Good morning.

Good morning.

It's Tuesday, the fourth of July in London. This is the Bloomberg Daybreak you at podcast. I'm Caroline Hepkintt and.

It's Tuesday, the fourth of July in London. This is the Bloomberg Daybreak you at podcast. I'm Caroline Hepkintt and.

I'm Stephen Carroll. Coming up today, Morgan Stanley tells Bill Dudley he's wrong about the bond market as the yield curve heads back to the nineteen eighties.

I'm Stephen Carroll. Coming up today, Morgan Stanley tells Bill Dudley he's wrong about the bond market as the yield curve heads back to the nineteen eighties.

The Bank of England's new policy maker says that raids may never come back down.

The Bank of England's new policy maker says that raids may never come back down.

And we hear from the boss of Watchfinder about the growing number of high end fake time pieces that are so convincing even the experts are struggling to tell them apart from the real thing. Let's start though, with air und up of our top stories.

And we hear from the boss of Watchfinder about the growing number of high end fake time pieces that are so convincing even the experts are struggling to tell them apart from the real thing. Let's start though, with air und up of our top stories.

Morgan Stanley Stratchus say Bill Dudley has got it wrong on the bond market. The former head of the Frederal Reserve Bank of New York says that he expects ten year US Treasury yields to rise to four and a half percent, with high boring costs wreaking havoc on the economy. But the Wall Street Giants macro strategy team disagree, calling the bond route long in the tooth, arguing that yields will fall back to lower levels. The out comes as a key segment of the US Treasury yield curve approached its most inverted level in decades. Ira Jersey, chief US Interest Rates TRATSUS for Bloomberg Intelligence, says it's all about a growing number of bets on further rate tightening.

Morgan Stanley Stratchus say Bill Dudley has got it wrong on the bond market. The former head of the Frederal Reserve Bank of New York says that he expects ten year US Treasury yields to rise to four and a half percent, with high boring costs wreaking havoc on the economy. But the Wall Street Giants macro strategy team disagree, calling the bond route long in the tooth, arguing that yields will fall back to lower levels. The out comes as a key segment of the US Treasury yield curve approached its most inverted level in decades. Ira Jersey, chief US Interest Rates TRATSUS for Bloomberg Intelligence, says it's all about a growing number of bets on further rate tightening.

So it's going to stay inverted more than likely, because remember that long end of the yield curve is taking into account what the market expectations are for the long term. So you know, will inflation come down in twenty twenty five, twenty twenty six. The Federal Reserve will probably cut interest rates once that happens, and so the yield curve will likely stay inverted. Now, I think the question is will it invert a little bit more before it starts to uninvert.

So it's going to stay inverted more than likely, because remember that long end of the yield curve is taking into account what the market expectations are for the long term. So you know, will inflation come down in twenty twenty five, twenty twenty six. The Federal Reserve will probably cut interest rates once that happens, and so the yield curve will likely stay inverted. Now, I think the question is will it invert a little bit more before it starts to uninvert.

Bloomberg Zara Jersey says that he doesn't expect the curve to uninvert until sometime next year. A US yield curve inversion has preceded every recession since the nineteen sixties.

Bloomberg Zara Jersey says that he doesn't expect the curve to uninvert until sometime next year. A US yield curve inversion has preceded every recession since the nineteen sixties.

Two of All Street's largest lenders are questioning the fed's stressed test projections for their future income. Bank of America and City Group say they're now in discussions with the Central Bank over the calculations. Bloomberg's finance porter Catherine Doherty breaks down the disagreement.

Two of All Street's largest lenders are questioning the fed's stressed test projections for their future income. Bank of America and City Group say they're now in discussions with the Central Bank over the calculations. Bloomberg's finance porter Catherine Doherty breaks down the disagreement.

Each of them.

Each of them.

Differ in how they're saying their projections are opposed or in opposition to the FED. So Bank of America said in its statement that it's talking to the FED to understand differences in its comprehensive income over this nine quarter stress test period, and separately, City said it was looking in to understand differences in its non interest income. So in Baba's case, the fed's projection was a bit rosier. For some of the City's forecasts, it was the opposite, so it was more of a negative figure.

