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>> good morning, this is daybreak europe. i am francine in london. hopes for a soft landing after switzerland fires the starting gun on rate cuts. double trouble for apple. the iphone maker loses value. will european regulators prepare a probe? investors on the pitch. cross assets, this relentless rally comes from optimism that

the fed will engineer a soft landing and bolster corporate earnings. risk-taking drove the s&p to its 20th record and euro stoxx 50 futures are down. nasdaq unchanged. this u.s. data ported the way forward an argument that the fed may backtrack one day after they indicated re-cuts this year. what does this mean for the dollar and what are the biggest stories? how the dollar has been behaving since the start of the year is a big story. it is almost like a marathon, u.s. two-year yield is up.

you can see 1244 and little change in the yen. trading around 151 or 152. further increases this year and you can see one of the biggest stories. let's see how asian markets are faring with avril. avril: interesting picture in the asian pacific. risk abounding. pulling back from a two-year high, chinese stocks are leading declines. it's not just the central bank, it is geopolitics, smic may have broken american law.

traders brace for earnings from the biggest developers. country garden reporting missing estimates not a lot of appetite. chinese tech leading declines. both negative and paring declines. as you say it is about chinese renminbi. pboc spooked investors. it set the yen above 710. the signal is allowing the currency to weaken and traders were not position for this, so we saw the yen weakened against the greenback and the onshore breached 720.

there is a bright spot from the topics as the japanese currency is cheap. we had data supporting the currency with the inflation picture accelerating. francine: the trillion dollar question, thank you so much. from zurich to tokyo, it has been a big week for central banks. switzerland was a big surprise with focus on the bed expectation for three cuts. let's bring in dan. so much excitement about the cut, banks predicted it, but are there broad lessons? dan: francine, the astonishment is justified. in that sense, they have been

the real outlier in a heavy week. a couple of things are unique to switzerland. this is a central bank which has pegged its currency, went into negative interest rates, even when they began hiking, rates were low relative to other developed economies. excitement, but an aberration, not for the bulk of direction has been. francine: bank of japan, three days ago this was a big deal. yield curve control has been described as the story. dan: they have eradicated the legacy like the guy never existed. goodbye.

monetary policy remains accommodative by most yard sticks, but we went from -0.1 on the main rate to around zero and they have formerly -- formally abandoned efforts, but they are not out of the market. the path forward i think if i was ueda, i would say i dismantled the previous stuff, now we have got clear sailing ahead of us. can't that just be victory? why do we have to talk about the next hike? francine: this goes to your column saying don't expect this to be the start of the cycle.

more than a hundred $10 billion has been wiped off the value of apple. merrick garland said the iphone maker dominated the market by stifling inflation. >> apple strategy is exclusionary and hurts consumers and developers. for consumers, that means higher prices, lower quality phones and less innovation from competitors. francine: apple will defend against the lawsuit, describing it as wrong on the facts. with us is alex webb. what are they accused of? >> five things. preventing operations on the

platform. apps where you can download services. it blocks gaming offerings so if you are accessing a cloud service when you text a phone that isn't an iphone you get a different message is on. tights integration excludes competitors. that is what the accusation is in it blocks apples wallet. francine: apple is facing action in the, but this just tweaks? >> they had change the law and the u.s., it's being argued on

the basis of existing law, so that provides a different threat and pertains to how they have reacted. francine: are we expecting them to change quickly? we were expecting this, is that the doj went harder than we thought they would? >> we did not know. i think there was suspicion that they would pick on one or to things. francine: thank you so much, alex webb. read it shares soared from their debut as the ai pitch got a warm reception. the platform has a deal to use read it content for training models. general long expects the data licensing business to continue to grow. >> the core data is valuable and

gets more valuable because as there is content generated by computers, original human thoughts and ideas increase in value. a new car comes out, who will review it? a real-life family can tell you, that will always be valuable and whether that shows up in products, it is valuable. francine: let's go to bloomberg's julia in dubai. what does this say about red it's bed on ai and ipo confidence returning? >> on ai, investors bought into it and believe growth will come from using ai, allowing it to train using human user data.

