>> good morning. this is bloomberg daybreak: europe. i'm lizzy burden in london. stocks in asia higher after an upbeat day on wall street. u.s. job status according the case for rate cuts this year. the u.k., andrew bailey opening the door to a possible cut next month. the u.s. set to impose tariffs on chinese electric vehicles and strategic sectors in a sweeping decision to be unveiled by president biden as soon as next week. benjamin netanyahu says israel will fight on in gaza with or without u.s. support. this as washington threatens to withhold more bombs if her offerh -- rafah is invaded. it's been a good month for stocks and bonds after the stumble we saw in april. yesterday, the s&p top 5200.

less than 1% of its all-time high. u.s. jobless claims jumped to their highest level since august, beating estimates and reinforcing bets on fed rate cuts. today, futures pointing to an even higher [inaudible] on both sides of the pod. you can see the impact of the u.s. data on other areas of the market. so the dollar yesterday was a touch weaker because of the labor market softness. currently a touch stronger. the two year yield yesterday saw maturities outperforming. now we are at 4.1%. will we get the needle moved a little bit by some fed speak later? the pound there a touch weaker against the dollar. bank of england yesterday keeping rates steady but stick milling the cuts could start in june. markets pricing a 60% chance of a june cut.

finally, brent trading at $84 per barrel. 6/10 of a percent higher. boosted by the prospect of fed cuts. like commodities, more attractive because of the weaker dollar yesterday. we will dig into the middle east geopolitics in just a moment. let's crop over -- crossover to singapore now. what's happening where you are? avril: we are seeing asia stockmarkets starting the day pretty upbeat thanks to the surge in u.s. jobless claims. those u.s. china tensions really coming to the four. the stock gauge pulled off this session highs. we are seeing the csi 300 still in negative territory. it's being dragged by some of these so-called strategic sectors, related socks -- stocks. despite how we saw the improvement towards the property sector.

yet another major city scrapping those homebuying restrictions. notable what we are seeing in the chinese space. as you can see there, the hong saying is the one that's leading the charge. i want to show you what's propping things up. it's your chinese lenders but also hkex. these financial related, dividend related shares. we got reports that the regulators could be considering a proposal to waive dividend taxes. declines in ev makers after the bloomberg scoop that we could see the biden administration imposing fresh tariffs on chinese products including ev's, solar equipment, batteries. i want to flip the board and show u.s. well how it's playing in the fx space. during the height of the u.s. china trade war, the way in which dollar china fed is a

reflection of what we are seeing today as well as the offshore and onshore both weakened. today, maybank singing the gap between them could widen especially in an election year. u.s. china tensions and the threat of tariffs on likely go away. aussie dollar coming under pressure against the backdrop. keeping an eye on dollar-yen, notching closer towards that 156 level. you see how geopolitics are thrown into the mix. lizzy: let's drill down into those u.s. china relations. let's get more on that scoop. bloomberg learning that the biden administration is set to impose tariffs on china ev's and other strategic sectors as soon as next week. for more on this, let's bring in danny lee. happy friday. just tell us what exactly the biden administration is planning

here and why it has arisen now. danny: in a u.s. election year, these decisions and policy announcements are important. president biden set to announce a sweeping decision on fresh u.s. tariffs on chinese industries. so specifically what we are hearing is targeting electric vehicles. also hearing batteries and solo -- solar industries. these are under the radar from washington. industries which washington is really concerned about because china has so much dominance and strength. therefore, biden is trying to put out his economic response to china as he looks to be reelected. when you have pressure from the republican candidate donald trump who is looking to have hikes of 60% tariffs on all chinese imports. this is biden trying to have something which is a bit more

sensible in this regard. lizzy: ok. so feeling the impact of that domestic politics in the market this morning. csi 300 down to tense of 1% this morning. how is china going to respond? danny: this is really a key question. we have seen china already react to earlier comments from joe biden when the u.s. president actually announced tariffs on chinese steel and aluminum. china reacted angrily but they haven't necessarily responded in a way which would harm u.s. china relations which are clearly under strain from this tit-for-tat over tariffs. we just have to wait to see what kind of measures biden will announce, which we will hear s&s tuesday, in order for them to see any kind of reaction china might take. lizzy: danny lee, excellent

