tom: good morning, this is

"bloomberg daybreak: europe." these are the stories that set your agenda. >> 18,000 new jobs, and we are in a position where we have 800,000 new manufacturing jobs, but there is more to be done. >> the only jobs he created are for bounceback jobs, he has not done a good job. tom: joe stumbles through exchanges while donald trump makes false claims, as the candidates trade barbs on the economy, foreign policy and their fitness for office in the first presidential debate. we bring you analysis throughout the show. data points to a slowing u.s. economy. we will preview today's reading of the fed's preferred measure of inflation. european leaders nominate ursula

von der leyen for a second term. we are live in brussels later this hour. european futures are off to a positive start. digesting the politics of the u.s. after three straight days of losses for european stocks, we are pointing higher. the economic data out of the u.s. confirming slowness, at least cooling on the edges of the world's largest economy. the personal consumption expenditures index later today with expected slow down. markets are pricing in 45 basis points of cuts from the federal reserve. to what extent will that reshape the views on the federal reserve? european futures pointed to gains of 0.3%. s&p futures up 0.2% after modest gains yesterday. let's put the board cross asset. we did have a move into treasuries yesterday, giving up

some of the gains, yields edging up. the dollar is gaining, pressuring the euro. the currency down close to 0.2%. part of that from the presidential debate. $86 per barrel, and bitcoin is volatile, 61,000. to the top story, president biden stumbling through exchanges in the first presidential debate. a performance that risks exacerbating concerns among democrats about their candidate's ability to beat donald trump in november's election. let's bring in kriti gupta, who was watching with the analysis. the first question is on the economics. we will get to the style, then the substance. the performance of the candidates in the messaging coming through, on the economy,

crucial for our viewers. the question of the soaring deficit and who was responsible, how did each candidate answer? kriti: it is the first thing on the president's docket, the debt ceiling. they are addressing it in two different ways they both acknowledge it is growing and something that requires something being done. it is affecting their tax policy. starting with president biden talking about increasing taxes on the wealthy, that if you make more than $400,000 a year, you'll get a tax hike if he is reelected. he is talking about the chip investment story and pricing for drugs, saying he will expand that and create the long-term input you need and eliminate expenses within the states. it is something that will take years to come through while the deficit is still growing. former president trump also discussing the tech story where he is talking about tax cuts,

incentivizing repatriation of money. it was a key pillar of his policy. he is talking about oil and gas exports, even rolling back spending on nato, and the tariff story, saying if you increase tariffs, that will bring money back. tom: this is crucial for our international audience, gauging where he goes on tariffs. that's the sin to what they had to say. -- let's listen to what they had to say. >> it will cause countries who have been ripping us off for years like china, it will force them to pay us a lot of money, reduce the deficit and give us power for other things. >> 10% tariffs, everything coming into the country will cost the average american $2500 a year more because they will have to pay the difference in food and all the things that are

very important. tom: what did you make about what they had to say about tariffs? kriti: they are saying what the final t -- financial market says, the policy has not changed knowing tough on china between the presidents, even though they acknowledge it is an issue. trump is talking about tariffs on europe, and that is hooked to the defense story. when we are talking about this tariff policy, so much is already in place, and former president trump says this is a positive for the u.s. economy that president biden cannot get rid of them. the ultimate argument is those tariffs came in agreement with purchases with china for agricultural goods, purchases that were not fully executed from the chinese. tom: i would point out trump is hitting biden in terms of

inflation while also suggesting he will raise tariffs, which economists say is inflationary. when it comes to the question of nato, there was the concern in europe and elsewhere as to the u.s. commitment to nato under former president trump. biden has tried to put a line under that story, what do we hear from both candidates? kriti: trump stuck to his line saying if he was president, the war in ukraine would not have happened it would and he says if he is inaugurated he will end the war. he did not explain how or why but it emphasizes the line he has been saying for four years. he made similar comments around the war in gaza. that is something to keep an eye on on how he approaches his role in foreign policy. when it comes to nato, he talked about the billions that showed up when he threatened to pull

out of nato, something biden pushed back against, saying we have to stand by our allies. he brought up the article five agreement, and said, will you pull out and favor putin, and trump said you have to put your money where your mouth is. tom: thank, kriti gupta. we will have more analysis on this debate. we will continue to bring the focus not just on the substance, but the style because that is consequential given the stumbles from joe biden, and the lies from former president trump. let's see how the asian markets are faring. avril: we have been keeping a close eye on the u.s. residential debate. currency traders were bracing for some hawkishness from both candidates.

