dani: good morning, happy friday, this is "bloomberg daybreak europe". reversing course, in a yelling backtrack in 24 hours, saying the u.s. would be prepared to take steps to attacked depositors if needed. stocks and futures are mixed amid the banking uncertainty. credit suisse and ubs are said to be among lenders facing a probe into whether employees help russian oligarchs invade sanctions. plus, shares of block tumbled after hindenburg research shorts the payments company alleging it facilitated fraud. block calls the report inaccurate saying, it will explore legal action. these markets aren't getting any easier to trade, the confounding this of it is playing out in plain sight in these equity markets, despite the fact we are still worried about banking stress, stocks are able to

rally. they are able to rally despite the fact that you can see these regional banking stocks and american banking stocks in general continue to fall, perhaps facilitated by fed rate perhaps facilitated by janet yellen. either way, this divergence is what citigroup points to saying they would not be buying risk right now. they would not be buying american stocks or credit, because these worries are still here. our stock markets whistling past the graveyard? some of those gains continued this morning and american futures. let's take a look at that. s&p 500 futures are up 0.1%. a little more weakness when it comes to european futures and asian markets. they are slightly down. two your yields continue to get the bid, the front end globally continues to get a bid. australia looking at five basis points lower this morning. that is traders tracing in cuts to come from the fed.

in the 12 months through june, at least six cuts at the moment, the most in 2008. the yen is getting a bid this morning. japan's cpi indicated some of the sticky and persistent nature of inflation that perhaps japan will need to normalize sooner. let's get into these top stories. we have the latest on the banking crisis out of the u.s., credit suisse and ubs are under fire this morning, and block hit back at hindenburg after they issued a report. treasury secretary janet yellen has changed her tone on protecting u.s. bank depositors. telling congress, regulators are ready to take further steps if needed. valerie tytel is here. what do you make of yellen backtracking? valerie: call it a misstep or communication problem, two days ago she said they were not considering a broad increase in deposit insurance and really clamped down on those speculations that unlimited

deposit insurance was being prepared by the treasury. what we heard from her yesterday is they certainly are prepared to take additional actions if warranted, but if warranted, does that mean you need to be a systemically important to big to fail bank in order to get some sort of unlimited deposit insurance? that is the discussion right now. in her two way with senator from oklahoma where she clearly set out the bifurcated dynamic that is happening now in the u.s. banking system whether you are a too big to fail bank and you get special treatment, or you are a smaller regional bank and those closets are allowed to go. only if enough people make noise if not doing so would ruin the economy. dani: those worries are clearly still there. the data shows that the banks are still tapping that cash facility. valerie: we got in the h for fed release that the total emergency lending of the week wednesday

reached 350 billion. that exceeds the number from last week, which was 320 billion. a big chunk of that came from the discount window and the new lending facility, but again, it is expansionary for the federal reserve's balance sheet, and now adds back to the balance sheet two thirds of what qt has drawn from it in the last year. i want to point out something i found notable. the finn marie poe facility. there was a 6 billion draw on this facility. this was established during covid, and to help central banks that couldn't directly tap the fed's swap lines. the worrying thing about that number, that is the max amount a single counterparty can take. that could reflect that there is a central bank out there who is in desperate need for dollars and tap the max amount that they could, 60 billion lending from the repo facility happened on wednesday, hinting there's

dollar liquidity stress. dani: we don't know who that is? valerie: a federal official who is not captain. -- tapped in. dani: thank you so much, valerie. to the broader banking story, standard ceo spoke exclusively to emerge in hong kong earlier on this recent turmoil. bill: i hope we are through the worst. i hope -- i think there are still some questions around business. have there been weaknesses that have been exposed? the need to be addressed at this point. it certainly seems that the acute phase is done. dani: bloomberg has now learned that the u.s. is investigating thanks, including credit suisse and ubs over whether they helped russian oligarchs dodge sanctions.

it's get to our senior finance editor. just when you thought the drama was over with ubs and credit suisse, another thing is coming for them. is this something ubs may have been concerned about? stefania: that's right, more bad news just as they are trying to solve this. as you say, they are among the banks, so we must highlight they are not the only banks. and also that this happened before the recent turmoil of the recent weeks. what the u.s. government is trying to find out is how these banks treated russian clients and how [indiscernible] in recent years. we do know that credit suisse did have a big russian [indiscernible]. perhaps it is not that surprising that it has come around. dani: at the same time, ubs is

vowing to retain packages for staff, retention packages. what exactly is the aim here, what are they saying? stefania: the head of the world business, he has been a busy man. he has been traveling from switzerland to dubai to asia, to keep stock. stories -- panicking, new headhunters. just a tour to try to keep the [indiscernible]. these packages, sweetening packages could be given out as soon as next week. he really is on a mission to try to calm things and to keep hold of that. dani: think you so much.

