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A European pact, Ukraine pushes back and curve inversion.European pactPresident Joe Biden and European Commission President Ursula von der L [View in browser]( [Bloomberg]( A European pact, Ukraine pushes back and curve inversion. European pact President Joe Biden and European Commission President Ursula von der Leyen will announce [a pact]( to boost Europe’s supply of liquefied natural gas by the end of the year as the continent tries to curb its reliance on Russia. The agreement follows Biden’s [meetings]( with NATO, the Group of Seven and EU leaders to ramp up pressure on Putin. The U.S. president on Thursday called for Russia’s [removal](from the G-20 group of major economies, while Europe rejected Putin’s demand that they pay in rubles for natural gas imports. Ukraine pushes back [Counter-attacks]( have helped Ukraine reoccupy towns and defensive positions as far as 35 kilometers (22 miles) east of Kyiv, the U.K. defense ministry said in an intelligence update. EU officials suspect that China may be ready to supply [semiconductors and other tech hardware]( to Russia as part of an effort to soften the impact of sanctions. Russia is seen headed for a [deep two-year recession.]( Russian [stocks fell]( in limited trading. Curve inversion The differential in yields between 10- and two-year Treasuries has shrunk to the lowest since the pandemic first struck, prompting some market observers to telegraph concern that the U.S. economy may be headed for a [recession](. That spread isn't the one you should be looking at, according to the Federal Reserve. Chair Jerome Powell weighed in on the debate [to remark]( that the short end of the yield curve has a greater predictive power. What's the big takeaway from all this? If you look at the segment that Powell wants us to, there is no threat of any recession whatsoever given that it is pretty steep. Markets quiet [European stocks are having a quiet morning]( with most indexes pinned to little changed on the day. Stoxx 600 traded flat with gains in real estate and retailers offset by losses in banking and energy names. S&P futures drifted lower but traded in a narrow range. Bonds were better bid, with U.K. government debt leading gains. In currencies, the Japanese yen was the strongest performer among G-10 peers, holding below 122 per dollar. The energy space is under pressure as the EU continues to make plans to reduce its dependence on Russia. WTI futures were down over 2%, natural gas dropped by more than 4%. Spot gold was steady near $1,955/oz. Coming up... We round off the week with February's Pending Home Sales and the March print of University of Michigan Sentiment at 10 a.m. The Baker Hughes U.S. Rig Count will be released at 1 p.m. Fed speakers include John Williams, Thomas Barkin and Christopher Waller. Day Two of the European Council summit will cover security and defense, energy and other economic issues. What we've been reading Here's what caught our eye over the past 24 hours. - [Russians don’t believe]( official advice that economy is fine. - The [good scenarios are gone]( for markets and Ukraine. - Search continues for China plane crash [second black box](. - Apple is working on a [hardware subscription model for iPhones](. - Never have so few homeowners had [reason to refinance](. - Private equity funds are pushing [deeper into pro sports](. - Why [global supply chains]( may never be the same. And finally, here’s what Emily’s interested in this morning Kyle Bass may want to take a moment. If the recent speculation on the Bank of Japan’s policy is to be believed, shorting Japanese government bonds may actually start looking profitable. This trade, known in blokey investing circles as the widow-maker—for the ruins that have been made of betting against JGBs —hasn’t had such a decent run for years. The 10-year government bond hit its highest level since 2016 this week. That level, around 23 basis points, prompted the Bank of Japan to step in last month with offers to buy an unlimited amount of bonds at a fixed rate. At the time it squelched talk among traders that policy makers might be preparing to spool out the leash on this intensely controlled market. So far there’s been no similar action from the central bank. And that’s rebooted speculation that the Bank of Japan may be prepared before long to loosen its target band for the benchmark. Policy makers are under increasing pressure as the benchmark yield gap to the U.S. widens, beyond 200 basis points, which is turbo-charging the greenback’s rise versus the yen. A weak yen has been fortuitous for Japan’s export market, but a collapsing currency — it’s already around six-year lows — presents stability problems, and a setback to the economy via the drag on domestic consumption, particularly as inflation threatens to outpace wage growth. “These developments suggest that the BoJ’s extraordinary monetary policy has become self-defeating as it cannot co-exist with the tightening of major central banks, especially that of the Fed,” wrote Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis SA. She expects the BoJ to take action on its yield curve control policy, by expanding the band in which the 10-year JGB yield can fluctuate, raising the ceiling to 1% from the current 0.25%. Follow Bloomberg's Emily Barrett on Twitter [@]([notthatecb]( Special Daily Brief: Russia's Invasion of Ukraine [Keep up with the latest news]( on the Russian invasion of Ukraine, one of the worst security crises in Europe since World War II. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. 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