dani: this is "bloomberg

daybreak: europe". i'm dani burger in london and these are the stories that set your agenda. ubs gets a new boss, an old name, sergio armani is named group ceo effective april 5, alibaba leads gains in asia as the tech giant announces a six-way split of its business. futures point higher amid uncertainty over the fed path for rates. profits plunge, jeffries warns wall street's dealmaking slump is not over yet, a harbinger for bank results next month. swiss bank shakeup continues, sergio armani is back at the helm of ubs. ralph hamers has agreed to step aside according to a press release. he came to serve as ceo on the first of november, 2020, so less than three years later, sergio ermotti's back.

the board took this decision in light of the new challenges and priorities facing ubs after the acquisition specifically, this press release goes through sergio's credential saying he transformed the bank after the financial crisis, cut its footprint, achieved cultural change and regained the trust of clients and stakeholders, and restored the people's pride in ubs. his intense and deep understanding of the financial services in switzerland and globally make him ideally placed to pursue the integration of credit suisse. let's get more on this from our banking reporter who has been covering and looking at this breaking news for us. stephan yet, can i get your first take on this? >> what a surprise. there could not be any more

twists and turns. it is a story of come back, it will be interesting to see how investors take this story this morning. dani: one of the things that stood out in the press release is what they talked about was how ermotti restored confidence when he previously worked at ubs, talking about cultural change, restoring people's pride in working for ubs, regaining the trust of clients and other stakeholders -- how does this speak to the picture of trust in ubs and more generally, swiss banking? >> it will be interesting, he left, there was a reason why he left. he helm to the bank a long time between 2010 through 2020, but at the end of the day he did leave. we know he will take his position from next month.

i think ubs is looking to do what it can to make this a smooth transition. he knows the bank well, obviously. maybe he is the right man for the job. dani: stefania, had anyone been discussing ralph hamers stepping down? where there any inklings that ubs might be looking for a new ceo? >> no, this is a surprise. we know ralph hamers will stay on. he will be working alongside ermotti. he will be consulting. he will still be there but at the end of the day, it will be ermotti in charge. so let's see what happens. dani: thanks so much. stefania in dubai. sergio ermotti come back to ubs

as the ceo effective fifth of april 2023. that should move some ubs shares this morning, but in the meantime, let's check your market because what is dominating sentiment is alibaba. hstech up 30%, alibaba up 13.5%. it has to do with alibaba's breakup. u.s. futures and stock futures both surging. bank of america saying clients had the largest flows into u.s. equities last week since october. that's not exactly being rattled over the banking crisis, that is going and buying risk. elsewhere, it is a story of shorts being wiped out at the front end of the treasury curve, citi data shows we are now at a more long position, so clearing out shorts potentially means the capability of the front end to rally is hamstringed by

positioning. aussie dollar comes back down this morning after weaker inflation from australia, cementing perhaps the rba's ability to pause. nymex krudys up .5%. shares in alibaba have soared after china's online commerce leader announced plans to split its $220 billion empire into six business units. it will see a major restructuring that promises to bring several initial ipo's. let's bring in sophia forte cost the for more. it's clear the market likes this. what sort of value drive is alibaba hoping to get out of breaking it up? >> morning, dani. it's two reasons why the market likes this so much. on the alibaba side, it is a case of unlocking shareholder value. this is a massive company and when investors look at this stock, is it a tech company,

e-commerce, a consumer company, there is a lot of questions. and if you separate those businesses, not only can you ipo, you can get better valuation for what those businesses are. ai and cloud computing is one where people are incredibly excited. that will anchor alibaba's growth going forward. it is about valuing these businesses independently of the parent company. the flipside is this goes towards addressing beijing's criticism that companies like alibaba, let's not forget its competitor tencent, were monopolies. this has been the driving force behind an almost three-year crackdown on the tech sector. this is not actually a solution that appeases shareholders but beijing, you unlock value but also reduce these companies and make them smaller. it is setting a game plan for what the future of china tech

will look like. the expectation is others will follow suit. dani: perhaps why we're seeing all of hstech rallying this morning. thank you so much. regulars are singling out a 5 million euro bet on deutsche bank's credit default swaps as the reason for the selloff in shares on friday. let's bring in valerie tytel on this. i know one of the ecb members was speaking about cds's yesterday. we scratched our heads saying what is this about? how does one trade in a deutsche bank cds because this? >> it was an illiquid contract, one year subordinated cds. that is what regulars and the wider market are pointing to as what caused the rout. it is very opaque, very shallow

