lizzy: good morning, this is "bloomberg daybreak: europe ." i'm lizzy burden in london. stocks in china drop after inflation data showed consumer prices falling at the steepest base in three years, disappointment over the outcome of a politburo meeting as to the gloom great investors brace for this year's final rate decisions from the fed, ecb and bank of england. plus, israel says it strongly criticized quote dangerous cooperation between russia and iran as vladimir putin and benjamin netanyahu hold talks. the u.s. vetoes a un security council resolution calling for a cease fire in gaza. welcome to a massive weight for central banks paid let's check on these markets as we do throughout the trading day. you've got the future is pointing in different directions in the u.s. and europe, but not a lot of move it on either side

of the pond this morning. the s&p 500 hitting its highest close of the year to end its longest winning streak since november 2019 on friday. six weeks of gains off the back of that strong u.s. jobs report because consumer resilience bodes well for corporate america, but the flipside was for treasuries. it meant this unwinding of the massive dovish trade that had pointed to a fed pivot as soon as march. so swap contracts now show a 40% of that, down from 50% before the report, and you did see this 13 basis point increase at the front end up of the curve. the question is what, if anything, derails the equity rally? we've got cpi out of the u.s. tomorrow, and the fed decision on wednesday. looking at the cross asset picture, you got the two-year treasury yield at 4.74%, the bloomberg dollar spot index steady, stronger 0.1%, and oil,

on friday it bounced back again off this jobs report, but there are concerns about oversupply. last week it closed out its longest weekly losing streak since 2018. you are looking at print trading over $76 a barrel. you've got bitcoin traders taking a little profit before the fed decision. it's back to volatility. we had seen bitcoin sinking to the 40,000 level, currently at 41,977. those are your broader markets. let's check on how asian markets are faring. let's get over to avril hong in singapore. >> we're seeing some selling coming through for fx and bonds in the region. investors still digesting nonfarm payrolls but also looking ahead to u.s. inflation and fed to data later in the week. where we are seeing the selling is among asian equities, the benchmark for the region is

lower. same for the nikkei, which is higher by 1.5%. as we see the yen hovering at the 145 level. where we see the losses from the hang seng, down 1.4%, being dragged by the likes of tencent, alibaba and meituan, no thanks to chinese cpi numbers over the weekend. they fell much more than expected, highlighting concerns about deflation in the country. our colleagues have pointed out that the drag came from food and not core prices, may be suggesting that demand didn't crash, it is just really weak. that being said, that is not being sheared along by the markets because we are already in a situation where there is no resolution of the property overhang or the debt situation. you might ask where we go from here? if you look at one of the indicators, the csi 300's relative strength index has

fallen below 34 the first time since last year, showing oversold conditions. last time we saw this, it took two weeks before the csi 300 actually bottomed. maybe a similar pattern may emerge. lizzy: we will speak more about these inflation prints with jinny yan from icbc shortly. while china may be suffering deflation, for most central banks, it's inflation in focus. it's a massive weight for central bank policy decisions. rate decisions for 60% of the world's economy to be set in this whirlwind 60-hour window this week. joining us for more is bloomberg mliv's mark crane field. how long can central bankers keep pushing this higher for longer narrative? >> i'm sure they will try pretty hard this week. they will try to convince traders it is way too early to

be betting on lower interest rates, although the message will probably be largely ignored because people are looking ahead to 2024. you can understand their caution. for a long time, they were wrong about the inflation direction. it took them quite a while before they started to raise interest rates to tampa down inflation concerns. they appear to have gotten ahead of it. but they will feel that they can't afford to relax until it is back towards the targets they have set themselves. traders on the others, they think about rate cycles which go up, and rate cycles which go down. in most cases, investors think the interest rate hiking cycle has pretty much come to an end. obviously, they are looking for indications of when central banks will be comfortable to start lowering rates. we might get some of that through the forward guidance this week, that's what traders will be looking for closely. they will want to know any clues

