>> this is bloomberg daybreak:

europe. i'm tom mackenzie with manus cranny in europe. >> another jumbo hike. raises rates as inflation swirls in the u.s. fed officials reiterated the focus is on tackling price pressures. >> sam bankman-fried apologizes to staff after financial buffers plummet $551 billion. sequoia says sorry to investors for backing ftx. credit suisse sees a fourth-quarter loss for the unit. shareholders vote today on a capital increase at the embattled bank's egm. it's horrendous news at wealth management of credit suisse. outflows are down from early october. they are not reverting. where's that money flowing to?

that is the question we need to ask ourselves. in terms of assets under management, net asset flows -- assets flew out of wealth management, 10% outflow at the end of the third quarter. client activities are subdued. this is a pretty bad set of headlines before the fourth quarter closes. tom: we look ahead for more details around the restructuring of credit suisse. we will be speaking to octavian for insight. goldman sachs and the skull of 4% on the 10 year yield through to the end of 2024. our yield forecasts are based on

that we see no recession and we think and elation is going to still be above the fed's target. manus: that's structurally higher inflation. not only are they saying no recession, we remain at these higher levels. it's different than it was 30 years ago. tom: and a reminder of the entrenched nature over in new zealand of inflation and the height of 75 basis points. after a day when you saw the s&p stateside get back about 4000 for the first time since it timber, european stocks have gained 13% since early october. futures in the u.s. pointing to very modest gains. european stocks are looking healthier. across the benchmark in asia, .4% building from what we saw stateside.

a soft dollar is playing into this modest risk on sentiment. manus: let's check in on the bond markets. obviously the kiwi bonds are lit up early for christmas. there is the 10 year at futures. yields are just incrementally higher. the dollar is flat. take you to the oil at the top of the chart. we expect more news flow on the price capped. russell hardy says the russian price gap is likely to be about $60. it could be worth a million bucks by 2030. she's comfortable with the etf at grayscale and of course there

is a wider confidence that played. tom: juliette saly will take us through the asian session. charlie wells will explain why credit suisse is looking at job cuts in china. then we will head to qatar with david hellyer for the latest on the world cup. manus: heck of a and upset with saudi arabia. juliette saly is back on terra firma. she's got a resplendent shot. >> we are seeing the peak right now in terms of where it may reach from new zealand. after they did come through with that jumbo 75 basis point hike and even signaled they were

tabling 100 basis points, taking the official cash rate to 4.25%. warning that you could see recession mid 2023. let's have a look at what we saw in market reaction. a big spike in yields particularly at the short end. lifting up movement in the australian treasury curve as well. we did have that story -- signaling potentially an end to this crackdown on that space. you've also got the covid zero policy still in play and that has seen workers at the foxconn plant in china clash with security.

tom: remarkable images from that factory. central to the production of apple iphones. juliette saly in singapore, thank you. sam bankman-fried has apologized to staff in a letter that outlined a clash -- crash and collateral from $69 billion to $9 billion. what is the latest? >> sam bankman-fried, the cofounder of the bankrupt ftx wrote to his ploys apologizing for what has happened to ftx. he mentioned the collateral fell from $60 billion to $9 billion. he said i didn't mean for any of this to happen and i would give anything to be able to go back and do things over again.

so he is saying sorry to his staff but we don't know about the numbers. as we know from the recent proceedings that the u.s. bankruptcy court has allowed ftx representatives to keep their top creditors identity hidden because they are worried that if the names come out, rivals can take away business, whatever is left of the exchange. this is the process going on with ftx bankruptcy now. manus: it's staggering in terms of some of the admissions on the lack of comprehension of risk from sam bankman-fried himself in terms of what he said. but that goes back to risk management. like you for being with us this morning. to credit suisse.

