and follow the plan, it works.

>> good morning, this is "bloomberg daybreak: europe." i am tom in london. no rush to god, treasuries drop us the fed's christopher waller says the u.s. central bank should delay or slow the pace of interest rate cuts. >> in my view it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to recent data. tom: s&p 500 gets a late day booster finish at a record high. we will take a closer look at how markets have fared so far this year as we head into the last major trading day of the quarter. plus intervention watch, the yen

with the many traders i 152 per dollar as a possible trigger for officials to take action. fresh records across european stocks in the u.s. european stocks three straight days of gains in european futures looking to build on that despite the caution. christopher waller wants to see a couple months were dated to get the confidence before he is clear that there is an ability and a window to cut. cautionary lines coming through from chris waller, and use all that move across the yield curve. comments coming after the market closed stateside. ftse 100 edging closer to the 8000 level pointing up by .5 of 1%. commodities getting a lift in the session. s&p closing above 5000 200, a fresh record. nasdaq futures pointing at 18500

also in pause territory. that could come from inflation data or jay powell and the speech expected to come through as part of the san francisco fed event. cross asset, chicken of the yield story, up for basis points at the front end -- up four basis points at the front end. japanese yen still in focus as officials reiterate their determination to potentially intervene. 15138. brent higher after a little bit of softness, it is six dollars per barrel. gold just above the $2200 level, up .11 of 1% on the yellow metal. federal reserve governor chris waller saying the central bank should delay or reduce the number of rate cut scene this year. policymakers have penciled in the reproductions, but waller's

has a strong u.s. economy and robust hiring have given the fed room to wait. >> in my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in a to recent data. i see no rush and beginning to take the step to ease monetary policy. tom: for more let's bring in mark cranfield. talk to us about the market reaction to what seems to be relatively hawkish comments from chris waller. >> it was possibly exaggerated slightly because we are getting close to easter and the markets are less liquid than usual, but treasuries took it pretty hard. as soon as they heard their comments if there was a selloff across the treasury curve and the two year ticket badly. it follows some relatively hawkish comments from mr. bostic

who was only looking for one interest rate cut this year. more fed speakers coming up in the next few days, jerome powell as well, but there is quite a bit of pushback already. last week we had the fomc and euphoria about the idea of rate cuts being three for this year, and there was a lot of dialing back in the meantime and we are about to go into the second quarter so there will be rethinking of investors. equities are good, u.s. dollar relatively strongly to bonds have been a good layer as well, yet here we are on the cusp of going into the second quarter and may be people have to dial back on some of these ideas as they rethink what the fed has to say. there is big data coming up including the pce, so by the weekend people have a lot to think about. might not be quite so optimistic as they were just a few days ago. tom: we will see if jay powell

reiterates the line that he sees they are not far from having the confidence to cut, the line that came out from jay powell a couple of weeks ago. a lot of data coming through from the u.s. and japan. how are you looking at that and the tie-in to dollar-yen and have officials in tokyo got the path now? there is a little stability. >> colleagues in japan have been running a new index, the chief foreign exchange guy at the ministry of finance have been putting into context two major comments he has been making. one is about the yen moving by 10 big figures going from 140 to 150 over a short space of time and a four percentage point move in the space of a few weeks. putting that into calculations, they do not think he is ready to pull the trigger on intervention yet, so dollar-yen probably needs to go higher before we see that.

i've a factor in 2022 is the speed. we saw consecutive increases. it was going to quickly so they had to do something about it. the numbers are similar, we are up near the 152 level, but we have gotten there more slowly, so maybe that is providing some comfort to the japanese. on the others they are not getting any help from the federal reserve, the federal reserve possibly pushing back rate cuts a little further. that does not help japan where it investors think rate gap is so wide, so much in favor of the u.s. dollar it is not helping the japanese yen and that will not change for a while, so the fact against them are quite higher. if they come into being early it could end up being a nonevent and traders will not be invest in that will cost them more money when they need to get serious and support the yen.