we did not get that large -- we are seeing a bit of a relief, offshore yen pulling away from the highs. a bit of again but the focus will be on the pc numbers out of the u.s. and amid that, we see the greenback hitting the japanese yen, despite tokyo cpi is a leading indicator of a nationwide trend coming in hotter than expected, and making the case for a boj rate hike. that is not happen -- that is not helping that japanese yen. japan is set to replace its currency chief, a normal personnel change. the topix earlier today hit levels we have not seen since 1990. this is paring the gains significant.

we will see where it ends the session but overall a positive day tracking wall street. tom: thank you. a key update on the u.s. economy with pce, the fed's preferred inflation rating is due later. let's bring in ven ram for a preview, and goetta recap on the softness we have seen in the economic data around growth for the u.s. ven: there are a couple of points i would like to make with the core cpe, we all ready know the headline cpi and the core inflation print and readings, so one forecast reading for core cpe with a high degree of accuracy. i would be surprised if the number deviate from the medium

forecast today. having said that, there is this big question of the economy looming over the markets. the big picture seems to have shifted slightly to concerns about the economy. we saw pending home sales fall. if the core cpe reading is in line with the forecast, treasuries will try to rally a few basis points but that is not a prescription for gains. while we are seeing pockets of weakness in the economy throughout this year, some parts of the economy cooling off and losing momentum, but that has not translated big time into the jobless numbers. that is why we will have to wait for next week's nonfarm payroll data to see if there is confirmation of the trend, the pockets of weakness translating into the big picture labor

market data. tom: not the ingredients yet or a rally in the treasury market, even if you see moves of 1-2 basis points, or if that data comes in line, pce coming from the u.s. we look ahead to the nonfarm payrolls data and the importance of that next week. now, french bonds have fallen, widening the yield premium. investors remain on edge ahead of parliamentary elections in that country. this is france's three main party leaders who squared off in the final televised debate ahead of sunday's first round vote. >> there are redlines, sending ground troops is not requested, even by zelenskyy nor the ukrainians. it is absolutely useless. president macron proposed it, divided the europeans, and worse sent putin information that he did not have, that europeans are

not prepared to send troops on the ground. >> if russia won over ukraine, it would be terrible for the daily lives of the french. inflation would explode. energy bills would explode with more destabilization, and that would be a significant wave of migration to europe. >> i will not let russian imperialism absorb and allied state like ukraine, so my position is simple, supporting ukraine to avoid escalation with russia, which is a nuclear power. if tomorrow i become prime minister, no french soldier will be sent to ukrainian soil. tom: let's get more, thank you for joining us, what stood out to you from this debate? >> it is not really a game changer.

tom: looks like we have a connection issue to paris. we will get back to that story. the importance of the french election as well, as we can't down to the first parliamentary vote. it is a two round vote, and voting in france start sunday. the most recent pulling for france coming through suggesting there is no major movement in terms of how these three main groupings are lining up, with macron's party in third place behind the leftist alliance. the party of marine le pen still pulling number one as we lead up to the second round -- the first round of voting that starts on sunday, then the second round. i believe we are reconnected. the key takeaways from that debate as we head into the first round of voting sunday. >> it is not a game changer. the three main blocs stood their

ground. there is a fair amount of stress. that can be measured by the spread between french debt and german debt, it touched over 80 basis points. one key takeaway on the debates is on the future role of macron as commander in chief of the army, and how the situation in ukraine and the support to ukraine, that could be potentially a source of tension, whether a far right government and macron staying on as president. tom: living up to the first round of voting. thank you for the key takeaways. another country is electing a president today. we will bring you the latest from iran as two hardline candidates drop out.

