dani: this is bloomberg daybreak: europe. i am dani burger in london.

manus cranny is in dubai with the stories that set your agenda. >> hopeful signs. today's debt ceiling meeting between jill biden and kevin mccarthy is postponed as staff level talks are set to made progress. meanwhile, jamie dimon warns how devastating a default would be. >> actual default, that is potentially catastrophic, and you can go through a million ways, but anyone knows the potential for catastrophic. i don't think it's going to happen. the closer to you get to it, you will have panic. manus: we speak inclusively to janet this morning. plus, study generals asked income trading jumped in the first quarter and we speak exclusively to the ceo and his final set of results after 15 years at the home. we are grappling with debt, disinflation, and default.

rabobank tells me it's a marginal event. good morning. dani: good morning. it was perfect that we have francine lacqua speaking to jamie dimon yesterday and he touched on all those things. he said the u.s. needs to get and inis the banking crisis. yesterday did you see what pacwest did? it felt another 22% and had more deposit outflows, money market funds hit a record. is this banking doom loop not yet over, manis> dani: jamie dimon would say it is the flow show that needs to and, the demolition derby, speaking of which the debt ceiling we will hear from the secretary shortly and the update will be important. jamie dimon has a war room and we know the way that the risk management groups come together and cohesive moments of risk. goldman sachs says the risk is that there is going to be a

brawl as we go into this. we need to ask our guests about whether the dollar is a haven or whether it is a different beast. 11 years later to 2011. dani: we need good news. this is too much on a friday morning before the weekend. the u.s. and chinese officials have met top officials, a new bid to ease strains and we are seeing some reaction in stocks this morning the back of it. let me run you through what equities look like. hong kong and tech stocks on the up today continuing gains from chinese listed american stocks yesterday. on the optimism that perhaps some of the ice is fine. when it comes to american equities, those are heading higher too after heading -- a day of declines. goldman sachs out with a note today saying we still do not expect a recession. the same time, european equities are higher perhaps with a boost from french bank earnings. we will get luxury and richemont

hopefully the sour. perhaps more good news there can help individual stocks. manus: that is what socgen are saying. fixed -- position is too extreme and stocks and lack of confirmation of a recession could mean a dramatic reversal there. there is a short end of the curve which is driven by the disinflation narrative. you saw ppi drop yesterday the lowest since 2021 on the back of the cpi reading that was some 5%. the euro has dropped on the line from the governor that he gave to guy johnson which was about reaching the point where we may be able to rest. we have not got the evidence but we may be able to rest. the bloomberg commodity index has rolled down for a couple of months in a row. if you don't want swiss or yen or dollar have a little bit of gold. we are near record high. dani: let's get to top stories and reporters from around the world. garfield reynolds has latest on

the debt ceiling brawl. stephen engle is live at the g7 meeting in japan and yousef gamal el-din is on the banks of the bosporus ahead of this weekend's turkish elections. manus: let's talk on the president of the united states. joe biden's debt ceiling meeting with kevin mccarthy and other congressional leaders has today been pushed into next week. garfield reynolds is with f2's be what he makes of the smoke signals. is this constructive in review it is just that we are so far apart we have nothing good to say to one another? garfield: it does seem as though there is little bit of an air of constructive work behind the scenes. certainly so far the actual meetings have taken place have not done much to help the situation. a weekend where they can have their staffers meet behind closed doors and perhaps try to find a way towards compromise that might help. the other concern you have to have his markets are not

actually panicking yet about the debt ceiling. there are a lot of people saying they expect that only once the markets panic, that will get the politicians attention sufficiently so that they will -- they will have lynda excuse to compromise. we wanted to stick to our guns but we didn't want to kill the economy in doing so. dani: certainly a lot of discontent out there, the idea that perhaps congress is using markets in such a way. garfield, thank you so much for joining us. bloomberg's garfield reynolds there. let's head over to japan. global economic issues and banking turmoil, debt restructuring, and supply chains have been the focus there at the g7 finance meeting. our asia correspondent stephen engle joins us now on that spirit was a talk then? -- what has the talk then? stephen: there has been a lot of talk. i want to pick up on what garfield said about the debt ceiling impasse in the united states. there is chatter going on here

