tom: good morning. this is daybreak europe. i am tom mckenzie in london. nvidia tumbles into correction territory, shedding 430 million dollars in value since thursday, the biggest three-day value loss for any company in history. a victory for bank losses. the fed floats a weaker version of its bank capital overhaul that would lighten the load on wall street lenders. airbus cuts its earnings and delivery goals for the year as supply chain issues continue to hit the european plane maker. let's check on the markets with nvidia front and center, raising questions as to whether this will lead to a broader selloff or buy the dip opportunity. asian markets showing relative resilience. they started the week with a

gain of .7%, led by banks and the auto sector. technology was the only sector in the red. the ftse 100 is pointing to the modest gains. s&p futures looking to build on gains up .1%. looking to add .1%. nasdaq futures pointed to gains of .1%. we have been hearing from mary daley from the san francisco fed, a member of the fomc and a voting member. she's been talking about a labor market in the u.s. potentially at an inflection point. take a listen? >> so far the adjustments in the labor market have been modest, not really pushing out the unemployment rate, but we are getting nearer to a point where the outcomes may be less benign. >> mary daley also saying that restrained demand will likely be needed to return inflation to the fed's goal.

markets still pricing in two cuts by the fed. the fomc meeting minutes suggesting one will come through. markets pricing in about 48 basis points by the end of the year. let's check and cross asset in terms of how things are playing out across different fx with euro-dollar in focus. the u.s. ten-year relatively unchanged, holding around 1.43%. 1.07 on euro-dollar. dollar weakness is a factor. the euro gaining .1%. brent trading at $86 a barrel. let's check in on the asian markets. avril long-standing by -- avril hong standing by. >> nvidia led selloff in tech overnight, especially what we saw on wall street. declines are being seen among the chip stocks.

you can see it's managing to clock gains and this is amid this rotation from growth into value. we are also seeing the consumer names, those are the ones that are helping to prop up the hong kong benchmark, and i think even one trader pointed out that it seems like traders are moving away from chip stocks, semiconductors. they are moving into pretty much everything else. the nikkei is outperforming today. flip the board because that has implications from what we are seeing in the japanese currency. the y is -- the yen is still weak. it's hovering near those 40 year lows. some traders think 170 is the next level to lodge in the absence of anything to keep the downward momentum and check. verbal warnings from japanese

authorities have not helped. that will have implications as well for the offshore yen these highly related. if we see a pop-up above 1.70 on the yen, we could see something. we have the pboc coming through with weaker than expected data. it might be taking the opportunity to set things weaker on the chinese currency. let's flip the board and look at the stocks that are in particular focus today. toyota is one that's a big boost on the asia stock gauge, which is gaining for the first time in four sessions, but these are the names that are coming under pressure. infotech is the big decline or today. tom: we will get more on the tech space. thank you for joining us with a check on the asian markets. staying on the tech space with a lens on what's been happening with nvidia entering correction territory, with the selloff

wiping out about $430 billion from the chipmaker's market cap. let's bring in annabelle in hong kong. what was behind this drop, then? annabelle: yeah. it is something that a lot of investors and analysts are looking at and there's quite a few different reasons that are being suggested. a lot of them point to the technicals. some of our colleagues have been looking at the impact of triple witching, the role of expiring options, possible portfolio realignment. you could have that rebalancing coming into it. thursday -- thursday the -- there is the rsi itself. you also have the success of nvidia itself, because it bolted past the likes of microsoft, apple. these are companies that are much more established and have a broader business. simple profit-taking.

there's a lot of reasons for this but the question of course is what happens next? >> indeed. what are investors going to be watching for in the hours and days ahead for nvidia? >> one of the things that a lot of people are pointing to and just out of those reasons i cited, none of those factors for the selloff point to something that's fundamentally wrong with the company. so it does seem perhaps that we would need to see some serious earnings miss or protracted economic slump to see nvidia under pressure for long, but there is still the technical models we like to apply, and one of those is the fibonacci retracement. if you took a look at that you would see the in the sand would be the 115 mark. we are now at 118. could we get to 100? if we do, that is the next support level. crossing below that would mean

