>> this is being a sticky pot buyer in this environment -- sticky stock buyer in this environment. >> this is bloomberg surveillance. jonathan: live from new york city for our audience world wide, good morning, this is bloomberg surveillance on tv and radio. futures are down 4./10 of 1% and a big move on the bond market on the three year yield. tom: it's moving in the central banks are speaking and i believe we locked in 50 beats. the sterling in london with the french election, christine lagarde has a bigger challenge.

jonathan: the date it in the u.k. of consumer confidence is at a new low and retail sales are softer. inflation starts to hurt the consumer and the consumer starts to feel bad and then it shapes what the consumer does. when you start to hike into weakness, the currency falls, it does not rally. tom: this is a friday where we are trying to slip into the weekend. i've got sterling under $1.29. that is a well statistic. jonathan: a one point 2% move this morning. lisa: it has accentuated the concern saying even if rates go up at the bank of england as much as people expect, it's not going to cause the currency to strengthen because we are talking about hiking into a slow down. this is really the dilemma that central angst have around the world. you heard that to some degree yesterday at the imf meeting. jonathan: we are obsessed with

the front end of the yield curve and the hawkish talk. what's happening with the long and with inflation expectations? even with all this hawkish talk, breakeven is going the other way. lisa: this should be concerning to a lot of people especially the fed because it goes to credibility.is the fed losing credibility that it will go quickly enough to curtail inflation? you are seeing the five-year and the expectation is inflation writing at the highest levels since 2014 with every one trying to out hawk each other. tom: bank of america, bonds, yields lower and david at citigroup was stunning. jonathan: do you think they will get a hold of the inflation

story? can you get bonds back in the portfolio if you believe inflation will come under control and the fed will do enough? that's still a debate right now. we need to talk about germany. the bundesbank said the economy is more or less stagnated in q1. we are talking about an ecb set to come to market and hike interest rates for the summer. tom: it's an absolutely original set of ideas off the pandemic. germany has a massive fiscal spends to happen with the energy change over. there is a short-term story in germany and there is a long-term story giving support. jonathan: we are negative one/three of 1%.

yields are leading a little bit higher by three basis points. a big move on a two year. the two year yield this week i think is up about 30 basis points. lisa: unbelievable and you look at expectations, we are seeing three consecutive 50 basis point rate hikes, getting priced into the market, not speculated but christ in. it's boosting that the 75 basis points in two consecutive meetings following a 50 basis point rate hikes. at 10:30 a.m., there is an imf announcement. it highlights the dilemma quite well and tank of england governor andrew bailey will be there as well as the managing director. i want to highlight the chart i mention. inflation expectations over the next 5-10 years are surging as we talk about three consecutive

50 basis points rate hikes which is the fastest pace of fed tightening going back to 1982 in january. if that doesn't curtail inflation, what is the market looking for? 11:45 a.m., treasury secretary janet yellen will join us and i want to hear what she has to say about oil. she talked about the concern of the economic blow to the euro region if they were to ban oil from russia immediately. she will perhaps talk about how russia can take the rejuvenation of ukraine and i'm curious what she says. on sunday, the final round of voting for france and emmanuel macron is leading in a poll. we were talking about this is a tale risk dragging the euro down. he is clearly leading le pen. jonathan: cable is down 1.2%.

that is a weaker pound sterling this morning. jane foley, what is the lesson of the u.k. market this morning? >> we saw hawkish remarks from catherine man talking about 50 basis points but there was hawkish remarks from the fed and the data you just mentioned. there was a plunge in retail sales which is nasty data from the u.k. talking about consumer confidence. that normally perceives a recession. you look at the pmi which look ok but if we look at the numbers, they were generally disappointing. particular in the service sector. if we look at new orders, they were down as well.

we are looking at the possibility of a raised recession risk for the u.k.. we talked about that for the last month or so. it could falter even further from rate hikes from the bank of england. tom: net trade starts and ends with not only individual trade growth in the united kingdom and the united states but aggregate global trade. the imf make clear they are seeing a trade slowed down. is that the true overlay of the dampening of global trade and what it will mean for fx and the dollar? >> we talked about supply problems for quite some time through the pandemic and we've got energy issues particularly in europe and that will come to fruition in the trade issues.

i did a foreign-exchange story that illustrates this. if we look at the currencies, but we see is that the energy exporters for the commodities exporters have been performing the best. that is because their terms of trade have increased as the prices of commodities have increased and that's true for the commodity importers. japan for instance in most of the europeans with the exception of norway. the countries that can export into the higher priced commodities, those countries are about to do better. lisa: we have seen that so far. are we pricing in a recession in europe and not a recession in the u.s.? is that with the euro is telling you?