scoop there. thanks. asian stocks rising after an update on wall street with u.s. jobs data supporting the case the fed rate cuts this year. we saw solid demand on that 30 year bond auction yesterday. let's break it down now with mark cranfield. good morning. tell us what this u.s. data means for u.s. assets. mark: good morning. we are in a golden. here. investors are back to looking at weaker data as good news overall for risk assets. it's a benign situation where the employment numbers are cooling slightly but the economy is still underneath doing ok. that's good for the equity market. keeping the fed at bay. he never claimed to have another interest rate hike. this danger is giving him a position where he doesn't need to defend that anymore. people can look forward to the

point where eventually interest rates will be cut. that's not on the horizon immediately. certainly people can start to plan for the idea that there will be at least one rate cut later this year. that's good from an equity point of view. bond market enjoyed it as well. that played out through the 30 year auction. kept a bit of a little the u.s. dollar which is beneficial for the u.s. markets as well. of course, these tariffs imposed on china will be a risk to the yuan. that could derail some of the emerging market currencies. that's only just turning to play out. we need to see more detail on that in the coming days. lizzy: bank of england decision yesterday. andrew bailey set out his case for why perhaps we will see rate cuts sooner than the market expected. take a listen. >> it's interesting, the history of the mpc. most of the cutting cycles have

actually been prompted by some sort of shock or other rather than being one of the natural cyclical, we reach the top and go down. i would just caution, there's not a lot of security out there. lizzy: markets pricing a 62% chance of a june cut. that entry bailey managed to nail look calm's this time? >> he did well. he didn't disrupt the markets. there is no huge volatility around it. he's cap the pound in a tight range. equity markets took it well. gilts absorbed it without too much action. overall, giving himself, -- a pat on the back. that was a good result. from here, you can see the incentive for the bank of england is really to step into a path that mirrors the european

central bank. with the fed in a situation where they probably can't do anything until the fourth quarter, the pressure on europe and u.k. is immediate. both of them would probably like to move ahead. if they move in tandem or very close together, from a markets point of view, that's going to be the least disruptive. you look at the european exchange rate. pretty steady around the 86 level for some time. if the central banks can get away with keeping it in that tightly -- tight range for longer, they will be happy. if we get a situation where three rate cuts are priced and for europe and for the u.k. and there are similar timetables, you get relatively low volatility in foreign exchange. that helps the equity markets. doesn't disrupt the bond markets. everybody is relatively happy and we can forget about the fed for the time being. lizzy: everybody relatively happy including politicians at downing street. they've been saying that rate

cuts would be a feel-good factor ahead of the election here in the u.k.. mark cranfield, we thank you. we have rather a busy day on the docket and we start with data in the u.k.. 7:00 london time, first quarter gdp numbers. the numbers for march completing the set for the first quarter. likely to confirm the economy is in the pastor recovery. so adding to that changing mood music here in the u.k.. now that the cuts seem to be coming soon. at the top of the hour, we get iag earnings across -- iag earnings. geopolitics could be a risk here. on the plus size -- side, the balance sheet on the mend. you might see a resumption of the dividend. the other thing to watch today is the university of michigan survey at 3:00 london time. likely to show consumer sentiment deteriorating in early may as americans worried about

their financial situation in that cooling labor market that we've been discussing. seen in the jobless claims data. you can get those stories and all that you need to know to get your day going in today's edition of the daybreak newsletter. today, biden posed to impose tariffs on china ev's. we also have banks pressing richie sunak to ease up on china curbs. ubs potentially rewarding the rainmakers for wealth assets. find that by going to dy a bigo on your terminal. coming up, it the israeli prime minister strikes a defiant tone against president biden and his first public comments since the u.s. confirmed it was withholding bombs from its ally. more on the situation in the middle east, next. stay with us. this is bloomberg. ♪

♪ lizzy: welcome back to bloomberg daybreak: europe. 6:15 here in london. let's go to the middle east. benjamin netanyahu striking a defiant tone against president biden in his first public comments since the u.s. confirmed it was withholding a shipment of bombs to israel. speaking to the american talk show host dr. phil, netanyahu said he hopes the two leaders can overcome their differences. >> i've known joe biden for many years.

