tv Bloomberg Markets European Open Bloomberg June 16, 2022 3:00am-4:00am EDT
francine: welcome to the european market open, everyone. a minute to go the start of cash equity trading. i'm francine lacqua in zurich ahead of the meeting decision. tom: the central bank raises by 75 basis points. it is the biggest hike since 1994, risking an economic slowdown. >> i do not expect moves of this size to become from the perspective of today either a 50 or a 75 basis point increase seems likely in our next meeting. tom: stocks snap a five day rout. but the post-fed rally calls in asia. our attention turns to the snb and bank of england with both expected to keep up the focus on the inflation fight.
let's check in on these markets. futures had been pointing to solid gains, they have dared that. relief stateside on the back of the fact that investors are expected relief. the biggest hike since 1994. jay powell said hikes of that size will not be common going forward. but he kept the door open for 50 or 75 basis points in july. he stresses a relatively resilient economy as the fed downgraded their trajectory for growth, and further weakness around the jobs market which is very tight in the u.s. may be a 4% rate in terms of employment next year. the relief was short-lived. you are seeing losses in the u.k. of .6% as we look ahead to the bank of england, expected to hike by 25 basis points.
will the hawks make their case given what we see from the ecb and the fed? the cac 40 with losses of .5%, the italian ftse down .5% after we saw strength yesterday on the back of that emergency meeting by the ecb outlining plans for talks to deal with risks for fragmentation. spanish ibex down .1%. there was a lot of money moves into the treasury curve in the u.s. yesterday. some of that has come up today. the u.s. two year 3.27, update basis points. the s&p with losses of close to 1%. they ended up one and a half percent yesterday. nasdaq ended up more than 2%. it looks like there will be losses in store for u.s. markets according to these futures. the italian 10 year remains in focus because we know how central it is to the thinking of
the ecb given the emergency meeting yesterday. there was some relief in italian bond markets on the news that they are pulling together a plan to deal with kit jucke from suction telling us that he sees further downside. francine: actually i speak to a lot of analysts and commentators who say this is an exciting snb. if you look at the feverish hiking when it comes to central banks, what does that mean for the snb, we are expecting them to put the spotlight on inflation. when you look at the numbers, it is clear that inflation in switzerland is nowhere near what we are seeing in the euro zone, it is around 2.9%.
if you look at volatility in the swiss franc, it does not happen often that currency traders get excited about an upcoming meeting of the swiss central bank, but it is at feverish global tightening backdrop that is playing out. one trader told me it is all going to play out on swiss yen. let's go to our bloomberg mliv managing editor mark cudmore, what he looking at? mark: i'm looking at the fact that it is pretty bleak out there. we are not seeing great price action. the white line is the nasdaq futures. the yellow line is bitcoin. you can see that there has been no real bounce, it is very much of the dead cat variety of downside there. the next move again is ultimately for lower. if you look at the fed's meeting last night, there was nothing there to take away and go that has given me something to buy off of. we go back to underlying trends,
the underlying backdrop is growth is slowing, financial conditions or dining, we have a war, an energy crisis, a food crisis. the macro dropped rig -- backdrop is very bleak, and some stocks with frothy valuation still have a lot more downside. have we seen the capitulation? no, we have not. i think more pain will come as soon as the next two days. tom: more pain the next two days, the dead cat bounce the way that is being articulated by our mliv marketing editor. the ecb convened an emergency meeting after italian yields surged to the highest since europe's sovereign debt crisis. we are also watching the bank of england, set to deliver a fifth rate hike today with officials expected to stick to a steady path amidst global chaos. we will get to lizzy burden who
is outside the boe in just a moment. first, let's bring in maria tadeo in brussels who was watching the surprise waiting for the ecb. what exactly did madame lagarde and company deliver yesterday? maria: it was quite a day, wasn't it? when you look at the statement, they reaffirmed the flexible nature of the pepp program. that was very expected. i think the real take away from that statement was that pledge to conclude the completion of a new anti-fragmentation tool. a lot of this in a week in which we saw real jitters in the periphery, for articular -- particularly across the btp's. we don't know the timing of the tool or the structure of it. the question is the type of conditions, the conditionality that will be applied to it.
