>> good morning and welcome to the daybreak era. let's get to the top stories that set your agenda. u.s. and u.k. launched airstrikes over 60 targets in yemen after weeks of attacks on commercial ships in the red sea. they are now vowing more to, in retaliation. u.s. inflation jumped by more than expected, driven by services, it's a different story across the pacific as inflation in china continues to plague the markets. ecb president christine lagarde says the central bank will start cutting rates only once it's convinced inflation is headed back to its 2% goal. a lot of policy coming out. united states, ecb and asia. quick check on markets. we are seeing a notable outperformance right here in europe. euro stoxx 50 futures higher. ftse 100 on their heels. what's interesting is that given the geopolitical headlines, --

really crucial. 4807 on those s&p future contracts, down. let's go to the cross asset story. that's where we see more interesting dynamic. when you look at the bond market you are seeing a retreat from the 4% level. the 10 year yield is down, higher by one base point in the session. the fact it is pulling back from the level speaks to the idea rate cuts are floating to the surface of the brought -- bond market. cable, 120 seven. dollar weakness is the story. bid for u.s. assets is no longer here. brent crude higher by $79 a barrel. higher by 2%. what's interesting is 2% is and always the biggest move. we will dive into some of that later on in the show. now, quick check on asian markets. avril hung standing by in singapore with that story. walk us through it. avril: we are seeing stocks running higher again for the region. it's really the case of japan

stocks exceptionalism. as we been talking about this week. the japan stocks have closed out the best week since march 2022. it is as investors warmed to the idea that maybe we have overlooked the japanese stock market. they are seen as an alternative to the chinese stock market. something else i want to draw attention to is the idea that potentially, boj officials might be trimming the outlook for inflation and growth when they meet later this month. this pushes back the timeline for boj normalization. we are seeing the yen lows against the greenback. it was at 4.8 earlier on. we are not just concerned with the boj, we want to talk about the pboc. a looks complete -- unlikely that the chinese central bank is going to cut its one-year medium-term lending facility by 10 basis points on monday. especially since we got the

chinese cpi print confirming deflation in the asian economy. first-rate month that number has been declining. really struck -- really sluggish decline. low risk appetite for chinese stocks. offer yen is moving towards at 717 level. let's flip the board. i want to show you the asia movers as well. we are seeing the energy stocks catching a bit, but perhaps more startling is what we see in the shipping stocks. these in korea and this one in japan, the other one moving up. it's that dynamic that has been playing out since it began. the idea that given the detours they might have to take or the disruptions that the rates will continue rising. kriti: avarua hong in singapore, we thank you for bringing us the asian market story. as she was talking about the rates, at the core is geopolitics in the middle east. american and british forces launched airstrikes of more than 60 targets in yemen. the military action comes after

weeks of attacks by the iran backed rebels on commercial ships in the red sea. i'm joined by paul walls, who blew -- leads are middle east coverage on economy coverage out of dubai. what are the conversations around u.s. military intervention. as long as it's on international waters, there is no regional escalation. now, after a decade of staying away from yemen, please airstrikes are now on land. this is the regional escalation everyone was worried about? >> that is certainly how some people will see it. this wasn't a total surprise. as we know, the u.s., u.k. and others have been warning them for several weeks that there would be consequences if they carried on with their shipping attacks. the iran backed yemeni group ignored those threats. earlier this week it was the largest and most brazen shipping attack today, which forced the u.s. and u.k. military to shoot

down around 20 drones and missiles. still, this does represent an escalation. the type of escalation that joe biden and others in the arab and western world were desperately trying to avoid ever since the israel, hamas were erected on october 7. i think that the u.s. will hope that what it has done last night will not just degrade the military capabilities of the rebels, from the u.s. point of view, hopefully stop them carrying out the attacks, also not go so far as to provoke them into attacking saudi arabia or the uae. if they decided to do that, and they prove they were still able to and they had the military ability to do that, that is something that could really royal oil and gas markets. auto is up about 2% today.

