Yemen Says It Retook Mocha Port as Hormuz Oil Transits Rise and Saudi Pipeline Runs Normally

ABEER: GOOD MORNING. THIS IS "HORIZONS: MIDDLE EAST & AFRICA." OUR TOP STORIES THIS MORNING, YEMEN SAYS ITS FORCE VS. TAKEN AND CLOSING IN ON BAB EL-MANDEB A KEY OIL ROUTE AS HORMUZ REMAINS UNDER FIRE. ALL-TIME HIGH A TECH RALLY ON WALL STREET PUSHES THE NASDAQ 100 TO A FRESH RECORD. ASIA STOCKS CONTINUE THE MOMENTUM. AND MIDDLE EAST MONEY OPENAI IS SET TO BE IN TALKS WITH MULTIPLE UAE FUNDS ON A $30 BILLION FINANCING GROUND. IT HAS JUST GONE 8:00 AM ACROSS THE EMIRATES. I’M ABEER ABU OMAR IN DUBAI. LET’S SHOW YOU A GLIMPSE OF WHAT MARKETS ARE DOING. WE’RE LOOKING AT A POSITIVE PICTURE WHEN IT COMES TO U.S. FUTURES. TRADING A LITTLE BIT HIGHER, .1% HIGHER. FOLLOWING THE TECH RALLY ON WALL STREET YESTERDAY. WE ALLUDED TO THAT IN THE HEADLINES. BUT NASDAQ 100 FUTURES DOING PRETTY MUCH THE SAME THING. THE NASDAQ 100 CLOSED AT ANOTHER RECORD HIGH YESTERDAY. DID THE SAME THING EARLY IN THE WEEK. BUT WE SAW SOME MEGACAPS, MICROSOFT, NVIDIA, ALSO CLOSING IN IN THE GREEN TURNING THE PICTURE POSITIVE ACROSS THE BOARD. AND THAT IS SEEPING INTO THE ASIA SESSION THIS MORNING. MSCI ASIA PACIFIC IS TILTING HIGHER AND BEEN FLUCTUATING IN ITS GAINS. BUT TILTING HIGHER THIS MORNING. OIL PRICES ALSO FLUCTUATED STILL ABOVE $100. BARREL. -- BARELY. ABOVE $100 A BARREL. BUT .4% HIGHER. WE WILL DISCUSS THIS STORY OF BRENT AND ENERGY PRICES, THE EAST-WEST PIPELINE. WHAT IS HAPPENING BETWEEN SAUDI ARABIA AND THE YEMEN-BASED HOUTHIS? LET’S TURN TO THE 10-YEAR YIELD. 5.32% ALMOST AT THIS POINT. STILL ROAMING AROUND MULTIYEAR HIGHS. IT IS ABOUT ONE BASIS POINT HIGH THEY ARE MORNING OF COURSE. AND THAT GAIN IN YIELDS IS ALSO SEEPING INTO BONDS IN ASIA, NEW ZEALAND, AUSTRALIA, THAT ARE ALSO DROPPING THIS MORNING. NOW, LET’S TURN TO ASIA AND SEE WHAT MARKETS ARE DOING THERE. AND WE’VE GOT WINNIE HSU IN HONG KONG. WHAT ARE YOU LOOK AT? >> GOOD MORNING, ABEER. WELL, WE ARE SEEING ASIAN STOCKS HEDGING HIGHER TODAY AROUND THOSE HIGHEST LEVELS IN ABOUT A MONTH. NOW, AS YOU JUST MENTIONED IT SEEMS QUITE RESILIENT WHEN WE HAVE THE ELEVATED OIL PRICES AND ELEVATED BOND YIELDS. AND TODAY, IT SEEMS LIKE WE ARE SEEING A BIT OF A MIXED PICTURE PERHAPS A BIT OF A ROTATION AWAY FROM THE CHIP MAKERS INTO THE CHIP EQUIPMENT MAKERS. AND THAT’S PERHAPS WHY YOU’RE SEEING SOUTH KOREA HERE DOWN ABOUT 1%. WHILE JAPAN IS ACTUALLY GAINING NOW HONG KONG SHARES ARE ALSO ACTUALLY OUTPERFORMER TODAY. GIVEN SENTIMENT BEING SUPPORTED BY THAT LICENSE DEAL BETWEEN QUALCOMM AND HUAWEI. NOW, WE FLIP THE BOARD AND CROSS-ASSET WE GOT THE RESULTS FROM THE 10-YEAR JGB BOND AUCTION. PRETTY SOLID DEMAND AND IN FACT IT WAS SEEING DEMAND WAY ABOVE 12-MONTH AVERAGE. SO MOST LIKELY GOING TO PROVIDE A NICE RELIEF TO THE G-10 BONDS. HOWEVER, AT THIS POINT, AS YOU JUST POINTED OUT, WE HAVE ASIA BONDS OVERALL STILL TRACKING THOSE LOSSES FROM TREASURIES. AND WHEN IT COMES TO THE JAPANESE YEN, BECAUSE OF THE RECENT WEAKNESS IN EURO, WE CONTINUE TO SEE THE YEN RIGHT NOW AROUND THAT 177 LEVEL. AND THIS IS COMING AFTER IT HAS ALREADY STRENGTHENED AGAINST THE EURO FOR THE PAST SEVEN SESSIONS AND BECAUSE OF THAT OVERWEIGHT, THAT JAPANESE INVESTORS HOLD AROUND THE FRENCH BONDS, THAT PERHAPS THIS UNWINDING THAT’S HAPPENING RIGHT NOW ALSO IS ACCELERATING THE MOVES IN THE YEN AGAINST THE EURO AS WELL. BACK TO YOU, ABEER. ABEER: WINNIE, THANK YOU FOR THAT UPDATE. LET’S TURN TO THE USUAL AND THE GEOPOLITICAL PICTURE HERE IN THE REGION. SAUDI BACKED GOVERNMENT SAID ITS ARMED FORCES HAVE RECAPTURED THE RED SEA CITY OF MOCHA. THIS IS ONE DAY AFTER ANNOUNCING A CAMPAIGN TO RECAPTURE TERRITORY HELD BY HOUTHI FIGHTERS. CAPTURING THE PORT CITY PUTS THE INTERNATIONALLY RECOGNIZED GOVERNMENT CLOSER TO TAKING OVER THE VITAL BAB EL-MANDEB STRAIT. MEANWHILE, SAUDI STATE MEDIA SAYS THE MILITARY IS ALSO OR HAS ALSO DESTROYED A BALLISTIC MISSILE LAUNCH PLATFORM IN THE CAPITAL SANAA. LET’S BRING IN STEWART LIVINGSTONE WALLACE, OUR EXECUTIVE EDITOR FOR THE MIDDLE EAST AND NORTH AFRICA TO GIVE US THE LATEST ON WHAT HAS HAPPENED QUITE QUICK TURNAROUND, STEWART. THIS WAS ANNOUNCED OVER THE WEEKEND AND NOW WE HAVE THE SAUDI COALITION BACKED YEMEN FORCES CAPTURING MOCHA, VITAL TERRITORY THAT IS VERY CLOSE TO -- WHAT CAN YOU TELL US ABOUT THE LATEST? >> I THINK YOU NEED TO PUT IN SOME CAVEATS AND ONE WE ARE RELYING ON THE CLAIMS BEING MADE BY THE YEMENI GOVERNMENT OR THE INTERNATIONALLY RECOGNIZED GOVERNMENT. SECONDLY, AS WE KNOW FROM RUSSIA-UKRAINE, YOU KNOW, FRONT LINES ARE ALWAYS SOMEWHAT