dani: good morning, this is "bloomberg europe: daybreak."

i'm dani burger in london. jobs day, global stocks edge higher before today's closely watched u.s. payrolls report, as st. louis fed president james bullard says rates may reach levels that bring down inflation. propping up real estate, chinese developer stocks soar, marking the country's most dramatic shift to help the sector. abu dhabi bank confirms it will lead a bid for standard charter while samsung's profit plunges the most in over a decade as chip prices crumbled. good morning, it is friday, you made it to the end of the week, but it is ending with confusion. you had bullard saying we might be nearing the level rates are restrictive enough best or george once a terminal rate of 5% or more.

keep in mind both of these fed speakers are not on the current voting committee for the fed. important in that context. it is jobs day, u.s. jobs figures come in at 1:30 u.k. time. that means there is perhaps an eerie quiet when it comes to assets. 10-year yield's are not doing much, a tiny bit lower. the driving forces china. -- the driving force is china. some restrictions easing is helping commodities this morning. iron ore is also higher, 0.9%. one breaking story we had 30 minutes ago, according to people familiar, the bank of japan is still going at it slowly when it comes to widening the band. they are not likely to do it

again this month. in january they want to pause and see what the impact was from widening the band last month. they are not likely to move it in january. we are seeing weakening in the yen, weaker by 0.5%. looking at the equity market, asian stocks are doing slightly better, that support coming to china from the property sector. ms ci up 0.1%. s&p 500 futures starting the future session in the green. standard charter, this is its current price in hong kong, up for 4.3% -- up 4.3%. abu dhabi bank was looking at a bid on standard charter. then the bank said they were no longer in talks over the offer. some of those gains pared, but still higher.

standard charter is a possible takeover target. let's get to our top stories from around the world. we will preview u.s. jobs. we will break down the turmoil on capitol hill. the latest on china's real estate a. and, russia's proposed early sig sauer cease fire. stocks and bonds looking for direction ahead of the latest data out of the u.s. james bullard saying interest rates are closer to the levels they need to be at to bring down inflation. joining us now is enda curren. set us up for the job numbers. what are we expecting? enda: gains for 200,000 in december, a strong month for jobs by any yardstick. it will lend itself to the narrative that the fed has more work to do. employment is an indicator when it comes to where inflation

might go. it would take a significant downside surprise to change the narrative, which is the fed has more work to do. jim bullard overnight made the point money supply is starting to contract across the u.s., that would lend itself to slowing and that the fed will pause at some point. right now the story is expected to be another strong u.s. jobs figure. that will pressure other central banks. dani: maybe the markets will stop pricing out cuts. it feels like that will not happen. enda, thank you come our chief asian correspondent. republican lawmaker, kevin mccarthy, has been blocked for the 11th time in his bid to be the speaker of the house of representatives. the group of 20 gop --

let's bring in derek wallbank and get into the drama. it was six votes that failed, and then 11. are we any closer to getting a speaker? derek: what they say, yesterday was deja vu all over again for kevin mccarthy. more votes and more losses. he was anticipating these. there was a framework that is on paper of a list of concessions that the would be speaker is giving to his right most flank to get votes. even if that goes through and ok , he is still not going to get all of the votes he needs to be speaker. the house cannot do anything until that happens, but they are hoping to pick off one by one by one. question for mccarthy, does his math add up? are there enough who will vote

him with concessions, or are his numbers sunk? it is too early to say. the next votes that come up today will be key for him. we will watch that space but these concessions have some analysts worried mccarthy, if he wins, will be a very weak speaker, and may not be able to have the juice to go into the bigger fights, including the debt limit. dani: i want to get into that. the wall street community of investors, it has peaked interest but is not yet because it will be those showdowns that rattle investors. what position does this leave the unity even if mccarthy get selected -- voted in as speaker, even if there is an agreement, how does it leave the state of the gop in terms of their cohesiveness? derek: yes, it is a real trouble

point. you are talking in some sense of the people, the holdouts on the right know there are these fights coming up. mccarthy has to promise them he will be there for them in big moments when they want to use these fights over government spending and the debt limit to extract big concessions. they do not have the votes for those otherwise. kevin mccarthy knows full well he probably does not have the votes to do some of those big things with republicans alone, so he might have to shop over to democrats who will want their own concessions. it is a tricky mathematical thing. everybody in washington knows those fights are coming, and is playing them through in their mind. you are seeing republicans trying to leverage structural abilities for those future fights, given the seat on the committee, who gets to write the

