tom: good morning. this is "bloomberg daybreak europe." i'm tom mackenzie in london. asian currencies slumped to their weakest since 2022 on bets u.s. interest rates may stay higher for longer. the yen's to levels not seen since 1986. raising the possibility of intervention. u.k. prime minister rishi sunak and labour's keir starmer get combative in their final tv debate one week ahead of the election. we bring you the highlights. plus, a familiar face is taking the helm of the swiss national bank. we break down what to expect from the leadership of martin schlegel. let's check on the markets because one of the key drivers across the asset to fully in equity markets is micron, a mismatch in terms of

expectations and delivery, at least for this maker of memory chips. we will get onto the market moves shortly made that is playing into what's happening in equity markets. you are pointing to a lower start this thursday, june 26th. on the u.k., the ftse 100 looking to a loss of 17 points. as we count down to that election july the fourth next thursday in the u.k. s&p futures stateside looking to losses of 0.3%. nasdaq futures also pointing lower by currently 72 points. part of that will be down to what's happening with micron. let's have a look in terms of the outlook. this was key for micron. the outlook that missed some of the more ambitious expectations across markets. micron down as a result of that after hours, close to 8%, the ripple across to chipmakers in asia, also feeling the pain

of this. it is a reminder on a week when you have seen volatility pronounced around the moves on nvidia. the losses over a three-day period, and then the rebound, now the question marks around micron, a reminder of the risks of the expectations for this ai frenzy. we will continue to unpack the story throughout this hour. let's look cross assets briefly. bit of a sell of across u.s. treasuries yesterday, tying into this expectation that rates will be higher for longer, that maybe the inflation data on friday out of the u.s. pce will come in higher than expectations. the u.s. 10-euro 4.32 right now, 1.06 euro-dollar, up a 10th of a percent, the dollar giving back some of its gains on the session today. 160, japanese yen, currently down 0.3%. $85 a barrel on brent, down zero .2%. let's cross to asia where avril hong is standing by in singapore with a focus on the yen and the

read-across in the micron story. avril: those are the themes we are watching in this part of the world today. asia equities are down. the chip stocks are declining. among the biggest drags on the benchmark. no thanks to micron compounding those concerns about ai valuations being too high, but it's not just tech that is down today, we're seeing all 11 sectors on the msci asia pacific in negative territory, which also tells us the focus is on those pce numbers from the u.s. on friday. we are seeing on the mainland that decline but the hang seng is the one that's catching our eye. underperformance there. today we got china industrial profits, the numbers were uninspiring. beijing relaxing homebuying restrictions not helping to lift sentiment at all. as we see those concerns about the chinese economy, dollar-china has been nudging higher, this is against the bedrock of both the resurgence

into dollar, we are seeing a alike now. offshore yuan has earlier breach 7.30, recovering now, but we are seeing from the pboc a weak yuan fix, for the longest period in about a year, what this suggests is that central bankers are coming through with controlled devaluation ahead of risks not just from pce numbers but further outcome of the u.s. election. thing about what that might mean for tariffs on chinese goods. we are seeing the yen recovering from the 1986 low of 160.87, but of course, if japanese rates don't go high enough and the u.s. ones don't come down, we will see weakness in the yen. that needs to ease before we see any relenting in this level of weakness of the japanese currency. flip the board. that brings me to my next point. when you look at the one-week risk reversals, it suggests that

options traders are not so scared about the intervention risk from japanese authorities compared to april. we are seeing them favoring the yen less compared to the dollar this time around. tom: avril hong with a deep dive on the asian markets freight ending on what is happening with the positioning around the japanese yen. we will get more analysis on the currency and bring in mark cranfield. what are traders latching onto as they continue to bet against the japanese currency? mark: it is a theme you and i have discussed several times the past few weeks. this disconnect between where the bank of japan stands and where the japanese ministry of finance stands. the ministry has response to billy for acting in the foreign exchange market when they see the right time to do so. we have seen them do it aggressively this year, without marked success, and traders can