is in the halls of the g7. finance ministers said perhaps the impasse is overshadowing other big issues that have to be addressed, including financial system stability and the alleged evasion of sanctions by russia by third parties outside of the g7. but again, i did talk to which he is corpsman the oecd secretary-general this morning and he says essentially if the united states own doing in many ways and it should not necessarily play such a big role here at the g7. the big topic today is another d word. the other big d word is diversification of supply chains. it is codewords for less on china for supply chains, even though the g7 nations, european and north american and

japanese have their supply chains so intertwined with china. we are hearing from sources that there are draft proposals at advanced stages right now and the g7 could be coming up with a new program that would have a supply chain program that would essentially tie human rights progress and environmental policies to other nations outside of the g7 to join into this new supply chain framework if they abide by human rights and these environmental benchmarks. that would be a very interesting development coming from the g7 as we transition from the finance ministers and central bank governors meeting that ends tomorrow to next week in hiroshima where the leaders of those g7 nations will be meeting. manus: yeah, and of course janet yellen has already addressed those issues and the potential of those sanctions, and they will be targeted and very much

around the security and technology. stephen, have a great day. it will be a busy day at where you are. that is our chief north asia correspondent even ingle in japan -- stephen engle in japan. janet yellen at 8:45 a.m. london time with annmarie hordern. dani: definitely looking forward to that one. let's head over to turkiye where voters there are going to the polls sunday for the country's general elections. the race is expected to be tight amid growing economic concerns. let's get over to bloomberg's yousef gamal el-din was in istanbul. what should we look out for this weekend? yousef: the tension is very real. i can feel it and here it when i speak to many people here on the ground. over 60 million algebra voters going to hit the stations on sunday. they open at 8:00 a.m. local time and they will shut off at 5:00 in the afternoon. if we don't get a clear

majority, we have a runoff on may 28. the two main contenders. there are three that remain but the two main are erdogan the incumbent who has been in power for over 20 years and known to most people and then the credible threat this time around is kamal kilicdaroglu drawing a dramatic fashion. we saw turkish stocks pop off the back of that by much as a percent. i would not read too much into it but the issues around the economy are very real. we have double-digit inflation. you have lira at a record look -- low. many foreign investors have left. the government does -- is a focus around how it has dealt with the tragic earthquake a couple of months ago where over 50,000 people died. for the market is all going to be about political stability and orthodox monetary policy. according to aberdeen all the

outcomes carry a level of execution risk so it's not necessarily going to be clear in many of the scenarios for what still is the heavyweight emerging-market. $900 billion of limpet economy, guys. manus: it's going to be lynda interesting weekend. it will be interesting to see what the results are monday morning. that is yousef gamal el-din. a little bit of breaking news. anglo gold will go for a primary listing in new york and this is a challenge for the city of london and the exchanges in london and the challenge from paris and new york. anglo gold ashanti coming out with their numbers and also the announcement on seeking a primary listing on the nyse. there you go. we will have the mayor of london next week and we can ask him about that. jp morgan ceo jamie dimon says

regulators should do what ever they need to do to and this banking turmoil. it was an exclusive conversation with renting the clock and he warned the policymakers take away the wrong lessons from this year's upheaval. jamie: the debt ceiling is potentially catastrophic. that is a whole different issue that hopefully won't happen. the banking crisis i still believe will sort its way through an is not like 2008 or 2009. only a couple of people offsides with various things which we knew about. hopefully, it is getting near the tail end of that. francine: if you were janet yellen would you do differently? jamie: we need to finish the bank crisis. we have had certain policy on mergers with the first horizon deal and we need to do more. the fdic, the occ, the federal reserve, whatever they need to do to make it better, they should do before -- and forward-looking. do not be surprised constantly.

