dani: good morning. this is "bloomberg daybreak: europe." crude climes for the fourth straight day. >> price cuts, we will hit the loss of what we are doing. dani: opec-plus unites.

moscow says the move will backfire. fed officials continue to pour cold water for a quick policy turn. there is a high mark for any change. good morning, a decision that is characterized as a battle between opec-plus and the west. 2 million barrels per day means we might face inflation and the backlash from the white house. concerns for what it means for prices at the pump. this is a back above $91 a barrel. this is 6.5% so far. this is in response to all of this. we are at 3.7%. what we might be seeing now with the weaker dollar not doing too much this morning.

it is a huge risk event and might signify whether this pivot narrative has any staying power. they have heard from fed officials saying it does not. it might be some repositioning ahead of that. the same goes for equity markets. that late day rally futures up about one in a third percent. we are also looking at asia stocks that are higher for a third straight session. let's bring in one of our hong

kong correspondence. >> what you're pointing out is underpinning our moves. futures were pointing to a weaker start but then trading got underway. that is really being reflected today. a couple of sectors we are watching, the energy story. we are seeing the energy index moving higher. there's is also the chip story. morgan stanley saying it could recover into the second half of next year. that is also the biggest gainer in that region. you will see that tech heavy index is what is leaving us higher. in terms of global backdrop, it is interesting to see how long the markets can ignore bigger issues. you have views that we are hearing from fed officials. basically, the market has it wrong. that is one of the big factors here we are watching. of course, high prices risking inflation becoming more entrenched. you can bring up the terminal

chart. stocks are looking cheap. where on track for our best week now since november 2020. course, because we have only seen that handful of times, still, how long can this last? dani: it certainly feels like it cannot last much longer. thank you so much. let's get to our reporters from around the world. manus cranny is in vienna still. we also have another correspondent with a breakdown of a political meeting. we are joined by singapore for update. an action-packed 24 hour.

the most in two years. that is directly from the white house counsel director. president biden is disappointed by the shortsighted decision. >> we are disappointed that they made this decision. we think it is unnecessary. if you look at the global environment were supply continues to be the predominant challenge, we have been working for some time to take and encourage action to make sure that supply actually matches demand. dani: on top of that, the eu has new sanctions. let's head to vienna from here. manus: i was in the car on the

way here and i thought, what do we do in vienna? we jumped up 6.5% in a week. clear, collision course with the united states of america, a vast amount of capital with the kingdom. in the conversation, we are asking to be drawn into the response. course, the red headline is the russians. it is about the price caps. one day, i will get the sequel right. there are known unknowns. we have the impact of those price caps. >> as we are seeing, we

primarily hit the ones that are doing it. we know there is an accomplished number of examples. that can lead to a deficit of certain goods. if it is implemented we have these civilized companies. manus: this will interfere with russian supply. we don't exactly know the framework of these cuts but it could be a drop in production. that is what these price caps can potentially deliver. are you going to fill the gap?

there is a conversation about the backdrop. that presented these cuts. they are worried about inflation and central banks trying to tame inflation at any cost. dani: a stronger dollar means it will be at -- even more painful. really on top of everything. and oil officials saying that it only adds to market uncertainty. manus: yes. fragility, uncertainty. the language used at the press conference was about prudence and being preemptive. this is why they are taking this action.

prepare for more volatility. there was a warning about it. it is about volatility that is coming from these macro factors. let's tune in for a piece. >> i don't want people to think this is a one-way street. it is a variety of convoluted and uncertainties and they could go astray altogether. on the positive side, or could be a combination. manus: we go on to discuss whether saudi will do as they have done in many situations. the bigger role, unilateral cuts that they have done in the past. who would not be drawn on that exactly. it was a packed house.

it was great to be back in vienna and the bunker. there is a whole host of issues around this. my take away is that we are set for a bumpy ride on the supply and price cut. it is very clear. dani: never too far from one of those quotes. you will be back in about 30 minutes of time. thank you. from today, we will play host to an extraordinary summit of leaders. the first ever political community meeting. the comes as they backed new sanctions. let's get to lybov.

