tom: good morning. this is "bloomberg daybreak europe," i'm tom mackenzie in london. stocks and futures trade higher as iran and israel refrain from further escalation.

investors look ahead to earnings from the magnificent seven and from europe's banks. u.s. aid passes the house. volodymyr zelenskyy says billions in new funding could help kyiv retake the initiative against russian forces. plus, tesla slashes prices once again amid a drop in sales and its stock price as the headaches pile up for elon musk. eyes turn to the crucial earnings report tomorrow. let's check on markets then. unwinding some of those risk off safe haven moves. a little more optimism percolating through markets, and there is a look ahead to the earnings season. 40% of the s&p coming through with earnings this week. the mag seven about half of those companies, starting with tesla on tuesday. then you have data out of the u.s., growth data and the feds preferred inflation gauge which

comes out on friday, will we be hearing from head officials around the need for higher for longer around the interest-rate environment? futures in europe pointing to gains of 0.3%. looking at s&p futures up 0.3%. nasdaq futures pointing higher by 0.5%, the context is the nasdaq 100 drops 2% friday, nvidia fell 10% by the end of the close. the nasdaq 100 dropping the most, the worst week it has had since november of 2022. let's reflect and see how the unwind around safe haven moves -- for example, gold is softer today. the u.s. two-year crossing back about 5%. it is a big week for the auctions. we will see the appetite for the twos, fives and sevens as debt is auctioned off in the u.s., and the test for whether yields are looking peaky.

euro-dollar at 1.06, little bit of softness for the dollar. gold unwinding the move into the restatement, down almost a full percentage point at 2369. print softer in the session, down 0.8%. we will unpack that story with amrita sen in next 10 minutes. let's cross over to asia where avril hong is standing by in singapore for a deep dive on these markets. what's standing out to you? avril: we are seeing that similar play over in the asia-pacific, where there is an unwinding of the safe haven bets , but that relief rally among stocks is underway. that being said, it was more pronounced from early in the session. the nikkei now paring earlier against. the csi 300 has flipped into negative territory. the hang seng though none of the sand outperformance today, as chinese authorities have

unveiled measures to boost the standing of hong kong is a financial hub. this includes adding reits. that being said, on the taiex we're seeing negative sentiment coming through, no thanks to the nvidia tumble last weekend. among the aipac semiconductor related stocks, those are the ones driving the region's benchmark lower today. it is crucial for a week where we are seeing big tech earnings coming up, along with u.s. data. i'll get to that but let's flip the board because it is not just that, that we're watching. at the end of the week, we're going to see the boj potentially holds rates, after the historic hike last month. i'll get to what we're seeing on the bonds potentially. let's look at this chart which shows you just how the ai theme might be unwinding. tsmc, this stock has lost more

than $100 billion of market value, in the span of about a week. this is a chart that shows you the volume of put options. at the end of last week, it's bite to the highest level since january. our colleague in the newsroom pointed out this is a sign of how options traders are dealing with this bearish wave of tsmc. let's look at japan. bonds if we can. it is about the boj at the end of the week, and how the japanese currency is weaker to an extent, that it could shift the inflation outlook for the country. this could mean the boj potentially announces the start of quantitative tightening. this could be from the cutting of bond purchases. this could put further upward pressure on japanese bonds. tom: avril hong in singapore with a break down, thank you indeed.

now to domestic politics of the u.s. and how that filtered internationally. the u.s. senate expected to pass $95 billion in fresh aid for ukraine, israel and taiwan this week after the end of six months of political deadlock in the house. >> this aid will strengthen ukraine. we did lose the initiative there. now we have the chance to stabilize the situation and overtake the initiative. tom: let's bring in bloomberg anchor kriti gupta. it seems like a done deal. it has to get to the president's desk. the senate is likely to approve it this week. what is in the package then? kriti: a lot for ukraine, $61 billion in aid, but it is israel and gaza as well. more defense replenishment for the israeli forces against iran specifically.

