dani: this is "bloomberg daybreak: europe." we have the stories that set your agenda. manus: the rbi becomes the next central bank to raise rates more than forecast with poland's decision later today and the ecb tomorrow. janet yellen says tightening price growth is joe biden's top priority. the world bank cuts its mobile rope -- global growth forecast. plus the u.s. says that russian oil output takes a dive for next year because of the eu been. -- ban. we get to credit suisse in a moment. equity markets just went they are not worried about the world bank, but the world bank says

the worst scenario is still to come, and that is zero growth. dani: it seems the equity markets are obsessed with what is happening with rate hikes and yields. the club get bigger. we saw 10 year yields kick back. let me show you what the equity markets are doing this morning and what -- how they are reacting to this. we get more with juliette saly but there is hope that china is going to back down on some of the harsh regulations after approving some video games. the stoxx 50 futures are playing catch-up with yesterday's rally in the u.s.. yields back above 3% and perhaps that has thrown off the equity market. we had a reprieve from the selling yesterday and we had the reprieve coming in the form of curve flattening after target earnings. it came back a little bit to end

the session, down about 2.3%, but it is another warning that more inventory stockpiles are too high at target so it comes back to this concern we heard from retailers before. are the consumers willing to spend of it inflation? manus: and pimco saying we could have a soft landing. i will leave you with one of the best lines. you are going to love this. our guest said that credit markets are more pressing into and they are ahead of best -- prescient and they are ahead of the curve. let's have a look at what the effects traders show. back against the yen and you have got yen trading to a 20 year low. you buy bonds are you sell the

dollar. in is not a haven currency. down she goes, as you have got the -- yen is not a haven currency. then she goes, as you have got the rupee moving. the russians step out of the oil market and we are still above 30,000 four bitcoin. let's get to the reporters around the world. chief asia economics correspondent undercurrent is standing by with the latest from india and to penn. dani: we also have juliette saly with the hong kong tech scares and the -- tech shares and the latest with the rbi. they became the latest to hike 50 basis point and they also dropped the language on staying accommodative on the policy

statement. let's bring in undercurrent. they say that inflation is still going to stay elevated and are they going to have to do more? enda: the sentiment from governor das cited the impacts from food prices and blamed a lot of it on the impacts from the russian invasion of ukraine, but at the same time some people are saying that the focus on the supply-side issues and the commentary from the rbi might suggest that the hiking campaign might not be as attractive. the rbi is moving now on when these supply chain issues move and perhaps they will ease up. it is a hawkish move and the signal is that more hikes are on the way. manus: japan's economy contracted less than expected. earlier you said it is not all

dollar-yen, but it is slightly bullish moves with the consumer. enda: the consumer was better than expected despite the ongoing virus restrictions in japan. as we said earlier, people are already saying this quarter would be tougher. there is the impact of china's lockdown and the impact of that on japanese manufacturing. and of course there is a view that the consuming -- consumer might to -- might start to rebound on the economy. definitely a better number. economists say this quarter it is already running into more significant challenges. dani: manus, you are allowed to be obsessed with the yen. it is at 20 year low. manus: i just want to speak with the officials and go for a cup of tea and ask them when it goes

more stable? dani: thank you very much. that is undercurrent. russia's oil output is set to take a dive next year and that is because of the eu ban. production could fall as much as 18%. at the same time, u.s. secretary jenner -- treasury secretary janet yellen says that -- let's get more with our reporter on the oil markets. we have predictions this week of oil going over $140 a barrel. what are the latest developments? >> taking oil out of the market no matter what country it is coming from is going to tighten and already tightening markets. russia is one of the biggest producers and if you look at what the analysts are saying, their output will drop not only

this year but also next year from current levels. that will take a bit from the market and take prices higher. that is why you have the u.s. saying, how are we going to be able to make sure that the market is well enough supplied going forward. one of the ideas they have is by things where they bring russian oil to some countries, but they cap the prices and they agree on a certain price level so they are not giving too much money to moscow and put an's government as they invade ukraine. the issue with that is that is somewhat unprecedented and makes it challenging. how will you be able to monitor countries and will countries want to do this? also countries that do want to buy, how do you control what they are doing because india and china have indicated they want to continue buying russian crude.

eu is banning import of russian oil by the end of this year, of seaborne shipments, and that will tighten the markets. that is what traders are looking at today as brent and wti drive higher. manus: thank you very much. stephen stitch and ski on the latest. chinese tech stocks rose up higher and that is after a wide-ranging crackdown on these internet sectors. juliette saly has the details. jules. juliette: the hang seng tech index moving higher following similar gains following from that u.s. adr. there approving 60 licenses of new games and another sign of confidence that we are moving towards policy normalization. that is on the back of these reports that china is ramping up

and a probe into dd as well. this is including the likes of tencent. let's have a look at what it means for the broader tech index, which has rebounded around 30% from the mid-march lows and have broken around the 100 day moving average for the first time in 15 months. where getting a more bullish call on this sector. we had a guest earlier talking to us about this is a sign of positive growth. but not everyone is positive. the tech wrapped, we have -- even was called that the dd probe is wrapping up, he is sticking to his cell recommendation. manus: thank you very much. that is juliette saly with the latest on the tech bonds in asia. credit suisse, we have got to

dig into this. credit suisse saying is going to be a long time for this second quarter and they talk about the market value. the market value of 8.6% investment in all funds group. trying to get the statement open here and that is the core of where this second quarter warning is coming from. they are still sticking to their capital ratio, 14%. dani: it is interesting because as to why they see these losses, they are citing geopolitical issues that everyone is grappling with. they say russia's invasion of ukraine, significant tightening of policy by central banks, heightening volatility, weak customer flows, and they specifically note the impacts region. manus: and those are the issues

about market volatility, but then it goes on to talk about investment banks and our advisory revenues are resilient, our dtf revenues are higher than last year and they all benefit from volatility, albeit a -- performance. low levels of capital markets issued. we put this to deutsche bank in a moment. the market capital issuance and a widening of credit spread is going to hit them in may. this is also the other thing. volatility in the market hitting 8.6% in oil funds. this is led by gottstein who has fired everybody and he is the caretaker and they have seen losses from rk goes -- arche

gos. a tough move for gottstein. dani: and we will put these questions to deutsche bank later. that will be an interesting conversation. let's move to the u.k. we have rishi sunak promising to cut taxes at his next budget audit. it was one of the demands of one of the board members who opposed the prime minister this week. johnson plans to press ahead with legislation over -- to override the brexit deal. let's get more with leigh-ann gerrans. is this johnson trying to shore up more of the party with these moves after this week's drama? leigh-ann: i couldn't agree more. that is exactly what he is trying to do, and boris johnson has said he is going to fetch on. today is going to be interesting

because it is the first time boris johnson faced prime ministers questions, and that confidence vote did happen earlier this week. mp's are going -- he is going to face them knowing almost 40% of them didn't want him to leave on monday, which is a big cut. -- 40% of them did want him to leave on monday, which is a big cut. that is to appease these discredited rebels within an side of the tory party so that is what is going to be a big move that we see there. as you mentioned, brexit is back on the agenda. the government is going to look to press ahead with plans to override some of those brexit rules that were agreed with the eu. once again, this is to shore up support within the party. it is going to be interesting because is the prime minister going to be able to push his policy agenda or is it going to

fall back to the partygate scandal? dani: thank you. coming up, the world bank has cut its growth outlook again. we will dive into the market conversation with lale akoner from the ny mellon next. ♪ ♪ n. they'd huddle.... welcome to the game plan... you go. no, you go! and call audibles... double our investment in omaha! omaha! omaha! omaha! or you could use workday. omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world.

dani: welcome back to "bloomberg daybreak: europe." the world bank president is warning of years of pain i had, speaking to bloomberg about a global possibility of recession. he says we are not there yet. >> it is not a global recession yet. the downside risk is that it could be a global recession. one of the key variables is weather supply comes back online

to add growth and flow down the inflation rate. this is the sharpest slow down 80 years. manus: janet yellen meanwhile has her own morning. she told lawmakers that inflation is likely to stay high. >> i think that bringing inflation down should be our number one priority and president biden has indicated that it is our top priority. manus: joining us now is lale akoner, investment strategist at bank of ny mellon. this is where you have the juxtaposition between the world bank and central banks, but you have the idea that we have not yet finished in our hiking

cycle. how much more aggressive or full breast -- vulgaresque does the fed need to become? lale: thank you for having me and a pleasure to be here. i agree with what janet yellen has said. elation is the number one problem for markets at the moment and we -- inflation is the number one problem for markets at the moment and we do not see peak yields are here yet. the fact that we have to move to at least around 2.5 4% for us to see any meaningful downtrend in inflation. dani: what do you agree has already been priced into market? to what degree does the fed need to get aggressive and to what degree is that already priced are not priced into the markets? lale: the market is actually

