♪ >> i'm tom mackenzie in london.

japan's nikkei tops 40 thousand and awaiting testimony from jay powell. opec plus extends cuts. china unveiling strategies for reviving the economy. we are live in beijing. diplomatic efforts to pause fighting as conditions deteriorate with planes air dropping aid into the territory. it's a big week for global markets. the national people's congress in china and growth targets. you have jay powell in the house

and senate and fresh forecasts. the rally continues across asia and 16 stocks out of 18 closing higher. to tens of a percent gains. looking to losses of a 10th of 1%. upgrades coming from bank of america. nasdaq futures are pointing to modest gains. let's look across assets. european futures, let's look at the currencies.

money moving out of treasuries. 108 on the single currency. bitcoin in focus having crossed the 64,000 level. etf flows continued to support opec-plus extending cuts, now the most important decision for the cut in june. brent at $83 a barrel. mixed demand. what is standing up to you, april hong? >> the tech rally and from the

u.s. is helping, but pulling back from session highs. chip stocks are lifting indeed. something we are seeing broader. but that is going to be key to watch for the japanese broad-based gauge. most of the stocks that are lower today, for it to go higher we want a broad-based rally. investors watching jerome powell for jobs data in the china mpca. let's look at what we are getting we are stocks have pulled off session highs.

seeing a rally in bonds, but in order for this to climb, we have seen a floor. they want to see structural reforms and policy consistency. let's look at the real estate sector, the pain point for china. despite those sales surging, properties are down and that is a sign of bonds being down. talking to lenders to defer payments. this will figure strongly in the annual gathering. tom: thank you very much indeed.

a big week for china. unveiling strategies, but li qiang will not the holding a press briefing. bloomberg's stephen engle joins us. a surprise move by the premier. what are you reading into it? >> this is the one time we can get into tiananmen square. it's the one time you can hear legislators. tomorrow is the political advisory body to the national people's congress and they are gathering. we are getting busloads of delegates coming in.

the biggest challenge is the economy, externally in internally. consumption is down even though we saw a big jump in shopping. that does not carry on over the full year. the property mess is well documented with ramifications at the provincial level. there have been calls from the central government. xi jinping resisted big stimulus and emphasizing de-risking and deleveraging. external is poignant and that is why this is an important congress. we saw foreign investment rise by the least amount since 1993.

years of investment have slowed because of the economy in the risk of concerns. lots to discuss. tom: seems like a pivotal moment. what are investors looking for? stephen: policy. in february, we saw the national team prop up the stock market which helped confidence. spending was good and consumption is a big pillar. mortgage holders and first time, buyers may be feel burned or were hesitant to go forward with

a purchase. the private sector accounts for 60% of gdp. the private crackdowns have been shattered. there have been surveys asking what is the most important thing and it is employment. over the next week we will see what date of those confidence. tom: stephen engle the ground. the uss israel has agreed to a six-week cease-fire in exchange

for hostages. bloomberg's news director rosalynn madison joins us. what has changed and are we any closer? >> we seem to be edging closer to a cease-fire but there are things that still have to happen. they where due to hold talks but signs of friction with israel wanting to know the status of the remaining hostages. hamas is resisting that so maybe talks break down before they began.

israel has agreed to a cease-fire. we've been here before, this close to a cease-fire and then one side will say the other is not in good faith. israel may begin a nonoffensive by the start of ramadan so we only have a week to get a cease-fire. tom: israeli were gavin and -- war cabinet member benny gantz is coming to the u.s.. what is the significance? >> is interesting it is benny gantz, a member of the war cabinet who is a centrist and has opposed netanyahu.

they are now working together in terms of the war, but he is pushing to go slow on the war. the u.s. is hoping to pressure netanyahu to hold off for now. whether not know who another thing. you need an agreement. they're hoping to convince benny gantz to hold off. tom: the u.s. and jordan are carrying out air drops of aid into also. is it a signal of patients running out when it comes to the

u.s. relationship with israel? >> the u.s. is carrying out drops because initially it was jordan doing this. the u.s. is dropping tens of thousands of meals in recent days and it is a statement to israel saying they are concerned about the humanitarian situation. beyond political signaling, what does it achieve? these meals are helpful but some landed in the seat and some crashed. they need aid through the trucks to make a difference. it's a signal to israel. tom: rose with the latest, thank

you very much indeed. it's a big week on the geopolitical front and macro politics or economics. jay powell giving testimony. anything he says, does it align with fed officials to hold for longer? patients that has been articulated by the fomc. on wednesday a budget ahead of the election so chancellor hunt will outline details and whether they have the room to push through with tax cuts possibly assurance seems less likely that we will see.

