ecb is different. this is a different press conference than what we are going to see from chairman powell. jonathan: one piece of good news . at least it is so much better than it could have been. it has been more than what people ought it would be. lisa: at what point is this a positive developments? everyone keeps saying just wait until winter comes. i was reading a story that daylight savings time being a nightmare because people turn on their lights earlier and that uses up more energy. there are all certain things people are looking for. jonathan: they have been looking forward to get rid of that for a long time. lisa: it creates a little bit more. tom: we follow back --fall back and spring forward. ♪ jonathan: here is the price action for you, starting with the equity market on the s&p 500. futures positive on the s&p, let's call it unchanged. meta-is down and down hard. we are down about 19% on meta. yesterday we were down hard in the likes of microsoft. think there might be a surprise for some

up next we will get more on the ecb. before we head to the break we also have -- heard from the u.k. chancellor jeremy hunt earlier who says stability is now his top priority. this is bloomberg. ♪ >> our number one priority is economic stability and restoring confidence that the united kingdom is a country that pays its way. guy: earnings and central banks proved to be an interesting combination. we have the bank of canada, we get the ecb tomorrow which is expected to make or deliver a huge rate hike. 75 bits is anticipated. the fastest tightening cycle we've seen for central bank in its history. joining us as the bca reit -- research chief strategist. we've just seen the poc go -- boc. you think we will see the same with the ecb as well? central bank more broadly reaching the limits of how aggressive this frontloading can be? >> i do not think this is going to be repeated in the next sessions of central bank hikes in the euro area the united states. the reason the canadian housing market is starting to buckle down fairl

but with the ecb, we remain bold.aybe what we will be looking at is any comment on tltro, because this would be one way to naturally reduce the central bank's balance sheet. francine: how much are you expecting the ecb to actually do the next couple of quarters? if you're expecting inflation higher for longer, that puts more pressure on the economy to deal with inflation. monica: we think we arrive at the end of the year around 2% terminal rate, which is 75 plus 50 in december. francine: what does that mean for your biggest conviction? where do you want to be invested, is it still king dollar or does the euro make a bit of a comeback? monica: i am the fx space, we believe the u.s. dollar will remain strong. when it goes to the equity exposure, because of the diverting objective between fiscal policy that needs to address and sustain growth. and monetary policies that needs to curb inflation. therefore tightening financial conditions. we remain quite cautious on the equity stance, howbeit we have been reducing a tiny b

i'm still trying to digest the ecb.'m still unclear as to what kind of hike that was, to be perfectly honest with you. guy: i think it was dovish. let's assume the market is always right paired you have a weaker euro, btp's spreads tightening up. i would say that is a dovish hike. slightly confusing. we will come to the details in just a moment. that meta-move, today's is day to have your head on a swivel. you just highlighted, current suites this morning, massive move to the downside. meta-overnight, it massive move to the downside. ecb, slightly harder to judge. maybe a little bit more nuanced there. probably, i don't think they're actually signaling anything positive about the eurozone economy. are we signaling stagflation is here? that seems to be the message, maybe. alix: it echoes what we heard from the bank of canada yesterday, which means we are so concerned with inflation. it is not coming down like we want. but growth risks are now picking up, so narrowing of the soft landing is getting smaller and smaller. on

however, the ecb operates by consensus. they came out with a substantial consensus to do the 75 basis points. that left the question, what do they do at the next meeting? there was a substantial discussion of that. it included the phrase they made substantial progress in normalizing policy. many people felt that was a slow down and they did not want to signal one way or another. they put in that idea they would raise rates at the next several meetings. there are no numbers, but the markets have taken it as a dovish, not progress, but outlook -- promise, but outlook. kriti: the bank of canada, from the bank of her point of view, jay powell has over and over receive -- referred to that era of the 1970's, the 80's, paul volcker, they should not have paused when they did, they need to go full out and to go full out and be aggressive on inflation. is not that the message that the bank of canada and ecb is listening to as well? michael: the situation of europe is different than the u.s., where we had contributions to inflation, s

the ecb may be balanced or dovish today. you can see yields coming down sharply we are trading down by 24 basis points. 4.081 on a 10 year italian. alix: in the u.s., flat as a pancake so is the s&p but not compared to where we were. we are flat on the day. no surprise with the dow outperforming and tech underperforming. it highlights the caterpillar versus meta-situation. caterpillar up a good 10% when it comes to earnings able to pass on price increases in really strong demand for their products prayed they see price hikes moderating in the next quarter. meta, we know the story. it is rough. the worst fall since february and then ending on the bond market. buying across the curb -- curve, what were calling it dovish hike from the ecb. we will debate that in just a second. you get a third quarter gdp read that was not as bad as estimated. personal consumption holding up. it did slow down but not as much as we are expecting and all of that feeding in, of the economy is ok. kicking the can down seven. there is still some crac

