tom: this is bloomberg daybreak: europe, i'm tom mackenzie in london with manus cranny in dubai. these are the stories that's set your agenda. manus: g leaders about two russian oil, but they are held up by hungary. ethics steals the spotlight, the greenback climbs higher as the

bloomberg survey warns of euro-dollar parity. china's exports splutter as the nations premier warns of a dire unemployment situation in beijing. tom, good to see you this morning. across the assets, we are at a moment of risk parity implosion. tom: a moment of risk parity, one of the mliv surveys this week, will we reach parity on the euro-dollar? and how that plays through to the em space and made or data out of china. let's check in on the markets as we weigh out five straight weeks of losses for bonds and equities. stateside futures pointing to losses more than 1%, closing in the red on friday. a loss for the week on u.s. equities. you had that jobs data stronger

than expected, 428,000 new jobs added with nonfarm payrolls. but tightness in the labor market a source of concern, and whether it was the right decision to take 75 basis points up that future. nasdaq hit, the priciest parts of the tech sector, the most vulnerable is the view of many in an environment of high rates and tighter conditions. european futures pointing to losses of 1.5 percent. we will be talking the european economy and the assumptions around the ecb as the hawks and doves continue to battle it out. manus: we saw three and a half billion float out of stocks, and $9 billion quote out of bounds. it is about ripping risk off the

table across the assets. we have the dollar remaining the dominant alpha. we will talk more about our euro-dollar survey, a parity baby could be on the way. 10 year paper 3.14 as the bond market reappraise is where we are in the inflation narrative, an auction along with a number of that voice coming to the four. bitcoin literally implodes, down 20% last week. you are looking at major liquidation, nearly half a billion of positions were liquidated on thursday. iron ore is down amid a complicated situation in china, covid zero is the policy, and it

is unchanged. let's get to the team around the world. maria tadeo in brussels with the latest for europe and the g7 response to energy. james mayger joins us from beijing with the latest chinese trade data. tom: plus haslinda amin with the latest on the philippines presidential election. g7 leaders have pledged to ban the import of russian oil. the meeting comes as the eu struggles to agree on its own ban on russian oil imports. the eu vice president said the group will eventually agree to an energy embargo. >> i'm confident we will get an agreement. the past 70 days of war they approved five unprecedented packages of sanctions. there are quite a few members

states which have been importing oil. it is heavy crude for what you have to have a certain technology. simply to adopt such a decision will required to change the technology to get the new supplies, and it requires time and of course, investment. manus: maria tadeo is on the ground. the question being the eu is still stuck in talks over its energy embargo, what does it mean that the g7 will push to end its russian purchases? i'm drawn to the japanese comments. maria: that was an interview we did on saturday with him. i asked him that question, you have the g7 that says by the end of the year, we want to remove those russian oil imports. but at the european level you are not able to get a deal over the finish line, does that remove momentum?

he told me ultimately, this is the way the eu works. we know it takes some time. it is 27 countries. when you look at a country like hungary, but also czech republic and slovakia, they are incredibly dependent on oil. a lot of the comments they may our fair arguments. he does expect to get a deal over the finish line. we know that european ambassadors will be meeting tomorrow to put an end to this impasse between these 27 countries. i spoke to an official yesterday who told me yes, this is not a good look. but ultimately, this is just a question of when, not if. it will be approved whether it is tomorrow or the next day, it won't change the message, which is we are unplugging from russian energy. tom: that's the broad take away as we continue to look for

additional comments from hungary. thank you to maria tadeo on the ground in brussels. china's trade numbers reveal the impact of the government's lockdowns on exports. as the premier warned that they quote complicated and grave employment situation. our economy editor james mayger joins us now, how do you pull that into the import and export data we have had? james: he spoke at a government meeting, and the government has been thinking about this for a while. new graduates are looking for jobs. the youth unemployment is much higher. he was doubling down on comments saying we need to be more about employment and make sure there are enough jobs for the millions who will be looking for them of the rest of the year. he just expresses the concern

