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kriti: good morning and welcome to "daybreak: europe." japanese stocks leading the asian rally again all ahead of today's u.s. inflation report. bitcoin etf's finally getting the green light a decade after the first proposal to the u.s. securities exchange commission, however warning that approval is not endorsement of cryptocurrency. the u.s. pushes ukraine to sharpen his plan for fighting russia, all the italian prime minister seeks to unlock eu aid for the war-torn country. a lot to digest when we are talking about crosscurrents around the world. i want to get a check on markets. euro stoxx 50 futures outperforming again. higher by 0.6%. the futures contracts in 2024 already getting a massive boost. did the santa rally get delayed for the european session?

the ftse 100 moves not bad either. higher by 0.3%. but the underperformance is in s&p futures contract. at this time of day we usually don't see a bid, today a different story. 4828 on those contracts. is there some sort of excitement, or premonition that the cpi print out of the united states will be a bigger deceleration than expected? perhaps optimism getting back into the market narrative. nasdaq 100 futures higher 0.3%. the global rally in equities is no settable with that risk on sentiment. we are still talking about not just cpi data, but what that ultimately means for federal reserve pricing. by extension, pricing for a lot of other central banks around the world. 4.01 on the 10-year yield, some on the surface not as much reaction, but keep an eye on that data about 8:30 a.m. new york time. that is when you will see a lot of rate cuts, perhaps that pricing move around. for now you are seeing some broad dollar weakness, again,

largely a function of the expectation that inflation is coming down and with that, so our interest rates. euro-dollar benefiting from that , 1.09 this morning, 1.27 on cable. brent crude getting a boost off of dollar weakness in the absence of any real geopolitical movers. $77 handle on brent crude, higher zero point 6%. that is your cross assets picture. quick check on asian markets. avril hong is standing by in singapore. avril: we are seeing asian stocks running higher today, a gauge of them rising by the most in almost a month. the chart is being led by stocks in japan. the topix and nikkei building on gains earlier in the wake where we saw them muting multi-decade highs, helped along by weakness in the japanese currency, though it has been steadying away from the one 45 handle it reach

in the past session paid the stock rally is being fueled by the idea that corporate governance reforms will unlock shareholder value. let's flip the board and look at this chart, you might then ask where do we go from here? if we look at the topix's relative strength index, it is in overbought conditions. the last time this signal flashed was september last year. after that, we saw a out of selling until the early days of october. something to keep in mind even as we see the stockmarket rally in japan. let's take a look at china, as the hang seng is also starting today. helped along by the gains in chinese tech. if this holds up, and it likely will, this could be the first positive close for the hong kong benchmark this year. we are seeing the offshore and onshore yuan both recovering on the back of the pboc's stronger than estimated fixing. since november. the pboc has been coming through

with strong daily fixing's in the past seven months to support the yuan. we are also watching the rate on medium-term loans. if the pboc eases, that could prompt further yuan weakness. i want to show you the picture in korea, after the bank of korea left its key rate unchanged, but came through with perhaps a less hawkish messaging. we're seeing the korean won appreciating. looks like risk sentiment among asia emfx is improving. we are seeing the kospi also improving in positive territory ahead of this u.s. cpi print. lizzy: avril hong walking us through the asian market trade. as she actually talked about and ended on what that excitement is ahead of that u.s. cpi report, let's dive into the details. the expectation on a month over month basis is inflation is still rising, but by 0.2% margin . what's behind that? jill disis in hong kong is on

our eco-government team. talk to us about that dynamic. when talking about the cpi deceleration, bloomberg economics retitling their entire analysis, saying the last mile is always the hardest. where is deceleration coming from? jill: i think what you are looking at is overall goods prices have stopped rising at this incredible pace. you are seeing the price for goods such as cars actually falling. that's one thing to keep in mind when you look at that core inflation gauge. that's the one stripping out those volatile food and energy costs. at this point, we're expecting that gate for the entire year of 2023 to actually have moderated to the slowest pace since early in 2021. all of that points to really positive development, adding to optimism that this disinflation trend will continue into 2024. that being said, we really have

