♪ dani: good morning from bloomberg's london headquarters. i am dani burger alongside manus cranny in dubai. this is "bloomberg daybreak: europe." manus: markets selloff as u.s. inflation hits a 40 year height, fueling bets on a faster fed hiking season. james bullard says he backs a full point increase by july. federal reserve officials --

rushing to raise rates before their next scheduled policy meeting. nor is their widespread support for a 50 basis point hike. christine lagarde also warns that moving too fast to tighten policy would risk harming the european economy. good morning. two huge risks, the risk of a 50 basis point hike in march, or a fed meeting move. james bullard says this, there was a time when the committee would have reacted to something like this having a meeting right now and making a move right now. they need to be nimble and consider that kind of thing. what would be the risk to credibility if they had to call an intra-fed meeting? dani: this is a market on edge

that's willing to act. let me take you into the chart. thoughts for an interim meeting hike at one point after bullard spoke yesterday reached 30%. does the fed, though, have the guts to make the move? manus: the question is indeed. bond vigilantes are alive and well. how are equity vigilantes, just wounded? dani: they are in a sorry state this morning. we are looking at u.s. futures continuing to tumble. s&p 500 futures down nearly 1%. that's after they fell more than 1% yesterday. the brunt of the beating continues to be longer duration assets. nasdaq futures on the lows for the morning, down more than 1%. europe has play catch up to that selloff. the beating happened when much of europe was closed, down 1.5%. manus: the highest inflation

print in 40 years and the risk of a friskier fed. what does it do? the dollar is supposed to roll into a hiking fed. i keep saying that but it's not doing that. the dollar is up by zero point -- 0.25%. goldman sachs say seven hikes and a terminal rate of 2.75%. oil rolls down. there's talk of additional oil maybe being delivered from the sp ore. you have 10 year futures trading. cash opens in just under an hour. futures down. the biggest one-day move since 2009. let's get to the discussion around the st. louis fed president, mr. bullard, calling for hikes of a full percentage point by july after the 7.5% print on cpi. let's talk about the stok

ing of the fed rate hikes. he lit a lot of fires yesterday, james bullard. an intra-fed meeting possibility, channeling that. he channeled many things but certainly a faster fed. good morning? >> he did, manus. standard chartered said there's a firestorm of speculation going around the fed at the moment. like you mentioned earlier in your show, would have to say our colleagues in washington are reporting today in asia that the fed is certainly not in any hurry to hold an emergency meeting and neither are they fully sold yet on the reason to move back 50 basis points in march. that's despite much stronger than expected inflation that we saw yesterday. markets are jittery, markets are nervous. clearly now, the expectations for an aggressive cycle is being frontloaded. you heard james puller making the point they've got to go a full percentage point -- james bullard making the point they

about to go a full percentage point by july. the deutsche bank note saying they are doubling down on the 50 basis point call for march. the fed signaling they will not hold an emergency meeting, do not want to create panic. i don't believe there's any question about which direction interest rates are going. dani: thank you so much. just want to bring us some breaking lines over volvo cars. a pretty sizable miss. fourth quarter operating income coming in at 3.7 billion swiss krona. the estimate had been 4.5 billion. this is one of the first times that volvo cars is reporting earnings. they went public, ipo'ed only a few months ago. we are looking at really big mess when it comes on margin. ebit margin coming in at 4.6% versus 5.8%, manus. manus: indeed. big challenges in the sector

within the oil shortages -- with the shortages and chips and ships. we will speak to ceo, has supply constraints, what's his pricing like in terms of the very hot market. dani? dani: let's get back to this inflation story. it really is the story today. it is seeing a selloff in bonds and equities in asia. let's get to juliette saly in singapore. the story starting in the u.s. but what sort of contagion spread across are we seeing their in asia? juliette: well, nowhere for investors to hide today. we are seeing all the key markets tumbling in trade. as you would expect, with these rising yields, tech stocks in particular being sold off. that hang seng tech index down by more than 2% heard it really is the front end where you are seeing this. two-year yield at the highest

since 2019 even as the rba said they are going to remain patient. they are still looking for inflation to hit their target. the other highlight i want to show you from the asian session is the fact that we are seeing more support coming through for china's economy. you are seeing data showing banks extending a record amount of loans in january. this as we see extended credit to a number of these that have been hit hard. there is one blip, and that is the consumer still is not really helping the economy. we saw short-term loans to consumers fall for a third straight month and down from those levels that we saw a year ago, down by about -- dropping from that record a year ago, i should say. we continue to need to see that help the economy. manus: thank you very much. we will be talking about the credit impulse.

