guy: the ecb sounded very hawkish today.he body language was more serious than they have done in the last few meetings. the message was stark from the ecb, we are hiking by 75 basis points and will do more with a significant upgrade to inflation a significant downgrade to the outlook from the ecb. there were remarks from christine lagarde in frankfurt and jay powell. let's listen to what they had to say. >> the governing council today decided to raise the three key ecb interest rates by 75 basis points. >> we need to act now, forthrightly and strongly until the job is done. >> price pressures have continued to strengthen and broaden across the economy. inflation may rise further in the near term. >> the longer that inflation remains above target, the greater the concern the doublet will start to naturally incorporate higher inflation into its economic decision-making. our job is to make sure that doesn't happen. guy: let's break down the takeaways. michael mckee joins us now. maria, let's start with you. the key take away fr

the former ecb chief economist. if we expected 75 basis point hike what was the biggest surprise for you and mark >> for me it was not the 75, but i was a bit surprised not so much by the signal here but where the ecb expected the rate hike intended to dampen demand so it means there is excess demand. it slightly above the level it was. and the reason we don't know of course exactly but the reason behind that is increasingly with the governing council the governors think the potential growth of the euro area has been hit more structurally. you may have low domestic mandan general, but at the same time the supply side, that means you have to do something, compressing domestic demand which is already week. that's the hypothesis nowadays. they've been much more cautious about the intention to brainstorm dampening of domestic demand and you the euro. so i think the 75 is hawkish. i would have changed a bit. guy: what impact on the euro zone economy will listen if i basis point hike have given what's happening with gas p

jon: who cuts rates first, the ecb or the fed? george: the fed. subadra: the ecb. robert: the ecb.: enjoy the long weekend. that's it for me. i will see you next week. this was bloomberg real yield. for our audience worldwide, enjoy the long weekend stateside. this is bloomberg. ♪ >> i am mark crumpton. first word news. . president biden says there are signs that inflation started to wane in that the latest jobs report shows more good news. >> inflation, maybe, i'm not over present -- promising maybe begin to ease. gas prices have fallen 80 straight days, the fastest. klein. in a decade -- decline in a decade. >> mr. biden was speaking abou

ecb at 8:50 eastern time.m buckingham palace moments ago, following further evaluation this morning, the doctors are concerned for her majesty's health and recommend she remains under medical supervision. that statement follows news in the last 12 hours that the queen had to postpone a meeting with senior government officials yesterday after a full day of activities with boris johnson and liz truss. that is the latest from the palace this morning, moments ago. tom: we will have to watch it carefully, no question about it. jonathan: looking forward to catching up with guy johnson in five minutes from london, we will get an update of the queen's health. nasdaq 100, down .1 percent. in 40 minutes time, we will hear from the ecb. a coin toss between 50 basis points and 75. after that, you will hear from the president herself. halfway through the conference, you will hear from chairman powell. a busy couple of hours on bloomberg tv and bloomberg radio. futures unchanged. live from new york, this is "bloomberg surve

can the ecb do anything? i think that is going to be a consideration over the next couple of meetings. to make sure the rate differential doesn't widen too much. because i think that has been one of the driving factors of weakening euro. in the near term, we think the euro will weaken further to $.97. so i think, that will be part of the consideration. ultimately most of the euro weakening has been driven by deterioration of the growth outlook. by the energy crisis, and also by the risk that it could be a more severe recession than what's being anticipated. francine: jari, thank you so much. the chief economist at goldman sachs. breaking out of germany. there is no need for a quick decision on comics bank -- commerzbank stake, and he is satisfied with performance. he has reiterated the need to restore borrowing limits. finnish insurance group sampo plans a dual listing in stockholm. we speak to the ceo next. this is bloomberg. ♪ francine: welcome back to the open, everyone. 40 to minutes into the european tra

can italian yields take that kind of rate rise from the ecb? >> i think they can and i'm not too worried about it because in the end, with this mechanism instrument they have implemented and they haven't used yet, the moment there only relying on the -- but it is very active. they have an instrument that they have already said they are ready to use. everything is lined up for them to be hawkish. >> if they're dealing with that and there is a case to be made for frontloading for the ecb in part because winter could be very difficult over in europe, where is the conversation about actually selling securities? >> you mean to unwind the purchase? the expectation is the ecb has been thinking about it. how will the unwind happen? expectation is really that text will start first but that is further out toward the end of 23, early 24. on the back that, they will start the purchase program to unwind. this is nothing imminent. this will be something to discuss over a years time in earnest. >> how do you position for frontloading ecb? do you by interest-r

there could be more ecb hikes. plus, charles iii. the new monarch is officially proclaimed king and queen elizabeth's state funeral set for september 13. the question we ask ourselves is which tail is wedging -- wagging the dog, is it that the equity and risk markets are ready for 4% from the states? dani: certainly some of forceful buying and the risk market to in the week on friday. the s&p 500 and global s&p able to snap a three week losing streak. let me take you to where -- to what markets are doing this morning. the asia index up. futures up's extensible percent. we were talking about this this morning, the sentiment around europe is very sour. $3.5 billion pulled from european stock funds in the week through september 7, $83 billion the past six months. a bit of a correction from that. s&p 500 futures have been turning more sour the past hour after topping a 100 day moving average. it seems like a lot of these chip stocks are driving us lower. writers has a story that biden is planning to formalize curbs on china when it comes

