dani: this is bloomberg daybreak: europe.

i'm dani burger in london alongside manus cranny in dubai. manus: stocks surge and the dollar slides of the most since march 2020 as its lower-than-expected inflation view was -- fuels expectations that the fed could slow the hiking cycle. >> the idea that we could cut rates early next year when inflation will be well in excess of our target is unrealistic. manus: disney shares jumped after new subscriber numbers top estimates and the company raises the price for its streaming service. earnings in four european majors, siemens and zurich insurance hitting the tape. let's have some rwe, 2.21 to

2.26 billion dollars is house -- how they see net income. they will spend more than $5 billion on green technology this year. they're looking up on that side of things, are urgently needed to make up for the supply independence and climate neutral. the chief executive said, about 30% more than it had planned at the start of the year. they will spend five to 5.1 billion dollars on green technologies. dani: you got rwe. let me get to siemens, earnings breaking and it is a cut to the full year profit forecast. it is all about siemens energy. you and i spoke of the company earlier this week. they have taken a 2.7 billion

euro impairment charge because of their stake losing value. this impacted their outlook. otherwise we are seeing strength on the demand side, orders exceeded expectations. industrial business profit exceeding expectations as well. strength except for siemens energy and weakness in industrial margins, 17%, expectation was 17.6%. elsewhere, it is the day after cpi. manus: it is indeed. just before michigan friday. i think the stocks have managed to bounce 20%. the question is, how much breath is left? dani: and was yesterday an overreaction, a gain of 2% in the u.s. equity market. we are seeing gains continue in the futures.

s&p 500 futures going up .2%, nasdaq futures up .3% which led the rally yesterday. the question is have we overdone it. we had fed speakers out yesterday, kashkari and evans talking about curbing expectations. can this keep up? the base dropped sub 20 for the first time since april. manus: or is that just a sense of complacency. let's talk about an unrelenting, unperturbed and unmoved federal reserve, what is their position? two year yields ramped, rolled and ramped again. dropping by 20 basis points on the two your paper yesterday, we

have clawed back 50% of that because the fed is clear, they have not seen anything that changes the narrative. kashkari has now pivoted to arch hawk. he wants to climb at 4% and hold there. the dollar rolled down, by about an eighth of a percent, curb your inner bear, that is what i take away from evans and kashkari. the worst day since 2020 on the dollar, down over 4%, and the swaps market has abated 100 basis points. you are looking at gas futures up. this is a closed market yesterday, cash flows, -- at cash close, you can see the palpable sense of fear going into the winter. rwe mentioned independence is

needed for supplies. let's get to the team. dani: we will get into the energy story. let's get to our team around the world. we will kick it off with michelle, who is covering u.s. inflation. manus: laura has the whole new world in disney. juliette saly has everything between cpi and michigan friday. inflation below estimates, the index rose half a percent, down from 9.1%. gas prices the main driver. neel kashkari says the softer reading does not change the path. >> the idea that we will cut rates early next year, when inflation is likely going to be well in excess of our target, i think it's not realistic. i think the more likely scenario is we raise rates, and we will sit there until we get convinced that inflation is well back down

to 2%, before i think about easing on interest rates. manus: let's get to our asia economy reporter. michelle, how does this impact the fed's strategy? they don't want to lose all credibility, do that? -- do they? michelle: the whole outline of what you and any have been talking about, the over exuberance ahead of the fed. we have been seeing this for a while. fed officials expect this would be the reaction. they see that take down by two notches in the year on year figures in cpi and they say no, do not read this as a change in strategy. now mary daly on top of kashkari and evans after the fed released saying, we will emphasize rate hikes and are not done yet.

