>> this is bloomberg daybreak: europe. i am lizzy burden and these are the stories that set your agenda. markets trading sideways as investors await the u.s. jobs report. signs of a robust labor market way on expectations for rate cuts by the federal reserve. islamic state says it carried out wednesday's attack in iran that killed at least 84 people. u.s. secretary of state antony blinken heads to the middle east to step up efforts to prevent broader regional conflict. plus we look ahead to euro area inflation data. do later this morning for clues of the ecb right path after germany cpi rose less than expected. happy friday. good morning. it has just gone 6:00 a.m. in london and it is u.s. jobs data. let's check on these markets. you have futures pretty flat stateside after yesterday the s&p marked its fourth day of losses and the nasdaq headed

towards -- had its worst day since december 2022. these are thin volumes but futures pointing to a lower opening in europe. euro stoxx 50 futures down 0.5%. if we flip over to the cross asset picture not a lot of movement on treasuries across the curve. yesterday you had the 10 year yield hitting 4% on the labor data fueling this tactical selloff. now you are looking at the 10 year treasury yield at 3.99%. just skirting that level. traders priming for more selling after the jobs data later. they now seeing 65% chance of fed cut in march down from 85% a week ago. will this report today dampen those bets further? you have estimates going higher for the number of jobs created. over to currencies as we await the euro zone inflation, they are going to shape expectations for ecb rate policy. you have euro-dollar trading at

a 109 handle and sterling at $1.26. we had rishi sunak confirming the u.k. election is going to be in the second half of 2024 so it really puts the spotlight on fiscal measures in the lead up to that election. will it push back bank of england rate cut expectations? we will see later in the morning. the dollar is on track for its best week since september. about 0.9% this week. finally oil edging higher cementing a weaker gain as these tensions in the middle east rumble on and eclipsed the signs of weakening demand around the world. those are your markets. let's check on how asian markets are faring. avril hong is on standby in singapore. avril: we see a gauge of stocks in the region flat now even though it clocked gains after

three sessions of losses. this was the selling taking a breather. but it is back to the negative sentiment now. we are seeing the drag coming through from the risk off certainly but the nikkei actually managed to close with some gains on yen weakness. the csi 300 climbing today after several sessions of losses. this is supported by the gains in the financial stocks. a gauge of them rose by 1.7%. this is on the back of the deposit rate cuts which should be helpful for their margins. those rate cuts from china's largest lenders are prompting those bets we are going to see a similar cut from the pboc. that is where you see the chinese government bonds, the outlier in the sea of red, among these global bonds. let's look at how the dollar-yen is faring. there is the repricing going on given the jobs data from the u.s. overnight.

private payrolls as well as jobless claims really did a number on the yen. it lost as much as 1.1% against the greenback still hovering at the 145 level. it is not just about the repricing related to the fed. it is also about the boj given the quake and how the government has been doling out aid. it seems increasingly unlikely that we will see any move from the boj later this month. that is at least what some corners of the market were pricing in. now, in terms of pricing, let's take a closer look at this key options based gauge of short-term positioning which will show you traders are the least bullish on the yen since august. if you look at the technical indicators as well compared to late last year where we saw the yen showing those overbought conditions, it certainly looks like there is more to fall for the japanese currency. the focus will really be on

those nonfarm payrolls going forward. lizzie? lizzy: indeed. thank you. we can dive more deeply into the u.s. jobs numbers now. the jobs report really in focus after the initial jobless claims figures showed continuing strength in the u.s. labor market. let's bring in sam unstead from the bloomberg markets today team. we had this lack of seasonal firing seeing initial jobless claims below all survey estimates. what can we expect from the nonfarm payroll or report today? >> we have to take into account, not everyone is back at their desk at a lot of moves you are seeing are being exacerbated. that might be less the case today because of the importance of the payrolls report. there may be more people watching. as we go into the report there's already an expectation it's going to be relatively strong or at least solid enough to back up this view that started at the beginning of this year and is reversing from last year that

the u.s. economy is in reasonable shape and that those cuts everyone is expecting may come later than expected. the key number to watch is the wage growth number. a lot of the top line number depressed by the reports we had this week which gave you the lead up to the payrolls, if the wage growth number is a surprise, that might be where the moves are driven. lizzy: interesting to see the first column, noting that maybe people are not taking these numbers as seriously as before. a similar picture to the u.k. because the doubts around the survey data in the labor market surveys. looking at the treasury action as well, run us through this bearish treasury option trade targeting the 10 year yield. >> very significant trade. a sickly that would imply after the payrolls report there would be a significant move out again in treasuries. we have seen a lot of that over the course of this week but it gives you an indication of the positioning. that has been a major factor over the course of this week. fewer people at their desks.

