dani: this is bloomberg

daybreak: europe. i'm dani burger in london alongside manus cranny in dubai. the stories that set your agenda. manus: u.s. inflation comes in hot. a basis point hike. china and japan ramp-up efforts to bolster their currency. the japanese finance minister says tokyo won't rule out currency intervention. state of the union. radical steps as the eu battles its energy emergency. she outlines her plans to parliament today. good morning. we've had a ransacking of risk and a rate reappraisal in the bond market. breaking news in the past hour is about verbal intervention on dollar-yen. danny: they might be beat -- gearing up for more than that. the nikkei reporting that they

are looking at potentially arete check on fx markets there. it is seen as a precursor to potential intervention. manus: i wrote it down on my sheet this morning. there was a muscular flexing of the dollar yesterday. that tested the line in the sand for the bank of japan. there's been a ransacking of risk at goldman sachs. there will be a further testing time on risk. this is the moment where the banks of japan and the monetary policy, the finance minister intervenes. suzuki says he's concerned about the market moves, closely watching the market moves. we will collaborate with the bank of japan and monitor closely. punch and punch at a quarter of 1% which is the one -- line in the sand. yield curve control at a quarter of 1%. the bond market is testing that. the jet -- dollar-yen and bank of japan have called a line in

the sand. the dollar rolls down. it literally had a rapid rise yesterday, parabolic move in rates. we turn from 30 pips on the 2-year note from the low to the high. nomura put their stake in the gown -- ground. that hasn't been called for. that's not been guided for. will the fed dare to go out of sync with the comms? dani: money markets are certainly inching, running towards 100 basis points. over 80 basis points priced into the next meeting which suggests there are plenty of people out there betting it will be 100 basis points. that is setting risk markets on fire. let's do a quick check of where we ended the day yesterday. it was painful. and the nasdaq 100, not a single stock moved higher yesterday.

every single stock and the nasdaq 100 ended lower. those long-duration stocks getting absolutely decimated. it's the seventh time this year we've seen big tech stocks and down more than 4%. that's not the kind of move you would see in a bull market. this is bear market action. as far as where we are today, we are seeing buying back in the u.s. market but it's not enough to compensate for the pain that we saw yesterday. s&p and nasdaq up to tens of 1%. european stocks still sour. most of the losses in the u.s. market happened yesterday when europe was closed. really remarkable selloff in the last 30 minutes. that got us to below 5% in terms of a drop on tech heavy indices. manus: yeah. these growth assets are positioning extreme. bank of america made the point in terms of extreme bearishness. and a current is standing by to

round us through the brutal cpi print and what it means for the fed. then stephen suggests key standing by. dani: bruce einhorn will be -- bring us the details. juliette saly will take us through that global reaction to the hot cpi report. enda: -- manus: if it was brutal, it is hot and rising in some of the key parts of the economy. the inflation print coming in their at 8.3 percent. traders are asking, could the fed offer 100 pips in terms of a rate hike? is that risk live? the market seems to be incrementally pricing that. good morning. they haven't flagged 100 basis points or hammered at home in fed speak. would they dare go out of sync with the monster hike of 100 pips? enda: you have to think that a lot of options are sure to be on the table. there was a miss on headline and

core inflation last night, shattering the conversations. we were expecting gas prices to come down. gas prices came up all right but that wasn't enough to bring it down. stickiness and rental costs, medicine costs, and the price of food. that is driving up the headline and corine eggs. economists are saying that the inflation is more broad-based in the u.s. and more pervasive than anyone expected. to your point, that means the central bank is their only option now. they will keep going well into the end of the year with these large interest rate hikes. certainly bad news for the fed. a big step back in the inflation debate. a good reminder of how far the u.s. has to go before inflation gets back to its targeted area. dani: nothing to prevent the market from pricing and 100 basis points. we are in that fed blackout. thank you so much. enda curran.