see that intervention on its own without changes to monetary policy on the other side, is not a very effective tool when you are facing united states interest rates which are so high and don't look as though they will be coming down near term. that's the gap that the traders are going between to exploit the difference in what we're hearing from the japanese authorities. and the ineffectiveness of the intervention they did and the fact that interest rates remain extremely low in japan. it was not a ordinate and policy. traders can see the weakness in it and that's what their are exploiting. tom: we talked about the impotence of the ministry of finance in tokyo. to what extent is the boj also impotent? what other signals are traders looking for in a potential change of policy from the bank of japan? mark: there is a lot of talk about this july bank of japan meeting whether it will be a

so-called live event. people are expecting something to be done, whether it is on monetary policy or quantitative tightening, in terms of reducing the amount of bonds they buy. there has been a lot of disappointment. both the april and june bank of japan meetings in advance of that, people had high expectations that something was going to change in terms of policy that would go on to support the japanese currency. in both cases, neither happened, and we see the results of the yen reaching another high-level again last night, still above 160 today. it's now down to the bank of japan to surprise the market or even stock the market by doing something that really stuns people and says you mean business, you really want to support your currency. that could be a so-called double whammy. they could actually raise interest rates in july and at the same time announce the reduction in bond purchases. if they do it together, the market would be caught off side. given what's happening the past

couple of meetings, they are not affecting my from the bank of japan. maybe one step or the other and even as they do something, it won't be that decisive. to stipulate an opportunity for the bank of japan to say yes, we see these wage increases have been big enough, we are happy with those, we feel confident to change policy. let's do it all in one go in july and see how much it helps the yen. but i think plenty of traders won't be holding their breath on that outcome. tom: mark cranfield on the outside prospects, at least for now, of a potential double whammy on the bank of japan as they look to address the weakness in the currency. from our mliv team with fantastic analysis, thank you. prime minister rishi sunak and labour leader keir starmer have clashed in their final tv debate before next week's election. starmer accused sunak of being out of touch while sunak attacked starmer on taxes. >> i just want to address at this point. >> he literally opposed this.

>> if you listen to people in the audience, across the country, or often, you might not be so out of touch. >> if you want higher taxes, and higher welfare, that's what keir starmer will do, if you want lower taxes, that's what i'll do. do not surrender our welfare system to the labour party and keir starmer. tom: bloomberg's adam glenn foot joins us now for the take on this final debate, as we are one week away from that election on july the fourth. what was at stake last night, and what was the assessment of how the two leaders performed? >> good morning, tom. probably more was at stake for rishi sunak in the sense that this was effectively his last chance to go head-to-head with keir starmer in the election campaign. this was a huge platform for the both of them. primetime on the bbc, obviously,

the national broadcaster, so a great deal of exposure and pitting their styles and policies head-to-head. for starmer, you could say the stakes were even higher. he has on the cusp of downing street. he is a week away from what would be an overwhelming election win. that he has to stay solid. he did stay solid in the previous debate a few weeks ago. starmer was on the defensive over claims that labour would push up britain's taxes by an average of 2000 pounds per working family, and starmer was more flexible on that tonight, more responsive. but sunak did come out very combative. his conservative party were on the attack almost before the debate started. one of their social media accounts which was a bit of a gimmick. it gave a sense of what they were trying to do. they were trying to go on the

offensive and sunak has a lot of punch in his words. but as you saw from some of sunak ripostes he came to the mark pretty well. tom: this time next week, the british people go to the polls. how does this set up the remainder of the campaign? >> there was a snap poll at the end of this from yougov, one of the pollsters, that showed after 75 minutes of debate, which you could read as five or six weeks of election campaigning, the audience was split about 50-50 on who did well. that was not enough for sunak. his party is still 20 points behind in the polls. over the length of the campaign, the polling gap between conservatives and labour hasn't narrowed. what we have seen, as you can see in that graphic, is a rise in the polls by the right wing reform party, who are taking we

think votes potentially away from sunak and the conservatives. that is the big concern as he goes into the final week. the message from conservatives is a vote for anyone other than them would deliver a very large labour majority, and the message was they kept hammering home last night, was that labour would raise people's taxes. which starmer continues to deny that they will raise many of the main taxes but it remains some wiggle room around my new shepard which we might see from a -- the minutiae we might see from a labour government. tom: the takeaways from that final debate between the prime minister and his opponent keir starmer. other parties making their bids as we saw in that graphic. we are in the final throes, lib dems, the form u.k. and green party in the mix as we count down to july the fourth. this thursday, june the 27th, here is what else to be thinking