very significant shift in positioning over the course of december and what you are now seeing is the retrenchment. what you may well see is that continue over the course of the rest of the month. there's nothing really to prevent that from happening. once we have the payrolls report you will be looking for every sort of piece of incremental data they can. lizzy: speaking of which, beyond today's jobs report we had a slew of u.s. economic data. talk us through the broader move in markets the first week of the year. sam: we have come into the year, december, huge move toward the federal reserve cutting earlier than initially expected. a lot of that has been priced in. that has pulled back into has rippled through the rest of markets and treasuries falling. the dollar as you already mentioned has been very strong this week. this is going into a year where everyone expects a week year. what job reports have done is just confirm the bet that actually those bets, the cuts

from the federal reserve, may come later than had been priced in in what was quite an extreme positioning over the course of december. lizzy: thank you for that. sam unstead from the bloomberg markets today live page which i'm sure we'll be following the market moves after rishi sunak said the u.k. election is going to be in the second half of 2024. we thank you as always. now to events in the middle east. islamic state has claimed responsibility for wednesday's attack in iran that killed more than 80 people and threatens to further inflame tensions in the middle east. joining us for more is bloomberg's patrick sykes in istanbul. what more detail do we have here? what would a sunni jihadist group like is target iran? sam: -- patrick: yes, they are ideologically and religiously opposed to shia ruled iran. it is also worth mentioning iran

and is fought each other directly in iraq and syria. often led by qasem soleimani, the men who cemetery was the site of this week's bombings and for whom commemorations were being held, which is why there were so many people there and so many casualties. isis has had this motive. they have performed attacks against iran in the past, lb it never on this scale. it is quite a shock to the iranians as well. this should be a risk off factor. it should put to bed the idea that iran had floated that israel had a role in this. unfortunately iran's official position is that isis is created by the west in order to weaken muslim states and therefore to protect israel.

so i think we are still waiting for how iran is exactly going to respond. in the past they have responded to isis attacks with missile strikes in the region. if we see a repeat of that it is a fairly limited response. but they are leaving the door open as long as they keep the israel element in play. lizzy: we have antony blinken heading to the middle east. what does he hope to achieve on this visit? patrick: it is a huge itinerary. turkey, uae, saudi, israel, the west bank. it gives you a sense of the number of players who have a stake in what is going on. as a result, how difficult it is going to be to achieve something. the priority is going to be de-escalation and the fronts keep increasing as to where he wants to see that after each similar trip he has done.

they have now got the border with lebanon and israel very much active. hezbollah they're keeping up those attacks on israel. we have the red sea where houthis have been disrupting commercial shipping. that is not going away even with this u.s. led force in the region. now the attacks. they will be looking to ensure iran's response -- to get help from allies in the region so iran's response is something limited. something islamic state focused and not something that's going to inflame things regionally even more. lizzy: thanks to bloomberg's patrick sykes in istanbul. we keep an eye on the oil price with tensions in the middle east in mind pushing actually brent higher to $78 per barrel currently. the mcdonald's ceo says

misinformation around the israel hamas conflict is hurting his business. the comments, as the burger chain received boycott calls when post on social media showed video of franchise stores giving meals to israeli soldiers. middle eastern locations are part of a division which generates about a 10th of the company's revenue. staying with tensions in the middle east, short-term rates for container shipping are soaring as threats to cargo vessels in the red sea reduce capacity. according to cargo booking and payment platform freightos.com, the price for a container now tops $4000, a 173% jump since diversions started in december. according to newly declassified intelligence, the u.s. says russia used missiles from north korea in attacks on ukraine in recent weeks. national spokesperson john kirby says moscow -- national security

