But could troubles at tesla spoil the party . In europe, pmi data out this morning for clues on the health of the economy and the ecbs rate path ahead. Plus, the u. K. Governments controversial rwanda deportation bill is finally set to become law. Questions remain over how the policy will work and when the first flights will take off. We are in earnings season, so we bring you the resorts crossing from french automaker renault and upbeat, the first part revenues coming in at 7. 1 billion euros, above the rest of its of 11. 4 3 billion euros. Above the estimates. There has been decent demand for the revamped cleo. We are looking for any lines on the outlook for evs more broadly. Competition from tesla, chinese automakers as well. Beat in terms of fourthquarter revenue for renault. Scf of at least 2. 5 billion. Estimates have been for at least 2. 6 2 billion, so a little below the estimates. First quarter coming in at a modest beat of 11. 71 billion. We will keep on that story for you. In terms of the margins for the full year, operating fullyear margins at renault, at least 7. 5 , roughly in line with the estimates. We will switch focus to novartis now, because lines dropping on the early story for that drug maker. There had been scrutiny around the Sales Outlook particularly for their key Growth Drivers in terms of the drugs within their pipeline. A look as to whether they are going to be raising their forecast. Sales for the First Quarter coming in at a beat, 11 point 3 billion. Estimates had been for just shy of 11. 5 billion. A beat in terms of First Quarter net sales. Cory ps coming in above estimates as well. 1. 8. The estimates have been for a little shy of 1. 7 billion, so it is a beat as well. They have indeed raised their fullyear net sales and core operating income guidance. It is a race for novartis. That was the key question for analysts looking at this drug maker. They have gone there. They are seeing more momentum in our optimistic about the year ahead. We will dig into that story later in the show. We are also going to be speaking to the ceo of novartis about those results at 8 15 am u. K. Time. Lets check in on the markets. A rebound in terms of the optimism for u. S. Stocks yesterday, particularly in the tech space. The nasdaq 100 inning up a little below 1 , s p adding 0. 9 percent. Making up for losses we have seen, and the optimism continues to filter through. European futures pointing higher right now by 0. 5 percent. The ftse 100 breaking through fresh records yesterday. The ftse 100 starting to catch up with some of its peers at 8092. Futures pointing higher by 0. 5 . S p 500 flat, nasdaq off by about 0. 1 . We are going to be scrutinizing the tesla story on the earnings front later today. A big week in terms of treasury options, whether or not there is going to be appetite. It is going to test the appetite for treasuries. That is going to kick off when we get a preview of that. U. S. Twoyear just above the five point level. Yields have been around their highest level year today. In japan, we had the finance minister coming out saying that conditions were potentially there for intervention. A pop in the yen now for after those comments. Lets cross over to asia now for a deep dive on those asian markets. Avril. We are seeing a bit today makes recovery in the asiapacific. The hang seng is leading the way , gamed to the highest level in about two weeks, underpinned by the surge in these chinese tech names. But apart from that, it is really a mixed picture where you have the kospi that is quite flat. A lot will depend on those big tech earnings. A nikkei that has paired games firm early on in the session, following the comments from the countries finance minister and the possibility of yen intervention. It does seem like sentiment towards china is improving. We have a rare upgrade coming from ubs on its chinese hong kong stocks to overweight from neutral. It is going to do this by downgrading south korean and taiwanese stocks. On the csi 300, we see it is negative for today, but the msci china, another key gauge is taking higher. Since the january lows, it has been recovering about 14 . The reasons behind this ubs call, it says that her earnings and china have been fairly resilient despite the property sector woes, despite the macroeconomic concerns, and it actually sees early pickup and consumption and that Household Savings could start trickling through into spending as well as the markets. That is what we see in china, but flip the board because we did hear from the japanese finance minister, and despite the dollaryen levels, one point 584 overnight. This is coming on the backdrop of a suffered dollar. We are seeing safe haven bets come back. The finance ministers comments perhaps prompted, because of this, his talks about how they are more conducive environment for intervention. We also heard from the boj governor, and those comments from him also seem to be geared towards curbing in weakness yen weakness. They reiterated they could raise rates if inflation hits a 2 target. That seems to be raising