ecb decision on thursday and updating of forecasts after inflation came in higher than expected. america powers on. goldman sachs chairman on why u.s. equity market dominance is set to continue. that's next, this is bloomberg. ♪

♪ tom: welcome back to bloomberg. markets are set for fresh records and the nikkei top 40,000 bolstered by a record session on friday. we are joined by the head of

investment strategy group and wealth management cio at goldman sachs. thank you for standing by. start with the upside. is there anything in the way of this? >> things on the upside and downside. earnings have surprised in the first quarter so that is supportive of the u.s. market. not emerging markets. earnings support will continue in as people become confident, that will support markets. there does not have to be an immediate catalyst and we could

have a trading range because after a long rally you tend to have pullbacks. we don't think that will derail the trend. there are risks but the main driver would be lower inflation, lower interest rates and easier policy. specifically the u.s. where we expect for cots and that supports the market. tom: interesting, strength coming through and continuing for u.s. stocks. is there an assumption that the u.s. economy is resilient? that we get a soft landing or no landing? how much is that assuming the fundamentals of the economy? >> the base case is the u.s.

economy grows over 2%, so base case is 2.2 or 2.3%. we will have above trend growth and growth will be around trend, which matters for companies where profit comes from overseas. the backdrop is favorable and we have declining inflation, so earnings will grow between eight and 10%, which is supportive of equities. tom: yet you are expecting as many as four cuts. why the cots? is that inflation coming lower? we hear some voices saying they will not cut. >> the fed is going to say

whether the point is sooner or later and everyone thinks june, but the fed thinks inflation is coming down and if we keep the fed's here, these levels are too high so we start becoming restrictive. why be restrictive when growth is slowing down? if we are looking at the fourth quarter, the trend is lowered. the big question is whether the payroll numbers are and exception affected by seasonal adjustments or whether we will see payroll at 250 or 300,000. our base case is the number will be lower in the fed realizes a slowdown.

you are beginning to see the slowdown so why wait for recession? they have two mandates, inflation and employment, so they do not want to create recession. tom: outperformance in the u.s. is articulated. avoid cash, avoid bonds in the story will continue. where does china land? is there a tactical play around china? >> all clients are asking us that, given how cheap china appears. people say has it discounted the worst? our view is one should not invest in china. within the economy will slow down for the next 10 years. second, we look at policy, it is not clear what the general

direction of policy will be, so there might be short-term stimulus and is not clear when we will find the bottom to real estate. there are policy uncertainties putting a cap on the equity market and data is unclear with no good grasp of growth last year for this year. they published a growth rate above 5% in 2023 but most think that's not the real number, it was weaker. we look forward we are looking at drivers of growth. if we think of property, infrastructure and exports, those are substantially weekend. we do not recommend moving to china. tom: one should not invest in china. that is the call.

head of investment strategy group cio, at, thank you. this is bloomberg. ♪

♪ tom: in nigeria, two binance executives have been detained on the grounds that they operate illegally. i'm joined out of could golly. what are the details? >> what we know so far as they were intercepted at the airport on crimes of illegal operations and no charges have been brought but claims include tax evasion in manipulation of currency. the guy wrote lost 70% of its

valuation. there are meetings and discussions on going. they were in nigeria at the imitation of the government because there has been a crackdown on websites limiting user access to their funds. tom: the details around the arrests or detention, how you define it is complicated. a number of executives, to in fact were held and we continue to monitor that. binance facing probes in other jurisdictions. let's check on the crypto market because the run-up for bitcoin continues. it is 63,554, a gain of 47% over that time.

that's just one month. etf flows are part of the story. the capping of the number of coins at 21 million, those push the upside for bitcoin. in other commodities, a review on crude as they extend production. we will dig into the oil markets and what that could mean for prices. stay with us. this is bloomberg. ♪

♪ tom: good morning, i'm tom

mackenzie and these are the stories that set your agenda. the nikkei two to five closes above 40,000 and markets look ahead to testimony from jay powell. opec-plus extends supply cuts. china unveiling targets for reviving the economy. live in beijing for the annual political gathering and diplomatic efforts to cause fighting in gaza gain momentum with americans and jordanian planes dropping aid into the territory. meanwhile, we check in on the markets. the nasdaq ended with gains of more than 1% on friday in the

s&p notched up gains. the run-up continues in futures are building on that. driven on upside for the nikkei crossing above 40,000. european futures pointed to gains and ftse futures with losses of 18 points. s&p futures lower by 1/10 of a percent. bank of america upgrading forecasts. nasdaq futures pointing up. let's put the board. it's a big week. jay powell will be giving testimony. u.k. budget on wednesday and on thursday an update to the forecast. yields up, selling pressure for treasuries.

