dani: good morning, welcome to "daybreak: europe" i'm critic of got in london.

brent crude hitting $95 a barrel since the november of last year things to a tight physical market. it could return to $100 a barrel. >> we are certainly moving in that direction. the momentum of supply is tightening. inventories are drawing. kriti: in asia, stocks falling on concern that global central banks will stay hawkish. this central bank kicking office two-day meeting today. in the u.s., the united auto workers union will begin its strike at the big three carmakers if no serious progress is made by friday. a lot of geopolitics and monetary policy will weigh on the data. let's check on markets because futures are fluctuating. you are seeing divergence between the europe pm story as well as the u.s. story.

not a ton of movement. this is why they emphasize the word fluctuation because take a look at what euro stoxx 50 futures are doing, not a ton of market reaction. same thing with ftse 100 futures although perhaps outperformance in the u.k. yesterday, the dynamic was flipped, the broader continent outperformed the ftse 100 so i wonder how much the technicals will play into today's trade as we wait for central bank decisions. in the u.s., it is a seriously down day. we are seeing sentiment from asia start to reflect and that makes sense as we see a lot of trading happening at the same time. cross assets is where you want to pay attention specifically when it comes to the ripple effect of oil. brent crude trading at $95 a barrel, higher by zero point 6%. the ripple effects are interesting because the two-year yield is not doing a ton but at 5.505 on the front end. the currency market is interesting because you are

seeing broad weakness in the dollar. the big strength is coming from the canadian dollar instead. how much of that is a reflection of the oil markets. you are seeing strength in the mix of -- mexican peso which is interesting since that has been the em super peso trade of the world. let's get more from stories that will be driving this market narrative. joined by valerie tytel in london, april in hong kong and oliver crook in berlin. the central bank decision is in focus as we talk about what is getting priced in. i keep hearing this phrase a hawkish pause. valerie: that is all about the language they reflect in the dots create a shift higher in those 2024 dots is the risk on the table for them markets. we see that in the front end yesterday, we crept above 5% on the two-year yield and maintained that a few sessions, because we see futures positioning in swaps hedging for

the likelihood that these dots will shift higher out into 2024. it is funny, because only last week we saw a lot of positioning for the fact that people thought there were going to be no more hikes from the fed this year. we were bearish on the consumer and when it came to the uaw strikes and the possible government shutdown. here we are again. we are trading near cycle highs all across the curve. the five-year is three basis points away from breaking new ties, the 10-year also three basis points away, and for 30-year is six basis points away from making new cycle highs. we are at those new cycle highs again, possibly a hawkish fed tomorrow to attempt those higher. kriti: if you're expecting things to be hawkish, already you are seeing sentiment pullback. ahead of every fed day, you get this pullback in assets and then

it is priced in. how much is priced in right now? valerie: we should note that two weeks beforehand, there was a different narrative when it came to how many more times the fed was going to hike. there was a lot of pessimism on the economy, and now we have flipped, but markets are fickle. when we get positioned, when we going into these dates, sometimes powell does surprise us. it reveals over positioning but that is a big question as we head into tomorrow. kriti: valerie tytel keeping us on our toes. we thank you for the market update grade i want to stick with that theme because asian markets will be a big part of that story. perhaps already pricing some of that volatility. april hong has that story in singapore. >> pricing in volatility that val alluded to. we are seeing msci pacific headed for another day of losses. stocks coming under pressure

with rising oil prices. the concern is that the inflation front and what these key central bank meetings later in the week will mean for global markets. they set the trajectory for the rest of the year. we are seeing japan markets coming back from holiday and underperforming the catch-up from yesterday. worth noting that we have seen the japanese banks rising amid speculation that we could see the bank of japan at some point exit yield curve control policy. i want to get you up to speed with developments from china, because the pboc chief in a rare meeting with foreign firms, as well as banks including j.p. morgan, and tesla, promising stable trade and improved business conditions to boost investor confidence prayed we also got positive developments out of country garden, getting that approval for u.n. bond extension, but our colleagues point out this is after several times of pushing back the boat

and after a sweetener was added. it seems investors are focusing on that more so than the approval that country garden got. positive developments in china not translating into positive moves in china markets. it is risk off overall in asia pacific. kriti: it is interesting that you talk about the exodus out of asia. i mentioned the pboc trying to keep investment within the mainland. avril hong walking us through the asian market story. we are waiting for monetary policy to shakeout. one story and the united states is having international ramifications. united auto workers representing three of the biggest carmakers in detroit. those negotiations are still going on. 150,000 workers are in the balance paid oliver crook is standing by in berlin. what are the latest on the negotiations? oliver: there were talks yesterday but not a huge amount of progress.

