anna: good morning and welcome to "bloomberg markets." i am anna edwards. federal reserve minutes show most policymakers want to slow the pace of interest rate hikes. eu members could be headed for a fight over how to curb rising

natural gas prices. energy ministers are debating that and to the cap un-russian oil today in brussels. -- on russian oil today in brussels. meanwhile, finance talks about bloomberg about its plans to buy distressed digital assets. welcome to "bloomberg markets." it is a special edition because it is thanksgiving. markets are not trading in the u.s. today, but we are two hours into the european equities session. european stocks are up post fed. s&p futures, no cash trade in the u.s. today, but s&p futures still suggesting that after closing at a two month high yesterday on wall street, we can see further upside one we see the markets reopen. crude prices on the top of mind in europe. natural gas prices are down a

little this morning. we certainly are focused on natural gas prices. where will that you decide to cap these? there have been a lot of proposals and brent crude is also in focus as the eu tries to put a cap on the russian exported version. we will get into the details of what this means for our energy prices. eu energy ministers are meeting today is in brussels to discuss the european commission's plans for oil and gas caps. the block is more divided on the gas price cap. >> they gave us clear instructions and we have to take care of possible risks and we have done so. of course, some risks do remain, but this proposal has been designed in the way that if there is another time period

that faces us, but at the same time, it will not be triggering the intervention for the market unless it is really necessary. anna: the gas plan being talked about their has faced a lot of pushback over those who suggested that the conditions dashed -- conditions attached to it would not have been stringent if it was adopted by eu leaders and that means it would not apply with these conditions back in august of this year. let's get into that conversation now. we are joined by maria tadeo. this gas price cap being criticized on many fronts. what are the issues? maria: on many fronts, and this is going to be a heated debate between european energy ministers and it is a very technical issue, but if you break it down in simple terms,

we have are two camps that see things differently. there are a number of countries that push and wants to see a price cap. they have been pushing for weeks now and they say the proposal let has been tabled by the commission, 270 euros per megawatt hours means of this price cap will never be triggered. defective, it is not a price cap. on the flipside, you have countries like germany but also the dutch which suggest in a fierce global markets for energy where you artificially change prices, you could run into supply issues. for them, the idea of a price cap is fundamentally flawed. the two sides are very far apart and their arguments, and if you ask me do we get a compromised solution today at this point, to meet i do not have a crystal ball but i think it is unlikely. anna: they conceptually disagree

about whether you need it. moving on from gas, there is also a conversation about oil to be had. a significant but separate market intervention taking place around the oil markets and trying to put an oil price cap on russian crude in particular. are we more likely to get a deal on that at the eu level? maria: yes, and it is a good point to make because there are two separate debates going on. they run in parallel but they are very different in nature. you have the gas but also oil cap on russian oil. what we're hearing is that european officials will meet late today around 7:00 p.m. local time and we will try to it to an agreement on the price point. the sticking issue is the level. we have talked about $65 a barrel, but for some of the more hawkish countries on russia like the polls but also the baltics, they believe that $65 a barrel

is way too generous on vladimir putin. the goal is that he will not have the revenue to continue the war in ukraine but we have seen that the fight continues. this meeting is going to happen late afternoon in brussels. what we understand is that a deal is within reach and could come today. anna: thank you for the update. bloomberg's maria tadeo with the latest on gas talks in brussels. for more on the energy markets, let's bring into the conversation keshav lohiya, the ceo of oilytics. very nice to speak to you. thank you for joining us today. there is a lot going on in the energy markets right now. let's start with what you and the g7 are proposing -- what the eu and the g7 are proposing. when we got those announcements yesterday, that idea being

suggested, we saw brent prices fall off. is that because there is an assumption that if the price is set there, it is different from where we are right now, so it will not push up the demand for other alternatives? is that the mechanics? keshav: yes, a lot of confusion on the headlines right now. take a step back from the price cap. you cannot put a static price on a volatile oil market. the cap might meet larger than the current oil price, but the index could be lower. a static price does not work and that is why even if you step back from the price that russia has sent, they will not sell the oil to anyone who agrees to this price cap. we are slowly moving on to taking time where the fifth of december is two weeks away and this price cap is being determined by government officials but it has no reality on how the oil markets actually work. anna: i thought europe did not

want to buy russian crude anyways, they just wanted to apply this cap to it so the other situate -- the other subsidiary industries and continue to ship these products if the level above the cap has not been paid. keshav: the objective of the west is that they are trying to have the best of both worlds, but in reality, if they really want this to work, if you depress russian oil to complete zero, or you just let russian oil flow. what is happening in reality, if you try to impose the price caps, the countries who could buy oil, they have not agreed to the price cap. basically outside of the g7. but there is still a lot of uncertainty around. we do not know how the services, the shipping would react to this because no one has an idea. anna: i suppose non-g7 countries, if the g7 applied to this cap and said that we will

not assure anything if you pay more for this, than india and other countries will have good bargaining because they are in a position to say there is not so much demand for your product anymore so we will not pay you so much. even if they do not sign up to the cap, that could be how it influences pricing. keshav: that is a big if but there are other bearish factors out there. we have short-term bearish sentiment right now but a long-term bullish structural market right now. russia making headlines but there is china which is moving the markets a lot more to the downside given all of this supply outage right now. just to go back to your shipping point, even if there is some kind of a deal, how you implement it is still triply -- tricky. there are not enough tinkers up there to move russian oil if you do not have the right insurance to move it from russia to other parts of the world. slowly, russian supply will --

the exports will trickle down. anna: that could put upwards pressure on prices. we have the china story and is that adding downward pressure to prices? every time we see concerns around the covid conditions, the amount of time it will take to get out of lockdowns in china, that seems to put a damper on prices. keshav: three weeks ago, russia and china were the most bullish factors for the markets and that has completely changed. no one can guess whether china will reopen, and any reopening hints at washed away. now the cases are exploding. a hard lockdown is inevitable, but it is a guessing game on when china will back down. this deadline has been pushed further away. anna: on the gas price, let's think about what is happening with gas as well. our correspondent in brussels sounded less optimistic that any

deal could be reached as there are still fundamental differences of opinion to whether it is sensible to putter a cap on this product. keshav: and what we have seen from the markets, this kind of cap is so high that the duration, it has to be for two weeks. even if you go to the history of the tdf prices this year, the most extreme spikes, it did not reach that level. the only way a cast -- a gas cap woodwork is that he said it so high that it will never be hit. the markets were initially 65 or 70, but in order to have everyone on board in europe, you have to make it a bit loose. anna: what also matters for the gas market is the weather and the winter and what are the long forecasts telling us about where that is headed? keshav: in europe, we have been lucky with a mild winter, but eventually a cold winter will come in. you can have depressed spot prices, but we are having structurally higher prices.

lng markets have been resilient but structurally higher, and europe will have to bid with the rest of the world to get its energy stability. anna: we saw qatar signing a deal with china. thank you for joining us and good to be in the space. keshav lohiya of oilytics with the oil sector and gas prices. keeping you up-to-date with news around the world, let's get a broader first word news update. let's get with angel feliciano. angel: most federal reserve officials now seek to slow the pace of interest rate hikes. that according to the latest minutes of the recent meeting of policymakers. it is a signal they are leaning towards a downshift of 50 basis point hikes in december. talks of a price cap on russian oil are bogged down. a cap of $65 a barrel. poland and the baltics nations believe that is generous to moscow.

greece and other countries with big shipping industries do not want to go below $70. in ukraine, a barrage of russian missiles has knocked out power for millions. ukraine president volodymyr zelenskyy called to the missile assault a clear crime against humanity. in the u.k., the chancellor of the exchequer jeremy hunt once the treasury to assess the benefits of taxing wealthy foreigners with so-called non-do m status. that is if their permanent home is outside the country to avoid paying u.k. taxes on overseas earnings. hunt wants to make sure that any move to tax non-doms does not lead to them leaving the u.k. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am injure feliciano -- i am angel to louisiana. this is bloomberg. anna: we talked a lot about the

u.k. opposition as of late. coming up, we are back to the story. remy cointreau may raise their prices further. we get a conversation with their ceo next. this is bloomberg. ♪ yroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes. go to getrefunds.com to get started. powered by innovation refunds.

anna: this is "bloomberg markets ." the french cognac maker remy cointreau expects post-pandemic growth, but they are keeping a close eye on potential pressures. the ceo spoke with manus cranny from paris. >> the growth will definitely and hopefully come from china.

on our side, this is the way i look at it. we are speaking from the short-term. we hear about measures that are being taken this week, which are not going to help in the very short-term, but if you look at china, the prospects are very positive. things are easier than they have been in the past. 1.5% of the total spirits consumed in china, and every time the rules against covid eased, we see consumption back and we see strong appetite for our products. a strong example from the 1990's, we had the most prestigious luxury morning in shanghai. record traffic was huge. we gathered something like 600 vip's, which was truly amazing. now shanghai is looking down again. with that we have to be flexible.

manus: you have these monster moments, i suppose, when you get the reopening. hennessey, they are running out of champagne. have you got enough stock? are you carrying extra stock? are you ramping up preparedness for the reopening? >> we are ramping up for sure and preparing for the reopening. again adapting to the environment. last year, we had only one warehouse in china which was based in shanghai and shanghai was down. we now have three, so we are preparing this as well from a logistic standpoint. on the liquid front, we have been running out of stuff for the past two years. in the u.s., we are blooming significantly. our stock is very low in china. but they are now improving in the u.s.

clearly you see -- manus: sorry, please. i suppose the natural -- two that is, it is a beautiful premier product. it is ready moderately -- already moderately expensive to have. what is tolerable for your average client? are you going to raise your prices 5% or 10%? give us an indication. >> between 5% and 10% is a good benchmark. prices, current inflation is creating a positive context when it comes to managing prices. if you drive your price, depending on inflation, it decreases your problem. for us, pricing is driven by pricing power, which comes from

the quality of the product, the desirability of the brand, the experience you can deliver to your clients. anna: the ceo of remy cointreau speaking to manus cranny on bloomberg tv. let's move from the micro to the macro. most federal reserve officials now seek to slow the pace of interest rate hikes. this according to the latest minutes of the meeting of policymakers. they might be shifting to 50 basis points rather than sticking to the 75 basis points we have seen as of late. our bloomberg equities editor is here with us. the fed seems like there are doves in charge. there are more dovish voices in the fed and some had anticipated and that is being seen as positive for stocks. >> and we saw that positive reaction on wall street last night. the only concern here is that equities have rallied a bit from their september lows already, so

the s&p is up about 10% and we have seen a recovery in the dow jones, almost reaching bull market levels, so how much further can the rally go? perhaps investors have already priced in this sort of dovish pivot from the federal reserve on the back of this inflation on the back of robust earnings, so we will see how much longer the rally can last. anna: the market has been fixated on this idea of front running the pivot, trying to get ahead of the pivot narrative. as such, we are already at two month highs for the markets. where does that leave the earnings story? tech stocks were at the epicenter selling heavily because they do not necessarily make the profit of other sectors. >> tech is the biggest question for next year because tech is a huge sector for the s&p 500 because of its readings. looking back a month ago, analysts were forecasting profit recovery for big tech next year,

which would bode well for the nasdaq and the s&p 500. they are seeing a contraction here, which is a source of concern for the overall s&p 500 futures because if tech earnings do contract next year and we have seen strong warnings from major sellers like apple and google and growth is slowing down, chipmakers are concerned about the supply issues and in general, there are plenty of headwinds going into next year and they could really weigh on the entire u.s. stock market even if other sectors do good in terms of profit growth. anna: thank you. bloomberg's ksenia galouchko joining us to talk about equities. for more market analysis, check out mliv on your bloomberg terminal. it is thanksgiving in the u.s. or on the markets shortly -- more on the markets shortly. this is bloomberg. ♪

anna: this is "bloomberg markets ." i am anna edwards for this special edition of bloomberg. let's get the latest on the business stories we're covering this hour. here is angel's luciano. angel: foxconn has taken steps to limit the chaos at its foxconn factory in china. it is intended to appease

disgruntled workers in a violent protest that rocked the world's largest iphone factory. in has set a sales record -- nintendo has set a sales record. it maintains momentum for its software and hardware sales. that is your bloomberg business flash. anna: we will get into conversation about european equity strategy next. this is bloomberg. ♪ ked! happy holidays from lexus. ♪

anna: this is "bloomberg markets ." let's get a quick check of the markets for you. no trading over in the u.s. in terms of cash equities or treasury markets because it is thanksgiving. this is what the european picture looks like right now. u.s. futures point a little higher, all of this post fed. the energy markets firmly in focus as european investors are still trying to nail down

details around natural gas caps, i cap on russian crude. that is in conjunction with the g7. that is the story around equity markets and commodities. let's show you what is happening with fx markets as well. the dollar is on the back foot which goes hand in hand with the risk on moves we are seeing in equity markets post the fed minutes. they gann is gaining on the move lowered in the dollar is helping, but also the fact that energy has become cheaper. -- the yen is gaining on the move lower in the dollar that is also helping, but also the fact that energy has become cheaper. and bitcoin also in focus today. we have an exclusive conversation with cz from binance paid we will get his views on the contagion in the sector and has bailout fund on crypto. let's get back to the equity markets.

joining us now is beata manthey, global equity strategist at citi. it seems there were more dovish voices at the fed that -- then the markets had anticipated. is this strengthen equities justified? beata: the markets want to see the dovish story of the fed, but we agree there are two stories. there is a positive story that at the next meeting we are going to get 50 basis point hike, not 75 as was previously expected by the markets. but we might see a higher terminal rates. we are now forecasting 5.25, 5.5 terminal rate out of the fed, so that is higher than what the market has been expecting and pricing in a few weeks ago. anna: sorry, i was going to say,

what does that do if rates are going to keep doing higher? what does that do to stocks? beata: i don't think that the fed is as important as it was before. the most important story right now is watch the earnings are going to do and how deep the recession is going to be. of course, these two are interrelated. in terms of the market level, we have had a nice run. my target is only 80% upside by the end of next year, so over the next 14 months, really changing the markets from these levels, i would need to see 20% upside. we do not have that anymore. anna: if you can see 8% upside, how do we get to 8% upside by the end of next year? if we see an earnings recession ahead? give us your thoughts on how that earnings recession might

play out in stocks performance. beata: the bad story is we are going to have an earnings recession. it is inevitable. we have around 10% contraction, so it is a milder level of recession. we have risks to our forecast. the good news is that probably around 10% or 15% in contractions is already priced in by the european equity markets right now. what that means for the prices going forward, markets are not going to go straight up in a straight line. we think the volatility is going to continue so we are going to be selling the rallies and buying into the dips for some time longer until the markets finally see the good news ahead and it is going to be properly fined to the bottom. anna: and where do you see this most priced in if you look at the sector breakdown?

is it where a lot of the worry has focused around, energy, metals, mining, chemicals? beata: for the markets, 15% contraction is priced into the price. that is what happened in 2011 in the european sovereign crisis, so this level of european recession has happened in the past. but it is a different picture when we dive into the sectors. we find that these deep cyclical sectors like metals and mining, energy or autos are already pricing in a much steeper recession. for mining, 50% is the contraction into next year. of course, key stories, it could get worse as it is a cyclical sector, but 15% is already a meaningful number already in the price and in the valuations of the sector. while on the contrary, when i look at the more expensive cyclical sectors or growth

demands like industrials, they are pricing in very little contraction into the next year. they have derated a lot this year, however the valuations are still relatively high. i do not think our discounting -- think they are discounting a meaningful downturn. anna: with all of that in mind, thinking about some of the mining exposure in london, how do you view about what is coming out of china? there was expectation a few weeks ago that we see an end to the zero covered policy. -- zero covid policy. it is now clear that will take longer than some had anticipated initially. what are your expectations for china in the year ahead? beata: our view is that the reopening story will take longer. it was never going to reopen straightaway.

we need to learn to be a bit more patient there. but what it means for the metals and mining longer-term, we should be bullish, but in the short term, when i look at the forecast from her commodities strategists, they are marginally more bullish into the 12 or 24 months prices. anna: thank you for joining us. beata manthey of citi joining us in this special edition of "bloomberg markets." talk about what is going on in fx markets and this story is proving popular on the bloomberg terminal. billion air bill ackman is betting against the hong kong dollar. sophia e costa joins us to talk through this. ill ackman is in the spotlight and it is the dollar peg in the spotlight. how is bill positioning around this and we will come to the fundamentals around why?

he is short on the hong kong dollar. >> he said on his twitter he announced that he is -- he has a large position on the hong kong dollar post. that essentially means he is parish on the hong kong dollar versus the u.s. dollar. we do not know the size of this wager. he says it is large and i tried to look for evidence of large bets in the fx market. terminal does have this kind of data and there is not really evidence that this is happening because the hong kong dollar has actually been strengthening. this is a strange time to be announcing this kind of trade. the options market is positioning for a recovery, a rebound in the peg. i know the hong kong dollar is a pegged currency, but it is exciting to us. the peg has been in focus for years and years.

