kriti: welcome to "bloomberg daybreak: europe." risk assets rolling around the world as traders met -- bet that the federal reserve may be done hiking rates. stocks in asia following wall street's lead. china's president xi arrives in the u.s. for high-stakes talks with resident biden. over in the middle east, is really forces are reported to have entered gaza shifa hospital compound after they say that hamas is using it as a base. right to the earnings picture as we digest the geopolitics. siemens energy coming out with numbers saying their net income up to one billion euros in fiscal 2024, returning to profitability and a lot of that thanks to the government intervention. i want to get the headlines

through. it seems it is 18% from siemens india for 2.1 billion euros. you are also seeing optimism around the grid in tech, their growth for 2026 that will be crucial as well. this is really crucial they are returning to the net profitability. 31.1 billion euros, in line with the numbers, orders coming in at 50.5 billion euros, so again seeing a marginal jump in that order. the loss for the full year before that was 2.9 billion and the estimated loss was 2.6 billion, so you are starting to see the profit margins increased . we will give you all the full analysis center of the show, speaking with siemens energy ceo christian bruch shortly so be sure to tune in. in the meantime, talking about

the broader markets because if you look at the futures trading, it is an interesting dynamic. everything changed after that soft inflation report out of the united states yesterday, the idea we are seeing green on the screen and a lot of it will be fairly dovish. euro stoxx 50 futures higher by 0.1%. s&p futures are the outperformer, higher by 0.3% following some of that excitement you saw in the session yesterday. the cross asset story is so crucial. the soft inflation report bringing about the question of whether or not the fed has done its job. maybe it does not need to be as hawkish anymore. take a look at the two year yield, 4.83 after a 15 basis point move in the two year and the 10 year. all of that pressuring the dollar, such of the point that you saw strength in the euro and the pound. 1.08 on the euro-dollar. the question remains to cut or

not to cut. our own sonali basak asked ken griffin, the citadel ceo, about that. take a listen to what he had to say. ken: the fed needs to stay with the message that they will put the inflation genie back in the bottle so if they cut too soon, they risk losing credibility around their commitment to a 2% inflation target. kriti: ken griffin saying maybe there is still more work to do, while the market does not seem to think so. the market pricing in the exact opposite. you talk about the hikes priced into next year, they are pricing four hikes into next year. some of the market moves have pared back, calling for a cut in june, september, and december as well, so very aggressively dovish tilt from the market. does everyone agree?

take a listen to what the ceo of jp morgan, jamie dimon, had to say about that approach. jamie: they are doing the right thing to pause for now. they are waiting to see the effect on the economy and the u.s., particularly as the excess fiscal spending is winding down and quantitative tightening is kicking in, but i still think you should prepare for them to do more and people should be prepared for that as a risk management tool. inflation may not go away that quickly. kriti: perhaps throwing cold water on the optimism around the markets but it is not stopping investors. take a look at how asian markets are faring and i want to get to april hung in the poor with the story -- avril hong in singapore with the story. avril: it is not stopping investors in the region, really that the fed is done and that is ripping through the fx, the bonds, the stoxx, and the

region's benchmark msci asia-pacific is sitting at its highest level we have seen since september. outperformance in the south korean won as well as the hang seng urges accelerating after the lunch break, climbing and we are seeing a lot of green coming through ahead of tencent in its third-quarter earnings. traders turning bullish on the stock as there are these greater china tailwinds coming from home as well as abroad, but let's take a look at offshore yuan because the market reaction to the positive news flow seems to be more clearly illustrated here. we saw it paring losses against the greenback after the story from bloomberg that we are going to get more boost to funding for the housing market in terms of low cost financial funding. the hope is that this will trickle down to households and then the u.s. cpi print came and we saw that gain against the

greenback. then the pboc coming through with its largest liquidity injection in nearly seven years to help this stimulus support i. and the market is still digesting that bit of retail sales numbers coming through from china better than expected, even though bloomberg economics points out that this was compared to a low base a year ago, so a lot of digesting coming through and it is really about the world's two largest economies, the u.s. and china. kriti: certainly a lot to digest, the inflation report in the united states not necessarily helping that narrative. i want to stick with the asia story but switch to geopolitics. chinese president xi jinping has arrived in san francisco for a meeting with joe biden. there are talks on the sidelines of the asia-pacific economic cooperation summit comes as china aims to boost its slowing

