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>> good morning. happy friday. these are the stories to set your agenda. european stock futures tread water following a tepid session on wall street. with options expiring, triple witching could inject volatility. the bank of england opens the door to a summer rate cut as james bullard says the u.s. central bank could go in september. benjamin netanyahu and israel's military appear to be at odds over whether destroying hamas is achievable. this is a broader conflict between israel and -- as a broader conflict between israel and hezbollah keeps the region on edge. the equity markets are feeling out for a further catalyst. we have had some fed speak coming through from officials as

we continue to way up when the fed will go next. the bank of england coming through with a dovish hold yesterday. we keep an eye on u.k. assets. more data out of the u.k. later today. also out of the euro zone when it comes to pmi's. later in the day as well, 9:00 a.m. u.k. time, getting a picture across the euro zone when it comes to services and manufacturing, giving us color into what seems to be more optimism when it comes to the health of the eurozone economy. eurozone futures pointing to modest gains. we saw some selling pressure coming through from the likes of nvidia and apple. the ftse 100 futures pointing out by four points. u.s. futures up .1% after the downside yesterday. nasdaq futures pointing to gains of 36 points. let's flip forward and lacrosse asset.

not a lot of movement now. the u.s. benchmark, currently the 10 year benchmark, around the 4.3 level. we will continue to watch the front end and longer end as markets continue to adjust their expectations. 4.25 on the u.s. benchmark 10 year. japanese yen continues to be under pressure. japanese officials will have to intervene above that level the markets are watching. euro-dollar at 1.07 as we lead up to the data out of the euro zone on services and manufacturing, pointing to modest gains of .1%. brent $85.62, down .1% for oil. all eyes on the fed's july meeting, switching focus to central banks. a couple bets standing out to benefit if there are wrapped up

expectations of a rate cut next month. let's get more from mary nicola. what do we make, then, of these bets? two sizable bets within the fed futures markets. what does that tell us about how some are starting to position around when the fed goes next? >> it seems to early to be thinking about the fed cutting in july, largely because we don't have enough data and the fed keeps harping on the fact that they need to see more data coming through. we have the pce numbers next week. obviously that will sway the market. all this tells us just how much data dependencey has created an increase in volatility. every time we see in the new data that's coming through, we get larger swings in the market, and that's going to continue as the fed highlights that the focus is on that data dependency, so in my view it's a bit too early to start betting

on july. tom: the markets pricing in two cups this year but not until november selling, following in december. a big day in terms of potential volatility in the markets with triple witching, $5.5 trillion. how much in terms of volume or volatility could these markets be bracing for as investors reposition? >> we have been looking at some of the things we have been discussing within the team about how -- heading into quarter end, you might see greater volatility, not only because of the triple witching but because of the rebalancing in some of the indices and people started to take profit on their gains. we have seen exceptional run in u.s. equities and there's some froth there but people could start locking in some of the gains we have seen over the last quarter. so you would expect to see,

especially had again to quarter end -- especially heading into quarter end, volatility in the market. the options expiring just adds to it. tom: ok. index rebalancing $5.5 trillion of options expiring, potentially more volatility for some later in the session. mary nicola, thank you very much indeed. in terms of positioning around the fed and triple witching. switching to the middle east, where israel's military has suggested that prime minister benjamin netanyahu's long stated goal of destroying hamas is unachievable, emphasizing the difficulty in claiming victory in a war that's now in its ninth month. let's bring in joumanna bercetche he, our middle east and africa anchor. tensions between the military and prime minister have come

out. what's going on in terms of how the military and the prime minister are thinking about this conflict. >> it's remarkable to see this in the moment. you are seeing an emergency -- an emerging wedge of what some are saying and what we are talking about here is an interview one of the israeli admirals gave to israeli tv in which they stated that to say the goal of this is simply allowing hamas to disappear would be like throwing sand in the face of the public. their stated objective of completely allowing for hamas to be destroyed and neutralized, which is what the government has been saying since the last october 7 -- since the war started is something that is

