Transcripts For BLOOMBERG Bloomberg 20240703

The stories that set your agenda. 100 dollars a barrel march continues as the u. S. Oil benchmark its a oneyear height with stockpiles and hitting one year at levels and fears around and inflation uptick are growing. Especially in asia where stocks are under pressure. On the docket german and spanish inflation data, one more puzzle piece on what the ecbs move might be on when traders bet on a rate cut next july. Plus italy plans to bring its budget deficit below the limit set by the eu but only in 2020 six. The delay risks a confrontation with brussels. A lot of a cross currency air. A lot of different market pressures lets get a quick check on the market futures because like i said you are seeing a pullback in those asian equities. A lot of pain in the nikkei and the hang seng. We will get to that in a moment but futures indicating that that is not a global story just yet. The underperformer of the board will be euro stocks, 50 futures really unchanged. I would not call this a big move. The outperformer ftse 100 futures. There has been this interesting dynamic where lately the u. K. Stock index have actually been underperforming its peers and i want to say the last two weeks or so. The see a reversal that usually means that perhaps technicals are at play in the absence of any fundamental news. A quick check on u. S. Benchmarks, we are not seeing much action right now so i wonder how much is at the whim of some of the data were going to get later today. Which again brings me to the bond market and the currency market that will be a cute crucial age to watch for treasuries but also when it comes to how you play the dollar trade. Art those dollar bulls in control right now, that is a key question. The 10 year yield for 59 is what we will call it on that note, down about only one basis point. Eurodollar on the other hand stronger. Is the dollar trade this morning being driven by the guild story . It does not feel like it at the moment but what i will say is that the euro and the aussie are going to be your biggest contributors to the bloomberg dollar index because those are the Currency Pairs you want to watch and brent crude trading at 97. Which brings us to the asian market story. Read on the screen in that part of the world, nikkei taking it on the chin. It is not looking good. The nikkei 225 down about one point 7 you are also seeing continued weakness in the japanese yen. We are getting closer to the 150 level that prompted currency intervention about a year ago. 149 33 on that, but also dont forget about china. We are continuing to see a selloff accelerate in the hang seng index down about 1. 1 at the moment. Heres where you are not seeing the translation, and copper. The move lower is more muted and if you were to compare it to the copper index you are seeing copper outperform the chinese index where as they used to move hand in hand. That is a dynamic you want to keep an eye on. That is your market check, time for our top stories of the day with our reporters from around the world. I am joined by steven and david. And Valerie Tytel here in london. Stephen lets start with you and talk about this massive oil move. We have been talking about a hundred dollar barrel on the horizon, talk to us a little about what happens when we heat 100 . Is it just a round number . Stephen i think there is a mental mentality involves an hate we are above 100 a barrel. People are going to look at inflation. One thing that has been interesting is that opecplus, russia and saudi arabia havent held strong with their Production Cut and have been cutting production by one Million Barrels a day and will continue through the end of the year. At the same time u. S. Shale drillers have not really been coming back, they have not been bringing rates back on shale fields boost production as much as we would haves expected. Once we hit that 100 dollar level expect more governments calling it out. Expect the Biden Administration calling for drillers to come back, maybe for saudi arabia to provide relief to the market which they did last year. You should also look at demand. How is this going to affect consumption of gasoline, a product of crude oil. There is this idea that the economies in the u. S. And china are resilient in and the demand has been steady but once you hit 100 and we see gasoline prices at the highest level in over a year it could affect people in how they travel and how they consume fuel. Those are two things to watch of course and look at inflation. If inflation starts to get wild you might see some governments step in and perhaps in india, to subsidize oil by providing subsidies for consumers. That might also help stabilize demand even as prices rise. All of that together does show that 100 oil will mean something for producers as well as consumers. Kriti i think what is so striking to me is that it is coming at a time where we are seeing Dollar Strength across the board as well she tells you that that oil move is Even Stronger coming across the fx venture. A final question about the broader commodity complex, where as you are seeing that upward pressure in oil you are not necessarily seeing it