US-China Trade Progress & Trump Targets Big Pharma | Daybreak Europe 05/12/2025

>> GOOD MORNING CARRIED THIS IS BLOOMBERG "DAYBREAK: EUROPE. " THESE ARE THE STORIES TO SET YOUR AGENDA. STOCK FUTURES JUMPED AS THE U.

S. AND CHINA REPORT SUBSTANTIAL PROGRESS IN WEEKEND TALKS ON THE TRADE WORD. PRESIDENT ZELENSKYY SAYS HE IS READY FOR FACE-TO-FACE TALKS WITH PRESIDENT PUTIN ON THURSDAY AS MOSCOW CONTINUES TO DO FIVE CALLS FOR A 30 DAY CEASE FIRE.

AND STOCKS SLUMPED IN ASIA AFTER DONALD TRUMP HE PLANS TO SLASH DRUG PRICES. WE ARE RISK OFF TO KICK OFF THIS MONDAY MORNING AND LOOKING AT FUTURES POINTING HIGHER ON BOTH SIDES OF THE ATLANTIC REFLECTING OPTIMISM ABOUT U. S.

AND CHINA TRADE TALKS THAT HAPPENED IN GENEVA. NASDAQ FUTURES UP 2%. BUT IS THE DETAIL GOING TO MATCH THE NOISE?

MUSCLE GET THE CROSS AS IT PICTURE TO SEE HOW YIELDS -- LET'S GET THE CROSS ASSET PICTURE. BECAUSE OF THE EXPECTATION THAT MAYBE THIS PROGRESS ON TRADE TALKS MEANS THE FED CAN HOLD UP ON THE RATE CUTS FOR NOW. STRENGTH IN THE DOLLAR AND WEAKNESS FOR THE EURO-DOLLAR.

DOWN . 2%. THE EXPECTATION IS THAT YOU WILL HAVE MORE DEMAND PUSHING UP THE BRUNCH PRICE TO $64 A BARREL CURRENTLY AND LESS NEED FOR SAFE HAVEN ASSETS WAITING ON THE GOLD PRICE.

$3277 A TROY OUNCE IS WHERE WE ARE NOW. LET'S GO TO ASIA FOR A LOOK AT HOW ASIAN MARKETS ARE REACTING TO THE PROGRESS AS WE HEAR ON U. S.

CHINA TRADE TALKS. OVER TO PAUL DOBSON. >> GOOD MORNING.

ASIA MARKETS TAKING THE NEWS RELATIVELY POSITIVELY. WE HAVE CHINESE SHARES GAINING. EQUITY INDEXES ACROSS THE REGION MOVING POSITIVELY AS WELL.

A LITTLE BIT OF CAUTION AND RETICENCE. SO FAR WHAT WE HAVE IS POSITIVE WORDS FROM BOTH SIDES BUT NOT MUCH SUBSTANCE TO IT. MARKET HOPES WE WILL GET MORE TODAY THEY CAN FEED OFF SO THEY CAN BELIEVE IT.

THE OTHER THING INTERESTING IS THE WAY THE CURRENCY MARKETS HAVE BEEN TRADING THIS MORNING OR AT THE BOTTOM OF THE STACK, THE WEAKEST PERFORMERS, THE SWISS FRANC AND THE YEN. THE DOLLAR IS IN THE MIDDLE OF THE PILE. AND THEN YOU HAVE COMMODITY CURRENCIES OR EMERGING MARKET CURRENCIES OR THOSE LINKED TO CHINESE GROWTH THAT ARE OUTPERFORMING.

THIS IS AN INTERESTING WAY TO LOOK AT IT. THAT IS PROBABLY THE BIGGEST TAKE AWAY FROM WHERE WE CAN HAVE -- FROM WHERE WE ARE RIGHT NOW. IF WE GET POSITIVE SIGNS OF A TRADE DEAL THAN THE TRENDS WITH U.

S. FUTURES PERFORMING WELL, TREASURIES AND NOT PERFORMING WELL AND GOLD FACING A BLOODY KNOWS, THOSE MAY BE THE TRENDS TO CEMENT A MOVE FURTHER DEPENDING ON WHAT WE HEAR FROM THE U. S.

AND CHINESE ADMINISTRATIONS ABOUT HOW THE TALKS ALL WENT. >> PAUL DOBSON, BLOOMBERG'S EXECUTIVE EDITOR FOR ASIAN MARKETS. THANK YOU.

SOME BREAKING RESULTS FROM UNICREDIT FOR THE FIRST QUARTER. NET INCOME COMING IN AT 2. 7 7 BILLION EUROS.

A BEAT THERE DESPITE THE CONTEXT BEING ECB RATE CUTS. WE ARE ALSO LOOKING AT THOSE STORY OF THE WAY OF A PROPOSED DEALS THAT COULD TRANSFORM THE ITALIAN BANKING SPACE. UNICREDIT SAYING M&A WILL ONLY BE PURSUED IF IMPROVING BANKS STANDALONE CASE.

IT IS PURSUING A BANK AND IN AND LOOKING FOR A BID FOR COMMERZBANK IN GERMANY. IT WANTED TO WATCH AT THE MARKET OPEN. SIGNIFICANTLY OUTPERFORMING THE ITALIAN BENCHMARK IN THE LAST YEAR AND WE WILL DELVE WERE DEEPLY INTO THOSE NUMBERS LATER.

BACK TO THE U. S. AND CHINA NEGOTIATION OVER THE WEEKEND.

BOTH SIDES CITING PROGRESS FOLLOWING TWO DAYS OF TALKS IN SWITZERLAND AIMING AT DE-ESCALATING THE TRADE WAR. SCOTT BESSENT SAID WASHINGTON WILL SHARE DETAILS TODAY. AND CHINESE OFFICIALS PROMISING A JOINT STATEMENT.

>> I AM HAPPY TO REPORT THAT WE HAVE ACHIEVED PROGRESS BETWEEN THE U. S. AND CHINA ON THE TRADE TALKS.

WE WILL BE GIVING DETAILS TOMORROW. I CAN TELL YOU THE TALKS WERE PRODUCTIVE. >> THE TWO SIDES HELD THE IN-DEPTH EXCHANGES ON ISSUES OF THEIR RESPECTIVE CONCERNED.

THE ATMOSPHERE WAS CANDID AND CONSTRUCTIVE. THE MEETINGS REACHED IMPORTANT CONSENSUS. >> AND FOR MORE NOW I'M JOINED BY STEPHEN, BLOOMBERG'S CHIEF NOR THE ASIAN CORRESPONDENT OUT OF HONG KONG.

THE ON THE SPIN, WHAT DID -- BEYOND THE SPIN, WHAT DID GOD TALKS YIELD? >> SCOTT BESSENT WHO YELLED U. S.

DELEGATION SAYING WE WOULD GET THAT -- WHO LED THE U. S. DELEGATION SAID WE WOULD GET DETAILS TOMORROW AND WE WILL BE DIGESTING WHAT SUBSTANTIAL PROGRESS MEANS AND WHERE DID THEY FIND COMMON GROUND.

