dani: this is bloomberg

daybreak: europe. i am dani burger in london with manus cranny in zürich. these are the stories that set your agenda. >> gains in u.s. pave the way for a quarter rate hike by the fed today. stocks and users. early-season disappoints. snap plunges in late trading after forecasting its first ever quarterly revenue decline. the next report. winter of discontent. the uk's most industrial action in a decade. it shut schools, cripples the rail network as half a million people strike over pay. dani burger, good morning from the land of the drugmaker, novartis just up the road and delivering their numbers for 2023. they see growth in load -- low mid single digit. the first quarter is lighter than the market estimated at 12.6 9 billion. the estimate was for 13.08.

we will break into these numbers in a little bit more detail. we want to know the state of play with sand off the generics business. in selloff or standoff? good morning. dani: good morning. amid the novartis breaking news we are getting other earnings coming in with third-quarter income a solid b. the estimate was 456.5. this comes off the back of baker's departing from nomura. a sizable beat from the bank and have had a lot of banking conversations and the seal conversations continue. manus: absolutely. just a couple of minutes away from here we will catch up the ceo of novartis. he joins the team at 730 london time and 830 for those in zürich. dani, a found a great quote. you're going to love this one. that's get to them on market. i love this. the bond market is in lala land. inflation back at 2.5% and fed

cutting to two point 57% and real yields at 0% in 18 months. it is the immaculate disinflation without a recession. good morning, dani. good dani: morning dan -- manus. i would argue we had the labor cost index coming down yesterday perhaps immaculate disinflation but it is not so crazy. let me take you into this equity market speaking of which because we are of course bracing for the big one today. it is a fed decision. asia stocks continue to climb. we had a positive number coming out of the gaming considering the reopening. here's a fun fact for you manus. in the index of global stocks, as a ux is on its best start for the year. more sour when it comes to the u.s. session. manus, i put the question to you. we had a very strong start to the year. what one does that? is it the fed or earnings? we have a preview with that with snap yesterday tumbling 15% post

market after forecasting its first negative corner of revenue. manus: dani, the only thing that will stop this monster reappraisal of risk is something emphatic from the fed, which defies those expectations of rate cut before the end of the year. some say it will not break structural inflation. i will give you the redhead line from novartis. the redhead line from novartis is an earnings beat that is a sizable one. one. 52 versus one. 41. a spinoff remains on the second half of this year. we will dig into those i'm sure as the morning goes on. across the assets, the question is whether the bond market is in lala land. we wait for the fed appeared with a step down to 25 basis points and what guidance they give? if you look at oil, the president of opec is saying they

will be careful with the monetary committee we expect no change. air travel and china is up 80%. a bullish concoction on oil. the dollar might need something more than a softer aci. they mainly reaffirmation in the payrolls number later on this week before they really take the dollar down further. if you're looking for the triumphant arrival assets of 2023, never mind your ig bonds, never mind nasdaq up 11%. go on bitcoin up 40% a quarter of a billion dollars. that is a state of play on risk. dani: bitcoin, can it sustain that rally given what we are about to get today? speaking of which, let's dig into it more. our top stories include today's fed meeting. we will discuss that with paul dobson. peter sunday is with us to give us the latest. tom mackenzie down the road as a u.k. fresh -- faces fresh strikes. manus: fomc is set to raise the

benchmark by 25 basis points. jerome powell getting further hikes on the table and optionality is key. let's take a listen to some fed officials and what they have been saying. >> i expect that we will raise rates a few more times this year. >> monetary policy has more work to do. >> a favorite toy five basis point increase at the fomc next meeting. >> hikes of 25 basis points will be appropriate going forward. >> expect to continue tightening policy passes meeting. >> the fed will have to maintain rates at high enough levels. >> the policy will need to remains efficiently restrictive for some time. >> now at some point this year, i expect that the policy rate will be restrictive enough that we will hold rates in place, just hold them in place to let monetary policy do its work. >> we can and if necessary should adjust our overall policy strategy to keep financial conditions restrictive even as the pace slows. manus: dobson is our executive

