barclays and nomura say next we do can see a cut in the fed and even a pause in qt. that debate continues on here whether it is about fighting inflation or ring fencing this financial stability appeared to a look at japanese bonds. you mentioned the jgb yields and banks. we are seeing the contagion effects hit lenders in japan. you wonder why. for the most part it is because they are mostly exposed to u.s. treasuries these japanese lenders. you are seeing deep moves of 7% or 8% of the downside. also, there is massive repricing when it comes to the boj as well. because the fed's may be about pausing or even cutting, central banks here in asia might have a little bit more to breathe particularly when it comes to the boj. you are seeing when it comes to the 10-year jgb a month now just around 28 basis points. we are way below the new billing of 50 basis points and we were briefly just below the old ceiling as well. it goes to show how much the massive repricing has been playing out across asia. tom: arguably using the pressure somewhat on mr. ueda as he takes over the h

goldman sachs a pause and nomura says a cut. i was reading another note from a nomura derivative strategist who says he does not think the fed knows what they will do. they will watch the market until the last second before making the meeting. to see stocks finish higher is a little surprising. haidi: we are still watching it when it comes to 81. major losses. the effect when it comes to funding conditions was like several rate hikes in one day. emily: we have seen so much great volatility. of course bond volatility in that a tv one space after the plunge on monday. we saw a lot of a t-1 bonds from european banks rallying after u.k. and european regulators assured these investors that typically the 81 bond investors would get their money before equity shareholders. this coming after. that did not happen in the credit suisse deal, so there was uncertainty. but for right now the market calming from the big plunge we saw on monday. still a ton of volatility in the bond market and the rates market ahead of that fed meeting. haidi: c

nomura is cutting there's for executives. what is the story there?sell: another example of how banks are looking at cutting costs. they're looking at cutting 30% of the entertainment budget for senior managers. entertainment is a discretionary cost and easy to cut, maybe in advance of more substantial cuts like cutting staff and bonuses. they have not been cutting staff as aggressively as other wall street banks. we reported overnight that they are actually hiring in some areas. this is a case of calibrating and catering to their strengths. dani: russell, thank you very much. i would rather keep live job and lose out on dining. let's get the first word news with simone foxman. >> jp morgan accusing jes staley of concealing an inappropriate relationship with jeffrey epstein and vouching for his character to keep him as a client. the bank filed a third-party complaint against the former ceo in a federal court in manhattan. he has consistently denied knowledge of epstein's abuse. the netherlands is preparing restrictions on the export of some chipmaking

nomura, expecting a rate cut of 25 basis points.lt to the quantitive tightening program at the march meeting. the reason they are saying that is because the moves we are seeing so far from u.s. regulators have been insufficient to calm markets, they say, more is needed to do so, and it is possible they could create any lending facility. -- a new lending facility. >> and the bets are helping u.s. tech stocks, actually. what's a recommendation, the longevity of the optimism? >> we saw in the u.s. session overnight the nasdaq getting around half a percent, even in futures today, still pointing higher. morgan stanley is saying if you see any post svb bounce in stocks, we will sell and that opportunity because we do have morgan stanley, one of the more bearish on wall street, correctly predicting the selloff and also the recovery in october of last year. he says essentially we are going to see a new bear market low still forming. he's not saying we will see any sort of systemic risk coming from svb and other banks that have collapsed, gi

you had nomura, which we'll talk about in just a moment, calling for a cut. barclays is calling for a hold up. they don't need to see what this inflation print looks like. so they're they have enough information for the fed at least to to hold. meanwhile, though, when you look at that last chart, that's that's overnight vol and bloomberg on the bloomberg usd gauge and as you can see we're at about the highest level here since the elections and beyond. that is when the pandemic first hit. so there is and understanding here that tonight might be topsy turvy here. exactly. and we've got nearly 100 basis points of rate cuts now being priced into the year end. and some out there. andrew tye says to be precise, suggesting that that could all start off this month. fed could actually deliver a 25 basis point rate cut as well as pause its cute as well. the argument is really about ongoing financial uncertainty, potential flight of deposits still looming, financial stability risks. kathleen hays our global economics and policy editor. so we do have that inflation print

nomura is calling for it when he five basis point cut in addition to an end of tightening. the economist there are saying "we expect the fed to stop quantitative tightening and the choice of deposit versus non-deposit investment vehicle matters for banks. ending qt should keep the amounts of reserves more apple than they would be otherwise. those quote -- ample then they would be otherwise." the team at morgan stanley is forecasting the second quarter of 20 to four for that moment. what would bring that forward? ellen: i think that the fed's guidance can bring that forward. already when we see results of the primary dealers surveyed, you will see that expectation has shifted forward among consensus because of the funding pressures and the question, really an unknown answer, as far as the fed is concerned, whether these funding pressures emerge because of balance sheet runoff or not, or, is it contributing to that? banking analysts would see -- say stop qt now. the fed would look at reserves in the system and to see -- and see it was very steady until march 8. that would sug