FONG SAID THEY ALSO REACHED IMPORTANT CONSENSUS. I WANT TO KNOW WHAT CONSENSUS THEY COULD HAVE REACHED BECAUSE THEY WERE SO FAR APART ON THE ISSUES LEADING UP TO THIS. THIS WAS A DE-ESCALATION I THINK OF THE TEMPERATURE AND AN ESCALATION OF TALKS TO A SENIOR LEVEL.

WE HADN'T SEEN THIS HIGHER LEVEL OF TALKS DIRECTLY BETWEEN CHINA AND THE UNITED STATES THROUGH THE TRADE WAR SO COULD THIS BE A PRECURSOR AS WELL IF SCOTT BESSENT REPORTS BACK TO THE WHITE HOUSE THAT THINGS WENT REALLY WELL. COULD WE SEE POTENTIALLY AS WELL FONG REPORTING BACK TO XI, COULD WE SEE A VIDEO OR PHONE CALL BETWEEN XI AND DONALD TRUMP. I WOULD BE WAITING FOR THAT IN ADDITION TO THE DETAILS.

>> THAT WOULD GET THE MARKET EXCITED. IN THE MEANTIME, WHAT IS NEXT? >> WELL, THAT IS THE QUESTION.

WE NEED TO DIGEST WHAT KIND OF DETAILS WERE AGREED UPON. WHERE WAS THE CONSENSUS? 145% TARIFFS ON CHINA AND CHINA'S RECIPROCAL 125% TARIFFS -- MUTUALLY OH SHEARD DESTRUCTION ON THE -- MUTUALLY ASSURED DESTRUCTION ON THE TRADE FRONT IS NOT IN THE INTEREST OF EITHER COUNTRY SO COMING DOWN FROM THOSE NUMBERS WILL BE CRITICAL FOR THOSE NATIONS TO REACH COMMON GROUND.

HOW FAR? DONALD TRUMP TALKING 80%. SOURCES SAYING MAYBE 60% AS A STARTING POINT.

WE WILL KNOW TOMORROW WHETHER THIS IS JUST TALK OR WHETHER THEY DID FIND SOME AREAS WHERE THERE IS AN ACCEPTABLE TARIFF RATE TO READJUST THE TRADE IMBALANCE BETWEEN CHINA AND THE UNITED STATES. AND SOMETHING DONALD TRUMP HAS BEEN PUSHING CONSISTENTLY IS MORE ACCESS IN CHINA FOR AMERICAN GOODS TO HELP ALLEVIATE THE TRADE IMBALANCE WHICH SURGED TO A RECORD AS FAR AS THE TRADE SURPLUS CHINA HAS WITH THE UNITED STATES. WE WILL BE WAITING TOMORROW MORNING ASIA TIME.

>> STEPHEN ENGLE, BLOOMBERG'S WORTH ASIAN CORRESPONDENT WAITING FOR THE DETAILS. IN THE MEANTIME IT IS ENOUGH TO BOOST THE MARKETS. WHILE THOSE TALKS ARE HAPPENING IN GENEVA, PRESIDENT TRUMP HAS BEEN ON HIS WAY TO THE MIDDLE EAST SPENDING THE WEEK THERE TOURING THE REGION.

HE COULD RELIEVE -- REPORTS SAY HE COULD RECEIVE A LUXURY JET FROM QATAR. LET'S BRING IN JOUMANNA BERCETCHE WHO IS ON THE GROUND FOR US IN RIYADH. THIS IS THE MOST VALUABLE GIFT EVER RECEIVED BY A FOREIGN GOVERNMENT.

WHAT IS ON THE AGENDA? >> THIS STORY BROKE YESTERDAY AFTERNOON AND IT IS QUITE A SET UP FOR PRESIDENT TRUMP'S VISIT TO THE GCC THIS WEEK. HE STARTS IN SAUDI ARABIA TOMORROW BEFORE MAKING HIS WAY TO QATAR AND ENDING THE WEEK IN THE UAE.

ON THE STORY THAT ABC NEWS BROKE THAT THE QATARI ROYAL FAMILY IS WEIGHING DONATING A JET TO PRESIDENT TRUMP TO USE AS AIR FORCE ONE. WE DID TAKE COMMENTS FROM THE QATARI MEDIA AT TOUCH A TO THE U. S.

LATE YESTERDAY AFTERNOON AND THEY SAID THE TALKS WERE STILL IN DISCUSSION PHASE BETWEEN LAWYERS AT THE U. S. DEFENSE DEPARTMENT AND QATAR'S DEFENSE MINISTRY BUT NOTHING HAS BEEN AGREED YET.

THE PRESIDENT HIMSELF TOOK TO TRUTH SHOW SHOW TO SUGGEST THE -- TRUTH SOCIAL TO SUGGEST THAT THE OFFER HAD BEEN MADE. THERE ARE OTHER CALL AND LEGAL QUESTIONS. TECHNICALLY THE U.

S. PRESIDENT CANNOT ASK HAVE GIFTS FROM A FOREIGN GOVERNMENT WITHOUT CONGRESSIONAL APPROVAL -- CANNOT ACCEPT GIFTS FROM A FOREIGN GOVERNMENT WITHOUT CONGRESSIONAL APPROVAL FIRST. DEMOCRATS WANT TO TURN THIS INTO AN INVESTIGATION.

THAT IS THE SET UP INTO THE WEEK. THIS WAS ALWAYS GOING TO BE A WEEK OF THE EURO MAKING AS OPPOSED TO PEACEMAKING. -- A WEEK OF DEALMAKING AS OPPOSED TO PEACEMAKING.

THERE ARE REPORTS OF A DEFENSE DEAL BEING INKED WITH RIYADH AND THERE IS A BUSINESS SUMMIT TOMORROW BETWEEN SAUDI ARABIA AND KEY U. S. OFFICIALS.

SCOTT BESSENT IS HEADING HERE, THE COMMERCE SECRETARY IS COMING AS WELL AS MAJOR CEOS OF AMERICAN COMPANIES. THAT TELLS YOU ABOUT THE EXPECTATIONS IN TERMS OF THE ABILITY TO GET BUSINESS DEALS DONE AS OPPOSED TO MAJOR GEOPOLITICAL BREAKTHROUGHS. >> SPEAKING OF SAUDI ARABIA, OVER THE WEEKEND WE GOT THE ARAMCO EARNINGS.

WE SAW A DECLINE IN FIRST-QUARTER PROFITS CUTTING THE DIVIDEND BY $10 MILLION. HOW MUCH WILL THAT CREATE STRESS FOR THE SAUDI GOVERNMENT AS IT PURSUES ITS ECONOMIC VISION? >> THIS IS A GOOD POINT AND WORTH BRINGING UP IN THE CONTEXT OF THE PRESIDENT'S VISIT TO SAUDI ARABIA.

HIS FIRST VISIT WAS ALSO TO SAUDI ARABIA IN 2017. SAUDI ARABIA HAS CHANGED A LOT SINCE THEN BOTH ECONOMICALLY AND SOCIALLY. BACK IN THE DAY THE PERCEPTION WAS SAUDI ARABIA WAS " BIG SPENDERS" AND WILLING TO SPLASH OUT MONEY BUT NOW THE SITUATION IS DIFFERENT.