is this a more nuanced story? >> most forecast are suggesting we also have growth in the u.k. and the rest of europe. the higher price of gas and oil is affecting the so this is quite new. we had the headline from the bundesbank saying if there was an oil embargo from europe on russia, we would see germany in recession this year and that is a significant risk and that is obviously something that will affect the u.s.. the story of slowdowns is because of the hiking of interest rates we will be seeing this year. jonathan: fantastic to catch up with you. every time i heard an ecb policy maker cut rate hikes, i thought of china.

we are starting to see something we did not see lester which is weakness in the chinese currency. tom: not only that but this goes back to the beginning of 2021. it's a four standard deviation move but for a strong trend. over the weekend, we need to restudy where em sits. am i willing to say turkey is unraveling? no, but you've got to look at em led by china. lisa: this stems directly from the lockdown.

given a sense of the fed slowdown in the fact they are not backing away from that, what will rejuvenate the economy? jonathan: does the fed quiet period start tomorrow? many people will be happy with that. we are taking you into the quiet period for the federal reserve just around the corner. they want someone to be quiet. yields are higher by two or three basis points on the 10 year yield. from new york city, good morning, on radio and tv for our audience worldwide, this is bloomberg surveillance. ritika: federal reserve chair jay powell has outlined his most aggressive roach to taming inflation to date.

he has potentially endorsed two or more half percentage point increases and he described the labor market as overheated. he says there is strong demand. they clamped down by the u.s. and its allies is -- to cut russia's access to imports. gina raimondo's as the russian military is having trouble finding fuel for all of their tanks and rocket mounting systems. the stock market is urging the indexes to buy more shares. elon musk's attempts to buy twitter have become more real. he has raised more than 20 $5 billion in debt financing.

he plans to contribute another 21 billion dollars of his own money. reno may sell part of its share in nissan to pay for the companies to electric vehicles. this is bloomberg. ♪

>> today, i am announcing another $800 million to further augment ukraine's fight in the east in the donbass region. this includes heavy artillery weapons, dozens of howitzers, and wondered 44,000 rounds of ammunition to go with those howitzers. jonathan: the president of the united states, good morning, equity futures are declining once again on the nasdaq in the s&p 500. yesterday, a messy session and yesterday morning was pretty decent.

crude is down 2% today. morgan stanley upping their forecast. on a much worse supply outlook, that's their call. tom: this has been the back story this week. there was a huge miscalculation of oil demand. tom: jonathan: demand is likely to recover more slowly than we anticipated. we now see a greater deficit. tom: this is the micro economic foundation of all this.

emily, the president speaking of the contribution of the united states. is anybody else ponying up the size of money of the united states? emily: that is major news out of washington from yesterday but it's also the additional amount we will see the white house request in coming days, asking congress to approve that additional funding. we don't know how much that is but we know there is still that strong bipartisan consensus in washington to move additional funding for ukraine. 1.3 billion dollars, 800 million dollars for weapons and technology and that will include a different kind of weapon that reflects the changing nature of the invasion in ukraine. tom: early in the week, we had a chart that showed how lonely the

u.s. was in ponying up money, am i wrong on that? is europe ponying up millions to help ukraine militarily? maria: there is a difference between money that goes to weapons and sustaining ukraine. to be fair to countries like germany, they have been slow on weapons. an incredible interview today by chancellor schultz. pointing to what seems to be a real concern from the german government that this war could escalate. the german chancellor says i don't want to get involved directly with a nuclear superpower. when it comes to financial help, you could argue a come -- a country like germany has spent billions and they will continue to do this. the reconstruction of ukraine is understood in brussels. lisa: i thought the interview

was fascinating. chancellor olaf scholz, what was his goal? was he drawing a line with which weapons were escalatory? maria: one thing is he is under immense pressure in the german government. there has been incredible criticism. that germany is weak on russia and there is legacy from the angela merkel era that drags government action and they should be more open and their support for ukraine. the other issue is his old party had been criticized for working for years with russian companies in the hunt for cheap gas and jobs. this interview was a lot of saving face for olaf scholz. i'm not sure it did the job. what came across was a chancellor who still very dubious who's not really sure what to do with weapons and who