Differ in how they're saying their projections are opposed or in opposition to the FED. So Bank of America said in its statement that it's talking to the FED to understand differences in its comprehensive income over this nine quarter stress test period, and separately, City said it was looking in to understand differences in its non interest income. So in Baba's case, the fed's projection was a bit rosier. For some of the City's forecasts, it was the opposite, so it was more of a negative figure.

Catherine Doherty says the stakes for both banks are high, as the fed's annual stress test results helped to determine investor payouts.

Catherine Doherty says the stakes for both banks are high, as the fed's annual stress test results helped to determine investor payouts.

Now, the US is preparing to curtail Chinese company's access to cloud computing services from the likes of Amazon and Microsoft. That according to The Wall Street Journal, the report comes as China imposed restrictions on the export of two metals crucial to the production of semiconductor mind chips. From next month, Gallium and germanium, along with their chemical compounds, will be subject to Chinese National Security export controls. Matti Jao, head of Asia Pacific Basic Metals at the Bank of America, says that restrictions will have an impact.

Now, the US is preparing to curtail Chinese company's access to cloud computing services from the likes of Amazon and Microsoft. That according to The Wall Street Journal, the report comes as China imposed restrictions on the export of two metals crucial to the production of semiconductor mind chips. From next month, Gallium and germanium, along with their chemical compounds, will be subject to Chinese National Security export controls. Matti Jao, head of Asia Pacific Basic Metals at the Bank of America, says that restrictions will have an impact.

It will definitely push up the costs in a big magnitude and Gallian and Germanian are very important mettals for like for example, solar panel and semiconductors as well, So of course if this completely ban, it takes longer time for them to source the materials.

It will definitely push up the costs in a big magnitude and Gallian and Germanian are very important mettals for like for example, solar panel and semiconductors as well, So of course if this completely ban, it takes longer time for them to source the materials.

Matti Jiao spoke to Bloomberg as China and the US increasingly go head to head in a battle for technological dominance in terms of quantum computing, AI and chip manufacturing.

Matti Jiao spoke to Bloomberg as China and the US increasingly go head to head in a battle for technological dominance in terms of quantum computing, AI and chip manufacturing.

Here in the UK, the Bank of England's newest policymaker, Meghan Green, is warning that interest rates may settle at higher levels permanently. Writing in the Financial Times, she says AI and GREEN investments may boost economic growth and rates. Green also warns against complacency in the fight against inflation, suggesting she could back further interest rate rises when she joins the Monetary Policy Committee in July.

Here in the UK, the Bank of England's newest policymaker, Meghan Green, is warning that interest rates may settle at higher levels permanently. Writing in the Financial Times, she says AI and GREEN investments may boost economic growth and rates. Green also warns against complacency in the fight against inflation, suggesting she could back further interest rate rises when she joins the Monetary Policy Committee in July.

Those comments come as major banks have been summoned to meet the UK's financial watchdog over at low savings rates. The Financial conduct althought. She says that it expects chief executives from HSBC, nat West, Lloyd's and Barclay's to answer questions about profiteering claims. Harriet Baldwin chairs the Commons Treasury Committee.

Those comments come as major banks have been summoned to meet the UK's financial watchdog over at low savings rates. The Financial conduct althought. She says that it expects chief executives from HSBC, nat West, Lloyd's and Barclay's to answer questions about profiteering claims. Harriet Baldwin chairs the Commons Treasury Committee.

Well, we think that they shouldn't be recouping their profitability on the back of their most loyal savers. So where there's a loyalty penalty, you know the regulator will be very concerned and we think that will be hard for the banks to prove that they're treating their customers fairly.

Well, we think that they shouldn't be recouping their profitability on the back of their most loyal savers. So where there's a loyalty penalty, you know the regulator will be very concerned and we think that will be hard for the banks to prove that they're treating their customers fairly.