across the board. Is that idiosyncratic or is that a disconnect in the market . Stephen i think when you look at oil, oil is very much driven this time, compared to last or a little different, but definitely driven by the fundamentals. Oil is being driven by lack of supply. Market. Lets look aghast for example. European gas prices while they have been volatile are down 90 from last years record high and that is largely because if you look at storage, in europe gas storage is quite full. 95 full going into winter, copper prices also coming down. And there is some question about whether iron ore and or will be able to stay at its current level due to questions in the chinese economy and questions about chinese property sector. It does look like commodities are largely being driven by fundamentals which is honestly the way probably should be. Kriti in theory but then you have the disconnects like i highlighted earlier in the copper market. Bloombergs editor reporter over the entire commodity market we thank you for your analysis. And of course what happens in commodities is going to have a read through in the fx and rates world we are talking about what that means for inflation. While there are clear fx trades at play this morning, you are already seeing the swiss franc for example and british pound in oversold territory in just the last 24 hours. Does that mean the euro is back in focus . David is joining us, our fx and rates strategist over in singapore. Is the euro back in vogue . David i think it is certainly in vogue today and tomorrow in the main reason why is eurozone cpi comes out tomorrow and today you had german and spanish cpi which were precursors for it. If that data comes in weaker than expected i think the market will quickly go ahead, the ecb has peaked. It has reached its terminal weight rate and they will unwind any expectations for an additional hike. It will add pressure to the euro and push it below potentially 184 84 which is this year low which it could be new territory. If it goes there markets could see stocks under their if triggered it will add to the selloff of the euro. Given euros waiting in the bloomberg dollar index, all of the dollar index in the biggest waiting in both, if the euro begins then by default the u. S. Dollar appreciates. While the dollar might not be getting any benefit today from high u. S. Yields because they have stabilize today, it may actually end up advancing on the day if the euro which is lower on the inflation data. Kriti that is a lot driven by the inflation story which you mentioned we are getting the data later today. What about the fiscal story. We know that italy, france, even spain the budgets have been in question. How much of that is priced into what you are seeing in euro dollars . David i think that is another factor. Anytime there are fiscal deficit problems it will not be a positive for any country or currency. I think it is not the main driver, more with inflation. With the ecb at think its a bigger driver but adding to the euros headwinds, so certainly not a positive and adding to pressure on europe and helping it push down. Kriti a lot of Different Things for them to watch for, especially with the fiscal and monetary coming headtohead. Our rates and fx strategist over in singapore, thank you. Lets continue with that theme and bring in valerie. She has been all over the italian budget story. What is the readthrough here, what to markets need to know . Valerie i think the conclusion was it was not as bad as fears feared but it was bad. The projections, she upped the 2024 budget deficit from 3. 7 to 4. 3 however it was rumored that it could go as high as four and a half. So it may be some relief but it might be too early to tell. It is still way above the eus 3 limit. It doesnt risk a confrontation with brussels. But probably more importantly it risks a confrontation with the market. Italys budget deficit has now been above the eus 3 level for a targeted six years. If they dont bring that back to sub 3 by 2026, it a shot way above that in 2020 bring a total of six years of breaking this eus rule. The government is trying to square the circle of keeping these promises of these generous election promises, mostly tax cuts versus strained public finances. It has has had a hit to btps in september as we were wary of this budget plan. Btps bloom spread which essentially measures the riskiness of Holding Italian debt over german debt, why didnt 30 basis points in september alone and is just shy of 200 basis points. Kriti and what happens then if those election process promises are capped at the risk of widening that deficit more, Valerie Tytel all over that italian story which markets are going to be watching closely. On top of that lets look at what were going to get in terms of the day ahead because markets are also watching crucial data coming out of germany. That 1 00 p. M. U. K. Time we will get german cpi and spanish Inflation Numbers coming out later. The question here is is the sick man of europe indeed going to see a bigger deceleration in the inflation story, how does that factor into the ecbs puzzle of what they are going to do next . It is a similar story across the