>> this is bloomberg daybreak: europe. i am tom mackenzie. these are the stories that set your agenda. manus: nasdaq leads a wall street extending the rally with big tech earnings set to kick

off. an edge in ai. microsoft earmarks $10 million for spending on chat dbt. -- chat dbt. google could be facing a federal antitrust case. lagarde doubles down on her fight against inflation as more ecb speakers pitch in for 50 basis point hike's. tom, good morning. welcome to the early show. i will give it a go and chinese. [speaking foreign language] happy new year to tom and his family. a spoonful of optimism helps the dollar go down and yields to compress. tom, good morning. tom: good morning. you got 90% of the way there. that was a good effort. divergence between the central banks is becoming clearer is in it with ecb madame lagarde coming out and reiterating her determination to get back down to that 2% target.

it's all about technology this week as well as we gear up for those earnings. another storming day for nasdaq. will check in on the markets. the gains you have seen across the nasdaq are 5% the last two days. semi conductors is a big part of that which is why put the philadelphia semiconductor index and they. gains of 5% yesterday in a single day. this on the back of an upgrade by barclays to welcome amd. barclays saying that the worst of the chip route is behind the sector and that fed into the rally for the nasdaq. also optimism from some of those investors around the job cuts and cost cuts across the tech sector. a good question is is also flagging potential weakening demand? in asia, major indexes closed for chinese new year but gains of six tens of a percent soap strong upside in japan. futures in europe are way up.

-- as we way up the comments from magnum lagarde about further sizable hikes of maybe fit is -- 50 basis points. gains of three-tenths of a percent in terms of european futures. maniscalco -- maniscalco manus: high-yield investment grade and stocks saw the inflows but if you look across what is happening, it is if you --. default. three-month tea bells in the u.s. of america. if you are in any downgrade, perhaps they will act as a haven as they did in 2011 however, there is a warning that bonds may not be the haven in a downgrade or default. it defaulted u.s. debt but the dollar rose on a spoonful of optimism of global growth. guard doubles down as you say on that deep basis point move from

the ecb. they are going to stay the course. we have put on 250 basis points the fastest six month rise in rates and history of europe. bitcoin not to be outdone. there she goes. she is up 36% so far this year, a four-week rally. it continues this morning up six tens of 1%. post lunar new year, 100% win rate for bitcoin. we are all in on risk but are we over our skis and just too excited, tom? tom: quite the track record for bitcoin. we will see if that continues and repeats. let's get to our reporters around the world. we are going to look ahead to those big tech earnings. derek while bank will hit on the latest u.s. china trade tensions. manus: it is about those tech

earnings as you said. microsoft and texas instruments are due to reports after the close. some traders are bracing for the sector worst earning slump when he 16. joining us now for berlin -- from berlin is aggie. a tough environment for microsoft. job losses already on the slate. how topple earnings? what are you hearing? aggie: the consensus for microsoft is this could be the slowest quarter for revenue growth in six years and that is a big concern for the company, especially off the back of these recent job cuts. microsoft was one of the many tech companies that we have seen announced job cuts recently, 10,000 jobs at microsoft to go. having looked at so many different job cuts announcements lately something that was notable about microsoft's move

is that they try to communicate it as a strategic move while removing jobs from one area and they would go to put jobs elsewhere. that is in ai. that is bolstered by the decision yesterday and announcement to invest $10 billion more into the open ai platform that provides chat gpt, which is a big bet on the part of microsoft which we are hoping to hear more communicated about after they announce their earnings after markets closed today. that is going to be a crucial strategic move for the company as they look at what sort of technology open ai has that can support their own products whether that be being or a sewer. manus: this is a fascinating evolution in terms of integration of ai deeper into microsoft's portfolio. aggi cantrill , thank you. lagarde said the central bank will do everything necessary to return inflation to his goal.

