tom: daybreak europe. these are the stories that set your agenda. investors punish apple as sales slump in china, but meta and amazon search as cost-cutting pays off. the ceo of nvidia tells bloomberg tech sovereignty will boost demand for chips. >> it has become abundantly clear to each of the other countries that their natural resource, the data of their country, should be refined and produced intelligence of their country for their country. tom: u.s. regional banks extend the selloff on property fears as traders await today's u.s. jobs report for clues on fed policy. the bank of england opens the door to rate cuts for the first time in this cycle. we will hear from andrew bailey

later in the show. let's check on markets. dollar is down. the last time we checked about 0.1%. futures pointing to a solid session. technology is certainly going to be a driver amidst that optimism. also of course counting down to the job numbers out of the u.s.. the nonfarm payrolls expected to come in, the survey, 185,000 down from the december print of 216,000. bloomberg economics is the importance will be focusing on the potential revisions that come through for previous months as well. we will break down that story for you. it is a risk on session. european futures pointing to gains of 0.8%. ftse 100 futures looking to add 63 points despite the fact the basic resources sector could be under pressure given what is happening with softer iron or prices and weaker copper prices. s&p futures pointing to gains of

0.5%. nasdaq futures, 100 futures pointing to add 9/10 of a percent. the lifts coming through from the buyback being announced by meta. the dividend surprises from the strength of meta. upside as well from amazon for now overshadowing and overlooking the pressure coming through from apple. let's flip the board and have a lacrosse asset. we are going to start with the five year, the belly of the curve in the u.s.. we have the call coming through when the cross as that board is there from j.p. morgan saying it is now time to think about taking profit from the belly of the u.s. curve. we did see the rally this week part of that linked to the concerns about the real estate sector. j.p. morgan saying take a bit of profit here. the five-year currently at 381. the pound is the best performing g10 currency this year. that is interesting as we look to how the central banks align.

brent is at $78 per barrel. strength coming through, so far in the session up 0.3%. the picture for the week is you are seeing softness. you are expected to end the week 5% lower on oil as we may be edging closer to a cease-fire in gaza. conversations continue. iron ore prices under pressure in the session today on concerns about china demand and increased supply from the likes of brazil. let's look at a clearer picture on how asian markets are faring. korea is on radar for us. what stands out to you? >> seoul but also china. asia-pacific stop benchmarks are higher. the kospi is leading the charge and this is against the backdrop of authorities trying to push for better valuations.

overall it is a positive picture. this is against the backdrop of some magnificent earnings. cannot say the same for chinese equities as investors digest a number of things. pboc coming through, saying they added $20 billion in funding for housing, infrastructure projects. the idea is to help arrest the decline in construction activity. we had a slew of approvals for imported games and that lifted the stock of tencent 6% initially. it paired much of that. csi 300 sank deeper into negative territory. we saw bonds are bit. the message from investors is we want to see more policy support. i'm taking you to japan we are tracking dollar-yen. that has been fairly range bound. this is ahead of u.s. jobs data.

the benchmarks of the region have mostly been positive. the weakest link, aozora bank, two days of declines that have erased a third of its market cap after revealing its bad bet on commercial property. let's take a look at the age tech stocks. the msci infotech stock gauge is running higher. this is thanks to meta and amazon. if you look at the apple suppliers, this is where you see it is more of a mixed picture. tom? tom: thank you very much indeed for the latest on these asian markets. the read across from the apple earnings, disappointment coming through from the china sales picture for apple. let's get to the meta-story. surging after topping analyst expectations for profit and revenue and saying it would start paying shareholders a dividend for the first time. amazon also shot up after

beating estimates. apple rained on the parade of otherwise positive tech earnings after weeks sales in china overshadowed better iphone numbers. joining me for the analysis, robert lee from bloomberg intelligence. what did this week's results mean for the magnificent seven as we wrap them together at the end of this week? >> great question. i suppose the standout for me this week has been microsoft. as i said previously it's a broadly spread business. it has exposure to the right areas. it has number two ranked cloud business which continues to grow strongly. have obviously got their stake in openai so that gives them a deeper more meaningful exposure to growth potential in ai. it has great diversification of businesses. also it does not arguably suffer the regulatory overhang impacting stocks like apple and google for example. i think they stand out.