guy: the ecb or crying wolf.e past, they have warned banks to be careful of bonuses only to see banks making decent money and being absolutely ok. why should the banks listen to the regulators when the regulators keep saying this kind of stuff time after time? >> right now that's a big problem for the ecb. as you have said, they've been giving out these warnings previously and never really materialized to the extent that they said they would herded ecb has said this on the record, to be dismissive of what the ecb has said it has caused credibility and authority problems. if this happens again, the ecb will double down on the bonus issue. the authority of the ecb over banks will erode and this can become a bigger problem in the future. kriti: i want to pivot to credit suisse because they are offering $3 billion of debt buying back to calm the jitters. is that going to be enough to congeners? -- calm jitters? >> it helped today. the stock price is up. if you look at the historic example, we have a story comparing t

it puts the ecb in a bigger bind.e they going to have to change that dovish hike they saw yesterday? >> they are higher than expected. these are the headline numbers when you look at as far as we have, excluding further managing on which the ecb has less of an impact. they are also high, maybe half as high as headline but still too high. i think there is no discussion the economy shoots slow, to lower inflation and lower the inflationary pressures. i think the main question is, will it slow enough by itself or does the ecb have to push more to slow the economy? yes, the gdp numbers were better than expected. this was mentioned, the winter is going to be more difficult when you look at confidence indicators, leading indicators in europe and the data on consumer spending, weakening quite rapidly. so, yes, the ecb will hike until the weakness is probably clear and the numbers. i think when lagarde said yesterday they will take into account what they have done so far, they will take into account the lags with which moneta

i'm talking about the ecb.evel of the spread, it is the speed at which things are. so far, it is fairly contain. the biggest issue with tpi is not of a technical nature. it is political. the way tpi has been designed, it is definitely not something that would protect government's against their own mistakes. that is the issue. if you could come up with a situation where the market is punishing a state for things which it has not even done or announced, then tpi is fully there. if they are doing stuff that is triggering a rational reaction by the market, gpi is probably not the right instrument. so far, the news we have from italy is the new government, we don't have one yet, they want to be prudent. if they don't make a big announcement that would make the ecb nervous, they could benefit from tpi. there is a relationship with the market that can build with that. lisa: i can hear your voice in my head. it is very loud right now. he is saying ok, they will talk about political risk and the peripheries, what about

>> this is a proper halloween nightmare for the ecb. it is basically all tricks and no treats in the data. the numbers make the ecb pivot 250 basis point hikes from the 275 we saw in july and september less likely. some of us are not giving up and that includes us at pantheon. we think today's print may be good enough to convince the ecb which last week said they made substantial progress to hike rates to change the names on that. alix: on the flipside, gdp in the third quarter slowed. that does not feel like an economy that can handle another 75 basis point hike. melanie: at this point, the inflation rate is too high for the ecb to be thinking about slowing activity. they did mention that last week when they met. all signs point to a slow down. we have surveys falling across the board. they cannot be dealing with that at the same time as dealing with the inflation mandate. their aim is to get inflation down to 2%. they need to hike more to do that. guy: up to now, the european inflation picture has felt like a supply-side story. are we

ecb is worried about that. is saying we see nothing here to change our view that ecb rates are going to be ready soon. kathleen: that is marked renfield putting everything -- mark cranfield putting everything in perspective. i want to give you breaking news, i want to give you a correction. i read the previous month 2.5%, but it did pick up a bit to 2.6%. that is not a big move but people wondering what is happening, services jobs are supposed to increase again, and we will see if this is having any kind of impact in the markets. i guess maybe a little one but not too much. people are waiting for the boj decision later today. moving on to credit suisse, suffering its single against daily decline on record after a years of big losses and scandals. let's bring in su keenan. it investors do not seem impressed. >> the top leaders describe this restructuring as radical and decisive, but analysts say it was not radical enough and it was not exactly decisive. take a look at price action. investors rejected this after

not all ecb policymakers support the hike. vw, the auto giant tumbles as it cuts its full-year forecast amid supply chain troubles. this is a picture of markets across the board. the main focus is what we are seeing here. some pretty disappointing earnings in the u.s., but also with the ecb told us yesterday. the market interpreting that is a bit more dovish ecb. positioning in the markets is extremely interesting. japanese bonds advancing. let's get to japanese bonds advancing after the central bank maintained its ultra low interest-rate. governor kuroda i think still speaking to the press right now. the dax down 1%. sectors on the move driven by what companies are out with earnings. technology under pressure in the u.s. that is filtering through here in europe. i remind you it is not only amazon, but also apple. earlier in the week, we had others that were much worse than expected. basic resources down. real estate and technology down. telecom, the biggest gain or. let's get more on the markets as stocks drop in asia and eur

