>> good morning.

this is "bloomberg daybreak: europe." these are the stories to set your agenda. a surge in tack drives wall street to its 30th record high this year. the philadelphia fed president blocking the keys for one rate cut by the end of the year. postponing a deal about how to divide the block's top jobs. the president is expected to win a second term as european commission president. russian president vladimir putin is on his way to north korea, the first visit in more than two decades. as he pushes for more military support for his war in ukraine. check in on the markets. after a 30th record for u.s. stocks powered by the med cats

and the handoff to the asian session, the lift is there. you expect to see green on the screen. futures in europe up by .3%. the ftse 100 pointing higher by .3 percent. the s&p flat and the nasdaq futures down by .1%. cross asset -- a fed nonvoting member said adjusting one cup by the end of the year seems appropriate. he says he needs to see more data and several more rounds of data to confirm where he thinks the appropriate place would be for a cup. yields moving higher yesterday around eight basis points. on the benchmark 10 year, corporate issuance from home depot and that seems to have weighed on treasuries. euro-dollar down. bitcoin, a broad selloff in the

crypto space. falling to its lowest levels in a month. down 1%. brent trading at $84 a barrel, down .2%. let's cross to singapore for a check on the asian markets. >> it is interesting what we are seeing in this part of the world. a tracking of the powerful rally in the u.s. today, the infotech is outperforming helping the taiex to lead the charge in terms of gains in the region lifted by the likes of tsmc. its price target was upgraded by city and morgan stanley but we are seeing an outlier in the chinese equities and on the hang seng as well. the concerns given the mixed data coming out of the chinese

economy yesterday dogging investor sentiment along with what we are hearing about trades bets with the u.s. and europe. those are the risks for equity investors playing into what we see on the mainland and in hong kong with tech coming under pressure. we got a decision from the rba today. we will keep an eye out on what we get from michelle bullard. leaving rates unchanged as expected. if you look through the statement, it also says it is not ruling anything in or out. what was interesting was the last paragraph -- it suggests that reiteration that rate hikes are on the table. we are seeing a hawkish reaction. the yields on the traded bonds are moving more than prior to the decision. the aussie saw a bit of a gain.

still sitting flat against the greenback. this is not unexpected given the resilience of the dollar. the u.s. dollar -- we are also watching out for messaging from the bank of japan. today we got the governor suggesting that they are not ruling out a rate hike but when they will be cutting bond purchases -- he says these things are separate providing a boost for the yen, pulling it away from the 158 level. something to watch out for in terms of the japanese currency versus the greenback, it could get a further boost. you think about how traders have been eager to jump on any's side that we could see easing from the federal reserve. the one to watch for later today is u.s. retail sales.

a disappointment could turn up in dollar-yen. tom: we will be unpacking a preview. sales expected to take up month on month. thank you for the details around the rba decision keeping rates on hold. but a hawkish statement coming through from the central bank of australia. philadelphia fed president patrick harker says he views one interest rate cut as appropriate. he added he would like to see several more months of improving inflation. >> i have a forecast inflation appointment. a modest rise in the unemployment rate and a long glide back to target for inflation. if all of that happens as forecasted, i think one rate cut would be, could be appropriate by year-end. tom: a long glide back to the

feds's 2% target. he wants to see several more months to get that confidence. let's bring in bloomberg's mary nichola. at a time when we have an intriguing reporting from bloomberg on a strategy based on blackrock's etf in terms of long data treasuries. it has successfully signaled when to buy and when to sell. it signaled on friday and suggested investors start to sell. what is your take on where this treasury market is and what is priced in as we look ahead to the retail sales data nadir today? -- later today? >> in the last month treasuries have had a strong run up 17 basis points. it looks like the markets and

traders got over excited about the cpi data. shrugging off what the fed said in terms of looking towards almost two cuts from the fed. parker emphasized -- patrick harker emphasized this. the fact that they will be more focused on data dependency. he is a non-voter by also leans towards the dovish side. the dovish members of the fomc say he is leaning towards one cut. you have the momentum building and it looks like the treasuries have been overbought. it looks like anything could trigger a selloff in treasuries. it is likely that could be one of the key things -- where the momentum was too strong and too much in favor of treasuries and that is likely to reverse. tom: when it comes to the data