amazon results and meta or facebook results did extremely well. on two things quickly, one was seasonal strength coming through on the top line. but also benefiting from earlier cost cuts with for example meta reducing their employee account by something like 22% year-over-year. the operational gearing to kick in and that primarily as a driver of profit growth we saw in the fourth quarter. tom: not so good for employers but good for investors. 22% cut to headcount for meta last year, two nvidia now, and the ceo telling us the company is working closely with u.s. regulators amid tensions between washington and beijing over chip imports. speaking exclusively to bloomberg, he told us more countries are seeing the importance of investing in their own data.

>> india, japan, france, canada now. southeast asia, singapore. they speak up about the importance of investing in sovereign ai capabilities. it has become abundantly clear to each of the countries that their natural resource, the data of their country, should be refined and produce intelligence of their country for their country. tom: we briefly sidelined you to make space for that sound from the ceo of nvidia. what do you make of his comments to us about this -- the tech sovereignty? what stood out from what we heard? robert: who am i to argue? very happy to make way for him as well, the greater man. there were two issues he's referring to.

one is national security. with growing tensions particularly between china and u.s., what he is saying is really echoing that. the second is data protection issues. again partially tying in with national security. many governments around the world want to make sure the only data decorated -- make sure any data generated on that territory remains in that territory and is not vulnerable to prying eyes from rival states. that is the core of what he was referring to. tom: robert lea wrapping up the tech earnings with the magnificent 7, 5 of them out this week. and that interview with the nvidia ceo. today's monthly u.s. jobs report will probably show a slower pace of hiring in 2023 following revisions. for more on the market implications of the nonfarm payrolls today, let's bring in paul dobson from our mliv team.

the surveys are seeing 185,000, from 216,000 in december. what are you and the team going to be scrutinizing? >> the way the market has moved this week has taken a little bit of the risk out of the payrolls data in a way. we saw that sharp move lower in yields, big haven bid due to the banking turmoil, regional banking turmoil. that has shifted everything just that little bit. we heard from the fed and we have kind of taken that march prospect of a cut in interest rates then out of the equation more or less. the market wants to know, how bad with the data have to be to bring a back into play? we are looking at the headline feet figure -- headline figure of 185,000. powell is focused on inflation but it's going to take something low like 100,000 or less before

the market would get thinking, the fed is going to have to speed up again after all and are pricing for march is all wrong. tom: paul dobson with a preview of job numbers. bloomberg economic saying arguably there should be greater focus on the revisions that may come through from those numbers as well. now to the central bank of the u.k.. the bank of england has opened the door to interest rate cuts for the first time since the pandemic. let's bring in lizzy burden for the context on what would be -- what we have been hearing from andrew bailey and what we can make of the decision split that came through from the mpc. where does that leave us in terms of how aggressively the boe could cut? lizzy: they've acknowledged the cuts are coming from the bank of england. in terms of how they did that, they dropped the guidance, no need for further tightening. andrew bailey was explicit in the press conference that they have moved away from the hawkish

buyers. but markets did take yesterday overall as a bit of a slight hawkish rebuke. why? if you look at the vote split, no economist thought you would have two hawkish dissenters. it's the first time you had a three-way vote split across hiking, holding, and cutting since the financial crisis. also, the governor quite clearly pushback against the market curve. he said if rates were to follow market expectations, inflation would be higher than the target. don't get carried away with your enthusiasm for rate cuts just yet. you did see traders paring back their bets for a makeup. that is all -- for a may cut. that is all in the updated inflation forecast saying price growth could go up again. tom: lizzy burden walking through the decision from the boe and what we heard from andrew bailey as we think about how to reprice market

expectations around those rate cuts from the central bank. the biden administration has signaled a calibrated response to the jordan drone attack that killed three u.s. troops is now being weighed with details of that next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. u.s. president joe biden is making no secret of his intentions for multiple attacks on an iran-backed group that killed three u.s. soldiers last week. it is a strategy that has exposed him to criticism given that he is giving up arguably the element of surprise. let's bring in bloomberg's rosslyn madison.

why is it taking so long for the u.s. to retaliate? they said they will retaliate at a time and place of their choosing. why are they flagging their intentions? >> it is very interesting. as you say it was right in the aftermath of this attack sunday on the u.s. troops in jordan, the u.s. was saying we are going to have to respond to this area they have been saying that ever since different ways. obviously noting that their response is going to have to be careful, calibrated, needs to send that message of being strong in response to this attack. but not to tip things over, particularly directly with iran, the possibility of direct conflict and even broader conflict than we are seeing already in the middle east. a lot of calculations going into that but the u.s. has been unusually public about some of this including saying this could be a tiered response, staggered

response, not just one and done but a series of strikes on different targets in the middle east. very much talking about hitting iranian assets in syria. perhaps a ship outside iranian territorial waters. perhaps a cyber response. all of those seem to be in their repertoire. the reason it has taken so long is because the u.s. wants to be really sure when it does start its reprisals it is not going to have the trigger effect with iran. there might be background communications. they want to make sure when they do respond it does not sound at a delicate moment for the cease-fire talks in gaza. that could be a crucial element of this. tom: you were very clear to us this week, you made the point it was a bit of a delinking that could be going on between the conflict in gaza and maybe the u.s. conflict with the who the rebels and militants. where are we in those talks?

how close could we be to cease-fire? rosalind: there are many reports there is this conversation going on. there's a meeting between egypt, u.s., and israel. the proposal is being put by qatar to hamas and this would involve a 45 day pause in fighting. it would allow for further prisoner swap's. israeli hostages would come back out and particularly again women and children. but we do know is hamas officials are saying they are still considering it, not agreeing to anything yet. the base case demands on either side, particularly that israel needs to pull out entirely from gaza for there to be a proper cease-fire, that's one of the central hamas demands. it is unlikely to happen in the next couple days, but at least conversation is happening.

it is very delicate right now. tom: another angle to this was the u.s. decision to sanction a number of settlers in the west bank for the violence being committed there. bloomberg's rosalind mathieson with the context. thank you for wrapping up but continues to evolve out of the middle east. let's switch focus. chief executive john lee's efforts to revive hong kong's business environment is being undermined by his push to enact security law. the new law is more expansive than business leaders expected and comes as hong kong tries to revive its reputation as a global financial hub. china's central government imposed a sweeping national security law following mass pro-democracy protests. egypt's central bankers unexpectedly hiked rates for the first time since august, raising by 200 basis points. the move could speed progress on a bigger imf rescue package and sets the stage for another devaluation.

imf talks have been extended until the end of the week. india's finance minister has delivered an interim budget ahead of this year's election focused on infrastructure spending measures to curb the deficit. it includes plans to increase affordable housing and improve solar energy use. the restrictive budget is being taken as a sign the government's confidence in returning to power without resorting to populist measures. the wind power industry looks to storm back after a rough 2023. we are going to look at what is in store with the green energy transition front of mind. that is next. this is bloomberg. ♪

tom: let's turn attention now to the green energy transition, specifically the wind industry which is coming off the back of a very turbulent year indeed. inflation high, interest rates drove up equipment costs causing some firms to delay or cancel projects altogether. i'm joined by a senior associate in bloomberg nef's wind power team. the wind industry squeezed in 2023. what are things looking like this year? leo: we are expecting bloomberg wind to hit a new record this year. china has been pushing to build more gigawatt scale wind energy business in the northern sparta the country where it is less populated -- northern part of the country where it is less populated. we will see when stations begin to grow for the first time since

2020 and we will have more clarity on the support for manufacturing. the first two large-scale commercial projects come online this year as well. tom: good news when it comes to transition. contract cancellations have been a pain point for this industry for the offshore wind industry. is that likely to remain a concern this year? leo: unfortunately we are kicking off the new year with a few more canceled contracts we have reason to be optimistic. we see some governments are ready to pay higher prices like the u.k. which has lifted the option price cap by 66%. and buyers willing to offer shorter terms like inflation adjustment to help developers mitigate risks. the global offshore wind investment is at an all-time high with wind projects --

including the largest project developed in the u.k.. tom: when it comes to the companies who make the turbines, something that came through clearly last year was the pressure on their margins. those we spoke to were quite upfront about that. is it likely margin pressures will ease this year? >> right now, we have a growing number of better priced -- which will boost margins. we are expecting volume to grow this year after rebounding 2023. we mentioned clarity on the inflation in the u.s. and europe, improvable of -- improvement of permitting which allows for more deals. as many european manufacturers still have to rely on supply chains based in asia, there are ongoing risks which have led to a surge in shipping rates, that

could raise concerns for the sector. tom: thank you very much. leo from the bloomberg nef team with a breakdown of how the wind industry is positioned after the challenges of last year. we touched on china and leo joining us out of shanghai. the red headline across the terminal right now chinese stocks accelerating their selloff. the csi 300 benchmark is currently down close to 2%. the shanghai composite down 2.4%. continued concerns about the equity market that of course was a major underperformer last year. we did earlier in the week see revival for chinese stocks on policy measures being announced by officials out of beijing. that optimism has been very short-lived. we are leading up to the lunar new year holidays, you are seeing that pressure once again on the csi 300 down 1.8%.

we will keep across the story for you throughout the hour. chevron ceo mark worth will speak to bloomberg about earnings after we caught up with the ceo of shell yesterday. that interview after 8:00 p.m. london time. the bank of england has opened the door to interest rate cuts, slashing its outlook for inflation this year. more on that and what it means for the u.k. election later this year. that is next. this is bloomberg. ♪ (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy.

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tom: good morning, this is bloomberg daybreak: europe. these are the stories that set your agenda. investors punish apple as sales slump in china. mets at an amazon search as cost-cutting pays off. the ceo of nvidia tells nvidia tech sovereignty will boost demand for chips. >> it has become abundantly clear to each one of the countries that their natural resource, the data of the country should be refined and produce intelligence of their country for their country. tom: u.s. regional banks extend their selloff on property fears as traders await the u.s. jobs reports for clues on fed policy. the bank of england opens the door to rate cuts for the first time in this cycle. we are going to hear from governor andrew bailey later in

the show. let's check these markets on a risk on day this friday, the bloomberg dollar index is down. as is what we are seeing from these tech giants, notably, meta and amazon. certainly, offsetting the concerns about the slowdown in sales from apple in the chinese markets. your big socks are looking to add. position for a solid session to close out the week in europe. ftse 100 futures looking to add 69 points. it's up. despite the fact we see pressure on iron ore. he could weigh on the resources sector and iron ore. s&p futures building on the gains of yesterday when they added 1.2 percent, currently pointing higher by 6/10 of a percent. nasdaq lifted by the optimism around meta and amazon. 50 billion u.s. dollars on the firstividend ever. nasdaq 100 futures point up 1% after the gains of close to 1.2 yesterday.

we have the payrolls print coming through. the survey looking at a number of around 180 5000. jp morgan saying that it is now time to take profit on the belly of the curve where the u.s. five-year having performed relatively well. that was down to the real estate and property concerns in the u.s. and a move of money into the five-year. now is the time with profit, 381 on the five-year as things stand. pound is the best-performing currencies so far this year. 127 as the boe opens the door for a potential cut. brent at $79 a barrel. it's up for the session, looking at losses of 5% on the week as we edge closer to a cease-fire in gaza. pressures down 2.5%. look for the basic resources at the open with pressure there potentially. let's get the details on the bank of england decision, but we hear from andrew bailey.

open the door for rate cuts for the first time since the pandemic struck. governor andrew bailey has firm predictions that inflation will fall to target this spring. he said he would need more evidence before easing happens. >> services inflation is at 6.4%. it's well above everything that's constantly meeting the target. i think we -- with wage growth we have seen the official measure come down. it's below where we thought it would be. the open question as to whether that was an adjustment of some anomalies in that index. whether that is really the move. it's now in line with the other things we look at. they are above levels that are consistent with the target. tom: joining me now is bloomberg's u.k. correspondent at lizzy burden. thanks for joining us in the studio. they are getting that took target. 2% target on inflation. they are making progress.

