anna: this is bloomberg daybreak, i am dani burger in london. these are the stories that set your agenda. manus: mounting pressure, the eu band coal imports from russia. u.s. congress turned the nation into a trade pariah. they won the fed may be behind

the cut, calling for rates at 3% or more this year. plus, the homestretch is france's presidential election, micron leads. this morning i give you a spread of the neutral race. stocks on the dove, the hawkish bulletin, .5 to 3.5%. good morning. dani: that debate is underway. you see this big selloff hitting the long end of the curve, 10-year falling back. manus: have we gone too far? have we taken the envelope and pushed it too far? that is the question. you see duration selling

ramp-up, i don't think there hugely divergent. you got -- you want to pick up 2.63%? you want 30 basis points? you see bank of america, yvette -- you can see yields up a 3%. i think there's this idea that the feds balance sheet runoff, the calculus for higher prices is behind it. look at the forward real rates, they are too high. dani: does the suggestion that things are over them. that bank of america point the it is worth hedging a 3% yield on the 10-year yield. there's a surprising demand dynamics, we are seeing a reset of long-term inflation expectation. manus: how does it play out market? the dollar hasn't message, the interest rate debt referendum.

oil around $100. you are seeing a shift in that dollars, there is a big call from j.p. morgan on commodities, up another 40%. oil, -- first back to back losses by near 2.6%. bank of america sought to .65%. i wonder what dollar-yen remains on its knees, or in put the bank of japan move on the yield target. that may have some heavy implications for the dollar-yen. dani: so far, the dollar-yen moves have been jawboning from the bank of japan. in asia, asia-pacific index down .1%. pretty flat on the day. steep losses and hong kong tech, due to regulation fears and some of the damage in u.s. type over interest-rate concerns.

here's your stock pickers, playing catch up to yesterday's gain in u.s. equities market which europe missed out on. when it comes u.s., similar to asia, basically flat to downward. another day, another futures session of underperformance, that growth picture, the growth concern is the fed starts to slam on the brakes, slowly creeping into equity markets. manus: the play muted on the equities front. reporters are standing by. the latest on the russian sanctions. stephen engels has the update. dani: kicking things off with ukraine, where in the wake of atrocities, the u.s. congress has voted overwhelmingly to strip russia of its trade status. ending imports of russia's gas, oil and coal. the u.s. -- bu has also agreed

to ban coal imports from russia. march the first move from europe targeting the energy industry. how -- >> the sanctions from the u.s. are bit symbolic. they are codifying things that president biden had already ordered through executive orders. it is significant that you had 100 senators vote for this. unanimity in the u.s. congress is a rare thing. almost all members of the house voted for it as well, there were three republicans who voted no. otherwise there was consensus. that does send a strong message. significantly, there are now 25% of the world's countries,

accounting for 50% of global gdp have now terminated trade relations with russia. since the start of this war. when it comes to energy, the real focus is on what the europeans are doing. we heard yesterday that europe is going to be banning the import of coal from russia, taking effect this summer. the question now is what happens with oil, gas. according to pullen's of the european commission is going to start working on that. working towards some sort of ban on those items. whether there will be consensus on the from the eu is a big question, countries like germany, austria, hungary depend on imported gas from russia. the third area to watch is japan. japan is likely to -- will try to reduce or eliminate its

imports of coal from russia. we heard today from the japanese trade minister, the prime minister is having a press conference a few hours from now. we are expecting he will be announcing additional sanctions them. manus: thank you. with the latest on the sanctions on russia. as most of the world -- world moves from through the pandemic, the lockdown is separate -- separating parents with children in shanghai. denying access to medical care, let's get to our north asia correspondent, stephen engle, he has the latest on one of the biggest crises present she has faced. the scale of unrest or pushback, could you give the world some context? stephen: just look at that footed you saw of the overpasses in shanghai.