as to one central banks will be ready to step off the pedal and push rates lower, whether it's in the first half of next year or the second half. that mix a material difference to market pricing. at the moment, the market is pricing some fed cuts to begin by the end of the first quarter next year, which seems aggressive. so you can expect jerome powell to push back hard on that idea and keep people thinking he can hold to the second half of 2024. lizzy: the dot plot all important for the fed, and of course, the vote split all important for the bank of england. do we see anyone stepping away from the hawkish road in the u.k.? how are bond traders shaping up not just this week, but also for next year? >> it's like a holy grail for fixed income investors. they have seen huge rate hikes over the past couple of years, interest rates have gone up substantially 500 basis points

in the case of the u.s. typically when you reach such a peak as that, eventually, the downside will be pretty fast and aggressive. if your a fixed-income investor, you love it when interest rates are coming down because you can go a long duration right across the curve, and you get paid for owning bonds, as well as the perfect scenario for fixed-income investors, they don't want to mix out on the next cycle. that's why you see inverted yield curves already in the major economies, because traders don't want to give up on the idea that they could miss out on long-term interest rates coming down. because when they do, typically in the past you see central banks acting quite quickly to lower interest rates. when you think the market is currently pressing 100 basis points or so of fed cuts, it wouldn't be surprising if the markets at some stage are looking for 200 basis points of cuts, because that is typically the cycle you get. so, to dissuade investors that

rates are coming down will be difficult because bond investors only see one thing, a huge bond market next year and they don't want to miss out. lizzy: could we have a hawkish surprise in the language of christine lagarde? we will have to see on thursday. mark crane field in singapore for that analysis. israeli prime minister and german netanyahu criticized russia's cooperation with iran. he had a 50-minute phone call with vladimir putin yesterday. relations between the two nations have been strained since hamas' attack on october 7. bruce einhorn joins us now for more analysis. this relationship under strain since october 7 between israel and russia, can you give us the readout of the crew 10 netanyahu conversation yesterday -- putin and netanyahu conversation yesterday? >> i can't hear you, but i will

answer what i think is your question, which is that the two leaders spoke on sunday for just under an hour. in the escutcheon, prime minister netanyahu spoke critically of russia's cooperation with iran. president putin, for his part, talked about the need for protection of civilians in gaza. iran and russia have gotten very close, especially since the launch of the full-scale invasion of ukraine. russia relies on iranian drones in its war effort in ukraine. russia also has good ties with hamas, it is fair to say. during the week-long ceasefire last month, at one point, hamas released a statement that it was releasing a russian hostage in

appreciation for russia's support for the palestinian cause. lizzy: you read my mind, we must be telepathically connected, that's exactly what i wanted you to tell me. bruce einhorn, thanks for joining us. it is a busy week. on eco data but also central bank decisions. tomorrow we've got the u.s. cpi numbers dropping for both the core number, expected to be crucial, both in terms of the month and the year, and then the latest u.k. jobs data. though i should say bank of england officials have been pretty cautious recently about the official numbers because of the falling response rate, though it is another snapshot into the stickiness of homegrown inflation. so we watch that, and on wednesday, the focus will turn to how convincingly the feds jay powell can bat off speculation about rate cut so as not to loosen financial conditions further.

though the chance of another hike to round off the year does seem pretty slim. then you've got the ecb's christine lagarde and the bank of england's andrew bailey on thursday having their go at the same dance, trying to that away -- bat away rate cut expectation. mark is pricing a quarter-point hike from the ecb as soon as april given the pain in the european economy, but policymakers want to see more wage data before their convinced the inflation danger has passed paid andrew bailey is set to reiterate that rates need to stay restrictive for an extended period. more of the table mountain approach. the smb facing questions about when borrowing costs will fall on thursday, but it is a trickier question for norges bank, that might even go for one quarter-point hike. we will keep you across all the central bank decisions, but you can get a roundup of the stories

