christine lagarde is about to be speaking. think she is there in person at the european parliament. that is the live shot. i think she will pick up. we have an early part of the debate taking place. she will be out very shortly. will bring you your -- will bring you her remarks. this is bloomberg. ♪ guy: christine lagarde is in the european parliament talking about the 20 thing averse rate of the euro -- the 20th anniversary of the euro. it came in in 2000 and then we got the physical coins. she is addressing that euro -- that journey the euro has been on. the ecb has been instrumental in defending the euro zone as an economic entity. not a complete project without the fiscal tax raising authority that normally would go side-by-side with such a military union. we will listen in in a minute. when she gets to what is talking in the here and now rather than the historic narrative around what has happened with the single currency. let's bring in guntram wolff to bring his take on what christine lagarde is saying and the challenges

christine lagarde is about to speak.berg. ♪ >> monday the seventh, european stocks at session highs, christine lagarde has just started talking. the countdown to the close starts now. >> the countdown is on in europe. this is "bloomberg markets, european close." with guy johnson and alix steel. guy: 30 minutes until the close. stocks are higher. they have been climbing since 10:00 a.m. italian yields are up but they are off of their highs. christine lagarde has just started speaking to the european parliament. i think the av department may have made a few mistakes on her framing. let's take a listen to what the president has to say. christine: and how they affect people's daily lives. following on, we are now using clear, more narrative

christine lagarde insists any adjustment to the ecb will be gradual. president biden says chancellor schulz says nord stream 2 pipeline would be stopped if moscow invades ukraine. earnings bonanza. bnp, softbank, and bp all hit the tape. 2.3 one billion, a third of a billion higher than market would have expected. we penciled in 2.0 5 billion. they pay up ratio of 60%. the payout ratio will be raised to 60% from 50%. this potentially music to the market sears. we know that buybacks and dividends were the alpha of response mechanism for the bank last week. good morning. dani: good morning. it is a race to higher payouts. thank after bank reporting they are attempting to lift their payout. a key measure of profitability, up more than 11% in four years time. we also spoke to the cfo who spoke with bloomberg in paris. >> [indiscernible] if you do this, you will see that bnp paribas has increased revenues in 2021 versus 2020. >> you are raising your dividends to 60% payout ratio. that mean you are confident this kind of performance will continue? >> listen,

it was, as i say, a tough day at the office for christine lagarde.rik nielsen, unicredit chief comic advisor, joining us with his thoughts. -- chief economic advisor, joining us with his thoughts. what did using to the ecb president's performance today? erik: terrible. a terrible day in the office. almost as terrible as the one where she said we are not here to close the spreads. they will try to moderate a bit and clarify. the last time we had this disastrous press conference, we had the famous cnbc after -- famous cnbc interview afterwards. i don't know if it was decided before the press conference really what she wanted the message to be. it was confusing all over the place. kailey: is she just hoping for a redo in march? erik: the issue is they haven't got the new forecast now and they want to wait for it, and that is ok, but she comes out and says the risk to inflation is now clearly on the upside in the short term. she did not refer to the medium-term, and refused to go there when she was asked. so on the basis, there was nothing apart from one

christine lagarde has an interesting news conference coming up. ritika: with the first word news, i'm ritika gupta. president biden says a raid by u.s. forces in syria has resulted in the lead of isis ian removed from the battlefield. he gave few other details other than to say that all americans returned safely from the operation. earlier, the pentagon said u.s. operations forces carried out a successful counterterrorism mission. the bank of england has raised its key interest rate as part of an attempt to contain inflation, on course to up 7%. five of the bank nine policymakers -- of the bank's nine policy makers supported an increase of 0.25%. four voted for an increase of 0.5%. british domestic energy bills will fall 54% in april, a dramatic blow to households already suffering from inflation. the u.k. energy regulator lifted its cap on bills in response to surging gas prices. the government says it will offset energy price hikes for most families. all three of president biden's nominees to join the federal reserve say they place a high priori

christine lagarde pushing back a little bit.e heard earlier on in will be a tough act to moderate what happened last thursday. the move in germany a little less aggressive, but understandably worth paying attention to. in terms of the breakdowns, travel and leisure has had a good day. the miners are up strongly. banks in europe track higher. this is a debate. on the one hand the more positive rate, the shift in the rate narrative from the ecb should be positive for european banks and their well off the lows we hit at the beginning of the year. some are up by 40% year to date. remember it is only february 7. nevertheless you are still looking at a situation where greek banks and italian banks own a lot of w and that is worth thinking about. in terms of the names we are watching out for. they are looking at their infant formula business, looking of the portfolio trying to determine whether they could do more with it. look at unilever. up around .5%. evraz splitting off its russian coal business. the stock down around 7%. off of it