speculation on japanese that we could see another rate hike later in the year. The yield on the fiveyear in japan hitting the highest level since 2011. That is what we are seeing in the asiapacific for now. Tom avril, thank you very much. We will stick on the japan story and get more analysis on that, as avril has outlined for the finance minister. The and gained a bit after the japan finance minister said the environment is in place for intervention if needed. I think it is fair to assume that the environment for taking appropriate action on forex is in place. Though i will not say with the action is. What the action is. Tom lets bring in the strategist for the mliv team. Mark, the morning relatively stern from finance minister tsuzuki in japan. We lead up to the boj meeting decision on friday. How is the unexpected to react around that meeting . Mark it is going to be a tricky week for yen traders, because even before you get to the bank of japan meeting, youve also got this treasury option coming up. They will probably talk about that in a moment. When yields rise in the United States, if you remember, the cpi event in the u. S. Was the one that triggered dollaryen going above 152 a couple weeks ago, and that we are not far from 155, so weve got to get through that first. But clearly the way the japanese are speaking, there is a lot more weight being put on the bank of japan meeting. Governor way to the governor has said more than once that the yen impact is something he is watching closely, but if anything, it is getting worse. He is also concerned about the purchase of jgb. He does not want to buy the huge numbers his predecessor was buying. Hes looking for ways to reduce jgb holdings. That is a slightly hawkish sign, which should support the yen if he puts it together in a nice package, which he may well do this friday. Youve got the finance minister giving another morning. We have not heard today from the chief currency person at the mrf, but that may be coming, and youve got the bank of japan coming up. Talking about intervention being in the right place, what they are referring to is the meeting with janet yellen when she stood beside the finance ministers in south korea and japan. It was kind of a united front, telling the markets the United States might not get involved, but we are not going to stand in the way if the Current Companies want to support their currencies. The timing is just a question, whether it is going to come this week or if the bank of japan will do enough to strengthen the end by the end of the week. Tom really interesting, that conducive environment. Talking to the u. S. , a big week as we flagged around these treasury options. Is there any since there is going to be any recalls in this . Are they going to be well absorbed . What does the appetite look like for those options . It is difficult to see how this could run too smoothly. We are talking about 180 billion worth of treasuries, including today, the largest twoyear auction that has ever happened yet 180 billion dollars used to be a large quarterly refinancing. We are doing it all in one week, and yields are already pretty high. We are seeing the backup and yields recently after strong data from the United States. The fed is telling us they are in no rush to lower interest rates. The conditions are not great for doing a huge amount of treasury spread over three days. It would not take much to push yields a bit higher this week, to absorb all of that without some concession in the pricing seems unrealistic, unless there is some external factor, something that makes everyone want to go for haven place. That is not on the table right now. It could happen. Otherwise, it is going to be strenuous week for people in the bond market to get through an enormous amount, were in the background as well, you have fitch reminding than last year, when they did their downgrade of the United States, one of the reasons they did it is the u. S. Fiscal deficit is getting bigger and there is no particular sign it is being raised in, which means there will be even more treasuries coming down the road. It is not like you get through this weekend and get a holiday. Theres going to be a lot more bonds for sale in the future. Tom 180 billion in a single week in terms of treasury auctions. That record may not last, may not stand for long, given the fiscal constraints of the u. S. Mliv smart cranfield on whether the markets mlivs Mark Cranfield on whether the markets can digest this. We will switch focus now to the test learning story. Tesla set to report First Quarter results later today. It is going to be huge, a significant set of earnings for tesla. Shares down 42 year to date. Elon musk making a big bet on Autonomous Vehicles with the robotaxi taking priority. Lets get more with robert lee from Bloomberg Intelligence to set us up for this consequential day for tesla and the companys investors. Rob, what are you and the team going to be scrutinizing from these numbers . Robert i think the chart tells you everything about market expectations, given the recent