to get your day going today on the addition of daybreak. currently, they are leading on bloomberg economics' forecast that gdp globally could ease to 2.7 percent, and our mliv pulse survey saying em stocks are a bargain, snap them up for christmas. and finally, macy's getting a buyout bid. find those stories if you are a terminal subscriber by going to dayb . we will talk more about china's deflation fears souring the mood for stocks after weaker than expected cpi prints, and disappointing politburo announcements. more on the world's second-largest economy with jinny yan, head of china strategy at icbc standard bank. that conversation coming up next. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe." it's just gone 6:15 in london but we are going to china now because stocks are in the red afterwards worse decade inflation data and disappointment over the outcome of a politburo meeting. china consumer prices fell the most in three years last month. bloomberg intelligence as some may be disappointed as regulators dropped forceful wording when describing monetary policy for 2024. joining me is the chief china economist at icbc standard bank. really great to have you. let's start with this inflation data, deflation i should say, because china is in a different situation to the rest of the world. how deep could this downward spiral go? how long do you expect to deflationary risks to persist?

jinny: we have seen inflation data hovering around zero. even if you look at the core inflation, core cpi ex-food and energy, it shows that despite the coming down the prices of oil and other commodities. and also food, which obviously, impacts on china's cpi. significantly, there are still very be nine inflation pressure. -- be nine inflation pressure. that means there are evident signs that there is still lack of domestic demand. that is a real concern. the concern is not that headline figure is negative, the concern is there is simply not enough demand to drive sentiment and of course, what that means for corporates is profitability will be further under pressure. lizzy: and yet the pboc has tried to downplay the deflation risk, so what do you expect for the next decision? jinny: to be fair, there is some

base effects happening here and if that should work to the favor of the headlines. probably we will see inflation, particularly cpi, hovering around zero, but ppi still in negative territory. the central bank is now very much in a phase of stabilizing its monetary policy. yes, there is more easing potentially to come but that play second fiddle to fiscal policy. we have seen this emphasis on using fiscal stimulus, as well as credit stimulus, to encourage spending and investment. lizzy: we had this statement from the politburo on friday. how much support do you expect in 2024 for the property sector? jinny: this politburo meeting sets the tone for the central economic work meeting, which is also coming up. that is the key.

there is definitely drafted policies, but there will be very much a cautious tone in terms of rolling out all these policies. the property sector has already seen some policies to support the sector, but the emphasis is on restructuring the sector. trying to encourage healthy growth of that sector, rather than stimulating it as china is going through transition away from traditional sectors towards new economies such as renewable energy. lizzy: how easy or difficult will it be to implement this fiscal support at the local level? jinny: clearly there is huge challenges. we have seen struggle particularly as the property sector, as land revenue is down, for local governments to address this sustainable fiscal revenue story. that is why the central government is very much

supportive of local governments to issue bonds to lift local government spending. what we may see is more projects, particularly infrastructure projects supporting the transition story. we will see more investment, and particularly into higher manufacturing and other encouraged sectors to transition towards that new economy next year. lizzy: you've got lots of data to digest out of china this week. it is too early to call a bottom for growth? jinny: it is still too early, i would wait until at least after china's new year, one we see more activity after that long holiday in china to really see whether that fundamental sentiment is existent. the key is confidence, without revival of confidence, it's difficult to call this a bottom.

any policy for the nation has been the primary focus of the politburo meeting discussed on friday and in the upcoming economic work meeting. lizzy: do you think because of the focus on china's wobbly growth, there has been perhaps an oversight of the yuan's rise is a share of global payments currency? it is one of xi's stated aims that there should be greater use of the yuan by financial institutions, i'm quoting there. jinny: there are two sides of the story, there is the currency internationalization which is happening regardless of the current cycle. yes, we have seen depreciation pressures, and that is exacerbated between the negative spread of the chinese government bond and u.s. treasuries, because of the strength of the dollar, etc. however the ongoing trends that

normal corporates, more reserves are being diversified into renminbi is very much a story that will stay with us. lizzy:'s been wonderful to have you with me. jinny yan, chief china economist at icbc standard bank. we will talk about china's role internationally. ghana needs a debt relief deal with its creditors, including china, to unlock more than half $1 billion from the imf. we look at the roadblocks that the west african nation is facing. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe." egyptians began voting in a three day long election with president abdel fattah el-sisi

