tom: good morning this is bloomberg daybreak: europe i'm tom mackenzie in london these are the stories that site your

agenda asian stocks have their worst day on record in china valves to fight to the end after trump threatens levees of 50%'s. tariff pours -- pause, ken griffin calls tariffs a huge mistake that will who wrote -- that will hurt the middle class. american whiskey is spared from tariffs. ♪ tom: good morning, happy tuesday. is this a dead count -- cat

bounce boarded markets find a floor? ftse futures .2 gains after a volatile day. can this be sustained? let's look across asset because the other feature, you saw a 10 year yields up. moves of four basis points.

let's look at the asian market where the focus is on japan given the reporting's that the country was front of the line, nikkei rallying but given the losses of yesterday maybe there is resolution between the two nations across the index given the route yesterday. hsi in hong kong gaining 1.5%, the yen at 147. let's get more details with mark cranfield. asian stocks gaining, is there a

sense this can be sustained? >> it is a turnaround tuesday but the conviction levels are not higher. volumes are not great. possibly they will get a deal with donald trump. there are artificial measures, the pboc providing more money for the etf funds. the rebounds are not enough,

people are really holding back on a difficult week with mixed messages. nobody in asia is ready to say the market is turning for the better and people are looking back to 2020, central banks provided high liquidity. central banks are looking for leadership in the federal reserve is more interested in inflation.

people think this is the turnaround that will set us back on a bull market. tom: to what extent could china look to currency as a pressure valve as trump threatens 50% tariffs? is that a pressure valve china may reach for? >> it appears the central bank sent messaging to traders. they have been moving the fixing toward a weaker currency and then pulling back. they are showing the world we can move the currency to

compensate for tariffs similar to 2019, the currency moved in line with the tariffs. it looks as though it is messaging that china is saying we could make it tougher for you , we are not doing it. it is a cat and mouse game but traders can see clearly what is going on.

tom: mark cranfield with a break down across markets, thank you. let's bring in our correspondent on china. beijing is prepared to fight to the end. let's bring in minmin low. what if we been hearing? >> we heard from china that they will fight to the end less than 24 hours from the ultimatum passing and trump will impose additional levees if china does not remove the tariffs but the

key message is they are calling for dialogue. they are patient and china believes that they are facing pushback with the white house issuing a threat. now they are in hunker down fight mode. we are seeing state media with extraordinary measures to stabilize the stock market.

tom: china is better positioned to fight back this time. thank you indeed. let's get more from donald trump who says he's not considering a pours -- pause on tariffs while smiting weighing -- signaling they are still on. >> we have many countries coming to negotiate deals, fair deals and they will be paying substantial tariffs. tom: let's bring in kriti gupta

. that and yahoo! is a close ally of the u.s. and said we will reduce surplus. what does that tell us about where the president stands? >> netanyahu's visit was a litmus test. not only is israel and economic partner, he is bringing a jew political alliance as well so there is a question, why not be more lenient in that environment?

the other piece, he talked about how tariff revenue funds tax cuts. a a lot of people expect tax cuts this year and he's looking to close the deficit. not only bringing down tariff barriers but creating a universal tariff of 10%. tom: there is reporting suggesting that trump could be considering tax credits, what does that tell us? >> did has not fully germinated.

donald trump's tariff plan is to create a hub in the u.s.. they have not been a manufacturing economy since the 1900s but in the process there is producer data, etc. so the tax credit would offset those pressures. if you export to another country , is it enough to incentivize it? the point of tariffs is to

increase tariffs and this -- to increase revenue and this would decrease it. tom: opening trade anchor, indeed. breaking all of that down. peter navarro saying tariffs are not a negotiation. stock market rout turned into a bond market rout with yields surging. valerie is here to break it down. valerie: and a lot of participants scratching their head over the weakness, 30 year yields rising 20 basis points, is this the risking the balance

sheets? the u.s. is alienating major buyers. all major buyers being alienated by the u.s. government, i was impressed to see the back up and yields erasing the rally. we have a race to the rally, unchanged but the move was not just in the treasury market. 30 year yields rising, one of

the worst moves yesterday since liz truss era. japan rising 17 basis points a global jitter and i want to note we have more fed speakers adding to the mix. goolsby is the key dove talking about tit for tat retaliation. tom: bond traders will weigh all of this up today.

