>> good morning "daybreak: europe." let's get to the top stories is that your agenda. earnings and focus on both sides of the atlantic, we will bring you the numbers live from softbank and deutsche telekom as they break. meanwhile china slips back into inflation, the latest data suggesting that domestic demand remains sluggish after recent stimulus efforts to short growth. hillary clinton says both israelis and palestinians need new leadership to have any chance at peace. we are live from the bloomberg new economy form in singapore. good morning, let's get a quick check on the markets as we digest a lot of these crosscurrents. geopolitics, earnings, all that leading into a little bit of investor caution. if you look across atlantic, you are not seeing much action in s&p futures, even over in asia,

not major momentum in either direction. meanwhile the euro-dollar, same story, kind of sanguine, euro-dollar hovering at 1.07. rick is where it's interesting because were seeing it slit below that $80 a barrel level. higher by .2%. a marginal move in the context of what we sing. trade is muted in these early hours. softbank earnings coming out, i want to dive into some of the numbers. a loss of ¥1.4 trillion, versus an estimated loss of 129 billion in the first half. this is really important, as we talk about just how much pain were going to see. a 5% decline on a year-over-year basis, the dividend sticking

around ¥22 as well. it looks like shares or higher by 1.1%, but the loss not really that digestible by the markets just yet. as we get more headlines we will bring them to you. the major metals maker over in germany, those numbers coming out, third quarter ebitda at 1.9 million. the margin story is beating and that will be an important part of the equation. you're already expecting the margins would drop, so little bit of turnaround there. that will set them up fairly well to the opening bell, net profit about 929 million. were talking about slowdown in the chinese property market and the entire global economy.

we will get more details as we get them live right here on bloomberg television. as we get more earnings we will bring them to you, but for now, a quick check on the earnings out of japan. walk us through the numbers we are getting in your part of the world. >> have those numbers dropping from sony and honda. these japanese companies are expecting to show how the cheap in is boosting their earnings. instead what we are seeing is a miss of the ice -- a miss of the estimates, although there boosting the pool your guidance, both these companies. for sony, it's worth on pathing -- unpacking how are seeing that slow impact coming through its gaming business and it is also apple and the smartphone arena slowing, another factor to

figure into the equation. for honda, we are seeing how we have the toyota and mazda earnings previously, figuring into the earnings equation. it doesn't look like it is that much of a factor for honda this time around. even though there was an expectation that we would see robust sales, helping to lift its profits. it is worth noting that japanese stocks overall had been outperforming the markets today, especially on the nikkei, which climbed about 1.5% versus what we saw on the msci asia pacific, and this is coming in despite what we see on the chinese eco-data, slipping back into deflation, and a producer prices, a steeper decline as well. something to consider as well as we look at the stock benchmarks in china, mostly flat today.

perhaps these numbers might spur more stimulus from chinese authorities. kriti: think you so much for breaking down the asia trade for us from the micro to the macro. we are getting deutsche telekom earnings as well. the expectation was that they would have some sort of profit slump but we are seeing the exact opposite. the estimate was 27.7, so i would say in line with estimates. what you really need to know is that they have a 51% stake in the u.s. telecom company t-mobile. that's accounting for about 60% of their revenue this time around and that's where the guidance increases coming. truly an international one as we talk about the telecom sector in

the united states as well. it's not just the earnings, arm came out with that disappointing forecast as well. uncertain timing for new listing deals. to break it all down, bloomberg's charlie wells joins me this morning. randy public company, the stakes were high. what do we get out of it? >> this is not what they need it so important to have -- they accomplished a beat in this initial quarter. the earnings-per-share estimate was made be about 26 cents, and what they got was 36. what really hurt them were bad forward predictions. they were showing potentially muted revenue growth, a wide range there and at least in light trading yesterday it hurt their share price, it was down about 9%. kriti: what do we take away from

