>> this is bloomberg daybreak: europe. these are the stories that set your agenda. regulators to the rescue, global stocks rally with the nasdaq set for its best week of the year after the fed divides backstop city to u.s. banks and first republic gets a $30 billion lifeline. optimism fades, credit suisse bonds fall deeper into distressed, even as the shares soar, signaling more action may be needed to restore confidence in the lender plus, the ecb sticks with a 50 basis hike as president lagarde vows to support the regions lenders following the recent turmoil. let's check in on these markets, knowing what we have seen in terms of the drawdown from the federal reserve. the discount window and the action there in terms of the money. the largest amount, larger than we saw during the great financial crisis.

large banks coming to the rescue, at least to the aid of the smaller regional lenders in the u.s.. led by jp morgan and jamie dimon. deposits being pumped into regional lenders. will it be enough? futures in the u.s., worth pointing out that the nasdaq closed, 2.7% for the week. the nasdaq, the tech heavy nasdaq is looking to post gains of a little over 5%. that is tying very much to what we are seeing of the re-rating of the rate trajectory. the terminal rate is expected and seen by these markets at the low 5%. some gains across asia. ai bought proving pretty effective. you have seen that from the tech stocks in asia. the baidu is gaining 14%. there is hstech. closing on to 4000 for that tech heavy in on kong it gains of her

percent, is tied to the action of baidu. the reader cross, given the support coming through in terms of the drawdown from the fed. the 30 billion as well coming from the larger banks and regional lenders create a 0.7% is the gain when you can look at the topics bank. the safe haven bids for currencies remains in focus for us, this is a story we will delve into in more detail with our guest. currently gaining 0.5% for the japanese yen. the context is that it has been an incredible strong for the nasdaq. artist one-day gain since january. let's get across the latest on the banking terminal with russell, oliver. pressure remains on the bank. and under current will tell us what the ecb's moves could mean central banks were broadly.

thanks have borrowed a combined 165 billion dollars from two fed backstop facilities in the past week. it is a sign of escalated funding strains. spring in asia finance editor, russell ward. thanks tapping the fed for funding, what does it tell us, the numbers took many people by surprise. the discount window tapped by these banks larger than what we saw during the financial crisis. exactly. russell: it is pretty overwhelming. despite all the steps taken this week, $153 billion tapped through the discount window, that is the traditional lending facility at the fed that often carries a stigma. that is exceeding the amounts tapped during the global financial crisis. and banks are also tapping that new critical -- credit facility,

to the tune of $12 billion. this is a tool that was created by the fed that allows banks to use the face vallow -- value of their assets. that avoids them getting into the same traps that svb had when of course, it had to realize huge losses on its treasuries and other bonds in its port all the. -- portfolio. analyst at jp morgan estimates this is providing as much as $2 trillion liquidity for banks. tom: wow. meanwhile, other action coming through, three jays combining for their work. jerome powell, janet yellen, and jamie dimon with 30 billion u.s. dollars for the regional lenders. is this ticking past the action or is it more substantial? russell: this is the latest effort to short deposits at one bank, first republic bank.

the san francisco lender whose shares tumbled last week. concerned it may be following svb into seeing a large outflow in its deposits. this is an idea created by the three jays. treasury secretary, janet yellen mentioned this to jp morgan ceo jamie dimon on all on tuesday. he got off the call and rally to 10 other banks. there has been 11 banks that have chimed in on this. really it is an effort to prevent wider panic that would be detrimental to all things interest. it reflects the bifurcation in the u.s. banking system right now with the larger banks seeing huge inflows of deposits from depositors that are fearful that smaller lenders, the money might not be safe with them. it is a way of restoring, without using public need. some of those deposits can be transferred back to the regional lenders. so far, it seems to have worked with bancshares rebounding overnight. first republic climbed about 2%.

it is unclear to see if this will work. it might by the bank sometime. it hasn't come without criticism. you mentioned earlier in the show, that the move provides a false sense of confidence and raises more questions and answers. we will just have to see whether this works overtime. tom: indeed, the critic therefrom bill ackman. it potentially bodes well a playbook that could be used for other regional lenders. first republic getting that support from some of the larger lenders in terms of deposits create thank you, russell. it has been a roller coaster week to say the least for credit suisse. shares surged yesterday after switzerland central bank stockton to support the lender we are joined on the ground in zürich by oliver. where are we as we close out this historic week for credit suisse? oliver lynn you have mentioned

