>> good morning. this is bloomberg daybreak: europe. these are the stories that set your agenda. apple reveals its ai play announcing a partnership with openai and a slew of new features. elon musk responding by threatening to ban apple devices from his companies over security fears. s&p 500 closes at another record high as investors turned their attention to the fed with the fomc beginning a policy meeting today. rishi sunak's cabinet lobbies him to add last-minute big-ticket tax cuts to his manifesto amid growing disquiet over a lack of showstopping announcement. wage data in the u.k. semiconductors coming to the

fore. apple following close to 2% yesterday after revealing and unveiling ai features. they are looking to make up some of the losses of yesterday. the cac fell over 1% so we look at french equities given the politics. ftse 100 futures flat. u.s. futures, the s&p looking to lose about .1%. maybe a little bit of profit taking. all standing on the sidelines of the decision from the fed. nasdaq features low. let's lacrosse asset. it is the focus in the u.k., but we switch focus to cpi. a couple hours before that fed decision. we will be scrutinizing adjustments to the forecast from the fomc given that in march the expectation was for three cuts.

how will the markets react to that? the 10 year at 4.44. euro-dollar at 1.07. brent crude at 81 we $52 -- $81.52. goal down .3%. let's cross to asia, where avril hong is standing by in singapore. it's looking challenging in china back from the holiday, avril. avril: back from that holiday and the chinese and hong kong benchmark down. look how we are faring on the hong saying. concerns around the real estate sector. increasing concern around how chinese firms are in the crosshairs of u.s. and eu lawmakers. i will talk more about that in a bit but i wanted to highlight how we are seeing the outlier in the nikkei today helped by ship

related stocks tracking their u.s. counterparts overnight. let's flip the board because as our colleague has been writing about on the blog, there's an interesting dynamic that's been emerging centered around see atl. this is a major chinese battery maker. that stock has tumbled 10% in the last session as a group of u.s. lawmakers seek put it on an -- seek to put it on an import ban list. it's not a stock on that index but it's in the greater china space so as traders seek to reduce exposure to limit losses, you could see knock on effects. the other interesting thing to highlight is how we are seeing the divergence. it's happen to couple times in the past two years and each time this has happened, it did not bode well for the hong kong benchmark. let's flip the board because i wanted to talk through what we are seeing among currencies. it's pretty range bound ahead of those key events later in the

week. we wanted to highlight dollar-unit has breached -- dollar-yen has breached a level. also hitting the weakest level since november of last year. overall it's pretty range bound ahead of the u.s. cpi. let's flip the board again because we are not just watching out for the stock of catl. it's also about the carmakers as we watched for a decision on eu tariffs. those apple suppliers we are watching after that event failed to inspire investors or allay concerns surrounding iphone shipments. these are the stocks that are on the back today, tom -- the back foot today. tom: shifting to software, the french i.t. company axios, which has struggled in terms of

financing, is reported now to be accepting -- has decided to accept an offer on a rescue deal offer from the french i.t. company one point. it had two competing offers. one from a czech billionaire and the other from that french company. atos has decided to proceed with that proposed rescue offer. we will continue to keep you abreast of the story. that is atos down 91%, challenged in terms of its financials, but agreeing or looking to accept that offer from that company in france. more details on apple unraveling its suite of new ai features that includes a partnership with openai, the maker of chatgpt. the iphone maker betting a

personalized and understated approach to the technology will win over customers. it's a high-stakes bid to catch up with rivals in the booming ai market. >> recent developments in generative intelligence and large language models offer powerful capabilities that provide the opportunity to take the experience of using apple products to new heights. introducing apple intelligence, the new personal intelligence system that makes your most personal products even more useful in the late. tom: more on this with our reporter. did apple at this conference do enough in your assessment to convince investors and customers and clients it is now on the front foot when it comes to ai? the stock was down 2%, not entirely unusual on the back of these events. that happens historically regularly with apple.

having managed to come through with conviction on their ai products? >> everything's a big step in the right direction. incredibly slick and sophisticated integration of generative ai into all of those familiar if you are user. shares are up almost 20% over the last couple months. it was an incredibly well flagged event. we did not hear anything yesterday that had not been written about for the last month or two. there was not anything incremental. the big question remains, everybody is thinking, is this going to trigger a super cycle? will people be rushing to buy an iphone 16 in september or october inevitably laden with features. you can get this technology on the iphone 15 and pro and promax. there's a limited number of people who have that that can support this technology, so if you get excited about the stuff,

you want to be able to play with it on your phone, you will have to buy a new phone from september or october. that's why the shares have gone up if you are thinking this is going to drive a negative trend in iphone sales into a positive one. that's what the market is expecting. >> we will monitor whether there's a pickup in terms of sales as people look to upgrade on the back of some of these features. this is intriguing. elon musk putting out a tweet on x saying he would ban iphones, apple products, from his businesses if indeed they have partnered with os and openai. is this petulance from musk or is he taking a leaf out of china's book, where they have find -- they have and iphones from many state owned enterprises? >> they announced this relationship with openai and chatgpt. he questions if it's going to be integrated and that would

present a big privacy concern. is he within his rights to say we don't want these devices on our network at tesla and elsewhere? it feels opportunistic with the timing. we have known they would do this partnership for a week or so now. he could have said earlier i have concerns about this. he's trying to get some of the spotlight. he's got history with openai. they are quite tense. he's developing a competitor to openai so this is an opportunity for him to get some spotlight and advertise what he's doing. he has some legitimate concerns about how we develop generative ai for the good of humanity, not to the detriment of community, but it's clearly wrapped up in commercial interests and his view on life, which he's very happy to share with people. tom: he's one of the founding investors of open i as well -- of openai as well. matt, thank you.

breaking down what we saw from apple and the response from elon musk. june's fed meeting starting today. bloomberg economics expects this to be one of the years most pivotal, provincially -- financially providing the clearest and yet to the rate cut timetable. talk to us about the equity market reaction since -- sensibility to the fed decision and any changes to the dot plot. >> this is a great opportunity. if the fed want to be more hawkish than what the equity market is expecting, now is the time to do it. effectively they will do a mark to market on their dot plot. the equity market's giving them the opportunity to be aggressive. they could go down to one or zero on the dot plots because

the equity market can withstand it. it has been strong partly on the ai story and in general the performance of u.s. equities this year has been astonishing. so if the fed does come out and be more aggressive now is the time to do it because it probably will not disrupt the equity market much. within the context of where we have been over the past six or 12 months, it's nothing really. so definitely the equity market is giving the fed a window. let's see whether they take it. tom: this market can take a move from three to one or zero. what about the dollar? how much is priced in at this point? >> probably not enough because this is also an emerging-market story. it's not just about the fed as well. we also have the bank of japan. it's also expected to be negative for the yen. if the dollar is going up against the yen, that will lift

the emerging-market world. we have already seen some action today. the mexican peso is under pressure. china has been week for some time. you can see the pressure is building up. even the indian ruby as well.it is still on the soft side. so clearly the dollar store is more than just the g10. it depends on japan and the rest of the world. even if the fed does not disrupt the market too much by the end of the week, the u.s. dollar could still be quite a bit stronger. then you throw in the french election risk, which is clearly euro negative. all in all, the u.s. dollar needs to price in more upside. tom: mark cranfield on the resilience of this equity market. maybe more to be priced in. thank you very much indeed. 7:00 a.m. u.k. time, we get the wage data, earnings data and bonuses. the numbers expected to come in

about the previous reading. that could pose a challenge for the bank of england. that's at 7 a.m. u.k. time. then the fomc meeting beginning. we get that announcement in the decision on wednesday. later, that opec report. brent sits around the $80 mark, still have 5% year-to-date. we will see if that report outlines a picture of improving demand for oil. you can get a roundup of stories you need to know to get your date -- get your day going. coming up, the united nations adopts a u.s. crafted truce deal as secretary of state antony blinken arrives in israel. more on the ongoing cease-fire talks next. plus new quantum's founder and ceo says the u.k. is emerging as a world leader in quantum computing. we speak exclusively to the ceo

about what is needed to stay ahead in that field. that is next. this is bloomberg. ♪

tom: bird daybreak europe --

welcome back to bloomberg daybreak: europe. the united nations security council has voted to support a cease-fire plan that sets conditions for a temporary traders, hostage and prisoner -- temporary truce, hostage-prisoner exchanges, and a reconstruction plan for gaza. it passed 14-0 with russia abstaining. ramonda bercetche joints me -- joumanna bercetche joints me. what is it looking like? >> yeah, tom. we know the resolution passed the security council 14-0 with russia abstaining, all in support of this u.s. cease-fire proposal but on the table by joe biden by may 31. there's growing momentum to endorse the proposal. it indeed tells you that at a worldwide level many of the countries within the u.n. would

like to see a cease-fire deal pushed and passed. in reality, the u.n. has taken a backseat since october 7. there have been multiple pushes and calls for cease-fire deals and it was not until about a month ago that the u.s. themselves signed on in support of a cease-fire deal. it's unlikely to affect how things actually manifest on the ground but it's significant that there is growing worldwide momentum around this proposal. tom: meanwhiletom: -- tom: meanwhile, antony blinken on israel. what has he been telling his really counterpart? >> that's right. the u.s. secretary of state is on his eighth trip to the region since october 7. he met with the egyptian president yesterday. today he's in israel. he met with the prime minister, netanyahu, towards yesterday evening. there will be more announcements expected today. he is trying to shore up support

for pushing for this truce agreement. it should be said here that both sides have said they want to continue the discussions. the issue, as we have been citing, is it that a 3 -- is that it is a three part deal. the first would involve a pausing in the exchange of fires, a temporary cease-fire that would entail the freeing of some hostages, the return of displaced palestinians, and a surge in humanitarian aid. once that six week window has passed, then in theory what should happen as they move towards a permanent cease-fire. that has been the sticking point because hamas are saying they will not enter into phase one until they have clarification on phase two. israel is saying they will not enter a permanent cease-fire discussion until they have completed their military objective of neutralizing hamas, so a lot of sticking points, but the fact that the secretary of

state doesn't append how important this is for the u.s. and increasingly for the rest of the world according to that u.n. resolution. tom: bloomberg's joumanna bercetche, thank you for the latest from that region joining us out of dubai. horizons anchor. we will look at what's driving oil prices up with a shift in the commodities space. the biggest rally since march ahead of an opec oil report. we get the details on the oil space. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. oil is a steady head of an opec report that will provide a snapshot on the outlook for the market after crude prices rallied yesterday. bloomberg senior energy reporter

stephen stravinsky joints me from singapore on the latest. . what is driving the upside around oil it is it your expectation that that upside can be maintained? >> it's not terribly technical or granular but it seems we are in a sort of buy the dip situation. when you look at the technicals for brent oil, prices were in the oil -- in the oversold territory last week because opec-plus was adding more barrels to the market. there was this expectation last week because they were adding more from. there in the year -- later in the year, they could be adding as much as 500,000 barrels per day and 1.8 million barrels per day by this time next year. that together fed this bearish attitude.

prices started to tumble, kind of exacerbating a decline. now things have kind of jumped up and people are looking at different things. there may be this opec report that will be out later that will show that was what was driving the supply and demand situation. that was driving saudi arabian and other opec list -- opec-plus members. that was maybe part of the reason why we didn't. we have the u.s. treasury throwing some sanctions on some shipments -- shippers from iran. while that will not have a huge impact on the physical market, it is something to think about as -- there is what's happening in the middle east and how the u.s. reacts to that conflict ongoing. anything that involves iran will increase prices to integrate. that is being viewed as what pushed prices up yesterday.

things are steady today. we will have to get a clearer picture from other reports. the iaea will put out a report on where oil supply and demand place for the rest of the year. that will be key as to whether or not things continue from where we are now. i want to flagged that air travel is also picking up. we had a great story on the terminal about a record year for air travel. jet fuel demand is rising. that could be one of the bright spots in the market despite somewhat lackluster demand in places like china. tom: that's interesting. we look ahead to the opec report out today and the iaea report to round out the picture. your flagging the pickup in terms of the demand there in flying. what else are traders looking for in the weeks and months ahead? what is the inventory situation looking like in the u.s. and what is the demand looking like out of china, stephen?

>> out of the u.s., it's driving season. that's going to be the big thing people focus on. are people really going out? there have been some early numbers coming out that showed oil demand from driving in the u.s. is higher than people expected. what are those numbers over the next few weeks and months as people go on their summer breaks? what does that do for inventory. will that drain inventories in the u.s.? shale output is strong. it has dropped from the peaks we saw a few months back but it's been pretty resilient. what will happen there -- the chinese demand picture is complicated. they are part of that travel story as jet fuel picks up a lot of that. a lot of that is chinese demand as well. you have to look at their imports and refinery run rates as well. they have been not exactly what

the industry had been expecting. that presents sort of a bearish picture, but on top of that, i'm sure this comes as no surprise to you, a lot of eyes will be on the fed. what the federal reserve does if they decide to hold interest rates, if there's any hint to that later, that will affect the dollar in the dollar effects crude. tom: the fed looms large even in the oil space. thank you very much indeed with the analysis on what is moving oil. we will take a closer look at the u.k.'s quantum computing sector. we will speak exclusively to the ceo and founder of nu quantum coming up. that's coming up. this is bloomberg. ♪ her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock.

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♪ >> good morning calming -- these

are the stories that set your agenda. apple announcing a partnership and a slew of products. the s&p closes at a record high. british prime minister's cabinet lobbies him to to its manifesto as we count down the latest wage data. largely on the back of the announcement that he was calling

, we look to make up some losses today. the next focus is wage data higher than the previous reading and implications with over one cut christ in. ftse 100 is flat. notching a fresh record despite the drop of 2%. a little more stability for the single currency. we will see how well the market absorbs the option.

gold is that 4/10 of a percent. that is sensitive to revisions to the dot plots on wednesday. apple finally unveiling features including openai. it includes a revamped version of siri. jackie has more from apples conference in cupertino. >> today in california apple unveiled apple intelligence. that included voice commands and

natural language. transcription tools and personal emojis. they announced a partnership with openai, users can compose texts and they will only be available with the iphone. love features will -- the features will be done on the device and the data will not be stored. the announcement drew reaction

from elon musk who said he will ban apple. >> staying on tech, the u.k. is emerging as a world leader in quantum computing but government support is essential if they want to make microsoft or nvidia. the ceo joins me now. thank you for joining us in -- and -- in the studio. that is some ambition. we are a long way from that. tell them what the potential impact could be? >> i spun out quantum out of one

of the best groups at cambridge and we have developed infrastructure required to scale up quantum computers. a similar moment happened in classical. we have the power to build things like a cloud which brought about massive economic volume. it is about networking and orchestration. tom: it is network that you specialize in. there has been a lot of talk about quantum computing. how far are we from a fault free computer? these are volatile machines.

>> correct, first i would like to debunk that they are 10 years away. the industry is barely 10 years old. in the past six years we've made progress deploying small systems , getting hundreds of cubits and that we are in a scaling up moment for the first time. we have a roadmap to that computer and roadmaps .2 2033 434 and the computer will revolutionize industries, for example, it will make cybersecurity systems vulnerable. tom: 2034 is the timeframe.

you touched on sectors that could benefit. talk about the u.k.. what do you need to see to keep the u.k. ahead? >> the u.k. is a world leader, it is top three and the reason is good scientific basis. this is why we came to the u.k. than the government has had great strategy. 12 years ago they announced a strategy with one billion pounds. most countries followed and based their strategies on the u.k..

the u.k. announced another 10 year strategy. tom: you came here from overseas, that talent, the government has talked about restricting visas, is that a roadblock? >> talent is a key risk and the u.k. attracts top talent, but issues like visas and restrictions make that a big risk. tom: you raised a .5 million pounds last year. how willing are investors to get behind this as ai draws attention, is there a drought because of the obsession with ai?

guest: we have great deep tech investors in quantum and there have been aliens invested. even with a downturn in investment, quantum investment held up so there are still large funding rounds and we make sure they continue. tom: ai is not crowding this out. indeed, fascinating business. carmen, quantum founder and ceo, fascinating technology. the prime minister faces calls by cabinet ministers for tax cuts and tough migration, we touched on that. early drafts provoked disquiet

that might prevent a heavy defeat. we are joined by lizzy burden. what can we expect? what do we know? lizzie: i know i say this every time, but this is one of his last chances to close the lead. he is getting attacked by reform led by nigel who brought down his predecessors and he's got an attack from labor so we are expecting a cut for first-time buyers, a cut to insurance, payroll tax and like the surprise election announcement, this was drafted by a group of tops and beyond that there is

wrangling that he is not going far enough to oppose the reform party. they want a cut to inheritance tax and they say cutting national insurance when it has not moved the polls is to paraphrase the definition of insanity. tom: one view on that manifesto. what about liberal democrats? we have that now. lizzie: bigger tax rises for the rich, frequent flyers and banks to raise pounds and find care and the national health service. they want to rejoin the single market when it coombs to the european market. this is the other threat i've

talked about, this is from the south. not likely to see a liberal democrat as prime minister. they would come in behind reform, but they could win seats and influence the shape of the next government if there is a close result. tom: meanwhile bank of england expectations we may get more with wage data, what are you scrutinizing? >> the picture is uncomfortable but not enough to stop bank of england. we have the ecb's first cut because of rapid wage growth.

sticky wage growth because we had a rise in the national minimum wage. but economists expect the first cut in august. the only one fully priced is november but will be interesting to see the new pricing. tom: thank you very much indeed on the politics and economic data. we will break that live. leaders are eager to resolve tough spots, we are live with the latest. this is bloomberg. ♪

>> welcome back to bloomberg. after ursula won the most seats she will look to clinch a second term. conversations continue. joining us is all of. what are we looking at, how is this shaping up? ali: it is hers to lose, what is happening is what blocks they will fall into.

winning both vote, they have been ejected because of comments who said not every member of the ss was a criminal. they were cleaning up their party to be back in the groups. monday leaders will speak about who gets the top job. he was floating maybe will get mario in. who is in a position is giorgia meloni. tom: the gamble over the

weekend, we have more clarity, what fine line is this? guest: it's extremely fine, difficult to pull off and it is brash, marine le pen's party is number one. currently they only had about 15% of seats, it seems to me his gamble relies on the french not

voting at the national level and the tradition of saying we will form a block no matter what happens. the other is speculation on bringing them into government. that fails because these are lower stakes elections so it comes at a time when we've seen a willingness to vote that culminates in an unpleasant surprise and what is a vote that is a couple of weeks ago -- away. tom: have they crystallized 30% plus of the population? in berlin with the latest in terms of talks in this fine line

. now to other stories, european president says the last rate cut will not be followed by further moves. the bank must stay cautious and there is no trajectory for borrowing. the ecb lowered its rate last thursday against higher inflation projections. bill gross election results present opportunities. results sent bond yields to their highest mark this year. >> in terms of attraction german 10 year bonds are narrowing.

and today as well, so there is a point where european bonds are more attractive. tom: southwest is a target for elliott management. they've taken 11% stake in they want a comprehensive business review. they have a stake in anglo american. this is bloomberg. ♪

>> i think the market anticipates the fed to stay, maybe september, maybe december

if the current numbers continue. tom: bill gross speaking on the fed the s&p notching up a new record. modest gains, 10 to one lifted. the expected revisions tomorrow, mark crane field says the market remains resilient he expects markets to be resilient. in terms of trading you could see 1.3% by friday on the back of volatility, a crucial day for

markets. single currency was lower and one-month risk reversals. whether the dollar has priced in enough is a key question. as positions builds. it was look at u.k. data dropping in the next few minutes. markets today will give you analysis. the most recent month was 6.1%, a marginal take up. what that does as markets price in, they don't price and a full

cut until november, 30 basis points this year. they could go as soon as august but earnings data could be consequential. working to be looking out one of the largest market makers. we will speak with the global head of rates trading. that is that 830 u.k. time. markets today is next, this is bloomberg. ♪

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>> good morning, i'm anna edwards alongside kriti the and guy johnson.