about. 1:30 p.m. u.k. time, we get the u.s. data, with a focus on gdp from the most recent quarter but also jobless claims. we have started to see cooling around the labor market of the u.s. talking of which, this links in, 9:15 p.m. u.k. time, nike with a gauge on the retail space of the u.s., but also, that if budget to markets like china. the earnings coming out of nike. as you can see over one year, the stock is down close to 17%. 2:00 a.m. u.s. time, this is the big one in terms of politics, the first presidential debate between former president donald trump and her president joe biden. that takes place later today with a focus as we count down to the election in the u.s. in november. a new flat familiar face has been picked to lead the swiss national bank. more on what to expect from martin schlegel ahead of his promotion to the snb president. that is next. this is bloomberg. ♪

tom: a redhead crossing the terminal right now. a reminder of the turn in sentiment around chinese equities. the msci china index down 10% from its may high. now set for correction. as investors reassess the policy response particularly targeted at the real estate sector. that will not set up luxor around prices on real estate and what that means in terms of the consumer in china.

industrial election data earlier today. we continue to watch the data. hopes within beijing that exports will provide some kind of ballast but for now the investor community has turned on chinese equities. we will see how this unfolds but as you can see the msci china currently down close to 2% but since that may high set for correction territory, a drop of 10%. now to central banking and closer to home this was national bank announcing the current vice chair martin schlegel will be taking over the top job in october of this year. he will succeed thomas jordan who has endorsed him for the position pray let's bring in bastion in zurich. what we know about the incoming chair? >> we know for example that he is younger he is just 47 years old. significantly younger than thomas jordan. he has an international exposure. he has let the snb office in singapore, so he knows the international plane as well. the most important thing is that he joined the snb as an intern to the current chairman thomas jordan, and that makes him a protege of his. he has been following in his footsteps all of his career.

he joined 20 years ago. he is very much seen as a chosen successor of thomas horton. if you look at swiss military policy, there is not a lot to change, the decision to appoint a new chairman was widely expected. martin prepared for this like we kind of know what is coming. tom: you touched on this. but unpacked it for us in a little bit more detail in terms of expectations around the policy. with that focus on the currency of switzerland, particularly given the political risk in countries like france. talk about how policy may be adjusted or where the attention and the underlining may be coming from come october when it comes to monetary policy in the snb. >> the snb is on quite an

aggressive easing journey. they royally surprised markets in march when they did the first easing step by 25 basis points before the ecb had moved. and they confirmed the step downs just this month, taking another step down, although economists expected they might hold given the global hesitancy among the ecb and fed. they are on this easing journey. the fact that they stick to it so aggressively has probably something to do with the political uncertainty you mentioned. we have seen strong appreciation of the franc as investors flock into the franc as a safe haven given the political uncertainty in france and all of europe. martin schlegel will be following all of his predecessors in the snb

chair in battling the appreciation tendencies of the franc. economists predict one more cut until the end of the year. this will definitely be determined by healthy franc continues to evolve. if the franc goes up further, maybe we could see an even more aggressive policy easing, or balance sheet measures. the snb has long used its balance sheet. martin schlegel is not afraid of that. that is definitely on the table for the future. tom: bastian in zurich with the context around the change at the top at the snb from october and what it could mean for monetary policy of switzerland. staying on the question of monetary policy. it is the riksbank's turn, 8:30 a.m. u.k. time to make that decision.

all 20 economists polled by bloomberg expect the riksbank to leave rates unchanged at 3.75%. interestingly, the riksbank of sweden cut before the ecb in may. they are prospective to hold. inflation data appears to be in line with their views. there is a sense from economists we have spoken to their will be a cautious approach coming through. they are expected to hold at 3.75%. but any commentary around that expected hold will be interesting. that coming through 8:30 a.m. u.k. time. kenyan president william ruto vows to -- bows to public pressure, scrapping his controversial public tax plan after protests led to more than 20 deaths. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak europe." kenya's president says he will not sign a controversial bill proposing steve tax rises that sparked deadly protests this week in nairobi. william ruto bowed to public pressure after the deaths of at least 23 people. let's bring in ondiro oganga who had been following this from the outset. joining me from kigali. what led to the president dropping this controversial bill? >> it is the sheer determination of kenyans breed over and over we have heard them say reject the finance bill. we saw the president finally saying i concede. this is a stark difference from his previous address where he was bullish in his tone. used words like dangerous criminal and treason. in his latest address the almost adopted a humble tone saying he is open to dialogue and wants to listen to the people. this will now get sent to

