>> this is bloomberg daybreak: europe, i'm dani burger in london alongside manus cranny in dubai. these are the stories that such your agenda. manus: europe warns moscow faces new sanctions amid reports russian troops executed unarmed ukrainian civilians. a surge in cases prompts

curbs over shanghai. more warning signs that economic growth could slow. but hong kong tech shares feel in asia rally. good to be back with you. it is 16 days that have redefined feet economic narrative. the inversion shifts the narrative of stagflation from the edge of the curve, and global recession risk from the narrative to the tail risk. dani, good morning. dani: the leaders in europe are questioning what kind of landing we will have, the bond market telling us it will not be soft. also a complicated picture with the jobs numbers friday. 3.6%.

but also be strong employment numbers, does this mean the fed has carte blanche to do what it needs to do? manus: exactly, but here is the real debate. i'm not giving johnny ferris new show a plug, this is when the market last accused that that of a policy mistake. we moved by 60 basis points in less than 20 days. this is the trigger to potentially a repricing of the equity market. dani: let me get to today's equity market because repricing we are not seeing yet. has the market digested the reality of a pet that is going to perhaps start to dampen demand? we are looking at a

friday rally that continued somewhat in the european futures market. gains on the euro stoxx 600. but we are seeing weaker oil yet again. underperformance from nasdaq futures is notable because we are seeing china tech outperformed. we will get to that with juliette saly in a bit. manus: some pretty big calls are out there now. we have the narrative on the bond market, jp morgan talking about 55 basis points. the -- the yen is on the move. we have moved by 60% in the past 10 days. with brent we are seeing a small rally of a .2%.

the rest as we look at these horrific images from ukraine, the risk is up -- four sanctions from ukraine. gold is down by .4%. dani: let's talk about our top stories with reporters around the world. our european correspondent maria tadeo is in hungary. and our correspondent enda curran on the impact of the covid lockdown in china. and juliette saly in singapore on asian markets. manus: to russia first, it is facing further economic isolation as european governments debate more sanctions after the images from bucha showed mass graves with civilian casualties that ukraine is accusing russian troops of

committing during the retreat from the capital. maria, the international reaction to these graphic scenes out of ukraine over the weekend. it has been a harrowing weekend of images. maria: it is. and we have seen the pictures out of bucha as the ukrainian army entered the city. officials say they found more than 400 civilians dead. when you look at the allegations , a very serious, about execution, sexual violence and civilians targeted for no reason. ukraine has that we will pursue a case against russia. the united states says it will help them put together the evidence. this is happening right here in central europe on our away from where i am, and shaking the conscious upbeat political leaders in europe.

it will put pressure to trigger new sanctions after these horrible images from ukraine, it is back in berlin to decide what they will do. dani: if we do get new sanctions, how would that increase pressure on moscow? maria: before the pictures from bucha, european leaders were looking at small and targeted new sanctions, it was about closing the loopholes not about escalation on the economic front. but we have heard from a number of european leaders saying this is horrible. this has no place in european society, that this is a crime. the intention is to match with real words. it will come down to energy. do you get rid of russian energy

or not? for the time being, last we checked, there was no european majority to do this. it has proven difficult in countries like germany because of the economic repercussions. in hungary, where viktor orban one echo another majority. he said he is not going to cut the flow. it will not be easy on the energy front. but the thing that is left is energy. dani: that's bloomberg's maria tadeo in budapest. the world's biggest independent crew traders as oil prices -- crude trader said oil prices do not reflect russian supplies. has this announcement of u.s. crude release, we have seen oil

continue to fall, but is this the peak in oil prices? >> it looks like it. there are a couple of important caveats. we are now around $105, it was about $97 a barrel before the invasion. but there is a big risk now if more sanctions on russia. the west is pretty much self-sanctioning, the forecast is that russian exports will take a 1-3 million barrel a day hit. it is hard to forecast how much china and india will live.