the ecb does have credibility.hat you are talking about is in the sense -- the risk that the qt could actually be pulled forward from the end of 2024. we are an environment where sovereign yield can continue to widen further and yield curves can -- in europe. alix: good luck. guy: yeah. going really well. the good news it keeps on coming . laura cooper, thank you. always a pleasure. thank you very much indeed. what are we going to talk about next russian marketing back to the headline sector. --? back to the headline sector. the world aviation festival. we are going to play some of it next. this is bloomberg. ♪ - in the last two years, we quadrupled our team and the pace we're growing, i couldn't keep up without ziprecruiter. they do the legwork and they get my job posting in front of the right candidates. i love invite to apply. i instantly see great candidates and i can invite them to apply. we have hired across all departments, engineering, marketing, hardware, field techs. you can basically tell ziprecruiter wh

with the lack of unity coming from the ecb. see that as perhaps good governments rather than a dereliction of duty. explain. paul: we are in a situation where it is more sensitive than the united states but is facing the same sort of challenges. we the energy crisis, the impact giving a certain amount of demand. we're in the midst of the biggest structure of people in 250 years. data and real-time is increasingly unreliable. you have a lot of uncertainty about what is going on in real-time. this idea of relentlessly hiking without pausing to try and assess how those interest rate hikes have affected the economy might change the outlook, i think that is dangerous. it is sensible to be talking now about pausing or slowing the pace in order to reflect on existing policy moves and what they have done to the economy. dani: this is not the ecb story or you have disagreements. we have heard from the fed. this at mean this proclivity to rally on the back of this, to have a global rally, not just in europe, is perhaps a head fake? i hav

at the end of the month, ecb.nth, will be here from the bank of england with the gilt operation set to expire on october 15? starling, 1.1198. let's say good morning to grandma -- bramo. lisa: it will also be important because jp morgan. will it be ripping off the band-aid from what we heard or is this just the beginning of what is more to come? tesla shares down 5% after reporting deliveries for the quarter were disappointing because of shipping issues. supply chain issues have not abated. blue apron, some of the pandemic darlings, down nearly 19% at this point ahead of the open after reporting the recorder warnings that missed estimates. you have to wonder if this is the response to an earnings miss, what is priced in? how much earnings pain have we acknowledged in equities? nike reports earnings after the bell on thursday. more than 12% declines in the shares, biggest decline going back to 2001. even with all of this, people are not seeing the value. people moving away from their overweight because there are mo

the ecb may announce toda . �* . . .. ~ what the ecb may announce toda., . ., ,, ., today.int is _ today. a bumper rate hike at this point is very _ today. a bumper rate hike at this point is very much - today. a bumper rate hike at this point is very much a - this point is very much a foregone conclusion. what we care about is really around an indication of peak rates, at which point they would cause rate hikes in response to not just inflation, but actually of the growth impact and the growth damage of hiking aggressively. we believe that in 2022 the focus is really around the politics of inflation, which is why not only are we seeing the ecb but also the bank of england aggressively hike rates. but at some point, first half of 2023, we believe the focus is going to shift from the politics of inflation to the economics of inflation, ie, the damages of hiking aggressively the growth outlook, and at that point we believe central banks will have to pause their aggressive rate hike cycles and decide to lead with inflation, especially in an environment shaped by supply constra

we will have a ecb rate decision with the ecb. will they pull a bank of canada and surprised to the downside? we will also have data points in the u.s. including third-quarter gdp and initial jobless claims. manus: we will have the bank of england speaking in the city of london event. the financial update from downing street has been delayed. finally amazon reported quarterly earnings as if the tech has not had enough to chew on. that is later tonight. dani: coming up, we will listen in to our interview with credit suisse ceo ulrich korner. manus: and we have volvo cars, we catch up with the ceo to see what is going on. this is bloomberg. ♪ manus: it is "bloomberg daybreak: europe." i am manus cranny in dubai with dani burger in london. it looks like there is some kitchen sinking of many numbers. credit suisse with a restructuring charge and they will restructure the investment bank. headlines are in in terms of job losses. this is the workforce. it will shrink about 17% between now and 2025. dani: the changes they are making, res

we are also focusing on the ecb. kathleen: it's amazing how much a no decision at the boj meeting can get the markets on edge. the ecb is battling record inflation, up nearly 10% year-over-year. no surprise they double their key rate, 75 basis point hikes, two in a row now. the deposit rate is up to 1.5%, the highest level in a decade. all as advertised, but christine lagarde surprise the markets with a subtle but powerful shift in wording on future rate hikes. signaling again, a meeting by meeting approach. let's listen to what she said. >> we took today's decision, and expect to raise interest rates further to ensure the timely return of inflation to our 2% medium-term inflation target following our meeting by meeting approach. haidi: at the previous meeting, christine lagarde had said the ecb would hike for several meetings to get inflation down. now she said you all should expect for the rate hikes. that made people think maybe that is less hawkish, the euro weakened on this and the dollar strengthened. markets a