continue drama, out of dubai. i do want to mention, announcing a new share sale, it will be a 1.8 billion euro capital increase, that might mean that shares fall, more shares mean a diluted ownership for those that already exist. they say that they are doing so to repay some state aid, and they will also use this to significantly reduce some of their credit lines. and paying back state aid, 1.8 billion capital increase. moving on the short seller drama, jack dorsey says it will explore legal action against hindenburg research. that happened after the short seller issued a report yesterday alleging the payments company facilitated fraudsters. let's get to simone foxman. what is hindenburg alleging?

simone: hindenburg's allegations are really about cash -- cashapp. hindenburg says they spoke to any number of former employees, they have poured through documents, through litigation documents, they have also listened to rap songs. their conclusion is that there are a lot of fake users on the cashapp platform, employees said 40 to 75% of users perhaps that the company does not do enough to limit the number of fraudulent and fake users even when it sees signs that they are. and also the behavior that these users are doing online is sometimes criminal or fraudulent. that is where the rap songs come in. hindenburg points out that in several rap songs they cite the app as a way of trafficking drugs or facilitating some kind

of violence. also, covid-19, people seem to have gotten some payments there, potentially fraudulent. we saw shares fall 15% yesterday, hindenburg believes there is a 65 to 75% downside, we saw dorsey's well take a hit. of course, block pushing back saying they are exploring legal action and not all the investors are convinced, either. you saw kathy woods actually by shares worth 20 million -- $21 million at the close, adding to a position of about 9 million shares at the end of last year. most analysts believe at least she is in it for the long haul. dani: some of these allegations aren't exactly new coming into the market. simone, thank you very much. markets bet against the fed as traders position for the end of the tightening cycle and cuts to come. this is bloomberg. ♪

dani: markets are betting that the fed is wrong. and there won't be any further interest rate hikes. short dated bonds have rallied basically everywhere and at the same time, what you're looking at here our eurodollar futures.

they have priced in the most amount of rate cuts since 2008 in the 12 months starting in june. the fed will cut, misplaced or not as fueled stock market gains. esther, are you feeling confident on all thought rate cuts is what is in store? esther: maybe not next, there may be another rate hike. the market is very inclined to price in rate hikes. ahead of these turmoils, we need very hawkish tones from the fed, various strong data from the u.s.. of course, it is sensible for the market now that uncertainty has increased so much to that on rate cut. clearly, not too much to this encourage this. they also said, everything is unknown. we could do whatever is needed, but they also pointed out that

there is a tightening of credit foundation due to these turmoils that could lead to disinflationary pressure or also, they have dual lending and also have to have employment in mind. i think the fed will be one of the central banks that needs to cut first due to the mandate as soon as the economy cools significantly. dani: do you want to follow on this dollar weakness? if they eventually are going to cut, do you write out that trade? esther: the big thing is, there is so much uncertainty right now. it all depends on whether these turbulence is -- they have calmed down a lot. for the u.s. dollar to regain, we really need to see strong data. the problem is, they have an it out, it takes time to know how much the fed, how much influence this has on the economy. it is not the data we are seeing

over the next few weeks, but rather what we are going to see in a month. i think it will be a big risk to bet on u.s. dollar strengths, because the fed has very much this uncertainty where the other central banks are much more confident and more focusing on the current data and the current data still points towards further rate hikes. dani: this is what interests me. the corporate -- they are still very strong in the u.s.. i know this is a little bit away from your world, but this really captured my attention yesterday. general mills, the big consumer brand, had earnings yesterday. in the earnings release they said that for the full year, they mean 2023, the company continues to expect input cost inflation of 14 to 15%. that doesn't mean they are passing on those costs exactly,

but 14 to 15%, if a corporation is expecting that for the full year, is there a big risk that if the fed not even just doesn't cut or slows down or causes, is there a risk that we do get runaway inflation? esther: i think the fed will not go down this path if there are really signs of runaway inflation. they simply expect that the condition works in a way that we will not see this or wouldn't allow them rate cuts, that is also what the market is betting on. it is clearly coming down to the ecb, they said, is there a trade-off between price stability and financial market stability? the fed was more taking a [indiscernible] approach, while the ecb and we have said, we do not see this trade-off. it does not influence our rate decision right now. that puts, at least for now, the

