>> i am mark crumpton with first word news. ukrainian president volodymyr zelenskyy is calling on russians typically after their president vladimir putin announced a partial mobilization in the war with ukraine. increment spokesman says no decisions have been made about closing the borders to try to stop russians from leaving. italy is on track to name its first female prime minister. she won a fair majority in sunday's election. that sets her up to have the most right-wing government since world war ii. she emerged from the political fringes after leading the opposition to the previous administration. the pentagon is pressing ahead with a policy to help defense contractors deal with business

shots from the covid-19 pandemic. the pentagon has so far made about $8 billion in accelerated payments to contractors under the policy instituted in march 2020. critics, including massachusetts senator elizabeth warren, question whether the policy is necessary or whether the money has been used properly. federal officials have become a criminal investigation into pg&e's potential role into starting california's largest wildfire of the year. the so-called mosquito fire east of sacramento has destroyed nearly 80 structures and the company has made efforts to prevent more virus. pg&e was tried for manslaughter in connection with a 2020 blaze that killed several people, and was driven into bankruptcy for

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. its role in the 2018 camp fire global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. that destroyed a paradise. i am mark crumpton. this is bloomberg. ♪ >> come to bloomberg markets. kriti: let's look at the price index here. very muted or what you would expect on a monday session, down 1% now. coming up lighter volumes. all the action is in the bond market. take a look at what's going on with the two year yield. of 12 basis points, coming after an auction come up about two basis points, the highest auction yield since july 2007. that is going to be crucial when we talk about hominy people actually want to get into the bond markets right now, especially on the front end of the car. move out on the curb and you can

see some real volatility paired the 10 year yield moving as much as 20 basis points on the session. a lot will have to for that contagion effect. we are going to dive into that later in the show. take a look at what's going on. as the yields get higher, the delegates stronger, up 1%. not really helping that story. jon: as we mull the trading session, we have seen fewer gators within the equity world. on the one hand, you still have a sizable pop for some operators with ties to macau, headlined on encouraging group travel. some are still up double digits today. but within the dow, for example, that willingness for investors to move back into hard-hit tech stocks has become muted for the afternoon, with apple holding onto a very modest gain at this point. walmart is the only other dow component right now that is in the green, but advances are also shrinking. news is about is pushing to the metaverse, teaming up, in many

ways the same old names that are so interest-rate sensitive that investors are shying away from. you have seen the index under pressure again. kriti: this interest rate sensitivity, then currency sensitivity. we will dive into all of this. right now, let's go across the atlantic for just a minute. counting back from a record low. 103 on the cable rate. speculators wonder if the bank of englund will respond to moves in the market, with plans to cut taxes and ramp-up borrowing. let's bring in the one and only guy johnson, staying late in london for us. we thank you as always. guy, what is the future of the pound here? are we headed for parity? guy: there is speculation that is the case. i've got a target now well below parity. kriti, that simile looks to be on the docket. the bank of england and the treasury here in england earlier

appearing to coordinate in an attempt to call the markets, but it has done very little. the bank of england's statement was released just off the equity market close in london. it appears to have done very little to calm nerves. there is a real collision course at the moment between the bank of england and the treasury. the expectation in the market is the growth directory and the treasury wants to put the economy on really hinges on the bank raising rates to correct. the bank may have no choice but to raise rates and raise them aggressively. jon: it is remarkable. you think back to the pandemic, when it felt like central banks and governments had at least a certain amount of alignment. here we are going back and forth. let's say hypothetically the government responds or continues to respond to any updates from the bank of england, i would imagine that the markets in the currency market in particular,

have to react to that. guy: we have continued reaction. the bank has said that it will monitor the situation and will respond accordingly that is basically the just of what they said this afternoon. they're going to push back that response to november. that's a really long time away. is going to be interesting to see just how far the market is prepared to push the bank. there is another school of thought, which is that the bank of the glen and the treasury down in westminster, will work hand-in-hand. they will be forced ultimately to not raise rates as aggressively as they would want to, for fear of undermining the growth wish that the chancellor is trying to force there at the moment. that will raise serious question marks about this. that is the point we have gotten to. that is what we are asking ourselves. will this be a bank that prices inflation and tries to deal with currency concerns? or will this be a bank that