all but certain to win a third term, even as the north african nation grapples with its worst crisis in years. the most pressing issue for egypt's electorate is the soaring cost of living, with inflation running at almost 35 percent after three currency devaluations since early last year. we turn now to ghana. the country's debt restructuring negotiations have been held up by a chinese request to safeguard its most recent lending. africa's biggest gold producer needs to reorganize most of its public debt to unlock more than half a billion dollars from the imf. general zabasajja is in johannesburg. what are the details behind this delay? >> bloomberg is reporting that this debt restructuring did hit a snack reportedly because of this chinese request. reportedly, there is a request

to safeguard these loans, safeguarding losses on loans after 2020. the idea was that china did not take a hit in particular for loans that were extended to ghana after the pandemic, and countries that needed support during the pandemic. the question now is how does this affect ghana's debt restructuring going forward? ghana is in the process of restructuring most of its debt. it owes beijing $1.9 billion. it needs to continue making progress on its debt restructuring in order to receive its next disbursement of $600 million from the imf program. this is another snag for the country and leaves questions about how china and other creditors plan to negotiate and also, burden sharing when it comes to restructuring with some of these countries. lizzy: china doesn't want

losses, but could this have broader implications outside ghana? >> that's a lot of the concern because ghana is not the only country trying to renegotiate its debt with this g20 common framework. there is also zambia which has had its issues in resolving disputes between china and other creditors. we have been reporting that ethiopia is in the process of looking into this g20 common framework, but the question remains, how do these burden sharing agreements really work? there is no specificity in the g20 common framework, in particular about how to compare different loss sharing between creditors. this is just another snag in ghana, but the implications are broader than these borders, because if we continue to see countries check tapping into this g20 common framework, which

the imf is helping more countries do, they need to resolve this issue that appears to be delaying a lot of negotiations. lizzy: and how do you help these creditors make sure they aren't punished for helping countries that were desperate in the pandemic? bloomberg's jennifer zabasajja joining us from johannesburg. volodymyr zelenskyy heads to washington, as u.s. president joe biden's request for more military aid hits a snag in congress. we will bring you the latest on that. this is bloomberg. ♪ the power goes out, and we still have wifi to do our homework. and that's a good thing? great in my book. who are you? no power? no problem. introducing storm-ready wifi.

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lizzy: good morning, this is "bloomberg daybreak: europe." i'm lizzy burden in london. disinflationary pressures amplified growth concerns in china, as consumer prices in the second largest economy fall at the steepest face in three years. it's a big week for central banks, investors brace for been final rate decisions from the fed, the ecb and the bank of england. plus, israel says it strongly criticized quote dangerous cooperation between russia and iran, as vladimir putin and benjamin netanyahu hold talks. the u.s. vetoed a un security council resolution calling for ceasefire in gaza. it's just gone 6:30 a.m. in london. it's a very big week for economic data and for central bank decisions. if we look at futures, pointing in opposite directions in the u.s. and europe, but not a lot of movement on either side.

hard to beat the end of last week for the s&p 500, the highest close of the year to end its longest winning streak since november 2019. six weeks of gains. this is off the back of that strong u.s. jobs report friday boosting equities, because consumer resilience is good for corporate america. the flipside was for treasuries, it meant this unwinding of the massive dovish trade that had pointed to a fed pivot as soon as march. swap contracts now show a 40% chance of that, down from 50% before the report, therefore you saw a 13 basis point increase at the front end of the curve. the question is what, if anything, derails the equity rally? we've got u.s. cpi tomorrow and the fed decision on wednesday. currently, the u.s. two-year treasury at 4.75%. the bloomberg dollar spot index steady at the moment.