tom: we have the ecb decision on thursday.re speaking to blackrock earlier and it is their expectation that the ecb will go 75 basis points. can they go that far? silvia: exactly -- we think exactly the same. 75 basis points forecast for this meeting. a close call. even before this news we heard different comments from members, certainly the executive board members suggesting 75. the chief economist suggested not as high but continuous rate hikes. 75 would imply that the policy stance is in the accommodative regime. francine: how much of a disaster could that be for euro? how much lower can euro go given the ecb's hiking 75 basis points into what could be a possible, very severe recession? silvia: the euro -- my colleague did a great study that showed a lot of the decline, the position of the euro is due to the gas situation. we have some solution to this. it is difficult to see a reversal move whether the ecb hikes 75 or 50. there is the interest rate differential. the energy story seems to be very important. if you think thi

investors fully priced in a 75 basis point ecb hike.ta mester says that the rates need to rise above 4% for the u.s. in the next year. last chengdu is under lockdown, the biggest that he to shut down since shanghai earlier in the year -- biggest city to shut down since shanghai earlier in the year. the dax and ftse 100 are both under pressure as well, down by over 0.3% in germany. if you look at the negativity we are seeing across the european equity space today, the board is risk off. the story that is dominating this is around china, adding in a newer minder of the risks posed by china and the ongoing covered policy there that result in periodic lockdowns. that is having an impact on some of the european businesses that run out of china or have done, particularly in luxury goods. basic resources also under pressure because you see some commodity prices dropping on lower growth expectations, again around that china story. the upsides are not going higher, but least affected, you have got utilities and telecom. you have a u.k. focus aro

of course, all of that impacting what the ecb does as well. it will be holding its first monetary policy meeting today. officials raised the key rate for the first time in 2011. we are joined by maria tadeo in frankfurt. great to have you back. the ecb on track for another rate hike. the question now is how aggressive that rate hike will be. maria: i'm not sure if this is an omen but it's terrible weather today in frankfurt. the european central bank has to hike rates. that's not a surprise to anyone. this is a central bank closing below 2%. when you look at the inflation picture across the euro area, inflation is now more than tripled in some countries. they have to hike. the question is, how big of a hike are we going to get. when you look at the 75 camp, they say, we have a window. in that window, we should take decisive action. the credibility of the central bank is on the line. when you look at the 50 basis point cap, they argue that you could find yourself in a situation where you hike very aggressively. that's a real wildcard now for th

manus: 75 basis points for ecb hike. five to about 4% by early next year. >> it is necessary to move them up. by early next year. manus: china has 21 million people under new covid measures. perilous predictions, the s&p drops. the warning bubble is still yet to pop. good morning. reaffirmation's of the affirmation that we will get to the higher side and hold. dani: i can't help but think that that is what is in bolding the bubble watchers. morgan stanley doubling down on the message as well. it looks like someone might be listening. a couple different things going on. the report that tencent will divest, that could weigh on china's tech stock. who will talk to juliette saly about that in a moment. these are questions from nasdaq futures. it may affect hundreds of millions of dollars. that has made the impact of turning around the future session as well. manus: absolutely. you will see nasdaq take a bath. we did make it through 3.5%. that has got a pervasive effect. we are almost 142 the dollar-yen. lowest since 1998. cr

how far behind do you think the ecb is?ow long will they have to hike before we are talking about a policy pivot there? ludovic: the problem is people comparing the u.s. and europe are dramatically wrong. they see a jumble hike, 75 basis points like the u.s.. i believe the ecb has to hike fast, to curb whatever demand driven -- two thirds of inflation in europe, so hiking helps the price of the pump. i think we should offer them some -- that is why the policy is on them -- the ecb will try to hike by the end of the year, or maybe even 100 basis points. that will solve the problem, we are still going to have 2.5% inflation, the big issues here, the central bank can also help make sure the market -- the ecb can do a lot now, anna: could they still be hiking at the same time, providing mixed liquidity to market? ludovic: of course. this is conducting monetary policy in an environment on those negative supply shocks is different from energy policy -- i think the ecb will have to have maybe high rates. we want to get out of nega

this comes ahead of the ecb decision. remaining heavy while energy issues are at play. our guest is carol kong, international economy and currency strategist at cba. what would that mean for the euro? carol: the cycle of the next ecb interest rate hike is a key question and i think the debate for the upcoming ecb meeting reflects tensions between the near term worsening inflation outlook and the weakening economy in the euro zone. following the jackson hole symposium, we heard from several ecb governors, saying they favor is 75 basis point rate hike because after the higher near-term inflation in the news over the weekend saying that the russian gas giant will cut off gas supplies to the euro zone, that supports the case for a bigger rate hike. i think they ought to favor a smaller, 50 basis point hike because of the remaining recession in the euro zone -- because of the risk of recession and the euro zone. i think the medium term inflation pressure will be contained around the ecb target of about 2%. shery: money markets