we have had george soros betting against this after the asian financial crisis and none of them have succeeded. the defective central bank has repeatedly said that the peg is here to say -- the de facto central bank has repeatedly said that the peg is here to stay. anna: and we have repeatedly said that the dollar has been pegged and the authorities have been forced to defend it, but we see movement away from that peg. what is the case that bill ackman is making? he cited one of our bloomberg economists as to the reason why the hong kong dollar could be under pressure. >> and this is a long-term trade. he says the peg no longer makes sense for hong kong because hong kong is a chinese city. it has an enormous exposure to the chinese economy, but it depends on u.s. monetary policy and it has to follow u.s.

monetary policy. that has been interesting dynamic this year because we have the chinese economy weakening and the fed hiking rates at an incredibly fast pace, which puts hong kong in a difficult position and we are seeing the impact on the economy. the gdp sector contracted more than 4% this year. but hong kong has shown is in the past repeatedly that it can stomach a lot of economic pain to maintain the fight because the key thing is financial stability. hong kong has a reputation and wants to maintain the reputation of a stable financial and global financial hub. the peg is almost a representation of that. anna: thank you for the update. bloomberg's sofia horta e costa with the latest on the bill ackman view. keeping you up-to-date with news around the world, let's get a first word news update. angel: in china, daily covid infections have is into a record

type in the country reported almost 30,000 new infections on wednesday. the recent surge comes at a critical moment for leaders. they have to decide whether they tolerate some spread of the virus or restrict back to some covid zero restrictions. most federal reserve officials now seek to slow the pace of interest rate hikes. that according to the latest minutes of the recent meeting of policymakers. it is a signal they are leaning toward downshifting to a 50 basis point rate hike in december. in colorado, the suspect of killing five people at a gay nightclub will be held without bail. anderson aldrich made an initial court appearance on wednesday. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am angel feliciano. this is bloomberg. anna: thank you. part of our exclusive interview

with the binance ceo after the downfall of sam bankman-fried's ftx is coming up next. this is bloomberg. ♪ this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture. this is what it's like to have a comprehensive wealth plan with tax-smart investing strategies designed to help you keep more of what you earn. and set aside more for things like healthcare,

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anna: this is "bloomberg markets ." i am anna edwards in london. it is thanksgiving so no cash trading in the united states today. binance ceo changpeng zhao has told bloomberg that the company is aiming for a $1 billion fund for the potential purchase of distressed assets in the digital asset sector. cz spoke exclusively to bloomberg's haslinda amin about the fallout of rival ftx. >> i see a little bit of

contagion. when a trading platform goes down, there are other people or institutions with money on the platform. we have seen genesis with the loss. they will move to a couple more others, but in time, there are's cascading effects and the effects become smaller. overall, the industry is fine, but there will be some problems. haslinda: you tweeted then deleted a tweet suggesting perhaps that liquidity issues and the likes of coinbase as well as grayscale, is there a reason to worry about that? >> i do not think i tweeted about grayscale and i did not say that there were liquidity issues at coinbase. i was just referring to two articles. one said that coinbase says grayscale has 635 kate bitcoins with them. the other article says that

there are only 635 bitcoins on the exchange. i just posed this as a question. but this caused a lot of misunderstandings among communities so i deleted the tweet. haslinda: are there solvency issues to do with those companies? some say that you tweeted because you want to build your own empire to spread the rumors. >> i do not know if there are issues with those other businesses. the thing with other businesses is that unless we get very accurate financial statements, we will not on fresher. -- we will not know for sure. i reflect on the ftx situation and i kind of blame myself for tweeting that too late. as an industry, we let ftx get too big before we started questioning some of those things. i am taking the approach where we question much earlier.

it does not mean any impacts on our big industry peers. we just want more scrutiny into the industry. having said that, coinbase has been operating for 10 or 12 years. they are listed companies in the u.s. they already have financials. we just do not see that on the blockchain. for people in the industry, we like to see data on the blockchain, which is the most transparent way to display information. haslinda: you talked about launching a crypto recovery fund. where are you on that? who is interested? >> we should have a broader market going at today. there have been other forces on how to structure that. do we make it a loose fund or an actual fund fund? we have agreed on a looser approach where industry players will contribute as they wish. i think a block post will be out today. we are structuring so that it

will be quite public. whoever contributes to the bitcoin public address so that people can look at it, so it is not just a behind-the-scenes fund. that is being finalized now and that will be seen. anna: that was the binance ceo speaking exclusively with bloomberg. joining us now is emily nicole. let's talk about what we heard at the end of that conversation, which is this fund that binance wants to set up to buy up distressed crypto assets. he has been in dubai talking to various parties about that and raising some money. what more do we know? emily: he did say that he was in dubai and lead to talk about assets but we do know he has been talking to industry players around the world for this fund and there has been several big suitors from that.

he even told bloomberg that he had four or five funds already interested in that. many industry players are contributing to what he calls a loose fund so it will not be a typical structure fund or some kind of conglomerate consortium, but somewhere that players can put money in and if they do not spend it all, withdraw it back again. anna: we will watch as that develops. what about the consolidation of the sector or buying up businesses that have not been doing? too well? does it look like binance will end up buying some of the other struggling businesses in crypto? emily: that seems to be the intention, buying up large stakes. we are not sure exactly what they plan to do, but that has always been the motto of binance to benefit the exchange and also the wider industry by having long capsized players behind them. the concern is that binance is the largest exchange we have in

crypto so more players and assets that it accumulates, the bigger it gets. as crypto becomes a more regulated industry, who knows what regulators will have to say about that? anna: it is interesting how cz wanted to blame himself on not speaking up about ftx earlier, but should it be up to the sectors itself or should it be in other lines of finance be up to the regulators to do that? emily: it seems to be the sentiment within crypto that they feel they should police themselves. the regulators are still getting their feet there but also because there is a distrust of government entities and interference in that way. decentralization is one of the biggest parts of the crypto et hos, so to police themselves is what they plan to do. cz has talked about being more active on twitter. in some ways, that is him doing his part to do more in terms of

bringing out all sides of the crypto and bringing it into the light. we will see how effective that is. anna: and opportunities in the demise of others. perhaps they want to avoid that situation. bloomberg's emily nicole with the latest on the crypto space. tune into bloomberg crypto. our weekly show covers the stories covering the world of decentralized finance. this is bloomberg. ♪

anna: this is "bloomberg markets ." the fallout from brazil's presidential election is being felt at the world cup. while the nation's favored to win the tournament, fans are divided about the iconic yellow jersey. where sports meets politics, there is plenty to talk about right now. let's start with brazil, and this is the fans being uninsured -- unsure about whether to where the famous red and green.

>> this is because bolsonaro number which is a symbol -- this is because bolsonaro, this is a symbol of him self wearing this. bolsonaro is using it as his way of relating to the people and now we have seen a backlash of voters that do not want to associate with him. so they are starting to wear the blue shirt instead. anna: questions if the players on the pitch will still be wearing the uniform as instructed, but geopolitics are never far from this event. certainly many geopolitics to talk about and some of it playing out on the pitch paid i'm talking about the iranian team who did not want to sing the national anthem because of associations with the current regime. >> we have seen a lot of politics given where it is being hosted and it has always been a controversial tournament with

the lb g right and the irani and national anthem. a shocking moment in terms of resonating with a lot of people, a very powerful moment. we could see more of that going through as the tournament progresses. anna: yes, the lgbt armbands not being worn. let me ask you about the action on the pitch as well. some of the big teams struggling against countries that the football fans have not expected them to struggle against. joe: the big one was japan beating germany, which was huge. not sure how you say it is coming home in japanese, but there is traffic around that. a couple of big teams have done well, spain yesterday winning against costa rica, a massive win, but today we have got brazil and portugal as well. a couple of big teams that are renowned and with all of the

controversy of the past few weeks, there will be playing today. anna: interesting, the national side away from the politics. joe easton joining us with the latest on football and where it meets politics. coming up in the next hour, ksenia galouchko --sebastien galy joins us on where he is in risk appetite. this is bloomberg. ♪

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>> good morning. i am anna edwards, live from london. federal reserve minutes show most policymakers want to show the pace of -- slow the pace of interest rate hikes. eu members could be heading for a fight over how to curb rising

gas prices. energy ministers are debating that at a cap on russian oil today in brussels. u.s. lawmakers demand that ftx executives be held accountable for the company collapse. by next talks exclusively to bloomberg for its plan for a $1 billion fund by distressed assets. in morning everybody and welcome back to this special edition of "bloomberg markets." happy thanksgiving if you are celebrating. u.s. equity markets are not open, so european markets are the focus for the summer. s&p futures not telling us what's happening later today, but perhaps what lies ahead. up 04 employee percent -- up 0.4%. positive move for risk markets -- risk assets at least. brent prices moving lower, but that may be with what's happening in brussels.

let me get to some fx news. as we go to the fx board, you can see we have the dollar losing some ground in keeping with this risk off mood. some news coming through from turkey, it cuts its one week repo rate to 9%. that was not entirely in line with estimates. even by elevated standards, running at elevated levels in turkey. the u.s. dollar hong kong dollar . bitcoin is back in focus. back to corporate earnings. return to normal consumption after exceptional post-pandemic growth or to however, they are keeping a close eye on potential pressures. >> the growth we learned definitely and hopefully come

from china from the outside. obviously, i am not speaking for the very short term. we hear about measures being taken this week which are not going to help in the very short-term. but if you look at china, the prospects are very positive. it is easier than it has been in the past. it counts for only 1.5% of the total spirits consumed in china. every time the rules against covid ease, we see more for our products. we had the most prestigious lecture in shanghai last weekend and we hit record sales. traffic was absolutely huge. we gathered something like 600 vips in our boutique, which was amazing. now, china is looking down again. we have to be flexible. >> you have these monster

moments when you get the reopening. i had hennessy. they are running champagne. have you got enough stock, are you fully stocked, carrying extra stock, ramping up preparedness for the reopening? remy: we are ramping up for sure and preparing for the reopening. we are adapting to the environment. we were hit in may of last year because we had only one house in china. shanghai was let down. now, we have three. we are preparing this way as well. on the liquid front, we have been running out of stock for the past two years, as the u.s. was booming dramatically. we are now in the process of covering a good level of stock, even though they are still low in china, for instance. we are improving in the u.s. [crosstalking]

eric: sorry, please. >> but i suppose the natural response to that is that it is a you do for 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%? just give us an indication. eric: 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, for us, 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 your clients. anna: ceo of mequon true speaking earlier about his business. and the opportunities. let's get back to the broader equity market story. most federal reserve officials seek to slow the pace of interest rate hikes. that's according to the minutes of the latest meeting. it's a signal that they are leading down toward a 50 point basis hike in december. markets clearly want to hear this message, don't they? it seems the doves had quite a strong voice and that is a message the markets wanted to hear. equity markets rallied to two-month highs. does that seem like a sustainable position? >> that's a good question going forward. we saw a break from september los.

this recovery has been quite strong on the slower inflation data, on potential fed data. but we have been burned before. we remember it ended in two years, unfortunately, for a lot of stock market participants, so it may not last. the may concern right now is going into next year. the likes of morgan stanley's michael wilson going more bearish might say that yes, we might see a rally of the end of this year. at the first quarter, we might see new lows. mike wilson is forecasting at a 20. -- a 24% drop from current levels. anna: that some of the downside he sees. i talked to someone previously about what she sees for corporate. she was talking about how some of the deep cyclicals have already priced in a really severe eps recession, whereas

others, industrials amongst them, still might look a little bit expensive. i suppose there is that disconnect within europe. ksenia: absolutely, yes. some have done better than others. energy and minors have done better this year. there are more and more forecasts that energy eps will see a major contraction next year. the other sector to look at is banks, because they obviously benefit from higher rates and continue to be quite cheap rate down about 4% this year. another group of sectors to look at are the ones that benefit the most from china reopening, luxury stocks, industrials. one of the reasons the dax in germany has rallied so much is this optimism over china reopening, the economic boom it brings with it. let's see where it goes. it all really hinges on whether china is actually going to lift restrictions or not. anna: that's interesting, because we used to look at germany and the industrial trade

links, and that was the outlet for what was going on in china into europe. now, it seems paris. whenever we see china headlines, we see luxury names in paris moving significantly. ksenia: that's because it some of the biggest stocks. of course, we look at other stocks that have done pretty well, have held up despite the recession's this year. it is mainly because the luxury consumer is pretty strong and americans and asians are starting to go to shopping. stronger dollar is helping both sales. if china does reopen, this will be a huge boom. anna: we just heard from the remi calm stroke -- construct ceo. loosing the epicenter of market selling with tears. what is expectation for tech going into next year? ksenia: that's interesting.

last month, they were expecting tech earnings to rebound next year because of the strong drop in the nasdaq. but in the past month, analysts have generally paired those expectations quite severely. they are expecting another year of contraction, which is a downturn and outlook. big tech is likely to continue suffering next year, probably until the first half of the year, when most expect it to beat it on the interest rates. anna: last hour, we were talking about how the fed has been a crucial case to look for stock market, but recession fears is going to be the thing that drives. interesting to note, putting out a note today on the bank of america, private clients are slow -- are flocking to bonds.

i suppose it is that trade-off. what kind of haven will bond market speed during a recession? ksenia: we have seen very strong inflows into bond buying, which is something you never would've seen over the past two years. now, investors are really turning toward a fixed income and bank of america is saying their private clients are really shifting toward bonds. equity funds have been seeing about nine weeks of outflow. we are seeing those expectations of recession, of earnings contraction. they are spooking investors into going into that saver haven. if america says this is the first half of next year. but starting from the second half, they expect equities to recover as the cheaper asset class, as the fed potentially pivots. earnings potentially recover, so they can go back to being a popular instrument in the second half. anna: you mention? we outflows, it is interesting given we have

seen strength in equity markets over the latter part. does that tell us a lot of people missed out on this equity market strength? ksenia: absolutely. there comparing neutral funds and etf's. etf's move with the market and mutual funds are more conservative. that is where most outflows have been going. but in general, these fund flows will be very interesting. your to date, equities are still in the plus. they are still positive in terms of influence. but the position is quite conservative. they have seen a huge selloff, one of the worst years and decades for stock market returns. that is why any sign of a pivot from the fed, any positive comments, any devilish comments, they trigger these big rallies we have seen since the end of september. anna: thank you for joining us. ksenia galouchko joining us there. up to news from around the world.

a first word news update. here is laura wright. >> most federal reserve officials seek to slow the pace of interest rate hikes. that according to the latest minutes of the recent meeting of policymakers. it is a signal they are leaning toward downshifting to a 50 basis point hike in december. talks between european union nations on a potential price cut for russian oil have bogged down. bloomberg has learned that the eu's executive once a cap of $65 per barrel. poland and baltic nations belief that is too generous to moscow. greece and other countries with big shipping industries don't want to go below $70 per barrel. in ukraine, a barrage of russian missiles has knocked out power for millions. the attack came at a time when temperatures are below freezing. in a virtual appearance before the un security council, ukraine's president because the missile assault a clear crime against humanity. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700

journalists and analysts in over 120 countries. i am laura wright. this is bloomberg. anna: coming up next on the program, the ceo of nl, as he navigates the energy crisis. we will get what's going on with this energy giant. more on that next. this is bloomberg. ♪

anna: welcome back. the italian energy company enel says there is very little execution risk on its disposal's plan, which was unveiled earlier this week. it is seeking to offload 21 billion euros of assets to reduce its record debt pal. the ceo spoke earlier on bloomberg. >> they are actually more than

willing. that is one of the reasons we were willing to put the assets on sale. we think there is a good moment for gas assets, for example. this is a new decision we took in light of what gas value is today. we just heard shortly before this interview that there was an underlying importance in that. we are going to focus our presence in all the countries we can have an integrated play, which means help our customers go through this journey the best way possible. some geographies that don't fit within this are going to be sold , and are quite hot at the moment. we see very little risk on the execution side. we have several that have already been executed. >> good morning. the rationale is to be able to

better service your clients and the limited number of countries that you will be more present in? francesco: exactly. we have six core camps, as we have decided to call them, which are spain, usa, brazil, colombia. they are committed to decarbonizing their economy. i think that's where most of our technology and know-how lies. that is where we want to focus our efforts. elsewhere, we are going to streamline operations in order to really concentrate on where our skills are best put to work. >> i know there's a big focus for you and the team in the u.s. have one the license to provide renewable energy to businesses.

