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>> good morning. i am dani burger in london and these are the stories that set your agenda. inflation headaches. japanese cpi at three decade high, piling pressure on the boj to justify continued monetary stimulus. the fed begins its today meeting. an avalanche of central bank decisions this week with an expected 75 basis point increase. plus, easing restrictions. hong kong waves covid measures and china banks hold their banking lending rates. >> they have been less eager to really stimulate this time. that might be good for their economy and for the long run, but it means the number two economy in the world is not really jumping forward. that puts more burden on the u.s. dani: pressure really everywhere

as we have a week kicked off i by by the banks today. will there be a week of hawkish this from central banks? two year yields bumping up to 4%, 10 year yields heading 3.5%. the equity market is not quite heating the morning -- warning. we will get you that in a second. up about .2% of the s&p 500 futures. goldman sachs says we are not near peak hawkishness. however, equities are rallying after a bruising week last week. we did see some pricing come down in terms of the terminal rate, but now slightly under which is perhaps giving room for the equity markets to consolidate. even inflation warning, saying they are paying more in supply

costs for ford, sending the stock down. that is not enough to scare the future markets. it was fedex last week that could scare the future markets but the corporate news is being priced in. let me show you what the bond market is doing because i told you about the surge in yields yesterday. the 10 year yield a slightly softer. two year yield slightly higher but not much movement so far this morning. euro-dollar is slightly softer. it has been a story of euro that has been able to post backup above parity. perhaps it has to do with european energy prices falling for three consecutive days about 60%. finally, bitcoin, what a bruising session. at one point it was down 6%. it is now trading above $19,000. really would not see the volatility by looking at the headline price but it is a sign of a market under stress, that is volatile the head of these central bank earnings.

let's check in on how the asian markets are faring. here's juliette saly. what are you looking at? juliette: it is all about the reopening trade in hong kong. chief executive john lee and officials are close to coming to an agreement to end hotel quarantine and instead insulate a seven-day mandatory at home monetary system. this is the reopening play if you look at the likes of cathay pacific. many of us waiting to get back into hong kong. all rallying and outperformed what you have seen in the broader hang seng index over 2022. this is the greenline versus the blue line of the hang seng index. let's look at how hong kong stocks are rallying. up by one point -- 1.5%, helping the regional benchmark. the pboc trying to defend the weakness in the yuan. a 19 straight session of a

stronger vix but you are seeing weakness in the offshore currency and calls we could see 7.25 as you see the diversions between the pboc and the fed. watching the yen too. japanese inflation at a 31 year high. how does that complicate things for the boj as they continue their accommodative stance in terms of monetary policy? dani: thanks so much. jules, you are never too far from the reopening trade story. weren't you just in sydney? you are already back in singapore? juliette: i am. 11 hour flight for me. three hours on the tarmac. we forgot how much of a headache it can be. dani: juliette saly leading us to a world back to travel. still traveling. thank you so much. let's get to some of our reporters from around the world for today's top stories. we will talk about yields that move in u.s. treasuries with garfield reynolds.

and breaking down the reopening in hong kong. dan murtaugh in beijing has the latest on the global energy picture. traders are on edge ahead of a key fed decision with two-year yields of the u.s. climbing towards 4% for the first time since 2007. let's bring in garfield reynolds to break this down. we should say that the tone will be set today by the risk bank. are we looking at the peak in yields or is this the beginning? garfield: a lot of investors are concerned this is just the beginning. the concern is that the boe, and this week for the fed, they are going to feel they need to go significantly higher. and that even if after this month's large, outsized hikes, they might be looking to slow

the pace, the impetus will be on keeping it higher, potentially higher terminal rates. until it is clear where those peak terminal rates are, it is very hard to see a sustained turnaround in yields. if the fed 75 basis points and stays aggressive, that could send the two-year above 4%. if it pulls back a little bit from here, there is a chance that any one particular data, whether it is pmi's or other surveys that come in stronger-than-expected, or if we get jobs at the beginning of next month that show the jobless rate is still low and wage pressures are still high. all of those things along with potential for fed commentary about that, they consented treasury yields above 4% on the two-year and send them significantly higher. dani: i know yesterday, we were talking about all eyes moving to