swiss franc and european currencies in general any better position than the u.s. dollar as long as this uncertainty lingers. dani: does not mean we basically, until we get any clear data that waits one where the other, you can ride write out that trade? every single central bank in europe versus the u.s. is being more hawkish. esther: the problem is, this has been already to a large extent, -- that would be the side that still seems more attractive as long as we do not get other voices from the fed, more putting this into a position. that is why i think that what we hear from the fed speaker in the coming weeks to be so crucial for this trade or the u.s. dollar in general. dani: i feel like in all of this drama in the u.s. banking story, we have ignored japan and the yield curve control story.

it feels like a long time ago that was dominating headlines. we got some japanese inflation numbers. it looks better, but that really has to do with government subsidies around energy. the underlying inflation is still strong. the yen has been this morning on that. do you want to by the right now? do you want to price in a quicker path to normalization? esther: we do not know. he also expected inflation to calm down by march. we see this divergence. of course, the bank of japan they know the factors and they will not be misled by a slowdown of the headline. still, there are so many risks to a very fast normalization by the bank of japan and i still think they will take a cautious approach.

inflation in general is still quite low at least in global comparison. we do think that, he does not seem to be a fan of the yield curve control. we might see some kind of exit there. it will not be a very fast normalization because it is also not yet warranted by the inflation numbers. also, the global environment plays into it, because the yields have gone down recently, up a little bit now. but in general, the upset is not that much under pressure right now. we will see how things play out. dani: maybe there is a little bit of a haven coming back

before we let you go, i just want to touch on one market that was even more volatile than the rest, which is saying something, this is brazil. a bad day for the riau -- riau. i know -- how are you thinking about latin america at the moment? they are ahead of the tightening cycle, perhaps inflation has already peaked there. is this a time where you want to take positions against some of these currencies? esther: in my opinion, what we have seen is that the mexican peso and the brazilian riau have been a very hawkish stance from the credible central banks, despite strong criticism from the government. this is a factor for the currency. only as long as these markets do

not increase. if we do see that the u.s. economy will stand strongly do to these concerns about the u.s. financial sector, then the central banks also have the most room to cut because they have been so much ahead of other central banks. if we see the world turning more to easing monetary policy, these currencies will most likely be the currencies that have the most to lose because it central banks have the most firepower to support the economy. dani: great stuff, as always. enjoy your weekend. coming up, we continued the central bank conversation, pushing ahead with monetary tightening this global banking turmoil. the banks more so than the fed. we will look behind the moves coming up later in the show. this is bloomberg.

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dani: let's get to your first word news with simone foxman. simone: the ceo of tiktok has faced nonpartisan fury and a hostile hearing in the u.s. congress. shou chew took questions of members of both parties while trying to reiterate the short video apps independence from its chinese owner. u.s. lawmakers are weighing how to force the company to sell its share of tiktok or face a possible ban. >> i have seen no evidence that the chinese government has access to the data they have never asked us. >> i find that actually preposterous. >> i see no evidence of this happening.

in order to assure everybody here in all our users, our commitment is to move the data into the united date, to be stored on american soil by an american company, overseen by american personnel. simone: u.s. prosecutors are to seek the extradition of terror form labs co-founder after charging him with fraud. he was arrested in montenegro where authorities say he was trying to fly to dubai using falsified travel documents. he helped create the terra ust stablecoin that collapsed last may, triggering a $40 billion cryptocurrency implosion. his lawyer has previously said he would seek to dismiss any u.s. lawsuit and he says he is not on the run. japan's inflation has slowed for the first time in more than a year as government energy subsidies amassed a stronger underlying trend. consumer prices excluding fresh food rose 3.1% in february,

dropping more than a percentage point from the previous month. a separate index that strips out volatile prices rose at its fastest pace in over four decades. 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. dani: simone, thank you very much. the bonds continue to get a bid this morning, 10 year in the u.s., australia, japan, all seeing their yields drop, markets pricing in more cuts to come from the fed. japan, that has gotten a record amount of buying in the week through march 17, acting as a safe haven amid the banking crisis. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us.

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dani: good morning, this is "bloomberg daybreak europe". reversed for hours saying the u.s. would be prepared to take more steps to protect depositors if needed. stocks and futures are mixed amid the banking uncertainty. the doj scrutiny, credit suisse and ubs are said to be among lenders facing a probe into whether employees helped russian oligarchs evade sanctions. plus, shares of block tumbled after hindenburg research shorts the payments company, alleging it facilitated fraud. block calls the report inaccurate saying, it will explore legal action. happy friday, you made it to the end of the week. not making any more sense than the past two weeks. equities in the u.s. continue to rally, futures are up after tech stocks gained more than 1%,

despite the fact that banking stocks continue to fall. banks continue to tap the facility from the fed. there is clearly still concern here, but perhaps the fact that as you can see, we are pricing in cuts from the fed, equities are happy to keep rallying. investors are happy to keep buying risk. citibank says watch out, we are not so sure when it comes to things like stocks and credit. two year yields in the u.s., lowered by three basis points. in australia, it goes down by six. in japan, inflation still remaining sticky, there is that pressure. that is causing folks to snap up the yen versus the dollar by about half a percent. we were just talking to esther about the future of the end. it is not quite clear at this moment. we are also seeing some haven buying amid the banking crisis. central banks are in focus, it has been a busy week and will continue to be busy. hawkish ecb officials are

getting bolder about the need for more tightening with last week's rather half-point landing without an incident and a quarter-point fed increase some policymakers are making the case for higher borrowing costs to tame inflation. it comes as other central banks push ahead with their own tightening campaigns. yesterday, we had the boe raising its benchmark by a quarter-point. and norge's bank delivered a quarter-point increase in the swiss national bank one ahead with their expected half-point hike. officials are confident that the banking crisis is contained. >> the credit suisse problem is much smaller, given the fact that ubs will take over credit suisse. that problem is solved. we have a stable banking system in switzerland. obviously, we have uncertainty on the global scale. we have to continue to follow that very closely and to see

what is the impact on the swiss situation. dani: so much to dig through here. there is no one else we would rather do it with man jamie. let's start here in the u.k.. we have that riproaring inflation data, earlier in the week, the boe hikes 25 basis points, are they done? jamie: i think in all likelihood, they are. the labor market is turning. banking season is starting to take down. headline inflation will be plunging over the coming months. i think this is going to take the sense of emergency off the table for the banks. i think markets have 25 basis points price in for may into the summer. dani: the debate they are dealing with that a lot of banks are dealing with right now is this trade-off between price ability and financial stability.

is that a false dichotomy? is that a true trade-off that central banks need to grapple with? jamie: i think it is an important one. when it comes to liquidity, i think there is no real trade-off between price stability and financial stability. you can underpin the banking sector, i think that's fine. i think where the trade-off emerges is when it becomes a question of solvency. the lift interest rates much that some parts of the economy are affected on a solvency level, that makes it almost impossible to bail people out. that trade-off does exist, but it comes at a point when interest rates have been lifted so much that it causes real genuine underlying sovereignty issues in the economy. dani: that certainly accounts for a fed that really voiced uncertainty more than anything. thank you so much, jamie.

it wasn't just developed market central banks, we also had 2 p.m. banks which took the contrarian approach this week, a defiant resilient central bank kept its interest rate unchanged. the turkish central bank held off from cutting rates, as the lira continues to come under pressure. let's get to phoenix. i want to start with brazil, because this move from the riyal is a bit confounding we have the central bank, a hawkish hole, but the riyal falls yesterday. what do you make of that? phoenix: i think that is still very temporary volatility, especially with the pressure that is coming from the presidency with respect to how he wants to see anna terry policy eased, and that pressure is still lingering even though

we think ultimately, they will back off on any kind of nuclear option with respect to changing the central bank's independence. it is a bit of a market overreaction, a bit of concern over the president impact on monetary policy. i think overall, the trajectory for the lira is likely to still be strong from here on the back of the hawkish central bank and on the back of that inflation dynamic improving in brazil. dani: lula, yesterday, speaking to reporters in rio de janeiro, saying there is no explanation for any human on the planet earth for the interest rate in brazil to be at 13.75%. is there a risk that in trying to affirm the independence of the central bank that they are perhaps a little bit more hawkish than they should be in this moment of global turmoil? phoenix: i think that is

possible to speculate on that point. i think the central bank is still very concerned about the core dynamics which have been sticky in brazil as with other economies and they have cautioned -- reason to be cautious about how inflation is going to develop over time, food prices are high, still, that will be a source of upward pressure on the headline components. yes, it may be part of it is around trying to protect the independence of the central bank and trying to defend against interference from other parts of the government. overall, i think they are doing their job with respect to really being cautious about the stance. dani: taking a step back to the em space, we were just talking to esther who was saying that if this market is right and a cutting cycle is on its way from the fed and that turns global, it is em currencies that have the most to lose because they