pricing in the possible fed tightening cycles at the moment but at the same time, the market is betting on the fact that inflation rates will come down sometime this year. the risk is that this will stay elevated for some time. also i believe the fact that the fed might have to tighten in an aggressive session and that might lead to recession, which is something the market is not pricing at the moment. this tells us that the market is getting worried of higher recessionary risks and stagflationary risks as well, but i am not seeing any indications from the markets that recession is priced in yet. manus: my favorite line in the past 24 hours, the stagflation ring from the world bank.

you buy bonds or you sell dollar at your peril, which i think is great line. king bond is making its swipe. see the moves on the yen and we see the dollar going higher. you can see the dollar going higher if the fed continues to hike. where is the biggest move in that dollar? lale: i do agree with you. the appreciation of the u.s. dollar will continue, although the pace has come down a bit in the past few weeks. the reason why that implication is going to continue is because the fed is ahead on the tightening cycle and they have other tools in their disposal such as qt. this is as opposed to central banks such as the ecb, which has been very flexible in their approach, although we will see rate hikes starting in july and as he pointed out, the bank of

japan. that tells us there is a diversions in monetary policy and an upward pressure from the u.s. dollar which will continue for some time. dani: can the yen get even weaker? the narrative is there but it is already at a 20 year low. manus cranny is very obsessed with this. will we continue to see lows in this currency? lale: i think that the yen can go lower. there is a major diversions in the bank of japan and pretty much every central bank after. i think the bank of japan will have to look at their yield approach and take a step back. we are not at this point in time but i do believe that if they continue with the policy they are doing at the moment, i think the end will go lower. -- the yen will go lower. manus: we have another thing

about china, we talking -- talk about the gaming and the tech crisis is over. the other day was that zero covid and they are relenting. what do you have to see to convinced you as a strategist that there some kind of major turning point in china that would allow a major shift in the flows back to china? lale: there is no doubt that china's growth targets will be missed by a large margin. it is as wide of a margin as they have seen since the asian financial crisis in 1998. what i need to see is a meaningful policy expansion. of course they are worried about the problems that japan has right now, you do not want to go the opposite direction of every central bank out there, using monetary policy and easing pressure on your currency, but

at the same time, private demand is extremely clipped at the moment. external demand is going to come under pressure as well given that major central banks are tightening and there is rotation in the market from goods to services. fiscal policy needs to be war than what we are seeing at the moment -- more than what we are seeing at the moment. at that moment, i think we will become more bullish on chinese equity markets in general. dani: and into that consumer concern, target coming along with customers spending less on goods at least in the u.s.. thank you for joining us this morning. lale akoner, investment strategist at bny mellon. manus: this credit suisse story is going to build momentum.

they talk about all of the macro risks that are out there but also the investment banking side, the businesses under pressure. we will talk about that and the losses in the second quarter. we dig into that. stay with us here right on bloomberg. ♪

dani: you are watching "bloomberg daybreak: europe." bloomberg has learned that the biden administration is looking to wean the u.s. off of russian uranium imports. they -- exxon mobil has a group of western companies posed to have stakes in a multibillion-dollar project boost gas exports. they may announce this decision

this weekend. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you. we are going to jump in a little more detail. we break it down on the wealth management side. we see ongoing deleveraging. that is key to the story. dani: it is notable they are talking about asia-pacific as well. we were just discussing china about what would make you drop back in. credit suisse customers are not will when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working. i've done the diets, all the diets.

before golo, i was barely eating but the weight wasn't going anywhere. the secret to losing weight and keeping it off is managing insulin and glucose. golo takes a systematic approach to eating that focuses on optimizing insulin levels. we tackle the cause of weight gain, not just the symptom. when you have good metabolic health, weight loss is easy. i always thought it would be so difficult to lose weight, but with golo, it wasn't. the weight just fell off. i have people come up to me all the time and ask me, "does it really work?" and all i have to say is, "here i am. it works." my advice for everyone is to go with golo. it will release your fat and it will release you.

