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>> good morning and welcome to daybreak europe. alibaba something after scrapping its cloud spinoff, dragging the entire asian stock market lower and wyatt sinking into a bear market. visiting g pleasant -- pledges to make it easier for foreigners to do business in china. president biden seeing much of -- saying much of the world's history in the coming years will be written in asia. the u.s. pushing for international peacekeepers to go to gaza as israel's benjamin netanyahu defends a raid on the hospital. a lot of geopolitics to factor into the investor playbook. this talk about with the markets are doing here and now. when you look at futures trading, you will see a sanguine picture. this is something we saw all we given the data. when you look at the futures move, you see a barely marginal move higher on the screen. euro stoxx 50 futures higher by

four tens of 1%. that is your outperformer, which is really interesting is just given the dynamic we see in the same vein. s&p futures higher by 1/10 of 1%. euro-dollar's marginally moving but that 108 move will be significant. as we talk about with the yields move the lower in i have that fed dovish pivot in the way the markets interpreted it will do in the way that it was -- brent crude we stick with the same image, 77 handle for that commodity there. that's really interesting because it is a little bit of a bounce back from this massive move lower that we saw yesterday. higher by 1/10 of 1% isn't simply a move functioning off of the risk sentiment we see around the world souring in line with stock and barn -- stock and bond sentiment. is it based on fundamentals? bloomberg's elizabeth low standing by to give us more context. pleasure to have you on the show. crude falling more than 20% since -- since september.

walk us through the oral -- oil market narrative right now. >> it would be something that they are trying to correctly assess. it will be on the decline this week. certainly, markets have to digest and certain numbers in china have consumption numbers. that is the backdrop. but we do also have players like opec-plus coming out, so there is oil consumption that is sharp. i think markets are looking at demand right now. supply and demand are much -- then before.

we have iranian oil slowing. not this month, but this week we do see crude intentions rising. kriti: that was one of the major fears. elizabeth low and singapore. brink -- thank you for the update. as she is talking about the rerouting of the market sentiment, specifically around oil, it will have a transition into the major economies of the world. united states being the largest consumer. i on its heels. this brings me to how those asian markets are faring. april hong standing by in singapore. walk us through the market. avril: those declines in oil prices coming in a week where we saw u.s. inflation cooling, prompting bets that the fed is done. that's being reflected in asia's effects in bonds today. but the stock market investors

seem to be focusing more on the negatives, coming in the form of alibaba. it's not just scrapping the plan to spin off its cloud unit. it also reported lower than expected domestic e-commerce sales, so that's certainly raising concerns of the health of chinese consumption. and you saw earlier the hang seng is leading declines today. but taking a look at how alibaba has performed, the losses actually take it below what we saw in late march. this is when the corporate overhaul was announced. and at a time it was lauded by analysts, it said this could help it devalue for investors. that hasn't transpired, and we are also seeing those concerns about whether there is still a bull case for the stock of alibaba. by the way market cap is half that of its rival tencent at the moment, and it slumped by the most in more than a year based on what we see with the stock to date. kriti: something we will keep a

very close eye on. bloomberg's avril hong in singapore. she talks about the alibaba story, i want to dive in a little bit more into what is behind that. robert lee from our bloomberg intelligence team joining us this morning. robert, give us the details. the cloud spinoff that people had hailed as almost a light at the end of the tunnel for a broad streak of losses for alibaba, not on docket anymore, why? >> as just was mentioned, there are forward-looking concerns about the state of consumption and china, that's a well-known concern and i don't think accounts for 10% decline we are seeing in alibaba share price today. the real surprise was that the decision to suspend or effectively pull the ipo on the cloud business, which, haddock on ahead, would've potentially realized most value amongst all the alibaba spinoffs that are happening.

