美联储今日加息预期升温，10年期美债收益率逼近5%

LIVE FROM BRUSSELS, THIS IS "BLOOMBERG DAYBREAK: EUROPE." INVESTORS BRACE FOR THE FIRST FED RATE HIKE IN MORE THAN THREE YEARS. BOND YIELDS HOLDING THEIR MULTI-DECADE HIGHS AS TRADERS PILING TO BETS THAT THE TREASURY SELLOFF HAS FURTHER TO RUN. META'S MARK ZUCKERBERG AND NVIDIA'S JENSEN HUANG PUSHBACK ON CALLS FOR A COORDINATED A I SLOWED ON AS A TOP ANTHROPIC EXECUTIVE MEETS SENIOR U.S. OFFICIALS. GERMAN CHANCELLOR FRIEDRICH MERZ CANCELS A TRIP TO THE U.S.

AS HE FACES A MOUNTING PARTY REBELLION AT HOME. GOVERNMENTS ACROSS THE EU AWAIT URSULA VON DER LEYEN'S STATE OF THE UNION SPEECH LATER TODAY. VERY GOOD MORNING TO YOU. WE HAVE GOT MARKETS GOING INTO TODAY'S FED RATE DECISION ON A POSITIVE NOTE, SHARES RISING IN ASIA, NOT VERY MUCH IN THE MSCI ASIA PACIFIC INDEX. EUROPEAN STOCK FUTURES ALSO POINTED A BIT HIGHER THIS MORNING AND S&P E-MINIS SLIGHTLY POSITIVE. LET'S FLIP THE BOARD AND TAKE A LOOK AT SOME OF THOSE ASSETS THAT WILL BE IN FOCUS HEADED INTO TODAY'S FEDERAL RESERVE DECISION.

OIL PRICES STILL AROUND $108 A BARREL FOR CRUDE SO SLIGHTLY LOWER BUT STILL THAT CONSIDERED INFLATIONARY PRESSURE COMING FROM OIL PRICES THE 10-YEAR TREASURY YIELD 24 HOURS AGO WE WERE TELLING ABOUT THE MOMENT WHEN WE CROSSED THE HIGHEST POINT FOR THAT YIELD SINCE 2007. THIS MORNING, WE ARE STILL LOOKING AT THE 10-YEAR YIELD JUST BELOW THE 5% MARK. WE WILL BE WATCHING CLOSELY TO SEE HOW THOSE YIELDS WILL BE REACTING LATER IN THE DAY AS WELL.

A WORD ON BITCOIN, A SHARP DROP IN THE TOKEN YESTERDAY AS WE HAD THE U.S. SENATE FAILING TO PASS A BILL THAT WOULD OVERHAUL REGULATION OF CRYPTO IN THE U.S. A 5% DROP HISTORY, HOLDING THOSE LOSSES TODAY -- A 5% DROP YESTERDAY, HOLDING THOSE LOSSES TO. WE HAVE U.K. INFLATION NUMBERS OUT AT 7:00 A.M. IN LONDON. WE ARE EXPECTING TO SEE THE FEED THROUGH FROM THOSE HIGHER ENERGY PRICES INTO THE INFLATION PRINT AHEAD OF THURSDAY'S BANK OF ENGLAND DECISION.

URSULA VON DER LEYEN'S STATE OF THE EUROPEAN UNION SPEECH COMING US FROM STRASSBURG. OF COURSE, THE FEDERAL RESERVE DECISION IS 7:00 P.M. IN LONDON, 8:00 P.M. IN BRUSSELS. THAT WILL BE THE FOCUS FOR MARKETS. LET'S GET YOU FOCUSED ON THE DAY AHEAD. ♪ -- SET UP FOR THE DAY AHEAD. ♪ GLOBAL MARKETS ARE ON EDGE AS A COUNTDOWN TO THE FED'S RATE DECISION. LET'S SEE HOW ASIA IS FARING WITH AVRIL HONG IN SINGAPORE. GOOD MORNING.

AVRIL: GOOD MORNING. REALLY INTERESTING THE PRICE ACTION IN ASIA TODAY AFTER 4 SESSIONS OF LOSSES. WE STARTED THE DAY KIND OF FLAT BUT SOMEHOW MANAGING TO PICK UP AS THE SESSION PROGRESSED, THIS IDEA THAT THE FED RATE HIKE IS ALREADY PRICED IN AND UNLESS WE SEE A MORE HAWKISH SURPRISE, MAY BE STOCKS ARE GOING TO BE OK. THE KOSPI, THE TAIEX IN THE GREEN, TURNOVER BELOW AVERAGE. FLIP THE BOARD. THE OTHER STORY AS FAR AS THE AI TRADE IS CONCERNED IS RELATED TO SOURCES TELLING BLOOMBERG THAT OPENAI IS SEEKING THAT FRESH FUNDING ROUND.

