>> good morning. this is "bloomberg daybreak: europe". i am managed by. export concern. tiny shipments drop in the forecast -- chinese shipments drop in the forecast, crypto is weakening. coinbase accused of running an illegal exchange one day after suing binance. coinbase ceo said he is proud to represent them in court. gathering in a conference in berlin. we are live with some of the high-profile interviews. dani burger is on tour. fomo, fear of missing out. that is what is driving buying. you can relieve your inner fomo.

let's take a look at markets. china data disappointing in terms of exports. they are down. that has had a certain amount of cap in the risk this morning. u.s. equity futures, flat the moment. bank of america warned that the eagerness to buy the dip never went away. there is an exodus in the stock of the retail investor. that could be a contrarian indicator. exports dropped by seven points -- 7.5% in china. not as bad as expected but it did put a cap in risk and raises more questions around what kind of similar's you can expect. that is the equity market story. is it time to double down and go long? anon non-recession recession is what you will get. let's have a look at some of the

markets. let's have a look at the cross asset board at what is going on. the lira is hitting a new record low. oil is giving back all of its gains. let's check the oil price along with the lira in just a moment. ok. we will come back to those prices in just a moment. that's part those thoughts. the lira is set alone. the oil market is under pressure despite the one billion a dural -- one billion a barrel a day in saudi arabia. let's get news from our reporters around the world. we have jeremy. we will talk crypto. and we have the kingdom's big golf deal.

the world's second-largest economy is at risk as global demand weekends. bloomberg's economic editor james is with us. these experts are not disappointing, it adds to the global manufacturing slowdown narrative. the imports -- how do square the circle? >> the first thing i think you have to remember is may of last year was the capacity. it was a good year for chinese exports because shanghai had just reopened from lockdown. there was a huge spike. as compared to this year. we are looking at worse than the export slowdown you are seeing. i think what you're really seeing is across-the-board weakness. it is double digit declines in exports in the u.s., china, the eu, japan, south korea, taiwan. the biggest price cut was in

hong kong. you can argue if that is foreign trade or not. it does show this global weakness story that you mentioned. it also indicates there's not going to be much help for the chinese economy which is struggling from global demand. whatever will help the chinese economy this year probably has to come from more external drivers. you are seeing the week export economy. yes it was not as bad. we have seen falling important numbers for months now. iron ore, cole. lng. also, you seeing big slides in imports from south korea, taiwan. this indicating the global slowdown. so my conductors, manufacturing products like screens. the imports from both of those

countries fell by more than 20%. that is not a good indicator of your exports. most of those things will be assembled into computers, phones, other things. if that is falling 20% plus now, in time you will see weaker exports. all in all, this is a bad sign for the chinese export economy and indicate that the global demand is not strong period -- not strong. manus: ok, i guess i will pack up and go away now. get me a psychiatrist. that is a fairly battered, bruised, benevolent outlook. try to give me something. i need to retire one day. the chinese are asking their banks to cut deposit rates to boost growth. is that really the kind of stimulus that this economy needs and it will lift it from its

malaise? >> i think it depends on how you interpret this. one of the ways you can look at it is that it is a precursor to a cut in interest rates. by cutting deposit rates, the central bank is allowing spreads to widen for the bank profits. it will allow them to cut policy rates without cutting into the banks profits. that is the scenario which a lot of people are saying, it is setting up the financial sector to deal with the effects of a rate cut going forward. this may very well help the domestic economy. a lot of people have come out saying that the rate cut is the precursor to the interest rate cut. i am looking at the rate cut next week. if that is the case, you may as well see a change.

manus: i suppose we need to adjust what is good, solid growth. thank you very much. let's see what the policy response is next week. your securities exchange commission is suing coinbase. they accuse the crypto exchange of breaking roles, allowing users to exchange tokens, unregistered securities. our finance reporter joins us now. tell us more on what the fcc alleges and how coinbase reacted. fcc is saying they are offering securities. shirley the fcc -- surely, the fcc that. we're are down to what a security is between a commodity, security and crypto. >> exactly.

that is the controversy. what the fcc is enforcing. there is a lot of controversy around that. what it is registering to do and how it has allowed so far. coinbase is a listed entity in the u.s.. we have seen them speaking about crypto tokens to be unregistered securities. we have to realize that that is a stance that they have been sticking to for several months since the collapse happened. this is an action that is strong. it comes after binance. we have to understand that the impact is wide-ranging. it is not just in the u.s., it is around the world. crypto tokens, crypto currencies are seeing a lot of commodities dry up.