-- will buy. the other caveat is the worsening outbreak in china. that is no doubt depressing prices by a few dollars a barrel. oil is settling around that area, but it comes with a caveat, dani. manus: a risk around this sp and the release. andrew janes on the latest with oil. for lockdown of the financial hub is intensifying. 25 million people in shanghai face restrictions. the numbers are gargantuan, our chief china correspondent, what is the risk, tesla is closed, take away.

enda: this is the biggest test of china zero covid policy since the pandemic began. shanghai under lockdown, it is home to an important manufacturing base and the all-important port as well. health officials are being sent in the 1000s. authorities are doubling down. it shows that china is struggling with containing omicron, and there are reports of a new subvariant spreading around as well. and this all adds into the idea that more pressure on the china a country that is struggling to hit 5% growth, they are facing.

-- they had to the supply chain has not been as large as one might expect. but nonetheless, a lot depends on whether they can -- in shanghai. dani: that is our chief asia economics correspondent. let's stick with that china story. stocks in hong kong rising this morning. concerns about delisting in the u.s. have started to ease. let's get to juliette in singapore, perhaps chinese companies are sharing more data with the u.s., what are the biggest movers we are seeing? juliette: we are hearing from china's securities regulator that it will allow the u.s. to look after the fear that a lot of these companies would be

delisted from the new york stock exchange. there was a rally in wall street on the back of this news. the hang seng is not quite at those levels, but up by 3.8% in the afternoon session. one of those companies that had that delisting fear. let's have a look at analysts who are saying we still need to see concrete data from china to backup. citigroup is saying that it does provide clearer guidance to companies. jeffries saying you could see companies and split off because it is unlikely china will give full access to auditors. it is not a game changer they say, we need further monitoring. things are looking more bullish on this next chart on the tech picture for hang seng. stocks have been hit hard for the 12 months passed, but projections are up 8% compared to six months ago.

i do have three bullish calls on the overall index, 83% of the stocks with a buy rating. manus: juliette saly with the latest on the markets. coming up, investors are gauging the appetite for a jumbo rate hike. this is bloomberg. ♪

>> we do not do anybody a favor by overheating the economy. when we overheat the economy, the chickens come home to roost

at some point as the inflation has to leave the system. i think this idea that we simply cheer on more and more employment without thinking about the inflationary consequences is like a doctor who celebrates the results of a prescription of their painkiller without thinking about what's going to come down the road. i think the fed too late has awakened to that, and is moving toward a strategy that is much more oriented towards tightening. dani: a waking too late, that is the former treasury sector larry summers reacting to the jobs report and the fed. investors were worrying about the fomc minutes, we have a 2's and 30's bond yield curve that has inverted for the first time

since 2006. the twos and tens have imparted yet again. -- inverted yet again. it is unusually fast before a pet hiking cycle. manus: always worrying on the first day back on the job. it is quite literally the fastest and aversion, 16 days to redefine the narrative. eric robertson is the head of global research and chief strategist at standard chartered. dani has an eloquent chart, i have got a fact of the day. it is a monster fact, the fastest inversion on record from when the fed began tightening rates. does that ring an alarm bell of any magnitude, and if so, what magnitude in your theories? eric: the flattening has been

going on since june last year. it has been going for quite a long period of time. but the speed of the move the last couple of months has been historical. it reflects the dramatic shift from the fed itself. they went from talking about maybe a couple of rate hikes, to all of a sudden talking about multiple 50 basis point rate hikes. the volatility in rates has all been at the front end of the yield curve. that has contributed to this flattening. dani: as you say, this has been well flagged. you have seen it on the horizon for some time. even though flattening might be expected, does this speed shock you, and is there any risk of a shock to markets? eric: the way i would frame the narrative is that this dramatic

change from the fed in terms of its willingness to hike rates aggressively is going to prompt questions about whether they are willing to tighten into an economic slowdown. that that is saying they think the economic outlook looks good. early warning signals from yield curves can be premature. but markets and a lot of the economic indicators we pay attention to will start flagging. the question is will be fed continue tightening simply because of inflation? manus: if they accelerate and deny the narrative, as they have been talking about 50 basis points rate hikes, we have gone from seven 25 point hikes, to know jumbo hikes. you have set the dollar supremacy will continue to