THIS COULD ALSO GIVE IT FLEXIBILITY TO FURTHER DELAY ITS IPO. WHAT IS THAT GOING TO MEAN FOR THE OUTLOOK FOR ONE OF ITS BIGGEST BACKERS, SOFTBANK? WHICH HAS COMMITTED TO INVESTING $65 BILLION INTO OPENAI. BY THE WAY, ITS CREDIT DEFAULT SWAPS AT A ROUGHLY THREE YEAR HIGH. THE FLIPSIDE TO THAT EQUATION IS MAYBE THIS BENEFITS THE CHINESE AI PLAYERS. YOU THINK ABOUT HOW THE LIKES OF MODEL MAKER, IF WE SEE AN OPEN A IDYLLIC FOR THE APPEAL -- OPENAI DELAY FOR THE IPO.

KEEPING TABS ON DOLLAR-YEN THAT HAS POPPED BACK ABOVE THE 155 HANDLE. THE YEN'S ON THE BACK FOOT NOT JUST BECAUSE OF THE DOLLAR FROM THIS, BUT ALSO GIVEN THESE REPORTS THAT SUGGEST JAPAN COULD BE CONSIDERING INCREASING DEFENSE SPENDING TO 3.5% OF GDP.

THANK YOU VERY MUCH. THAT IS AVRIL HONG IN SINGAPORE. THE FED IS EXPECTED TO DELIVER ITS FIRST RATE HIKE TODAY IN THREE YEARS AS RISING ENERGY PRICES FUEL CONCERNS OVER INFLATION LEVELS. POLICYMAKERS ARE ALSO DUE TO RELEASE UPDATED ECONOMIC PROJECTIONS AND A NEW DOT PLOT RATE FORECAST WITH TRADERS FULLY PRICING IN A SECOND HIKE BEFORE THE END OF THIS YEAR. LET'S BRING IN BLOOMBERG MLIV CROSS ASSET STRATEGIST VEN RAM FOR MORE.

WHAT DO INVESTORS NEED TO SEE AND HEAR FROM THE FED AND KEVIN WARSH TODAY?

GOOD MORNING. INVESTORS NEED THREE THINGS TO HEAR FROM THE FED SPECIFICALLY TODAY. CREDIBILITY, CREDIBILITY, AND CREDIBILITY. CREDIBILITY ON FIGHTING DEFICITS. CREDIBILITY ON FIGHTING INFLATION. CREDIBILITY THAT IT WILL GET INFLATION BACK DOWN TO 2% TARGET. THAT IS A SPECIAL LOOKING VULNERABLE IN LIGHT OF THE RECENT SURGE IN ENERGY PRICES. THERE IS NO EXCUSE FOR THE FED NOT TO BE RAISING RATES TODAY GIVEN THE INFLATION OVERSHOOT THAT WE HAVE HAD FOR A LONG TIME.

THE FED KIND OF DISAPPOINTED THE MARKETS LAST TIME AROUND WITH THEIR GUIDANCE WITH A DOT PLOT. THIS TIME, THE SUMMARY OF ECONOMIC PROJECTIONS ON THE DOT PLOT WILL BE DOUBLY CRUCIAL. THE SUMMARY OF ECONOMIC PROJECTIONS SHOW THEY EXPECT CORE PCE TO FALL TO ITS 2.5%, EVEN THOUGH THEY DID NOT INTEND TO RAISE RATES MEANINGFULLY NEXT YEAR. ACCORDING TO THAT DOT PLOT. MEANING THEY EXPECT INFLATION TO MAGICALLY SOMEHOW CRUMBLE DOWN TO 2.5% FROM 3.3% CURRENTLY.

IT IS NOT HAPPENING. WE HAVE TESTED THAT HYPOTHESIS FOR FIVE YEARS NOW. IT IS NOT HAPPENING. INFLATION IS NOT GOING TO GO BACK DOWN UNLESS YOU CURB AGGREGATE DEMAND. THAT IS THE CREDIBILITY MESSAGE THE MARKETS WILL BE WATCHING FOR TODAY.

