plus it is ecb day. the recent banking chaos drove the rate hike down, but with the snb rescue, markets are on the fence on predicting a half-point hike from christine lagarde. in an attempt to stymie a crisis of confidence, credit suisse is set to borrow up to 15 billion francs from the swiss national bank. they have also promised to repurchase debt, can a buyback of up to 3 billion francs of dollar and euro denominated debt. the crisis has sent shockwaves across the global financial system with banks and traders looking to cut counterparty risk. then humans -- ben emons says credit suisse for now is on life support. shares are in full force after the saudi national bank chairman made these comments to bloomberg. >> the answer is absolutely not for many reasons outside the simplest reason, which is regulatory and statutory. we know nine point -- we own 9.8% of the bank. if we own more than 10%, more regulations would kick in rather by the dubai, swiss, or european regulators. tom: that was the saudi nat

the ecb is tightening.olatility and credit spreads tightening financial conditions can sometimes be short-lived. the market would be reassured by 50 tomorrow. guy: he handled that well. alix: just fine. guy: i think you are ok. great to see you. thanks for fielding the questions. fantastic as ever. this is bloomberg. ♪ conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent. guy: let's talk about where european markets are. we've been dominated by one-story. credit suisse. there are other stories. u.k. budget for spring today. the market action in europe around the banking story. credit suisse has been hammered. the bond market is playing the bank story, next. this is bloomberg. ♪ the first time you connected your godaddy website and your s

it is similar to the ecb this is something the fed and ecb has never had. there has been a voluntary way to grow the balance sleets or the -- balance sheets or the ecb is using qe. they are growing that balance sheet. if this goes away, we go back to qt >> you look at it and take a step back. the banks without collusion from the federal reserve and has chucked money to the banks the shorts will be hunting you multiply that and we have seriously large numbers as well. i hear what you are saying very much this could be a whack-a-mole situation credit suisse in europe and silicon valley bank. >> that is the uncertainty everything we see is a classic confidence crisis. a bank run no complex derivatives that we are talking about. no bad debt. no holes to fill this is the market has suddenly lost confidence. depositors particularly. depositors have lost confidence in the banks this is a question how do you restore the confidence it will take time so no one can push around the weak banks if the confidence comes back and you think about jobs if you are living paych

he's got wonderful perspective in the ecb. jon: about 50 minutes away from an ecb decision. counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com tom: bloomberg surveillance. thank you to our team amid this bank crisis. credit suisse has stabilized off the bottom yesterday with some big moves coming back from the opening peak but stabilizing. frc is stabilized at a lower level than what we saw yesterday. ridley getting in the way before lagarde in the next hour is american economic data, and once again, this is a time where there are claims they are going to reverse, we will get back to a less employed america. michael: you are wrong. not this week. 192,000 for initial jobless claims, in the same range. there was a feeling that last week's 200 11,000 was overstating the numbers. you got some people off work in new york schools. we have fallen back from two hundred 11,000 to 192,000. housing is dead. the housing market is obviously affected by these high mortgage rates. 9.8% after a revised drop of 2%

the ecb. we could easily end up in a situation where headline inflation actually significantly is higher -- sorry, is a significantly lower than core inflation. how does the ecb deal with that? it has a communication problem it is going to have to navigate. alix: that doesn't seem like a good set up. let's get to it. joining us now to discuss is ecb reporter yen a rundown joining us in zurich, as well as simon white in london. we heard ecb speakers today giving interviews talking about the fact that they have almost completed their rate-hiking journey, but they are going to stay there and it is going to be sticky in terms of their terminal rate. what do you make of that. with core inflation numbers we have seen today? >> what we are seeing is clearly an inflation rate on the core side which is much too high for the european central bank and policymakers have not been silent in pointing that out. the comments out after the inflation print, but also over the course of the week we have heard from

we have not changed our goal for the ecb. we expect the ecb rates to hike at 3.75%.oday on bloomberg, governor carol wood talked about 4% for the euro area. barclays yesterday was a very dovish central bank and has moved there call for the ecb up to 4% as well. we do have a bit more rate hikes coming in the euro area. it seems the persistence of core inflation is more of a problem in europe than the u.s.. it could be a situation where we could see euro area bonds underperform the u.s. bonds. at the front-end of the u.s. curve, rates almost at 5% already. in the two-year treasuries in this setting, it seems attractive to us i have to say. dani: of course, the mp raising their rate to 4%. what else can they do? how can they get more hawkish? we potentially got an answer yesterday, talking about qt. the large stock of assets acquired under q. week continues to prove significant monetary policy accommodation. it may run counter to our efforts to bring inflation back to our 2% target in a timely manner. so i ask you this. is tightening on its own enough? is she right? ? d

of course th, the ecb will say e are ready to secure that liquidity provision to the banks. they will keep on sticking to the interest rate path i guess it is premature to actually reduce the expectation for the terminal rate here for the euro area because inflation is what they care about and they made it clear they are willing to sacrifice growth for the sake of bringing in inflation having said that , at the same time, we may get reassurance of the liquidity backstop i guess reaction from the markets now by intervention of the swiss national bank and we are seeing a lot of stress getting out of the market again. >> excellent annette, thank you you will join us later on for decision time. ecb decision time today from 14:00 cet. >>> coming up on the show, credit suisse atshares pop after they secure a lifeline from the central bank we will have more after a short brk.ea ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash.