manus: this is "bloomberg daybreak: europe." we have the stories that set your agenda. dani: rbis becomes more than four caps. a decision later today and the ecb tomorrow. inflation, stagflation. janet yellen says it is joe biden top priority. the forecast is warning about the session. u.s. says russian oil output -- because of the eu ban. crude prices crime -- climb. we are warned again about inflation. from retailers. we are waiting for some lines from one of the world's biggest retailers. manus: three weeks from the target index. heavy on the revenue side period

comes in under the estimate. when you look at the margin story, 61% of the margin. there is expansion, even in this rising cost environment. the estimate was 459.5. you are just seeing that. let's see how the markets trade into that. 1.9 2 billion. market saw 1.75. nothing on the inventory side as we saw from target. there was 36% in first quarter in terms of the numbers. how are we reacting? it depends on if we trade off our trade dimes. online, they are declining online.

online sales are dying. stores are reopening. there you go. online growth at 60% -- 67%. last year, 67% and it was dropped year on year. dani: anything that indicates normality, i am on board. wonder -- we can skip target this time around. best hope for regulation. i sent the futures declining.

some of that yield curve. it flattened. manus: there is one line. they are saying there is a provision for cost related to ukraine. also to russia. they are just making that provision. they are saying that sales are increasing by 17%. 216, temporarily closing their businesses in russia and ukraine. let's see how the market choose on that. big short. you don't want to do anything like that. the yen is no longer ahead in currency. the dollar is up.

did we sell and buy the rumor? russian exports on the market next year. janet yellen talking about a cohort of countries that can keep russian oil on the market, but at a limited price. credit suites, let's see how that trades on the open. you will take us inside the event. on the customer side, this is something they talked about. the leveraging in asia, that is what is most notable in the numbers. yes you have ukraine, yes russia. they are seeing a substantial increase in inflation. that delivers notable delivering.

dani: investment banks are talking about potential loss for the group in the second quarter of 2022. they continue levels of capital insurance. we will get into that in a bit. they are also talking about continuing to try and rein in costs. of course, there is a financial story. manus: absolutely. there is a line about cost. they will try and cuss caught -- cut costs a cop -- cut costs across the group. we will discuss that through the morning. big news. stepping up the debate on what happens to the credit market. dani: it does.

i want to kick up this morning about credit suites. let's get into it with deutsche bank's head of markets, henrik johnsson. thank you for joining us. credit suites is warning, do you think it is fair to see low levels? henrik: great time to be on. it is a little backward looking. they are down about 35%. equity insurance is up. it has not been a great start to the year. i think it is a little country and. that comes with credit markets. there has been enough of an adjustment. we have seen outputs stabilize where they can start putting

money to work. restarting hopefully. manus: could you have you with us. the lowest in 40 years. he thinks we will see a pop in yield. can you pair the things together? henrik: i knew you would ask me that. i'm heading over to introduce him at a conference. his call is largely a recession in the u.s..

with investors now looking at where prices are now, and from where issuers are about to print, you will miss out on a lot of performance. i think there is short-term. dani: fair enough. i think with the short-term, there is perhaps long-term they are worried about. what forces that issue, if the short-term is implied to? -- is in plateau? henrik: there has been an adjustment as people start to price in rises.

actually, they compensate you for a high level of default in a diversified portfolio. there is always a risk of shocks. consumption is still happening. we can see stability now. that makes it easier. when it comes to equity, in the hierarchy of capital markets, it goes first and then -- and that with the ipo, you are in the market for the best part of a month. you need to see longer stability. dani: we were just looking at that data.

manus: part of that, looking at the spec index, wow. from 2020 one on the index, our specs dead? is that the biggest opportunity? what do you reckon on specs -- spacs. henrik: i think they have come back on ground. it reminds me of height. yield. there was a lot of skepticism and you got into a bit of -- but is there a need for them to exist, i think there's a chance for them to exist. we need to work through the change in regulation and some more of the speculative -- speculative deals.

dani: are you backing off spacs in your business? henrik: we are following regulation. investors are not seeing spacs, this is a cycle. the frost is on. i think we will still be doing them, hopefully in a more controlled way. manus: not a bad thing. a little bit of control. it sets the table for opportunity. henrik johnsson, cohead of capital markets. enjoy the markets. let's get back to julia singapore. -- juliet sally and singapore. >> brexit deal. it could come soon as thursday.

meanwhile, promising tax cuts next year. a key demand. angela merkel has warned that isolating russia is not possible in the long term. in the public experience, part of a larger appearance, they previously made a big mistake saying there is no excuse. they think it is focusing on the call for a cease-fire. tiktok sees jumps in hong kong. the industry outlook is on the up. entertainment regulator approves gains. it is seen as a step towards policy normalization. the automotive empire --

circling the earth after being blasted in orbit. one of the first chinese companies to begin assembling -- by spacex. >> many synergies between manufacturing and the aerospace injury -- industry. there is a significant revolution of transport for human beings. global news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much. juliet sally there. coming up, raising their rates by 50 basis points. poland,, ecb. tomorrow, we get the latest on the hiking cycle. ♪

manus: this is daybreak: europe. 50 basis point hike in the key rate. the governor once the inflation would be above the tolerance level, 6% for three consecutive quarters. as the latest central bank to join the 50 basis point rate hike. joining me now is our chief asia economics correspondent and current warsaw bureau chief. and yet, 50 basis points. when you look at the currency reaction, it isn't -- i didn't implode. the guidance is the most

important. what do you reckon? 9 is a big move. it's another central bank in the central race -- rate hike club. the governor said it is going to be verified of the tolerance level. suggests more tightening will be coming from the rb i. the issue, he seemed to a law on supply-side. that would suggest that perhaps if the supply-side issues get ironed out, there will be less pressure on the rb i to jack up interest rates and may not be as aggressive a trajectory as expected. i would hawkish move by the rpi, some suggestions that they may not be as hawkish as the fed. dani: amongst all this hawkish and us, one of the few standouts

is japan. within economic data showing their economy contracted less than expected. it is the accommodative spans starting to work -- accommodative stance starting to work? are we starting to see recovery? >> i wouldn't call it recovery yet. consumers holding up better than expected, there was ongoing friction to contend that virus. inventory buildup helps. the feeling for this quarter, is all about inflation, the cheaper yen means japan is imparting higher energy and food costs. there is a spin over -- spillover from the shutdown in china. factories won't need to make as much stuff this quarter. the feeling is the boj will not be going toward hawkish territory.

there keeping that i, they will continue to support the economy in the near term. manus: good to have you with us. the polish central bank is due to make the decision today. 75 basis points is what we are expecting. how real is at risk? talk us through the narrative. >> yes, indeed. 75 basis points it is the second consecutive month when they are praised. -- there raised. the whole tightening cycle has been going on for nine months now. to put in perspective, it is quite extraordinary. when the central bank started, the rates were at zero, in october.

with rates going up to 6%, that is going to hurt. we already see some of the mortgage borrowers complaining about this. there's a big outcry among the borrowers about this. at the same time, inflation is 7.9%, the highest in almost a quarter century. it is understandable there raising rates. dani: i'd be remiss if i didn't ask you about the ecb while we have you here. as tomorrow's meeting alive when? >> in a sense. they will end the qed program, that is what paves the way for the rate likely the following month. at this point, we are looking at the end of the loan buying

program, which is a big deal for the ecb and another headache, as we remember from the past, this is not just one economy, these are a number of economies with different problems. if you end the qe program now, what happens to yields on bonds from different member states? that is something the ecb will have to consider going forward. how they want to make sure this channel of help monetary policy is compared to all the economies in the euro zone is working properly for everyone involved. when it comes the rate hike, that is the next month most likely. the scale is still in play. manus: she's threatened does set

the tone, time is short. thank you for joining us on the rpi decision. coming up, on christmas. here on bloomberg. ♪

manus: it's daybreak: europe. we are on top of the credit suisse story, a lot of the investment banks for the second quarter. let's get to our financial director in singapore. patrick, the top line, we had a string of losses, where's the injury? >> it certainly does.

another surprise. should we really call a surprising more? credit suisse is given a court -- a statement saying the second quarter has gone well. there .2 aging clients borrowing less, all those are going to contribute to the banks most likely having a loss for the second quarter. dani: talk to me about what this means for cost cuts at credit suisse? >> the bank also said today they are going to accelerate cost cuts. with that typically means in banking speak is redundancy. i would expect to see another round of cuts on the back of this. it is not clear yet how quickly they're going to come. manus: let's see what it means.

he said we are asking questions, -- in singapore with the latest on christmas. the market is going to ask itself what comes to opening up, where do you cut costs? you said yesterday about raising the pay, dani: you are going to be reincarnated as a junior banker. yesterday, they are getting a raise of $110,000 for junior, where the cost cuts are going to come from? i guess not the bankers. this up -- that is it for manus and me. this is bloomberg. ♪

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dani: good morning.