eyeing off the likes of $100 per share. it's a big question. is it the next move up higher or lower possibly? tom: annabelle on what is happening, transpiring for nvidia, a stock we continue to keep a focus on and we will keep that story.for you .annabelle breaking it down . now to the macro when it comes to the banking space and some changes potentially around the regulatory front. the fed is said to have shown other u.s. regulators possible changes to its bank capital overhaul that would significantly lighten the load on wall street lenders. let's get more from pretty group -- from kriti gupta. is this a victory for wall street bosses? >> it is. when this was first introduced elizabeth warren is tough on all things corporate and was very strong and vocal about making

sure these capital buffers existed. this came in the fallout of the silicon bank crisis. are we seeing a great financial crisis to point out? we have not since then but that's the concern as the economy has rallied and banks have shown they are not only able to weather the storm but are more resilient as a function of how much they have grown and how much volatility the market has seen with two wars, a pandemic, an aggressive hiking cycle around the world. banks have proving can catch up to this. for a lot of people this will be bringing down the cap from 16% in capital buffer to 5%. those are the proposed rules. tom: so that is considerable. what does it mean in terms of where we are and where the rules come into place? there's wrangling between regulators. what kind of timeframe are we looking at and do we expect

further opposition from senator warren? kriti: we may see further opposition so this is not a done deal. you can see how it sets the tone not just for what's happening in the states and the election. as banks have less capital buffer they can dylan moore and there's more liquidity in the market with various ripple effects. so you are looking a two fed appointed officials who are known as republican nominees who are still saying, look, this is a positive. this is a boon for the economy. it's not just the american economy but the european one as well. look at the precedent it's set, this idea that if the u.s. banks don't have to hold onto these reserve ratios, their reserve ratios are coming down. the europeans having to hold more would only set them behind. that's one narrative the market is pushing. tom: of the read across that that's interesting -- that's

interesting in terms of the read across. kriti gupta on that. here's what else to be thinking about today. we will get a number of speakers from the european central bank on inflation data from a number of major economies across the eurozone. at 10 a.m. u.k. time, the ecb will be speaking. we will see what he has to say about how thinking is evolving around the ecb's next steps. at 1:15 p.m. u.k. time, another ecb official will be speaking. and another at 6:15 p.m. u.k. time on the more hawkish side of the spectrum. that should give more clarity in terms of the thinking evolving among the ecb. 3 p.m. u.k. time, also going to get the conference. a survey coming through from the u.s. suggesting they may soften.

we have seen retail sales coming softer. this is bloomberg. ♪ why the u.k. prime minister is invoking his conservative red assessor -- conservative predecessor. the latest on the u.k. election is next. we will talk to the ceo of rasmussen global on why the french elections have some eu leaders worried about the fence.

that's later this hour. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. let's turn to the u.k. general election. the prime minister, rishi sunak, and opposition labor leader keir starmer have traded warnings about each other's plans on the economy. let's get more from lizzie burden. just 10 days to go. can the prime minister do anything to turn the tide, the fortune for him and his party? >> we are getting closer but the gap does not seem to be budging. it's a 20 point lead labor has got. we were speaking to the former

chancellor yesterday. it was interesting where he said it was not about winning but more about trying to prevent the conservatives becoming a romp opposition and limiting the defeat. he said gamble gate is si to party gay. what is similar is the -- what is curious is that there is so little detail on the fiscal side. the institute for fiscal studies said the u.k. voting public is in a knowledge vacuum because no one is addressing the fiscal constraints, the stark choice between higher taxes, spending cuts and more borrowing. the office for more budget responsibility has said you could have north of 5% growth a year to solve problems fiscally but they are saying that even unlikely -- that is unlikely. it would leave a fiscal black hole and how do you solve that

when the conservatives and labor are in what they call a arms race where neither party wants to raise things. >> that damming of both parties in their manifestoes. do we get any clarity on those issues? we hosted the debate yesterday. did anything come through on that front? >> unsurprisingly in front of an audience of business leaders no one was willing to say they would raise tax. badenoch, the front runner to take over the conservative party postelection, did not rule out a leadership bid. i think the irony is that speculation about who will take over the conservative party has led to much instability and you talk about policy clarity. jonathan reynolds, her opposite number debating her, what he did promise was instability, and

