dani: good morning. this is "bloomberg daybreak: europe", i'm dani burger in london. these are the stories that set your agenda. big tech is back, major stoxx and u.s. futures drift lower but not before a wall street rally powers the nasdaq 100 to a bull market for the first time in three years. sources tell bloomberg, the fdic may force top u.s. lenders to pick up a share of the $23 billion for recent bank failures. swiss lenders have encouraged ubs to bring back sergio ermotti as ceo to ensure the smooth integration of credit suisse. dip buyers rejoice, it is the second best year in a century for the strategy. it was evident yesterday with bank and tech stocks powering the index higher. what does that mean? we are finally back in a bull

market for tech, but can that last? you see some of it turning into weakness this morning. there aren't many more gains to come for the s&p, the index trading around 4000, bank of america's price target for the end of the year. there is too much risk that isn't being priced into american equities yet. asian stocks turning lower by a third of a percent, it was powered higher by alibaba yesterday. some consolidation after a day of outperformance. european stocks are moving higher this morning. across asset, it is a fourth day of losses for the front end of the curve, the longest losing streak in a month. the main driver is this daily use of investment grade bond issues from corporate. 20 came to market, that explain some of the weakest, two-year

yields above 4.1%. the yen is -- the bank saying get ready for surprises. are we buying the yen prepare for surprises? nymex crude just under $73 a barrel. going hovers above $28,000. let's get to our top stories, bloomberg learned the fdic may lean on big banks to pay the $23 billion hit it faces from recent bank failures. let's bring our reporter nabila ahmed, what do we know about how this will be distributed? >> regulators are looking for the most politically pull out of all -- palatable option to raise this $23 billion. bank failures are not cheap,

since the banks have much to benefit from the crisis because a lot of deposits migrated to them, that is one reason regulators think the big banks, jp morgan and wells fargo's of the world should share a bigger share of the burden. they said they will consider economic conditions, the effects on the industry and other factors it deems appropriate. this fee has not been figured out yet, they are doing that over the next couple of months. it is up to their discretion. for the banks, it can be costly. in 2009, there was a special assessment of $5.5 billion, it costs jp morgan $675 million to its earnings in the second quarter that year. banks will be gearing up for a hit from this one, too. dani: there is also this question of cost in the form of

banks losing deposits because it does not pay enough. this is been a topic of conversation, how many deposits they have lost. in the ecb, schnabel was talking about it saying it was not a problem. take a listen. >> at the moment, there is a lot of uncertainty about what financial turbulence means, for us in the euro area. overall i would say it looks that we have somewhat more a problem then we're seeing in the u.s. at least so far, it looks that, as if our banks were actually quite resilient. dani: nabila, she says european banks when it comes to deposits are stable and compared it to the u.s., how bad is it in the u.s.? >> in the u.s., we have seen the first wave where people move

their deposits from the smaller banks to big banks because they were concerned about the solvency of smaller banks. now we're seeing the second wave where people are moving money out of banks altogether into money market funds. in march, a record amount has flowed out to these funds, some $300 billion, a lot of money. these funds house safe assets, particularly government bonds, that is where the flows have mostly gone to. funds that house u.s. treasuries. the rates they are paying are quite juicy at the moment because rates are at 15-year highs, that's where it is correlated to and you can expect more funds to be flooding into money market funds. dani: thank you very much, nabila ahmed with the latest on u.s. banking. to european banking, swiss leaders encouraged ubs's move to

bring back sergio ermotti as ceo to ensure its smooth integration of the takeover credit suisse. let's bring in our swiss finance reporter on this. why did ready latest push for this? >> historically, swiss bank companies have been encouraged to keep a swiss executive in the chair position or the chief executive position. this is something regulators and government are in favor of. ermotti has a very good reputation in switzerland and internationally. for this complicated transaction acquiring credit suisse and that internationally complicated business, it felt they needed someone who had a screens with ubs, and international experience and was well recognized in switzerland. dani: so ermotti comes back, they help that presser yesterday. what is next for the integration

between credit suisse and ubs? >> sergio ermotti will be focused on what do they want to keep that credit suisse. they talked about the investment bank, they plan to downsize that and reduce risk. you bs does not have that in their business model. they will be assessing what actually get -- executives they keep. ralph hamers, the former ceo, will be sticking around as long as it takes to help close the deal because we can't forget that regulators in countries have to approve this merger. dani: thank you very much, bloomberg's marion haftermeyer in zurich. alibaba will consider gradually giving up control of its main business is after completing a major overhaul to create six new companies that made a view on public markets. peter, the market was very excited yesterday about this

