dani: good morning and happy monday. this is "bloomberg daybreak: europe". i'm dani burger in london and these are the stories that set your agenda.

on the break of deflation. chinese consumer prices flatline in june while producer prices fall at the fastest pace since 2015. treasury secretary janet yellen declares u.s.-china ties her on a sure footing, saying washington's message has been heard following her four-day visit. president biden stopped in london en route to lithuania. sweden's nato membership bid will be on the agenda. last week you all decided to do a strange thing with this bond market. duration is in the drivers seat, and continues to be this morning. 10-year yields are above 4%, it was this massive bear steepening we saw last week. it was a bond selloff, yet we saw 2's and 10's steepen steadily. this is what happens when cuts are priced in, instead we are selling the 10-year, yields are

higher over the past two trading sessions by about 4.5 basis points, is this a harbinger of recession? or regime shift in the bond market. either way duration is selling off. risk assets are getting hit, specifically stocks. as we headed to the end of the trading day on friday, u.s. equities puked. there wasn't a clear driver, maybe taking risk off as we headed to the end of the week. you can see the strange chart of the past two trading days. we continued the selloff today. it is big tech that is selling off the most in the american futures session. if it is duration that is something off, yields on the long end moving higher, it is not unusual to see tech bring the pain i am the equities session. it is completely different in asia. take is leading the session. let's see how asian markets are faring and get to yousef gamal el-din. as i just said, tech is underperforming in the u.s., but

in asia tencent and alibaba are leading the charge higher. yousef: you have china cpi coming in flat year on year, that opens the door to the potential of stimulus becoming more of an urgent priority on the upper echelons of the chinese government. that's what we're seeing in terms of repricing across the board. both in terms of the broader regional indices, but specifically some of the china tech plays. the announcement coming through from tencent and alibaba. specifically, the broader resolution around some of the fines over the weekend, in addition to and group's proposal to buy back 6.7% of shares broadly improved investor sentiment. the csi 300 up 0.5%. i want to break that down further into specific place. the ones that were meaningfully involved in a lot of the

deliberations around the fines. let's include alibaba, and think about second-tier fx including tencent, and the intraday pricing reflects the kind of reset that is underway. whether that will endure remains to be seen. we are up 3% on alibaba, just short of 87 a share. i want to highlight bond yields, we're picking up where we left off last week. you look at the gmm on the terminal. you zoom in on what is going on with developed and emerging market bonds. from the bank of japan, there is news that they will provide liquidity to buy up a total of 3 trillion again of government bonds with three purchase agreements. this is the first time they do that since march of 2022. and it comes as repo rates in tokyo have climbed. you can see what we're getting in terms of the bond yield adjustment.

that will define the rest of the week as we count down to those cpi numbers in the u.s. dani: i have some other bad news for you. we got so much fed speak this way. an insane amount that might upset that bond market even further. yousef: they have their blinkers on and work with that. dani: i think that is the best for all of us, although considering the business you are in, i know you have got to pick out from those blinders every now and then. yousef gamal el-din on the asian markets. that's your market check, let's get to top stories of the morning and get to our morning roundtable. joining us is bloomberg's lizzy burden, and markets today managing editor kristine aquino. we have a lot of top stories this morning. we have to start in china, specifically with geopolitics. lizzy: treasury secretary janet yellen wrapped up her visit to beijing. she had to emphasize to her counterparts that the u.s. is not seeking to get one over on

china. she tried to stress that it is all about diversifying supply chains, not decoupling anymore. take a listen. sec. yellen: it was externally important for me to address this issue and be sure my chinese counterparts that these are by no means the same thing. this is something i am trying to communicate and believe strongly in myself. certainly, i think that mesage ws received. dani: it's a different tone. but is this enough? does her rhetoric change enough or is she speaking with a distinction and no difference. the things they say they are blocking are just for national security. it's the stuff china wants. it is worth emphasizing, xi gave an interview to cbs and talked

