>> this is bloomberg daybreak. i am tom mackenzie in london. these are the stories that set your agenda. the end of after tumbling past another psychological milestone for the first time since 1990 as intervention nerves fuel volatility. this as market rates for a hawkish tilt when the fed meets this week. antony blinken will step up efforts today to secure a truce in gaza as is really forces >> listed in the netherlands and this is the head. less about the earning story and more about this agreement and the challenges they faced around

the safety of some of their kit. particularly that sleep apnea devices. the phillips reaching a $1.1 billion early settlement in the sleep apnea case. that? haslinda -- leader for this company and it is coming in below that settlement number. $1.1 billion is the early settlement in that sleep apnea case in the u.s. for phillips again. a number coming below many of the estimates. we can seem to look out for details into velti order outlook. drawing a line under some of the issues they face. the softness.

we are speaking to the ceo of phillips later in the show. that is 6:40 a.m.. don't miss that interview. given this extreme volatility we saw. the fed's decision will be controversial. with reminding viewers that japan is on a holiday today so the quiddity is in. you're looking in terms of the futures, european stock futures. all of that in terms of banks and health and autos.

s&p futures building on the upside of last week. let's flip the board cross asset and check in on the end. the moves have been dramatic currently. she we continue to break down this story for you in the detail across the show. euro-dollar at 107. we look ahead to spanish cpi data. >> the focus is quit squarely on the japanese currency. we are also seeing a run-up in asian equities. japan closed today.

this is in large part to what we got from the positive hand over the last friday. investors are choosing to focus on being optimistic and the positive sentiment coming through from those tech earnings but also the monthly pce data which believed some of these concerns after a string of those surprises. we are seeing that recovery in the asia-pacific today -- what i wanted to highlight is what we are seeing on the hong kong stocks. the hang seng climbing nearly 20% from his most recent lows in january. technical definition of a bull market. it is coming against a very low base but a couple of things to highlight and this recovery we have been seeing is how corporate resilience -- those earnings have been coming through. today specifically, what we are seeing in the movers is the chinese lenders. it is also due to what we are

seeing on the property sector. especially after a major developer said it reached a solution with bondholders on the quiddity issues. that is hoping to alleviate some concerns about the real estate sector responsible for a lot of what we are seeing in the chinese stock markets. the gauge surging by the most since 2022. let's flip the board. we are looking closer at the japanese currency. walking through what we saw in the past 12 hours or so. it was that ridge above 160 on the dollar-yen. this is exacerbated by the thin the quiddity today. perhaps not that surprising we are seeing these huge price rings. they reminded some traders to reduce their get exposure. moving back toward the 155 level as you will now.

>> thank you. ava we stay on the end story. i had to pass myself when i looked at the moves there. she percent higher now versus the u.s. dollar. that 160 level on the details there. mark, what is going on. >> a bit of everything today. a huge swing. they really got much more exciting after we touched 160 earlier in asia. all of the movements are probably being exaggerated a bit. get into that point of 160, this is probably enough. they probably then earning their profits again. he probably was a that is good enough for me and we saw some start to cash in point. since then, things have gotten really skittish. they have been checking rates. none of it has been confirmed but on a day when people are

already starting to see a bit of dollars selling and the market is a little bit less liquid than usual and you have the fed meeting coming up this week, throwing those things together and there is no wonder that traders are saying i don't want to stick around to see the details. i just want to get rid of some of my physicians and cashing what is left of my profits here. it is the kind of thing where we have seen huge swings in asia and the european's only getting started now. i suspect they will get in to as much of a busy day as we were into asia. >> we are looking ahead to that fed decision, that ties in to the potential moves around his japanese currency. on the yield story in the u.s., across the treasury curve, how much sensitivity is there to a jay powell does to cement in a private -- pivot toward a more hawkish fed? because that would be a reaction in the treasury market. traders have not given up on the

