Data, lvmh up 2. 5 . Luxury stock stood well. Tech stocks did not do well. That will pass through with names like asml. Alix we have a pretty decent selloff. We have the umich data, with mixed signals. You are seeing adobe is the worst performing stock. Analysts feel their guidance was conservative. Arm is taking a break after that 40 pop. But nothing super dramatic. This is all but the overhang of the uaw strike. Guy we are also watching the dollar continued to climb. The euro is the biggest casualty. It is in for its ninth week of decline. At the moment, we seem to be in a position where the market is beginning to focus less on the rate differential, the market is focusing on the growth differential. If you look at the Growth Numbers being announced out of the United States and europe, that does not bode well on where the euro goes next. Parity does not sound that farfetched anymore. Alix this is the interview after the meeting with the ecb yesterday. We are on the right track and i think we should stick with the lower Interest Rate it is the right number to reduce inflation. Guy the market is starting to think about where cuts come in and where they come in. I want to come back to this idea of the growth differential. The question is a straightforward one today, how low does the euro go . Maria, i want to start with you. Christine lagarde was at pains yesterday so talk about inflation but the real story is growth. Maria there was a lot of commentary about this. It shows you how palpable how much tension there has been around the hiking cycle. She was not definitive that this was the last type. But also repeated that we have to focus on duration, strength and market is already anticipating because and she said we have not yet even pronounce the word cuts. She in she may not want to signal their dawn but does not want to start the word cuts. Alix the market believes theyre not talking about it. How long are they going to go . I think the definitive level of euros is a point down from the dollar in the euro economy. You will have Interest Rates anticipating the dollar. Its really the euro versus dollar were focusing on here. He could get down to parity. Even the ecbs own growth forecast wont get anywhere near that. I expect there will be a recession in the euro, and it will take somewhere into next year which will take the possibility of the plateau. The expectations of a cut in june of next year may fall forward into marchs fairly soon. Guy any other issue that the energy story is playing now . As someone put it earlier the Dollar Benefits when prices go higher. Europe will suffer because of it because the growth hit will be substantial. Marcus its a doubleedged sword. If it contracts the economy further, it will become a good story rather than a rate story. They know they need to cut rates but they need to push the economy down. Thats the situation they put themselves in and i feel for them. You cant do anything other than have a naturally downward euro towards parity unless the Federal Reserve do something different. They could definitely pause and look towards rate because. Alix this leads us to the second part of the conversation about ev deliveries from china. The other end of this is growth, unique growth. He pushed back against the trade war but this is where were evolving into . Maria and to add the final point, for the European Central bank its unclear how this enters into the debate. They are not fully hiking because when you spoke to the german finance minister he said inflation should be the number one priority even though it is the german economy. Going into recession. If you asked the German Central Bank if they are fully done they are not quick to say we are not fully done. We have seen sometimes the story has a little more nuance. Its a perennial issue when it comes to the european economy. They are going over the fiscal rules for deficit and debt levels in the european economy. They say it is not doing enough to trigger growth so francis finance minister said the European Union has a right to look into areas where they have a level Playing Field he also said we should not be scared of looking out to those areas and correcting them if necessary. He said we do not want that a trade war. Guy the u. S. Economy has been driven by the largess of the federal government of joe bidens policies. Europeans have not done that. To what extent is thats seeing . European economy is suffering in a way that the United States is not. Will there be a political push to do more or will the germans hold us back from that . Maria it shows how different difficult it is to manage this economy. They debriefed finance ministers about the hike accompanied by the euro group that says it is clear we have to tailor our fiscal policy. They believe that fiscal policy is a drag on the Monetary Policy which makes it more difficult for the European Central bank. When they go over the fiscal rules european economies say we have been too fixated on the data and not in the investment into the economy. The germans are still tough on inflation and they say that and deficit matters. They are the ones who are suffering the most at this point. Alix the markets on the others, we hear that what matters more for yields will be fiscal policy. Fiscal policy is working against the fed and they will have a lot more issuance over a longer time and yields are higher. Marcus they will have to put up even more bearish yields. Companies will crater a price point against chinese cvs. This is a french Led Initiative and it puts germany in a situation in which they are happy to go along because they produce a lot of cars and china so they have a lot more risk than british manufacturers. The ecb is creating a problem about where policy can go. Look at where german manufacturing is . Something has to be done. For the moment all they can do is hike up the currency. Alix thank you so much Marcus Ashworth and maria tadeo. Just how low does the euro go . We will speak with hugh gimber from jp morgan Asset Management department. This is bloomberg. I dont think at this point they can hike but they will keep wide open the possibility of another hike in push back against the notion that they are coming anytime soon. The message will be that we are going a little higher and we will stay there for longer. Guy that was mohammed elehrian speaking earlier. How long does the year ago . Are we in for a bit more . When they are hiking it is dictated by inflation when theyre cutting it is growth. There are two factors holding back the euro zone. The energy story even though you have inventory at high levels they are seeing higher prices after the russian invasion of ukraine. If we were to see a big acceleration that would be something that could prevent the depreciation of the euro continuing. Its hard to see it changing i think the euro desk a lower. Alix it looks like the eu will be titfortat at the very best with china and it will ripple down into the luxury sector as well. Hugh youve seen the reaction today. Really strong numbers coming out of the luxury players just in retail sales. That shows you how pessimistic investors have gotten on the chinese outlook. I think there will be more policy stimulus to come. I think the Global Growth is challenging at this point but it all has to be worked into expectations and investors are pessimistic about the euro zone and china today. Guy it is luxury codes safer than european equities . Hugh are views across the board are relatively cautious. It is necessary to bring inflation back down. If you look at relative value plays you are tilting away from the u. S. Into other developed markets in europe has to be one of those places. Longterm averages have long value. Alix you discounting an earnings path with a lot of suffering if something happens but where in europe . Hugh this will not be in one country but it will be a tech story. It will be difficult to think about the market on a country by country story. You look at manufacturing orders in the euro zone at 39. How much weaker could it really get versus where we are . The banks are another place to look at. Some puppy times earlier this year but if we are right that we are moving into a version of the world that is higher for longer but a decade of positive Interest Rates ahead in the euro zone and meaningful Profit Margins for european banks thats another place to look, especially bonds. Guy they are not going to come down much. There is a risk that they go higher from here. You have what is happening like another shut down. Are some of the factors different here than they are in europe . Hugh thinking about a central bank on pause and history tells you that 10 year bond yields come inside with the pause and that rate hiking cycle. In the euro zone you dont have as many push and pull factors which is easy to think of what could tilt treasury yields and thats fx higher and yields lower. You dont have that big supply problem to deal with. You have another winter coming up so we dont know whats going to happen with Energy Prices ahead. All of the opportunities in europe fixed income is a good way to gather european duration. Alix what about the u. K. . Hugh similar story on fixed income. We had a major repricing. When you look at u. K. Versus eurozone the big standout as the labor market where there are greater structural headwinds to bring wage growth down. Unemployment is rising and wages pushing upwards towards 9 . The cases more positive for a global government bonds but on a relative basis, still fragile because the bank of england has more work to do to get the labor market under control. Alix apparently there is no confidence in the eu. A sign of noconfidence do you like that one . Guy the data speaks for itself. A lot of institutions are struggling with the crisis of confidence more broadly. This is bloomberg. At morgan stanley, old school hard work meets bold, new thinking, to help you see untapped possibilities and relentlessly work with you to make them real. Encore energy, americas Clean Energy Company poised for production in south texas, energizing america with reliable and Affordable Nuclear Energy fuel with an environmentally friendly extraction process. Encore energy. Alix back at my early days of being a reporter i was one of those reporters outside of the apple store when the iphones went on sale. The apple 15 is the most expensive release of the phone yet. If youre looking for it, you could be waiting as long as october. Guy this is alexs moment to mock me. I have always got on with android. I find it intuitive. Alix this is why apple sucks you in. Because then you have the whole ecosystem. Guy you get sucked in and use everything within that ecosystem. If that factor were to change which you find yourself in a situation where people would gravitate away from there. The whole team mocks me on a daily basis for being an android user. Alix i would never mock you, thats not what i do. Guy we all know this is not true. You called me old earlier this week. On that note, i bring you to a friend of the show. I hear news this morning he is leaving tso which is the significant moment and he will be joining brad outfit. What does brad do next . If he wants to be is ceo again he will be is ceo again. We dont know his next move but im sure we will get more on that. Whats this space, matt jacobs is a name to watch again. Pendency a lot, a new Hotel Opening in london. Well talk about that, next. Allday Energy Starts with clean hydration. Lmnt. More electrolytes. Zero sugar. You feel the difference when you get it right. Stay salty. 