the market is pricing the ecb to hike over the next 12 months for the ecb to hike about 75 basis points more than the fed will hike over the next year. the idea the ecb will be less then the fed is very different and that presents an opportunity and i think the risk the ecb has done less than expected is a very realistic risk. it can drive into the euro. for credit specifically over high yield story where i think there's a mild recession just our base case investment grade could still be ok. a lot of these companies of turf turned out -- have churned out their maturities. this more uncertainty and more risk premium that's injected there. >> another reminder of the dislocation between gilts, yields up in the u.k.. and the pressure on the pound and the pressure continues. what is your assessment of the financial risks within the u.k.. are we facing potentially a currency crisis in the u.k.? andrew: i would not say currency crisis, but i think the u.k. is in a uniquely difficult and challenging economic situation even relative to the situation the u.s. or europe and china. the u.k. is faci

the fed or the ecb? troy: ecb. the weakness in their economy is clear and present. the u.s.uch more labor market shock it is not getting hit as hard on the energy cost. the ecb in the near term will tighten, but it is highly likely eurozone can avoid a recession in the near term. in the u.s. recession risk is elevated compared to three to six months ago, but that is over more of a six month to 12 month time horizon because the labor market stays resilient in the face of global weakness. jonathan: this is what wei li of blackrock told our clients -- this is pretty close to the worst outcome. most people on board with that. try to answer this looking at united states and europe. when you start to lead the other way with this gloom around europe, because i'm not sure how much worse it gets. troy: it is very dangerous to step in front of trends that are this powerful. when you talk about the drivers of this, whether interest rate differentials, growth differentials, the massive energy shop, universal systems can start nibbling, and i recommend going through quantitative systems,

alix: because if it's politics, does the ecb go 75 tomorrow?aning towards 75 basis points but with low levels of confidence given how the euro isn't how high inflation is i think they will go bold. but there is an issue as rates get higher, money is being pulled out of bank deposits into bonds and that's working against with the ecb is doing as well. i think the 75 basis points mako -- but they may go to 50. guy: are they worried about what happens if they don't go 75? what impact will that have on the euro. megan: it's a big reason why a moderately on the side of 75 basis points. i think 50 would be a different point for the market. moderately leans toward 75 basis points. if if basis point hike would be a dovish surprise, a small dovish surprise. and that would cause the euro to tumble further. alix: what does the press conference look like if they go 75? do you think they will double down on the hawks? megan: i think it will end up being a more dovish fed conference but what i'm looking for is two things. where christine lagarde sees the lon

ecb. special measures to reign in power costs as germany tries to help billions struggling with household wills. try not looking to contain a covid outbreak in the nation's six largest city. kathleen: let's look at how future markets are signaling sentiment for u.s. stocks, treasuries, and elitist for the oil market. that seems to be an active market as asian trading gets underway. when you look at stocks, futures suggesting a bit of a rebound, not surprising because another selloff down 3% last week for the s&p 500, 8% over the past three weeks. stocks are finding of footing here. in the bond market we are seeing a rally, not a big rally. up 0.9%, that is after a week when the treasury long and - - long end and short end -- and the 10 year down to 3.19. a little positivity there. improved positivity for the wrong reasons. the gas prices in europe -- crisis in europe is worsening. we have the opec meeting and we are unsure what will happen with outputs. g7 decided to put a price cap on rus

we had the ecb raising 75%

david: let's talk about the ecb. i mean, certainly, there is a reason for them to hike rates, but is there a reason for them to hike rates by 100 when he five basis points? which the market is pricing in over the next meetings? kathleen: that's a perfect question because 75 basis points of the next meeting. the inflation rate, the headline cpi got up a few percent. but it's true that they have a big energy crisis looming. that is one of the things that has already hit the economy some. it could hit them more. when isabella was speaking out in jackson hole, i was in the room and my years picked up when she said boy, inflation is going to get entrenched. they have to move aggressively. the french central bank president, same kind of thing. so it definitely open the door. i don't know about the 75 myself. when i talked to polly wren who is not on the board, but he is the head of the central bank of finland. he was hawkish, knowing they have to do something significant. but not necessarily signaling 75. what he was signa

the ecb up despite disappointing data. in the asset space, it is a weaker dollar giving a lift to asian currencies. we are seeing the strongest indication yet from japan officials that they could be mulling direct intervention. oil shrugging off higher inventories we are seeing and in the bond space, asian bonds tracking treasuries and we are seeing a rise in yields. rishaad: the dollar off by .5% against its thai counterpart. much of this really down to the tourism and the hopes of a rebound in tourism. we just got a report out showing that hotels had higher occupancy rates than anticipated in august. that is a look at that. an fte -- the ruby stronger against the dollar with the dollar off by about .2% -- the rupee stronger against the dollar. it is a day where the dollar is just easing off from those record highs. we will cut against this backdrop of central rate hikes. we have the european central bank walking right through it. let's start with what the european central bank said, what christine lagarde said because it

