Kriti the magnificent seven driving a rebound in u. S. Stocks. Apple unveiling plans for a new inhouse ai powered chip. Monetary policy, traders reprice the ecb putting it on track to cut before the federal reserve. Christine lagarde insisting the ecb does not take cues from across the atlantic. Wall street Bank Earnings are in focus. Jp morgan, citi, wells fargo all set to report today. It is friday. Were ready for the we can but theres plenty to digest the next 24 hours. We look at the futures picture, broadly positive this side of the atlantic. Euro stoxx 50 futures higher 0. 6 . The ftse 100 seeing green on the screen this morning, higher 0. 4 . Is that pricing in the full story of the ecb cutting . Is that a positive rates story . At the end of the day, the s p story not seeing as much green on the screen, despite that massive rebound in the u. S. Tech space on particular. Usually you would see the asian or european traders hop on that trade. They are not this morning trade lets talk about cross assets though because the bond market matters more and more now. Now that we have Interest Rate differentials coming to the forefront, youre looking at 4. 57 on the 10year yield, the fact that we are sustainably above that 4. 50 level. Is 5 on the horizon . We will dive into that throughout the show. Fx gets interesting. You see volatility in the bond market not necessarily in effects. 1. 07 on eurodollar, 1. 25 on cable. You are starting to see european currencies cracked but still a dollar story driving it. The dollar is driving the commodity space, brent crude trading at a 90 handle, only higher 0. 6 . Let me get a quick check on how asian markets are faring. Tonya joins us from hong kong. Walk us through it. Hey, good morning and happy friday. Asian stocks are trading mixed today. I will take you into japan first. Japan equities are on the firmer side, helped by this real estate sector surging. We have seen companies announcing buybacks and we have seen companies talking about cutting strategic holdings. That is boosting Investor Sentiment there. Also the construction names in japan are giving this a [government has been handing out a lot of support to projects around chipmakers and semiconductor factories. Another company to flag in japan, fast retailing, the operator behind uniqlo reported an operating missive due to weakening sales in china. We might see a slump continuing as they shift their key market to the eu. Quick mention on the yen, were studying around 153, it had weakened over the past week. Interesting to note because jgb is hosting their worst session this time last week. We had seen officials doing a lot of intervention when we saw the yield nearing 1 . Were not getting much of a squeak in japan this time around. Im going to take you into china equities. Were still on watch for data out of china, trade data come along growth data could be due sometime today. Next week we will have gdp numbers. The hang seng index is getting close to the 17,000 threshold which were to send a negative signal to local equities. Going to mention some currencies. The korean won was weaker earlier today, the bank of korea earlier deciding to keep policy settings steady. They will keep an but the won weakening on that strong dollar. The singaporean dollar steady eight now, earlier they had a Central Bank Decision as well. Kriti tania bringing us that report this morning. From asia to right back to your. The ecb confirmed it will be cutting rates at its next meeting in june. Seeing an 84 chance of it priced into the markets, after the Central Bank Held rates yesterday, but in a contested decision. The dynamics of underlying inflation and the strength of Monetary Policy transmission were to further increase our confidence that inflation is converging to our target in a sustained manner, it would be appropriate to reduce the current level of Monetary Policy restriction. Kriti joining us is bloombergs jana randow. Covering the ecb closely. When we talk about the ecb perhaps front running the federal reserve, what does that mean in terms of strategy after that first rate cut . If we get that happen in june, is that setting up the stage for rate cuts every meeting on words, how is the ecb thinking about it . Its an excellent question and im afraid im not having an answer for you just yet. The president left all her options open. We heard it in the clip. She said, if confidence in the inflation path towards 2 increases, then the ecb can remove some of that restriction. She also said policymakers are not pretty committed. They will continue to look at the data and see how it comes in. Of course, we get the next projections in june that will tell us a lot. That everybody expects to form the basis for that first cut. What happens after is unclear. The projections, so far the march ones, are built on assumptions the ecb would be cutting Interest Rates by 100 basis points this year. Strictly speaking if you want projections to materialize, that is the kind of easing you have to deliver. But, of course, things change. The ecb said and lagarde distressed clearly they will look at the data. They will see how it pans out and then take their positions. What happens in the u. S. , at the fed, will play a role. She found quite nuanced language yesterday on how the ecb is affected by those decisions and by Economic Trends across the atlantic. Kriti for the four hours ago, you were with us 24 hours ago, you were with us talking about markets getting ahead of themselves. Maybe a cut did need to happen it yesterdays meeting. Now some ecb members said there might be a need for it. Walk us through divergences within the ecb itself. We knew going into the meeting there were a few governing Council Members, who hadnt excluded moving in a knowing they probably wouldnt have a majority. Arriving at the ecb, there was a group of people that thought lets talk about it. If i had to say, i would favor going