significant underperformance, but just to throw one number at you, if you look at the adjusted number, Cash Adjusted operating profit measure, the market is looking for that to fall 8 q over q, 15 yearoveryear, the weakest number a company would have reported since q3 2021. Clearly there was a lot of pressure on teslas business at the moment. Tom when it comes to that pressure, the competition out of china, byd in particular, the challenges within the company, that debate over the robotaxi versus the 25,000 car, everything else, the regulatory challenges, which of those risks do you think is most salient for tesla right now . Robert breaking it down briefly into time frames, evs most agree is a very attractive longterm trend. Arguably we will be driving evs at some point in the future. However, nearterm these things are priced at a premium to mainstream automobiles, and in a slowing economic environment, that is impacting demand. At the same time, youve got aggressive volume players moving into the market and aggressively trying to take share, which is pressuring teslas business. In addition to that, youve got some strategic uncertainty as to whether, under the leadership of elon musk, as to whether this company is going to move into the robotaxi market or whether they should go into the mainstream auto market. The company is leaning towards robotaxis, but look at the share price reaction. I think the market has given a clear view as to what it thinks on that potential strategy. Just to draw a parallel with you based in london, that company, they are manufactured by a mainstream chinese automaker. Robotaxis are ultimately going to be a volume business globally. The question is, is tesla real placed wellplaced to prosper in the long run . The market seems to be questioning that at this point in time. Tom really nice set up for this earnings day. In the set up their from robert lee from Bloomberg Intelligence, maybe we is a take a closer look at the london black cap in terms of whether or not they have plans along similar routes. Thank you for the set up. Here is what else should be on your docket. This morning, we are going to get more of a round out when it comes to the economic picture out of the euro zone, with those european pmis. They are going to be dropping around 8 00 to 9 30. We have heard comments from the german canceler suggesting that the German Economy has turned. We will see if the pmis later today bear that story out. In terms of the earnings on the luxury front, sales dropping 5 00 p. M. U. K. Time from kering. The gucci brand in focus. Bloomberg has done great reporting on this. We will be breaking that story down for you later in the show. 6 00 a. M. U. K. Time, as Mark Cranfield was saying, a record two year treasury auction in the u. S. Watching as to whether were the market will absorb that comfortably or whether there will be strains. Coming up, after months of wrangling in the u. K. Parliament , rishi sunaks flagship rwanda deportation bill is set to become law. We are going to take a look at what happens next year in london and in rwanda. That is next. Tom welcome back to bloomberg daybreak europe. We are going to get the details on the news that the u. K. Prime minister rishi sunaks like ship law to deport asylumseekers to rwanda has cleared that key hurdle. Flagship law did a port asylumseekers to rwanda has cleared that key hurdle. But we are going to get reporters out of london and kigali to cover the story for us. Lets bring you an interview with the president of the European Investment bank, saying the eus support for ukraine is unwavering. Nadia calvino spoke to bloomberg about the impact of a 60 1 billion aid package approved by the house of representatives over the weekend. I think it was a very productive spring meetings week. We had many exchanges, and ica momentum in coming together and supporting ukraine strongly, but also deepening our cooperation with the Multilateral Bank family to contribute to Climate Change financing, peaceful and more, how would i say, Sustainable World going forward. We will get more details on your lending plans in just a moment. There has been a sense of fatigue in congress around what is happening with ukraine in its fight against russia. There were some people asking whether there was a different way, whether this should be something we should continue funding, what looks like a may what looks like maybe a neverending war. What would your view on that argument be . We need to support ukraine. It is a serious situation. It is a threat to democracy at the end of the day, and the way we see things in the u. S. And europe too, from the european point of view, there is no doubt our support for ukraine is unwavering. I think the decision by the u. S. To provide support for more than 60 billion is very valuable, and this joins the previous decision of the european institutions to provide 50 billion euros in the ukraine facility, which we will manage at the European Investment bank. I think it will provide much valuable support for the reconstruction as well as