and i: this is bloomberg

daybreak: europe, i'm anna edwards in london, and these are the stories that set or agenda. deutsche bank, unicredit and barclays reporting. standard chartered pre-tax beats estimates but warns of credit woes. lackluster sales send shares lower along with meta, amazon and apple. rishi sunak keeps jeremy hunt as chancellor but is criticized for other pix. he may delay monday statements. a lot of earnings stories to get through this morning. let's get to deutsche bank. we have numbers coming through, they see upside for the full year guidance range. third-quarter quarter sales and training revenues 2.2 billion euros, ahead of the estimate of

1.9 billion, lifting their revenue outlook it seems as rising rates fuel trading. we have heard about the net income interest story from a number of banks. for sales and trading. 2.2 billion, investors an estimate of 1.9 billion, strength coming through at deutsche bank, saying it may exceed its full-year revenue target as rising interest rates fuel income from lending and traders take business from rivals. similar positives to the ones we have seen from other banking is is is this reporting quarter. we will get further analysis for you shortly, and we will speak with the deutsche bank cfo in the next 30 minutes. the team is ready to speak to james about those numbers. let's stick to banking sector but go for italy. unicredit sees 2022 net profit

excluding russia above 4.8 billion euros, again guiding higher from the banking sector in terms of what they can achieve. revenue excluding russia for 2022 of 17.4 billion, they had seen it above 16.7 billion, guiding higher on revenue and the net level. we will look for comments about what is prompting that, presumably it is net income and trading, but there had been an expectation we might see guidance more strongly from this business. we will speak to unicredit later this morning as well, and get further details and perspectives on russia. let's get to the chemicals sector, basf still see full-year sales at a t6 billion -- 86

billion, they also stick to their full-year adjusted ebit guidance, saying they're paying $2.2 billion more as the energy crunch hits that business. they have paid around $2.2 billion more for natural gas in europe during the first nine months of 2021, underscoring the impact surging gas prices is having on this sector. that was a key concern, how is the business going to stand up to higher energy costs? gas prices, as important as they are in the energy mix in europe on the have been coming down of late. let's look at the broader picture. we have been whipsawed through the chinese markets at the beginning of this week, movements in treasurers, fallout from tech stocks. let's have a look at where we are. the csi 300 in china up 1.6%, not blowing back all that was lost in tech stocks monday, and

we continue to move higher. the pboc giving more positive messaging today about maintaining stability. euro stoxx 50 futures flat in the face of strength in asia and weakness in u.s. futures. it is numbers out of alphabet, sales disappointing, the forecast disappointing in the case of microsoft and texas instruments with a disappointing forecast, too. let's not lose sight of fixed income and treasury yields, the 10-year treasury yield low for -- below 4.1 percent, driven by weakness in data. there has been no change in expectations around 75 basis points from the fed, but it takes pressure off of risk assets and has allowed them to rally short-term. let's get to reporters on biggest earnings stories we are covering, tom metcalf joins us to help digest some of the top lines from today's bank

earnings. matthew bloxham also here to break down today's tech moves. it is a big week for european bank earnings with banco santander and barclays reporting on the last few minutes. what should we be watching out for them during this turbulent quarter? let's bring in u.k.'s -- bloomberg's u.k. finance editor tom metcalf, we have had a number of banks reporting earnings, deutsche bank and standard chartered, what stands out? tom: it seems across-the-board pretty positive for earnings so far. but it is the idea that revenue will outpace credit loss costs. it looks like a couple of banks have given positive guidance. the deutsche bank fixed income traders did all right this quarter. anna: it's that trade-off between the benefits of net interest income of higher

interest rates, but then as interest rates go higher you get a little worried that maybe people who you borrowed money from might not pay it back. it is the balance between things. tom: i would say the lenders are in a sweet spot where the cost isn't quite yet apparent because consumers haven't been in months and months of distress. anna: do you have to be aware of the politics of the business looking strong at a time when european governments are looking for people to tax? tom: barclays is coming up, and there is chatter about willow bay tax banks more. the banks will guide on provisions ahead, and maybe they will be inclined to say we need to provide more than we thought initially, and that will bring down profits. anna: thank you so much, let's turn to the tech sector. some of the biggest u.s. tech stocks tumbled in after hours after disappointing earnings.

