♪ >> this is bloomberg daybreak middle east. our top stories this morning, president biden imposes sanctions on russia over the ukraine as western nations role that kyiv could fall. --one that kick in fall. >> he has much larger ambitions

than ukraine. he wants to establish the former soviet union. >> european union leaders have backed a broad sanctions package that will limit russ says actions to financial technologies. -- russia's action. >> the european union stance united. tonight, european leaders were fully aligned in condemning the atrocious and unprovoked attacks. now, we have to meet the moment. we will hold the kremlin accountable. >> european gas prices soar and brent remains above $100 per barrel. crude to crime to 130. in the meantime, middle east markets slumped yesterday. might they see a bounce in today's session following a late rally on wall street? 8 a.m. in dubai. it is firmly about the tensions vis-a-vis it russia and the ukraine. the new set of sanctions

muddying the water for risk appetite. here is the state of play on the s&p 500 clearly lower at the moment about to fits of 1%. overnight we were up significantly on most u.s. stocks. they fix with a 40 point to print. christopher waller spoken he talked about this half percentage point rate increase that we justified in march of this economic data comes in hot. as a result, global yields rising with the rate hike outlook coming back into focus. u.s. says 18580 one. bloomberg dollar index after a big spike to the upside, coming a little it under pressure by a for the 1%. the dollar and key may appear to be good candidates in the near term, according to markets live team backed up by the central banks on a tightening path. in a flight to haven. brent crude at $1.82. look, goldman sachs seeing the riskier of oil hitting 100 35 dollars on her bond and russia sanctions. i want to put the board and get to it important chart as we

think about commodities, think about the agriculture spike in prices. meet sort --wheat soared and adds to inflation anxiety broadly. this index captures the big moves we've been seeing some of the sock commodities. another highlight here on the gold side, this is basically gold at the highest level in 17 months. goldman sachs see is a further spike to an all-time high of $2330 an ounce if etf's that 5 billion surge come in with 600 times because of concerns over u.s. growth, so rotation on the risky assets, that is still in his early stages and goals could be uniquely positioned to absorb some of these those. i want to get is a breaking news here. just crossing the bloomberg, basically you've got ukraine saying that russian rockets have been fired at kith. the ukrainian capital of kyiv.

laches moments ago, you understand that russian forces have been outside of the kyiv area and out of here is that they have made another move toward the capital as we look at live images from the center of the city. no guidance on damage of the moment. the keep a very close eye on this is the story develops. i want to get back to some of the prospective and color in global markets. we are the details from asia jules, how is it looking? jewels: is looking ok, but of course it is going to see whether those headlights you just proved there will play into the afternoon session. we were seeing relative, and asian stocks, rising the most begotten son the regional benchmark it is november 2020 lows. this is perhaps suggesting that traders have put all their short-term stocks in the and are not willing to take in any more selling or exposure ahead of the weekend. we've been seeing weakness in the hang seng index related to

hsbc, you can see tech players looking good considering that rebound that we saw on the nasdaq single or which was one of the worst performing markets yesterday in the region, a rebound morgan stanley thank you intention could raise the premier for china and taiwan like in japan and singapore. seeing yields rise suggesting that the appetite for the haven on government bonds is not what we saw yesterday. let's put the board, the other key major story is china adding liquidity in terms of short-term liquidity. the pboc injecting 290 billion yuan, $46 billion for its set the date repo agreement. that is the most since september 2020. we do that this push comes towards the end of the month. but like yusuf is saying, this is suggesting that the pboc is going to continue on that easing cycle. yousef: we will see how that plays out. thank you for the analysis. that is juliette saly there. president biden has imposed

strict sanctions over the invasion of ukraine. western regions state kith could fall. meanwhile sanctions would limit access to the european financial sector and restrict key technologies. >> we've cut off russia's largest bank, bank that holds more than one third of russia's banking assets by itself. cut it off from the u.s. financial system. and today, we are also blocking for more major banks. that means every asset they have in america will be frozen. >> the european union stance united. tonight, european leaders were fully aligned in condemning the atrocious and unprovoked attacks . now, we have to meet the moment. we will hold the kremlin accountable. yousef: let's get the latest with bloomberg's jack fitzpatrick. he joins us from washington. jack, what has the reaction been to the announcement by the president from capitol hill and other corners of the domestic