bloomberg has learned the biden ministration is mulling re-flailing the u.s. crude oil reserve. we are joined by stephen sachin ski. they were transfixed by the cpi the other day. what would the reasoning be? stephen: there were two reasons. they want to provide support instability for oil producers. when you see these wild swings in oil, prices have come off in the last two months because of this recession and because of the idea that inflation has been rampant in the fed will clamp down. now, when you look at production in the u.s., the biden administration is worried that shale drillers will pack up if prices come off too fast. they are looking to provide support. there's another reason. strategic reserves are at the

lowest level in 40 years and they have to refill. two birds with one stone. you hope u.s. producers can provide stability to markets. the other side, you start to fill up reserves which do need filling. manus: those gas prices are down to 91 days. we watch what you do during asian programming. chart of the day. gas prices down. we are going to spend a little bit of time talking about the energy cap for europe. that's what ursula von der leyen wants to attack, get cash back to consumers. wants to put demand caps in. which of these policies is most likely to have the biggest impact or get it across the line? stephen: i really think when you talk to analysts, it is demand destruction. reducing demand into the winter. when you look at the inventories , inventories for natural gas

are filling quick and europe. without russian supply, there isn't enough to get through the winter. you need household to cut demand. one of the proposals is to reduce overall consumption by 10% and 5% mandatory cuts during peak hours. everyone agreeing to that, it's unclear. you need all the eu nations to agree to get the proposal across the line. there is still division. there are levees on giant earnings on energy companies. they will use that to go back to household. these energy companies don't want that. they've invested billions of dollars in their projects and they want profits. there's a lot of discussion that will be happening. hopefully a deal will be done before the end of the month, according to some of the policymakers. manus: yeah. 10% drop is not bad. a soft winter when it's not brutally cold.

let's see what they deliver. to china. the president is embarking on his first trip abroad in nearly 1000 days. he's heading to meet with vladimir putin. the ukraine war waging on. the u.s. may sanction china over taiwan. joining danny and i is bruce einhorn. good to have you with us. what's at stake on this trip? how important is it? >> it is his first trip outside of the country and almost 1000 days. since the start of the pandemic, he has stayed home. part of the broader effort by china to eliminate covid, a sign that is not unity rule in china. china is still battling covert outbreaks all around the country. we do have the president traveling outside of the country now for the first time. he will go to cause axon and

then tomorrow he will be in uzbekistan. he will attend a meeting of the shanghai cooperation, a group of many asian countries. he will be meeting vladimir putin. this is the first meeting between the two presidents since february, shortly before russia invaded ukraine. that meeting in beijing was when the two sides announced there no limits partnership. there will be a lot of attention paid to the body language between these two presidents when we see them. this is the first meeting since the russian invasion of ukraine which has not been going very well. dani: ok. thank you very much. let's check in on how markets are faring in the asian-pacific reason -- region. juliette saly, all attention moving to japan as they cope with the fallout from that red hot inflation reading and the

impact on japanese bond markets and the yen. walk us through it. juliette: absolutely. fighting fires everywhere. the yield curve control. we've seen some big moves, particularly in the last 20 minutes on that report you mentioned from the nikkei. the bank of japan has conducted its rate check. you saw japan's 10 year benchmark down. 0.2 -- 0.25%. the strongest words from the currency official and also the finance minister. they are concerned about these market moves. traders are pricing and when we could see some actual intervention in the fx market. that move by the rate checks is considered upper cursor for intervention. let's have a look at the yen. it is further away from the 145 handle. reports that it had been on the weaker move. now we are seeing strength coming through. strength in the offshore yuan.

pboc trying to defend its we currency. the strongest on record. nearly 600 more than what the market was looking for. we are seeing weakness coming through in the korean won on these concerns about the rate -- red hot inflation. all of that leading into a negative day for markets. we talk about the fact that we haven't seen the significant fall you saw on wall street. a loss of more than 2% on regional stocks with the like of japan and australia amongst the laggards. manus: thank you very much. juliette saly keeping the flow of moms -- news alive. larry summers with 100 basis points needed to enforce the fed's credibility. how likely is that? dani: veteran investor mark

mobius will be giving us his take on geopolitics in global markets on his central asia trip. stay with us for that. this is bloomberg. ♪

