manus: a very good morning.

i am manus cranny in dubai. this is "bloomberg daybreak: europe." downshifting plans for rate hikes the fed. e.u. talks price cap on russian oil. energy ministers from the block meet today. they're looking to bridge differences of natural gas. canary in the coal mine. a red flag, we speak to the man who walked away from rescuing the ftx crumbling empire. the ceo of binance joins us. slow down.

the fed are channeling garfunkel and that the stunted majority want to slow the pace of tightening. standard chartered, we will stay at a higher level. when will the fed to pivot -- the fed be ready to pivot? june 23 and june 24. is that too much? standard chartered says there is an evenness and balance concern over overdoing the hikes. there is rollover in the dollar, the bank of korea has gone for a smaller tightening. they are worried about the

economy. that gives a monster move in the dollar. down about a third of 1%. they are losing 1.5% in two days. jobless claims already three-month high. the mis the worst. it will be a soft landing. we do not know how hard it will be. and give you the data points. futures are trading higher. yields are lower on this dovish interpretation of the fed. let's get to the reporters around the world. the latest from the fed.

tools is on the line with the asian markets. anna has the latest on the crypto space. fed minutes arrive. policymakers are leaning towards a slowdown in the pace of hikes. this is one of the mitigated risks of over tightening. let's get you paul dobson. we are mighty dovish in our take. are we a little bit too enthusiastic? paul: what we can see from the market takeaway is buying into the idea that the federal will slow down there hikes. the next thing, how long will they keep hikes at that level? what is the peak? will the fed maintained that they will keep going higher?

a little bit more force as well. the fed is kicking down those cobblestones. manus: there is a sense of relief. i think it is being surprisingly dovish. they are looking inside these numbers. thank you very much, paul dobson. in china, record covid cases again. juliette saly pulls it together. we have this risk of a response mechanism on a daily basis. it is an explosion higher.

because of this smaller narrative in north korea. >> a lot of happening -- a lot is happening. malaysia prime minister looking at -- it was actually trading at a 50 month high on this expectation. it is stronger as well. when it comes to the china picture, we had seen some weakness. that is turning around now. those stocks are listed in hong kong rising. they are higher for a third session. part of that is the dollar weakness story. it is that smaller hike as well. we are looking at a height of 25

basis points. it is the story of trying to rein in inflation levels. the bank of korea has downgraded the growth forecast over to 1.7%. they are starting to signal the potential and saying that the credit market relief will be a key forecast -- a key focus. manus: will if you read that piece, he said we are not just headed for a recession but the world is on a break of a major shift. we were turned that little bit later.

inq1. that will be the first harbinger of how investors are thinking about lower growth. that's number one. number two, nobody in the markets in general given the bear market bounce we have seen is pricing just a bad eps downgrade could be and that both guidance and actually is would be lower than anyone predicts. at 4000-plus, we are still very expensive and we think about the eps. manus: that is something we keep

an eye on in january. one of the big house notes from bank of america. they say that this is probably one of their top trades for 2023. if we get the earnings downgrade that you have just suggested we might get in terms of earning per share, is technology susceptible again to another slump again? >> i think it is. we have seen that with technology companies, one of the things we have seen them do more than any other sector, they have cut jobs and they are trying to get to better profitability metrics. so, you're going to see better numbers come out of the tech stocks in general over the next couple of quarters as they tried to stabilize. however, as eps guidance comes

down, as you see growth come lower -- we will either have lower growth or a recession. we all have to hope for lower growth. recessions are not usually just 1% or 2%. they can be quite deeper than that. in either of those scenarios, you will see a further text slump. for a lot of these tech providers, if they are looking for enterprises to buy their software, and you see their eps situations down, i can't foresee how tech has a good year when the market does not. manus: ok. thank you so much for being with us this morning. some pretty strong calls. coming up, we will catch up with the remy cointreau ceo. the drinks giant has had a pretty impressive operating profit. 319 million euros. this is bloomberg.