as you said, that's not huge in the context of oil over the last two or three years. brent is still below $80 a barrel. there is no panic stations or anything like that in oil markets, but there could be if -- depending on the rebels reaction. kriti: in the last 24 he hours not only do we get news of airstrikes, we got news of monique tinker, in oil tanker off the coast of oman being captured by iran as well. what are the next steps? what is the worst case scenario in terms of the read through when it comes to actual supply of oil going into the red sea? paul: that was just -- one way of reading yesterday's incident is it's slightly different and separate from the red sea attacks. iran seems to specifically be

targeting a ship that was carrying oil about a year or two ago that the u.s. seized. that was iranian oil. you could say it slightly separate. nonetheless for it to come after all these who see -- after all these attacks and after all the warnings from the u.s., it is certainly something that people see as escalator he -- we will see it in the coming days. iran has said that the who theiss -- that they act on their own. it doesn't deny giving them support and backing them. it says that their decisions when it comes to shipping attacks is theirs and theirs alone. markets will still be focusing on the southern see. that's the area that they will be targeting since mid-november.

they are going to be watching to see whether the houthis are both willing and able to continue with those attacks, despite lastnight's strikes by the u.s. and the u.k. kriti: very quickly, let's round out the conversation talk about the geopolitical reaction in the gulf in particular. he mentioned the saudi's in the amber oddi's. the saudi's have been engaged with the houthi rebels for a decade. what is their reaction to this? paul: their first reaction is that they are concerned by the strikes. they did not condemn them, but we have been told that the saudi's wanted to pursue the diplomatic group that they felt military strikes on yemen would be escalator re-and be more aggressive actions. we presume that the u.s. and

u.k. had conversations before last night strikes and essentially cap them on board with what is going to happen. saudi arabia might sit as a target from the houthis . for most of the past decades the saudi's tried to bomb the houthis out of existence. they are actually trying to have a diplomatic group to sign a peace deal for the war in yemen. the saudi's would be very concerned that last night's shrike's will have peace talks and perhaps kick off the yemeni civil war once again. kriti: it is certainly a dire situation. yemeni is one of the most devastating amenity area areas in the world. we are talking about poverty and famine. thank you so much for that update. at the core of what he's talking

about is the readthrough into the rest of the world. most notably through the oil price story. that will show up at a time when inflationary pressures are easing. until yesterday's report on what the december inflation look like. 3.4 percent increase year-over-year. the estimate was 3.2%. bloomberg's jill disis joins us from hong kong. this was a little bit of a tick higher. the markets did not react well to it. what comes next? jill: we were just talking about this yesterday, this idea that bloomberg economics was forecasting we might have a little trouble going in extra meyer in tempering down inflation. we saw that bleed through into the price measures. you are looking at some pretty stubborn services, costs, shelter costs. it does look like that is going to continue to affect the fed going forward. i will point you to what we saw out of the fed cleveland president, she was saying that

this is going to play into the calculus going into january, going into march saying it's premature to consider cutting interest rates as soon as the march meeting. i think it does throw a bit of cold water on american expectation that we could see the significant easing by them. we will have to see how this bleeds over into future cpi prints as we get into the rest of the fourth quarter of this year, but i think that at this point, certainly it does seem like this is giving a little bit of room to reconsider looking at how sticky this is as we continue to see inflation starting to cool. kriti: certainly, a lot to digest wind a lot of people assume the cpi, the inflationary story was in the real -- rearview mirror. bloomberg's jill disis, we thank you. at the core of the rate cuts and pricing will be the readthrough into these banks. to what extent will that feed into the net interest income that is keeping these banks

afloat? jp morgan, wells fargo and others are set to kick off her earnings season on a volatile year in the banking industry. i am joined by jennifer hooley -- leads bluebirds coverage of finance in the middle east that is a veteran wall street reporter herself. what is the main one for you to watch this morning? jennifer: this is fourth-quarter earnings we will get later today. what i think most investors will look past that and flip to the page as their outlook for this year. i think for the most part last year, these banks have sailed through. consumers have kept up with their loans. they have largely been ok. obviously you still had the rate hikes last year and some were held up. now the question is, what happens this year. if the fed will cut rates, does that mean the fed will cut their forecast for nii? will consumers keep up with credit card and mortgage payments? there will be a lot more discussions today about what's to come. i think the results will show

these banks at a stand of quarter in the fourth quarter. kriti: really interesting dynamic, putting aside provisions, not to mention some of the other risk adjustment they are doing. bloomberg's jennifer will be back later in the show to walk us through these numbers and through the nitty-gritty. on the show we will talk about taiwan. taiwanese voters will pick a new president tomorrow. defending the island's economy. we will bring you that story live, next. stick with us. this is bloomberg. ♪