-- lizzy: let's bring in paul wallace in paul wallace and dubai. good morning. you've had this ramping up of threats on weapons from biden to israel. from that interview, it doesn't seem like netanyahu has been shifted at all by these threats. >> that's correct. he's very much saying that israel will go ahead with its plan to attack trough -- rafah and take out the remnants of hamas that are there. a thousand fighters in the southern dawson city. it's important to note that is not just netanyahu saying this. it's politicians across the israeli spectrum. even the likes of benny gantz who is in the war cabinet but he's essentially the leader of an opposition party.

even members of leftist parties as well. they are not pushing back munch if at all against the ideal that israel has to go into rafah. the country seems intent on it despite what biden has decided to do by delaying this shipment of 3000 bombs. lizzy: so the international pressure perhaps not making much of a dent. but domestically, you've seen a significant expansion of israel's budget deficit. $16 billion so far. at what point does that become unsustainable and the domestic pressure changes the situation on rafah? >> i think that's a very important element. we've been covering the financial cost of the war. not just on gaza and the west bank but also israel since the -- it started. it is growing and becoming very significant.

you mentioned the budget deficit israel announced yesterday that the fiscal deficit through april was 7% of gdp. that's extremely high by israeli standards. that's larger than what the government was projecting for this year as a whole. it may say that things can -- that the deficit for 2024 won't go much above 7%. but that's going to be a tough ask. this war in gaza continues. obviously, israel is using huge amounts of armaments there. the skirmishes, the everyday skirmishes with hezbollah are continuing. netanyahu himself has said that israel will have to ramp up spending not thus -- just this year but for the years to come at least. i think this is something that's already having a big impact on the israeli economy.

i think it's increasingly clear that this is a medium-term thing if not a long-term thing. in terms of sustainability, for now it's ok. debt levels are fine. they still have very high credit rating. even a plus by one of the main agencies despite a downgrade a couple of months ago. on that side, they already ok. the war is more costly than israel was envisioning in the few days after october 7. lizzy: costly indeed, both financially and in humanitarian terms. paul wallace and dubai. we think you for that update. oil price at $84 per barrel. 7/10 of a percent higher. not just because of the geopolitics but also because of the optimism for a fed rate cuts. coming up, top chinese and u.s. climate officials meet in

washington for talks on curbing greenhouse gases. more on that story, next. this is bloomberg. ♪

lizzy: welcome back to bloomberg

daybreak: europe. the u.s. should develop a framework for dealing with national security issues in the tech sector. speaking at the bluebird technology summit. more defined measures will be important for u.s. companies that do business with the likes of china. he was commenting on the recent divest orban legislation targeting tictac -- tiktok. take a listen. >> what's important is that we come up with a durable framework to deal with these national security issues. the united states has resting -- recognize that they use are these -- are the issues. i think that has real implications for the economy looking forward. if you think about how many businesses in the united states have a relationship with china, whether they manufacture there or sell products there, it will be important for those businesses in the united states to get a lot of clarity. lizzy: we could continue this

theme of u.s. china tensions. they've been playing out in ev's as we were discussing tariffs. let's deep dive into the green energy transition and the impact there. over the past two days, u.s. and chinese climate negotiators have met in washington for talks on curbing greenhouse gases. it's been a rare collaboration between the two superpowers amid all the trade tensions. for analysis, let's bring in our bloomberg any gaps china research manager. these are the world's top two economies and the top two greenhouse gas and messieurs. how much headway did they manage to make? sisi: thank you for having me. i think the outcome of the climate talk is still unclear. the meeting itself is an important sign. it continues the rapport between their predecessors. their good relationship was

crucial in enabling collaboration between the u.s. and china in many important global climate milestones, such as the paris agreement in 2015 and the many climate cop meetings afterwards. so during their last formal meeting between john kerry in november of 2023, they issued a communique which called for high-level events on some national climate action in the first half of the year which i think explains the timing of the current set of meetings. lizzy: you are giving me optimism here about how they can collaborate. are there other areas where the u.s. and china can collaborate more? sisi: yeah. i think everyone knows the two countries are not best friends in the world.