parliament together with a presidential memorandum recommending that -- v deleted. with international pressure beginning to mount, the united nations secretary general says he is deeply concerned by the violence in kenya, the detentions, and also asked the authorities to practice a little bit of restraint. kenyans think it is too little, too late. they are going back to the streets. their trust has been broken and they felt if the president was to do something, he had a chance to do that before lives were lost. tom: it is a reminder of the gap existing not just in kenya, but other jurisdictions, between the people, the population and the markets. what has the reaction been since the government agreed to? drop this bill? ? >> securities have handed investors -1.83 percent since june, the biggest lost following gabon and egypt, according to

the index of developing nations. the kenya dollar bond rebounded after the loss it ordered following president ruto's statement trade we saw a trading slightly stronger with yields at 10.67 percent rate concerns remain about kenya's long-term solvency plan. there are concerns that geopolitical tension continues to make things harder due to higher energy and food prices. coupled with other economic challenges it makes things harder. the bottom line remains kenya needs to balance the budget. one way, increase revenue, the other way, cut spending. we wait to see what direction the government takes. tom: ondiro oganga on the latest out of kenya on that surprising twist to some extent. don't miss bloomberg's monthly "africa amplified" program for stories impacting markets on the continent. the next show thursday, july the fourth will bring top voices from the travel sector. bolivian president luis arce has

sworn in a new army commander after troops stormed the presidential palace in an attempted coup. hours earlier, bolivian troops crushed a tank into the presidential palace to overturn his socialist government. he has struggled with dwindling natural gas shortages and a currency peg that has effectively collapsed. rishi sunak and peers, facing off in the u.k. election campaign's final tv debate. we look at how markets and what markets are watching for with one week to go to voting day. 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: good morning, this is "bloomberg daybreak europe," i'm tom mackenzie in london. asian equities and u.s. futures slide with big tech hits as microns outlook falls short of lofty expectations. in the u.k., prime minister rishi sunak and labour's keir starmer get combative in their final tv debate one week ahead of the election. we bring you the highlights. plus, bloomberg learned that spacex is to sell insider shares valuing elon musk's space and satellite company at close to $210 billion. one of the most valuable privately held companies in the world. let's check on the markets. dorsett for a bit of downside for european stocks. the pressure was there yesterday. relatively modest, but we look to build on the downside again

today, with question marks over semiconductors, given that the outlook from micron did not meet loftier expectations. read-across to asian markets with some eyes on in that part of the world being squeezed. european futures down a 10th of a percent rate getting data around eurozone and european consumer later today. maybe that will feed into the picture. we had olli rehn at the ecb suggesting two rate cuts from the settle back is still appropriate this year. s&p futures pointing lower by 0.3%. nasdaq futures also said to take a bit of a hit as things stand, looking to lose 69 points, and micron will be part of that story. less lacrosse asset. we had a selloff in u.s. treasuries yesterday as we build up to that key inflation data out of the u.s. on friday. 4.33 on the u.s. 10-year, the single currency in the euro zone, at least be on the u.k. borders, 1.07, a little bit of

softness for the dollar after gains of recent days. 160 on the japanese yen, moving lower by 0.2% and intervention watch firmly in focus. but is this a ministry of finance of japan that is relatively impotent in the face of higher rates in the u.s.? a five dollars a barrel on brent down 0.2%. let's get back to the u.k. where opposition labour leader keir starmer who polls suggest is on course to be the next prime minister has told itv he would target gdp growth of at least 2.5%. for more on the u.k. economy, and whether that is feasible, let's bring in josie anderson, senior economist at experian. thanks for joining us in the studio this morning. we will also get your views on the boe and how the tech sector of the u.k. could be a bright spot. let's start with this growth target. 2.5% is what keir starmer hinted at. i would we get there here in the u.k.? josie: i would call that