juliette saly there with the very latest on the asian markets. we are not in the u.k., are we? back at home, gdp figures are due to be released in just under an hour. let's bring in our economy reporter, lizzy burden. good to see you. what are we expecting? every press conference i have seen boris johnson to, he starts with, one he wants to deflect, the fastest-growing economy in the g7 post-covid. lizzy: it's likely to be a good day for boris johnson. this is surely to be the fastest paste of annual growth since dutch fastest pace of annual growth since all the were to -- -- fastest pace of annual growth since world war ii. december was when omicron hit. you had higher consumer caution,

which would have weighed on the facing services especially. that will be somewhat offset by the boost to health care. overall, bloomberg economics sees a 1.5% hit to gdp december. that would be a 1.1% expansion in the fourth quarter, which would be in line with the bank of england's forecast. i will call it a three peat. dani: thank you so much for joining us. that's u.k. reporter lizzy burden. let's get to the first word news. juliette saly back with us. juliette: the u.s. has reasserted its intention to impose swift, severe costs on moscow. this as russia and belarus began a joint military exercise near ukraine's border, their largest in years. president joe biden planning to hold a call with western allies and nato to discuss the

situation. moscow has repeatedly denied it plans an attack on ukraine. hong kong set to report a record of over 1300 new covert infections today. this according to local media. this as new research by the university of hong kong shows the city could see almost 1000 deaths a day by mid-june if more aggressive containment strategies are not taken. 82% of the city's residents age 12 and older have received at least one vaccine does but that figure falls to just 35% of those over 80 years old. london's most senior police officer has resigned after mayor con said he had lost confidence in her their ship. she had been under pressure after a series of scandals in the u.k.'s biggest police force, including the murder of a young woman by a serving officer last year. spacex founder elon musk says u.s. regulars may grant approval to its texas site as soon as next month, paving the way for the launch of a starship next

year. musk said he is highly confident starship will make into orbit next year. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani: thanks so much. juliette saly in singapore. coming up, we continue the inflation conversation. that rising figure putting further pressure on president biden. is now facing an even bigger battle to pass has spending proposals and maintain party control of congress. we will discuss that, next. manus? manus: plus, we speak to the volvo cars ceo. he joins the bloomberg team at 7:00 a.m. chips, ships and growing demand. this is bloomberg. -- roaring good demand. this is bloomberg. ♪

♪ >> inflation is going to stay

high for a while. >> the highest inflation that i have seen. >> companies feel like they have to and can raise prices. >> we are going to see pricing that's in the high single digit range. >> there's a lot of pressure on the fed with the high inflation numbers. >> very substantial rate increases are clearly in-store. >> the market is pricing in six hikes, i think that's clear. >> there is a very strong argument for a 50 basis point move at the march meeting. >> we will be watching for how fed officials talk. >> expectation that we are moving 50 with a march fed lift off. >> they have to significantly restraint demand. and if they don't do that, the inflation will continue to -- manus: just some of our guests on bloomberg reacting to the cpi print. the upside surprise. stronger action from the fed. fabiana fedeli is the chief investment officer for equities multi-asset at m&g investment.

welcome to the show. would you be shocked and is there a credible narrative to go 50 and go large in march by the fed? good morning. fabiana: good morning. yes, it is entirely possible. the fed has been behind the curve for a while now, and so they need to catch up. clearly, 50 basis points is startling the market. you have seen reactions across all asset. this should not surprise us. they have been behind the curve. this will bring volatility. the end, it's not going to change their long-term outlook. dani: in the meantime, you have reduced your exposure in equities and you are keeping some cash. what opportunities are you looking for in this volatile environment to deploy that cash?