i had a contact to encapsulated the situation well yesterday. when you look at this statement, it doesn't give you reasons tp o buy, but it does not give you reasons to sell either. if you are the italian bank, that situation is probably pretty good. the real take away will be what is the conditionality, but also what does it mean for the rate hike path, will this be used as a way to say we now have been no fragmentation tool, let's go faster on the rate hikes. francine: that concern is that markets will just keep on testing the resolve of the ecb until they get something. let's also go to lizzy burden outside the bank of england how is the boe going to balance recent economic data, because the data is going in two directions? lizzy: you are quite right. it is not likely to be the same fireworks as we have seen out of the fed and ecb.
the debate on fred nadel street is more between 25 and 50 basis points. cpi is running at 9% in the u.k. and expected to hit double digits later in the year. that is swallowing wage growth and inflation expectations are up. the chancellor rishi sunak thinks the banks recent decision has announced more fiscal support. the other side of the ledger for the doubts, the economy has unexpectedly contracted. consumer confidence is down. the housing market is starting to slow and you could say the same for the labor market. signs that it is starting to lose some of that tightness. it is a recession in all but name in the u.k., that's why we are expected to see officials take the cautious path. 25 basis points and take the key rate to 1.25%, an unprecedented fifth straight height from the boe. tom: lizzy, to what extent is the fed decision and the meeting
of the ecb put the pressure on the boe, and in fact, arm the hawks to push for a bigger hike? lizzy: it might bolster the hawks. the hawks who could come out would be catherine mann, jonathan haskell and michael saunders. they have voted for a 50 basis point hikes in previous meetings. you might see the deputy governor david ramsden joined them. he was pretty hawkish when we spoke to him since the last meeting. surprise the markets, moved the pound. that was before the rishi sunak package. it will be interesting to see if there are revisions to the growth and inflation forecast. and to see any hints of what the future redpath could be. our economists reckon you will see 25 basis point successive hikes until november and pausing at 2% there. francine: thanks so much, lizzy
burden outside the bank of england. i'm here in zurich covering the snb for you. investors are wondering how long the governor thomas ordan, can push against this global tightening cycle. switzerland has the lowest interest rates and the world, -0.75%. they have not moved in more than 10 years. can they allow be f -- the franc to appreciate a little bit to deal with inflation sooner rather than later. tom: even if they don't increase rates, we will be watching the language around the swissie from thomas horton & co. given what they said about the valuation of the swiss franc in previous meetings. let's get to some of the corporate movers of the day. veolia in terms of the regulatory front, this french environmental services company
saying it plans to sell the suez u.k. waste business. it is in the process of buying up the suez business in the u.k. this is a drastic decision in response to what they call intransigence from regulators here and they deplore the lack of understanding from regulators. asos with a really big hit after revising down its profit guidance. it had seen sales of 10-15%, it has now cut back to 4-7%, the online retailer shaftesbury down more than 6% after agreeing to an allshare merger with capital and country. the stock is lower by more than 6%. more of a corporate stories as well as the macro for you as we walked through the rest of this hour. plenty more coming up with the markets here in europe lower by
inflation has again surprise to the upside. projections for inflation this year have been revised up notably. in response to these developments, the committee decided that a larger increase in the target range was warranted at today's meeting. clearly, today 75 basis point increase is an unusually large one and i do not expect moves of this size to be common. either 850 or 75 basis point increase seems most likely at our next meeting. francine: the fed has made its bumper move hiking 75 basis points, the biggest rate hike since 1994. the chair jay powell reasserted the fed's commitment to reining in price pressures indicating another big move in july. tom: for analysis, we bring in the cohead of investments at ccla, charlotte, let's start with that move by the fed. not a big surprise after they
cured the markets up for this in the last few days. what is your assessment of what you heard from jay powell, that decision around 75 basis points, and what it means about the fed's ability to contain inflation? charlotte: they have had to go for the big guns in are going to have to continue pushing interest rates up. they have a stronger economy which gives them a little bit more flexibility. long-term the rate is still looking low on those projections, there is potential to come up from there as well. francine: a lot of the market move happened before the decision, what happens in terms of market correction from here? are they going to test the way central banks deal with inflation? charlotte: the big worry for markets is going to be thinking
