>> good morning.

this is bloomberg daybreak: europe. i'm tom mackenzie. these are the stories that that your agenda. his decision day for the fed with traders eyeing future rate cuts. asian stocks mixed after u.s. equities touch fresh record highs. as the u.k. awaits the latest efficient data over on the continent, 50 lagarde will make the most import speeches of the year. the biden administration is considering sanctioning while ways chip network as a part of a campaign to protect u.s. security. the tech story was back. it is a slightly more nuanced picture as we count down to the fed decision. rate suspected to be kept on hold. it is the economic rejection

that will be in focus. as will any detail on the discussions on the balance sheet of the fed. s&p futures pointing lower. we are counting down to that you see the speech. inflation data out of the u.k.. really consequential. expected to fall to a 2.5 year low. the foot to 100 futures lower by .1%. nasdaq futures down .1%. the megacap seven leading the charge. japan is close so we focus on currencies of the japanese yen. traded in the session. for the softness getting in the press conference. he did not lock in any further hikes after that historic hike.

the first since 2007. the softness continues for the japanese yen currently at around 51 on japanese yen. look at the euro-dollar as well. the pound focusing on the build up to that inflation data. that is suspected to fall to 4% in january. the bloomberg dollar index up a 10th of 1%. that could be volatile. brent crude trading $87 per barrel. let's cross over to asia. see how the markets are shaping up. a wrong standing by in singapore. what you looking at? >> those dots as well as powell's tone. that will be the key to sitting the tone for asian equities. if you are stock investor, equities are going to benefit

from the ai theme. that may not matter as much. we are seeing the likes of tencent. those are lifting stocks. that is also helping the kospi. that is leading the charge today . for tencent we are expecting its earnings to show double-digit growth in earnings-per-share. they are growth. this is according to bloomberg intelligence. it is expecting continued strength from short videos as well as ai related ads. that is one thing to keep an eye on. they also got the long rates out of china. this was as expected. it doesn't seem to matter so much if you're looking at chinese bonds because it seems there is still continued speculation that we will get easing somewhere down the line. equities showing a bit of positivity coming through.

today surged the most since six months ago. this is on the back of a report that nvidia is considering buying its memory chips. really showing how nvidia reaches across the supply chains. as we count down to the fed, let's take a look at how the currencies are faring on the korean won. we see a bit of strength. pretty tight ranges all things considered. it is post boj day. this is lower against the euro since 2000. it is all about the hawks on the dubs. >> think you very much indeed. with the focus in asia still on the fed as well. and there is potential cross in

the terminal right now. this will by the biologic site in the u.s. for 1.2 early u.s. dollars in cash. also point to invest swiss franc to upgrade that facility they are also bringing out midterm guidance. sales growth updated from 12 to 15%. we will keep you across that story throughout the next few hours as we continue to get more detail on it. let's get back to the fed question. all of this while keeping one eye on a slowly rising jobless rate. let's bring in mark cranfield. the number of different scenarios could unfold for traders as we look ahead to

jerome powell. his press conference decision. it is the pressure and the adjustments that will be in focus. >> yes. traders looking at three main scenarios. a potentially putting hawkish outlook. that lowers the dot plot to just two rate cuts for the year. that seems to be by the expected now. when jerome powell stands up at a press conference, he does not really push back against it. that will be the most hawkish outcome. the slightly less hawkish outcome was we would get the two dot plots production here. then they will see how dubberly pushes back. there are so rate cuts coming later in the year. nothing to worry about. the most of a scenario would be the dot plot stay at three rate cuts for this year and drum powell sounds dovish.

