April 30, 2024 • 15 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) HSBC CEO Noel Quinn is unexpectedly stepping down after nearly 5 years in the job, triggering a search for a replacement at Europe's largest bank.
(2) The US Treasury ramped up its estimate for federal borrowing for the current quarter to $243 billion, more than most dealers had anticipated, in a move that largely reflected weaker cash receipts than officials had expected.
(3) A pair of traders in Hong Kong have left Societe Generale after the French bank discovered a batch of risky bets that went undetected by the firm's risk-management systems, according to people familiar with the matter.
(4) Surveying the fallout triggered by the resignation of Scotland's First Minister Humza Yousaf, one man appears set to be the biggest beneficiary: the leader of the UK's main opposition Labour Party, Keir Starmer.
(5) Elon Musk's net worth is soaring after it plunged to the lowest level in almost a year. In the past five days, the world's third-richest person has gained $37.3 billion in net worth, according to the Bloomberg Billionaires Index.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg DAYBA, a podcast available every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
thirtieth of April in London.
Speaker 3 (00:17):
I'm Caroline Hipki and I'm Stephen Carroll. Coming up today.
Speaker 4 (00:21):
Noel Quinn says he will retire as the CEO of
HSBC as the bank announces a multi billion dollar buy back.
Speaker 2 (00:28):
The US Treasury says it plans to borrow almost a
quarter of a trillion dollars by June.
Speaker 4 (00:34):
And Risky Business two sock Gen traders leave the bank
after making undetected bets that could have cost the lender
hundreds of millions of dollars.
Speaker 5 (00:44):
Let's start with a roundup of our top stories.
Speaker 4 (00:46):
Noel Quinn is stepping down as the boss of HSBC
after nearly five years in the role. Quinn now says
he plans to pursue a portfolio career, but we'll stay
on in the CEO job until a success has found.
The board says it's looking both internally and externally for
his replacement.
Speaker 3 (01:05):
The surprise announcement was.
Speaker 4 (01:06):
Made as HSBC reported a pre tax profit of twelve
point sixty five billion dollars, slightly beating estimates. That lender
also announced a share buy back of up to three
billion dollars, with guidance for the full year unchanged.
Speaker 2 (01:20):
And in other earnings news, Santander has reported results in
the first quarter that fell slightly short of estimates. NETT
income at the Spanish lender came in at two point
eight five billion euros, just down on the two point
eight nine billion that analysts had expected. The bank also
reported loan loss provisions slightly below expectations, at three point
(01:42):
one to three billion euros.
Speaker 4 (01:44):
The US Treasury has bumped up its federal borrowing estimate
for this quarter by twenty percent to two hundred and
forty three billion dollars. The upward move surprise dealers after
some had expected a downward revision. It comes as the
IMF warned last week the US government spending is on
an unsustainable path. Speaking to Bloomberg at the time, Deputy
(02:04):
Managing director Gita Gopinath warned that a seven percent deficit
can't be sustained.
Speaker 5 (02:10):
When the US is borrowing that heavily. That causes rays
to be that much higher.
Speaker 6 (02:15):
It has implications for the rest of the world and
for corporations and households.
Speaker 5 (02:19):
In the US.
Speaker 4 (02:20):
Copperhat's concern is reflected by Wall Street figures like Jamie
Diamond and Ken Griffin, who have called the current level
of borrowing irresponsible. The Treasury will set out how it
plans to raise that money tomorrow.
Speaker 6 (02:32):
Now.
Speaker 2 (02:32):
Two traders in Hong Kong have left Sussages General after
the bank discovered a batch of risky bets. The incident
has raised questions about risk management at one of Europe's
biggest banks. Bloomberg's team and a Bio has more.
Speaker 7 (02:45):
Their transactions could have cost the firm hundreds of millions
of dollars in the event of a market downturn, but
a slew of risky trades from a couple of employees
on Society General's Delta one desk still went undetected. Also
say internal risk management systems failed to register the activity
because of a glitch related to their timing. This latest
(03:07):
slip up at Sociuta General comes more than fifteen years
after Jerome Cavil, another Delta one trader, cost the firm
five point two billion dollars in London. Tewa Adubai, Blomberg.
