The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg This Weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg This Weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast. That's Bloomberg this weekend, Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, Radio and wherever you get your podcasts. Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Daybaker podcast. Good morning. It's Thursday, the 23rd of April. I'm Caroline Hepker in London. And I'm Stephen Carroll in Brussels. coming up today. The price of oil rises back above $100 a barrel as Iranian boats fire on ships in the Strait of Hormuz and talks with the US stall. Tesla announces plans to spend $25 billion on AI and robotics as Elon Musk looks to pivot the company away from making cars. Plus, a bitter pill to swallow why President Trump's plan to cut drug prices in the United States is driving pharma giants to withhold new medicines from European markets. Let's start with a roundup of our top stories. The price of crude oil is back above $100 a barrel this morning as the US and Iran step up efforts to choke off traffic through the Strait of Hormuz. Yesterday, Iranian gunboats fired on commercial ships in the waterway, while the US intercepted two of the Islamic Republic's oil tankers. The latest incidents demonstrate that despite President Trump's assertion that Iran's navy has been destroyed, Tehran still retains the ability to deploy small boats to target commercial vessels. Captain Raman Kapoor is serving on a tanker that's been stranded near the vital shipping lane for more than 50 days. We are not warriors. We are stuck here. We have become collateral victims. Uncertainty and helplessness. Delayed repatriations. My crew is under constant stress. We saw several hundreds of missiles flying over our head. Captain Raman Kapoor was speaking as the Washington Post reports that US defence officials believe clearing Iranian mines from the waterway could take up to six months. President Donald Trump said the truce agreed on the 7th of April will stay in place indefinitely while Washington waits for Iran to submit a new peace proposal. Tehran says it has no plans to take part in negotiations imminently. Well, the economic fallout from events in the Middle East is continuing to grow as European Union leaders prepare to meet later today in Cyprus with the US-Iran war at the top of the agenda. Germany has now cut its growth forecast for this year in half as the conflict drives up energy prices for industry and households. Speaking at a press conference in Berlin, the country's economy minister, Katharina Reich, said she expects GDP to grow by only half of 1% this year. The German economy is on a modest recovery track, but headwinds have intensified. The war in the Middle East has led to an energy price shock that we could not prevent, but which is placing a real burden on people and the economy. Katerina Reicher speaking there through a translator. As Europe's biggest economy was joined by others in the region in being forced to confront the fallout from the war, Finland's government on Wednesday agreed a package of 520 million euros in austerity measures. The country was already in a precarious financial situation with an unemployment rate of more than 11%. And the Finnish government saying that the war in the Middle East will now delay its economic recovery. Tesla has unveiled plans for a massive ramp up in spending on AI and robotics. The electric carmaker says capital expenditure will triple to more than $25 billion. The investment will go toward a dramatic expansion of factory operations, including production of its Optimus humanoid robot, artificial intelligence initiatives and the CyberCab autonomous car. CEO Elon Musk outlined the expansion plan during the earnings call. I think you've seen most, if not all, certainly the major technology companies substantially increasing their capital investments. And we going to be doing the same I think it going to pay off in a very big way Elon Musk was speaking as Tesla announced better than expected earnings per share in the first quarter The news comes as new figures show European car sales jumped in March by 11 the biggest increase in almost two years. EV deliveries climbed by 42%, with Tesla sales rebounding following a bruising 2025 for the brand in Europe. BS is facing an increase in its capital buffer requirements. The news comes as the banking reform showdown between the lender and the Swiss government deepens. Bloomberg's Tiwa Adebayo has more. $20 billion. That's how much more UBS could face in capital requirements after the Swiss government outlined its latest proposals. Officials stuck with plans to submit a parliamentary bill calling for the full capital backing of UBS's foreign units yesterday. The legislation, driven by the Swiss finance minister, is a topic that the bank's CEO, Sergio Amati, has publicly criticised. Here he is broaching the topic in January. We fully understand the necessity of taking the lessons learned from what happened at Credit Suisse. But we believe that the current proposals are not really reflecting what happened at Credit Suisse and are going too far. UBS CEO Sergio Amotti speaking there earlier this year. It's expected that the legislative process will take until at least next year, with the first closed-door debate scheduled for early May. In London, Tia Adebayo, Bloomberg Radio. Workers in the UK were hit with the highest increase in tax rates on wages in any wealthy country last year. That's according to a report from the Organisation for Economic Cooperation and Development, which found that the average single worker with no children saw their tax rate rise 2.45 percentage points. Bloomberg's James Wilcock has more. Labour promised in its 2024 election campaign it wouldn't raise taxes on working people. So the OECD's finding that taxes on the average single worker rose faster in the UK than any other country in the group last year is a major challenge to the government. Although the 2.45 percentage point rise was the largest of the 38 OECD countries, the UK's total level of wage taxation is still the 13th lowest. But businesses, economists and politicians say the