to look at some stickier gauges, you look at services, for example that's been pretty sticky. even as we're seeing some cooling-off elsewhere in the cpi print. you also want to look at the shelter gauge, that's one of the largest, if not the largest component for the overall cpi that has not been receding as other sub indexes. all of that is to come today, we will have plenty of time to dissect it more, but it shows you there is a lot of different elements that people are looking at. kriti: do your point, you are seeing the goods inflation completely eliminated. we showed a chart that showed that was more of a services story. when talking about services inflation, a lot of it is wage driven. that is something a lot of the economic houses around wall street have been talking about. that wage growth is still an issue at its core. walk us through that angle. jill: at this point, wage growth

continues to be sticky. you are looking at that especially in terms of how that is impacting the overall labor market. when you look at key indicators feeding into the fed's calculus for how they are probing their -- plotting their rate trajectory, how we are taking the pulse of the economy, you are looking at ongoing resilience of the labor market as a key component of that. we have seen some other gauges recently -- we're seeing people maybe pull back from hiring a little bit. maybe there is more of a story to tell there, but as you said, something we need to keep a close eye on as we get into the coming weeks. kriti: how does it filter out into the pricing that could turnaround and have major ripple effects? do we continue to see that going into that u.s. data. jill disis bringing that to our attention. i want to go to another of our

top stories in the united states. reg you leaders have finally given long-awaited approval to exchange traded funds investing directly in bitcoin. the move which pushed bitcoin briefly about $47,000 has been heralded as a landmark event for the digital asset sector. authorized funds from industry heavyweights including blackrock, invesco and fidelity all set to begin trading today. atf analyst rebecca sin joining us now for more this morning. pleasure to have you on the program. this is a defining moment in financial history. i'm thrilled to say we are all a part of it. there are 11 bitcoin etf's that have been approved by the sec. grayscale is the one that has been leading the fight. blackrock was the one that surprise the market and the sec by not only being the largest provider of etf's the world, but simply that they wanted to put their backing and have that exposure as well. outside of those two, what differentiates here?

[no audio] kriti: looks like we have gotten loss of rebecca. don't worry, she will join us later to give us more analysis. i want to answer for her, if i can. essentially when we are talking about these changes, this is a important piece of the equation because this is financial market history.when we are talking about etf's, talking about grayscale in particular, one of the big concerns the sec had was just how much does that masses actually want that exposure, or can actually handle the volatility that comes with that exposure? i want to bring back in rebecca, our etf analyist. walk us through the differentiating factors die have laid out a couple, but what have you your eye on in terms of what makes these products succeed or fail? >> what is really important for us today is ultimately, how much assets under management can we see, and what trading volume will go through?

one of the things you said earlier was that grayscale, ultimately, they have the largest assets under management because they are converting their grayscale bitcoin trust at $29 billion in assets. we could see lots of trading volume if -- in this etf, especially since a lot of it may come from outflows. in total, as much as 33 billion dollars in assets under management today. we have grayscale who has $29 billion, blackrock who has $2 billion, and amongst the other etf issuers an additional $2 billion in assets. what differentiates them is how much assets under management they have, what marketing they are doing, and fees. this week we have seen fee compression. six issuers are offering the etf for free for a certain time, or until they reach a certain amount of assets. it will come down to brand, marketing, fees and trading volume. people will look at the trade volume and what the spreads are. kriti: speaking of that trading

volume, off the headlines themselves, you saw bitcoin go back to $47,000. that wasn't as big of a move as i thought on the expectation that more people would want to get ahead of the masses piling of this product. how much flow can we expect when the etf's actually make their trading debut? >> in terms of flows, we will see a lot, but the question is ultimately how much? a lot of the flows today on the first day of trading may come from grayscale. grayscale, at one point, was trading at a discount of 42%. people may see this as a time to redeem. ultimately, grayscale did cap their redemption. i picked trading volume to hit a record amount. one of the challenges is because we have 11 etf issuers watching the exact same product, but spreads and trading volume that goes across 11 etf's will be different, and that may lead to the success of some etf's versus

the others. what often happens is on the launch date, the etf issuer may arrange seed capital. blackrock may already have $2 billion in assets lined up. you could see that go with her on the first day of trading. therefore, when you look after the first day, blackrock may have significantly more flows because they have prearranged trade. in assets under management we could see 4 billion go through, but what is unknown is how much will come from grayscale. the market is expecting grayscale to see outflows, but they could surprise people and get some inflows. but they are priced at the most expensive. grayscale is currently priced at 1.5%, so of the 11 etf's, they are the most expensive. the reason they have kept fees so high is because they had the scale factor, they had the $29 billion in assets under management. that is why most are expecting grayscale to see outflows. we could see people sell grayscale etf, then buy some other ones where there fees are