stronger a 10th of a percent. oil bounced back on the jobs report, but there are concerns about oversupply, so brenda trading at $76 a barrel. bitcoin had been edging towards that 40 counts --40,000 mark. traders taking profit before that, currently just shy of $42,000. let's get deeper into our markets conversation. this global bond market bracing for a big week for central bank decisions, treasury auctions, and the u.s. inflation and consumer data. traders are now pricing less easing by the fed in 2024 after that jobs report on friday was better-than-expected. for more, we're joined by mliv's ven ram. what can we expect from the fed this week, and the appetite for the treasury auction? >> the fed is likely to push

back on the notion they are going to cut rates sooner rather than later, because we saw a robust set of employment data. the most crucial aspect of the data was the jobless rate. that was forecast to come in at 3.9%, it came in at 3.6%. to put that in context, 3.6% is near a multi-decade low, it also happens to be the average for the year. the fed has penciled in a jobless rate of three point 9% for 2023. they are nowhere near the target on getting the employment rate ticking higher. so, if the jobs market continues to stay resilient, then they will probably indicate a lower unemployment rate for 2024, and that means they will have to per force push back on rate cut

arguments. lizzy: i'm looking at this week's mliv pulse survey, it says the u.s. will avoid recession, but also, a record high is on the card for u.s. stocks, what a turnaround? >> you have this convexity trade going on which is if the economy is doing well, stocks are bid up because earnings growth is resilient for companies, but then if the economy is going to upper downturn, they will benefit because the fed will cut rates. either way, heads you win, tails they lose for equities. if valuations aren't compelling on equities, if you look at the s&p 500, you get 5% as an earnings yield, and it is about 3.3% on nasdaq. are those sufficient enough? i don't think so, but the

markets can be insane longer than you can be solvent. lizzy: then rama in dubai. i want to come back to europe, because germany's ruling coalition will reconvene budget talks today as they struggle to plug a 17 billion euros gap. chancellor schulz told fellow social democrats over the weekend he is confident a deal can be reached in difficult negotiations. the man across all of these talks is oliver crook, germinate correspondent in berlin, what was the chancellor's message to his party? >> chancellor schulz was having a hard time, this is probably the warmest audience he was going to get. he spoke on saturday, very long applause in support. this is the first social democratic chancellor germany has had in 15 years. for the party, it's a big deal, and this party congress happens once every two years, so this is the last one before the next

election in 2025, so it was his opportunity to lay out what the spd's priorities will be. in the face of this budget crisis, he said he will not back down on three priorities, one is the welfare state will not be dismantled. this is central to the spd, second ukraine will continue to get unflinching support, even if others step back. third, modernizing the economy bringing it into the 21st century on climate issues, but also efficiencies. the problem is this costs a lot of money and that is what this government is short on. how do you come through with all those promises is the question he needs to answer now. lizzy: is the budget crisis actually any closer to being resolved? >> the problem is nothing is resolved until everything is resolved, this is the problem this coalition faces right now. they have their premises at the spd, but there are two parts of

this government that have promises, that greens' expensive climate transition, and lindner. this was ongoing on sunday straight into the budget negotiations, they are ongoing again today, the question is could they skew this and suspend the debt break partially for next year, saying you can only do that when there is a crisis, that the war in ukraine still constitutes crisis so the 8 billion euros that would go to ukraine is suspended from the debt break -- is that a possible thing they could do? this is part of the negotiations ongoing today and we won't know until everything is resolved. lizzy: how very european, nothing agreed until all agreed. oliver crook, we thank you. ukraine's volodymyr zelenskyy is headed to washington for talks

with president joe biden. ukraine is facing a second winter of war, amid uncertainty over continuing aid for the country from western allies. let's bring in bloomberg's europe correspondent in brussels. maria, zelenskyy is doubling down on the diplomatic efforts, what is he hoping to achieve? >> brinkley, we have not seen volodymyr zelenskyy on such a diplomatic effort for a while now, he is hoping to instill momentum into the ukrainian story. it's no secret that it has been sidelined by other geopolitical events that have taken place ever since. he is going to the united states today. he will meet with president biden tomorrow. we understand he will also address u.s. lawmakers. remember, some of the funding story in the united states is connected to republicans not signing up for it unless there is more money that goes into border security. he is hoping to make a case for ukraine.