as is about $9 billion of aid for gaza. the wording is important because democrats pushed for this. in terms of the makeup of this bill, this is a bipartisan bill that was getting pressure from the far right. speaker johnson potentially in the crosshairs but able to pass this through. there is also money towards taiwan and other indo-pacific allies, some of it going toward summary infrastructure and development there. we are getting into the nitty-gritty but the reason this matters is the pacific command, the u.s. naval forces basically, are historically underfunded. it is the least funded part of the entire defense budget for the united states. that's why the summit we saw with the japan and the philippines is important because that is having the united states have that footprint in a way they can't manage on their own. tom: we will watch for chinese reaction for that funding for taiwan. to ukraine. the impact, what is it likely to be in terms of the military

resilience for ukraine? kriti: the key pieces are $14 billion of replenishment. we are talking about air warfare, drones, etc. and about $13 billion of actual stockpiles rearmament, actual weapons going to fighters on the ground. about 7 million for u.s. operations, that includes whatever u.s. intelligence forces at, etc. that's where that funding goes as well as $9.5 billion in forgivable loans. this is important, it was first brought up by president trump and now reimposed by president biden, if indeed he is elected to a second term, it is forgivable, and he intends to clear the debt for ukraine. this is also a turning point for the frontline. the last couple of weeks before this was passed, the expectation was that russia was making more advancements than expected. letterman zelenskyy over the weekend saying this will change the game in terms of getting that age to the front lines and pushing back on that russian

offensive. tom: kriti bucha around the details on the funding package coming through the u.s., and the affected impact on the ground in ukraine. the focus this week shifting to company earnings. we will shift away from geopolitics. some of the biggest names in global tech set to report. the so-called negatives and seven -- magnificent seven numbers arrive at a crucial time as investors look for an ai powered rebound in stocks. the fed's preferred inflation gauge also coming out this week. for more, let's bring in mliv strategist mark cranfield. how are cross asset risks lining up this week, when we think about the earnings, the expectation around that ai catalyst in a week where we keep the finger on the gauge of inflation? >> it's huge, you can't underestimate this week at all, especially as the nasdaq 100 is down about 8% from the highs in march.

for a lot of relative value people, they would see that as a good entry point to get back into what has been a strong bull market the past couple of years. providing that the earnings gap in on at least as good expectations, hopefully even better, so you can imagine if we get a set of earnings which are inconclusive, or even slightly below par, things could look very shaky. because those people who have been holding on, even though the market is down 8%, may decide to give up, especially as nvidia has got about another month until they report. we heard earlier, they had a bad finish to last week, dropping 10% in one day. the market clearly is nervous. expectations are very high. we need a smooth week and there is so many people reporting here, it wouldn't be too much for somebody to make a mistake along the way. really investors are on tenterhooks and as you

mentioned, it's a massive week for treasury refunding as well write we've got two-year yield sitting at 5%, but it could go higher during the week. tom: nervousness i am the yield action links to what is happening with inflation. pce data toward the event of the week, the affected number at 2.6% is the forecast. tying into expectations of stronger dollar. when we link all of that to the euro zone, is the euro the weak currency on this front when it comes to dollar strength? we hear increasingly dovish commentary from ecb officials. >> that is certainly what traders are thinking. they are mapping out the future rate cut expectations between ecb, bank of england and the fed. in the background, the bank of japan as well. at the moment, most traders think the ecb will be more rate cuts this year than either the fed or the bank of england.

which obviously puts the euro on the defensive. of course, so far nobody has moved apart from the bank of japan, but it's going to be hard for the european central bank to walk back expectations of june and we have hard christine lagarde -- heard christine lagarde suggest that is one the first interest-rate will be coming. we have heard more central bankers agreeing with her, mr. villeroy over the weekend saying that oil prices will not get in the way of the ecb lowering rates as well. it would need a lot for people to think that the ecb will not happen in june. but who comes next and how much of a time cap is there between them and a cut from the bank of england or the reserve? that's what traders are trying to gauge. for now, they are giving benefit of the doubt that the ecb won't be too far ahead of the others, but if we see that gap get wider, if the fed goes to the fourth quarter, it could be vulnerable for the euro.

it would be the currency most at risk within the g10 group. tom: mliv strategist mark cranfield bringing analysis on a major we for these markets, and of the implications for the euro as we look ahead to that inflation print out of the u.s. the week ahead, earnings front and center, as mark was outlining, u.s. and european earnings. against, 40% of the s&p reporting, about half of the magnificent seven. the likes of the lloyds banking group and heineken, which has led global footprint. deutsche bank, barclays, big week for european letter endures -- lenders. and remy cointreau, the french luxury drinks maker. we will be thinking about european pmi's. building out the picture as we hear from the likes of germany's olaf scholz and the imf suggesting that germany's economy is looking sounder.

