upcoming trip to asia to be in d.c. for those negotiations. fed officials diverge on whether a pause or another rate hike is warranted at the meeting in june. u.s. futures point higher. commerzbank boosts its outlook for net interest income, joining peers in benefiting from higher rates. meanwhile, siemens raises its forecast for the second time as orders surge. francine: let's take a look at the futures. ftse futures are down 0.3% and it is all about the debt ceiling as the conversations intensify. we look at the inflation data for the east. tom: fed officials are split on whether you pause or go higher. read a master is not in the space where she is ready to push the pause button, but it seems like the pause posse is gaining momentum at the fomc.

jp morgan thinks the markets are right to start pricing in cuts later this year, pushing back on the narratives coming through from the likes of blackrock. the spanish ibex currently down 0.6%. the u.k. ftse 100 knocking 27 points off of the index trading. and losses in france as well. the cac down 0.4%. looking at the changes and any movement in terms of debt ceiling talks. i want to focus on the session in asia briefly because you saw some downside in mainland china and hong kong, but it is japan that remains the standout. four straight days of gains for the topix. goldman sachs says we could be close to a rare bull market for the japanese market. again, back to levels we have

not seen since the 1990's. is that a safe haven in the sport of storm or these risks? futures in the u.s. pointing to modest gains as we way up the challenges. the two year at 4%, noting that the t-bills come good after june 1, the x date for the treasury, and cds spots blowing up as well. distortion on whether that has been priced into the equity markets. the euro-dollar at 1.08, range bound. it is a bid for the greenback the session. francine: let's dig into the sectors on the move and i have a few groups making up the stoxx 600, only one gaining. that is health care. the biggest loser is financial services. they had the testimony from firmer first republic executives and i have utilities losing the most.

tom: let's get back to the debt ceiling negotiations. they are set to intensify as president biden heads. to japan for the g7. biden and lawmakers held the latest round of talks yesterday dang that while the two sides were far apart, they were hopeful a bipartisan deal could be struck. let's get more with bloomberg's reporter. how much movement was there is the meetings yesterday? >> both sides showed some sort of optimism that a deal could be in the works of they also poured cold weather on what they said was progress. house speaker kevin mccarthy and biden both said the deal could come together, but they said that they are far apart on various issues. history tells us these deals are struck, but this is a bit

different of a house republican caucus than it used to be, and we just do not know what will come out of it. so far after this meeting, things had been better than they were, yet there is a chasm between the two. francine: diplomatically, what does that mean? you have a u.s. debate domestically, but what does it mean for diplomatic relations? jon: it is quite a hangover of biden's g7 trip to hiroshima, and he will arrive on thursday. g7 starts on friday. and biden has also cut short a part of his planned itinerary, which included visits to australia and papua new guinea. it can hurt some of the u.s.'s push in the region to counter china. china has been looking more and

more to the pacific islands, seeing this as a way to extend its presence in the region. and the u.s. with its australian allies have been trying to push back. there was also supposed to be a meeting with the quad group which also includes japan and india. that has been moved to the g7. it creates a bit of a friction with the new government in canberra, but biden has invited the australian prime minister to washington for a state visit. no dates planned yet, but hopefully that will sooth things over between the two. francine: thank you so much. bloomberg's jon herskovitz with the latest on the debt ceiling. joining us now is grace peters, jp morgan's head of investment strategy emea. i am sure you get a lot of questions on the debt ceiling daily. how do you prepare for this? grace: the questions are coming fast and they have picked up

over the last month or so. you can see when we mentioned before the one-month t-bills, you can see parts of the market significantly pricing the risks. on a headline level, it is leading to two reasons why the equities have stopped over the recent months because you are not paid now to make big bets ahead of this. the market also does assume that it gets resolved. i think that probably is the right decision and i am pleased to see overnight we are seeing a bit of softening of the narrative coming in, but how we are thinking about it now and we are preparing for our midyear outlook, how the markets will fare for the next 12 months. we have had a long-term s&p target of 3700 to 4200 as we have been planning, but as we get forward and if we get through the debt ceiling unscathed, it can start pushing the upper limit of that range as you look forward over 12 months