MUDDLED AND CONFUSED. AND THEN THE THIRD THING IS CAN THEY HOLD IT? BECAUSE SO FAR, THEIR TRACK RECORD IN HOLDING TERRITORY HAS BEEN SOMEWHAT PATCHY. HAVING SAID THAT, YOU KNOW, IF THIS TURNS OUT TO BE TRUE AND SOMETHING THEY CAN HOLD, THAT IS STRATEGICALLY VERY IMPORTANT. OF COURSE, THEY HAVE THOSE MORE NORTHERN KOSTOL AREAS AND FOR YEARS HAVE BEEN FIRING ON SHIPPING SO IT DOESN’T REMOVE THE THREAT ENTIRELY. BUT IT’S AN INTERESTING DEVELOPMENT. AND ONE WE WILL KEEP WATCHING. AND THE SECOND THING IS WHAT EXACTLY IS THE HOUTHI RESPONSE? DO THEY FOCUS IT ON THE SOUTH? OR DO THEY FOCUS IT ON THE NORTH SPECIFICALLY? SAUDI ARABIA AND WHAT DAMAGE COULD THAT DO? SO IT’S -- IT’S A COMPLICATED SITUATION. AND ONE THAT WILL DEVELOP. ABEER: AND ONE THAT’S BEEN GOING ON FOR QUITE SOME TIME AT THIS POINT. STEWART, WHAT ABOUT OIL? WE HAVE A LOT OF REPORTS YESTERDAY, BRENT CRUDE PRICES WERE MOVING ON SOME REPORTS THAT THE EAST-WEST PIPELINE MIGHT BE SHUT. BUT THEN BLOOMBERG DID COME UP WITH A REPORT SUGGESTING THAT IT’S OPERATING AS NORMAL AS POSSIBLE, STILL 80% CAPACITY, WHAT CAN YOU TELL US ABOUT THAT? >> IT DOES SEEM TO BE RUNNING AT THE CAPACITY IT WAS WE SAID A COUPLE OF DAYS AGO. AT LEAST THAT’S BASED ON OUR REPORTING AND ON TOP OF THAT YOU HAVE KUWAIT THAT’S COME OUT AND SAID IT’S PRODUCING AT 75% OF PRE-WAR CAPACITY. YOU GOT IRAQ IN THE MARKET LOOKING FOR NEW TANKERS TO TAKE SUPPLY OUT THROUGH HORMUZ AND ALL OF WHICH POINTS TO A BETTER SUPPLY SITUATION. ON THE OTHER SIDE OF THAT EQUATION, YOU GOT THE HEAD OF RAM CO-SAYING THAT BY -- ARM CO-THAT BY HIS ESTIMATE DOWN 12 MILLION IN OIL AND THAT’S A HUGE NUMBER TO MAKE UP AND TAKE A VERY LONG TIME TO GET BACK UP TO THOSE PRE-WAR LEVELS WHICH I THINK AT $100 A BARREL AND PROBABLY STAY THERE FOR A WHILE. BECAUSE THE MARKET IS LOOKING AT THE SUPPLY SITUATION IN THE LONGER TERM. ABEER: YOU NOTED THAT MULTIPLE TIMES. OIL STILL VERY MUCH CLOSE TO $100 ON THE BARREL WHEN IT COMES TO BRENT. STEWART, THANK YOU FOR THOSE INSIGHTS. STEWART LIVINGSTONE WALLACE, BLOOMBERG’S EXECUTIVE EDITOR FOR THE MIDDLE EAST AND NORTH AFRICA. JUST LIKE HE WAS NOTING KUWAIT IS PUMPING OIL AT ABOUT 75% OF THE LEVEL SEEN BEFORE THE IRAN WAR AS MORE TANKERS TAKE THE RISK OF NAVIGATING THE STRAIT OF HORMUZ. THE CHIEF EXECUTIVE OFFICER OF KUWAIT PETROLEUM SAYS THE COUNTRY IS PRODUCING ABOUT TWO MILLION BARRELS A DAY COMPARED WITH ABOUT 2.6 MILLION BARRELS BEFORE THE CONFLICT BEGAN AT THE END OF FEBRUARY. KUWAIT’S OUTPIT FELL BELOW ONE MILLION BARRELS A DAY. THE OPENING MONTHS OF THE CONFLICT AS IRAN BLOCKED SHIPPING THROUGH THE WATERWAY. AND BLOOMBERG UNDERSTANDS THAT IRAQ IS SET TO HIRE ADDITIONAL TANKERS AS THE COUNTRY LOOKS FOR GREATER CONTROL OVER MOVING ITS OIL THROUGH THE HEAVILY CONTESTED STRAIT OF HORMUZ. BLOOMBERG UNDERSTANDS THAT STATE-OWNED IRAQI OIL TANKERS EXPECT TO -- ONE VERY LARGE CRUDE CARRIER AND A SMALLER SWISS IN THE COMING DAYS. THE COMPANY IS SEPARATELY PLANNING TO REISSUE A TENDER FOR MORE TANKERS AFTER A PREVIOUS EFFORT WAS CANCELED BECAUSE IT DID NOT GET ACCEPTABLE OFFERS. AND NOW BACK TO MARKETS. INVESTORS ARE SEEKING SAFETY IN GERMAN BONDS WHILE FRENCH AND ITALIAN DEBT REMAINS UNDER PRESSURE AMID MOUNTING CONCERNS OVER EUROPE’S FISCAL OUTLOOK. FRENCH RISK IS HOVERING NEAR LEVELS LAST SEEN DURING THE EURO DEBT CRISIS WITH INVESTORS CLOSELY WATCHING FOR SIGNS OF BROADER MARKET CONTAGION. GENE TANNUZZO IS THE GLOBAL HEAD OF FIXED INCOME AT COLUMBIA THREAD NEEDLE AND JOINS US TO DISCUSS EVERYTHING THAT’S HAPPENING IN EUROPE AND WIDER MARKET MOVES. GENE, GOOD MORNING. GOOD TO HAVE YOU WITH US. LET’S START WITH THE EURO PICTURE, THE CONTAGION THAT I GUESS WE COULD SAY HAD STEMMED FROM FRANCE’S POLITICAL AND FISCAL SITUATION. DO YOU EXPECT A WIDER CONTAGION IN EUROPE? BECAUSE WE ARE ALSO REPORTING ON A POLITICAL SITUATION THAT IS ABOUT TO TAKE PLACE IN SPAIN NOW? >> YES. WE DEFINITELY ARE CONCERNED ABOUT THE FISCAL SITUATION IN FRANCE SPREADING TO OTHER PARTS OF EUROPE. IF YOU LOOK NOW AND COMPARE THIS SITUATION TO WHERE WE WERE IN 2011, VALUATIONS ARE VERY DIFFERENT. THIS IS A VERY ACUTE ISSUE RIGHT NOW IN FRANCE. AND IF YOU LOOK AT THE CREDIT SPREAD OF FRANCE OVER GERMANY, THAT’S ABOUT DOUBLE THE AVERAGE OF THE OTHER SO-CALLED PIGS IF WE THINK BACK TO THE OLD ACRONYM FROM THAT TIME. PORTUGAL, ITALY, IRELAND, GREECE AND SPAIN. SO WE HAVEN’T SEEN IT SPREAD TO THE OTHER COUNTRIES YET REALLY. WE ALSO HAVEN’T SEEN IT SPREAD TO CORPORATE MARKETS. AND SO THOSE WOULD BE THE BULLS WE WOULD BE LOOKING AT TO SEE IF THIS IS TRULY A SITUATION LIKE WE SAW BACK