THEY ARE UNDER PHYSICAL CONSTRAINTS. THE PRICE OF OIL HAS BEEN DROPPING AND OPEC IS HOLDING BACK PRODUCTION. YOU SEE THAT SHOW UP IN ARAMCO EARNINGS WITH PROFIT SLIPPING 5% OR SO.

BETTER THAN THE OTHER OIL COMPANIES BUT THEY HAVE ALSO TRIMMED DIVIDENDS WHICH IS AN IMPORTANT SOURCE OF REVENUE FOR THE SAUDI GOVERNMENT. THEY STILL OWN 97% OF ARAMCO. WITH LOWER SOURCES OF REVENUE COMING IN AND BUDGET DEFICITS AND CURRENT ACCOUNT DEFICITS, THE AMOUNT OF MONEY THEY CAN SPEND ABROAD IS GOING TO BE SMALLER THAN IT WAS IN THE PAST WHICH RE-SETS THE TONE FOR HOW MUCH SAUDI ARABIA CAN COMMIT TO IN TERMS OF DEALS AND INVESTMENTS IN THE U.

S. THIS WEEK. >> JOUMANNA BERCETCHE OUT OF RIYADH, THANK YOU FOR THE UPDATE.

WE LOOK AT A MINI RALLY FOR BRENT THIS MORNING OFF THE BACK OF THE TRADE OPTIMISM. IT IS A BUSY WEEK AHEAD FOR U. S.

MACRO. TOMORROW WE HAVE U. S.

CPI. WE ARE LOOKING FOR HOW MUCH MORE COMPANIES ARE PASSING ON TARIFF COSTS TO CONSUMERS. AND HOW MUCH THEY FEEL THEY CAN DO THAT.

AND WE WILL SEE HOW MUCH DEMAND IS SLOWING WHEN WE GOT THE RETAIL NUMBERS ON THURSDAY. THE FED KEPT RATES ON HOLD LAST WEEK, POLICYMAKERS WARNED THERE IS A GREAT RISK THAT TRUMPS SPRAY POLICY WILL BOOST INFLATION AND UNEMPLOYMENT. THE FED CHAIR JAY POWELL, WE WILL HEAR FROM HIM ON THURSDAY.

AND WE WILL TURN OUR ATTENTION TO THE U. K. WHERE WE HAVE GDP NUMBERS.

PERHAPS A GANGBUSTERS START OF THE YEAR AS BUSINESSES TRY TO GET AHEAD OF THE TARIFF ACTION BUT THAT MAY GIVE WAY TO STAGNATION BY MARCH. AS WE HEAD TOWARDS THE TRADING DAY, CHECK OUT THE DAYBREAK NEWSLETTER. DA WHY BE GO ON YOUR TERMINAL.

THEY LEAN ON STOCKS RISING ON THE U. S. AND CHINA TRADE TALKS AND THEY HAVE TRUMP'S PLANS TO CUT DRUG PRICES AND THEY HAVE PRESIDENT ZELENSKYY SAYING HE IS WAITING FOR PRESIDENT PUTIN AND HE WILL BE IN TURKEY ON THURSDAY.

COMING UP, UNICREDIT PROFIT BEATS ESTIMATES AND WE HAVE A BREAK DOWN OF THAT NEXT. STAY WITH US. THIS IS BLOOMBERG.

♪ >> THERE IS A QUESTION WHETHER ANY DEAL IS NECESSARY BECAUSE SHAREHOLDERS HAVE A VERY GOOD DEAL. >> THE COMMERZBANK CEO SPEAKING TO TOM MACKENZIE ON FRIDAY. COMMERZBANK IS JUST ONE OF THE TARGETS OF UNICREDIT THAT REPORTED FIRST-QUARTER CREDIT THAT TOPPED EXPECTATIONS.

IT STRENGTHENS THE CEOS HANDS AS HE PURSUES THESE POTENTIAL ACQUISITIONS. HOW COULD THIS EARNINGS REPORT HELP OR HURT THE BANK'S EXPANSION PLANS ACROSS EUROPE? >> THE CEO IS SQUEEZED.

HE CAME IN WANTING TO EXPAND UNICREDIT AND IS UNDER PRESSURE FROM BERLIN BECAUSE THERE IS THE COMMERZBANK ATTEMPT HE HAS BEEN PURSUING. THE FINANCE MINISTER OF GERMANY, THE NEW FINANCE MINISTER SAID HE WOULD LIKE HOMER'S BANK TO BE INDEPENDENT. THERE IS PRESSURE ON THAT PART AND THEY HAD BLOWOUT EARNINGS.

THIS GIVES THEM SOME STRENGTH. THEY ARE PURSUING AN ASSET IN ITALY. THE GOVERNMENT IN ROME IS USING RULES TO RULE LIMIT A POTENTIAL TAKEOVER BUT THE NUMBERS ARE GOOD.

WE ARE SEEING SOME STRONG TRADING INCOME BUT SOME SOFTNESS UNDER THE INTEREST INCOME. >> THE NUMBERS FROM UNICREDIT WRAPS UP THE ITALIAN SEASON. WHAT READ ON ITALIAN BANKING M&A HAVE WE GOTTEN?

>> WE HAD STRONGER THAN EXPECTED EARNINGS ACROSS THE BOARD FOR A LOT OF THESE PLAYERS INVOLVED IN THIS M&A WAVE. ONE HAD A BEAD. BUT EVERYONE CARED ABOUT WAS THE COMMENTARY ON M&A.

AND WHAT THESE EXECUTIVES USED IN THEIR PRESENTATION, THEY USED THEM TO MAKE THE CASE FOR WHATEVER MERGERS THEY WERE TRYING TO MAKE. AND THAT IS WHAT PEOPLE WILL BE PAYING ATTENTION TO TODAY. >> AND THOSE SHARES AT THE OPEN.

HE OF -- MOMENTUM STALLS ARE FOR THOSE SO-CALLED FUEL OF THE FUTURE. WE LOOK AT THE CHALLENGES FACING CLEAN HYDROGEN. THIS IS BLOOMBERG.

♪ >> WELCOME BACK TO BLOOMBERG "DAYBREAK: EUROPE. " CLEAN HYDROGEN HAD BEEN TOUTED AS A KEY FUEL TO HELP THE WORLD THE CARBONIZED BUT ENTHUSIASM IS WANING AND CARROTS COULD WORSEN THE OUTLOOK. OUR RESEARCH ASSOCIATE JOINS US NOW.

WHY IS INVESTMENT IN GREEN HYDROGEN STALLING? >> WE FOUND INVESTMENT DROPPED TO ABOUT 50% TO $24 BILLION IN HYDROGEN-RELATED INVESTMENT ACROSS THE BOARD IN 2024. THAT IS A FRACTION OF THE TOTAL INVESTMENT WHICH IS ABOUT $2 TRILLION LAST YEAR.