economy. let's bring in rebecca choong wilkins. walk us through what we can expect the next 24 hours. rebecca: these two big ticket items that we are expecting from this meeting. one will be this deal on fentanyl, the u.s. and china on the cusp of an agreement from the china side to crack down on fentanyl supply and distribution out of the country. the second is on military to military communication, so both of these are asks from the white house, from the u.s. side of china, and essentially china is able, if it does agree to these things, is able to make both of these concessions without shifting broadly on its strategy . beijing expecting to press on a roll back for some of the economic tariffs and curves included on investments, so that

will be a bigger ask on the biden side. the bigger picture for beijing is also swaying this broader audience of american businesses and international ceo's joining c jinping for the dinner after the meeting -- xi jinping for the dinner after the meeting and the opportunity is to convince the world and the ceo's that china is still a friendly place to do business. this comes off the back of the sharp decline we stopped, fdi numbers coming off on the pressure point of the chinese economy. kriti: it will bring questions to how they approach, even the domestication of technology, the energy security they have been having discussions about. rebecca choong wilkins, thank you for that report. all of that needs to be on your radar and right here in the u.k. at 7:00 u.k. time, we get the cpi number. we are starting to see it easing in the united states. does the u.k. follow it in the coming time. we are also getting final

readings of spanish and french inflation numbers as well, so that'll be crucial in terms of, is the eu on the same page as the fed? it is taking this inflation feed from around the world, the economic forecast as well as going to be crucial in terms of how the ecb is thinking about some of the economic data we have been getting lately. at 1:30 u.k. time, u.s. retail s well as home depot. we will also get an idea of what the u.s. consumer is thinking, not to mentor international exposure, all coming up at 1:30 p.m. u.k. time. we get a full wrap up of those stories in this edition of the daybreak terminal. just type in dayb on your terminal. this will be the main macro readthrough. does the green on-screen stick around? that will be the big question for investors around the world, so read the full analysis. coming up, siemens energy says

they will return to profit in 2024 after a government led deal boosted its outlook for large-scale contracts. we will speak to ceo christian bruch next. this is bloomberg. ♪

kriti: let's get to some of the other stories we are following from around the world, starting in the united states. how's makers have passed a temporary government spending plan, easing the risks of an impending shutdown on a proposal from house speaker mike jack in past with bipartisan support. -- mike johnson and a majority of democrats are expected to back it, even though it does not include emergency aid for israel or ukraine. the government shutdown deadline was november 17 and they beat

that deadline by two days in terms of agreement, but some of the gop is worrying about what that might look like. in the u.k., more political drama. suella braverman has accused prime minister rishi sunak of betraying the public in breaking his promises on immigration. in a scathing resignation letter, braverman who was sacked on monday said that sunak had manifestly failed to deliver on every single one of his key policies. she wrote, either your distinctive style of government means you are incapable of doing so. or, as i surely must conclude now, you never had any intention of keeping your promises did that comes ahead of a ruling by the u.k. supreme court at 10:00 a.m. u.k. time on whether the government flagship policy to deport failed asylum-seekers from a wanda is lawful. that is going to be a lot of what we talk about on the agenda ahead. one of the major corporate stories that we are watching closely is siemens energy.

this is an important story because we know it has been the pain trade for a lot of folks betting on renewable energy. we will dive into the details on this earnings story but i want to get the big picture take and bring in bloomberg's oliver crook who joined us from berlin. why do we care from a global audience's perspective? oliver: this is a business that siemens spun off in 2020, siemens energy. it still retains a 25% stake in the business and is involved in discussions around the backstop, but this is a business focused on energy. asked turbines, energy terse mission, and wind turbines. -- gas turbines, energy transmission, and wind turbines bid this is one of the key companies in germany that is both marrying the industrial know-how and the engineering prowess with a future facing business. what we have seen so many times as we have seen with auto sector is a country that has mastered

the combustion engine, but when it comes to electrification, they are behind, so this was supposed to be the great hope for the german economy in terms of getting the energy transition going for germany but also outsourcing some stuff around the world and that was evidenced in the stock earlier this year from january until the first of june. this was the single best performing company on the dax and that changed in june. a loss about 40% of the value almost immediately when we heard about these issues with the massive wind turbines and with the backstop coming in place, this is something that has helped stem the bleed but it does not answer a number of questions, which is do they have their arms fully around this? how will this be resolved from a technical standpoint and how long will this take? the energy transition is right now. that is a huge amount of lost business particularly when you have physical impetus behind this like the inflation reduction act. kriti: something we will be

