manus: good morning from our middle east headquarters. it is "daybreak europe."

tensions over taiwan. urging beijing to refrain from aggressive action over nancy pelosi's expected visit as joe biden's has a u.s. strike killed a key planner of the september 11 attacks. asian stocks and u.s. futures selloff while treasury yields decline. keep a wary eye on the development in taiwan. three times 50. the reserve bank of australia hikes rates by 0.5 for the third consecutive month but says there is no preset path. the aussie dollar drops. that is what you call a dovish hike according to our chief economics correspondent. we will get to enda curran in just a moment. let me show you the equity narrative. we snapped three days of gains on the equities market. 56% have reported.

52% have beaten. that trailed the past five quarters. the results are better according to goldman sachs. they are looking into dovish messaging from the fed but there are a lot of deniers of this dovish messaging from the fed. not least speculation on a fed pivot is overdone and counterproductive. stocks drop as the ifn and the united states of america i think tell inventories are building. sales are dropping. that is injurious to the consumer. european stocks down 0.5%. the aussies on a dovish hiking path. that is what we will get to end on. -- enda on. the aussie dollar, we will have a look in just a moment.

you have yields dropping on the 10 year government bond. bank of america says you are careering toward 2%. there is a tendency to overweight. dollar-yen, a six-day, four-day, five rally. angst in geopolitics, the growth narrative from china downgraded. people want to belong of the end -- want to be long off the yen. there is your aussie dollar on the drop because it is the third hike in a row but we are not on a preset path. inflation will peak later in the year. perhaps the top of the rate hiking cycle. let's get around the world to set the agenda for you. nancy pelosi is expected to touchdown in taipei in a few hours. enda curran is on the tliv on

the chinese gdp. and joseph joins us taking through what will happen at credit suisse. if you are rainmaker and you have not left the bank yet, juliette is in singapore. let's kick off with reports that nancy pelosi is expected to touchdown in taiwan defining the objections of the chinese state authorities. let's get to sydney wang in taipei. -- cindy wang in taipei. this is happening. the first top-level officials and 25 years. she will not be defied by the chinese. good morning. >> exactly. house speaker nancy pelosi is expected to arrive in taiwan tuesday night around 10:20 p.m. according to taiwanese media. she is scheduled to meet with the taiwanese president tomorrow morning before heading to the

legislature to meet with lawmakers and speakers. nancy is expected to leave taiwan around noon wednesday. nancy pelosi's visit is indeed a landmark, of great significance because this is the first time in 25 years someone in her position has visited this democratically ruled island. her visit is also a sensitive one due to her stature. she is the second in terms of the presidential line of succession. that is why china has previously warned of great consequences if nancy pelosi does visit taiwan and president biden also made public comment saying it is probably not a good idea for nancy pelosi to visit taiwan right now. despite the pressure and tension, nancy looks like she is sticking to the plan and the trip is obviously raising -- in the market.

the taiwan dollar has extended its decline to the lowest in two years, it dropped 0.2% this morning, among the weakest in the asian currencies this morning. the taiex also dropped over 2% this morning. there are uncertainties and tensions. anna: -- manus: volatility certainly there in the cash price. china's top leaders were weighing a number of other issues. the country's growth according to bloomberg sources. they told government officials last week the gdp target of 5.5% would serve as guidance rather than a hard target that must be reached. let's get to our chief economics correspondent. i put you on rbi watch. let's get back to china. how significant is it that it is

guidance, not a target of 5.5%? >> quite significant. the central authorities have told the provincial level officials they will not be punished if they do not hit the all-important growth target. a lot of the stimulus of china happens at a provincial government level. they are being told just keep things stable. don't worry about 5.5%. they are willing to tolerate some slowdown in the economy but remember, you get a big public health dividend in return. the second take away is that it pushes back get against the idea that china will send in the fiscal stimulus cavalry. there will be the bazooka we have seen in previous downturns. we had the negative pmi number yesterday that underscores how much more public support will be needed to keep on track. the message from here in the back half of the year is forget

about 5.5% but keep things stable. put a floor under things. they don't want to see collapse either. manus: i suppose it just depends where they end up at the end of the year for the global growth story which seems to be rounding on 4%. great work today on the blog. enda curran, bloomberg's asia economics correspondent. the move by china and nancy pelosi's expected trip to taiwan is sending reverberations across risk assets in asia and globally. juliette saly focuses on the issue market. -- the asia market. you are also looking at the rba. >> yes i am but let's have a look at this risk off session we are seeing in asia because it started with those headlines that nancy pelosi is planning to land at 10:20 p.m. local time in taiwan. basically, a lot of wiggle room with that 5.5% growth target from china.