and very illiquid. the cds market did go through an overhaul after the greek debt crisis. and attempted to make it more standardized, especially when it comes to a restructuring event. the cds market generally has been less active since 2007. we have data on cds volumes when it comes to the single name deutsche bank volumes. the average daily trades is nine, an average notional is 50 million, this is data we have from the dtcc. and a very calm market, it is still very illiquid. the problem is even though the market is illiquid and not actively traded, a lot of bank risk models use it as an input when evaluating cross county party measures. they can vary widely from one

platform to another. regulars see this as an issue and might be out to address it. dani: valerie tytel tracking all the crazy moves over the past few weeks. let's look at a few things we're watching out for today. 9:30 a.m. u.k. time, chancellor jeremy hunter will appear before parliament's treasury committee. 12:00 p.m. data from the u.s. that includes mba mortgage applications with u.s. pending home sales data due at 3:00 p.m. later today, a conference with i sabel schnabel.also today, it is the u.s. house's turn to focus on recent bank failures, that congressional hearing will continue. ecb hawks are feeling bold despite banking woes, the central bank signals there is more space to raise borrowing costs further. this is bloomberg. ♪

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dani: sergio ermotti returns at the helm of ubs. the company releasing a statement a few minutes ago that ralph hamers will be stepping down as ceo, and instead will be an advisor to ermotti during this transition period. he will come in after a general meeting on the fifth of april. the statement specifically citing sergio ermotti's experience, nine years as ceo of ubs, and the need for him to come back to from the quote, new challenges and priorities facing ubs after the announcement of the acquisition of credit suisse, saying he changed the bank, cut its footprint, regained the trust of clients

and other stakeholders and that is the reason he is the man for the job now that they are integrating credit suisse. we will keep you up-to-date with any reaction. elsewhere in europe, despite banking woes, ecb hawks are feeling bold. the central bank's governing council member muller said there is space to raise borrowing costs further. he told bloomberg yesterday while inflation is slowing, risks are skewed to the upside. some of that language, and a pause and even cuts from the fed expected sick morning -- supporting big euro. let's get to jane foley at rabobank. given the initial inkling of support for the euro, i want to get your call because your three-month and a six-month view suggests strength from the dollar, or at least resilient. can you walk us through your thinking as to why the recent bout of dollar weakness is not here to stay? jane: i can sit here with my

economist's hat on and agree that there are more inflationary pressures and labor shortages, that is throughout most of the area, so inflation is likely to be sticky. be the bigger picture is more than that. the bigger picture is we are operating in an different environment, we're not in that post-global financial crisis of quantitative easing with the central bank buying up bonds. it is an environment of higher inflation where we don't necessarily have quantitative easing. the markets will carry on testing for weaknesses in that environment. if we look at what we had in the banking sector the last few weeks, perhaps if we look back to the mini-budget last year in the u.k., we can see the market testing weaknesses. and i don't think the banking issues we had the other day, even if one desperately wants to be over, i don't think it is.

we are going to have more testing of the environment in the months ahead, as we try to work out weaknesses in this higher interest-rate environment. dani: andrew bailey was talking about this yesterday in front of the treasury, saying it is not fundamental weakness that investors are looking for, but it is what you say, they are testing out this market. what else looks right for a test? what else looks week that investors could poke at? jane: that's a wonderful question, that's the difficulty. if we could predict the crisis, it probably wouldn't happen. we can't see around corners but investors really would. you explained 10 minutes ago about what triggered the deutsche bank issues, it was one trade. i think was more than that. it was years of the market understanding that the german banking sector is overbanked.

years of previous weakness in deutsche, and the market probing and testing, it is a continuation of that. the german banking sector is not out of the woods, decades of people calling for more consolidation. you look at the tech sector, we have had good news today with alibaba but we have had months now of job losses, are there going to be issues when the market no longer thinks let's buy tech stocks because they generally go up. these companies have not made profits for a long time. i think there will be a change in market psychology because in a higher cost of money environment, the people's willingness to take risk altars, that is the bigger picture and why we're reluctant to see the dollar weakening significantly because it is a safe haven after all. dani: speaking of safe havens, on a one-month basis began is

the best performing g10 currencies, can began regain his position as a haven? jane: i think it will to some degree. there have been reports recently of large japanese firms moving into longer-dated jgb's. there were some weaknesses in that data last year because of the importation of energy. but it still has a current account surplus, that helps the swiss franc, too. the dollar swiss haven is very different. they need dollars to pay invoices or their debts, it is the dominant currency on of the global payment system, that is why it is a safe haven. but for the yen, they still have most of their fundamentals but we did have the ubs credit suisse issues over the medium to longer term that may test

