dani: this is bloomberg daybreak : europe. these are the stories that set your agenda. manus: growth john great, the world bank downgrades its investment -- ever more hawkish, james bullard said he eyes a 75

basis point rate hike. renewed assault, zelenskyy says russian forces have lost the campaign to conquer the donbass region. it is the bullard bombshell, a good morning to you dani, 75 basis points could be on the table. channeling his inner greenspan era of 1994. can you get away with 75 basis points without unseating the world. dani: despite those comments, the equity future picture -- inflation has become enemy number one. as we mentioned in earnings. which brings us to the questions of how much of this is priced in at the moment? manus: absolutely. the bond market literally didn't

blink last night. he wants to move expeditiously. i'm jealous they thought of it and not me. there are a lot more on the board or behind the curve, depends who you talk to. yields are down. we can't do it all at once, but we want to get to neutral. 3.5% by the end of the year. our guests in the last hour talked about the sins of exhaustion in the bond market. -- a sense of exhaustion and the bond market. dani: let me show you a son -- the extent of the exhaustion. we have seen the bond -- that is worse than the crisis, does the worst on record. manus: that's a drawdown. as you pointed out, money is flooding in to the etf bonds. the biggest drawdown on record. there is -- you are seeing a

reasonable amount of money into the shore and. -- short and. the bullard bombshell, translates today 13 of a drop in the yen. it is very rapid. the finance minister talks about meetings with the u.s.. you are looking at record high prices and wheat. this is part of the global narrative about food prices, 13 year high on the natural gas futures. and the rates are in question -- policy rates -- talking about faster inflation on wages. the rate rise timing. a lot of alliteration today. dani: the dreaded unch following you across asset mark --

classes. we had u.s. stocks falling yesterday. europe was closed due to the long easter holiday. down .6%. those are performing, given the commodities picture. a lot of the material companies here. s&p 500 and nasdaq, doing surprisingly well given that. this comes to a corporate picture, suffering due to inflation. if those inflationary prices are brought down by the fed, in a roundabout way that is good news for equities. manus: we will get into that in a moment. david things in -- digs into the end. as the pboc's efforts to support china's economy by lockdowns. it is slacking on the ukraine work in the donbas census.

dani: let's start with those bullard comments. st. louis fed president says the central bank needs to move quickly to raise interest rates to 3.5% this year with multiple half-point hikes. and it should rule out a greater rate increase. >> i would point out that the 1994 cycle, where we raise the policy rate 300 basis points for the year, in that cycle, there was a 75 basis point increase at one point. i wouldn't rule that out. dani: we are joined by bloomberg's chief asia correspondent, what was the main take away from bullard's message overnight? >> very hawkish comments. it's interesting that he'd been ahead of the curve in terms of

calling for 50 basis point moves. he was a lone dissenter at the march meeting. now he seems to be saying that just as the rest of the board comes around to 50 basis point move, he said there could be a case for move by 75 basis points in a single meeting. it is his base case, he -- to get rates back to where they need to beat, they may need to take a move. he has led the fed on the rate hiking debate. what he is saying now it may become conventional wisdom in a few weeks. manus: will see how this plays out this weekend. you got the end dropping again to dollar, day 13. the longest ever losing streak. david ingles, can you put some

narrative around that? david: we heard from the guy who would oversee potential intervention, the finance minister. certainly markets stand to listen to the boj governor, but if there is a person who does pull the trigger is the one we heard earlier, he laid out the case where a weak currency, and how that can divert the economy. did he give markets a reason to sell? not just yet. when you look at the end today, it is not just against the dollar, it is against nearly every one of its peers right now, that sort of policy divergence narrative, very strong rba, hawkish told -- tells as far as those meds are concerned. we 19 days into april, and the

dollar-yen his yet to close lower than one. 12 was a record for 13 days would make history, at a zero to that, 130 we are on dollar-yen. dani: let's turn to china where the central bank has announced its measures to help an economy that has been hit by lockdowns to control the current covid outbreak. but the focus on boosting credit likely means the chance for broad-based using is sinking. joining us now is bloomberg's china economy reporter. thompson what has the government economic response to the lockdowns been and how effective do we assume it will be? tom: it's a serious situation for china's economy. it got the third of the country in some form of lockdown. the pboc is responding by easing

military -- monetary policy. it is worried about doing that and time when the fed is tightening, is worried about capital outflows and replacing a bubble in the property market. what we are seeing is the pboc is favoring mild measures, a small cut to the reserve requirement ratio we saw last week to add liquidity to the banking system. this week, what we have seen is the idea that there will be targeted lending aimed at certain sectors that china wants to prioritize. i think it can keep going through lockdowns set like manufacturing and infrastructure. the overall picture, we will probably see a slight pickup in china's debt to gdp ratio. it can compromise on its debt control goals to try and keep growth going through lockdowns. manus: certainly some big cuts to the gdp, all downgrading the

gdp for china at the moment. that got a battle on their hands on the latest from the pboc. let's get straight to the work in ukraine. president zelenskyy has said russian forces have begun a new campaign to conquer the east of the country. joining us now is our europe correspondent with the latest. maria, a cease-fire is becoming a different prospect as the fighting continues. what is the latest in the east? maria: i think at this point, it is safe to say the cease-fire is off the table. we have two fights -- two battles are happening. you have viable, which is strategically -- mariupol which is strategically important. yesterday that confirmation from president zelenskyy, we are seeing the beginning of a major upscale offensive in the east.

particularly going into the peace talks, both sides believed the battle for donbass would involve everything, plenty of heavy artillery. it could give the winner upperhand in future talks. it is important for ukraine to repel the russians and for the russians to establish control. in mariupol, they are able to see that cities that they have a full -- this is terrible news for civilians. at this point, neither side has an incentive to drop the fight. dani: thank you. that is maria tadeo with the latest in ukraine. coming up on the program, the central bank cuts its growth outlook. more on that next.

♪ manus: we talk all things tech, at 6:30 on bloomberg. ♪

>> array of disruptions from china's -- from the impact, yet to be fully felt of the russia ukraine more on food prices. on global supply chains. and bad chases worse, could there be another episode. all these are on the downside. manus: carmen reinhart speaking

to bloomberg after the institute lowered its estimate for global growth. in january it was 4.1%. will get worse? let's talk to the head of equity research. talking a blade -- to that -- they downgraded the growth to 4.2%. barclays, citing way it china. your rate of risk is rising. what is the biggest risk for you to the equity narrative as you look forward from here? anita: good morning. happy to be here. undoubtedly the biggest risk is inflation and tightening monetary policy. this is a direct impact on margins. you have these two forces acting on opposite margins. i think at the beginning of the

year, we knew the economic growth was going to be downgraded. we were aware that epf numbers were a bit too optimistic. the inflation reality is not helping. dani: anita, good morning. if inflation is the biggest risk, you look at comments from board saying 75 basis point hike is on the tables of the not likely. justice language coming from the fed of doubling down, fighting inflation. is that a net positive for the equity market? anita: i don't think rates going beyond what we call balance, where rates go up enough to combat inflation, do not affect economic growth significantly. somewhere there has to be that right rate. we want to be 2.5%, now we got that fed talking 3.5%.

definitely high risk will impact corporate margins and lending, mortgages, and consumption. eventually those things, we are expecting for u.s. equities this year on s&p 500, that might not happen. manus: how bullish are you? there's bullard talking about a term in a 3.5%. the market says we are going to get another 8.5 rate hikes this year. i look at the service sentiment, big shout out to dani burger, aai is the lowest in 30 years. do you share that level of pessimism? anita: we have recently lowered our earnings growth estimates as well as are price to earning market for global industries, or in commodity exposures.

those that have a very high commodity rate on the indices, is taken but down by expectations for performance from the u.s., from europe, for japan. at the level's receipt, a 5% upside. that taking into account the inflation should be peaking soon. there are indications, the shift around the u.s. board, unfortunately, it is not the same in china. it is a one term environment, i think we have to continue watching signals. there is not certainty this year. dani: we'll get into it china and just a bit. i know you're focused on equities. when you look at this huge selloff in the treasury market, etf seeing the worst drawdowns

on record. what does that mean for equities , when usually the safe part of the portfolio, the counterpoint to equities is no longer functioning as it should. anita: we are in a strange environment. it is risk gate, when you will see a risk environment, you expect treasuries would be bought. looking at the peaks, the part of the narrative now are -- they speak as well as we are going to get from corporate in the u.s. during the earnings season. it is difficult to say what is the path forward. i think there's a balance. we are not too pessimistic at this point. manus: we just showed the oil prices there. last week, we were in this risk off mood, we saw oil back at

$114, was your tolerance for oil at hundred dollars, a hundred and $10 -- hundred dollars, a hundred and $10. anita: they have their own assessment. i think it is a fairly universal approach, you could reduce supply from russia, you've got demand picking up as the economy opens. oil has a huge impact, higher on some consumptions, for example in the u.s., is a smaller part, is higher in europe. has -- dani: you're going to stick around with us, anita gupta, head of equity strategy at

emirates nbd. coming up, pboc pledges more support for businesses. we got more on that next. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. china central bank has announced a state of measures to help the economy which have been hit by strict covid lockdowns. many major cities trying to control that fast covid outbreak. i, head of equity strategy is still with us. before asking anything on china, i know manus has asked specifically on china bonds, i think you have to kick off without. manus: i found a fact in the

brakes, anita says -- she is part than i am. china is slowing down, grappling with zero covid, with small, incremental costs. one thing that caught my eye, you been long on chinese treasury, you quite like them, that yield you're getting is dissipating to almost zero. global selling, -- global selling of treasuries is at the fastest pace since 2015. are you bathing on your china deposition. anita: i would not recommend are -- our positioning. what i would like to say is that the reason we are in market equities right now, the growth differential between emerging markets in developed markets is not there this year.

if you are to invest in china, you're going to get that growth. you are not getting it this year. but with what china is doing, and their regulation around the latest, i don't think you are going to get that growth in a hurry. we've been seeing a sharp or downgrade to china's economic growth and earnings. dani: talk to me about some of what you have overweight in the em space, i know you're overweight and yet, has performed the s&p 500s of down about 1%, while i 7% for the s&p 500. why does not over perform? anita: india is a domestic economy, except for the impact of the higher oil prices on its import numbers, you've got a strong middle class, new

issuance coming out of india. india is able to bounce back economic growth numbers have not been downgraded for india to the extent they have been for other economies. typically, it is a straight correlation between economic growth and corporate profitability. which is why we stay overweight and yet in spite of oil -- rising oil prices. manus: we started this conversation about -- that 75 basis point hike. eisai inflation is your number one concern. within the equity space, how are you going to build a more defensive position? gold is rising. some people are -- where's the defense on the inflation rate in equities. anita: first of all, high dividend yielding stocks.

you'd rather get the certainty of a cash inflow and worry about capital acquisition on stocks for a number of sectors and geography do have high yields. secondly we look at health care. we think that's a fairly defensive sector. it is our new overweight, and domestically focused economies. they do mobilization, revenue like goldman sachs -- we have mobilization, we are looking at more domestic forces -- focus. that will be another defensive strategy for us. manus: staying squarely in the equity line. well done. anita, argus this morning on the markets. coming up, corn, wheat, the surge.

we'll keep up into the commodity story on bloomberg. ♪

manus: this is bloomberg daybreak europe. the use of the story setting your agenda. dani: growth downgrades of the world bank slashes its mobile economic forecast due to russia's invasion of ukraine. evermore bullet -- hawkish, fed president bullard says he won't rule out a 75 basis point rep

hike. -- rate hike. i'm going to fill your alliteration today, the bullard bombshell -- i forgot the third one, the bullard bond-- manus: bullard bond bombshell. dani: this is why i can't do it. i wouldn't remember it. it is the bombshell of a potential 75 basis point hike. let me see if i can regain my footing. i'm going to go to the facts. the numbers will always be there for me. it has been a relentless route in this bond market. is it going to get even worse? 31% drawdown from the top of the tlt, is the 20 plus year bond. huge drawdowns, $2.5 billion going into this fund so far your today. people buying into this -- so far year to date.

people buying into this. manus: the japanese coming in -- that sums it all up. february 14, i think it was valentine's day, bullard launched the hundred basis point myth. since then 10-year yields have risen by 100 basis points. mission accomplished, he says. it is an easy lab to just throw it out there, shut out your inner greenspan, resonate to 1994 and laid out, 75, why not? you've got a license. dani: i think that's an excellent point, bullard doing some of the work for the fed to tighten financial conditions. i should say they're starting to like what bullard had to say. let me take you to this morning's acts -- action so far

on the futures market. u.s. felt just slightly yesterday, europe was closed for the extended holiday. s&p 500 futures up .3 percent. -- up .3%. we are going to get one conversation. yields slightly softer this morning. that could be part of the reason why tech is doing all right. manus: the dollar is on a rampage. because of the bullard fuel he's on the file. -- on the fire, or the lack of recrimination so far. dollar-yen, day 13. get ready for intervention. a by out there, you are looking at wheat, corn, major moves fire across the spectrum.

-- moves higher across the spectrum. you've got a faster core cpi, wages are rising, we may forward our rate rise. the aussie is still the strongest currency and g10 in 2022. how much of that is already in that price? dani: let's get to the global growth story. the world bank has cut its outlook is worn ukraine and covid hit the world economy. it is also hitting commodities, a supply concerns see wheat and corn prices surge, adding more fuel to inflation. we are joined by our asia chief correspondent, how significant is this downgrade for the world bank? >> it is a pretty material downgrade. even for what they expect when you look at them numbers, looking at growth of 3.2%, as

recently as january they were talk about growth of 4.1% for the year. compared to the growth of 5.7% last year. it certainly shows the trajectory of the world economy is on. it doesn't mean we are headed for another shock just must endure starting to flow clear -- pull clear of the pandemic. russia's invasion of the ukraine, the turmoil is flowing through to inflation, the biggest hit being to europe and central asia, with a global spillover. it reinforces the fact that we now have a slowing world economy at a time when central banks are having to raise interest rates, not typically a great mix for policymakers to be facing. manus: good to have you back with us. when we talk about food price and its impact on inflation, a lot of people see the oil

impact, hundred dollars, $120, record high prices around the world on food. it depends where you are in the world and how big a hit that is chair inflation. >> that's right. we and corn in particular, see export of those in the production and terms of that being impacted and the cost of fertilizer going through the roof mean that will be disrupted in terms of availability and pricing. we prices through the roof. that is a positive for those countries that export wheat, like the current -- like the u.s. and new zealand. in parts of asia, the food here is mostly made up of price, it doesn't have the same -- the food inflation story in asia is

not as pronounced as other parts of the world. notwithstanding those idiosyncrasies, the headline is still the food price going higher. look at sri lanka, pakistan, inflation going through the roof. part of that does reflect what's going on with food prices. the concern, it's not just about the obvious economic impact of a could stoke social unrest and political instability, where not at the level we were in the past, it is certainly one to watch. manus: thank you very much. our chief asia economics correspondent there, let's get to laura for first world news. laura: major u.s. airlines have dropped the mask mandate after the cdc says the requirement is no longer in effect. that is after a federal judge in florida shut down the mandate. this -- put in place back in

february 2021. white house calls the decision disappointing and continues to recommend the use of masks. ukraine says the battle for the donbass region and the country has begun. president zelenskyy talks about russian troops starting an offensive following along period of separation. moscow has not announced them start of a major assault, it is already been shown the area. in sending large numbers of troops there. >> russian troops begin the battle for the dumb, which they have been purse -- preparing for a long time. no matter how many russian troops are driven there, we will fight. laura: 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. dani: thanks so much.

now let's get to the tech story, apollo global is currently interested in helping finance a bid for twitter, after elon musk's unsolicited offer to take the company private. other texts stories, they're saying they expressed -- expect disclosures to triple. so vague, i want to start us off on twitter. you have apollo saying they will do the financing for this. we have private equity firms like thomas probable say they would look at twitter as well. reportedly, after elon musk's bid somehow real for you is a take private and twitter in play right now. -- in play right now? sophie: this is one of the biggest questions, how is this going to be funded. that dilemma is being picked up. i think we are one step closer

to becoming a reality. it is far from a done deal. we note shareholders reaction so far, has been very positive. at the end of the day, we don't know how this is going to land. i certainly don't think we can say this is just a quirk in to be written off. we could be looking at a deal. manus: good to see you. the market still doesn't believe in the 54 box it would take -- muska is offering $54.2. -- $54.20. do you think it -- if the must vehicle fails. to think there's a bigger story here to play if elon does not succeed? sophie: frankly, yes i do.

for means of the biggest story is the chatter that it opens the door to a bidding war. and then -- twitter is one of if not the most -- has become more important in recent years. we could be looking at this coming through in the next couple of weeks or so, i don't think we can be ignoring the premium that mosque is offering. -- musk is offering. it could get interesting. dani: perhaps that contrast, it could quadruple to $4600 separately around a grand, what do you make of these types of projections sup talking -- there

big tesla goals, could we see gains of the extent of these growth type stocks? sophie: growth stocks at the moment, are being punished. i would say in general, [indiscernible] are those they're are producing essential services. the world doesn't know -- tesla doesn't fall into that bucket. that said, they have outdone expectations quite a few times over the last few quarters. i'm not sure on that. manus: would you be shaken by

the growth to value chartists would be mistaken by 75 basis point hike? sophie: yes, it is not the traditionally liquid environment. why would say, i don't think is fair to put all tech and all growth in that same gift. there some are far more speculative suggestions of others are offering things the world needs some health care these days, overall, the overarching sense would be a rate hike of this size is not great news for high-risk tech stocks. dani: the other big risk underlying a lot of these tech giants, there really hasn't been any effect is the regulatory

risk. we learned amazon has decided to undergo an independent audit. that is going to be led by the former u.s. attorney, loretta lynch. does it change your opinion, the regulatory risk on amazon if they are undergoing this independent look into racial equality at the firm? sophie: yes and no. in a big way, it's a positive step. at the same time, if they do not under duress, -- if they've done that underdressed -- under duress. for me at this point, we are looking at the share price, momentum. it doesn't move the picture too much, it is interesting, to be the biggest capitalized -- capitalist, fixing emergent

progressive progression would been seeing. manus: thank you for being with us this morning. lead equity analyst at hargreaves lansdown. coming up, bank of america, q1 earnings. we break down the numbers here on bloomberg. ♪

dani: welcome back to bloomberg daybreak europe. just want to bring back some lines of the bank of korea governor nominee is speaking saying they should continue to hike rates unless there is a problem for growth, reflect a lot of the central bank sentiment we've heard, inflation is enemy number one, keep going

until growth is hurt. let's turn to the banking story, bank of america reported a better first quarter. that wraps up the earnings season for big banks in the u.s.. joining us now is bloomberg's charlie wells, to give us the latest. bank of america, a big-name when it comes to the consumer, sort of a bellwether, how did this earnings go? charlie: there were expecting earnings of $.74 per share. bank of america managed $.80 per share. it was the only bank of america to post the kind of growth, profit was down 12%. somewhat underwhelming performance across the board in the banking sector. manus: what are the analysts making of this in terms of the performance overall in the first quarter? investment blanking got slaughtered, trading, what would you say that takeaway would be?

charlie: we are moving away from this sort of pandemic arra stimulus, going to a moment where consumer lending is increasing. bank of america, we saw net interest income up there. -- up 13%. great story, particularly ahead of interest rates looking the lot -- rise. investment banking income was down 35%. that ties into one of the themes we seen over this quarter, that growth slowing down. dani: what about for the second quarter? what can we expect more money? charlie: when you look at what bank of america was projecting, they were talk about net interest income going up 20% and second quarter. that is significant. when you hear the ceo talking, you see him having faith in the american consumer. so i'm talking about an increase in spending on leisure, travel,

what we should be doing. some uncertainty coming. concerns about the war in ukraine across the sectors of concerns about growth. manus: that is essentially why the world bank has downgraded the growth outlook. thank you charlie wells. coming up on the show, i u.s. judge overturned cbcs mask mandate for public transport. we have the story on bloomberg. ♪

>> it's just one of our major measures, masking, social distancing, important measures we have to protect people from having covid. right now we've got omicron, we know that tends to lead to milder outcomes given the number of people were unvaccinated.

with the vulnerable population, there's a lot of risk to them who have to take public transportation for work or other purposes. manus: priya devolves of epidemiologist at johns hopkins bloomberg school of public health. it is supported by michael bloomberg. let's turn to the u.s., passengers on airplanes, trains and public transportation don't have to wear masks anymore. this is after federal judge struck down the mandate. emma has the details. thanks for taking the time to join us this morning. this is a florida judge who has made the ruling. what exactly is it? emma: this is a ruling handed down in a lawsuit that was filed last year by a nonprofit group

called the health freedom defense fund. they state that they focus on human lives, they launched the suit in florida, and u.s. district judge in tampa agreed with their case, and has vacated that requirement. it effectively means you cannot be compelled by the tsa or other authority to wear a mask on airplanes, trains and any other public transportation, including i guess the subway in new york, and most other places. from now on. there are state-by-state and city rules as well, it is not clear how this will affect those. but effectively in the u.s., you have a case to not wear a mask

on transfer anymore. dani: this seems like it will be a large blow to biden's administration. what has their response to this been so far? emma: the white house press secretary, she called the ruling disappointing, coming out of the gate, quite clearly signaling might try to fight this. they continue to recommend that people do wear masks in these situations. we are pushing for a renewal of that ruling. particularly because you do have a certain cases in the u.s. again, and people are hoping to move on from the pandemic. but there is quite a shift. dani: thank you very much. witness the latest on the cdc dropping mask mandate. manus, i want to get a quick

check on the end, currently down nearly 1% this morning versus the dollar. it does highlight the picture of this big yields difference between the u.s., japan, the banks that have gone all out hawks and those that are committed to really protecting growth. manus: the narrative is james bullard unleashing the bond bombshell, and that 75 basis point hike into consideration. we wouldn't rule it out. the dollar and the yen first, my only concern, take it back to 2011, the g7 intervened. currently discussing bilateral meetings with the u.s.. it is a risk on the pace of dollar-yen shift. dani: we will see if the

intervention comes into the market. also interesting, what it all means for equity markets. aaii survey shows the latest amount in 30 years, perhaps it is time to get to it. does it for bloomberg: daybreak. this is bloomberg. ♪

>> good morning welcome to bloomberg markets: europe. to take a stroll the market action this hour. the cash trade just an hour away, here are your top headlines. need for speed, see lewis president james bullard said he would not rule out a 75 basis point hike, growth downgrades of the bold