tax hikes are making already high levels of unemployment worse. The question is how voters feel about the issue, with local elections due in two weeks' time. In London, James Walcock, Bloomberg Radio. France and the UK have agreed a new £660 million deal aimed at reducing the flow of migrants crossing the English Channel. The money will be invested in France's police force, drone and camera surveillance and two new helicopters with part of the funding tied to how successful the scheme is. It comes as Prime Minister Keir Starmer is preparing for a bruising round of local elections in May with Labour expected to lose votes to both the right-wing Reform UK party and the left-wing Greens. And those are our top stories for you this morning. In terms of the markets, stocks and bonds are dropping. You've got Brent crude futures currently up by 1.2% and we're well above $100, about 103.23. So it looks like a fourth day of gains for oil prices. MSCI Asia-Pacific Index is down half of 1%. Stock futures for Europe down 1%. And looking at 10-year Treasury yields this hour, we are up one and a half basis points at 4.32. Also, a number of interesting earnings, Stephen. ST Microelectronics seeing a second quarter net revenue, a big beat at $3.45 billion. Nokia seeing also a beat for its first quarter operating profit. The CEO saying that the company is tracking somewhat above the midpoint for its full year guidance. And then Heineken reporting European beer volumes down actually more than estimated. Those are the markets and earnings. In a moment, we'll bring you more on the EU response to the energy shock caused by the Iran war. Plus why European patients might be losing out because of the Trump administration's new price policy for medicines. But another story that we've been reading this morning about the role that AI should or perhaps shouldn't play in caring for older people. Now, Bloomberg Opinion columnist Catherine Thorbeck has been writing about this. She spent time in Tokyo nursing homes where different kinds of technology are being tried out, including soft toy robots, the size of human babies being handed to residents and their conversational dolls, which are meant to fill the gaps when family, community and human care fall short. Now, this is something and Catherine acknowledges that many of us are going to recoil at the thought of robots doing care work, which we know is so important. but she also points out that the realities of the aging population and a shortage of care workers, something that is already a problem in Japan and is coming for most of parts of the West as well, means that we have to consider some of these realities too. And if in a place like Japan, where there been such innovation in robotics and so much I suppose advancement of it you know this is something that we need to be thinking about Yeah I can understand the recoil part I mean you know it strikes at the heart of kind of you know, if you're a parent, that idea of holding a baby, it's, you know, very visceral, isn't it? That thought it could be replaced by a robot. It's kind of strange. But on the other hand, this story also points out, what's the point of spending all of this money on technology and robots if you don't pay the workers in the care system enough. And actually, Catherine points out, you know, the very low pay, sort of minimum wage pay of the people who care for older people. It's really difficult and challenging. Yeah, look, it's something that's got us thinking this morning. Well worth your time. You can find that piece at Bloomberg.com forward slash opinion, and we'll put a link to it in our podcast show notes. Now, while there's no sign of any movement towards a peace deal between the US and Iran. European leaders are meeting in Cyprus later to discuss how to respond to the energy shock the war has created. Our chief Europe correspondent Oliver Crook is in the Cypriot capital, Nicosia, and he joins us now for more. Oliver, leaders are coming to this meeting with a string of bad economic headlines. We've talked about Germany slashing its growth forecast. Other countries are counting the cost of fuel support. What are we expecting from this meeting? Yeah, I think we're at the point now where we're really feeling the bite of the energy crisis within Europe. Obviously, that was reflected in the inflation figures, but now you're seeing it reflected in some of the growth figures and the projections that we've been seeing, including from Germany, as you mentioned, they're having their growth forecast. They're basically Germany delaying yet again the recovery, basically since the pandemic, by another basically year, year and a half, depending on where this goes. But I think for the European leaders, it's all about sort of striking the right tone of being very worried about this crisis and for how long it will last, but not sort of inspiring panic. We've had a lot of measures across many different countries over more than 20 countries in euros. But to get that unsustainable footing is going to be the big question, depending on how long this war goes. So for the EU and leaders here trying to coordinate on a number of different issues, for example, on gas storage, of course, jet fuel is something that's very present of mind and also will be very present with some of the smaller member states. Obviously, as prices get bid up, you know, countries and markets like Germany can do a lot better than some others within Europe in terms of getting access to those supplies. So that will be a conversation. Loosening state aid rules is something that Europe is looking at doing as well. And also some of these sort of adjustments to the carbon markets and taxes on carbon, something we've talked about. It's a bit in the weeds, but would make a sort of meaningful difference in diminishing the price of energy that comes from fossil fuels. There is not yet a conversation, though, about the sort of break the glass moment where there is a sort of serious crisis. That is basically gas price caps, which is something that was discussed in Europe and said that they would roll out after the invasion of Ukraine by Russia. They never ended up having to actually affect