>> good morning, this is daybreak europe.

heathrow is forced to close after a passenger complaints. plus no deal,, delivering money to ukraine to buy ammunition. heathrow airport has closed.

today you are seeing euro stock futures in the red on the futures though are pointing to the green. building on losses, also just to point out, s&p is in correction territory from the peak, technically correction territory.

a dovish healed. concerns about the tariff outlook weighing on the currency and then the pound is also down and let's not forget bank of england meeting yesterday. market was surprised to see that the members who called for a rate cut changed to know cuts, mild surprise with the pound slipping and then brent crude trading above $72 on news that the u.s. tightened sanctions on iran and chinese refineries, so it is part of the pressure

campaign d.c. is applying in the energy space. back to the top story, heathrow airport will be closed all day on friday after a significant power outage changing travel plans for hundreds of thousands of people. let's go to guy johnson. what do we know and how are authorities responding to the fire? guy: the fire is not actually at heathrow, just a substation nearby taking out power to the region and heathrow is caught within that, so it will be closed all day and open at midnight tonight. but that is unconfirmed. it will be closed all day. the power should be restored by

3 p.m. and this is one of the busiest airports, second busiest on the planet. 1351 flights today. 700 of british airways. other flights will be afflicted -- affected as well. aircraft have been turned around and qatar has six flights impacted. big airlines being affected, it is a huge moment, this is the last i can remember the first time heathrow has been shut down.

questions will be asked about redundancy and the ability to function. joumanna: yeah. yeah, yeah. you ran up through responses, put into context given how busy an airport is, how much of a global impact could this have on travel? guy: enormous disruption. they are meant to be somewhere else, these aircraft are constantly in motion so flights

not taking place means this will not be isolated to just the u.k., it will ripple around the planet for days and days and days. it could last two or three days. it will take a long time for aviation to reorganize and sort itself out. joumanna: mmm, well, our head of tv is stuck in dubai. guy johnson, thank you. you can get analysis at tliv . a great resource. back to markets, avril hong is in singapore and we have been talking about risk off sentiment, walk us through the

price action in asia. avril: risk off has certainly heightened, tariff uncertainty and clouding global outlook is outweighing fed relief, reflected across the region. hangseng sliding into negative territory against bearish calls, including b of a. chinese shares declined and this could be the worst since november as tech turnings

looking quite solid. valuation gap with u.s. has narrowed, chinese stocks need to do more than being attractive. take a look how fx is faring with firming in u.s.d. reminbi in focus, the yen fix is highest since trump came into office and it feels like prepping for tariffs on april

2nd. [no audio] joumanna: ... thank you. caroline lovett is repeating that further tariffs will come into effect. >> trump has been clear, it will be a big day on april 2nd because the president will highlight ways america has been ripped off and big tariffs will go into effect. joumanna: valerie tytel, we have been talking about the tariff

deadline, how is it weighing on markets? >> when she repeated the warning, we ended in the red. good news is the s&p is looking to snap it's four weeks of losses. fed ex reduced its guidance and the stock sunk. from nike the io turnaround plan is not going well and margins can be impacted due to the

tariff risks. nike shares are down and mike roman -- micron was up 1%. the other thing is the options expiring from single stocks to indices with surging trade volumes. joumanna: let's watch out for the s&p today. valerie tytel, thank you. president trump will sign a deal with ukraine after a tense

meeting between trump and zelenskyy. john herskovitz joins us for more. tell us about the contours of the deal. >> president trump said the deal would be signed soon. 50% of the money will be used for reconstruction so things like iron ore and coal, what zelenskyy wanted was security guarantees but the deal is to commit the u.s. to long-term

investment. ukraine is paying into the fund that pays for reconstruction. supposed to be coming soon on the day trump announced an order , trying to get things like rare earth's for important stuff, trying to decrease dependence of the u.s. on minerals. joumanna: yeah, yeah. trump denies a report elon musk will be briefed on war with china. what do we know?

john: there was a report, these are the most classified things that show how things would be followed. defense secretary pete hegseth said elon musk will go to the pentagon but denied he would be briefed on china. elon musk is being shown -- it is considered he could be seeing these outlines, but he has lots of business in china.

we will see you what happens but denial from the white house. joumanna: probably feeling heat due to the tesla performance, john herskovitz, thank you. a look had today in terms of data, later on at 1 p.m. williams will be speaking. we will see the outlook in terms of interest rate cuts and then later on at 3 p.m. watching out for consumer confidence. it has taken a hit given the

potential tariffs. terminal subscribers can go to dayb and we are leading with the story of disruption at heathrow airport. the european union fails to agree to aid for ukraine. the details next, this is bloomberg. ♪

joumanna: welcome back. the eu failed to deliver and to

ukraine. ukraine's president says they need weapons now. >> this is true for air defense, we need funds and we would appreciate support with 5 billion euros as soon as possible. joumanna: ollie crook joins me. what did we get at a summit? >> though support for ukraine

has not diminished it is stagnating. basically leaders where failing to put together a proposal, they talked about 40 billion, then 20 billion, then five and they failed to conclude on that so this was not like emergency times. the urgent seem -- urgency, this was the two sets of conclusions.