idea the federal reserve will cut at least once probably in the fourth quarter. they've already scaled back a long way. they have not completely ruled out the possibility the fed will be able to do that. if jerome powell leans a bit more hawkish than people are expecting, you certainly have some reasons to do that because inflation data just last week was a little bit harder than he would have wanted to see. employment situation -- the data is not supporting the case for the federal reserve to cut rates at all. we have this overhang here still talking about three cuts. there will need to tweak that when they meet in june. here we are with time not on his side. he will have to be realistic about it. he may even have to give a hint that i don't see any reason for us to move. he can take his time. taking his time might be good

until 2025. if the bond market here is that, there is probably room for treasuries to sell off a bit more. request interesting analysis. we lead into that decision from the fed. investors will be queuing in or turning in very closely. there was more cranfield setting us up in terms of analysis around the end. this was to a big corporate story. this was a surprise coming from elon musk in china on this unannounced trip. the test ceo seeking approval for a driver assisted software that could help with tesla's revenue decline. we heard from us in beijing. take a listen. >> it is good to see them making progress. >> musk in china then. let's bring in jill. musk is a surprise. what is he trying to accomplish exactly? >> it seems like it is all about tesla. this surprise trip.

i actually found it particularly catching us off guard. we had been preparing for was a visit by elon musk to india. he was inspected to meet with my minister modi. here is in beijing. he actually met with premier li qiang. working as the top communist official in shanghai when elon musk put together that deal for the tesla gigafactory. request now seems like what elon musk is ultimately trying to accomplish here is making some headway on getting full self driving. it is the semi autonomous driving functionality within tesla cars approved in china. it has obviously been a pretty witty obstacle for tesla to ultimately get over because there is a lot in technology concerns but also national

secured concerns. it seems like that is what elon musk is in china trying to clear. the baghdad hurtle toward this tesla technology. >> we hear they are deep in their relationship with baidu. that has one of the leading autonomous driving platforms in china. how significant is that partnership to pushing through and pushing past some of these hurdles? >> exactly. presuming that partnership goes forward, that seems like that is what would enable tesla to ultimately accomplish getting this technology into vehicles in china. this is coming into focus what happens there. it does seem like what tesla would be able to account which is partnering with baidu to get some of this self-driving autonomous technology into cars again. when it comes to this tesla technology, what exists already is something that needs to be

constantly self monitored. it does seem like partnering with baidu on some of this technology, this navigation structure would ultimately get tesla to clear up any significant hurtled toward entering the market with some of the technology that would enable her to provide technology that allows it to scale up an incremental around -- amount of revenue. >> all right, joe. that was on that an -- that unannounced visit by elon musk. america's top diplomat writing to saudi arabia to push for gaza once again as israel prepares for a possible rough attack. more on that ahead. plus, phillips reaching a settlement in its sleep apnea case. the ceo will join you later for more on that. the company's latest results broke about 13 minutes ago.

so they have reconfirmed their guidance for the year but consequential in terms of coming to this settlement. the dollar figure has come through at 1.1 billion. is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. auntie like he will step up to secure a truce in gaza. lincoln is in saudi arabia where he will attend the world economic forum meeting. they spoke at that meeting, calling for a in gaza. >> it is very unfortunate to see them. whatever that is.

civilian life is important whether it is in ukraine or not. for the last several years, we made it the objective that we de-escalate from the region, the region need stability. >> let's get more from the middle east anchor. what should we expect from blinken's latest visit to the middle east? can he move that i on this conflict? because that is the big question. i thought it was interesting to get this comments from the finance minister. saying that geopolitics is still front and center here. that is why the special committee -- special political meeting is taking place. we know the entity but he just landed in riyadh a short while ago. he will be having some one-to-one meetings.

he also will be having a fireside chat with the world economic forum president. engaging in various diplomatic discussions. he is also expected to have a discussion with the leader -- the leader of the palestinian authority. they were quoted as saying it is only the u.s. who can convince israel the prospective counteroffensive. and ultimately raise questions about the longer-term future of gaza who will be governing gaza and what does the reconstruction effort look like?