the three jays, let's not forget thomas jordan from s&p blowing that bazooka out of the water. 50 billion francs in order to stem the bleed from credit suisse. shares down up to 30% on wednesday. that seemed to stop the bleeding yesterday. the gain moderated to just about 19% by the close. the cds came back down. but also moderated. the bonds, further into distressed territory. while this initial panic instability has been brought back, the question is, for how long? is this adequate and enduring for this bank to implement its turnaround plan without any external influences? in terms of tangible things we are watching for, it will be the big question about clients. are they sticking around? and what are the flows looking like? you can't imagine this week has been a particularly good one for its reputation and how clients feel about it. we already have some reports of

some people pulling money out. the question is, how bad will it be? tom: excess to the question of the market position and whether it is stabilizing. is it early to come to that conclusion? oliver lynn it might be. this has been a market-driven story. not a lot of news precipitated this. the market has been judge, jury, and executioner. the sharks are going for the places there bleeding. an episode like this only makes it harder for morale of staff, retaining and acquiring talent and the cost of doing business which is crucial. all the research notes out today, some analysts are skeptical that this is enough to the bank to continue on its own. you can see just over there is ubs. jp morgan saying this is the most likely outcome of a however there is a lot of skepticism around that. we are still in a speculative state on that. we need to wait for the dust to

settle to see where we are. tom: symbolism is strong in terms of the image behind you. we will see whether that prediction around a potential takeover comes to the fore. there is oliver on the ground with the latest. thank you. stay with bloomberg. we will bring you continued coverage of investors reactions to the recent market events also taking a deep dive into the hot water that credit suisse is in and the ripple effects from silicon valley bank. tune into our special program, ranking breakdown, today at 8:30 london time. the ecb has gone ahead with a planned half-point rate hike, but offered few clues on its next move following the market turmoil. let's get to enda curran who has the details. your from madam lagarde? enda: a very simple message that

inflation is still too high and needs to be brought down. that is why they went ahead with a 50 basis point rate hike despite the turmoil in the banking system. it seems as though the ecb believes they can navigate this path where they have the tools and christine lagarde said this, they have the tools for financial stability, they are willing to do whatever they need to which is separate from the inflation debate which of course, with core inflation where it is, means interest rates have to keep going up. she said the vast majority of ecb may officials work on this move. she did not get any indications as to where they're going from here with the interest rate path did some people interpreting that as meaning the ecb is on pause from this and on the nonetheless, knowing the wider market fluctuation, the banking scare with credit suisse and the u.s., the ecb plowing ahead with 50 basis points was a surprise

to many observers. tom: and implications for the broader central banking community as well. more details on that later in the show with enda curran. let's take a look at the key things that markets are watching out for today. at 10:00 a.m., final print of euro area inflation, and tying in the decision-making of the ecb. have an hour later, the bank of russia will deliver its latest rate decision. at 1:15, we are due to get fresh industrial production numbers on the back of ppi, producer prices and payments. softer than expected. at 2:00, the latest university of michigan consumer survey is federal to be released in the u.s.. around the use of the consumer on the direction of inflation. the dollar drops, a u.s. bank columned global market jitters

for now. we will discuss the move into safe haven currencies and how to position within fx. this is bloomberg. ♪

>> it should be contained to zürich. just like the fed was, the ecb

has to acknowledge they have two arrange things and make sure they put enough firewalls in place, but more importantly, to ensure there is no chance of this attracting the attention of other banks and people pushing on them. >> i don't think it is a lehman moment. i think this is really bad, but it can get out of control, i don't think that central banks or anyone else can sit and watch this. >> the experience of silicon valley bank and credit suisse, they have a much better understanding of that liquidity place -- liquidity plays a really critical role. >> the effects of monetary policy tightening, the strong will get stronger and the week suffer. >> credit suisse by some standards may be too big to fail , but also too big to be saved. >>'s stock has been in a huge downfall for two years there are clearly problems within this particular institution that

predated what happened with svb. >> will be challenging i think in the short term, because we don't know where the next shoe to drop will come from. >> in the great financial crisis, there was a lot of this that was about cross counter party credit risk. but is not what this is about. >> i think this is the tip of the iceberg. i think there is a lot more consolidation, a lot more pain to come. tom: ev guests reacting to the latest credit suisse saga and weighing the risks to the wider banking sector. let's check in on the fx markets. a significant shift into safe haven currencies, you see that reflected in yen, and in the u.s. dollar. with the exception that today the bloomberg dollar index is taking a low down. the swiss, up 0.3%. strength coming through for

