kriti: good morning and welcome to "daybreak europe."

i'm kriti gupta in london. tensions in the middle east ratcheting higher after hundreds are killed in a gaza city hospital blast. hamas and israel trade blame. president joe biden is set to arrive in the region but will no longer meet with the leaders of jordan, egypt, and the palestinian authority after they all pull out a vase of it. -- a summit. country garden on the brink of its first default and says it is unlikely to honor offshore payments on time which will feed into concerns over china's economic outlook despite better-than-expected data. the idea that markets see different crosscurrents and china at the core of it. you are seeing the chinese trade of low volume. a quick check on futures. risk sentiment is decidedly lower against something that will be coming off the asia session. your stoxx 50 futures down 0.3%. -- euro stocks 50 futures down 0.3%.

you are not necessarily saying a defensive bid. nasdaq 100 futures down 0.2%. asia is setting the tone for this morning's grade. -- trade. there is read on the screen. you are seeing incredibly low volume. it is on a five day basis and given the geopolitical context. the hang seng is down 26% that tells you that the investor participation is not there. to see this pullback in a lack of momentum in either direction signals caution coming from investors not just erbil around the world because that is a global dynamic. you're getting data in china that beats estimates. gdp data, retail sales, industrial production data is all good news and yet a pullback in the market. this is in the context of yesterday when you saw green on the screen that session. the nikkei is following the lead, down 0.2%. volume is light. the dollar-yen as well down 0.1%.

it is just shy of the one point -- the 150 level. the dollar yuan is 7.32 we look at the offshore currency. we talked about the issues with country garden we will dive into that later. the bond market still matters. 2-year yield is 5.18, down three basis points. the flight to safety is seeping back into the market as is some of the inflationary story and monetary policy in the u.s.. the currencies are interesting because we are going to get u.k. data in a little bit in the pound, cable rate is 1.21 on that currency. the euro is 1.06. we are still talking about eurodollar parity. when the things cool down and the focus shifts back to interest-rate differentials, the euro is where you want to keep an eye. brent crude, a fresh bid given geopolitical tensions, higher by 2% just shy of $92 a barrel. there is a lot on the investor docket.

there will be cpi later today and we are watching the cable rate closely. are we starting to see deceleration and inflation faster or slower? that will impact the currency story as well. we will get a preview with our correspondence lizzy burden at the end of the show. we get the beige book later in today's session which will give us insight into the monetary policy of the united states and really how much of this is actually outdated given the geopolitical context. again, they will talk to us about the bond momentum and they will address it in those minutes as well. in equities story, netflix and tesla both reporting their earnings after the bell in the u.s. session. both have international repercussions we will dive into what that means. those are crucial numbers when it comes to the global equity dynamic. i want to move on to our top story, which centers around the tragedy in the middle east.

hundreds of palestinians have been killed in an explosion at a gaza city hospital according to officials and the hamas-controlled territory. the palestinian authority and countries including jordan, egypt, and turkey have all played israel -- all blamed israel. >> what happened tonight is a great tragedy in a horrifying war massacre that cannot be ignored or allowed to ask -- to pass without accountability. these crimes must come to an end. kriti: israel denies responsibility with prime minister benjamin netanyahu posting on x, the social media platform formerly known as twitter, the entire world should know it was barbaric terrorist in gaza that attacked the hospital and not the idf. let's get the latest from bloomberg's oliver crook reporting live in tel aviv. what more do we know about this solution? oliver: the death toll we have gone from the palestinian health authority and this is 500 people

which would push the full death toll in gaza was already approaching 3000 people yesterday well above that. there is a lot we don't know but what we do know is the hospitals are completely packed and totally underserviced in terms of electricity and water and all these other things. this comes at a time when the hospitals are full of wounded people. the impact is going to be extremely severe. the combination is coming from -- the condemnation is coming from the gaza health authority. they are saying it was israel. saudi arabia and the uae have israel and benjamin netanyahu said the israeli defense did not target the hospital. the idf has suggested that this would have been an islamic jihad rocket that failed and came back and hit thousand territory. biden -- hit thousand territory. biden and others have spoken about the great tragedy of the event without saying who is to blame because there still a lot of fact-finding the needs to be done.

