dani: good morning, this is "bloomberg daybreak: europe". i'm dani burger in london with the stories that set your agenda. markets go risk on as the slow down in u.s. inflation bolsters

bets that the fed is close to be end of its rate rise cycle. senator warren calls on the fed to stop hikes as inflation eases. >> we have great news that inflation has been cut by two thirds. my messages take yes for an answer chair powell and let's stop with rate increases. dani: president biden says the u.s. will not waver in its support for ukraine as the nato summit includes. plus, walt disney extends the contract of ceo bob iger for another two years, giving him time to implement his turn around and find a successor. like a coiled spring, it is yields lower, dollar weaker. the dollar weak story seems like the trend emerging for the second half. check out what the front end of the u.s. curve has done over the

past 24 hours. this is the two-day chart. we can see when cpi hit. we get this drop of 12 basis points to end the day. that's of 100 basis points of hikes still on for this month but for the rest of the year we are backing up from those trades. no longer are we pressing that in. this picture of softer inflation has been helping tech. let me show you what nasdaq has done. has tech futures continue to rally this morning after a strong rally in the cash equity trade yesterday. one weird thing to mention on nasdaq, for the nasdaq 100 they will be taking activision out on the 17th. one day before that deal is supposed to closed by the fact the ftc is still appealing the microsoft acquisition of activision, and the u.k. cma has

yet to reverse their decision to block it. let's now check in on asian markets and get to charlotte yang, the rally is continuing in asia after cpi numbers. >> yes, we're looking at a pretty upbeat session in asia this morning where investors are risk on after u.s. softer inflation. equities are following gains in the u.s. australia is up, also korea, in japan the nikkei is up 1% and sony is getting moves after goldman upgraded the stock to buy after getting bullish on its animation software business. hong kong is providing key support to the region, hsi tech up 2%. it is up for the fourth session this week. it is set to post the best week

this year. the chinese premier met with senior executives from the largest companies wednesday in votes of support of platform companies. remember last week, china announced big fines on and group which investors took as an inventor to the regulatory crackdown on tech. that government is any a friendly gesture to the private sector. whether the gains can continue, investors are watching whether bullish words can translate into actions that can support the environment. dani: i should mention we just got swatch earnings beating expectations. the profit at 686 million swiss francs. china was in focus with those sales as an excellent growth opportunity. charlotte yang with your asia market roundup. let's get to other top stories

you need to know this morning. with this morning's roundtable is valerie tytel and jill disis. great to have you both this morning but we have got to start with cpi. the numbers year-over-year comes in to 3%, down six percentage points from the june 2022 peak. core inflation declined to its lowest year-over-year rate since october 2021. jill, it seems reasonable to ask, could july be the last rate hike from the fed? jill: it certainly could. we have heard so many times from jay powell and all these fed officials. you look at new york then-president john williams saying we need to look at the data to see how to make these decisions going forward. powell has said we're looking at live decisions later this year. even though the dot plot implies, the rate hike, they have set a lot of that is contingent on what the data

shows. this inflation data is good. obviously, energy prices rising high in 2022 off of the back of ukraine but this is a pretty positive sign if we're looking to see when rate hikes will let off. >> it was a great sign if you look at that key component powell has pointed out, this core services six housing component. month on month, it fell to 0%, that is a great sign for this almost immaculate disinflation narrative. that we don't necessarily need labor market pain to bring inflation back to target. the base effects over the summer are not as supportive of disinflation as they were for this month's print. but it shows that even this narrative from fed members like bargain saying we can afford to be patient and wait for long and variable lags to take hold and

bring inflation back to target on its own. dani: we had the quote board saying inflation is too high, if you back off too soon, inflation comes back strong again and it requires the fed to do even more. deadly yesterday speaking to bloomberg surveillance said he doesn't think disinflation is in until we see pain in the jobs market. doesn't this number prove that that is not the bar anymore? that we don't necessarily need pain to see inflation come down? jill: possibly, what we're ultimately looking for is more of a sustained trend. the labor market statistics have always been puzzling, or difficult to track and follow. i remember last week some fed officials saying sometimes the headline numbers for payroll don't necessarily tell us a whole lot about what underlying weakness in the labor market might look like. i think at least when it comes to some cooling off of the labor

