Stephen Carroll

The escalation comes after Hezbollah fired into Israel, saying it was acting in retaliation for the killing of Iran's supreme leader.

And those are your top stories.

On the markets, Eurostox 50 futures down 2.3%.

Cacaron futures 1.9% lower.

FTSE 100 futures are down by 0.8% on Wall Street.

S&P E-minis are down by 1.5% as well.

Oil prices now 9.4% higher for Brent crude, climbing towards $80 a barrel.

We've seen that jump in European natural gas prices as well.

The Bloomberg Dollar Spot Index up by 0.6%.

The euro down 0.8% at 1.17%.

23 this morning.

I'm Stephen Carroll and this is Bloomberg.

Hello, I'm Stephen Carroll.

I'm in Brussels, where many of Europe's biggest decisions get made.

And I'm Caroline Hepke in London.

We're the hosts of the Bloomberg Daybreak Europe podcast.

We're up early every weekday, keeping an eye on what's happening across Europe and around the world.

We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going.

From Brussels, I'm following the politics, policy and the people shaping the European Union right now.

And from London, I'm looking at what all that means for markets, money and the wider economy.