hawkish comments from christine lagarde. and economist look back on today as the day of divergence between europe's biggest central banks. the bank of england is expected to provide the first back to back rate increases since 2004, while the ecb will not hike this year. yesterday's inflation shock may provide impetus for the european central bank to change guidance. traders see the bank of england and the fed boosting key rates five times each. even with two 10 basis point hikes, the ecb is expected to be a negative territory. joining me now is anne hutchins and jari stehn, managing director / chief european economist, goldman sachs. how difficult will the inflation print be to make christine lagarde remain dovish? jari: it was an upset surprise, the biggest in history. it does mean inflation will remain more elevated than they thought only in december. we think they will acknowledge that today, and flag upside risk to the inflation outlook, and they have optionality to respond. at the same time, we think they will stick to

we heard that hawkish commentary from christine lagarde.ll get to that conversation with steven major in a few seconds. francine: they are hawkish but without great conviction. certainly not as much is the fed. when you speak to the central bank officials, they say that the rates will raise, but it is gradually. tom: 40 basis points for the ecb is being priced in for the year. it is a conundrum arguably more so for the bank of england given the pressure around wages and energy costs. it might be a different scenario versus the euro zone. it will be eight more difficult picture for the bank of england. francine: the interview of the day. the bank of england raising a key rate policy. the governor voting was a 5-4 majority. governor bailey told us that he will move interest rates after an unexpected shock to get inflation rates under control. >> i think we will raise rates again. more likely than not. when i say that, do not over interpret it did -- it. there are good reasons within our forecast and our reports suggest that we will see inflat

it was a handbrake turn yesterday from christine lagarde.he statement gave no signal it was coming. it was an absolutely massive surprise at the ecb. changed direction, abandoning the dovish stance that has become the excepted wisdom. the expectation was that maybe the ease we would sit out this rate hiking cycle. that now looks like no longer the base case. let's get a take from a man who knows how the inner workings of the ecb occur. joining us from brussels, former ecb chief economist peter praet. great to have you on the show. thank you very much for your time today. we always appreciate it. the market is now pressing into rate hikes from the ecb this year. that would take the positive right back to zero. how realistic do you think that is? peter: there have been two major changes in recent days. the first is inflation is the number one concern, so that is a commonality with the united states. i think the comic situations are quite different -- the economic situations are quite different in the u.s. and europe. the one thing in common is

kailey: even christine lagarde sounding a little bit like a hawk.ll have more on that in just a bit. this is bloomberg. ♪ guy: 35 minutes to go until the european close. it is really quite a lot to take in. in some ways, over here in europe at least, equities are not the main story. the main story is what is happening at foreign-exchange, what is happening in the bond market right now. i was asking at the top of this hour whether or not the bank of england was a bigger surprise or the ecb a bigger surprise. you are sterling up quite sharply, despite the fact that the boe was hinting at a 50 basis point hike today. the fact that the ecb is talking about a significant recalibration in march and christine lagarde would not talk about the fact that she will continue to rule out the idea that there will be a hike this year i think has cut the market. the german two-year yield is moving quite sharply, up by around 11 basis points. the italian two-year is up even more than that. spreads are widening. i think the ecb is the bigger surprise. kailey: and it i

christine lagarde insists any adjustment at the ecb will be gradual.dent biden warns the nordstrom -- moscow has repeatedly denied it. softbank embraces plans to ipo the chip designer after it abandons its acquisition. we have quite a lot of earnings, everyone distracted with the big bond moves. tom: having checked the yields, the bond move story is less today than yesterday. focus is shifting to the earnings story, but we keep an eye on the peripheral bonds after those significant double-digit moves we saw on greek yields yesterday. less volatile in the first few hours this morning. that could change. markets are continuing to adjust. the earnings picture, bnp paribas playing into the mix. you look at the ftse 100, gaining 0.7%. bnp getting 2% with a pledge to return more cash to shareholders. across the benchmark you see gains of 0.7%. the optimism has started to eke into these markets after uncertainty at the open. we are 30 minutes in, and closed lower stateside, but it seems there is a cause for optimism around the earnings. olaf scholz is in d.c.

it is over to president lagarde in about 10 minutes. tom: you wonder if you will actually comment directly on what the bank of england did. that will be interesting. jonathan: the ecb decision in 10 minutes, and then onto a news conference 45 minutes after that. let's get to kailey leinz. kailey: what was a $900 billion company as of yesterday is more like a $700 billion company come the opening bell in about two hours. meta-platform -- meta platforms cratering, down 22%. facebook user growth staggering for the first time ever. taking a hit from those apple rule changes. really, social media stocks across the board. snap reports after the bell today, twitter next week. they are down 15.4% and 7.2% respectively in premarket trading. users and subscribers is an issue for spotify. it is no longer just about that joe rogan drama. it's guidance really disappointing, down 10% after its report. qualcomm also on the back foot. it did beat on the top and bottom line. chip sales to smartphone makers are doing well, but it did not do as well in ot

christine lagarde no longer rolls out raising rates this year. plus, that the talks began as the winter olympic games get underway, vladimir putin joins his host, xi jinping, in beijing for talks. three countries in four days. a lot of pcr tests, but what a movement in global government bond yields. this is a hawkish pivot from all the central banks in the bond markets are quite literally laying down the gauntlet with the momentum and belly of the curve. we are pricing two rate hikes for 2022. good morning. dani: good morning. so lovely to have you on a day when the bond market has been turbocharged. one of the charts you had was the amount of bonds yielding for developed markets below zero. zero, manus. no developed market 10 year yields are currently negative. what a change we have had. manus: what does this mean for real yield? if you look at the momentum, i think we gave ourselves optionality. she did not give the doves what they wanted but she has repriced the narrative from the ecb. with that in mind, we see that momentum across the various

