lagarde: yes. extremely important that people understand what we are doing. a lot has to do with trust. if somebody talks to you in a completely obscure language, how are you going to trust that person? to me, it is critically important to agree with the governing council members that we will communicate in a more understandable, he and a clearer and simpler way. -- in a clearer and simpler way. after each governing council, we implement a monetary policy statement where we commit to keeping sentences short, to have one idea in a sentence, to make sure the words that we use are understandable by you, of course, but a normal person as well. we measure that and try to stick to those principles and we will be held accountable. david: do you think your ability to do that, and the federal reserve chairman, jay powell, is interested in that as well -- both of you are trained as lawyers, and i am trained as a lawyer too -- do you think there is a future for central bankers to be lawyers, and there is some

lagarde: yeah. this has been the case in europe as well, where inequalities in terms of opportunities, in terms of facilities, have been aggravated and probably exacerbated by covid-19 for the reasons you mentioned. those people most had by the pandemic were women, young people, people on fixed contracts, and those were more remote from work than the others. if you look at those who lost their jobs, it is predominantly those women and young people in particular, in disproportionate amounts relative to the others. ♪ david: as you look at the european economy today, what would you say its single biggest challenge is and single biggest opportunity is? ms. lagarde: the challenge is to deliver. it is to implement. there are good intentions, but implementation sometimes is hard. the second difficult area that will need to be tackled is the issue of inequality, because covid-19 has aggravated inequalities. the third is climate change, where we will have to transition probably faster than we think, which wi

lagarde: yes they do actually.onized swimming, if each individual is brilliant, it is great, but if you don't work together, you will not win the gold medal. working as a team matters, and i tried and will try to continue doing so. ♪ announcer: the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. announcer: this program is a paid advertisement from the u.s. money reserve, a company not affiliated with the u.s. government or u.s. mint. philip n. dheil is the president and spokesperson for the company. the markets for coins and bullion are unregulated. prices can rise or fall so buying these items carries some risks. past performance of a coin or the market cannot predict future performance. views and opinions expressed on this program are those of the advertiser and not the views of this station or network, its management or ownership. announcer: gold. it

lagarde: thank you so much for your questions.ld preface my response to your first question with a quote, which is the lady is not tapering. what we are doing is recalibrating pepp, which is the pandemic emergency purchase program, and we are recalibrating just as we did in december and march. we are doing that on the basis of framework, which is a joint assessment. we look at the financing conditions and we concluded they remain favorable and we do that on the basis of the inflation outlook. as you rightly pointed out, our inflation outlook has been upgraded and it has been the case for 2021, 2022 come and to a lesser extent in 2023. across the board you have improvement on the inflation numbers for the horizon we look at. we also look at other indicators. on those accounts there has been a significant improvement on inflation numbers, both for 2022 and 2023. on the basis of that joint assessment and because we know we need to keep favorable financing conditions, this is the commitment we have and what we agreed in december. that

or do you agree with christine lagarde?are not discussing ending the program in response to financial conditions, therefore it is not tapering. or do you say the name does not matter? give us your thoughts. >> the last option is the closest to our perspective. as equity investors, we know that eventually tapering will come. interest rates will rise. from that perspective, that is what we need to think about. we need investors to think about what drives long-term value of companies rather than short-term moves in share prices. the debate is when does tapering begin, whether it is in europe or the u.s.? o$=■let's get improving a more stable global economy. that will go along with tapering and higher interest rates to some extent. those are facts that we know will come in time. the specific timing is not so important. just understanding the way they are going to impact specific companies and their businesses from our perspectives is what's going to impact the valuation. >> i know you think europe is one of your favorite overwe

it is a shift christine lagarde says does not amount to a taper.he spoke after the central bank's policy decision. >> the rebound phase in the recovery of the euro area economy is increasingly advanced. inflation has increased to 3% in august. we expect inflation to rise further this autumn, but to decline next year. the new projections for the annual inflation are at 2.2% in 2021. we see the risks to the economic outlook is broadly balanced. what we are doing is recalibrating pep. tom: still with us is tatjana greil castro, co-head of public markets / portfolio manager, muzinich & co. thank you for staying with us. what for you was the standout point from this meeting, from the decision, and from christine lagarde? tatjana: two things stood out. she said she wants to keep favorable financial market conditions, and what that implies really is with less supply, the sufferings they are issuing are at a new level. we continue to see fiscal policy , this is working together with monetary policy, and we should not forget draghi was always talking about

