it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything.

kriti: good morning and welcome to "daybreak: europe." a dovish pause. markets are interpreting it yesterday's fomc decisions, spurring a massive bid into the bonds and equity markets leading into today's session, but the boe is next. investors are expecting the central bank to hold as u.k. economy and inflation are weakening. in the middle east, president biden calls for israel and hamas deposit fighting so help in gaza can be freed as more foreigners leave through the rafah crossing. the fed is driving the action across markets. euro stoxx 50 futures higher by 0.7%. s&p futures also higher by 0.2%, this idea that this dovish pipit

or the way the markets are interpreting what powell had to say are moving in bonds and stocks, a little bit of a pullback in the dollar. dollar-yen hovering around the 150 mark and weakness on the dollar is where you will want to keep your attention because it is against the major g10 currencies, down 0.3%. brent crude trading with the 85 handle, higher by about 0.8%. it is all about what chairman powell said. is another hawkish take necessary if the other markets are doing the work for it? take a listen to what he had to say in yesterday's press conference. >> persistent changes in broader financial conditions can change the path of monetary policy. what we are seeing from higher long-term rates but also other sources like the stronger dollar and lower equity prices could

matter for future rate decisions with financial conditions, looking for consisting is -- consistent changes. kriti: the idea that the long-term selloffs in rates are doing the work for them, but the commentary, pushing the two year yield down. in two days, a 13 basis point move lower. that will be a major conversation for the markets and corporations. i want to bring you breaking headlines as well because ing has put out their numbers. they are announcing a 2.5 billion euro buyback program. the expectation was somewhere between 1.5 billion to 2 billion euros, so that will be a surprise. their net income also coming stronger, beating other net income, so strong numbers across the board. again, some good numbers and

their loan loss provisions had 183 million euros, so the loan loss provisions are significantly lower than what we were expecting. joining us now is the cfo of ing, tanate phutrakul. he joins me this morning to break down the numbers. congratulations on the strong postings for the third quarter. let's start with a buyback number at that is what is catching the market by surprise. 2.5 billion euros. why that amount and why now? tanate: in terms of the context, it has been a good quarter for us. we have generated strong revenue growth, 32% increase year on year. our cost are coming down as inflation comes off and risk assets are doing well, all of that amounting to strong capital generation, and that allows us to do this share buyback of 2.5

billion. that is our second share buyback this year. kriti: the second share buyback this year, but how much of that is at the whim of the net income that you are making? how much of that is simply a function of rate? we were talking about how chair powell has set the tone for rates coming down or not going any higher. talk about this momentum and how sustainable it is when it comes to your net interest income. tanate: i think if you look at our third quarter net interest income, it remains strong and resilient, growing by 21% year on year. the ecb rate has paused. that pause means that our deposits margin is likely to be under some more pressure, but having said that, i expect the rates to be higher for longer, and that gives structural support of our net interest income going forward.

kriti: you mentioned the ecb and it is not a surprise when people are talking about which g10 economy is going to crack first, europe immediately comes to mind. do you feel confident in your loan book right now? why do you feel that perhaps the macroeconomic issues that are happening specifically in europe , how recession proof is your loan book? tanate: our view about the overall picture is one of caution. we do recognize that geopolitics is getting more uncertain. the path for gdp growth or declines is getting more uncertain, but within that context, we have a well diversified lending book and a very strong track record of credit management, and that has served us well in many cycles, including this one, so we are cautious, very prudent, and at the same time things have gone well for us during q3. kriti: you say cautious and

prudent, yet when you look at your loan loss provisions, i am looking at a number of 183 million euros. the market was estimated 348 million. that is a substantial cut when it comes to loan loss provisions. why? tanate: it is really a reflection of our client base and our franchise. we are as a company always lending to investment grade companies in a secure position, so these are things that ing has been known for and operating well in terms of credit management over many cycles. kriti: many cycles, but where are you allocating those loan loss provisions to? what part of the market are you worried about? tanate: i think we obviously have half in wholesale banking, half in retail banking, and to