nomura saying they see a cut of 25 basis points and a halt to the qt program. all that tracking what's happening in the debt space. in terms of equity moves, tech stocks, you can expect a bit of a bounce but financials coming under pressure, outpacing the losses in the opening moments. following the moves we had on wall street overnight. king dollar in focus and the retreat from that view is playing out in fx markets. watching let's happening in the japanese in particular. this morning, trading fairly flat but it did strengthen yesterday against the dollar. a lot less focus on the yield differential between the fed and boj. equities-wise, we are expecting a drop for most markets. a number of familiar faces on the economic leadership, so a soothing of nerves and this time of great uncertainty. shery: perhaps some continuity in beijing but you are talking about 19 87 black monday and that puts things into context when it comes to these historic moves in the bond space. we keep an eye on futures -- the 10 year yield fell to a six week low. we will see how it comes

that means nomura to cuts next year, that also means we are only a third of the way in this tightening cycle. the other two thirds will happen through markets pricing out rate cuts, at least by half of what is currently in the yield curve. second, the rising real interest rates in the u.s. against much weaker growth. that means we sustain much higher in order to take inflation out of the weight sensitive services sector. francine: thanks much for joining us, lena komileva, lena stays with us. we will talk about the path forward. the ecb says market bets for a 4% rate peak may prove accurate. we will get more on that next. this is bloomberg. ♪ tom: welcome back to the open, happy friday. 10 minutes into the european trading day, across european markets, gains of .5%, the upside on wall street yesterday, yields coming up slightly across the curve both in the u.s. and here. francine: ecb governing council members has market bets for a 4% peak they prove accurate. still with us, g plus economic , chief economist lena komileva, philosophically, this could be the fed or ecb, you said fed had

nomura came out without call on the fed.here's a debate saying they'll have to stick with 25 basis points. sing the bond markets are getting ahead of themselves. where you see the terminal rate by year end? >> you can go either way. i could make you a case at 25, nothing depending on the rest of the week. once we get past this problem i can see the terminal rate which is around 475 to five drifting out to the mid-fives because again i don't perceive that this is going to be a rerun of 2008. i think we will resolve this issue, it might take a month or two and we will be back to learning about inflation and that's why the terminal rate will go back up. francine: overall, we've been looking at the fallout from european banks. is there we were the revenue stream, people have to offer more money to depositors to keep them there and they'll be slammed with more regulation. >> i think on the deposit rate you've awoken everybody, now we've all logged onto our phones and we know how to use our phone. now are noticing there's money ma

nomura expects the fed to cut rates by 25 basis points and put an end to quantitative tigh tightening investors are pricing in a 60% probability of 25 points, but expecting to cut in june the fed is expected to stick to the hiking path next week raising rates by 25 basis points, but that would be the wrong move >> the fed will raise 25 basis points i would say at this point, the chance and things are happening so quickly, although it is a week away, anything can happen things are happening so quickly and i think the fed is not going to go 50 i would think 25 and i know people are wondering if they go up at all. i think to save the program and credibility, they will raise rates 25 basis points. >> investors will look for signs u.s. inflation may have cooled when the data is released in a few hours. it is expected to rise 0.4% per month. and 6% cpi year over year is the number and this is the main driver ahead of the fed rate decision next week. the collapse of svb and threat in the banking system has raised the possibility the fed could reverse course sooner than thought. i know there

kathleen: economist the last couple of days and even yesterday we had nomura saying there is going to be a cut. it is not to thousand eight. they don't need to pull out all the stops. let's see what the markets are doing and they are pricing back in a rate hike next week. the odds cut down to 50 basis points peered know they're back up to 80 basis points. this the great chart because you can see people are saying maybe the trammell rate is 6%. it felt so below 5%. now it is over 5.1 where it had been for a long time. ethan harris has been watching the fed for decades at bank of america. he says the fencing around the financial troubled institutions is going to work and the fed is going to have to start hiking rates again. the big question is do they do a pause, a prudent pause order they say in the wind at my back could the tailwind from the stronger cpi report, that is the bet investors have to make. shery: we are really watching what is happening in the banking sector with the wall street journal reporting the fed is considering tougher capital and liquidity requirements for midsize