the government feels about the economy, especially the lockdowns you've seen in shanghai, ji lin, and other cities. not just in manufacturing, but especially the services sector. restaurants are shot and deliveries can happen. tourism is not happening, basically. it is having a great effect not just on the economy, but as the premier said, unemployment. -- on employment. manus: our china economy editor with the very latest. concerns about the slowdown has seen more on sure you one weakness, --onshore you one weakness prayed let's bring jules into the conversation. it really is through the eyes of the onshore yuan where the pressure is this morning. juliette: the weakness in the

onshore yuan often correlated to what you see in global stocks as well. in fact, you can see by these red bars, there is only a few times that correlation has not occurred. when we have the onshore weakening past 6.7, it is holding at october 2020 lows, that does not bode well for the overall risk appetite picture. let's have a look at the carnage as the dollar strength continues. there is weakness too in the offshore. we are looking for the aussie dollar to flip through u.s. $.70, it is weaker by as much as 1% on the back of that slowdown. we are also seeing the rupee hit red hot lows. and when it comes to the philippine peso as we are on election watch, it is at a three year low against the dollar. tom: dollar strength rippling across all those currencies.

and the philippines with voting currently underway. full's leading up to the boat have given ferdinand marcos junior a comfortable lead, and could see him take power more than three decades after his dictator father was ousted. we are joined by haslinda almond from manila, where do we stand on things? haslinda: polls suggest he has a commanding lead, 50% versus the closest contender at 20%. we have to wait until be vote counting is over. it is a consequential election, tom, given a lot is at stake. his father 36 years ago, millions took to the streets to

oust his father because his government was corrupt and brutal. for the 20 years he was in government, it was martial law for the most part. lots of people were tortured. 36 years on, we have his only son becoming a front-runner. it begs the question, why does the fate of democracy and governance? how did he get to be so popular? he tweeted he would change history. he has gone to the likes of youtube and tiktok talking to his supporters about how his father's government was the golden era for the country. when you talk about lie after lie, it becomes reality, and that is how it is playing out today. he has a lot of support in the

country, what will it mean for policy? what will it mean for democracy? those are the questions the country will have to address. manus: 56% surveyed supported marcos junior. let's take a look at some of the key things markets are going to check in today. the russian president attending the country's victory day military parade in red square. he is expected to speak. the italian prime minister visits the white house to discuss the ukraine war and global economy with president biden. tom: wednesday we will have oil imports cpi data from china, germany and crucially, the u.s. on thursday g7 and nato foreign ministers will meet in germany. friday, we will have cpi from france and spain. next, the head of fx strategy at rainbow bank --rabobank, as the

euro comes under pressure. manus: we have the details on the chelsea takeover later in the program. this is bloomberg. ♪

>> i think the fed's actions were reasonable up through the middle of the summer of 2021. i do think that by september it was clear that this was not primarily a supply chain driven inflation, and at that point, in hindsight, i think it would have served the fed well to move in september. >> it is essential that the fed

regain credibility. it will not do so until it does what the ecb did witches tell us why inflation forecasts were wrong for so long. unless it does that, it's not going to be able to restore its credibility. able to find more people closer to be bad, stepping away from the fed. manus: the fed's credibility issue. the risk assets are cratering. europe under intense pressure, the results of the survey show more than 60% to see the euro eventually reaching parity with the greenback. we can see whether james foley agrees with that in just a moment, the head of fx strategy at rabobank. the view is that the fed lost

credibility by taking 75 basis points off the table. the dollar remains resplendent this morning. you say it is not time to sell the fact on the dollar, why do we remain so strong in the dollar? jane: i think there is a few factors driving the dollar, it's not just about the fed. it's about safe havens. we could talk about the china story, and what higher interest rates mean for emerging markets. all of this means that risk appetite is going to be weak, and the dollar stands out. if we look at the yen, ordinarily that is a favorite but with high commodity prices really eroding, that takes away a lot of its status. and we've got the bank of japan still remaining very easy on policy. so the dollar stands out for all of those reasons. it's not just about the fed, but even if we take 75 basis points