>> i hope that after i'm elected president, china will have a peaceful development in the responsibility. taiwan will not change its

vision of friendship, hope for cooperation, peace and prosperity. >> first, we must have sufficient national defense capabilities. second, we need to tell china we are willing to have dialogue with you. >> they might look friendly to us, but does this mean we stop preparing for work? this is too dangerous, too dangerous. >> taiwan security interest is a problem for the world. it's an element for global security and prosperity. >> during my tenure, i will not tackle the issues of unification. i will not tackle the unification issue during my tenure. the relationship should not only rely on one side. >> why do you worry about what will happen early years from now. at least i understand that taiwanese people do not want unification within 10 years. kriti: the three front runners in taiwan's presidential election all speaking there to the camera. the vote carries global

implications for geopolitics, trade and investment. i'm joined by bloomberg's chief north asian correspondent, stephen engle, live from outside taiwan's office building in taipei. one of the most globally significant elections this year, taiwan is stuck between the two largest economies of the world. walk us through what's at stake. stephen: so much is obviously at stake. there will be a new president elected as of tomorrow, to take up the office behind me. because the incumbent dpp party has served out her two terms, so there will be either her vice president or one of two of the main opposition parties who favor more direct content -- ties with mainland china. one of those candidates, for kmt, or the upstart middle party, that is essentially the taiwan people's party, tpp,

running as an independent. at the three horse -- it's a three horse race. the convention of narratives is that the dpp is more independence minded. they are not declaring independence, but they would like to build up more of a taiwan's sovereignty identity internationally. that does not sit well with beijing. the opposition parties want to change that narrative, they still want the status quo but they would like more pragmatic dialogue with mainland china and benefit from the economy across the taiwan strait. what has changed between four years ago the last time we had an election, and today? so much. i was in this exact spot for years ago and the stakes were high. but in the last four years, essentially what has happened is, we had the pandemic, we had the supply chain issues, we had the export controls from the biden administration, pressure on china, and you had xi jinping consolidate his power. he brought in loyalists to

surround him and he got in unprecedented third term. he has made no bones about it. he wants to see reunification with taiwan, whichever means is necessary. we don't know if that will happen tomorrow, we don't know if it will happen 10 years for now, but he has had a stated goal of unifying taiwan with mainland china. the stakes are extremely high. either we will stick with the more independence minus -- independence minded dpp or have the opposition parties made enough ground with the people. the 19.5 million people who are eligible to vote tomorrow, will they be fearful that the dpp rhetoric puts taiwan closer to war? it's a big question, i don't have the answer. we will get more resolution tomorrow. kriti: plenty of readthrough into the corporate space. stephen engle reporting live out of taipei ahead of that crucial presidential election. we thank you for your analysis and reporting this morning.

coming up, we switch gears. it hurts. log on electric vehicles. it's a really big story. we will walk you through it. stick with us. this is bloomberg. ♪

kriti: welcome back to daybreak europe, i kriti gupta. hertz plans to sell 100 thousand electric vehicles and reinvest in gasoline powered cars. they're blaming weak demand and high repair costs for the move. sales began last month and will continue throughout the year. the decision highlights waning demand for evey's in the u.s. joining us for details is bloomberg's any of head of mobility. this is an interesting moment. didn't hertz -- the tom brady

commercial coming to mind -- really doubt their move into ev. they were rewarded by it in the stock market. talk about the rationale behind this move. >> about 3% of the global fleets are electric vehicles. hertz has been ahead of their competitors with 11% on their fleet having a plug. this has created issues. they are learning as they go and really pioneering away in a lot of these cases. one of the factors that they have really been hit with is this staggering drop in the residual values of electric vehicles that they purchase, and then they have to resell to the used vehicle market. just over the course of the last year, use vehicles have fallen between 18 and 30% in just over eight years time frame. kriti: it feels like carmakers, corporations, hertz really dove

feetfirst and made a complete turn around. you see it with governments as well, talk to us about that reversal. is there anyone doubling down on the move into electric? >> this is significant across different regions. one of the ways the rental business differs between the u.s. in europe is how you go about purchasing vehicles and then selling those vehicles once you are done with them as part of your used vehicle fleet. so it becomes much easier for european companies who have agreements with automakers to sell their vehicles back for set prices, that helps on the electric vehicle side of things, this creates a range of other opportunities for new automakers trying to establish themselves within consumers minds. the way a lot of consumers first interact with an electric vehicle is through a rental, it's an interesting opportunity.