it is a bustling metropolis, the most cosmopolitan city in china. the financial capital, second richest city after beijing. 25 million people. it is, dare i say, a bit of a ghost town right now. there no end in sight to the zero covid strategy, they are keeping the city in lockdown. 25 million people, if you are not lockdown in your home, you isolate it. everyone has been infected, was the close contacts. many of which, even those who test positive are asymptomatic are sent into isolation. patience is running thin. if you've ever been to shanghai, they marched to the beat of a different drum. they are a different breed, they are complaining, unlike in other places, there are a bit more vocal. i talked to people who are in their homes for now, going on

two weeks. they are saying we need to eat. they are screaming from the balconies. also, we want our freedom. as a dangerous slogan to be chanting and china. perhaps she's biggest domestic challenge since he took office in 2012. at that sentiment starts spreading to other cities, like this one in the north has been lockdown for nearly a month. wife they start pushing back? thank you for giving us updated on the latest in china. from china to france, or the first round of french presidential elections takes place this sunday. the gap between president macron and valerie -- marine le pen is narrowing. francine, described to us the current atmosphere with the first run approaching

considering -- >> the polls have narrowed quite significantly. still improbable that the pen becomes president, you see a lot of chatter about whether people are going to vote. we have a first round, 12 candidates on sunday. somebody gets more than 50%, they become president. if you have a full breakdown for the first round, emmanuel macron pulling around 27%, le pen at around 21.5%, the third place at 15%. let's put these three candidates and a possible runner-up in the second round. the second round is on the 24th. what is happening at the moment is that if you look at the margin of errors, if we did have a runoff, between macron and le

pen, it is unclear who would win. micron still has the advantage. marine le pen, this is a retread of 20, she was anti-europe, she readjusted her campaign this time. she is still very focused on anti-globalization and immigration. she seems to be tapping something that the french citizens want, which is being taken care of, especially with the rising cost of living. a lot of questions on how mccrone can -- micron can widen that lead, maybe focusing last on what is happening outside and more on what is happening in france. the election is now perking up. manus: thank you.

francine lacqua in paris. she will be impaired paris all weekend for the elections. she's got a great interview, francois cabau at 6:30 london time. dani: i got it from here. let's look at some the stocks are following. 12:00 -- that will be followed by brazil's latest inflation data, food prices likely mean that inflation rose in march. for south america's largest and economy. manus: 1:30 u.k. time, we are expecting canada to give the wholesale inventory -- at 5:00. coming up, we are going to talk markets, the fed,.

manus: dani: plus looking at the fallout in food prices caused by the imperfect -- invasion of ukraine. we should get those numbers later in the morning. this is bloomberg. ♪

>> i think it is appropriate we move our policy closer to a neutral position. i think we need to do it in a measured way. >> we are in the middle of adjusting monetary policy from our combative stance after covid towards a neutral setting by the end of the year, certainly early next year, depending on what the pace will be. >> this tailored will calculation his tongue as where

we should be under minimal assumptions, very generous assumptions, they are saying we should be 3.5%. we are actually only one third of 1%. you are too low by about 300 basis points. manus: weighing in on where they see the rate hike heading. those comments come after this week's fed meds, which bounced -- and then unsurprisingly dominating source -- of course is the senior officer, help preoccupied was he? thanks for joining us. we need to go 300 basis points, which is what bullard is calling for. do you think we need that level of rate hikes to quell inflation? if there is a debate about where

the neutral rate is. bullard 3.5%. your call? saed: right now, we actually went the market overall -- where inflation is, we want -- what the fed is talking about is normalizing rates norman -- relative to the transitory inflation cycle. we are at seven plus right now, the fed eventually targeting at 2%, this is contingent on what plays out in terms of the cycle. if we do see supply chain -- supply constraints that we could see the step back. we think we could go to 2.7%, going back to pre-covid levels and seeing what the transfer looks like. if we see it increasing inflation, that 3.5% number might be the fed's target.

we may see the fed move more aggressively. so long as we see -- don't see the inflation running away is of the fed will be comfortable. dani: you are still bullish on u.s. equities, even if we see an aggressive fed. what would you say to those who are less optimistic because we have the fed, who is prioritizing inflation over everything, including growth. they willing to sacrifice that growth story. what you say to that argument? saed: there's two points. if you are very bullish, it has to be based on underlying consumption. what we are seeing during this covid period is an underlying saving in the u.s. are strong, you have strong wage inflation, and the corporate side has made profit margins, they've been able to pass off the costs to the consumer. you still have a robust consumer

on that side, giving the trends in the inflation cycle, we expected to drop. i still think we are in this now -- growth in the u.s. remains robust. we could see a rebound in equities. manus: mortgage rates are 5%. there -- generations have never paid a 5% mortgage. you are still forever young. what is up -- to the dollar. with those -- leading into the rate differential story. saed: that isn't is clearly defined right now. we are looking at supply-side, we look fx for example, we look at the euro, because of ukraine

russia story and the french elections, we could see that tightening against the euro on the reef -- relief value on the french elections. if you look at the differentials, europe is much more susceptible due to the energy prices of ukraine and russia. overall, against the euro, i think we are looking -- for parity eventually over the next six months. at the same time, the other side of the equation is commodities, which are with the aussie, kiwi, the of copper, nickel, all this production side commodities are multitier highs.