eurozone bonds rallying as christine lagarde says the ecb pepp program will continue to buy bonds at moderately slower pace. we will discuss that in just a moment. easyjet slides as it signals it will raise $2 billion in stock and debt. the european carrier also rejecting an offer from rival whiz. -- from rival wizz. taylor: -- my goal for the next hour. let's get a gold here in the market check on where we are in these markets. sort of seeing an improvement here on the tape, 4523, and an increase in this reflationary trade with the russell 2000 as well. that has really seen improvement in the last hour and a half. you are seeing bonds catch a bit of a bid. coming up at want to talk p.m. on a 30 year bond auction. we had a successful 10 year bond auction yesterday, but this is a very stable 1.9 5%. crude markets are turning around a little bit. you have been nailing this about the energy markets all week. china releasing some of their national reserves, all in an effort to help combat some of the rising raw material prices we have been seeing. we saw that in the ppi numbers with them

peer-to-peer conversations with christine lagarde.w david rubenstein was channeling lisa abramowicz and he said i'm looking at yields. lisa: i missed that part of the interview. tom: lisa's looking at yields and the answer is rubenstein went to the inflation-adjusted yield, nominal yield, inflation up, ever greater, lower yields. this is not in the textbooks. lisa: it's not. why do you want to get negative real yields, it doesn't make any sense? yet, here we are. even as we see inflation with a sub -1% real yield on the 10 year, can this dynamic change when you have the bond purchases outstripping the entirety of what the u.s. government is selling? think of that for a second. tom: your kids can do it, negative german yields, minus growing inflation is a giant norm is yield. christine lagarde has the real german tenure well over standard deviation. that is a normal. what is normal? stay with us through the day. this is bloomberg. ♪ and there you have it— -woah. wireless on the most reliable network nationwide. wow! -big deal! ...we ge

lagarde: an unusual recession followed by an unusual recovery.unusual recovery because it is the steepest recovery we have seen in the euro area since 1975. by the end of 2021 the euro area will be back to pre-pandemic levels and we will move back to the trend that it was on before the pandemic hit us. this recovery is very unusual, very rapid. i would say it has been largely attributable to the rapid vaccination campaign, because now over 70% of the population over the age of 12 is fully vaccinated. it is attributable to the removal of the containment and the lockdown measures that have been virtually removed in all euro area except for some social distance protection such as the wearing of masks. it has not stopped or reduced the activity, both in manufacturing and in services, which have picked up significantly. we have seen interesting reaction on the part of those who suddenly were released in the sense that we have seen a pickup of purchases of goods, which was very unusual, and of course the services has been seriously accelerating. we are

christine lagarde insists it's not tapering. china's unprecedented intervention in oil market tapping into reserves the first time to lower prices. paul: let's talk a little bit more about that he be decision. christine lagarde slowing the pace of purchases to 80 billion euros per month. very clear it's not a taper. it is not a taper. madam lagarde saying the lady is not tapering. this is called a recalibration. we will donate -- debate the semantics of that, shall we? shery: given that we continue to see these signals from whether it is the fed or boe that they start to -- want to start unwinding stimulus measures, not surprising given we see inflationary pressures. china had to intervene in oil markets for the first time ever, explicitly saying they wanted to lower prices of raw materials, not surprising given the ppi number we got overnight, right? paul: we had a bit of good news in australia as well. we got the roadmap on the thursday about what the easing of the lockdown here is going to look like. october 18 is the date se

i have to admit, this is where lagarde gets tested at the press conference. does she want to be assertive? i have not observed that. jonathan: the risk today, a reduction in the pace of

lagarde in this hour with her comments on paper,

if you move on to christine lagarde, that would be the white line. she, along with andrew bailey, their inflation rates have gone from around the target of 2%, they are both at 3% or a little bit above. lagarde saying those bottlenecks are accelerating in some areas, and we are monitoring how fast it is going to fade. andrew bailey i think a little more circumspect, saying they are watching inflation expectations. they are watching at the bank of england the second round inflation effect of these shortages. they are going to see how that feeds through. however, japan with that yellow-line inflation still negative, he said demand is surging so fast, supply cannot follow, but is probably hosting it will actually help boost inflation. one more thing we have to throw in what he said when talking about china's potential bubble or the bubble in real estate, very different, the speculative buying by real estate investors and homeowners, drove up japan prices. he does not see this as widespread in china. he does not think it will have the same kind of severe

here's the ecb's christine lagarde earlier. ms.agarde: the bond space in the recovering euro area economy is increasingly advanced. output is expected to exceed its pre-pandemic level by the end of this year. with more than 70% of european adults fully vaccinated, the economy has largely reopened, allowing consumers to spend more and companies to increase production. taylor: joining us with the latest, mario taddeo, who is outside the ecb headquarters in frankfurt. i am curious, from your perspective, does this feel like a stronger economic story or an inflationary story? maria: i think for me, it is still a story about a very dovish ecb. going into this meeting, we spent two weeks talking about the hawks on the council, all of them saying we worry so much about inflation pressure taking hold in the european union. but if you look at the press conference from christine lagarde, she sounded as dovish as in every meeting and the pandemic. when it comes to inflation, she was cleared with knowledge we are seeing prices climb, but conti