japanese yen, as well. let's stay with the effects story, we have sonja marten. let's just start. take a deep breath and reflect on this week. how has it been for you and the team? sonja: i am pleasant. we have been in crisis mode for three years now, i keep saying, can somebody please just press the stop button? it has been incredibly volatile especially on the bond market, but also the fx market. one of those situations where all you can do is try to keep up with what's going on. tom: what is your sense about safe havens and the sustainability of that? what are you watching for that will give you conviction that move to safe havens will come to an end? sonja: i think the problem is that investors are obviously incredibly nervous. the reaction to the events of the past week and this week has shown just how nervous people

are. the market movement that we saw, if you look at the two year u.s. treasury yield, that is a bigger move then we saw post-lehman. i think it will take some time for investors to calm down. as many of your guests have been saying, there is still a risk that we will get more bad news in the weeks to come. there is obviously a risk of some more trouble for the smaller u.s. banks. as long as that keeps cooking away in the back room, people will say risk off at this moment. it will take a while. when the change comes, they change toward some better sentiment, it will probably be very sudden as it usually is. but i think it will take some more time. tom: do you have a preferred haven currency at this point? sonja: i think the yen is attractive. swiss franc has been more difficult because of the situation with credit suisse. the yen is attractive in that area. the dollar, obviously, as well.

this might seem a bit counterintuitive, but that is what we saw during the financial markets crisis. people do go into the liquidity haven that is the dollar. those two are my picks at the moment. tom: very interesting. i see your preference for the yen, but when it comes to the dollar, there all those competing pull factors. the terminal rate coming down, then the expansion of the fed's balance sheet. then you oppose that with the safe haven status. the dollar traditionally has. multiple factors playing out. sonja: that is what we saw in 2008, as well. the issue that happens here. i agree with you, there are factors that would suggest that the weaker dollar -- that is very much our forecast. we have a $115 forecast. in the short term, i think that investors feel they need somewhere with ample liquidity.

there are a few choices here. he preferred one tends to be the u.s.. tom: lack rocks the markets are getting worse. do you align with that view? have they gone too far? terminal rate below 5%. sonja: when we look at the fed, i don't necessarily disagree. the most likely scenario is the fed will hike 25 basis points next week to make sure there is still an anti-inflation signal out there. they're likely to signal that they will go to wait and see status. they can afford to do that, they have already hydrates aggressively. as far as the fed is concerned, we will probably see the peek at the meeting next week. i do disagree with the market on the pricing in of rate cuts. the market is looking at some very aggressive rate cuts later this year. briefly on the ecb, they have shown yesterday they are willing

to continue on the fight against inflation despite what is going on tom: does that give legs to euro-dollar? sonja: it is difficult now because of the safe haven argument that is supporting the dollar. i do agree that when you look past this current turmoil and assume things will calm down again in the weeks and months to come, i think that scenario where the ecb continues to hike rates definitely favors the euro-dollar. tom: thank you very much indeed. still favors swissie, and yen. head of fx research dz bank. thank you very much for joining us at the end of a dramatic week for this market. credit suisse is of course in turmoil. we will look back at how the swiss lender got there. that is next. did this is bloomberg. ♪

tom: they say that all press is positive. that isn't the case for credit suisse who has had more than its share of bad headlines. in march between 19, it emerged that they had hired private investigators to spy on a former employee. suspected of taking its clients. >> share price of the company in crisis. tom: the collapse of green silk capital embroiled the bank. swiss regulators said credit suisse had made quote my partly false and overly positive statements. when it marketed $10 billion of funds to clients as safe investments. >> i am actually confident that

we will come out stronger. tom: soon after came archegos capital management. it's collapse brought credit suisse $5 billion of losses and saw executives fired. it also found itself the first swiss bank received a critical conviction tied to a cocaine smuggler. efforts to reassure investors ran into problems. >> what we saw is two or three weeks in october flattening out, they have stopped coming back in particular switzerland. tom: that open another investigation when the bank reported those outflows have continued. after the collapse of silicon valley bank, investors are now eyeing others for signs of weakness with credit suisse, they are not liking what they see. tom: a look at the litany of problems that credit suisse has run into in recent years. let's get the first word news with medicine in dubai.