she said the vast majority of ecb may officials work on this move.she did not get any indications as to where they're going from here with the interest rate path did some people interpreting that as meaning the ecb is on pause from this and on the nonetheless, knowing the wider market fluctuation, the banking scare with credit suisse and the u.s., the ecb plowing ahead with 50 basis points was a surprise to many observers. tom: and implications for the broader central banking community as well. more details on that later in the show with enda curran. let's take a look at the key things that markets are watching out for today. at 10:00 a.m., final print of euro area inflation, and tying in the decision-making of the ecb. have an hour later, the bank of russia will deliver its latest rate decision. at 1:15, we are due to get fresh industrial production numbers on the back of ppi, producer prices and payments. softer than expected. at 2:00, the latest university of michigan consumer survey is federal to be released in the u.s.. around the use of the con

yes indeed, the ecb _ about the banking sector. 13; indeed, the ecb decided about the banking sector.ndeed, the ecb decided to go ahead with this, because it is related to inflation the euro zone, so it is inflation the euro zone, so it is inflation that explodes food and energy prices to 5.6% in february, which is a record high, and the ecb is concerned that inflation remains too high, and expected to remain too high for too long according to the latest projections, regarding core inflation in particular, and they were in favour of the decision during the press conference. i during the press conference. i tapped on the fact that some of the language has changed. they've been pushing ahead with rate rises to keep a lid on rising prices, but they have dropped that reference of they have dropped that reference of the need to raise rates significantly going forward, and i know we can get caught up on the language but it is important, isn't it? , y language but it is important, isn't it? y ,, it? yes, absolutely. essentially, they didn't _ it? yes, absolutely. essentially, they didn't pre

i want to know what kind of pressure the ecb has set.s the ecb now setting the tone that perhaps price stability matters more? >> i think they have a most straightforward mandate area in the u.s., price stability is the mandate but for all of them, you have to juggle that with financial stability. it has always been the third part of it for everybody. i think the ecb was probably put on the spot and wanted to make sure they got out the message they have and they don't think the problem is immediately in europe or the euro zone. it was in california first. as things get more difficult, they will change their tune. i think they will all turn around to some degree. this will make banks more cautious about lending and tighten financial conditions but lower terminal rates for pre-much everybody. what they are trying to do is send a clear message on inflation that they are buying themselves some time to see if there is a big problem in europe as well. kriti: today is the one-year anniversary of when the federal reserve began hiking in this cyc

what expecting ecb to do today? we think it is still most _ ecb to do today? it _ ecb to do today? we think it is still most likely it will - ecb to do today? we think it is still most likely it will go - still most likely it will go ahead with the 15 basis point move. they have talked about it so much over the last couple of months that to go back on that would put further strain on their credibility and furthermore, the ecb is behind the curve on inflation so they will publish new forecasts today at the same time as the interest rate decision, but still, even though they would probably adjust inflation forecast down a bit. this year next year will still be above target unlikely even in 2025 slightly too high. furthermore, is some indication that the current inflation forecast would have to be adjusted upwards that all that put together argues that the 50 basis point will indeed happen. are you concerned that if they do go ahead as you predict, this could put more pressure on banks that are exposed right now because of the rising cost of borrowing? {iii now b

anna: we do expect ecb to hike twice more.flag upside risks exactly because of these reasons. if the noise of uncertainty around the financial sector settles down in the coming weeks and inflation continues to surprise to the upside, ecb might still have to deliver another 50 basis point hike or in fact extend the hiking cycle. alix: what happens to growth in that kind of scenario? anna: at this point i think it's hard to say the impact of the latest turbulence in the financial sector on growth. but we have to remember that essentially the transmission mechanism of monetary policy has to affect growth, has to slow down demand and bring inflation lower. of course, more tightening will have more negative impact overall but at this stage it's very tricky to say how much of an impact. alix: can we live in a world where the fed might be done or to being done with its tightening cycle and in the same world the ecb is going to do at least two more 25 point basis hikes and not cut? anna: so our baseline is that the tv will be doing an

i am getting a few lines from the ecb before we bring you in. this is a round of madame lagarde speaking. i will bring those to you shortly. let's start with the inflation picture here. how much more work is needed for the ecb in terms of the level of rates and longevity that they will have to be held at to get inflation to behave? >> i think i agree that inflation tends to be very sticky and it seems to be really difficult to get it under control. my scenario for some time has been that they need to go way beyond the hikes that have been happening. means for me also that we will see a lot more coming and a significant height -- hikes from the ecb in the fed. francine: let me bring you what christine lagarde is saying. 0.5% ecb rate hike is needed in march. that has been telegraphed i think not only daily, may be hourly by her and also the ecb team. she said they must take on measures to take on inflation and possible that they continue rate hikes. when do you think we reach peak rates? does it have to be september or it be later? tatjana: i thi