this puts more pressure on getting aid into gaza which is still waiting at the border with rafah in egypt and that is going to be one of the main focuses. this is a situation that joe biden finds himself in flying into tel aviv today. kriti: as you mentioned, joe biden, we have seen in the last 24 hours, docket has changed. what happens now to his mission in the broader u.s. somatic push? -- diplomatic push? oliver: this was going to be three-pronged goals which is unconditional support for israel and deterrence, aircraft carriers in the united states deployed the eastern mediterranean, and 2000 troops on high alert. but the third and the crucial part which is diplomacy and de-escalation through diplomacy and trying to get aid through and working a hostages, these sorts of things, that plan has been more or less suffered with

what -- beau biden was supposed to go to jordan to meet with the president el-sisi of egypt and the king of jordan and meet with mahmoud abbas, the leader of the palestinian authority in the west bank and that is making the third part and the most important part of those missions in terms of finding a durable and long-term solution and bringing the temperature down, almost impossible. i want to bring you a quote from the king of jordan. he says, " the whole region is at the brink of falling into the abyss and destruction is pushing us towards it. the threat of war is expanding and it will bring too much to bear." what we have seen our protests across the middle east and in lebanon, the west bank, jordan, turkey. this turns of the pressure for biden not only because this is directed at israel, these protest, but all of -- also at the united states has been the

back of israel throughout this whole crisis. kriti: a lot of crosscurrents when blame is being thrown in every different corner. bloomberg's oliver crook lives in tel aviv. he mentioned the summit in jordan and how important jordan is to the broader region. i want to bring in a true expert , jordan's a former deputy prime minister and foreign minister as well, dr. jawad ahmed abdul mohsin al anani. a pleasure to have you on the program. i want to start with what oliver left off. for the international audience, jordan is a home to a large population of palestinian people and it was already thought that perhaps that would be the safe haven for humanitarian crisis and now in the context of the news in the last 24 hours, can jordan handle that exodus of gaza and into jordan? your thoughts? dr. anani: i think his majesty, the king has already been

talking rather tough on the issue of transfer in the ongoing war in gaza. so, people cannot blame him for anything he has been very much forward on this. of course, while keeping his diplomatic language, i think he is extreme the unhappy about these developments, which, to him, as we said, the facts is that we need lasting peace. as far as palestinian people of jordan of palestinian origin, i don't think their position differs from jordanians. both of them are in agreement that what is happening right now is not susceptible to them, and -- is not acceptable to them, and they are hoping for the end of the war just like what happened in 1973 and 1991, that diplomatic process will be

issued. so far, with the recent hospital incident, i think the many casualties, i think this will put this on hold for a while. kriti: it is certainly a truly tragic humanitarian situation, but what more can jordan do diplomatically? we know jordan was going to hold that summit that our reporter was talking about in tel aviv and the idea of hosting president biden and other regional leaders as well. what more can jordan do to ease the conflict? dr. anani: they have no way but to continue to push for diplomatic solutions. first of all, order business we have to have and allowed humanitarian aid to go into gaza. secondly, the second step is a cease-fire, arrived at a cease-fire that is meaningful.

we have to prevent future developments. remembering this is the seventh war between hamas and israel since 2006. if we continue to expect a war like this every two years, this is an endless and vicious circle of violence. and what his majesty's trying for his writing at lasting peace. -- is arriving at lasting peace. kriti: in terms of the actual regional leadership of gaza city, do you see the role that mahmoud abbas plays as well and leadership being changed off the back of this once we figure out a solution to the humanitarian crisis? what does a leadership look like? dr. anani: that is a very good question. we don't know. hamas is been in power for 16 years and is not easy to replace them or finish them because they have lots of followers.