confidence in the swiss franc. but i don't think that will be apparent in the short term. dani: it did have its biggest one-day plan for the dollar since 2015 when the banking turmoil erected. -- turmoil erupted. we are showing the best-performing currencies, sterling is the best performing despite the lows in the u.k., what do you make of that? jane: that is interesting, actually sterling has been doing pretty well for the last month, maybe longer than that. this is just a function of so much bad news within the price. although the u.k. economic data is hardly strong, hardly brilliant, it is better-than-expected. we go back a few weeks to that january gdp number, month on month, the market was expecting something much weaker. we can look at the public finances data, too, february was not great but january was stronger and that gave the

chancellor a little leeway at the last budget a few weeks ago. better-than-expected dated taking out some of that gloom. last year the bank was talking five quarters of negative growth, we're not going to get that, the u.k. may just about avoid recession this year, so the market is pricing out some of the really horrific news to a situation that is better and that is why sterling is doing well. dani: if we're not going to get recession, and inflation in the u.k. is still above 10%, what does that mean for the restrictiveness of the boe? do we need to rethink how far and fast andrew bailey and the npc are going to have to go this year? jane: i think markets are rethinking -- maybe all central banks -- given the market's attitude of what constitutes

monetary policy in light of the last couple of weeks. what was already on the table for the bank of england, as it was for canada and rba, too is this issue of have they done enough? will they now pause? that is something the chief economist pill had mentioned a month or two ago as well. the issue of apostles on the table just because of those pipeline hikes, but then you have the much larger inflation print. the bank of england are still forecasting inflation to come down quite sharply this year. they saw the sharper or higher-than-expected cpi print as something more temporary. we have to see if that is true but we're still hoping to see inflation come down, so maybe a little more tightening, one more or so in the pipeline. but it is going to depend very

much on the next inflation print. dani: you mentioned australia. we did get an inflation print this morning, decelerating faster than expected in february. is that the data we need to see from these economies to cement any sort of pause? jane: certainly, australia, maybe canada, too. their labor markets perhaps are going to be tight. it is tight in the oecd, participation rates are stronger, their policy is importing workers. in the past they have had great success in importing workers. that for generations cap down wage costs. if they can go back to that sort of model, that would be helpful for them, too. perhaps a little bit more optimistic on most ray liotta with -- in australia getting the

inflation print down because of that model. but certainly, the cpi data today helps underpin speculation that they are approaching a because in policy in australia. dani: now we just need to see it in other economies to feel confident about where we're headed. really great to catch up with you this morning, jane foley, head of affect strategy at rabobank. french banks are facing more than a billion euros in fines. we will bring you that story shortly. this is bloomberg. ♪

dani: let's get your first word news. christine is in dubai. >> top officials in the u.s. have outlined what is likely to

be the biggest overhaul in banking regulation in years. the fed vice chair for supervision says the rules will include higher capital and liquidity requirements for institutions with assets over $100 million. tighter regulation is likely to meet opposition from republicans who have previously thought to standards for lenders. u.s. prosecutors filed a new charge against sam bankman-fried accusing him of bribing chinese officials to unfreeze accounts at alameda research. it is alleged he authorized a $40 million payment in 2021 to regain access to the assets. he already pleaded not guilty to several fraud charges. profits plunged at jefferies in its fiscal first quarter as a bump in equities and fixed income trading failed to offset a slump in investment banking. revenue at the u.s. bank dropped 3.2% and fell short of a list estimates after corporate

dealmaking and sales of new securities waned last year. australian inflation decelerated more than expected in february, driven by easing in housing construction costs. that bolsters the case for the central bank to pause rates at next week's policy meeting. consumer prices rose 6.8% from a year earlier, down from 7.4% in january. the yearly cost of attending an ivy league university is nearing $90,000. total costs including tuition, room and board at elite, private colleges are already upwards of $320,000 for a four-year degree. global news powered by more than 2700 journalists and analysts in more than 120 countries. dani: thank you very much. that is an expensive diploma. as we head to the half-hour

mark, chinese tech rallies led by alibaba. we're tracking gains in the u.s., adr's up nearly 14%. alibaba will split into six business units. that also means potential for more ipos. does this outline the path for other chinese tech? we are seeing jd.com, baidu and others rallying, it is a potentially elegant solution to criticism from the chinese government of monopolies. does this mean the era of crackdowns are done and dusted? we get back to the ubs story, ermotti's back. ralph hamers will be an advisor. this is bloomberg. ♪