market, it really does go back to the idea of there needing to be multiple data points we're looking at to see how that trend is continuing. i'll point you to how activity needs to gradually slow in general. the fed beige book yesterday saying even if activity was picking up in may, a lot of regions surveyed are seeing some cooling off. it points to the fact that there is a lot of components we need to look at, not just labor market, but how everything factors in before you can make a definitive conclusion as to what rate hikes look like this year. >> you noted multiple data points. the one thing powell has drawn markets attention to is positive really rates. with yesterday's inflation rate, the real fed funds rate is in positive territory versus core cpi, headline cpi and versus core cpi for the first time since 2019. with powell's renewed focus, the

market will read through that we do not have much left for the fed to go. dani: we will talk with dana about it after the next commercial break, but it was a good day for everyone who was not a dollar bull yesterday. valerie: a good day for u.s. assets as well. when we think about how to position for this next change in the cycle, you want to be in currencies that benefit from strong u.s. growth. we're getting, this fed pivot,, alongside a u.s. economy still running strong. i'm looking at currencies like dollar-mex, if you want to be in a short dollar position it is the one to look at. dani: love it. the other story to quickly touch on his disney. for those listening, jill in a former life used to be a disney reporter. this story coming out of the sun valley conference that we had yesterday that bob iger's

contract has been extended another two years so he can continue his turnaround and find a successor. the man has been successful at everything except finding a successor. jill: yes, last time i was covering disney was four years ago and bob iger was indeed the ceo then before he had given the role to bob chapek. this is a surprise that his contract has been renewed. it is enticing to keep them on board at disney, because you are looking at streaming subscriptions down, you are seeing some trouble at parks as well. the media entertainment environment is really volatile. you have seen over the last couple of years how disney has been wrapped up in culture wars with now presidential candidate ron desantis, the governor of florida.

that ways into these headwinds disney is continuing to face. we saw longtime cfo christine mccarthy step away last month. she is staying as an advisor but that is a pair of steady hands they are losing in that capacity. it makes sense to keep bob iger around for quite a little bit longer, but it does raise questions about who will be the next bob iger, the next ceo of disney who will be able to come in and provide a path going forward. he took some of his leading managers with him to sun valley, so we will see if it ends up being anyone of those guys. dani: let me run you through what might be top stories in the next 24 hours for your day ahead. at 7:00 a.m., we get u.k. gdp, that's likely to have contracted in may. we have that extra holiday for charles iii's coronation. homebuyers pulled out of the property market by the fastest

pace in june. 10:00 a.m. we get euro-area industrial production data. we got a hit from basf, the chemical company that cut their outlook a troubling sign at the the same thing last month. finally, u.s. ppi and jobless claims. valerie: looking at ppi, especially components that feed into cbe. once we get cpi and ppi, we know with a good amount of certainty where pce will come. jobless claims reversed their weakening trend recently. it goes back to my favorite topic, this immaculate disinflation narrative that we can get inflation back to target without labor market pain let's see if doubles claims come in strong today. dani: was to be sure we will get back to 2%. valerie and jill thank you for joining this morning's roundtable. you can get a for the roundup of the stories to get your day going.

