the dollar gains. the ecb is expected to raise rates by one quarter point later today. we will be looking outlook from christine lagarde and banks and we will be live in frankfurt. let's take a look at futures. a lot of the focus is about central banks today. we look at the dot plot of the fed and i would point everyone to a wonderful piece. we ask a very simple but

profound question. if we see such a hawkish tilt, why not raise rates from the fed ? equities are open. you can see the spanish index down here at the ftse is practically unchanged. the other story bear watching in the u.k. is a review -- the other story we are watching is the review on the banks. is the u.k. unlistenable? we have an interview with the chief executive of we soda. the other stories are commodities, what the china stimulus from the pboc means from oil consumption, oil demand will also some of the iron ore and things they need to build the construction that is going on over there. we look at the sovereign bonds, foreign exchange always interesting to look at. we also have the cac 40 opening .8% lower. if you look at the cross asset we are looking at treasuries and dollar. you can see the u.s. 2-year yields at 4.7416.

the bloomberg dollar index we will do it through a basket of currency but that bloomberg index is 1000 2031. the fed has paused following 15 months of rate hikes. emmanuel cau, head of european equity strategy at barclays joins us. they were quite hawkish and i don't know whether the markets really believed they were hawkish or it is just a sigh of relief that they did not hike yesterday. >> it was a hawkish cause for sure and my take away is that the fed is undecided about the path of rates ahead. they told us that the next meeting would be a live meeting and they are very data dependent. there's a good reason to be data-dependent because it is hard to interpret. we see some cracks and signs of disinflation but we also have a very tight labor market, which is forcing the fed to keep

hawkish. i am not sure the fed moved the needle. the market was expecting this outcome and that is what we got to. francine: why is the debt all over the place? are we counting it wrong? is it a covid legacy or just adjustment that means the path forward is difficult to see ? emmanuel: we are getting out of three years of an ordinary situation. we had a war in ukraine and so many unusual events that the data has to be taken with a pinch of salt. we are late in the cycle, tightening cycle. we have to see if it is handy -- having impact on inflation. we need to give central banks more time and not commit to a particular outcome. francine: what is the probability of recession? good luck does not think the fed

will resume rate hikes soon. we also heard from another giant saying they are loading up on credit because we are going to see a recession in the u.s.. emmanuel: the tightening the uncertainty but the direction seems to be pretty clear. francine: the markets don't believe it. emmanuel: the bull market seems to be resting in to the rates. the bull market is giving oppression that more tightening -- what matters is the earnings. i don't see the central banks having big earnings because they had to adjust absolve because of the rates moving. now you can see the bulk of the rate hikes is largely behind us. earnings will carry on and keep supporting the equity market or will the earnings start to go to the recession rates. francine: i have to bring morning must read which is from a favorite author from bloomberg opinion.

he says this was an unequivocal hawkish surprise from the fed. the question now arises is there so much more convinced that rates need to be higher for longer? why pass an opportunity to raise now? do you think there is a worry about the banks? are they worried about markets and is that why they are pausing or they want to see how it plays out? emmanuel: i'm not sure they are worried. inflation is coming down. we got softer ppi yesterday. you start to see some softening in labor market. we had clearly some issues in the banking sector. it made sense late in the right cycle for the fed to give it one time in be much more nimble than the ways that it delivers the data. francine: it is quite extraordinary that we can raise rates from zero or 1% 5% without anything major happening with country -- companies. emmanuel: a lot was done after

the financial crisis to strengthen the financial sector. we see it delivering his and the banking and consumer sectors. the product sector in the butter position to absorb the hikes. how long does it take for the central banks to hit? francine: still pretty incredible to raise interest rates so rapidly and us being ok. emmanuel: there is massive fiscal stimulus in the past few years. consumer -- is higher up to a certain point. we see cracks in housing market, in the labor market and we start to see the transmission mechanism is working. i guess not enough for central banks but it makes sense for the fed to be more prudent in their communication at least. francine: how do see consumer behavior changing and what does that mean for earnings? people still have a lot of savings from covid. people are willing to spend on