zero. you can see some buying and selling across the etf's because of the different fees. kriti: as rebecca pointed out, we have been watching that grayscale discount in their net asset value for quite some time. it is about to just turn positive. we thank you so much for your analysis this morning. we will be watching that trading debut very closely in the u.s. session. the u.s. markets open at 9:30. when you have that debut, it usually ends up being a few hours into the session, as opposed to to write on the market opens. we are getting comments out of the ecb speakers. that's going to be crucial as we get some inflation reports around the world coming up at 8:30 a.m. u.k. time. the main event today is going to be the u.s. cpi. no surprise there. talking about the inflation readthrough into the rest of the world happening at 8:30 a.m. new york time, which is 1:30 p.m. u.k. time. and jobless claims coming in at

the exact same time, giving perhaps more insight on that labor market story. coming up, the latest in the g odwin saga as the nigerian government dissolves the boards and management of three of their leaders. we look at the president's attempted cleanup exercise in his country's banking sector. this is bloomberg. ♪

kriti: welcome back to "daybreak: europe" i'm kriti gupta in london. the audit states is weighing options for retaliation against escalating attacks in the red sea by houthi militants. the iran-backed group launched its largest attack to date on ships on tuesday. the white house has considered military strikes on yemen, despite the risk of regional

escalation. >> if these attacks continue, as they did yesterday, there will be consequences. again, this represents a player threat to the interests of countries around the world, and it's important that the international community come together and respond to them. kriti: u.s. secretary of state antony blinken speaking on his tour through a lot of the gulf countries. on the middle east to africa, in particular. somali ministers as militant group al-shabaab has killed one person and is holding five others hostage, after a united nations helicopter was forced to land in the region. the u.n. charter was carrying soldiers and medics on an evacuation mission when mechanical failure caused an emergency landing into al-shabaab territory. nigeria central bank sacked the boards and management of three of the countries lenders. covering the story is ondiro oganga live in rwanda for us.

talk us through this latest move of the nigerian banking industry. >> the former governor, godwin emefiele, is being accused of acquiring union bank. one of the banks where there board and management was dissolved. that he acquired it at a majorly discounted rate. the office of special prosecutor is saying godwin acquired this bank through proxies, and he did this through ill-gotten wealth, and there is no proof of payment that he actually bought this bank. despite putting forward these allegations, the office of the prosecutor is yet to press any charges against godwin. he has defended himself and said these allegations are baseless. he is innocent until proven guilty. kriti: in terms of these developments, what kind of indication is this of that cleanup exercise we have been monitoring so closely? >> is giving indication that the government is trying to clean up the banking and finance sector.

they are trying to crack down rogue banking practitioners, also rogue lenders. if we go back to the weekend when the economic and financial crimes unit visited one of the biggest companies, not just in nigeria, but in africa, on allegations of round tripping, buying dollars from the central bank of nigeria at a certain rate and converting it on the black market, making profits of 70%. the government also made a point of firing the former governor and appointing cardozo. this is some of the changes they are trying to make in the finance sector, to sanitize it, but send a message to investors that this government is trying to ensure that structures are working and when they invest in nigeria everything works in their favor. kriti: something we will monitor closely as the situation develops. ondiro oganga in kigali ringing us that analysis.

plenty more ahead, stick with us. this is bloomberg. ♪

kriti: oh come back to "daybreak: europe" i'm kriti gupta in london. cutting-edge tech from flying taxis to next generation ai chips, down to smart toilets are among the hottest stuff out of this year's ces, the consumer electronics show in las vegas. shery ahn takes us to the show floor of the world's biggest consumer tech show. >> is a big week of announcements here at ces. artificial intelligence took center stage, but the other buzzword, clean technologies. we had the likes of vietnamese ev maker vinfast debuting a prototype of their first electric pickup truck. this exhibit futures ev batteries that are fully

electric and able to recharge in less than 20 minutes. it's true that the ev sector has been reeling from weak global demand, not to mention geopolitical tensions. china has imposed export restrictions when it comes to ingredients for ev batteries. still, the ccl and president say they are optimistic of their long-term plans through the end of the decade. sk group is one of south korea's largest conglomerates. this year at ces they are showcasing not only artificial intelligence technologies, but also clean tech to create what they call a smarter and greener world. hyundai in the meantime are wanting to change the rules of the construction sector. their ceo at their keynote speech talked about sustainable growth for the top shipbuilder. kriti: shery ahn, on the floor