closer not too far away from the november highs. they have an office in new york. they will be watching closely. you may will see some headlines coming out. the mistry of finance is pushing back and sing the dollar-yen is getting too far. they need to do something about it. if he goes even further, we may even have to see extra intervention to try to support

this. probably nonverbal intervention first. certainly currency markets very much in play. euro-yen hit a 16 year high as well. treasury markets will also be watching very closely. people seem to be shorting treasuries very much. if there is a risk, it is short covering. slightly more dovish than expected. all parts of the universe will pass on the whole thing as equity market. all they care about is ai. didn't really care about the fed. ? it's are obsessed with ai rather than the fed. but it does seem like we're in for a very interesting day when it comes to the scenarios. 151 currently on japanese yen. that currency there to look at later today as well. thank you mark for setting us up

on that front. not to geopolitics. antony blinken heading to saudi arabia and egypt as we speak in his sixth visit to the middle east. the trip follows warnings from eight agencies in gaza is worse than into don or afghanistan. paul, immense pressure now on the u.s.. more leverage on israel. what campbell he can reasonably expect to achieve this time? >> he is back in the middle east. he will be in cairo tomorrow to meet leaders in both places. when it comes to saudi arabia, no doubt he will want to speak to them about the postwar situation because he could

perhaps see if the saudi arabia's are willing to help fund the reconstruction of the strip when fighting. there was a lot of talk about whether peacekeepers are sent into the territory to stabilize it. what is the most intense phase of fighting is over and there is a permanent cease-fire. in egypt he will rbc talk about getting into the strip. this is a huge concern for the international committee right now. as you mentioned, there is massive pressure being put on israel to do more to enable more humans hearing supplies to get into the gaza strip because of the dire situation there when it comes to food distribution. antiblack and has that this is the first time in history the whole territory is effectively facing close to a situation that is not far off a famine.

but widespread starvation. israel is moving. it does seem to make -- it does seem to be making a few more concessions toward the u.s. and international community. it is doing even more to ensure supplies get to the strip. >> we are also getting meetings between u.s. and israeli officials. what can we aspire to come out of those meetings? >> this is something that came out of joe biden and benjamin netanyahu. it was the first in more than a month. in a sense they were trying to dow down the tensions rising between them and their countries because their carry on as offensive and worsening humanitarian situation. a key thing to watch will be

this delegation from israel to do washington specifically to talk about israel's plan and the city in southern gaza. we will talk about who will be in that delegation, we are preacher it will include netanyahu himself. if the u.s. wants israel to cancel those plans, the u.s. does not want to surrender under any circumstances. it will be very difficult to convince the israeli government that is the way to go because netanyahu insists on a very regular basis that israel has to go in. that is the last bastion of hamas. there is no way of achieving its goal of destroying hamas's military organization. if israel does decide to go ahead with that plan, that will be a very big point of contention between itself and

the u.s. and the rest of the world. >> paul wallace. thank you very much indeed for the latest in terms of what is transpiring in the middle east. the urgency around the situation in gaza. not your day had. everything us we are looking ahead to. the u.k. cpi really important. the inflation data out of the u.k.. the expectation you're on your for the month of february, that number is expected to fall from 4% in january year on year to 3.5% in february. they will lead up to the back of inlet decision on thursday, expectations on the market still what the boe is going to hold of course. expectations change around the future cuts for the boe. they could be informed by the inflation data. one of the most important speeches of the year for the

head of the european central bank. june is the most lovely for the first cut to come through from the ecb. first is the fed decision. there are economic projections. the press conference from jay powell had him sounding relatively dovish in this community hearings. we reiterate with the dot plots being adjusted. that is 6:00 p.m. u.k. time. meanwhile, reddit is set to press one of the year's most costly u.s. ipos. that is later today. they said they would raise as much as 700 care $740 million. they are on the u.s. stock exchange thursday as a symbol of the ddt. you can get around up of the stories you need to now on this today's -- on the stairs edition of daybreak.

d.a. why bigo. today we are looking at a bloomberg script on some of the supplies while becoming through on the u.s. of administration. a crucial store in terms of the supply chain around semiconductors in china. in the ability to move up in terms of value and sophistication. that is one of the key stories on the list. also the details and the buildup in the preview of the fed. we will get her view on india's stock market ahead of next month's election as indian stocks have come under pressure in the last three days or so. the details on that coming up. this is bloomberg. ♪

>> look back.

indian stocks set to a race against as they are trying to be cautious on high valuations. this comes a month ahead of india's election. shares and stockbrokers in mumbai. thank you for joining us. down about 3% since the start of this month. since about march the seventh. is the indian bull market coming to an end? question a lot of things have happened in the last year if you look at the one your performance, it was substantial that that happened.