but i think there are areas that the two countries can work together. one is that both countries supported the cop 28 initiative for tripling global renewable capacity by 2030 relative to 2022 levels, based on our forecast at bnf we expect china will reach this goal while the u.s. may fall short. this is despite the additional incentives from the inflation reduction act and partially because the u.s. is currently facing challenges in permitting issues. i think another area which also highlighted in the talk should be meeting reduction. because the statement that we talked about earlier also called for a technical work group from two sides to advance policy and

technologies in curbing methane efficiency -- emissions. if we look at the china side, only one company is a member of the u.n. backed oil and gas methane partnership. oh gmp is an entity that develops straight -- stricter reporting standards and measurement-based approach. lizzy: we will have to stop there. excellent research. a bit of optimism on the u.s. china collaboration. if you would like more from the bloomberg any gas analysts, download our podcast wherever you get the podcast. when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working.

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♪

lizzy: good morning. this is "bloomberg daybreak: europe." i am lizzy burden in london and these are the stories that set your agenda. stocks in asia higher after an upbeat day on wall street, with u.s. jobs data supporting the case for fed rate cuts this year. in the u.k., bank of england governor andrew bailey opening the door to a possible cut next month. a bloomberg scoop, the u.s. is set to impose tariffs on chinese electric vehicles and strategic sectors in a sweeping decision to be unveiled by president biden as soon as next week. plus, prime minister benjamin netanyahu says israel will fight on in gaza, with or without u.s. support. this as washington threatens to withhold more bombs if rafah is invaded. well, good morning. we do have the latest tsmc sales for you. it is coming in at $236 billion -- taiwanese dollars. so far, we have seen tsmc really

being one of the world's most valuable companies, the chipmaker seemingly making everybody's logic chips. we are talking about the likes of nvidia and apple. there had been concerned that ai demand would not hold up or that a smartphone recovery could take a while. but you are seeing there in front of you up 0.75% so you could see a read across in asml shares at the open. more broadly across the markets, it's been a good month so far for stocks and bonds at least after the tumble in april as we get more confirmation of an economic slowdown. the s&p 500 topping 5200 yesterday. the futures pointing to a higher opening on both sides of the pond. if we flip to the cross as a picture, you can see a bit more

of the impact of that jobless claims data in the u.s. yesterday. we have the dollar a touch weaker yesterday, currently pointing to the upside. you had outperformance are shorter maturities yesterday but let's see if austan goolsbee manages to move the needle when he speaks later. a look at the pound, 1.25 is where we trade, a touch stronger after the boe decision yesterday. it was slightly weaker and then recovered as we have the suggestion, strong suggestion that a june rate cut is potentially on the cards. 60% is the chance currently priced in markets of a june cut. a look to oil, brent trading at $84 a barrel. we have the geopolitical news that we have been discussing, but of course also, the weaker dollar making commodities broadly more attractive yesterday. xi jinping has pledged more rail

and energy investments in hun gary following the chinese president's visit to europe. he is counting on viktor orban to push back against accusations by other eu nations. we will get more. president xi is going to ramp up his visit today. i wonder how you think it has gone and what he has managed to achieve. because he is trying to present it a different case from the rest of europe, a bit of an example of how they could behave towards china. >> indeed. xi basically managed to achieve that. what we have seen yesterday is that xi and hungary's orban signed an agreement, well, 60 different agreements for all sorts of investments ranging from nuclear energy to various rail links. what we can say about hungary is that this country has gone all

