5 Things You Need to Know to Start Your Day

Russia plans to cut its oil output, Japan looks to nominate a new central bank governor and a global pension crisis is straining government [View in browser]( [Bloomberg]( Russia plans to cut its oil output, Japan looks to nominate a new central bank governor and a global pension crisis is straining government finances. —[ Kristine Aquino]( Russian oil [Russia plans to cut its March oil production]( by 500,000 barrels a day in response to the Western price caps, said Deputy Prime Minister Alexander Novak. The retaliatory cut is the equivalent of about 5% of January output and has been hinted at repeatedly by the Kremlin since the European Union and G-7 began discussing capping the price of Russian exports. The move deepens the 2 million barrel-a-day production cut announced late last year by OPEC+, and threatens renewed turmoi in oil markets. Crude prices jumped on the news, with Brent up more than 2%. Bank of Japan [Japanese Prime Minister Fumio Kishida will nominate Kazuo Ueda](, a professor and former Bank of Japan board member, to take the helm of the central bank from April, according to local media reports. It sparked a jump in the yen, as traders interpreted the decision as likely a departure from the BOJ’s cautious approach to ending the era of record-low rates. While the currency initially strengthened as much as 1.4% against the dollar, it sharply pared those gains after Japanese press reported Ueda as saying [it’s important to keep monetary easing](bbg://news/stories/RPUYH4T0G1KY)for now, while declining to comment on speculation over his nomination. Pension crisis Public finances are buckling as [retirement promises]( made to previous generations collide with the realities of an aging population. State pension costs in developed economies are projected to soar and leave scant room for other spending priorities. Back in 1980, pensions consumed about 5.5% of GDP, and by 2040 that could top 10%, according to the best available data from the Organization for Economic Cooperation and Development. The near-universal agreement from economists is that we’ll all need to work for longer, save more or receive less. Yet nearly [half]( of OECD countries haven’t passed legislation to increase the normal retirement age, and some are softening planned reforms amid public backlash.  Futures retreat S&P 500 futures fell 0.4% as of 5:47 a.m. in New York, while Nasdaq 100 contracts slid 0.9%. The Bloomberg Dollar Spot Index erased earlier declines, leaving the Japanese yen one of the few gainers among Group-of-10 currencies. Treasuries were on the back foot, mirroring losses in global bond markets. Oil climbed along with gold, while Bitcoin was little changed. To catch up on the trading day in the UK and Europe, [check out Markets Today](. Coming up… At 10 a.m., we’ll get the latest University of Michigan sentiment figures. Federal Reserve Governor Christopher Waller will speak at a conference on digital money and decentralized finance at 12:30 p.m., followed by remarks from Philadelphia Fed President Patrick Harker at 4 p.m. Earnings include IQVIA and Global Payments. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [White House hits back](at Republican efforts against Biden administration - [Microsoft layoffs]( to focus on jobs in Surface, Xbox teams - Citigroup dropped from a [$3.4 billion Texas muni deal]( over gun policy - Bob Iger’s [master plan to restore Disney]( includes cost cuts, restructuring - `Hogwarts Legacy’ game raises conflict over [J.K. Rowling’s trans views]( - [Billionaire Izzy Englander sued by wife]( over post-nuptial agreement - Kansas City Chiefs likely to face [protesters over mascot at the Super BowlÂ]( And finally, this is what Katie is interested in this morning Much has been made of the [bond market’s fight]( against the Federal Reserve, with the central bank seemingly securing the upper hand in recent days. But investors don’t need to win the war to come out on top. “Sideways from here, you make money in bonds,” DoubleLine Capital’s Jeffrey Sherman said on Bloomberg Television’s “[ETF IQ](” from the ETF Exchange conference in Miami this week. “This idea that rates have to go down for you to make money, it’s just not true, especially when you have yield. There’s income out there.” That’s the beauty of bonds — investors can merrily clip coupons and collect a steady stream of income even if the debt doesn’t actually appreciate in price. That’s the bedrock of many of this year’s bullish fixed-income calls, with yields on Treasury bills at multi-decade highs. It’s a welcome reminder given how relatively rangebound the Treasury market has been so far this year. Benchmark 10-year yields have plied a 60-basis point range or so since the start of 2023 to oscillate around 3.5%. While 60 basis points is admittedly a rather wide road, it’s small compared to 2022’s about 285 basis point gyration. Rate volatility has cooled as a result, with the MOVE Index dipping below the average of the past year. Still, Sherman isn’t issuing a blanket recommendation to buy all stripes of bonds. This year’s everything-rally has seen even the riskiest corners of the fixed-income market benefit, fueling a flood of money into junk bond funds. In Sherman’s eyes, that rally isn’t [worth the risk](. “There’s no wiggle room at 400 [basis points] in high yield,” Sherman said. “You don’t have to take high-yield risk to just get all of your yield. Now you can build a diversified credit portfolio that yields 5 to 6%.” — [Katie Greifeld]( Follow Us You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](