rules for debate, give the appropriations gavels to set spending levels -- things like that. becca put them in a -- that could put them in a strong point but it could rub allies the wrong way, because if you are boosting a hardliner, who were you taking down to make room for them. dani: fantastic stuff. bloomberg's derek wallbank on all the latest d.c. bloomberg has learned china is planning therese tracked restrictions on borrowing, dialing back the redlines policy that exacerbated one of the biggest real estate meltdowns in the country's history. what does the easing mean if beijing moves forward with these plans? >> the easing can mark the most

dramatic shift in china's policy, adding to a clutch of measures since november. beijing may allow property developers to add more leverage by easing borrowing caps and pushing back the grace period permitting the debt targets by six months from the june 30 deadline. the offshore u.n. extended gains -- the offshore yuan extended gains. the three red lines that were symbolic of beijing's stance toward the real estate sector, those sectors started showing cracks in 2020 due to high leverage, but they did exacerbate liquidity and triggered an avalanche of defaults. after almost two years, beijing is starting to change it stance. dani: thank you very much. huge gains when it comes to property developers.

russian president, vladimir putin, has ordered his forces to cease fighting in ukraine for 36 hours starting friday at noon moscow time to mark russian orthodox christmas. joining us is our opinion columnist. what do you think is the rationale behind putin's call? >> in one way it is on brand with the kremlin's regime interweaving faith and conservative traditional themes and the restoration of the russian world, crimea was essential to that, and a broader enterprise in ukraine. he is trying to appeal to the unhappiness within russia, but a lot of people are unhappy with the way the war is being carried out. among the hawkish followers on telegram there is fury over this truce. the real reason is he does not want a repeat of new year's eve,

substantial losses of russian troops from a ukrainian strike in eastern ukraine. russians celebrate new year rather than orthodox christmas, so he does not want a repeat of that, for sure. dani: thank you very much. let's look at the key things we will be watching out for throughout the day. 7:00 a.m. u.k. time, the health of your's -- europe's largest economy, germany here it u.k. data, construction pmi for december set to be released. 10:00 a.m. we will get the latest euro area cpi numbers and retail sales numbers, and then the one you are waiting for, it is jobs day in the u.s. that will include the key nonfarm payroll figures at 1:30 u.k. time.

with her to be tightness that the fed needs to keep hiking? coming up, bullard says rates are nearing a high enough level. we will discussed that and much more with stephen gallo, head of european fx strategy, bank of montreal. this is bloomberg. ♪

>> the point of this is we have gone all the way back to the pre-inflation shock level of inflation expectations, macro theories tell us that bodes well for the future. this is a good signal for disinflation in 2023. dani: bullard saying we might be reaching the level that was start to bring down inflation,

and therefore perhaps rates do not need to go as high as others suspect. i want to put the u.s. story aside for a moment because the big mover in the fx space is that -- the yen. the the boj will evaluate the impact of last month's decision to widen out the band, and then go from there. on that report, the yen is weakening. let's bring in stephen gallo, head of european fx strategy, bank of montreal. great to see you. what do you make of this? stephen: what do i make of the yen move? dani: boj saying we will go slow, we are not looking at making yield adjustment. stephen: our base case is for

dollar-yen to move back to 1.38 in three months, partly on the fed and partly on the fact japan has a core flows problem. we also do not see the boj tightening in 2023, so we think a slight adjustment, the tweak from late 2022 does not proceed a series of steps of tighter monetary conditions in japan for the year as a whole. that is our base case, but there are bigger downside dollar yen risks in 2023. markets price in a higher probability -- if asset prices collapse and we have an economic hard landing, if long-term yields collapse, that could bring dollar-yen lower. based on how the year started

and how asset markets are trading, not only fx but the rates space, commodity prices, it seems market participants in a number of asset classes are eager to put on the economic hard landing trade is coming, or the trade that is associated with a quick return to 2% inflation not just in the g10 but the u.s. in particular. dani: to that point, we saw the dollar fall, having its weakest month since 2010, about 7%. did we overdo it, the trade collapsing of the fed that posits or cuts? stephen: possibly. the broader markets seem to want to put on the economic hard landing trades and inflation

