>> this is "bloomberg daybreak: europe." i am dani burger with manus cranny in dubai. >> central bank bonanza. no fewer than 11 meat this week. the fed and be a we as policymakers pursue efforts to tame inflation. in the red. a pivotal week for markets on the back foot. the dollar is bid. chinese equities dropped even as covid curbs continue to ease. london wakes up to the season's first snowfall. energy prices are at records. and a prolonged series of strikes. good to have you back in the seat. we are waking up to a touch of schizophrenia in the bond market. are you higher for longer or peak rates?

make your call. dani: i woke up this morning to a touch of snow in the u.k. sky high prices coming for the power market. how will that feed into the inflationary picture in a year where according to the bank of america we have had 275 hikes? and the drama continues this week. manus: a 422% hike in u.k. prices. the u.k. lives in splendid isolation. that was their foreign policy. what is the economic policy? there is a divergent policy. 200 basis points of cuts at the end of 2024. that is what i call deep optimism. dani: we all need a little

optimism. in this market as we wait for cpi, fed and boe, not a lot happening. why would you want to take risk ahead of such big events? not much action on the s&p 500. euro stoxx 50 futures are faring worse. we ended friday on an uptick in europe. valuation leading the way to the bond market drama. the pain this morning though is in asia markets. down nearly 1%. the hang seng down nearly 2% as covid cases take higher. it is mostly anecdotal as official measures do not reflect that as there is less testing going on but very summers telling bloomberg and warning of a catastrophic health event as china starts to back off covid zero. lauren: catastrophic delegitimizing of the chinese house. look across the boards and you

see a spike in ppi on friday driving the yields higher in the u.s. coming off those highs this morning. the equity markets -- let's roll it over and look at the cross assets. asian stocks down 1%. williams at the fed believes inflation could drop by 50% next year. that's look at the cross asset action. putin tells the world he is ready to cut production. yields drop. the journey back to 3% may well be there but the question is, will you ever return to 2% or how quickly do you get there? in the past five hiking cycles the fed has held for 11 months at a time. copper is down. you will find that is something strange. i think we are down 77%. we will get back to melanie -- lme.

and copper is down on tenterhooks. dani: i have no idea what that is, copper stocks? let's get to reporters around the world. we set up the central bank week with enda currin. and lizzy is with us as well as rebecca. manus: this is going to be a huge week for central banks around the world. we have decisions from ecb, the bank of england the federal reserve. for more, let's bring in our chief asian economics correspondent, enda. cpi has delivered whippy volatility. how contained will cpi be? will it be a dovish reading

going into the fed meeting? >> think it would take a significant amount of surprise from cpi to shake the fed off its course. they have signaled they would go 50 basis points this week. they want to slow down the pace. if inflation is pushing in the opposite direction, all bets are off or a bigger rate hike. all things being equal in terms of what we know right now, the fed is expected a signal that we have a new dot plot in terms of where they might see the fed rate peaking next year. we have the press conference from jerome powell which will be important in terms of where he things the inflation story is going and where rates will be peaking next year. in terms of what we know it is expected to be a smaller rate hike by the fed as they guide into a slower pace of rate hikes next year. it would take a big inflation story to change the story.

dani: we have 11 central banks. we have ecb, boe and a host of others. what does the fed slowing down to 50 and potentially a peak in the dollar mean for other central banks? >> central banks want to slow the pace of rate hikes because they hope inflation halts in 2023. we are not there yet. the ecb is expected to go by 50 basis points because they are putting inflation first and foremost as their primary challenge. they will worry about growth second to that. my down the guard has made that point clear. -- madame lagarde has made that point clear. the official policy makers saying they have no option to do anything but what they are doing now. dani: it will not be a quiet

week. thank you. closer to the u.k. or in the u.k. power prices for monday jumped to record levels as freezing temperatures are set to cause a jump in demand. joining us now is bloomberg's lizzy burden. what does this mean in terms of power pricing? >> waking up to a white winter this morning. this is the worst possible timing and terms of people's energy bills. the last thing we needed. u.k. power consumption is expected to peak at 5:00 p.m. this afternoon which in turn means the day ahead has cleared an all-time high of more than 2500 pounds of megawatt power and the wind has weakened to almost zero which means that wind generated power supplies have also fallen. if you can afford to work from

home today and have the heating on, it is probably the day to do it. the office has a whether -- has a yellow whether warning in place and across europe the cold snap is expected to last seven days. manus: it is looking pretty nippy at home. 422% rally in the price. how much of that is specs? and scalping going on in the market? we can debate that as to whether the chart is broken. great reporting. chinese officials are further downplaying the risk of covid-19 restrictions as they are eased. for more, let's talk to rebecca in hong kong. there is a fundamental dismantling of the apparatus around the covid policies. what is the message that goes with that physical dismantling? >> it is a very dramatic u-turn

in terms of the narrative we are seeing. china's top medical advisor saying covid is no more serious then influenza or the flu and a lot of state commentary i came out this weekend echoing those types of claims including one call that there is growing scientific momentum to downgrade covid from a top category a to a category b and some local media reporting the possibility of a pilot scheme to reopen the border impart between hong kong and china which has effectively been shut since early 2020. i could not be more different than the picture we are getting on the ground particularly in beijing. when janet don't at least seems to be focused on cases ripping through the population. even though the official numbers are a touch lower. we can attribute that to a pullback in testing.

there are reports of long lines outside hospitals. people struggling to get a hold of their medicine. and anecdotal reports from health workers sega and the hospitals in beijing are under pressure -- and anecdotal reports from health workers saying hospitals in beijing are under pressure. this 10 point plan is pulling back a lot of that including mass testing. one hospital saying workers have gone from testing daily to twice a week and another saying they are being encouraged to work even when a health worker tests positive. it is a dramatic shift. it is also important to remember it is patchy. beijing seems to be the focus of a lot of the disruption, other areas, more rural are yet seeing

a big spike in cases. that unevenness will be characteristic of the way we see this first big infection play out in china. dani: rebecca, thank you. rebecca wilkins in hong kong giving us an update on all things covid in china. let's look at what we will be watching out for. the election of da silva as brazil's president will be certified by the electoral court and ceremony. tomorrow is the big one, u.s. cpi rating for november. how much volatility will be placed around this event depending on how it comes in? manus: it certainly impacted stocks. 3% swings on stocks. the last rate decision for 2022. and thursday, the velocity -- you have the bank of england

making its decision. there is so much uncertainty about what to do next. friday, germany manufacturing pmi. how much has the energy crisis impacted the german beast in terms of manufacturing? dani: a lot to look forward to but first coming up on this show, we will talk about the fed and the market split over how long rates will have to stay high. we will discuss the week ahead next. manus: and the monster power price rises in the u.k. soaring as the freezing weather crosses united kingdom. the impact, on bloomberg. ♪

>> i feel that right now things are going in the wrong

direction. we are entering -- starting with the united kingdom and the euro zone. and inflation is still too high. we are entering a stagflation like we have not seen in -- since the 1970's. >> the question will be is the pause is a high hold. i think that is more of the scenario we see with recessionary risk in the u.s. rising towards the end of 2023. >> those are the aspects that all the policymakers are trying to addressed. over the next 6-12 months, i think that will be --. >> i don't think we are going back to the last 10 years that we have had of acute financial regression.

i do think you will have a normal interest-rate environment going forward. >> it is going back down for sure. that is a possibility but i think it is highly overrated. manus: various voices on rates and where the markets are heading. this is the mliv pulse survey. when asked for the best trade going into the 2022 final fed meeting, i emphasize the word trade and not investment, lale akoner is a senior strategist at bank of new york. this is a high hold narrative which is taking hold but there is a presumption by markets we will have rate cuts, 200 basis points of rate cuts from the end

of next year to the end of 20 24. is that presumptuous? good morning. lale: for this year there is absolutely no pivot from the fed. we think the fed will hike by 50 basis points for the next meeting and we are saying they will hold rates for long. even maybe towards the middle of 2024, we won't see a pivot. it will all depend on how long inflation is going to be staying elevated. how successful the fed is going to be able to bring it down. dani: so much of what the market has turned on is this pivot. they won't cut rates and you can buy stocks. what is the playbook for this market for hiking and holding? lale: hike and hold strategy is the strategy at the moment the fed as per sewing. you have to be defensive. you have to be positioned in

sectors able to whether the margin pressures that are going to stay elevated due to the fact that inflation is going to be processed. we are talking -- inflation is going to be persistent. we are talking about energy. manus: if we get into that hike zone of where we get close to 5%, has the market yet to really understand the gravity of qt? will qt become the new obsession of 2023 relative to hikes? lale: qt is already getting into their pricing. the real question again is the market is understanding where the -- will be in 2023. 5% is our best case scenario but it is likely it will be higher than that. along with qt that means