what are they concerned about? why not say, we are open to cuts? what is the concern level for the boe? lizzie: there was an interesting moment where the deputy government was asked is the last mile of bringing inflation down the hardest. he said, not necessarily. it's more because you've got domestically driven inflation at this point then next terminally driven inflation, imported inflation. there is this immediate threat of supply chain disruptions in the tensions in the middle east. that's partly why they are so hesitant to be definitive about where the cuts are coming. you don't know what will happen geopolitically. they don't know it's coming down the track in terms of down hall. it's interesting they mention it. there's a fiscal policy. we are in an election year. don't know what tax cuts we are going to get. they did the look back at the statement in the business and personal tax cuts the chancellor has already done and suggests they were inflationary. even though the chancellor said

he would not do anything that would jeopardize his prime minister's top goal of bringing down inflation. other upside inflation risk, you have stubbornly higher wage growth, even it's -- even if it's coming down. services inflation. all of these past forecasting failures, which the x fed chair is looking into, we are expecting him to report in march. lots of reasons to be still hawkish, and it would suggest that the bank of england cooks after the ecb and the fed. tom: that report will be interesting. you tried and politics. as all of this action is happening at the bank of england yesterday, you also put on the charm offensive with the business community. what came out of that? lizzie: they call it the smoke salmon effort and it doesn't stop laborers efforts to woo business. the woman at the polls suggest will be the next chancellor is that labor will not raise taxes

on company profits. basically saying profits is not a dirty word. echoing tony blair when he said he was relaxed about profit making and people getting rich as long as they pay their taxes. it's a difficult picture for labor because this is the other thing that came out of it. we just don't know what their inheritance is going to be from the conservatives, and the economic outlook as we learned at the bank of england meeting is incredibly uncertain. we have the shadow business secretary of labor on bloomberg radio yesterday saying there isn't much scope to raise taxes, given that you have such a high postwar tax burden. so trying to get rid of the conservative line that that is what they are going to do, whilst trying to maintain this image of fiscal responsibility because, frankly, there is no other choice but to put yourself as a party of fiscal responsibility. take a listen to yesterday.

>> we cannot and we will not allow public spending needs, however important, to threaten the stability of our finances. we have seen where that leads under this government, with total clarity. it is the definition of a full -- of a false economy. tom: the leader of the labour party. lizzie was saying polls suggesting likely the next prime minister as we head up to that election. the fiscal constraints that lizzie was outlining for whoever is in power after that election. lizzy burden with the context, breaking down the boe decision, the political one as well. the head of the european commission met with farmers unions in brussels after a day of protests. what a remarkable process outside the european parliament.

speaking after that meeting, ursula appeals for joint solutions. >> we share the goals, the protection of nature because we all live in nature, with nature. and, important is for us is that we find common solutions how to reach the goal to protect the environment and nature. tom: for more on this, i'm joined by our europe correspondent maria tadeo. all the developments around funding for ukraine as well. maria, why are the farmers protesting? what is underpinning their angst, anger and frustration? >> it's a very good question, there is in single issue, it's more of a constellation of issues. they talk about the idea of unfair practices, unfair competition, they also talk about too much regulation and pushback.