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manus: it's daybreak era. the numbers and for remy cointreau. the french distiller has reported higher profit earnings and a -- expects normal consumption for the rest of its fiscal year. joining me now is the ceo for remy cointreau. so, you've got a cracking set of numbers here. margins are on the up. your net income is flying higher. strong organic growth. where is going to grow most significantly in the next fiscal year? >> this is a tricky question. i like to say it's harder to

predict the next six months than the next 10 years in a current environment. the growth will definitely and hopefully come from china on our side. this is the way i look at it. obviously i'm not speaking for the very short-term. we hear about measures being taken this short -- this week that will not help in the short term. but the prospects are very positive. the wine and spirits account for only 1.5% of the total spirits consumed in china. every time against the rules against covert are eased, we see consumption back. the last example i have in mind is that we had three did -- days and plaza 66 in shanghai last weekend, we had record sales, traffic was huge, we gathered

something like 600 vip's. and now shanghai is locking down again. manus: so you have these -- ok, you have these monster moments i suppose when you get the reopening. hennessey is running out of champagne. have you got enough stock? are you fully stocked? are you carrying extra stock? are you ramping up preparedness for the reopening? >> we are ramping up for sure, preparing for the reopening, adapting to the environment. we were hit in may of last year because we have only one warehouse in china based in shanghai, now we have three. we are preparing from a logistics standpoint. we've been running out of stock for the last two years.

we are now in the process of recovering a good level of stock . we are now improving in the u.s. sorry, please. manus: i suppose the natural correlation with that is it is a beautiful premier product. it is already moderately expensive to have. so do you squeeze it? are you going to raise prices given the restricted supply and the issues around that? what is tolerable for your average client? are you going to raise prices 5%, 10%? give us an indication. >> between 5% and 10% is a good benchmark. current inflation is creating a positive context when it comes to managing prices.

if you drive your price depending on inflation, you take risks. pricing is driven first and foremost by pricing power, which comes from the quality of the product, the desirability, the quality of the experience you can propose to your clients. we have been investing heavily in this, increasing prices over the past three years, not because of inflation or sourcing, but first and foremost because we have been investing behind our brands to make them more desirable. this is not new for us, but we are going to keep increasing prices in a more favorable context for price increases, while keeping on investing in our brands because it is pricing power that is driving price rather and more than inflation, which is just creating a context. the last thing i want to say about inflation because i get the question very often is the fact that in our business we are

pretty much driven by cognac and cognac is a liquid which is aging seven years on average. the liquid we put in our products today is somehow seven years old, which means that we are basically less impacted by inflation on cognac as liquid as a big share of the cost. manus: you came well prepared for the bloomberg interview on the inflation answers, so well done. on a slightly more serious note, wage inflation, input inflation, are you seeing a peak in inflation on the input side of the business? i know cognac is the single biggest input. on the supply side, on the glass side, are you seeing a peak? >> no, i wouldn't say so at this stage. we like to much visibility. prices are still in preaching -- increasing. i would differentiate logistics

and the cost of goods. the logistics, i hope we are seeing a peak. we see that the prices are now stabilizing, the costs are stabilizing. there are some positive news there. it is stabilizing at least. on the cost of goods front, if you take glass for instance, the situation is very uneven between points in the u.s. where the cost of energy is not increasing that much compared to europe, for instance, where we are very much dependent on the ukraine situation, and where we keep seeing energy costs increasing, and where we keep impacting on air dry goods for instance. i don't see inflation being totally over, but on the other side i'm confident on the pricing power of our brands, particularly on our high-end and cognacs. but the situation is still tense. manus: that's an interesting difference from your side.

one of the thing i'm curious to get your response on was the city is booming and dubai is on fire for champagne, etc., you would say to me the biggest growth opportunity for you might be more in north africa. what kind of expansion can you see in those markets relative to hear, where champagne is swelling rather than reflective brandy moments here and dubai? >> yes, dubai is booming. dubai is in a very specific situation and it's very exciting for all of our brands. having said that, it is a muslim country, let's say, so these are not the number one markets if you look at them in the long run with regulation. but the rest of africa, specifically north africa, if i look at africa, i'm listed in south africa, nigeria, which are huge countries where there is a strong appetite for our products

beyond champagne. we are witnessing this boom in champagne, but it's interesting to witness it also in the cognac. these markets are the ones i would look at. south africa and nigeria are probably the number one markets. markets which are growing very fast and an appetite goes way beyond champagne. these markets are attractive for us. manus: well done and the world cup by the way, i see france did better than the germans.

