kriti: welcome to "daybreak: europe", i'm kriti gupta in london. bitcoin with saws after sec's social media was hacked showing fake approval of spot etf's. investors weigh the actual decision today. when you look at broader markets ahead of tomorrow's u.s. inflation data. geopolitical developments driving much of the trade. plus, sales of the world's largest chip manufacturer tsmc fell 8% in december but it's not all bad news. we will dive into the numbers throughout the show. let's check markets because you are seeing a mixed picture. muted price action. people taking a step back as we wait for crucial inflation data to send a signal of whether rate cuts that are priced into this market are accurate. what that translates to globally is a risk off tone. euro stoxx 50 futures down zero

point 3%, ftse 100 futures down by the same amount. when you look across the atlantic, virtually unchanged. s&p contracts, 47 90 there. not much to say on the equity front because you have had regional divergence the past couple of days. the pullback in european futures is telling, especially down by this margin. round numbers are the name of the game when you look at the cross assets story, specifically in the bond market. the 10 having year yield at 4.02, still hovering at that key 4% level. take a look at the aussie. when you look at yield moves, you would think it has direct impact on the dollar, but it's actually not the tail wagging the dog story we traditionally look at. we usually look at euro-pound, but not much action there, your biggest g10 currency move is on and the aussie dollar as the cpi numbers come in more easy. you are seeing bond market

pricing suggesting that rate because should be on the agenda, nevertheless that cross stronger by 0.2%. brent crude trading just shy of a $70 handle. bitcoin with all the hullabaloo from the sec and these approval processes, trading with a $45,000 handle. normal standard deviation move is 4%. muted when it comes to bitcoin. perhaps waiting for that decision later today. i want to get a quick check on how asian markets are faring. air hong standing by in singapore. avril: we are seeing japan stocks going from strength to strength today. the nikkei extending gains and that topix reaching its highest close in 34 years, passing the peak last september. all this is against the backdrop of what looks like improved corporate governance in japan

that is supporting japanese stocks, along with their weakness and in the japanese currency, more investors shifting to the central bank will only normalize policy in the second half of this year. we got dated today that supports that view. japan wage growth slowing sharply in the month of november. we are also seeing weakness in the japanese currency at 145. let's flip the board because this japanese performance on stocks is not being repeated on and the rest of the region. it is risk off, especially in china, where we see the csi 300 and hang seng both in negative territory. the currency weakening around the 7.18 handle, against the backdrop of deflation fears coming back to the fore amid anticipation of the cpi print from the asian giant later in the week. let's flip the board again because there is little appetite for risk. i want to show you movers in the

region today. i talk to you through the japanese story, but some of the key drags on the msci asia pacific today have been chipmaking stocks amid concerns whether the chip recovery will materialize. some analysts have been anticipating. we are seeing crypto stocks losing ground today. kriti: a lot to digest. avril hong in singapore walking us through the entire trade over asian markets. i want to pick up with the chip trading and bring it to the world's largest contract chipmaker tsmc saying sales fell 8% in december, but fourth-quarter overall revenue beat estimates, a lot of that coming from demand from ai processors. mixed picture looking at these numbers. debbie wu joining us from taipei. what do we make of these december results? >> tsmc said december sales slid

8% year-over-year, but fourth-quarter sales eventually beat market consensus. that suggests demand from the likes of nvidia and ai chips are still seeing solid demand. it helps weak demand in china and elsewhere for smartphones and pcs. at the same time, earlier today, a trade group said chip sales started to grow year-over-year in november. suggesting we are seeing recovery in demand for ships. at the same time, there are some nuances, samsung earlier this week reported a fall in operating profit and revenue in the fourth quarter. this shows there might be some divergence in the fortune of large chipmakers like tsmc and memory chipmakers like samsung,

sk hynix and micron. kriti: what kind of precedent does it set for 2024? people look at the forecast out of samsung or tsmc because they are such a big player in the market and have enormous supply chains and reach through the rest of the world. it is used as a global bellwether. can we get any indication of what this year might look like? >> we have been hearing from the likes of micron, also tsmc indicated that might have passed. prolonged economic uncertainties in china and fed policy will weigh on consumer demand, also on the global industry outlook in 2024. tsmc will hold its fourth-quarter earnings call next week.