the biggest offer we got from the big three is around that 20-percent marked which the president of the union said is a no go. he did the rounds of the media yesterday. he went to msnbc and npr saying a lot of things that he said previously, but saying that the ball is in their court, that they need to come up with something better than they have put out. and if they don't come out with what he called serious progress by friday, they could expand those strikes. remember, we have less than 10% of the union currently striking across three facilities. this union has the power to bring the big three to a complete standstill in north america. kriti: you mentioned north america. talk to us about how this extends across that northern border. oliver: right now you have -- 60 minutes ago just about -- you have the contracts expire for the canadian union that works at the ford factory, they have two

engine plants, and they are currently negotiating to get wages and pensions, and guarantees around evs, which is the background music to all these conversations in the industry. they have been told to stay at their post for the time being. they are negotiating right now. the question is what does this look like going forward? these assembly plants make the v-8 engines that going to f-150s and mustangs, if those get dropped out, it will impact the u.s. market and consumers. you might not be able to get those cars and trucks. you can get a mustang at six-cylinders, but if you want a mustang, you want the eight. kriti: you lost me at six cylinder. let's talk about the margins when you talk about how much these vehicles actually cost. at the core of these concerns is how much these labor costs translate to the end price for the consumer. oliver: and what it costs for the company. there has been a lot of

numbercrunching going on. if you look at big three labor costs, it is about $66 an hour, that is not what the workers are getting paid, that is the cost to them. tesla which has no union labor, we're talking about $45 an hour. wells fargo crunched the numbers and said if you met all the expectations and initial request from the union we're talking about $136 in terms of labor costs for the big three at a moment when competitiveness is front and center. ford is losing billions of dollars this year on ev's read this is center of mind for everybody, including mercedes. the ceo in new york is watching this very closely. >> we have always kept lockstep with what is going on in the economy to make sure that. we watch that and we make adjustments as we go along. but at the same time, you look at how can we do things better, work in a smarter way, get leaner because cost competition

will not go anywhere. oliver: curve repetitive and front and center in the eu with ursula von der leyen launching that investigation into ev maker's in china. everyone in the industry, even the luxury end is paying close attention. kriti: you are talking about labor costs at a time when you compare wages and of the auto industry to the rest of the manufacturing sector and they are severely lacking. i wonder how much of that chair powell addresses in his policy speech tomorrow. oliver tackling cars and the united auto workers strike in berlin. we have a roundup of the top stories in today's edition of daybreak, all you have to do is type in dayb on your terminal. the santander structural overhaul we will get to in a moment, brent crude, and some comments out of the ecb all major themes you want to stick around for. coming up on the program, we look ahead to instacart's ipo.

the online grocery company's shares begin trading today in another test of investor appetite for new issues. how are private equity decision-makers contending with the global challenges in the dealmaking space? we will be live in paris at the ipem conference. all that and more coming up. this is bloomberg. ♪

kriti: welcome back to "bloomberg daybreak: europe." i'm kriti gupta in london. instacart priced its ipo at the top end of the market range, the second-biggest listing in a week. the grocery business sold 22 million shares for $30 each yesterday. at the top of its market range.