alphabet sales missing, while microsoft's forecast fell short. joining us is matthew bloxham, one of the key takeaways from the earnings story? matthew: a bit of everything, we have had currency headwinds, a weakening market and as you said, microsoft with disappointing sales growth outlook. the cloud services business is expected to slow down next quarter. that's been a bellwether for the technology sector, companies moving to traditional platforms to realize efficiencies, but it is also a usage-based environment. as company demand slows, they spend less on computing platforms that were driving their businesses, so it is a mixed picture. we've been thinking for two or three quarters that at some point the slowing economy has to

impact the pace at which brands are advertising and we are seeing that in the google numbers now. anna: what are we seeing in advertising, in some senses a more traditional advertisers even though they are exposed to digital, have proven more resilient, but these may be more tech focused businesses that are more affected by a slowdown in advertising? matthew: to some degree, is a big makes across traditional platforms. i think what we saw last quarter is companies like snap but a quite a specific lens on the advertising market on it seemed contained to those kind of platforms. now given that google is the bellwether of global advertising essentially now, we are starting to see the effects of affluent macroeconomic slowdown, so they are not escaping it. anna: across-the-board then now, thank you to matt bloxham, he will be back later in this hour.

the british prime minister has named an experienced cabinet. jeremy hunt will remain as chancellor, but downing street was unable to confirm if you would stick to his plan to deliver the fiscal plan on october 31. outside number 10, sunak reiterated the tough challenges the country faces. >> right now, our country is facing a profound economic crisis. the aftermath of covid still lingers. putin's war in ukraine has destabilized energy markets and supply chains the world over. anna: the new u.k. prime minister rishi sunak speaking outside downing street, we should note of a are referencing uncertainty about whether that fiscal statement will, on the 31st of october -- will come on the 31st of october, maybe they

shift later and it becomes a full budget or it comes before the bank of england meeting, so crucial to wash november 3 for the boe. at 12:00 p.m. u.k. time in his u.s. mortgage applications, a big focus on the health of the u.s. housing sector. that is followed by new home sales at 3 p.m. u.k. time, we estimate a 17.5% drop in sales for september. also at 30 p.m., canada's rate decision, signs that it's inflation fighting efforts may be driving the economy into recession. at 10 p.m. u.k. time, meta's earnings, hot on the heels of other tech names we have talked about. coming up, and limits his station with jose cantera, cfo of santander who will be joining us to talk about the numbers for

the third quarter. plus, norsk hydro talks to us, that company posting numbers that came in above expectations but the outlook remains mixed. we will speak to the ceo shortly. this is bloomberg. ♪

anna: welcome back, let's get back to the earnings of. santander earnings beat estimates, as higher costs from inflation and the cost of covering souring loans. joining us now is the cfo of santander. jose, very nice to speak to you this morning. revenue being boosted in key markets by rate hikes, but on the other hand concerns that as interest rates go higher, that puts pressure on those you have lent money to, and will be be

able to pay it back, how is that dynamic playing out at santander? jose: good morning and thank you for having us again. we had a nice quarter not only on the back of higher rates but primarily because we are growing the number of customers. we already have 160 million customers, 8 million more than a year ago. and these customers are banking more and more with us. , so our revenue was up for the first time this year, third quarter revenue is up 15% year on year, and that drove the 25% increase in net income. we are not seeing oppressors yet, but this will depend on the type of slow down the next few quarters. but the bank is better prepared than ever to withstand any deterioration. but again, we're not seeing any

pressures at the moment in any of the markets we operate. anna: not seeing pressure on equality at the moment, can i hone in on the spanish market and ask what your message of the government is, because the spanish government has been talking about a windfall tax on bank earnings, it has been talked about in many parts of europe, what are your thoughts on that? jose: i think the banks need to be part of the solution in terms of helping families and companies go through the slowdown the economies probably will go through the next few quarters. a tax on revenue, a tax on profits, is probably not the best way to do so. remember that banks in europe are not earning the cost of capital, so we are not seeing any windfall profits at all. it is important that banks