council spokesperson john kirby says moscow deploy them on january 2. he says russia plans to keep using the korean missiles and is looking to acquire more weapons from iran. >> we assess that russia intends to purchase missile systems from iran. the most effective response to russia's violence against the ukrainian people is to continue to provide ukraine with air defense capabilities and other military equipment. to do that, we need congress to approve our supplemental funding request for ukraine without delay. lizzy: that was u.s. national security council spokesperson john kirby. we have a busy day ahead aside from the geopolitics. 10:00 a.m. euro area cpi numbers set to have bounced back up in december driven by energy base effect. the core reading should fall only slightly. this will feed into expectations for the ecb path for rates and

therefore into euro-dollar. currently slightly weaker at the 109 handle. we have the big event of the day , the u.s. jobs report at 1:30 p.m. u.k. time as we've been discussing with sam unstead. at 3:00 p.m. it is factory orders. you can get around up of the stories you need to know to get your day going in today's edition of daybreak. and course they have a great preview of the jobs numbers for you. they are also leading on huawei which they say it's newest laptop is running on a five nanometer chip made by tsmc. so it is a teardown of the device by tech insights, the research firm. it has countered speculation that huawei's domestic partner semiconductor manufacturing international may have achieved a major leap forward in fabrication techniques. check out that story on the daybreak newsletter you can find at da why bigo -- at dayb go.

plus the fallout from a controversial deal that gives ethiopia access to the red sea. escalating tensions in the horn of africa next. this is bloomberg. ♪

lizzy: 6:17 a.m. in the city of london and we are going to head to africa. south africa has unveiled an updated blueprint to tackle its energy crisis. the plan proposes 100 gigawatts of energy capacity being built by 2050. it includes a variety of technologies and fuels including solar, wind, nuclear, and coal. africa's most industrialized economy has been crippled by regular -- caps.

elsewhere, senegal has upheld the conviction of the -- of course we have elections coming around the world but he received a six month suspended prison sentence for accusing senegal's tourism minister of embezzlement. the sanction would bar him from the presidential race under the country's electoral laws. elsewhere in africa the u.s., eu , and african union are calling on ethiopia and somalia to de-escalate tensions in the region near a global shipping chokepoint. a diplomatic spat erupted when landlocked ethiopia signed a patch with somaliland to give it access to the red sea. good morning. tell us more about the international reaction to these events. ondiro: thank you. we are seeing the international

community call for diplomatic conversations and the restoration of normalcy. the african union is saying there needs to be mutual respect between somali and ethiopia and this will ensure it de-escalate's the rising political tensions in the region . we are seeing the european union and the usa recognize the sovereign and territorial borders of somalia within his 1960 borders and calling for diplomatic dialogue. egypt has taken a different route choosing to stand behind somali and support security and stability. from everything we are seeing, ethiopia is playing a lonesome game. it has triggered protests in the capital of somalia. lizzy: what is actually at stake if these tensions escalate for the horn of africa? ondiro: global trade is what is at stake.

it is a global shipping stock point -- shipping chokepoint. because of strategic importance, several countries have moved naval bases there because of commercial interest. 12% of global economic trade passes through this strait so this could disrupt existing power balances. lizzy: this could feed into inflation which could push back when we see a rate cuts from central banks around the world. we thank you for your insights. bloomberg's ondiro oganga, great reporting is always. coming up, could this be the year that dealmaking bounces back? we will get the outlook from one of goldman's top m&a bankers next. this is bloomberg. ♪

lizzy: welcome back to bloomberg daybreak: europe. 6:23 a.m. in london. goldman sachs says a comeback in private equity activity is the key to ending an 18 month slump in dealmaking. the lenders cohead of global m&a told us what he is seeing in the marketplace. >> there's a lot of pent-up demand. there has been relatively little consolidation over the last 18 months. it will ebb and flow but there's a lot of large players who have sat and watched. whether it be political or regulatory who now are having very active strategic conversations. >> what does the pipeline look like now? it is interesting when i speak to you and your peers, everyone seems to have been busy. it is like that winter break never happened. i talked to people working out of hawaii and other countries

even this week. what does the pipeline look like? >> i found it to be very active. it is interesting the pipeline of dialogue is as robust as we have seen. what the challenge has been is just getting -- on transactions. coming out of covid the imperative was a strategic desire to get things done to reposition companies, has not changed. the support from shareholders to strategically reposition companies has not changed. getting the fingers to meet on valuation because of interest rate moves or other things has made getting deals done harder but the dialogue continues and as we have seen -- and again, we are very balanced. we are what i call a recovery market. if 2021 was a 10 and the first half of 2022 was eight, 2023 was a four.

