will it be enough for the ecb? we will discuss that any moment the weather outside is warm and windy. we are seeing european energy prices crashing right now, particularly in gas, and that is affecting the u.k.. look at centrica. alix: the weather is good and you still have to talk about it. this is going to be my life. the s&p is up. you have the jobs number coming out at 10, and that was looking for overall job openings at about 10.4 million, really high. then you had manufacturing and that felt more like a soft landing, employment staying high as well as the overall index. the data gets softer and demand gets weaker, but employment holds up. stop trying to make sense of all of that. microsoft is the worst loser in the s&p. salesforce doing really well. you have the china index up by almost 7%, very much the government backing spending within china, pledging to have targeted crude and monetary policy. in the bond market, you did have a continued bid in bond market yields lower, but you so i little confusion in th

the ecb has to look at the european economy as a whole. it cannot just concentrate on single countries. the problem is that there are two different visions across the euro, the northern is in favor of liberal economic policies. on the other hand you have france which has been pushing for softer approach. also having more lenient approach on regulations. france and germany are not on the same line when it comes to policy. i think at the moment there is a difference between france and his borders and germany and its borders. on the other hand i think the european central bank will continue with rising interest rates and i think the consequences for especially southern european countries will be critical. at the same time, you cannot allow countries like italy or other countries to fail because they are too big and this would have a major economic impact on the eurozone stability. >> so how do you stop them from failing? >> you keep supporting them, i'm afraid that is all you can do. the ecb as a whole has been flexible over the past few year

back to the ecb, we are spec and 50 as maria was saying, i think everybody else is expecting and ecb has been essentially pre-committing to this 50 basis point hike ever since december. there is not a single governing council member that spoke against this course of action. in that sense, it is indeed the right framing because it is all about marge come all about signaling how are they going to continue. if you think about the framing of the fight against inflation in december, there was a need from the perspective of the ecb if you sought mechanically, taking the projections that show core inflation overshooting in 2025 and was clear more tightening needs to be on the road. the increased the rate pricing from 285i think to 325 by 50 basis points. ever since the economy has improved in a sense that there is less likelihood of a shallow recession in the near term and of course that in itself takes away from the pressures on inflation, so it does not change the horror story so basically you would want to continue, signal more is to come. alix: more to come, does that mean they can down

does the ecb hate these conversations? jana: i think everybody is aware that a lot of spending needs to happen also in europe when you talk about the transition, that is ultimately what people are concerned about, getting inflation down, rising interest rates at the same time. you have to spend on graining the economy. the ecb always says they are very much concerned about the euro zone. they are quite confident they can get the job done. what happens in the u.s., they monitor but their focus is very much on what is happening at home. tom: it really is a fascinating dynamic in terms of the european response to that inflation reduction act. i wonder if we need to start thinking about sovereign debt again. up double digits at least at the front end. i'm thinking the two-year. is there a concern. are you hearing any angst around the peripherals or has that been put to bed? jana: i think the ecb is very clear and it has a very solid layer of safety nets to deal with any problems so far. we have not even heard that there is maj

out of the ecb bank lending survey in lockstep with the numbers from unicredit and ecb ecb saying that the tightening in corporate credit standards was the largest since the 2011 sovereign debt crisis according to the lending survey saying that eurozone banks tightened credit standards in the fourth quarter and in particular, the banks continue tightening of standards in the first quarter of this year as well that rising interest rates make a substantial debt on loan demand all the risk that could still be facing these financial counters. these lenders at this point with loan demand to drop further. indeed, tightening of credit standard in the fourth quarter the bank lending survey pointing out those risks in the market, some of which have been highlighted by the ceos we have shown to from ubs and unicredit. the quick look at the market we have been negative for most of the morning yes, markets have been open for only an hour more than 2/3 weaker for the stoxx 600. we had seen the banks go a little heiigher if we go to the sectors. in the european markets, we expected the banks to cont

that does not feel like a bid from the ecb that we will go. marcus: the easy bit will be 50 basis points next time and they have to because people will laugh at them more than they have. they will not be able to do much more than that. maximum number is 50 basis points. they will wait for the fed to go down and then have a think and realize what is the point of having 1000 plus economist if they cannot work out how inflation actually works. you can see the shop -- sharp drop in energy prices and we see it all falling. really there is a blinking loud and clear about -- across europe. yes core inflation will be sticky, it will slow to rise and fall. they have to get through this and that is the whole point of what they are supposed to be doing. and they are being tough but the rule is that they will never be able to push through it. guy: can they cut with sticky core inflation? marcus: i do not think we are talking until later this year. but certainly, i do not think they will be cutting for quite some while they might have to pause sooner than

orchid the ecb surprise -- for could the ecb come up with surprises? hannah: the market is predicting a 25 basis point hike. but the focus is going to be on the wording around that. what we're anticipating is it is likely he will indicate ongoing increases, or leave the door open for ongoing increases. that is key in terms of the market not getting carried away, and there is still a focus on central banks. francine: is the market getting carried away? they seem to have latched on to earnings, saying they were not as bad as expected, let's rally. hannah: if we look at january, it looks like it did get a bit carried away. in the etf space, we saw 20% of all flows that we saw in 2022 just within that one month, so a huge amount. we saw heavy flows into emerging market in europe. a very risk on tone. given that was in anticipation that we have reached peak rates, but given central banks are still hiking, and we have seen positive data points but it still hasn't created a trend. there is some caution to be warranted. francine: is this because we haven't rea