breakup. what did alibaba say, exactly how this will take shape and what the new companies will look like? >> alibaba surprised pretty much everybody earlier this week when they talk about giving more autonomy to the six different units within their empire. today the ceo held a conference call where he explained the strategy and their thinking. and what the strategies for these companies will look like going forward. the key businesses are the e-commerce business, the global one, the cloud business that is significant and the logistics business. he said these companies will gain more autonomy in the future if they proceed with ipo's, it's not a guaranteed, but they are exploring that. if they do proceed with ipo's, alibaba may cede majority control over those businesses. they can hatch new strategies and develop their businesses in ways the parent company would

not be directly involved with. dani: we're not going to have you on this program, i will ask you about ai. everyone is getting excited about how they are adding it on to their strategies, chatgpt and what have you, but musk and some tech leaders issued an open letter on ai. what was in it? >> what they have asked for is a six-month pause in development of training some of these ai models. it is a curious step. just as this frenzy over chatgpt and other ai technologies has crescendoed, you have these guys thing was hit pause. but there are concerns, they voiced concerns about how much control there is over certain ai development,s, who is developing what at what time, they want safety protocol so that companies, governments and organizations have guardrails around what this powerful technology looks like in the

future. dani: i've said it before and will say it again, i for one, welcome our robot overlords if they are listening to this. peter in tokyo, thank you for joining us. king charles is in germany in what will be his first overseas state visit as monarch. the three-day trip signals that europe is still on the high list of u.k. diplomatic priorities. once trading gets underway in europe, we will get spanish inflation. analysts see april's headline figure dropping. 10:00 p.m. we get eu consumer confidence data, that has been strong in germany and the u.s. at 1:00 p.m. in germany, inflation figures, bloomberg intelligence sees headline inflation remaining stable month on month, but core inflation hitting new record highs according to estimates, 5.5% year on year. 1:30, final readings of fourth-quarter gdp out of the

u.s. coming up, the riskiest bank debt is still reeling from the credit suisse wipeout. more on that next. this is bloomberg. ♪ introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

dani: it's a $256 billion market for at1's, still reeling after the wipeout of credit suisse's debt. going through words we have gotten from banks, regulators and politicians, the breakdown

of risky debt still is having ripple effects on this market. will it recover? let's get to tatjana greil castro, cohead of public markets at muzinich & co.. this is not the first time we have said coco's argon, is this market finally done? tatjana: dani, good morning. sadly, the bonds selloff is not over. there is a strong regulatory requirement by banks to issue cocos, it is important to issue then despite the price -- yield increases we have seen. it will still be cheaper than to issue liquidity. that's how we have to see it. there is a regulatory requirement for capital and we have seen it with credit suisse how important it is that if a bank fails, those instruments

were introduced to save the taxpayer. those will still continue to be issued. will investors still want to buy it? yes, one would think so. there have never been when an investor goes in an at1, it will always be based on the probability of default of a bank rather than the loss given default. the loss given default will always be considered zero, but then what is the probability of default? if the probability is considered minute, then those at1 instruments still offer very good value. dani: when it comes to the banking sector as a whole, not just these at1 bonds, you are not ready to give up on the banking sector despite the most recent stress.

where do you want to be in banks right now? is there anything very mispriced where you could scoop up more debt at a more reasonable price? tatjana: there is lots of opportunities in banks. you can go all the way up to covered bonds, senior, at tier 2, there is a call capital structure you can invest in. you don't need to go to the most risky at1's. we have long favored the tier 2's because they are far more remote to be bailed in then the tier 1's. test has proven the case with credit suisse where the t1's were written down. for instance, what we have done of the last six months -- this has nothing to do with the

recent turmoil -- when there was the last in the third quarter the t2's recovered faster than the seniors. going forward, given that the market still has not recovered from the last two weeks of turmoil, and in europe it is generally acknowledged that banks seem better place for the current turmoil, so european banks don't face the same deposit risk. they are also not as exposed to the commercial real estate market as some of the u.s. banks seem to be. there is a completely different risk profile outside of the u.s. given the strong really good look tory -- given the strong regulatory requirements. dani: how worried are you about the commercial real estate story in the u.s.?