the military effort. Did you see the vote counts on those eight bills . Aid bills . When you look at Something Like the indo pacific, it was 385234 in the house. When it comes to israel, it was 311112. It barely got through. Excuse me, to ukraine. How concerned are you about how deeply divided american politicians are about aiding ukraine as opposed to other issues like israel and taiwan . We should continue to support ukraine. As president zelenskyy was saying, they have a chance if we continue to support them. From a european point of view, ukraine is our neighbor, a Prospective Member of the family, and thus we need to ensure we keep a secure environment in the region. The other conflicts are just as important. The middle east situation is very worrying, a source of concern for all of us, and we should try to stop that conflict as soon as possible, but ukraine should not be forgotten. Tom European InvestmentBank PresidentNadia Calvino speaking to bloomberg. 20 more coming up, including the story around rishi sunak and ramonda im a but could mean for his around rishi sunak and rwanda, what it could mean for his poll ratings as well. Tom u. K. Prime minister rishi sunaks law to the port asylumseekers to rwanda has cleared its final hurdle in parliament. Just to deport asylumseekers to rwanda is cleared its final hurdle in parliament. Lets start with you, albhe. In terms of deportations, what do we know about this deal . We know this will soon become law. It is definitely going to happen after a couple years of wrangling over it. Not what now what rishi sunak hopes will have been is flights get off by the beginning of july, if not earlier. We will then see a steady stream of deportations through rwanda, that this does have a current effect and improves his poll ratings, whether that is guaranteed to happen is less known. Tom he has had to move heaven and earth to put this plan into the law books. Why does he put so much effort into this policy . Alibhe he definitely wants you to think he has moved heaven and earth to get this law passed, and in some ways he has yet there have been challenges, but the government has itself delayed on this a few times, despite describing this as emergency legislation. That is because behind the scenes, the logistics are complicated, and there is still speculation in westminster that the government is not quite ready to get these flights off. We might hear more of that from the rwanda inside. Thats the rwanda side. From the rwanda side. This is the governments lastditch attempt to get a bit of a boost in the polls ahead of the general election when they are way behind. Tom you set us up very nicely to bring in ondiro. Lets cross over to you to get the perspective from rwanda. How close is rwanda to being ready to accept these deportations, these immigrants who have been deported to that country . Ondiro tom, housing is ready. There are several hostels on standby, one of them which has a bed, and internet, and a pool table. The government says it is not popular, but it is decent. They will also be teaching them the National Language and job skills so they can integrate them into the community and turn them into assets. This is not without skepticism. Rwanda has been criticized by the Opposition Leader as a country that is not democratic compared to the u. K. The good life the asylumseekers are looking for, they are not going to find it and rwanda. In rwanda. Tom there has been criticism as well around rwandas human rights record. Is there lingering doubt on the suitability of rwanda to host these asylumseekers above and beyond what you have outlined . Ondiro for as long as a fast flight takes off, then attention will be shifted back to rwandas legal system. Yesterday, Prime Minister sunak said changes have been made to accommodate the legal needs of asylum says of asylumseekers fairly and squarely. The governor said criticism is unwarranted, and the president of rwanda says if the asylumseekers do not come here, they will give back a money. Tom thank you very much. Ming up, the iaea publishes a longterm outlook for evs, just days after tesla Slashes Prices to counter declining sales and that roaches chinese that ferocious chinese competition. Good morning, im tom mackenzie. Stocks in asia higher on optimism of profits but can troubles at tesla spoil the party . The ecb rate path ahead and earnings season is underway. The swiss giant raising its forecast as blockbuster treatments outperform. European futures after reprieve is given to those who had their hands burned. The s p closed higher. Futures looking flat but a decent session in europe. Ftse futures after a fresh record. We keep our eye across the treasury curve, back below 5 . The yen is in focus. Gold dropped 2. 