have something performing on the wholesale banks, nothing that would be called a trend, but there are of course areas where we have been careful with, one of which is commercial real estate. we watch that carefully in terms of that exposure. kriti: speaking of the commercial real estate, that comes at the function of interest rates. i want to circle back to that point, the idea that if you are preparing for a peak in net interest income as a function of the rate story we were talking about, how do you deal with something like that? how do you prepare in terms of growing fee income or incoming costs? how do you keep profitability at the levels they are at right now? tanate: i think we focus first on the customer. we have 38 million customers worldwide, highly diversified, 30 -- diversification in terms of product angiography, and that has served us well. we have a strong funding base,

relying on retail deposits as funding the balance sheet, so that has served us well. it is the diversified business model through a highly digital distribution tanner -- channel that has served ing well in the past and will do so going forward. kriti: that exposure to a retail based does not exactly recession proof the book. we talked about your loan book and the fact you gear some of your investments to investment grade and shoring up that credit facility, but when you're talking about your retail base, that can deteriorate quickly with macroeconomics. how are you hedging it? tanate: we obviously have done this a lot time. we hedge our interest rate risks and we have a very diversified liability book. as i mentioned, it is very granular retail deposit book, over 38 million customers in many geographies. that has stood us well through many disturbances, whether

through covid, the situation with credit suisse, and has remained extremely stable and is a core part of our franchise. kriti: understood. our final question when it comes to the regular buybacks, you set at the start of the interview this was your second buyback this year. are you worried about the regulators coming for that or making it more difficult if you keep announcing those regular buybacks? tanate: not at all. we keep our regulators well engaged and this 2.5 billion share buyback has the endorsement and approval of the european central bank. kriti: certainly something we will keep tanate phutrakul a very close eye on. tanate phutrakul, -- certainly something we will keep a very close eye on. tanate phutrakul, the cfo of ing. the bank of england will likely follow the fed in their footsteps on rates later. we will turn our eyes onto them. this is bloomberg.

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kriti: we are looking out for bank of england decisions later, right on the footsteps of what the federal reserve came out with yesterday. bloomberg economics and every economist in our survey expects rates to be held at a 15 year high. here with us is bloomberg's lizzy burden. walk us through what we are expecting today. lizzy: the predictions are pretty unanimous and it seems we are at the peak of table mountain, this flattop where rates are going to stay. that is not a dot plot, i do not know what is, but this means that the focus, if it will be a hold today, in terms of the forecast and whether the bank of england expects a recession for the u.k. economy, and therefore when the cuts will come. andrew bailey has said that talk

of cuts is premature at this stage, echoing christine lagarde, the ecb president on that front, but currently markets are pricing two rate cuts next year, and that would take the key rates to 4.7%. politically, that would be welcome for rishi sunak because there is a general election on the horizon, he has got to call it by january 2025, and he will want rates to come down, that to be the backdrop of that election. will be interesting for markets today is whether the bank of england projects that inflation is going to fall below its 2% target because that could mean investors doubled down on their bets for cuts and you could see a spark in the rally of gilts. kriti: something we will be keeping a close eye on. lizzy burden on that story and we will bring you the boe rate decision live at 12:00 p.m. u.k. time.

i want to build on lizzie's announcements and talk about the federal reserve as well. i am joined by daniel vernazza, chief international economist at unicredit. we start with the boe. a consensus that they are going to hold rates. why, if they were so worried about this lag for so long? daniel: they said what has come recently has been in line with expectations and inflation is coming slightly below what they expected, both the headline and core inflation and including the core services component, which is a more consistent component of inflation. economic activity is weak. we have had a big fall in output in july, and a modest recovery since then. the business surveys that we are getting, the pmi's, they are weak and remain below the 50 level, which is the difference between contraction and

expansion. so they are in contraction territory and they have been now for three consecutive months. the outlook is deteriorating as those passed rate hikes their way through the economy. kriti: have they worked their way through the economy? let me play devil's advocate. two months ago, we were talking about a hot housing market, resilient english and british consumer. where did that go when you are still seeing housing prices in this country high, food costs high, the cost of living crisis still prevalent? why pahs when it feels like the work is not done -- costs

