Bloomberg Daybreak: Europe 04/16/2024

Summary

This Bloomberg Daybreak Europe transcript outlines a busy day in global markets, emphasizing significant movements in currencies, stock indices, and geopolitical tensions. Key topics include a strong U.S. dollar impacting Asian markets, Federal Reserve's stance on interest rates, China's mixed economic data, and ongoing geopolitical concerns involving Israel, Iran, and Ukraine. The script also covers corporate earnings, particularly from Ericsson, and previews upcoming financial disclosures from major banks. The narrative highlights the complex interplay between economic indicators, market responses, and international politics, shaping the day's financial landscape.

Takeaways

• 📈 The surging dollar is affecting global markets, causing stocks in Asia and Europe to drop significantly.
• 🌏 Geopolitical tensions are high with Israel planning to respond to an Iranian missile and drone attack, impacting global market sentiments.
• 💹 Chinese GDP growth exceeded expectations for the first quarter, though retail sales and industrial output in March were disappointing.
• 📉 U.S. futures, including the S&P and NASDAQ, indicate further losses, reflecting global market uncertainty.
• 📊 The U.S. dollar's strength is pressuring other currencies, and Brent oil prices remain around $90 a barrel due to geopolitical risks.
• 🔍 Fintech regains its position as the UK's most funded startup sector, attracting significant investment.
• 🏦 Goldman Sachs reports a surprise profit jump, influencing the banking sector's performance expectations.
• 🌍 Severe drought in southern Africa prompts Zimbabwe to consider importing corn from Brazil, highlighting the impact of climate change on food security.
• 📚 The Bank of Japan is in focus due to potential policy changes amid market pressures from a stronger dollar and weaker yen.
• 🌐 German Chancellor Olaf Scholz discusses trade, Ukraine, and green energy in a meeting with Chinese President Xi Jinping amid growing tensions.

Q & A

What was the impact of a strong dollar on Asian currencies as mentioned in the script?

The script highlights that a surging dollar significantly affected Asian currencies, leading to a decrease in their value against the dollar.

How did the US stock markets perform as indicated in the transcript?

According to the transcript, the US stock markets experienced a decline, with the S&P 500 dropping by about 1.2%, indicating a rough session for stocks.

What were the geopolitical tensions mentioned in the transcript related to Israel and Iran?

The transcript mentions that Israeli military officials declared the necessity to respond to an Iranian missile and drone attack, highlighting ongoing geopolitical tensions between Israel and Iran.

What does the Federal Reserve's stance on interest rates appear to be, based on the comments from Mary Daly?

Mary Daly from the Fed suggested that there is no rush to start cutting rates, indicating that the Federal Reserve is likely to maintain current interest rate levels for some time.

What economic indicators from China were discussed, and what did they imply about China's economic condition?

The script discusses China's first quarter GDP growth, which beat expectations, but also mentions disappointing retail sales and industrial output for March. This suggests that while the economy initially showed robust growth, there may be signs of an emerging slowdown.

How did the geopolitical risks affect the price of Brent crude oil as mentioned?

Geopolitical risks, particularly involving Israel's potential response to Iran, contributed to an increase in Brent crude oil prices, which were noted to be at $90 a barrel and ticking up.

What key financial data from the UK was anticipated, and why was it significant?

The transcript mentioned the release of wage data and Consumer Price Index (CPI) data from the UK. This information is significant as it helps gauge inflationary pressures and could influence the Bank of England's monetary policy decisions.

What trends in Ericsson's financial performance were revealed in the earnings report?

Ericsson's financial performance indicated a significant beat in terms of first quarter adjusted earnings before interest and tax, nearly doubling the estimates. This suggests strong operational performance and possibly better-than-expected market conditions for the telecom equipment maker.

What were the market expectations for the interest rates from the major central banks?

Market expectations included anticipations of two cuts of 25 basis points each by the Bank of England, contrasting with fewer expected rate cuts by the Federal Reserve and three by the European Central Bank.

How is the financial crisis in Southern Africa being addressed, specifically concerning food security?

The financial crisis in Southern Africa, exacerbated by severe droughts, is being addressed by importing corn from Brazil to combat food shortages, particularly in Zimbabwe, which is considering imports for the first time since 2014.

Outlines

00:00

📈 Financial Market Updates and Economic Indicators

Tom Mackenzie introduces 'Bloomberg Daybreak Europe', highlighting key financial and geopolitical developments. A significant dollar surge impacts Asian markets and tech stocks globally, while China's mixed economic data signals a slowdown. Geopolitical tensions rise with Israeli responses to Iran's attacks and impending U.S. decisions on aid to Israel and Ukraine. The report covers market reactions to economic data and anticipates a vote on U.S. aid packages, emphasizing the dollar's strength and potential impacts on global currencies and commodities.

05:01

🏢 Ericsson's Surprising Financial Performance

The segment focuses on Ericsson's financial achievements, which surpassed expectations. Ericsson, a major telecom equipment manufacturer, reported a significant increase in adjusted first quarter earnings and gross margin, beating analysts' estimates despite concerns about weak demand from mobile operators. The discussion previews further analysis of Ericsson's stock performance and shifts attention to economic growth in China, highlighting the challenges and potential support needed despite favorable GDP growth figures.

10:01

🌏 Global Trade Tensions and Economic Outlook

This segment delves into international relations and trade tensions, particularly between China and Germany during German Chancellor Olaf Scholz's visit to Beijing. Discussions covered trade, the Ukraine conflict, and green energy transitions. The narrative also touches on Europe's competitive stance in global trade, influenced by subsidies and tax advantages in various sectors. The segment concludes with an overview of upcoming economic data releases in the UK and the potential political implications for the Chancellor.

15:10

🛢️ Commodity Market Trends Amid Geopolitical Uncertainty

The focus shifts to commodity markets, specifically oil and gold, responding to geopolitical tensions following an attack by Iran. Israeli officials assert the necessity of retaliation, influencing market movements. The U.S. is contemplating new aid packages for Israel and Ukraine, with potential implications for further conflict and market stability. The segment explores possible Israeli military responses and the broader geopolitical landscape's impact on commodity prices.

20:11

🌍 Addressing Severe Drought in Southern Africa

Tom Mackenzie discusses the severe drought affecting Southern Africa, particularly Zimbabwe's consideration to import corn from Brazil for the first time in a decade. The drought has led to significant agricultural setbacks, prompting national disaster declarations in multiple countries. This segment highlights the economic and humanitarian impacts of the drought, including inflation pressures and the broader implications of climate change on regional stability and food security.