question, it was interesting to hear from goldman sachs. in terms of the health of the consumer, we will get a gauge later today with retail sales coming through. what will you be passing when it comes to that data set? >> it is about the consumer. how the consumer is holding up. we are seeing cracks in the labor market. do they start resonating within the consumer? but if we see it is holding up relatively well. it will be hard for the fed to decide on moving away from a more hawkish bias. we will continue to have that data dependency. we saw coming into this year that inflation was on course and was softening. and we had a hiccup in q1.

there is no chance of taking risk that they want to see that the recent data hasn't given them. same thing with retail sales and with the labor market data as well. tom: can we crystallize the trend? thank you very much. from the mliv team. and what to watch. more commentary from fed officials throughout this week. eu leaders have postponed a deal on how to divide the block stock jobs opening the door to further bargaining before the summit next week. >> i think she is an excellent candidate. obviously there is also a question of the whole package. but formally, we cannot decide. i think there will be more

consensus is my expectation. so it is a frugal job. tom: the dutch prime minister speaking in front of a sea of microphones. what is the latest on this deal. >> let cf bobbing microphones is hoping for an outcome from the eu market from that meeting. that was the reporting from last weekend of this week. despite the fact that the center is still bickering on a few points, it has been interesting because there was hope to have some consensus from the danger markets illustrating the scale of the issues that should be addressed and the speed. listen to what she had to say. >> i mean, we are still in the middle of a war going on in europe. we have a lot of issues in front of us like migration and change. we need a balance with the

european union and we need a stronger europe in the future. with all the decisions in front of us, it is important that we take a decision as quick as possible. tom: that meeting went late in the night. he is still a front-runner as is the current prime minister. they suggest he is still in the running but it is the issue of a broader package. the question is around the european council president. a posed held by people to be able to make decisions like this. that will push this decision and a next week for the formal leaders meeting. that wraps on the 28th and two

days later is the first round of french voting. tom: we heard from the danish prime minister, the challenges the block faces. you talked about the political crisis in france. to what extent is that weighing on the minds of eu leaders? >> i think it is a huge concern for all of them. even with people that agree on principle, it has been challenging to get some of the funding through. there is a lot of bickering. if you get to a position where you have an opposition government, it slowed -- it throws open a number of clients. we don't really know what marine le pen's position would be on a number of issues. she has been more pro-russian.

she has openly look for measuring cups. that leaves a lot of questions for a lot of people about what that would look like domestically. and if matt cole is swimming across the current, it will be in his power to be out through your -- to be out. we are more euro skeptical which will make things harder to get done at the eu level. tom: bloomberg's all over croke in berlin on the complexities of french policies. thank you for the latest. this is what else we are thinking about. there is a lot of data in terms of the economies of the euro and the u.s..

10:00 a.m. u.k. time, we will get the german survey. also at 10:00, euro area finalizes cpi.that led to the ecb having the space to cut. 1:30 p.m., u.k. time. the data drop from the u.s. in terms of the health of the consumer. retail sales, 3:30 p.m. they are expected to edge up modestly. that is largely down. it is expected to price cuts by companies. coming up, vladimir putin heads to north carolina for the first time since 2000 as he faces renewed challenges in his work on the ukraine. we will find out what he is expecting to get.