dani: this is "bloomberg

daybreak: europe". i'm dani burger in london. these are the stories that set your agenda. ubs gets a new boss, sergio ermotti is named group ceo effective april 5. alibaba leads gains in asia as it announces a six-way split. futures point higher amid uncertainty over the fed path for rates. jefferies warns wall street's dealmaking slump is not over yet , a potential harbinger for big bank results next month. the big story this morning breaking about 30 minutes ago, ubs named sergio ermotti as the new group ceo starting april 5. let's get to bloomberg's francine lacqua who is now splitting her time between london and ceric. -- zurich. the ink is not even try on this deal between ubs and credit suisse. >> we had rumors they were looking for an old pair of hands

who knows what they are doing. sergio is considered one of the most talented bankers of his generation. he knows ubs intimate late he was chief executive for nine years. the task of putting these two huge, systemically important banks together and selling off credit suisse very fast in terms of what they want to keep in terms of strategy will not be easily done. the way they decided less than two weeks after this merger happened, is they want to make sure they get the strategy right. maybe this come from the chairman, they recognize how big the task is. sergio knows ubs intimately. because credit suisse was his biggest rival, maybe he has insight into how to unwind parts of the investment bank. dani: how aggressive is that going to be? francine: this is a good deal for ubs, you get credit suisse, and paul davies also makes this argument in his opinion piece, being important number is tangible book value, that went up 34% after the deal was

announced. this means they are sitting on assets they can decide to deploy. if you look at the main three things we are figuring out, it is what to they do with leveraged finance, some of the markets. this west bank is something in itself, but it is really the investment bank. a lot of the risky stuff is here in the u.k., what do they do with it? how much litigation and liability does it have on them that? dani: that's fascinating because credit suisse was known as the leveraged financing house prayed what happens when ubs takes that on? are there other roadblocks that ubs has ahead of them in terms of this integration? francine: the easiest part is wealth management. an executive went to asia to retain talent. they have to cut costs, but difficult thing is cutting cost to a level they are happy with. if you look at the ubs surprise, this is a perfectly fine bank. they were giving back to shareholders with dividends and

buybacks, as they split off credit suisse things they don't want, they may keep things that could be surprising for the market. they need to preserve what ubs was. giving back to shareholders and making sure it doesn't dilute the strength of the bank originally. dani: who better than the man who ran the bank for nine years? it will be interesting to see the commentary, i know you will be on top of it. francine lacqua on the breaking news that sergio ermotti is back at ubs. in other breaking stories, jefferies profit plunged in the first quarter as a bump in equities and fixed income failed to offset a slump in investment banking. what does this portend for the rest of the sector? let's get back to our finance editor. a lot of stories for you to keep track of this morning, let's stick with jefferies for now.

what does this sneak peak at banking sector earnings tell us? >> that's right. earnings have plunged 42%. quite a big drop. these results act as a bellwether, an indication of what could come for the rest of the banks in the u.s. we know investment banking took a hit last year. dealmaking was down across the world. so this is an early indication that this slump in dealmaking could carry on into this year. maybe there'll be more banks that will report a drop in revenue. the dani: speaking of issues in dealmaking, goldman is shaking things up. and they have had some bankers exit as well. is this in any way related to this to investment banking narrative that banks are facing? >> we're hearing from sources that three senior tech bankers

have recently left goldman. it might seem like a small number, but very senior positions. it's another sign that this drop in dealmaking is really persisting. goldman is in the midst of a huge shakeup. job cuts around, one of the biggest, 3000 job cuts ongoing. it has shaken up its financing group after merging its investment banking and trading operations last year. it's a sense of uncertainty, sense of this dealmaking drought that could continue and perhaps even more job cuts. dani: thank you so much. stefania bianchi in dubai who has covered nearly every single bank on the planet for us. let's get to french. including bnp paribas and societe generale face collective

fines of more than a billion euros as part of an investigation into tax fraud and money laundering. for more, let's bring in our bloomberg french finance reporter, raj. alex, what happened yesterday? there was a lot of noise around rates. >> the french prosecutor's office raided five banks across paris, namely bnp, its unit, hsbc and it is si -- natixis over suspicion of tax fraud. this leads to a strategy that allows investors to talk to other investors in order to avoid taxes. this was widespread on trading floors because it was a great area but french authorities