fabiana: yes, dani. so we are still overweight equities. also supported by, you know, significant growth outlook, until obviously inflation does not hurt it or a policy mistake. we are taking some money out and we are actually keeping it to take advantage of volatility. it is times like this where volatility really can be an opportunity. areas that we like are areas that have been left out in the last 12 months. we have seen it from a country standpoint, think about the u.s. versus the rest of the world. we like countries such as the u.k., for example. we like japan, where used to have very high earnings growth

-- where you still have very high earnings growth. in terms of sectors, we like infrastructure, as long as it is not [indiscernible] where revenues are actually on pace with inflation and balance sheets are solid. we like -- where we see valuations are very attractive at the moment. manus: let's just pause for a second. if we are an activist fed with a regime change in rates, we need to talk about where those big opportunities are and whether it is value to growth. we are down 1%, 1.25%. the question we have for you is, are you going to look for more opportunities in the value zone relative to growth? we've got in the gtv library. it is real rates relative to that value to growth proposition. where are the opportunities?

fabiana: we find more opportunities in value. you need to make sure that that value is supported by earnings. dani: ok, so i want to ask specifically on this, because you know, you want to avoid value traps. what do you make of european banks? this sector has perennially been the value trap. is there value in the sector? fabiana: there is less value than there used to be. financials have been, for us, across the world, a [indiscernible] sector over the last few months. we have started to take some money off the table and deployed it in areas where we saw that the price action has been particularly harsh or particularly discriminate -- indiscriminate. some tech, whether in asia or in the u.s. it is sector that we like, it is supported by the growth outlook,

it is not as attractive as it used to be. manus: we are going to get the gdp numbers, which are obviously very backward looking, for the united kingdom, an economy that has remained open. the central bank did shock the world with the de-risk of a 50 basis point hike. there were 4 people that voted for it. why do you see the u.k. as being one of the opportunities, i know it's on a relative valuation, but my gosh, i did not realize it was at a 50 year low in a relative sense. is it for the brave, or isn't it going to become consensus? -- is it going to become consensus? fabiana: you don't have to be to o brave. it is about the growth outlook, manus. it is not about inflation, it's not about rate hikes, as long as the growth outlook remains supportive, then earnings will do well. that's what you have to follow

as an equity investor. this is a case for a number of u.k. stocks, where the fundamentals are really not being reflected by the extremely low valuation. dani: it's ok to call yourself brave taking a call like that. you're going to stick around with us. fabiana fedeli, chief investment officer equities and multi-asset at m&g investments. we have markets digesting u.s. cpi that we have been discussing. but at the same time, earnings season well underway. we delve into equities to see where the earnings opportunities lie. that's next. this is bloomberg. ♪

♪ dani: welcome back to "bloomberg daybreak: europe." imf dani burger alongside manus cranny in dubai. we've had so many earnings interviews, executives we have talked to over the past few weeks and this question of cost,

inflation, that sort of pressure in the supply chain keeps coming up. a lot of people said those pressures are likely to abate. the evidence that it is abating is not there yet. if you're a company beating on sales yet missing on earnings-per-share, that is evidence that that gap is made up by cost pressures. in fact, if we measure margins by this way, it is the worst year, the worst corridor for margin pressure, according to bank of america, on record. their data goes back to 2012, but this just highlights the point that in europe, the stoxx 600, there is an issue with cost. with us is fabiana fedeli, chief investment officer of equities and multi-asset at m&g investments. how much of an issue is this, is the cost picture for european corporates? fabiana: this is the issue that you have to keep in mind when you are picking stocks at the moment. there will be a lot of companies that are going to be suffering from decreased pressures in

