european market open. one minute to go until the start of cash equities trading. janet yellen says the only good option for solving the debt limit stalemate is for congress to lift the cap. without this, biting cannot avoid a financial catastrophe. the u.s. jobs report comes in hot once again with an acceleration in hiring and pay gains. will this week's inflation data prove tricky for the fed? with the next boe policy decision on thursday, banks such as hsbc and citibank are pitching trades against rate hikes. even though the market is expecting hikes to come from the bank of england. we will dive deeper into that story. let's look at the futures picture. 13 seconds until the start of european trading. the teachers picture looks slightly positive. we are without london which means will be without some of the volume because of the public holiday in london today with the coronation of king charles the third over the weekend. tax futures pointing higher.

let's see what we get at the start of monday's trading session. so far, little movement across european equities. the euro is stronger this morning. despite the weakness that we saw in german data. we had industrial production data coming through at the end of last week and factory orders coming through. all that looked negative, but it was telling us what was happening in the month of march. we know what happened in the month of march for the german economy and it did underwhelm even if we did not see recession. perhaps the market is regarding that. the euro and pound stronger. the european equity markets is opening in great not suggesting a great deal of movement. the french market down. german mark it up just a fraction at this stage of the trading day. that's what we see across the gmm. i will pull out if you assets and talk about them in more detail. and we will look towards u.s. futures. s&p futures almost entirely

flat. nasdaq futures would have told a similar story, not a great deal of movement. we will get to friday's data and the jobs report coming in hot. risk assets rallied, and that seemed to be more to do with the banking sector and that still has the power to drive sentiment in these markets. msci asia pacific up by .4%. there is a calmness and positivity through the asia session. the chinese equity market doing well. some mining business is doing well. the brent crude price up by .9% and we are reclaiming lost ground from last week. we started last week with $80 a barrel and now it is at $76 a barrel. steel prices is what this deformed bar future is all about. there is a depression in stockpiles in china. steel, iron or -- iron ore

commodities and focus and rising through the asia session that goes hand-in-hand with the risk-on mood in asia trade. on to the u.s. jobs report and friday's numbers came in hotter than expected once again as hiring and workers pay gains continue to accelerate adding to the fed's headaches perhaps. here's how it bloomberg television guest reacted to that data. >> there is definitely a moderation, a cooling in labor market. >> its movie in the direction that they wanted to move finally. >> we are slowing. >> the data do not suggest we are teetering on the brink of a recession. >> it is good news for the economy that is trying to avoid a recession. >> we are far away from of the job market reports need to start to look like. >> it makes the fed's trilemma even harder. >> i do think the next move is probably a cut, but i don't think it's going to come as quickly as the market expects. >> i think the fed still has to keep rates here for a bit of time. >> the fed will not quit into the labor market wits and this

is not a quitting labor market. francine: a host of voices there on the labor market. joining us now to at his voice to the mix as ludovic subran from alliance. we had some a different views there and that collection of voices speaking to bloomberg television. do you focus on the strength of the u.s. labor market, or do you focus on the cracks? i suppose you can pick up on both. they are not mutually exclusive. where the emphasis for you? ludovic: for me, it's all about inflation and this week is particularly important because there is more data on inflation. it is what should determine whether the fed stops or not. the labor market is a lagging indicator. if we think the fed should stop when labor market turns it's already too late and we are in recession. i would prefer to see first a deceleration of prices and that is what we should expect this week.

everyone expects it to be below 4.5% and that should be a good indication for a pause in the next fomc meeting. francine: yes and what you focused on in terms of data points? the money supply has been a focus for you which is contracting. we will get the senior loan officer survey in the u.s. and the extent to which banks are willing to lend right now. will that apply downward pressure to inflation do you think? ludovic: i do think that the banking crisis, phase two of it is acting as a vacuum cleaner for expects -- excess liquidity in the market which is important to calm down the scaring effect of the helicopter money. we see embedded tightening unfolding in front of our eyes. there is also the 12 month lag since the fed started to hike that starts to bite in. of course, credit. credit extension and money supply is very important to