keeping a close eye on. oliver crook, thank you for breaking down the crucial this of this story from a macro and micro perspective. let's answer the questions that he just put forward. christian bruch, the ceo of siemens energy, joins me now. thank you for joining us this morning. all he was talking about how important your story is. let's talk about the headlines we've got talking out of your earnings picture. it looks like siemens energy secured a total of 15 billion euros in guarantees. the german government providing a guarantee of 7.5 billion euros as well. what does siemens energy get out of these guarantees? christian: good morning and thanks for the opportunity to clarify a lot of things because we think about this package, a lot of misleading things have been communicated. first of all, it is not cash, but a backstop guarantee which goes to banks. all of business is based on

pre-maintenance -- prepayments, guarantees which are normally the industry level job. it is a theoretical instrument and we pay a fee to the government for this. money is flowing from siemens energy to the government to get these backstop guarantees. it secures the continuous growth in areas like the grid which is growing extremely fast and partly also offshore wind. that is not unusual. we have a roughly guaranteed volume as a company of around 20 billion, which we turned around, and this backstop guarantee has now been provided simply because of the size of the order book. notwithstanding that, we have to fix the problems in wind, but i would like to separate these two things. it is not about the financing, but it is about a backstop guarantee for performance guarantee which the bank afterwards provides and we provide money for in terms of the structure of this package. kriti: that may be true, but we

know there was a massive -- of 12 billion euros to begin with. banks did not want to touch it because it did not have that guarantees, so at the end of the day, you do benefit even though you're contributing to that, but now that you have the guarantees, you have the banks on your side, does that pave the way for capital increase in terms of debt or equity? christian: because you talked about loans, it is not about loans, but about guarantees bid i have to reiterate it because it is important to understand it is not loans. it is guarantees which are used in performance contracts. what we are doing at the moment in terms of guarantees is to continue to execute our business and continue to. take new orders. . this is what we made the new guarantee package for. the other thing is what we are doing about our balance sheet. you have read also in the press

release that we continue to strengthen the balance sheet, look into proceeds between 2.5 and 3 billion to strengthen this, and we will continue to do so because we want to stay committed to the investment-grade ratings in terms of investment activities. we are looking at all the measures, but this is what we are doing at the moment and 2.5 to 3 billion proceeds cash in is obviously from certainly an important element which we have for fiscal year 2024. kriti: a big part of that assumes the issues in your wind business will get fixed. can you give us a timeline of how long that will take? christian: thanks very much and absolutely. what we did in the quarter three announcement when we announced the quality issues in the onshore business, we did a very good technical investigation. we have not seen any new findings on the quality since then, so that is a good sign

where i would feel confident to say we have analyzed it and now it is about planning the implementation of corrective measures and containment measures into the fleet, which will go on for a couple of years. most of the turbines are operating, but they will obviously need in the next years to come a repair package. this is something which we will work through. at the same time, it is about bringing these corrective measures into the new turbines which we will start to sell going forward, but this is about the onshore business. the second piece which we always discuss about the wind, which is a separate issue that we also need to look at separately, is the ramp up in offshore. we are the largest provider of offshore wind turbines and we ramped up four factories at the moment. the output and productivity was not where it needs to be. this is not about quality, this is about workforce, training them to get faster, cost out,

and launching these new products into the offshore market. kriti: a couple of years to make some of the repairs. there has also been discussion about a full redesign of some of the turbines as well. bloomberg previously reported that might take up to two years. in addition to the repairs that might take several years, where does the progress on the redesign and how long might that take? christian: it is always -- roughly if you design a wind turbine, it is a multiyear exercise because you need to test, redesign, and so forth, but it is still a process. the first thing is to restart on the five onshore platforms with the corrective measures, and then there will be the next products coming in terms of wind conditions, in terms of size. we at the moment also launched new products in offshore and we already plan also for the next product generation thereafter. that is a continuous process and