terms of wages -- increased pressures in terms of wages, supply chain bottlenecks, cost increases. there are a number of stocks in europe and emerging markets that are not keeping pace with the sales beats. we talked about the fact that we do like value. it needs to be supported by earnings. manus: exactly. fabiana, i found a fact of the day. look at this. big oil is pumping big cash. its free cash flow is the highest since 2008. are you long big oil? would you buy big oil? fabiana: manus, again, [indiscernible] we have started to take some money off the table. the fact that there is more free

cash flow and a lot of need for capex investment probably means that over the next future or near future, you'll see more of this money being deployed. that probably will appease some of the concerns. dani: fabianai, i just want to make sure, on the oil sector, it's not necessarily a story of fundamental you don't like it, it's just run as far as its can. fabiana:. yes this is not true for all of the companies. there are other opportunities in markets that are coming to the fore when you look at price action. it's simply a matter of where we find the best opportunities in the market. manus: the other major theme of the week has been around banks as well. net interest income, it's a road to heaven, one could say. that interest income is going to the moon, seven rate hikes now.

how do you disaggregate where you want to be long of banks or financials? how do you do that? fabiana: so, if you look at our exposure to financials, banks is one of the areas that we like but it's really selective from a regional standpoint. for example, in china, we are undergoing banks, overweight financials and banks in general across the rest of the world. would you like certain areas -- we do like certain areas, the insurance sector. the polarization we have seen in the markets gives us an opportunity in some banks. some have been overdone. we have decided to start to take some money off the table. dani: manus and i yesterday were talking to the head of global banking has socgen. he said they were expecting massive bonuses. he did give us the. when you are looking at these companies talking about massive bonuses, do you want to avoid

them, assuming the cost pressure that that in itself would invite? fabiana: you know, i don't think they are just talking about massive bonuses is going to make a financial company attractive are not attractive. it's really why those massive bonuses are coming about, what is the structure of earnings? i think there is more to that. the growth outlook, where yields are growing, and also credit demand. that's the key determinant for the banks. manus: ok. we will not ask you how massive the bonuses are at m&g. i can tell you what, dani burger -- fabiana: thank you. manus: are the bonus going to be big m&g -- big at m&g? fabiana: no comment. manus: she's learned. everybody has watched that socgen interview.

nobody is going to say massive bonuses again. dani: you tried, the. you tried. manus: thank you for being a good sport with us. that is fabiana fedeli, chief investment officer

♪ manus: good morning. i manus cranny in dubai. amit is "bloomberg daybreak: europe." dani: markets selloff as u.s. inflation hits a 40 year high, fueling bets on a faster fed hiking season. james bullard says he backs a full point increase by july. but not so fast. federal reserve officials not -- counsel against rushing to raise rates before their next scheduled policy meeting.

nor is their widespread support for a 50 basis point hike. and christine lagarde also warns that moving too fast to tighten policy would risk harming the european economy. manus, it is this one-two punch that markets have to grapple with. 7.5% coming in on inflation. james bullard saying 50 basis points makes sense and that used to be a time when the fed would be numeral, perhaps we should be in that time again. manus: back in 1994, we used to go to bed not really knowing whether the fed would hike rates. we did not know if they would have an inter-fed meeting that they did not tell us about. these are all a panoply of risks that could, i am simply saying could, come to bear on markets and will be talked about. one juncture, there is what bullard wants to see, 100 basis points by july. dani: i see you set me up for my fun fact of the day. you had the one on oil, so i

will take this one. if we go into the charts, look at the chances of an interim meeting move, as we look at the february fed fund futures. pricing in a move means we hike this month before the march meeting. at one point, we had a 30% chance priced in that indeed the fed would hike 25 basis points before march. manus: 12th, we will see whether that's -- manus: well, we will see whether that's a live risk or not. there was pushback on the idea that 50 basis points was the consensus. to the the markets. bond market vigilantism is absolutely emboldened. dani: equities are still trying to digest this news, or at least the moves in the bond market really dominating here, but equities pushing lower. because of that, we saw losses a more than 1%. for s&p 500 index cash trading