understand the situation going forward. it's interesting that the fed seems to not want to look at financial stability. you mentioned the sloos survey that is supposed to come out about credit centers in the u.s. economy that is expected to be bad. i think it will be interesting to see when the next fomc members are going to speak and talk to this. they need to separate the two. i think it is all the same and that is why i think a pause is warranted somehow because i think we see the embedded tightening starting to balance. francine: a pause is warranted at the fed then. how soon do the cuts come? the market does seem to be thinking that we get a pause until september, and then is pricing in cuts. some people say they agree with that view or others say cuts will not happen until next year. what is your thinking? ludovic: for the fed we don't

expect cuts for the very end of this year. we think the fed will have to hold still for quite some time, and unfortunate, we still continue to expect a form of a recession in the u.s. towards a second part of the year. we think the excess hoarding from corbett is -- covid is waning out. we see lending conditions deteriorating further and this is taking a toll on consumer demand but also on firms's access to credit. we think they will hold still towards the end of the year and then only cut towards the very end of the year. that's interesting. francine: if we have to wait that long to get those cuts, where does that leave the commercial real estate sector? i know you've had concerns about that in the past. a guest earlier suggested this was going to be a slow burn sort of development and many people have had their eyes on commercial real estate for some time already. does it feel like something that is a slow burn and does it feel contained or something that

spills over into other parts of the economy? ludovic: well, i think what is sure is that we have all the ingredients of a so-called minsky moment. we see that everywhere. the liquidity pools or crunches are starting to be visible. of course, the commercial real estate in the doom loop with regional banks in the west is a concern. i don't think we are going full fledged a crisis. i think everybody is trying to avoid this. i am concerned about the mispricing of corporate credit risk especially when i think that high-yield credit is to compressed to be honest. i am also looking at the nonbank financial information like hedge funds because everybody's problem is a very abrupt tightening. there is an additional layer of wrong risk management which is idiosyncratic. the new financial accidents could come from the banking sector, from very specialized hedge funds on commercial real estate but also could come from

a mixture of those two and that's why we are cautiously optimistic towards the end of the year. we don't think we are in the remake of the global financial crisis but this cathartic moment is going to be more frequent in the next few months for sure. francine: ok. catharsis for markets. that is allianz se's chief economist, ludovic subran. german industrial production drops more than expected in march. we will discuss that and more. this is bloomberg. ♪

francine: affect european market open. no london today but the dax is fairly flat in the cap fairly flat. we have trading across other european union -- european trading markets. germany data out this morning. industrial production fell more than economists expected in march according to data this morning. the output dropped 3.4% against the estimated 1.5% month on month data. ludovic subran is still with us. what do you make of the weakness in germany at the moment?

this goes back to march this data as well as a data we got on friday and we already knew that march was underwhelming because we saw the first quarter gdp prints for germany. what are you making that weakness coming through from germany at this point? ludovic: i think it is very telling about the cyclical headwinds that europe is going through on the construction sector which went down -3.4%, the manufacturing and machinery and equipment sector also -4%. basically, the reading is telling us that the second quarter is going to be difficult for the construction sector because the backlog is coming to an end. the third quarter may be very difficult because of the backlog and there are no new orders. you see a deceleration kicking in very strongly in germany being the epitome of this. francine: that is interesting because a lot of the focus up to this point had been on those

full order books for carmakers. yet, here is a key area of the german economy that is expected to come under pressure. what does the trajectory look like for germany then for you? do you see this economy avoiding recession? it did manage to avoid it over the winter of course. ludovic: it's like the u.s., it's going to be a tight rope walk for these economies because the second half of the year -- and the u.s. it is the financial vortex and how will play out. the financial cycle will be the only game in town. for europe, it is all about the energy crisis, the ongoing problem of supply of energy and whether the negative confidence effects will pile up towards the next winter and also the idea that on both sides of the atlantic, you see a deceleration of the consumer. the consumer, the purchasing power, disposable income is really affected by the very high inflation, very high cost of credit, and there is very little wage growth.