it's not the only meetings he will have, because remember yesterday he was in argentina. he met with latin american leaders, including the newly elected argentine president javier millet, remember, for zelenskyy it has always been important to reach out to the global south to spread support for ukraine beyond what is seen as the traditional, classic western world. for him there was value going into latin america, specifically also yesterday, this was unexpected but nonetheless important, he had a meeting on the sidelines with viktor orban in argentina. he went to the ceremony for javier millet being sworn in. both zelenskyy and orban spoke about 10 minutes, that is key because at this point when it comes to the european funding story, it is viktor orban holding the money that could go into ukraine. that meeting interesting to see

what they told each other behind the scenes. lizzy: ukraine crucially battling to stay in the spotlight, when of course, it has got to fight for that with the israel-hamas war. maria tadeo, we thank you. also making use this morning, the uproar over the handling of antisemitism at some of the u.s.'s most elite universities continues to grow with harvard's president claudine gay facing mounting pressure in the wake of the resignation of the university of penn president. they have been slammed by lawmakers over their responses over whether calling for the genocide of jews is against school policy. also this morning, in the u.k., the covid-19 inquiry turns to the prime minister. rishi sunak is set to testify today. a key question will be whether the event-chancellor's plan to

shore up the hospitality sector during the pandemic may have helped spread the disease. this scheme helps people get back out spending money during the summer of 2020. tomorrow the pm faces a difficult vote in the house of commons on his plan to deport asylum-seekers to rwanda. asahi reports japanese prime minister fumio kishida plans to replace all 15 ministers of state and parliamentary vice minister's from the abe faction of the ruling lpd amid allegations over political funding. the move is set to include his trade minister and chief cabinet. multiple senior officials will be replaced after the current polar mentoring session ends on december the 13th. a record $700 million deal for baseball's superstars show hey otani. may be a boon for japanese

corporate sponsors. the 10-year deal with the los angeles dodgers is the biggest ever in the history of north american sports. we will hear from the ceo of chip designer arm on his ambitions to dominate the ai space. that interview next. this is bloomberg. ♪

>> like most tech ceos, we all run very fine lines these days. ceos 10 years ago did not talk to government officials with the frequency that we do today. we comply with all be export controls, whether from the u.s. or other parts of the world. china is a big market, about 20 to 25 percent today. china looks like the rest of the

world in terms of the ecosystems they build, the software that runs on the processors, and in the markets they want to address. the big markets that are going for us in china are cloud and automotive. automotive and ev's are going very fast in china. >> i want to talk about arm's place in the u.k., it was conceived in cambridge, it is owned by japanese softbank. what role do you see the u.k. playing in the years ahead? >> the u.k. is our home, it is our headquarters and we are always going to be here. the u.k. is incredibly central to the future of arm in so many ways. probably our biggest bottleneck for growth is getting talent in, but we are very committed to the u.k., again, the u.k. will be critical for our future. >> the prime minister and chancellor want to turn the u.k. into the next silicon valley, is

that realistic? >> there is only one silicon valley, it's a unique area in terms of its ecosystem, universities and how the whole thing works. does that mean it can't be imitated on some level in other parts of the world? no, not at all. the government has been doing a fantastic job, and cambridge itself is a rich community of small companies, incubators. >> what would you say to any incoming government, whether it is the conservative or a labour party government that you want to see happen? >> we are very committed to the u.k., this is our home, we intend to stay here. please make it easy for us to attract world-class talent and engineers to work for arm because that is the largest limiter we will have for growth is access to talent. if that gets anymore difficult,

with a change in government that you described for the next election, that would be a headwind i would not want to have to engage on. lizzy: that was the arm ceo rene haas speaking with bloomberg's tom mackenzie, who joins me now. tom, one of the scariest lines for me was where he said the thing i worry about most is humans losing capability. i always envy you having these big sci-fi chats. >> i'm paraphrasing, but he says we essentially need a kill switch for generative ai, that's his concern, that we lose control of artificial intelligence and the robotics built on those platforms. that keeps him up at night. at the same time, this is a ceo very much driving this company that was born out of cambridge in the 1990's to dominate in artificial intelligence, as it has gone in smartphones. there are big question marks