atlantic when you look at u. S. Gdp. We are going to get that as well and that is going to be crucial as we talk about just how much growth is in the economy. And how fast is the pace, 130 p. M. U. K. Time a little more insight into those numbers. The big indicator will be what kind of tone and chair powell sets in the Monetary Policy story. We are going to get some comments from chair powell hosting a town hall at about 9 p. M. U. K. Time. We will give you all the live updates as we get them, right here on Bloomberg Television. Those are just some of the top stories you can get a full round of of what you need to know to get your day going on todays edition of the debris terminal, type in dayb under bloomberg terminal. You are going to get a slew of new stories, some of that is going to be oil, some of the updates on that sec whatsapp settlement and of course what j. P. Morgan is blaming for the selloff you are seeing in u. S. Equities. Definitely something to turning tune into. Coming up ron desantis valves a hard power approach to china. We are going to get more on last nights Republican Debate ahead of the u. S. President ial election next year. Stick with us, this is bloomberg. Welcome back to daybreak europe, lets turn to u. S. Politics and last nights Republican Debate. Ron desantis did invoke former president Ronald Reagans name. A move that is often seen as a way to win gop votes all as he pledged to take a hard power approach to china. Take a listen to what he had to say. We need a totally new approach to china. We are going to have real hard power in the indo pacific like reagan to deter their ambitions. Were going to have economic independence from china. Kriti joining me now is jail, there is a lot going on right now. Lets start with the debate. A lot of hot topics. President trump noticeably not there. What was your initial take of how that debate went down . Jill i think at this point, a lot of that debate was really focused on controlling the border. We did have ron desantis weigh in on china. I think nikki haley had the singer of the night responding to some comments about his affinity for tiktok. But ultimately i think a lot of this comes down to domestic issues within the u. S. What is happening along the u. S. Mexico border. You had some candidates talking about absent former president Donald Trumps inability to build a wall across the entire border, talking about what they would do there. A lot of times these types of things come down to those domestic policies and how that is going to shape up. I think especially when youve got such a big part of the Government Shutdown debate happening, questions around immigration and the border, thats why a lot of these things are being driven home on the debate stage as well. Kriti expand a little on that shut down story. The Sticking Point is that border crisis. What exactly is the hold up . Jill i think at this point a lot of this comes down to Republican House speaker kevin mccarthy. He obviously wants to create something that gets more border wall funding within funding budgets for the u. S. Government. He is really into trying to push the Biden Administration to take more of a hardline approach to immigration. There is some foreignpolicy pieces in their, ukraine spending, the republicans want to pull that ukraine spending which the Biden Administration does not want to do. At this point it seems like mccarthy is really the one that does not have a whole lot of leverage to operate with here. This is not exactly the same as what we saw with the deficit debate earlier this year. A Government Shutdown is really something the Biden Administration, the democrats think they can weather more. Especially when youre dealing with the shortterm Government Shutdown. It is not as immediate of a consequence to the economy so pushing ahead to the saturday midnight deadline the democrats are more willing to say we are not going to cave on some of these deals and youre actually starting to see on the republican side this growing idea of bipartisanship. The senate is not taking the same hardline approach that mccarthy is taking. We will see how this develops but ultimately mccarthy does not have that leverage their. Kriti a complete turnaround from what you saw on those deficit talks, thank you for that crucial context. We should stick with some of the main topics around the d. C. Story. The United Auto Workers on everyones mind and the union saying they are planning to expand strikes against detroit carmakers friday if major progress is not made in the negotiations. Walkouts at those plants are operated by gm, ford and stellantis and have been going on for two weeks. Even though joe biden was making the first appearance for any president on picket lines, he has been the one that has been vocal about pushing ev policies on carmakers. At the end of the day have been proven to be Sticking Points in negotfrom the u. S. Department of Justice Reportedly stepping up its probe into Credit Suisse and ubs over suspected compliance failures that allowed russian clients to evade sanctions. Joining me now is hugo miller. Good morning, what do we know aboutobe . Hugo essentially the doj in the aftermath