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>> good morning, i'm lizzy burden in london. strong u.s. factory data pushes markets to really think cuts. iran vows a response after a strike at the embassy killed two generals. this over the invasion of raw for -- rafah. heightened oil risk and supply. you had time to digest the central bank bonanza. lots of eco-data amongst fed speak. 19 including fed chair powell.

we've had data reinforcing this narrative that inflation is falling more slowly than expected, hence why the fed will not be in a rash to cut rates. you saw stocks joining a loss continuing later, pointing to a lower opening but in europe tilted to upside. if we flip to crass -- cross assets he got the two-year treasury yields, 4.69% as traders pushback pricing to september. for a moment you solve the august dipping below 50% and all

eyes turned toward the jobs report. the dollar is steady, brent trading below $80 a barrel. tighter supply from mexico and we will dig in later. gold hovering near record highs and trading at 2000 $257 per ounce. let's get to vonnie quinn with an update on how markets are faring. vonnie: fascinating session with crosscurrents coming together. first reaction to the pce data, hong kong closed yesterday, now reopened. huge catch up there, but activity around the yen.

mark mobius saying anyone short on the yen, this is a losing battle for authorities. we are at 1/5 the one. 152 is the line in the sand. as mark cranfield said, it could be anything and officials have been good about wrong footing traders. they might let the yen weakened before they do anything about it. that is all playing out. it last time we got intervention was 2022. previously it was 1998. nikkei has turned positive. down session yesterday. one narrative was this might be the end of the up cycle and china could be a beneficiary. we will see.

hang seng catching up to and a quarter percent. shall mean is up 11 and a half percent. they unveiled their first model and orders went gangbusters on par with china. across asia the index is about 3/10 of 1%. china is hesitating, csi down for tenths of 1% after the pmi data out of china, not just the u.s.. korea is down, stickier inflation as well. india's them. in the stern to give back money,

investors turning back to china. lizzy: a tour of asia, thank you, vonnie. dollar gain is yen pain, so let's dig into the dater out of the u.s.. strong data prompting traders to price in less policy easing. markets weighing cautious comments from jerome powell. analysis from jill. traders cutting rates. how doubtful is a june cut looking? jill: 50% chance of june rate cut. far cry from months ago when

traders expected a rate cut. as you see, economy has been more resilient and being expectations really added even though we had cooling in the core inflation. the picture for the trajectory is was clear. getting jobs data in the jobs report will give more clarity on one they can start cutting, a murky picture overall. lizzy: 19 fed's beaches. who are you listening to?

>> interesting to hear on when they're pricing things in. you have to take the totality of statements. getting the idea that there expressing patients. who is keying in on the labor market report, we will see how that develops closer to june because we want to know whether there will be crystallization on a cut by may. lizzy: jill, thank you.

i want to get back to the geopolitical story because it is affecting the oil price. the strike in damascus killed several people including military generals. israel should be held accountable for the repercussions as tensions grow between long time adversaries. joining us more is patrick in istanbul. >> good morning, it is an escalation between these enemies. they are targeting iranians loyal. much more directly than previous attacks, whether they targeted military personnel or proxies, but not in iranian territory.

when building is still standing where you can see the government building flattened. the two targets are there has military advisors and he's got a long history in the expeditionary force responsible for iran's revolutionary ideas. lizzy: you have to wonder if netanyahu is using war take the fight to iran. what has been the response and what are iran's options? patrick: it is a tricky balancing act where they will feel the need to respond, but

constraint is the prerogative to not invite further response. we have seen that iran going further than previously. you mentioned the foreign ministry statement. they summoned the swiss at tasha who represents swiss interests, that is not something you usually see. we found out one hour or so ago that the security council met last night and took appropriate decisions without elaborating. they are signaling that this is being taken seriously and telegraphing there will be a response in a more public way and they have in previous attacks. the question is do they do something similar? try to attack israel on its own territory? that would be a huge escalation.