significant rate hikes are pointing to at coming meetings. we are joined by the economy reporter appeared lagarde doubling down on the hawkish rhetoric it seems. >> good. madame lagarde has been very specific in saying that staying the course is her policy mantra for the foreseeable future. if there had been any doubt on another .5 point hike at the that during meeting, those doubts have been dispelled. there were too many. she was already clear and december flagging another half point hike. that all seems to be centered on the ecb on course for that. come march, the situation and debate will be a lot more complicated, and we have seen that over the past couple of days in the comments by the

governing council members. we have seen everything from we need to be more gradual and careful not to tie it in -- tighten too far. we need multiple 50 basis point hike's in the first half of the year. so, the gap between those policy makers is a difference of opinions and is widening which has to do with the fact that the economic outlook remains uncertain. new forecast are available in march, and they will play a big, big role in where the ecb is going. if we have learned anything, the commitment to get inflation back to 2% as they are, whatever that means in actual policy stance. manus: then of course we are waiting for the pmi's. there is a big bloomberg story this morning that perhaps there may be a little bit of less bad synopsis for us to absorb in the u.s. and europe. what will they tell us because last week it was emphatic that no recession in germany. jana: that is certainly a bold

call. we have seen a very, very first estimate for the fourth quarter that was along the lines of more or less stagnation of course appeared we have not seen a lot of december data, so that estimate stands on shaky grounds. but what is clear to say is that the downturn, although the slow down and the economy that was expected over the winter, is not going to be as deep as feared. that has to do of course with warm winter weather in november and parts of december with consumers being out and a fiscal aid kicking in. i don't think we have seen the worst. a lot still to come. winter is to long. it's very cold in germany right now. but certainly, the data gives some hope for optimism that we might avoid a bigger slump. tom:jana, thank you very much.

jana randow keep an eye on these pmi's as they come. tom, breaking news. how did the china numbers go? tom: wrong china sales growth in january. for the full year operating profits and sales missing the estimates. it's not a huge mess. it is a mess though. coming in at 1.1 6 billion swiss francs. the estimate had been for 1.2 billion swiss francs. in terms of sales, that was also a mess but they do safer 2023, strong sales growth in all regions and segments. you have context to add into this, manus. manus: swatch is not going to be the price point that cartier is but use our reach more and burberry last week -- reach more the owners of high-end watch brands and burberry said that china's spending is binding.

unity spending, revenge spending. reach more -- reach more seeing a return for demand in china. the reopening there. read revenge spending, revenge luxury spending as swatch and richmore that area. let's go back to the main story in the biden administration confronting china and the government with evidence that suggests chinese state owned companies providing assistance to russia's war effort in ukraine. let's get to derek. what can you tell us in regards to this accusation from the u.s. and what substantiation do they have? derek: there is not a ton of detail here but let me give you what we can give you, which is to say that art peter martin and jenny leonard arp reporting that we are talking about nonlethal military aid and economic

assistance that stops short of wholesale evasions of sanctions of the regime. it is worrying enough that the u.s. has raised the matter with chinese counterparts. this puts a little bit of maybe a damper on some of the warming that we have seen in recent months since joe biden and xi jinping met on the sidelines of the g20 in bali. we have seen a lot of senior leader meetings, both happening and scheduled to happen. you had the janet yellen meeting recently in -- and blinken is supposed to go to china and the coming weeks. this sort of -- it's been in very auspicious start to the year as china goes both in the market and warning -- warming relations that they have had with the u.s. and others in tone. but there are really some concerns around the sides on actions and what this means.

this is a good moment for everybody to take an understanding that some of these differences really do exist. they are real. everything is not just because it sounds happy on the start, doesn't mean that every single problem is fixed in the relationship. manus: of courses had been a key concern within washington as to how much support china would ultimately give russia. this is a and important story to watch. thank you for the update on that. bring us the latest, derek wallbank out of d.c.. let's take a look at the key things markets are focused on today. data on u.k. public sector net borrowing. at 8:00 a.m. u.k. time, ecb governor councilmember not due to speak. he wants to speak on what he will see in terms of 50 basis point rate hikes. 9:00 a.m. we have pmi's with the u.k. at nine: 30 am.

the u.s. a little later. that will give us some flesh on the bones are on the picture for the economy in both europe and the u.s.. 9:4 five u.k. time madame lagarde will deliver a video message in a conference in croatia. microsoft reporting earnings at 10:30 yen u.k. time kicking off a significant week for the tech sector. manus: tech sector having major strides in job cutting over the past number of days. coming up, tech stocks and focus. they feel gains on wall street. tom, will he have a less aggressive federal reserve? we talk markets. this is bloomberg. ♪