up a 10th of a percent on the euro. bitcoin crossed above 64,000. currently flat and we will get more details because oil steadied after opec-plus extended production cuts. let's bring in bloomberg energy reporter. how is the market reacting to the extension. what will the reaction look like? >> terry reaction is they are not seeing prices search. if this were an opec-plus cut, maybe we get more price reaction but there is a view in the

market that there is still froth in the market, excess supply. demand is not able to eat up the oil being produced so a continuation of cuts was expected. this provides a floor on prices, it's not a bearish situation and this is not happened yet. that leads to a situation where prices could stabilize depending on other parts of the market. tom: putting a floor on the market. what is the focus for the oil market beyond this announcement? >> tension in the middle east

and a risk premium in oil prices with expectation that maybe there could be agreement between israel and hamas. you are seeing talks falter. there are fears that situation could turn sour. tension in the red sea. ships avoiding that key waterway between europe and the middle east, a conduit for oil trade and looking at china. big week for china, seeing whether the government tries to push forward stimulus, climate targets and energy consumption targets will be closely watched. you could see prices rise if you

get news out of china or if the situation in the middle east were to spiral or improve. tom: stephen, thank you with the latest on the oil market and cuts by opec-plus and demand in china. the ecb is in focus with a rate cut decision on thursday showing eurozone inflation eased less than expected. let's bring in mark cranfield with a preview. let's start with the euro. what are the risks? it has been unmoved in the last few weeks around 108. what are potential risks? mark: growing downside risks for

the euro. investors may get frustrated. ecb almost box themselves into a quarter because -- corner because the dater is not where they wanted to be. inflation is not coming down quickly and yet germany went into a contraction, so a real dilemma. policymakers probably want to get interest rates down, but they are so dogmatic about inflation not meeting expectations. they want to see pay increases in europe coming down to satisfy data, which suggests they want to wait a a while, probably the second half of the year.

the big risk is the euro ends up being the safety valve and we see that weekend against the u.s. dollar. tom: constraints for that ecb are self-imposed. it is the based impact the ecb meeting or jay powell? mark: jerome powell is the bigger fish across the g10 world because there is a growing sensation that he can wait. dater in america has been so strong. people are talking about a no lending scenario, that puts the united states ahead of europe and the world. markets will be watching closely and they will infer from what jerome powell has to say. the risk is that the dot plots

could change from three cuts to two cuts. that would be negative across the markets including europe, not just treasuries. the whole g10 complex. he may try to leave options open as any central banker would do but from what people have been saying, they are moving toward a situation with no urgent for them, which impacts bank of england and the g10 world. whatever powell has to say that have more impact than the ecb meeting. tom: decisions from the fomc and fed looming large. mark cranfield setting us up for a big week in monetary policy. another big item is the budget.

u.k. chancellor preparing to deliver the budget. jeremy hunt is facing pressure for tax cuts which could provide a boost for struggling conservatives. the state of u.k. finances is presenting obstacles. joining me is lizzy burden. jeremy hunt suggested tax cuts. it seems income tax cuts will be harder to achieve. what is your assessment in terms of the tax story? lizzie: jeremy hunt's watchwords were responsibility, which is a huge change from january. this is the opposite of january,

a side i'd to the tory back benches that maybe you will not get what you are hoping for, but a nod to the ball and market. you are correct in that there seems to be a debate between whether they extend cuts or knock off income tax and it is a source of conflict between prime minister and chancellor. prime minister is worried about inflation, seems to think it is necessary to cut income tax to win the election. if you look back to autumn, they cut personal in business taxes, it barely moved the dial and people feel poorer because the tax take has increased. tom: the other thing is a scrapping of tax status. how likely is that?

lizzie: when we are in technical recession, the chancellor will have to reach down the back of the sofa to pay for a giveaway like national insurance or income tax. one thing floated is extending the windfall tax meant to expire in march of 2028, but abolishing status is another thing that they are considering, stealing laborers political clothes. labor promise not to raise income taxes for the three main levers of tax, so how will they pay for other commitments? will the bond market believe them? if jeremy hunt goes for that, you have to ask why they didn't do that in autumn and it is difficult for the prime minister because his wife was revealed to

have benefited from the status in 2022. tom: lizzy burden will be across all of it in detail. the budget coming through in the announcement on wednesday. thank you very much. spain's largest bank is set to have cut 320 jobs in the u.s.. over two and a half percent of employees in retail operations were made redundant. they told bloomberg they updated their staffing model in invested in digital capabilities. elektra is closing its new chair after one week in the job as the pension fund sinks into crisis. karina is stepping down following a report highlighting a conflict of interest with

their largest investment. her departure is the second bungled appointment for chair in a couple of months. space x launched the falcon nine rocket. it is carrying three astronauts and a russian cosmonaut to the international space station. plenty more coming up in a deep dive of markets, given the consequences of the agenda. stay with us. this is bloomberg. ♪