7 . Brent has a gain, 87 a barrel. Avril hong has a take on the yen. Upside for chinese tech companies. What else is happening . Avril that is the focus for asian stock benchmark. Hang seng is leading the charge, but elsewhere it is tepid, csi 300 is sinking. Improved sentiment seems to be coming through from the rare upgraded and it seems to be the indication that despite worries, there is divergence. Despite the tick up and recovery, it is failing to recoup declines. Kospi flat, a lot will depend on tech earnings and we are seeing tech indices benefiting. Lets take a closer look at ubs, msci china has been recovering since the january lows, a lot of this has to do with how it believes we are seeing early signs of a pickup. Active filter into the stock market. Tom interesting call. We will remain on intervention watch for the yen. Avril yen weakness hitting 15485, despite the softer dollar as bets ease and it is interesting despite the intervention chatter from the finance minister and governor, comments geared toward yen weakness and recovery, if you take a look at the leverage funds, yen weakness on weekly data has risen to the highest level since the records began in 2006. This raises concerns where everyone is piling into one direction on the currency and this makes the yen vulnerable to a pullback. Lets put the board. It was not just the finance minister. We got comments from the boj governor who reiterated they could raise rates if inflation moves toward the target raising speculation that we could get another rate later in the yeah and we see the yield on the fiveyear hitting the highest since 2011. Tom april, thank you indeed as we look ahead to the boj meeting. Thank you with a market check and gauge on the yen. Initial pmi ratings are due for the euro area and u. K. Dater will give us an insight into the Second Quarter. Lets bring in mary nicola. Before we get there, how will it improve . How will that affect rate expectations . Mary at the end of the day it still about inflation, the ecb. Its all about disinflation but if you look at considerable uptick, it should be a sigh of relief for europe. Rough year in gdp. This is a scion that the start of quarter number two looks good. Pmis out of japan and australia were looking more rosy for the Second Quarter of the year so for now growth looks better but we would not say we are out of the woods, at the end of the day it is a rate differential and disinflationary trend that will drive eurodollar and rate expectations. Tom sounds like a positive backdrop. When we switch focus to the u. S. , options were huge. In terms of ruptures should we brace . Mary likely not well received, pickup in treasury yields and headwinds from data this week, gdp or pce. Traders will be on the sidelines because of what to expect. Then last week you had the imf pointing out about debt levels and rising debt levels, confluence of forces will leave treasury auctions with headwinds with such a busy week on the gdp side, pce, remnants of what we have heard from debt levels in the u. S. Tom bloombergs mary nicola, thank you. Check out her analysis, setting us up for the pmi data and treasury auctions. Thank you. International Energy Agency says chinas exports are set to change the map according to a report. Chinese Companies Made more than all more than half of all electric cars. Tesla reporting later today. Competition has been intense. Monitoring this is all over oliver crook. When it comes to the tesla story, a a lot of news, what are you looking for . Oliver it is impossible to keep up. So much background noise as you go into the numbers and its not all about the numbers. We got First Quarter sales, disappointment and i dont think a lot of people are putting stock in the numbers. What they want is the company. What is the vision look like . There was questioning because there seem to be hi ev sales, competition from china and the question is how will tesla retake the initiative and the answer is the cheaper model which was going to dominate focus for musk. Then we heard the plan had been scrapped and he was going to focus on robotaxis which makes sense because tesla is a disruptor. Cheaper car is in keeping with dvds, robotaxi would be revolutionary pieinthesky. As much as we care about the numbers for tesla, the focus is elon musk speaking to shareholders, what is the plan . Amid insane news over the last two weeks, job cuts, pivot for business focus, needs to retake the initiative and the story of tesla. Tom such a big day for these earnings and a chart puts it into context. This chart shows a, 42 , thats the pullback. Within the context of the story, since 1999 it is modest. Biggest pullback coming for apple, 77 in 2000. It caught the attention of investors burned by this. That is the context. With bring it back to the macro and iea outlook. Oliver we had a great report that goes through a lot of numbers and is comprehensive. A lot of talk around evs, is it going to massively disappoint . This has been a chatter around it. In the First Quarter ev sales grew by the same rate as last year but from a higher base. They expect 20 of cars sold to be evs, but this is a china story. In china they expect 45 of cars to bevs that is mammoth. Faster than anywhere else. If you look at the tesla numbers in the First Quarter, tesla had an 11 market share. By the Fourth Quarter it was 6. 