high, the costs high, the cost of living crisis still prevalent? why pahs when it feels like the work is not done -- pause when it feels like the work is not done? daniel: we costs high, the cost of living crisis still prevalent? why pahs when it feels like the work is not done -- pause when it feels like the work is not done? daniel: we expect headline inflation to fall rapidly in october, the base effect, but also falling gas and electricity prices. good prices are now falling in the country and core goods prices are coming down as we see that in the producer price index, so we see that in the producer price index, so there has been progress on input price inflation. we think that will come through to cpi in time. meanwhile, the housing market is weakening. meanwhile, the housing market is weakening. you look at the rates balance and that is very weak indeed, back to this sort of level that we saw in the great financial crisis. the housing market is weak and services activity is no weakening. kriti: let's bring the market reaction to it as well, coming off the heels of the federal reserve decision yesterday. one of the big topics was how much the bond market chaos we have seen the last few months is impacting the rate hikes story. it is something you heard from the boj earlier this week as well. they said the selling and the momentum you thought the last couple months actually led to the selloff of the jgb's as opposed to the japanese fundamentals. i will not ask you about japan, but i will ask how much that applies to the bank of england. how much are you worried about the bond read through? daniel: it is important and has

already started to impact the mortgage market. we saw in the u.s. yesterday a federal reserve that signaled the most important change, was the inclusion of the financial conditions, the tightening of financial conditions and the impact that is likely to have on economic activity and inflation and the dampening effect that will have. that is why they have paused to wait and see foreign impact to come through. similarly for the bank of england, much of the impact of past rate hikes has yet to come through. we have seen that in the housing market but also elsewhere as fixed-rate debt rolls over and is remortgaged or at higher rates. kriti: a structural quirk of the british economy. let's talk a bit about the idea of the lag. you said it will still take time for rate hikes to go through. is the u.k.'s lag longer or

shorter than the rest of the world because of those structural quirks? what timeline are we looking for for the full effect to come through? daniel: effect through the housing market is a bit shorter than what we see elsewhere because the mortgage market in the u.k. tends to be short-term fixes, two or five year fixes, whereas elsewhere, particularly the u.s., there is a common length of fixed-rate mortgages at 30 years. it comes through quicker. that said, compared to the past, the prevalence of fixed-rate mortgages in the u.k. is higher than it was the prevalence of mortgages that all that was lower than it was in the past. we have had structural change in the u.k. markets which suggests that channel will longer to come through. he also have these buffers which we have not had to the extent of the past downturn. so the savings buffer, which we now think is exhausted in the u.k. and the eurozone, but there

is still something in the u.s., that means we have not yet seen big falls in output. that has supported the economy, but going forward we think we are going to see more weakness in the u.k. in particular because those buffers are now eroding. we see the labor market, though there are question marks over the data in the labor market in the u.k., but inflation is falling and we have seen a turn. kriti: when you mention the labor market in specific, let's talk about wage growth because when you talk about the hurdles dissipating and savings going away as well, it feels like there would be more pressure for people to ask for more paychecks , look for better jobs, creating a tighter labor market but also pressuring wage growth as well. is that something andrew bailey should be weighed about? daniel: if we look at the data we have come everything is rivaled. vacancies have been coming down for a while now, so it does feel

like there is a loosening of the labor market. the unemployment rate is up to 4.2% from a low of 3.5%. that is a meaningful increase and economic activities are broadly flat over the last year. that is putting output pressure on the unemployment rate. we have had an improvement of labor supply as well, so that has pushed up the unemployment rate, but what we are seeing in the u.k. is more resistance to what we have seen in euro or the u.s. wage growth in the u.k. is higher than it is in the u.s. or the euro zone, so the services inflation is higher and that reflects the tighter labor market in terms of the wage growth. that means the bank of england is likely to cut later than the fed or the ecb. kriti: let's see if all of that proves true. daniel vernazza, thank you for walking us through this crucial boe day, the unicredit chief international economist joining

us this morning. there is a lot to digest as well. i want to bring you some sound from barclays. barclays saying it plans to spirits asia business from the bulk of job cuts as the bank embarks on a reduction in its global workforce. their cfo shared the outlook on the region from their asian forum in singapore. take a listen. >> it is reduction in the workforce, generally speaking. in asia, we have very booming economies and we also have a very growing business. personally, it is far less likely to impact this region. kriti: the barclays ceo speaking to bloomberg. stick with us. more ahead. this is bloomberg. ♪

