dani: this is bloomberg daybreak: europe. i'm dani burger in london alongside manus cranny in dubai. these are the stories that set your agenda. manus: the fed governor sees a speedy reduction in central bank balance sheets, sparking another run in global bonds. pmi collapse. china's worst covert outbreak since the start of the pandemic. spending and services to get

tech the plunge in global stocks. the g7 ramps up sanctions on russia. the eu plans to ban coal imports. the u.s. blocks russian investment. good morning. we are going to get a helluva velocity when it comes to qt. a very clear, prerecorded message from reinhardt. they are going to go it apace. anything up to $100 billion per month. dani: that would be double the piece that we had last time around. jay powell said, we are going to form a similar playbook to last time. brain already saying it's going to be faster and bigger. omar sharif saying that it could be up to 120 billion. i will up your call from deutsche bank. the balance sheet is twice the size as it was in 2014.

manus: of course. we did choke on $50 billion and had to go into rapid reversal. it's a very different economic scenario at the moment. my last guest said you had quantitative tightening. the deutsche bank note is phenomenal. big shout out to valerie who grabbed it. 3.3%. i'm going to be working forever. dani: we want you to work forever. manus: this scale in velocity -- no. no. you don't want me to work forever. we want to whiz through the cross asset check. there's a bond -- not tantrum. there's a repricing at the moment. repricing which is tolerable. the highest rates since 2015 in

the short end of the curve. i've been criticized already for calling it a volker style shock. it's a narrative. not necessarily fist -- 50 basis points but it's the narrative that is this volcker style shock. my max is flat at the moment as the eu didn't go out to the jugular from oil. dollar-yen is at a seven year low. policy divergence puts more pressure on the yen. dani: there you go. as the bond market tries to digest what a big runoff on the balance sheet will mean, so too is the equity market. has the equity market been too complacent? we saw selloffs yesterday. we don't know what the size will be. we are trying to pry something and. continuing to see at selloff --

see a selloff. 4/10 of 1%. s&p not doing as bad as tech. it's going to continue to be longer duration equities, highflying tech players that will take the brunt of the beating. tech down to tens of 1% compared to a flat s&p. manus: we will have cathie wood's on the tape again saying, great opportunity to load up. let's get to the team around the world. james maker with the latest data on the report. our correspondent on the fed. juliette saly with the markets in singapore. maria tadeo on the latest on the war in ukraine. dani: activity contracted sharply in march. covert outbreaks and the lockdowns. it's dealing on the world's second largest economy. let's get to james maker.

what's the outlook for the domestic economy going forward? how much of these lockdowns had scarring on global supply chains? james: yeah. the lockdowns are the most obvious. the one talking about -- everyone is talking about is shanghai. it's really struggling through the covert outbreak. these new lockdowns and restrictions have really undercut any kind of rebound you might have been seeing. shanghai is also in northeastern china. seems to be little outbreaks popping up everywhere. beijing over the weekend. even if they are not locked down, people are afraid to go out and travel. they might get caught in the lockdown. that's hitting the services

economy. it hasn't affected the industrial economy. shanghai and shenzhen, the local government is still doing their best to make sure that industrial companies and exporters can get their goods to port. really, the effect is being limited to the domestic economy. it's not great for china's. whatever growth they were hoping for, it has tightened by more than 5.5%. the domestic economy is going to be the weekly get any kind of hope for a chinese rebound this year. yeah. manus: where does this global recession emanate from? thank you very much. let's talk about the fed. the governor sending shockwaves through the markets when she said, the central bank will start policy reduction at a rapid pace as soon as next month. let's get to end the current

with his analytics on this. the significance of her latest message, we will go considerably more rapidly than previous cycles. a very brisk morning to the bond market. enda: as hawkish as you can get. brain already made it very clear that inflation is now paramount for the fed. interest rates are going to go up which has introduced an idea of a rapid shrinking of the balance sheet. that will be different to the last cycle. because the economy is stronger, she seeing conditions rely on a faster rundown of the bond sheets. interest rates going up. that will be of arab -- very powerful pencil on the economy. the kansas effect. it could go by 50 basis points as well as next meeting or

through the year. that's backing up the message from the top. jerome powell has made similar points. at all points towards, the fed is now very determined not just to catch up with the curve but to get ahead of the curve. they are deadly serious about the pace of interest rate hikes. they are going to move hard on the balance sheet. it's as hawkish as you can imagine. we will see some of that spill over to the rest of the emerging economy world as the weeks go by. dani: the question is, have you been to complacent? thank you so much. into the markets where china has reopened after a holiday. tech shares falling this morning. all that reflects what's been going on in u.s. markets, digesting the latest from brain already. let's get the latest on the market from juliette saly in singapore. asian markets, hong kong, china back open. a lot of spill over what's happening in the u.s.. juliette: absolutely.