have hiked the most, so they can cut the most. do you think that is right? the em has the most to lose in a cutting cycle? phoenix: i think there is a big bifurcation in the em space. i think there will be a huge outperformance and some underperformance out of em currencies for some of the same reasons, the cutting cycle is going to be much more beneficial for the fixed income space and they are geared much more to the inflation dynamics whereas the currencies are going to be much more sensitive to interest rate differentials and the sentiment of concerns and that is going to also be geared towards growth implications which are turning more negative as time goes on. those will weigh on the currency outlook. we do definitely see a big bifurcation and divergence in the performance between fixed income em and currencies in em. dani: you also point out that

emerging markets have been really resilient against the backdrop of this market turbulence. do you think that there could be more of a spillover effect or is it right that investors are really separating out the banking story from a lot of these em markets? phoenix: i think the rapid reaction of the central bankers and the regulators and stepping in to divide those provisions of liquidity so were, does have early stemmed -- those have really stemmed the widespread contagion and banking center crises elsewhere. i think those have been crucial in limiting the pain that we have seen and helping to produce that em resilience that we have witnessed so far. we only had basically one bad day in em last week, and recovered pretty fast. i think going forward, it will be around the three themes that have emerged over the past 2.5 weeks. that is a much more different

growth and inflation mix, which is turning much more negative. instead of having very high growth and high inflation, we are much more concerned about the possibility of slower growth and more contained inflation profile. the second theme is around how disorderly the deceleration out of the u.s. can happen with all the repercussions from the potential for more shoes to drop. we will have disorderly deceleration, that is a big concern around what that means for higher volatility across the different asset classes. the third theme is really about how the market is mispricing what the fed is seeing with response to keeping rates on hold for a long time once they reach the peak. that mispricing will reflect into also higher rate and in turn, weigh on the kind of metrics that we might see out of

em. dani: if we are going to get something like rate cuts out of the fed, it is a disorderly acceleration of what you were describing the environment would have to get pretty bad. that is all we have time for, really enjoyed catching up with you today. let's get you your bloomberg business flash with simone foxman. simone: payments company blocked says it is exploring legal action against hindenburg research for a short word which it calls factually inaccurate and misleading. block shares fell 15% after any word of accused the company of enabling fraudsters. hindenburg's investigation alleges that scammers were using blocks cash app to take advantage of pandemic stimulus programs. accenture is joining the growing list of countries in the consulting sector that are laying off workers.

they will cut 19,000 jobs over the next 18 months. that is about 2.5% of its workforce. over half the job cuts will affect people in nonbillable corporate functions. apple is said to be planning to spend a billion dollars a year to promote -- produce movies that will be released in cinemas. this is part of an effort to raise the tech companies profile in hollywood and attract subscribers. the list of potential releases includes films from directors including martin scorsese and ridley scott. dani: simone, thank you very much. can't wait to see what for our movies scorsese releases with apple. the ceo of tiktok testifies in congress, but wasn't enough to placate lawmakers. this is bloomberg. ♪

dani: tiktok ceo shou chew faced a bipartisan grilling on capitol hill yesterday as u.s. lawmakers seek to ban the chinese own app as a security risk. he insisted there is no evidence that china has access to user data. he also says security and privacy concerns are not limited to tiktok. >> the potential security, privacy, content manipulation concerns raised about tiktok are really not unique to us. the same issues apply to other companies. we believe what is needed are clear and transparent rules that apply broadly to all tech companies. ownership is not at the core of addressing these concerns. dani: alex is with us now to discuss. his tiktok better or worse after this? alex: it is very hard for the ceo to going there and convince

lawmakers, most of them seem to have come in with a pretty fixed view on what tiktok was and what it represents and what its potential was. it was a tough task, i am not sure the consensus suggests that he achieved it. dani: a lot of claims in terms of what is at stake and what the chinese government has been doing, has the chinese government responded? alex: they said they would reject any effort to force bytedance to sell tiktok or its u.s. business. it is hard to see how i mechanism such as that would work anyway. you have to also think about the fact that in the opposite direction, western businesses coming into china are often forced to do things they don't do in other countries. the carmakers how to sell 50%, how be in joint ventures with local carmakers, there is precedent in the opposite direction, and beijing seems to object. dani: you have to imagine u.s. lawmakers would be loathed to be