Speaker 4 (03:18):
Radio Scotland's First Minister, Humsey Yusuf, has resigned, leaving the
Scottish National Party leaderless months away from a general election.
The head of the UK's third largest political party gave
a tearful press conference.
Speaker 8 (03:31):
I'm so blessed for having the opportunity that are afforded
to sour Fe to lead my country and who could
ask for a better country to lead than Scotland.
Speaker 4 (03:45):
The fallout from use OF's resignation is likely to benefit
the Labor Party. Earlier this month, care Starmer's party narrowly
overtook the SMP in Scotland's polls for the first time
since the failed Scottish independence referendum a decade ago.
Speaker 2 (04:00):
Factory activity expanded in eight Pril first second month. Bloomberg's
Brian Curtis has more from Hong Kong.
Speaker 6 (04:06):
The official PMI was fifty point four compared with an
estimate of fifty point three. Two positive months in a
row isn't all that much, but it is the longest
streak in more than a year, and it might suggest
sustained recovery. Policy Makers are leaning on manufacturing to offset
weak consumption. Analysts say more public spending and a cut
in interest rates will likely be needed if China wants
(04:28):
to hit its growth target of five percent. Meantime, that's
Haishien manufacturing PMI coming in at fifty one point four
the non manufacturing reading fifty one point two in Hong Kong.
Brian Curtis Bloomberg.
Speaker 4 (04:40):
Radio Elon Musk's net worth is soaring after it plunged
to the lowest level in a year. The entrepreneur added
eighteen and a half billion dollars to his fourteen in
one day, according to Bloomberg's Billionaires Index. That's after Tesla
shares rallied following tentative approval for its driver assistance system
in China and the unveiling of plans to introduce a
(05:00):
cheaper car as soon as this year. Bloomberg's Charlie Palette has.
Speaker 9 (05:04):
More In the past five days, the world's third richest person,
who's gained thirty seven point three billion dollars in net
worth according to the Bloomberg Billionaires Index. That's his largest
weekly gain since March of twenty twenty two, just before
he agreed to buy Twitter for forty four billion dollars
in one of the biggest leverage buyout deals in history.
(05:27):
Since then, his fortune has tumbled just as often as
it has increased. After a breathtaking ascent in twenty twenty
and twenty twenty one in New York, Charlie Pellett Bloomberg Radio.
Speaker 4 (05:40):
If that's some numbers out from the German airline of
Tanza as well, announcing that it will initiate a cost
cutting drive at the airline business, which will include freezing
projects and it'll also review hiring in some areas. This
is after the carrier was forced to pair back its
earning's outlook for the rest of the year because of
persistent strikes in Germany. So this is due to it's
(06:01):
looking at its fullier adjusted EBITDAB at two point two
billion euros, that slightly below the estimates. Earlier this month,
the airline had cut its annual profit outlook and predicted
that its annual profit would fall as the German airline
absorbs the financial hit from those strikes.
Speaker 2 (06:18):
Okay, so those are the latest earnings you need to
know about. In a moment, We're going to get more
then on the news from HSBC, plus a look at
the US public finances with the issue around the treasury
and how much more money.
Speaker 5 (06:32):
It's going to need to raise.
Speaker 2 (06:35):
But also this story from our colleagues this morning on
the Bloomberg terminal, writing about how an increase in the
share of equity trading that is happening just in the
very last few minutes of the trading day and what
that means.
Speaker 4 (06:47):
Yeah, look, Justina Lie's been writing about this and she
talks about how those three hundred and ninety minutes of
equity trading, but really only the last ten minutes seems
to be what counts. And it's not just in the US.
This is increasingly the case in Europe as well. In fact,
twenty eight percent of volumes in European equity trading now
happens in the closing auction period, and the S and
P five hundred it's around a third of training that
(07:08):
happens in those last ten minutes. This is data fro
Bloomberg Intelligence, but also from the analytics firm big x YT.