guy: we also are not talking about the ecb. the ecb at every opportunity is basically signaling that it wants to hit this demand story very hard. it's a bit like in the states, the market doesn't want to listen to the fed. guest: exactly. in europe, one reason for that is we are starting to see the inflation data slowing significantly. part of that is it has been a better winter for most of us and gas prices have not spiked as much. what the ecb officials are getting it is they're not just worried about energy, they're also worried about the strength of the underlying demand and inflation expectations getting anchored. they want to make sure people don't get too complacent about inflation. alix: i hear you on that not all the good news is priced in, but is a lot of it priced in? you look at the luxury stocks, a huge run. diageo disappoints. the bar is really high. guest: i get that point and i think it's not going to be a straight line. what we are hearing from a lot of the earnings results so far is that yes, it has been a qua

also how we are not going to get the ecb inflation forecast but how the ecb are thinking about falling natural gas prices. is it a positive shock for demand growth or is it easing the supply pressures that brought inflation last year? i expect them to be on the hawkish side when it comes to inflation because it is easy to subsequently change their minds rather than to keep flip-flopping about their approach. alix: what happens to bonds over in europe over the next 48 hours? we get that pre-look to march with a 50 base -- a 50 basis points hike with the ecb. myles: the big picture where you need to take a step back, last year was a terrible year for bonds. bond yields drove genetically higher inflation. inflation is beginning to rollover particularly in the u.s.. europe is falling behind. u.s. inflation of elements are much more important for global bond markets than european inflation development. valuations are now attractive. from the big picture perspective, rather than getting into what happens over the next 48 hours, now is the time to be investing into bonds. we are looking for o

the ecb if we are looking at 125 from here onwards, the ecb is moving into restrictive territory but it is not as restrictive as the fed. that is something they can sustain and is very much in line with their inflation target. francine: thank you so much. sonja marten. coming up, the german chancellor olaf scholz visit south america this weekend so let's find out what he wants from the trip. that is coming up next. this is bloomberg. ♪ welcome back to the open everyone. 41 minutes into the european trading day. a lot of pressure on the dax and cac all down. the focus not only on some things we are seeing, which is positioning ahead of the fed and the ecb and the bank of england but also a little bit of pressure because of the adani route hitting $72 billion as a fight with hindenburg is intensifying. let's check in on some stocks that are on the move. note -- renault shares slipping after it is going to change the alliance with nissan. this is a historic rebalancing. renault lorded stake in nissan ash lowered its stake in nissan. the other stock mover is. shall. they huge impact on

the ecb will publish the account of its december policy meeting followed by u.s. initial jobless claims. then the ecb's isabel schnabel and susan collins are due to speak at separate events. and finally, we will hear from two of the most influential fomc members, lael brainard, the vice chair, and john williams, speaking tonight. the best start to a year for bond returns is helping fuel and unprecedented debt sale bonanza by governments and companies around the world. global bond sales have hit nearly $600 billion in 2023 so far. what are we, january 19? wow. i'm joined by valerie. all of last year, the question was who was going to buy these bonds? and that dynamic has changed. >> changed quickly and it turns out everyone wants to buy these bonds. investors globally are gobbling up this issuance. we are seeing alongside a bond rally that is showing a strong demand behind these deals. yields are tasty and investors don't want to miss out after such a long era of low yields. look, i think they are probably looking ahead seen we are pricing in central bank cuts late

the ecb. against this backdrop, i think what they will be looking at when it comes to fiscal response is full dashers to be targeted in order not to trigger even more risks when it comes to inflation outlook. guy: quite happy over at the ecb over one await now, 109 earlier on -- 108, 109 earlier on? the currency has strengthened significantly. it has been a trade stock, and energy shot. currency with which we buy it has been stronger. how big an impact is this going to have? anna: low energy prices, stronger euro is positive in terms of bringing inflation down faster. however, what ecb is focusing on most of all is wage growth and what it means for core inflation. yes, currency, energy prices all matters. unless we see significant signs of underlying inflation easing and essentially aggregating the risks of second-round effects, stronger wage growth, etc., we would think the ecb will remain relatively cautious. guy: will we end up in a situation where the euro zone has structurally higher infl

time, ecb governor councilmember not due to speak. he wants to speak on what he will see in terms of 50 basis point rate hikes. 9:00 a.m. we have pmi's with the u.k. at nine: 30 am. the u.s. a little later. that will give us some flesh on the bones are on the picture for the economy in both europe and the u.s.. 9:4 five u.k. time madame lagarde will deliver a video message in a conference in croatia. microsoft reporting earnings at 10:30 yen u.k. time kicking off a significant week for the tech sector. manus: tech sector having major strides in job cutting over the past number of days. coming up, tech stocks and focus. they feel gains on wall street. tom, will he have a less aggressive federal reserve? we talk markets. this is bloomberg. ♪ introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number. >> as bearish as we are on earni