tom: the timing will be important. said is -- setting this up nicely for a check on the asian markets. avril hong, what are you looking at? avril: asia market seemed to be shrugging off the hawkish comments even ahead of what we get from data, tokyo and cpi seem to be taking their things in stride may be because we got the hawkish comments at the start of the week from bostic, so for now chinese equities reversing their losses from yesterday. leading the charge, meituan helping to boost the hang seng after he got its upgrade from the outlook from stable to positive by moody's. this is the chinese food delivery giant. let's take a look at what else is moving higher. the taiwanese iphoto maker that also makes ai servers is rallying to a record high and

has been moving higher for this month. at the start of the month we saw it posting strong quarterly earnings and between then and now per urges -- a brokerages upgrading their stock. let's take a look at some of the drugs as well. we have the icbc earnings, chinese state lenders have been showing ratio is rising, increasingly it looks like the property crisis is showing up on their balance sheets. we have bank of china, country garden expecting to show deepening losses. it did close a percent -- 8% down yesterday. you were talking with mark, we have seen a brief respite on

dollar-yet after a summary for the march meeting where they heightened rates and somehow managed to send the yen weaker. we see it move back toward the 151.3 level. japan equities a reversal from yesterday, so that is the drag we are seeing on the a package today. -- apec gauge today. tom: let's say on the japan story because it is been one of the most consequential of this week, japanese officials reiterating it will not rule out any options to deal with excessive moves in the end, the currency hitting a 34 year low on wednesday triggering warnings from the finance minister, and we had the unscheduled meeting of the nation's economic authorities. standing by with this is paul jackson. what do you make of the meeting

yesterday, and how it informs our understanding of officials and their appetite to intervene? >> i think the three-way meeting with something they probably would have to keep in the back pocket for more extreme scenario, but they have pulled that joker, and maybe they have the easter weekend in mind because we are entering a period of low liquidity. that means any moves could be sharper, could be nerves out there and sharp movement could trigger intervention or a need to consider that factor, so maybe that is where they pulled it out of the bag late yesterday afternoon. it did have an impact. we got down to 151.03 last night. it weakened again since then,

but i think they have done enough for now. the problem is now is not a very long time when you were in a currency market in this situation, so i think we have already heard mention of the data coming through over the coming days. we have got pce data in the u.s., inflation, ism data. tokyo data could be a catalyst for moving the currency. one of the key things is it is all down to the expectations on when the fed is going to cut rates. we had hawkish comments overnight which has not help the situation. if you look at swaps, we are looking at a january cut a month ago looking odds on for that to

happen. that is looking less likely now. we have got talk of just one cut this year. surprise, a month ago dollar-yet was about 149.9, so that shows the extent of those expectations shaping the dynamics of the currency market. tom: you can almost picture officials in tokyo with their heads in their hands when they see these lines crossing. you have illustrated the tension , the gravitational pull back to the fed and what it means and outline for us to we have one of the most hawkish members of the bank of japan striking that dovish tone this week. with all of the context of the fed and the importance of that role plays a patent that they will take at this very slowly in terms of the further rate increases? >> this is always been the plan

to go slow. they reassure and do not rush this. they spent more than a decade on this grand experiment to generate inflation, so they do not want to mess it up after all this time, so there is a waiting game. the key point is if the fed expectations of a rate that really do get pushed back significantly down to the one cut scenario, then the boj might have to have a bit of a re-think and micrometer a bit more pressure to bring its next rate further forward. expectations are now that the next rate hike will be by october but if the fed expectations get put back maybe

we will start to see july emerging as the next possible time. tom: really interesting with the context. i'll jackson, thank you very much. in the u.k. 7:00 a.m. london time finalized first quarter. we will get initial jobless claims out of the u.s. and today the final major trading day of the quarter. japan, japanese stocks of the best performing major stock market in this quarter even as they face pressure today. a french media company intensifies its pursuit of a south african broadcaster multi-choice group. we will have the latest on the potential $2.9 billion deal. this is bloomberg. ♪

tom: south african billionaire motsepe is in talks to join a bid for the broadcaster multichoice. bloomberg understands the french media company is looking to make a formal offer early next month. let's bring in ondiro. what is dictated against -- the significance of him joining this a bid? >> there is something called a black economic empowerment affirmative action that requires that at least 25% of companies must be owned by black people so patrice coming on the board helps them create this environment. it also helps them diversified