it first came with the b rate issue with blackstone and those types of products. now folks are looking at american banks and saying especially regional banks have huge exposure to commercial real estate. are you concerned about the american commercial real estate market, and potentially some of the european markets as well? tatjana: there is a big difference between the u.s. and europe when it comes to real estate. it seems that in the u.s., in some areas, interestingly, earlier you showed to be areas for immigration. also, that means there is a lot of people leaving certain areas. i guess this is new york that has suffered from the move for instance, to florida. and also areas where we see that the tech sector is not so much in favor, northern california.

it has been somewhat in decline. there is too much commercial real estate, specifically office space. that seems to be regional to the u.s. we haven't seen an overbuild of commercial real estate in europe. there are issues with the real estate market with respect to governments, interconnectedness of some of the institutions where arm's-length transactions are a little questionable. those are completely different concerns. we see the real estate sector as something of an acquired taste. you need to look very carefully in what you invest in and which company you are supporting, because there are issues on both sides. but for people who are willing and able to take a closer look there is opportunity. dani: i love that, real estate

is an acquired taste. given that we had a large bout of market turmoil and volatility, in a market that has been fragile for some time, how much has the liquidity profile dissipated? just how difficult are these markets to trade right now? tatjana: that is one of the difficulties we are finding at the moment. often times, on a single-name basis, deutsche would have been an example. when you look at the market data, oftentimes we get data and everybody including you guys at bloomberg are scratching your head, the data is pointing one direction and the market is going the opposite direction. that makes it very speculative, the volatility also means it is harder to trade. the transaction costs are increasing.

and so, that makes everybody more cautious. if you can't rely on your fundamental analysis to position yourself, which the market seems to be much more volatile and oftentimes going in the other direction than fundamentals are pointing you to, essentially that leads you to become more risk-averse. that is one of the issues we're facing at the moment, where we're saying what is the financial market condition? that volatility we're seeing is leading to tighter financial market conditions and less liquidity. dani: it's not necessarily just the banking turmoil in terms of flow of credit that is tightening conditions. do we have a good read at all yet? any indication we can point to that the flow of credit has been tightening? that area, specifically tightening financial conditions? tatjana: i would say there is.

when you look at the high-yield market, both in the u.s. and europe, over the last 12 months, it was only open occasionally. we definitely have seen there is much less risk appetite by capital markets to extend to the weaker part of the credit market. yes, investment grade continues to be open. there may also be times of volatility, especially in the underlying interest rates that makes it difficult for investment grade companies because of the pricing of the underlying rates curve. they need stability in the race market to come confidently. if there is a move of 20 or 30 basis points, it is very difficult for investment grade to come to market. on the high-yield side, the market only has small windows open. to the extent that we see maturities coming up, barely

anything for 2024, but we are already starting to look out to 2025 -- dani: i've had some conversations as of late, that 2025 is when the maturity wobble will hit. i'm afraid we have to wrap things up. tatjana greil castro, cohead of public markets at muzinich & co. later in the program, european and u.s. banks have had a tough month. we're going to talk to an expert on the sector. it is kpw research. this is bloomberg. ♪

dani: let's get to your first word news. christine burke has that in dubai. >> according to the city of london, other financial centers are gaining on it.

new york shares the top spot with london as the world's leading hub, but other centers including frankfurt and paris have boosted their attractiveness at a faster pace. the survey benchmarks the competitiveness of financial centers across 95 metrics. did you ruler -- the ruler of the united arab emirates has elevated his son to be come crown prince of abu dhabi. the sheikh will effectively become second in line in the major oil-exporting nation. taiwan's president tsai ing-wen has arrived in the united states on her way to south america. she will head to guatemala and belize with both recognizing taiwan as an independent nation. u.s. officials have played on the trip despite china's warnings. she plans to meet with house speaker kevin mccarthy on her return trip next week.

global news powered by more than 2700 journalists and analysts in more than 120 countries. in christine burke, this is bloomberg. dani: christine in dubai. you are looking at weakness for equities, china is moving higher but it is off the back of gains that put us in yet another bull market for the tech sector. can that continue? we have had warnings from tatjana greil castro, looking at this bond market, that it liquidity means risk appetite is lower. yen moves higher this morning as the dollar gives back. u.s.