>> the ecb has said inflation is the main concern. they are very worried that inflation expectations will be priced higher and higher and that is why they started hiking rates when they did. just as a reminder, it takes about 18 months for ecb rates to actually feed through, so they are not fighting the actual inflation rates we have now. they are fighting to make sure inflation expectations do not get raised too high. they will want to do everything they can to stop this. let's see if they actually get there. bhanu: inflation swaps and europe are the same level as the u.s. for the first time since 2008 and 2008 was volatility but basically you have never seen long end inflation expectations and europe converge on the u.s.. the ecb has a serious problem and managing inflation expectations. it is about inflation expectations. guy: yesterday morning, i was talking to senior economist out of europe and they were joking. the u.s. goes to six, ecb goes to four. could that spread be tighter? bhanu: it is possible for a while at least. the l

the challenge potentially for the ecb. the euro just a gain of .2%.itcoin has slumped to the lowest level in two weeks, part of a wider retreat in crypto markets. silvergate capital is reviewing whether it can remain viable. joining us for more is eddie van der walt, i feel like there are so many rumors swirling around. there was another crypto collapse, where does this end? >> that's a really good question. it feels like another day, another crypto collapse. it seems like dominoes keep falling. the question is, just how much contagion we see from all this? we see bitcoin down significantly, something like 5% but that is not that big of move, less than two standard deviations. it feels like the crypto industry has become somewhat immune to these kinds of moves, which is a dangerous position. tom: the expectation is there will be more turmoil. that is basically priced in at this point. this is a bank that was regulated by s.e.c., what does this do to regulators? >> they need to start paying attention. if they haven't had a wake-up call, the fact that t

because of the idea that perhaps the ecb might do more.e've got a comment here, i think we might, from a former boston fed president, one of two former fed officials who have been speaking out, and eric rosengren decidedly saying the federal reserve ought to pause eric was a fed president who was very tuned into the banking system and concerns about the bank system, and what he essentially said is that the federal reserve ought to pause because of financial -- he says, "financial crises create demand destruction banks reduce credit availability, consumers hold off large purchases, businesses defer spending interest rates should pause until the degree of demand destruction can be evaluated." guys, we have several days until the fed has to make this choice here, and i think a big part of it will be determined by how much stress remains in the banking system we'll get a picture of that today at 4:30 this afternoon when the fed releases its weekly balance sheet, and we'll see how much takedown there's been, how much borrowing there's been at t

how is the ecb likely to respond? >> first of all, thanks a lot for having me. it is great to be here particularly after a day like yesterday. we had two important things in here that speak to your question one is, of course, the inflation release itself i highlight the strong corporate and our forecasts carry to the middle of the year before we can actually expect to see the peak we have revised upwards expectation for core inflation from 2023 to 5%. that is a 70 basis points upward revision we also have revised upward headline that is at this stage not the most important part here headline, everybody an fgrees is falling on the back of the energy prices. the other important piece is the accounts released yesterday of the february meeting of the ecb. and you could say -- there was a change risk assessment conveyed with the risk in the short-term which was seen as broadly balanced yesterday's figures could add to that assessment. that means that discussion will flare up in the ecb and essentially a process they are looking at which is not balanced upside with in

maria tadeo is covering the ecb in frankfurt. let's talk but the message that has been delivered, they promised 50 basis points was there but there was no forward guidance. what does that tell us about the certainty with which they ecb is operating? maria: she was very clear at this point it is hard to tell what the path forward will look like. it will be very data dependent. the idea of aggressive forward guidance is essentially gone and we did not get any affect. she also kept repairing -- referring to this which was telling, they kept report -- repeating two lines, off script saying the measures will be taken forward and will focus on the inflation tech -- dynamics, car inflation, transmission of monetary policy and the way that feeds through. she acknowledged that there had been real tensions in the banking sector but tried to have some calmness saying i was there in 2008. a different situation for european banks which was also interesting. she defended the 50 basis point hike which she had calibrated a month ago, said the re