kriti: the almost always here when they have the experience with the rental car, it's a smooth ride, it's really quiet. talk about the pricing. at least for americans, it's a massive hurdle where europeans, because of the costs associated with a more gasoline powered car, are leaning to green more so than their american counterparts, how does pricing factor into all of this? >> it's a really interesting point. there is higher upfront purchase prices for your electric vehicle. in theory, you are paid back for that by having lower operating and maintenance costs. but what we have seen with his hertz announcement is that the repair costs are higher than you would anticipate. dealer and repair networks aren't familiar with these vehicles. that's driving up a lot of the costs and has been a major factor for what hertz has decided to do with their vehicle fleet. kriti: talk to us about the tax

incentives associated with this as well. it feels like when tesla first came about, you see tesla as a bellwether for all the other ev options that you have, the tax incentives were a big part of getting people onboard and taking on that luxury aspect of an electric vehicle. do tax incentives, government incentives even here in europe make a difference? >> absolutely, even when you get market started in the early stages, these upfront markets make the purchase decision incredibly important. these are starting to go away across europe and we have the ir way -- ira and the u.s. is a new wave of purchase incentives that will help people with the transition to electric vehicles. you can't keep spending that money forever if you are in government. they will start dialing back those incentives once you get past -- past a certain electrification threshold. kriti: really interesting dynamic.

it feels like it's doing a 180, in terms of if you want to push in. head of intelligence mobility joining us with a crucial story with the trends we are seeing. i want to bring you a quick chart. they were talking about electrification. my mind jumped to china, the leader of electrification. one of the major stories we are watching is the chinese deflationary story, even though inflation in the u.s. jumped up. deflation in china also accelerating. you are seeing the two global economies talk about this divergence, that speaks to the idea of how we will price the fact that, maybe jay powell isn't the central banker to the world. these are the divergence between the two economies. a theme we will continue to explore. stick with us. plenty more ahead

kriti: good morning and welcome to "bloomberg daybreak: europe." the u.s. and u.k. have launched airstrikes on 60 houthi targets in yemen. in inflation jump in the u.s. driven by services. deflation in china continues to accelerate. christine lagarde says the central bank will start to cut rates but only once it is convinced that inflation is headed back to its 2% goal. there is a lot to digest around the world. when you look at the market reaction from a little mixed. the cross asset picture. the 10 year yield retreating from the 4% level. euro-dollar, 1.09.

there is a lack of appetite for american assets. brent crude reacting to the geopolitical story but not to the same extent we have seen in terms of houthi rebels in the past. brent crude higher by about 2%. at the core for a global audience, what does this mean for the inflationary story? and what does it mean for pricing for the federal reserve? if oil prices start to feed into the inflationary story at a time when the market is expecting five rate cuts priced end the market. in the last 24 hours wykle mckee spoke with loretta mester about -- michael mckee spoke with loretta mester. >> i think march is too early in my estimation for a rate decline

because i think we need to see more evidence. i think the december cpi report shows there is more work to do. the work will take restrictive monetary policy. >> i cannot give you a date but if we win this battle and we reach the 2% inflation target as we predict in 2025 and if it is confirmed by the data in the months to come, i'm very confident the rates will start going down as soon the data confirms the inflation path. kriti: christine lagarde and loretta mester both talking about rate cuts and their timing. all of that could change in view of the geopolitics we are saying. coverage of our top two stories. in a moment, we will get to the latest on south africa's efforts

on a legal ruling on israel's actions in gaza. american m british forces have launched airstrikes on more than 60 houthi targets in yemen. the groups have launched weeks of attacks on commercial boats in the red sea. talk to us about the houthi response and what escalation looks like from here. >> what we have at the moment is a statement through the television network suggesting they will continue attacking israeli ships or any ships bound for israel from the attacks that we saw yesterday. it goes on to show that a potentially significant amount of the houthis ability to attack us on the red sea and the strait of hormuz -- they have been degraded but have they been

disabled? that is a different question. the houthis have shown over the years that they can deal with this. they are remarkably agile. in terms of combat in the open field, the americans and british will reign supreme. but as the days go on, where will we see flareups potentially and a response from the houthis or by one of their proxies like iran who moments ago said if the attacks continue, that will fuel insecurity. maybe that sets the stage for what is yet to come. kriti: speaking of the oil tanker in particular and these kinds of tit-for-tat battles throughout the middle east, i'm curious what you think this looks like in terms of regional powers. what is the response from the likes of saudi arabia and the uae who has been engaging with