u.s. political conversation? jack: there is a little bit of a wait and see response to this. it was pretty notable that the president said when he was pressed on further sanctions, including possibly sanctioning put in himself, let's wait. yousef: all right, looks like they had some technical issues there. let's see if we can get that resolved. jack fitzpatrick there. let's stay with the theme though because european energy prices have soared, prompting western governments to vowel further sanctions to punish moscow. you got the folks at ray style energy warning crude prices could surged $130 per barrel. we are joined by energy supported stephen in singapore. stephen, what are you seeing in terms of the fundamentals of his market? stephen: i think really the big thing to look at the moment is you have to see where our oil prices are going and you saw a

pretty large job yesterday because of the fear that russia would be disrupted. there would be a disruption. fundamentally speaking, we are short. there is not enough will in the market. there is not enough supply to meet up with the demand rising. having disruption because of this conflict will only cause more issues going forward. now, will opec-plus be able to pump more? will eliminate commitment? with the usb live pump more? that is what joe biden is hoping, but the fact of the matter is short. there are strong extensions on russia's energy companies -- strong sanctions on russia's energy companies. they supply and demand situation is not looking good and it is pushing for luge environment going forward. hundred $20 barrel range. yousef: was on natural gas prices soar in asia in europe, but it was a sigh of relief by many investors in this trade

after president biden decided not to include energy or natural gas specifically in this latest set of sanctions. how enduring is that relief going to be? there is still going to be very much on edge? jack: you are absolutely right. you might see relief in crisis, a bit of a job, but the fact of the matter is if there is escalation of tension in the ukraine, potentially, there could be more sanctions. is not over, the situation is ongoing. that risk premium is going to exist. there is a fear that there could be more sanctions. at the same time, maybe russia has -- could curb supplies to some. they said they would not do that, but everything is on the table. when you're talking about a market that just like oil is also titrated natural gas is tight. restocking inventories after a cold january and february, you could still see that risk. you could still see prices surge

if there is any disruption. and that is what we're are really worried about. yousef: thank you for that. that is stephen and singapore with some perspective on what is happening in the energy markets printer want to get back to jack fitzpatrick in washington. we have patched up the line again. apologies for that. in terms of picking up where we left off, in terms of yes, another set of sanctions. but now as we get these news lines that kith, the capital of the ukrainian, is being targeted -- kyiv, the capital of ukraine is being targeted by russian officials, can we get another set of sanctions today and what could big bet has not been included already? jack: from the u.s. side, the president has laid out a timeline that indicates we are not want to see another shoe drop immediately. he was pressed on further sanctions at a press conference today, asked why we did not already see sanctions targeting vladimir putin personally. and he said let's wait one month or so and see how this goes. and he said that fully

understanding that this really and truly was a full-fledged assault on the ukraine and not limited to the eastern portions of the country. we have not heard yet really a clear cry from congress, indicating that they would statutorily walk back -- yousef: right, we will leave it there, jack. just not catching a break today, that is jack fitzpatrick in washington. i want to get to a quick check on the russian ruble. that is moving somewhat after news of these missiles apparently being filed -- fired into the ukrainian capital. this is according to the ukrainian side of the story, so this is not been independently verified. but there has been quite a bit of reporting on that at the moment. the russian ruble there at 84. 57 against the u.s. dollar. that is a move in one day. let's get to the first word headlines from around the world. some of the other stories we are