-- lyubov. they reached out to member states. >> they want to talk about what can be done for soaring gas prices. the letter yesterday addressed european leaders where they laid out a plan of what can be done. there are a few tracks central to these gas prices and utility. what the eu is ready to discuss is the temporary cap on the prices of gas that they used to generate electricity. this will be a focus of discussion but around that while this temporary cap is in place. it will work on the benchmark for gas and complement an existing one at the facility.

it is not reflecting the situation in the gas markets today. european union will work from that. also, the eu is planning to take action to dampen the price from gas that is imported from other countries. they will talk to their other trusted partners. dani: we found out about 50% so perhaps there was an aspect of it not reflecting fairly. thank you for capping off the energy conversation for us. this all feeds into the fed and inflation. they are feeding into the lack of prospects for rate cut next year.

we have the latest to bang on the drum to keep a tighter policy in place. let's bring in michelle. it did not take much for this pivot party to die down. michelle: that is right. we have some looking at the gloom and doom of the economy. we saw the rba with a smaller than expected rate hike, a dovish turn. none of that has change for the fed. they think this is red hot inflation they need to continue fighting in the face of jobs data that has shown -- as well as on friday that should show some slowing in job growth. what they are saying is not so fast. if they do not see rate hikes damaging the economy yet, they want to continue with that because they are not seeing

prices come down been singly. opec news, not uncomfortable deficit but it bolsters their case to continue those rate hikes. mary daly sitting on a very high bar for relenting on the 75 basis hike. all signs point to a fourth straight meeting where they have 75 basis point hikes. dani: wonder about the ramifications of this. we have ecb minutes today from their september meeting. how does an aggressive fed feed into what we are expecting from the ecb? >> --michelle: it is certainly rattling. they have to take into account, the more sterling we face, the impact of the stronger dollar and all this fed to speak that

the fed is projecting to keep those rate hikes up. paired with that is the growing recession risk. the european economy seems to be a bit worse off at this juncture. anything that worsens that growth aside while inflation is not improving in any of these places will kind of trigger some action and complicated decisions with central banks. dani: thank you, michelle. coming up on the program, more fed speakers or cold water in hopes of an early dovish pivot. we will talk to anita gupta from emirates nbd. this is bloomberg. ♪

and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews.

just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done.

>> i do not see that happening at all. i see us raising to a level that we believe is restrictive enough to bring inflation down and holding it there until we see inflation truly get close to percent and demonstrate the price stability is restored. >> i think it is moderately restricted. and then we will hold it at that level. dani: team members echoing that the fed is unlikely to cut rates next year. we did see equities fall slightly after a pretty big gain for the first few days of october. let's bring in the head of equity strategy at emirates nbd, anita gupta. what are we witnessing here, a

little bit of star of the month reshuffling or something more sustainable? anita: good morning. what we see is after three quarters of equities, what investors and markets were hoping for was a little bit of a fed pivot. that is not our view at this point and we have inflation numbers and energy prices still staying high. what we saw was a raise of satellite. it would not be a full season of sunlight. we still have a very sticky situation and that feeds into margins of higher rates. dani: the storm clouds remain. if i could take the last half of what you just said. you mentioned the energy picture and what that will mean for inflation.

yesterday we get opec-plus saying they will/output. we have seen some breakevens from the peak. we do have this chart. it did not take up too much. how much is opec challenging the inflation picture and the fed as put by goldman sachs? anita: you have a supply demand situation, in addition to the fact that opec economies are looking at balancing budgets. this whole morning it will lead to about one million, or a balance rate. energy prices are expected to stay higher. i don't think this is the only

instrumental factor in keeping energy prices higher. inflation is driven a lot by energy prices. that is a sticky part of inflation that is not going away. this is a phenomena across 80% of the world. sticky inflation driven by higher food. so are a number of other central banks. dani: what if the fed does not pivot because inflation is conquered? but they pivot because we have liquidity issues continuing to snowball and worsen. may be they need to step in and help the market, what is the probability that that is how the

fed pivot unfolds? anita: that is always the possibility. i don't think this is a market or scenario where everything is definitive. the fed is driven by data. we are seeing companies give guidance going forward whether it is fed ex, facebook, cutting employees. we are seeing them coming up with lower expectations. that is where it comes from. we are also looking at the monetary supply and a stronger dollar. i think it is too early to say anything. we just have to wait for data to see where it goes, to see the standard of living.