Conservative MP Harriet Baldwin's comments come as lenders face accusations of being quick to hike loan raids but slower to pass on higher boring costs to savers.

Conservative MP Harriet Baldwin's comments come as lenders face accusations of being quick to hike loan raids but slower to pass on higher boring costs to savers.

Meanwhile, the governments and talks with insurers about a pledge to invest billions of pounds in startups and infrastructure projects. Bloomberg understands insurers could agree to invest about five percent of the defined contribution parts they manage. The Chancellor Jeremy hunts you to give details of the plant and his Mansion House speech next week. The level of commitment over time could be in the tens of billions of pounds. Short of the fifty billion pound pool proposed by the Lord Mayor of London, Nicholas Lions.

Meanwhile, the governments and talks with insurers about a pledge to invest billions of pounds in startups and infrastructure projects. Bloomberg understands insurers could agree to invest about five percent of the defined contribution parts they manage. The Chancellor Jeremy hunts you to give details of the plant and his Mansion House speech next week. The level of commitment over time could be in the tens of billions of pounds. Short of the fifty billion pound pool proposed by the Lord Mayor of London, Nicholas Lions.

And lastly, Instagram's highly anticipated Twitter Rifle is expected to launch on Thursday. Threads will offer text based posts that can be liked, commented on, and shared. People will be able to follow the accounts that they follow on Instagram and keep their same username. The launch comes as Twitter limits the number of posts that users can see and reduces access to its tweet deck desk top That is such a tongue twist, but there we are. Those are our top stories.

And lastly, Instagram's highly anticipated Twitter Rifle is expected to launch on Thursday. Threads will offer text based posts that can be liked, commented on, and shared. People will be able to follow the accounts that they follow on Instagram and keep their same username. The launch comes as Twitter limits the number of posts that users can see and reduces access to its tweet deck desk top That is such a tongue twist, but there we are. Those are our top stories.

Can you use it?

Can you use it?

That's the most important thing. Yes, and will it be integrated with Threads as well? Look another social network to get a handle on. If you want a good briefing on this or by the way, our opinion columnist Davelye has written a great piece on the terminal which we'll tell you a little bit about the other challengers to Twitter that have tried to set up and the varied success they've had, and the question really of capacity. Twitter had these technical difficulties over the weekend where the number of post people could read had to be limited, and the question, I suppose the hope behind the threads app. From Meta's point of view is at least they have the engineering capacity, they have the servers, they know how to deal with billions of users. So at least a rival to Twitter could potentially have the at least technical backup to it that some of those other platforms have failed so far anyway to capture.

That's the most important thing. Yes, and will it be integrated with Threads as well? Look another social network to get a handle on. If you want a good briefing on this or by the way, our opinion columnist Davelye has written a great piece on the terminal which we'll tell you a little bit about the other challengers to Twitter that have tried to set up and the varied success they've had, and the question really of capacity. Twitter had these technical difficulties over the weekend where the number of post people could read had to be limited, and the question, I suppose the hope behind the threads app. From Meta's point of view is at least they have the engineering capacity, they have the servers, they know how to deal with billions of users. So at least a rival to Twitter could potentially have the at least technical backup to it that some of those other platforms have failed so far anyway to capture.

Yeah, I mean, to my mind, it's just means a plethoro. Social media just another platform that one has to kind of deal with more output, more inputs.

Yeah, I mean, to my mind, it's just means a plethoro. Social media just another platform that one has to kind of deal with more output, more inputs.

Well, we haven't had, you know, early on in the life of social media, of course, there was lots of platforms that rose and died, whereas we actually haven't had much of a change over recent years. So perhaps this will be the next Here we call it a paradigm shift in social media. Do things reach the whole line of paradigm social media anyway, that's another subject for discussion. Another story that I've seen this morning that's worth sticking into our ound credit swite and this is it's wealth staff being told to brush up their CVS and personal development plans ahead of a selection process for career progression. As Credit Suese integrates with UBS, we knew this process was coming and that it was going to potentially be very difficult for those movie over from Credit sweep because the bank is seeking to cut so many staff members. But people being told get ready.