in germany just like in the u.s., you see in the end it will be about the consumer because the consumer seems to be fatigued, tired, and this will be visible towards the second half of this year. francine: i was reading research by bloomberg economics that was talking about the labor market in europe not overheating even if we have seen some wage increases. do your point there, how do you characterize the wage story in the euro zone right now? we have seen some wage negotiations taking place. ludovic: it's 50 shades of europe because we have belgium seeing wages to inflation so lame to increase by 10% last year. we see other countries was still a lot of wage moderation. the issue is that productivity is down in most european countries mostly because people that went back to the job markets were in lower productivity segments. there is not so much pressure and plus there was a lot of

labor hoarding. remember europe did a lot of partial -- so there was not a lot of wage negotiation like we saw in the u.s. and u.k. where people went to employment and came back. the big question is the public sector wages and it is a very unionized wage market. there are pockets of wage concerns, but right now, i would say wages are under control. we see savings coming back. there is no wage crisis because even if people have slight the different wages, they don't spend additional money. they save it because they are concerned about the overall economic environment. francine: if we do get increased wages, you say that leads to increased saving not necessarily people spending it. does that mean that core inflation starts to look as scary as it does right now for the ecb then? ludovic: [laughter]

the second big reading of inflation as germany and unfortunately, everybody expects it to be sticky and around 7.2%. the headline is still quite important for core inflation. there are some lags. we see some lags towards lagged inflation and services or sectors where there is a bit more tension for recruitment. to be honest, i still -- the ecb is not done. they clearly sent that message so there is still room for a bit more hike. the big question is whether demand slows down a lot faster in the next quarter. basically, the reading from germany confirms that. maybe a bit more optimistic on the d inflationary pressure although it will take more time in europe than the u.s.. francine: thanks very much for joining us.

that is allianz chief economist, ludovic subran. trading is happening in frankfurt unlike here in london. let's get to the bloomberg business flash. here is sarah halls. sarah: the ft says sergio ermotti is set to unveil the makeup of the bank's leadership team this week. the report says he is likely to keep a few credit suisse executives, including the cfo, coo, and the head of the swiss business. ermotti has said that all options including spin off for sale are still on the table for credit suisse's swiss unit. westpac is expecting a tougher economic environment after reporting profit above estimates. net profit climbed 22% to $2.7 billion u.s. dollars. ceo peter king says he expects intense mortgage competition to negatively impact westpac's emergence in the second half, echoing comments from australi's

other big banks. japan's komatsu is downbeat on china's recovery prospects despite beijing's efforts to reopen. the company's sales in china slowed in the past year while those in the u.s. remained robust. komatsu is the second largest manufacturer of construction and mining equipment after caterpillar. the company's cfo told us exclusively about their assessment of the mainland. >> we cannot see any sign of recovery in china because while china is clearly different, even at the time of covid-19, they have made a lot of investment there. the demand is completely different, and they over invested in 2020. afterward in 2021 2022, they had a significant decrease of demand. sarah: global news powered by

more than 2700 journalists and analysts in over 120 countries. i'm sarah halls. this is bloomberg. francine: thank you very much. sarah halls dubai for us. we will get to corporate news coming up and why warren buffett thinks the good times may be over even after his firm posted 30% gains. more from berkshire hathaway's agm next. this is bloomberg. ♪

francine: welcome back to the european market open. the european equity markets are higher this morning up by .2% on the stoxx 600 despite no london. without that particular volume but we do see markets open elsewhere. let's take a looking at stocks on the move this morning. lizzy burden has a rundown. lizzy: we were expecting a muted start. there are concerns about the spill over from the u.s. regional banking sell off have seen. danske bank up nearly 3% this morning, the second gainer on the stoxx 600 after a newspaper report said that it had the first net increase in clients in a decade since the start of 2022. finally, shell we have been keeping an stoxx 600 energy