editor for asia markets. paul, good to see you. the base case today is 25 basis points but it will be the rhetoric that goes with it. what is the base case of the people that you are speaking to? >> yeah, manus, you heard it from the fed officials there aired the base case is very -- fairly unanimous that it will hike i 25 basis points. we to further hikes from here. powell in the past -- press conference will stress of the job is not done yet and the fed is serious and will get rates up and keep them up. it is not going to be cutting and a second half of the year until it is completely confident that inflation has been vanquished. that is the base case as far as investors are concerned. dani: if you listen to mohamed el-erian they should be going to more than 25 basis points. paul, what might a surprise look like? what might a deviation look like and how would markets react to that? paul: yeah, i think a hawkish

surprise would have to be something as extreme as a 50 basis point hike when the market is posed for 25 to really jar at the markets. if you look at volatility across asset classes, has been coming down and is now just about the lowest has been any point over the past year. markets are really settled at the moment into this past now and pretty complacent most aired i think you may want to watch out for more in terms of where the market and take its cue is if there are any changes to the dovish side in the statement. if the fed drops a reference the ongoing tightening for example, or something like that, given the frame of mind of investors this year of the bonds of bowl mentality that we are seeing, that could be the sort of thing that investors latch onto and push the deals even further and weaken the dollar. maybe that's good news for equities as well. dani: reference back to manus,

perhaps the lala land and perhaps the exit the environment. paul, thank you. 7:00 p.m. u.k. time is when we will get that fed decision. let's turn to a dominant. the stock slump continues as a key -- share sales failed to lift the mood. joining us for more is p.r. at sign j in mumbai. it seems to have gone well but i am looking at another day of painful price action. >> it is true because the last day powell managed to give hundred percent subscription that is the key game changer was when ise came out in public saying they were interested in investing 400 million and ipo. they encouraged other pension funds and indian investors to make the safe pio -- po but the

market is not very happy. a third of total adani companies -- they are expecting the could be pickup in the broader sentiment that would be ok and other groups will be back and that is what analysts are expecting. we are also waiting to get more names and bigger names participating in this follow-on offer. it is a developing story. manus: abu dhabi stepped in there and backstopped with a vote of confidence. thank you very much pj sanjai a reporter on the adani story. to the u.k. expecting sniff can't disruption today if you are traveling to work. half a million workers are walking out of their jobs and the disputes are overpaid. tom mackenzie is on the streets at kings cross, the hub of the rail connection into the capital. tom, what can the u.k. residents and commuters expect today into london? tom: ennis, of course you are

focused on the central-bank action today and rightly so but this is the important thing. you can draw the link and line between the central-bank action and what it will be happening on the ground and the u.k. because here is the mismatched. template 5% inflation -- 10.5% inflation in the u.k.. that is the disconnect and pinch point. that is why we are here at kings cross, a major pain point across a railway system today. national rail telling us that at least 80% of the services are likely to grind to a halt today. this is a major escalation today in terms of industrial action because for the first time, you are having the major unions coordinating on strike action. 500,000 people have the mandate to strike today. it is not just the railways. it is also the civil service around 100,000 people. it is also unions as well in terms of the universities. it is ports, railways, and it is airports as well with the

destruction that will be felt. i have not even mention the schools. hundreds of thousands or at least tens of thousands of teachers going to be on strike. thousands of schools are going to be closed. it is a significant -- we have seen six months now the industrial action across the u.k.. is the most severe industrial strike action we have seen since the 1990's, since margaret back -- thatcher was in the waning days of her power as prime minister. the unions and government are deadlocked on talks. dani: no light at end of the tunnel yet. bloomberg's tom mackenzie at kings cross station. we'll come back to him later. first let's take a look at key things we we watching out for today. it is a busy day. 10:00 a.m. u.k. time a fresh batch of european economic data that includes latest inflation figures for italy in the euro area. will it go the way of spain and surprise upside? at 3:00 p.m. it is the return of the u.s. with ism manufacturing numbers as well as else. manus: a lot of people are

concerned that there will be a second wave of inflation as china reopens prices rise. that is a risk. at 7:00 tonight we will be drooling over the fomc statement as they reveal the latest decision. we will get more earnings as well, dani. you had that implosion tonight. it is meta-. they reported after the bell closes. coming up we will discuss that fed decision with aberdeen's investment director james athlete. he joins us next. dani: we will talk about amd and snap earnings. snap declines amd surges appeared will deal -- take into tech earnings. this is bloomberg. ♪