about the american economy. i want us to take a listen to this. >> is the risk of recession completely off the table from your point of view? sec. yellen: not completely off the table. but we would expect with the job market is strong as it is now to see a slower pace of ongoing job gains. dani: it is not just political, american data has been good. it doesn't seem like recession is necessarily eminent. kristine: i can see that two halves of janet yellen in the interview. she does not want to raise alarm over recession. she was to emphasize that u.s. jobs data has still been quite strong. but the economist in her eye can see refusing to rule out all possibilities, including risk of recession. politically speaking it is

difficult to make assurances because you don't know what will be happening, especially as a result of the fed rate hikes that markets by and large expect the fed to deliver. i can see your dilemma but doesn't want to make promises, but reemphasizing what we saw from last friday, the u.s. liver market remains fairly robust. dani: when we see yellen v economist and politician, it is the economist that wins out. folks who said we are going to get a recession last year said we are going to get it this year. we still haven't gotten it this year. one place that the economy that is not supporting us is china. we're still not getting that bruised. if there is any area where we say global growth is faltering, that is where we say that is happening. lizzy: the expected recovery in china is the backdrop to this visit. you have inflation data out of china missing. it eased for june, missing

applications for a limp 0.2% increase. ppi is a 5.5% decline, only expected to be a 5% decline. dani: in terms of what this means for markets, it goes back to that hope of more stimulus. we haven't gotten big broad measures of china stimulus but maybe that will eventually support chinese equities. what china is doing in terms of the central bank is so different than the ecb, the fed. kristine: you see that divergence in policy out of china versus the rest of the world which is still on that tightening path. that reflects a lot of concern that the post-covid lockdown recovery isn't delivering that positive global growth story, that domestic growth story china was hoping for. i feel like at this point in time, there is not enough reason for them to deploy that big bazooka of stimulus yet.

but they are definitely on guard. they want to make sure that the markets are poised for that. because we're not seeing that come through. dani: the other top story i really want to talk about is bonds. the market has been so strange, lizzy. lizzy: what would we do without you, dani? it was all about jobs data last week, it is all about inflation data this week. but no relief to start the week for bond investors. 10 and-year yields climbing this morning, highest levels this whole year. dani: i come back to how we are this market is. the yield curve steepened dramatically last week but it was a bear steepener. bonds are selling off, we priced new highs when it comes to rates. it's weird that we had a steeper yield curve. last time this happened was march and the expectation was that the fed would be cutting. we're in a different regime. 10's are in the driver's seat. this is a confusing market.

kristine: confusing indeed. the people participating are confused themselves. what we're seeing from this yield curve move speaks of entrenched expectations for inflation. we're seeing long-term yields staying elevated as people come to the realization that this might be the new normal for inflation. we might not get to that 2% target for a few years. the expectation this week is that the cpi print will go down to 5%, that still a far cry from 2%. markets are realizing that this might be the new normal, at least for a good while, and they are probably readjusting that's. -- bets. dani: before we get to cpi, let me show you what i am watching out for over the next 24 hours. we will have so much fed speak this week. today we get daly, mester and bostic all speaking.

last week in the fed minutes the decision to pause was less unanimous than seemed. then we get a blackout period towards the end of this week. this is their last chance to turn over markets yet again. we will get a talk from the fed vice chair for supervision michael barr. you will be discussing bank supervision, new regulation and capital requirements. finally rounding out the big hitters, andrew bailey will be delivering a speech at financial and professional services dinner. that's apparently the title. when it comes to what we're looking out for, lizzy, your eyes will be on andrew bailey, what are you expecting? lizzy: it will be interesting to hear that changes to mifid. some of the people i was speaking to last week say this is a step in the right direction but it is difficult to compensate for all that has happened since brexit.