holidays. i don't know whether because they are fed up or it is just the summer months. how does that change into the winter months? emmanuel: there is pent-up demand in the key driver of spending labor market is strong wages, full employment. in some cases, the disinflation with gas prices and energy prices coming down should be a relief to the were and provide a bit of income support. the question is whether in the winter you see more sign of labor market weakening that would typically take us into a recession. we start to see some sign of maybe down trading in the u.s. and son segments of consumption so that is something to keep an eye on. earnings tend to be supported by consumption. francine: where do you want to be invested? there is a big european discounts, and i don't know whether that is justified or it is mainly american big funds looking at europe and not wanting to touch it. emmanuel: the valuation

comparison between the europe and the u.s. is a bit unfair. the u.s. has very strong tech leadership. if you strip out the tech stocks which are driving index on the europe is -- there is a lot of value in your. the new story in town is china. we talk about the central banks hiking rates in tightening policies in the western world but in china, you have the pboc doing more to support the economy. the growth policy in china is changing. we are seeing china exposure in the market start to look interesting. francine: you can take that as a positive because you say it will support the economy or you can take that as a negative as well via the seeing something that markets are not seeing. how deep you think the slow down in china is and what does it mean for exporting countries? emmanuel: the data is bad. the data points disappointing this morning but the good news is this is finally coming with more policy support.

what you want is backdated in china because there more policy -- and the risk reward is getting better. in the first half of the year there was slower growth. now they seem to be keen to wrap -- revitalize growth. francine: emmanuel cau from barclays. he stays with us and up next we talk european equities. we look ahead to the ecb rate decision whether the central bank is in its home stretch of a hiking cycle. that is next in this is bloomberg. ♪

francine: welcome back to the open. 11 minutes into the european trading day. a bit of pressure across the board. there is nothing else central banks haired i'm kidding. there is corporate news. we have the big take and is about the fed hawkish tilt they did not hike interest rate but what comes next? the other question we are asking away from the pboc and the ecb that we are expecting is asos pared shares are jumping 15% after some pretty good third-quarter results in the last couple of quarters though, asos has been under pressure as well. keep that in mind. we will do a longer term chart to see the full year prospects. the european central bank gathers in frankfurt's latest

monetary policy decision today. the ecb is widely expected to hike rates again. for more european cons -- correspondent maria tadeo joins us from frankfurt. what exactly are we expecting? is this fine tuning? maria: yes, in many ways because it is wildly expected, very well calibrated that the european central bank will hike today again 25 basis points, and that should take in principle the deposit rate to 3.5%. it comes a day after the fed decided to hit pause. the press conference had a lot of nuance. the question is will this have any implications today when it comes to the european central bank? the monetary policy decision itself, it will not spared the head of the european central bank has been clear they are data dependent, not said dependent. that went to another hike.

-- that points to another hike. there is a common thread of the endgame. what happens when you roach the final stage? i'm not saying today will be the final hike. july for the ecb is very much in the cards. the idea of how do you fine-tune and calibrate the end? we get to that stage, the trade-offs become complicated, maintain that consensus in the governing council can get heated. this press comes today, i think this is going to be an interesting one. francine: i wonder how many questions marine -- madame lagarde will have to field on the banks and what to do with the balance sheet. we had economic projections so what are we expecting? what are you looking out for? maria: yes, and they are always important, but this time around, you focus on two numbers, inflation and if you look up expectations as of now, they were hoping and expecting to see inflation 2.9% in 2024 and 2.1%

in 2025. those numbers will be crucial because this is a central bank that wants to look at the medium target. there are a lot of seasonal factors that matter when you look at inflation. energy has created huge distortions. they want to see the medium-term impact to get that group that the forces of monetary policy are working. the other number is gdp. the euro area is a technical recession and we are getting a we are divergence between the manufacturing and services situations in europe. to me, it will be interesting to see whether she says the economy actually could face a lot of headlands. this is not just a one-off. there are fundamental problems over europe and in the press conference, one question that will come up i presume is what happens in july. is it 25 basis when? do you stop or take a breather and reassess in september? francine: the trillion dollar question. maria tadeo in frankfurt for the