25:13

📉 Market Analysis and Global Economic Trends

This section provides a comprehensive analysis of current market conditions and global economic trends. It discusses the impact of a strong dollar on various currencies and the broader implications for global markets, including Asian markets' performance and central banks' potential policy shifts. The narrative connects these trends to ongoing geopolitical events, the health of the global economy, and the implications for future economic policy and market behavior.

30:16

💼 Corporate Earnings and Economic Strategy

The segment covers Goldman Sachs' surprisingly strong earnings, driven by a focus on core business areas. The discussion includes anticipations for upcoming earnings reports from other major banks like Morgan Stanley and Bank of America. It also explores broader economic themes, such as consumer spending and the Federal Reserve's potential rate cuts, providing insights into corporate strategies and the financial sector's outlook.

35:20

🏦 Financial Market Dynamics and Central Bank Policies

This segment discusses the interplay between strong economic indicators, labor market dynamics, and central bank policies. It reflects on the New York Fed President's views on interest rates and economic growth, emphasizing the need for careful monetary policy adjustments to continue progressing towards stability and inflation targets. The segment highlights the challenges and strategies of central banks in navigating current economic conditions.

40:24

💸 Investment Trends in the UK Tech Sector

Exploring the resurgence of fintech as the leading sector in UK startup investments, this segment discusses the dynamics of early versus late-stage funding. It also covers the broader investment landscape, noting significant international contributions to the UK tech sector. The narrative examines government strategies to support the tech industry, highlighting the challenges and potential growth paths for UK-based startups.

Keywords

💡Bloomberg Daybreak Europe

Bloomberg Daybreak Europe is a morning news program that covers the latest financial, business, and geopolitical news affecting Europe and the global markets. In the transcript, it sets the context for the type of content discussed during the program, which includes updates on financial markets, economic data, and significant geopolitical events.

💡Surging dollar

The term 'surging dollar' refers to the strengthening of the U.S. dollar against other currencies. In the script, this concept is mentioned as having significant effects on Asian currencies and economies, illustrating how fluctuations in the dollar can impact global financial markets and economic stability in various regions.

💡Fed's rate decisions

The Federal Reserve's rate decisions are critical for financial markets worldwide. In the transcript, a statement by the Fed’s Mary Daly indicates no rush to cut rates, impacting investor expectations and market movements. The anticipation and reaction to these decisions influence global stock, bond, and currency markets.

💡GDP growth

Gross Domestic Product (GDP) growth measures the economic performance of a country. In the transcript, China’s GDP growth exceeding expectations is discussed, highlighting its influence on investor sentiment and market dynamics. This metric is crucial for assessing the health of an economy and influences global economic outlooks.

💡Israeli military response

The Israeli military's strategic decisions in response to threats or attacks, such as the mentioned Iranian missile and drone attack, are significant in geopolitical terms. In the script, this situation illustrates the tensions in the Middle East and their potential to affect international relations and global markets.

💡Futures markets

Futures markets allow investors to buy and sell contracts for the future delivery of assets like commodities or financial instruments. The script discusses movements in S&P and NASDAQ futures, reflecting investor predictions about future market movements, which are essential for financial planning and risk management.

💡Brent crude

Brent crude is a major trading classification of sweet light crude oil. The script references its price movement in response to geopolitical risks, demonstrating how oil prices are sensitive to global events, affecting economies and energy markets worldwide.

💡Iron ore prices

Iron ore is a critical commodity for the steel-making industry. In the transcript, the price of iron ore is mentioned in the context of economic indicators from China, showing how commodity prices can serve as economic indicators and influence sectors such as manufacturing and construction.

💡Ericsson’s earnings

Ericsson, a major telecom equipment maker, is discussed in the transcript in terms of its financial performance, specifically earnings before interest and tax. This highlights how corporate earnings reports are crucial for investors, affecting stock valuations and market sentiment.

💡Geopolitical overlay

Geopolitical overlay refers to the influence of international political and economic events on financial markets. The transcript uses this term to describe how global conflicts, such as tensions between Israel and Iran, can impact financial markets by altering risk perceptions among investors.

Highlights

The surging dollar impacts global currencies and stocks, leading to market volatility.

China's first quarter GDP growth exceeds expectations, while other economic indicators suggest a potential slowdown.

Israeli military officials prepare to respond to Iran's missile and drone attack.

US House of Representatives readies for a vote on aid to Israel and Ukraine amid ongoing conflicts.

Significant downturn in European markets following a tech selloff on Wall Street.

US Treasury yields rise, with the two-year note nearing 5% and the ten-year yield increasing.

The British pound is affected by upcoming wage data and inflation updates.

Oil prices climb due to geopolitical tensions, with Brent crude reaching $90 a barrel.

Ericsson reports a strong quarter, nearly doubling the expected earnings.

Zimbabwe considers importing corn from Brazil as severe drought threatens southern Africa.

German Chancellor Olaf Scholz meets with Chinese President Xi Jinping, discussing trade and the Ukraine conflict.

Goldman Sachs and Morgan Stanley prepare for quarterly earnings reports amid challenging market conditions.

The U.S. Central Bank signals potential rate cuts later in the year, contingent on continued inflation decrease.

Significant increases in tech investments in the UK, with a focus on fintech and AI.

Potential shifts in EU trade policy towards Chinese exports amid growing economic competitiveness.

Transcripts

Good morning. They say it's Bloomberg Daybreak Europe.

I'm Tom Mackenzie in London. These are the stories that set your

agenda. A surging dollar bulldozes through Asian

affects. The region's stocks also take a hit

following a big tech selloff on Wall street.

The fed's Mary Daly says there is no rush to start cutting rates.

China's first quarter GDP growth beat expectations, but retail sales and

industrial output disappoint in March, suggesting a slowdown is already

underway. Plus, Israeli military officials say

they have no choice but to respond to Iran's missile and drone attack.

This as the US House prepares to vote on new aid to Israel and Ukraine.

Let's check in on these markets then. After a thumping for US stocks

yesterday, a drop of around 1.2% for the S&P, the lowest level in about two

months. You're crossing back below 5100 for US.

Stocks on stronger data out of the US, retail sales data coming in stronger.

Building out those expectations, of course, that the Fed will mean higher

for longer on interest rates. Then there's the geopolitical overlay as

well. Currently looking at further downside,

flanked by US futures, S&P futures pointing led by 2/10 of a percent.