actually earn the capital through the cycle to be able to invest in the business and create money. and we don't think a tax on revenues as has been proposed in spain is the best way to help the economies and credit going forward. anna: it would be interesting to see how the government would define windfall taxes. what do you see on the cost side, where you see the biggest cost pressures? jose: latin american economies in general are indexed to inflation, everything we prices with inflation immediately. cost management in these economies is very difficult because inflation flows through immediately. in europe, they sell back. so, we are not seeing the same amount of pressure from inflation on cost. in any case, our costs are growing below inflation as a group which is one of our key targets. and that's the way we expect to

continue managing costs going forward. anna: we've seen a lot of political activity in the u.k., it is a big market for you so i wanted to ask about doing business in the u.k., has what we have seen in gilt markets and the political turmoil made it more difficult? jose: the u.k. is a very important market, we are in there for a long time. we are there obviously to help our customers, individuals and businesses prosper. most of what we do in the u.k.'s mortgages, this is been a very dynamic market the last couple of years and continues to be. we are increasing our market share, providing credit, and we don't see an impediment in the near medium-term to continue to do so. our earnings and profit in the u.k. show how well our franchise is doing, we are earning

double-digit return on tangible equity in the u.k. but the most important thing is that volumes and the number of customers is increasing. anna: are you braced for a drop in house prices? what are you expecting out of u.k. given this like in gilt yield -- the spike in gilt yields, you increase rates but those have since come down a little? jose: vicki -- the keyword to predict health crisis is on employment. generally, they predicted slowdown in europe and the u.s. but labor markets remained relatively strong. provided labor markets remain strong, we believe house prices will hold relatively well. obviously there will be differences between greater london and the rest of the u.k., but the market as a whole we don't see significant price

drops. anna: continuing to watch on clement numbers. quickly on brazil, what are you seeing, it is a big market for santander? jose: the market there is also very dynamic since the beginning of that they've year we and everybody -- at the beginning of the year, we thought the economy was barely going to grow. it is going to end up going to end up growing around 3%. what's going on around the world is helping brazil. also, next year we now see positive growth. the elections we have at the end of this week seemed to be almost a non-event from the market perspective, the market is comfortable with both candidates basically because of the results of the first round, and the congress that was formed. so we remain very optimistic

about the prospects for brazil. anna: thank you very much for attend this morning, jose antonio garcia cantera, the cfo of banco santander. norsk hydro posted profit above expectations but said outlook remains mixed. we will speak to the ceo shortly. this is bloomberg. ♪

anna: welcome back to "bloomberg daybreak: europe". norsk hydro has posted profit above expectation, but be aluminum producer it says it's outlook is more uncertain amid high inflation and weaker global growth. joining us i am pleased to say is hilde aasheim, the ceo of

norsk hydro with us this morning in studio. can i ask you about the impression you wanted to give the markets yesterday because it seemed as if initially the stock sold off, then started to gain later, they have been talking about whether the bead versus expectations was a high quality one or not. hilde: i think the overall mission we wanted to present was , we are well-positioned positioned in a challenging market. that means we have a strong position when it comes to our cost position, we have long-term power contracts, we are well-positioned for the future but still maneuvering and taking measures in the short-term because we see weaker demand very much on the basis of higher inflation, higher costs, and the fact that people are starting to discuss, should i buy that car or start the building.

