dani: good morning and happy friday edition of "bloomberg daybreak: europe". i'm dani burger in london. u.s. inflation reading, but san francisco fed president mary daly says the bank has more work to do to combat rising prices. country garden a penny stock after the largest property developer expects multi billion dollar loss for the first half of the year. ubs has repaid the credit suisse liquidity assistance in full, and is voluntarily ending the 9 billion swiss franc government protection. ubs confirming not only that they are not going to use the backstop, they are not using the safety net given to them by the swiss government. they are saving -- saying, take away the safety net. the first part was they have terminated the 9 billion swiss

franc loss protection agreement. this was the backstop they needed to guarantee that they would acquire credit suisse. second, they have terminated the public with quiddity backstop by smb, that was up to 100 billion swiss francs. the third point is they have fully repaid the emergency liquidity assistance plus loan. that was 50 billion swiss francs to the smb as of yesterday, 10 august. we have heard ubs saying these guarantees, we needed it to do this deal, but we're not going to use them. they have officially confirmed, not only are they not using them, they can't anymore because they have terminated the agreement. it's a sign of confidence that ubs is trying to project. we will get a read on the premarket session for that in an hours time on tradegate.

let me show you the past two days. if you had gone to bat yesterday before the pi report -- cpi report cannot, you would assume it came out hotter than expected considering what treasuries had done. we got the initial relief rally immediately after cpi, that's the pop in the middle of the screen, but as trading went on throughout the day not only did we reverse those positions. we really continued on this narrative that perhaps the inflation reading wasn't enough. we were happy to reload on bets of a reseller and of inflation -- re-acceleration of inflation. futures in the cash session yesterday, you can see that pop on the cpi report, then we quickly unwind that. at some moments yesterday we were in the red.

but we're now looking at a decline. now let me show you what we look like for the china session. it is gloom in china. we're back from the lunch break for the csi 300. is trading lower by one and one third percent. alibaba is back to growth for the first time in a year. but some gains have been petering out, dragged by overall gloom. a lot of it has to do with property. on that note, let's get to our morning roundtable. joining this morning is valerie tytel, lizzy burden and we're joined by rebecca choong wilkins. let's start on the china story. rebecca, i'm going to pick on you. country gardens' decline has been incredible to the point where it is a penny stock. it is down 15% today but that is

only a move of $.10. these mounting concerns that it will default, how prominent are those concerns and what would be the global ramification? >> that is really the big question. it is an extraordinary decline for a country like country garden. even though so many of its peers have already default it, it survived all that two years. when i reported on country garden three years ago it was china's largest developer by sales, it is still the sixth largest by sales, four times more than evergrande. it is a major player in china, and if we see default, analysts have warned it could do more damage than when evergrande failed to make that payment in 2021. there are a couple of reasons for that. the first is we have seen so much pain in the real estate

sector. sentiment has been damaged and has weighed heavily on economic growth. property a significant engine of economic growth in china in the past. the second element of this is denting sentiment. at a time when beijing is trying to restore confidence in this market. it wants to convince its middle-class to come back and start buying property again. we have seen them struggle to restore faith. we've spoken to homebuyers who all they want to do is sell that two or three properties but they simply cannot find any buyers so there is a limit norms amount of tension here. lizzy: it feels like this has entered the global zeitgeist in the past few days, that we realize the risk is not just to china but one to the entire globe. even president biden has talked more about the chinese economy, calling it a ticking time bomb.

those are harsh words, what does this do to tensions with china? rebecca: i'm going to call them politely very exuberant comments that president joe biden has made to a, audience it is worth stressing. it also a series of comments that were in some ways quite inaccurate. for example, saying its retirement age population is larger than its working age population. which is off by several hundred million folks. but that aside, the sort of gaffes have threatened to undermine that attempt to reset, or stabilize the very best ties with china. it's almost a bigger shame, because when we saw this executive order earlier this week, that was very targeted, quite restricted. more a kin to something beijing would be hoping for if the u.s.