obviously, the inflation reduction act is a big part of that. deal till -- detail for us your ambitions. you have that license. what is your goal for yourself and enel in the u.s.? francesco: now, with the ira, we have a much more stable 10 years , which you can plan your efforts. part of that is that we want to couple a very strong growth on the generation side with renewables, roughly 1.5 to 2000 megawatts in the next few years, as we have been doing so far. with growth on the business customer base we see that is starting from texas license and we want to really start becoming a leader on the business side. i think that's a very promising growth area for the u.s. not a regulated business, but a

customer business, coupled with our generation. on top of that, don't forget we are the second largest or even first largest operator on response. we have a big presence in that very interesting market. anna: that was enel ceo talking to my colleagues. eu energy ministers are meeting today and brussels to discuss plans for oil and gas caps. an oil cap deal could be agreed today. but it is more divided on the price cap gap. we have been speaking with policymakers. >> it could be good to have a gas price cup -- cap. it doesn't satisfy any single country. it is kind of a joke for us. after summoning months of discussions and proposals. >> the proposal on the table now is flawed. there is a lot of risk for damaging the energy security

supply and also for the stability of the financial market. >> the european council give us clear instructions that we have to take care of possible risks, and we have done so. of course, some risks do remain, but this proposal has been designed in a way that helps us if they release another time like they did in august. we don't want to triggering intervention from the market unless it is really necessary. anna: some of the voices gathered there and brussels talking about the gas price cap. it has faced some pushback. we heard in those clips that have been gathering for us some of the pushback that you have been gathering. and we heard from the architect of the gas plane, so where does this go next on the gas story?

maria: you heard they are a joke, not serious, not a good proposal, a mockery, flawed. that is the kind of language we have heard repeatedly this morning when it comes to that proposal from the commission to have a price cap that would only be triggered at 200 and 75 euros megawatt hour for two weeks. in some ways, this would be a very brussels cap, to the extent no one likes it. the countries that want to see a price cap essentially say defective it is not one and it will not bring down prices. the countries that were about supplies say officially changing pricing and market that is so fierce and tight right now could lead to disruptions in supply. at this point, talks are ongoing, but tensions are high. this question, if you ask me, do we get a compromise deal, do we get a breakthrough?

today, i don't have a crystal ball. based on the report that we have, we are not going to get anything that looks like one today, and that means this will get thrown back to the commission again. anna: so, that's on the guest side. maria, thank you so much. joining us from brussels. let's get some more perspective from gas prices moving lower with the energy ministers debating things in brussels, as you heard. give us some insight into what has been happening to gas prices in response to what we have seen from policymakers and brussels. >> it is a little bit early to talk about real response of gas prices to what is being discussed because the ministers are meeting in brussels as we speak and you have seen earlier comments on the gas price cap proposal from the european commission that ministers are not happy about it, that it is a

joke, mockery, not workable. a better decision or solution is needed, according to member states. but what we have seen with gas prices, benchmark futures dropped today, capping four days of gains. it is for us to see later what the impact this conversation and brussels has. so far, they were gaining because of colder weather forecasts in europe. today, the future prices drop, but they are still 8% up for this month. anna: thank you very much for that. lyubov pronina joining us from brussels. all angles covered in brussels, as she said. movements in the price, but very much affected by the weather as well as policymaking. back to global call me --local economy next. this is bloomberg. ♪

anna: let's check on the markets for you. this is a special edition of the program. it is thanksgiving, so no market action in the united states.

of course, equity markets are open here in your. we are up by 0.5% on the stocks europe 600. u.s. futures on the s&p, closed on the cash s&p yesterday at a two-month high, suggesting there may be a little more rally. we talk about the ebb and flow. also gas price caps and brussels being discussed. on to fx markets. you can see the dollar is a little weaker, not as much as it was. we see appetite for the yen. this to do with dollar weakness. there's also the fact that

energy prices achieved well for the japanese economy. bitcoin also really topical. we or return to that later this hour. a recap on our exclusive conversation. let's get to the global economy now. sunder, very nice to have you with us. i think we should start with the european economy, given that our european friends are perhaps getting ready to tuck into the turkey and stuffing a little early. trying to put caps on gas prices and oil prices. a little doubt on whether that will prove to be effective. what is the stake in that conversation for you? >> that's a very interesting discussion, but also quite a lot of criticism about those plans. if you look at the details of those plans, the ceiling is 275

euros for two weeks in a row. that is when that ceiling would kick in. at the same time, the condition is that the difference with the energy price has to be almost 60 euros for 10 days within those two week periods. if you look at the past year, we would not have the situation where that price cap would have been in effect. one of the critics is, when is this price cap going to take effect? at the same time, the energy ministers realize this, but they are also quite afraid to intervene in this market because this is very complex and interwoven in the energy market in europe. if you start to meddle into that, nobody knows exactly what's going to be distorted. that's why they are trying to be very careful. anna: from an economist perspective, does that mean you

look ahead to the winter, it believe meteorology to the meteorologists, and you have to assume that european buyers of energy are going to be subject to the ebb and flow, the movements of markets, essentially eckley -- essentially? they have all because of national mechanisms in place. i suppose they rely on those. sandra: that's definitely the case. if you look at the euro zone as a whole, there is about 3% to 5% eurozone ddp compensation in place. that is not even taking into account the latest additional condensations for businesses. so, a lot of compensation coming up from individual come -- individual countries. at the same time, there's this fine balancing line between on the one hand, trying to prevent a real income declined for households by compensating. on the other hand, whether your energy bill is going up and by how much goes -- depends on a

lot of individual factors. he see a lot of dispersion in the market. this kind of a cushion to real income declined for some, but it is a lot of additional inflationary expenses for others. this is also why the ecb is worried about the situation, because they say all this compensation could be very inflationary and that could basically mean that interest rates have to rise further to take away this additional heat that is added from the fiscal side. anna: and where does that leave you in your expectations as to whether the ecb steps down in december from 75 to 50 basis points? and what does that mean for ecb policy for the year ahead? sandra: first for the macro, what we expect is the eurozone is already in contract of territory. we also already see business activity indicators pointing toward decline.

that is actually despite a global supply chain that is clearly recovering. if you look at the global supply index, which is part of that, it has basically recovered to pre-pandemic levels. so, taking that into account, business activities are contracting even worse. what this means for the ecb is basically as man -- its main mandate was inflation. that was unexpectedly high in october still. we think now that the ecb will keep hiking until it gets to about 2.5% terminal rate at the end of the first quarter of 2023. then, it will want to see things play out before it takes any active decisions. we think it will be really at the end of 2023 at the earliest before it starts moving interest rates down. anna: so, pausing for maybe three quarters or so. that takes us into a conversation about where we see

many factoring activity taking place. you made a comment ahead of our conversation here around concern in the euro zone about whether energy transition costs are going to add to something that causes some industries to want to locate elsewhere and you mentioned the united states. what is the important detail about the way that the chips act is put together in the u.s. that makes that an attractive pull factor, whereas you policies are a push? sandra: that's actually a culmination of the chips act, but also the inflation reduction act, that it is quite massive, in terms of subsidizing economic activities around transition. to take for example car manufacturing, electric vehicle manufacturing and sales, there are massive incentives in the u.s. coming up for that. and at the same time, what you

see in europe is basically that firms, especially energy intensive firms at the start of commodity chains, they are severely under pressure from the energy price rises. at the same time, they have this long year ahead and have clarity about what policies are really coming up in the european green deal. but one thing that is sure to be a squeeze is basically a blow from the energy crisis less a squeeze from transition policy. and on the others at the ocean, there is this wonderful world with all these subsidies. that is agreeable to policymakers and others behind the scenes be at they are afraid europe will lose a lot of manufacturing trade. anna: how substantial a fear should that be, do you think? we

have had some policymakers and politicians expressed concern around the inflation reduction act in the united states. it is being talked about at the eu level. do you think this is a development to watch? sandra: yes. nobody really knows how big this impact will be. it is frankly quite hard to say what element of that is a threat as part of the negotiation within europe or whether it is a realistic threat and will manifest itself. it is quite hard to say at this stage. but it is certainly a conversation at the european level that also taps into this issue of strategic autonomy in europe. and that falls into the manufacturing industry as well. anna: thank you so much for your time. sandra phlippen joining us to talk about the european economy. ukraine's deputy minister of the economy says the country's finances are expected to fall 35% by the end of the year.

she spoke with bloomberg this week. >> i would say that during the time of the war, ukraine is demonstrating huge flexibility in activity. however, we are grateful for the help, but we think that for the end of the year, as the ukrainian economy may fall by 35%, at the same time, the russian economy may fall to 4% and 6%. it means only one thing, that all of the sanctions are not enough. every time when i meet my foreign friends, all the representatives of other countries, i reiterate the fact that we need more sanctions because this will not let the russian government make these

attacks on infrastructure. >> i want to have my colleague ask you questions as well. kriti: i want to ask you specifically about the role ukraine plays in transporting natural gas. can they maintain that role in the coming years? >> actually, i would say that ukraine is now demonstrating huge bravery and things that no one would expect from ukraine. i think we are going to be up to all the challenges and we will stay strong. >> on this trip to canada, this is obviously a unique opportunity for you to engage with canadian officials, but also canadian businesses. what are those conversations like right now? what is coming out of those conversations? min. berezhna: actually, we speak with them about investments, about the ways to invest in ukraine and the great

opportunities that were launched not long ago. there is an online platform where any investor can file an application and find an industry to invest in ukraine. we are very open to investments in military clack -- military tech, metallurgy, and industry. we believe that our way to victory and after the victory, ukraine will become an investment mecca for the whole of the world. we are talking about supporting from canada private investors in all the fields, in the field of big enterprises, small and medium enterprises. the help is never enough because we are now having a war and we need this help and aid from the international society. anna: that was ukraine's deputy economy minister speaking earlier to our colleagues here at bloomberg. keeping you up-to-date with news from around the world, there's a

first word news update. >> thank you. in china, daily covid infections have hit a record high and the country reported almost 30,000 new infections on wednesday. the recent surge comes at a critical moment for leaders. they have to decide whether they tolerate some spread of the virus or restrict to some zero covid restrictions that affect the economy. most federal reserve officials now seek to slow the pace of interest rate hikes. that according to the latest minutes of the recent meeting of policymakers. it is a signal they are leaning toward downshifting to a 50 basis point rate hike in december. in colorado, the suspect accused of killing five people at a gay nightclub will be held without bail. anderson aldrich made an initial court appearance on wednesday. he was beaten into submission by patrons during saturday night's shooting. in malaysia, longtime opposition

leader will become prime minister after decades of waiting. the country's king chose him to form the next government. no alliance was able to secure a majority in last saturday's election, but the new coalition won the most seats. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

zero-commission trades for online u.s. stocks and etfs. and a commitment to get you the best price on every trade, which saved investors over $1.5 billion last year. that's decision tech. only from fidelity.

anna: this is "bloomberg markets." welcome back. i am anna edwards in london. one financier has told bloomberg a company is aiming for a $1 billion fund for distressed assets in the digital assets sector. my colleague has the fallout from the collapse of rival ftx. >> i see a little bit of

contagion. when a trading plan form goes down, there are many other institutions with money on the platform. we see unisys halting. i think there will be more to couple of others. i don't know how many. but each time, there are cascading effects, those become smaller. overall, the industry is fine. >> you tweeted, then deleted a tweet, suggesting perhaps liquidity issues the likes of coinbase, as well as grayscale. is there reason to worry about that? changpeng: i don't think i tweeted about grayscale and i did not say there were liquidity issues at coinbase. i will refer to two articles. one says that coinbase says grayscale has 635,000 records with them. the other articles four months ago says they only have 600,000 bitcoins on exchange.

i understand exchange is separate from custody. i just posted a question, are those two numbers correct? but there were misunderstandings among the community, so i deleted the tweet. >> some say perhaps you tweeted because you wanted to build your own empire, to spread the fear and the rumors. changpeng: i don't know if there are issues with those other businesses. the thing with other businesses is that unless we get very accurate financial statements, we don't know for sure. but i am not tweeting that because we want to build our empire. i actually reflect on the ftx situation. i blame myself for tweeting on that too late. i think as an industry, we let them get too big before we started questioning some of those things. i am taking the approach where the question -- we ask questions much earlier. it does not mean any attacks on any industry peers.

we just want to build more transparency and scrutiny into the industry. having said that, coinbase has been operating for 10 or 12 years. i am sure they already have a lot of financials. we just don't see that on the blockchain. for people in the industry, we like to see data on the blockchain, which is the most transparently for information. >> you talked about launching a crypto fund. who is interested? changpeng: we should have a block article going out today. there has been back and forth on how to structure that, do we make it a loose fund or an actual find? i think we are going with a loose approach, where different industry players will just contribute as they wish. i think we are structuring so that it will be quite public. whoever contributes moves funds

to a blockchain crypto address that people can look at. it is not just some behind-the-scenes fund. i think that has kind of been finalized now and i think it is going out soon. anna: that was by finance ceo cz talking to us. now, let's talk to anna nicole, who has been putting this together. good to speak to you, emily. what is next for ftx, given we have seen daily headline after headline investigations that are going to happen to this business? emily: there are several probes going on by several agencies and proceedings in delaware. they will move some of the hearings that are going on about bankruptcy proceedings in the bahamas from new york to delaware as well. hopefully, there will be some combining going on soon. what we won't be seeing anytime soon is the names of creditors

involved in ftx who have lost hundreds of millions of stuck in that exchange. the judge opted to keep those names private for the time being, which is an unusual thing to do. hopefully within time, that will be reconsidered and we will get to know that. anna: so why's that important? as journalists, we like to know where the news goes next. is that why? emily: the argument from ftx defense in the judge is that by keeping these names private, they can keep those businesses a little more safe and concern -- and secure in terms of contagion. they can stop other businesses going after those who have funds stuck. but obviously as time goes on, transparency is what users are pushing for. anna: cz said the industry would be fine, but he was also talking about how there will be further fallout to come. emily: this is a rite of passage in crypto.

we have had several bear markets and they're always very painful, much more than you might see in other sectors. so, it is very much likely there will be companies that are going to continue feeling the pain of this. we are expecting bankruptcy filings from others to come out soon. some of those could be genesis and others who have tried their best to avoid that, but there were is a sense that will -- that there will be more. anna: we talked last hour about how there seems to be assents within the crypto industry that they need to police themselves, otherwise someone is going to come in and do that policing paid why should they expect that they can sit outside the norms of society? financial products require regulation, so why shouldn't crypto? emily: at this point in time, it is several years of crypto being

an industry without regulation. the real effects of that is we are having major blowups on millions of dollars scales. there's no protection for the collapse of ftx, no one to protect investors in luna earlier this year. i think they are really turn to take it upon themselves to say that if there aren't any regulators, we will do what we can. however, that may also have its own effects. anna: it is thanksgiving and a lot of families stateside are gathering, perhaps americans around the world, gathering to be thankful. this time lester, those who were big into crypto might have been singing its praises, telling their whole family about why they picked the right career and why crypto is the future of everything. this year might feel different. i know you and others at bloomberg have all been writing about the best effects in that situation, if you come under attack from family members. emily: the message wave heard from people who were planning to have those discussions around

the dinner table, these things have ups and downs. the stock market goes up the same way, probably not on the same scale. there is obviously the right to be concerned for family members, for those who put money into assets and lost big. there are no methods of course in this industry, unlike you might get if a company goes bankrupt and they are under several layers of insurance. in crypto, there is none of that. there will be several conversations around dinner tables, i think, this year. anna: thank you so much. emily they are taking us to the twists and turns of the crypto ftx saga. we are going to take a short break here. coming up, the swedish rate decision later. the riksbank governor talks to us. that is it for this hour of programming. happy thanksgiving, everyone. this is bloomberg. ♪ we will work with you every

step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why?