anna: you are seeing weaker demand from industrial customers, construction, but not necessarily from the auto sector and renewables where things are more resilient. hilde: that is also a reflection on aluminum being a strategic raw material in the electric vehicle industry. and also, in terms of the energy shift in terms of solar panels. so, aluminum is an enabler for the green shift in many ways which is a positive prospect. anna: structural drivers as well as the more cyclical ones. thinking about where aluminum heads, there has been talk about the lme banning russian aluminum from its metals market, will that have an impact on supply prices? hilde: we have encouraged a ban

on russian metal. if european aluminum is suffering from the war, we see a paradox that a number of producers have been self-sanctioning the metal, while others that are buying the middle are gaining from the war in many ways. we are now calling for an action to sanction russian metal. anna: i assume that would push up prices. hilde: the market is well supplied by metal, it is more to take action in terms of how the war is playing out, in terms of the dramatic change of the many producers having to close down because energy costs are so high. and the inflationary effect also going up. anna: can i ask about the renewable energy subsidiary, you talked about ipo-ing it, but then expressed a preference to look at the private market. how confident are you that you

can do capital raising? hilde: first of all, to develop modern renewable energy is important. it shows the situation we have today, there is more demand for renewable energy. we are working within that line to develop a robust and profitable portfolio of renewable energy projects. the market for ipos has been difficult over the last year, that is why we are looking for alternative ways to raise capital. the mission is to do that by the end of the year. anna: are you seeing interest in private markets because they face the same rising interest rates everybody else is? hilde: renewable energy is one of the key enablers for coming out of the crisis we see now, so yes, there is a lot of interest. anna: we have seen power markets shocked by high gas prices, and

high gas prices filtering into other parts of the energy space. our governments doing what they should be to protect the economy, to make sure that whatever those right bits are, are getting access to the power they need? hilde: we need to shorten the lead time for bringing renewable energy into the equation. that was the case before the war in ukraine. that is really what we are calling out for, because that will be what solves the situation we are in today. anna: thinking of structural changes nv energy challenges europe faces, are you expecting resistance to some types of renewable energy? i'm thinking in the u.k. context about onshore wind, for example. hilde: there is a lot of discussion about not in my backyard. what we are doing in norway now

is to find a way to connect the power to build new power with workplaces. where they are giving the local communities some benefits in terms of having these wind parks close, so they see the positive effect of bringing in more renewables, making places for having workplaces and building the economy around community. anna: hilde, very good to see you so early here in london, hilde aasheim, the ceo of norsk hydro to talk about the aluminum and renewable energy's business. let's recap what we have been hearing when it comes to deutsche bank. the numbers this morning, upside to full year revenue guidance, that is the top line from

deutsche bank. they have also talked about how well they are doing on the fixed side, something we have seen across the banking sector, third quarter fixed sales and trading above the estimate of $1.9 billion. that's a positive on the trading side of the business, but the upside full year revenue guidance range being driven by the rising rate environment. we are seeing banks across europe benefit from higher interest rates, and that plays out well for net interest margins, it also raises questions about bad debt. let's hear from the cfo, who spoke a short time ago to our colleague dani burger. >> we had a really outstanding quarter with revenues up 15%. all of our business is performing well. to your point, you have to navigate these markets and manage your own risks well. but importantly also focus on plans and how you are helping

them manage risk. dani: are they filled full right now -- fearful right now? >> there is cautious, there is some degree obviously of positioning there. on the institutional side, each of those client bases need to navigate with their own set of interests, particularly duration players have always had a difficult environment. what the team has done an outstanding job of doing, rates have doubled, and our fx and global markets businesses have been performing strongly. so we have navigated well. dani: fit continues to go gangbusters, net interest income the rising star, origination, deal flow, that all of a sudden craters. is that shift permanent and that when we think about making into the mix of business, is that a

new regime? >> the regime is always changing, we are focused on having a portfolio of businesses that can create some earnings stability throughout the cycle. you are seeing that with strong, fake, or very weak rotation and advisory. that will change in 2023 as volatility begins to stabilize. i think markets have a clear view of terminal rates. and i think there will be a settling once we have a path of interest rates and the economy. dani: does deal flow come back at that point? >> it is macro shifting back to micro, at which point advisory, for example, the credit markets comes back. there is still some time to go in this volatile environment.

