Im Tom Mackenzie in london. These are stories that set the agenda. The bank of japan hikes Interest Rates for the First Time Since 2007 and scraps yield curve control. The yen falls through 150 versus the dollar. Traders cut fed bets as fomc members gather. U. S. Two year fiveyear yields climb to the highest levels this year. Plus, nvidia unveils the successor to its old ai processor. But markets deliver a muted response to the highly anticipated speech. This is hopper. Hopper changed the world. This is blackwell. Tom a new era for the japanese economy. The first hike since 2007, ending of yield curve control, and an ending of etf thats in buying. We have Stephen Engle on the ground in tokyo for all the details and we will cross over momentarily. Lets check in on the markets as we set you up throughout the trading day. The fed starts its own policy meeting with that decision on wednesday and a focus on the dot plots, the focus from the fed officials. European futures up. When it comes to s p futures, 5200, off by a 10th of a percent. Nasard futures down. Lets flip the board and focus on the japanese yen. A little softer in the session on the back of that decision by the boj. Seen by some in the markets at least as a dovish hike that came through for the boj. We check in on the japanese yen. 150 down 8 10 of a percent versus the u. S. Dollar. The move we have seen, on the twos and fives, yeartodate, you seem close to 50 basis points of moves in terms of the twoyear yield higher. You are currently at 472. Brun in focus as well. Continue to access assess the damage to the russian refineries. Estimates between 600 and 900,000. 900,000 barrels taken out by Ukrainian Drones. Currently 86 a barrel. Iron ore back above 100 per ounce. 100 currently 105. Currently up a little under 2 . 1. 8 percent on iron ore. The bank of japan has hiked Interest Rates for the First Time Since 2007, ending its negative cycle. Removing its yield curve control. Lets go to Stephen Engle whos been on the ground covering that story for us. Get us up today on what has happened. What we know at this point as we lead up to the press conference from governor you eta governor ueda. This was telegraphed by the nikkei and other japanese media, then they had a followup scoop earlier this morning essentially saying that the boj was going to scrap the yield curve control. That was one wild card, whether they would scrap that, tweak it, or whatever. They had decided as was reported yesterday, to hike Interest Rates for the first time in 17 years, exiting this negative Interest Rate policy. They did not hike by much. The same amount we expected by 10 basis points to a range on the shortterm benchmark rate of zero to 0. 1 . By scrapping the yield curve control, which had been in place since 2016. It basically is a momentous occasion in many ways. Because again, they are pledging to keep their jgb bond purchasing. They also stated they will scrap future etf purchases, not as needed as before because of the equity rally we had in the beginning part of this year. But the key line from this statement that we are awaiting at the press conference a half hour from governor ueda to explain the decisions, they will remain in accommodative policy mode. In the way the markets read that is essentially at least the bank of japan is not telegraphing that there is going to be an Interest Rate tightening cycle. There is no indication that there will be further once this year or beyond. It could be one and done, it might not be. We simply dont know. You alluded to the fact that the yen against the dollar has weakened past the 150 mark. That is the main reason why. Tom you have been speaking to x boj officials. What are they going to be looking out for from the press conference. 3 30 your time, 6 30 our time from governor ueda. Stephen what is the post yield curve control policy and Balance Sheet policy going to be . Already they have indicated they will keep jgb purchases relatively stable, but how will that be tweaked as benchmark as well. There is a few things that need to be ironed out. As far as the etf purchases, they will not purchase anymore, but will they start selling down the holdings of Exchange Traded funds . Again, the number one question, and he wont answer it because hes talking about the data that led to this decision as of right now. He is not going to answer the Million Dollar question and that is, is this the beginning of further tightening. Just normalization mean further tightening down the road, or is it one in 10 . One and done. Tom this historic decision from the bank of japan. The last to end negative Interest Rates. Stephen on the ground for us. Lets see how the markets are reacting and bring in avril hong in singapore. What are you seeing in terms of the bojs reaction across asia . Avril this was a move that was more or less anticipated it was well telegraphed given the flurry of media reports. But i think, to stevens point, its about how its going to stay accommodated. We will find out as the presser progresses. The idea that the boj will keep up with the amount of jgb buying more or less is proving to provide summer lee for they jgb futures. We see that spike. Lets flip the board and take a closer look at what we see across equities in japan. As we got that dovish hike. Its the sense you get whatever Interest Rate increases we see from the bank of japan is not enough to cause an issue for Japanese Equities. After all, fundamentals are intact. Corporate governance has been improving, so the benchmarks finding their footing before the close of trade. I want to mention especially here, we see those japanese financial related stocks that have been doing well in anticipation of this rate hike from the boj. It looks like the best might be behind them. They have tend to underperform in previous tightening cycles, taking the lead in Japanese Equities real estate sector. That surged 4. 