>> good morning, this is

bloomberg daybreak: europe. these other stories that set your agenda. stocks get a jolt, asian equities and european futures are higher as the u.s. job slowdown boost hopes of lower rates. the ecb will lead all the way on rate cuts. vladimir putin visits the uae and saudi arabia today. we discuss the russian president as he makes this rare trip abroad. plus, ceos from the biggest banks will testify in washington today before the senate banking committee. bank of america ceo says he sees signs u.s. economy is slowing but still expects a soft landing. good morning, welcome to wednesday, just gone 6:00 a.m. in london, let's get a check of the markets. futures pointing to a higher opening this morning. yost -- euro stoxx 50 futures are up over percent. ftse 100 up over percent and you

have s&p futures and nasdaq futures also strongly in the green. what you've seen is this u.s. data showing more labor market slowdown, and that has reinforced the speculation that the fed will be able to cut interest rates next year. if we look at the cross asset picture. treasuries yesterday expended the bullish price action off the back of the jobs data. we get more of that today and tomorrow. tenure yields in the u.s. dropped the lowest since september, but currently, you are looking at the 10 year yield . up three basis points at 4.9%. blackrock says the optimism over the scope of rate cuts next year may be going too far, but we aren't just talking about treasuries here. this is a global picture. yesterday you saw on advancing global bonds after ecb's isabel. usually one of the biggest hawks sounded devilish. she said inflation is showing a

remarkable slowdown. it was a rare day for a stronger dollar. the dollar spot index. you are looking at it currently, pretty flat, steady. euro-dollar is trading at a 107 handle, really 108. meanwhile, trade is nearing the rates outlook. we have go steady, as you can see on the screen, trading at $2024 an ounce, also keeping bitcoin, not quite at the $44,000 mark anymore, but it has been, and finally oil is steady. we have had four days of decline, will u.s. exports outweigh production cuts? you have brent trading just at $77 a barrel. let's get a check in on how asian markets are faring. april hong is on standby in our singapore studio. this rate cut hike is also lifting equities where you are? avril: stocks are finding their

groove, rising for the first time in four sessions on the msci asia-pacific is really about those bets of rate cuts returning, despite the lingering concerns that we might just be too optimistic about it. we see the bonds rally as well, but let's flip the bond because the other thing i wanted to show you a south china acids are performing. the day after we got that moody's cut to the country's outlook, but if you look at the asset performance, you want to think that was the case. we seem greater china stocks running higher. the hang seng climbing 1% from yesterday, and we are seeing the stronger currency after the pboc came in with a stronger-than-expected fix versus estimates. that gap was the biggest in about two weeks. quite supportive of the offshore. a couple of reasons why markets might be shrugging off that moody's cut. one is that there was a leak. whatever was reflect in the price action was yesterday

story. the other might be that this moody's cut is reminding investors how tidy stocks happy, their relative value. let's take a look at the india stock rk. that's the other market i wanted to highlight. yesterday we saw it hitting the $4 trillion market cap for the first time it's been running higher for much of this year, this week after the expectation of policy continuity, there's a lot of optimism about the domestic growth potential, you can see the gap closing with what we've seen on hong kong market cap. lizzie: avril hong and singapore, thanks for that update. let's get back to the bigger picture on fed rate cuts, potentially on the horizon. the downside surprise in october's job openings, paired with the increase of unemployment during the month and the rise and continuing jobless claims all set the stage for wage growth.