so again, the issues you are seeing, zelenskyy needs as much support as possible. joumanna: we talked about ukraine signing the minerals deal, where does this leave ukraine? >> you have hallmarks of the eu, a lot of disagreements, there will be another meeting in paris, this is countries

choosing to help on security guarantees, it does not include hunger re:, they are coming together to see what they can do . this format was spearheaded by emmanuel macron and europeans are trying to find their place because this is a conversation between vladimir putin and trump and europeans feel like a passenger and where the car arrives will be their problem so they want to present options to trump to get their voice at the table.

joumanna: hopefully the car gets to the final destination. thank you. later we have an exclusive interview with the lithuanian president and then the prime minister. this is bloomberg. ♪

♪ >> welcome back to daybreak europe. now to some other stories israel's domestic intelligence chief has been fired after dismissing him, he clashed with netanyahu over the conflict and the move to dismiss him came despite protests by 100,000 people in jerusalem and trump signed in order to dismantle education department to overhaul the government and cut the workforce by half but it faces hurdles including clashes with the unions and lawmakers. trump: we will return education

to the states, it is very popular and it will work. joumanna: nvidia ceo says he did not know publicly traded quantum computers were happening. he has advanced plans to invest in the technology. and stocks stumble on concerns about the impact of trump's tariffs. we will speak

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i'm joumanna and these are the stories that set your agenda. heathrow closes after fire, major disruption in the coming days. uncertainty on the market as the house reiterates the big one is coming on april 2. european leaders fail to agree to buy ammunition for ukraine. andre, let's get you up to speed. if you are just waking up we will bring the latest about

heathrow, a major story, but let's take a look at key equity markets as there is a risk off sentiment panning out this morning and european futures are down 4/10 of 1% with bank of yesterday, cautious about interest rates and nasdaq down as well. watch out for the feds munoz. this is what we are getting, treasuries around 425, slight upward movement, the bond rally

continues after the meeting, euro trading weaker versus usd. the pound slipping despite boe staying the course on rate cuts. the pound is 3/10 of 1% weaker and brent is firmer on geopolitical premium with washington putting sanctions on a chinese refinery impacting energy. now let's recap the top story with the travel chaos. heathrow will be shut all day friday after a fire caused a

power outage and airlines are announcing a hit to operations because the airport is a major of. severe impacts to travel. you can get analysis on the bloomberg terminal to keep track of the developments. this week's central bank raise concerns about the outlook for the economy. let's bring in a senior economist. we had central-bank meetings and commentary is mixed with uncertainty but the snb had

clarity, what do you make of the decision? >> the bank was always likely to cut because inflation continues to fall, close to the bottom between zero and 2% and inflation came in higher than expected. the outlook is wide open. we thought it would signal the end of the road for the rate cuts, we still believe that but

june is now wide open. joumanna: yeah, yeah. it ties into europe, let me take it to europe, negative drivers from the deadline and big fiscal boost from germany, how does it pan out? >> growth is doing well but there is the risks, investors responding to the announcement and this will raise business surveys, a reverse on april and

we are seeing great uncertainty offsetting the tariff increases and it is uncertain but the assumption is reciprocal european tariffs, the u.s. will match tariffs and this will not impact exports because the eu said we will not stay where we are, so we will see a hit to exports, eurozone economy will continue to grow. joumanna: yeah, plenty of

uncertainty with another deadline that they are waiting to impose. let me ask you about european nations and germany, will the yield rise be justified and stay around these levels? >> yields are higher. at this point it will be funded by debts and bond yields will trend higher by next year, yields will rise, that is not a

worry. joumanna: yeah. so -- so, if germany was coming out with the spending plan why did yields of france and italy also rise? >> there are other countries pushing toward building up their armies again and they want to make sure they meet the requirements which looks like it will be raised but it is a wider effort as we have seen, the eu being more lenient saying it is

ok if you spend more on defense so we will see yields rise and if we think spreads will fall yields in italy will not rise but in general they will all rise. joumanna: glorious budget deficit target, thank you for articulating. coming up, growing risk of shocks as borrowing and interest rates rise, this is bloomberg. ♪

>> welcome back. rising risk in the debt market, borrowing hits $25 trillion, triple be amount before the financial crisis and i'm joined by the director of financial enterprises. a big jump up, a rise expected to increase, what are the main countries issuing debt?