i think there are a number of reasons behind that. the official line from the company is that the u.s. trade embargo on advanced chips is restricting the supply of available components for them in constraining their potential growth. there is truth in that but i would say the real reason behind the business not ipo is twofold. let's briefly go back to the ab -- abc of ipo's. it's a ipo business that needs to be on a growth curve that means to be a growth story. and it's still the alibaba cloud. even for businesses lossmaking it needs avenue the prospect of returning to shareholders and breaking into profit and giving the intense competition we see in the chinese cloud site your that is an indistinct future prospect. kriti: this is something we will keep an eye on as we talk about what alibaba's messages, not just for the ipo market, but to

all of the e-commerce business in the tech innovation hubs. robert e. lee joining us from hong kong. thank you for walking us through a. global markets from alibaba, there are tradable moments in the day ahead. 7:00 a.m. u.k. time we are getting u.k. retail sales. talking alibaba is a proxy for the asian consumer. the retail sales will have more insight into the british consumers specifically as we talk about whether or not that resilience we've been hovering around for the last couple of month is what's going to be keeping the u.k. economy afloat. at 8:30 a.m. u.k. time, madame lagarde speaking at the frankfurt european banking congress. all eyes will be on what the ecb has to say about their own rate hike pack. do they follow the same lead jay powell and his peers set for the rest of the world, 10:00 a.m. u.k. time, some of the final readings for the euro area cpi. if you see major changes could move your investor playbook. you can get a full round up of

the stories you need to know to get your days going. if you are a terminal subscriber. all you have to do is type in da go on your bloomberg terminal. you will see a lot of the major conversations, including the one on geopolitics. a big week ending with progress on the diplomatic front, and that's where i want to go next. coming up on the program, u.s. president joe biden says world history will be written in asia in the coming years. being of the latest from the apec summit dive into just how much progress has actually been made. this is bloomberg. ♪

kriti: the mayor will travel to germany to discuss reforming the eu stability pact. this is the euro areas to morse -- most important economies to look for agreement on those fiscal rules. maria, what is the goal here? >> you have the french economy minister who heads to berlin, who will meet with his german counterpart. they will talk about the eu fiscal rules because, remember, they were suspended in the pandemic, but will be reinstated next year. that is the famous 3% deficit.

it is understood now by almost everyone in the eu that the rules will have to be updated next year. another reason why this was a bilateral basis between the two countries matters is, these are the two biggest economies of the euro area. politically they carry a lot of weight. so the idea is if they get to a bilateral agreement, if the germans in the french can align, that means there could be political momentum to get this deal through the finish line up on a european basis. remember, the deadline is the end of the year, and there is no deal that you are in a situation where automatically the old rules will kick in in 2024. , everyone wants to avoid the situation. the clock is ticking and you are looking out five weeks of work left. the eu fiscal rules are key when it comes to setting up a budget for the members of the european

union. if you are a member it goes back to christine lagarde, the head of the ecb period she also says it will help the european central bank with its job if the fiscal rules are updated and agreed by member states by december. that's already a warning from the central bank, get it done this year. kriti: bloomberg's maria tadeo bringing us that crucial data. we will keep you posted. in the meantime, i want to go to another part of the world. u.s. president joe biden has met with counterparts from south korea and japan today after landmark talks with president xi at the forum. they pledge to make it easier for foreigners to do business in their country. united states ambassador of japan told bloomberg that amid the economic slowdown in china, president xi is desperate for american investments. >> president xi is desperate because he made serious economic decisions and political decisions where capital is

claim. the coin of the room for the united states, we have allies, we have friends, and they want to be aligned with us. kriti: bloomberg's bruce einhorn joins us now with more. what is president xi's playbook? how will he bring back those foreign investors? bruce: let's provide more context from what we heard. that was the ambassador to tokyo . known in the administration is one of the more outspoken china hawks. soy thing probably would not hear the same thing from antony blinken, but certainly that's a few held by many in the united states. that explains a little bit, the balance that president biden was trying to aim for with his meetings with president xi. they didn't make some achievements, for instance, they reached a deal on limiting the supply of fentanyl to the u.s.

