♪ dani: this is bloomberg daybreak: europe. i am dani burger in london with manus cranny in dubai with the stories to set your agenda.

manus: the eu is set to proposed a mandatory target of power use and levies on energy companies' profit. extending gains leading into the u.s. cpi report. while the headline number has seems to cool. the figure forecast to rise. goldman sachs and hsbc among economic uncertainty. this as ubs share repurchases are set to exceed $5 billion this year. we have a feast of breaking news on banks. ubs upping the dividend, and going for a confirmation in terms of the size of the share buyback which will be $5 billion. a little bit shorter and quicker than we thought. dani: that is right.

just earlier this month, they had to abandon the deal to buy the general manager. it seems like scrapping this deal, they will be using the extra capital to exceed that target of $5 billion for this year, manus. manus: certainly, that wealth business -- putting his hand down on that and saying this is my deal. this was to buy the robo advisor. that was a deal he hung his hat on as being the way forward. accessing and building the presence in the united states of america. there is no doubt about it. why hold credit suisse stock when you can hold something that can give you $.55 come upping the dividend and buyback? dani: something that will weigh on credit suisse' mind. that is the story with ubs.

let me take you into other equities this morning. let me give you your futures check. euro stoxx 50 index down about .2%, breaking the four-day streak. some of that supported by the weakness in the dollar. we have seen the cpi tuesday, perhaps not as good of a ring as the friday releases. but we are waiting for that guide these markets a bit. marginally higher this morning for the futures. on the longest winning streak for u.s. equities since july. a flurry of bullish options activity. someone spent $80 million betting the s&p 500 would reach 4300 come december. those put calls ratios really skewing to the bullish side. we want to show you apple because that rally yesterday, ended the day just under 4%.

sales of the new iphone 14 max coming in way ahead of their last product launch, because i am sure as you know, everyone wants a new camera to launch their tiktok career apparently. manus: i am so over tiktok. we did one, that was a disaster. i'd look younger and better on the iphone max. dani, you talk about 4300. they want to spend 10 to $.15 on buying protection for the downside. no hard landing. jp morgan concurs with your chart. let me just show you a snapshot of risks. morgan stanley spoke and the oil market shook, quite literally. down a quarter of 1%. there is no imminent rally coming. the third quarter price target for brent, $98.

you will go through a recession, there will be a decline, in that russia's supply will be choked off into next year. they choked on on the 10 year bond option last night even though the inflation expectations from the new york fed all rolled over. we will debate that with the team in a moment. euro-dollar holds onto parity. they don't expect an implosion in europe but they think the energy prices -- crisis will take it down. i want to show you what happened in the immediate reaction to the building consensus that europe will respond with price caps, windfall caps, and energy demand caps. gas futures dropped by 8% at the close. dani. dani: let's get to some of the other top stories and our reporters from around the world. we will get the latest from maria tadeo in brussels. dan moss for a u.s. cpi print ahead. manus: jules has the very latest

on the asian market. it is a pretty punchy pboc. the european union is set to proposed this mandatory target to cut power use. measures to follow energy profits to consumers. for more, we will get to our european correspondent, maria tadeo. it is a three-pronged attack, maria. this strategy, does it have consensus? will all three dynamic parts of this plan get through? maria: yes, and, manus, i would argue instead of three, it is going to be two for the time being because i am sure when you look at the leaked document, it will presumably be approved today by the commission. there is no mention of the gas cap but it shows you how difficult it is to get consensus across the european union over what to do with gas. remember, some countries want to see a tax just on pipeline

russian gas. other european countries say there should be a general cap on gas prices. what we are expecting to be in the document, one has to do with taxation. you can spin this however way you want. they talk about companies in the fossil fuel industry but not based on gas, that would have to pitch in and contribute to a very cold winter potentially. the other one is about demand. a lot of experts say it is not about the storage. the real thing will be about demand, making sure you were able to destroy some of it given the fact that supplies are very tight. it will go from voluntary to mandatory, but the real question to me is how do you enforce this? the only thing i can think of is the commission is working with big buyers and big companies because i struggled how they can manage whether or