some of these things we have known about for quite a while and we have handled three, svb, signature, first republic. the regional banks have been speaking to every day and they are quite strong. they are worried because of the run on deposits but the financial results are good. the financial results will be good next quarter. they are earning money to have a good clientele and very diversified. they are quite strong. francine: they are looking for a comprehensive solution. if you're asking janet yellen to get the job done what does that look like? jamie: there is not a copper a solution. just be prepared for problems. we don't need a company has a solution. francine: what do we need right now? regulators to look at short-sellers and banks? jamie: yes. my folks were telling me that's not the problem, the shorts on. if you analyze stocks and short sales, is not that big of a deal. they may partially be wrong but

because as you know, some people are unscrupulous and use other means to go short. if you look at the detail, the fcc has the enforcement capability look at what people are doing by name in options, derivatives, short sales, and if someone is doing anything wrong, either inclusion or people going short and making a tweet about a bank, they should go after them. and vigorously and they should be punished for the full extent that the law allows. we have no evidence of it but my experience has been don't assume too much. francine: do you think things will change because of this? is a catalyst eco jamie: it will get worse for banks. more rules and requirements. i hope they do it very thoughtfully because we love the community banks, regional banks. we are the biggest banks for those folks but if you overdo certain rules, requirements, relations, some community banks tell me they have more complaints people dan loan officers.

at one point they make it harder for people to do business. there are already rules in place and is the mix of rules. if you change liquidity, maybe not capital. if you add to tea like they do something with deposit insurance. they should sit down and have a very thoughtful conversation about what those things are and what they want the outcome to be. if you look at the present outcome, a lot of people are leaving banks and they should. that should be done with forethought. that should not be done because you put rules and regulations in place and you don't know the consequences. dani: jp morgan seo jamie dimon speaking to francine lacqua in paris. he is the only major banking ceo from the financial crisis who is still at the helm today. let's get you set up for your trading day and look at things we are watching out for. in under an hour we are going to have u.k. industrial production and gdp data. 12:15 p.m. u.k. time to boe q

hill is due to talk about monetary policy and he has come under heat over previous comments. at 1:00 p.m. it is brazil cpi. base effects will slow it over the year. manus: let's follow up on the results from the university of michigan consumer sentiment survey. that will be important for the inflation readings we have had on the data this year at bpm. we will have russia cpi at 5:00 p.m. u.k. time. coming up, the debt divide continues. it is top of the agenda for the u.s. as biden and his top lawmakers postpone the talks for next week for now. but is there hope on the horizon? we discussed. dani: socgen reports a profit jump off the back of strong fixed income trading revenue. the ceo joins us for his final interview before stepping down after 15 years at the helm of the french bank. don't miss that around 6:30 a.m.

london time. this is bloomberg. ♪ wake up, achievers. you're making the most of every hour of your life. except the hours that you're sleeping. so why do we leave so much untapped potential on the table? this is a next level bed, for a next level you. my circadian rhythm is kicking your circadian rhythm's butt! it's not a competition. i know, but i'm still winning! so, it is a competition. of course. save 50% on the sleep number limited edition smart bed. plus, free home delivery when you add an adjustable base. only at sleep number.

>> actual default. that is potentially catastrophic , and you can go through a million ways, but anyone knows that potential of it being catastrophic. i don't think it's going to happen because the closer you get to it, you will have panic. the market will get volatile and may be a stark market will go down. the treasury will have their own problems third it's amazing you already have t-bills trading at 3% or 5%. this is not good. manus: jamie dimon speaking exclusively to us on the fallout , potential fallout of the u.s. default. rupert thompson is a chief economist for kingswood. let's ask him the impossible question.