THE MAIN REASON IS THAT CLEAN HYDROGEN IS MORE EXPENSIVE THAN THE FOSSIL FUEL IT IS REPLACING. PENDING ON THE MARKET YOU ARE LOOKING AT A 2-5 X PREMIUM AND BUYERS ARE NOT WILLING TO PAY THE PREMIUM FOR THE PRODUCT. WHAT IS REQUIRED IS GOVERNMENT INTERVENTION TO REDUCE THE COST AND ENCOURAGE BUYERS TO PAY A PREMIUM OR THERE IS A COST GAP THAT WILL LIKELY NOT CLOSE FULLY.

>> WHICH REGIONS ARE LEADING OR LAGGING IN HYDROGEN POLICY IMPLEMENTATION? >> WHEN A SMALL MARKET, ESPECIALLY THE EUROPEAN UNION HAS THE MOST COMPLETE POLICY FRAMEWORK, INCENTIVES ON THE DEMAND SIDE AND THE FORM OF QUOTAS TO ENCOURAGE BUYERS TO PAY A PREMIUM. WE SAW A TRIPLING OF SALES OF THE EQUIPMENT NEEDED TO MAKE GREEN HYDROGEN.

IN EUROPE IN 2024. NEXT ON THE LIST IS CHINA WHERE WE HAVE SEEN GOVERNMENT POLICIES AND PROGRAMS ENCOURAGING STATE OWNED COMPANIES TO INVEST IN SEVERAL KEY SECTORS INCLUDING HYDROGEN EVEN IF THEY ARE LOSSMAKING. IN TERMS OF LAGGING COUNTRIES WE SEE THE U.

S. AND THE REST OF THE WORLD DESPITE TAX CREDITS PASSED BY THE BIDEN ADMINISTRATION, WE SEE LITTLE INVESTMENT IN THE U. S.

SO FAR. >> HOW MUCH OF THIS IS BECAUSE OF TRUMP'S TARIFFS? IS THAT STOPPING U.

S. HYDROGEN PROJECTS FROM MOVING FORWARD? >> THEY ARE IN A BIT OF A HOLDING PATTERN.

TRUMP'S TARIFFS WORSENED BAD PROJECT ECONOMICS FURTHER. THEY ARE UNLIKELY TO HAVE THE INTENDED EFFECT WHICH MEANS EVEN WITH TARIFFS ESPECIALLY ON CHINA AT 145%, WE THINK CHINESE MADE EQUIPMENT WILL STILL BE CHEAPER THAN U. S.

-MADE EQUIPMENT IN THE U. S. AND AT THE SAME TIME, BECAUSE THERE IS LOW DEMAND IN THIS INDUSTRY AND THERE ARE TARIFFS, WE SEE LITTLE INVESTMENT IN THE U.

S. MANUFACTURING TO BUILD OUT MORE CAPACITY. IN BOTH WAYS TARIFFS WORSEN THE ECONOMICS.

WHAT IS KEY IS THAT TAX CREDITS AND THE UNCERTAINTY WHETHER THE TRUMP ADMINISTRATION WILL KEEP THAT TAX CREDITS IN PLACE. >> IF I WANT TO INVEST IN THIS SPACE, WHAT SHOULD I BE WATCHING FOR? >> THERE ARE SEVERAL KEY POLICIES COMING UP AND WILL BE REQUIRED TO MAKE INVESTMENT DECISIONS VIABLE.

WE ARE WATCHING A NUMBER OF AUCTIONS. THE BIGGEST ONE IS IN JAPAN RIGHT NOW WHERE THE JAPANESE GOVERNMENT IN THE SECOND HALF OF THE YEAR WILL PICK AUCTION WINNERS UNDER A CLEAN HYDROGEN CONTRACTS PROGRAM. IT IS ALSO OPEN TO EXPORTERS.

WE WILL SEE A NUMBER OF INVESTMENT DECISIONS GO FORWARD THERE. AND IN EUROPE WE SEE MORE COUNTRIES IMPLEMENT QUOTAS ON THE INDUSTRIES TO INCREASINGLY USE CLEAN HYDROGEN. WE WILL SEE A LOT OF EUROPEAN PROJECTS TARGETING COUNTRIES WITH QUOTAS AND THE WILLINGNESS TO PLAY A PREMIUM FOR GOING -- CLEAN HYDROGEN GOING FORWARD.

>> THANK YOU FOR THE UPDATE AND ANALYSIS. OTHER STORIES MAKING THE NEWS. BLOOMBERG HAS LEARNED THAT SPAIN'S GOVERNMENT IS CONSIDERING A HIGH UP FOR SABADELL TO COUNTER AN UNSOLICITED BID FROM BBVA.

IN OTHER NEWS BLOOMBERG HAS LEARNED THAT STELLANTIS IS NEARING THE END OF ITS SEARCH FOR A CHIEF EXECUTIVE WITH AN AMERICAN BOSS EMERGING AS A LEADING CANDIDATE. BUT A FINAL DECISION HAS NOT YET BEEN MADE. THE COMPANY TOLD INVESTORS WHEN THE PREVIOUS CEO WAS OUSTED IN DECEMBER THAT THEY WOULD APPOINT A NEW LEADER IN THE FIRST HALF OF THE YEAR.

CATL HAS STARTED TAKING ORDERS FOR ITS HONG KONG STOCK OFFERING WHICH LOOKS TO BE THE BIGGEST LISTING IN THE WORLD THIS YEAR. THE CHINESE EV BATTERY MAKER IS OFFERING SHARES AT 260 THREE HONG KONG DEALERS AS IT SEEKS TO RAISE 5. 3 BILLION U.

S. DOLLARS. AND CATL IS LOOKING TO LIMIT U.

S. PARTICIPATION. THOSE ARE SOME OF THE STORIES WE ARE WATCHING THIS MORNING.

FUTURE IS POINTING HIGHER ON BOTH SIDES OF THE ATLANTIC THIS MORNING. EUROPE NEARLY 2% ON NASDAQ FUTURES AND . 9% ON EURO STOXX FUTURE 50'S BECAUSE OF THE OPTIMISM AROUND THE GENEVA TRADE TALKS BETWEEN THE U.

S. AND CHINA. IS THAT NOISE GOING TO TRANSLATE INTO DETAILS?

WE WILL FIND OUT IF THE STOCK RALLY CAN MAINTAIN IT AS TRADE OPENS. YOU ARE LOOKING AT EVERY OTHER ASSET YOU WOULD EXPECT REACTING TO THIS NEWS. BRENT CRUDE UP, GOLD DOWN AS TRADERS LET GO OF THE NEED OF A SAFE HAVEN.

WE ARE ALSO MINDING THE EVENTS THIS WEEK. TRUMP IS IN SAUDI ARABIA TODAY. U.

S. CPI NUMBERS COMING TOMORROW. WALMART EARNINGS ON THURSDAY.

U. S. RETAIL SALES NUMBERS ON THURSDAY.

AND JEROME POWELL SPEAKS ON 30 AND THE UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT DATA ALSO. ON FRIDAY. COMING UP ON THE PROGRAM WE WILL SPEAK MARKETS WITH LAUREN VAN BILJON, SENIOR PORTFOLIO MANAGER AT ALLSPRING GLOBAL INVESTMENTS.