the week read that you saw in china. the concern about the ongoing lockdowns and shanghai as we see rising covid cases there. all that contributing to weakness when we see the markets reopen although china is faring better than some others in the region. it's about weakness in the tech players following those hawkish comments, dampening the sentiment towards these growth shares. the hang seng down by 3.5% after we saw that 4.6% drop on the nasdaq golden dragon index. i wanted to point to one outlier. 220 9% rise in the hong kong session with its covid drug showing some pretty promising results in a trial. we've seen foreigners sell of the mainland chinese stocks to the tune of around $3.8 billion. that's the most in around two weeks. there's expectations that you could see sentiment term. local state media reporting that

pessimism in chinese markets may have peaked in the first quarter . a lot of expectation that you will see policy support. manus: thank you very much. let's get back to the latest on the war in ukraine. the u.s., eu, and g7 are core dating a fresh round of sanctions on moscow following the discovery of civilian murders and ukrainian towns. ukraine's president volodymyr zelenskyy has urged the u.s. to remove russia from the security counsel in order to stop it abusing its veto powers. >> either remove russia as the aggressor so it cannot block decisions regarding its own aggression, its own war, and the do everything we can to establish peace. manus: let's get to maria tadeo who has the latest take on this. this sanctions package, let's pause for a moment.

the eu has gone after coal but not oil and not gas. contextualize that for us. maria: yes. today, we are going to see these new sanctions kick in. the goal is to hurt and damage the russian economy after those terrible this -- pictures. this invasion is still ongoing. we are probably not seeing the end of it. when it comes to the european union, they have a new package. this would be the fifth package in a row against russia. the takeaway measure and potential to highlight is that they've gone after coal. this is the first time they tapped into russian energy. this is about 4 billion euros worth of efforts. they won't be able to sign new coal contracts. oil, which is the big moneymaker for the russian federation, and gas which is seen as the big

geopolitical weapon in this, have not been touched yet. we've seen that there is nothing that's taboo for the european union. they've gone into energy. when it comes to oil, gas, there was no expectation that they would be tapped yet. we know this is going to be a crescendo. they've gone for coal but there's a real debate about whether or not oil should be included in the next package. unfortunately, we haven't seen the end of this invasion and we will maybe see more pictures coming out of ukraine in towns that have been right -- occupied by the russian army. you heard from the ukrainian president zelenskyy, saying that he believes genocide was committed here and these are war crimes. dani: thank you very much. that's maria tadeo. coming up, we are going to be speaking to alexandria jackson about more market reaction. how do you pivot after a pivot from the fed to be more hawkish?

manus: commodities and currencies later in the show with kit juckes. 6:30 a.m. london time. let's see what she has to say. this is bloomberg. ♪

>> this is the markets readjustment. >> the inversion of the yield curve. >> the signal that we are facing some kind of significant slowdown. >> when the curve gets inverted. >> the economy is dried day but it may not be in the future. >> i'm impressed and surprised at how resilient equities have been. >> there's some greater risk of recession. >> is telling us one other

thing. >> there's a possibility that things continue on for another 24 months. >> it's too early to sound the alarm bell. >> the yield curve is discounting higher odds of a growth slow down next year. >> you are going to see the impact of the flatter curve on the broader economy. dani: some of our guest on the growing uncertainties as the fed starts its tightening cycle. i want to bring us some lines. polling coming in on the french election runoff. micron leading i 54% to 46%. he has a 26.5% in the election pull. of course, the first round of french elections starts this weekend. tune in on sunday. we will have an election special. all that coverage for you. manus: indeed. francine will be on the ground in paris for election coverage. let's pivot to our guest this morning.