interesting to hear from andrew bailey at aix-en-provence over the weekend saying he does not want to change the inflation target because that would undermine the credibility of the boe even more. dani: i also mentioned all those spent speakers. someone tweeted at me, can they please leave us alone? people want less volatility than we have been seeing. kristine: i don't know that they will get that. because again, a lot of fed speakers, and we will hear their different views on how to proceed next. that's going to muddy the picture even more. you mentioned cpi, of course. looking at the jobs number last week, that was confusing as well because there was something for everyone in that number. the pullback in headline jobs figures but then the acceleration in wage growth, really quite confusing signals. the fed will offer us more data points to trade off of. dani: pain trade seems like yields higher in the long end

so could be a painful week. this bloomberg's lizzy burden and our markets today managing editor kristine aquino. you can get a roundup of all the top stories by going dayb , that is our daybreak page. coming up, the ecb and its inflation fight. we're hearing from the bank of portugal governor mario centeno, next on bloomberg. ♪ 76% of 23andme health customers surveyed reported taking healthier actions. more exercise. eating healthier. and simply getting more sleep. because they know health isn't just a future state. health happens now. with over 150 personalized genetic reports from 23andme

you can start your dna-powered health journey today.

>> we have to keep and i on all items of inflation, and core inflation stands out as a very important indicator. and you are right, it's not

coming down as fast as headline inflation. but we also need to remember that it played the same trajectory. so, we need to remain confident. in the way we're fighting inflation. >> you remain confident that we may have reached the peak? >> all indicators say so. of course, for this to happen, we need to keep our monetary policy very clear. we have increased interest pay -- rates 400 basis points in a short period of time. it was the shortest period in which we hiked that much. there is a monetary policy lag, we know it takes time to build the cause of the way interest rates are set in the market.

many loans are on fixed interest rates, so it takes time for this to be transmitted to the economy. but we are confident the transmission mechanism will work. >> rate hike in july seems like a done deal, what about september? >> i am sticking all the time to the meeting by meeting and data-dependent. we will have the meeting in july and will discuss all the indicators available. pmi's, ifo numbers for germany were not very good a couple of weeks ago. the economy is slowing down. inflation is coming down. again, let me remind you, faster than the way up. this is important to bear in mind. we will discuss in july what to do. it's clear that the message must

stand, we're here to fight inflation. september will have a lot more information coming up. we will be more confident on this process in september. that's my feeling very let's hope i'm right. one thing we have to achieve, collectively, is to become more predictable in terms of monetary policy. because this will reduce uncertainty, build on confidence for investors, consumers. dani: ecb governing council member and portugal central bank governor mario centeno on the inflation fight. elsewhere in terms of monetary policy, one of the most read -- i should save the most read story on the bloomberg terminal -- in the coming months we will start to feel the brunt of the fed's current qt program. gone are those liquidity injections that help address regional banking troubles.

gone is the debt standoff that help the treasury remove liquidity. let's reflect on last month. tucked away in powell's congressional testimony rather was a rare admission that the fed was blindsided by the impact of qt in 2019. back when the repo markets seized up. we're draining the balance sheet at a quicker pace than 2019 but from a much bigger base, so we can't quite compare them. let's bring in mark greenfield now. does history tell us that we should be worried about qt drainage, for as powell says, it will have no particularly important macroeconomic impact? mark: qt is a big thing for bond traders. they have had a reasonable amount of time to get used too the idea. it hasn't suddenly been thrown upon them. it is different to 4019.

the situation in the market was quite different to what it is now. people then were fairly bullish on treasuries, and net positioning was long of the market as well. come to today, people have had a bear market in bonds for more than a year. positioning is skewed to the short side anyway. traders have got a much more balanced outlook as to where yields are going, where inflation is, and what the fed are doing. they have a lot that had a lot more time to absorb all those factors. it does it mean to say that the fed will be so complacent that qt can't cause some pain, but they had better be prepared this time around. the fed obviously will be watching carefully, and the repo market has caused them problems before. not just because of qt, there has been other ms. functioning with repo as well, so they can never afford to close their eyes to it. but probably they will get through with a lot less damage

this time around than they did in 2019. dani: that is relieving, i love that less damage but there still could be damage. when it comes to bond traders and where inflation is going, that is the overall picture, but if i consume in on this week. all of our viewers have to forgive me about what a strange bond market it was last week, this bear steepening. what do you make of this data -- the set up in this week's cpi report? mark: click curve is still inverted. there was some relief from inversion last week. but in the context of the past year or so, not really that much. the positioning is extremely large. if you look at the short positioning on the cftc for the 10-year in particular, we're at extremely large levels of net shorts, which means you will have high volatility.

