♪ >> good morning, this is

bloomberg. these are the stories that set your agenda. hire for longer after the central bank holds rates. jerome powell keeps cuts on the table, with the timing is less than certain. jerome: it is unlikely that the next great move will be a hike. tom: the yen tumbles pairing a rapid rally on suspected intervention and a big day for earnings, standard chartered reports a profit beat. shel and novo nordness report, but first ing. this is the news coming through,

two and a half billion euro share buyback following a previous buyback. rewarding investors with additional cash. in terms of net income, this came in in line with estimates of 3.8 3 billion euros for the first quarter it was a beat, the lender coming through with 1.6 billion euros, ing added 99,000 primary customers, but the buyback of two and a half billion euros. i will be speaking to the ceo at 6:15 a.m. so stay with us. reaction coming through from the

lender. markets are digesting what we heard from jay powell, no surprise, but the language pushing back on the views that hikes -- they push back on that saying cuts were possible, european stock futures are lower , ftse futures pointing to 31 points. nasdaq futures looking to gain 150 points. earnings are important with apple crossing with their learnings later. and move lower in yields. we will get the details on the yen. down after the rally.

just below $84. gold holding firm on expectations of a cut. more breaking lines in terms of the first quarter, decent beat, 1.9 billion u.s. dollars. above estimates of 1.71 billion. was cross over to singapore were of role has a check of the markets. >> mixed bag in the reed johnson not giving much to the stock market investors. a rally on track for its longest win streak since 2018,

impressive considering it is doing this in the absence of support for its rally. china is show. chinese stocks are too cheap to ignore, but let's look at the sectors responsible. chinese tech names are due to report in the middle of the month and the idea is how u.s. counterparts have fared well this earnings season and maybe chinese names can do similar. keeping a close watch on real estate developers. sentiment is turning. idea coming through from bloomberg intelligence that we could see similar moves in major cities in china, in the

currency space we are seeing reprieve coming through. gaining ground against the greenback, bracing for a hawkish fed. the currency that did not benefit others goal is the japanese yen. this hit 1575 and was brought back to 153 and this smelled like intervention. we've seen three sharp moves, yen bears are back. they have the fundamentals on their side, it's about the yield after the fomc today. tom: thank you very much indeed. jerome powell keeping hopes alive for a rate cut this year

indeed, but inflation has reduced confidence that price pressures are ebbing. >> it would not be appropriate to reduce the target range until we have gained weight or confidence that inflation is moving toward 2%. so far the data have not given us greater confidence, in particular readings on inflation have come in above expectations. gaining confidence will take longer than expected. tom: let's bring in mark cranfield. if this was a pivot it was at the dovish end of the spectrum. is this the fed with an easing bias? mark: mr. powell would like to lower interest rates. in december he kicked off the idea of rate cuts, he was excited inflation was coming

down and dater showed we had a key reading at 1.9% below the key threshold. a lot has happened, several prints have been higher. a lot of backtracking and here we are, it is difficult to see them manage one rate cut but he's keeping the door open. in this meeting what he had to say was more helpful, slight surprise he gave hope to the bond market which gave help to the bond market. by reducing at a quicker pace some thought it would only happen around the third quarter so you will reduce it by more than half, take pressure off the

market. if treasuries are better, pressure will ease. does not mean yields will tumble, but equity people can look with hope at the exchange market, but it will take away pressure on dollar yen. tom: really interesting qt lines, reducing the cap. less bond issuance to digest and how that impacts equities. when it comes to what to watch for next, we get jobs data on friday. there was a few articulated that if you get a solid number on unemployment it could push the easing bias further in that direction. how consequential in terms of changing views on friday?

mark: jobs numbers is one of the big ones, but when you think it is plus or -4%, that is a strong employment situation, not much the fed can do. all kinds of inflation impacts are much more important. we saw earnings numbers on the high side. workers are getting more money and that will feed into the economy so it's all about elation impact. until they see improvement, it's got to improve materially. many numbers were higher than expected so back to square one, a few months of consecutive decreases and then rate cuts. tom: ok. mark cranfield with the analysis

from jay powell, thank you indeed. from the macro to the corporate facing stories and apples results after the market closed indeed. revenue expected to contract indeed amid a regulatory pressure and ai strategy concern. let's cross over to peter ahlstrom. what can we expect from the numbers? how much will be a china story? peter: all eyes are on apple, trying to figure out how the company navigates these -- these resistant forces ahead of it at this point. it's an unusual place, they've had an amazing run and now they are struggling. revenue declined this quarter. expectations are revenue will be down 5% because of the smart phone market and china has been

challenging. iphones are a big growth driver for many years. in china they are facing headwind because of the resurgence of wall way and shall me. we've seen them lose ground in china to those companies, especially wall way. the u.s. blacklisting cause some problems, now there is nationalistic demand for phones in particular. one of the things for apple is they are struggling in china, trying to figure out how to revive demand, opening up new stores. we will see if they are able to talk about the future and prospects. other key things are the headset they introduced, they view that as a long-term that and they hope it will show promising

results. they want to hear about apples ai strategy. we have not heard as much from them as microsoft or google and how apple is going to integrate ai. tom: on that, analysts pointed out the lack of clarity in terms of strategy. are we expecting details? do we have to wait for a big event? where do we stand? peter: we will get questions about ai. other companies have done more to articulate strategies. microsoft is the most aggressive. the ceo is in asia explaining how much they will invest in data centers, particularly in indonesia, india, malaysia, japan.

apple will get questions about strategy, but they tend to want big events where they can have a detailed strategy we've not seen that from apple yet. they are probably talking with many partners to figure out how they will incorporate ai in the future so tim coke will get questions about ai. >> ok, bloomberg's editor for asia technology, nice, thank you. we will get more details and an interview with the cfo of ing after a buyback. joined by the cfo to talk about earnings in just under 10 minutes, this is bloomberg. ♪

♪ tom: welcome back to bloomberg. the u.s. and saudi arabia closed in on a packed offering security guarantees and a path to ties to israel. sources are optimistic a deal can be reached although israel will be offered a choice dependent on ending the war and a path toward palestinian statehood. new york police arrested 300 people over protests at two colleges. they were made at columbia university and city college. agitators joined the protest, but it was disturbing how many nonstudents were arrested.

alphabet paid apple for google to be the default search engine in safari. the payments were revealed in court documents in the u.s.. the antitrust lawsuit against google showed the deal between the tech giants and alleges google monopolized the market for online search and advertising. qualcomm shares rose after an upbeat forecast. the outlook signals the market is bouncing back, tracking with forecasts that demand would recover. the u.s. company reported better results for the second quarter. coming up, ing announcing a 2.5 billion share buyback. the ce l of the dutch bank to talk earnings. that is next, this is bloomberg. ♪

tom: welcome back. ing reported first-quarter profit beating estimates. the bank announced a two point 5 billion euros share buyback. i am joined by the chief financial officer of ing. thank you for your time, let's start with a buyback. what does it tell us about your ambitions? we had a peak in buybacks. >> thank you, i think we had a strong start to 2024. growth is strong, deposit growth is strong.

feed generation has been exceptionally strong. we are on track. capital generation allowed us to do this share buyback. to address your questions, we targeted we would reduce the level of capital from our current 14 .8 percent to around 12%, so we are trying to make that conversion over two years. this is part of our plan to return capital or cash to shareholders in step-by-step function. tom: ok, we are not at peak buyback for the business? >> we look at many factors in determining the size of share

buybacks. capital generation, the level of risk, the stresses we see and commitment remains that we would look to bring capital levels down and stick to that. tom: i want to talk about net interest income. are we at a peak level given expectations that rates will come down in june? guest: yes, that is a big driver of results for european banks including ing. i was looking at the fed chairman discussion about federal reserve delaying rate cuts. that would have a read across to decision-making, so the expectation is june, but the shape of the rate cut will be benign.

without in mind, we believe we can operate in a structural way when rates are at 4% and profitably if rates comes down to 2.5 or 75, so we are a list. tom: you talked about the strength of fee income, how does that story evolve in the quarters ahead? guest: yes, one of the main strategies is to become less interest rate driven, more capital light, so we target fee income growth around five or 10% and first we grew fees so it gives us a good base to stay within five to 10% outlook. we are confident of reaching that levels in 2024. tom: what is demand for

mortgages and loans looking like and the strength of the euro zone? guest: yeah, on mortgages we see volumes picking up, rates going up, mortgage demand declining for a number of quarters. resumption of lending and the pipeline is stronger, margins are improving. origination margin is beginning to improve from a low and i think in the wholesale bank we see the same phenomenon. pipeline is building up strongly, we are quite optimistic about resumption of loan growth on the back of low interest rates. tom: concerns about credit quality, any examples of that deteriorating? >> not yet.

we see our ratios at 1.5% historic low. risk is benign, below cycle average. i think this is a credit to resilience of our customer base and the euro economy. the situation remains quite resilient and solid, driven by tight labor market and low unemployment. i think we are optimistic about the condition. tom: i want to ask you about your exposure to russia. early on, puppy coming through ,

the cfo coming through of course with a buyback as well. quickly checking in on standard chartered, that came through with a decent beat across most metrics, trading picking up for the company. exposure to asia gaining 5% in the hong kong session. we will watch that at the open in the u.k.. a beat, plenty more coming up. this is bloomberg. ♪

tom: good morning, this is bloomberg daybreak: europe. these of the stories that set your agenda. higher for longer, that is the message from the fed after the central bank holds rates for a six time in the road. fed chair jerome powell keeps cuts on the table where the timing is less certain. jerome: i do think it's clear that policy is restrictive. i think it's unlikely that the next policy rate move will be a hike. tom: more stocks in asia arise. the path whipsaw stumbling into the session carrying a rapid 3% rally on suspected intervention. plus, ing announces a 2.5 euros share buyback after the dutch bank tops profit estimates in the first quarter. standard chartered also rising in hong kong for its own profit beat. here is the biggest european company by market cap. novo nordisk coming through with

results. novo quadrupling the number of patients starting in the u.s. quadrupling the number of patients starting on that weight loss drug in the u.s. we knew there was scrutiny from analysts on that around supply chains. novo sees for your sales at a constant effects, up 19% to 27%, higher than the estimates at the top end. the estimates have seen for your sales at around 26% at the top end, novo guiding for up to 27% in terms of four years sales at constant effects. other lines coming through in terms of sales and in terms of the particular makeup of the portfolio. first quarter ozempic sales coming in about the estimates, 27, close to 28 billion danish krone. that was above the estimates. looking for further details on supplies details. the top line is that they are boosting, quadrupling the pickup in terms of we got e in the u.s.

first quarter obesity care sales coming in slightly below the estimates, 11 billion danish krone. the estimates had been for 12.3 billion. those sales coming in modestly above the estimates. this is important, slightly below the estimates in the first quarter. sales coming in at 9.3. 8 billion below the estimates of 10 point five. whether this is a supply question versus demand will be interesting. more likely it's a supply question. we know they have been building out capacity. in terms of margin, novo nordisk coming in with margin just above the estimates. 84.8% is the margin. slightly above the estimates. u.s. demand still exceeds supply. the demand still exceeds supply before we go v, the weight loss drug in the u.s. again, they have quadrupled the number of patients starting on that drug in that crucial u.s. market. keeping there for years sales in

terms of the expectation, raising the bar 27% above estimates. this is a story we will keep across you, for you. we will be speaking to the ceo of novo nordisk speaking to bloomberg. that will be 9:05 a.m. u.k. time on the pulse. first quarter pretax profit coming in above the estimates, 32 billion danish krone above the estimates just shy of 30 billion. let's check in on these markets right now. earnings as part of the mix. beats coming through from the european lenders, standard chartered. exposure to asia and ing on the buyback there. continuing to weigh out what we've heard from the fed, pushing back on the view from some that may be an additional hike needed. jay powell pushing back. cuts are possible. this is a patient fed higher for longer. european stocks pointing lower. u.k. futures, ftse 100 futures looking at 3600 points. s&p futures adding 25 points up

after ending the session lower. nasdaq futures pointing to gains of six cents of a percent. the yen, volatility, we use the word whipsaw and accurately so because it has been dramatic. expectations that the boj, the ministry of finance intervene. we have not had concrete confirmation. 155 on the japanese yen. it popped 3% yesterday. two-year back below 5%. 494, yields came down yesterday. brent, $84 a barrel. shy of that up. go, 2003 hundred 14 per troy ounce. just a little softer. now to geopolitics and the middle east. bloomberg learning the u.s. and saudi arabia are nearing a historic deal that could reshape security in the middle east. let's get the details from our senior editor. what do we know about the potential details of what could be a really consequential deal? bill: this is a deal that was

being discussed last year ahead of the outbreak of violence in october between israel and hamas. those talks have resumed in recent weeks and seem to be accelerating. there's a lot of different components. one big part would be getting saudi arabia and israel on the path towards basically having diplomatic relations and normalization of ties. that would require a quick end to this war in gaza, and it would also require prime minister benjamin netanyahu to agree on a pathway to palestinian statehood. that's something that he and his coalition have been very much against since he returned to power. there would also be a lot for the saudi arabia and the u.s. in this kind of an agreement. it would effectively give saudi arabia u.s. security guarantee. that kind of an agreement might require u.s. senate approval, but in return, saudi arabia may get access to some high-tech

weaponry that it doesn't currently have. saudi arabia could also be allowed to pursue civilian nuclear program. that would give the u.s. access to saudi uranium stockpiles. so there are a lot of potential wins for both sides, but it is very much hanging on other issues that will be difficult to resolve. tom: what are those issues? what other hurdles that could get in the way of this deal? bill: if israel wants to be a part of this agreement and for netanyahu, getting a deal with saudi arabia has long been one of his goals but it would conflict with another one of his political priorities, which is basically avoiding having to accept a two state solution to the palestinian crisis. so he would have to decide which of those two goals is really politically more important to him right now. it could mean the end of his coalition government. there would be a lot of

complications with that. and also, the biggest hurdle would be wise -- winding down this conflict in gaza. and we have seen with israeli troops poised to enter rafah for weeks now that there does not appear to be a solution in sight. there is talk about a six week long cease-fire, but that has also been something going on for a while. a lot of hurdles but talks are advancing on the saudi and u.s. side in the hope that progress can get made. tom: senior editor on the potential consequences of what could be a seismic deal for that region. bill, thank you. let's stay with the region and check in on oil because part of the mix in terms of the movements we have seen have been pronounced around oil. the softness has come through the part of the focus had been on those talks around a potential cease-fire in gaza. the stockpile built up in the u.s. as well. that data had pressured the oil price in the last few days. today, paring the losses. 6/10 of a percent.

shy of 84. still below the 80 level for wti up 6/10 of a percent. let's go to one of the biggest corporate stories in the moment before we get those apple earnings. novo nordisk, the biggest european company coming through with the details on its earnings, raising the guidance in terms of the four euro sales picture. giving detail around the demand for the key weight loss and obesity drugs in the u.s. they are looking to more than quadruple the number of patients starting on we gavi in the u.s. let's get more analysis and bring in our bloomberg correspondent in copenhagen. give us the top lines. what's driving the results at this point? >> the profits were up again and it is very much driven by sales of its two drugs, ozempic and blockbuster drug. these two drugs are very popular among patients because they have

helped people lose weight. demand is extremely high, so high that they simply cannot keep up. today they said that demand is still exceeding supply and they are selling everything it can make and it is trying hard to make more. and that's really something that investors are following and they have a first mover advantage but it will only be able to capitalize on that if it is able to also ramp up supply. tom: that is the key question. so what progress has been made by the company to work through some of those supply issues, how is that going? >> there is some progress, they have released figures today saying now that 20,000 patients start on it every single week in the u.s. that number was 5000 back in december. so, we are seeing an increase in the number of patients that can start on its drugs.

and then of course we have also seen a lot of announcements of investments expanding into its factories and also to buy a new manufacturing facilities in the u.s. of course those investments are taking a bit of time to translate into a bigger supplier. tom: thank you very much jumping on those earnings are novo nordisk. really consequential given the size of the market cap of that company. we will keep an eye on that story and we will speak to the cfo and 9:05. thank you very much, out of copenhagen. we will speak to the chief financial serve that company on the pulse. coming up, china's stock climate envoy warns the west, decoupling could cause the global economy trillions of dollars. more from our exclusive interview. that is up next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe, happy thursday. the fed has signaled fresh concerns about inflation but chair jerome powell reassured investors a rate hike is unlikely, let's get some analysis from the ceo of the center for economics and business research. thank you for joining us. let's start with the top line. how what you heard from jay powell, how what you heard from the statement changes your view in terms of the policy response from the fed in the month and quarters ahead. >> we are actually going to stick with our prediction that the first cap -- first cut from the fed is coming in september and that's what we expected for yesterday's minutes in yesterday's press conference.

it was number under our essential forecast to expect a rate hike but if there was one surprise from yesterday's events, it's how firmly powell put those gases to bed. the message was very much the bar would be very, very high for the fed to do another hike, and i would have been expecting messaging to be a little softer around we will be data-dependent, we will see the path of inflation progress towards 2% targets. i was a little bit surprised by the tone of the messaging, but we are sticking with our expectations that there will be a cut coming in september. tom: we have been getting reaction from other guests as well and from jay powell. let's listen into the fed chair and i will bring you back in for your analysis. >> in recent months inflation has shown a lack of progress for our 2% objective and we remain highly attentive to inflation risks. it is likely they gaining

greater confidence will take longer than previously expected. i think it's unlikely that the next policy rate move will be a hike. i do think it's clear that policy is restrictive and we believe over time it will be restrictive. i don't know how long it will take, but i will say that when we get that confidence, then rate cuts will be in scope, let's see if anybody matches, in any way, it just is in part of our thinking. it's not what we are hired to do. we won't go down that road. if you go down that road, where do you stop? tom: you can make the argument that there is a disconnect from what we hear from the fed chair versus other colleagues on the fomc. this is the fed chair that has a bias as in if the jobs picture in the u.s. becomes more concerning, they are more likely to cut them they are to raise rates in the face of inflation? >> i could see why some would make that case, and i think

there is some evidence for that. we also can hear it where there were several mentions yesterday of how much progress has been made on inflation already, despite the recent stall. i think if you dissect the comments, you could find some evidence of that. also from the clip that we just saw and another bit that sticks out is how the election and the situation is not a part of their thinking and i think it's probably not a part of their direct thinking but it does inform an important context. i think what's been clear is that the fed's job has been made harder about what's happening on the fiscal side of the u.s., which is being driven by wider political events and what's coming later this year. tom: before we move on to the ecb and the boe, in terms of the non-fun payrolls that come out later this week, the job story and how that's evolving and how that links into the fed's decision-making.

>> this chair did say yesterday that they are not targeting wage growth, but they are obviously taking their mandate on the performance of the economy on the performance of the labor market strongly. we had heard that they would put more emphasis on that and it's very clear from yesterday that they don't basically want to harm the economy too much. they are not willing to crash the economy to get inflation all the way back down to target. so obviously there is something that will put increased importance in the coming meetings. i think yesterday was a little bit of a stalling pattern. we will probably hear more of an economic reassessment after the next meeting, but we did here they are very much focusing on that mandate as well. tom: so you hold your view that the cut comes through towards the end of the year. the ecb an official saying june is very likely. can the ecb and boe really diverge from this federal reserve?

