tom: good morning. this is bloomberg daybreak: europe.

these are the stories that set your agenda. manus: pacwest, first horizon and western alliance lead another slump in bancshares, unable to shake off concerned about the sector's viability. jobs watch. stocks and futures rise as traders prepared to scrutinize today's payroll reports for signs that the labor market pressures continue to ease. plus, apple shares rise in late trading. iphone sales bounceback. world's most able company boost its dividend and plans a $90 billion buyback. tom, a very good morning to you. you have got a trifecta of issues. the banks are tanking on a regional basis. the debt ceiling could morph into something more real, and the t-bills have a spike. good morning. tom: good morning. pacwest

falling 51%, a record tumble for the regional lender yesterday. analysts telling bloomberg this is less about the fundamentals now and it is pure speculation on this regional banking sector. the problem is how do you draw a line around this? we focus on the earnings. lines coming out from air france, a beat in terms of first revenues, 6.3 3 billion euros versus the estimates of 6.2 one billion euros. the operating loss coming through for air france in the first quarter of 306 million euros, above estimated losses. losses higher than estimates, but overall, revenue coming in marginally above those estimates. free cash flow up 8.4%, 683 million euros. manus: they are talking about a busy summer which is interesting given the cost-of-living rises and the slow down with rates

rising. mortgage rates at 4%. in the release, air france says it is preparing for a busy holiday season and has regained its full strategic autonomy after repaying pandemic state aid. the first quarter loss narrows 344 down from 552 a year earlier and revenues up 42%. tom, the debate is the toxicity of this regional bank contagion versus perhaps some of the corporate results is in it? tom: kbw index on the back of that story. year to date, the index a compiler of regional banks and major lenders down 30% year to date. yesterday another big hit, down almost 4% around the terminal linked to the likes of pacwest. western alliance and first rising. how do regulars respond to this? we will get another -- will we

get another weekend of bail outs or failures of these banks? and asia, a different story. relative optimism coming through as investors in that part of the world a look through the banking crisis in the potential of a pause from the fed and possibly cuts by year end. soccer dollar a boost in that region and that index, the benchmark getting .4%. the financial sector has been one of the outperformer's in asia over the last few days. futures in europe gains of .4%. stateside after losses yesterday, futures pointing up by .4%. manus: it's interesting to reflect on rather -- whether it is rates. jeffrey gundlach says the fed will not raise again and the rates market, there is huge pointing going on out there. let me show you what is going on in the rates market. at the short end, a massive point up there that you will get a rate cut by july.

the short end of the curve are three-month bills, spiking on this regional bank and the gamestop like moment happening in the regional banks is causing the showdown at the very short and. also, the debt ceiling playing into that. it debt ceiling drama could become a real risk. government issue bills yesterday at 584, the highest 2000. t-bills are spiking. threes tends are the most averted since we began gathering data in 1992. whitney houston was number one. i will always love you. that's a note for you, tom. there you go. nymex crude bouncing back. and lost 10% this week. sometimes i make myself laugh. opec's -- opec remains committed to a recovery. gold is just off a two-year high. we are drifting back. it has had the best week since march over the regional bank angst.

tom: there is how to work and a whitney houston reference. that is on the record now. i am running with that. manus: dani will be jealous. tom: she will be. she'll be back next week. valerie tytel is with us for the latest on u.s. banks. jana will be breaking down the ecb's decision. alex webb is standing by with the apple earnings. manus, let's start with the banking space. manus: pacwest, western alliance and first horizon led the concerns. there is anxiety about financial stability. let's bring in valerie tytel in terms of what is happening here. valerie, it has been a brutal week the regional banks. what is the circuit breaker to the banking crisis? valerie: if you asked the market yesterday, they would have told you a fed cut in july is what they needed.

at the worst point in the session yesterday, a 25 basis point fed cut in july was fully priced. others are talking about an fdic full deposit guarantee as a way to backstop this issue. but i would argue the problem has gone way beyond that now. the new regional lenders who are in trouble do not have a high undershirt deposit base. they sit on 75% of insured deposits. it is not about that anymore and has moved on to a profitability issue. the fact that the regional banks business models and lending business model is not very profitable with a 5.25 fed funds rate and money being pulled into money market funds, ultimately that problem will not be fixed until the fed cuts rate and re-inverts the curve. the other worrying thing about this that we could take from the first republic example is that jp morgan did not put in a bid to first republic until the fdic

was there to take on some of that law sharing. without the fdic involved, assets were not attractive enough and i think that is what the market is reading across other regional banks. manus: valerie tytel there on the banking woes in the u.s.. the ecb meanwhile delivering the smallest interest rate increase yet in his battle with persistently strong inflation but insisted the move will not be the last. joining us now is jana randow. how much more is in the pipeline for the ecb? >> it depends a little bit on who you ask, but listening to the president yesterday, she clearly used the plural and make sure everybody understood that there is more than one rate hike still coming. of course, that depends on what is going to happen to the financial system. we have heard there is a lots of travel in the u.s..

