Investors look ahead to earnings from the magnificent seven and from europes banks. U. S. Aid passes the house. Volodymyr zelenskyy says billions in new funding could help kyiv retake the initiative against russian forces. Plus, tesla Slashes Prices once again amid a drop in sales and its stock price as the headaches pile up for elon musk. Eyes turn to the crucial Earnings Report tomorrow. Lets check on markets then. Unwinding some of those risk off safe haven moves. A little more optimism percolating through markets, and there is a look ahead to the earnings season. 40 of the s p coming through with earnings this week. The mag seven about half of those companies, starting with tesla on tuesday. Then you have data out of the u. S. , growth data and the feds preferred inflation gauge which comes out on friday, will we be hearing from head officials around the need for higher for longer around the interestrate environment . Futures in europe pointing to gains of 0. 3 . Looking at s p futures up 0. 3 . Nasdaq futures pointing higher by 0. 5 , the context is the nasdaq 100 drops 2 friday, nvidia fell 10 by the end of the close. The nasdaq 100 dropping the most, the worst week it has had since november of 2022. Lets reflect and see how the unwind around safe haven moves for example, gold is softer today. The u. S. Twoyear crossing back about 5 . It is a big week for the auctions. We will see the appetite for the twos, fives and sevens as debt is auctioned off in the u. S. , and the test for whether yields are looking peaky. Eurodollar at 1. 06, little bit of softness for the dollar. Gold unwinding the move into the restatement, down almost a full percentage point at 2369. Print softer in the session, down 0. 8 . We will unpack that story with amrita sen in next 10 minutes. Lets cross over to asia where avril hong is standing by in singapore for a deep dive on these markets. Whats standing out to you . Avril we are seeing that similar play over in the asiapacific, where there is an unwinding of the safe haven bets , but that relief rally among stocks is underway. That being said, it was more pronounced from early in the session. The nikkei now paring earlier against. The csi 300 has flipped into negative territory. The hang seng though none of the sand outperformance today, as chinese authorities have unveiled measures to boost the standing of hong kong is a financial hub. This includes adding reits. That being said, on the taiex were seeing negative sentiment coming through, no thanks to the nvidia tumble last weekend. Among the aipac Semiconductor Related stocks, those are the ones driving the regions benchmark lower today. It is crucial for a week where we are seeing big tech earnings coming up, along with u. S. Data. Ill get to that but lets flip the board because it is not just that, that were watching. At the end of the week, were going to see the boj potentially holds rates, after the historic hike last month. Ill get to what were seeing on the bonds potentially. Lets look at this chart which shows you just how the ai theme might be unwinding. Tsmc, this stock has lost more than 100 billion of market value, in the span of about a week. This is a chart that shows you the volume of put options. At the end of last week, its bite to the highest level since january. Our colleague in the newsroom pointed out this is a sign of how options traders are dealing with this bearish wave of tsmc. Lets look at japan. Bonds if we can. It is about the boj at the end of the week, and how the japanese currency is weaker to an extent, that it could shift the inflation outlook for the country. This could mean the boj potentially announces the start of quantitative tightening. This could be from the cutting of bond purchases. This could put further upward pressure on japanese bonds. Tom avril hong in singapore with a break down, thank you indeed. Now to domestic politics of the u. S. And how that filtered internationally. The u. S. Senate expected to pass 95 billion in fresh aid for ukraine, israel and taiwan this week after the end of six months of political deadlock in the house. This aid will strengthen ukraine. We did lose the initiative there. Now we have the chance to stabilize the situation and overtake the initiative. Tom lets bring in bloomberg anchor kriti gupta. It seems like a done deal. It has to get to the president s desk. The senate is likely to approve it this week. What is in the package then . Kriti a lot for ukraine, 61 billion in aid, but it is israel and gaza as well. More defense replenishment for the Israeli Forces against iran specifically. As is about 9 billion of aid for gaza. The wording is important because democrats pushed for this. In terms of the makeup of this bill, this is a bipartisan bill that was getting pressure from the far right. Speaker johnson potentially in the crosshairs but able to pass this through. There is also money towards taiwan and other indopacific allies, some of it going toward summary infrastructure and development there. We are getting into the nittygritty but the reason this matters is the pacific command, the u. S. Naval forces basically, are historically underfunded. It is the least funded part of the entire Defense Budget for the United States. Thats why the summit we saw with the japan and the philippines is important because that is having the United States have that footprint in a way they cant manage on their own. Tom we will watch for chinese reaction for that funding for taiwan. To ukraine. The impact, what is it likely to be in terms of the military resilience for ukraine . Kriti the key pieces are 14 billion of replenishment. We are talking about air warfare, drones, etc. And about 13 billion of actual stockpiles rearmament, actual weapons going to fighters on the ground. About 7 million for u. S. Operations, that includes whatever u. S. Intelligence forces at, etc. Thats where that funding goes as well as 9. 