kriti: u.s. president joe biden says israel and hamas militants should pause fighting to allow time to free hostages held in gaza, but stopped short of supporting a full cease fire. it comes after egypt opened its rafah crossing yesterday, allowing an initial group of people to flee the fighting. let's get more with bloomberg's oliver crook. bring us the latest from where you are. oliver: it was a really meaningful step yesterday when we had the first flow of people from gaza going into egypt. our focus so far has been the flow of aid from egypt into rafah, but there were two categories of people that were allowed to cross the border. they were the wounded. we had egyptian ambulances coming into gaza to pull some of the wounded out to go to a field hospital in northern egypt, but also the foreigners.

we had the first flow of people who hold different passports come out of gaza and into egypt, and we got the list again overnight from the gazan crossing authorities, 596 names of people that will be permitted to cross the border today. for hundreds of those -- 400 of those are american citizens, those that we know so far that are still in gaza. this as the fighting is intensifying in the north around gaza city. we understand from the idf that many of these soldiers have reached the gates of gaza city. again, this comes all as blinken is to arrive in the region tomorrow. he will come to israel and also go to jordan. it is a crucial time diplomatically and frankly a much harder time diplomatically than the last time he was in the region. first of all, it has been almost a month since the attacks on october 7, and the focus for many of the neighboring countries is shifting to the humanitarian situation in gaza where according to the u.n.,

more than 8800 people have been killed so far, two thirds of which are women and children. this is all brought home by the fact that the jordanians pulled their ambassador from israel yesterday, jordan one of the first countries to make peace with israel in the 1990's, so this is a significant step did have heard from the jordanian king that there has been a difference in the way the west is treating the palestinians and how it is treating the israelis. this comes as netanyahu has reaffirmed this week that no matter who stands with israel, they will take this fight to the end and to victory, but if he is not willing to dial back on the military front, perhaps the idea of humanitarian pauses will get more credence to get more aid into gaza. kriti: certainly something we will keep our eye on. oliver crook live for us from tel aviv, monitoring the developments. in the meantime, a quick check

on the markets because although the geopolitical risk is part of the market narrative something driving markets this morning is also the federal reserve, the idea that markets are interpreting what howell said as a dovish pivot, creating a bid into the equities and bond market. pulling the dollar lower to the point they are seeing the dollar-yen at 150. s&p futures higher by 0.2% and you are -- euro stoxx 50 futures higher by 0.6% as well. more analysis coming up. stick with us. this is bloomberg. ♪

kriti: good morning and welcome back to "daybreak: europe." i am kriti gupta in london. it is a dovish pause, or at least that is how markets are interpreting yesterday's fomc decisions, spurring a bid into the bond and equity markets around the world. the boe is next. investors expecting the central bank to hold as evidence grows the u.k. economy and labor market are all weakening. in the middle east, president biden calls for israel and hamas to pause fighting so the hostages held in gaza can be freed. it comes as more foreigners leave through the rafah crossing. a quick check on the markets because there are a lot of crosscurrents. you have the geopolitical and monetary headlines, all of which is leading to green on the screen for the bond market and equity market. the idea that euro stoxx 50 futures are higher by 0.6%, s&p futures higher as well, but it

is the bond market catching attention because people are interpreting travel's comments as hawkish pivot -- powell's comments as a hawkish pivot, bringing the dollar lower as well and creating the dollar-yen at 150. brent crude trading with the 85 handle. i want to bring you some breaking earnings headlines that we are getting. novo nordisk coming out, talking about the wegovy sales. the weight loss drug has been in the news for quite some time. the sales coming in at 9.7 billion and the estimate was for $8 billion, so those coming quite weaker as well. operating profit coming in at 27 billion. the third quarter sales dropping as well, but when you look at the drop of cost in fx, we were looking at 32%, but it is those ozempic sales coming higher. the wegovy sales coming lower as

