of cash trading. mark: president biden expresses confidence that a debt agreement will be reached. house speaker kevin mccarthy says it is doable by this week. european futures and asian stocks rise. d seven leaders gathered in japan for a summit where china and russia's war in ukraine will top the agenda. we are live in hiroshima. plus, easyjet says it is benefiting from higher ticket prices heading into the peak summer season. burberry's earnings beat estimates as shoppers in china spend again. francine: let's look at the dax futures gaining .5%. if you look at the ftse, they are gaining similarly. in washington there is a narrow group ofin washington there is w group of negotiators that will

hopefully break through and get a deal on the deficit. mark: five individuals on both sides working through this issue. i have not got the deal but there is a little bit of positive mood emanating from d.c.. a decent rally of plus 1% for the s&p. nasdaq ending the sessions in the green. they handoff was positive from the u.s.. the stock story, equity story is all about japan. we will zero in on that poorly. the ftse 100 adding to the optimism with gains of .4%. we continue to work to the earnings picture as well. bt with job slashing going on, bad news for the workers but arguably good news for investors in that stock. the ftse 100 32 points. in france, the cap already up .6%. let's switch the board intention and what has happened in terms of japan. further gains at a 33 year high. the nikkei up 1.6% in the session. exports are stronger adding to optimism and seven straight weeks now a foreign inflows in two japanese equities.

the futures flat and range-bound. the two-year at 4.16. a seven basis point move higher yesterday at the front and term of yields. gold is back below 2000 as the risks around the debt ceiling seems to come off at least a little bit scared 1976 on gold. just down .3%. francine: let's dig deeper into the sectors. i and lots of green. there's only one down which is utilities in the red but pretty much flat. the gains are not huge. auto parts and technology gaining .7%. travel and leisure have a little bit of optimism. burberry sales came in better-than-expected but in general a bit of optimism that we get to the u.s. debt ceiling. tom: president biden has asked us confidence that they will reach an agreement to avoid what

has been described as a potential catastrophic default. we heard from the u.s. president yesterday. >> i am confident that we will get the agreement on the budget and america will not default, and every leader in the room understands the consequences if we fail to pay our bills. it would be catastrophic for the american economy. tom: let's bring a bloomberg's derek wallbank in singapore who follows this or us very closely. what more is needed to get an agreement? mccarthy is saying it could be done by the end of this week. derek: i think by the end of this week is a little bit optimistic essentially because joe biden is on a plane to japan right now. they have said that the president will be able to talk with members of congress. the president has deputized some negotiators to be able to fill in the terms. they know where the framework of this deal might actually materialize. if i were looking at it i would

suggest that some future limitations on spending and maybe budget cap would be one area of rescinding unspent funds, particularly covid funds would be another one. there is a possibility of regulatory reform in terms of permitting. maybe some other things that the big hit right now is over work requirements and other such restrictions on entitlement programs in the u.s. safety nets. i think that is the real key. there a lot of things are democratic red lines there. they don't want any work requirements on some of these and if you got them, even though they are big republican priorities, it might make it difficult for democrats to be able to sign onto the final passage, which would be its own problem of convocation. essentially even though there is

a possibility of a deal insight, you have to be careful that you don't win by too much. it will be hard for the other guys to vote for what you signed up for. francine: what if we have a false sense of security and everyone is cautiously optimistic. mr. mccarthy was saying to mr. president stop hiding and traveling. his are optimism that in today's we could see nothing and fall flat on her face? -- on our face vehicle derek: we can fall a whole bunch of places but a lot of it is in play. one of the questions have been asked time and again is what is going to be taken? you have to get to more pain before you get to progress. we have actually seen with the white house having to cut short at specific trip that joe biden is on and scrapping the trip to