>> HAPPY MONDAY. THIS IS BLOOMBERG "DAYBREAK: EUROPE. " THESE ARE YOUR STORIES TO SET YOUR ADDENDA.

STOCK FUTURES JUMP AS THE U. S. AND CHINA REPORT SUBSTANTIAL PROGRESS IN WEEKEND TALKS ON THE TRADE WORK.

ZELENSKYY SAYS HE IS READY FOR FACE-TO-FACE TALKS WITH PUTIN ON THURSDAY AS MOSCOW CONTINUES TO DEFY CALLS FOR A 30 DAY CEASE-FIRE. STOCKS SLUMPED IN ASIA AS -- AFTER DONALD TRUMP SAYS HE WILL SLASH DRUG PRICES. A VERY GOOD MORNING AND WELCOME TO THE PROGRAM.

YOU ARE LOOKING AT FUTURES POINTING HIGHER ON BOTH SIDES OF THE POND THIS MORNING. A RISK ON START TO THE WEEK BECAUSE OF THE POSITIVE NOISES WE ARE HEARING OUT OF GENEVA. THE TRADE TALKS -- STILL WAITING FOR DETAILS BUT LOOK AT THE NASDAQ FUTURES.

UP ABOUT 2% AS THINGS STAND. CROSS ASSET PICTURE SHOWS THE 10-YEAR TREASURY YIELD UP THREE BASIS POINTS. THE EXPECTATION PERHAPS THAT THE FED IS NOT GOING TO HAVE TO CUT RATES AS FAST IF YOU HAVE THIS PROGRESS ON THE TRADE WORD.

THE DOLLAR CLIMBING. EURO-DOLLAR ON THE BACK FOOT. BRENT CRUDE UP BECAUSE OF THE EXPECTATION OF MORE DEMAND IF THE TRADE WAR CAN BE PAIRED BACK.

GOLD LOSING A BIT OF ITS STEAM AS TRADERS LET GO OF THE SAFE HAVEN. AN OPPORTUNITY FOR DIP BUYING PERHAPS. LET'S GET INTO THE MARKET ANALYSIS.

WE HAVE LAUREN VAN BILJON, SENIOR PORTFOLIO FROM ALLSPRING GLOBAL INVESTMENTS. GOOD TO HAVE YOU. THE MARKETS ARE HAPPY THIS MORNING.

IS IT GETTING CARRIED AWAY ON TRADE OPTIMISM? LAUREN: IT IS GOOD NEWS. I WONDER IF OVER THE COURSE OF THE DAY WE WILL SEE THE REACTION FADE.

THERE IS NOT ENOUGH DETAIL. >> WHAT DO WE NEED TO SEE TO SUSTAIN THIS? LAUREN: WE HAVE TO SEE A PLAN, CONCRETE STEPS, A TIMELINE FOR HOW IT COMES IN AND DON'T FORGET THE END GOAL OF TARIFFS EVEN IF CHINESE RATES ARE A THIRD OF WHERE THEY ARE RIGHT NOW, THAT IS STILL A SUBSTANTIAL RISE.

>> AND THE QUESTION OF HOW LONG WILL THEY BE THERE? WHEN YOU HAVE TRADE DOMINATING THE SENTIMENT, DOES IT MATTER WHAT THE FED SAYS ON THURSDAY? >> IT ALWAYS MATTERS.

IT IS A VERY HEADLINE DRIVEN MARKET. YOU ARE SEEING SOME FATIGUE CREEPING INTO DECISION-MAKING AND TRADING. AB FATIGUE IS NOT THE RIGHT -- MAYBE FATIGUE IS NOT THE RIGHT WORD.

MAYBE A LITTLE MORE DELAY COMING IN BETWEEN HEADLINES AND ACTION WHICH MIGHT BE HEALTHY. >> WOULD YOU SAY THAT WE ARE PAST PEAK UNCERTAINTY? >> PAST PEAK TARIFF BUT I'M NOT SURE ABOUT UNCERTAINTY.

>> AS WE LOOK AT THE DATA, WHEN OR ARE YOU EXPECTING TO SEE TARIFF PAIN SHOW UP IN THE HARD DATA? THAT SEEMS TO BE WHAT THE FED IS WAITING FOR. LAUREN: SOFT DATA HAS BEEN SO WEAK AND HARD DATA IS NOT SHOWING THE SAME REACTION.

AND THE DEGREE OF DIVERGENCE, IT CANNOT MAINTAIN. THOSE TWO HAVE TO CONVERGE AT SOME POINT. IS IT THE SOFT DATA THAT IMPROVES AND THE HARD DATA WORSENS?

THE DOWNSIDE GROWTH RISK IS THE DOGE CUTS. MAY BE GOING FORWARD, DEPENDING ON SEQUENCING, MAYBE IT IS GOOD NEWS ON GROWTH. >> I LIKE YOUR OPTIMISM.

WE HAVE HAD A RECOVERY IN U. S. STOCKS AND THEY ARE BACK WHERE THEY WERE BEFORE TARIFF DAY WHAT INVESTORS ARE TALKING ABOUT CAPITAL FLIGHT FROM THE U.

S. TO ASSETS ELSEWHERE. GERMAN DEBT FOR EXAMPLE.

DO YOU SEE THAT CONTINUING EVEN IF WE ARE PAST PEAK TARIFF? >> THE U. S.

DOLLAR HAS BEEN SLOWLY DECLINING AS AN ASSET. THAT COULD CONTINUE OR MAYBE ACCELERATES A LITTLE BIT. THE U.

S. MARKET WILL ALWAYS BE OF HUGE IMPORTANCE TO THE GLOBAL ECONOMY. MAYBE WHAT ALL OF THIS UPHEAVAL MEANS, MAYBE IT MEANS INVESTORS HAVE TO STAY CLOSER TO HOME.

>> WE HAVE TALKED ABOUT THE STOCK RALLY FOR THE RECOVERY BUT WHAT ABOUT THE DOLLAR? WHEN DOES THAT GO BACK TO THE PRE-TARIFF DAY LEVEL? LAUREN: THAT IS INTERESTING BECAUSE THEY U.

S. DOLLAR HAS HAD AN INCREDIBLE DECADE OF OUTPERFORMANCE. IT IS STILL EXPENSIVE.

INVESTORS CAME INTO THE YEAR WITH A HUGE OVERWEIGHT TO THE U. S. DOLLAR BUT IT IS NOW BACK TO NEUTRAL.

MAYBE IT IS A LITTLE STRONGER ON THE DOLLAR IN THE SHORT TERM. BUT I'M NOT SURE WE SEE MUCH MORE THAN THAT. >> OK.

IF WE TURN TO THE EUROPEAN SIDE OF THE EQUATION, WE HAVE HAD HAWKISH SOUNDS COMING FROM THE ECB IN AN INTERVIEW FOR THE FINANCIAL TIMES. SHE IS WORRIED ABOUT THE INFLATIONARY IMPACT OF THE TURO WAR. LAUREN: IT GETS BACK TO THE SEQUENCE HE ISSUE.