dani: good morning, this is "bloomberg daybreak: europe". i'm dani burger in london, these are the stories that set your agenda. u.s. stock futures and asia stocks are little changed, but not before a wall street rally powers the nasdaq 100 into a bull market for the first time in almost three years. footing the bill, sources tell bloomberg the fdic may force top u.s. lenders to pick up a share of the $23 billion to for recent bank failures. swiss regulators are said to have encouraged ubs to bring back sergio ermotti as ceo to ensure the smooth integration of credit suisse. american equity and for the most part asian stocks continue to power higher, it doesn't make sense that we have had a risk on rally when this market is pricing 70 basis points of cuts from the fed this year. how bad will be economy look in that environment, do you want to

be buying stocks? not a lot of buying this morning, little changed on the s&p and nasdaq futures. european futures going higher .5%, playing catch-up to the 1% rally on wall street yesterday. yet another day of losses for this bond market, two-year yields above 4.1% rate we have had heavy issuances of corporate debt, at the sacrifice of the treasury market. the yen is moving higher, is yield curve control going to be another story yet again? we ignored it in the banking crisis but the deputy governor of the boj spoke earlier saying they will not be pretty warning markets, maybe a different tact than jay powell. nymex grew just below $73 a barrel, holding on to against. -- holding on to gains. bitcoin at $28,500. sources tell bloomberg swiss regulators encouraged ubs's move

to bring back sergio ermatti as ceo. this was in the name of a smooth transition of the bank's recent takeover of credit suisse. let's get to swiss banking reporter marion, what was the thinking for regulators? >> this is a difficult transition for ubs, acquiring a very big bank with a lot of complex issues. the feeling was, they like to have a swiss chairman or ceo driving the changes here. sergio ermotti is a well-respected banker in switzerland who has really good international finance experience and has also done transition work for ubs. you had the chairman telling us at the press conference yesterday that this was one of the most complicated deals in banking since the 2008 financial crisis, potentially more complex than any of the deals that happened then. dani: considering how complex it is, what is next for the

integration between ubs and its former crosstown rival? >> sergio ermotti will be taking the helm on april 5, i suspect he will be going as fast as he can to evaluate what businesses ubs plans to keep, but also the clients and of the talents. let's not forget, a lot of people are worried about their jobs and whether ubs will keep them. there is a lot of duplication between the two banks. there will be a lot of communication hopefully going forward. and also, the investment bank and how they plan to downsize that risk. dani: certainly a lot of questions for folks who work at credit suisse, whether or not they will be keeping their job. bloomberg's marriott helfer meyer, in zurich. as ubs shakes up their ranks, analysts at kbw are shaking up their calls. in a out from earlier this week before the ermotti decision was announced, they said they were

placing their underperformance call with a ubs underperform. they wrote ubs may well have made an incredible deal in the long run, but we see a near-term disruption to the investment days, with disgruntlement from other stakeholders over the deal as likely to continue. let's talk to the man behind the note, that is andrew stimpson, kbw head of european banks research. no one would rather talk to you today. does that view still hold now that ermotti is coming back, does your opinion about that disgruntlement change? andy: there is a lot of work for mr. ermotti to get through. he is the right man for the job. he did a great job at ubs. i think you will make a success of it. it is more about the timing of that, and the long list of things to do that he is got to get to in the near term that we're more concerned about. dani: what is the biggest

execution risk at this moment? andy: we can sit on our spreadsheets all day and talk about the financials. and there's lots of big numbers, lots of big one offs and things to put through the spreadsheets. in the real world, one of the biggest things he has got to do, marian alluded to it, was to fix the perception of this deal in the eyes of the swiss population. but also for the employees. knitting together what were fierce rivals, those two cultures together will be a big challenge. as analysts, but we're interested in the spreadsheets. mr. ermotti from his statement will clearly be looking after clients, employees and then shareholders. dani: andrew, you are at the

right place if you want to talk spreadsheets. the idea of the swiss population getting comfortable with that, in the early days, and that is only two weeks ago when this takeover was announced. the chemicals company in switzerland said we're worried about the concentration of banks. we're worried about the new pricing power that ubs will have in its hands. how can regulators stop that? will this go to the point where even a breakup might be disgust? andy: it has been disgust by the analysts, ubs was very smart, and the chairman seems to have got the issuances at that point be on the cards from the swiss authorities. but it won't be on the cards for the clients. clients will be very wary about if they just add together their