there on the outlook for the fourth quarter. let's bring in our bloomberg reporter charlie wells. this is what credit suisse absolutely did not want to happen. a continual gusher of money out of the bank. on the day they go for approval of a capital increase. >> wealth management was supposed to be the saving grace for credit suisse. they were supposed to retreat from wall street and really rely on their historical roots has wealth managers. these headlines about bad news for the wealth management sector is exactly what you don't want to see especially on a day after we've also had stories about layoffs in china. about a third of investment banking staff being laid off, 40% of research staff in china potentially being laid off as well. so this really adds the tension today on an extraordinary general meeting.

tom: that's quite the turnaround when it comes to china. what is going to be top of mind for you? capital raise or more details around the restructuring? >> the bank needs to raise $4 billion in capital and they have two plans. they want to issue new shares to some strategic investors and want to give a rights offering to existing shareholders. of course i want there to survive, but they didn't want to see their shares diluted. according to this plan that if you bring on the saudi national bank, you see a dilution of 34% on earnings-per-share. if you don't, you see a dilution of -- they are between a boulder and a hard place. tom: charlie wells always fantastic.

shares and manchester united football club jumped in late trade after the club's american owners announced they are considering putting the iconic premier league club up for sale. let's get more from on the ground at the world cup in qatar. why are they looking to sell at this point? what's the motivation? >> as we reported in august, they need to invest a lot of money in the stadium. the glazer family itself is split between one or two came to stick with the club and one or two of the family that don't want to put more money into it. so they started looking for a

minority investor. yesterday's development suggests they might consider an outright sale. in august we were being briefed quite heavily. so i think it's the billion pounds or so that they need to raise. there is also the fan disillusionment. they haven't won a trophy since 2013. they are in a world now where they are competing against the likes of newcastle, who are allstate back. these states can invest huge amounts of money and players and it makes it very hard for a lot of the other clubs are trying to

run profit focused models to compete. manus: it is certainly a very bifurcated landscape. stock up 19% yesterday in the u.s. chelsea went for 4.2 5 billion. someone in this part of the world will probably pick this up. down the road from me in abu dhabi. they love a bit of football. >> i wouldn't be surprised either. man united fans would love to be involved in a sort of fan takeover. people who support the club. on the other hand having estate backed would achieve more success in the field.

manus: of course it isn't manchester united without ronaldo. let's take a look at some of the things going into market. it's an important day in terms of data. we've got november pmi for both the euro area economies and the u.k. we will be watching for the outcome of scotland independence court case and what the court is expected to announce its outcome and the south african president meets the british counterpart in the u.k. tom: jeremy hunt expecting to be grilled on that autumn statement. the latest fed minutes will be released. looking for any clues of a potential pivot in policy.

coming up, how open is the fed slowing hikes? the implications of that call from goldman sachs. manus: absolutely. how high will they go. we will speak to octavio marenzi about the banking space on both sides of the atlantic as we have breaking news on credit suisse right here on bloomberg. ♪

>> a high savings is likely to provide momentum to consumption and require higher interest rates. it is certainly positive that we see that these households are wealthier, less financially constrained and better insured. reduced inflation will mean we have to incident saving

overconsumption. >> restoring price stability remains the number one focus of the fomc and we are committed to putting inflation on a sustainable downward trajectory. tom: that was kansas fed president esther george. wall street rallied with the latest fed comments. goldman sachs is predicting the u.s. may dodge a recession. joining us is deputy head of different markets research. i want to get your views on the direction of travel. goldman sachs do not expect a recession in the u.s., that is not their base case. that ties into their views that you are going to see 4% on the 10 year through the end of 2024. could the equity markets look through that? >> the door is now for a

reduction of rates. they said they would look into cumulative tightening. in the evolution of the economy and inflation. but we definitely think that the fed will continue to remain hawkish. inflation is an unacceptable high level in the fed is really concerned that the market -- the reduction in magnitude of interest rate hike, as dovish people, lack of commitment to fighting inflation. we really think the fed will continue to remain on the ok side. the fed is now ready to accept a recession to bring inflation back to 2%. regarding the fed, the fed will remain hawkish.