WHICH COMES FIRST, THE GROWTH IMPACT OR THE INFLATION IMPACT? AND HOW DO WE QUANTIFY THEM? AND THAT TAKES US BACK TO UNCERTAINTY.

IT ELSE CAN A CENTRAL BANK DO ESPECIALLY ONE LIKE THE ECB BUT HIGHLIGHT THE? UNCERTAINTIES? ?

MAYBE IT IS A SLOWER PACE. >> WHEN YOU THINK ABOUT EUROPEAN DEBT, GERMAN GOVERNMENT DEBT FOR EXAMPLE, A ROCKY START BUT IS IT APPEALING TO YOU? LAUREN: IT IS ALL ON A RELATIVE BASIS.

IT COMES DOWN TO THE RELATIVE VALUE ARGUMENT. IT DEPENDS ON WHAT IT IS UP AGAINST. THAT IS A SLIGHTLY LESS CLEAR-CUT ANSWER.

WE DID HAVE A POSITION IN GERMAN GOVERNMENT BONDS. EUROPE IS AN INTERESTING PLACE. THERE IS A LOT OF QUESTIONS BUT ALSO A LOT OF POTENTIAL.

>> SPECIFICALLY IF WE TURN TO THE U. K. AS WELL, SURPRISINGLY HAWKISH AS EDGING FROM THE BANK OF ENGLAND LAST WEEK.

WERE YOU SURPRISED? LAUREN: I WAS. THERE WAS A GOOD SET UP FOR A LOW INFLATION FORECAST AND A MORE DOVISH TONE OR ACCOMMODATIVE TONE GOING FORWARD.

IT WAS A HAWKISH CUT. FASCINATING TO SEE THAT DEGREE OF DISAGREEMENT WITHIN THE THREE-WAY VOTES. REALLY INTERESTING.

EVEN POLICYMAKERS WITH ALL OF THE DATA AT THEIR DISPOSAL ARE NOT QUITE SURE HOW THINGS WILL PLAY OUT. >> I WONDER IF THAT SIGNALS CHAOS OR JUST THE UNCERTAIN TIMES WE ARE IN. IN TERMS OF THE MARKET REACTION, DO YOU THINK TRADERS ARE TAKING IT MORE HAWKISH LEAD THAN THE BANK INTENDED?

HAVE THEY PRICED OUT TO MANY CUTS? >> THAT IS POSSIBLE. PERHAPS THAT EXACERBATED THE MOVE, THE U.

S. -U. K.

AGREEMENT. >> AND DOES THE TRADE AGREEMENT WITH THE U. S.

OR TRADE FRAMEWORK , WHATEVER WE CALL IT, HOW MUCH DOES THAT ADD TO YOUR OPTIMISM, THE APPEAL OF U. K. ASSETS AT THIS POINT?

WE ALSO HAVE THE INDIA DEAL AS WELL. LAUREN: THE INDIA DEAL WAS GOOD TO SEE COMING OUT OF THE EUROPE AND ONE OF THE PROMISED BENEFITS WAS THE ABILITY TO NEGOTIATE QUICKLY AND ON A BILATERAL BASIS. NICE TO SEE THAT PLAY OUT.

>> LAUREN VAN BILJON, SENIOR PORTFOLIO MANAGER FROM ALLSPRING GLOBAL INVESTMENTS. SHARES IN ASIAN DRUGMAKERS ARE LOWER AFTER PRESIDENT TRUMP SAID HE PLANS TO SLASH U. S.

PRESCRIPTION DRUG COSTS. HE SAID HE WILL SIGN AN EXECUTIVE ORDER TODAY MANDATING THAT AMERICANS PAY NO MORE THAN PEOPLE IN COUNTRIES WHERE THERE IS THE LOWEST PRICE. WHAT MORE DO WE KNOW?

>> WE KNOW THIS WOULD BE A VERY BIG POLICY INDEED IN THE U. S. THIS IS A KEY PROMISE FROM PRESIDENT TRUMP DURING BOTH ELECTION RUNS.

IN 2016 AS WELL AS HIS MOST RECENT CAMPAIGN. THE IDEA OF THIS AND WE ONLY KNOW FROM HIS TRUTH SOCIAL POSTS SO THERE ARE STILL A LOT OF QUESTIONS BUT WE KNOW THIS WOULD REVIVE A MOST FAVORED NATION APPROACH TO DRUG PRICING. IN OTHER WORDS THE U.

S. CONSUMER WOULD BE PAYING ESSENTIALLY THE SAME AS THE LOWEST PRICE AVAILABLE ELSEWHERE ON THE FACE OF IT. YOU THINK ABOUT BUYING A VIAL OF INSULIN IN TURKEY FOR A COUPLE OF DOLLARS AND IT SHOULD BE THE SAME PRICE FOR AMERICAN CONSUMERS.

A LOT OF QUESTIONS ABOUT HOW THIS WOULD APPLY ALONGSIDE TARIFFS. THERE WERE PHARMACEUTICAL TARIFFS ANNOUNCED RECENTLY THAT WOULD POTENTIALLY CAUSE SHORTAGES AND DRIVE UP PRICES. ALSO HOW IT WOULD BE IMPLEMENTED BECAUSE REPUBLICANS THEMSELVES ARE NOT FAVORABLE TO THIS, THEY DON'T LIKE THE MOST FAVORED NATION APPROACH AS WELL AS PHARMACEUTICAL COMPANIES.

A LOT OF PHARMA STOCKS REACTING NEGATIVELY TO THE NEWS. >> PARTICULARLY IN THE ASIAN SESSION. THE LIKES OF A JAPANESE DRUGMAKER.

ONE COMPANY LOSING 5% IN EARLIER TRADING. THE EUROPEAN OPEN COULD FEEL A BIT OF THIS AS WELL. >> EUROPEAN STOCKS, PHARMACEUTICAL STOCKS AND PARTICULAR -- IN THE ASIAN SESSION WE HAD SOME POWER AS I PLAY BECAUSE THERE WERE POSITIVE DEVELOPMENTS IN THE U.

S. AND TRIED -- AND CHINA TRADE TALKS WHICH GAVE A LIFT. EUROPEAN STOCKS AND U.

S. AS WELL WHEN THINGS GET UNDERWAY. DONALD TRUMP IS SUPPOSED TO BE SIGNING THIS MONDAY MORNING.

AND WE WILL ALSO BE LOOKING FOR MORE DETAILS WHETHER THIS WOULD LOOK LIKE HIS PREVIOUS MOST FAVORED NATION APPROACH, WHETHER IT WOULD APPLY TO MEDICARE REIMBURSEMENTS, WHETHER IT WOULD BE NARROW. FOR EXAMPLE IT WOULD ONLY APPLY TO THINGS DISPENSED IN DOCTOR'S OFFICES OR MORE BROADLY FROM HOSPITALS. MORE QUESTIONS BUT WE SHOULD BE WATCHING THE PHARMA STOCKS WHEN THEY OPEN.