from china through mexico into the u.s. they agreed to collaborate on climate and artificial intelligence. no big breakthroughs on trade, there were several efforts by president xi to separate from his meetings with president biden and other leaders to reach out to american business leaders . he had a dinner with heads of companies from boeing to pfizer to blackstone and apple. and then also gave remarks to a meeting of is this leaders. these were written remarks. he did not show up himself that speech, but in that he did pleasant -- pledge to take further measures to make china more attractive for foreign investors and for foreign business, and for some ways responding to those comments that we heard from him, even

though obviously president xi probably wasn't aware of those, but that's the sentiment that he's trying to address because it's been a really long time since xi jinping made a trip to the u.s. china largely closed down during covid, so there's a lot of work that the chinese need to do in order to reassure foreign businesses that they are still welcome. kriti: certainly something a lot of countries around the world are watching very closely. bruce einhorn, we thank you for that update out of the apec summit. just changes that have been mated from president xi and president biden thinking and president xi really looking for that investment after the exit is that you've seen from china in particular. that's just one piece of the equation p we know president biden tried to push president xi to talk about some stance with israel and hamas. that was on the docket and that's why want to go next. the idea of what's actually happening in the middle east. prime minister benjamin

netanyahu says israel forces found a hamas command center out of the hospital in gaza city, but international pressure on israel is growing with united states and european allies pushing for a peacekeeping. we are joined by henry meyer. walk us through the latest on the raid at gaza's largest hospital. >> that's been ongoing for several days, and as you mentioned, the israeli minister discovered a command center under the hospital. they were talking about the hospital being above the main military headquarters. you have to look at that in the context of the growing international criticism and concern about the death toll amongst civilians and more than 11,000 civilians according to the hamas run health authority. the u.s. has been public now in terms of its inpatients, i would

say, with israel. it still very much supporting israel's rights through self-defense, but there are supports for humanitarian causes, and that was with the un security council revolution was passed this week. it's a rare consensus for humanitarian borders. you mention for an international peacekeeping. it's interesting, it shows that the u.s. is now with its european allies looking into the future for what will happen after this conflict in israel has not signed up for that. the original idea was that arab nations might contribute. that seems highly unlikely. so it remains to be seen how viable this plan is, but it does tell you the international pressures growing on israel. kriti: what is the solution to the pressure, what is the united states and the eu actually proposing? henry: the details are still

quite sketchy, but you are obviously looking at the u.n. mandate, which would be able to ensure security in gaza. the problem with that is that the israeli operation is not even complete. there is still very substantial military aspects on how mass inside the territory -- hamas inside the territory. it has really only just begun to try to tackle the idea of setting in a you -- into what is potentially still a war zone is quite questionable. kriti: it's a really dire situation, as we say, almost daily with slow progress. thank you so much for keeping us updated here on daybreak europe. more geopolitics, more markets and more analysis to come. stick with us. this is bloomberg. ♪

kriti: one of the continents's biggest lenders says south africa's power crisis could be over in just two years if there is action from the government and the ceo of the group recently urging south africans to vote out politicians have failed to drive investment. she joins me now for more this morning. walk us through with what was said about the challenges in south africa. jennifer: it's important to put this into context just off the back of a report that we actually got from harvard talking about the detriments of this economy and what the utilities have really done to this economy. in particular, we asked about this because harvard said that south africa's trajectory is not

one of growth or inclusion, but rather stagnation and exclusion. we asked him whether or not he agreed with that. he did say that the researchers were reputable. as you mentioned, he did say there is a lot of potential for things to turn around and things need to turn around because what we see from the state utilities may have contributed to nearly 40% of the slowdown in the south african economy, but he did mention decisive action that does need to be taken in order to see this turnaround. so take a listen to what he said. >> we've got to see decisive action, urgent action, and we've got to take these decisions, as i say, as early as possible, and there has to be a level of certainty with the policy environment. we have pockets of excellence in south africa, for instance, the central bank is a pocket of excellence. they have tried to do what is

right for the economy, but there are constraints that have to be dealt with. jennifer, -- jennifer: those constraints as he was reflecting include a number of things that have been no secret here in south africa, it's of course the electricity issues, as he mentioned, there is the rail and logistics metric that has been dampening any growth in this economy. and also crime and corruption. we've seen the private sector really working closely with the private sector to try and address this, but we are also heading into an election year. so he was trying to caution that, all of this is good and well if the government is addressing it. but until we actually see some sort of progress in some quick progress on some of these issues, it's unclear what the outlook looks like for this economy. kriti: what did the ceo have to say about the outlook you are mentioning question market feels very intuitive that if you have these issues in the railroad

system, that the economy isn't looking too bright in the future, would he agree? jennifer: he did point to the signs that we are seeing from the national treasury in particular, also from the central bank governor, a lot of the action we've seen from those two individuals. in particular as it relates to rates. he believes rates will remain elevated at the beginning of 2024 and then start tipping down slightly at the end of 2024. but the big question mark is what we see out of the selection and whether or not voters here really vote based on a lot of the challenges that we've seen in a lot of these sectors that we've seen. a but he is optimistic that there could be some progress in terms of the electricity issues coming down slightly in the next 18 to 24 months as you mentioned in your intro. but a lot of this hinges on the action that the government is going to take, and really how

the private sector is going to respond and work with the public sector. in terms of what we did see from investec and their earnings, the banks are going to do particularly well. it's still unclear how the south african consumers can of fair and a lot of this sentence in -- uncertain environment that we see play out. kriti: as we talk about the african consumer, we know that one of the key trading currencies in the e.m. world is going to the south african rand. so everything jennifer is walking us through will have a good read through. take you so much for walking us through that story. she was really talking about the issues with the utilities, with the railroad system, which brings me to this fundamental idea of where the pressure from a lot of the economy comes from, global economies, not just south africa. china, even right here in europe, at its core will be energy, utility bills. this is where the chart comes in handy. you see this massive increase in oil prices.

oil is now officially solving into a bear market. a 20% decline from its peak back in september. it has to do with actually having a more healthy amount of supply, that's what's pushing the prices lower. do you start to see the opec price agreement. it would come in over the weekend, that will be crucial in terms of whether or not these inflationary pressures are still commodity driven. that will be the chart i will have you keep in the back of your mind. turkish president erdogan is set to arrive in berlin today and meet with the german chancellor. we will talk about what's on the agenda next. this is bloomberg. ♪ when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working.

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kriti: good morning and welcome the daybreak europe, i'm in london. let's get to the top stories that set your agenda. alibaba slumping after its spinoff dragging asian stocks lower. bouncing back just slightly from sinking into a bear market. averages at 1/10 of 1%. put it president xi pledges to make it easier for foreigners to do business in china. resident bidens as much of the world's history in the coming years will be written in asia. the u.s. and its european allies push for international peacekeepers to go to gaza. this as israel's pension men netanyahu defends the hospital. a lot of geopolitics. let's get a quick truck and how it factors into your trading day. a little bit of a turnaround when you look at euro stoxx 50 futures higher by four tens of 1% when you look at s&p futures, unchanged.

just 30 minutes ago you would've seen a major decline in all of those risk assets, and that's where i think the euro-dollar is interesting. 1085 three is where we are at on that currency pair. a little bit of a pullback from the dollar story, which is a function of the bond movers that we see. not major moves interns of non-volatility. what seems to be the sticking point in the market narrative is the oil story. higher by 1/10 of 1% after sinking into a bear market in yesterday's trading. in the context of volatility, a bear market doesn't mean as much for the oil market because oil tends to move 3%, 4% in one day. it is significant in terms the fact oil has been trading in line with wrist sentiment for a long time. in the meantime we have geopolitics in the background. a lot of the headlines coming out of the apec summit in san francisco. we are getting breaking headlines from president xi jingping. this according to them saying

there is no one's interests to decouple and break change. he's meeting japanese prime minister basically saying that japan should properly handle nuclear waste water, that they have agreed to maintain communications at all levels. and it looks like also making comments when it comes to the united states, agreeing to discuss the protection of trade secrets. again, really trying to put his best foot forward not just for the united states but for japan as well. he's made those comments over the apec summit and it looks like he is still in san francisco when those comments are being made. let's go to our reporters across the continent because geopolitics are alive and well in europe. from berlin to madrid to brussels, start off in madrid where the german chancellor is set to meet with the president of turkey this afternoon. amid the wars in ukraine in the middle east, berlin is a visit by a difficult partner. let's go to our germany correspondent, oliver crick. there's only one topic that

seems to overshadow all the rest, walk us through it. >> a visit by difficult partner is a very diplomatic and euphemistic way of saying, this is his first visit in germany in about three years to discuss with the development and the middle east, they say this means the war between israel and hamas, and what is very a polarized issue across the road, you would be hard-pressed to find two world leaders that have such opposing views on the subject. erdogan has said that hamas is not a terrorist organization, it is a liberation group. this week he called israel a fascist and terrorist state, to which it was replied is absurd. germany feeling it has this sacred obligation to uphold israel and its statehood, and it's important to take a step back at the damage done between turkey and israel. netanyahu met in person in september in new york and joked about how good their ties were. they are raring the same color

ties, but is hard to imagine such a thing going on right now, particularly with turkey as a nato member. there's a huge distance that exists between them right now. they will have a press conference, it will make for an interesting discussion. it's hard to see what kind of breakthroughs will be made. this being berlin, we will breaks through -- for protests in the streets of every stride. kriti: walk us through some of the other issues that are at play in this conversation. oliver: it's important to also consider there's a very interesting and historic relationship between germany and turkey. there are about 1.5 million people of turkish it is an schip or dual citizenship living in germany. that's the biggest group that exists within germany. mentioning the relationship in turkey is a key member, they are in the discussions with russia, they have taken a very different stance than much of nato. they are preventing or slowing down the agreement, but slowing

down sweden's ascent into nato. what the turks and what erdogan wants is germany to release this veto that they have put as turkey is trying to build up their military. they have the euro fighter jets that germany has blocked. but equally important, he's made illegal immigration one of the key principals and key issues he wants to tackle in germany and turkey is one of the great gate keepers of immigration into europe so, that will come up as an issue. kriti: bloomberg's oliver kirk in berlin. later this morning he will be speaking to the foreign policy representative over at the german social democratic party. that interview coming up at 9:30 am, london on the pulse. five: 30 p.m. in hong kong. he will expand on the things that he just laid out as well. that's just one part of the conversation in europe. the other comes from some sticking points over in spain. pedro sanchez has won reelection

as spain's prime minister in a confidence vote yesterday. the decision to reelect sanchez ends month -- months of uncertainty after inconclusive elections back in july. joining me now is -- live in madrid to walk us through the story. good morning, talk to us about how sanchez got this majority. we hear it's quite controversial. >> it is controversial and it's a parties that had to vote for him to be able to form the maturity. the key is that he passed an amnesty for hundreds of activists who took part in the 2017 independence push that failed and was illegal. it's controversial because people will go through their purchases, but also because the leader of that push was living in self-imposed exile in belgium. once this is all in place, she will be able to come back to spain. this has led to a huge backlash from the far right.

it says the rule of laws democracy. and sanchez went ahead and push through with it. as i said, he got seven other parties on board with it. quite some might say the third time's a charm. this is the third time he has tried to form a government. where do we go from here? what comes next in terms of what we can expect from him during his term in office? >> this is his third term, the first one was a short one after a no-confidence vote. and now, he's gone ahead with the coalition that has formed with a far-right groups that will be in the government and all these other parties that he will have to rely on to pass this legislation. the big expectation is that it will be very hard in spain, and there'll be some tensions between the far left groups, there are several of those in the broader alliance, but there are two pro-business parties

there. and the socialist between going central left, so it's going to be very interesting to see what types of laws they pass and how hard the negotiations will be for that. they promise a big package of pro-worker laws, but it's not clear they will be able to get those approved in parliament at the end of the day. kriti: just really trying to shore up that budget. joining us from madrid, we thank you so much for your insight. from spain we go to france and germany where the finance ministers are ramping up efforts to greet a new fiscal rules aiming for a full european deal by the end of the year. let's bring in bloomberg's maria tadeo joining us from brussels this morning. area, this meeting, what is the goal? maria: it's between the french economy minister and his german counterpart happening today in

berlin. again, as you say, we will talk about the eu fiscal rules, they were suspended in the pandemic, but will be reinstated for next year the question is what is the new format. the fiscal rules of the european union, and i think the issue matters in multiple ways, but the reason we are focusing specifically on the black -- the bilateral deal is that very few things move in the european union, certainly not in brussels until the french and the germans agree the fiscal rules are consequential, they are the basis for a lot of the fiscal rules reforms, the economy that we see in the european union, so therefore the deal today has to be agreed now. some of the messages that i got this morning from sources, what they say is that the tone between the french and the germans is excellent, there is a constructive attitude, and that they believe, maybe even if we don't get a deal between the two

finance ministers, they do believe there is space now for the landing zone. what is important is that the two countries bilaterally will inject momentum to the european level reform and hopefully get this deal done before the end of the year. kriti: you say injected into the european level reform, is there a readthrough into the members of the euro area, can you walk us through that ripple effect very quickly? >> this has huge ripple effects. if you want a budget, you need to know what the fiscal framework looks like. it also feeds into a bigger debate now for years. the area in particular into whether fiscal rules aid were effective, where applicable, and how did they feature into those bigger debates and foster growth in the euro area, beyond that, the european central bank says it's key to fiscal perspective to get it done before the end of

the year. as i say, in metals -- matters for the big euro area debate, but it is understood that if germany and france get to a deal, you will have something on paper that everyone can agree to or potentially debate in a group level, and then maybe get it ratified before the end of the year. it is clear that the old rules from 2024 is something they all say they want to avoid. kriti: we will have a read through into the way this market is trading when you look at this. bringing us everything we need. we are going to continue the theme of what she was outlining and talk more not just about the politics on the proposed fiscal rules, but how you actually traded. what is the economic readthrough. bank of america's global research economic economist joins the program next. stick with us. this is bloomberg. ♪

kriti: there's a lot of geopolitics in europe, surprise surprise as we talk about new fiscal rules being discussed between france and germany, a new political situation has the prime minister officially elected for the third time. even starting to see a little bit of geopolitics from the release bleed into the conversation between germany and turkey. all of that has to have some sort of economic breakthrough we talked about the balance between the federal reserve and where we play this market. to digest that, let's bring in the european economist over at bank of america. waking up early, we thank you so much. evelyn, let's start with the geopolitics before we get into the monetary policy of the many,

many crosscurrents across europe, what is top of your radar? >> it has changed a little bit over the last few month, we were particularly nervous with the oil price because it would have the same power, even more could trigger another ecb hike on concerns of inflation expectation. the area has just been a -- a little bit more domestic. we see from a macro perspective, elements that are going unexpected worrying in the euro area remains very sticky, very high, but that may be consumers taking precautionary actions against anticipation that their outlook on the past energy has consistently deteriorated, which could weigh on the outlook. the corporate margin showing signs of compression, we have been expecting that for a while.

i comes through at a wider margin or with the corporate telephone service lines. so that starts to materialize the data, and then you have the third element which is the labor market weakening. employment growth in spain and france has come. we see more contraction. in almost simultaneously wage growth shows signs of slowing. >> the geopolitics remained difficult. but we have a bit more room to look at the domestic market development, and they don't really look fantastic either. kriti: not looking fantastic feels like an understatement. let's talk a little bit about the fiscal deficits and some of the budget set a lot of these governments are coming into, which i think is fueling the geopolitical debate. what we're talking about the budgets of france, germany, spain, arguably the u.k., but we will put that aside for just a moment, where is the biggest

issue when it comes to meeting some of those 2024 budgets and in the place -- face of the inflationary stories, where is the biggest risk factor? evelyn: in europe, it's too full. you have governments that have penciled in an optimistic forecast. look at france, they both have growth forecast, budget plans. that's a risk when you compare it to the euro area. there's individual countries around that. so that's one risk to the budget numbers themselves. the other risk really is a moment. we have in europe a set of fiscal rules that if you were to apply them, it would have more of what governments have been out of today. we get the tightening of roughly half a percent in structural balances for what the european