Well, we haven't had, you know, early on in the life of social media, of course, there was lots of platforms that rose and died, whereas we actually haven't had much of a change over recent years. So perhaps this will be the next Here we call it a paradigm shift in social media. Do things reach the whole line of paradigm social media anyway, that's another subject for discussion. Another story that I've seen this morning that's worth sticking into our ound credit swite and this is it's wealth staff being told to brush up their CVS and personal development plans ahead of a selection process for career progression. As Credit Suese integrates with UBS, we knew this process was coming and that it was going to potentially be very difficult for those movie over from Credit sweep because the bank is seeking to cut so many staff members. But people being told get ready.

Yeah, but it's soon. It's mid July.

Yeah, but it's soon. It's mid July.

The appointments for management levels within well the ubs, so credit swite people in ubs. Yes, so it's actually very very soon, very interesting personnel issues that we need to think about. Also, though, let's senn our attention to our top story. So the Morgan Stanley clash with the former New York Fed head Bill Dudley.

The appointments for management levels within well the ubs, so credit swite people in ubs. Yes, so it's actually very very soon, very interesting personnel issues that we need to think about. Also, though, let's senn our attention to our top story. So the Morgan Stanley clash with the former New York Fed head Bill Dudley.

He's got a very.

He's got a very.

Bearish case in terms of tenure treasury yields rising to four and a half percent.

Bearish case in terms of tenure treasury yields rising to four and a half percent.

Let's turn to Bloomberg's Andy vander Wolters with us in studio this morning for more on this. This question, Dan of Bob Dudley and work and Stanley. Does this excite you in terms of is it a clash of the Titans?

Let's turn to Bloomberg's Andy vander Wolters with us in studio this morning for more on this. This question, Dan of Bob Dudley and work and Stanley. Does this excite you in terms of is it a clash of the Titans?

Yeah?

Yeah?

Absolutely, Look, Garfields is cernally big shoes to fill. But I will try a curve. Inversion in the US has reached, you know, extreme levels. We are really seeing the ten year yield a significantly lower than two year yields, something like one hundred and ten basis points. Now, the big question is we will see resteepening at some point, Right, that's bound to occurs, and that it's a natural state for markets. The question is how does that occur. Do we see that the short end of the rates markets collapse with central banks crashing economies and infation coming down as a result, or do we see ten year yields rising because economies remain strong and inflation only falls slowly, so the re steepening is coming. The question is how? And that means everything for markets at the moment in terms.

Absolutely, Look, Garfields is cernally big shoes to fill. But I will try a curve. Inversion in the US has reached, you know, extreme levels. We are really seeing the ten year yield a significantly lower than two year yields, something like one hundred and ten basis points. Now, the big question is we will see resteepening at some point, Right, that's bound to occurs, and that it's a natural state for markets. The question is how does that occur. Do we see that the short end of the rates markets collapse with central banks crashing economies and infation coming down as a result, or do we see ten year yields rising because economies remain strong and inflation only falls slowly, so the re steepening is coming. The question is how? And that means everything for markets at the moment in terms.

Of the depths the US yield curve inversion. I mean, do we still think that yield curve inversion is the strong signal of recession to come twelve to eighteen months down the line?

Of the depths the US yield curve inversion. I mean, do we still think that yield curve inversion is the strong signal of recession to come twelve to eighteen months down the line?

Well, yeah, that is absolutely the heart of the question, right. I think that I think investors will be asking themselves, as they always do, is this time different for the yield curve?

Well, yeah, that is absolutely the heart of the question, right. I think that I think investors will be asking themselves, as they always do, is this time different for the yield curve?

Right?

Right?