their wealth portfolio is this it started to be one of the biggest deals in south africa. vivendi will be drafting an offer and evaluate the total company at $2.9 billion. it will be conceded by an independent board and we will know the outcome over the next two or three weeks of these considerations. tom: if the deal goes through, what are the implications for vivendi and its appetite for expansion on the continent? >> it opens them up to the rest of africa. they have a heavy concentration in franco africa, so it opens them up to 50 african countries and bring on board 8 million subscribers. they are hoping to build it up to 15 million, and invest in local content and also sports. they are hoping to take on global streaming giants and this is the best avenue to do this because they are the leaming --

leading streamers in africa i had of netflix. tom: a significant potential deal in the media space. thank you for bringing us the details. the consequences of the baltimore bridge club sent to rome discuss global supply chain shocks with the cfo of dhl group. few people have their finger on the pulse of global supply chains the dhl. that is coming up. this is bloomberg. ♪

tom: welcome back, at times for terms of trade, our weekly deep dive into globalization, and earlier this week the 1.6 mile

long francis scott key bridge in baltimore collapsed in a matter of seconds, but the consequences of a container ship crashing into the bridge are said to last for weeks. another wrinkle to global trade exposing the fragile nature of some of these supply chains. i am joined by melanie kries, the cfo of dhl global, someone in the company with the finger very much on the pulse of global trade and supply chains. we will talk to about interest rates and when you get your views on what is happening in the red sea and in terms of how supply chains and trade over testing, but i want to start on the baltimore question and what you when the team are seeing in terms of the broader impacts. what is the data and what is your business telling you about

the impact? >> thank you for having me. the pictures of the crash are spectacular, and it is very sad that lives were lost in the incident. in terms of direct impact on trade, there are other containers on the ship that crossed the accident. we had some continues on the ship so we are working with the customers to see how we could recoup those containers. looking beyond the directly impacted ship there were no container ship stuck in the harbor in baltimore and incoming ships are being rerouted, so the biggest impact that is currently forcing -- are seen are on vessels that carry cars. one big ship is stuck in the harbor that will create a bottleneck and there was a tightness in capacity with those

specific vessels, so with regard to the container part it will probably be relatively limited in impact but it will have implications for the automotive sector. tom: how long do you expect us implications to last? is it possible to give a timeline? >> when you take a bigger picture at what is happening with supply chain disruptions, you already mentioned the red sea situation. over the last years we have seen profound shocks to supply chains. under covid, with the ship stuck in the suez canal, that always causes temporary pressure points to global supply chains, but we have seen global supply chains are much more resilient than some expect on the first glance. we are actively working with our

customers to find solutions, and you look at the red sea situation. when it happened at the end of last year, that of course cause delays, but now the shipping lines have adjusted schedules, workarounds have been found, and goods are flowing again, so a short term shock disruption is a stressful situation for the system, but i think overall the supply chains are so strong and connect did and reliant that workarounds can be found in a relatively short timeframe. tom: what does that mean for your outlook for freight rates? >> when there is a disruption and a supply demand balance is out of whack temporarily that can lead to short-term spikes in rates that some times lead to surcharges, but we will see over time that things normalize.

particularly with regard to the red sea situation i would not over exaggerated. there is a longer time around the cape for ships that is leading to extra costs and increasing rate rates, but i do not think this is the medium term fundamental game changer, so shocks create imbalances that lead to temporary price effect, but over times things tend to settle much faster than what people expect. tom: what is the broader global trade impulse looking like for you now? you say you are not seeing countries cutting off trade with their major trading partners. what is the trade impulse of this global economy now? >> that is a great question. i am always inclined to look for hard facts and data, and which is published mobile connectedness index for 2024, and then you look at the

connecged of the world. we are at the peak of global connectedness. 2023 is seen a bit of a step back, so i think it is wrong to say global connectedness is going backwards at a fast pace. of course, when you look at the details, an interesting relationship between u.s. and china, here we do see that the connectedness and trade flows have taken a step back, yet even that is still one of the most connected repairs globally. so things are changing, but it is not the fundamental end of globalization. tom: unfortunately we have run out of time, but really appreciate your insights. plenty more coming up. this is bloomberg. ♪

tom: good morning, this is "bloomberg daybreak: europe." i am tom mackenzie. the are the stories that shaped your agenda, treasuries drop as the fed's cris waller says the u.s. central bank should delay or slow the pace of interest rate cuts. >> in my view it is appropriate to reduce the overall number of rate cuts or push them further into the future in a response to the recent data. tom: s&p 500 gets a late day boost to finish at a record high . another record. we will take a closer look at our markets have fared so far this year as we head into the last major trading day of the quarter.

