Bloomberg First gentle: Australia 04/16/2024

Welcome to DAYBREAK, Australia.I'm Heidi Stroud. What's in Sydney?We're counting down to Asia's major market opens.I'm Annabel Jewelers in Hong Kong. The top stories this hour.A sell off on big tanks and the S&P 500 to its lowest in almost two months.Asian equities braced for key economic data out of China.Israel vows a response after Iran's weekend drone and missile attack, evenas the US and its allies urge restraint. And Goldman Sachs surprises with a 28%jump in first quarter net income defying expectations of a drop.Taking a look at how it was setting up.

Just an hour away from the start oftrading. Of course, major markets here in Asia.And we are looking like a bit of a struggle poised to follow Wall Streetshares lower here in Asia. Latest evidence of stubbornly sticky USinflation really spurring these bets. The Fed again, no hurry to cut rates.We are seeing that uphill battle for both currencies and equities in thispart of the region. We're seeing rising US yields puttingpressure on that picture and of course that prolonged wait for monetary easingas well. Also the China data adding an extraevent on the horizon was Sydney futures.

Off by about 8/10 of 1%.Some strength potentially when it comes to the Aussie dollar.Still to come as we continue to see surging metals prices.And of course that is dependent in terms of what we get out of China today asthat key China proxy Kiwi stocks down by about 6/10 of 1%.We are seeing New Zealand inflation headline CPI seen rising 4% from a yearago, tipping to slow as it heads towards the Rbnz's target band.So really questioning what that means for monetary policy for a central bankthat was really ahead of the curve in this current cycle.NIKKEI futures up about a 10th of 1%.

We did see Japanese shares also fallingin the previous session with these ongoing Middle East tensions and ofcourse in the thick of earnings season as well.Bell. Yeah, earnings.And then you can also compound that to retail sales.And that was really the big theme, as you said in the session overnight onWall Street, because they came in better than what had been expected.Consumer strength and you couple that with a strong jobs market as well in theU.S. and that just tells us perhaps inflationit risks becoming entrenched in the the.

The the ramification of that, of course,is that the Fed stays higher for longer in turn.That really drove the dynamic that we saw.We saw, for instance, the S&P 500 falling more than 1% at some points,going back below that 5100 mark. Even though you're sitting around thatin futures become a line fairly flat right now.And a lot of the losses coming through in the big tech space as well, MicrosoftAlphabet or Apple, rather, in really, really some of the big laggards in thesession. So those move rate sensitive sectors inplay.

Otherwise, other themes we're trackingis really what we had in the bond space coming through.Most US Treasury yields climbed to New Year to date highs, two year yieldapproaching 5%. We had the benchmark ten year noterising as much as 14 basis points to about 4.66% Heidi.So really at the Fed and you combine that with geopolitics, casting a littlebit of a shadow right now involved To that end on the geopoliticsfront, we're seeing the US House set to vote on new aid to Israel and Ukrainethis week following Iran's missile and drone attack over the weekend.Bloomberg's TV and radio political news.

Director Jody Schneider now joins usfrom Washington. So, Jody, we're hearing about a splitvote now. Does this potentially break themonthslong roadblock that we've seen? Well, that is certainly what the Houselawmakers who discussed this this afternoon are thinking, Heidi.We've heard from several lawmakers who were in those sessions just a few hoursago here in Washington with House Speaker Mike Johnson.And they came out saying that it's a split vote, that they're going to startwith the Israel aid, given the urgency there of replenishing those defensivemechanisms that were able to really.

Block those missiles and drones fromdoing any serious damage in Israel or much serious damage in Israel over theweekend. So they feel like that the urgency therewill get that through and then they will test the really willingness ofRepublicans and Democrats alike to vote on the Ukraine aid.Of course, Speaker Johnson has to worry about his continued future as speaker,given that Marjorie Taylor GREENE has threatened to basically go ahead withwhat we call a motion to vacate, which would really test his speakership, wouldput his speakership to a vote. And we've seen what happened last yearto House Speaker Kevin McCarthy when.