of the ubs takeover of Credit Suisse saw a real opportunity, perhaps a perception that Credit Suisse was vulnerable and weak and distracted, to try to get some hard information out of them. To essentially step up the probe and they began doing so by calling in and sitting down with Legal Counsel for ubs. The parent bank of Credit Suisse to show what is the worst Case Scenario here in terms of the settlement, legal charges, how much could this hurt ubs . Hugo i think it is too early to quantify or to try to even guess at that. We have stressed in our reporting that this is a definite stepping up of the probe but it is still at an early stage and there is no guarantee this could result in any civil or criminal charges. Or even proceed down the road to a settlement. But there is precedent for massive fines to be handed down in the event of sanctions violations. The doj find, if i recall some 8 billion, when they pled guilty to sanctions violations related to sudan. That is not to say the Credit Suisse or ubs is guilty or going to plead guilty but there is precedent for massive fines from the doj. Kriti hugo miller with that update from geneva, joining us this morning. Thank you for joining the program. I want to stick with the theme of regulatory crackdowns, the u. S. Sec reported to be finalizing settlements to resolve probes into lapses in recordkeeping when it comes to wall street firms. According to reuters the settlements are with Investment Advisors and brokerdealers at about two dozen companies. The latest action in a twoyear crackdown on the use of whatsapp as well as other messaging apps. Fines i have already talked about 2. 5 billion. Coming up on the program meta is rolling out chatgpt like Artificial Intelligence features to its apps. We are going to bring you everything you need to know on that front next, stick with us. This is bloomberg. Kriti Meta Platforms is introducing Artificial Intelligence features to its app that it claims will give its companies 3 billion users and experience akin to chatgpt. Mark zuckerberg says the innovations will be rolled out across instagram, messenger and whatsapp. Mark our view is that people are going to want to interact with a bunch of different ais for the Different Things that you want to do and i think over time a lot of you will want to make your own ais to advance individual goals you have whether you are a Small Business and you want to interact with customers or you are a creator and want to engage your community or whatever you do. Kriti at the same time metas Global Affairs president telling bloomberg originals more about what to expect from a eye Meta Platforms. Take a listen to what he had to say. Ai systems are now increasingly generating content. One of the things we are working on is how to make sure that people can distinguish between the origin of something which is generated by ai rather than generated by human beings. We will have visible clear watermarks on the photorealistic imagery that people will be able to use in something called imagine which is our photorealistic tool integrated into meta ai. Kriti now for some of our other top stories we are watching, macron is going to be at the top of the agenda. One of the major Market Movers in the overnight session in the u. S. In overnight trading, down almost over 4 after hours. This comes after they are sayine are watching as well. The other is nike. They are reporting after the bell today in the u. S. Session. What is porton to keep in mind is that nike has a real readthrough or Temperature Check for what is going on in china and europe as well. During pandemic it was reported that it took about 80 days for a pair of air jordans to get from china to the United States. Now as supply chain issues has improved that number is now down to 40. Does that perhaps mean that demand is better and supply chain issues have gotten even more improved . Those are questions we will be asking at those earnings calls will bring you updates on Bloomberg Television and radio. Another story near and dear to my heart, after more than 50 years washington d. C. Pandas are leaving and maybe for good. Giant pandas are everywhere at d. C. s national zoo with three living in the 50 million asia trail and panda teachers, trucker hats, refrigerator magnets for sale. But the three pandas are set to return to china by december after the expiration of a three Year Agreement with beijings wildlife agency. A sad story for a lot of americans, i myself on my 20th birthday went to see them and they were a pleasure to see. I will bring you all of the developments as we get them. Coming up, price cuts. Wyatt London Property sellers are boosting home discounts to their highest since 2019. The story on the u. K. Housing market continues, how much of a tough time does that make for Andrew Bailey over at the boe . We will bring you the update about the day that you need to know, the trends you need to know and maybe even how to improve the situation. You want to stick around for that segment next, our u. K. Correspondent lizzy burden joining me here on set. This is bloomberg. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, i said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. I was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Kriti good morning, welcome to debris garrett. Lets get to the stories that set your agenda. The march to 100 a barrel continues as the u. S. Oil benchmark hits a oneyear high. It stockpiles hitting critical levels, fears around and inflation up to growing. Asian stocks under pressure partially because of that reason. Now on the docket german and spanish inflation data coming out this morning, one more puzzle piece on what the ecbs next move might be on trip as traders bet on a rate cut. Plus italy plans to bring its budget deficit below the limit set by the eu but only in 26. The delay risks a confrontation with brussels. A quick check on the markets because there are a lot of crosscurrents we have to watch. I want to start with futures trading, green on the screen across the continent and the u. S. An interesting dynamic, splitting it apart from what you are seeing in the asia session. Notice, the outperformers you are seeing an ftse 100 futures higher by 3 10 of 1 were as u. S. Futures and even u. S. Stocks futures only higher the u. K. Index has been the recent underperformer said to see that outperformance really tells you may be it is just a reversal of your usual trade. I want to go cross asset because Monetary Policy, fiscal policy really a part of the conversation this morning in asia. And europe as well. 10 year yield at about 458, you are seeing a bid into the bond market which makes sense because the 10 year yield had a nine to 10 at basis point move upwards overnight. Paring back the moves you are seeing in the u. S. Session, in theory that should begin the dollar a little which is why you are seeing that a normal strength in eurodollar and aussie dollar as well. The aussie story is interesting because very connected to the commodity story. We are going to bring you an update there. Speaking of brent crude on its march 2 100, 97 is where we are out this morning. In asia a different story. Seeing a lot more red on the screen specifically when it comes to the nikkei down 1. 5 . As the yen gets closer to that key 150 level. About a year ago this is what prompted currency intervention by the boj. We see that again or to they let this slide, we will find out. Some continued weakness in the hang seng down about 9 10 of a percent. This morning copper, not getting the message. At the divergence between chinese stocks and the commodity story getting wider and wider. Which brings us to our first reporter this morning, stephen is all over the commodity story. Crucial at a time where we talk about the 100 oil. Do we get there . Stephen it is looking more likely than not that 100 going to be hit. When you look at the way the marketin the United States Oil Inventories have dropped to the lowest level at a key hub in over a year. At the cushing Storage Facility you are announcing oil at 22 Million Barrels, that might not seem like that might seem like a lot but it is a critical level. It cannot operate if it falls lower than that which means there is not storage available. If you were to buy oil from cushing it would be expensive, it might be mixed with water. It would not be very pretty. That is playing out around the world so when you look at this situation, opec has warned that there will be a 3 million barrel a day deficit in the fourth quarter. And opecplus is already Cutting Supply through the end of the year. Saudi arabia, russia Cutting Supply by one Million Barrels a day. So at the moment, all the signs are pushing into a tighter market that could hit a hundred dollars. You are seeing a lot of option calls being made above 100. And there are some, not brent but there are Different Oil benchmarks that are already trading above that level end products have been four months. So that is something the market is watching closely. Kriti there will be repercussions both in terms of Monetary Policy and the president ial election going into next year. 100 can be a scary number, stephen all over that oil story. Thank you for joining us. I want to bring you breaking european data, we are getting the north ryan cpi numbers for germany in the september number rising about 2 month over month. You are not seeing any Immediate Reaction when you look at eurodollars but we are going to get some crucial analysis that we see with maria, a slight weakness in the euro but nothing to write home about. Maria joining us in a few moments to break down what we need to know. In the meantime we go to the u. K. A report suggesting that more than 20 of mortgage holders are considering selling up after the surgeon borrowing costs. Joining us now, lizzy burden is all over this. We kind of knew this, we knew that higher rates equals weaker Housing Market in theory. Talk to us about the extent of the pain here . Lizzy these are shocking numbers, the survey by kpmg, almost a quarter of mortgage holders considering selling up because they cant afford these higher mortgage costs. Probably more shocking than that is that a 10th have already done so. It shows first of all that higher rates are having a weight on the Housing Market. But the slump in house prices has further to go, there is some data from nationwide showing that house prices have fallen 5. 3 in the past year. Economists, some of them had been predicting a doubledigit slump in house prices. By those numbers, we are only halfway there. Kriti i read some analysis on that. The u. K. Economy, the majority of the growth comes from london. When you talk about the proportional pain, does london get hit harder . Lizzy this is what it always comes back to and politicians talk about leveling up. Because london is the Growth Engine for productivity. In terms of how this housing pain is distributed First Time Buyers have basically deserted the capital because deposits are so expensive. Which is leaving more and more people in generation rent and they are getting older and older that they are renting. In their 30s, their 40s. You are also seeing data showing that in london in the southeast more broadly, this is where the discounts have been biggest. Because you cant get the asking price that people are putting down and theyre having to give the biggest discounts. It is therefore a buyers market. Peaked. And now you see Mortgage Rates falling. Kriti its tough, it puts people in a tough position. When you look at this pain in the Housing Market this will push more demand for rentals but the minute it turns around does that create a housing bubble . I feel like that is a question a lot of people see. Lizzy burden, all over that story. And q for bringing us that data this morning. In more u. K. Stories we are watching a private investigator has shared with us a recording of a call with Hedge Fund Manager odie in which he criticizes his treatment by the media and says he has been targeted by the woke brigade. Numerous banks and investors have dropped him odie Asset Management since financial ties and his treatment of women over 25 years was published in june. He strenuously disputed the allegations, commenting on the recording odie said it was mean to reduce the call to just the three soundbites. The crucial story we will be watching closely. I want to pivot to anotherist. The move is a rare example of an American Company crossing the atlantic to seek out investors in europe. Joining me and was Carolyn Cohen and joining me from paris. People keep saying this is an American Company what we expect from this ipo. Caroline youre are totally right, this follows the bloomberg scoop we got last friday. This company which owns some makeup brands like max factor and another french one, it has licenses for fragrances like calvin klein, hugo boss, and others made by David Beckham and katy perry, but it is listed in the u. S. It is also a French Company because it was founded in france here in 1904. It traces its roots back to france and of course paris is the luxury capital of the world. You have got loreal, all based here. This is why they want to also be perceived as a european company. A lot of European Companies actually go the other way around and seek a listing in the u. S. They are actually crossing the atlantic the other way around, just like you did recently, and they are planning today to raise between 300 and hundred 50 million euros. They are going to ring the bell in paris at 3 30 p. M. French time to coincide with the opening of the New York Stock Exchange and the shares have been doing pretty well in the u. S. , since the beginning of the year. Raising about 30 and also raised recently there Sales Outlook for the upcoming fiscal year. So the ipo this year in paris in context, of course that has been difficult for dealmaking with the first half of 2023 in terms of ipo volumes since the financial crisis. Kriti its fascinating, not only is it a rare offering i believe one of the largest of the year. Very quickly, is cody going to get the demand it is expecting . Caroline they recently raised their Sales Outlook for the fiscal year starting this july from eight to 10 for the coming year. They have big success with their fragrance burberry, we will see this paris listing actually helps to make some of their iconic brands well perceived in europe in this luxury capital of the world. Kriti certainly something we will be watching closely, carolyn all over that story from paris. Thank you for the update. I want to circle back to some of the data we got, german inflation data coming in. Those northwest numbers coming up north west rhine those numbers coming out the month over month increase higher by 2 10 of 1 . It joining us now bloombergs european correspondent maria. Your initial take from the cpi figures . Maria it is always difficult to pronounce, especially this time of the morning. This is a number that obviously we care about and we care about because it could always potentially serve as a preview for the german cpi print and that is the number we care about. What you see here is that there is a big drop on a year on year basis that she would have cpi coming in at 4. 2 in september compared to 5. 9 the prior month. That is a significant cooling down and inflation. I should also point that when you look at some of the analyst notes that we have, especially one from Deutsche Bank, they do say this could bode well for a significant cooling down to the national number. Which is of course the one we care about. It says they expect a 4. 