i think this is where the fed is reviewing its liquidity metrics for treasuries, and i think the ecb is probably going to look at it, and the bank of england is likely to be more careful going forward. i think there is no miracle or secret recipe in redrawing such a huge amount of liquidity from a system that was used to a lot of liquidity for the past decade or so. guy: you can see on the screen, 3.996, trading below 4%, the first time we have traded below 4% on a u.k. 30 year since october 4. you have also seen a big move today in u.k. linkers. we have plenty more to discuss. we need to talk about the euro zone, as well. kokou agbo-bloua. the euro has had a tough day today. we will talk more about that next. this is bloomberg. ♪ guy: so, the euro is having a tough day. the dollar continues to show strength. we are off our lows, but it has been a tough day. .9784. this attention turn for the next series of risks? kokou agbo-bloua joining us now. we have seen what could happen in the u.k. are we going to see a repeat performance in other parts of the euro zone? italy the key area of

we have ecb minutes today from their september meeting. how does an aggressive fed feed into what we are expecting from the ecb? >> --michelle: it is certainly rattling. they have to take into account, the more sterling we face, the impact of the stronger dollar and all this fed to speak that the fed is projecting to keep those rate hikes up. paired with that is the growing recession risk. the european economy seems to be a bit worse off at this juncture. anything that worsens that growth aside while inflation is not improving in any of these places will kind of trigger some action and complicated decisions with central banks. dani: thank you, michelle. coming up on the program, more fed speakers or cold water in hopes of an early dovish pivot. we will talk to anita gupta from emirates nbd. this is bloomberg. ♪ and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scro

the ecb has a single needle in his compass and that is inflation. long will it take the ecb to get inflation back out the target? mario: we don't see any signs of de-anchoring. we see these indicators anchored around 2%. sometimes a little bit above, below but not far from 2%. that is quite reassuring. we need to see signs of core inflation going down which is not yet the case in europe. we also see in the medium-term, inflation going back up to 2%. we will produce an forecast in december of 2025, we will see what the numbers tell us but so far, in the latest numbers we have, we see in 2024, inflation very close to 2.3%. that is the way we expect inflation to behave. of course, this is a little disingenuous because it depends on the monetary stance we will continue in a strong way fighting inflation for sure. again, with this sense of gradualism that i mentioned before. alix: you brought it up, recession, when, what is the look like? mario: that is the key word. we don't have recession in our baseline, yet. that will be a of growth. there are condit

the ecb raised 75 basis points but the emphasis from lagarde on the down shift of growth i think got people hoping hey, maybe the next move is going to be a smaller one. that pivot, hey, maybe the fed is going to pivot, too, and it feeds into this bullish narrative. >> slowing to a pause. there's no doubt about that. i agree that's at work, but what's fascinating is we can now say lower yields in themselves are not a reason to buy the nasdaq it's done nothing but underperform this week it was never a simple story. it shows you it's supportive in general of equities, but not just growth stocks >> we have specific catalysts. next week, it might be watch yields mike, thank you. we'll always fight about that. let's get more on the big story of the day meta gets crushed after missing expectations for q3, but what investors really seem disappointed with, growing costs. meta saying its expense outlook for next year will be 10 obillion let's bring in two guests for two takes on this. joining us is eric hippo and light shed partner, brandon ross eric, you think zuckerberg's making a big mista

i would not call it a blank so much as we 70 ecb, but at least a bit of a nine. that notwithstanding, -- is gung ho, we are nowhere new here we need to be. that would clearly speak the markets. -- spook the markets. it would take the confidence that they have had of late in the week data specific home sale data. alix: i was going to say that whatever spook the market would be any hints at a pivot like will result in the bank of canada and the ecb, but you think that is actually priced into the fed and it would be a more hawkish talk to retreat everyone out? vince: the hawkish talk free to everyone out. if he does lean the other direction like the bank of canada, i were not so much saving that respect market that that would encourage the market is what the market is hoping for. weeks pending home sales last week drop over 30% on a month over month basis. clearly with the fed is doing is impacting what should be impacted by aggressive rate hikes, which is housing. it takes much longer to work through the rest of the system. the hope of the market is they are seeing

unchanged to the ecb. this month, a call for a 75 basis point hike from the european central bank. the ecb front and center pray we heard from the chicago fed president. take a look what he had to say. >> the federal reserve is committed to returning inflation to its 2% average goal. i expect we will need to raise rates further and hold that stance for a while. policy will depend on the evolution of economy and risk to the outlook. >> some people are excited that there may be a pivot around the corner. gasoline prices on the rise until the macro suggest more material weakness. they go on to say that we are generally weak against market. how many times have we done this to last three or four months? >> it helps swing internal. i think the markets have been looking for any window of change and pivot and i do not think it is there. i think the most important point in that speech was average inflation. i think that gives you more room. i do not think they are going to be completely dogmatic to get to 2%. it ha