obviously exuberance will remain to be seen in subsequent results, but it is a positive sign and this was a positive sign for the ipo omar is in terms of companies on the sidelines waiting for the market. it is not fully open, but is an encouraging sign and investors are getting more optimistic and we've seen an increase of more than 150% year on year. it is a very good start to the year clearly. francine: thank you, julia. this is what is coming up in the day ahead. retail sales on the back of what we heard from the bank of england, laying the groundwork after one of the sharpest

turnarounds in recent memory. data could support a path forward in a little earlier on, we got u.k. consumer data. one of the most upbeat figures since 2021. gfk saying a key measure of confidence stalled at -21 after a drop. we're watching out for germany. in the last couple of quarters they're seen as one of the most troublesome economies in this goes for the two largest economies. germany is down due to the service sector which came close to stabilizing. and be interesting to see the survey and we have the rate decision on the back of vladimir putin getting another term and us analyzing what asset freezing

means for the economy and whether they can circumvent sanctions. coming up, strong support to use profits from frozen russian assets to support ukraine. the latest next. this is bloomberg. ♪

♪ francine: welcome back to daybreak europe. ursula says there is support to use frozen russian assets. they spoke during the first day of the european union. >> strong support at the moment,

profits of immobilized assets for military purposes, i said if we are swift in concluding we could disperse the first billion in july. francine: i was european commission president. let's go to all you crook -- ollie crook in brussels. how likely is it that this will make it by the first? ollie: it is another vehicle to get money to ukraine. how do you get funding for the budget on sustainable footing? this question will be crucial

when you have political problems. what would be interesting is getting windfalls. what is interesting is this proposal and we will hear more about it, freedom bonds. the idea is to tap into underlying assets and package it up into future earnings. not just 3 billion. getting that to ukraine now, closer to $50 billion of value. the u.s. wants to seize those assets and get them to ukraine, but that will be difficult. this other freedom bonds might be the way to do it. francine: what progress has been made?

>> other key issues, there are stronger issues, violence and desperation in gaza. what will be interesting our discussions about accession of bosnia, ukraine and moldova. opening talks to join the eu, accelerating the process when europe is vying for countries between russia and europe. the last country to join was croatia and that took 10 years. as the eu is looking at a tiered system, you get a caret and stick some benefits without having to dutiful process. francine: thank you so much.

now to some other stories, 800 and $80 million has been approved. this is the first step and will bolster finances as aid from the u.s. is stopped. netanyahu says they will invade rafah the matter what the u.s. says. israel will quote finish the job. coming up, high-voltage ev's. why 800 volt vehicles are on the rise. this is bloomberg. ♪

♪ francine: welcome back to bloomberg daybreak: europe. next generation electric vehicles are adopting higher voltage charging. i'm joined by ryan fisher, bloomberg's electric vehicle charging team. there is a lot of buzz around this. what is the big deal? ryan: first generation technology, 200 kilometers in 20 minutes. these generations can do 200 kilometers in 10 minutes and bmw says we can do 300 in 10 minutes. those technologies are an

enabler of charges. these models are coming to the mass market. seven out of 10 automakers say we will have these platforms, so that is important because it means there will be supply chains and the cost will come down so people can be enabled faster charger times. francine: that means three decided not to take part, so who are they? ryan: toyota, ford, honda. they have not formerly announced these priorities. if you buy an electric car, you may move to another provider so you could say they are behind. if you are a fast follower,

maybe you are taking it manage of the supply chain. the platform could be designed to take advantage, but manufacturers are having issues. the latest and greatest have massive networks in a big consumer base. no doubt you would expect future ev's to have these platforms. francine: we went through u.s. bc, then, and he keeps changing. as an individual, does it make it more difficult to plug in? ryan: it is quite complicated charging when you are trying to buy a vehicle.

the average joe does not want to know about that. the 800 volts is another complication in that you can charge it, but if you want the max amount of power you are going to go to a certain amount of chargers. last year -- this was just in europe, but the u.s. is billing infrastructure out so places like germany are selling a lot of vehicles. the fastest ones will do these charge times. francine: what about the companies doing these chargers? is it early days? >> automakers are near the top of the list.

you've got another one in the u.s. that has been announced. it is an interesting market because you've got utilities and different companies realizing this is an opportunity. will it be profitable? they released their energy strategy and said we want to have greater than 12% internal rate of return, obviously a lot of considerations for a company. they are saying we're are going to divest, so big changes in the whole market. francine: does it put pressure on the grid? >> when you think about fast charging stations, you've got passenger vehicles, truck charging which can be as much energy as you need.

francine: brian fisher, head of the charging team. let's take a look across the board. dollar traders have been talking. it has been surging against emerging markets. unexpected snb spurring speculation that major banks will spur policy faster. that is playing out and you can see stocks down to tenths of 1%. coming up, nike shares fall as it warns shares will take a hit. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials.