that's alexandria jackson. the world wakes up this morning to a reappraisal of liquidity. the scale and the timing of quantitative tightening in the united states has a global impact on markets. what is the second round affect the u.k.? we are already in a tightening cycle in the u.k.. we've already started that. so extrapolate the velocity and volatility in the u.s. bond market and global bond market in the u.k.. good morning. alexandra: thanks for having me. we are more protective in u.k. midcap land, when the fed speaks. obviously, we can't avoid it entirely. investors will be watching very carefully what comes out of the fed today. we are looking for information about balance sheet actions. maybe if we get further indication on how aggressive the fed is likely to be, we have a good indication of that last

night, more plans about the balance sheet runoff. for me, what the fed means by the neutral level. as that relates to the u.k. a guess. as you say, the bank of england has already raised rates three times. we are already some way through that hiking cycle. markets are already getting quite comfortable with this. expectations for more hikes ahead. there's quite a hawkish vibe already in u.k. markets. we've had to contend with a lot of tightening headwinds already in the market. actually, stocks have been really resilient. dani: if the u.k. is a bit marshall to from qualitative tightening from the u.s., a place where the effect is amplified is energy costs. the spike of oil prices. we had basic resources and

higher yesterday. the immediate impact to rest and sanctions was for the sector to sell off. where does it go from here? are these stocks you want to be playing in right now? alexandra: yes. that's a good point. a lot of the sectors are why the u.k. has been very resilient on the top end of the u.k. markets. the ftse 100 has had a good performance during the first quarter. the big focus on energy. further sanctions, we have very little visibility on that at the moment and the impact that they have. analysts haven't started putting the downgrades through yet. i think this is why we see volumes quite low in the last couple days. maybe that changes today. we are thinking about these impacts over the medium-term. we don't want to be invested in these areas because they are more about harvesting short-term profits to us than sustainably investing for the longer term. i think a lot of times, ordinarily, you might think at this point in the cycle with

energy prices where they are, you would want to start buying those lower margin cyclical energy high operational gearing companies, financials. not this time. we need a bit more discrimination. there's a lot that's outside their control. there are issues with consumer spending which we will come onto. for me, that's not the area that i want to focus on. all of these things -- they will be attacks on to every spend. growth will likely slow. in that environment where growth is slow, i like to buy growth companies that are still able to produce some earnings growth. manus: the debate is whether the u.k. pivots into a recession. bloomberg economics things that there could be a technical recession with inflation running at 8%. are you a stagflationist? how do you prepare the portfolio? what are you doing?

what is your perception of stagflation and 2022 and how do you prepare for that? alexandra: yeah. it's more of the inflation side rather than the stack side. i do see some supports to growth. perhaps that recession risk is overdone. a lot of these headwinds are very well known now. we have very complicated geopolitical issues. we've got tightening. we do have support. momentum was decent before we came into this. labor markets and the u.k., very strong. covid receding quite nicely. for me, the recession risk is overstated. there are pockets where we are nervous. super spending for example. we wouldn't be buying into stocks exposed to big-ticket consumer discretionary spend. electricals, apparel, things like that. areas where we think we can outrun that is on the home

renovation side. housing transactions are still very elevated in the u.k.. typically, you see that that leads to more rmi spend. people start doing up their houses. that's a nice area in the u.k. where actually pricing pressures can be passed on because the demand is still so strong. dani: all right. thank you so much for joining us this morning. that's alexandria jackson. coming up, we get back to the central bank conversation once again. we've had currencies and commodity currencies with kit juckes. what has changed for him? that's the latest. that conversation at 6:30 a.m. london time. this is bloomberg. ♪

>> we>> have a very large balance sheet affecting the amount of accommodation in the economy. it will take thinking about both of those things as we come to our may meeting to decide what is the appropriate pace, the appropriate amount of policy decisions. >> there are people on wall street who say the fed is behind the curve and you have to go 50 because you are going to lose control of inflation if you don't. >> we know that this policy is as accommodative as at any time when we have inflation this high , labor markets this type. there's no question that policy has to be removed. you have to do that in the context of having negative real rates and thinking about how the is going to flow through the economy. we have to be very deliberate and intentional as we remove this accommodation. >> would you support 50 if that's what the majority wants to do? >> 50 basis points is going to

be an option. we will have to consider along with other things. i'm very focused on thinking about how the balance sheet moves in conjunction with policy rate increases. >> lael brainard said this morning that she expects the balance sheet to shrink more rapidly than in the previous recovery with significantly larger caps and a much shorter time to face and the maximum caps. does that summarize where the fed is going? >> i think when you compare their cycle to where we were the last time, we were reducing the balance sheet and we didn't go very far because of the need for reserves and the decision around that. when you look today at where the balance sheet is in the conditions in which we will be doing that, i think it easily argues for going faster and moving along at a quicker pace than we did before. we have a ways to go to get this accommodation now that the economy -- >> 100 billion sounds realistic?