early. They are referring to an extremely weak eurozone economy. Where manufacturing is still shrinking, where confidence is just inching up. Where demand for corporate loan demand is disappointing, which means prospects for investments are very low. Inflation for example is falling faster than expected for four months now. So, they saw a room to already start moving. But the large majority of governing Council Members said lets wait for the data. We said we would be datadependent, so lets look at it. There were a few that took a while longer to convince. But ultimately, the president said everybody rallied around of the consensus. Setting up june. It would take a lot for that move not to happen. Kriti jana randow walking us through the dynamics over at the ecb. Potentially marking the start of a historic couple of months on the continent. Im excited about Monetary Policy all of a sudden on this continent. We have headlines crossing from the Ecb Governing Council member speaking on tv3, reiterating what jana was talking about, saying they will cut in june if nothing surprising happens. Still talking about strong wage growth and that the moment for a rate cut is near. You are seeing weakness in the euro, not necessarily off the back of that because that trend was already in place. As we see more readthrough into the bond market. From the Monetary Policy to the micro. Apple shares closed sharply higher, after a report that the tech giant is preparing to overhaul its entire mac lineup with aifocused inhouse chips. Lets bring in Peter Elstrom. This a big deal for a variety of reasons. One simply being that when we talk about the ai momentum story , microsoft, alphabet, amazon have all dipped their towing into the ai story. Microsoft perhaps leading the pack. Apple has been noticeably left behind. Does this changing the game . The news here is that we are getting a new lineup of mac computers. They are not just mac computers, they are ai macs from apple. Everybody seems excited about that. It seems apple is taking this seriously at this point. They have been a step behind on some new technologies, with openai charging ahead with chatgpt and microsoft making progress. What we see now is apple is planning to introduce a new m4 processor that will be able to handle a lot of ai capabilities more smoothly than the chips in the past. Apple, for more than a decade, has been designing its own silicon to take full advantage of the software they have got and other capabilities. Now Artificial Intelligence will be a priority. This is a fast refresh of the mac lineup or the introduced the last lineup in october with the m3 chip. By the end of this year, we will see new computers, the macbooks with the m4 chip that will handle ai capabilities. Investors have been excited about this. Apple shares are up 4. 3 percent. Shares have been sluggish. He saw much of their suppliers in asia make gains. Partly because sales of these computers have been slow. There has been a drop off. In the last fiscal year, we saw Apple Computer sales drop 27 . That has led to some problems with the stock over the recent months. Now it seems there is hope they will be able to refresh the lineup of products they have and spark demand. Kriti speaking of sparking demand, it is perfect that you are based in asia because one of the weak spots of that demand story have been china. It has arguably been in the emerging market space. Samsung has taken a big chunk of market share. Could this help appeal to that customer . Apple sells a big mineable product braid by far the most important for them as the iphone. The softness you are referring to is their struggles and making sure iphone sales continue to gain momentum. They are right at the top of the market, the premiumpriced product out there. In china they have had struggles over the past year, as bloomberg has reported, there is a government ban on using iphones in a number of markets. Huawei has come back to the market in addition to samsung which has long been a formidable competitor. Huawei is coming back to the Smartphone Market in china, the secondbiggest market for apple after the United States. This new lineup of macs with the ai chips is likely to help on the computer side of the equation. But they still have some challenges on the smartphone side of the house. Kriti bloombergs Peter Elstrom walking us through that screw. Scoop. We will keep an eye on todays session and whether they lead the pack when it comes to the u. S. Stock story. There is plenty of macroeconomic data we are keeping an eye on. 7 00 a. M. U. K. Time, gdp numbers, we will break those live on markets today. Talking about the health of the u. K. Economy. Is there early signs of stagnation . At 12 p. M. U. K. Time, we get highly anticipated report from ben bernanke, the former fed chair, who has been asked to talk about how the boe can work on their forecasting story. Do we get scenarios pushed as opposed to the current charts . What to those recommendations look like . We will dive into that in just a couple of minutes with a great guest. We have the actual report at 12 p. M. U. K. Time. Then the focus goes into corporate america, specifically, it wall street banks. Citigroup, wells fargo and jp morgan kicking up the earnings story. When we talk about the rate cycle potentially ending, does that mean peak margins for a lot of banks . But coming up on this program, we talked geopolitics. Joe biden vows to back japan and the philippines among growing chinese influence in the South China Sea. More on the joint summit next and why you should care as an investor. Ben bernanke set to unveil his review of the boes forecasting models today. Michael saunders weighs in, the former member of the boe Monetary Policy committee, coming up at 6 45 a. M. London time. An interview you do not want to miss. This is bloomberg. Kriti welcome back to bloomberg daybreak europe. Im kriti gupta in london. The u. S. , japan