about not do rates move up, but are we pushing the economy into recession. that's been the big debate. for the u.k. and europe it is a much more difficult situation because of ukraine and the gas prices. in the u.s., the risks of recession are going to be increasing because you are thinking about credit and the mortgage market, housing and whether those move into more difficult areas of the moment. on employment is low, the consumer is good in terms of spending. tom: 3.4% by the end of the year, 3.8% is significantly about the new for rate in the mid-two's, what does that mean for the rewriting of equities? charlotte: we have moved a long way, on the s&p we moved up about 20% last year. is it cheap, i think there is scope for it to move further down. francine: how much further
charlotte, doesn't need to go down for it to be cheap? [laughter] charlotte: that's the thousand dollar question. another 10 or 15% possibly to move down, it's going to depend on individual stocks flashing cheap for you, i think there is still downside risk there for markets. tom: the focus on margins has been central for investors this year. the likelihood of further downgrades as we look into 2023, how are you assessing the impacts on earnings? charlotte: for us, there are areas like consumer staples with pricing power that seemed to be dealing well with it. pharmaceuticals has been a safe haven, the trouble is you need to build the pipelines. telecoms have done well as a sort of safe haven. the problem is if you move to
defensive, as the economy begins to recover, you don't want to get to bid up in terms of the valuation. francine: charlotte ryland there, cohead of investments at ccla. we are about 12 minutes away from the snb meeting. we are in zurich, it is our new office, the excitement is palpable to see with they do in about 10 minutes. let's get to the bloomberg business flash. angel: air india is said to be asking pilots whether they want to be trained to fly airbus 350 jets, indicating it intends to operate the model. the airline is looking to renew its fleet under the new owner taught a group. -- tada group. air india may introduce the a450 by the first quarter of 2023. they may order 20 aircraft.
cathay pacific is looking to hire staff as it gears up for a recovery in aircraft travel. the ceo says the airline plans to bring in 700 pilots and 2000 cabin crew. he says cafe wolf lied to more than 60 destinations by the end of this year. bhp group will scrap the exit from thermal coal. they will extend the life of the mind from -- life of the mine. it has been reviewing its options for the mount arthur mine in australia. it said on thursday that it did not attract a suitable offer for the asset. is the end of an era for revlon, the cosmetics giant has filed
for chapter 11 bankruptcy, unable to manage its heavy debt load amid the supply chain crunch and steep inflation. they have liabilities of as much as $10 billion. they have faced years of declining sales as consumer tastes change. that is your bloomberg business flash. tom: angel feliciano in london, thank you indeed. the bank of england is set to deliver a fifth consecutive rate hike today, with officials expected to stick to a steady path amid concerns about a slowdown in growth. more on that story next. this is bloomberg. ♪
tom: welcome back to the open, we are 23 minutes into the european trading day. the relief yesterday short-lived, losses of 1% across the stoxx 600. s&p e-mini's pointing to losses of 1.5%. the fed and the ecb yesterday and today. the bank of england is set to deliver its fifth consecutive rate hike today. the decision comes against the backdrop of a global --in markets.
charlotte ryland with ccla investments is still with us. is there an argument that given the fed response yesterday, and the ecb has given itself some space to go harder on hikes with plans for the anti-fragmentation tool, that the boe has to play catch-up. that they will have to step up rate hikes because of the pressure on the pound? charlotte: they have had a weak print, i imagine it will get worse the second half of the year. the bank of england has talked about 10% inflation coming through, and we have another big gas price in the second half. there is the short-term pain of pushing operates, but if you let inflation get out of control and we get back to the 1970's, that is a much much worse situation. francine: are there parallels
with what we live through in 2008, are we going to see a credit crunch, is read -- rev lon a case in point? charlotte: i think if you have got yourself in a precarious situation in terms of balance sheet and not generating cash flow, then i expect we will see some casualties beginning to come through. it's important for investors to think about balance sheets of the companies they own and make sure they have the dry powder and flexibility to deal with difficult situations. tom: you have a view on the pound and when it may get back to pre-brexit levels? charlotte: against the dollar it's clearly been very weak, the dollar has been strong against every currency which is a reflection of the interest rate policy and the fact that it is a safe haven currency. in terms of starlink, there
isn't great enthusiasm in the markets for u.k. assets at the moment given the economy and the lower interest rates. there is scope for it, we have talked about parity which is extreme, but down pressure to me. francine: charlotte ryland, the cohead of investments at ccla investment management. we will have more throughout the day on the stories. the snb predicting no change from the central bank. that's coming up in a couple minutes. the suspense in the markets makes it one of the more exciting meetings for the snb in recent history. tom: the excitement growing ahead of that decision. francine is on the ground to monitor all that. we will be speaking crypto with the binance ceo zhao changpeng. that interview was next. -- is next. this is bloomberg.