>> there is a general trend, massive amount of government bonds, structuring the right response, the future we underline is we remained at a plateau. much higher than before, gdp of japan and germany is a big amount. joumanna: yeah, even though the debt has been rising we are not

seeing distress which is surprising, so what is more important? total volume or debt servicing? guest: debt is important, taking advantage of the terms you face. servicing costs basically debt has been issued. more than 50% as a cost that will be higher, this is a big issue and will be very high cost

of financing for some categories. joumanna: what have you seen in terms of maturity from sovereigns? there was scrutiny of janet yellen to issue securities, is that followed by other parts of the world? >> they did a very good job, also the issue is with the tensions around, this is keeping the cost high and what investors

want to buy, there could be something appreciated by investors. joumanna: i don't know if you heard me speaking about germany and the euro, how are you thinking about debt levels for these nations? >> i was listening to that and germany, a lot of discussion, mixed bag of the yield. this is a sign not on credit risk for germany, the lowest

debt to gdp we have seen a reaction in the stock exchange, this is something not going to create an issue but this is the part that is important, government and corporate investment, stable investment in growth, obviously defense is a large part can can be positive in a sense. joumanna: if europeans move toward joint issuance that would take the pressure off the government?

how do you think about it? guest: this can be relevant, also the euro, initial pressure. it could be important, we have to see what could be the end result, so others are just raising the targets and then we will have to see. joumanna: one final question, usd is reserve currency, and lots of chatter about the usd,

trump administration wants to cause depreciation, how has dollar issuance shown up? our corporate's and sovereigns leaning on funding or other currencies? >> dollar is the reserve currency, especially the emerging markets and the small markets. you have to issue a lot and these may create tensions on the market because you have a very important yield, to buy corporate, this is i think one

thing they should have to look for there. common denominated euro also as reserve currency. joumanna: yeah. yeah. something to think about. really good to have you on. thank you. plenty more coming up, this is bloomberg.

at just $79. get your new favorite pair of jeans today. m taylor. available now on the apple app store, android and m taylor comm. used to be, one would say, what's that got to do with the price of tea in china when they wanted to poke holes in the relevance of something? now, though, if you're in tune with how events around the world affect each other, it becomes clear that the current going rate of tea in china has a lot to do with a lot of things, not just tea things either, but tariffs, franchises, and ipos. how much? welcome back to bloomberg daybreak europe. europe's race to boost its military capacity is facing a crucial hurdle. defense firms are running short of gunpowder, tnt and other

explosives for weapons such as artillery shells and missiles. bloomberg's laura alves has been looking at this and joins me now. laura, talk us through what the supply situation actually does look like right now for propellants and explosives, especially with regard to the recent major defense spending plans that were announced out of europe. so when it comes to propellants, which is gunpowder, the part that drives the ammunition forward, and when it comes to explosives, which is what detonates these parts, they have been identified as major bottlenecks for the european union's ramp up of munitions production. and to respond to that, the eu has established some defense company funding programs. and they have also set ambitious targets to increase the production of propellants and explosives. but the issue here is that this does not yet match the new spending that we see both from europe and also from certain nation states. so this will not be enough. and then also what we hear from companies is that they need to

massively ramp up as well. so for example, mittal, the german defense contractor, they're the biggest producer of propellants in europe. and they have already said that in order to match this new spending, they will probably have to double their production of propellants throughout the coming years to produce up to 20,000 metric tons of gunpowder per year. okay. other issues to do with supply chains that are affecting some of these ammunition components? is it a matter of just sorting out those supply chains in order to ramp up volumes? yeah, certainly. the supply chain is the main issue, because if we look at propellants and explosives, there are many different materials and components that go into this. one example that can be named is cotton. cotton is kind of the base product for propellants. another example is nitric acid. so all of these products they need to come from somewhere right. and in the past it wasn't really a priority that they would come from europe. so they would very often be sourced from places where it's

cheaper to produce them, such as, for example, china. so if we look at this from today's perspective, this is obviously a geostrategic concern and also a question that we need to answer with regard to european sovereignty. but then if we look at the finished products that the producers of propellants and explosives, there are actually relatively few of these companies in europe. so, for example, there is just one single major tnt factory in europe, in poland, that needs to >> what can be done to mitigate problems with supplies of propellants? >> this is twofold if we look at the companies and the governance. if we look at the companies, they can try to european eyes their supply change. what rhine mattel has been doing

is sorting cotton winters, the production that comes after the raw cotton, a type of cotton fiber. they have been sourcing them from europe and from friendly countries. and they've been stockpiling them. they have stocks of those for several years to go if it would have to come to that. governments really need to take the upstream supply chain issues. they need to not only focus on the propellants and on the explosives, but on everything that goes into them. >> bloomberg so laura. thank you for the reporting. fascinating. the opening trade is up next. tracking the latest out of heathrow. stayned for that. this is bloomberg. ♪

guy: i'm guy johnson alongside lizzie burton. we are an hour away from the opening trade in europe. an uned