watching. juliet has those from singapore. juliet: use of russia's invasion is complicating efforts to of five to revive the nuclear deal. with tensions at moscow and washington at risk of spilling over. ireland has been imported facilitator of the discussions at the yuan secured counsel. talks in a holding pattern with iran's negotiator returning to negotiate with leaders. canada is lifting emergency powers enacted more than one week ago to get active vaccine mandate protests under control. prime minister justin trudeau says the unprecedented authority is no longer needed. he invoked to the powers earlier this month after hundreds of trucks blockaded the downtown area of ottawa and keyport are crossing to the united states. hong kong's covid cases continue to climb with nearly 9000 infections reported. and 50 debts. the city has made a rapid decline in bloomberg's resilience rating which tracks

the best and worst places to be during the pan day that's the pandemic and is now second the last among 53 locations. the pace of covid-19 shots in the united states has plummeted to the lowest level since the start of the vaccination campaign. the seven day average of doses administered fell to around 338,000 last week compared to about 3.5 million at the peak of the rollout. it's the latest time -- sign that the nation may be nearing maximum uptake. about 65% of the u.s. population has received a primary course of covid shots. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. yousef: thank you for that. let's get you a bit of a snapshot of what else is to come on this program. we get news from the capital about the ukraine conflict in the gulf region. next we get perspective on how people are reacting. we are going to k2 asset

management's george for boris with changes you need to be making to your portfolio. this is bloomberg.

♪ >> what we've seen in this escalation is a rise uncertainty. that means a rising risk. >> we have this invasion that is not going to help consumer confidence. >> markets are pricing a big slowdown and positioning has become quite negative. >> china is going to be a safe haven, because they are going to continue to produce, growth and interest rates are going down in china. >> i'm not sure this completely takes the fed off the table. >> barring a turn in the economy, i think it is appropriate to move the funds up in march. >> it is time to normalize policy. >> policy is primed to return to a normalized stance. >> will have to see if this

ukrainian situation changes the narrative and time will tell. >> the cooling of rate hikes in the cycle should and will be in our view a lot more muted. >> the ball down the middle in terms of surprises. yousef: market watch and fed officials reacting to russia's invasion of the ukraine and economic applications. the risk off was followed by a dip buying rebound. lingering investor caution, but haven't paring losses in the last few minutes. let's bring in george, head of research at k2 asset management. help us make some sense of these market moves, because you have reports of missiles flying into kyiv area and that is by any stretch of the imagination and escalation in this conflict. how do you allocate in a situation like this? global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. --george: as a firm manager and generally broadly in the west it is hard to reconcile the logic of what russia is doing. it is doing it and approaching

the capital. let's look at a basics and that is corporate balance sheets, credit conditions in the western world. economic momentum has been slow, but they are quite robust. that is why policy is flagged. starting and priced into the market. the headwinds is where the concern is. buying future earnings and equities, they are going to be impacted by the high rate cycle that has been placed in. but obviously, major political events, sanctions, gdp, all things being equal global late and current concern of confidence notwithstanding, while the effects of the corporate household level are pretty much a generation of highs. so we propose two opposing factors and as we work through this charging policy. yousef: with that backdrop, we also heard from scott miner from guggenheim partners. here is what he wrote in a tweet. as history demonstrates, the beginning of war often leads to short-term market volatility,

but quickly provides phenomenal buying opportunities. look to use of current market does locations to add to risk position in select crediting -- credit security's and cheap stocks. there are you making those additions, george? george: yeah, so, markets, that can handle earnings pricing in a higher interest rate cycle in the developed world. europe notwithstanding for obvious reasons, the german economy has got more risk on cost input from energy than say france does because it's got more domestic cast -- cash. about markets, southeast asia, australia, north america is the place to be. within that, the rate cycle and the beginning of a rate hike cycle traditionally is no good for commodities red across the board. for metals, more cyclical metals, commodity and energy. we are going into the pre-rate early state cycle. financials tend to benefit as well in that stage. that is the equity play. let's pivot, investment grade