bank of america ceo brian moynihan gave us his outlook for the u.s. economy. >> it will be a slow down but we are positive. the way customers are spending money has leveled out. not this massive change of things going faster but it has leveled down meaning they are all the categories are going average. that's all good news that the economy is normalizing. lizzie: joining us now as bloomberg's mliv mark cranfield. good morning. it looks like both sides of the fed's mandate, employment and price stability are headed in the right direction. how are markets going to react to today's market data? mark: soft landing is in focus at the moment. inflation is going in the right direction. the jobs market is cooling. everything is in a very comfortable situation repeal can

afford to take risks, you see it with u.s. equities performing well, the bond market is having a good run. the numbers we get today will probably show a slight softening. job pictures are good but not as hot as it was in the year. that will be comforting for the fed next week. reinforcing the same outlook. we have inflation data coming as well. everything seems to be pointing in that direction that traders can afford to keep their money in the market. they can expect rate cuts next year, maybe not as many as they price for. 125 basis points of cuts is probably too much. at some stage the fed will probably feel comfortable with inflation down to a level where they can do a cut in the second half of the year. but it won't dissuade traders. at this time of year it's rare they go against anything they see in december usually doesn't get broken. people are cutting back on their exposure. it looks like we will have a

decent finish to the year for both bonds and equities. lizzie: this wasn't just a u.s. story yesterday. there was uncharacteristic dovishness from the ecb saying markets price a 90% chance that it comes to the first quarter. that would mean it would be the ecb, the fed, and then the boe. is that right? are markets getting carried away with all this anticipation of rate cuts? mark: it may be slightly overdone, but you can see why people aren't getting excited about it. the slowdown in the european economies, especially with germany struggling as much as it is, you can see why they are expecting the ecb to move quicker, maybe even the language recently from the ecb has still been a little bit neutral, maybe even leaning slightly hawkish. that was a significant u-turn yesterday. markets picked up on it quite rightly.

what we will probably see is as we get into 2024, it wouldn't be a huge surprise if the market looks aggressively for the ecb to cut, even by the end of the fourth quarter, which will be ahead of the federal reserve. we will get fourth-quarter gdp data and it will likely show europe is really struggling much more so than the united states, and that would justify the ecb going earlier. it would take longer, but if you're in the trading market, you will probably put more money into european bonds and you will the treasuries. lizzie: not too long ago they said it was not too early to rule out more hikes. bloomberg's mliv strategist mark cranfield joining us there. let's get to the politics in the u.s.. president joe biden say he may have decided to serve just one turn if donald trump were seeking to return to the white house.

bill, biden says he might not have run if trump had stayed out of the race. what is this say about the state of the 2024 campaign? >> it really says quite a bit. you talk to u.s. voters from both parties say that they would like to have a couple different candidates than the ones that they see coming in 2024, joe biden and donald trump at this point, but joe biden is the only person with a winning record against donald trump and his only previous run in office. i think he feels like he's the safest bet for democrats. it's not clear on the democratic side who the next rising star would be to challenge trump, but biden essentially says is longest trump's in the race, he is in the race as well. lizzie: meanwhile you have allies of the 40 governor ron desantis seeming to be taking greater control of his presidential run.

tell me how he could've gone from thin one of this fuzzy is alternatives to trump to now someone who is struggling to stay out of third place in the republican polls? >> you are right, it has been a very chaotic few weeks for florida governor ron desantis, especially the super political action committee that, unlike other candidates, really has a very leading role in his campaign. paying for everything from his flights, organizing where he speaks, to whom he speaks, things like that. much more hands-on role than other candidates typically have. there's been three leadership changes in that pack in recent weeks, how has he gotten in this situation, he has always had a tougher road then maybe he expected. a lot of republicans who support donald trump will say that they like ron desantis but as long as donald trump is in the race, they will support donald trump. it's hard to cobble together

additional voters. he's -- his support has largely been flat since he into the race. that meanwhile you see someone like former u.n. ambassador nikki haley gaining in the polls , possibly at the santa's expense. so he now looks like he's fighting to not be a third place candidate. he has a lot riding on this iowa primary and caucus that takes place in less than six weeks. if you cannot beat expectations in the race, i think you will see a lot more of his donor money potentially drying up. it will be a lot harder for him to keep the campaign going if he doesn't get a little bit of a boost in iowa. lizzie: the irony of the slogan, never back down. thank you for that analysis. let's take a look at what's coming up on the docket later today, because it's a biggie -- busy one. in 9:30 we get the november pmi,