>> the core print for today was not fantastic. >> the markets are reacting to this. >> inflation is going down but not at a pace that the fed is comfortable with. >> the fed isn't going to blink. >> that's what they will do. >> the number is going up with november expectations rising as well. >> 75 is certainly on the table. >> there clearly isn't going to be a pivot anytime soon. markets continuing to predict

that the fed doesn't pivot and starts to cut in the second half of next year. that needs to come off the table. >> they will probably hurry it up. >> this puts the fed into overdrive. sooner or later, they are going to make a policy mistake. dani: the latest you -- u.s. cpi data. here's a look at where markets stamp. s&p bouncing back. all eyes turn to the dollar singing lower. the latest from the bank of japan. manus: absolutely. there's a complete reassessment in terms of the risk of a hike. at the moment, the market is pricing in a three basis point of hike in september. november, repriced. let's take a parabolic move in the rates market to a lady who knows a thing or two about this, camille de courcel. what a morning to join us.

what a j -- what a day to be alive. a hot cpi print. the debate is this. with the fed dare put 100 basis point hike and play next week, having not signaled that? good morning. camille: good morning. we still think that 75 will be made. actually, i think we all remember when it went to july and inflation was going into the peak and was even hotter than that. from that perspective, we would still think that 75 basis points is more likely. dani: would you then go so far as to say, as mark cabana has, that the fed is risking over doing it, pushing too far in their rate hike? camille: they have clearly

discussed monetary putney telik -- policy tightening. what we think is quite important, different from what the market is pricing, is that the fed should remain in restrictive territory much longer than what is price. we would expect the fed to restrict territory. 275 as possible. the inflation print is higher. indeed, as you have said, the fed will be mindful of not taking rates too high, too much. we are going to the end of the year. the economy will look a lot different. therefore, that should make the fed -- the fact that the fed will be above neutral finally

which would allow the fed to perhaps turn a bit more cautious. manus: do you think there will be a brutal slow down or hard landing? co-joined with a glide in rates, hiking and holding. do you think that's the construct going into 2023? how brutal will the landing be? camille: how brutal? we still think that all the options are still on the table. it could be a soft landing. it could be a nice soft landing. therefore, we have our own outlooks. economy growth going below trend. we are not forecasting a very strong recession or a lasting recession.

that's not in our outlook. for us, it's not really a story of a hot landing. the fed will probably need to lift rate expectations higher for a longer time. dani: how much higher? we have a market in the middle of next year that has moved is pricing from 4% to 4.3%. how much higher than that do they need to push? where do they need to set expectations? camille: it's more after that. 30% range perhaps with a hitch around 4%. but the market is still pricing after that. i think the fed is still trying to avoid the market at that price. the monetary policy was not restrictive enough. therefore, you would still have

a loosening of financial conditions compared to the fed cycle. dani: ok. go ahead. jump in. manus: the obvious question is, we are seeing pressure and u.s. rates. that's driving the rest of the european complex higher as well. what do you think this means for the ecb? camille: it sets a precedent. when you look at the press conference, the ecb has been very late to move. they have concerns about the potential lingering of inflation expectations. i think what's very interesting is that even though the peak of

inflation is behind us, inflation still remains very hot. this concern is about an anchoring of explain -- inflation expectations. if anything, can put any more pressure on the ecb to hike. next month, we are looking for a 75 hike from the ecb. we think that will be reached, probably as soon as the end of the year. manus: ok. camille, thank you very much. camille de courcel. 4.3% is achievable on the united states of america. the bank of japan in the finance ministry have pretty much signaled on dollar-yen. you saw the musculature of the dollar yesterday. i would say you saw aggressive moves in the dollar. here is your dollar yen we have the bank of japan and the finance minister indicating we