's >> the trillion dollar question is what will happen to global inflation when china really comes back on stream and start to consume and the way they have

done in the past and so on? will that drive raw material prices and will it impact inflation and the rest of the world? so that the tightening will continue and perhaps even accelerate? that is the biggest risk to markets. the market is not expect that and if that happens, we will have a big letdown. manus: deutsche bank investment manager and ceo there on the inflationary risks to equity markets. let's stay with inflation be a the conversation with jeffrey gundlach. he has suggested that the fed will push back against the justin's and halt -- the rate of increases and halt. james, good morning. are we all deluded? does the fed need to get its hawk on in snarl as john says this morning in an opinion

column? are we to far over our skis on rate cuts by the end of the year? does he need to snog or coup this evening? james: would prefer to air on the side of snarling rather than cooing. i would agree that it has slightly evolved the message that we got from the ceo there. the biggest risk to markets is markets themselves are the reason that jay powell may need to push aggressively back is because not just there are cuts priced in the front end of the bond market. i think to some degree that is reasonable. inflation market is telling us that headline inflation will be 2.2% by the middle of this year. there are strong reasons to suspect that we are headed into a recession. ism services fell sniff kelly. new owners -- new orders fell by 10%. that will lead to a much less

inflationary environment appeared the problem is what equities have taken from that message is the fed is not so hawkish. we have nothing to worry about. without considering the economic weakness, which leads to that situation. so the biggest risk really here is markets. i also agree on the china point. that is a risk but again, mostly that is a market risk. that is market disciplines taking an old china plane -- market disciplines taking an old china played book. i suspect this is a different china recovery. it is more consumer driven and less investment infrastructure and debt driven and therefore not as big a driver of high commodity races. dani: ok, so china is different this time. looking at the economic data, james, to your point, labor costs trailed estimates, energy costs have retreated. the price of core goods has declined and the housing market is cooling. this is data that is showing that the fed can stop. it can pause a does it really need to push back against

markets? again, if the economic data has begun to be loud and clear? james: the actions they are telling you they exactly agree because they are fully expected to and have been communicating that they will hike by 25, not 15 or 75. there's been a relatively rapid slowing of the pace of hikes because the fed recognizes there's a lot of tightening already in the system yet to fully act and indeed, there is now some encouraging data. the base effects for energy over the next few months are pretty powerful even if we get the oil rally unless it is a huge one. it will slow the pace of disinflation. it is not at the stage going to lead to a re-inflation. again, the problem is that the fed tells us consistently and constantly that they see that their policy is acting through financial conditions. financial conditions are sort of

a llama ration of market variables. therefore, they are mandated to attempt to control the market which they avidly cannot do. that paradox leads to these challenges where we expect a central bank to be more dovish because they are hiking rates by last it also more hawkish by telling us things about a distant future which really they don't have much authority over if you like. remember, go back 12 or 15 months and the fed was telling us that rates would be around 1% this point. manus: well, the swaps market on one year and two-year swaps, they are presuming that inflation is back as you said at 2.23% in nine months. this goes to the point at the bond market is in lala land. inflation at 2.5%. the fed cutting to 2.75% and real yields at zero. is the bond market in lala land?

your view is that maybe we get a second wind of inflation and the swaps are just far too aggressive? james: first and foremost, we don't have a great understanding of inflation. quite clearly, the forecast on inflation has been huge but just in general, going back multiple years in previous cycles, economists ability to forecast inflation has been very poor. the bond market has been slightly better but still not rate at all. i will fully admit that i don't know, but again, there are some powerful forces acting in the coming months, not least base effects but also the economic headwinds, decline in real wages, the impacts that we can see on consumers particularly in the lower half of the income spectrum. all of these things are highly

disinflationary at a time were economic data is deteriorating. privacy, the flighty ointment is labor market. i will not claim to fully understand labor at market dynamics because they have been affected by the pandemic. i do expect labor market weakness and if i'm correct, i don't think the bull market is in lala land at all. i think having some downsides skewed to what will be a very tight policy rate relative to anything close to neutral, the fed still says 2.5, even if we call at 3.5, we are likely 150 basis points ahead of that. is it unreasonable for the bond market to suspect easing will be necessary? looking at growth, -- dani: i was saying perhaps not in that scenario but for hand -- perhaps equities. we have seen profitless tech, memes stocks, arc stocks up when he percent year to date. even bitcoin is up 40%.