this will go in parallel, but strategy-wise at the moment, we look at which are the key moments -- markets to focus on, the most interesting ones, and this is where we also reiterate at the moment the wind strategy. we will disclose part of that next week on the capital market day, but we continue to work on it to make sure that we focus product wise and region wise on the most profitable markets in the renewables. kriti: speaking of the most profitable market, it is no secret that energy costs are high in europe and they have eaten into the wind business. would you ever consider offloading it altogether just given the wind business is almost overshadowing some of the success in your other parts of your business? would you ever consider spinning it off, for example? christian: first of all, we bought into the wind business fully because we believe future energy technology companies must continue and i believe this does

not go without wind. the question which we need to ask ourselves is that we have to be in certain areas and we need to continue to reach our strategy on that. completely giving it away, particularly if it is a lossmaking business, is something i do not see is practical. we need to fix certain issues ourselves, but i do see the future of an energy technology company with wind. the question is where to play and how to play. but wind will be decisive to drive energy transition. kriti: so to be clear, you are not spinning it off? christian: now, at the moment our main focus must be fixing the quality problems and we are talking about roughly 2.5 thousand turbines in the installed feed of 50,000. you have 50,000 turbines installed, which is running without problem. but it is now fixing the quality

problems and then considering what is the right markets to focus on, but this is something we have to do and we have to do the problem resolution on that part. kriti: understood. christian bruch, ceo of siemens energy, thank you for joining the program this morning. more markets ysis ahead stick with us. this is bloomberg. ♪

kriti: in the middle east the israeli military is said to enter the al shifa hospital complex in gaza, israel accusing it as a base for hamas operations. henry, walk us through what we know. henry: we know that israeli troops are believed to have entered the shifa hospital, the main medical facility in gaza, just after 2:00 a.m. local time. according to the hamas run health authority, israeli

soldiers are going through the basement of the buildings in this very large complex. the israeli army has as of friday began to surround al shifa and impose a siege inside the facility. there are hundreds of patients, of refugees, of medical staff, and international concern has been growing. the u.s. has also expressed deep concern on what is happening with the risk to civilians inside the facility. kriti: right. it is certainly a dire situation. bloomberg's henry meyer, thank you for bringing the reporting to bloomberg. much more to come after the break. stick with us. this is bloomberg. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem.

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kriti: good morning and welcome back to "bloomberg daybreak: europe." i am kriti gupta in london. risk assets rowling around the world as traders bet the federal reserve may be done hiking thanks to a soft u.s. inflation report. stocks in asia falling. president xi arrives in the u.s. i had of high-stakes talks with president biden, while back home, beijing pumps more cash into the banking system. over in the middle east, israeli forces have entered gaza's al-shifa hospital compound after accusing hamas of using it as a base. israel says it will be a precise and targeted operation. a lot of this at its core is having an interesting read through off of the fed. take a look at what futures are doing when you look at euro stoxx 50 futures compared to s&p 500 mini futures.

you are seeing quite a bit of a move tied to the fed and this i get that may be the fed is done hiking because that inflation report not only came an in-line with the cpi numbers from last time, but it came in softer as well on the core number. that is good news for the people who were worried about a resurgence of inflation. creating a bullish sentiment in euro stoxx 50 futures. s&p 500 futures higher by 0.3%. . the real action is in the bond market. two year yield, 4.83. a 15 basis point move lower on both the two year yield and the 10 year yield as well. that's when to be pressuring the dollar when you talk about euro-dollar trading at about 1.08 right now but it pushed higher just off of that weakness you were seeing in the dollar. the pound as well, 1.24 is the move there. a lot of cross currency need to keep an eye on in the fx space and bond market space tied to the federal reserve.

that will be a theme we explore. i want to get you some earnings news. some breaking headlines coming out of infineon technologies, the chipmaker out of germany. fourth-quarter revenue coming in at about 4.2 billion euros. the estimate was 4.1 billion. that is what i would call an in-line estimate. they are cutting net debt by 2 billion euros via asset sales and eight -- excuse me -- that is the alstom numbers we will get to that in just a moment. infineon numbers coming in at 3.8 billion. the estimate was 3.6 billion. we have our interview with sven schneider at 7:00 a.m. u.k. time. they will walk through those crucial numbers as well as the future of what you are going to see, especially when it comes to their 2024 segment result. all in all, the earnings kind of falling in line with what wall street had estimated. let's get to the alstom story. the headline you need to know

