tom: good morning, this is "bloomberg daybreak: europe." these are the stories that set your agenda. stocks in asia fall as jenny's

inflation turns negative for the first time in a year. in the u.s. markets phase another volatile week on a growing fears of a recession. will there be a deal in the desert? president zelenskyy had to saudi arabia for talks with the uss donald trump says that faries on intelligence sharing with ukraine has been lifted. taking the fight to trump, mark carney wins the race to become candida's next prime minister with this message for the u.s. president. >> america is not canada, and canada will never ever be part of america in any way, shape, or form.

tom: european futures pointing higher by point example present that the the ganthier by the end of the week, three straight weeks of losses for u.s. stocks into week of losses for european equities despite the impulse around the physical spend on defense were germany at the heart of that story. but the 100 features pointed to gains of 26 points in the you cake s&p futures pointing devices, .5 to 1%. it nasdaq wanted to futures pointing lower by 130 points. this week has been on the tech sector in the u.s. and to get continues for u.s. stocks. moved into treasury on the front-end on a recession fears in the u.s.. president trump not putting back strongly on the expectation from some quarters that you could be looking at a picture of negative growth eventually in the u.s. in the medium-term. 3.97 on the two year. yields dropping two basis point of the session today on the safe

haven tilt and charge for protection. euro-dollar at 1.08. brent low $70 per barrel pegged to a going on in economy and deflation out of china reminding us of the softness when it comes to event. gold at 2910. let's cross over to singapore. everyone standing by for a check on asian markets. avril: we are seeing growth worries weighing on not just the u.s. but also asia. jenna cpi showing up below zero for the first time in more than a year. clearly deflationary pressures processed as the country is facing off with its key trading partner. it is not just about these tariffs and u.s. farm products that have gone into effect today.

over the weekend they announced these retaliatory tariffs on some canadian products, so it is very weak in terms of risk appetite, although the nikkei is an outlier because of the chip stock inbound -- regan. the renminbi is on the slide. hang seng tech shows you how it ai optimism as of late is not enough to even offset the deflationary pressures, and this chart courtesy of mark cranfield as you have the 24,000 level that you saw earlier, we seem to be headed to a close below that today is a key one to watch, because if you look at the moves from last week, powerful rebound, a bit of a decline today. a blowoff top pattern is emerging, and if we get confirmation at the close today could be problematic, and negative in the short term for chinese equities. tom: avril hong with a check on

the asian markets and inflation being a drag broadly across the space. not to what we have been hearing from jay powell i made inventing concerns about the u.s. economy. jerome powell acknowledging increase uncertainty in the u.s. economic outlook, but he says officials do not need to rush to adjust policy. >> while there have been adjustments changes remain high. we are focused on separating the signal from the noise as the outlook evolves. we do not need to be in a hurry and are well-positioned to await greater clarity. tom: valerie tytel joints me. to the markets believe jay powell when he says we are in no rush to move? >> equity data decent rally on

friday because of the optimism from powell. he went on to state that the u.s. economy is in a good place. did not mirror the growth of risk that if it the u.s. equity market, but we ended on a positive footing. to be with his 200 day moving average with the first time in a year. we closed about it, and we didn't dip a session. pal also had some comments when it comes to inflation. he says he is confident about inflation's trajectory backed up to 2%, and on that we have cpi printed on wednesday. we also get some data on the u.s. consumer. we have friday, the university of michigan survey, a consumer sentiment survey, baby some questions out there that will mimic recent concerns. these recent growth concerns on the u.s. economy, because in the overnight session we are risk off. we are seeing i had to u.s. equity futures. a move into treasuries, and the dollar is a bit stronger as well , so with these growth scare concerns be amplified this week or put to bed?

that is the markets. tom: thank you very much. the u.s. president has weighed in as well, donald trump deflecting concerns about the risk of the u.s. with session. here is what the president told fox news. pres. trump: i hate to predict things like that. there is a period of transition, because what we are doing is very big. we are bringing both back to america. that is a big thing, and there are always periods -- it takes a little time. tom: kriti gupta joints me now. -- joins me now. >> carefully worded but not unlike what he said about the campaign trail, is directly terrorist in pacifico cannot take a hit on the economy. here are already seeing those worries baked into things like the drudge report, but also the

beige book. we have seen elements of this in the past couple of months when it comes to various regions of the country as well, but this is something donald trump send you have to take a spoonful of sugar with your medicine, and this is important as well, because this is one of the biggest criticisms he is facing in terms of his tariff approach especially when it comes to the way the stock market is reacting. it is the volatility, the uncertainty in the push and pull the markets are reacting to the tariff approach -- he is doing that is a way of getting tax cuts for american citizens and really being able to balance the books of a deputy -- deficit concern looming on the rise and's her biggest ally. these are the earliest pieces to get those cuts on the other end. tom: is there any sense at least from some quarters about a slowdown in u.s. economy, research interests, stagflation, that idiot that is derailing the trump's administration's present tariffs. >> you have seen many corporate

lobbyists at the threat of the white house trying to staple back on some of this. you have seen in the auto space, the pharmaceutical space and multiple spaces well, but the argument here as well as this is also coming with the deregulatory government as welcome as of the idea is perhaps you can pull down texas, pulled on some of the redtape in exchange for tariff concerns, but so many of the price takes american citizens have been able to absorb have come from leftover savings as a result of covid stimulus checks. a lot of liquidity shall baked into the system. if you are not talking about a hawkish federal reserve coming down the pike married with the idea of depleted savings, suddenly consumers will not be able to pay a little bit extra for cars or food, and that is when the concern lies among the economists. tom: kriti gupta, thank you very much indeed. breaking their concerns about the was economy of the president himself.

they geopolitics, one of the factors tying into concerns around volatility. u.s. and ukraine negotiators are said to meet in saudi arabia tomorrow to discuss entries with russia. ukrainian president zelenskyy is traveling to the kingdom to meet crown prince mohammad bin salman . this coming as president trump says he has led to lifted a freeze on u.s. intelligence sharing as russia says it is ready to discuss a temporary truce. pres. trump: i think what is going to happen is ukraine once to make a deal, because -- wans to make a deal because they did not have a choice. russia also wants to make a deal because they have an address either. tom: joining me now is bloomberg's russia economy editor. what is the latest is related to these meetings in saudi arabia? >> we have officials gathering

in saudi arabia. the u.s. is seeking a cease-fire agreement. this is a high-stakes meeting for president zelenskyy. we saw the disastrous meeting on friday, and we thought there was a bit of a hard relationship between the u.s. president and ukrainian president, but he needs to make sure ukrainian considerations market that are taken into account, so it is a tough line for them to walk making sure he still has a seat at the negotiating table and can still engage the u.s. president at a time when the relations are quite front --fraught. that is one of the condors we will be watching closely at this meeting today. tom: we have seen this pressure campaign from the trump administration, whether it was a dressing down in the oval office, there not it was the

ending of weapons supplies and then intelligence. from saint keeble brought back some of the intelligence freeze. is that true? where is the pressure on russia at this point? it seems to be pretty one-sided. >> that is a great point. it does seem to be one-sided. we get here on friday that trump threatened new sanctions on russia as she said they continue to find ukraine, we have not seen a significant amount of pressure. we do know from people in moscow that russia may be willing to agree to a cease-fire if there is progress toward a solution, but most of the pressure has been on ukraine, and ukraine is nervous because they have the most to lose and they are worried their security considerations will not be taken

into account if the press remains on ukraine and not on russia. tom: excellent update, greg sullivan. a significant week in terms of the meetings taking place in saudi arabia around a tentative cease-fire and maybe some kind of agreement. here is what else to be thinking about today in terms of the german economic picture as lawmakers look to push through additional spending. it german industrial production. concerned about the trajectory of the economy, but maybe there was a turnaround in the works for the second half of the year. volkswagen country with earnings on tuesday, and then on wednesday in terms of the data at the u.s., it is cpi after jobless claims on friday, the inflation print on wednesday. will we build on concerns of stagflation in the u.s. for put those concerns to bed?

coming up, we discuss growing concerns about the u.s. economy and the global impact of tariffs with sonali rawal. that is coming up next. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." growing concerns about the out of the u.s. economy are weighing on investors, arrows, innate higher unemployment rate in federal workers job cuts raising the prospect of a slowdown in the world's largest economy. let's discuss this and the possible impact on india with sonali rawal. thank you for joining us. let's start with the story on the u.s. are you and the team starting to pricing a u.s. recession at some point this year? how high are those risks right now? >> thank you for having me. we think that the u.s. economy is very resilient.

there were talks about recession in 2023. that did not happen. in 2024, there were talks about recession, and that did not happen, so we did not think it is a big risk factor for 2025, but the big concern is inflation. a fiscal deficit is mounting, and that will definitely have an impact on india. having said that, only time will tell in case recession comes in. we do not live in a world of isolation, and definitely there will be any impact on india. we are experiencing a lot of the impact of mounting debt from the u.s. with the weight rates are. a lot of capital flight is taking place from indian markets to the rest of the world, so a lot of foreign investors are from the u.s., and we have already seen any impact of that, but we do believe that is a reversible trend and near its

bottom end. tom: as an open economy and -- into guest away up -- india has to wiegh up. >> if the facts come in again that would be good for india, because then we could see the flight of capital that has gone out actually coming back to india, because india has got long-term growth prospects in the fundamentals to remain strong. it has been temporary that money has gone up because rates have and get outside, and also the foreign investors to follow a certain pattern. the look of profits wanting to buy low and exit hi, so blood is taking place in october with the

indian markets were white-hot. however, if edwards equipment where it is -- if fed rates remain where it is or if pressures come back with all of the terms going on, then to will see the fed rates coming down, and if that continues to be up that could be a potential risk for india. tom: on the tariffs and trade part, what is the tariff risk for india, and to what extent is that preston? the nifty 50 is down 13%, 14%? >> that there -- the tariff risk is big for us because the u.s. is one of our largest trading partners. we have a trade surplus of $77 billion with the u.s., and to

some extent it has been accounted for. because if you look at the fiscal deficit target at finance minister has given, it has given, it is been about 4.4%. we were expecting it to be a little bit more, to be lower, so some amount of risk has been built in. we will see the fiscal deficit coming up, but we have been in a comfortable position on the fiscal debt. we are in a strong position in terms of macro fundamentals, but we will see any impact of tariffs coming in because the industries will have to be fueled by the government with the confused tariffs -- the infused tariffs we would see. india is open to having negotiations in looking at trade agreements. we have negotiated rates with the eu in the past. talks with europe and the u.k.

as well. prime minister modi has had a diplomatic approach on this and not just going out on an outright trade -- tom: we note that they have presently a strong relationship between the leaders of both countries, and we will see if that holds up amid these tariff risks. thank you very much. we appreciate it. european gas prices fall from record highs, but doubt the industry faces the challenge of storing enough gas for next winter. we have the details coming up. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe."

in just seven years the u.s. as elevated itself from an irrelevant supplier of liquefied natural gas to the world's largest, giving donald trump unprecedented leverage. production capacity is expected to soar 60% in the first half of donald trump because presidency. in europe gas prices has fallen to the lowest in five months. the industry will turn its focus to restocking supplies over the summer. our bloomberg nef analyst joins us. our gas applies looking at the moment? >> if you look at the average over the past few years, our levels are sitting at 37% at the moment. this is not far from pre-energy

crisis trials -- levels. the markets make sure to keep supplies at a higher level before the end of winter, and that is why the market is anxious at the moment about the current level. tom: top line historically not below average, but giving the context of a gas coming from russia, 37%. historically you are suggesting it is not a massive outlier. what is happening when it comes to prices? >> prices have come down from their peak at the beginning of the year, and that is mostly due to the fact that the end of last year we faced a few challenges around gas consumption. there was the colder weather compared to the previous year, and we had a hold in question

flows from the east at the end of 2024. most recently, we have seen less withdrawals from storage, and that is rich with the market a little bit. tom: what is the outlook for prices through the rest of this year and into 2026? how much transparency do you have around forward-looking pricing? >> one interesting thing at the moment is we are seeing an inverted for the curve -- forward curve for gas prices. we are seeing the summer prices in 2025 being higher for renter prices for the following winter, and that is unusual. the european commission has had

storage targets up to 90% by the first of november. those storage targets good to be readjusted at some point in the future, but are given to her target at the moment, the markets are making sure that they refill storage throughout summer and not through the winter. tom: that explains conversion. thank you very much indeed with some fantastic analysis. coming up, mark carney wins the race to become candidate's next prime minister taking over amid the trade spent with the u.s. he is not pulling his punches on trunk. stay with us for that -- trump. stay with us for that

tom: good morning, this is "bloomberg daybreak: europe." stocks in asia fall as johnny's inflation turns negative for the first time in more than one year. and the u.s. markets face another volatile week on growing fears of a recession. will there be a deal in the desert? president zelenskyy has for talks in saudi arabia as president trump says if present intelligence sharing has just about been lifted. plus, taking the fight to trump. it mark carney wins the race to become candidate's next time -- prime minister with this message. >> america is not canada, and america will never be any part of america in any -- candidate will never be any part of america in any way shape, or

form. tom: futures pricing higher by .71% after a week of losses despite more fiscal spending of germany. bund futures pointing lower. ftse 100 futures higher by 27 points. as if you futures ended negative territory down by 27 points pointing to losses of .5 of 1%. three straight weeks of losses in the divergence of europe. let's flip the board and have a look cross asset. los into the front of the treasury curve. two year yields down 25 basis points since the start of the year. yields on again, on the front-end down two basis points. 1.08 on euro-dollar. rent back below $70 per barrel.

the concerns around recession risks, softer data out of china on inflation weighing on oil. i bit of a move into gold, the yellow metal up at 2%. let's get to the politics of candida, because the former bank of canada and bank of england governor mark carney because win the race to become candidate's next prime minister. the transfer of power is expecting to take place within days. he says retaliatory of these will stay in place until president trump drops tariffs. >> the canadian government as rent the retaliated and will retaliate with our own terrors that will have maximum impact in the united states and minimum impact here in candida. my government will keep the tariffs on until the americans

show us respect. tom: i until the americans show us respect. we are joined by bill faries, and mark carney striking a defiant tone. let's take a listen to what he had to say about the positioning of the pressure that is coming through from trump. >> we didn't ask for this fight. but canadians are always ready when somebody else drops the gloves, so americans should make no mistake. in trade as in hockey, candida will win -- canada will win. tom: you heard it from carney, the incoming prime minister of candida of the gloves coming off and that spat with the u.s. how well-positioned is carney

for this challenge when it comes to u.s.-canadian relations? >> he comes with an impressive resume. he was at the bank of england during the brexit process and that the bank of canada beating at the rink the global financial crisis, so if you were looking for someone with a resume of dealing with economic crises, i think he has a lot of that background. of course he also asked to figure out some time to call elections, so whether he stays in office or not will be up to the committee of people, but he is somebody who is dealt with turbulent economic times, and i think is language suggest this difficult situation with the united states could last a long time. tom: he had this landslide within the liberal party. this could end up being one of the short lived premierships or could be this remarkable

turnaround. i will be thinking about the election prospects? >> i think the liberals in general were not looking good a couple of months ago when you started seeing cabinet resignations and the pressure on trudeau to step down. i think there was a sense the liberals were on the back foot. perhaps ironically the fight with donald trump has reinvigorated them to some degree so they are chances improve. for carney, at the big question for them is going to call elections, because that would involve a caretaker government for the time being. u.s. euro set to come on in early april, so the question is do you do that right away and will the election 30, 45 days later or do you wait to work your way through this with the u.s. administration and said to have elections after you get through this process? i think it looks like a contentious period between the u.s. and canada going forward.

tom: whoever is the prime minister. thank with the analysis. on the back of the decision of the liberal party to elect to mark carney to leave their party and to become the prime minister. syria's interim government has formed a committee to investigate a violence on cities . authorities say clashes erupted on thursday when armed event affiliated with the guys to the regime attack to multiple security sides. this year you have -- the syrian observatory for david wright says that that told isaac remain 13 -- reach 1300. in romania, street protests and the wrath of the trump administration. they called the decision an attack on democracy worldwide. his cause has been taken up by

the american team. the court canceled his victory in the previous vote in december. president donald trump says he is negotiating with four different buyers for tiktok up is because business in the u.s. and a deal for the social video app could come soon. who did not specify the contenders or state which way he was leaning. tiktok is limited deadline to strike a deal or be banned under a bipartisan bill last year. germany's conservatives and democrats have agreed to deepen talks of reforming a government as pressure builds on the gentleman waiting to bring reforms. let's bring in our bloomberg

germany editor who recently published a book. alvar rb from an agreement on a new government? how much progress has been made in recent weeks since the election in germany? >> on saturday at the agreed to go to coalition talks. it is a residual talk because it is the only centrist coalition available, so they took that step faster than expected. that is a good sign on its own, but what happens next? the coalition negotiations are weeks, and those can be contentious as the parties get down to the nitty-gritty of what do policies look like and what does the government program look like. tom: still weeks away, and in parallel, a hope to push through

policy in the current parliament before the bundestag changes, and part of that will be as if spending on infrastructure and defense. how much confidence should that gets through, and is that the turnaround that this country needs? >> yeha, -- yeah, i think that will be a critical moment for this government, because they are looking to the old parliament to fund the program of the new parliament, and they are going right now. they have a narrow window to pass the spending package, because if they do not do it now under the old parliament, the conditions change in the new parliament. the far right afd, which intend on blocking things on the spending package. it will face legal challenges. right now we have seen already the greens are skeptical, and

the spd needs the greens you get the spending package through, so they have started to ratchet up the price for, and it is going to be in tense couple of these. at the end of the day because germany needs this money, they have been underspending for decades and that is why they accepted the need to do something, and the scale of this package is a bazooka. the greens, it will eventually be likely to go through, but there are a lot of tensions before that happens. tom: and the greens trying to extract whatever they can before that point. as you have documented, germany has been in and out of crisis for the last 20 years. what makes this period standout? what makes this different? >> we have seen this in the

federal election along. there were seven parties competing for the election, and that is not been the case in the past 70 years. there was generally political stability even around the early 2000's. that was still dominated by the central parties of that cdu and spd. the spd has fallen to third place in the far right is in second place, and the fragmentation degree its risks, political risks of coalitions like we are seeing out like we saw in the olaf scholz government of coalitions finding it difficult to push the reforms the country needs and actually rallied the country together, and that is where the different versions of this crisis versus the crises the trinity is faced in the past. tom: we will washington d.c. of germany can meet this moment.

chris with fantastic contacts. thank you for the details as the two main parties continue with our talks -- there talks. most all of germany's airports face disruption because of a strike by the labor union. ground personnel, baggage handlers and others have been urged to walk out as they demand higher pay and more holidays. coming up, we will discuss the future of ai with the cofounder of poolside, a startup that is raise hundreds of millions of dollars and is backed by the likes of nvidia. the conversation is coming up. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe."

top ai developers admin artificial general intelligence the main goal, the term referring to artificial intelligence that can perform better than humans. the software industry could be the first step in terms of revolutionizing were being revolutionized by ai of these difficulties. let's discuss this with eiso kant, the founder of the company poolside. a big footprint in europe. they have raised hundreds of millions of dollars with the valuation of $300 billion. we appreciate you taking the time. talk to us about the product that you are building. what a kind of demented is he going forward? how big is this market when it comes to developing models that can provide these ai

capabilities? >> good morning. the way that we look at that as his we are living in a world where right now ai is starting to drive 20%, 30% gains for software developers. but the opportunity is in the coming years we see the gap between human capabilities and ai entirely close, and what is the limit? our view is that is an incredibly large market. tom: who are your men clients? who are you -- main clients? what part of this economy are best poised to be your clients going forward? >> we operate in defense, gis,