in today's edition of daybreak. terminal subscribers you can go to dayb . coming up on the program, the bloomberg dollar spot index moves to a 15-month low. we dig further into the path ahead for the greenback and u.s. rates next. on bloomberg. ♪

dani: our next guest might kill me for this, but today's show is brought to you by the letter d, it is the dollar doldrums brought about by disinflation. the dollar since that cpi reading fell to its lowest level in 15 months as bets ramped up that the fed would be one and

done. one more rate hike and they are finished with his friend of cooler inflation in place. but this is something hedge funds really seemed like they were ready to pounce on. the latest cftc data showed that hedge were net short the dollar in the latest reading. that's the first time since march. joining us is someone with another letter d, it is david finnerty from the bloomberg markets team. thanks for sitting patiently through that. what do you make of this? is this wound of the greenback the overriding trade for the second half of this year? david: a lot of people would definitely say yes. it depends on your consensus. if you think rates have basically peaked, we're looking for the fed to hike in july, and he think the fed will cut next

year because of slowing growth, there's good reason to say dollar has peaked because interest rate differentials will weigh down. you are looking for the ecb and bank of england to raise, the bank of canada, when compared to other central banks it looks like it is plateauing quicker which is bad for the dollar. if that is your start, you go yes, that is the case. there is always a have yet -- caveat, yes, cpi is falling but if you look at core pci which is preferred data, inflation is still at 4.6%, wage data in the report was 4.4% which is way higher than needed for 2% inflation. so that's one thing. the second side of the equation, if the dollar has peaked, against what? against basically every other country.

the pound and the euro are the two big weightings in the euro and bloomberg dollar index, if they start weighting, not only do the ecb height, that is guaranteed, it is have your economies react to that? if those for economies are forced into recession and the u.s. economy doesn't, you can see sterling and hero coming under pressure, which would help the dollar by default. near-term yes, dollar, longer-term a lot more choppy trade. more obstacles to be got over to see dollar continually go down. dani: one of my favorite facts now that we have that 3% year-over-year cpi figure is that it is lower than japan's inflation of 3.2%, who would have thought a reading lower than japan? we're truly in bizarre world,

for that brings me to the yen, we have broken through 140, is this more than dollar weakness and bets that we will get change from the boj tweaking ycc? david: it is more yen shorts being squeezed at the moment. there are some people debating that ycc may be tweaked this month, most people are not expecting it. wage data in japan has risen, governor ueda has indicated as such. you think ycc realistically will be kicked down the road for october 1 there is another outlook report. it is the difference in interest rate differentials which comes back to the u.s. side of the equation. having said that, if the boj did surprise, and it would be a big if, then obviously dollar-yen would tank quickly down towards the 130 handle.

dani: any change from the boj will have huge consequences for all of these markets. this is something steve englander at standard chartered flagged, you had u.s. breakevens one-year fall pretty dramatically back below 1.5%. at the same time that oil has moved higher, a lot of idiosyncratic factors there, too but this is a break from the trend we usually see and lends itself perhaps to energy prices not playing as big of a part. but if we see a resurgence in oil prices, do you start to get worried that inflation can't ramp up based on energy costs? david: oil has been edging up this month. but it is still well off its highs. just a few months ago people were looking for $100 a barrel and it is very far from that

level. whether it be supply cuts or pickup in demand hypothetically, all of a sudden we're going towards 80-90 dollars a barrel , the question of inflation emerges again. time will tell. we will get choppy trade one way or another in the coming months. dani: at least for the time being, the patience from the em bulls certainly paying off. bloomberg's david finnerty there . coming up on the program, disney extends ceo bob iger's contract to 2026, giving him more time to implement his turnaround. and hopefully find a successor. we will bring you that story next. this is bloomberg. ♪

>> we are envisioning 2 million square feet. we have five acres to play with. when all is said and done, we expect 2 million square feet across residential commercial retail. >> given the track record of the investors, the fenway corners plan comes with high hopes of success. that doesn't mean it will be an easy lift. what did you learn in the dynamic move of interest rates from chairman powell? you go fixed structure or floating structure like what they do in europe? >> yes and yes. we have a makes currently -- mix currently. it is a different model from the public company space. we provide ourselves a natural hedge, leaving some debt floating and some debt fixed. >> she took me on a walking tour