-- multitier highs. if we see a further decline in the covid situation in china, if we see supply-side constraints, those are supported. the next big bold call on dollar parity. is the senior executive officer of arch capital. let's get to the first world news -- first word news. >> u.k. companies are raising starting salaries at the fastest pace on record. according to a regular survey by the treatment federation, marseilles sought new pay plan more. forcing labor shortages getting unprecedented bargaining power, with low employment. eu candidates into the space. ketanji brown jackson has been confirmed to the u.s. supreme court, making history as the

first black woman ever to join its ranks. jackson is a harvard law graduate, former public defender, she will join the top u.s. court when justice stephen breyer retires the summer. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: coming up, the virus continues to spread. china's covid policy comes under pressure with residents in cities under lockdown facing shortages. we have the story. this is bloomberg. ♪ is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe."

because of covid, chinese stocks have been underperforming the u.s.. this shows the trend of comparing the two indices, the csi 300 and s&p 500 continuing to decline. our best this hour, likes chinese stocks, he is senior executive officer at our capital. if you like china is a but also the u.s.. to what degree does this relationship normalize? saed: two issues, we see pull from chinese equities, the past two or three months, given the relationship between china and russia. there is outflow there, overall, it is stable, up a bit in china. what i see is we are valuing now, especially chinese tech stocks. what i keep thinking is we go past the space where china normalizes the covid situation,

i still think it takes more, chinese the place to be right now. manus: everybody came in a year ago and said by chinese bonds, that has compressed. the language being used is the state council -- the differentials of this is the tenure spread. if there's a shift in policy, would you be receptive to pick china out to the u.s.? saed: the thinking right now is different in the u.s. versus china, china is much more a planned economy, we are seeing chinese authorities move towards -- that would imply some sort of easing over the next few months, especially given the covid situation.

the other thing i want to point out, there is a shift in terms of viewing china as -- versus the dollar. with the u.s. weaponizing the dollar, especially with russia. it is a haven for that you on right now. -- or the you and right now. i think what you will see is -- china seeing further depreciation, by the same token, the u.s. is not the whole story, the eu moving forward. it is much more reactive towards the rate of inflation of the next few months. if we see appreciation rights, we could considerably say

flattening, we could see stocks rally again. manus: saed abukarsh senior, coming up, japan

manus: this is global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. mounting pressures of the eu -- the u.s. congress turns the nation into a trade pariah. sharply higher, bullard warns the fed may be behind the curve, wanting rates at 3% or more this

year. the home stretch of francis presidential erect -- election. micron's leader -- lead over the pen narrowing. one of for many is a supply shock to metals. at least that is the call from goldman sachs, who pointed to low inventory and copper. we have that across the middle space, the lme at their lowest inventory. with another short squeeze in the way. manus: it is a thing of beauty. almost picasso. these are the six main contracts , all of the language, sleepwalking towards a stock hike. drawdown on that -- this goes to a much broader application. which is inflation hedges are

rising, people are generally underway their exposure to commodities. because of the re-rating of commodity, within the overall portfolio. dani: did you see that call from j.p. morgan, basic commodity could rally another 40%. absolutely huge. let's look at what the equity markets are doing. i would not describe these moves. just flipping into the greens being led by china. we were talking about saed abukarsh -- two saed abukarsh. european equities ended lower yesterday, s&p 500 higher. u.s. futures treading water, underperformance in those small cap indexes. manus: a fact -- the dollar is

flat, but his the sixth consecutive quarter of gains. outwardly, remains bullish on the dollar. they expected to break against g7 currencies, the dollar parity in six month rent staggering around vote $100 mark. -- brent staggering around the $100 mark. wilma sealed in india, breaking 7%. the highest since 2019. goldman sachs sues inflation topping out around 4%, capital also seeing a return to 3.5% in inflation. those are the most recent calls. dani: let's get back to some of the european assets, which at

the moment are starting to take some of this heat from the first round of presidential elections in france. it is indicated the gap between present micron marine le pen has started to narrow. -- president micron and marine le pen has started to narrow. francine: i'm joined now by the senior, -- to game theory, we're seeing movements, improbable but not impossible for the pen to become president. her anti-globalization policies, i happen to be joined by -- england is overcast, i feel right at home. give a sense of what a le pen presidency could look like. it is improbable but not impossible.

her performance of the reforms. clark's one, -- we have another two rounds of parliamentary elections, -- le pen could be a bit under in terms of eu prices -- what she is pulling for is to [indiscernible] >> for an international audience, to reminders, with two rounds of presidential elections, you could have a runoff or present if she gets her, parliamentary elections does not support party, at the moment, what does she stand for?

as an economist, do you worry about the debt under president le pen? >> that is worrying. it would be breaking the trend, for micron -- should be able to -- there's a lot of confidence in that, where facing the conjuncture of european prices with russia and ukraine. >> forming economists point -- from an economists point of view, which does having donald what her presence he look like? she said she would find it by taking away aid to foreign aid -- that will not go far. >> has to be laid out clearly how she intends to finance --

[indiscernible] the whole structure, how this will reflect in the dynamic and market pricing is where that does vary. >> the other thing to remind everyone, depending on what happens sunday, you start another campaign in terms of debates and one candidate could do well or badly, how -- will the party change, will you be able to do more reforms? will the economy be and a better shape than how we find it? >> the key part here, by the parliamentary elections. for macron to when a second term, it is not quite clear, he would be --

present roll-on had -- i think it is all about the june elections. and how the political landscape comes out. depending on who is in charge of parliament, and they get support or not. it's a we have a lame-duck president, with the parliament not behind the reforms, what is a state of the french economy right now? >> i think it is pretty good. when you look at how [indiscernible] when you look at the dynamics, the dependency -- it is

performing -- underperforming. i think it is looking rather bright. >> inflation is a huge concern. there's a lot of others watching french tv, a lot of questions whether there is a rise in the far right with marine le pen, is it microns halt -- microns fault. >> i don't think so. i think -- and denied this election, the government will have again after the initial -- the future looks rather bright. i'm not concerned about the

economy, >> what are you concerned about? >> i think what we have right now, is difficult to project into -- a lot of uncertainty. at the bank will say next wednesday between le pen and macron, -- manus: we saw a lovely when it comes to friends yields in french bonds, this is when the ecb is willing to start normalized. what does it mean for french assets? >> beyond the covid -- [indiscernible]

francis perform -- poised to perform out, -- france is poised to perform well. otherwise, i think it should really cannot -- pan out. >> thank you, accept senior economist -- axa senior economist. manus: enjoy the weekend, we will catch up again monday morning. francine with the axa senior economist. we have an election special, it begins on the here on bloomberg tv. at 7:00 to 8:00 p.m.. that is 10:00 to buy time. -- dubai time.

but out saying they are going to take a 4 billion swedish kroner hit because of russia. that translates to just under $400 million. they say they have a total asset of $9 billion exposed to russia. i could beat materialized over the according -- coming year. our 12 month target on -- you are going to see more of these european companies beginning to deliver contacts around the russian exposure. dani: i wouldn't be surprised to see more like volvo, where they're trying to emphasize the small amount of their sales, in 2021, 3 percent of net sales were to russia. let's get to work other first word news with juliette saly in singapore. juliet: eu member states have agreed to and pull shipments

from russia. the u.s. and u.k. also barred most russian trucks and ships from entering the eu. congress voted overwhelmingly to strip russia of its trade status, putting in the same category as prize states such as north korea and cuba. poole has announced acquisition -- the french banks is their holding strengthens a solid relationship with italy's third-biggest longer -- third biggest lender. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts and more than 120 countries. this is bloomberg. manus: food prices, as we note, have been rocketing. they are at all-time highs this year.

that was before war broke out between two of the world's biggest food producers. russia's invasion of ukraine is threatening to amplify an already brewing food crisis. it could have huge global consequences. v.p. harris: when the price of anything goes up the consequences reach far beyond what you would expect. perhaps were small, when comes to food. -- most of all. in 2010, surging food prices helped launch the agents -- arab spring. once again, prices are rising, and fast. energy cuts, broken supply chains and surging demand have brought food to their first high since the arab spring. that is before a war between the two biggest food producers. ukraine is the breadbasket of europe.