That happened.So the speaker is hoping that this way he'll be able to really kind of testwhat's going on in the caucus and maybe get both Israel and Ukraine aid through.There's also a plan to try to do Taiwan aid in a third bill and some othermeasures, including some further restraints on Russia in a fourth bill.So, Jody, does this appear to be a plan that would be able to pass Congress atall? Well, that's the real question, isn'tit? First of all, the Senate already passedUkraine aid and sent it to the House. So if this measure were to be able topass, the House would have to go back to.

The Senate.There's a lot of appetite for both support for Israel in the Senate as wellas support for that Ukraine aid. But still, any time that happens, ittakes a while. The Senate has a lot of rules in termsof getting things on the floor. So this isn't going to be that quicknecessarily. Congress is supposed to go on recessagain soon. So there's a real question any time.It gets complicated. But there is thinking that especiallythe Israel aid would be able to get through.Now, they may have to do this under what.

They calla procedure that basically is called suspension of the rules where you need atwo thirds majority but allows you to move it through quicker.And Mike Johnson has done that before and been able to get some things throughwith a lot of Democratic votes as well. Jodie, what's been Israel's latestthinking when it comes to the calibration of a potential response?Yeah. So we've first of all, seen restraintcontinues to be what the US is advising, what other allies are advising,basically saying take the win or take the fact that this was not worse, thatthis attack did not result in large.

Scale casualties and damage.But that does not necessarily seem to be what we're hearing from Israeliofficials, most notably Benjamin Netanyahu, the prime minister of Israel,who's saying that there has to be some kind of response, that Iran'sunprecedented attack from Iranian soil directly into Israel, even though therewasn't widespread damage, even though the defense mechanisms worked, thatthere needs to be a response. The real question, of course, is whatkind of response, how significant and would that lead to a wider conflict inthe Middle East? All right.That was Bloomberg political news.

Director Jodi Schneider there.And let's stay on that. Bring in Mara Rudman, professor at theUniversity of Virginia and previously served in both the Obama and Clintonadministrations, including as deputy assistant for national security affairs.And Mara, what do you see as Israel's next steps in this?And does that also align with what you think Tel Aviv should be doing?Well, first of all, I want to say that I think that.It, asking Israel to exercise restraint. And Israel saying they're going to takesome action are not necessarily inconsistent.There's a wide range of timing, nature.

And type of action that Israel can takethat could be consistent with the president, with President Biden, and theinternational community's request for restraint.So I think it's important just to lay that out, to start.But how? I mean,what are the sort of scenarios that that would constitute, for instance, arestrained response from Israel in this that would also made it sort of theneeds or the requests or the urges of its allies.So first of all, I would note that it took 15 days for Iran to decide whatthey were going to do and to signal it.

In the way that they went forward withthe attack this weekend on Israel. It was in reaction to and they made veryclear as reaction to an April 1st strike against Iranian Revolutionary Guards whowere at an Iranian embassy in Syria that Israel was not taking responsibility forpublicly, but as it's widely assumed that Israel was part of that.So. The timing of what Israel does whenIsrael strikes is an open question. And what kind of action?There are sanctions. There are covert actions.There are singular strikes against individuals.There are cyber actions.

There is a wide range of different typesof things that Israel could use to show to effectively deter Iran from furtheraction. That would minimize the risk ofescalation, which is clearly what the United States and Europe and manycountries in the region are concerned about.Can you give us some context on how the dynamics of the Israeli cabinet playinto its response as well? Yeah, that's an excellent question.And I will say there are parallels to what your Washington political directorwas just describing in terms of the House of Representatives, and I'm happyto come back to that.

So Prime Minister Netanyahu himself iscurrently managing to maintain his hold on the prime ministership.By dint of two or three extreme right wing members of his cabinet who are notpart of the war cabinet and who have consistently put out positions that Ibelieve are inconsistent with an actual view towards Israel's security andcertainly to regional security and stability as well.And so they would be pressuring him and they have been very public in theirstatements about pressuring him to do more, to be extraordinarily aggressive,to show no restraint at all in any way in terms of action and actions, I think,that are actually counter to Israel's.