back to 2% rapidly, leaving room for the fed to ease in the second half of 2023. we do not think the fed will cut in 2023. based on the current market pricing, that is a contrarian view. the pain trade in fx is a dollar lower, and our view therefore, because we do not see cuts in 2023, our view is most of the dollar weakness this year should be left to the second half of the year rather than frontloaded. if that weakness in the dollar is frontloaded in 2023 and we are wrong, we think there is a sizable risk of a violent rebound in the dollar later, once it becomes clear inflation will not return to 2% as quickly as some in the market would like. that is where you will see elements of volatility stay

elevated, not necessarily as elevated as they were in 2022 but in 2023 that will be a catalyst for a significant pickup and volatility if market participants do get this wrong a we do not get to 2% quickly in the united states and g10 as well. dani: what suffers on the other side? i think about the euro where we have an ecb that is starting to sound like one of the most hawkish central banks. how do you think about the euro versus the dollar? stephen: much as i said about the dollar applies to the euro-dollar, sure, the ecb is able to sound hawkish and talk tough because longer-term yields in the euro area have moderated, spreads have compressed a little bit, since the beginning of q4

last year, so they are able to talk tough. i ultimately think the ecb will do roughly what the fed does. if the market pricing for the fed in 2023 is currently correct, and the fed is cutting by the second half of 2023, i do not think the ecb will continue to hike in that instance. the main points about the euro as we start 2023 compared to 2022 is that there are fewer headwinds for the euro, fewer headwinds from the balance of payments, fewer headwinds from the energy complex, fewer headwinds from escalation risk in the war. i think if you are looking at euro-dollar near-term, we would probably be buyers, and we would be sellers towards 1.06, unless

we get a decimal set of employment data from the u.s., and that inflation report from the next week is on the soft side. i go back to the dollar. if market participants start to see evidence building that gives them faith in their belief that the fed will cut by the end of 2023, the dollar is short-term vulnerable for that for that reason. dani: very quickly, i do not think we are allowed to have you on the program without getting your thoughts on sterling. it had been said many times last year that u.k. assets were untouchable. has that changed this year? stephen: i think we are still waiting. our view is we would be aggressive buyers of the dip if the boe become suffers g10 central bank to ease policy, and global inflation pressures are better behaved than expected. for an understanding of that

thesis, think of the partial opposing scenario. say the boe is the first to ease policy in 2023, and inflation proves to be stickier than expected in the u.k. and globally, sterling will collapse, and it will make the 2022 move in sterling look like kids play. dani: what a call to end it on. stephen gallo, head of european fx strategy, bank of montreal. coming up, the chips are down. woes hit the largest chip maker. more on that, next. this is bloomberg. ♪

dani: samsung's profits dropped by the most in over a decade, a sign of the global economic slowdown may be hurting

electronics demand even more than anticipated. joining us now is our tech guru, alex webb. get into the basics, what is driving this decline? alex: 69% decline, preliminary numbers but the commentary out of the company is it is declining demand for electronics goods that has knock on effects on the memory business, the chips business. it is a double whammy. they make smart phones, fridges, other things, and chips to go into those devices. as those suffer, the -- there was a huge boom in electronics in a locked, now people have what they need coupled with the cost of living crisi, that means spending has slowed down. dani: i do not understand the appeal of a refrigerator with internet access.

alex: you are clearly not in the right generation. dani: that is samsung, we look to it as a bellwether. how is it different from its rivals? alex: samsung has been bullish in investing in extra capacity. what we saw in the lockdown with this explosion in consumer demand, not just for electronics but for cars, it was not as big of a slowdown. what happened is the carmakers at the beginning of the pandemic, they were not expecting so much demand so they canceled orders. when they needed those orders, the chips were all hoovered up. there was a huge investment in semiconductor capacity. there was a slowdown in the economy and those chips were not needed as expected. samsung has continued at a faster pace than its rivals, and it did intend to slow down.

now the investor community says you need to slow down on that investment. dani: why are shares still up? alex: merger talks. if the competitors merge, there is less competition and better pricing. dani: alex webb, our bloomberg quicktake correspondent. coming up, standard charter was considering -- a big bank was considering a bid. shares spiked, but still takeover talks. we will bring you that story, next. n(jennifer) the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals

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dani: good morning, this isr

happy friday. these are the stories that set your agenda. it is jobs day, global stocks and higher before today's closely watched u.s. payrolls report. day-lewis and president says rates may soon start ringing down inflation. propping up real estate, chinese developer stocks sure with beijing's looking to dial back strict borrowing restrictions, marking the country's most dramatic shift to help the sector. in company news, first of the w bank contains a bid for standard charter while samsung profit plunges the most in over a decade as share prices crumble. you get that sense that this morning and markets, it is that quiet eeriness. we have james bullard saying that perhaps rates are almost at the level they need to be. you have esther george saying that she wants terminal rates 5% or higher. it is also jobs day. why take any big bets this morning? certainly seeing that with the 10 year.

yields little changed so far. the other big stories that are able to move markets is china. removing some of their restrictions when it comes to operating developers. though stocks are shooting higher and we are seeing a bid come in for commodities. oil higher for a second day. iron ore in singapore up more than 1%. and the yen, stronger -- weaker versus the dollar by half a percent. just talking to stephen gallo who does think that this isn't the start of some big tightening for the boj, but it really is that force that will be the bigger part of this pair. there is still potential for weakness in the dollar-yen. looking at equity markets, we're looking at asia stocks moving higher, property development stocks in china, those are leading the gains. s&p futures, of 0.3%. euro stocks and ftse futures, up 0.6%. finally, standard charter is up

4.4%. let's dive straight into that story. first abu dhabi bank says it explored a potential bid for the bank. in what would have been a complex deal aimed at building an emerging markets lender with more than $1 trillion of assets. for more on this, let's bring in a senior finance editor, stefano biaggi. can you tell us what your reporters have been hearing about this deal? >> we have been speaking to sources, what they tell us is that fad-- fab they were working with advisors. it seems they were fairly serious about this, they haven't made a approach to standard charter. they are either looking at a full takeover of all the bank, or perhaps buying certain segments of the banks in certain

countries. obviously, as you say, standard charter command, the longer you are looking at it, they were for a significant amount of time. dani: what is this all say about banks and investors in this current market? stefania: i think it really shows the ambition of the banks in this region, and also the governments in this region. as we have been reporting for over the past year or so, these governments have been having record oil place -- prices that has given them the financial power to look locally. i think it is really demonstrating that nothing is off the table. we saw late last year that saudi national bank, they have become one of credit suisse's key investors after buying a stake there. who knows what could happen next. i think this just shows the ambition. it would have been a difficult

deal, but they were seriously considering this. who knows where they could go. dani: i was hoping you could tell me that, stephani a. does it seem likely that they will find a buyer in the middle east? stefania: as we have reported, under u.k. takeover rules, because they have come out with this statement, they can't go back with an offer for the next six months. except under exceptional circumstances. really, it leaves us wondering what will happen next. will fad look at another target for will standard charter become a target for other players not only in this region but in other regions? obviously we will try to report what we can. dani: we look forward to all of those reports. great work from you and. the team.

let's move to the political showdown drama in the u.s. where republican lawmaker kevin mccarthy has been blocked for the 11th time in his bid to become speaker of the house. is now the longest since before the civil war with no end in sight. a group of 20 gop dissents have yet to agree on a deal that satisfies their demand. winning is now is lulu, also the former deputy chief of mission at the u.s. embassy in london. what a week. so much has happened, i mean, nothing has happened. how do you see this playing out, knowing there is still those hardliners, will this end up with a mccarthy speakership? lou: it is really hard to say. my view is that it eventually does. it is getting harder and harder after every vote.

he has given the hardliners basically everything they have asked for. he has folded on every demand they have made. yet, none of them have switch their votes to support him. i am not sure, there are rumors in washington that there is a written deal on the table that will make the hardliners happy. hard to imagine what else he could give them at this point to bring them on board. it is an extraordinary situation, and a contrast between nancy pelosi and her control over the last two years, versus mccarthy and his inability to even get voted as speaker is quite jarring. dani: what would be the alternative? that is something i don't quite understand. at the end of the day, you do have 200 congresspeople who want mccarthy. how do 20 people hold it up? and what happens if you can't get the vote? lou: if he can't get the votes, the alternatives are that the democrats or some democrats across the -- across the aisle

and vote for a republican. and it sort of by doing that, push the 20 hardliners aside. because their vote is not necessary. or, an alternative republican emerges from congress to be the leader. the most likely candidate for that would be the deputy leader steve scalise from louisiana. he is very conservative. some of the hard-core group like him. he has been in leadership for some time, and they are very distrustful of people who have been in the establishment in leadership or long time. the final alternative, which is a little bit far-fetched, but there is nothing that technically says the speaker has to be a member of the house. it could be former president trump to be the speaker. they could find -- not president trump, that is not a realistic option. they could find a former member of the house for some respected republican who would be acceptable to all branches of that party and bring him or her