that is important when it comes to u.s. numbers. dani: i am sure this will be asked over and over. in terms of an earning recession, the words that we might see, how much is it priced into this equity market? anita: equity markets are always leaving on earnings. we saw in the first three quarters work reflective of a slower earnings growth. we are looking at estimated 2.9% earnings growth. that is the expectation. surprisingly, looking at analysts of 4% and 42023, it is around 3%. that is where we think we will probably see lower earnings

growth, maybe even flat. expectations are way too high for 2023. we will definitely see the impact from the higher inflation numbers. we are seeing wage growth that stays sticky. it is not going to be as positive as 2022. you're seeing earnings growth in 2022. dani: thank you for joining us. anita gupta head of equity strategy at emirates nbd. coming up, market, we have the twists and turns for you. this is bloomberg. ♪

dani: welcome back. this really interesting debate occurred. your stocks were down 1.8% but they have a massive turn with a loss of about .2%. you had wells fargo, saying there was a big options bet not because the dealer to take the other side. you have some saying it is because of the retreat in the dollar. regardless, the impact was the rally that the u.s. has continued into the future session. hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician.

i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're extremely heavy they're not so simple. golo is real and when you take release and follow the plan, it works.

dani: good morning. this is bloomberg daybreak: europe. these are the stories that set your agenda. biden criticizes opec-plus for its decision to cut output, calling the move shortsighted. crude climes for the fourth straight day. ? -- >> uncertainty. to the positive side, the negative side or it could be a combination. dani: energy discord as opec plus calls for limits on gas prices after they act on oil. the move will backfire, he says. >> we will primarily it. dani: pivot, what pivot? cold water on prospects for a

policy turn. there's a hibor -- high bar for any change. let's take on that oil story. a battle between opec-plus and the west. crude extending a three-day rally. it was an action-packed when he four hours. opec-plus agreeing to cut its output in the -- by the most in two years. the eu agreed to a plan by the eu to impose price caps on russian oil exports. let's head back to vienna where manus cranny has been standing by. i believe them -- the weather matches the mood. chilly when it comes to the relations between the west and apply -- opec-plus. manus: think of the political capital. the white house has expanded in extending its reproach. i will return to that in a moment. let me float that out there. the other side of this trade and

the opec relationship is russia. the deputy prime minister on the ground in europe to talk to his cohort of like-minded people. how do you deal with unknowns? how would the price cap work? the red headline was very clear. the deputy prime minister of russia. production will drop. my question is, who will fill the gap? listen to his take. >> indeed there have been two important decisions taken today. when you have already mentioned. the second decision is actually the extension of cooperation.

it was scheduled to excite -- expire at the end of 22. it will be extended until the end of 2023 with gives the market security and predict ability. the decision was taken to balance the marker out. this is very important ahead of the winter season when we will see the seasonal decline in demand by 2.5 barrels. this decision has been made today. it helps markets balance it out. it's a very weighted decision. manus: let's look towards february 2023. you will have more sanctions. you will potentially have a price cap. can you tell me with a surety what your production in february 2023 will be. you said 93% for 2023. is that the worst case scenario?

>> such actions create a very bad precedent. that will promote early hit the ones who are doing it, implementing it. there are unaccomplished number of examples of market interference, especially with the mechanism of price controls or get it can only lead to a deficit. that's unacceptable to russia. if it is implemented, we are not going to supply countries which join this mechanism. manus: the whole essence of price cuts from the eu are going to lead to a deficit. who is going to fill that gap? that is the big question. opec-plus goes into cutting mode. a number of other messages came through. it's about the cooperation agreement through next year.

that shows you there's a solidarity between opec and opec bus that is not going to dissipate. a challenge in terms of where you cut the gaps. i pushed him and pushed him. go listen to the interview. again, it was about delivering the standard answers. was it on the table? it's not top of their agenda. that was the one upside i took away from it. preemptive, proactive is what is going on. that's not the message he wanted to convey. dani: you teased our viewers with the political drama. take us into it. what has been unfolding since this decision? manus: yeah. i was sitting in the bunker last night. suddenly this thing lit up. it was the jake sullivan, the president is unhappy. the jake sullivan memo is incredibly interesting. it brings into play trifecta.