Direct interests.But Prime Minister Netanyahu essentially serves their pleasure right now when heis running 20 points behind in polling in Israel.He's deeply unpopular and his coalition stays in place because they aresupporting him. This is the this is the issue youbecause we've seen urges for restraint being largely ignored when it comes toIsrael's operations in Gaza. So should we expect anything differentwhen it comes to allies and the US trying to persuade Israel towardsrestraint when there are these domestic pressures?I again, I would use the word restraint.

Quite carefully.I think there are certainly differences in views on strategy.The United States has been very clear that it supports Israel's interest andneed to eliminate Hamas as a threat to Israel proper, disagrees with it on thebest ways to achieve that, and has also strongly pushed for increasedhumanitarian aid. And that's part of the reason for thedisagreement now on going further in Rafah.These two actions are actually related in the sense that Israel has and it maysound perverse, but an opportunity by a more careful, calibrated approach inresponse to Iran that can work in.

Conjunction with Gulf countries, withother Arab countries in the region, who, by the way, very likely participated,helped to to repel the Iranian attack this weekend in various ways frompublicly, many more quietly. So there's an interest in an alliancewith Israel vis a vis Iran. Part of Israel's ability to execute thaton the long term, though, is agreeing to work towards a two state solution, aPalestinian state, an Israeli state where Hamas is not in control in Gaza.How does a potential response and how the next steps play out?Also play into the nuclear deterrence angle for Iran?So that the challenge of President Trump.

Having left the agreement that all ofEurope, that many or several European countries and China and Russia hadjoined the United States in nine years agois that Iran has very much sped up, has broken out of the agreement entirely,and has sped up its ability to go forward with weapon gradenuclear material. So it adds to the danger of the moment.I think there are not signs right now that Iran would would utilize that.But the fact that they are so close to being able tomakes it important to have a deterrent strategy that is effective makes itimportant for Israel to be in alliance.

With other countries in the region thatare very concerned about what Iran could and might do and with the United Statesand NATO allies. The risk is high.Laura Redmond, appreciate your time. She's a professor at the University ofVirginia. Still ahead, the United Nations ishosting its first sustainability week at the headquarters in New York.We get more details with the U.N. General Assembly President DennisFrancis later in the hour. But first, we'll be talking emergingassets. A battle against the dollar strengthscenario continues.

Hey, while spring global investments isunderway in India, Taiwan and China next.This is Bloomberg. India's elections kick off with a focuson the economy, social divisions and climate change actions that willinfluence the global story. Bloomberg is live on location with thelatest updates from the world's largest democracy.Coverage begins April 19th. Real interest rates now are considerablyhigher than they were before because inflation has come down quite a bit.So we will need to start a process at some point to bring interest rates backto more normal levels.

And my own view is that we will youknow, that process will likely start this year, but again, it will be driven,driven by the data and achieving our goals.New York Fed President John Williams there speaking out about the Fed's rateof rate cut path, I should say. Despite that view, of course, we saw astronger than expected US retail sales data again reigniting these bets at thehigher for longer narrative is what we're dealing with.And that in turn is putting continued pressure on AM currencies and reallybroader ARM assets as well. Alison Shibata is the senior portfoliomanager and head of Total Emerging.

Markets Equity Team at Old Spring GlobalInvestments and joins us now here in Sydney.Alison, so great to have you. Thank you, Alison.What is the biggest sort of correlation for AM assets at the moment?Is it the strength of the dollar or is it the China recovery?I think it's really the anticipation of the roll over the US dollar.And also I think near term it is China recovery.So we're seeing a very slow recovery in China, but it is happening and I thinkbeyond that people will hit the green button once we see some, you know,loosening of interest rates and or.

Decline of interest rates and subsequentroll for the dollar. So we're anticipating both.I think they will both be positive for em asset class.Well, I think there's a sort of the perception that these sort of Goldilocksfinancial conditions that have played out in developed economies and benefitedshare markets am still a little bit behind.So that's still to play out. So absolutely.And that's why I think we remain constructive this year and we see a lotof good earnings growth in emerging markets.We see payment of dividends and.

Shareholder return, which we managed toas well. So I'm really quite positive this yearand I think that the economies have held up over the pandemic and coming out ofthe pandemic as well. So we haven't had any major dislocationin emerging markets. He's trying to steer the anchor, giventhat we have seen kind of almost a correlation right now.You positive domestically for China? Yes, we are positive domestically, butwe realised that policy pace a long term effect on China and we're very muchlooking forward to future policy in terms of the commodity sector, in termsof I.T., in terms of the property.