they produce more than half of the world sunflower seeds and oil. with covid and rising energy prices, and refrigerating food is more expensive. fertilizer production is extremely energy intensive. prices rise even more. the pandemic revealed how complicated and fragile mobile trade systems are. global agriculture is more so. crops take months to grow and are vulnerable to unpredictability about the weather. rising food prices will be felt everywhere. the poorest countries in the world will be hit hardest. if these factors compounds of the real for her is that record high at will lead to record high and global food price consequence. dani: reporting on the food price crisis. how will rising food prices affect markets? go to mliv on your terminal. manus: coming up, bloomberg

quicktake, ets. how does it impact around the world. this is bloomberg. ♪

manus: it is "bloomberg daybreak: americas." -- europe .". there in instrument used by the central bank, they -- the bank of japan central-bank, they have been saddled with everything from popping up a market and boosting inflation to accelerating economic growth, improving corporate governance and include -- encouraging gender equality. joining us now is our etf and

out -- analyst. what would the impact be if the boj decided to unwind its purchases? >> that will bring huge questions markets of the market would not only drop by more than 5% of volatility would go up. the market has been so dependent on bank of japan, for instance, if it drops more than 2%, in the afternoon session, as we saw yesterday, bank of japan bought ¥70 billion. it is estimated the bank of japan has roughly 20% market share on the market. we are talking about 1.2 trillion u.s. dollars. there will be a domino effect of what would happen if they unwind from institutional to retail investors, it would have global impact. dani: i wonder when we have to

start preparing for changes in policy, gearing up for things like this. we have annexed boj officials saying the central bank is likely to address policy as soon as july. what more do we know? manus: the central banks -- >> the central banks could continue to increase bond purchase, stimulate the market artificially, the dj -- hf caps they currently have, we have a ¥12 trillion annual target. yesterday was the fifth purchase your today. it accounts for roughly 2%. they could reduce this to 6 trillion yen. they could change the products they buy. for instance, they could rotate into nikkei 400, which are price rated indices.

i'm not sure what they will do something to have a wide range of tools they can pick from. dani: thank you very much. backup from bloomberg intelligence on the boj and their etf stockpile. what he calls the finance jury and talk receipt. more on that in the crypto world next. this is bloomberg. ♪

dani: welcome back. i'm dani burger it, and london. manus cranny into by. billionaire thiel has called jimmy buffett, -- warren buffett, members of a finance

jury and receipt. joining us now to discuss is our crypto guide. we have the bitcoin conference in miami, which among other things, this huge electronic looking bowl that is supposed to be the future but -- bitcoin version of what's on wall street. what is going on with this and peter thiel's comments in miami? >> this is a conference where you get these people were extremely passionate about bitcoin. thiel is playing to that crowd. saying all you young people were in bitcoin, this is super exciting. people who are critical of it are just old, during talk receipt. -- jaron talk receipt. --gerentocracy.

he is a provocative guy sometimes, this is in line with things he will say. he was very critical of esg's. he was doing this to strip the crowd probably, say i am on your side with bitcoin, it's great. people at the bitcoin conference love to hear the bitcoin is great. manus: they want to hear $100,000 as well. $500,000 from mike know about, -- i fall into the age category. maybe i should buy some bitcoin. let's get on with it. we're going to see the trends. >> doesn't look eminent. they're having this conference, bitcoin is still stuck on 43,000. got to 48,000 at the end of

march. it's been mired in this range. some analysts are saying the on chain doubt it looked good, they are talking about -- smallholders are buying it, as a reserve, you have microstrategy buying. it hasn't quite translated to that higher price yet. the analysts are disconnected from the price action at this point. manus: a couple of running calls for miami could change the narrative. our crypto specialist. that's it for the week. a pretty volatile week. the market still trying to digest what is the momentum from the fed. where is the rate and have we had a breath of exhaustion in curve flattening and inversion? dani: it certainly seems like the curve steepen or -- we are

getting calls from barclays, the 10-year yield could go to 3%. they are going in -- recommending you going, jumping by, it is overdone on the bond market. that is it for us on daybreak: europe, markets: europe is up next. this is bloomberg. ♪

dani: good morning and welcome to "bloomberg markets: europe." the cash trade is less than an hour away. fed officials are out and forced again. bullard warns that the fed may be behind the curve, calling for rates above 3% this year or more. the eu bands of russian coal imports. the u.s. c