we will get a better idea when tsmc provides their spending for 2024. kriti: something we will watch closely, especially when it talks about where tsmc has been nestled within the geopolitics. debbie wu, we thank you for walking us through that crucial story. another top one we are watching. the securities exchange commission in the united states says it's account on social media platforms x was compromised when a post falsely claiming approval had been given to spot bitcoin etf's. our bitcoin analyst joins us now for more. this is a really interesting dynamic. everyone is watching for this highly debated decision that was expected to bring a lot of passive money into the world of bitcoin. there is a lot of speculation about whether or not this was a earlier crafted tweet that got

released. what is your take on what happened? >> our take is we think it may have come from inside the sec. prior to this tweet, our estimate was that the etf would be approved on wednesday, and would start trading thursday. we still believe that will happen this evening during the u.s. hours. what is interesting is this has never happened before. this is one of the largest, if not one of the largest lunches ever. you may recall last year when the first future based bitcoin etf was trading in the u.s.. it was the proshares and on the first day of training they amassed more than $1 billion in assets. now we may have as many as 11 etf issuers launching on thursday. that's why everyone is watching the space. it is a momentous event and everyone is waiting to see what happens. we think it will still launch on thursday and we expect the u.s.

during its hours will approve this etf. kriti: a big piece of this story to use the same phrasing, is who gets a bigger chunk of the pie when you have so many people pushing access to this type of product? talk to us about where fees fall in all of that. >> what had been interesting this week as we have seen a fee war. because there is potentially 11 etf issuers launching on the same day, we have seen six issuers drop their fees to zero. we have never seen this happen before. because there is so much hype, people are willing to get momentum and build assets in it for free. historically, when we look at etf's, fee compression is something that happens, when an etf gets to a certain size. six etf issuers are starting from zero. we have had the likes of bitwise, fidelity, wisdomtree,

invesco and valkyrie saying they are willing to charge free for the first six months. what's most interesting as we have seen blackrock participate in this fee waiver. they lowered from 30 basis points to 20 men the first 12 months, or until they get $5 billion. blackrock may start with the most assets on day one. they may already have $2 billion in assets. this is a historic moment because blackrock has never participated in fee waivers. this makes it interesting for all the investors because if you have 11 etf issuers, how will you know which one to pick because ultimately they track the same underlying, which is spot bitcoin. it will come down to marketing, brand awareness, and who are you partnered with. in the u.s., this fund advisory business is a $1 trillion market. if a lot of these etf's get on

these platforms, there is a lot of money potentially allocated into this. people are looking at is not just, a retail a, but institutional. that's why blackrock is targeting institutional clients. crypto is a hot area right now. bitcoin last year was the best performing class with 150%. so there is a lot of hype. with this hack of the sec, it may get even more people interested into it, and ultimately, it is a volatile asset class trade you have had exchange hacks and deplatforms being hacked. this goes in line with the hype and this will be one of the most talked about etf launches globally because there is so many participants. kriti: a big question of how much of a tailwind this provides to bitcoin prices. if you apply the same logic of etf's being used as this vehicle

that allows pension funds to be invested in the broader stock market, you have a massive move ahead of bitcoin if it functions the same way that the stock market etf's have. we are thrilled to have urinalysis this morning and look forward to more as we get these decisions. you can get the full around in today's edition of debris. if you are a terminal subscriber, type in dayb on your terminal. your top story is what rebecca was talking about, this false post from the sec social media talking about what the ripple effects will be to the actual bitcoin pricing, and what the appetite looks like. we will have news from wall street. african countries set to dominate the top 10 economic growth spots in 2024. more on that story from the imf next. this is bloomberg. ♪

kriti: welcome back to "daybreak: europe". u.s. secretary of state antony blinken says israel must stop undercutting palestinian governance and rain in settler violence in some of his most direct criticism of netanyahu since the start of the war on hamas. israel has largely ignored calls to scale back its campaign in gaza, and is pushing ahead with its plan to target the leaders of the organization. >> we continue to stand with israel in ensuring that october 7 can never happen again. we believe the submission against israel to the international court of justice distracts the world from all of these important efforts. moreover the charge of genocide is meritless. kriti: u.s. secretary of state antony blinken speaking from his tour in the middle east.