this kind of connection could be looked at from an investor perspective. but they could take a longer perspective. the data from 2018 is less time small cap kind of had an allegiance from 2018 until 2022. the rally we saw was important. a 10 to 12% correction is a normal thing we are seeing. gross data points. the question came back on envision some level of consciousness to investors. houses to relocate -- to

rebalance. there is a lot of outflow on that particular bit. >> if you see a rebound in those markets, what is the next catalyst? >> the main catalyst is the fact that we are growing at a substantial basis on corporate earnings. the fusion numbers are well within the targeted range. numbers are looking at a further growth. the necklace will be growth and physical assets. manufacturing, the mystic consumption. this is what we're looking at with respect to that. >> when you are thinking about buying assets within india, do you move down into the small

caps question mark how did you diversify that view? >> a lot of people are looking at old value space. i would have a contrarian view. on a short-term basis you should have allocation for you. on purely valuation and the kind of basis that mid and small caps have grown over the last 10 years. we firmly believe that long-term allocation, you can look at a small cap allocation. just because of the overwhelming space. >> a big year, the election in india coming up. they do around april. how did you do with the election? we were all looking forward to the general elections.

the current government kind of had a sweeping result. even the market is kind of positive. historically since 1990 we have seen a good rally in markets prior to election. six months prior to election there has been a rally on an average alligator basis. they will be inspecting a broader level drawdown of the markets. we're looking at public earnings.

market sentiment are still very positive. >> ok. there was the head of uae is this and strategy. that was on the context of the selloff that we see in indian stocks over the last 20 days or so but a longer-term view being expounded on their. thank you very much indeed. there was 20 more coming up. we will get a preview of the data dropping in the u.k.. and we will continue of course to set you up for that crucial for decision later in the day. stay with us. this is bloomberg. ♪

>> he spoke to bloomberg. >> we are a little bit more cautious for 2024. they are a couple of challenges. i think competition also increase even further. we have some supply issues. that is all we are. a little bit more cautious. our net cash flow to be between 2.5 and 3.5. blackrock has condemned a decision by the school fund to the vest a .5 billion dollars from the asset manager.

the republican chairman of the texas school board says this hurts the state's oil and gas industry. it does not engage in any boycotts of the industry. and as regulators signal they can rethink proposals for tightening capital rules. coming up, it is for talk and we have a preview next with ven ram with the details. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name!

it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

>> good morning.

this is bloomberg daybreak: europe. i am tom mackenzie in london. these are the stories that that your agenda. traders eyeing the future. asian stocks mixed after u.s. equities touch fresh record highs. the u.k. awaits the latest inflation data. christine lagarde will make one of her most important speeches of the air. plus bloomberg learns the biden administration is considering sanctioning huawei's chinese chip network as part of a campaign to protect u.s. securities. we are checking in on european chipmakers. checking on the markets right now. fresh records posted by the s&p yesterday. it was the tech and ai story that propelled gains with nvidia firmly in focus. cap tech names rally in the session.

a little bit of a breather ahead of the fed decision -- for decision. now futures lower by about 23 points. does he continue to reiterate? of course, what happens with the projections? when it comes to the ecb, that crucial speech from the head of the ecb. here in the u.k. at the inflation data as well. we will break that story down for you shortly. european futures up by 310 of 8%. japanese markets are closed. 151 on the japanese yen. further weakness as markets readjust to this view and no outline in terms of the hikes coming through for the boj.

15550. the pound in focus on the back. and as we pulled up to the inflation data, a drop -- a drop to 3.5% year on year. the bloomberg dollar index up just nearly attentive a present. let's get to the fed and that preview. likely to avoid signaling an imminent rate cut. stay focused on stubborn inflation. let's keep one eye on the slowly rising jobless rate. what are you going to be watching about the potential different scenarios to come out of this? the dot plots in the press conference. what will be in focus for you? >> that is right. the single biggest a we are watching for is what they do with the dot plot.