shares trading later in the u.s. session. running us for more is our equity capital markets reporter. it's a interesting time for ipos broadly, when it feels like arm starved to have people dip their toes back in the water, talk to us about this valuation because last year you had this massive plunge and now you're talking about prices at the top of the range, how did we get here? >> it's a fraction of the valuation they achieved in a funding round in 2021. worth noting that was at the height of the pandemic boom, obviously, and also, the tech boom. there was a lot of frenzy and euphoria back then. even though it is way lower than the $39 billion it had then, the fact that it is almost writing on the coattails of arm's success, which is the world's biggest ipo, it seems there is renewed investor appetite for companies going public. especially markey listings --

marquee listings. it already had boosted the range, so still worth noting that it managed to get a higher valuation than it had originally sold when it first launched the ipo. kriti: it's an interesting time for a broadly, specifically tech ipos. instacart is a grocery delivery business but it falls under the umbrella of tech. last week there was a turf war at nasdaq about who should hold this, and ultimately nasdaq was chosen because of that tech leaning that it has, talk to us about companies broadly that are already turning a profit. are they more likely to ipo? are we passed the arena where you can just be a tech ipo and not necessarily turn a profit yet? >> we definitely have turned away from that. that was two years ago. most companies could achieve

high valuations. that is no longer the case. most investors want at least a clear path to profitability. the fact that instacart was profitable last year is helping it a lot. whether it will continue to grow that and continue to live up to investors' expectations now. but it certainly seems that given the uncertain macroenvironment, and the continued uncertainty around ipos, because we still haven't had a fully fledged renewed market, it still needs to be solid companies that are turning a profit, or close at least. kriti: i love that you said a solid company. risk-taking is what i am curious about, specifically outside the tech sector. the tech sector will have more beta to it. what about companies like clavia or birkenstock that announced they are ipoing?

is there appetite for risk outside the tech space? >> there is appetite for risk outside the tech space. the tech space has obviously benefited this year from the rally, but it still remains -- investors are looking for companies that can generate cash that can survive well in a higher interest rate environment, given that rates will remain higher for longer. not just any tech company. obviously, defensive sectors will still remain popular with investors. it is more about them being selective with the tech companies that they seek to back. obviously, arm is a leader in its field. clavio and instacart as well. kriti: with it is good enough for softbank, it must be good enough for us. i imagine that is some of the thinking behind some of these ipos. let's look at some other corporate stories we are following today. because there are a lot on deck. i want to start with banco

santander. it has overalled its corporate structure, combining parts of its retail and wealth banking business is great a new consumer digital bank. the ceo says it will simplify the business. the move will probably trim management layers and result in some job cuts. but stick with that theme. citigroup saying something similar. the restructuring last week will eliminate layers of management as well. this time, focused on very specific regions. the newly appointed chief client officer david livingston told us the job cuts are needed to simple five the bank's structure. the rules of thousands of back office workers are under review. in the private equity space, two firms are suing morgan stanley for at least $750 million claiming they were defrauded in a deal to invest in a luxury high-speed rail line. they allege that the bank unlawfully restructured the deal. the firms invested in a loan to

accompany developing a rail line between los angeles and las vegas. coming up on the program, companies are making big bets thanks to rising geopolitical tensions. today's big take dives into how foreign direct investment is being shaped by politics. that conversation next. this is bloomberg. ♪ with the ultimate pool party essential. blendjet gives you ice-crushing, big blender power on-the-go, so you can soak up the sun with a frosty beverage. enjoy 15+ blends before rapidly recharging via usb-c. and it even cleans itself with a drop of soap and water. stand out even when you're accidentally twinning with our kaleidoscope of colors. make this summer the coolest ever. order yours now from blendjet.com.

>> the demand is good. you have seen there is tight supply and demand. prices have gone up the last couple of months, etc. the chinese theme is they are producing and there is demand for their steel. kriti: the rio tinto ceo speaking to bloomberg television. an interesting dynamic as we talk about the readthrough

between the help of the chinese economy and the broader appetite to invest their. the rio tinto see him says there is -- cs has there is plenty of appetite. we'll see if that holds true as world leaders gather again at the united nations. new data shows that geopolitical division is starting to shape corporate investment. let's dive into today's big take. she has a senior economist at bloomberg economists. when i think economics and the venn diagram of the two, i think of church and state, and how hard it was in theory to divide the two when ultimately governing. i feel like it is the same concept being applied to geopolitics and business. how do you factor geopolitics and business when in theory they should be separate? >> when you think about business, if you think about