medicine: banks borrowed a combined 165 billion dollars from two fed backstop facilities just in the past week. a sign of escalated funding strains in the aftermath of svb's failure. the borrowing shattered the previous weekly high of $111 billion that was recorded during the 2008 financial crisis. the ecb has gone ahead with a plan how point rate hike offered few clues on its upcoming move. they lifted the rate to 3% as expected, but no language in their statement about where borrowing costs are headed. this comes days after the market turmoil that rattled credit suisse which raise concerns about the health of the wider banking industry. and china's communist party has unveiled details of a restructuring plan, placing the finance and technology sectors at the heart of its control. new central financial committee will absorb an existing state council body and a central

technology committee will be established to strengthen the party's oversight of that industry's development. in the u.s., tiktok reportedly in talks with potential buyers as the u.s. presses its chinese parent to divest. the new york post says tiktok is exploring possible deals it had considered when former president donald trump threatened to ban the app in 2020. in the u.k., the popular video sharing app has been banned from government funds due to the same security risks. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. tom: everything's changing so quickly. before the xfinity 10g network, we didn't have internet that let us play all at once. every device? in every room? why are you up here? when i was your age, we couldn't stream a movie when the power went out. you're only a year older than me.

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tom: this is "bloomberg daybreak europe". regulators to the rescue, global stocks rally with the nasdaq set for its best week of the year after the fed provides backstop liquidity to u.s. banks and first republic gets a $30 billion lifeline. optimistic fades, credit suisse falls deeper into distress, even as the shares soar. more action may be needed to restore confidence in the lender. the ecb sticks with a 50 basis point hike as madam lagarde vows to support the regions lenders amid the recent turmoil. let's check in on these markets. they have been reflected in the action over and asia. artificial intelligence also given a boon around baidu and lifting tech stocks in asia. just a closeout of the nasdaq yesterday. the gains at 2.7%.

the tech heavy index is currently up a little over 5%. no doubt is tied to the rate markets infused around the terminal rate. money markets now pricing in a terminal rate of a little under 5%. asia, pretty decent session on the back of the support coming through for first republic, but the discount window and the pick up their from the banking sector in the u.s.. here is the baidu story, 14% gain after some analysts tested the chat gpt like bought, the only bot that came out with positive reviews. lifting the tech sector in china. hstech reflecting the gains. the topics bank, tied to the fortunes of credit suisse. steps taken by the u.s. and banking sector, larger banks coming out that lifeline for first republic. the japanese yen still did as a safe haven currency, it is gaining 0.6%.

it has been a roller coaster week for credit suisse. shares surged yesterday after swiss central bank stepped into support the lenders. what is next for this embattled bank? let's bring in francine who has been across the story. despite the lifeline of the swiss national bank around 50 billion swiss francs, there have still been pressures in the bonds of credit suisse and the credit default swaps back above 1000. what does it tell us about the pressures? francine: it tells us that there will be a lot more pressure on the bank. if you look at what happened yesterday, we started off with the share price tightening for cds, there is not that much distress. then equity was still up, but a lot of pressure from bondholders. it tells us maybe they are questioning the capital model going forward now they have enough liquidity, and bankers say that the fact that they have to draw on the 50 billion facility maybe means they are concerned about future problems,

but the underlying concern is that they have a three year strategy that they need to put in place. will clients stick with them? how do they grow? this is not an easy thing where you can just move your money to a rival bank. we can do it in two weeks, so, the next couple of weeks will be key to see whether they have attrition, whether nines will stick with them, and how you grow that franchise in asia where every day, you have a bad headline. tom: these were the questions you put to the chief executive, around the timeline and three years on whether or not that will be too long for them to fix these issues and reassure their customer base. in terms of the debates and the conversation with the regulators in switzerland around the potential merger, we know there is some pushback. francine: we understand that the swiss government is involved, we know the the regulators are looking at options they can't force anyone.

this is well-capitalized, well liquid. this is concerns to reputation of switzerland about the longer-term viability of credit suisse. if they say we don't want to be bought or sold, then no one can do anything about it. a couple of questions from swiss government that hasn't come out and say, they are looking at this, but there looking at all options. if there is a merger, does it mean that jobs will be lost? that will be a concern for them. they have made these rules on these too big to fail banks. if you have one national champion and you are ubs and doing quite well, why would you absorb some of the broken of legacy issues at credit suisse. we will see how it opens later on today. tom: 8:00 trading time. again, j.p. morgan says in their assessment the more likely scenario is ubs and credit suisse. francine will continue to cover the story. really interesting