NASDAQ futures looking to losses of around 33 points here in New York.

Seems for a shellacking across the European markets.

Futures when he led by 1.3%, a drop of 64 points.

Footsie 100 also pointing lower, quite a similar margin, looking to losses of

1.28%, down 102 points is what's been flat across these futures.

Let's flip the board and look across asset.

Then the sell off as well across treasuries yesterday was pronounced.

The two year is getting close to 5%. The ten year you saw a nine basis point

move higher in yields. Currently the ten year benchmark at 460.

The pound in focus today on the back of wage data that comes out at around 7

a.m. UK time.

We have CPI out of the UK on Wednesday 124 on the pound.

Currently it's more of a dollar story though right now down a 10th of a

percent. The surging dollar again pressuring a

number of currencies, Brent at $90 a barrel.

We've seen a tick up again on the back of the geopolitical risks.

The Israelis saying they will retaliate at a time of their choosing, currently

up 6/10 of a percent. An iron ore under pressure as well.

You can tie that to the China story down 1.26%.

So we'll be looking at the miners as well.

Listed in the UK, 810 per ounce, that per tonne, I should say, on iron ore.

Let's cross over to Asia and check in on how the Asian markets are faring.

Cross over to Dubai, in fact, with Vonnie Quinn is standing by for a check

on those asian markets and the middle east as well vonnie.

Will you set a tone? These are markets beset by woes.

It might be good for the US to get stronger data, but it's not so great for

the rest of the world waiting on Fed interest rate cuts.

We're seeing it particularly in the currency space and in fixed income, as

you mentioned. Also, though, as we said in equities,

these are really markets falling out of bed across the board today.

So you mentioned the yen one 5427 is where we're at.

Economists and analysts now looking at one 60.2.

So that was the 1990 level intervention as a potential point of intervention,

but we may get something before that. On the other hand, as our MLF strategist

have pointed out, it may not matter if the BOJ intervenes or if monetary

officials intervene if the Fed can't cut yet.

So there's a lot of question marks out there and you're seeing it across the

space in Asia today. The Korean one crossed the 1400 mark

earlier. We're well below that again now,

obviously, but still 9/10 of a percent weaker versus the US dollar.

We do, by the way, have a BOJ meeting in ten days.

May not get an interest rate hike there, but it is something to watch for at

least hawkish rhetoric from the governor.

The nikkei 2 to 5 down 2.1%. The coffee in Korea down 2.4%.

It is really just across the board in Asia.

I know you've been speaking to China. Some better news among the data dump,

not even helping in China. But let's flip up the boards and take a

look at the Middle East as well, because geopolitical events and rhetoric

obviously impacting these markets as well as we head through the week.

The market was trading yesterday. Obviously, we've been closed for hours

now. We haven't opened up for the Tuesday

session, but the Dow will reverse the previous day's declines, up about a

third of a percent at the end of the session in Saudi Arabia and Qatar.

We also saw a reversal with stocks of about 8/10 of a percent in Israel, a

reversal as well, lower about midway through the session.

When we got hawkish rhetoric out of Israel, stocks turned lower and the to

35 finished down one and a quarter percent.

One currency that is actually strengthening, though, is the shekel.

And that's thanks to the weakness that we've had for several sessions now,

strengthening yesterday, strengthening once again today, but just by a 10th of

a percent right now, some. Vonnie Quinn, Thank you very much

indeed. With markets across Asia and the Middle

East joining us out of Dubai, a red hot crossing the terminal right now, where

now, of course, it's a big week for earnings.

Ericsson coming through with what looks like a sizable beat, at least in terms

of first quarter adjusted earnings before interest and tax.

You're coming through with Swedish kronor, a 4.31 billion, 4.31 billion

Swedish kronor. The estimates had been for a little over

2 billion, so almost double the estimates when it comes to adjusted

first quarter earnings for Ericsson. The margin also the gross margin, also a

beat for this company. The telecom equipment maker, of course,

coming in at 42.7% for the year. GROSS margin adjusted for the first

quarter. The estimates have been for just shy of

40%. So a beat on the margins.

Well, the expectations coming into these results have been that the weak demand

from mobile operators, of course, the customers for Ericsson would weigh on

profits. It seems like that has not come to pass,

at least in the first quarter. We'll unpack that story more detail for

you and of course, check in on that stock at the open at 8 a.m.

UK time. Now to China, where the economy grew

5.3% in the year to the first quarter, beating expectations.

But a tale of an industrial production and retail sales in March suggests more

support may be needed to sustain that momentum.

Let's bring in them Bloomberg Asia economics correspondent Katia Dmitriev.

Kathy, what is talk to us about the good news in these numbers.

Then top line growth beating in the first quarter.

Well, the good news is factories. So a lot of the growth in GDP in the

first quarter was led by an increase in manufacturing and this sort of secondary

sector, you know, the Chinese industry is kind of divided into three different

sectors, and it was the secondary one that really led growth, and that is all

manufacturing and trade related. So exports growing.

You know, aside from the industrial side, though, there's not much else good

news in the data we saw today, While economists kind of raised their

estimates, we saw DBS was the latest to kind of raise their estimates on the

back of GDP growth. There's still a lot of concern about

domestic consumption and being able to keep the same or similar economic growth

throughout the year to kind of reach what the government wants, which is

around 5%, as they say. In terms of the the negative side of

things, you just have to look at the top line figure is retail sales were lower

than expected. We saw home sales, home prices dipping

down. No real nothing in sight that is

potentially going to change that dynamic.

And without those two things, analysts warn that this is just simply not

sustainable. You touch on the domestic consumption,

the retail story then? Is there any sign that the consumer, the

beleaguered consumer in China, of course, there are links there from the

consumer, the health of the consumer to the real estate market.

Those things that that assumption, that optimism is turning around.

There are some signs that later in the year things could improve, but there

aren't a lot of details yet on it. And what I'm referring to there is the

government's sort of cash for clunkers program.

So what they're hoping is that consumers can bring in their old appliances and

get them replaced with newer ones. Now, that's going to be spurring

industrial production a bit more manufacturers, a bit more to sort of

continue that trend that we've seen in the first quarter.

And there are some economists who say that could add as much as 0.07 basis

points to GDP through throughout the year.

The only issue with that is we don't have a lot of details on how that will

work, how that will kind of be measured over time, how easy that will be to

bring in. There was a press conference this week

that sort of delved into that just a bit more, but we're still unclear on how the

details of that will be worked out. So there is one silver lining there.