but what i mean to say is we need leadership that is peace leaning and much more pro-peace and the lessons probably from this experience should force them with this idea. at the same time, we don't a partner in israel. the government in israel is not pro-peace government at all. if there is hope for lasting peace from either the current government in israel and their position as far as peace is concerned, and they don't get every opportunity that may arise on this horizon, or we see the israeli people choosing to elect another government. let's hope the best. kriti: how does it then affect the relationship with united states? this is a clear sticking point as we have seen the fault of the summit to find a diplomatic solutions as you suggest. how does jordan approach the u.s. and president biden

himself? dr. anani: well, i think that president biden is a man who knows exactly what to do. he has lots of experience. we hope that this lesson -- using the friendship with israel does not mean that you cannot tell israel what needs to be done. at the same time, jordan is continuously keeping in touch with the united states. we cannot, by the way, help the united states. we have very much in common to sacrifice. at the same time, we want to use the goodwill with the united states congress and the united states administration in order to convince them to tell jordan which is a strategic ally, they need peace because this continuous eruption of wars and conflict all the time is not

giving jordan and other countries who hope for a better life the opportunity to do so. kriti: diplomacy is just one piece of it, and i can speak for everyone globally that diplomacy is at the end of the day the goal to finally finding a peaceful solution to the region, but if you look at what is going on in the u.s. right now, specifically in congress despite the issues with the speakership, there is a thought that as soon as the political situation in the u.s. uses, more defense funding will be allocated to israel specifically. there are talks of as much as $100 billion being allocated to this conflict in pure military spending. how does jordan respond to something like that at a time we are talking about -- when we are talking about diplomacy? dr. anani: we are not very much in jordan asking for the u.s. to stop military or otherwise aid to israel. that is not our goal. the goal probably if you give

israel, i don't know if you can justify that, but according to the u.s. administration and the way i see it, i'm giving you so much aid and support, so you don't have to worry about for instance the expansion of war are going to other fronts. i have sent airplane carriers to the region, and i am sending special troops to the area to do specific operations and consulting. so, that should give israel and the people assurance that they are going to have these, they will have a strong ally to standby them. but to give aid just because to keep aggression going on, i really don't see why should they not just do that to be honest with you? anyway, i would think that aid to israel should serve to reassure the israelis that

they can go into peace and take the risk of going into peace instead of allowing things to continue as they are. kriti: it is something we will keep an eye on. the number is coming from our own uber reporting as well. dr. jawad anani, former jordanian deputy prime minister, thank you for joining the program and your crucial analysis at a challenging time for the region and the world. much more ahead. stick with us. this is bloomberg. ♪

kriti: i want to bring you breaking news. we have headlines coming out of one of the largest chipmaking equipment maker's in the world, asml reporting third-quarter bookings 2.6 billion euros in the estimate was 4.5 billion. this is the lowest orders they have seen since the second quarter of 2020, essentially during the pandemic era and they are seeing gross margin between 50-51%. the estimate was 51.2%. china sales made up for a good chunk of the sales as well, 46% of the sales in the third quarter. the sales at tsmc, their biggest customer is dropping 11% this quarter in this matters as we talk about if you want to have

exposure to tech, perhaps chips are the way to do it. if you want to magnify exposure, pick a company like asml or applied materials in the u.s.. that is the market take and super important to talk about and we will see how that is digested at the european market open coming up shortly in the morning. in the meantime, a big part of the asml story is the china piece of the equation. 46% of their sales came out of china when geopolitics are going to be weighing on the story. i want to go to the china story next and broaden its out to the property sector. distressed chinese developer country garden is saying it is unlikely to honor its officer payments at this time. jill disis joins us now from hong kong for a little bit more context. it feels like every day, almost every day we get some sort of headline that country garden is in trouble and will and will not make their payments. how attuned are investors this narrative? jill: at this point, it seems

like the writing is on the wall for country garden. we have been waiting to find out whether or not they will make this payment, a critical grace period which is just about to pass. now it seems like we may be have our answer. country garden is signaling they are set for their first ever default in the grace period is ending for the dollar bond payments. when we asked them about their plans regarding the $15 million bond interest that was due they said it was unlikely to honor all their debt payments on time. that sets him up for this first-ever public default. kriti, you have to put this in the context of the broader property crisis that china has been going through. we have been waiting for more on country garden for quite some time and it seems we have our answer. this is coming as date this morning from china was largely positive but ultimately pointing to severe concerns in the property market as we saw investment fall. we have not seen sales pick up. all of that shows you the