we don't have much time so quickly, what about this equity market? what does this tell you? james: they have been in lala land for many years and this is a pavlovian response. we have lived through this. and there's nothing -- we're live through this period and there's nothing to say. the discount ring -- rate does not matter as much. we did not get near that in the crisis. the fact that the equity market is seeing easier but still tight policy is a reason to reevaluate -- revalue profitable companies and speculative business models. it is a very concerning pavlovian response and a short squeeze because it was such an under owned equity market. dani: probably fair to assume you will not be chasing that rally. james, really fantastic to have you on the program this morning. thank you for waking up early for us. james athey investment director at aberdeen.

coming up, the fed meets for the first time this year. we will look at who is in and who is out on the committee. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. i am dani burger in london. manus cranny is on the road in zürich. we will get a fed decision later today and officials appear to be considering pausing interest-rate hikes following their meeting but a 25 basis point hike is widely seen as the most likely outcome today. bloomberg's michael explains how they have change the voting structure and that influence decisions. >> each year for of the regional fed bank presidents rotate out and for new ones come in. leaving this year is jim of st. louis and esther of kansas city and the retta of cleveland and

boston's susan collins. all except collins are considered somewhat hawkish. coming in, new president of the chicago fed, austin goolsby. patrick and lori and neel kashkari. all except kashkari are considered dovish or centrist. there is little distance between the views of the hawks and doves on the fed's open market committee. 17 of the 19 members saw the feds target rate reaching over 5% i the end of this year. none see rate cuts in 2023. the voters change but the policy remains the same. manus: mike mckee with a look at who is in and who is out on the feds voting committee. it has a big impact in terms of where we go on the rates trajectory for the rest of the year. a big night stocks. dani: a really big night that goes back to the risk. what is bigger fed or earnings?

i want to show you a snapshot of yesterday's earnings to show you how mixed the results have been. mcdonald's, caterpillar all about price pressure. exxon and gm with big oil they still have that pricing power, manus. manus: the good old big mac. novartis we had their numbers and guidance a spinoff of standoffs and is on track. the big red headline, one dollar 52 ahead of where the market had estimated at one. 42. low mid single-digit growth for novartis. the fed decides. 25 basis points is the consensus expectation. what is the rhetoric?

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manus: this is "bloomberg daybreak: europe." i am manus cranny in zürich with dani burger in london hq. dani: cementing the downshift. slower gains in u.s. employment costs pave the way for a quarter-point hike by the fed today. earnings season disappoints. snap plunges in the late trade after forecasting its first ever quarterly revenue decline. next up to report, meta. the u.k.'s worst industrial action for a decade shuts schools and cripples the rail network as half a million people strike over pay. of course, the line of the morning has been that quote about bonds being in lala land. james athey was a bit skeptical, saying perhaps it makes sense that bonds are pricing in a downside. equities have been in lala land for years. manus: indeed.

that is a pavlovian response, he said. bitcoin up 40% in january alone. do you go into a substantial earnings recession and a housing downturn? everybody yesterday lambasting me on the phone. it's not like the housing crisis of 2008. when a recession comes and bites you on the proverbial, i can assure you it will knock your sentiment. we have very short memories on what the pain of a slowdown and 5% rates really means. dani: it's totally fair but in terms of having a short memory, perhaps those who do not are the phillips curve adherents, who are squarely focused on that fear of a 1970's wage price spiral inflationary type environment, which is maybe why jay powell refuses to relent. manus: maybe he needs to get his snarl on, as john arthur says.

a quick snapshot of what is going on across the market. maybe the dollar needs a softer jobs number two really turn the dollar down more aggressively. it is primed for a pivot but the dollar bears probably need a little more research ve -- more reassurance. the president of opec yesterday saying you need to be careful. bitcoin, i mean, look, you know, $250 billion added to the value of bitcoin, the winter would seem to be over for bitcoin, up 40% in 2023, trouncing ingress -- investment grade bond returns. the bitcoin market is further brave. 10 year bonds, you heard it from james athey it is not in lala land, it is correctly pricing in the slow down none of us seem to remember. dani: looking at what's happening in this equity market, we are looking at asia stocks, those are moving higher.

