUR BLOOMBERG OPINION COLUMNISTS.

THIS IS ONE OF THE QUOTES THAT STANDS OUT.

PUTIN HAS NOT FOR THE FIRST TIME BUT ADEQUATE A MOMENT

SHOWN WEAKNESS, EVEN THOUGH PRIGOZHIN DID NOT WIND HIS

MUTINY MOVE EXPOSED BRITTLENESS TO ALL WHO WANTED TO EXPLOIT IT.

THE EMPEROR IS NAKED. HOW EXPOSED IS PRUDENT AT THIS

POINT? EKATERINA: OF COURSE, IT IS HARD TO

INTERPRET THE EVENTS OF THIS WEEKEND IN ANY OTHER WAY AS A

SIGN OF WEAKNESS OR IN THE LINKAGE OF POLITICAL SCIENCE,

AUTOCRATIC FRAGILITY, WHICH IS ONE OF OUR BASIC CONTACTS BUT

-- CONCEPTS BUT HARD TO EXPLAIN. THEY PROJECT THE IMAGE OF

STRENGTH, MAYBE RUTHLESSNESS, EFFECTIVENESS, STABILITY,

WHATEVER. BUT, THEY ARE QUITE FRAGILE.

THEY CANNOT DO POWER TRANSFERS. THEY CANNOT DO POWER TRANSFERS

THE WEIGHT MAXIS CAN DO IT. THEY DEPEND ON PERSONALITIES.

WHEN SOMETHING HAPPENS TO THESE PERSONALITIES, SYSTEMS TEND TO

FALL APART.

IT IS EXOTIC TO LOOK AT, BUT QUITE TYPICAL AND OUT OF

TEXTBOOK. FOR THE MOMENT, THE PRESIDENT

IS IN HIS PLACE. THIS IS THE MOST WE CAN SAY.

WHAT I WOULD BE EXPECTING TO SEE IS THE EMERGENCE OF SOME

GROUP WHO WILL CLAIM TO HAVE SAVED THE MOTHERLAND WITH THE

PRESIDENT FROM THIS ARMED MUTINY.

WHO WILL BE THE SAVIORS OF THE NATION?

I THINK WE WILL SEE IT, IF WE SEE SOME PERSONAL CHANGES.

SO FAR, THE MINISTER OF DEFENSE HAS TRIED TO STEP TO THE PUBLIC

FRONT AND PROJECT THIS BUSINESS AS USUAL IMAGE YOU MENTIONED

EARLIER. BUT, WILL THERE BE CHANGES IN

THE DEFENSE MINISTRY? WILL THERE BE CHANGES IN THEIR

EFFORTS?

MANY INSIDERS HAVE NAMED OF THE GOVERNOR OF THE KIND OF PERSON

AS MANAGED THEIR STOP MARCH ON MOSCOW.

HE STOPPED ABOUT 200 KILOMETERS FROM -- >> WE ARE RUNNING OUT

OF TIME BUT APPRECIATE YOUR INSIGHT AND WHAT TO WATCH IN

THE DAYS AND WEEKS AHEAD WHEN IT COMES TO THE POLITICS OF

RUSSIA IN THE FATE OF BUDDHA -- AND THE FATE OF PUTIN.

COMING UP, WE SPEAK TO THE U.S. EQUITIES DESK STRATEGIST HOW TO

POSITION IN THIS ENVIRONMENT. STAY WITH US. THIS IS BLOOMBERG.

PRESIDENT AND CEO AT 11:30. THIS IS BLOOMBERG.

♪ KRITI: THERE IS A LOT TO DIGEST OVER THE WEEKEND AND

PERHAPS A REAL READTHROUGH WHEN IT COMES TO THE ECONOMY AND THE

U.S. STOCK MARKET. RICHARD FROM THE U.S.

EQUITIES -- EQUITIES DESK STRATEGIES FROM STIFEL JOINS US.

LET'S TIE GEOPOLITICS AND ECONOMICS TOGETHER.

I AM A HISTORY BUFF. BEAR WITH ME.

ONE OF MY FAVORITE REFERENCE POINTS TO LOOK AT ESPECIALLY IN

THE CONTEXT OF THE WAR IN UKRAINE WAS BACK IN THE 1960'S

WHEN YOU HAD A MASSIVE, NINE-MONTH BEAR MARKET -- 1962,

AND THE TRIGGER THAT TURNED IT AROUND IN THE U.S.

STOCK MARKET WAS THE ENDING OF THE CUBAN MISSILE CRISIS.

WHAT KIND OF POSITIVITY OUT OF THE WAR IN UKRAINE AND

POTENTIAL WEAKNESS IN RUSSIA COULD THAT BE A SUSTAINABLE

TAILWIND FOR THE U.S. EQUITY MARKET? RICHARD:

GOOD MORNING. GOOD TO SEE YOU. THANKS FOR HAVING ME.

YEAH, IT IS BEYOND FASCINATING WHAT IS HAPPENING IN RUSSIA.

I AM NOT A GEOPOLITICAL STRATEGIST OR SCIENTIST. I

LISTENED TO YOUR PRIOR GUEST. AS I WAS THINKING ABOUT IT OVER

THE WEEKEND, I WAS SURPRISED ASIAN MARKETS OVERNIGHT DID NOT

REACT MORE. I THINK PROBABLY HAVE TO BREAK

IT DOWN, AT LEAST THE WAY I AM THINKING ABOUT THIS.