property sector is still struggling in china right now. kriti: what is not struggling as the data though and that is what is interesting because we are talking again about the broader economic concerns but then you look at numbers like gdp, industrial output, etc. and there is green on the screen. the market is not digesting it. how do you square the two? jill: at this point you are looking at a two speed recovery. you have the property sector in crisis but a big lift to gdp numbers today with retail sales. we saw a pop in september of 5.5%, higher than expectations and is giving a left in large part because people were spending a lot more on restaurants and alcohol and food and cars even got a left -- a lift. there is a pickup in industrial production figures and i have to say though that -- you saw some

of those impacts dragging out -- kriti: jill disis than hong kong and we are having technical difficulties there. she is making the point that you are seeing stronger economic data. it is not reflected in the markets. we saw green on the screen but a lot is going on in china and we will see if we can get her back for more context. breaking headlines, earnings numbers out of volvo trucks specifically third-quarter net sales coming in at $132.4 billion -- swedish krona in the estimate was 120. we are seeing a beat on those numbers we will see how it trades after the european market open. there operating margin is 13.8%, a 10.3% estimates. they are really not only seeing good demand and good profits but actually making more on each additional unit.

we will bring you more analysis as we get it and get to the opening bell. coming up, we are talking about the banking sector. goldman sachs suffering the eighth straight were truly profit drop. we will break down the latest big u.s. bank earnings next. stick with us. this is bloomberg. ♪

>> two different banks taking us deeper into earnings season. goldman sachs where the story remains some part -- subpart probability. it is less than half of the target. the chief executive officer david solomon continues to plead patients on the pivot and the consuming lender back and unwinding its bets and turning into this reliable machine that can make profits in good times and bad. on the other hand, you have bank of america, one of the worst performing big bank u.s. stocks

this year, down 20% and down even more the previous year. this time around, after earnings, the stock had a bounce because net interest income came in ahead of excitations. they had a blowup trading quarter driven by the massive beat on the equities trading desk which was a record third-quarter for that group. however, the big thing hanging lower is the held to maturity portfolio and the drag on earnings potential with so much of that book still stuck in low yielding paper in the 5% world. ♪ hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change.

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let's get to the top stories that set your agenda. tensions in the middle east higher after hundreds are killed in a gaza city hospital blast. hamas and israel trade blame. joe biden set to arrive in the region, egypt, and the palestinian authority after they all pull out of a summit. distressed chinese developer country garden on the brink of its first default saying it is unlikely to honor -- unpaid bonds. risk off seems to be the tone around the world. futures trading right now seeing a slight green on the screen for ftse 100. keep the volume in mind because there is a real investor caution at play. if you look at the volume on a five day basis, we are seeing it down between 10 and 30% on the major global benchmarks. it is a buy everything sell

everything mentality. especially clear in the asian session where you are seeing volume dropping by 20% on the hang seng index. down 0.1%. this comes in light of positive economic data in china. the idea the industrial production numbers, the retail sales numbers, all coming in better than expected. yet here we are. context is everything. we are also watching the currencies. dollar-yen shy of the crucial currency intervention level for the boj. they are coming out in two weeks time with the next decision. plus dollar yuan, 731 on the currency. let's go cross asset because the bond market matters. does the federal reserve hike in the face of geopolitical risk? that seems to be the question especially now where the geopolitical risk is heightened, especially with president biden actively in the region, an

active war zone. the two year yield down two basis points. the cable rate is important. u.k. cpi coming in. plus euro dollar on the horizon. how much pain do we see in the euro once we find a humanitarian solution to israel? interest rate differentials kick back into the market drive with brent crude off the geopolitical risk higher by just shy of 2% trading at the 91 handle. let's go to our top story because it is a humanitarian and a tragic crisis we are monitoring in the middle east. hundreds of palestinians have been killed in an explosion at a gaza city hospital. that according to officials in the hamas-controlled territory. the palestinian authority and countries including jordan, egypt, and turkey have blamed israel. >> what happened tonight is a great tragedy and a horrifying massacre that cannot be ignored or allowed to pass without accountability. aggression against our people