change their stance over this practice. investigations opened from december 2021. more than 150 investigators were involved, several magistrates but also prosecutors from germany which shows european authorities are collaborating on the issue. the germans are focusing on similar get different trades which are referred to as comics trades. dani: this story has been circulating for some time, but now it is happening at a time when everyone is so worried about the banking sector. what's at stake given this global backdrop for french banks? >> first of all, for french banks, their main risk is the penalty they could face. the french prosecutor's office yesterday said the collective amount of fines for all the banks amounts to more than one billion euros. it remains to be clarified exactly which bank has which

exposure in that one billion. but it as to the negative sentiment around banking in general. and french painting was quite shielded from whatever happened to silicon valley bank, credit suisse. french authorities said there was no contagion risk to the financial system, but this is really just a french issue. chairs dipped yesterday on the news -- shares dipped yesterday on the news. shares have been rallying, but they lost with the news of silicon valley bank and yesterday was not good news for investors as well. dani: alex, thank you very much. that's bloomberg's french finance reporter in paris. coming up, geopolitics in focus. u.s.-china tensions in the headlines again as taiwan's president visits the u.s. this is bloomberg. ♪

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dani: the ink is barely dry on the ubs deal to acquire credit suisse, and we have a new ceo. sergio ermotti will be coming back to the bank as ceo on the fifth of april. the press release outlines how at his nine-years at the helm of ubs, he turned around the bank, restored, something the bank looks to achieve again as it integrates credit suisse. ralph hamers has agreed to step down and will act as advisor during the transition period. sergio ermotti coming back to ubs as ceo on the fifth of april. turning to u.s.-china tensions, they are in focus as taiwan's president stops outline of the u.s. today. the white house's top security

advisor spoke with china's top diplomat in a call that neither side publicized. let's get to bruce einhorn in hong kong. first of all, this contact between sullivan and wang yi happened on friday, but we are only now hearing of it. do we know what was disgust? bruce: this has been very low profile. we don't know very much more. we know that the u.s. has been hoping to arrange for a phone call between the two presidents, joe biden and xi jinping. that has yet to come off. of course, relations have been on ice for quite a while now. the balloon incident back in february led to the cancellation of secretary of state antony blinken's scheduled trip to beijing. there had been some lower level interactions, so the head of the

new office of china coordination of the state department my he was in china last week. so perhaps that may be setting the stage for some higher level talks. but at the moment that is about all we know. dani: we also know that the taiwanese president is heading to the u.s. today, what are we expecting? will there be meetings and what will china's response be? bruce: this is a trip that the president tsai ing-wen is making on her way to visit some of taiwan's very few remaining diplomatic allies. these are in central america and perhaps one of the great values of taiwan having relations with some of those countries is that it gives the taiwanese president a reason to transit through the u.s. she will be stopping in the u.s. on her way to, and next week on her way back to taiwan she is scheduled to be transiting through los angeles.

and there is the likelyhood that while she is in california she will meet with house speaker mccarthy. this is something china is already warning about, saying it would be a severe provocation, and could lead to more instability in the region. dani: bruce, thank you very much. that's bruce einhorn in hong kong. coming up, we will get back to our top story this morning. ubs shaking up its leadership with an old name. we will discuss more next. on bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe". the largest u.s. maker of memory chips, micron, has given a better sales forecast and spark

hopes that an industry slump may be over. the company said sales may be as much as $3.9 billion for the third quarter, beating estimates. let's get to alex webb. is the chip slump over? >> they are certainly hoping so. the memory chip market has been quite saturated. some of the manufacturers have been declining to cut back on their supply. what micron is signaling is a resurgence of demand which would assuage concerns. they have basically been selling stuff already in their inventory . manufacturing has been sitting in their warehouses, so there is a huge amount of optimism even though the share has only reactive little bit. dani: elsewhere in your world of tech, amc had a good day yesterday, rallying 13%.

there was an unconfirmed report from another outlet that amazon may bid for the movie theater chain. it was only yesterday we were talking about disney and all the tech giants trying to cut costs. what would be the upside for amazon? does this type of deal make sense? >> we should cap yacht -- caveat, amazon gets connected to a lot of deals but do not ultimately materialize. amazon does not have a brilliant track record in brick and mortar. it has not made an outright success of whole foods. but the leverage would make some sense. we have seen some streamers go into cinemas because they feel they are creating an event around their releases that then make their streaming service more appealing. we have had reports that apple are looking at cinematic releases. it would be a big play from

amazon, but that might be the rationale behind it. dani: wedbush put out a out yesterday saying amazon is unlikely to buy amc and they would be better off buying a piece of cineworld, so maybe other deals to be had. sergio ermotti back at ubs, returning as chief executive to oversee the group's acquisition of credit suisse. news we learned an hour ago in a press release prayed let's get to russell ward on this. it's only been less than two weeks since ubs agreed to buy credit suisse. wire they bringing him back now? >> hi, dani. the latest in the saga is quite a surprise. it does make sense, sergio ermotti has nine years of experience at ubs. that is what they are drawing on here.