well, so there is a lot to digest when it comes to the earnings picture. something that a lot of other companies are adjusting their market narrative as well to keep on to. we will be speaking to the cfo of novo nordisk breaking down the numbers further, that interview coming up at 9:30 a.m. u.k. time. we also have the earnings numbers slowly's trickling out from hugo boss as well, the third quarter sales coming in at 1.0 3 billion euros, in line with estimates of 1.0 2 billion. they are even coming at 1.3 million, slightly higher than the estimate, confirming their full year outlook, so a slight margin growth when it comes to their ebitda. we will bring you more numbers and headlines but we will also be speaking to the cfo of hugo boss shortly. you will not want to miss that interview in seven minutes time. i want to go from the micro back to the macro because everyone

cares about the margin pressure or margin growth, but we also care about the bond market, how much of the work is being done by the markets for the federal reserve. that is the commentary that changed the game when it came to how the fomc press conference was interpreted yesterday, the idea that pushed yields down almost 12 basis points on the idea that chairman powell and his colleagues are taking a dovish tilt after tackling inflation head on for a long time. it is not just the markets that are top of mind, but geopolitics are equally a concern. listen to what chair powell had to say yesterday. >> global geopolitical tensions are certainly elevated and that goes for the war in ukraine, the war between israel and hamas. we are monitoring that and our job is to monitor those things for their economic occasions -- economic implications. kriti: joining us now for more context on the geopolitical risks, h.r. mcmaster, senior

fellow at stanford hoover institution and the former u.s. national security advisor. i want to get to the geopolitics because the conversation over in israel and washington, d.c. is whether or not a humanitarian cease-fire is the right move as some of the hostages and some of the people, civilians are rescued from the region. your take on the debate? h.r.: i think it is the wrong debate now. the debate ought to be about how does israel continue its campaign to destroy hamas. and anybody hates to see the horrible human suffering in gaza, but it is important to place the blame on hamas. if you are pro-palestinian, you have to be anti-hamas, and the context for this is obviously the october 7 attacks, which when adjusted per capita, was the equivalent of 33 9/11's, so

it is unrealistic to ask israeli leaders to take a pause. it is also important to pay attention to what hamas is saying in english, which is we want a cease-fire, and what they are saying in arabic, which is every day will be another october 7. i don't think israel has much of a choice. kriti: you say that and it is true that i think there is a global consensus among major economies in the gulf and around the world that hamas is the issue.. but how do you tackle that? i bring a quote from hillary clinton who recently spoke at the recent gala and says the people who are calling for a cease-fire do not understand hamas at all. he says it would be a gift to hamas because they woods and whatever time there was a cease-fire to create stronger positions defend off an assault from the israelis. if that is the case, how do you address hamas?

h.r.: clinton is right about that. the only way to destroy hamas is to destroy the organization. this is a terrorist organization trying to use the palestinians as human shields. they are denying them the ability to evacuate. there is a lot more work to be done to create safe places for refugees to go and be able to screen them as they depart the area where hamas has built this massive infrastructure for the purpose of destroying israel. it is important to note israel left gaza in 2005, hamas took over in 2000 six, and in the hamas charter, they are dedicated to the complete instruction of israel. they are in essence a death cult and they are talking about their willingness to give up more and more martyrs. what they are talking about are the innocent palestinian population, which they are all willing to sacrifice in this

messianic, perverted objective of destroying israel. kriti: but in the process of doing that, to your point, civilians are the first and foremost at risk. do you feel like the idea that there is that human toll and the fact that the united states is still supporting israel to tackle hamas, even if there are civilians at risk, to what extent is that resulting in a loss of credibility for the united states not only from its counterparts in europe more specifically to its counterparts in the middle east? h.r.: i think it would be an even greater loss of reputation if we were to abandon israel or work to try to force israel to engage in a cease-fire. what the israeli government has set out as their objective is the only plausible objective based on hamas' horrible attacks against israel as a complete

destruction of the organization, which means the organization can no longer be a threat to israel and lists it completely reconstitutes. but there will have to be is some kind of controlled mechanism in gaza with a peace enforcement force that hopefully has some degree of legitimacy with the palestinian population, can receive aid and make sure that eight is not diverted as hamas diverted that aid into its terrorist capabilities rather than for the good of the palestinian people in gaza. so with the tens of billions of dollars that have gone into gaza, the gazan people should have a much better quality of life. instead, they have been under the dictatorship of this terrorist death cult since 2006. kriti: that brings me back to the geopolitics of it all. it is not a secret that this is a tragic humanitarian situation, but talk to us about the united states relationship with the middle east.