in when it comes to investments from china. they have a place where china is building, one of the chinese producers is building a manufacturing hub. a new building will be announced today, a company will announce its factory in hungary, so clearly there is a very close operation, very close investments between china, xi and orban. hungary, they are a priority partner for china, wish obviously considering what's going on in the eu, when we talk about the overcapacity, about china flooding the eu market with subsidized ev's, obviously, that shows hungary sort of

standing out, going its own way. lizzy: earlier in the trip, you had xi visiting president emmanuel macron, he also met ursula von der leyen. where does it leave relations between china and the west at the end of the strip? piotr: what probably xi managed to achieve is to drive a bit of a wedge between some of the members of the eu. when it comes to western parties, especially france, germany, but also when it comes to some of eastern europe, they are very much aligned when it comes to approach to china. and what xi jinping managed to achieve is, obviously, in france, he obviously had to deal with awkward questions about his approach to the war in ukraine. he had to face questions about the overcapacity's, which she pushed back against. he has not faced those questions in places like serbia, where he was showered with praise, and the same in hungary. some of that has been achieved.

at the same time, we have to remember that in 2012, china has launched 60 plus one investment cooperation with countries, mostly in eastern europe. and of all those countries, there's only one left when it comes to eu, that's hungary, and serbia. there is a partial achievement in trying to drive that wedge. but when it comes to, but it's clearly very limited to the countries such as serbia, which is outside the eu, but wants to be a member, and hungary, which is in the eu, but clearly going in the chinese camp. lizzy: ok, piotr skowronski, who's been following that trip a president xi's over the past five days, we thank you for the overview. some other stories making news, bloomberg has learned that hsbc and standard chartered are among major u.k. firms pressing the prime minister, rishi sunak, to

tone down proposed restrictions on doing business with china. sources say the banks are lobbying ministers not to include china in the strictest risk category in some new national security legislation. they argue it would impede business and trigger negative publicity. elsewhere, bloomberg has learned that ubs is considering introducing a reward system for investment bankers who refer clients to the firm's wealth management business. some bankers would likely be in line for payouts when they successfully attract new money to the lender's private banking unit. the referral fees would be a first for the swiss lender, echoing earlier incentives that credit suisse offered to dealmakers. staying with banks, we go to spain because sabadell has accused banking rival bbva of breaching laws in its hostile takeover bid as tensions mount between the lenders. bbva is seeking to buy sabadell in an all-share offer.

we can bring in our deals reporter. why is this deal so important in spain? give us the context. >> hello. i mean, it is important indeed because it would change demand -- dramatically the banking landscape. we've got bbva, spain's second-largest lender trying to buy another very significant bank in spain, very present in catalonia. roughly $12 billion all-share offer, that is hostile. it is unprecedented. you have to go back all the way to the 80's at least to see such a move in spain and in europe. hostile bids and banking are -- in banking are not very frequent, just precisely because

they impact the financial system. and as such, they are also very politically driven or sensitive. and here, we have got a major move. we have seen a lot of consolidation in banking in spain since the global financial crisis. and this would be a major step in that direction. now, the question mark, is what's going to happen next, given it's been a very politically driven deal. lizzy: there's hardly any precedent for this in spanish banking but it's not the first time bbva has try to make the offer. if it is not successful, it is -- is it the nail in the coffin for this potential deal? >> yes, precisely. they tried and failed about three years ago. it did not go very far. this hostile bid now, this tender offer in the market, we will see, we will see how it plays out. i mean, it is a little bit

unprecedented, so there's a lot of questions. bbva seems to suggest they have got some important shareholders backing the bid. sabadell came yesterday also with a statement saying that bbva's move is breaching the laws, the takeover laws in spain in the way they have presented documentation. so, it is a little bit unclear. it's all up in the air as of now. but now is when it becomes really all about m&a tactics and the next moves will be critical for sure. lizzy: all right, our deals reporter, we thank for staying across that bid of m&a potentially in a spanish making. we brought you the latest tsmc sales, a 60% jump in april driven by ai. we can continue with that ai theme because the ceo of arm is