the foreign exchange market is a good example where positioning typically is skewed heavily one way or another, whether it is dollar-yen or others, we're getting the same thing in the treasury market. leveraged positioning is skewed in one direction, so you are bound to have choppy trading, particularly when data surprises. adp data last week was a big shock to people that had to react to it. then you get nonfarm payrolls which isn't as extreme. we will have that kind of trading going on for a while around every data point as it comes along, until positioning goes back to a smaller quantity. but for now, treasuries and the dollar are two of the biggest macro trades out there, and people want to be involved. and that gives you short-term volatility. dani: i have got a difficult task for you. job data came in from kpmg, fastest pace in terms of candidates in 2.5 years, wage

pressure eased, what does that mean for bailey? >> it might give him an outlet actually. no central bank or was to be told what to do. last week the market was pushing the implied rate on u.k. yields above 6%. you might not that idea much. this job data might give him a reason to say i'm a little less hawkish this week. dani: that it beautifully just in time. bloomberg mliv strategist mark crane field. we will hear from the ceo of sanofi on post-pandemic supply chains and their wider economy next. this is bloomberg. ♪

>> we have this paradox that post-pandemic there is a lot of deficits and fiscal challenges,

so people still go for the lowest unit costs because governments are trying to balance their books. we understand that but in health care you have to take a long term view. help there has not been a priority for the eu, at least not in terms of what it creates for population health and investment. yes, sadly, there will be a desire to lower costs again and that will lead to having to repatriate [indiscernible] however i think some long-term thinking and clear-mindedness to make sure that a percentage of essential medicines is made in europe. which means perhaps you have some like stability, maybe it is 40 or 50%, but if you think about resiliency post-pandemic there are things you need to do. >> for you for deep recession in europe going forward? r.o.e. misunderstanding the delay in transmission of monetary policy to the economy

and perhaps we are not out of the woods yet when it comes to recession? >> you said it beautifully, the delay between policy and impact outcome is there for all to see. we have to hold our nerve a little bit. one of the reasons i come to forms like this is to add to our own knowledge and decide where i think we're going. what i can say is we're one of the few, if not the only industry that will never increase its prices. dani: sanofi cl 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? (jennifer) the reason why golo customers have such long term success what, we have a ton of mulch.

is because we focus on real foods in the right balance a literal ton. so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4. before golo, i was hungry all the time and constantly thinking about food. after taking release, that stopped. with release, i didn't feel that hunger that comes with dieting. which made the golo plan really easy to stick to. since starting golo and release, i have dropped seven pant sizes and i've kept it off. golo is real, our customers are real, and our success stories are real.

why not give it a try? it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. dani: good morning and a happy monday. this is "bloomberg daybreak: europe". i'm dani burger in london and these are the stories you are

waking up to. chinese consumer inflation stagnates in june. producer prices fall at the fastest pace since 2015 undermining global equities. treasury secretary janet yellen declares u.s.-china ties are in a sure footing, saying washington's message has been heard in beijing. president biden stops in london en route to a nato summit in lithuania. let's get over to these markets because the 10-year yield is in the driver's seat. throughout this cycle it has been two-year yields moving higher. that makes sense, you have that reaction in the front end. something different started to happen at the end of last week. this bear steepening. it is not pricing in cuts, it is duration that is selling off. the pain trade is yields higher, price down for the 10-year

duration bet. declaration is hurting, it will translate into equity markets which have a hard time getting that take big coming through. tech is leading the u.s. selloff in the future session. we're down about 0.2% on american equity futures. that means over the past two days, you're looking at a 0.5% decline. friday's session was bizarre, we ramped up towards the end and then sold off really hard when it came to the s&p 500. unclear what the driver of that might be. risk off going into the weekend or higher bond yields, either way a difficult trading session friday and that continues this morning. that's the u.s. future and bond picture. let's see how asia markets are faring. yousef gamal el-din is back with that. yousef: it's very much all about the cpi numbers we got from

china which were flat year on year. there is thinking in the broader parts of the asian investment platform that suggest this is positive for equities. because it will push the upper echelon of the chinese government to take the urgency around policy measures to bring the chinese economic momentum story back to life. make that much more urgent. at the moment you are seeing broad gains led by tech shares. the csi 300 is up 0.1%, with the half saying up 0.1%. it is signaling that crackdown on the tech sector by imposing fines on andrew, tencent holdings, and the proposal to buy back 6.7% of their shares improved investor sentiment. you are looking at some of the intraday charts. this is alibaba at 87 a share. it is a similar story for peers like tencent.