of the consumer electronics show in las vegas. she always gets the best assignments. very cool technology coming out of their, of course. in every single sector, the idea that artificial intelligence is making a massive debut in some consumer products is where i want to go next. openai, the brainchild for lack of a better term, in talks with some major news organizations, cnn, fox and time magazine all to license their content. part of an effort to secure access to news stories and make the ai chatbot more accurate and relevant. the development comes as openai faces several lawsuits alleging copyright infringement. it also follows a lawsuit the new york times placed against microsoft and openai -- microsoft is the majority stakeholder in openai at the moment -- that said this was copyright infringement. openai really tackling this head-on with some other media organizations they are using.

luxury goods maker lvmh is in discussions with social media after tiktok on a plan to limit the sale of counterfeit products on the platform. tiktok is aiming for a 17.5 billion dollar e-commerce business this year. a deal that could be a major move to improve the reputation of tiktok shop, among brands and shoppers in key new markets. this could catch the eye of a lot of u.s. regulatory authorities, given that tiktok has been between the crosshairs of authorities -- how much data is being provided to the owners of tech talk u.s. shopping trends? given it is the largest economy in the world. something we are watching closely, as is the trading debut of the bitcoin etf. it has been a wild 24 hours for this approval process. there is a chart i want to put on your radar. this is grayscale's etf discount narrowing further. some are a speck to turn positive. for our audience who has not

been following closely, the idea is grayscale has been fighting for this kind of approval process. they were originally denied this etf product which basically democratize his access to cryptocurrencies to the masses, making it far easier to even get a share of it. you can get access through a robinhood or brokerage account, for your advisor, whatever that may be. grayscale had been fighting for that. for that reason, one of the concerns was whether or not the underlying asset is worth more or less than what the etf is valued. that's what this discount shows. but as you get closer to the approval process, it creates more calm in this discount to the net asset value, the part that the cameraman is kindly zooming into us for now. it is almost in positive territory after years of being discounted for so long. here is why this matters, grayscale is just one of 11 different offerings that has

been approved by the sec, that is debuting as a bitcoin etf product. because grayscale has been at the core of this fight, the expectation is in terms of flows, they will get perhaps the biggest trading flow. even though their fees are substantially higher than some of their peers. as a response, blackrock for example, the world powerhouse in etf's, has been decreasing their fees. how does that shake out? we will bring it to you live. as we are also with the u.s. cpi report. we will dive into those numbers due later today and preview what to expect. stick with us. this is bloomberg. ♪ (aidyl) hi, i'm aidyl, and i lost 90 pounds on golo. i struggled with weight loss and weight gain my entire life. with all the yo-yo dieting i did in the past, i would lose 20, 30, 50 pounds just to gain them over and over again. thanks to golo, i've been able to steadily go down

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kriti: let's get to the top stories that set your agenda. japanese stocks leading the asian rally ahead of today's u.s. inflation report. bitcoin etf's finally getting the green light a decade after the first proposal. the sec has warned the approval is not an endorsement of the cryptocurrency. the u.s. pushes ukraine to sharpen its plan for fighting russia while the italian prime minister seeks to unlock eu aid for the war-torn country. there's a lot going on. moving parts in geopolitics and markets as well. getting a check on the green on the screen, u.s. inflation report could be a game changer. the estimate is for 0.2 percent increase month over month. it feels like the markets are already saying this is going to be a positive report not just for the u.s., but for the world. euro stoxx 50 futures higher by

0.5%. you can already tell there is more to respond to this rally. s&p futures and nasdaq 100 futures which at this time of day don't usually get a bid from european and asian traders, even they are soaring. s&p futures 4829 on contracts higher by 0.2%. quick check on the cross asset story, a big ripple effect is going to be if this is a better-than-expected cpi report, doesn't that change the five cuts that are already priced into the market at the moment? the answer is no. 4% is around number 10 year yield seems to be sticking to. it has not broken above. technicals perhaps coming into play but after the data we get, we could see a change on the surface level. dollar weakness is a different story. even though the bond market is not doing a lot, the fx market is. dollar weakness feeding into