downplaying concerns over and ai spending slowdown. that was fueled by his lukewarm revenue forecast for the fiscal year. he told us what he is still confident in the chip designer's long-term growth. >> we are actually forecasting even higher growth this year, north of 20%, and we also signaled to the markets yesterday that in a 25, 26, 27, we see that growth continuing. we have incredible visibility to our business and we are very confident of this growth rate going forward. >> i want to focus in on the cell phone play, because that's been where your bread and butter has been in history. how are we looking from a smartphone perspective? is the market looking strong for you? we have had many a mixed message coming from china demand, for example. rene: overall, what we have seen in the smartphone market is quite a good growth rate for royalties. are version nine, which is now being used in many of the premium mobile phones, that

drives a higher royalty rate for arm. there is more complex cpu's that go into that, that's also better for arm. one of the things we are seeing, it's not just the smartphones, is that as these ai models are moving so fast, the hardware cannot keep up with the software. the software innovation is happening so quickly that by the time the hardware is ready to run those models, everybody wishes they had more performance, they had more efficiency. what does that mean for arm? it's driving growth in our licensing activity. people are looking to do more and more, design chips faster and faster, and that's good for us going forward. so i think going forward, you are going to see more and more innovation happening, not only in the smartphones, but across all these devices. >> what's been keeping up is your evaluation. boy, do you think there is too much exuberance around ai valuations out there? are you going to make the most of it by listing in the u.k., too? rene: you know, i don't think

about the valuations as much as i just think about the ai opportunity, which i frankly believe is under called in terms of just what it's going to mean relative to society and what it can do for our planet. i think, again, we are in very, very early days in terms of the capabilities of what this can unleash for our society. incredibly excited to be part of it. but i do not think we are part of a hype cycle at all. i think there's a lot of innovation taking place. and, you know frankly, the innovation that's taking place and the inventions that we are seeing, it's just breathtaking. so no, i don't personally view it as a hype cycle. lizzy: that was arm ceo, rene, haas, speaking with caroline hyde. recapping tsmc sales, a 60% jump driven by ai taking them to 236 billion taiwan dollars in april. this is after a really tough year last year, muted demand for personal electronics. there have been concerned ai

demand would not hold up or that smartphone recovery could take a while. alas, no need to worry, it seems. the global smartphone industry returning to growth over the first three months of the year, including in the highly competitive chinese market, which really could drive orders for the traditional mainstay of mobile ships for tsmc. will we see a read across to asml shares at the european open? we shall keep an eye. bloomberg has learned that apple will deliver some of its upcoming artificial intelligence features this year via data centers. sources say the high-end ultra chips will be deployed in cloud computing service designed to complete the most complex ai tasks. apple set to lay out their strategy in that area in the coming months. we will get back to the monetary policy. the bank of england sending its clearest signal yet that it is closing in on the rate cuts.

we will discuss that and the fed within the global head of private capital advisory at raymond james. stay with us. this is bloomberg. ♪

♪ lizzy: u.s. jobs data supporting the case for fed rate cut's this year. that's after jobless claims hit their highest level since august. joining me now to discuss is sunaina sinha haldea at raymond james, global head of private capital advisory. pleasure to have you with me in the studio. let's talk about the fed. how patient can it afford to be? sunaina: it can afford to be quite patient after being late to the party when it came to inflation. the big concern is if they let the inflation genie out of the bottle again, it will be twice as hard to put back without breaking something. they are right to be cautious. how cautious?

that's the question. we are in the bad news is good news territory within the u.s. jobs print showing a print that's encouraging for the rate cut dovish arguments. it would be hopeful, it would certainly point in the direction to potentially one or two rate cuts this year, not much more than that. lizzy: you are optimistic but are you in the camp that does not rule out a hike before the cut? sunaina: i think so far, the rhetoric seems to be, especially from the chairman of the fed, jay powell, that we will not see a hike unless the data completely goes the other way. yesterday's jobless print shows a softening in the labor market. one of the things i am really looking at is that lower income consumer in the u.s., which is facing higher debt service and costs at a time when inflation has hurt them -- servicing costs at a time when inflation has hurt them as well. you are starting to see some softening creep into the labor markets. all of that is trending in the direction of a softening economy.