>> welcome to bloomberg markets. i'm tom mackenzie. happy thanksgiving. the u.s. markets are closed. we are seeing european stocks

gaining as investors keep an ionic global central banks. this hour, we will get the account from the last ecb governing council meeting. policymakers are having to keep and i on the european energy crisis. energy ministers holding an emergency meeting in brussels. we will have a live report as crisis measures are put on hold. the holiday shopping season is underway, with black friday on deck. we discussed the retail rush to close the year. that is expected to show slower growth. let's check in on these markets. he saw the handover from the u.s. closing for the thanksgiving holiday. the s&p toward the end of the session yesterday marking its best gains to levels not seen since two month ago. the asia-pacific index, the benchmark posting gains 1.6%. it's post a picture of mainland china, where you are seeing a

flurry of restrictions across cities, including the capital beijing. in europe, up 0.5%. it is slightly better picture over in germany, gaining almost 1%. u.s. markets are closed for that thanksgiving holiday. futures looking to build on the gains of yesterday. we had the minutes from the fomc yesterday, suggesting there is no consensus around the terminal rates, but there is, it seems, consensus from federal reserve officials around reducing the size of interest rate hikes from the central bank. the markets pricing in 50 basis points come that december meeting. officials within the fed are now suggesting there is a 50% chance of a recession in the u.s.. let's check in on some other assets. the pound and focus, 120 one. strength for sterling. this is partly as a result of a

softer u.s. dollar. possibly linked to comments we are hearing from the deputy governor saying the boe does have to continue raising rates, regardless of the pay, simply because of inflationary dynamics here in the u.k.. at 2.9, below 3% here in the u.k., that is a six basis point move. there has been some move into gilts, but very much so into german booms. a catch up from the session we saw yesterday in terms of the move into u.s. treasury. brand drops to $85 per barrel. the gas negotiations, as painful as they seem to be over in brussels. bitcoin trading at $16,555. setting up planes for a $1 billion fund for that industry and sector. we will bring you that exclusive interview later in the hour. joining us now is global head of

investment strategy for europe more gain dell it on. good morning, u.s. time. thank you for joining us. i want to start with what we are adjusting from those fed minutes , and the question as to whether or not there is a dual track attempted by the fed to talk a hawkish talk, hawkish rhetoric, and at the same time plan to increase rates at a lower pace of 50 basis points, for example, in december. is that a jewel attempt i the fed? >> i think we are seeing the fed really leading toward downshifting the rate hikes to potentially 50 basis points. but what will be important for the market is what it means for 2023, because the market seems

really keen to believe there will be paid dovish pivot in the next year, especially in light of the recent data coming out of the pmi earlier this week at lower than expected, but also inflation numbers last month. i think the difficulty for the fed is that on the one hand, there is some building pressure on the inflation side which needs to be addressed by keeping increasing interest rates. but at the same time, it is mitigating the negative impact on the economy and dealing with this increasing risk of recession. overall, what markets could now anticipate is potentially further downshifting in the early months of next year, probably downshifting to a potential 25 basis points. but the fed is also saying that

they will be more comfortable with real rates in the positive territory and still very negative. the fed could have some room to go. the terminal fed funds rate is probably missing at the moment at a lower level than what the fed could go to. it will be interesting next year to see how long the fed will carry on with lower hikes. tom: interesting. let's stay with the terminal rate. 4.6% is the dot plot. jay powell says it is likely to be above that. there is no consensus from the fed as to where the terminal rate ends up. the market is looking at 5%. can they get to 5% if the fed is now assuming there is a 50% chance of recession? morgane: i think what will be a game changer is the change of pace for these rate hikes. over the past four meetings, it

has been 75 basis points, and other potentially 50 basis points, a really large rate hike, but if the fed slows the pace, then maybe the economy will be able to support, to stay resilient enough, despite the increase of interest rates. but one thing we could expect is that the fed will then pose that the top of its hedge fund rates for the cycle. i don't expect the fed to directly start to reduce interest rates when they reach the peak. that will be interesting. and the real dovish pivot, i think, will not happen before 2023. tom: that's interesting. you need to focus on the pace of rate hikes. think that pivot doesn't happen until late 2023. does that mean you have to hold off in terms of ramping up

exposure to equities, or do you chase the rally we see at this point? morgane: i do think there is more rationale going back gradually to growth stocks. first of all, even if we cannot really time when the fed funds rate will reach the peak, we do see that the fed is taking a more prudent approach. that is positive for growth stocks. we are also seeing a lower u.s. dollar versus its peers. this is encouraging for the profitability of growth stocks. i would say that we are really at a turning point where we are seeing investors getting back to growth stocks and also inflation numbers be interesting to follow. that will be another driver of more coming to growth stocks in the coming months. especially headline inflation, which is expected to decline

quite sharply in the first half of 2023. tom: ok p t talk about the fx component, the dollar component. has the dollar peak? i'm looking at a drop on the bloomberg index. morgane: it is poised to continue to decline. first of all, because the fed has started it cycle earlier than other central banks, especially at the ecb, there will be some divergence there, with the ecb continuing to hike. for the dollar, it might continue to decline to more normal levels. that will boost profitability sentiments toward common earnings, despite domestic witnesses that we are starting to witness. tom: i want to get your views on china. there is a very confusing picture coming out of there. we had a plan to move from covid

zero, but now we are looking at record levels of infection in that country. comparative to the u.s. and other nations during the height of the pandemic, nowhere near the numbers, but nonetheless, a complicated situation. restrictions, lock downs in many cities, including the capital beijing. you have further exposure to china? they will have to come out of this at some point, whether it is the beginning or end of 2023. when you want to start position for that? morgane: i think there will be no coming back for the steps taken toward easing the covid zero policy. i just think we can expect a stop and go type of approach driven by the new covid cases. that may drive some volatility, but at the same time, when you look at valuations, they are very attractive. the risk on the geopolitical side seems reduced, especially since the dialogue that restarted between the chinese

president and president biden. also, when you look at the forecast for growth next year, the differential between growths in that em versus dm is favoring more toward the side of china and broader em countries. i think there are some more rational to get into china's equities. at the same time, investors seem really polarized on their expectations for china. tom: polarized expectations on china. we are also hearing about more physical things coming down the pipe, in regards to ratios. what is the fixed income trade of choice? morgane: really hard to say right now. i do think that caution is still important. when you get really old, especially across u.s. reserves,

you can see they are positive across the whole curve, around 1.5%. with all of this coming back positive, there is the case for the fixed income side and probably go to investment bonds. tom: sovereigns, investment grade, may be some opportunities in china. a polarized fee. thank you, morgane delledonne. keeping you up to date with news from around the world, here's the first word news with laura. laura: thank you. in ukraine a barrage of russian missiles has knocked out power for millions. the attack came at a time when temperatures are below freezing. in a virtual appearance before

the un security council, ukraine's president volodymyr zelenskyy called the missile assault a clear crime against humanity. meanwhile, the u.s. is sending more weapons packages to ukraine. weapons are being taken from existing pentagon stockpiles. in the u.k., the chancellor jeremy hunt wants the treasury to assess the benefits of taxing wealthy foreigners with so-called non-dom status. that is people whose permanent domiciles are outside the u.k. to avoid paying taxes. hunt says he wants to make sure they don't leave the u.k. a big donation to charity from warren buffett. he has given way stocks valued at 700 $58 million to several charities. in late 2010, he started a giving plan, saying he would give away 99% of his fortune. global news 24 hours a day, on

air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am laura wright. this is bloomberg. tom: coming up, the retail rush hits not just in the u.s., but here in the u.k. the expectations for black. those changes around the consumer, different retail themes. how is it paring out in stores and online? stay with us for analysis. this is bloomberg. ♪ is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.

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tom: welcome to "bloomberg markets." i am tom mackenzie. the world cup, another big sports story focuses around a family. strategic options that could lead to a full sail of the storied club. earlier today, we caught up with former goldman sachs economist james o'neill.

>> i'm a pretty passionate person on britain's evolution, and capitalism evolution, with prop it for purpose, not profit for no purpose. i think whoever tries to satisfy the price, they need to think carefully about what it is like coming out of manchester. with that as the number one factor, the second one is i can't really see the external environment and the specific environment around the commercial business of football being the same in the next 20 years of what it has been in the last 20 years. that suggests to me that a lot of smart, rational people are

not going to go chasing after winchester united -- manchester united, despite it being easily the biggest sports >> friend in the world. >>do you think perspective u.s. buyers will be put off by how much manchester united fans hate the current owners? jim: i see it slightly differently. i would say to perspective u.s. buyers, or for any buyers, if you don't engage the fans and treat them as partners and part of the wonderful think that is manchester united, you're going to have a pretty miserable time earning. >> what happens longer-term? do you think they will be able to sell? i don't know if it goes for $3 billion or $4 billion, you could still lead a consortium. there could be many who are interested in this club. jim: my honest answer is i have

no idea. to me, right now, it seems completely out of reach of normal human beings, or for that matter, not so normal, very successful business human beings. i would not want to come up myself, lend my name to people who would try to indulge the merry-go-round that in some ways it seems to have become. tom: that was former goldman sachs economist jim o'neill. manchester united was up for sale in 2012 and he tried to make a play for. also talk of david beckham involved, or has been at least reach out to, trying to get his endorsement from some. when it comes to the world cup, switzerland winning. later today, portugal versus

ghana. also brazil versus serbia. two big beasts playing later today. portugal looking for renaldo comic giving that explosive, devastating interview he gave. with the holiday season upon us, black friday could be more important for u.k. retailers this year, as they try to encourage customers to spend before christmas erodes their budgets. marshall joins us now from the npd group. in the most important market, when this comes to the consumer, it is the u.s. in terms of themes, what are you seeing in consumer habits this year versus last year, post-pandemic, with the cost-of-living of living crisis, inflation concerns, what is emerging, in terms of consumer habits? >> the biggest change this year

is the stores are playing a much more important role. online is sliding back a little bit. it has kind of levels set over the past 12 months. rands directive done well, but overall, pure plays and online components of retailers that have store presence, the store is part of the equation, much more important as socialization kicks back in. this is an interesting year because we saw an early start to the holiday, but it actually started slower. we have slid back to previous year levels in dollar sales in the u.s. we have slid back to 2019 levels. that is an interesting challenge right there. when you think about what's happening, we have had the weather play a key role, much warmer. we did not get the seasonal shift. earlier promotions certainly have eroded the power of the promotion and the impact we have had leading up to black friday. covid purchases, all those

products we bought during the covid lifestyle, certainly have had an impact on things like tech and toys. then, the lack of newness, i would say that is the biggest story out there, the lack of confidence and innovation in the marketplace. what do you really need that you haven't already bought over the past year or two? this is an important component. here in the states, we had an election distraction. as was more like a major election, a presidential election. we had a pullback over the last two weeks. tom: we have seen that retail data out of the u.s. holding of star than expected. our consumers trading down, buying less, doing a bit of both the echo -- doing a bit of both? marshal: unit sales are actually sliding tech a little bit. that is the piece we are working. consumers, the demand for product has been actually less than what we have seen in the prior two years. but when you're selling products

at higher prices, and keep in mind the inflationary price, it is going to cost more to put a meal on the thanksgiving table this year by between 50% and 18% more. those hosting the meal, they will have less money to spend on gifts. i'm not concerned about kids getting christmas gifts, but it is going to be a challenge for retailers to really be aggressive when it comes to inventory management, promotions, and enticing the consumer as they keep waiting. tom: 20% on your thanksgiving dinner. that is not something you are going to welcome, is it? in terms of discounting, how is that changing echo are retailers under pressure to maintain margins and reduce discounts? marshal: that's a very important question. we have seen so far more frequent promotions, but not deeper discounting. that will very likely change as we get closer to the holiday because of the inventory

concerns. they do not want to carry excess inventory going into 2023. 2022 will be more about volume. 2023 is going be more about margin. tom: marshal cohen from the npd group, thank you for that analysis as it leads up to black friday. discounts have already started in the u.k. markets across europe seeing gains of 5%. u.s. equities stocks closed for the thanksgiving holiday. futures putting up on the s&p by about 0.2%. a bit of support for the single currency. still ahead, we are live to brussels, where eu ministers are gathered to try to find common ground on the growing energy crisis. we will bring need that story. this is bloomberg. ♪

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tom: happy thursday, happy thanksgiving. posting gains of .5%.

every sector in the green, led by real estate. energy is still clinging to gains. those markets will reopen after thanksgiving. there is a move as well in german debt, italian debt. i am focused on the 10 year and germany, 182. that is a 10, 11 basis point move lower. 121 on the pound. that is again of .5%. that does continue, that trend. thus the best level we have seen since august 17 for the british pound. now, we will continue to focus on the ecb. we also heard from the dutch

central bank governors. he expects to see inflation elevated next year and in 2024. for more, let's bring in the economics founder and director and chief economist. thank you for joining us. i want to start with the view that the markets are not yet pricing in enough from the ecb are they behind the curve or are they getting ahead of themselves. he says he sees inflation elevated through 2023. raffeala: the good news we are close to the peak, even in europe. the bad news is that you see eurozone converging into 4% and

2024. ed still far away from where the ecb wants it. we see a lot of hawkish comments in the council so in terms of interest rates, we could be going to 2.5 percent, 3%. you mentioned bonds, the 10 year should be trading at 3, 3 .5 and i'm not even being too aggressive. there is something that is mispriced. it appears to me, it's going to affect the bond market than the front end. definitely, the market is too excited by the u.s. news lately and it is assuming that europe will do exactly what the fed is about to do. tom: 181 on the german 10-year.

what would need to happen in terms of the level of rate hikes. raffeala: first of all, quantitative tightening is going to happen. the market has to process that. the second issue is that although we do expect a recession and ucl the signs of gdp contracting in the euro zone. it will not be a massive recession and in the background, you still have the digitalization, the reassuring, these things put a lot of strain on the labor market everywhere, especially in europe. we think you will not see much unemployment in the near term and in a market like europe where there is a lot of contractual rigidity, all of the

wage pressure is still ahead for many careers. the ecb will have to face a labor market that is more resilient than they wanted to be. that will definitely contribute. tom: are you starting to see evidence of a cost price spiral as a result of that late pressure on wages? raffeala: as i said, the good news is that we are close to the peak of the inflation. the bulk of businesses pricing has gotten less aggressive than it was in the last 24 months but is still exceptionally high. there is a lot of pent-up cost that has not been passed onto the consumer. the good news is that europe is trying to smooth the energy cost, the energy shock otherwise it would be a much deeper recession. the other side of that is that

the consumers can continue to fund purchases which will allow businesses to pass on the cost. tom: we are currently getting lines from the ecb. this is the account from the most recent meeting, officials backed 75 basis point hike. schnabel, one of the officials on the board wanted to know if the euro is causing price pressure. does the euro remain above parity within this environment? raffeala: i think it does as long as the ecb is willing to fight the inflation path. inflation is converging towards 4% average in 2024 if they

deliver rate hikes and bond yield normalization. we are talking about massive negative real interest rates. although we forecast a slowdown of gdp, house price inflation remains positive through the forecast horizon. you don't get any relief from housing inflation or rent inflation and this is a big factor in most businesses. tom: house price inflation remains elevated. before we let you go, remind us of your growth forecast and how you've adjusted that? raffeala: 2023 we think the euro zone will contract by 1.2%. it is meaningful but not aggressive recession. tom: meaningful but not

aggressive recession. we will see how the data plays out. we have the ecb coming back later today. suggesting confidence coming back. thank you very much. sally remco has been given approval for an ipo. one of the biggest listed companies and the world. it is pushing ahead for plans of an ipo of its energy trading business which would rank as one of its largest sale shares this year. it will be listed in riyadh as early as this year. that's redhead crossing the terminal. verge trading unit, we will

bring you more details when we get them. the european union is said to pause efforts to include emergency measures to curb prices for natural gas. as diplomats try to resolve a deep split to help cap the cost of gas. maria, you spoke to us about the painful nature of these discussions, what has emerged since then? maria: it's a no breakthrough in if i had to describe what happened, energy ministers have not rejected the energy package but have not fully endorse it either. this thing is now on hold. the sticking point, we know it very well, it's been very well documented. the language referred to as specifically, the price cap was a joke, a mockery.

that threshold of 270 five euros for two weeks for that price cap to be triggered. the dutch energy minister said we are now seeing as this debate drags on that this is a flawed concept and potentially about idea that could disrupt supply. we are in a situation where nothing is agreed until everything is agreed so they have decided to reconvene on december 13. the timing is interesting because this will happen two days before the ecb meets in three days before european leaders gather here for their final meeting of the year. i'm not sure about you but i know where i will be for those three days. tom: you will have a very busy mid december. when it comes to the g7, and the price of russian oil is there any news there? maria: the reality is, we don't

know. the meeting hasn't started. we are expecting a decision to come late into brussels time. the tone around it is different. we should make a difference and point out that we are talking about oil capped at $65 a barrel, a price point continues to be a sticking point here. a number of countries including the polls and the baltics but 65 is too generous to russia. we are being told that a deal is within reach and potentially coming today. tom: there has been progress across europe where demand has come off. is there a risk whether it is gas or oil with these price caps put in place, if they are put in

place, that the demand doesn't match the reality in the years ahead? maria: that is really the question and that is why some have fears. for the european union gas is a much bigger story at this point. the storage season is fully booked but there are questions about what we do about 2020 3, 2024. there are fears going back to your question, if you start to change prices artificially at a market that's so tight and so fears you will have supply issues. the other point worth mentioning, if you're not competitive on the price point, you have to be competitive on duration. you lock in long-term contracts. but as you know, that's problematic for the european union because they could clash with some of the deadlines of the green deal. it's a difficult one to square.

tom: the chinese walk away with those long-term deals from qatar . but it's a challenge for the european countries. g7 has a little more progress, a little more light at the end of the tunnel. brent is currently trading at $84. the discussions around g7 and the potential cap of russian oil is playing into that. a slightly higher level than some had thought previously. we continue to watch across the space. every single sector bar one in the green right now. real estate leading up to percent. coming up, finance.