valerie breaking down the moves for us. a range of countermeasures with additional tariffs in force tomorrow, live with the latest coming up. this is bloomberg. ♪

tom: european trade ministers signal readiness to deploy countermeasures including taxes on digital companies in response to trumps tariffs. oliver crook covered this. was there a breakthrough? how aligned are trade ministers on this?

oliver: ambition was to close ranks and have daylight squeezed out, there were three goals. first was to hammer out the retaliatory tariffs. the other was to hammer out negotiations. this is the number one option. plan b was what do you do with the trump administration is not open to negotiation? i spoke to a number of trade ministers about this. >> everything is possible.

we don't want to use it but we can use it and this is consensual. >> everything is possible talks about targeting tech companies. this is talking about the aci, anti-coercion instrument. the nuclear option to lash out against nations that force them into coercion. above all was how clueless they are into the mind of donald trump. everybody wants to de-escalate but at the end of the day they are starting to be more

realistic and not naïve about trump's ambitions. tom: some of trump's advisors don't know what is in the president's mind. you talk about the measures. one measure it targeting whiskey. >> spur been dropped off the list and part of the reason was pressure from countries within europe to not retaliate. there is also a generous view of tariffs and we have the tariffs not tomorrow but the steel and aluminum tariffs.

diamonds, motorcycles, boats, appliances, tobacco, agricultural products will face 25% tariff. they want as much negotiation to negotiate if they're willing to do so and the big question is is trump willing to negotiate? tom: point the spectrum from playing cards to diamonds. coming we will continue the conversation on the eu's tariff response, the president of independent winegrowers joining us for an exclusive interview. to what extent will there be relief that there is no tariff on u.s. whiskey? this is bloomberg. ♪

tom: let's get up to speed with other news today. president trump ordering another review of the sale of u.s. steel to nippon steel and shares surge 15% halting trading. shares are below nippon steeles $55 a share offer, give a new hope for the deal. the u.s. is holding talks with iran on its nuclear program on saturday. officials sent a proposal for indirect talks instead.

shares of samsung jumped after its first quarter profit beat estimations. strong smartphone sales ease concerns about the tariffs and chip export curves with challenges catching up to sk hynix in the market of chips enabling ai accelerators. apple is selling iphones to the u.s. from india to offset as apple tries to win an exemption from trumps tariffs raising levees to 54% while imposing a

20 6% rate on indian goods and shein's plans are being met with opposition discouraging them from diversifying by sourcing from other countries and their facing the end of tariff exceptions. coming up, wall street titans speak up against donald trump, we will bring you the comments on whether this raises pressure on trump coming up. this is bloomberg. ♪

tom: good morning, this is bloomberg daybreak: europe, i'm tom mackenzie in london, these are the stories that set your agenda. asian equities gaining after there were staying on record, but china vows to fight till the end after president trump funds additional levies of 50%. the white house rejects a tariff pause as the treasury to secretary signals a priority for japan in trade talks. billionaire can griffin calls tariffs a huge mistake that will hurt the middle class. plus, the eua's 25% retaliatory levies on some u.s. goods but spares american whiskey is the block seeks negotiations. let's bring you a check of the futures picture. it is a brighter start to the session then we've seen since april the second, and now availing of those trump tariffs. no doubt the trump tariff k offs remains front and center for

these markets. you're finding a floor for the markets or is this a brief stay of execution. european futures pointing to gains of 2%. ftse 100 looking to add 155 points. s&p futures after some huge intraday swings looking to gain a little over 1% in the session today, still close to that bear market territory. nasdaq 100 futures already in a bear market looking to add .9%. let's look at u.s. treasuries. there were marked moves with the selling pressure, particularly on the long end when it comes to u.s. treasuries. most of 19 basis points higher on yields on the benchmark 10 year. change of fortunes today, more stability in the bond markets, yields down. 372 on the two-year. euro-dollar getting a lift up .5 percent at 109. brent oil prices under pressure, currently up 1.2% in the session looking through the additional threats on china, 50% from president trump. gold is just below 3000 u.s. dollars per troy ounce, but