by the way, to some of the climate action. they are thinking that, if you believe the european union and european farmers will practice and do this business with the best standard, there should be a premium attached to the price tag of the product that they make. so all of this put together really highlights and underpins what they believe is now a sector, an industry that is becoming more difficult to operate, more expensive, but also does not allow for a certain standard of living. a lot of that has to do with the cost of life, and decline in purchase and power that we've seen in some places in europe. specifically, we should mention when it comes to french farmers, and this is important, they've also said they compete against cheaper nations. they have talked about cheaper imports into the european union, and they really are against the idea of the macro. remember, this is a trade deal for the european union and latin

america have been working on for years. it's important because yesterday the french president repeated that he does not agree with this deal, that france will not ratify this deal, and this deal will not happen under his watch. it's important because billions of them are potentially at stake as to whether or not the deal takes place. if you read the mood over the 48 hours that we seem past, it is very difficult to see how you get any progress done on this file with the farmers up in arms. tom: maria, we remember the protestant protest of the yellow jackets are the yellow vests in france and how they managed to derail a keep part of macron's policy agenda at the time. now we are seeing farmers weaponizing their tractors, to great affect. are we seeing a start of a yellow vests 2.0 movement in europe? maria: that's an excellent point. the french president has not

forgotten the yellow vests. it clearly there is something in the air, there is something in lizzie guys. the concern that maybe this could be the start of it. certainly, now a political will to avoid it, especially because, let's not forget you have the european elections around the corner. they will take place in june. what is different this time, and this to me was interesting, he saw that tape yesterday with the head of the commission when we spoke to her. officials here have been very quick to respond to farmers. yesterday the head of the commission met with farming unions. she has mud on her face. she message with a message when we spoke to her was, i'm here to listen, i want to listen to them and take action. she even conceded some of the points they make are fair. the commission has to work on it, the same goes for the belgian prime minister. you alluded to that protest. yesterday the european parliament was brought by chap -- by tractors, by trucks.

you see the statue behind me was defaced. some of it was also really badly beaten here. the police did not intervene very heavily. that is unusual. usually you would see riot police in those similar situations. that highlights the fact that they do not want to be very heavy-handed with farmers. for europeans, this is a part of the society that people appreciates. for europeans, food matters. southern europeans believe this is a way of life. obviously the political response. tom: we have lost their connection with maria tadeo. fantastic reporting on the ground as farmers take to the streets. we are seeing in france, germany, now brussels as maria was outlining for us, it's becoming a wider issue with european union. coming up, more on apples china challenges, and the other big

tech news coming through from meta and amazon. stay with us with the details. this is bloomberg. ♪

tom: -- >> india, japan, france, canada now, southeast asia, singapore speak out about the importance of investing in sovereign ai capabilities. it has become abundantly clear to each one of the countries that their natural resource, which is the data of their country, should be refined and produced with intelligence of their country, for their country. the vast majority of the computing market has been the united states, and to a much

smaller degree, china. for the very first time, because of generative ai, computers -- computer technology is going to impact every single industry in every single country. so the markets are going to be quite large. tom: that was the nvidia ceo with a well-worn leather jacket. speaking exclusively to bloomberg technology's ed ludlow. let's stay on the tech story. apple reporting a deep slump in china during the holiday quarter, that's of the company returned to revenue growth. meanwhile, meta and amazon sword after beating expectations and their latest quarterly results. joining me now for the deep dive on the tech sector, what we see from this is our tech reporter, i have always been slightly skeptical of the whole notion that nationalism is going to drive china and apple and iphones out of the chinese market because i've always seen that with apple products among

many people in china. it is having an effect and they are being challenged in china. the competition is facing headwinds. >> for sure, looking at the numbers, the china story overshadow the rest of the results. that's a real worry for the company because it was a real, and it is a key market for them. essentially, what we are seeing is that, as you say, it was always desirable to have apple products in china. that is probably still the case, that there is a twofold story. there are restrictions from the government on some people not being able to use apple products or other american products. but more crucially, there are domestic brands which can really compete. this new huawei phone is really eating apples lunch a little bit in that domestic market. that's a real fear for the company that was always able to say, you have the best products and that's why people go to us. something interesting to see is that this slump happened last quarter. the current quarter also has

this discount, this very rare discount over the chinese new year time frame that apple was trying to offer to chinese consumers. so will be interesting to see where we see numbers for this quarter, whether those discounted iphone products actually has an impact. tom philando castile points out, it's rare for apple to cut the prices of their products in the chinese markets. if you stripped out meta and amazon from the tech story today, you would probably see a downside for tech equities in tech stocks. that's not what has happened because meta has come through. from meta, the things that stood out where the buyback on the dividend. what for you are the takeaways? >> the buyback in the dividend were significant for meta. that is a significant step for the company. also, the thing that was interesting across both companies is that both companies have listen to investors and have taken significant steps to cut jobs and cut across across the country.