and as speaker. there are a couple of different ways this could go. hopefully we will find out soon so that congress can get to work and start legislating. dani: it is one of those weird constitutional quirks. let's go with scenario a. where mccarthy comes in but he takes significant concessions. it is easier for members of congress to raise issue with him, to vote him out, he has less power. what would be the biggest risk in that? lou: the biggest risk is the upcoming debt ceiling crisis. what this week has done is it has empowered this core group of 20 make america great again conservatives and they have already expressed their intention to use the upcoming debt ceiling to negotiate and to make demands of the administration of the white house. what i think we will have

is a scenario where congress has to vote to raise the debt ceiling, otherwise the u.s. will default. this group, many of which are more interested in reform and politics, will make demands of the white house. we could end up with a very serious debt ceiling crisis later this year. dani: speaking of the democrats, it remains -- they have remained very quiet on this. perhaps, rightly so. we have been expecting to hear from president biden as to whether he would run or not again. i gotta wonder, is this an opportune time to do this if there is disarray? lou: i think there is. president biden said he would think about it over the holidays. and make an announcement in the first month or two of this year. as long as donald trump is running, and he is, president biden will run again.

and certainly, the checks to position the other day between the disarray in the house with republicans unable to agree on a leader, and president biden in kentucky with mitch mcconnell showing the bipartisan spirit and showing he can get things done, was quite interesting. i think that was on purpose. this disarray on the republican side certainly helps joe biden's case to run again. dani: how does that issa rae translate in to continued support from congress for ukraine in 2023? is there any threat to that? lou: that is a great question. one of the things that concerns this hard-core group of congresspeople is that they don't like the amount of money we are sending to ukraine and they want to push back on that. and congress passed an omnibus bill last month, roughly $45 billion worth of aid to ukraine.

there is enough money in the pipeline now might it a while. when the does run out, this will become an issue in the house and congress. i think there are enough moderate republicans in the house and certainly in the senate that the aide to ukraine won't be jeopardized anytime soon. but, we will hear a lot more about it and they will push for oversight, which is fair enough. it is u.s. taxpayer dollars. we will hear a lot more pushback on this. it will be more difficult to get aid to ukraine, although i don't think it will be cut off. dani: really wonderful to speak to this morning. enjoy your weekend. coming up, we speak to eagleview capital management founder, neil burger. no relation. we will talk to him on his headphones -- had fun hedge fund

performance. this is bloomberg. ♪

dani: let's get some of your top corporate stories with the bloomberg business flash. china is planning to relax restrictions on developer borrowing, dialing back the three red lines policy that exacerbated one of the biggest real estate meltdowns in the country's history. bloomberg understands that beijing may allow some property firms to add more leverage, as well as pushing back the grace. for meeting that target. the easing could mark the most are medic shift in china's real estate policy to date. samsung's profit has dropped by the most in over a decade. it is a sign of the global economics lowdown that may be hurting electronic demand more than anticipated. south korea's largest company

has been a grappling, as consumers cut back. samsung's operating profit fell almost 78% for the latest quarter, missing the estimates by a wide margin. citadel securities raked in a record seven and a half billion dollars in 2022. capitalizing on last years volatility and raising its presence as one of the largest trading unit in the u.s.. revenue for the market making arm of the citadel empire jumped 7.1% from the previous year. citadel securities says it has now posted 12 consecutive quarters of net trading rented -- revenue. staying with the hedge fund and trading theme, a veteran traders well-timed bet on the end of easy money has achieved triple digits in his new hedge funds first full year. eagleview capital management contrarian macro funds sort about 163% last year, thinking

the market would fall down. i spoke to the hedge funds founder. i am sure there is a burger upon in there somewhere. i spoke with him about his outlook for the year. >> until markets stop being on a 45 degree angle to the downside, the price action is the bible. we are in a major bear market. i think investors fail to really see the forest through the trees, in that all asset prices continue to go down. whatever you might want to point to, knowing the change in posture by the central banks towards liquidity and a liquidity infusion posture which they had been in for the last few years. more recently, a response to the covid pandemic, that has changed 180 degrees toward a liquidity extraction posture. dani: though, to play devils

advocate, because we speak to people on bloomberg tv all the time who say, the fed is about to pause if not pivot. the economy is worsening, which will cause that. inflation has. so, the worst is over, and the market will therefore improve read what are they getting wrong? neal: i don't think they are getting anything wrong. i am in the moneymaking business. i try not to think about those sort of things. the market is going down, and if things change, i'm going to change. right now, i think the big story is central bank liquidity flows becoming a headwind against asset prices, whereas, they were a tailwind for the past dozen years. we can't predict where inflation is going. i think it is a futile exercise to try to predict that. i am just trying to make money. that is what i am tasked with.