or do they find an equivalent like this extraterritorial territory like the consulate. a tricky balancing act. lizzy: thank you for the update. they made a video call back on the schedule now in person. let's get you up-to-date with what we have on the docket in terms of eco-data. set to be a busy one. we get eurozone pci would you might take with a pinch of salt. on thursday as euro area pmi and then friday is the march jobs report, the highlight of the week. you already saw in the manufacturing survey the employment side showing declining demand for workers.

this will be influential in terms of rate cut that's. news crossing that ubs is going to launch a share buyback program of up to $2 million after we saw ubs cutting its bonus pool last year by 14%. i tough yeah for dealmakers. sergio our body is the best paid european boss in the buyback program is in focus given the merger just past the one year anniversary. from ubs's statement on uh, uh, they say we intend to commence a share repurchase program of up to 2 billion u.s. dollars as previously communicated. we expect to repurchase up to

one billion dollars after completion of the merger between ubs and credit suisse, which is expected to occur after the end of the second quarter. ambition is for repurchases to exceed pre-acquisition by 2026. i'm sure we will bring you more on that throughout the program but you can get a roundup of the stories you need to know to get your day going on the daybreak newsletter. go on the terminal. turkeys president suffers defeat in municipal elections. live to discuss the fallout next. this is bloomberg. ♪

♪ lizzy: welcome back to bloomberg. we are going to turkey where the president suffered an unprecedented defeat at the ballot box. the ak party fell behind chp in municipal elections, the first defeat since he swept to power more than two decades ago. more from our turkey government reporter barrel ackman in the

turkish capital. is this a watershed moment? barrel: as you mentioned, it is a defeat. he came to power as prime minister about two decades ago and it is a historic moment for the opposition where we have rarely seen strongholds taken from a party in local elections. five years ago we saw the opposition captured in the commercial have as well as the capital and major cities in the west, but this time it is a landmark victory because they've taken control of city's that they ruled for decades, even with the predecessors of the party, so it is a show of force against the president and a watershed moment.

lizzy: is it a watershed moment for turkish macro policy? >> we will have to see what happens with economic policy. we've seen in the past how election results in major events -- impact economic policy. but when the president conceded defeat, he signaled the normalization path we've seen since may to continue saying inflation has fallen down in the program continues to include aggressively tight policy and fiscal discipline, which the finance minister has said means more savings after elections.

investors do not see risk to a shift in the policy. inflation data will show consumer inflation toward 17% and we will see what the economic authorities will do, whether they will tighten policy further. lizzy: thank you for that and we will continue the conversation later with bmps head of credit strategy. up next, australia's central bank will introduce a new system . exclusive conversation with christopher kent. this is bloomberg. ♪

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lizzy: malcolm back to bloomberg. australia's central bank is switching to a new framework for the implementation of policy. the assistant governor outlined that in speaking to bloomberg. >> what we have announced is a new system for implementing monetary policy in the future. it is more about the plumbing of moving money around, achieving a cash rate close to the target. it is not what the target is. the target is monetary policy. this is just how we achieve the target at any time. >> it is responding to imbalances coming from the last few years? >> responding to the running

down of reserves, excess reserves, in the system. we and other banks issued unconventional policy that put a a lot of money in the bank accounts. as the tff gets repaid, it is about looking to the future and thinking about what we need to do, what system. >> on the comes to the balance sheet, a lot will depend on demand, but do you have an idea or of scale? >> no, that is why we've chosen a full allotment allocation system. thanks come to us in for a fixed-price can borrow reserves, pledge collateral for 20 days of the moment and take what they want, as long as they have collateral.

supply of reserves will depend on bank demand. banks have their own estimates, we could come up with some ruffed ones -- rough ones. we should transition seamlessly and we will know when we are there when banks show up in larger numbers and quantities on a weekly basis. >> until we get there, we will not know is a good phrase to describe monetary policy. you were asked cheekily to give one word to describe monetary policy settings. i will give you a few more words, elaborate? christopher: the starting point is the board thinks the interest-rate path that will bring inflation down in a timely manner is uncertain. so they have not wanted to rule anything in or out with regard to interest rate changes.