they said that before the data and are saying that after the data. this is one month and does not change the trajectory. you will hear from like-minded economists, one month does not make a trend. and all too clear from someone who was the biggest doves and has now become the biggest hawk, as my colleague outlined, kashkari is coming for the fed funds rate to be 3.9% by year end, 4.4% by 2023. or hikes into next -- more hikes into next year as well. dani: disney rallied after hours reporting third quarter sales that beat estimates. they have overtaken netflix in terms of total subscribers but is taking action to support the cost of content. joining us is laura wright with

the highlights, and i assume now disney songs to sing for us. manus will do that later. >> as manus mentioned, we are entering a whole new world. total subscribers across disney streaming platforms, that includes disney plus, hulu and espn reached 221 million for the quarter. this is because of extremely strong performance at the flagship disney plus platform which added around 14 million subscribers, taking their total subscribers to over 150 million, not bad for a platform launched only in november of 2019. disney did walked back its subscriber guidance but the cost of content is heavy. disney's direct to consumer business lost over a billion dollars, worse than the street was expecting. disney are automatically introducing adverts on is the

plus and their bundle service. if customers want to avoid them, they will have to pay more, $10 99 a month. and if we have a look at some of the legacy businesses supporting the growth, parks was a bead on revenue of over a billion dollars. even though attendance is lower than 2019, customers are spending more when they visit parks. it was a miss on revenue for media and entertainment. the drag on profitability comes from that direct to consumer business. with the magic kingdom, the key is recognizing how the legacy businesses of traditional tv and parks are supporting the direct to consumer push. manus: i've done a bit of investigation. i'm not going to sing "a whole

new world," i had a career at cnbc, it ended after i saying presley. we don't talk about it, i don't know that tune. we can helmet together later. -- hum it together later. asian markets are extending their rally on softer than expected inflation data. good morning, jules. juliette: i'd prefer if you sang. we are seeing a rally across asian equities, extra in japan at the highest in three weeks as we see tech players lead the gains. and even though the pboc

monetary report did signal concerns about inflation, and analysts saying that raises the bar for whether you see further stimulus from the pboc. mark crandall puts it well when it comes to the hawkish fed speakers, bond traders in australia projecting another 50 basis points from the rba, too. we are seeing a pickup on the 10 year, and the korean won rising after the trade deficit. tech imports declining, signaling falling global demand. let's have a look at my chart which shows what is happening in singapore. the ministry of trade downgrading their growth forecast now to 3-4%, after we saw a contraction in the june quarter, year on year growth of around 4% but the concerns flagged about chinese lockdowns

and aggressive monetary tightening from central banks in terms of the outlook here in singapore. dani: jules, thank you very much. now coming up with manus and become it was the dollars biggest retreat since the start of the pandemic. we will talk about cooling u.s. inflation and its impact on foreign exchange. this is bloomberg. ♪

>> this was a good report. >> this data allows us to breathe a sigh of relief. >> is nothing like we are out of the woods. >> the fed has plenty more work to do. >> the fed is still going to hike in september. >> my call is 450.

>> 50 basis points. >> looks like it will be 50, 25, 25. >> that is still a ton of tightening. >> i expect the federal fed's rate -- funds rate will be three and a quarter. >> the that has not done enough to bring inflation down anytime soon. >> it does not change my path. dani: cooler than expected u.s. inflation will not change where the fed is heading. this impacting the dollar, off all of more than 1% as a risk markets rally. let's bring in the head of fx research at dz bank, is it overdone? do you fade that move or do you lean into it? sonja: it surprised me.

the market has been struggling between inflation and recession. we have had periods where it was more inflation and rate hikes, recession and weaker dollar. we have been inhibiting between two extremes. -- pivoting between two extremes. the market is very much back to traditional thinking. as we saw with strong labor market data last week, we are seeing euro-dollar already come off this morning. we will have to see how this pans out. there will still be a lot of volatility until markets see a clearer direction and have a better assessment of the recession risk in the u.s. manus: i like your top line, which is the upside is exhausted, and sometimes we look for excuses to sell. i'm trying to wrap my head

around what happens next, 100 or 75 basis points, your take on whether 100 basis points is now disemboweled completely? but it would be folly not to follow with 75 basis points, the fed has a window to stack it up and get ahead. sonja: forecasting the fed has been interesting not just because it has been difficult but because the market consensus changes from one day to the next. it shows how people just change depending on the data that is coming out. the fed is clearly on a tightening pattern. inflation is still a .25%, still very high. -- 8.25%, still very high and we still have a tight labor market. the fed has got to keep going