nomura said they might cut. david: you put everything together, and no one knows. they do say that markets face uncertainty, but could they ever exist without uncertainty? that is the deal. david: yeah, fully knowing. not really knowing is half the battle. plenty more head. the opening in thailand. this is "bloomberg markets: asia." this is bloomberg. ♪ lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com. get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan wealth management. >> almost 11:00 a.m. in singapore, shanghai, welcome to this is for bloomberg subscribers only. -- "bloomberg markets: asia." rishaad: china leadi

goldman sachs, citibank and nomura are just some of the ones that have announced cutbacks.anaging director from hong kong. >> from early 2021 to middle 2022, we saw a time of a high degree of demand and a lack of supply of talent. a dwindling talent here in hong kong. the last six months, -- with the recent news in the banking market it is put the lid on it. it's a tough market. >> ubs has yet to announce any layoffs, but before the takeover credit suisse was in the process of cutting 9000 jobs. >> what happens to the business and job cuts? >> it's too early to say. we will be considered employers, but we need to do this in a rational way thoughtfully we have sat down and analyzed what we need to do. >> as for current employees, a singapore-based spokeswoman told us staff should continue to work to the best of their abilities. guy: talking about what comes next or doesn't for those involved in the merger. let's carry on the conversation. tom metcalf joins us for his daily appearance. how quickly does this process unfold? what would be logical in terms of they want to keep a

new this morning, the team at nomura are betting the central bank will cut 25 basis points next week and stop reducing the size of the balance sheets let's bring in delano saporu and mark avallone. delano, i'll start with you. cpi in a few hours a month ago, it was a huge market mover does it have the same meeting with svb >> frank, thank you for having me i think it does have the same meeting. if you look at the comments from the fed over the past several months, we are still looking at inflation being the biggest thing the fed is trying to combat thankfully for a lot of consumers, unemployment mark hasn't moved much. i don't think that moves much until we get to summer so, if that is the case, if cpi numbers come up and the print is hot later this morning, i still think the fed is raising rates and continuing to let go a little bit of the balance sheet. >> mark, same question for you again, cpi is a huge market mover. when jay powell testified before congress, he said the fed is watching this data point along with the jobs report before making the decision. that was before svb obvi

we also had nomura raising their terminal rate to 4.25 for the ecb.alerie tytel staying on top of the bond yields for us. let's stay on top of the conversation and bond yields have moved half a trillion euros since the start of the year, the fastest in the year. let's talk to priscilla. a fantastic story. i thought this was a time to be tepid. why are governments and corporate selling bonds like never before? >> it is exactly because of that, there are so many calls out to the street. the rates will remain higher for longer, and companies are afraid. they need to get bond sales out there before it's becomes even more expensive, so that is the narrative. on the one side, you have a market where fund managers are full of money, they're willing to buy new bonds, but you have the trend ahead of you that the only thing we know so far is interest rates will become higher for longer. dani: but at the same time, companies are selling bonds when rates are going higher, so what is in it for them? >> for companies, you look at now and what can happen tomorrow. i

yesterday we got the big news, headline from nomura that they think that the fed will cut to offset the financial volatility and follow. -- fallout. blackrock says they will do 25 because inflation is a bad problem. you run through them again. on the headline, the monthly came down. energy prices were a big part of this. they go up and down, they do not give us a trend. on the monthly number, it went up. what happened was, sometimes he focus more on the month, or the year-over-year. the year-over-year went down on both counts. but not very far. you've got components here, like airfares, auto insurance that are moving higher. those are the things that drive services. you have rent to rise. it started. to slow down but it is expected to stay high for the next year. clothing prices are bit better. food at home is flat. some mix news. the super court, core core, core, take-out food and energy. the shelter costs and then you see it is not going down. that is what jay powell wants to see. let's look at this chart. you can start at the bottom and look at how energy prices are flat, you see the

gareth nicholson from nomura singapore limited joining us right now. we were going to talk to you about higher yields, but this china story is forcing our hats. what do you make of these numbers? this rally was looking for a catalyst. >> absolutely. we expected it to be stronger, but not the strong. this is a very constructive at least in regards to how well the china reopening is going. it seems to be handled pretty well, supported pretty well, seems to be flowing down into production and manufacturing sectors, which is very constructive for china. this plays out brilliantly for the region, for asia in general, but also creates uncertainty around inflation and how this will play into other markets. the probability of volatility is growing as we see this economy really starting to gain traction. a very exciting time for investors. yvonne: the macro picture is quite conflicting here. the china reopening story and this mess fed repressing we have seen in the last few weeks. does that make investing a little bit more difficult. a stockpicking a better str

by the way nomura thought there would-be 25 basis point cut. maybe they were swinging for the fences there. here is the thing. the federal reserve is dealing a lot of different levels. this is defining moment for the fed chair. you have to look at it through a number of lenses including what happens with the current banking crisis. the federal reserve has, chairperson is something of a household name. now they're facing different kind of pressures. think about this, "politico" said what is happening with the bank was unforeseen, unforeseen. that is political. that is a political newspaper, right? american bankers said it was predictable. when you deal with that backdrop, public relations and trust all matters it is really interesting. i want to start the show off with someone who talked about this for years and years and years. the author of the road to ruin, the death of money, aftermath, the new great depression. let's bring him in new intelligence editor jim rec ads. this is jay powell 3.0. supposedly laser-focused fighting inflation. looks

if nomura is right and they cut, but the tables have turned very quickly. haidi: the question when it comes to credit suisse, are the problems big enough, the systemic risks, big enough? four potentially the ecb to change course even more? kathleen: in terms of outlook, the first question you posed no one can answer right now. when things get so unstable, you just cannot say for sure, even a central banks try to shore it up. i like the way bloomberg economics puts it for credit suisse, they say is it too big to fail. it is certainly too big to ignore. now, the bet is that they will hike the key rate, but they will only do 25 basis points. and the other side of that coin is well, they've got high inflation still, are they going to lose their inflation fighting credibility. the german inflation number out today, year-over-year, 9.3%. that was supposed to be down to about 9.2%. that's moving in the wrong direction. i want to share something, a member of the board of the european central bank gave an interview to a german newspaper, what he said was in fact, th

executive economist at nomura, institute. kathleen hays there. you can turn to bloomberg tli .unanimous decision, no change at the boj. vonnie quinn with the first word news. >> the federal reserve is assembling a new crypto focused team to help ensure it is on top of developments in the asset class. the vice chair will help bolster the fed's oversight abilities as the central bank works on crypto guidance. u.s. bank regulators have taken an aggressive posture on digital assets is the collapse of ftx. u.s. lawmakers have accused norfolk southern of lacking transparency following the chemical spill in ohio. its ceo saved a grueling after hours -- after another one of its trains derailed in alabama. >> i want to begin by expressing how deeply sorry i am for the impact this three ailment has had on the residence of east palestine and the surrounding communities. i'm determined to make this right. >> a new york judge has ordered jp morgan to turn over more records from the ceo to the u.s. virgin islands. the orders related to a lawsuit accusing the bank of facilitating jeffrey epst

nomura still thinking a cut, that is that rare exception here on some of these calls.nd everything lies, everything still looking pretty good. i guess this is the calm before the jay powell press conference. tech leading the charge here today. david: all sector groups are moving higher. is the fed going to be called to push back against the up to missing -- optimism out there? what is there for them left to do? yvonne: bloomberg economics says what we seen from all the bank collapses, maybe it replaces two rate hikes for the fed. does that give you a little less room to hike is the key question here. but yes, we are seeing a broad rally here. palm oil heading the opposite direction here in the region. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan weal

not for you to speak for nomura, but what we need to happen between now and 2:00 p.m.e to cut rates? marvin: date couple weeks ago -- a couple of weeks ago we were debating how much higher they were going to go in terms of expectations. for us to go to banks on the 25, potentially nothing, and then they cut his -- and then a cut is based on systemic risk. that view requires the systemic risk type of concerns we have seen call me that over the course of the past week come back with a vengeance. you mentioned the market is focused on some of the larger regional banks under pressure. for sure, those situations would need to get much worse for to get a cut of it. lisa a.: my favorite part games has been not only tell me what the fed is going to do but how will the market react? let's take they raised by 25 basis points tomorrow. how is the market react? marvin: it is more than just the 25. it will be signaling what it expects afterward. if it is a dovish hike the way it seems to be building, i think the market takes that as risk on. we have taken out the 6%, six plus perce

some are not so sure, though this morning the team at nomura says they are looking at their balance sheetight now, that would be a shocker >> yeah, i would not be in the cut camp, becky. you saet it up well, because in an hour we could have a potential clash because a market that has sharply different interest rates, it meets the reasons why rates were high to begin with, high inflation take a look at the outlook here. it's not a modest look cpi still high on the headline, and the year over year, 6%, down but -- what do you want to call it triple, the down target of the fed. the core cpi, not much there numbers like that, well, you look at that and say the fed should be continuing to hike, but they will not, of course, incorporate the latest potential economic fallout from the banking meltdown, and we have included in this, the leading edge of the lagging affect of the rate hike. the pricing for the year-end rate, i am speechless about the plunge rate. down 4.23. that's down from 550 as recently as thursday. what about the march meeting take a look. still a quarter point expected some see