tv Bloomberg Daybreak Europe Bloomberg April 14, 2022 1:00am-2:00am EDT
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♪ dani: this is "bloomberg daybreak: europe." i am dani burger in london alongside manus cranny. these are the stories that set your agenda. manus: passing on the course as cpi surges more than ever, amazon plans on inflation levy. president xi plans to stick with the covid zero policy amid public anger over lockdowns.
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markets ready for a trick down or pop? the bank -- jp morgan's results are marred by a $500 million loss tied to the work. goldman and morgan stanley hit the tape today. ericsson's numbers are hitting the tape. close margins, they are narrowing. this is on the big gear maker in the telecom sector. margins slipped to 42.3. operationally, it is a big, big miss, 4.8 billion and the market have penciled in 6.44. that is a monster miss. dani: it really is. net sales did beat ever so slightly, 55.1. the estimate was for 53.6. it is that thinning of margins which is really hitting ericsson, getting to that operating profit, which has missed estimates. 6.4, coming in 4.8 alien krona.
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-- billion krona. manus: we will return to ericsson later. we've got the ceo coming up. he will speak to the team about the results, about the numbers in about an hour. he will join anna and the team. what's going on in the bond markets? do you buy this narrative that everybody has decided to write about peak inflation? core goods drop. it's a reason why two-year notes have imploded by 20 basis points and why the rates market have repriced, do you really buy that? dani: i personally don't buy we are at peak inflation. when you have amazon announcing they are going to charge 5% more to their sellers. peak inflation, i don't really see how we are there yet. what we have seen in this market are these big block trades over the past few days come in, unwinding some of those two-year shorts.
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how much of it is just, ok, we are going to take profit on some of these trades? we have had a repricing on the fed amidst this 20 basis point drop on the two-year note in just the past week so far. manus: those block trades are causing fragility. trying to get some paper away at the lower end is difficult. the brute force, that instrument of brute force which is rates, he's talking about frontloading, june, july, getting to neutral as soon as possible. you got this juxtaposition between the market. this is the repricing you're talking about. the 25 basis points has been taking out of the pricing narrative, relative to what the fed are saying. it's the juxtaposition between what the market is pricing on what the fed are saying. dani: yes, definitely. the more hawkish language from the fed. at the end of the day, the markets saying the terminal rate
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is not going to be as high, you cannot go as far as you think you can without breaking something. manus: you got citigroup calling $73 oil by the end of the. dollar-yen bounces from a 20 year low. i'm going to give up on the dollar, going to throw in the towel. a few lungs are probably missing -- longs are probably missing. pti comes in at the highest ever. we will leave the meat and potatoes of the ecb to maria. dani: it is interesting to see stocks able to post climbs, despite the fact we have that hot ppi print yesterday. it really is the bond market, some of that selling easing that's allowing equities to outperform. s&p 500 futures up. tech doing better with bond yields going down. just a flag we are expecting, the possibility of some big volatility in american equity markets today. $2 trillion worth of options will be expiring today.
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tomorrow, markets are closed for good friday so we will not have markets ready. the expert starts today -- x expiry starts today. manus: there's going to be big options expiration today. let's get to the team around the world. james has the update on the china's latest covid outbreak's. juliette standing by. our she finance reporter gives us the very latest highlights on the jp morgan results. let's get to europe reporter as well, maria tadeo. she has a big preview of the ecb. dani: xi jinping says his government will stick to its zero-tolerance approach to covid, even as public anger simmers and shanghai -- in shanghai and economic costs mount. we are joined by james mager.