allegations are likely to be considered a serious concern for the success of crypto exchange us. especially light coinbase. a lot of the business revenues are from the u.s.. manus: it looks like brian johnson is ready to go all the way supreme court over this. he is taking it on. stock is down 12. thank you for joining us. the pga tour, an agreement of a shock merger the ends to your battle. the upstart slashed millions of dollars to lower players away from the pga. our reporter matthew. can you imagine rory mcelroy, woods, and others, what they may be feeling this morning? this is an, the merger is done.

the pga is suddenly changing course. why? what are the stakes? good morning. >> yes, as you say. good morning, a total change from the pga just going back a few weeks ago. why are they changing? pga will say they are doing it for the good of golf, they want to promote the sport. the reason behind this is that there has been a horrendous legal dispute going on between the two. the pga has accused them of trying to steal players. they are accusing the pga of being anti-competitive. they were trying to drag people in to testify. this is author and to become an ugly and expensive legal dispute that could run on and on. this merger managed to set all of that and draw a line under it. it allows both sides to come together and move on.

manus: it got you out of bed earlier. that takes a big deal. it is good to see you. well done to everybody on these stories, try to put it together. let me just ask you, matthew. in terms of the pga, how much will they be investing in the future. they spent hundreds of billions of dollars to get nicholson and a number of others on board. is this millions and billions? >> absolutely. they pre-billy see -- they previously said there was a budget of around $2 billion. now all of the liv assets will go into emerged company. while it will be a minority holder, it will continue to have

first refusal investing in new projects that the company will do. we will continue to see them investing millions of dollars more into this new kind just this new company. somewhat of a passion project for the governor. manus: yes. we close this deal on the golf course. matthew martin, long night and a long day for the team. coming up, we are live in berlin. my cohost is charging the super return. what is in store? dani: we are two ships passing in the night. you are in the studio, i am in the field. i'm at the world's biggest capital conference. is this an inflection point? we will have plenty of conversations.

coming up next, rebecca gibson of oakley. this is bloomberg. ♪ how can you sleep on such a firm setting? gab, mine is almost the same as yours. almost... just another word for not as good as mine. the queen sleep number c2 smart bed is now only $899 save $200. plus, 48-month financing on all beds. shop now only at sleep number.

dani: welcome back to "bloomberg daybreak: europe". i am dani burger, live in berlin at the world's biggest financial conference. a line on the report from mckenzie saying the music did not stop but someone turned it way down. let's talk about the industry. joining me is rebecca gibson, a partner at oakley capital. what do you make of that, the music is turned way down? what do you see, is the music still turned way down? rebecca: in 2022, one chilling

dollars of dealmaking. that -- $1 trillion of dealmaking. beginning of 20 has not seen any recovery. the question is is there a readjustment are we settling in for the long term? dani: are there any hints? rebecca: this time last year there was still an environment of low interest rates. now their interest rates in europe of almost 5%. that is a big impact. the cost of capital within private equity deals. dani: kenda -- can the industry come back? as long as the -- continues to hike? rebecca: we have seen very good returns. i think we have seen a bit of inflection. we are adjusting to the new inflection environment. what you're seeing is that environments trying to capture some of the market sharing. dani: as a private equity

investor, the very nature is micro. this is a moment where you have had to care about the macro. how are you thinking about ecb hikes? i will point when they continue to hike because it actually become a problem? when deal flow actually stops? rebecca: funds driven by high levels of leverage. a lot of deals will do it. for us, it is not as big of a driver. a lot of others are more impacted by the levels of debt and the cost of debt. i think you will see those funds with a clear deviation, able to source -- particularly when it is hard to do platform deals. continuing to put capital to work, creating capital. dani: for those who may be do

not have that platform, will there be consolidation? rebecca: it is a difficult level for consolidation. i think there are certainly transitions where that might be possible. ultimately, it will be looking at the strategy. dani: you do a lot of tech deals. however -- how have valuations aired there, they are much more sensitive to interest rates? rebecca: it has largely recovered. you have seen a 30% growth since last year. ultimately there very early in development. we will not pay high multiples like some other players. a lot of ours are creating platforms to sell off those bigger funds. we have been less impacted by the selloff. the market has been pretty stable. dani: we cannot talk tech without ai. it is funny because you said, we

were already using it for another world has woken up to it. i have missed the hardware on this. what is next for ai? what becomes the next attractive thing? rebecca: everyone is looking at their portfolio. where there might be opportunities, or there might be struggles. one of the largest online education players, they have been using online and ai to help students to the -- through the journey. that is a great way to build the business. it is very helpful to educate other businesses about the opportunities. dani: how are you yourself using ai? rebecca: we have been building analytic -- analytics. how can we use ai to find the great oakley deal. how can we improve our investment process? dani: do think some people are worried that they might not have

a job, that ai might replace them? it is threatening. rebecca: it does but it also helps you think about where you can be, most value added. a lot is thinking about relationships. that will not be taken away by any machine learning in the short term. it does give us more resources to do that face-to-face regeneration. dani: what is your fear if we do not see a pickup in this industry in this year? how much longer can you have a standstill for it becomes a problem? rebecca: we are still looking at elevated levels post-covid. i am questioning whether it is rebalancing. there is still $3 trillion available in the industry. it is still increasing. capital, -- funds. i have no doubt that the industry will continue to develop and evolve.