over whether he can do that. nvidia is the chipmaker in focus in terms of the biggest benefits from that generative ai revolution, but he wants to position this company to play a role. he talked about wanting to have 50% market share in data centers where these large language models like openai and google barred are trained on. he is targeting 50% market share. the smartphone business in which they dominate, the vast majority of smartphones have arm-designed chips, that is a sluggish market, hence the need to pivot. lizzy: how big are those ambitions? >> critics would say that in the data center area where he wants to get that more than 50% market share is a much more commoditized market. you can go to amd, for intel, their competitor for chips that power the data centers. rene haas would say we have an advantage because our designs

are more energy efficient. he is talking about the fact that a lot of people are scrutinizing how much energy these data centers use previous se has an -- he says we have an advantage and points to microsoft with their own data center based on arm technology. he says that's an example of how we partner with the biggest tech firms to get our technology in there. he also says they are well-placed to play in encz computing, so that is happening chips in your phones and devices at home, ai chips to allow you to access those aie efficiencies and services. he says the efficiencies they provide could be used as well. lizzy: bloomberg's tom mackenzie, our europe markets anchor coming up next on markets today. let's continue our conversation about ai because it is not just what companies can do, it is what regulators can do to protect that action. the european union has reached a

hard-fought deal on how to regulate ai this weekend. it is poised to become the most comprehensive regulation of ai in the western world. for more, we join aggi cantrill in berlin. just how significant is this deal? >> it is significant because this is the first ai regulation of its kind in the western world. there have been attempts to do so in places like china, but this may also be seen as a blueprint for any attempts that the u.s.-made you in the coming months in congress. it was 37 hours of negotiations last week, but this has been in the works since 2021, when this was first conceived in the eu. it's all been about striking a balance between not limiting innovation, and not limiting the ability for european companies to develop, but also concern around these forms of technology potentially creating significant societal risk.

one of the contentious parts of it was about the biometric analysis, being able to limit the ability for places to do live face scanning. that was something the european parliament had already opposed and vetoed last spring. but now it seems to have come back on the table for exceptions pushed by national governments. they want those capabilities specifically for law enforcement, that was one side of the deal that became contentious over the weekend. companies that violate any of the rules, especially the rules opposed on the likes of chatgpt, these are fines of up to 35 million euros or 7% of the company's turnover. lizzy: it matters for companies and also of course, diplomatically important, because where the eu leads, others will have to work off the blueprint. bloomberg's aggi cantrill has

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lizzy: welcome back to "bloomberg daybreak: europe." it's a big week for economic data and central banks. let's look back at the u.s. jobs report on friday because it sets the tone for the rest of the week. it was a strong jobs report, you had unemployment taking down, a surprise on payrolls and wage pressure persisting. if you look at markets, traders pared back bets on fed cuts in 2024, and that santa yields soaring. meanwhile for equities, they managed to shrug it off, in fact they rebounded because of speculation that the u.s. can dodge a recession.

now we wait for the u.s. cpi print, and that that decision on wednesday. as we look ahead to that, the challenge for jay powell is going to be how much he can push back against the cutting narrative. it's the same story for the ecb, the bank of england and the smb, markets fully pricing an ecb cut as soon as april. different story for norges bank, they may go for one last quarter-point hike on thursday. it's a different story for china. we were speaking to jinny yan earlier from icbc. we had more of that china data over the weekend. the deflation picture continuing there. we have seen it weighing on hong kong stocks throughout the program. let's get a quick check on bitcoin. traders back to volatility. we're looking towards that that decision and traders taking profit before then, so bitcoin currently trading over $42,000, but this morning it has been

nearer the 40,000 mark but volatility very much back in season for the cryptocurrency. up next, "markets today" will take you through all of those data prints coming up this week and the central bank decisions. more of that interview with the arm ceo from our colleague tom mackenzie. that's up next with anna, mark and tom. this is bloomberg. ♪

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