gaining .6 percent for the first time in four sessions for the yellow metal. the european union has dropped a plan 50% retaliatory tariff on american whiskey. several member states have pushed for whiskey to be excluded in an effort to spare european wine and champagne producers from facing 200% tariffs threatened by president trump. join me for an exclusive conversation is president of the european confederation of independent winegrowers. samuel, thank you for taking the time. in response to the eu taking retaliatory tariffs targeting u.s. whiskey off the list. this is the right move from the eu and does it spare you and your members further pain? >> going in the right direction since the beginning there's a limited answer to the u.s. tears. we have to be careful for any trade war and it could be a smart move going in this direction.

it will limit the impacts that we have, and it's going in the right direction tom: you're representing about 200,000 independent winemakers across the eu. what has the response been to the 20 percent tariffs that are very likely to be put in place as of tomorrow, those 20% tariffs will kick into gear, what is the impact, what is the response been from your members. >> that's a huge impact, what we fear the most is the impact that we are represented small farmers, mostly represented in family-owned businesses, so that's just something that we expect. in france, for example, i remember we already had tariff regarding the conflict. the impact with this 1800 million losses, so is huge and

now we see that spread all across europe, so that this will have a huge impact and i think what we fear the most is the thing that we will have to diminish our margins. so this will also have an impact. definitely. we have to make sure this doesn't happen to us directly. tom: a squeeze on margins, we see the animus that president trump has towards the eu. he said the eu is set up to screw the u.s. we know how strongly he feels about the european union so there is an expectation, there has to be an assumption that the 20% tariffs will be kept in place for some time. how do you quantify that in terms of the damage on your sector in terms of job losses and potentially business closures? >> we think it's going to be billions because if you look across europe, for example, if you look at only my country,

wednesday four point 5% of all the export goes to the u.s. if you add wine and spirit, which is huge. that's something we will have to bear in mind that's going to be very hard, but the thing is it's not only the trade were affecting us, it's the climate change. so, all of these put a little pressure in each small winery that we have. so definitely, it's going to be something that we do not need at the time. tom, but steps are members taking to mitigate those impacts? are they looking at higher prices, are they looking at reducing jobs? what are they doing now to offset some of these pressures? like saving all of it. what we are looking for is to talk with our already existing importers in the u.s.

everything is imposed so we have to wait a little bit and they are waiting a little bit to see what's going to happen. we can find new markets, but the u.s. is like the u.k., it's mature markets and it cannot be the same if you look at india or the other market, you have to invest in be known. so that something that is going to be in the future and also ursula von said we have to unleash the single market so maybe also we have to invest in the eu market, so that will be a thing, the u.s. is very important for us, it's a key market and we have to make sure that in the future it stays as an important market. definitely. tom: your conversation with those u.s. importers, i understand there's a lot of uncertainty.

what are those conversations looking like. are they asking you to absorb most of the tariff increase, are they prepared to take some of it. how is that conversation playing out? >> the thing is, it's going to be 50-50 at the end of the day. it was already allocated in 2019 for us. i think it's going to be the same this time, so that's the discussion we are going on right now. and again, in a margin getting smaller every day, it's not very easy for us to continue this way. and i'm not sure it's going to be a u.s. consumer. tom cole it would support are you hoping to get from the eu, are you looking for the eu to support the industry and what support would you look for? >> are asking to have a financial safety net in order to face all this, not only for the sector, there should be an answer financially and also to

help us with promotional across the world and at the end of the day, it would be great to have an answer in the eu single market to find ways of the politics. this the only thing we are asking, but i think the most important thing is to find a solution with the u.s. and i think that would be the key answer for now. tom: president of the european confederation of independent winegrowers on the potential impact of that industry and what the industry needs to see from those negotiations. thank you for taking the time. citadel founder ken griffin has called president donald trump's latest tariffs a huge policy mistake, he joins a chorus of wall street executives criticizing the levees, concluding blackrock ceo, larry fink.