dani: to that point, really big platforms, they are moving into different industries, they are bringing on insurers, and the case of apollo. what does it mean to have these now giant to duchenne's that you compete with? -- giants that you compete with? rebecca: we have to be thinking about 6-12, maybe longer months. we are thinking about the sectors that we specialize in but those that me become attractive targets for those larger funds. dani: 2.5 billion euros, it was a record raise, how are you going about deploying that? rebecca: thoughtfully. we have the luxury of being able to buy on our time. one of the benefit is with our longer-term investors. we can continue to look at subsector themes and wait for the right time.

we have already put -- euros of capital. that has been a big drive in the sector. the balance between distributions as well as fundraising. increasing that is a big challenge for them. dani: is great to have you for the first interview of the date when is a little bit calm here. thank you. that is rebecca gibson of oakley. it is comforting to know it is not just coming for our jobs, ai is all across the industry. manus: it is. it will disrupt everything. great conversation. it is interesting how micro gets blown out of the rates. fed at 5%. go and have a read of the apollo story this morning. it is about the non recession recession. dani: we have apollo coming on

later. manus: can you ask him to define with the ceo means about a recession being a non-recession? it is it about the nones and the unknown nones? one set no one really got to the bottom of. enjoy your day. bringing you news on the outlook for this year and beyond. coming up, we talk about massive damage and catastrophe. in the ukraine. that is next. this is bloomberg. ♪

manus: president biden has

vowed to continue u.s. support of ukraine after a major dam flooded threatening supplies of drinking water and electricity. the kremlin has denied responsibility. joining me now for more on the story is our reporter on the ground. she is in key -- kyiv. we are looking at images of destruction of the dam. how will we discern how this actually came to pass? >> here in ukraine people are saying it is rush up behind the attack. ukraine is preparing for the counter attack. what we saw yesterday makes it much harder for ukrainian troops to fight.

that part of ukraine has been under russian occupation for more than a year. secondly, they are dealing with huge environmental catastrophe. it could be heartbreaking. you probably saw all of those villages flooded. there are also technical aspects of this. ukraine says that the dam was built in the middle of the 1950's when the soviet union was -- -- manus: and this is ready to go online. any questions? -yeah, i got one. how about the best network imaginable? let's invent that. that's what we do here. quick survey. who wants the internet to work, pretty much everywhere. and it needs to smooth, like super, super, super, super smooth. hey, should you be drinking that? -it's decaf. because we're busy women.

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manus: good morning. this is "bloomberg daybreak: europe." i am manus in dubai. export concern. chinese shipments drop more than the forecast in may, adding to evidence that global growth is weakening. fcc accuses coinbase of running an illegal exchange. the day after suing binance. the coinbase ceo says he is proud to represent the industry in court. plus, the world's biggest capital funds gather together at a conference in berlin. dani burger is on the ground pursuing the interviews that matter. good morning. do you have foam a -- fomo? equities this morning are struggling with exports dropping in china. apollo describing a recession which is a nonrecession. this is where we are on the equity board.

equities are flat. experts dropped by 7.5%. imports rise but it is not a good story about the near economic zone to china. we have risen by close to 20% since a close in october. you can rent but do not by the prospect that the fed is done. this is what bank of america is saying. it is too early to say the fed is done. chinese equities are shrugging their shoulders this morning. we have equities being sold five private companies for the 10th consecutive week. is that a contract given -- is that a contrarian indicator? looking at the bond market, it is a little more attuned to what pimco has said. they have not seen returns like this in 14 years. you will see capital uplift plus a year punch.

brent oil is down. they are testing the $1 billion a day. stockpiles are rising. demand will drop. it will be 50% of what it was last year. 1% growth in 2023. citibank sang, the cuts that you got from saudi arabia are likely to push back to the 1980's and 1990's. -- back to the 80's and 90's. that is what they would need to see before they could put those back on the market. forecasts are literally wishful thinking of accelerating growth and demand by the end of the year. coinbase is down 12%. it tanked yesterday. they are being sued for alleged violations. we are going to the help on this. let's get back to berlin. my cohost, dani burger is at the

conference where a fragile economic backdrop is in focus. dani: good morning. it is all about not big dating the environment. thank you so much for joining. this is very interesting. in this downturn. have they been able to deliver an alpha? have they been able to deliver value right now? helen steers of pantheon. helen: great question. there is a lot going on in the macro environment. this is how private equity can really shine. the best are very nimble, very

adept at seeking out those opportunities. i think there will be some great deals in this environment. we are focusing on the very best private equity managers and those who navigated this environment before. dani: is it about size? who survives, who finds those opportunities? helen: it is about expertise. sector expertise is important but also operational expertise. to get in there and work with them to add value. dani: the industry as a whole, do you think they do a good job of that or are there a lot they do not do a good job? helen: the thing about private equity is the spread of returns. there has been a lot of evolution in the past years. there is some level of operational expertise but the

very best managers are the ones that can outperform in this environment. if you look at statistics, the top quarter outperformed by about 800 and four basis points. in bear markets, typical environments, they are by about 1900 basis points. dani: big difference depending on what the environment is. back to your own investments, what about allocating to your own funds? helen: it is important to us. we don't directly invest independently with our partners. we are applying a sort of double quarter. we selected the manager, that is important, and then we select the deals. that is incredibly important. dani: are you demanding more of

the fund that you invested in this environment. that is a different one. we are seeing people get picky. what kinds of conversations are you having? helen: we are demanding a lot more. both in due diligence, portfolios. a lot of managers are sitting there with a lot of capital. we have to dig into those portfolios and really see what the prospects are. with regard to the direct. we have to be really careful. our approval rate has come down over the last few months. is around 12, -- 12%, 13%. these deals really company managers. dani: the other business or part of your platform, people selling stakes and what they own. there are some selling bench --

venture capital. pension plan also looking at selling secondaries. because this is more liquid, how we seen a bigger evaluation come down? -- bigger evaluation -- valuation come down? helen: people tap into the secondary market quite bigger now. quite a lot of supply on these deals. some capital has been directed to be split -- big portfolio deals. we like to pick out the funds we really like.

dani: how difficult is that? helen: with secondary, there is a lot of flow. we have the luxury of being able to be picky on the secondary side. dani: the industry as a whole has slowed down but it's not like there has been massive pain. what kind of macro environment you worry about you could actually see pain in this industry? helen: if i had a crystal ball, i would like to know what is going on in company earnings. we are seeing managers navigate a different environment. inflation, interest rates. i think you also have selection of deals. it is important to focus on companies that have pricing power. they can sell pricing power to those businesses. investing in businesses with products and services that are

critical. that is incredibly important. we need to see recurring revenues. resilience, defensiveness, that is important. dani: this this industry coalesce with those? is this a turning point in equity? helen: i don't think it is a turning point. i've seen many cycles in private equity. i've seen these shifts and cycles before. what happens in this part of the market is that the really best managers are able to find those really great deals and put a value to them, really put them in the portfolio. this industry has to be able to show the value that it can bring to those companies. how it really propels growth, strengthens those businesses. dani: that is the perfect note to end on. thank you for joining. that is helen steers of pantheon .

more dispersion in the industry. just surrounding the real winners now. manus: as she said, to have a crystal ball, i think equity investors as well are going to be really twitching in that respect. great job. i know you have more to come from the conference in berlin. dani will be joined later in the day by the apollo management, speaking to her in just under an hour. then, the cohead of carlyle group is her guest at 8:30 london time. stay tuned for that. breaking news from ups overnight is that they will have a little bit of breathing room. what do we mean by that? that is from the regulator allowing for three years before the higher capital requirements

will kick in. we note that is the priority. they will de-risk the bank. that process in terms of de-risk , probably a higher capital requirement but it will get through 2026. assets, toxic and good period they will be in the swiss government. it will have a say in terms of oversight committee that gives representation on the sale of some of these assets retained within the new vehicle. the chairman described it as a huge amount of risk to ubs. there is a backstop. the government, regulator and

ubs are talking about the guarantees. initially $14 billion. if there is any more they will require a separate asis in terms of parliamentary -- basis in terms of parliamentary approval. coming up, we are live in germany. they are quite literally running out of workers. we discussed the story on burke. live to berlin with our german correspondent. ♪