THIS IS ALL FLUID. THERE IS A SHORT, MEDIUM AND

LONGER-TERM. IN THE SHORT TERM, MEDIUM TERM,

IF THERE IS A PER -- THE PERCEPTION, WHICH SEEMS TO BE

FROM THE WEST THAT PUTIN IS WEAKENED BY THIS COMEDY REGIME

IS -- WEAKENED BY THIS, THE REGIME IS -- THAT IS BENEFICIAL

TO THE UKRAINIANS INTERNAL STRIFE WITHIN RUSSIA.

THE LONGER-TERM RAMIFICATIONS ARE, SHOULD THIS BE A CATALYST

OR MOVING TOWARDS PUTIN'S REGIME TOPPLING OR IMPLODING

AND UKRAINE WINNING, WHAT IS THE VACUUM?

I AM A POPCORN HISTORY BUFF.

AFTER THE KEY HISTORIC EVENTS, VACUUMS FILL. WHAT FOLLOWS THAT?

THAT IS THE UNKNOWN AT THIS POINT. AS IT PERTAINS TO U.S.

EQUITY MARKETS OR GLOBAL EQUITY MARKETS, I THINK THERE IS

MEDIUM-TERM, LONGER-TERM VIEW. TOM:

RICHARD, DO YOU WANT TO BE -- DO YOU START TO PUT IN

POSITIONS AROUND PUTIN AND THE PROSPECT OF A UKRAINIAN VICTORY

AND THE UPSIDE THAT MAY COME THROUGH THAT ACROSS EQUITIES,

OR IS IT TOO SOON? RICHARD: I THINK IT IS STILL TOO SOON.

IT IS FLUID. NEVERTHELESS, IT SEEMS OVER THE

COMING DAYS AND WEEKS THAT RUSSIA IS ON THE BACK FOOT OF

THE UKRAINIAN BUSH, THE COUNTEROFFENSIVE STARTS TO GET

MOMENTUM. I WOULD THINK MARKETS WOULD

LIKE THAT ACROSS THE WARD DASHBOARD --ACROSS THE BOARD.

I WILL DEFER TO POLITICAL SCIENTISTS.

IT IS EARLY DAYS AND FLUID. IT IS BEYOND FASCINATING. TOM:

VERY QUICKLY ON MIKE WILSON OVER AT MORGAN STANLEY'S CALL

THE HEADWINDS ARE TOO GREAT FOR THESE U.S.

EQUITY MARKETS, DO YOU WANT TO BE TAKING PROFIT AT THIS POINT?

RICHARD: I THINK THE INDEX UPSIDE IS

LIMITED HERE. THE WORK WE HAVE DONE, WE

RECENTLY RAISED OUR S&P TARGET IN EARLY MAY TO 3400.

OUR POSITIONING, WE HAVE BEEN MORE TACTICAL ON THE ON-SITE OF

THE TRADE SINCE LAST AUTUMN. THE -- WHEREVER WE ARE AT THE

MOMENT, I THINK IT IS LIMITED INDEX UPSIDE.

PERSONALLY REFERENCED TO MORGAN STANLEY, I KNOW ONE OF HIS BIG

CALLS IS ABOUT THE S&P EARNINGS FALLING WELL BELOW 200.

WE ARE AT 204, WE ARE LOOKING FOR FLAT YEAR ON YEAR.

CONSENSUS HAS BEEN MOVING ON.

THE WORK I DO IS WHERE I AM THINKING ABOUT INTO SECOND HALF

OF 2024 WHEN ONE SHOULD RELATIVELY BE MORE POSITIONED

IN A DEFENSIVE SENSE. TOM: REALLY APPRECIATE YOUR INSIGHTS

ON A GEOPOLITICS AND U.S. EQUITIES IN THE WEEKS AND

MONTHS AHEAD. COMING UP, ACTIVE VISUAL --

ACTIVISION FDC MEETING. WE WILL HAVE MORE ON THAT NEXT.

KRITI: THIS IS BLOOMBERG SURVEILLANCE

EARLY EDITION.

$70 BILLION AT STAKE, A DEAL BETWEEN MICROSOFT AND

ACTIVISION. WE SAW PUSHBACK FROM THE U.K.

AND NOW WE ARE GETTING PUSHBACK IN THE U.S.

I WANT TO WALK YOU THROUGH THE STORY.

WE ARE IN THE MIDDLE OF AN FTC COURT INJUNCTION, THEY

REQUESTED THE FEDERAL COURTS TO PULL AND DELAY THE U.S.

ACTIVISION APPROVAL PROCESS FOR MICROSOFT TO IT ON TO THE $70

BILLION DEAL. YOU ARE SEEING PUSHBACK ON THE

IDEA THAT MAYBE THIS DEAL MIGHT NOT VOTE THROUGH.

THE LEADER OF THE LEGAL TEAM OF THE MICROSOFT SIDE SAYING IF

THERE IS A DELAY, IT WILL TAKE THREE YEARS TO NAVIGATE.

THEREFORE, THE DEAL MIGHT NOT BE WORTH IT.

I CAN RING ABOUT THE OTHER SIDE OF THE EQUATION QUICKLY.

WE DID COMMENTS -- GET COMMENTS FROM THE PLAYSTATION CEO OWNED

BY SONY PUSHING BACK AGAINST THE EXCLUSIVITY OF THE XBOX

DEAL. HE IS SAYING MAYBE EXCLUSIVITY

IS NOT AN ISSUE, SOMETHING NOT BEING PLAYED OUT IN COURT AT

THE MOMENT. TOM:

IT FASCINATED IMAGE PAINTED , MICROSOFT CEO HOLDING HIS HAND

OFF SAYING I PLEDGE WE WILL NOT BLOCK THE SALES.

SURVEILLANCE IS NEXT.