were to roll out any curves at -- curbs at all. really hawkish comments but on the other hand slightly conciliatory comments make it difficult for beijing to adjudicate its responses. dani: bloomberg's rebecca choong wilkins. let's continue the roundtable. the top story yesterday is one of the top stories today. it is the impact of u.s. cpi. month over month core coming in at 0.2% for a second straight month. the initial reaction was of relief, but many folks including san francisco fed president mary daly trading and saying the job isn't done yet. >> it's also consistent with what we believe will be happening, which is inflation will gradually make its way down. but it is not a data point that

says victory is ours. there is still more work to do and the fed is fully committed to resolutely bringing inflation back to its 2% target. dani: valerie, let me bring this one to you. there has been this large debate unfolding, is this enough ammo to confirm we are headed to disinflation, >> vol completely collapsed on the front-end, which is a good thing for risk. if you look at how the cuts priced into the front end are still pricing a 15% chance of that december cut, but you are right the market reaction was confusing, especially because that core number at 0.2% is a good sign. if you really dig into the details, the really good sign was that the housing component, which we know has lagged, is quite high. we're having success on

inflation with that housing component yet to retrace that much. we know it will be on a downward trajectory because the way the bls collects that housing figure is 12 months lagged. dani: it didn't take long for the market to do that either. a lot of the narrative centered around what will it take on the growth front for that officials to -- fed officials to accept that disinflation is happening? does that mean the growth data becomes more important from here on out? valerie: that is the conclusion i take from how the market traded yesterday. we really need you see weakness in growth to get this bond rally we have waited for. the market is very distracted by this government spending balloon we're seeing. there was data out from the u.s.

treasury yesterday that showed the u.s. deficit is double what it was a year ago. this is coming with a strong economy and unemployment still very low. those risks to the market are tilted to more focus on the fiscal side. the risk that inflation stays stickier for longer is possibly because we're headed into an election year, and governments like to spend during an election year. that kicker could keep inflation higher for longer, and the fed having to hold rates higher for longer. dani: did you see biden yesterday calling it the inflation reduction act? definitely not reducing inflation, val. iran has moved four u.s. citizens from prison to house arrest as part of a potential swap. lizzy, what do we know?

lizzy: the semiofficial news agency in iran tasnim has said these four citizens will be freed in exchange for two things. unidentified iranians detained in the u.s., but also want $6 billion in frozen funds that south korea owes for purchases released. as you can imagine, the criticism that any giveaways will invite from republicans. secretary blinken says he has the confidence the judicial system will make this happen. >> this is a positive step, but i don't want to get ahead of its conclusion because there is more work to be done to get them home. my belief is this is the beginning of the end of their nightmare they and their families have experienced. lizzy: these financial transactions are complicated, but officials expect the final

transfer of money and the release of detainees to happen in the next month or so. dani: those are our top stories of the morning. it's look at the trading day. 7:00 a.m. trading day we get you second quarter gdp. the important readout will be the june data, because a lot of the rest of that will be backward-looking old news by this point. at 1:30 p.m. u.k. time, we get more u.s. data, will u.s. ppi confirm some of the disinflation trend in yesterday's data? 3:00 p.m. u.k. time the university of michigan sentiment survey. not only a disinflation trend but is not reflected in the sentiment survey? lizzy, what are you expected from the gdp report? lizzy: stagnation is what economists expect. the bank of england sees 0.1% growth, but it is better than what economists were expecting earlier in the year.

the flipside of that is persistent inflation, so the market and economists expect rates to continue rising and to weigh on growth. dani: u.s. data, what are you looking out for? valerie: both u.s. inflation expectations and ppi could show impact of higher energy and oil prices. prices at the pump feed into consumers' inflation expectations, does that show up in the umich data? we see a rise in goods inflation in the ppi? we didn't get that in the cpi, but it could show it's had more in the ppi figure today. dani: 40 inflation had a record decline -- toy inflation had a record decline. this lizzy burden and valerie tytel. you can get a roundup of all the stories you need on today's

edition of daybreak. terminal subscribers, dayb on your terminal. we will dive into everything from chinese property developer country garden's woes what it mean for the world's second-largest economy. ♪

dani: back to breaking news. in the past 30 minutes, ubs says it repaid the liquidity assistance in full, it is repaying the 9 billion swiss franc loss protection. when it comes to the public liquidity backstop, that is 100 billion swiss francs that it is voluntarily terminating that loan. there is also 50 billion swiss francs. for more, leo, first of all, why did ubs do this? >> this was an early morning shock. it's the middle of summer and we're getting this news at 5:45 london time. ubs had a close look at kd s wiss's non-core assets, the portfolio they want to wind down