ecb. let's get back to the ecb story but equities with emmanuel cau, head of european equity strategy at barclays. when you look at the ecb, i don't know whether from an equity point of view but it is really that tltro's and the small banks. do worry about the small banking sector? emmanuel: we don't but i think the ecb has to be a bit more open to the idea that we are now in the cycle and have cracks in the economy, growth is slowing, and the banking sector is very much liquidity dependence. i think the ecb has to find a way to keep fighting inflation and hiking rates as much as they have to, but at the same time, try to disconnect and preserve the banking sector. there are measures they can put in place to mitigate the impact of tltro's in the banks but they

are walking a fine line here. that communication will focus probably am trying to distinguish what they have to do to fight inflation and how much you can do to still keep the banking sector supported by liquidity. francine: you talk about technicals being frothy. worldwide and especially in the u.s.. you look at the tentative broadening of leadership in small caps that you can technically allocate to. what is your take away from europe in general? where do you want to be invested in right now? emmanuel: under the hood, there's a lot of dislocations in the markets. it is a very strange but markets. what we like is as of yesterday, china exposure. we raised our closure to china and mining. the mining is down 10% in europe. we think that is a clear catalyst with china being more supportive of growth. that data is good news finally

in china again. small caps are down 25% from 2021. they are more domestic dependent and bank lending dependent but we find them very cheap and giving investors very strong growth supporting the valuation right now. francine: cyclicals in europe? emmanuel: we like cyclicals vote late in the cycle there's optionality. we are reallocating more to the china exposure cyclicals. francine: what do you do with retail? the markets have been jumping all over the place. we saw huge exposure to luxury and they did very well done the market had a lot of questions about china. asos, a lot about questions the last couple quarters but now the share price is up 15%. emmanuel: some of the names in retail might be helped because there was dislocations in last six months. we see some sub port for the low-end consumer. disinflation is good news for the consumer. moderating cost-of-living crisis

on the continents with gas prices, energy prices coming down, hence cpi coming down in the environment of a very strong labor market should come as a relief to the consumer. there are sectors that could benefit from that. francine: if you look at nvidia now worth $1 trillion. , is there anything in europe that looks attractive? there was a french company that has been linked to ai and got 100 million and does not produce anything. our reits in a tech bubble? emmanuel: we are in a tech frenzy for sure. we see the broader tech universe benefiting from the fear of missing out which is forcing investors to go back and chase some of the tech. would like software because it is the easiest way for us to get a claim on the ai interest now. positioning is still not crazy. people are very underweight tech at start of the year and preparing for higher for longer

rates. but we are seeing now is people coming back to tech but it looks a bit hot. we stick to underway untaxed because earners -- earnings will be supported. francine: what do you do with european energy stocks? emmanuel: we are not in energy. we are swapping energy for minors. ers. china is doing more to support the housing market which is a key driver of the mining sector in your. energy is a bit more about softer demand and develop markets and in the world of disinflation, energy should be basically constrained. it is cheap, very good yield, and it might matter for investors but in terms of catalysts, the price -- and disinflation, we don't see energy performing. francine: thank you so much for joining us today. emmanuel cau from barclays.

coming up, is london losing its phase? we speak to the chief executive of we saw to after they pulled plans for an ipo. the interview at 8:40 a.m. london time. this is bloomberg. ♪

francine: welcome back to the open. 23 minutes into the european

trading day. the picture across the board european stocks at 0.2%. hawkish tilt for the fed but they paused yesterday. now it is the turn of the ecb. let's look at stocks on the move with joe easton from our equities team. we start with retail. joe: we are looking at retail specifically in the fashion space. a couple of the big names out with earnings today. firstly, asos. they are reporting a return to profit as sales slumped around 15% in last quarter. they are cutting costs and that sent the stock up 12%. it was up 15% earlier, the biggest gain in five months. h&m also going. the headline was negative sales dropping but they were basically blaming that on some cold weather in march. actually, has improved in june. that stock is going higher alongside asos. i have also brought up inditex, the owner of zahra and ab foods,