that is next. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." iranians will be going to the polls today to elect their next president falling the death of the former president in a helicopter crash last month. let's get the details on this unfolding story. talk us through who is in the running in iran? joumanna: the polls open that :00 a.m. and will be open until 6:00 a.m. today contingent on turnouts. turnout has been very low, around 40%. if it is higher, the polls could be extended to 10:00 tonight. we will not get results until

late saturday afternoon or sunday. who is in the running, as it stands now we had two hardline are conservatives pull out. four are left up on screen. you have one of the most hardline candidates, and the parliament speaker in the mix, and then one candidate who is the reformist of the lot. when i say reformist, in the sense that other more reformist candidates or prior leaders in iran have endorsed him. out of all of those, he is probably the most inclined to reopen negotiations anchor communication channels with the west. what should be noted is at the end of the day most foreign policy and ideological decisions are still going to be in the hands of the ayatollah and

supreme leader. this new president, should he be elected in the first round will be responsible for the direction of travel of more domestic decisions and cultural decisions like the enforcement of the hijab, which is a sensitive subject in iran. if no candidate gets 50% in the first round today, then this will lead to a runoff round on july 5. you need 50% to get to that threshold. it does not seem likely any candidate is there, which makes it more likely we will get a second round in a week. tom: i know you have been watching what is happening with the northern border of israel, and we got reporting today from nbc that the pentagon is looking to move u.s. military assets closer to the region. this seems significant. tell us more. joumanna: it is significant and

citing an nbc report saying the panic on will move key military assets, assault ships, three moving more east in the mediterranean to get closer to israel. they are citing concerns about the possibility of israel going for a ground offense and upping airstrikes. it is worth noting this is not happening in a silo. many countries are warning their citizens to leave. the u.s. state department reminded citizens to leave lebanon and not travel to lebanon. germany and the netherlands and europe have become the latest countries to call their citizens to leave lebanon. there are a lot of discussions behind the scenes about how these countries can coordinate evacuation efforts if things do escalate. i want to flag our colleagues in the u.s. spoke to the u.s. envoy

to the region, and he was asked about lebanon and what he sees happening. important dimension that he does see some link between the discussion around the gaza cease-fire and what could potentially happen on the border with lebanon. he seems to think if we get a resolution on the gaza cease-fire, that could take tension away or convince hezbollah not to engage in a full-blown tit-for-tat if it goes in that direction. that will be key to watching what happens at the border, and it appears as though the stakes are moving higher as the days go by. tom: up next, silver prices hover at a decade high, spurred

by the booming silver spike. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." silver prices are hovering prices last seen more than a decade ago with the increase being driven by rising demand from the solar industry. let's get the details. thank you for joining us with the details on this intriguing story. talk to us about how much silver is used in the solar industry? jenny: last year's solar used about 16% of the world silver supply, which is a fair amount, more than in previous years.

the total demand for solar is about 50% more silver this year than last year. there is a lot of solar inventory sitting around the market from last year but in general, silver demand for solar is significantly higher this year than last year. tom: is this about greater demand for installations, more of these installations being put out, or the technology itself changing? jenny: it is both. installations of solar is growing to any percent compared to last year, which is a lot less than manufacturers hoping for but a fair amount more. also a technology change. last year the dominant technology was something called perk which uses nine milligrams of silver.

the chart shows the demand. solar demand is up 20% year on year but the technology. the dominant technology was perk which uses 8.6 milligrams of silver, and the dominant technology this year is a shade more efficient but does use significantly more silver, about 12 milligrams. there are other technologies that are not major market yet that use silver. it is partly demand and partly a technology shift that is demanding the increase. tom: i pulled up the chart, looking at silver prices up 22%. if silver prices keep rising, does this lead to an inflationary young pulse? the prices of these modules rise as a result? jenny: right now there is other stuff going on in the industry. prices are at the lowest they've

ever been. it is absolutely unbelievable, the price of solar modules. silver now makes up about 11% of the cost of making a solar module. this is significant. basically the stress is on the manufacturers right now. you have the super cheap modules at high costs. tom: thank you very much for the deep dive in how the civil price is tying into the solar industry. french bonds slip again as leaders face off the final tv debate ahead of the elections, the fir