u.k. foreign secretary david cameron says he is worried that israel may have broken international law in gaza. the foreign secretary said he regularly consults government lawyers over incident in the war, but refused to say whether israel acted illegally. >> i'm worried that israel has taken action that might be a breach of international law because this particular premises has been bombed. of course i'm worried about that, that's why i consult the foreign office lawyers when giving advice about arms exports. if you put it that way, i'm happy to say yes, of course, every day i look at what's happened and ask questions about is this in line with international law? of course i do that. kriti: u.k. foreign secretary david cameron speaking about the u.k.'s take on how the complexities of the israeli story are unfolding in europe.

the u.s. central command saying houthis launched a complex attack in the southern red sea january 9 towards international shipping lanes. there were no injuries or damage reported from the strikes, which occurred where dozens of merchant vessels were traveling. u.s. and u.k. forces shot down 18 attack uav's as well as an anti-ship ballistic missile. the imf says sub sahara's growth prospects are brightening in 2024. it sees countries in the region filling six of the top 10 spots in the world this year. covering this story is jennifer zabasajja from johannesburg. walk us through where the growth is coming from. >> just to start, the significance is that the imf says global economic growth is important to factor in africa. when we think about regional growth here, the imf is saying it is due to a number of factors.

in particular, they talk about following global inflation, stabilizing public finances on the continent. we have seen nations, which we are looking at on your screen, diversifying their economies mother that is energy or the agricultural sectors. that has led the imf to suggest regional growth is improving moderately to 4% from 3.3% in 2023. that is making a difference for sub-saharan africa. we can't negate the fact that there are still internal and external challenges. there is poverty and unemployment and debt distress. something we talk about a lot of times on this show. a number of nations are dealing with debt issues and still have not been able to tap international markets to fill their gaps. this is a bright spot and something to highlight but we have to acknowledge the challenges that remain. kriti: talking about the

economic heavyweights of the continent, south africa and nigeria, where do they stand in this? >> this is key to any growth turnaround story for the region. south africa in and of itself accounts for 19.5 percent of the sub-saharan african economy. they are important, they are really the heavyweight. it is important to pay attention to smaller countries but south africa and nigeria last year the imf told us were bringing a drag on the rest of the economy. but on the bright side, we are seeing improvement. south africa, in particular has been dealing with power outages known as load shedding which has been a challenge on productivity affecting the economy here. the imf is saying there has been progress and we may not see a short-term, but long-term, they are hopeful. nigeria, president bola tinubu since he was inaugurated last year, has made a number of

reforms in particular fuel subsidies. he has tried to tackle that naira issues. we are still not seeing a lot of progress that is needed to lift up the whole region. but these two economies are trying to make incremental steps for the long-term to see the turnaround in sub-saharan africa. kriti: does that attract more investors at a time when it feels like risk appetite is increasing? jennifer, thank you for your reporting this morning. later today, we will speak to the south africa ceo of naspers, the biggest company in africa by market value. coming up at 9:40 a.m. london time. stick with us. this is bloomberg. ♪

kriti: welcome back to "daybreak: europe", i'm kriti gupta in london. the boeing ceo says the plane maker must own up to its mistake, after a dramatic midair fuselage blowout forced the grounding of planes around the world. calhoun called an all hands meeting with employees to reinforce that safety is its top priority. >> we will approach this, number one, acknowledging our mistake. we will approach it with 100 percent and complete transparency every step of the way. we will work with the ntsb who is investigating the accident itself to find out what the cause is. we have long extremes with this group, they are as good as it gets. kriti: the boeing ceo dave calhoun reassuring his company and investors that the steps boeing will take in terms of safety of their planes. i want to stick with

heavyweights around the world because a big part of the defense sector is the concept of artificial intelligence. it's taking center stage at the consumer electronics show in las vegas. the arm ceo rene haas bowed to us about the opportunities the chip designer is seeing in that space. >> if you think about all these devices becoming smart, whether it is the smart roomba, washer and dryer, smart tv, they need a brain to learn what they do. that brain inside his arm. we were chatting where his arm inside the show floor? those four examples of a washer, dryer and television, arm is the brain that makes those go. >> the common connection between everything as ai, whether you are an automotive, consumer electronics, even a beauty and health care company. arm wants to be part of the ai story. let's start with that.