into the future. >> this will become the true entrance to fenway park. as part of the attractiveness of this project is the age-old recipe of increasing times, bringing fans the parts, maintaining what's here and preserving the historic nature of what you see around you. but making it more accessible, more fan-friendly. dani: you can catch that full episode of the chief future officer on fenway sports group at 6:30 p.m. london time tonight. elsewhere in the sports and media world, bain capital's senior advisor says disney's decision to extend ceo bob iger's contract is great for shareholders. he sat down with lou brics ed ludlow in sun valley. >> i have looked at mls situations and have not

found the right one yet. there are strategies to be patient. it was the best fit of all the clubs we looked at. it is one of the two or three italian teams that owns its own stadium. we are renovating the south end now. it is a beautiful stadium for multiple uses. the fans love it, and it will be better now with the back end renovated, parking and amenities that you get in the mba and nfl. that was a great situation. we're trying to buy something of quality. if something like that comes along, premier league or any leak, we're looking at it. we think there is synergy with all of this. we had a great experience bringing the coaches, trainers and statistics people we put in to the boston celtics. we spent three or four days sharing notes.

there is similar things with acceleration needed in soccer versus basketball, keeping players healthy, the strategies, so it has been great for both sides. we have learned from them and they have learned from us. >> the big news is that bob iger extended his contract with disney through 2026. your interest would be that disney, espn, nba, what is your reaction to that news? >> i've known bob iger many years personally. he is one of the best ceos i have ever seen, so the disney shareholders should be thrilled. he recognizes the value of sports. he really understands the product. i think that's a major positive thing for the mba and disney shareholders, so i'm thrilled at that development. dani: bain capital's senior steve pagliuca speaking to ed ludlow.

we will discuss what we have learned from a busy nato leaders summit in lithuania. we will discuss biden's appearance and what it all means for ukraine as biden headed to finland for more talks on geopolitics. what was zelenskyy's reaction to the pace of inclusion of ukraine into nato? this is bloomberg. ♪ hi, i'm jason. i've lost 228 pounds on golo. so when my doctor told me i needed weight loss surgery, i knew i had to make a change. golo's helped me transition to a healthier, sustainable lifestyle. i'm so surprised just how crazy my metabolism has fired up. i have a trust in golo 'cause i know it works. golo isn't like every other program out there, and i'm living proof of it. (announcer) change your life at golo.com. that's golo.com.

dani: good morning, welcome back to "bloomberg daybreak: europe". i'm dani burger in london and these are the stories you are waking up to. markets go risk on as the slowdown in u.s. inflation

bolsters bets that that that is close to the end of rising rates trade senator warren calls on the fed to stop hiking as inflation eases. >> inflation has been cut by two thirds, so my message is take yes for an answer chair powell, and let's stop with the rate increases. don. dani: president biden says the u.s. will not waver in its support for ukraine as the nato summit concludes, but allied sanctions suffer a below as russia's flagship oil reaches its price cap. disney extends the contract of ceo bob iger giving him another two years and more time to implement his turnaround and find a successor. the trade continues from yesterday after that cpi report where year-over-year figures came in to 3%. the disinflation trade is certainly on, it is playing out through a much weaker dollar and lower yields. check out that price action

yesterday on the front end, they dropped some oh basis points, and in this morning and we're down 16 basis points on the two-year yield. there was some nice counter programming from barkin yesterday who said inflation is still high, he can't back off too soon, is the market going to buy that? an ease in yields, cooler inflation was also a boon to tech stocks yesterday. the nasdaq rallied more than 1.2%, that really continues today, fourth mentioning as we await the outcome of the ftc's appeal on the decision to allow the activision-microsoft buyout to go ahead. the nasdaq 100 has already announced it is taking activision out of its index. the nasdaq waits for no one, least the u.s. court or the you pay cma -- uk cma.