this in the broader trajectory? what comes next? >> arm is a huge company in the tech industry. 99% of the world's cell phones use some form of arm technology, but it's not going to be about cell phones the future. data centers are huge part of the story and arm has been trying to change his story and say it is diversifying, but it is struggling there. it seems like investors are honing in on the slump in cell phones. that is going to affect this company for a while they will need to be able to show they can diversify away from that. kriti: a really tall order for a company that is still kind of proving that they do deserve to be ipo'ed, after all the long saga of making that public debut. charlie wells with that insight into arm. disney shares rose as well after hours in the u.s. session as they reported quarterly earnings

that beat wall street spectate and and the company says it is trimming costs further. ceo bob iger coming under pressure from investors. ed ludlow has more. >> disney is going to cut even deeper and the cost savings it is targeting along with improvement on the bottom line will help bob iger ward off ongoing activism. increased activism, they are seeking more board seats. bob iger saying he took a call from nelson pelz but it was not clear what he wanted. of course streaming was the focus, the losses are narrowing in the streaming business and that help the bottom line. in terms of the big question round profitability in streaming, disney said that is something that is possible by the fourth quarter of the fiscal year we just entered. and you look at the disney plus

subscriber count, it grew to 152.5 million subscribers overall for disney plus. that is a return to growth, something investors were pleased about. but there are questions about the commitment to content. kriti: you can get a full round up of the stories you need to get your day going in today's edition of "daybreak: europe." you get the micro, the earnings wrap and also the macro. the founder and ceo of citadel, what he has to say about the inflationary environment we are in. he is speaking at the bloomberg new economy form which is currently underway in singapore. a lot of great speakers including former secretary of state hillary clinton, saying that both israel and palestine need new leadership in order to have a chance at achieving a

piece deal. >> a cease fire, if it were possible, which frankly i don't think is possible. i don't think israel is interested in a cease fire at this point, but they are perhaps willing to have what we do call humanitarian causes for the purpose of both getting aid in to try to assist the civilians in gaza, but also getting the more than 240 hostages out. kriti: for more, let's go to francine lacqua who is at the event in singapore. hillary clinton not mincing words when it comes to israel and palestine. previously she had said a humanitarian cease-fire was not the way to tack lit, now making a complete u-turn. what else did hillary clinton have to say. >> are editor-in-chief actually spoke to secretary clinton for about 15 minutes and they really went around the world. the strongest comments on gaza, the fact that she sees the

necessity for new leadership on both sides, but also she didn't mince any words when it came to china. she says it was a mistake by the chinese president to ask for so much power she criticized him for that, saying if there is no accountability, it is extremely difficult for any other world power to have a foreign that is cohesive with china. these comments come just a couple of days ahead of president biden meeting with president she. hillary clinton also talking about the u.s. elections. so we had two heavy hitters and we are just getting started. many more speakers throughout the day at the new economy form. we also heard from kim griffin, you were talking about him just a couple of minutes ago, from citadel. he also did not mince any words when it came to inflation, saying the u.s. for the moment has excessive spending and excessive debt. we move toward banking a little bit later on when we speak to the ubs chief executive who will be joining us here in person. the focus there is first of all

to understand how much of a barrier culture is in integrating credit suisse with ubs. some of the challenges ahead, but i want to try and understand whether european banking can rival with this new bank he is building, if it can rival wall street. something we will watch very closely. francine lacqua, we thank you for bringing that to our attention. like she said, a slew of major speakers and kim griffin is just the start of people who have a take on inflation. then you have all the economic data to digest. about 1:30 p.m. u.k. time, we get the u.s. jobless data. essentially the idea of how much initial jobless claims will be contributing to this. not much slack showing up in this data point and that will be something we watch very closely. at 2:30 p.m. u.k. time, the fed

president speaking at an event. are they going to get on more with the -- get on board with a negative or will they double down on the hawkishness? higher for longer seems to be the mantra over at the federal reserve. fed chair jerome powell, spotlight lands on him as he dissipates in a panel discussion on monetary policy at the imf annual research conference. all eyes on what he will say about the inflation story. meanwhile inflation the global story. we will go from the u.s. to europe to china. the consumer price index fell in october for the first time since july. we will dig into the data and the outlook for the country. what is it mean for the global economy? stick with us. this is bloomberg.