it's about 45,000, may more workers that have impacted by meta's cuts between the two companies since late 2022. so that's a huge number. these are companies that investors thought were getting very bloated during the pandemic. then really took that message and while it lasted, and now a investors are giving them a good position this morning. tom: mark zuckerberg is comfortable with the leader operation. we heard from the nvidia ceo spoke -- speaking to bloomberg, what was the most interesting that we heard? >> the most interesting thing is that they are company that is really being able to capitalize on a broad effort to build out ai capabilities because they are supplying the chips for data centers. a lot of the conversation he was having with our colleague earlier was about sovereignty and about companies and countries wanting to be able to develop their own ai and make sure that it's something that is based on their sovereign data. i think what's an interesting

question going forward is really how feasible that is for every country that may be doesn't have the same amount of capital to deploy as big -- big tech companies that are hyper focused on developing aia. whether sovereignty is just a question of being able to put nvidia chips and putting out your own computing infrastructure within a company. at a set -- at a certain point it requires huge access to broader data, not just the data that governments out. tom: we have a very wide gulf between the countries that have the ability to buy these very expensive chips and build out their own data centers and solvency versus the countries that sibley cannot afford to do that. basically brussels, you report on the sovereignty part of it. i know how it -- you have -- you have been reporting on the big ai companies and big ai that's. how is europe thinking about this question of sovereignty? >> your question is always one about regulation, it's about limiting the role that the u.s.

players can have in the european market. there is this market around regulatory capture, that is what seems to have happened a little bit with the ai, there is this extra criticism of the european model that is essentially that they have encrusted their own industry when they could have a lot of real competitors. that's what people like, the ceo also criticizes within europe is that they need to be able to make legitimate competition to big tech companies. the other side of that argument is maybe you're trying to build out a major ai company now and build out their ai capabilities away from microsoft, away from google. it's maybe a little too late because the basis of the foundation of that ai development, which we are seeing from big tech, is that they are sitting on a cash of 20-25 years of data because of all of our use of those companies for a long time. tom: finding balance between innovation and regulation is still much of the debate. wrapping up the importance of

the earnings coming through from meta, amazon and apple, of course. our tech team at bloomberg. plenty more coming up. stay tuned. we will get a breakdown in a preview of the payroll. we will think about the numbers that could cross and will cross later. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe this friday, happy friday. china sporting the motocross equity markets, csi 300 down a tenths of a percent. at this point in the session the csi 300, the benchmark in china dropped more than 3%. suddenly, this remarkable tick up as well. did the national team step into put some under chinese stocks question mark i will leave that question to you. we continue to look at that question as the negative momentum feeds through these

chinese equities. the relief that came through the early part of this year with policy managers coming out of beijing. this as we lead up to lunar new year holiday and the closure of those markets for a week. let's flip the board and look at to something more immediate in terms of the data front. that is the payroll story out of the u.s. bloomberg economics came out with information. it will get a print of 185,000. bloomberg economic saying it will be a very muddy picture because of seasonal effects. it will be noisy, it will be confusing. she and the team at bloomberg say, more important will be the revisions to prove this much numbers around on fun payrolls. they are convinced we will see softness coming through for the u.s. labor market. that's the context, and this is what has been happening over the last few months. the number came in for december slightly above the estimates. we will see if that's how it's unfold with bloomberg economic seeing 150,000. to have a look at the back story

because the pressure was there in the u.s. session, the concerns about the exposure to commercial real estate. you just see the divergence between the small regional enders in their exposure to commercial real estate versus the larger banks, and that is potentially where the pay point is as those smaller lenders have to quantify the impact and put aside more reserves. there is plenty more coming up on bloomberg. they will be focusing on that story and looking forward to payrolls and breaking down the tech stories. stay with us for markets today. that is next. this is bloomberg. ♪

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