commission estimates, so that should be ok. but if we cannot agree on a new set of rules or if you cannot agree how to fly a, potentially ways that we have in the current set of rules, next year or the year after could have to tighten considerably compared to what we know and that would add to the growth risks of what we already have. kriti: it's interesting this will be a key sticking point. all over that story. evelyn, you specifically mention the fiscal deficit. as we were speaking, i want to bring a headline that u.s. president biden is a global story. you have deficits over the united states. u.s. president biden has signed that stopgap funding bill of wording -- averting a shutdown, which was driven by this idea that there is the fiscal deficit that has to be tackled in kicking the can down the road. it is quickly affecting monetary policy. i want to bring you back into the conversation and talk about

how that monetary policy to verges or brings ecb onboard. we start to have this dovish pivot being priced into the markets from a european economist point if you. do you think the ecb will follow the fed's lead or at least what they seem to? >> we would hope ecb doesn't need to follow the fed, but come to a conclusion that the euro area economy is weakening quite fast, that inflation in the euro area is disinflation. quickly. and we are simply not in the same position as the u.s. has been. we haven't been over the last years, we are still not, so we are fighting an economy in which disinflation is progressing. and we are seeing that with some of the numbercrunching we are doing, so we started to calculate some instantaneous inflation, so decaying wait on past inflation to get a better

grasp. what we are seeing is that in terms of disinflation and services, the euro area is progressing considerably faster and is already further ahead compared to the u.s. are the u.k., for instance. self from that perspective, the tibbett to the ecb, i'm not trying to say rate cuts are imminent, the we have a scenario in june 2024, that is arguably a very long wait, considerably -- considering where we are in the euro area, we are very advanced in our view. kriti: keeping a very close eye on the ecb, coming up with the next decision in about a months time, december 14, our european economist, thank you so much for your insight. she was talking about inflationary trends, but also bolstered by the global

consumer. that's where i want to go next. it's not just the european consumer, it's the american consumer. a great proxy for that is walmart. a major retailer falling the most in more than a year in a u.s. session as it struck a concerned tone on the outlook for those american shoppers. simone foxman has more on their latest earnings report. >> ahead of the world's largest retailer hitting a sober note when talking about the u.s. consumer. walmart ceo doug millan saying the dreaded dword, deflation. he talked about how prices, while higher than they were a year ago for groceries and general merchandise, have been slowing their rise and may even fall in the coming months. that is part of what put walmart shares down 8% after reported results on thursday. but it was able to notch some growth. comparable sales up by 5%, and the company was able to raise its profit outlook for the coming year, even though it was

less than wall street anticipated. we started to get a similar theme from retailers across the united states. they say sales may fall for the next year, or grow less quickly than many had anticipated. but they are all on top of their margins and they see even better earnings per share than many had anticipated. that was certainly the story with macy's and williams-sonoma furniture retailer today. both of their shares rising as well. it was more or less what we heard from target earlier in the week, which didn't do as badly as expected, nor did home depot, the outdoor goods and construction materials retailer. we have a lot of earnings to come next week, the likes of lowe's, dick's sporting goods, nordstrom, american eagle, but all of this, signs we are seeing a slightly slowing u.s. consumer after a lengthy time of tightening from the federal reserve, and ahead of an all-important holiday shopping

season. i'm simone foxman, bloomberg news. kriti: all that having a readthrough in the global economic picture. more on that next. stick with us. this is bloomberg. ♪

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kriti: we will talk about pricing and with the next ecb decision is going to be, it's worth mentioning a lot of investors smart money, etc., these are the major corporate ceos that said there is a lot of money on the sidelines. it's an interesting dynamic because that was the narrative three and a half years ago when covid prompted this easy money policy since then. we've been talking a lot about this idea, where are people actually position? the answer is in the front end of the curve.

basically money marking funds. this is a great chart going into the weekend. the total amount of market assets, $5.7 trillion, we are at a record in terms of money market exposure, which is the equivalent of cash. that will be important when we talk simply about how you want to be position, how liquid you want to be. this is the market you want to do it that speaks to a lack of confidence that you are doing a broader market. you don't want to be positioned in the long-term debts, this chart says everything about it. that's one part of the equation. talk about geopolitics. coming up at 9:30 am, we will speak to the foreign policy representative from germany's social democratic party. in interview you don't want to miss at nine: 30 am markets today starting right now. this is bloomberg. ♪

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anna: this