5 . The idea that we are in an inflationary environment in japan, what do investors latch onto, tangible assets. Thats my property is running up the way that it is. Tom meanwhile, the rba, reserve bank of Australia Holding ranks and removing language about potential hikes in the future. Talk to us about that decision, the phrasing that came through and how markets are reacting to that. Avril the whole came in as expected. What we were watching out for was whether it would remove a bit of its hawkish bias. And it did in his statement where remove the phrase, the need for further rate hikes. Thats what investors latch onto. This is showing up in the currency space, the aussie losing ground in the face of whats expected to be a hawkish Federal Reserve later in the week, losing ground against the kiwi. The yen has been weakening past the 115 level against the greenback, similar picture on the aussie cross. Lets flip the board and take a look at what we see in the bond space. Bond traders are really liking the sound of what we are hearing from the rba. They are running higher, particularly on the short end of things. Thats the thats despite the rba governor saying they are not sure whether they can rule out future rate hikes. The markets have really run along with that. Tom avril hong in singapore with the Market Reaction. The boj in the rba removing it from a hawkish language. The other major story for us this week, above and beyond the Central Banks is the corporate story and ai story that is nvidia. Unveiling new chips aimed at the dominance of ai computing. The ceo showed off a new process of design called blackwell at the companys dtc conference in california. Hoffer changed the world. This is blackwell. Tom lets get more from Bloomberg Intelligence for the analysis on what we have been hearing from the ceo. This announcement around the blackwell chip. An upgrade to its processors around ai. Your take away from what we heard. This was a widely anticipated an for the continued ship. About 2. 5 more times more powerful than the hopper platform it replaces in the be 100, it will be the new technology to replace the h 100. As well as the performance, it is very keen to emphasize the reduced power consumption of this new platform. Which every corporate is incredibly sensitive to their environmental footprint. So it will be a much more confrontational process doing things without using power. I think it was an important element. I dont think anybody heard anything they were not expecting to hear. But there was lots of fanfare about how the world is getting more and more complex and competition driven and how these chips developing well continue to be in strong demand. I think they continue to maintain a big edge with their rivals in terms of delivering these things. Big customers are the Big Data Center and cloud companies. A lot more goes on than just the processing of the connectivity between these different computing devices. Kind of expanding the market. Tom its interesting you say they are looking to address those Energy Concerns around ai and energy consumption. We will see if the analyst latch on. In terms of what exists between nvidia and its competitors, have they widen that with the p100 with blackwell, or are they catching up . Its hard to say. My initial reaction would be maybe they have widened it a bit, but we have to see in terms of other announcements, but they are definitely maintaining it. One of the other things was towards the end, on the robotics platform, which disney is looking to use the small robots that are disney themes, they kinda remind me of the things that you saw on the star wars movies. So theres some exciting things that will open up a new debate about this robotics platform and how its used in the enterprise in the entertainment era. It was a lighthearted movement, which may be would spark some interest from bloomberg and others, i imagine. Thank you very much from what we heard at that key event around nvidia and the launch of their latest ai processor. Heres what else we are looking ahead to today. Front and center for us. 6 30 u. K. Time, 3 30 is the Governors Press conference for the bank of japan after that historic decision to raise Interest Rates from the boj for the First Time Since 2007. First time in 17 years. This will be important in terms of whether or not he gives an assessment guidance on the next steps for the boj after they raise rates, ended yield curve control and have decided to step back from etf and real estate purchases as well. So that press conference, six 30, we will bring it to you live with analysis from the experts throughout that press conference. Meanwhile, germany, the survey drops 10 00 a. M. U. K. Time, is europes largest economy starting to turn around, are they green shoots, that detail will be important. We know the economy of germany is challenge. Some suggested signs of green shoots. What that would mean for the thinking of the ecb. Fomc meeting beginning today. The fed has started that meeting. They will start later today with the decision from the Federal Reserve coming through tomorrow, expected to stay on hold. But we are looking for any potential revisions for the dot plots in terms of rates and rate cuts. With three currently penciled in. They move that to two. Crude prices on the move after the Ukrainian Drone strikes knockout in estimated 600,000 barrels of russias daily oil refining capacity. The details on that story just ahead. Coming up, i will be speaking to the chief economist at fujitsu, getting his view on the bank of japan news and governor uedas comments. Thats at 6 40 a. M. U. K. Time. Stay with us. This is bloomberg. Tom welcome back to bloomberg daybreak europe. Happy tuesday. Lets go into whats happening in the oil space. Gains this morning after brent closed at its highest since late october. That since Ukrainian Drone strikes at the geopolitical tensions with the Oil Trading Platform estimating around 600,000 barrels of russias daily Oil Refinery Capacity has been knocked out by attacks. For more on this lets bring you bloomberg seeing Energy Reporter stephen. Talk to us about the impact on russias refining space from these Ukrainian Drone attacks and how long it will take to get these refiners back on line back online. Lee talk to the analyst, j. P. Morgan thinks there will be 900,000 minerals a day barrels a day of an impact. No matter which way you look at this, this is in and day situation. When we have talked to people in been to analyst notes, it does look like it will be a weeks or months outage. That means that gasoline and other oil products being refined at these facilities, their output is going to be reduced. That will have a twofold impact. That will reduce their exports out of russia and puts upward pressure on russian gasoline prices, which is something the government does not want to happen. They like things to be cheap for folks inside the country. Another complicated issue is how does crude oil react. We have this risk premium on crude oil rising because the knock on effect of higher gasoline prices means potentially crude will have to rises well. There is this other view that if crude isnt being refined, russia can just export that crude, which means Russian Oil Exports could also rise. That could be a bearish element in the market. But overall, i think the market is looking at this as a risk premium on crude. Thats why we saw the big jump yesterday. Analyst say theres a two dollar to three dollar premium on crude, thats why brent is up 87 about, which is the highest since november, basically. Tom thats an interesting detail the fact that it could lead to more russian oil on the market and suppressed prices. For now, the expectation is that it will continue to push these prices higher. Up 12 on brent year to date, does it change the thinking of opec plus at all, the developments that are unfolding in russia . Are we starting to talk about on prices . What is your take on those lines . The interesting thing you have to look at is this is a price level they probably wanted from the beginning. I think when they continue their cuts for the next quarter, i dont think they were really worried so much about prices being too high. So i think at this range, you are not dealing with demand destruction, you are not dealing with pressure from the Biden Administration begging for relief. So in general, the view is that these cuts will continue into the next quarter. You could see a continuation after that as well. At the same time you see some producers like iraq say, we werent to the level that we said we were going to, so we will retroactively reduce our exports as well, and thats what happened recently and that has helped add to this bullish narrative in the market. I think opecplus was comfortable. Once we hit above 90 and there is pressure on consumers in the u. S. And other places and asian consumers as well, thats perhaps when you will see them considering, but i think we are still a little too early for those discussions. Tom important context. Bloomberg seeing Energy Reporter as we look at brent edging closer to that 19 level. Not there yet but currently at 8673. Coming, barclays chief executive tells bloomberg the lender is planning to expand relationships with sovereign wealth funds. More from that exclusive conversation, next. This is bloomberg. Who wouldve expected ubs shares that have soared since the bank took over its swiss rival Credit Suisse one year ago. Yet, thats exactly what happened with the stock hitting a 16 senior high in early march behind this confidence with the chief executives turnaround and integration of two banks. I think its important for investors to understand how we are connecting the dots between what we see in summer last year, in respect of our longterm plans. Quex a goal is simple. To make ubs the undisputed Global Wealth champion and take on wall street why bulls rivals where they have the home advantage in the u. S. The chief hopes to leverage them in the u. S. And manage their wealth. Including those still building their fortunes. But, catching up with these American Financial giants will take time and come at a cost. More than 50 comes at a cost. We try to do it over time. European banks, including Deutsche Bank and hsbc and ubs have previously tried to crack the u. S. Market and had to pull back. But this time, ubs seems to be the one left standing at the end of this round. Tom bloombergs daniel reporting on the outlook for ubs one year after they took over credit suites. Talking of ubs, lines crossing from the Swiss National bank on an annual report on Capital Requirements saying a review of ubs systemic Capital Requirements is needed, saying that stability of the swiss Bank Financing needs are strengthening and it says banks need to prepare more collateral for emergencies. We will keep across the story for you throughout the next few hours. Lines crossing on the snb with this annual report with the focus on collateral and Capital Requirements they see needed because ubs plays a major part in that. Barclays seeking to expand with the private equity giant as a broad its own footprint with executive underwriting. Barclays ceo spoke exclusively to bloomberg surveillance. Previously