can they achieve this soft landing sls no landing scenarioh -- slash no landing scenario? we will see. lizzy: equity markets taking enthusiasm, encouragement from that narrative. we had the s&p flirting with this record yesterday. where do you think it will end the year? sunaina: such a $4000 question for sure. i think the issue with the s&p or the tailwind behind it, rather, is that the technical flows in the market remain very healthy because of a cycling out of money market funds, which were the flavor of 2023, as we all know, into more risk assets. we still see a lot of support for on risk behavior around the world that's finding its way into equity markets and other capital appreciation plays. i think that remain -- that will remain the case. we continue to see those technicals really pushing up rather than a fundamental analysis.

on a fundamental basis, some of the european and u.k. markets look even more attractive. lizzy: the ftse 100 yesterday getting a beat yesterday from the bank of england decision. do you reckon we will have a june cut? sunaina: it looks very likely. it looks very -- it is in the cards from all the messaging yesterday. the one thing that will make life complicated for the rate cuts is the economy starting to grow, and well, as we saw in the first quarter. i think they too will continue to keep that balance of growth versus inflation in mind. but so far, so good for a june rate cut. lizzy: just how attractive are u.k. equities when the bank of england sounds more dovish than before? but is it as dovish then as the ecb? is it more dovish in your mind? sunaina: i think the question is, of course, there is the rate differential argument between fed versus bank of england and

ecb. beyond that, remember, you've had a pounding on the ftse over the last year and a half because of the lack of depth in the markets, which has pushed down relative valuations. versus ecb, i think it is six of one and half a dozen of the other, the others will pick their spots in indices and company by company basis. on a relative basis, but markets look relatively cheaper than a lot out there. lizzy: given raymond james is one of the world's largest private wealth advisors, another long-term question. just how much more of the money do expect to be allocated in private equity by the end of the decade? sunaina: we are seeing a secular, once in a generation move from a high net worth and ultra high net worth individuals into alternatives at-large, especially private equity, infrastructure, private credit, and so on. that's because individual investors are saying they too

need to manage their portfolios away from just a traditional equity bond story. there is a big tailwind shift into adding alternatives to their portfolios, which is pushing up those inflows into private equity materially. lizzy: there has been a shortage of debt financing because of higher interest rates. you have seen firms turning to private lenders. i do wonder whether that will reverse with the rates seem to be coming down. but excellent to have you with me on the program. sunaina sinha haldea, global head of private capital advisory at raymond james. we will have plenty more still on the program. this is bloomberg. ♪

♪ >> we have changed our view on the likely persistence of inflation, or second round effects.

it's good news. we think there evidence that suggests they will be less pronounced than we thought they would be. lizzy: bank of england governor andrew bailey there. the boe a step closer to cuts. market is pricing a 60% chance of a bank of england cut. it was 40% before the meeting, e nding the day here. the bank of england is looking even more dovish now than the fed or ecb in the eyes of markets. if you flip the board, you can see that chartered for you here -- charted for you here. the boe in green, ecb in blue and the fed in white. why is the pricing so different from yesterday? we had various dovish signals, didn't we? we had the forecasts updated, really pushing back against the market curb. we had the guidance somewhat lagarde-esque, suggesting if the

data points come in the right direction, that june cut could be something they would not shut the door to. we've had a more dovish vote split. we will get more of that economic data in just a few minutes time. four minutes to u.k. gdp. it is the march numbers completing the set for the first quarter. it's going to look like the economic recovery is continuing, or at least that's what economist expect. they will discuss it on "bloomberg markets: today," next. anna edwards and guy johnson will take you through the next two hours of bloomberg, so stay with us. this is bloomberg. ♪

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♪ anna: good morning from london. this is "bloomberg markets: today." i am anna edwards alongside guy