it is important that the businesses that have large deposit books, who are based on growing loans, corporate and private bank are now seeing real momentum benefiting from interest rates and client activity. dani: when it comes to riskier leveraged loans, is now the time to cut back on risk? >> the market's down to only 2.9 billion, we think we have marked that to the appropriate conditions. it is a feature of leverage markets, there will be a backup every once in a while when financial conditions change. the banks work through their pipelines, and then as investors and issuers find more predictability in pricing, the market reopens and you are beginning to see that in the third quarter. dani: certainly some of these big private equity players are looking forward to returning to that environment. given the backdrop you are talking about, and this perhaps

temporary shift, what does that mean for the war on talent? is this era of continually paying up for talent over now? >> the markets go through cycles they are. you have had a very competitive environment in the past year or two. as the pandemic reopening had an influence on our industry, you are seeing that begin to abate. attrition numbers have begun to normalize, and the market has changed where we are investing in where we think growth is going to be. so, i see that normalizing. we are focused on being a great employer, not just compensation but the environment and purpose of the organization, and a portly our ability to support clients and the economy. that's been a real draw to people.

anna: this is bloomberg daybreak: europe. i'm anna edwards in london and these are the stories that set your agenda. deutsche bank, unicredit and santander all opposed better-than-expected earnings fueled by rising rates. tech misses by microsoft and alphabet amid lackluster sales send their shares lower after hours, along with meta, amazon and apple. rishi sunak keeps jeremy hunt as chancellor but is criticized for other cabinet picks. the new chancellor may delay monday's fiscal statements. the futures picture looks to be a little negative, this is coming off strength in yesterday's markets, we saw gains in europe broadly apart

from london which was driven maybe by the pound and some of the politics playing out here. we see chinese equity markets are up today after a strong selloff on monday, but saw it on tuesday, positive words from the pboc today. and also the warnings from u.s. tech as we are seeing weakness in the euro stoxx 50 futures. nasdaq futures down 2% as we look at the earnings story out of tech, weighted down by microsoft and alphabet. also texas instruments weighing on the nasdaq. we are seeing more demand come through for fixed income and yields coming down, which has been interesting as a global turning point the last day or so perhaps as a result of disappointing data out of the u.s. and there is more data on the housing sector to come today. deutsche bank says it will

exceed its full year revenue target as traders continue to take business from rivals. we just heard from james von moltke, over in frankfurt, and dani, can you walk us through the numbers? let's start with that then dive into the other detail. dani: it was a strong quarter for deutsche bank, it is the same drivers we have seen on wall street as well. fit comes back very strong amid this volatile environment. you also had net interest income surging, that's been a huge story for this sector. but the fly in the ointment is origination and advisory. deal flow has more or less seized up, they have been losses on leverage loans. the estimate had been 322 million euros, compared with a year ago, nearly 650 million euros, quite the headache.

when i was speaking with von moltke, i asked if this is permanent, he said dealmaking will come back next year. anna: dealmaking will come back, he sounded confident which is interesting given what he thinks about the macro outlook. what was your take away then from his impression of what's going on in germany? dani: i pushed him on this idea that germany's economy is changing, that all of a sudden it can't be fueled by cheap energy. he said yes, i see a recession of 2% next year for the german economy but he also talked about the idea that the restructuring of the economy will take time, and to be prolonged. that led to the question, what is that mean for deutsche bank? he believed they can navigate it , they have a 2025 outlook they are sticking to. and at one point they are raising their outlook.

but it was interesting to hear him talk about the fact that the german economy will need to restructure and it will take time. anna: what does he think the next crisis will look like? how deep of a recession do we get? dani: we talked about the idea that banks are in a much healthier place with more regulations after the crisis. the next crisis isn't going to come from the banks, he talked about non-banking financial institutions we have seen risks spread out to, which means it is not as severe because it is spread out but perhaps in a more opaque part of the business. i said to him, that sounds a lot like u.k. pensions, so there is that risk and he did say it is something regulators should have a look at. he talked about this idea when it comes to future crises that we are seeing wealth management