little more really when it came to the detail. neither party is talking about raising the three-man -- the three main levers of tax. labour did not want to say they would rejoin the labor market -- the common market or customs union. what he said is that there would be closer ties with europe. take a listen to what he did say. >> we are not going to give away our negotiating hand entirely. do you want lower standards in the european union? if you don't, surely we remove pragmatically some of those checks and make sure we can have as close a relationship as is possible. there will still the costs so we accept that but where we can make it better, in any trading relationship, we should be seeking to make it the smoothest, easiest relationship we can be. >> this is what they think is the problem, that if you just

have labour people instead of torey people, the european union will like them and everything will be ok. this is not a serious diagnosis of the problem. this is the thing. what will they have to give up in order to give that? that's the question they don't want to and -- want to answer. that's not something they should be keeping in their back pocket. >> i think you see the problem here, which is this is a conversation on the conservative side, which is all about the next leadership election in the conservative party. for people who just want a pragmatic better, good faith, reasonable relationship with the european union or any other trading market unencumbered by politics, labour is more practical. >> interesting that jonathan reynolds did not rule out giving up ecj oversight and also saying we are not going to give away our negotiating hand. quite a similar stance to the

way they talk about the unions and negotiating over strikes and also saying when circumstances change, plans change, so the huge elephant in the room is what will happen after the election? >> our u.k. correspondent unpacking what we heard and that debate -- in that debate and where we stand on this election. more on the electoral politics. now this is evolving and a focus on what's happening with the green party. they say investing in renewables could help tackle the soaring cost of living. they plan to hike public spending with income taxes on high earners and a new wealth tax. adrian ramsey spoke to guy johnson. >> the cost of not acting on the climate crisis is bigger than the cost of acting but in terms of business opportunities, and i

work in the renewable energy sector for homes and buildings, but you could say the same about electric vehicles, public transport, farmers producing more food within the u.k., and although sectors, if we give those industries the confidence to invest and grow and have a clear direction from government, than the opportunities in that transition for jobs and business and reduces the root cause -- and reducing the root causes of the cost-of-living crisis. they do want to protect it whether they are in our towns or cities. it's often executive homes that are built without people getting the investment they need into local infrastructure and services to go alongside those homes, so we need to be building communities, not just houses. in terms of the investment needed and the transition to a green economy, the capital investment in things like public transport, renewable energy, we

would be willing to do some borrowing for that as we are on course for a labour government with a big majority. having a group of greens there will push them to be bold or both on climate action and on the funding to restore our public services. tom: the co-leader of the u.k.'s green party there. coming up, julian assange is free to leave the u.k., ending an almost 15 year battle over his prosecution. we look at the details next. this is bloomberg. ♪

>> go into emerging markets.

and, yes, emerging countries are growing faster than the developed countries. no question about that. so therefore there will be more opportunities. the companies are actually emerging market companies because they are earning -- because their earnings are from the emerging companies -- countries like brazil. we have to widen our scope if we want to be good investors. >> i'm wondering what is the argument or the best case you can make against u.s. exceptionalism that, you know, that there is a case to be long em's and not simply close your eyes and wait in an s&p 500 etf, for example.

>> the s&p 500 now contains so many companies that are benefiting from the growth in emerging countries, so you have got to be aware of the fact that when you buy apple, you are buying not the u.s. market only but you are buying china, india, etc., etc. so these countries are enabling the american companies, multinational companies, to earn greater and greater profits. the stock reflects that. >> your emerging opportunities fund, everything is fair game. so a company like apple, which you correctly point out, you are effectively buying an em stock longer-term. with the s&p 500 companies or stocks in the u.s. be part of your eligible investment

universe? >> definitely. there's no question about that. don't forget adr's are listed. you will see emerging market companies listed in new york because of liquidity. >> mobius chairman speaking with our colleague, david. now to other stories making news. china has suggested germany's luxury car manufacturers could benefit if berlin convinces the european union to drop tariffs on chinese ev exports. bloomberg learned beijing floated lowering its existing tariffs on large engine cars in return for scrapping planned ev levies on imports from china. beijing currently imposes a 15% fee on passenger vehicles from the bloc. it comes weeks after the eu put forward a tariff hike of as much as 40% on chinese electric cars. wikileaks founder julian massage

has been freed after five years after that julian assange has been freed after five years in a prison. it would allow him to return to australia. the u.s. has pursued assange since his website published thousands of leaked military documents in 2010. coming up, we talked to the ceo of rasmus global on why a shift in france's balance of power could risk european military spending and support for ukraine. that is up next. this is bloomberg. ♪

tom: good morning, this is bloomberg daybreak: europe. these are the stories that set your agenda. nvidia tumbles into correction territory is shedding $430 billion in value since thursday. it is the biggest three-day value loss for any company in history. a victory, the fed floats a weaker version of its bank capital overhaul that would significantly lighting the load on wall street lenders. airbus cuts its earning and delivery goal for the year supply chain issues continue to hit the european playmaker. the markets right now digesting the moves across the tech space, nvidia semiconductors and focus is the nvidia drop a sign of broader weakness against these markets. the asian session suggests there isn't resilient.

the session stay relatively strong and in u.s. futures pointing to the upside as well. european stocks pointing lower after the gains that came through for european stocks yesterday led by autos, led by the banks, in terms of the ftse 100, you are looking at a flat session so far. s&p futures pointing to gains of a 10th of a percent. nasdaq futures looking at 53 points. the nasdaq dropped a little over 1% with the weight of nvidia central to that move. let's flip the board and look across assets. so at those levels unmoved so far in the session, we have been hearing from fed speakers including mary daly talking about an inflection point in the labor market of the u.s.. of course you have inflation data out of the u.s. on friday that could be consequential, markets pricing and close to cuts by the fed by the end of this year. dollar weakness coming through lifting some of these major currencies, the euro getting it

up. the pound getting a lift close to 127 on the pound versus the u.s. dollar. $86 a barrel on oil. let's go to the political risk out of france with how things are shaping up in that country. a countdown to the vote of the weekend. french president emmanuel macron says extreme parties in the upcoming election could spark a civil war. speaking on the generation do-it-yourself podcast, he said the far right national rally referred to people of a religion or origin and their security plan. he also accused the far left of peddling sectarian politics. >> this choice was imposed, did it make me happy, the answer is no. on june 9, if there is anyone it hurt, it was me.

if we follow your reasoning to the end, the country explodes or there is civil war. did we do everything right. after seven years don't people want to kick you in the blood? yes. tom: micron trails in the left is no popular front in opinion polls. french political turmoil says you capital worried that it could fall by the wayside. there also concerns that present cook -- president micron could put fresh support for ukraine in jeopardy. for some analysis, we're joined now by the ceo of political consultancy, rest mucin global and former policy chief at nato, very well-positioned to, and give analysis on this discussion. should we give a significant number of seats in parliament for the national rally, should we get a national rally premier

or prime minister in france would support, would french support would be ironclad be question? >> i don't think francis support for ukraine has been ironclad. i think president macron has come around for the past year and having a much stronger stance against russia and much more positive towards ukraine. before that we had this policy that was getting at odds with the rest of the allies. france matters, it's a major european military power, but if you look at the numbers, france's not delivering more than lithuania. i think france is still punching below its weight. it would be an upset politically symbolically if france were at its withdraw from ukraine but it would not be a major blow as if

germany were to withdraw its support. tom: that's really important context if urinalysis is punching below their weight. do you trust them when they say they moderated their position on russia? they moderated their position on ukraine, do we trust them on that? >> i think it's a bit of a way of presenting things meaning there might be a call that is for russia and ukraine. but politically and tactically, they are making the choice of fluttering this down and trying to stay not too far from the mainstream and trying not to exacting the mainstream, they are still voicing some criticism in the differences but not as far as to many boats. so i think they are applying the

recipe here hoping that it will get them from the mainstream. tom: that's on the national rally. micron's party is pulling their place behind the leftist grouping. polls suggesting that you will get a political jamming up of the system across the french parliament and pushing through a policy agenda will be that much more difficult given the political arithmetic. what that means in terms of practical support, military funding and funding for the economy of ukraine, does it just dry up in that scenario? >> you are getting to the fifth constitution and how the executive can take some executive decisions without getting the parliament to vote. generally, the executive has great say on matters of national security and foreign policy.

here the problem is the executive might be split between the president micron, that is supporting ukraine, and the prime minister and the rest of the government that is more neutral in the best case scenario. here i would say is a real battle as to who can get away with what in terms of decisions. micron will be able at a high level strategy forum to be able to voice france's best position on ukraine. but when it comes to money and practical support, he will need the government to follow and this is where there might be a tension in the system and there might be some real difficulties in getting france to follow through. a few months ago in the france-ukraine security agreements. tom: what is all of this doing for france international relations? >> that's the big irony of

president macron's crazy scientist experience by calling for a snap elections. he has made restoring france status and putting france in the leadership role on the international scene, he has made that one of the main objectives of his mandates over the past several years. yet, his decision of calling for a snap election, you are putting this at great risk. what is happening already now, we already see france diminishing both reputation and also in france. both in the numbers of members of europe and parliament, he managed to secure for the european elections, but also his capacity to basically carry the other member states in the eu member states in the nato member states. this is going to diminish france capacity to carry the others.

tom: given that you have worked for two secretary generals, your view on mark ritter's elite of the organization, is it a positive for nato? >> nato is maintaining their tradition -- the tradition that created -- especially in an era of strong man and a possible return of president trump, to have a former prime minister who could sit down with the nato leaders is one thing. it is a pragmatic coalition builder. permanently within 32 members, and i think he has it with president trump, at least he had when president trump was in the white house, which might allow

him to be able to channel him and to keep the u.s. in and to keep the u.s. support as active as it's needed. tom: valuable insights. former nato policy chief and ceo of political consultancy firm, rest mucin global. coming up, airbus cuts its guidance has supply chain snacks continue to bite. we bring you more on the clouds gathering around the european playmakers outlook. that is this is bloomberg. ♪ next. this is bloomberg. ♪ ♪

tom: welcome back to bloomberg daybreak: europe. airbus has cut its guidance and aircraft delivery goal for this year on supply-chain snacks. the company will hand over 770

aircraft instead of 800. joining me now is our global aviation editorial leader penny kamel. the importance of this is not just one corporate, not just one company but this tells a story of a sector. this is the sector and the challenges being faced, what have airbus been saying and what stands out to you post the market yesterday from the ceo? >> it was a pretty comprehensive revision of the guidance, you mention the 700 70 play deliveries versus the 800 previously anticipated, they threw in the kitchen sink and they've got a reduction in cash and the outlook, we have a reduction in the operating profit, we have a reduction in the longer-term production rates on the all-important a320 plane. taking a deep look into its numbers and realizing they can achieve what they had hoped for and this is just about at the halfway mark of the year.

fairly early on normally, airbus on they have cut, this doesn't happen off them when they have cut it's always confident that they can make it, this is at the halfway mark, but things cannot look good for them when they are already this pessimistic at this point in the year. it's really across the line for them. it's not a demand issue. this is in that people aren't buying the product, it's a supply issue, they can't get the products to meet the planes. we are talking about engines, power structures, cabin interiors, all that stuff is missing and therefore they can't build the planes at the rate they would like to. tom: it means they are unable to fill the gap to some extent that has been left by boeing as a face or social security issues. detail is coming through in terms of boeing and a new revised offer for spirit error. this also talk to the supply chain constraints for that company. click spirit is an interesting company, they are principally a

supplier to boeing, but they also supply components airbus. we heard boeing wants to gain control given the product -- given the crisis that they are in. untangling that asset is complicated. you don't want some of the parts to go to airbus to land in boeing. the companies have been picking that apart for the last couple of months. what we're are hearing as they are on the home stretch, on the finishing line. we might get a deal this week, next week is a national holiday in the u.s., things will probably slow down. try to get that over the line. we hear there is a small premium baked into this about $35. this is a fairly distressed company, spirit, they cannot be too wishful and what they can get in terms of money, $35 is the money on the table and we make in an agreement. very complex to take that apart and make sure all the bits end

up with the two main manufacturers where they should be. tom: joining us out of berlin, thank you very much on the details around the airbus downgrade and that boeing offer for spirit and how that could evolve. now to other stories making news this tuesday. novo nordisk's plans to invest 4.1 billion u.s. dollars. over the cost of its obesity and diabetes drugs. the project in north carolina will double the company's production footprint in the u.s. adding manufacturing space where their medicines will be filled in to inject the pins and prepare for consumers. the facility will create a thousand jobs. it's entering formal terms with adnoc on a takeover that could value the chemical company at about 11.7 billion euros. the middle east and energy giant indicated that it is considering a potential offer of 62 euros

