to the start of cash equity trading. house speaker nancy pelosi reaffirms u.s. support for taiwan as tensions ratchet higher. fed officials threw cold water and step away from the current tightening cycles. the latest on a strong port for europe's lenders. looking at futures, we are seeing a lot of stabilization. well into treasury yields, an interesting story of what happened. officials pushed back against the narrative and financial markets over the last week. they were envisioning a pivot away from tightening. that basically led to a lack of liquidity in the markets yesterday, a lot of volatility. this is futures, much more stable. we want to look at sovereign bonds, the italian two-year at

1.3 12. that election coming on the 25th of september. they will -- equity indices stabilizing somewhat. the ftse down .2%. we have to look at treasuries, we look also at what's going on in the commodity complex with opec. we could see a short meeting. over in australia, pretty much study as they go after the tumultuous concern we saw yesterday regarding taiwan. in taiwan, we are seeing some of the roots, trade shipping, the taiwan strait, despite a lot of -- nothing escalated as some traders were worried about.

s&p futures game .2%. u.s. 10-year yield, to's -- 2.717. inflation in turkey. we think we have about here, turkey, july consumer prices rising 79%. it is estimated to rise 80%. this is acceleration. they are still expecting this to be months away from peeking. -- peakimg. we haven't seen this level since 1997. the central bank -- if you look at what happened to turkish lira in 12 months. let's go over to bloomberg mliv. mark, you are looking at swings in haven assets. mark: i am.

we go back to the days -- turkey and currency crisis. it has issued a new turkish lira and pop -- chopped a couple of zeros of its currency. let's hope we don't go back to that world. i'm looking at haven assets, the short-term numbers last few days, trying to bring back a big picture in the short term. this time, focusing the last few days on price action. the blue line is 10-year treasury yield. they got close to 2.5% level. it was getting people excited. dollar-yen was going down about 130 level. unwinding the big macro trades this year, which were higher yields and a higher dollar. yesterday morning at about 8:00, treasuries started spiking.

this was a couple of hours before pelosi landed in taiwan. we did not know she was going to land in taiwan. it was before the hawkish turn from the fed. they started realizing these yields are too low. it does not make sense. we have an inflation problem, not a growth problem. dollar-yen, where do we go from here? i think ultimately, we might get divergence between these. i think yields, the u.s. does not have a recession right now, it an inflation problem, yields need to go lower. two-year yields need to go a lot higher. dollar-yen might still trade around the concerns and asia, and the fact we are seeing geopolitics with the u.s. and china. the dollar-yen might like the banks. francine: we'll have plenty more

from mark throughout the day. our top story, nancy pelosi has become the highest ranking american politician to visit taiwan in 25 years. the house speaker pledged support to the island. >> to date, our delegation came to taiwan to make unequivocally clear we will not abandon our commitment to taiwan. we are proud of our enduring friendship. francine: let's bring in bloomberg's chief, let's -- we had the press conference, what has been the main upshot of plot -- pelosi's trip so far? >> that is the question many people in taiwan have been asking themselves. taiwan is often excluded from the international conversation. people here often welcome high-profile visits to taiwan. hello see's visit has been met

with such a barrage of fury from the chinese side, which included a laundry list of economic measures against taiwanese companies and industries as well as the announcement of military measures as well. the people have been asking themselves, is this trip really worthwhile for us? that's why we are watching closely, nancy pelosi when she met with the president of taiwan, what her comments would be. she strongly came out and laid out the fact that the united states will not abandon taiwan in the event of a clash with china. francine: how is china responding? >> it's been more extreme than many people expected. we seen a number of economic measures, i think the most consequential one is the announcement of military drills

surrounding taiwan over the coming few days after nancy pelosi has left. part of that has been a warning to shipping and aircraft to avoid these areas during the drills. we are now watching closely to see what kind of disruption this causes to the shipping industry, that could do without this disruption. francine: we will see the ripple effects. the taipei bureau chief simpson alice. let's get the key market drivers. our -- thanks for coming on this wednesday morning. a lot of talk about foreign policy, which hasn't really changed. the timing of it makes investors worried. we are talking about possible supply chain disruptions in the taiwan straits of does not impact european equities? sharon: it adds a premium.

i don't think it could have a huge impact on european equities. it is an incremental additional risk. francine: we also had this big move in treasuries yesterday, after we heard fed speakers being more hawkish about what we could expect. how would you characterize the market moves in general right now? sharon: i would characterize it is quite complacent really. on inflation and growth. we have had, until the last day or two, quite a strong rally in treasuries, in bonds. you seen yields come back down. as if inflation is the problem. we still have a relatively strong labor markets.

all those things, pressure on the supply chain, and that turkish inflation figure. francine: you see a point in the credit market where there is a big risk that could affect the equities? sharon: absolutely. equities have been complacent to. obviously, there was a selloff earlier this year, we had a rally again, through july. i think there are issues out there, geopolitical issues, the inflation problem. growth is clearly slowing. i think there's a bit of complacency in their.

in those markets are not taking in account the risks. francine: a complete gas embargo from russia, what does that mean for your appetite for german equities? sharon: if we go back to three weeks ago, this is the conversation. now, those conversations have died down. that fear has produced that affect. i'm not sure why. there still gas coming from russia into europe. there is still the risk from russia. the whole of europe already slowing anyway. francine: talking about

earnings, did any of your earnings get more conviction and some of the things he wanted to buy? sharon: the energy stock came out with passive earnings. and prices haven't come down the last few weeks. very good earnings, excellent cash flow. there announcing buybacks. in some of these risks on the geopolitical side we've been talking about. i think those stocks have been oversold. francine: thank you so much, the golden section -- goldman sachs equity director -- managing director. we are also keeping an eye on

the china daily briefing. as the word says, this is a daily briefing, they have been -- they have the tops spokesperson of the chinese spokesman doing it today. yesterday, we were closely monitoring. i'm sure she will talk tough on the reform policy. we'll see whether she gives us a more insight on what those military drills could look like. coming up, the message from officials, they say capping inflation remains our top priority. this is bloomberg. ♪

>> we don't talk about a recession per se. it is are we going above or below trend. my forecast for this year is that we will be below trend. that is necessary in order to get price increases, inflation under control. >> i would like to see the policy rate get to 3.75 24% this year. -- 3.75% to 4% this year. i think inflation has come in hotter than expected during second quarter. we are going to have to go a

little higher than what i was saying before. francine: that was cleveland fed president. the federal reserve officials have been a powerful message that their top priority remains bring down inflation and there is still a long way to go. sharon, we talked about the yield curve, which valerie put together, and the kind of movements which could indicate a lack of liquidity that we saw yesterday in treasuries. what does that mean for the dollar? sharon: i think the dollar has to state super strong throughout this year. we think the dollar versus the euro for example, you could get back to parity. we hit that in july, i think it could go back down below parity

with the dollar. just because european growth -- u.s. is slowing to. but europe more. francine: are you expecting a big correction in certain parts of european equities because that is being discounted? sharon: yeah, do i expect -- i think overall the european equity market does long-term expenses. -- below long-term average, earnings are pretty high right now. margins have been high. one of the -- it is a long dollar earnings. i do think european companies are vulnerable to a longer session. ecr forecasts of we do expect a

recession. we expect growth to come down. next year, we've got 0% earnings growth for next year. that probably means a slightly lower valuation the where the markets are trading today. francine: what do you do in the u.k., unable to put their faith -- the have a new prime minister. sharon: we don't know who that will be quite yet. we don't know what policies they will be implementing. the u.k., like the rest of europe is seen slowdown. we see rates start to rise. you're already seeing a rise, another present energy.

those of tim growth a bit. the u.k. is not as close to europe as recession, but seeing that slow down as well. francine: what makes up the ftse 100, does it matter towards equity? sharon: i think the ftse 100, it's a large-cap index. blue-chip companies, like energy stocks, even big banks. a lot of national companies. economic growth in the u.k. is less important. there will be some big domestic companies as well, and the pass it on to the u.k. consumer. francine: nothing has been priced in? has the news been priced in at all? sharon: absolutely.

i think it has been priced into some extent. people are aware, interest rates rising, growth is weak. all of them -- i don't think completely. i think there big global stocks that put dollar earnings in a better position. francine: thanks so much as always, sharon bell, goldman sachs managing director for european equity strategy. we go back to that china daily briefing, we have the tops spokesperson from the chinese ministry of foreign affairs saying that the nancy pelosi trip as a provocation. she also believes this is an infringement of sovereignty. the house speaker, nancy pelosi, just hours ago pledge the u.s. would not abandon taiwan.

reaffirming u.s. support for the democratically elected government in taipei, despite actions from beijing. you can see some of those military actions already rerouting or having ripple effects across the supply chain. it is also prompting detours of energy ships. coming up, customers keep peeling rides and ordering takeout food in the face of inflation. we get the numbers next. this is bloomberg. ♪

francine: welcome back to the open. 23 minutes to the european trading day. these are your european stocks, pretty much flat, they stabilized after yesterday. some of the stocks on the move at the open. we start with, they outline new revenue targets, they pledged higher profitability as rising interest rates and global trading rally provide a tailwind to the outgoing chief executive. 2.8%, off these estimates. we are seeing pressure on the share. laura wright was talking about

costs. they did see higher revenue but also higher costs. commerzbank, close to the german economy, if russia were to completely stop the gas applies to europe, that would plunge germany to severe perception -- severe recession. automakers getting 1.8%. on tuesday, the second quarter results showed the firm achieve positive cash flow for the first time. airbnb's earnings report, will have to break this down. laura, one is goods of the other not so good. laura: the market like what he heard. which is why the stock closed up almost 90%. although uber is still making a net lost -- losses a business,

they are showing investors it is on that journey toward profitability. my chart shows growth. the orange line is mobility, which encompasses ride-hailing. uber is on the journey to recovery from the pandemic. uber was able to combat a driver shortage, increasing driver supply year-over-year, by increasing wages, which have been paid for by customers in the form of higher prices -- higher prices. customers have so far not been deterred. it still counts for the largest proportion of growth. uber in the long term sees deliveries flatlining rather than decelerating. at present, sales are slowing. the blue, it's freight business launch in 17. revenue grew over 400% year-over-year. francine: where expectations too

high for airbnb? laura: it was punished in after hours trading by the market. it was a beat on earnings, record revenue in the third quarter. it was amiss on bookings growth and subdued forward guidance for booking. investors want to see travel companies taking advantage of this voracious demand for traveling. another bright spot was the height booking prices. perhaps showing customer still willing to pay more. laura: francine: coming up, nancy pelosi is in taiwan. we get the latest on her visit to taiwan as well as the ripple effect for global markets next. this is bloomberg. ♪

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francine: welcome back to the open.

here are your top stories. standing with taiwan, house speaker nancy pelosi reaffirms u.s. support for the island is tensions ratchet higher. treasury yields search after fed officials for cold water over stepping back from the current tightening cycled. a check on the indices, we have to talk more about inflation in turkey. it was up some 79% year on year. we think we have it bad here, look at turkey in terms of inflationary pressures. european stocks pretty much flat. the ftse down .2%. this is a story of the commodity rich big companies on the ftse. we also have opec, that meeting today quite short-lived. the main industries we are watching the most, technology gaining 1.4%.

we had some good stories in the u.s. for earnings and some that were not so good. laura wright was bringing us up-to-date on that. real estate higher. and health care on the way down. we are also looking at the china daily briefing. it depends on the ranking of the government official that does it whether it is important or not. given the new surrounding taiwan, it is a person in charge of the foreign ministry doing it today. once again, relates that this is a provocation in taiwan says china violates international trade norms. there is an -- there's a lot more tough talk from china. u.s. house speaker nancy pelosi has become the highest-ranking american politician to visit taiwan in 25 years. she spoke in a joint press conference earlier today. >> we want someone to always

have -- i want to always have freedom with authority. they are not backing away. francine: policies visit has prompted china to announce missile tell -- missile tests and military drills. taiwan's president says the island is open to constructive dialogue. >> taiwan has always been open -- we will work to bring about stability and peace in the region. francine: for more on all this, let's bring in bloomberg's executive editor for china. is there an overwhelming feeling that maybe this will get back the two superpowers to talk, it is a constructive or is the timing wrong? >> i think this is probably turn

for the worst. in this relationship, there issues around trade, china's support of russia and its invasion of ukraine. now we are talking about military exercises, warships, jets, live fire drills around taiwan. it has taken a turn that is much more dangerous. i think it will be sometime before pelosi comes into action. she is leaving this afternoon, after that we have the live fire drills. i think it will be up to the diplomats once as drills are over to see what they can build from that position. francine: what can you tell us about the visit? first of all, our ordinary taiwanese behind this, and we know her schedule for the rest of the day? >> yes. nancy pelosi met with taiwan's president earlier today.

she is reported to meet tsmc's high executives later today. that has not been confirmed. i think that is on everybody's top radar right now, tsmc is the semi -- largest semi conductor manufacturer in the world. any meeting like that would be something we want to keep tabs on. after that, nancy pelosi would also pay a visit to human rights activists. that is also yet to be confirmed. then she will leave taiwan early in the evening and had to soul -- head to seoul. francine: the fact that taiwan is so important and terms of chips, also shipping. the -- the way to calculate the

ripple effect of the military drills on the supply chain? >> what was seen already is some of the lng shipments that come through that part of the world are taking a different route. the ships themselves are slowing down so they can change the route they are on. the way they are going, mostly from the south china sea up to customers in china and south korea and japan, obviously there's a lot of cargo shipments that come from manufacturing on the chinese because they go south toward europe. some going east toward united states. that shipping looks like it will be impacted by the live fire drills land for the fourth through the seventh of this month. we also had the chinese authorities warning airlines to avoid areas for drills saying their danger zones. we have cancellations of flights and rerouting of flights.

asking pilots to take 30 minutes of extra fuel. francine: going back to the fact that pelosi is probably visiting tsmc and these global tech imports there are so important to the u.s., what is taiwan hoping to achieve with the visit? >> that is a good question. that is actually the question that the taiwanese are asking themselves. like you mentioned earlier, pelosi, during her talk, she made it clear that the u.s. would not abandon taiwan. and she praised taiwan for being one of the freest in the world. right now, after she leaves, we know the u.s. is being very supportive of taiwan's democracy. the question is, what are china's actions next.

all the military drills, and what that will mean for taiwan and will china impose anymore stricter economic bands and military actions against taiwan? francine: john's of the other question, we saw this, it was pretty murky between nancy pelosi and president biden saying i wouldn't suggest it, but i wouldn't say no. did they make a difference between biden and house speaker? francine: at this point, beijing is not making a difference. u.s. administration has argued that beeker pelosi makes her own decisions about where she goes. beijing does not see it that way. she is the third ranking official in the u.s.. second line in terms of succession from the u.s. presidency. she has arrived in taiwan on a military aircraft. how is that not an official visit? i think that is the semantics at the moment. it is obvious china is taking aggressive measures economically

and militarily, we might see some diplomatic actions as well. it is going to be up to the u.s. to try to come up with a measured response. we probably will see u.s. ships moving into the vicinity of taiwan to show support. and tried to avoid any undue confrontation. francine: thank you. coming up, we talked banks in the second quarter earnings season comes to an end. this is bloomberg. ♪

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omaha. the finance, hr and planning system used by over half of the fortune 500. for a be-agile-like-an-mvp world. workday. for a changing world. francine: welcome back. we are 41 minutes into the european trading day. yesterday, nancy pelosi went to taiwan, what would happen, not much has happened. we are seeing the military drills china said they would impose -- practice from today. the straight means there is -- some lng shipments having to go around. we are looking at the german chancellor giving a press conference. this extremely important, talking about some of these gas

shipments under constant threat. he is saying germany is taking steps to prepare for a difficult time. it does seem like he is expecting for it to happen. a full embargo from russia. we know they have a five point plan on what parts of the market they would shut off or parts of industries they would shut off. it would put germany in a deep recession. under banks, commerce bank has posed better-than-expected profits in the second quarter. i got a boost from rising interest rates. income from lending rose 26%. anna edwards spoke to the chief financial earlier. >> it is important to note, we have a management overlay -- of more than 500 million euros, which is a good reserve buffer. nevertheless, we carefully

analyze the situation, and the natural gas supply. we feel comfortable with what we currently have -- is a likely scenario then we will see a recession in germany, in europe. also, government measures, the talks -- they are still doing fine. corporate clients coming of the key penndot -- pandemic being very cautious.

the current situation, just 20% natural gas supplies, not ideal. >> a sense of how your clients are preparing, if you have a comment on how businesses are doing. we talked to large -- they talk about making contingency plans, alternative supply. i wonder how it stands ready for the winter ahead? >> basically, what we see, people and companies get prepared, the government is preparing. every week, we can move forward. i think most difficult situation to manage is what happens next,

and we would know how the preparations were going. francine: bettina oro -- or locked talking to anna edwards. we are approaching the end of the second quarter earnings season. one theme over it was a decline. to discuss what this might mean going forward. thank you so much for joining us. the bank was in trouble for a while. going to details. >> were comparing these individual reports about banking advisory fees being done. in the u.s. on average, about 50% compared to the same quarter last year. in europe, even credit suisse down 80% compared to last year.

what bloomberg has hopefully done is take a look globally at where these financing plans have slowed down or been canceled. they found 358 companies have decided to either cancel or slow down. that's worth $254 billion. and the geography or this is slow down the most is the americas, about half of that total. francine: what's behind the slow down and how long will continue for? >> it's the volatilities of the war in ukraine, it is not the environment we were hoping. when you look at the ipo market, what you see is a change. in 2021 we had such a bumper year. he had companies like coinbase going public. robinhood is going to be laying off about a quarter of its staff. francine: that is 25%. >> they found out via slack message they will be losing their jobs. this is not the sort of environment. francine: if anybody needs to

fire me, don't do it on slack. >> this is the sort of environment where if you were a unicorn, you don't want to go public. it is translating into weaker fees for lending banks. this is a problem across the board. robinhood stock down 35%. across the tech sector, you're seeing these types of layoffs and companies we thought would shoot through the roof during the pandemic era. francine: there's so much going on. a of deals, it does mean -- we're hearing the banks paying their junior bankers so much more. >> it's the r word. there are so many conflicting signals coming in. we are seeing a fairly positive earnings report from the banks this past week. this dealmaking slowdown. forcing a focus toward compensation. conflicting signals, a report

last night was saying junior staff salaries were going to go up. but analysts have been saying in the investment banking sector, if this downward trend continues, we could see cost-cutting measures,. francine: oh rove advice to anyone watching, do not fire your people -- it is stressful, horrible time, do it humanely. >> we heard about this for years. the fact it is happening, represents a lack of learning. francine: it never ends well for anyone. thank you charlie wells. let's get to the first word news with laura wright. laura: it would effectively close -- paying huge quantities of trade at work -- risk. germany is set to drop 47% by the weekend -- the rind is vital for delivery

of oil, gasoline, coal and other commodities. russian president vladimir putin will meet turkeys erdogan for talks friday to unblock exported grain from ukraine. this comes after the first ship arrived in turkey. meanwhile, keith has begun mandatory -- kyiv has begun mandatory evacuations from eastern ukraine. u.s. job openings fell to eight nine month low in june. it is: somewhat amongst growing pressures. the available positions have decreased to 10.4 million. is the biggest drop since april 2020. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

francine? francine: laura wright in london. market watchers, and the opec -- we watched the opec meeting. we'll drill into that story next. this is bloomberg. ♪

francine: welcome back to the open.

53 minutes into the european trading day. some investors we saw yesterday -- u.s. china relations today is a banking treasuries, yesterday it was sparked by hawkish federal reserve comments. we are getting data, france's pmi coming in 53.2. oil watchers, skeptical that opec-plus will answer president joe biden's call for more oil supplies when it meets today. expecting them to reserve its remaining capacity for another time. we have our energy and commodities reporter. are we likely to see opec-plus he'd bidens request? bloomberg.com >> as you said, the opec watchers we surveyed this week think note, they think

opec will announce no increase in -- in oil production for september. that will stick to august levels. there are some analysts expecting something. goldman sachs said they see some increase. they did not say how much, they expected to be pretty modest. they say there is a chance. francine: the market is so tight, it would make sense to put extra supplies out there. >> when you look at the global market, it is still tight. goldman-s, -- that would push opec-plus towards pumping more oil. the group does have many issues with the argument. one of them is the u.n. fears about -- if not a global recession, then a slowdown in china and europe in the u.s.. if you look at the oil market,

which are a good sign, this of tim dunn quite a bit the last few days. there are reasons opec could say demand is leaning. francine: there are two people who expect extra supply, this is like reading the tea leaves of opec-plus. the longer it lasts, we may have an agreement, then the problem is pumping it. >> even if opec-plus did agree to some output increase for september, there's the problem of how much it will actually be able to deliver. pretty much all its members, certainly the core opec group are at max capacity or close to it. it is pretty much only saudi arabia and the uae that the market thinks have a significant spare capacity to give. angola, nigeria, iraq, they are really struggling.

they could fail to produce anything more even if they make an announcement today. francine: that is it for the european market open. surveillance early edition is up next. the markets are stabilizing, we still look at taiwan and china, halting some trade with taiwan in retaliation of the visit of nancy pelosi to the island. more disruptions likely in the taiwan strait. as political tensions intensify. this is bloomberg. ♪

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>> we will not abandon