risk, you think about where you want to invest to have the best return and the lowest risk. that's exactly what businesses are doing. when you look at companies, to word geopolitics comes back very often. it is on every businesses' mind at the moment. we looked at the data to see if it is actually affecting direct investment decisions, and we think it is. kriti: how do you determine who the winners and losers are? immediately when i think of geopolitics, the immediate loser i think is china, simply as a function of the exodus of funds. on the other hand, you have the likes of elon musk, jamie dimon and bill gates making trips to china from the u.s. side, how do you delineate? >> it is a difficult exercise. we have used the u.n. vote on the decision to condemn russia's

invasion of ukraine or not. clearly, that is a geopolitical defining moment of the last decade read it has crystallized some tensions in geopolitical relationships. on one side, we have companies who decided to condemn russia's invasion of ukraine. on the other site, we have companies which decided not to condemn russia's invasion of ukraine, that's mostly russia and china, but also india and vietnam, for instance. we looked at where the new flows of investment for new projects were going in 2022. we found that those countries who didn't condemn the invasion of ukraine used to receive about 30% of the global flows of foreign investment in new projects in the 2010s. in 2021 and 2021 and 2022 they only received 15%.

so, if a flight a shift is -- looks like a shift is happening. the big loser in terms of investment is china. who used to get 10% of global investment close and got 2% in 2022. kriti: when you mentioned russia, my first thought was take a look at the hit from france and italy, and some of the regional interconnectedness that you saw. it ended up suffering substantially, but the follow-up takes longer. how long does the fallout take to manifest? >> those investments take time to come online. it will really depend on how things develop from now. 2022 was a special year for china, they were still under zero covid, so we will see what happens next year. but we are already seeing tight flows shifting, and this will only intensify in the coming years. kriti: truly interesting

dynamics to witness month by month, at least post-pandemic. maeva walking us through that story. today's big take is available on your bloomberg terminal. check it out on bloomberg.com. i want to bring you other stories we are following today. a cloud security company discovered that microsoft's ai research team accidentally exposed a large cache of private data. they found it hosted on microsoft ai's training platform via a misconfigured link. it includes microsoft employee'' personal computer backups and passwords to microsoft services. sticking with the corporate theme, elon musk says the wall street journal report on tesla and saudi arabia holding early talks about an ev factory in the country are quote, utterly false. sally has been trying to attract tesla with the right to purchase

certain minerals and metals from countries such as the drc. we talk about commodities and the intersection between commodities and how easily american companies can access them off the theme that maeva was talking about, this divide in geopolitics brings up the question of rare earth minerals. the chevron ceo says crude at $100 is on the horizon as supply titans. we will bring that conversation. this is bloomberg. ♪

kriti: good morning, this is "bloomberg daybreak: europe." i'm kriti gupta in london. rent crude hitting $95 a barrel

for the first time since last november. all thanks to a very tight physical market. the chevron ceo mike wirth says it could return to $100 a barrel. asian stocks falling on concern that global central banks will stay hawkish. the federal reserve takes off its two-day meeting, the first of a flurry of rate decisions around the world. united auto workers union warns it will expand strikes at the big three u.s. carmakers if no progress is made by friday. let's check on the markets because everyone is in wait and see mode for central bank decisions around the world, most evident when you look at futures trading right now. european stocks perhaps taking some of that sentiment story from asia. similar story in u.s. futures. the real outperformer is the ftse 100 but not by a ton. i emphasize this because in yesterday's trade, the ftse 100

underperformed the rest of the continent, today the inverse. normal ahead of a flurry of central bank decisions in the back half of the week. as will we be watching the commodity picture. brent crude at about $95 a barrel, inching closer to $100. this doesn't speak to demand and has more to do with supply. this is a physically tight market. the ripple effects are interesting because it is not showing up in the bond market, which tells you the bond market is not pricing a commodity-led rally in terms of yields. it is more evident in the fx market. the canadian dollar and mexican peso is where you are seeing more volatility. as our a lot of the ripple effects into the asian market, the japanese yen will be reacting to this closely. for an update on how markets are faring, let's go to avril hong in singapore. she has the story.