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 a car engine revs n, it works. engine accelerating texting clicks tires squeal glass shattering loose gravel clanking guy we are wrapping up the day in the week. Better data out of china some of that has remained but some of that has faded out. We are higher in paris and london, what is the day look like . Lets talk about it. There are so many overlays that come into the story. Whats happening in Central Banks in the energy markets. You get a bit of a pop and then you see that move. Is that the bottom . Do we go higher from here. Lvmh, earlier this week it was down 20 . Today it is up by another 2. 26 . Asml pushing back orders for the lithography that stock is down by 3. 64. H m, down by a 7. 39 . They have tried to push through price rises and consumers are pushing back and they took a hit. The market did not like that. Lets talk about what comes next week. U. K. s cpi will be worth watching out for. We have the fed before that which will be fascinating. Are we gonna get another hike from the ecb, fed . Lets look at the bank of japan next week. Energy prices rocket higher. We will get some global pmi data as well. Manufacturing has absolutely greater cratered. Next week, huge. Alix thats why want to take a look at the eurodollar. You are looking at the ninth straight week of losses. How low can it go. Our target was 106 but we thought it would take a lot longer to get there. I do think it can fall down and not only is the market focusing on the growth outlook. If you look at the fiscal policy there is nothing particularly pretty about that. People are unhappy with what incumbent politicians have offered them. The far rights antiand nationalistic. We still have high inflation and the huge amount of debt. I just dont see the longterm effects. Guy is it to early to use the word parity . We are still a long way from parity. This is not just to hero story. At the start of next year we see a resilient u. S. Economy and fears of Slower Growth with china and europe. The dollar may only begin to soften when the fed Interest Rates come onto the horizon. That may not be until we push into the spring. The Dollar Strength will stay for a while. We could have the eurodollar languishing. Alix then there is the dollar, you outlined the messy politics of europe, right wing polarizing thats also happening in the u. S. Is the dollar overdone . Jane it has different domestic fundamentals. The dollar has a safe haven position in the reason why, the dollar belongs to the world. So many people have the dollar and there reserves. Everyone needs the dollar when there is a crisis in that allows them a little independence. Guy is the dollar a petro currency as well. Jane the u. S. Is a much more closed economy relative to europe which is much more exposed to the chinese slowdown. Because its a close economy you can form an argument that is last less exposed to other prices as well. It is more protected than some of these prices where europe will not be. Alix what does china do then . Jane we dont know if theres an Interest Rate hike in japan. But can they really hike in an environment with china being weak. Yes, they want to get out and see selfsustaining domestically driven inflation and they are closer to achieving that than they were but if a hike too soon, they could put themselves back to square one. I think its a difficult position for the bank of japan but i still think we can assume that they will be in a position to hike Interest Rates. Guy if the bank of england hikes does the pound go up or down . Jane the central bank has a fine line to walk. Is a to her . They have recession, money market rates will go down. They have to have enough hawkishness to try and keep the pound up without making the market panic about the recession we all know is dangerous. That will be tough if the inflation rate remains high and given the gloomy growth outlook. Alix if lagarde couldnt do it i dont know how Andrew Bailey will do it. Is there even a tight rope to walk at that point . Jane theres always a possibility but it is tough and we can see some of that story with the euro sterling with the gloomy pmi out of germany. The market doesnt like it and it bounced back. If the market does not want to see the sterling gained ground against the euro. It seems that will continue for a little while with the market seeing the Central Banks and similar conundrums. Guy jane is a fantastic person and she is also a little weird. The reason i say this is she had an apple phone and an Android Phone which i cant get my head around. It has to be one of the other. Its like being ambidextrous. Alix [laughing] i was going to ask her if she had an apple or an android. I literally cant type on an android. Guy i am getting fan mail about the enjoyed, people love the android. I will forward them to you. Jane, thank you for proving my point. We love you. We will be right back. Lets check the euro stocks these are the final numbers. We have been bouncing around all over the place. The china data has been huge as well. The ecb, but these are the final numbers on the week. They are still in the range. When do we get shaken out of that . We will hear about the growth story. We had a big downside growth move. Talking of luxury, lets talk about whats happening in london. There is a wave of Highend Hotels about to open in london. The brandnew peninsula is the first out of the block. It will be shaking up london luxury. Shanghai ceo will be here to talk to us next. Clement kwok, this is bloomberg. If youre trying to get a view of the whole organizational Financial Health and youre trying to do that through multiple systems, that makes it very, very cumbersome. Its not just tech, its not just people. Its how they Work Together to provide that experience to the