traders are taking that on board. they price little more than one hike yet to come. economists are sitting on the fence there. they say one and maybe two. it depends on data coming in over the next couple of weeks. we get new forecast in june and probably we will be a little bit smarter. manus: rate analysis by you and the team. a long day as always. we will catch up later on. jana randow on the ecb. lagarde is not for pausing or turning. with sales of apple's iphone rebounding last quarter helping the world's most able company. that is at a time when everyone else is keen to talk about ai. the ceo tim cook was a little bit cagey on the thing. >> i do think it's very important to be deliberate and thoughtful in how you approach these things. there's a number of issues that

need to be sorted. manus: for more now let's get to bloomberg's quicktake alex webb. good to have you with me. it was all down to these. it was all down to the iphones that saved the day. >> it was. there was growth in iphone sales which have not necessarily been expected. there was also a certain amount of expectation management being handled quite effectively. they had telegraphed an earnings decline a revenue decline i should say that was similar to the --. in december it felt by .5% and analysts suggested it would be that ballpark. earnings only fell 2.5%. there is little bit of a student management there. we did see though apple's iphone sales beat expectations by considerably, and you can see

then how services increasing is helping build stickiness for that court device. tom: what did tim cook have to say about apple and ai then? siri is powered by a ipo that feels dated right now. >> yeah, and he was very pausing when it came to comments about artificial intelligence. all these companies dig up what they're doing with ai even though it is not terribly impressive. saw apple lead the market with the voice assistants when it came out with seery more than a decade ago. since then, it has not really evolved terribly quickly. we have seen reporting in recent weeks about internal problems in the artificial intelligence division and it seems to prioritize vr in the same way that meta-did. it looks as though it will have to catch up a bit. tom: alex webb on those earnings from apple and what we heard about the prospects of ai and

how they are trying to build that into apple products. let's look at the key things markets are watching out for. german factory orders from march. at 11:00 a.m., hsbc's agm is due to kick off in birmingham in the u.k.. it will be closely watched. there is a tussle between the biggest shareholder at hsbc which is ping an pushing to spin off asia operations. then focus shifting to the u.s. for the nonfarm payrolls data, what that says and how it gives us a sense terms of the next steps. will it solidify the view that the pause is baked in? manus: we are looking for 182 down from 236. earnings of 4.2%. we will get to fed speakers st. louis fed president who likes hawkish tilt. james bullard is set to discuss the economic outlook in minneapolis.

the fed governor lisa cook will speak at michigan state university. coming up on the show we will revert back to christine lagarde and her language at the central bank. the job is not done on beating inflation just yet dared we will discuss if europe can divert from the fed and plot its own course right here on bloomberg. ♪

tom: the ecb has delivered it smallest rate increase yet, 25 basis point in the battle with persistently strong inflation. christine lagarde said about was unanimous and the central banks work is not yet done. >> everybody agreed that increasing rate was necessary, that second, we are not pausing. that's very clear. third, we know that we have more ground to cover on the basis of the baseline that we had, which is still guiding us until we have our next production exercise third -- projection exercise. manus: madame lagarde there.

as sir was this a 25 basis point hike out of appeasement to deliver optionality to stretch it out rather than being brutal and doing with be? is it justifiable to have done 25? good morning. esther: in my opinion it is justifiable. we have been recently some strong arguments that favor a more dovish majority in the ecb. actually, i think yesterday's decision was still quite hawkish in the sense. we have seen inflation developing in line with expectations and tightening credit conditions. i think 50 would have been definitely a very hawkish surprise. i think the 25% is a good consensus and gives the ecb flexibility. you tom: have flexibility of 25 basis points. a pushback on the doves calling for a pause with madame lagarde insisting that more is in the pipeline.