AT THAT TIME 15 YEARS AGO. ABEER: OK. LET’S BRING BACK THE MONETARY SITUATION, THE GLOBAL ONE REALLY BECAUSE WE’RE NOT JUST LOOKING AT WHAT IS HAPPENING FROM THE FEDERAL RESERVE. WE’RE LOOKING AT THE CENTRAL BANKS ACROSS THE GLOBE. BUT TO FOCUS IN ON THE FEDERAL RESERVE, LOOKING AT WHERE YIELDS ARE RIGHT NOW, GENE, WHAT CONCERNS YOU THE MOST ABOUT THE CONTINUED ELEVATION AND THE MOVEMENT THERE? >> WELL, LOOK, I THINK THE BIGGEST CONCERN HERE IS THAT THE FED HAS TO DO MORE THAN A CREDIBILITY ENHANCING MOVE AS IT RELATES TO A FEW INTEREST RATE HIKES EARLY ON IN KEVIN WARSH’S TENURE. WHAT WE’VE SEEN SO FAR IS THE NEW FED CHAIR TRY TO ESTABLISH HIMSELF AS ONE WHO’S NOT GOING TO LOOK PAST ELEVATED INFLATION. AND WE WOULD ESTIMATE SOMETHING PERHAPS ALONG THE LINES OF THREE INTEREST RATE HIKES, TAKING OUT THE INTEREST RATE CUTS OF 2025. IF WE REALLY DO NEED TO GO MUCH FURTHER THAN THAT, I THINK THAT COULD BE A TRUE PROBLEM FOR MARKETS. AND THAT’S SOMETHING THAT CAN REALLY DISRUPT PRICING AND RISK, INCLUDING CREDIT SPREADS AND EQUITIES. ABEER: OK. AND SPEAKING OF PRICING IN SOME EXPECTED OUTCOMES, LET’S SAY THE FED, THE BOJ, THE ECB, DECIDE TO GO IN DIVERGING PATHS GOING FORWARD, AND TO THE END OF THIS YEAR, AND CERTAINLY INTO 2027, WHAT IMPACT DOES THAT HAVE AND WHAT ASSET CLASS WOULD BREAK? >> WELL, I THINK IT HAS TO BE CTE MARKETS THAT WE LOOK AT HERE AS A PRIMARY VARIABLE. OTHER PERIODS WHEN WE’VE SEEN SUCH AN INTEREST RATE SHOCK, IT TAKES A LITTLE BIT OF TIME FOR THAT TO FEED INTO CREDIT MARKETS AND CREDIT FUNDAMENTALS. WE’VE BEEN IN SUCH A BORROWING BINGE AS IT RELATES TO CAPEX FUNDING FOR ARTIFICIAL INTELLIGENCE INFRASTRUCTURE THAT AT SOME POINT, THE COST OF CAPITAL BEGINS TO MATTER FOR ALL KINDS OF OTHER USES OF THAT CAPITAL BEYOND JUST THAT SPECIFIC ACUTE SECTOR IN TERMS OF TECHNOLOGY AND AI. SO WHAT WE’RE LOOKING FOR REALLY IS SPREADING OF THAT VOLATILITY, SPREADING OF THAT INTEREST RATE SHOCK INTO A CREDIT SHOCK. AND I THINK THAT’S ULTIMATELY WILL TIGHTEN FINANCIAL CONDITIONS. IN SEPTEMBER WE’RE JUST SEEING THE VERY BEGINNING OF THAT WITH HIGH YIELD CORPORATE BOND SPREADS ABOUT HALF A PERCENT WIDER. ABEER: OK. AND GENE, WE TALK A LOT ABOUT WHAT KEVIN WARSH IS GOING TO DO. WE SPOKE A LOT ABOUT -- SEPTEMBER HIKE AS A CREDIBILITY HIKE. BUT DO YOU THINK WE’RE ENTERING A WORLD WHERE BOND MARKETS ARE PRICING IN A NEW REGIME IF YOU WERE THAT CENTRAL BANKS HAVE NO CONTROL OVER AT LEAST LONG-TERM OR LONGER END YIELDS? >> THE WAY WE THINK ABOUT THAT IS REALLY RESETTING TO A PERIOD OF MORE NORMALIZED TERM PREMIUM. SO THE FIRST THING IS TO SET THE EXPECTATIONS FOR THE SHORT TERM INTEREST RATE. BUT THEN WE HAVE TO THINK ABOUT LONGER MATURITY YIELDS AND WHAT’S THE NATURAL PREMIUM ABOVE SHORT-TERM INTEREST RATE EXPECTATIONS. IF WE GO BACK TO THE PERIOD BEFORE QUANTITATIVE EASING, THAT WOULD HAVE BEEN BETWEEN 1% AND 1.5%. TERM PREMIUM WAS REMARKABLY DEPRESSED WHEN WE WENT THROUGH THE PERIOD AFTER THE FINANCIAL CRISIS AND AFTER THE PANDEMIC. BUT THOSE DAYS ARE OVER. AND NOW AS WE RESET TO A MORE NORMALIZED LEVEL THAT’S WHERE I THINK LONGER-TERM INTEREST RATES HAVE ROOM TO CONTINUE TO RISE JUST A BIT AND HAVE YIELD CURVES BE STEEPER AS THAT PREMIUM COMES BACK INTO THE MARKET. ABEER: OK. AND JUST FINALLY I WANT TO BRING IT BACK TO EUROPE BECAUSE IT IS A VERY TIMELY STORY RIGHT NOW. STARTING AGAIN WITH FRANCE. YOU’VE ALLUDED TO THE FACT THAT IT IS QUITE DANGEROUS. BUT WHEN DO YOU THINK IT STARTS TO REALLY SEND DANGER SIGNS TO THE WIDER MARKET? WHEN DOES IT START TO BECOME A BIG EURO AREA PROBLEM AND THE SITUATION THAT IS STEMMING OUT OF FRANCE? BUT AGAIN, WE’RE -- WE’RE TALKING FRANCE, GERMANY AND EVEN THE UK TO SOME EXTENT AND NOW SPAIN? >> YEAH. YOU’RE ABSOLUTELY RIGHT TO BRING UP THAT. AND I LOOK AT TWO VERY SPECIFIC THINGS. FIRST IS A FUNDAMENTAL CATALYST AND THE OTHER IS A VALUATION CATALYST. ON THE FUNDAMENTAL SIDE WE WOULD BE LOOKING AT PENSION REFORM AND SOME WILLINGNESS TO MOVE TOWARD A LOWER DEFICIT FROM FRANCE. IN THE ABSENCE OF THAT, THE VALUATION MONITOR WE WOULD BE LOOKING AT IS CORPORATE SPREADS WHICH IN OTHER PERIODS WHEN FRENCH SPREADS OVER GERMANY WERE THIS WIDE, WE SAW CORPORATE SPREADS MORE THAN TWICE AS ELEVATED. AND SO WE HAVEN’T SEEN THAT REACTION WITH EUROPEAN CORPORATE BOND INVESTMENT GRADE SPREADS STILL AROUND 1%. IF WE START TO SEE A REACTION OF THOSE GOING SUBSTANTIALLY WIDER THAT WOULD BE A CAT LEFT FOR US TO THINK ABOUT A, IS THERE A FUNDAMENTAL CHANGE HERE? OR SHOULD WE BE MORE CONCERNED? ABEER: OK. SO I GUESS WE’LL HAVE TO KEEP AN EYE ON THOSE CATALYSTS