per share subject to due diligence, the final deal would represent the biggest ever acquisition. traders are warning the japanese yen could weaken to its lowest level against the u.s. dollar nearly 40 years, some asset manager said the yen could trade at 170 per dollar. on monday for japan's vice finance ministers said authorities are ready to intervene 24 hours a day to prevent wild fluctuations. you have warned for a while that the pressure on the annual pension -- will continue because the rate differential. is there anything that could put a floor under this. now the -- why the views now of 170? >> i think the markets are like round numbers of the story is

more nuanced, it has been let down by rate differentials against the dollar. those have widened considerably. what is curious is before this quarter was solely by inflation with great differentials in the u.s. rising more than anything in japan going on. they end side is weakening. it's mandated. a lot has to go wrong for her to go to 170, but we have heard the finance ministry officials are standing by to defend the end, a lot has to go around for its ago

further down but there is a speculative moment, there is no question about it. tom: 170 looks like a bit of a stretch, draw the lines from the yen in japan to the u.n. in china. just weaker yen mean the pboc has to let their currency ease further in terms of that export competition? what is it over in china? >> they need to let the yen weakened not only in correlation, but what's happening with the yen as you mentioned, but also independently because of what's happening with the chinese economy. if you look at the economy, pretty much all of the pillars supporting the economy are crumbling. if you look at the jobs market, youth unemployment is soaring, exports have sputtering as of late, and it doesn't have inflation in speak of. they are expelled into deflation

for the rest of the world. so there are a lot of structural challenges on the need to address those challenges. more than ever before china needs its exports to fire up for them to do that they needed to weaken considerably. if you look at the onshore yuan relative to the fixing, the you in his weaker by almost 2%, much more than the fixing that is the outer limit of what the pboc allows the country to trade in. they will accommodate the economy because domestic consumption this just now firing. so they needed to work. and for that to work they need a weaker yuan. tom: very briefly before we let you go, the bloomberg dollar

index is that on the 10th of a percent, with leading to the modest softness in the greenback in today's session? >> there is profit-taking going on because we are into the end of the quarter because there's a lot of rebalancing taking place in bonds and stocks, therefore there is a bit of turn in currencies are reflective of what's happening in stocks and bonds. tom: bloomberg's mliv strategist on the yen, the yuan in the dollar. thank you very much, always with the analysis across the fx space. indication for bloomberg markets. 20 more coming up. i will break down the moves with nvidia and look ahead. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. we have been talking about the slide and nvidia shares over the last three trading days. in terms of market cap, this is the biggest three-day loss in market value for a publicly listed company on record. back below three children. back below microsoft, back below apple, and again, it's an correction territory. it's a couple of reasons it's flagged coming from our mliv team, whether it's the options expired coming through. inside of sales, chief executives of the ceo, cfo and others with 700 million u.s. dollars shares. the stock was also firmly in overbought territory, 70 on the 14 day rsi. still the stock is up 140% year to date. but does this spell a broader slowdown in terms of these markets are is this a by the this opportunity looking to get

exposure of this maker of ai accelerators. that's what the board and look up the market cap and how things have gone wrong. for those exposed to one leveraged etf, it's called the granite shares to exxon nvidia daily share. there was in for around 743 million dollars into that etf last week and that fund has fallen 25% because of the leverage. still at 330% year to date. that's going to have been painful. another story to look ahead, a lot of data coming out of the u.s., looking at inflation data. we get a gauge on the consumer confidence with the conference consumer confidence reading coming through for the month of june. it's expected to soften, this is key in terms of how you think about moderation coming through for the u.s. economy and ties into the jobs. very daily of the san francisco fed talking about this inflection point potentially for the labor market of the u.s. what is all of that doing to u.s. consumer confidence?

we know retail sales most recent data came through slightly softer than estimates. that could be important later today in terms of the gauge on the u.s. consumer. 20 more coming up today. we will speak with the berkeley ceo joining bloomberg's francine lacqua with a fireside chat is a part of the forum from london climate access week. don't miss that interview live at 1:10 p.m. u.k. time. up next it is markets today. stay with us. this is bloomberg. ♪

>> good morning from london. i'm and or edwards.