we thought maybe the same thing that happened with christine lagarde.n the united states people are talking about consumer expectations. people are going to get ingrained and believing inflation. why is that not a discussion in europe as it climbs to the highest pace in modern history. they are still at historic lows when you look at your region. tom: lisa mentioned 5%. in the dow jones, microsoft is 6% of the index. mcdonald's is 5% of the index. the s&p 500, mcdonald's is only half a percent. mcdonald's has a 10 times greater weighting than it does in the correct standard & poor's 500. no one cares. lisa: it will keep going the matter what. jonathan: futures on the dow. i'm not even going to do it. nasdaq futures at 1.4%. this is bloomberg. ♪ ritika: in the euro area inflation surprisingly speeded up to a record in january. consumer princess jumped 5.1% from a year ago. none of the economists surveyed saw inflation accelerating. federal reserve officials have a message for investors ramping up interest rates, not so fast. not have backed the idea of a

ecb president christine lagarde coming up a little bit later.h, i believe come out of europe. coming up next on this program, jordan rochester of nomura on foreign exchange. don't miss that. futures up 0.1% on the s&p. from new york, this is bloomberg. ritika: with the first word news, i'm ritika gupta. this week, data expected to show that inflationary pressures in the u.s. kept heating up at the start of the year. that will probably put a federal reserve interest rate increase next month on autopilot. according to a bloomberg survey, the consumer price index likely jumped 7.3% in january from a year ago. ember of the european central bank season interest rate hike as early as october. it went he five basis point increase is likely -- a 20 point -- a 25 point basis point increase is likely. dependent and china's restrictions to control it are still damaging domestic spending. travel and consumption during the just ended lunar new year breaks down from 2021's already low levels. people in china made 251 million trips during the seven day holiday

we have seen significant pricing and christine lagarde that -- since christine lagarde had that press conference. our where we in terms of this journey, whereas the market pricing? >> rates will go up. in 2019 and 2020, right -- rates were higher. my question of how long it for them to come back. the bad news for the united that we are seeing more information big move in terms of what market is pricing has been the u.s.. right behind it, you can have already started with its right moves. governor bailey talking about the fact that information is a problem not just because of kobane, but brexit. but news conference, god said we are not -- madame lumbar said that we are not right you. european do not have the same kind of information we are going. 510 and right. this mean worst into acting sooner -- forced into acting sooner, but it will take a while for that to practice right through the governing council and get them to do something. the question you are asking can markets withstand right increase and answer yes. the right increase from -- rate increase from the fed. you can see the m

the subject line is, "the changing of lagarde."'m a little bummed i did not think about that first because that is in a tv headline. guy: absolutely. we could steal it. we could use it. [laughter] i appreciate that we are going to have to name check michael in this, but nevertheless, that is great work. we're deftly going to steal that. i want to come back as well to the neil young thing. i think that is worth a little bit more of a shout out as well. basically saying sell banks and financials, which is every conversation we seem to have at the moment, buy financials and energy. kailey: neil young apparently not into the value trade, guy. guy: that is kind of where i was going. i think there's got to be some kind of joke along these lines. i need to go back through his musical compilations. this got to be a song or something in there about the value trade. we will find it. kailey: you do that in the break. we will come back to it. coming up on the other side of this commercial break, we will be talking about the european union and

what will christine lagarde site? only -- this chart is only going in one direction, you are weakness. how much more week this will we be if we see this divergence in policy? i've thought i would throw that in there. let's talk about the sector breakdown. energy down at the bottom which is interesting. the underperformer today despite the news out of opec and maybe in spite of or because of the news out of opec. financial services, food and beverages doing well. chemicals is trading higher. you have the oconto story in the mix. the spread between the top and bottom performers much narrower than it has been of the last few days. let's talk about individual stocks. vodafone is up. this is a stock that is being tracked by an activist, we think. the good numbers having -- the good numbers coming as a bit of a respite julius bar being punished. the banking story in the europe at the moment is interesting. the cost story certainly front and center. then you come to ocado the grocery, robot company? i'm not sure how you woul

christine lagarde has said liquidity will be in place if needed.eeing any dislocation in these markets at this point. a couple of lines crossing when it comes to what is happening in the tanker space. black see rates increasing by $91,000 a day, and in the baltic sea, the highest rates since 2008. stay with us. this is bloomberg. ♪ if you're a small business, there are lots of choices when it comes to your internet and technology needs. but when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose fiber solutions with speeds up to 10 gigs to the most small businesses. that's virtually everywhere we serve. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. tom: welcome back. stocks are finishing higher on the day in europe by about 3.8%. in germany, a similar picture, 3.5%. we will be closing the week this friday just a couple of days is whites lower fr