we are in a better place and inflation has come down. it looks to be moderating, but the path according to forecasts is gradual from here. labor market pressures are easing. that is because growth is slowing, so that brings demand into balance. those things are in place. central forecast predicated upon further good things including productivity growth. in the key point is those are reasonably balanced as best we can tell and the path is uncertain. the next rate change, we don't know if it's higher or lower. >> when you talk about the inability to rule out shocks, how much risks do you worry about? it might be election driven, policies of other countries.

how much is domestic or structural macroeconomic aspects that we have not seen yet. >> it could be both, we don't know. as a smaller economy we are subject to developments offshore. we've talked about what is happening in china, a major export market for us and there are concerns about the property sector and the problems they are dealing with, so that can impact demand for commodities and move our economy around. domestically things can be moved by what people here are doing, households. how are they going to behave in the future? that will be a key point. lizzy: that was rba assistant governor christopher kent speaking to bloomberg.

of u.s. futures are pointing lower today after the s&p closed lower 2/10 of 1%. stocks doing the losses after factory data is stronger-than-expected, reinforcing that the fed is not in a rush. traders pricing the full first cut in september pushed back from the start of the year. treasury yield at 4.69%. coming up, oil years a five month high. we will dig into that next, this is bloomberg. ♪ (jennifer) the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss

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>> good morning, this is

bloomberg daybreak: europe. i'm lizzy burden in london and these other stories that set your agenda. strong u.s. factory data pushes markets to rethink the number of fed cuts this year with the june cut dipping below 50%. i ran vows a decisive response afterwards as an israeli strike on its mbs embassy killed two people. this agrees to in person talks with the u.s. over invasion of rough. oil nears a five-month high on that heightened risk in the middle east as well as titers supply. we will dig into all of those stories. lots of geopolitics to get our teeth into. it is a busy week ahead for economic data. we have already had a little bit from the u.s. factory data. as i've said, it has pushback rep -- fed rate cut that's. there was a moment you saw the june cuts dipping below 50%. you can see on the picture that

-- the impacts in terms of stocks. stocks join the losses in bonds. s&p closing down 2/10 of a percent. wall street set to open lower today. in europe, more optimism, flat to the upside when it comes to euro stoxx 50 futures. if you flip over to the cross asset picture and you look at treasuries, there is not a lot of movement. the two-year treasury yield at 4.69%. we have seen traders pushing back their pricing for the first full fed cut to september. all eyes turn to that u.s. jobs report for march on friday. the dollar, pretty steady at the moment. higher six basis points. oil just below $88 a barrel. this is on all of the geopolitical risk in the middle east. also, the supply tighter from mexico. you have gold hovering near record highs, currently trading at $2254 an ounce.

meanwhile, the yen is weakening toward 152 per dollar. this is a key level that traders see elevating the chances that japanese officials will bring us that yentervntion. let's get to mark cudmore. spring is here, is it time for the yen to blossom? mark: good morning. it is not time for the yen to blossom. there aren't any cherry blossoms for this currency. whether there is intervention, it will only lead to short-term gains. the fundamental reasons for yen weakness are structurally still there and will not change in intervention and have not changed based on recent doj action. the fact is, japan has deeply negative real yields in their more negative than the rest of the world. even though it has negative real

yields, it's not like its economy is booming. they are still fighting a deflationary mindset. i know they've had positive inflation prints the last couple of years, but it's not runaway inflation. in one of the gets global inflation threats we've had in 40 years. i think the structural reason for yen week this remains the same. it could continue to weaken even after intervention. it might be strong for a couple of days, but quickly traders will sell into that. lizzy: that's the internal story in japan. but how much of the resilience of the u.s. economy is feeding into it? where are you on the 50 versus 75 basis point rate cut on this debate as we have all of the eco-data coming in? mark: i don't see how the fed can cut even 50. i would be shocked if we get more than 25 basis points this year. he have a strong labor market, we have a consumer that continues to spend. we have manufacturing sector come out of contraction

