National Guard LA Clashes, US-China London Talks, Banks Desk Shortage
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This is the Bloomberg Daily Q at Podcast, available every morning on Apple, Spotify or wherever you listen. It's Monday the 9th of June here in London. I'm Caroline Hepker. And I'm Stephen Carroll. Coming up today, Trump sends the National Guard to Los Angeles after a third day of anti-deportation protests.

and clashes as California's governor calls the move unlawful. The UK capital hosts trade talks between the US and China today in a bid to diffuse tariff and rare earth tensions. Plus, when the music stops, can you find a seat? Why return to

Office mandates are forcing London's banks to lease more office space. Let's start with a roundup of our top stories. Anti-deportation protests are escalating in Los Angeles after US President Donald Trump deployed the National Guard to spark objections from California Governor Gavin Newsom.

The arrival of troops over the weekend appears to have inflamed an already volatile situation as residents protest against sweeping deportation policies. Writing on social media, Gavin Newsom says he's formally requested the White House reverses what he calls unlawful deployment.

Speaking to MSNBC in the last few hours, he went further, criticizing the violence, but also saying this. The peaceful protesters, we want to keep them safe. We want them to exercise their fundamental rights. We want to keep those that are enforcing the laws in a respectful and responsible way also safe. But Donald Trump needs to pull back.

He needs to stand down. Donald Trump is inflaming these conditions. This is Donald Trump's problem right now, and if he can't solve it, we will. Speaking to MSNBC, Governor Newsom said that California will file a lawsuit against Trump's federalization of the National Guard. Federal law strictly limits the deployment of federal troops within U.S. borders, and the legal basis for the decision is highly contentious.

Well, the California governor's comments come after President Trump described the demonstration as, quote, migrant riots and said that federal agencies were directed to take all such action necessary to restore order and to continue deportation operations. Here's what he said as he prepared to board Air Force One. Well, we're going to have troops everywhere. We're not going to let this happen to our country. We're not going to let our country be torn apart like it was under Biden.

And the US president has been posting on social media in the last hour. He wrote, looking really bad in LA, bring in the troops. Trump's comments come after two days of protests sparked by widespread US immigration raids across the region. The stepped up enforcement is part of President Trump's vow to carry out the largest deportation campaign in US history.

The United States and China will restart trade negotiations today in a bid to further address the export of rare earth minerals and restrictions on advanced technology. The talks in London come after a phone call between Donald Trump and Xi Jinping last week. Kevin Hassett, director of the White House National Economic Council, told CBS News' Margaret Brennan rare earth minerals were a key sticking point.

Those exports of critical minerals have been getting released at a rate that is higher than it was, but not as high as we believe we agreed to in Geneva. And President Trump, being a dealmaker, talked with President Xi and he said, let's take our senior guys, the people who are the same level as you, let's have them meet somewhere and let's get these things cleared up and then we'll clear up what you don't like that we agreed to release on our side.

White House Economic Council Chair Kevin Hassett there. It comes as the UK too faces a massive hurdle in its trade negotiations with Washington, with the US saying the deal must be finalised within five weeks. Former British trade negotiator Crawford Faulkner has told Bloomberg that such a timeline is too ambitious.

Well, today's talks between the United States and China come as the latest data shows Chinese exports to the U.S. saw the worst drop in more than five years. Official figures for May showed that shipments to America fell by 34%.

But the country is still on course for a record trade surplus this year. Overall, China's exports rose 4.8% from last year, less than the 6% expected by economists. The growth was driven by an 11% rise in exports to countries other than the United States.

The British Prime Minister Keir Starmer is planning to use NVIDIA to train more workers to use artificial intelligence. Starmer is set to appear alongside the tech giant's CEO, Jensen Huang, to announce the £200 million scheme later today. Bloomberg's James Wilcock reports. On Saturday night, Google's chairman Eric Schmidt and DeepMind CEO Demis Hassabis could be found hobnobbing with Keir Starmer. Now today, he's sharing a platform with NVIDIA's CEO, Jensen Huang.

You don't need AI to see that Downing Street is trying to showcase its positive vision for the tech sector and growth. Yet the question here is which image will the public remember? Tech-led growth or the public sector budget cuts due to be announced on Wednesday? In London, James Woolcock, Bloomberg Radio.