unachievable and the is really -- the israeli prime minister was quick to clamp back and saying we cannot leave gaza until the hostages have returned and we have succeeded in eliminating and neutralizing hamas. the military is saying one of those objectives seems to be unachievable and that removes one of the bargaining ships israel and netanyahu have in these cease fire discussions. the key of the passage and moving from phase one to phase two was contingent on israel believing that hamas's full military capabilities have been neutralized, and if the military don't believe that's achievable, then it raises questions about all these discussions on the table vis-a-vis that cease-fire deal as well, so a very interesting wedge emerging between the two sides. tom: it was interesting to see those military leaders or that leader echoing what we have been

hearing from the u.s. in terms of their concerns that ultimately hamas cannot be completely defeated. when it comes to the northern border, israel's northern border with lebanon, tensions we know according to reporting that israel is drawing up plans in terms of a potential offensive against hezbollah. what is the latest in that part of the geography? >> a u.s. envoy to the region has been touring several countries. he was in lebanon and met with several officials. the point of those discussions were to push forward with those cease-fire talks and talk about how they can supply further humanitarian aid to the gaza trip. the third pillar has been looking to de-escalate tensions on the lebanon border. there's been exchange of fire, rockets fired from both sides since october 7, but the major difference is that in the last few days the rhetoric has escalated.

we heard from the hezbollah chief of couple days ago. he gave a televised address warning israel about the potential for a ground offensive into lebanon, saying they would not hold back in that situation, also threatening cyprus, saying if cyprus were to offer israel some military support in terms of airbases than they would not be spared, some fighting words from the hezbollah chief, and israeli officials have responded. they too are saying they are ready and willing to start with that offensive in the northern border, but this of course as those mitigation efforts continue, as i spoke about. they have been in the region trying to calm down the situation, but what israeli press are saying is that the talks vis-a-vis lebanon have reached somewhat of a dead end, so it does feel if things are going to blow up on the border, it should happen in the coming days, so we are keeping a close eye on the situation there. tom: the need for focus on that

part of the region given the tensions and fears over a conflict. joumanna bercetche, thank you for the latest. our horizons middle east & africa anchor with the update. here's what else we will be thinking about. 7:00 a.m. u.k. time, u.k. retail sales will be out. expected to see a decent improvement, particularly if you look at x auto fuel retail sales, expected to increase by 1.8%. that's the survey figure versus a contraction of 2% in april. interesting to see consumer confidence in the u.k. has risen to its pre-cost-of-living crisis level, the highest level since november of 2021, so it seems like the consumer in the u.k. is starting to feel more optimistic. we will also get euro area flash pmi's for france and germany at 8:15 and 8:30 and 9:00 a.m. for the region. that will give us more details

in terms of the recovery coming through across the euro zone. services expected to be in solid expansionary territory and manufacturing pmi's expected to edge up slightly from the previous month. that data we will be bringing to you live. also watching for comments from finance ministers of the e.u. as they meet in luxembourg, particularly given concerns around what's happening in france and the potential fiscal strains as they lead up to the vote in france. other topics on the minds of those finance ministers as well. we will be on that meeting and luxembourg. you can get a round up of the stories you need to know to get the day going in the addition of daybreak. subscribers can go to the terminal. the bank of england reviving speculation of a rate cut. we bring you the latest. and i will be speaking exclusively to pragmatics ceo david bohr.

we will get his take on how the u.k. can strengthen his position in semiconductor manufacturing, a company that is central to britain's ambitions around innovative chips and semiconductors for the future. that's coming up at 6:40 u.k. time. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. the u.k. is holding a general election in less than two weeks as the country faces historic economic challenges. the next government will have to manage the fallout from brexit, the pandemic and the debt burden exacerbated by all three. the solution to britain's growing economic crisis?