offering crypto of bailout. a billion-dollar plan to backstop the industry. we bring you that exclusive conversation. that is up next. this is bloomberg. ♪

tom: welcome back, you are watching bloomberg markets. i'm tom mackenzie. earlier, in an exclusive interview he spoke about the knock on effects of the ftx collapse. >> i see a little bit of

contagion. there are many people with money on the platform. i think there may be one or two more, a couple of others. each time there are cascading effects. overall, the industry is fine but there will be some probably. >> you tweeted and then deleted a tweet that perhaps liquidity issues as well as grayscale, is there reason to worry about that? >> i don't think i tweeted about grayscale and i don't think i was saying liquidity in the coinbase. i was referring to two articles. one saying coinbase said that grayscale has bitcoins with them. the other one said the big coin only has 600,000 bitcoins on the

exchange. i just posted is a question are those numbers are correct? that caused a lot of misunderstanding in the community so i removed the tweet. >> are there solvency issues with those companies? some say that you did it to build your own empire? >> i don't know if there are issues with those businesses. i am not tweeting that because we want to build our own empire. i just reflected on the ftx situation and i blame myself for tweeting not too late. we let ftx get to bed before we question some of those things. we should of asked question much earlier. that does not mean it impacts

our industry peers. we just need to bring more transparency and scrutiny into our industry. coinbase has been operating for years. they have already had audits on their financials. we would like to see it on the blockchain which is the best way to post information. >> you have talked about interest being substantial, who was interested? >> we should have a block going out today. there has been back and forth on how to structure that. do we make it a loose fund? we are going with the loose approach where industry players will contribute as they wish. i think a blog post is going out today. i think it will be quite public.

it's a blockchain critical address that everyone could look at. so it's not some behind-the-scenes fund. that's being finalized now and blog post is going out soon. tom: speaking exclusive to bloomberg earlier outlining his plan to backstop the energy after the ftx blowout. for more, anna herrera. in terms of the funding, do we know where the money is coming from? how much of the cost will it be on the crypto marco -- market? anna: he mentioned that there were other industry players.

tom: when it comes to the next victims of this fallout. he feels like more dominant news will fall. where have you focused your sites right now. anna: we have been reporting on genesis. they have been raising money. they are another key player. they are a lender and they have a brokerage. if something goes wrong it could affect another company and another company. it will cause a little bit of pain but not too much. this is been going on for a bit, companies falling. tom: and this is linked to the winklevoss twins.

is there greater safety because of where they are based, because of the sec and the regulatory environment? anna: they have more supervision. ftx was based offshore and name may make customers less say because they have no one supervising. tom: our regulators behind the curve? what are the machinations happening in the halls of power on how to put some red lines this industry? anna: there have been discussions going on for a long time. crypto, you need to be careful. there are always warnings after they collapse. in singapore, they have become a little more strict. in the u.s. they are still arguing is it securities or commodity.

normal people get hit then there might be a bigger push from regulators. tom: the proponents of crypto say there is still a fundamental play here around the blockchain and the blockchain technology. does that argument still hold up? anna: it you celebrate the asset from the technology. it is still holding up. a crypto proponent would save this is a perfect example of crypto. you don't want a centralized system. tom: you do hear from some.

that's why you want decentralize finance say we have some greater space to the controller money. that's still a play for these crypto enthusiasts. what's the validity to that view? anna: we have to see what adoption will be like. we have seen a shift to decentralized exchanges. if there was a hack on these exchanges there would be no recourse. there's so much to figure out. tom: anna herrera, it's great to see you. bitcoin is currently down. ether is up more than 2%. coming up, we will plenty more. this is bloomberg. this is bloomberg.

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tom: welcome to bloomberg markets. happy thanksgiving, i am tom mackenzie in london. policymakers are keeping and i what is happening. energy ministers are holding an emergency meeting in brussels. we will have a live report as crisis measures are put on hold. the big short on the wrong column dollar. his expecting big on the collapse of the hong kong dollar. in china, covid cases hitting a record high as tighter restrictions and lockdowns stoke social unrest. let's check in on this markets and recap.

the asian pacific notched up games of over 1%. on mainland china you saw some losses. further restrictions in the capital of beijing after record numbers of cases. broadly, you are looking at a consensus in terms of moderating the price of those hikes. not a lot of consensus in terms of the terminal rate. fed officials saying there's a 50% chance of a recession. u.s. futures held above 4000 and at the close yesterday. volatility, cut off quite significantly. the vix currently below 21 at 20

o.8. the pound at 1.2. gains of .51%. u.k. yields at the long and at 2.96. brent crude in focus for us, $84 a barrel. in bitcoin, 16,500. we had that interview with one of the largest bitcoin currency dealers. joining us now is paul christopher. you are saying that arguably, the terminal rate are above 5%

is looking overambitious at this point, why won't we get there? paul: it might be that the fed's taper doesn't get us to 5%. our view is that it leaves short of their. the market exuberance over the tapering itself is a little misplaced and premature. he will still have fed rate hikes in place and we have all of these expectations coming down and the economy showing signs of contraction. tom: where have you seen the weakness paul? we saw the retail numbers coming in strong. there is softness in the housing market. where's the vulnerability in this economy? paul: housing is such an important driver here. we think as incomes continue to

see inflation outpace them, especially the bottom three fists of the income distribution will find it difficult to sales feel that and see the beginning of layoffs. that is a precursor of things to come. the employment picture is the last one to fall but cracks are evident there. tom: employment is the last pillar to fall. as we look at the tech sector, high profile layoffs, you say that we are seeing layoffs and other sectors. paul: you see a growth in jobs while quite a bit -- slow quite a bit. i would not attributed to what you are seeing intact as related

to that sector and multiples way too high. the labor market as a whole is starting to look to a slower, softer and preliminary stages of that last pillar to fall. tom: what is the valuation picture looking like for you? is there a further squeeze? paul: still a little bit too high on valuations because earnings are still too high. fourth quarter, is going to be a down quarter and we think that continues into 2023. the point is not how many times the fed raises rates but the fact that inflation remains high in the fed has raised from near zero to something close to 5%. and don't forget quantitative tightening that allows all those

retail sales to continue. as the liquidity comes out of the economy that will be a difficult weakness for sectors. tom: where is the margin messages? paul: the resilience is in liquidity. it's been almost a year for those high net worth investors to take money out of the stock market, they have not been able to do so without facing losses. they are living on the residuals of the market gains of the last three years and those will be running out. as they do we will see retail sales come in line with other weak points in the economy such as housing. tom: if you think valuations are looking a little too rich, we hear from strategists and they say the u.s. looks a little

overvalued, maybe there's opportunities in europe where values look more attractive. do you align with that view? paul: cheap can always get cheaper and we don't think a bottom is and yet, certainly not europe. as far too early to call it in per the energy crisis. if you lift emergency measures, maybe you were too early implementing them. the real test comes since january, february when it gets the coldest in europe. it will be difficult for those companies to do well if china is still slow and sluggish under covid restrictions and trade being the slow and 2023 as we predicted it would be. right now we would hold off on emergency markets. tom: you touched on china and the headline said there were record numbers of covid cases,

they seem like they are a long way from zero cases. what do you need to see from officials in beijing to start to reallocate to china? paul: they have been tweaking those restrictions around the edges. you still have winter coming, it doesn't make sense to us that they would remove those restrictions in any material way. with winter coming, beijing is in lockdown territory. we don't think that's a policy that changes very much. we need to see more than tweaks. we need to see lifting of restrictions on we don't see that until next spring or a little later. tom: i know you're conservative on equities at this point. you do favor within equities, i.t., health care and energy.

give us a rationale on energy. how does that thrive in a recessionary world? paul: you have to look through this recession but energy has generated cast throughout the year. it's one of the few sectors that has done so on the s&p 500. we like the ability to generate cash. even as we move through this recession, the world will still be short enough of energy that we like our target of 100, 120 on west texas intermediate. we would treat this. of weakness us a buy opportunity and then look several months when crude oil gains traction. we think energy is a good place to be. tom: would you like a fixed income wager? paul: it's a barbell approach right now. we are waiting for an

opportunity. we are willing to take those opportunities when they appear by doing so in fixed income. on the fixed income side we like the longer term, the 10 year end the shorter terms, investors that need cash or a place to put cash where it doesn't lose any money. the longer term ones who wanted to take advantage of yields while they are still high, we want them to take a chance of both of those opportunities. the peak in yields is not far off and therefore, in 10 years or longer is a good place to average men. until we see the fed come down and the recession get underway, we think it's probably a good bet to put money into the short-term over the next few months. you will see that money mature and have the opportunity to reinvest it.

tom: paul christopher, fantastic insides. happy thanksgiving to you and yours. here is the first word news. in a virtual appearance before the security council. meanwhile, the biden administration is sending the ukraine another 400 million dollars worth of weapons. the rail workers union has set up eight more days of stoppages in the run-up to christmas and

in the new year. unions are demanding pay hikes. in alaska, mary peltola has one reelection. she has served as the only representative of the house and she will serve a two-year term in january. laura global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. tom: we are talking about central banks, fomc, south africa raising their rates 75 basis points. we also got some lines from the ecb schnabel speaking in london saying that data suggest there is limited room to slow the pace

of hikes from the european central bank. coming up, we will look ahead to the/china relation coming out the meaning between biden and president xi. tina fordham with deep insight on china. we will get her insight. stay with us, this is bloomberg. ♪

tom: welcome back to bloomberg markets, i am tom mackenzie and london. officials in washington and taipei have been in touch since the meeting between biden and president xi. for the latest let's bring in lisa fordham. tina, thank you so much for joining us. let's start with that meeting.

there seems to be something of an easing of tensions as we sat there between the two leaders. the defense secretaries of both nations meeting. how can this be sustained even with the next head of house could be on his way to taipei and taiwan and taiwan in the new year? tina: the broad take away of the initial meetings of the g20 between president biden and xi was escalation ends and improvement in what diplomats called the mood music. it's too early to talk about a soft landing between china and the u.s.. because the stakes remain very high. i think we can genuinely take comfort from a meeting that was

orchestrated carefully on both sides to communicate areas of cooperation on climate and deemphasize areas of disagreement. we are still not back of what i used to call a frenemies relationship, it's still a hostile relationship these days. tom: they were attempting to reset those communication channels, those link between the two militaries. the chinese military response around taiwan. also looking to greater cooperation around climate change. prior to e meeting you had a substantial move around restricting tech flows. how should we be thinking about all these factors when it comes to the question of decoupling or realignment of these linkages,

these trade linkages between these two countries? tina: it's a nuanced answer. as you mentioned, the u.s. move on banning chip technology as a blow to china and will be seen beijing as a way to constrain its rise. i have seen investors say it's a pullback from china's inclusion of the u.s. and the west. there is a china fatigue. the u.s. china relationship and the eu/china relationship is of huge importance. finding ways to remain

productive is crucial. the take away for investors is that the scrutiny of all transactions, whether tech or m&a for geopolitical components will be very high. we saw that with olaf scholz recent trip to beijing and the 25% stake in hamburg. very controversial. tom: that scrutiny will continue on some of those transactions. when it comes to the quesnf covid zero. you have covid cases at a record high. what is your assessment on when they are able to get out of covid zero? are we looking at the early part of 2023? tina: you reminded me of going back in time to the covid days when you had a lot of people that did not understand the

pandemics talking about prognostications. they are stuck with zero covid because as soon as they take those restrictions off it is clear they will be faced with a massive influx of cases to their already overstretched hospital system. many of the global investors that i talked to really expected restrictions to be lifted. it will be difficult for china to do that anytime soon and it's hard to see a big move in that direction which means suppressing growth and really extending the trajectory for a recovery of china and the economy. tom: having lived there for five years and being in contact with people advising, that seem naive

to me. the financial times described a conspiracy of silence around brexit. what is happening when it comes to the question of brexit? tina: it really was impossible for many leaders in free conservative party leaders to use the b word and there has become religious zealotry around it, making brexit work. thus what led to boris johnson come to power. now that the pandemic aftermath, the fog has lifted, there's really no explanation for why the u.k. is at the bottom when it comes to our oecd peers other

than exit. finally, you have jeremy hans, the new chancellor and new prime minister, trying to avoid betraying brexit but we are finally having a conversation about how to improve relations with the eu because the economic costs of been too high. tom: in the polling suggests that the people of britain are getting fed up with brexit as well. they are now not in favor with the relationship we have at the eu. tina fordham, thank you. now it is time for the business flash a look at the biggest business stories. laura: thousands of amazon

workers will mark black with walkouts. employees in the u.s., u.k. india and japan will take part. amazon says it takes its role seriously in these important matters. twitter has suspended its office in brussels after tea members quit last week. that is the business/. tom: jeremy stretches next with cibc. we will get his thoughts on the euro, the pound. we'll have that for you, stay with us, this is bloomberg.

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♪ tom: welcome back to bloomberg markets i am tom mackenzie checking in on your markets on thanksgiving thursday. s&p up .2%.

in terms of your future in the u.s., close trading today. there's been a move as well into government that in europe. most pronounced on the long and, 1.8 on the german 10-year. 1.21 on the pound on the back of a softer dollar. now the hong kong dollar is in effect story for us. one billionaire investor revealing his big short against the bank. we have a large position against the hong kong dollar, the peg no

longer makes sense for hong kong and it is only a matter of time before it breaks. joining us now is jeremy stretch. let's kick off their with the short on the hong kong dollar. they took out the effexor verse -- fx reserves. jeremy: you can make an economic case or a business case in relation but bill ackman is not the first of the titans of the effects space trying to bet against the peg and achieve the success they are looking for. you can argue that is

potentially questionable and there will be an adjustment in the process. interns for positioning for it at the structure, it's long and drawn out process suggesting that they may have deeper pockets. tom: when it comes to the dollar, showing weakness again, down .3%. it shows that these rates will moderate 50 basis points. how to stuff it into your view on the dollars we go into 2023? jeremy: if you look at the dollar has performed in 2022 it's been a function of how the market is priced on the terminal

rate. it's been commiserated in the dollars value whether it's been on the dxy. if you think the market is now correct and pricing which is probably correct. then you have a presumption as to how long the fed will maintain that rate level. the dollar has been gaining through the case. i think the fed narrative will start to lose as we reach those terminal rates. then we will get to a story where we get more two-sided in terms of risks especially if we see indicators i would be wary about buying at some of these

levels. tom: i feel like it's a slightly clearer picture for the dollar than the euro. you have some data coming through with countries like germany that has slightly less bad than economists have suggested. talk around the price cap. what is the biggest factor now for the euro as it held above parity today? jeremy: there are a number of data implies that the scale and depth of the recession will be slightly more shallow than the markets were assuming. we may relish the scenario where the ecb will be buying full of the growth scenarios in 2023. we are looking for a lower

terminal rate than is priced in by the market. we don't see that as a negative story for the euro because the market could focus on trying to drive the growth to directory in the euro benefiting from that recovery narrative going into 2024. the gas story remains relative and the opportunity to have some of that extreme negativity over the past few weeks, where trading above parity right now. tom: let me switch focus to the pound of .4%. would you envision that the pound would be at these levels at this stage? still digesting the negative

impact of the autumn statement and the leaders in the u.k. still looking vulnerable. jeremy: david ran soon made comments that the u.k.'s credibility has been compromised. it is just over two months ago that we have that rather spectacular many budgeted from the previous government regime. we have been producing that government insufficiency and we have been seeing short positions covered significantly. we still have bank of england predicated on tightening. i think the topside risk with u.k. rates is still lower than what surprised by the market. as we get closer to the moving to day moving average at the

1.22 average that would mark this current uptrend. as long as we respect that moving average, we might see a reduction attempt as we move into that territory. tom: also some political strife continues for the new prime minister. jeremy stretch, head of strategy without analysis on the pound, euro and where we see things with the u.s. dollar. keeping up-to-date with news from around the world. let's get the first word news. laura: daily covid infections have risen to a record high. they reported 30,000 infections on thursday. that comes from a critical moment for leaders who have to

decide whether to tolerate some spread of the virus to reverse the zero constrictions that hurt the economy. european council president charles been so will travel to beijing to meet with xi jinping he's been struggling with how to treat china. the eu's relationship has been strained with china's relationship with russia and their refusal to condemn the invasion of ukraine. the country's king chose abraham to leave the government. inflation in mexico slow down more earlier this month than experts expected. consumer prices rose from last

year. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am laura wright. tom: cointreau expects exceptional growth out of the pandemic. a 5-10 percent price increase is a good benchmark. >> obviously, i am not speaking for the short term. we hear about measures that are being taken this week which will not help in the short term. if you look at china the prospects are very positive. outcomes are easier than they

have been in the past. every time the rules against covid ease we see consumption back, a strong palpitate for our products. we had three drum days in the plaza, we hit record sales, traffic was absolutely huge. we had something like 6000 vips. now, shanghai is locking down again. they are learning from last year. we have to be flexible. >> you have these monster moments when you get the reopening. mow wet, they're running out of champagne. do you have enough stock? are you carrying extra stock. are you wrapping up preparedness

for the reopening? >> we are ramping up and preparing for the reopening and adapting for the environment. we only had one warehouse in china which was based in shanghai and it was on lockdown. we are preparing this way from a logistics standpoint. in the u.s., we are booming. we are now in the process of recovering a good level of stock even though our stock is low in china. we are now improving in the u.s.. sorry, please. >> it's a beautiful premier product, it's already moderately expensive to have.

do you squeeze it, do you raise prices given the restrictive supply and the issues around that? what is tolerable for your average client? do you raise prices 5%, 10%? >> between 5-10% 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, price is driven by pricing power which comes through the quality of the product, the quality of the experience you can propose to your clients. tom: and that was the ceo of cointreau, the cognac maker. futures in the u.s. pointing to

the upside, up .4%. we are into brussels where they have hit a roadblock on a climate deal. we will get with lisa taddeo on the ground. this is bloomberg. ♪

tom: welcome back to bloomberg markets. i spoke with the ceo take a listen. >> they are more than willing and that's one of the reasons why we decided to put some of the assets on sale.

