>> good morning and welcome to daybreak europe. let's get to the stop -- the top stories that set your agenda.

houthi rebels will continue attacking ships despite the u.s. moving to protect the vital trade group between europe and asia. european union finance chiefs agreeing to new rules on debt and spending after months of wrangling and discussing how we got to what it means for the block. incorporate moves, macron gained in late u.s. trade after the biggest american trade maker forecasted stronger revenue growth, all coming from data center demand. toyota among the losers. that comes after it's hit by a million car recall. let's get a check on the markets. it's a lot to digest. geopolitics raging in the background. it is then, holiday trading. what's important to keep in mind is you are seeing a selloff in the states. rebalancing when you look at the futures actions, a little bit of a different picture. regional divergence. i would argue it's a catch-up.

even though we are talking about thin holiday trading value, some of these moves are magnified. even at full holiday trading volume, whether or not you see this in futures, it tells you it is a very low amount of participants in the market, which is creating bigger moves. euro stoxx 50 futures down. underperforming down 6/10 of a percent. what's important following sentiment you saw in the american session. a massive selloff in the s&p 500 overnight. the rest of the world is playing catch-up. when you look at futures, buying the dip. you are talking about discounted values in the stock market in the u.s., the futures market is how you are diving in. outperformance in the tech space, higher for nasdaq 100 futures. let's go cross asset. the bond market still matters when we talk about monetary policy where we get fed speak, pieces of it. 10 year yield higher by two basis points. you would think the yield

picture actually would help the euro. you are 100% right. euro-dollar at 109. a good function comes from dollar week is, which continues to be the theme. cable trading higher, 126 on that rate. dollar week this across g10 currencies, in theory, should have helped to brent crude. it is virtually unchanged. 79 handle on the contract. that is your picture in europe. let's look at how asian marks are faring. avril hong standing by. walk us through the asia market trade. avril: we see asian stocks rally, taking a breather as we approach the end of the year. the csi 300 is bucking the trend in the gains accelerated in the afternoon session. it seems investor sentiment is on property data that showed a home sales surge in shanghai and beijing on the back of policy

easing. that's the focus for investors. offshore yuan is in the spotlight after it had gains following the report that the biden administration is mulling higher tariffs on chinese goods, including electric vehicles. so far it looks like investors are shrugging that off. let's look at the chinese ev stocks listed in hong kong because they are mostly under pressure to date. many faced 25% tariffs that prevented them from making inroads into the u.s. market, but it's not just tariffs at play, it's also the intense competition that the chinese ev makers face domestically. hsbc pushing out a note that these pricing pressures will certainly continue into 2024 for many of them. kriti: let's talk about from the macro to the micro and talk about toyota. the stock slumping amid a safety scandal, largest car maker in

the world, what we know about that story? avril: we see toyota stock among the biggest, if not, the biggest drag on the msci asia-pacific slumping 5.6%. that was the biggest intraday drop since march 2022. two things happening, one is a massive recall of vehicles of the u.s., one million vehicles, this is related to models from the 2020 to 2022 side of things. this is related to the airbags, the other issue is related to its unit. it's facing safety inspection scandals. its offices were rated. a sickly we know there was an improper testing, and that some of the tests were actually manipulated. this first came to light in april where we heard six models for the hacks that were

affected. it has since been made clear that almost all of the models were affected. given that it is actually a supplier to the other big automakers, such as mazda and subaru, the concern is that this spreads to broader japanese auto industry. it has suspended shipments and analysts point out that production might have to be halted. we are seeing toyota really facing a crisis of trust. last year we saw how it struck making unit was embroiled in a scandal over fortifying -- falsifying emissions data. it said fundamental reform is needed. toyota saying that it will look into management and business operations going forward. kriti: we are already seeing ripple effects not across just the japanese market but carmakers around the world. avril hong, we thank you for your report. let's stick with the corporate space and go to the u.s.