the story of the 2023 was the gpu that goes into server design, and that goes into a data center. arm is not fully in that market yet but wants to be. give us a scorecard. >> you have to step back and say what is ai? and where is ai going? ai has been with us today to some level. amazon alexa, google assistant, ring and nest camera, things that do facial recognition. that's ai and that's running on arm today. to some level, we have already been there. what has happened with the chatgpt and large language models has been this next level step up of a level of learning and ai we have not seen before. a lot of that work today is in the cloud with training. you mentioned h100, nvidia's next-generation device with grace hopper.

even in advanced workloads, you are seeing arm being used. >> what benefit does arm feel from a consumer that's willing to buy a smartphone where they can locally run a large language model or a generative ai tool? >> it is still early days in terms of what are the applications that will be killer for the smartphones. the hardware is enabled now. you have capability now that can run these ai algorithms. two areas that people really care about our latin see and privacy -- latency and privacy. if you're running chatgpt or a personal assistant, every query you enter into your smartphone will go to the cloud. people who care about their data will want those ai algorithms running locally. >> we are trying to assess what the smartphone market will look like in 2024.

it is still the mainstay of your business. it goes to a functionality level. what can we put into a smartphone, or enable a smartphone to do, that drives an upgrade cycle and brings consumer enthusiasm? >> what we have seen this last cycle which hopefully we are on the bottom of, is that the premium smartphones, the most expensive smartphones have been done very well. because people are trying to future proof technology and their purchases to make sure they last a long time before the upgrade. still early days on what these devices will do in terms of running applications, but security and latency and power efficienc hi, i'm jason. i've lost 228 pounds on golo. so when my doctor told me i needed weight loss surgery, i knew i had to make a change. golo's helped me transition to a healthier, sustainable lifestyle. i'm so surprised just how crazy my metabolism has fired up. i have a trust in golo 'cause i know it works.

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>> welcome today break europe. bitcoin web saws after the sec social media account was hacked showing a fake post that approved spot bitcoin etf's. investors awaiting the actual decision later today. muted price action in the broader markets ahead of tomorrow's u.s. inflation data. geopolitical developments driving the trade. plus, tsmc fell 8% in the month of december. revenue for the quarter actually beat. let's get a check on the markets because we have a lot of crosscurrents. what geopolitics are telling you, what the bellwethers are telling you. when you look at futures you are seeing a big pullback. read on the screen on both sides of the atlantic. euro stoxx 50 futures down 0.3%. across the atlantic, virtually unchanged. this time of day you are going

to see a major bid into u.s. you are seeing a noticeably risk off mode across europe right now. the cross asset picture as well. when you look at what the bond market is doing, round numbers matter. the 4% level on the 10 year yield virtually unchanged before -- unchanged. 4.02 is where we are. the aussie currency is what i want to draw your attention to. we have seen the dollar making moves around the world. not today. today the aussie is in control. you had decelerating good inflation data. and yet the market is still pricing in that a rate cut may not be on the agenda. perhaps market dislocation there that is worth looking at. brent crude trading at a 77 handle just shy of 78. only higher by 0.4%. that is where the risk premium is going to show up. copper stronger by 0.3%. mediocre china gauge, we like to

look at whether that is indicating strength for the global economy and not just the chinese one. i want to bring the story global and really zoom in to right here in the u.k. were voters would prefer the government prioritize spending on public services rather than tax cuts. that's according to polling which would suggest the opposition labour party has a significant advantage in key areas all ahead of a general election expected later in this year. lizzy burden is all over this story and joins me now this morning. how are the political parties reading this? lizzy: it is interesting in light of blackrock's warning that if we learn anything from the experience of liz truss in 2022, it is that markets are the guardrails on politics. anyone who wants to be the next british prime minister needs to be really careful of the bond vigilantes when they are setting out their fiscal plans. what this polling shows from the

political consultancy global counsel, which i should say is run by peter mendelson, starmer ally, used to be in tony blair's government, global counsel says it is nonpartisan. when these candidates for the next prime minister are thinking about what to prioritize within the limited fiscal space, they should put improving hospitals and schools before cutting people's taxes. which would suggest that labor is more aligned with the british public then the conservatives. and indeed this is reflected in the latest polling which shows that labor's poll lead has grown over the conservatives. starmer's team say they are not complacent and they are still fighting for every vote. kriti: bank of england governor andrew bailey do to testify for the treasury select committee about their financial stability report. are we going to get anything new? >> maybe. the last time we heard from andrew bailey was the boe