no rivalry there from an irishman. i'm neutral. [laughter] the ceo of remy cointreau. have the last line. france and the world cup? >> sorry? manus: i was just going to say i was going to give you the last line on the world cup for france. >> sorry, yes. we are one of the very few favorites of the world cup which started with 4-1 in such a difference in goals, so this is very exciting. in paris, you could feel it in paris, you could feel it. we were all screaming. looking at the next step. the level of optimism has increased in the past two days for sure. also when we look at competition, when i may say so. manus: eric, thank you very much . we will dig into the eu nations. this is bloomberg. ♪

manus: it is daybreak europe. two the energy markets. we have been watching brent crude. traders assess the stalled eu talks on the price cap for russian oil. the latest roll of the dice. who is holding out? >> it's looking like poland is not terribly happy with the price cap level of $65 to $75. that is far above what was being discussed a few weeks or months ago of a $40 to $60 price cap. russian crude oil is being sold at the level of $65. if you put a cap at $65 to $75, there is no capital. you are able to sell market value, or should take small --

russia takes no major hit, and that is poland's problem. manus: how much russian barrels will go off the market if they lowered the cap? you look at the china story, are we building the narrative toward an additional cut when we go to vienna? >> there is a lot to balance in opec-plus. i don't envy the folks in saudi arabia and other countries because there are all these factors. russia could really reduce output 500,000 barrels a day or more depending on how harsh the cut could be. beyond that, you are looking at chinese demand is probably weaker. lockdowns are continuing, covid cases arising, china's government doesn't seem to be easing the zero covid policy. that means that for the world's biggest crude importer, you are not seeing the demand rebound that may be some of the traders were expecting by the end of the year and into next year.

because of that, the market might have more oil than they anticipated. it might mean that opec-plus might have to cut back. i don't know what opec-plus will do. there are conflicting reports. they are still in discussions. there is a lot to digest, as well as the recession. manus: well, hopefully we don't all stop next sunday for a game of football. that's all i'm praying for. it is cold in vienna this time of year. we have a new leader in malaysia. anwar abraham is the prime minister. the stock market absolutely loves it. you are looking at stocks in malaysia jumping by over 3%. that is the most in two years. the market is optimistic as you have the dollar down. bloomberg markets europe is up next. ♪

thank you very eu is considerinr than expected price cut, proof of a slowdown.

here we are, the latest on talks but they still cannot get an agreement. with this deliver to russian oil? >> when you look at what was discussed earlier, what really spooked the market and russia, oil right now around $65 a barrel. much higher than that 40-60. that kind of cap would have little to no impact on russia whether or not they want to retaliate. that is to be seen. the talks are ongoing. there were supposed to make a decision yesterday.

whole and did not want such a high cap. they want something that will actually have a bigger impact on moscow. meanwhile, greece is on the others. they do not want that impacted. the u.s., they are discussing this decision. they will have more talks today. they might come to an agreement. either way, there will likely be a little impact on russia. russia might not retaliate. manus: absolutely. i think those tweets make it

very clear and there is a lot of hope that it will have an impact on vladimir putin. thank you very much. stephen jasinski with the latest on the price cut. authorities in the u.s. investigate as the former ftx ceo is expected to make his first public appearance. joining us now is anna herrera. -- irrera. what were the red flags? anna: people were always wondering about its relationship with other countries. it was one of the biggest platforms out there.

a lot of people said there were red flags but it was very hard to get a glimpse of anything. people have been looking at bonds as a potential signed that things were not going well. it is a crypto crash and collapse. this is a pretty dramatic event in the market. it is a continuation about what has been going on in the spring. things were not going well before and now they are going even worse. it is surprising that prices kept up this much. they try to separate it. we will see what he says when he speaks next week. you mention authorities, there are a lot of investigations going on. it is definitely want to watch.

manus: there is a lot of hindsight trading. last year when people were gathering for thanksgiving, maybe not so many rolexes for thanksgiving this year. thank you, anna irrera with the very latest on ftx. coming up, we change the conversation to the binance ceo, cz. he speaks here on bloomberg. ♪

manus: this is "bloomberg daybreak: europe." i am manus in dubai. now, we have a special guest,

chief economic correspondent for southeast asia. >> i am pleased to say we are joined lucidly by the ceo of binance, ca. -- cz. good to have you with us. how much more contingent are we likely to see in the coming weeks, which -- contagion are we likely to see in the coming weeks, what are the dominoes? cz: there are institutions with money on a platform. i think there may be more than a couple others. each time, the effects become smaller. overall, the industry is fine. >> you tweeted then deleted a

tweet about liquidity issues and grayscale. is there reason to worry about that? cz: i don't think there is reason to worry about grayscale. i don't think i tweeted about that. one of the points says that grayscale has -- bitcoin. the other says that coin only has 600 k bitcoins. i just posted it is a question. of course, that caused a lot of misunderstandings in the committee so i deleted it this week. >> there are issues to deal with those companies, some say perhaps you tweeted because you wanted to build an empire to spread the fears and rumors. cz: i do not know if their issues with those other businesses.