kriti: china's deflation pressures worsened in october as inflation dipped back below zero. reduce prices drop further into the red. who better to ask than jinny yan , joining us bright and early this morning. a pleasure to have you on the program. six months ago or so, the big conversation was, if china does ultimately pose some sort of deflationary numbers, which is now officially has, is that a positive for the rest of the world? is that something that could be exported to the united states, to europe, at a time when they're trying to counterbalance those inflationary pressures? jinny: when you dig into that data, what it tells us together with other data sets such as pmi, is that they are -- they're

still a lack of confidence, lack of demand in the economy. if you weigh that with the fact that you're suggesting inflation in china is good news for the rest of the world, facing inflation, we have to think about the cost and benefits. lack of demand means that we trade elsewhere, lack of demand in china means bad news for the rest of the world. however, this month we actually had positive input data, which means that actually demand may be starting to recover. the question is, what is the momentum like and just how much consumer confidence there is in the economy right now. kriti: speaking of that consumer confidence, i want to get back to the import data, let's take a moment for consumer confidence first. does the chinese consumer matter on the global stage, simile when china is still an export-based economy? jinny: if you ask anyone

involved in commodities, certainly china, when it comes to any form of commodities, large-scale manufacturers of goods, etc., chinese consumers, in aggregate, of course matter. also in terms of the most products, let's not forget china's population is large. the reason why chinese consumers matter is that the way they spend, much more online, digital spending, and of course we are now starting to welcome consumers outside of china, particularly in emerging markets. kriti: when you talk about emerging markets, it brings me right back to the export story. if you look at where china's trade balance lies, data earlier this week suggested some of the export data is slumping. a lot of that is to united states or even europe.

we knew look at the emerging markets, exports are actually increasing, which i find pretty interesting. because of that changing dynamic, does that make china's economy slightly more isolated in terms of the way the markets might price in the global repercussions? jinny: quite the contrary, it's about diversification. china's largest partners are still the u.s., europe, many of the neighboring asean countries. the fact that the recent export data is showing that slight diversification, particularly into emerging markets, large populations in africa and latin america, particularly those set have raw materials to export to china. i don't think that is suggesting that china is dependent on certain partners. that continued diversification of trade, and also trade denominated not just in currency

but it will benefit the opening up of china's economy. kriti: i really want to talk to you about the liquidity story. we talk about the pboc and the shoring up of fx reserves in the broader market you see in china. but behind the scenes, we are seeing a real change in the way that the yuan is actually used within china and abroad. you mentioned the chinese consumer leaning into digital spending as well. talk to us a little bit about the liquidity picture of it all. a major conversation for a lot of the markets about how they are factoring into economic projections for central banks. how is the pboc thinking about that? jinny: china is very unique, especially in terms of major economies. inflation is not a worry for the central bank. setting a benchmark mark -- rate really looks at the key

currencies. at the moment it's to address confidence, and for sure there are more rate cuts expected even before year end. further monetary easing as a provision of liquidity, keeping liquidity both domestically and as we mentioned already, increasing usage globally is something the central bank very much prioritizes. obviously china now becoming very much liquidity provided for -- provider globally is a key thing for it and it will continue to be. the economy underpins the ability of the central bank to continually inject that liquidity globally. kriti: to your point, that global liquidity is also becoming a bigger concern for a lot of the other g10 economies that are largely dollarized. we thank you so much for that insight. we go from china to europe next,

as it heads into its second winter since russia cut fuel pipeline flows. does that mean the continent is ready for the season to heat? i know i am. more on that, next. this is bloomberg. ♪

kriti: european natural gas prices have traded within a fairly narrow range this year after spiking when russia had cut most of its pipeline flows in 2022. let's bring in our guest to joins me bright and early. let's talk a little bit about the upcoming winter, it is already getting a little bit chilly. is the region prepared for any sort of curveballs, or do things

have to go as planned? do we have to predict the weather to a t? >> i would say that europe is is ready as it can be. europe is sitting at 100% full storage which is a record high. we had to turn to ukraine last year to store the surplus on the market. first of all we had storage inventories left after the winter and lng inflow use help to shore up storage. spot the fact that european gas storage is 100% full, we're still seeing the market is pricing in any potential loss of supply disruption and that's why the prices remain elevated. kriti: that something that is largely priced into the market

here? are there any sort of disconnects from pricing perspective? >> contracts on the european gas market remain high and elevated, currently they are trading at around 46 euros per megawatt hour, just far away from record high prices we've seen last year at around 300 euros. however, it is still over two times higher compared to the previous years that we've seen historically. it's important to highlight that the market prices are driven more by fears rather than fundamentals. kriti: that is all great for this year, it looks like things will be just fine unless of course we get a major winter storm. but what about next year, what does it look like? >> forward gross shows as future prices for -- few surprises for the next 12 months. it remains elevated, it has shifted by nearly 20% upward.

it shows the markets remain tight and highlights that the european gas market has to compete with other mobile lng buyers for that fuel. we expect the situation to continue until at least 2025 when we see a new wave of lng coming to the market. kriti: building up infrastructure to export some of that as well. we have certainly come a long way since the war in ukraine first broke out, at least on the gas front. thank you so much for joining the program. coming up, we will discuss the outlook for global market sharing policy. a portfolio manager at morgan stanley wealth management joins stanl(announcer)anagement joins enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy. release works with your body, not against it,

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kriti: let's get to the top stories that set your agenda. softbank surprises with a quarterly loss of $6.2 billion at the vision fund continues to drag. arm, it's majority-owned chip designer, posts a disappointing forecast. china slips back into deflation. data suggesting domestic demand is still sluggish after recent efforts to shore up the growth story in asia. geopolitics, hillary clinton says israelis and palestinians both need new leadership to have a chance at peace. as we really digest a lot of the crosscurrents, monetary, geopolitical, now the earnings story, you are seeing a muted train in the european session. ftse 100 futures underperforming. but only by 0.1%. that kind of muted trade goes

into the fx space. euro-dollar riding high on dollar weakness we saw yesterday. still hovering at 107. where did the parity conversation go? not here now that the fed has been interpreted as the dovish pivot. crude, you are seeing the most market reaction. now trading below an $80 per barrel handle. a lot of markets and geopolitics to digest, all part of the conversation at the bloomberg news economy forum on day two in singapore. francine lacqua joins us from the event this morning with a guest. francine: thank you. we are here with a senior portfolio manager at morgan stanley wealth management. thank you for joining us. there is a lot going on in the world of finance when you look at the cost of capital and treasuries. the markets are all over the place.

i do not know if it is cfa level five but it fears that -- but it feels that way. what is the conversation that comes up with clients? >> thank you for having me. it is such a pleasure to be here talking about these global issues. right now what is weighing on the market is deglobalization. it is no longer a theory, it is point of fact. with that comes supply chain re-imagination and structural disruption that leads to unexpected structural inflation as economists around the world are trying to tame inflation. you have two hot wars that cause inflation, food at the energy level and at the psychological level. clients are worried. my responsibility to my clients is to ensure they harnessed their emotions and their private thinking and we stay practical in terms of investment opportunity. there are plenty right now. francine: how many of them want