is scared of russia. lisa: this goes to the conversation that janet yellen highlighted yesterday, moving away in immediate ban on oil in the region, talking about russia pay for the reconstruction of ukraine. how much is that becoming the theme? emily: that's a good point. it seems like it's going to take a while for some of these european countries to get off of russian oil and gas. there is a need to think about what other ways they can get funding from russia. we heard the ukrainian prime minister yesterday saying they will need 600 dollars that ukraine will need that to make up for the losses they are currently sustaining in this war and asking the imf and the world bank for that funding will stop we know there is an effort being made to look into data on

potential were crimes committed in the ukraine by russia and hold russia accountable. this is what secretary yellen was getting at, seeing if russia would be able to pay for some of the costs inflicted on ukraine. jonathan: great to catch up with you. i'm looking forward to the conversation with david westin later. lisa: i'm curious what janet yellen says about oil. it seems that is a no go when it comes to having a bigger band from germany. if that's the case, what are the other options? is there potential tax on oil from russia that can be used to go to ukraine? jonathan: clearly a big problem for germany. bundesbank says the german economy is at risk of shrinking

2% this year. it's a big if that this war escalates. tom: i would folded into the embargo debate and the distinction between gas and oil. jonathan: france is trying to push the embargo but emmanuel macron has his own problem's this week . tom: it's april and warming in america and it's always our job to provide added value to your weekend. we do it with expertise from one of the challenges you have, adjust your grip when you play golf. use a golf club. you need a pair of golf shoes.

jonathan: are you serious? do you know how much they cost? i bought a golf club for $20 and i'm trying to get back into it, it's painful. happy weekend to you, too. this is bloomberg. ♪

jonathan: live from new york city, this is bloomberg surveillance on tv and radio. here is the price action on the s&p 500 and the nasdaq with futures a little softer. the nasdaq is heading for a third straight week of losses on the nasdaq 100. bank of america thinks the pain is just beginning. the rate shock continues at the front end with the move of 30 basis points on a two year yield so far this week, up another seven basis points this week. the federal reserve is set to keep hiking in the bank of england might do the same but they are doing it into some weakness. cable is a whole lot weaker, the pound down by 1.12%.

tom: explain to me or mortals why the bank of england has american economists on their board. jonathan: i had of a lot of time to bring in international experience. do you? it's not necessarily a bad thing. tom: even if they root for cardiff? jonathan: are you suggesting wales is a foreign country? tom: wales is closer to dublin then london. i'm not kidding. jonathan: for people just tuning in, we've had week data out of the u.k.

retail sales came in really soft, softer than expected and you are seeing the pound weaker even after anticipating more rate hikes for the bank of england. tom: on oil, we look at the to nymex of supply and demand -- we look at the dynamics of supply and demand. to an amateur like me, i flight over russia and i see the gas flares looking down from 36,000 feet and the world bank keeps glaring data. explain what the flaring data means in russia and for that matter in the number two country, iraq. >> i wouldn't call you an amateur but in terms of flaring, we've been collecting the data from russia as well to try and understand whether production is going down and by how much. obviously, when oil production,

when the fields are producing, many countries like russia and the united states for that matter, the gas that comes out of the oil tends to get into the atmosphere because they are not capturing it. that gives you an indication of how much production is going on. the data we are collecting suggests production could almost be down about 1.7 million arrows. -- barrels. it will be heading lower in russia. given that storage is full. tom: is morgan stanley onto something that everyone is doing demand studies in morgan stanley is suggesting supply dynamics is the thing to study? >> i think we have to study both. we've been talking about big production cuts in russia. also you mentioned iran, it doesn't look like it's going ahead which means iranian

production is not going to come back to the market this summer. the same time, you don't focus on demand, there's been a big hit to demand in china, that helps in taking away some of the tightness so you need to do both. lisa: given the fact that you are talking about the tightness of the market, everyone sees this tightness. why are oil prices not higher? >> first and foremost, liquidity is an issue. we have seen huge margin calls by exchanges possibly because of what happened with nickel after the russian crisis and you are seeing bigger and bigger margin calls. that means traders had to exit their positions in order to meet that arjun call. we don't have enough just to meet that margin call. we just don't have enough liquidity. that's one thing i would say. the other thing is that the

market is extremely tight and it will be tight. not particular type right now. having said that, we cannot ignore the fact that they are bridging the gap. the market was trying to solve and unsolvable problem. we would have to have massive demand rationing. the spr allows us to bridge that. it doesn't solve it fully. i think there is that context which is important that it will be incredibly tight but at least it's a solvable problem right now. lisa: a few weeks ago, are we heading back to oil trading like bitcoin when people have the liquidity and the spr influence is rolled off? >> i think the real risk around the market will say late q3 is when the demand will still be