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francine: welcome back to the open, everyone. 30 minutes into the european trading day. the fed takes aim at inflation, raising rates by 75 basis points, the biggest hike since 1994 risking an economic slowdown. >> i do not expect moves of this size to be common. from the perspective of today, either a 50 or 75 basis point rate increase seems most likely at our next meeting. francine: stocks snap a five-day rout, and yields slide as powell soothes wall street. attention turns to the bank of england which is expected to keep the focus on the inflation flight. we get the snb decision imminently, extremely interesting because they have
upended the markets. there was speculation they were going to raise rates, raising the policy rate by 50 basis points to -0.25%. the markets were pricing in a 25 basis point hike. if you look at inflation in switzerland, it is not that huge. they seem to be worried about this global tightening of policy across the world. the swiss franc 1.02. this is one of the coolest thing we do, speaking right behind me in our new zurich bureau, it is all about how thomas jordan, the chair of the snb explains this rate hike which no market was expecting it to hike by this much. he is also saying that this could continue. we will look exactly at the language from the snb and i will bring it back to you, that's our
newsroom speaking to the snb right now. we will get those headlines and i will break them on air for you, tom. tom: we talked about the excitement. economists were not expecting a hike, they were not expecting 50 basis points from the snb. there had been previous concerns outlined around the swissie strength. it has moved significantly on the back of this decision by the swiss national bank, the importance of that conversation francine will be having with thomas jordan later today. some prices from central banks just keep jumping. -- coming. losses of one point 2% across the european benchmark. there is money moving out of treasuries stateside. in terms of the parents is the last few days, a five to nine basis point move across the
yield curve, but in peripheries relative called on the back of the surprise meeting from the ecb. the dax is down almost 200 points, and the ftse 100 down 1.2%. the gdp and the pound under pressure ahead of the decision by the boe at midday u.k. time. let's see how things are looking across sectors as investors readjust to a federal reserve that has reiterated its commitment to getting back to the 2% target of inflation, 75 basis points yesterday, the biggest hike since 1994. jay powell did leave the door open to 50 or 75 basis at the next meeting. i moved to havens -- a move to havens. initial gains around energy, gas prices has spiked on the decision by gazprom to get supplies to germany. red across the screen in every
sector, retail taking the heaviest hit. asos really being hit by the cost of living crisis, downgrading their sales forecast to between four and 7%. let's get back to the snb and francine who has been digesting this move. francine: the swiss national bank unexpectedly raising rates by much more than even the most bullish forecasts. they raise rates by 50 basis points. a reminder that this is the first interest-rate hike from the snb since 2007. officials are worried inflation in switzerland could get out of hand. inflation figures are well in control, 2.9% are the latest figures we had. mr. jordan, the president of the central bank, joining the global bandwagon of tightening monetary policy. he has not ruled out tightening again. it was interesting from yesterday he got a call from his former professor saying this is
the time not to worry about how high the frank goes, -- franc goes. this was just hours after the fed was pretty aggressive intensifying its own fight against inflation. it also comes after the ecb also finally acknowledged that inflation was one of their biggest worries. you wonder whether we are at a tipping point, tom, which globally puts extra pressure on central banks. there were 20 analysts from the snb, only one was expecting a height, that was citi. you have this tension between economists and markets, and once again, the markets were right. francine: the euro-swissie currently trading at 1.02. the euro lower by 1.4% on the back of this surprise we by the snb. you are also getting movement in the bond markets as well. the italian 10 year currently at
3.88, yield is up six basis points. an 11 basis point move on the u.s. two-year, and the u.s. 10 year at 3.37, i move up of around nine basis points as we continue to digest the surprise move from the swiss national bank. let's get to the cryptocurrency space, it has been the key risk for arbiter. -- barometer. some were given a second chance at richards after the past blamed out. zhao changpeng, mike novogratz and a handful of other billionaires several times over, they are now seeing fortunes under pressure at a pretty astonishing rate. joining us now to discuss the crypto space is zhao changpeng,
thank you for joining us this morning. what do you make of what we have been seeing in the crypto markets over the last few days, and how maligned it is a fed tightening financial conditions globally? zhao: it's pretty normal for markets to go up and down. we see this in stock markets, too. netflix is down 70% as well. is part of normal market behavior. francine: good morning, i'm in zero and you are in paris. i love your twitter, and i love that you are tweeting about some of the places that give you extra regulation. the bloodbath in crypto has put some of your rivals in trouble, you are hiring, a lot of your rivals are not. zhao: this is the first full cycle that miners are going through. this is my first pair cycle.
