kriti: good morning and welcome to "daybreak: europe." i'm kriti gupta in london. the bank of japan leaves policy

uhanged weakening began. we will bring the headlines from governor ueda is a news conference. the bank of england takes a run of 14 straight hikes to keep rates on hold. the bank focuses on recession risks had a pmi data today. plus, energy back in focus. the strike actionipts in austria and russia bans exports of diesel and gasoline risking disruption to fuel supplies out of the winter. a lot going on in the geopolitical space. monetary policy driving the markets. the fed hangover continues. you are seeing that in futures. we are seeing that a both sides of the atlantic. euro stoxx futures will be a little bit this morning but not as much as they were the last couple of days. they're down 0.2%. the outperformer is actually u.s. futures which screams the fact that the idea that the fed hangover very much having a technical retracement effects. we had a lot of pain in the u.s. equity index and this is only

natural that we see a pullback on what the action was. 4.379 in those contracts. the bond market is crucial take a look at the yield curve which has narrowed. still negative territory down 64 basis points on the twos curve. significantly lower. the overnight session has already changed the dynamics in the bond markets. we will dive into that with valerie tytel in a few months. the bond market change having massive effects on the dollar. are we going back into an arena where the king dollar is back in control? 1.06 on the euro-dollar righ now. asian marketstilltrading at the moment. what yo to keep an eye on ng seng because it is a tale of two major eies china and japan. the hang seng outperforming,hih. has to do with theyn. you are seeing a lot of estate banks in china actua invest in the yuan, basically selling

their dolld stead going into o you see the strength there and the repeo is that perhaps ount of supports.t of small that is where you are seeing our performance where there is a lot of red on the screen. that brings us to the boj. the nikkei 225 down 0.5%. weakness in thpanse yen. it is clear it is a tale of the two maecoomies. let's get to the top stor let's start with japan and the market reaction. we are joined by a really interesting roundtable from around the world. paul jackson, dan hanson and valerie tytel joining me this morning to make sense of the central banking palooza . i want to start with paul jackson. this was not the game changer that a lot of people expected out of the boj. a lot of anticipation come into this simply saying is maybe the moment that governor ueda turns the tables around. why didn't he?

paul: we are still some time away from the big move which would be to scrap negative rates start pushing up short-term interest rates. economists now are expecting that in the first half of next year. so i think that expectations really were more centered on a kind of pause now and maybe some signaling towards that move to come in october. but i think there is a sequence of events that needs to take place first. so, really, the focus was on how is he going to deal with what is going on with the yen? we have seen the yen at weaker levels than it was a year ago. it was exactly one year ago to the day when japan intervened to prop up the currency for the first time since the late 1990's. we have seen that this reiteration of this ultra easy

policy stance of the boj has helped to we can again again -- help to weaken the on again. attention is really on governor ueda's press conference coming up and how he will talk about the yen and the policy path going ahead because he has spoken to local media in an interview recently suggesting that the raising of interest rates is one of the options that they get confident on the inflation and wage trend. kriti: we will monitor every word is not news conference. paul, you talked about that currency intervention and valerie tytel pointing out that one year ago we saw the biggest fx intervention ever seen. the it ends up becoming a global story. what does the u.s. do and europe in terms of the swaps picture as well? all, talk to us a little bit about how tempting currency intervention might look right now at a time when it feels like japan historically wants more

inflation is actually getting it. what is the likelihood there? paul: well, i think we really are at the limits of where japan wants the currency weakness to take its. of course, as a currency weakens it affects import prices and helps to import some inflation. bank of japan's main point is they do not want to just import inflation. they want to create a cycle, virtuous cycle that will be good for the economy. you heard that right. inflation that is good for the economy. they have been trying to get this work decades right but i think households, businesses, there is a lot of moaning and groaning going on about the higher prices and needs for subsidies. the prime minister of jas about to nveil more academic measures which would include -- th government is trying to keep day essential prices down. that is an indication we are at the limits of where policymakers