index out performed the benchmark on friday. you have seen the bank holiday in the u.k. for king's coronation. it is not the biggest percentage move but it is a big move on the percent basis given the wider index. francine: with oil prices up at $76 on brent that is having an impact. lizzy burden with the details on stocks on the move this morning. let's get to a corporate story that caught our eye. warren buffett has given a gloomy prediction for his own business thing that an incredible period for the u.s. economy is coming to an end. let's get to valerie tytel who has been looking at the details here. what are the main takeaways on this agm for berkshire hathaway? valerie: there were positives. it showed a sharp first quarter profit growth that beat analysts expectations. a 13% gain in operating earnings, but looking forward,

his outlook did look more gloomy. he predicts an earnings decline in this is getting a lot of attention because brookshire is often seen as a proxy for economic health in the u.s. owing to the expansive nature of the business in the portfolio. he expected a majority of berkshire hathaway units to post lower earnings this year than last and he called it an incredible period for the u.s. economy coming to an end. there was de-risking in his portfolio going on. they cut equity holdings by net $10 billion and added slightly to their cash holdings. other things that were noteworthy, he reaffirmed greg able as heir apparent and one of the bigger announcements of the day, he mentioned they won't make an full offer for full control of petroleum which was no because they spent the last few quarters making quite a sizable position in their equity but he mentioned they are not

intending to make land offer for full control of that company. he did mention other things saying he prefers bain capital in japan rather than taiwan which is a reflection of his holdings of tsmc that have shrunk slightly, lamenting how geopolitics have led his firm to cut stakes in the chipmaker. francine: he referenced the management saying it is well-run but he does not like the location. that is about the geopolitics and tension between the u.s. and china. what about the banking sector? he plays a big figure in the u.s. business stage but he played a key role post gmc in rescuing the banking sector, and he has exposure to it still. what is the thinking around the banking turmoil? valerie: he had some quite scathing words for especially the ceo and the managers of first republic but he essentially blamed the bank leaders for their failures and said that they should suffer.

quite scathing words there when it came to first republic, he called their jumbo interest only mortgages. that was a sizable decision in a mortgage portfolio. he called it a crazy proposition saying it was doing it in plain sight in the world ignored it until blew up. quite some scathing remarks on buffett on the ceo's of these regional lenders. he did also remarked on the debt ceiling saying it would be disastrous for the u.s. economy for a default. francine: valerie, thank you very much. more on the banking sector coming up shortly. we will dive deeper into the fall from the u.s. banking turmoil and we will talk to joost beaumont, had at abn amro bank. this is bloomberg. ♪

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network, with no line activation fees or term contracts... saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today.

comcast business. powering possibilities™. these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing. check in on your current speed through the xfinity app or upgrade to the speed that's right for you today.

francine: welcome back to the

european market open. 30 minutes into the european trading day. here are your top stories. treasury secretary janet yellen says congress can only solve the debt limit stalemate in washington by raising the cap. without this, she says biden cannot avoid a financial catastrophe. the u.s. jobs report comes in hot once again with an acceleration in hiring and pay gains. will this week's inflation data prove tricky for the fed? the next bank policy decision is on thursday. hsbc and citibank are pitching trades against rate hikes. all of that still to come in the week ahead. lots of data coming. this is what we have right now across european equity markets. no london today with a bank holiday here because of the coronation over the weekend. we don't have london but we do have other market up and trading. the dax is unchanged and the cac 40 unchanged. u.s. futures unchanged.

interesting sector movements evenly divided between those sectors going higher and lower. let's have a those. slightly more positive bias to the sector breakdown right now. the banking sector is a best-performing. energy sector not doing badly. insurance and chemicals to the downside. energy moving higher. higher oil prices morning. last week, we started the week at $18 a barrel on brent. now we are up around $75 a barrel moving higher up a percentage or so this morning that may provide energy to the energy names. the banking sector up by 0.5%. it is interesting how european banks have managed to disconnect from what we have seen happening stateside. european banks rise this morning but is that to do with the u.s. rally on wall street on friday or just to do with a stronger interest rate environment in europe and what that is doing to net interest margins? let's go to the u.s. banking

sector and european implications. the selloff in u.s. bank shares is threatening to push them below a technical threshold. concerns about the stability contributed to a tempestuous week as aggressors -- investors aggressively bet against it bank stocks. joining us now as joost beaumont from abn amro. we saw a letter pressure on regional banking names. friday looked entirely different. friday we saw a strong rally in regional names and some said that was short covering. do you have any assessment as to whether the strength we saw on friday is going to be long lasting and endure into this week or will we be back to talking about weakness in the u.s. banking sector? joost: that's a tough question. i think conditions at the moment are so volatile. last week, what we saw it in the u.s. was clearly that investors were looking for the weakest link to the rescue of first republic bank.

i shifted quickly to the next week for pacwest and western alliance and indeed on friday, the stock price rose but over the week, still down. i think it's too early to say that we are out of the woods. it takes time for investors to really assess what will go on. of course, bank regulation for smaller banks in the u.s. is likely to strengthen again, which could increase the cost of doing business. they also see rising funding costs, so all in all the outlook for banks is getting tougher i would say. francine: in terms of the u.s. banks i'm a do think the concern is still on uninsured deposits or is it now on the business models themselves or around the exposure to underlying weakness

in parts of the u.s. economy or balance sheet management? where is the markets focus when it comes to weakness in the u.s. banking sector it now? joost: it is clear that fear is dominating and the focus was on the earnings share deposits but if you look at the q1 figures for instance western alliance and pacwest they have a lower share of uninsured deposits, more aligned to the european banks. so, that should make them less vulnerable for deposit light -- flight. on the other hand, the total balance sheet of these banks is much lower than first republic so that should also make them easier to solve to be honest. if you look at commercial real estate exposure, that is right hi. it could be that investors will shift focus to that and that should -- francine: has there been read

across into europe what we see at the moment? at the time we were dealing with silicon valley bank during march, there was clearly then subsequent to that a crisis around credit suisse. the has now been resolved as huge and incredible as that was. do you see any links now between the regional banking story in the u.s. and european banks because on a day-to-day basis, the european banking sector seems to go its own way in terms of share prices. the earnings story has shown rising net interest margins so far. what have you taken away from that? joost: the key take away from what is happening now is the second round of turmoil and tensions in the u.s. banking sector, there is no real contagion to the european banks. of course, they are not immune from what is happening in u.s. banking hector, so also last week we saw debt market spreads widening and more volatility and

uncertainty. but if you look at the extent of the whiting, it all remained quite limited and indeed like you say, from a fundamental perspective, they had an earnings season well underway and we have seen most european banks posting better-than-expected earnings. the benefit clearly from the rising interest rates with higher net interest income. also, loans, nonperforming loans are stabilizing or even reducing. capital positions on balance are strengthening. in that sense, the european banking sector looks to be in pretty good shape. i have to be honest, that is may be as good as it gets. francine: that's interesting. let me ask you about at1s and that market, a debt issued by the banking sector in europe and was in focus at the time of the collapse of credit suisse.

81 investors were wiped out by the credit suisse rescue. subsequent to that, you tell me that there been comments from unicredit and lloyds bank. maybe that has reassured some investors around the at1 market. what is your assessment there? joost: the real test is still pending. for the at1 market and the damage done by the swiss authorities to this market still needs to be really assessed. unicredit and lloyds both called their upcoming at1s but like i said, the real test is spending as unicredit already said they don't need to refinance the at1s and will not issue a new at1 in the same for lloyds which already issued them a few months ago and the amount of the redeeming at1 was pretty small. it is positive if unicredit had

not called the at1, that could have fed rumors and unrest in at1 market and could be a sign that they and you would think they are not able to refinance them. it is positive in that sense for the markets. we also see in spreads of at1s they have come down definitely from their peaks seen after what happened with credit suisse. the real test is still to come and maybe september we will see some spanish banks with at1s. that might be the real test. francine: thank you so much. joost beaumont, head of bank research at abn amro. treasury secretary janet yellen warns there are no good options for solving the debt limit stalemates. that is other than congress lifting the cap. we will get more next.

this is bloomberg. ♪

francine: welcome back to the european market open. we are now 42 minutes into the trading day and we have european equity markets flat to positive up to .2% on the stoxx europe

600. janet yellen says there are no good options for solving the debt limit stalemate other than congress lifting the cap. she spoke on abc's this week. >> all i want to say is that it is congress's job to do this. if they fail to do it, we will have a an economic and financial catastrophe that will be of our own making. and there is no action that president biden and the u.s. treasury can take to prevent that catastrophe. francine: let's get more on this from bloomberg's bruce einhorn. bruce, give us your thoughts on what we just heard there from janet yellen because the is in the context of some people suggesting maybe this is not all down to congress and maybe there is the 14th amendment that can be called upon year to allow president biden to just keep issuing debt, but janet yellen

seems to be pushing back on the idea that president biden can do anything himself and suggesting this is all in the hands of congress. bruce: you are right. what secretary yellen was saying , she kept deflecting when it came to whether or not 14th amendment could come into play, saying there just needs to be a clean lifting of the debt ceiling. however, significantly president biden interviewed on friday and did not close the door on using the 14th amendment. he said have not gotten there yet. the word yet is doing a lot of work in that sentence. the 14th amendment is something approved for the constitution back in the 1860's post-civil war, and it said that the public debt of the united states shall not be questioned. some people say the wording of that amendment says that the president has the ability to say congress by not liftine debt ceiling is not following the

constitution and therefore, the president can ignore congress and continue issuing debt. it has never been tested obviously, and at the president were to do that, certainly there would be a lot of uncertainty about whether it would stick. secretary yellen is saying clearly we would much rather just have a clean lifting of the debt ceiling. francine: ok and with that in mind then, where are negotiations with lawmakers, some of whom have been admit that they don't want to increase the debt ceiling. they went to attach strings to any increase. where have we got to and status of those negotiations? bruce: they have not started yet but there is a meeting in the white house scheduled for tuesday with president biden and congressional leaders including house speaker kevin mccarthy. that sets potentially the beginning of a round of

negotiations where all the principals are in washington. there is not a lot of time because president biden is going to be traveling to japan for the g7. congress will have various recesses. there is only about a week or so were all the people are in washington at the same time between now and june 1 when we could be heading an x date. there may be negotiations. one possible solution that some republicans and democrats have both floated as a possibility of passing a short-term extension of the debt ceiling that could at least get us beyond june 1 date and give the sides of more time to come to linda agreement. patrick henry, republican in the house over the weekend said that that is an option that is definitely on the table. we might have a short-term solution, but it's not a solution. it would just kick the can down the road a bit.

again, there would have to be linda agreement about what to do about the debt ceiling and so far, both sides are pretty entrenched saying they are not going to budge on working towards the other. francine: bloomberg's bruce einhorn with a briefing there on the debt ceiling. the debt ceiling deadlock is just one of three major obstacles that the u.s. economy will have to overcome to skirt a recession in the second half of the year. fed chair jerome powell reckons it can be voted but today's big take story looks at the odds stacked against him. jill joins us now. you have taken a look at this and jay powell's assessment of the u.s. economy and pointed to three areas where it might be found wanting. what are the biggest warning signs that powell needs to look out for it? jill: as bruce explained, certainly these talks over what is happening with the debt ceiling is one of the big concerns going forward and we will have to see how it is resolved in the weeks and

potentially months ahead. we were taking a look at our mental risks that are presented by conditions getting into the summer. we have some extreme climate issues as we head into the summer months and could be looking at potential commodity supplies and further price pressures that could make inflation which is already very stubborn continue to be a problem. then there is the ongoing banking crisis. how exactly that may continue to affect powell and the fed going forward. what we have seen is a cascading level of bank failures starting with svb and then continuing risks of contagion in the past few weeks which has become a continued pain point for powell to take a look at. i don't know that those are issues that are going away anytime soon. francine: we will get more details from that sloos survey

of senior loan officers and credit provision to the u.s. economy buybacks. in terms of the rate story, chair powell has been pushing back against rates expectations, rate cut expectations because he is sticking to a more positive view of the u.s. economy. many in the market due to rate cuts on the horizon. what are we expecting to see their? jill: in addition to powell's remarks, pushing back against the idea that there could be cuts coming forward. on one hand you have to say that because even if the fed pauses, rate hikes going to summer, they still to preserve some room to make adjustments going forward because as we have been discussing, inflation is still incredibly sticky and has not been tempered enough for powell to consider cutting rates. we had the added convocation of really strong job figures on

friday giving even more room for that idea that rates could continue to be high. i think you are at investors take a look again at this credit crunch and some issues within the banking sector as reasons why maybe the economy as it begins to slow, there might be reason to pursue lower rates a bit earlier. maybe that is not something that comes in july but september or onward is when you might start seeing adjustments. francine: jodi says joining us with the latest on the big take story. it is on the bloomberg website. let's get a first word news update was sarah halls. sarah: china reportedly cut oversee access to several data sources partly because of reports from u.s. situations that alarmed officials. the wall street journal cites sources saying beijing became concerned about research by u.s. think tanks. focused on sensitive issues such

as cooperation between the military and private sectors. china's tighter grip on data comes as the tensions with washington mount. the financial times is reporting that the european commission has proposed sanctions on several -- seven chinese companies accused of selling equipment that could be used in weapons for russia's war. among the companies on the list are three hc semiconductors sent out electronics and sigma technology. they need unanimous approval from the 27 eu member states before it can be enforced. the leaders of japan and south korea say they plan to work more closely together on security including threats from north korea. president yoon and prime minister kishida agreed to cooperate on chips. the deals were struck during kishida's visit to seoul, the first visit there by a japanese leader in 12 years. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm sarah halls.

this is bloomberg. francine: sarah halls in dubai. coming up, we will find out what to expect from european earnings do this week including french banks. that is next. this is bloomberg. ♪

francine: welcome back to the european market open. we are 54 minutes into with the european trading day.

no london today. london is perhaps awake but they are on a public bank holiday. slightly positive on the markets are open. a european country pities -- companies have proven resilient so far but that may change as inflation risks remain elevated. let's bring in april who can give us a preview of earnings stories that we are focused on this week. french banks to the four. what will we hear from them? april: good morning. deposits trends are set to be the main focus for french banks this week starting with credit agricole which has a strong regional banking network and they could see them deliver better deposits than its peers and could lead to potential revenue beat for its retail banking segment. however, analysts are flagging the volatile markets that could potentially lead to lower asset inflow revenue. moving on to societe generale

which has a slightly less diverse portfolio compared to its peers, credit agricole and societe generale. analysts are predicting that revenue could potentially drop from equities training could drop for society general in the first quarter. francine: what about the dutch banks? we will hear from abn and ing. april: that's right. the european central banks most recent bank lender survey showed that higher rates are starting to work their way through to the economy and dutch banks are expected to show an upswing in net interest income and particularly abn amro which ended 2022 on a strong note with a jump in net interest income. analysts are expecting the growth to slow to about 13% in the first quarter. for ing, which is also inspected to lag peers slightly in net interest income because fixed

interest -- rate contract mortgages dominate in the markets in the netherlands and belgium for ing. francine: thank you very much. april roach joining us there the corporate news flow that we expect this week. that is it for the european market open. surveillance is up next. european equity markets without london are up by .2%. the cac 40 on par with that. some of the best gains coming from the spanish market. the ibex up by 0.5% this morning. energy and bank stocks doing really well this morning. the energy stocks picking up on a higher oil price up by just over 1% on brent. we will continue to track these markets in europe and get you started for the u.s. start. this is numbered. ♪ just go to 5hecharge.com for details.

5-hour energy...charge it up!

people are always asking me two words come to mind for me. one is responsibility, the other is purpose. it's just so inspiring to do research that impacts human lives. stand up to cancer has been a critical partner in advancing research for cancer. cancer research saves lives. so please help us fight in this battle against cancer.

>> this is "bloomberg surveillance: early edition