>> we heard from some extent, not to a great extent. we are now expecting that both the ecb and the bank of england will cut before the fed does. we heard yesterday in powell statement, and he's right to point this out, that there is less room to wait in the euro zone in the u.k. because of a much weaker growth outlook. and he's absolutely right to point that out. that inflation dynamics are different. the energy shock is working itself out. that was always less of a factor in the u.s. the inflation picture is different across the atlantic on the grote -- growth outlook is weaker, which gives the central banks less of a luxury of waiting to see what inflation does over a longer time. they can't diverge too much. i think they might be keeping in mind what the fed is doing with the policy in europe and in the u.k. which is more so than they have let on. we've heard statements -- in

europe we have heard various statements. some have said there are more important considerations. we've heard central bankers say, if the u.s. is holding rates for longer, that is a reason to cut because it will create a growth environment globally. referred slightly mixed messaging and we still expect cuts to come from the ecb before the fed. there can be moment too much divergence down the line. on the back of that we are expecting fewer cuts from the ecb the rest of the year than we have. and i think the u.k. may be reluctant to diverge too much from other major central banks, keeping in mind the history of all the criticism and the ongoing attention around rate hikes coming into 2022. tom: ceo of the center for economics and business research. if very much. china's top climate chief says western decoupling from beijing could cost the world trillions of dollars in impact the energy

transition. they spoke exclusively with our chief north asian correspondent, stephen engle. >> if the western countries continue to insist to decouple from the china products from clean energy, it will cost the world may be an additional 6 trillion u.s. dollars with an increase of lower cost. we need to maintain the low costs, otherwise, nobody will afford the energy transition process. >> -- stephen: officials claim china is giving unfair subsidies and that has led to the situation we are in now that could destroy global trade in these clean products. how do you respond? >> the post u.s. economy, we

talk with them. all the renewability equipment and technology, they develop and manufacture by our private companies. it is very unique. very unique. i think private companies normally don't receive any government subsidies. i think we should highly appreciate the dedication and contribution. so, after more than a decade, now we have cheaper wind products. i think for china is good. stephen: we have to talk about the domestic economy here because we have been seeing profitability sink at a lot of these solar companies and ev companies. price wars are driving down

their margins. what is that due to the climate fight if the world is bifurcated on trade? >> we talk about a into different ways. for global demand in china domestic demand we are still in high demand. we are determined to increase renewable energy capacity to a higher percentage. i think for the next decade we are still in the process of increasing our renewable energy capacity. globally, i think that it's much's lower than what the chinese were doing so that there is high demand for renewable energy. for the so-called overcapacity and chinese manufacturers, it's a temporary issue. it could be also good. they continue to improve, they are manufacturing and making

better products. tom: that was china special envoy for climate change speaking exclusively with bloomberg's stephen engle. plenty more coming up. this is bloomberg. ♪

>> the whole game plan is basically unchanged. we will keep rates here until we are confident we will get inflation down to 2%. no hint of a rate hike. >> i think there's a lot of relief that the chairman stay true to what we've seen from the chairman. >> i think jay powell is particularly disciplined. he stayed on message. there's a clear bias towards easing and he stuck to that. >> they left wide open the question of why has progress been slipping on the inflation front. >> the federal reserve is not living up to the commitment of

inflation. >> let that policy work for longer. i think that's about as far as they are ready to go today. that's hawkish and may, we will see what hawkish might look like in june. >> this is really good for the markets because here is a fed that is telling us look at the longer term, look where inflation was and look where we've gotten the two. don't worry about the last couple of months, we will see what happens there. tom: a lot of the reaction to the latest that decision in jay powell's comments. plenty more earnings interviews coming up, including a conversation with the ceo of shipping giant maersk in the cfo of novo and orders. stay with us. this is bloomberg. ♪

anna: good morning from london, this is bloomberg markets today. i'm alongside guy johnson and kriti gupta. with cash trade less than an hour away, hig