, instead it is not as toxic as we thought it would be and decided to tell this was government, we won't need your help. this is important for public sentiment about this deal because the taxpayer shouldn't be guaranteeing a bailout for this major bank. dani: there was so much of that criticism after this deal happened to the point ubs said we're not going to use it. it's not there anymore, is that part of the point of this for ubs? >> i think so. it was important for them to get this out of the way before they report earnings, it is delayed until the end of august. it was important to make that point ahead of earnings, and to assure investors. dani: how much of investor sentiment around ubs has been worry around the portfolio they have taken on from credit suisse? >> the past three or four years

we have been so many bad surprises with credit suisse's portfolio. it was really important to tell markets that it's not as bad as it seemed before. dani: there is some irony for credit suisse ex-executives saying we would have survived. what about the pot that could have been used, no longer going to be used? >> it looks good for them. for many people in switzerland, not just the government, they were disappointed the first half of this year and their confidence was shaken by those events. the government would've had to take responsibility for part of it because they broke up the deal. now not having to backstop ubs and mitigate the losses from

credit suisse is a good sign for this was government. dani: look, this huge, now 3even huger swiss bank is crucial to the economy if something were to go wrong, so taking some comfort from that. the quick turnaround on that breaking news 30 minutes ago. we will have plenty more ahead. this is bloomberg. ♪

dani: what an interesting summer market this is shaping up to be. we had cpi data yesterday that confirmed a softer inflationary environment. 0.2% month on month for core inflation. this is what happened yesterday,

it's hard to see the yesterday reaction but we had a bear steepening. it came back with a vengeance, with the long end slumping more. that's what we got with the steepening, then the stock market did not like it. any gains, any relief rally we initially had in reaction to softer cpi data was also unwound. being bullied by a steepening yield curve. let's get to the man who made this chart, mliv strategist garfield reynolds joins us now. it's in today's five things. what you make of the bear steepening reaction to softer cpi data? garfield: it underscores that bond investors are getting concerned that u.s. inflation has showed good signs, but there is still a long way to go as the fed has been stressing. with that, we have dangerous

clouds on the horizon -- that have already come over the horizon. the increased issuance yesterday because a lot of problems with the 30-year sale. also, all these rumblings with goods inflation potentially picking up again because commodity prices are rising. at the same time, you've got persistence in services inflation. we all know the jobs market has proved extremely resilient. but that's a key point for the fed and the chances they stay higher for longer. the final storm clouds speaking of the fed, is the potential the fed accelerates quantitative tightening. all of that speaks to the potential for yields to go higher, in particular at the long end.

at the short end, yields have gone very high but there is an acknowledgment that the fed will not go much higher, so there is not much of a driver for short end yields to go up further. neither is there impetus to come down. interesting, when rates markets are still betting on fairly strong rate cuts in 2024. dani: starting the first few months of next year, those cuts are priced in. when we talk about a financial accident that could potentially derail the fed. is there a potential that country garden could be it? or if not it, maybe the property sector in china, is it fair that this is a global concern? garfield: so far, i haven't seen a lot of people saying that could really be the case.

although there is a lot of concern about country garden. for one thing, it is evoking memories of evergrande which we all remember as a major catastrophe in the chinese property sector. that catastrophe really hurt the global market because there were so many foreign owners of evergrande's bonds. country garden ing group bonds don't seem to be quite as big a flashpoint, but the company itself is a bigger concern. it feeds into growing concerns that emerging markets in particular might not have a strong rebound economically as maybe expected. that's a key part of the picture where investors had been hopeful -- remain hopeful, i would say -- but the global economy will not be hit by a wave of recessions. because even when advanced economies all forecast slowdown

markedly. especially those in europe. in that environment, you need someone else to pick up the slack. it's not going to be china now, china it looks like is going to be adding slack, and country garden is just reinforcing that message. dani: we did just get some lines crossing. we knew china regulators would be holding meetings with property firms. we have heard from china local media that they have met, and have discussed sales and that situations of real estate companies, and suggestions for refinancing. garfield, thank you very much. we will have more coming up on bloomberg. ♪ every business deserves a great deal. that's why comcast business is launching the mobile made free event. with our business internet, new and existing customers can get one year of unlimited mobile for free. it's our best internet. powered by the next generation 10g network and with 99.9% reliability.