Sector, of course.So we do think that it is the anchor in emerging markets, still the largestcountry at 25% of the benchmark. But also we feel that you must stockselect in India as well, because it's becoming a much, much larger market thanit had been even five years ago. Expensive though it is in certainsectors like the consumer sectors and somewhat financials.But we because we're looking as well at shareholder return and dividend cashdividends, we're mainly in other sectors such as energy, infrastructure,industrials and areas that are not as expensive.Yeah.

What about Alison in in North Asia?Because I noticed, for instance, you're you're a bit underweight on Taiwan, butyou are overweight on Korea. What's the difference between thosemarkets that you're saying? Yes.In terms of Taiwan and Korea, they both benefit from air infrastructure andinterest in that particular technology. In terms of Taiwan has had a very goodrun and it's we're underweight because we took a bit of profit off the table.And I think that we're still hopeful and own a variety of stocks in terms of airsupply chain as well as semiconductors. And in South Korea, we have a largeweighting to Samsung Electronics, as.

Well as some other diversified holdingsin the banking sector and telecom, etc.. So we really feel very hopeful aboutboth, and particularly with this turnaround and recovery in the semisector. And just talk us through some of yourstock picks in particular, because I can see, for instance, you've got one inTaiwan that is still in the air space. Yes, Cromarty.And it's a really interesting company that I rarely see the sell side speakabout or write about, but it certainly is kind of part of the supply chain fora I. And so it has a reasonable betweenthree, three and a half percent dividend.

Yield.So it's very interesting, very consistent, very relevant.And we also, like other areas such as in Latin America, Southern copper is theinteresting thing because it will only become more and more important.Copper. We're interested in commodities, selectcommodities, but copper has a very tight supply demand situation at the momentand also it's relevant to both I to i.t, to telecom, to data center.So everything basically euv. It's very interesting for us.What is that? You mentioned Korea briefly and you takea look at the astronomical run that.

We've seen for Japan and potentiallyfurther to go. How long do you think it will take forKorea to be able to replicate that with its value up program?Yes, well, I think it will take a number of years because it requires a change incorporate behavior. But I do think it's extremelyencouraging. And, you know, I've covered Japan aswell for 25 years, and I noticed it took them a long time to come around.But eventually the outcome was that people look at what happened with Japanand the corporate governance improvement, and I think both China andSouth Korea will follow in those.

Footsteps because they see how much ithelps the share prices. So I think in terms of the time frame,though, could take 3 to 5 years, but I think that that they will be stronglydirected by the government. Asia am in particular was really in thecrosshairs with the last Trump presidency.How closely watching domestic US policy, trade and how that could potentiallyimpact the outlook. We are watching it very carefully.We know that there's a very high correlation really with all countriesglobally. And, you know, people are a little bitfearful about additional sanctions,.

Particularly on Chinese tech stocks.So we are very cautious in selecting certain names because we have to thinkabout that implication. We don't want to be cut off or unable toinvest. But I think on the other side that, youknow, it's already Joe Biden did President Biden did continue a lot ofTrump's policies. So if anything, status quo going intothe next US presidency probably likely. And, you know, we haven't seen anyaggressive action against Taiwan as people had feared.So post-election things have been rather calm.So I think that we keep an eye on all of.

These things and it kind of goes intointegrated into our stock selection. But it's something that we have to keepan eye on. 24 seven overcapacity issue inparticular is not affecting which stocks perhaps you are more cautious on,particularly when it comes to China. Yeah, China actually has worked througha lot of that overcapacity and it's coming out of that and we're seeing alittle bit more stable sort of production numbers.And I think it's kind of it's going to be up and down a little bit.But I think that for the most part, they worked through a lot of that.And so I'm actually quite positive on.