i have to admit, this is where lagarde gets tested at the press conference. does she want to be assertive? i have not observed that. jonathan: the risk today, a reduction in the pace of purchases in the program with any sale about the degree of support that goes beyond next year. you can call it tape or if you want to, but you have to be clear that a tapered from the ecb could be different from a taper from the federal reserve. tom: i will go with that as well. with the pandemic and the uncertainty out there, every central bank wins by delay. i don't think the ecb is any different. jonathan: every line in that news conference will be interrogated by everybody. lisa: christine lagarde does not always delivered in that type of circumstance. i love the idea that we are talking about a dovish taper. that is the new code. exactly. ubs talking about the doorway she ecb taper. jonathan: we have to be clear about this. they came out with the size of the envelope, 1.5 euros and a loose guidance as well march of next year. that is different to the federal reserve. you

christine lagarde said yes, bottlenecks are accelerating in some areas. the ecb is monitoring it. again, betting on transitory, that number up about 3%. their spike is shorter, only a couple of months. now we move on to the purple line. that is the u.k. they are watching second round of facts. you can see the yellow line, japanese and nation, still weak, but he says demand is surging so fast supply cannot follow in japan. he expects this to be a bit prolonged. you look at numbers, you tell me. temporary or transit -- no one knows for sure? -- temporary or transit? no one knows for sure. shery: he was sort of downplaying the risk of a crisis from evergrande. another day, another headline with this company. what's the latest? >> more evidence that offshore bondholders are less of a priority. we are getting news, at least from four bondholders who have talked to bloomberg news on condition of anonymity that they as of last night had not been paid on another dollar bond coupon that was due yesterday to the tune of $45.2 million on top of the 83.5 million dollar coupon payment that was

jonathan: lagarde indicated that. tom: they will wait for the data. jonathan: do you think it will make a matter for the ecb hawks? tom: help me here. you hang on to every word of that conference and i'm looking at red sox baseball and i thought the whole thing yesterday was bizarre. it is a new level of splitting of hairs because of the political cards lagarde has been dealt. jonathan: they have reduce the pace of purchases but forecasting inflation way below target in 2023. so you either have advocacy problem, or you've got a credibility problem or both. that question wasn't asked to aggressively in the news conference. i think the ecb president got a little bit of a pass. tom: how far off is that that we will see on september 22 question -- 22nd? massive fiscal stimulus. david page has gdp coming down. i think it is data dependent. jonathan: what did the governor say? the market is pricing narrow outcomes. tom: when you get as old as me, you don't read anymore. kailey leinz reads everything and she brought me an essay and dominic wilson is dead on

i do like christine lagarde's very precise direction.hey don't believe it is transitory. 30 basis points. 25 basis points in the last week. herein lies the point. bank of america encapsulated it all for me. where are we in this stage of interest rate grief? the first state is recognizing the driver is good. the second stage is frightening. bank of america saying we are in the second stage. that has a lot of issues for credit. good morning. dani: good morning. your bond markets might be repricing but let me tell you what's happening on wall street. people are getting ready for a repricing in the equity market. it has a lot to do with what you just showed us. these yields taking higher. we've seen the effect on big tech. i don't think there's been a day where we haven't had our inboxes flooded with these types of calls from strategists. yesterday, a survey of clients shows a 20% fall is more likely than a 20% gain by years end. or from rbc, saying that soft positioning has elevated and they are vulnerable to macro shocks. bonds and equitie

we will hear from christine lagarde. the key policy panel to watch for is tomorrow afternoon, christine lagarde, powell, bailey, and kuroda. coming up, we will stick with the central bank theme. we will discuss more about the resignation of these two fed chiefs. we had the stock trading scandal. we have questions around health as well. what does this all mean for u.s. monetary policy? we will discuss that next. this is bloomberg. ♪ >> employment is still a bit short of the mark on what i consider to be substantial further progress, but progress continues and i hope it may soon meet that mark. >> i think it is clear that we made potential further progress in achieving our inflation goal and there has been good progress with maximum employment. assuming the economy continues to improve, the moderation in pace and asset purchases will be warranted. manus: some of the fed officials with a hawkish message on the taper plans. comments sent yields spiking a little bit higher. levels we have not seen since 2020. but still the ch