adani guess the second worst performing equity this morning. u.s. equities lower. perhaps we will get volatility today while we are waiting for the fed. the percentage of u.s. stocks above their 200 day moving average is 60%, a very, very stretched number. does the fed, does jay powell jeweled that a week -- jolt that awake? manus: let's take a look at into the fomc meeting. 25 basis points is the consensus that we expect the tonality as to whether jay powell goes full dove. valerie tight tell has been beavering away on these charts. good morning. >> good morning. the key thing to watch is in the second paragraph of the opening statement, this line about

ongoing increases in the target rate to be appropriate. most of you this statement from the december meeting -- most view this statement from december meeting as stale. how does this statement evolve? it's going to be likely something that probably acknowledges that the fed funds rate is closer to the peak rate without giving us any guide just where the peak rate is. because the recent data may not yet suggest a revision meaningfully to those december dots that we got. dani: let's talk about the potential surprises, valerie. which way is the street leaning, a hawkish or dovish surprise? >> i think the street is a bit mixed when he comes to this. the way he can surprise hawkish is if he flat out dismisses the recent drop in inflation, almost implying he cannot trust it because the unemployment rate has yet to rise. and he repeats things like the

fed has some ways to go, if a statement like that makes it into his opening statement, i would view that as hawkish. if you wanted to surprise dovish, he would need to see something that would lead us to believe that a marsh pause is on the table. he could acknowledge the recent inflation trend is welcome, especially when it comes to the fact that we have seen softness in the economic data. he can tell us that rates are approaching a sufficiently restrictive level and he can tell us that he is more on a data-dependent stance. it would be opening the door for a possible pause in march. dani: thanks so much. let's stay on the central banks conversation. after the fed, we have the ecb and b.o.b rate -- boe rate decisions tomorrow. three big central-bank decisions. jamie rush joins us. what do you think has the most

potential to surprise these markets? >> i think we should be focused on the fed really. as we heard this morning, there are lots of signs of emerging weakness in the economy. we have seen inflation surprising to the downside across a range of indicators, and of course, we heard about weaker wage growth. i think it is too early to declare victory. if you look at the preferred measure that jay powell likes for engaging underlying cost pressures -- likes for gauging underlying cost pressures, that has not moved anywhere. we are still in a completely unacceptable territory. i think what we will see is gentle acknowledgment on the general trend of things moving, which has permitted that downshift to 25 basis points. but now was not the time to go soft. i think they will be rolling out any prospect of cuts later this year, that is probably where we will get the most market moving today. manus: is that what brings the

bond market to heel? there have been this discord between the market pricing in rate cuts and reasonable cuts going into 2024 versus what the fed have said. the central banks are going to stay the path, hike and hold until they really, really suppress structural inflation. is this a moment for powell to regrasp and bring the bond market to heel? >> i think that's right. they are less likely to get as high, the peak is likely to be less high than we expect, but you balance that with there being likely there will be cuts this year. i think they will hold until they start to see labor markets weak enough. i think that is true for the bank of england, i think it is true for the ecb, they are not

going to stop until the job is done, and then they are going to hold and wait and evaluate. dani: within the boe, we are also, and only recently, i should say, we have started to see traders price and cuts for them as well. is this something andrew bailey will have to push back against? >> the bank of england is less keen on trying to fine-tune market expectations in the medium-term. they don't like to try and overcome a break. i think the bank -- over calibrate. i think the bank of england, the messages they are not there yet on the downshifting, because wage growth is still accelerating at 7%-ish in the u.k.. that is way above what is consistent with inflation. they are not yet ready to slow down. again, we are over the hump and we are going to be following a similar stretch to the fed. there will be a downshift coming, it's a matter of one. we can put it relatively soon

after this meeting. dani: ok, thank you very much. that is jamie rush from our bloomberg economics team. quickly want to mention some lines coming through from india. india has planned its 2024 budget, their gross borrowing, it will be at 15.3 trillion rupees, the net is 12.3 trillion. they are boosting capital spending 33% to $122 billion. manus: keep an eye on the rupee, 10 year bonds are gaining. all eyes are focused on india filling that gap in terms of the emerging market growth story. we have just strengthened by almost 0.8%. the dollar is down. they seem to like the borrowing story in the bond and the fx market. we will attract that story, the budget gap at 5.9% versus 6.4%.