“the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

francine: good morning. please are the stories that set your agenda. u.s. stocks hit fresh eyes on hopes for a soft landing after switzerland's central bank fires the starting -- on rate cuts while stocks in asia are broadly retreating. apple loses over 110 billion dollars in value after the u.s. justice department sues over antitrust violations. european regulators prepare their own probe into the company. reddit shares for 48% in new york as investors latch onto the social media companies ai pitch. if you look at futures across the board, little bit of pressure, a little bit of pause for reflection after the incredible rally we saw, especially in the u.s. we didn't have late yesterday, a pretty market concern for apple,

but also alphabet. overall, thanks to nvidia and micron, a lot of u.s. stocks were on a tear. this is the picture of s&p futures and change. euro stoxx 50 futures, but we watch for any indication about what kind of economy we will be left within europe. very quickly, treasuries and dollar are probably the one that i really would like to watch. the other one is onshore yuan dropping, that preaches a closely watched technical level after chinese authorities try to manage the currency. u.s. two year yield for .6084. sportswear brand night goal -- nike and lululemon fell on after hours trading after lowering their sales. nike expects revenue to fall as it shuffles out older merchandise while lululemon says the u.s. market has slowed down. our bloomberg opinion columnist is with me now. so good to speak with you.

early and bright in the morning to understand the retail complex in the u.s. what's going on with them? >> there are three things going on. he got the great rotation away from the pandemic casual wear. you got the great inflation, pressure on consumers. you've got this third factor that i called the great fragmentation. particularly for nike and adidas, years ago they could sell products to everyone, every category, every price point. what we've got now as we got all these little rivals. not little, but they are all nibbling away at various bits of their business. you've got lululemon doing that tonight. lulu is being attacked by the brands. they have to adapt. what it means is when you have specialists taken to sports areas, they become like

midmarket fashion brands. they have to have a constant surprise -- supply of new and exciting products. what they have both done, adidas and nike, they relied on these big sellers that burn very bright, and then they fade. the air force one, that is fading. nike is in the ascendant when it comes to product. nike has to adapt, get new styles in. but obviously that will be painful as they pulled back on those bestsellers and hopefully bring in bestsellers to come. and we don't know whether they are going to resonate with consumers. francine: what does that mean for adidas? >> adidas is suffering with all of these same problems. but the new ceo comes from a fashion background. he is more fashion orientated and he seems to have a very good grip on what is going on in this market. he has noticed that -- she's got

an advantage because his style, the sandbar, the terrors, the gazelle, all those retro things, he has noticed that those were coming to the for a couple of years ago. so last year he ramped up production of them and importantly, he seems to be figuring out where they will go next. he is introducing a variation sl 72, which is a running version. it's an olympic sneaker, so as olympic heritage. he's noticed what he calls these low-profile sneakers. so he's gone into the archive, he has reenergized this because he thinks they will be bestsellers. he has noticed that athletes are becoming more fashionable. he's trying to bridge the gap between fashion and athletes making performance where more stylish.

obviously there is a read across if demand is slowing, but i think the read across for adidas is limited. francine: if you are very nice you might actually send you her top 10 trainers. bloomberg opinion columnist, always fun there. let's pivot back to the central bank story. it has been a big week with switzerland's rate cut, the standout surprise. let's get to the managing partner and head of emea. jackie, good to speak with you. we spoke to the former s&p president who says this was the right thing to do, if you look internally at some of what the swiss economy was doing. i thought, it takes a very brave president or governor to do it because it's a small, open economy. is there read across for what it means for other countries?

>> obviously everyone is waiting for who would be the first big central bank to cut interest rates. and their rates are all really -- already still relatively new in the u.k. in the u.s.. people looked at that and said what is it mean for what the bank of england might do, the ecb. we've got a good indication from the bank of england yesterday that they are at the end of their rate increase cycle. when the first rate cut will come in the u.k., it still looks like it's likely to be after the summer. francine: it's clear that the ecb and fed telegraphed when they will go and may be by how much, they also said they are data dependent, are they clear when the bank of england will go ? >> you don't get a sense from the fed.