we are in that five or six from my perspective but you can feel the momentum and the dialogue. the question is will the fingers meet? >> what brings this year from a four to an eight again? private equity or something else? >> if you look back over five years, private equity was between 35, 30 8%, technology, media, and telecom was between 30% and 40% of m&a. both of those dropped dramatically. what brings it from five to eight is going to be recovery in private equity activity. not just on new acquisitions, but modernization. there are multitrillion dollar portfolio companies sitting inside the portfolio -- inside the rabbit equity firms. that will take you from four to eight itself. lizzy: stephen feldgoise speaking to bloomberg. here are some of your other top

stories out of the u.s. this morning. bloomberg has learned bridgewater associates flagship hedge fund lost 7.6% last year. the entire drop came in the last two months of 2023 reversing what had been a gain of 7.5% up to october. losses for the world's biggest hedge fund corresponded with the biggest two-month gain in global bonds since at least 1990. elsewhere the maker of wilson tennis rackets has filed to go public in the u.s. targeting an ipo of $1 billion. a listing could value it at as much as $10 billion. greater china drove nearly 1/5 of its revenue growth in the first nine months of last year. elsewhere, growing concern over iphone sales has triggered a second analyst downgrade on apple's stock. piper sandler lowered its

recommendation from overweight to neutral after holding a bullish view from march 2020. he attributes the downgrade to a week macroenvironment in china. the note follows a more bearish move by barclays. microsoft is adding a button to the windows keyboard to activate its ai service. the copilot key is the first change to the windows keyboard layout since 1994. microsoft's hardware numbers will show off windows computers with the button at the ces technology conference. we are going to be looking ahead to the u.s. december jobs report and what it means for the world's largest economy this year. that is coming up next. this is bloombe i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move

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lizzy: good morning. this is bloomberg daybreak: europe. these are the stories that set your agenda. markets are trading sideways as investors await the u.s. jobs report. signs of a robust labor market way on expectations for rate cuts by the federal reserve. islamic state says it has carried out wednesday's attack in around that killed 84 people. u.s. secretary of state antony blinken heads to the middle east to step up efforts to prevent a broader regional conflict. plus, we look ahead to euro area inflation data do this morning for clues on the ecb rate path after germany's cpi rose less than expected. good morning, happy friday. it is u.s. jobs day and we are looking at futures pointing to a lower opening this morning. you did have the s&p yesterday marking its fourth day of losses. but futures ready flat stateside now. euro stoxx 50 futures are lower

0.7%. these are thin volumes but these futures are lower than they were even just 30 minutes ago. if we flip to the cross asset picture, not a lot of movement in treasuries across the curve. the 10 year yield did hit 4% yesterday on labor data fueling a tactical selloff. you have the 10 year yield now hire two basis points at just over 4%. we are seeing traders really priming for more selling after the jobs data later we will have a preview on that in a moment. they see a 60% chance of a fed cut in march, down from 80% a week ago. will this report today dampen bets further? if you look at euro-dollar we are awaiting eurozone inflation numbers later. they are going to shape the expectations for ecb rate policy. you are looking at euro dollar currently at 1.09 level. cable at 1.26. weaker after rishi sunak says

the u.k. election is going to be in the second half of 2024. it puts the spotlight on fiscal policy in the lead up to the election. fiscal giveaways, will it push back rate cut expectations for the bank of england? i should say the dollar is on track for its best week since september. finally a quick look to oil. brent crude trading at $78 per barrel edging higher, cementing the weekly gain as the tensions in the middle east ramp up and eclipse the signs of weakening demand from around the world. i did mention we have those eurozone inflation readings coming. we did have french and german cpi readings edging higher in december breaking a downward trend for european inflation. in the broader euro area, looks set to follow suit with numbers coming out later today. let's get more from oliver crook. what did we learn from the