THAT YOU’RE MENTIONING. GENE, THANK YOU AS ALWAYS FOR YOUR TIME. GENE TANNUZZO OF COLUMBIA THREAD NEEDLE WITH HIS LATEST INSIGHTS. AND UP NEXT, AUSTRALIAN LAWMAKERS ARE GIVING EXECUTIVES FROM OPENAI AND OTHER AI FIRMS A GRILLING OVER SAFETY CONCERNS. MORE DETAILS ON THAT NEXT. THIS IS BLOOMBERG. ABEER: WELCOME BACK TO "HORIZONS: MIDDLE EAST & AFRICA." BLOOMBERG HAS BEEN TOLD THAT PRESIDENT TRUMP IS PREPARING TO EASE LIMITS ON A TAX EXEMPT VARIETY OF DIESEL. IT IS A BID TO LOWER THE PRICE OF THE ESSENTIAL FUEL AHEAD OF THE NOVEMBER MIDTERM ELECTIONS. SOURCES SAY THE PLAN ALLOWS MORE WIDESPREAD USE OF SO-CALLED RED DIESEL WHICH IS USUALLY RESERVED FOR FARMING AND CONSTRUCTION. TOP OFFICIALS IN THE U.S. AND INDIA ARE SIGNALING THAT TRADE DEAL BETWEEN -- TALKS HAVE REACHED AN IMPASSE THAT IS MAKING IT DIFFICULT TO CLINCH AN AGREEMENT. THE TWO SIDES AGREE TO AN INTERIM DEAL EARLIER THIS YEAR AND HAVE BEEN LOCKED IN NEGOTIATIONS EVER SINCE. INDIAN FINANCE MINISTER NIRMALA SIR MATHEN TALKS HAVE REACHED A PLATEAU BEYOND WHICH COMPROMISE WILL BE DIFFICULT. GERMANY AND FRANCE ARE URGING THE EU TO ADOPT POWERS THAT COULD BLOCK CHINA AND OTHER COUNTRIES FROM ACCESSING ITS SILL SINGLE MARKET DURING A MAJOR TRADE DISPUTE. THE PROPOSAL WAS OUTLINED IN A LETTER TO EU CHIEF URSULA VON DER LEYEN IN A BID TO REDUCE RELIANCE ON FOREIGN SUPPLY CHAINS. BOTH COUNTRIES ALSO WANT BROADER INVESTIGATIONS INTO SUBSIDIZED I PORTS WHICH COULD LEAD TO NEW TARIFFS. SPANISH PRIME MINISTER PEDRO SANCHEZ HAS CALLED A SNAP ELECTION AMID A HOUSING AFFORDABILITY CRISIS. IT COMES AFTER PARLIAMENTARY REJECTED THE PLAN TO INTERVENE IN THE HOUSING MARKET FOLLOWING PROTESTS ACROSS THE COUNTRY. POLLS SUGGEST THE CENTER-RIGHT PEOPLE’S PARTY COULD TOPPLE THE MINORITY GOVERNMENT LED BY SANCHEZ WHO’S BEEN IN OFFICE SINCE 2018. AND COMING UP, BLOOMBERG HAS LEARNED THAT CHINESE AI STARTUP MOONSHOT IS TARGETTEN AN EARLY HONG KONG IPO AFTER REACHING A $50 BILLION VALUATION IN ITS LATEST FUNDRAISE ROUND. WE WILL BRING YOU THE DETAILS LATER THIS HOUR. THIS IS BLOOMBERG. >> WHEN IT COMES TO THE IMPACT ON THE ECONOMY, CLEARLY IF WE DO THIS RIGHT, THERE WILL BE A PRODUCTIVITY DIVIDEND. FOR AUSTRALIA AND FOR EVERY ECONOMY AROUND THE WORLD IF WE GET IT RIGHT. THAT’S WHY WE PUT SO MUCH TIME AND EFFORT AND ENERGY INTO MAKING SURE THAT WE DO GET IT RIGHT. ABEER: AUSTRALIAN TREASURER JIM CHALMERS SPEAKING TO US EXCLUSIVELY EARLIER ABOUT THE OPPORTUNITIES AND RISKS POSED BY ARTIFICIAL INTELLIGENCE. NOW, OPENAI IS IN TALKS WITH MULTIPLE INVESTMENT FUNDS FROM THE UNITED ARAB EMIRATES TO HELP ANCHOR A $30 BILLION ROUND OF FINANCING. THE UAE FUNDS HAVE DISCUSSED PUTTING IN AS MUCH AS $10 BILLION ALTOGETHER AND BLACKROCK IS IN DISCUSSIONS TO PARTICIPATE. TOP AI FIRMS HAVE PREVIOUSLY TURNED TO DEEP POCKETED INVESTORS IN THE MIDDLE EAST TO MEET THEIR LARGE CAPITAL NEEDS. AND STICKING WITH AI, OPENAI’S CHIEF STRATEGY OFFICER JASON KWAN HAS APOLOGIZED TO AUSTRALIAN LAWMAKERS AFTER ONE OF ITS AI MODELS BREACHED A GOVERNMENT WEBSITE. KWAN MADE AN APOLOGY WHILE TESTIFYING TO THE AUSTRALIAN PARLIAMENTARY INQUIRY ON AI SAFETY. >> I WANT TO BEGIN WITH AN APOLOGY. DURING INTERNAL TRAINING AND VALUE AND EVILS OUR MODELS ACCESSED WEBSITES IN WAYS THEY WERE NOT DIRECTED TO. THAT SHOULD NOT HAVE HAPPENED. WE ALSO SHOULD HAVE HANDLED OUR RESPONSE BETTER. WE ARE SORRY. AND WE KNOW WE HAVE WORK TO DO TO REBUILD TRUST WITH THE AUSTRALIAN PEOPLE. ABEER: BLOOMBERG’S PAUL ALLEN JOINS US NOW FROM OUTSIDE THE INQUIRY VENUE AT THE NEW SOUTH WALES PARLIAMENT. PAUL, GOOD MORNING. GOOD TO HAVE YOU WITH US. WAHAB US THROUGH WHAT’S HAPPENING -- WALK US THROUGH WHAT’S HAPPENING. WE HEARD THAT APOLOGY BUT WALK US THROUGH THE INTRICATES OF THAT HEARING. >> SUGGESTING JASON KWON, NOT THE ONLY AI EXECUTIVE TO BE APPEARING HERE. BUT OPENAI WAS AT THE CENTER OF THAT INCIDENT BACK IN JUNE WHERE AN OPENAI AGENT BREACHED A MEDICARE STATISTICS WEBSITE. NOW, THIS IS NOT A PUBLIC-FACING WEBSITE. IT JUMPED GUARD RAILS TO DO SO. ANTICIPATE’ DIDN’T EVEN FIND OUT ABOUT IT THEMSELVES UNTIL AUGUST AND THEN DIDN’T TELL THE GOVERNMENT UNTIL SEPTEMBER 10. AND THEN DID SO VIA EMAIL. SO THAT’S THE BASIS OF THAT APOLOGY THERE. UNDER QUESTIONING, HE WAS ASKED, WELL, LOOK, IF YOU HADN’T TOLD THE GOVERNMENT, WOULD WE HAVE EVEN KNOWN NOW? TO WHICH MR. KWON RESPONDED THAT THAT WAS A REASONABLE ASSUMPTION AND AFTER ANOTHER QUESTION HE CONCEDED AT THAT NOT EVEN SAM ALTMAN, THE OPENAI CEO, KNEW ABOUT THE BREACH, EITHER, WHEN HE MET THE AUSTRALIAN DEPUTY PRIME MINISTER RICHARD MILES BACK IN SEPTEMBER. SO