in the process of sorting out the refugees, sorting out the hostilities and the hostage negotiations, the summit in oman was campbell -- canceled one the is really ground offensive was first brought up. leaders from saudi arabia has not been speaking from -- have not been speaking with president biden. the you feel like the middle east and the united states have been losing the partnership which has been built up for decades? h.r.: you are right for the critical battleground is the battleground of perception, and that is why it is important to keep talking about october 7 then talking about the nature of hamas. again, if you are pro-palestinian, you have got to be anti-hamas, and i wish that the governments in the region would do a better job communicating to their own people about the nature of the problem that israel faces. i believe in the long-term, our interests are aligned with the gulf states, are aligned with

israel's arab neighbors because the hand behind this is iran. iran is using these proxy forces to execute what it calls its ring of fire strategy to destroy israel. it is really important to look at the statements by hamas and also look at the statements by iranian leaders, especially this supreme leader, and it is clear to me that iran is using these proxy forces to create a cycle of violence in the region, here between hamas and israel, but elsewhere in the region between various militias and sunni arab groups in syria. they have perpetuated this cycle of violence and episodes of mass homicide in the syrian civil war. have perpetuated the civil war in yemen and are supporting the houthis. they have been attacking our

forces, and now they have everything the way they want it from tehran's perspective with the protests in arab capitals. what iran wants to do is keep the arab world perpetually weak and enmeshed in conflict so it can place proxy armies on the border of israel. they are executing that strategy, creating this regional war. what president biden has done to go to israel, to position additional u.s. forces there to deter an escalation, but i think this is sadly a conflict that is likely to escalate at least within the region. kriti: it absolutely is and you made the important point about risk of that regional escalation. if i can, i would like to pivot the conversation quickly and ask you a final question on china. it has been conversation with all the geopolitics in the war -- world, you mentioned the iranian risks and ukraine and

russia. there is also this constant risk of china, the potential invasion of taiwan and where the united states stands on that, even the military drills being carried out in the south china sea right now, but i have to ask, there is also concern about how prepared in the worst-case scenario the united states is to take on an invasion of taiwan when at the end of the day, pacific command is the least funded part of american defense. your take on the south china sea question? h.r.: what is most important is we portray strength and we develop strong defense capabilities. that is the big lesson of the re-invasion of ukraine, that the perception of weakness is provocative. and we are entering a dangerous period. where these hostile authoritarian regimes will take advantage of our preoccupation of one area to try and accomplish their objectives in another. in the people's liberation army,

navy, and air force have become very aggressive in the south china sea, recently ramming a philippine vessel, for example, and they have engaged in hostile maneuvers against u.s. forces. the lesson is, we are not ready. we have been too complacent and we need to expand our defense industrial base and take seriously our forward position military capabilities as many of our allies have. japan, for example, doubling its defense budget. we are in a race to establish a strong deterrent capability because of the massive people's liberation army build up but also the decision to be so aggressive on the part of the chinese communist party. kriti: certainly a lot of people would be interested in what you have to say, the lack of preparedness is what is creeping up especially when talking about defense part -- defense budgets. h.r. mcmaster joining us from

the barclays asia forum in singapore. thank you for joining us on the program. stick with us. this is bloomberg. ♪

kriti: we did also get earnings 15 minutes ago, this time coming from hugo boss, largely meeting estimates when you look at third-quarter earnings. sales coming in at 1.0 3 billion. they are talking about their full year sales also coming in line, solid numbers when you look at the earnings story. to break the numbers down further, i am pleased to say the hugo boss cfo yves mueller joining us this morning. good morning from london. let's start off with these numbers. these are decent numbers. you have met the wall street estimates. talk about what the biggest risk is. what are you worried about? yves: good morning from my side.