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any signs of improvement in containing the outbreak across the country? james: there's a some positive signs today. a city in the northeast, which is a big power production hub, saturday they have stopped community spread. all the new cases they are finding are people who already have covid, already in isolation, or in the hospital, centralized quarantine. look sick they will be able to start unlocking the city and the province and getting back to normal pretty soon. that's not the case in shanghai. they are still seeing some new cases in the community and shanghai, so -- in shanghai, so there lockdown in shanghai will continue. it is a positive sign that the strategy that the chinese government is using has worked. hopefully, it will work in shanghai in the next week or 10 days and that city can also start moving back to normal. but there are other outbreaks in
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other cities around the country. there are small outbreaks happening in other places. the city where the biggest iphone production facility in the world is announced that foxconn workers will all be doing testing today. hundreds of thousands of people work in foxconn making iphones or ipads. they are all going to be tested today. even though some things look to be going in a good direction, millions of people in shanghai are still locked down and there seem to be millions of outbreaks across the country. manus: let's see when and if the moment of release actually comes from zero covid. james mayger with the latest on china. both singapore dollar and the korean yuan are higher after the central banks upped their inflation flight. do you think the word jumbo hike? juliette: that was in terms of what we saw from the authority in singapore.
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they used their currency in terms of their policy tool. they not only read center dot policy band, but they also raised the slope -- re-centered the policy band, but they also raised the slope. a good piece suggesting these gains may not last because the mas did use the word cost,, ukraine and global a lot more understatement. when it comes to the bank of korea, we saw a unanimous decision by the board without a governor for the first time, raising interest rates by 25 basis points, trying to get ahead of these inflationary concerns, even though bank of korea did indicate they are worried about the slowing economy. they are wearing about these exacerbated supply chain concerns caused by what's happening in china with the lockdowns and the war in ukraine. the yield dropping as much as 10 basis points. this is all very different to
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what we are expecting from the pboc. james was talking about those concerns about the lockdown and there is expectations you could see a cut as early as tomorrow and a triple-r cut as early as tomorrow. dani: everybody is safe, except for the pboc and boj going for rate hikes. jp morgan has posted a $524 million loss due to its exposure to russia. the bank also reported blowout bond trading earnings but missed on investment banking revenue. jamie dimon spoke about the challenges ahead. jamie: that's another huge cloud on the horizon. we are prepared for it. we understand it. i hope those things will all disappear and go away and the war is resolved. i wouldn't bet on all that. dani: let's get more with charlie wells. jp morgan trading at the lowest since february of last year. what drove that disappointment? charlie: a bit of a next bag.
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jp morgan, the largest bank in america by assets, was forced to contend with a lot of these macro challenges going on in the u.s. right now. questions about the fed. how quickly is the fed going to act? questions about something that happened in q1, russia invading ukraine. that through a lot of uncertainty about sanctions, trading and that deal pipeline that we have heard so much about going into 2022. looking at some of the specifics, let's start with the bad. we had profit dent 42% -- down 42%. we had that $542 million loss. we also have $900 million set aside in case of loan losses going forward. that is a bit foreboding, but there was some good. trading in some areas beat expectations. you had total loans up 6%. when you look at what jamie dimon was saying yesterday, what his general mood was, he did seem to have a general sense of at least tempered optimism. that could give us some indication of what we are going
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to hear later today from some of america's largest banks reporting. manus: i'm salute -- absolutely. there is the accounting issue as well, increasing reserves $900 million for the first time since 2020. be prepared. charlie wells there. the european central bank would debate its latest monetary policy decision at frankfurt today. with the war in ukraine wing on the growth prospects, runaway inflation giving the ecb the pressing case for further steps for policy, normalization, what does that look like? maria tadeo has the definition of policy normalization? maria: -- policy normalization. maria: it's definitely a question that christine lagarde is going to have to put herself, and also the governing council. the ecb in many ways around the question of ukraine does not have the answers to this. we don't know when this war is going to come to an end, we