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dani: good morning, this is "bloomberg daybreak: europe". i'm dani burger in london. ubs has repaid the credit suisse liquidity assistance in full and is voluntarily ending the 9 billion swiss franc loss protection. san francisco fed president says the central bank has more work to do to combat rising prices. country garden trades as a penny stock, after china's largest property developer expects a multi billion dollar loss for the first half of the year. chinese stocks weigh on asian equities. ubs saying it has repaid the credit suisse liquidity assistance in full, and is voluntarily ending the 9 billion swiss franc government loss protection. for more, let's get to francine lacqua, anchor of the pulse and ours was making expert. is this strange timing for them?

francine: i thought it was strange because a lot of people are off. it's august, so a lot of people are reporting numbers on august 31. that's when we're expecting an update on how the merger is going. they are doing this 20 days before, so you have to ask is this really a sign of confidence? saying we went through the numbers and looked at what credits we suisse bought. questions about the investment bank in the u.k. that could have looked ugly. maybe it is about the fact that it is not as ugly as it could've been. they are thinking so much mr. government, i don't need your loan facility. it's a sign of confidence and takes them out of the political limelight, and that will be very welcome. dani: you have to feel bad for the former credit suisse executives who are like see, we could've survived. is there any degree to which

they were handcuffed by this agreement? even though they said they wouldn't use this backstop, its existence prevented them from doing what they wanted to do. francine: there is a question about what will happen to the swiss bank. there will be pushback, there is a sign of confidence, and it makes commercial sense even though at the time we didn't really have a choice. are they more free to decide what to do with the swiss universal bank, are they more free for job cuts in switzerland? possibly. there's also an election the 21st of october in switzerland. there was a feeling when you speak to insiders that ubs had become if not the main debate, do we need to spend more tax money? do they become more of a liability than they have been so far? and they didn't really want to be in that public domain. dani: where do we stand with the merger? francine: i'm impressed at how

fast this is going. we do have quite big news. it's driven by the chairman and chief executive. as soon as the former chief executive was replaced by sergio ermotti, i had a feeling that the chairman means business and they need to hit the right things quickly, because otherwise the markets turn. we spent a lot of time in asia trying to figure out what happens with senior bankers from credit suisse. but august 31, they will hopefully have the full vision and idea of where we are. dani: no one we would rather talk to about this then you. bloomberg's francine lacqua will be back in a few hours with "the pulse." let's look at where futures are trading. treasuries continue to sell off, despite initial gain after yesterday's cpi report, the pop in the middle of the screen. we unwound inflation

acceleration trades and then put them right back on. that's how we continue to trade this morning. same thing happened when it came to this equity market. first, a equity rally that quickly petered out for the session to end unchanged yesterday. futures are ever so slightly higher, but nothing remarkable. are we going to get the same situation? this summer lull where we see more volatility, but if we continue to selloff, is this the end of the bull market? connor sen said what we're seeing in terms of the inflation unwind isn't just the benefit of a one-time post-pandemic supply-side deflation in goods and shelter, or is it gdp you need to look at with growth running around 3%? the other side of this could be a 30-4% inflation. that is the nervousness with

which this market is trading. the csi 300 is dropping by the most in two months. down 1 1/3. country garden fears are alive. hong kong 80 yards yesterday following earnings, they have returned to growth for the first time in a year. we learned yesterday that chinese officials would be meeting with property developers, trying to get a grip on what is happening. that meeting, we were told, did not include country garden. but according to a local paper, we learned officials today met with china builders. and the debt situation. they discussed refinancing with builders. country garden still down about

5%, but keep in mind, this thing is now a penny stock so this is only a drop of 6%. a lot of volatility back-and-forth on your screen. let's get back to rebecca choong wilkins, our asia government and politics correspondent. the details according to this local report on this meeting seem scanned. -- scant. we stand in terms of property turmoil? how worried do we need to be? rebecca: any kind of collapse or default that country garden is a big deal. it looks like investors are very seriously worried about the risk. as you say, the stock a hong kong penny stock. the bonds are seven cents on the dollar, high levels of distress here. in part because the coupon payment that needs to be made is only $22 million area not an enormous amount of money but