euro-dollar. 127 on cable benefiting from the tailwind you are going to see from weakness in the united states. seeing weakness in the commodity space as well, brent crude at a 77 handle higher by 0.8%. in the context of the moves we've seen in the past few weeks, not as big off the geopolitics. the main story is going to come back to u.s. cpi. the expectation for 0.2% month over month but the question is where does the deceleration actually come from? what does that mean for the pricing of the federal reserve? john williams has something to say about that. take a listen. >> my base case is the current restrictive monetary policy will continue to restore balance and bring inflation back to our 2% longer run goal. i expect we will need to maintain restrictive policy for some time to fully achieve our goals. kriti: john williams is not in

the camp of adding more rate cuts to the equation. jill deese us -- jill disis joining us for more. john williams is one in a chorus of voices saying a million different things. janet yellen famously said as inflation comes down, interest rates have to come down to match it. to be fair she is now a member of the biden administration so rate cuts benefit her and the administration from a political standpoint going into an election. talk to us a little bit about where everyone else in the fomc stands on this. is john williams alone? jill: he is not. if you look at fed speak from this week we saw atlanta fed president bostick and fed president michelle bowman give similar remarks in this idea, bostick said he is comfortable with the fed's restrictive stance right now. you and i remember just last month, after the fomc meeting we

saw markets really start to price in big bets on the idea that we could see a cut by march. i am not sure we are there yet. the fed, certainly several of these fomc members have pushed back against the idea that could come extremely soon. we have to look at what else is going on with the latest cpi print. whether we are getting more rapid cooling off. there is reason to believe that even though we are seeing a drop off in goods prices. there are sticky elements we have to pay attention to. services, shelter. it is too soon to call this idea that we could get a cut by march, but yes, basically, to answer your question, they're preserving a lot of room to push that off. kriti: i am almost curious every time we look at the fed minutes to see where that kind of dispersion really is still alive.

the hawks not letting go of this idea that perhaps we may need some sort of actual dovish pivot rather than one the markets are interpreting. jay powell seems to be leaning further away from that. i'm still waiting for a bigger division to really be seen. what does that mean in terms of the readthrough into the rest of the world? is this when we start to see a division between the u.s. and some of these other economies? jill: that is possible. we have to look to see whether there is a consolidation once we get to the fed meeting at the end of this month. whether we start to see a clear trajectory toward when we might actually expect a put. you mentioned the rest of the world. it is a difficult time when no matter where you are, if you are the ecb you are dealing with some similar but obviously somewhat different issues than what the fed is dealing with. maybe you start to see a bit of a division or diversions as you get into the rest of this year. we are very early in 2024.

we have to see what ends up happening. it does not change the case that all eyes are on when the first fed cut is going to end up happening this year. kriti: and do you start to see the rest of them follow? bloomberg's jill disis, thank you. i want to build on what jill was talking about, potential diversions between the u.s. and other central banks. we go to the ecb. the spanish central bank's chief saying the euro area probably failed to grow in the final three months of last year. popple hernandez saying all -- pablo hernandez saying the euro area stagnated but he was more upbeat than his vice president who said the bloc is likely to be in a shallow recession. the governor of the bank of england meanwhile has played down concerns about the effect of higher interest rates on household as well as businesses. andrew bailey was giving evidence to parliament's

treasury committee on the bank's financial stability report >> we have not seen a pronounced increase in employment. that is relevant because historically one of the drivers, if you analyze it statistically, one of the drivers of loan losses particularly in the mortgage market is unemployment. the second one is associated with, last year we saw an increase, 2% increase in household real incomes. both of those things support overall conditions and financial stability. kriti: joining us for more analysis, lizzy burden. hanging on andrew bailey's every word. what stood out to you? lizzie: as always. it is an interesting moment for financial stability given the global picture as you were suggesting -- discussing with jill, if andrew bailey is not willing to concede it is coming, the pivot from hikes to cuts is

somewhere on the way for the bank of england as well. what you just heard from bailey is a sample of his optimism that rates being at this peak is not going to trigger a huge spike in unemployment and therefore a huge spike in mortgage defaults. actually the consumer is withstanding it well and therefore this is not an unwanted impact on financial stability via consumers. what the bank of england did say was concerning was that as rates start to fall you might see a wave of investor exuberance as they put it. you have seen that in the u.s. in terms of the santa rally. as soon jay powell indicated there would be a pivot party. that is what they are looking out for in the u.k.. even though the focus yesterday was financial stability, there were hints about monetary policy. since the bank of england's last decision with had all this disruption in the red sea. flagging this could be a risk for inflation. kriti: it is interesting he's bringing up asset price