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>> as bearish as we are on earnings in the near term, we are more bullish and 2024 because we think we are in this boom, bus, boom environment. if you agree with our earnings call next year, you almost have to agree with our earnings call this year. the market will work through that. morgan stanley cios speaking to bloomberg. manus: tom, tech stocks led the market higher overnight. less aggressive hikes from the federal reserve. let's see whether river thompson chief economist at kingswood is a buyer of this boom, doom, and

let's say revision to boom again. good to see you this morning. we have seen the largest inflow into risk assets since 2020. high-yield investment grade stocks. they are all flooding in. is it a little bit too much too soon given that some of this data is going to be really tortured? rupert: we are very much in that camp at that as you said the risk on rally has gone too far too fast and is too soon. we can't forget that the risk on rally followed the real thing at the time. last summer we had a strong risk on rally. yet it all into reverse. certainly we think there are two things which the market is taking a decidedly optimistic view on the first is the fed and the fact that they are going to be cutting rates throughout the year which we think is unlikely. the second is how much earnings are going to fall or as a market

thinks that they are not going to fall. we think the risks are on the downside. it is too far too fast. tom: part of that, the recession risk in terms of the earnings recession, again the morgan stanley's mike wilson flight for 2023. you aligned with that view. where you see that pain point coming through most acutely? rupert: earnings have held up better than expected so far. the reason why we think there's a lot paint yet to come because of two main reasons are the first is their has been supported so far but the fact that inflation is been running at high levels. they had been supported by the fact that revenues have been growing fast. inflation is now slowing. the bad bits of inflationary profits continue which is a wage growth, but the price and producing price inflation is falling. margins are coming under pressure or increasing pressure. at the same time topline growth is slowing.

those are the two main reasons why we things earning -- think earnings growth has held up already far. manus: the question is last year could you live without china in your portfolio? the question you've all got to ask ourselves as economists and asset allocators is how much injury will i do to the portfolio if i live without china? monster rally's in a and h. the majority of it has been in the h according to blackrock. if that will broaden beyond tech and h, it will broaden. how much china are you prepared to take and what kind of growth rates are you penciling in? rupert: the danger is not having h. we have had a 50 tech rally in chinese equities from the october lows but that is from the october lows, a very big selloff. in terms of how much we have gained of previous drawdowns, actually looking from that

perspective, you've got further to run. i think what people are focusing on is which economy -- which of the major economies is going to be picking up this coming year rather than slowing down? valuations yet expensive? no, they are cheap. anyway, china and as a result of that, asia generally is easy call. you want to be overweight in china and asia even though they have come back quite a long way. tom: i and asia are the people -- easy call. can you elaborate on that? do you want exposure directly to asia or do you play it through for example, european luxury, european autos? how do you take a position on china? rupert: h shares are good way of doing it. they have lagged. at the moment, you have the surge in covid infections, december numbers showing activity holding up.

the fact of the matter is at the moment at least, activity is depressed because of the covid infections. if we are right and most people are expecting activity does pick up quite strongly, domestic economy picks up quite strongly, then a shares are the area which should benefit most strongly from that. i think there is definitely room for the a share market to catch up. also luxury goods market. chinese to messick consumer has not been able to spend for the last year. both of those are good ways to plan the chinese recovery. manus: we are full of euphoria and optimism. people were looking at traders out of the normal situations looking at war in october. we have left that. what actually happens in terms of the bigger risk trade? we had oaktree come on and say the best start to the year for some of the high-yield moves that we have seen since 2009.

there is going to be a slow down. we are all a little bit too optimistic so therefore, it is high-yield just a little bit too over enthusiastic? rupert: i 100% agree. again, just look at the levels spreads normally are in a recession. a hundred or thousand basis points. we are half those levels. we are less. we don't have to think that there is going to be a major recession. just think that the whole risk on rally will produce equities and high yields and it has gone too fast. there's good reason why spreads if you have a recession are not going to wind down half as much as they have done in previous recessions because there's a much better place but having said that spreads are not discounting any recessions at all and we think there's going to be a mild recession. manus: rupert thompson ok.

kingswood holdings at. when he rally has run too far at this stage. thank you for your insights. coming up and $11 billion case and the uk's high court could threaten africa's largest economy. we will bring you that story later in the show. this is bloomberg.

>> this is daybreak europe. let's get you a quick check of the first word news. the u.s. justice department is said to be poised to sue google as soon as today over the search giant's dominance over the digital advertising market. bloomberg sources say the case is expected to be filed in federal court before the end of the week. the lawsuit will mark the justice department's second monopoly case against alphabet.

google has said the market for online advertising is crowded and competitive. turkish president erdogan says he will not support sweden's bed to join nato. the announcement came after protesters in stockholm burned copies of the crime and turkey had agreed in principle to sweden and principal joining the alliance. they went on to demand concessions from stockholm. next month, a hungry is expect to become the final nato member to ratify the cabinets leading turkey. bloomberg sources say the u.s. has confronted beijing with evidence suggesting chinese state-owned companies may be providing assistance for russia's war in ukraine. we are told the legend support consists of nonlethal military and economic assistance that stops short of wholesale and -- evasion of sanctions. 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. manus: simone, thank you very much. coming up, microsoft loosens the purse strings to invest in the company behind artificial intelligence to chatgpt the call center call will never be the same again. b(jennifer) again. 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 so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4. before golo, i was hungry all the time

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manus: it is daybreak europe with me, manus cranny in dubai, tom mackenzie alongside me in london hq with the stories that set your agend. tom: big tech earnings are set

to kick off. microsoft announces 10 billion dollars of spending on chatgpt. bloomberg learns google could be facing a federal antitrust case. lagarde doubles down on her fight against inflation, as more ecb speakers .2 a 50 basis point hike. some divergence between central banks as markets start to price 25 basis points from the fed, as ecb officials push back on the doves, madame lagarde saying at least another couple of 50 basis point heights, determined to get back to that 2% target. manus: that differential drives the euro higher and causes the dollar to roll down. kit dukes' line caught my attention, a spoonful of optimism causes the dollar to go down. 250 basis point, the fastest hiking trajectory from enter

central bank in history. the bloomberg dollar trading down an eight. where you go on the prospect of i'm not calling default, but a bit of a downgrade on the u.s. debt ceiling before we get there, where you want to become short end of the curve, six-month will is perhaps where you hide. the bond market acted as a haven, it will not be obligated this year, they called for concern about this location. -- dislocation. and bitcoin a mozzarella, up 36% this year after the lunar new year. the crypto winter, it looks as if they are taking off their fire. tom: despite the travails of the winklevoss twins and gemini, having to cut headcount. but bitcoin has been on something of a tear, that risk on view, softer dollar plays

into that, the fed stepping back to 25 basis points, that is what we are seeing across the tech sector, solid gains, nasdaq with gains of 5% of the last two days , ending up just above 2%, 3% in the last trading day friday. we haven't upgraded around some of the main semiconductor makers, the likes of amd, and qualcomm, barclays saying the worst of the chip rout is behind us. that tied into optimism around the nasdaq. the s&p itself ended up above the 4000 line that many see as essential, it has now added 12% since the bottom in october. when it comes to futures in europe, we are setting up for a fourth straight day of gains, futures pointing to gains of .4 percent. a solid session in asia, up .6 percent, driven by tokyo with the caveat that many indexes are

closed for lunar new year in europe, optimism despite the commentary from level -- from lagarde around the need for further rate hikes. manus: she is not for relenting, the job needs to get done. text is front and center, microsoft reporting earnings later today. they are about to invest $10 billion in chatgpt, the maker of openai, building on its backing in 2019 and 2021. it will give access to some of the most advanced artificial intelligence systems around today. we're going to take you a world beyond your average call-center response. aggi cantrill is with me in berlin. this may be my moment in angst in chats with customer service, maybe they will come alive, tie it together, why is

microsoft rolling the dice in this area? >> so, the big move on microsoft's part is that firstly, it is worth noting, this is the third investment, this 10 billion dollar investment in openai, the creators of chatgpt. what is important to note with this investment from microsoft is essentially what we're seeing is they are looking at a way to make them competitive in the big tech environment. there has been a lot of talk about how this could support microsoft's cloud computing platform, especially as bloomberg intelligence put it, to close the gap between azure and aws. we are looking at implications microsoft could find for openai to offer products to users of their other platforms, whether that be bing, linkedin, or get

help. right now it is more of a russian of this huge bet they are making on openai, with the potential for future. but this is a company that is a kept profit company, which means there is a complicated relationship with how much investors can get a return on investment through this $10 billion microsoft is putting into the company. it is more a question of what is the potential for this ai going forward, and what potential microsoft sees for its own suite of products. tom: it's going to be really interesting to watch on the likes of alphabet, parent company of google, and others respond to this potential challenge from microsoft and its investment in chatgpt. talking of tech earnings more generally, a big week, and a stress test for the broader

markets, what are you and the team looking for? >> essentially, we've seen so many tech companies, including alphabet and microsoft, having recently announced job cuts, significant job cuts. there has been some expectation that this is for weathering a storm going forward. that there has been slowdown for tech more broadly. not only on of the big tech players, but also some of the startups we cover in europe as well. what we're looking for is a communication of what that looks like going forward. you have cut these people, that will cost you a lot in terms of severance. in terms of severance, you have decided to allocate those funds do have a nobler staff -- nimbler staff into the next year, so what is that mean in terms of strategy for the next year?

tom: just on the jobs question, and you touched on some of the elements at play, there is a view that yes, the job cuts and cost savings are potentially positive, that has fed in optimism, but other executives are concerned about a drop off in demand. how are you thinking about the way they are approaching adding headcount -- cutting headcount? >> this needs to be done on a case-by-case basis. sometimes some of the job because we have seen, they are following a trend that essentially, there is broader concern in the market, therefore you are cutting between six and 10% of your staff, preempting a potential downturn. then there are other companies that have done it as a strategic move. microsoft is notable in this way, saying they are cutting

staff but also adding in other areas, especially ai that is a focus of their investment. you also see this when amazon announced to their job cuts, they said it would be essentially in their retail space, and that is not going to be affecting aws as much because that is seen as a greater focus for them. but then there are other companies where you see this is more just general worry in the market, concern for guard turn -- downturn, and some of these company's maybe preempting the fact that they may have over hired during a time during the pandemic when things went very well for big tech. manus: perhaps a little too bloated, but that is the same story with goldman's as well, they had grown so much over that period of time, now reality bites, return on equity is king, or queen, as the case may be.

let's get up to speed, with the business flash with simone. simone: ford plans to cut 3200 jobs across europe, with the majority concentrated in germany. the cuts affect roles in product development and administrative areas, as/is costs -- as ford slashes costs and switches toward electric vehicles. the qatar investment authority boosted its stake in credit suisse to 7%, it becomes the swiss bank's second-largest shareholder just behind saudi national bank. a to billion dollar convertible note in issuance help shore up its balance. apples long-awaited mixed reality headset attempt to read

a 3d version of the iphone operating system. it will include eye and hand tracking systems that could set the technology apart from other products. the device, likely to be called reality pro, is due later this year and is expected to cost around $3000. tom: coming up, we are in cannes, where europe's biggest private equity conference is about to get underway. dani burger it will be joined by the tikehau capital ceo, thomas friedberger, that interview is next. this is bloomberg. ♪

manus: it's europe's biggest private equity conference

getting underway in cannes. she got the ticket to the south of france, i go to the mount is where it is subzero. dani, take it away, good morning. dani: cruel world in the snowy alps, i am in the almost sunny southern france. joining us now is thomas friedberger, deputy ceo of french private equity fund tikehau capital. great to speak with you this morning. we are at ipem, this conference took place not long ago in september, and at it, your co-founder mathieu said the industry had not yet seen reality when it comes to deal valuations, has reality sunken in? thomas: it is starting. there are reasons for that, interest rates, short-term interest rates will buy more

than 400 basis points, in europe, 200. it is probably beginning, it is not the end of the world, it is okay. dani: how bad does it get, where are we now, and how much further does it fall in terms of valuations? thomas: multiples in a rising interest rate environment have to at least go down slightly. any kind of increase does not prevent the industry from showing increases in valuations, but those will have to be justified by better businesses, by increases in ebitda. there are sectors that are extremely resilient. dani: which are those? thomas: the sectors focused on megatrends, concentrating on high-growth, those megatrends are helping companies in the

world build resilience, for example, cybersecurity, energy transition, digitalizing industry, those sectors are experiencing very high growth and it is probably a long-term trend despite the economic cycle. dani: you have to focus on companies that can deliver growth, but it used to be as a work of mathematics, cheap financing meant anything would go up, as long as you could use but cash flow to pay down the debt, so does the math of dealmaking change if cheap financing is gone? thomas: when the storm as they are, you have to be strong in your basis, in our case, it is picking and doing your own financial analysis. those trends of lower interest rates, globalization, optimization, this time is over. it doesn't mean there is no value to create. there will be a lot of opportunities both on the basis of lower valuations in sectors