not households turned down the heating. dani: at the same time, in ukraine, we have seen this rapid advance -- perhaps it has caught many off guard, russia as well. what have we seen in the recent days as they have been able to take back some of these regions and push russian troops aside? maria: for the time being, what is clear is the diplomacy between russia and ukraine is broken. ukraine feels they have momentum. yesterday, i spoke with an advisor to president zelenskyy who told me, if anything at this stage, it should be clear to everyone in the west, the weapons do not mean escalation. if anything at this point, they should continue that supply of heavy weapons. the ukrainian army has proven it can fight, it will fight back, but it needs supplies. dani: we will hear more from that fantastic interview later in the show. thank you, maria. now, investors are looking ahead to tonight's u.s. inflation

report. hope it shows cooling prices before the fed's rate decision next week. the latest survey from the new york fed shows consumers expect u.s. inflation to ease in the coming years. let's bring in dan moss in singapore. a plateauing and flight -- slight drop in inflation expectations and we have seen the market react that way. is that optimism in a turnaround warranted? dan: i would emphasize that modifier at the start of your sentence, the word "slight." yes, it forecast it to be believed the year on year rate of inflation will slip down. however, 8% cpi is not a great look. the measure of the fed's 2% target is in excess of 6%. we've had a string of fed officials and tough forecasters indicating support for 75 basis points next week at the fomc

meeting. this is not a retreat. if we keep getting these kinds of numbers by the time we get to next year, by the time policy is in territory where it constrain activity, the conversation becomes a lot more interesting. are we ready for the shock of that news? we will have to wait to get there first. manus: indeed. the debate this morning was put nicely -- what is restrictive fed policy as opposed to destructive fed policy? we can debate that, i am sure, forever. dan moss on opinion with the team this morning. how are these markets faring? juliette saly went all the way to sydney. how does that look from the vantage point of the fed? juliette: you know me, i'm all about checking out how much revenge travel is out there. let's take a look at the asian

equity markets which are trekking -- tracking higher in anticipation of the report. being led by the tech players who have the apple suppliers rallying. do not be too cautious on how much strong demand you can see from china for the new iphone even though we saw a 60% increase in preorders in the first 35 hours in china. we are watching some weakness come through in some of the biotech stocks in china after president biden signed the executive order trying to bolster manufacturing in the u.s. when it comes to the yuan, let's look at how aggressively the pboc is trying to stem the weakness in the currency. you are still seeing a weaker offshore currency. a 14th straight day of a vix with a stronger buy. 195 higher than estimates. mark crumpton pointed out that is actually below 200 pips for the first time in a week which could suggest the pboc is easing up slightly. bloomberg intelligence saying a

weaker yuan may not do much to bolster china's exports. they have the china data dump coming through on friday. manus: thank you very much. i might have misjudged my job. it's up, ok. grand. i need to be taught these geographies. juliette saly in sydney. dani burger -- dani: yeah? manus: it's back at goldman sachs. two years, you were safe. but they do this at goldman. every year, you are in the lower model. 47,000 employees, 39,000 before covid. this is about a reappraisal who gets to stay at goldman sachs. i just wonder which division. investment banking pumping out a revenue drop. trading, a bit safer.

up by 32%. dani? dani: i was going to say i am not in sydney traveling around, so get your anchors straight. careful what you wish for. you issue would come back as a junior bankers. perhaps that is not where you want to be right now. it is not just goldman. it is also hsbc. they are talking about the fact that half of their costs are fixed pay. because of that, costs have been increasing. at a conference, we heard the cfo talk about the need to get brutal. stevenson saying of the only way out is to be pretty brutal on internal costs. he says the ceo and him have a bias on focusing on cost control over revenue growth. perhaps the safest place to be is not being a junior banker. manus: there you go. the reincarnation, i will have to reappraise. the language from stevenson -- the brutality on cost control.