papua new guinea and australia and the quad inviting questions about u.s. seriousness in the pacific. that counts as actual honest-to-goodness pain and suffering that will i guess crystallize the need to get something done here. it is very possible. i would not overlook the idea that even if a deal is signed, it still has to get past. i'm optimistic that something will get done at some point. there are plenty of off ramps here to diffuse crisis, but you have to be willing to take them and figure out a way to do this to allow everybody to come around and support it when the vote actually happens in congress. francine: derek wallbank in singapore. the president has just arrived at his next destination japan. we are looking at live pictures. yesterday he expressed

confidence that negotiators would reach an agreement. this is not a g7 that is plain sailing because some republicans have said the president in the midst of these very important negotiations should not be in japan at the g7. that is touchdown actually in hiroshima as air force one just landed. i think we will probably see the president come out of the plane soon. it is rather exciting always. tom: cutting short the trip. he does not think there will be a deal until he is back on the ground in d.c.. he is missing out on a planned trip to australia and papua new guinea, important in terms of geopolitics particularly with china's reach out to png the last three years. we wait for the president to come off the steps of air force one in hiroshima ahead of the g7 leaders meeting. china will be central to the discussions there as well russia and ukraine. on the u.k. front, prime minister rishi sunak is set to

announce a deal with japan around semiconductors and chips. this is joe biden on air force one and we wait for the steps to be put down on the side of the aircraft and to be welcomed in japan. we will get more analysis across the story throughout the hour. francine: joining us as sharon bell, goldman sachs international senior equities strategist and cohead of emea research. there is cautious optimism that both parties will reach a deal in the u.s.. would you work that worry? francine: where do you park the wall of worry? do you plan for the debt ceiling or ignored the moment? sharon: markets have largely been ignoring it. more the equity market in the bond market. the equity market fell sharply in 2011 when they did not raise the debt ceiling initially and

there was impact on both. there was impact on confidence as well which was dramatic. the equity market is priced for the hopeful outcome they do pass the debt ceiling increase. within the equity market, you see people steering a little bit more towards quality companies, defense of companies, may be growth companies as well rather than value companies and cyclical companies that would be most hit. tom: which is how that positioning? sharon: generally i would follow that positioning in the near term. it is a fragile situation but not just the debt ceiling that is the issue here. growth is quite weak and likely to be weak in the second and third quarters. equity markets look relatively expensive particularly assets like money market funds at the moment for 5%. equities look quite fragile on a number of dimensions, including

the debt ceiling. i would be steered more towards quality, yes. francine: is this equities in the u.s. that you're more concerned about or is it worldwide because applications could be baked on the debt ceiling? sharon: we worry more about equity in the u.s.. the debt ceiling is part of that i think it is not the main issue for us on u.s. equities. the main one is valuation. we don't have a lot of earnings growth this year. it is likely to be close to zero earnings growth and equity market on the u.s. trades 18 to 19 times pe which is the top of the 20 year range. or towards the top. you have an expensive market, a lot of risks including the debt ceiling and relatively low economic growth at the moment that means we don't see a lot of value there in u.s. equities. the s&p target for the end of the year is 4000 we are already above that level. elsewhere in the world of the u.s. equity market dictates level markets to some extent you

can make returns elsewhere. you are mentioning japan which has been a strong market. we generally like non-us equity markets and with japan there is improvement on returning equity coming through which is helping earnings. that is the fundamental case to buy in japan. tom: with more compelling evidence that maybe the fed is weighing up a cuts by the end of this year come up that draw you back to u.s. market? jp morgan telling us they expect to cuts to come through from the fed by the end of this year saying markets are right in terms are broadly the pricing on that. do you pushback on that? sharon: we would pushback on that, yes. we don't expect a recession in the u.s. but we think growth will be pretty weak in the next few quarters and close to zero. we are not looking for a deep recession and not looking for gdp to fall over the next couple of quarters. we think the market is a bit premature in expecting rate cuts this year. we expect them eventually and we

think the fed has peaked in terms of interest rates but it will pause and plateau from here for the rest of this year and not cut until we get into 2024. the reason is we don't have a steep downturn, recession and we still think the labor market is very tight. francine: we are looking at live pictures of air force one and we are expecting president joe biden to step off air force one. this is a very familiar seem to those who cover the president and the white house. a lot of these g7 leaders will have a couple of messages that they need to send back home into their key allies in the region. there is something for the global south maybe and they will look at loopholes of sanctions on russia in a message to china. they will talk about nuclear weapons and ai. how difficult is it to have a constructive that on asian equities given the cold shower that we are seeing between the u.s. and china and it is also unclear what role your place in this.