The yield curve has been a really really strong indicator for future economic growth, and that inversions has always you know, been it's a forecast for about eighteen months into the future. This time it may be different. It feels a little bit like the causes are very different. We're coming out of a pandemic. We've had that ultra high inflation, but growth isn't slowing at the place that people were expecting it to, right, We're not seeing the the US recession, We're not seeing the jobs market slow. So the evidence isn't there yet. But you know, the future is a murky place, and the the yield curve may well prove me wrong.

The yield curve has been a really really strong indicator for future economic growth, and that inversions has always you know, been it's a forecast for about eighteen months into the future. This time it may be different. It feels a little bit like the causes are very different. We're coming out of a pandemic. We've had that ultra high inflation, but growth isn't slowing at the place that people were expecting it to, right, We're not seeing the the US recession, We're not seeing the jobs market slow. So the evidence isn't there yet. But you know, the future is a murky place, and the the yield curve may well prove me wrong.

Well, how much does the actions of the Federal Reserve that influence where this story goes next?

Well, how much does the actions of the Federal Reserve that influence where this story goes next?

Yeah?

Yeah?

I think so. We're seeing these pauses from the RBA today, from the FED, you know, talk at the ECB. The question is what do they come back with. Right, if we see ultra hawkish policy, that's probably a sign that the that that growth is quite strong. Still, I think the fact that we are pausing at the moment is quite a good development for the market. It shows that the central bankers are taking the transmission mechanism and the lags into account. But I think beyond that we probably see more divergence. So, you know, we are seeing places like China almost in deflation and in the UK almost double digit inflation. So we are seeing some divergence in central bank policy going forward.

I think so. We're seeing these pauses from the RBA today, from the FED, you know, talk at the ECB. The question is what do they come back with. Right, if we see ultra hawkish policy, that's probably a sign that the that that growth is quite strong. Still, I think the fact that we are pausing at the moment is quite a good development for the market. It shows that the central bankers are taking the transmission mechanism and the lags into account. But I think beyond that we probably see more divergence. So, you know, we are seeing places like China almost in deflation and in the UK almost double digit inflation. So we are seeing some divergence in central bank policy going forward.

Absolutely, and it's fascinating that there is such a clash within the markets actually in terms of you know, heavyweight players have very different views about what's happening in the bond markets. Eddie, thank you so much for being with us. Poomberg's Eddie van Derveldt there.

Absolutely, and it's fascinating that there is such a clash within the markets actually in terms of you know, heavyweight players have very different views about what's happening in the bond markets. Eddie, thank you so much for being with us. Poomberg's Eddie van Derveldt there.

Turning next to a really interesting conversation, Caroline that you and Tom McKenzie have been having about watches and particularly fake watches.

Turning next to a really interesting conversation, Caroline that you and Tom McKenzie have been having about watches and particularly fake watches.

Yeah, so called Frankenstein watches are on the rise.

Yeah, so called Frankenstein watches are on the rise.

Familiar with Yeah, me neither. But it came up about a month ago.

Familiar with Yeah, me neither. But it came up about a month ago.

Where the Swiss watchmaker Omega alleged that three former employees were actually involved in this criminal plot that resulted in the sale of a fake speed Master. It wasn't just any old cell, it was an auction and this timepiece actually fetched three million dollars. So it got a lot of people's attention, a lot of focus in the industry around the fact that actually these quality fake watches or hybrid watches that are made with bits of old time pieces and now becoming so good that it's really really hard to tell them apot the real deal. And so we were speaking to Ian van Derval, who is the CEO of Watchfinder and Co. This is an online store mainly that deals in second hand watches, of course, and he was asking buyers and sellers to be really vigilant about this because actually even they are struggling to tell the difference between genuine and counterfeit watches.

Where the Swiss watchmaker Omega alleged that three former employees were actually involved in this criminal plot that resulted in the sale of a fake speed Master. It wasn't just any old cell, it was an auction and this timepiece actually fetched three million dollars. So it got a lot of people's attention, a lot of focus in the industry around the fact that actually these quality fake watches or hybrid watches that are made with bits of old time pieces and now becoming so good that it's really really hard to tell them apot the real deal. And so we were speaking to Ian van Derval, who is the CEO of Watchfinder and Co. This is an online store mainly that deals in second hand watches, of course, and he was asking buyers and sellers to be really vigilant about this because actually even they are struggling to tell the difference between genuine and counterfeit watches.

