>> good morning, this is

"bloomberg daybreak: europe." i'm lizzy burden in europe. taiwan is hit by its biggest earthquake in 25 years, toppling buildings and disrupting chip manufacturing. at least four people have died. stocks slide on fears of a slower pace of rate reductions from the federal reserve following more strong data on the u.s. economy. mary daly says she believes there will be three cuts this year. >> i think that is a reasonable baseline but i would like to say, this is a projection, three rate cuts is a projection. that is not a promise. lizzy: president biden in xi speak for the first time since november, the white house saying the sale of tiktok was on the agenda. good morning, we will bring you the latest on the taiwan earthquake, the worst in 25 years.

first, let's get to the market reaction to the latest u.s. economic data. we have plenty of that this week. good news for the economy has proved bad news for markets. it fueled more speculation the fed will be in no rush to cut interest rates, and that is not stocks. that is expected to continue later today, as you see from the futures picture. if we look at the cross asset picture, i can show you why. the 10-year yield at its highest levels this year, 4.35. with yields this high, why would you buy stocks? some would say because if delayed rate cuts reflect a stronger economy, it is good for equity markets. isn't it time to buy? we will have that debate with ven ram later in the program. these are choppy waters, a volatile time with so much

canonic data coming out. now all eyes are on the fed chair, jay powell. he speaks later today. gold hitting all-time highs, and oil steady after yesterday's rally. all attention now on the opec-plus meeting later today. let's get back to the taiwan earthquake. the fire agency into one reporting -- the fire agency in taiwan reporting that four people killed. let's get more from taipei. what is the latest? >> as you said, four people are confirmed dead. there are other people thought to be missing, and risky operations are underway in the east of taiwan. we were struck at about two minutes to 8:00 by the strongest quick to hit taiwan since 1999

when 200,000 people died. while buildings shook in taipei, the capital city appears to only be minorly affected. some subway disruptions but the stock market is trading today as normal, a little lower. the main impact was in the east, some rose to the area have been closed, some rail services disrupted. this is a relatively remote area far from the western side of the island which is where the main industrial heartland of taiwan is. and that industrial area, semi conductor manufacturing and electronics and other companies immediately suspended some operations and evacuated some staff. this is something they go into as a matter of course.

taiwan is in an earthquake zone, subject to severe typhoons in the raining season. they have contingency plans that go into effect. one refinery may have suspended operations briefly but it will be back online this afternoon. we continue to monitor the situation. the east of taiwan, less populated than the west and taipei is the main part affected. lizzy: we appreciate that update. the focus is very much on the human toll of the taiwanese quite. >> continuing to assess damage, human damage and damage to buildings and production lines. we know tsmc took workers off the production line today in

many factories. it hit around 8:00 this morning as people were about to go to work or at work. the market reaction is contained for right now. the macro picture around the world contributing more to the market narrative than the actual earthquake. we see the taipei main index down 0.5%. tsmc is contribute into that, down 1%. that is not a huge move even as chip stocks around the world lowered today following intel numbers that disappointed yesterday. i want to point to the nikkei, off again today, another 0.6%. this macro story on a weaker yen playing into that. it is unchanged now but bank of america is out with a note saying it could be 1.60 per dollar before the fed cuts rates. there is no point of the bank of

japan getting involved in this because that is what everybody is waiting for, the fed rate cut cycle to begin. until then, forget about moving control of the yen. the intel story is having an impact on chip stocks, not just the earthquake and the aftermath. we are saying the tech heavy index in south korea down 1% off the back of the intel news. then you have china continuing to selloff as we head into two days of holiday. hong kong traits on friday but mainland china does not trade thursday or friday. and the main index, down 1%. you are seeing currency trouble. the off store offshore yuan trade at the wide end of its band and speculation it may have traded outside of that.

that bears watching, it feels like the whole world is waiting for the fed to get going. we will hear from jay powell later wednesday. lizzy: thank you for that. we now come to the fed because two officials say they expect u.s. century bank to cut rates three times this year. mary daly says there is no urgency to adjust at the moment. the cleveland fed president wants more evidence of easing inflation. >> i continue to think the most likely scenario is inflation will continue on a downward trajectory to 2% over time, but i need to see more data to raise my confidence. lizzy: i'm joined by jill disis. looking to friday's jobs report, walk us through the latest data

we have already had. jill: at this point, what we're saying is the continued resilience in the labor market. we saw the job openings are pretty much unchanged in march versus february. this is combining to not give us a lot of knowledge ahead of what we are expecting for the nonfarm payroll reports on friday. the estimate among economists is it will be north of 200,000 nonfarm payrolls, so we will see if we get those numbers but it feeds into a broader narrative that this is still a strong economy. you combine that with factory data, this is all leading into this reason why there is a lot of confusion over when the fed will cut interest rates, and if it will be three times this

year. lizzy: this is the data they are waiting for but talk us through the difference between what they are expecting a what traders are expecting, you have a disparity. jill: yes, ultimately what we are looking at, you have daily saying there are probably three interest rate cuts this year, although i will point out that they say we will see what the data says. it is a reasonable expectation for three cuts. bond traders are pricing in somewhere around 70 basis points of cuts. that implies maybe we will only see two rate cuts this year. it is a far cry from where we were a few months ago when you sell the markets be aggressive about expectations for a cut as soon as march. it is telling you there is resilience in the labor market.

we are not seeing disinflation hidden away you wanted to to bring that inflation target back down to 2%. it is causing some trepidation about whether we will see cuts as soon as june as traders had been expecting. lizzy: what a turn of events. thank you for that analysis. we get back to the geopolitics, president biden and xi jinping have spoken by phone, their first one-on-one communication since november. we can bring in our senior reporter, james major. what stood out to you from these talks? i read your write up of the readout and it sounds like china was more negative than the u.s.. james: that is a fair read but i

also think the readout from the chinese side was more positive than in the past. there was talk about stability and how they are saying real action since the leaders met in november. there was a lot less complaining about u.s. actions that we had seen in previous statements from the chinese government. both sides had a long laundry list of things to discuss and make clear. china made the point that they always do on taiwan. generally the discussion seemed to have gone well. now we look forward to janet yellen coming in a few days. overall both sides have a cordial discussion. lizzy: how does this set the stage for janet yellen's visit in the coming days, and then antony blinken in the coming weeks? james: i think both sides, janet

yellen had an interview with the world street -- the wall street journal where she gave a speech laying out things she would speak to with the chinese, specifically on questions of capacity which the u.s. is talking more and more about, whether she will go into the details is remained to be seen that the u.s. government is concerned about what they see as a flight of exports going overseas. there were discussions on a number of other issues, fentanyl is a big one. we will see if janet yellen speaks to that but when the working group on fentanyl met earlier this year, there were people from the treasury and the bank of china who were part of that to talk about how to stop currency flows into the drug trade. there are a lot of different

things they have to work on. we are hitting the imf meetings in a few weeks, so questions of debt relief for developing nations and how countries like zambia, how does the u.s. and china cooperates so those countries can see real debt relief. that will be high on the agenda for janet yellen's visit. lizzy: many thanks, james major in beijing. we have plenty more still ahead. a lot of data. at 8:00 a.m. we get turkish inflation, it jumped again in march from 67% in february, there seems to be no stopping it. our economists see it hitting 70% by may which puts into perspective euro area cpi, that is that 10:00 a.m. u.k. time. it is expected to inch closer to the ecb to percent target in march with the june rate cut looking increasingly like a done

deal. at 5:10 p.m., we will hear from fed chair jay powell. coming up, president biden says israel is not doing enough to protect civilians in gaza after seven aid workers were killed in israeli airstrikes. more on that, next. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe." we will get the latest on the geopolitical situation in the middle east. the human toll is the focus, the death of aid workers in gaza. has to be said the geopolitical risk is feeding into the oil price. we have seen immense action in the oil space. wti crude hitting $85 a barrel for the first time since october. currently trading at $85.18. brent at $89 a barrel as well. questions are flying as to whether this is because of geopolitical risk and china optimism, or whether it might be about falling inventories. i got a note yesterday from

sab's commodities team pointing out not a single drop of oil has been lost to recent events in the middle east, except for some rerouting around africa. what you have is a tight market and a steadfast opec-plus. opec-plus meets online today and is expected to affirm its current output cut, but we have a chart on this, you can see opec is still producing above quota. there is room to cut and room for further tightness in this market. we will keep across the oil price for you. it is to some degree affected by the geopolitical risk in the middle east. president biden says israel is not doing enough to protect civilians in gaza, after an airstrike by the israeli military killed seven aid workers. let's get more now from stewart livingston wallace.

i wonder if the death of these western aid workers will be the last straw that brings home the impact, brings the u.s. and the u.k. to bear down on israel and stop the invasion of rafa. stewart: i think the short answer is no, probably not the last thing. in terms of the current is really government, they have made it clear they have this goal of eliminating hamas' leadership and they cannot do that unless they are active on the ground. this be the final leg of the war, possibly. is this the end of relations between israel and the rest of the world? no, i don't think it is. lizzy: it seems to be tough talk still. i wonder if we have had clarity on what iran's response will be,

do you think it will retaliate against the u.s. because of its relationship with israel? stewart: we have some precedents to work with, and it is dangerous to predict what iran may or may not do, but when you look at when the u.s. eliminated one of the key leaders in the iranian military, it did not really trigger any major response from iran. iran has been careful about confronting either the u.s. or israel or western allies directly. by and large it does not like to play that game. it much prefers to operate through proxies across the region. it is always at arms length. if there was to be any direct attack on israel, that raises the risk of israel and the u.s. responding in kind if not more severely, and that is probably not something tehran wants to

get involved with now. lizzy: thank you for that update on the situation in the middle east. coming up, senegal's newest president is sworn in, becoming africa's youngest ever leader. that is next, this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe." we go to africa now because senegal's new president, bassirou diomaye faye, has been sworn in and is africa's youngest leader. for more, we're joined --president faye;s policies are

different from the former president. what should investors brace for? >> investors should be looking forward to having a leader in president faye. he wants to continue working with senegal's foreign partners and deepen their relations. he said he will renegotiate contracts, that might delay projects. what they will do is review the contracts and see if there is an opportunity to make more revenue for the country. they are a business friendly environment and want to build a conducive working president. everybody is quite optimistic. lizzy: faye has named his prime minister, why is that significant? >> these are opposition leaders who went from being in jail three weeks ago to the presidency and premiership.

during the campaign season, we saw opposition leaders rally support behind faye. we saw him winning the elections, 54%, the first time in opposition candidate had ever done that. since his appointment, he said he will not leave faye alone to leave the country. he has an appointment for ministers he will present to the president for his approval. lizzy: the latest on the election in senegal and what to expect moving forward. as a reminder, do not forget to catch "africa amplified," our monthly deep dive into africa's biggest stories. we look at the historic rise in cocoa prices and why the same factors are impacting other commodities on the continent. speaking of cocoa, if we stick

on the ivory coast, specifically the weather and its impact on this commodity, you have had cocoa futures hitting a fresh record, then they took a bit of a dip. cocoa prices having doubled this year on lower west african production. the 60 day measure of volatility is at its highest in 15 years. another corner of the market were volatility is the watchword. not so good for our favorite confectionery, which is making me peckish. coming up, volatility is the watchword. we have this u.s. economic data this week, and it is dampening hopes of further rate cuts from the federal reserve. more strong data on the u.s. economy, which we will bring you more on, next. we look at futures stateside pointing to a lower opening this

morning, as they do in europe. euro stoxx 50 futures flat to the downside. we will have more on the markets, coming up, next. this is bloomberg. ♪

♪ lizzy: good morning, this is

bloomberg daybreak: europe and i'm lizzy burden. taiwan hit by the biggest earthquake in 25 years, disrupting chip manufacturing with four people related -- for people reported dead. following strong data from the u.s. economy mary daly believes there will be three cuts this year. mary: that is a reasonable baseline, this is projection, three rate cuts is a projection, not a promise. lizzie: presidents biden and xi jinping speak for the first time since november and the sale of tiktok was on the agenda. we will bring you the latest on the impact and market impact of the taiwan earthquake.

futures pointing lower on both sides of the pond and it comes back to the latest u.s. economic data. good news for the economy and bad news for markets. traders paring back bets on trade cuts. the market looking less dovish than the fed now. what a change from the start of the year. if we the board to the cross asset picture, the u.s. 10 year yield is the highest this year off the back of repricing of fed cuts and that leaves the question why buy stocks when you got yields this high? you might say because the reason for repricing is a good economy, which is good for equities. we will get into that debate with ven ram in a moment. u.s. jobs report on friday and

jay powell speaking later today. we've got the dollar study, gold study having hit all-time highs and oil is pretty steady. brent crude is at $89 a barrel as attention turns to opec-plus meeting at which we expect supply cuts to be confirmed. let's get to the taiwanese earthquake impacting markets in asia and other things with bloomberg's vonnie quinn in dubai. what is happening? vonnie: fallout regarding officials at sites and buildings that a fallen down. 26 buildings collapsed and at least four individuals have died according to the local fire service. some chip factories have evacuated workers and so on, the earthquake hitting at 8:00 a.m.

local time when people would be going to work. tsmc took a hit in trading. macro factors are impacting taiwanese shares. impact is fairly contained market wise. taiwan semi conductor down one and a quarter percent. there is a whole at chip stocks because they reported revenue less than expected. shares around the world including south korea are lower. the nikkei is down again, another down session for japan shares. we will see where the money is flowing. there was a suggestion it might flow into china. the yen at 151 .59. it could go to 160 and if the boj intervenes it will not matter until the rate cutting

cycle. let's hope the board. central banks are waiting for the fed cycle. we also have china waiting for this to happen. better data out of china. csi 300 had another down day. the stock exchange not feeling the data, not lifting sentiment. we had that currency very close to the weakest part of its onshore and that shows that the central bank is trying to defend its currency. lizzie: thank you for that. impact of federal reserve cutbacks being repriced on asian markets, we continue our conversation. to officials of said they expect the u.s. central bank to cut rates three times this year.

mary daly says there is no need to adjust and the cleveland fed's low red wants more information. we can bring in ven ram from bloomberg's live team. we've seen impact on stocks where good news seems to be bad news. stronger economy is time to buy? ven: you are hitting the nail on the head, that is how equities are trading. seen a rally. there are two sides, interest story in growth story. rates are sticky but will go lower from here and that is how the lay of the land looks.

the growth story is where investors are excited because if you get corporate earnings growth of 25 or 30% and you've seen the numbers underpinning tech stocks, those are humongous earnings blowout numbers underpinning stocks at the moment. s&p 500 could get an earnings yield of 5%. nasdaq prospect of earnings of less than 4%, but that needs to be seen in the context of overwhelming earnings growth and potential and with ai on the horizon that is what investors are lining up or and so far they have not been disappointed. lizzie: that's the u.s. stock story but how much risk is there for european currencies? fed cuts seem a more distant prospect.

ven: definitely the dollar found itself a bed. notwithstanding what happened yesterday. in european currencies and the yen will be a while believe because the pound has given up gains for the year and that is a continuing story through the second quarter because real rates in the u.s. will stay elevated and we've seen the 10 year real yield up to 2% levels. that provides comfort for investors and means the dollar will be on the front foot putting european currencies in a wobbly position. lizzy: euro-dollar 10 seven. we will keep our eyes on it as we await the cpi figure at 10 a.m.. thank you for your analysis.

native secretary yann stoltenberg is establishing contributions worth $100 billion or ukraine as foreign ministers gather in brussels to mark the group's 75th anniversary. let's get more from roz matheson. how significant is this proposal? rosalind: hundred billion dollars over five years and operational responsibilities for weapons deliveries into nato. it is being led i the u.s., the ukraine contact defense group, absorbing that back into nato as part of the proposal at this meeting today and tomorrow and the idea is to give this over a protracted time out of concern for the u.s. political

environment and prospect trump may be back in the white house. he has been critical of nato and aid to ukraine and suggests that the u.s. stop funding. whether it is trump or joe biden in the white house, there is a sense of concern about whether the u.s. can continue to support outflows to ukraine. we seem that aid package in congress so the idea is to shield this with nato machinery. it will be discussed, there may not be entire support, but it is the most important thing on the table for discussion. lizzy: i was going to ask what happens if trump gets an but what else will be on the agenda for nato members? rosalind: membership of nato will be discussed.

who will replace stoltenberg at some point? there had been coalition around the lead candidate, but baltic states have puts support behind romanian president clouse, someone they want to support. it seems most support is behind -- but there will be a conversation about leading nato over the next five years. you've got not just the conflict in ukraine, you've got fundamental questions about europe's self-defense when vladimir putin might cast his gaze toward europe. conflict in the middle east, tensions between the u.s. and china and you need someone who can lead nato. it is a fundamental question. that is the other major topic

today. lizzy: historic times. bloomberg's rosalind matheson, thank you for that preview. it now to some other stories, intel shares fell in u.s. extended trading after manufacturing losses the bend. the business may not break even for several years. a new division responsible for manufacturing has sales of nearly $19 million down from 28 billion the previous year. elsewhere, the controlling investor in wwe and ufc has agreed to be acquired by silverlake management. the buyout follows through on plans announced in october and they said they were evaluating strategic options out of frustration with language inc. stock prices. coming up, companies to watch in

the second quarter. bloomberg intelligence gives us their top 10 picks next, so stay with us. this is bloomberg. ♪ welcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

♪ >> welcome back to daybreak europe. tesla shares slumped after first quarter deliveries missed estimates by the biggest margin in seven years. tesla shipped under 387,000 vehicles and estimates were for 449,000. we can find out now with asia transport reporter linda. what went wrong for tesla? linda: a whole range of factors that tesla is finding challenging. global demand is softening right

now across markets like u.s. and eu. you've got tesla's second largest market china going through a price war in the auto market with ev makers discounting prices and supply chain disruptions with the red sea attacks by rebels that led to production disruptions at the berlin plant. these paint a bleak picture for tesla and we are seeing that in delivery numbers. lizzie: i'm wondering what could be the read across for europe and the industry? linda: in europe, electric vehicle market had a strong start in january, sales of battery electric vehicles rose more than 20%. in february that slowed down a

little bit, so that could test some doubt with how well demand will hold up for the rest of the year if the market continues to soft and and tesla, that could really impact their sales going forward and all eyes are watching for the results of the antis subsidy investigation into chinese electric vehicles and if there will be import tariffs on chinese cvs that could slow arrival of affordable dvds into the european market and contribute to weakening demand. lizzie: transport reporter linda, thank you for that up date on elon musk woes and the china story and read across. bloomberg intelligence identified 10 companies to watch in 2024 second quarter.

various sectors and regions part of a group of high focus ideas that analysts flagged on an ongoing basis. we get more from intelligence director tim. happy quarter two. tim: it's not april fools either. lizzie: i love this piece in the illustrations of companies as apples. how did you get to this? what is the methodology? tim: these are part of a broader group of focus ideas. they have three elements. high convention fundamental view, that we think is different from what the market is thinking and critically, there are catalysts to bring the market to our point of view. these tend have important catalysts in quarter number two. there the 10 companies to watch.

lizzy: it looked bleak on the market so if you want inspiration, talk us through the three out of 10 that are based in europe. tim: quite diverse. accor, per rally and standard chartered. accor, a hotel company, wide range of properties with exposure to europe. in asia we see a travel recovery continuing to progress surprisingly better than expected and specifically, we have the paris olympics coming up and the french company should give us early insight on how bookings are coming up, interesting twist. per rally, the tire company, they have gotten an important mixed shifts in their shifting production to lower cost in romania and mexico.

there is a profit surprised to come and standard chartered, the big bank, they have resolved china risk for property exposure, but there's not enough appreciation for the wealth management business which we think could surprise. lizzie: we've had bill winters the ceo on deal break. you believe him. let's also compare this to the list at the start of the year. ongoing basis that you do this, r their broader themes that connect the other companies to watch? tim: newcomer is interesting. it is a u.s. company called penumbra, i was not aware of it. they make computer-assisted vacuum technology. what is that?

essentially micro items that go in and suck out blood clots for stroke or pre-stroke victims. better than using anticoagulant drugs that have other issues, so cool technology comical company and they got new products. another one is ai related, salesforce, the infrastructure software company. there is an i.t. spending cycle gaining steam and you need data for training certain elements of ai within corporate projects, so we think there are two wins behind salesforce. lizzie: you're not the only one. albert einstein's estate has faith, dave given the ip his face as a logo. what are the headwinds.

you touched on china, what else could knock the winners? tim: i will keep on china. there are two that are negative of the 10, both happen to be china oriented items. one ischow tai fuk, we think there are risks ahead. hong kong citizens are going across the border and shopping in china and it is impacting retail sales. another is csc financial, a large chinese broker with a focus from a policy perspective on markets and containing supply. we think the ip market and other listings will disappoint and csc

is in the front of that. lizzie: definitely worth checking out. european strategist tim craighead with 10 companies to watch. i love the apples. the humpty dumpty's of companies. plenty more to come, stay with us. this is bloomberg. ♪

>> the most likely scenario is inflation will continue, but i need more data to raise my confidence. readings will give us a sense of whether the readings reflect a temporary detour.

>> a projection is not a promise but this is how the economy is expected to evolve should that occur. you have to maintain a ready position and we are in a good place to be ready for if inflation is stickier than i projected. i look at my projection and say we may want to cut less. lizzy: cleveland fed president loretta and mary daly, san francisco fed president, speaking on the u.s. policy outlook no rush to cut rates. will the narrative be confirmed by jay powell when he speaks later today? probably is what the market -- markets reckoned. it comes back to data dependence. more data surprising to the upside yesterday and we had job

in factory openings rebounding from the january slump and more data to come this week. main jobs report on friday, so potential for volatility. city groups economic supply is near a one year high and you've got traders pricing fewer than three cuts this year, what a change from the start of the year. markets less dovish than the fed. they will talk about that on markets today next, so stay with us, this is bloomberg. ♪

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♪ guy: good morning, i'm guy johnson. taiwan