ultimately supports the government's growth push? kriti: you talk about this from the national point of view paired let's talk about international. a few years ago, there was a core native ever by some of the biggest economies to keep the euro afloat. do you think the same could happen with the pound? guy: the u.k. and the bank of england don't have the kind of reserves to do that. i think there is a lot of arithmetic going on right now to work out exactly what those reserves are. we have seen some intervention from the bank of japan over the last few days. maybe there are conversations happening at the boj and with that bank of england. the fed is ultimately taking the other side of this. it is forcing through this strong dollar. ultimately, if the fed continues to do what it's doing right now, and it certainly looks like it is going to be, judging by the reports we've had from fed officials today, we are going to see a stronger and ongoing stronger dollar, unlikely that

any other central banks can afford that. one person called out the u.k. fiscal policy, where the attention is on the banks federal policy. you know the u.k. has a problem. jon: really, really helpful context, guy. bloomberg's guy johnson joining us paired let's keep this conversation. erik nelson with us now. guy just outlined some of the pieces of this complicated puzzle. i guess i will go straight to the bank of england and what we are going to be watching from your vantage point. what do you see are the options right now? >> it's a series of bad options. so far, they have chosen optionee, which is to do nothing. frankly, i understand that. hiking extremely aggressively upfront, and emergency rate hike. you risk signaling panic and

certainly also pushing the economy even further into a recession. i think at this point, continuing to watch things. we have seen some stabilization in the fx market. they have recovered pretty meaningfully from the lows. to me, the deal we will continue to watch how markets evolve over the next few weeks, see how, if at all, the u.k. government once to reassess its plans, potentially. but to me, this is not a currency crisis. this is a very unfortunate and negative mix of macro policies from the u.k. the market is responding accordingly. i don't think the boe has panic yet. kriti: looking at the bloomberg dollar index, just getting higher and higher, and there is a functional terminal here where you can do what specifically is driving the dollar. you would think with the pound weakness today, it will be the pound, but it is actually the euro. at what point does that dollar

trade reverse? >> it's going to be a long time, in my view. you think about how this is likely to evolve over the next six months to nine months, given the energy crisis in the u.k. and europe, given the relative strength of the u.s. consumer. even if the u.s. falls into a recession, i would say the u.k. and europe are going to fall into a deeper recession. u.s. stability continues to really drive the dollar higher in our view. it is really probably going to take either a substantial fed pivot or coordinated intervention across the g7. to me, that is a prospect that is very far off at this point, given the fed, as guy alluded to a few and it's ago, is still on the side of wanting a stronger dollar to push inflation lower. i think that point is still a ways away. jon: very specifically on the

idea of fx intervention within the u.k., and forgot to that point, what kind of firepower are we talking about that's available? >> extremely limited. we are talking maybe 3% of gdp, about 100 billion sterling and reserves. we know that is close to $100 billion at this point. they don't really have a lot of option in terms of direct intervention the same way japan does. you have for the bank of japan, they know well that they are not going to be able to reverse the trend here, only slow it. i think intervention is pretty low down the list, and terms of the options the boe wants to use at this point. kriti: intervention perhaps on the part of the boe, but what about on the part of the federal reserve or the ecb? guy was pointing out earlier that the federal reserve president of olanta was talking about spillover effects that are very real for what's going on in the u.k.

cadet perhaps motivate other central breaks to get involved? >> potentially. that is hard for me to see that being a really meaningful or powerful prospect without the fed and the treasury behind it. one thing u.s. regulators could do is to either slow the pace of quantitative tightening or offer up other relief measures. that would free up the balance sheet capacity among u.s. banks. right now, that is a huge issue and probably driving some liquidity issues, higher yields, and stronger dollar that we are seeing. i still think that is also a bit of a distant prospect at the moment, but that could offer some relief from these currencies. but without the fed, i don't see much happening in terms of this trend reversing. kriti: something we will keep our eye on. and it does reverse now, six month, we will have erik nelson back on. thank you, as always good coming

up, we discussed more on -- that conversation next. this is bloomberg. ♪

kriti: this is a bloomberg

markets. u.s. stocks are dropping and remaining on edge. actually near session lows, with a cautious rebound. joining us now, kimberly forrest of bokeh capital partners. we think you as always for joining us. we want to start off with a currency ticker. how much of the show would be paying attention to when it comes to american stocks, as opposed to perhaps something isolated to europe? >> unless elon musk gets his way and we have people on mars, we are only here on the earth. that's what, it really matters that we pay attention everyone else's currency. even the small companies i cover are sending their products worldwide. so, the availability of demand in other parts of the world is