WE ARE SEEING AHEAD OF THAT DECISION BOND TRADERS PILING INTO BEARISH POSITIONS. THE 10-YEAR YIELD STILL AROUND THE 5% LEVEL. WHAT COULD WE HEAR FROM THE FED THAT WOULD MAY BE EASE? THAT PRESSURE ON BONDS?

WELL, IF THE FED GIVES A SUGGESTION OR HINTS THAT THEY ARE GOING TO BE HIKING RATES MAY BE THIS MONTH AND BE ON HOLD AND SEE THE EFFECTS OF THE INCREASE, THAT I THINK THE MARKETS WILL SELL OFF EVEN MORE. WHAT DOES A LONG AND INVESTORS SPECIFICALLY WANT TO HEAR IS AS THEY WERE SAYING EARLIER IS THE REESTABLISHMENT OF CREDIBILITY THAT THE FED IS NOT GOING TO BE BEHIND THE CURVE. THE MORE THE FED GIVES THE IMPRESSION THAT THIS INFLATION IS NOT GOING TO CRUMBLE ANY TIME SOON AND IT'S GOING TO TAKE A LONG FIGHT, THEN YOU KNOW, INVESTORS ARE GOING TO DEMAND A HIGHER TERM PREMIUM TO HOLD LONGER DATA BONDS.

THAT IS WHAT THIS RECENT SELLOFF IS ALL ABOUT -- LONGER DATED BONDS. THAT IS WHAT THIS RECENT SELLOFF IS ALL ABOUT.

THANK YOU FOR SETTING US UP FOR THAT KEY INTEREST RATE AND MARKET DECISION LATER TODAY. META CEO OF MARK ZUCKERBERG AND JENSEN HUANG HAVE PUSHED BACK ON CALLS FOR A COORDINATED SLOWDOWN OF AI DEVELOPMENT, SAYING COMPANIES CAN DECIDE WHETHER TO DELAY THE RELEASE OF PRODUCTS OVER SAFETY CONCERNS THE COMMENTS CAME AS A SENIOR ANTHROPIC EXECUTIVE MET TRUMP ADMINISTRATION OFFICIALS AND AFTER THE U.S. PRESIDENT DISMISSED AI CONCERNS AS A HOAX.

FOR MORE, WE ARE JOINED BY MATTHEW BLOXHAM, SENIOR ANALYST AT BLOOMBERG INTELLIGENCE. GOOD TO TALK TO YOU. PLENTY OF COMMENTARY AROUND A HIGH SAFETY IN RECENT DAYS BUT ARE WE ACTUALLY CLOSER TO UNDERSTANDING WHAT THE PATH FORWARD COULD LOOK LIKE NOW FOR AI?

I THINK THE ANSWER IS A BIT OF YES AND NO. IN REALITY IN THE SHORT-TERM, IF WE SEE ANY ACTION AT ALL, IT IS ONLY GOING TO COME AT THE COMPANY LEVEL. OBVIOUSLY, WE HAVE SEEN A SMALL COALITION OF COMPANIES, INCLUDING ANTHROPIC AND OPENAI AND ELON MUSK'S SPACEX COMING OUT SUGGESTING THERE SHOULD BE SOME KIND OF INDUSTRY CONSENSUS ABOUT GUARDRAILS. WE HAVE SEEN META, WHICH IS ARGUABLY IN THE CHASING PACK ON FRONTIER MODELS, AND NVIDIA, WHICH GOT A VESTED INTEREST IN SUSTAINING GROWTH IN AI COMING OUT AND SAYING IT IS A COMPANY LEVEL RESPONSIBILITY.

OBVIOUSLY, ON THE FLIPSIDE, WE'VE GOT A LOT OF PEOPLE PUSHING FOR GOVERNMENT LEGISLATION BACK IN THE U.S. AND GLOBALLY AND TRYING TO BEEN TAKING THAT STANCE, TOO. NEW LEGISLATION -- CHINA HAVE BEEN TAKING THAT STANCE, TOO. I THINK ANY CHANCE OF KIND OF CLEAR LEGISLATION IS A LONG WAY OFF SO IT'S REALLY GOING TO BE DOWN TO INDIVIDUAL COMPANY RESPONSIBILITY IN THE SHORT TERM.

OK, SO PUTTING THAT ON THE COMPANY'S SHOULDERS FOR NOT. THERE'S BEEN REPORTING THAT OPENAI IS IN TALKS FOR A NEW FUNDING ROUND AT A $1.2 TRILLION VALUATION.