there's a kid going to school. he's not going to get there. gone. what you've got is a risk of exports being stymied. you have the risk of no pack which is the ability to sue a sovereign nation who is a part of a plaque. -- opec. that's a real issue at play. the more important issue is the unnecessary cuts. the white house not only panicking. we are now seeing a very fierce pushback by the white house. i wonder where this will escalate to. can it be de-escalated? let's listen to his royal highness on his take on yesterday's proceedings. >> we wanted to give the market

a clear direction. that's why we extended the agreement to the end of 23. guidance to the market is crucial. without guidance, people would not invest. however, we still have the tools in our kit. yes, we reduce the amount of overall expectations. we still have the geomancy. the guarantee is warranted. the authorities have more than one meeting every two months. it's our authority to call for a conference meeting if necessity dictates. manus: the kingdom has often

done this, led from the front and gone with voluntary cuts or ads to do the right thing to write the market. did you consider a voluntary additional cut? >> at this time, no. there's not a need front amongst us. we have to be very practical, given the situation today. some countries are not able to produce their voluntary volumes. we elected to go for a bigger number. certainly a significant number. therefore, we feel it is sufficient for now. manus: it's very clear he sees to ray -- two way risk.

he pushback, this is the first of a series of jumbo cuts. he wanted to pushback on that narrative with me. dani: goldman sachs have this note out. i'm sure you saw this. labeled opec-plus takes on the fed. we have oil at $100 per barrel because of this cut. what does that mean for the fed, for inflation, for this macro environment we are in? manus: can we go for a shameless plug? why not. if you listen to the interview on my twitter, or on bloomberg.com, it is very clear. it is a risk. it is this balancing act. he makes the point, you will

fuel inflation. 9% in three days. his point to me was, the central bank policies have been going after inflation at the cost, at any cost to growth. this is the conundrum. you add 10% of the oil price. you refuel the inflation narrative. central banks are absolutely correct. they will not stop until the job is done. with that in mind, there's a cost to growth. the strength of the dollar, macro rate all played into this conversation. dani: i want to leave it off on this. you are probably feeling the cold. our producer tells me it's going to be up to 23 degrees there in vienna. you are basically in summer weather. you can ditch the scarf. manus: you mean i won't get to where the coat and the scarf all day? dani: it's too fashionable.

keep it on. such great stuff. let me plug it for you again. go to his twitter and watch the interview. really great stuff. huge implications. thank you so much. looking for your to you back -- forward to you back in the drivers seat. let's get back to these markets. oil market. we saw all of the implications, all of the fallout from this. oil is basically hanging type. we've seen a monster rally of 6.5%. perhaps not unsurprising we are hanging around $93.5 per barrel. 10 year yields did perk up yesterday. we were at about 3.6 percent yesterday. we stand at 3.7%. we are looking at a drop of about two basis points. the bloomberg dollar spot weaker this morning. we are doing a little bit of repositioning ahead of a friday

nft report. are they going to have to keep hiking rates until there are cracks? european futures up more than 1%. tv magic. coming up, we talked twitter. elon musk. it appears to be on ice. the details for you next. this is bloomberg. ♪

dani: elon musk and twitter are said to have agreed to postpone the deposition that was set to take place later today. it follows his turn toward reviving the offer.

we are joined now by richard windsor. i want to start here. musk made so much noise about trying to get out of this deal, whistleblowers. what do you make of him just surrendering under -- unconditionally? richard: i think what has happened is that something has happened that has weakened his negotiating position. he's come to the conclusion or been advised that he's going to lose. the best option is to go through the deal that he originally made. i don't think he's had a change of heart. he's always wanted to buy it. it was about the fact that his timing wasn't great because the minute he paid 44 billion, the bottom fell out of the technology market and he thought, i should've paid less. dani: in the letter sent to the

sec, the team at twitter, two things jumped out at me. one of them saying that him buying the company is contingent on two things. one of them is that, provided there's an immediate stay of the action ended during the trial and all of the proceedings related to closing the order. going to what you are saying, before the court case, closing this thing up. what i wonder, is there risk in which they close the deal, this stops so the purchase can continue but he doesn't go through with it. the trial stops and he backs out. it is not a fear? >> this is an indication of how little trust there is between the two sides. obviously that's exactly what he's trying to do which is why they are trying to patent down every potential exit for him by

which he could somehow wiggle out of paying the price that he agreed to pay. i think that's really what's going on here. the fact that he is on categorically into the demand that he by the company for 44 billion indicates how week his legal position is. i'm not surprised. i thought he was going to lose in the end. dani: you've been saying that for some time. you can take a victory lap. i want to bring you to the other thing. the other thing closing the deal is predicated on pending receipt of proceeds of the debt financing. this is a bond market, a high-yield bond market which has been frozen. what is the likelihood that morgan stanley and friends are able to actually put together a debt package for him? is this a big risk? richard: i don't think so.