when i zoom out to the gmm, and give you bond yields in asia, it is all about their trajectory for interest rates globally. the bank of japan is doing something more specific around repurchase agreements. this is the first time they have done something like this since march 2022. this is ¥3 trillion of government bonds that they will buy with these purchase agreements. it is going to raise the stakes for the bank of japan as we get closer to potential clarity on yield curve control in the weeks and months to come. dani: thank you for the asian markets roundup. let's talk about geopolitics, because u.s. treasury treasury secretary janet yellen wrapped up talks with chinese leaders in beijing. she said she believes relations between the two countries are now on a sure footing. let's get to our asian politics or respondent -- correspondent.

i found this interesting because yellen is saying look, we're not decoupling, we're removing some of the ties when it comes to things that are sensitive to u.s. security. is this a line that china will be ok with? >> it certainly has seemed to smooth things over, at least in the short term it is worth stressing that the background to this was very low expectations. there weren't specific deliverables that were expected. military ties still not [indiscernible] when it comes to this economic message, yellen has been successful hammering home this point that with the u.s. is trying to do is not decoupling. even that phrase "de-risking" was not referred to do much about we had a lot instead about the need to diversify supply chains to protect u.s. national security. that message around national security might have resonance in

beijing somewhat given that has been a massive priority of xi jinping who has sacrificed some elements of economic growth to preserve national security. she also emphasized that what the u.s. was trying to do was limit, and have ferried narrow applications of these types of restrictions, which may have been somewhat calling to beijing's side, too. dani: i feel like i have read a lot about what yellen has said in her messaging, have we heard anything from her chinese counterparts? >> in some ways, no news is good news. chinese media hasn't had some sort of outburst or being overly critical. it has been more muted, and that i am large -- by and large signals more on the positive side. we did have pushback on the chinese side warning that it is

good for no one if the u.s. conflates national security with economic priorities. this is something china itself has done time and time again. there is potentially some, if not empathy, but some mutual understanding when it comes to that, too. yellen met with a vast array of people, 10 hours of meetings. meeting with both old and new guard. that will have gone somewhere to shore up ties on the beijing side. brought a little bit of goodwill. perhaps you saw her meeting with an official who was part of the outgoing guard, but still an important figure in chinese politics, plus all this new economic cohort, the two top officials at the pboc including the expected next governor there. we saw her going above and beyond to extend her meetings and so on with a wide range of

people across the upper echelon. dani: rebecca, thank you for that. that's our asian government and politics reporter. elsewhere in the world of geopolitics, nato leaders are heading to vilnius for a two-day summit starting tomorrow. among the topics, sweden's application to join the alliance which has been held up by turkey. maria tadeo is in vilnius. today we're expecting that bilateral meeting between sweden's prime minister and turkey's president. what might we get from that? maria: today it is all about president erdogan. as you say, the nato summit officially starts tomorrow, but diplomacy is up and running already from today. in terms of sweden and turkey, we're expecting a bilateral meeting between president erdogan and the swedish prime minister. we know that erdogan had a phone

call with president biden on his way to europe. this was a 45-minute to our long conversation. we know the issue of sweden came up. in terms of what to expect, in an ideal world for the swedish government, by the end of the day you could hear from president erdogan saying our national security concerns have been met. and now we can move on with the ratification. if that happens, ratification will be fast. sweden could actually join and be at nato headquarters by the end of the month. the problem is if that doesn't happen, this is going to be a serious political headache for sweden. it is now a national security risk for them. they have manifested very clearly, they do not want to get in a situation where they are not in fully in nato. when you listen to the words of president erdogan, he continues