7 which tells you how cheaply because in china 60 of evs are cheaper than combustion and that will be exported. It is concerning the china overtook japan, germany and this is the context, but before i leave you, talking about energy and oil, this will displace 12 Million Barrels per day and not just be gas guzzling cars. Tom china brought tesla to suit up the market and they have managed. Bloombergs oliver, thank you. Setting us up for a big day. Novartis raising their guidance after reporting better First Quarter response. We will dig into that story, what is propelling optimism next, this is bloomberg. We do personalization and you can tell me what you think but ai can help me analyze your face better than you could vocalize. Helping to give people the equivalent is a great way to grow your business. Cheating is not relevant. Tom that was trini speaking to bloomberg. The federal trade commission is seeking to stop a merger between fashion giants. They allege the deal between tapestry and cap rewould harm the luxury goods market. The first time biden has used antitrust to stop a deal in that sector. Novartis raising its forecast as sales of medicines for Heart Disease and psoriasis outpaced expectations and they push for stronger growth. We are joined by our pharmaceutical analyst. Thank you for joining us. What stood out to you . Sam today the beat but that was the cadence we expected. Every quarter beat, raise so that was on the cards. What is interesting is that guidance change did not move one step, it jumped two steps. Previous guidance was high Single Digits and now theyve jumped to low double digits, a massive jump. Costs were lower than expected, for the full year this this change in terms of the massive increase in guidance is driven by a later than expected hit. A drug that is generic has high margins because they are not doing promotions. When you see another two quarters it has a big positive hit. Tom does that bite them . Sam every quarter is that extra amount of cash. Tom theyre working on the costs . Tom is there a broader read across . Sam last year they did the same thing but other companies have their own dynamics. They do sales on a quarterly basis and we are not expecting major issues. The other thing is it is the end of the covid hit, that is gone. Astrazeneca this week, we do not expect much except a new cfo setting out his plan and they got r d on the 21st of may, not going to give big updates there in quarter one and they just reported a few weeks ago. Tom all different stories. Going back to novartis what is driving growth . Particular parts or regions . Sam they have drugs going quite nicely. In your intro as you said, they did much better than expected, 100 million. Sam happened with a cardiovascular drug going off patent later in the year, that beat. Growth drivers are there what we need is growth from other drugs. They neuroscience drug and recent drugs performed ok so what were looking forward to his neutral rugs helping them growth. Tom watching for the new names. Sam with the analysis on the back of that. What were will be hearing from the novartis ceo at 8 15 u. K. Time. S. A. P. Reported cloud revenue in line with estimates. Feeling the German Software companys growth. Europes biggest firm migrating from its Legacy Software to the cloud where it is offering ai services in announced discounts of 50 to a gazelle or rate the shift. Shares fell and then rebounded post market. We will be speaking with the cfo later, around 11 30 a. M. U. K. Time. Stay with us, this is bloomberg. Welcome back to bloomberg. Yeah we saw some upside, dont get complacent. They have not had calls right in two years, but there is complacency. Earnings give a lift. Again he stresses complacency. They are target, one of the lowest at 4200, another 16 drop. Another warning from jp mug will morgan. Lets put the screen. Talking of earnings, it is important, meadow will be crucial. For tesla, price cutting, china competition, Short Interest in the stock. It is around 40 . Competition with china is straining the company as they cut the prices. Lets look at apple. They are down, taken a hit. Bank of america are interesting because there is the china challenge coming out with one of its top picks, this remains a defensive pattern, has cash to play for. Some are saying there is no ai strategy. Some are pointing around Chinese Market concerns and dropping sales and bank of america saying this is one of the top picks. It has one of the fewest buy rating since 2020. You can see those in the blue line in the white line representing the price of the stock. Bank of america saying fortunes will turn around. There is plenty more gautam buck coming up this morning including novartis. That will be the focus. Jeff curry, carlisle chief Strategy Officer joining the polls at 9 30 a. M. His views are worth listening to and speaking to the ceo of sap. Markets today is next, this bloomberg. Anna this is Bloomberg Markets today. Cash trade less than one hour away, novartis raises forecast after outperformance. We speak to the ceo. Randel posts a beat with evs making up 48 of s