the key thing is, how does the ecb react to it? besides to 50, even if it does 75, we reduce the size of rates going forward very quickly. anything in the range is very plausible. yvonne: hold on a second. we're going to talk about liftoff. spacex. a falcon nine rocket carrying satellites this evening. basically we are seeing nine minutes after the launch the booster is going to separate from the first stage and land in the atlantic ocean. musk has been tweeting about these rocket launches. they have been carrying one every five days. david: here we go. five seconds to launch. it's david: there we go. that was the falcon nine launch. starling satellites into low orbit. flip maneuver, big split. entry burn. our dynamic guidance. very fancy. i am reading off a website. that should be part of the dollar. yvonne: that is what i was going to say. elon musk has been talking about the falcon team making excellent progress. aiming for 60 launches this year. they're getting easily into the target. the dollar moves we have seen, what should

the ecb itself has eurozone project apart? the ecb itself has created _ eurozone project apart?itself has created a backstop, i itself has created a backstop, in fact three. we have three from the easybeats, various programmes they could use in order to counter speculation in that market that the euro pulls apart. we are pretty safe from that. it still depends of course on the will of the countries to stay together. if borrowing costs diverged, either because the italian state more to say help households with high energy costs that it does the german government, there will be people, there is elections in italy in a few weeks, they will think if it really worth staying in the euro and having a stable currency if we have high inflation anyway and we have to pay more than the germans for the same things? that is a big risk.— that is a big risk. they have their elections _ that is a big risk. they have their elections on _ that is a big risk. they have their elections on the - that is a big risk. they have their elections on the 25th. | their elections on the 25th. turning our atte

ecb. 75 basis point hike. looking at other banks. they will be making decisions on the cost of borrowing. where looking at serbia. three point 25%. 25% is the interest rate at the moment in ukraine. that is expected to be unchanged. malaysians expecting a 25 basis point moved to the upside. the central-bank governors and the like. the wind in the middle is the one to watch out for. jerome powell. goldman sachs lifting their forecast on the number of interest rate hikes. we will be hearing from the rba governor in half an hour. yvonne: let's talk with kathleen hays. what are we expecting today? >> we are expecting a hike. how much? 50 or 75? they haven't done 75 point since 1999. what got everybody riled up, jackson hole, the example, members on the board at the european central bank gave us a strong presentation talking about how central banks have to tighten even into a recession to get inflation down. you can't let inflation expectations get entrenched. that is when we saw the bets on the 75 basis point high could go up to 80%. it

we've got this going into the ecb tomorrow. the u.k. to your yield as well coming back the bond markets. earlier was 301i think we were down by, of this as we see the ongoing announcements for what's happening with the energy story here for europe, also going through the bank of england a little bit earlier on. the governor tweeting and speaking, catherine man speaking earlier, all of that having a big impact across the term. on the front end of the curve, if that -- is that signaling this is pushing inflation out and all of this was taken and businesses or get a make the inflation problem a bigger longer problem ultimately and that's good keep rates higher. as of the bond market is trying to figure out. a lot going on, abigail doolittle, what's happening with u.s. markets? abigail: we have -- for equities , you have the s&p 500 and the nasdaq both up more than 4/10 of 1%. the s&p 500 leading the way points towards a broad-based rally. all sectors higher except for energy, we will look at energy and oil in one moment first dollar-yen, r

zoe: the official line is that the ecb does not have a currency target. it watches the currency but does not actually target it in anyway. the issue is, the weaker the euro, the more expensive it becomes to important things. right now, we're in the middle of an energy crisis, and oil is priced in dollars which does not make life easier for the euro area. which as we know is probably going to be slipping into recession over the winter months already. dani: zoe, thanks for getting up early for us. let's get over to singapore now and get a check of how asian markets are faring. juliette: we are trying to recoup april 2020 lows, with japan and australia doing heavy lifting but we are flatline on the regional benchmark. japan's 20-year yield top 1% for the first time since 2015, prompting the boj to do more longer end bond buying. continuing to see weakness on the hong kong market although re-upping stocks like the macau casinos doing well, but this index is still at october 2011 lows. and weakness for the onshore yuan as pboc tries to defend a 14-year low wit

stronger euro, very aggressive ecb.e we get that too much i would say there are some things we will be facing over the next couple of quarters. alix: do you sell any rifts for equities? mark: i'm sorry question mark alix: do you sell any strains at this point? mark: no we are positioning ourselves differently even if it is a day for more discretionary stocks out there. we are looking more at things that are lower ranking. more the health care in the consumer staples into what we think will be a recession at the end of the year in europe. we still lost energy exposure with oil prices getting higher despite the price cap announcement that we saw last weekend. very cheaply in our view. that's where we are looking in our view. as well as this invalid -- value of a high interest rate environment for the growth stocks out there. that's where we are looking for broad markers over the next six to 12 months. guy: when you talk to your, mark, how are you talking to them about this positioning? is it an absolute trade order relati

i am delighted to be joined by one of r-star reporters on the ecb team. good morning.h pressure do we see a leaved? >> the forecast for the inflation reading this morning is 9.11 percent and if you think about it, that is almost five times the ecb progress. if you take the policymakers at face value saying that we need to bring inflation back down, then the pressure is a enormous. we have seen some of that yesterday with policymakers rallying or starting to rally around another 75 basis points hike, which is a massive step. we have also been seeing that they say a lot can happen between now and then for the next meeting. it will be an interesting time the next four weeks to hear what they do. tom: we talk about the need to convince the market. the fed is doing that with consistency of communications and their messaging. and as well as the rate hikes they are pushing through, but we know there are disputes within the ecb. are the next two meetings going to be 75? are they certain on that? >> it is interesting to speak about the vergence. --divergence. they all agree tha

and more about the ecb and the bank of japan.decision yesterday, but this morning, we have had this rash of speakers, four of them continuing to deliver this hawkish message, saying they are resolute to continue hikes. saying that if we act earlier, it will be easier. euro back above parity. the german two year yield, the highest since july. and this market still digesting what this means for the periphery. seeing the italian 10 year yield at the highest since the nadir of the market on june 14. that is the story coming from the ecb. we are getting noise out of japan. we are looking at a yen trading at 142 spot $40. the dollar down more than 1%. corroded speaking earlier, saying the moves we have seen are unsustainable for the yen. we also heard from the japanese cabinet secretary saying that the government is watching the foreign-exchange moves with vigilance and they won't rule out any options if such movement continues. at the moment, we have a very rich dollar. it is working to turn around some of these currency mood. when it

as for christine lagarde and the ecb, it was considered a tossup.e an energy crisis, yet they have high inflation. >> the governing council today decided to raise the three key ecb interest rates by 75 basis points. this may set front load the transition from the prevailing highly accommodative level of policy rates toward levels that will ensure the timely return of inflation to our target. >> just as important if not more so, she said they see more hi hikes as needed and importantly it wasn't just the hawks pushing the doves in that direction. the doves are on board also. >> not a done deal. before this meeting before we heard these remarks and saw the kinds of things we were seeing in their statement, people were not expecting it but they are now. >> global economics and policy editor kathleen hays. let's bring in our next guest. kathleen just explaining jay powell doubling down on the hawkish rhetoric. the markets are rising. our the markets second-guessing the commitment of central banks again? >> i don't think they are. i think the markets fin

the debate remains live among ecb officials. there is the headline, the euro declining for the first time in two decades. to britain, the u.k. will have a new prime minister tomorrow. either liz truss or rishi sunak will be named. at lunchtime today. joining us is lizzy burden. walk us through the choreography of the next few days. >> we are going to find out who has won the contest at 12:30 p.m. today. this will be the fourth prime minister and the u.k. inside see years and it is likely to be the third british prime minister in history. over the weekend there has been a discernible shift in tone and the u.k. newspapers from what liz truss would do if she was prime minister what she will do and that is since voting closed on friday. tomorrow boris johnson and the winner will fly to bal moreal to see the queen after which liz truss will make a speech behind the black door or in front of it and address her priorities. it is expected to be the urgency of the cost of living crisis. on wednesday she will run her plans to deal with it

the ecb last raised its key rate by 75 basis points in 1999.pple unveiled a above devices with few surprises beyond one, it did not raise its u.s. prices in the worst year for inflation in decades. let's get the details with bloomberg technology editor emily chang. how sustainable is it for apple to keep prices low as inflation rages across the world? emily: apple is making a bet that if they keep prices low more people will upgrade. it is pretty significant that you can buy a new iphone 14 for the same price you bought in iphone 13 last year. the question is, are consumers going to do it when they are already paying more for gas and groceries? when you look at the new iphones, perhaps the most significant development when it comes to the iphone 14 is new satellite capabilities. that means you can send an sos in an emergency situation even if you do not have service. that is a significant technological upgrade when you are looking at a faster chip, better camera and video technology. it will definitely be interesting to see what consumers pay f

we have the ecb hiking by a historic 75 basis points., even the markets feeling the impact of the big news today, which was the passing of queen elizabeth the second -- queen elizabeth ii , really observing that moment of silence. >> there will be a moment of silence from the asx. trading will continue as normal. the death of britain's longest-serving monarch at a monarchy that stretches for 1000 years, casting a long shadow over the news today. but trading does continue as usual. what are we expecting? shery: japan is coming online right now. we have been watching the japanese yen very closely. strengthening for the first time in a few sessions already. we are seeing the first gains against the u.s. dollar and five days. this is as we are close to that 140 four level. but the nikkei right now is gaining ground for a second session. this as we continue to watch some of those exporters taking a little bit more benefit coming from a weaker yen as their exports are becoming much cheaper around the world. the 10 year yield, we are watching i

so i think that's what the fed is doing the bigger concern is the ecb. i think they are overreacting, 75 basis point increase today was probably too much. europe in the face of a pretty severe energy and food crisis has a lot of worry ahead of it and the ecb seems to not be taking that fully into account. >> that's interesting. don't they have to, though, do it to match and keep up with what everybody else is doing, with the euro already below 99 to the dollar? >> yeah. but the size of the economic distress that europe is likely to face as we go through the winter really suggests a little bit more caution most of the inflation problem in europe involves food and energy. it's not things that are really susceptible to monetary policy that is a somewhat different policy here in the united states so i think the ecb is falling back into an old way of thinking and not recognizing that the inflation that they're facing is largely of a different nature than historical periods of high inflation in europe before. >> i think christine lagarde wanted to believe that

the bundesbank voices support for more ecb hikes.harles the third is officially declared king. the picture overall on the indices is a bit of a rally. support for the european stock 600. the dacs, 1% higher -- the dax 1% higher. the focus this week is on august u.s. inflation data due out tomorrow and a headline cpi expected to cool at an 8% pace. in europe, we had the bank of england decide to postpone their decision by a week but we did see pressure on gdp figures this morning. look at the sectors on the move in europe. interesting to have a breakdown. auto brings -- auto parts and banks and pressure on health care and telecoms. nothing huge. the bundesbank president says the ecb will be required to continue increasing rates. the euro rose. joining us now is semin soher power. thank you for joining us. what kind of trend are you seeing inflation doing? semin: thank you for having me. we have seen a significant pullback in energy commodities and we are watching the measures announced to by governments. we are seeing headline inflati

let's get to steve liesman with the latest on the ecb decision steve?es by 75 basis points so it goes on the deposit facility from zero to 75 basis points that is positive for the first time in a very long time on the bench rate, 1.25 from 50 basis points reading here, the interest rate will be set as of september. that's principal news i'm reading here the u.s. federal reserve bank going by 75 basis points here twice. so we will see at the press conference coming up at 8:45 the extent to which kristine lagarde, the ecb president addresses the difference in interest rates across the european central bank spectrum, how the ecb is processing the potential cutoff of gas or the actual cut-off of russian natural gas and the inflationary component. plus another issue is what happens is european governments end up doing pretty massive subsidies to the public about the issue these, to subsidize the natural gas price increase and the inflationary or potential inflationary impacts of that. 75 basis points. for the first time, i think since the ecb existed, 75 bas

that means the ecb has a lot more work to do.hat theory work with inflation at 17.1%. this theory work here sort of like the seven year deviation. jonathan: we have seen that in the u.k., i am not saying it is starting to turn. tom: we will continue to monitor is through the weekend as well. equities, bonds, currencies and hydrocarbons. an expert on this is regina mayor kmpg intl. global head of energy thatkmpg intl. which barely describes her military experience. what are you watching in the oil and gas market? when you begin your day, what is the thing we need to focus on right now? regina: when i think about what is happening in europe, because that is where there's a lot of tension i'm looking at re-things every day. what is the natural gas stock supply look like? what are the prices for natural gas in europe? and what are the weather projections? today, tomorrow and this coming winter. european gas stocks are at 90% of normal for this time. they were at 60% over the summer. the eu has that a great job of rebuilding that stoc

. >>> the yield on the 10-year bond edges to the ten-year mark since 2013 all ahead of the ecb rate hikes and tighter market. >>> and turmoil intensifies with the 10-year gilt yield at the highest level since 2008 >>> unileve vrks eunileve rcee after five years at the helm >>> no great surprises pretty much as you called it from your travels to sicily. well played. the polls got it right giorgia meloni on track to be the next prime minister of italy with the center right coalition led by brothers of italy party on pace to win majority in both houses of parliament meloni would be the first female prime minister the center right coalition is on pace to win a majority in the both houses of parliament taking 44% of the seats meloni's brothers of italy got over a father of the vote by itself the five star movement and pd are the opposition parties taking 19% and 15% of the vote your reaction? >> i want to take a look at the italian yield reaction i want to point out the progress it has been for fratelli this was a party founded in 2012 it has post facist roots 1 in 4 people have voted >> there

we are all looking at the ecb to see what they do. alix: last week we learned that powell and, gartner will be speaking around the same time, it was a huge debate. which one do we take? which is more significant, how long we take it for? that is good example. guy: the ecb story going to the agenda. basis point started to go 75 as well. europeans aggressively ramping up. alix: coming up, labor day traditionally marks the end of summer in the u.s., we assess what that means for investors. this is bloomberg. ♪ >> we think allocation is in a bad place to be. u.s. blue chips, values, dividends, you're going to have a little bit of a bunker mentality and work your way back out. one of the biggest risks to investors right now. alix: victoria green and where you should let your money right now. heading back to the trading desk. that leads us to the question of the day, summer is over. how cold will winter be? what do you do now after we are going to come back? equity selling off, what do you do? >> i love the quote you just played, panic is n

ecb, 75 perhaps.ill get an average g10 policy rate of 1.5%, which would be the highest level since february 2009, when we started to see stocks tumble in an about-face from central banks. this time it feels like we will not stop there. do global markets really have a grasp on the fallout from that, on speculative assets and things like the housing market? esty: when you look at what the markets have done this year, you clearly see that the pain came early because the fed warned us pretty much since march they were going to have to hike and they were going to hike a lot. in may and june and obviously into july, they just kept increasing that rate. i think we are pricing and a lot of that. you were mentioning some of the other central banks, but even after jackson hole, if you look at the fed, the expedition for the fed funds rate did not move so much at the end of the year. markets were already pricing 50, 25, 25. it may now be 75, 25, 25. the bank of england has been at 75 for a while. so this isn't n

g gina, we are two hours away from the ecb.e expecting between 75 and 100 basis points. why is this meeting significant for u.s. investors >> we are looking to see where europe lands there is still a lot of pessimism. the dollar is really strong. the ecb has to step up its game if it keeps up with the u.s. rate hikes which has promised to be aggressive until inflation eases. europe is girding itself for the winter to come which could be painful or it could be less painful. i think that right now if you look at the trading markets, most investors are siding with keeping money on shore in the u.s. although europe is really cheap. it is cheap for a reason this rate hike, while i think it is necessary to help ease the pain on the dollar which is part of why things are so bad in europe, i don't think that it -- i still don't think it will be a great time to buy european equities >> greg, do you agree or disagree with gina >> 100% agree, seema happy to be back we're in a painfully slow process where besides worrying about european ma

a huge stress test for the ecb. let's talk a little bit about the numbers.had spanish numbers out. 8.8 of august number. we came through. 10.9 today. spain actually took a bit of a drop off but nevertheless they'll be watching what's happening in germany and the numbers don't look particularly good. communication we had out of the central bank has been one of we are going to hike rates reasonably aggressively. she covers the ecb for us. we find her in london today. she comes at an interesting time. nice to see you in london. let's talk about that inflation number. the headline number out of germany we are in double digits now how much pressure is on the ecb to act incredibly aggressively with that data. >> a lot of pressure. the acceleration in germany was expected. temporary measures in place over the summer. public transport, train subsidies on fuel prices, those expired at the end of august. we will see a big jump in the september numbers. what we've seen far tops most expectations that i've seen and came as a huge surprise. in that sense there is definit

in europe clearly the ecb is extremely relevant.hey are facing and unsolvable -- an unsolvable monetary problem as is the vanke of -- bank of england. a lot of the inflation they are encountering is because of inflation -- energy prices, has nothing to do with the price of money. obviously supply shock from the russian faction. as we see today, that supply shock can be exacerbated with the flip of a switch or the lack of a flip of a switch. as the pipelines stay shut. that radiates into negative sentiment across broader markets. which is why we have seen the s&p and u.s. equities paid after that -- fade after that quote and quote goldilocks jobs number, apparently she had to leave the building to get some gas from somewhere else. >> let's build on that, your headline today was goldilocks pays a visit, how long will she stay? she is not staying long as the s&p struggles into the afternoon here, can we really see a market leaning on the go deluxe narrative with one data point? >> no. it is a really great jobs number from the feds pers

lisa: talking about a 70 point isis hike from the ecb.licy, borrowing more to plug an undetermined gap for an indeterminate amount of time, kind of concerning. jon: if rising rates and qt have seen rising -- have seen radically different backdrops. we are going to get a 75% basis point. i don't think that should be lost on anyone. this is a big deal. kailey: it devil he is a big deal. my question is what impact will it have? when you have inflation driven by an energy crisis that in no means looks like it is going to be resolved quickly and the euro is weak, not just because the euro weak, because the dollar is strong, how much does it make a difference in either of those equations question mark -- in either of those questions? jon: the yield down -- basis points -- just a little bit in the last 20 minutes or so. .25%. from new york, this is bloomberg. ♪ lisa: with news from around the world, with the "first word", i am lisa mateo. trust says she will build more nuclear power and -- oil for the u.k.. >> i am against a windfall tax. i beli

coming up, be ecb governing council member gediminas simkus joins me next.s is bloomberg. ♪ >> i think it was the right thing to do given the technical factors that had arisen in the market. and it's obviously brought some important stability to the gilt market. it does not resolve any of the fundamental contradictions in british policy. dani: former treasury secretary larry summers weighing in on the boe intervention. let's look at a different central bank, joining me now is ecb governing council member gediminas simkus. minister, happy 100-year anniversary of the bank of lithuania. exciting in many ways. i want to start with the u.k., there has been a rupture in markets that sparked the boe intervention which we did see in global bond markets. are you worried about risk of financial stability? gediminas: we are in the midst of ongoing russian aggression against ukraine you saw a peach -- peak of energy prices. you have seen a not well-functioning electricity market. with the when you suffered from very high electricity prices in august. this will definitel