>> ripple effects indeed. we are coming into this week we were already on edge on those key central bank decisions. with these rising oil prices, it looks like asia-pacific stocks are headed for another negative session. the worry is that inflation is still a big concern, could turn out to be a bigger problem, and this could shape monetary policy going into the end of the year. so, it is risk off. perhaps unsurprising we are seeing energy stocks rising in the region. bucking the trend, as are some of these japanese lenders. financial institutions are doing well as they keep an eye on the boj decision. any potential clues on what we will see out of monetary policy from the gentle -- if any central bank towards the end of the year and the first half of next year. let's look at chinese markets. the pboc chief in a rare meeting

with foreign banks and firms, talking about promises to stabilize trade and improving business conditions, trying to boost investor confidence. but given the concerns about china's growth missing the mark this year, the concerns about the real estate sector that might not be moving the needle very much. neither are those positive developments out of country garden getting approval for their yuan bond extension. our mliv colleagues pointed out that investors are more focused on the fact that this vote had to be pushed back several times. there was a sweetener added to before they got any of that. so, it looks like these positive developments not moving the needle in chinese markets that much. and the investor focus is really on the central banks' decisions. kriti: it's going to be fascinating to see what they put the emphasis on. in the u.s., labor strikes, in

japan is if the oil story? we thank you, as always. i want to stick with that oil emphasis. we all already seeing warnings from big players. the chevron ceo saying oil prices could soon reach a $100 mark thanks to tightening supplies. he tells bloomberg he is confident the global economy can withstand such a price spike. >> sure looks like it. we're certainly moving in that direction. the momentum of supply is tightening. inventories are drawing. these things happen gradually and you can see it building. the trends would suggest we are certainly on our way. >> good morning, it's a guy in london, what impact do you think $100 a barrel will have on the u.s. economy? what impact on the global economy? >> those are higher prices than we tend to see over long-term.

it will have some effect on the economy, but we have had relatively higher oil prices now for most of this year, certainly all of last year. the recession everyone has been talking about hasn't arrived. the underlying drivers of the economy in the u.s. and frankly, globally, remain pretty healthy. it is a drug on the economy but one that thus far it has been able to tolerate. >> are these higher prices sustainable for the longer-term? >> we take a long-term view on supply, demand, policy, technology. we haven't changed our long-term price. we don't change that very often. and not in response to short-term. we have been in a volatile market going back to the pandemic, this has been a period of time where prices have been unpredictable, and not what you

would call midcycle. >> if i worked for mike wirth, with this be my cue to say can i have a pay arise, please? >> i think you're referencing different parts of the world. we have seen organized labor in many different industries now kind of assertively step forward and say we want to be compensated. we see the inflation in the economy. we have seen companies recover. we had a strong pay program last year for employees. we tried to stay competitive. i expect we will continue to do so. >> that is guy's way of getting into this right action in australia. cargoes have not been impacted, you are using nonunion workers, is there a point where that would change? >> we hope what we will see is a negotiated agreement. others in australia have reached

agreement with these unions. we have been at the table bargaining in good faith. kriti: chevron ceo mike wirth there, at least guy attempted to get an answer about the strike action around the world. let's get more on the physical commodity. brent hitting 95. also barrel earlier in the session -- dollars a barrel earlier in the session. stephen stapczynski joining us from singapore tracking this action. last time we were at $100 a barrel, we were talking about unclenched demand. everyone wants to take a road trip in the u.s. everyone wants to do the exact opposite of covid. this time, feels like the exact opposite. this is a supply story, but why? stephen: this is a supply story, certainly, over the last few months. there has been a change in tone in the oil market.

things were quite bearish actually. just when summer was starting. but saudi arabia and russia began to cut their production. earlier this year, they said they would cut production by one million barrels a day through the end of the year. they are doing this because they see it as a way to balance the market, but what it has effectively done is drain inventories around the world, and cause prices to rise higher. at the same time, you are not seeing a huge rebound in revenge traveling like you said earlier. the economic picture in the united states and china may be looks rosier now than it did a the months back. we were talking about recessions before. and china's economic recovery, while not as robust as some people thought would have happened by this time of year, the numbers coming out of china are still pretty strong. that points to strong consumption going into the fourth quarter with a deficit.