rupert, what kind of prophetic moment in markets needs to happen to push the republicans and the democrats to actually do a deal and extend the debt ceiling? the morning. -- good morning. rupert: that's an impossible question. we do not know what size of decline in the markets will be needed to achieve that. i think you are right in saying it probably will need a market failure to get the two sides together. does that need a 5% floor or 10% floor in the market? i'm not sure. it is also a combination of equity markets going back but also the reactions in the dollar all around. i think it is bloomberg impossible question but my guess would be 5% floor in the markets and the s&p will get them thinking about it rather more seriously than possibly they would be before. dani: is in the risk here then,

rupert, because every so often, every couple of years we have this debate and eventually something gets solved. eventually we move on. is there degree to which markets are being too complacent, and that means we might not get that selloff and therefore get default? rupert: i think markets are taking some comfort in the fact that we have had four or five debt crisis he the last 10 years or so and informs them the decline in the s&p over the period has been limited to 3% or 4%. but then 2011, we saw a peak trough to decline in the s&p around 17%. some of it was down to external factors like the euro zone debt crisis. markets may be are being complacent from the last three or four episodes of forgetting actually it is more like 2011 in some circumstances and the economy is not in good shape third may be and republicans are

further part than they would be the last debt crisis. i think there is a bit of complacency. manus: politicians have great ability to take us to emotional health and back in terms of -- how and back and what they would do. there are lots of scenarios may be 5% drop in s&p 500 that could wake them up to realize we live in the real world. but with that in mind, do you think if something tough happens , a downgrade, a technical default etc. that that then plays into the monetary policy and reaffirms the market's perception that rate cuts going to be needed in the back half of the year, rupert? rupert: i think you've got to try to justify the market expectations and rate cuts in the second half of the year some way and perhaps that's a good a way as any. markets like everyone else think the debt ceiling will be tail risk and won't serialize. if you don't get something like

this, forget the fed cut rates because maybe that is a catastrophe on the debt ceiling causing the recession. then the fed would not be hunting rates. if the fed is going to be cutting rates and a second have the air, we do need something like this to get them to do it. the market is otherwise optimistic in terms of expecting the fed to cut rates when the fed is still very much saying we are on pause and not thinking about cuts. dani: rupert, i have an opinion piece in the sun up in front of me right now. manus: she loves this. dani: i do, unfortunately. it says monkeys could run the bank of england better than its current bosses. it goes on to say that bailey should be ashamed of itself. the bank is serially incompetent and part of what it points out is just their poor job forecasting. even the latest forecast, they have a range of up 5% down 5% as were the gdp might go.

rupert, it doesn't boe have a credibility problem right now? rupert: the short answer is yes. the sun is being a bit cool, but i have to say i'm not normally in the camp of defending the bank of being impaired at this point, i'm going to do that. the bank of england got it horribly wrong but is not as it other central bankers have got it horribly right. they've also got it pretty wrong in terms of where inflation has been going over the last two years. and indeed, most forecasters. you can blame some on the bank of england of one of the key drivers of what is going to happen in the next year or so is what is going to happen to energy prices. almost no one was expecting gas prices to be down 80% from the highs a year ago. you can blame that on the bank but not all of its. dani: very good perspective. rupert, thank you very much for joining us. rupert thompson, chief economist at kingswood.

handing over the reins, elon musk says he has hired twitter's new ceo. that is up next. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. i am dani burger in london and manus cranny in dubai. might get a new twitter ceo soon. you oman musk -- elon musk tweeting there will be a new ceo who starts in six weeks time. the wall street journal is reporting that that person is glenda carino, nbc universal executive. manus: they have a presentation on monday it is states to say how they are doing. they have issues at comcast as we know with leadership there. what we know about her is she has been at nbc universal since 2011 and built major

partnerships around the whole ecosystem with snapchat, youtube and twitter itself. she was on the podium with him recently with elon her body. her body - buddy. they would know when a child while. she comes from content and relationship dani: the shares are rising more than 1.5% in the post-market trade yesterday, manus. manus: they have been cutting costs and prices of tesla's. great to have them back in the front seat. we are going to talk bridgett is here. she has no clue that i'm here. she has no clue who's in the helmet. are you ready? -i'm ready! alright.

xfinity rewards creates experiences big and small, and once-in-a-lifetime. we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? g what, we have a ton of mulch.

daybreak: europe."

i'm manus cranny in dubai with dani burger in london. dani: hopeful signs today's debt ceiling meeting is postponed as staff level talks are said to make progress year would jamie dimon warns how devastating a default would be. >> actual default. that is potentially catastrophic. you can go through a million ways, and i do not think it will happen because the closer you get to it, you will have panic. dani: we speak exclusively with treasury secretary janet yellen this morning. socgen's -- -- the final set of results after 15 years at the helm. manus, good morning to you. i'm interested if we get a boost

to european stocks as we get positive earnings coming through. dani: -- manus: we are too geared to the downside if the recession does not arrive. the luxury market is doing a buyback, 10 million shares. just opening up the press release here, 10 million shares will be bought back. i see more van cleave. i do not have any van cleave. 10 million shares, 1.7% of the share capital. it is pretty iconic. we are waiting for the rest of the numbers. do you like van cleave? dani: i don't know if i'm allowed to buzz market, but i do like van cleave.

i need to be smart with my money . these numbers are interesting, operating profit beat too. the chinese story is not as robust on a macro scale. we have seen the shares outperform. manus: let's break some of it down. japan penciled in a ramp-up of 44%, and japan comes in at a rise of 56%. that shows you the kind of turnaround. there is the european stock market open but we are talking about the european and u.s. equities. operating profit over 5 billion, that is a big beat. we have some socgen to get through. dani: let's get to that conversation. we had socgen earnings this

morning coming in strong, especially for fixed trading, that outperformed most of its peers, a 16% jump. revenue did fall 18% but that is better than many rivals in europe but worse than wall street's average. let's get to frederic oudea, ceo, societe generale, who is with bloomberg exclusively for this interview after 15 years at the helm of the french bank. so good to have you for the last earnings quarter. for you it is a strong one when it comes to fixed income. that is off of bad news, volatility in the markets. does that continue? frederic: it is a very strong quarter. you are right, it is strong on the rates, but overall we have

good performances, and i think it is difficult to predict the market but we have sound risk management. we are comfortable with the quality of our franchises. manus: good to see you, it has been a long journey together through these earnings. you are one of the longest-serving and you have been through a few cycles. how punchy is this now on the debt ceiling debacle? frederic: it is hard to say. i think we will have a volatile environment. everyone in the u.s. has in mind the potential consequences of a default of the u.s. i hope there will be an agreement at the last minute but there are other parameters which can play, geopolitical risk. overall this adjustment to the brutal increase in interest

rate, so, yes, the situation can remain volatile. that is were a sound risk management is crucial. we are very strong, that is why i'm confident. i am leading to my successor a bank with a sound balance sheet in terms of capital, liquidity, credit. i'm confident about this. dani: tough environment to operate in. you mentioned rate hikes, the ecb did slow down the pace of hikes last week. what are you expecting as the peak? does the brutality of rate hikes continue? frederic: no, i think we have a scenario where you might still have one or two additional increases by 25 basis points, but then we think you will see a progressive slow down on the inflation rate.

effectively, we see the impact of the increase on the interest rate on the credit origination and demand. i'm confident we will see a stabilization going forward. also in the u.s. to a certain extent the central bank started to deflate compared to the existing inflation 12-15 months ago. they have caught up but we see the impact, and we will see the impact on the economy. i think the central banks will be comfortable to stop, and then probably start decreasing progressively their short-term interest rates. manus: we have checked in with cfos, ceos, the deutsche bank cfo, they all gave us a glimpse of the flow show as a result of credit suisse's implosion. what is the most direct,

demonstrable numbers you can give the market today in terms of the consequences for socgen? did you have new money inflows? did you have flows into asset management? is there anything in these embers that will speak to the flow show across borders? frederic: i think we are presenting strong liquidity ratios. our ratio went up from 141% to 171%. there is an increase in deposits compared to last year. we have also, perhaps, to give you a figure, 212 billion euros in cash at the central-bank level. there has been like for other european banks no change at all. a very strong stability of the liquidity situation in european banks. and, of course, very different

from what we see from the small and midsized banks in the u.s. it is a very different picture overall, very strong stability. you see effectively people moving some money to deposits to get a better yield, but nothing compared with the u.s. situation for small and midsized regional banks. dani: that is not over yet when it comes to the u.s. it is this loop of stocks selling off. that is perhaps spooking depositors. are you worried that the worst is not over yet in america, and for the potential spillover effects to the rest of the banking sector across the world? frederic: again, i'm not the best to comment on the u.s. situation. i agree it is probably not over

but to a certain extent if you want to reflect, the situation, the structure of the banking market in europe is very different. as you know, the regulatory framework is also very different . we apply the same rules whatever the size of the banks, which is different from the u.s. we have no hidden losses, no losses, sovereign portfolios. the situation is very different. the situation can remain volatile with turbulence going forward. i do not think there is a spillover expected in the european banking market. manus: i look at your loan loss provision, down nearly 70%. can that endure, or does that say to me there is no risk of recession in europe? how should i read a loan loss

provision dropping 70%? frederic: i would say beyond what you are commending, across-the-board. whatever the geographics. 30 basis points. an enormous buffer we constituted over the last three years. it reflects two things, first households in our markets are not protected by the fixed rate loans. i'm confident there in the situation of the households in the markets. then regarding the corporate sector, it depends on certain sectors that are affected. thanks to the sound risk management and acting fast, the increase of the costs and the

prices may prove even at the margin you will not see a significant increase of the risk. we are guiding to a lower risk expected at the beginning of this year. manus: as you go out the door and hand over, you are saying, the ecb forced me to do it. should we be on a new trajectory of buyouts from socgen? should that be the evolving step from what you just said? frederic: no, we are consistent in our distribution policy. i'm happy also to announce we got the approval of the european central bank for our share buybacks which was announced for 2022 distribution, but we stick to the same policy. we distributed 50% to our shareholders and dividend payment and buyback.

we are making a strong balance sheet with capital ratio. what can be expected is a turbulent environment. dani: 15 years there sitting in paris, and the past few years we have seen the big american giants descend. we sat down with jamie dimon in paris. the jp morgans, bank of americas, growing their paris footprint en masse, does that concern you and other french banking peers when it comes to a markets competition perspective? frederic: we have competition, whether it is in paris or doing global business. we have a global footprint, international footprint. we saw in the last 15 years the large u.s. banks benefiting from a better overall economy. we know that.

in europe it is something much slower. we will see going forward. at some point things will happen. i think the crisis also shows that actually we should not consider that large banks are an issue. small banks can represent to a certain extent a kind of systemic risk. need to apply the same regulation to these small and midsize banks. we can compete. we have a good business model that we are refining, reshaping. we will be a leader in the mobility sector, we are moving to digital banking. i'm confident we can face this competition, but you are right, it exists, and we have to factor that in our strategic reflection.

i'm sure we will do that. we have been based on the u.s. for eight years and have a good understanding of the u.s. markets. manus: we talked recently about bonuses, we were told they would be massive. you go out the door, you will be saying, no massive bonuses? or will you say, what is your piece of advice to him as you leave with a healthy smile on your face? frederic: listen, first, if i may, european bonuses are not comparable with u.s. ones. the european banking culture is different. second, if i had one piece of advice, at the end of the day the biggest capital of the bank might not even be capital ratios are liquidity ratios as such but the confidence level.