the yen cities with many traders i 152 per dollar as a possible trigger for officials to take action. let's check in on these markets after fresh records across european and u.s. stocks. european stocks, three straight days of gains and looking to add to that. 50 futures looking to build on that with gains of .3 of 1%. ftse futures getting a lift with upsetting commodities .4 of 1%. s&p futures taking a pause on hold ahead of the date of the come said that the u.s. and the speech from jay powell. nasdaq futures pointing lower. let's let cross asset, we saw a bit of a selloff across u.s. treasuries on the back of comments from chris waller. he wants more data before he is that confidence. he argues you can push out those cuts into the future. two year 460. the japanese yen continues to

gain our interest on the intervention to risks from japanese officials, 151.34. 152 seems to be the light of the sent. brent, it is six dollars per barrel, a bit of again after the softness on oil prices of .4 of 1%. gold up .10 of 1%. let's take a close look at 2024's first quarter. kriti gupta brings the context. the year has brought currency surprises. >> surprises but not surprises, it is an easy story when you look at the japanese yen, the swiss franc, the underperforming conference -- currencies that create the basis of the carry trade that creates complacency in this market. it is easy to grab yield and the fx space if you were going short the yen or swiss franc, and that is spend the theme in the first quarter despite the fact that we

got to be a day hike and had the era of negative rates complete end, and yet we are waiting for cuts to get priced into other g10 economies. that is not stopping this trade at all, and because the carry trade is so popular at the moment fx are at a real low and that puts a real emphasis on what the dollar does next and what u.s. assets to in the back of that. tom: your next answer will inform what i do with my pension, u.s. stocks, the dominance, does it continue? >> i am a journalist and not an investment advisor, but the idea is that it will. i am getting so excited about the american markets. that getting cemented because it is kind of an entrance or barrier of entry from international markets to get to the s&p 500. left to buy the dollar first. to get to treasuries you have to buy the dollar first. you do that if you have price cuts in or getting priced out of

the market as you have seen? the currency story arguably matters more despite the fact that so much of the upper performance has been driven by the ai story. it the concern is you were not seeing that breadth and that is the key debate. does the breadth matter we were seeing so much momentum? everybody wants to get in. the answer is may be, stay tuned. tom: we will discuss that more on markets today. the currency moves and whether or not u.s. dominance can continue across the stock space. kriti gupta, thank you very much. i am joined by the head of international who just came back from a trip to asia, so we will pivot there. you have been in mainland china, hong kong, vietnam, what is the mood? >> it be my sentiment.

the growth momentum happening in china, we see asset manager, wealth managers, onshore, long-term it investors and also met with the regulators and china to communicate or exchange our feedback of globally how we see china as a capital market. how they should say communicative to the market as a whole. there were very well received. tom: how honest can you be in that feedback? >> i was very honest. we had senior officials in a single meeting with three other people across the table. he represents a u.s. investor and i represent european investors. we tell them you want you to be communicative. we do not disagree with policies or regulations that could regulate the market better but we do not want surprises. tom: do they understand that for

some investors china has begun on investable? -- univestable? >> the first question was how can we help investors cerebral confidence? with that question they understand the situation. they really went to helping to provide a very pro market environment, pro-investor environment in china. tom: how does that inform your investment decisions? do you do it by mainland shares or vsm european proxies like the luxury space, autos? >> at this juncture with all of the policy announcements, regulation, and attractive chinese stocks are today, liquidity introduced by pboc in all of the chinese policymakers, all of those together, i would think that chinese stocks

present more surprise on the upside than together indirectly. there were plenty of place happening in china such as consumer, clean technology, ev's , hydrogen technology. all of the sectors of the key for us? tom: is this a follow the policy investment thesis for china? >> in some ways, i would say yes. policy will say accommodative to those sectors. they have made trillions and trillions and the system for those sectors to come and take the credit and expanding grow. tom: we are already seeing overcapacity. arguably a bigger issue as the months go on. how do you invest along the policy lines without getting burned by the overcapacity story we are starting to see? >> these companies in ev and clean did a very major step, which is internationalizing t