point around the reputational damage to switzerland as well. bloomberg's francine lacqua and we will have special coverage from 8:30 am u.k. time focused in on the plight of credit suisse. u.s. treasury secretary told the senate finance committee that her department is monitoring for a potential contraction in credit in the u.s.. this follows the collapse of silicon valley bank which sparked the danger of contagion across the banking system. >> i can reassure the members of the committee that our banking system is sound and that americans can feel confident that their deposits will be there when they need them. this week's actions demonstrate our resolute commitment to ensure that our financial system remains strong and the depositors savings remain safe. tom: u.s. treasury secretary,

janet yellen. joining us now is david, managing partner of cio of axiom. thank you for coming into the studio. let's start with the backstop that has been provided in terms of deposits for first republic bank, ap morgan, and jerome donnell -- e3 joe's offering their support. does it put a ring fence around the crisis at is emanating? david: solidarity solution, i would call it. reassuring the markets, for sure. we must not forget that there is a huge regulatory whole when it comes down to u.s. regional banks. probably not enough to stop. it'll be in the next weeks to see the invention of the authorities. in the medium-term, it is

necessary to completely restore the regulation that should have been applicable to this u.s. regional bank. there is a whole piece of the puzzle agreement which is missing there, it comes down to which are absolutely key when we manage bank liquidity's, the quiddity ratio, or even the stable falling ratio. those are the things that we have implemented in europe. tom: it sounds like you're giving them more credit for this decision, creative response to the partition of -- the republic. and bill saying this raises more questions than answers, saying this is giving a olsons of confidence -- false sense of confidence. and that it is bad policy. you pushback on that. they decision is pragmatic and quick.

david: there needs to be some further reassuring. further down the road, it is absolutely necessary to explain that the sector will be re-regulated properly, it is the only way. we can have safe regional banks. tom: the two channels from the federal reserve being tapped, the discount reserve window being tapped to a larger degree than we saw during the financial crisis. what does that signal to you? david: it is probably a precautionary measure from banks. i'm sure it will probably puzzle the markets when they open. tom: when it comes to credit suisse, the s&p response, the response from the swiss bank, you are starting to see echoes, the silhouette of mario in the response. david: dori of credit suisse is

completely different, we have a bank that is very well-capitalized. and, up to the best in terms of liquidity. it is very strange to see credit suisse, on the verge of a potential resolution, there is no case for resolution technically speaking. again, when it comes to the bank, it is often psychology, as we have seen the market action. the only way to reassure the market was for the for noir and swiss national bank to step in. first reassure their is no case for resolution at credit suisse. even the fundamentals. but, they will stand by and stand there if need be. tom: is not enough in terms of the outflows? in asia, they have evidence of

people pulling their money because they want security and safety. that continues with the bad news and negative headlines. and then, raising the deposit rates to attract and hold those clients in hit on profitability, this built into the case from the team at jp morgan says a breakup is looking very likely and ubs is stepping in and the most likely scenario. david: happening before the invention of the s&p. snb. it is too early to say. i think the main purpose of the integration of the snb is to make sure there making sure that credit suisse will be liquid. the question is, how much time to clients will let them to perform the transformation plan? we can have the deutsche bank template, it worked for them.

the second option is of course, m&a. we talked about ubs, of course, the situation and possibilities, but they are not alone as the potential buyer. credit suisse is worth six to 8 billion as we speak, just about the net result of [indiscernible] who has -- of course it is a target. monet is an option. breakup of puts the? on the investment bank. it is i think too early to say. and deutsche bank took a few months to see the situation stabilizing. let's see in the next weeks. tom: you are cio, what has your

advice been to your clients? do they want to be taking advantage of the route in the market or moving more into cash or safe haven? what are you telling your clients? david: most discussions when it comes down to credit our equity or credit. of course, it is a terrible equity story as we all know, and much too early to, even if it is cheap, to look again at the equity story of credit suisse. we have many opportunities elsewhere when it comes down to financial equities. tom: are you buying the selloff in european banks? david: we are. it is a very interesting situation. over the last decade, european banks have been undermined by low capital, very high nonperforming loans. and very weak profitability.

of course, these were facts. this was creating the market sentiment. today, a very strange situation where investors are really up here. the facts are very supportive. we have high capital, low npl's. and a stunning profitability that we will see in the next quarter results. tom: thanks so much coming to the studio with a call there on the broader european banking space. david benamou managing partner and cio of acxiom. stay with us throughout the morning as we bring you continued coverage of investors reaction to the recent market events. also a deep dive into the hot water that credit suisse is in, and the ripple effects from silicon valley bank. tune into our special program, banking breakdown. today, 8:30 a.m. london time.