coming up, london grounding to a halt. railways, schools are shut, the strikes are on. nearly a million workers gear up to protest on pay on bloomberg. ♪

♪ dani: welcome back to "bloomberg

daybreak: europe." i am dani burger in london, manus is in zürich. let's get your first word news with simone foxman in doha. simone: thanks. adani has pulled off a 2.5 billion dollar equity sale first flexure company thanks to a surge in late bids. the offer was fully subscribed on the final day, mainly by institutional investors. this sale comes despite a nearly $70 billion drop in the market value of adani's listed companies. that was after a report alleging the group has engaged in accounting fraud, which the company has robustly denied. china's home sales continue to slump in january, despite extra stimulus and the end of covid zero. data from a private provider suggests the 100 biggest real estate developers saw a home sales drop almost a third from a year earlier. the month was a key test of

demand -- buyer demand as many had their first chance in years to hunt for properties during the new year holiday. bloomberg has learned at last week's system which what -- resulting in wild stocks wings on the new york stock exchange left triggering thousands of damage claims. sources say the likes of charles schwab, robinhood exited of securities submitted requests. we are told of the claims are likely to exceed the $500,000 exchange normally sets aside each month to cover disruptions. boeing's ceo says it is a matter of when, not if, so flying planes were debuted in commercial aviation. in an exclusive interview, dave calhoun told us autonomous flight technology being developed for the military will eventually be used commercially. the conversation was timed to coincide with the delivery of boeing's final 747 jumbo jet. 64 years after production began. >> as you may know, we have an

application on an all electric autonomous airplane. we refer to it as whisk. and that airplane, the application is in an the faa will begin working with us today on building out a certification program for autonomy and for whisk. simone: that's your bloom -- bloomberg first word news. ♪ manus: thank you very much. simone foxman in doha. the u.k. expects significant disruption today. half a million workers will walk out of their jobs over pay disputes. 85% of schools across the country are at least partially closing while nearly all major london rail stations will be shut. tom mackenzie is outside the hub for london, it is king's cross rail station. what can u.k. commuters into london, out of london expect today? tom: yeah. well, you are right, it's a hub for london, it's a hub for the

u.k., kings crossing. i can see the board and i can tell you it is largely blank. that is because network rail tell us about 80% of the services, 80% of the services across the u.k. will grind to a halt because the train drivers are striking. is not just the train drivers. it is the first time that the major unions are coordinating. the teachers union, one of the major unions, they are also striking, they have a mandate to strike as well. you are also seeing the border force, so expect disruptions around airports and ports of the u.k. it is a major step up in terms of around six months of strike action already the most severe that we have seen since the 1990's. 100,000 civil servants also have a mandate to strike as well. in total, close to half a million people. the disruption will be significant across the railways, across the schools, and in ports airports across the u.k.

the unions say this is about addressing the cost of living crisis for their members. inflation running at 10.5% in the u.k., public-sector pay has increased about 3%. that disconnect is what they want to close. they say, -- they say the pressure, the pain on members israel, they want the government to take action. >> why isn't the government taking action? why has this just continued after so long of strikes now? any sort of agreement to be so elusive? tom: well, you cast your mind back a couple of months and there was signals, signs that may be on some of these issues, whether it was nursing or other parts of these disputes, that the government was moving the needle, that it was at least moving in the direction of more constructive talks. that has now, it seems, come to a close, at least for now. you heard from the unions that essentially these talks are roadblock, they have not moved in the last few weeks.