the question is what the fed looking like it is indeed pausing, to what extent can that divergence whether the ecb or fed continue? esther: actually, i think this was an interesting point. we just heard this quote from madame lagarde. actually, the fed setting the tone in global monetary policy, and i think what lagarde did yesterday was stressing that ecb will not follow at least for now , but that they are actually intending to diverge from u.s. monetary policy. this is also reflected in the euro. this is why these levels that we currently see are justified. manus: ironically, do you know i just pulled up in front of myself? a euro-dollar chart and gp. we put on 500 basis points in a month. i'm looking at the euro-yen. let's run that one. another 25 basis points is

already priced in. 500 basis points since the start of march. the euro-yen has collapsed for a different story. do you it is fully priced, the ecb? another couple of hikes in their ? esther: i am not sure whether it's maybe even overpriced because we should not forget that there is a strong majority of depth within ecb monetary counsel and these jobs will get stronger and stronger as we go into summer. in particular, as it sticks to the rate pause and other banks might tilt to the dovish side with some of the early starters now conserving rate causes and latin america and buying rate cuts towards the later half of the year. i'm actually not sure whether the ecb will be able to stick to this hawkish speed for a very

long time. yes, lagarde stressed it is for now, but i think in summer, the world will definitely look different also in europe. manus: may be 110 is where we are topping out on euro-dollar. talk to us about the greenback. the bloomberg dollar index down 10% since it peaked in september. to what extent are the cuts to the bond markets pricing and and you are looking at down to 4.2% for the terminal rate but the year end. that is a pricing in these bond markets. to what extent is that priced into the greenback? esther: it's very difficult to determine. we will see this as soon as these short-term risks to the united states, the debt ceiling, the ongoing concerns about u.s. banking sector. as soon as these are solved hopefully, as long as he do not

-- as long as these do not realize and we will see with the rate cuts that they are fully priced in the euro-dollar downside potential, which we actually see but rather to watch the end of the year when these near-term risks are done and when the rate cuts become actually more acute than what they are right now. manus: the consequence of everything that we have spoken about is about global risk recession, debt ceiling recession. i was tracking euro-yen, dollar-yen and starting and. if i look at dollar-yen, you are looking at just under 2% for the week. ubs is talking about 120. we will have a debt ceiling. the consensus view is we are going to go right to the wire on this. then you have rate cuts essentially in the united states of america. are we now into a new trajectory for young? do you think the back half of

2023 is a story again -- of yen strength? esther: exactly. as soon as we are going to higher rate cuts in the united states, the japanese monetary policy which will stick to the ultra-expansionary stance for now -- they have made that clear -- it will look are less unattractive than it has been during this whole rate hike cycle that we have seen throughout the world. as soon as it changes, and we are moving back to easier monetary policy, and particular in the u.s. but also worldwide, the disadvantage of the yen will be less pronounced. manus: thank you so much. esther reichelt at commerzbank. coming up, tom and i will dig into the oil market after the third week in a row and discuss the losing run.

where is the midwife for the oil market? we will speak to rbc. this is bloomberg. ♪

tom: welcome back. let's get the first word news with samuel etienne. samuel: bloomberg has learned that the fdic plans to make big banks pay to repeal -- refill deposit insurance fund leaving smaller lenders exempt. the proposal from the agency which is responsible for ensuring u.s. bank deposits could see lenders with under $10 million in assets making no extra contributions. the fund was depleted by billions of dollars after all spd and signature depositors even uninsured ones were brought into the scheme. ed sheeran has won a closely watched trial over claims he copied keep musical elements

from 1970's songs by marvin gaye. a federal jury in manhattan delivered a verdict, the second time the popstar has successfully defeated claim for copyright infringement. last year, a court in the u.k. found he did not copy from another song to create his hit shape of view. cigarette smoking rates in the u.s. have sunk to the lowest levels since 1965. the latest government figures showed just 11.5% of americans smoked cigarettes last year, beating a target set the u.s. government healthy people 2020 plan. however, about one in five adults report using a tobacco product with e-cigarette use rising to 4.5%. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm samuel etienne, and this is bloomberg. manus? manus: tom, with all the angst in the world, let's say you do break something with the debt

ceiling, what would it do to global growth? have a look at the oil market. three weeks of losses, down 10%, and then back. they hit the button and we are all going to vienna. that only ever happens pretty much when there is a piece of theater that the royal prince wants to deliver. what goes through my mind is what kind of cut might they deliver? maybe they won't, but that's the mood, and it? tom: the surprise cuts did not work ultimately because all of the gains have been wiped out and more. has the selloff in oil been overdone? ed moss from citigroup saying there are now tighter inventories. the selloff was far greater than what market bounces are showing. that is from ed moss at citigroup. others pointing out the fact that china is pulling and a lack of crude in terms of shipments. the travel sector is getting back on its feet even as concerns around the housing

market and manufacturing and exports in china remain. the travel industry is getting back on its feet. people are in their cars and planes in china is sucking in that crude. manus: i like what the ceo at shell had to say. the physical market is tight but i will hand it to helima croft for the quote of the day. opec remains fully committed to trying to midwife a recovery. helima's words. we will catch up with her