must stop. these crimes must come to an end. kriti: israel denies responsibility with prime minister benjamin netanyahu posting on x saying the entire world should know it was barbaric terrorists in gaza that attacked the hospital in gaza and not the idf. let's get the latest from bloomberg's stuart wallace. there's a lot of blame being thrown around. what is the latest on the blast itself? >> there is still no clarity with both sides saying it was the other. as you have mentioned previously, the hamas side saying it was an israeli airstrike, israel saying it was a missile from within gaza. that is from -- there is really no clarity on which it was. what we do know is that this incident has really derailed efforts, diplomatic efforts to try to contain things. you mentioned a summit in oman

is being counseled. the idea, with antony blinken touring the region, is to contain the damage the best they can to stop it spreading. this sort of incident has inflamed tensions across the region. you see strongly worded statements from the capitals. you have seen protests around the region. there is a sense that if this sort of incident is repeated things are really going to get out of hand. one element i would urge you to look at just as a gauge of the risk and the rising risk is the oil price. that is up sharply today and that is a reflection of people looking at the region and saying, how far could this spread? kriti: in response to the turmoil, there was a thought that having president biden and other major officials of the united states in an active war zone would be some sort of deterrent. now the summit in jordan has been canceled.

what are the next steps? >> it is much the same as before. i suspect what you will see over the next several days is a ratcheting up up diplomatic efforts. we have european leaders coming. it does seem carefully choreographed to have a succession of leaders coming. on the one hand to urge restraint on the side of israel. on the other again as we saw with blinken, touring the arab capitals, just to try and contain the situation and stop it spreading. we should expect more of the same on that front. at the same time as you know we have had this buildup with gaza. the mood within israel has not necessarily changed a great deal. i'm not sure headway has been made. we will watch and wait. but it is the sort of incidents that really raise the risks in the situation. kriti: a crucial situation of course as you mentioned. stuart livingston wallace joining us this morning for that report. we thank you was always for the

update. i want to go from the middle east to what the eu says about the middle east. leaders have condemned the deadly strike on the gaza hospital. let's go to maria tadeo standing by in brussels. what is the take from those eu leaders? >> there was a meeting yesterday that took place with the 27 leaders. we should note the video conference which was precisely called to this crisis happened before the news of the hospital being hit. the mindset, the calculus this morning is very different to where it was yesterday. certainly the risks are manifesting and manifesting greatly. i should note however, just this morning we do have a tweet by the head of the european commission. yesterday she was not in a position to comment in the evening. now she says this morning having gathered more facts, she is

saddened by the strike and she says there needs to be a full investigation and whoever did this has to be held accountable for this. a delicate balancing act for a lot of european leadership at this point which obviously has to support israel but at the same time it needs to show the values, the european union say they respect greatly, they are doing the most to support, especially when it comes to the civilian population. speaking of, we have response from the french president, who also says when you hit a hospital and you go after civilians, that is not just problematic, it goes against every international piece of law when it comes to war. he also says humanitarian corridors need to open as soon as possible. the issue, and i was told yesterday by european sources, the egyptians hold the key to this but they are worried about the number of people that may enter the country. they are worried about things

like permanent relocations. they are to some extent overwhelmed by the prospect of mass exodus of people. that continues to be a flashpoint. >> we know there were strong comments out of egypt, thought of as location number one. saying where is europe in all of this? you can follow the developments in this story and the others in today's edition of daybreak. terminal subscribers, type dayb go on the terminal. it is a top story we are monitoring across bloomberg on our various platforms. we are very closely watching what is coming on in -- what is coming out of china. diplomacy probably not doing as well. chinese president xi jinping has laid out steps to strengthen its belt and road initiative including drifting curbs on -- lifting curbs on foreign manufacturing. he spoke before world leaders at