knee-jerk financial tightening coming up so we are saying that the market has not opened up yet and you have to be defensive. you have to look for bottom-up stock selections. dani: i wonder what you make of a vix that continues to fall. are we underplaying it? are investors unprepared for what is to come? lale: it is hard to look at the vix and say the market will continue in this manner. the cpi information is going to be very important this week. we will look at the sticky parts of inflation to understand whether they are coming down as well. more than the vix itself, i will be looking at the macro factors to see if the market will realistically price in a

slow down of inflation and the feds fund rate. manus: if we look at the oil market, aggressively repricing last week, down by 11%, europe flecked on the 1970's and the 1980's, the oil price shock. we have not had that at this juncture. down 11%. we now have the risk that vladimir putin will reduce production again. but from an energy perspective you make it clear what we are spending on energy and energy prices in the u.k. up by 400% yesterday, one day. contextualize energy spent as a drag on the earnings narrative or the market narrative for 2023. i keep bouncing two years forward. lale: i think for energy prices,

the first factor is trying not reopening. what will it mean for oil? and the second one is whether russia will cut oil supply and therefore bring pressure in europe and other developed markets on that cap. both mean increased uncertainty in the energy sector and increased uncertainty in earnings. but having said that high oil prices complete with the high u.s. dollar and high interest rates means earnings estimates will come down. that is why we think earnings estimates and earnings themselves will come down in the next 12 months. dani: we have been talking about the bullish scenario. a lot of folks are focused on that and the reopening. it might be bumpy. i am wanting to listen to larry summers.

larry: we don't yet know how this is going to work out. is this going to be a successful rejoining of the reality of the rest of the world? or is this going to lead to catastrophic delegitimizing performance of the chinese health care system? dani: how concerned are you if this is a bumpy path to reopening and it does result in widespread covid cases in china? lale: we are concerned of course. it is uncertain how they will deal with although these new vaccinations and so forth and when they will be able to reach herd immunity. from a markets perspective they are neutral. we are staying overweight in policy favored sectors at will do well no matter what such as smart infrastructure such as renewables. that for us is unchanged. dani: do you -- thank you so

much for your time. lale akoner. coming up on the program, beijing is asking covid patients with mild symptoms not to call the medical emergency hotline. this is bloomberg. ♪

manus: it is daybreak europe. let's get to hong kong. the first word headlines. >> covid is rapidly spreading through chinese households and offices after pandemic rules were unexpectedly unwound last week with hospital struggling to deal with a surge in cases. anecdotal evidence suggests the caseload is many times the

governments tally as a top medical advisor is quoted as saying the fidelity rate from the omicron variant is similar to the flu. the u.k. is readying military staff and civil servants a cover for striking workers at seaports as the u.k. braces for disruption. strikes are planned for almost every day this month with nurses, ambulance staff, rail and postal workers among those walking out overpay. u.s. will send a delegation to china in the coming days following on president biden's meeting with president xi last month. the state department says the visit is to continue responsibly managing the competition and to explore dental areas of corrupt. cooperation. it will also precede antony blinken's trip to china early next year. france and morocco are set to face each other and the semifinals of the football world

cup. the french beat england 2-1 after the captain missed a penalty shot. rocco became the first african or arab team to reach the semis. 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. this is bloomberg. dani: adrian wong in hong kong. coming up, it is a huge week ahead for the world's central banks. 11 decisions in total. we will rate decisions from the fed, the boe and the ecb. fed, t- [announcer] imagine having fuller, thicker,

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>> this is "bloomberg daybreak: europe." manus: no fewer than 11 central banks meet this week. policymakers pursue efforts to tame inflation. in the red. stocks kick off a pivotal week for markets on the back foot. the dollar bid. equities drop as covid curbs continue to be eased. london wakes up to the season's first snowfall as heating demand drives energy prices to records. the u.k. braces for a prolonged series of strikes. dani: breaking news coming through in m&a. amgen has agreed to by horizon

from $116.5 per share. that puts it at a $26 billion valuation. there is a bidding war going on for this. it just shows, still some big m&a hitting and going through. mark: people are -- manus: people are worried about an earnings recession. let's pause for a moment here. it is a $26 billion valuation. this is in the biotech space. $116.5 as you said. the offer price is at a 20% premium to the closing price. this just gives you a sense of the kind of scale of premium that is being delivered. horizon ramped 24% when it disclosed amgen, sanofi, and johnson & johnson were all in the running, weren't they? dani: they certainly were. this results in amgen's biggest