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tom: good morning, this is "bloomberg daybreak: europe." i am tom mackenzie in london. these are the stories that set your agenda. pres. biden: we created 15,000 new jobs and we have 800,000 new manufacturing jobs, but there is more to be done. >> the only jobs he created are for illegal immigrants and bounceback jobs from covid. he has done a poor job. tom: joe biden stumbles well donald trump makes false claims as the candidates trade barbs on the economy, foreign policy, and their fitness for office in the first presidential debate. we bring you analysis. traders into traders -- treasuries. we will review our meeting of the fed's preferred measure.

european leaders nominate ursula von der leyen as president for the bloc's executive arm. we are live on the ground in brussels. european futures pointing to modest gains after three straight days of losses. investors weighing the economic data out of the u.s. showing cooling as we lead up to inflation data, personal consumption, expenditures, the fed's preferred gauge. it is expected to slow but maybe not enough to convince some offi cials now with the time for a cut. then you have the political overlay with the presidential debate playing through, and the markets moving throughout the debate. european futures pointing to modest gains. ftse 100 looking to add 19 points. s&p futures up after mediocre gains. nasdaq up .3 of 1%.

let's look cross asset. you did see the rally for treasuries yesterday starting to ease, giving up gains. 4.30 on the 10 year benchmark. we will see how that fluctuates with inflation data out of the u.s. 106 on euro on dollar strength. close to $87 on brent. that asset class moving as well during the presidential debate. bitcoin it volatile during the debate between biden and trump. currently up shot .2 of 1%, but the politics are also in focus for us in france and french bonds have slipped ahead of the first round vote in legislative elections. macron's decision has put investors on edge. the president's party trust both the far right national rally and the left wing popular front in polls.

here is what some guests have had to say. >> this is our territory in french politics. >> it is going to be a two headed france, because the president will still be there. >> the fact that macron is extremely weekend whatever happens, so this is one of the few certainties we have at this stage. >> we are seeing in brussels is friends diminishing reputation but also influence. >> whoever will be in power will be constrained into my view by how the financial markets react. >> we see the electoral pledges of far right or far left are evolving, so they do backtrack on some of their pledges. >> rational people will prevail ultimately, because the closer we get to elections the less buzz on fundamental votes, and after the eighth of july things

will stabilize in a more clear environment. tom: let's bring in head of global market strategy on how markets are positioned ahead of this first round vote. thank you for joining us this friday morning. is the worst priced into french markets at this point? >> thank you for this invitation. the worst is not priced into because we do not know where french politics will be in a couple of months, so what we can see so far as a auxiliary reaction from the market, we have to wait. i think it investors will wait and see what will be the outcome of the elections in two weeks after the second round of the snap election. tom: and that is crucial.

we have two rounds and there will be volatility between those two rounds. the polls are suggesting that there is a strong turnout for the national rally. they get a prime minister. what does a national rally prime minister and majority in parliament for the national rally mean for the french debt market? what are we talking about in terms of the spread? >> if you look at the programs, the far left in the far right, it is crystal clear. if they succeed to apply the measures they want to do, it will have significant consequences on the debt. the deficit will continue to rise, and this is not right to see the french deficit

increasing when we already have 5.5% of debt to gdp ratio in france, so clearly what it means is in both cases increases in deficits. is it realistic to see all of these measures being implemented? the answer in my opinion is no, because when it comes to the reality of the power you have more constrained to proceed. both parties will be blocked and implementing their political measures. tom: what level for you marks a buying opportunity for french sovereign debt? >> it depends on the outcome of the elections. if we have no clear majority after the second round of elections, the current level are at an entry point, because the country -- if the new prime