of course, from a low base, whether the pmi's build out that picture, that detail coming out on tuesday. as the u.s. house new sanctions on iran's oil sector, we look at the impact on the market for crude. amrita sen from energy aspects joins us next for the analysis. this is bloomberg. ♪

tom: israel's prime minister benjamin netanyahu condemned a reported plan to sanction an ultra orthodox army unit over alleged human rights abuses in the west bank. the biden administration is planning to announce the measures within days, blacklisting the battalion would really -- prohibited from receiving u.s. military equipment or training. the u.s. house passed new sanctions on iran's oil sector

as part of a foreign aid package. the legislation broadens measures to include foreign ports, vessels and refineries that knowingly process worship iranian crude in violation of existing u.s. sanctions. was bring in the founder and director of research at energy aspect. a pleasure to have you in the studio this monday. let's start with this iranian oil sanctions story. does it take material iranian barrels out of the market? amrita: i think in theory it could have an impact. what i am concerned about is the only country that buys iranian oil is china. the only refineries within china, mostly they buy armenian oil, what we would call that teapots, the independent refiners that are not in the u.s. financial system. they don't use u.s. dollars, so it is not that easy or the u.s. to enforce anything on them. they can continue to buy it and they will. maybe we can get a little bit off.

you could potentially get two to 500,000 lower, but about a million will still flow into china. tom: two to 5000 lower, but given the scope of the chinese buying demand, that continues. there has been suggestion that up until recent events, the enforcement of existing sanctions had been relaxed. the biden administration denied that's what's been happening. as that started to reverse, the impact of the lack of enforcement of sanctions? amrita: the lack of enforcement is why iranian exports last year went up by 600,000 barrels a day. it was consistently sub-a million and and now it has gone up that much. the biden administration unofficially denies it but the numbers speak for itself. so far, we have not seen stricter enforcement. it has been more talk let's see with the new focus on what's going on with israel and iran, whether the u.s. enforces it.

what i want to highlight is that this is a u.s. election year. let's not kid ourselves. i think all sanctions are sanctions on paper, with anything that remotely causes oil prices to go up, i don't believe they will enforce it strongly. tom: what is the geopolitical risk premium priced into oil? amrita: not much. we have had a correction. the market has been inspecting potential escalation, we haven't seen it. it has been calibrated. that's why prices have been coming off a little bit. we are not expect an massive downside, but we expect small downside. physically, this is the weakest period for oil anyways. we are bullish for summer but right now things will probably calm down. tom: what underpins that bullish view when it comes to the summer? is it the demand story, supply? amrita: first quarter we did not build inventories which is huge. usually rebuild stocks, q1 was a counter seasonal draw.

we are building now which is what it should be april and may. june onwards we get the decline in stocks. we are calling for 2 million barrels a day of vendor for drawdown in q3. tom: is there evidence, is the discipline there within opec+? are they holding the line on these cuts? amrita: opec-plus as a whole, yes, there will be a few countries -- there is always a few culprits where compliance slips from time to time but saudi arabia is very much leading from the front. it tries to always get the group together in terms of cohesion. overall opec compliance remains high and definitely people have been talking about 50%, it is well above that. tom: at what level does the strong dollar start to crude demand -- crimp demand? amrita: it's not just strong dollar, if you look at the overall backup for risk assets

with what treasury yields are doing, that's why oil prices probably soften in the near-term. it is not necessarily all green and going for oil. right now the dollar is okay versus where oil demand should be, but if the dollar continues to rise through this year, a lot of emerging markets feels the pressure. tom: how well supplied is china if we put it into the e.m. category? amrita: i'm actually heading out there tonight. i will probably have more for you when i get back. for me most interesting thing on china has been, they have been buying a lot for their strategic reserves. just like the u.s. is depleting their reserves, china has been buying it. at $90 oil, they paused, the question is does that come back? underlying user demand is pretty solid, especially for gasoline and people are traveling around. the weaknesses in diesel.