that's expected to stay in contraction territory but it will lift slightly. at 1:15 london time it's the next installment of u.s. jobs data as we discussed with mark cranfield. we already have the jobs opening yesterday, today is november adp payrolls and then we have tomorrow's non-fun payrolls. finally at 3:00 p.m. london time we have the bank of canada rate decision. the expectation is for no change to monetary policy for rates to be capped at 5%. you can get around above all the stories we've been discussing and what you need to get your day going on the daybreak newsletter. today they lead on amazon targeting sheehan, biden saying he may not have run, as we were just discussing, if trump were not in the race. and citadels credit trade threatening banks turfs. terminal subscribers can go to da go on the terminal. coming up next, vladimir putin is heading to the uae and saudi

arabia this week. it's a rare trip abroad for the russian leader in the wake of the latest opec-plus deal on output cuts. stay with us for that. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. welcome if you are just joining us. i want to get into the latest in the middle east now. israel has rebuffed mounting international pressure to halt its military campaign in southern gaza. the united nation warns there is now no safe place in the territory. this as israel's military has encircled gaza's second largest city. hamas run health ministry says over 16,000 civilians have now been killed. the eu's high representative for foreign affairs says he has been told the u.n. wouldn't be ready to operate in southern gaza due to the israeli bombing and called for an immediate cease-fire. russian president vladimir putin is visiting uae and saudi arabia today, on the agenda, issues including oil, trade and investment, as well as israel's military campaign. we are joined by our bloomberg

reporter in the region. sylvia, this is a rare overseas trip for putin since his invasion of ukraine. does it show he's growing more confident to travel outside russia? that western efforts are failing to isolate him? >> it is an important trip in a rare run -- rare one. there were opportunities for him to travel internationally. there was the bricks summit, there was the g20 meeting in india but he chose not to attend those. he did go to china and now he's coming here to the uae and then to saudi arabia and this comes after the opec plus agreement, which is the mayor oil producers, including saudi arabia, the uae and russia. they came to an agreement to extend and deepen cuts. it coincides with the uae hosting the climate summit cop, though the kremlin said putin will not be attending the particular event, but it comes

at the same time, all the topics on the agenda including russia's invasion of ukraine and the israel-hamas war in the region. lizzy: why are the uae and saudi arabia hosting putin? what do they stand to gain? >> ok plus alliance is important for all those countries. it's given the uae and saudi arabia added heft in the global oil market by being with russia and saudi arabia talked about the importance of that alliance. the uae has invited all heads of state to the climate summit. of course it makes sense that there was an invite extended to vladimir putin, although he's coming here for a bilateral visit. i think both countries have been having this role and between different countries regarding the wars in the region. and particularly on versus invasion of ukraine, they tried to play a role in between. from the u.s. perspective, they

have been too close to russia. from the russia perspective they would like to see more support. there is the involvement of middle powers in between big global powers on the international stage. lizzy: bloomberg's economy measuring editor, thank you for the update. kenya central bank surprises us with the biggest rate hike in a decade. more on the central banks to support this, next. this is bloomberg. ♪

lizzy: i want to go to africa, can's central bank raised its benchmark interest rate by 200 basis points to 12.5%. the biggest hike in a decade an hour africa economist at bloomberg economics joins me now to tell me how this happened.

it's a surprise hike, where does it leave the shilling? >> it was indeed a surprise, we haven't seen a big hike since 2011. it appears the central bank is concerned about the depreciation of the shilling. the currency has depreciated by around 20% since the beginning of the year. in the concern about the implications on inflation contribute half of the inflation rate to the depreciation of the currency, hence this increase. it doesn't say what it means for the outlook of the currency, it does help stabilize a, the currency has moved from being deeply overvalued to close to fair value now, and now with a sharp increase in interest rates, we do expected to stabilize in the short term. lizzy: that's the outlook for the shilling, but what has the central bank said about the outlook of inflation going forward? >> they are concerned about