the houthi rebels longer than the u.s. >> the saudi's and the emirates have no appetite to see anything escalating and they want to bring this under control as soon as possible. hundreds of aliens of dollars have been spent on economic reform programs. any threats to their freedom of navigation is the last thing they need, that would derail their ambitions. and the u.s. was trying to pull out the saudi's from their involvement in yemen for many years because of the humanitarian crisis. the way the saudi's have put out a statement and they said they look at the military operations with great concern and they are urging self-restraint. nothing yet in particular from the united arab emirates. kriti: when you talk about escalation in particular, there seems to be a warning that

antony blinken himself has said we are trying to avoid regional escalation, a spillover. looking out what is going on in iraq, syria, lebanon, the red sea and now yemen as well, it feels like that box has been checked. would you agree? >> yes, to some extent. escalation is in play. and you have cited specific examples of where we have seen a flare up of tensions or actual violence or work. the more this box is checked, the more a bigger box is closer to getting checked which is a regional conflagration where you no longer have control of the situation and the different variables spill out of control. we are not there yet but we are moving closer. the u.s. will try to keep a lid on this. that is what came across our

conversations this morning, the u.s. is trying to focus on what is going on with china and asia and they cannot afford to get bogged down on three different friends across the middle east let alone russia and ukraine and china. kriti: it is fascinating how this is sucking in all the global powers into a conflict that started as being isolated to the middle east. yousef gamal el-din, thank you for that crucial context. we are talking about the read through. the corporate investing standpoint. we are seeing early signs -- reuters reporting that tesla will suspend manufacturing for three weeks in berlin. because of transport routes being troubled by the conflict in the red sea. and there was a warning that

sales would be affected by shipping delays according to geely. from the investing pace we go to the legal case. south africa is calling on the un's international court of justice to order israel to end its war on hamas in gaza. pretoria wants a ruling that the is really military actions constitute genocide. israel says it is defending its own territory. icj tribunal rulings are binding but there is no mechanism to enforce an order. >> south africa unequivocally condemns the targeting of civilians by hamas and other palestinian civilian groups and the taking of hostages. we have expressly recorded this condemnation. most recently in a note to israel on december 21.

kriti: a truly historic moment. karen is monitoring it all from berlin. can you talk to us about the legality? what is the argument? >> south africa's lawyers argued three hours in court putting out a lot of details about the is really military operations to underpin their point that israel is committing genocide. that is difficult to prove. you have to prove a special intent. the legal argument is that israel is not only holding a military operation but it is targeting the palestinians as a group. israel is denying this. they will defend their case in

court. they will say it is not targeting palestinians as such but hamas. israel will also argue that hamas is using civilians as a shield and that is partly the reason why the humanitarian toll is so high. these cases usually take really long so south africa has asked for a fast ruling and a preliminary order to have israel stop the fight immediately. kriti: in rest bonds to this legal -- in response to this legal case members of the biden administration called it inefficient and a waste of time saying it was unproductive. we know with the icj although symbolic, their rulings are not enforceable. what is the readthrough for israel and gaza given that context? >> well, you know, this will not

stop the war. nobody expects israel to comply with this. ukraine asked for a similar ruling and got it but russia did not stop the war. this is the un's highest court. it has a bit of sway in the international community. it is a victory for south africa. it has an effect on the diplomatic discussions that surround the conflict. south african can pressure its allies to do more. and if israel wins a dismissal, it would keep maurice standing with its allies. it is not that it has no effect at all. kriti: it is really something we will be watching closely when we talk about the geopolitics. and the icj, although not

enforceable, does have the backing of a lot of countries. the icc was targeting the individual and not the country. karen, thank you for your analysis and your reporting. before we had to break, i want to give you a headline -- a houthi rebel spokesperson saying they did not target any state but for israel. they also vowed retaliation in response to the airstrikes that the u.s. and the u.k. conducted in yemen. there is plenty more analysis, geopolitics and markets ahead. stick with us. this is bloomberg. ♪

kriti: welcome back to "bloomberg daybreak: europe." news from around the world in

the corporate space. navartis has backed away from its pursuit of a drug developer. they will take more time for an emergent -- it will take more time for a deal to emerge. from biotech to aerospace and defense. a robust -- airbus sets a sales record. the sales were driven by its mega deals with india and turkish airlines. it also met its annual delivery target. sticking with the corporate story, to wall street. thanks reporting today including jp morgan, citigroup, wells fargo and bank of america in the u.s. session. jennifer, a wall street veteran, there is a lot going on here in terms of banking and trading

volume and whether the banks will have as much momentum in a rate cutting environment. >> it is funny because i think the banks are a lot like goldilocks and the three bears. they need another volatility for the traders to stay active and make money on the trading side but they don't want to much volatility because that keeps corporate and m&a activity low work. they need enough volatility to make money but not too much. this quarter was one where the conditions were not right. we expect trading to not look so hot. we are still in the midst of a deal slob. the wall street operations for these big bangs are still probably -- big banks are still probably on the back foot. kriti: we know jp morgan has been leading there wall street and european peers.