territory. it is a good lead indicator because it matters for hiring, etc. all parts of the economy are still strong. the fed december meeting, they said a very dovish message. it reignited an economy that might've started to slow. there is no landing. i know the fed has expressed desperation to cut. they will try to get away with 25 basis points. i'm not sure they get away with that. i don't see them doing more than 25 basis points, and less there is a crisis. some regional banks will go because of commercial real estate, but it's not systemic. private markets have stretch valuations, but it's not systemic. there is nothing on the horizon that looks likely to derail the economy. therefore, it will be hard for the fed to sell cuts, no matter how hard they try. i don't think we get 50 basis points. i think it's more likely we get 150 basis points than 50 basis

points. that may sound strange. the only justification for the fed to doing more than one token gesture cut would be because the u.s. economy does go into crisis. the fed will need to cut more aggressively. yields need to go higher from here still. lizzy: not even core pce. the fed's preferred inflation gauge coming in line with expectations could knock your confidence. mark cudmore, we thank you. bloomberg's mark cudmore. let's go to oil. it's holding near a five-month high with heightened geo-political risks and supply constraints boosting prices. we have bloomberg senior editor reporter in singapore, stephen, thank you for joining us. what more can you tell us about this rally in oil prices? stephen: oil is up over 10% so far this year. there are a number of reasons, as you mention, there's the geopolitical risk with iran and the tension there with israel and what's going to happen to

the region. that has been the story for the last six months. what is really driving the oil market now is playing fundamentals. you look at what opec-plus is doing, they have cut back in cap their production cuts in place going to the second quarter now. the market, a lot of the supply and the froth is being sucked out of the market. on top of that, there are pressure points. one of them being yesterday, mexico. bloomberg reported they canceled contracts for some of their heavier grade crude exports to refineries. in the u.s. and other places. that means u.s. refiners will have to find supply elsewhere. you see an indication that u.s. prices are trading at a premium because of that. there is also risk that potentially pushing oil inventories is trending lower. they are at the lowest seasonal level in about two years. there are fundamentals in the

markets beyond the geopolitical risk being you are looking at. certainly that is part of it and there is the risk premium in oil prices, but we are finally beginning to see true fundamentals driving the oil market. you are looking at the bullish bets in the market at the highest level in months, in about a year. as people expect that rise, brent is right below $88 now. this rise to potentially $100 a barrel is potentially in the cards. there is a lot more uncertainty for what will happen with u.s. production, what will happen with mexico ahead of the election, will they keep reducing exports. what will happen with chinese demand. in all, it seems like there is a bullish sentiment and oil will go higher than few weeks and months. lizzy: it's not all about geopolitical risks, it's about supply cuts. when opec-plus meets tomorrow, what can we expect? stephen: we are going to expect them to keep the cuts in place.

i don't think there are many people in the markets expecting a surprise. this is where opec-plus -- by opec-plus, i mean saudi arabia -- once the oil market. they want prices above $80. if they go above $100, then you have gasoline prices rising around the world. customers knocking at your door. this seems to be the sweet spot, this $88 level. what to expect is rubberstamped. they expect that the market requires these production cuts to continue. they are likely going to say very little or nothing at all about the third quarter and what they will do going into that. overall, it will be a rubberstamp event. if not, you will see fireworks in the market going one way or the other. lizzy: brent trading at $87.81 a barrel. we will wait to see if we get any fireworks. bloomberg senior energy reporter , steven. let's get to the other stories making news this morning.

a billionaire donald trump supporter known for supplying auto loans has posted the former president's appeal bond in the civil fraud suit by new york state. his company launched the $175 million bond three days before a court imposed deadline, giving trump a lifeline when he appeals. his fortune stems from car dealerships, real estate investments, and financial investments. mckinsey's offering nine months pay and career coaching services to some u.k. staff who would like to leave. the move comes after the firm warned some u.s. consultants that they were running out of time to earn promotions. mckinsey and its peers have trimmed their headcounts and slower the pace of hiring over the past year as demand from clients decline. in other news, citigroup is said to have implemented a fresh round of job cuts in its u.s. and facebook -- investment bank. technology, media and telecom were among the areas hit hardest