tom: an important day for the ecb with the start of that modest qt, whether or not the ecb steps thatp. let's bring back but cohead of investments at ccla. you are talking about specific names and sectors you like within european equities, i wonder about the vulnerability as we consider a terminal rate of 4%, and quantitative tightening, which sectors are potentially at risk in a higher rate environment? charlotte: it's going to be the fairly obvious places, like real estate which is most sensitive to discount rates. anybody who has a more stretched balance sheet will struggle with the rise in borrowing costs. to an extent, the banks could be the beneficiary of higher rates but there is always a tipping point, because if there are distressed powers, that won't be great for banks. francine: do you buy selective banks, or do you just they away from the -- stay away from the industry? charlotte: the european banking sector has not shown strong earnings growth, we prefer banks in emerging markets, indian banks have a much longer term growth story versus european banks. they have moved up

this is a problem for the ecb. this is an economy that doesn't want to take the medicine from central banks right now. alix: this pairs nicely with lufthansa and the great numbers they had in the potential capacity over pre-pandemic levels. we are getting there. anecdotally i heard that all shopkeepers are looking for a blowout summer. the last big european airline to deliver results. travel is beginning to rebound. >> we are looking forward to a strong demand for 2023. starting at easter and going through the summer. we are focused on the premium classes, first class, business, premium economy. the gradual but healthy opening of china also on the corporate side. when we look at the third quarter, china will play a big role in our increased profitability. we will see losses during the pandemic but we shall receive higher contribution coming from our cargo businesses in the group. we are hiring 1000 people a month. we are stocking up on spare products. we are creating as much stability that is inner control. we will

the ecb saying they would endorse four consecutive 50 basis point hikes.e're pricing in just above 4% at this moment. we saw german two-year yields of the front end of the curve, the highest since 2008. not a lot of traction in the euro. basically flat versus the dollar. the 10 year yield and doing much today. it is all about powell today, what he says in front of congress. that could shake things up but we have to wait for that to happen. equities are climbing after a negative session from more growth stocks yesterday. chinese enterprises are moving -- they were moving the lead. now down .2%. this is a big reversal we have to dig into because we have the shanghai exchange head saying there needs to be better funding access for state owned enterprises in china. that lifted equities over 2% at one point, but now down a quarter of 1%. futures are basically flat as the s&p climbs .2%. let's talk to our reporters from around the world. we will talk about the fed with michelle, while james mcintyre will bring us the latest on the rba decision. james will break

that is part of the ecb problem. pooja: totally. will start setting treasuries because that is what they how those assets. i think because of what we have seen in the oil crisis where barrels of money just goes into treasury whenever there is any threat. i think the key is that if markets start pricing in more and more cuts from the fed, treasuries will be a safe haven asset. that is what the move has been. we have had certain banks actually looking at no hikes from the fed as well as adding in more cuts. we could see that actually continuing in treasuries. guy: can i just ask you about the gilt market? if i was thinking about a central bank already thinking about a pause, it would be the bank of england. do you think what we have just seen mixed at almost a certainty and if so, what does that mean for guild pricing? pooja: i think in the u.k., we are basically tracking the moves in the u.s.. the markets actually put in hikes from the u.s. as they have been reflected in the gilt market. the entire situation in svb -- i think the ris

the ecb, that's one way. i was dovish with respect to the ecb outlook.mated how hawkish they would be prepared to be and how stable the bond market would be, so that's led to introspection on how i have handled incoming information and how stuck i may have been, but in the case of the u.k., it's frustrating, but should not lead to too much change to the process going forward. you continue to use your analysis and play the odds. >> appreciate it. james athey of aberdeen. good morning. ♪ >> keeping you up-to-date with news from around the world, i am lisa mateo. u.s. businesses are set to invest billions of dollars in northern ireland but only if the deal on post brexit trading regulations leads to political stability in the region. british prime minister rishi sunak could use the prospect of international investment to convince northern ireland unionists to back the deal. in northeastern greece, at least 36 people have been killed in a train crash. 85 others have been injured. authorities say a passenger train collided with a freight train just before mid

it is ecb day. the recent banking chaos putting into question whether we will get a 50 basis point hike or another half a point from the european central bank. the focus is firmly on bank stocks. we will see if there is a bit more stability. it feels like not only regulators, s&p, but finra and switzerland have tried to throw everything at it so that there are no more questions about liquidity, no more questions about the facilities. we also heard from the chief executive a credit suisse moments ago putting a statement out saying this shows that they mean business. and of course, this means that they can get away from what happened yesterday, where we saw the share price down 24%. this is a picture over over european futures. futures at the moment are pointing to a higher start. the picture over all is one of, of course, more stability than there was yesterday. if you look at the swiss franc rattling on the news and the volatile trade after a sharp selloff yesterday and then the euro strengthening s