i tall ask but it is significant that so many heads of state and diplomatic leaders are here for this conference. >> indeed. you have been intended the world economic forum. what have you been hearing about this event in riyadh? >> able to back to that panel we had at the beginning of the summit yesterday. the goal is to de-escalate, de-escalate, de-escalate. that is the message and we are getting from saudi arabia. more broadly, the same discussions we've been having the last couple of months, the sum is particularly focused on growth, how to revive growth over the medium term. collaboration and the big

question for the reason for the rest of the world, how to work together on an energy transition. many different discussions going on here. the growth has been -- has done better-than-expected for the geo political shots we highlighted in the medium-term. lots of challenges. and bringing along lower income countries as well. >> thank you very much indeed, covering the world economic forum and give us the context on these talks in gaza. this get back to what is happening with japanese yen. these are the kinds of moves --

on a day when the national holiday -- 156 is the japanese yen. plenty more, stay with us. this is bloomberg. ♪

>> welcome back to bloomberg you break your. bhp is making an approved proposal for anglo american after his $39 billion bid was rejected. bloomberg understands the australian minor is discussing a revised proposal in the coming weeks.

this is trying to convince them to back the offer. key to the rationale for this potential takeover. this is the asset story around copper and the run-up we have seen in prices around 10,000. still breaking about that $10,000 level. that demand for copper is so central to the renewable energy story. around renewable energy more broadly in the supply is not mention that demand. they are questioning apple over growing concerns about the conflict minerals in iphones and

other devices. what is the bone of contention in this formal notice. apple is responding to this allegation saying that since 2016 they been auditing their supply chain and they are reasonably confident that the minerals don't exist in their ecosystem but they have their work cut out for them because consumers are more aware and cautious of sustainability. >> for the as to have apple

grapples with these accusations. what is the role of rolando it comes to this debate? this row over minerals and the conflict. >> they have been under a lot of criticism for their support that have expanded their territory, particularly area. also the air missiles that endanger the lives of civilians. they are fighting back and saying they are not going to respond to this baseless allegation and that drc is working with defectors but as this blame game continues, 6 million people have changed. livelihoods continue to be impacted.

and catch ever can amplify for more coverage of the continent. this puts south africans -- south africa's upcoming election. this is where the ruling party may face one of his biggest challenges since the end of apartheid. that is africa amplify. let's bring you up to speed on what the moves -- how the moves are shaping up around japanese yen. 156 right now for the japanese yen first the u.s. dollar. it fell. the currency. 1.7%. it ended 1.7% lower. it broke through before reversing some of that. it is a holiday in japan, liquidity is very thin.

pedro sanchez over in spring -- spain expected to announce whether he is resigning as a country's prime minister. we will get all of that next. what does the pm do when this is the economy of spain. this is coming up. this is bloomberg. using

>> good morning. this is bloomberg daybreak: europe. i am tom mackenzie in london.

the end extends gains after tumbling past another milestone for the first time since 1990. as intervention feels volatility. this is marcus brace for a hawkish tilt when the fed meets this week. antony blinken will step up efforts today to secure a truce in gaza during meetings in the middle east. plus, elon musk making an unannounced trip to china. as tessa announces a partnership with baidu for self-driving approval. let's check in on these markets. it was the best week for u.s. stocks since the start of 2024. with the earnings season continued to propel the members around u.s. stocks while a hawkish fed put a roadblock anyway. european futures with a big week

for european earnings as well. we have banks and the health sector, the automakers as well looking to build on the gains of last week. up .4%. looking higher by .3%. 20 higher by .4%. let's of test look at the left around a deep partnership with baidu. cross asset, weekend zero in on the japanese yen where it has been a wild day for this currency. earlier today, it broke through it -- it broke through 160. we have the moves higher. now you are seeing strength for the japanese currency for around 1.6%. almost making up of the drop we saw on friday.

>> let's unpack what we are seeing on dollar-yen. just a couple of months ago, we saw this below the 115 level. after the biaggi height for the first time in 17 years, somehow it managed to send dollar-yen higher. it really was a dovish hold.

just setting the scene further. we saw that pop above the 160 level. some have pointed the finger at what that move has highlighted -- ab traders are reminded they want to reduce their get exposure. those intervention jitters coming back to the forefront. we are seeing the end move back down against the greenback. it is not just the dollar moving lower. we are also seeing that recovery against the euro, the pound, the swiss franc as well. this is against the backdrop of that data coming out as well. it has always been about the yield gap as well. this is where we -- this is where we are embracing potentially after a string of upside surprises. not just about the levels we are watching but also the volatility.

what we are seeing today is exacerbated by the market closure, thinner liquidity. if you look at the implied levels, it is near the highest level we are seeing this year. the highest was last thursday below -- before the b of a -- before the boj decision. this shows that traders are really bracing for you swings on the end tomorrow. >> the story isn't going anywhere. one of the people at the moment is that there is a chief speaking at tokyo saying he has no comment when asked about these fx moves. a consequent a consequent supplier in this whole debate. let's switch focus on japan to spain where we are expected to find out in spain whether the spanish prime minister will resign, his deliberations on staying in power come as the court announced inquiry targeting sanchez his wife were alleged influence titling. i am joined by the senior

analyst at the eurasia group. a number of options then at the spanish prime minister disposal where he sees -- seems to make clear all of this. does he call an election? a no-confidence vote? does he step down? what do you think he ends up deciding to do? >> theory expected. i would know the accusations against the prime minister's wave are not particularly substantiated. no new concrete evidence behind them. they may not even lead to prosecution. on the backdrop i think of decision tubes i could be seen as something of an overreaction on the part of sanchez. lots of reasons why he may be doing this. this could be a personal nature.

there is also a lot of speculation of the european union with european parliament just around the corner. let's not forget that sanchez presides over a minority government. they have been having a very difficult time getting basic legislation through parliament. a more cynical but more plausible explanation is he may be looking for a way to rally support and rally his allies behind him i had of important regional elections in catalonia next month.

>> on that point, that actually raise the probability. in the current context, the

opposition has a solid lead. it would look really risky for him. i would never caution this. he has proven this -- that is a huge gamble. this is a vote of confidence on himself. >> when it comes to the political future, what does that do to the economy? is this putting off the investor flows into spain? how does this impact the

economic prospects? >> that is the key question. it is actually remarkable how little spanish ss have been affected by the political uncertainty. this has been the story throughout for many months. despite the chronic political uncertainty we are seeing in the country, the economy has continued to do well. that is the main reason. so long as the economy continues to come along, investors have been able to look through all the political uncertainty and the political risks here. spain was less affected by the energy. the economy is performing better than many of its peers. i like to think that would remain the case. the longer the political uncertainty goes on, the more problematic it is for the economy. i think we will start to see this have more of an effect. another key concern we have is going to the disbursement of eu

funds of which there is a major beneficiary. it started well but spain is already sort of falling behind schedule. we already have a fully functioning government in place. questions briefly before we let you go, look at the caveat around the ball numbers. popular party, the conservatives are leading in the polls. if we end up in a situation when it up in government in the near future it's been, how does the policy agenda change? >> i would take them with a big grain of salt. that is part of the reason why we have not seen an impact on the economy. and on sort of a more conservative government led by the popular party. i don't think we would see a huge change in terms of the economic policy.

by and large, spain's position in the eu -- fiscal discipline, the outlook for fiscal policy reforms, the inflow of you funds, everything that would change, even having the far right involved in government. that is undoubtedly a reason for uncertainty. that is one reason people have been more willing to look through the medical uncertainty. >> ok. thank you very much indeed, the ricoh. coming up, i will be speaking with roy? what about the latest results and importantly the settlements they have come to in a key u.s.

sleep apnea case. that is just ahead. this is bloomberg. ♪

>> welcome back. phillips will book more than a billion dollars to settle claims filed in u.s. court related to a sleep apnea device recall. very pleased to say i am joined by the ceo of the company. thank you for your time. let's start with a settlement. coming in well below some of the estimates that came through from our team and others. does that settlement prevent future personal injury claims? to what extent does it draw a line around this? >> two important parts of the news today from phillips, we announced we have a start in

line with our plan. that means we showed growth, we had strong margin improvements. a very -- a number of very key milestones here. court approval on our economic sentiment. we also got a sentiment agreement with the insurers for an income of more than -- more than 500 really. and most important we got the resolution of the personal injury case in the u.s. to an uncertainty that was related to that and to get the vast majority of the issues behind us so we can fully focus on the business and we also reiterated with confidence the three to 5% sales growth. we upped our cash guidance.