the economy still isn't doing great, so it is a different composition. we see much more driving and flying but not really a manufacturing china, which is what we are used to. tom: near-term softness and bullishness when it comes to the summer. 80.63 on brent now, give us your forecast by year end. amrita: we call for $85 brent average. this is different from the camp of upper 90's by summer. we are still holding that view because it goes back to we tend to talk about geopolitics from the bullish side, but with the u.s. election, they will try to tamp down the bullishness. if you get an outage because of geopolitics, we will go much higher. tom: amrita sen, thank you for carving some time out of your busy schedule, to give analysis on these oil markets. founder and director of research at energy aspects.

donna's -- ghana's bonds jump as the financial minister expect a draft agreement from creditors by may. story next. this is bloomberg. ♪

tom: happy monday. let's get an update on ghana's debt situation. the finance minister expects a draft agreement with creditors next month following the agreement reached in january. let's get more with jennifer zabasajja in johannesburg. what is the latest on ghana's debt restructure? >> this is significant. especially that we are hearing from ghana's finance minister that this draft mou potentially will happen in may. this is the next step for ghana

in their talks in restructuring their debt. this is been ongoing talks. they have hit a snag over the past few months. the fact that he sees this draft mou coming with some of ghana's biggest creditors including china and france, is significant. what happens next is where these talks go. they are in the $3 billion program with the imf and they had hit a snag because there were disagreements over what these haircuts would be between the country, and also, the investors. the question is what are the haircuts going to look like? are they going to live up to what the imf is improving? and will this unlock this next tranche of funds for ghana. more broadly within the region, the imf did paint a rosy picture, which is good considering the past three years. we heard from the imf africa director who talked about his

expectation that there are going to be bright spots -- excuse me bright spots going forward for the region. especially if we think about the risks that are in play, including stronger dollar, and of course, we're seeing a lot of geopolitical risk. he still believes that long-term this could be good. they said the economic outlook for the region should nudge up to 3.8% this year, and 4% in 2025. the one criticism we did hear from the imf is specifically about nigeria, which is a big player in this region. >> when a country like nigeria, africa's most populous country with all of those development spending needs, we think it is problematic that relative gdp is only 9%. >> that was a bit of what he was talking about with nigeria. on the long-term, he believes that because this region is so

rich in critical minerals. critical minerals that are important for the green transition globally. he still sees things brightening up for the region. hopefully good news there. tom: jen zabasajja with the latest in terms of ghana and its debt restructuring plans. tesla slashing prices amid slumping sales. a tough time for elon musk. we bring you the details. this is bloomberg. ♪ life's daily battles are not meant to be fought alone. - we're not powerless. so long as we don't lose sight of what's important. don't be afraid to seize that moment to talk to your friends. - cloud, you okay? because checking in on a friend can create a safe space. - the first step on our new journey. you coming? reach out to a friend about their mental health. seize the awkward. it's totally worth it.

>> good morning. this is bloomberg daybreak: europe. i am tom mackenzie in london and these are the stories that set your agenda. they refrain from further escalation for now.

investors look ahead to earnings from the magnificent seven and from europe's banks. ukraine's president, volodymyr zelenskyy says billions of dollars in new funding code help kyiv retake the initiative against russian forces. tesla/is prices -- tesla slashes prices. eyes turn to the crucial earnings report. it is a big week in terms of the earnings story with u.s. tax. tesla reporting on tuesday but also european banks in focus for us today as well and we check in on the markets when there is a bit of relief. with the outside coming through for equities and a little bit of downside for those haven assets, the likes of gold, oil, and the u.s. dollar. futures pointing higher. the ftse 100 up in the session.

we look at the energy story as well given that oil has come off a little to see how that feeds through in to the ftse 100. s&p futures above the 5000 level. nasdaq futures pointing higher by .5% after the worst week for the nasdaq 100 since november of 2022. looking to repair some of those losses at least gazed on the futures. let's focus on the treasury space. a big week in terms of options. the two-year above 5%. softness coming through for the bloomberg dollar or at least dropping .9%. and rita saying she -- let's

turn to the invocations of this will. when it could mean for tiktok. that bill forcing the chinese owner, potentially bytedance, to the best its ownership. the legislation was included in that package and passed by the house over the weekend and the package is excited to be signed off by the senate and then of course given the green light by the u.s. president. a tiktok component in focus. rebecca, tiktok spent years lobbying in the u.s. and it seems that that has not really worked out at least so far. the concerns about it being a national security risk remain. efforts have failed, it seems. that is a place that we have now arrived at. they have tried to roll out