no doubt they would be goodreads behind christine lagarde.tudents sank, i need to read that. the bank of england has warned that the eu -- has warned of the eu over its post-brexit plans on clearinghouses. since the u.k.'s withdraw from the bloc, trillions of dollars of trading have already left london because of regulatory hurdles. here is andrew bailey. >> i think that if they want to take the decision to break the system up, then it is important to consider the risks to financial stability that come with fragmentation. this is not a sort of an idle thing coming from the central bank. this is a real threat. we put central clearing at the heart of the system for a reason. >> i was going to say, you conducted this interview, know andrew bailey pretty well. the need for ensuring the right regulatory approach. francine: the conversation was mainly on clearinghouses, the most boring thing in the world, unless you no longer have them in london, which means bankers could leave and throws -- in throes. i mean, i love this kind of stuff. it's all ab

it will be interesting how christine lagarde deals with this.at is improving, but we see episodes of price increase and this is not something that is systemically -- until now that has been the official light of the ecb in council meetings. anna: the market will be focused on the message around asset personages, -- purchases, went to taper, were not to taper. -- when to taper, when not to taper. maria: it was significantly higher paired that was the line of the market and investors before. they use that as a guidance to determine how much the european central banks will be buying. we assume is it -- it is about 80 billion. you could argue they are going for less. the tricky point here, the officials i have been speaking with also point to that, you do not want to make it look like a taper. the ecb will not stop there stimulus program, they are tweaking. this is not a taper, this is not a situation that is comparable with the fed. europe and that united states are on different paths when it comes to the policy at this point. anna: thank you very

we will get more clarity from madame lagarde at that meeting tomorrow. council is meeting tomorrow, of course, to discuss the possibility of reducing the asset purchase program that has been in place since the start of the pandemic. some policymakers suggest the central bank should start discussing the transition from emergency stimulus to help meet its inflation goals. consumer prices in the eurozone rose 3% in august, the most in a decadent, and above the -- in a decade, and above the 2% ecb target. we are pleased to be joined by jean-claude trichet, former president the ecb. thank you for joining us this morning. i hope your week is going well. is now the appropriate moment for the ecb to start reducing those bond purchases? jean-claude: first of all, thank you for inviting. to respond to your question, i would say we are in a different universe, it seems to me, in the u.s. and in europe. in the u.s., you had a commitment to purchase exactly the same amount every month, and this is a clear-cut commitment. tapering means something. in europe, there is

we will hear from christine lagarde later. certainly, the implications for monetary policy as well as the national government. francine: it will be difficult for her to ignore this. there was a beautiful piece of research by bloomberg and they were saying that the colder than normal temperatures could leave europe with almost no natural gas and it gets much worse from here. there's a number of factors. you look at angela merkel and it all has to do with nord stream 2. if you look at energy securities for europe, it is that relationship with russia which at the moment is not doing great because there's just not enough russian gas coming through. it's not going to be great for a lot of energy producers and i'm sure that they will move at the open. tom: certainly want to watch as these prices continue to go up across europe and the challenges that poses across the corporate space but as well for europe's policymakers. coming up, we will discuss more on what the resignation of the two fed chiefs means in terms of stock trading. th

and not a structural or permanent one, it should be easy for christine lagarde to say the same.es not mean they will not start discussing their own tapering, but if they admit they have the timing of the tapering, they will condition that and qualify it with their own transitory inflation. jon: why aren't they embracing it? they have been trying to generate it. >> that speaks to my view that by saying that it is transitory is to suggest the market should not be concerned the ecb will normalize policy in the face of this inflation. the market will read that to mean there is a partial embrace of the situation. to the extent it is cost driven inflation and not demand driven inflation, there was a modicum of worry at one should have. costs go up on these supply chain issues. that is the inflation we do not want to see. i don't think she is ready to say this is not the type of inflation they don't want to see. they change their own inflation mandate as well to being symmetric. they continue to urge on this inflation. jon: adam poston wrote this. they talk about how central banks shou

christine lagarde invoking her saying the lady isn't tapering. david: kathleen hays, our economic and policy editor joins us. taper or isn't it? kathleen: at the press conference after the ecb, european central bank put out its policy decision and said they would slow down the rate of bond purchases, christine lagarde, in her first prepared remarks said this about what they are doing and why. >> favorable financing conditions can be maintained with a moderately lower pace of asset purchases under the pandemic emergency purchase program done in the previous two quarters. the lady isn't tapering. because what we are doing is recalibrating, which i will remind you is the pandemic emergency purchase program. kathleen: she went out of her way to say not tapering, when she was asked by reporters, if this was the beginning of tapering, she did say they will have a moderately lower rate of purchases. it is going to be a target now, a range from $60 billion to $70 billion of bonds and month. they will still get the program growing through march of 2022 fo