Have a listen to what he.

Have a listen to what he.

Had to say. How big an issue is this for the industry.

Had to say. How big an issue is this for the industry.

It is, It's always been a problem. I think what we're seeing we have consumers we want to be associated with luxury brands, and sometimes it's a matter of accessibility, the price point and beyond. But what we're seeing in the last years is that the level of sophistication of these fake watches is increasing significantly. So in the olden days and the authentication of watches it's kind of art and science. So there is a checklist that we have, but our watchmakers, when they feel a watch, they have a first impression if real or not. In the olden days, you would say that roughly twenty percent of watches required really further inspection to understand if it was a real or a fake watch. Today it's more eighty twenty. So it's the other way around where we really need to do very forrough testing and inspection to understand if it's a genuine watch or not.

It is, It's always been a problem. I think what we're seeing we have consumers we want to be associated with luxury brands, and sometimes it's a matter of accessibility, the price point and beyond. But what we're seeing in the last years is that the level of sophistication of these fake watches is increasing significantly. So in the olden days and the authentication of watches it's kind of art and science. So there is a checklist that we have, but our watchmakers, when they feel a watch, they have a first impression if real or not. In the olden days, you would say that roughly twenty percent of watches required really further inspection to understand if it was a real or a fake watch. Today it's more eighty twenty. So it's the other way around where we really need to do very forrough testing and inspection to understand if it's a genuine watch or not.

Where are these being produced on the continent they produced elsewhere? What presumably this is a function of those record high prices that we saw for luxury hand pieces time pieces during the pandemic, and the stimulus checks that people were putting to play to snap up these watches. That must be a factor. And then again where they being made and to what extent is the industry coming together to kind of fight this.

Where are these being produced on the continent they produced elsewhere? What presumably this is a function of those record high prices that we saw for luxury hand pieces time pieces during the pandemic, and the stimulus checks that people were putting to play to snap up these watches. That must be a factor. And then again where they being made and to what extent is the industry coming together to kind of fight this.

So it's really a global problem because in order to create watches of that quality, you need access to specific tools, and you need real technicians, you need watchmakers to be able to put those together. So it's not necessarily one specific region where it comes from. As an industry. What we're seeing is that so for us, all of the watches that we sell, we own, and before we buy them, all of the watches go through a sixty step process. So it's an inspection of the watch cosmetically, but it's also checking if the watch is not registered on any lost in stole and databases, and then it's authentication steps to match the serial number with the documentation and then step by step every part is inspected, after which we look at the functioning of the watch, and then, depending on what work we find needs to be done, we operate on these watches within our service center, and that is something that is not a standardized process. That is really our process. But as one of the industry leaders, we encourage the industry as a whole to adopt similar practices. So it's not just about fake watches, but it's also very much about lost and stone watches.

So it's really a global problem because in order to create watches of that quality, you need access to specific tools, and you need real technicians, you need watchmakers to be able to put those together. So it's not necessarily one specific region where it comes from. As an industry. What we're seeing is that so for us, all of the watches that we sell, we own, and before we buy them, all of the watches go through a sixty step process. So it's an inspection of the watch cosmetically, but it's also checking if the watch is not registered on any lost in stole and databases, and then it's authentication steps to match the serial number with the documentation and then step by step every part is inspected, after which we look at the functioning of the watch, and then, depending on what work we find needs to be done, we operate on these watches within our service center, and that is something that is not a standardized process. That is really our process. But as one of the industry leaders, we encourage the industry as a whole to adopt similar practices. So it's not just about fake watches, but it's also very much about lost and stone watches.

Okay, that's interesting. What are the brands that are most faked?

Okay, that's interesting. What are the brands that are most faked?