inflation figures from europe's two biggest economies? all of her: after eight months of unblemished record of decreasing inflation, which is what we've seen in the euro area , that's going to end in december and we saw that bear out in the numbers from germany, france, from spain. headline numbers are not looking great. spain, three point 3%, france, 4.1%. that is just year on your figure. if you look at month on month, france with 0.1% and germany at 0.2%. those were all below the estimates. a month that was going to be bad for european inflation all things considered is not. as bad as it could be. when you drill down and look at france, they had price growth in two categories. services and fresh food. in germany we saw core come down more and more. these are the silver linings of what is not a great overall print. if we look at the euro zone, and let's not forget italy, italy we are expecting 0.5% year on year,

way below the ecb target. the euro zone 3% up from 2.4%, maybe not the end of the world. lizzy: tomorrow from the ecb then -- oliver: something like that. what is interesting is there challenges going to be the last couple percentage points down from inflation. i year ago we were talking about 10% inflation. they have come quite a distance down. what they have been saying is that the last mile may actually be the longest. i will highlight one thing for you. something very interesting we need to pay attention to. in germany remember the budget crisis? it is not done yet. they have put in these measures. they have raised the v.a.t. they have raised the last six tax, the airline ticket tax. january we are supposed to see the trend continue of prices going lower and lower. now, inflation is expected to come back to 4%.

these are the struggles the ecb is going to have to pay attention to in 2024. lizzy: thank you for coming through that data. oliver crook, boy think he was always -- oliver crook, we thank you as always. rishi sunak has suggested he plans to hold a general election in the second half of this year after growing calls from opposition parties for an early vote in may. conservatives are currently trading labor the opposition party by some 20 points in polls with soon ex parte clean to -- with s itsunak's -- sunbak's party keen to pick the best time for it better returns from saving some offset the increased cost of debt. that analysis helps to explain the resilience of the u.k.'s economy in the face of the most

aggressive rate hiking cycle since the 1980's. sticking in the u.k., one of the wettest december is on record could've been the reason for fewer u.k. shoppers in the run-up to christmas. the number of people going to retail shops and malls fell by 5% in the last five weeks of 2023 compared to the same period in the previous year. let's now switch focus stateside and today's jobs report is very much in focus. yesterday's jobless claims figures suggest the u.s. labor market strength is continuing. joining us for more analysis is bloomberg's executive editor for asian markets paul dobson. good morning to you. we've had this lack of seasonal firing driving up initial jobless claims figures yesterday. what are you expecting from the nonfarm payrolls report for december today? paul: that's the concern of everybody. that labor market data is

looking stronger than expected. the narrative toward the end of last year in the u.s. was the labor market is starting to weaken starting to roll over. that fueled those bets the federal reserve was going to be able to start cutting interest rates may be as soon as march. when you would need to start cutting interest rates as soon as march depending how bad the data is. we have had the jobs numbers and the adp coming out stronger than expected. that has given the market caution. we have seen that figure back up yields pushing higher. people pairing their bets on when the federal reserve might move. the expectation, consensus for these figures is that we will see lower headline jobs numbers, we will see slower increase in average hourly earnings, slight pickup as well in the unemployment rate. get all three of those and maybe the market will be happy and that will give bond space to rally. if we see stronger numbers than

that, particularly stronger wages, or we see a big headline number, beat on that side, the market will continue that sort of allergic reaction we have had at the start of the year. higher yields which whips back, seen as a negative for the equities market, too. lizzy: run us through the first week of trading. what stood out for you this week? paul: the first week of trading can always be a mystery. we had blackrock yesterday talking about how this is a healthy correction and you should not forget the context of that really big rally in stocks and bonds into the back end of last year, into the final because well. coming back, the market has relented. we have had pressure from all of those markets come off again. yes, losses have been consistent and fairly heavy. that does not necessarily mean -- does not necessarily give us