want the yen. some people say 150 is the line in the sand. if use of interventions last october it was around the 152 mark. we are not far off those levels but we are not there yet. kriti: i am old enough to remember when one party was a scandalous level to be hitting. bloomberg's paul jackson. we will be keeping an eye on the boj press conference at 7:30 a.m. london time. terminal subscribers can get life updates and analysis as well by pressing tliv on the terminal. a lot of expectation that the boj would be the game changer. i do not expect it would be the boe instead. governor andrew bailey cautioning that the boe's job on inflation is not done yet. >> it is a point when we stop tightening because we have had very good news this week on the inflation front, very welcomed news. we can see that inflation was coming down but this news is good because it is a sign that we have had more than we

expected and that is very good. the job is not done yet dared we cannot be complacent about this. our job is to get inflation back down to the 2% target and sustain it there. the job is not done yet. kriti: dan hanson, senior u.k. economist from bloomberg economics wakes up for this historical moment because it does feel like that's. thank you as always for joining us. i was talking to one of your colleagues and we were talking about the lags built into the u.k.. i am american so we keep hearing over and over again that's in the u.s., the lag will be shorter than the 12-18 months. in the u.k., it works in the opposite direction. what is the logic of pausing out of the lag is longer? dan: yeah, i mean the logic of course now is that the economy is pretty much on the verge of a recession, and what you saw yesterday is a real shift in the tone from the bank of england away from the thing that they have been worried about the most

which is wage growth. they almost dismissed what has been an over seed -- overstates wage growth number. what we will see now from the bank and we heard it there from bailey is a job is not done. we know that but what they will look to do now is keep rates high at this level for a long period of time. for us, they are not going to go any higher. i don't think the datable warrant that's. we have weakening in the economy and there is more good news on inflation coming and wage growth probably has peaked. it was a big surprise yesterday, but what we are seeing now is they are focused more on the economy. to your question about lags, we have seen some of the influence and that is why the economy is slowing. only 50% has come through, the impacts of tightening. half of it still to come. they want to see that come through and that is why they are going to continue to keep rates

i think on hold. kriti: if you look at market pricing, yes, we are on the brink of a recession here, but if you look at the market pricing, we are still talking about hikes for the next two consecutive meetings. andrew bailey said that himself. what difference does the six weeks make then? dan: that is a good point. we thought there would be a hike yesterday and we actually thought they would hike again in november. we think they will stay on pause or hold now i should say. the reason the market is pricing the probability of some move to the next meeting and the one after, it is definitely the risk is in that direction. it is not the case that suddenly the inflation pictures and the u.k. has improved dramatically. we know we have a serious inflation problem in the u.k. with the combination of energy price shock and a tight labor market. it has been loosening somewhat recently. the markets are on edge a bit

that the bank is going to have to do a little bit more to take rates higher and squeeze the economy a little bit harder. we have had a lot of inflation surprises in their is a lot of traders out there covering themselves for that, the idea that rates will have to go a little bit higher in the persistence of inflation is rearing its head again. kriti: we are talking about recession and i think immediately of rate cuts and yet andrew bailey got ahead of that and said that is not something worth discussing at the moment. at what point, i wonder when he changes his tune. we thank you as always for your analysis. let's talk about the markets because on my central bank bingo card i did not expect the boe to be the game changer yet here they are. valerie tytel joins us. talk about how we got here because i have whiplash about how this all came about, especially when a lot of people going into yesterday and today expected that again would be the

move repaired -- that the yen would be the mover. valerie: there was a lot of confusion on just why we saw such a big move in the treasury market yesterday where we had 2-year yields rallying and 30 year yields rose 13 basis points on the session. you do not see that steepening move any dates in the treasury market. a lot of confusion on my that happened. some are pointing to the fact that the fed is maintaining a higher for longer push to convince the markets that cuts are on the horizon but, this is dealing with a long end and the fed does not have control over theonend.

it is supply and demand dynamics which has control and growth and inflation picture. so, others are really saying this is not due to the fed. this is due to the supply of treasuries, this government we have with the rising fiscal debt, the likelihood that we get a government shutdown amid this decline fiscal discipline.

one thing that caught my eye this morning was the tweet bill ackman, reiterating that they are maintaining their short in the long end. he is still short 30 year rates and his thesis is very similar. rising government that, the government issuing of treasuries to foreign buyers who are not buying as much as they used to anymore. you are seeing the likes of china stepping back, not becoming such a big buyer of treasuries. the big question is who is going to buy this glut of treasuries because it will not be at these yield levels. he is arguing the new level in tens and the long end is going to be a floor rather than a ceiling going forward. we need to see my fiscal discipline. we need to see the u.s. consumer slowing down before any of that turns around. kriti: really interesting dynamics. i was joking with a source,

valerie, that going into the central bank decision yesterday, the people who were long versus the pound seem to have gotten the trade right and must be a secret genius. valerie tytel walking us through the market moves. let's talk a little bit about what is coming up next. we have fox news and news corp. ending the u.s. sssion moving quite a bit which c aer rupert murdoch stepping down as chairman of the two companies in november. lachlan murdoch will become the sole chair of news corp. and executive chair and ceo of fox. we will dive into that later. you can get a full roundup of the stories in today's edition of the daybreak. terminal subscribers can go to dayb on your bloomberg terminal. coming pwe will recap a major wee fr central-bank decis ahead of economic research over at bnp paribas joins us next to walk us through everything we need to know this morning. this is bloomberg.

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>> the committee left the additional rate hike this year in the dot plot. i think that may be a good thing to do as insurance to make sure that core inflation especially in used to come down. i think the risks are building that inflation could hang up at a higher level or even go higher based on the idea of a re-acceleration in the u.s. economy. kriti: former federal reserve bank of st. louis president james boyd speaking to us about the fed's rate path. -- james a bullard speaking to us about the fed's rate path. let's bring in the head of

economic research over at bnp paribas, helene baudchon joining us live. thank you for giving us your perspective. we started talking about this idea that perhaps the boj is going to be the game changer this week. the boe ended up really surprising. let's start with the boe because at the market move repaired why pause when in six weeks they might hike again? what is the logic there? helene: it was a surprise because we were expecting a hike yesterday, so it is a bit hard in a nutshell to understand exactly why they paused. at the same time, as you know, the vote was really split with five persons in favor of a pause and for persons in favor of another hike. we were expecting a hike because in fact, inflation is still high but it seems thn e boe

weakening gowth and signs ofs of weakening inflationmut have been more afraid of weakening growth and at time, as youw the latest inflation print had surprised on e sitive side with a bigger decline than expected.so, it's g growth aeakning inflation can elain why the boe paused this time. the next question indeed wat will they do next time? it remains an open question, and facts. kriti: i almost wonder at what point, the tune of the boe and central banks around the world will he changes in the idea that if you start the u.k. specifically had into recession far faster than a lot of people

are expecting, to the words rate cuts enter into bailey's vocabulary much faster than expected? what precedent does that sets for the other hucksters we are seeing around the world? your thoughts -- the other central banks around the world. what are your thoughts on rate cuts? helene: it is hard to answer this question because what we are expecting right now before ra cuts by theoor even the fed with theecb, this is how long they w maintain at this high level there policy rates. and regarding the economic ok,in fact, in the united kingdom we have been expecting recession that is still not coming. the latest figure for q4 growth in the second quarter of this year was positive. but as i said, we have mand

more signs of weakening growth but again inflation is still very high. in fact, for the fed, the ecb and boe, we think rate cuts will not come immediately. cenaks still have to be sure inflation istined in the riiction towards the 2% target. no, at the time we speak,thy cat it is happening. inflation is falling but it is happening slowly. maybe some slack in the economy in fact is necessary before any rate cuts to be envisaged. kriti: look, it is fascinating. in about six weeks i think a change, and i want to be the

first to maybe -- and i will get a lot of pushback on this -- they may be inter alia setting the tone instead of chair powell for the rest of the world. we will see if that comes through. helene baudchon, head of economic research over at bnp paribas. coming up, we have a major story to talk about. chevron has reached an agreement that strikes at a key lng facility in australia but a new ban on diesel exports has been announced by russia at the same time. we will discuss the energy market as much of the world heads into the winter months. a lot of crosscurrents there. stick with us. this is bloomberg. ♪

kriti: welcome back. this as "daybreak: europe." russia's decision to ban diesel and gas exports is adding to the

risks of disruptive fuel supply ahead of the winter on top of moving strike action that we are seeing in australia. let's get more with birds david stringer talk about these crosscurrents. let's start with the russia story. is it likely that russia will persist with its ban? what is the logic and readthrough into the energy markets? david: as you said, russia announced those restrictions. first of all, it is a significant supply of about one million barrels so far this year of diesel type fuel that is used by all kinds of things, ships, trains, manufacturing, farming. really key to the economy. what everyone is asking is how long can this persist? they have said it is an indefinite ban but the reality is the russian refineries will run up against constraints in terms of how much product they can store. some of it will be consumed by domestic history but there are limits to that and limits on

storage. ultimately, there will be a decision. do you pull that capacity in those refineries and risk hurting domestic consumers, or do you resume exports? by some estimates, there is maybe around one month a storage capacity and be on that, things get more questionable. a lot of expectation in the market that while it does sound significant in the short-term, this might not be a medium and longer-term problem. kriti: we are putting emphasis on refined products around the world and russia chose to do this timing, it's fascinating. let's go to chevron and the unions have chosen to reach an agreement to end the strike in australia. other countries are not so lucky. let's talk of how big of a deal that is when it comes to the lng story. david: this is something that markets have been focused on really since the end of july. there has been a threat, risk to exports of lng australia and

really significant ship of the field. we have seen that show up in european natural gas futures and there have been various spikes over the past couple weeks in prices they are as people have worried about the supply side. this removes those risks. we had a previous deal last month agreed by woodside, another producer. what we had in the past couple of hours here is the unions and chevron agreed proposals put forward by labor rate later that essentially -- labor regulator that essentially end the strikes that have been threatening to disrupt shipments. they are finishing as we speak. kriti: certainly something we will be watching very closely. bloomberg's david stringer who leads our energy coverage in melbourne, walking us through those crosscurrents. we will have a lot more coming up after the break and digest these markets at the moment because we are starting to see the central bank act is it a hangover or not?

where are the surprises coming from at a time when we know th economy, the globalonoy is slowing down? euro stoxx futures dow 0.2%. the ftse 100 futures taa breather as our dax interest. the outperformer is ie u.s. where you are seeing u.s. futures muchher. that is going to be something we will monitor into the weekend. stick with us. re coverage ahead. this is bloomberg. ♪ nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch. get way more into what you're into when you stream on the xfinity 10g network.

kriti: good morning. welcome back to daybreak europe. let's get to the stories that set your agenda. the bank of japan leaves policy

unchanged. we bring headlines from the news conference in just 60 minutes. the bank of england breaks or run of 14 straight hikes to keep rates on hold. the pound continues its slide as the bank focuses on recession with -- risk ahead of pmi data coming today. strike action receives in australia. russia bans exports of diesel and gasoline, risking disruption to fuel supplies ahead of the coming winter. a lot to digest. we will get to that in a moment. let's check on the markets. we are seeing a diversions on both sides of the atlantic. in the euro stoxx 50, weakness. down 3/10 of 1%. the outperformer be in the u.s.. remember, this selloff has been more concentrated in the u.s., a lot of that coming after chair powell made his comments earlier today. into the weekend, retracement.

that catching up is what the european stoxx 50 still has to do. euro-dollar is where a lot of the bond action movement is coming from. 1065 on that currency. the curve and is where you are seeing an inversion of 65 basis points. really narrowing from what you saw earlier in the week. the idea that we were at -80, -75. a lot of that is coming in on the front end of the curve on the idea that chair powell isn't really talking about cuts. oil is on everybody's agenda. just shy of $94 per barrel on brent crude. a lot of crosscurrents to get through. let's start with the asian markets and see how they are faring. april hong is in singapore with that story. what -- what is going on? avril: china stocks bucking the

trend. negative sentiment in the region. there has been some explanation for this. this is likely due to a short covering ahead of expectations over the weekend that we might get some policy support from chinese policymakers, given that they've been pushing that out for every weekend this month. i want to get you up to speed with some of the developments in the debt markets. jp morgan has included these indian government bonds into its key em index. this will start from june next year. hsbc sees this as a potential for there to be flows of about $40 billion, as much as those levels. it's a sign of the growing appeal of indian debt markets to international investors. kriti: it's interesting. the exodus coming out of a lot of asia almost in reverse.

especially not just india and china but japan as well. especially when monetary policy is in focus. walk us through the market action. avril: yeah. we've been monitoring the japanese currency so closely this week, especially. we've seen it hovering near those ten-month lows against the greenback. it paired some of the losses, before the boj decision. but as we got a bit of underwhelming from the boj decision, there was a deficit hold their, defying the market expectations of a bit of a pivot there. that jumped on the dollar denny apple's. we are seeing how there's a whole on these japanese stock benchmarks from the losses of earlier. tension is going to be on what they have to say. kriti: it is something we are watching very closely. i will stick with that theme and

talk about japan. the yen weakening as the boj holds, failing to give the currency wolves anyope. joining us now is tarlow camorra. walk us through the take for japan. it's coming at a time when inflation is ticking higher. i am allergan -- i imagine that's a positive sign. why not follow the world's leading here? tarlow: for me, japan's economy is not strong enough to expect the demand side inflation. this morning, we have the cpi over shaking a little bit. it was actually across call. i agree that the trend is cooling. also, the recent economic data released suggests the demand is weak. for example, turkish gdp was

good but it's only about exports. although there's a strong tailwind from reopening. also the way base growth is still lagging far behind inflation and labor market is losing from the previous month in july. data suggest that the boj sees these indicators and stimulus is still needed. my view is they keep old until the second half of next year. kriti: speaking of the weaker yen, what are the odds of currency intervention here? from my understanding, it takes a long coronation with the u.s., powers in europe as well. what are the odds currency intervention is back on the agenda? taro: it hugely depends on how the governor would speak in the press conference starting in an

hour from now. basically, i expect him to strike a hawkish tone despite his well. refrain from speaking about his underlining inflation. he will probably stop saying that. also he said he would approach the end of negative interest rate policy. although i think he would not specify anything about the time. he speaks that end of the policy voluntarily. if that's not the case, if he keeps dovish in the press conference, i think there will be a huge -- [inaudible] probably they will intervene against -- at 150 against the dollar. policy difference between the u.s. and start. we will see more frequent

intervention to stop the yen slide. kriti: again, this is something that hasn't in turn -- international ramifications. if you look at how much the dollar is moving, the biggest contributor has been the weakness in the yen. if you are bullish on the dollar, you care about the boj. thank you as always for joining us this morning. the boj was supposed to be the game changer. that's not what happen. we got the boe and add -- instead. the governor cautioning that their job and inflation is not done. >> it's the point where we've stopped tightening because we've had no good news this week on the inflation front. we can see that inflation was coming down. this is good. a sign that we've had more than we expected and that's good. the job isn't done yet. we can't be complacent about this. our job is to get inflation back down to the 2% target and sustainment there.

the job isn't done there. kriti: dan hansen waking up early for us to give us his analysis. we talked about the lags earlier in the show. the idea that six weeks may or may not make that much of a difference in terms of a pause. let's talk about what will change that narrative. we are talking about the u.k. on an edge of the recession. how does that get fixed? how does the rate cut reenter the vocabulary? dan: it will be quite a long time to be honest with you. what we saw yesterday was a move to essentially signal that we are at peak rate. i feel the data won't support more rate hikes. it's also a signal that rate cuts aren't coming anytime soon. our view is that by the end of the year, it will be pretty clear that recession will last into the first half of next year as well. of course, with the general

election on the high -- horizon, the debate will be quite significant. yesterday, we had our first cut in the third quarter. the second half of 2024. i think there are risks in both directions around that. the economy is in recession. nonetheless, the important point is u.k. inflation. inflation might need to get back to target. that's our best guess. i think that will weigh on the bank of england. the cuts are going to be very limited because it will take a long time to get back to target. kriti: talk to us about the wage story. central banks love to say, we are working with incredibly blunt tools. how do you tackle things like wages, strikes, oil prices? how will bailey tackle that?

dan: there's an interesting thing in the u.k.. this is where we got it yesterday. the weight has been soaring. a percent is very high. it's about five percentage points above the level that you might expect to be needed. 2% inflation in the medium term. miles afloat -- above the target level. the central bank is pushing up and employment. that's beginning to happen a little bit in the u.k.. we've had arise in the unemployment rate which we haven't seen in the u.s.. that's one of the things going back to the decision yesterday. we are talking about recession risk but we are also seeing evidence in the labor market, on the quantity side of the labor market that he's loosening. the bank is hoping that in time, that loosening in the labor market will feed throuh to rage -- wage growth.

it will become less alarming as time passes. kriti: certainly something we will be keeping an eye. dan hansen walking us through what might come next. we think he was always. let's get a look at the other stories we are fooing today. united auto workers have threatened to expand strikes against general motors and still lamp us unless progress is made by midday new york time on contract negotiations today. borg warner saying the impact of the strikes on sales should be relatively modest and less they continue for several weeks. moving onto u.s. aviation. regulators in tnited states have warned airlines that aod technics improperly sold spare parts for jet engines. the first formal warning from the federal aviation administration over the potential risks from the bogus parts sold. jet engine makers have already

warned as many as 96 engines have been fitted with suspected parts. aod has been contacted for comment. cisco is buying data software companies. its biggest ever acquisition. the networking giant offers at a 31% premium. cisco trying to lessen its dependence on one-time sales by shifting into software and services. certainly something we will be watching very closely. we go from tech to more tech. one of the most influential and conversational figures in media rupert murdoch stepping down from the top of his global empire at the age of 92. his son will take over, adding to his roles as executive chair and ceo of fox. su keenan has more from new york. su: only the timing of the decision was unexpected.

he gave no indication that he was ready or willing to step aside after seven years at the helm of his global media empire. an analyst calls him one-of-a-kind. he now hands the reins over to his son come along believed to be the heir apparent. he will be sold chairman and continue as ceo of news corp. and fox while taking on additional duties. shares of both companies rose on the news. murdoch issued a statement congratulating his father and he made text -- takes on a daunting task, steering the companies around to very troubled industries. print and tv. the big changes are unlikely to cape the country in new directions right away and that's because rupert murdoch is not going away. he remains as chairman and will continue to advise. the biggest challenge to the company going forward could come when rupert passes on. it's not clear whether locklin murdochs siblings will continue to support him in the role of

ceo. su keenan, bloomberg, new york. kriti: coming up, full and with an escalating dispute with ukraine. the controversy coming ahead. this. ♪

kriti: welcome back. this is daybreak europe. poland says it may send more of its older weapons to you rain once it receives no equipment. the president clarified controversial remarks yesterday that it would stop supplying weapons altogether. for now, we go to maria tadeo in brussels. was this a misunderstanding?

maria: that's what the polish government says. there's a level of damage control from the polish authorities over the past 24 hours. they say that this was a confusion of the words but it's difficult to see where the loss in translation came from considering he was speaking in polish when he said that poland would stop the transfer of weapons to ukraine. just to break it down, the polish government says there are a number of things here. it's obvious that some of the stocks have been depleted because poland has helped ukraine since the start of the war. now the polish army has to focus on replenishing those. he was alluding to that. they say that poland will honor the contracts that have already been signed with ukraine and they add that it would be false but also wrong to now suggest that poland has not helped ukraine considering the amount of resources as a percentage of gdp that the country has spent

not just on the weapons but dealing with the refugees coming into poland because of the war in ukraine. on top of all of this, we should note that this comes at a week where we've seen real tensions between the two countries on a number of issues. not just weapons but also grains. the polish government says that ukraine at this point could flood the market with cheaper grain and that would put the polish farmers at a disadvantage and they've called for restrictions. the ukrainians say that exporting green for them now is a matter of survival. as i say, it's strange to see this spat in a public way. these two countries have been very aligned against russia. to do this so publicly is so strange. european circles, diplomacy playing out. there has been a level of damage control over the past 24 hours to de-escalate the tensions that are very public.