heir business. tom: and they are facing pushback. the u.s. has their own concerns. >> they continue to be accommodative trying to push things forward. netherlands, all of these companies are coming out of mainland to the business internationally. they will find a way to be more accommodative to local european laws or regulations to make sure that they can grab more market shares globally. tom: the real estate crisis, how is that shaping up? are they going to resolve it this year? >> ideally, a lot of the real estate developers should declare bankruptcy. they are already bankrupt. at the time given to those real estate developers was for them to build the sold but not finished projects. this will be the year that they have to complete where they have the time to complete those projects. it is very clear to local

investors that those companies are bankrupt. just let them be and let the paint get out of the system. real estate will not be the major driving force for china economics going forward. we do see the proof in place. reduced markets, restrictions removed for certain cities, priced four to start stabilizing, so i would say the real estate sector starts to see the bottoming. tom: how do you factor u.s. politics given the election in november? >> this is the biggest election year. npc, the chinese premier li set the target around 5%. that is very conservative. it factors in all of the challenges they face with the u.s. and uncertainties on geopolitical issues, so i think they are prepared. tom: they are prepared for the politics of the pressure point, more heat from d.c.

thank you very much. to some of the stories making news this thursday, and x provider ftse russell says portugal will be added to a key bond but had all -- held off on a decision on south korea and india. portugal joins from next november. south korea stays on the watchlist for inclusion on the ftse global bond while india remains under the watch to joined the global market equivalent. earnings at jefferies was on the strength in at a renewed activity in the investment banking business. the firm says revenue jumped 35% on improved debt and equity underwriting as concerns about inflation which is starting to stabilize. amazon investing in additional $2.75 billion in anthropic, completing a deal to back of the

ai started. they will use amazon's cloud services. anthropic was formed by former openai employees and offers a chat not -- bot named claude. stellantis plans to cut 8% of its workforce. it comes weeks after the ceo tried to diffuse a clash with the italian government. stellantis declined to comment on the exact number of staff changes. a new report says ozempic could to be produced profitably for less than five dollars a month. novo nordisk charges almost $1000 for treatment in the u.s. the study led by researchers at yale as caused --

germany said to partially legalize cannabis for personal use. we will discuss the opportunities in the commercial markets. oliver crook is on the ground for us. this is bloomberg. ♪

tom: europe's largest medical cannabis market germany is set to partially legalize cannabis for personal use from next week. guess what, oliver crook is at a reticle marijuana growing facility and joins us now. what a challenge for you covering this story. take us through what this law actually does and how that ties into this story? >> let me set

the scene because this may be a bit peculiar for the general bloomberg audience, but we are in a producer that can legally grow cannabis. only three companies can do it, the other two are canadian and most of the market is imported because the restricted laws with how much you can grow. by me is one of four grow rooms where they grow a literal ton of marijuana every year to provide the medical market. let's deal with the personal consumption parts of the low its comes into effect on monday. starting monday you can have 25 grams for personal use and grow three plants at home and have 50 grams i don't but starting soon you have cannabis club starting where you can have community members going for that club. the longer-term prize is the commercial use, the commercial selling directly to the public, and they are going to run some pilot programs at the end of the year governed by different municipality.

for the medical sector they have a cap of growing one ton of cannabis. that cap is removed so they will try to double their output for what they sell because this is where they make the margin, not the stuff that they import. tom: how big is the market if they are looking to double the output? how large is this european market? >> listen, it is hard to get precise figures, but to put it into context we are talking about one ton grown here annually. the estimates for black-market consumption is closer to 400 or 4.500 tons. people are actually comparing germany with some of the states in the united states where they have legalize. a german was talking about germany being worth $10 billion in the coming years commercially, but when you look at the european market and if they were to get legalization across europe and overlaid what happened in colorado, they are

talking potentially about a quarter trillion dollar commercial market. that hinges on legalization happening elsewhere where there are steps going in that direction that has gone quite as far as germany. what is interesting for germany is how it could affect the german budget. at has huge tax imprecations as well as savings from the correction facilities, and we had a professor and economist that looked into this and actually broke this down to the euro figure that full and commercial legalization could add almost 5 billion euros to the german budget, which is very much in the bloomberg wheelhouse. tom: you are keeping it firmly in the bloomberg wheelhouse despite the temptation to take it other places. when it could mean for the cannabis market on the ground, continuing to cover this story over the next couple of hours. thank you very much.