the dot plot. thank you so much. bloomberg's garfield reynolds. along with u.s. yields that are pushing to 3.5% and the 10 year, a lot of pressure for japan which had inflation rising at its fastest pace in more than three decades. that excludes tax hike extortion. it creates this headache for the central bank this week as it seeks to explain why it needs to continue with monetary stimulus. for more, let's get to bloomberg's chief asia economic correspondent, endo curran. we have higher than placement -- higher japanese inflation. at what point do they blank with the pressure emanating from u.s. yields? >> this is the big question. japanese inflation, core inflation at 2.8%. the increase in energy and food prices. some evidence that the inflation story in japan is becoming more

broad-based. that is raising questions about how long japan can remain as a holdout in terms of negative rates, and the massive money they put into the economy. the bank of japan decision is due on thursday. most people do not think they will change compared to their peers. with inflation heading into the wrong direction, there are questions of whether or not the boj would give it or modify their policy in the near term. dani: we are also looking when it comes to hong kong closer to opening up. we learned differences coming to the hotel quarantine policy. what are those changes and what is the impact likely to be? enda: we are basically getting messaging from the government that they are moving towards eliminating the requirement for hotel quarantine for arrivals in hong kong.

they don't have a final timetable or the exact details on what they are planning, per se. indications both from the local and central government in beijing saying that quarantine will be reduced because cases are going down and that covid is in a manageable position than it has been. hong kong will relaunch itself over the coming months. we are still waiting on the timetable and details on when this will be rolled out. dani: thank you very much. enda curran. the german government has set aside billions of euros for gas purchases in an effort to stave off an energy crisis since russia cut off its supplies. for more, we're joined by dan murtaugh. we have seen some reaction in the european gas market, falling 16%. what germany is proposing, what are the details? how likely does it seem to help support this european economy to the winter?

dan: germany set aside 1.5 billion euros already to buy lng cargoes to make of a russian supply and they have burned through almost all of that. they have set aside an extra 2.5 billion euros. the reason that lng cargoes are so expensive, they are going for $130 million of cargo. two years ago, it was $12 million. they are putting money aside to buy enough spare gas to make it through the winter. whether it will be enough or not is still really on a thin line. it will really depend on how cold the winter is, how much heating demand is driven up, and how much germany and european nations will proactively destroy industrial demand and leave enough gas for homes. dani: ok, dan, thank you very much. certainly about curbing that demand as well. now, let's take a key look at some of the things we will be watching out for today. 8:30 a.m. london time, one of

the first rate decisions to go. sweden policymakers expect to raise rates by 75 basis points. how will that set the tone for the rest of the week? 1:30 p.m. u.k. time, u.s. housing data. watch for the effects of higher mortgage rates. 6 p.m. u.k. time, u.s. 20 year bonds options. the treasury is planning to sell $12 billion worth of 20 year bonds. is there still appetite for duration? finally this evening, the ecb president christine lagarde will give a speech. next, we will talk about whether the strength in the dollar can continue, what you should be looking for in this very busy week. we will be speaking to the commerzbank fx strategist on all of that. plus, back to business. the 10 day grieving for queen elizabeth comes to an end. stay with us for that. this is bloomberg. ♪