the big question is whether the ecb will continue with that. with what we are seeing, what came out yesterday, you might consider joint issuance. if that is the case, we would need support from the ecb, whether it is reinvestment, that is something that most central banks would not think about. dani: in the meantime, we still have an ecb that is tiptoeing discussing qt. if that is upping the amount they are selling bonds at. boe is a different story. but jason morgan frames it as, there are too many bonds. are there not enough people willing to buy it? pooja: to be honest, we have seen so much supply. we have seen bond portfolios taking. there are so many bonds still hanging around. that is why we need another buyer that has to be a central bank, if there is no other domestic buyer. when you look at the u.k. market, it has two buyers, boe and pension funds. both are giving up on it and that is why we have the collapse in the market. there is issuance coming in. most of the issuance, the lows that we have seen the last couple of years, that is w

guy: where does that put the fed ecb spread? >> the front end, that is being priced correctly because i think it is being price for a peak of five and ecb for about three. the back and i think were u.s. rates could rise compared european rates. -- the backend i think where u.s. rates could rise compared european rates. by the way, even more that u.s. sources -- that is one part of the world we don't speak about too much but that poor is cold. that is china. not so much likability because of coronavirus, which is also a problem, but, prosperity is a structural issue. if that is the case, there is no reason why korean duration or aussie duration should trade at a higher-level yield than u.s. duration. think that is where the spread early needs to come in. you want to be long those bonds were as i think we can wait for little while with u.s.. u.s. will the last to come down quite aggressively. alix: bank of america survey came out today and one interesting nugget was european sovereign debt market is the most likely source for syst

the central bank governor, and member of the ecb.lier today i spoke with the ukrainian energy minister on the latest russian attacks and the impact they are having on critical ukrainian inertia sure -- ukrainian energy infrastructure. >> it is from the first days of the war. the approximate figure, is something around 30% of the energy. guy: it is having a major impact on give -- kyiv of course. the air raid and the infrastructure that is vital to keeping the city running. the mayor joins us now. mr. mayor, thank you for your time. we just heard from the energy minister talking about the impact that the air attacks have been having on critical infrastructure. can you update us on what has been happening in kyiv right now and how you're coping with those attacks and the outages we are seeing as a result? >> in kyiv, three days ago we had it in the capital of grain. the capital of ukraine started the russian resistance and this attack was to infrastructure. the middle of the city. historical center, and killed people as the russians ta

i would say let's go to the ecb for a playbook. look what the ecb did.wo day slater, cpi data. monday for the euro zone close to 11%. lisa: which is the reason why i suspect that the likes of bill dudley are going to get even more voice. he has been right, and how much can you start to see those and rates climb even higher -- end rates? the economy is not responding as quickly to these rate hikes. at what point can you imagine, ok, slower pace? jonathan: slow stretch and raise, that is the approach they are looking for. do you think that is going to be the one that people go with? lisa: it sounds like what we should do on monday mornings. jonathan: if you do step down, throw another 25 point basis hike in there just to communicate that you are not giving up anytime soon. does that make sense? lisa: maybe that will give some sort of hawkish feeling, but people don't believe this fed has conviction. are the projections realistic? do they have to say we're going to see unemployment rise? we don't like this but it is a necessary condition in order to let inf

we think another 75 basis point hike is likely for the ecb in october.nk what they do in december depends on how inflation numbers will evolve, but our base case is they will hide all the way to 2.75%, and the weak euro and pressure from higher rates in the u.s. is part of that story. francine: should they just go one point at the next one? jari: i think 75, and then another one or two and they slowdown. francine: oil prices extending their rally after opec+ agrees to the biggest production cut in two years. we will have a full round of that story next. this is bloomberg. ♪ francine: welcome back to the open. 43 minutes into the european trading day. holding onto gains but seeing reversal for the ftse, earlier gaining .2%. the biggest story is the impact on energy which will be translated through inflation. traders weighing this oil curb, 10-year yields edging higher, the dollar weakening. opec+ agreed to cut output by the most in two years, and of the eu approved new sanctions on russian oil. speaking exclusively to bloomberg in vienna, russia's deputy

tom: we heard from the ecb saying he sees a slower pace of rate hikes once 2% is reached.ome in the markets are taking heart from that. is that feasible? dr. jumana saleheen: in the ecb, structural factors mean our view of the neutral rate is lower. we view the terminal rate to be 2.5% in europe. in contrast for the u.s. and the u.k., it is more above 4%. in the ecb, there is a different trajectory given that the fundamentals of the economy are different. tom: dr. jumana saleheen from vanguard asset services, thank you. a deeper look into the resilience we are seeing within the banking space. this is bloomberg. ♪ francine: welcome back to the open. 43 minutes into the trading day. a lot of the stocks are gaining. we are expecting huge strikes in france. stocks extending their rally. we have a lot more stability on the bond market but that is also pointing assets towards riskier assets. >> their credit quality and the quality of bank of america is very strong across the board. delinquencies are lower than they were pre-pandemic. they moved a little off the floor but they ar