strong particular you in asia. the demand numbers coming out of asia are strong right now. that's when i ran would've come back to the market and we are now assuming it no longer does. i agree that's when the volatility and the price upside could be at its highest. tom: there is a headline out of indonesia on cooking oil. this is what agricultural oils and doing. how does your world full to into the grain/oil world? does boyle crush global cooking oil? >> it's even more complicated than that. the focus we've got is one of the big aspects is biofuels. in order to meet certain green targets, more and more countries and companies are simply

switching to use cooking oil or more biofuel. that intern is having a detrimental impact in pushing up prices so they will be a tussle between green energy and food prices and it will only get worse as some of these accelerate. lisa: i hate to put -- to talk about food shortages in tandem with oil but that's what we do. it's a testament to how we move forward and makes you wonder how much of the oil story and the tightness in the energy market has been priced in on the equity side. the oil majors are up 50% year to date. has this priced in there even though it's not being reflected right now and the actual commodity space? >> not only is the price of oil falling but even on the equity prices, the reason they did not

go further is because ultimately, we still are in this mode of oil demand peaking and we will not need oil and gas. one of the biggest reasons we are in this crisis is precisely because of the mistaken concept around not needing fossil fuels and the focus needs to be cleaning up and decarbonizing. demand is still very strong. we talked about oil prices like heating oil or jet fuel prices. they are near 2008 record highs over this past week so there is a clear sign that demand is strong. we just don't have enough investment. tom: unleaded in america is down from the peak but it's curving up. do you assume the price of a gallon of gas will break out to record highs? >> it's a possibility this summer because we will still be missing a lot of the russian

blended stock materials that america would import. demand has come up a little bit in the u.s. but not huge amounts. i think it's possible we go back to record highs if not higher this summer. jonathan: great to catch up, thank you. singapore is eeev dashes easing travel as the covid britt recedes and we have seen story after story recently of banks getting out. they are moving people from hong kong. they are not necessarily exiting hong kong entirely but moving people from hong kong to singapore. that's a story you been on top of. tom: it's been a mess for decades and a lot of talk in the logistics are challenging. every time i'm in singapore, i think it's their winter right now, the weather is hot.

it's like australia. jonathan: more headlines here, singapore removes capacity limits to gatherings at restaurant dining. lisa: the broader context is that china has not moved away from its zero covid policy and singapore has in australia has an almost every other region has an they are enjoying the economic benefits of that step when you talk about people leaving hong kong for singapore, part of is the increasing integration between the mainland and hong kong but they are trying to get away from what they view as arbitrary lockdown rules considering the science and i think that a significant for the months and years ahead. tom: it's like food inflation in southern asia. you look at a barrel of oil and you bring it over to indonesia and food inflation. these are essential oils that

are so important. jonathan: why are you laughing? tom: such oils are vitally important like juniper. lisa: and aren't bitters -- an orange bitters. jonathan: we will talk about boris johnson's future. he is confident he will be the prime minister in october. tom: he probably needs and essential oil. we are trying to get to may 1. jonathan: futures are down four/10 of 1%. for our audience worldwide, this is bloomberg. ♪ ritika: keeping up-to-date with news from around the world. the u.s. against threatening china for offering material

support for russia's war in ukraine. shanghai is about to step up enforcement of luck and measures to prevent community of coronavirus. they are having the worst outbreak since the pandemic began. 25 million residents had been locked in for weeks. there is a record 11 deaths yesterday. emmanuel macron is closer to winning another term as president. marine le pen is running out of time to narrow that gap. emmanuel macron has a 12 percentage point lead. honduras has extradited the former president to face drug trafficking and weapons charges.

honduras is a major hub for cocaine shipped to the u.s. from columbia. france has issued an international arrest warrant for the former renault ceo. he now lives in lebanon after escaping from france. he faces charges of financial wrongdoing. this is bloomberg. ♪

>> it is appropriate in my view to be moving more cleat and i also think there is something in

the idea front end loading. that points in the direction of 50 basis points being on the table. jonathan: that's chairman powell at the federal reserve. after that you get 75 and 75 and it may continue. futures are negative on the s&p 500 by 1/3 of 1%. you've got something to say? tom: i thought what they did yesterday was fascinating. can we have a moment of silence for the people who nailed this inflation surge like lawrence summers, dudley and mohamed el-erian and a select others? jonathan: that was it, is that enough time? i'm with you.