that will come across businesses, not just hsbc or goldman sachs. you know what? let's talk about fx. head of fx strategy -- her call on the euro and sterling. dani: plus, strategist at barclays label speculation of a u.k. debt crisis as scaremongering. the bank of england hawkish stance should support the currency they write. we will get more on that later. this is bloomberg. ♪

>> inflation may actually rise further in the near term. like all components added to this high number, energy price inflation in the euro area is close to 40%.

illustrating the magnitude of relative price changes in recent periods. >> the ecb executive board member adding to the hawkish fire. at one point, all that hawkish noise from the ecb pushed the euro up to 1019. quite the remarkable turnaround. manus: we are showing on the chart here the open specs on the euro. we have only seen five periods where we have seen positioning on the short side and we are nowhere near extreme. take that piece of theater to jane foley joining us now. here's the debate. hawkish narrative, temporary reprieve for the euro. dollar rose off slightly, finally it takes a breath. if everything you have heard put a floor on the euro, or when you look at the positioning on the market, is this a temporary

floor? good morning. >> i would agree with a temporary outlook on this. certainly in any sort of move that we see in markets -- i think that's exactly what we've got both for the euro but also the dollar. the dollar has come back, retreated, a lot of profit-taking. the cpi data from the u.s. today. i don't think we have seen the end of dollar strength yet and i don't think we have seen the end of euro pressure. temporary reprieve is what i would view this as. dani: the chief economist over at iif was tweeting about this idea that perhaps it was contributed to the euro strength, but some of the progress ukraine was making against russia in the war, he says we should not be trading on that. do you think folks are actually trading on it? if so, is that a strategy you

would take? jane: it is not a strategy i would take. i could see perhaps on the margin, it could add to the hawkish view we have seen from the ecb. positions have been quite bias one way. long dollar positions. i think everyone understands this could roll on for quite a long time, the war. it is good for europe that perhaps we have seen ukraine pushback in the news we have this week. at the same time, this war is a long way from being over. europe is facing a very difficult winter in terms of energy supply and energy prices. that is something that will weigh on the euro over the next few months. manus: what happens -- because tom keene is in london, we have to do homage to what the pros look at. i know that tom is tuning in from the luxury of a hotel nearby. euro-yen, that is what the pros look at, but on a moderately serious note, we could be

running into roadblocks on the yen. i wonder where the biggest shift will come in your mind in the back quarter. is it going to be a strengthening of yen across the board and the crosses? jane: i think it is too early to look for strengthening of the yen. we have rhetoric coming from the bank of japan officials. there was no change in their very dovish view. yes, we've had a little wage inflation, but if they give up on the dovish policy now, the gains they have made will be lost. they still see japan as being in a position that the need to nurture those green sheets of inflation to try to get inflation expectations higher, to try to get wages higher. there are some structural issues in japan for so long. finally, they are beginning to see they could be in a period where they could change that

finally and they don't want to give up just yet. perhaps sometime next year, they would be in a position to perhaps push back a little bit against their very dovish policy, but they are not there yet. this means as long as the dollar is on the front foot, the yen is likely to be on the back foot. dani: i think that is such an important point. folks are saying 140 will break the boj. no, they don't have much inflation. they can tolerate more. at what level can they not tolerate? is there a rapidity the yen might move against the dollar that would cause them to act ahead of schedule? jane: to be honest, the central bank has softened the pace of the gains. again, you've got to remember it is the government that is in charge of yen policy. if there were an intervention, it would come from the government but it would be really tricky. i'm not expecting it to happen.