The other thing, just in terms of the property market, that's really going to

be the big one. And in that regard, I think the

government is expected to come in with some more fiscal monetary support here

because that's the big question mark this year.

Okay. Bloomberg economics correspondent Kathy

Dmitriev with a great breakdown of the China eco data and what to look for as

well in the weeks and months ahead. Thank you very much, indeed.

Staying with China. German Chancellor Olav Schulz has met

with Chinese President Xi Jinping in Beijing.

The visit comes as tensions, of course, between China and the West mounts over

trade issues and the conflict in Ukraine.

For more, let's bring in Bloomberg's Oliver Crook, who's been following this

for us, joining us from Berlin. Ollie, what can you tell us then about

the conversation between Xi and Schultz? What do we know?

Yeah, Tom, setting this up, we really had three main topics that Schultz

wanted to go there and speak to President Xi about.

The first was the war in Ukraine. The second is all of these issues

surrounding trade, which we know have sort of stolen the headlines kind of

really is the main issue for this visit. But then also sort of the green energy

transition and all of these things are sort of connected in a kind of

interesting way. On the question of Ukraine, there isn't

so much distance. I think that whole Schultz can really

hope to get from President Xi in terms of his stance there.

He says he is. He brought up a just peace with the

president when they went into the meeting, and we haven't had yet the

fruits of the meeting. But that is going to be kind of one of

the main topics. And then the second, of course, is this

question of trade, a trade question that is so important both to Germany and to

China. And really China in a certain sense,

really took Germany's space as the exporter to the world in 2010, became

the world's biggest exporter. That was really Germany's focus.

And as you could see there. Schultz saying that basically both China

and Germany are trading nations that benefit greatly from the World Trade

Organization, and they are committed to strengthening the rule based system.

We also got a comment from President Xi saying that as long as the principles of

mutual respect search for common ground, despite differences and mutual learning

from each other, bilateral relations could continue in a stable and

consistent way between Germany and China.

And really, you know, this is not really a big smiles and a warm, warm welcome

sort of visit, but it is one that is sort of one of mutual respect and

understanding. And that's sort of the the meeting

between the two, the two leaders, I should say.

I should say the time yesterday there was a moment of humor.

And when he was visiting Shanghai at the university and obviously the the news of

legalization of cannabis made it from China to Germany.

And he was asked by a student that if he came to study to Germany, would he have

to consume cannabis? And all officials said, No, no, don't

worry about that. You don't have to.

I'm turning 66 this year and I have never done so.

Okay, Well informed Chinese students on the topic of cannabis legalization in

Germany try to get cannabis trade between between Germany and China and

any time soon. Trade broadly contentious, right.

And the Europeans are basically kind of taking that taking their gloves off.

Many would say finally on this issue, they're stepping up probes on a number

of issues. How is that tying in to the German

chancellor's visit? Yeah.

Tom So obviously we have the easy sort of question, which is the biggest one

here, about whether or not the EU is going to slap tariffs on the Chinese EVs

and really, you know, an economy that has the Chinese economy has really set

itself up to try to win during the energy transition.

You know, and I think that the Chinese would argue, listen, we have looked way

ahead of time. We have a raw material policy that is

decades ahead of European ones. We have, you know, the sort of access to

the lithium and all of the other minerals required.

And that is really why we're winning. The Europeans, on the other hand, are

saying, no, this is down to unfair competition.

There's a lot of subsidies, there's a lot of tax advantages, a lot of access

to things that European companies don't have.

And this is really at the heart of the issue.

So you have it on EVs, you have it on solar and wind increasingly.

And yesterday we had the scoop, Tom, that on medical device procurement.

So this just gives you an idea that the EU is really looking at all parts of

this. But I think what's interesting is that

this will now invite a number of questions into Europe.

You know, the Inflation Reduction Act, one would say, is potentially got some

of the same issues in terms of subsidies and tax cuts.

Will the EU really undertake that or is this really just a political question?

There is also the question of Europe's own competitiveness, right?

How can Europe be competitive? Because the Chinese would say we've just

outcompeted you and that is going to be the focus of the EU leader meeting

later. Happening this week in Brussels, where

all the EU leaders are coalescing and coming together to really to try to talk

about how do you get Europe to be more competitive.

Okay. Ali Crook in Berlin, really fascinating.

Thank you very much indeed, with a deep dive on that visit, of course, by the

German chancellor and what it could mean more broadly for how the Europeans are

thinking about trade with that crucial trading nation.

Across what you need to be looking ahead to the rest of the day.

7 p.m. UK time just flagging for you in terms

of the data coming out of the U.K. It's a big week, of course, in terms of

inflation that drops on Wednesday. But late today, 78 and Sunday UK time

going to get wages out of the UK based on employment data as well.

Wages seem softening a little bit, which of course will be welcomed by the Bank

of England. 7 p.m.

Meanwhile, UK time Bloomberg will be speaking to the UK Chancellor Jeremy

Hunt. Of course a crucial election year as

well. His reaction to the data.

Many big questions on the b A and of course likely political questions as

well for the Chancellor. That's coming at 7 p.m.

UK time. Speaking of course to Bloomberg, we're

also going to be getting on the earnings front.

We had Ericsson dropping at 7 a.m. UK time, 6ami should say.

We are switching focus to the luxury space.

Later today. We're going to get LVMH sales as well.

So a key gauge there on the health of the luxury sector.

And also today, following that strong earnings spring that came through from

Goldman Sachs, Bank of America and Morgan Stanley, that earnings drop as

well. Can they follow suit from Goldman in

terms of the pickup that they seeing in terms of the trading parts of their

businesses? The earnings story being fleshed out

later today on the banking story, You can get a roundup, of course, of the

stories you need to know to get your day going.

In today's edition of DAYBREAK, Terminal subscribers can go to D eight.

Why be go to get a deep dive there on what to look at.

Coming up, Israel vows to respond to Iran's attack over the weekend as the

West calls for restraint. We get the latest next.

This is Bloomberg.

Welcome back to Bloomberg Daybreak Europe.

We're going to check oil and gold for you right now.

The pricing action on the back of comments from Israeli officials

reiterating that they will at some point at least respond, of course, to that

unprecedented attack by Iran over the weekend.

Gold moving higher than the risk haven moves into gold.

The yellow metal continue up 2/10 of a percent so far in the session, trading

at 2387 per troy ounce. And the move in oil, it was less

pronounced this time yesterday, but you have seen the moves higher again on the

back of some of this commentary out of Israel currently above $90 a barrel on

Brent up 6/10 of a percent. Then of course, when it comes to WTI,

also moving higher, up about 7/10 percent, close to $86 a barrel.

Let's get more then on how the geopolitics is unfolding.

The US House set to vote separately on new aid to Israel and Ukraine this week

following Iran's missile and drone attack over the weekend.

Meanwhile, top Israeli military officials, as I mentioned, reasserting

that their country has no choice but to respond to Iran's weekend attack.

Let's bring in Bloomberg's a man news director now, Ross Mattison, for the

latest. Ross, is the risk then at this point of

an Israeli strike against Iran on Iranian territory, is that risk rising?

What might that look like? Well, certainly it is rising, as you

said. What we've got is the US and European

countries urging restraint on the part of Israel.

They're saying don't antagonize Iran further.

What you need to do is to isolate Iran here.

But with the commentary from Iran, from Israeli officials to the very top is

very clear, they feel that they have to retaliate in some fashion against Iran

for this weekend attack, which is the first direct attack from Iranian soil on

Israel. And they say that they have to respond

in some fashion. What that looks like is very unclear

when it happens is very unclear. There's a wide range of possibilities

here from a direct attack, as you say, from Israel on Iran.

That would not be unprecedented, but that's one option for them targeting

military sites, perhaps even nuclear sites in Iran.

Of course, there's a lot of concern about Iran's nuclear program or does it

go for something instead, like going for one of Iran's proxies in the region?

We're talking about the Houthis in Yemen.

We're talking about Hamas in Gaza, Hezbollah in Lebanon.

Do they go through one of those proxies to retaliate do that?

Do they do something potentially even in the cyber space?

There's a lot of options here from fairly small bore responses really to

something that would risk potentially setting off a further tit for tat with

Iran. And that really is the concern you see

from the US, Europe and others, is that do you get into this era where we're

basically back and forth constantly with strikes between Israel and Iran?

And as you say, that's exactly what the US does not does not want to see.

So where does that leave the position of the Biden presidency and those in

Washington, D.C.? That it leaves them in a really awkward

position because of course, the US is a key ally of Israel militarily,

economically, strategically. You name it.

And they've said they're steadfast in their support for Israel, especially in

terms of responding to Hamas in Gaza, in support against them, against Iran.

But, you know, you can only go so far. There's a deep, deep sense of unease

that's going on in the US about the possibility of that wider conflict.

So they're caught between they need to support Israel on the one hand.

And also they're concerned about a wider conflict because if that does happen,

not only do you potentially hit things like oil, you know, you hit supply of

some key commodities, but you risk pulling the US in increasingly

militarily to that conflict. And that's something that no one in the

US wants coming up to an election. So the really awkward position where

they're urging Israel to be restrained, but Israel is saying, well, we're going

to do what we need to do in this minute. How is all of this playing into that to

the debate domestically, at least politically in the US, around support

for both Israel and Ukraine? We're hearing of reports that the House

may move on on something by the end of this week.

How likely is that at this point? Well, it does.

And there's momentum to push towards those separate bills.

Basically, what the speaker is trying to do is separate out the aid for Ukraine

and the aid for Israel because there's possibly more support for supporting

Israel in this moment, sending fresh aid there.

Of course, the US has said they won't stop sending Israeli weapons or

supplying the militarily in this minute. Of course, the aid for Ukraine is is a

lot more fraught. It's been bogged down for months now in

Congress and there's a real sense of fatigue in the part of the US about

continuing to supply Ukraine with that aid.

And so what they're trying to do now is separate those out.

It does seem as though politically there's more support for Israel in this

minute and especially allowing them to be had to defend themselves against

Iran. So that will probably get through

easier, I would say, than the aid for Ukraine.

Bloomberg's Ross Matheson with an excellent update for us in terms of how

events are unfolding in the Middle East and the US response as well.

Ross, thank you very much indeed. Coming up.

Well, we're going to switch focus because over in parts of Africa, a

severe drought gripping at least parts of southern Africa.

Zimbabwe considering importing corn from Brazil for the first time in ten years.

We bring you the details of that story next.

This is grim, but.

Welcome back to Bloomberg Daybreak Europe.

Let's turn our focus now to the severe droughts in parts of southern Africa.

Zimbabwe is considering importing corn from Brazil for the first time since

2014, says the El Nino weather pattern with its crops in the country, Malawi

and Zambia, have also declared a state of national disaster.

Let's bring in Bloomberg's Ontario Ganga then, for the details.

He's joining us out of Kigali for the latest.

Don't there a corn, then a staple food, of course, across many of these nations.

What impact is being felt? Tom, at the center of natural disasters

like this of people, Insurtech is estimating that 20 million people are in

dire need of humanitarian assistance. They also say that the rainfall patterns

between January and March are the worst in 40 years, if we zoom in on Zimbabwe.

February was their driest month and nearly 80% of the country did not get

adequate rainfall. And this means that agricultural

production was hampered. Corn supply or corn production was

reduced by 20% in South Africa and 80% or rather 60% in Zimbabwe.

And the president took to a national televised address to tell them that it

will take at least $2 billion to combat the impact of this drought that they're

facing. You look at Zambia, inflation is also

high, 15.6%, mainly driven by the prices of cereals, bread and meat.

So what this just means is that these three countries that have declared a

state of national emergency, Zambia, Zimbabwe, Malawi, otherwise a

self-sufficient countries and this speaks of their defects of climate

change. So what are the options then?

The Millers are considering to offset this challenge.

There will be heading to Sao Paulo, Brazil, to try and get 300,000 tonnes of

grain. But this is just a drop in the ocean

because the country consumes about 2.2 million tons.

The good news is that because of the drought all the way from quarter four of

2024 to quarter one of 2025 production will be hampered.

So this will go a long way in covering supply.

But then again, it will have an impact on inflation because of the prices of

importing. Okay, So the inflationary impacts in

focus as well as maybe Brazil can offset some of the pressure across Zimbabwe and

other nations. So I can go with the lighter side on an

important story that's developing across southern Africa.

Thank you. Coming up, another big week for us.

Bank earnings with Goldman Sachs closing higher by about 6% after posting a

profit jump. Bank of America, Morgan Stanley.

Still to come, we look ahead at those bank earnings next.

This is Bloomberg.

Good morning. This is Bloomberg Daybreak Europe.