yesterday. the beating is happening in the long-duration tech equities and european stocks down nearly 1.4%, manus. manus: as we just heard from m&g , it is do not buy value at any cost, they quite like the banks. the dollar is supposed to rollover going into a rate hiking cycle. i will say that again, the dollar is not doing what it historically is supposed to have done. i put it to you that the dollar traders have become a little bit unseated that may be the fed might not flop on their ability to hike rates by seven times this year. brent rolls over. more talk that they could be more oil coming from the special petroleum reserve in america. futures are down. cash will open very shortly. the highest 10 year rate since 2019. more on the st. louis fed president, james bullard,

calling for hikes of a full percentage point by july as u.s. inflation surged by a whopping 7.5% a year in january, stoking the bets for faster fed hikes. antoine bouvet is the senior rates strategist at ing. were you as smart and fast as the other swaps traders out there? are you betting for seven rate hikes this year? if you haven't got the trade on, you are behind the curve. antoine: i will say i am behind the curve. for me, five hikes this year, which is pretty low compared to what the market is pricing. perhaps the market will price a bit more. this has become a very political issue and everybody is chipping in with their own forecast. i don't really see how you stop that runaway train. the only thing that will stop the runaway train is for the fed to get ahead of the curve, to hike rates a few times. dani: i really love what rbc wrote in a recent note. they said that current pricing

is close enough to hawkish extremes of likely outcomes that the risk reward of fading it is too attractive to pass up. would you also fade the move? antoine: i don't want to second guess. i feel where they are coming from. dani: diplomatic. antoine: it is very extreme pricing, i don't disagree with that. but like i said, it's a runaway train. we need to think of what code break front rates down. in the near term, i don't see what could do that. it is really not politically acceptable for fed members to downplay this inflation risk, given how political it's been. there for, there's very little standing in front of more hikes being priced in. manus: i've got to say, there is a whiff of panic in these markets. when you see the biggest one-day

move since 2009. a guest said it is 1994, where you go to bed and don't know what's going to happen. if we look at the explosion in rates in 1994, how much of a sense of panic do you think happened yesterday? antoine: i did check my phone this morning when i woke up to check if there was no -- manus: really? you picked up your phone to check there was no hike? it was that serious? antoine: that was the first thing i did this morning, check if there was no hike, just to be on the safe side. anyway -- dani: antoine. sorry, go ahead, tell us the bottom line. antoine: there is not a sense of panic, but the uncertainty factor in the markets has changed dramatically. i think a lot of people are considering their rates exposure.

they need to hedge that interest-rate risk. dani: it really is a remarkable environment we are living in. if you have to check your phone in the morning to see if we are hiking rates. you say there may be some organization to this selloff. at what point does that flip to panic, if not now? if we have to be on edge whether the fed is going to hike before a meeting? antoine: one of the -- we had in the rates market is that if the other markets are moving to a panic, safe haven [ indiscernible] if an extension of the stark market selloff that we saw yesterday continues, you can expect some stabilization. dani: hold that thought. we are going to get back to you in just a moment. that is antoine bouvet, senior rates strategist at ing. we have been talking about the u.s..

let's focus on europe and the recent selloff and european rates started leaking into the credit market. after a spike in yields, investors are repricing risk as the ecb turns hawkish. the big question is, how much further can spreads move before there is serious concern and credit? joining us to help us answer that question is chief european credit strategist at bloomberg intelligence. we've seen credit selling off for more than two months. help us contextualize this move, because it has been recently we have all of a sudden seen spreads widen. >> thanks for having me here. we have seen hide yields selloff by about 70 basis points just this month. very large moves by monthly standards using our bloomberg indices. just to contextualize that, it is less than half of what we saw in 2018 trade war, much smarter

than what we saw and covid -- smaller than what we saw in the covid. selloff if you normalize these moves by the underlying volatility, we are about two standard deviations. it does look like it is cheap but it is not three standard deviations yet. for that, we need about nine to 10 basis points more in this month and about 25 basis points more in high-yield. manus: it's interesting, martin malone expected another 100 basis points on investment grade and another 100 basis points on mortgages. good morning. good to have you with us. all eyes are on the march ecb meeting after christine lagarde, i suppose, set the cat amongst the risk pigeons. what do we expect from her speech? how could that impact credit? >> very important question because the ecb is a massive presence in european credit