let's get to our reporter who has been tracking the asian market trade for us, how's it looking out there? >> amazing day for asia. the msci asia pacific index is set for its best today since june 2nd. china stocks are really helping that, we can come to that later. the whole yields and declining dollar story is good for asia, especially companies that hold dollar-denominated debt. correlations have started to reassert themselves. they dropped off in the past few weeks between the dollar, bond yields and the msci asia pacific index. with china taking a more assertive role in the nation. now it seems like the macro fed game is back in place today. dani: the cycle high for the

yields for the rates is almost in, if not in right now. taking a rate from your busy day on the markets desk, thanks so much. over to corporate news. we're about to enter the bank earnings season. it would appear goldman sachs is embracing a new game plan to avoid a third straight quarter of disappointing earnings. executives have been working hard to downplay expectations for results that are due next week. su keenan has more from new york. su: bank executives tries to under promise and over deliver. the situation with goldman sachs is markedly different. the bank is famous for not giving any pre-earnings guidance to analysts. yet now it appears to be breaking its rules. one analyst says it is dropping all kinds of hints that this could be the worst quarter since

david solomon took over as ceo. wells fargo says there is probably half a dozen items that fall into the weak, bad or ugly category. analysts slashed their estimate for quarterly profit by half since june, the biggest revision for an earnings report under solomon's reign. info may relieve pr foressure when goldman posts its results. goldman stock dropped 6% after earnings day back in january and underperformed rivals again in april. awkward performance for a firm trying to establish that it's strategic missteps are behind it. dani: from goldman to the subject of today's big take.

a review of thousands of pages of documents and females suggests -- emails suggest the relationship between convicted six offender epstein and jp morgan executive jes staley went beyond that of banker and client. epstein allegedly helped to staley's daughter with her education and offer tips for negotiating his multimillion dollar salary. a spokesman for jp morgan told bloomberg that any association with epstein was a mistake and in hindsight we regret it, but we did not help him commit his heinous crimes. staley has denied knowledge of epstein's crimes. a lawyer for staley declined to comment on this latest report. you can read more by going ni bigtake on your terminal, or on the web. turning now to nato, which wrapped up a two-day summit in vilnius, signaling that

ukraine belongs in the alliance. despite initial tensions, president zelenskyy thanked allies for their support, hailed g7 security guarantees for kyiv. president biden who was in helsinki today reiterated allied support will not waver. let's get more from maria tadeo in vilnius. we have had the summit wrap up. was this a success? maria: yes, it's a good point because going into the summit there were three fundamental questions for nato. one, a show a of unity. yesterday president biden repeated when we say is a country will defend every inch of nato territory, we're committed to do just that. the second point had to do with sweden. they got the green light from president erdogan, but now the vote on the ratification will take longer than expected. yesterday president erdogan in a

press conference indicated that the turkish parliament will go into recess for the summer, and maybe this vote will have to wait until the end of september, maybe even october. the biggest question was what to do with ukraine. did they get the formal invitation? they did not, it was clear they would not get it but they were expecting a political indication. that was seen on the softer side. ukrainians wanted stronger language but nonetheless they did walk away with a g7 commitment for medium-term security guarantees and walk away with a light for more weapons, more funding and a message from nato allies, the war is still going on, but the place of ukraine belongs in nato. on balance, was this a successful nato summit? you could argue in some ways it was, however many questions remain unanswered.

can it still stay united as an institution? biggest of all is what happens to ukraine? what is a ukrainian victory look like and how will volodymyr zelenskyy get to that point? dani: we could see tensions play out at times. you sent around this morning that video of zelenskyy. the man has had quite the event at nato. when we look at the tensions that have emerged, what is our read on how united nato is when it comes to ukraine? maria: it was palpable in the body language, and the tweet from president zelenskyy at the start of the summit in which he indicated that some of the arguments that went into not giving this political invitation were quote absurd. he talked about a country, ukraine, that deserves respect,