>> they have been less eager to really stimulate this time. that may be good further economy and for the long run, but it means for the world, you have the number two economy that is not really jumping forward. that puts more burden on the u.s. the runway for the government and the central banks to go is the focus more on production. how do you get more things out of the economy? that makes -- that means you won't have to do as many rate hikes. dani: world bank president david malpass giving his thoughts on the inflation problem in china. it is a big week for central banks. in number of players had to reveal their latest rates. first, it is the turn of sweden's bank which kicks off

proceedings later this morning. joining us now to help us set up for the week is esther reichelt from commerzbank. thank you for joining us. it is a lot from the fed to the boe. where do you see the most opportunity for surprised, the most misalignment on this market pricing? esther: maybe not misalignment, but the biggest uncertainty is to how the fed will address its projection. it is not the rate hike. there is the potential for surprise whether they hike 75 basis points or even 100 basis points. the most important thing for the fx market is what they are showing afterwards, the outlook. dani: i want to take you into our charts because valerie, our markets editor, made this good one showing what it looks like in terms of financial conditions. financial conditions actually at

this moment are looser than when they did the first hike in march. how much do you expect the fed to try to change the market's perception of a pivot next year and perhaps engineer more of a selloff in order to tighten some of these financial conditions? esther: i think that is basically what they are trying to do all the time, right? they are sounding super hawkish. they have hiked quite aggressively and still it is not efficient to get ahead of the inflation development. inflation continues to surprise to the upside. we need tighter market conditions to be sure expectations are actually moving to the right direction. there is still the fear of the anchoring of inflation expectations and we need to see something from the central banks to actually avoid that in the long run. dani: the argument has been made that the biggest risk is not a de-anchoring of inflation

expectations, instead it is over tightening. do you give any credence to that? esther: well, yeah, that might be true in the long run, but the question is what is the bigger risk right now? i think right now with inflation being so far above target, there is the fear of -- the danger of doing to less than too much. if you are doing too much, you can cut back and start cutting rates again without having severe consequence on expectations. you have a recession, that will recover as well. the bigger fear right now for the banks is doing not enough. dani: that is somewhat reflective in this bond market, seeing two-year yields nearing 4%. 10 year yield yesterday, 3.5%. amid all of that, i dollar stuck in the range. if anything, it is softer since the end of last week. has the link with between and relative rate changes finally

been broken? esther: i don't think so. i'm not even sure the relative rate changes are pointing towards a stronger dollar. in the end, the fed sets the tone for the other central banks. they are going to hike most likely 75 basis points. just a few months ago, it was an extraordinary hike nobody would be considering. now it is the new normal. that's why these projections from the fed are so important because they are not only setting the tone for the dollar, but for all the other central banks. if these central banks don't follow the fed, then they are going to see a stronger dollar. if some banks are following the fed in their aggressiveness, we are not going to see these big changes at the fx market. dani: there seems to be the narrative. you have the bank of japan,

china as well when it comes to that, but specifically japan. you have a bond market that is willing to test kuroda. there were reports of them doing a rates check at various banks, perhaps looking at some form of either abandoning the yield curve control or intervention. at what point does the boj blink? esther: i think it will depend a lot on the development -- they have had bad experiences with intervention in the past. there is not a high hurdle on that. i think they will start sounding more hawkish on the monetary policy. dani: how much is too much, esther? esther: i think the highest we have seen so far -- 150 will definitely be a mark to watch there. intervention will become more aggressive on the way up there.

we have seen inflation this morning, it is not sufficient yet. they still have a lot of moving parts. dani: that is such a good point. it is not the same inflationary environment of the u.s. and europe so they can have more patience. before we let you go, i want to dive into europe because we saw some pressure that did not play out in hungary, in the currency there as well. there is a threat of the eu of taking away funds because of corruption. hungary says they will participate. we are seeing more populist governments come into your, whether it be sweden, the upcoming election in italy. how much of a third are these populist governments that perhaps skews these debt limits set by the eu and ecb? esther: i think that's actually a severe danger. in particular that we have this new ecb tool of transmission