there is anxiety that the property developers haven't been inclined to pay. what is worrying is two elements. people are worried this might precipitate a broader wave of people -- defaults in china's property market. after the evergrande default in 2021, the feeling was that wave of collapses was over and we were just dealing with the consequences. now we have had another couple of defaults by smaller developers. we might see a fresh wave of distress, let's worrying. second is the impact on china's economy. if china struggles to get growth going, that will have a ripple effect into the global economy. i don't see worries about lehman-style collapse the first time around with evergrande, but this issue with the chinese property market has been an

enormous drag on growth for china. the other element to keep watching is whether we see social unrest. after evergrande default it, we saw this wave of boycotts on payments. that prompted beijing to step in and ensure houses were delivered to people who bought them. country garden has four times as many projects as evergrande. the bulk of those in lower tier cities, so there is a lot of potential for homeowners to be impacted. that's where we will see beijing focus its attention. it's unlikely they will go in with direct liquidity support. they will be worried about managing that social unrest element. dani: rebecca, i feel like the market reaction is telling. i know we're in the doldrums of summer markets. sentiment was bad around property developers, we would rally.

maybe it is bad enough that we get government stimulus. then we hear about this reshuffling of local government debt, but it doesn't as wage -- assuage investors. have we thrown in the towel on big shock and all stimulus? rebecca: that's one element, dani: there is a moderation of expectations. the other part directly related to developers, is as far as we know, we have seen meetings between regulators in beijing and property developers. they often haven't included some of the most distressed players. that applies to this most recent friday meeting, too. that's historic in the other meetings we have seen. they doesn't seem particularly focused on providing liquidity support, instead just focusing on opening up financing channels for the stronger

players that are already deemed to be survivors. because of that there is a shift in how people are thinking about this. for the developers, too, if you are struggling at this time, you are not necessarily thinking about whether you can make this payment right now. you are also probably thinking about three or four years down the line, what does china's property market look like? is there a home for you after this sweeping crackdown from beijing? we see easing measures in top-tier big cities that investors so dearly want to see. but there is still this presiding question for many developers who are struggling, whether there will be a going concern for their business 2, 3, 4 years down the line. dani: really appreciate your time this morning. we will discuss the state of the

u.s. economy and the fed's hiking cycle after tame inflation data but the market decided to look past. and a look ahead to the u.k.'s morning gdp print. this is bloomberg. ♪

dani: we finally had the cpi data yesterday. it was cooler, and the presiding expectation priced into money markets is that the fed will lean towards a pause. we have been pricing in cuts in the first few months of next year. spring in resident economist, europe chief economist jamie raskin. - rush. it was a reaction of relief that disinflation is in place, then

we put the trades back on that we could have a re-acceleration of inflation. is there anything specifically in this report that would lend his hand? or are we looking at something else that might be concerning? >> the market is having a tough time working out how the data will feed into the decision, how it feeds into the reaction function of the fed. if you look at the underlying indicators in that report, we see two straight months where core inflation on a seasonally adjusted basis is consistent with the fed target. we have seen core goods prices coming down. basically, there's nothing in the report which points to a sustained period of reacceleration of underlying inflation. it means the balance of risks for the fed is changing. headline inflation probably in the right direction. there is more room to focus on

the impact of rates on the economy. dani: is there any not necessarily that the economic picture deteriorates, but the opposite, we continue to have gdp growth that runs above trend. we continue to have found employment tick down. and financial market conditions are kind of easy. it is in are not some way to look at those three things and say what has the fed actually done? and what we're seeing is just some normalization of post-pandemic dynamics. >> a fair point. the question is, is the fed going to respond by hiking rates further, or keep rates in restrictive territory? when core inflation is heading upward, the response needs to be urgent. it needs to be rate hikes. when you are sitting back to

hear what the impact of policy has been, trying to understand how fast the economy is expanding, what that is doing to wages, the pressure is to keep rates on hold as long as possible. and encourage the market to price out early cuts. that's more likely the area on which the fed will focus. try to undo some of that recent repricing in rates that shows loosening earlier than they might like. dani: you are talking to me about this dynamic of the conversation shifting from inflation to growth. it was also present for the eu and the u.k. we will get some u.k. gdp numbers, it is biased by its nature, backward-looking but is that also what you are looking for in these numbers to say inflation is one thing, but the vulnerability of growth is another? >> we have had a huge umoja policy tightening in the u.k.,

eurozone as we have in the u.s. the puzzle is why hasn't had a bigger effect on the economy? is it that it doesn't affect the economy that much, or we get all the impacts with a lag? that's what people at the ecb and bank of england are thinking. are we going to get a 4% hit to gdp because the impact of monetary policy happens with a lack? -- lag. survey data points to modest contraction in all economies in europe over the next quarter or two. of course, it could be worse. for the u.k., we're expecting stagnation for the second quarter, which means the economy stagnated a whole year. you might have worries the u.s. is going too fast. that's certainly not the case in the u.k. dani: thank you so much for waking up early.