I'm Tom Mackenzie in London. These are the stories that set your

agenda. A surging dollar bulldozes through Asian

affects. The region's stocks also take a big hit

following a big tech selloff on wall street.

The fed's mary daly says there is no rush to start cutting rates.

China's first quarter GDP growth beats expectations, but retail sales and

industrial output disappoints in March, suggesting a slowdown is already

underway. Plus, Israeli military officials say

they have no choice but to respond to Iran's missile and drone attacks.

This as the US House prepares to vote on new aid to Israel and Ukraine.

Let's check these markets then on a downward day, it seems, in terms of the

futures pointing lower across Europe and the US.

The down day, of course, of course, US stocks yesterday pronounced with big

tech, as we said, in the headlines, selling off the S&P closing by 1.2% back

below that 5100 level on stronger US data, reinforcing those higher for

longer rate expectations. Of course, the geopolitical overlay

continues to be that as well. European futures pointing lower by a

full 1%, a little over 1%. In fact, looking at a drop of 55 points

so far, Footsie 100 is looking lower by a 1% as well, looking to drop around 80

points so far in the session. The footsie 100 pointing to 7899 S&P

futures one led by about a 10th of a percent.

NASDAQ futures currently flat, so reversing some of the earlier downside,

but still pointing to further losses. To build on the picture of yesterday,

let's flip the board cross asset. We also saw a sell off across US

treasuries with the two year getting close to 5%.

The ten year yields up nine basis points in the session yesterday, 4.6 currently

on the US benchmark right now. We talked about dollar strength in the

headlines. Going to unpack that story for you as

well. The pound in focus 124 little bit of

pressure coming through marginally likely down to what's happening with

stronger dollar down a 10th of a percent on the pound.

But we will look for that data as well on wages and jobs.

7 a.m. UK time and then inflation data out of

the UK on Wednesday Brent above $90 barrel, closing in 91, up 7/10 of a

percent on 110 points currently and down 1.2%.

And arguably you can tie that to the mixed data out of China.

Let's talk the story then and bring in Mark Cranfield right now from Bloomberg

and live, the strategist that Mark talked to us about, the dollar strength

that's coming through. Is this a risk haven move into the

dollar or is this on the back of stronger data and expectations that

rates are not going to be cut anytime soon?

Was it a combination of the both? Yeah, all of the above.

It was the dollar was already strong coming into Asia this morning, as you

say. We've had pushback from Federal Reserve

speakers. It looks as though it's going to take

longer for that for them to to lower interest rates.

Retail sales was the latest in a series of strong data prints from the United

States. So we came in this morning with with

dollar yen especially very, very strong, about 154 that just lifted dollar Asian

markets across the board. And then China's fixing came in and they

allowed the yuan to weaken as well. And that was just the icing on the cake.

So off the back of that, we've seen the Indonesian rupiah, the Indian rupee,

Thai baht, Korean one. They've all just been tumbling one after

the other and Australian dollar Kiwi as well all coming down as well.

So it's just really been across the board.

That also fed into the equity markets as well.

They're already pretty nervous anyway after a rough night for Wall Street last

night. So we've got a sea of red across Asian

equities and it's just one thing feeding into another.

Of course, we've got the Bank of Japan meeting next week, which is now becoming

a lot more interesting than maybe it was just a few days ago.

Because, Governor, your data from the Bank of Japan has said that the yen

feeds into inflationary expectations in Japan.

That is not something that was set by previous BOJ governors.

So clearly the yen is on his radar. The Ministry of Finance have been pretty

quiet today. Haven't said too much about it.

Maybe there's some kind of pact coming up between the two of them, Whichever

way it is for now, traders are not being put off.

Some people are even talking about 160 in dollar yen.

But that's one thing's for sure. Foreign exchange markets are alive and

kicking and that's where the action is today.

Hmm. Yeah, they certainly are.

Indeed. And on the story of the yen, then, is it

the experts say you touched on this, the view that maybe you get to 160, some

even saying 170. Is the view then simply the intervention

will not work at this point? Well, they have a bit of a problem here.

I mean, it's not to say that intervention wouldn't work, but it's how

far would it go, because the big difference, October 2022 was the last

time that the Japanese successfully intervened to strengthen the yen.

What they had in their favor at that time, they caught the market a bit by

surprise. But probably more importantly, US yields

were coming down at the same time. So you had a negative impact from the US

side and you had the Japanese side improving as well.

So I put the two together. It helped Dollar End to come down quite

a long way this time around. If the Japanese authorities do decide to

support the yen, they're completely on their own because we've seen in recent

days that the Fed is pushing further and further away in terms of lowering

interest rates. So there's no help from the US side at

all. And certainly the idea of coordinated

intervention is certainly not on the table at all.

So if the Japanese go ahead that after intervening very large, they might get

some strength out of the yen, but probably not as much as they got two

years ago. Okay.

154 on US dollar yen dollar yen right now Mark Crumpton.

With a brilliant deep dive on what is rippling across these markets this

morning. Mark Cranfield, of course, with the

analysis. Thank you.

Now to the bank earnings story and the season, of course, in terms of the

earnings picture continues with Bank of America Morgan Stanley due to report

later this after of course Goldman Sachs shares closed higher after the lender

posted a surprise profit jump in the first quarter.

Very good about our first quarter results, which reflect the strength of

our world class and interconnected franchises and the earnings power of our

firm. This performance was aided by the swift

actions we took last year to narrow our strategic focus and play to our core

strengths. Okay.

Let's bring in Bloomberg's Charlie Wells then for the analysis.

Charlie, how did Goldman Sachs manage to come through with such a solid beat the

drivers for Goldman. Yeah.

So, look, their driver here really was a return to basics.

And so we heard David Solomon there talk about how they made swift action, how

they really need this turnaround from really trying to push into retail

banking. And last year really was an execution

year for the bank. And we saw them just go back into core.

And when you look at these core units, it's hard not to find an area where they

beat. So in fixed income trading, they beat

revenue. There was $4 billion, equities trading

$3 billion, investment banking fees, a beat as well of $2 billion coming in.

We've got M&A fees, $1 billion, and then their wealth management unit, which is

what these banks really want, it brings in those stable fees kind of almost in

any environment they beat as well, bringing in revenue of $4 billion

almost. We got Morgan Stanley, Morgan Stanley,

Bank of America reporting later. Morgan Stanley also obviously a very

close rival for Goldman Sachs. I just wonder if they can replicate the

kind of results. What are you the team going to be

scrutinizing from those two lenders? Yeah, so a little bit more difficult of

a news cycle for Morgan Stanley. And so they've been talking about some

pressure in their wealth management unit.