ecb. we discussed u.s. economic data with oliver kettlewell at mattrick capital -- mashreq capital, how hot of a cpi print is he expecting? >> we've never seen this kind of volatility, up and down, all this year, ups and downs intraday. but all this volatility should be your friend, it should create opportunities for stocks being mispriced if researchers have found their job well. dani: a friend of volatility, john rogers, junior. manus: and he kept the dream of value investing alive. but let's shift to the bond markets, they are live and fri sky, oliver kettlewell is the head of fixed income at mashreq capital, hope you don't have gilts on that book of yours? compliance will be happy. we've got an explosion of volatility, how are you reacting? oliver: i don't think it is time to buy the dip, i know he is a famous value investor, but you need to see data bottoming, unemployment rising not falling. the opposite is happening right now, so it is not quite time to buy the dip just yet. dani: c

i'm going to first go to the ecb question. can become more restrictive, raise rates 75 basis points with a nominal gdp construction of the continent? where do they have the animal spirit to withstand ever a higher interest rates? >> to answer that question you have to first look at where we are in terms of the starting point. we are way below neutral. it is still accommodated so i think it is no regrets. but we have to at this accommodative phase and your question on how we should go into the territory once we get there, we will cross the bridge once we get there. tom: right now it is accommodative, however you want to phrase this as well, what happens next after that presumed rate increase? klaas: our president has two very clearly, we are in the phase of lowering rates. nobody knows where it is but we are at least seeing more significant hikes before we enter the range of plausible estimates for neutral. that will take us into next year and i hope with the current uncertainty in the market and the bond market volatility, i h

and the ecb will be forced to maintain a tight monetary policy the president of the ecb has made it clearwe now in the phase of normalization of interest rates. this means bringing them to a neutral indicator, unfortunately, no one even knows approximately where these neutral values ​​are. but i believe that we will need at least two more significant interest rate hikes. inflation is accelerating and in the united states in september, consumer prices rose by 8.2%, which is 4/10 more than in august. this happened despite five fed rate hikes this year, including three per 75 basis points , us inflation is near its high. 40 years of level. the head of chevron is confident that western policy to stimulate inflation could lead to a global recession, and the international monetary fund estimates its probability at 25%. the economist who predicted the 2008 crisis has an even more depressing view of the future of the global economy. she is in for a catastrophe, said norel rubine in an interview with new sweik magazine. he believes that believing joe biden's recent statement that a minor recession

we have the ecb's dovish philip lane speaking. manus: wednesday, ppi hitting the tape.nt cpi, 4.5% expected. 75 basis points friday, and we get u.k. home prices. am going to have to work forever and ever. china reopening after golden week. consumption data, pboc employment data as well. it is not looking good. let's get to our equities reporter in asia, charlotte yang. pboc labor indicators are screeching at the moment. not exactly a bullish start to the week, is it? charlotte: no happy monday for china stock traders who returned from the holiday and are facing a slew of data. as we mentioned, consumption data. also the selloff on friday. no improvement on the property side. everyone is wait and see and very skeptical. dani: this is a question we keep asking, and perhaps it is a trial question to ask, when we see this weak consumer spending, will there be any change in the covid zero policy? charlotte: that is the question everyone wants answered, if we will see a change with covid zero. at the moment, it is something we are closely watching for. some investors got real

the ecb continues to remain hawkish.imately i think the euro area as well as the currency is driven by its energy shock. kind of the warmer october would be energy prices, gas prices, also some support provided to the euro area. ultimately the energy prices depend on russia. that is likely to be the key driver of the economy as well as the currency for the euro area. yvonne: how closely are you watching dollar china right now, given how this could send shockwaves across the emfx? how do you think that's going to play out across g10? >> i think the yuan depreciation does have more significant impact on the asian currencies rather than g10, but the chinese economy does definitely affect currencies, the likes of euro has strong trade mixed in with euro affected. we think the positive catalyst coming from the lower natural gas prices in the euro area is partially offset by the china impulse. it does have some negative impact on non-dollar currencies. rishaad: thank you so much. shinichiro kadota, barclays foreign-exchange st

what will throw the ecb off course if anything?ra: when we look at thursday's meeting of a 75 basis point hike is in the price. i think they will follow through with that. anything less will be considered dovish. i don't think they will have the so-called pause just yet. by the end of this year, as we start to see more of this deterioration being confirmed, they will pivot towards the growth mandate. francine: are you expecting consumer confidence to be hit quite hard? laura: i think we are already seeing that in terms of europe. if anything, the energy crisis so far is proving to be less of a meaningful risk. we look at storage levels, they are elevated above the 90% rate. the key risk is will this be a normal weather like conditions this winter? i think we will see further constraints on the european consumer. francine: when you look at the markets overall, and we saw those liquidity concerns, when you look at what we have lived through so far, japan is one of the most interesting bids that global markets are not focusing on it a