one is ukraine and one is the ecb. start with that and bring in matheson, what's your interpretation of the tanks being delivered to ukraine. how does that change the narrative? >> obviously these are advanced western made tanks much better than anything ukraine has had in the past 11 months. they've been relying on soviet era made tanks. these can do a lot of work on the ground to benefit ukraine. it's very much a message from europe and the u.s.. the problem is it will take months to get there at the earliest they are looking at three months. the abrams tanks much longer. what were looking at is the possibility russia mounts a fresh offensive as soon as next month because of the changes coming out of winter and the terrain changes also we could see a fresh push by russia possibly in the east and from the north, these tanks won't be there in time to help ukraine with that. this is a real concern that might open the window for russia to make advances. >> presumably russia will take advantage of this window. as a result

the ecb was the dominant consensus. how much does that get ratified by what we see in this week's decisions? on the earnings, we talked about what is more important. thursday we have apple, amazon, and alphabet. meta comes out on thursday. if you see the pain we have seen in semiconductors push into tech stocks, how does that undermine the rally? it has been tremendous. jonathan: alphabet of 12%. amazon up 21%. lisa: people were saying tech wasn't going to lead and what do you make of this? thursday, nonfarm productivity and jobless claims. and friday the nonfarm payrolls report. how long do these -- load of these numbers have two -- have to go? that could change it. jonathan: q remember the consensus coming into 2023? it was dip and rip. wasn't the second half meant to be the better half? haven't we changed that? lisa: the rip and dipped turned in the second week of january and now we just seems to be never dip. steve chiavarone joined us now from federated global investment. do you chase this rally? steve: we got on t

the ecb hawks are out in full force. a governing member called for a 50 basis point hike in february and march, saying the time for tightening is still far away. garfield, talk us through what to expect from the ecb in the coming months. we have heard more of the hawks come into the force, but it is far from consensus, it would seem at this point. garfield: it is not consensus, a very different situation to what we've got in the u.s. and some of the other economies where central banks are further along with what they are trying to do. rates traders are expecting another 1.5 percentage points of hikes from the ecb. that is 350 basis point hikes. they expect probably a couple of those to be 50 basis point hikes, which lines up reasonably well with some of the ecb members who are seen as being hawkish. the european union is looking at an economy showing a fair bit of resilience and that has been common around the globe. resilient economies plus elevated inflation equals center -- central bankers have the ability and incenti

why the sudden change in heart from the ecb policymakers? paul: i think a really obvious answer is the weather. you might not know it looking at manus, but the unseasonably warm temperatures we have had over this winter have enabled storage stocks in europe to remain very full. despite the demand season peaking. and the preparations that went into that to ensure they were full out of schedule. that has really does -- depressed those prices a long way, and also power prices in sync with that tanking -- taking a lawn of their cue from gas. taking away some of their inflationary impulse that has been the big concern for the ecb. it opens the door for a slowdown in the case of hikes. it is not definitive by any means. the market is still priced for 50. it does give the opportunity for the ecb to begin to move at a slower pace if it wants to take that option. dani: hey i just also say, it is negative two degrees celsius in london. before anyone gets too concerned. paul, thank you so much. goldman sachs and morgan stanley's first-quarter earnings

ecb may cut in 2024. what about the bank of england >> the bank of england in a similar spot to the ecb. again, the last minutes from the last meeting suggested the wage data has been stronger than they expected employment continues to be stronger than expected so we think the bank of england will get to 4% because they are already at 3%. we think they will get to 4% and they also have to hold steady. potential growth in the uk is low. we have a recession and close to 3% contraction in the economy. that will not be enough of a output cap to generate that disinflation that the bank of england needs to cut rate any time soon. >> hatel, thank you for joining us interesting views. senior economist from legal investment management. >>> shares in ge health care rose in the debut. this is a plan to split ge into three companies with the energy segment spun off next year the ceo of ge healthcare is confident about the firm's prospects. >> one-time related issues in 2022 with covid and supply chain that everybody

>> ecb. >> ecb. >> the fed. >> say that again? >> the fed. >> all right, thank you all so much. we are counting down to the big week next week with the fed rate decision on wednesday. the consensus is for 25 basis points and we will see if we get a hawkish jerome powell at 2:30 p.m. from new york, that does it for us, same time, same eyes next week. this is bloomberg real yield and this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh i screwed up. mhm. avalarahhh i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. (jennifer) the reason why golo customers have such l

guy: let's focus on the ecb for a moment. what was over tightening in the scenario you laid out from the ecb to look like. skylar: we had the ecb meeting in december. i think they were on a very hawkish path. it was verizon messaging they were committed to getting to a higher terminal rate. for rates to be restrictive for longer. in this they don't have the dot plot like the fed does so they commit through projections. while they are being criticized for being inaccurate they are showing inflation will stay remarkably above target through 2025 regardless of an upcoming recession. core inflation is expected to be at more than double the target by the end of 20. at the same time a recession will go modest and now become the official forecast. it seems the market as much more faith in the ecb getting rates higher for longer than they do the fed. the terminal rate price dropped and i think the main reason for this is that there needs to be a policy laggard. it's being restrictive and closer to neutral. because they started their