dani: you, i would never ever try to predict that myself. so, when do you know the worst is over? neal: again, we have to look at market price action. this is not something that will happen in an individual day or month. when you see a area of time, when markets cease to be on a 40 degree on the downside, whatever you might want to point to, and things are to go into more of a sideways pattern or even towards an upwards pattern over a area of month -- period of a month. the market has done nothing right, so to speak, and has done nothing to negate that continued downward move. i think investors have to recognize, we are in the midst of a major bear market. until that changes, i will lay it that way. i personally don't get involved

in shorting individual names. i play more in the indices. i happen to be short s&p futures, euro stocks, 10 year notes, short end of the u.s. yield curve, recently started putting on shorts in japan in response to the bank of japan blinking. with them allowing the ceiling of jgb's to rise. i am sure -- short ag bees. i think that pretty much expresses what i need to express in the market. dani: he still short everything. that was neil burger speaking to me late yesterday. can lightning strike twice? can you get tripled it is again in 2023? coming up, what is in store for ipos in 2023? we will talk to reporters on that next. this is bloomberg. ♪

dani: let's take a look at some of the key things that we will be watching out for throughout your trading day. at 7:00 a.m., we will get insight into the health of europe's largest economy. we will get the latest germany factory order numbers are you 9:30, fresh u.k. data. just a short time later at 10:00 a.m., we will get the latest euro cpi and retail sales numbers. at 1:30 p.m., it is the big one, u.s. payrolls data set to be released. how tight does this labor market need to be? what does that pretend for a fed where we heard from a hawkish george yesterday saying that terminal rates need to go above 5%. let's talk about these capital markets. 2022 was a slow year for ipo's, and inflation, rising interest

rates, were stoking recession fears. so, can things pick up in 2023? let's bring that question directly to bloomberg deals reporter. 2033, can it pick up? >> unfortunately, bankers aren't feeling too optimistic. if you look at all the market headwinds, persistent. we still have high inflation and high interest rates. we have had a stronger start to market activity this year. there is a slight optimism, but overall, we aren't expecting a whole floodgate to open just yet. dani: things have slightly changed. but not enough. where have the bright spots been? swetha: globally speaking, the bright spot has been china and the middle east. the middle east is what is

keeping the bankers busy, really. they are spending way more time in the region now, allocating more resources to the region. higher oil prices early last year set off the boom. there is a strategic rate as well. they want to diversify, they want to move away from the crude assets. we are seeing a whole lot of sense go public, a lot of privatizations. we are seeing startups in the region. it is really astonishing that we have seen that there. dani: that is the overall macro level. what are some of the top deals we should be looking out for? swetha: isramco trading, these are all these big, really large state backed oil companies looking to monetize all their assets. dani: though, oil will still

reign supreme. really wonderful reporting, highly recommend you check out her piece from our bloomberg deals team. one of the big market moves that we are keeping our eye on this morning is all things japan. we are looking at a yen that is falling this morning. the yen currently down by 0.5 percent, versus the dollar. there is a bid into japanese bonds. the five year yield is down by about one basis point. we have had basically all week and since when the boj widen their upper limit for the bond yield, we have folks betting that there would be more tightening read there seems to be some pushback this morning are you people familiar telling bloomberg that the boj is not in a rush to adjust the yield limit again. the reason they are saying they would adjust it, is for market function. the boj first wants to evaluate

the impact of the move last week before they go at it again. it is unlikely that they have a consecutive month where they widen the trading band again. they have spent a whole lot of money defending the new yield, perhaps there is some hesitancy to go at it again because these incremental moves, they are just so, so expensive for them. we will keep an eye on that as elsewhere, markets are quiet as we await jobs data read 1:30 p.m. u.k. time. bloomberg markets europe is up next. this is bloomberg. ♪

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anna: good morning, welcome to "bloomberg markets: europe"