thank you. we have strong shown -- we have shown strong results so we have shown to you a growth rate of 15% in q3. this is a very strong number if you see this in comparison to other competitors in recent days. we have exceeded our topline performance and bottom-line performance. the good news is it is a broad-based growth, so we have growing for both brands, womenswear, even growing faster than menswear, and we are growing in all different regions bid all the investments we have done and that we are still doing for hugo boss are paying off. we are boosting our bands -- brands and we had a fantastic fashion event in milan in the fourth quarter. we have value positions in luxury, and we are moving forward, which is why we are confident today we confirmed our full-year outlook despite all

these risks you were talking about, macroeconomic risks, geopolitical tensions that you can feel all over the place, but still, hugo boss is strong at this moment. kriti: it is not a secret that it is simply because it feels like even if there is this decline in luxury, the likes of valentino and kering, hugo boss is actually re-accelerating, and that brings me more to your product mix specifically. talk to us about leaning into casual wear or more of a retail base as opposed to a luxury client. what does that pivot look like for you? yves: we have positioned boss as a 24/7 lifestyle brand, and this offers us a lot of opportunities. for example, if you talk about the u.s. market, we were growing 20% in q3, so that is actually a very strong number. we have a collaboration with nfl, so we have patrick mahomes

as one of our key celebrities. we have a campaign where bosses are born and made, so these are strong messages and that helps to make the boss brand cool again and we are back on stage again. if we talk about the product itself, we have a very good price value proposition in this affordable luxury segment, so we offer the top quality for the respective prices. our positioning is really great. and actually if you talk about -- if you talk about different products, we are 25% of our business is formal, 50% is casual and sportswear, and wendy 5% is shoes and accessories, -- 25% issues and accessories. suits are about comfort, so we are one of the top leaders in tailoring. this image of being a cool

brand, i think this is what is taking place in the last eight to 10 quarters. we have outperformed. kriti: i have to step in just four time, but i have to ask quickly about your retail presence as well. you are emphasizing your casual lifestyle, leaning into that concept. how does that translate into your retail locations and retail presence when it is widely understood that the brands who have leaned into the more casual wear and lifestyle brand have actually limited their retail presence? are you going to be doing the same? yves: we are still expanding retail wise, so we are standing now at 470 freestanding stores. he wants to expand it to 500. we still see opportunities in the american markets especially in the u.s. south belt. in china, we see more potential, so we are growing our retail space, especially in big cities

like london, paris, tokyo, shanghai, new york. we want to play a big role with the halo store and change our stores into points of experience and show the consumer that we are a real 24/7 lifestyle brand. kriti: certainly something we will be monitoring closely. yves mueller, thank you for joining us on the back of some very strong earnings as we have discussed. luxury space, the macroeconomic risks, and how that fits into the market narrative. more after this short break. this is bloomberg. ♪

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kriti: the netherlands goes to the polls later this month. the person aiming to be the country's first the mall prime minister joined me on a discussion for the exports to

china. netherlands and the company asml is being put in a precarious position between the two largest economies in the world. >> it is crucial for the netherlands but also for europe to combine our strength, so asml is very important globally and it also has created thousands of jobs, so obviously we wanted to succeed and begin is in our country to flourish. at the same time, we see a very difficult international context, and for us, it is important to make sure that asml and companies such as asml will have their unique position in a manner that they can also compete. they can do their work, and make also europe and our country as independent as possible from regimes that you do not want to be dependent on. corona showed us that we are way

too dependent of countries who we do not want to be depending on, and ukraine and the harsh war that russia started also showed us that. these are the lessons and we are right now looking at our country but also with european countries around us, what can we do even better to make sure we are not stuck between those powers and we are as independent as possible. that is also a case of being very realistic and also looking at our own laws and rules on what we need, so we are in the middle of that context, actually. kriti: with all due respect, that is not what i asked. i am asking if you are supporting the restrictions on exports the united states is placing when it comes to chinese exports specifically. dilan: if you look at the products which directly touch our national security which you are referring to, i think it is

good to be way more careful. that is why i am a little bit resistant to say yes or no because it would depend on the products and the issues. but i totally believe and agree we should protect our national security way more better than what we were doing, and that is what we are doing right now. kriti: dilan yesilgoz-zegerius, leader of the dutch vpd party and the frontrunner of the election that will happen in a couple of weeks' time. more markets and geopolitics ahead. "markets: today starts right now. this is bloomberg. ♪

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i am anna