too. bloomberg has a fantastic story on the terminal, that he was told at some point, you have to cool down and look at the full package that the nato summit will provide. there was also that comment from the u.s. -- excuse me, u.k. defense secretary ben wallace who suggested there was a time for ukraine to show gratitude. the u.k. prime ministers that he believes ukraine has shown gratitude and repeated this country as fighting for its life. but it is true, today president zelenskyy perhaps doing damage control put out a tweet at 4:00 a.m. local time saying thank you. he thanked every ally and repeated this was a consummate for ukraine -- good summit for ukraine. that was a different town. -- tone. this is a country that i was told by a senior european

diplomat, it really is fighting for his life, but if you say nothing is good enough, it will do a to service to the cause. that is something ukrainians will have to keep in mind going forward. dani: fantastic coverage out there in lithuania. that's maria tadeo who has been covering nato for us all this week. in other european politics news, judge finance minister -- the dutch finance minister will step down as the leader of the second largest political party in the netherlands, citing threats from conspiracy theorists and right-wing extremists. that decision comes out of the wake of the surprise announcement earlier this week that prime minister mark rutte is leaving politics after his coalition government collapsed over infighting over migration policy. let's get you set up for the rest of the day. at 9:00 a.m., we will get an iea monthly oil report. at 11:00 a.m., u.k.'s obr report on fiscal risks, with a press

conference half an hour later. we got home buying figures, a lower levels of those willing to buy. 1:00 p.m. we get u.s. ppi and jobless claims, is the pain in the labor market finally going to match inflation? in the evening, french president macron hosts the indian prime minister at a dinner in paris. we look at trade between the u.s. and africa and bring you the latest from that u.s.-africa business summit in botswana, next. this is bloomberg. ♪

dani: welcome back to "bloomberg daybreak: europe". botswana is hosting the four-day u.s.-africa business summit, with the u.s. showing renewed interest in the continent as it tries to counter china's

dominance. for more we're joined by jennifer zabasajja in denver own -- gabarone, what progress have we seen in terms of u.s. investment into the continent? jennifer: this summit is being positioned as a progress report on what the u.s. has done. back in december there was a u.s.-africa summit in washington, d.c. where the biden administration pledged $55 billion in investment but we didn't know what that was going to. the past few days we have heard more about those deals. there have been about 75 deals between the u.s. and africa, totaling what officials say is about 5.7 billion dollars. they are focused on what they call our shared priorities, things like energy access, health-food systems. also, a number of digital connectivity issues across the continent. the u.s. is really trying to

establish a renewed commitment that they have to this part of the world. we've been speaking to a few u.s. officials about what exactly they have done the past few days. take a listen to one official we spoke to yesterday talking about one deal from this week. >> we signed a technical assistance grant in south africa to strengthen their transmission grid using innovative technologies, ai, getting noble sources on the grid through energy storage systems. and looking at how to have cross-border training. jennifer: you can tell it's been very busy here, but she was talking about a deal with escom

which is the provider in south africa, the state utility provider. the u.s. is investing in helping that develop more with its own technology. now the focus is on how to continue this progress. but from an african leaders' perspective, how to enhance the value they get out of that. a lot of them have been talking about that benefication of resource rich states and how they can value investment propositions. a lot to pay attention to today and the next day or so. dani: this is a conversation you and i have had before, the amount of chinese money coming into africa to build things like infrastructure supporting african economies. is this a u.s. attempt to counter that, perhaps even russian influence? jennifer: it's fascinating

because no one is outright saying that when we're talking to people, but there is a lot of discussion about what is happening. as you mentioned, china has been a lender to this part of the world for a number of years. this appears that the u.s. is trying to reestablish itself after years and decades of not being here. so much so that we're seeing investments into things that people are saying are counter to china's belt and road initiative. i want to play one specific soundbite we talked to another u.s. official about, about what the u.s. is providing that other lenders have not. >> we're not trying to burden countries with projects that are bloated, or burdening the country with additional debt. we're trying to have sustainable financing for the private sector.