i think the problem he's going to have is that the deal is going to be much more expensive. if you put it together six months ago when he originally announced it, interest rates were considerably lower and the market was considerably more willing to take on risk. he's going to have to pay. there's plenty of cash out there. the willingness of that cash to pay high valuations or really -- receive a low yield. i think the deal will get done. it will be more expensive for the world. dani: how much appetite will there be for this? we just had musk nonstop disparaging twitter. who is going to want to buy the debt or join elon musk in committing equity to this?

richard: i mean, let's be fair to twitter. i mean, twitter is dominant in its space. it monetizes effectively for what it does. for 10 years, there has been an unfulfilled opportunity for twitter to expand its reach outside of just that little space and have a highly engaged user base. there is potential value there. twitter's management has failed to expanded effectively. can you pull it off? dani: i have to bring you a quote from john mclean. similar to a vegetarian going to a steakhouse. very limited appetite. to that point, what is going on with elon musk and the everything app? how does that apply to twitter? what would it mean?

i don't totally understand. richard: the essential problem that he has is that he's paying three times more than what twitter is worth. some say he has to prove or create value inside of twitter that would justify the $54. one of the ways one could do that is to expand the appeal of twitter. there's much more to the digital ecosystem. there's all kinds of things that would mean twitter's users spend more time engaged within the property. that would increase the value. the idea behind the super app, it is likely chat. we chat started off as like whatsapp or telegram. now you can do everything on it. you can buy a train ticket. you can pay people. so on and so forth.

the idea behind it is to do exactly that. frankly, if he's going to justify 50 door dollar price tag , this is exactly what he has to do. dani: i'm afraid we will have to leave it there. thank you so much for joining us this morning. coming up, investors are offloading italian bonds at the fastest pace since the pandemic struck. that follows a warning about the nation's finances. that story, next. this is bloomberg. ♪

dani: let's talk about italian bonds. let's bring in valerie ty tell. let's go over some of the risks that are leading to the drama. we had ecb, hopes that he joined

as the finance cheese of italy. that's not happening. valerie: exactly. we had the bimonthly release of the holdings from the ecb. these showed reduced support for btp's over the month of august and september. we know that purchases ended in march of this year. there is flexibility in how they reinvest the dividends until the end of march 2024 -- the end of 2024. you would think in a time of volatility this summer, when italian yields rose at 150 basis points, maybe they the wood -- they would use that flexibility to support the bond market. that was not the case. before that, they've been helping italy out. they had been diverting funds

away from northern european countries and putting it more into reinvesting in southern european countries. dani: yesterday, we had the confluence of these risks. you had moody's warning on the new government. and then we get this blowout. valerie: i want to show you. the 10 year yield jumped nearly 30 basis points. it's the second largest jump since march 12, 2020, after lagarde set her famous quote, i'm not here to close spreads. it was a big move. a lot of this was overshadowed by opec yesterday. this move is nearing 4.5%. gdp metrics coming into place. today, we had the ecb minutes. investors highly attuned to any

qt comments within the central bank. maybe something they can roll out before the end of the year. dani: they do have a program to help in these cases. could they be transitioning to that program? valerie: it is still very vague. the metrics by which they would activate the program. one of them is, they need to see a sustainable debt metric in the country. dani: exactly. valerie: it's all under focus now for italy's bond market. dani: a big question on the bond market. thank you for walking us through that. that's it for bloomberg daybreak. market is up next. this is bloomberg. ♪

millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan, or see for yourself how easy it is to save by talking to our helpful switch squad at your local xfinity store today. hi, my name's steve.

i lost 138 pounds on golo and i kept it off. so with other diets, you just feel like you're muscling your way through it. the reason why i like golo is plain and simple, it was easy. i didn't have to grit my teeth and do a diet. golo's a lifestyle change and you make the change and it stays off. golo's changed my life in so many ways. i sleep better, i eat better. took my shirt off for the first time in 25 years. it's golo. it's all golo. it's smarter, it's better, it will change your life forever.