inflation remaining elevated in the near term. they are concerned about the effects of high fuel prices as well as the currency. inflation is up 6.8%. inflation target ranges 2.5 percent to 7.5%. and they are seeking to bring that down to 5%. lizzy: thank you for that update on the kenyan central bank. next, we will go to rwanda for the latest. the u.k. has done a treaty with rwanda as the prime minister seeks to get his controversial plan to fly asylum-seekers to the east african nation plaque -- pass the u.k.. let's bring it in our bloomberg correspondent who's been following james visit to the capital. james met with his counterpart yesterday, has he dropped any hints about whether he's going to take the option to implement this plan to deport

asylum-seekers to rwanda? is he going to opt out of the european convention on human rights and asylum cases? >> it's a great question because it has not categorically come out in the press runs that he's done in the press briefings. here's what we know is when he was asked questions, he said that the rwandan treaty is one of the many measures of the u.k. government using to try to slow down illegal immigration. they're going to fortify their borders, they're going to partner with other agencies, for example, the albanian police and almost confiscating just to slow it down. what we also know is that a couple of changes have been made to the treaty to accommodate the things that were raised by the supreme court. it was an issue with 100% in rate. and now there's a non-resolve

meant close. if the government of rwanda wants to deport in asylum-seekers, then a new tribunal has been formed with two presidents, one coming from rwanda and another from the commonwealth and they will also have a panel of judges drawn from several mass analogies -- nationalities to reject. other things that have also changed is the fact that the foreign secretary says no money has been paid in the amount of money it was budgeted for was just to cover the cost that rwanda were -- will incur. it's important to know that the foreign minister says this cannot supplement illegal immigration. it's very important to address the underlying issues and economic issues that are leading people to take dangerous journeys across the deserts.

>> it seems like there's an inherent conversation because they are saying it's safer to send asylum-seekers. this should be a deterrent, how do you square that circle? >> it's a double edge sword. safe enough, but if you go to the transit center and talk to the people who have come seeking asylum for ethiopia and sudan, they say they are grateful for the peace and safety they get here. but in terms of job security and their livelihoods, they do not get the sense of safety and all are hoping for resettlement in countries like the u.k., the u.s. and canada. so all the people being held, 190 are hoping for a settlement. lizzy: thank you for that. we watch out for the next steps here at the u.k. and. coming up, the german government is trying to have a 17 billion euro hole. can they seal the deal before christmas.

we will discuss that next. this is bloomberg. ♪ dear moms and dads, what you have achieved here today is going to help us and our futures. it is why we're coming up on stage to collect your diplomas. mom, love you always.

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>> this is pure, -- this is bloomberg daybreak: europe." . the u.s. jobs slowdown boosts hopes of lower rates next year as traders ramp up hopes the ecb is going to lead the way on rate cuts. vladimir putin visits the uae and saudi arabia. the russian president makes a rare. trip abroad. . ceo's from the biggest banks testify in washington. brian moynihan said he sees signs the u.s. economy is slowing and still expects a soft landing. let's get a check of the markets as we gear up for the cash equity trade. looking for positive session, risk on on both sides of the pond. euro stoxx 50 futures up 0.2%. as rs and pe minis -- s&p

e-minis. u.s. data yesterday showing more labor market slowdown. that reinforced speculation the fed is going to cut interest rates. over to the cross asset picture as well, treasuries yesterday extended the bullish price action off the back of jobs data. more of it today and tomorrow. therefore 10 year u.s. yields dropped to their lowest level since september. currently looking at the 10 year yield, 4.19% almost this morning. blackrock morning the optimism over the scope of rate cuts next year really may be going too far. but we are not just talking about treasuries yesterday was also an advance in global bonds. we had isabel schnabel, one of the most hawkish members of the ecb, sounding dovish. she said inflation is showing remarkable slowdown. it is not just the u.s.. it was a rare day for a stronger dollar, currently the bloomberg

dollar spot index looking pretty steady, just in the red. meanwhile traders mulling the rates. gold looking steady as well. trading at $2026 per ounce. bitcoin not at the $44,000 mark. brent crude, $77 per barrel. the question really is whether u.s. exports will outweigh opec-plus production cuts. that remains on our minds. let's get back to europe. we can talk about the fiscal story next. e.u. finance ministers expect to discuss guard rails aimed at reining in mistakes, deficits, and debts in brussels later this week. also under discussion is going to be leaving room for green and defense investment. they seek consensus on these new fiscal rules. that takes us to the situation in germany. olaf scholz says he expects rapid progress in coalition talks.