and retail clients are at the moment a bit more cautious, more hesitant as well. it was interesting to go through that with him, there are risks, there could be an other crisis, but it won't be the banking sector. anna: dani burger on the road for us, she will be back next week, i'm sure. talking to deutsche bank management about the specifics of the business, the sector managing to do very well with the interest income rising because of rising interest rates, but also thinking about a lot of the headwind still to come for the sector. coming up, we continue earnings conversations and will be joined by the cfo of standard chartered for another conversation about the banking sector. this is bloomberg. ♪

anna: welcome back to "bloomberg daybreak: europe". standard chartered has reaped the benefits of rising rates and market volatility with third quarter profits that beat estimates. that the bank is based in the u.k., standard chartered makes most of its money in asia, africa and the middle east. 's largest single market is hong kong, which has seen its economy hurt by the pandemic restrictions that are curtailed business. let us get to the conversation know about standard chartered then with the cfo, andrew halford, who joins me on set in london. let's start with adjusted pre-tax profit coming in above estimates, talk about they dynamics of net interest income going higher because of interest

rates. >> two futures of the quarter. one is economic growth starting to return in many of the markets we are in, not in all markets for covid to be a thing of the past and rising rates has helped, so the two together, 20% growth in our income and the fifth consecutive quarter where our income has increased. so a good quarter for us. anna: unlike the european banking executives who have been talking about deteriorating fundamentals, you are seeing improving fundamentals because of recovery from covid? andrew: it is a sort of schizophrenic world, you look at the vast majority of markets talking about aggressive economic recovery. we will not be immune from inflationary pressures but they are much less of an issue. anna: what about china, you have

mentioned credit impairments in china and the property sector, was the narrative around property at this point? andrew: for us, the key thing is we are not seeing the overall chinese economy. we are focused on corporate's, import and export, we have had several quarters even through the last period where our growth in china has been very strong. and in the last quarter, or growth in china was 20%, so a significant performance. we have to take further impairment charges with regard to the real estate sector in china. it is a relatively small part of our book, but it is one part that has been a little more challenging. hopefully, the next few quarters that will stabilize. and with government actions to try to get that sector back on its feet, we will see improved. anna: you are not reflective of

the gdp story in china. given the challenges that economy faces, and the ongoing covid restrictions which still seemed to be in place, does that encourage you to build up your non-chinese asia business? or do you remain focused on china? andrew: we remain focused on china. next year, the gdp forecast rates will be up there with the high growth rates of any of the markets we are in, so i think we need to take a medium-term view. we are very committed to both china and outside of it as we see other economy starting to pick up, we should be a beneficiary both inside and outside of china. anna: we talked about how hong kong is a big market for you. one analyst said a break is now a non-zero risk. andrew: we think this is a very low probability risk, it has been around for a period of

time, it is not our core hypothesis, we think it will stay as it is and the world as we have seen it recently we do not think it will be disjointed. anna: with the changes in tensions between the west and china, what is that leave your business, and the place of hong kong in the world of global finance? andrew: hong kong has been a core part of our business going back 150 years. we will have a big presence in hong kong and in china as well, and i see both of those continuing as we move forward. anna: let me ask about the u.k., even though most of your business happens elsewhere, are you worried about the possibility of a u.k. bank tax? there is a surcharge already, but further taxation as a result of the new administration, we heard from the prime minister yesterday about tough choices. andrew: clearly the government's

have to going to look very closely where it needs to go to fund the future. to your question, one should reflect upon the fact that the banking sector already does pay a premium rate of tax. and it is important that the banking sector is robust because it will be both a big delivery agent for getting the economy going, well-capitalized banks is important. and although profitability has improved, it is after a period of very low profitability, we are scarcely back to covering the costs of our capital. so i'm sure the government will factor that into the cost of their thinking. anna: i was talking to the cfo at santander making a similar point, they are not covering the cost of capital in europe. is that how the government should think about it? andrew: i think they have got to be mindful of business making sufficient return, that they are investable for the long-term. so we will see what happens.