. with senior bankers in junior roles affected. they have now concluded their planned changes. the owner of the ship that rammed into a bridge in baltimore is seeking to limit its liability to $44 million. in a joint petition, grace ocean says the collapse was not due to any fault or neglect, so it shouldn't be held liable. the disaster killed six people and severely disrupted the eastern u.s. transport network. here in the u.k., inflation dropped to its lowest level in more than two years last month. markets competing to lure shoppers. the rate of price rises slowed to 1.3%, sharply down from 2.5%. food price inflation eased for the 10th month in a row, its lowest since april 2022. those are some of your top stories this morning, now we can

take a quick look at what else is happening this week. on tuesday we get germany cpi. we have fed speakers. on wednesday, nato's foreign ministers meet. there is also euro area cpi. plus, fed chair jerome powell speaking on the u.s. economic outlook period on thursday, we have more fed speakers on friday. it is jobs day with u.s. payrolls and that jobs data. plenty more coming up on the program. stay with us. this is bloomberg. ♪

lizzy: the leader of south africa's main opposition, the democratic alliance says he

would resist forming a coalition with the ruling anc. polls suggest he could lose its maturity in the general election for the first time since coming to power 30 years ago. he spoke exclusively with bloomberg's jennifer zabasajja. >> we have already got a preprepared agreement about how we will work together, how we will stabilize a coalition. jennifer: why not just have one single party ruling the country? is it because the past 30 years of the anc, what if it -- what are you opposed to? john: in south africa people are brand loyalty organizations and brands. it would be a year before the election to expected to get the name recognition in the traction. we are seeing the fact that they are not making the breakthroughs that people would expect them to . precisely because of their unknown quantities. we are hoping the multiparty charter will end up greater than

some of the parts. the ifp can go on the hunts. the freedom front can bring votes from rural parts of the northwest and those committees. the ac dp can bring in the religious voters. to bring all of those to the table to form a big part of chips that can be used to be able to form again. jennifer: what about the da and and see? that is out of the question? >> that's why we form the multiparty charter. my job is to get the anc out of government. i don't think we will solve the country's problems by having the same people responsible for the economic crisis, the social crisis and infrastructure crisis off the table. that's why the multiparty charter will not do deals with the anc. denver, what if we see a scenario where the anc is in the scenario? john: we will go back to the multi-charter and we will go back. maybe we can form in the north

-- a minority government. i think there are too many unknowns at this stage to say my focus is on getting the anc way below 50% and getting a new set of people around the table so we can get our table -- our country off this low growth hard debt unemployment trajectory. lizzy: south africa's opposition leader speaking exclusively to bloomberg's jennifer zabasajja. i want to stay with emerging markets and turned to turkey where president erdogan has suffered a stinging defeat against the main opposition in local elections. for the impact on markets we can bring in bnp paribas already lobo head of strategy. great to have you with me. turkey, are we brace for a watershed moment in macro policy? >> i don't think this would be categorized as watershed given the outcome over the weekend. this is clearly a surprise, and

the story we have seen in turkey is that markets have been expecting this return to orthodoxy by erdogan, which surprised us after last year's elections. so if you look asset prices, we will see a substantial rally already, talking about multi-ratings upgrades, we have seen that already in recent months, so the outcome over the weekend will inject some degree of uncertainty around this, but everyone has spoken publicly about his commitment to reforms. is it a game changer, i don't think so, but i think we should be bracing for more volatility. lizzy: we continue to hold our breath in turkey. i want to take a trip erie let's go to argentina. when do you expect the government to dollarized the economy. this was a campaign promise. >> i think he has backtracked from that. so, right now, what he is more focused on is reforms and what he has working in his favor is a

clean slate when it comes to negotiations with the imf. i think that has really been what has been holding the rally in argentina. of course the bill has suffered comeback in congress. we will see more watering down before it gets past but i think the imf story here is key, but the dollarization i think is currently on the back burner. lizzy: all eyes are on the imf meeting, what are you looking out from the perspective? >> into weeks we will see the meetings commence. i will be there. expectations are very high. a lot of these stories are currently hinging on the continuation of imf support. we have argentina, ecuador, ukraine, egypt to name a few, so a lot of these really rely on this ongoing support, not just from a balance of payments standpoint but from a fiscal

credibility. imf support is key and given the extent of the rally so far, any hiccups will result in a consolidation. lizzy: you mentioned egypt, how long will investors need to feel confident about effects stabilization before they buy egypt's debt? >> the fbi inflows is substantial. i think that has been a game changer and has provided the central bank authorities with some breathing rooms in order to match the measures that they needed to on the effects. i think the competence is already there. again, we have seen a 20% plus rally in each of bond so far. i think near term, the space for us to rally further is limited. we are waiting for more signals from the imf meeting. lizzy: just thinking about the u.s., we had interesting comments from the citadel founder who has been saying that it is a growing concern that

cannot be overlooked, this issue of u.s. national debt, how real a possibility is u.s. debt crisis given the ripple effects for em as well? >> if we have a u.s. debt crisis, no one is immune. i would say em fundamentals are on the mend, i entered the year with a very bullish view on em credit. i wasn't bullish enough. the speed of this recovery, the speed and death has been quite profound. em triple c has rallied 22%. ysl, while we have improving financing channels, while we have improving debt fundamentals as well. the theme i keep talking about is the idea that em high-yield countries in particular, have access to alternative sources of financing. debt to gdp metrics are on the -- are on the decline for this year, and the higher debt because that a lot of the develop market nations have to lock in are being avoided in em

because they have access to financing. lizzy: that's interesting because i read your comments on the use rules on greenwashing and green bonds in emerging markets. in a sense, is brussels throwing the baby out with the bathwater trying to stop greenwashing, but then not applying a specific of enough lens when it comes to regulating em bonds? >> i think there is a bit of stalling in the esg momentum for that very reason. but i think there's also broad recognition that any kind of ambitious climate goals -- any ambition on the energy transition agenda needs to scope in em countries. we actually see more em countries now developing social emg frameworks in the bond issuance and that is a welcomed initiative. lizzy: do you see a move from the ge within esg?

>> we see that already. i think the s pillar is a bit more encompassing and broader, so we see a lot more of those issuance in em bonds. lizzy: looking fabulous. thank you for joining me. that's global head of em strategy with a trip round em markets. plenty more coming up, stay with us, this -- this is bloomberg. ♪

>> the report that came out this morning is pretty much in line with our expectations. we are making progress, this is good, but we need to see more. the decision to begin to reduce rates is a very important one. the economy is strong. we had growth for the last year

over 3%. we don't need to be in a hurry to cut. it means we can wait and become more confident. i don't think rates will go back down to the very low levels they were at before the pandemic. this economy doesn't feel like it's suffering. lizzy: so, fed chair jay powell speaking out. a key influence on the fed's thinking is going to be the u.s. jobs report on friday for march. this is really the key highlight of the week when it comes to economic data. if we just think back to the last report, you could see that the unemployment reading was at a two-year high. estimates offer a 3.8 percent reading this time. if you flip the port over, the last print saw the biggest revision to the month before in over a year. so really, we need to keep an eye on volatility here. if we flip the board again, you can see job status surprises has been relatively strong. so, this could be a very interesting day for markets. on friday we will have full

coverage -- full coverage for you here on bloomberg tv. you've already seen fed rate cut bets being pushed back. such a dramatic change from the start of the year. we had the factory data yesterday showing this resilience in the economy again. more resilient than economists had expected. inflation falling more slowly as well than economists had expected. there was one moment when actually you saw those pricing for the june cuts slipping below 50%. so, do we see even more of a pushback from that on friday? we will have full coverage for you. markets today is next. stay with us. this is bloomberg. ♪ lcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing?

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