we have always been quite verbal on spending. i'm not saying spending is bad, advertising and stadium rights are great, but we didn't do that. and also, hiring has always been our -- not advertising. the user demand has always been very high. we have always reserved cash for hiring and we continue to do so. when other companies are doing layoffs, now the talent pool is much larger and people are much more levelheaded in terms of compensations they want, etc. so now is actually the best time to hire. now is also the best time to do mergers and acquisitions. so we are also looking to do that. in four markets, raising money is better, investing best exactly very hard. now in a bear market we see a lot of good deals on the table now. tom: let's unpack that a little bit. where are you seeing deals, what
do you want to add and what are you looking? -- looking at? zhao: i can't disclose specific deals. there are a number of strong projects that will continue to keep going and we want to invest in those projects now. francine: what kind of projects are you looking at though. i know you can give specifics, where are you seeing the hot trend that will make binance grow? zhao: our approach has been anything that helps people access crypto. it doesn't have to be an exchange or trading, it could be information websites, or decentralized well it's like trustwallet, or other de-fi projects. outside of crypto we are investing in traditional media. the twitter deal, i don't know
exactly what is happening there, but we are still hoping that will come through. we are committed to following through on those deals. tom: why would you still be committed to twitter? it doesn't seem like elon musk is that committed, do you put forward four or $500 million for this? zhao: so what? he is leading, we are following. if you go through the deal, we are committed. if he doesn't, then i think we are all. francine: would you be disappointed if you didn't go through with it? zhao: a little bit to be honest. we are hoping to be able to contribute to twitter somehow. tom: in terms of the broader markets, i want to get back to tara -- terra usd, and celsius, do you see this is a healthy washout in the arguably probably your - - frothier parts of the center?
-- sector? johanna: zhao: we hope the damage would be much smaller. but that is not how industry works. sometimes the washouts are pretty significant. people get hurt and we would've like to avoid that. when you are in a bear market, a lot of people are here for the short-term money and are not good it -- good at managing risk. it's not like we want to see it or we don't, it just happens. francine: there is a lot of competition in the finance industry having global partners so that if you want to open a crypto camp, how difficult has that been? what is your global banking partner? zhao: so far as has been
relatively difficult for crypto businesses to open bank accounts in most countries. on this point, the u.s. is leading. cryptocurrency exchanges can deduct from the users' bank account each month. probably only korea can match that integration with traditional banks. but it is limited to only a few banks. this service is not widely available. we would very much like to see that being expanded, and we are seeing that in multiple places. in the past six months or so, binance has got licenses in multiple tier one jurisdictions. in the u.s., binance four or five new state licenses in the last six months. that should open more access to traditional banking services. but i think it is definitely changing for the better. francine: cz, thank you so much, the chief executive binance.
what are you most looking forward to in paris, you are often in paris and you love it. zhao: we now have a french registration for the crypto exchange, so i am spending a lot more time here. i want to attract more of the crypto industry into paris. francine: the chief executive of binance. i am here in zero should looking at the s&p, - zurich looking at the decision for the snb, they unexpectedly hiked by 50 basis points. the markets were expecting some kind of move more in line with global inflation expectations .officials inflation will get out of hand, it is clear that by raising policy rate by 50 basis points
tom: welcome back to the open. 47 minutes into the european trading day. losses of 1.4 percent across the stoxx 600. nasdaq futures pointing to losses of more than 2%. superreturn international is underway in berlin. dani burger is on the ground. >> thank you so much. i'm joined by johanna barr, global cohead of partner services at advent international. you just closed out your largest fund ever, $25 million, what are the opportunities to put that money to work?