the ecb, the speakers we heard from, making it clear that is not the case, and the ecb account came out. >> a large number of officials wanted a basis point hike rather than 50. at the last meeting, read there is a hawkish bias, but you have christine lagarde. she is clear. she spoke at davos and it's crystal clear about how the market should be interpreting the ecb and the hikes. ask on inflation, we have way too high numbers. i know that a lot of journalists made a big fuss about the fact that headline numbers had gone down most recently, and you also mentioned that we have to look at core inflation which is critically important, so we look at all of the composition of inflation from head to sticky to strip out. all sorts of elements. inflation, by all accounts. however you look at it is too high. our interpretation of the ecb is to bring it back to 2% in a timely manner and take all the measures we can to do that, which is why we have increased interest rates by 250 basis points, and we shall stay the course until such time as we have moved into a restrictive territory for long enoug

but that also ties in and empowers the ecb to go further. it's fascinating the lack of clarity around the data. alix: we've been talking recession for a while so are we in it now? that's what happens when everyone talks about the same thing and there is consensus. it's interesting data to kick it off tom: turning to the global economy, the imf sees a turning point for the global economy. it raised its growth outlook for the first time in a year. we spoke with the chief economist at the imf. >> what we are looking at is what effectively will still be a challenging europe but it's an upgrade compared to what we were expecting back in october. this is due to resilience. we have had more resilient households in the u.s., resilience to the energy crisis in europe, labor markets have been heightened and in addition, you have the reopening of the chinese economy that is promising to give a boost to global activity. tom: resilience, resilience, resilience. our question of the day is turning point? are we there and what does it mean? let's bring in j

even the overall reaction of the ecb means that the rate is going to peak at 3%. probably in q2 which is higher than we were expecting before we were expecting a peak at 2.25% or 3% if this is right on the economic outlook, markets have to price further and bund yields further. >> in the words of jay powell, the fed chair, there is some ways to go in your view as far as the ecb is concerned and the terminal rate. what does it that do to the europe economy i read a note in december and the biggest risk to the europe economy is not the energy crisis, but the monetary tightening that is delivered by the ecb. >> the ecb was late in starting hiking rates they made comments on whether the rate cycle is closer to the end or just at the middle. yeah, higher interest rates will become one key of the 2023 outlook for the eurozone definitely 2023 is a complicated year for the european economy. a year where adjustments to the geopolitical and price hikes will continue to be carried out and adjustments to higher interest rates in terms of balance with spending and saving and m

it will likely stop before the ecb, yes. alix: it stops and for the ecb. what will the economy look like that they have to stop? melanie: when they have to stop hiking rates? the inflation picture changes considerably. at this point, inflation looks set to fall. we will have some volatility over the coming months because we have the in the the fiscal aid the drag down the german inflation number. but they will have a price cap which should make energy come down further. then we have italy deciding it will change electricity bills based on a monthly basis rather than quarterly. the wholesale energy prices will help to bring down energy prices. we have the core inflation rate staying quite sticky. on balance, we think inflation will fall and once it does hit those levels of 4%, 5% and the ecb thinks we are heading down here. it has an inflation target of 2%. guy: can i ask you a question about the inflation reduction act? everyone in dabo seems to think this is the best thing that ever happened in the american economy will be so much better off for it. if th

the ecb could slow rate hikes this week as well. but you have to kind of take that with a grain of salt. there is a chance that central banks and correlate across the world but at the same time, europe is dealing with supply-side nation. a lot of candidate is dealing with a much different situation. i'm really trying to focus on the fed here and what we are seeing in the u.s. and what the fed has done historically around moments like these. tom: did you take the jp morgan advice, given that uncertainty, given the expectations of higher rates for longer? callie: we are optimistic, we are hoping the economy can delay a recession but we want to be realistic here we all know sectors are moving at different paces right now. we want people to take a step back. if you believe that a company could have a recession. if you don't, look at defensive's, look to add some growth if the fed ends up cutting rates. in the future, not anytime soon. alix: the dow is now up by 2/10. the s&p is still down by 3/10. the nasdaq is down by 1%. but what i fi

and investors weighing up commentary from ecb officials. klaas knot saying he was to see at least 250 basis point hikes going forward. and on the flipside, fed officials softening their town, pointing to 25 basis points at the next meeting, and that gave a rally to nasdaq friday, the s&p ended up 1.9%. let's see how things are playing out for sectors, nasdaq ending up friday close to 3% in terms of gains. we will see if that can be sustained given challenges across the tech sector. futures range bound, much of asia is closed for the lunar new year holiday. euro-dollar strengthening, currently 1.09, gain of .5%. the 10-year in italy up two basis points, weighing up the hawkish commentary from ecb officials, just over four on the benchmark in italy. and bitcoin gaining, pointing to modest risk on sentiment, gains of .4%, just about $22,000 now. francine: we have some losses, but they are not huge, chemicals, health care and utilities down .2%. on the upside, technology, real estate and auto parts and banks gaining. and individual stocks, the

i will look back to that divergence call from you in terms of ecb versus fed, do you expect the ecb to be more aggressive in terms of rate hikes in the quarters ahead? that divergence, and to what extent that is priced in markets? where are you expecting to see that felt across asset classes? is it priced in? christian: we think that divergence will become visible in february. the ecb will hike by 50 basis points in february, and the fed will only hike 25. and we expect further rate hikes by the ecb going into the summer because we have 5.2 percent inflation in the euro area, while the fed will likely end its rate hiking cycle after the hike in february. that is to some extent priced in rates markets, you see 62 points priced into the u.s. curve, and around 130 priced into the euro area curve. the best way to play that is the curve market, or it is not priced. we think eur could -- euro could appreciate substantially if that monetary policy were to materialize the way we expect it to. francine: coming up, goldman sachs planning massive job cuts with positions in its core training and b

sovereign bond yields edge higher as spanish accelerates in the month of january days ahead of the ecb next meeting. and european chipmaker having issues as the chip wars heats up and japanese officials limit the sale of advanced chip technology to china >>> it is a data filled week this is no change. today coming through with some numbers that have just come out with regards to germany's gdp numbers. on a quarter by quarter basis for the fourth, down 0.2%. it was expected to be flat for the period, but down it went on the preliminary basis. fourth quarter gdp number down 0 conti0.2% for germany when you look at the adjusted numbers from the year on year basis, it actually went up 1.1% as opposed to a forecast of 1.3% yes, resilient, but little bit less than expected when the number is taken a look at. the overall figure 0.2% for quarter on quarter and 1.1% for the fourth quarter forecast. >> you talk about the sequencing a couple of weeks back, we got the full year number for 2022. then this q4 gdp and people were expecting to come down the expectation based on the 2022 number as a wh

christine lagarde, head of the ecb noted that the fight against inflation is not over. she will stay the course fighting it with more hikes on the way. whether those are 50 basis point hikes is the key question and how many is really important as well you can see general mixed market picture for now. trending to the negative are the pmi data coming out today. a return to growth for the most part, but still some weakness with all of the pmi numbers still sit in contraction territory. on to the board. there has been weakness across the dollar it is sitting on the back foot today with the euro still hovering around the nine-month highs for the most part. you see it is pretty much flat in today's picture dollar has given back gain against the yen. 130 is where we sit. down .30%. traders continuing to gauge the u.s. recession and the path of the federal reserve. the market pricing in a 25 basis point hike sp >>> speaking of the u.s., the u.s. department of justice could sue google the over anti-trust laws today the tech giant maintains its dominance in the digital advertisin

it's not necessarily just about the fed and ecb now. we also had pmi data, china's january economic data didn't show that big jump we were expecting. james: there was a big jump. the comparison is january from december. december was still very depressed, and everyone seemed to have had covid, so factories where we went traveling around to different areas, they had closed early partly because of the holiday and because a lot of workers had covid and were recovering. december was very depressed, january was a holiday but companies are much more bullish. even though a lot of factories are still closed, companies seem much more bullish about their outlook. you see that reflected in the numbers. the question is whether that follows through to february and march. if we see real economic data that shows a real jump in activity and retail sales, industrial output, then you will start to really trust that there is an economic rebound happening. the per luminary numbers we have had show that it is starting to happen. dani: we will wait for that c

that helps central banks including the fed and the ecb wooding pressure on wti in france. coming up, china is said deposit massive investments in the chip industry to compete with the u.s. as covid resurgence threatens the economy. we will have the full story on that next. this is bloomberg. ♪ francine: welcome back to the open everyone, 30 minutes until the european trading day. europe opens higher after hong kong shares lead to in asia. former fed official dudley says a u.s. recession is pretty likely. china is set to be moving away from massive spending on semi conductors a resurgence of covid strains at the nation finances. kevin mccarthy loses three rounds of voting to become u.s. speaker of the house foreshadowing deepening legislative gridlock in washington. tom, there's so much news to get through. if you're looking at the markets they are on a high today. tom: yes risk on. that is reflected in bond markets and currencies. the u.s. dollar is lower. of course in equities. you saw tesla and apple down yesterday. the u.s. session ended in the red. the optimism is th

action from central banks and rhetoric about from the ecb and the fed. coming up we discuss the food and beverage sector and high inflation environments. we will speak to takeshi niinami the ceo of suntory holdings. that is next. this is bloomberg. ♪ tom: welcome back to the open. we are 11 minutes into the european trading day. modest gains making up for yesterday's losses. gains to tens of a percent. a rally in mainland china and hong kong with the tech sector. futures in the u.s. pointing to gains of 3/10 of a percent eared marginal selling of u.s. traders yield up if you -- let's get back to the bloomberg world economic forum which we are covering. francine lacqua is on the ground with another great interview and the owners of a portfolio of wines, beers, and spirits. francine, good morning. francine: i am delighted to be joined by takeshi niinami the ceo of suntory holdings. thank you for joining us. i have many questions about the bank of japan and japanese wages. let's start with what you are seeing the impact of a china reopening being on your

the ecb announced and rolled out these terms. we think there's going to be some renewed focus on the issue. ultimately we think it will benefit from these tailwinds that we just talked about. alix: how do you look at china and the input there. that's got a raise prices. if you use supply chains of the demand is there, that's a good thing three how do you factor that into the model. >> you've stronger demand in china, more trade, europe can sell more goods and that's positive for germany. what is different this time around is the energy situation. an earlier reopening in china we think is going to have some affect because europe will need to compete with a reopened china for gas's that's going to limit some of the usual benefits from that spillover of stronger growth in china. equally there might be some renewed bottlenecks as china reopens and we see how demand and supply in china turns out. the bottom line is the china reopening is good for europe particularly for germany and there's an important reason why we operate on that co

live from davos and london i'm joumanna bercetche these are your headlines ecb governing counsel member says there will be more 50 basis point hikes to come as price pressure still hasn't peaked >> we will have do what we have to do. core inflation has not yet turned the corner in the euro area that means the market developments that i've seen over the last two weeks or so are not entirely welcome >>> european commission vice president tells cnbc that discriminatory aspects of the u.s. inflation reduction act should be addressed urging further negotiations >> right now, we are focusing on a solution and looking also at the european economic response to our competitor issues we are facing high energy prices >>> the ceo of novartis tells cnbc that high inflation is putting pressure on investment, but warns europe should not let itself fall behind in r&d >> european commission thinks it is not a given that the industries will reminain in eurp for the long run. >>> european equity sink oil and gas leading the losses. >>> welcome to a special he -- edition of "street signs." norway central b

the ecb seems to have a more clever strategy going more cautious. dani: what would be the ceiling if we see some of that dollar strength come through? esther: we have a target of 1.10 later this year but we have to stress that there are significant risks. in particular, this divergent proofing fed and market view that could bring euro-dollar down again. temporarily. dani: so wonderful to speak with you this morning, esther reichelt, fx strategist at commerzbank. scenes out of brazil have a distinct echo of the pro-trump u.s. capitol insurrection two years ago. we will bring you the latest. this is bloomberg. ♪ manus: it's your monday addition of daybreak europe. let's get across to delhi for the first word news. -- to doha for the first word news. >> thousands of supporters of ex-president of ex-president the brazil gyre bolsonaro have stormed congress, a week after president lula da silva took office. protesters ransacked congress before security officers regained control of a capital. bolsonaro says the storming of government buildings by suppor

jonathan: you mentioned the ecb. in 2023, does the ecb hike more than the fed? jeremy: i think it does. you have to paraphrase margaret thatcher into it with the interest rate story. it seems likely to go along with the comments of the weekend that will's -- we will see moves from the ecb the next two meetings. let does suggest the ecb will be more hawkish than the fed, because if the market is right and obviously arc it's tend to be aggressive in terms of calling for moderation for policy tightening from the fed, that suggest the ecb will be more hawkish. jonathan: so you want to play that against the yen and euro? jeremy: the yen is an instrument. we have seen policy uncertainty after the adjustment in the yield curve control in december. the minutes from the meeting released overnight suggest the boj members were worried about communication aspects of the change. it was always going to be the case to expect housing normalization from the boj. after he leaves office, i think there is still scope for yen appreciation. we would be looking for it in the near term

christine lagarde was saying the ecb should defend on the data. they are still looking at that core inflation. i want to bring in michael mckee one more time and talk about these headlines. at the core is still the issue of whether or not inflation is crucial. that is way that is way the france story comes in handy. france, italy, they are them manufacturing hubs along with germany but for a lot of europe. if you are starting to see french inflation peaked, that is good news. i want to bring in mike mckee. give me your take on these headlines. michael: i think the accra phone hit the terminal rate a few moments ago. the general consensus is you will get to the terminal rate in the midsummer. milroy is not out of consensus there but he seems to be sending a message that he does not want the ecb to go too far too fast. he suggests there has been some good news. about inflation and about growth in france. so they should be -- the ecb should not be obsessed with mechanically just raising rates. they should take into account data. they should be data-d

these are your headlines cnbc prepares to speak to the president of the ecb and governor of the bank of japan as business leaders hope for a short and shallow recession despite the policrisis >> we have to be careful and probably with a benefit of insight of monetary policy >>> japanese inflation surges to a 41-year high of 4% in december double the doj target as they stick to the ultra easing policy. >>> and the dutch prime minister doesn't believe the inflation reduction act is meant to hurt europe >> closing the gap on paris. we have always asked for that. it could be an unintended consequence for european businesses those have to be addressed >>> i'm arabile gumede in london netflix smashing subscriber numbers as well adding 7 million new users while the company's co-founder reid hastings steps down >> they are ready. that's driving the timing. i could not be happier >>> hello. welcome to the special coverage. it has been a huge week from the world economic forum so many topics from cybersecurity and what we are seeing on the economy. we cycled right back to the economics to clos

is the ecb going to be more hawkish than the fed? brent crude up 1.8 nine. commodities seem to be fairly positive now. alix: in the u.s., the rally rolls on. we are about 50 points away from that 200 day moving average, but a lot still sounding cautious. within that, you are seeing commodities do well like the energy index. the dollar index down .7%, continuing that down slide over the last week. looking at the indicator for more downside to come, how do you express a weaker dollar position? those are the two macro factors. at the micro level, i think lulu and macy's are fascinating. lulu still says people are in their stores shopping. macy's, a little different. they said holiday traffic missed estimates. inventories are a little cleaner, but they are cautious. if you are managing your margins like this and your topline starts to fall because people start losing their jobs, you are in a tough spot. these guys are highlighting it. guy: it is interesting, what is happening with luxuries in europe. 55 week highs for all these companies today. the list goes on

is market prepped for an ecb that is more hawkish than a fed. will that be an enormous regime shipped? kit: it can look like one. you have to put the context in. it feels like the end of the dollar cycle, which looks as if it was ending in 2019 has continued to 2020 and 2022 because of a massive financial easing and then a u.s. trade shot and now the fed is done and the dollar has peaked and is higher than 1985 in european economy is crawling out of the worst bit of the war in ukraine. we cannot -- it feels as if we are at a turning point in the dollar cycle that sends the dollar down. after that we throw the caveats. it would be good for the dollar bad for the euro. it would be difficult to change the story. right now we have a following wind on the story of the will hike rates by significantly more. guy: if the u.k. economy avoids a recession which it might do, is that deferred? if it is, does that take the bank of england higher than where the market is pricing? kit: i do not know if it takes the pound higher. that is a more interesting quest

are you anticipating any surprises out of the ecb or boe? guest: let me address the ecb. there has been a lot of sympathy rally so to speak. there was a good deal of it a couple of weeks ago. people were translating what's going on with the u.s. to the european rates markets and european expectations for ecb rate hikes. they're looking for the ecb to downshift not this meeting where they signal they are going to do 50 basis points but at the next meeting. i think that is incorrect. the ecb is in a very different position than the fed. if you look at real rates in the u.s. or check did real rates, -- projected real rates, you are talking about real rates that are positive in the u.s. will be positive but 150 basis points. the ecb is looking at core inflation somewhere around 4% for this year and they are it to percent so they are 200 basis points below. even after the next height, they will still be 50 basis points below their expectation. the core inflation prints in the eurozone are not cooperating the way they are starting to cooperate in the u.s. and europe. i think th

forgot that the news conference from ecb that was the most hawkish ecb news conference i have ever seen. so blunt and to the point. it was were going to go again, were going to go again. tom: she has to speak to her constituencies. jonathan: that was a news conference. almost said that was the bloomberg's bank meeting. tom: how is it good to be 2023? lisa: we have been back for four days. you said it's already been a long year. jonathan: is like say happy and no more. lisa: you told me that. i stopped immediately. jonathan: you never wished anybody a happy new year. lisa: i wished you a happy new year. can we talk about some interesting news going on in the market right now? look at tesla shares. they are down more than 6% and the why is interesting. they have been bombarded, we heard about the situation with elon musk but the latest one is really more interesting. they are loping their prices further in china which no means that certain cars by tesla in china are more than 40% cheaper than cars in the u.s. just to give you a sense. it shows a weakness in demand and difficulty in compet

therefore, the ecb can weigh it. we don't expect the ecb to have to operate from here. i think what goldman says is that you shouldn't as negative as you were before. francine: but does it mean that you actually come in and by certain asset classes in europe? >> yes, we are buying -- the one we have been buying -- the one we like is ones where there are value. that is our preference. we are buying global equities and also sustainable equities. but in europe specifically, i think the relatively high ratings means that we buy high yield relative to longer duration. you have to ask yourself, do you buy this bread, do you buy the duration? and how much do you trust the central bank? francine: thank you so much. i have to say, you also have a very cool poster behind you. i can't make out if it is a beer or an automobile. he stays with us. apple goes its own way. the iphone manufacturer is said to be moving to in-house designs for some of its most important chips. the full story next and this is bloomberg. ♪ tom: welcome back to the open. 12 minutes into the european tradin

>> the ecb to some extent has to act on inflation. because of the mild winter energy prices are clearly coming down now. natural gas dropping and potentially a slowdown, but also the ecb is under pressure because we have countries like italy are those with a high amount of debt, so that ecb is really in trouble not to put those countries into more trouble. it's a very different situation when the fed can hike, which is more independent of thinking about potentially putting the country into recession or not. dani: thank you so much for your time this morning. the deputy chief investment officer at tovan. we will have the latest on sam bankman-fried's day in court where you faces eight counts of fraud, money laundering and other crimes. this is bloomberg. ♪ dani: ftx founder sam bankman-fried has pled not guilty to criminal charges and is set to face trial in october. we have this update from the courthouse in manhattan. >> sam bankman-fried appeared at the southern district of new york in a manhattan court in downtown new york city t

counsel of the ecb and he said the guidance from lagarde of around 50 basis points remains valid after the bloomberg scoop yesterday. officials are considering a step down in march possibly to 25 basis points. that switch over to see how things are looking across assets. modest losses that we saw yesterday. futures gains of two times of a percent stating about 4000. the 10 year 3.4793. money flowing in over -- you saw those moves on jgb's, linking to the decision by the boj to stick with the yield curve control. 130 now and japanese yen. brent rallying at $86 a barrel nine tens of a percent as a vice premier and china saying the growth will return to pre-pandemic levels later this year. expectations have been great for that commodity later this year. let's get back to the main market story of the day. the bank of japan governor kuroda says he will not -- he does not see the need to widen the yield range further after the boj maintains the program defying calls to abandon the policy. for more i am joined by kathleen hays who is in tokyo for us. the big surprise of course was no change.

where are you on the trajectory for ecb rate hikes? where do you see the terminal rate in frankfurt? thanos: 3.5%. we see 50 dips in the next two meetings. i was surprised with the headlines yesterday. i thought in them at the december meeting the ecb gave a clear message that they will do whatever it takes to fight inflation. inflation is still high. i think they have to stay the course and continue hiking. if anything, it is for an even higher terminal rate than we .5%. jonathan: thanos vamvakidis there. a brief break of one away. tom: what is the view? 110, 112? jonathan: my moment on the ecb is that there is some division emerging. there could be a conversation about stepping down from 50 to 25. there was clear violence -- clear guidance from christine lagarde that they would do 50 for the next few meetings. tom: i'm not doing forward guidance after this week. you don't have a glide path and europe as defined as the united states. i'm not saying we are going to do percent here, but there is this real belief in disinflation in the u

currently 2% from the ecb. the dax down 23 points. the ftse down 11 points. the highest wage growth on record for the u.k. underscoring the need for the boe to hike again, 50 basis points is the expectation. the other factor is the china data investors are going through, but for the full year, growth going in above estimates. 3% in 2022 for china as it wrestled with covid zero and unwinding of that policy, but well below the target the government set itself. then questions around the population declining for the first time since the 1960's when there was mass starvation. across sectors, you see gains by chemicals up 0.2%. at the bottom of the list, down 0.6%. strength in the currency space. the bloomberg dollar index is range bound. it is a big day for u.s. bank earnings. that season continues. goldman sachs and morgan stanley report today. charlie, what will investors hone in on? charlie: jp morgan had a miss on friday, citigroup same ballpark. that is estimated to be in a similar range for goldman and morgan stanley later today. there will be a focus on gol

ecb can feel comfortable, well into next year and even later before the ecb starts to pivot. we think it will come some way after the fed. you're just not seeing the turnaround in inflation to the extent you are in the u.s. the big? is the -- the big question mark is the gas prices. you have china reopening and could have a positive effect on eurozone inflation and downward effect the following gas price. anna: we have talked about the euro zone and we see data in the u.k. as well. when is your expectation for when inflation bites? recent information seems that could be. is it just recession delayed? jennifer: the u.k. economy just keeps surprising us. it was around q2 last year that people started calling a recession and it has been put back and put back due to various factors. government handouts have had a positive impact in the u.k. in november there was a cost of benefit payment and that supported spending. we will see more spending data this week. the world cup had a positive impact on spending at the end of last year. so yeah, pretty resilient in q4. like in the euro z

>> i think for the ecb they find themselves in a peculiar situation. it was only in december they came out with the really hawkish commentary i'm reading a lot of reports saying don't under estimate how hawkish the ecb. they underestimated the tightness which would lead to persistent wage growth that is the situation the ecb finds itself in. they are not ready to slow down. you can say the same about the bank of england. it remains to be seen with bank of england or ecb in the same situation where the wage growth pressure have come down to go for the moderate rate hikes. if you look at the industrial action and arabile was talking about the pressures. >> it is interesting that was a different story last year it seems the wage pressures were more innocuous in europe than in the u.s. super interesting. i'm going to tune in for the panel next week and central bank speakers in sweden. >>> before we let you go, a look at markets a pull back after the further rally yesterday. stoxx 600 gaining for the fifth session in the last six. the dak yesterday out perf

we have had this debate in the public from ecb governing members between the hawks and doves. who has the upper hand? kristine: it is going to be something to watch. there is tension between lagarde and the rest of the ecb governing council, and she is very much in this position where she has to talk what the ecb has to do, the fact they still have a lot of work left to do in terms of tackling inflation. but then it will boil down to whether she can bring some of the skeptics in the governing council to her side. it is going to be interesting to watch. we will hear from them next week. i will be watching as well for that dynamic between the governing council members, a bit of that body language, and what we hear from them in regard of unity in the governing council when it comes to tackling still high inflation. tom: bilal, european stocks versus u.s., where do you stand? where do you need to reposition for the u.s.? bilal: the timing and fading of europe is one the growth data trends down. had a terrible run toward the end of last year and it is stabilizing. as long as that i