a, you've got a bank of japan that is really dovish. intervention could go completely against what the bank of japan is trying to do. also, politically, it would be difficult. for years, japan had communiques which are said market should be setting exchange rates. i don't really see actual fx intervention coming through. more trying to stabilize this yen and trying to take out the significant pace of the movement, but i don't really think the actual fx intervention is likely. manus: no, but it will have to be huge if they want a six-figure move and really change the narrative. quickly on sterling. you've got a pretty bearish call. we are going to catch up with in a moment. what i want to know -- is it

going to be funding energy intervention or is there going to be a policy mistake by the boe? by policy mistake, i mean they don't go punching is hard as they probably need to? jane: that would certainly be part of the mix. i think there is more in the u.k. than just the bank of england. you can trace this back to may when we had a 25 point interest rate hike at that point. it was really the growth story that really pressured down on sterling. heightening interest rates into a recession is not a policy effective. we could see this play out with the euro during the winter as well. i think it is really important now for the u.k., it is actually politics. what it does or doesn't do in terms of the northern ireland protocol could really buy back goodwill or not. this is really important because

what happens in terms of northern ireland and the relationship with the eu could impact on whether or not the u.k. could win a trade deal with the u.s. i think the stakes are quite high and what is very clear is the u.k. government has not persuaded investors that brexit is a good thing. i think that is what liz truss has to do and it will be a tough task going into a recessionary environment for the u.k. dani: we will have to leave it on that note. thank you for joining us this morning. jane foley at rabobank. coming up on the show, cutting costs. wall street looks to be embarking on job cuts in order to meet cost targets. this is bloomberg. ♪

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juliette: you are watching daybreak europe. the eu set to propose a mandatory target to cut power use. the move is a step towards rationing energy to help homes -- homes and businesses survive the energy crunch. other measures include funneling energy company profits to struggling consumers. the eu's executive arm will propose the package this week. there are divisions among member states. ukraine is seeking more weapons along with continued u.s. support to build on successes in retaking territory from russia. a senior ukrainian official told bloomberg the armed forces also need armored vehicles and tanks to secure victory. thousands of mourners have been queuing through the night to see the queens coffin at st. charles cathedral before it begins the journey to london later today. the coffin will be taken to buckingham palace and then westminster hall where the queen

will lie in state for four days ahead of the funeral on monday. 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. coming up, barclays pushing back against u.k. deficit worries. we will delve further into the fundamentals of britain's economy. that is coming up next. this is bloomberg. ♪

♪ manus: it is daybreak europe with me, manus cranny, and dani burger in london with the stories to set your agenda. dani: power down. the eu is set to propose

mandatory targets for power cuts and levies on energy company profits. inflation day. stocks extend gains leading into today's u.s. cpi report while the headline number is seen cooling, the core figure is forecast to rise. plus, jobs on the block. goldman sachs and hsbc plan headcount reductions with economic uncertainty and rising costs. this as ubs sees shares repurchases exceeding $5 billion this year. manus, happy inflation day to you. cpi hits after a risk asset rally, a weaker dollar, and showing we are expecting less inflation. the data confirmed or will go against that optimism. manus: it will put another brick in the wall of this 75 basis point narrative from the fed. of course, where rents go, that is where one of the bloomberg opinion columns. the rent and cost of housing is perhaps one of the biggest issues, never mind the drop in

the secondhand market -- car market. you have these rising euro rolling over into the dollar. it is your short-term reprieve according to rabobank. morgan stanley -- 7% rally in three days. morgan stanley cut the price target on brent and wti. they say there is no imminent rally. the fpr in america, the special petroleum reserve, release the biggest output on record. yields rollover, as inflation expectations drop to the united states. three year inflation expectations have rolled down from the peak of last year to 2.8%. euro-dollar still above parity. gas futures down 8% on the proposed remedies from europe to the energy crisis, from a windfall tax to demand curves. dani. dani: perhaps some optimism

there. the gas futures. goldman sachs says they are continuing to cut their expectations for risk assets in europe. that is for both equities and credit. we are seeing some weakness in the euro stoxx 50 futures this morning after four days of rallying. we also saw u.s. stocks notch their longest winning streak since july. slightly stronger this morning, up .1% for the s&p and nasdaq. nasdaq got a bit of a bump from apple yesterday due to strong preorder sales for the iphone. a lot of activity to the bullish side. we might not see a ton of price action before we get the cpi data later from the u.s. manus: we know the bond traders are a nervous bunch. dani, let's talk about scaremongering and fairytales. the strategists at barclays are saying that is the speculation you have on the u.k. deficit crisis.