to go to cash? sherry: i recommend cash as an allocation. cash has become a real asset class again. the conundrum for investors is that we are continuing to face inflation. the only way to leapfrog over inflation is to grow your capital over long periods of time and that requires equity exposure. francine: equities around the world? the u.s. seems to be safe but they are also more expensive. sherry: exactly right. that presents further complexity right now. you are looking at great value in the european markets. they have not performed as well even in the asian markets. there is a reason why money continues to flood the u.s. if you unpack the s&p 500 there are three dominant sectors for the majority of returns this year. there's plenty of other discount opportunity particularly in the health-care space if you start

to embrace ai and innovation. there are terrific opportunities in health care, industrial materials. francine: at the moment it is unclear how fast adoption of ai, critical mass. sherry: we want to embrace ai fully at this point. it is not a transition, it is a trend. the bull market is somatic in trends -- i the matic with trends. it reminds me of the glory days of the internet. we have ai for productivity, mrna technologies and innovation, we are going to look back at this time and say the internet felt like a fax machine in the advent of ai. particularly with descriptions that are happening here today. francine: coupled with deglobalization it could get messy.

sherry: it gets messy but the irony is deglobalization is inflationary because it makes everything more expensive through inefficiencies. but this ai injects efficiencies and cost reduction and productivity enhancement right at a moment what other things are getting expensive. when you put those things together it is almost like a balloon has floated in and can help save markets from going into recessions. instead we move along in a slow growth environment. francine: it is uncomfortable talking about geopolitics. how it translates into the economy and portfolios. but the markets have almost largely ignored it apart from the path of oil. sherry: there has been a resiliency to the market we want to unpack. for the u.s. markets it has been concentrated in the tax sector. communication services, tech, discretionary.

efficiency and cost reduction can be magnified. i think the geopolitical, it is a heartbreaker for people. when people feel distress or they feel emotionally disorganized, everyone knows we are at a moment of change. we are not going back. the question is how do we move forward? from a portfolio standpoint there are definitive passed to do that that can help hedge people against inflation and geopolitical matters. my advice is do not trade the volatility. you want to invest in the fundamentals. if people do that they are going to come to really bad outcomes. francine: when you talk about deglobalization, how much more needs to play out in supply chains? this was started under the trump

administration. we do not know if he gets a second term. where are we in that process? sherry: it feels like we are at a pause. with war in the ukraine, war breaking out between hamas and israel, it feels like the conversations that are happening here today are taking a p ause and a setback because people do not expect we would be in the conflict we are today. that is a good thing. francine: we will have plenty more throughout the day in singapore. kriti: francine lacqua at the new economngapore. thank you for that interview. she will be speaking to sergio ermotti, the ubs ceo at 9:00

a.m. u.k. time. you do not want to miss that exclusive conversation from singapore. i want to pivot. you heard sherry paul talking about the geopolitics. let's take that to right here in europe. the european union executive arm has recommended opening membership talks with ukraine. that is once it completes a series of reforms. volodymyr zelenskyy hailed the decision as a, quote, strong and historic step to bring his country closer to the eu as the war against russia continues. now maria tadeo in brussels standing by with more. talk to us about the significance of this for the european union and where we go from here. maria: i am happy you gave me a promotion there. but i will take it. it is an historic step. it is a first step. the road to e.u. membership we know very well can take years. that is a difficult process but

nonetheless it is a first step for ukraine. you talk about the big geopolitical changes that came about in the context of war with russia and this is one of it. remember. in 2022 ukraine applied for membership in the european union but days after the invasion, now the commission says they recommend they finally open talks for accession. provided they complete these reforms. for the country politically also potentially economically and the future, it could be very important. we should stress this is the cornerstone almost of the ukrainian foreign policy. they have made it a priority to answer the european union and nato. to me this also speaks to the policy determination of the head of the european commission, ursula von der leyen. she took a decisive step to make this happen. she has been two ukraine a number of times pushing for this idea that ukraine's places in the european union.