the forum earlier today. >> doing others development as a threat. taking economic interdependence as a risk. we -- will not make one's own life better for speed up one's development. kriti: let's get rebecca choong wilkins joining us from hong kong. pleasure to have you on the program. walk us through the key announcement the chinese president made at the opening ceremony. rebecca: we did not see any concrete announcements on specific policies. we did see this big celebration of the bri and xi jinping trying to sell this alternative world order to his audience. it was also that thinly veiled swipe criticizing those who try and challenge economic independence, interdependence, excuse me, aimed at the u.s. and attempts by the u.s. and allies

to curb investment restrictions and so on to china. the other more concrete element we did have was this plan to form a secretariat, essentially another forum for china to extend its power among friendly partners and friends. similar to other global initiatives it has at the moment like the sco and so on. kriti: are they big enough to bring china out of its slump? we hear they are making these big bids. are they going to be able to live up to the big talk? rebecca: there has always been this question about just what economic benefit china gets from the bri. experts have struggled to calculate how big it is, let alone the specific economic benefit. i think the emphasis has already shifted. for the bri we have seen activity among members down 40%

from the 2018 hi. there's already been this calibration in how much china is able or willing to spend in these contexts. the bigger emphasis for beijing i think is that china is committed to the international world order. it is committed to remaining integrated, open financially, and it is such an important message for beijing that is coherent with that broader message we see that china is open for business, to foreign businesses in particular right at this moment when policymakers are struggling to get the chinese economy back on its see legs. the more important message is the one about china being open for business and being open to the international business. . kriti: a lot of global investors look at the belt and road forum it almost brush it off because it is so oriented to emerging markets and frontier markets. then you have to pay attention

to how much that contribute to the chinese growth story which has ripple effect around the world. rebecca choong wilkins with crucial reporting. we thank you for joining the program. china is playing a big role at asml resulting in disappointing order bookings, the worst since the second quarter of 2020. this is bloomberg. ♪

kriti: asml's third order bookings fell more than 40%, $2.8 billion. substantial drop. the lowest since the second quarter of 2020, a massive deal. let's go to april roach for more standing by monitoring those earnings. i love this company.

from an investor point of view. when you look at whether you want tech exposure people think from an american exposure you hop into apple, amazon, nvidia even. and if you really want exposure you hop into the chip market. if you want to magnify that you go into the chip equipment makers. but then asml puts outperformance like this. what did we learn from the third quarter? april: asml orders fell over 40% in the third quarter misting analyst estimates. this is a sign that demand for the chipmaking machinery is weak amid an ongoing sector wide slump in the semiconductor industry. asml said the lower order intake was as expected in the current environment as they are seeing customers being cautious with cash and cautious of putting in orders. the company did maintain its sales growth forecast for the year saying it sees sales growth toward 30% compared to last year.

kriti: do they make any forecast? is this a one time thing or is the pain going to continue? april: asml said it is still looking at an order book of 35 billion euros but as customers continue to be uncertain about the shape of the demand recovery , asml expects 2024 to be a transition year. they see that next year will be a pivotal year to prepare asml for what will be significant growth in 2025. the chief executive officer said there are taking a more conservative view and expected revenue numbers similar to 2023. kriti: it is important for the global audience to recognize that when you look at asml they are the main chip equipment maker for much of the world. the biggest customers are tsmc and samsung. is this truly an asia dependency story? asml has dealt with a lot of geopolitics. you happened covering closely --

you have been covering closely the idea of potential sanctions from the u.s. eating into what the bottom line might look like. i love this line in your reporting where you say asml's biggest customer tsmc dropped 11% in the third quarter. when i talk about the magnification of success and pain in the chipmaking sector, this is a great example. when it comes to the demand story what does the company say? april: when you talk about geopolitical tensions, the u.s. announced it is expanding the scope of manufacturing subject to export restrictions. asml said it is in the process of digesting regulations. in its preliminary assessment asml said the new rules affect a limited number of chinese factories that produce advanced semiconductors and it does not see a material impact on 2023. longer-term these rules would likely impact the regional split