david: britain's economy is bearing incredible strain, more than you may realize. >> austerity through excessive, expensive, damaging things has left the u.k. with an enormous debt burden. >> compared to our friends in any major advanced economy, national debt and the u.k. has ballooned the most since covid, but is not just borrowing that's an issue. look at tax revenue as a percentage of gdp, the share of the country's output that the government takes to pay for what it needs. that's a massive problem in an election yea for whoever is taxed -- election year for whoever is tasked with writing a new spending plan. >> that represents a lot of missing productive capacity. >> this is monumental pressure for the next government to withstand and relieve. they need to get the population

able to work doing so and in a more productive capacity. there's wiggle room with interest rates and national debt, freeing revenue to bolster public services and support the people unable to work in the first place. >> everyone agrees this is an enormous challenge but if it's one the new government can pull off, the potential gains are massive. tom: bloomberg originals report there on the economic challenges facing the u.k.'s next government, the potential crisis. the bank of england has hinted it could be ready to cut interest rates as early as august, less than a month after the u.k. general election. the bank held rates at its meeting yesterday amid fresh signs of improving sentiment among consumers. let's bring in our u.k. correspondent for the details. you are outside the boe yesterday. this was interpreted by some in the markets as a dovish hold. >> they were honing in on this

line in the guidance that accompanied the decision that the decision not to cut was balanced even though it was 7-2, which is what it was the last time. pricing has moved. the chance of an august cut is about 55%. i bet there are a lot of economists saying i told you so because there have been such a repricing in the market after the services inflation data earlier in the week. it came in unexpectedly hot. that was referred to in the guidance. some on the committee thought it was a risk to further inflation. others unfazed by it. you could read that is being because it's backward looking and they already had the peak of services inflation. this was the bank of england saying to us august is live barring surprises but it will be interesting to see how one of the deputy governors who will be

coming and will do. some reckon he will be -- reckon she will be more hawkish than the governor she is replacing. the internals tend to move as a panic. it's not about one by one. it's about a big move of the bloc. >> and he is seen by some as being one of the movers. consumer sentiment survey coming in stronger for the u.k. that's expected to show strength. you could be getting this cut from the boe. it raises questions as to why the prime minister called the election when he did. this is a potential big upside for whoever is governing after the election. >> if the polls and traders are right, keir starmer will get an interest rate cut, so conservatives will be asking why did not rishi sunak wait for autumn for the election? it was interesting for the bank of england's part. they were at pains to emphasize in the guidance yesterday there decision not to cut was not

political. the politics -- that politics was irrelevant. it's odd they have not had any speakers on the mpc since the snap election was cut. in 2019, during the campaign, two officials started the push for a rate cut regardless of the campaign, many saying today and yesterday the decision not to cut could be seen as equally political, but this is the bank of england trying to wash its hands of any accusation of being politically motivated. >> they will have more economic data by the time that decision comes out. what will you be looking at? >> you mentioned retail sales. we already have the consumer confidence report, strongest in 2.5 years. then we get retail sales expected to show a bounce. we get the pmi's for the euro area at 9 a.m.. the thing i'm interested in is at 9:30 a.m., second-quarter pmi's for the u.k.. that will be crucial for the

bank of england decision in august. one, because it could give us an indication on inflation, and two, could reveal whether that sticky services print in april i was talking about was an anomaly and, if it is, then we are more likely to see an august cut. >> looking for those pmi's for the u.k. at 9:30 a.m. we will bring those for you. bloomberg's u.k. correspondent, lizzy burden, on the bank of england and the data to watch. on monday, the u.k. business secretary and shadow business secretary will go head-to-head in a televised debate moderated by francine lacqua. they face questions from britain's leading business groups. viewers in the u.k. can catch the business debate at 12:30 p.m. u.k. time monday on bloomberg tv. it's also going to be streamed on the terminal, the website, youtube and bloomberg radio. we will take a look at plastic credits and ask if this market

can help or hurt efforts at cleaning up pollution. that is next. this is bloomberg. ♪

tom: the oecd projects the amount of plastic waste the world produces could almost triple by 2060 if action is not taken now. part of the solution to clear the mountains of waste the ling up -- waste building up could be the use of plastic credits. let's bring in the expertise from a senior associate and bloomberg nef -- in bloomberg nef's sustainable materials team. how do plastic credits work? >> similar to carbon offsets, a plastic credit is a certificate