today's big take takes a global look at what has been a week of turmoil for the banks, what may be next for the sector? terminal users can head to and i big take go. this is bloomberg. ♪

>> bank credit to your area firms has become more expensive. credit to firms has we can further, lower demand and tighter credit supply conditions. we are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area.

the aging sector is resilient with strong capital and liquidity positions. in any case, our policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy. tom: that was christine lagarde talking about the strength of the euro area making system. despite the recent baking terminal on both sides, the ecb went ahead with a planned half-point rate hike. the european offered few clues on its next move. we have enda curran with the details. blackrock coming out with a note saying the markets are expecting that the central banks will step back on their fight against inflation because of a few jitters in the financial sector is wrongheaded. what did we hear from christine lagarde in the context of

initial stability? enda: hold off now, given the big blowoff or do they plow on with a jumbo size rate hike? christine lagarde said inflation remains too high, that is why they pushed ahead with the 50 basis point hike. most people were on board for this move. she made it clear, she tried to delineate between the stories, she said she has all the tools that they need in their toolbox to ensure financial stability. she obviously has confidence in the banking system. interesting, she didn't give any idea of where rates might go from here. some people are thinking maybe the ecb goes on a pause now, despite core inflation remaining high and what is going on in the banking system. it was an interesting decision. it was fullbore on tacking on

inflation. tom: fullbore on tackling inflation. what do you think gives the ecb and christine lagarde the confidence to at least for now, look past this global banking crisis? enda: if the nine interpretation is there are some idiosyncratic factors going on. banking regulation has improved over the decade plus years since the financial crisis and the euro zone crisis. they are better now. they can kind of handle and navigate the credit suisse story, they can contain it and carry on with the u.s. authority taking steps on their side, and not take the risk of the inflation battle. there are other interpretations that are saying, this remains a very fragile situation when you have big banks and the way the

market is this week, it poses a lot of uncertainty. it might impact other banks, it might impact the volume of lending in the economy over the months ahead which is a form of tightening. they are saying nobody should be too confident in where this banking scare will and given what has been happening especially in the u.s. as interest rates go up. the authorities are talking of confidence, they are saying they can manage this. the snb came out with a big intervention for credit suisse. for now, the story remains on inflation. the fed will probably give a much better picture next week. whether they are concerned about it or whether they think they have it under control. they, too, can plow on. tom: and how much divergence we potentially get between these central banks. 80% chance of a 25% basis point

hike. excellent with the context. thank you very much on the central banks and the decision from the ecb. let's get the bloomberg business flash with madison. madison: tighter consultancy ceo has resigned in a move that will come effective in september. they have since named the head of its banking and financial services business as ceo designate. he will take over in the next financial year, subject to shareholder approval. shares decline off the back of that surprise resignation. the technology behind chat gpt will be integrated into more microsoft products. ai powered assistants called copilots will be added to its business apps, including word, outlook, and excel. it introduced ai additions to its being search engine. microsoft ceo told us more about the company's vision.

>> today's generation of ai is all autopilot. it is a black box that we just sort of use that is dictating how our attention is focused. when we go forward, it is perhaps we move from autopilot to copilot. madison: fedex shares climbed in late trade after the courier boosted its profit outlook. adjusted earnings this fiscal year will be as much as $15 and $.20 per share, up in the prior forecast. efforts to cut costs are helping its business. the stock is up 18% this year, well ahead of the s&p 500 gains. that is your business flash. tom: thank you very much. coming up, american banks need liquidity help, they tapped heavily into the fed for that.

we will look at the impact that the fed's decision or at least what it will do and how it will play into that decision next week. and the expansion of the fed's balance sheet. this is bloomberg. ♪

tom: banks have borrowed a combined $165 billion from two fed backstop facilities in the past week. let's bring in valerie tytel for the context. break down the release. valerie: this is from the fed's weekly balance sheet release. it added over 300 billion assets in a matter of days. half of which are coming from the discount window. another chunk from loans to the fbi see, another from the bank emergency program announced late last night.

if we see how this looks on the fed balance sheet, here is this unwound 50% of powell's qt in a matter of days. it reversed the year long qt program. this perhaps is the reason why equities have outperformed this week. nasdaq futures up 7% in the last five days. tom: while, a 50% unwind. that is absolutely central. thank you so much, valerie tytel with that drawdown. coming up next, bloomberg markets europe. stay with us. this is bloomberg. ♪

anna: