markets: european open." i am tom mackenzie. stocks and futures are mixed heading into the european open. yesterday's fed minutes signal a likely rate hike despite forecasts for a recession. chinese exports unexpectedly surged in march. the first in six months, another sign that the economy is gaining strength. lvmh shares hit a record high, luxury sales almost twice analyst predictions. we will do a deep dive in the next couple minutes or so. of course, in terms of the dove and hawk, some divergent as well when it comes to fed speakers. you're looking at modest gains.

a 25 basis point hike when it comes to the fed. traders are still pricing in and expecting it towards the end of the year. that remains a debate. spanish imax is up. gdp coming in slightly below stagnation. in france, gains some tenths of a percent. the last time i looked, the u.s. two-year was still below the 4% level. noll of movement in the session today. gains around .2%. brent around $87 a barrel. let's check in on lvmh, the big

story at the moment. demand coming through for the luxury buyer over in china. 3.4% up for lvmh. let's get back to is happening on the inflation story and implications for the central bank. the latest data from the u.s. shows that core cpi eased slightly in march. san francisco fed president said that inflation still has a way to come down. she added that more hikes may not be needed. >> looking ahead, they're are good reasons to think that policy may need to hike more to bring inflation down. they're also good reasons to think that the economy may slow without the additional adjustments. tom: that is on the potential

for the fed. let's bring in skylar montgomery koning, senior global macro strategist from ts lombard. interesting considering the fed flag. what is your assessment of the last few months and where it leaves the fed's reaction to the inflation story in the u.s.? skylar: i think the fed has become data dependent. was the banking sector stable and adding inflation pressures, we may get another hike. the market is very much focused on when the peak is. the market is able to focus on cuts because inflation has peaked in the summer and has been declining that was

confirmed by the march inflation print. given that they have room to go more slowly, they did not have to go to higher rates. the past month has seen a significant dovish inflation. we are still more dovish in 202024. we have had expectation about 2.7% by the end of 2023. we are on the path of recession. when the economy goes into recession, the fed historically cuts deeply. it historically happens quickly. i think a really important point is that if inflation falls in the fed does nothing, real fed bonds will increase.

it does not seem very possible. tom: that is a very bold call. 2.75% by the end of the year. i just want to get your view on how we get there. you're pushing back against the fed commentary. skylar: exactly. the key is u.s. growth. we are getting very mixed signals from the data. it is climbing very rapidly. we are in the camp of note recession. -- if you're in the camp of note recession you are pointing to -- and if you are in the camp of recession your pointing to -- there is quite a lot of noise but we have already seen lots of momentum.

i think that will go further into 2023 and has been accelerating by what is happening with the banking sector. expect a more mild recession in 2020 a contraction of 0.6% in reactivity. if you have the happening as they get increasingly tight, i at least see the fed going back to neutral. tom: how do you position around the view of cuts? skylar: the big call is the fed cuts into the curve with a large rally in fixed income. with part of last year, the market was looking towards a positive bit.

it is increasingly doing that. we are not going to get 200 basis points hike this year. we are surly at the end of the tightening cycle. it has really struggled to get above 4%. all we have seen significant decline in the yield, i am comfortable holding onto fixed income loans, especially as we get vulnerabilities exposed. i think fixed income long-term still make sense. the 60/40 portfolio working now as inflation declines. tom: back to 60/40, china lines coming through. export with luxury from the consumer. how much conviction to you have around chinese assets and how

enthusiastic are you at this point? skylar: there have been some factors that make it more attractive. reopening is the biggest driver. we have had some bumps and ups and downs. i think the rebound will continue. typically what you see are the horizon markets shortly after. there is a consistent rebound with returns at 40% higher. this is only at 2022. while it is still a highly unusual cycle, i think it will peek through. the key difference in terms of what you said is that it is a

consumer led rebound. i think that will feed into luxury goods with commodity markets and inflation. tom: always smart. thank you very much. global macro strategist, skylar montgomery koning, thank you. let's bring in christine. how does it shape their thinking and how does it shape their divisions in the fed? kristine: you can tell they are thinking about the banking sector from march. i think it has become a more imminent issue than what we were expecting. the message from fed officials with the -- was that they were

prioritizing the fight against inflation and looking past the short-term gyrations in the market. literally -- clearly, they were thinking about it and i think we are starting to see it in the messages from the committee. there is a divergence building. i think some are seeing that this banking turmoil will been to less credit for assets and turmoil. others still believe, no, we need to prioritize inflation over everything else. tom: voicing that caution partly linked to the banking crisis. thank you very much. coming up, lvmh shares climb. luxury sales bouncing back. that is next. this is bloomberg. ♪

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that is a gain of almost 1%. corporate linking the biggest gain on the stoxx 600. sales soared after china bounce back from the world's strictest lockdowns. one of the main takeaways, stocks soaring this morning. >> it is hard for them to keep this pace but lvmh one of the largest groups with sales of twice there locations. they have double digit growth in china. very strong demand in lunar years. very strong for the leather

division which is with christian dior. tiffany also beat expectations. there was one week are, because of softer demand for cognac in the u.s. overall, a pretty strong beat for lvmh in this first quarter. we will see the valuation as it will gain more than 20% is the beginning of the year. at some point, there should be a market cap of around $5 billion, the first time ever for a european country. tom: $500 billion. while. what are the challenges facing this company?

caroline: there are some challenges. it is mainly domestic travel. a few months ago, they did not expect the return to europe in large numbers. then, the u.s. markets, the luxury market in the u.s. could shrink this year. at the moment, the slower demand in the u.s. is manageable. many believe there are a lot of drivers for these lvmh stories. he will walk alongside menswear designs. that could bring some new trends

into the label. we spoke in the last hour of how this could take retail into new and unexpected highs. another driver over the next quarter could be the tiffany store on new york's 5th avenue. that represented about 10% of tiffany's global sales. tom: lvmh lifting the broader sector. let's get to sam. >> they have moved to sell most of their remaining stake. the japanese investor is selling about $7 billion, leaving their

stake at about 4%. this shift can address a more -- business environment. dpm -- j.p. morgan chase saying that employees will need to come to work and be accessible for meetings. data comes from a time when the biden administration is trying to jumpstart the chip industry. import from taiwan into the u.s. has grown more than 2% in march. tom: thank you. let's get to another big story. up, tripling their output in

u.s. stocks. let's get the details. we have our indo -- india tech reporter. what is driving this? >> it is apples recognition of their need to expand. this was also a lesson for apple. they were also at a loss with manufacturing. apple has become very successful in india and that is how those numbers have come up in the last year. tom: that is quite a number. what percentage is it for iphone production? >> the numbers are expected to

go up to 25% in a few years. in their accounts of roughly 20% of their global production. tom: thank you. apple tripling the production as the market of india tries to shift away or at least play some contingencies in markets. implications around supply chains and apple production for the future. coming up, stocks on the move as they name a new ceo. futures up by 2% in the u.s.. stay with us. this is bloomberg.

>> the deferred affect of our past rate hikes would be more significant than the ones of our future decisions. it will then be key to stay the course for us long as necessary. it is giving way to a different

system. >> we need sustainable finances. because of the high cost for lending, we have to make more effort to find common ground. >> the actions tightened global conditions. that leads to a realignment. >> what we should not be doing is saying, we have such a problem with financial stability -- [indiscernible] policy decision with our inflation topics because of conditions on financial stability. >> i believe we can get inflation under control but i do not underestimate the challenge. just as the united states and core inflation is still between

4% and 6%, there still a lot of work to do. tom: policymakers speaking to bloomberg tv as they gathered at the world bank. coming up today, imf with play more conversations from voices around the world including european policy commissioner, president donahue and spanish economy minister nadia. over 20 minutes into the open. let's get to our markets team about what is on the move. >> the first off we are looking at is lvmh. one of the best performances in the stoxx 600 today. this as they seek a sales more than double what has been expected.

that is heading to a record high with a lot of strength -- not drinking enough cognac. fortunately tesco was up around 3% but is now down to about 1%. sales continue to rise around 5% according to the company helping them to maintain their strong dividend. that is boosting the u.k. market. barratt jumping also. reporting an uptick in sales. hsbc is upgrading a bunch of stocks saying that the

valuations are too low giving the lift of the sector in london. finally, enel is down about 4%. they are not liking the prime minister choosing the leader of the country. that stock is down 3.5% in milan. tom: thank you so much. coming up, we talk gold in south africa. do not miss our exclusive interview with gold fields in syria ceo martin preece. that is next. this is bloomberg. ♪

tom: welcome back to "bloomberg markets: european open." 30 minutes into the european

trading day. u.s. stocks and futures are mixed as yesterday's fed minutes signaled a likely rate hike despite reported falls in the forecast. march has the first increase in six months, another sign the economy is gaining strength. plus, chinese consumers propel gains almost twice predictions. there is an upside of a little over 1% on the french index. the other thing is pictured quite positive. the dax is currently gaining, adding five points only. this suggests we are looking at

a stagnating economy, even if we do not look at such dire troops. -- dyer pictures. iron ore is down right now. officials change some of the policymaking there. this is the list you are seeing from lvmh. at the bottom of the list, you have safe havens like utilities. this is largely as a result of the pressure coming through. investors, continuing to read the rooms when it comes to inflation. to islam barred --ts lombard expects things to get back to around 2.8%.

next, what is happening in south africa. the south african investment conference and our correspondent is there on the ground with an important guest. >> thank you. i'm here with gold fields in syria him ceo, martin preece. let's start with the big topic, the energy crisis. how that is affecting your industry here, give us some insight. due process it up. energy fuels the world, it is something that we have to get on top of in south africa. also, government and business. business is making think in terms of renewables and other sources.

we are somewhat shielded in that we usually get a warning at different stages and what we have done. we find ways around it. we are looking at supplementing things into winter months. i think the reality is that these are real positive steps toward to conduct business. you will need to become self-sufficient. i think you will find ways to become self-sufficient. >> if the private sector is self-sufficient, what does the public sector need to do? >> that is critical to keeping the country going in people who want to have a fortune by the miles. can top of the corruption taking place. did not stop at performance. there will get things sorted up.

they need to run it like a business. >> are you confident they can do that and get things out to investors? >> i think they are right about the noises we make. it has been created from a business perspective and we must do our best to work with that to try and sorted out. i checked the record today that suggests there is a lot of work to do that will require a meticulousness to get done. >> or we talking about to the energy minister, from a cold filled perspective? >> all the money housing is unnecessary for the money supply. the need to block the builds and

send them back in. it will help them get a need onto sorting out the basics which i believe will only be one day. >> are you anticipating investors to come in and to come in and support their efforts in doing that? especially this year during the conference? >> i think renewables are a very typical thing. i think, internationally, investors will come here and view it as a business opportunity. it comes into the fact, how do we make it effective and have

the confidence to get returns back on their investment. >> i want to ask you about gold fields. the reason for the merger, talk to us about where you're at with the government. we have not heard where things are at. >> it is one of those rare opportunities where it is win, win, win. we have had initial positive reactions from government. we scheduled for this month to have formal engagements with the government. we are confident that because of the fundamentals, we will have a constructive meeting with the government. >> when to expect the final deal? >> probably close to the holidays.

>> you think all need is a major deal. is gold fields really sinking a big mergener -- merger acquisition. they could be throwing a dog a bone. >> you're always looking for opportunities. if one comes along, prove right to me. i felt that this was correct, the right opportunity. we are comfortable in our strategy of looking at alternate positions, opportunities. >> are you considering gold to continue going higher? >> we are not. the fundamentals are up. we are in it for the long haul.

>> thank you. that was martin preece from gold fields. francine: china exports rose in march. the first gain in six months. on a positive side, let's bring in james megan and an editor for greater china. what is being described as very likely result and will it be sustained? >> there is a surprising result. it looks to be two things that are driving this. one is strong demand for countries outside of the u.s. and eu south america, africa, southeast asia. big jumps. europe also increasing demand in

europe. it was much stronger than affected. the other thing, it seems like some actions are being delayed in china. first, because of covid and then because of the holidays. that may not continue. the demand side on what you're seeing looks like we will continue to see this. the indication, if that demand continues and we do not see any real recessions globe, he should continue do the rest of the year. francine: thank you very much, james.

coming up, chinese mr. pushes back against the gloomy outlook on the european republic. that is, next. this is bloomberg. ♪

tom: welcome back to "bloomberg markets: european open." still holding on to gains of around 4% across the european benchmark. u.s. futures are gaining around two/10 -- 2/10s of a percent. let's get back to cpi and reactions as the fed continues

to work on agreeing on a path forward. how did the markets react? >> the knee-jerk reaction was really a soft number. the two year yield was somewhat moderated in the afternoon session yesterday. i think that was down to the fact that yes it was a weaker print but that will not justify a pause in the upcoming meeting for the fed. that is the pickle on where we stand now. perhaps are some members who may want a pause. but what data would they lean on to justify it? with the front end is pricing now is the likelihood that in this meeting the fed will use that to telegraph the pause in the upcoming meeting in june. we saw holden revise their call

for a hike based on yesterday's data and the fact that we have seen some credit conditions. tom: thank you very much. let's get to the bloomberg first word news. sam: a u.s. court has upheld access to and abortion pill. a texas court ruling had overturned approval. the core allowed restrictions to be reinstated. access will be limited to the seventh of pregnancy, a cut from 10 weeks. a new ceo of enel was announced. a veteran executive was also proposed as chairman.

he was in milan and a former ally of -- claudio descalzi also in the mix. xi jinping host brazil's lula. [indiscernible] bloomberg has learned that apple assembled more than 7 billion products, tripling production after accelerating their move away from china. almost 7% of iphones now come from india. this is significantly up from about 1% in 2021. this is global news -- global

news, 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you. chancellor jeremy hunt has pushed back against a gloomy outlook for the u.k. economy, speaking to maria tadeo in washington. he expects the u.k. to exceed the forecast. >> we will do better. our forecasts are significantly better. last year we were the fastest growing economy in the g7. maria: where is the risk outlook, where does it come from? >> not just me, the finance minister says he is more optimistic about prospects. maria: so you are saying it will prove everyone wrong? >> we are very confident about the medium and long-term but we do not pretend we are not going through a difficult period like

everyone going through this high inflation. when you look at an economy and you say, what are the sectors? are they going to make the biggest difference in shaping the economy? it is finances, entertainment, those industries where the u.k. has the biggest sector in europe. that brings us great hope for the future. maria: if you say we are going to grow more than expected, be those predictions, you also have a potential trade deal with the eu. there have been potential tariffs they could come into play. i do wonder, when will this be fully clarified for investors? >> the framework has been revealed. maria: but you still do not have confirmation it is going through. >> we are committed to the

framework, it will go through. we are trying very hard. the president is also trying very hard to get back his power-sharing. in terms of the trade relationship with the eu and what will happen with the rest of the u.k. and northern island, that is settled. that removes a major irritant in our relations with the eu. tom: jeremy hunt speaking to maria tadeo during the meetings in washington. coming up in the big take, a saudi oil packed could play into vladimir putin's hands. that is next. this is bloomberg. ♪

tom: welcome back to "bloomberg markets: european open." european stocks are up. u.s. futures are up. mastec futures -- nasdaq futures continue to work through the u.s. cpi print. lvmh coming through with some strong earnings powered by china. that is lifting gains as a consumer.

let's switch focus on to commodities and what is happening geopolitically between the saudi's and americans. a few years ago, they were playing the role of peacemaker and now the u.s. looks more like their target. they have the potential to cause all kinds of trouble for the economy and even president biden's election campaign. that is the analysis in today's big take. joining us now is one of our chief economist. this is a fascinating take. what oil price is opec-plus aiming for and what are the implications? >> i think what they are comfortable with is probably around 18. that is what we have learned

from the cuts this month and october. they need to shift from places with consumers in asia and china. this shows hike global growth and inflation. there is another dimension here which is inflation. oil prices could be the difference between the target next year and ending up twice as high. it depends on what opec-plus does and that is the key question for the u.s. economy and president biden who faces reelections next year. tom: explain to us what happened with the u.s. shale oil buffer. >> that was to provide a sort of ceiling in the past.

when oil prices rose, shall became more comfortable. opec-plus this not feel threatened so much. i think an element of this is that high inflation and wage rises have increased and that has limited the growth potential. the other factor is that even when shall makes profit, -- shel l makes profit, they have to reinvest them. shell is no longer a threat for opec-plus and that is causing them to have more market power in the pricing of oil. tom: you talk about pricing around $80 a barrel. brent is around $87 a barrel. you also make the point that

they are tending their own seeds of demise. why is that? >> historically, when oil prices are high, they are followed by periods of low prices. we have seen it in the 1980's, we have seen it in 2014 and today we have this effect are still there and two additional factors which require more fossil fuel and national security concerns. tom: bloomberg's chief economist markets -- that is it for "bloomberg markets: european open." up next is "bloomberg surveillance: early edition." this is bloomberg. ♪

>> this is "bloomberg surveillance: early edition" with francine lacqua. tom