ambitious. between 20 and and and 2019 we saw average tv growth of 2%, slightly below that 2.5%. we are forecasting 0.8% gdp growth this year which is a pickup from the 0.1% last year, and then that rising to around 2% gdp growth over the five-year forecast horizon. but we're not forecasting above 2%. that is an ambitious target. you would need to see quite heavy investment in some areas of the economy. so, stimulus from the government boosting that gdp growth. recently, the cost-of-living crisis has really affected consumer demand. we are already forecasting 0.3% in consumer spending growth this year. that is one of the biggest areas of the economy that can stimulate growth. we really need to get consumers back to spending to see higher growth. tom: there is a lot to unpack. let's start with that 0.8%

target for been the u.k. this year. what assumption is baked into that around bank of england cuts? josie: we are forecasting two rate cuts this year, one in august, one later in the year. we have had inflation hit that 2% target in the u.k. in may. i'm the meeting last week from the mpc, we saw two members vote for a rate cut, but also, sentiment that others are more comfortable with the rate of inflation now and would potentially be up for cutting rates later in the summer. the issue with inflation is services inflation at the moment, which stands at a high level. there is concern that will come down a lot slower. so the bank of england will be watching out for that. tom: this stickiness of services inflation. how do you see inflation evolving, what are the risks to the disinflation? we are back to the 2% target on a headline basis. what are the risks around that move lower? josie: it is goods inflation that has been bringing it down.

that has driven things like energy and food. we are expecting another often energy price kept in july, that is fully agreed that it will be 7%, but looking ahead to the end of the year in october, a projected 12% rise as expected, so goods inflation could come up towards the end of the year, also housing demand in the rental sector could push inflation up a little bit. so we see it falling actually to 0.1 percent in june but then rising slightly towards the end of the year. tom: you touched on the consumer. it is a big summer for support. with the euros right now we can look past england's dire performance but we have the olympics in france. you crunch the numbers, in consumer spending, what have we looked at? josie: we did regression analysis and estimated that the additional spending in things like bars, pubs, also retail spending for consuming at home could boost the economy by 230 million pounds over a

three-month period when we have got the euros and the olympics. that is a bright spot in terms of that weak consumer spending out of the cost-of-living crisis. tom: both labour and the tories expected to be the lead contenders, the 20-point holding gap between labor and conservatives, both leaders talking of u.k. tech. what is the opportunity around the u.k. tech sector, to what extent is that a bright spot in this economy? josie: we do forecast different sectors of the u.k. economy, and the growth they are respected to contribute, and we see the tech sector as a bright area. obviously, developments recently including ai offering more opportunities for the sector and we expect it to him is in importance, rising from 7.1% of economic output currently to 7.6 percent within the next five years. the opportunities are endless beyond that. we are forecasting growth to be stronger than other big sectors

on in the u.k. like professional services, banking and finance. our analysis looked at tech hubs in the u.k. while london is particularly strong for the tech sector, we also see outside the southeast, a tech hub with nearly 10% of jobs from the sector there. it is across the u.k. that the tech sector office opportunities. tom: excellent breakdown of what we're seeing across this economy. the production of 0.8% gdp growth for this economy, at least by the end of this year with two cuts coming through from the bank of england. the call from josie anderson, senior economist with a view on tech, talking of which, micron stateside shares slumping post-market after its forecast disappointed investors seeking a bigger payoff from the ai mania. as get more from our tech reporter annabelle droulers standing by over in hong kong. talk to us about what has been happening with micron. on one level, the earnings beat

expectations, but the outlook disappointed. >> and even when you take a look at what wall street had been expecting, in terms of the sales outlook, it really did meet what micron said. let's stand back and look at what we saw over the course of this year, because it has been that big run-up in micron's stock, around 65%, so it points to how much expectation there was to deliver here. going into the earnings, the average estimate for sales was $7.6 billion, that is a drop of 80% on the year, it points to those lofty expectations. what micron delivered was a range of 7.4 to 7.8, so 7.6 is a midpoint of that, but where investors got disappointed was that higher end of the range. some on wall street was saying we could see sales in the fourth quarter topping the $8 billion mark instead. that led to that move and slump of 8%.