curbs on tiktok to tackle that perceived national security risk including by president trump, of course. it seems like this framework, this divest or ban framework was enough. they took it through. and we have very much moved through the phase of discussions around what the u.s. can do, what it should do with tiktok to a process of legislation and ultimately very likely litigation because tiktok is self that it is going to exhaust all possible channels, all possible legal channels to push back against this. >> rebecca come out what has been, if the -- rebecca, what can we expect chinese authorities, their response, to be to this piece of legislation? rebecca: beijing so far has been quite robust in its rhetoric and pushing back against this.

it has previously accused of the u.s. of bullying china. but it is important to set this broader context that beijing by and large, for example, the plan by bite into potentially raise tariffs, triple tariffs on steel -- biden to potentially raise tariffs on steel, e.u. probes into unfair practices and subsidies, beijing has been mutated and it is in part because ultimately, bigger picture, china is relying on demand from the u.s. and that demand and boost in support for its exports to try and help with growth. i look front of house, we, behind-the-scenes, we know that the chinese embassy has tried to send its staff to set up a meeting with congressional members of congress and trying to lobby from that side and it does seem come as we said, those

efforts are failing so far but yes, i think in terms of a beijing response, i don't think we are going to see too much fire here. >> ok. rebecca on the potential chinese response to that piece of legislation that could see of course a divestment of tiktok from its parent company, bytedance. thank you very much, indeed. to the fortunes of elon musk and tesla, it has been a tough couple of weeks. elon musk blaming crushing issues at tesla which spent the weekend cutting prices for its cars and its driver assistance software. this ahead of earnings you out tomorrow that are expected -- due out tomorrow. a vehicle concept called the robotaxi. for more on today's big take, let's bring in our editor, peter. what is going on at tesla?

peter: it is a fascinating question, tom. it has been a wild week at tesla even by elon musk's standards. it started with the job cuts that we saw and that was sent out in a late night email to tesla's global workforce, telling them that 10% of the workforce was going to be cut. we have bad reporting that people were turning up at work for their shift the next day and they did not know whether they had a job or not. in the week we saw -- in the following weeks, we saw the seemingly strategic pivot towards the robotaxi, tense by tesla's board to revive that 56 billion dollars pay package for elon that was struck out by a court in january. friday was a recall of the cyber truck for the accelerator pedal issue, and then the news did not stop on the weekend. we had price cuts in the u.s., in china, in europe, the cuts to full self-driving, and that last-minute postponement of his

planned trip to india this week so it puts a spotlight on the earnings call on tuesday. we know the earnings are probably going to be disappointing given the slump that we saw in the first quarter sales, but i think what analysts and investors are really looking for now is some clarity on the strategy of elon musk and tesla going forward. tom: this is unpacked in today's big take which is worth a repeat. when it comes to the debate internally within tesla about whether or not to go for the cheapest potential model, a true mass-market tesla, 25 thousand dollars or so, or the fully autonomous option that he seems to be pushing, talk to us about the debate, the nature of that debate and what it tells us about the tensions within tesla and its future. peter: very interesting. three months ago on the previous earnings call, mosque was really talking up progress they had made on this $25,000 car, the

so-called model two and that is really seen by investors and analysts as needed measure by tesla to fill that sales gap that they have got and start to compete at the lower end of the market where we are seeing companies like byd really coming out with a whole range of decent ev's at those lower price points where tesla just can't compete, but now, and you know, he has commented during the week that tesla was going to go balls to the wall with an autonomous vehicle in a robotaxi. it is a big pivot. nobody has really nailed autonomous driving yet. even tesla, the markets first -- for self-driving, it still needs constant supervision by a driver and there does seem to be tension within the company over whether swinging away from the model two mass-market car towards the autonomous robotaxi is the right way to go. tom: ok.