accelerate, is that your thesis on that context? eric: no, actually. we have been reluctant to embrace dollar strength the last couple months. we acknowledge that u.s. rates are moving into a more supportive framework for the dollar. what concerns us is both economically and geopolitically we are seeing a number of moves that i think will encourage investors and sovereign en tities to reconsider holding a large percentage of their portfolio in dollars. we will see a reappraisal of that willingness to hold the dollar. dani: i want to date into the de-dollarization story more. i want to come back to the economic scarring on the u.s. and global economy, something you mentioned in your notes.

as the market under appreciating this risk of scarring the economy? eric: we think it is. when russia invaded ukraine, we saw a surge in commodity prices and we have seen a surge in risk metrics and uncertainty, etc. even as markets have quote unquote recovered, when you have commodity prices and mortgage rates at these levels, there is going to be an element of demand disruption. in the more developed economies, there may be some resilience to that theme. but for a number of emerging economies that have just recovered from covid, their ability to support their domestic economies with fiscal support is constrained, and that worries us for the medium term. dani: more to date through, that is eric robertson head of global research and chief strategist at

standard chartered in the studio in dubai. we are going to dig into the broader fx story. we will get his calls next. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe, i'm dani burger in london with dani -- manus cranny in dubai. our guest was just saying we might have reached peak dollar, thinking the greenback was vulnerable. he prefers the aussie, kiwi and canadian dollar. back with us is eric robertson, head of global research at

standard chartered bank. when you think of the traditional haven assets like the dollar, you write that safe havens are not risk-free. in this environment, what is the new calculus to determine that insurance portion of a portfolio? eric: it's a theme we have been thinking and writing about quite a bit. in today's world, there are factors which are still supportive of things like equities and credit and the high-risk markets, but we think that considering the amount of uncertainty whether it is russia-ukraine, commodity prices , inflation, etc., you need to hold a higher percentage of risk-free assets in your portfolio. with inflation doing what it is doing, cash is probably not the right way to express that. things like gold, long-duration

assets in stable currencies like u.s. treasuries, china cgb's, these are good diversifiers to reduce the overall risk. manus: when you look at the meltdown we have had in bonds, it is the worst quarter on record, the velocity of a meltdown that i have not seen for a long time. we are starting another led lower -- leg lower. who is going to be the main thrust of the flow that picks up duration, is it going to be japanese investors, who storms in at these levels? eric: we do expect to start seeing some of that flow. i am less focused on where it comes from regionally. but more interested in the types of investors. interest -- insurance companies have a natural need to buy duration. and at some of the pensions and

sovereign wealth funds. at levels like today whether it is 2.5% in 10 and 30 year treasuries, 2.8% in chinese lon g-duration, more attractive levels. there is more volatility, and we don't know what the head is going to do, but at current market pricing, a lot of the damage made be [indiscernible] manus: it has been said that stagflation has moved to the belly and is no longer a tail risk. eric: global economic slowdown is a massive tail risk for us. manus: short and to the point, this just gets to come back. eric robertson, head of global research and chief strategist at standard chartered. our guest on daybreak euro. coming up, the u.n. says yemen's

factions have agreed to a truce. we will speak to the special envoy. right here on bloomberg. this is bloomberg. ♪

manus: is your monday addition of daybreak europe. with many -- manus cranny, that's me in dubai. dani: new sanctions amid reports russian troops executed on ukrainian civilians. chinese covid crisis deepens. they have locked down the

financial hub of shanghai. the inversion in the curve is flashing more signals about concerns on growth. it is a curve that has inverted for that two's and 10, our last guest saying the risk of an economic slowdown is massive. we are looking at this inverting, it has been called the slap that cannot be ignored. manus: and it is the speed with which it has done it, at 16 days has changed the narrative. the question is this, will they do a couple of jumbo hikes? there is a brilliant video. but here is my point. 50 basis point hikes, what will that do to volatility, what will that do to the overall risk construct? dani: our markets really

prepared, at least for stockmarkets, for what this pace of tightening will look like? manus: that will continue according to citi. this is the real yield, and this is the repricing of the real yield. the short end has moved with real velocity. careering back towards zero, but you have some distance to go. as long as we remain in negative real rates, you will stay positive in equities, that is the view. but if we turn to positive real rates, the mentality will be toast. dani: what does that do to long-duration assets and equities like tech? at least this morning, tech in the last 30 minutes pushing back into positive territory.

we are looking at a euro stoxx session in the futures which is up .3%, outperformance from the u.k. as oil prices creep ever so slightly higher. we also have u.s. stocks slightly higher after ending friday's session up by about .3%. manus: you've seen a small recovery in oil after the biggest collapse in dollars. the oil is coming back by .1% this morning. there is wariness around the sdr release because of concerns over refilling. there is the jp morgan note this morning saying ten's we- just had-standard chartered saying the duration gophers will

arrive, they will eat these out. -- eat these up. and gold is part of your backstop for volatility which will not disappear completely. dani: even so, safe havens are not risk-free, that is eric robertson. let's get to our top stories with the first word news. hi, jules. leaders have condemned moscow after multiple reports of unarmed civilians being executed in ukraine. bloomberg understand some european governments are pushing to impose sanctions in response, including closing loopholes. the hungarian prime minister viktor orban has clinched a

fourth consecutive term. they are trying to maintain a two thirds majority in parliament. the hungarian leader has had close ties with moscow and has challenged the eu democratic norms. china added more than 13,000 new covid cases, with nearly all of shanghai's 25 billion residents under some form of lockdown. it is the epicenter of the worst outbreak since the early days of the pandemic. there are reports of a new subtype of that. that was isolated from a patient with mild symptoms. soaring living costs are escalating a brewing political crisis. citizens across the island divide a sunday curfew. calling for the president to go due to soaring living costs.

global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. manus: jules, thank you very much. coming up, we have that u.n. saying gammons -- yemen's warring factions have agreed to a truce. we will speak to the u.s. special envoy.

dani: this is bloomberg daybreak: europe, i'm manus

cranny in dubai and a dani burger in london. yemen's warring factions have agreed to a two month truce starting on saturday. it has roiled of the oil exporting gulf. it comes as biden has ordered the release of 2 million barrels a day in an effort to ease oil price pressures. i am joined by the u.s. special envoy for yemen, tim, good to have you with us this morning. a two month truce has begun. how will we define a lasting end to the conflict? where the markers we should look for in the next two months for enduring peace? good morning. we seem to have a problem just for the moment. tim, can you hear us? we are going to get tim's sound

and we will revert to him in just a moment. the special reserve released by the biden administration, last week, i was with you on monday, and you have had this gargantuan drop in the price of oil. has it been coordinated in concert with the iea? dani: it means that according to many, in order to get a lasting drop in oil prices. i believe we have tim lenderking back with us. thanks for joining us this morning. manus was just asking you, two month truce, what does it take in order to get a longer-lasting piece?

tim: the main thing is this increase reflects great leadership from the united nations, and the international community which has really rallied behind this effort. i think the parties, saudi arabia, the houthis, and the yemen government all made hard decisions and compromised. this is a pivotal point for yemen. it gives the yemenis a break from seven years of conflict. it is a first step, there are a number of steps that have to happen as a result of the truce according to the terms. it's essential that the parties adhere to the terms. the united states will fully support this effort going forward. manus: some context for our viewers. saudi arabia ultimately wants a way out of this war.

how much pressure, how much leverage have the saudi's put on the u.s. to push with a diplomatic solution? tim: the saudi's do want an end to this conflict. they have absorbed more than 400 attacks in the last year. the cooties -- houthis have gotten strong on the ground militarily with support from the u.n., sorry from iran. the significance is be decisions made by all sides to reach this important development. going forward it's going to be essential that the parties adhere to the terms of injuries. they have responsibilities and have committed to them publicly. this is where the international community and the yemeni people need to hold their parties to account. dani: does it go so far --

yeah, go ahead, manus. manus: we seem to have lost vision with tim for the moment. are you still with us? tim: i am with you. manus: our apologies. dani, go ahead. dani: now that we have you clear in vision. doesn't go so far when you're looking at u.s. relations for the u.s. to give reassurance that should this brakes, that they have some form of defense? if there are more targets to u.s. oil sites in saudi? tim: the u.s. has provided strong assurances to saudi arabia and the uae, and indeed other gulf countries who could be targeted from yemen. i think those are very important assurances. they have been backed up by appropriate defensive military

sales. i think this should serve as a strong deterrent for further attacks from yemen. the main thing though is that this is an opportunity to turn the corner. on opportunity for yemen to turn the corner to a brighter said -- set of possibilities. that's what this pivotal moment is all about. manus: if we broaden the conversation, we've just seen the united states release a million barrels a day from the spr. many would say that is because of a lack of unity with the saudi, lack of unity with the uae, how unreliable, unresponsive and undependable are the saudi's and i'm iraqis now -- and the emiratis now as oil allies? tim: my foxhole is yemen, and i

am looking particularly at how that relationship dives with the saudi's and indeed with the e-minis with regards to this conflict. i do see a strong convergence between is that there is no military solution to this conflict. i think the more that point can be emphasized, to the yemeni parties, some of whom have continued to fight. manus: i appreciate that, the point being is that the emirati's and saudi's have a unique division in the oil market. will this step on yemen progress the oil discussion and narrative? tim: i think this step definitely solidifies even further the u.s. relationship with saudi arabia and the uae. i think that is an important dimension. we are also looking for responsibility from the yemeni parties. all in all, this is a positive, a strong positive for the

region. dani: thank you very much for joining us this morning, that is the u.s. special envoy for yemen. let's pivot to the u.k., today is the deadline for u.k. companies with more than 250 employees to disclose the gender pay gap. the statistics look bad yet again, especially in finance. joining us now is charlie wells to break down the numbers for us. first off, we know the numbers are bad, but has there been improvement? charlie: i'm going to be blunt, no. based on the data that has been turned in so far, men made a median 90 -- 9.5% more than women, but last year was 10%. but in 2017 the number was 9.2%, it has actually gotten worse. manus: charlie, you have done a leaders and like guards. -- and laggards, which banks

are the worst and which are the best? charlie: the financial sector is struggling. we looked at large investment banks in the u.k. to see how they stack up in 2020. what we found was that women made 56 pence for every pound that a man made at these large investment banks. and we found that hsbc was in the worst category. there is a gender average pay gap of 64%. one of the better performers was deutsche bank. that differential was about 32%. that seems better, but it is still 32%. we are going to see more data from 2021. we could see improvement. we could see that hsbc has improved a bit, but it is still over 50%. dani: how does the region stack up internationally?

charlie: i would say that the u.k. is in the lower half when we look at the oecd. we are outperforming the west, japan and korea. but we are the lowest in the eu average, we are at lower even than costa rica and romania, countries that do not even have disclosure requirements. one way that advocates say this could change is if the disclosure not only lets us know how bad things were, but also if companies say what they would do to address the gender pay gap. dani: really important numbers, that is our charlie wells. it is also u.k. fintech week, and a year since the u.k. review made recommendations for how to grow the sector. key players are looking to remit finance and -- that are looking to remake finance are gathering today in london. we will look at who has been at the financial summit with janine

hirt, at innovate finance, the u.k. fintech sector. we have just been talking about the gender pay gap which has gotten worse in the u.k. today feels like such a monumental hurdle to overcome, and whatever's we see -- whenever we see these numbers we talk about the incremental steps. what are we doing wrong, it almost feels like we're going backwards. janine: actually what we see in terms of entrepreneurs at fintechs in the u.k., we know that we have a world record amount of investment coming into the u.k., about 11.6 billion came in last year. but very little of that went into female founded companies. we need to be driving greater capital into some of these women-led businesses. we know that many of them are more resilient to crises and are more likely to have larger cash

reserves then mail-run ones as well. manus: i suppose if we go back a couple of years, the whole push to make london and u.k. eight tech hub --how do you think the revolution in terms of work styles in dubai-, they are literally opening the doors to the tech world-, and programmers. there is a global hustle isn't there. how big of a challenge is it to be that hub of innovation? janine: the pandemic really underlined how important technology is in all areas of our lives, particularly when it comes to financial services. i mentioned earlier, 11 point $6 billion of investment into our ecosystem in 2021.

that is second only behind the united states and ahead of the next six european countries. we also have one of the most proactive regulators within the u.k. and are setting examples that the world over are following within that space as well. dani: a lot of these company started in the u.k., but what incentives do we need to make sure they stay here, especially when companies mature to reach the ipo phase? janine: we need to see reform in terms of listing, and off the back of a review of fintech, we have seen some progress in reduction of the free float minimum, but we need to go even further. looking at our investors, taking sure we have the tax incentives to keep companies here. and most important, to fill that growth capital gap. there is a lot more that we can do around driving institutional investment in the u.k. as well.

manus: we started this conversation coming off of one of our reporters talking out of the pay gap. if you look at your world, tech companies the stat is 15% of those companies are founded by women in the u.k. but they get only about 9% of the capital and just read percent of venture capital goes to all-emailed teams read that -- goes to all-female teams. how do women get better access to more capital? janine: i think it is a mix of everything. we have to be looking at our ecosystem and the investors themselves, making sure they

have female representation within their decision-making team as well. we have to begin at all levels of an organization. we have to provide women with an opportunity to come in at any level of the industry. but also start out as a young age -- at a young age as well. we have a program educating younger children about financial services, because of the journey begins so early on. dani: when you look at fintech and women starting companies, minorities etc., it is embedded in the dna. but when you look beyond that fintech space with finance as a whole and these older institutions, can change really happened there? perhaps the dna of it is this old boys club? janine: it's a good question. it is our responsibility as an industry to really shine a light. part of a we are doing at u.k. fintech week is to look at those successes. to put some of the female

founders in the spotlight. also the mail and underrepresented founders. particularly for the u.k., china and all the achievements -- shine a light on all of the achievements. manus: janine hirt,, ceo of innovate finance, our guest this morning. tesla has delivered a record number of cars, 310,000 in what elon musk describes as a exceptionally difficult quarter. slightly edging out estimates. the past three month have been difficult for all automakers, but none more so than the battery dependent ones like tesla. how did muska frame the narrative of the past two months? >> tesla has had an exceptionally difficult quarter.

must himself said contending with a number of things, the growth of covid in china, on top of a chip supply issue that has been going on for more than a year, and logistical snarls, and raw material prices which have been rising. that has seen tesla raise the price of cars along with several other automakers in china. despite that, the numbers that were reported on saturday did edge out expectations. one analyst said as many as 25,000 units may have been pushed out of q1 and into q2 due to these logistical issues, too. this makes for a robust trajectory for the rest of 2022. quarterly deliveries are one of the most closely watched markers for tesla. it is seen as a marker for broader demand. it is something update when i go for tesla, especially with the

headwinds the company has been facing. dani: china and lockdowns there have had a huge impact for automakers and tesla, what is the current situation? >> paper film area with the matter said -- people familiar with the matter said china is going to be remaining shut on monday. it is not going to be reopening. this is an issue for tesla. china as one of their most important factories. china itself is the company's most important country after the u.s. when the shanghai factory will be up and running again, we are not quite sure. it is an extension of the factory shutdown that has been in place for about a week as shanghai puts a lot of its residents in some form of lockdown. but hopefully, they will get back online. that is something everyone is watching very closely. dani: that is katrina nicholas

in singapore. as we close up the hour, we continue to look at yields pushing higher and a carbon version that is not going anywhere. -- current version that is not going anywhere. this is bloomberg. ♪

dani: good morning and welcome to "bloomberg markets: europe." i am dani burger and mark cudmore joins me to take us through the market action this mormon. here are your top headlines. global outrage rose in europe as moscow -- reports that