let's just move and have a look at christine lagarde. has also been the latest to chime in on the crypto space. the european central bank president saying they remain highly speculative. christine: crypto's are not currencies. they are highly speculative assets that claim their fame as currencies possibly but they are not. they are not. i think we have to distinguish between crypto's that are highly speculative, suspicious occasionally, and high intensity in terms of energy consumption assets, but they are not a currency. on the other hand, you have the stable coins that are beginning to proliferate, which some big tech are trying to push along the way, which are a different animal and need to be regulated where there has to be oversight that corresponds to the business they are actually conducting irrespective of how they named themselves. but you have the central banks. they are prompted by demand of customers to produce something that will make the central bank and central-bank currencies in the century we are in, which is why we are

madame lagarde says it's going faster. 5.3%. the bond market took it well.he crack went mad for team transitory. good morning. tom: good morning. where does this year lead? you are sitting in the middle east. will will you put your assets? look to the u.s.. junk bonds in the u.s. yielding less than inflation now, sub 5%. inflation at 5.3%. that's above what you're getting on u.s.. that issuance, the demand we have been talking about remains very strong. that's the dynamic in the search for yields. manus: that takes us to the point, whether you should continue to load up, take equity risk. can you afford to stay out of these markets? bank of america basically says, there is no alternative. their institutions are much more knowledgeable than i. they still believe that there is nowhere else to go out -- grow. global growth slumped in september. equity allocations should fall. it's a rare moment of disconnect. good morning. tom: the macro taking a downturn with that data out of china. particularly concerning for me, retail sales which missed the forecast quite s

finance ministers were meeting with christine lagarde, striking a cautious tone. >> the situation is better than we had feared, two quarters ago. but, we are not out of the wood yet, and we have to continue to show resilience, persistence, and can -- continued cooperation. guy: some want to see the re-imposition of the budget rules that existed before the crisis and others including france are not sure that it is a good idea. joining us as well. walk us through the battle lines drawn on this debate. will: thank you. as you said the european finance ministers are meeting and this is coming at a time when it is becoming clear that the recovery from the pandemic is faster than expected. that is allowing the ecb to slow crisis asset purchases and it is good news for firms and workers. it is launching a debate over when and how to respect the physical rules that europe suspended. as you mentioned, france is first out of the bloc for outlining a budget focused on investment to drive economic growth. that is an approach that others are not quite so sure about. going to the meeting, your fin

jonathan: 11:00 eastern, chairman powell, governor kuroda, governor bailey, president lagarde all goinglk at a forum. that is the lineup. i will be hosting that panel, too, tom. can you imagine if i got to host that panel? tom keene would be throwing things at me, locking me in the hotel bedroom and telling everybody jon couldn't make it this morning, i'm here. reminiscing, tom? this is bloomberg. ♪ it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. jonathan: it is wednesday morning. live from new york city, here is the price action. up 20 on the s&p 500. it is a bounce back from yesterday's big day of losses on the s&p come the biggest one-day loss back to make. -- back to may. in the bond market yields turnaround but only little bit.

when angela merkel was looking for someone to head the european central bank, she found christine lagardei had a conversation with her about how europe is recovering from the pandemic and the global slowdown in the economy. as we look at the post-covid environment, what would you say is the situation in europe? is europe recovering rapidly? or not as rapidly as you thought? christine: europe is recovering more rapidly than we had anticipated. as a result of that we have significantly upgraded our projections. our projections for this year have been significantly upgraded. 4.6% next year! pre-covid type of growth. this year is going faster than we thought to the point where we will have recovered yo pre-covid -- to pre-covid-19 levels. we had expected it would be early '22 at best. david: are you worried about the delta variant impacting what you have said? christine: it is very closely related. we used to say that the best policy was an accelerated vaccination rollout. vaccination matters in norma sleep -- enormously. europe has done well. the adult population is completely vaccinated in

enter bailey and christine lagarde and jay powell will be speaking. indication of exactly how they expect inflation to play out. the selloff in the u.s. and asia has not followed through to europe. stock trading higher this morning. treasury yields slightly lower. let's take into the markets with nora from our mliv team. the repricing across the world is continuing. >> absolutely. you have inflation concerns creeping back in. a lot more in europe. the energy crunch is having a bigger impact on supplies here versus the united states where you can see that move being driven more by the hawkish fed. all these sectors coming in together, yielding you that high your yield that we see. tom: how should we be thinking about ever grand? is this a risk that can be put to one side? >> yeah. they have to pay for their dollar bonds as well. realistically, the pboc and chinese government have come out and said they are watching the property market closely. i don't anticipate this to be that lehman moment that a lot of people have been touting. i think that the chin