Well, let's turn our attention to Europe because the European Central Bank's Isabel Schnabel says that now is the time to boost the role of the euro. Speaking also over the weekend, the Central Bank's executive board member said that the currency is in a window of opportunity as investors look to Europe for diversification. Her comments chime with other policymakers, including President Christine Lagarde, as officials look to use President Trump's global trade policies to their own advantage.

In sports news, Carlos Alcaraz has retained his French Open title, beating world number one Yannick Sinner in a five-set thriller. Spaniard came back from two sets down and saved three championship points during the second longest Grand Slam final in the Open era. After the match, he thanked the Parisian crowd for their support. You were really, really important. You are in my heart and you will always be in my heart. So thank you, thank you very much, Paris.

Carlos Alcaraz speaking there. The women's final saw 21-year-old Coco Goff emerge victorious against number one seed Irina Sabalenka in three sets.

And those are our top stories. Yes, gosh, did you see her? She gave Spike Lee a hug on the sidelines of the Paris tennis event. Yeah, that was really extraordinary, wasn't it? Let's think about the markets, though, this morning. So the dollar at the moment is drifting lower. Again, we've got these U.S.-China trade talks taking place here in London. In terms of stock futures, we're down, shedding two-tenths of 1% for the S&P 500. Evening futures, U.S. stocks at 50 futures up.

also lower. In terms of Japan confirming a GDP contraction, so this kind of cautious BOJ stance perhaps will remain in place. The dollar is down two-tenths of 1%. We've seen the cost be up by 1.5% this morning. So those are the big movers. In terms of the 10-year US Treasury yield, we're just down about a basis point this morning at 4.49. There's the markets. In a moment, more on the latest from LA, plus why banks in London are seeing a shortage of

of desks. But another story that caught our eye this morning on the issue of monogramming, which I've never really thought that much about. But Chris Rovzar has a lot of opinions about this, I learned. Yeah, he certainly does. Is it naff? Is it chic? He spoke to the former Vanity Fair editor, Graydon Carter, who apparently in his book called it

which seems to have sent Chris Rovner on an absolute kind of tailspin because he does love it. He says, I'm a proud monogrammer. Monogramming is a lifestyle choice. He does do loads of research into it. Caroline, we've been friends for a while, but it's time for me to teach you a very Irish expression, which is peak notions, which is how I think about monogramming. It's just not something that exists anymore.

in my world and I'm fascinated because honestly it's a very interesting reflection and Chris kind of argues both sides of it or goes through the reasons for and against and there's lots of you know obviously resale value if it's a high value luxury good but also the sentimental value of having something monogrammed it's

It doesn't inspire me. Well, apparently Louis Vuitton has launched this with great fanfare, this monogramming programme. And that does seem to be maybe also trying to stop fakes being made. So, yes, I do. Well, I think it is a...

I think maybe secretly, maybe I'm a monogrammer. You're a monogrammer. Well, possibly. Right, OK. Enough secrets for a Monday morning. Fair enough. Let's bring you more details on our top story on the programme today. The protests and clashes in Los Angeles over sweeping immigration raids and the deportation policies of the Trump administration. California's Governor Gavin Newsom has formally requested the withdrawal of National Guard troops. Bloomberg's John Herskovitz is with us for more this morning. John, congratulations.

Good to have you with us. What is the latest that we're hearing? What is happening currently in Los Angeles? We've entered the third day of these protests. And the first of the at least 2,000 National Guard began arriving in Los Angeles on Sunday.

So we have this on one front. Then we have this confrontation, this war of words between Governor Newsom and Donald Trump. As the auto indicated, Governor Newsom is requesting that these troops be withdrawn, seeing this as a way of inflaming the situation. And Trump

saying that the things are really bad here and that these troops are needed. Now, the thing is, like, with Los Angeles County, one thing to keep in mind is the county itself is one of the most populous places in the U.S. I think it has, like, nearly 10 million people

And the White House has a goal of doing about 3,000 daily arrests for immigration violations. So it just kind of makes L.A. County, with its large population, which has a lot of people from a lot of places, one of the forefronts of this immigration battle, which is the top priority.

priority or one of the top priorities for the Trump administration. So we have this playing out on the streets. We have this going between the two leaders of the U.S. and the most powerful state in the U.S., California. And we have a lot of people wondering in L.A. what's going to happen next. But you should perhaps rewind and tell us what we know about how all of this was sparked.