that has sent the csi 300 down by as much as 2.5%. it is up more than 9% from june peaks so will we see correction? no surprise we are seeing weakness in the taiwan dollar holding at a two-year low and we are seeing money going into safe havens like the yen, its longest winning streak since april 2021. when it comes to the rba, has the market started to since we have reached peak jumbo hike as we look to the rba saying they could see peak inflation this year? you have seen bonds bid and the dollar fall. 175 basis points of rate hikes in australia since may, the most in six months since 1994. a generation that has not seen this amount of aggressive rate hikes coming from australia, but we are looking ahead to the monetary policy statement on friday for more clues as to where the central bankers -- whether central bankers do think they have seen atop in price pressures driven by rising fuel and food costs, and of course

those floods in australia as well. certainly great commentary. you did allude to enda on the blog saying they are not set on a path. garfield reynolds can smell an rba pause ahead. manus: thank you very much. i put everybody on rba watch. there is no bigger story. thank you very much. juliette saly with the very latest. spooked by scandals, losses, ongoing leadership shakeup. credit suisse handing out $3 million in a month to retain top bankers. i caught up with the ceo and we talked about how the bank plans to keep talent. >> why should i stay at credit suisse if i am an employee holding stock? 60% lower than when he arrived. >> because there is huge

potential. >> is it going to be tough to keep people here at the bank? >> sure. you need to manage that. speak to people. our people excited about the way forward. manus: some would say that was skillfully deflated by the chairman. our senior finance editor is standing by. this is about keeping the honey in the pot to make the money isn't it, jonas? is it all going to be stock or is it going to be cash, the $300 million? >> right now it is unclear. right now it is a deferred payment. they are doing more than speaking to people. basically it is almost as much as they handed out in all of last year. this comes after three straight

quarterly losses, replacing the ceo. they are still dealing with the fallout of alexius. dealmakers have left the bank over the past 18 months. it really shows the depths of the troubles that the bank is in. and it is interesting to know that awards and payments are going up as the banks fortunes are fading. they have already warned the third quarter will be tough for the investment bank again. it remains to be seen whether these huge payments will stoke the fires of the dealmakers over at credit suisse. manus: you know what two things have come across my desk? you cannot make a decision within credit suisse. nobody wants to make a decision on the company is in such a state of crisis.

the other side of the coin is the stock is so trashed if you get in now and pick up a big title job, it could be a payday. they are going to turn it into ubs. let's see what happens. jonas bergman, our senior finance editor for bloomberg. let's take a look at some of the things the market is focused on today. bp, will it be another rainmaker buyback? the last oil major to deliver second-quarter earnings. can they follow suit? that is the question. possibly even a dividend hike. u.k. house price data for july, nationwide building, a shortage of properties on the market. housing prices are more unaffordable than ever for buyers. at 3:00 p.m. u.k. time, the ongoing jobs data in the united states. mohamed el-erian will have a piece out. the jobs report show the job openings, job openings.

how much has that fallen from the 11 million in june, 11.3 million in may returning to the labor force is the narrative. we are going to take a quick look at bonds in a moment. the two year yield. can we make it to 2%? that is what bank of america say. that is the call of midday in the united states. rupert thompson joins me ever so shortly. from kings were holding investment strategy. i want to give you a live shot of sydney harbour. the rba has delivered a third straight hike. this 175 basis points since may. this is one of the biggest six months hikes since 1994. where were you in 1994? i was trading commodities very badly with a bloomberg terminal. this is bloomberg. ♪

manus: it is daybreak europe from london and dubai with me, manus cranny. this chart is the definition of angst in the bond market. government bonds could reach 2% in the next six to 12 months. the economy could slow down. how deep is that slowdown? this is the most inverted since the year 2000. the tendency for the market is to outweigh. if you are expecting to pivot from the fed, no. that would be somewhat overdone. that is driving risk and somewhat counterproductive. let's take a deeply inverted yield curve, the deepest in 22 years, and take it to our guest. let's get to my guest on the markets, it is rupert thompson. investment strategist at kingswood. the deepest inversion since