global business editor peter, really fascinating in terms of the travails of tesla. we look ahead to that important earnings story as well. the details coming through on tuesday and peter setting us up before that with the big take worth reading, certainly worth your time. to the european earnings space where europe's biggest banks are picking up the baton this week after mixed results from wall street. according to bloomberg's intelligence, with sector stocks trading near a six-year high, the outlook for lenders may be right for a reset if the earnings disappoint. we continue to weigh up about a potential cut. what that could mean for net interest margins as well. let's bring in chloe for the details on this. what are the main themes to look out for when it comes to the banking sector? chloe: as with the last couple of quarters and probably with the next few, the main theme is really the slowdown in interest and even despite the fact that there's been the expectation for

rate cuts which have been scaled back a little bit. it's going to be quite sluggish for most if not all lenders reporting this week so that is kind of across-the-board and if we look at specific banks for companies like deutsche bank, bmp, and barclays, the performance of the investment bank is also going to be quite important in any kind of indication that the activities picking up a little bit going to be welcome. tom: more ipo's in the pipeline, more fundraising going on, so all of that as well. in terms of the broader outlook for the banking space in 2024, what kind of potential headwinds or tailwinds for the sector that you and the analysts will be looking at? chloe: looking at this is the idea of cost controls. difference between revenue growth and cost growth and that is likely to turn negative for quite a lot of banks. that is going to be in focus. it's about 15 out of 25 big european banks are likely to slip into negatives this year

compared to three in 2023. there's also this idea of rising loan loss provisions that will not necessarily be seen in the first quarter but the gradual increase will come through 2024. there's also as you mentioned the beginning of the conversation, the stocks are trading near six years highs -- six year highs. tom: thank you very much indeed, setting us up for a big week for european bank earnings and what to watch for. coming up, the greenback is back. going more to 4% year-to-date. a little bit of softness coming through the session today but of course the upside has been pronounced. we discussed the dollar's dominance, next, the ripple effects, and whether it is expected to continue. this is bloomberg. ♪

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>> welcome back. most fx majors this morning. the greenback has been on something of a tear, up about 4% in that timeframe, fueled by rising geopolitical risks and shifting views of course on u.s. interest rates and those views really came into focus last week with the rhetoric coming through from the fed official. what we heard from jay powell, higher for longer seems to be the new mantra. being weighed up by these fx markets. let's bring in an fx analyst at commerce bank. i want to start with the topline view on the dollar. we heard them saying there was no option at this point but to buy the greenback. do you agree with that view? >> i totally agree with that. it's hard to find any reasons to bet against the dollar. we have seen over the last few weeks after the inflation -- and

on top of that, we have a hawkish fed so it's hard to imagine any reasons. >> how vulnerable is the euro within that context? further upside for the greenback and we have heard from ecb officials reiterating that they expect to go to the first cut in june. does that leave the euro vulnerable and how does that percolate through the exchange? >> the u.s. is one of the most vulnerable right now because we have a very dovish ecb which actually wants to cut back to back right now so they are talking about a few more rate cuts this year. on top of that, we have a disinflationary contest which is making formal progress in the west. a very weak real economy. >> what is the level you are targeting? is that going too far? >> the parity is going a bit too

far. it's already weak against the dollar. we are targeting levels around 1.34. a bit above parity but very close. >> currently at 106 so more softness is expected from you. what other major currencies are vulnerable to the wrecking ball of the u.s. dollar at this point? >> we have a central bank which is very dovish right now. they did not deliver it in the end. they are also very vulnerable right now. real economy is also suffering over there so they will probably start cutting in may already. also not a good sign right now. >> what about the japanese yen? we had the boj and the meeting is expected on friday. it is expected to be a live meeting but the estimates are that they are not going to go again. we will see how that transpires

of course. intervention watch is in focus when it comes to the japanese yen. is there a support level for the yen that you are looking at? what are we looking at in terms of further softness for that potential move? >> expecting 160 towards the end of the year so further yen weakness and then because right now we can't imagine bank of japan hiking even more, the inflation is very low and we see no reason to hike in the end. >> is that assuming that they intervene, is that assuming that intervention doesn't work? >> they could intervene. they do not have the firepower to keep the yen stable. >> targeting 160 on japanese yen , intervention is not going to cut it for that. we turn our focus to the u.k. and the pound in light of that dollar strength. there is concern about the inflationary impact in the u.k. given our need to import. when it comes to your view on sterling, how is that shaping up? >> we see the pound in between.

we have higher inflation and a more hawkish central bank but the real economy is not very good so right now, probably the bank of england wants to cut sooner rather than later but it's not possible right now. and that's why we expect them to cut later but before the fed and this is why we position in between them. tom: we have an mliv survey where we gauge the views of various strategists when in the market and the question for this week is which will move rates by more? the fed or the boj? where do you land on that question? >> probably the bank of england but not by much. tom: you actually think the boe is going to move rates more? ok, within that context. in terms of the sequencing, how are you thinking about the sequencing of cuts? you buy into the view that the ecb goes in june. where does the fed land? where does the boe land?