shares in micron popping after the company posted a fairly strong revenue forecast. they are saying the growing demand for our ai chips is coming from -- and it's from 5.1 and $5.1 billion with estimates of less than 5 billion. let's get the details from bloomberg's debbie. they are talking a lot about this data center demand. really strong sales coming off of that, how is this different than the other companies we have seen that have touted that same demand? >> there is an indication of what kind of demand we may be looking at, so it's the demand for expensive memory chips use in these centers that help create the software that's already helping its outlook. they are also saying that these

type of memory chips have already sold out. these ships are targeted in 2024. although the company will wait until pricing is slightly better to pull up its output. kriti: is that a short-term demand story, or could this go on into 2025 and 2026? >> according to micron executives and wet the ceo has said, the ai trend has just begun. so micron said yesterday that this high revenue, high profit opportunity has just got underway. of course a media surgeon saying that the ai trend is just starting. there is also the go to of the chipmaker repeating me saying

that ai and major trends like ai and 5g are going to be a multiyear growth driver. kriti: certainly something we are watching closely. micron was the company initially sanctioned by china and had to find other ways to help get 10% of the revenue coming from that specific region. we thank you so much for that context this morning. i want to go from the micro back to the macro. geopolitics play into the narrative. yemen's houthi rebels have vowed to continue targeting ships in the red sea despite u.s. moves to protect and of the most important waterways. bloomberg's henry meyer all over this story. walk us through the u.s. military action. when it comes to who the infrastructure, how much of a threat does it pose? >> as we've seen in the last two

weeks, in particular, a major threat. several ships were targeted, one vessel was hijacked, and i think that initially it was hoped that this threat could be contained, but it's clear that it's something that needs to be dealt with. the u.s. this week took action. it said it was forming an international naval coalition to ensure maritime security. but we still haven't seen exactly how that's going to operate and whether that step is going to be enough to deal with this threat. obviously, there are dozens of ships which are passing through this area every day in either direction. is this measure going to be sufficient to deter the who these -- to deter them? kriti: what escorts be helpful. there's a hesitance to put boots on the ground or directly get involved.

we seem to u.s. navy ships. what more will it take outside of direct confrontation to ensure safety for some of these commercial vehicles? henry: that is getting back to what i was talking about. the number of vessels traveling in this area is so great on a daily basis that i don't think the u.s. and its allies have the resources to protect them. you get into the issue of if they will strike the military infrastructure in size yemen -- inside yemen. there are great concerns in the u.s. and elsewhere in saudi arabia that this could set off a chain of escalation and provoke other attacks. we know the houthi's have launched strikes on neighboring countries in the past. in 2019 they briefly took out saudi arabia's oil output. this is a concern.

how do you respond to this threat? kriti: we are getting comments coming out of senior members of the united states government. secretary of state antony blinken saying israel's mission needs to shift from a large-scale military attack to a more precise operation. it will reduce the toll on palestinian civilians. take a listen to what he had to say. >> it's clear that the conflict needs to move to a lower intensity phase. and we expect to see a shift to a more targeted operations. kriti: in context of those comments, i want to bring you back into the conversation. walk us through how serious the u.s. pressure is on israel when it comes to the gaza offensive. it feels like the partnership

has really diverged. henry: the u.s. has been trying to urge israel for some time to scale back the offensive. frankly, stop in at some point. so far, this has been unsuccessful. we saw the limited pausing hostilities that happened in early december that only lasted a week, but ultimately, the u.s. is hoping to bring this conflict to some kind of a conclusion. i think israel is willing to consider another humanitarian pause to allow more hostages from gaza, but it does not seem to be willing to really reduce the level of intensity of the current offensive. we are talking about major airstrikes, in addition to the operations on the ground. of course the human toll has been very significant up to 20,000 palestinians are reported to have died inside gaza

according to the hamas run health authority. kriti: it's something we are watching closely. it's something that was supposed to be a short-term conflict on the initial readthrough that happen october 7 and now it looks as if it can happen months, years. we thank you -- we thank you for that crucial context. it's affecting global trade in early markets. we are monitoring pieces of economic data, jobless claims are on the horizon. we get a little more insight onto the u.s. labor market and coming up at 1:30 p.m. u.k. time is the market as hot as it has been the last minute -- the last year or so. it feels like a minute because the narrative has changed. u.s. gdp, same time you will be getting those numbers, it doesn't feel like we get a slow down. what we get on the jobless claims. the jobs might be more a factor in any light trading. the biggest game changer could

come after the bell in the u.s. session. nike earnings, a great the weather for the global consumer. as well their exposure to china. those earnings. we will have full coverage on bloomberg. get a round up of the stories you need to know to get your day going in today's edition of daybreak terminal. type in d.a. go on your daybreak terminal and you'll get all the major stories from the corporate space, specifically in the united states as the geopolitics. stick with us, plenty more analysis ahead. this is bloomberg. ♪

kriti: welcome back to daybreak europe. the ceo of first quantum minerals said his company's commitment to panama as the interview bloomberg comes after

they order the company and all of its operations at the $10 billion copper mine. it's one of the world's biggest. take a listen to what he had to say. >> the supreme court decision came out only very recently. from here, our focus is on the near term, and that's around the welfare of our employees, and they would be in for -- affected by this. also the environmental realities of a closure that has happened so quickly. there are a lot of questions are unanswered and we are seeking their that question with government. we want to be part of that solution but that's an emerging conversation. >> if i'm an investor, what are you telling me? >> we focus on the resolution of the moment around how we resolve this in terms of the near term impacts on environment, the welfare of employees in over the longer term our commitment to panama is absolute. we put $10 billion into the out -- the country and that

commitment is absolute. >> are you looking at things like higher royalties or tax regimes? you are going to the government saying, we will give you a super big cut of the mind because the country will lose a lot. are you making offers that could help move the process along? >> we've recently heard from government in the last 24 hours, in terms of putting in place the framework. a conversation dealing with the immediate issues around the forced stop in closure. over the long term we have been in a resolution time. we took two years to negotiate a new contract that did include higher revenues from government, but from here, will come through in the government's framework about the next conversation. >> you think a different owner would have a different result? >> a lot of the questions around the future of it are not unique to first quantum.

there has been a moratorium put on mining in the country overall. how does that resolve, and that clarity needs to come to bear. again, we focus on these immediate issues around employees, securities on the sides and the environment. those do need to be addressed, even if we go down the pathway of the longer term in panama. kriti: first quantum minerals ceo speaking to alix steel and guy johnson. over 2000 mine workers at him polyp plant them mine in south africa have returned safely to the surface. it comes after days of underground protests. the company known as impact says the company was over misunderstandings around ownership changes, pension funds and concerns over a profit-sharing arrangement. meanwhile sticking with the middle east region in africa, let's charge central-bank decisions with egypt and turkey making announcements. turkish policymakers looks set

to raise rates for the seventh meeting in a row. economists expecting the one-week repo rate to be hiked from 40% to 42.5%. the decision is likely to be a tossup between the hike and a whole. the north african country has not raised borrowing costs since august even as it battles high inflation with central-bank likely to wait until it can an act and other along a weighted currency devaluation. something we have been watching in terms of the readthrough from the conflict in the middle east. coming up, nearly half of all new passenger cars registered in the european union this year were electric. we dig deeper into the eb market outlook, next. this is bloomberg. ♪

kriti: welcome back to daybreak

europe. i'm in london. the united states is reported to be considering raising tariffs on some chinese goods. it includes electric cars and solar products. the wall street journal saying the biden administration is debating trump era levees. which targeted around $300 billion worth of chinese goods. the white house aiming to complete a review early in the new year. i want to get immediate reaction in a media analysis. head of advance transport energy storage over at bloomberg nef joins us this morning. you -- your immediate reaction on that wall street journal report, what does that look like in terms of readthrough for a thriving ev market? >> for the u.s., i don't think it means very much, it looks much more like a political statement than one that will practically affect the auto market in the u.s. that's because the u.s. already has high tariffs on chinese ev's. it's 27%. there are no eb sold made by

chinese manufacturers into the u.s. i don't think that will have a big impact. i think it's about looking tough on china then about really affecting the u.s. kriti: i want to shift a little bit to the ev space, broadly, and really grind it out. it is something that is a tricky market for people outside of china to actually get their hands on it, i want to talk about sales, if they are still climbing and you see establish automakers continue to feel some of the pressure, who is making this work for them? >> you heard establish automakers say, we are struggling to sell these, there has been a narrative about eb sales slowing down. we are expecting around 14 million electric vehicles sold, that's battery electric and that's up 10 and a half million from last year. that the 35% growth rate for the global industry. for the u.s., it's higher. it's probably 40% to 50%

depending on where it comes out. what you have to conclude is the groups making the most noise about the slowdown are the one struggling to sell their ev's, but it doesn't mean everyone is struggling to sell eb's. byd, tesla is growing, so these manufacturers are growing quickly, it will be 7% of the auto marker, some of the establish automakers like hyundai, volvo, who have made strong efforts to push ev development, they are saying, we are seeing strong demand for our product. i think there is a nuanced story that slowing down for some, it's growing strongly for others. kriti: talk to us about regional tensions. when we talk about how the readthrough exists in terms of costs, i'm wondering if even though you are seeing demand for ev's, if some geopolitics get in the way, we were just talking about the biden administration's take.

the e.u. putting similar restrictions on china. it how could that translate to someone who wants to go to a tesla store and say, we want to buy in ev? >> this is one of the big tensions coming up. for a long time policymakers were looking to get electric costs down. that was her goals around emission reduction in air quality improvement. now there is another tension which is that, not only do we want cost down but we want the stuff to be made locally. that's because auto making is a big part of gdp. there national champion automakers and nobody wants to see them fail in their individual countries. they are good source of jobs and innovation. you see the second target for the second goal coming in, which is we want more made locally. and sometimes at goal of getting as much of it made as fast as possible. and getting more of it made locally. it will start to come into

tension and conflict with each other over the years. kriti: it's a real interesting dynamic. it was easier to navigate when regulation and someone did not get in the way in the united states. but something we are arguing globally as we see transition to renewable. bloomberg any yes, thank you so much for that crucial analysis. coming up, they e.u. finally agreeing to new rules for government debt and spending. the details 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. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up. plus, now through december 31st, eligible xfinity rewards members can get 25% off a storm ready wifi device.

all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. kriti: good morning and welcome to bloomberg daybreak: europe. let's get to the top stories that set your agenda. yemen's houthi rebels say they

will continue attacking ships in the red sea despite the u.s. trying to protect the trade route between europe and asia. european union finance chiefs agree to new rules on debt and spending after months of wrangling. will this cost what it means. macron gained in late u.s. trade after the biggest american chipmaker forecasted strong revenue growth all coming from datacenter demand. toyota among the losers. it comes after a hit by a million car recall in the united states and read on the japanese offices. a lot of crosscurrents in the midst of very thin holiday volume. what does that mean for the markets? it means bigger moves, exaggerated moves. but a divergence comes down to what we saw in the u.s. session, a pullback, people pulling out of the u.s. equity markets on the ripple effects are clear around the world. on asia trade you are seeing it and also in european futures. euro stock futures down by .5%.

where you are seeing a little bit of green on the screen is in the u.s. markets. when you look at futures, a little bit of buying the dip. traditionally at this time of day, european asia investors aren't buying into american futures. to sit -- to see that speaks of bottom feeding, given the selloff. let's go across asset because the bond market matters. they are still repricing for rate cuts going into 2024. the 10 year yield is below the 4% level. will it come back to the technical around question market does not look likely in the last few days of the year. higher by two basis points this morning. not a major move but enough to suggest there is a little bit of the selloff in the bond market. perhaps one to match what you see in the equity market. the affects market is where i like to nerd out. the dollar weakness story into 109. 126 as getting a little bit of a boost from that rate cut

narrative. brent crude, marginal traits down 1/10 of 1% trading at a 79 handle. i want to get to one of our biggest stories in europe. european union's finance chief ended months of wrangling to agree on new rules with a gradual path to cut debt. the new rules will define the blocks ability to invest in key sectors like defense. >> the rules are more realistic. they respond to the post-pandemic reality, and they incorporate those to lessons learned from the great financial crisis. and i think from this point of view there is in ownership, and there is increased understanding of the implications of the rules and the necessity to ensure that there is enforcement of these rules. kriti: spanish economy welcoming the new rules. a little more context. bloomberg's correspondent joining us. good morning from a london. a has been months of this will

they? what has been agreed, what is the readthrough? >> good morning, we finally have our new rules that it only took about two hours of video conference call to finally get this agreement. there was a lot of arguing before, and there was even a meeting the day before between the french and the german ministers. so that was between the two biggest countries. so what if they agreed to? a very complex set of rules that makes everyone more or less happy or more or less bad because no one got what they really wanted but everyone got something. for example, countries with over 90% of gdp has to treatment it by one percentage point of gdp during what would be called an adjustment time. countries between 60 and 90 only have to make up the effort. just to give you an idea. member states have to create a fiscal buffer of 1.5%. below the 3%.

you may remember there was 3% threshold. it is now still 3%, but you have to create a buffer of 1.5. effectively you are going to 1.5. that means they are happy because in some ways it's more restrictive and tougher. but why are the dogs happy lake italy, they are happy because they get to use the money for investment and it will be counted towards this. if you are investing in green energy and growth, it's not prosperity causing to diminish things. that is the main takeaway, but it is a very complex thing. kriti: i think our international audience needs to know the nitty-gritty. even though it sounds complex in line with the european union, it's important to keep in mind is when the bond market trades on these spreads, they are watching the nitty-gritty and whether or not these major

countries like italy can actually meet those rules and that determines how big the spread is. talk to us about what we heard from the spain's economy minister. she said it is more realistic than the previous ones. are they if they are tighter? >> i have some doubts about what she said but they had to say something. the previous rule would never be affected by anyone. in some ways, there were all these additions. will these very complex systems, where you have times of adjustment, religious movements that countries will target, will they allow it more or will they be cut -- cap to their word, because each country will have an approach depending on their situation. the finance minister commenting on the deal yesterday said this is the best deal we could get.

only time will tell if it's really the deal. kriti: i love the believability, considering there are questions about the fiscal outline that was previously said. there was already doubts there. we appreciate your honesty. i want to stick with the european continent. the french president defended his government's decision to agree to a hardened version of his immigration bill. emmanuel macron said it's the only way to counter increasing support from the anti-immigration movement. from france we go to here in the u.k. in switzerland. you can switzerland signing an agreement. our financial services, a post-brexit accord to deepen ties between their respective financial centers. chancellor jeremy hunt is due to sign the deal this morning. joining us us as our u.k. correspondent lizzy burden. walk us through the significance of this deal. lizzie: these are europe's two

biggest financial hubs. this is part of the project to sign post brexit trade deals for the u.k. free from the shackles of brussels. we remember earlier in the year they signed the in pacific trade bloc of 11 nations. but, let's be frank, nothing is going to make up for the loss of output because of brexit. the independent fiscal watchdog says that's 4% of output loss. all the trade deals in the world would not make up for what's been lost, in terms of the relationship between britain and its closest trading partner. so this is significant, it's about the mutual recognition of regulatory regimes on the two sides. it significant for the city of london and all of the financial services from insurance to banking to asset management. >> these have been years of wrangling. jeremy hunt, the chancellor's

except -- is expected to sign that burn financial services agreement. and i say to you, the treasury statement is that they could not have done this if they had a had left the european union. is that true? well, britain does have financial have to. it does have heft in terms of the regulatory regime. so, perhaps it is true that we were able to get more outside of the european union when it comes to the equivalence framework within the eu. perhaps britain could go farther , not only that, perhaps a paves the way to a bigger deal later for the u.k. and not only financial services but a broader trade deal. kriti: they are trying to set a precedent. our u.k. correspondent all over that story, we thank you for that crucial content. i want to continue what we see in europe, it has been nearly two years since russia's invasion of ukraine. russia's vladimir -- volodymyr

zelenskyy facing billions of dollars of foreign aid. u.s. lawmakers left without agreeing on fresh funding. while eu cash has been blocked by hungary. there is a feature about how ukrainian businesses are becoming more self-reliant. joining me this morning -- i'm going to make sure i say this right. you have been speaking to businesses in ukraine. is there a sense of purpose in terms of how they are actually beginning to feel? >> absolutely. the ukrainian businesses have been adapting to the war and there's a real recognition that is creating conflict and that they have to be self-reliant. i think that has created a new sense of purpose, both for the businesses and for the employees. it's not just about making profit and selling wet wipes or diapers or whatever it may be. i spoke to a milk producer as

well, it's about ensuring ukraine survival because those tax receipts go into the public coffers, there's the trade balance to think of. so they are motivated by the sense of purpose, which isn't to say that it has been easy, it has in at all. kriti: have the negotiations progressed or changed? there's an argument, one i would say is in the minority but in argument nonetheless that if you see a pullback in some of the funding from the u.s. and eu, it motivates ukraine to find an independent solution in a way that perhaps was in incentivize to before. what does the negotiations do to change that outlook. >> i think it brings home that ukraine can't defend on anyone in the way that it cannot itself. if you look at the budget for next year, defense spending is covered -- almost covered by the budget. that's tax receipts from both

individuals and companies. it gets to about 93%. but you see that there is no other spending, and there has to be public spending. rates have to get fixed, hospitals have to run, schools have to run. i think this idea that ukraine can be completely self-sufficient when it's fighting this much larger ally seems a bit unfair. if you consider the way the debate happens, it almost seems as if it's this tap you can turn on and then turn off and pick up where you left off. but, of course, every thing humans are involved in, every failure to regain ground or military losses go hand-in-hand with human losses. and those people cannot be brought back, those are resources that cannot be replenished. so i think that's this idea of motivating. i'd say from my reporting, they

are already motivated. motivated to invest in their businesses to find new export routes to develop new products, to take up market where russians have left, for example, t production. so, motivation doesn't seem to be a problem, but it is tough. kriti: something i imagine would help the welcoming party if it gets the membership it's so desires. we thank you so much for joining us this morning. i want to get our other top stories from around the world. u.s. international trade commission has denied apple's request to delay a ban on imports of apple watch models that are set to begin on christmas day. apple said it would pull its latest watches from the shelves due to a patented dispute over its blood oxygen monitoring technology, in interview, the ceo says apple has not reached out for settlement talks with his company.

sticking with the corporate space, warner bros. has had preliminary talks on a merger combining two of the biggest media companies in the world. a combination would unite famous hollywood properties including paramount and warner brother film and tv studios and put a number of pay-tv and broadcast stations such as hbo and cvs -- cbs under a single roof. a unit of ampio pharmaceuticals have agreed to delist patents in the u.s. on older inhalers and injectors, potentially accelerating the approval of generic versions. the delisting's comes in response to the federal trade commission, which sent warning levels to 10 pharmaceutical firms over the validity of patents. coming up on the program, discussing the key themes for european banks in 20 to any four. that conversation is next. -- in 2024.

that conversation is next. this is bloomberg. ♪

kriti: welcome back to daybreak europe. i'm kriti cooped up. morgan stanley is discussing putting capital into private credit fund that would include cash. they inject one to $2 billion into the new vehicle with 45 billion rays from so-called limited partners. thanks have increasingly seen businesses offering competitive terms for buyout financing. sticking with that space, bloomberg learned citigroup's getting out of debt trading. they will remove a key trader in the market. about 20 positions will be affected. it follows the banks decision to get out of municipal bond trading and underwriting. the city undergoing its biggest restructuring in a bid to become

more efficient. european banks have been boosted by interest rate hikes from global central monetary policy, but as rates now, the debate shifting a one cut. i'm joined by philip richards who joins us from bloomberg intelligence waking up bright and early. does that theme stick around, that margin of support that those extra interest rates have brought? does that stick in 2024? philip: what the risk is of the last few months is we were expecting gradual rate cuts. as inflation gets more and more under control. the cuts are expected to come through much quicker. there are 150 basis points of cuts across europe. that's a drag on things in terms of their margins. kriti: we were just talking about citi.