jay powell and christine lagarde say spikes in inflation are not temporary.warn that climate change poses long-term threats. joining us now to talk about inflation, markets, and china data is tatjana puhan, tobam deputy chief investment officer. it seems like central banks are sticking with inflation is transitory. you have a lot more market concern that this is not something temporary, especially if you have broken supply chains across the world. tatjana: this is also what you can see pretty much happening at the modern market. what we have seen over the last few days, it has been really, really amazing. you see the large wedge between performances on sectors and equity markets. [indiscernible] when it comes to the structure of the markets, market concentration -- from super high levels. investors are re-leveraging very stretched relations that they put on their big growth tendencies, if you want, that they had insert companies -- in certain companies. tom: is there a disconnect between the rhetoric of central bankers and the impact on consumers, what househ

does lagarde ever get the higher interest rates? zachary: no. brian: no. frances: no.han: remarkable. question. a hike from the fed. 22, 23, or 24? frances: 23 --brian: 23. frances: 23 but late. zachary: 24. jonathan: i've asked this question before to get with the panel is going. where the audience is going and where my guess are going on this. what first, 1% or 2% on a u.s. 10 year yield? 1% first or 2% first on a 10 year yield from where we are now? zachary: 1%. frances: 1% to 2%. brian: 2%. jonathan: it's fantastic to catch up with you all, have a wonderful weekend. this was bloomberg really yelled. we will see you next friday. ♪ mark: i am mark crumpton with bloomberg's first word news. a big blow for apple. a federal judge ruled that apple can no longer force developers to use its payment system in apps. the judge granted them an injunction sought by epic games while ordering the game maker to pay damages to apple for breach of contract. the order could take a big right out of profitability of the app store. according to analysts, it takes in more than $20 billio

you have spoken to christine lagarde about this.m the ecb, it is more likely inflation surprises on the upside. francine: because the ecb is split into hawks and doves, we have seen a lot of countries trying to go for a more dovish -- a more hawkish stance. this is emergency programming, it will not last forever. this will be significant looking at the fed today. tom: coming up, the u.k.'s green bond debut has smashed records. we are going to get the details. more on that next. ♪ francine: welcome back to the market open. here are your top stories. ever grand investors -- will repay one bond interested tomorrow. it is fed day. u.s. futures fluctuate ahead of the decision. they are expected to signal a reduction in stimulus. it is four days until the vote in germany. the chancellor angela merkel campaigning in the race. we get the latest from berlin. a lot going on in the markets. the fed, china, the markets are caught in between. tom: it is a busy day. ever grand did fall into the hole. don't forget do not worry, ever grand will be

time, christine lagarde speaks on the european economy. tom: and over in the u.s., in terms of jobless claims, and me just check in on retail sales, that's at 10:30 u.k. time. manus: gas prices continue to surge. will discuss the hot topic that is next. tom: spacex send civilians into orbit. will look at that later in the show. this is bloomberg. ♪ manus: this is "daybreak: europe." tom mackenzie is alongside me at london hq. gas prices continue to soar. as well as the rising cost of emitting carbon. here's what ben ammons had to say in terms of market inflation data in the u.k., showing the impact of how prices may have implications for ecb. you are on camera live. i think you want to take the other side of this trade. do you agree? >> of course it will lead to inflation. it will not impact monetary policy in europe. anything that takes away from the consumers power will lead to the ecb trying to install very efficient functioning of the monetary mechanism and higher inflation rates will be working more closely with the banks on monetary

i do not think lagarde will do anything else but stress the dovish point. tom: let's go to maria tadeo on the ground in frankfurt. the ecb is expected to provide growth and inflation projections. what is the focus? maria: when you look at the gdp and inflation projections, we expect to see changes to that forecast. in terms of growth expectations, the european union with the vaccination rollout that has gone quicker and better than expected, the ideal we will not see new law downs kicking in the european economy, all of this will prompt a revision to gdp and take that number higher. the point of focus is not so much the growth but inflation, as we head into 2023, that will be the cpi print where there is a lot of attention focused on today. we have a huge debate in the governing council, we know there is not a lot of consensus around where price pressures are going. hawks have been calling for a warning around inflation that is more sticky than expected, and there is a question whether this is transitory. tom: maria tadeo on the ground in frankfurt, bringin