>> INDEED WE WELL. BAD NEWS FOR A FIRM UP BUT OPTIMISM ELSEWHERE IN THE FUTURE IS PICTURE AS TRADERS DIGEST THE TRADE TALKS IN GENEVA OVER THE WEEKEND. THE RISK SENTIMENT BOOSTED BY THE PROGRESS WE ARE HEARING OUT OF UKRAINE.

WE WILL DIVE INTO THAT NEXT. ZELENSKYY CHALLENGING PUTIN TO DIRECT TALKS ON THURSDAY AFTER A WEEKEND OF FRANTIC DIPLOMACY TO END THE WAR IN UKRAINE. WE WILL BRING YOU ALL OF THE DETAILS.

THIS IS BLOOMBERG. >> GOOD MORNING AND WELCOME BACK TO BLOOMBERG "DAYBREAK: EUROPE. " JAPAN'S BOND YIELDS RISING TO ITS HIGHEST IN ALMOST 25 YEARS.

AS WE HAVE AN AUCTION TOMORROW. AND THE WEAKER YEN AND THE JGB RATE HIKE DELAYS. YOU ARE LOOKING AT THE YEN CURRENTLY WEAKER.

. 5%. KEEP AND THE 30 YEAR YIELD.

TWO GEOPOLITICS, PRESIDENT TRUMP'S EFFORTS TO GET PEACE IN UKRAINE IS REACHING A SIGNIFICANT MOMENT WITH ZELENSKYY CHALLENGING PUTIN TO ENGAGE IN TALKS THIS WEEK. ZELENSKYY SAID HE WILL TRAVEL TO ISTANBUL WHERE PUTIN HAS PROPOSED DIRECT NEGOTIATIONS. THIS FOLLOWS A WEEKEND OF FRANTIC DIPLOMACY.

BLOOMBERG'S OLIVER CROOK HAS BEEN ON ALL OF THE DETAILS AND JOINS US FROM BRUSSELS. IT IS UP TO SPEED ON THE LATEST. >> A SPECTACULAR 48 HOURS IN TERMS OF DIPLOMACY.

AND THE IDEAS OF WHAT THE TALKS WOULD BE. IT BEGAN IN KYIV WHERE YOU HAD THE VISIT FROM EMMANUEL MACRON AND OTHERS MEETING WITH ZELENSKYY TRYING TO DISCUSS AND HAMMER OUT A CONCEPT THAT STARTING TODAY YOU WOULD HAVE A 30 DAY UNCONDITIONAL CEASE-FIRE. THEY GOT TRUMP ON THE PHONE AND HE WAS ON BOARD WITH THE PLAN AND THEY PUT THE ULTIMATUM OUT TO PUTIN WHO REJECTED IT.

HE SAID, WE ARE NOT INTERESTED IN A CEASE FIRE BUT WE ARE OPEN TO BEGINNING SERIOUS NEGOTIATIONS WITHOUT PRECONDITIONS. HE SUGGESTED THE VENUE TO BE IN TURKEY ON THURSDAY ON THE 15TH. WE HEARD FROM TRUMP LATER ON TRUTH SOCIAL SAYING THAT PUTIN WAS NOT INTERESTED IN A CEASE FIRE BUT INTERESTED IN HAVING THE TALKS ON THURSDAY AND UKRAINE SHOULD AGREE TO THIS IMMEDIATELY.

AT LEAST THEY CAN THEN DETERMINE IF A DEAL IS POSSIBLE. AND IF NOT THE EUROPEAN LEADERS AND THE U. S.

WILL KNOW WHERE EVERYTHING STANDS AND CAN PLAN ACCORDINGLY. HE SAID, I'M STARTING TO DOUBT UKRAINE WOULD BE WILLING TO MAKE A DEAL WITH PUTIN. IN RESPONSE ZELENSKYY SAID HE SHOULD NOT BE DOUBTING HIM.

SHORTLY LATER HE SAID THERE IS NO POINT IN PROLONGING THE KILLINGS AND THAT I COME OF THE PRESIDENT OF UKRAINE WOULD BE WAITING FOR PUTIN IN TURKEY AND THIS TIME HE HOPES THE RUSSIANS WOULD NOT LOOK FOR EXCUSES. WHAT WE ARE SEEING IS THE FRUITS OF THE TRUMP PRESSURE APPROACH. WE HAVE SEEN ZELENSKYY LEARN HIS LESSONS ABOUT DUTCH I'M NOT GOING TO PUSH AGAINST THE U.

S. -- I'M NOT GOING TO PUSH AGAINST THE U. S.

, I WILL BE THERE ON THURSDAY. ON IT IS DIFFICULT TO IMAGINE A SCENARIO -- THIS IS ALL TO DEMONSTRATE THAT THE TRUMP ADMINISTRATION THAT UKRAINE IS ON BOARD AND THEY WILL DO EVERYTHING IN THEIR POWER TO FACILITATE THE DISCUSSIONS AND GET THE BALL OVER THE LINE IN TERMS OF MAKING PROGRESS. >> SURELY THE CONSEQUENCE OF THE BIG TALK IS THAT NOW YOUR PAST TO WALK THE WALK.

IF EUROPE SAYS IT HAS U. S. SUPPORT FOR SANCTIONS, WHEN IS THE CRUNCH POINT THAT THEY NEED TO SHOW IF THIS IS AN EMPTY THREAT?

>> THIS IS THE PROBLEM. WE HEARD A LOT OF THINGS SECONDHAND. WE HEARD FROM MACRON AND ZELENSKYY AND AT THE END OF THE DATE YOU CANNOT TAKE WHAT ANYONE SAYS ABOUT WHAT DONALD TRUMP THINGS UNTIL YOU HEAR FROM HIM HIMSELF.

A LOT OF PRESSURE HAS BEEN EXERTED BY THE WHITE HOUSE ON TO THE UKRAINIANS. THERE IS INTERMITTENT PRESSURE ON THE RUSSIANS. IF THERE IS A SITUATION WHERE THE U.

S. SEES THE RUSSIANS AS BEING THE OBSTACLE TO PROGRESS, WE HAVE A BILL, WE HAVE SEEN A DRAFT PUT FORWARD BY LINDSEY GRAHAM PROMISING SO-CALLED BONE CRUSHING SANCTIONS ON THE RUSSIAN ECONOMY. WHAT WOULD BE INTERESTING ABOUT THIS IS THIS IS A SLIGHTLY DIFFERENT APPROACH ON THE RUSSIANS WHICH WOULD BE TARGETING THIRD PARTY COUNTRIES THAT STILL BY RUSSIAN OIL AND GAS AND URANIUM.

IF THE COUNTRIES CONTINUE TO BUY THEM IN CONTRAVENTION OF NEW SANCTIONS THAT THE U. S. WOULD IMPOSE 500% TARIFFS ON THOSE COUNTRIES.