are monitoring, concerned and we will collaborate with the bank of japan. these are the lines that are coming down. the line in the sand has been set for dollar-yen. it's just under 145. verbal intervention, unilateral intervention. one could say the bond market will test the mettle of the boj as well. dani: absolutely. this is a bond market. we are at the upper bound of the boj policy range, above 25 basis points. this leads to the nikkei story. the bank of japan has conducted a rate check of fx, talking to its participants, which has been described as a precursor to more serious intervention. of course, the backdrop to all of this is the market pricing in a more aggressive fed, a rate hike expectation moving notably higher, a ferocious speed that we haven't yet seen. it is affecting japan, china,

reverberating through these markets. manus: they reckon 100 basis next week. 10 year in the united states of america at the highest since 2018. there has been a ransacking of risk across the board. the dollar is down 1/8 of 1%. focusing on the dollar-yen. if you wanted to move 56 figures, you need to two or g7 intervention. dani: coming up on the program, we will turn to europe. we will talk state of the union with the chair of the european people's party. stay with us for that interview. this is bloomberg. ♪

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♪ manus: this is "bloomberg daybreak: europe."

i am manus cranny in dubai, dani burger in london with the stories that set your agenda. dani: markets selloff. u.s. inflation comes in hot. calls for over a 100 basis point hike from the fed next week. china and japan ramp up efforts to bolster their currencies. the japanese finance minister says tokyo will not allow intervention. state of the union. ursula von der leyen will call for radical steps as the eu battles its energy emergency. manus, risk assets on fire yesterday, bleeding into today with that hot cpi reading. markets pricing in a 36% odds we will get a 100 basis point hike. those are reverberations felt across the globe. manus: there was a ransacking of risk from parabolic moves and implosion with a rates cut. i will trot along with a bit of dollar-yen.

verbal intervention from tsuzuki, the finance minister. 24 year low on dollar-yen. verbal intervention as actual intervention could be on the cusp. larry summers says the fed should put 100 basis points in play to reinforce his credibility, though the dollar rose. there was that muscularity to the rate differential story yesterday in the fx narrative. 2's continue to rise higher as the market re-prices. the possible risk of a 100 basis point next. and the possibility that they could decide to take on the bank of japan. dani? dani: risk assets really getting walloped yesterday. it is remarkable, as you pointed out to start the show, we had bank of america's investor

positioning, which they described as super bearish. despite that, it seems people are still holding onto something to sell. everything tumbles more than 4% but let me show you this morning's market moves because we are clawing back slightly in u.s. futures. i say slightly because after this steady decline of just tenths of a percent is not going to make much of a difference. european stocks center continuing to sink. i still cannot get over the statistic that every single stock in the nasdaq 100 dropped yesterday. manus: you love that. dani: i do. manus: since 3:00 when she was in the car, the biggest rise in rents since 1990. if you like a little bit of fast fashion off the rack, the numbers, top net sales, a beat on the estimate of 14.5 5 billion. get out there and shop or not.

online sales are expected to exceed 30% of the total delivery by inditex through 2024. first have sales are a considerable beat for them. on the ebit side, 2.43%, above the estimate. the stock is down this year. retail index down 36% so they are outperforming that. this is one of the worst performing sectors in the european market this morning. we will see what kind of price rises they're able to put through. gross margins stable. dani: pretty remarkable we have seen some of those consumer companies struggle. let's turn to asia, japan. nikkei reporting the bank of japan has conducted rate checks on foreign exchange market participants. it is a move considered a precursor to intervening in the fx market.

this as china extends its currency defense by setting its reference rate for the yuan with the strongest bias on record. joining us now is mark mobius, founding partner of mobius capital partners. thank you so much for joining us. the market really. global currency markets reeling from that hot cpi yesterday. can japan get these moves under control without more sustained intervention, without a type of g2 intervention? your thoughts this morning? mark: it is going down and down and the numbers don't look very good. i think what people are missing is that these inflation numbers are erroneous. we looked at the cpi, but that does not tell the whole story. would. hat we should be looking at is money supply. in the last two years, money supply has gone through the roof. all these countries had 30% increase in money supply, which

means a 30% depreciation of the currency, and that means more and more inflation. i think the cpi is kind of an erroneous measure but it's good enough for now. but i think it is going to be higher going forward. of course, bank of japan cannot control the. on the psychology of the mark -- cannot control that and the psychology of the market is going to be driving that. manus: good to have you with us. your expectation is a more forceful g intervention, whether that is g2 and what, stepping back from yield curve control? mark: there's no question that the fed has a game plan. their game plan is to make sure that the interest rate is higher than inflation. that's what they believe is the way to kill inflation. you have 8% to cpi.

that means you have to have 9% interest rates. we are going to see higher and higher rates if these cpi numbers keep on coming this way. dani: hang on, 9% interest rates, is that where you see the peak? mark: yes. if the fed had -- the fed has to raise the interest rate higher than inflation in order to kill inflation. that's the belief and that's the game plan. manus: you're making a call of 9% rates by the federal reserve of the united states of america? what, with more aggressive quantitative tightening? and what kind of unemployment rate? with -- what kind of unemployment rate would 9% rates deliver for the united states? mark: in america, the good news is you've got a strong dollar, which means american are going to be able to import things much cheaper than previously, number one. number two, you have a situation

where americans have lots of cash because their incomes from overseas are getting better and better. my recent visit, they said things are going well for americans, they are spending like crazy. very big shortage of workers. if you go into any restaurant or any shop in new york or anywhere else in america, you will find that they are looking for workers. dani: mark, do you have a number in mind? do you have a number in mind of what that actual unemployment rate would look like? mark: i think the unemployment rate is going to be much, much lower than say 5%. it depends on how you are measuring it that is my feeling. manus: it's going to take a lot to take this money supply down. can we just consider how they do

that? do you see 9% rates in the united states of america and a more aggressive qt is a way to reduce, in part, this money supply, is it through more aggressive quantitative tightening in the u.s.? mark: yes. but one of the things you have to remember and which is overlooked, and that is cryptocurrencies. i think the fed and people at the policymaking level are not paying attention to the cryptocurrencies which we see trillions of dollars of turnover. if you look at the cryptocurrency exchanges and how cryptocurrency is being created, this is a pretty big packet. cryptocurrencies are huge and they are having a wealth effect on many, many people, not only in the united states, but in the world. many people are holding these cryptocurrencies and feeling

wealthy. that's another point that is being overlooked by policymakers, i believe. dani: yesterday, getting that cpi number, that sent bitcoin lower by only 10%, and that is with the market pricing in a peek at just over 4%. what will happen to bitcoin and the rest if these money markets amvets start to coalesce -- markets and bets start to coalesce around 9%? mark: very good point. there is so many people with cryptocurrencies and it is a leading indicator. when they see the cpi rate moving up and they feel that, oh, the fed is going to tighten, they boost confidence, and therefore, they begin to sell their bitcoin and their cryptocurrencies. i believe that the cryptocurrencies, bitcoin is the leading indicator of what's going to happen.

manus: let's push that a little bit further, mark. let's extrapolate what you have given to da and ini. the risk is 9% rates, tighter qt. to me, and dani, and anybody else tuning in, that may imply a much bigger ransacking of equity markets than what we saw yesterday or year to date, down 5% yesterday. how much more wealth demolition will come in equities if the trajectory you have just forward comes to play? mark: you must remember we have already come down by a lot. we are in a bear market, no question about that. i am looking at maybe another 10%, 15% before people will wake up to the irony that there are some great companies out there that are beating inflation. they are able to price their goods higher than inflation

rate, and that these are going to be very good opportunities for investors. we are probably, when we look at the index figure, 10%, 15% down, but then there's going to be an opportunity to be buying. dani: that's the picture of american risk assets. but inflation, rate hikes from the fed is also hitting the most vulnerable, emerging markets as well. what happens to your em trades, to em risk in this environment? mark: well, if you look at em clancys, almost without exception -- em currencies, almost without exception, they have pretty much all come down. what that means is some of these countries that are expert oriented, they are going to be in a much better position to export to the u.s. we have to pay attention to those companies. and then of course, there are companies in these emerging markets that are doing very well domestically.

in other words, they are exporting software or products and hedging locally in depreciated currencies. we have to be looking for those companies that will be doing those. emerging markets index has been battered, mainly because of china, china is down substantially. at the end of the day, i think you will see some of these opportunities in emerging markets arising. of course, there are some countries like in indonesia that are exporting a lot of palm oil and other commodities that are doing very well. manus: you mentioned china. let's get your thoughts. we've got a zero covid policy, people are talking about a 2% growth level and we have intervention on the yuan. it's a pretty bleak outlook. a lot of people have said to us we can live without that china risk. how folly would be to live

without china in my portfolio? or how bearish are you on your outlook for china? mark: i think it's probably a good idea to have very low weight in china at this stage of the game because of the reasons you just mentioned. there are a lots of think -- a lot of things hitting that market, covid, the lockdown, election coming up, so on and so on. probably to have a low rating, yes -- low waiting, yes -- low weighting, yes. dani: mark, are you concerned about, in terms of what it does to china risk, the upcoming meeting or at least the potential meeting between xi and putin? mark: that's a very good point.

you know this, but xi has had a conversation with biden before this meeting. so, i think the chinese would like to play both sides, would like to keep both the u.s. stable so that exports can continue and trade can continue, but at the same time, there's no question that they are favorable to what putin is doing. it will be interesting to see how that develops. manus: mark mobius, thank you very much, founding partner there for mobius capital partners. big calls, mark. i will be looking for a shelter somewhere near you here in dubai. that is mark mobius, our guest this morning. 9% on rates, risky qt and you want to buy the debt. we are going to talk the

state of the union, the european union. the chair of the european people's party joins maria tadeo on the ground right here on bloomberg. ♪

♪ manus: it is "bloomberg daybreak: europe" with manus cranny in dubai, dani burger london. ursula von der leyen is due to deliver her key state of the union address to the european parliament later today. she is expected to call for radical steps to stem the energy crisis gripping the continent, edging closer to rationing measures and calling for a swoop on energy company's profits. let's get to maria tadeo on the ground in strasburg with a guest. take it away. good morning. maria: good morning, manus.

of course, it is an important that when it comes to the energy crisis that is top of the agenda in strasburg today. in the meantime, i am very happy to say we are joined by manfred weber, whole of course is the head of the epp delegation, also a member of the cdu in germany. this is a war that has been going on for more than a month's. are the sanctions really working? manfred: the sanctions are working. we see the effect on the russian economy. vladimir putin is really closing the future for his country. we have to be prepared. the main message from strasburg today, we have a plan, commission is presenting this. generally, there is a great backing and support. maria: there are some that say that one of the reasons the sanctions have not been as effective is because the energy sector is a moneymaker for vladimir putin and that has not been touched. is that about to be changed? manfred: we have reduced

dependency to rush a lot. 9% of european gas supply at the moment. that's why we did a lot. for half a year, it was a big step. that's why we are on the right track. that is what we are doing and putin feels it. now, it's a question of how to help our people. what we are calling for, the european people's party, we are calling for a winter of solidarity. we have to stay together. the poor part of our society, have to have social investment and we have to care about the business sector. the high costs for energy are really now in front of a possible recession, now our concern, and we are ready to answer this. maria: you mentioned the word recession, a word that scares a lot of europeans, especially in germany, a country still very exposed to the russian gas market. is an unavoidable? can you take the measures to get europe out of a recession? manfred: it is not a law that

recession is coming. we can avoid it. that's why certainty for the consumers, for the markets are most important. we present today some elements of this plan and then i expect leaders to act. macron has to [indiscernible] if you have a debate about bringing gas to the european market, macron as opposed to this. these kind of interventions in the coming market is unthinkable. we are strongly asking for building up now european energy market. that will create certainty. maria: it seems that von der leyen bets on two things, demand destruction and the other is to be able to cap prices. are you in favor of the idea of a cap? a lot of people say it may not work. it is a market that is very food. do you believe you can put a cap on prices and force companies to use less energy? manfred: it is a clear expectation from our side.

we speak about russian gas caps for the russian gas, so that is what is on the table and we support this. maria: you think it will happen? manfred: well, member states have to also come in so we need parliament to decide on these issues. they have to also come in. i think the arguments are obvious, especially towards russian gas. let's discuss it. that is only a small contribution to the overall goal we have in front of us. the most important thing is to have no certainty. i am expecting it at the next energy council meeting, energy ministers council meeting. we need certainty. we need a plan and we have to be convinced about it. maria: you're a politician, you have been in this business for a long time. there is the political aspect to this. what is your message to europeans who say i sympathize with the ukrainians, but my bills are so expensive, let's just stop it with sanctions?

this is not working for me. manfred: this is what i am experiencing in my constituency. they sent me a letter about high energy costs. he tells me putin is a war criminal, no doubt about this but what about my business? let's stay together. we are in war times. in war times, there's costs. if you are together, if you help each other, then you can really overcome. for the moment, i must say people understand this. we have in europe a kyiv moment, people understand that it's about our values. ukrainians are fighting our fight. for the moment, that's the key moment to bring us a result. maria: i have a final question. vladimir putin says it's going to be a very quick, easy war. looking back, was this perhaps the biggest mistake we have seen in centuries out of russia?

is this relationship done for good between the european union and russia under putin, no business as usual, it's impossible? manfred: yes, there's no business as usual. we cannot come back to the old system. that's clear. the sanctions must stay until the last soldier has left ukraine. that's clear. we cannot work together with russia if nothing happens. tens of thousands of people died in this war and that's a result of proven. he's a work -- result of putin. he's a war criminal. maria: the relationship at some point was ambiguous. it is clear to germany the relationship has changed. it cannot go back to what it was. manfred: well, i am center-right politician. you know in germany, there is a history with socialists there. they are more used to being friendly with russia. maria: and it was a mistake? manfred: big mistake. two big mistakes to increase the dependency on russian gas.

. it was a big mistake of the last 10 years. i think today, everybody understood that russia, especially under vladimir putin's regime, is not a partner we can work with. the ukrainians are winning territory back. it's amazing. nobody expected this. let's continuing supporting ukraine. let's stick to the sanctions and let's give [ indiscernible] maria: always appreciate the fact that you are very. manfred weber, thank you very much for joining us, head of the epp as we await from that speech shall wait for that speech from ursula von der leyen. we have coverage on global tv. dani: maria tadeo there in strasburg with the european people's party chair, manfred weber now, onto wall street, where we have gotten lots of warnings, everything from what's happening with markets to the businesses themselves. we heard from goldman sachs with

a note saying the bad year is about to get worse after that shock u.s. inflation prints. at the same time, there are warnings about business on wall street. j.p. morgan says investment banking fees may fall by half in the current quarter. citigroup weighed in on a similar call. volatility is good for trading revenues, but i wonder if there is about to be a lot of depressed m&a volume because of the jitters around markets that could dent some of the profitability in the investment banking business. manus: this goes back to a story yesterday. if the fees are down and you are not producing the money, then there is no honey. if there's no honey, you might not have a seat at the party. there is only one market story, i mean, it is the ransacking of risk which happened yesterday. the bond there's gripped the short end of the curve by the neck. you are looking at the belly of the curve since 2008. dollar-yen moving off to the 1.45 level.

do you have active verbal intervention from the finance minister in japan? that has dollar-yen down. i am surprised it is not more but you need perhaps a g4 intervention to really reprice dollar-yen. dani: we were just talking to mark mobius, who says the fed has a game plan. their game plan is to push rates higher than inflation, so his call is 9%, manus. this is a market pricing a peak far under that, 4.3%. manus: that's a heck of a call. let's see how the rest of the trading day goes and what ursula von der leyen delivers. " is up next. this is bloomberg. -- "bloomberg markets: europe" is up next. this is bloomberg. ♪

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♪ anna: good morning. welcome to "bloomberg markets: europe." mark