European Autos Outperform, US-Iran Conflict Widens, More
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What is the main topic discussed in this episode?
AI is entering its most consequential phase where scale, safety and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor, Salesforce, and supporting sponsors, IDA Ireland and Schneider Electric. Learn more at BloombergLive.com slash TechLondon.
News when you want it with Bloomberg News Now. I'm Stephen Carroll.
And I'm Caroline Hepker. Now to our top stories. The US military says that it has launched a powerful response to Iran's attempted missile attack on American forces in the Middle East. The US says that it struck dozens of Iranian targets, including command centres, missile and drone facilities and coastal defence sites. The strikes came less than 24 hours after Tehran fired ballistic missiles at a US base in Jordan, ending a brief pause in hostilities. Meanwhile, US Energy Secretary Chris Wright says oil continues to flow out of the Gulf.
A seven-day trailing average right now out of the Arabian Gulf region is 13 million barrels a day, about half of that flowing through the strait and half of that through bypass pipelines. So we're about two-thirds of the delivery of oil out of the Arabian Gulf region as we were before the conflict started.
Here, our full interview with the U.S. Energy Secretary Chris Wright on the Bloomberg Talks podcast. Now, his comments come as Qatar has sent its first shipment of LNG through the Strait of Hormuz in more than three weeks, offering a sign that energy supplies are beginning to recover despite the renewed fighting.
Long-term US Treasury yields have surged to their highest level in 19 years as investors question whether the Federal Reserve is serious about tackling inflation. The sell-off followed the Fed's decision to leave interest rates unchanged for a seventh straight month despite Chair Kevin Warsh's hawkish rhetoric.
For some households, businesses, and market professionals, five years of high inflation have left a mistaken impression that's hard to shake, that the Fed's implicit inflation target was somehow above 2%. Let me reiterate, there is no soft inflation target.
Kevin Warsh was speaking there. Investors appeared unconvinced by his comments, though, sending 30-year yields sharply higher as markets wagered that the Fed was only delaying an inevitable interest rate hike. Within hours of his press conference, JP Morgan brought forward its forecast for the next rate hike to December. Markets are now pricing in a 65% chance of a rate rise at the next meeting in September.
The Bank of England, meanwhile, is expected to follow the Fed's lead and leave interest rates unchanged today. Traders see just a 1% chance of a rate hike with the Monetary Policy Committee expected to leave borrowing costs unchanged for a fifth straight meeting. Here is Bloomberg Economics' Chief UK Economist, Dan Hanson.
You've got inflation and the data not throwing up any red flags. Good news. On the other hand, re-escalation in the Middle East. And that is obviously a significant issue for the Bank of England and all central banks because oil prices have risen. Importantly for European central banks, gas prices have risen. And you sort of add those two things up and you've got this picture where... In the near term, there's no rush to do anything, but you've got to keep your options open because we just do not know where this is heading into the second latter half of this year.
Dan Hanson was speaking as markets put the odds of a rate hike in September at around 60%. Now we'll have live coverage of the Bank of England's decision here on Bloomberg from 12pm London time, followed by Governor Andrew Bailey's press conference an hour later.
France's economy returned to growth in the second quarter, avoiding a recession as consumer spending and exports picked up.
How did the US respond to Iran's missile and drone attacks?
The Eurozone's second largest economy expanded by 0.2% in line with economists' expectations.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–4:03
2
How did the US respond to Iran's missile and drone attacks?
4:03–4:51
3
Which Iranian facilities were targeted in the US strikes and why?
4:51–6:30
4
How is Middle East fighting affecting oil flows through the Strait of Hormuz?
6:30–6:48
5
What did US Energy Secretary Chris Wright say about current oil exports?
6:48–7:36
Speakers
7 identifiedMore from Bloomberg News Now
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