unless we get very accurate financial statements, we do not know for sure. i'm not between that because we want to build an empire. i blame myself for tweeting that too late. as an industry, we let them get too big before we started questioning some of these things. we need to ask questions much earlier. we just want more transparency and scrutiny in the industry. having said that, coinbase has been operating for 10-12 years. i am sure they already have a lot of financials. we do not see that on the blockchain. for people in the industry, we like to see that in the blockchain. that is the most transparent way to display information. >> you have talked about

launching a crypto recovery fund. where are you on that? who is interested? we should have a block article going on today. do you make that on a loose fund or actual? i think we are looking at the approach of different industry players. i think the block is out today. we are structuring so it will be quite public. it is not just behind-the-scenes. i think that has been finalized. >> some say perhaps with entities, who else are you in

talks with? cz: we talked to a number of other industry players. none with abu dhabi. that bloomberg article was wrong. i was therefore three days. of course, we have the global market regulator. a bunch of other people. there are different reports about who i met and talked about. i do not want to disclose those but they are being reported inaccurately. >> ok, when might you launch this one? your end, 2023 -- year end, 2023? cz: the industry moves pretty fast. in a couple months the industry

will have probably largely recovered. we look at this on a day-to-day basis. we are going with a loose structure for industry players to help other people in need. >> are you setting aside money to buy some of these assets? give us a sense on how you are thinking about them. cz: we are thinking about setting aside $1 million. if that is not enough, we can allocate more. if that is too much -- if after six months, there are still funds, hopefully the industry would have recovered by then. we can still restore that back. that is how we are thinking about it. >> might you bid for ftx assets

and if so, what would look interesting for you? cz: we definitely want to look at those assets. originally, we want to engage directly with ftx. based on bloomberg reports, there are additional investigations going on. they invested a number of different projects. some of them are ok, some of them are bad. we will look through that when they become available. >> we know that you looked at the books of ftx, what did you see? was there a misuse of funds? cz: to be honest, very quickly, there were a lot of funds missing. double digit billings.

given the amount of customer funds they had, they must have moved customer funds. at that point, we think they are frogging law. when you are dealing with fraud, i could not trust any information available. i cannot trust any of the information. i do not believe it was accurate or precise. that made the process a lot more difficult. it was a very simple snapshot. >> you talked about genesis earlier. are they likely to file for bankruptcy and are you interested in bidding for their books? cz: i do not want to comment on

the specifics. we have nds in place with almost everyone in the business. there are liquidity issues. i believe our team is engaged with them. i do not know all the specific details. there are different numbers publicly and through direct private channels. the other tricky parts in the industry is that that number changes every minute with volatility and crypto prices. our teams are engaged. i am not sure to what extent we will be moving on two different things. i do not have all the details. >> there is a lack of trust and confidence in the crypto industry, can the industry survive in genesis? cz: the industry will survive,

there will be no issues. there are less than a couple billion dollars on the box. if genesis goes down they just need a small portion to be heard. this is the beauty of decentralized industries. when one player goes down, the others take over. entrepreneurs will imo them on top of that. the industry will be totally fine. >> we know that back in september, you lost your bid for simon friede and our wonder string -- wondering if you will make a bid for it now? there were issues about national security concerns to do with binance.

cz: we think those were rumors spread by ftx to push us out of the bed. there were never any concerns about binance in the bid. they required multiple countries and had no issues. binance is not a chinese company, we are not related to china at all. i have to repeat this many times because i look chinese. binance u.s. will make another bid now. we hope they follow through on their commitment. we will see how it plays out. >> crypto exchange is have been under a lot of pressure. when do you think finance will provide information at the same level as those listed entities? cz: there are a few different

ways to do it. binance already published our very comprehensive list. we thought it was very transparent and people can follow on the blockchain. we are also implementing more proof of reserve. it is a mathematical way and there is a total that matches. i think that is a much more technical, certain way to prove the funds are there. the publicly listed companies do not do this. they rely on third parties or another firm. very often, that number is eight denomination. there is actually a less transparent way to do that.

we have a technology that can do this much more transparently. i think the proof of reserve will be done in phases. >> we are running out of time. are you establishing a global hq and where might that be? cz: our largest offices are in dubai and paris. hq has different meanings for different people. registration in office, or people are, there are many. in paris, it is public. we have many others around the world as license entities. we tend not to do public story -- stores with addresses for security reasons. >> binance ceo, thank you for

joining us here. we appreciate your time. manus: a great conversation there. some really cracking lines coming through. the needs saving now. they will set up a fund. we will catch up with haslinda. go back and check out the conversation on tv . the main 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. and it's only available to comcast business internet customers.