insight into how we are going to fare for the rest of the year. what is interesting is japan specifically which was a little bit laid-back, had an extra day of holiday. what we have seen is quite a significant weakening of the end. -- the yen. the earthquake we had over the holiday has caused investors to think maybe the boj is going to wait longer than before -- longer before it does anything to interest rates before it moves toward lift off. weakening in the yen seems like it has some legs still. lizzy: dollar-yen, the 145 handle. we keep an eye on that. in light of the earthquake pushing back the bets from when we get to the boj pivot. i want to show you a graphic the elves at bloomberg tv have put together. it indicates what bloomberg reporters see as key to the global economy this year. there we are.

what are you looking out for this year? paul: the timing of the fed pivot is key to everything pretty much and how rapidly they cut. part of that is about how rapid the u.s. economic situation is slowing down. that will determine a lot about what we see in the global market environment. how much confidence there can be that we are going to have lower yields and how sustainable is the equities rally? is there going to come a moment when equities start to disconnect from bonds and actually the growth outlook becomes negative rather than supportive? over here, we are waiting to see whether the boj can put an offensive 00 on negative interest rates and can chinese policymakers find the solution that unlocks optimism and gives

the markets confidence that can get equities pushing higher again? we had such a long period of misery, of gloom about the chinese economy. are we going to get something that re-ignites the bulls in china? thus far we have not had a great deal of inclination on that. the market is pricing in the need for more interest rate stimulus, lower bond yields, not much optimism at the start of the year in the equities market either. still waiting for something more positive out of china. lizzy: feels like we are going to have a focus on central bank pivots in the first half of the year. elections in the second and geopolitics running through. but the pivot to bullishness on china very much a theme coming out this week. paul dobson, we think he was always fo your insights. the st. louis fed has promoted former u.s. fed executive -- as president, assuming the post on

april 2 replacing james bullard who is stepping down to become dean of purdue university business school. he will become the first hispanic person to lead a regional fed bank. most recently served as the ceo of events asset management -- evince asset management. on the docket we have at tendon a.m. u.k. time the preliminary reading for euro area cpi, that is for december. there's also an italy reading do at the same time as we were just discussing with oliver crook. 1:30 p.m. u.k. time it is the u.s. nonfarm jobs report. 3:00 p.m. do not forget to watch out for u.s. factory orders and ism services. key indicators to the strength of the economy. coming up on bloomberg, former arrests and convictions to rallies. it is never a dull moment in the crypto space as we await a

decision from the sec. stay with us for that conversation. this is bloomberg. ♪

>> what has happened is those risks still are present. the yield curve is still inverted. this is one of the longest 10 years -- tenures of yield curve inversion since the early 1940's. it is really problematic that you see the markets are fighting the fed here. the rallies we have seen, what we have been calling the everything rally since november 1 really just started to be predicated on rate cuts again. if the fed was tried and true with their higher for longer mantra we would get closer to the recession. when people call for soft

landings usually what that means is there are some -- there is some problematic area of the economy. there is just not the breadth that makes it a hard landing. there are challenge areas but if we start to see rate cuts, maybe problematic areas get skirted and the fed achieves the miracle of being able to navigate this hiking cycle and not be able to normalize policy back without causing pain. problem is historically the fed has 100% track record in most instances of causing recession at least when they stay dedicated to the hiking cycle. >> interest rates are a blunt tool. what is the bigger risk right now, reignition in inflation or stronger-than-expected labor market, which is what we are seeing signs of? >> the labor market has been relatively strong. people question it, saying is that the birth death model? we have seen net revisions

negative, but on the whole the labor market has held up resiliently. when you look at unemployment claims today and the new data coming out, continuing or initial claims, they are not putting up red flags. i do not think the labor market is going to reignite and you are going to see 3000 and 4000 jobs per month created, but they're bigger risk is the inflation. the fed will have concerns about some of this which is why we scratch our heads with jay powell at the last press conference. november he talked about financial conditions being tied to bond market signaling, then rates rally, financial conditions these. no mention of it at the last press conference. if the fed does believe in the wealth effects we heard from bernanke two administrations ago at the fed, ultimately when people feel wealthy, risk assets rally, they spend more, maybe all of a sudden this starts to cause concern at the fed, we