compared to chinese counterparts. beyond those measures, beyond fanning it or forcing a split, what other control measures could be explored? alex: tiktok has been pushing what they call project texas where all their data is held by oracle, oracle is the administer of their cloud. and they will have people who are able to then check the algorithm and make sure they are not doing anything malicious. the challenge with so many of these things is that there is legislation in china which stipulates that if you are a chinese company and the state asks for your assistance, you have to provided. whether they are doing it right now or not, it is that potential that has people very scared my which puts the company in a bit of a bind. they can say that they have no evidence that china is doing anything, but in five years time, lawmakers will say, something could happen. it was the same with huawei.

they are not seeing evidence that they are using backdoors, but it might come down the line. dani: alex, thank you very much. alex webb from the bloomberg team. we will talk about france and emmanuel macron who compares protests to his country to the capitol riot's. the nation is striking, unrest over pension reform. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak europe." french unions held more strikes against president emmanuel macron's reform of the country's pension system a day after he went on television to insist he won't back down. let's bring in

caroline. at one point, comparing this to the capitol riot's. is that a fair comparison? have the strikes turned violent? caroline: you look at what happened on thursday in paris, especially, the streets are definitely not coming down against this pension reform. you had more than one million people protesting across the country according to the police, 3.5 million people according to the cgt union. quite a big crowd out there. it was actually more violent than usual on the sidelines with the so-called black blocks. these far left groups actually clashing with the police on several occasions, especially in paris and you had that one -- 150 police officers injured with some bins set on fire. the turnout at these protests had gone down over the past few

weeks, but since the government actually survived these on monday, the turnout yesterday went back up, more than one million on this graphic. that is because of the fact that the government wanted to force this reform without a vote that really angered the streets. dani: is there any sign that the government might react differently this time? caroline: as you mentioned, the president appeared on national television on wednesday, he tried to appease the tension, comparing this to the capital riots in washington a couple of years ago, saying he would stick to his pension reform, that it was in the best interest of the nation. he came out as arrogant in this interview, he failed to convince 70% of the french who actually

felt displaced, who felt they didn't listen to the streets. the strikes are likely to continue. already, you see some refineries being disrupted, also the deliveries to some paris airports. we could even wonder if the visit of king charles on monday will go as normal because obviously, it would be a bit strange to show on national television king charles having a steak dinner in versailles on one side and her test and garbage piling up in paris on the others. we will see how this goes. dani: thank you very much. european leaders are continuing a high-level meeting for a second day in brussels. yesterday, the focus was ukraine. today, the economy after a week of banking turmoil. later this morning, ecb president will brief them on the economic and financial situation.

let's get to maria tadeo. what are we expecting? maria: what a flurry of communications from the european central bank. if my memory serves right, this is the fourth time or would be the fourth time in a week that we hear from the head of the european central bank. thursday, decision day. monday, the credits we steal. then you had her on wednesday at the conference in frankfurt and today, she is back at it in brussels. a lot of this has to do with sending this message of impotence, but also to politicians and lawmakers but also what hammer down what has been the standard from the european central bank for a week. this idea that financial stability and price stability are compatible. they can handle both at the same time. you know very well that means the hikes will continue.

you'll also hear a lot of ecb voices saying we need to start thinking when the market becomes more stable, about what happens. the sense of direction and travel is very clear. the other issue i want to point out, it will be interesting to hear from madame lagarde. is the turmoil over for european banks? but who is to blame? i have heard a number of officials behind the scenes are just a lot of this was created by swiss regulators. nothing to do with european regulation. dani: as we are talking about yesterday, the war in ukraine was the big topic and president zelenskyy spoke to leaders via videoconference only about a minute, but what did the president say? maria: in the vibrations of the economy in this banking turmoil, the fact that you had a high level meeting between china and russia, for the ukrainians this is top of mind.

what he said very briefly, the more ammunition to continue to fight and that he does not really understand the rationale as to why ukraine is not getting modern fighter jets. he did get what he wanted to some extent, this promise for more ammunition, a million rounds, a commitment from european leaders. the war, the story doesn't change. dani: the story continues. korea stays on top of it. -- maria. same old story, a bid for bonds, rate cuts priced in, a more hawkish ecb dealing with the banking fallout. we will continue the coverage for you. markets europe is up next. this is bloomberg. ♪