corporate credit. they have very good conditions. past two years, that is supposed to be. beware of divergent risk, high yield emerging markets, that is where the damage will be in the year ahead. yousef: straight to the point. i like that, george. we saw treasuries raise earlier gains when christopher waller spoke of a 50 bit move in early march. it was still fully an option as far as he was concerned if economic data comes in hot. how do you sort of structure the trade around that? and more importantly, are you in agreement with sort of a frontloaded approach by the fed? george: yeah, i would like to see more measured approach at 25. we love to see it two or three to get to 225 or two and a half. the slower pace. we did not want to see anything that resembles 1990 or. the rates going from fed 1994 to

march 95, going from 3% to six. frontloaded creates pain and i just put it too much to be economy. conditions are good, work with it. communicate with the market, they want a real great for fed funds at zero. two and a half seems reasonable in the next 24 to 36 months. let's get there it a steady fashion. notwithstanding, many notable people are making it clear to process depends, managers in the market that 50 was a possibility. with the geopolitical, one would think just being cautious on the sentiment headwinds, just start at 24, start your qt and let's get going from there. the market can handle a u.s. tenure at 225 of the slowing of absolute economic conditions where they are, they are robust but slowing. yousef: i look at some of the overnight index swaps and what i am seeing is a 14% chance of a 50 bit move coming early march. the question remains, after it maybe we kind of sale through sort of the first half of the year, there is that prospect of

stagflation is really real in europe. and it is going to be real in the united states. where can i find a place to kind of protect myself from what could be a new shop to the market? a reality check. george: yeah, cyclical equities and again some industrial, they are commodity producers. gold as a hedge, people discuss crypto. let's put that aside and just as a statement, high quality infrastructure, load your assets or diversified mixed-use property in the western world is a good inflation hedge that has control on those rents going forward. mixes for key. unloaded quickly across traditional hedges, as were getting inflation risk. notwithstanding again, second half of this year, it is possible but hardly improbable the way the index works to get a 7% year on year cpr print.

given the way it did basket works. again, inflation risks, but seven, 8% second half of the year does not seem probable to with the index works. there are issues there and again, we can single out in a developer of the german equality, we will have to do with margin pressure from energy . it's chosen gas is a transitional fuel for 20 transitional for the requirements, that was a lot of burden on that economy, all things being equal and that is why the french earnings at target a single them out as a diversified. yousef: george, great catching up. he has the head of a performance at k2 asset management. i want to circle back from the headlines they dislocations in this part of the world, in the middle east, where we saw the hex getting absolutely smacked down 3.6 percent, dropping for a third day. the move was the biggest since falling 4.8% on march 18, 2020. heavyweight commercial

international bank and tripping the most of the indexes decline you have development in egypt, they had a large drop as well, about 10.6%. you can see the pain extended to the rest of the perimeter including turkey with losses of 8.2% in the exchange. there was a story of just about 2% declines. dubai exposed of course because of its integration into the global economy via tourism, logistics and trade. sort of capital flows coming under pressure as well. i want to get to the reserve bank of new zealand now, because they are sticking with the rate hike course, even as the ukraine crisis complicates the outlook for central-bank officials. the governor has weighed in and told bloomberg that the tensions in eastern europe only add to the upside risks for inflation. >> in terms of early considerations, they are all in terms of the economic applications based on the very short-term and more medium-term. all on the ration of supply being constrained, these large

rises we have seen in commodity prices and hence feeding through into general consumer price inflation. they are all upward. and so, we feel certainly the reserve bank convinced that we need to do more to contain inflation here. and he is one-off cross process is added to the risk of a dutch inflation expectations giving way. >> what about the risk that this surge in oil prices does not just dive back down? i think a lot of people that were expecting out into we saw a russia actually attack ukraine. i this looks like it is not going away in a matter of days. in that case, if new zealand consumers and businesses are facing higher energy costs, is there some risk that you might have to look at the other direction? saying we do what have an aggressive rate hike path, but maybe we have to slow it down of it, clip off a bit for now?

adiran: there is the ups and downs. i think the most important thing is the relative price shock is exactly that. it is the price for a good relative to other goods and services. and that is the reflective relative scarcity when it comes to the oil side, with all of the supply constraints that are artificially put on. a level of prices have obviously been a forward-looking. and the actual activities that we are seeing in europe today were being very pressed into markets. whilst the oil price labels may remain high, it is unlikely they are going to keep rising for -- forever. eventually they fall out of the consumer price inflation measure and it is of nothing. we had no influence with monetary policy around active mineral price. so on one part, you have the inflation excitation components of the price rise, but also, real incomes were households.

negatively impacted. costing and more to go about your business, your scarce income is being used on higher oil prices. so there is a balancing effect over the medium term for risk. yousef: the reserve bank of new zealand governor adrian at speaking to bloomberg. i want to get to a story that caught my eye. it is going to be critical at the open as well for investors. that is around saudi arabia's largest bank. bloomberg scooped, it appears that they are working on an ambitious plan to gift this lender a global footprint through a major overseas acquisitions pay. this is according to people familiar with the matter. basically, what we understand is that wall street advisory firms have already started pitching opportunities ranging from takeover to credit suisse to approach some of the emerging markets vocus standard chartered. dbs holdings apparently has been suggested as well. basically with the goal of forming a national champion with

a global footprint. 4080 2 billion dollars lender. we will see how stocks both in switzerland and saudi arabia. i want of that the board and get to some of the equity action in the futures market specifically. yo at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity. it can power hundreds of devices with three times the bandwidth. so your growing wifi needs will be met. supersonic wifi only from us... xfinity. switching wireless carriers is easy with xfinity. just lean on our helpful switch squad to help you save with xfinity mobile. they can help break up with your current carrier for you and transfer your info to your new phone. giving you a fast and easy experience that can save you hundreds a year on your wireless bill.

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yousef: this is "bloomberg daybreak middle east." president biden has promised stiff sanctions on russia over its invasion of the ukraine. >> he has much larger ambitions than ukraine. he wants to in fact reestablish the former soviet union. yousef: eu leaders have also backed abroad sanctions on russia. >> the european union stands united.

tonight, european leaders were fully aligned in condemning the atrocious and unprovoked attacks . now we have to meet the moment. we will hold the kremlin accountable. yousef: european gas prices soar and rent remains above $100 a barrel. a european agency warns crude could climb to $130. want to check back in on the markets and how they have evolved in the last 25 minutes. juliette saly has all the key numbers from our singapore studios. juliette: an uneasy calm after we had that slump, markets falling to 2020 lows. you did have the benchmark index having its biggest gain in a week at about 1%. some of the markets that were hit hardest in yesterday's session, you look at the likes of india, really leaving the rebound today.

we also had the pboc adding liquidity into the market to try to bring some calm. that is also boosting the yuan, which is among the front runners, but you still see the yen beating quietly today, a different story than what you see with other the -- with some of the other safe havens. australia's 10 year up by a most eight basis points, a very different story than what we were seeing yesterday when we saw the yield fall by some 11 basis points on australia's 10-year note. yousef: very steep roller coaster. morgan highlighting how the ukraine issues might play out

more broadly. juliette: they say it will really raise the risk of markets in taiwan due to geopolitical tensions. very much reflected in what we saw yesterday that i was talking about, that 4.7% shock you saw. japan, australia, singapore, the brokerage's preferred areas to buy on weakness. they say you should watch the less aggressive pricing. they have turned a little less bullish versus growth compared to before. that's really going to boost the singapore market, which was one of the best front runners in terms of global markets up until that big selloff we saw yesterday. yousef: thank you very much for that massively insightful round of. let's get to the impact of russia's invasion of ukraine

rippling across global markets and complicating a web of global alliances as the region is in the crosshairs. you had an energy price surge in particular. let's start with the gulf. what has reaction been from leaders so far? >> it has been slow. we have seen a couple of statements come in calling for some sort of progress to be made, cease-fire and the like in ukraine, but there have not been all of the countries that have put these out, so this really underscores just how important russia is as a player in this region diplomatically with of the investments we have seen by russia in the gulf region and also russia's role in opec-plus. the one place that had put out a really strong statement was kuwait, and i have it here for you. kuwait rejecting the use or display of force and emphasizing the importance of respecting

ukraine's independence and sovereignty. i wonder if this is kuwait not thinking back to 30 years ago when it faced its own invasion. qatar has once again sort of gone to adopting its mediating role. the foreign minister calling the foreign minister of ukraine and russia yesterday, also speaking to the white house, and we have seen the state department reach out to the uae and saudi arabia. are they pressuring those countries ahead of the next opec meeting to potentially boost production? right now, we are just not hearing a lot on these folks. -- from these folks. yousef: there appears to be a growing consensus that this could derail a return to the agreement that seemed just days away. simone: yeah, it is certainly

something under consideration. while russia and the united states have increasingly been squabbling over ukraine, russia and the united states have still managed to be at the negotiating table together talking about the iran nuclear deal, but does this change now that we have seen the situation escalates so dramatically? iran, for its part, seems to be walking a fine line, the foreign minister tweeting yesterday that while the ukraine invasion was the result of nato provocation, also saying that they cease fire should be the way forward, that this is a situation that should be resolved politically and diplomatically and not with force. we will see how this goes, but certainly, it did seem like we were so close to seeing a deal finally come to fruition after 10 months, and then it was sort of ripped away from us. one thing to think about as well, though, is it iranian crude were to come back to the market, that might push down the oil price. that might be something western

powers would want, but we will see if that is enough to really get them over the finish line. yousef: then turkish stocks tumbling more than 8% yesterday. the biggest move since late 2021, so it has not been that long since we saw something on the kind of and already of scale, but why is the impact they so substantial? simone: yeah, and, frankly, what stood out to me was also what we saw in the turkish lira, weakening to the lowest levels we saw since mid december when we saw what appeared to be an escalating currency crisis. there are some obvious things in play from an economic standpoint. the geopolitical discussion is a little more complex, but from the economic view, food and energy prices rising would add to that picture, so that is something that is concerning. also, we reported at bloomberg

that the state-run banks were actually in the market trying to intervene to keep the lira from weakening further and in fact sold $3.5 billion in an attempt to try to support the lira. clearly they are not being entirely successful given the weakness we have seen in that currency. su: --yousef: thanks very much for that round up. let's get to the situation in ukraine. governor christopher waller has packed a 50 basis point hike in march if economic data keeps coming in hot. what could that mean for middle east markets? let's ask the managing director of the fixed income management owner calm capital. you talk about the potential for a fed policy misstep. what is the conversation with clients like?

>> obviously, the more variables the fed has to deal with, the more chances there are they get something wrong, and unfortunately, the number of variables and unknowns they are dealing with keeps on growing. this ukrainian situation adding to the things they have to look at. we keep talking about base effect and the fact that second half base effect will be lower, but base effect are important as far as prices are concerned, but i think when you look at wages, there's potential for inflation to really start seeping in, and that is something the fed is going to keep an eye on. we believe that the rate hikes are probably about four or five this year, and you will continue that into next year, maybe a little bit more hawkish than some of our colleagues, but we are concerned about that. yousef: what cases are you making to your strategy in the gulf with fixed income at the moment? time to get defensive?

it seems counterintuitive with oil prices above $100 a barrel. that is usually a tailwind. >> i think in terms of credit quality and credit risk, it is time to get a little bit defensive. i think it is easier to hedge interest rate risk than it is to hedge credit risk. for us, longer-term data solidly trading in the mid to hundreds on a hedge basis makes sense. on the high-yield side, some of it makes sense with oil where it is right now. some of the other names we are looking at, we are a little bit more concerned about egypt in the near term because clearly it is impacted from a global risk off trade. the good thing about this region with oil as high as it is is the liquidity, which will obviously ease the refinancing pressures on some of the corporate stunts the region.

yousef: we are at $100 a barrel, and it seemed a year ago that was quite a stratospheric projection. now places are coming out talking about 100 $20, $130 a barrel. >> i think if we get that kind of spike and that kind of volatility, then sort of that stagflation threat really becomes real again because i think that's going to be pretty gross and negative for global economies, and i think inflation obviously is still going to be around, particularly if you have the ukraine crisis, which will probably feel secure, food price inflation also. you eventually have a chance for stagflation becoming a bigger issue and potentially could lead to more of a risk of type environment than you already have globally. obviously in a region, it will

continue to be a safe haven protected by the higher oil prices and the better credit quality, but i think global risk will become a big factor at that point. yousef: you mentioned you were concerned about egypt. i wonder how much resilience has been built because of concerns on the energy balance, the energy risks. they have limited now withdrawals maybe in anticipation of the pain that may come. >> i think they are from an external point of your definitely in a better place than they were a few years ago, especially on the energy side, but i think they will probably have to tackle high inflation, particularly food price inflation, so i think there is the potential for raises or local interest raises has increased. originally, we thought august was the first one, but i think we might get something sooner than that, but externally, i agree they are probably in a decent position, and the long

end of the curve is giving you not only 11% in dollars, which is clearly quite attractive, but i think i'll it to libby will remain high as long as ukraine is in the news. yousef: you think -- i think volatility will remain high as long as ukraine is in the news. yousef: ok, and what about any other calls in the region? >> i think, like i said, generally higher grade stuff. we are obviously more comfortable with the real estate sector given where liquidity is now, but the fact is there's not a lot of new issuance, and there is probably not going to be a lot of new issuance in the region compared to the last couple of years. we are thinking 20%, 25% lower than the last couple of years, so opportunities are going to be limited, but i think we are

happy staying right now defensive generally. yousef: great having you back in the studio for a change. so much more to come. this is bloomberg. ♪

president biden: we cut off rusher's largest bank, a bank that holds for the 1/3 of russia's financial assets by itself -- we cut it off. >> we of course will use britain's position in every international forum to condemn the onslaught against ukraine. >> which is a political decision to add an additional package of mass sanctions, which will be painful for the russian regime. >> never tolerate any attempt to change the status quo. we will tighten sanctions and defend solidarity with the international communities. >> a choice -- a deliberate choice -- was taken consciously by president putin to launch a war. >> we will continue on a mission to squeeze russia from the global economy piece by piece, day by day, and week by week.

>> now we have to meet the moment. we will hold the kremlin accountable. >> we are not going to harm the world economy system we are a part of as long as we are a part of it. i believe our partners have to understand it and not aim to push us out of the system. yousef: world leaders reacting to the invasion from russia of ukraine. president biden imposing stiff sanctions on russia. we understand, of course, that russian tanks, troops, and aircraft are pushing close to kyiv and that the fighting is ongoing. no updates, though, on casualties or how close to the center of the city russian troops are at this point or what their plans are, for that matter, but a quiet center of kiev that we're looking at this moment. with that in mind, let's turn to

middle eastern stocks because they were not spared this selloff. our equities expert has more on this. where do we see most of the pressure, and what are you hearing from investors? >> this will not surprise you, the market most under pressure in the region was egypt, which was heavily penalized during a moment of volatility in global markets. we also saw some witness across the gulf names, such as saudi arabia, dubai, abu dhabi with the impact in abu dhabi being a little more admitted. brent is trading at 100, but the issue is inflationary pressure that could seep into the economy, and that was what was worrying investors. you just saw some profit taking, if you will, yesterday. yousef: saudi aramco, meanwhile, hit another record for the third day in a row. it is putting quite a bit of

distance between itself and other members of the index. energy prices driving most of those gains? >> exactly. of course, brent trading over $100 is a key factor, but one thing to remember -- that aramco has not reported earnings yet. if anything, that is causing all this reaction hitting record high after record high with expectations aramco could start paying higher dividends to minority shareholders. this has been a discussion that has been on the table since aramco listed. with its price soaring, the yield has been coming down, so it continues to be more attractive for foreign investors in this could be an option on the table. yousef: absolutely with an indicated growth yield of 3.4%. finally, kuwait is planning reforms including pushing some companies to list. what are the details? >> absolutely.