start to see this kind of celebration of inflation. at this stage we see core inflation dampening. the trajectory is right. the market is extrapolating this into the fed is going to normalize policy back to much lower rate. it seems it is a little optimistic to think that is going to happen so soon as early as march. lizzy: that was the doubleline capital cio. to crypto because it's been a wild 2023 for the crypto industry as authorities crackdown on the sectors most well-known figures. meanwhile bitcoins value rose almost two 100 62% amid a broad rally in crypto assets. 2024 has already started with big swings. investors await next week's deadline for the u.s. sec over spot bitcoin etf's.

let's talk about how important this could be with emily nicole. how significant is this decision we are expecting from the sec? >> it depends who you ask. if you talk to somebody in crypto they will say it is significant. a signal from the ecb -- from the sec bitcoin is something they are comfortable with. overall positive for crypto. others you speak to might say it is still an etf. you are not holding cryptocurrency yourself. if we think about the broader mission of democratizing access to finance, decentralizing finance, how decentralized is that if you are holding an etf? lizzy: at least they have you for perspective. the last year has seen arrests and convictions of major figures in crypto. how much has that shaken faith in the sector? >> it is harder for people to think about crypto in terms of

traditional players getting involved. that is the signal for when crypto is going to go mainstream . when we see blackrock and fidelity moving into the market. we are seeing that with the etf playing it in a more regulated way. with ftx there was a player everybody thought of as one of those top of the pile that was always in front of congress speaking about how crypto could be part of the mainstream. the collapse of that exchange knocked confidence. how much can you trust the sector really? lizzy: you have to wonder whether 2024 is the year it goes mainstream. you have bitcoin at $43,000, just shy of the $44,000 mark. what is in store for crypto in 2024? >> depends who you ask. some people would say this is the beginning of a bull market. in 2022 bitcoin was on a tear but we still have a lot of bad news to go with more sentencing

for sam bankman-fried coming up, trials of people like the -- founder later this year. we have other crypto fugitives or people who have faith issues with the law. definitely a fair bit more of roiling in the market to go. lizzy: absolute drama. that is emily nicole, are crypto reporter. we thank you as always. there is plenty more ahead so stay tuned. this is bloomberg. ♪

lizzy: welcome back to bloomberg daybreak: europe. tesla was overtaken by byd last quarter as the world's top-selling electric carmaker. asia transport reported danny lee has been looking into the factors that made byd the king of the ev market.

it likes to describe itself as. >> the biggest car brand you have never heard of. >> now china's byd has overtaken tesla as the world's largest seller of electric vehicles. his success is a feat of long-term strategic thinking on the part of byd and the chinese government. >> we have never seen anything like this in terms of the amount of support china has extended to automakers, specifically pertaining to ev's. >> most byd cars are simply a lot cheaper than tesla's. >> they have very cheap models starting from 10,000 u.s. dollars. the most important thing is that byd is the only automaker that produces all of its batteries in house. >> making its own batteries and other components helps it reduce costs. all of this is setting china up

to be the dominant global player in transportation of the future. electric vehicles, a business that could be worth $8.8 trillion by the end of the decade. lizzy: you can see more of that bloomberg originals documentary right now online and on youtube and for our subscribers on the terminal at bloomberg.com as well. i want to take you through some of the charts we have to set you up for the day on the terminal. i'm going to start in china. with sentiment toward the economy and markets as depressed as they are right now you might say it pays to be contrarian. stocks have really been so dirt cheap. is this the moment china stocks start to get attractive? are former china markets guru says it may be time to get bullish on china. you can see stocks risk premium reaching an extreme level. i want to take you to a chart on

the u.s. economy because of course it is jobs day. as we look ahead to the december nonfarm payrolls report it looks likely we are going to see a slope in the number of jobs added which will factor into expectations for the future path for rates. the market now seeing a 65% chance for fed cut in march down from 85% a week ago. is this report going to dampen those bets even further? finally i want to take a quick look at the dollar. it started 2024 strong on track for its best week since september. that is you on your terminal charts. stay tuned, this is bloomberg. ♪

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