Speaker 3 (07:16):
So the problem here.
Speaker 4 (07:18):
If you listen to some arguing in the market, is
that it's necessarily passive investing causing more problems. You know,
these index funds driving the phenomenon because they buy and
sell shares at the close. Since the last prices of
the day are used to set the benchmarks that they
aim to replicate as well.
Speaker 3 (07:34):
It's you know, this is part of the ongoing argument
passive investing.
Speaker 5 (07:38):
Yeah, but you get it.
Speaker 2 (07:39):
But if there are no active managers kind of making
the decisions on on and examining closely individual businesses, you know,
that's the argument at least that perhaps passive investors are
looking at the index as a whole and not stock picking.
Speaker 4 (07:55):
Yeah, we'll get the full picture in both sides of
that argument from just in a las piece this morning
on that rush to trade at the end of the day.
Let's dig into the earning some HSBC now in the
needs that the bank CEO Nol Quinn is to retire
at Charlie Wells is here with details.
Speaker 3 (08:09):
Morning to you. Charlie. Is this big surprise then, that
Noil Quinn is leaving.
Speaker 10 (08:12):
Steven This is a huge surprise and it injects a
lot of drama into what was expected to be a
fairly regular earning season. I mean HSBC has actually been
performing fairly well over the past few quarters, and so
the question is, you know why this departure and Quinn,
you know, was always a sort of unusual, not unusual,
but maybe not cut from the cookie cutter mold of
a lot of the other leadership at HSBC. His first
(08:35):
job was actually digging ditches on a digging holes on
a building site, and actually joined at a small bank
that was ultimately acquired by HSBC in nineteen ninety two.
So really interesting career and drama sort of encapsulated his tenure.
You know, he really took over officially in twenty twenty
March of twenty twenty, that was the height of the
COVID crisis. He really oversaw this bank amidst rising tensions
(08:58):
between China and the West, China and Hong Kong. And
so he says that he'd like to go on to
build a quote portfolio career. Sounds like he wants to
maybe focus on some passion projects. Let's see, But the
bank is conducting a search and we know that they're
looking at both external and internal candidates.
Speaker 2 (09:14):
Okay, the bank in and of itself also releasing results
and another major buyback three billion dollars assign then of
the continued sort of bounty of all the higher interest
rates that we've seen.
Speaker 10 (09:27):
Yeah, so you know, HSBC is a bank that is
particularly sensitive to interest rates, and so the hope for
a lot of analysts had been that maybe we would
see some progress for HSBC and trying to move into
other business lines. And look, the lines that we're getting
out of the earnings are positive. So we're seeing pre
tax profit slightly beating estimates. We saw net interest income
(09:49):
I'm excuse me, net interest margin meeting beating estimates. And
some of the initial analysis that we're getting from HSBC
is that there's been a positive story on wealth management.
I think another becus will be on transaction banking as
we try to see if this bank can diversify away.
But one thing that's a little bit disappointing that's coming
across is forward guidance for the years looking like it's
(10:12):
remaining the same from February. There'd been hope that in
a world where interest rates might be staying higher for longer,
the bank would have kind of revised that up, but
it's looking like it's staying the same at least for now.
Speaker 9 (10:24):
Yeah.
Speaker 4 (10:24):
I mean, we're looking at the first share PARTSIS reaction
in Hong Kong after shares reopening after the break there
up by one point four percent, So interesting to see
how investors are parsing the headlines coming out of here,
because on one hand we have this change of leadership
and the other hand we have they share buy back
and the finances. Anything else standing out to you from
their earnings report, Charlie.
Speaker 10 (10:41):
Yeah, you know, I think it really will just be
we're seeing that consumer accounts decreased, but you know with
the fourth compared to the fourth quarter of twenty twenty three,
so that's striking. And I think what's really interesting for
this bank is just this kind of pivot towards Asia,
and that's something that Quinn, who has announced his retirement today,
(11:01):
really focused on. He focused on simplifying the bank on
that pivot to Asia and selling a lot of assets
in the West. We'll have to see how that comes
comes down the line. But the buyback, I think could
let's see how that plays out. And shared trading.