ever acquisition. we did have the gmm up. let's look at the overall market. you have an especially down day for china down 1% on a csi 300. it is the fear over a surge in covid which larry summers warns could be catastrophic if covid is able to run rampant. manus: we have interesting moves on copper and aluminum despite the reopening narrative. there seems to be a lack of belief it is going to be a one-way trade or a one-way trajectory on reopening for the housing market. new-home sales down for 14 consecutive months. we keep saying, it's going to be a huge week for central banks. rate decisions are coming to the boe and the fed. crucial u.s. inflation data is due tuesday.

let's get to our chief asia economics correspondent, enda curran. good to have you with us. save me, i'm trying to go for a bottle of water. it is a big week for central banks. cheers. >> it is a huge week. we are expecting a 50 basis point move from the fed. they have been looking to slow the pace of jumbo rate hikes because they want to assess how things are hitting the economy, but we will have inflation data, cpi data before the fed meeting. it will need to be a large upside surprise to get the fed to move off course and go back to the 75 basis point moves. the expectation is we will show a broad moderation, notwithstanding stickiness in core service areas. chairman powell will be able to come out with his narrative after the meeting, especially the press conference, where he thinks peak rates might end up. where he thinks they are in the battle against inflation as we head into 2023.

in terms of what we know now, the story is expect to be the fed moving to 50 basis points, slowing its gradual pace of rate hikes. lots of question marks over where will the peak rate set up and what sort of inflation number will be get as we head into 2023? dani: i'm just glad you have your health. here i am with a nasally voice, manus is losing his. thank you for guiding us through the show. let's focus on europe, the u.k.. what are we looking for when it comes to ecb and boe decisions? >> there is still a debate that may be the fed will pull off a soft landing because of the labor market. in europe you have come -- you have chronic energy crisis hammering consumers and the ecb are facing an almost certain recession by having to tighten

policy. language from the ecb especially president lagarde has been consistent, they have to go harder on inflation. they are expected to go to 50 basis points. similar story with the u.k.. the bank of england facing a very difficult economic situation. the u.k. is among the most vulnerable. they have to go by 50 basis point because the big concern is about of course second-round effects, wage gains increasing as energy prices go up. central bank being forced to hike into near certain recession whereas the u.s. fed seems to have some breathing room it reads -- at least on their side. dani: bloomberg's enda curran there. let's talk about the -- manus: the healthiest one on the show. dani: we are setting a low bar at this moment. it is all about the health of the real estate market. central bank hikes are feeding into this as well as the

cost of living crisis. europe may be in an acute episode, however the fundamentals remain strong. that's according to a new report from lasalle investment management with more than $82 billion a um. joining us now is our guest, global head of research and strategy at lasalle investment management. thank you for joining us. what explains europe's resilience given all these global headwinds? >> the fundamentals are there. europe is less affected by the trends we see as a huge issue with the office market in the u.s.. it is more affected than asia. i just came back from asia and it was remarkable to see all my colleagues back in the office. it is great to be back on this show in person in the city of london for the pandemic. it just speaks to the value of being in person. the vacancy rates and european markets remain low. supply is at a low level.

fundamentals on the demand side for real estate and supply-side are very strong. mark: -- manus: thanks for being with us this morning. we are waking up to energy prices in the united kingdom up by 400% yesterday. asking prices -- and more on the retail side, the sharpest fall in four years. this is the u.k. asking prices from buyers falling by the most in four years. we are going to go into some kind of property market adjustment in the u.k.. i have billionaires telling me they are buying like billy a. and i have the retail side under pressure. how do you dissect what is ahead for the u.k. probably market? -- property market? >> it is a question that faces all the places in the world where interest rates have been rising, which is most of the world with the exception of

china and japan. the fact of rising interest rates, rising mortgage rates, has put pressure on affordability for homebuyers. there is no question, people's monthly cost of ownership is increasing because of higher rates. we see the strength in the -- that we had before really transferring for the rental market, which is why we are quite bullish on rental housing here in the u.k. and europe. and really globally. that is both multifamily and single family rental where that is investable by institutions like us. dani: one thing i found really interesting is what you described is the mismatch between buyer and seller price expectations and how that is resulting in a decline in transaction volume. surely that has to break at some point. what direction does that break? >> real estate needs to be priced in the capital market context. investors can invest in bonds or