we think this is a good moment for gas assets. this was a decision that we took in light of what gases value is today. which shortly before this interview, we wanted to underline the importance of that. we will focus our presence in all countries, help our customers during this journey of the best as possible. it will be sold to buy assets. we see very little risk on the execution side. five of 21 units of already been executed. >> the rationale is to service your clients that invested in the limited amount of countries

that you'll be more invested in? >> we have six core countries spain, usa, brazil, chile, colombia. governments are really committed to decarbonizing the economy and we have masses of customers that are going through this huge change. that's where most of our technology and know-how lies and that's where we want to focus our efforts. elsewhere, there is value for investors. but we will streamline our investments. >> there is a big focus on the u.s. and the inflation reduction act is a big part of that. detail for us year ambitions in

the u.s. market? you have the license, what is the end goal in the u.s.? >> the growth space in the u.s. is very large. with the ira, we have of a larger horizon in which to plan our efforts. there is very strong growth on the generation side with renewables. with growth on the business customer base, we see that starting with the license. we want to be a retailer on the business side and that is a promising growth area for the u.s.. not a regulatory business but a customer business coupled with our generation.

don't forget, we are the first largest on response, so we have large presence in that interesting market. tom: the ceo of one of the largest energy companies in the world. that's as diplomats try to resolve a deep split over a push to cap the cost of gas. we are joined from brussels by maria today. speaking to people and those involved. maria, what is the state of play there? is it disastrous? where are the gaps, where are the divisions? maria: i would best describe this as this is typical brussels. nothing has agreed until

everything is agreed. you find yourself in a situation where energy ministers have not fully rejected the package but they cannot fully endorse it either so it is now on hold until december 13. they will reconvene again and brussels. the sticking point, those who want to see the price cap, this is not a real price cap. some people say this is a bad joke, this is a mockery. on the flipside, i spoke to the dutch energy minister and said the more this debate drags on it is more obvious that a price cap is a flawed concept and it could

create serious disruptions in the supply market for europe especially at a time when it is already running very tight and expensive. tom: do these divisions play into vladimir putin's hand was out of her reading it? maria: to some extent, until now european union has been able to agree with every sanctions package with unanimity. diplomats say overall they agree with the padgett except for this one key point. you either approve everything or reject everything. i have lost count of the amount of ministers meetings i've seen. we know there will be a cold snap. heating season has already started. for a lot of countries you feel

pressure and home bills. this is december 13 right before the ecb hikes rates. what can they do in a space of a week that they have not been able to accomplish in three months? tom: so the clock is ticking on that front. there is the oil question in the g7 attempt to put a price they. any progress? maria: european officials will have to debate. this will be a late discussion and you have to factor the time difference between continental europe and the united states. they would want to check with their u.s. counterpoints. the sticking point is that price point. ideas have been anywhere between 65-70 dollars per barrel.

they still feel this is way too generous for russia and we have to go back to basics. the idea of a cap is to deprive vladimir putin. is russia going to end the war quicker because of a 65 dollar oil cap? for many, this is not an energy question this is political. we are being told of potentially a deal in reads today. tom: thank you very much indeed. that does it for this hour. i am tom mackenzie. we will leave you with live pictures from the macy's thanksgiving parade. look at that, only the u.s. does this doesn't the swell. this is bloomberg. ♪

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guy: u.s. markets are closed for thanksgiving but here are the top market stories around the world this hour. -- released $1 million for his industry rescue fund. xiao also indicated he would make another bid for voyager.

the fed points to a rate hike slowdown and the bank of england says it will raise rates regardless of the pain, but in sweden, another 75 basis point hike. china's covid cases hit a record high, putting into doubt any exit from strict pandemic curbs. welcome. happy thanksgiving if you are in the u.s. we are still reacting to the moves we saw yesterday from the fed. equities getting a boost, confirming that we are going to see a slower pace of rate hikes. we knew this. the signal was clear. we are moving to a 50 point basis increase month. this did not come as much of a surprise to me. should it have? >> we have had quite a bit of

tightening in terms of rate hikes this year. take a quiddity out of the market. markets have been anticipating for some time this so-called pivot for at least a peak in rates. guy: is this the beginning of the pivot? is it the starting of that process? ella: we would probably steer away from calling it a pivot. guy: pre-pivot. ella: 5% peak in rates for the fed. difficult to argue with that given that we have a persistent drop in inflation and that is likely to continue, but beyond that, there is little variability. it takes a lot longer to bring inflation back to the mean once we have hit these types of levels. for that, we are a bit more conservative whether this is really a peak in rates, but for

the next two quarters, it might be. guy: but for the risk influenced to the upside, if we -- how much beyond that could we have to go? ella: 6% as possible. we are not necessarily calling for that. the past month, we have been adding some exposure to the u.s. it is one of the more attractive markets. beyond that, risks are skewed to the upside and become more symmetrical once we get to 3.5% on u.s. five year yields. guy: how are you factoring the dollar into that thinking? it has been easy to move money into the u.s. you have picked up on the increase in currency. has the dollar he? ella: we are not in the camp that it has peaked. relative to other central banks, the fed has been far more adamant to fight inflation.

that fight is far from over. with that in mind, it underpins the dollar on a medium-term basis. also, there are risks in the system that we have yet to see. we have seen a few so far, but there are still potentially other risks in the pipeline, which would underpin the dollar. for global portfolio managers, he dollar has a crucial role to play. guy: let's talk about those risks. our day known unknowns -- are they known unknowns? do we know what they look like? the enclosure of ftx is one you have been referring to. we may be starting to see some of these the quiddity issues emerging and they can quickly but are there other areas you are looking at? ella: private assets is

potentially one of those areas. in has been quite a bit of growth in more than a decade. that is a potential area where you look at the private equity index and that is already showing a 56% decline. those are potential areas. we saw what happened with the guilt. that is potentially another area. real estate, so many that you can pick, but it is what we see. we tend to see where the bodies lie. guy: let's think about what we are doing as asset allocators. how are you thinking about the world right now? what i am increasingly caring is that people have been in cash but are starting to think about been back into treasuries and back into government bonds more broadly.

then they are thinking, you might want to get into credit? is that the next place to go? how are you thinking about how you are going to think about that asset allocation and decision making process? ella: that is something we have been doing. i mentioned to treasuries. they look interesting. that is probably the case with a lot of our counterparts in the market. guy: short or long? ella: long. small long-duration is probably a good place to start. and on the longer end of the curve because we still have to navigate the risk between growth and inflation. europe is less attractive to us, but it might be looking a bit more interesting in the credit space. the european central bank might take more risks with inflation, which would typically favor that

credit space, so that is one area where we start covering our shorts. u.s. ag looks more tricky because of the risks we mentioned on the inflationary side. but the framework we are using is this real rates framework. look for markets where there is more credibility from a central banking perspective but also more positive real rates. there are not many, but you get some. we mentioned the u.s.. korea is interesting. also in terms of emerging markets, you have brazil, mexico, south africa where you get positive real yields. something else we are doing on the asset location side is looking where there is high sensitivity to the real estate market in general, so places like scandinavia, canada, there markets on a relative basis have been a great space because there

are risks coming from repricing rates. guy: let's look at the idea that would use sequence into european ig before you would sequence into u.s. ag? and why? i have heard this before. europe at the beginning of next year, the u.s. is -- on the back half of next year. is that right? ella: we have favored the u.s. on the credibility front. however, what we are seeing now is that this environment where more inflation is tolerable -- it is probably quite attractive of not just credit markets but the periphery. italy has traded much tighter and spread to bonds because it does like this type of environment where perhaps growth is not necessarily falling off a cliff in europe, but also a bit more inflation. if you are running high gdp, that is not terrible in the short term. guy: could be more tricky. stick with us.

we will migrate more into what is happening in europe. pmi data out of europe today points to a shallow recession. then you have got other data confirming that as well. we have also got a thing about with the bank of england is doing. the head talking earlier. we will watch his conference calling for a 75 basis point hike in december, even if that causes pain. we will talk about this debate next. this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster.

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the u.k. in particular. inflation is running at just

over 11%. the central bank must continue to raise rates, even if it means hardship for households. this event has been taking place today. joining us is kristine aquino. the bank of england has tried to sound like it wants to do less. it has tried to sound like it was to be cautious, but inflation in the u.k. looks sticky. that is the result of which may be the bank is going to have to bank be aggressive. kristine: that is their dilemma. it is still up in the air whether they will go that route, aggressively going after inflation, when they are aware and have told us that there will be a recession. it is inevitable at this point. this is a very difficult

situation, particularly in the u.k. more than other central banks. that runaway inflation, but also the nearly guaranteed recession. guy: the bank does a number of weird things, one of which is based forecast on what the market is signaling. it has tried over the last few weeks to talk to me market back from the aggressive pricing that had been put in, but given the data and given what we hear from ramsden, the banker could have been right all along. kristine: definitely a valid question to ask. we sought markets -- saw markets that they did heed the message that perhaps rates may not need to be as high as markets currently expect, but that is just one input for the markets. they are also looking at

economic data. like most accounts, we are still seeing signs that inflation is here to stay. it is going to be sticky and might be a big task for the bank of england to bring it down. it might be a chicken or egg situation over the next couple of weeks where markets start diluting that message. governor bank the next bailey and the bank being in a few weeks ago to start realizing that maybe the bank might have two do more. guy: absolutely. chris williamson was certainly indicating that inflation in the u.k. looks much more sticky. let's talk briefly about the pound. i cannot quite believe my eyes. 1.2122. it was not that long ago that we were talking about parity against the dollar. does that help the bank of england here.

-- does that help the bank of england here? energy is priced in dollars. kristine: absolutely. the weaker currency had certainly played a part as to why inflation was such a problem, especially over the summer. econ 11 tells you that a stronger currency is helpful in the inflation fight. this is a development that the bank of england is probably happier about commencing the pound at these levels. it depends on how sustainable it is from here. what we are seeing in the markets, particularly this week, is not necessarily u.k. specific. it has more to do with the weaker dollar. how sustainable it is going to be at these levels is yet to be seen. guy: thank you. kristine aquino on what is happening in the u.k. let's talk about europe with

ella. i am stunned to see the pound at 1.21. is this sustainable? you are a u.k. based investor. should you be going out there, using that stronger pound? ella: i am happy as a u.k. resident. higher is better for us. what concerns us about the pound is exactly what has concerned us for the last three years. it is the structural growth story, which is not a great one and it has not been fixed. it requires reforms. we are far from that. we are headed to that now, much stickier inflation. again, back to those real rates ideology, you are probably getting robbed as 8:00 p.m. in terms of nominal yields in -- sa p -- as a pm in terms of nominal

yields. going forward, it is a dollar paul. you know my thoughts on that. we are still not out of the woods in terms of the dollar. we will probably be more bearish. not supported by the fact that the bank of england is probably the shyest of the major central banks in terms of lifting rates in the face of inflation. guy: the sense of the bank has been that the market is wrong. we will not be going that far. there is a recession coming. we will not have to go as high as what was price. is the danger that they do? ella: the danger is that they are risking too much. that has been the case for some time, pre-this whole budget fiasco. we would argue that potentially they will have to being be doing more. they may get some cover from a potential recession in the next two quarters, but beyond that,

we think inflation is still the dominant theme. i think that will fail to support u.k. assets. guy: in the eurozone has been positive. it is a relative starting point. last bad. today -- the pmi's yesterday point to a shallower recession. however, i do not know what is going to happen in europe this winter and what the weather is going to be like. but the data at the moment look more positive. what does that mean in terms of policy and in terms of how you allocate assets? ella: it might be interesting for the euro. the euro might be a bit of a different story next year if the recession is more shallow. it should be supportive of the currency. the ecb is withdrawing liquidity and that should support the euro to some extent.

evaluations support the euro. there is bearish sentiment and there could be something there. it is still early to tentatively try that story, but it potentially can shift and that would help the ecb with inflation. in terms of policy pertinence, a better backdrop on growth would give the ecb less comfort to be slower in terms of taking rates. you could get potentially higher rates in europe and that is the risk that probably supports a more bearish you. -- view. guy: good news is bad news? ella: you can say so. guy: how high will be easy bigo? ella: i think they do not go. is it to percent, 3%, should it higher? they just take a step back and say they will probably go less than necessary because of the weaknesses in the system. it is the periphery and the debt

load of periphery countries. with that in mind, we think they will be able to tolerate more inflation. you will raise that by doing that. guy: let's talk about equities. we have not touched them much thus far. they seem to be the first on people's minds in terms of whether they want to allocate assets. if europe has any good news, if the recession is less bad, if we winter is less bad, how much of a cold spring is there for money to go back into european assets? they have been significantly weed. ella: when you look at european indices, a large component is banks. if you are coming from a very low base, the only way can be a. as i was saying earlier, allocations to european assets are bearish. you can see that in the vanke

american survey. there is some room to go if you get somebody from from your euros moving up -- some buffer from your euros moving up. but i would say it is probably more tactical to make a structural argument as to why equities should outperform. it is tougher, but you were asking about bond p.m.. guy: bond managers seem super happy at the moment. they seem to be that turn but elsie seems more pessimistic, but i am wondering if there is an opportunity in europe? it is so beaten up. you guys have had a tough time over the last 10 years in the bond world. equities have had a short timeframe, but maybe we do start to get that opportunity. nice to see you. thank you for joining us.

in the next hour, more insight on central bank policy. the riksbank governor, who is stepping down, the swedish central bank delivering another 75 basis point hike.

guy: 23 minutes past the hour and time for a business flash. let's start with amazon warehouse workers in 40 countries protesting and walking out on black friday, demanding better wages and working conditions. amazon says it takes its role seriously on these important matters. when twitter is facing increasing regulatory scrutiny, it has lost its last remaining employees in brussels.

the small office was cut to two in recent weeks following the dramatic cutting of staff. the remaining members left over the last week. it will be interesting to see how regulators respond. the other big story is the collapse of ftx. in an exclusive interview by the ceo, he told bloomberg about what the company has discovered and what they saw when they looked into ftx's books. >> we knew quickly there was a lot of funds missing, double digits. i cannot test any information in the data room. i cannot test any of the information, so i do not believe any of the information we got was precise. were accurate. that made the process more difficult, but we do not have full access to the ftx books or

their credit history. we do not have that. it was a supposed -- the simple snapshot. >> genesis says it is likely to -- if it cannot get dollars in fresh capital. are you interested in bidding for it? >> i to not want to comment on the specifics. i think we have -- in place with almost every player in the business, but genesis has liquidity issues. i believe our team is engaged with it. i do not know of the specific details, but there are different numbers floating publicly and different numbers we get through direct private channels. one of the tricky parts in this industry is whenever you talk about the u.s. dollar, the number changes every minute. our team is engaged, but we are

not sure -- i am not sure right now to what extent we will or will not do certain things. i do not know the details. >> there is a lack of confidence in crypto right now. can the industry survive if genesis were to go bust? >> the industry will have no issues. there will be pain, but genesis probably has less than $2 million on their books. million on their books. innovation refunds could qualify it for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to find out. then work with highly qualified professionals to fill out your forms and submit the application. go to innovationrefunds.com to learn more.