crossing the terminal is going to be that they are cutting net debt by 2 billion euros via asset sales and a capital increase. they are coming in and talking about proposing the former saffron ceo as chairman. they are talking about cutting 1500 jobs as well. and at the same time as well, talking about their first have sales coming in at about $8.4 billion. a lot of crosscurrents but looks like the idea of efficiency is really prevalent in these earnings. we will be speaking exclusively to the alstom ceo. it's a conversation you do not want to mess as we talk about what comes next for the french rail and train maker. a crucial interview coming up at 6:40 a.m. london time. the macro is driving the markets, not necessarily the micro. when we are talking about whether or not fed cuts are actually on the table, whether or not the market reaction is justified. take a listen to what jp

morgan ceo jamie dimon had to say. jamie: i think they are doing the right thing to pause for now. they've raised rates a lot. to wait to see the effect on the economy in the u.s., particularly as the fiscal spending, the excess fiscal spending is writing down -- winding down and quantitative tightening is kicking in. i still think you should prepare they might have to do a little bit more and i think people should be prepared for that just as kind of a risk management tool. i am afraid inflation may not go away that quickly. kriti: at the core of that is the markets already getting ahead of themselves. jamie dimon, ken griffin warning against it. the markets saying the fed is done, and therefore, four cuts priced into next year, a complete turnaround from what we are seeing, and that's just the u.s. story. we get inflation numbers from the u.k. today, that data coming out in less than 30 minutes. year on year reading expected to drop below 5% for, get this, the first time in two years. let's bring in dan hansen, senior u.k. economist at

bloomberg economics. some positive numbers coming out of the u.s. in terms of the inflation fight. do we see the same here in the u.k.? dan: good morning, kriti. i think we will. we are expecting a drop to 4.8%. the market is looking for 4.7%, the bank of england is looking for 4.8% as well. a big drop from 6.7%. it's going to be key within this data to look at the underlying picture. nearly all of that drop will be to do with energy prices. what will be interesting for the bank of england, for the markets will be what goes on, first of all, with core inflation, but also with services inflation. that is the bit of the basket that is mostly to the domestic economy. it seems almost certain we will get a big drop this morning but it will be the details that matter. kriti: it will be something we will keep an eye on. i wonder what the market reaction is going to be given we already see the cable rate at 1.24, and that was just off

dollar weakness. do we see more positioning into the market moves as well? dan hanson, thank you so much for joining us this morning. i want to go from the macro to the micro. not only are we watching u.k. cpi, we are also watching run out -- renault targeting more than 10 billion euros of revenue by 2025 further ev and software arm. they plan to list the business as an ipo next year. let's go to carolyn cohen. your outside renault hq near paris. what do we know about the ev space in europe? >> this is a very key moment for renault. they are betting pretty much their entire future on this new ev unit that they are planning to ipo in the first half of 2024. and which is supposed to be the european answer to tesla, at least if their ambitions, as you

are men dishing -- as you were mentioning, they were planning 25 billion euros of revenue by 2031. by then, they also want to have seven renault ev models, including one that they were present this afternoon called legend. this is going to be a new small, affordable ev priced at less than 20,000 euros. of course, the goal is to regain market share in europe where renault has lost a lot of market share. this is also part of the revamped alliance with nissan. nissan is putting to invest 600 million euros as planning to invest 600 million euros and they want to focus in technology. one third of their 11,000 employees at ampere are engineers. they really want to focus on that. they are partnering with google and qualcomm. there are a lot of headwinds for this ipo. of course, first, the timing is

not the perfect timing in terms of market conditions for listings. but also, the fundamentals of this ipo, some analysts are saying they should drop the plan completely, the strategy of renault is too complex. some analysts are questioning the valuation. one analyst at jefferies says the valuation of ampere should be between 5 billion and 7 billion euros when the ceo of renault wants between 8 billion and 10 billion euros. the ceo already said he is not going to ipo at a discount and the rationale behind this ipo is to attract a new type of investor, investors who want to invest in technology and software. all of this are questions i will ask him directly in a couple hours from now when i talked to him from this renault headquarters outside of paris. kriti: bloomberg's caroline connan all over that story.