to take over this monumental task of integrating the closest rival. when he took over at ubs at a time of crisis, the european debt crisis, it was only a couple of years after the global financial crisis. he had this huge investment bank that he trained and focused on wealth management. these are the sorts of goals management at credit suisse had leading up to the takeover less than two weeks ago. he will really have to draw on that extremes to integrate credit suisse and make sure this is a success. dani: we just saw in the press release, the statement saying that in light of the new challenges facing ubs, after the announcement of the acquisition, citing his previous experience in restructuring the bank for bringing him back on. the fact that they are making this big shakeup, what does it say about the challenge at hand for ubs to integrate credit suisse? >> they are having to do

something credit suisse's own management failed to do. there were many restructuring plans that did not get off the ground. some of the biggest challenges are, for example, what to do with the investment bank. he has a bit of a challenge on that front with trying to unwind the deal that was done before the takeover for michael klein to lead the renewed credit suisse first boston. that is one challenge. he will look at what parts of the investment bank to keep, what people to keep. on the wealth management side, ubs and credit suisse are wealth management giants but there is probably not room for two. so he has to figure out how that will work out as well. dani: just thinking about the reason that hamers was brought on two years ago, it would bring ubs into the digital age and

grow a wider base of affluent clients. does this reflect not even for ubs, but this strategy towards digital and bringing in more clients, maybe it is falling away from the banking sector. we know goldman has been pulling back from its dreams for retail clients. is this a time for banks to reentrench and get back to the roots? >> that is fair to say. the digital side may have been a priority a while back. but that has fallen by the wayside, particularly in this case, given the monumental task of integrating these two huge entities in switzerland. and globally as well. ralph hamers perhaps had digital goals in mind but that is not a priority anymore. dani: just worth mentioning that ermotti is currently the chairman of swissre.

they will be holding an election process to figure out who succeeds ermotti at this point. this comes in the context of a very fragile banking system. and just fragile sentiment. we know that khan was trying to keep on credit suisse's top dealmakers. when you look at moves like this, what is sentiment going to be like at that bank -- that if you are a credit suisse right now, hopefully a new ubs employee, how difficult will it be to retain talent? >> that's going to be a huge challenge. it was underscored last week with khan coming to asia, his previous employer credit suisse. the deal is not completed yet. there were restraint of trade issues that ralph hamers mentioned to staff. we are still competitors here.

and yet khan said look, how about we get these retention plans in place already so they can retain the staff down the road? that's the big challenge. dani: i just want to read to you what hamers said in a statement. it is evocative. he says, integrating credit suisse is ubs's single most important task, and i am confident sergio will successfully guide the bank through this next phase. but circumstances have changed in ways that none of us have expected, it certainly wasn't something that many folks expected, yet another surprise with ermotti coming back. really great to speak with you today, that is russell ward walking us through the latest breaking news. sergio ermotti coming back to ubs, he served nine years prior. hamers took over in november of 2020 and will serve as an

advisor during this transition. we should get a read on the premarket trade in just a bit for some of these banking shares, but in the meantime, the dominant story is one of asia tech. alibaba breaking up in six different entities will not only mean an ipo, but may serve as a blueprint for the rest of china tech. does this mean the crackdown is over? one of the big criticisms of china when it came to its tech sector was that they were too big. so is this a model for tencent and others to follow? we are seeing other shares rallying this morning. elsewhere, equities continue to gain. looking at about 4000 on s&p futures, despite the fact that cuts are priced into this bond market. can you really have an environment where the economy is so bad? that is what clients of bank of america are betting on.

the biggest inflows into equities since october. meanwhile, the big short has been unwound. in the front end, two-year yields move higher, some selling this morning, back above 4%. according to citi data, we are now back a net long position for hedge funds, the short bet they came into the year with getting punished, and short covering causing the front end rally. dollar gets a bid as the aussie dollar falls after weaker than affected inflation data. nymex crude is at $73.73. markets europe is up next. this is bloomberg. ♪