6 print to come in for the German National number which will point to a cooling down. At the one thing i would say is that on the surface of it this could be encouraging in that battle, the European Central bank to tame inflation but also Deutsche Bank to name one of the analysts we spoke to this morning they do say a lot of this has to do with baseline effects compared to a year ago. There were issues like the euro transport ticket in germany that could have contributed to this number today but for the time being when you look at in the midatlantic regions that will trickle down throughout the morning you could point to a severe cooling down in inflation in germany. Kriti is the ecb going to care about this figure . Maria well they care about this figure obviously because germany is the biggest economy they want to see this trajectory and a look at every data point. I have gone back and reverted to be in this very datadependent central bank. We also know that the governing council there is a real debate, almost intellectual debate in the story know about the levels rates in that conversation about another rate hike pending in the governing council. We know the market is very skeptical about another rate hike or is this now a debate about durations a level of duration, featured in this internal debate coming out of the European Central bank. The head of the ecb is trying to hedge it both ways saying the two both matter and the core of the next decision which comes in october in athens, is it enough in our the level is higher for longer enough to bring inflation back to target at 2 . The other reason this matters on a National Level is when you put together the big economies at the euro area, europe spain italy france, all the numbers will get over the next 48 hours, it leads you to the euro cpi number and that really matters. Kriti thank you for the instant analysis this morning. Later today stephanie will also be hosting a conversation with german chancellor olaf scholz, that coming off coming up at the bloomberg dialogue. Terminal users can follow that discussion on your terminal. Lets get to what we are watching in the markets today. 8 a. M. U. K. Time we are getting preliminary spanish inflation data for september, 1 p. M. U. K. Time we get german inflation figures out for about the same period. And at 130 p. M. U. K. Time a third reading of that Second Quarter u. S. Gdp as well as a little later at about 9 p. M. U. K. Time the market moving event of the morning, fed chair Jerome Powell hosting a town hall. After the u. S. Close, nike reporting earnings. All that have serious repercussions on the market trade will keep you posted. Coming up we take a look at the electric vehicle landscape in europe and the need to roll out charging capacity if countries are going to hit their net zero targets. That conversation next, this is bloomberg. Kriti from the eu trade chief visiting china amid a probe into beijings ease tv subsidies, delaying the end date for the sale of new diesel and petrol powered cars. Electric vehicles are no doubt the hot topic this week. Ryan fisher from bloomberg any have joining us for a deep dive into europes ev landscape. There is a lot of news going on. Talk to us a little about the uptick in europe at the moment. Ryan the ev market is one of the most exciting things at the moment and with the intro you highlighted that their. In the eu and the chart showing 3 million sales, they have really grown but to key topics the chinese. Do they want those vehicles to be coming over, and that has brought problems for some of the automakers. Fundamentally tesla produces a lot of its vehicles in china and they are bringing them over to europe as well as bmw and others who could get caught in this probe. And then you have consumers. To meet these net zero goals what we want to be doing is selling more evs and cutting off some of these coming from china. It could mean prices go higher. Then you have the u. K. The u. K. With its phaseout target in the headlines and a lot of negativity there, however they have this z ev mandate and with the mandate would do next years makeup 22 of car sales being electric and by 2030 80 . So we think about this phaseout target where it could actually not matter if the z ev mandate comes out. But it is a bit of an if there if they actually do it. We are waiting on news from the government. Kriti that makes everyone nervous, i noticed since i moved to london that the green initiatives are much stronger here than they are in the u. S. Even though President Biden is open to that. Lets talk about infrastructure because i can go out and buy ev but i dont have any charger at home to make this work. Talk to us about the rollout of this infrastructure. To what extent is that the hurdle keeping evs from really exploding . Ryan if you talk to automakers now they are saying consumers are getting more familiar with the product, range anxiety is less of a thing but can they charge when they are out there . We think there is somewhere around 200 billion needing to be spent in this market but we are seeing it happen and we are going from