they are trying to get more aligned with the u.s. need economic ties with china. sharon: yes, germany in particular. germany the last year has had two big trucks really, higher energy prices because of the thing since -- sanctions against russia but also the export market of china was in lockdown for a lot of that period. there are also geopolitical tensions and concerns about china and relations are very afraid particularly with the u.s.. that is potentially restricting germany's growth and exports to china too. europe is one the markets that we find is most sensitive to global trade because it sits in the way in a huge global trade pattern and is very vulnerable to that no doubt. tom: the sensitivity of your up to a global trade and we will get some lines no doubt on these g7 leaders on global trade over the next few days. sharon bell will stay with us over the next couple minutes we will get more on her calls.

goldman sachs international equity strategist. we are still seeing live pictures of air force one that has touchdown in hiroshima ahead of the g7 leaders meeting. president biden expected to walk down the steps any minute. across these movers, let's touch and on the big story of the day in the u.k.. it is bt group announcing massive job cuts, 40% of its workforce. the stock is taking a hit there down a little over 8%. earnings coming through for bt. they are cutting staff levels from 130,002 75,000 or 90,000 by 2028-2030 saying they're going to have a much smaller workforce . the ceo has been targeting savings of 3 billion pounds a year. earnings were beat in terms of estimates coming in at just over 2 billion pounds in the fourth

quarter. it is those incredible job cuts coming through for bt that are in focus for investors. the stock currently down a little over 8%. aston martin soaring. geely is now the third largest shareholder for the luxury sports car market. they now own 70% of that business. a big boost coming through it in terms of the money from china. vertebrae down 5% in the earnings picture. sales were up 7%. investors are not overly convinced at this point. easyjet is benefiting from higher fares as travel demand picks up. we will bring you more from our conversation with the ceo of that business next. this is bloomberg. ♪

>> it is a strong demand environment and just over the winter we had 41 more customers traveling with us then last winter. this is something that has come from two things. one is that people have really looked upon travel now differently than they did prior to the pandemic. it sits firmly as a top priority when people choose how they are going to allocate their

discretionary spending. that is coming through in the numbers as well. we are ahead of last year in terms of bookings both in q3 and q4. we are looking forward to that to continue. >> presenting a positive picture about consumers willing to spend on travel and the outlook is positive. returning to growth later this year. will you be placing a large order for a new aircraft like some of your rivals have done like ryanair and whiz air? johan: we already have an aircraft order of 163 aircraft, a current order we had that we will exercise and that will take us out to 2028. that is a combination of both replacement for the existing fleet that we have also growth as well. if you are looking at the growth numbers, we are growing our network and excluding some of the changes. we are down to the underperforming basis we had in

the u.k. as an example. had one more million seat the summer than we had last summer. we will continue to grow. for next year we are looking at 10% growth in we have the fleet in order to support that. >> you are increasing capacity and have more aircraft coming in. we discussed your major rivals. you have one million extra seats line from the u.k. the summer. are you worried about excess capacity coming into the system and what will they do or yields? johan: it's an interesting question. because of airbus and boeing having documented challenges in terms of delivering on their orders, we think we are in a good position on that. we are one largest customers the airbus a320 family. we believe we are going to mitigate any challenges that might be coming. in general, you're going to see the supply from manufacturers point of view will be relatively tight here from the next three

or four years. that would have a positive impact on the yield environment. the demand has been strong and continues to be strong. tom: that was easyjet seal johan lundgren speaking to bloomberg on the back of the results this morning. let's bring in sharon bell, goldman sachs senior equity strategist. thank you for your patience and sitting by their. the ftse 250 underperforming year to date. is this a question of sterling strength or the mix we are seeing u.k. equities? do you expect continue or zero turnaround for a for u.k. stocks? sharon: i think sterling strength hasn't helped but the main thing is the mix of what the u.k. is exposed to. does not have tech companies, very few on the ftse 100. it has a lot of energy stocks on

the ftse 100 and energy prices have fallen in has been quite weak. mining companies as well have been hit by weaker industrial metal prices as well. the commodity complex which the ftse 100 is very exposed to it, you see week prices there. then on the ftse 250, we expected it to benefit a bit from the strength of sterling. it is indicative of better economic data in the u.k. and was expected and it benefits the ftse 250 but not much. francine: bt stock is ugly today and they are cutting 42% of their work force because of the rollout in fiber. do you like telecoms in general because we will see more consolidation and possible m&a ? sharon: we like telecom because it more of a defensive area in a market where we are expecting little returns over the next six

months to one year. bt offers reasonable dividend yield and so to telecoms more broadly. it is a dividend yield, defensiveness of the sector and you are right that we are seeing more consolidation in the industry which will be more pricing power. there's lots of thing that makes a telecoms industry more attractive. it is one the most indebted sectors in the market. in borrowing costs have gone up as well. that weighs against some of the more positive things. francine: sharon, thank you so much as always. goldman sachs international senior equity strategist and cohead of mea global investment research. coming up later today guy hands the founder of terra firma capital joins us. this is bloomberg. ♪

tom: welcome back to the open. 26 minutes into european trading day. modest optimism across european equities. gains coming through on the back of optimism. the mood music changing in terms of debt default risks. president biden has touchdown just outside of hiroshima the g7 meeting and will be back in the u.s. on sunday. futures in the u.s. flat.

solid gains yesterday more than 1%. across the benchmark in europe .4% gains. the ftse 100 7764, a gain cap in the sector. let's look at individual stories in the mix. burberry coming through with earnings. sales were up 7%, solid growth coming through in terms of demand for china but the forward outlook may be weighing on that stock. bt group slashing jobs by up to 40%. disappointment around cash flow coming through. guidance weighing on that stock. aston martin rallying. geely moving from fifth largest shareholder to third. coming up, we will hear more on the g7 summit. this is bloomberg. ♪

francine: welcome back to the open. 30 minutes into the european trading day.

president biden expresses confidence is that the agreement will be reached. house speaker kevin mccarthy says it is doable by this week. european futures and asian stocks rise. g7 leaders gather japan for a summit where china and russia's war in ukraine will top the agenda. we will be live from hiroshima. easyjet benefits from higher ticket prices heading into the peak summer season. burberry earnings beat estimates as shoppers in china spend again. markets open and rising. tom: a mixed reaction with earnings coming through. burberry under pressure. across the index, gains of .4%. the optimism around the movements on the debt ceiling lifting and propelling these european equities. the handoff from asia and the u.s. solid as well. the u.s. ending the session up a little over 1%. the dax is gaining. ftse 100 up .5%.

aston martin a real lift there. let's see how things are playing out across the sessions. last time i looked autozone was streaming ahead. aston martin got an injection of cash coming through from geely. moving it from the fifth to the third-largest lace as the shareholders in aston martin. year to date prior to today it gaining 50%. autos and parts getting 1.4%. tech gaining .9%. yields moving to the front end. there's optimism. one of the safe haven tilts, utilities currently down .4%. telecoms down under .2% dragon lower by what is happening with et. that stock was down 8% concerns of open reach customers and cash flow. u.s. president joe biden has arrived francine: japan ahead of his g7 -- negotiations are

continuing for the debt limit. stephen engle is an hiroshima waiting for the president. this was a very clear g7 where we thought president biden would come to asia and tried to reassure allies that he stood behind them but the summit so far has not really done that. >> i think he is still going to reassure allies. the g7 and much more unison than a g20 which could not agree on phraseology at the last meeting on russia. the g7 as far as i could tell come of finance minister and central-bank meeting in japan last week showed a clear consensus on phraseology on the legal more that wash -- russia is waiting in ukraine. jake sullivan talked about the u.s. may be proposing more sanctions and also economic and

humanitarian aid for ukraine here at the g7. there is some common ground that even though a truncated trip to asia could undermine his push to g7 and other invited dignitaries like those leaders from brazil, indonesia, india, vietnam, south korea and others could take a backseat a little bit he is not going to be spending as much time including canceling his trip to papua new guinea which is a strategic place in the pacific ocean that xi jinping met with the prime ministers in november of papua new guinea. also, then foreign minister one they went to that port. biden will miss the opportunity to share up and pledge support to papua new guinea. he will skip the quad meeting in sydney australia. he is cutting it short but he will try to get as much done at the unified g7 as possible. the debt ceiling impasse is going to undermine him little

bit. tom: papua new guinea not to be overlooked because there is a massive outreach from china. there is also outreach around semiconductors with japan in terms of support ideally or at least it seems coming through from macron --micron and the u.s.. house certificate are the moves around chips? stephen: i think it is very significant because it falls into place with what janet yellen and others have talked about which is friend-shoring, securing of the global supply chain and particularly with chips. warren buffett, he is recently been talking up investment in japan but he is also completely dis-invested berkshire hathaway's investment in taiwan semiconductor not because he does not like tsmc but he does not like where it is located in taiwan. geopolitics is a risk. the g7 is trying to de-risk that proposition of taiwan and its critical role in advanced

semiconductors, and start getting g7 members like japan to incentivize companies to move here. they have done that. 1.5 billion u.s. dollar investment in donation if you will to micron technologies of idaho for memberships in advanced semiconductors to be made an hiroshima on top of tsmc's building a fab. japan is becoming a critical cog in the diversification of supply chains for like-minded economies. de-risking the taiwan equation and incentivizing companies to move here. rishi sunak has just announced the hiroshima accord to get japanese investment into the u.k. also in semiconductors. yet, the wheels are moving on this. tom: a fascinating inconsequential trend. stephen engle the ground for us

in hiroshima covering all things g7 over the next few days. burberry shares slumped after a slow down the americas overshadowed a rebound in china. we discuss that next. this is bloomberg. ♪

tom: it is thursday.

welcome back to the open. you are seeing gains of .4% hige u.s.. optimism around progress made on debt ceiling talks. autos at the top of the list getting a lift from the investment of the china's geely into aston martin in the u.k.. basic resources at the bottom of the list down .5%. a scoop for bloomberg around my conductors. source was telling bloomberg at the chipmaker micron is to get $1.5 billion in terms of incentives from the japanese government to produce next generation memory chips in the country. rishi sunak has announced a semi conductor partnership with japan during his visit to tokyo. let's get the details and bring in bloomberg's tokyo tech reporter mj. tell us about the micron deal and how certificate it is in terms of the buildout of semiconductor manufacturing capacity in japan. >> it is definitely a huge deal.

like you said $3.6 billion of money. they are planning to use this to upgrade their hiroshima chip factory and japanese government officials have promised to provide incentives to help micron to this according to sources. even beside micron we are hearing local media reports and buzz about r&d facilities for other companies including intel, samsung, belgium's imac. all of these companies are expected to be building r&d facilities in japan all of which will help japan kind of boost and advance tech -- chip tech expertise. tom: what is in the deal for japan? min: japan is really trying to step up its efforts to boost and advanced semiconductor

technology, especially in what you would call manometer technology. all the billions of dollars investment in top r&d talent flowing into japan are expected to feed into those efforts and help japan materialize it. this is important for japan because of the aging society and the uncertainty surrounding the chip global supply chain. of course, we will have to see going forward how these plans really pan out. francine: thank you so much. our bloomberg tokyo tech reporter min jeong lee. a slowdown in america overshadowed a rebound in china which follows a mixed picture for luxury rivals in the first quarter of this year. for more on this, let's bring in daybreak and. thank you for joining us -- deborah aiken. he brought in daniel lee as his chief creative designer. is there a problem with the product or is it just geography?

deborah: the project from daniel lee, the first collections came through and new capsules are being very well afforded and good feedback but the problem with burberry is that we won't see the product fully in stores in sizable quantities until very much later in the year. it is not the product because they are doing lots of what was already there from prior creative designers. we look at region, anywhere where there is softness on the brand in the u.s. it is showing through. we have seen that in the numbers. we need to remind the audience that asia for burberry is going to be about 45% of sales and together with europe, 80% of sales. the u.s. was against a very high comp. it looks worse than it is to me but we still have to be aware of these products which are we building the brand. tom: the stock is currently down 6% on the back of those earnings.

decent picture when it comes to china but a bit of a disappointment on the picture when it comes to the u.s.. thank you very much indeed. our bloomberg luxury analyst deborah aitken. bt group shares are sinking after the telecom operator plans to cut the labor force by as much as 42% by the end of the decade. let's bring in bloomberg's tech media reporter tom. why are bt and vodafone cutting jobs into a significant degree? tom: this has somewhat been inevitable in the telecoms sector which has itself been shrinking for years. revenues have been on a stagnant basis and profits have not been great. i reported the 2019 that bt had been looking at a plan that resembles this one and i think now that they have set out how they're going to build the fiber networks some of it is not based on immediate cost pressures but based on them not needing the people to build that network.

in the context of higher interest rates, vodafone doing something similar, it does not paint a very rosy picture for the sector. francine: thomas, why have their share price gone down anyway despite cost-cutting benefits of job cuts? is a restructuring problem they don't have confidence in the chief executive or something deep -- deeper or more structurally concerning? thomas: i think it is the outlook for the sector is in both cases to some extent. for vodafone, there is a lack of confidence that you get from analysts notes that they are able to execute what they said they are doing. vodafone has talked about the need to strike big deals and some of their biggest markets. they announced they were going to do a deal with the reit's of the u.k. seven months ago and is still not done that. they missed a key deal in spain. i think investors have been burned. with bt, the outlook today was quite vague and just for growth.

some people cited that is negative. cash flow has shrunk. they are one of the biggest users of energy as well and energy costs have had telecoms and that pressure has not gone away overnight. it is not a sunny sector and not been for years. this is a somewhat capitulation after years of pressure. francine: thank you so much. bloomberg's thomas seal air with the latest. it's quite shocking when you read 42% of jobs. a penal test with overseeing the credit default swaps market says a write-down of credit suisse group's at1 notes did not trigger an insurance payout. the radiator took the view that the additional at1 securities were junior to the subordinated bonds underlying the swaps. in the last two months, we all think we are experts in at1s but was expected or does it basically change how banks will

fund themselves going forward? >> the surprise was how quickly they reached the decision. it is called the credit derivatives terminations committee. normally they are looking at hundreds of pages of technical discussions and most people it's in the market fell they would come to this decision. they have come to it in a matter of days and that is what caught the market off guard. it is a fascinating debate, one that the litigants are saying this could have huge applications in the market. the swiss are saying this is all clearly in the documentation and make sure you read those. not surprised with the speed of that was quite impressive. tom: deutsche bank agreeing to pay $75 million to settle a lawsuit linked to victims of jeffrey epstein. tom: three lawsuits and now down to two after this settlement. basically from an unnamed victim

of cap student saying that deutsche bank benefited from this sex trafficking by virtue of basically having him as a client. a big number of $75 million. most investors in deutsche bank would be glad this is resolved. it was a huge liability looming. the big question is they are still two outstanding lawsuits against jp morgan. does this encourage them to settle or do they go down different track? analysts have bloomberg intelligence are saying they expect in of her settlement jp morgan as well. tom: tom metcalf on latest in terms of the lines crossing the banking sector. when it comes to chemicals part of the business, syngenta is based in switzerland but chinese owned set to move forward move forward with a shanghai ipo. people have been waiting for this. it has been delayed for a while. the listing of syngenta in shanghai is a big boost for that market certainly.

syngenta is owned by china national chemical corp.. the regulators have yet to sign off on this but the plans are that it will be listing on the main board there in shanghai. that is news in terms of agricultural products with junta. africans ran to hit a record low last week. we will delve into white economists think rate hikes will harm the currency more than help it. we will discuss that next. this is bloomberg. ♪

francine: 51 minutes into the european trading day. the focus of firmly on the debt ceiling. more optimism then there was 24 hours ago. president biden's and hiroshima for the g7 but he is cutting his trip short to go back to washington for negotiations. let's look at key things markets are watching out for. the bank of england governor andrew bailey and officials are set to testify with the u.k. treasuries like committee on you -- on qt policies. us jobless claims and other economic data occluding existing pub sales. tom: at 8 p.m. u.k. time for central bank of mexico will announce its rate decision.

bloomberg economics sees them raising rates a final time in the cycle by 25 basis points. important within the em mix. later today before the u.s. equity markets open investors will get another gauge of consumer resilience with alibaba and walmart both set to release earnings. back to geopolitics but also the travails of one nation on the continent of africa. south africa's crippling energy crisis, low growth deteriorating fiscal metrics combined to push the rand to a record low last week. the normal response of raising rates to defend the currency could undermine a fragile economy and push the rand even lower. that is the view of goldman sachs. let's bring an jennifer zabasajja was on the ground for us. what do we expect the central bank of south africa? >> as you mentioned, economists are saying the central bank is really at a difficult time at this point because last week the

actions of the rand dropping to the lowest level seating of the dollar suggested we may see more rate hikes. this economy is already going through a lot of struggles. you mentioned energy crisis and low growth. the central bank really needs to do what it can to not further weaken the rand. there will be difficult position for the central bank to make. next week we are supposed to hear what the rate decision will be and what economists are saying is that it is unlikely that the markets will signal any sort of pause that the central bank will make. we could potentially see further rate hikes, for the deteriorating this economy. last week we heard the central bank governor south africa may be a bit of a peak of a dilemma of that. he was saying that any hope for a stable currency is impacted by global factors and not just that

. we mention the geo-political issues that this country is facing and he said that political leaders making statements fuels the uncertainty and adds to the volatility. not exactly helping the task at hand for them. a lot to pay attention to when they make this decision on may 25. francine: what is the state of the power crisis in the country? jennifer: we heard from the state owned power company as come this morning and they are holding a briefing this morning for the public. a bit of a concern for investors in particular that the power crisis does not seem to be easing up too much more. what we heard from them a circuit judge to be stage eight power outages which means people are without power for up to 12 hours a day. that is coming at a time when the country is dealing with a cold winter. that is not exactly what people want to hear because we have already seen energy crisis make a significant impact to this

economy here. but eskom this morning trying to tamp down any concerns at this will lead to a national blackout saying this is a controlled power outage and that there is no concern. definitely a lot of concern in the business community and with investors about what this could potentially mean for this economy. we have seen foreign direct investment in his country has stagnated for the most part. there is a lot of concern that this continuing deterioration and energy crisis on top of geopolitical issues, the country is caught up in, make the outlook for recovery pretty bleak. tom: it doesn't help that ties with the u.s. have been fractured on the back of the story around weapon sales to russia. jennifer zabasajja on the challenges facing that south african economy. across the benchmark, and europe gains of .5%, picking up the

upside that came through from the u.s. and asia. movement on the debt ceiling lifting some optimism. s&p e-minis higher i went 1%. individual movers and focus, aston martin and bt group. bt group is slashing jobs and the outlook in terms of cash flows a disappointment for investors. aston martin get a lift as chinese investment comes in with geely now the third-largest shareholder. plenty more coming up. francine: we speak to guy hands and will talk about investment in of stability in the u.k.. he is the founder of terra firma capital markets. this is bloomberg. ♪

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