the government's consistent line is this, if you go with these double-digit pay hikes, if you go for that, then what you're going to be doing is entrenching inflation across this economy and causing more pain for more people. we heard from one of the senior leaders at the national union around education, and they said that this whole idea around inflation is nonsense. take a listen. >> no price has to go up because a teacher gets a pay rise. there is no direct impact on inflation. there are no price is linked to teacher salaries. we do not accept that argument. tom: we also heard from the train drivers union, just to bring it back to where we are at king's cross. they say the situation in terms of the talks with the government are worse than they have been in the last six months, the worst in the last six months. that just shows you the roadblocks we are facing. we've got further strikes planned on friday by the real drivers, the train drivers, and

coordinator strikes between nhs stuff, the nurses and ambulances next week. the disruption for the u.k. economy, households and businesses is only going to continue. manus: and tom come on a separate note, course, jeremy hunt, the chancellor being urged by the tory members in parliament to get back to that tory tradition, which is tax cuts, reduce the burden. we've got a pretty gloomy outlook from the imf on the u.k. do they even have the capacity to do that, to do a u-turn on tax? tom: it was that imf report that singled out the u.k. in terms of that grim growth trajectory that led to this additional pressure from tory backed ventures and that committee where the chancellor spoke with members on tuesday. that's why you had these tory members within the right wing of the conservative party pushing for tax cuts. what we hear is that the

chancellor has pushed back on that. he's been pretty consistent, we are not going to have tax cuts before the march budget. that's what these mp's are pushing for. the chancellor says we do not have the fiscal headroom to do that. the priority has to be to get inflation down. he wants to see tax cuts and he will prioritize those for businesses once we get to a point where inflation is consistently showing that it is heading back to that target for the government and the boe. dani: ok, tom, thank you for much. that is bloomberg's tom mackenzie from outside london's king's cross station. we were talking about the new budget from india, net borrowing is lower than the survey had estimated, 15.4 trillion indian repeat is what had been expected -- indian rupee is what was expected. manus: a bit of fiscal prudence never killed anybody. coming up, snap post earnings,

meta hits just like tonight. we dig into the tech earnings, shock and all, from snap, right here at bloomberg. ♪

♪ >> if any material risk at adani? >> we cannot comment on clients, as you know, but i would not worry about it. manus: it was the end of the interview and one lined that some wbs' situation. ceo. credit suisse private bank, it is a bloomberg's group for the zürich office, which is the private bank is halting margin loans on adani bonds. you put them into your credit suisse brokerage or account or your leverage account, they are saying no, we don't want those bonds anymore. the memories are very painful at credit suisse over collateral,

quality of collateral in the archegos debacle. more scrutiny of the short seller report from credit suisse and the collateral or security of the indian tycoon is now not being accepted, we understand, by the private bank. dani: the private bank cutting the value of those bonds to zero. the risk is that clients are now going to have to top up there collateral, will they have to put cash on? what are the follow-on effects. pointing to the painful memories of archegos. shall we talk a little bit about tech? that's the other big story among many big stories this week. tech earnings full flow this week. amd get better than expected sales forecasts for the third quarter but snap forecast their first quarterly revenue decline. shares got pummeled in the post-market. let's get over to alex webb from our bloomberg quicktake team.

meta, apple, amazon, alphabet all posting results. what are you looking out for? >> it's going to be a question of the cloud and advertising business. we will look to the clouds to see if it is slowing down to the extent that we have already seen some of the slowdowns. is that unique to microsoft or is amazon, which is the big gorilla in the room when it comes to the cloud, able to perform a bit better? we are looking at the resilience of add-on -- of online advertising. meta, in particular, the expectation is that the pain has been extended by the slow down in advertiser spending more broadly. and in the middle of further out to alphabet, google, if they are still the place that everybody still needs to spend no matter what. those are the stories i think i underpinning a lot of the big-name tech companies. dani: ok, alex, thank you roach. that is alex webb. thanks so much for joining us.

i want to quickly go over some of these lines yet again that we are learning. bloomberg reporting that credit suisse's private bank has halted accepting adani bonds as collateral. it means they have marked down the value of those bonds to a big old goose egg. they are now saying they are worth zero. in other words, if you been using that debt as collateral, you need to pony up with something else, according to this report. does that mean there is a fire sale? does more cash need to be put up? we don't know who exactly are using those bonds. as you so rightly pointed out, the memories are alive and well with collateral issues when it comes to credit suisse and when it comes to archegos, they have of course tightened the risk control screws since then. bloomberg market europe's, that's up next. this is bloomberg. ♪

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anna: