kriti: good morning. welcome to "bloomberg daybreak: europe." i'm kriti gupta in london. israel tells the you and the palestinians in northern gaza need to move south within 24 hours. residents are bracing for a ground offensive. the u.s. and qatar agree to hold off distributing $6 billion in iranian oil revenue. iran is warning to a new front mate open is really -- if it's really where crimes continue. global stocks are under pressure as treasury yields surge around the world. let's get a check on markets because the geopolitical situation is evolving quickly. when you look at the markets, they have their eye on the inflation data in the u.s. yesterday. that is crucial in terms of market trade. euro stoxx 50 futures down 0.3% the surge in bond yields is starting to see pain in the markets. i thought we were done with the

higher bond market story which weighed on the valuations and profits of big corporate companies in the u.s. and europe. we are seeing a pullback and what happens when the real yield goes higher and suddenly those profits that the s&p 500 in euro stoxx 600 companies have been making are not as valuable to the near-term. that will be the dynamic weighing on the market. slight green on the screen for the u.s.. the cross as that story is what you want to watch as we talk about the bond market. we got a 30 year of issue yield off yesterday. the 2-year yield is 5.04, down three basis points. a massive move overnight. the 10 year yield is 4.66. you are seeing movement, volatility afloat. we see a move in the yield story and it will have an effect on the dollar. the dollar weakness is benefiting euro. 1.05 on the currency, higher by

0.2%. brent crude is trading just shy of $87 and that is going to be sensitive to the headlines that we get out of iran. that brings me to breaking news we are getting right now. in the last 10 minutes we have seen iran say that a new front me open if -- front may open if" isreali crimes continue." it is not to minimize the human aspect. the united nations is saying that israel has called for the evacuation of 1.11 people living in northern gaza within the next 24 hours in order it describes as quote possible. israeli troops prepare for a ground invasion in retaliation for the deadly attacks by hamas over the weekend. we have two reporters who have been over the story, yousef gamal el-din, our daybreak middle east and africa anchor. i want to start with oliver

crook who was in tel aviv. walk us through the latest here. oliver: we have had a lot of developments in the last hour. the evacuation order that israeli military has called for the evacuation of gaza city in the northern part of gaza for residents move south. the idf says they will continue to operate significantly and continuously in gaza city. they will make extensive efforts to avoid harming civilians who they claim hamas is using as human shields. this area has more than one million people. the u.n. considers it impossible to make such a move to take place without devastating trinitarian consequences. they say -- devastating humanitarian consequences. they say it is already a tragedy. the tragedy they are referring to is now more than 1500 that people within gaza, the latest from the health services there.

the health services are entirely overwhelmed. the infrastructure is in terrible shape. water, electricity, and food have been knocked out or withheld. the death toll in israel is 1300. we heard from the idf earlier today that israel has dropped more than 6000 bombs on gaza. that is in retaliation to the attacks on saturday and the more than 5000 rockets fired on israel. the israeli government is committed to wiping out hamas. there are 300,000 soldiers stationed near gaza. the government has not yet made a decision as to whether or not to mount a ground invasion. however, all the ingredients increasingly seem to be there in the military is prepared to move if the order does,. kriti: the gaza strip specifically is one the most densely possible related --

densely populated lots in the world. a big part of the population is children and that is something we want to watch. world leaders are weighing in and visiting. what we know about that? oliver: the humanitarian situation will be front and center. egypt has called for an establishment of a humanitarian corner but also has called to have the gazans stay within gaza territory. we are talking about moving 50% of the gazan population into half the amount of space, one of the most densely populated already. ursula von der leyen will come here and i suspect her message will be similar to antony blinken which is full support for israel. lincoln also said to how israel -- and people he can set how israel was about this will be important and is important to take every possible precaution to avoid harming civilians and we mourn the loss of every civilian life, every faith and nationality who have been killed. antony blinken will go to saudi

arabia, egypt, the united arab emirates and qatar. ursula von der leyen is arriving today with foreign ministers from across the world, germany, italy. there's a lot of diplomacy going on but again, the focus is going to be what is israel going to do next on the ground in gaza? kriti: we will watch it closely. oliver click -- oliver crook live in tel aviv. he mentioned antony blinken. u.s. president joe biden will make a request for additional foreign aid next week for israel and ukraine. at the same time, you are seeing the $6 billion that was supposed to go to iran is back to frozen funds. let's bring in use of the melody and -- yousef gamal el-din. the aide has been a sticking point in congress and broad u.s. politics. what do we know? yousef: it is not clear how they

will get to passing something that is meaningful. there has been a of structural upheaval in the u.s. house and the fact that you are getting some commentary now shows they are going to put everything behind their sort of leverage of power to make progress in the coming days although that is yet to be seen. we have seen many promises of additional aid to ukraine at the top level with the president, they consulted out -- that gets filtered out in the process. i want to talk about what oliver was talking about in terms of the egyptian president and what he has said in a televised beach. he said palestinians need to stay steadfast in their territory. egypt was the first arab country to normalize relations with israel. they have mediated before. the key thing to look out as a potential link between the u.s. and saudi and egypt may be additional resources are provided to egypt and other partners could come on board as well. that would open up the conversation in egypt more

because egypt is really stress. the economy is in dire straits. with the domestic political debate, just bringing in refugees without international support is taboo even though egypt has a long history of being hospitable to populations in need or at risk. kriti: it feeds into the domestic peace of the equation. often you start to see on the surface level, there are alliances forged. but on the domestic level, perhaps not. talk to us about iran's role here in the context of the headlines we got in the last 30 minutes that this might open up a new front but also the idea that $6 billion of frozen assets that are frozen again, how does that play into the conversation? yousef: anybody who had doubt that a full ground invasion of israeli troops of the gaza strip would be a redline for iran backed hezbollah and the

iranians themselves, we got those lines moments ago, saying they are not going to tolerate that. the $6 billion you mentioned is huge because the qatari's are holding that money which is meant to be for humanitarian use. the u.s. has pressed them to hold that money until they figure out the extent of iranian involvements. it shows you how complex the regional geopolitical puzzle is and how a lot of the alliances are shifting on the go to balance aid and domestic requirements in terms of political expectations versus international alliances that have stood the test of time but maybe not recently. kriti: the frozen money was done on the down low, a hush-hush process in the u.s. when domestic leads in the u.s. this is a sticking point for politics that perhaps the biden administration has been too lenient on iran was the democrats have been criticized for. yousef gamal el-din, r "bloomberg daybreak: middle east

& africa anchor. we have a lot of geopolitical volatility. let's add one more thing, china. you are getting a lot of mixed data out of china and who better to bring in the bloomberg's till desis. walk us through the chinese piece of the equation, especially at a time when we know there is a slowing economy and yet the stimulus is back on the table. jill: i think at this point, we are at crunch point in the chinese economy where we are trying to gauge how much the stimulus is helping the economy. we have had some pretty positive signs so far, tentatively positive anyway but, yes, the data today ultimately shows there is a long way to go before china is out of the woods. we got inflation day up this morning. surprisingly, we saw the inflation rate hit zero. it is creeping back towards deflation. it is indicating deflationary pressures are persisting.

deflation has been persistent for one year at this point and it has been easing a bit but not reversing. meanwhile, the trade data is a bit better-than-expected on the export front but it is all relative. it is still dropping your on year. at this point, what you have to look to is we've got data next week that will be really important, third-quarter gdp real estate sales, industrial output, unemployment data. all of that is going to help us capture the picture of how the economy is doing so far and what might need to still be done to get the chinese economy to the 5% growth target for the year. kriti: when we look at those pieces of data out of china, immediately that will have the effect into ppi prices for the u.s. as well given that the two countries are the largest trade partners. we have a higher-than-expected cpi print from the u.s..

how much of a difference does it make? jill: at this point with the cpi print, ultimately it seems like fed officials are still talking more this week about the surge in yields and how that might play on the rate picture for next month. what the cpi data showed us from earlier is just that inflation pressures in the united states are going to continue to persist. it will take a while before we really see that stronger cooling off. it distracts a bit with the jobs data we got while though showing that the labor market remains incredibly resilience. all this tells us is that the fed really does still have a tricky path to walk. the question about do they raise rates one more time before the end of 2023 still remains simply. it is not gone so far. we heard a lot of fed speak this week saying because of the yield surge, maybe that is indicating that rate are sufficiently high.

it is really more of a changing of the conversation into that higher for longer scenario rather than raising rates again. we will have to see what happens in november. kriti: a lot to digest what we are talking about how much the bond market has done the work for the fed and do the hike rates in the face of a war? bloomberg's jill disis. thank you for joining the program. have madame lagarde speaking at the imf. how much to the european monetary policy impacted by the geopolitical volatility? those comments are at 2:00 p.m. u.k. time. in the u.s., we get the university of michigan sentiment coming out at 3:00 p.m. u.k. time. consumer confidence will be a key part of the story as are the bank earnings. jp morgan due to report in the morning of the u.s. session talking about loan growth followed by citi and wells fargo. wells fargo is very exposed to the housing market in the u.s.. another slew of data points for

the fed to factor in. you can get a round up of the stories in today's addition of daybreak. terminal subscribers can type da why be go -- da why be go on your terminal. be sure to tune in. coming up on the program, warnings from financial leaders on the global economic outlook dimming. we will have the latest from the imf annual meeting and marrakech next. this is bloomberg. ♪

kriti: welcome back to "daybreak: europe." i'm kriti gupta in london. let's check on the asian markets. avril hong is standing by in singapore. avril: we are seeing you as cpi print really halting the asia-pacific stockmarket rally. the regions benchmark is

slumping at the end of the week and chinese data is adding to the gloom as we saw cpi at zero. the asian giant is on the brink of deflation. even the export slump using is only marginally better than expectations. and we also had the report of the chinese authorities making a stabilization fund to prop up the stock market but that is not looking sentiment in the market. it is weak on the benchmark on the mainland and hong kong. it tanked more than 2% earlier and is sitting quite negative as we returned from the lunch break. the soft consumer picture in china is so much of a concern for investors that wall street has turns bearish on whether the chinese e-commerce giant jd.com, we see morgan stanley is downgrading the stock citi also cutting the price target on it and is the biggest red on the

hang seng tech today. -- the biggest drag on the hang seng today. there reportedly mulling a hong kong ipo after the failed new york listing. it is a signal perhaps of support for the private sector after years of regulatory crackdown. kriti: idea that there is a dipping your toe back into the water idea around ipo's is fascinating. it is a trend we are seeing around the world. avril hong in singapore. a big part of the equation is how the global community looks at the conflict but also the slowing economy in china. the imf is saying it is monitoring the issues in the region between israel and hamas in the impact on the energy markets. bloomberg's jennifer zabasajja has the latest on the bloc's annual meeting and marrakech. jennifer: on day four of the imf

meetings, the managing director said the ongoing israel-hamas conflict dims the global outlook and its effect in particular on oil markets is of concern. the conflict is top of mind for leaders gathered here in marrakech as they attempt to tactile financing towards growth , developing, and prosperity for lower income countries. the managing director also said she is in close discussions on egypt, and ensuring its success. imf africa director echoed those comments in an interview with us earlier on thursday. and calling on international relief to mobilize more resources and support nations facing a funding squeeze. on the issue of debt restructuring for other developing countries, bloomberg reporting is suggesting that there may be an impasse between creditors and china and the potential for a breakthrough may be slim this week in terms of restructuring some of the debt deal is not ironed out between

china and the private lenders. jennifer zabasajja, bloomberg news, marrakech. kriti: the more big interviews here on bloomberg from the annual meetings of the imf and world bank in morocco. don't miss the conversation with kristalina georgieva and deutsche bank ceo in the spanish economy minister, all coming up today. plus, the governor of the big of italy, the dutch financial minister, and paschal donohoe. a lot to digest from around the world. coming up, we look ahead to u.s. bank earnings. jp morgan, wells fargo and citigroup are set to report third-quarter results later today. that is coming up next. this is bloomberg. ♪

kriti: welcome back to "daybreak: europe." let's get to global stories. steve scalise in the u.s. of dropping out of the race to become house speaker to gain enough votes for a majority. deepening turmoil in the republican party, the speaker position has been vacant for 10 days leaving the house in a holding pattern and unable to approve aid for israel or ukraine. ford says the offer of a 23% raise to the united autoworkers union is the best it can do. sorcerers telling bloomberg that the firm -- sources telling bloomberg that the uaw is looking to emerge from the strike with a 30% pay raise and other improvements in condition. bloomberg data suggests u.s. banks are set to write off more bad loans and they have the pandemic as higher for longer rate take their toll on consumers. we will get insight later as jp morgan, citigroup and wells fargo all kick off the earnings

season. the chart you are looking at shows the banks, the full 500 and on the surface, rates should be a positive things because the banks can charge more on the higher rates and make extra profit that does not seem to be the case. there is the upper bound when you look at how high the rates will go in the momentum, selling the bond market is not always a positive thing for the more rate sensitive sectors like the financials. joining us more for the earnings picture is charlie wells onset waking up early for us. what are analysts expecting apple -- expecting? charlie: it is a ranger -- razor-sharp service. net interest has been a positive story for the banks and this is the shifting of that. we are seeing slowness in consumer demand for loans which could be taking a toll on this because banks have been able to charge more on their lending then they have to pay out

deposits. we had a graphic on consumer deposits which shows there is weakness there as well. beyond interest rates, thinking about like investment banking revenue from investment banking fees the analysts have been hoping would pick up for a long time, slowness there also taking a look at trading revenue as well. last year was a volatile time. a lot of banks eked out a significant profits in trading but this quarter, expectations are only for citigroup to post a narrow increase in revenue in the trading sector. kriti: there is a lot to digest in the dynamic for a long time was that trading revenue was holding up the entire banking sector when nobody wanted to hop into loans. now that flipped and came back. here we are. who are the winners? is it still the top three? charlie: you are right. the banking sector at a difficult 2023 except for jp morgan. they came out of the regional banking crisis larger and stronger.

they are expected to post a huge increase in interest income. expectations for earnings-per-share are expected to be up 26% in the third quarter. the other banks that are reporting today, wells fargo is expected to be down for percent and citigroup down 18%. 18% down earnings versus a 26% increase for jp morgan. kriti: jp morgan is going to take all. that is just one piece of the equation, the banking side under pressure. from a markets perspective, we are warming up a little and seeing a few ipo's. how sticky is that? charlie: we've been talking about the instacart ipo for so long as the white whale everyone was excited about. that is one part of it that equity is underwriting. m&a activity is not looking particularly good because the m&a activity has been so muted. kriti: a lot to digest when we

talk about how the banks reflect what is going on the broader economy. i was thinking arm and birkenstock. charlie wells they are doing a little bit of everything for us this morning. thank you for that crucial update. we will bring a the biggest stories on the markets, the biggest stories you need to know in this region because a lot of different crosscurrents and that is going to change as we go closer and closer to the european open. the euro stoxx 50 futures is down 0.3%. stick with us. 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!

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kriti: good morning and welcome back to "bloomberg daybreak: europe." israel tells the un palestinians in north gaza need to move south within 24 hours. the president is bracing for a crown offensive. iran one's a new front may open if the israel war crimes continue. it will continue supporting the palestinian resistance. the u.s. and qatar agree to hold off distributing $6 billion in iranian oil revenue. fed hikes back in focus, hot u.s. inflation data puts stocks under pressure as treasury yields surge around the world. the geopolitical volatility is starting to creep back into the markets. we seem to have a bit of reprieve in the last two days or so from a markets perspective. . you're starting to see those jitters. the bond market move does not help overnight and that's where you see euro stoxx 50 futures take a breather, down about

0.3%, ftse 100 futures down as well. slight outperformance in the u.s., s&p futures higher by 0.1%. here's where that defensive trade hits its limit, the idea being if you are a global crisis, you have this instinct to buy american, the only go so far unless you are really worried, in which case, it turns into a cell everything mentality. it feels like that's where we are headed going into this weekend, which we know will be filled with plenty of headlines. let's go cross asset. that's not the only piece of the equation. the bond market continues to move to the upside. no surprise as we talk simply about the move in the cpi numbers, an unexpected surprise. this is coming in the context of this massive selloff we see in the u.s. recession and in the last couple of weeks. it's no wonder you see a little bit of a, i want to call it a retracement, a technical move on the front end of the curve. the two year yield down about five basis points. 10 year yield at 4.65.

that's going to all pressure the dollar, 1.05 there. we keep our eye on brent crude, trading at about $87 a barrel, especially in light of the new headlines out of iran. going right back to the geopolitics of the middle east. united nations says israel has called for the evacuation of 1.1 million people living in northern gaza within the next 24 hours, an order that the un describes as impossible. israeli troops amass for a possible ground retaliation in response to the attacks by hamas. let's bring in yousef gamal el-din. oliver cook is in tel aviv. we start with you. bring us the latest. what's the update? oliver? it's been ever --oliver: the most significant development has been this evacuation order by the is ready defense forces

telling the north of gaza and gaza city to move to the south to preserve civilian life. they say wil -- they will continue to operate continuously and significantly and gaza city, make extensive efforts to harm civilians, who they claim hamas is using as human shields. this is an area that includes more than one million people that would have to relocate. the united nations says they consider it impossible for such a movement to take place without devastating humanitarian consequences. the un strongly appeals for any such order to be rescinded, avoiding what could transform what is already a tragedy into a. calamitous situation the tragedy is more than 1500 people dead in gaza, according to the latest numbers from the health organization, a health organization overwhelmed completely, infrastructure failing, water, electricity, food, internet out of commission. 750 strikes overnight, that brings a 6000 bombs have been dropped on gaza by israel since

the beginning of this conflict. that in response to now we are hearing more than 1300 israelis that have been killed since saturday and 500 rockets fired onto israel. to step back, we need to know from the israeli government's perspective, their goal is to wipe out hamas. there are 300,000 soldiers amassing near the border with gaza. we have learned from the israeli defense forces that the government has not yet decided whether or not to launch a ground invasion. however, all of the ingredients are there for this to happen. the military is preparing for it. we've had a push for humanitarian corridors to be opened with gaza, namely from a number of nations, namely egypt. egypt says they want gazans to stay in their territory, which means you will have 100% of the population compressed to about 50% of the landmass of gaza, which is one of the most densely populated places in the planet. kriti: it really is an turns out to be something that i think half the population are children at the end of the day, oli.

a really terrifying situation to watch from the outside, i'm sure even scarier on the inside. let's talk about the international response, specifically from ursula von der leyen. oliver: she will be arriving today. . there will be foreign minister's from italy, germany, canada, the u.s. defense secretary as well. we expect them to have a similar message to anthony black and yesterday, a full throated support of israel in its efforts to beat hamas, but with a tacit message of caution, saying it is so important to take every possible precaution to avoid harming civilians, that's why we mourn the loss of every civilian life, civilians of every faith, every nationality who have been killed. this are obviously in preparation of what could be a ground invasion, which will be extremely costly for the israeli forces, but also for the gazans. the israeli military is very further advanced than any of hamas' forces. however, when they go into an

urban situation, many of those advantages are relinquished. we should finish by saying that hamas has called for a day average and global protest across the world -- a day of rage and global protest across the world. kriti: something we will be monitoring very closely. stay safe. he joins us from tel aviv. thank you as always for your report. at the same time, the other piece of the equation, iran is going to be a bigger part of the response over the weekend. in just the last 30 minutes, you did see headlines saying there is a potential possibility of a new front opening if indeed their words, the israeli war crimes continue. they said they will support the palestinian resistance. let's bring in yousef gamal el-din to talk about the dynamics. will can we expect on iran? yousef: it's going to be more rhetoric but the rhetoric is always carefully calculated. this is what we got in the last hour as they make no secret that

they are carefully monitoring what's happening in the gaza strip. for the iranians government, an incursion into the gaza strip, a ground incursion would be quads i a redline. they have not defined as such by any escalation, and that would be a major one, would necessitate in the eyes of many people we have been speaking to on the ground and observing this as experts from abroad, would necessitate an intervention through either one of their proxies in the south lebanon, so the iranian backed hamas, or rather, has below group in the south of lebanon -- hezbollah group in the south of lebanon, or others around the region. it's going to be a very tense few hours because it's the kind of situation where you are trying to test the other person, you're trying to test the other powers in the region. there is so many other dominoes connected to each of those pieces that you worry that once one falls over, it could spiral out of control pretty quickly.

might pull syria in, iraq and. you have no idea where the end of that is. a lot hinges on what the idf is going to do with the potential move into gaza and how deep they are ready to go, and at what price, what human press. kriti: the escalation absolutely risk. you mentioned hezbollah and lebanon, but to your point, syria, jordan, the world powers that back on them. thank you for your reporting today and throughout the week. i want to get some other stories around the world. the u.k. is reported to be sending two royal navy ships to the eastern mediterranean and will begin surveillance flights over israel. that according to the terms. the royal fleet vessels will form part of the military support designed to reassure israel. there are believed to be about 60,000 british nationals in israel and gaza. bloomberg has learned the $25 billion international network of foundations started by george soros is going to close offices

around the world as it prepares to cut more than 40% of its staff. open society foundations is set to shut several offices across africa, in addition to barcelona, and baltimore locations. want to move onto another crucial global story we are watching and that is in poland. voting on sunday in a tightly contested election, united right coalition led by the law and justice party is seeking a third term in office. former prime minister and president of the european council donald tusk leading a pro-eu opposition coalition at the time. peter scola mouse key joins us from poland. what are the opinion polls saying on the last day of campaigning? >> indeed, it's a very tight race. the recent opinion polls show the races going down to the wire. at this point, we've heard from donald tusk, who expects a landslide for the opposition. which means three major parties that expect to form a coalition at this point. but on the other hand, and

indeed, in the recent weeks and days, we have seen a momentum for the opposition. but at the same time, though polls also show that the lion justice is leading in opinion polls but may fall short of the majority. kriti: does that mean there's going to be a clear winner then? >> well, unlikely. and at this point, where we are is that the opposition is, well, there will be a coalition, apparently, three parties, led by the civic platform of donald tusk. they want to have at least 231 seats in the lower house of parliament. and that is where they almost are. if the law and justice wins, then they will have to seek a coalition partner. however, it's going to be much more difficult for the ruling party to find a coalition partner at this point. kriti: that's really something

we will be watching closely. po2 scola mouse key joining us for that analysis. thank you for the update. coming up on the program, the outlook for the commodities space, especially when it comes to the oil market. we will hit the grains and metals as well. this comes in the context of the israel and hamas war. we will discuss that with josh crumb, the ceo of abaxx technologies, next. thisomberg. ♪

♪ kriti: welcome back to "bloomberg daybreak: europe." i am kriti gupta in london. the upending of global oil flows due to opec-plus output cuts, now the war -- and the war in ukraine, and israel and hamas, they are struggling to make just enough diesel as winter wraps up, now you see the conflict it even worse.

geopolitical volatility not helping that story. joining us now to walk us through this kind of market impact, josh crumb, ceo and founder of abaxx technologies. let's start with the oil read through. when the conflict in israel first broke out, the immediate reaction in oil prices, before you even saw it in futures and the treasury market, was this 5% surge. suddenly as we've gone to the, as more headlines have developed, that surge has been pared down. talk to us about the longer-term impact in oil? josh: every time we look at this potential for disruptions or exhaustion is shocks outside of normal consumer/industrial demand, you have to think about, where are we at in terms of inventories and capacity? i think what we have seen in oil is not a lot has changed over the course of the year. even though we had kind of a catch-up trade in position, you know, through, you know, the previous run-up, which came off, just before this news, you know,

this came off with book positioning, as well as, you know, may be a little softer consumer demand. but ultimately, we are still in a relatively low inventory environment, a relatively low spare capacity environment outside of saudi arabia and the uae, and of course, you know, refining margins are still strong. so you know, overall, that means, you know, not a lot of capacity, which means a heightened impact for shocks, which is what we saw on the initial reaction. kriti: if you look at kind of global read through in terms of oil flows, i think there's a statistic that says iranian oil flows, as a function of sanctions naturally, to make something like 3% or so of the global picture and certainly is very little exposure to the united states. i think to your point about the tightening of the supply, the fact that iran was the bull case for oil is kind of mind blowing

for me. walk us a little bit through how long that's going to last, specifically when you mentioned the positioning story. josh: again, we do actually have spare capacity in saudi and uae. the politics there is extremely tricky, right? any increased talks, any potential issues coming out of iran. we do have capacity. but that, you know, so this is not a completely stock out type of environment, which could get much worse. but again, that brings it back, you know, fully into the realm of politics. kriti: let's talk about how that differs or is similar to the rest of commodities. when i look at the oil market, one of the things that is striking is specifically in this inflationary environment, macro tourists i believe they are called will come in and get a basket of commodities to hedge against inflation, not preparing themselves for a very volatile commodity trading environment, which you are no stranger to over goldman.

talk to us a little bit about just kind of the exposure you are seeing in terms of the broad commodities space. is that still the trade du jour? where you buy a basket of commodities and you hope it last year the year? josh: there's a couple different things happening. in the energy space, where you have a higher cost of holding inventories, we've seen the de-stocking happening faster and getting to lower levels. in say metals, particularly with probably softer imports from china, you were probably three or four months behind that de- stocking cycle because it's relatively cheaper to hold inventories. we still think we are de- stocking across most commodities space. we still believe that the sector in general is, you know, the natural resource sector is undercapitalized. and not only is it undercapitalized, but it's facing, you know, three sort of major, you know, call it structural, you know, crosswinds.

you know, one being, of course, the energy transition, and changes in supply and very much policy and government driven, you know, demand. you have, you know, we still have the, you know, sort of the last pieces of what's coming out of the supply chain disruptions. and then, you know, third, you know, we still, you know, the supply chain itself is dealing with higher interest rates, and the cost of storage. so again, we still think de- stocking has been the thing, which leads to lower capacities and more potential for volatility. one of our former colleagues from goldman because it not necessarily a super cycle, but a supervol cycle because we are still getting used to these new crosswinds. kriti: from an equity perspective, i was having a conversation with my producers about the value of whether the vix is even relevant. the truth is you are trading the volatility, you are just trading them further down in terms of

the contract. a lot of fun option stuff i'm sure you don't miss. talk to us a little bit about e me wheat, which i feel has gotten no attention, what has been the take at a time when it feels like the transition to ev, the transition to away from even rare earths and rare minerals in china has kind of kicked into high gear. what's the take? josh: all of these crosswinds are heightened in the metals sector. you have, particularly with potentially softer chinese housing outlook, i would say that takeaway was pretty bearish. but that said, i think the fundamentals, particularly if you look a few years out, are much stronger. in something like copper, we are going to see sustained deficits probably for the foreseeable future. but then, even where there isn't may be a supply-side problem, there is certainly going to be large cost issues, whether it is, you know, nickel or

aluminum, particularly as we price more of the decarbonization into those commodities. i think even though there is probably a bearish positioning and bearish view coming out of london metals week, they are still potential for a lot of uncertainty and upward pressure. kriti: the idea that you have copper, lithium, cobalt, if you dare trade it, and even the nickel story as well, i feel like, i mean, look, i just moved to europe and one thing i really noticed is this move to green energy and ev's, etc., it is not a nice thing to do as it's kind of viewed in the u.s., it is a must do, purely from an economic incentive. that gets so much more challenges when the metals market is not as transparent as some of the others. josh: yes. at abaxx technologiesm that's exactly what we are working on,. we believe there's a number of projects that don't have the proper benchmark, the buyer and

seller of last resort type markets we need. that's another theme that came out of metals week, is the big warehouse exchange traded metals probably look a little bit soft in premiums but there's a lot of dynamic things happening in, you know, in the battery metals space. and you know, demand as it relates to both solar and ev's. we think their to be better prices. we've announced we are launching a new physically deliverable nickel sulfate futures, which will address the first of one of those pricing challenges in i guess the non-benchmark metals. and we are looking to do more. that's really why ibex exists, with think there is a new range of commodities that you need physical benchmarks. kriti: you're almost into the commodity market would happen to the bond market about 20 years ago, adding transparency to a very complicated part of the market at a very crucial time for geopolitics, as we laid up. josh crumb, ceo and founder of abaxx technologies, joining us

today, covering a little bit of everything we will call it. plenty more ahead on the program. we will bring you more updates from around the world. stick with us. this is bloomberg. ♪

♪ kriti: you are looking at live pictures of gaza city. the united nations says israel has called for the evacuation of 1.1 million people living in northern gaza within just the next 24 hours in order that the u.n. itself has described as "impossible." this as is really troops amassed for a possible ground invasion in retaliation for the deadly attacks by hamas over the weekend. meanwhile, iran has warned that a new front may open if "israel war crimes continue." the nation also says it will continue supporting the palestinian resistance. . this comes in the background as u.s. and qatar agreed to hold off disturbing $6 billion in

iranian oil revenue. a quick check on the markets again as we are monitoring those images right out of gaza city. you are seeing a little bit of the geopolitical turmoil kind of baked into the markets. overnight, you did see a lot of selling in the u.s. session and arguably at the start of the asian session as well. in the bond market that no longer seems to be the case. there is an expectation that this weekend is going to have a lot of headlines and turmoil when it comes to the monday trade in the morning. to naturally fill a little bit of a pullback ahead of a weekend is going to be crucial. you already see a slight flight to safety into the american bond market. i would argue that's being reflected in the repercussions for the dollar. euro-dollar at 1.05, brent crude at 86, higher by 0.7% as we get headlines out of iran. a few other charts to get your agenda set for the european open, which is going to happen in just over about an hour. this geopolitical volatility and bond volatility we are watching,

but also what's going on in china. there is the slowing economy. i think the way you look at asia in the context of the crosscurrents right now is simply the indication or the sentiment. it is not just the chinese stock market s shown on the screen that has a problem, it's all high beta trades, ipl's, nonprofit techs, even biotech falls in this trade, not to mention meme stocks if you are watching the, all of that as a proxy for the positive sentiment, all of it taking a beating in light of the headlines. i think that's a big theme you will need to look into a of the european open. the markets today program starts in just a few seconds. stick with us. more markets analysis ahead. this is bloomberg. ♪

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