enjoy the rest of your friday. coming up, we're going to bring you the latest on this week's top deal stories, including the most well read story on the terminal. oaktree is aiming to raise $18 billion for the largest ever private credit fund. that's next. ♪

dani: we've had a few interest rate decisions in e.m. countries the past few days. that includes india, peru and mexico. mexico and peru holding steady, but other nations have started to cut rates. among joined by our chief emerging-market economist. ziyadh, when you look at the decisions, let's start with

yesterday what did they tell you about the state of monetary policy in emerging markets? >> not so much yesterday, but overall if you look at the big picture, emerging-market central banks are switching the strategy from interest-rate hikes to cuts. we didn't see that yesterday, but we saw that in brazil a few days ago and in chile a couple of weeks ago where they cut interest rates read it is more visible in latin america where the policy rate is much higher than inflation, and currencies are holding up given central banks' room to cut rates. india, peru and mexico didn't cut rates the last couple of days, but our team expects the next active move to be a rate cut. either later this year or the first half of next year. dani: you and the team didn't expect them to move, but i was hoping they would do so when we joined we could say the cutting

cycle has officially begun everywhere. it is just delayed. we're also in this place where the fed has had its fastest rate hiking cycle since the 1990's and we're not sure that is done yet either. how did that impact emerging markets? ziad: surprisingly, large emerging markets were basically unscathed by the fed aggressive rate hikes. that is different from previous episodes. in the 1980's, when the fed raised aggressively, we had a default in latin america. in 2013, when they hinted at tapering quantitative easing, that caused massive turmoil in emerging markets. we have had places like india, indonesia and brazil among the fragile five. didn't get that this year, india, brazil, mexico and india were basically unscathed. the reason is they started raising interest rates before the fed more aggressively, and

that gave some protection. they have accumulative foreign exchange reserves. that gave them more immunity against fed rate hikes. that's not to say that all emerging markets were immune. smaller ones, places like egypt and pakistan were hit by the fed. they were rattled by the interest-rate hikes. these countries relied on foreign investors to come, benefiting from high interest rates. for the fed started offering competing interest rates at lower risk, capital fled from these countries to advanced economies. dani: perhaps the fed will give them some breathing room after that cpi report. our chief emerging-market economist at bloomberg economics. it's get to some of the most interesting deal stories this week. joining us is manuel. we have to start with oaktree capital management. it is one of the top read

stories overnight. what is going on with their private credit fund? it seems like we're squarely in the golden era of private capital. >> definitely, dani, the golden era. especially in the context of very difficult financing. we've got private credit coming the flavor of the month really for financing deals. a traditional area for wall street banks. now we see alternative asset managers like oaktree getting more involved into private credit. $18 billion more, that is the target for this new fund. depending on investor demand, that figure can still change but the reality is there is so much demand for this specific area of credit. but i wouldn't be surprised if that figure potentially

increases. which is interesting because we see a lot of alternative asset managers struggling to reach the target, particularly on areas such as private equity. we have seen a number of firms downsizing, or delaying fundraising. it would be super interesting to see how this plays out for oaktree. very well known in the area of distress for many many years. we will see how this pans out. we're spending more and more time. that's a rich figure, for sure. dani: not too long ago i spoke to the copresident of apollo, and i asked him is it a lot easier to fund raise for private credit? he said absolutely, if you can get 12% return on that why would you go to equity? some news on the telecom italia and kkr front. less than a minute here, but what did we learn?

manuel: this is the gift that keeps on giving. we have been following this deal for years. telecom italia which has been in dabbled trying to reduce debt now seems to make some really good progress on potential disposal of that network business which would allow the company to reduce its debt pile. they have reached a memorandum of understanding with the government and the deal seems to be progressing. dani: thank you very much. i will leave you for the hour, ubs voluntarily terminating its swiss law protection deal. it has repaid its loans. this is bloomberg. ♪