that proves a certain quantity of plastic waste has been removed or recycled. often this is from places like beaches where the waste would not otherwise be collected. companies are buying these credits as an offset of the waste they generate but also a financing mechanism to fund the build out of infrastructure for recycling or sorting of plastics, particularly in markets like the philippines or vietnam, where waste collection is poor or nonexistent today. tom: what do we know about the efficacy of these systems? does it incentivize a shift away from plastics or make the system more, get? >> is a nascent market but we think plastic credits can play an important role. of course the legacy waste is only part of the pollution problem and plastic credits are not a silver bullet.

where credits complain an important role is where corporations can play a role in buying these credits and funding the cleanup of waste in a way that is valid, measurable and tracked. we have seen the likes of companies like nestle among the top today. this is happening quite a lot in the philippines, where there's is an extended producer responsibility act the government has implement it that allows the use of plastic credits. tom: that suggests these companies are being pretty proactive on this front. is there anything else the companies should or can be doing? >> plastic credits should be used in combination with wider efforts from these brand owners to cut single-use plastic use overall and opt for more sustainable options so that plastic waste does not end up in the environment in the first place. we have been seeing lots of companies setting targets, corporate commitments to cut

plastic packaging by 25 and 20 30. there still is a long way to go and more work does need to be done. tom: you talked about the fact that the plastic credit market is relatively small. what is needed to scale this market? >> we really think its policy that will be the biggest driver highness. with the u.n.'s global plastics treaty being drafted, we are yet to see whether they will play an important role or even be recognized. we are watching the market closely, but policy makers are working to clean up pollution. >> really interesting. thank you for coming in with the details, the analysis on how this space is evolving. a senior associate on our sustainable materials team. if you would like to hear more from the analysis -- and what they have been looking at,

download the switched on podcast on apple, spotify or wherever you get your podcasts. let's check in on these markets briefly. looking at european futures modest gains. you had a selloff that came through in the u.s. session. some profit-taking in the big mega cap tech names, the likes of nvidia and apple taking a hit in the session. to what extent is that a story of these companies and their valuations being stretched? u.s. futures pointing to modest gains. we will take a look at why macron's snap election gamble is putting the rise of paris as a financial hub at risk. 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.

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tom: this is bloomberg daybreak: europe. happy friday. these are the stories that set your agenda. european stock futures tread water following a tepid session on wall street, but with five point $5 trillion in options expiring, triple witching could inject volatility in the u.s. session. the bank of england opens at that opens the door to a summer rate cut -- bank of england opens the door to a summer rate cut. benjamin netanyahu and israel's military appear to be at odds over whether destroying hamas is achievable. this as a wider conflict between israel and hezbollah keeps the region on edge. let's check in on the markets. the focus witching to the economic data. we have retail sales out of the u.k. at 7:00 a.m. u.k. time and

than a flurry of detail in terms of manufacturing and service pmi for germany, france and the eurozone at 9 a.m. u.k. time. that's where the lens will be. modest gains of just .1%. the ftse 100 pointing to gains of 10 points, .1%. the boe leaving the door open to a potential august cut from that central bank, a dovish statement coming from the boh yesterday -- the boe yesterday was the interpretation of many. nasdaq futures after the selling pressure that came through from nvidia and apple and others yesterday pointing to gains of .2%. let's look asset. a lens on the yen. intervention watch on the lips of many in the fx space. the u.s. 10 year 4.25%. james bullard of the fed

formerly suggesting september could be an option for the fed in terms the first cut. the market pricing in two cuts in november and december. euro-dollar at. that adjusts -- the far right and left his political forces buying -- forces vying to take power in france faced a hostile reception from entrepreneurs with scant detail on how to fix the public finances. the parties, leading ahead of the upcoming elections, spoke to bloomberg's caroline connor. >> you're the one causing concerns on the markets in a pointless matter. we have decided to widen our majority because i think there's a real danger today to see