the details, a man who loves the german budget, bloomberg germany correspondent oliver crook. where to these negotiations stand? oliver: unlikely passion for german fiscal situation. what you had yesterday was lintner and schulz meeting to try to get this budget over the line and they are really trying to get the crisis behind them. they met last night. we are hoping to get an update, maybe they've come to an agreement. have to plug the 17 billion euro hole in next year's budget. they were in the final stages of figuring this out the week the court ruling came and made such a dramatic problem for them. can they get it over the line is the question. there are going to have to be cuts on spending, on subsidies, and these are different parties. the cracks could be papered over by large sums of money. really now they need to cut and

cut aggressively. the question is will they be able to do it before year end? they are the biggest hurdle. it will have to go to the bundy's dog -- bundestag. they could get this budget done by the end of the year. lizzy: i know you are not a journalist who has ever missed the deadline. how important is it to get it done this year? oliver: the first thing we need to say is this is not like the u.s. where you have armageddon and government shutdowns and all the sort of thing if you do not get the agreement over the line. you can get a provisional budget for january and that is very likely what will happen if they do not get it. this is deeply bad for germany politically, bad for business, bad for the economy. this is a coalition that is already in trouble. you have the far right surging. does business like anything more than great uncertainty? no. we are looking at expectations for investment. they are falling which takes us to the economy. next year was supposed to be the

year of return to growth in germany. according to deutsche bank, according to -- as a consequence of this ruling we are going to get a contraction next year in germany. this is a nasty combination and the longer it drags on the worse it gets. lizzy: i want to take you to other news. bloomberg has learned the eu is set to delay tariffs on electric cars traded with the u.k. by three years. current post-brexit arrangements are set to come in, a duty on ev's between the u.k. and the eu if less than 45% of their value comes from the region. most eu member states had been pushing for a delay to 2027. big bloomberg scoop. the chinese ev maker nio has jumped in u.s. trading for paring some of those gains after

posting mixed results. sales outlook for the current quarter was well below estimates. nio says it's going to cut or postpone projects that cannot improve financial performance. elon musk's xai seeks to raise $1 billion in equity from investors. a document filed with the sec sows it has raised $35 million. muska created xai to compete with the likes of -- which he cofounded. sticking with tech, apple is once again a company with a $3 trillion market cap. shares rose more than 2% in the u.s. yesterday after a strong forecast from the iphone assembler on high -- assembler hon hai. elsewhere apollo global management says it is getting harder for active investors to beat indices in public markets.

the ceo mark rowan told bloomberg exclusively that better returns can be found in private assets. >> we have had a sea not just over a year, over 15 years. so much of our public markets are indexed and correlated. 80% of volume s&p 500, six to percent of the market etf's, 100% of returns this year are from 10 stocks which constitute 35% of the s&p that traded an average pe of 50. how many of us, in every day looking to buy 50 pe stocks? not many. if public markets are so correlated and indexed interest rates into money flows, if you want outperformance, you need to step away from public markets. that's happening because we are also revisiting the notion of public being safe and private being risky. this is the framework we used to be in. private meant venture capital,