this is a first step. this is a recommendation from the european commission. but it will come down to european leaders in december. that is when the european council will meet at the end of the year to decide whether or not they want to give the official go-ahead to ukraine and after that of course it becomes a complicated process, at times a difficult process. many countries get stuck in limbo. politically it is a victory of sorts for president zelenskyy after two difficult weeks. really struggling to maintain momentum on the international front. to some extent this provides him some breathing space on his political campaign. kriti: maria tadeo walking us through. happy to promote you any time. we go from the war in ukraine to the war in israel with its offensive in gaza into its second month. israel says there are no time limits in achieving the objective to destroy hamas

according to benny gantz, a senior member of the war cabinet. the u.s. says it has carried out what to send secretary -- defense secretary lloyd austin called retaliatory defense strikes for american -- attacks on american sites in the region. i want to bring more from bloomberg's daybreak middle east anchor. what do we know about these strikes? >> two f-15s were sent into syria. some of the assets of the iranian revolutionary corps were hit. lloyd austin elaborated this was a message to anybody in the region who thinks they can undermine u.s. interests across the middle east and northern africa. basically you had mounting pressure on certain iranian --

u.s. military facilities. since october 1746 of their forces have been injured. some with traumatic brain injuries as well. lloyd austin saying this is not going to be tolerated. we are looking at this through the regional geopolitical lens as well. the potential of escalation as the u.k. foreign secretary continues to jet set through his foreign minister meetings to try and find perhaps a way to make the violence stop and to reduce the stakes in terms of a domino effect across the middle east. kriti: the latest on the strikes in syria. we thank you. i want to stick with the u.s. and go from geopolitics, the international story to the domestic story. the third republican presidential debate focused on foreign policy and the party's election loss which candidates blamed on donald trump.

the first question was on the absent former's wide lead in the polls. they backed aggressive military action by israel but clashed over support for ukraine. that conversation continues going into the 2024 presidential election. coming up we pivot back to the corporate sector. softbank surprises with a a quarterly loss as the vision fund continues to drag. arm posts a difficult pointing -- a disappointing sales forecast. stick with us. this is bloomberg. ♪

>> we see demand growing. we see recovery in demand.

we were at a low point for rates during covid. we keep going. it is slightly or it is very comparable to pre-covid. kriti: the airbus ceo speaking to bloomberg following their third quarter earnings. at a time when airbus is likely trying to regain the market share with boeing. i want to stick with the earnings picture and pivot from aerospace to private equity. japan's softbank surprising with a quarterly loss of $6.2 billion. it's flagship vision fund continuing to drag. as arm, it's majority-owned chip maker posting a bad sales forecast. let's get a true expert opinion here. peter elstrom joins me from tokyo. love to have you on the show.

i want to pose the question. why the losses? where are they coming from? peter: this was a bit of a surprise. analysts had been expecting that softbank was going to turn a profit this quarter. in fact they did not. first, the vision fund, this is the investment arm where they put money into startups. they lost $1.7 billion on that side. they marked down a number of companies in the portfolio. we work of course. but there were others. you look at the group number, the softbank group number, they lost $6.2 billion. a chunk of that is because of foreign-exchange losses, more than $4 billion in the portfolio. they are a japanese based company. the yen has hurt them because they have dollar-denominated obligations. that was a bit of a hit. as you say it is a combination of negative news with armor earnings and the we work bankruptcy filing we got this week. kriti: i'm so glad you brought

up we work. feels like extra emphasis the backing of arm has to be a real winner. arm not exactly coming out with their debut earnings report having a highflying report card. talk to us about arm and why even despite their positive earnings the market is not interpreting it that way? >> you are right. this is not what you want in your debut earnings report as a public company. arm just went public in a celebrated ipo, they raised $5 billion. softbank codes 90% of the equity -- holds 90% of the equity. their performance last quarter was strong, revenue 28%, they beat expectations on the top and bottom line. but they gave a forecast for the next quarter that was disappointing. because of that shares were trading down in late trading yesterday. the big issue for arm, they do chip designs inc. in all kinds