Speaker 2 (11:14):
Okay, very interesting, Johnny, Thank you so much for the
reaction and digging into the latest results from HSBC Boomberg's
Charlie wells Now, the.
Speaker 4 (11:22):
US Treasury will need to borrow more money in the
current quarter. It's increased its financing needs by forty one
billion dollars for the period until June. This as the
US deficitis in focus ahead of November's election. Bomber TV
anchor Critty Group does with us for more on this story, Creaty,
just take us through what has the Treasury said about
its financing needs.
Speaker 1 (11:40):
So it looks like they've ramped up their estimate for
federal borrowing to about two hundred and forty three billion dollars.
That is a forty one billion dollar excess than the
estimates that you had on Wall Street, even within economists
within the Treasury as well net net. What you need
to know here is that this number came in a
little bit hot, but in the broader scheme of things,
it's not that hot. So there's been a little bit
of kind of mixed messaging around what this actually means
(12:02):
in terms of borrowing.
Speaker 5 (12:03):
There's obviously a lot.
Speaker 1 (12:04):
Of sensitivity around it, given some of the deficit issues,
some of the debt issues. But again, forty one billion dollars,
which is a lot for you and I, but for
not perhaps not a lot of US government but others.
Speaker 2 (12:14):
An analyst, you know, talking about it being a rounding era.
I mean, that's the flip side of it. What was
it tell us though about the state of the US's
public finances. Is it actually a cause for market concern?
I mean, it's not the same, but obviously if occasionally
once heard, you know, a Liz Trust type moment for
the US's possibility.
Speaker 5 (12:34):
I mean, it's a big, big statement.
Speaker 1 (12:37):
It's a big statement, but not out of the realm
of possibility. And I think one of the key things
to remember about this number is that this is coming
in the context of a buyback announcement that you're going
to get later this week as well. So one of
the big concerns here is a little bit for the
markets at least, less about the actual bottom line of
the US Treasury and more about kind of the liquidity
circumstances of the US bond market. And that's where this
(12:58):
number gets a little bit tricky, because ahead of the
FMC decision on Wednesday, you're also going to get that
buy back announcement, and right now, based on justice forty
one billion dollar excess, there doesn't seem to be a
big question about whether the kind of quarterly refunding announcements
that you're going to get later on or the even
buyback announcements from the Treasury, which we're put in place
last year to ensure that market liquidity. Those numbers aren't
(13:20):
changing just yet, and no one really expects them to,
and those are kind of the bigger ones to watch.
The doomsday scenario simply being that if you start to
see liquidity cracks the way we did in the middle
of last year, even the fall of last year, that
would be a bigger kind of hit to not just
the US bond market, but global bond markets and by extension,
central banks and economies. Then simply just this one for
(13:41):
one billion dollars, but that doesn't mean that there isn't
enough sensitivity to it. You did see the markets react
on what ordinarily a number they ordinarily would not react to.
Speaker 4 (13:48):
Well, throw it ahead to the what we're going to
be hearing from the FAD then for US critty, we
you know, are watching obviously to see what the runoff
of treasury holdings is from the FAD as.
Speaker 3 (13:57):
Well we are.
Speaker 1 (13:58):
And this is all all about kind of the QT
policy and right now that hasn't really changed in terms
of the selling. They don't actually sell bonds obviously, they
kind of let them just roll off their balance sheet
and don't engage in buying new ones. This is why
the Treasury is so important here because in a way,
because the Fed is rolling off these securities in their
balance sheet, they're adding more supply onto their market, and
(14:19):
they're not introducing kind of this buyer of last resort
the treasury market is they're actually recycling some of their
They're kind of getting rid of the older maturities bringing
on the newer ones. So that mechanism that a lot
of people saw as kind of the QI element to
the Fed is actually not coming from the Treasury. And
that's why the Treasury, I would argue, matters a little
bit more, especially ahead of by the way, not just
(14:39):
the Federal Reserve, but the election January twenty twenty five,
that's the deadline when we have these debt ceiling talks
hit us once again.
