France Riot Mayhem, Trump-Zelenskyy Feud, Europe’s Plastic Dumpsite

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0:11 Good morning.

0:12 It's Monday the 19th of October. I'm Caroline Hepke in London. Coming up today, Emmanuel Macron calls for calm in France after nationwide protests turn violent. Vladimir Zelensky tells Bloomberg that Trump is trying to push Ukraine into yielding to Russia. Plus, trashed expectations. Turkey has become Europe's plastics dump site, but giving that up will be harder than you might think.

0:37 Let's start with a roundup of our top stories. French President Emmanuel Macron says that France feels anger and shame after widespread violence over the weekend. Officials estimate that more than half a million people joined Saturday's protests with over 2,000 arrests. In a televised address, Macron called for order to be restored and those responsible to face punishment.

1:04 Whenever offenses are committed, they must lead to appropriate legal proceedings. Those who have destroyed must pay. Those who have looted must reimburse. Those who have sought to bring down the republic will have to answer for it.

1:19 President Emmanuel Macron speaking there of RA Translator as French bond futures are underperforming their German peers following the unrest. Protesters are voicing anger over schools, public services and the cost of living with strained government finances limiting the response. And France is not alone. Violence and demonstrations also hit Italy, Belgium and Portugal amid similar pressures. Vladimir Zelensky has told Bloomberg that Donald Trump is trying to pressure Ukraine into surrendering to Russia. In an exclusive interview, the Ukrainian president said, I believe steps have been taken to convince Ukraine to capitulate.

1:59 He continued, I'm not saying that this is the goal our partners are pursuing, adding, but that is how it looks. Bloomberg's Jeff Mason says it's the latest sign of the rift between these two leaders.

2:13 The broad criticism, of course, is that this is a negative sign to Ukraine and another, what some believe, a sign of cozying up to Putin at a time when broadly the United States views this war as one that Russia, rather, was the aggressor on against Ukraine. We've talked about multiple times before the up and down relationship that President Trump has had with President Zelensky of Ukraine, and this is another hit to that relationship as well.

2:40 That was Bloomberg's Jeff Mason. Zelensky also accused Washington of slowing Starlink internet speeds in Ukraine and delaying deliveries of Patriot interceptors. Over the weekend, the White House halted the implementation of massive tariffs linked to Russian energy exports, which President Trump had signed into law only a month ago.

3:02 Vladimir Putin is reported to have proposed a three-way summit with Donald Trump and China's Xi Jinping in order to discuss ending the war in Ukraine. The Wall Street Journal says that Putin raised the idea during a phone call with Trump on the 9th of October. Here is Bloomberg's John Herskovich.

3:21 The idea would be that Russia wants to take care of the better relations it has with the U.S. now, get a settlement that's on its terms, and leave Ukraine out of the process.

3:33 It would be very.

3:34 Much to the detriment of Zelenskyy, to the Ukrainian people, and very much to Putin's favor. And to have this with Xi Jinping, it's kind of like the big powers play that we saw during World War II for the carving up of Europe after the war. So it's quite a development, and the fact that the White House is considering this is something that will be of great concern to Ukraine, Europe, and a lot of people in Congress.

3:59 That was Bloomberg's John Herskovich. The Kremlin confirmed the discussions about a possible meeting to the journal. Meanwhile, a senior U.S. official said that Trump had not agreed to attend but could be open to the proposal. Rising Ukraine tensions and unrest in France, though, are adding to the pressure on the euro. The currency is down as much as half of 8% against the dollar in early Monday trading. The euro has underperformed every other G10 peer over the past month and recently hit a 17-month low. The pressure comes as ECB officials lean towards another rate hike in December with inflation at a three-year high of 3.8%. Nasdaq futures are showing early signs of recovery, though, from last week's rout.

4:44 Contracts for the tech-heavy index climbed by 1.3% after a heavy sell-off in semiconductor stocks last week. More and more professional investors, though, are now publicly saying that the stock market is flirting with bubble conditions. Bloomberg's James Walcock has more.

5:02 Are we being rational?

5:04 That's the question Oaktree Capital's Howard Marks is posing. He called the top of the dot-com bubble. Now, many of those on Wall Street think we're in the midst of an AI bubble. They can point to metrics, sky-high levels of debt, expectations of record earnings, and circular investments, to name just a few. But for Howard Marks, it's also about vibes. He told Bloomberg that investors are clearly aware of the risks of the AI trade, even as they rush into it. For Marx, that means the bubble is restrained for now. In London, James Wilcock, Bloomberg Radio.

5:39 China's economy grew faster than expected in the third quarter, keeping Beijing's annual growth target within reach. GDP expanded by 4.5% from a year earlier, slightly ahead of the median forecast. Erika Tay is director of macro research at Maybank and says that the latest numbers are a relief.

5:58 The growth numbers did not come out as weak as we feared, but that also means that it reduces the urgency for policymakers to roll out any kind of massive economic stimulus in the next few months in order to meet the growth target.

6:20 Maybank's Erica Tay speaking earlier this morning. But weak domestic demand has left China increasingly dependent on exports for growth. Its trade surplus is on pace to top last year's record $ 1. 2 trillion. That is fueling tensions with Europe as the EU prepares tough powers that could restrict China's access to its single markets. Now to the UK. Britain's youth jobs problem is putting fresh pressure on ministers to show that they can get more young people into work. The government's now turning to employers to help open up clearer routes into skilled careers. Bloomberg's Ewan Potts reports now.

7:01 Almost a million young people are not in employment, education or training in the UK. As part of efforts to tackle the growing problem, the government says under-25s will be able to tap into more than 22,000 new apprenticeships in fields from law to artificial intelligence. Building firms will also offer 40,000 placements as they work towards a previously announced sectoral target of 100,000 placements. In London, I'm Ewan Potts, Bloomberg Radio.

7:27 And those are our top stories for you this morning. Looking at the markets, a rebound for the KOSPI, which had seen a big decline, but actually is up now nine-tenths of 1%. So, something of a recovery in this tech sell-off that we've seen. If you also look at the stock futures for the US, which are up by 1.3% for Nasdaq futures, eight-tenths half for the S & P 500.

7:50 In terms of European stock futures, though, we're down by three-tenths of 1%. And this is one of the busiest weeks in earnings season. 69 of the stock 600 companies are reporting this week. And for the U.S., it's equally huge. Big cap tech names, Meta, Tesla. You've also got the defense names GERTX plus Netflix all reporting this week. Looking at FX, though, the dollar at the moment is weaker.

8:13 The euro, as we've mentioned, is weakening also significantly. trading at 1.1231. Oil prices check there, $ 107. 91 for Brent crude futures. Yes, we are just below $ 108 a barrel there, so down by 1.8% this morning.

8:27 And just in.

8:27 Terms of Treasury yields in the bond market, so 10-year yields this morning are at 5.06% down a basis point. Those are the markets. In a moment, we're going to bring you reaction from Paris after this weekend's protest that turned violence in France, where it seems checkbook politics is just no longer feasible. Plus, the world is choking on plastic waste. Can the next major climate change summit address that?

8:55 Another story, though, that's caught my eye this morning. Is this the next event to watch in London? New York has a growing scene for live audio books. Yes, these are live book readings. It goes alongside reading parties from the likes of Reading Rhythms or Reading Retreats, if you prefer a long weekend. They're being hosted by organizations like Page Break. But this new one just got my attention.

9:20 It's called Lit Out Loud, founded by Kennedy Avery and Temi Awilabu. And they are aiming to create an experience like an audio book, but instead of listening to it on your headphones, you're listening together. I wonder whether we're going to catch any of these in London anytime soon. It's a very nice story if you're into all things literary.

9:40 Emily Flitter has that story. I'm going to put a link to it in our podcast show notes. Now, a weekend of protests in France turned to looting and violence. President Macron made an address to the nation last night, blaming the far left and promising action against the perpetrators, but also action on things like fuel prices. Oliver Crook is in Paris and joins us now. Oliver, our chief Europe correspondent, thank you so much. What is the feeling in France today after what has been the worst street violence in years? I mean, watching the pictures, it was really extraordinary, Ollie.

10:14 Yeah, some really unbelievable pictures that we've seen across France. And I think unlike the Gilets Jaunes protests, which is very much sort of evokes, it also evokes, you know, the sort of the burning of Notre Dame when we see the images of the mairie in Limoges that went up in flames over the weekend after a fire was started there and burnt it, you know, not quite to the ground because it was made of stone, but effectively completely.

10:37 I mean, this is the situation that we lived over the weekend here. In France, starting two weeks ago with these student protests. And again, much like the Gilets Jaunes protests, this begins on a specific issue. Back then, it was an increase on taxes for fuel. This time it's been on education and public services. And it's a situation that spirals completely out of control. And when you get these sorts of protests of this kind of volume and this kind of destruction, it's very hard to make a sort of conclusive political narrative out of it. As a consequence, what you have is the full political spectrum in France that is gearing up for an election just six months away sees exactly whatever their party wants. would like to

11:15 see in those protests. So today, in the streets of Paris, you see the marks of the protests all over the place. There's smashed glass. There are storefronts that have been broken into, that have been completely emptied. But it is much more calm today. And the public services are out trying to clean up the streets. This is, of course, a playbook.

11:30 France is a nation that is very acclimatized, having a great deal of protests and at times riots. The public services come out to clean things up in order to make things look a lot better. But at the end of the day today, you can still see it all across Paris. The scars of the protests that we had this weekend were more than 2,000 people across France were arrested, about 500,000 people showing up, according to the government. According to organizers, that figure can be closer to 800,000.

11:52 Yeah, absolutely. You're out on the streets of Paris. I'm sure that you're seeing that debris all around you. And politicians on all sides are also weighing in. What does it mean for the presidential election in April? And I say politicians, it's not just kind of the national politicians. There's also a lot of the regional politicians in France talking about this, too.

12:14 Yeah, absolutely.

12:15 I mean, listen, when you think to the sort of average person in France and the business and the shopkeeper and that sort of thing, these are the people that are obviously hurt very dramatically by all this. And this is going to be some of the work of the prime minister today. He'll be meeting with a number of people.

12:27 They're going to be thinking about ways to compensate some of the businesses. But of course, the main problem here for this government is. And any government that will take over in France, this is a headline that put it very beautifully a couple of weeks ago, even before these protests, is that you've got a government that is caught between the bond market and the barricades. There is no longer the fiscal lever to pull to try to assuage the public unrest, the public anger with Emmanuel Macron. That, of course, was the playbook for the Gilets Jaunes. He was able to throw money at the situation. That is how Effectively, we got ourselves into the debt situation that France is now facing. And on the other hand, a government that

13:02 does not have a majority in parliament in terms of Macron's party, the biggest party in France right now is the Rassemblement National. So the sort of fiscal lever is taken away from France. The political lever is gone. And of course, Emmanuel Macron came out and gave a speech last night. He was fairly brief. There was not really any rich in policy action and reiterated the fact that he's actually leaving France this week for a three-day or four-day trip to the Gulf. So again, the spotlight is on this election. Every single one in the political spectrum sort of made allusion to it. That is six months away.

13:31 Le Pen coming out with a very strong law and order message. Mélenchon on the far left saying that effectively this is the government and the police that took too heavy a hand. everybody pointing figures. The real question is, is this going to be it for the violence? Or next Saturday, as we saw with the Gilets Jaunes, does this become a sort of rolling weekly event?

13:48 Yeah, absolutely. And this will all be assessed by Prime Minister Sébastien Le Corneau and a ministerial meeting that is meant to be happening on Monday, according to a number of reports on this, this inter-ministerial crisis meeting. So, what might we expect further now from this?

14:06 But again, this is what we sort of heard from Emmanuel Macron. It seems that he's sort of kicking this down to the prime minister and to the local authorities. So he did say that potentially more power will be given to local authorities in order to be able to prevent or ban protests if necessary, if things are deemed, if that's necessary. He's talking about basically having the government opening up a direct dialogue. with the students and the student protest. It's hard to see that really sort of cutting through massively. You'll remember, again, with the Gilets Jaunes, that all began as a sort of fuel tax hike that was done away with, and that did very little to sort of bring down the appetite for protest. So again,

14:43 we'll be watching very closely some of these ministerial meetings. But again, hearing from Emmanuel and Michael, there is no massive policy proposal. There's nothing that sort of comes out and says, listen, we're going to try to circuit break the situation. So I think there is a bit of a sort of a waiting game here. Potentially, he can come out with some good news from the Middle East on some fossil fuels and some fuel prices, and you can say something about the cost of living. But at this point, it's hard to see that as breaking through.

15:08 Yeah, absolutely. We will continue to follow this story throughout the morning as we also are expecting to see what happens to the euro, which has fallen partly as a result of this French turmoil. But then also what it means for French OATs, for the yield spread between France and Germany, what investors are going to make of all of this. violence and rioting over the weekend and the protests. Olly, thank you for being with us in Paris. That is Bloomberg's chief Europe correspondent, Oliver Crook. Thank you. Stay with us.

15:42 More from Bloomberg Daybreak Europe coming up after this. Now, last year, the UK and the EU sent 650,000 metric tonnes of plastic waste to Turkey. As host of November's COP31, the UN Climate Change Summit, Turkey wants to reduce waste, but the trade is hard to walk away from. Alyssa MacDonald is Senior Editor for Climate and joins us now to discuss. Alyssa, good to speak to you. The world is struggling with plastic waste. How big is this problem?

16:16 Every year, the world produces more than 400 million metric tons of new plastic, and that volume of waste is growing really fast. Much of that plastic is discarded after one use, which is part of the real problem here. So countries like Turkey, you know, they import, as you mentioned, like large volumes of waste from other countries to help with recycling. But questions have been raised about the integrity of some elements of that system. So, you know, plastics, according to some experts, are leaking out of recycling facilities and they're found to be polluting waterways, they're getting into agriculture and ultimately into the human food chain.

16:54 Yeah, gosh. And so, last year, there were negotiations, but they failed to deal with the issue because some countries basically wanted to focus on collection and recycling of plastic rather than limiting the actual production of plastics. There was some disagreement about how to tackle all of this. What do you think that we will see at this COP meeting?

17:17 Yeah, that's right.

17:17 There's always this two-pronged attack on this problem, reducing volume of plastic being produced in the first place and then recycling what we do produce. This year at COP31, Turkey is seeking a commitment to have global growth in waste overall. It has quite a successful domestic zero waste policy, which is focused on both reducing waste and upping recycling. And so I think Turkey is quite likely to lean on that as a basis for the discussions this year. Okay.

17:50 What's the view of the industry, by that I mean the manufacturers, given that actually most plastic is made from fossil fuels?

17:58 Yeah, and plastics are a really key source of oil demand growth for the fossil fuel industry. So reducing use isn't really in their immediate interests anymore. When it comes to recycling, ExxonMobil is one company that has explicitly criticised the EU for not doing enough to support new technologies.

18:17 The bloc has explicitly expressed a preference for traditional mechanical recycling of the sort that's going on in Turkey to quite a great extent. Exxon is interested in newer chemical technologies and it has said previously that the bloc is not doing enough to support those developing technologies.

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