>> does the settlement prevent future personal injury claims? >> it was important that we saw the full u.s. litigation case. even the ones that would come in over the next six months. this actually put behind us the vast majority of the claims because those were in the u.s.. that does not mean that everything is resolved. the folks who had the doj also investigated us. we had a whole suite of actions that we had taken in resolving the recall. as i said before, we also reached an agreement around economic loss and medical monitoring.

can you give us an update on that? how is that unfolding? what are you provisioning for that? >> it is ongoing. we can also speculate on the outcome. what we are focused on is driving innovation for health care. health care is under a big strain. ai driven solutions are really in demand to serve that market and address the shortages of staff but also to address more patients with better care. >> i want to get onto that market question. the total cost surrounding this recall is around 5 billion u.s. dollars. you do expect additional costs to be added to that number.

there is more that you will be after -- you have to put aside for this. >> at this point we are not aware of anything else we need to put aside for this. what we have been coming out with today, that is something we are working on. there are ongoing investigations i was we just discussed with the doj, but what is unknown is if there will be in a what does for that. we need to bring back to phillips where it belongs with sales growth, cash improvement program this year we had a full year outlook and we are strengthening our operational cash profile. even if there would be more coming, they would -- we are confident we can pay out-of-pocket. first of all, we remain focused on growing the rest of phillips to its full strength.

what is one billion out of 18 billion wescott 18 billion? that makes them meaningful in addressing the challenges in the health-care care statement and also serving our consumers perk up -- consumers. >> when you see the chinese market turning around? >> i was encouraged to see they allowed the new subsidy program for the market. this is to replace their equipment. we expect that will support gradual strengthening of the market. we are also active in the consumer segment. we see that sellout is started to increase a bit. we expected for the second half

of the market that the chinese market will strengthen. the difference that is important for us to get the growth out of the rest of the world and therefore, we are looking for to a strong start in north america. we see the middle east coming up and even europe showing some stronger growth. >> we have very little time left. you expect strength in the chinese market in the second half. just make sure i have that accurate. clerks that is right. that is our best estimate as to what is happening. >> roy, we really appreciate your time. the outlook as well for the water demand for that business and his devices. we really appreciate your time. plenty more coming up on bloomberg. this is bloomberg.

>> welcome back. the report results this week will be a key test for that sector. let's bring in tim. the director of research for bloomberg intelligence. what is your take away so far midway through the results as to how these companies performed? tim: this is an important earnings. perk up we need to see a sign of infection with interest rates rising and the whole idea about central-bank papers being pushed out. what we've seen so far with almost three quarters of market cap having been reported is about equal beat versus miss which is what we had last couple of quarters. about 3% negative earnings growth which is a lot better

than the significant decline of the last couple of quarters. two thirds of the companies are exceeding expectations. that is a big deal. >> who are you most excited about? >> it is pretty interesting. you have a few tomorrow. you have adidas which is a big turnaround story. we continue to seek momentum relative to nike. you have volkswagen and mercedes. important from the standpoint of finger on the pulse with china as well as what is going on with ev's. a couple of big pharma this week. the decline has started to perk up. that is up about 20%. still really really valued. also i critical in terms of what is transpiring with this whole anti-obesity trend and thesis.

good stuff. >> would have been the key drivers of that relative strength we've seen so far? >> this is what is really interesting. you have volume and pricing that are better than expected for consumer staples companies. we have seen the results coming through on pricing for some of the chemical companies like bsf f. profit margins have come through generally better than expected. the net interest margin is better-than-expected for the european banks which has been really notable to see. and in industrials. that is really important for the region. whether it be a bb schnider, etc..

>> a really important set up. you're kind of seeing the volatility. it is the strength coming through. the transfer the japanese currency is out now. they often tumble through that 160 level. this is the story we continue to impact for you. we bring you more on the end, the boj.

>> this is bloomberg markets today. cash trade is one hour away. the last few hours have seen wild swings.