melenchon and the far left coming to power, which would make france like venezuela without the oil. >> the first panic on the markets was linked to the snap elections call, so ask mr. macron why it was a good idea to worry the markets. i don't think the prices will worried and for long because they will not bankrupt the country. france will remain a safe investment. tom: jordan bar -- the national rally president and a former mp for france unbound speaking to caroline connor on the sideline of that event. the rise of paris as a finance hub could be at risk after president macron's snap election gamble. for the details on how this is unfolding, let's bring in alex from the french capital. paris has been one of the main beneficiaries of brexit in recent years. we have sat here in london and

seen that happen. we have been at those events in paris where wall street banks have been building up teams. is this decision by macron putting that it risk? alex: as you said, wall street banks have been pouring money and assets and moving in traders to paris. just a month ago, morgan stanley was holding an event to announce an expansion in their headcount in paris over the next years. all of this is not going to be reverted soon. none of the banks have said they would -- have indicated they would do that, and when you speak with familiar to their plans, eventually, all the investments they made were with a long-term view and none of this will be changed with the current uncertainty for now. when you speak to lobbyists in other countries like in italy, germany or the u.k., you can hear they are hoping their own market will be a bit more competitive, with firms more

willing to relocate to somewhere in europe. tom: listen carefully and you can almost hear that in london. that sense of glee in terms of what's happening in france. we have gone through this ourselves of course. part of the success for macron when it comes to the financial sector, many would argue, is the fact that he rebranded france in the eyes of the world of finance. is that rebranding now at risk? alex: well, the main thing after the snap election decision is uncertainty and for investors it's not a good thing. hopefully it's going to be short-lived and france is going to have a majority in the parliament in the next month. however, if there is not such a -- if there's a hung parliament, for instance, it could be detrimental for the country if it were the last two long. bankers, when speaking in private, are worried about something spirit taxation --

about some things. taxation comes up a lot because both the left and right wing parties would come up with things like a wealth tax. the far right have had historically a tough stance on immigration and bankers are worried whether they will be allowed to issue some work visas for their bankers willing to relocate to paris, so that's one worry. however, when you speak to other people, those worries are overblown. when you listen to the ceo of euronext here, he believes the institutional framework of france is strong enough to ensure that whatever happens next month is not going to be as tough as people fear. tom: so maybe a little bit of nuance to all of this. alex with the details on the potential risks to paris as a financial center as a result of the changing politics of the country. thank you very much indeed for the update on that front. switching focus now. luxury carmaker bugatti has

unveiled its $4 million, 1800 horsepower hybrid hypercard. it will succeed another one as they push to secure their hypercar dominance. bugatti's ceo spoke with bloomberg's oliver kahn crook -- oliver crook. >> and the vast range of expensive supercars, very few come close in price to a bugatti. it was redesigned from the ground up and it had to be. it is their first ever hybrid model. with an 8.3 leader naturally aspirated v-8 engine, it packs a whopping 1800 horsepower, propelling it more than 400 kilometers or 250 miles per hour, and it can be yours for a starting price of 3.8 million euros.

>> i'm pleased to be joined by the ceo of bugatti and joins us now from zagreb. thanks to speak to you. it's interesting for bugatti because every time you release a car, it is not a car for a couple years but for something closer to a decade. you have decided to release your first ever hybrid. you have an electric car background. why stick to the i.c.e.? >> each new bugatti is an occasion but a completely new one is something that comes around only every few decades. shareholders were pushing that the next bugatti should be electric. at that point it sounded like the right decision. >> you mentioned your customer, obviously a unique and rich customer, but a very savvy customer. why for them is the starting price three .8 million euros? why is this car worth that? >> it's a bugatti first of all.