organizations between 500000 and 100,000 developers. 70% of the world's software developers didn't large enterprises, and that has been our focus and stay zero. tom: how do you compete. what is the preposition versus microsoft's copilot or some of the products being pushed out by openai? >> first and foremost, how smart are your models? we really focus on building the world's most capable and smartest models in the area of building software and assisting developers today in building software, but that is not just a model. when we work in these complex enterprise environments, it is our goal to not just provide a model, but an entire system that runs behind their firewall that allows the application experience and the data layer in between two terabytes, so other

general-purpose models are trying to focus on everyone, we focus on serving software engineers in the world. tom: this is a perennial question you put to those building models, which is around artificial intelligence, the key driver of openai, deep mind google as well. what is your best bet as to when we get to artificial general intelligence however you define that? >> let's start with the definition. the first definition we should use his human maple -- human level capabilities of the laptop . if you would have asked me this two years ago i would've given you a 5 to 10 year horizon, which is founder speak. we know when it is going to happen, but we do not know when.

in 2027 we will find ourselves in a world where there will be human level capabilities across the vast level of knowledge work and in software development first. tom: that is a rapid timeframe. what impact does that have on your clients? what impact does that have on industry, the economy? >> at a high level we should try to anthropomorphize the problem and think of this is heading toward workforce. we should be seeing this is where the world today is 100 million developers, it will be capable of having 500 million or 20 billion limited at the bottleneck of energy and chips underneath him and when you are adding so much supply to the workforce. we will be able to build a vast amount more of software and automation driving the cost of goods and services down to zero

in putting scientific research, and it opens up questions for the world that it needs to answer. it comes with a shadow with the same time. tom: what is the shadow? kriti: i -- >> i think economics 101 where we are adding a product to market before it can exorbitant -- it can absorb it is we will have to talk about a soft market where it can land agi so we are not decimating our workforce. our view is this technology should be landing in a careful way and not as a shock to the system. tom: we will watch to see how it is absorbed within that relatively short timeframe you have outlined. briefly before you go, on the finding front, but that you have raised $500 million in your latest run. he left big backers in terms of bain capital, nvidia and others

signing checks for the company. where are you on funding and the valuation of the business? >> as you mentioned today we raised $600 million to get to where we are today. the vast majority of capital was to compute to build more capable ai, and in our future we will have to continue to scale the compute audit which we train models, but as of today we are not in the market out of fundraising. tom: putting that money around compute to work. eiso kant, appreciate you taking the time joining a set of paris. staying on tech with a focus on ai, tsmc's revenue, a big chunk coming from ai chips that are turning out driven by a resilient demand and for nvidia chips that power the ai frenzy.

the world's largest chipmakers seeing sales serve as a barometer for the chip sector. tsmc faces uncertainty including the potential on tariffs on chip imports. plenty more coming up. stay with us. this is bloomberg. ♪

>> the next payroll print looks look uglier than this one, so we can what at the side of relief as a result of today up is because data because we will get hit significantly. >> the consensus traits of the year have been upended. currency, wage, relative u.s. equity performance to the rest of the world. >> nothing here screams recession and no broad-based

instruction of jobs yet. >> we are bouncing around to see which plates out first? inflation or the slow down. >> the real risk if you have sentiment that deteriorates that results in a more meaningful slowing, and i think the fed would be attuned to that. tom: re-city reacting to the latest u.s. jobs report on friday. a print of 151,000 for the recent month of nonfarm payrolls. unemployment rate moving higher, 4.1%. the headlines belying some of the pressure coming through according to bloomberg economics inc. according to softness and use all that being discussed. pushing ahead, is the labor going to deteriorate at a rapid pace? here is what happens when it comes to the federal jobs picture, doge coming through and cutting jobs at a unprecedented

rate. unemployment claims coming from that part of the workforce. all building to the case that you were going to be looking potentially at a u.s. recession. recession risks starting to pick up, odds in the third quarter rising, and those jet the alarm bells as they sit on the sidelines when it comes to the u.s. equity story. let's have a look at what is happening in chinese markets, cpi coming through. consumer prices dropping again. the consumer agreement under pressure, the real estate crisis not fully addressed. the story out of china is not comforting. stay with us. ♪

>> good morning from london. we are one hour away from the opening trade and here's what you need t.