of products. but the heart of their market is the smartphone business. smartphones have been sluggish recently. sales have been flat. apple's latest iphone has been disappointing. that has been an issue for them. the market has not been growing as quickly as it has in the past. it is slowing down a fair bit and that has been disappointing for arm. they have said they are trying to pivot beyond smartphones into computer servers, ai in particular. that is a big target market. they are trying to move up the value chain. but they have not been able to show the progress in other markets you would like to see at this point. kriti: that comes after they took a very notable pull out of the chinese market as well. the tech crackdown not serving well long-term for softbank's balance sheet. we thank you for that crucial context of the back of softbank and armor earnings. i want to stick with corporate stories, specifically the u.s. and the biotech space. eli lilly shares rising as it

won u.s. approval for its diabetes drug that also treats obesity. sparking a battle for dominance in the growing weight loss market. the drug will be available by the end of the year. it is cheaper than a similar product from rival novo nordisk. patients taking the highest dose lost an average 18% of body weight. from biotech to hollywood, striking actors in hollywood studios have reached a tentative deal that would end one of the entertainment industry's longest labor crises. actors join screenwriters on picket lines in july demonstrating against streaming pay and artificial intelligence. writers reached a deal in september. we broaden things by looking at the federal reserve which is scrutinizing morgan stanley's wealth management business over measures to prevent potential money laundering by wealthy clients from outside the united states. bloomberg has learned the regulator is pressing the firm

to approve controls and processes. morgan stanley told the wall street journal it will rectify the shortcomings. more stories, more analysis, more markets still ahead. stick with us. this is bloomberg. ♪ welcome to ameriprise. i'm sam morrison. my brother max recommended you. so my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized,

hey, john reese, jr. how's your father doing? to help reach your goals with confidence. my sister has told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

kriti: welcome back to "daybreak europe." the markets narrative is muted when you look at futures, the fx space, even the commodities space a marginal gain. the core of the issue is this complicate a chart. we are seeing financial conditions loosen. this is the idea that in the concept of the federal reserve perhaps being interpreted as dovish we are seeing financial conditions boost risk assets. positive equities, more of a bid for the bond market as well.

that is what the green on the screen is on the right-hand side. kind of circled in blue. it is the second panel that matters. the idea being that since powell had been interpreted as making that pivot, look at the intraday volatility of the s&p 500 and the vix. that is the bottom square on the right hand corner. it shows that since he started to say that you are not seeing volatility when it comes to the s&p 500 and the vix. that speaks to this muted trade you are seeing in today's session. all a function of the broader move in the financial conditions index. the green on the screen is really significant when we talk about the moves you are going to see and the correlation between the stock market and the bond market. the positive correlation is going to be significant because they kind of are at odds with each other. they have traditionally been at odds with each other. you want the stock market exposure more than you want the

bond market exposure at a time when risk asset positivity is a little more -- has more appetite. at the end of the day if you look at what the bond market is doing you are seeing this broader bid for growth. when you start to see normalization, the correlation is going to break down. they will be at odds again. we are clearly not there which brings us full circle to the muted trade you are seeing today. the first people that get impacted are the banks. they are the market makers and the ones that actually benefit from that volatility. the trading revenue really helps offset some of that investment banking and ipo revenue that we know is also in a slump. i imagine that will be part of the conversation at the bloomberg new economy forum when francine lacqua will be speaking to ubs ceo sergio ermotti. she might just be asking those very questions about what that bottom line from the bank actually looks like. that conversation at 9:00 am

u.k. time live out of singapore. coming up, interviews with the wizz air ceo. we will also be speaking to other c-suite members including the astrazeneca cfo and vestas wind ceo as well. a lot of questions around margins especially in europe or the narrative suggests recession is on the horizon. do corporate stories tell you the same thing? next, anna edwards, tom mackenzie, and mark cudmore are going to walk you through that and the european open. this is bloomberg. ♪

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