i will really be a bit maybe less comfortable with this position by goldman sachs that we do not have a recession. the probability to have a recession is rising. manus: let's pause for a moment. we've got a lot to digest in terms of where the fed goes. how important is it that a strong hawkish message comes out of these minutes to reset the narrative and dissuade us of this hope for pivot? >> i think the fed want to convince the market and they are committed to 2% and that reduction in the size of hike does not mean that the

tightening is over. that's really an important message they want to give. and really they are ready to accept a recession to bring inflation back to 2%. because today the u.s. economy is supported -- still supported by past fiscal and monetary policy response to covid-19. you have u.s. consumption supported by credit cap growth. the impact of the monetary tightening on companies has been so for quite limited. tom: fold that into your views on bonds. bonds are back. this is a key thing for you. where are the opportunities in fixed income? >> bonds are back because growth is slowing.

now we see some good opportunities especially in ig well rated issuers and we are moving in duration from slight underway to neutral now. we are still cautious and very selective and we favor names that have good ability to generate cash flow and limited short-term refinancing needs. definitely bonds are back is our call right now. we maintain a cautious stance because we think -- is not completely priced by market equity. manus: we will keep an eye on that. bonds are back. where will it go on hawkish tilt from these minutes. had developed markets research.

violent protests at apple's main iphone plant in china among strict covid restrictions. we have the latest on bloomberg. ♪

manus: its daybreak europe with manus cranny. breaking news in the past couple of hours. we are seeing tensions boil over at apple's main iphone making plant. police and paramedics in attendance. joining us now from sydney is emma o'brien. this is an important business story but it's also a social story in terms of if you lock

people up in a factory for months at a time, there is a consequence. how serious is this in terms of the escalating protests in china? >> we have been seeing protests against apartment lockdowns, people pushing back about putting into mandatory quarantine. but this takes it to another level because it is a really sort of obvious threat to the economy and these closed-loop systems which is what this foxconn iphone factory had been in for about a month, where workers are basically confined to the manufacturing facility going from their dorm to the production line and back constantly tested. this had been a lifeline and a way for china to keep doing covid zero without some of the very long term manufacturing

disruptions. we saw during the shanghai lockdown they facilitated tesla for example doing a closed loop like this where some of the workers were sleeping on the factory floor. but they didn't go on as long as this and covid zero wasn't quite at this point where you are seeing regular pushback whether it be online where it's quickly censored or in the streets like this. tom: does the 20 point plan still hold? it looks like it's fraying at the edges across the country. >> very much so. it's only been just over a week. if you look at the nomura index of how much is china -- how much of china is locked down, it rose to a record last week since the ostensible easing came down from the top. you've got attention on the

ground between officials who want to implement the will of the top party leaders but it's colliding with the fact that china is seeing the peak of a very strong outbreak heading into winter in many parts of the country. so while they may have eased on testing, we are seeing that role back somewhat surreptitiously. no one is doing citywide lockdowns anymore but they are having to put these hard-core curbs into place. tom: emma o'brien, thank you very much. coming up, credit suisse. we will get as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to 60% a year.

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manus: it is "bloomberg daybreak

europe." >> the rbnz raises rates by 75 basis points as inflation swirls. in the u.s. fed officials reiterate their focus is on tackling price pressures. we get the minutes today. sam bankman-fried apologist to staff after financial buffers plummet by $51 million. sequoia says sorry to investors for backing ftx but defends its vetting process. plus credits sees a fourth-quarter loss for the wealthy management unit. -- credit suisse c is a fourth-quarter loss for the wealth management unit. manus: 10% in assets under management.

the bigger shakeup in the tree on markets is the fact that the rbnz is talking about 100 basis points of a hike. what does that do as we get the minutes from the fomc in terms of resetting the tone about how rates -- here is a snapshot of risks. russell hardy record supplies b around $60 from russian bitcoin bounces back. kiwi rates is really where you are seeing this monster rise in rates on the back of this hawkish tone and 100 basis point narrative. that has not prevailed across the rest of the global bond markets yet. tom: for the moment at least isolated, but fascinating the language from the rbnz about how this inflation picture has become, and the recession risks. across the asian market, the msci, you have seen gains at 0.4%.