>> now ceeo that i talked to would say we are probably in a recession right now. a couple airline ceos said, the airline industry as a proverbial bird in na coal mine, canary in the coal mine. and i was told that the canary is sick. tom: charlie wells has been tracking corporate reactions and joins us now. charlie, is the american c-suite turning on trump? >> in the past 24 hours we heard some striking shifts in tone, a tactical silence over the past few months since trump's inauguration. and we have seen some of the biggest names on wall street come out fighting against these tariff policies. we just heard fink rate there but we also met ken griffin, and he is the founder of citadel, but he is also a republican mega

donor. when a prior presidential cycle donated some one hundred million dollars to root -- to pro-republican political action committees, he was at an event at the university of miami and set the tariff policy was a mistake, he said it was a tax on the middle class and want to tell middle-class americans that prices for vacuum cleaners and groceries could go up 20%, 30%, 40%. he called on members of that audience to contact donald trump and tell him to step back from his policy. so those are some fighting words. we heard yesterday from jamie dimon, so in that span of 24 hours, a really sharp shift towards criticism of this trump policy. tom, we will hear more in the hours and days ahead. is there any evidence that this kind of pushback from corporate c-suite executives in the u.s. cuts through with president trump? >> that's the prep -- that's the question at the moment.

trump one point know it has been a factor. during the first administration he was focused on what wall street was doing, we are seeing a shift, a seeming shift in priorities where trump has been downplaying what happened in the market. the treasury secretary says what's been going on has been a mag7 problem more than a mag a problem. these are influential voices. it's one thing to hear from the democratic side, it's one thing to hear from ceos, but when you think about griffin and the amount of money that he donated to republicans, this is significant because he's really bringing a new level of criticism here. tom: excellent breakdown of what we've heard from executives in terms of the pushback and their lack of comfort around the trump tariff policy, and we will see if that leads to any changes at all. charlie, thank you for the update on that front. coming up, uncertainty continuing to grip the markets on president trump's tariff agenda. we will discuss that with a head of the european equity strategy at berkeley saying get his view

on how to position amid the uncertainty of the volatility. that's coming up. this is bloomberg. ♪

(♪♪) ♪ three little birds ♪ ♪ (steel drums playing lightly) ♪ (♪♪) (♪♪) (♪♪) (♪♪)

(♪♪) (♪♪) tom: welcome back to bloomberg daybreak: europe. check in on the futures picture. it is a slightly brighter picture but for how long. european futures pointing to gains of 2.3% after falling around 4.3, four .4% by the end of the close yesterday. and incredibly volatile session in the u.s. with those intraday moves on the s&p 500, volatility spiking, s&p plenty to gains of 1.1%. nasdaq 100 looking to add 100 625 points, but for how long, is this a dead cat bounce or assisting turnaround in these markets. that's spring and head of european equity strategy and managing director at barclays.

thank you so much for taking the time. i know it's a busy moment for you and the team. what you make of today's moves in the markets? futures pointing higher, is this a sign that the markets are finding a bottom? >> good morning, it's a good thing to see some green on the screen this morning. i think the market is very oversold, things have come down in a matter of days. so there is a sense of hope that we are getting to the point where the pressure is so high on trump that he has to open the door to negotiation. we see some bottoming out. we might see a technical rebound if we see the flexibility from trump, but in the grand scheme -- seam of theme -- things, everybody agrees that this is a massive mistake.

the market will have the ability to find a sustainable time. for now, whether there is room for negotiation, if there is, i think we can think about the shorter upside. tom: how binary is this moment if you see a president trump who is willing to negotiate, willing to think about a reprieve versus a president trump who continues to double down? is this a binary moment that rest on that calculus for these markets? >> i see you are midway between market pricing, correction and recession. if we have a recession, which could be the end game of it being implemented, the market would be done at 10, 15, 20% and it was about 30-30 5%. this still a long way to go for

the markets to fully price a recession. on the other hand, we are quite oversold, if trump is backing off early on for this position, we can go back up and we have been coming up with a market or index target on the stoxx 600 between 550 in a case with an impact on the economics, so we could go up 10% and i still believe there is a lot of damage being done. even if the market might come back up on any negotiation on being headline, i believe there's so much damage to be done with the credibility of this administration and the market won't get back up to the previous height. tom: that range of 550 to 390, he talked about how wide the