>> the bank of england -- in august the first time. inflation makes more progress. >> not until december for the fed in terms of the first cut coming through that. in the commodity currencies base, we have obviously looked at the run-up in oil in the last couple of weeks. it has come off given the lack of geopolitical catalyst over the weekend. in the commodity currencies base, how were you thinking about the role that china may play if there is an inflationary move there? >> that is a good question. we have seen some good growth rates from china recently which is probably the advantage for currencies for the dollar and currencies that are largely in relationship with the chinese economy. farther than that, i would not expect much right now. >> thank you very much indeed for bringing the analysis in the

fx space with dollar strength in focus for us today. the ripple across the fx space. michael at commerce bank, thank you. now for some of the other stories making news this monday, bloomberg learning that bnp paribas has hired close to 30 people to launch a new securities operation in china after receiving regulatory approval. the french bank will build out its brokerage and asset management units. this comes as a lender ops out of investment banking amid a deal slump. the u.s., secretary said huawei's latest -- shows that china remains behind on cutting edge chip technology. huawei unveiled a smartphone powered by a homegrown ship last august. in an interview with cbs, they download the company's claims of a breakthrough, vowing to take the strongest possible action to protect u.s. national security. u.k. prime minister rishi sunak is pushing to pass a law declaring rwanda a safe country for the deportation of

asylum-seekers. the bill in the house of commons today seeks to circumvent a supreme court ruling from last year. this comes as he makes a 48 hour europe trip to defend his record on defense and regain his momentum 10 days ahead of a key set of local elections. olaf scholz says he is optimistic on his country's economic prospects. speaking at a major trade fair in hanover, he highlighted record employment and slowing inflation thanks to falling energy costs. potential economic turnaround so far has not helped the electoral prospects of his social democratic party. there is plenty more coming up. stay with us. this is bloomberg. ♪

>> we are hearing it is all big

tech. that is what some of the headlines are this quarter, big tech. >> mega cap check companies that are generating extraordinary amounts of cash flow, they are still actually doing very well. >> we still would expect this quarter in particular, for many of those companies, to lead on earnings growth. >> it is going to start broadening out. >> you cannot have tech be the only thing that does well if you are starting to see economic weakness in other places. >> we are ramping up earnings season and that will be a good distraction for the market to be able to sort of have a look at what is actually going on, to see whether the lofty valuations are actually supported by the fundamentals. >> tv guests on u.s. tech earnings, a major week for those earnings with half of the magnificent seven. the so-called magnificent seven. questionable whether tesla deserves to be within that bracket. tests earnings coming out on tuesday so maybe they can push

back on that view. here is the broader picture in terms of the views, at least the guidance, the outlook when it comes to earnings per share. eps for these companies. the s&p and quarterly, you are still seeing gains in the quarter in the stocks even though you have seen that downside pressure. pc the pressure year today in terms of the stock performance and the earnings outlook has actually been revised higher. 3.7% is that blended forward earnings per share view in terms of the s&p. within that, tech is playing and doing the heavy lifting. let's flip the board and see how things are shaping up in terms of the rsi, the relative strength indicators coming through. that momentum of course has faded. men -- the momentum has faded and we have seen its worst we can over a year last week. the rsi is closing in on overbought territory. devils last seen in october of last year, which did mark the bottom at that point and then you saw a turnaround. are we in a slim mother -- you

nays similar position question market is close to oversold territory -- similar position? will it propel things higher? that is the key question for us this week, whether or not these companies are able to implement the structural level -- at the structural level, some of these ai gains. don't miss our exclusive interview at 9:30 a.m. on the pulse. markets today. stay with us. this is bloomberg. ♪

ai.

♪ >> good morning, this is bloomberg markets. an hour until cash trading. let's start with u.s. futures and european futures, equity futures are higher. investors fake a