kriti: in your coverage of the war in ukraine, you brought this to my attention. culturally and historically, poles and ukrainians haven't been on the same page. now you have to factor in the polis election. how much of that is relevant to this spat? maria: yes. you could go back to some of the historical issues between the two countries. when you go to poland, i've been on the train, it is full of ukrainian women and children. the polish happen welcoming. in warsaw, it is clear that people have signs that stand with ukraine. this is why this is so surprising, to see tensions playing out so publicly between the two. the election is a good point. we know there's an election going on in poland. october 15. polls suggest this is a tight vote and the ruling party is

campaigning on three key issues. one is protecting the polish farmers. they say no migration, a tough line on migration. the third point has to do with the state of the polish army. the government has said they want to see the polish army become the biggest and the most combat ready on a land basis in europe. a lot of that may have fed into this. i've been told by a number of sources that they expect tensions to de-escalate after the election. everyone is in campaign mode. i was told the winner of the spat is russia which can now play into tensions between ukraine and poland. and say that everyone is turning on ukraine including the polish. kriti: certainly a lot to digest . maria tadeo all over it. we thank you for that crucial context. president biden has vowed continued support for ukraine as he met with plotted -- president

volodymyr zelenskyy. a source says he's worried about the u.s. commitment to military support is waning. that comes as troops struggle to make battlefield advances. existing aid could run dry by the end of the month if a u.s. federal shutdown does go ahead. the risk of that government shutdown is increasing. the move to drum up support for him -- a motion hit a wall after republicans we latest defense spending bill. lawmakers have until october 1 to prevent a federal shutdown. canadian tourists, business travelers are rushing to change flights after india suspended visa applications in the country. canada says it will reduce the number of diplomats it has in india amid the escalating diplomatic row. canadian prime minister justin trudeau accused india of responsibility for the murder of an activist in canada. coming up, we go back to the

markets. the yen slips as the boj holds policy. this is bloomberg. ♪

kriti: we are about 60 minutes away from the european market omit. 30 minutes away from the press conference out of the boj. you will see a lot of market movement. valerie tytel to walk us through what's top of her mind. so much to digest. what's top of your agenda? maria: how monumental this -- >> how monumental this week was for the treasury market. the s&p 500 had its worst sense -- session since march yesterday.

it crossed below its 100 day moving average and erased its gains for the past three months. all of this being driven by this move in treasury yields which i want to so you -- ou. the young and -- long and move dampening risk sentiment. this mantra in front of investors minds of how painful that can be for equities and long-term. these yields not only broke through cycle highs but then surged way past that. we had the 10 year yield moving 10 basis points higher yesterday. the 30 year yield at one time of the session yesterday moving higher by nearly 15 basis points. that's a very painful move when it comes from the risk sentiment for equities. when we look at how this hot -- has all moved, the equity market really being rattled by this move and treasuries. the move in the third year is 15

basis points. the s&p futures have now fallen over 2.5 on the week. all due to that move higher and treasuries. kriti: the liquidity story becoming more relevant. we thank you as always. up next, an all-star team to walk you through much of the boj conference and the european market open as well. up next, markets today. this is bloomberg. ♪ meet the portable blender we can barely keep in stock. blendjet 2 gives you ice-crushing, big blender power on-the-go. so you can blend up a mouthwatering smoothie, protein shake, or latte wherever you are! recharge quickly with any usb port. best of all, it even cleans itself! just blend water with a drop of soap. what are you waiting for? order yours now from blendjet.com before they sell out again!

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