2000. how many more rate hikes will there be an how deep will be go in the inversion? >> in terms of recession, yes, there will be. i don't think it is going to be deep, i think it is going to be a shallow recession at the end of the year even though we have just had two consecutive quarters of growth. in terms of the fed, the market is expecting the actual cutting rate and i think the risk is the fed goes further. manus: i had the standard chartered ceo with me the other day and i asked what is the terminal rate? he said it was an interesting qualification. where do you see rates getting to without a much deeper inversion or maybe even 2% on tens as bank of america are

saying? >> it is quite likely rates will head up to 3.5%. the market is pricing in rates going up, but where the markets must be wrong is that the fed is going to be easing rates by next summer. if you look at the forecast for next year they have rates on 1% below. that is very optimistic. inflation to our mind is entrenched. >> some people would say that is over optimism. what does that do to risk? the whole july -- not the whole july rally. a lot of the latter part of the rally in equities in july was you were out almost peak inflation and therefore you would get these rate cuts in 2023. is that a bear market rally? do you think it is 2000, 2007?

do you think it is an auspicious rally? >> i would describe it as a dead cat bounce. it is a bear market rally. it is bigger than the rally as you saw -- you had three such rallies so far this year and each time they did not last as long. the real reason why we are saying the markets are taking comfort from the fact yields are down 90 basis points, but forgetting the fact the reason they are down at this level is because the fed is going to be easing. the fed is only going to be easing if there is a recession. recession is going to mean earnings are down, not up. that is the story we are seeing at the market, very optimistic at the moment. earnings are going to hold up in the face of possible recession. manus: my favorite line this morning was from mike wilson. come the end of the year you're

going to see companies kitchen sinking their assets to have a better bounce into 2023. the consequence is if the rates don't -- the rate cuts don't come, there is a ship in fx. the taiwanese dollars under pressure because of the angst of pelosi arriving today in taiwan. and the chinese guiding -- it is a guidance, not a target, on 5.5% growth. how disappointing from a global risk narrative is the movement from a guidance movement to guidance than target on the chinese growth of 5.5%? >> i think it is -- chinese authorities have excepted reality. 5.5% at this kind of level would mean a very sharp rebound. in a sense they are just moving in the direction of what

everybody is already saying. if for percent handle rather than a 5% handle -- a 4% handle rather than a 5% handle. the fact of the matter is they have not been easing massively. they are easing. they are also putting a massive amount back into the economy. they are not trying to hit 5.5%. it does not have that big of an impact. manus: how does that translate into european investment strategy? in hiking mode, recession watch mode, caps on energy in germany. no government in italy. it is not what you would call a bullish case scenario is that? >> certainly -- it will be europe for exec of the reasons you said. we are looking at recession in the u.s., u.k., and europe, but

given what is happening with constraints on gas supply to germany and the like, recession risk and severity is going to be worse in europe. even though europe is cheap, it is not one of the cheaper markets. manus: many people have come on the show for the first seven months of the year and said, but the consumer has all these savings from covid lockdowns and furlough. of course, savings are being deeply dug into for revenge tourism, experiential moments out of covid. the savings rate in the united states of america is the lowest level since 2009. maybe we are just really underpricing how robust the consumer is in the united states of america. i was shocked when i was in the car and i saw that. the lowest savings rate since

2009. it is going to be harder than everybody thinks, isn't it? >> you have to put the lowest savings rate in the context of the highest in two years. our view is it will cushion the consumer who will not actually face a recession. any recession is liable to be a mild one rather than severe. manus: let's hope it does turn out like that for all of our sakes and hope the chinese end up closer to 5% than 4%. rupert thompson, investment strategist at kingswood with his calls and europe is going to be one of the most challenged on that slate of investment opportunities. the biggest producer of fertilizers in the middle east has reported an near fourfold

increase in second quarter profits. we speak to the ceo later in the show, delivering a $750 million payout as well on the dividend right here on bloomberg. ♪

manus: it is "daybreak europe. the aussies have raised rates. 50 basis points, pretty much average hike by the rbi. is this a dovish hike? there are greater minds than i that will answer that question. there is the aussie dollar, dropping. the big red headline and we mentioned it earlier is they are not on a preset path. what does that mean? does that give you optionality? inflation is expected to peak later this year.