>> i think we are still talking about what the right approach would be relative to last time. again, we are doing that in the context of looking at the size of the balance sheet and the conditions in the economy today which will likely warrant doing more and going faster than before. >> what is your anticipated impact of reducing the balance sheet in terms of a rough equivalent of basis points in a rate move? >> we often focus so much on the benefits going in in terms of how it pulls duration out of the market and boost asset values. i've been looking at some of the estimates that go all the way to 150 basis points, the effect of the balance sheet on longer-term rates. wherever that is, i think there's clearly going to be some adjustment that takes place. so then asset markets as well as long-term rates -- when i look at the yield curve, i'm looking at that issue relative to the balance sheet and what effect it's having on longer-term rights.

less so around the conversation about whether it's predicting a recession. dani: esther george saying she would support a 50 basis point hike. plenty more coming up on the show including a conversation with kit juckes. this is bloomber if you're a small business, there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose fiber solutions with speeds up to 10 gigs to the most small businesses. that's virtually everywhere we serve. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy.

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manus: this is bloomberg daybreak: europe. dani burger is in london. these are the stories that set the agenda. dani: the fed governor sees a fee reduction in the central bank balance sheet, working another route a bonds. pmi collapsed, to -- the worst covid outbreak ending and services. the g7 ramps up sanctions on

russia. the eu plans to ban coal imports. it's another day of the bond market on fire. saying that we are going to have a factor -- faster pace of cutie with 50 billion at the maximum. omar sharif says this time around could be as high as 120 billion. manus: esther george didn't balk when mike put it to her. could the cap be at $100 billion? when you look at the bond market, up by 16 basis points. is that the beginning of tacit acceptance that we are moving into something much more aggressive in terms of balance sheet reduction? last time around, 10 billion. the question is, at what level of cutie do you a 68 a bond

trader? it's metaphorical of course. dani: of course. as we get the fomc minutes later, we are going to get a grasp on how big it is and what that means for markets. let me show you how markets digested this so far. yesterday, esteem selloff in the u.s. equity market. you can see tech underperforming this morning ever so slightly, a slip into the green for s&p 500 futures. europe escapes the worst of the selloff yesterday. euro stoxx 50 down 3/10 of 1%. manus: list takeaways across the assets. 10 year bond yields could make it 3.3% by the end of the year. ozzie rates ramp this morning to the highest level in seven years. there's a depth charge in the bond market, not dissimilar to attention. let's see whether it's the

beginning of a tantrum or how much more there is to go. $102. the eu doesn't sanction oil. that gives oil a breath of relief. dollar-yen caused and interest-rate differential. the end is to the lowest in seven years. let's talk about the fed reserve governor. she is called to the task of reducing inflation pressures paramount. she said that the central bank will raise rates steadily while starting balance sheet reduction as soon as next month. let's see what kit juckes makes of this. was lael brainard's comments yesterday a volker style verbal shock for bonds? kit: good morning. it certainly was received as a shock.

it's pretty clear now that the fed sees inflation as the clear and present danger in front of it. everything that's happening other than that the threatens growth, we will deal with that when we really see how it's affecting the economy. the job numbers are good. the rate is strong. what we have in front of our noses is a big hard hammer and we are going to do exactly that. to answer your question about how far this goes, this goes until other markets react enough. the u.s. treasury always gets to sell bill bought -- big bonds. the money will come out of corporate bonds, mortgages. equities even. that's where it will come out of to go into the treasury market

so that we can fund the united states. when the pain is felt down there, that's when the net has been cracked. dani: it's a smorgasbord of metaphors this morning. what area is most one or up a? where will that pain be felt? kit: part of me wants to say the corporate bond market because that's where it happened last time. it could be the equity market because we've seen so much money flowing on the retail side. it could be that the dollar has another big spike higher before were done and that is in going to suit anybody. i'm not sure i can tell exactly where the biggest pain level is. i'm a fixed income die. i think it's the equity market.