those, but they basically was enough to jawbone and talk about it in order to get those prices back down. Yeah. OK, so that's the issue on Iran and the impact of the Iran war on economies in Europe. So having said that, there is a bit of better news on support for Ukraine because EU ambassadors have signed off on this 90 billion euros loan plan agreed last December, which, of course, had been held up by Hungary. So is that all happening now? We think so. But again, I think that with a lot of these things, you have to wait till the sort of final moment to basically celebrate. And I'm sure that in Kiev, they're waiting just for that final moment to celebrate that dispersion of that loan, 90 billion euros for Ukraine for the next two years. Basically, Ukraine's lifeline, not just for their military efforts, but also for their national budget, absolutely necessary. And Zelensky himself will be here in Cyprus a little bit later to meet with European leaders. And so there is that conversation around that 90 billion, which, again, is just seen as a survival necessity for Ukraine. But what I think is also interesting, because Viktor Orban has now finally signed off on this, is some of the ideas that can now sort of flourish and can kind of move forward now that Orban will be out in about a month or so. And that is accelerating a conversation about Ukraine joining the European Union. We spoke to the deputy prime minister of Ukraine a little bit earlier this week. He's the one who is basically negotiating with the EU. And he's saying basically in terms of the reforms that the Europeans are asking for us, we're about 40 percent of the way there. And his most optimistic scenario, he'd actually like to see Ukraine join the European Union next year. Now, there are a ton of hurdles. There are a lot of things that need to be worked out before that is seen as being possible. And even people that are very strong proponents of Ukraine, like Poland, will have some issues around some of the agricultural issues that it provokes to have a large producer like Ukraine join the European Union. But that is certainly going to be an accelerating conversation, something discussed here among European leaders. OK, Oliver Crook, our Chief Europe Correspondent in Cyprus for that meeting of EU leaders. Thank you. We highlight the latest stories of the people and companies pushing the tech sector to new frontiers and the politics that shape global tech markets We do this all every weekday then bring you the most important conversations and analysis in our podcast Search for Bloomberg Tech on YouTube, Apple, Spotify or anywhere else you listen. Join us every afternoon on your commute home and stay ahead of the tech news cycle. That's the Bloomberg Tech Podcast. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Subscribe today, wherever you get your podcasts. President Trump's drive to bring down drug prices means that rather than endangering their US profits, some pharmaceutical companies are withholding new medicines from European markets. Joining us now to discuss is our senior healthcare reporter, Naomi Kresge. Naomi, good morning. Just firstly, can you remind us of what has changed in terms of U.S. drug pricing policy under Trump? Hi, good morning. So under Trump, there is now a policy that companies are meant to align the price in the U.S. of new medicines with the price in Europe, which would be new. Historically, medicines have been priced higher in the U.S. than they are in Europe. And drug makers have taken the large portion of their profits for new medicines from the U.S. market. So what does the evidence show then about how pharmaceutical companies are responding to this change in policy? So companies have a couple of choices. Some large drug makers have made voluntary deals in which they've said that they'll align the price of medicines for Medicaid in the U.S. with the price that some European countries pay. Other smaller drug makers are still trying to figure out how to respond. I mean, it's key that this is not law yet in the U.S., and it's a little bit unclear exactly. how this comparison will play out. But we've seen some companies, for example, a company called Insmed, which has a new lung drug, actually hold off on launching in the US, or I'm sorry, hold off on launching in Europe until they can figure out how this policy will play out, which means that then European patients, you know, obviously don't have access to the medicine until it's launched over here. Yeah, absolutely. Look, UK and European healthcare is driven by the idea of keeping healthcare affordable for everyone. You know, the perspective is very different, isn't it? Including quite strict analysis of the cost of a drug versus its benefits to patients. So as, you know, this massive change is happening in America, what levels and levers rather does europe have there you know it's it's it's hard to tell exactly how it will play out but there are a few things that european countries could do they could um you know there could be a price that looks like it's the same a list price that's the same and then drug makers could negotiate confidential rebates um in europe that would not be disclosed that is one thing that that would be possible because then the price would look the same, but the rebate would actually be higher in Europe. So, you know, one option. available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepker. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe. Hello, I'm Michelle Hussain. And for more than 20 years, I was at the BBC. Military withdrawal from Afghanistan. But all the time I was delivering the headlines, I wanted to go further than the news of the day. To spend more time with the people shaping our world. And that's what I'm doing here on this podcast. Speaking to people from Nigel Farage. Russia needs to be taught a lesson. To tech journalist Kara Swisher. And the tech industry is running wild. You know, they've gotten what they wanted and they've seen a huge run up in their stock prices. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussain Show from Bloomberg Weekend, wherever you get your podcasts. You certainly ask interesting questions.