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tom: welcome back to "bloomberg daybreak: europe." vladimir putin is on his way to north korea followed by vietnam. rare trips to longtime partners as he faces renewed challenges in his war in ukraine. it is a fascinating trip and agenda for the russian president. he clearly has a big ask for the north koreans. what is it and what is he likely to get from his trip? >> north korea has been supplying russia with acid amounts of munitions. the south korean defense minister spoke to bloomberg last week and said that shipments could reach as much as four

point million -- 4.8 million shells. what vladimir putin is likely looking for is more munitions, missiles and anything he can get that can help him with the war. north korea has a lot of really old soviet era systems and they have huge numbers of these things. they have ample stores of spare parts of tanks and even its newest ballistic missiles and it shares a border with russia and it can get things to russia relatively quickly. tom: you talked about the impact. almost 5 million shells from north korea to russia versus the almost one million that europe is struggling to get to ukraine. it is remarkable in terms of the gap that remains in terms of supply. give us more detail in terms of how the supply is benefiting russia on the ground in the war

in ukraine. >> by having this supply of munitions, it allows russia to continue its indiscriminate bombardment of ukraine and troops and north korea has been supplying scores of ballistic missiles. the quality of some of these missiles and the artillery shells may not be that great but the more missiles fired the more it depletes ukraine's air defense systems to intercept these things and it puts the burden more on the u.s. and its european partners to supply this to russia. and kim jong-un has been testing new systems lately including new ballistic missile that can carry a significant payload and travel 100-200 kilometers. these are things he may be

trying to sell to putin. tom: and presumably the u.s. and its partners will be scrutinizing the trip. is there anything the u.s. can do to prevent or slow the shipment of these arms to russia by north korea? >> there is really not that much that can be done. both countries are heavily sanctioned. there is not much that can be done in terms of interdiction. there is a rail link between russia and north korea. the shipment of goods is being done by cargo ships that travel in coastal waters of the two countries. they can shuttle back and forth. we have seen satellite images showing russian ships in north korean ports. the cargo from north korea going to russia and then to the rail

and then to the front lines. they are not hiding it and not much can be done. the u.s. and its partners are tightening sanctions. tom: thank you on the first visit by the russian president to north korea in more than two decades and the implications for that conflict. to the other stories on our agenda. two key democrats are reported to have signed off on a major arms deals to israel worth more than $18 billion. the top democrat on the house foreign affairs committee and ben cardin, the leading democrat on the senate foreign relations committee signed off on the transaction several weeks ago. it is reported that they too have been holding up the sale for several months. investors are watching the

tussle over position in south africa's new governing alliance as the new president prepares to be signed in for a new term. the bulk of the negotiations will be between the anc and the democratic alliance. there is plenty more coming up. stay with us. this is bloomberg. ♪

>> we see growth inflation moving back to the target level. inflation gradually moving back to our 1%-three percent inflation target rate. in terms of the forecast we see growth at 2.6% and up to 3% next year. inflation this year has been below target -- actually, it

will come back into target in the second half of the year. >> some say you are optimistic and that you will have issues getting to 2.6% this year because output remains way below pre-pandemic levels. when you look at inflation, core inflation, 0.4% year on year. >> on the growth front, we did not change our forecast. there is a headline gdp forecast, 2.6%. in terms of confidence about the numbers, i think we have greater confidence in that number. not in terms of upside to the number but that the number is likely to materialize and the downside is not there. why? the q1 upturn came in stronger than we expected. i know the headline q1 you're on your number did not look good,

1.5%. you look at it in terms of quarter on quarter movement from fourth quarter in terms of our estimates, it was a 1.5% quarter on quarter change which is twice the average level we have seen. a pretty good pickup. tom: that was the bank of thailand governors speaking exclusively with haslinda amin. staying on thailand, former leader has been formally charged in a royal insult case. the accusation stems from a 2015 interview. thailand's strict law protects the royal from criticism. a court is waiting a petition for the former prime minister who faces allegations of ethical problems. market trading during typhoons in late september in major

storms. hong kong is typically hit by 5-8 typhoons each year. coming up we will take a closer look at how french political turmoils have triggered security fears and the rest of europe. that is next. this is bloomberg. ♪ want to save on some of the biggest names in streaming on the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity.