up its system sales. were that currently stands china made up 46% of sales for asml in the third quarter which is up from the previous quarter. kriti: the number, to your point, we are showing the banner. the chinese sales made up 46% in the third quarter. thinking more broadly, the idea this becomes the sticking point between not just asml and its peers, but broadly between the united states and the netherlands, a conversation for another time. april roach bringing us that crucial reporting, we thank you so much. i want to stick with the chip story and talk about another major tech player. nvidia shares falling sharply in the u.s. session after the u.s. restricted the sale of the company is made for china chips. this is the theme we were talking about with april. it is aimed at protecting beijing's access to cutting-edge tech with military uses.

the company did warn the new rules could hinder product development as well as because of the difficulties. there's a lot to digest. this is the reiteration from the biden administration that you are going to see a lot of this chip manufacturing come under a magnifying glass from biden and his peers. something that has not differed much from his previous administration by the trump administration i should say as well. that's going to have a read across into sectors like electric vehicles, but also are highly dependent on that chip story, which brings me to the ev story. especially when it comes to tariffs. the german trade chancellor saying the eu could suffer -- they worn any protectionist move risks retaliation. >> germany's economy depends on open markets. we need access to open global markets.

we should guarantee a level playing field, but not work with subsidies or taxes toward each other. kriti: the german transport minister speaking to us talking about the tariff impact. coming up, we are going to go through the u.k.'s latest inflation print. is it going to ease pressure on the bank of england or are we going to have another round of deja vu? stick with us. this is bloomberg. ♪

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kriti: welcome back to daybreak europe. european central bank governing councilmember robert holtman

says inflation has not been defeated just yet. additional price shocks could require further increases when it comes to borrowing costs. he spoke on a panel at the austrian central bank chief saying quote in regards to inflation, we are not yet out of the woods. this seems to be a common theme around the world as we talk about, do we, do we not hike? all that rhetoric at a time by the way we are talking about higher geopolitical risk and higher oil prices on the back of it. let's bring the conversation here to the u.k. where inflation is set to slow, signaling price pressures are may easing further in september. what are we expecting in six minutes time? lizzy: inflation data have surprised economists in both directions in recent months but the expectation today is that inflation pressures will have eased in september. we had jobs data yesterday,

wages showing more cooling in the labor market. today the expectation is the rise in fuel price growth will be offset by food price growth and also crucially core and services inflation easing. that would mean the bank of england could hold rates perhaps at its next meeting at least a 6.6% reading today which is what economists expect would give a sense of vindication to those who voted for a hold at the bank of england's last meeting. it still is a live debate. you have chief economist huw pill saying half of previous rate hikes have fed through. the big dove on the committee says only a quarter of them have fed through. i should also say this is politically important because of course it is rishi sunak's number one priority to halve inflation but our economists reckon he is on course to do that. that inflation cpi is going to

be about 5% by the end of the year. in fact dropping below that. kriti: i'm going to bring around the markets component because we are going to see a real impact in the cable rate. we are looking at 121. the fact you could see inflation -- we know it is decelerating. is it going to decelerate by the right margin? the back, do we see strength? lizzy burden all over the u.k. piece of the global inflationary story. i want to get a quick check on the oil markets. one of the concerns, creeping back into the markets, is if you are talking about hiking, increasing rates not just in the u.s. but in europe, england, even asia, the issue is how much of that is commodity driven? one of the bull cases for oil is higher sanctions hitting iran might actually create a tighter supply picture magnifying the pressures you are seeing within the opec-plus complex.

iran is making 11% of opec-plus output globally. if you start to see the pressure, brent crude closer to $100 a barrel, and if you do, at what point does that factor into the economic data, the gasoline prices, the presidential elections by extension? a lot of ripple effects. stick with us for bloomberg. we are going to walk you through all of them in the coming hours. markets today starts in a couple of hours. stick with us. this is bloomberg. ♪

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anna: this is "bloomberg markets today." mark cudmore joins us from