we will talk with mohamed el-erian later this mornin. p you've got tom: tom: him later today? he doesn't want to get out of bed? jonathan: you ask random questions about cooking oil. that might have something to do with it. emmanuel macron is leading marine le pen. tom: we will get to that in a moment. what does it mean for the next president of france? lisa: you heard jerome powell talking about frontloading those rate hikes. they will do it aggressively and that's a different roach from what you hear from the ecb which is leading toward a gradual increase. we talked about japanese yen weakness and today we will talk about euro weakness.

what's interesting is the impact on this pair from the french election. the base case is that there will be eight emmanuel macron win after a 14 point lead in a euro friendly outcome is expected. the other side of that is the marine le pen victory which had -- which would have bigger implications for the euro-dollar which would be a bigger gap. the market is short euro into this election. tom: we will talk about that this morning. thank you so much. in paris, francine lacqua, you and i interviewed oxford university. he speaks about a fractured france between prosperous paris

and everyone else. how fractured is france? francine: bonjour from perry. -- bonjour from paris. it's shifted to angry votes so it could be extreme right or left but this is a fractured friends where much like the brexit vote, a lot of people outside paris do not like the antics of the parisians because they see them as not in touch with the people and this is what they say about president emmanuel macron. it looks like he could win because he is at 55% of the vote sunday. i think we are underestimating the fact that we could see marine le pen have a surprise. tom: what about the turnout? who gets the left? we don't need to do a history lesson here. how does the left vote for marine le pen?

francine: this is a very different left than in the past. if you look at the results of the first round, there was a shift at the last minute that managed to have the third biggest number of votes. this is the far left. he managed to get the votes of a lot of angry people. the biggest question is people who voted in the first round, do they vote for marine le pen? we understand that making 25% of those votes would go to marine le pen but 35% would go to mr. mike rome -- mr. emmanuel rec chrome -- mr. emmanuel macron. people are basically disenfranchised and say they don't want to vote monday. tom: what was the name you said earlier?

you are laughing at me. lisa: i think jonathan has lost it. francine: you have to listen to what tom used to tell misses lagarde. lisa: you wonder what the turnout will be like given that the first round was not as high as many expected. francine: and this is the million-dollar question. turnout could be one of the lowest in the republic and there is a school of thought that says because it is a repeat of 2017, you will have tactical voting to try to make sure there is not an extreme party that will come through so voter turnout will be extremely important. it's not expected to rain sunday and that makes a difference especially if you are in rural france. it's something we will have to see. tom: for those on radio,

francine lacqua looking spectacular this morning in paris. i'm sorry, looks like she's done some reporting in their vintage store in a department store. jonathan: she always looks fantastic and i'm looking forward to coverage this sunday on the french election. francine is all we need in paris. tom: why aren't we there? jonathan: thank you as always. francine: work on your pronunciation. jonathan: tk and i have oh's had an arrangement that i will manage the clock. everyone knows that he cannot manage a clock. i will get us into the break and out of the break and tums brings in the guest except when he does not know how to pronounce the name. back in the day on radio, he used to do a big build up to a

guess and he would turn to me and would suggest i bring in the next guest. sometimes he chooses to butcher it and when the show was on radio and not television, he would hide behind the desk literally crying and now it's on tv and i can't hide. tom: it was weird when you're on vacation with the director of strategy from turkey. we never got there. lisa: and tom was insulting me the whole time. tom: i had the honor of the first interview, the greeting of her to the imf. i did this in front of 800 people and i'm going i can't pronounce this. we say good morning. jonathan: futures are negative

1.3 of 1%. yields are up three basis points. from new york city on tv and radio, this is bloomberg surveillance ♪.

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>> the american consumer right now is actually weakening. >> high prices, high inflation are disruptive but they make like challenging. >> there is nothing wrong with being a picky stuck buyer in this environment. >> high-heeled spreads are still quick range bound. >> people should remain calm because best the path to press already -- to prosperity. >> this is bloomberg surveillance. jonathan: live from new york city for our audience worldwide, good morning, this is bloomberg surveillance on tv and radio. equity futures on the s&p 500 and the nasdaq are lower 1/3 of 1%, a massive move on the two-year yield. tom: i have to admit with everything going on, the best indicator of all the central bank chat is the yield and the yield dynamics. as you go