decision. since then -- well, they held rates but since then we have had this surprise that inflation has fallen. surprising all economists, it fell more than expected. you have had traders cutting their bets. ramping up bets for rate cuts in 2024. maybe we will hear broadly about where inflation and rates are headed within the context of financial stability. how people are coping with higher mortgages, where the companies are on the brink of default as they confront the peak of interest rates. maybe they will talk about the strength of the pound or weakness in the pound as interest rates start to fall. maybe they will talk about the risk of recession until then. if you think about the financial stability report, one of the key themes was the banks morning that hedge funds are building up risky bets on the u.s. treasury markets which is even more interesting in the context of the pivot party that happened after the fed decision and the way the stock and bond rally has lost a bit of steam in 2024.

kriti: lizzy burden, thank you as always for bringing that's a global audience's attention. i want to stick with europe because when we talk about german automakers, volkswagen and bmw have reported a rise in sales. last year. is that some sort of positive beacon for the broader economy or broader europe? bloomberg's oliver crook standing by in berlin with the answers. let's start with the numbers. what did we learn from vw and bmw? oliver: that's the right question. we will do the top line and get under the hood. looks like an sales rose 12% last year, that is good. bmw up 6.5%. with all these automakers what really matters is deeper. it is more bearing. the battery electric vehicle sales is what people care about looking into the future. for bmw, sales were at 74% last year. that means 15% of all the cars they sold were battery electric equals. for volkswagen they were up

-- they were at 8.3%. bmw and vw are different carmakers with who they are trying to reach. vw is trying to crack the mass-market battery electric vehicle. to do that you need to be dominant in china. how did sales do in china? vw up 2%, a little growth but not much and that is less fast than the rest of the chinese auto market is growing. bmw not much better up 4% last year in china, their weakest market in growth for both auto markets. really it is the cash cow so maybe not a great omen going into 2024. kriti: certainly a lot to digest when we talk about the regulatory changes that may be made in the sector. we thank you for bringing that to our attention this morning. other news stories from around the world, we start in france. a fresh start for emmanuel macron as france gets its

youngest ever and first openly gay prime minister. he rose to prominence as the government spokesperson and then education minister. his predecessor resigned monday following political turmoil over immigration law. macron will work with attal to name a new government. armed men broke onto the set of a public television station in ecuador during a live broadcast after the president announced a state of emergency and curfew in the violence that plagued the country. all 13 people involved were arrested and have been charged with terrorism but no one was killed in the attack. argentina is set to make a near $1 billion payment to foreign bondholders this week. the comes due as the president's government meets with imf officials in an attempt to get his aid program back on track. over the next several weeks governments from the u.s., u.k., and the euro area will start

flooding the market with bonds at a speed rarely seen before. countries along with japan will sell an estimated net to trillion dollars of new bonds to finance their 2024 spending plan. that is the topic of today's big take deep dive. for more i'm joined by mark cranfield walking us through the story. is it as simple as lower interest rates incentivizes issuance? mark: not as simple as that. certainly the people who are making the issuance will be very encouraged by the big appetite for bonds at the end of last year especially. amazing rally that we saw in november and december. certainly corporate send governments will feel a lot easier about the number of issuers they need to do. the numbers are pretty big. a lot of frontloading going on here. a lot of people want to take advantage of the very good mood in the bond market. in case there is any risk of it changing. yes on the face of it the

numbers look very large. but when people in the bond market are expecting yields to fall, expecting the federal reserve to cut rates later this year, maybe other central banks around the world, you have a big tailwind here. that's the ideal situation to do a lot of bond issuance. even though some people might say that on the headline numbers for sales -- the headline numbers themselves are staggering, you spread them out over markets and the right conditions, the global market can absorb even such a large amount. kriti: when you are talking about the absorption, the digestibility of this issuance, a lot of people would say it is still not the ideal time to hop into credit markets when perhaps the treasury market is the cleanest way to get that kind of exposure. why expose yourself to the corporate side of it when at the end of the day a lot of people are saying maybe the threat of zombie companies for example have not fully been flushed out of the global economy. mark: certainly if you want to