Speaker 3 (14:47):
This is Bloomberg Daybreak Europe, your morning.
Speaker 4 (14:49):
Brief on the stories making news from London to Wall
Street and beyond.
Speaker 2 (14:53):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 4 (14:59):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (15:05):
Our flagship New York station is also available on your
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Speaker 3 (15:12):
I'm Caroline Hepka, and I'm Stephen Carol.
Speaker 4 (15:15):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg DAYBA, a podcast available every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
thirtieth of April in London.
Speaker 3 (00:17):
I'm Caroline Hipki and I'm Stephen Carroll. Coming up today.
Speaker 4 (00:21):
Noel Quinn says he will retire as the CEO of
HSBC as the bank announces a multi billion dollar buy back.
Speaker 2 (00:28):
The US Treasury says it plans to borrow almost a
quarter of a trillion dollars by June.
Speaker 4 (00:34):
And Risky Business two sock Gen traders leave the bank
after making undetected bets that could have cost the lender
hundreds of millions of dollars.
Speaker 5 (00:44):
Let's start with a roundup of our top stories.
Speaker 4 (00:46):
Noel Quinn is stepping down as the boss of HSBC
after nearly five years in the role. Quinn now says
he plans to pursue a portfolio career, but we'll stay
on in the CEO job until a success has found.
The board says it's looking both internally and externally for
his replacement.
Speaker 3 (01:05):
The surprise announcement was.
Speaker 4 (01:06):
Made as HSBC reported a pre tax profit of twelve
point sixty five billion dollars, slightly beating estimates. That lender
also announced a share buy back of up to three
billion dollars, with guidance for the full year unchanged.
Speaker 2 (01:20):
And in other earnings news, Santander has reported results in
the first quarter that fell slightly short of estimates. NETT
income at the Spanish lender came in at two point
eight five billion euros, just down on the two point
eight nine billion that analysts had expected. The bank also
reported loan loss provisions slightly below expectations, at three point
(01:42):
one to three billion euros.
Speaker 4 (01:44):
The US Treasury has bumped up its federal borrowing estimate
for this quarter by twenty percent to two hundred and
forty three billion dollars. The upward move surprise dealers after
some had expected a downward revision. It comes as the
IMF warned last week the US government spending is on
an unsustainable path. Speaking to Bloomberg at the time, Deputy
(02:04):
Managing director Gita Gopinath warned that a seven percent deficit
can't be sustained.
Speaker 5 (02:10):
When the US is borrowing that heavily. That causes rays
to be that much higher.
Speaker 6 (02:15):
It has implications for the rest of the world and
for corporations and households.
Speaker 5 (02:19):
In the US.
Speaker 4 (02:20):
Copperhat's concern is reflected by Wall Street figures like Jamie
Diamond and Ken Griffin, who have called the current level
of borrowing irresponsible. The Treasury will set out how it
plans to raise that money tomorrow.
Speaker 6 (02:32):
Now.
Speaker 2 (02:32):
Two traders in Hong Kong have left Sussages General after
the bank discovered a batch of risky bets. The incident
has raised questions about risk management at one of Europe's
biggest banks. Bloomberg's team and a Bio has more.
Speaker 7 (02:45):
Their transactions could have cost the firm hundreds of millions
of dollars in the event of a market downturn, but
a slew of risky trades from a couple of employees
on Society General's Delta one desk still went undetected. Also
say internal risk management systems failed to register the activity
because of a glitch related to their timing. This latest
(03:07):
slip up at Sociuta General comes more than fifteen years
after Jerome Cavil, another Delta one trader, cost the firm
five point two billion dollars in London. Tewa Adubai, Blomberg.
Speaker 4 (03:18):
Radio Scotland's First Minister, Humsey Yusuf, has resigned, leaving the
Scottish National Party leaderless months away from a general election.
The head of the UK's third largest political party gave
a tearful press conference.