to say this is not enough. the measures taken by sweden are not enough to merit this ratification. a lot of the focus today on president erdogan because to be honest he holds the keys to this. dani: of course, it is not just about sweden's bid, it is also ukraine's bid. president biden has been saying ukraine is not ready to join nato. i can't imagine that would bode well for the country's aspirations. maria: it is a twofold conversation because president biden yesterday gave a long interview and repeated that ukraine is not ready to join nato. the ukrainians were under no illusion. they are not really expecting a formal invitation to join nato. they want a political commitment that would signal yes, this would happen as long as conditions allow. to some extent, there wasn't a

lot new in president biden's words. he was repeating that this is a country at war, and suggesting you can join overnight wed put russia and nato in direct confrontation. and that is something that should be avoided at all costs. i was told yesterday by a nato source that we will see a linguistic exercise to bridge the gap between the position of united states and the hopes of ukraine. the package that may be agreed by nato to ukraine. the other big question is will president zelenskyy show up in vilnius? he has been invited but said i'm not going unless there is something in it for ukraine. there is a lot of speculation swirling around, but we don't have confirmation that he will be here this week. dani: as soon as he has confirmed, i'm sure you will be on the case. looking forward to your coverage.

maria will be speaking with the president of with the way nampa later today -- of lithuania as the nation hosts its first nato summit. breaking his from the wall street journal over carl icahn and the attack he has been facing from hindenberg research, the short seller. let me just read you what the wall street journal says. icahn and the banks finalized an amended loan agreement sunday that untie his personal loans from the trading price of his company shares. a key risk raised by the short-sellers. that increases his collateral and sets up a plan to fully repay the loans in three years. coming up on the program, reading together a success. we will discuss the outlook for meta's new app and its challenge to twitter. this is bloomberg. ♪

76 23andme health customers surveyed reported taking healthier actions. more exercise. eating healthier. and simply getting more sleep. because they know health isn't just a future state. health happens now. with over 150 personalized genetic reports from 23andme you can start your dna-powered health journey today.

dani: meta ceo mark zuckerberg says 70 million users signed up to his social media app in two days. threads ranks number one on free apps on the apple store, but will the new platform succeed in knocking the blue bird off its perch? here to join us is alex webb. did you both get threads? you can tweet, or thread? >> it was fairly banal. dani: my confucian centers around what is the purpose of this app. can it replace twitter? >> lots of different interpretations. quite a few brands are saying

threads gives us the opportunity to explore subject matter in more detail. it feels like it will be quite different to twitter, but it will take quite a while for threads to create its personality if you like. dani: i can't take screenshots of bloomberg terminal's and put them into threads because there is no desktop app. when that happens i will be a full user of it. alex, what have you seen in terms of data that would suggest this is a success? >> the 70 million that mark zuckerberg says have signed up. it is clearly big. twitter has on the order of 240 million as of july 2022, the most recent data we have. if those 70 million are the power users of twitter. some of them are just ported

over from instagram so they are not necessarily taking the core twitter base. 25% of twitter users generate 95% of content. that's the concern for elon musk. at the moment, i say they will do both. at the moment, mark zuckerberg has said they will not think about ads until they get to a billion users. that suggests he is as much about taking out twitter as boosting their own business. dani: that is bizarre to think we are fighting over a twitter replacement when the world to some degree has moved on. we have moved on to things like tiktok. it is all about videos and pictures, which twitter is not. >> there is a lot of antitrust questions. it will not kill off twitter, it will be something different blurring views across them.

that is what mark zuckerberg will be playing into. there is huge amounts of dynamic competition out there. they are expanding into a different market, not improving their entrenchment in an existing market. there will be questions about whether they are abusing their strength in instagram and all that user data of 2 billion people to give themselves an unfair leg up. for people like macedon and blue sky, is this crimping the ability of other upstarts to get a foothold in the marketplace? dani: interesting point about antitrust. while we are talking about tech, alibaba and tencent all rallying today. it seems may the worst is over, we have turned a corner in the china tech crackdown. >> probably more data about what the chinese government is planning. the equity market tends to have a short memory about what happened. the chinese government basically changed policy on a dime.

that they could do so again at the drop of a hat. as an investor, if you are from the u.s. or europe, you are probably more wary about how far this rally will go and whether it is the right time to step back in particularly given all the macro signals about china are looking weaker. we will have to see whether the equity market is short or longer than it has been in the past. dani: do you think that's fair? >> there has been a lot of concern about chinese intervention in the tech industry. all of this was bird by that initial crackdown on ant was about to ipo. jack ma update comments about the way the financial industry is related in china. all of a sudden the ipo was pulled and we see a push back on chinese tech companies. in the meantime, ant was fun out of alibaba, and alibaba shares

are down 71% from that peak which is a lot more than any of the u.s. corrections over the course of the pandemic. there is still hesitation about investing in the chinese tech industry because you might have a little bit of clarity right now on seeing this affair wrapped up, but there is nothing stopping china from changing his mind in two-years' time. that's the concern. the only reason for hope is alibaba is getting smaller. they are spinning out companies which makes them less of a threat to china. dani: perhaps in order to make sure this is the end, is that a model all the big tech companies need to follow in china? >> people will be looking at what happens with alibaba carefully. you can frame it as a way of getting rid of the conglomerate discount by splitting into six different businesses. the actual size of the remaining alibaba business will be 98 billion dollars in revenue.

they are still keeping the lion's share, just trimming it a little bit. dani: find us all on threads where we all apparently have an account. coming up the dutch coalition falls. prime minister mark rutte's government collapses after a row over migration policy in amsterdam. ♪

dani: dutch prime minister mark rutte's coalition government collapsed over a migration policy dispute. rutte said several days of talks within his four-party coalition failed to overcome irreconcilable differences. that will force the netherlands

to hold an early election as soon as autumn. for more we're joined by april in amsterdam. when it comes to this immigration policy, what was the driving force that caused this fall apart? >> good morning, as he said, prime minister rutte's government collapsed friday amid ongoing conflict over the migration policy. rutte had given his coalition partners, the christian democrats, d66 and the christian union party to limit the right to refugees for war zones. they have struggled to come to an agreement on this and these talks fell on what they described as irreconcilable differences. this ends his fourth coalition

government since he came to power in 2010. he is the country's longest-serving prime minister. dani: so what happens next? >> next, we have a debate in the lower house of dutch parliament today with lawmakers pulling back from summer recess to attend. a vote will be held mid-november november at the earliest. rutte plans to stay on as caretaker prime minister until a new government can be formed. he also faces a vote of no-confidence in parliament today. even if lawmakers manage to oust him, he could still return if his party can claim victory at the elections in november. dani: that is april heading us up for an interesting day there. the u.s. futures selloff is accelerating. we're looking at equities falling more than 0.5% when it comes to nasdaq futures.

tech is leading is lower, not unusual considering it is duration selling off in this bond market. the selloff has been so well carried throughout this morning that we're not seeing some of the gains we had looked at in hong kong tech. that is starting to peter out, too. hong kong is still up but only by 0.6%, it had been up much higher thanks to alibaba and optimism that the worst of the crackdown would be over. instead this is what we're seeing a selloff led by tech. euro stoxx 50 futures are also down 0.5%. amid all this, we're getting a curve steepening in this bond market, but it's important to emphasize that this is a bear steepening. we're seeing a selloff across most of this curve. you have bond yields that are moving higher, rates being priced in higher. amid all of that it is a yield curve steepening. a sprain set up into the cpi report this week, that july rate

expectation that is nailed in more or less. it is september the same? we will get a lot of fed speak before the blackout period. a lot of good interviews to come. we will speak to the president of lithuania, as the nation hosts its first nato summit. stay with us for that conversation. up next, it is "markets today," as we take you up to the european cash equity trade open on bloomberg. ♪

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>> this is bloomberg today, live in london with tom mackenzie. >> the cash trade is less than an hour away here are your top headlines. chinese cpi nearly flat lines in