also looking at what the ecb did, the guidance or lack of guidance from the ecb, particularly interestingthey have downplayed the cpi and inflation targets. the fed may well use the opportunity to do something similar, to set the conditions. without saying they're going to go for the pause, they may use inflation guidance as a way to set the groundwork in case they think a pause is warranted after next week's meeting. heidi: so does that mean that we are setting up for more volatility? that it will be meeting by meeting, there will not be much guidance in terms of the months to come, depending on how we seek is playing out? mark: it certainly means around specific data points. you will have a very interesting days, jobs report, cpi numbers, anything that tells us a big picture story about the u.s.. certainly on those particular days, traders will have to make their own interpretations if they are not getting a narrative from the central banks themselves. in between, people will be watching the stock market and banking sector to try to give them more information. also looking at the credit

mark: does a restriction with the ecb concern you? is there risk of a policy misstep from the ecb? patrick: yes, every session historically has been created by banks that got too panicky towards the end of the cycle and they thought they had more to do with the economy was already rolling over. if you add another four 50 basis point hikes that would ensure a recession. that is something to worry about . most recessions are caused by central banks facing what previous mistakes they made. francine: are you worried that companies are giving so much back to shareholders in dividends or share buybacks but not investing enough? they are just delaying the problem two or three years? patrick: investors have the ability to put that to work in other places where they are getting higher returns on capital. there are good places to deploy the capital and they should give it to shareholders. that is a way to increase reward shareholders in forced cash flow to them. investors who want to sell and create cash meet that decision for themselves. you are seeing more allocations. francine: patrick, t

that is something the ecb will be focused on.ces does the majority of the employment in the euro zone. if that is looking strong, employment will be stronger and wages will be strong and inflation stronger. they will be focused on that and that will bolster what we have seen recently. dani: this answers it, but what is the ecb using to back its argument to recalibrate its policy? jamie: lagarde has been clear that they are focusing on a few things. one is underlying inflation, core inflation. the other is financial stability, and the other is inflation forecasts. for the near term path, what matters is core inflation. we are expecting it to stay very elevated all the way through the summer, which mean the hawks will have plenty of room to push their agenda of higher interest rates. dani: is lagarde right to insist there is no trade-off between price stability and financial stability? jamie: we've heard her say it quite a few times now and she's right up to a point. when we are talking about liquidity problems in the banking secto

ecb policy influx. ken griffin tells the ft that the government has intervened to protect these depositors for svb. regional bank stocks are now an incredible bargain. let's check in on these markets. what a historic day for the bond markets of the u.s. and in particular you saw it moves across the debt space in the u.s. and europe and now seeing it pronounced in jgb's as well. the moves yesterday, the front end of the u.s. treasury curve, the two-year moving by 61 basis points lower. that is a movie had not seen since the early 1980's. some of that is rebounding in the session today. the eyes of investors now switching to what is happening on the inflation print and to what extent that makes a complicated picture even more complex. across the benchmark, the msci asia pacific index loss is now up to percent. that is particularly pronounced with the lenders in the financial sector, thanks under pressure in asia. the nikkei down more than 2%. the biggest losers are those main financial banking names in ja

this is poor for the rest of germany and enforces that 4% peak message for the ecb.: highest level since 2011 yesterday. again, there will be this vortex in the bond market this morning. bloomberg markets europe is up next. ♪ anna: good morning, welcome to "bloomberg markets: europe"

>> some time in the summertime >> the ecb will cut by the summer >> i think so. you have to be bold. because inflation dynamics is fading away quickly. as i said, we will see producer prices first coming down rapidly. 2% we will reach in june maybe or july. producer prices in germany and europe this gives the signal there is nothing in the bottle for the next month or so there is no inflation dynamics it will be difficult for the ecb to defend the course which i think is totally wrong because it was all temporary i think it will change quickly because the situation is really fragile. the real economy is fragile. the ecb will be under enormous pressure imagine the headline that says inflation on the consumer level at 4%. producer level at 2% who could say this is a danger for the next year? nobody >> nobody. you think the energy crisis will not come back. you learned diverse sources. we will not have resumption of the energy crisis? >> the energy crisis, i don't know what it is. the energy crisis of 2022 and 2021 is over the prices are back to normal. the gas pric

war because of the ecb tomorrow.a: i think the issue of pre-committing have really become quite clear as a result of what happened. we expect they will be able to maintain the commitment and hike based on what's planned. and something where perhaps the data dependency and stressing data dependency is likely to be very much at the forefront of the messaging we got. the fed may do something similar. certainly for the ecb, data dependency is something we emphasize a lot. doing even more going forward. francine: big day for the u.k.. what are we expecting from the chancellor. >> it's in a better position than he expected to be at this point. so we have already had news this morning that indeed the energy price guarantee will be extended for the quarter. less expensive than it had looked beforehand. and the chance of bringing inflation down earlier than previously thought. there's also help for child care that's been announced. by and large it's just the big tax cuts that some had been hoping for clearly aren't could be c