markets, quite unlike the fed or the boe. why do i say that? because the ecb holds about 360 billion of bonds in their qe portfolio. the fed pales, there almost nonexistent in credit. the ecb last year but 70 -- bought 79 billion net in credit. that translates to about 96 billion, nearly 100 billion gross. this year, if you assume that the pandemic qe is going to end in q1, as they have already announced, the standard qe runs for the year, you're going to get about 36 billion that they are going to buy, assuming an 8% share of credit. if the ecb has to hike rates because of the rapid inflation we see in europe, they will have to stop qe before that, which

means you are not going to get the 36 billion on the chart. it's probably going to be a lot less than that, probably 20 to 24 billion which means there's more to go in the credit selloff. dani: thank you very much for joining us. that is our chief european credit strategist. let's get back to antoine bouvet , senior rates strategist at ing. when you look at what's happening with credit spreads starting to widen, is this the first sign of perhaps a debt major event occurring in europe? antoine: my answer is really [ indiscernible] i am actually just as concerned about what's happening in europe with what's happening in the u.s. not because they are going to hike anywhere near as much as the fed, but because it is such a paradigm shift in european bond markets to think that the ecb could hike.

even to think that it could [ indiscernible] it's really a shock. i don't have an answer to that question. i am urged to see that credit markets have done pretty well -- i am encouraged to see that credit markets have done pretty well. this is encouraging news. we do see the rates, for duration of the rising rates, [indiscernible] manus: money markets have got 27 basis points for september, labor day, and 52 basis points christmas in the european market. for our viewers, what is the most underpriced market? is it rates, btp spreads to bunds or is it credit? antoine: you are very right in pointing out the sort of second sector of the ecb tightening.

if you look at the curve and say 50 basis points of hike surprised this year [ indiscernible] it is only half of the picture. it is less than half of the picture. how do spreads react? [indiscernible] because of solid fundamentals and supply. i am a bit more worried about bull markets. i think the ecb's trading a fine line between trying to withdraw accommodation and trying to prevent a fragmentation of financial conditions in eurozone. i am really surprised that they think that they can stop [ indiscernible] dani: antoine, we cannot let you go without getting some concrete calls from you. give us the rate on the 10 year, u.s. 10 year and german bunds. where do they go this year, how

high? antoine: between a quarter percent, .5% for 10 year bunds. a spike to 200 basis points at some time this year and then go back to 150. manus: ok. come back. i suppose you just switch the phone off at night, and swung. dani: get some sleep. manus: listen, come back and speak to us soon. the rates strategist from ing. coming up, president bidens battle to enact his spending proposal to maintain control of his party in control of congress in the wake of surging inflation. that's disturbing cover on bloomberg. -- that's the story we covered on bloomberg. ♪

♪

manus: it is your friday edition of "bloomberg daybreak: europe." both breathing a sigh of relief. one man with a lot of pressure is joe biden. he faces an even bigger battle to enact his spending proposal to retain the party's control of congress in the wake of the january inflation report that showed the unexpected surge in the cost-of-living. it's real, at the kitchen tables, at the gas pump. bruce einhorn joins us. how does this. dislocate or threaten the biden agenda? bruce: well, president biden has not given up on trying to get pa ssed at least parts of his build back better bill that stalled in the senate last year. it's going to be a lot harder now because west virginia senator joe manchin, is a conservative democrat and

crucial 50th vote, has in the past pointed to inflation is one of the reasons he did not want to move ahead with the original proposal. he has already come out with comments following the latest inflation numbers saying that this just further reinforces his view that the government should not be spending huge amounts of money. so, it is unclear whether he will be on board for anything at this point. but president biden will be trying to argue that pushing through parts of build back better would help to control inflation. dani: well, assuming he runs again, which is an assumption, biden has some time to win voters. other democrats cannot say the same considering we are about to head into midterms.

what impact do these types of figures have on the midterm races? bruce: well, this is not whether democrats want to be going into the midterms. granted, the midterms are still a fair time away, they are in november. but we are getting closer to the point where voters really start to lock in their views. republicans are clearly going to take advantage or going to try to take advantage of these high inflation numbers and argue that the covid relief spending that came at the beginning of the biden administration, that that contributed to this. that's something that democrats are going to need to find an answer to. manus: bruce, thank you very much. bruce einhorn with the very latest on the threats to the biden agenda. elon musk's mission to mars. the space x founder says

he could launch starship next year. more on that story. this is bloomberg. ♪

♪ dani: welcome back to "bloomberg daybreak: europe." i am dani burger in london alongside manus cranny in dubai. let's take a look at some of the events we are following. at 10:30 a.m. u.k. time, the russian rate decision. consensus forecasts a 100 basis points rate hike. this morning, world leaders will gather at a summit in france to make commitments toward combating illegal fishing and reducing plastic pollution.

manus: at midday, we expect mexico industrial production data, likely rising by 2.5% in december from a year ago. 3:00 p.m. u.k. time, consumer data, university of michigan consumer sentiment. the inflation expectations for the economic effects and see whether they are rapidly fading the risk of recession. we've got bloomberg's power players summit kicking off today, bringing the leaders in sport to discuss the shift in the global sport business. dani: as it is friday, why not talk a little bit about space? space x founder hunan musk says u.s. regulators may grant environmental approval at the company's south texas site as soon month, which may pave the way for the luncheon starship. >> this was classicelon, the

big picture that life on earth will not be here forever and the time to add is now. he reimagined a life on mars or starship carries cargoes of people to another planet to establish a base. in terms of concrete news, there was not that much. is confident the faa will give environmental approval for starship to be able to launch potentially as soon as march. in terms of technology, the starship system could be ready to launch in a couple of months. elon: might be a few months when we are open. i feel, at this point, highly confident that we will get to orbit this year. >> in many ways, the presentation was just like 2019. elon was very heavy on the details. he went into the technology of the raptor engine. raptor engines are capable of 247 pounds of thrust, wants to get to 250 pounds. they are building them out the rate of almost one huge day. by next month, they will be

spitting out seven raptor engines every single week. a lot of questions around, how much will all of this cost? elon saying starship could cost less than $10 million a pop. elon: the lunches that have happened, the lower the total cost before we considered cost per flight would be. i am highly confident it would be less than $10 million. >> the big takeaway is that the next step for the starship program is an orbital test flight by the end of next year. it's dependent on a lot of things, the faa environmental approval, technology getting up to scratch, no other delays. elon musk was confident. he said by the end of next year, they could do a starship launch that they attempt to refill up in space. manus: i love those spacex events. let's have a look at gmm, the global market map. i think encapsulates.

you are on the rate, three standard deviation moves. take the rates narrative away. dani: thank you. look at that black box. on jim and -- gmm, a black box around something means it's at least eight two standard deviation move. the aussie to year yield is a 4 standard deviation move if we look at it on a five-year horizon. this always in reaction to the fed, yesterday, the bullard 50 basis point. is a global bond market move, manus. manus: there are a few of those markets which we know are closed, for example, in australia. . by the power of tv, there we go. we are going to updated. the dollar is moving higher, it's going contrary in, the only green box in the fx column is the dollar. the euro drops, the aussie collapses by 3/4 of 1%.

this market does not believe that this fed will flood. the dollar is rocking. the rest are dropping. dani: now we go into the weekend. that's it for us. we will continue to monitor it over the weekend how crazy these markets get. what other bets are being put on? european markets up next. ♪

began a joint military exercise near ukraine's border, thei

♪ anna: i'm anna edwards live on bloomberg. market selloff as u.s. inflation hits a 40-year high fueling the rumors on fed hikes. snot fast. federal reserve officials council against rushing to raise rates before their next scheduled policy meeting, nor is there