you had better earnings coming through from the likes of best buy but also abercrombie & fitch. and data. bad data is good news for the equity markets. manufacturing softer than expected suggesting a building on the view that maybe you have reached peak inflation. we have fed minutes for the november 1, the second meeting coming out later today. futures stateside, the s&p crossing above 4000 for the first time since mid-september. futures lower by 0.1%. futures in europe looking to build upon gains we have seen since mid-october, 13% for european stocks currently pointing up. euro-dollar currently at 103 up 0.2%. we continue to follow breaking news out of credit suisse after the embattled swiss lender provided an updated outlook for its fourth-quarter as it prepares to ask its shareholders for permission to raise new

equity. manus: credit suisse say net asset outflows approximately 6% of assets under management at the end the third quarter. the move comes after bloomberg reported deep cuts in china with at least a third of the investment banking workforce said to be facing the acts. joining us now is octavio marenzi. good to have you with us. breaking news. when you see 6% of assets under management and 10% of wealth management money going out the door, that to me is a confidence crunch. what is the risk that confidence crush morphs into something bigger and a crisis? >> there is a real risk that cut clients continue to pull out their money. bear in mind, it is under the swiss wealth management business. you tend to have people looking at capital preservation more than anything else.

these are risk-averse investors. they look at the landscape and say credit suisse is not looking so stable, let's move money out. ubs down the road. that is one of the risks they face. even if there is nothing wrong, the image credit suisse has started to portray is leading people to put their money elsewhere. that is a very bad situation for them to be in. tom: you don't think this is going to stop anytime soon, but what is the prescription for executives at credit suisse as we look ahead to the you tm to try to address that concern? the confidence crisis in this bank. >> well, they are looking to raise a bit of an unusual vote. once for existing shareholders and another time for new shareholders. a two-tier approach. but there is no other alternative on the table.

it is basically take it or leave it. dilute you, raise extra capital, restructure the bank. what they are saying they are going to do is restructure the banking, spin out a few things, try to reinforce the core franchise in the swiss banking business and the private banking wealth management. do they need that much money to do that? they are erring on the side of caution. they should be able to spend that investment banking without raising that much money. perhaps they do need the capital cushion as their businesses are suffering. the swiss banking system looks sound. wealth management is looking iffy but the core retail commercial banking looks solid. that is a silver lining on the horizon. mark: -- manus: it is an irrevocably changed business. they are cutting jobs in china. here we are, a third of china bankers are going.

you are trying to reinvigorate a brand brought in from 20 years ago. why would you invest in this if the only thing you are really buying is a drop in wealth management, a swiss business with a much obliterated china exposure? >> it is probably a smart thing to cut back on the investment banking side. all banks around the world, particularly china, have done badly. look at the leading investment banks. the ipo or equity capital market business. they have done badly. in many cases that business has declined by 90%. revenues over the course of the past year. it's not a bad idea to think about restructuring that. i did scratch my head when they said they were talking about pulling out the name credit suisse, that is a name we have not heard for a long time. i wonder what difference they think it is going to make to rebrand the investment bank. perhaps that makes a difference,

it is hard to see why. it is signaling to the outside world we are going to spin this off and it's going to become a separate unit and this is the first step, a renaming exercise. tom: on the jobs front another concern is the walking out of the door of key executives of this bank. more broadly you are talking about a headcount of 15,000. do we expect to see further job losses or is it going to stop at 9000? >> the risk is your best people start sending out cvs and looking for a lifeboat. they start saying this whole thing is looking shaky, i should start thinking about working for somebody else. in most of these jobs, your star performers have an open door at any other bank. your traders, investment bankers, key commercial bankers can very easily find jobs other places. that is the risk they are facing, that their best talent walks out the door. they say this is not the bank