are they going to move to two? they will be for currencies and bonds. we're just watching what they intend to do with the balance sheet. i think that is a bit premature. the biggest decision will be what they do with the dot plot. financial conditions are the losers since 2021. the markets have already moved on to behaving as though the rate cuts are all -- already a. you inspect the fed to be here. if they are not, they will get to bed. >> financial conditions will factor into the decision-making. at least the signaling come through for the fed later today.

this seems to be a little bit of a coalescing around june. talk about the views of the grease at this point. the central bank governor there. his june likely to be reiterated by christie lagarde? what sort of speech will you be focused on? question said several times. june is when the governing council will coalesce toward the first rate cut. we further confirmation from three key speakers including the chief economist whose views are extremely important. i think i'm inspecting to hear a reiteration of june. i don't think there will be a pivot toward an earlier rate cut. they are going to wait for the wage data that is not do before mid april.

that is not in time for the april rate decision. betting june is when we are expecting a cut. >> likely to reiterate june and they push through the first cut. thank you very much indeed. we will bring you that speech. in one of her main addresses of the year. all of that at 845. we will of course you that speech live. to the u.k. now where inflation data is due out in the next hour. a low of 3.5% from around 4% the previous month. that is the january and february data. let's bring in lizzy burden. we are expected to see some significant progress in terms of moving inflation lower. talk to us about how that

inflation story in the u.k. has evolved. >> inflation at the headline year on year specter to fall 4% to 3.5%. this will be encouraging for the bank of england to be in line with its forecast. it would share saw progress toward its 2% target. the reason for the fall is it would be driven by food, core goods and services as well. if you just heard the core you're on your number, that is a specter default from five point -- 5.1 -- 5.1% 4.6%. >> what is your assessment of what this will mean for the bank of england that you cover so closely? >> it is not likely to persuade the becca balint to give us too many details. as much as we would like them on when the cuts will come. this is fully pricing in the first cut in august. they have a 50-50 chance of an

earlier one in june. the question is do we see more votes split from a covington? do you see some of the previous hawks dropping out of the account. catherine man has been given a second term on the monetary policy committee. if you see a surprisingly dovish boe tomorrow, you could see the town vulnerable. the bickering that is behind the curve. >> really interesting. one of the best-performing currencies year to date. you -- lizzy burden our u.k. correspondent. coming up, as we approach the end of the first quarter.

this is

quits the u.s. supply chain. there is more folks to have. particularly in aerospace is. especially during the covid. and we building the capacity is the major challenge for aerospace which we are working on. we see the u.s. expansion capacity. it will take a while for the

capacity to set up. clearly we see the trend. >> that was the capitol on the challenges of rebuilding capacity most during the pandemic. there has been a flurry of m&a activity this week. among the deals, astrazeneca snapping up future farmer. that because the fat and spins off its ice cream. airbus walking away from some security business. in the last 30 minutes or so, we will have deals around the sale of one of the parts of the roche business in the u.s. as well. let's bring in man well for the insight into what is broadly. start with the big picture.

is this an indication that things are turning around? >> definitely. thank you for having me on the show. there was a lot of dialogue. people are wondering how much of that will translate into actual deals -- tangible mergers and acquisitions. we have seen a pickup in activity over the last few weeks. we have seen some interesting transactions out of the u.s. and here in the asia-pacific as well. still a slow start. much better than last year. but it was a very challenging year locally. it definitely feels a little bit

stronger in terms of m&a activity. with that health care component in europe, that is always one of the industries for transactions. that spun out into other sectors as well. she the expectation is to the second half. devon liquored signs of a potential recovery. westerly interesting. not firing on all cylinders yet. europe is leading the way which is interesting. and then you talk about the talk. there a lot of rhetoric around potential deals. the question as to what extent that's ashlee turned into concrete action. on that point, financing will be important. is financing starting to improve? >> at the asportation is that rates will decrease at some point later in the year. that is still in expectation.

expectations have seemed to stabilized a low bit. assets are not what they used to be. it remains quiet extensive. some companies that have a lot of cash in the sector of health care, there is still interest in pulling the trigger. considering for plate some time. as long as they are strategic to their long-term plans. if financing remains an issue -- it feels a little bit more stable compared to 12 or 18 months ago. >> ok. to the financing question remains for us. you touched on pharmaceuticals and health care. talk to us a little bit more about the activity. which of the sectors look most active to you? wesley of seen some activity in other resilient sectors.

in the last couple of years, and seven very resilient. we have seen growth sectors particularly and also financial services. in this part of the world we see a little bit of a mix of sector activity from consumer to industrials. it remains to be seen. quits industrials come health care and a little bit with finance. what about private equity dealmaking? >> private equity. deftly under pressure. at the same time, i think it is

going to be a year of exist. the general partners are increasing the pressure. all to exit of their businesses. they have been holding on for a while. a theme that should drive some m&a activity. whether the timing is right. and whether they confess the valuation they are hoping for in this environment. i think that is the main question but it should be a little bit more active for equity firms this year as well. >> ok. excellent deep dive into mna. globally but also with valencia on europe. thank you very much indeed. not to bank of america with the ceo says it will take time for

the banking industry to work through issues with commercial estate. they alarmed investors with exposure in this space. here to tell us how troubled the sector is next. >> industry is well capitalized, it has good liquidity. people will show up to liquid across the industry. commercial real estate is a slow burner. it is a classic burn. we had a really commercial real estate session. there will be difficult is in working that. these assets gotta move at a price tomorrow morning. that is the value of the banking system. we work with clients and you take a building and you figure out what the ultimo -- ultimate rentals will provide. you refinance it. the top 30 vasco through the

stress test. that in effect says if your underwriting in a odd way, you have to prove it right before you get the chance to prove it. this reflex your underwriting today. it relates your underwriting commitments on a scenario when it drops instantaneously. instantaneously. there is an effect on that in the industry. there probably -- probably slows down the capitol provision on some companies. we feel very good. there have been thousands of bands that have failed. that's what happens. business models change. but on the other hand, the quality of the banking system. >> that was brian speaking is loose to limber surveillance. coming up, we will get more on the bloomberg scoop.

that story is next. this is bloomberg. ♪ you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

>> welcome back now. they are considering sanctions on a number of semiconductors linked to huawei. this is far more advanced than washington thought possible. what do we know at this point about these potential restrictions? >> they are sanctioning a bunch of chip firms and lubricant is reported last year that huawei has report -- acquired a bunch of chip firms.

there are two additional symptom base firms that are acting as intermediaries to help acquire foreign ship making equipment. these company's to get centers by the u.s.. >> you follow the sector in the story in great detail. we know that china is very in debt and adjusting to these restrictions. wood furniture met -- would further measures actually impact huawei in any real and meaningful way? question has always had they are

restricting china's access to foreign technologies. at the same time we could see u.s. measures to restrict -- undermine china's efforts to building more chip industry -- they may have had some impact on china. they are having impact on ai technology. we want to look at what the latest potential measures may have. we will have to wait and see. >> thank you very much indeed for the details around that bloomberg scoop and the supply

chains. after some of the other stories making news around this wednesday. they are understood to have cut their share sale price target to $875 each with -- the company had been looking to -- they have gained nearly a thousand percent in just the last year on the back of enthusiasm for ai. samsung shares had their biggest gain in more than six month after an endorsement by nvidia. he is putting to use samsung as a supply of high-bandwidth memory chips. from semiconductors to luxury now.

gucci will plunge about 20% in the first quarter due to a deeper than expected decline in the asia-pacific region. french companies struggle to keep up as luxury sales have come off the boil. especially in china. we will bring in more on that story through the morning. all as we lead up to that that decision. some of the momentum around bitcoin is starting to fade. it broke through 72,000 u.s. dollars. you can see toward the end of this, part of the reason why you started to see the slowdown is because of expectations that those cuts may be coming later from the federal reserve. the other factor to think about is those etf flows that supported epic claimant -- supported that bitcoin momentum. question is is this the

turnaround now? talking to the fed them, without refund on the fact that at the start of this year you had a couple of cuts. we look ahead to that in great detail. also coming up letter today, christine lagarde keynote addresses the year at the ecb and his raucous confidence. we will bring that online. up next it is markets today. this is bloomberg. ♪

anna: good morning from one then, this is bloomberg markets today. here's what you need to know. it's decision day fo