BASICALLY CLOSING THE TRADE FLOW BETWEEN THE THIRD PARTY COUNTRIES AND THE UNITED STATES. WE BEGIN TO SEE AN OUTLINE OF THE STAKES IF THE RUSSIANS ARE SEEM TO BE THE PROBLEM. WE ARE NOT CLEAR ON WHAT THE PROPOSALS WOULD BE IF ANY PEACE NEGOTIATIONS -- WE SAW A PROPOSAL THAT LOOKS TO FREEZE THE WAR IN ITS TRACKS.

THIS IS PUSHING PEOPLE TO THE TABLE IN THE HOPE THAT THE TRUMP ADMINISTRATION CAN GET THE OUTLINE OF A PEACE PROPOSAL. >> BUT TO THAT POINT, IS THAT NOT THE CASE THAT THE U. S.

WOULD ALREADY SEE RUSSIA AS HOLDING BACK THE PEACE DEAL WHEN YOU HAVE THE U. S. WILLING TO FREEZE THE CONFLICT AS THINGS ARE, SETTLE WITH WHERE THE OCCUPIED TERRITORIES ARE AT THE MOMENT BUT RUSSIA STILL PUSHING TO TAKE TERRITORIES THAT IT DOESN'T EVEN OCCUPY AT THE MOMENT.

>> AND I THINK THIS IS THE U. S. TACTIC, TO SEE HOW DIFFICULT THEY WILL BE OR IF THEY ARE BEING SERIOUS ABOUT COMING TO THE TABLE.

THOSE WHO ARE SUPPORTIVE OF UKRAINE AND PROBABLY FROM THE PERSPECTIVE OF MOST EUROPEANS, WHAT THE U. S. IS DOING WITH ITS ORIGINAL PROPOSAL WAS ALREADY GIVING QUITE A LOT TO THE RUSSIANS.

THEIR PROPOSAL INCLUDED FREEZING THE BATTLE LINES WHERE THEY STAND AND THE U. S. WOULD RECOGNIZE POTENTIALLY CRIMEA AS PART OF RUSSIA.

THE PATH TO NATO FOR UKRAINE WOULD BE BARRED. THERE WOULD BE SECURITY GUARANTEES FROM THE U. S.

THOUGH WE AREN'T CLEAR ON WHAT THEY COULD BE. AND EVENTUALLY LIFTING THE SANCTIONS ON RUSSIA LONGER-TERM. THIS WAS WHAT WAS IN SOME OF THE DRAFT PROPOSAL.

TO THOSE THAT SUPPORT UKRAINE, THAT IS SEEING SOMETHING CLOSE TO TOTAL SURRENDER OR GIVING A LOT OF CONCESSIONS. IF THE RUSSIANS ARE STILL NOT WILLING TO COME TO THE TABLE, THIS WOULD GIVE A TRUMP ADMINISTRATION CONFIRMATION ABOUT WHAT THE OBSTACLE TO PEACE WOULD BE. I THINK IT WOULD BE INTERESTING TO SEE HOW PUTIN RESPONSE.

MORE LIKELY WE WILL SEE ON THURSDAY IS HIGH LEVEL DELEGATION MEETINGS. BUT IF YOU WERE TO SEE PUTIN AND ZELENSKYY TO MEET IN PERSON IN TURKEY, THAT WOULD BE WELCOMED BY THE U. S.

ADMINISTRATION VALIDATING THE TECHNIQUE THEY OF PUT FORWARD HERE. >> ALL EYES ON IS STUMBLE ON THURSDAY. -- ALL EYES ON ISTANBUL ON THURSDAY.

THE U. S. AND IRAN WILL CONTINUE TALKS OVER ITS NUCLEAR PROGRAM AFTER DISCUSSIONS AND OMAN WERE DESCRIBED AS ENCOURAGING BY WASHINGTON.

A SENIOR TRUMP ADMINISTRATION OFFICIAL SAYS THEY AGREED TO CONTINUE WORKING THROUGH THE TECHNICAL DETAILS WITH ANOTHER MEETING. THE U. S.

ENVOY REPORTEDLY SAYS THATIRAN MUST DISMANTLE ITS URANIUM ENRICHMENT PROGRAM, SOMETHING TEHRAN HAS REJECTED. HAMAS SAYS IT WILL RELEASE THE LAST LIVING AMERICAN HOSTAGE IT HOLDS IN GAZA AFTER NEW TALKS WITH THE U. S.

OVER A CEASE-FIRE WITH ISRAEL. POLICING -- AND ISRAEL -- HAMAS DID NOT SAY WHEN HE WOULD BE RELEASED. ISRAEL HAS ENDORSED A U.

S. PLAN BY PRESIDENT TRUMP FOR A PHASED RESUMPTION OF FOOD DISTRIBUTION TO GAZAN CIVILIANS. AND A CEASE-FIRE BETWEEN INDIA AND PAKISTAN SEEMS TO BE HOLDING AFTER FOUR DAYS OF CLASHES.

INDIA SAYS IT HAS FULFILLED ITS OBJECTIVE. DOZENS OF SUSPECTED MILITANTS WERE KILLED. PAKISTAN'S MILITARY SAYS WAR BETWEEN THE NUCLEAR RIVALS WOULD BE SHEER STUPIDITY.

TENSIONS ESCALATED ON SATURDAY WITH DRONE AND MISSILE STRIKES ON MILITARY SITES BEFORE BOTH SIDES AGREED TO A TRUCE. THOSE ARE SOME OF YOUR TOP STORIES THIS MORNING. PLENTY MORE COMING UP ON THE PROGRAM.

THIS IS BLOOMBERG. >> RIGHT NOW THERE IS A LOT OF UNCERTAINTY ABOUT WHAT IS HAPPENING WITH TRADE POLICY. THE ECONOMY IS IN A GOOD PLACE IN THE U.

S. AND UNEMPLOYMENT IS AT 4. 2%.

OTHER INDICATORS SHOW WE HAVE A SOLID ECONOMY. RIGHT NOW WE HAVE TIME. >> AN EXCLUSIVE CONVERSATION WITH THE NEW YORK FED PRESIDENT STILL OPTIMISTIC AS WE WAIT FOR THE PAIN FROM THE TARIFF WAR TO SHOW UP IN THE HARD DATA.

WE KICKOFF WITH U. S. CPI NUMBERS TOMORROW FOR APRIL.

ON A MONTHLY BASIS WE ARE EXPECTING A BIT OF A BOUNCE. OVER THE LAST 3, 6, 12 MONTHS, INFLATION IS EASING BUT NOT TO THE 2% TARGET YET. THE QUESTION IS, WITH ALL OF THE TARIFF PRESSURE WHY IS THE INCREASE IN INFLATION SO MODERATE FOR NOW?

IS IT BECAUSE OF DEMAND SLOWING? WE GOT RETAIL SALES NUMBERS ON THURSDAY. IS IT THAT BUSINESSES FEEL THEY CANNOT PASS IT ON YET?

WE ARE STILL BELOW THE POST-COVID BOUNCE. UP NEXT ON BLOOMBERG TV, THE OPENING TRADE. CRYPTO HOOPTY AND GUY JOHNSON WILL TAKE YOU TO THE MARKET OPEN.

STAY WITH US.