ranges. we ended it on for 74 yesterday, that 390 level on the dance out -- downside, that is the recession called, is it? >> putting numbers on this is very hard. it's not clear for the situation. pretty much the government's in the central bank is trying to rush to bailout the market in the first time we have the u.s. administration somewhat opposing the market, so there is nothing put from trump. and with it being triggered, there is nothing to stop the market to price a recession. it's all sentiment driven right now, we have not yet seen the data reflecting this, we have not yet seen the data reflecting the tariff impact on investment and consumption, so if you cut earning expectation, they are looking for 20% growth in the u.s. in 6% growth in europe, so

the market has the rating, but very high expectations, the downside from here is market increasingly pricing a recession , which would happen without some pivot from trump. tom: what draws the central bank, specifically the fed from the sidelines? quick simply the inflationary impact of the story. i think the final stability is being threatened, i suspect the fed and other central banks will have to intervene. but right now we are seeing a sign of stress in the market. i think there is a question mark on the inflationary impact of this to see what happens. so of course, if they have to, the federal intervene. the number one issue to me is trump and the loss of credibility with markets. so if it doesn't pivot quickly, the fed can do whatever they

want. the fed's issue for this market will be resolved. tom: longer term, what does europe look like as u.s. exceptionalism is challenge? >> i think the end of u.s. exceptionalism could be the drop with where stimulus will happen. you see it's a big signal. he will house the economy the next couple of months. this is a big thing. germany is spending for their gdp to support the economy, so what trump is doing is forcing a significant risk from germany, which could have a big impact on domestic driven. the european market might help it to whether this term -- storm. so much money is going. so much capital. it if now, the u.s. has an empty market business and policy, some of this creation might help both the equities in europe in

particular. tom: before we let you go, you are overweight the u.k., ftse 100. talk us through the rationale behind that view. >> this is not so much about the economy, it's a market that can give us a bit of hedge. it means there will be a defensive index, so it will give us some hedge on the way down, so given the energy as well, the effects could have interesting optionality. the win-win stagflation hedge, but when it tix to the upside it's wide, given the valuation, the high yield, seven possible dividend yield, it's pretty interesting on this, that's the tactic on trade, it's something that could give us a bit of option on the way down and on the way up. tom: tactical trade, ftse 100 at

a time that has, and i'm quoting from emmanuel, no precedent. head of european equity strategy and managing director at barclays, really smart insight, we appreciate your time, of course, as we think and look ahead to a slightly brighter tat least that is what the futures are pointing to for europe. check out the market's daily newsletter for what is happening in stocks, bonds, currencies and commodities right now. this is the time when you want to be signing up at bloomberg.com/newsletters. this is bloomberg. ♪

tom: welcome back. everyone take a breath, the futures are pointing higher for europe and the u.s. the s&p is still near that bear market territory. still close to that 20% drop

from the most recent high. it was an incredibly choppy session and volatility was extreme. again, u.s. futures pointing to modest gains. let's look at the volatility question for the s&p 500. the intraday moves, we have not seen spikes like this in volatility like this in the pronouncement for going all the way back to 2020 to see that kind of volatility in all of that sparked by the rumors around tariffs and the trump administration was thinking about any kind of reprieve, some of those rumors being next. slip the board and have a look at the fed pricing. that was choppy in the session. we went from five cuts being priced infected three, and i are closer to four and 96 basis points or thereabouts. mark is trying to understand how the fed is going to react to this, some fed officials, including goolsby, really putting the lens on inflation risks around the trump tariff policy and for now, of course the fed remains on the sidelines. the first -- the next cut expected fully price for the

month of june. markets are pricing in around 96 basis points. close to forecast being priced in butter stock from 3-5 yesterday. we speak to larry summers to get his take on tariffs and market volatility. coming up later, we speak with hungary's foreign, hungary of course really crucial in terms of how your response, not just on the terror front. your question marks about ukraine and russia. don't miss that interview on the pulse at 9:30 am u.k. time period believe you want to check of the futures on a day when maybe, just maybe the markets are finding something of a bottom or a brief stay of execution. european futures higher by 2.6% after dropping more than 4% yesterday. the opening trade is up next. this is bloomberg. ♪

anna: good morning from london, i'm anna edwards alongside of guy johnson and kriti gupta. an hour away from the opening trade.