and then start slowing into the coming year. dani: sonja, translate that into her the dollar goes from here. you talked about the broken relationship between rate hikes and dollar strength, why his that and exhausted? sonja: what tends to happen is the dollar benefits from rate hikes speculation when it is being priced in. once rate hikes start, on in the past we have found that the dollar not only doesn't gain anymore. it might actually lose ground, because at that point other central banks follow through, the fed has tended to be first in line. we are looking for they've euro-dollar to have a slow crawl higher. the ecb is hiking, it is a more cumbersome process but it is happening. we are looking for the u.s. to go into recession. there is some downside potential here. but before people talk about the

downward trend, it will be a slow process because everywhere in the world is struggling, and it will be difficult to pick clear winners over the next six months at least. we are looking for euro-dollar to trade higher than 12 months, 1.08, nothing spectacular but i move away from parity right now. manus: no more sub-parity and perhaps even 1.08. the conjugation is that the fed is far from done, therefore the latitude for the ecb and -- dani: did an alarm go off there, manus? manus: we are having a bit of internal renovations on the roof above me. the economy is booming, the roof is moving. i was talking about sterling, wasn't type?

how much more latitude is the bank of england have? one more 50 basis point hike, could that be the first and last one, how do you categorize the momentum? sonja: the bank of some room to move. i'm not sure how much the market is pricing but there is definitely more in the pipeline, and more than one rate hike from the bank of england coming. they are looking to begin the quantitative tightening process. that's looking difficult because they are wanting to reduce the balance sheet and there gilt holdings, but they don't know who will be prime minister in september. that creates uncertainty because they don't know exactly what kind of gilt issuance they are dealing with when it comes to tightening.

it is difficult for the bank of england to balance. dani: how much does the trajectory of sterling, the bank of england change if truss is at the helm and tries to change the mandate of the boe from inflation to gdp? sonja: i think that is a dangerous path to follow. i think this will be the wrong signal, completely wrong. it is one of the oldest central banks and has a lot of credibility. intervention from the political side to change the mandate would be very risky and i think the market would react very negatively. currently trading at about 120, but on a string of fed news i would not rule out a move down. manus: a bad move as you say. let's see who takes charge in number 10, downing street.

coming up, samsung unveils the next generation of foldable pounds. -- foldable phones.

>> samsung has launched a slew of new devices ahead of apple's september event. then -- the new z flip 4 and fold 4. both phones are more durable. the fold 4 has a bigger internal display and is more compact overall. it now has a 50 megapixel camera. the flip device has an upgraded camera system and a better external display.

also interesting are the smart watches. the company launched regular and pro versions of smart watches do complete with the apple watch. the pro watch has 80 hours of battery life, which makes it one of the longest lasting batteries on the market. the company also launched new pro earbuds that give improved audio quality as well as a better competitor to apple. apple is also working on its own new phones, including four new iphones for release in september, as well as a new apple watch series eight. earbuds are not being left out either with apple planning to compete with samsung with airpods pro two coming later this year. dani: the latest on samsung's new technology, off of the back of warnings from chipmakers on consumer demand adding.

let's get the first word news. juliette: the crisis on europe's rivers is expected to worsen. the rhine river is set to become impassable at eight key -- a key waypoint in germany. it could drop to a critical level on friday, most votes will not be able to pass through, choking off energy and industrial shipments. the u.k. housing market is feeling the pressure of rising interest rates and a squeeze in the cost of living. the latest report from surveyors shows sales expectations are at the lowest since march 2020. new buyer inquiries fell for a third straight month. the slump has yet to translate into falling prices. the world cup may be moved up by a day. fifa is considering a request from south america to play the

opening match against ecuador a day earlier than planned. if approved, the tournament will start on november 20 and run for 29 days. 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. manus: jules, thank you very much. coming up on the show, it was the dollar's biggest retreat since the start of the pandemic. that after the cooling off u.s. inflation. we will catch up with the mliv team and see whether they agree. a hint of dollar exhaustion but

manus: this is "bloomberg

daybreak: europe." these are the stories that set your agenda. dani: stocks surge in the dollar thrives -- and the dollar thrives. but, don't count on cuts anytime soon. >> the idea that we are going to start cutting rates early next year when inflation is likely going to be well in excess of our target, i think it is not realistic. dani: magic numbers. disney shares jumped after hours. the company raises the price of their streaming service. plus, a big day in europe in terms of earnings. we have gotten results from companies. all those pmi numbers. the dollar sliding the most

since march 2020. manus: the dollar has chewed up a bit in the hiking cycle, that is the theory. let's look across the out. we will talk about equities in a moment. what have we got here? 10 year with two year bonds which dropped by 20 basis points yesterday. we are going to hike and rest and then we may roll. screwed up a third about percent. the dollar is clawing back ever so slightly. what we are seeing with the dollar is risk driven rather than pure yield play.

dollars are clawing a little bit back this morning. keep an eye on the prices in europe. how are your equities? dani: the sentiments could easily contribute to stocks. ideas and is not about fundamentals for the macro futures are continuing the gains at 3%. those are also higher as is the nasdaq outperforming that duration. how long can it last? if we are talking about technical, we did get a handle for the first time in months.

this could get volatility handles back. perhaps as you said, it is just complacency. manus: right. let's talk about the dollar again following the hawkish fed commentary, cpi prints and what does it mean for the dollar? let's put that to our end line reporter. you have had time in a bit of peace and quiet. you don't have to watch bloomberg for 24 hours to make up your mind on if it is dollar exhaustion. good afternoon. >> the basic reason is to play along with the data from year. i do think the dollar is

unlikely to go too much further from here. the fed shows that it is reading the data in a different way than how the market is reading it. the market has been focused on if we are at peak inflation. then, everybody can relax and the clock is ticking from widen the fed pivots. we have our inflation peak so, that is it. the fed is going, hang on. inflation is really high. core cpi, that has peaked some time ago. but they are still willing to hike rates. it has still proven sticky and they have not come down much. i think the fed officials are still really altered by what went on in the 1950's.

once inflation peaks and started to come down, they're almost worried about recession. but then, bank they have to hike again. dani: perhaps they are also hunted by the 1970's. things like shelter are trading upward. as manus was saying, you get a big reaction in risk assets as well. what does this mean in terms of how much pain there could be in a potential correction if we are getting bit up on risk at the moment over one use of data? >> one of the things going on is that data is sparking a lot of volatility. this rebound is a very tough potential situation. if we have peaked and the fed

will soon have bit, i think there is a small chance of that. and that will deliver gains. the problem is that if you are wrong, that will have to go a lot longer. there are several very high on a historical basis. the bond market is still telling you that a recession is very likely in the fed is saying they want a soft landing but they want to solve inflation even more than a soft landing. it has never looked riskier than perhaps right now. manus: there are a lot of great swans out there, from taiwan, china, growth at 2% to europe and the energy crisis up. if we monitor yesterday and set of michigan friday -- i'm

talking about the university of michigan, this could be the premise that pushed the floor to your dollar. michigan expectations are due out tomorrow. just how ingrained those inflation expectations are will that solidify the narrative for 50 or read night the trade or 75 in september -- or reignite the trade for 75 in september? >> inflation expectations are becoming anchored. it could be a major problem. we are in a little bit of a war situation as it were about what went on because of the two sets of data. even if that michigan reporter is denied, we still have jobs coming and in a lot of ways jobs

are really key because inflation is going to be above where it was. even if it is coming down, why would the fed stop hiking? dani: fair enough. our bloomberg mliv reporter. now let's talk to juliette saly in singapore. >> donald trump has refused to answer questions from the attorney general in an investigation into fraudulent evaluations. he invoked his fifth amendment right against self discrimination on whether you manipulated asset valuations. the deposition comes two days after federal agents searched his florida home. ukrainian official has told the washington post that a powerful attack in the occupied region

was the work of ukrainian special forces. the development would suggest an important role for covid as they are operating deep behind russian lines. she did not provide details on how the attack was carried out. these need -- disney is raising the price of their extreme ship -- of their extreme service. on december 8, they will raise the price of the ad free option to $11 a month. 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. juliette saly there. coming up, we will get to the results of zurich and halftime results.

and, a buyback of 1.8 billion swiss francs is on the cards. we asked the questions. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." i am dani burger alongside manus cranny. there are concerns about operating profits for the first time. they also plan a share buyback to offer resolution. joining us now is mario greco, the ceo of zurich insurance. walk me through the process with

this special buyback. mario: good morning. we promised from the beginning that we would neutralize the early exhaustion and this is what we are doing today. our capital position is incredibly strong. and our capital management process remains unchanged. that means that we will be able to silence and continue with that policy as we did in the past. we thought that this was the right movement to get the money back. after the sale of our german side. manus: that bakes the other question which we would ask a

ceo, could you just not find a deal to do? a year ago we said that big deals are a distraction, do you still believe that are you in deal breaking mode or do you still believe that they deals are a distraction? mario: yes, we are seeing that we have a strong organic plan and we have been executing this land over the years. we are delivering whatever we promised no matter what happened around that, within the businesses we demonstrate the businesses and optimize our capital position. we are often doing m&a, we did in the past and we will do m&a

in the future. we want to show shareholders that we do have the discipline. also, we want to maintain promises. we want to enforce this. dani: around europe, it is a climate crisis of huge proportions. the rhine is drying up. talk to me about the heat and the droughts that are incurring in europe. how has this been impacting by the and what costs are you expecting? mario: so far, we had an impact of national capacity. it was quite high but it was what we planned for. that explains why they are as strong as they are.

we continue to manage the exposure carefully. that seems to be the issue that we have to face. it will continue to have a bigger impact each year on the lives of all of us. manus: should we be prepared for a much bigger provisions in terms of catastrophe? is it time to raise, if not a red flag, a warning? mario: it is also time to manage the exposure in the books which is what we announced a couple years ago that we progressively reduce exposures in order to manage the impact. so far, we have been quite successful in doing that. we will continue monitoring

carefully the impact of it in our books and the proper level of exposures. dani: talk to me about exposures in the market. it has been volatile and challenging for everyone. how are you adjusting your position there giving the continued volatility in this market environment? mario: the market is very volatile. we are not overreacting to this. as an insurance company you adjust the assets to the liabilities. for us is around five years. we keep monitoring the development and we follow the asset movement for that we do

not want to overreact to markets. manus: five year bond yields around 2.29%, there is a huge debate about when we reach the top of rate hikes from the federal reserve. what are your thoughts and best estimates? as you look at where the top we too will be because that is linked to your business. mario: correct. we think we have seen the majority. we think something more will come but the biggest part of the journey is already behind us. this is clearly an improvement for us in the situation. dani: in terms of other impacts

of inflation, what kind of pricing impact do you have? are they moving faster than your ability to raise those prices? mario: what we still see today is the margins. prices over claims cost is still positive for us. it is in the commercial space. there are pockets of where this is not true. on totality of our books, the price increases are above claims costs. there is confidence and optimism about development in the second half of the year and over the years manus: -- years.

manus: we wish you well. ceo of zurich insurance, mario greco. coming up, joe biden calls this a once in a lifetime generation. competition builds, right here on bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe." we have those cpi numbers yesterday coming up after u.s. congress make progress in terms of past -- in terms of passing bills for inflation. manus: that is certainly a big part of the market narrative through late yesterday and today. one of the things is the new

legislation could unlock debt if biden could pass the bill into law. >> we are already at work here in the commerce department. we are in the process now of building a team. we will get the money as fast as we can. within months not years.

this is with qualcomm expanding in the united states. there will be a multiplier effect. it will be many times that. you have an estimate about it piggy thinking on the public? >> four or five times the amount, if not more. our goal is to maximize it. is the amount that we hope is enough and that is the way we will administer the program.

>> consider modifying the tariffs may be perhaps the best. i think we are wondering why it takes a long to figure out what to do with those tariffs? >> it is a big decision. the comp -- the situation with china is complicated, particularly after the visit to taiwan. biden is very cautious and does not want to do anything that would hurt american labor and workers. i know he is looking at it. we talked about it recently and i expect people be making a decision by tomorrow. behind this -- >> behind the scenes, i know we talked about it but are there is some back channel discussions going on that could lead to something

down the road? >> i would say yes, but they are limited at this point in time mainly because china has not been that interested to engage. we are trying. we think there is a benefit to having those types of communications. it takes two. hopefully china will be increasingly interested in having those discussions. dani: the u.s. commerce secretary there. that is it for us, i am off tomorrow. enjoy the rest of the week. manus: have a lovely day off. hopefully we will crash into the michigan sentiment. ♪

>> good morning everyone, welcome