because of the underlying fundamentals. tom: and we want to unpack your views on that call because it is interesting. let's stick with the debt ceiling. in terms of those dissertations, as it an underpriced risk for the s&p 500 for u.s. equities? grace: when it comes to u.s. equities, yes. in the short term when we go back to 2011 when the u.s. debt was downgraded, you saw the s&p fall some 18%. typically the s&p would be down 5% to 7% into the event. when we go back into 2011, looking six months below the downgrade, equity markets moved 6% or 7%, so there was a sharp drop down but then a swift recovery after. short-term term, yes, but that would be a dip we would buy if it comes to pass. francine: in the short term, do you buy gold or do you have to

protect yourself in case there is an unlikely default? grace: yes, i think gold is one way we have been playing it. gold has benefited from the fact the dollar has been weaker. broad equity hedging is another move, even buying longer dated treasuries when we think about hedging downside risk, buying out the 10 year parts when it comes to the treasuries. it also protects you from risk off and lower growth compounding further with debt ceiling concerns. tom: let's go back to the 12 month view. what underpins your view that markets are likely to break out to the upside rather than the downside? grace: we have been in this trading range for a period of time as markets have been growing into the multiples and digesting the worries that are commonly put out there with so many people unsure. tom: you have also seen at overdone, the wall of concerns. grace: at 3700, the wall of

concerns is discounted, but that played out in october of last year. we know the markets are forward-looking and we know that when recession fears were largest, that is when we saw the largest market draw down to the developed markets. it was discounted at the beginning of the fourth quarter last year, so the markets are climbing the wall of concerns, such as speak. and when we are forecasting for mid 2024, and when you start to think about getting a few percent growth on 2024 numbers, then that can get you to do hundred $50 of earnings, putting that around 18 times and putting you in the 4000 range. francine: we also spoke to the head of global rates at j.p.

morgan asset management and he believes the markets are right to price in fed cuts. does that change the way you view your portfolio? grace: we agree with that view and we have got two cuts penciled in. the market has three, so we could see more movement there, but we do agree the economy is weakening. a u.s. recession is our base case and we should get evidence of fact as we go through the third and fourth quarters. that just lends itself back to the fixed income conversation, for one, adding direction -- duration as to what the market prices for what the fed might do the next quarters, but the path towards a more neutral rate around 2.5% over the longer-term. that supports adding duration. we have already been looking at the front end of the curve on fixed income because of the curve inversion, and in the equity markets, it needs to balance paid we are straddling the cycle at the moment and

different sectors are in their own cycles, but the balance is what is quality. tom: we need a round take because blackrock pushed against that view. they say this is a different view and they will be holding higher for longer. grace, you will stay with us and we will get more on your views of central banks and how to position in these markets. grace peters, jpmorgan private bank's emea head of investment strategy. we are checking on commerzbank, the earnings coming through for the german lender. we have been speaking to the cfo and we will be bringing you that interview shortly. currently the stock is down 4.2% despite the fact that q1 net income came in at a beat and they see net interest income increasing to 7 billion euros for the fiscal year of 2023. so far investors not exactly happy with the numbers.

coming up, been officials -- fed officials debate on whether to hike or pause at the june meeting. divisions there among the fomc. stay with us. this is bloomberg. ♪

>> i do want to learn more about

what is happening with all of these lagged effects, but i also want to reduce inflation, and if more increases are what is necessary to do that, i am willing to do that. >> inflation continues to make progress. it is not as fast as we wanted it to or expected it to be, and that is the nub of the issue. can you get it down more without starting a recession? we have a dual landing. we have to look at employment and inflation. francine: fed officials speaking to our michael mckee on the fight against inflation. we are back with grace peters, jpmorgan private bank's emea head of investment strategy. will the fed get to 2% no matter what happens to the economy? grace: inflation is still the number one thing that the fed and the ecb as well as still fighting. our assumption of rate cuts coming through, we are making

the assumption the economy would be weak. if inflation does not weaken, you are not going to get those cuts coming through. and there are still signs out there that inflation is cooling, but worrying signs that we need to watch. so if the coast is not clear, and i am referring specifically to wage inflation, various metrics pointing that wage inflation in the u.s. is at 45% and medium-term consumer inflation expectations at the last reading ticked up, so we want to measure those consumer inflation expectations are accurate. we are not out of the woods yet, but when we have tighter lending standards coming through the economy, we think that is where that will be headed. tom: how is the exposure to european equities? we have seen the relative resilience in terms of the growth picture for europe, but as we have seen from the

upgraded forecasts coming out on inflation, that remains a challenge. there is a risk that the ecb arguably did a misstep in terms of policy. how much exposure do you want to europe? grace: we like europe and it is an area we have been allocating to the last six months. we want to stick with that. growth is resilient and i think the ecb still has a couple more hikes left in it, but from a point where rates are not as restrictive as the u.s. yet. and where we are seeing under corporate earnings front that the degree of inflation is positive. if we look back at the first quarter earnings season that is finishing up, european companies are positive 3% earnings growth versus u.s. businesses' -3%. that is due to the cyclical complication, the fact that european businesses can benefit from higher inflation and

transition capex that is so important to europe to solve the security. food security, energy security, labor security, and the industrial sector as well. francine: the worry about the transition capex goes automatically to the u.s. because of the inflation reduction act. grace: there are dynamics at play and the ira has certainly given a boost to u.s. businesses focused on clean energy and manufacturing. but i think in europe the opportunities are still there within the european industrials. we have fantastic franchises, order books that are growing, not just resilient. and i think european businesses will absolutely benefit from that in semi conductors and industrials and some of the construction and materials. tom: stay invested in european equities, particular focus on industrials, and the positive

impact of inflation for some of europe's corporate, looking for two cuts from the fed by the end of this year. grace peters, jpmorgan private bank's emea head of investment strategy. let's get the bloomberg business flash with sarah halls. sarah: ubs says the emergency takeover of credit suisse could boost its bottom line by $35 billion this quarter. as well as the massive accounting gain, ubs is projecting billions of potential legal and regulatory costs. the boost to profits comes from negative goodwill, which many investors consider an accounting quirk. pfizer is said to have sold $31 billion of debt to fund its purchase of seagen. according to a bloomberg source, the u.s. pharmaceutical giant raked in over $85 billion in orders for the eight-part investment grade deal. the bond sale is the largest debt financing for m&a this year and also the fourth biggest in u.s. history. blackrock is calling employees back to offices at least four days a week, saying the firm has found benefits from working together in person.

the new policy will take effect from september, allowing flexibility to work from home only one day a week. in late 2021, blackrock expected just over half of staff to be in the office for at least three days a week. global news powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom, francine. francine: thank you. sarah halls in dubai. coming up, commerzbank first quarter net income beat estimates. we will get more from a conversation with the cfo and we will also check in on ubs shares, gearing up for a 35 million dollar gain following its takeover of credit suisse. the full bank round up next. this is bloomberg. ♪

>> we had a very strong start in the year and we were satisfied with the operation performance. we also made progress on transformation. we confirmed the outlook, but we increased the base case for nii to 6 billion euros.

that is due to the interest rate environment and we are upside potential dependent on the deposits. the rest, we stay course, so we just say we will see net income well above last year's net income. everything depends on how the recession is developing and also what is happening with the banks. but overall, we are very optimistic. 65% of cost income ratio, so a good start for the next quarter. anna: you mentioned m bank. what is the latest on that and what is it about that situation that will have a bering -- a bearing on where the full year goes? >> first of all, it is 73 million for the first quarter, but you see the operational performance is strong and the

markets are still positive. we have the strong operational performance of m bank, so ecg, coming out on the 15th of june, and that will be decisive. anna: are you more cautious now on the german economy? >> first of all, we even improved again are outlook for the german economy because last time we spoke, i think we were still at a -0.5% for gdp and development in germany for this year. now given the stagnant first quarter, we have lowered that to -0.3%. still, it abides the recession which we expect. it resolves of 68 million and it has been so low in the first quarter, but we stay cautious. we do not see anything yet, but we stay cautious and we keep the guidance of lust -- less than

900 million. tom: that was the commerzbank chief financial officer speaking to anna edwards and mark cudmore earlier. let's look at the focus for the corporate movers. commerzbank is in the mix, currently down despite the bank coming with a beat in terms of earnings. currently down 5.4%. they expect net income increased of 700 billion euros. a bit of selling pressure coming through for the german lender. siemens, positive stories in terms of the order book and the demand picture as supply chains start to ease. currently gaining almost 2%. they have raised the outlook for the second time this year and they now see revenue growth between 9% to 11%. lseg down 4.4 percent after selling the stock at a price

discount to yesterday's close. francine, you are also looking at ubs. francine: this was bank has an estimated accounting windfall when the deal closes, and it is gearing up for a $35 billion gain as a result of this emergency takeover of credit suisse. some of it below what we were expecting initially because of the windfall, but it also bought credit suisse at a massive discount. for the moment, we understand there are still making $35 billion in gain because of the takeover. coming up, elon musk says the tesla maker will dabbled in advertising. ♪

francine: welcome back to the open. 30 minutes into the european trading day. that talks are set to intensify in search of a framework agreement.

president biden will shorten his trip to asia to be in d.c. for the negotiations. fed officials diverge on whether another rate hike is warranted in june. u.s. futures point higher. commerzbank boosts that interest income. but investors are underwhelmed, that stock down 6% at the open. tom: selling pressure from european equities. speaking to grace peters earlier, saying you want to stay invested in european equities around the earnings picture looking out 12 months. the fed in focus, you get a sense that officials are winning the argument that maybe you get a pause coming through in june. jp morgan says markets are not wrong to be pricing cuts, they are expecting two coming through by the end of this year. the dax is off by 23 points.

items u.k., the ftse 100 7721, down zero point 4%. getting earnings details from commerzbank, they came in with the but investors not impressed. the second upgrade in the fiscal year, an update in terms of the order book. there was a bit of a tilt into health care. that is the only sector in the green so far. adding 0.8%. that has been favored in this environment, a safe haven tilt, it is performing that function today. concerns about the debt ceiling talks and what may happen on the geopolitical front with inflation remaining in focus. financial services at the bottom of the list, down 1.8%, the biggest seller so far in the session. francine: test laplace elon musk says the electronic carmaker will dabble in advertising.

let's get more with our tech reporter. it is all about advertising after a change at twitter. has musk done enough to reassure shareholders? >> that change at twitter is a where i want to start. that is what reassured a lot of shareholders going into the this agm. a few days ago, he announced the new ceo of twitter. and he would remain in a cto position. that is reassuring for tesla shareholders where there has been criticism of musk being distracted from his core focus since his acquisition of the social media platform last year. that was reassuring to investors at the agm yesterday. he said at the agm that he had done open heart surgery on twitter, and now the company is in a stable place, and he is

ready to hand that over to the ceo while still maintaining a presence at the business. that's a key part of what came out of the agm. the other big thing is advertising, something investors have been pushing on him for a while, asking why they don't do more traditional marketing at tesla? it was reassuring that he said that as well. tom: was it, or does it speak to panic about the demand coming through from tesla? >> tesla currently has a huge amount more competition in the ev space than they did a couple years ago. potentially going to traditional marketing is the next logical step, because for a long time, tesla has built a brand off of elon musk, his twitter presence and the company has got just from word-of-mouth and press attention.

now as the ev space sees a lot of traditional carmakers going to read and competition from china, -- go into it and competition from china, they will have to maintain market share. he acknowledged in an interview with cnbc after the agm that by focusing most of their marketing on word-of-mouth and twitter, he is essentially preaching to the converted. he needs to preach to a broader audience and to traditional marketing is the way to go for tesla. tom: excellent stuff, it terms of what we have been hearing from elon musk. another line that was interesting was around work from home. he has been making them come into the office 40 hours minimum a week. he said those who work in their

laptops are in lala land if they think they can sit at home. and he said morally there was a question when you think about people in services and factories who have to be in the work waste, versus -- the workplace, versus the white-collar worker. francine: it was interesting because most chief executives would say i want to focus on company culture. but he did call it a morally dubious practice. i don't know if it is especially if you have a long commute. it reinforces the culture if you see each other face-to-face. it is an front -- affront people who have to go into the office. tom: the survey around the financial sector suggesting what you are getting is a hybrid model, something the sector is more focused on at this point, but musk's comments will reverberate across wall street.

francine: he issued an ultimatum to tesla employees saying you have to work 40 hours from the office. he has been up in arms. tom: we will get to what is happening in debt markets. pfizer said to have sold $31 billion of debt to fund its purchase of seagen, according to a bloomberg source. the pharmaceutical giant raked in $85 billion in orders for the eight-part investment grade deal, the fourth biggest in u.s. history. let's get the market implications with valerie tytel. put this deal size into context for us. it was a gangbusters deal from pfizer. >> it is the biggest corporate issuance we have seen in five years. as you mentioned, the fourth-largest we have ever seen. the deal saw some really good demand, it was over three times

subscribe to. what it price, if priced 20 basis points below where they were guiding, so there was decent demand for these bonds. it caused a decent amount of pressure across fixed income yesterday and the treasury curve, they issued everywhere from a two-year maturity to a 30-year maturity, and that caused treasury yields to rise across the curve. pfizer is not the only one rushing to tap the debt market ahead of this debt ceiling next day, we have seen deals from meta and apple in the last few weeks. francine: we spoke to jamie dimon last week saying everything stops and we could see a freeze. a lot of contracts could also stop working. what does it mean for capital markets? >> the worry is it could cause a freeze in capital markets that could prevent any issue who needs debt to do so for at least

three weeks. this after enormous volatility in march. the capital markets were closed for a few weeks in march, and again in april there was a few weeks of really light issuance due to the instability of the treasury market. if we look at just this week, that is the chart on the screen here, this could amount to the busiest week since february. that is on. normally we get a huge bout of bond issuance at the beginning of the year, and another when we return from august holidays in september when the market becomes liquid again. it is an all-time to be seeing mega deals -- odd time to be seeing mega deals, but it shows that the u.s. market is worried about what the debt ceiling could do to their everyday business. francine: coming up, siemens climbs after raising its outlook for a second time. or from our conversation with the chief executive officer, roland busch. this is bloomberg.

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francine: welcome back to the open. we are 42 minutes into the european trading day. european stocks down 0.4%. the dax is flat. seeing pressure on the others. stocks a little bit mixed on the back of u.s. debt talks.

siemens trading higher in frankfurt after raising its outlook as demand and revenue jumped in the fiscal second quarter. the firm sees revenue growth of 9-11%. the chief spoke with bloomberg earlier. >> with the exception of some semiconductors, we see a normal mode. we see commodity prices coming down. this gives us the confidence going forward. at the same time, even the market is normalizing. we still see that we have very strong demand for our portfolio. it is all about digitization, automation, but also sustainability technologies we can offer our customers. there is very strong demand. , you have some normalization,, but we are sitting in a super

cycle reflecting the megatrends we are serving with our portfolio, like climate change, urbanization, aging societies, higher costs for health care systems, but also localization. meaning we see a lot of diversification, meeting new green plans around the globe . and digitization accelerating all of these trends. this is certainly a power portfolio. for the fiscal year we are confident because we have a strong order backlog, good deliveries and for the longer term we are confident we can help customers staying relevant in their transformation with our portfolio offerings. they trust in us. >> when we dig into the numbers, the order flow seems to be diminishing while revenue is going up. is that down to pricing? what is going on in the dynamic?

>> this includes pricing, which sits roughly at a 6% level. our economic equation is good. we do that mindfully, taking care of customers, too. we have a cost increase, which is roughly the same level. as you know, commodity prices are going down. we have a very solid handle on our numbers. there is a reason we could transfer growth into the bottom line. that is also reflected in our bottom line guidance which has gone up. >> can you do more on margins? do you have pricing power going further into 2023? >> we lifted our guidance and we will see what we can do. we lifted it accordingly with our top line performance.

you see a very strong uplift in our digital industry business, for the top line, we lifted 17 to 20%, 14 to 16% for smart infrastructure. you see that on our guidance for the profitability which goes up to record high levels. therefore, we are confident we can maintain that momentum for the rest of the fiscal year. and beyond. >> i want to talk about more regionally. we have data out of the chinese economy. what is siemens' experience of the reopening and chinese demand? >> regarding china, this economy was running very quickly through recovering from covid. that was amazing. then the demand, also consumption didn't pick up that fast. so the expectation is that the second half of the calendar year, there would be a pickup in the chinese market, also driven

by more private consumption. this is a projection so far which would impact only our last fiscal year quarter. that's the projection, and we're watching that market closely. it is uncertain times, but we are confident, and we predict it is picking up. tom: that was the ceo of siemens speaking to dani burger and manus cranny earlier. let's get the first word news now with sarah. sarah: ubs says the emergency takeover of credit suisse could boost its bottom line by $35 billion this quarter. as well as the massive accounting gain, ubs is projecting billions in potential legal and regulatory costs. the boost to profits comes from negative goodwill, which many investors consider an accounting quirk. the eu and u.k. are reported to have agreed to work together on

common migration of small boats across the english channel. prime minister rishi sunak and commission president von der leyen agreed that london will cooperate with the eu border agency. they spoke the sidelines of the eu summit in reykjavik. japan's economy grew more than expected. gdp expanded at an annualized rate of 1.6%, the strongest growth in three quarters. the data adds to speculation over prospects of an early election. jp morgan is unlikely purchase more struggling regional banks. the ceo told the annual general meeting that they are eager for a return to stability. the white house doesn't plan on asking the u.s. congress for more money for ukraine the rest of the fiscal year.

a white house spokesperson told cnn thanks to bipartisan congressional support, the u.s. has resources it needs for ukraine, for now. global news powered by more than 2700 journalists and analysts in more than 120 countries. tom: sarah halls in dubai, thank you. a line crossing from nomura, cutting their growth forecast for china. they now see china's jointly 23 gdp growth forecast of -- 2023 gdp growth forecast of five point 5%, down from their previous forecast of 5.9%. yuan came in much lower-than-expected. we had that data dump yesterday, particularly highlighting the unemployment situation around the youth of china. a challenge for the communist

party, but retail sales less robust than many expected. fixed asset investment a concern. you have houses cutting their forecasts for the growth and out of china for 2023. it may well be more to come. wall street's biggest banks face a harsh reality check in china. this is a fascinating story. that subject in focus for the team at bloomberg's big take, unpacking that for us. we will have a really fascinating conversation with the author of that story in a couple minutes free the prospects for wall street after they expanded their footprint aggressively in that market. stay with us. this is bloomberg. ♪

francine: welcome back to the open. 52 minutes into the european trading day. a mixed stock picture as traders worry about the u.s. debt ceiling. eyes on washington, president biden is cutting his trip to asia shorter. let's take a look at key things markets are watching out for today. i'm the next hour, tencent due to report. it is expected to post its biggest rise in quarterly revenue in two years. at 10:00 a.m. u.k. time, a final

print of euro area cpi for april. u.s. housing starts at 1:30 p.m. and target will report earnings before the bell in the u.s. i once tried to buy a t-shirt from target, never again. tom: i didn't get the thing about target until i went to l.a. and it was one of the first places my american wife wants to go. shipping costs $50, yeah, don't go there. wall street's biggest banks face a harsh reality check in china. that is the subject of today's bloomberg big take. the bank set to compete for a bigger share of the country's $60 trillion share of the financial market are facing challenges. kathy, why are wall street banks pulling back now? >> take a look at the first five

months this year. very little deals going on. the thing about the u.s.-china tensions continuing to escalate, we have a banker telling us they saw green shoots earlier this year. suddenly, they talk about this spy balloon incident. and there is no deals. it is just hard. the pipeline is there, no one is willing and investors are not paying up. literally, the market froze. it makes more economic sense to cut people now rather than later. francine: it is like walking a tight rope. we saw goldman sachs and morgan stanley scaling back, but you also don't want to pull out because that would make the chinese government angry. do we have any idea of more job losses? >> we thought we would have a

better 2023, the fact is, probably not. morgan stanley yesterday cut 40 china-focused roles. these are the deepest cuts within the asia-pacific region. given the fragile sentiment and no sign the china economy will improve further, there will be more job losses. it could be more drastic. the u.s.-china tensions and all this rhetoric is so bad, it is making the life of the international investor in china more difficult. tom: really important reporting. the subject of our big take today. five years ago, some people were talking about the big bang in china in terms of the regulatory environment being more conducive for western banks. do check out that big take on

the terminal and bloomberg.com. markets paring heavier losses, now down 0.3%. s&p e-mini's looking to gains of 0.1%. nasdaq futures are flat. continue to watch the conversations around the debt ceiling. the market pricing, as arguably the pause posse almost the fomc getting the upper hand. jp morgan saying they expect two cuts from the fed by the end of the year. the blue bird dollar index is bid, up 0.3%, euro-dollar up, one .08. "surveillance: early edition" is next. this is bloomberg. ♪

>> this is "bloomberg surveillance: early edition" with francine lacqua. francine: good morning, everyone. welcome to bloomberg surveillance early e