and philippines say they are committed to free and open indopacific. The statement after a summit between the three countries leaders following chinese actions in disputed waters. Isabel, this is a story we have been watching as the leaders of japan and of United States meet, now bringing in the philippines. Can you walk us through the need the philippines has when it comes to the South China Sea . How does the summit change the game for that country . The overall message from the summit was very much that President Biden came out with this ironclad socalled commitment to the two allies in asia. Two of the most important allies the u. S. Has in asia. The reason i think he is doing that now is partly because we have seen this huge escalation in tensions in the South China Sea recently. We have seen the chinese coast guard fire Water Cannons on philippine ships. It is becoming a situation where people can be injured or possibly killed. That is something all three countries want to definitely calm down. Not only does japan also have its own separate territorial dispute with china. It is also concerned about the South China Sea as a waterway, as a massive trading nation, it wants to be part of the effort to keep the peace there, so its economy can keep taking over as normal. Kriti it comes at a time when the u. S. In particular has a naval presence in the philippines. But has a lack of funding when it comes to pacific command. The South China Sea situation, if it ratchets up further, the u. S. Is out of luck in a lot of ways. How has china reacted to this rhetoric out of the summit . We havent seen a reaction yet to the threeway summit. The reaction certainly to the bilateral summit yesterday. There was this statement afterwards condemning chinas actions in the South China Sea as dangerous and escalatory. And the reaction from the ministry of Foreign Affairs in china was not happy at all. They made formal complaints both to the u. S. And japan and said this relationship should not be something that is targeting another nation. And should not be harming another nation. They are clearly not happy. But on the other hand, we have reports that next month we will see a trilateral summit between japan, south korea and china in seoul. There is a possibility that things can be patched up. Despite these military tensions, China Remains a important trading partner for everybody in the region. Everyone wants to see the tensions calm down as far as possible. Kriti it is a fascinating story and it comes as a cybersecurity and chip security come up ahead of a crucial election cycle in the United States. As bell rentals, our tokyo bureau chief. We go to the latest in the ukraine war. Russia has destroyed the kyiv regions largest powerplant and attacked gas storage facility. It adds to concerns that the ukraines military defenses are near a breaking point. Western Officials Say kyiv is at his most fragile moment in over two years of war due to a shortage of ammunition and manpower. It comes as u. S. Lawmakers continue to argue over a 60 believing dollar aid package. The European Union moving towards unlocking additional aid almost 2 billion euros to the wartorn nation. Off of that news coming out of the powerplant, we saw a massive move in european gas, up 8 in yesterdays session. We havent seen it open in todays session yet. It will be interesting if that continues, as we wait to see what the supply chain impacts our and whether they spread broadly into the market, or if this is a oneoff. I want to check on oil because we are keeping a close eye on the middle eastern tensions. What does an iranian response to israeli hostilities in damascus actually . Look like . . We have seen biden and his allies pushback against an iranian response altogether. Nevertheless, supply dynamics are in play. Brent crude not pricing in that risk but that may change as we get headline. 85 handle on nymex crude. Both higher in line with risk sentiment in futures of the moment. Electric vehicle sales are expected to slow down this year, but slow growth doesnt mean no growth. We look into what has knocked Consumer Confidence in the ev market next. This is bloomberg. In terms of the evs, the process in the markets, perhaps the consumer moving into the evs is at a slower pace. The automotive space is not like silicon valley. This is not a space where there is a winner take all technology. Consumer gradually better educated. At the moment, infrastructure, the battery, hardware for the customer to purchase. It will be a slow adoption pace. Kriti auto executive speaking recently about the challenges in the global ev market. For our weekly deep dive into the energy transition, bloomberg expects 16. 7 million electric vehicles to be sold worldwide this year. The forecast is 22 higher than 2023 but still marks a slowdown from the 30 jump last year. The numbers point to a bumpy road for the ev industry over 2024. I want to bring in alexander, head of bloomberg nefs electrical vehicle steam. Talk to us about the slowdown. Is this a oneoff, for something that will play out with more momentum or bigger deceleration this year . There has been a lot of overly dramatic headlines in the past few months. Pointing to the slowdown, over the decline in ev sales. Looking at january and february data, those dont seem to support that thesis yet. Everyone is looking at the big ev market, china, europe, the u. S. And in those markets ev sales were for the two first months in the year still up. In china, 38 up, europe 14 , u. S. 16 up. There is an exciting story developing around emerging ev markets like india or thailand, where sales are growing really fast. Right now ev sales are not falling off the cliff yet. Kriti talk to us about the sustainability story when it comes to things like input, for example, is the cleaner ev story accurate . I asked that because you hear so much narratives about the technology, that it is cleaner now