do the credit work, it is a lot harder. looking at governments usually it is a much cleaner way of doing that. but of course you also run risks in that area as well. for example, if we get a return of inflation, if people are wrong at inflation is not heading lower, that will hit government bonds quicker than it would in the corporate sector. the other big risk for governments, and because fiscal deficits are rising around the world, the u.s. included as one of the worst offenders, in this big take story you will see a lot about the u.s. fiscal deficit. that brings the rating agencies back into the picture. we did see last year there was a sudden change by the agency. they put the u.s. on watch negative. downgrades could follow from other agencies. that could hit investors very quickly and it is usually more painful in the government sector. it can come out of the blue so certainly government bonds may

appear to be transparent in a certain way but if the fiscal deficits continue the rating agencies may bring the party to an end. that would be painful for people in the treasury market. kriti: certainly a lot to digest. mark cranfield, we thank you for bringing us that crucial analysis this morning. coming up, we are going to do a deep dive. tsmc sales fell more than 8% in december. but it is not all bad news. we are going to break down the numbers and what they mean for the world's biggest contract chipmaker. this is bloomberg. ♪

kriti: welcome back today break europe. i'm kriti gupta. doctors for u.s. defense secretary lloyd austin say he has been treated for complications from prostate cancer surgery. the disease was first detected

early december and surgery scheduled later that month. the white house has admitted it was not aware of his condition until tuesday. the house armed services committee says it is launching a formal inquiry into his failure to disclose his hospitalization. donald trump's claim he is immune from prosecution has been met with skepticism by u.s. appeals court panel at a packed hearing in washington, judges peppered trump's lawyer with questions testing how far such a theory could go. one judge asked if a president could order the killing of a political rival and get away with it simply because it is an official act. china upgraded diplomatic ties with a record number of countries last year in a bid to rally support from the global south and counter the united states. bloomberg analysis shows beijing elevated the way it described ties with 17 countries and territories including syria, ethiopia, and venezuela. that is the highest number since xi jinping took power over a decade ago. china's top envoy to the u.s.

says beijing has no room for compromise when it comes to taiwan independence. taiwan votes for its next president this saturday. china has previously called taiwan's ruling party candidate a troublemaker whose views risk sparking conflict. sticking with that conflict, at the core of it, the world largest contract chipmaker seeing sales fall over 8% in december on an annual basis. for the fourth quarter, overall revenue beat estimates, citing demand for ai processors. for more am joined by tom mackenzie. that seems to be the general buzz word for all of technology. you say ai and everything shoots up. stock price and sales as well. dive into these numbers. a mixed picture. tom: it is indeed. you combine the sales with november and october and overall you are looking at a $20 billion u.s. quarter for tsmc which is

roughly in line with the same quarter this time last year, which was a blowout quarter for tsmc. also slightly above estimates. and you are right, there are different segments to the semiconductor sector in which tsmc is involved, in terms of chips they are manufacturing for their clients. part of it is the memory chips. that is where the sluggishness comes through. chips that going to smartphones and laptops. the other side as you can say the demand for ai processors, and that has held up and helped tsmc to come through with results again slightly higher than estimates. it is worth noting that still if you look back at 2023, revenues did decline over 4% for tsmc. precisely because there has been this inventory buildup of those memory chips. clients are still working through them. executive saying they think they will profit from that in the summer. the demand for ai chips is starting to lift prospects.

kriti: this is going to reverse the damage, the glut we have been talking about for two years now. tom: you could get arguably a sweet spot for tsmc in 2024 but the big question is, if the demand for ai holds up, many think that will do because you are seeing the buildout of data centers, it is questionable as to whether or not they can meet the demand at this point that is coming through from some of these companies that are having to build out these data centers on which the ai models are trained. as you see corporations incorporate and implement ai processes and applications, that demand is excited to continue to increase. the ai component looks strong to many analysts. the key question is where are we in the drawdown of inventories and will we see pickup in terms of the smartphone and laptop demand? the memory sector which is more like a commoditized part of the semiconductor space. there's concern about one of their biggest suppliers, apple has been downgraded a number of times over the last couple weeks.