the statement was bland but it was the hawkish commentary from christine lagarde. the key is what does that mean for the sovereign yields of italy, spain, and greece if you get a more hawkish stance and they start to hike in the fourth quarter. what kind of problem does that pose for the governments of those nations? this chart shows the pickup. francine: it is not only about the fragmentation in the euro zone. but there also seems to be a lot of fragmentation at the ecb governing council mode because we heard christine lagarde and schnabel say, we are not worried too much about inflation and then there is a clear pivot from the influence of the hawks. they could get more ugly. one person who is very sensitive to some of the spreads because they hold so much italian bonds is carlo mussina. we will be speaking to that bank ceo. let's get straight to the bloomberg business flash. here is laura wright. laura: peloton reported to be evaluating takeover options after the share plunge made it a target for acquisition. reports in the wall street journal and financial time

christine lagarde is getting increasingly hawkish.e are probably going to have one hike coming from the ecb before the end of the year. they still, you know, are behind compared to the fed. they are getting a little bit hawkish. dani: you are going to stick around with us. that is lale akoner at bny mellon investment management. take us the gmm screen. you know i love a standard deviation move. iron ore tumbling almost 11%. beijing fighting terrain in prices. -- fighting to rein in prices. i have not tracked how many standard deviation moves, but it is at least two. manus: and aussie rates playing the catch-up game with the u.s. overnight in the end of the curve. coming up, we are going to talk about the liquidity injection from the ecb. -- from the pboc. we will discuss market implications with our guest on bloomberg. dani: it is "bloomberg daybreak: europe." to china, where the pboc is pumping liquidity into the system stepping up support for the nation slowing economy. still with us is lale akoner, senior market strategist at bny m

christine lagarde really pushed back.ate hike in 2022, she said no, not at least until 2023. today after the policy decision, which was to hold things steady, she was at a press conference when she was asked a couple times about a rate hike in 2022. she did not rule it out. she went on to say that they are watching nation closely. inflation in the eurozone area up to 5.1%, well above the target. it is definitely on a bit of a tear. she said risks to the inflation outlook are tilted to the upside, particularly in the near term. let's look at what she said when she noted that the march and june meetings will be critical in determining the ecb's next move. >> what i'm saying here now is that, come march, when we have additional data, when we have been able to integrate in our analytical work the numbers that we have received in the last few days, we will be in a position to make a thorough assessment on the basis of data. and i cannot prejudge what that will be. kathleen: the markets are now pricing in 43 basis points. they

and christine lagarde, the idea that she is softening, what should the markets be reading into this? >> looking into what they are going to be doing for their sequencing for starters and what the asset purchase program is going to look like. in a way it shields the e.c.b. from getting dragged into this rate hiking fray. they have every sized they are not going to do anything on rate hiking in they decide what to do with the asset purchase program. i think her message emphasizing that gradualism drives that point home. watch out for the a.p.p., what they are going to with that and when that is going to end when we're talking about rate hikes. tom: maria stays with us. francine: coming up later this hour, the energy crunch and opportunities and alternatives to energy. we'll speak the head of energy research. tom: and we'll speak with the c.e.o. as they announce plans. stick around for that one. this is bloomberg. francine: welcome back to the open, everyone. 16 minutes into the start of the european trading day. a big selloff whether it be bonds or equities. the stoxx 600 down .5%. we'

lagarde. how concerned should u.s. equity investors be about that and/or about specific corp.ers of the u.s. stock market? >> yeah. it was a surprise. a lot of the rate hikes that we expected in 2023 are being pulled forward to 2022 christine lagarde is kind of known as somewhat dovish so having this rhetoric is a sr. prides bank of england raised rates cleefrly the sen tram banks world wide are circling the wagons and tightening financial conditions and will have a deleterious affect on securities. >> will it affect the classic growth stocks or corners where you can safely or astutely buy growth >> yeah. i think that there are places where you can dip in but here's the issue. we believe that inflation and growth will trend back to pre-pandemic levels but the meantime we have march 10th with another inflation report and expect that will probably peak either if not already there. that will be a difficult report and i think put some pressure downward pressure on prices if that comes in pretty hot that said, i think at so

let's see what christine lagarde has to say. is she returning? dani: what soothing words might she give to this market that is pricing in 20 basis points by year-end? it feels like awkward timing given we have those inflation numbers yesterday. that surprise to the upside, more than 5%. that is a little bit awkward. manus: 28 percent of that number is on energy. the core number did dip. let me show you what is going on with the two year yield because this is when it becomes a little bit more spirited. since the fomc put on a team basis points, you are looking at a reappraisal of real yield in germany, up by 16 basis points since the start of the year. hsbc have a big note on the longer end. that is from -50 so -52 -30 but they say that this market is unreasonably hawkish. dani: it has been cut in half for europe since september. it's not all about bonds. tech is also the big story. nasdaq futures declining quite heavily after the miss yesterday, missing on user growth as well as sales outlook. the stat, $200 billion in market value are said to be