So Rolex is d most aspirational luxury watch brand and the highest demand, hence it's the most replicated. But you today you see replicas or clone watches, very very high quality watches of virtually all of the big luxury brands. So the whole gamma is represented today.

So Rolex is d most aspirational luxury watch brand and the highest demand, hence it's the most replicated. But you today you see replicas or clone watches, very very high quality watches of virtually all of the big luxury brands. So the whole gamma is represented today.

But when it comes to Rolex, is there a percentage? Is it kind of eighty percent of the fakes a Rolex is what your kind of? Is there a number you can put to that? Approximately?

But when it comes to Rolex, is there a percentage? Is it kind of eighty percent of the fakes a Rolex is what your kind of? Is there a number you can put to that? Approximately?

Yeah, it's difficult to put a number to it. But if you look at the watch industry as a whole and the proportion that Rolex has within it, then you would say up to fifty percent is probably.

Yeah, it's difficult to put a number to it. But if you look at the watch industry as a whole and the proportion that Rolex has within it, then you would say up to fifty percent is probably.

Rolex up to fifty Okay, fine, has has it changed a great deal?

Rolex up to fifty Okay, fine, has has it changed a great deal?

Then?

Then?

As we saw the kind of market boom now prices are coming down in terms of the secondary market. Has the level of kind of fake watches that you're finding has that changed in the last two five year compared to five years.

As we saw the kind of market boom now prices are coming down in terms of the secondary market. Has the level of kind of fake watches that you're finding has that changed in the last two five year compared to five years.

Ago, two years ago?

Ago, two years ago?

Yeah, So it's always been somewhat up and down. And the percentage of fake watches that we get in is anywhere between ten and seven eight percent on a yearly basis. I said, I think the main difference that we're seeing is that the level of sophistication of these watches is changing, but also that certain parts of the watch can be genuine, but then there's fake parts being used in the watch.

Yeah, So it's always been somewhat up and down. And the percentage of fake watches that we get in is anywhere between ten and seven eight percent on a yearly basis. I said, I think the main difference that we're seeing is that the level of sophistication of these watches is changing, but also that certain parts of the watch can be genuine, but then there's fake parts being used in the watch.

Is there more that some of the luxury brands themselves could be doing.

Is there more that some of the luxury brands themselves could be doing.

Yeah, absolutely, And there's a lot of initiatives that brands are doing today, utilizing the blockchain, for example, to register all watches as a unique piece on the blockchain. And there's also a lot of work being done to understand visual markers on a watch that make it very difficult to mimic at a level of quality in a fake watch.

Yeah, absolutely, And there's a lot of initiatives that brands are doing today, utilizing the blockchain, for example, to register all watches as a unique piece on the blockchain. And there's also a lot of work being done to understand visual markers on a watch that make it very difficult to mimic at a level of quality in a fake watch.

And you might do with banknotes for example.

And you might do with banknotes for example.

Yeah, exactly, yes, and so there are various initiatives in the industry that are being done. As a pre owned player, being part of the Richmond Group, we also get to collaborate directly with the brands and support in that.

Yeah, exactly, yes, and so there are various initiatives in the industry that are being done. As a pre owned player, being part of the Richmond Group, we also get to collaborate directly with the brands and support in that.

In admission, Yeah, I mean obviously Richmond you know, Cartier course not own lots of those big brands and names. What do you do then, if a customer sends in a fake watch?

In admission, Yeah, I mean obviously Richmond you know, Cartier course not own lots of those big brands and names. What do you do then, if a customer sends in a fake watch?

What do you do if somebody complain?

What do you do if somebody complain?

So I think the watch I bought is fake, I don't know what's well, that's.

So I think the watch I bought is fake, I don't know what's well, that's.

That's complicated because in many cases we don't assume that there's any wrongdoing from the customer who wants to sell us the watch, so very often it's met with surprise. Depending on the jurisdiction, there's various things that we have to do. So in certain cases we're not allowed to send the watch back. We need to hold on to it. In other cases we can return to watch, but.