really important to most companies that are traded publicly. i think if you are an equity analyst, you have to pay attention not only to currencies, but also to bonds. that is going away from what we have been taught as equity analysts. jon: the currency story to your point, kim, impacts for some companies that profit, we are trying to figure out what profits look like going forward, how that plays into valuations for those trying figure out where the equity market because. there is another factor with the currency strength of the u.s. dollar. that is that there is an argument to be made for the fed and where the fed goes from here that the u.s. central bank has to be watching what's happening and that currency impact as well. possibly doing some of the work of monetary tightening. can you just give us your assessment on that? >> sure.

here is the fact. we are still a reserve currency. many people have to trade in dollars for a lot of commodities. i believe the most important is oil. that would, at a minimum, drag the fed into some sort of currency correction. if you look back in the dark ages, in the 90's, the fed was dragged into the collapse of aging -- asian currency. there was probably less of a problem to us then then what we are seeing now. i think that really has to make your average viewer here pay attention to currency. we have a history of having to step up and take some of the brent of the world's problems. kriti: kim, 32nd tier. as the market prepared for 75 basis point hikes in november? >> i think that's already priced

in paid you can see that in today's bond action. i feel like a fish out of water. the equity parts have been commenting on bonds, but all these outside moves are telling you something, that there are basic fractures out there that the fed has to step up and understand that they exist and know that it is going to affect the lives of ordinary americans. that, if you listen to them, is what they are paying attention to. how does what they do affect ordinary americans? jon:jon: and is. always great to get your perspective. kimberly forrest joining us of bokeh capital partners. also watching, a new government for italy. the first fema prime minister. details next. this is bloomberg. ♪

>> this is bloomberg markets. some big news here in canada today. creating one of canada's business banks naming its next nova scotia bank. brian porter, the longtime ceo handing the reins now to scott thompson, who comes from another company, which works with a lot of caterpillar buyers around the world. outsiders in the banking industry in canada, this is a remove. >> that's right. this is extremely rare in the canadian banking industry is not only hiring someone who hasn't risen up through the ranks, but someone whose executive expenses largely outside the industry. like you mention, the new ceo, scott thompson, is the ceo of a

company that finances and sells caterpillar equipment. he was on was scotia bank in 2016, so he knows some, and he served as vice president of goldman sachs, so he is not until your with banking. this is a coin essential canadian industry, including some time at one of the large telecom companies, and also some time at talisman energy. even though it's not a lot of broad canadian experience, and familiar with the banks, but it is very rare to have someone from outside the industry or the bank take that top spot. brian porter was over the bank before -- for three years before he took the top spot. their ceo spent most of their careers inside the bank before they took a corner office. definitely a did -- a surprise today. jon: very quickly -- kriti: very

quickly, 27th, -- 20 seconds tell us about ryan porter. >> a $3.5 million worth of acquisitions to build up its wealth management business. jon: really helpful context. a story we are continuing to track. that is kevin with the latest details for us. time now for today's "for what it's worth." you had mark compton preface at the top of the hour where the italy -- daytona government is looking to have a change in power. the italian election, setting up the first female prime minister at the hand that at the head of the most right wing government since world war ii. earlier we spoke to one guest

about what we can expect in the weight of immediate change. >> i don't expect much of a change at least in the short-term, first because there are significant constraints. there is the reality of a looming recession, the reality of an energy crisis, and also italy estimates that if they are going to keep receiving funds, so the maneuver -- >> in many ways, moving on. kriti: it's fascinating because this is something a lot of people were worried about. you're starting to see this massive switch in europe that are right parties that favorite things like infrastructure investment capital investment. this is at a time a lot of people are trying to pull back on that. it is going to be crucial. right now, the s&p 500, getting a quick market check, down 1%. things are looking good on the u.s. side of the market. we're trying to keep you up on

all of that. stick with us. this is bloomberg. ♪

mark: keeping you up-to-date with news from around the world, i mark crumpton. an area braces for the brush of a major hurricane. ian strengthened to a category one storm this morning south of cuba. it will move to the florida keys tomorrow and a category four by wednesday. u.s. supreme court justices return a week from today for the new term. it could be as controversial as the last one. they will have cases involving the clean water act,