Speaker 8 (03:31):
I'm so blessed for having the opportunity that are afforded
to sour Fe to lead my country and who could
ask for a better country to lead than Scotland.
Speaker 4 (03:45):
The fallout from use OF's resignation is likely to benefit
the Labor Party. Earlier this month, care Starmer's party narrowly
overtook the SMP in Scotland's polls for the first time
since the failed Scottish independence referendum a decade ago.
Speaker 2 (04:00):
Factory activity expanded in eight Pril first second month. Bloomberg's
Brian Curtis has more from Hong Kong.
Speaker 6 (04:06):
The official PMI was fifty point four compared with an
estimate of fifty point three. Two positive months in a
row isn't all that much, but it is the longest
streak in more than a year, and it might suggest
sustained recovery. Policy Makers are leaning on manufacturing to offset
weak consumption. Analysts say more public spending and a cut
in interest rates will likely be needed if China wants
(04:28):
to hit its growth target of five percent. Meantime, that's
Haishien manufacturing PMI coming in at fifty one point four
the non manufacturing reading fifty one point two in Hong Kong.
Brian Curtis Bloomberg.
Speaker 4 (04:40):
Radio Elon Musk's net worth is soaring after it plunged
to the lowest level in a year. The entrepreneur added
eighteen and a half billion dollars to his fourteen in
one day, according to Bloomberg's Billionaires Index. That's after Tesla
shares rallied following tentative approval for its driver assistance system
in China and the unveiling of plans to introduce a
(05:00):
cheaper car as soon as this year. Bloomberg's Charlie Palette has.
Speaker 9 (05:04):
More In the past five days, the world's third richest person,
who's gained thirty seven point three billion dollars in net
worth according to the Bloomberg Billionaires Index. That's his largest
weekly gain since March of twenty twenty two, just before
he agreed to buy Twitter for forty four billion dollars
in one of the biggest leverage buyout deals in history.
(05:27):
Since then, his fortune has tumbled just as often as
it has increased. After a breathtaking ascent in twenty twenty
and twenty twenty one in New York, Charlie Pellett Bloomberg Radio.
Speaker 4 (05:40):
If that's some numbers out from the German airline of
Tanza as well, announcing that it will initiate a cost
cutting drive at the airline business, which will include freezing
projects and it'll also review hiring in some areas. This
is after the carrier was forced to pair back its
earning's outlook for the rest of the year because of
persistent strikes in Germany. So this is due to it's
(06:01):
looking at its fullier adjusted EBITDAB at two point two
billion euros, that slightly below the estimates. Earlier this month,
the airline had cut its annual profit outlook and predicted
that its annual profit would fall as the German airline
absorbs the financial hit from those strikes.
Speaker 2 (06:18):
Okay, so those are the latest earnings you need to
know about. In a moment, We're going to get more
then on the news from HSBC, plus a look at
the US public finances with the issue around the treasury
and how much more money.
Speaker 5 (06:32):
It's going to need to raise.
Speaker 2 (06:35):
But also this story from our colleagues this morning on
the Bloomberg terminal, writing about how an increase in the
share of equity trading that is happening just in the
very last few minutes of the trading day and what
that means.
Speaker 4 (06:47):
Yeah, look, Justina Lie's been writing about this and she
talks about how those three hundred and ninety minutes of
equity trading, but really only the last ten minutes seems
to be what counts. And it's not just in the US.
This is increasingly the case in Europe as well. In fact,
twenty eight percent of volumes in European equity trading now
happens in the closing auction period, and the S and
P five hundred it's around a third of training that
(07:08):
happens in those last ten minutes. This is data fro
Bloomberg Intelligence, but also from the analytics firm big x YT.
Speaker 3 (07:16):
So the problem here.
Speaker 4 (07:18):
If you listen to some arguing in the market, is
that it's necessarily passive investing causing more problems. You know,
these index funds driving the phenomenon because they buy and
sell shares at the close. Since the last prices of
the day are used to set the benchmarks that they
aim to replicate as well.
Speaker 3 (07:34):
It's you know, this is part of the ongoing argument
passive investing.