christine lagarde also warns that moving too fast to tighten policy would risk harming the european economygood morning. two huge risks, the risk of a 50 basis point hike in march, or a fed meeting move. james bullard says this, there was a time when the committee would have reacted to something like this having a meeting right now and making a move right now. they need to be nimble and consider that kind of thing. what would be the risk to credibility if they had to call an intra-fed meeting? dani: this is a market on edge that's willing to act. let me take you into the chart. thoughts for an interim meeting hike at one point after bullard spoke yesterday reached 30%. does the fed, though, have the guts to make the move? manus: the question is indeed. bond vigilantes are alive and well. how are equity vigilantes, just wounded? dani: they are in a sorry state this morning. we are looking at u.s. futures continuing to tumble. s&p 500 futures down nearly 1%. that's after they fell more than 1% yesterday. the brunt of the beating continues to be longer duration assets. nasdaq futures on the lo

president lagarde. watching these news conferences with these central bankers so often, you get to know them and get to understand when they feel confident, have some conviction about the message, and when they are starting to crumble. listening to president lagarde yesterday, that message was crumbling fast. tom: it crumbled from the initial headlines, including the t word transitory, out to something that we heard and the market heard differently. a lot of just once in euro -- a lot of adjustments in the euro statistics today. i need you dollars $.80 on brent crude. jonathan: futures a little bit higher on the s&p. big weighting on amazon. interestingly in the treasury market, yields coming in a basis point on tends to 1.82 percent. flip over to germany and you've got some interesting moves on the german curve, up five basis points at the front end to -30. just doing this in real time on a bloomberg terminal. flipping over to italy to btp's. we are up another 12 basis points on the italian two-year. w

did lagarde make a mistake yesterday?hat is the question a lot of people are asking because we did not get any sense from the statement that we were going to get that pivot. peter praet, the former ecb chief economist, we will get his comments next. the close is coming up. this is bloomberg. ♪ ♪ guy: friday the fourth. european stocks tracking lower. auto stocks one of the reasons behind that. as of yesterday, i think the real action is in the bond market. the countdown to the close starts right now. >> the countdown is on in europe. this is "bloomberg markets: european close," with guy johnson and alix steel. ♪ guy: 30 minutes to the close. let's talk about the price action in europe. european stocks down 1.4%. it is the auto sector that is really adding some weight to this market today. the italian bond market, the greek bond market, peripheral bond markets under pressure as we continue to adapt and adjust and try and understand what is happening at the ecb. nearly a huge pit it yesterday delivered by christine lagarde.

let's start with christine lagarde. even though it was not as dramatic as the boe, the fact that the last meeting, in the presser mis-c, wind --presser, she was asked about the positive rate hike in 2022. she said no, no, no, no. today, she did not say no, and she talked about inflation in the near term being a risk. they will watch the march and june meetings. they will be critical determining the next moves. in fact, you can see in this chart that markets are pricing in what looks like almost two rate hikes for the ecb, when they have been pricing in none. in fact, bank of america calling for two rate hikes p jp morgan less aggressive, but they do see -- hikes. jp morgan less aggressive, but they do see a hike. hike was expected, but policy members were looking for 50 basis points. they have not even talked about that. it is 2011 since i have talked about that. one person tilted towards that when he five basis point hike at the presser, also talking to bloomberg television. he says it is a more measured move that is w

we saw yesterday from the bank of england and even more stunning, the shift from ecb and christine lagarde. it comes down to execution of business plans stop i would point out that the revenue take of the successful 4, apple, amazon, microsoft and google is 20% per year last year. jonathan: lisa is shaking her head. she thinks it's something else. scarlet: we are talking about $1.9 trillion companies swinging in value by 25%. we are looking at $200 billion swings one day for another. how did this get baked in after years of not seeing moves of a couple of percentage point per day? this is a game changer when we don't have a backdrop. tom: i would look at business execution. the most important earnings announcement of the week was ups, imagine the challenges big brown goes through. they hit the ball out of the park because they executed. mccormick spices went up to a record high yesterday, 5% revenue growth off of italian seasonings that you put in your artichokes. they are killing it on execution. jonathan: i think you are on two different pages this morning. the nasdaq is up 8/10 of 1%. i

>> i know it is a very popular narrative that the ecb has to act. >> all christine lagarde can do isown the process. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. facebook getting absolutely hammered in the premarket, taking down the nasdaq by more than 2%. we need to talk about the bank of england. they hike 25. some people want to even more than that. tom: for those in

and christine lagarde's comments. the story around bonsd and the selloff seems to be moderating now. the yields coming off the german bundle. 178 on b.t.p.'s. it was 250 a couple of days ago. down close to two basis points. we are watching the story, whether this can hold. there is no point trying to mop up spilt milk. yields are going higher. a look ahead to the u.s. session. the c.p.i. data out thursday that will be important for investors. when did we break through 2% on the u.s.? brent at $90 a barrel. just a little bit of selling around the commodity space. down .5%. negotiations around iran and whether they can get more barrels back on the market. still some questions about that. the bloomberg dollar index, question marks as to why amid higher yields you are not seeing more of a bid for the u.s. dollar. that is still crucial. francine: it has been a nightmare. for dollar bull or dollar bears because of what has been going on. sectors on the move. on the lookout for any financial move. technology on the way up. a