the owner of primerica moving higher. bernstein helping to push that will sector up today. francine: joe, overall, is there a theme? we looked at the softer one and the tech team is strong. joe: exactly. tech looking pretty good today. software one 1 -- just opened. it opened up 20% higher. bain capital, the private equity company is coming in with a bid. the bid is at 1850 francs a share. it has gone up to 18.2. there is drama because while the investors in terms of the founders are backing this deal, they said it is a good deal, the board has put out a separate statement this morning saying it is not a good deal and undervalues the firm. the stock a couple of years ago traded at 30 swiss francs a share. you can see why they think it does not actually value the company fully. the tech pretty strong today and software one, the enterprise firm the best one over in zürich

this morning. legal and general group have a new chief executive antonio from santander air. he did 13 years hsbc and worked in the u.k.. he has a u.k. connection however the asset management space is weak across the board. that stock is down 1.2%. i don't think it is a reflection of the market's view on the new ceo. it is more a broader move. i also brought up diageo this is booze, spirits come again experience -- guinness. down be on the spirit market at the moment so they don't think you should buy shares of diageo. diageo and legal and general are the worst performers on the ftse 100 today. francine: joe easton with the stocks to watch. odey, the hedge fund the news because of scandals in the last

seven days but bloomberg has broken the stories of the last 12 months. they are now is in defense talks on rehousing some funds to other managers. this is just the latest after we know that the hedge fund also asked has been odey -- asked crispin odey to leave and a new person has been placed in charge. a bit of pressure across the board down .2% as we await the ecb. coming up, we speak to joe lonsdale who will be discussing investments in europe at the founders event. that is next and this is bloomberg. ♪

francine: welcome back to the open. 30 minutes into the european trading day and here are your top stories. >> it will be appropriate to cut

rates at such time that inflation is coming down really significantly. again, we are talking about a couple of years out neared i think that as anyone can see, not a single person on the committee wrote down a rate cut this year. francine: fed chair jay powell signals more hikes this year after the fomc keeps rates on hold. the chinese economy deteriorates. a european stocks and u.s. futures turn lower. finally, the ecb expected to raise rates a quarter-point later today. markets will be watching out for the outlook from president christine lagarde. we are live in frankfurt. this is the picture for equities. we saw a little bit of a downturn partly because there are questions about the inflation path going forward. maybe it is a bit of profit taking after what we heard from the fed, which is a hawkish tilt but they paused. the markets not quite leading they will be -- they will be as hawkish. european stocks down 0.2%.

let's take you get sectors that are on the move. joe easton was bring us some of the stocks that are moving. asos more of the biggest gainers , third quarter extremely strong, up 15%. retail is 1.2% higher. basic resources under pressure down 1.2%. maybe that is on the back of the pboc having to do more because of weaker data from china. what does the future hold for tech enabled industries and their business model? that is part of the conversation at the founders form where investors, chief executives and political leaders are meeting. our very own tom mackenzie is at the event. tom come over to you and good morning. tom: francine, good morning. a bright and sunny founders form here. i have joe lonsdale, managing partner at 8cv. a cofounder of palantir. quite frankly, a pretty big name in terms of the world attack and investing in entrepreneurship.

no, thank you for joining us. let's start with what is exciting you. what is the focus? what is your terms of appetite for opportunity? joe: thanks for having me. it's is great to be here in london. a lot of talent here. obviously, everyone is focusing on ai. we have an industrial revolution that can improve society with healthcare and other areas. we are looking for the top technology cultures in the world working on things that are really possible. your seen stop in defense, bio, a lot of areas these days. tom: talk to us about ai and regulation. jeffrey hinton known as the godfather of a i left google who -- so he could speak more openly about the risks he is worried about, military combined with ai, a irobot. that is the kind of thing palantir might be involved in. is he overstating the risks of this technology? joe: i really admire jeffrey hinton and what he achieved.

i've all more on the side of marc andreessen on this debate. it is extraordinary the positive site -- upside we offer society. we should think of this as another industrial revolution. during the last when gdp went up to hundred percent. the average person was more than three times wealthier one generation later. i think it could be even bigger than that this time. you can think of having personalized ai coaches and teachers and therapists for everyone. there's so much prosperity and well-being we could create the world with this. tom: misinformation, job displacement, even potentially ai created humanity global extinction, these are the risks people are talking about. are they real? how far off are they? what should the guardrails be in the role government? joe: it is difficult for any top-down force to decide what is real information what is misinformation.

this is why the u.s. has a first amendment and english historically have free english. while he would definitely get all sorts of misinformation, i think the positive upside massively outweigh that. tom: should the government have a role in regulating ai? joe: there's probably purposeful liable that should be there. it should be limited because the way the technologies work we don't know exactly how to apply them and what they look like. the upside of fixing healthcare and making industry so more productive's high promise. there is the question of existential threats. sam altman has been talking about some of these issues. i would disagree with him on how the government -- having the government very involved. i agree that imagine is the year 2032 and gpt 12 is out. the ai helped design it and there is north korea as well as maybe some crazy autocrats and

other billionaires trying to build their own uber cluster gp's that have more intelligence on the entire human race. maybe we should be careful about who gets to have a $10 million super cluster with super advanced ai. the whole point is we have to watch this closely and learn how it works. we have be careful not to kill it in its infancy. tom: elon musk says we should press the pause button for six months. joe: i have a lot of respect for elon and there is some frustration with how openai integrated after he wanted it and it became beholden to microsoft and other structures. if we pause what happens as china keeps going and they get way ahead and make it to shape the future of it and the world more it's the direction he wants. that, to me, is much worse. tom: europe wants to set the agenda in terms of regulating ai. what is their playbook like? are they taking the right approach? joe: i don't want to be too rude here but i don't think europe is on the forefront right now.

i think america and china are, and the most likely outcome for europe and china to regulate it is a prevent the industrial from happening in europe and it remains a place where it is very nice to take my doctors on vacation but maybe not part of the future of the world innovation wise. this is the one possible upside of brexit you could talk about is that may be europe commit suicide with relation and stops development there and maybe the u.k. get it right and does not do so. tom: may be europe commits suicide with this regulation. that is a strong line. a lot of spending on defense. are you getting involved in ukraine, nato in terms of defense contracts? joe: in the europe situation is not just coming for me. i have a lot of friends who are leaders trying to write regulators and preventing them from doing it -- doing this. on the defense side, it has been heartening to see people finally agree with defense stuff. as a founder of palantir, we have been involved in this for a

long time. a lot of people thought it was very strange to be doing defense five or six years ago and now they all want to invest. i hope there is a long-term responsibility where the europeans get their spend up to levels they agreed with nato and pull their own weight which we have not seen them doing for 20 years. this promising they are starting to do it now. is it a temporary flash in the pan because of ukraine or do they maintain that response ability? that is an open question for defense companies. tom: 2024 u.s. elections, are you backing ron desantis? joe: yeah, i am a supporter of ron desantis. i apologize for the reality show going on in america. it is very embarrassing with all of this. i thought a lot of with the trump administration did was very positive. i think the man himself has become even more of an embarrassment in the last couple of years. tom: is trump a busted flesh?

joe: i don't think he is as strong as he was a few years ago and is very concerning a lot of things he did. the only alternative is to santos. tom: are you fundraising and putting money towards his campaign, ron desantis? joe: i have a policy group that is active in 12 states and works with a lot of governors. he has been one of the most competent people we are ever working with. he is very competent on the details and has advanced questions. when there is a crisis he shows up and fixes things. we need someone who is competent. tom: last one, elon musk is a friend. should he run for office at some point? joe: i don't think he is allowed to become president because he was not born in the u.s.. is extremely competent. whoever is president should bring him to the white house and get his advice on a number of issues. it is a mistake that biden is not doing that.

tom: joe lonsdale, managing partner for 8cv and backing ron desantis and alleges suicide that europe might be committing when it comes to artificial intelligence. francine: tom mackenzie, founders forum event in oxford. coming up later come up more from the founders forum. we will speak to the blue chief ai expected. traders are preparing for the boj tomorrow and later on, we talk with a company that decided not to list in london. is london losing its is? we speak with the chief executive of we soda after the company impose its plan for an ipo. that is next and this is bloomberg. ♪

francine: welcome back to the open. 43 minutes into the european trading day. a little bit of pressure across the board. stocks retreating on the back of the weak economic data from china. we saw support from the pboc on what they are trying to do with the economy and traders are looking forward to the ecb later in looking back at the fed yesterday with a hawkish tilt although they did not raise rates. now onto a corporate story, a big corporate story. the world's largest producer of natural soda ash, we soda has pulled the london ipo two weeks after nancy. it cited extreme investor caution said in british capital for its decision. i'm very pleased to welcome the chief executive of we soda, alasdair warren to the program. this is huge news. why did you pull the ipo? alasdair: the good news about

our ipo as we attracted a broad range of investor interest. the bad news and recently hold it is because whilst we were prepared to accept the normal valuation discount that you get with ipo's, where investors got to was such an extreme position that we took a view that the valuation did not make ends for us. given that we did not need the money, we decided to pull the ipo. francine: if you decide to list elsewhere do you think ipo would have gone ahead? alasdair: i think within the european markets at large, i don't think it would have made a difference. i don't think this is a london versus paris versus amsterdam issue. i think it is an interesting debate as to whether the u.s. would have been more supportive, but that makes no sense for our business today. i think within the context of year, it would have probably ended up with a broadly similar outcome. francine: have you tried to list it in new york would be have a better chance of going through had your business model permitted because of capital flows or investors? alasdair: yeah, ultimately the issues in europe is there is a

very high level of caution because the ipo market has been closed for such a long time. there has been one or two and notably big-name ipo's that have got done but generally, it has been closed. i think today there is just such a level of caution, such a fear of what will happen in the aftermarket that people just drive ever lower values. what you really need is a group of investors that are prepared to look at a company on its strengths, fundamentals and have the conviction to step forward. francine: why do you think ipo market has been closed? is it that investors are nervous? is it regulation? what are the things you worry about which leads to the future of this continent? alasdair: i think people point to regulation, but i don't think that is the major issue. and people try to point the finger at london versus europe. i don't think that is issue and brexit. i do think one of the challenges we have today is on the buy side, there seems to be very few

investors that are prepared to look at things on their fundamentals and identify the differences. people like shorthand ways of coming to valuation conclusions and sometimes for companies like ours, you got to look at fundamentals before you can reach a value conclusion. francine: is that different in the u.s.? alasdair: it does seem to be a little bit different. you have a far broader pool of investors to start with and i think people tend to have higher levels of conviction to back themselves as opposed to following others. francine: this is a blip because of covid, because of ukraine and maybe investor longer-term investor appetite to be in europe or do think this is a structural problem? alasdair: when ipo's work, they all work. when the ipo market closed, it is difficult to get anything to work and we are an example of that. what better company than something with drawn cash flow,

asset-backed, huge margins, global leader, sustainability? you think that would work but it didn't. francine: she regrets during the process? alasdair: not at all. we always described as a long-term journey and we would have liked to have gotten there. a large number of people have done enormous amount of work to get us to this place and we wanted to succeed but we did not need the money. we will go back to business and carry on with our growth projects and commercial initiatives and drive the business forward. francine: the longer term plan is get bigger in the u.s.? alasdair: exactly. francine: where the narratives that help you make a better u.s. business and then list in the u.s. possibly? alasdair: access to the resources. we are going to grow more than double over the next five or six years and most of that growth is in the u.s. precisely that reason. once you have a big u.s. business, it opens other options in terms of the listing. francine: what would be your ideal listing venue in the u.s.?

alasdair: we have not given us a lot of topologically would be the new york on the new york stock exchange. i think that over time that will become a more viable option for us but i'm not saying that we would not consider listing here again. for now, it is back to business as usual. francine: what are some of the pitfalls or worries you have in the u.s.? at the moment, it could be the economy, politics, quite divided country. alasdair: yeah but ours is a global business. we sell in 80 countries. whilst we would be producing their, more than 80% of what we produce will be exported and exported to largely the growth economies of the world because that is the people that are really consuming more and more soda. francine: we are at in an election cycle and everyone is freaking out trying to figure out what it means for policy but you could see, and i don't know if it is something in your modeling, tariffs going up in the u.s. becoming more insular.

alasdair: you could but think about it like this. soda ash is one of the few industrial commodities where the u.s. has the hand over china. china is the single biggest consumer and the u.s. has a single largest resource base. i think that it will be shooting themselves in the foot if they were to do something that would prohibit them from taking advantage of that position. francine: do you feel like you are in the middle of geopolitics? alasdair: no not really. francine: do you try to lobby governors in the u.s.? alasdair: so -- is the 10th most consumed industrial ingredient but sits below the radar for most people. before we contemplated our ipo people had never heard of it. francine: how can you stay below the radar for long? it is a lucrative company and biggest -- big business. alasdair: first of all, you cannot produce last without soda ash.

are they going to put barriers to prevent that from happening? i don't think that is logical. francine: thank you for joining us today. wonderful conversation with the we soda chief executive alasdair warren joining us. coming up, the medical week for central banks roles on -- mega week for central banks roles on. that is next and this is bloomberg. ♪

francine: the mega week for central banks roles on with the ecb and central bank set to deliver the right decisions. joining us now is nora from the mliv team. we have encouraging news from the fed but not so from the pboc. >> absolutely and's and the diversions issued the ecb is going to give us a unified voice and perhaps some anticipated calm. we know exactly what the ecb is going to do because that is exactly what they have been telling us they are going to do in the markets are bought on that. 25 basis points expected across the board. it has been a unanimous message across all ecb and policy makers and the messaging here is going to be will we get another one in july eco a lot of people are thinking the ecb has said that but we are 70% sure in term of market pricing whether or not it

will get a july and then a big pause and come back in september. we will see whether that debate continues to shift or we will get more question of whether or not potentially there is room for a pause sooner than expected. francine: this is dependent on data. if you look at modeling which most people got wrong, it went up significantly and is now coming down. has a come down enough for central banks? nour: that's a good question. first of all, the fed came out yesterday and said we are going to be data-dependent but they did not give us the data that we wanted. a lot more flexible in terms of what they are looking at. we are not really sure what is the right equation for central banks. what is the case for europe in particular, tightening ready conditions. we are in restricted territory for monetary policy. some central bankers in europe especially the german and austrians don't think so and think we are still a ways from there but there is still -- inflation has pointed surprise to the downside last time at

least in the may print. there's a lot of supportive data out there that shows perhaps there is more space for a pause if the ecb wills it may be room for a couple more hikes to make sure that we've got inflation in the bad. francine: we have ecb today and the he boj -- pboc 12. nour: we had reporting last week we are not going to abandon the yield curve. the boj is going to stay in line with what they have done. the new central bank governors still adjusting to his new post. japan has been talking about becoming more accommodative in terms of the budget and supporting the government but to be honest we are not pricing for that in the market. there is room for upside surprise. i don't know if we will see that and i think the yen can definitely show that. trading at 1.39 we will potentially continue in that market.

if there is a surprise, we are not prepared for that from the markets perspective. francine: all bets are off. thank you so much. nour al ali. a lot of traders are preparing for the boj tomorrow. coming up, plenty more on the markets. that is it the european market open. surveillance early edition is up next. stocks retreating and sentiment subdued by the federal reserve's hawkish tone. we had week and i'm from china weighing on resource companies. more on the markets next and this is bloomberg. ♪

>> this is berg surveillance early edition with francine lacqua