anna: would you consider your domicile if u.k. taxes went up significantly? andrew: we have been domiciled here for many, many years and there are always times where people say maybe you should or shouldn't pay, it is a good place overall. anna: in terms of next year, we talked about your business being asia focused and being different compared to european businesses facing macro headwinds, how do you p repare for 2023? andrew: we are moving in a positive direction which may be hard for some in the western world to believe. covid with the exception of china is seen as very much a thing of the past made if you look at growth rates forecast for next year, the growth rates in asia are significantly higher than in western markets. as you said, a minority of our businesses is in western

markets, the vast majority in asian markets that are going. so our teams are very encouraged about what is going on. interest rates increasing also was helpful. and the future for us at the moment actually does look good, so we will just continue to deliver on it. anna: how is the cost dynamic developing? banks have talked a lot in recent months and quarters about higher staff costs, is that something you are dealing with? andrew: it varies by market. i would say probably more pressure in the western markets, some pressure in some of the asian markets but less overall than would be the case for a western bank. anna: andy, really good to have you with us this morning, andrew halford, the cfo of standard chartered. we have had earnings from the banking sector this morning. coming up on this program, some of the biggest u.s. tech stocks tumbled in after-hours trading following disappointing results

from alphabet and microsoft. more on that sector next. this is bloomberg. ♪

>> on the high level and persistence of inflation, the rate environment, and now with a recession call both in the u.s. and europe, the recession will be around 2% next year in gdp terms relative to 2020 as you say, there is a deeper restructuring that needs to go on around energy costs, germany's export industries, our trade relationship with china. and so, i do think repositioning will take some time and will be a number of years. anna: that was that the deutsche bank cfo speaking to bloomberg about the economic outlook in germany. interesting to recap some of the things we have heard from the

banking sector this morning. deutsche bank, we heard about his 2% forecast of recession in germany, but this is on the back of the business reporting its highest pre-tax profit since 2006. that is view with a higher interest rate environment and think sales and revenue beating estimates paid.let's get the latest on unicredit and what we are hearing from that business. they boosted their profit goal a second straight quarter. the higher rates environment also helping that company. it was also the case at santander, the higher rates environment also of assistance. the bank saying it is not see asset quality pressure yet, that was coming through in our conversation with the cfo earlier. let's go to u.s. tech where we have had big news as well. the biggest u.s. tech stocks tumbled after hours effort is appointing earnings from some big names. alphabet sales missed will microsoft forecasts fell short. let's get to matt bloxham from bloomberg intelligence. the key takeaways for you then

from these earnings? >> we are seeing currency headwinds of five percentage points of drag on growth, and a slowing advertising market, both slick or full and structural. and also signs of slowdown for general but also cloud computing which is important for all these companies. anna: is the dollar story intensifying? we have seen the dollar continued to gain the past quarter. >> maybe three percentage points of growth, definitely a stronger effect this quarter. microsoft's underlying results excluding currency were more or less around the same level. for google, we saw that drop from 16% last quarter to 11% this quarter, so tougher for google compared to microsoft. anna: it sticks to google maybe a little bit more. that's the story around tech names, what about twitter.

what is the latest on musk? he is calling for this to be done on friday? >> he had a conference call apparently yesterday with bankers saying he is intending to close the deal by friday, which was important for the banks because they need to get all that debt wound up. but there is a few days between now and then so lots of things could happen. anna: and we get some more earnings today? >> meta is today, apple and amazon tomorrow, so some big ones to come. anna: matt bloxham joining us with the latest on what we have heard from the tech sector. alphabet sales disappointing, microsoft, the forecast disappointing. also a disappointing forecast on that front. let's bring this hour to a close. chinese equity markets this morning bouncing. now they are only up by .7%.

we see stress coming through in china but maybe fading. we have seen a rebound from heavy selling on monday, then a bit of a rebound in tuesday's session and another rebound today. broadly buying in the asia session, but the u.s. story is looking very different and u.s. futures are lower, down by just .2% -- 2% on nasdaq futures. look out for u.s. data later on today, we will get further insight into the u.s. housing market. we have seen weakness, with their be more to come? we will continue these conversations next. this is bloomberg. ♪

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