on the table, everyone is anticipating that the fed is still going to be hiking aggressively. and on the other hand, we've got a week euro story. tom: does the dollar investors, we are expecting the cpi two, from 8.5, does that have any impact on the currency at this point? jane: yes, we are anticipating some degree of moderation in u.s. inflation. 8.1, even if it is lower than the board, that is still extremely firm. that is not the sort of level anyone anticipates the fed having very much to take its put up that petal. it needs to get inflation back down. that unfortunately, means a lot of interest-rate hikes still to

come. that is not the only part of the dollar story. we've got so much pushing it in terms of a safe haven. even if it came in at 8% or 7.9%, we might see a slight blip, but i think the dollar will remain firm. manus: i want to know how you voted on in mliv survey. parity baby all the way. what caught my eye, 48% think we are going to .95. is it going to be most manifest in the euro, how did you vote? [laughter] jane: i think it's probably going to manifest against emerging market currencies. but we do tend to focus on euro-dollar. if you had asked me a couple months ago, i would have hoped we get to euro-dollar.

because i think parity reflects a pretty sour bunch of fundamentals for the euro zone. the risks have been building for the euro zone economy most specifically with the news with respect to oil. there is a lot of pressure on the eu to put this embargo on russian oil. we can understand the politics behind that. but the reality is german ministers cannot do that without harming the economy. for a big economy such as germany, it's going to be painful for its manufacturing sector to see these higher prices for energy coming through. that approach is this reality that we get have no growth, or maybe recession in the euro zone. that's what brings us back down to parity. that's what puts the possibility of below parity out there for the euro-dollar. tom: possibly below parity for

the euro-dollar. this sterling with further pressure. the idiosyncrasies of the u.k., the factor the europeans are dealing with, what is the next level for sterling? jane: a lot of this is dollar strength. but cable and sterling has weakened, we could see this against the euro as well. the bank of england's hiking interest rates, but also being worrisome last week talking about higher inflation, potentially 10%. and talking about real risks to growth. that's coming to focus the last couple months. the cost-of-living crisis. it's been so painful, the cost of food and energy. if we look at sterling investors , they tend not to give it much of the benefit of the doubt when it comes to bad news. investors are very skeptical

about brexit, and worried that it means higher inflation and slower growth. there on that the covid supply constraints, and sterling is really pretty weak. on top of that, politics, the conservative polity -- party are under strain. and then you throw in the results of the northern ireland election. whilst they did not campaign on a united ireland, we've got petty editorials across the u.k. now, suggesting what does that mean for the union of the u.k. over the longer-term? tom: and we had baby foreign secretary talking about be northern ireland for a call -- protocol. coming up, china's premier warns of a grave jobs situation amidst

covid lockdowns and disappointing trade figures. we've got more on that next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe, i'm tom mackenzie in london with manus cranny in dubai. china's trade numbers are reflecting the impact of the lockdowns, as that premier has warned of a quote complicated and grave employment situation in beijing and shanghai. our economy editor joins us from the chinese capital, how much of the trade weakness is due to factors essential to china and their policies around covid, and how much is due to a general

global slowdown particularly within asia? james: a lot of that has to be down to the chinese economy. south korean trade, they saw a more than 10% rise in exports. exports in china are down almost 4%. you are seeing similar in hong kong. taiwanese trade is probably going to show the same. chinese imports are week. chinese experts are also weak. the domestic economy is weak, people can't get their products to port, so there exports are also going to be week. the head from lockdowns is not just being felt in services and tourism, it is manifesting in people not being able to export their products to other countries. manus: we've got the premier's comments about the gravity of the situation in terms of

employment, what is the topline takeaway? james: the government is concerned about the lockdowns they are having. they have also said there will be no changes to the covid zero policies. last week when xi jinping spoke about it, he said leaders will balance the economy and covid zero. you have the government saying covid zero is working and we are not changing this, and you have other people in the government saying this is not good and we need to do more to help the economy. the premier is likely to retire. maybe he feels freer to express some dissent with the policies that are being implemented. i don't think that will make a difference on what's actually going to happen in china. manus: dissent is not something they will tolerate too much of that. and they also say is tanking on the back of that, down 1% this

morning. coming up, the risk assets as they say implode. whiplash was the agenda for last week, is it more of a risk off risk parity moment for markets as we kick in this

manus: this is bloomberg daybreak, i'm manus cranny. tom mackenzie alongside be in london. tom: g7 leaders vowed to ban russian oil. they use plans are held up by hungary. stocks tumble but fx steals the spotlight, the greenback climbs higher as a bloomberg survey warns that europe dollar -- e

uro-dollar parity looms. chinese exports splutter as the nation's premier warns of eight direct lockdown situation. we are going to be looking at infineon, the german ship maker, its second-quarter revenue coming in at 3.3 billion euros. slightly above the estimates. manus: tom, they have actually raised their 2022 poor past. -- forecast. 761, chips being squashed in terms of supply chains. automakers are having a tough time. they see margins coming in as well, a year segment margin

above 22%. tom: and it's a reminder. a number of investors say you want to discriminate within the semiconductor space. there you have an example of a company that is seeing strong demand despite supply chain challenges and raising their forecasts for 2022. let's check in on the markets on the back of five straight weeks of selling across equities and bonds. a grim start once again. the futures in europe pointing to losses of 1.5%. we are looking ahead to inflation data out of the u.s., cpi data out on wednesday. the nonfarm payrolls pointing to a tight labor market. whether mohamed el-erian is correct in saying they made a

mistake taking 75 basis points off the table. nasdaq futures also down 126 points. the msci asia pacific lower by 1.6% on the back of that comment from the premier and concerns about the jobs markets in china. manus: there is a whiff of a risk parity event across the assets from equities, to the commodities. this is the high bidder currency reaction to a complicated rates situation in china. export growth the weakest since 2020. this knocks into the aussie dollar. it has just kissed the 70 level, we will see whether it actually breaks through. that is all about the slowdown in china. let me show you the cross as it, that is reflected in iron ore which has tanked.

china slowing down, iron ore down for five weeks in a row now. down 5.6%. [indiscernible] has collapsed during the holiday. in china. they zero survey with a 68% seeing parity, and 10 year yields comfortably above the 3% level. and rising. so you are seeing a rapid repricing in the bond market risk. bitcoin down 50% from highest just before christmas. you are seeing hold on, major liquidation and the highest correlation in 12 years to the nasdaq on bitcoin. tom: 30,000 the next level. risk assets create ring this morning, after last week's whip lashing as central banks moved to rein in inflation. here are some voices on the

risks of a recession in europe. >> gdp growth is expected to slow sharply. >> the impact of energy on the european economy will be substantial. >> the proximity to war is part of the challenge here. it does look like the recession risk is very high. >> if i had to really guest, i would say 50-50. but there is no model that will tell you that. each recession is different. >> if ukraine gets worse, i would assume europe goes to recession. >> i think we are pretty close to recession through this year. >> our central scenario by economists is more a soft landing of the gdp than a recession. >> some of the voices we

caught up with on the risk of recession. mark cranfield with the mliv strategy team. we had our survey. we have the mindset of recession and the danger of that, how close are we according to the people we have spoken to? >> they same pretty confident. we had a high number of respondents. whether it is recession or stagflation, they don't really see europe getting out of its situation anytime soon. they have a pretty downbeat view on the euro which seems to be the safety valve for everybody. that seems to be big train most people cited as the way to play european risks in the near term. they are shorting the euro, and that stands out in the surveys. most saw the euro falling to at least parity. and it was a close call between going to .95 after that for the

euro having a rebound. so there are some traders who subconsciously are thinking that even the recent hawkish back is it is -- hawkish messages from the ecb will translate into a hike in july. although they are not willing to put their money on it just yet. where they see the chances of the ukraine war coming to an end. but either way, the general view is pretty negative on europe, and they see the euro as being the way to play that. tom: parity is the call from that mliv survey, that is our mliv strategist joining us out of singapore. now joining us is janet henry, hsbc's global chief economist. let's start with that question, what are you rating in terms of the risk of a recession in the euro zone 2022? janet: we're not forecasting a

broad-based recession in the euro zone in 2022. but when we think about risks, it is this year that is the key. we need to remember that some economies have already had negative quarters, notably italy contracted. and france already stagnated. so the risks are definitely growing. that point you just made about stagflation, we get into this classic description of what is stagflation? is it negative quarters combined with rising inflation, or do we need to see a real dent in terms of unemployment? i think of it as accelerating inflation, and rising unemployment. and at the moment, the labor market picture, it is still pretty firm. manus: and good morning, that framework sets the stage for a hike "be damned" for the ecb,

and does that say they euros implosion? janet: we are still forecasting a weaker euro. our strategists are at parity by the end of this year, and they are looking for a to weaken further by the middle of 2023. their forecast is around be .98 level by the middle of 2023. so now, we don't think rate hikes are going to be enough to stop the gradual decline in the euro because we still do not expect the ecb to raise rates as much as has been priced in markets. we have recently revised our review. we have the hawks on the ecb telling us they are going to raise rates in july. but we still are forecasting a bit less in the way of rate rises than has been priced into markets. tom: we saw the spread on the

italian btp's versus german bund's get to 200 basis points, how much of a straitjacket is that for policymaking for the ecb? are they concerned about a potential blowout in spreads? janet: this is one of the factors that has concerned us over recent months. gradually the spread has widened and hit that 200 basis point level. we think it is something they be concerned about. what we will all be looking for is how are they going to address this potential fragmentation. how flexible are they going to be with their reinvestment program? can they use it more flexibly to target the spread to some degree ? i think potentially it will become something of a straitjacket, but we're not there yet in terms of being willing to start the process of normalization.

it might limit how far they are actually able to go. manus: we've got two major stories coming from china. a warning from that premiere on the gravity of the job situation and lockdown, but data with the weakest growth since 2020 on the exports side, do you think this is as bad as it gets? is this the nadir i am that china growth narrative for 2022, and dear expected to recover? janet: in terms of the data out of china, you got to remember, china has had a very different covid recovery story to the rest of the world. everywhere else in the world, you then talking about consumer recovery. and in western markets, a very strong labor market recovery.

china's story has been very different. it has been export led, that has been a broad asian story. now with china's unique approach to covid, they are dampening the consumer outlook even further. and globally, the world trade cycle is weakening. even things like the wto, half their estimates -- has halved their estimates for trade growth. and china, has been gaining market share, but when you see these numbers of export growth from double digits to just two or 3%, you've got to remember the base effects are still playing a huge role. we are going to get some much

weaker year on year growth rates for exports, and for imports because of those base effects. as the year progressives, we had significantly lowered our second quarter estimates, but also our third quarter estimates. we think the third quarter will not be as severe as the second quarter in terms of gdp. we think it will be the production side of the economy which will include exports as well as output, more than the consumer and labor market story. april or may will probably be the nadir as he put it, but the recovery will be quite gradual with different parts of the economy reopening and getting back to normality. manus: janet, great as ever to have you with us. hsbc's global chief economist

with her thoughts on the global economy. let's get the first word news with juliette saly in singapore. juliette: britain's northern ireland secretary is set to meet the provinces political parties to encourage them to restore government. the nationalist party came on top of the first time, marking a significant shift in the region's balance of power. sinn fein intends to nominate its northern leader as the region's first minister. hong kong's next chief executive has been named. he bowed to strengthen national security and accelerate the city's integration with mainland china. he said his new job calls for both accountability to beijing and hong kong. global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg, tom. tom: thank you very much.

russian oil exporters are seeing their market diminished. that is as g7 leaders commit to a ban. this is bloomberg. ♪

manus: it's daybreak europe, i'm manus cranny in dubai alongside tom mackenzie in london. g7 leaders have pledged to ban the import of russian oil. as the eu struggles to agree on its own ban with hungary delaying a plan to phase out crude over the next six months.

maria tadeo has been tracking all of the political nuances, she is in brussels. our energy reporter in singapore on the oil market. the eu is still stuck in talks over this embargo. with the g7 agreed to phase out russian oil, what does that do to the eu narrative? maria: it's never easy when you look at the european politics. you have 27 countries that make for a difficult and tricky talk. you happy internal politics of this bloc. it's difficult to get things done on a deadline. yesterday the g7 put out this communique. this is sending a message to russia on victory day that this war in ukraine will have a price. and yet the eu was not able to get it steel through the finish line.

hungary, but slovakia and the czech republic continue to block this. they want exemptions and going perhaps to three or four years down the line read but he did tell me ultimately, there will be a deal. the sense of direction among europeans is that oil will be done by the end of the year. it's never easy in the european union. monday with no deal, but if i had to guess, by the end of the week this will be done. tom: let's watch that and of the week to see if progress can be made. meanwhile, the saudi's are cutting prices for their customers in asia. how much was china central to this decision? >> i think china was the story. saudi arabia and opec-plus generally have been talking about it as they have resisted

calls to make larger increases of production. you saw just last week they decided just a gradual increase in their monthly decision. that as well as this last decision was because of china. the zero covid policy from beijing has drastically cut demand for crude in the world's biggest importing market. that something saudi arabia takes seriously. that's why prices fell from record levels. it's a worry not only in saudi arabia, but other opec producing nations. tom: talking of china, thank you stephen stapczynski, and maria tadeo. the impact of the aussie, currently below 70 u.s. cents for the first time. part of that will be the pressure from that slowdown that we continue to see in the chinese economy.

we will give across that story, the aussie falling below $.70 for the first time. we have got more on that deal. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. i'm tom mackenzie in london with manus cranny in dubai. todd boehly has signed an agreement to purchase chelsea from roman of abramovich read the deal is expected to complete

in late may. laura, what did we learn about the nature of this deal? >> i know that you are a gunners fan, so i just hope that you are doing okay. but yes, as expected, todd boehly's consortium came through as be winners in that deal. 14.5 billion pounds was the number. that includes the firm clear like capital, and the current owner of ela doctors. -- the l.a. dodgers. roman abramovich will not receive a penny since he has been sanctioned. that contribution will go toward charitable causes, primarily victims of the war in ukraine. 1.7 5 billion pounds toward redevelopment in the stadium.

also be junior players. clear like capital will have the share majority, but voting rights will be equally split. the deal has been advised by goldman sachs and the investment form of the former chancellor osborne. but it's imperative this deal closes before the end of may when that special operating license will end. and the primarily will be to constitute the new season on june 8. manus: what does this mean for americans buying football clubs ? >> now around 50% of premier league football clubs have some form of american influence. three of those are wholly owned that includes arsenal and chelsea united. european football teams are looking more attractive for american investors, a lot of

them are poorly managed, wes turn investors sees this as an opportunity to pump up valuations. a majority controlling stake was bought in an italian team. we will see more appetite i imagine in the next few years. manus: laura wright they are with the very latest on that deal. this is almost a bigger implosion in sterling then you saw post-brexit, you are looking at sterling 1.2277, a real trashing but the dollar remains resplendent fair up .5%. tom: the politics rippling across for the pound, amid all

the other the issues. plenty more coming up next, bloomberg markets europe. this is bloomberg. ♪

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♪ >> good morning welcome to bloomberg markets. i'm anna edwards. the cash trade is just under an hour away. here are your top headlines. g 467 leaders vow to ban russian oil but the e.u.'s plans are held up by listen hungary. they brace for remarks by putin. the f.x. steals the spotlight as the