particularly concerns about apples prospects in china. that remains a question even as there seems to be consensus that demand for ai will remain strong and that's going to help tsmc in 2024. kriti: there is a geopolitical story we have to pay attention to and this was a lot of the concern when it came to joe biden and his inflation reduction act. or even the chips act. bringing domestic production back into the united states because they did not want the reliance on not just taiwan but tsmc. to what extent is the need to do that more heightened in 2024? tom: the center for strategic and international studies has put out detail on this pointing out the magnificent seven, with which we were so except last -- so obsessed last year, apple and nvidia, they depend on taiwan for 90% of their chips. absolutely there is a priority, a focus in washington and other capitals around the world in terms of offsetting that

reliance on taiwan given the geopolitical risks. that is why you have tsmc committed to bringing out -- building out facilities in the u.s., dresden, and japan as well. that is something policymakers want to see. it is a big capex spend for tsmc as they face up to the sluggish growth in terms of the smartphone and laptop part of the cycle. they committed to spend $30 billion last year. we will see this year. there is the challenge when it comes to spending in a country like the u.s. around attracting talent, around getting approval. sign offs at the local district level as well. that remains a challenge. have to find the money and the talent. priorities in western capitals, they have less reliance on taiwan. kriti: it is interesting you brought up u.s. dependency on taiwan because it goes the other way when you look at china in particular. you look at the trade taiwan has

done with china, they have tried to restricted as much as they can -- restrict it as much as they can. what is the tsmc effect on china and vice versa? tom: tsmc is a crucial component for china in terms of producing chips that go into that jurisdiction as well. there are restrictions being put in place by the u.s., the netherlands, japan, on the most sophisticated chips. but most chips that go into vehicles, that go into smartphones, are of the lower end that china can still get access to. tsmc is a crucial component for china as well. china is building up their own capacity in these quote unquote legacy chips. china has been building out so much there is some concern, this has been voiced in the u.s. by think tanks, that there should be restrictions put on legacy chips so the less sophisticated chips because of the concern china could flood the market with those because they've been so good at producing them. many of those chips still have that potential military application as well. we know the pentagon is so

concerned. as we lead up to an important election year in the u.s. where china will once again become front and center, you can expect the rhetoric but also the policy around further restrictions when it comes to chips on china to become front and center once again. kriti: final question on the election front. the taiwanese presidential election is this weekend. any readthrough into the corporate pace? tom: the kmt which has a more constructive view on beijing is willing to have a closer relationship with beijing. if they were to win that election, arguably the geopolitical temperature comes down. arguably the risks around dependence, because it is you and me as well as apple and qualcomm at intel, our dependence on tsmc and the other semiconductor makers comes down. the dpp, the incumbents, they have a more frictional relationship with beijing.

arguably that heightens the geopolitical risk. that's the consequence of this election, hugely important not just for the people of taiwan but for all of us. kriti: a tense time in the corporate space and the electoral space as well. tom mackenzie walking us through every facet. he does a little of everything and we could not be more grateful. plenty more ahead. stick with us. this is bloomberg. ♪

kriti: welcome back today break europe. two charts on your radar that i think are going to drive a lot of today's trade, and a lot of it starts at the core of bitcoin. an asset we do not talk about a lot. we talk about the macro landscape. it has had a lot of volatility. we were asleep when this all

happened. this idea of where you have the bitcoin etf approval decision do today in the u.s. hours, now apparently it was -- the sec account yesterday was hacked to show that that approval came early. it was an impersonation. but take a look at what it did to the market pricing. you saw volatility shaped the market a little bit before it stabilized. perhaps a precursor of what we might see today if we do indeed get the approval, which by the way analysts are saying is a no-brainer. if you get etf approval, does it create tailwind the way etf's did for the stock market when it comes to the pension investment for example? that really sends the bitcoin price to the moon for lack of a better term. that's going to be one thing to watch, the other is the european debt story. you are coming off record issuance from a lot of these european companies and corporate's. a lot of it has to do with the expectation of lower rates but some of this has to do with

simply the need for cash. does this actually sustained going in 2024? is this at the end of the day a healthy sign? plenty of interviews ahead you should pay attention to. we will be hearing from the world economic forum's managing director at 9:30 a.m. london time. we will speak to the ceo of the biggest company in africa by market volume. stick with us. next is markets today. this is bloomberg. ♪

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