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don't know the full impact of sanctions. you have the biggest question of all, which is, do we get an energy embargo or not? if we do, at that point, growth projections, but in particular, inflation expectations are off the charts. there is a lot policy debate and a lot of questions of the ecb -- the ecb is going to have to grapple with. we are not expecting a monetary policy decision today but you see where this debate is heading. at the same time, this is happening at a time in which the german economic establishment is making it very clear, saying it out loud very publicly that they believe the central bank has to take much more aggressive action when it comes to the runaway inflation that we see in the eu. i'm sure you remember, it comes a few days after that interview was put out saying the issue is the ecb at this point has misread and misjudged the factors around inflation. when you look at the timing catalyst, the other big issue is, do we get any clarity on the
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end of qe? we could get another hawkish privet from christine lagarde, perhaps hinting at a specific date in june and that could take us to the first rate hike. the market is pricing in for september. a lot going on today. dani: perhaps on the live meeting in terms of policy changes but still a very important one nevertheless. maria tadeo in frankfurt. along with that huge, dare i even say jumbo meeting from the ecb, let's take a look at other key things markets will be watching out for today. 12:00 p.m., we have turkey's central bank revealing its rate decision. at 12:30 p.m., we will have the latest rate decision from the ecb. 1:30 p.m., we will get u.s. retail sales and initial jobless claims. it is a big day for wall street. bank earnings. after jp morgan yesterday, it is citi, morgan stanley, goldman
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♪ manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. amazon is set to levy a 5% fuel and inflation fee on online merchants that use its shipping services, putting more pressure on sellers to raise prices. what does that mean for the inflation outlook? martin muller is the cohead of swiss and global portfolio management at ubp. thank you for joining us. the debate is this, as ppi hits
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record, cpi is over 8% and we have amazon adding pressure on those sellers to raise prices with a fuel charge, now, your house view is that this is the beginning of a second-round evolution of the inflation narrative, where this is going to add to the inflation spiral, not peek out -- peak out. talk us through your thinking. >> absolutely. this is our view because we have seen inflation creeping up actually last year. . we started at around 2% or just below 2% at the beginning of the, and use either year developing towards 3%, 4%, 5%, 6% inflation numbers. companies have been watching this, have been seeing it very much on the producer prices. one of the numbers i was just referring to and companies are talking to us about, yeah, the need to raise prices, too. and often, it comes with a delay
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towards the producer prices they are seeing. they have been in the type line in terms of price increases -- pipeline in terms of price increases. many are still doing it for this year and i would expect more of these kind of announcements. if you look at more industrial companies such as having to update their prices, it will be something that we will also see over time this year. dani: the story had been for these companies who are raising prices that corporates have very strong pricing power, that they are able to maintain margins, they can pass on those prices to the consumers. we are looking at ericsson earnings this morning, where margins weakened. you looked at bed, bath & beyond in the u.s. yesterday, who flagged concern about consumer demand. have we reached the peak of what consumers are willing to pay up when it comes to increase prices? martin: that's a very good and key question. i think the question of demand
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destruction is one that is going to be also the topic of this reporting season. what kind of outlook can companies still give when they are seeing these kinds of burdens to the consumer? at the same time, they see pressure for themselves to increase prices. it is indeed a risk that we have seen. one has to keep in mind that we have seen elevated demand over the last 18 months or so from the consumers, supported by all kinds of subsidies and supports that they have been getting. these subsidies have shifted somewhat. a big topic of last year was of course the direct checks that people got in the mail in the u.s. this year, it is more a subsidy in terms of an added cost for european consumers. companies are sponsoring, heating oil purchases or a few purchases. this is more kind of in order to support on otherwise lost out the purchasing power rather than
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additional fuel then what we have seen lester. we are reaching a point -- than what we have seen last year. we are reaching a point where there is some demand destruction. manus: we've had a number of guests who talk about increased allocation to cash and a lot of derision at that. people sing at 15%, 20% cash. you would choose a different route. you want a few put options in the portfolio. where? how do i do it? do i write the put options, take in the premium? how bearish do you want to play that trade? is that a smarter trade than cash? martin: on the equity portfolio management side, we are typically using the kind of put options we have, relatively safe
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stocks in the portfolio rather than outright puts. we try to focus on companies that are less impacted by these inflation issues. by having, for instance, a low carbon footprint means that you probably have low energy purchasing needs, that you have pricing power, that you are focusing on companies that have high levels of cash flow generation. often, companies that have rather strong pricing power and not a lot of burden on the input side. we try to do on the equity portfolio management team by selecting the companies that should be less impacted by these negative trends instead of some structural support here. a couple of companies that are really creating more casual helps them to avoid having big debt burdens or balance sheets. if you have high interest rates, you have less of a burden from interest-rate costs in your overall financing and would be a