[indiscernible] manus: it is bloomberg daybreak:

europe tom: renewed regional, western alliance lead another slump in a c-shares, unable to shake concerns about the sector's viability. jobs watch, stocks and futures rise as they plan to scrutinize the reports as labor pressures continue to ease. apple shares rise as iphone sales bounceback. they boost their dividends and plans a $90 billion buyback. manus: we have adidas, and crook in berlin running in the shoes of the brand. >> there is no bias here, i am not wearing nike or adidas. really, this is going to be a

rough quarter for adidas. no way around it. sales are basically flat. if you dig down into the regions, it gets quite interesting. latin america was the right spot, up 49%. you have to look at china, we are down 9%. if you go to north america, you are down 20% on sales. only down 5% if you exclude yeezy. the ghost of yeezy will continue to haunt adidas. the new ceo is focusing on brands that are doing well, salma and gesell. these are two makers that i'm sure thomas mulier with. nothing from ivy park. manus: i am good with the gucci connection. >> the other issue they have got is the inventory not just with yeezy but all other inventory. still have a huge inventory

problem in the united states where they are trying to move merchandise. they did progress on that, inventory is still a massive problem for adidas. manus: you don't want to hear what he thinks you are wearing under the desk. crocs. tom: they need to rebrand. what is the yeezy element now? to what extent is this continuing to on this brand? >> we can't forget that the enormous figure that the new ceo came out with, $1.3 billion worth of lost revenue from yeezy. for investors and analysts, this is completely written off. if they can withdraw any money from this through either scrubbing of the brand, which apparently is very difficult to do because it is woven into the sneaker. if they could make any money on this, this would be an upside, but that seems unlikely at this

point. you also have arbitration between kanye and adidas. now you have this investor lawsuit that is coming where they are saying that basically they are alleging that adidas was aware of the risk associated with kanye west as early as 2018 from comments he had made, however, this is still in the early stages. when we look into next week to the agm, where german investors will vote against the board that was running the company over this. manus: let's talk a little bit about b.i.. i put it into the chat. we do actually talk to each other on the show. you are talking about this april 28 lawsuit. investors claim they were misled with the risks about this partnership with kanye. if you look at the class action lawsuit, that is a $16 billion class-action lawsuit.

in the event the suit gets dismissed, this could settle for $350. how protracted is this? >> i think we just need to be careful on this. we don't know whether this will materialize if it does, it will take a very long time. the experts we have spoken to who report on the lost side, say that we are in the very early stages. we will see what they get. but, could this be a play to settle with the company one-on-one? that is potentially one of the tactics involved, but it will be a long and drawnout process. manus: a. we will get you to declare what your footwear is later. he is a man of quality shoes, i can tell you that. it is a fashion show with oliver . tom: there is no crocs, let's face it. manus: you want to see the kit

he bought last week? oliver, you can't respond at this juncture. you are always welcome on the show. let's see what is happening across assets. your end of the curve is punched and spiked like a bowl, a cocktail at the very short end because we are worried about the debt ceiling becoming a reality. the 10 year yields implode in the belly of the curve is where all the action is. oil is down 10% on the weekend, and gold has had its best run since march. tom? tom: the gold upside coming through partly as a haven bet amid the banking turmoil. let's show you the kbw, it's down almost 4%. people saying this is not a ",

will if it is not a crisis, what is it? what are the next steps for regulars -- regulators? the financial sector of asia is holding up well. looking through part of this to potentially a cut, at least a pause from the fed. a softer dollar for that region. futures in europe, 0.4%. the markets are not convinced there is much more in the pie for the ecb. futures in the u.s. are pointing to gains of 50 points. manus: picked up on that regional bank crisis. western alliance, first horizon, pac west, all lead the slide in the u.s. regional lenders. we have anxiety of financial stability and the latest upheaval started after a that pac west is asked during strategic options including a sale. joining us now is alfonso peccatiello, the founder and ceo

of macro compass. good to have you with us. each day, we have a more bruising incident in regional banks. the risk as we go into the weekend, another failure and another domino to fall. what is it, in your view, that will draw a line over this toxicity? good morning. alfonso: good morning. to me, it is the fbi see getting their act together, which means they need to come up with something pretty big pretty soon. that means trying to ensure depositors that effectively anything above $250,000 is going to be guaranteed. it will not be easy. we are talking about effectively changing the law, and it needs to be done together with the treasury. it is probably the only thing in short-term that can stop the bleeding. even then, i think investors are realizing that this cycle, for banks, especially for the weakest links, if you half to

top the discount window, you are basically borrowing at 5%. your borrowing at 5% and have an inverted yield curve in front of you and credit quality because it is getting worse, not a great environment to be a bank. tom: is this about fundamentals? or is it a speculative squeeze? alfonso: a bit of both. if you look at net interest margins, the difference basically where you fund your business and bank and generate returns by not taking excessive risks, at this point of the cycle, future net interest margins for banks that can attract cheap deposits, it is looking pretty bad. also fundamental. there is definitely a speculative frenzy going in. once you're able to zero the equity of a couple banks and know where the weak links might be, the market has the resistance to go after the next week link. manus: everybody is telling us

that -- let's pivot to homegrown. another rate hike from the ecb. do we have any angst in europe in regards to the banks? we caught up with the cfo of deutsche bank, they didn't really lose that much. what is the risk in european banking landscape? just materially different to the u.s.. alfonso: it is really different. easy to say in europe, don't lose deposits. we would lose deposit to what, exactly? we are not a money market fund industry in europe. try to buy short goldman bonds, it is really, located in europe, and also, what bonds? the aaa bond market is pretty small. overall, it is really a different set up. 3.8 bonds are really small market in europe. you lose deposits and you go exactly where? even that helps on the margin of

the european banking system to be more resilient map but it is really regulation. it is the fact that the banks in europe are stress tested for interest rate risks. and they have done better homework i think, especially compared to weak u.s. banks when it comes to interest rate risks. tom: what about credit crunch and credit risks? 2025 now on the benchmark for the ecb, then maybe we get a pause, what does that do to credit conditions? we know they are already tight. alfonso: heels it, i would say. credit is already tight, we have seen the ecb rate -- ecb being very vocal. basically the same levels as heading into the great financial crisis in europe but that is quite the statement from the ecb bank lending survey. wherever you look, you are seeing credit deteriorating. it is really simple. take europe, high-yield borrowers in europe used to get

funds for five to seven years at around 3% yields. 3% borrowing rates. you go have a look at where these companies have to borrow today, you are looking north of 7%. there is not going to be demand to rollover your debt very aggressively if you half to double up your interest-rate cost. the demand for loans comes down because mortgage rates are too high, corporate borrowing rates are too high. and banks are not very happy to supply with credit, because fundamentals are deteriorating. you are in the midst of the typical late cycle credit deterioration which can easily turn into a credit crunch. the ecb hiking more and the fed keeping rates at 5%, plus the banking turmoil can exacerbate the problem even further. manus: you write the macro compass. you are looking at a landscape -- i was in frankfurt last week in frankfurt last week and the

ecb team were behind me. and janet came around, and i said, we are setting up for a trichet moment. he said, stop honking back. everybody thought it was just a doom laden person from the middle east. what is the risk of substantial significant policy error? i lawyers. alfonso: i really like the last statement manus. i think it is pretty high. yesterday, lagarde made sure to correct her financial beginning of the conference by saying this is not a pause, we do not intend to cause and there is a lot of ground to cover. that means in ecb jargon, i would say another couple of 25 basis point hikes, that means the rate in europe is supposed to be around 4%.

the last time the ecb was hiking while the fed stopped or was cutting was in summer of 2011 and summer 2008. i don't think i need to remind people of what happened later in 2008 and 2012. there is nothing different in this cycle. europe, japan, the u.k., because of the structure of the labor markets and the way that fiscal policy is, have micro-cycles that are lacking behind the u.s.. there is nothing special about the european micro cycle, it just lags behind the u.s.. by hiking further, you are basically setting yourself up for failure and policy mistake. tom: there lie the risks. alfonso peccatiello, thank you. coming up, air france prepares for a busy summer as bookings bounceback. the first quarter earnings for

these airlines next. this is bloomberg. ♪

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5-hour energy...charge it up! led napoli to it's only manus: are you brand loyalty british airways? it has shifted to a profit in the first quarter and they have raised their first year guidance. first quarter adjusted operating profit, $9 million. adjusted to a loss last year. on an operating profit higher than the top end of the range. a magnificent new advert in piccadilly where the kid walks across the screen and looks up. they expected to grow 97% of 2019 levels. that is important. this is good news all the way around. icon up with tim clark. there busiest route is london,

dubai. three people are bidding for every business class seat that he had at the front of the cabin. tom: the demand at the pointy end. there you go. and the double impact for i i g. summer demand and lower fuel costs. let's stay on the airline space. air france saying it is expecting strong summer sales after reporting a surge in first-quarter revenue that slightly beat estimates. the net loss also narrowed from a year earlier thanks to a recovery in post endemic air travel. let's bring in our friend from paris. what jumps out to you from these earnings from air france? albertina: tone remains very upbeat. we see revenge flying because in europe, we are talking about a

massive cost-of-living crisis that is certainly having an impact on many industries, worries over a possible u.s. recession, the message we are getting from the company. we have been talking to ceo later in the day and get a bit of nuance. is -- as the demand for air travel remains high. as long as people have jobs and they can fly, they will fly. a lot of optimism, strong bookings for the summer, and one note in particular, last month they exited state eight. there is one important sentence. these ceo has a full strategic autonomy once again, which probably means back on the m&a crowell. this is important because we know that air france is interested in ta p, the portuguese airline that will probably come up for sale from the government this summer. we spoke to a source yesterday who said they are free, we are free, but it takes two to tango.

there will be a former process and we will see how that goes. they are interested in m&a and that is one side to what we will be seeing later on. manus: we are seeing a combination here, but more cooperation to be had in terms of the capacity. what are air france's expectations for asia and china? this came up with the conversation with tim at emirates. what have they said? albertina: china is coming back progressively. air france, as of may 3, will have routine flights. connections with china, mainland china. there is a bit of a controversy here in france just because the

hotel industry is suffering from a lack of chinese tourists. air france is ramping up, but there is a certain awareness that there is no level playing field right now with chinese airlines, because chinese airlines continue over flying russia and european and u.s. airlines can no longer do that following russia's invasion of ukraine. pressive ramp-up. in any case, the message we are getting is that chinese tourists are really looking for flights back, so it is not a lack of demand. for now, it remains a lack of capacity. we will have to see how the share opens in paris, because they slightly trimmed back the full year capacity forecast from 95% to 100%, now they are forecasting around 95% capacity for 2023 versus 2019. we will have to see how the share price react.

manus: thank you for joining us. business flash this friday, let's get to sam. samuel: overall sales at apple were close to 95 billion dollars, suggesting the tech giant is beginning to recover from an industrywide slump. ceo tim cook singled out india in an earnings call, underscoring its potential to become both a major market and production base. bloomberg learned that microsoft is working with amd on a chipmakers expansion into processes for artificial intelligence. they are teaming up to offer an alternative to nvidia. the move reflects microsoft deepening involvement in the industry with chip investment, totaling $2 million so far. the blockbuster results from the

quarry commodity trading business has helped offset the downturn in dealmaking and delivered the bank a 10% jump in annual profit. net income rose to almost 5.2 billion australian dollars, which is topping the forecast from analysts. i'm skiing coming up, a historic saturday in the u.k.. it is coronation weekend for the first time in 70 years. this is bloomberg. ♪

tom: king charles the third is set to be crowned in london tomorrow. joining us is lizzy burden. can we expect? lizzy: hope you have put your champagne in the fridge, because we have a big holiday weekend

here to celebrate in the u.k.. the first time for many of us that we will witness such a symbolic event of this nature here. king charles is the oldest british monarch ever to be crowned. we are expecting a procession from buckingham palace to westminster abbey. he will travel in a six horse-drawn carriage, a gold crown will be placed upon his head. it will be a slimmed-down version of his late mother's coronation back in 1953. it will take about half the time, a quarter of the guest. you might treat a few things into that. you could see it as a representation of britain's diminished place in the world. joe biden is not attending, he is sending his wife jill, instead. he emphasized that is not a snub. the other thing you could. into it is this is the king being sensitive to the backdrop in the u.k..

we are still in a cost-of-living crisis. the other thing you might reach into it is a statement of how king charles wants to run his monarchy, he wants to have fewer senior -- manus: we will have to keep an eye on that from a beach near you from dubai. we didn't get to the local elections, but we leave you with that image. the team in dubai will be on a beach near you and craig will be pledging the allegiance. tom: bloomberg markets europe is up next. this is bloomberg. ♪

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anna: good morning. welcome to om