the soundness of the culture and the integrity. year after year this has to be felt. i have a weakness to think hopefully i have done a lot on that front to build a very sound culture which has built confidence with our stakeholders. that is what is most important to preserve and protect. manus: we wish you well. who knows where we will see you again. ceos have a thing about coming back. frederic oudea, ceo, societe generale. good sport, friend of the show. we value your time. we wish you well. have a very good morning. frederic: thank you so much. manus: from paris to london to hong kong, first word news. >> the largest bank face billions of dollars in extra fees to replenish the u.s.

government deposit insurance fund. the assessment from fbi c extends from the regulators decisions to ensure all deposits at silicon valley bank and signature bank. they estimate that move because of the deposit insurance fund about $15.8 billion. at least eight senior credit suisse bankers are living the firm for santander. we are told the move reflects how santander is expanding in the u.s. representatives declined to comment. the wall street journal reports linda yaccarino is in talks to become twitter's new ceo. elon musk tweeted he is transitioning, where he will oversee products and system operations. musk says the new ceo is slated to start in about six weeks. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

dani: thank you. coming up, we will go back to turkey to discuss fresh uncertainty for the presidential election this weekend. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe." manus cranny in dubai, dani burger at london hq. we are going to the polls in turkey this weekend. dani: it will be sunday for the general election, and the race is expected to be tight amid growing economic concerns. let's get over to bloomberg's yousef gamal el-din in a stemple. set the scene -- in istanbul. set the scene. yousef: istanbul coming to life

as rush-hour kicks in, people are going to work a couple days before election day on this sunday. the polls open, then they will close and we will find out if there is a clear majority victory or if we will go to a runoff on may 28. we had initially four contenders, they have boiled down to three. we had a dramatic exit from muharrem ince. there is an alleged sex tape, he rejects it and says it is made up, that is not me in there. on the sidelines of that he said, i will no longer run. the questions becomes to his followers and what happens to them. does this consolidate or fracture the chances of kemal kilicdaroglu to be a credible threat to president erdogan? what does that mean for broader

policymaking that come out in an export he it hours? when will we see tangible action to address real issues in a fragile economy with double-digit inflation, and a turkish lira at a record low after record low. manus: just on that, i'm curious as the voters go to the ballot box, they are not used to unorthodox monetary policy. what would be different today? yousef: the turkish economy or turkish monetary policy has been orthodox since 2018. the country has burned through an enormous amount of foreign currency reserves through this micromanagement of the turkish lira. we are talking about $177 billion worth of those reserves according to bloomberg economics. those are the figures made available by the central bank.

you consider what is going on with actual valuations of the lira. analysts say they expect the currency to depreciate further, maybe to 24 or 25. that is according to hsbc and jp morgan. there is implied volatility priced on the terminal. clearly there is a lot tied to the outcome early monday, late sunday. dani: thank you so much, bloomberg's yousef gamal el-din in -- in instanbul. this is bloomberg. ♪

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response to the evidence as it comes in. we will now be shaped by the evidence. we expect inflation to come off,

obviously we want to see that happen. a lot of it is in the numbers.it happened last year with energy prices. we want to see the evidence. guy: what evidence will you be looking for? andrew: we will look at the persistence of inflation, and what i mean by that, we think inflation will come down rapidly this year, but it has to go all the way back down to the target. particularly in the core elements, the more domestic elements. how that works its way through the system. what i would say is the news we have had since we last met, we have been in the more persistent limits. it is the food prices particularly. the more persistent limits our services prices and wage setting

as we thought it would. guy: would it be fair to say you are close to the end of the cycle? andrew: i hope we are. this is the 12th consecutive increase in rates. i will be clear that we will be guided by the evidence as it comes. dani: the bank of england governor, andrew bailey, speaking to guy johnson. great interviews on bloomberg tv. manus: more to come as we roll to the point of time where the u.s. may run out of money and bust through its debt ceiling. we will sit down with u.s. treasury secretary, janet yellen. ♪

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to "bloomberg markets: europe." i'm dani burger live in