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slowing it down. global equities had for the highest level in two months as but now the internet lags and it throws the whole thing off. the fed minutes highlight the fomc's downshifting plans. price pressures. you talks stall over the price cap for russian oil. energy ministers from the bloc meet today looking to bridge the differences over natural gas. we speak exclusively to the binance ceo. he says the industry is fine. >> we will see a little bit of when did you first discover this lag? contagion. there are many other people or institutions with money on the platform. manus: great conversation with haslinda. the industry needs saving now. $1 billion is what is going to be lobbied for to save the industry. i signed us up for t-mobile home internet. that crypto ftx implosion has

rattled the nerves of global investors in terms of contagion. it is not a bernie made off style loss, but it is a considerable creditor exposure out there. there was only one story that matters, when will the fed pivot? you now have the intonation about the substantial majority ugh! wanting to slow the pace of hiking. the terminal rate may be higher. will the fed pivot in june of next year? it is a little bit too rich for the standard chartered led -- blood. this is what the market, by the way, is projecting, not what standard chartered are saying. but, we found other interests. they say the chart is far too bullish on a pivot narrative. let me show you the implications from the fed.

50/50 probability. several see a higher terminal rate, but it did nothing to save the dollar. down by 0.25%. dollar against. i guess we have. the korean won. dachshund dollar against the korean won -- dollar against the korean won. let's reflect on the november minutes. they have been published. policymakers have made clear [both] finch! they have signaled their leaning toward a 50 basis point hike, following 475 basis point move -- four 75 basis point move. how dovish was it for you? good morning. >> good morning, nice to see you

again. start of a more different and dovish narrative from the fed. let's go! oh yeah! are we seeing a slowdown in the rate cuts and are we seeing that path downward toward rate cuts coming through? yes, we are on that journey. i think we will look back at this is the peak of it. the fed has to be wary about the lags in its own data set. i think that the narrative you it's not the same. heard yesterday reflects that. manus: yes, the narrative is there. i'm curious to see what your read is on recession. bloomberg's is 100% probability of a recession. i'm drawn to what mohamed el-erian had to say, that we are on the cost of much more -- cusp

what could you do to solve the problem? of something much more substantive. the world is not just teetering on the brink of another recession, it is in the midst of a pronounced -- profound economic and financial shift. this is a very aggressive view of the world. teetering on the brink of a profound economic and financial shift. how do you prefer profundity? we could get xfinity? >> i think the one thing he said in the article that rings true is that we have gone from a demand paradigm to a supply-side crunch that is unlikely to abate. that remains true. if we don't have enough supply, where and when do we equalize? that's actually super adult of you to suggest. i think we are yet to see the other two parts of his argument in that direction, which are

credit risk and liquidity risk. we haven't seen that come through yet. as the cycle continues and if the fed does not slow down its hikes, you will see the impact go through into credit and systemic liquidity risks. so far, that exogenous shock has i can't wait to squad up. not stirred the market in a big way. the probability is not high today. exogenous shocks can come out of anywhere. that is why they are tail risks. while i one out of three legs of his argument, i'm struggling to see the other two. we may look back and say he was right, he's incredible at what he does, today markets will tell you that there is still enough i love it when you talk nerdy to me. liquidity in the system to continue that markets will come back in a big way once the bottom is reached. the question is where and when is the bottom in a these -- in equities and risk assets in general?

that's the big question. when does the earnings recession begin? i think we are starting to see guy, guys, guys, we're still in session. that come q1 in white. -- onwards. manus: looking at a chart on the s&p 500. we have bounced from 3500 in the middle of october to 4000. we have been on 500 points. these are bear market rallies, but the markets are not quite pricing in an earnings hunger, are they? and i don't know what the heck you're talking about. >> that's right and we are going to see 2023 be the inverse of 2022. we had inflation bad news and eps resilience. 2023 will be the inverse of that. better inflation data. but we will see the eps come down quite a bit.