the ecb still being data dependent. now, the market is starting to anticipate whether or not we will have the higher for longer mantra coming in from the ecb. we see that through the rates market. we are seeing a lot more flattening, or at least i am anticipating some more flattening ahead as we address on what the ecb might be doing next. kailey: thank you for joining us for what could be a huge week for markets around the world. we'll talk more about the risk of a slowing economy by china specifically over the weekend that guy was speaking out a few minutes ago. we'll get some more perspective on macro strategist at jp morgan strategists coming up next. this is bloomberg. introducing j.p. morgan personal advisors. hey david! connect with an advisor to create your personalized plan. let's find the right investments for your goals. okay, great. j.p. morgan wealth management. conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curios

where does the ecb go from here and what happens to the ecb if the fed ultimately pauses the rate hiking path >> the ecb i think, is in that sweet spot in the sense by lagging a little bit and having that situation where they come after what the fed might do, that is a privilege of understanding and seeing what the fed might be doing i think they are a -- the little bit for the fed and ecb. they are in situation where fighting inflation is paramount. they will be careful making decisions that contradict that mandate. again, here is the situation which is trying to understand how fast they can change the monetary policy and what the implications are as you said with higher rates for financials for banks is good news in 2022, we already had rate hikes. financials and banks have done very well. it is more situation, in my opinion, that svb was in a fairly peculiar specific instance that at the moment, it is hard to tell whether it will have more are severe re repercussions as a whole >> would you buy u.s. or european banks today >> at the moment, i think european banks are fairly cheap. >>

this complicates the ecb's task.ank president told bloomberg that it is not clear that the central banks march hike clearly won't be the last in this cycle. >> it seems to be the case that inflation is very stubborn. and that is bringing me to the point that monetary policy has to be more stubborn, not fair to speculate what is the sequence beyond march. it looks like that 50 basis points for the march maintain very necessary. i believe that significant rate hikes beyond march are necessary. we took that decision in the last meeting to start the production in the app. 15 billion every month. i believe that could be more or less, there is a good way to get this into the market, the market will understand why this is necessary. from july on, we need more than 15 billion. i think this is one of the things that i believe is of utmost importance. manus: let's get to our bloomberg western europe economy team. we have zoÉ here. there is a lot to unpack there. a more stubborn attitude towards rates, i am drawn to that. we wi

larry summers applauding the response from christine lagarde of the ecb.a tadeo, thank you very much about that important decision from the european central bank and the lack of guidance going forward. let's bring back norman villamin . you looked at the share price action today. credit suisse down .3% which is nothing compared to drops in recent days. it rallied yesterday but not offsetting the downward pressure more broadly. the banking sector in europe are rallying more than 2% so a clear divergence there. what is your take? you are well versed in a swiss banking system. can credit suisse weathered the storm? norman: i think the lens that i'm looking at this through is drawing upon the situation of the royal bank of scotland in the u.k. almost a decade and a half ago. they will weather it, but it's going to take a long time to work it through, and it may take more than this backstop that came in yesterday just as was the case with the royal bank of scotland many years ago. that is what we should expect out of the credit suisse situation. it will take a

tom: listening to the ecb president christine lagarde speaking at the ecb event in frankfurt.an watch this on the terminal. we will bring that to you for live coverage. really the key message from this is they are nowhere near being convinced inflation has been addressed across the eurozone. saying there's no evidence underlying inflation is turning down. saying they must and will bring down inflation to target. they say they've communicated a clear upward path for rates. there's no trade-off between price and financial stability. the euro is gaining. yields are up on german debt. euro trading at 107. that's it for the european market open. stay with us. this is bloomberg. ♪ >> the fed as we know has interest-rate side elevated level. i do not think they should -- >> it is too soon to expect that the fed will throw in the towel, so to speak on their inflation fighting. >> if the fed is hawkish, it will probably mean higher real yields. >> you do not want

can the ecb shred the core. susannah is next. this is bloomberg. ♪ ♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family or passing down the family business or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? >> the economy is quite resilient. we haven't seen a recession despite the forecast of recession. the economy is stronger than expected. interest rates have to be higher for longer. and there's no free lunch. to bring inflation down it's not a story of experience of inflation coming down without some cost to be paid. guy: that was the socgen chairman, formerly of the ecb in an exquisite interview with bloomberg television. it takes us back to the question of the day, can the ecb shred the core strength that it's seeing right now? how higher interest rates got after going. what is that mean for m

she explained the ecb's thinking. determined to return to 2% inflation target over the medium term and given the current ecb inflation projections, which has inflation still above 2% until 2025, we think that the ecb will still go ahead with a couple of smaller hikes, 25 basis points, in both may and june. the bank reiterated that it will evaluate the situation, how it goes, with a meeting by meeting approach, on the basis of the data they have available in terms of inflation outlook, in terms of dynamics of core inflation and also the strength of monetary policy transmissions. now as we've been saying one of the biggest headaches for the ecb is the turmoil in the banking sector — with the problems facing credit suisse currently at the fore. but the problems began with last week's collapse of the silicon valley bank in the us. prompting words of calm today from the treasury secretary janet yellen. i can reassure the members of the committee that our banking system is sound and that americans can feel confident that th