we have christine lagarde speaking in the next hour we will bring you that live.loomberg. ♪ guy: monday, february 14. valentine's day. not much love for european equities. we are off our lows but every single sector is in negative territory. the card -- the countdown to the close starts right now. >> the countdown is on in europe. this is bloomberg markets -- european close with guy johnson and alix steel. guy: when i got to work lots of red on the screen, nothing to do with valentine's day, everything to do with ukraine. the stoxx 600 down 2.2% as we approach the close. earlier it was worse. we are off our lows. every sector in negative territory. euro-dollar on offer as well. the market in situations like this runs home to the dollar. brent crude,

christine lagarde no longer excluding a hike this year. we look at the earlier rates and it tells the whole story. clouse not is adding fuel. the short end is quite literally lit up in europe. good morning. the significance of his comments. >> another week, another hawkish central banker. he made the point that rates might go up in october this year. he is talking about inflation of 4% in the euro zone. and rates may go up again next year also. he did not -- he said the trajectory for the ecb is probably about 25. he said what is going on in the euro zone is different from what is happening in the u.s. he said the inflation in europe is being imported. a hawkish signal but tempered. dani: it is being imported -- it is a global story. how does the ecb fit into the global picture for central bank story now? >> jp morgan had some nice figures over the weekend to make the point that by year end average interest rates should be back around to percent globally which gets us back to pre-pandemic levels. and by april, central banks covering half t

ecb president christine lagarde is no longer rolling out an interest rate hike this year, pivoting toward tightening stance of global peers. we will discuss the impact with padhraic garvey, head of debt and rates strategy at ing. we are minutes away from the spacex falcon 9 the launch of a bunch of starling satellites. we will bring you full coverage. first, a check on what is going on in markets. after four days our rallies, we see the s&p falling pretty hard. 1.7% being dragged down by tech stocks. the nasdaq is off more than 3%. meta is the biggest loser. look at this drop, 26%, a loss of around 200 billion dollars in market cap in one day. that is the most that any company has ever lost in one day of training. in fact, more than most companies are worth david big drops for meta. the u.s. 10 year coming back up to 1.829. investors letting go of a little bit of that debt. speaking of rates, let's get to something that caught my eye. it was decision day at the ecb and bank of england. the bank of england hiked its key rate, said that it was start running down bond holdings. meanwhile, eu

lagarde indicating they needed to raise rates like they had in the past and we have seen interest ratesising and this inflation update on amazon earnings going up by $20. so, that is a real problem for the markets going forward with this benevolent backdrop and low inflation coming out of the pandemic and a structural shift. it is an incredible amount of uncertainty that investors are dealing with. romaine: how does consumer and business spending hold up, michael? michael: to tell you a truth, i don't know. i don't have a crystal ball at this point. seeing this inflation continuing to be resilient here, it's a problem. oil ticked at $90 per barrel today. opec came out with their decision and said they would increase production in january. a whole set of factors out there that is hard for businesses and consumers to know how their balance sheet is going to look later this year and how they will be able to spend. taylor: appreciate the insights in the post-market moves. thank you, michael. we will be back with our final take, next. this is bloomberg. ♪ romaine: today's triple tech was all

how should madame lagarde address this moment?a lot of considerations that play to central-bank calculus. on the one hand, there is supply driven inflation stock, inflation dynamics -- inflation shock, inflation dynamics getting intensified. on the other hand, going into an inflation environment, watching central-bank rate hikes play out , all the while also having a safe haven bid. i think the pictures a lot more nuanced and a lot more complicated than just an immediate inflation shock or safe haven bid which is why yields have been swinging wildly and unbalanced in the magnitude of the develop and's. dusty developments. -- the developments. jonathan: as you know, this has been -- for a lot of people, the idea that europe would recover, get long european financials. how does that trade stack up now ? wei: for central banks to exit extraordinarily accommodative environments in a macro dynamic that is very much not your typical recovery, we think that central banks should and can normalize rates to a more neutral state, but going b

lagarde has the same situation right now.he talks about being complacent, but she's not going to be rest into a process -- going to be rushed into a process. she's got 5% or 6% inflation. i think that is the way they are being pushed. jonathan: where are you in terms of rate hikes this year? gregory: interesting question. i think that is the way to be right now, but i think the market is stabbing a little bit in the dark. you've got inflation that is out there, and how many stabs does it take to slay it? right now it is five, but we really don't know. we will have to look at real-time indicators, things like commodity prices, real-time economic data like jobless claims, financial conditions overall, and it might take two or three to do it. it might take six or seven. i just don't think five is a robust figure. that is where we are at, but not something i will bet the house on. lisa: if you believe jay powell has hawkish talons, do you believe they are not going to go far enough to stave off a more entrenched kind of inflation