it is projected at 7.75% over 2022 so it is still way ahead of the 6% estimate we had three months ago. let me show you the double market map. my favorite line in the aussie story as i was getting ready for this was, here is $15 a pint in australia. to your bond market, sovereign bonds, aussie rates down by 10 basis points as you can see. and it continued drop on u.s. 10 year government bond rates.

manus: from dubai this is "daybreak middle east."

tensions over taiwan. the white house urges beijing to refrain from action over nancy pelosi's expected visit to the island. this as joe biden says a u.s. strike killed a key planner of the september 11 attacks. asian stocks and u.s. futures selloff. treasury yields decline. traders keep a wary eye on development in taiwan. three times 50. the reserve bank of australia hikes by 0.5 for the third consecutive month. since there is no preset path, the aussie dollar drops. is it a dovish hike from the rba? they are saying inflation will top out later in the year. let me show you what is going on with angst in the market as poulos he is set to touchdown in taiwan. the rhetoric, goldman sachs say

the result, they are leaning into the potential as they see dovish messaging from the federal reserve. a short-lived rally on the back of the earnings. companies around the world will kitchen sink their estimates later in the fourth quarter. we state in the bond market. we had this spook yesterday. prices paid drops to the lowest levels in two years. we are on our way to 2%. bank of america say 2% in the next six to 12 months. dollar-yen rallies, one of the most aggressive rallies in six months. standard chartered say cyclical peak in dollar-yen, yield differentials may already be in place. the dollar itself of course belongs -- on its longest losing streak since april. copper is down very much on the guidance from the chinese of 5.5% as a guide level for growth, not a target, not a hard target.

copper is down 1.71%. let's get to jewels standing by in singapore. juliette saly. >> u.s. house speaker nancy pelosi is expected to arrive in taiwan later defying objections from chinese authorities. the visit would make pelosi the highest ranking american politician to go to taiwan in 25 years. the white house says the trip does not signal a change in policy. china has promised grave consequences for the visit. the man who took over the leadership of al qaeda from osama bin laden has been killed in a u.s. drone strike in afghanistan. president biden approved the strike and confirmed the killing of ayman al-zawahiri which took place in kabul over the weekend. the u.s. says he helped plan the 9/11 terrorist attacks. ukraine has laid out plans to ramp up grain exports following a third shipment since russia's invasion. this shipment was hailed as an

encouraging first step to unblocking millions of tons of crops and easing food prices. the first few weeks will be treated as a trial period with no more than three vessels passing either way through new safe passage corridors. china's top leaders told government officials this year's economic growth target is only guidance. bloomberg understands it was made clear gdp growth target of around 5.5% will not be used to evaluate performance and there will not be penalties for missing it. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much for the update. we are knee-deep in earnings and bp are expected to post a bumper profit as it records q2 in 22 minutes time. it is the last of the oil majors to report higher buybacks, dividend hikes, or potentially

in the cards. let's get to our reporter in london. bp comes on the back of a set of monster deliveries by exxon, shell, buybacks and cash flow are the hallmarks. will bp meet or beat their peers? good morning. >> good question. the market now is accepting bp's revenues match their fears, increasing buybacks, possibly a large dividend. much greater returns for themselves. manus: i have seen the refining margins expect to come in. is this performance likely to continue? how contingent is that on the profitability number on $100 oil

and this constricted gas flow story and the spike in prices we have seen? >> world oil has dropped. largely due to recession fears. as prices, it is much more difficult. in europe there is the fear that russia could gas this winter which could send prices skyhigh. on the refining side, profit margins heaviest so it does look like maybe this could be the peak for this year. then again we had the shell ceo sounding very bullish about prospects largely because even as western economy slows, china's economy is picking up out of covid lockdowns, so there is potential for very high demand to sustain high prices. prices soaring once again. manus: bernard looney is one of those ceos who many thought was

left of center when he ignited the transition story. the transformation of bp. you talked about the cash flow. where and how much of that will be here the narrative today in terms of allocation to transition and green? will it be the centerpiece of what lenny says to the investors? -- looney says to the investors? >> they want to channel any surplus cash into low carbon energy. they are showing no signs they are pivoting back into oil and gas just because we are in this period of high prices and fears of supply scarcity. i would not expect to see a different tune especially from looney. he is one of the first to embrace the energy transition. so yes, certainly some guidance about what they -- how they plan to reinvest future cash flow into low carbon energy and also the other big points i will add

is shareholders. shareholders have been with this company for many years and now they are getting a lot of money. they will emphasize that. manus: we have had the extraordinary one-off taxes or we are told they are one-off taxes in the u.k. and whether that will be something next year. we will see what he has to say about that. james, thank you very much. the bp numbers due in just under 23 minutes. let's talk to jewels. -- jules. >> australia's central bank has raised rates by half a percentage point for a third consecutive month. the rba increased its cash rate to 1.5%, the highest level in more than six years in a move expected by economists. governor philip lowe said further moves higher were expected but the bank was not on a preset path.