that is something special. you can see by looking at the car and by feeling the car it is unique in every detail. one thing we wanted to achieve in every piece of the car is a piece of art for yourself. you can pick any piece up, put it in a gallery, and that would be an exhibition piece, even without the rest of the car. it is something completely unique and completely different than anyone else, and also nothing is too beautiful or expensive. >> where you are selling most of your bugatti's now and where do you see geographically the most promise? >> one third of the market is u.s., one third as europe and one third is the rest of the world, mostly the middle east at a little bit japan and other markets. we currently do not sell at all in china but the market of ultra-wealthy individuals is

growing considerably in the market will continue to grow. >> how is the bugatti customer, the kinds of people buying the car, changing? is there a shift in the age of people buying? are more women buying? >> we see a shift, especially with young tech entrepreneurs feeding through from the finance space or online gaming or some kind of new businesses that are more in the energy sector or tech in general or real estate. we see that changing a lot, so a younger audience being interested in the brand. bugatti stands for you made it. it's the ultimate you made it simple. >> you must crash test these cars. how painful is that? >> there are no shortcuts in producing very expensive or low-volume cars. even from our perspective,

regardless of relation, want to make sure these customers are very safe so we do thousands of tests and hundreds of crash tests. we have to build something around 30 prototypes in the development process and around 15 of them will be crashed multiple times over and over until we pass all the rash testing -- the crash testing. tom: oliver crook speaking with the ceo of bugatti. staying in the ev space, canada is preparing potential new tariffs on chinese electric vehicles in line with actions already taken by the u.s. and eu. the government still has to make file on how to proceed but will likely announce public consultations new. canadian prime minister justin trudeau has been under increasing pressure at home and abroad to follow the lead of the u.s., which plans to nearly quadruple tariffs on chinese ev 's. we will be speaking

exclusively to pragmatics ceo david more about efforts to propelling the u.k. onto the global semiconductor stage. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. nvidia shares closed firmly in the red, raising more than $100 billion in market value. chipmaker pragmatic wants to propel the u.k. onto the global semiconductor stage. the company secured 180 2 million pounds of funding to be the uk's -- funding for opening the uk's first production facility. joining me is the ceo, david more, with experience at companies including the likes of

intel and micron. thank you for joining. let's start with the proposition is for pragmatic. what is it that you do and what clients are you servicing? david: glad to be with you this morning. pragmatic semiconductor is a u.k. based world leader in flexible semiconductor technology. based in cambridge, where i am joining you from today, with manufacturing in the northeast of england, we develop a manufacturer ultrathin low cost chips with a low carbon footprint. this enables us to embed them for idle level intelligence in virtually every object on the planet. we see applications in industrial, consumer, health care applications, enabling smarter packaging, for instance, wearable monitors for health care solutions, better visibility, safety, security and

supply chain, so a whole host of applications for what's a revolutionary approach. tom: you successfully raised that funding last year. you build out this facility. there's a lot of capex there. are you getting the demand from customers to offset that spend? what is the demand and where is it coming from, what sectors? david: customer demand is extremely strong so we are now ramping up production of our first fab, our production facility, for the u.k.'s first 300 millimeter wafer fab. we will be taking the funding we raised in our series d, the largest venture raised in european semiconductor history, so very fulfilling in a challenging environment. we will be taking that funding and accelerate our capacity, going to tens of billions of ic's per year, and expanding our technology in the process.

ultimately, there is demand across a wide range of applications, but first and foremost for us is really in enabling that smarter packaging and fast-moving goods, so providing authentication, tracking trace capabilities, enabling reduced waste, more recycling, reuse. so basically leveraging both the fact that we are inherently more sustainable from our manufacturing standpoint and leveraging that into better sustainability outcomes across segments. tom: does that suggest that you sit outside the kind of demand we are seeing for generative ai? very kind of -- very different kind of chips, gpu's, versus what you produce. is there any overlap in the world of generative ai and what you're doing now or potentially will be doing in the future? david: it's a great question. obviously chips are front and center in terms of us depending on them for almost every aspect of our daily lives and so