thank you so much for bringing that. we will get the ceo of renault at their hq near paris at 8:00 a.m. london time on bloomberg markets today right when the markets open. that going to be a major market moving interview will want to keep your eye on. luca demeo, the renault ceo, of course, 8:00 a.m. london time. the u.s. justice department has joined other international agencies in investigating thousands of bogus engine parts from aogtechnics which ended up in plans all over the world. the doj has sought information from an airline that removed the unapproved parts while other u.s. agencies -- non-us agencies share knowledge and the international effort to pursue the case. investigations will look at the use of forged documents in the global aviation scandal. goldman sachs executives are set to be considering bigger bonuses this year to retain star traders and dealmakers. that according to reuters, which sites five identified -- unidentified sources with knowledge of the situation.

it says discussions are still in the early stages and have not yet been finalized. however, it does help bigger bonuses could help win over some employees after smaller payouts last year. sticking with banking, from the u.s. to right here in the u.k., barclays has begun to market an additional tier one bond, another sign of a revival in a market roiled earlier this year by the historic right over at credit suisse. last week, ubs sold additional tier one notes pulling and roughly 10 times the bids for the debt on offer in its first such issuance since roughly $17 billion of credit suisse's at1's were wiped out, all part of the ubs takeover. a quick check on what else we are watching opportunity. add this two year investment diary, we get the eu auto forecast, plus final readings from spain and france. about 1:30 u.k. time, various data coming out of the united states, including retail sales, ppi, and manufacturing, all combined with some of the retail earnings numbers we get as well.

target, for example,, t.j. maxx even home depot are reporting before the u.s. opening bell. geopolitics and focus, chinese president xi jinping meeting with president biden at the apec summit in san francisco. a lot can move these markets. we are going to have you covered right here on bloomberg television. . you don't want to miss our excuse of interview as well with portugal central bank governor, ecb governing council member mario centeno. that coming up on markets today, 8:30 a.m. u.k. time, an interview you do not want to miss. coming up, this is the one i am excited about. we will be speaking exclusively to the ceo of alstom, the company cutting jobs, selling assets to boost its balance sheet, of that on the table in just a few minutes. stick with us. this is bloomberg. ♪

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"bloomberg daybreak: europe." i am kriti gupta in london just moments ago, we did get those earnings numbers out of alstom. they confirmed what the numbers they had released on october 4 that really tanked some of their stock. . they had some interesting lines to add, notably, net debt, they're looking to cut net debt by about 2 billion euros thanks to asset sales and capital increases. at the same time, they are talking about securing about 2.3 billion euro liquidity line as well as cutting 1500 jobs. those some of the highlights of the press release they had just released. let's get more insight. joining me from paris is alstom 's chairman and chief executive, i am pleased to say, henri poupart-lafarge. i want to start and talk first about this free cash flow issue we have had. we start looking at your stock quite significantly, a major drop last month when you released earnings, which are in line with what you have reported

today. this is not the first time we have seen that kind of volatility in free cash flow. some would argue it's part of the business. you can see why investors would be jumpy about it. how are you going to reassure them? why should they believe that this is going to stabilize? henri: thank you first of all. it is part of the business. or at least part of the business. however -- our least favorite part of the business. however, there are a lot of things to be done to improve this attrition. what we are announcing today, a large and comprehensive plan with three pillars. the first one, which is the most important, is the corporate pillar. the governing pact of one relatively soft commercial situation coupled with a very fast and steep ramp up of our to ease, which absolved -- absorbed working capital. we need to make sure we are less sensitive on capital employed

increase. that's the first pillar of the plan. but we also need to take into account, acknowledge the fact that now we have a balance sheet which has been weakened by this situation and which we need to solve by decreasing our overall level of debt. these are the 2 billion that we are mentioning, what we call inorganic measures, asset disposals, quasi-equity, and potential equity increase, capital increase, if needed. and this has to be on our mind in the coming future. the third pillar is about the organization, the governance, to simplify the organization, to speed up i would say the integration of -- i think we are at the stage which you have mentioned, we can and we should start to streamline our expenses. this will lead to this 1500

job cuts. kriti: all part, to your point, of the efficiency plan you just laid out, henri. you talk about a capital increase, you talked about selling some of your assets as well, including some of the refinancing. can you talk specifically about which assets you are talking about? henri: no, it is early days. we have set for ourselves a target of having between 500 to one billion proceeds out of these asset disposals. we are looking at other options. as i said, quasi-equity, and short-term instruments. too early to say which kind of assets will be sold. of course, we are going to make a strategy to sell these assets. we need to see what the market will bring. we need to see -- and once we have done the complete analysis, we see if and when a capital increases needed. but i put it on the table

because i always said, i think i a strong balance sheet is essential for our activities going forward and i need to keep this balance sheet, the investment with moody's, we do everything to keep this. kriti: do you have any numbers around that? you talked about the investment grade rating from moody's. one analyst says you may need to sell $1 billion in assets in the next year or so to preserve that status. does that number sound right to you, one billion euros? henri: yes, we have announced that we will set between 500 and one billion. i am not against your number. this is exactly how we should proceed. i think we have after the merger, we have very large activities worldwide and we are reviewing these activities to see which activities could be disposed of.