a position of you cant make money from this infrastructure to actually operators are starting to show positive signs. Dp talking about being positive within its German Network and some of those governments before, they would be going out and trying to get networks to come into their cities and the networks would be saying you are going to have to pay those. Now they will pay somewhere around five cents per kill ours to come into the cities. Some positive signs and we also have big funding from government still coming so the German Network yesterday announcing somewhere around a billion in subsidies for different fast charging around the country. And even the outlets, spain this summer, my flight was canceled and we had to head back to valencia. On the way i forgot there were hardly any dvds on the road. Kriti a tough life. Ryan but can we really make this by 2030 and if you look deeper there was Something Like a 200 50 increase in the chargers on the road. These are the real fast ones that can get consumers. But Home Charging is one of the interesting markets because you are seeing some of the Companies Involved there. What is happening with those is they have been deleted by subsidies but now we are seeing a fight. Kriti it is an expensive prospect and what is so crucial about this is that china has the edge it has because they are able to do it for way less then europe and by extension the u. S. Why is it so much cheaper . Ryan in china they have a cheaper charger costs and more cars on the road so more utilization and that is driving the cost down to charge in public. It is about the price of gasoline to charge in public of these fast stations in europe and the u. S. , its about half the price in china. So anyone can use their ev and know they will save money. Kriti always will help lend it to that leadership. Ryan fisher from bloomberg thank you for joining the program, a very hot topic when it comes to electric vehicles. And interesting geopolitical pressures. Lets talk about japanese assets, u. S. Assets. You are seeing a lot of different moves breaking this morning. Valerie joining us next with an update. This is bloomberg. Our strategy is no recession. A very slow growth. Half a percent annualized gdp growth second or third quarter. So it slows down and starts coming back up to above 1 at the end of next year by 24 and then finally gets back to 2 by 25. This is a low. Would you call that a soft landing . Bank of america Ceo Brian Moynihan talking about how his strategists are expecting a soft landing for the u. S. Economy rather than a recession. Lets take a look at the market impact. Valerie tytel all over those market moves and were talking about a recession in the u. S. It is also a topic in japan. Valerie the true story here is what affects this u. S. Asset pricing repricing having on International Markets and look no farther than what is happening in japan. You might think they have only moved one basis point on the day that we are testing a multiyear highs in jgbs. We have not crossed 75 basis points in the 10 year yield in japan in nearly a decade. In the 20 year yield also touch new highs since 2014 overnight moving one basis point higher all down to this narrative in the u. S. Of this higher for longer. This u. S. Yield surge that is also having impact on the japanese currency. I want to walk you through what happened in the close last night. Dollaryen and hit a high of 149 71 last night during the treasury selloff in the afternoon session in the u. S. Many think we just need one big day of of the 150 handle to see this intervention from the ministry of finance as they try to shield their currency from weakening further while maintaining these easing policies at the bank of we are heading for japan it is not only month and put it is halfyear and. Many traders on the street think that the ministry of finance could wait until after month and flows which could be supportive of the yen to see any big intervention. If you are looking at what could possibly turn this Dollar Strength it is on a sixday winning streak. Intervention from the minister of finance is a big worry but it might not be this week. They could hold off until month end. Kriti certainly something we will watch closely. Thank you, walking us through the crucial market story. A couple to keep on your agenda, we will bes speaking with Thomas Barkin later today. You will want to speak that exclusive conversation right here, coming up in the next hour we will speak with the ceo of Siemens Health coming up at about 8 40 london time with our dynamic trio, anna edwards Tom Mackenzie and mark cudmore. Up next markets today starts in a few moments, were going to walk you through the european trade, everything you need to know for the european agenda. Stick with us, this is bloomberg. Its an amazing thing when you show generosity of spirit to someone. And you want people to be saved and to have a better life, then you dont stop. The idea that we have saved five Million Peoples lives, its overwhelming. Its everything. The power goes out and we still have wifi to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. 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