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>> good morning, this is bloomberg. karen p and police a higher, wall street's 30th record high. the philadelphia fed president is backing the case for a rate cut. opening the door for talks ahead of a summit. ursula is expected to win a second term as commission president and vladimir putin has his first visit to north korea in more than two decades as he pushes for military support for his war in ukraine. a 30th record high.

it was the meta-caps that came to play. chipmakers rallied and it looks like the european session will get a pickup from gains. rebound in the french stock story. last week it dropped 6%. renewed optimism and less commentary. s&p futures are flat, nasdaq futures flat as well. yields are up and bonds are down. local issuance coming through, treasuries were looking overbought. a little pressure for the euro.

bitcoins worst drop in about a month. a four dollars a barrel on brent crude. retail sales data out of the u.s., expecting a modest pickup. now to france. concerns grow that france elections could jeopardize support for ukraine. a far right national rally leads opinion polls. bloomberg's carol nina joins us, france, defense concerns. macron has been pushing for greater cooperation in

supporting ukraine. what is the fragility in support across the block? caroline: that's right. ever since 2017, micron has tried to show himself as the leader of europe and he has been a big advocate of sending military support, spending more to support ukraine. france could send military planes and army instructors to ukraine. that is something le pen has said she is supposed to even the she's been trying to distance yourself from vladimir putin, in 20 she got a loan from a russian

bank to finance or campaign. a lot has changed since then. leaders are concerned about spending for defense and emmanuel macron pledged 3 billion euros this year to ukraine. we don't know if this is at risk but it's hard to imagine two weeks ago you had president zelenskyy in normandie for the anniversary of d-day. tom: indeed. what are the polls showing about the challenges from the left and the right? caroline: one interesting point from last night is national rally support down two points. support for the alliance of

left-wing new popular front is gaining two points. the two blocks are close to each other. micron's party is a decent -- distant third. this is essential scenario for analysts, they decided not to present any candidate in 10% of constituencies for the moderates to have better chances to access the second round on july 7. the far left is a turnoff for many moderate voters and you heard from very famous jewish historian surge over the weekend saying the anti-semitic tone of the far left will make it very

hard for him between the extremes he may have to choose marine le pen. quite a nasty political battle in france. tom: yeah, to say the least. what is the policy impact of the economic agenda of the government and how it could be derailed? caroline: they have not presented details of their economic program but le pen said it would be reasonable so we will have to see the details. economists are worried it could mean an increase of 100 basis points in terms of borrowing costs for france. it could mean increase of debt to gdp ratio.

this could jump to 147% if the far right comes to power. if you look at the union of the left they have determined their program and they have some key measures such as blocking the prices of essential products, ending trade deals and abandoning the 30% capital tax which means there is a ceiling on how much taxes you can pollute. concerns for investors. we do not have the exact but they estimated le pen's program would cost 100 billion euros and programs would cost more than 200 billion euros so it is hard

to tell if markets will calm down. tom: 100, 2 hundred billion euros. caroline connor, thank you very much indeed in terms of the political challenges indeed that france faces indeed. let's get back to the central bank story before we moved to the u.k. politics because the rba and the reserve bank of australia is speaking and you can see live pictures of michelle bolick after a hawkish statement. they kept rates on hold as expected, but it was a hawkish statement and in that statement was the line that they are not ruling anything in or out. the government is saying the board did indeed discuss the case for a rate hike indeed.

they did discuss the case with the boj, the only two major central banks considering rate hikes. that was discussed. they need more comprehensive cpi readings. they been concerned about sticky inflation. june cpi will be important. the board is alert to the upside risk, but the board discussed the case for a rate hike and we will keep across the story as we check in on australian assets. aussie dollar is rallying versus the usd as you can see indeed in terms of australian equities. yields moving higher up five basis points on the two-year in terms of the aussie. now to u.k. politics.

we will keep across the lines. nigel faraj unveiled a radical manifesto for his party ahead of next month's general election. nigel: this election is the first important step on the road to 2029. our ambition is to establish a bridgehead and to become a real opposition to a labor government. tom: bloomberg's news director with the details. he described it as a contract. what was in the document in terms of key policies? roz: there is a lot of tax cuts. 90 billion pounds in spending

increases. that includes lifting the income tax, getting rid of long waiting lines in the national health service, walking back net zero commitments and a tough stance on migration abolishing any restrictions on u.k. policies. a tough stance. a bunch of policies and the question is do the sums add up and economists are saying no. yesterday they are saying this was not meant to translate into law, it is pushing the tories further to the right because

labor is taking a strong stance. the tories and labor. tom: they talked about looking toward 2029 so what is polling telling us about the strength of the party? roz: they are pulling at 14% in the tories are at 22%, some polls even show reform is in front so how does that translate ? you've got disaffected voters gravitating toward reform on the actual day. how does it translate?

they may get a few, even nigel throwing fireballs at labor, but will they get enough seats? they do not really, really need to be a significant block. we may not see a huge number of reform. tom: thank you very much indeed on the u.k. story evolving. now to other stories this tuesday. gamestop ceo is focused on turning the retailer around by avoiding the hype of the meme stock frenzy at an annual shareholder meeting that was delayed by technical issues. gamestop struggled to a digital

first strategy. >> revenues without profits are of no value to shareholders. a smaller network of stores with higher value items, they are not here to make promises, they are here to work. >> apple is shutting down its pay later program which let customers make purchases using an installment plan. purchases will be integrated into its software update. checking in on tsmc within the ar hardware space, the stock is up and citigroup and morgan

stanley have bullish targets. citigroup raising by 12%. you can see the read across in the asian reading. we've seen exponential growth for which they make hardware. they say they see tsmc has a long-term winner, lifting the broader space. we will check on european semi conductors. coming up e.u. states push past opposition to pass a controversial law sparking a rift between coalition partners.

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tom: welcome back to bloomberg daybreak europe. austria's climate minister back a law to restore nature. they voted in favor of the deal and joining me for more is john anger who joins us out of brussels. why is this a big deal? john: this law is a plan to restore 20% of land and sees to its original state and has become a target for those who

say the green deal has gone too far. some fear this could have implications for agriculture, building because you cannot return it back to a built up state so this is one of the most controversial aspects and has found itself at the center of those pushing back. tom: there is tension in austria, how did the deal come through? john: the deal looked dead. countries were blocking it. italy, hungary, poland, nordic countries pushing back. it only needed one country to change its mind and now the dynamics are complicated.

in the coalition is the green minister leonor and she has taken it upon herself to shift the position against the chancellor so she moved the country and voted in favor of this law and got it across the line, a significant move. tom: this is more than a question of austria, this is about the eu. what -- what does it mean for the green deal? >> we had elections and a number breathed a sigh of relief because the far right did not gain many seats.

the centrist majority maintained its majority so we will see a hems limitation taking place but agriculture, we are likely to see opposition. tom: yeah, a number of member states like france. john anger, thank you indeed from brussels on the green deal and implications. lots more coming up indeed. fed pricing, retail sales dater, a preview of that. stay with us. this is bloomberg. ♪

♪ >> today, to cuts or none are possible. we need to remain data-dependent. let the data play out. tom: philadelphia fed president saying he wants more dater in terms of confidence. seeing where things stand one cut is probably appropriate. goldman sachs sticking to their to cuts. september and december. market is pricing 45 basis points. pressed by the markets by the end of this yeah.

bring yourself back to january and you are expecting six or seven cuts. we monitor the dater as well and we have a preview. let's reflect on one particular trade, a technical trade and what we are seeing is two standard deviations. red and yellow lines. either above or below the 20 day moving average in terms of longer dated treasuries and this showed a sell signal on friday of last week, it was overbought territory for longer dated treasuries. this played out for this year, oversold, overbought and then

that paid off the last three times so we will see if that continues. let's look at retail sales. you are expected to see a modest tick up. a lot of that is seen as down to price cutting as consumers remain sensitive and less willing to borrow oh we will save. coming an exclusive interview with a ceo on the capital markets day. markets today is next. bloomberg. ♪

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>> this is bloomberg markets today. with cash trade one hour away this is what you need to know.