exposure, or reliance on credit suites and ubs. i think they are conscious of that. i'm not saying anything they don't know about. that is going to be drawn the wealth management side and the corporate side. there is lots of parts of the business where clients are going to want to diversify as well. dani: in the aftermath of all of this and the u.s. banking turmoil, american banks have seen a lot of withdrawals. barclays is warning of a second round affect just because of all the attention that higher yields can give you. in europe, the ecb has said european banks are fine, they haven't faced that start of withdrawals. what makes europe different that it wouldn't face that same deposit withdrawal pressure as the u.s.? andy: in europe, we haven't got the same ease with which to switch into money market funds,

a normal product that the general population would think of at the tops of their minds. we're starting to see a shift from overnight deposits into timed deposits. that shift will absolutely continue. 15 years ago or so, it was a lot more normal especially in southern european countries for households to hold government bonds directly. you might start to see that come in as rates get to a certain level. in europe, the absolute level of rates is lower than what it is in the u.s. if you're going to try and sort out your finances on a sunday afternoon, whether you switch from overnight into a timed deposit, at the moment 1.6% is probably not going to make that much difference. so you need to do something else. once rates are much higher. we're probably getting towards that level now. then it is going to be much more worth people's time switching to

timed deposits. dani: what impact will that have on the banking sector if we get more flow from overnight into timed deposits? andy: we will see the cost of funding start to rise at banks. which is normal. central bankers will at some stage welcome that. the corollary though is that banks will start to increase their loan pricing. that's the broader concern for lots of the other stories that are being run, particularly on things like commercial real estate. as those price increases come through on both sides of the balance sheets, for banks and customers, banks will look at margin. the really important part of the broader economy is how quickly that comes through for the borrowers. dani: it is one of the big

questions in trying to figure out this macro environment. do we have any read both in europe and the u.s., just the extent that this recent trauma the banks, the -- run on the banks, the impact that has had on tightening lending standards? andy: the events of the past three weeks, no, it is too early. these things always take time to come through. expect that to be more of a second half effect. nevertheless, just the absolute rise in interest rates has been so rapid, that the loan pricing has been passed on. there is still more to go on the loan side. it has not happened yet. we will get the data from the ecb on friday as to how deposits and loan pricing has changed. but that will only be the february date to a we will have to wait for april or may data,

so we are talking the summer by the time we can actually get in the actual rates data we will be getting from the sinful banks. but we can hear it anecdotally from the banks on their customers already that it is starting. dani: mark your calendar down for that time, we have got to have you back on. andrew stimpson, kbw head of european banks reserves, thanks for joining. the $3 trillion threat to global markets that looms in japan. that's the subject of today's bloomberg big take. we will bring it to you next. this is bloomberg. ♪

dani: outgoing doj governor kuroda change the course of global markets when he unleashed a firehose of japanese cash on the investment world.

now his successor ueda is likely to dismantle that legacy, setting the stage for a low reversal which could send shockwaves. that's the subject of today's big take, the $3 trillion threat to global markets. let's get to one of the authors, senior fx and rates reporter ruth carlsen in singapore. this is such a well reported piece. it comes at a time when a new governor is coming in. talk to me about what you found. why are investors so nervous about this enormous cash pil e? >> absolutely, it comes down to the fear of the unknown. we're talking about 3.4 trillion dollars, that's a whole lot of money invested outside of japan. for years, locals have been absolutely punished for saving money at home because of negative interest rates. since 2016 and the introduction

of bond yield control, these investors have pumped billions of dollars each month into everything from treasuries to senior stock, senior debt and interest rates. all of this risks unraveling. potentially trillions getting sucked out of the financial system, bond yields rising. in reality is, most market participants expect the boj to tighten monetary policy this year because inflation is so high. so there is a lot at stake here. dani: you mentioned some of the investments that might be at stake, but can you get into that more? we showed a graphic of the scope overall this money has been invested. there is a lot, where does the majority of this $3 trillion mountain sit? >> we did a lot of research into

this, and numbercrunching as we discuss earlier. the japanese have invested virtually everywhere. government bonds, stock markets in the netherlands copper bundles of risky lines in the u.s. to power stations in europe. but by far, they are invested big in the u.s. bond market. japanese investors are the single biggest foreign holder of u.s. treasuries. and they also owned about 10% of australian and dutch debt. to percent of the singapore stock market, and those of the u.k. and u.s. dani: maybe another reason to doubt the recent bond market rally in the aftermath of the banking crisis. ruth, really great stuff, i encourage everyone to read her piece, and i big take go is where you want to head on your terminal. let's get to your business flash, with that is christine burke. >> bloomberg has learned that

the federal may ask big lenders to pay extra to cover the cost of recent bank failures. sources say it could be part of the agency's special assessment that will be announced in may. the fdic expect to play close to $23 billion to cover deposits at svb and signature bank. a luxembourg company is in talks to combine with intelsat to create a satellite giant to compete with elon musk's st arlink. they are in advanced negotiations and aim to reach an agreement in the next few weeks. it could valley of the combined business at more than $10 billion including debt. china construction bank posted better than estimated profit increase, net income getting 7.1% from the previous year.

the earnings from one of china's biggest state owned banks comes as lenders boosted financing to christian the economy from a slowdown triggered by strict covid zero policy. dani: christine, thank you very much. rock tech lithium broke ground on a refinery near berlin this week, as the global race to secure the ev supply chain has been heating up. europe currently imports all of its lithium from elsewhere but that is set to change. joining us for more is bloomberg's oliver crook in berlin. we know that demand has been really strong, especially in europe given how big the ev market is. talk to me about the significance of this project to get more lithium out of the ground, how does it fit into industrial strategy? >> you have this dynamic, it is a salient point in germany where the biggest industry is the auto industry.

they are basically banning combustion engines in 2035 and germany does not have everything it needs, it needs to secure the supply chain for ev's. part of that is this, this is rock lithium, what the company is bringing over from canada and refining in europe. by the time it is online in 2025 it will put up lithium hydroxide which is what you need in car batteries, by the time they are at max capacity it is enough for 500,000 cars. they have deals with mercedes for 40% of their annual output but they need 10 facilities. i asked the ceo if europe is doing enough to secure the supply chain. >> this is definitely a risk, but i'm very sure, and also out of a lot of personal meetings, that european politicians are aware of this topic. i see a significant change in the attitude here in europe since this ira program has been

passed. the alarm signs are clearly here, politicians are willing to act. we will see in the coming weeks if they will be able to. dani: oliver, the ceo's answer emphasizes how much concern that has ignited in europe. how far ahead is china at this moment? >> you think about concentration risk, germany had 55% of its gas from russia. 70% of the entire world's lithium is refined by china. those companies have a huge advantage in expertise, they are amassing massive margins. he said europe and the west are years behind. they have not had an industrial raw material policy that is as developed as china but they hope that will change. one of the incentives is governments and companies all need this lithium. as elon musk said a while ago, if you figure out how to refine lithium, you have a license to print money. dani: really interesting story

and interview. oliver crook in berlin. coming up, we look ahead to inflation data that comes out of spain and germany later today. this is bloomberg. ♪

dani: we're looking ahead to euro area inflation data. we will get prints from spain and germany later today. we have a preliminary reading from one of the states in germany, month over month coming in at .6%, last month it was 1%, year on year is 6.9%, cooler than the last reading at eight point 5%, so potentially an indication of what we might get from the whole of germany later. let's bring our reporter in frankfurt on this.

can i talk to you about these preliminary numbers, how does this portend for what we will get from germany later today? >> we're going to see a big drop this month. overall, with inflation, we look at numbers from a year earlier. i year ago was when that big energy jump happened, right after russia invaded ukraine. so now the so-called base affects means that huge increase in energy prices now will be stripped out a year after that, which means that all the headline numbers, all those inflation numbers across the euro area should be dropping significantly. today you've got spain, and we have had a preliminary reading, tomorrow we get france, italy and the number as a whole. all those numbers we're going to see a massive drop in headline inflation. what we're more worried about is

core inflation. it strips out energy and food, and those numbers are likely to actually creep up. there already at a record in most countries and that is worrying policymakers and the ecb. dani: i was going to ask, what is the rush from policymakers as these headline figures are coming down? what does this mean for the hawk slashed of divide-- hawk/dove divide at the ecb? underlying inflation will still be quite sticky. >> both hawks and doves will have the opportunity today to say look at the numbers, they are playing into what we're saying. as a reminder, earlier this month, the ecb hiked by 50 basis points, but for once they held off on saying in the statement what they will do next. the next meeting as a reminder is on may 4, star wars day. this meeting today and there is

another one right before that next meeting. those inflation readings will be key. t doveshe -- the doves can say our mandate is not for core inflation, it is for headline inflation. at the same time, the hawks can say look at this record core reading. dani: i have got to say, a day for monetary policy nerds and star wars nerds. what more could you want in life? -- that's it for bloomberg "daybreak: europe". up is bloomberg markets europe, as this equity market hangs tight after tech enters a new bull market. this is bloomberg. ♪

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