protection. there is the tensions between these pro-eu governments and more of the skeptic governments will increase. the danger is it will make it even harder for the eu and ecb to move and to decide. i think it is getting more urgent and this will be more problematic in the future. dani: ok, i'm afraid we have to leave it there. thank you for joining us. esther reichelt at commerzbank. back to business. queen elizabeth's mourning period has come to an end. we will take a look at the u.k. agenda now. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. i'm dani burger. the u.k. begins to get back to business today after the funeral of the queen and the 10 day mourning period. markets will be open again after yesterday's break and parliament will be back in session. lizzy burden joins us now. you were staked out right by the seemingly never-ending line snaking through to see the queen lion and state, capped off by her funeral in windsor. going through it all, what stood out to you in this period of mourning? lizzy: standing and listening to the organs from the funeral, you can hear it from where we were west of westminster abbey. what stood out to me from the funeral service was how much thought went into it. this was obviously years into planning and how much it said

what meant most to her. she let the people in. this is the first fully televised euro of a british monarch ever. just as her coronation had been almost 70 years ago. it was interesting how she was honoring her people, in that she had people who had received the victoria and george crosses among all those foreign dignitaries from around the world. joe biden, the emperor of japan in westminster abbey. also, the huge not to the commonwealth with the procession from westminster abbey led by the canadian mountie. every moment of that day was symbolic. dani: we are looking at some of the pictures from yesterday. it really was beautiful in terms of the setting and the service itself. in this mourning, there has been a standstill from the government. it is still a volatile time, whether it is the energy policy

or new prime minister. what is on the agenda for liz truss now that the funeral is over? lizzy: the government has been in a sense of suspended animation because of the funeral. the announcement of the queen's passing, she did squeeze in the energy bailout for consumers. now we are respecting her to follow up with a bailout for businesses. we are expecting an announcement on the national health service and how the government will clear the backlog which should help reduce the inactivity rate, which should help reduce the tightness in the labor market which is pushing up inflation. the big thing we are expecting this week is the mini budget from the chancellor. this is the chance to walk the walk on all those tax cut pledges made during the leadership campaign. we are also expecting him to set a gross target of 2.5%, which should be something a bit like -- if it doesn't boost growth,

it is not worth doing which seems to be at the heart of truss-onomics. dani: we've only got 30 seconds. the boe, what are we expecting? lizzy: between 50 and 75 basis points. our economists reckon it will be 50 because of the energy bailout. the big unknown is the mp member . we don't know how she will vote. dani: thank you so much. lizzy burden giving us all the latest on the u.k. coming up, mounting borrowing costs and faltering market sentiment hits bond sales. what does it mean for private credit? we will discuss that next. this is bloomberg. ♪ when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working.

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dani: good morning. this is bloomberg daybreak: europe. i'm dani burger in london. inflation headaches. japanese cpi hits a three decade high, piling pressure on the boj to justify monetary stimulus. rate hikes in play, as the fed begins its meeting, sweden's bank begins an avalanche of central bank decisions this week with an expected 75 basis point increase. easing restrictions. hong kong waves covid measures and china banks hold their cute lending rate ahead of the world bank gets out of beijing's reluctance on stimulus. >> they have been less eager to really stimulate. that may be good for their economy and for the long run but it means for the world, we have the number two economy that is not really jumping forward. that puts more burden on the u.s. dani: will the fall in bonds

taking a pause, giving investors enough to go ahead and buy futures this morning ahead of a flurry of central rate -- central bank rate decisions. we were talking to esther reichelt who was talking about the fed setting up hawkishness and the pressure this is piling on. equity markets are higher by at least .3% when it comes to the s&p 500. ford fell 4.4% post-market yesterday after warning about the impact of inflation of having to pay suppliers more. that is not enough to tip over these equity markets. they had one of the worst weeks last week since june. some consolidation to start the week. the cash market did gain yesterday. u.k. is back online so you might have higher volume today. also, to the fx market in general. the euro is hanging tight so far this morning. we have seen the dollar active bit softer so we are looking at

a euro at the dollar that is hanging just above parity. 10 year yield, to year yield or both hanging tight as well. yesterday, 3.5% on the 10 year yield, the most since 2011. two year yield bumping of just against 4%, the highest since 2007. this is a market gearing up for a hawkish central bank. bitcoin fell yesterday to enter the date above $19,000. it is still around there at this moment. it is the lowest since july, but some of these big risk assets, the higher beta assets, a lot of nerves around them heading into the fed decision on wednesday let's get to other top stories with the first word news with juliette saly. juliette: hong kong's chief executive says the city wants to relax the covid measures that have made travel difficult for nearly three years. john lee says officials are

actively setting new quarantine arrangements with the decision to be made soon. the south china post reports they will stop seven-day home monitoring. the u.s. is to release 10 million barrels of crude from its reserves ahead of the eu's ban on most russian imports. it comes as global oil prices retreat to levels seen before russia's ukraine invasion. with opec having possible cuts. japan's inflation has set this up this pace since 1991, excluding tech hike impacts. growth at 2.1% in august from a year ago, slightly ahead of forecast. higher electorate he prices -- electricity prices were eight factor. the world bank president says china's unwillingness to deliver more stimulus during the current global slowdown is putting pressure on the u.s. to support international growth. the bank warned an aggressive

way for policy tightening could put the global economy into a recession next year. ford shares tumbled in late trade after it warned supply costs are running above expectations in the current quarter. the u.s. carmaker reaffirmed earnings but signal shortages will keep its inventory of half completed vehicles elevated. 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. dani: thank you so much. now for potential borrowers looking to sell fresh debt in the u.s. ig primary market stood down amid faltering sentiment. estimates of new bond sales this week may be difficult to reach with negative market sentiment ahead of the fed's meeting on wednesday. joining us now is bloomberg's asia credit team leader

catherine bosley. we have these high-grade bond issuance is. how much of it is a lead up to the central bank decision versus a wider issue for the liquid credit market? catherine: it has been a bad time for bond deals globally. it is not just the u.s. asia has been absolutely terrible with the weakest issuance in a long time. some of it is positioning ahead of the central bank interest rate decisions, but the markets are pricing in certain amounts of tightening and a lot of it is simply is the cost of capital is rising. dani: what does it mean in terms of concessions that some of these lenders are having to take? for example, the citrix bond sales being brought to market. a group of banks being led by credit suisse has to sweeten the term. what have we seen and how big of a trend is it? catherine: obviously, it's

harder and harder to get bond deals over the table. so, you have to, you know, sweeten the bitter pill as much as you can and entice buyers. bankers are pulling all of their tricks out of a hat. dani: ok, what does that mean in corporations actually being able to get loans to actually get the money they need? catherine: a lot of corporations obviously keep rates superlow for a very long time. many companies have loaded up on cash and don't have immediate financing needs. that does mean that those who have the market are in particular need of money in some cases. so, you know, obviously, the bond market is not the only place to get money. so, there are other ways. other financing options. for example, many companies in

asia have been going for loans to tide them over in the hopes that maybe next year, there will be a reduction in interest rates and therefore issuing a bond will be less expensive than it is now. dani: ok, thank you very much. that is bloomberg's asia credit team leader catherine bowes late. with that high-yield bond and high leverage loan market all but shredded in 2022, the era of easy money is coming to an end with banks refraining to taking on more risk. credit funds have effectively become only the gains in town for buyout firm seeking to finance m&a. let's get to anthony, ceo of -- thanks for making the trip. we were talking to catherine about liquid peers. banks less willing to loan this market freezing up. how much of a problem is it right now with the liquid market

lending and being able to put these and have buyers interested in it? anthony: i think it is a severe problem. it is not just a liquid markets, but effectively bank lending is more or less drying up as well. sitting on the larger end of the market, historically, a number of businesses, private equity businesses, did go either to the liquid leverage loan market or the high-yield market to secure financing. it is pretty remarkable actually to be sitting here in september and that market has been all been shut as of the start of the year, and certainly shows no sign of immediately opening again. dani: how permanent do you think that is? anthony: it is really difficult to tell because so much of it, certainly in the case of those two markets, does rely on the underlying investors who buy those securities. they are very skittish at the moment for all the reasons you have been discussing this morning. one of the key features of those markets is typically banks will

underwrite those loans and settle them out to investors. i'm not sure banks of the moment have either the confidence to do that and hence the market is more or less frozen. dani: banks no longer around, so the natural next question -- are you in your private equity peers picking up the slack? anthony: we are. this has been the continuation of a trend we have seen since the last financial crisis where historically, all lending was done by banks in the liquid markets. banks have really exited the market. we have seen private debt firm step in. it is not a new phenomenon, where liquid markets have seen stop. dani: has that changed the profile of types of deals you are doing? anthony: it has actually. typically, the liquid markets seem to be larger deals. hence, private debt firms are moving towards much larger deals.

as an example, recently, the largest deal that was done was a business, i think the loan was about 4.5 billion euros. that is a pretty sizable transaction. it did involve to were three private debt firms together. dani: that is a problem, right? you have to be large to be able to do this. arcmont is large enough but to what degree are folks missing out on these newly freed up deals where banks are not putting in the money? are there a lot of people missing out on this because they are too small? anthony: yes, sadly, they are. private debt has been a relatively new industry that has developed over the last decade, but there are only a handful of private debt managers that have multibillion size funds doing these larger deals. investors won't thank you if you competed your entire fund to one deal. you have to get good risk diversification. there are realistically five to 10 maximum private debt firms that can really do these larger,

highly attractive deals. dani: banks are stepping back because of raising rates, a risky environment, potentially looming recession. but they don't have the stomach for these risks. why do you then? anthony: i think one of the key factors that private debt firms all try, and we do, is typically noncyclical businesses. i don't want to suggest private debt is a panacea for the entire market because historically private debt firms mirror the private equity counterparts. to the extent that businesses are extremely robust, and typically you are talking about sectors such as i.t. services, health care, education, sectors that are typically noncyclical. we have the appetite to underwrite and hold these loans. i should point out that the nature of the structure for private debt firms is we have long locked structures. our investors commit capital for

seven to 10 years which means we can take a long-term view. and we have to do that because it is highly likely we will go through some sort of recession and we need to have robust structures to whether that. dani: i was talking to your friend blair jacobson and pressing him, at what point do higher rates start to pressure firms, especially firms that private credit holds? he was saying 6%. does that number sound right? anthony: i think it varies case-by-ca. the types of industries we focus on tend to be high cash generative businesses. as a result of that, they can withstand quite a reasonable rate increase before the interest costs really do start causing a lot of pain for the businesses. what is interesting though is as rates have gone up, we have seen leverage multiples move up. the amount of leverage has

reduced so the overall interest costs on new deals has probably stayed pretty constant or it has fallen. it is really whether those historic deals can weather the higher rates. dani: are you concerned about a wave of bankruptcies with the pressure coming from energy crisis? anthony: as a general question, i think the answer is definitely in there is clearly severe pressure on a number of industries. i don't think it is just energy. as you have discussed this morning, it is supply chain issues, labor shortages. there are a number of pressures. without wishing to sound cavalier, i am relatively comfortable with the businesses we have lent to because they tend to be noncyclical businesses that have very high cash generative. very important late, goes back to the point earlier about the

nature of the deals we are doing focusing on these larger businesses does mean the team to be more robust. generally, 200 million business is probably stronger than a 20 million business. dani: let me ask you to put on your birdseye view hat, looking at the entire industry, looking at the integrity of europe. where are you looking at if we have this default wave? where will the cycle feel the most pain? anthony: i think i would make a slight modification to your question. default themselves are not necessarily a problem. what i mean by that is we typically have governance on the deals we do. one of the purposes is to ensure is if it underperforms, the governance is triggered and that is in a sense a default. that is really an early warning signal that gives everyone the opportunity to sit around and take action. what really worries me is when

the default turns into losses. that is the point in which firms like ourselves will be looking at loans -- dani: are there any signs those losses have started to come through already? anthony: they are not. i talk regularly to my peer groups. for the moment, most people's portfolios seem to be for forming ok. i think it is early in the cycle so it is early to call. some of these effects take a while to see. dani: i'm afraid we have to leave it there. thank you for joining us this morning. anthony fobel, ceo of arcmont. coming up, germany set aside billions for lng in a effort to avoid a gas crisis. we will have more on that next. this is bloomberg. ♪

>> sometimes being asked whether there's enough weapons we have received. i always say, i will be able to say it is enough only after ukraine wins. until then, we will be asking for more. dani: ukraine's foreign minister talking to bloomberg on the need for more weapons ukraine. a topic that will certainly be on the agenda at the 77th u.n. general assembly this week. the german government at the same time set aside billions of euros for liquefied natural gas purchases in an effort to stave off energy crisis this winter, accelerated by russia's severely reduced flow of energy through germany. for more, let's get to our energy reporter dan murtaugh. how likely is this plan in terms of getting germany through the winter? dan: it is tough to say.

a lot of it will depend on the weather. how cold is it, how much will people be turning on the heat in their homes, and how much is germany willing to lean on its industrial sector to reduce output and shut factories for hours at a time and reduced their demand? germany really has no lng infrastructure at the moment. they have been doing rush jobs of order import terminals to get up by the end of this year. they set aside 1.5 billion euros to buy emergency lng supplies. they have burned through that already, so they set aside another 2.5 billion euros. they are taking as many efforts as they can to make sure they will be in good shape. it's really unclear whether it will be enough. dani: from helping to bailout, also taking over major oil was

the most recent announcement. what is next in terms of corporations, helping them whether this looming storm? dan: yeah, germany took over the german arm of russia's gas company. they will have to deal with large bailouts or packages to help especially the electricity trading companies because the power prices and gas prices in europe have gone to such extreme levels, that even having the litter quiddity to keep hedging positions -- liquidity to keep hedging positions open. you will see companies asking help from the german government, other european governments in the coming months to make sure you don't have a moment where the markets get in the way of overcoming the physical markets. dani: ok, thank you very much, dan murtaugh. coming up, a luxury unraveling. a chinese wannabe spent billions

buying up luxury brands. today's big take is up next.

dani: welcome back to bloomberg daybreak: europe. i'm dani burger. let's take a look at the events we will be watching out for today. 1:30 p.m. u.k. time, u.s. housing data. watch for the effect of those ever higher mortgage rates with fed tightening. 2 p.m. u.k. time, the u.n. general assembly with the wharton ukraine set to be a major topic. at 6 p.m. u.k. time, the u.s. 20 year bond auction. the treasury plans to sell.

and finally tonight, ecb president christine lagarde is due to speak at an event in frankfurt. six years ago, a little-known textile maker embarks on a frantic acquisition spree with the ambition of becoming china's version of luxury powerhouse lvmh. since then, its ambitions have quickly started to unravel. the story of that unraveling is the subject of today's bloomberg big take. to tell us more about it is the writer of that piece. manuel, first off, what is this company and how did it all come crashing down? manuel: great question. it is a company as many other chinese companies that embark on such an acquisition spree over the last 5, 10 years, by assets left and right. in particular in paris and london, buying up all very well-known brands at very top

valuations. and also funded by very cheap financing. covid-19 came and they were not very successful with those businesses. now the consequences are they are faced with a lot of leverage. they are staring down a lot of those assets and also facing a lot of disputes from creditors. too many acquisitions perhaps too quickly. also, the question around integration after buying those assets. dani: being here in london, in europe, a lot of names people are likely familiar with. buying these names. what is next with this group? manuel: they spent about $3 billion in deals in a very short period of time.

they were very unknown up until, say, six years ago. so now, and they have a lot to digest. they have a lot of litigations going on with their creditors. they have to face that. at the same time, they have to steer the boat and turnaround those businesses, plus also try to offload those assets to raise cash. there's a lot going on right now with these companies, but we will see. dani: ok, thank you very much. the writer of today's big take. that is it for daybreak. we will gear you up for more bank decisions. this is bloomberg. ♪

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