what helps the rest of the banks catch up? >> absolutely jp morgan on a returns basis is leading the pack. you see a lot of these banks trying to turn things around. citi is in the midst of a large restructuring and their hopes to improve returns. i think a lot of the banks in this quarter will be looking at a period where we are heading into rate cuts or a softer u.s. economy. how can we still be on the front foot with our fee income? kriti: let's go to the nitty-gritty. in the u.s. session yesterday citigroup shares fell by a significant margin. this particular stock move was tied to a filing. they are setting aside $1.3 billion with risk associated

with russia and argentina. >> this is what investors don't like about citigroup. it has operations in over 160 countries. citigroup has exposure to anything happening anywhere in the world. they have operations in argentina. after the country devalued the peso that month -- last month, citigroup says that will hurt their revenue on the basis of currency translations. nothing materially changed about their operations but on the currency valuation bases it will hurt operations. similarly with russia. for a long time they have said since the war broke out that they would like to wind down those operations. it has taken them longer than anticipated. some stuff they won't be able to get out of. with the ruble doing what it is doing against the dollar, that will hurt the revenues they make

from that business. kriti: it is interesting they are having this divorce affect two years into the war. a lot of corporations with that russia exposure had to take the write-offs fairly likely. talk to us about this macroenvironment. talking about the rate cuts getting christ in in 2024 as well as with the newfangled products including etf's and bitcoins. where do the banks stand on them? >> so far a lot of them have -- they are not saying no to digital assets. they are certainly being cautious. it will be interesting because it is a juicy opportunity for them for fees in a year where income will not be a driver for earnings. i think for the most part what

we will hear from these banks is more the outlook on rate cuts and how it will impact the income of managers and what they are doing to keep a hold of consumers. we saw a lot this last year as reads went up, the banks did not have to weigh their deposit pricing too much. they kept a lid on deposit cost and kept customers in the door. it will be interesting to see if the rates go down if they are able to pull back on a little bit of pricing they did give consumers. it is an interesting dynamic. they have a lot to answer for today. kriti: a lot going on in the american bank space. reading through to the european bank space. jennifer has a couple of busy days ahead of her. later we will hear from the senior executive vice president of wells fargo. you don't want to miss that interview coming up at seven: 10:00 p.m. london time.

--7:10 p.m. london time. more ahead. this is bloomberg. ♪

kriti: welcome back to "bloomberg daybreak: europe." we are talking a lot about the developments between the u.s., the u.k. and the airstrikes launched on about 60 houthi targets overnight. the question is the red spots. you have spokespeople from the houthi rebels vowing attacks but that they also did not target any country but israel. we are waiting for more comments as we get those headlines. we want to talk about the market reaction. a lot going on. where are the trigger points?

where are the issues in terms of global supply? this chart puts it into perspective. brent crude is only higher by about 2%. if you put that into context in the last six months, that is not a massive move. during the trade war with donald trump and china, and average move was 5%-6%. when the rebels attacked the aramco oil fields, the move was bigger. this is not that enticing though you are seeing heavy trading volume behind some of these moves. the reason it is muted on the surface is because there are so many opec cuts at play. asked of amounts of storage in the u.s. -- massive amounts of storage in the u.s. and the deflationary story out of china. i would divert the attention away from oil and to the

shipping rates. a lot of corporate reactions talking about some of the moves in the corporate shipping space affecting parts -- tesla is the most notable saying they are slowing down some of their production out of their berlin facility. there european facilities as opposed to their u.s. and china wines. because of the issues they are dealing with. this chart tells it well. the shipping routes are being brought around the cape of good hope. more fuel and labor. because there is so much need, shipping rates around the world from shanghai to rotterdam, shanghai to los angeles, they are getting speak -- steep. this is a concern that a lot of people have. we are going through a deja vu of 2021 where supply chain issues will be feeding the

inflationary story. something to keep in mind in line with the oil move. later today we will be speaking to the ceo of single store, software that powers companies. that is an exclusive interview coming up. and right after that we have the mayor of warsaw discussing the political crisis in poland and unpacking the events on the last few days. the uk's prime minister will visit kyiv on friday. more on markets up ahead. stick with us. this is bloomberg. ♪

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