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gas prices does not satisfy any single country. -- after so many months of discussion and proposals. >> the proposal on the table e

market, unless it is really necessary. guy: eu officials talking about the debate surrounding the gas price cap currently being debated in brussels. officials have agreed to postpone approval of a package to deal with the gas crisis. nobody can agree on what the objective is and the best way of dealing with it. this whole idea about a price cap on the gas price does seem

to be fading. the head of european gas joins us now. what is your best read the situation? james: going into this meeting, you had divergent positions from european countries. poland, greece spain were pushing for low caps. given the supply and demand we are seeing, it is wishful thinking. then you had others who were looking to eliminate price spikes and that was more the position of germany and the commission itself, where they have said we wanted to put a safety sailing on it so we did not get a run-up like in august, but high prices are still necessary to diminish demand and ensure security supply. guy: art we now in the position where those that are debating this price cap have realized the

impact of their policy? there does not seem to beat much input from the market from people who supply gas, but i am wondering whether or not expectation and reality are now collating? james: that is a good point. the commission itself, when it put forward its proposal, said that the ability to conduct a lot of required consultations with the market have not had enough time to even their course. a lot of people in the trading community do not seek these proposals being sensible. the best case we have is a cap that is high, because if we do get meaningful intervention, you are risking what is a well traded drifters market, which there are billions of euros at stake here. you are also risking security supply. you are worsening the crisis going forward. from the trading side of things, people do not want the price capping.

guy: if we are not getting a price cap, what other options are there and -- there? james: we need a structural issue with the european market. we have lost 30% of european oil supply in a year and we have not had the demand destruction necessary to counteract that. all we can do in the short-term is work on that demand side of the story. in july, when the commission first went to the market and said can each of these countries come up with their own proposals for reducing demand by 50%, a lot of the countries promoting a price caps and we will not reduce demand by that much. that realistically is the only solution in the short term. they have done a good job of letting prices do the work to eliminate demand, but if governments had stepped in more actively, we probably would not

be looking at such dire consequences for industries that we have been seeing this year with huge returns in steel and metals. it is more about shifting demand destruction into households, where it is less economically damaging and coming up with the right incentives to do that. we have seen some encouraging proposals put forward by germany and the netherlands where you can get a certain amount of supply guaranteed at a low price, but if you start to ramp up, you start to pay more for that. guy: what are the other ways? this is an interesting conversation with european officials. one other way to cap prices would beat longer-term contracts. if you talk to suppliers of longer-term contracts, they talk about the fact that they are willing and able to supply gas to europe significantly lower prices, but it needs to be on a longer-term basis. how far are we from europe

admitting it needs some plus year deals, probably longer, and that would cap the price? james: you can always go back and negotiate a lot of contracts. some got in taxed to you -- got indexed to smart prices years ago. you can lower best prices for existing contracts and would not get that much pushback even where we have gone. in terms of new contracts, your waiting for that next big supply wave to come online in the middle of the decade. the trouble is when you are looking at 2025, most lng contracts, signed with asia now, we have seen some go for 20 years. this is attractive to them -- to a developer but that is a problem when europe is trying to eliminate gas. you have net zero targets. this is the friction we are facing. if your supplies are easier than qatari, if you do not need it in

europe in 10 or 15 years, you can sell it back to asia. guy: in terms of where we are now with the weather, this is the big swing factor over the next few weeks or month, we have had a mild often. what is the expectation now? i am sure you see weather forecast. is the expectation that europe is going to be ok with current supplies this winter coming given what we are projected to see in terms of temperatures? james: we have been very lucky. with that has done is it has left huge amounts of gas in storage throughout october and into november. we have also had a lot of lng cargoes parked outside of europe, which effectively floated delivery into december and january. we are looking good for this winter. you take a lot of cold weather, 10% colder in europe and asia, to certain move the dial and get us down likely scenario in 2017.

mostly, for this winter, we are looking comfortable. the dilemma is a next year in terms of having so little russian gas on an annual basis and having to refuel -- refill storage for the winter. guy: germany is going to put these floating plants in current are those facilities now in place? james: we are expecting three recast terminals to be signing up in germany over the start of december through january. that is going to have a lot of capacity. this is in addition to the terminal which is starting up around year end. we had capacity in the netherlands. europe is slowly but surely building up the capacity to push gas into the places most deprived of the russian supply.

this is an infrastructure bottleneck which has been driving huge stress within the european market and these huge spreads between high prices of the etf and delivery of lng to europe. this is caused confusion in the market about why lng prices are so much lower. it is mainly because of the infrastructure bottleneck in getting lng into the pipeline. this should be released mostly by next year. guy: great to update you. -- great to catch up with you. coming up, more on the energy meeting in brussels. estonia's minister of economic affairs will be joining us next. this is bloomberg.

guy: let's keep you up-to-date. in china, covid infections have risen to a record high. the country reported almost 30,000 new infections on wednesday. this comes at a critical moment for leaders in china, who have to decide whether to tolerate sons friend or revert to covid zero restrictions. that could hurt the economy. in ukraine, a berridge of rawson -- russian missiles have knocked out power at a time when temperatures are below freezing. in a virtual appearance before the un security council, zelenskyy called the assault a clear crime against humanity. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries.

this is bloomberg markets. i want to take you to brussels, where a huge debate is taking place, about energy and how europe needs to protect itself from energy space. let's get over to maria tadeo at the e.u. energy meeting in brussels. maria: but as polite way to put it. this has been an intense day. i am happy to state we are joined by estonia's ministers for economic affairs, riina sikkut, who joins us from the meeting. there will be another meeting december 13. some suggest this is turning into a farce. others say this is the way brussels works, nothing is agreed until everything is a great. ms. sikkut: it was an intense meeting, but i would never call it a farce. we had a political agreement on

solidarity measures. for example, joint purchases, very important to prepare for next enter. and also for permitting renewables, extremely important in the longer-term. we need local, affordable energy with a small ecological footprint and this is the only way to achieve it. a quick permitting process, we need the pan-european measure. it cannot be national. the agreement was there, but the controversial issue of the gas price cap, positions are diverse. it is difficult to find a, as in two weeks, but i believe we can do it. maria: 10 simple yes or no terms, would you want to see this price cap? ms. sikkut: it is the general impression that we need to do something to tackle the high or extreme price hikes. a price cap would be ok on the

level of 275, but in general, the estonian position has been that the security of supply is parent armed -- paramount. if needed, we have to pay higher prices. maria: so supply matters over the price cap. but some of your colleagues are saying no. either there is a price cap the works or they not agreeing to the rest of the package that you say is just as important. ms. sikkut: we cannot achieve a low daily price for domestic consumers, industries that affect monthly bills through a price cap. a price cap has to tackle extreme hikes, but if we want to have an effect on monthly bills, it benefits other solutions. maria: the idea of the gas, there is another cap, but what would you say to some who argued the commission is biased in favor of germany and that is why

they have set out this arterial? there's why they have created a catholic would be triggered. ms. sikkut: i am not that objective. i am close to germany's position, but what we need is compromise. if we agree in some kind of price cap that does not need security supply, is very strong message for the markets in terms of decarbonizing yes in general, coming off fossil gases in 10 years, we should be able to send this kind of signal as well. maria: by december 13, if i asked you will there be a deal yes or no, what is your bet? ms. sikkut: estonia is working to achieve and compromise. it is paramount -- unity is paramount. we cannot let russia divide us. maria: and on russian oil, there has been this idea that it could be capped between $65 a barrel to $70.

reports suggest the baltics, your country and the polls are blocking this. they say this is too much. will there be a deal at $65 a barrel? ms. sikkut: the only thing connecting the price cap we just discussed and the oil price cap is the term price cap. otherwise, the issues are completely different. the oil price cap should be as those possible. we are discussing only russian oil and we cannot finance russia's war in ukraine. the lower, the better. maria: you are saying $65 for you is unacceptable. it has to bingo lord. what price would you agree to? ms. sikkut: estonia still thinks that unity is most important. if unity cannot be achieved at $65, we might be able to compromise, but we have to bring try harder. we have to try agreeing on a

lower level. some have offered $30 per barrel. maybe something between dirty dollars. -- between $30 and $65. maria: that is a big range. ms. sikkut: it is. we are not fixed on a specific number but rather the low-priced. maria: some say ultimately this changes nothing. if you guys agree to that range, this changes nothing and russia is fighting a political war. vladimir putin has a political agenda and he will continue. ms. sikkut: there is no economic or diplomatic solution. ukraine needs to win and we have to provide that ammunition. everything else will only support ukraine's win. maria: can i ask about the situation in ukraine? this is dramatic. the weather is getting cold and energy infrastructure has been

stored in massive ways. we hear people who have no water, no electricity. how can you help ukraine deal with this winter that looks incredibly complicated? ms. sikkut: we had at the beginning of the energy council intervention from hermann hirsch and, energy minister of ukraine, who described the situation and over the last couple of days. this puts everything in a different perspective. we are discussing a gas price cap. this and a solidarity measure is the most important thing. the challenge ukraine cases is something we cannot imagine. we need to provide the equipment to restore their heating and electricity systems as much as possible to support and help ukrainians to survive the winter. maria: some believe a cold winter will break the ukrainian people. will that happen? or will they continue to fight?

ms. sikkut: it will not break the ukrainian spirit. we have to have them survive the winter by providing electricity and heat and the equipment they need to restart their systems. maria: thank you for joining us. we appreciate your time and we will see you on december 13. guy, no breakthrough today on gas. we are waiting on oil. guy: it is going to be a tricky one to solve. some big spreads, fantastic interview. thank you. that was estonia's economics affairs minister. coming up, twitter has lost its entire brussels office. we look at how that will affect its dealings with european regulars. that conversation next. this is bloomberg.

guy: welcome back. happy thanksgiving. back to twitter -- it has lost its entire brussels office. it was not big to start with, but it had been key in engaging with european regulators. it only had six people, was cut to two and they have now left. the regulars in brussels, what more are they signaling that they had issues with twitter. i am assuming is only going to exacerbate matters? >> even when elon musk was saying he wanted to buy twitter, we thought interesting interplay between the europeans warning him saying, you come start this free speech approach to printer, but you have two follow the rules. one of the rules was the digital services act. in this legislation, it gives

brussels the unprecedented power to tell the tech companies that they have to take down illegal content and they have to do more to handle harmful content. guy: is it just brussels that has a problem with this? are other european capitals concerned? it does seem that twitter is losing significant numbers when it comes to the safety side of the platform. jillian: the digital services act is coming up. we have people in brussels who are concerned, but they also have to comply with rules already on the books and that includes data protection rules, gdpr. they have an office in ireland and we saw a big x this from there. one of the most noteworthy people living with a data protection officer. this prompted a watch doctor stating what is going on with ireland? are you still going to comply with the gdpr? twitter has said we have another

person in their place and we will be able to follow that. muska is aware of the rules, but the question is if he has enough staff to comply. guy: what if he does not? what are the penalties that could be imposed? jillian: twitter has already run into issues with gdpr. two years ago, they refined millions. in the digital services case, those fines were even more. if companies like twitter continue to offend the rules and break them, they could also be in -- be banned. we could see regulators coming in and rating their offices in san francisco to make sure they are doing what they say they are doing. we could see some big fights. guy: looks like it is just getting started. thank you for updating us. coming up, we speak to the

riksbank governor. he is stepping down but deliver today a 75 basis point hike. looking forward to that. stateside, it is thanksgiving and the parade in new york is underway. we are back in business. the weather looks amazing. this is bloomberg. ♪

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with alix steel and guy johnson. ♪ guy: u.s. markets are closed for thanksgiving. alix steel is cooking turkey. we look forward to hearing reports of that. big day shopping tomorrow coming up, but we are still here and we

have got some top market stories. -- will a mouse -- a $1 million for his industry rescue funds. the fed is pointing to rate hike slowdown. in sweden, riksbank five basis point hike. we'll hear from stefan ingves shortly. china's covid cases hit a record high, the news calling into doubt any relief from strict pandemic curves. alix steel has the day off. it is thanksgiving in the u.s. that means light volumes across the world with the u.s. markets out. stocks in europe and asia up on the latest signals from the fed. what they signaled was -- that

lael brainard is in the ascendancy. we are certainly migrating towards the 50 basis point hike. that seems firm. markets already knew this, but confirmation is always well received. risk assets responding appropriately. we have also seen the dollar coming down is a result. you've got the japanese yen up by 1%, the british pound now at 1.2143. european markets more broadly trading positively on the equity front. joining us now is kristine aquino. there was not that much a basic surprise in anything i read. we are migrating to a 50 basis point world. the last press conference had already signaled that. kristine: yes, but there is something to be said about seeing it on paper and getting confirmation. we did get a whiff of that at

the november meeting, but now we are getting the reinforcement that markets were looking for in terms of strengthening this idea of a recalibration in that policy heading into 2020 three. there are a couple of nuances that were interesting. their description of adverse policymakers seeing the he -- seeing the he is higher than expected. you do not normally see that. that is when the fed is wanting to introduce more ambiguity. also, the recognition of recession risks. on paper, a 50-50 chance makes an impact. guy: the terminal rate may ultimately have to be higher. the fed has -- is no longer unified in the approach. kristine: really, that tells us that 2023 is not going to be one way. train .2 was clear for investors. it was a year where you bet on

the dollar and on yields going higher and stocks weakening, but 2023, there will be more divergences and nuances, especially as there is more ambiguity in terms of where individual numbers stand. guy: do you think the bulk of that has moved slightly? i am wondering where the center of gravity is right now? kristine: we know who to be watching for, js bullard, a key bellwether fed sentiment, but what we have heard recently, the overarching message remains clear. they want to keep raising rates, want to hit key crates -- peak rates but the means in which they get there differ slightly. there seems to be more of a shift among certain members were perhaps they not need to get to that as soon as previously thought. maybe they can go at a slower

pace. that is enough to tear markets desk your markets. guy: has the buck stopped? kristine: the buck has paused. those what we know for sure. it is not enough what we have seen in terms of the dollar pulled to completely erase gains. it can still fairly be called king dollar at the end of 2022, but it does seem that it was primed for a bit of a slowdown. there is also positioning in the dollar itself. it has become a bit of a one-way bid, especially as it has steamrolled every other currency this year. it seemed like all those things combined made for a good pause. guy: what does it mean for other central banks and if the fed is going to downshift to 50 basis point thanks, potentially 25 year, what does that mean for the ecb and the bank of england? kristine: it might give them room to catch up.

there's part of the issue when it comes to that divergence between the diwali or -- between the dollar and other currencies was the fact that every else was trying to catch up to the fed. they were way ahead of everyone in terms of getting rate hikes deployed, that it could also be a signal to other central banks -- the bank of england potentially saying maybe they are not going to be doing as much as markets expect. it affirms that sort of view. whether that actually does solve the problem of inflation specifically in the u.k. is another question. guy: language seems to becoming more hawkish from the bank. dave ramsden speaking earlier, indicating he felt that the bank needed to be more aggressive. the communication from the bank of england seems at the moment. the idea was that the bank is going to steer us away from the extreme market views of where it rates could ultimately go, but

we are seeing data that suggests that inflation is going to be more sticky. do they have to go further? kristine: that is very much a possibility, but as you alluded to, at this point, investors are used to being the bank of england saying one thing and eventually having to backtrack. but definitely watch this space. depending on heavy the data plays out and how much markets heed the bank of england's previous message, there is room for things to shakeup. guy: thank you. as we have already said, we are going to stick with the central bank dema. coming up, stefan ingves, his final meeting today delivering a 75 basis point hike. we speak to him next. this is bloomberg. ♪

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just tell us - what's your why? guy: sweden's riksbank raised its benchmark interest rate by 75 basis points and signaled what is needed to attain inflation. that brings the key rate to 2.5%, the highest since 2008. governor stefan ingves joins us now. 70 five basis points was the hike you delivered today. without an easy decision? stefan: it was not all that difficult. on the one hand, only five basis points is a lot compared to what we normally do, but if we look at the numbers and underlying inflation and the way we saw it

in september compared to now, inflation is actually higher. that meant that it was reasonable in our being -- in our view to raise the rate. guy: you have signaled as well, and i can understand why, that there will be further rate hikes. how should investors be thinking about those how far are you going to have to go if inflation remains sticky? gov. ingves: first, we expect inflation to come down quite quickly next year. the same time, we need to do more, but it is also incredibly hard to pass judgment on two or three years out. that is why this time, we chose a policy rate path that is flat. that does not mean that the policy rate will state that way for three years. it is more to indicate that there is a lot of uncertainty

out there. if inflation goes up and were -- and we were to be wrong, rates would have to go up more. guy: in terms of past hikes that you have delivered, how are you thinking about the cumulative effect that they are having? gov. ingves: first, it makes sense on our side to be on the server-side compared to what we have done in the past. the policy rate has gone up by 2.5% in seven months. that is quite a lot. a bit sore would be fine, because then we can see -- a bit slower would be fine, because then we can see what happens in the economy as a whole and to what extent we have -- what we have done takes hold. if you look at our projections, we assume that the swedish economy will shrink next year and also consumption will be

affected and will fall, which is not all that surprising when people have a lot of debt, because you have to pay on your mortgages and with inflation being way, way too high, that also reduces your real income. guy: your friend to the effects that are -- you have run through the effects that are clearly seen by mortgages. have you been surprised at how quickly the housing market has more overt? gov. ingves: not really. we have argued that gas prices will go down about 20%. whether we are right or not, time will tell, but so far, i think our projections have been recently ok. we have for a long time said that there will be a day when rates go up. be mindful of that also in the environment when the word zero. we've gotten to that point and

that will be felt. it will be felt by many. guy: what i am hearing is that you are comfortable with the moves we have seen thus far. what would make you uncomfortable? gov. ingves: one thing that would really make us uncomfortable is if inflation does not come down the way we expect it to come down next year. we back in the monetary policy report, we have an alternative scenario that shows what happens if inflation does not fault the way we expect it to fall. then the policy rate would go up higher. guy: more specifically, within the housing market, is there anything there that would make you uncomfortable? what is the worst case scenario? would that be something you would be uncomfortable with? how far can the housing market fall before you get worried?