that i joined, the bonus pool is shrinking, prospects for the firm are not looking great. are there going to be more job cuts? possibly, may be likely. the real problem is you lose top performers and you have to figure out some kind of program to keep those people happy and get rid of the dead wood at the same time. the most productive employees walk out the door, that is the big risk. manus: the collateral is worthless, so the equity they hold when you go across the street -- you know, you just don't have the same bargaining power in terms of renegotiating. you are right, bringing back csn is maybe not the answer. it's shift gears. socgen putting together you jv which is interesting. it speaks to the consolidation story. in terms of the equity market. what is your first take on that?

>> it was kind of unusual in the sense of the sell side and buy side getting together, combining equity research with equity execution. i thought that was a bit unusual . interesting to see that happening. socgen has done reasonably well in its equities business, cash equities, and particularly well at equities derivatives. so i don't think socgen is feeling cost pressure. part of the ploy is to reduce expenses. become more efficient. there was not any particular pressure on socgen to do that. perhaps a good move to consolidate that. i think you are going to see more of these kinds of things because regulators are still very loathe to allow mergers of large banks.

we do not want to get ourselves into a too big to fail scenario again. we need to see alliances become more common were people spin off one business and on a business unit by business unit basis create the skills of economy they cannot at the macro level by merging institutions. i'm not sure it will make that much difference. socgen is not an arm's players and cash equities, but -- is not an enormous player in cash equities. tom: good to see you, thank you for your take on that breaking news from credit suisse, warning of up to $1.6 billion fourth-quarter loss. let's get the bloomberg first word news. today's top stories. the kiwi dollar jumped as new zealand's central bank raised rates by a record 75 basis points and signaled further tightening ahead. the monetary policy committee lifted the cash rate to 4.25% on the property market.

the rbnz central projection now includes a 20% fall in house prices. from their peak a year ago. the u.s. supreme court has cleared the way for a house committee to get six years of donald's tax returns. the move rejects a last-ditch effort by the former president to block the internal revenue service from handing over the documents. the committee says it needs the documents to consider potential legislation on presidential compliance with tax rules and mandatory audit policy for presidents. saudi arabia has declared a public holiday after pulling off a massive upset in the world cup. the middle eastern team beat argentina, one of the favorites to win the tournament, two p1 in the opening match -- 2-1 in the opening match. saudi arabia's king salman announced the snap day off for all workers and students.

that is your first word news. mark: -- manus: thank you very much woods reiterated her faith in crypto assets in the wake of the ftx collapse. she spoke to bloomberg in new york. >> the infrastructure, the technology has not skipped a beat. throughout this entire crisis. the hash rates, bitcoin's hash rate is at an all-time high and that is an indication of the security of the network. on ethereum. we are seeing the total value state at $24 billion. that is an all-time high. the infrastructure is working beautifully. as far as coinbase, this is an onshore regulated company and wanting to help shape regulations, the ceo and cfo

have been leaning into what is going on right now and saying ok, regulators, we need more clarity in order to protect investors. those who wanted to get involved with certain types of crypto were forced offshore and look at what has happened. i think coinbase is going to come out here looking very strong. it just lost a very big competitor in ftx. >> what is the market missing though? that could be one narrative, kathy. at the same time we have not seen shares of coinbase rally since ftx's collapse. do you think that reflects broader concern about people's interest in crypto following ftx's collapse? >> i think it is more fear. many people say we don't know what we don't know.

so what we do is we step back, put perspective into the situation here. what do we have? the entire crypto asset ecosystem is an $800 billion ecosystem. apple is three times larger in terms of market cap. that is some perspective. many people are saying is this another lehman? could we see the domino effect here? i have just given you one reason why. the banking system back in 2008-09, trillions of dollars and it was the global banking system. right now we have it seems from ftx, five to 10 bullion dollars in creditors -- $5 billion to $10 billion in creditors. ftx will be making claims. lehman, that was $1.2 trillion

in claims. try to put perspective. this is fraud. tom: that was arc ceo kathy woods speaking to bloomberg business radio. coming up, the european union plans for a price cap on russia's oil exports. this is bloomberg.