hedge funds, private equity. now it just means less liquid. >> is that not inherently a risk? liquidity? >> liquidity is a risk to everyone but to differing degrees. if you are a retirement planner, you know your liquidity requirements for the next 10 years. if you can get paid for illiquid ity, why not? how many individuals need their money on tuesday? they should get paid for illiquidity. we are seeing that in performance data. active management has failed to be the index 85% of the time for 20 years and i think it's going to get harder not easier to be to the index as more and more of the market is indexed. very little money is left to actually make up what needs to be done in active management. >> what is the single operational distinction between -- and your apollo? what is the idea you can give us

of them versus you? >> i will give you drexel, lehman brothers, bear stearns, svb, first republic. the financial institutions tend to die of one or two causes. heart attack or cancer. heart attack is funding risk. they borrow short and let long. cancer is the slow addition of poor quality assets to time undermine the system. you look at all those firms. all of those had an element of heart attack and cancer. funding risk as well as asset risk. we are borrow long and let long. everything is matched. everything is in a fund. there's no daily liquid, quarterly liquid money at apollo. we are ideally situated to take advantage of less liquid assets. we have structured ourselves that way. you look at the totality of what we do. equity is a risk business. equities go up and down every day. you can lose money in public or private equity. in the credit business the vast majority of what we do is private investment credit.

>> when i look at the risks out there, what are the tail risks you see right now for private equity? are you hedged perfectly? is there next to no delta where you feel comfortable? are there actually tail risks? >> i do not think there are tail risks in private equity. private equity is a risk-taking activity but each of the companies, each of the situations is idiosyncratic unto itself. and over time private equity has proven to be a very good asset class recognizing that in circuit -- certain markets you will lose money. lizzy: mark rowan speaking to tom keene and jonathan ferro. here's what we are watching for today. this morning at 9:30 a.m. london time we will get u.k. construction pmi for november. at 10:30 a.m. it is the bank of england by annual financial stability report.

that outlines potential risks in markets. banking governor andrew bailey will speak half an hour later at a press conference. then we will turn our attention to u.s. adp employment data. that comes out 1:15 london time. at 3:00 p.m. london time, the canadian rate decision. also later today we will bring you lines from the u.s. senate banking committee hearing that will feature testimony from the ceos of america's biggest banks. coming up, russia's income from oil experts is greater than before the invasion of ukraine. that's next. this is bloomberg. ♪

>> it is expensive to build a new iron ore mine. you always have to build the infrastructure. it is iron ore of exceptional quality. probably the highest quality on the planet. only basically competes with the iron ore mind in brazil. it is the kind of or for the future. a lot of it can go right into a dar process and therefore you have less co2 emission. it is attractive to get into our portfolios. we also believe there is space in the market. >> with conditions as they are, are you confident about the level of capex that would be required to continue investing? >> absolutely. it is a good project. it is down the road. 25 years ago, it was discovered

and we have recently developed while i was traveling just four weeks ago, the progress we are having. we are basically at a point of sanction subject to approval in china. >> you expect china will hit peak steel consumption soon. this is not entirely about on china? >> a couple things to say. the rest of the world is growing. as china has been at peak level of steel consumption, you can see india is now coming off the curve. they will need much more steel in the future. in aggregate, the world will be growing. don't forget. the mines, some states running out of iron ore, you have to keep on investing in your

replacement mine just to sustain the level of production. where the world's largest producer of iron ore. as you also have seen we have just announced today a startup developing the roads, we need to develop more. >> are you looking at other assets? >> not in iron ore. we are trying to find a good balance between our leading business of iron ore and also we are the western world's largest producer of aluminum. we have a strong copper portfolio. it is about finding a good, balanced portfolio that fits the future. >> what is the future of china to you? so much of that voracious appetite for iron ore and steel has been in the property market. >> look. it is always difficult to talk about the economy for the long

term. the track record of the chinese economy is pretty impressive. right now, i have been traveling around china. i'm optimistic in a way. the chinese economy is growing. you are right, the property market has -- it has its challenges. then again china is spending more on infrastructure. there are certain industries that have boomed. the automotive industry, particularly electric vehicles. that helps demand. lizzy: that was the rio tinto ceo speaking to haidi stroud-watts. i want to stay with commodities because it is the subject of today's big take on the terminal. russia's income from oil experts is greater -- exports is greater than before the invasion of ukraine. the failure of the west sanctions are available to read about in this big take and joining me now is one of its authors. oil strategist julian lee. tell me how the price cut policy