if you have slower growth in europe and very high inflation it was easy be in a tough position -- ecb in a tough vision. it will not be a huge the klein -- decline but it supports to 0 -- the dollar. we believe it can remain strong as the growth beers continue. we are telling -- fears continue. we are telling our clients for now we are excited about the u.s. and excited about the international bonds. >> can you get excited about europe just yet? >> fully all in no. the answer is no. there is a case to be made on the corporate bond side just because of valuations. even there i think the recession, when it happens in europe will be more serious than what we will see here in the u.s.. it will also come sooner. at this point i definitely think that the dollar is overvalued. the point is there is very little to say, why this will not continue to be supported by differentials and monetary policy. ultimately i do not see that changing from japan or the euro zone anytime soon. i would say it stays that way. it is not an automatic space which is attractive. i think there are very attractive op

tom: i'm going to go back to the ecb headlines yesterday. out in a stream, 40, 50 that time, and none of them were timestamps. jonathan: what they want is to leave forward guidance in the past. what they want is meeting by meeting optionality. the problem they have is inflation is still running away. is that the time to open the door to 2-way risk to be introduced back into the market? if you offer me one way risk and say keep hiking, if you turn to two-way risk, that does not keep nimble. i'm thinking, you sound more dovish. that is what has taken place over the past month. lisa: until we get the cpi report after the election, and perhaps the two-way risk comes more heavily weighted one side. jonathan: we are at the mercy of that. this was fun, guys. thank you. tom: you are leaving? jonathan: as i always do, for the next show. hugh hendry has made the trip over from -- over to new york city. the founder and former cio of eclectica. from new york, this is bloomberg. ♪ lisa m.: keep you up-to-date with news from around the world, i'm lisa mat

-- on greece and other nations by the ecb?f that is feeling the anger toward these policies? jonathan: we are going to see more of this. tom: might measurement -- the measurement of the financial conditions in europe is an outlier. i can't say enough how restrictive their stance is giving mathematics. jonathan: here is a quote, that is compounded by the decision already made by the central bank to stop the program which creates further problems for member states that elevated public debt. tom: thursday ecb. an easy 75 but then what after that? after that is after the midterm elections. annmarie hordern joins us. at the white house, the basic idea is the president giving pep talks. what does the president of the united states do in the next two weeks? annmarie: he is going to his best to try to rally democrats to get out and vote and try to rally independents to make sure they are reaching out to the youth vote which was critical in the presidential election. you also think he will only campaign if those candidates want him alo

we have the ecb rate decision thursday.uld see that two year yield bumping up against the highs we have seen going back to the depths of the financial crisis at a time with this question of how far can the ecb go in the face of weakening data. this week, we get u.s. economic data. we get home price data. the first read on u.s. third-quarter gdp on thursday. friday, we get the employment cost index and university of michigan sentiment read. how much does this matter not only into next week's fed meeting but also into the election? we have two weeks until the u.s. election. how much will this shape the dynamic and narrative? on the sunday shows, the discussion was about inflation and the economy, no more about the social issues, which gives a focus of where the electorate is. facebook on wednesday and apple and amazon on thursday. how much will these be the bellwethers driving the discussion going forward? we have seen earnings come in ok. they have crossed a pretty low bar. these will be the important names, more than a lot

the ecb will be out with its latest decision thursday.taly's new prime minister is already thinking about what central banks should be doing. she is not convinced we should be seeing aggressive rate hikes. joost van leenders van lanschot kempen senior investment strategist joining us next. this is bloomberg. ♪ ritika: it is time for the bloomberg business flash. i'm ritika gupta. shares of ubs are rising. the bank listed profits that beat estimates. that will enable ubs to confirm a plan to return about 5.5 lynn dollars to investors this year. >> it depends on how the markets develop, and also the liquidity in the market. there is a limit to what we could do. last friday we were -- we were at 4.6%. he will continue at the same levels. should be getting over the $5 billion mark to $5.5 billion. ritika: the ceo is leading efforts to expand ubs' presence in the u.s.. adidas has ended its partnership with ye. in recent weeks ye has made controversial statements, including anti-semitic posts on social media. that has turned his sneakers into a

we are also focusing on the outlook for the ecb over in europe with those inflation numbers coming in yesterday. kathleen: i thought about -- it's all about inflation for everybody. even though people were expecting a stronger number, higher than 10% in september, it was expected at 10.3% year-over-year, it actually came in at 10.7%. this is one of the highest numbers on record. back at the beginning of the year, the number for euros on inflation was 5.1% -- eurozone inflation was 5.1%. in a year, it's more than doubled. the gdp was supposed to come in a little negative. up in the third quarter, that is something that looks so far like the aggressive rate hikes which make it more aggressive from the ecb, if they continue with the 75 basis point rate hike in december, the leading hawks on the ecb, maybe that helps them feel they are probably going to get a recession, maybe a mild one. they don't see it so far. but this is a number i think investors are on the world took note of. haidi: we know a big part of the inflation fight has been the volatility and energy prices, oil prices as a

still ahead is the final spread, the week ahead featuring central bank decision starring the ecb andank of england. that is up next. ♪ lisa: this is "bloomberg real yield," i am lisa abramowicz in for jonathan ferro. coming up, pmi's from u.k., euro zone, and others on monday. then u.s. gdp coming thursday and finally a host of great decisions -- great to decisions including the ecb and boj to close out the week friday area still with us happy to say vishwanath tirupattur, rob waldner, and meghan graper. i want to go straight to the rapidfire peer die when ask a little bit more open-ended questions but they are really quick answers please. the first one, where are fed funds rates at the end of 2024? meghan: close to 5%. lisa: rob? rob: 3%. lisa: vishy? vishwanath: 4.5%. lisa: when does qt in the united states stop? vishwanath: third or fourth quarter of next year. rob: and of 2024. meghan: and of the first half. lisa: when does the first fed rate cuts,? rob: third quarter 2023. meghan: last three meetings of next year. vishwanath: end of 2023. lisa: thank you to all of you, vishwanat

economy and volatility in the markets, how does this code or the ecb and tightening as well?, the u.k. government comes up with a big budget. six days later, the german government announces a similar package. and nothing happens in the markets. there is a credibility deficit that the u.k. has that the continent doesn't have. now that germany said it and has arguably given the rest of europe covert to follow suit to support the economy as well, it all depends on how this is designed, whether it works to lowering inflation had -- inflation and helping the ecb or making it worse. if it makes it worse, the ecb hikes further and we could experience a situation as in the u.k.. but giving europe the benefit of the doubt, some of the packages look more compatible than what we have seen in the u.k.. shery: is germany going to be one of the economies that is going to fail relatively well -- fare relatively well with the drumbeat of recession across the board, and their exports have been slowing, right? christian: indeed. quite the contrary, i think journey is going to -- germany is goi

the president of the ecb has clearly stated that we are now in the phase of normalization of interest rates. this means bringing them to a neutral indicator, unfortunately, no one even knows approximately where these neutral values ​​are. but i believe that we will need at least two more significant increases in interest rates. rates. inflation is accelerating and in the united states in september , consumer prices rose by 8.2%, which is 4/10 more than in august. this comes despite five fed rate hikes this year, including three per 75 basis points, and inflation in the us is near a 40-year high. the head of the chevron company is sure that the policy of the west stimulates inflation can lead to a global recession, and the international monetary fund estimates its probability at 25% according to the economist, who predicted the 2008 crisis even more depressing a look at the future of the global economy. she is in for a catastrophe, said norel rubini, in an interview with new sweik magazine. he believes that believing joe biden's recent statements that a slight recession is possible sho

we are facing these issues also on the rise and rates are on the rise and so i think the ecb right nows quite busy trying to keep things in check. the crucial 250 on the bond spreads before we stabilize. i have a suspicion whilst looking at this, but is that enough? that's the main question would really made the difference earlier this week among these headlines where the german government is open to joint issuance fund challenges of our times and fund the energy crisis print all of a sudden brought this in by 30 basis points in one go. >> do you think it would be willing to do so if italy -- if rome becomes more. do you think if italy does not play ball in terms -- if italy diverges from draghi, how much tolerance is therefore for that in berlin? >> that would make it difficult especially for the current government to agree on anything, so it will -- we will be very keen. to send very clear messages that they are -- that they continue the reforms draghi has started, continue to actually add to the fiscal prudence and i think this is forthcoming. warning signs on the rating agencies. a

at the same time, ecb. will do everything possible to return the indicator to two percent.ile you are hard to believe in germany, europe's largest economy in september consumer inflation accelerated to 10%. food prices have risen by almost 20%, while energy prices have risen by 44%. in the energy sector, for example, in france, the electricity supply may be cut off, for some residents, the local energy company is going to resort to this measure in case of a cold winter and thus save gas reserves. in paris, at some gas stations, a limit of 50 euros was introduced for the purchase of gasoline prices, which exceeded the mark of 2 euros per liter of some parisian gas stations closed on others long queues of hungarian prime minister viktor orban have accumulated. in his statement today, he pointed out that a change in the sanctions policy of the european union could halve prices. the difficult economic situation in which europe finds itself once again confirms anti-russian sanctions primarily harm the europeans themselves, and not russia . when we pay a higher price in stores or

he is pushing the ecb to raise its rates. the bank of england raised rates.are going to make a bad situation worse. europe is headed towards a severe recession and the fed is contributing. claudia: what do they do -- tom: what do they do? they have a fed meeting. let's have claudia sahm come in here and have us a take. claudia: they need to slow down. they not going to. 75 is happening. 75, 50, 25 would be great, but i don't know. tom: is currency a value to you here? claudia: what a strong dollar does is it means it is cheaper for us to import goods, and we like a lot of cheap goods from abroad. we are doing better than in april. with a strong dollar,we are importing disinflation and exporting inflation. that is good for us, but -- if we push the global economy into a severe recession, we will not withstand that. tom: massive inflation analysis, all of the different professors, and all of the rest of it -- services pullback or a goods pullback to disinflation or even outright goods deflation, which of those two is more important? claudia: broadly we say that