johanna: we are very grateful to our investor base for supporting us. we have a large fund deployed but we want to be thoughtful in how we deploy that capital in these uncertain times. we will look at opportunities bottom up thinking through the different subsectors. dani: what do conversations look like with lp's right now in terms of the strangeness we are living through? johanna: how do we see things, what is inflation doing to our companies, which we think about macro? we need to remind them and ourselves every day that we are micro investors at the end of the day. we need to find far next fund 35 companies that are really successful in their sectors and subsectors. when we are diligent in our opportunities, the macro is affect our decisions, but can
the micros pass on cost to companies -- costs to consumers and can they thrive? and you can diligence that, you can figure out have they been able to pass on price increases and can they continue to maintain their margins. dani: we were talking about how you see the day-to-day of companies versus a quarterly per public companies, do you see signs of the consumer spending less than inflation catching up? johanna: i think we will he see a hit to consumer confidence. it's been predicted by the like. but companies yuan, does that impact your companies and for the new companies we want to buy, is it a product the consumer really needs and wants?
dani: your day today interacting with investors. the sec had recently proposed greater transparency with fees and performance for private equity managers, does the industry need an overhaul? johanna: it is in our interest to be as transparent as we can vis-a-vis our investors who are deploying stakeholder and pensioners' money, we have always been at the forefront of cooperating with sec and institutional groups and being transparent when it comes to our own fee disclosures. we always want to make sure the industry is best in class. dani: we started this conversation about the record fund raise. one of the natural questions, and can't be done again -- can it be gone i -- be done again?
johanna: we have raised a lot of capital in the last 12 months. i'm positive, i think it still has room to grow. there might be ebbs and flows in terms of record funds raised, but it has proved that it has been a good returning asset class. dani: do you see impact from this elephant in -- the selloff in public equity affect private? johanna: it might or it might not. when private equity holdings increase, the valuations of public markets can lag. you can have portfolios actually getting too large. it's not a criticism but it means that cio's are saying we should slow down on the private equity side to allow the
rebalancing of their underlying portfolios. dani: there has been passed due seven point investors cap-- use of quant investo saying you are gettingr paid to leverage and s&p 500s fund,, and that you are tricking investors, is there any validity to that? johanna: if you look at the horizon, private equity has outperformed, and ultimately we control what we do with our companies over five your whole periods -- hold periods or longer, and can navigate these
companies out of the glare of public quarterly reports. francine: our dani burger add superreturn in berlin. we had that surprise hike by the snb just moments ago. we were expecting some talk about inflation or 25 basis point hike, only one economists predicted that, but no one was expecting a 50 basis point hike. this goes to the angst we are seeing in central banks across the world. i think these whispering shut up about 2% -- swiss franc shot up about 2% off the back of that. let the fright appreciate a little bit more to make sure they deal with inflation. tom: 2.9% within the global context sounds nothing, but there are reasons why it is lower on a global level but has
been edging up. looking ahead to the ecb, we know they left the door open to 25 basis points in july. is the snb maybe starting to bet that the ecb goes higher? you are seeing a stronger swiss franc on the back of this move, 1.02 is euro-swissie. when it comes to the equities in switzerland, the smi and is now down 2.5%. movement in bond markets, italian btp's are relatively well behaved, yields up five basis points the italian 10 year. and yields elevated when it comes to the u.s. treasury curve as well. is the equity markets with the strain is felt. futures stateside pointing to losses of around 2%. francine: now with the last couple of hours, the leaders of
france, germany and italy have arrived by train in kyiv. they are do hold talks with volodymyr zelenskyy. our executive editor chad thomas will join us shortly to go through that. tom, do we have pictures of that extremely important showing of hands, and it's all about gas and gazprom. and it's all about what we need to do shortly. why we do a quick market check and we will get chad thomas set up? tom: the geopolitics are fascinating because wheeler the three leaders to whom president zelenskyy has been more critical. macron caused controversy by suggesting maybe ukraine would have to give up some of his territory. the primacy is there in markets, nasdaq futures pointing to
losses of more than 2%, wiping out the gains you saw yesterday for that index. s&p emed is pointing lower by 1.8%. central banks are hiking by 50 basis points. francine: we are joined by chad thomas, he oversees our government coverage. three world leaders in kyiv to show support, will there be backlash from russia? >> that is what we are watching for. scholze has been criticized for not doing enough on the military front. macron has faced comments about not wanting to embarrass russia which is not gone down well in ukraine. we had the gas cutouts from gazprom in the last couple days. we will be watching that very closely. francine: this is bloomberg. ♪