real estate or other asset classes. the real estate market tends to move more slowly. it is less liquid. so it takes time for that adjustment to filter through. we highlight that the debt markets are the primary way that filters through because borrowers of real estate on the margin tend to be the buyers of real estate tend to be a lot of rich buyers. we are already seeing renewed activity in sectors that have repriced the most, for example, u.k. logistics, which is a really great profile in terms of rental growth prospects and long-term fundamentals. that impact of higher interest rates has only filtered through and you are starting to see transactions come through. manus: where i am sitting in dubai we have had this exponential re-domiciling of

wealth and human capital resulting in property prices rising by 30% in 12 months. when you talk to global investors, where does the uae, where does dubai fit in that comparative to monaco, to the caribbean, to other sort of traditionally hyper expensive havens? >> you know, we are not really investors in the middle east. i can say the primary reason for people buying real estate is to use it. the secondary reason is as a store of value, an investment, and clearly most of our capital is being invested for financial returns. others may have state haven status. -- safe haven status. the uae and other countries have benefited from the fact they are open to investments from other countries including those that may be under sanctions. that is not the focus of ours because when you have that safe

haven money, it tends to make the returns less attractive for investors who are focused on the use value of financial returns. dani: how important is the wrapper of a real estate investment? there has been drama with blackstone. it was not just real estate, it was a credit fund, but these funds that allow investors to redeem at least 2% of assets on a monthly basis. they had to halt withdrawals. is this the problem of putting an illiquid asset like real estate is anymore liquid wrapper? >> i'm not going to comment on specific funds, but i would say this is a feature of all private market funds, to have limitations on liquidity of the fund. getting capital out of it. is a feature and not a bug of these products to prevent them from needing to have a fire sale on assets. real estate should be thought of as a long-term investment. using it as a short-term investment and trying to work

with these funds is just not the right approach. that is what we tell our investors as well. you have to look past that and look to the fundamentals that underlie characteristics of real estate, which remain strong in many of the sectors and markets we invest globally. manus: thank you very much for being with us this morning. let us see what 2023 and beyond brings to bear as we are not done with those interest rate hikes yet. wrangling sick, global head of research and strategy at lasalle investment management. coming up, the uk's big chill. the powering ahead on prices to the record levels as freezing temperatures causes demand to surge. ♪

manus: it is "daybreak europe." let's get your business flash. >> amgen is said to have agreed to buy horizon therapeutics at a valuation of about $26 billion in what would be its biggest ever acquisition. the u.s. biotech giant offer is at a premium to friday's closing price of about 20%. potential buyer sanofi backs out of the deal after takeover reports pushed horizons market value to $22 billion. u.k. power prices for today have jumped to a record levels as freezing temperatures cause a surge in demand. conditions see a drop in wind generation leading to a supply crunch. it is expected to last the next week. the u.k.'s office has put weather warnings for snow and ice in place until thursday. twitter will relaunch its twitter blue subscription

service for eight dollars per month. the company says apple's ios users will also get access for $11 per month to subscriber only features including the blue check mark. the relaunch of twitter blue was suspended in november due to a wave of profile impersonations. dani: adrian wong in hong kong. now in the u.k. power prices jumped to record levels as freezing temperatures are said to cause a surge in demand, just as a drop in wind generation causes a supply crunch. joining us now is lizzy burden. already in the throes of cost-of-living crisis, what does this latest surge mean? >> enchanting as it was to wake up to the snow -- dani: as long as i can get in than the morning i am fine with it. >> if you have seen the search pricing on uber, it is painful in terms of energy bills. we are expecting to see the peak of demand at around 5:00 p.m. in the u.k..