we get word from ecb president christine lagarde, addressing the e.u. parliament. what will she say about the rising yields because of the concern over ukraine and russia? there is the sense they could talk about raising interest rates by the end of this year, moving away from negative rate policy for the first time going back to 2016. 11:30 am, that is a routine meeting -- routine -- of the board of governors of the federal reserve. it is interesting, given how much concern there is, about some sort of destabilizing action by the federal reserve. mary daly, essay for fed president, said abrupt and aggressive action can actually have a the stabilizing effect on the growth and priced stability we are trying to achieve. so what i favor is moving in march and taking the next steps in a gradual way. that actually gave comfort to markets. does it have a lasting effect or will it be trigger happiness depending on who talks? you see the.2 yield curve -- 2 0 10's yield curve. jonathan: have you seen how much fed speak -- lisa: well who do you listen to? each person has an

what does it mean now for lagarde tomorrow? how is she going to react to that?: what is your trade now, not so much a commercial hedge, but what is your trade right now to play european inflation that's unacceptable? >> well, i think perhaps we're a long way from saying it's totally unacceptable, and we don't have as much inflation. in core europe land, as we do in the u.s., that's for certain. and then indeed, we can look at that wage. perhaps we've had it towards the end of last year, there really isn't much wage inflation at all. so a lot will be eating into demand, and that is a growth negative. we do have to bear that in mind. this isn't the same situation as in the u.s., at least not yet. even so, with that sticky inflation coming through, it is possible that lagarde will feel, she needs more flexibility that she won't push back. that's not so much. and that sort of wants some my view that certainly as we move further into this year, certainly in the second half of the year, it's going to be a lot more difficult for the dollar to keep maintaining its stren

as the market panting mispricing after the press conference by christine lagarde? dir. gen.'ll answer the last question. the market is adjusting to a change in expectations. the market is working very well. we are all being able to issue. we will all adapt whatever those expectations are. the lake is a structural element of our program. we will not do more of it. i do say heightened inflation expectations increase investor demand. we will continue to issue regularly as we have done. guy: what are you expecting in terms of the ecb being in the market this year? if we are going to be seeing rate rises towards the back end of this year, we are going to have to roll down the pepp program, but adp looks like it may be finishing earlier than anticipated as well. in terms of that price and the market, what are you planning for? what kind of timeline are we working with? dir. gen. de ramon: the euro system will adjust its asset purchase program as it needs to achieve its targets. our mission is to adapt to that and maintain a diversified investor base from real investors. when the e

that seems to be the shift we heard from christine lagarde last week.han: they're going to want to take things slowly. i want to be clear about where the se -- where the ecb is at. yes they are looking to unwind qe but even the biggest talk of the ecb is not looking to go quickly. it is looking to raise interest rates in q4 and do the same thing in q3 2023. people -- it has been 10 years since we's -- since we had a serious conversation about raising interest rates. the last hike, july 2011. you have to price in something as opposed to nothing and then work out what that something is. i wonder how far they can push this because before they are doing anything, we are seeing some big moves in this debt market. tom: right now we will do something which is recalibrate off of friday's stunning jobs report. the chief economist at pantheon macroeconomics and fire on the same page. i am saying we will anticipate in early march to february wages report. that is what we've come down to is the non-accountability of two jobs a series but the real accountability of

guy: so you've got neil young, christine lagarde, and a host of other central bankers. an unusual venn diagram. kailey: it absolutely is. neil young has made his fair share of headlines in the last week or so. first you take your music from spotify because you don't like joe rogan's podcast or spotify's response to it. you see your music actually getting somewhat of a lift off of that, removing spotify from the equation, now taking on the big banks. he said, "join me as i move my money away from the damage caused her's or you will unintentionally be one of them, so he's definitely taking an activist stand, but i think it broadly goes to the idea of big inks financing the fossil fuels industry, and what that means from a regulatory standpoint as well. guy: just from a market point of view, the energy sector is having a cracking start to the year, and the banking sector is having a cracking start to the year, so in terms of investment advice, the music, fantastic. the investment advice, maybe a little bit different from an ethical point of view. let's talk about some thin

it is not all just about christine lagarde and what she wants to do. there is definitely a bit of discord. yvonne: and a surprise for the market leading a little more hawkish these days. let's do a check on bonds. we mentioned treasuries, pretty steady. the u.s. ten-year. we are waiting for the 2% level to be breached. we are waiting and seeing until we get the inflation print rate around this evening as well in asia. 2% for the 10 year yield in australia. talked about when it comes to the rba, it is the last day they are buying bonds and this qe program. china 10 year yield still around 272. the rate dynamic is putting a little pressure on renminbi these days. a lot of the central bank story to unfold. as we mentioned about the rba, yes, they basically, as they started on this qe program, had tripled their balance sheet. it is coming to an end and now but they are still holding onto about 40% of government bond issues. there are still questions on what they will do with those assets. are they going to see some form of rba-style qt? it seems unlikely a

how does christine lagarde adjust? jonathan: president lagarde, the ecb meeting this thursday.is the cross asset price action. let's get you something will names and say good morning to romaine. romaine: exxon mobil crossing the wire right now. 85 billion dollars in revenue. that is a beat on the top and bottom line numbers. we were talking about the best score they have had going back in about eight years. baked into this is a little bit of caution. you could see some hold up with regards to diesel demand, gasoline demand. it says jet fuel demand to track a little lower than what the previously anticipated, and there are a lot of cost cuts baked in this report. we did get that report yesterday about them moving one of their offices out of houston to another location in texas. they also talk about a reorganization of some units here. keep an eye on on mobile. those shares slightly higher on the day by about 1% in the premarket. we had ubs earnings a little earlier. shares higher by about 7%. cost issues a big will there -- a big deal there. the good news is they were able to ra

wristing lagarde -- christine lagarde coming through and changing the nature of the game.g carefully what is happening, trading right now. the sequencing is really important. if we get the rate hike, you have to and the pet program which we knew would happen. then you effectively transition to the atp program, the after purchase program that preexisted the pandemic. have to roll that off quickly before the first rate hike. we don't know. we think the rules are going to change throughout greece. but it is excluded currently from the abp program. it is a friday and maybe everyone has gone home. but at the moment certainly italian yields are higher. weak ones are lower. keep an eye on the reactions to this. kailey: right now up a single basis point. ecb officials, a rate hike after some rakish commentary out of the fed. coming up, what does this mean for bitcoin? it has been on a roll since the pledge at the end of the year, but the rally may be coming to a halt. we will take a look at that next. ♪ kailey: it's time for the bloomberg business flash to look at the biggest busi

. >> ecb president christine lagarde insist there is no rush in the region. she highlighted the limits of the bank powers with volatile prices, saying it needs to be open about what is feasible. lagarde turned more hawkish, rolling out an interest rate hike in 2022. >> in view of the certain uncertainty, we need to maintain flexibility and optionality. we are always data dependent. >> justin trudeau has a sweeping emergency powers in an effort to quell anti-vaccine protest. trudeau says the federal government is jumping in. the government is seeking to choke off the protests to cover -- cryptocurrency platforms. -- believes the nuclear accord with iran is in sight and wants to revive the deal. he tweeted comments after a phone call with iran's foreign minister who told reporters he was in a hurry to revive the accord to allow iran to return to global oil markets in return for curbing activity. hong kong topped 10,000 for the first time, throwing the zero covid push into disarray. 4500 preliminary infections. authorities say thousands are waiting to be admitte

dom, what happened is christine lagarde was more hawkish than expected she refused to rule out a rate hike she had said in the previous year the rate hiefks unlikely and now the situation has changed and that really points to a recalibration, i believe, in interest rate policy for the ecb. that ricocheted back on the united states and all over the world. the euro was stronger, quite a bit, actually, and then you had the german bund come up solidly into positive territory and it spent most of the last several years in negative territory and 14 basis points on your screen there and u.s. yields were higher and fed probabilities ticked up a little bit so what's going to happen isth way lagarde laid it out and they were surprised by the january inflation number and they'll come back in and they'll re-assess policy in march and point to a rate hike and it causes u.s. rates to have to rise to meet with that and also get rid of the inflation-fighting benefit of the dollar it's definitely playing with the macro picture and not overwhelming the meta story that you were talking about which is he

over the next seven days, ecb president christine lagarde speaking on monday. uscp i on tuesday.n retail sales on wednesday. jobless claims on thursday. a host of fed speak throughout the week. maybe that will be the big event ended up itself. keep an eye out for all of that. back with us are victoria fernandez, vishwanath tirupattur ," jim bianco. just enough time for the rapid fire around. art 16, the federal reserve meeting. a 50 basis point hike, yes or no? victoria: no. vishwanath: yes. jim: yes. jonathan: what is higher at the end of the year, the two year yield or the 10-year yield? vishwanath: -- jim: two-year. victoria: i will take the opposite, 10-year. jonathan: final question. given it is super bowl sunday, and this is my home now. rams or bengals? victoria: go bengals. vishwanath: rams. jim: bengals, and it will not be close. jonathan: i appreciate it. what an historic week in this treasury market. victoria fernandez, vishwanath tirupattur, jim bianco. see you at the same time, same place next week. this was bloomberg real yield. this is bloomberg. ♪ mark: i'm mark c

charles: by the way, this morning christine lagarde, ecb, they will not hike rates until they finishingg assets but she made an important point. she really pushed hard. 50% of the inflation crisis is energy. there is nothing that the ecb can do about that. this underscores what you just said, particularly in europe. germany, france, it is not even, they hate fossil fuels, they hate nuclear. let me ask you about something. >> so hard on her, charles. charles: golly. she is brilliant. she is phenomenal. >> wonderful lady. charles: i love the fact she said that. >> she won't tighten policy knot in my lifetime, not in my lifetime. trust me on this. she is a fabulous person. charles: david rosenberg, highly influential economist, strip all the government handouts and real personal income has all but stagnated since the pandemic. without the handouts, income is up 3.3%. u.s.'s vitality rests on policy stimulus in the rear view mirror. the greatest economy in the history of mankind, our vitality rests on handouts, freebies, stimmies is that what we are now? >> rosenberg is extreme left keynesi