minister will have room of maneuver to implement their policy, and the maneuvers will be blocked over the next months and years. it depends on the outcome of this election. it is already an entry point in my point of view. tom: i was speaking to j.p. morgan's karen award. she says she sees an opportunity in french banks. they have sold off too much, you can look at sectors like banks and start to add there. do you aligned with that view? >> yes, i do, because when you look at a segment of the market, the french some all caps they have declined by 10%, so 10% represents what we have won this year on the small caps segment, and it is clearly accelerated from a investor point of view

and reflects in my opinion an opportunity in the french stock market, and when we look at all of the indices and we exclude dividends, prices have lost all of the gains we have reported since the beginning of the year. is it fair to say the french indices has to display a 0% performance? the answer is no, so we think there are entry points even in the equity market despite the volatility of this market, because the situation is not stabilize, and if there is a chance to see stabilization in the coming weeks, clearly it will be very interesting entry points for investors. tom: mahbrouk, thank you very much indeed on the entry points i need these french markets as we way out -- weigh out the

landscape. european leaders have nominated ursula von der leyen as president for the bloc's arm. the top three jobs now confirmed by leaders. it is not over yet though. >> let's recap quickly. ursula von der leyen did get votes for member states to become the commissioner president. this is a significant step because once you establish the top three jobs you start to handout different portfolios for the rest of the eu and everything going forward. notably maloney made her displeasure well known saying it was unfair. she abstained for supporting ursula von der leyen and in this

vote. maloney saying when they wrapped i think italy needs to make its way count. italy will get what it deserves. that process forward to a couple of weeks when this goes to the european parliament and she needs a majority. that will be harder particularly since last time around she one by -- she won by the thinnest margin, nine votes. tom: that is the implications maloney and party complaint. leaders firming out adopting their priorities for the next five years. have they changed at all? >> 2019 was when you saw the green wave of green politicians being elected to the eu parliament. climate will be there in be important because the center still held in the transition is important to these political blocks, but i has fallen down

the priority letter. this is a eu about defense and defense spending and ivanka million -- and von der leyen mentioned it in her speech. another final element that is significant when we think about the by data -- power dynamics going forward, germany and france came to the table last-minute with a bunch of amendments that were trying to get into the strategic agenda, and when france and germany agree on something generally people listen. this did not happen. they were shut down by the rest of the member states. this illustrates the issues about the potential mandates both in germany and france particularly with this vote coming up this weekend for macron. tom: how the domestic politics is playing out and weakening them on the wider stage of the

eu. oliver crook with how that is transpiring as they nail down the top three candidates. coming up, biden and trump's bar on geopolitics in the first u.s. presidential debate of the campaign. we have a breakdown of those key moments next. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." it is june 28, happy friday. joe biden and donald trump raising often the first presidential debate of this year's campaign. a lot at stake geopolitically for washington, d.c. and with its allies with a major backdrop in terms of conflicts in the middle east and ukraine. competition with china and the question of nato. let's bring in kriti gupta who

was up earlier than normal. let's start with ukraine, so important for the continent of europe as we watch and see how that conflict unfolds in the durability of u.s. support. what did we learn from both of those candidates? >> a could not be more different. president biden pushing back against president trump's refusal to support ukraine. were support nato, he actively said he had an off the record conversation apparently years ago that insinuated she threatened to pull nato spending and was followed by european spending billions. president biden pushing back against that and sing would you like to leave nato altogether and leave ukraine to putin, not just the disputed territories but the entire country, to which said president trump the war

would be done if he is even inaugurated if he is a like. lots of claims being made. he is using the nato spend as a reason for being removed from the situation, i leading the fact that there is an ocean between the united states and europe but that nato spend could help fund the deficit. tom: let's listen to what both candidates had to say on nato. >> we have an ocean separating us. the european nations together have spent $100 billion or may be than that less than us. why doesn't he call them and say you have got to put up your money? i got them to put up hundreds of billions of dollars. it has a bigger impact on them because of location, because we have an ocean in between. pres. biden: i have never heard

so much foolishness. do you want to pull out of nato? what happens if, in fact, you have putin continuing to go into nato? we have an article five agreement. tom: coming to there are nato, support ukraine. the other issue geopolitically that will be central to whoever takes office is what is happening with china. do we get clarity on their stance when it comes to china and the question of tariffs? kriti: we got something. president trump talking about the fact that he wants to be tough on china. the approach is a little different. this is coming back to the deficit spend or he is saying tariffs could close the gap on the spending story in the united states. he did not go into what the tariff would look like.

10% tariff -- tom: which is across the board. kriti: we do know in previous interviews he has threatened to as high as 60%. president biden pushing back and saying as much as we do have to get tough on china it becomes an inflationary story. that is the extent of where they went on china, which is surprising especially given an international audience it was more of a pivot point. critics would say their policies on china are not that different, because president biden did not actually remove president trump's policies. tom: they said they came through from the trump administration but had not been rolled back, but other analysts would say the biden administration is taken a tougher line in terms of key technology. this is the policy, and this is

where you get into the details, there is also a question of style as well as substance, and some of the headlines today, the focus on the stumbles and missteps coming through from biden, but also the lies from former president trump. talk us through what we heard about we take away and terms of how the positioning is, the imagery and symbolism? kriti: this was a real test for both presidents. this was 90 minutes of standing. they had pen, paper, and water, no consultation, and it was a testament of endurance for president trump and president biden. it talked about their mental stamina, mental competence which resulted in an interesting conversation about how they do it golf and taking their physicals in the white house. what needs to be said is as soon

as the debate ended there was panic among the democratic party. he is a report saying there is no concern about whether biden's performance in this debate or lack of energy created -- tom: who do they go to if they have to change candidates? kriti: that is concern, because on the other side you have plenty of falsehoods and in this debate there is no live fact checking to keep the integrity of the answers and make it a civilized discourse, so things like former president trump talking about the definition of abortion with roe v. wade, president trump talking about whether or not riots in charlottesville, he is saying that was not one of the starting points. he even debates his own role in the capitol riot's saying this was a civilized and patriotic thing. a lot of things that were not fact checked in the moment, but

to your point a lot of independents are really struggling with these two choices. tom: thank you very much indeed hanging out the details on the first presidential debate. the next one in september. now to some other stories making news this friday, nokia making its biggest acquisition in years, buying infinera for $2.3 billion. it values the company at 833% premium to its average share price. it provides hardware and software to internet providers and operators. nike fell after a full year outlook. the world's largest sportswear company sees revenue declining in the mid single digits. much of the sales ms. will be due to a waek -- weak first

quarter. the ceo says they are transitioning the lineup to reignite interest. l'oreal expecting slower growth as weakness in china weighs on sales. they see the global beauty market growing between 4.5% and 5% this year. china has been a growth engine with consumer stepping up its high-end offerings. plenty more coming up including roaring kitty. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." a big data point is the pce indicator, the personal consumption expenditures index.

it is central to how the fed thinks when it should go with its first cuts with markets pricing and 45 basis points of cuts by the end of this year so far. that could adjust today. this chart showing the work that is being done in terms of pce and the growth coming through and the slowdown. bloomberg economics sees this being the slowest print yet so far this year. core pce seen increasing 0.1% versus 0.2% in the previous month, year on year slowing 2.6% versus 2.7%. bloomberg economics sees the disinflation narrative in the u.s. tolling in the months ahead. let's look at quarterly positioning with flows into those 20 year treasuries. $3.5 billion u.s. of inflows, some discussion as to whether this is the rebalancing, a safe

haven shift and stocks have outperformed bonds this quarter. before we leave you, roaring kitty back, keith gill going fundamental and posting a picture of a pooch. speculation that maybe he has got some skin in the game. ryan cohen the founder of chewy and the ceo of gamestop. markets today gets a makeover on monday. join anna edwards, kriti gupta and guy johnson. this is bloomberg. ♪

people couldn't see my potential. so i had to show them. i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. today i'm the ceo of my own company. it's the way my mind works. i have a very mechanical brain. why are we not rethinking this? i am more... i'm more than who i am on paper.

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>> good morning from london, this is a bloomberg "markets today."