inflation when jay powell has taken that out of his rhetoric. building to your point about the diversions between the united states and the rest of the world. let's connect the monetary policy with the corporate policy as well. we are talking about inflation. how does that show up in the corporate space? lizzy: food inflation has been coming down. we saw it in the official cpi numbers. the british retail consortium data you and i have been coming through over the days. look. the supermarket to offer discounts, algae -- a -- aldi and lidl are benefiting from the cost-of-living crisis. tesco is going to have a robust finish to the year. the backdrop is this cost-of-living crisis. we saw the sainsbury's resorts yesterday. looks like it's going to be a strong one for tesco today. kriti: we will see if they are aligned. lizzy burden all over that

story. she will be bringing the results at 7:00 u.k. time. we go to the geopolitics, the united states expected to: ukraine to sharpen its battle plan -- expected to call on ukraine to sharpen its battle plan against russia. jake sullivan likely to raise the issue with president volodymyr zelenskyy. bill has been watching this closely. what does a plan look like for washington? bill: well i think there is some concern in washington, first of all that president zelenskyy and his top army chief, maybe do not see i to i on exactly what the strategy should be as the winter proceeds and you start to come towards the spring when heavier fighting would be expected to resume. the bigger political backdrop at least in the united states is there is some patience running out in the congress over aid for

ukraine. we saw president biden's request for about $60 billion in aid for the coming year was held up for months. there is still no agreement on that. it is in limbo. the u.s. is looking at potential budget issues. the administration wants to know what ukraine's plan is going forward to have a breakthrough. a lot of republicans would like to know, what would prompt or what would push ukraine to agree to talks? that is not something the administration is publicly calling for but they want to see a clear plan as winter proceeds and you head into what would be expected to be a heavier spring fighting. kriti: and of course as you talk about funding that has stuck in congress, is the eu responsible for picking up slack from the g10? which brings us to hungary, which had been blocking a lot of eu aid for a very long time now coming under pressure to reverse course.

walk us through that story. >> yes. so italy's giorgia meloni is working to try to persuade hungary's viktor orban to lift his block on effectively about 50 billion euros in financial aid to ukraine. that has also been something of a roadblock for ukraine over the past several months combined with the u.s., you are talking about really more than $100 million in -- $100 billion in aid ukraine would like to have to fund its war effort that it is going without for the time being. that having a lot of implications on short-term and long-term planning for the economy. giorgia meloni working with viktor orban to see if there is some incentive she could provide in terms of having or bonds party join -- having viktor orban's party join the far right european coalition ahead of the european elections this summer. it is an effort west or leaders have been trying for months to

make progress on and have so far failed. kriti: it is an interesting dynamic between italy, hungary, the united states even, all to deal with a war that is entering i believe its third year in 2024. bill faries, thank you for walking us through that story. other top stories from around the world, the white house is backing legislation that would let it see some of $300 billion in frozen russian assets to pay for the reconstruction of ukraine. bill was just talking about funding that was indeed stuck. president biden's support for the move comes with republicans in congress blocking more than $60 million in that funding, concerned the u.s. is carrying too much financial burden as kyiv's counteroffensive stalls. joe biden intends to dispatch a bipartisan delegation of former officials to taiwan after saturday's presidential election. the vote will be closely watched

in washington with the outcome likely to set the tone for relations and u.s. china ties for years to come. the u.s. political space, we have learned former new jersey governor chris christie is ending his presidential campaign. he was the most anti-donald trump candidate in the republican race. the exit could be a potential boost to the candidacies of former u.n. ambassador nikki haley as well as florida governor ron desantis. oath have emerged as the main alternatives to front-runner president trump. in the corporate space morgan stanley has elevated 155 employees to managing director, a smaller number of promotions then the firm's top rank last year. women account for 37% of the promotions. that increases the overall share of female managing directors at the bank to 26%. coming up on the program, something we are all dying to dig into. bitcoin pulling back from earlier highs. regulators have approved the

etf's investing directly into the token. we are going to discuss what approval means for the future of crypto. this is bloomberg. ♪