manus: we will throw you a bone. we know you like a bit of excess -- fx as well. the other thing that caught our eye is the momentum. i will channel my inner tom king. real rates have spiked higher. when do we go to positive and where is the biggest ramification of positive real yield? kit: i think again, it probably isn't a line in the sand. it's a correction. inflation has been driving the real yield rather than the rate speed. that's of slowly killed -- fairly clear signal that money is getting tight. the question then will be, are we tightening mark -- money on the back of an inflation problem just as we are going to come into natural forces that slow

the economy quite a lot? how honors are they going to manage this stance so they avoid ending in a recession sometime in the next year or two? dani: do you see recession -- the recession? deutsche bank is the first bank to come out and say, we see other -- a recession in 2023. where would you put yourself among those figures? kit: can i go higher than 25? manus: we won't get commitment from you. kit: the yield curve doesn't predict recessions. i've been doing this since the early 1980's and every inversion has been followed by recession. it would take so much good fortune to have the kind of massive shock of global reopening after a pandemic followed by this shock from geopolitical crisis in ukraine,

to put these things together and look at them and think, we are going to dance through this and we aren't going to have two quarters of negative growth. we are going to need all the luck possible. the fed is dealing with such long and uncertain lags and trying to control two opposing forces at the same time. we are going to be lucky if we can avoid recession. i hope we do. manus: you are painting luck. it's a darned risky business. some people use their guts. china is slowing down. bloomberg saying 5% this year. commodity prices are spiraling ever higher. europe is facing a recession. if you look at the confidence of other tail risks, what is it that concerns you most that we are not talking enough about on bloomberg tv. kit: i think it is slightly more

mundane within that. we are moving into a world which we understand but don't think about too hard. where the gross inflation trade-off is not going to be as attractive. in the end, we have spent so long in the whatever it takes world where we have no underlying inflationary pressures. when we have a problem, we have to slow the economy. as soon as we see some regrowth, we can absolutely start easing monetary policy really aggressively. it's not the tightening cycle that bothers me in this one. what kind of -- kind of easing cycle can you have when you have persistent inflationary pressures for a while because we don't have the forces pushing the other way that we've had for the last 20 years. to me, that's more bothersome.

the fed is trying to do the right thing. the difficulty can be the longer-term one. will we have slower growth but can't really ease monetary policy aggressively? dani: it's a very mask -- macro risk. i'm wondering if you are struck by any more of these more esoteric risks. it feels like there are more air pockets in this market. if we are about to enter a time when the fed is draining even bloomberg -- more liquidity from the system, do you have any concerns there? kit: i have concerns about the level of liquidity in financial markets at the moment. when i came in this morning to see how much the treasury markets moved, which is the biggest, most liquid thing that's out there to trade, it does look as if it doesn't work terribly smoothly. we have the extreme things like what happened in the nickel market. through every market, even the

most liquid once, if you get a force, you are not finding a lot of enthusiastic buyers a few basis points back. i think it's a dangerous thing. manus: we are running out of time. do you think we are in some kind of risk parity? i'm trying to understand. it rings alarm bells. kit: we are in a position where people sell, you are getting a bigger move than you think a market would warmly create. -- normally create for a bunch of reasons. that, we need to watch. we need markets to operate and cooperate properly. that's the bit that i have to

wake up and think, i will do with it soon. dani: feel free to join us again and have your third cup of coffee. happy to hear from you. i'm sure he's now heading off to get his fourth cup of coffee for the day. let's get to the first word news. juliette: hey. the u.s., u.k., and australia say they are working on developing hypersonic question -- weapons as part of their security pack. the partners will also look to deepen defense cooperation in areas such as electronic warfare and artificial intelligence. hypersonic weapons technology has already been deployed by russia in ukraine. london's investment bank is struggling to shrink the gender pay gap with women making up less than 1/5 of top earners. according to the latest u.k. government data, 13.5% of the top earners were female.

that was up slightly from the previous year. that proportion is worse than the 20.5% across the broader finance industry. sri lanka's president has revoked emergency rules within days of imposing it. this as the escalating political crisis makes it tougher for the country to secure a financial bailout from the imf. the emergency gave the government sweeping powers to detain protesters and seize property. the move added to mounting calls from lawmakers to the president to step down. elon musk has refiled the disclosure of his treated -- twitter state. the change comes after the tesla ceo took a seat on the company's board. he originally filed his 9% stake with the u.s. regulator as passive. the platform says it's too soon to start the internal testing on an edit function, something it says is the most requested feature by users.