manus: it is "daybreak europe." the eu looks like they are going to soften the price cap for russian oil exports. that is as the bloc shapes an emergency brake on natural gas. our team leader for middle east energy and commodities is paul wallace. i demoted you or promoted you there, i don't know. that i make you a managing

editor? give him a pay rise, a new title. where are we on the price cap? >> we might find the final details today when eu officials meet and they are meant to hammer out what level the price cap is going to be set at. broadly speaking the industry thinks it will be around $60 per barrel, maybe higher. it is very difficult to do this in a way that keeps -- that basically meets the intentions of the americans and the eu, which is to limit the revenues going into vladimir putin's war chest while ensuring there is no drop in supply in global oil markets. we will have to watch closely how russia reacts. russia has said it is not going to sell oil to anybody that imposes a price cap on them but they may not have a choice. they have lost a massive amount of revenue from cutting off gas supplies to europe and they may feel they cannot afford to start

dropping their exports of oil as well. tom: opec-plus was going to come riding to the rescue with an increase in output. the wall street journal -- did they get it wrong? was this opec-plus or other members testing the waters? what do you make of how that played out? >> i think if you look at the reaction from the saudi's, which as you say was very strong, it was unambiguous, it was false, this idea opec was considering raising production. i would have to say it was just an incorrect report or it was delegates getting the message wrong. everything the saudi's said in the past two to three weeks including what energy manus -- energy minister abdulaziz bin

salman said, if anything, the group is looking to cut production again. it will keep things steady when it meets december 4 or cut again. the idea it is going to start reversing course and raising outputs seems very unlikely based on what the saudi's have said and what other members have said, the likes of algeria and kuwait. also the secretary-general. when you look at what they say collectively, they do not sound like people who are about to announce any increase in production. they are very much focused on global demand at the moment. they are not talking about any problems with supply that might arise from russia or any other producers. for them it is about weakening the economy -- it is about a weakening economy and that is what they are focused on. tom: we will see if they reiterate that at the next opec-plus meeting. paul wallace, thank you for the

latest on all things within the energy markets. coming up, manchester united's owners say they are considering selling the club. we will talk about what that means for one of the world's biggest football clubs. this is bloomberg. ♪

tom: now, shares of manchester united jumped in late trade after the club's american owners announced they are considering putting the iconic merely club -- premier league club up for sale. let's get more on the soccer story. my goodness. the football story. that is what happens when you are married to an american. why are the glazer's looking to sell? >> they have resisted it for so

long. there has been massive fan pressure. i think now with liverpool, some of the american owners have been beginning to say maybe we have good valuations, we might as well get out. they are less concerned about the strength of the state back clubs. having to compete with them. disappointment perhaps at the collapse of the super league. with manchester united has just been really frustrating. they have not won anything on the pitch since 2013. a long time for them. manus: and they have one star less to play with in terms of ronaldo parting company from the club by mutual agreement. what do you make of that?

>> interesting. when i first heard the shares were going up, i assumed it was because he was finally leaving. he has been an amazing player in his career but the past few months, he has been deadweight firm and united. -- deadweight for man united. there is relief. i think he did have a good year last year but this year it seemed with the new manager things are moving quite quickly, a new squad, a younger group of players, i think that is frustrating for him. manus: it is indeed. david, there you go. david hellyer in qatar at the world cup. it just all came to a bit of an awkward end over going on as a

substitute. i think i have a long way to go on the instagram front. he has 500 million instagram followers and a hell of a photograph with him and lionel messi for louis vuitton. tom: you are about halfway there i think. you need one of those big controversial interviews where you rip management. manus: i'm catching up. tom: you are almost there, manus. marcus looking at gains of 0.3%. up next, bloomberg markets europe. this is bloomberg. ♪

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