obviously the market would look at the dot plot, which is what we look at when the fed makes announcements. it's very clear there is 325 basis point cuts expected in the u.s. and this year alone. the first one likely to come around the june 11, 12th meeting. also the u.s. is in a different position because the growth has been so strong. they could probably wait a little bit longer before they start to cut. coming across the ecb and the bank of england, the european and the u.k. economy is struggling much more from a growth perspective. the central banks are trying to cut those banks to stimulate growth, and the u.k. has not found out when that cut will come, but interest in the same allocation in 2024.

francine: i'm quite into the dot plot because it's a good snapshot at that time. i know there's a lot of chatter this week about the median average of some of the fed fund rates and what that tells us about cuts coming, but then yesterday we had housing and manufacturing, labor market pointed to a resilient economy. does that change what we heard from jay powell the previous day? click settle thicket changes it dramatically because i think the markets got used to these in stronger economic numbers coming through. particularly in the u.s.. we have had a massive change. if you think back to where we were in november of last year, where the market was pricing in some pretty aggressive rate cuts for the u.s., and now we are down to just three cuts this year, and an expectation we might get to neutral rates in the u.s. to 2.7 5%, which is pretty low over the next several years.

the same in the u.k. the bank of england -- participants yesterday where they are seeing three rate cuts in 2024. there has definitely been a motivation of expectation about how much interest rates will be cut this year and next. francine: i have to say, it was on central banks this week's. well done everyone forgetting to friday. we had this nice column written a sickly suggesting that this week was huge for the boj. it hiked, at last, but it doesn't mean it's a sustained lift off. he doesn't say expect this rate hike to be the start of the cycle. do you agree with that? >> the bank of japan is slightly more difficult to interpret. but i would say that's a realistic assumption to make to say that this first one is it

now the ongoing change in direction. but if you think about how much of an about turn policy that is compared to the last decade or so, it's still a pretty big move. they change and messaging from yield curve control, i think the conclusions have a way to go. francine: going forward you see the complex currencies or do you see it in fixed income? >> from where i sit, it will be on the currency side. this interesting divergence in transatlantic interest rates, which will always be have a huge influence on where the currency moves in the future, the differential between where european interest rates are expected to land versus the u.s., you would expect the dollar strength on the back of that if those rates stay slightly higher.

again, rates might not have come down quite so much. for us in the clients, it's more focused on the currency. francine: play more ahead. this is bloomberg. ♪

francine: the bank of japan hiked rates for the first time since the 2007 scrapping the world's loss negative interest rate. the move signals confidence that the country is leaving behind years of economic stagnation. but how will this massive shift disrupt people's lives across japan and beyond? bloomberg originals correspondent takes a look. >> imagine a place where

everything money related is frozen in time, for almost three decades. your salary doesn't budge, the price of your bowl doesn't change, and the interest rate on your home mortgages closer to zero. well, that was a reality here in japan. we were used to the price of everything staying that he much the same. but it wasn't always like this. since the end of world war ii, japan has been ground zero for some of the biggest experience -- experiments in economics. older japanese, like these two, have experienced a roller coaster of changes throughout their lives. now, japan central bank has decided it's time to end its latest experiments and exit negative interest rates. for the first time since 2007, the bank of japan or the boj, raised rates. haslinda: ycc, gone. the end of negative rates. >> out of japan decide to manage

its economy different from the rest of the world and how is this massive shift going to disrupt day-to-day lives across the country? japanese growth has and always been this stagnant. at one point the economy was growing so fast that it looked like it was about to overtake the u.s. as the world's biggest. they cover the japanese economy for bloomberg economics. before, he used to work at the boj, so here he is with a mini history lesson. >> after postwar, japan entered economic miracle from the 1960's to early 1970's. that growth was led by a huge domestic demand because the middle-class households were expanding. in the late 1980's, japan's economy accounted for 10% of the economy. >> [speaking japanese]

>> [speaking japanese] >> at the time, many were flush with cash and reckless spending was the norm. by the end of the 1980's the stock market was on the up and up, hitting market highs. >> what was crazier was the realistic price. the land price of tokyo's imperial policy was said to be equivalent to the price of the state of california. >> in the first of the shock moves, the boj raise interest rates in 1989 trying to curb speculation and reign in inflation. the government also introduce measures to cool the property sector. >> the nikkei sector fell in value, and realistic prices plunged that lead to a long-term downturn. >> [speaking japanese]

>> authorities tried to pump the brakes, but instead they set the economy to a screeching halt. >> people in japan didn't experience wage growth and inflation. that means one generation for people. i, myself, growing up in japan learned the concept of inflation from macroeconomics. the world with no inflation makes people attach a certain product with a certain price. >> [speaking japanese] >> a small amount of inflation to help drive economic growth by keeping money moving around. most economies target relatively mild inflation of about 2%. but as you can see from the yellow, japan's inflation stayed below that for a long time.

as things got worse, the bank of japan followed the typical playbook for central banks. lowering interest rates. you can see the fed cut rates to cope with the fallout from the 2008 financial crisis. but the boj, for more than 20 years, kept at it with its almost flat mind. but it did not help lift the country out of inflation. in 2013, the boj decided to do something drastic there it introduce the quantitative and qualitative easing policy. in unconventional move where they basically print a lot of cash and pump it into the market i aggressively buying japanese government bonds. it was successful at first, but japan face it again a couple of years later so the boj went back to its box of tricks. in 2016 it adopted negative rates, a move that divided economist. the main goal was to punish banks that sorted cash, but that did not work either. the boj invented something

called yield curve control. >> yield curve control is an attempt that the boj controls not only short-term but also long-term rates so that businesses and households don't have to worry about too much fluctuation in interest rates. >> it could keep interest rates low by threatening to buy bonds without having to find that. that did not solve everything. companies cannot find profitable ways to invest their money in japan. many looked abroad for a better return so much so that japan became the biggest foreign holder of u.s. treasury debt, overtaking china. suddenly, in 2022, all of that changed. japan finally hit its 2% inflation target. the problem was what prompted it. first it was higher energy costs due to the ukraine war. second, a weaker yen. >> the bank of japan continue to stimulate the economy, even inflation.

however, the other major central banks hiked rates to fight inflation. >> eventually it was external forces that push japan towards ending its experiments. in other words, it was not the inflation japan wanted because it wasn't coming from consumers spending more. wages stayed low, even as inflation hit 4.3% in january 2020 three, which was the fastest in decades. but it's still because the yen to weaken, boosting companies like sony and toyota. that brought about some signs of change. >> the business leaders who used to be reluctant to raise compensations with the fear of having a lot of fixed costs, now started to become open to raise wages. >> the main labor union secured the biggest increases in 30 years. on march 19, 2024, the boj took a big step. >> the bank of japan hasn't -- has ended negative interest

rates. 17 years since the last hike. >> they are scrapping the yield curve control, and they will essentially pare back their purchase of etf's. >> raising the interest rate from -0.1% to narrow 0.01% doesn't seem like much, but it does put japan back in line with other economies. we asked at the top that of japan's negative rates experiment ends, what now? well, here are some of the changes we could expect to see. first, mortgages will get more expensive for the first time in decades and interest payments on the governments more than $8 trillion of debt, which is twice the size of the country's economy, will increase. the same thing will happen in companies. it could also propel the yen higher. that means your trips to japan could get more expensive and japanese exports could take a hit as well. on the flipside, it could make investing in japan more

lucrative, plus cheaper fuel and food imports are good news for japanese consumers. >> [speaking japanese] >> [speaking japanese] francine: that was bloomberg's original correspondent. plenty more ahead. this is bloomberg. ♪

larry: my senses that the fed is

still itchy fingers to start cutting rates and i don't fully get it. we've got unemployment, if anything, below what they think is full capacity. we've got inflation, clearly even in their forecast for the next two years, above target. we've got gdp growth rising, if anything, faster than potential. we have financial conditions, the holistic measure of monetary policy at a very loose level. i don't know why we are in such a hurry to be talking about moving towards the accelerator. francine: that was larry summers speaking with bloomberg's david westin on wall street week, this is a picture of financial conditions. congratulations to them for putting this altogether. a lot of the stock has been on stocks at a record high, but

what we should focus our attention on is also that this is all intertwined with friendlier financing conditions and it's very clear that these financial conditions have been loosening. this means companies looking to refinance, thanks to the credit markets, it means that this comes easier. this has a huge interplay with transition of monetary mechanism but while u.s. markets have stolen much of the spotlight, financial conditions are easing in a lot of places. i'm not only looking at the u.s., but emerging markets as well. coming up, pascal, the euro group president joins us live from the euro summit. that exclusive conversation on the pulse at 9:10 a.m. that's daybreak. we will have plenty more throughout the day. ♪

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anna: good morning from london, this is "bloomberg markets: today", i'm anna edwards long guy johnson. with the cash trade than an hour