we get the latest ecb rate decision from christine lagarde. after a quiet day today, it will be a packed week. a fixed income strategist joins us now. i have a million questions on the jobs report. there was wage pressure. does the number mean the economy could be on its knees and we have not realized yet? >> i think labor markets are key. in the u.s., we still have the impact of the delta variant. in europe, short-term labor numbers are still high. we had an increase in the population that left the labor market. that is one of the key reasons as to why they will continue to be dovish and support economies going forward, positioning for a longer scenario especially in europe. francine: does it change your view of when the fed starts tapering? they have told us tapering does not mean rate hikes. >> i think that is the key. overall, there will be a dovish sentiment through the market. every bit of data is not as strong. we continue to see the effects of delta, so we are dovish on the fed side that they do not want the market to get ahead of them

christine lagarde was able to pull off a taper announcement last week without a tantrum.kets rallied on that. we look around the country because we know the valuations are stretched. we are still bullish and this interest rate environment on large-cap growth. he think there is opportunity investors need to look outside the u.s. to these developed country markets for opportunity both tactically and to diversify our portfolio. haidi: tell us about these opportunities. are they the same somatic views that your trading in the u.s.? david: in the u.s., there has been -- i think the consensus has changed. there is a lot of analysts looking toward resurging value. we had that earlier this year and the reopening trade. the problem with value stocks and cyclical stocks in the u.s. and globally is we are only one variant away from another clampdown or the covid impacts to the economy. also, we do not think interest rates are going up significantly anytime soon, which is favorable to banks and other value cyclical plays. like industrials, materials. we stay with mega cap growth stoc

that sector, the biggest lagarde. names like nvidia, qualcomm, amd.md ceo was on stage last night. she talked about supply chain issues and specifically how she sees business coming out of the pandemic >> all of these things we never expected to happen have happened so it is a mindset shift i think people are very open to it the collaboration i see across the industry when we talk about supply chain, we have had the deepest conversations with our partners. you've got to solve this together there is no one company that will do it all by themselves >> she also talked about heterogenious computing that will drive hardware coming out of the paind what is that it reminds me of apple's m 1 processors as they play out in the mac book air and pro with a 14 to 16-hour battery life because they can turn off those sources. she's looking to bring that main streen there are all sorts of ways to get this type of computing hard core computing and help that continue. >> faster, better tips the question of whether supply will keep up >> i do wonder talking about this

if you are christine lagarde and you are looking at that kind of scenario that you've just laid out,t of the monetary policy implications are slightly stronger spend out of germany, is that enough to allow you potentially to accelerate or at least keep on track plans to withdraw some of the monetary stimulus it's been delivered during the crisis? >> i think the ecb will closely follow on the fiscal side. what the europeans will do have been suspended now for another year, but in 2023 the europeans have to decide whether to go back to it or change it and how to modify it. a different german government could play a role and loosen up that a bit. tickly german itself -- germany itself find ways to go around its own data rate is probable be changed but there are ways to spruce up spending outside of that. the ecb will follow closely. but i think they will be very careful not to assume anything before it is really decided. >> the idea we will get the input for more spending seems to be the prevailing theme coming out of the election. i wonder if we learned anything about how fragmented th

we will be hearing from the likes of christine lagarde and jay powell himself.oving onto wednesday, japan's ruling coalition will be choosing their new leader who will almost certainly going to become the new prime minister after much speculation. also the latest chinese pmi with an official gauge is expected to come in stronger. >> the ever grand prices extend into a new week with another $45 million payment due wednesday when offshore investors are still in limbo after several said they did not receive a coupon last tuesday. china has taken some moves to calm markets, include injecting $71 billion in short-term liquidity. the funds are used to complete projects but we still do not have a clear indication of just how far beijing is willing to go. haidi: the risks out of china continue to mount after regulators banned all crypto transactions stop mining in the country late last week -- two of the world's largest bitcoin exchanges are taking action, halting new chinese registrations and it's likely to dominate sentiment for the digital asset. here is what our ear

we think it has -- lagarde has been well positioned to do that.e're optimistic she will manage again tomorrow. tom: an investor expectations in terms of inflation. it has piblgd picked up significantly. are there concerns the b.c. is behind the curve? >> we don't think so. if we look at the long-term outlook for inflation, we think it is stuck because of technology and automation is the dominant theme for the next five years and the e.c.b. should be in recognition of that. still far below the the 2% target that the e.c.b. has. we think there is lots of room to maneuver there in terms of inflation expectations and we think it is going to be hard for europe to get to that target in a sustainable fashion given its current policy mix. we're not worried about that at all. it is a short-term blip in inflation that we're seeing now. and the hawkish e.c.b. members from my own country are once again too short-term focused not looking through volatility and we think there needs to be. tom: on the u.k., you have outlined this. boris johnson wrestling with th