Yeah, this came after we had some raids in garment districts, in working areas, immigration raids on Friday, which led to people taking on the...

conducting the raids. And it escalated from there, going to an ICE detention center and to other parts of the city, which prompted the call-up of the troops from the Trump administration. So it's really going after places where people live and work, trying to round up people at the jobs and

It's all part of this larger policy of the Trump administration to do as many detentions as is possible to reach their goal of getting what they've said would be millions of people out of the country. Okay, so that's the latest on what's happening in Los Angeles. Another U.S. story that you've been watching for us, though, this morning, John, are the trade talks that are due to take place with China happening in London today. What should we expect?

I think we're going to see a lot of attention given to the details of this. We had the talks last week between President Xi Jinping and President Trump, and this is something that Trump has been pushing for, something that Xi Jinping really is not in his wheelhouse. He doesn't like these direct attacks.

discussions, deal-making, and China prefers to have it go through a process. So we're going to see the process take place this week in London. We have some high-profile members from the U.S., Scott Besson, the Treasury Secretary, Scott Besson, the Commerce Secretary will be there as well, and some high-profile people from China. So we're going to see...

These talks get into some of the details of what may be going on between these two economic powerhouses. There's some things that the U.S. wants to bring up, like speeding up the exports of rare earth materials to the U.S.,

These materials have been used in trade fights before. China is the largest miner of these materials, which are key to industries from electric vehicles to green technologies. So the U.S. wants to see more of these coming more quickly, and this will be one of the areas of focus. And what will actually happen is

It still remains to be decided. But from China's perspective, they're looking at more details, more of a process taking place. And for the U.S., they're looking to get as many concessions as possible from China and also focusing on rare earths. Okay. John, thank you so much for being with us this morning. That is Bloomberg's John Herskovich then on the latest on what's happening in L.A., but also the trade discussions between the U.S. and China.

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If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more.

Now, five years after the COVID pandemic fuelled an unprecedented boom in remote work, bank executives are insisting that workers should return to the office. But in a growing number of cases, particularly here in London, they don't have enough desks for them. Our real estate reporter Natasha Vois joins us now for more. Natasha, good morning. How widespread is the problem of desk shortages?

Morning. So the answer is that it really depends on the bank, because I mean, kind of go back to way before the pandemic, a lot of banks started reducing their floor space just after the financial crisis. So some banks cut back quite a lot. And then now they've sort of post pandemic, they've continued cutting back.

And what that means is that when banks are mandating their staff back to the office, which is increasingly the case, they're then discovering that there aren't actually enough desks for them. So, for example, HSBC has a shortage of thousands, potentially over 7,000 desks at its new office in the city. And this has led them to potentially consider moving back to Canary Wharf.

Wow, that's extraordinary. What are banks then doing about it? As you say, do you think it'll be a wider spread revival of Canary Wharf, which has actually seen some quite high profile departures quite recently? Yeah. So, I mean, real estate isn't exactly a fast moving market and leases only really come up for expiring renegotiation every few years. So, it kind of depends on when those options are coming up. So, for a lot of the banks,

post-COVID, now is the time when they're able to actually reconsider their floor space for the first time. So in some cases, like I said, banks who need more space are actually looking back to Canary Wharf because if you think about how banks occupy that space, they need really big floor plates. So they need a lot of staff on the same floor. They need lots and lots of equipment, lots of kind of

things to facilitate trading. So, in those cases, Canary Wharf is actually a pretty good bet. And rents there are lower, which makes it more economical than staying in the city. So, as I said, HSBC is in talks to potentially move back to Canary Wharf. JP Morgan is also looking. And Deutsche Bank is potentially considering taking 250,000 square foot of office space in London. And one of the options they're considering is the Wharf.

And briefly, Natasha, how does the trend in London compare to other European financial hubs? Yeah, so it seems to be a little bit different in London compared to other European cities. So in London, a lot of the banks have been mandating their staff back to the office. And we've seen that particularly with the American banks. So, I mean, Jamie Dimon at JP Morgan has been particularly vocal on this. But other banks have been following suit, you know, sort of gradually increasing the number of days their staff need to be back in the office.

On the continent, a lot of the European banks seem to have let their staff stay at home for much longer. So ING and Commerzbank have both said that they're aiming for a 50-50 split between working from home and the office. And Commerzbank is actually moving to a smaller office footprint by 2028. ♪

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bloomberg Business App and Bloomberg.com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepke. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak Europe.

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