i think the ecb was the first to go with that cpi program. they had to contain yields for they started hacking interest rates. they are going to go again. they have the mechanism. let's see if they use it. the ecb has set up a vehicle to deal with what is happening in the bond market. the chinese are threatening to intervene. i'm sitting here wondering who is next? is the fed going to come into play? >> very high bar. we expect them to stay the course, deliver 75 basis points in the next meeting. when i think about central banks , the fed is probably the one central bank where the bar is really high. partly because there is still a ton of good momentum in the economy. the risk of recession is low, and i think that will dictate every action. jonathan: greg, what is your take on that? greg: i completely agree. i think the bar is really high for the fed. i think the markets are misreading the fed and have misread the fed all along. the fed continues to push back. they are doing it today as well. i think when you have been in this environment whe

euro-dollar, euro showing strength. 99.9 into the ecb next week. ecb says a move of .5%. accrued up as well. we need to talk about a g7 price cap on russian crude a later this morning. we will catch up with jack fitzpatrick for that. we need to get you up to speed on what to look for for this bond market once we get payrolls report in 19 minutes. we can do that with michael gapen, who joins us right now. -- we start with priya misra, who joins us now. the 10 year started to move out. what are your thoughts on that? priya: i think it has been an interesting move. some alluded to qt, the fact the fed is letting the balance sheet runoff. i think we have known about qt. it has been happening for the last couple months. i think this is about global interest rates. the fact we had a big move on a bonds and you name it, the global bond market is repricing higher. i think to the global central bank community that is willing to risk a recession to fight inflation. i think it is more global. i'm watching the ecb next week, the bank of england. i think that will drive the long end.

ecb is suggesting 2% required for rates to try and tackle inflation.don't forget as we talk about where the neutral rate was, we are seeing 1% to 2%. now moving rates toward 2% would be fairly high end level for the markets. arabile. thank you, karen deutsche bank and bank of america ready to announce further rate hikes back down to the 2% target. cnbc spoke with the central bank of malta and played down a move for the future. >> we believe the supply side for the inflation will abate perhaps because of things happening in the u.s. and gl globally prices and energy would subside. we still have to see that. the point is that were to happen and obviously we will continue to look for demand and would require a similar hike as we've had just a week ago. >> fed governor christopher waller indicated support for the third consecutive 75 point rate hike this meeting. his comments come after similar remarks from jay powell and vice chair lael brainard. >>> the u.s. federal reserve is likely to raise interest rates by another 75 basis points according to the cme

ecb's christine lagarde reminded everyone it is the role of government not the ecb to find energy trades. it is to provide liquidity to banks. everyone seems to agree that the energy traders need a financial aid. the fight starts next week when the commission president sets out concrete measures for legislation. one week after moscow shut down its main pipeline in europe and moscow has been tinkering the amount of gas available to the european nations over several months now. it is getting increasingly desperate for the european union to solve the energy crisis that could become both economic, social, and financial. many of the nations are trying to get ready for winter with various reserves. resorting to add to their storage. they are not there yet. gas supply would not be restored to the north spring pipeline which is another maintenance fade after a sanction after the invasion of ukraine was lifted. increased fears that there may be some total cut off of russian gas? shery: we are seeing the price pressures across europe. we are hearing from the ecb president on the potential approach

which makes the point that it is not just about the fed and central banks, even the ecb is going to be driven around by the price action today. one other point is the second chart, adding the japanese 10-year yield. we have been in a long-term bull market for you -- for bonds. we started reversing over the last year or so. maybe this is the end of the bond bull market, we could see the bond bear market which means yields potentially going higher. if they do, that will happen if the boj ends yield curve control. the track is much greater than people think. in fact, it may be japanese yields become more aggressive. and if these yield moves continue, it is the one in japan to watch for the big catch of trade over the next six months. tom: the mark cudmore call that the boj will be forced to walk back from yield curve control. let's get back to the big geopolitical story at the moment. russian president vladimir putin has given the order for partial military mobilization beginning today. putin said he supports referendums in russian occupied ukraine on annexation, and that russia will take

dani: we are looking at the ecb continued to hike rates. debt piles.ncine: i would imagine that markets will vote on sunday and then on monday we have some results. we do have a bit of a bus stop -- bust up over the summer. there are three questions, what do we do it debt? if we see a government about fiscal policy. that will be problematic for markets. what she does in terms of the recovery fund. she will have access to 1.9 billion euros in september. if she six to 55 points, she could decide that this is not the right time to stick to europe. there is an underlying euro skepticism. it is unlikely they will govern on their own. yes, they are still going strong. the rhetoric is very pro-italian, anti-nationalist. they are fed up with the rules. the market will have to assess and see what is next. dani: thank you so much. with us now is daniele antonucci , chief economist and macro strategist at -- bank. you say clear outcome, unclear strategy. what is the biggest unknown? daniele: the outcome for me. it is clear that markets are expecting the largest -