Ted Peck, who just took over in January, he's called wealth management the engine

of Morgan Stanley, but it's been under a little bit of pressure with inflows,

some profit margin pressure. So that will be really interesting to

watch today. As far as Bank of America, the

expectation is that it looks a little bit similar to, say, Wells Fargo or J.P.

Morgan, who reported slightly disappointing earnings last week, in

particular on net IT net interest income.

So that's coming under pressure as consumers seek to get more in their

deposits, as there's more competition in that deposit space for where they put

their money and potentially Bank of America having to pay more to keep those

deposits than they get from lending out money.

Well, coming to the last leg then, of the earnings season, when it comes to US

banks, what is it what are the kind of the big takeaways for you?

Yeah, Tom, I would say that, you know, the message we're getting from some of

these banks is kind of a return to the old normal.

So that old normal where, you know, net interest income wasn't getting this huge

boost that it was getting from rates. A return to the old normal that the

likes of Goldman Sachs, where they're really focusing more on core and the

return return to maybe the very old normal for consumers where they thinking

about maybe the 1990s when consumers were very used to, you know, competition

for where they were going to put their deposits for competition over rates, you

know, that sort of a return to an old normal, which we could potentially see

as we hear, you know, inklings that the Federal Reserve may not be cutting rates

as much as markets had priced in earlier this year.

Charlie Wells, thank you very much indeed.

Breaking down the Goldman Sachs beat that came through yesterday.

And looking ahead, of course, to Bank of America and Morgan Stanley, what to

watch for later today. Touched on the Fed, of course, New York

Fed president. Meanwhile, John Williams believing that

the US central bank will likely start cutting rates later this year if

inflation if inflation continues to gradually ease.

He also discussed resilience in consumer spending in an exclusive conversation

with Bloomberg TV. Consumer spending has been strong.

I think it is driven by strong fundamentals.

Job growth has been solid. We've seen real wage gains.

We're in a pretty strong economy with good growth.

So, yes, it is part of that story. But, you know, I think what we're

realizing is we're getting a nice tailwind from the supply side of the

economy with good labor force growth, strong productivity, good real wage

gains. So with that, I think, you know,

consumers are spending. What's the thinking in your office and

among your colleagues about does this last or is this a surprise that you

think could go away at any minute? Well, one thing that makes it really

hard to forecast is we're still feeling the effects of the the after effects of

the pandemic and Russia's war in Ukraine and all the things that have happened in

between. So we're definitely still seeing an

adjustment process by the consumer, by in the economy overall.

But, you know, overall, I think that the economy will continue to grow at a solid

rate this year, probably not as high as the 3.1% we saw last year, but something

like 2% or around that. So I feel like we're still in a good

place, probably not as rapid a growth as we saw last year.

You do have the strong growth, you have very low unemployment.

Why cut rates if the economy is doing fine at this level?

Well, first of all, I think monetary policy is working at the rates we have

now. So I think I think monetary policy is in

a good place over the past 12 to 18 months.

We've seen all pretty much all the measures of imbalances in the labor

market enter our economy, recede, many of them back to levels we saw in 2018 or

2019. So we're seeing that restoring balance

in the economy. We are seeing a slow decline in

inflation. So I do think monetary policy right now

is in a in a good place. I'm not fixated on where do rates need

to go over the next year. What I'm focused on is how do we best

achieve our maximum employment and price stability goals?

The data we're seeing show that the economy is strong and that's really good

news and labor markets strong. At the same time, we are getting a

better balance and we're seeing some decline overall in inflation.

So for me, it's really about getting that right.

And then whatever we need to do to adjust monetary policy, we can do to

best continue the progress towards our goals.

So that's how I'm thinking about it. And we just have to keep watching the

data and make the decisions based on those goals.

Well, is your base case that you will cut rates this year?

My own view is I think that with inflation continuing to gradually come

down and I guess I would say gradually is the operative word here and with the

economy remaining strong, I do think that given where the level of rates are,

real interest rates now are considerably higher than they were before because

inflation has come down quite a bit. So we will need to start a process at

some point to bring interest rates back to more normal levels.

And my own view is that we will you know, that process will likely start

this year, but again, it will be driven, driven by the data and achieving our

goals. New York Fed President John Williams

speaking to Bloomberg exclusively. Coming up, our next guest says fintech

is back on top as the UK's most funded start up sector.

We discuss the future of the industry with Aaron Platz, CEO of HSBC Innovation

Banking UK. That is next.

This is Bloomberg.

Welcome back. Now fintech is back on top as the UK's

most funded start up sector, according to analysis from HSBC Innovation,

Banking and M&A database Deal Room, A $1.4 billion 1.4 billion was raised

across 73 rounds in the first quarter for the details and is bringing in

Implats CEO of HSBC Innovation Banking UK.

We love speaking to you. And because you really have a finger on

the pulse in terms of the flows into into UK tech.

So talk to us about what you've been seeing kind of on a granular basis over

the first quarter. So Q1 actually pretty, I would say

stable, strong starts at 3.9 billion has been invested into UK tech and that

recalibrates us really kind of back to 2020 pre-COVID run rate.

And that still leaves us firmly as number one in terms of the European

ecosystem. 3.9 is actually almost more than France

and Germany combined in Q1 and of course firmly third globally as an innovation

ecosystem and fintech standing out again, what is the what is the appeal of

fintech? What is drawing the funds into that

particular segment of UK tech? Yeah, so 2023 three was very much the

year of sort of gen AI and climate tech. And so it is nice to see fintech back on

top. You know, London and the UK very much is

a hub of financial services, various types of asset managers,

insurance companies, so that talent, but also the procurement and investment into

fintech just creates a lot of amazing companies founders spinning out.

I mean, that's what's attracting both domestic and international capital into

into fintech. So coming back to some of our natural

strengths, arguably, and you talk about Gen AI and some concern, some

hand-wringing by the end of last year that it was looking a little frothy in

terms of the fund flows. What are you seeing?

Is it because you can was there a frothiness to it?

Is it becoming a little bit more rational?

Are those fund flows continuing? How is the picture for the UK when it

comes to. Yeah.

Yeah. So you know, frontier tech are deep tech

let's call it which includes Dannii semiconductors Quantum is still is still

seeing a strong amount of investment. We're still seeing in a pretty let's say

substantial valuations. But this is a paradigm shift for our

industry. So I think that we'll continue to see a

lot of money going into Gen I. I think the UK is really well-placed in

terms of talent. It's great to see Microsoft announcing a

hub in London with respect to some of their development.

So I would continue to expect a gen AI to outperform in terms of attracting

capital, you know, whether it's know how frothy is it, you know, what time will

tell, I suppose. And what is the what is the global

nature then of the fund flows into the UK.

Yeah. So this, this actually was a surprising

part of the report for me. So we've always attracted huge amounts

of international capital and that's really important to have that mix of

international and domestic capital. But I looked at the data over the last

15 years and what we ended up finding is the proportion of domestic capital going

into the UK is quietly decreasing. Q1 actually had almost 40% of the money

going into UK startups and scale ups came from the US, which is the highest

we've seen. Again, in terms of the data that I've

been tracking for 15 years. So for me it's something to keep an eye

on. We really want that US experienced

capital and international capital in the UK, but we also want to see the domestic

funds thrive. Okay.

And in terms of the in terms of the various stages of funding and you break

this down as well, early stage versus late stage, you talk about I was

interviewing Nell Hurley, the CEO of a company called Littoral Labs yesterday,

a spinoff of Newcastle focused on I, I just want to take a take a listen to

what he had to say in terms of late stage funding and the challenges here in

the UK. One of the biggest challenges in the UK

is we have all of this fantastic talent here and yet we don't have we don't have

a microsoft, we don't have a Google. And why is that?

In most cases, it's almost institutionalized now that startups in

the UK end up opening a presence in the US and move in that for that scale in

capital. I think that's one of the challenges and

if the Government's going to address anything, it needs to address that gap.

Is that is that a valid concern, talking about the fact that it's almost default,

that UK startups will go for that late stage funding to the US?

And if it is valid, what are some of the prescriptions that the government and

others might look to? Yeah, I think on this I think Noel's

right, but I think we should break it down to public access to public capital,

access to private capital. We've seen a huge amount of growth in

terms of that growth capital from a private markets perspective be available

in the UK now that the source of that capital is very much international.

But I do think Noel's right and the data does support most companies in the

innovation space will look to the US to list.

There's a few things I think structurally that we need to continue to

work on as an ecosystem. The conversations around the Mansion

House reform that's unlocking pension capital to be deployed into both public

and private markets will very much help. I think this is a point in time.

I mean, I've been in this ecosystem for 17 years and this size and scale back 17

years ago versus where we are here is night and day.

So I'm pretty optimistic that we will have over time, a really robust, robust

public market for innovation companies. I just am not sure that that's going to

really change in 2024. Right.

Yeah, it seems like a long a longer term, a longer term issue.

And clearly the government has got this in its sights.

But whether or not enough is being done and quickly enough is another question.

You talk to us about the fund flows in the first quarter, then as you and the

team look ahead to the second quarter and beyond this year, what is the focus

on? So I, I believe that the UK ecosystem

should be about a $20 billion market in terms of per annum.

There's enough amazing companies. Even though we heard from Noel, there's

great founders, great technology. Early stage has been robust.

Now we'll need to see a bit of an unlock in the second half of the year to hit

that run rate. I'm still optimistic, but things around,

you know, interest rate reductions if that happens, is helpful.

Again, we've talked about money. This venture money is time bound.

And the anecdotal activity that we're hearing from our VC and PE partners is

there is a lot of velocity with respect to term sheet.

So we'll see if that converts into investment.

But there's definitely enough quality to really, really interesting.

Always smart on the tax base. Bring us the analysis.

Thank you very much indeed. The CEO of course of HSBC, Innovation

Banking UK. Now for some of the other stories making

the news and with an eye still on the tech space, the chief of Google's A.I.

business says the company will eventually spend more than 100 billion

more than $100 billion developing A.I. technology, another sign of the

investing arms race that's gripping Silicon Valley.

That was Demis Hassabis, of course. Meanwhile, Donald Trump's first criminal

trial got off to a slow start with the proceedings stalling over disagreements

about evidence and other last minute arguments.

Jury selection didn't kick off until the final hours of the day, as the former

president's lawyers argued with prosecutors over which evidence will be

admissible. More than half of the first panel of 96

potential jurors had to be excused after saying they could not be impartial.

Plenty more coming up. We're going to preview some of the data

out of the U.K. drops at 7 a.m.

what it means, of course, for the boat. That is next.

This is Bloomberg.

Welcome back to Bloomberg Daybreak Europe.

Happy Tuesday. We have some data dropping 7 a.m.

UK time so in a little under a little over 5 minutes time on wages and of

course the jobs picture here in the UK that's ahead of inflation that drops on

Wednesday. So rounding out the picture in terms of

what we can think about when it comes to the board's next steps, we know that the

services component of CPI in the UK has been relatively sticky.

A lot of that is down to the wages story.

There is an expectation that wage day to day is going to come in a little softer,

but you can see the white line is the weekly earnings, three month by three

month. That's the white line.

You can see that just a little below six right now.

Services CPI remaining a little elevated then in terms of being above six.

So it's the wages continuing to keep the services pot higher.

You need to see arguably a breakdown in the wages within services to see that

component come lower and the to take a little bit more comfort.

Let's split the board and have a look at what it means when it comes to the jobs

picture. And frankly, it's a bit confusing given,

of course, that we are working through a new statistical format and the surveys

have been challenged. The labour, of course, labour force

surveys that have been coming through. And there's this gap, as you can see in

terms the blue line and the white line between the labour force survey,

unemployment rate and the experimental data and a gap of between 4.2% in terms

of the unemployment or 3.9%, where are we in reality remains a bit of a

question. So in terms of the unemployment data, it

remains still a little bit confusing here in the UK as they try and work

through some of those changes. What this all means, of course, for the

BBC and as I said, the CPI. So the inflation print that comes

through on Wednesday is going to be really important, of course, to that as

well. Let's flip the board and have a look in

terms of how we've adjusted around the expectations of just two cuts of 25

basis points each. That's the green line compared to just a

little over one for the Fed, but still on three for the ECB.

So that's how the three major central banks here, of course, are lining up the

BOE in the middle. Still, expectations of two.

The data today will help inform whether or not that is reality or realistic.

I should say a remind going to speaking, of course, of the UK's Chancellor of the

Exchequer, Jeremy Hunt, on the outlook for the British economy joining us 7:10

p.m. UK.

Time for that. Up next though, markets today with Kriti

Gupta and Guy Johnson. This is Bloomberg.