The industrial site.China, great to have you with us. Alison Shimada, a senior portfoliomanager and head of Total Emerging Markets Equity team at Old Spring GlobalInvestments. And you can, of course, get a roundup ofthe stories you need to know to get your day going.In today's edition of DAYBREAK, Terminal subscribers can that it's a TV show.It's also on the mobile in the Bloomberg Anywhere app.You can customize those settings as well so you just get the news on theindustries and assets you care about. This is Bloomberg.

Some of the latest corporate storieswe're tracking this morning. In two of Tesla's top executives haveleft the company as the carmaker holds its largest round of job cuts.Senior Vice President Drew Baglino confirmed an earlier Bloomberg reportabout his departure. The vice president of public policy andbusiness development, Rowan Battelle, also announced his exit.Tesla is looking to reduce its global headcount by over 10%, which couldaffect some 14,000 employees. Chinese battery maker Seattle postedstrong first quarter profit as the company's dominance in the EV sectorpays off.

Its net income climbed 7% to $1.5billion, while posting the highest gross margin in more than two years.Seattle has vowed to keep expanding despite the cooling demand for batterypowered cars, and Hong Kong has given conditionalapprovals to several asset managers to spot Bitcoin and ether ETFs.Firms including Harvest, Global Investments and a partnership betweenhash key capital and boost. Sarah Asset Management say they gotinitial approvals. OSL says it will provide custodialservices for some of the products. More ahead.This is Bloomberg.

Shares of Goldman Sachs closed higherafter the company posted a surprise profit jump in the first quarter.The bank recorded a 28% increase in net income, even as analysts had braced fora drop. We feel very good about our firstquarter results, which reflect the strength of our world class andinterconnected franchises and the earnings power of our firm.This performance was aided by the swift actions we took last year to narrow ourstrategic focus and play to our core strengths.Well, let's bring in our Bloomberg intelligence senior industry analystMatt Ingram.

Matt, how much of this was due to reallyrecord bond sales? Hey, Heidi.Look, it was obviously a very strong period in investment banking, but therewere loads of moving parts and they were all testimony to Goldman's extremelystrong client franchise. So it was more trading beat actuallythan investment banking beat, mostly fixed income.I think they really made a focus on supporting those key clients.Mortgages was a very strong area as was structured credit.So I think investment banking was stronger, trading was stronger.We have sort of seen Goldman Sachs sort.

Of.Struggling a little bit to sort of define his businesses and perhaps,you know, narrowing its scope a little bit under its leadership.Do you think that that sort of paid off in this quarter, that that renewed focuson its core strategy? Yeah, Hi, Annabel.Look, certainly that's the view of Allison Williams, our senior analyst whocovers Goldman's in the US. They really narrowed their focus onthose core clients and the core businesses.They did get a good free kick with markets helping them along the way, butthey also really focused on tightening.

Costs as well.So those two strings that they pulled, number one, focus on those core clientsand number two, focus on costs generated that almost doubling of returns and thatbig uptick in profit. So so Allison thinks they're on theright path with strategy, and that certainly capitalized on very strongmarkets in this quarter. How much pressure is when it comes tofunding costs? Because we've got Bank of America next,Jp morgan and Wells Fargo both missed when it comes to that metric.What is the outlook, I guess depending on what we see on the monetary policyfront as well?.

Yeah, let's it's a very good question.Obviously, bond rates have come off quite a lot, but what we're seeing inAustralia and the Aussie banks are big funders in US dollars.So the same applies to these US banks is that there's still a fairly big uptickof sort of 80 to 100 basis points in what they're paying now versus what theywere paying two years ago. So you are going to see a fundingheadwind still coming through for the remainder of the year.Obviously, it depends on the noises coming out of the Fed as to how muchthose bond rates come off. If they come off substantially, thenthat headwind subsides.

But we don't see that happening at thisstage. But if we do see that Fed environment ofhigher for longer, do you see it? How do you see that having a big impactthen? Look, these banks are very much relianton wholesale markets and a bell and they're going to be replacing theirfunding. It's not like you have a big lump thatcomes through in one go. They're periodically replacing thatfunding. So in a way, what we've been seeing inour Australian banks and what we've written about certainly in Australia isit's almost death by a thousand cuts as.

You refund 500 million or $1,000,000,000bond, you're going to see that incremental step up in costs.The current cost of funding is is now above actually where it was six or 12months ago, obviously, but you're seeing a slowdown in thatuptick. And so perhaps in another 6 to 12months, you might see that stabilize. But if the Fed holds, you're not goingto see it come off, which I think might be an expectation for for a lot of themarket. All right, Matt, thanks.Russia insights. I was at Bloomberg intelligence senioranalyst there, Matt Ingram.

Time for morning calls now ahead of theasia trading day in Tehran. Prices.The Japanese yen continuing its drop to levels not seen since the 1980s.Global fixed income portfolio manager Quentin Fitzsimmons says the currencycould slide another 10% and says the DOJ looks unlikely to raise ratessignificantly. He says it's not in the interests ofJapanese authorities to have a significantly stronger currency at thispoint in time. Meanwhile, UBS says the combination ofstrong US growth and sticky inflation is raising the odds of the Fed hiking ratesto a high to as high as 6.5% next year.

While the bank's base case is for tworate cuts this year, UBS now sees a growing possibility that inflation willfail to hit the target. Markets have already scaled back bets onpolicy easing, as recent US data has shown surprising strength in the world'sbiggest economy. When New York Fed President JohnWilliams believes the US central bank will likely start cutting rates laterthis year if inflation continues to gradually ease.He also discussed resilience in consumer spending on the economy.In an exclusive conversation with Bloomberg TV,the consumer spending has been strong.

I think it is driven by strongfundamentals. Job growth has been solid.We've seen real wage gains. We're in a pretty strong economy withgood growth. So, yes, it is part of that story.But, you know, I think what we're realizing is we're getting a nicetailwind from the supply side of the economy with good labour force growth,strong productivity, good real wage gains.So with that, I think, you know, consumers are spending.What's the thinking in your office and among your colleagues about does thislast or is this a surprise that you.

Think could go away at any minute?Well, one thing that makes it really hard to forecast is we're still feelingthe effects of the the after effects of the pandemic and Russia's war in Ukraineand all the things that have happened in between.So we're definitely still seeing an adjustment process by the consumer, byin the economy overall. But, you know, overall, I think that theeconomy will continue to grow at a solid rate this year, probably not as high asthe 3.1% we saw last year, but something like 2% or around that.So I feel like we're still in a good place, probably not as rapid of growthas we saw last year.

You do have the strong growth, you havevery low unemployment. Why cut rates if the economy is doingfine at this level? Well, first of all, I think monetarypolicy is working at the rates we have now.So I think I think monetary policy is in a good place over the past 12 to 18months. We've seen all pretty much all themeasures of imbalances in the labor market, in our economy recede, many ofthem back to levels we saw in 2018 or 2019.So we're seeing that, you know, restoring balance in the economy.We are seeing a slow decline in.

Inflation.So I do think monetary policy right now is in a in a good place.I'm not fixated on where do rates need to go over the next year.What I'm focused on is how do we best achieve our maximum employment and pricestability goals? The data we're seeing show that theeconomy is strong, and that's really good news and labor market strong.At the same time, we are getting better balance and we're seeing some declineoverall in inflation. So for me, it's really about gettingthat right. And then whatever we need to do toadjust monetary policy, we can do to.

Best continue the progress towards ourgoals. So that's how I'm thinking about it.And we just have to keep watching the data and make the decisions based onthose goals. Well, is your base case that you willcut rates this year? My own view is I think that withinflation continuing to gradually come down and I guess I would say graduallyis the operative word here and with the economy remaining strong, I do thinkthat given where the level of rates are, real interest rates now are considerablyhigher than they were before because inflation has come down quite a bit.So we will need to start a process at.

Some point to bring interest rates backto more normal levels. And my own view is that we will youknow, that process will likely start this year.But again, it will be driven, driven by the data and achieving our goals.That was the New York Fed president, John Williams, speaking exclusively withour colleague there, Mike McKee, and taking a look at markets here becausewe're just heading 30 minutes out from the open for Sydney, Seoul and Tokyo.And at the start of the day, we are looking to be pretty risk off across theboard. Nikkei futures most pronounced.So that's the Singapore contract, but.

Down more than 1% at this point.Overnight it was really that story of stronger US retail sales that camethrough. We had surging Treasury yields acrossthe curve and so that tells us that the Fed likely to stay on hold for longer.And that's the message that investors are really adjusting to here.Weakness, particularly in big tech. We saw the likes of Microsoft, Apple andvideo leading the drop. So certainly a sector we're going to betracking very closely. But we'll have more ahead on DAYBREAK.Australia. This is Bloomberg.

The UN is hosting its flagshipSustainability Week in New York, bringing together policymakers and keyUN officials to address global issues on tourism, infrastructure, energy andtransport. The event is aimed at supercharging theimplementation of the UN's 2030 Agenda for Sustainable Development.We're joined now by the President of the United Nations General Assembly, DennisFrancis. Really great to have you with us.Give us an update, first and foremost in terms of the progress that's being madetowards these goals. Well, first of all, thank you for havingme.

It's a great pleasure.In 2015, the United Nations agreed to the 2030 Agenda for SustainableDevelopment, which involves 17 sustainable development goals.The thrust of the Sustainable Development Agenda is to empower peopleto lift them out of poverty, marginalisation and deprivation.Because even today there still exists something like 860 million people livingin poverty and abject poverty and hopelessness in the world and a similarnumber who are hungry. Not to mention anothernumber of people, another cohort who are food insecure.So the sustainable development agenda is.

Really about lifting people, empoweringthem to live lives of dignity, and to do so in a way that minimizes thedisruption and the harm to the natural environment and our natural ecosystems.For a number of reasons. Progresstowards this achievement of the Sustainable Development Goals havefallen off track. Progress has not been been maintained atthe rate at which it had been hoped. And of course, there are only six yearsleft to 2030. So we need to speed up.We need to refocus on the speed up in getting countries to undertake thenecessary reforms that would result in.

The implementation of the SustainableDevelopment Goals and sustainable sustainability.Week is designed to do precisely that. You talk about the slowness of theprogress. And in fact, there is no G7 country,including the EU as a whole, that has the policies in place to keep the worldfrom warming less than 1.5 degrees Celsius from pre-industrial levels.So how at an event like this, how do you make progress towards closing that gap?Well, sustainable development is about significantly more as important, infact, as crucial as it is. It's about significantly more thanclimate change.

Climate change is one dimension, anextremely important one of sustainable development.But there are there are a number of other issues, really.There are issues, for example, around access to education, to qualityeducation for all people everywhere, because as it stands at the moment,hundreds of millions of people, particularly people in poorer developingcountries and in far flung rural areas. Many of whom are women and girls, do nothave access to quality education. And of course, there can be nodevelopment without access to education. So that's an important dimension ofsustainable development goals.

As is the case similarly with health,that people need the guarantee of access to affordable basic health.And in many parts of the world, that is not the case.So it's about climate change, in part because, of course, we need to preserveour natural assets, the ecosystems that we depend on, on a day to day basis togive or to give us the comforts in life that we enjoy.But it is about a significantly wider range of of issues that.Put together will create the sustainable development that is necessary.Even amongst the world's biggest economies, though, we're seeing climateambitions that are being weakened,.

Whether that's through scrappingdifferent programs like low carbon programs, for instance, or backtrackingon different regulations. Why is that exactly, do you think andand what's the best way to address that at a government level?Well, of course, countries make their own determination.You would be familiar with the concept of nationally determined contributionsto climate change. The concept involves everyone, everymember of the international community making a contribution toto controlling and mitigating the effects of the impacts of climatechange.

But countries or countries make theirown determination based on a number of factors thatare relevant in their peculiar stances. I'm unable to speak to the reason whycountries might feel that they can renege on those commitments when in factthe evidence, the scientific evidence points to the fact that the effects ofclimate change will become much more virulentand much more invasive, intrusive in our daily lives if we do not act swiftlyto decarbonize the atmosphere. Decarbonisation will require directintervention by states at various levels and not just states by the privatesector.

Buy by local communities, by buy townsto rethink how we consume and produce. Given the dangers that we know existwith continuing the supply of carbon and other greenhouse gas emissions into theatmosphere, one hopes that enlightened thinking would in fact propel countriesto act responsibly and to recognise the importance, the crucial importanceof maintaining and in fact increasing the ambition of their commitments.Because if we do not, the consequences will be dire.There are some countries in the world, for example, in the Pacific region.Where there is an increased risk of inundation due to rising sea levels as aconsequence of climate change.

And some of those small countries in thePacific have already entered into discussions with third parties torelocate their populations, should they, in fact become inundated.So climate change is not the future. It's already here.There's this further. There's further complications, ofcourse. And as we know with developments at themoment being very fast moving, the geopolitical aspect is complicate iscomplicating as well. Can I get your view on what the UN isthinking at the moment in terms of steps and options that are available withregard to the situation between Iran and.

Israel and whether Israel willretaliate? Yep.I do not have a crystal ball, so I don't know.I don't know. I know.As much as you know, what the U.N.would like to see is no further escalation in the problem of tensions inthe Middle East because escalation is a slippery slope.And the only consequence aside, as Isaid in my statement released yesterday, the only consequence would be moredeaths, more destruction, more misery,.

Which I believe nobody wants.It does not serve the international community, nor even those who aredirectly involved in the conflict that that should be the case.We need instead of really to be focusing.In a very constructive way. In getting a cease fire in Gaza.Getting a cease fire in Gaza. That should be where our main prioritieslie at this point in time in order to ensure that there is no furtherbloodletting in Gaza. And that the all the remaining hostagesare released unconditionally and immediately.Are there any further impactful measures.

And options available to the UnitedNations, both with regard to pursuing a ceasefire and improving the situation inGaza, but also in terms of what the reaction would be if there is a furtherretaliation from Israel. Well, we've made clear the UnitedNations has made clear what is the option it would like to see with respectto Gaza. A ceasefire needs to be agreed.And we hope that that will happen soon.In our view, it's it's long overdue. More than 33,000 civilian deaths in Gazais not by any means, by any measure, a comforting statistic.Particularly when you consider.

Thatthere may well have been violations of international law and internationalhumanitarian law. However.Yes. Do you think that the the Iran strike?Do you think that that sort of complicates or risks the the chances ofa ceasefire and also the hostage negotiations? We have to wait to see.What the consequences are. I can't.I'm in no position to anticipate what the fallout of that will be.The Iranians have said very clearly.

That.Having made the strike the made on Israel.They deem the matter to have been concluded.I take them at their word. And I urge them to maintain their word.But in terms of predicting or looking into the crystal ball to see what theimpact might be. That is not something that I'm in aposition to do. This is not a MacInnis front, butthere's speculation. I'd like to, Dennis, to,uh, to to help us.The U.N..

To spread the word about choosingsustainability, which is actually the subject I thought we were here todiscuss. Choosing sustainability is importantbecause that is what will result in our ability to empower people across theworld to live healthier, stronger, better lives in dignity.And create a future that is inclusive and equitable so that everyone in theworld has a chance, has at least a fighting chance.To live a life and to self-actualize in the interest of themselves and theirfamilies. That is Dennis.Thanks very much.

Let me see.Dennis Francis there, president of the U.N.General Assembly, thanks very much for your time and your insights across abroad range of very complex topics. And as we said, the UN hosting itsflagship Sustainability Week in New York and investments also pouring into greenhydrogen energy or technology at this point in time.But Bloomberg's NRF data shows the industry's evolution is heading in thewrong direction. Costs are rising and there's even signsof overcapacity. Let's get the latest from Bloomberg Newshydrogen analyst Cathy McGowan.

Cathy, let's just start with costs here.Why exactly are they rising? Yeah, so there are multiple reasons toit. First of all, inflation has remainedhigher than we expected, which result in expensive materials and laborsgovernment subsidies also getting delayed to hydrogen.So we're not seeing the market scaling needed to drive the cost down.But more importantly for this study, we actually the scope of the cost includedin this study is actually larger than last year.And this is because as we see more projects heading to the front andengineering study phase, we found out.

That actually deploying a hydrogenprojects require a lot of indirect costs, such as the cost of building awater tank, cables and all the other supporting infrastructure.The results of the study shows that due to those factors, the ELECTROLYZERcosts in the US and Europe is has increased dramatically over the pastyear, whereas those in China has increased marginally.

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