customer. As a finance organization that is what you want to do. The sleep number climate360 smart bed is the only smart bed in the world that actively cools, warms and effortlessly responds to both of you for up to 44 minutes more restful sleep per night. Save 1500 on the sleep number climate360 smart bed. Shop now at sleep number. Com. As a finance organization that is what you want to do. This is Bloomberg Markets youre looking live at the principal room. The former Vice President mike pence will be on at 5 00 p. M. I was on my bicycle the other day and the Buckingham Palace new neighbor is now open and ready for business. The peninsula new luxury hotel open its doors. And it has dice and hairdryers. Dyson hairdryers. Its the first of many old to Luxury Hotels arriving on the next few years. The ceo clement joins us now. Why are we suddenly seeing so many hotels open and london. Clement our company focuses on being the long term owner of hotels. We focus on the most important cities, tokyo, hong kong, paris. We have been looking at the tower of london but we were fussy about finding the right location and we signed a deal for this incredible location. It is part of a longterm strategy where we want to own and operate some of the most special hotels in the world. We try to make them exceptional. Alix the u. K. In particular, it is losing a lot of its allure as the finance capital. Weve seen a lot of listings of London Companies come to new york. I am curious as to why now the u. K. Makes a good place . Clement there is always a place for luxury. If you have an outstanding product there is an audience for it. People are coming to restaurants in the roof. We are seeing very big demand. You will have competition soon. How will you beat them . Clement every place in the world where its worthwhile to have a hotel like this you will have competition. We own and operate for 100 years. We put a lot of time and effort into the design and detail of the hotel. We would love to show you around. And then we take care of our own product. Whats your visibility into that for the next six months. Clement there have been pockets of recovery here and there. We do believe that luxury will continue to be in demand. If you dont have the staying power to go through those ups and downs you will not be in the business of longterm investing. The most important is to create an outstanding product that you maintain and hopefully over time , you could be sustainable. Guy has traveled changed before and after the pandemic . Has Luxury Travel change . Clement there have been changes as far as demand. Guy how do people perceive the product. Clement personalization, relationships and how those Services Change over time. We are very advanced in technology in our hotels. You can control everything from the technology we have in the rooms. Its about how you execute the luxury. Alix before we let you know, where are you going to go next . Clement we opened in istanbul as well, its a fantastic location overlooking the old town. Please come and have a look at the two. Alix thank you so much. Clement kwok. I know you dont use hairdryers when you get a dyson hairdryer its quite a moment. Guy you never know what will make a difference but now i will see the experience a different way. Alix this is bloomberg. Alix this is bloomberg. Wn online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. Encore energy, americas Clean Energy Company poised for production in south texas, energizing america with reliable and Affordable Nuclear Energy fuel with an environmentally friendly extraction process. Encore energy. Explore endless design possibilities. To find your personal encorstyle. Gy. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Alix u. S. Stocks still trading heavy, tech is being hit the most. Abigail there is quite a degree of fallout. You dont always get this kind of volatility but today we have seen some big declines in we will see some underperformance. Nasdaq 100 down 100 down 1. 5 . In the russell 2000 is down 1. 1 on the week. This is shaping up to be a bearish week. One of the pressures is yields which are a little today. But if you put in that context we have the two year yield above 5 climbing higher and higher. Because it is triple wish day lets take a look at options. This is the skew index. I happen to like it as an observer over the past few years. In 2015 and then in 2018, there was a massive sellout as well. In 2019 of the pandemic it spiked. We are coming off of that spike now. Guy ive been hearing that more and more often from you. You have a few charts that have been causing me some concern. What will be watching . There is a meeting in spain, there will be of press conference and about an hour. There is the strike of the uaw, and we are waiting for president bidens remark and we think you will be addressing the detroit big three. We think that will come a little later on today. The subject of discussion this weekend, we will talk about sports. I love this way the way this show is evolving. New zealand will be playing soon in japan on sunday. This will be one of the mostwatched right in matches we will see but the pe game was great against wales. But it has been dominated by head injuries. It is no surprise that our producer is a kiwi and we are seeing all kiwis in black. Alix and longterm issues as well. This is when we need a split screen. Look, both guys. Ugh is Caroline Hyde. This is bloomberg. From the heart of where innovation collide in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde ed ludlow. Caroline im Caroline Hyde. Ed ludlow is off. Coming up, markets dropped, we talk all things ipo. Arm completes the biggest of the year. Instacart set to go public next week. We talked to the former ceo of sophia as his Company Joins others. How will the