global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. manus: i voted yes. we all know why. i do typos. ok. dani: you're perfect. manus: nobody's perfect. a paragon of virtue, that's me. what if we got? china's covid search hitting the world's second law -- largest economy. we delve deeper into the covid shutdown in china. this is bloomberg. ♪

dani: welcome back. i'm dani burger in london. manus cranny in dubai. activity in china services sector contracted sharply in march and that's adding to the

evidence of the blow that covid lockdowns are dealing to the world second largest economy. eric to. we have a 5.5% target when it comes to the chinese economy. will they be able to reach that, given that lockdowns are adding on more pressure? eric: yeah. it's going to be interesting. [inaudible] the situation is still developing by chartered standard. [inaudible] the demand for it will be quite

substantial. it's probably the worst situation. on the other hand, the domestic way isn't looking good. the ukraine more -- war is on the outlook. [inaudible] china's export have been performing quite well. now, it will be moderating more. of course, the policy needs to step up. [inaudible]

manus: thank you very much. the very latest on the closed down and covid policy, the impact on the economy in china. of course, we just had some polls this morning in terms of macron. he leads 54% to 46%. the very latest. we also have an energy crunch. the war in ukraine. oil and gas prices. france is relying on nuclear for 70% of its needs. they had to the polls this reached -- weekend. annual micron has been accused of not doing enough to support the nuclear industry to reach the climate goals for the country.

carolyn corner mixes through the french energy mix. >> a nuclear plant on the bank of the river, 70 miles south of paris. this is one of 56 nuclear reactors in service in france, providing 70% of the country's electricity needs. that's compared to just three reactors in germany whose future is uncertain due to the war in ukraine. the french energy mix has hardly changed in the president emmanual macron will soon enact its closing. for his rivals in the election, it's not too late. >> emmanuel macron's zigzagging energy policy is leading us straight into the wall. >> others even talk about dismantling some wind turbine plans. >> wind turbines cost a fortune.

we subsidize them all the time. it's a real political, economic scam. >> the french climate lobby has slammed macron's green credentials. it's the only eu country that couldn't reach its target in 2020. after years of silence, macron has announced the building of many reactors at the end of last year. february, she wants to launch 14 new major epr's, estimated to cost tens of billions of euros. >> you need to pick up the thread of the great adventure in france. pdf will build and operate the new reactors. this national company will be able to count on the support of

the state. >> the green candidate is taking the opposite view, proposing that france exit nuclear in 20 years. >> as we deploy renewable energy and as energy savings programs take effect, we will shut down the oldest and most dangerous nuclear reactors. >> more nuclear or more renewables? the old debate has read it -- reemerged as a big polarizer in the french presidential campaign. bloomberg news, paris. dani: that was the latest from france as the french people had to the polls this sunday, the first round of elections. energy at the top of the agenda. francine lacqua would be here for a special on sunday. coming up, we continue with the energy story. the g7 ramping up sanctions on russia. au you banning coal imports in the u.s. rocking blessed -- russian investment.

that next. this is bloomberg. ♪

manus: manus: manus: it's daybreak europe. dani burger in london. europe is taking a big gamble as it moves to ban russian coal. leaving it vulnerable to shortages and blackouts. russia is europe's top supplier of coal. joining us now is our energy reporter stephen stapczynski. the coal markets around the world, how are they reacting? this is 45% of europe's coal needs. this is a big step. stephen: this is a big step. and i talked to the traders, it's a step that folks weren't expecting until those reports of atrocities were coming out. we've seen prices really jump in

europe. they jumped more than 10% yesterday. you are seeing a knock on effect in asia. they jumped about five or 6% here in north asia. the reason being that when you cut out russia, there's going to be more competition between europe and asia to capture the little bit of spare capacity there is in that market. dani: thank you very much. that's our entity -- energy reporter in singapore. continue to see a reaction and bond markets. aussie 10 year yield of 10 basis points. what does a faster qt really mean? manus: exactly. what will the scale and pace be? $105 billion per month. there to make says they are going to do 9 trillion to 10 trillion in the space of a year. it has sent to death -- depth charge across markets.

deutsche bank says 3.3% by the end of the year on tenure paper. dani: exactly. it's interesting what was said about what this means to have this lack of liquidity in the system. that's it for us. bloomberg markets europe up next. this is bloomberg. ♪

anna: good morning. welcome to bloomberg markets europe. mark cudmore joins us from singapore to take us through the market action this hour. cash trades less than an hour away. feds beaks spark of selloff. the hawkish tone sends global bonds tumbling. g7 ramps up sanctions on russia. the eu plans to ban coal