Speaker 5 (07:38):
Yeah, but you get it.
Speaker 2 (07:39):
But if there are no active managers kind of making
the decisions on on and examining closely individual businesses, you know,
that's the argument at least that perhaps passive investors are
looking at the index as a whole and not stock picking.
Speaker 4 (07:55):
Yeah, we'll get the full picture in both sides of
that argument from just in a las piece this morning
on that rush to trade at the end of the day.
Let's dig into the earning some HSBC now in the
needs that the bank CEO Nol Quinn is to retire
at Charlie Wells is here with details.
Speaker 3 (08:09):
Morning to you. Charlie. Is this big surprise then, that
Noil Quinn is leaving.
Speaker 10 (08:12):
Steven This is a huge surprise and it injects a
lot of drama into what was expected to be a
fairly regular earning season. I mean HSBC has actually been
performing fairly well over the past few quarters, and so
the question is, you know why this departure and Quinn,
you know, was always a sort of unusual, not unusual,
but maybe not cut from the cookie cutter mold of
a lot of the other leadership at HSBC. His first
(08:35):
job was actually digging ditches on a digging holes on
a building site, and actually joined at a small bank
that was ultimately acquired by HSBC in nineteen ninety two.
So really interesting career and drama sort of encapsulated his tenure.
You know, he really took over officially in twenty twenty
March of twenty twenty, that was the height of the
COVID crisis. He really oversaw this bank amidst rising tensions
(08:58):
between China and the West, China and Hong Kong. And
so he says that he'd like to go on to
build a quote portfolio career. Sounds like he wants to
maybe focus on some passion projects. Let's see, But the
bank is conducting a search and we know that they're
looking at both external and internal candidates.
Speaker 2 (09:14):
Okay, the bank in and of itself also releasing results
and another major buyback three billion dollars assign then of
the continued sort of bounty of all the higher interest
rates that we've seen.
Speaker 10 (09:27):
Yeah, so you know, HSBC is a bank that is
particularly sensitive to interest rates, and so the hope for
a lot of analysts had been that maybe we would
see some progress for HSBC and trying to move into
other business lines. And look, the lines that we're getting
out of the earnings are positive. So we're seeing pre
tax profit slightly beating estimates. We saw net interest income
(09:49):
I'm excuse me, net interest margin meeting beating estimates. And
some of the initial analysis that we're getting from HSBC
is that there's been a positive story on wealth management.
I think another becus will be on transaction banking as
we try to see if this bank can diversify away.
But one thing that's a little bit disappointing that's coming
across is forward guidance for the years looking like it's
(10:12):
remaining the same from February. There'd been hope that in
a world where interest rates might be staying higher for longer,
the bank would have kind of revised that up, but
it's looking like it's staying the same at least for now.
Speaker 9 (10:24):
Yeah.
Speaker 4 (10:24):
I mean, we're looking at the first share PARTSIS reaction
in Hong Kong after shares reopening after the break there
up by one point four percent, So interesting to see
how investors are parsing the headlines coming out of here,
because on one hand we have this change of leadership
and the other hand we have they share buy back
and the finances. Anything else standing out to you from
their earnings report, Charlie.
Speaker 10 (10:41):
Yeah, you know, I think it really will just be
we're seeing that consumer accounts decreased, but you know with
the fourth compared to the fourth quarter of twenty twenty three,
so that's striking. And I think what's really interesting for
this bank is just this kind of pivot towards Asia,
and that's something that Quinn, who has announced his retirement today,
(11:01):
really focused on. He focused on simplifying the bank on
that pivot to Asia and selling a lot of assets
in the West. We'll have to see how that comes
comes down the line. But the buyback, I think could
let's see how that plays out. And shared trading.
Speaker 2 (11:14):
Okay, very interesting, Johnny, Thank you so much for the
reaction and digging into the latest results from HSBC Boomberg's
Charlie wells Now, the.
Speaker 4 (11:22):
US Treasury will need to borrow more money in the
current quarter. It's increased its financing needs by forty one
billion dollars for the period until June. This as the
US deficitis in focus ahead of November's election. Bomber TV
anchor Critty Group does with us for more on this story, Creaty,
just take us through what has the Treasury said about
its financing needs.
Speaker 1 (11:40):
So it looks like they've ramped up their estimate for
federal borrowing to about two hundred and forty three billion dollars.
That is a forty one billion dollar excess than the
estimates that you had on Wall Street, even within economists
within the Treasury as well net net. What you need
to know here is that this number came in a
little bit hot, but in the broader scheme of things,
it's not that hot. So there's been a little bit
of kind of mixed messaging around what this actually means
(12:02):
in terms of borrowing.
Speaker 5 (12:03):
There's obviously a lot.
Speaker 1 (12:04):
Of sensitivity around it, given some of the deficit issues,
some of the debt issues. But again, forty one billion dollars,
which is a lot for you and I, but for
not perhaps not a lot of US government but others.
Speaker 2 (12:14):
An analyst, you know, talking about it being a rounding era.
I mean, that's the flip side of it. What was
it tell us though about the state of the US's
public finances. Is it actually a cause for market concern?
I mean, it's not the same, but obviously if occasionally
once heard, you know, a Liz Trust type moment for
the US's possibility.
Speaker 5 (12:34):
I mean, it's a big, big statement.
Speaker 1 (12:37):
It's a big statement, but not out of the realm
of possibility. And I think one of the key things
to remember about this number is that this is coming
in the context of a buyback announcement that you're going
to get later this week as well. So one of
the big concerns here is a little bit for the
markets at least, less about the actual bottom line of
the US Treasury and more about kind of the liquidity
circumstances of the US bond market. And that's where this
(12:58):
number gets a little bit tricky, because ahead of the
FMC decision on Wednesday, you're also going to get that
buy back announcement, and right now, based on justice forty
one billion dollar excess, there doesn't seem to be a
big question about whether the kind of quarterly refunding announcements
that you're going to get later on or the even
buyback announcements from the Treasury, which we're put in place
last year to ensure that market liquidity. Those numbers aren't
(13:20):
changing just yet, and no one really expects them to,
and those are kind of the bigger ones to watch.
The doomsday scenario simply being that if you start to
see liquidity cracks the way we did in the middle
of last year, even the fall of last year, that
would be a bigger kind of hit to not just
the US bond market, but global bond markets and by extension,
central banks and economies. Then simply just this one for
(13:41):
one billion dollars, but that doesn't mean that there isn't
enough sensitivity to it. You did see the markets react
on what ordinarily a number they ordinarily would not react to.
Speaker 4 (13:48):
Well, throw it ahead to the what we're going to
be hearing from the FAD then for US critty, we
you know, are watching obviously to see what the runoff
of treasury holdings is from the FAD as.
Speaker 3 (13:57):
Well we are.
Speaker 1 (13:58):
And this is all all about kind of the QT
policy and right now that hasn't really changed in terms
of the selling. They don't actually sell bonds obviously, they
kind of let them just roll off their balance sheet
and don't engage in buying new ones. This is why
the Treasury is so important here because in a way,
because the Fed is rolling off these securities in their
balance sheet, they're adding more supply onto their market, and
(14:19):
they're not introducing kind of this buyer of last resort
the treasury market is they're actually recycling some of their
They're kind of getting rid of the older maturities bringing
on the newer ones. So that mechanism that a lot
of people saw as kind of the QI element to
the Fed is actually not coming from the Treasury. And
that's why the Treasury, I would argue, matters a little
bit more, especially ahead of by the way, not just
(14:39):
the Federal Reserve, but the election January twenty twenty five,
that's the deadline when we have these debt ceiling talks
hit us once again.
Speaker 3 (14:47):
This is Bloomberg Daybreak Europe, your morning.
Speaker 4 (14:49):
Brief on the stories making news from London to Wall
Street and beyond.
Speaker 2 (14:53):
Look for us on your podcast feed every morning on Apple,
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Speaker 4 (14:59):
You can also listen live each morning on London DAB Radio,
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