which means there will not be enough supply to meet demand in the market. that's going to be a problem for some refiners and companies, so they are buying up supply now, and that is driving prices higher. kriti: interesting that you talk about this driving prices higher, civilly because of the volatility we talked about, but the ceo of chevron underlined we went from the war in ukraine to revenge traveling. that kind of volatility in the oil market. talk to us about the oil market plumming here. i am worried we will not see exposure from macro funds that are trading this everything obey. do you see a pullback in open interest, for example? stephen: there had been an increase in open interest but that could go away. when volatility comes into the market and things are not as predictable, when you see large swings and prices get higher,

you do have margin calls that can be pretty difficult to deal with. especially if you are not looking at crude everyday. there is also an issue where crude isn't always driven by what you see in front of you. sometimes it's geopolitical. sometimes, opec+ makes a decision unilaterally that does something to the market. or your view on the chinese economy is it what you would normally think. as oil marches higher, those people, funds, folks trading crude oil will be under pressure . especially if you see a wild swing one way or the other, that might result in some folks of course leaving the market. the picture for oil isn't 100% clear to be honest. you will maybe see oil hit $100, will it stay there? maybe not. next year, you could see shale drillers come back and take advantage of this price increase, filling in where saudi

arabia and russia left. looking long-term, the outlook for oil is more difficult with the energy transition as china rapidly shifts to ev vehicles. that makes predicting oil after this year difficult. kriti: stephen stapczynski, everybody. you can throw anything at him and he will have a brilliant answer. he talks about the changing dynamics in the oil space. then you have to factor in the ev and lithium part. we go from macro to micro. how are private equity decision-makers talking about global challenges, especially when you see a slump in dealmaking? we're live in paris at the ipem conference next. this is bloomberg. ♪

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kriti: welcome back, this is "bloomberg daybreak: europe." i'm kriti gupta in london. it has been a tough year for dealmaking with geopolitical tensions and recession fears taking their toll. we now go to that ipem private equity conference in paris to learn how players in that space are seeking out opportunities. dani burger is in the french capital and joins us now with an interview. >> that's right, we're here in paris at the ipem conference. i'm pleased to say i am joined by antoine flamarion, the cofounder of tikehau, the private capital firm. great to speak with you in person. we are in a bar early in the morning but we are feeling a little joyful today. last time we talked, you talked about a vicious cycle coming from debt. is there a reason to be optimistic? antoine: good morning, thanks

dan eight for having us. i will try to be super optimistic because it is tuesday morning very early in a bar. you are in a cycle change. interest rates are going through the roof. there is inflation for the second time you have that bond trading at under $.50, we are optimistic about the cycle change and that we are entering a new era. >> what does that new era look like? antoine: inflation is still massively there. interest rates will be higher for longer. there is no doubt. recession is coming, the question is when and what magnitude? on the other end, there is a lot of opportunities in new sectors. the energy transition, for instance. new opportunities but it will be super bumpy and last, liquidity is drying up. dani: when it comes to interest rates, we heard from villeroy of the ecb saying rates should be held at 4%, in other words no

hikes. or does the ecb need to do more to combat inflation? antoine: we have to be objective and it is difficult for central banks to follow the path. we have been very wrong on inflation. yesterday, everyone was quoting inflation without food price, without energy. inflation is inflation. especially for people. we have to be objective. inflation is there and there is no doubt it will be there for the long term and probably more hikes are coming. dani: i love that you say that. after every inflation report, someone says if you look at inflation ex-cars, it is okay. we have brent going above $95 a barrel, how do you think about energy inflation for your portfolio? antoine: it is impacting our portfolio. very early we tried to invest

massively in energy transition, but we still have a lot of traditional companies, and they are impacted by the energy price . hopefully there is no more trouble around the world because that accelerates the energy price. dani: not that you directly invest in them, but you interact a lot with the big banks. socgen announced yesterday a new plan to cut revenue and profitability. the market did not like it. it sent shares much lower. they are big presence in paris. antoine: the banks are going through a massive transformation. this started 20 years ago and then the 2008 financial crisis happened. the entire financial market had to adapt and change. if you look at the last few months, citibank announced a massive change in their plan. same for goldman sachs. socgen announced a plan yesterday which sounds conservative.