kriti: welcome back to daybreak europe. i'm kriti gupta in london. there's a lot going on in the bitcoin space. the last 48 hours have been a whirlwind when you look at the crypto industry because this could be a moment for the financial history books especially if we get the approval process. now that the sec has signed off on bitcoin etf's, begrudgingly saying they do not endorse cryptocurrency, still worried about the volatility it is going to bring in, they were backed into a corner when you look at the court system in terms of development of this product. now it is all about the traders, the masses. what does the demand look like

an does this really change the way you invest in what is seen as a very volatile currency? for more i'm joined by bloomberg's crypto reporter siddhartha shukla. talk to us about the expectation of bitcoin price. you have major bulls on wall street saying this is the moment bitcoin skyrockets to 100,000 or higher. how do we get there? siddhartha: it has been an historic day which took more than a decade in the making. for now it seems like the news was priced in. we've seen a bit of sell on the news. so for the short term there might be selling pressure on the token but in the long term it is a positive because it will allow a lot of institution

participation in the largest cryptocurrency. you might remember in 2020 we had seen a trend where real estate firms were buying and holding bitcoin on their balance sheets as well. as well as jack dorsey's -- that trend had died out. we can see a revival of the trend as well. more demand for the token and subsequently, better in the price as well moving forward. kriti: that is the bull case, that it is a matter of time before bitcoin explodes. the vehicle has been provided to the masses for lack of a better term. what if this does not work? what if we see muted reaction? does that mean the end of cryptocurrency or the momentum that bitcoin has perhaps enjoyed in the past couple of years?

sidhartha: i do not think it is the end of the momentum for bitcoin. especially because there are other tailwinds for the digital assets going forward in 2024. we will have the bitcoin halving during late april which has always been a very strong tailwind for the cryptocurrency. we have seen that in the past hiking cycles the token has rallied to new all-time highs every time. we have that as a tailwind, also the fact the halving will coincide with the right cycle. so there are quite a few tailwinds for the digital asset as we move into 2024. kriti: some would argue if it is proving to be a success story, it becomes perhaps a door for an ether etf or solana.

it is creating ether outperformance. interesting dynamic. siddhartha shukla, we thank you for your reporting this morning. plenty more analysis ahead. the charts i am watching coming up next. stick with us. this is bloomberg. ♪

kriti: there are a couple charts i want to put on your radar. we talked about bitcoin but the first when i want to put is the main event today. all the u.s. cpi. look at what the biggest positioning story might be in terms of the readthrough. you are seeing weakness in the bloomberg dollar index. not much action in the bond market. the reason is because there is so much smart money that is actually hedging against it. they are talking about being

short on treasuries. that is what this chart really talks about here. a lot of this quote unquote smart money is short the treasury market right now, it's creating this bid under yields or this floor under yields. does that change if you get a better than expected cpi report? the acceleration in inflation is predicted to be 0.2% on a month over month basis. take that and translate it over what you are seeing in the currency market or even the stock market and people are expecting, anticipating already a much much better kind of result from that report. as the hedge fund market or hedge fund party for lack of a better term positioned wrong? that is one question, the other is asset price inflation. lizzy burden was on the show earlier today talking about the fact that it is kind of coming back into the vocabulary and the worries of andrew bailey over at the boe. as for the federal reserve, jay powell has not been talking much about asset price inflation even

though after you have seen the market really interpret commentary as the pivot that a lot of people were waiting for, five rate cuts priced into the market for 2024. look what financial conditions have been doing. green on the screen up up and away. does that work against the federal reserve? or is that accommodative policy the most accommodative by the way in that two-year time doing the same work as a rate cut? does that create an underpinning for the commentary we heard from new york fed president john williams that the rate is sufficiently restrictive? any cushioning the economy needs, it's already getting it from the financial conditions that have been fairly loose for i want to say a couple of months now. the question is, do we need a rate cut? is the insurance rate cut a real necessity to keep the economy turning or is the asset price inflation already doing it? u.s. financial conditions take into account not only the fx market, the dollar strength we have been seeing the last couple

months, that weakness is coming down, the stock market as well. those are all things to be thinking about, as are the fun stuff. coming up on the markets today program we are going to be speaking to the ceo of the paris 2024 olympic games organizing committee and how preparations are going ahead of the summer games. an collusive interview in 30 minutes time. they are going to talk about what preparations look like at a time when the french economy may not be poised for this or perhaps this is the catalyst they need to bring that tourism revenue, to bring into their numbers. there's a lot of interesting dynamics in france. also plenty of fun stuff. next, markets today. stick with us. this is bloomberg. ♪

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