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let's bring in our german correspondent oliver. good to see you again. 24 hours, we spent days at opec. it is getting cheaper but they have a labor problem. what is it, more germans retiring to the beaches of greece? >> that is at. when you think of the scale, it is mammoth. a lot of short-term problems but this is a long-term slow burning problem that does not have an easy solution a labor force of 47 million people. we are losing over 300,000 every single year because there are fewer people -- more people retiring than joining the workforce. the growth that you see here, germany outperforming france has been built on having a robust labor market. we are losing workers, they have to pay for pensions. could be 7 million people short

by 2035. how do you solve such a vast problem and what is the actual consequence of that? this puts an effective speed limit on gdp and growth of about 1% that you cannot exceed while you solve this problem. manus: doesn't this bring us back to a political hot potato? we saw angela merkel open the borders and accept refugees. there was a lot of political angst over that in the united kingdom. the question is, what is the solution that is politically palatable in germany? >> is what schulz is trying to find. he is trying to take a hard line on illegal immigration while bringing in 400,000 skilled workers a year. that only keeps the label market flat, forget about growth. that is what he's trying to push forward. this is exactly the problem that

angela merkel had to deal with. what a nation is feeling itself get poorer or stagnating, the natural impulse is not always bring in immigrants to solve the problem. one of the consequences in 2015 was the rise in an alternative party. they are currently enjoying the highest polling. in some polls there out polling the spd, the entire ruling commission. it really shows the skill of the problem and how politically challenging it is to solve. manus: you technically are an immigrant, our man in berlin. you have been doing some social studies in terms of integrating in german society -- [laughs] -- are there many people immigrating into germany? you are kind of the definition. >> you do meet a lot of people

in berlin. we also know that berlin has been a thriving part of the tax seen. it has been an attractive place or a lot of people to start. in large part because of the low cost of housing and living. that has changed in recent months and years. we see the text -- tech sector -- it is not like where russian gas taps and we are having to find a solution. the solutions are not always obvious and not always palatable. manus: nice analogy. we will get you on again. we want you to talk about some of those challenges and the personal challenges you have faced. i will not reveal those on air. [laughter] enjoy yourself in berlin. oliver cook, getting a well-earned break. coming up, her first trip to the white house becoming a prime

minister. what will sunak get out of the trip. coming up on bloomberg. ♪

manus: let's get the latest on some political stories making the headlines. u.k. prime minister rishi sunak is headed to washington for a two-day visit while antony blinken visited riyadh. the burden is on that u.k. story, bruce is tracking the america story. bruce, where was the america first story going by wilson and revived by trump? the boeing deal is done and a million barrels were cut. there was no turbo from the white house. talking through what is going on with this relationship with

saudi arabia. bruce: the relationship has been chilly for a while. this is dating back to the presidential campaign leading up to the 2020 election of president biden, then vice president biden had criticized the saudi crown prince pretty strongly this was following the murder of the washington post journalist. since then, relations have not been great. last year, president traveled to saudi arabia and met with the crown prince. they did not take cans. secretary of state antony blinken is there and has been meeting with the crown prince. he said that human rights is one of the things he is discussing.

manus: the human rights issue was part of the protest and the campaign from a number of different people. at dissipated when the deal got done. what does rishi sunak really want? they have met recently. is that it? lizzy: the chancel attic -- a transatlantic trade deal is not even on the table. what he wants to do is put that u.s. -- u.k. -- put the u.s.-u.k. trail deal on the table. you have the u.s. inflation reduction act and the way the u.k. sees it is they want to smooth the edges. britain does not want to be

caught between the u.s. on one side and eu's response on the other. aside from economics, they will also talk about ukraine, reaffirmed their support that china can shore up infrastructure, supply chains in training influence -- in chinese influence. sunak said he wanted to be the home of global intelligence. manus: he needs something to knock them off the front pages. bruce, biden is off to china as well. what do we know about that? what is the intention? with china, it is very much about not getting crowded out by china. bruce: a correction there.

but are reporting a bloomberg news is that secretary of state antony blinken will be traveling to china at some point. manus: excuse me. apologies. bruce: it is interesting that president biden did meet last year. they were hoping that that would set the stage for a thaw in relations and secretary of state blinken was supposed to travel to beijing earlier this year, shortly before he was scheduled to leave, the news broke about the balloon that was traveling over the u.s. that caused a huge outcry. as a result of that, secretary blinken called off the trip. now there is hope that he will put that back on the agenda. this comes at a time when there has been a flurry of meetings between u.s. and chinese officials. most recently this year the

department official in charge of a shout was meeting with his counterparts. if secretary blinken does go to china, it is a significant elevation in the attempt to get things back on track between the two countries. manus: ok, bruce. that was my fault. i would elevate anybody to meet xi jinping. lizzy, we did not quite get to the personalities of rishi sunak and president biden. we will get to that. team bloomberg,od morning. ♪

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