time for our big take of the day, the world's biggest banks are quietly hanging onto carbon intensive clients because of what they see as unrealistic demand for regulators and civil society and the threat to their fees. part of me -- joining me is alastair marshall. how much real progress has been made? >> in the real world emissions have gone up into banks continue to lend to fossil fuel clients. it has not been a successful project so far, to be fair it is complicated. it is a multi-decade, multitrillion and requires fundamental shifts to various sectors of the economy, so perhaps expectations were too high in the first place by the banks could do a lot more. tom: talk to us about expectations, and how high those were in the pushback we have been hearing from some bankers and have a could be reset to be more realistic as we aim for

these targets? >> cop 26 was the big coming out party four's climate consciousness, and where there was a big wall of money ready to finance the energy transition, but it turns out that 132 trill ion dollars is profit-seeking money so we will only finance the transition if there is money to be made to do so in a lot of that money was stuck in dirty industry, so to expect that banks would turn a blind eye to fiduciary duty and the general way they operate was naive, and there was some sort of over projection on how much leverage banks actually have two push their dirty clients. they do have clearly as the allocators of capital, they do have levers to pull in big lobbying wings in westminster in d.c. to push more conducive

policies, but there is been more of a realization that it banks in the private sector cannot do this on their own. there is more than governments need to do. most of the money for the transition will need to come from the private sector. there is a bit of a disconnect. tom: the frustration has boiled up and some of the color woven into this great peace comes from a banker at ubs. >> there was a banker who is their point man for all things sustainable finance regulation, and that a meeting in tokyo at the financial stability board, so they had representatives from the fed and ecb he let loose a little bit and said, your expectations of us are totally out of whack. not that banks should not be participating in helping the economy to transition. he took objection to a recent ecb paper that said that 90% of banks are misaligned with the 1.5 degrees target of paris.

he said of course we are misaligned. the real economy is on track for three degrees. how are we who will finance the economy be aligned with 1.5. there is a disconnect between the commercial imperative in structures of the bank that are clashing at this point, and i came to a head at the tokyo meeting. tom: great piece of reporting inconsequential in terms of how we get to these targets if we ever do. alastair marsh on the bloomberg dictate today. there is plenty more coming up. stay with us. this is bloomberg. ♪

>> our medium-term forecast is for the yen to strengthen somewhat. over the next year or so we think it should head back toward 140 primarily driven by the

force of the fed easing further down the road and somewhat tighter japan policy, so we think that the medium-term picture looks like a stronger yen. tom: that was christopher walken cox -- christopher wilcox speaking to bloomberg early. a weaker yen has benefited japanese stocks given the impulse around exports for japan , and japan's markets year to date over this quarter has been the clear outperformer, that is the white line, the nikkei and gains of around 20%. the s&p adding 10%. the laggards of the csi 300 and also the ftse 100 has not performed particularly well either. the question is whether that expansion in terms of the upside

for japanese stocks can continue if we are in a more positive rate environment in japan. goldman sachs talking to us yesterday said to boj will move gradually and they do not think any modest moves higher in the yen is going to the rialto stock story for japan. they are talking about governments, earnings strength, so that is the view from goldman sachs. let's have a look cross asset at how the performance has shaped up in the first quarter, because the underperformance of the bond markets in the last 24 hours, we have seen that on the back of comments coming through from chris waller, but to gains coming through for the equity component. the bloomberg dollar index and on the downside markets as well. commodities performing relatively well, but in terms of cross asset clear outperformance of equities. let's have a look at what is happening in the cocoa story,

because that is been one of tech headlines that is driven interest this week with cocoa at one point crossing through $10,000. this is the equivalent in terms of what you buy for the equivalent of one ton of cocoa. the crop situation in west africa is a challenge pushing up prices. 4.4 ounces of gold for one ton of cocoa. 22 tons of soy. three months of rent in new york on the back of that. just in terms of the context for the upside what you can buy. complications may be for your chocolate buy. we will be speaking to the ceo of the lloyd's in london and what is happening in terms of baltimore will be a key question and the ceo of whiz air. this is bloomberg. ♪