but conservative delivers better. the world changes fast, so you better be conservative and surprise on the upside. when people look at the number, they published a 200 million target for their online bank. nobody realized socgen has probably one of the best fintech in the world. people will digest that. people are saying what's going on, but the world needs some changes, but it is happening for the good. dani: post-svb and credit suisse, six months on, how much confidence do you have in the global and specifically the european banking system? antoine: post the crisis it is superstrong. from time to time you can have liquidity issues. that is what is happening with credit suisse. it is important to be humble. the system is solid. with interest rates higher, that

will help the bank. it takes time to adjust but when it is fixed more or less, banks are in better shape. dani: one complaint we heard from jamie dimon post-svb is more regulation. he said you and your private capital appears will be dancing in the street. more lending will happen outside of banks and in capital markets. have banking regulations help to you? antoine: the framework is changing, especially after 2008. all these private capital firms were small, tiny firms. blackstone probably in 2009 there market cap was $5 billion, now it is more than $100 billion paid the world is changing especially in the financial area. there is more space for people like us. we discussed liquidity. there is more need for companies. for private capital players, there is a massive opportunity. regulators are trying to regulate more and more rate is it good, is it bad, it is

happening. but the opportunity for private capital providers is gigantic. not only because of regulation but because the framework is changing. dani: on the liquidity point, we have gone 500 hikes from the fed, from the ecb we have gone from subzero to zero in we have gotten here. we have had svb that is a big, but, liquidity has been, tight but available, are we going to get to a liquidity crunch? antoine: when you look at the quantity of money, when you look at central bank balance sheets, now it is declining for the first time in probably 15 years. central bank balance sheets are declining and there is a consequence already. there is less liquidity in the system. from the top, there is less liquidity, and at the bottom people, companies and governments and it is more difficult to borrow money. it is more difficult. the liquidity crunch already started.

it is going to only change when interest rates and the central bank cycle is changing. the liquidity issues will be here for quite some time. dani: what does that mean for companies? antoine: more difficulty to borrow money. so then, they will turn to private capital, probably some defaults. unfortunately, defaults are coming. but then the world will adapt. i think liquidity crunch is coming. there will be default. dani: we will leave it on kind of a bright note. kriti, i will throw it back to you. that is the cofounder of tikehau . kriti: dani burger in paris bringing us a little joy this morning from the private equity space. these are just some of the names she will be joining us with from the antoine flamarion private equity conference in paris. we will hear from blackstone and

axa.. the ecb reportedly looking how to discuss the multi-trillion euro pool of excess liquidity in the banks. we dive into that story next. ♪

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kriti: i'll come back. this is "bloomberg daybreak: europe." i'm kriti gupta in london trade let's check how markets are faring. as a way for central banks, a hanger from the ecb yesterday. valerie, the very first thing that stuck out in terms of commentary from the ecb was from the bank of france governor, villeroy talking about 4% staying there when the market is talking about those liquidity concerns. valerie: we have had a lot of chat out of the ecb since that meeting. a lot of it pointing to the fact

that the hawks aren't entirely happy that lagarde gave this signal that they are done tightening. we have this article in the reuters news line yesterday talking about the possibility of raising reserve requirements to tackle excess liquidity. we heard from casimir about the debate on qt pace. the hawks are looking for ways to tighten policy without having to hike rates again. we saw the euro strength and off the back of that. i want to touch on rents and what has been going on in times spreads. a lot of front end contracts rose above one dollar a barrel for the first time since november which doesn't sound like a long time, but it has only happened three times in the last 15 years that those have gone above one dollar. those brent times spreads are creeping tighter, singling that the market is tight when it comes to oil. i want to touch on treasuries read the entire curve again

breaking new cycle highs. fives, tens and 30's around five basis points from breaking new cycle highs. kriti: valerie tytel walking us through the major charts we need to know at the morning. we are going to be watching closely what brent crude does. that's top of mind. bringing to our attention a major topic on the next show. anna edwards, mark cudmore and tom mackenzie will take you through the major market themes you need to know. stick with us. this is bloomberg. ♪

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. anna: this is "bloomberg markets: today." i am anna edwards with tom mackenzie and mark cudmore. the headlines this hour. tom: