tom: it is tuesday, the sixth of june. countdown to the close stress right now. >> the countdown is on in europe. this is bloomberg markets: european close with guy johnson and alix steel. ♪ tom: sentiment has turned more positive in europe as we head to the close this tuesday. gains of .4% across the benchmark. important survey out of the ecb suggesting expectation amongst

the public around inflation have turned down significantly. we will get the reassessment of how far the ecb will have to go. you had money moving into german bund and your down .2%. on the back of the surprise cut announced by the saudi's, prices popped and wti. then it came off. that is reflected. this index now down .3% after the modest gains of yesterday. around the front end of german bund's, three basis points. action more announced about 30 minutes ago. nonetheless, the inflation is starting to turn. that is the survey coming through. you still here officials from the ecb pushing the hawkish line. let's switch and see how things are playing out. for that, alex

ix, you are looking at the u.s. market. alix: as in the high-spirited debate we were having earlier is a bullfight overt? october low field and that level but now we are pushing a bit higher. what is interesting is how complacent the vix actually is, below 15 again. solid run to the downside. you are seeing a bit of a selloff in the bond market, particularly the front end. pushing higher by five basis points. i have not seen anything fundamental that would change his narrative. antony blinken is going to china in the coming weeks. maybe that was a headline that moved something. as of the up by 20% -- s&p up by .2%. coinbase down after the sec filed a lawsuit against the company. it does not feel like this is the end. gary gensler was talking about the house of cards tumbling. that feels more ominous for crypto.

tom: that was a standout from that interview with the chair of the sec as he takes a hammer blow to crypto. i wanted to talk about week futures. that ties into this important geopolitical story. the news that this dam has been attacked, the ukrainians blame the russians in ukraine. that led to a big spike in terms of pricing. that is a reminder of the potential commodity shocks in the system. this is down 2%. in the session today, use our prices popped up. we were talking about natural gas prices in europe and that pop of 20%. simon white was saying is that recession that is the biggest risk, it is resurgence, inflation. tying that to the geopolitics, a reminder that you still have that risk and volatility. if it is not appearing in equities right now, maybe commodity markets is the place to keep your eye in terms of where you see inflation.

alix: that also goes to the fact that ukraine is still a big issue. maybe the markets got too complacent about that. ukraine is blaming russia for blowing up a dam in southern ukraine. it has eyes been seen as a potential target because of strategic importance. but the attack is being viewed as a major escalation in the war. there's white you saw we prices jump today. -- that is why you saw crisis -- we prices? . >> this should be called the biggest man-made disaster. russia has proven once again that the whole world -- they act like a terroristic state. they use this disaster and it seems to be a distraction. i was thinking about the damages we are facing. i think we would be ready to estimate damages in a few days,

but we understand that if you look to reconstruct the dam, the hydroelectric power station at the same scale, it might cost at least 1.5 billion u.s. dollars. but that is not an exact figure. we will get that in a few days. as a result of this act, 80 settlements can be slotted. that is why today with certain from 2:00 when we were informed about this act, we have started the evacuation of ukrainian peoples. that is the most urgent things right now. we are absolutely sure that this dam was destroyed by the russians. we know that there was no

external challenge. it was damaged by the russians. now we are focused on -- tom: date war crime, an act of terror, that is how this attack has been characterized by ukraine and its allies. that was ukraine economy ministers speaking to bloomberg. the question to pick up the hour is is the market under pricing tail risk with a particular focus on the ukraine? has there a complacent that you can still get escalations of this type from russia? what does it tell us about how the days and weeks can unfold in ukraine and help markets should be thinking about potential ripple effects? >> the focus on commodities is right and we asked what part of the economy will be most effective? it will be aber culture. 500,000 hectares of land that they can no longer arrogate. i am not an expert in terms of

out, but fertilizer, barley, all these things were a focus of the war. those prices have come back down. but that does not say anything about gas. yesterday, we had a 20% move on european futures on gas. that was on futures -- fears about lng under supply. you think about how jittery, how much downside risk. you talk about price stability for the central banks. this is a huge risk. alix: if land is destroyed, that might make you feel's planting difficult, too. so from the equity perspective, are we under pricing the risk? >> absolutely. we saw some kind of caution earlier. we saw the stoxx 600, boom change through the session. now we are pointing to perhaps some more optimism, but the eager question is, you have got a audit issues on the

commodities side or the natural site thanks that apartment harder to control from fake monetary policy perspective. you cannot raise rates on grain silos that are potentially damaged in ukraine. when supplies have been limited or there are questions about the possibility of that kind of destruction, it is a lot of uncertainty. do not forget we have also had risks in the commodities market. that is contributing to the bush picture for commodities also the unfortunate story of the rates site, where rates have to go higher for longer in order to sustain that kind of balance. tom: to that point, valerie from our markets team told us to expect may be a surprise. the rba came through with that hike. it is an adjustment to the view that indeed central banks are still uncomfortable. there is a big gap in terms of

how far the rba will go. talk to us about that component as well. nour: and china as well. there are chinese banks that have been asked to cut deposit rates. that adds to the picture. it shows you on the asia-pacific side we are starting to see some movement perhaps could elude to what we would expect on the western side. obviously, it is not the same. economies are different. the rba pause and then raise rates. we are starting to see a bit of a campaign on the fed's side where you have more policymakers pointing. we are talking about a positive moment, but that does not take out of play the intensively another rate hike in july or august. we are talking 25 basis points or more. that is troubling for the equities side, especially when you have apple coming out with avr at $3500 that supports the idea we are not done tightening just yet. alix: what is interesting is

that if you have hedged risk, it does not seem to work. for the u.s. as well, you have a negative view, you are worried about certain angst. but in the market you do not necessarily get the returns. tom: where do you hedge? how do you hedge around these geopolitical risks? based in berlin, covering the german economy, you have data across the eurozone in terms of inflation expectations. data on the ground in germany still looks worse. as we look into the point about how do you hedge around the risks of a deeper recession in the largest economy in europe, how are things unfolding? alex: you have a recession in the german economy. that is getting attention, not as bad as it could have been in the wake of what happened with russia, but you have the manufacturing session in germany for long, pmi's indeed negative

territory since july. and forgive me for bringing it in, but i just spent the last three days standing outside opec and talking about oil and oil prices. but oil is relatively cheap right now. opec does not like that. the prince is trying to do is mario draghi moment yesterday or sunday, saying we will do what is necessary to bring stability. it is not working. but you have to think about what happened. they pulled a million barrels of the market. not paper barrels or theoretical barrels, real ones. and more quietly they have basically launched an audit of other opec countries to figure out how much oil they are producing, meaning they have an accurate baseline so that when they do cut, they're cutting these wheelbarrows spend their biggest not spare capacity. if you want to go against the saudi prince of oil, that is a brave trade to make. alix: even it is not one hope working, there is still a floor.

it is a good start. we appreciate it. coming up, is the market under pricing risk? citi's head of european equity strategy joins us next. this is bloomberg. ♪ what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management

are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today. >> is this -- if this were the

price is right, you would see plenty of people coming into this market. pimco would be one of them. if these rules are biased or unclear or at the expense of investors, the week would decide to step out of it -- maybe we would decide to step out of it.

tom: that was manny roman. is the market under pricing tail risk? let's bring in citi's head of european equity and strategy. we look at what is happening on the ground ukraine, surprising move from the rba. are we under pricing some of these risks? beata: it depends on which parts of the market you are looking at. if you look at the top of the market, perhaps, but that is because underneath the surface, we have hedged this strong rotation insight to quality, flight to defense. the market was starting to price these types of risks in, but on the top of the index, you do not see it yet. alix: thank you for joining us. it is been waiting too long. because mr. kent european -- you have been pessimistic on

european equities. we get a u.s. recession, you want to buy u.s. stocks as a hedge. how does that make sense? beata: it is a bit of a conundrum, but if you think that european equities, it is a more cyclical market versus the u.s. market. even if we seat recession happening earlier in the u.s., the problem with europe is that it's cyclicality will push it lower on a relative basis. we have never seen historically a few us that a u.s. recession without a european one. tom: if you want to expand your exposure to europe, where you need to see the recession in europe? what state? you do not wait till the end of the recession. what are you looking for to add that exposure? beata: we have to start with seeing the recession. that is not started. from an economic standpoint or eps come in europe, eps has only

started rolling over last month. i think the market is going to try to figure out over the next few months how deep it is going to be. is it going to be just a slowdown more something deeper? that depends on the performance and where the leadership is going to come from. alix: to that point, what do you think is going to be the catalyst for that recession? what is the risk that we either do not know or are not accurately pricing? beata: from the market perspective, and for europe, the situation is more complicated. for the last year, european equities have placed in our 20%, but that was the recession that has not happened. we got bailed out by warm weather. the economic recession did not happen. now we are waiting for another traditional monetary tightening- triggered recession.

probably we need to wait a little longer for that to happen, but every time that credit tightening is not going to be severe or inflation actually coming down faster would be a positive catalyst for european equities and cyclicals. tom: analyst consistently underestimated the eps. is there a risk that we underestimate the resilience of european corporate's to maintain those margins? beata: last year was helped by higher inflation. top line was helped. higher energy prices from the commodity sector. we do not get that this year. this year, most of the eps upside in europe comes from the financial sector. there could be some headwinds, not you, but some going forward as we step into this prolonged

slowdown, not particularly a deep recession. alix: if i want to get the protection in the u.s., where in the u.s. would offer me protection? beata: overall, you should be looking into defensiveness. from there global perspective, we like health care and tech. that is crowded but it does not mean it is wrong for the time being. tom: does because valuations for tech -- is that because valuations for tech still like reasonable? have come back up our valuations still looking reasonable? beata: they have done so well performance wise this year. eps, you look at the market in terms of cyclical defensiveness

and growth, it is still pushing higher out of these three buckets. that is ok. another thing is that the market is looking through the peak fed hikes. higher rates were big problem last year. stop being a problem this year. are we going to have a soft landing or not? tech, longer duration stocks give us some protection going forward that is what the market is buying right now. alix: what do you do with china? luxury played a big role when china reopened. it was hard to meet an analyst who was not optimistic on that trade. what do you do with that part of the investment nieces now? -- investment thesis now? beata: we are still bullish on china. we think there will be this second reopening in china, but

that got proposed us postponed. the question is what will be driven? which parts of the equity market in the second part of the recovery? for now, it is bad news but bad news can be good news going forward tom: citi head of european equity strategy on the relative appeal of the u.s. at this moment. stay with us. plenty more coming up. this is bloomberg. ♪ three nights, esg... the broker will take your bonds. -diversification, futures, options. fiduciary. leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise. i'm looking at your asset mix and plan. you are right on track. great, thanks. our easy-to-use app and local advisors are here to help you figure out what's right for your investments.

j.p. morgan wealth management. alix: let's get to one of the

top stories on the bloomberg right now. the shock merger between the pga tour and its saudi backed rival. this is one of the main stories you were following, simone.

what do we know so far? >> huge surprise. we understand from cnbc that both the sovereign's wealth fund and the pga tour have made an agreement but the agreement is not yet finalized. these details will be worked out over the coming weeks. monahan will be ceo. pga will have a majority of appointment power in terms of who sits on the board. the saudi sovereign wealth fund is going to invest in a for-profit entity that the pga tour forms. tom: what do we know about what prompted this? the legal cases? this is essentially the end to a major civil or within golf. simone: absolutely. lots of people were concerned about golf's future, given that

you have essentially split up some of the most major players in the sport, but two tea leaves here. overall, the messages we want to do better for the world of golf, but the man who won the pga tour last month was the first in the live tour to win a major championship. it is very visible that liv is here. there was also ongoing litigation that seemed to be dragging out in a california court. had negative implications, both for the pga tour, as well as the saudi's who do not want to divulge a lot of personal information about how their sovereign wealth fund works. they found an agreement to move forward. it is probably something the saudis are welcoming. alix: did the heat around the sovereign wealth fund commended that diet? is it off the table?

simone: i do not think the heat around saudi investments will ever be off the table. saudi arabia is not going to be a crucial part of sports in the u.s. europe has felt that for a long time but we as americans have not felt it so strongly. saudi arabia, uae, qatar all on football teams. when we talk about sports washing, trying to cover up human rights violations or involving them in the 9/11 attacks is one obligation, that is still going to be an ongoing conversation. now saudi money is involved and that is going to come to the side of the atlantic as well. tom: juan foxman, fantastic in terms of getting us up to speed on that stock announcement between the pga tour and liv golf ending that feud. alix: i know nothing about golf, but i know that you have the backers coming in and that will

mean the money and big transitions. we do not have that the same way except for w w e. tom: cutting some big checks. this is bloomberg. ♪ for up to 44 minutes more restful sleep per night. save $1,500 on the sleep number climate360 smart bed. shop now only at sleep number.

>> a finishing, .2%. in spain and italy, and gains around 20% and we had a survey coming out with the expectations around inflation coming in much lower, significantly lower. looking at just how long they will have to keep rates at an elevated level. here are the movers across the

bench. we continued what is happening, in terms of ukraine. a couple of stories. we will focus on the luxury stocks andrew berry. --in verb very. --luxury stocks. a sick resources ties us to the anglo story shortly. five or six sectors in the red this morning. coming down .7%. it is a positive picture across european equities. let's zero in on burberry. anglo american getting a list as well. turning a little bit more positive. this is the french defense company looking to buy some of

the assets of raytheon. a defense so i playing out for san fran -- safran. the french president and german chancellor will be meeting later today. we have the reporting that the u.s. will be traveling -- having had the support measure come through, not just from real estate but the banks of china being leaned on to reduce the deposit rates and maybe allow them to push out more loans to stimulate the economy. results are in focus as well. in the u.k., the prime minister will be meeting with his counterpart, joe biden, in the u.s. will he bring up a trade deal?

alix: a great, especially in light of the increased violence in ukraine that we have seen the last 24 hours. as the market under pricing risk? judy, some have said what happened in ukraine was a turning point in the war and really ramp things up. titus all? >> it absolutely catastrophic. what we have now is an attempted realignment between president emmanuel macron and the chancellor of germany. the summit is coming up next

month. but there are all sorts of other issues. how to reform institutions. get a huge amount on the case. this is actually the preparation for the state visit by emmanuel macron. a lot of things in place and a lot of things to sort out. tom: how aligned are they? it seems they have moved on that. they talked about in offramp for vladimir putin. how aligned are leaders when it comes to ukraine? >> germany has moved quite a ways in supporting. not the greatest very much

behind ukraine the moment. generally, it is supporting ukraine. in terms of the alignment with friends, emmanuel macron gave a very interesting speech. he talked about security guarantees for ukraine. he talked about the idea of a peace agreement and he was very fluent, very focused, and he went on a huge offensive to bring in the central european detail them, no, i am not into breaking up nato. i want capabilities to support nato and work hand-in-hand. this is a president trying to make a big push to keep europe together and to strengthen the links between berlin and paris, which have been pretty weak and fragile. alix: do leaders believe him?

>> he has a lot on his plate with the pension reform and housing plan by yes, he is making a big effort. not many berlin and paris have to pull together. and we have london with its own interest in the u.s. essentially, it is up to these countries command line with other countries to pull together and keep europe united and keep focused on ukraine. tom: arguably, the u.k. and u.s. have been walking in lockstep. you can make -- we will have the prime minister meeting with joe biden. what do we expect? will anything move?

there has been pushed back from the prime minister's own people about a post-brexit trade deal. i think a post-brexit trade deal is certainly a long way off at the moment. watch for intelligence. watch how london wants to work more closely with u.s. they are losing some of the cohesion and cooperation. i think the prime minister will have to be very careful. just hoping that the biden administration will keep firm and the democrats will rally around president biden, but there is so much on the agenda. it would be nice if london could work closely with the european union. alix: i like that you kind of laugh at the trade deal.

this impacts european leaders and u.k. leaders as well. how is europe thinking about the presidential election? whether it is trump, desantis or anyone else on the republican ticket, i cannot imagine that there is complete leaders right now. -- complacency between leaders right now. >> there should be no room for complacency. to think -- this is the time to push ahead with defense and strengthening nato on the european front. the europeans should stop thinking, who is going to win the next election and get on with putting their house in order, as soon as possible. tom: ironically, that is the

line that trump was pushing for. when you, how deep are the gaps between europe, brussels and washington dc? >> actually, the european commission gave an interesting speech on china de-risking. china is not going to disappear. on our own terms as well. the relationship with brussels, ignoring the member states for the moment, it is working quite well. there is some good chemistry. member states is another issue. i think the bottom line is, are the member states aware that if

they depend on russia, will they increase their dependency on china? tom: we bounce around the world with insight. thank you very much. a senior fellow. let's check where european stocks have settled. as we had to the break, a slightly more positive session. for europe, some of it is around adjustments and inflation, but maybe there was a little bit more money moving in, given the losses that we saw yesterday. above that seven thousand two hundred level, gaining .1%. modest optimism in this european session as we close out the trading day this tuesday.

alix: guy is not here, but he is still here. amanda for air travel. we will have the interview and how they are prepping for a strong travel rebound that does not want to seem to end. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates or filing returns. avalarahhh ahhh

>> you are looking round --you are looking live at the principal room. mark joins us at 3:30 new york time. here is the first word. ukraine says russian forces have blown up a giant dam in the south. it has unleashed a torrent of water putting many areas at risk of flooding. residents have been told to

prepare for evacuation. they will be discussing the attack. in france, unions are holding a first day of strength against emmanuel macron's pension reform. it will test whether the president has succeeded in getting much of the country to move on from the politically damaging fight. he has faced months of protests and strikes. he angered many when he enacted without a full vote from parliament. suing over a law to negotiate prices with pharmaceutical companies. health care giant says it is tantamount to extortion. the inflation reduction act has been argued to be a sham and violating the constitution. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

i'm simone foxman and this is bloomberg. alix: emirates president says he continues to see strength and travel demand. >> we are still short. we have decided to retain. we are focused on the program to fix them up. we still have some work to do. some have been in the desert for quite some time. we will get that sorted out. we will keep them flying until 2032. judging by all those naysayers i

happily bringing them back. it is a great product. it is very profitable for us. at the moment, it is working well. >> already sold out for a very long time? what do you do next? >> we have been there before. the airline has a reputation. i hope that is not going to happen this time. we will have to buy more. we will be making orders fairly soon. >> what kind of orders? quest 747s. we have a fleet of 120. >> he told me that you are a

fleet is aging. do you need to get on with it? quest we do. >> many say soon, do you mean this year? >> we are close to doing something. >> -- tom: coming up, antony blinken visit to china. more on that, next. this is bloomberg. ♪

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j.p. morgan wealth management. alix: stocks are going nowhere. s&p is only up by point 25%. still, it is pretty grim out there. abigail is checking other moves for us.

quest we have a massive rally for us here. comerica, western alliance, all upward of six percent. the index is sharply higher, not me. not entirely clear what is behind this surprised rally. i peace of it could be this massive backup. we had a banking turmoil. if you take a look at the tbl year yield, it has been backing up. it is closer to 460 over this time period. this mass of volatility and yield. prior to the banking turmoil, we

had that two year yield and then it plummeted and now it is going back higher. on the year, we continue to have this massive rally. this is coming close to even come down 3%. thanks --the situation seems to be stabilized. it will be interesting as to whether or not tech can hang onto these big gains. tom: abigail doolittle, thank you. secretary of state antony blinken is set to travel to china.

it is a kind is looking to resume high-level communications with china. 20 us is our guest, who brought us that scoop. what we know about communication and laying groundwork by this -- by the secretary of state? >> he was supposed to go earlier this year but derailed when there was an alleged chinese spy balloon flying over the u.s. and the trip was postponed. now we know that the secretary of state will be going in the coming weeks. he will be headed over to china and it comes on the heels of a number of visits that we have already seen. bill burns making a secret visit to beijing as well as month. national security advisor jake sullivan spent a few days in europe and also, just this week,

meeting with device foreign minister with china. the groundwork has been set up for this meeting. you had lloyd austin with the handshake, but that was no meeting between the two. there also was an incursion or potential close incursion between a chinese vessel and less vessel. the rhetoric is high and it has been a very intense moment. alix: who is secretary blinken going to be anyway? what would a win look like on that front?

>> he will be meeting with officials, possibly his counterpart. this could be a win for the biden administration because he will be meeting, potentially with president xi jinping. there was talk about another phone call and this trip could potentially lay the groundwork. alix: another point on that. when we look for the win, is there something more concrete that we need for a win? i understand talk would be good, but a planned meeting after that, president biden getting involved with that, without be a win as well? wesley know that a number of officials have said that they want to travel to china and meet their counterparts. janet yellen said she plans to go to china and she also

reiterated that timmy at the g7 in japan during her sit-down interview. this potentially lays the framework for not just a call with president biden but other u.s. officials to have that regular dialogue with their counterparts. it comes at an awkward moment because the past weekend, the chinese really rebuked what the pentagon wanted, a sit down because of sanctions that are on the chinese defense minister from 2018, but in terms of tangible deliveries, i think what they are trying to do is reveal around this relationship. last summer you had been speaker nancy pelosi head over to taiwan and they were getting back on track. after bali, there was that spy balloon and another deterioration in the relationship. between all that, we have had tit-for-tat.

alix: thank you so much. that rested up here. coming up, the ceo joining bloomberg technology at the top of the hour. this is bloomberg. ♪

announcer: from the heart of where innovation, money, and power collide into looking valley and beyond. this is from big -- "bloomberg technology" with caroline hyde and ed ludlow. caroline: i am caroline hyde at bloomberg's world headquarters in york. ed: i am at ludlow in san francisco. this is "bloomberg technology." caroline: sequoia splits into three firms. it divides into several entities as you political tensions are on the rise and we break on the announcement. ed: coinbase is the latest