that was the big move after hours. we should note the big move intraday. that was most certainly amazon. we saw a move of 4% in the stock. what that did was give an injury into a -- entry into a very exclusive club, the $2 trillion club, that also includes alphabet, microsoft and apple as well. tom: don't forget the $2 trillion club. this is something you cover closely in terms of the ai space with a focus on the chat models. perplexity. i've got it on my phone. they give me news alerts. they did not tell me softbank is buying this business for 3 billion u.s. dollars, talk to us about that. >> it is may be part of the bigger funding round. there is a new funding round for perplexity ai. it is a company often spoken about on in the same sentence as

google. a lot of startups have tried and failed to challenge google over the years but it is looking shakier of light. we hear from sources is softbank we knew wanted to make a big ticket into an anti-company. perplexity could be the one. it has only been around two years but is looking for funding. this round could be $250 million. softbank but in between 10 and $20 million at a valuation of $3 billion, so tripling what it was previously. that does make perplexity now possibly the most highly valued company in the industry. certainly, one to watch. tom: talking about you, spacex, we got a bit more severe in terms of how valuable this company is. >> we are seeing possibly another tender offer on the way. employees on the inside could be able to sell shares at around $112 apiece.

we last reported on a tender offer taking place at the end of last year. shares were being sold at $97 apiece. that increase to $112 puts the company valley around the $210 billion mark, a $30 billion game in the last six months, so that tells us there is significant investor demand. it is according to bloomberg sources. the caveat being that terms aren't finalized. the size of the deal could change but $210 billion possibly would be a record for an american private company. tom: annabelle droulers wrapping up a lot of tech news for us ending on spacex and the valuation there. let's get back to the politics of the euro zone with a lens en france. the latest falling coming through as we lead up to the first parliamentary voting on sunday. on the left-wing side, france's alliance now has 29%, according to this ipsos poll, le pen's

national rally has 36%, mccrone's group in third place with 19.5%. this is according to the ipsos poll. le pen to the list in terms of this poll, 36% of support, follow by the left-wing alliance at 29% and macron's group at 19.5%. we keep across the french politics throughout the next few hours. switching focus to china. the long-awaited plenum, we have dates for that coming through. this is a redhead when it comes to china. really significant meeting when it comes to setting the economic agenda for the world's second-largest economy. the dates being set, july 15-18. china will be holding that plenum. it's been delayed. now we have the dates. there will be scrutiny in terms of any policies that come out of that meeting.

stay with us by the way for them bigger conversation about china. we will talk to the u.s. ambassador to china, nicholas burns, about trade and tariffs and that the russian defense pact with north korea at 7:15 a.m. u.k. time. joe biden and donald trump prepare to face off in their first tv debate ahead of november's hotly contested election. we bring you the preview. what to expect from that presidential debate. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak europe," happy thursday. president biden and former president donald trump are

preparing for the first presidential debate ahead of november's election. biden's campaign sees one victory with the absence of third-party challenger robert f. kennedy, jr. from the states. let's get more on what to expect from this debate with markets today anchor kriti gupta. always follows the twists and turns of u.s. politics closely. how could this reset or reframe this race? kriti: i will be looking for the best place to get my popcorn at 2:00 a.m. because i will be glued to my television screen. this will be about domestic policy. there is a lot going on in terms of the supreme court decision, abortion, immigration control and gun control coming up, not to mention convictions on both hunter biden and donald trump that you have had in the last couple months. those will be hot button issues. the debate is set up to test things like mental and physical stamina. lack of consultations with the debate team. the policies in focus in terms of the financial markets will be things like tara policy.

how hard do you want to go in on china, how you want to handle the budget deficit? whether those are things they outwardly talk about is interesting. for the european audience, it will be a question of things like where the spending comes from. biden has come under a lot of heat for the inflation reduction act and investing in green energy. trump is likely to push back on it. so much of his electorate will be in oil-producing states in the u.s. he will be talking about investment in the states but in different sectors and that might be where they differ. tom: from proposing tariffs across the board of 10% and a massive crackdown potentially deporting up to a million migrants. that would be inflationary which is interesting giving the messaging. is this a tradable event? kriti: this is mixed. there is this narrative of a safe havens story that is shaded with the states. if you have that tara frederick, you just buy the dollar immediately off the back of it, on the other hand, the bond

market will be reacting different. they are keeping their eye on the budget story and in patient but even immigration and tariffs takes a while for that show up on the economic data. therefore, for the federal reserve to react later on. that is likely to have more of a temporary effect but the dollar positioning i would keep an eye on especially with any hint on the deficit story, or member, january 20 55,, weber is the next president this the first thing they have to address after they are inaugurated. tom: fantastic set up ahead of that presidential debate. the first one of this electoral cycle as we count down to november. from the politics of the u.s. to the politics of the european union, where leaders are meeting, as they ramp up a deal on the bloc's top jobs after failing to reach agreement last week. they are poised to nominate ursula von der leyen for a second term as president of the executive arm. let's get more from oliver crook.

first eu council meeting since the election. what do leaders need to get this done? oliver: what they need to deliver at this meeting, this is the top priority, the top jobs. once you establish that three top jobs within the eu, the commission president, the foreign policy chief as well as the european council, from there everything trickles down in terms of the other commissions and policy priorities. ursula von der leyen likely a shoo-in for the presidency, kyla chiesa to deal with foreign policy and antonio costas to do the european council president. what they need to do is come out with their strategic agenda. this is the document that lays out the outline for the european policy priorities for the next five years for this new government. this will talk about the very familiar topix we have covered a lot here, whether it is defense, security, whether it is ukraine and also competitiveness. zelenskyy will be in brussels today. we are respecting a renewed commitment from the eu.

let's not forget the beginning of accession talks joining the eu from ukraine, those formal talks began this week. tom: there is a lot on the docket for them. the power dynamic has shifted across these eu institutions, or it is in the process of postelection, how is that playing out? oliver: there is the top jobs. there is the concrete ways in which we will see that play out. there is also the question about meloni and macron. meloni yesterday got in front of italian parliament and was railing about the top jobs in the next day comes to brussels. despite the strong mandate she has in italy, it is interesting to see how she will exert that across the eu because she doesn't have a voice for the top jobs because that is done through a qualified majority that does not need unanimity. you have macron on the lame-duck side of things. he is probably the biggest

advocate for joint debt to build up defense in europe. that will sort of flyaway. then you have the election in two days. both the left and right pose huge problems for the eu. the left with massive deficit spending and the right who want to subsidize a lot of their plans within france by cutting their contributions to the eu, so all of this hangs over discussions as well. tom: fantastic stuff. oliver crook setting us up for that meeting with the eu amidst those changing dynamics. there is plenty more coming up. this is bloomberg. ♪

>> the deal flow is still not quite there. >> private equity has slowed in activity. >> in our pipelines, we're seeing meaningful acceleration of deal flow. >> the key concern is will the

buyers and sellers meet in the middle? >> for the credit markets, you still have a lot of options whether it is a recap a minority sale, and that is what we're seeing. it may not be asset sale outright but a transaction is going to occur. >> rates have stabilized and cuts are on the horizon we are seeing the pipeline pick up meaningfully, which means more deals, more velocity and even if the base rate comes down, it will still offer a attractive rate. tom: leaders in asset management, banking and private markets weighing in on the outlook for deal activity at the bloomberg invest summit. the last speaker talking about the rate environment, interest rates still at that 5.25% level for the federal reserve. that links in to what's happening with the japanese currency. a bit of relief in the session for the yen currently at 160.36,

but my goodness come early for how long is the question? there is this impotence it seems within the ministry of finance in japan to do anything significant to support this currency. that is the view of many traders who continue to bet against the currency. it reached 160.80 seven yesterday, the weakest since 1986, it is down 12% versus the u.s. dollar, so will you come through in july with the boj with a double whammy? mark cranfield saying it is not base case but the boj may be compelled to act, raising interest rates and maybe suggesting their bond buying program. something to have on the back of your mind as we lead up to that meeting from the boj in july. the inflation data out of the u.s. on friday will be important. if we get a suffer number, it may be relief in terms of rates expectations and for the yen. but right now the japanese currency with modest relief in the session but broadly pressure continues.

amazon getting to a $2 trillion mark, up 26% year to date, benefiting from cost-cutting and also support from the aws part of that business. leaning into the ai frenzy and being rewarded for that. breaking above $2 trillion in terms of market cap. next hour on bloomberg tv. the u.s. ambassador to china, nicholas burns, joins us live from our shanghai studio. we will talk about trade, tariffs and the russian defense pact with north korea at 7:15 a.m. u.k. time. that is all on "markets today" which is up next. stay with us. this is bloomberg. ♪

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>> this is bloomberg markets today. i'm anna edwad