jennifer: scott nathan talking about the sustainable financing options that the u.s. is providing. not specifically naming china now or any other lenders in the past. but he was telling us how the u.s. is looking into committing to a hora door that could carry -- corridor that could carry essential minerals for the energy transition. at the same time, or just a few weeks out from the russia-africa summit where we will supposedly see a number of african leaders attending that. china is a major investor into a lot of infrastructure across the continent. without naming names out here, it appears that there is a bit of a tug-of-war happening at this point in time. but from the african leaders' perspective, they want to make sure they are getting the most out of any partnership they are setting out for. dani: jennifer, thank you so

much. it sounds joyful whatever is happening behind you there. our africa correspondent in the capital of botswana. coming up, brent crude trades above $50 a barrel for the first time since april. we will discuss the oil outlook as well as crude prices in russia, after they breached a sanctions cap set by allies. this is bloomberg. ♪

dani: brent crude closed above $80 a barrel for the first time since april yesterday. we're still above that level this morning. that's happening as softening u.s. inflation prompted optimism that the rate hiking cycle may be nearing an end, and as the dollar fell to its lowest level since last year.

let's get to our senior editor for energy and commodities. does this seem like the path of least resistance for oil to march higher? >> people have become more optimistic about the path of oil prices. the economic backdrop with inflation is more conducive to higher prices. the cuts saudi arabia made, taking a million barrels off the market, are starting to bite. we see expectations inventories will fall around the world but demand remains very healthy, and that's counterbalancing the supply buildup we have seen. there is a review that oil prices look firmer than they have done. dani: part of the dynamic is what is happening with russia's flagship oil. it reached that cap set by the seven nations, does this mean sanctions have failed? >> it shows russia has

successfully managed to export oil by bypassing western ships, insurance and banking but they are not allowed to access a prices go over the price cap. it means russia has successfully collated what is called a shadow fleet of ships, used its own insurance to get oil to the market, and that means the price cap is inviting right now but it might prove problematic because for many buyers of russian oil, especially india, they need a lot of finance insurance from the financial system and indian banks may be wary of deals above the price cap. it shows russia is working around the sanctions imposed by the g7 but it will be interesting to watch in the weeks ahead. dani: really appreciate your time this morning. that's our senior executive editor for energy and commodities. we will speak to the head of iea's oil market division at

9:00 a.m. the energy agency will be releasing its monthly report. while we're talking bout oil, an interesting dynamic has emerged. oil prices have moved higher, however after yesterday's cpi report -- and this is been the trend before yesterday's cpi -- one-year inflation expectations have dropped largely. we're back below 1% for one year breakevens. these two things usually have a pretty good relationship. if oil picks up enough, could that mean that the re-acceleration of inflation story comes back to bite? here's a tried to keep your eye on in the gtv library, but that's not the focus today, it is softer cpi numbers. the fx trade is where it is playing three or. the dollar swoon of the second

half is in. you get em and high beta currencies doing well. also the yen and the kiwi is accelerating some 0.5% versus the dollar, the yen, a lot of shorts being blown out, though the dollar is stronger versus the yen. the sterling did hit 130 versus the u.s. dollar yesterday. it has backed off a little bit. one trait is weaker dollar, the other is lower yields. that's a trend we continue to see throughout the morning. two-year yields continue to drop another three basis points this morning, yesterday they fell 12 basis points. the entirety of the curve was impacted by the cpi, because if cpi is lower maybe inflation will be lower into the future. australia picks up that trade, three-year yields come in by eight basis points, that is fantastic for tech.

as they futures up 0.3%, as hong kong tech searches more than 3%. the high beta trade is playing out today. the nasdaq announced they would be taking activision out of the index on the 17th, despite the fact we haven't had the conclusive end to the microsoft activision deal yet. up next, its markets today as they walk you up to the european open. this is bloomberg. ♪

>> this is bloomberg markets today. i'm anna edwards with stephen carol. >> here are your top headlines. markets go risk on. the fed is near the end