credit suisse has handed out more than $300 million in a single month to help retain top bankers. the latest payments, the bank reported a third straight quarterly loss and a change of ceo capping two years of management upheaval. more than 60 top staff members have defected to competitors over the past 18 months. there is a report estee lauder is in talks to buy tom ford. according to the wall street journal, a deal could be worth $3 billion or more. tom ford is known for its menswear though it also shares -- sells women's clothing and fragrances. interest shares fell more than 20% after it reported resilient sales end user numbers and elliott investment management confirmed a major stake in the company. the discovery platform says it had 430 million active users in the latest period broadly unchanged but better than analysts had forecast.

that is your bloomberg business flash. manus: coming up, the biggest producer of fertilizers in the middle east has reported a fourfold increase in second quarter profits. we speak to the company's ceo right here on bloomberg. ♪

manus: fertiglobe reporting a fourfold increase in profits. the company says favorable farm economics, low grain stocks, boosts the prices of the luxury based products. joining me now is ahmed k el-hoshy, ceo fertiglobe.

good to have you with me. another 750 million in the cash dividend, a comfortable beat. every time you join me the past three quarters it has been more good news on dividends and more be. what is the demand on tha sidet of the equation? >> we have seen entire price levels on the industrial side, a little demand destruction. when you look at the market together for ammonia, for urea, it is a tight market driven by the supply side where much of the production, you have 19 million tons of production sitting in europe today. they are paying much higher gas prices due to the situation in ukraine. that has tightened the demand picture and we see demand going stable. manus: on the production side,

this is what i'm curious about. every day we are covering germany to cap industrial energy flow. we are going to look at serious outages if the war endures. my question is this. do you expect any material reduction in production on the fertilizer side of the equation in europe? is that part of your roadmap? that these issues will play out on the production side? >> we have seen it over the last three quarters. one of the sponsors, one of the shareholders of fertiglobe has european production that has been curtailed the past three quarters. you have 19 million tons of ammonia production in europe. 7 million tons are off-line today. given what we are seeing, we could see more coming off-line. today's elevated prices for ammonia and urea, production,

much of europe is operating below cash costs. cash costs are significant higher. manus: is anybody going to go bust in europe? >> we have seen governments support these strategic companies throughout and one thing companies have done strategically like oci was actually continue to provide fertilizer to markets rather than convert natural gas into ammonia in europe and convert it downstream to nitrates in fertilizer, they import the ammonia. they import the stock and run it through their system. particularly when ammonia is trading below the cash crop with gas behaviors. that's what we have seen companies that can important to increase product and be in the green rather than the red. other companies will have a more difficult time absolutely.

given the unprecedented hydrocarbon prices. manus: how big -- as you say, europe, they are importing ammonia. how big will europe be for fertiglobe now and in the future? >> we have done pilot shipments of blue ammonia to east asia. to germany, in cooperation with one of our sponsors over the last year. we think with the advent of the carbon border adjustment mechanism which is being worked on by european commission, european council, and the european parliament, we will see more details, but when you start pricing carbon globally, blue is going to be interesting. not only will you use it to replace existing ammonia in europe, you could use it to replace natural gas. energy independence as well as decarbonization.

that is why we are working with oci heavily on their expansion of the rotterdam terminal which just tripled in size for ammonia in the last few months. much better hydrocarbon footprint. manus: it is bloomberg, you know that. so is it a billion-dollar business? a $2 billion business? what is the dollar ticket to put in the story? >> directionally it is much larger than that number but i am not going to say the exact number because there are many factors. not only commodity prices as you know, but the regulatory environment. how quickly infrastructure is built in europe is important. until then it could be a sizable business and can actually have a much lower carbon footprint as well as produce energy independence away from imported pipeline gas in europe which we think is a win-win for the european government. we want to accelerate that so we

have another source of energy into the european union. manus: you are getting good at not giving the exact number. you and credit suisse chairman must be in the same house of training. we are seeing the first shipments, the first grain shipments out of ukraine. this is quite important. quite a pivotal moment for the world. what will it mean for food prices and for your business? >> we are encouraged by the steps that have been taken over the last several months. we hope that tensions do come down. that can help a strained and critical low inventory market for grains to get some support. what we see in the business, even if you see more supplies, grain price weakness, still strong farm economics. there has been difficult whether in north and south america.