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safer bet in this kind of environment today. dani: you are going to stick around with us. that's martin moeller, cohead of swiss and global portfolio management at ubp. coming up, how is the european central bank going to navigate soaring inflation and a war in europe? we will be looking ahead to the ecb's hugely anticipated rate decision, next. this is bloomberg. ♪
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♪ dani: welcome back to "bloomberg daybreak: europe." i am dani burger in london with manus cranny in dubai. it is ecb day and amid the decision or heading into the decision, there's concerns about the european economy. those concerns are not showing up in european equities. you're looking at right now a chart on the white line are
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domestic exposed european stocks. the blue are china exposed stocks in europe. investors have been pummeling stocks exposed to china. those exposed to the domestic economy have been outperformed. is this the right trade? let's take this question to martin moeller. does it make sense that european investors would be more afraid of exposure to china versus the domestic economic story? martin: yes, i think so far, this has made sense because we have seen worries about china, especially as they are fighting with their zero covid policy impacting the supply chain, and have also weaker growth. it is an issue also for the cities. the chinese central bank is the only one using when you look around -- only one easing when
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you look at central banks around the world. that will be joined by a new set of worries about lower growth, higher risk of recession in europe. may be these stocks that have been holding up will also be impacted in the next couple of months. manus: i mean, when you talk about the policy response, we are getting ready for the liquidity taps to be turned on in china. i think citigroup say something like 1.2 trillion yuan will go into the system, $188 billion worth of liquidity. does that or will that shift your view on investing in china at the broadest level? martin: rather in an indirect way. we are still [in discernible] investment into chinese companies after the experience we have seen with government intervention into the private sector, and impacting the large technology stocks that we have seen there.
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on an indirect way, to invest indirect markets, companies that have exposure to china, indeed, that would be a positive point that we expect there. we would be seeing that as an argument for investment into these companies. as you have seen on this chart earlier, there have been laggards in in terms of performance. manus: martin, thank you very much. our just this morning, martin moeller there at ubp. we are going to break down the tsmc results. there is a blog on the go for the first quarter numbers. the briefing starts. we will wait for the numbers. chip shortage is the only thing that the world is talking about for the consumer electronics, for the auto industry, but of course, tsmc's shock and awe budget, will it hold -- capex
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budget? dani: analyst want to see if the company adjusts its inventory strategy. you have the pandemic, geopolitical tensions. is that at xfinity, we live and work in the same neighborhood as you. we're always working to keep you connected to what you love. and now, we're working to bring you the next generation of wifi. it's ultra-fast. faster than a gig. supersonic wifi. only from xfinity.
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♪ manus: this is "bloomberg daybreak: europe." i manus cranny in dubai. amdani burger is in london. these are the stories that set your agenda. dani: passing on the costs. as ppi surges more than ever, amazon plans an inflation levy. eyes now turn to the ecb. zero-tolerance. president xi plans to stick with his covid zero policy amid public anger over lockdowns. markets get ready for a triple-r
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cut. russia turmoil hits j.p. morgan. the bank's results are marred by a $500 million loss tied to the war. goldman, citi and morgan stanley on the docket today. tsmc numbers coming in hot. looks like a bit of a beat for them. manus: absolutely. 202.7 billion is what they have earned. the expectation out there was for 186 billion in terms of income. let's get to juliette saly standing by. over to you. what have you got? juliette: that is an incredible beat. we were looking for a 33.6% jump in and that income. you have seen that -- in net income. we are looking at first quarter growth margin rising by 55.6%. this is all about chip demand amidst of the supply shortage.
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we are looking very closely to see what tsmc is going to say as well later in the earnings call about their inventory strategy, particularly against this backdrop of geopolitical tensions and what you see with the impact of lockdowns, particularly in the factories in shanghai. where looking to see whether or not there is going to be further talk about what they've got underspending plans. they announced that 44 billion capex plan back in january. the outlook for tsmc, as you can imagine, on the back of this very strong beat is very good. they have these small, nanometer chips they are working on. morgan stanley saying that is very positive for tsmc's long-term outlook. credit suisse saying it is one of their sector's top beats. we are waiting for further lights to come through but our bloomberg opinion columnist saying that is higher, that even the top end of estimates compiled by bloomberg.
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looking for some further lines coming through but remaining very positive tsmc, a stock that the market likes a lot, even though you have seen a drop some 6.5% over the course of the. -- over the course of the year. manus: there is the number that the three of us were waiting for, capex is going to be $9.38 billion. this place to the point that you are making about the capex. tim writing in the op-ed, "dear rivals, tsmc can outspend you all." there you go. that's been a hallmark on this show, spend, spend, spend. juliette: it's going to be an impact on that currency move because that's been something that the market is looking for. huge capex bets.
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dani: i can't get over this massive growth margin. manus: we could margin all day and capex ourselves to death. let's pause for the. juliette saly in singapore. hop on the tliv. the entire editorial team are there talking about a pretty solid performance. grab everything that you need on your tliv for tsmc. the european central bank is going to debate the latest policy decision in frankfurt today. you've got near record high inflation, a war in europe, the ecb giving a pressing case for further steps towards policy normalization, if you go with the data over the war. maria tadeo is outside the ecb and will put this in context for us. if you look at the language from the last time around, the risk is that they fall behind the curve and they want to bold steps. how does christine lagarde tread
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that line today? maria: if you look at the macro picture, we are at the stage were growth projections for europe have been consistently cut. when you look at the inflation picture that continues to jump in europe, yesterday, you have that confirmation, now and double-digit inflation. a lot of this makes the ecb look behind the curve. the other big issue is, going forward, this is a medium-term outlook that is incredibly cloudy for the central bank. if you're a central bank, if you want to take the right monetary policy decisions, you have to be able to track and measure risks. a lot of this from the war in ukraine, the impact of the sanctions, the potential energy embargo that would have further ramifications on the inflation picture in europe. at the same time, all of this happening at a time when we know there is a growing debate, particularly in this country, germany, that you know very well
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cares a lot about inflation that the ecb is not being aggressive enough when it comes to inflation. all of this also happening after the financial times interview, he is considered one of the founding fathers of the euro, who said the problem is we are looking at inflation all wrong. this is not a one off. the forces around have changed and the ecb have to grapple with the. a lot of debate today. not a decision expected but definitely a big debate at the governing council. dani: thank you very much. . that's maria tadeo in frankfurt heard joining us now is antoine bouvet, senior rates strategist at ing bank and my personal favorite finn strategist. we don't have enough hard to data when it comes to the impact from war to really have the ecb make any sort of policy decisions. with that in mind, what are we expecting from them? is there any forward guidance they are able to give us without
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the implications now showing up in hard data? antoine: it is pretty difficult communication exercise for them. . as you said, the growth mood in frankfurt is pretty poor. there's a lot of risks hanging with the outlook. with that in mind, they cannot take any [indiscernible] the way the fed is doing and the market is implying. the best strategy is to put up a little bit optionality, rule out the most dovish scenario, rule out asset purchases, saying normalization is on track, that they will take steps later this year. what they have tended to do recently is really tell us to wait until the next meeting. since we have no economic data this week, we will probably be told to wait until then. manus: how did they acknowledge
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the upside risk it inflation -- risk in inflation when you would say that there is a risk that they endorse the market valuation? that's the fine line for them to tread today, isn't it? antoine: yes. the market is pricing about 8 25 basis point hikes by the end of next year, which is a lot more than they have signaled. this is doing some sort of tightening on the economy ready. interest rates are higher, bond rates are higher. this is something that in and of itself would slow down command and would fight inflation -- slowdown demand and would fight inflation, to extent. i don't think they need to do a lot more than let market price what it does. the consequences, or the effect of that was very transitory, or minimal. with that in mind, i think they are actually in a pretty good
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position. this is just -- they should just let the market do it does. dani: is there any risk that the market is going too far ahead of itself given this is a global bond market? is there a risk that financial conditions tightening too much, again, just due to the spillover effect? antoine: clearly. i mean, the ecb is very much in the passenger seat when it comes to the global central bank tightening trend. what the euro curve is pricing is it rate hikes -- is eight rate hikes. the market assumes that the ecb is in a position that the fed was about six months ago, i.e., not having hiked at with a way to easy policy-setting -- way too easy policy-setting. i don't think this will be the case. there is a disconnect between what can be realistically delivered by the ecb and what is priced by the market.
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the time for the market pricing to come back to reality is not now. it will probably be later this year, second half of this year at the earliest, ones we have had a few hikes by the fed. also, once we have had a bit of a pulling down in inflation. manus: it's the debate about inflation and whether we are at peak inflation, the debate about recession and whether there will be a hard landing. if war in europe, russia-ukraine endures and we are now being primed really for a long hall on this -- long haul on this, how severe a recession are you expecting in europe? antoine: it depends a lot on the outlook for energy prices effectively. i think it is expected that they will not come back very quickly. this is already being baked in
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some economic expectations. some of the second order effects are not very easy to understand. we don't really know. it is early days in the grand scheme of things. we don't know the impact. i would argue the euro zone bubble will not be plunged into a recession, but the economic doubt and risks are sufficient for the ecb to tread very carefully indeed. i would characterize the problem in two halves. you mentioned the word normalization, which is exactly what it is. that spike in inflation could be seen as an opportunity if you are a hot to normalize, to go back to a policy-setting that is zero interest rates and asset purchases. that is number one. that is very likely. high inflation is an opportunity to go back to a place that is a lot more come from. number two is actually -- more comfortable. number two is actually tightening policies. that is a lot more uncertain.
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i don't think we will be talking about this before the beginning of next year. dani: antoine, city note put out a note saying because demand is set to slow, because of this release of oil we have seen from iea members, they think brent will settle somewhere around $73 per barrel in the fourth quarter. what would that do to your outlook to have oil back off $100 a barrel and again setback lower into this loma ridge? -- lower range? antoine: it would be a positive. for now, there's high energy prices for the long-term. there is a strategic shift in energy supplies occurring in europe. this will be extensive. this will cause disruptions. even with oil prices coming down from the current levels, it won't to be a boost and it won't be a relief, but they are also down to the impact on consumer confidence. you mentioned before supply chain problems, chip shortages.
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all these problems have not gone away. it is not just a matter of the price of oil, this is not enough to completely lift the mood and say we are -- let's increase interest rates. manus: let's see how madame lagarde handles that news conference today. every nuance will be parsed. antoine bouvet, senior rates strategist at ing bank. you will see compressed volatility. let's get to juliette saly. she is busy today. for the first word news. juliette: the u.s. sending ukraine $800 million worth of new military hardware, including helicopters, heavy artillery systems and armored personnel carriers. the move singles and more intense eltek commitment after early shipments of mostly dispenser weapons. the off city law-enforcement
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officials have made an arrest in connection with tuesday's shooting at a brooklyn subway station the engine more than two dozen people. a 21-year-old man who was working security at a manhattan shop says he helped with the apprehension of the suspect. >> i thought, oh my god, here's the guy, he killed those seven people. juliette: the death toll from floods in south africa has risen to more than 250. the deluge came after weather stations in the eastern region reported to heaviest rainfall in at least six decades, with some recording more than 300 millimeters within 24 hours. more rain is forecast for the province this weekend, with the risk of localized flooding. india's reliance industries is set to be wearing a bid for the international drugstore unit of walgreens buddha lines. billionaire mukesh on barney is in the midst of pivoting his environment focus conglomerate towards businesses. it will help him cap india's
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billion plus consumers. boots could be valued as much as 7 billion pounds. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. ♪ this is bloomberg. dani: juliette, thanks so much. juliette saly in singapore. coming up, we break down j.p. morgan's disappointing results and look ahead what to expect for the rest of the wall street after the the results of wall street's biggest bank. that's next. this is bloomberg. ♪
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stanley and wells fargo reporting first-quarter earnings in the next few hours. j.p. morgan posted a five has $24 million loss due to its exposure -- a $524 million loss due to its exposure to russia. i thought it was interesting this morning coming from j.p. morgan about potential recession because of the war, because of slowing demand. as we look to the earnings ahead of us, what are the key things that we will be watching out for? charlie: i think there's a lot of factors here. jamie dimon saying he cannot predict if there's going to be a recession or not. we are of course looking at what the fed is going to do. is a going to move slowly, is it going to move quickly? we've got russia hanging over pretty much everything here, right? hanging over trading, commodities, that deal pipeline that we heard so much about earlier this year. i feel like those are a lot of
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things that we will hear about from some big angst today -- big banks today. manus: they gave us the curtain razors -- curtain rasier in terms of lending rising, not exactly monstrously,, and the deal flow that was supposed to be the holy grail for this year and that has just been punched out, hasn't it? charlie: it really has. a lot of investment bankers tend to be optimistic about this, the deal is coming, the deals coming. companies don't want to necessarily go there. they don't want to float. they are not necessarily looking for those mergers. for some of these banks who do rely more on m&a, who rely on more investment banking, this sign from j.p. morgan that, of course, investment banking revenue is down is not going to come positively. dani: let's get a little specific. let's break it down, numbers, parts of the business. what are some things we can expect?
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charlie: profit was down 42%. we saw investment banking revenue down. we saw that $524 million loss linked to russia. and what is a little bit foreboding was $900 million, approximately $900 million set aside in reserves in case of loan losses. that's a little concerned. that speaks to choppy waters ahead. some of the good, we saw trading revenue in some areas pick up. we did see a slight increase in loans, which potentially could be good, especially if we are going to see higher interest rates. we did see jamie dimon trying to give a tempered sense of optimism, at least in the short-term, for the american consumer. manus: he certainly pushed away that provision that you were talking about. i love this. if you go to the tliv blog, you can have a look at this. the yapping, his mandate to stop yapping about ce, cl until tomorrow morning when a bunch of
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banks report earnings. the don of wall street, he's not having it. he's forced by accounting to make those provisions, but they are rising. how strong is the consumer? how healthy are they? mortgage rates are breaking 5%. that's hectic from where i'm sitting looking at an entire generation that's never, ever seen an interest rate on their mortgage a 5%. charlie: i think that's really striking. it kind of contrasts to the story about the housing market in the united states over this pandemic era. there has been a huge demand to exit cities. that is a huge inventory problem that is driving up the price of houses. when you combine that with increased mortgage rates, that is going to create some problems for demand, which could potentially spillover into banks. that is certainly something that we need to watch and also should watch some of these banks that have more domestic exposure and have bulkier mortgage portfolios. manus: ok.
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♪ >> i think that i succeeded over the years, one, because i have be my entire leadership on competence. i spent a lot of time making sure the business, the topic i was working on, i had mastery of. enough mastery to understand what we needed to do, how we needed to adapt whatever solution and then adopt it inside the company. i had the ability to zoom out
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and implement them. this is something i was known for. people always say i had enormous strategic acuity because i could connect seemingly unconnected dots and make a shape out of it. these are one set of skills that people would say, look, if you need this sort of skill, go to indra. on the personnel side, i love people, so i would reach out to everybody from senior executives down to the frontline. i showed tremendous empathy, i cared about people, and people loved to work for me. they would say what indra is raise the bar for us but she helps us get there, she mentors, she coaches. i had a loyal set of people that follow me because they just thought they became better leaders, better executives, better people after they worked with me for a few years. manus: indra nooyi there, pepsico's former ceo speaking with francine lacqua.
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you can catch the interview a little bit later on "leaders with lacqua." what's going on in the oil market? i love on out of consensus call. they are talking $73. the debate is, what is it that takes you there? from my reading, they are fundamentally worried about demand growth. it's going to draw from 3.6 million barrels per day to 2.2 million. that is a monster drop. dani: it's huge. we are already starting to see that drop, just from china alone. the iea cut their demand forecast by 925,000 barrels per day because of china on its own. it is europe, u.s., high prices, it is demand destruction. manus: you have a bridge, it is the spr. biden talked about the biggest release in the history, a
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♪ francine -- anna: good morning. welcome. i am anna edwards live in london. mark cudmore joins us to take us to the market action. the cash trade is less than an hour away. steady ahead. the ecb is set to maintain its stimulus withdrawal, prioritizing the inflation fight over the growing economic risks from war in ukraine. president
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