that being said, it would be a shock and a lot of ways if the ecb was to hold rates.ven be particularly likely they were only go 25. they have a very strong inflation problem and they have expressed a lot of concerns was that there is a very good chance they go ahead and hike 50 basis points, which is what they said they would do. in a lot of ways -- i find myself saying this at the moment a lot about central banks -- it will depend on what is the language? how much concern do they express, saying yes, we definitely need to hike by 25 or 50 because we are worried about inflation, but we are very concerned about this growing set of crises and the banking sector, and if this was to get worse, then that might give us grounds for a pause? or, do they come out and say look, this is just part of breaking a few eggs to make the omelette. haslinda: interesting scenario. interesting anecdote. you talk about how there are lots of questions to be asked and lots of uncertainty, we are seeing that playing out in the bond market. yields still volatile. have we seen the worst? garfi

the ecb at the same time seems like the last hawk left.ou have christine lagarde talking about their steadfast results fighting inflation above all else. considering that the fed has taken may a different tone, why wouldn't you want to bet on the euro right now? tatiana: i think in particular because europe has a lot of issues it never really solved from an economic point of view. they have not gone away overnight. just because now, for the moment, the ecb is sounding a little more hawkish than the fed to me doesn't remain at the end of the day they will be more hawkish. look at this mountain of public debt many countries in the european monetary union have. i think it will be difficult for the ecb to remain more hawkish than the fed for a long time, particularly once the economic reality is catching up with them. i think it's a difficult situation, and how they communicate, but i wouldn't bet too much on the ecb. dani: what stops the ecb from being as hawkish as they say they want to be? tatiana: simply that you have a lot of public debt

we have to give the ecb credit, they started from 50 basis points below zero. there is still some room for them to go. alix: if you find my t-shirt, send it over. i missing it. to get more on how today's economic data affects the markets, it was a crazy quarter. our next guest is with franklin templeton. it was definitely buying the dip for the first quarter in equity. is that going to work next quarter? >> i don't think so. i think gravity exist and as we have seen margin pressures further sound the alarm, there's going to be more than understanding of where we are. we're are hearing a lot of stories about folks who are bearish and the reality is when you have the nasdaq closing q1 at 20%, it's hard to square that with the market action. i think some of that froth is going to come off in the next quarter and later throughout the year. >> let's put it back in contacts with how we started on the inflation front. the market today feeling encouraged about inflation data. mike mckee talking about his interview with susan collins and her message was the fed has to s

today european central bank weighs in ecb decision on interest rates happening this morning about an hour 9:15 a.m. eastern stay here for the latest ecb meeting as worrying over banking sector continue to mount, credit suisse stock is up better than 20% in premarket, after swiss national bank announced 54 billion dollars in support for the lender take a look at stock after a sell-off this week regional banks down extending yesterday's losses, many hitting new lows right now as worries continue to escalate, about the banks, broader markets mixed take a look, dow industrials right now lower by 86 s&p 500 lower by 5 3/4 nasdaq a higher by 37. stocks closed mixed yesterday investors rat oeld by contagion fears after claens silicon valley bank signature worries over credit suisse stabilization see if swiss banks efforts are enough. ahead of federal reserve meeting tuesday next week look where we stand the two-year and 10-year, today, marks exactly one year since the fed started raising interest rates, the two-year up 4 basis points right now 3.936% 10-year down 1 1/2 basis points, 3.44%,

the ecb governing council member.asis points more this year, potentially 450 basis point rate hikes, how outlandish is this? ian: he is probably at the more hawkish end of members. the reality is that the ecb still has inflation problems to deal with. everyone is aware that core inflation is coming down slower than the fed would like it, that is not the case in europe. core inflation moves higher. the way the mix is likely to be calculated will be continuing to move higher. the ecb who were behind the curve and were slower to the party of rate hiking is playing catch-up. it feels like they will have to go harder, although we need to be clear that this is probably the top end of expectations. lisa: extreme top end and this comes at a time where so many people have been bullish in europe. they have seen the surprise of a warmer than expected winter with more growth in tandem with inflation. do you push back against that? iain: i think that is right. there were big concerns about europe last summer with the gas problems

kriti: let's take it across the atlantic to the ecb. sonali basak was just talking about the commentary we might hear off of the news coming out of credit suisse. what could change the game from the european perspective? joe: again, i think the bias is to tighten. which is always a tricky to walk, to separate as best you can liquidity concerns in the market from solvency ones because solvency can ultimately lead to getting more at the heart of economic growth and price stability and all those things that central banks are using the policy rate for. so, when it is not clear, i can hear reasonable people disagree about pausing for a time until you can get a better picture, but i still think the bias is towards normalizing policy because you have a labor market that is still too tight and inflation too high. i think market conditions would have to get worse, and it would be the reasons why they are getting worse that would be informative for policymakers. kriti: let's bring it back to data we have gotten the last couple of days. i want to

in the ecb, schnabel was talking about it saying it was not a problem. take a listen. >> at the moment, there is a lot of uncertainty about what financial turbulence means, for us in the euro area. overall i would say it looks that we have somewhat more a problem then we're seeing in the u.s. at least so far, it looks that, as if our banks were actually quite resilient. dani: nabila, she says european banks when it comes to deposits are stable and compared it to the u.s., how bad is it in the u.s.? >> in the u.s., we have seen the first wave where people move their deposits from the smaller banks to big banks because they were concerned about the solvency of smaller banks. now we're seeing the second wave where people are moving money out of banks altogether into money market funds. in march, a record amount has flowed out to these funds, some $300 billion, a lot of money. these funds house safe assets, particularly government bonds, that is where the flows have mostly gone to. funds that house u.s. treasuries. the rates they are paying are quite juicy a

later this morning, ecb president will brief them on the economic and financial situation.o maria tadeo. what are we expecting? maria: what a flurry of communications from the european central bank. if my memory serves right, this is the fourth time or would be the fourth time in a week that we hear from the head of the european central bank. thursday, decision day. monday, the credits we steal. then you had her on wednesday at the conference in frankfurt and today, she is back at it in brussels. a lot of this has to do with sending this message of impotence, but also to politicians and lawmakers but also what hammer down what has been the standard from the european central bank for a week. this idea that financial stability and price stability are compatible. they can handle both at the same time. you know very well that means the hikes will continue. you'll also hear a lot of ecb voices saying we need to start thinking when the market becomes more stable, about what happens. the sense of direction and travel is very clear. the other issue i want to point out, it will be i

one ecb of the shore earlier this morning talking a 4% rate over the ecb which is absolutely unreal. lisa a: it is not just short-term but longer-term. people are gaining out what longer inflation looks like at a time when we have not seen anything like this in decades. jonathan: i know we have to get through this morning but saweetie of just a flavor of monday? this weekend, on monday, it will not be george clooney but he is the george clooney of the paddock. kristin warner. tom: jonathan ferro will lead this interview because lisa and i did not know what we are talking about. lisa a: i am going to be watching drive to survive all this weekend. [laughter] tom: the guy from canada is trying to buy the sport. jonathan: he is going to sound like an expert, i hope anyway. christian horner, red bull. 6:30 eastern time. lisa m: keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. fed policy officials are warning they may need to raise rates to a higher peak. this said they watched inflation data cool out of after being stronger than january. raphae

i don't think this will make a whole lot of difference for the ecb's calculus. tom: a policy rate of 4.7% is ven ram's call, let's switch to the u.s., pce inflation is out today. we know the importance that data set gets from powell and company, it is expected to show inflation remains pretty sticky. if it is lower than the estimates does it change the calculation for the fed at this stage? >> it's a pretty similar picture in the u.s., tom. we're expecting a print that is slower. but the way to juxtapose that is to look at pce projections made in the fed's summary of economic projections we got two weeks ago. that showed they are targeting for this year a range of 30.6% on core pce. and 4.7% is nowhere in the range of 3.6 percent. they need to parcel labor market a bit more. the labor market is a bit too tight. they need to align that in terms of the demand and supply come that we see in the economy. which is why given the relative calm we have seen in markets the past couple of days this week, we have heard from james bullard, susan collins, and tom harkin all

head of the ecb this week. at this gaba lower across the asia-pacific read japan is in focus. 10 year basis points on a 10 year jgb. plenty more ahead. this is bloomberg. ♪ conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent. 92% still active? seems high. seriously? it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. start a 30-day home trial today. terms apply. was also the first time you heard of a town named dinosaur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com rishaad: let's have a look at the business flash headlines. the new owne

we see the ecb hike rates as many have perhaps not anticipated the 50 point basis hike move. the movement into this particular asset to, despite volatility in the u.s. dollar we are up 16% on bitcoin. dig in to some of the micro moves. ed: microsoft is integrating ai into the market suite. it was a prerecorded presentation. social media stocks also fishing higher on the bloomberg report. the u.s. is telling, sell your stake in tiktok. the banking sector is a dynamic. we look at first republican. we are trading down to norm percent for a record low. -- 25% for a record low. caroline: keep a close eye on the banking repercussions. questions around the stability of regional banks like first republic and the file of svb and signature bank. janet yellen still there on capitol hill taking questions. we have been hearing tough focus on the banking fallout. let's go to kailey leinz. what has been at stake? kailey: she has not blamed the regulators, but she has made a point to say supervision and regulation needs to be revisited and look at. we were hearing the exchange between the se