♪ tom: welcome back to bloomberg daybreak: europe. it is a big week for china. leaders unveiling strategies to revive the economy. stephen engle outlines the priorities for these sessions as investors scrutinize fresh policy direction. stephen: early spring can be tough to read as china faces economic headwinds ahead of the national people's congress with property market turmoil, poor consumer confidence,

destabilized political ties and plummeting fbi in a rocky stockmarket, it has not been a good first year for xi jinping since taking an unprecedented third term. >> the economy is recovering, but the confidence is not back. stephen: state directed funds have mobilized, while beijing replaced the head of a securities regulator and crackdown on shortselling. banks eased a loan prime rate and consumers spent mightily during the lunar new year holiday. the best set of numbers since pre-covid. was it enough to turn winter bears into spring bulls? >> 2023 has been deflation and de-risking. policymakers want to go back into reflation and reform. >> the ability of these measures

to change market sentiment, we are cautious. because what is needed is a change in the inflation outlook for the country and sentiment in the private sector. >> sentiment is wrong autumn and issue is credibility. >> the growth engine is one that is manufacturing and infrastructure lead. those might get to the growth target, but in terms of dine us -- dynamism, in need some work. stephen: the intention is li qiang's work report on day one of the national people's congress. >> looking for candies from the government. can we go back tomorrow like china standards before in the 1980's? a lot of enterprises and

incentive. stephen: wishful thinking for global investors burned by multiple stresses on china's private sector including covid zero in a takedown of tech. >> we got nervous about china, that was 2023. for the past year and a half we have had no exposure to china. stephen: the world is watching beijing's next policy move, perhaps at the npc, with great interest. stephen engle, bloomberg. tom: the report on tuesday and growth target will be consequential. the expectation is as we get a more historic view on growth in trajectory of the world's second-largest economy, they will come in with a growth target of 5% which will be

relatively aggressive, given that last year's 5.2 percent growth was from a low base indeed. they are coming at it is a relatively bullish number. strong in terms of growth target. there is some debate, some of argued it is less important given the focus on other levers to the economy. this is the longer-term picture in terms of growth from china since 2009. you see the softness and headwinds, whether it is decoupling coming through from some analysts or the demand picture. there is deflation and continued softness in prices. people ended up last year with inflation around 0.2% for the entire year. you realize what that tells you about demand.

that is gdp but we are looking ahead to deficit targets in the work report and other settings for the economy. military spending, infrastructure and expectations around where rates go with a focus on the pboc. u.s. leaders grow the field an agreement to keep large parts of the government operating until october with provisions to keep reserve oil from china. it sidesteps disputes over funding for defense, homeland security and social programs. nikki haley wins the republican primary in washington dc, her first victory in the nominating contest. winning by 63%, and donald trump amassed 244 delegates. nikki haley signaled she may declined to endorse the former

president in an election rematch with jill biden's. tamara super tuesday, allocating more than one third of delegates. stay with us. this is bloomberg. ♪

♪ tom: welcome back to bloomberg daybreak: europe. a big item over the weekend was a decision by opec plus. they extended those production cuts, so the next decision will come in june. there is debate around the tightness in the market and suggestion that there is more tightness coming. we are $83 on brent. you have questions around

compliance. countries like iraq were not complying with cuts they had committed to. the view is when it comes to june, the decision will be more consequential with some pushing do not have to go along with additional cuts. in terms of demand from china, it will be a tough call in that is why we are looking at the decisions tomorrow from the npc. this is a picture of oil markets after cuts. when it comes to u.s. jobs, data will drop on friday. we will hear from jay powell giving testimony. the expectation is payrolls will come in below the blowout number. the jobs picture is consequential for the fed. inflation has been stickier. let's flip the board and do one

last one because the other big earnings was the budget on wednesday. chancellor hunt with his plans around spending and tax cuts. do they land on income tax or do something else? it was in 2000 and when we were in positive territory in terms of the deficit. in 2021 there was a pandemic affect. that will lead up to the budget decision on wednesday. up next, markets today. markets grind higher. stay with us, this is bloomberg. ♪

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tom: it is monday, the fourth of march. this is "bloomberg markets: today." i am guy johnson alongside to