gina lagarde, medical directors here in region nine, the medical director in region seven, who accepted a number of patients, and likewise, the dr. david holcomb, the medical director in the alexandria region, who took a lot of patience as well. they have not slept in a long time, and they saved lives, and we owe them our appreciation. as the governor said, we are taking this matter with the utmost level of seriousness. it has been referred to law enforcement officials. i can let you know that already today, state and federal officials were on the ground, and there will be a lot that gets looked at in this over the coming weeks and months. what is most important now is that those individuals are all in a safe environment and receiving the care that they need. as the governor said now, we unfortunately have nine total storm related deaths. and again, as has been the case with previous storms, we tend to see more deaths after the storm than during the storm. we added four just today, three of which were related to carbon monoxide poisoning in marrero, one of which was related to drowning

speaking at a european central bank forum, christine lagarde and jerome powell repeated that inflation spikes are temporary. the boj's governor kuroda said it would pick up to 4% next year with the mandate unlikely to change under a new prime minister area china's national development and reform commission is promised to keep residential electricity and gas prices stable. the authority says it will work to avoid abrupt power cuts while letting prices reasonably reflect market changes. earlier sources that beijing was considering a hike is energy costs for factories to ease the supply crunch. china's power crunch might hurt agricultural processing, triggering a renewed surge in world food prices. the autumn harvest is underway just as shortages in energy hit provinces. the crisis is stoking concerned that china will have a tough time handling those crops along with peanuts. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries this is bloomberg. yvonne: still ahead, tracing the energy crunch to an

we hear from ecb president christine lagarde, giving a speech on central banking. how much does she reiterate a more devastating's -- more dovish stance than the federal reserve and the bank of england, as they have not necessarily signal to same type of tapering as their neighbor banks? jay powell and janet yellen will be testifying. yesterday, talking about the passing supply chain disruptions. we heard that that does seem to be waning. yet that is very real for consumers. how do they respond to that? at 1:00 p.m. we get u.s. selling the $2 billion of seven-year notes. this tends to be a messy auction , and it follows that the five-year note yield is getting up to the highest level going back to february 2020. i am watching this closely. how much do messy buyers step up ? jonathan: yields much higher over the last week. let's get straight to evan brown, ubs asset management multi-asset strategy had. here it is over the last week. why is this not a head fake? evan: i think what is happening now is the market is starting to look forward to the healing in developed

geoff: listen to madame lagarde yesterday. she thought a phrase that i thought wouldn't be uttered, second round of sets from inflation. the euro zone, ecb is starting to worry about inflation becoming entrenched. the dollar, u.s. inflation, if they had turned out to to three more percent, you will get two the three moves higher as well. tom: when you take your lse dynamics away from the equity markets, for bny mellon clients, can you fold in and optimism towards u.s. equities, or is it such noise right now that you can do that? -- that you can't do that? sam: the optimism -- geoffrey: the optimism for u.s. is that the cpi-ppi gap is the lowest out of all the major markets right now. that is really important because of higher cpi, you can pass those on to the consumer. that is margin comfort, a margin buffer for u.s. corporate's. german ppi we are talking about 12% now, and 8% cap. after that, margins and the u.s. are in a much better place. jonathan: start of the year, 1920's. end of the year, people talking about the 1970's.

president lagarde saying, "the ecb must not overreact to transitory supply shocks. the federal reserve would agree with the ecb. i think if you want to a cup this affects market and get some clean directional trades on the likes of euro-dollar, we need to see divergence between central banks. just given the way things are starting to set up for next year, maybe we start to see that between the ecb and the federal reserve to the back end of next year. tom: i think they are both massively data dependent. i get where you're going, but i don't know how you do that if you don't have a plan, if you don't have a belief. right now they are all just staggering to the next set of economic data. jonathan: you have to say the ecb will be much more reluctant to raise interest rates than if of ever reserve -- then the federal reserve. lisa: i also want to note come of this is one of the biggest economic experiments in terms of how you deal with the labor market. clearly there is more slack in europe following what they did to keep people employed, versus the money spray they used

to hang onto and make the most of in terms of discussions, so it will be really hard for christine lagarde to push back when such things are happening in germany, plus unemployment continuing to fall in germany as well. what you see happening there is found to have an impact on the rates market. it has been a situation for a long time that the ecb buys an enormous amount of government bonds. it has kept yields artificially low. as we can see, when the traders in the market have not been participating so much, as soon as they get momentum trades to go up, they can easily push yields up very quickly. we have probably already seen the loafer german yields and think it's likely we will see them return to 0%. yvonne: i'm looking at the euro with the 1.18 handle. will we see that last? >> it certainly helps the euro, particularly at the short end of the curve as well. if we do see a shift across particularly in the two-year and short-term part of the curve, that is much more likely to help the euro get a bit stronger. we have not seen much of a move yet, but certainly, if 10 year yields get some