we hope that people will continue to see additional grain supplies into the market and fertilizer is going to be a very important way that fertiglobe provides to increase yields and increase our stock levels to put a cap on some price inflation. manus: every ceo, whether you're raising prices, etc., where is the most aggressive inflation? i'm using the word aggressive and that is very subjective, but i need you to give a real front end industry view. is it aggressive? is it papering -- tapering? is it topping out? >> we are seeing it a bit in the grain market right now. most of our cost is natural gas today in the middle east which we get from the various governments where we operate. we do profit sharing with governments in terms of suppliers, when we do better, we

share more on the gas side. we see have seen that in the labor markets the last year. human capital is our most important resource. people during our growth projects and in egypt are very vital to us. i continue to see it quite tight in the technical space. we are always looking for the best people but it does seem to be getting to that point where we are having quite a bit of success attracting people in the last couple months more than six to nine months ago when it was extremely tight. manus: well done. thank you in advance. thank you very much ahmed k el-hoshy, ceo of fertiglobe and oci. coming up, nancy pelosi sent to touch down, the highest-ranking american political visitor to

taiwan in 25 years. into the rising tensions of her visit on bloomberg. ♪

manus: let's get more on house speaker nancy pelosi's expected visit to taiwan, it comes despite objections from authorities there. let's bring in cindy wang in taipei. we have xi jinping warning if you play with fire you will get burnt. that seems to have stepped up a gear this morning. what is the tail risk of conflict? >> many people are watching very closely whether pelosi's visit

could spiral into crisis. it comes at a very critical moment because china is going to have key party congress in the second half of the year during which xi jinping is likely to seek his extended term. at this moment pelosi visiting taiwan will be the first time in 25 years for someone in her position to visit this democratically ruled island. pelosi's visit is also very sensitive due to her stature because she is second in terms of the presidential line of succession. that's why we see china warned the u.s. of grave consequences should pull oc visit taiwan and u.s. president biden made public comments that militarizing is not a good idea for pelosi to visit taiwan. it is very likely pelosi is going to arrive in taiwan tonight around 10:20 p.m.. she is scheduled to meet with the taiwanese president first thing tomorrow before heading to

the legislature to meet with lawmakers and legislative speakers. after that she is likely to have lunch with the president before heading to south korea. manus: it depends whether she stokes the fire of rhetoric or steps it back. the question is how the chinese will react. our top story is the pla have flown close to the median line on monday. the taiwanese defense ministry are confident of securing the island. it really is on the knife edge isn't it? how will the taiwanese react? >> the taiwanese so far, we have been quite calm here on day-to-day life, although you can see in the financial markets there certainly are investors showing their concern. pelosi's trip has raised angst in the global financial markets especially the asian and taiwanese financial markets. the end is rising this morning.

the taiwanese dollar is among the weakest asian currencies today. the taiex extended drops to over 2% today. certainly investors are concerned that volatility is rising in the financial market. asked how china is -- as to how china is, military action, the most likely thing. we have seen a spokesperson talking to reporters yesterday saying there are several possible scenarios for china's actions that could involve the military. missile testing in the taiwan strait like what happened in 1996. also it could have more pla warplanes violating taiwan's air defense zone. we could see warplanes passing the taiwan strait median line. manus: some serious scenarios if

they come to pass, reflecting scenarios we have not seen since the 1990. hopefully we will speak to you tomorrow. rounding off daybreak europe, it is about the aussies raising rates by 50 basis points. a lambasting of the fed in terms of their ability to step back. speculation the fed may pipit is overdone according to bill dudley. the sovereign bond script is what you must focus on. aussie rates down. u.s. treasury yields careening towards the line of 2.5%. "bloomberg markets europe" is up next. ♪

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anna: welcome to "bloomberg markets europe." mark cudmore joins us