That's complicated because in many cases we don't assume that there's any wrongdoing from the customer who wants to sell us the watch, so very often it's met with surprise. Depending on the jurisdiction, there's various things that we have to do. So in certain cases we're not allowed to send the watch back. We need to hold on to it. In other cases we can return to watch, but.

Different return the watch to the customer.

Different return the watch to the customer.

Yeah.

Yeah.

Yeah. And the cases where it's us selling a watch that is then fake, that's our reputation that's on the line, and lucky those cases are virtually non existing in the twenty years that we've been we've been around, but typically those are quite tough conversations to have with our clients.

Yeah. And the cases where it's us selling a watch that is then fake, that's our reputation that's on the line, and lucky those cases are virtually non existing in the twenty years that we've been we've been around, but typically those are quite tough conversations to have with our clients.

Yes, yeah, I bet that's probably a diplomatic wave, so underplaying how challenging that must be. That conversation it taught us about before we let you go about prices of secondhand watches. They've come off quite a lot, particularly at the high end. Do you expect that to continue? Are we nearing a bottom what you're seeing in terms of prices.

Yes, yeah, I bet that's probably a diplomatic wave, so underplaying how challenging that must be. That conversation it taught us about before we let you go about prices of secondhand watches. They've come off quite a lot, particularly at the high end. Do you expect that to continue? Are we nearing a bottom what you're seeing in terms of prices.

Yeah, I think, first and foremost, what we've seen this whole speculative wave in the last two or three years, that is not necessarily what is at the heart of preon watches. So preond watches is very much either a gateway into luxury watches at a more friendly price point, or it gives you access to watches that have been discontinued or watches that have a different story to it. Speculation boom peaked really April of last year, and since then, especially the higher segment above ten pounds, have come down thirty forty percent. We now see it stabilizing, although it's still gradually sliding down for us, we as watching and we're not interested in kind of the next crypto run. So for us, it's not about speculation. Stability is good and it's purely to do with our ability to buy watches at the right price point to be able to sell them at the right price point.

Yeah, I think, first and foremost, what we've seen this whole speculative wave in the last two or three years, that is not necessarily what is at the heart of preon watches. So preond watches is very much either a gateway into luxury watches at a more friendly price point, or it gives you access to watches that have been discontinued or watches that have a different story to it. Speculation boom peaked really April of last year, and since then, especially the higher segment above ten pounds, have come down thirty forty percent. We now see it stabilizing, although it's still gradually sliding down for us, we as watching and we're not interested in kind of the next crypto run. So for us, it's not about speculation. Stability is good and it's purely to do with our ability to buy watches at the right price point to be able to sell them at the right price point.

And I cannot let you go without a mention of a few of your favorites. You must see tens hundreds of the best watches out there for collectors at home. I'm sure listening all your favorites.

And I cannot let you go without a mention of a few of your favorites. You must see tens hundreds of the best watches out there for collectors at home. I'm sure listening all your favorites.

So I'm lucky that we're part of the Richmond Group and long End Zone is one of the brands, one of the most established maisons that we have, and they released the Odysseus, which is their version of a steel sports watch, and they just released the Chronocraft in Watches and Wonders this year, and that to me is my grill. But I have a lot more work to do before I can entertain that.

So I'm lucky that we're part of the Richmond Group and long End Zone is one of the brands, one of the most established maisons that we have, and they released the Odysseus, which is their version of a steel sports watch, and they just released the Chronocraft in Watches and Wonders this year, and that to me is my grill. But I have a lot more work to do before I can entertain that.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Streets and beyond.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Streets and beyond.

Look for us on your podcast every morning, on Apple, Spotify and anywhere else you get your podcasts.

Look for us on your podcast 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 dot Com.

You can also listen live each morning on London DAB Radio, the Bloomberg Business app, and Bloomberg dot Com.

Our flagship New York station, is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

Our flagship New York station, is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.

I'm Caroline Hepka and.

I'm Caroline Hepka and.

I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg day Break Europe

I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg day Break Europe