the ceo told me a bunch of different reforms that the exchange is working on, they plan to add derivatives and futures products such as single stock and index futures. he said that is coming soon as well as a central counterparty service for the cash market and once that is established, you can expect derivatives products to start coming into the kuwaiti stock exchange, but really, what is super interesting is that they expect saudi-owned businesses and government entities to start listing soon, which, as you know, kuwait has missed that little bit on the ipo rush we have seen in the gulf, so this will be really exciting when we have more and more markets in the middle east with deeper breadth, and we will be on top of that reporting, i'm sure. yousef: absolutely. thank you.

much more ahead. this is bloomberg. ♪

yousef: eurasia group says regime change will happen in ukraine on the basis of the invasion we have seen in russia. >> let's be clear -- the americans, the europeans, the nato allies are not going to put

boots on the ground to defend ukraine. they are not a nato member. they do not have a membership action plan. the ukrainians are brave. they will fight for their homeland. they will be overwhelmed. i don't know if it is a week or 4 weeks. the ukrainian government will be in exile or dare i say it, worse. it looks to me like this is not a partition. it looks to me like it is the entirety of ukraine on the basis of the bombing we have seen already from russia, which even includes the far of ukraine, which is, frankly, overwhelmingly catholic, ukrainian speaking, no historical background with russia. no one would make that argument, and yet, they are engaged in military strikes there. the question is -- what are the implications of that? what are the costs? what does it mean for russia and nato relations going forward? this is an incredibly dangerous

thing for them to be doing, and also how far they go beyond ukraine. i should mention to you by the way that there are russian separatists from a breakaway republic in moldova who made their way to moscow a couple of days ago asking if putin would recognize their independence. they did not go without being ordered to do so by putin. the belarusians are painting their constitution on february 28. it will no longer be neutral. it will no longer be non-nuclear. will the russians incorporate belarus into the empire? it seems likely at this point. these are truly world changing events we are watching on a daily basis right now. >> this morning's reporting suggests vladimir putin has much bigger plans, to the point that you are now making. we are hearing reports of shelling in areas to the south that are still controlled by kyiv. they are actually hearing concussions in the capital city. how far does this go?

does vladimir putin want to control all of ukraine? >> yes, i think it is clear. it is true that the russian government has said they don't want to occupy ukraine, but they also said they did not want to invade ukraine for the last four weeks. they lied. there is nothing diplomatically that should be believed about the russian position right now. you do not set 200,000 troops up and a mastec kind of firepower and then use it against a sovereign ukrainian nation whose only sin is to want to exist independently, whose only sin is democracy and the right to vote for their own government. you don't deploy that kind of force and risk not just tens of thousands of ukrainian lives, which will be lost, but also russian soldiers who will come home to russia in caskets. you don't do that unless you intend to overthrow this government. this is, for the foreseeable future, the end of an independent ukraine. yousef: ian bremmer speaking

earlier. we are seeing european equity futures move over the last few hours and that is still very much the case. many were down by half of 1%, off the lows of the hour. we understand the escalation has now taken place towards kyiv in terms of russian troops resuming their attack. it is not clear how much damage has been done or how close to the city center they are. also keep an eye on for the wider conversation or what we might get from the fed is something the market has to grapple with apart from the geopolitical risk, especially after the commentary. let's look at the board and take you to the energy side of the equation. quite a few notes out overnight. basically, you got the folks at goldman sachs seeing the risk of oil hitting $125 because the iranian deal might not work out as expected.

brent pushing back past $100 a barrel. we were as high as $105 and a few cents a barrel. cryptocurrency is also making a bit of a bounce back. this is bloomberg. ♪

yousef: this is "daybreak: middle east." our top stories this morning. manus: western nations warned that kyiv could fall. pres. biden: he has much larger ambitions than ukraine. he wants to infect fact reestablish the former soviet union. yousef: eu leaders have backed abroad