clearly there are roles to play across the cloud, was known as the edge, and then all the way out to the item level. so that's really where pragmatic plays. there's going to be a lot of ai-based solutions for internet of things at scale, enabling track and trace, higher efficiencies. we are thinking about priding -- about providing a digital footprint for every piece of technology on the planet. our goal is to see our technology deployed in trillions of smart items in the next decade. it plays a role in providing that kind of data for these really impactful and important solutions, not just in terms of market demand but also the underpinnings of solutions to some of our most important environmental and societal problems. tom: david, the u.k. does not have a great track record on this kind of stuff. you are ticking a lot of boxes and making progress but i'm thinking of graft corps,

newport wafer fab, an electric vehicle and battery maker that essentially collapsed. what is it that the u.k. is doing wrong and what does it need to do to support these kind of businesses, the manufacturing of this future tech? david: when it comes to semiconductors, i think the announcement of the national strategy last year was an important step forward, acknowledging the importance of semiconductors. i believe there's a role for the u.k. to play on a global stage. we have seen a lot of push for diversification of the supply chain. i think it's important in terms of how we look at the opportunities for the u.k. to play its role in areas of strength, so let's say advanced silicon manufacturing may be a bridge too far, but manufacturing using advanced materials is a much more capital efficient approach to servicing some of the demand. so ultimately what we would like

to see is a continued focus on the sector. we want to see a continued rollout of incentives to help encourage more of an investment in domestic manufacturing. i think we are demonstrating that it can be done in the u.k., it can be done well, and we are building on a long heritage, for the u.k., in the semiconductor industry. and so i think there's a great opportunity and an important one for the u.k. to play a strategic role on the global stage. tom: david moore, thank you very much for taking the time, pragmatics ceo on once needed to propel this innovative push around semiconductors in the u.k. we will see with the next government does on that front. thank you very much indeed for taking the time. some other stories making the news. santander has removed popular messaging software from smart phones issued to its investment bankers in spain. while use of the software had already been banned previously, some employees kept the apps on their phones.

the campaign comes amid a wave of large regulatory fines in the u.s. for unauthorized messaging apps. a ceo has told bloomberg that the company is weighing several opportunities to acquire a private credit firm that would help expand its $250 billion asset management arm. he spoke with francine lacqua about the company's ambitious expansion plans. >> in the asset management space, we need to protect where we are, expand by doing some additional hiring where it makes sense in public markets, and we need to acquire. acquisitions will be disproportionately in private markets, so in private credit, infrastructure, real estate, places where we are not very present yet. tom: plenty more coming up. stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak europe. let's check in on the yen because it's once again the japanese currency on intervention watch. the level our team was saying you need to work -- to look for is 1.6017. they have come out and said there was intervention and they are open to doing more within these fx markets but you have seen six straight sessions of weakness for the japanese yen. the treasury putting out a note on where japan is on the trade balance front and the currency. we watch for potential intervention as that continues. a lot of that is about what's happening with the fed and the continued strength coming through -- i should say the rate

differential between the fed and boj, though inflation did go up. let's flood the board and look quickly at what's happening in terms of the u.k. story. we were talking about the fact that there's a question around paris as a financial center, because of political volatility and uncertainty. in terms of flows into the u.k., you have seen a pickup. the political atmosphere is volatile with the election on july 4. you have seen the proportion of fund managers who are net underweight on the u.k., stocks falling to the lowest level in a year at just 12%. this is mid-cap equity fund flows, back to back monthly flows, the highest we have seen for the first time in three years in terms of consecutive flows into u.k. stocks. is that an does that have traction will be a question? let's flood the board and look at the data out of the euro area.

there's going to be scrutiny coming out of germany, france in the euro zone at 9 a.m. in terms of manufacturing and services, services expected to be clearly in expansionary territory. manufacturing pmi for the euro zone expected to edge up slightly. we are getting a build out of the picture when it comes to what's looking like green fruits of recovery -- green shoots of recovery in the euro zone and how that feeds into expectations around the ecb. monday, we will be doing a live debate here in our studio in london. we will have a televised debate at 12:30 p.m. u.k. time. before that, it is markets today. stay with us for that. this is bloomberg. ♪

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♪ >> good morning, i'm guy johnson , anna is