gov. ingves: that is hard to say. important point is that with the credit market looks like when it comes to borrowing on your house differs from country to country. in our legal framework, people mostly due to quite a lot when it comes to paying your mortgage. the first round effect would not be the housing market as such, despite the fact that prices are falling. it would be cutting back on consumption, because if you have to pay her mortgage, you will have to been consumed last in one form or the other. that would mean a more prolonged downturn than what we had projected dowels. unemployment would go up. guy: you have talked about commercial real estate market and have highlighted this as a potential stability risk. can you elaborate? as we start to see property prices in the commercial market come down, is there any systemic

effect you are watching? what are you watching and gov. ingves: -- watching? gov. ingves: we are carefully watching commercial real estate. in the early 1990's, we had an episode with prices. back then, most of it was commercial real estate. given that that is our history and what we do know -- that we do know that when things happen on the real estate side, they can happen quickly, that means one needs to keep an eye on how much leverage there is amongst commercial real estate companies. one effect that we have seen already is the bond market. it is much more expensive to issue bonds today compared to the situation a year and a half ago.

that means that essentially some of that funding is moving into the banks. i think that when she has to expect some kind of restructuring in commercial real estate over the coming year or so. as always, time goes out and there is too much leverage somewhere and you will have to pay for that. but it would not be all that bad. guy: that is not that that, but at one point we you be worried? at what point could that feedback into the monetary policy visions that you are taking change and -- change? gov. ingves: i have been in this business too long to pin down the numbers. when you get to that point, you do the best you can. we have tried on our financial stability report to go to the technical details when it comes

to looking at this. when it comes to commercial real estate, as long as the economy as a whole holds up reasonably well, it should be possible for real estate companies to manage the situation, but you would end up with a situation where a downturn last for years and years and that would be a very different environment. guy: this is your final meeting. as you look back, what lessons have you learned? we now have an inflationary problem gripping the world. did central banks apply too much stimulus during the pandemic? how much responsibility do central banks have for inflation? gov. ingves: the economic consequences of the pandemic are handled quite well. now, after the pandemic, people

have all sorts of views on what was done back then, but keep in mind that when these things happen and when these decisions were made, there was no way of knowing how long the pandemic would last. the focus was on avoiding economic consequences of the pandemic and also on ensuring that the pandemic did not turn itself into a financial crisis. all of the is well and fine, but we and many others assume things would normalize. little did we know we would end up with global supply issues and we had no idea when it comes to our projections. in hindsight, we are where we are and then we had to deal with that as best we can come about my view is that it was absolutely necessary to do what we did when we went into the

pandemic. in many different parts of the world, the economic consequences of the pandemic have been less severe compared to if we had been sitting there with our arms crossed. then when the world changes, we will have to change. that is just reality. guy: it has always been a great pleasure speaking with you. thank you for all of your time, not just today, but throughout your tenure as governor of the riksbank. it has been an honor. riksbank governor, stefan ingves . coming up, the thanksgiving travel rush is stopped. more are traveling through u.s. airports this year then before the pandemic. how consumers are managing higher prices. this is bloomberg. ♪

guy: the thanksgiving travel

rush is rock. more are traveling through u.s. airports in the preholiday period than in 2019. the roads are said to be just as busy. aaa says this year is the third busiest thing for been traveling here since 2000. here to discuss it is brian kelly, founder of the website the points k. everybody wants to get out there. they want to see friends and family, but it is expensive. how expensive it is for this year? brian: crazy expensive. we are seeing airfares about 35% year-over-year. people are having to choose when to take trips. one trend is that americans are now traveling abroad for the holidays because of the strong u.s. dollar. the appetite and demand is still there. we are seeing that with retailers quarterly reporting that people are buying less but

they are still bullish on travel. guy: what is the advice? if you're thinking i have got to travel for christmas? is it too late? brian: no, but i would book now. flights are selling out. that is what a lot of travelers are running into. book as far in advance as possible. in order to get the cheapest fare, i use google flights. it allows you to search for different airports even switching your travel by a single day can dramatically bring down the price. you can set alerts. airlines use algorithms and change fares many times a day. you have got to beat nimble and act quick when you see a good deal. guy: there are plenty of other websites. it is interesting to compare and contrast. how do i be the algorithm? this is a conversation i have with my wife.

do you use a vpn? how do you make it work? brian: the vpn thing is overblown. i would just use data. there are sites like hopper that analyze millions of fares, historical, and set alerts. i recommend to use frequent-flier miles. united just got rid of the fee to cancel your frequent flyer marrow tickets. -- frequent-flier miles tickets. book something with your miles. if you see you fair come up, cancel the miles reservation and the book at the ether. jump when you see something. guy: is it just flights? or is it everything else? brian: hotels are crazy expensive, especially as we look into 2023. school holidays, there are trips to florida that are now double, even triple the price. plus, with hotels, you're still not getting all services.

you may not get housekeeping and room service. i recommend that you know which amenities are included. a lot of hotels have bogus resort fees they charge for things that should come included. i always recommend disputing them. a lot of the time, you can message the hotel for the app and say, this is crazy. i did not even get all the perks. guy: you mentioned that people are traveling internationally. we do not celebrate thanksgiving over here. in terms of this being a good time to travel, how good is it in the u.s.? brian: it is a great time. so many of my friends are heading to europe because the u.s. dollar is at record highs against the euro. fly norse replaced norwegian airlines. there are a lot of budget tickets to europe. frantic, it is cheaper to go to europe than in most places in -- frankly, it is cheaper to go to europe than most places in the

u.s. guy: thank you. if you are still in the states, still in new york, you have the macy's thanksgiving day parade to enjoy. these are live shots from new york. the parade looks fantastic. the weather looks amazing. this is bloomberg. ♪

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guy: as we have been discussing, energy is beating -- energy leaders are meeting today to talk by the crisis in europe. they are talking about an oil price cap. let's get back to maria, who is standing by with one official who has been at the center of this debate, particularly on the gas price cap story.

maria: she has been at the center of action, the spanish energy manager deputy who is joining us on bloomberg. thank you for your time. another meeting and no breakthrough, what happens next? >> has been an interesting meeting. it was important to rebalance the pieces we need to put in place. we are talking about solidarity and a joint mechanism. we are talking about how to speed up the process for the full deployment of energysolutions, to lower our dependency on fossil fuels. there was something that was important, how it affects the market and traders. we need gas. so it was important to provide input on how we can help the traders, and the proposal of the commission for the time was not

sufficiently effective. maria: you are to the point. you call it as you see it. you said 275 euros a megawatt hour for two weeks is not a real cap. what is your proposal -- what is your problem with the proposal come which you clearly do not like? teresa: i think the commission was trying to identify the threshold, that we may create an incentive to align the current prices. and that was not an effective way to address the current energy crisis. and at the same time, it was important to send a message to traders. we are in a position to buy a little bit more expensive, to pay a little bit more than and other marketplaces in the world, but we are not going to accept gas at whatever price, as it was the case in the summer. maria: what is the price you can live with? there has been an idea about a floating cap?

teresa: i think it could be much better come in mechanism that provides a dynamic reference. so, taking into consideration the different price references, the different marketplaces, with a premium, because we want to be attractive, but not to fix a figure that may not align to the way the different gas prices flow in the different markets. maria: come december 13, what number do you want to see? what is it? teresa: i want to see a dynamic solution. maria: which could involve a range of prices. so that takes me to my other question. some argue the problem is the commission has come up with a plan that is not a price cap, they have done everything they can on this. would you say, i know this is controversial, but is there a bias for germany and those that

do not want a cap, which should be neutral to everyone? teresa: the commission cannot avoid or leave in a corner the demand of 50 member states. it's been brave, and it is important that we come to a proposal we can work on and keep this balanced approach to the different set of tools we need to deal with this difficult situation. maria: you mentioned 15 countries. you have potentially 17, yet we are not there on this price cap. there has been powerful language today, some saying this is not a serious proposal, it is a joke or a mockery. how would you describe it? teresa: it has been a very constructive discussion. it has been positive, everybody understands concerns of the others, and everybody is going to check before providing a

solution. let's understand that we need a political commitment to the three pieces of legislation, and let's try to have this conversation altogether. and i think it will work. nobody has been imposed. and -- opposed to the solution. and we understand we should take this situation as an opportunity to build a united response to this crisis. and the underlying importance of flexibility. maria: you said that this is a package that has three points, is it everything or nothing? everything has to be agreed on for it to be written in december? it's a whole unit? teresa: i do not see a perspective that could rest of this approach. everybody understands that there are concerns, enter links between the different pieces. we cannot think about this compulsory move to provide gas

to other countries, we cannot count on how prices are going to be crafted. and, of course, we need to lower our dependence on gas and fossil fuels by quick deployment of renewable energy, but the three aspects need to be combined and i am sure we will manage to get this consensus. maria: you have been vocal about the green deal, you are a supporter, but some say let's get real, the only way to end the crisis is long-duration contracts. that would clash with the green deal, but we are in an emergency, so let's do it? china did it two days ago with qatar. teresa: i have seen some at 10 years, but we need to be consistent with the crisis. that the climate emergency could mean, in case we do not respond. and i think we have serious data, we have already seen

serious effects of the climate impact, so we need to be consistent. this response is connected to a deep transpiration -- transformation of our energy system, linked to fossil fuels. maria: so do not go long-duration, no need for that, that is what you are saying? teresa: absolutely, we cannot kill our biodiversity. maria: spin, for some -- spain, for some it is a country that saw the problem before anyone else. you have your mechanism that lowers the price in iberia, is it a time for europe to listen less to the northern countries and be more open to your ideas? there is an idea that the southern europeans do not know what they are doing. do you feel validated now? teresa: we have proven -- no, i

think that the european union needs to combine its strengths. at this point, we can provide solutions we have been building along through the years. it is good to pay attention to what others do. and to create something that makes sense in the long term. the whole understanding of the energy prices was too bias on cheap gas imported from russia. this needs to be solved. but the point right now is not to identify who to blame but how we can work together. this is an important lesson that europeans have learned from the previous crisis, so i am not going to complain, but i think we need to do things in a way that does not create additional tensions to those who are in a position to accelerate the transition. so, not doing things that do not

make sense in the long term. maria: that is a reference to spain investing massively in this. do you predict the iberia mechanism that lowers and it separates the electricity price from the gas will be extended next year? secondly, do you see yourself becoming the new hub for energy? you say we're switching from east to the south? can you beat illegally -- italy and france on this? teresa: the iberia mechanism has proven to be effective. it's not as effective in our country where it could be more effective in other countries where the average price can't benefit from the lower price of renewable energy and low carbon solutions are that are more predictable and affordable. so, yes, i think it should stay, but i think it is still a question mark how it can be expanded elsewhere. for spain, it has proven to be

effective. i think it could be wise to see how we can extend the mechanism. the second question, whether we may be the new battery for europe. it's curious because we see in the new geopolitics of energy, it's not anymore only oil, gas and coal. the all geography of energy is changing. it's on land with the wind, offshore, and we try to do our best to provide solutions and to develop things that have not been ruled out, such as the storage of electricity. maria: thank you for your time. it is always interesting to see how the balance of power has changed. some of the energy hubs are changing from the east to the south. it does open an interesting conversation. guy: absolutely. that conversation encapsulated

all the challenges europe faces right now. that north-south divide is huge, but the issue of longer-term contracts, when you talk about a price cap, longer-term contracts could cap prices as well, but they have been an issue. maria, thank you very much indeed. still ahead, a contagion after the fall of ftx. finance' -- binance's ceo is weighing in. we'll have a conversation with him next. this is bloomberg. ♪

guy: keeping you up-to-date with news from around the world, here is the first word news. ukraine has restored electricity to some areas, but most of the capital and other parts of the

country are still without electricity and it is bitterly cold. this after another wave of missiles of targeted infrastructure there. and the prime minister is traveling to beijing next week. the eu has been struggling with how to treat china while the u.s. presses for a tougher approach. the eu's relationship with china has been strained by xi's ties to russia. and in the u.k., the transport secretary will meet with the labor leaders in the coming days to defuse the threat of real strikes. there were workers union has set out eight more days of stoppages, leading to christmas and the new year. the union is demanding pay hikes to keep pace with inflation. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm guy johnson. this is bloomberg. ♪

guy: let's talk about what is happening with the central banks. we heard from a governor at the top of the hour. he wants to keep raising rates in the u.k. to bring inflation down, even if that means more pain for households. >> however the consequences might be for the u.k. economy, the mpc must take steps in terms of monetary policy to achieve the 2% target sustainably in the medium-term. guy: dave ramsden talking earlier at a conference that the back of england has been holding today. i think we need to fold the fed into this as well. mark anderson is with us. ubs just released their year ahead report. talk a little bit about what is happening with central banks. the fed minutes yesterday seem

to indicate a significant downshift, going to a 50 basis points world, moving away from 75 basis points extreme hiking zone we were in. how should we think about this? are we thinking about it incorrectly? people are positioning this as the beginning of the pivot. are we advanced in our thinking if we think like that? mark: i think you are right. the move from 75 to 50 basis points has the market excited. we are more than 10% in the equity markets on this. but the q&a weeks ago told us that we need to look at no only the base of hikes, how long they will be hiking, noted in the minutes from yesterday as well,

we know there is uncertainty on how the fed will stop hiking. that will be a more important point to look at. and then the third point. i think it is premature for the markets to start celebrating. as we have learned, there will be more pain coming for the u.k. economy. guy: let's talk about your. -- europe. there's a bunch of european markets now up 20% plus off of their lows. what d'amico their rally? -- do you make of the rally? mark: but the u.k., and if we extend that into a broader european expect of -- perspective, they are trading a 9, 10, 11 times. so, that is really where we are starting to say that the worst we could imagine is starting to

happen, very different from the american market, with a very optimistic outlook. it's very cheap valuations at that are luring the investors back in. guy: do you think we will get back down to the lows? mark: i think we are low in terms of valuation levels as we look at multiples, nine, 1011 times earning that they are trading around europe. what's not in the price is the downturn we will see on the earnings front. if you focus on the major markets, we are ahead of expectations, when it comes to mid single digits upside into 2023. as we look at a recession in europe from our perspective, but in the u.s. as well, with prices on the rise with interest rates moving up, borrowing costs are higher, commodity prices are high.

margins will be under pressure. and we want to look at more defensive sectors around health care, the value around energy, and the like, where we see upsides in markets. guy: so there is upside there, but more broadly with equities, are they the right place to be? i have heard people stress the idea that the sequence you want to think about if you are in cash right now, move out of cash into treasuries. you then move potentially into ig credit, the top end, before you think about putting money back to work in equities. is that right? mark: we have bond yields now competing with the return of equities. in the u.s., you are looking at 5% yields. it's attractive. it is something we haven't allocation to with our wealth management clients.

if you compared to long-term returns, and u.s. equities for example, that is probably around seven or eight. not very attractive compared to the headwinds we are moving into. we think if we were jesse a recession now in places like the u.s., which is what we are forecasting, a shallow recession, but if we saw that we would expect to see -- slowing down. the s&p 500 we can see it on the 3700 before the end of the year 2023. if we are looking at the u.s. investment grade, the long-duration, it's a relatively safe yield we can bang in at this point. guy: we have a liquidity crisis ripping through the crypto world right now, are we going to see similar crises elsewhere, like in private assets, real estate? i was talking to the governor of the riksbank, he was

highlighting the fact we will see a repricing of the commercial real estate market in his country. how many more these kinds of liquidity events do you think we will see? mark: we saw a lot of the risk in crypto that we probably would not have expected in another year, with broader markets under pressure but the next shoe to drop will be around real estate. so, i agree. you mentioned commercial real estate, i certainly think for those countries, like sweden, where they are linked to short-term interest rates, we will see negativity. other countries as well that have a tendency for short-term rate mortgages, like the u.k., canada, australia -- that will have negative ramifications for real estate prices, but also for consumption, you'll see negative spillovers, as we heard on your

show earlier on. guy: great to catch up. we appreciate your time. the ubs cohead of global asset allocation. plenty more to come. we need to talk about the crypto world in more detail. that's to come. this is bloomberg. ♪

guy: today is thanksgiving. the u.s. is closed. volume is epically light. you can see that this afternoon in europe. i am not sure how good the price signals we are getting today are useful. equities are on the front foot. we are up by half of a percent. every single sector in positive territory. and we have the most rate

sensitive sectors doing the best. real estate is having a good day. this on the back of the fed minutes we saw yesterday, the downshift to a 50 basis points world well-received. utilities are doing well. but we have weakness with a 121 handle, up by 7/10 of 1%. big gains for the yen and euro. the 10 year, we have a bid on the german tenure. and some pmi numbers being confirmed from yesterday, basically suggesting that the downturn we are going to see in europe in the winter could be shallower than anticipated. the commodity market. brent continues to soften. watch that.

watch what is coming out of brussels on the price cap. watch this cap story. it is going anywhere on the natural gas front. the bloomberg dollar index is down by 3/10 of 1%. we'll be talking about this. and we are looking forward to a conversation with sebastian ra edler. this is bloomberg. ♪ if your business kept on employees through the pandemic, innovation refunds could qualify it for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to find out. then work with highly qualified professionals to fill out your forms and submit the application. go to innovationrefunds.com to learn more. we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every

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guy: it is thursday, november 24, thanksgiving in the u.s. european equities are well bid. volume is very like. the u.s. is out. the price signal is not that good from european equity markets. but positive signals from the fed. the countdown to the close starts right now. announcer: the countdown is on in europe. this is bloomberg