kriti: let's talk about the capital raises you are talking about. just last month, the cfo of alstom rules out an equity raise altogether. now you are talking about actually being open to that equity issuance. what has actually changed when, of course, any sort of equity issuance is going to be very dilutive to shareholders at a time when they already took quite a hit on your stock? what changed? henri: we have not decided to launch any capital increase. if we decided to do so, we would do it now. we need to first assess all possibilities and options on the table. at the same time, i have always said that we need to keep this very strong balance sheet. the message to the market is to say we will do whatever is needed to keep this strong balance sheet. the first element and i want to recall that the first element is to solve our operational issues and to, of course, generate cash organically.

then, we have set as a target to increase -- decrease the debt by 2 billion. we have other options. but we don't want to rule out capital increase if it is needed at the end of the day in order to sustain the balance sheet. this is not our preferred option but this is on the table. and this is what we want to pass as a message today. kriti: we will certainly be monitoring it very closely. let's go from some of your fundamentals to perhaps the contracts that you have secured in the last i want to say 48 hours or so. we have seen that you have confirmed the skytrain contract to dfw airport, which is close to where i grew up. you are the company behind the high-speed train on the northeast corridor. there was expect it to be a lot of progress by 2024. can you give us an update on that specific project? henri: yes, it is a landmark project, i can say it is a flagship project. the first time ever that the

rail speed trains will be introduced in the u.s. it comes with a number of complexities. wen yu to set the -- we need to set the rules as we work, as i say we expect a lot a progress in 2024, we expect a whole new service in 2024. we are now in the heart of the process. we are quite positive that we will manage it and that is in 2024 you will see the developments. kriti: a couple of weeks ago, your cfo spoke to bloomberg exclusively and said that there are some delays involved in that project due to a technical debate about the track itself. has that technical debate been resolved? henri: i am not going to go into the details. it is debates, i mean, we keep a tight dialogue between the rfa and ourselves. we have solved most of our debate but i am not going to go into the the detail of our discussions. kriti: very quickly, let's talk

about the northern leg of the hs2 high-speed train as well. how exposed are you, how much of a loss have you taken on that? henri: no, we have no loss on this project. the project is going on, it has been confirmed we have been awarded the train. there have been two -- that have been smit, one for the mechanical part, -- have been submitted, one for the mechanical part, one for the signaling part. it's not because you are necessarily decreasing the length that you need fewer trains -- the length of the journey that you need fewer trains. it depends a little bit on the service. we have no indication that the number of trains will be diminished. kriti: certainly something we will be keeping a very close eye on. we thank you so much for john s this morning, henri poupart-lafarge, the ceo of alstom. thank you, as always, again, following that kircher earnings report. more analysis to come.

stick with us. this is bloomberg. ♪

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♪ kriti: now, the market story of the morning is going to be about that soft inflation report out of the u.s. is the federal reserve done hiking? , there are some issues some fundamentals you have to keep an eye on, which brings me to the chart which shows how hedge funds, some of the smart money has been positioned. before the cpi report, there were the most short on record. that's what this red shows, it shows they were the most short on record because they said, look, inflation is not done, this will be another high inflation report. you've got that soft print, which created a lot of short covering in the equity market, the bond market as well, which requires about 15 kind of basis point move. that short covering creating that rally in the bond on clean market. a chart to keep in mind about

how smart money actually positions, something i am sure "bloomberg markets today" will cover in a few moments. we have a series of really important interviews. earnings still alive and well in europe. infineon's cfo will be joining the program on their latest results. renault's chief executive as well. don't miss our exclusive interview with portugal' central bank governorss, mario centeno. all that coming up on "bloomberg markets today." we are going to be talking about the readthrough on the inflation story. margins will be a big story, as is some of the micro, all coming up on "bloomberg markets today." stick with us. this is bloomberg. ♪

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