an all-time high of 2500 pounds per megawatt hour. to make matters worse, the wind has weakened to almost zero. that reduces wind generation power supplies. if you can afford to have the heating on today, if you can work from home, today is the day. mark: -- manus: on saturday i went to see the penguins in the snow with the snowplow, with this massive ramp for skiing. i felt like i was in a winter wonderland. dani: you are basically in the u.k.. >> that is why you have a cough. manus: i maybe got it from the penguins. right. here we go. just a thought. it was a nice day. right, what do you do on a saturday when it is 28 degrees? go play with the penguins. here is the more important thing, the economics angle. we have a bunch of strikes coming up. the whole thing over the

weekend, the army are coming to bay light, strike action. how big is this across the u.k.? >> it is so big. you have an emergency cobra meeting and another one planned for wednesday. these are held by top officials when you have a national emergency or major disruption. the government is planning to bring in military and civil servants to cover for c and airport workers over the next few weeks. the army cannot strike, hence it is the last resort. over the weekend, just yesterday you had the government rejecting an offer from the nursing union to meet to suspend action in return for talks overpay. you could see as many as 100,000 nursing staff on december 15 and december 20 in unprecedented walkouts in the u.k. but if you look at the offer they have put on the table, they

want 5% on top of the rpi rate, which is 14.2%, which is really i watering, but they say this is to make up for years of wage restraint. they say you clapped for us in the pandemic, do we deserve a real pay cut now? dani: so you have this drama in terms of strikes in the labor market, you have freezing temperatures hitting the u.k.. a lot of data out this week, too. before a boe decision. how is this going to feed into that decision? >> the bank of england is expected hike by 50 basis points but what is really interesting as nomura and bank of america have notes out pointing to the possibility of a four-way split on the monetary policy committee. you have the big dubs of the committee who could vote for 25 basis points or no hike at all because they are so concerned about the recession risks in the u.k.. when you have the 18 month monetary policy lag, they say we

don't need a big hike in the grips of a recession. but as you say we have this raft of data this week, the gdp figures in 10 minutes are expected to show that the economy bounced back in november, the jobs data tomorrow expect to show -- expected to show inflation is past its peak, any surprises on any of those fronts could move the needle for the bank of england. what is less likely to move the needle is since the last boe meeting we have had the fiscal statement from jeremy hunt and what is interesting will be the bank of england assessment on whether this is a loosening or tightening at the 18 month horizon. of course in the short-term it is a real boost in terms of energy. covering household bills. deputy governor dave ramsey has said it is not as likely as the data to move the needle. manus: thank you very much. let us see what the data gives us. electricity prices keep snapping

higher, it's going to get pretty darn tight. lizzy burden net london hq. coming up, a spike surprise from the ppi on friday, yields jump. what does it mean ahead of ppi yields as we go into a monster week for risk and reflection. this is bloomberg. ♪

>> there has been a large reversal in macro themes that captivated our attention this year. since november the dollar has weakened, stocks have bounced. oil prices have retraced. what will it last into year end? valerie tight tell is here with the charts to discuss potential catalysts. ppi on friday, was this all just

premature yields coming down considering the reaction we had to a stronger ppi? >> we did have a stronger ppi but a lot of those components that led the strong print do not feed into cpi. it was surprising enough we had a selloff in the bond market. yields ticked higher, real yields tech tire. the market got nervous because remember, real yields taking higher was what kicked off all of this to begin with. kicked off dollar strength, kicked off equities weakening. a lot of that narrative which has seemed to disappear might come back if we see this real yield starting to retire. i want to preface this with, yes we saw bond weakness friday, but that is ahead of pretty big auctions we have this week. we have two treasury auctions coming today and a big bond auction tuesday all ahead of the fed decision wednesday. manus: it depends how much risk you want to take ahead of the guidance from powell. the debate is this as to whether 5% really is the max they will

go to and how long they will stay there. pricing seems to have stalled around 5%. is that reinforced or do you think the fed could shake that? is that the risk i have in the powell speech thursday? wednesday, excuse me. >> a lot of tension will be focused on sep projections. the dot plot for example. he stole this the last two times he spoke, they think this 2023. is going to be guided higher. last time they put out these projections it was 4.6. the market is pricing this terminal rate around 5%. if the fed guides this any higher than 5.25, then maybe a reversal of these trends. the key thing to watch out for powell is any comment he has on the loosening of financial conditions. it was notably absent in his working speech before the blackout period that he did not push back on easing a financial

conditions. if he picks up that narrative again the equity market might get spooked. manus: we certainly have a touch of schizophrenia. it is not about the narrative of hiking rates. it is went to the rate cuts come? thank you very much, valerie. dani, keep an eye on gmm. you ask why is aluminum down 2%? china is reopening. it is not a one-way trade. you have these two standard deviation moves in aluminum, etc.. dani: exactly, it is a bumpy road to reopening and if it is dotted with surges and covid cases, does that lead to the supply chain issues that ignited these trades to begin with? we will stay on top of it for you. this is bloomberg.

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