5 billion in forgivable loans. This is important, it was first brought up by President Trump and now reimposed by president biden, if indeed he is elected to a second term, it is forgivable, and he intends to clear the debt for ukraine. This is also a turning point for the frontline. The last couple of weeks before this was passed, the expectation was that russia was making more advancements than expected. Letterman zelenskyy over the weekend saying this will change the game in terms of getting that age to the front lines and pushing back on that russian offensive. Tom kriti bucha around the details on the funding package coming through the u. S. , and the affected impact on the ground in ukraine. The focus this week shifting to company earnings. We will shift away from geopolitics. Some of the biggest names in global tech set to report. The socalled negatives and seven magnificent seven numbers arrive at a crucial time as investors look for an ai powered rebound in stocks. The feds preferred inflation gauge also coming out this week. For more, lets bring in mliv strategist Mark Cranfield. How are cross asset risks lining up this week, when we think about the earnings, the expectation around that ai catalyst in a week where we keep the finger on the gauge of inflation . Its huge, you cant underestimate this week at all, especially as the nasdaq 100 is down about 8 from the highs in march. For a lot of relative value people, they would see that as a good entry point to get back into what has been a strong bull market the past couple of years. Providing that the earnings gap in on at least as good expectations, hopefully even better, so you can imagine if we get a set of earnings which are inconclusive, or even slightly below par, things could look very shaky. Because those people who have been holding on, even though the market is down 8 , may decide to give up, especially as nvidia has got about another month until they report. We heard earlier, they had a bad finish to last week, dropping 10 in one day. The market clearly is nervous. Expectations are very high. We need a smooth week and there is so many people reporting here, it wouldnt be too much for somebody to make a mistake along the way. Really investors are on tenterhooks and as you mentioned, its a massive week for treasury refunding as well write weve got twoyear yield sitting at 5 , but it could go higher during the week. Tom nervousness i am the yield action links to what is happening with inflation. Pce data toward the event of the week, the affected number at 2. 6 is the forecast. Tying into expectations of stronger dollar. When we link all of that to the euro zone, is the euro the weak currency on this front when it comes to Dollar Strength . We hear increasingly dovish commentary from ecb officials. That is certainly what traders are thinking. They are mapping out the future rate cut expectations between ecb, bank of england and the fed. In the background, the bank of japan as well. At the moment, most traders think the ecb will be more rate cuts this year than either the fed or the bank of england. Which obviously puts the euro on the defensive. Of course, so far nobody has moved apart from the bank of japan, but its going to be hard for the European Central bank to walk back expectations of june and we have hard Christine Lagarde heard Christine Lagarde suggest that is one the first interestrate will be coming. We have heard more central bankers agreeing with her, mr. Villeroy over the weekend saying that oil prices will not get in the way of the ecb lowering rates as well. It would need a lot for people to think that the ecb will not happen in june. But who comes next and how much of a time cap is there between them and a cut from the bank of england or the reserve . Thats what traders are trying to gauge. For now, they are giving benefit of the doubt that the ecb wont be too far ahead of the others, but if we see that gap get wider, if the fed goes to the fourth quarter, it could be vulnerable for the euro. It would be the currency most at risk within the g10 group. Tom mliv strategist Mark Cranfield bringing analysis on a major we for these markets, and of the implications for the euro as we look ahead to that inflation print out of the u. S. The week ahead, earnings front and center, as mark was outlining, u. S. And european earnings. Against, 40 of the s p reporting, about half of the magnificent seven. The likes of the Lloyds Banking group and heineken, which has led global footprint. Deutsche bank, barclays, big week for european letter endures lenders. And remy cointreau, the french luxury drinks maker. We will be thinking about european pmis. Building out the picture as we hear from the likes of germanys olaf scholz and the imf suggesting that germanys economy is looking sounder. Of course, from a low base, whether the pmis build out that picture, that detail coming out on tuesday. As the u. S. House new sanctions on irans oil sector, we look at the impact on the market for crude. Amrita sen from Energy Aspects joins us next for the analysis. This is bloomberg. Tom israels Prime MinisterBenjamin Netanyahu condemned a reported plan to sanction an ultra Orthodox Army unit over alleged human rights abuses in the west bank. The Biden Administration is planning to announce the measures within days, blacklisting the battalion would really prohibited from receiving u. S. Military equipment or training. The u. S. House passed new sanctions on irans oil sector as part of a foreign aid package. The legislation broadens measures to include foreign ports, vessels and refineries that knowingly process worship iranian crude in violation of existing u. S. Sanctions. Was bring in the founder and director of research at energy aspect. A pleasure to have you in the studio this monday. Lets start with this iranian Oil Sanctions story. Does it take material iranian barrels out of the market . Amrita i think in theory it could have an impact. What i am concerned about is the only country that buys iranian oil is china. The only refineries within china, mostly they buy armenian oil, what we would call that teapots, the independent refiners that are not in the u. S. Financial system. They dont use u. S. Dollars, so it is not that easy or the u. S. To enforce anything on them. They can continue to buy it and they will. Maybe we can get a little bit off. You could potentially get two to 500,000 lower, but about a million will still flow into china. Tom two to 5000 lower, but given the scope of the chinese buying demand, that continues. There has been suggestion that up until recent events, the enforcement of existing sanctions had been relaxed. The Biden Administration denied thats whats been happening. As that started to reverse, the impact of the lack of enforcement of sanctions . Amrita the lack of enforcement is why iranian exports last year went up by 600,000 barrels a day. It was consistently suba million and and now it has gone up that much. The Biden Administration unofficially denies it but the numbers speak for itself. So far, we have not seen stricter enforcement. It has been more talk lets see with the new focus on whats going on with israel and iran, whether the u. S. Enforces it. What i want to highlight is that this is a u. S. Election year. Lets not kid ourselves. I think all sanctions are sanctions on paper, with anything that remotely causes oil prices to go up, i dont believe they will enforce it strongly. Tom what is the geopolitical risk premium priced into oil . Amrita not much. We have had a correction. The market has been inspecting potential escalation, we havent seen it. It has been calibrated. Thats why prices have been coming off a little bit. We are not expect an massive downside, but we expect small downside. Physically, this is the weakest period for oil anyways. We are bullish for summer but right now things will probably calm down. Tom what underpins that bullish view when it comes to the summer . Is it the demand story, supply . Amrita First Quarter we did not build inventories which is huge. Usually rebuild stocks, q1 was a counter seasonal draw. We are building now which is what it should be april and may. June onwards we get the decline in stocks. We are calling for 2 Million Barrels a day of vendor for drawdown in q3. Tom is there evidence, is the discipline there within opec . Are they holding the line on these cuts . Amrita opecplus as a whole, yes, there will be a few countries there is always a few culprits where compliance slips from time to time but saudi arabia is very much leading from the front. It tries to always get the group together in terms of cohesion. Overall opec compliance remains high and definitely people have been talking about 50 , it is well above that. Tom at what level does the strong dollar start to crude demand crimp demand . Amrita its not just strong dollar, if you look at the overall backup for risk assets with what treasury yields are doing, thats why oil prices probably soften in the nearterm. It is not necessarily all green and going for oil. Right now the dollar is okay versus where oil demand should be, but if the dollar continues to rise through this year, a lot of emerging markets feels the pressure. Tom how well supplied is china if we put it into the e. M. Category . Amrita im actually heading out there tonight. I will probably have more for you when i get back. For me most interesting thing on china has been, they have been buying a lot for their strategic reserves. Just like the u. S. Is depleting their reserves, china has been buying it. At 90 oil, they paused, the question is does that come back . Underlying user demand is pretty solid, especially for gasoline and people are traveling around. The weaknesses in diesel. The economy still isnt doing great, so it is a different composition. We see much more driving and flying but not really a manufacturing china, which is what we are used to. Tom nearterm softness and bullishness when it comes to the summer. 80. 63 on brent now, give us your forecast by year end. Amrita we call for 85 brent average. This is different from the camp of upper 90s by summer. We are Still Holding that view because it goes back to we tend to talk about geopolitics from the bullish side, but with the u. S. Election, they will try to tamp down the bullishness. If you get an outage because of geopolitics, we will go much higher. Tom amrita sen, thank you for carving some time out of your busy schedule, to give analysis on these oil markets. Founder and director of research at Energy Aspects. Donnas ghanas bonds jump as the financial minister expect a Draft Agreement from creditors by may. Story next. This is bloomberg. Tom happy monday. Lets get an update on ghanas debt situation. The finance minister expects a Draft Agreement with creditors next month following the agreement reached in january. Lets get more with Jennifer Zabasajja in johannesburg. What is the latest on ghanas debt restructure . This is significant. Especially that we are hearing from ghanas finance minister that this draft mou potentially will happen in may. This is the next step for ghana in their talks in restructuring their debt. This is been ongoing talks. They have hit a snag over the past few months. The fact that he sees this draft mou coming with some of ghanas biggest creditors including china and france, is significant. What happens next is where these talks go. They are in the 3 billion program with the imf and they had hit a snag because there were disagreements over what these haircuts would be between the country, and also, the investors. The question is what are the haircuts going to look like . Are they going to live up to what the imf is improving . And will this unlock this next tranche of funds for ghana. More broadly within the region, the imf did paint a rosy picture, which is good considering the past three years. We heard from the imf africa director who talked about his expectation that there are going to be bright spots excuse me bright spots Going Forward for the region. Especially if we think about the risks th