A NUMBER OF TERRIBLE MISSTEPS WHICH WERE BEHIND THAT APOLOGY. AND IMPORTANT TO NOTE THAT NO PERSONAL OR PRIVATE INFORMATION WAS LEAKED PUBLICLY AS A RESULT OF THAT BREACH. BUT OBVIOUSLY THE CONCERN IS THAT THEY GOT LUCKY RATHER THAN THAT BEING GOOD MANAGEMENT. SO MR. KWON SAYING A NUMBER OF PROCEDURES HAVE BEEN PUT IN PLACE TO PREVENT THAT FROM HAPPENING AGAIN. AND THEY HAVE ALREADY DETECTED AND PREVENTED A FEW BREACHES OF A SIMILAR NATURE. ABEER: OK. AND PAUL, OBVIOUSLY THIS IS A DEVELOP SITUATION. BUT HOW MUCH OF AN IMPACT CAN YOU TELL US THAT THIS INQUIRY WOULD HAVE ON THE WAY THESE COMPANIES OPERATE? >> WELL, WE HEARD FROM ANTHROPIC TODAY. MICROSOFT AND GOOGLE REPRESENTATIVES UP NEXT AND THE POINT OF ALL THIS QUESTIONING IS TO PUT TOGETHER SOME SORT OF REGULATORY FRAMEWORK. THE MCADOO HE IS GOING TO FINISH ITS WORK AT THE END OF NOVEMBER AND REPORT BACK AND I WOULD IMAGINE IN 2027. SOME SORT OF LEGISLATION IS GOING TO BE PUT TOGETHER. ANOTHER QUESTION THAT MR. KWON WAS ASKED, IS THERE ANY JURISDICTION THAT AUSTRALIA CAN LOOK TO TO HELP BETTER MANAGE THESE SITUATIONS AND TO WORK WITH THE AI COMPANIES TO PREVENT CYBER SECURITY BREACHES LIKE THIS IN THE FUTURE? AND WHICH MR. KWON SAID YOU COULD LOOK TO THE UNITED STATES, FOR EXAMPLE. AND AUSTRALIA BEING A U.S. ALLY, AND FIVE EYES PARTNER AND NATURAL SYNERGIES THERE TO WORK TOGETHER. THE INTENTION TO GET THESE MODELS INTO THE HANDS OF TRUSTED ACT YEARS IN GOVERNMENT FIRST BEFORE ANYBODY ELSE CAN ACCESS THEM. SO THERE’S LIKELY TO BE SOME SORT OF REGULATION DOWN THE TRACK IN 2027. THE CHALLENGE FOR AUSTRALIA IS NOT GETTING TOO CONSUMED WITH THE RISKS TO THE POINT THAT THE OPPORTUNITY AROUND AI IS CRUSHED. ABEER: YEAH. PAUL, THANK YOU SO MUCH FOR THAT UPDATE. BLOOMBERG’S PAUL ALLEN JOINING US FROM SYDNEY. LET’S GIVE YOU A QUICK LOOK AT WHERE MARKETS ARE SITTING BEFORE WE HEAD TO THE -- LOOKING AT A FUTURES PICTURE THAT IS POSITIVE ACROSS THE BOARD. S&P FUTURES .1% HIGHER AND NASDAQ 100 CONTINUING THAT MOMENTUM WITH A FRESH RECORD HIGH THAT WAS ESTABLISHED YESTERDAY. .2% HIGHER. DOW JONES ALSO TILTING UPWARD AND EURO STOXX 50 FUTURES STRONGER MOMENTUM THERE. .4% HIGHER POINTING TO A PRETTY POSITIVE START IN EUROPE LATER TODAY. THIS IS AS OIL PRICES GAIN ONLY SLIGHTLY THIS MORNING WITH BRENT STILL ABOVE BARELY $100 PER BARREL. NOW, COMING UP, BLOOMBERG UNDERSTANDS THAT OPENAI IS IN TALKS WITH MULTIPLE UAE INVESTMENT FIRMS AND BLACKROCK TO HELP ANCHOR A $0 BILLION ROUND OF FINANCING. MORE ON THAT STORY NEXT. THIS IS BLOOMBERG. ABEER: GOOD MORNING. THIS IS "HORIZONS: MIDDLE EAST & AFRICA." OUR TOP STORIES THIS MORNING -- YEMEN SAYS ITS FORCES HAVE TAKEN -- AND ARE CLOSING IN ON BAB EL-MANDEB, A KEY OIL ROUTE AS HORMUZ REMAINS UNDER FIRE. ASIA STOCKS DON’T MOMENTUM. AND MIDDLE EAST MONEY OPENAI IS SAID TO BE IN TALKS WITH MULTIPLE UAEFUNDS ON A $30 BILLION FINANCING GROUND. LOOKING POSITIVE ACROSS THE BOARD. THE S&P 500 CLOSED IN THE GREEN. NASDAQ 100. A FRESH RECORD HIGH. DID THAT EARLIER THIS WEEK. NOW YOU’RE SEEING THE MOMENTUM CONTINUING. WE SAW SOME MEGACAP GAINS. NVIDIA MICROSOFT GAINING. BRENT CRUDE $100 ON THE BARREL. ALMOST IN EXACTLY $100 ON THE BARREL THIS MORNING. TRADING .2% HIGHER THIS MORNING AS WE MONITOR THE DEVELOPMENT NOT JUST IN THE STRAIT OF HORMUZ BUT THE FIGHTING THAT IS TAKING HOMETOWN HOLD BETWEEN SAUDI ARABIA AND THE SAUDI LED DEMOTION YEMEN AND THE HOTIS. THE YEMEN FORCES, LEGITIMATE ONES, I GUESS OF STRONG POINT FOR THE YEMEN-BASED HOTIS. LOOK AT THE YIELDS. THE 10-YEAR BENCH MARK YIELDS. 5.3% THIS MORNING. A BASIS POINT GAIN. THAT IS HAVING AN IMPACT ON BOND ACTION ACROSS ASIA. BONDS DROPPING ALONG WITH THE ONE NBC AUSTRALIA AND NEW ZEALAND AND FOR THE TREASURIES, PS THE YIELDS ARE STILL AROUND MULTIDECADE HIGHS. WE HAVE WINNIE HSU FOR US IN HONG KONG. WHAT ARE YOU LOOKING AT NOW? WINNIE: GOOD MORNING, ABEER. ASIAN STOCKS EDGING HIGHER FOR A SECOND DAY. 2% AWAY FROM RETREATING ITS ALL TIME HIGHS. HIGHER YIELDS. HOWEVER THE PICTURE TODAY IS A BIT OF A MIX AND SOME SAY THIS IS PERHAPS A BIT OF A ROTATION THAT WE SEE AWAY FROM THE CHIP MAKERS AND SOME OF THESE EQUIPMENT MAKERS AND THAT IS PERHAPS WHY YOU’RE SEEING SOUTH KOREA DOWN 1% TODAY FOLLOWING A HOLIDAY YESTERDAY. JAPAN CONTINUES TO GO HIGHER. WHEN IT COMES TO THE JGB10-YEAR AUCTION, JUST NOW, WE SEE PRETTY SOLID DEMAND. IN FACT IT IS WAY HIGHER THAN WHAT WE SEE FOR THE 12-MONTH AVERAGE COMING AT THE 10-YEAR YIELD ABOVE THAT 3%. THAT IS UNDERPING SOME OF THE BUYING DEAND IN. ANOTHER OUTPERFORMER TODAY IS HONG KONG STOCKS. UP 0.8% FOLLOWING A SELLOFF YESTERDAY. DEMAND IS WEAK GIVEN THAT MAINLAND CHINA IS ON HOLIDAY. TODAY SENTIMENT BEING SUPPORTED BY THE LICENSE DEAL BETWEEN QUALCOMM AND THAT WAY AND SOME SAY THIS IS POSITIVE FOR HUAWEI, POSITIVE FOR THE CHINESE TECH COMPANIES GIVEN THAT IT IS A VALIDATION OF THE CAPABILITIES OF THESE CHINESE TECHNOLOGY COMPANIES AND SUPPORTIVE OF THE CHINESE SUPPLY CHAIN COMPANIES HELPING THEM TO EXPANT GLOBAL FURTHER. ABEER: THANK YOU FOR THAT UPDATE. STICKING WITH TECHNOLOGY AND AI, BLOOMBERG UNSEENS OPEN YAY IS IN TALKS WITH MULTIPLE INVESTMENT FUNDS FROM THE UAETO ANCHOR A $30 BILLION ROUND OF FINANCING. THE FUNDS HAVE DISCUSS PUTTING IN AS MUCH AS $10 BILLION ALL TOGETHER AND BLACKROCK IN DISCUSSIONS TO PARTICIPATE. WE’RE JOINED BY ANTHONY STEVENS FROM HONG KONG TO TELL US WHAT’S HAPPENING. CAN YOU GIVE US MORE DETAILS ABOUT THIS POTENTIAL ROUND OF FINANCING? >> IT IS INTERESTING BLOOMBERG REPORTED EARLIER OPENAI WAS GOING RAISE AROUND $30 BILLION AS PART OF ITS INITIATIVE AS IT LOOKS TO DEAL WITH THIS CONCERNS. THEY ARE FACING THE FRONTIER INITIATIVE. IT IS INTERESTING TO SEE HOW AGGRESSIVE THE MIDDLE EAST HAS BECOME. YOU HAVE ABU DHABI STATE BACK FUND THAT HAD RAISED $50 BILLION FOR THIS KIND OF INVESTMENT. PUT IN THE ANCHOR AROUND THIS INVESTMENT. BLACKROCK MAY BE PARTICIPATING. THAT SHOWS THE RISK APPETITE FOR THE PRIVATE PLACEMENT. WE HAVE R-HEARING PLENTY OF OTHER INVESTMENTS IN AUSTRALIA AND HONG KONG. THERE IS A LOT OF DEMAND. THIS COMES AS CHATGPT IS PENAL GAME CHANGER IN TERMS OF OPENAI’S COMPETITION WITH ANTHROPIC. PAUSING THE IPO BUT ALSO THE PACE OF FRONTIER AND DEVELOPMENT GIVEN THE RHYS RECEIVER THESE MODELS LIKE CHATGPT THAT CAN REALLY PUSH OPENAI’S MONETIZATION. IT WILL BE INTERESTING TO SEE WHAT VALUATION, THIS ROUND CLEARS. 1.4 TRILLION. LET’S SEE WHERE THE FINAL NUMBERS COME TO REST. ABEER: THIS PART OF WORLD IS VERY INTERESTED IN ARTIFICIAL INTELLIGENCE. WE REPORTED THAT MULTIPLE TIMES OVER THE PAST FEW YEARS. YOU ALLUDED TO THAT IN YOUR ANSWER. CAN YOU WALK US THROUGH HOW IMPORTANT THE MIDDLE EAST, THE GULF IN PARTICULAR IS BECOMING TO COMPANIES LIKE OPENAI? >> FOR SURE. I THINK IT IS DIVERSIFICATION AWAY FROM THE OIL AND GEO POLITICS, WE HAVE SEEN ACROSS THE GULF THEY HAVE AN APPETITE FOR SPENDING. THE MILITARY SPENDING THAT HAS NEEDED TO BE DONE ACROSS THE GULF AND SAUDI ARABIA AS WELL. A REALLY GOOD EXAMPLE OF THIS. THEY RAIDS AROUND $50 BILLION AS PART OF THE -- TO CONTINUE TO PLAY IN THIS SPACE. A HUGE BACKER OF SOFTBANK’S INITIATIVE. A HUGE AND EARLY BACKER. THEY ARE PLAYING WITH A LITTLE BIT OF HOUSE MONEY HERE. THE GULF HAS CAUGHT ON TO THE AI RALLY EARLY BY BACKING SOFTBANK. THERE IS A LOT OF MOMENTUM HERE. IN TERMS OF THE INFRASTRUCTURE SIDE, THERE IS A LOT OF PUSH TO BRING DATA CENTERS TO THE GULF AND BUILD OUT THAT KIND OF COMPUTING INFRASTRUCTURE. THAT PHASES IN TERMS OF GETTING CONSTRUCTION GOING AGAIN? THE GULF. ABEER: SO MANY IMPORTANT POINTS. THANK YOU ANTHONY FOR YOUR TIME. ANTHONY STEVENS JOINING US OUT OF HONG KONG. IT IS AN AI-LED DAY. BLOOMBERG LEARNED THAT MOON SHOT AI HAS CLOSED ITS LATEST FUND RISING ROUND AT $50 BILLION. IT IS HEADING TOWARDS AN IPO IN HONG AMONG THE THE FIRST QUARTER OF 2027. ADMINISTER HONG KONG. YOU TELL US WHAT MORE WE KNOW ABOUT THIS POTENTIAL IPO STEP IN. >> GOOD MORNING. THIS IS ANOTHER EXAMPLE OF WHAT ANTHONY WAS TALKING ABOUT. THE INSATIABLE DEMAND FOR AI AND THE HUGE APPETITE FOR INVESTORS TO PARTICIPATE IN THESE DEALS. MOON SHOOT IS ONE OF THE BIGGEST STORIES, THE HOTTEST STORIES OF THE CHINESE AI INDUSTRY. THEY BURST ON THE SCENE IN JULY. THEIR LATEST MODEL CAN GO TOE-TO-TOE WITH SOME OF THE BIG U.S. MODELS IN SOME METRICS. THAT HAS REFLECTED IN THE VALUATION. THEY RAISED FUNDS ABOUT $31.5 BILLION. NOW UP TO $50 BILLION. THAT SHOWS HOW MUCH ENTHUSIASM THERE IS AROUND THE COMPANY. THAT SETS THEM UP FOR AN IPO. THEY HAVE TO GO THROUGH SOME REGULATORY HURDLES AND HAVE TO GET EVERYTHING IN ORDER. IT REALLY SHOWS THAT NEXT YEAR WILL BE ANOTHER BLOCKBUSTER YEAR FOR HONG KONG FUND RAISING. ABEER: SPEAKING OF THAT, BLOOMBERG REPORTING ANOTHER POTENTIAL IPO IN THE AI SPACE. WE’RE TALKING ABOUT CLING AI THAT HAS PICKED BANKS FOR A HONG KONG IPO. SOURCES TELL US THIS COULD BE DONE AS SOON AS NEXT YEAR. WHAT DOES THE BROADER PICTURE TELL US ABOUT THE MACRO PICTURE IN ASIA AND HONG KONG CERTAINLY THE APPETITE FOR IPO’S WHEN IT COPS TO THESE ARTIFICIAL INTELLIGENCE COMPANIES. >> YES. THE DEALS DON’T STOP COME. THERE IS SO MUCH HAPPENING IN THIS SPACE. CLING, A VIDEO AI COMPANY AND THEY ARE TARGETING AN IPO AT LEAST 1 BILLION. ANOTHER SIZABLE DEAL IN HONG KONG. THIS SUMMER WAS REALLY, REALLY BUSINESS +. THEY DIDN’T TAKE ANY BREAKS. WE HAD MASSIVE DEALS LIKE ALIBABA’S OFFERING. THERE IS A LOT MORE DEAL MAKING NAPPING HONG KONG AND THE BASE DOESN’T SEEM TO -- HAPPENING IN HONG KONG AND THE BASE DOESN’T SEEM TO STOP. HONG KONG WILL REMAIN A CENTER OVER THE CHINESE AI-LED FUND RAISING EFFORT. WE WILL SEE MANY MORE DEALS COME IN. ABEER: LOOKS LIKE 2027 WILL BE A BUSY IPO YEAR. THANK YOU. COMING UP BELOWA CONTINUES TO SPREAD IN THE EBOLA CONTINUES TO SPREAD IN THE DEMOCRATIC REP OF CONGO. WE WILL HAVE MORE NEXT. THIS IS BLOOMBERG. ABEER: WELCOME BACK TO "HORIZONS MIDDLE EAST AND AFRICA." 20 WEEKS INTO THE EBOLA VIRUS OUTBREAK. HEALTH WORKERS HAVE MANAGED TO TAMP DOWN SOME OF THE HOT SPOTS BUT THE VIRUS IS STILL SPREADING IN THE DEMOCRATIC REP OF CONGO. JEN, WHAT CAN YOU TELL US ABOUT THIS SITUATION HEALTH SITUATION AND WHAT HEALTH WORKERS ARE FACING ON THE GROUND? JENNIFER: IF WE TAKE A LOOK AT WHAT WE HAVE SEEN, IT HAS BEEN SEVERAL WEEKS AND MONTHS THAT THIS CRISIS HAS GONE ON. WHAT BEGAN AS A VIRUS THAT WAS REALLY SPREADING IN THREE HEALTH ZONES ACROSS SEVEN PROVINCES HAS NOW EXPANDED TO 64. THAT REALLY ILLUSTRATES THE SITUATION ON THE GROUND THERE. FOR HEALTH WORKERS, THAT LOOKS LIKE FEW DIFFERENT THINGS. EACH NEW OUTBREAK IN HEALTH WORKERS ARE CONTENDING WITH COMES WITH SURVEILLANCE. THERE ARE COMMUNITY WORKERS WHO THEY ARE HAVING TO DEPLOY ON THE GROUND. INFECTION CONTROL TEAMS, TEAMMATE CAPACITY AND ON TOP OF THAT, THEY ARE DEALING WITH DISPLACEMENT AND AREAS IN WHICH THERE IS QUITE A BIT OF CONFLICT AND NOT NECESSARILY STRENGTH AND INFRASTRUCTURE. IT HAS BEEN QUITE A DIFFICULT SITUATION ON THE GROUND FOR HEALTH WORKERS AND COMMANDING ALL OF THAT IS THE AID CUTS THAT WE HAVE SEEN FROM A NUMBER OF COUNTRIES, OF COURSE USAID WAS ONE OF THE AID CUTS WE REPORTED ON BUT THAT HAS MADE IT A LOT MORE DIFFICULT TO SET UP SOME OF THESE HEALTH TREATMENT FACILITIES IN THESE ZONES BECAUSE IT TAKES SEVERAL WEEKS AND HUNDREDS OF WORKERS ACCORDING TO TO THE W.H.O. AT THESE FACILITIES. IT HAS BECOME A DIFFICULT SITUATION THROUGHOUT THE PAST FEW WEEKS THAT THEY HAVE BEEN DEALING WITH THIS. IF YOU JUST LOOK AT WHERE WE’RE AT NOW, IT IS IMPORTANT TO POINT OUT FROM A HUMANITARIAN PERSPECTIVE REALLY WHAT THIS LOOKS LIKE. WE’RE REPORTING ABOUT 254 HEALTH WORKERS HAVE BEEN REPORTED TO HAVE BEEN INFECTED AND AT LEAST 50 HAVE DIED. IT IS A COMPOUNDING ISSUE THEY HAVE DEALT WITH, NOT JUST THE VIRUS ITSELF BUT THE SETTING THAT THEY ARE IN AS WELL AS JUST FIGHT BACK A LOT OF THE MISTRUST THAT HAS GONE ON FOR A NUMBER OF YEARS NOT JUST IN REGARDS TO -- BUT ALSO TO THE VIRUS AND TO THE HEALTH SITUATION ON THE GROUND THERE MORE BROADLY. ABEER: YEAH, IT IS A REALLY SAD SITUATION. WHAT DOES IT THEN LOOK LIKE GOING FORWARD? JENNIFER: I THINK IT IS IMPORTANT TO PUT THIS INTO DIFFERENT PAIRINGS. THIS IS HUMANITARIAN ASPECT WHICH I WOULD LIKE TO GET TO BUT I FIRST WANT TO START WITH THE FUNDING ASPECT. BLOOMBERG REPORTED WHAT CONGO IS LOOKING AT THIS TERMS OF THEIR EXPECTATION FOR FUNDING OVER THE NEXT FEW MONTHS. THEY ARE EXPECTING AND HOPE TO RAISE ABOUT $1.3 BILLION IN ORDER TO FIGHT BACK THIS LATEST EBOLA VIRUS AND OUTBREAK. IN TERMS OF COMMITMENT WHAT WE HAVE SCENE FROM AN INTERNATIONAL PERSPECTIVE THERE HAS BEEN $2.9 BILLION THAT HAVE BEEN PLEDGED AND IT IS IMPORTANT TO POINT OUT PLEDGING IS DIFFERENT THAN BEING DEPLOYED ON THE GROUND. HAS THE LATEST BLOOMBERG REPORTING FROM INTERNATIONAL COMMITMENTS THAT WE HAVE SEEN THE FIGHT BACK ON EBOLA. ON THE HUMANITARIAN FRONT, WE HAVE BEEN REPORTING WORD FROM THE AFRICA C. T.Y., THEY HAVE SEEN SEVEN AFFECTED HEALTH ZONES HAVE GONE MORE THAN 42 DAYS WITHOUT A NEW CASE AND WE HAVE BEEN SEEING DEATHS BEGINNING TO FALL. WE REPORTED THAT DEATHS DECLINED 29% FROM SEPTEMBER FROM AUGUST. OUR REPORTING SUGGESTS REALLY WHAT IS IMPORTANT IS TO LOOK AT THE DEATH COUNT OPPOSED TO THE CASE COUNT. CASE COUNT CAN HAVE A LAGGING EFFECT ON WHAT THAT LOOKS LIKE IN TERM TURNOVERS PROGRESSION OF THE VIRUS. WE DID LAST MONTH REPORT DEATHS WERE BEGINNING TO FALL BUT THAT DOESN’T NECESSARILY MEAN THE THE SITUATION IS POSITIVE MOVING FORWARD. IT JUST LOOKS LIKE AND IT SEEMS LIKE EXPERTS THAT WE HAVE BEEN SPEAKING WITH THERE ARE POTENTIALLY SOME POSITIVE SIGNS BASED ON SOME OF THE DATA POINTS, BUT STILL THE SITUATION ON THE GROUND IS THERE ARE STILL COMMUNITIES THAT FEEL A BIT OF MISTRUST. THAT IS SOMETHING THAT THEY ARE FIGHTING BACK AGAINST IN ADDITION TO THE SITUATION WITH THE HEALTH WORKERS HAVING TO PLAY MULTIPLE ROLES ON THE GROUND, LESS AID LEADING TO LESS RESPONSE AND SO NOT NECESSARILY OUT OF THE WOODS BUT OF COURSE IT IS IMPORTANT TO POINT OUT WHERE WE ARE AT NOW IN REGARDS TO THIS OUTBREAK. ABEER: THANK YOU FOR THAT IMPORTANT UPDATE, JENNIFER ZABASAJJA WITH THE LATEST ON THE EBOLA OUTBREAK. FOR A LOOK AT OTHER STORIES WE’RE FOLLOWING. REJECTED A DECLARATION BY FOREIGN POWERS SEEKING TO EXCLUDE LANDLOCKED FLATIONGOVERNENING THE RED SEA. IT CHALLENGES THE DECLARATION THAT SAID THAT GOVERNANCE OF THE SEA IS THE EXCLUSIVE RESPONSIBILITY OF COASTAL STATES. IT IS REPORTED THAT SOUTH AFRICA MAY TAILOR TAX ON FUME USED TO COMPENSATE VEHICLE ACCIDENT VICTIMS. THE GOVERNMENT IS CONSIDERING A NEW FUNDING MODEL FOR THE DISTRESSED ROAD ACCIDENT FUND. IT ADDED TO THE PUMP PREVIOUS DIESEL AND GASOLINE. COMING UP, RAY DALIO SAYS THAT THE U.S. FACE A POTENTIAL DEBT CRISIS. MORE ON THAT INTERVIEW NEXT. THIS IS BLOOMBERG. ♪ ABEER: WELCOME BACK TO "HORIZONS MIDDLE EAST AND AFRICA." AS THE SELLOFF IN GOVERNMENT BONDS DRIVES UP BORROWING COST,ST, RAY DALIO SPOKE WITH LINDAN HAS MINUTE. >> THE NEXT THREE YEARS. WHAT WE HAVE IS THATCH ISSUE OF THAT SQUEEZING IT OUT. WHEN YOU TAKE A LOOK AT LITERALLY WHAT THAT MEANS AND WHEN THAT THE IMPACT OF THAT IS GOING TO BE ON ASSET PRICE AND INTEREST RATES MATTER. SO YOU HAVE A BOOM WHICH IS CONCENTRATED IN ONE AREA REALLY, THAT IS HEAVILY DEBT FINANCED. DEPENDENT USE TO BE. YOU CAN SEE AS THAT CYCLE HAPPENS, WHAT HAPPENS IS INCREASINGLY WHERE IT USED TO BE EQUITY, NOW YOU HAVE TO GO TO DEBT AND THAT PLAYS A BIGGER ROLE. HASLINDA: YOU HAVE WONDER IS IF 6% IS A PSYCHOLOGICAL LEVEL. HOW MIGHT THAT PLAY OUT IF WE GET TO SIX? MIGHT WE SEE 6.5? >> I THINK YOU DON’T LOOK AT THE INTEREST RATE. IT WILL HAVE AN EFFECT. WHAT I MEAN IS YOU LOOK AT WHAT IS THE AMOUNT OF SAVINGS. WHAT IS THE TOTAL AMOUNT OF CAPITAL? WHAT IS THE DEMAND FOR CAPITAL? WHEN YOU GET THAT INBALANCE, THAT SUPPLY-DEMAND INBALANCE, THEN YOU HAVE TO HAVE THE PRICE OF IT GO UP UNTIL YOU RATION THAT DEMAND. YOU HAVE TO ASK YOURSELF WHAT IS IT HAS THE GOING TO BE RATIONED IN THAT? THEN WE’RE DEALING WITH IT IS NOT GOING TO BE GOVERNMENT DEFICITS BECAUSE THEY ARE LAST EBB. IN OTHER WORDS IN FACT, IF YOU HAD A WORSE AMERICAS IT WOULD INCREASE. THEN YOU FIND OUT WHAT ARE THE SECTORS THAT ARE SQUEEZED OUT? IS IT HOUSING? HOUSING WOULD BE QUICK. SUCH A LARGE DIFFERENCE IN FINANCIAL CONDITIONS OF THE WEALTHY AND THE POOR, YOU’RE GOING TO SEE THAT HAPPENING MORE AT THE LOWER END OF THAT SPECTRUM. IS IT AUTO LOANS? THOSE KINDS OF LOANS THAT GET SQUEEZED OUT FIRST. SOMETHING LIKE THAT COMES LATER. THAT’S WHY YOU HAVE MORE OF A WEALTH CONFLICT BECAUSE THEN THE PEOPLE WHO HAVE LESS GET SQUEEZED THE MOST IN THAT PART OF CYCLE. HASLINDA: WHEN IT COMES TO DEBT, IT IS NOT JUST THE U.S., EUROPE, FRANCE, IN PARTICULAR. WE SAW THE MASSIVE SELLOFF. SOME ARE CONCERNED WE COULD SEE CONTAGION RISKS ON THAT BACK OF THAT. DO YOU SEE THAT HAPPENING? >> THE EUROPEAN SITUATION IS THE SAME. BECAUSE THERE IS A LACK OF ADEQUATE BORROWING, IMAGINE YOU’VE -- IN EUROPE AND LARGE PARTS OF THE UNITED STATES, YOU HAVE LIVED ON THE BORROWING. THEN WHEN YOU REACH YOUR BORROWING LIMIT AS FRANCE HAS DONE, THEN THERE IS A BOND BECAUSE YOU CANNOT DON’T ADD TO THAT. YOU HAVE TO START TO RUN A BUNCH OF DEFICITS BECAUSE YOU ALMOST GET TO THE. BRENDAN: YOU HAVE TO PAY BACK. IN OTHER WORDS IF YOU BORROW, YOU HAVE TO PAY BACK. WHEN THAT HAPPENS, YOU HAVE A SITUATION VERY SIMILAR TO THAT. NOW YOU SEE THE DESIRE FOR THAT. YOU SEE PEOPLE LEAVE. YOU SEE WHETHER THEY ARE FROM FRANCE OR PARTS OF THE UNITED STATES. THEY LEAVE. AND THEN A CREATES A PROBLEM. ABEER: THAT WAS RAY DALIO, FOUNDER OF BRIDGEWATER ASSOCIATES SPEAKING WITH HASLINDA AMIN EARLIER IN DAY. BEFORE WE END THE SHOW, LET’S TAKE A LOOK AT WHERE THE MARKETS ARE SITTING. YOU STILL SEEING A POSITIVE PICTURE ACROSS THE BOARD BUT THE U.S. FUTURES PICTURE IS TAPERING OFF A LITTLE BIT. SAPP AND NASDAQ FUTURES FLAT ALBEIT TO THE UPSIDE THIS MORNING. AND CONTINUING THE SLIGHT MOMENTUM THAT WE SAW YESTERDAY, NASDAQ 100 FUTURES CONTINUING THE MOMENTUM OF THE RECORD HIGHS THAT WE SAW. GLOBAL STOCKS ARE EDGING TOWARD RECORD HIGHS AS INVESTORS ARE SHRUGGING OFF CONCERNS ABOUT ELEVATED OIL PRICES AND BOND YIELDS CONTINUE NEAR MULTIDECADE HIGHS FOR THE 10-YEAR NOTES AND 30-YEAR NOTES. BANK CRUDE PRICE, .6% HIGHER THIS MORNING. STILL ROAMING VERY CLOSE TO $100 ON THE BARREL. TODAY, THAT IS IT FOR "HORIZONS MIDDLE EAST AND AFRICA." STAY WITH US FOR "DAYBREAK: EUROPE." THIS IS BLOOMBERG. ♪