they are known for having the weakest price-to-book ratio in all u.s. banks. we have a similar dynamic in u.s. banks. we are seeing a divergence amongst the top two. we talk about valuations, what do we need for those valuations to change given the macroeconomic environment we just discussed? philip: that is the key question. several years ago we had negative interest rates for so long crying out that these positive rates have gone up. the quality is lost charges and the devaluation is so low. whether they need to get those moving? and the main reason is it goes forward that we just mentioned about the rate cuts, but also going down into the economic slowdown. in credit quality is being based on the delayed action and it could get much worse.

kriti: when we are talking about capital requirements, there is concern on wall street about what that actually looks like. i know jamie dimon has been very vocal on this matter at j.p. morgan. do we see something similar for european banks at a time when the fiscal rules are tightening as well? philip: not really, this was a big story two or three years ago. it basically increases the requirement. the degree of the u.s. catching up on europe in terms of the capital. that said, regulators are stealing forces on the bank. we don't know the full impact of the rate hikes we had. we remain cautious. yes, we are seeing some from the banks, but nowhere near what we could've expected. kriti: in terms of the actual deal flow, the actual ipo

appetite we might get in europe, there starts to be a little bit of secret inklings for a lack of a better term, that perhaps europe and the ipo market won't be in the u.s., it will be in europe. how much credibility are you giving that stream of thought? philip: on the bank side, not very much. of course there's a hold on credit suisse and ups. their specific circumstances. but most of the deals you see from banks are disposals. we see a number of banks pulling out of the u.s. market or the non-core markets across europe. it's about shrinking down core markets. in terms of the entirety of the bangs, it is limited. this is really the right time for these banks to be doing as they thought? kriti: fiscal and monetary policy not working in their

favor. it's a real test of resilience. philip richards, we thank you for your insight and context. putting more analysis ahead. stick with us. this is bloomberg. ♪

kriti: welcome back to daybreak europe. i've got a couple of charge to put on your radar. after the bell, in the u.s. session, earnings will have global repercussions. nike is the top of the agenda. we talk about the global dynamics, specifically the shipping dynamic. nike is a great bellwether. not only is it a real testament to the american consumer, but a testament to the chinese consumer. it's relevant to the macroeconomic narrative. it is no longer to the money that matters to the economy.

chinese consumer matters. why nike has a part of that story when we talk about supply chains and geopolitics is the idea that during the supply-chain crunch of 2021, it's a gay 80 days for a pair of nike jordans to make it from shanghai to l.a.. that has been crunched. when we talk about the nike earnings, we hear with the supply-chain numbers mean, that's a number you should listen to around the monthly sales numbers as well. you are also seeing a little bit of a slight rebound that you are going to see. it is a sign of a little bit more disposed money with savings running out. that is the nike thought i will leave you with. i wanted take you to the micro to the macro. s&p 500 still really matters. what we are starting to see us a selloff going into the end of the year. the question is twofold. did the grinch show up, and how much of this is a positioning story as opposed to a macro

narrative. we are talking about rate cuts being on the agenda. that should be a positive. take a look at what the chart shows you. in terms of put volume, much higher than call volume. that's what this spike is. it tells you the bear sentiment is growing in this market from around the world. it also tells you, when it comes to options, positioning, hedging is playing more of a role in the market and something as simple as let's cash out. there is more nuance to it. specifically when we talk about the longs in this market. these earnings are actually starting a hold up. we are starting to see the litmus test going into january. the macroeconomic, this is the one that i'm really passionate about, geopolitics what's going on in the red sea. you will see this most clearly in the oil market. on the surface you aren't seeing much trading but pay attention to the spread between brent crude and nymex crude. when you see the spread wide and, this is when they pass the five dollars level.

it's an average of three dollars to four dollars. when it passes the five dollars and goes into seven dollars, geopolitics is getting priced into the market because brent crude will react more than nymex. at the same time that the u.s. is actually producing more shale. get this, saudi arabia and russia in all of history. that is the thought i will leave you with pure and markets today. anna edwards, mark cudmore will walk you through the market open. they will explore the themes and what your trade should look like going into the end of the year this is bloomberg. ♪

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>> this is bloomberg markets today. our markets live executive editor joins us from singapore to take us through the market action this hour. the cash trade is just an hour away.