that are suffering, and on those megatrends still encompassing most of the growth. it will be less easy, but at least we see a lot of dispersion in performance. dani: what does it look like for the industry, that dispersion, are there funds closing, is there more consolidation? thomas: we think the industry globally is consolidating. the distribution modes are changing, with more axis to -- access to non-institutional investors, which is a good thing. and the cycle will show that the alignment of interest is important, something we do because we are very capitalized, we have more than $3 billion of

shareholder liquidity, about 4-5,000,000,000 euros, so we put our money at state so we will be the first to suffer if there are investment mistakes. we continue to look at capital, but they will take much more care about the amount of interest. dani: are you thinking about that across fundraising, we heard from carlisle, for example, they have had to extend their fundraising to lengthen the timeline to hit their goals, is this the norm for 2023? thomas: everything is slowing, we are probably entering a phase of lower growth globally, which will last decades probably because there will be less optimization, which means lower growth, but we have to cope with that. most of what we do in private equity is investing, and on that front, things are not slowing at all, hence those megatrends i

was talking about. dani: we mentioned financing and the idea that there is less of it. you spent a long career in banking and debt markets, how bad would you compare this current period in terms of difficulty to get leveraging for financing deals? thomas: it is a classic cycle. knowing that the last one was a banking crisis which was not a classic cycle, nothing to compare with 2008 to be precise. our financing levels have increased, so it is easy to get leverage. it means you have to do with that. in our case, we don't use a lot of leverage because we provide partnership capital to entrepreneurs, long-term investing, so it is not necessarily an issue but of course, higher interest rates are slowing the pace of capital return.

dani: why is it not a bad thing? thomas: because this beat of return of capital was not normal -- the speed of return of capital was not normal. everybody in the industry was saying invest for the long term, but the capital was coming back very quickly. it's not the norm. the norm as you have to invest long term, be patient, and give time to companies to create value not by financial engineering but by being good at your business. thomas: there is not a lot of people that would say that. it is good that things are not returning as quickly as they were. thomas: i am saying over the long-term, that is the only way to be sustainable. dani: thank you so much for joining, hopefully, the wind stops and you can warm up for the rest of the day. that is thomas friedberger, deputy ceo at tikehau.

manus: you went long enough for the dawn to break, and the yachts to be seen, dani burger living large in cannes with the tikehau capital debbie ceo. more from dani throughout the day at the ipem conference. she will catch up with the chief economist for allianz later on. tom: i spotted your got in the back shot. an $11 billion case could threaten africa's largest economy. this is quite the tale. ♪

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manus: the u.s. treasury secretary is urging zambia's

creditors to restructure their debts on her visit to the capital. she said it is critically important to address the issue straightaway. zambia became the first pandemic era sovereign to falter in 2020, since then it has revamped external debt. yellen's next stop will be south africa, where she will meet with the president. tom: the nigerian government could be on the hook for a debilitating $11 billion payout in a trial at the u.k.'s high court. let's get more details with jennifer, how did this case in -- case end up in court? >> debilitating is a good way of saying it. this company, p&id, is the one that has been coming after nigeria for a decade.

there are a british virgin islands company with no other assets outside of this potential arbitration award they could be awarded. both parties are claiming different sides. the company is saying nigeria never came to the table and fell through on the contract that was signed. but government is saying the contract was obtained illegally, and fraudulently, through corruption. what we're going to be hearing over the next eight weeks as this court case continues to develop throughout the u.k. is what these two sides are still climbing. you mentioned $11 billion. prior to that, the arbitration award was initially $6.6 billion, so it has been accruing over time, and not coming at a great time for the economy itself. manus: i cut up with the economy minister last week, i put the inflation problem to her, the lack of growth, the debt sustainability problem, and she

batted them all away ahead of the election, but what would this court case mean for nigeria's economy? >> i think the key point is that this $11 billion is a third of nigeria's foreign exchange reserves. the country cannot afford this at this point, they have already been dealing with fx issues. he spoke with the finance minister about this. they have been struggling with revenue at this point, and this struggling with revenue at this point, and this could send the economy in a tailspin. inflation right now north of 21%. 80% of revenues at this point is being dealt with for debt servicing.

so, if this continues to happen and the judge rules in favor of the company, we could -- it'll be interesting to see whether this next administration that is supposed to come in the next month or so, continues to put up a fight, because they cannot afford this at this point in time. manus: bloomberg's africa correspondent joining the team in london. up next, "bloomberg markets: europe", they will discuss the ecb's effort to bring inflation back to line. tom: ma'am lagarde saying she will double down. plenty more coming up. this is bloomberg. ♪

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