seeing the deficit as it stands on the moment -- at the moment on the screen. they say that increased worries about the deficit are overblown and the bank of england should support the currency under unwind some of the underperformance. dani: let's get to someone who might be a nervous bond trader themselves. james, we have seen yields climb higher. estimates anywhere from 150 billion to 200 billion pounds of issuance we will get from the u.k. government on this energy plan. that is a lot of supply at the time the boe is unwinding its balance sheet. where is this demand going to come from? james: good question. it is one of the questions, one of the reasons really why we are not quite pro constructive on sterling. there is a confluence of factors here. very simply put, we have a very

wide deficit and there does not seem good reason for international investments to want to buy at this juncture, either cyclical or noncyclical assets. the bank of england is hiking, but probably not as aggressive enough to really get a grip on inflation which could well be heading to 10% or 15%, depending on government policy. and the economy is weakening into that tightening, so you don't really want to be in the cyclical space. issuance will be high to some of the fiscal programs that the new prime minister is talking about. and the bank of england may be unwinding its balance sheet. at some stage in the not so distant hopefully future, there might be a more constructive -- right now, it is difficult to see where the good news is. manus: there's a lot to unpack, but none of it is bullish from where i am sitting. we will come back to what to do

with the gilt yields and sterling to get the foreign money in. what fascinates me is, 200 million for energy remedy. that is step one of the energy remedy. can the gilt market in its current construct and liquidity get on board another monster issuance when we are about to embark on qt? could qt be delayed? james: that's a good question. the numbers they are talking about are pretty huge. when we have seen issuance numbers of that size in the very recent time, the bank was buying bonds very aggressively. again, most of these questions are not really a question of can they, it is just the price at which the investors will be willing to take down that supply. a number that large, such high inflation, gilt investors both

domestic and foreign will demand a yield higher than 3% or so on the 10 year in order to do so. i don't think it is a question of not being able to take down that supply, just wanting to see higher yields to compensate. manus: high risk does not have to be 4%? james: spot forecast are great way to end up with egg on your face. you are talking about 10%. if it wasn't for government policy, we might be talking about 20% inflation. the 3% or 4% yield, it feels like arguing around pennies and a pound. dani: in the meantime, we have this aggressive fiscal spending, a severe energy shock, and the slide in sterling. do you give credence to the argument that deutsche bank and

others have presented that might be a repeat of the 1970's with an imf bailout? james: worryingly, that is what they've been saying for quite a while now. the bank of england has really shocked me. hope has been a core part of their strategy. they have perceived on the basis they can tinker with rate policy to try to attain some semblance of credibility and buy time. it essentially means they have their hands off the trigger and hoping automatic stabilizers will do their work on inflation. that is incredibly worrying. and so, realistically, if you then start to talk about the energy shock, high inflation, a central bank that is not fighting inflation and a robust fashion, and you have a huge widening deficit, you put all the pieces together to really

create some of the challenges and troubles we had in the mid-to-late 70's which led to a three-day week, imf bailout, and a sterling crisis. manus: this is a fairly bleak picture you are painting, a very big reality check. i say that because this is critically important. i am away from home. i am outside the vortex you are in at the moment. you say hope is part of the bank of england's strategy. hope is part of the bank of england's strategy. if they are living on hope, what should they be doing? if you have the opportunity to give them guidance on what you think they need to do, what would that be? james: essentially, the fed recognized back in november of last year, its communication strategy forecast rate policies were not appropriate and engaged in a pivot. they continued to move more

aggressively to go through the gears of that moment. they recognized the inflation pressures were building rather than subsiding and they recognized the markets were not helping in terms of tightening financial conditions and helping them do some of the heavy lifting in lowering demand and lowering inflation. bank of england communication has been much more inconsistent between various members of the committee. they have been much more timid and some of the steps they have taken to raise interest rates, largely because of the growth output. from my perspective, the bank has overweighted the growth outlook in their reaction function, which went inflation is either side of 2% is understandable. but when inflation is 10%, 12%, or forecast to go much higher, i don't think you can afford to do so. stable price of inflation now such as the bank has commits them really to do so.

the lesson we have learned from the 1970's, the reason why we have the inflation target so central in central-bank mandates is that when inflation becomes -- regardless of the causes, when inflation becomes self fulfilling, that is number one. it is an economic wrecking ball. i think there has been too much foot dragging to this point. dani: i feel like you are not subtly hinting to some of the speculations of will liz truss try to change the target of the boe of growth versus inflation? are you concerned this idea we have weekly meetings with andrew bailey? are you concerned about the independence, and perhaps, a drift away from inflation targets? james: i have to be honest. i have some soup at the with that argument. not to say that stable prices are not a virtuous component of

what a central bank is trying to achieve. i think the singular focus on not just stable prices, but a central bank's interpretation of stable prices is 2%, that has been part of the problem to this point. we can all see that when prices are rising at the rate they are currently, that is a huge problem. i don't think anybody in the real economy can see when inflation was 1.8%, that was such a huge problem that it required a kind of stimulus we have seen in recent years. i think it's much more appropriate. you cannot judge the strength or the state of the economy by looking at a single variable. very complicated. now we live in a global world. there are often many global factors that are outside the control of domestic monetary policy. i think something much more holistic, but with some red lights on the dashboard. 10% would deftly turn on the red light in my opinion.

it is a position of strength and not weakness. from that perspective, i do have some concern. manus: this is probably one of the strongest conversations i've had in 2022. let's close with the other side of the trade. you said you can get your paper away if you offer a rich enough yield. you don't want egg on your face, i get it. 4%, maybe you get some paper away. the other side of that trade on deficit is you need to have a rich yield, but you also have to have a weaker currency. is that part of the wrecking ball that goes through? does it go through on the currency? does the currency need to deteriorate much rapidly to alleviate the situation or is that a bigger pain for the bank of england on the inflation narrative? james: it is complicated. there's lots of moving parts. yes, potentially weaker sterling may be part of the story. gilt investment is a slightly different story.

equities on an international basis because of sterling but what often sterling is weakening particularly in the environment we are looking at in the moment. it may be weakening because inflation is too high and that could deter gilt investors. i think investors would want to see stability and signs that authorities recognize the challenges and dealing with them appropriately, both on the fiscal and monetary side. and the idea that yields will stop rising and that investment will be profitable. that will be difficult to do in this environment. obviously, the issue in strategy will play a huge role in either 4% is a reasonable number or if it is closer to the peak. there are a lot of unknowns in there. manus: james, we're out of time on that. stability is not the word we would associate with sterling at the moment. what is stabilization and

currency for you, very briefly? james: the dollar is king. the greenback has been a wrecking ball. if we can find a circumstance where the dollar finds stability, i think we will see dollar weakness quite quickly. a lot of these other currencies are very cheap. manus: ok, james, you can come back. we will send you a car. james athey -- i know it is early. thank you for being with us. james athey with his calls on the wrecking ball through the u.k. economy and some pretty punchy calls on the u.k. outlook. coming up, ukraine vows to reclaim all occupied land as it works to build on the rapid advances in kharkiv. we hear from the advisor to president zelenskyy on bloomberg. ♪

>> the aim of the ukrainian armed forces and the president is to liberate all the territories that ukraine does not heavily control. in order to do this utmost task, we need more weapons and more artillery. we need ammunition, necessary ammunition for the artillery. >> ukraine says hopefully this year will put an end to the war. there was a theory for a long time that weapons meant escalation and that was a bad idea and that would only anger vladimir putin. would you say at this stage, everyone who said ukraine cannot fight back, weapons means escalation have been proven wrong? >> absolutely. they were fully mistaken.

yes, we had some positions before the war. let's not provoke the russian federation. let's be very cautious. look what happened. russia still had aggression against ukraine. now, i think they understand it. the ukrainian armed forces will not be able to master these weapons. dani: the advisor to the ukrainian president speaking to maria tadeo. and we are joined by maria now. very comprehensive interview. the backdrop of ukraine's recent success. did you get any more insight on how ukraine plans to build on that success on the battlefield? maria: well, i think when you listen to him, he was very clear

that the idea that ukraine -- what it needs now is weapons. those who argued ukraine is not going to be able to master nato weapons, while ukraine cannot be as advanced or as effective as the russian army. this is presented as the second-biggest army in the world. he says everyone has been proven wrong. he says at this stage, the idea there can only be talks with russia but no active conflict because that would anger vladimir putin, he says, please change course on that. you can be aggressive on vladimir putin and nothing will happen. for a lot of europeans, they still feel this is something you need to tread carefully but vladimir putin could still escalate the war in a number of ways. what it shows fundamentally is that ukraine, the way they see this, this is now a battlefield situation. this is now a war struggle, an active front. and diplomacy for the time being

is just not happening. manus: certainly, markets and the world have latched onto this narrative about the push forward from ukraine. one of the centerpieces of contention over the summer was really the nuclear plant and the threat around that. we saw lots of activity in terms of observers going down and shut down narrative. where are we with the nuclear plant, one of the largest in europe? maria: yes, this is such an incredible -- surreal, but so serious situation that is happening. we know that president zelenskyy has been on the phone with emmanuel macron, he's been on the phone with vladimir putin. the idea is this whole area could be demilitarized from shelling. they were trading blame. for the time being, none of that has actually led to anything or come to fruition. the ukrainians still say this is

our territory and it is the russians that need to step away. this is what i was told yesterday. >> unfortunately, the danger still exists. these tough measures like no fire zone are not good. the only measure that should be done is the complete withdrawal of russian armed forces from the territory of the nuclear power plant. this will be the best way. maria: he's advisor to president zelenskyy. manus, this back-and-forth between russia and ukraine, i would point to the words of the head of the atomic energy agency. he says ultimately, this is a war situation but you should never wage war on a nuclear site. this is a very dangerous situation. manus: great interview. maria tadeo with the very latest. coming up, wall street looks to

be embarking on a fresh round of job cuts to meet their cost of targets. more on the stories making the headlines in the bank business. this is bloomberg. ♪

manus: this is bloomberg daybreak: europe. i'm manus cranny. dani burger alongside me in london. we probably had one of the most insightful conversations about the gilt market in 2022. james athey saying you will have to fund yourself, there's always a price of where you will have to get your paper away. and that price could be well north of where we are at the moment. he didn't think 4% was unreasonable as a yield to get

to to get the paper away. we are at 3% at the moment. dani: that is really the crux of his argument. this is a market, 25% of those who hold gilt are foreign buyers. you need someone -- something to entice them. perhaps 4% is what you need. it is coming at a time where demand has evaporated because of the difficulties the u.k. market is facing. more spending, and more issuance and aboe that has started to embark on selling down the balance sheet. manus: they are about to embark on that qt. if you do another 200 billion pounds worth of funding with no qe, which was gouging the bonds by the central bank, how much more dislocated can the bond market become? we chat to one another during the interviews. "hope" is a core part of the bank of england strategy. you should put out the lights and go up if all you've got is hope as a central-bank strategy.

dani: it is a conversation that did not make me feel comfortable as someone who moved to this country and most of her assets are in sterling. if i can make an elegant segue, inflation has peaked in the u.s. we are getting that inflation data out later today from the u.s. manus: the inflation expectations rolled over. the new york fed which would put so much value on in terms of their survey data on the short end has rolled over. we will take their

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♪ anna: good morning. welcome to bloomberg markets europe. i am dani burger alongside mark cudmore in singapore to take us through all the market action. your