has evolved since its original implementation. >> the price cap was introduced as a way to limit some of the effects of what were at the time proposed european sanctions, which would have banned outright the use of western ships and western services for the movement of russian oil. the u.s. in particular was very concerned at the time that that would lead to a very rapid and significant reduction in volumes of oil available worldwide. would send prices soaring. and that would filter through to gasoline prices at the pump and everything else. they came up with this idea that those ships and those services would still be available to move russian oil as long as that oil was sold below a price which was

ultimately set. for crude oil it was $60 a barrel. that seemed to work quite well in the beginning. but it is working less as time has gone on. lizzy: why is it the shadow fleet is becoming more influential? julian: we have had this shadow fleet building up. tankers that are owned by companies that are not well known. they have sprung up in various places around the world generally, out of the way of western scrutiny. it is unclear who they are insured by. they are older ships, many of which would normally have been scrapped by now. this fleet is now getting so large that a significant proportion of russian oil shipments are being made completely outside of any kind

of western involvement and that means it is much easier for the company selling the oil to sell it at a higher price. we have seen discounts for russian crude narrowing against global benchmarks like brent. we saw them in july go above the price cap of $60 per barrel. coming back down toward the level now. that is driven quite significantly by broader movements in the oil price generally as we saw brent west texas crude oil rising at the end of the summer and into the autumn. so russian prices move with it as we have seen, coming down again more recently. those russian prices have gone down toward the price cap level. lizzy: bloomberg oil strategist julian lee. we think he was always. staying with russia's oil

exports, bloomberg investigates is looking at why sanctions on russian crude have so far failed to curb moscow's war chest and instead fostered a lucrative business for some. >> the energy world is turned upside down by russia's invasion of ukraine. >> we see the rise of what is called the shadow fleet. new ship owners, new shipping companies we have never encountered before. the sanctions are effectively being dodged. >> this right here is the shadow fleet. somebody is doing something to make that ship appear somewhere else. to actually see this behavior was surprising.

it makes you think, what else is going on?

lizzy: if you are just joining us it is 6:54 in london and we are waiting for the bank of england's financial stability report. that comes at 10:30 a.m.. it is not usually the dial mover the monetary policy report is. however it is an interesting time because we are nearly a year on from the ldi crisis that followed liz truss's mini budg et. we will see how the bank of england is assessing the risks. we may get some clues about how they want to assess the risk from hedge funds and shadow banks and maybe we will get a line on britt coin, the state backed digital currency being

considered here in the u.k.. the treasury select committee in parliament said maybe we do not need brit coin after all. what will andrew bailey say? finally we might get commentary on the housing market. we've had all of this pressure from higher interest rates. if i look at the next chart that i have drawn together here, you can see interest rates affect brits the most the of the mortgage channel. you have to wait for them to remortgage. we have this delay in the monetary transition mechanism. hence this is why we had to wait for rates to pass through to the real economy. all of that coming from the bank of england at 10:30 a.m.. we will hear from the governor at 11:00 a.m., unlikely to tell us when he wants to cut interest rates i'm sure i colleagues will try to get him to tell us anyway. it's a busy day for lots of other things later. 7:00 a.m. we are going to hear from british american tobacco.

they will bring us some results. investors keen to know what the lucky strike maker plans to do with its expected annual free cash flow. $3.9 billion they've got. bloomberg intelligence reckons that money could be put into share buybacks and smaller acquisitions in the smoke-free product space. the markets today team will take you through that i am sure next. later in the day you have ceos of the u.s. big banks heading to capitol hill for the annual oversight hearing. stay with us for a preview of what we might hear from them. i'm going to leave you in the safe and capable hands of mark and tom. this is bloomberg. ♪