>> good morning. this is "bloomberg daybreak: europe." i am tom mackenzie in london and these are the stories that cite your agenda. a majority is in doubt. the euro gains in european futures jump as france's national rally windsor first-round election but with a smaller margin than them -- wins

first-round election but with smaller margins. labor leader keir starmer tells bloomberg boosting gdp will be the focus of his government. rishi sunak says that conservatives can still win despite a 20 point gap in the polls. and top democrats rule out replacing joe biden amid calls for him to quit the 2020 for race following that disastrous debate. let's check in on the markets. the impulse around the politics of france fading into the upset around the european futures picture because the worst outcome for the markets again, according to the markets, of a majority for the national rally --

they will go for a second round on july 7. to see whether or not that story and that ian continues. european futures pointing higher by a full percentage point. the euro getting a lift as well and will get into that on the cross-asset. we build up to the vote of course. s&p futures at 5500, looking to gains of 2% and nasdaq higher by around .3%. the data out of the u.s. by the end of the close on friday pointing again, giving more ammunition to those who suggest a soft landing remains in the cards. markets pricing in around 45 basis points of cuts by the fed by the end of this year. let's flip the board and let cross-asset with a focus on the euro and on the pound. expect volatility through this week. on the politics of the u.k. and france. not a lot on treasuries but we

have nonfarm payrolls as well. that could be consequential in terms of expectations for the fed, expected to go down. strength coming through for the single current, up .4%. we will see how much volatility there is given the sustained rolling lead for the party as we lead up to that vote on july 11. more a reflection of dollar strength. to the politics of france, the euro strengthening as we mentioned after marine le pen's national rally scored that victory in the first round of france's legislative election with a smaller margin than some polls had indicated he had while president emmanuel macron and the leftist popular front maneuver to keep the far right from power. she will chase a majority in that second round vote. >> in an unambiguous vote, the

french people have demonstrated their desire to turn the page after seven years of corrosive power. we warmly thank the voters and welcome this result. this first step towards choosing an alternative is a mark of confidence which honors and obliges us. >> tonight, i call on every french person attached to the remedying of france to make the national union win against those who want to provide as, damage the public order, and flout our values. >> let's bring in bloomberg's caroline connan in paris. a big weekend for the voters of france of those. what were the key takeaways from this first round vote you? caroline: the far right clearly came on top with 33% of the votes in the first round but

that was actually slightly low our latest poll that was published on friday. this includes the far left with 28% and macron came third with 21% which was actually slightly better than expected. now a lot will depend on those so-called triangles where you have three candidates facing each other in the second round next sunday. in fact, there are triangles and more than half of the constituencies. more than 250 constituencies and there were only eight of them last time back in 2022. a lot will depend on whether those candidates who came third will actually remain withdrawn from the second round. the far left of melenchon and

the candidate from the socialist party, both called for those who came there to withdraw in order to block a national rally. we had a few polls showing that marine le pen could get an absolute majority. it's not as clear as it could have been before this first round. it is also possible that she will fall shy of a majority. >> we know of course there will be horsetrading between now and the next round of voting on july 7 and markets will be scrutinizing that. what do you expect to lineup? what are you going to be watching for in the next seven days or so? caroline: today and tomorrow are going to be the two most intense days of political bargaining at horsetrading because candidates have until tomorrow night to say whether they will run in the runoff on monday or not so that is what will those candidates actually withdraw.

or they don't. in any case, you have three potential scenarios. one is the absolute majority and then you have cohabitation on with him becoming -- with emmanuel macron. seconds and i is a hung parliament that could create gridlock with the possibility of implementing any policies over the next three years. a scenario for the markets and of course there is a third way which is that the union of the left implodes after the second round and the far left is sidelined and macron them how manages to form a new fragile majority with those moderates from the left-wing and the moderates from the right wing and obviously, that would be the most reassuring scenario for the markets in order to gain some more voters. macron ironically decided to spend the implementation of his unemployment benefits reform.

tom: so those are the different potential scenarios, different outcomes as you outlined them for us. what about potential impact longer-term term on the french deficit and the french that? -- debt? caroline: you know the national rally has watered down it program a lot to appear more means dream, more reasonable to the markets. we know of oars that they want to lower the sales tax on entity which would cost 12 billion euros but it is quite unclear when exactly they are planning to implement their other measures such as lowering the retirement age to 62 or increase salaries by 10% lowering social contributions. the program of the far left, however, is definitely more costly. 78 billion euros, according to bloomberg economics. we have measures including taxing the wealthy as a percent

of the population so potentially a scarier scenario for the markets. in any case, it is bedtime england the french deficit was already a 5.5% of gdp last year and france has been placed already in an excessive deficit procedure by the e.u. tom: caroline connan in paris outside the national assembly following of course that consequential vote and caroline will be across the story for us. as we lead up to the next vote on july 7. the market impact is there. we are feeling that today. the euro and french bond futures standing on signs of the far right national rally which one by -- or not by a small margin. let's bring in paul dobson for an analysis on this and the euro strengthening. to what end is this an unwind of the risk premium that it baked into european assets? versus optimism around the euro

in the weeks and months ahead? >> it's more about that risk premium. there is a little bit of a gain for the euro. there's some outperformance of french government bond futures relative to treasuries. maybe the market is taking away some of those bets on a worst-case scenario from a markets perspective which would be a radical swing one way or the other, right or left, in the vote, isolating the ca paving the way for policies that may, you know, trouble the deficit or trouble this stability across the euro area so insomuch as this gives the hope that there will be more of a centrist approach, more of a mainstream approach, more predictability as well, the second scenario she mentioned of a kind of hamstrung or lame duck government that can't do very much, that is being seen by the

market as something of a positive at this point and therefore, the modest but, you know, reasonably across gains for the euro. tom: with the focus on the u.s., nonfarm payrolls out later this week, we had data that suggested by the end of the week last week that there is a calling in the u.s. economy -- cullinh in the u.s. economy. does the printer just a few? what are you looking for? how consequential is that data set going to be? paul: it's very important to look at the jobs data particularly in the context of this idea that inflation is slowing and that the economy is slowing, that we are on this path toward a position where the fed can rather than has to cut interest rates later in the years go what we will be looking for is not just the decrease in the headline figures for the jobs data but also another decrease in average hourly wages. if we see that, it will take us somewhere around the lowest in three years which should be a really good sign for the fed

that that bigger inflationary pressure is starting to come out there and may, like i said, allow them the opportunity to cut interest rates anything that is important. being able to do it because you are comfortable on this stop lending scenario is a lot better than doing it because you have to slam on the brakes because you are worried about the consequences and that is what the market's goldilocks scenario is at the moment and that is what has been holding up the equities market and you know, keeping government bonds more or less in check as well so we will be watching that as well. a big upside surprise in the wage data could upset market at the end of this week. tom: the focus once again on the wage data. 190,000 being the number expected across the survey and as you say, markets still pricing in just shy of two cuts from the federal reserve by the end of this year. we will see if that adjusts on that data. paul dobson with a deep dive on the european asset moves that we are seeing on the back of the french politics and a look ahead to nonfarm payrolls. to the politics of the u.s., key democrats are rallying behind

president biden's reelection bid even as polls suggest voters are concerned by his debate performance last week against donald trump. let's get more with bloomberg's kriti gupta. what have you been watching over the weekend? where do we stand right now? kriti: it's all about what comes next. you are seeing a real concern around president biden that this concern is not new. it is just ramped up in the face of that debate but remember, even when he was talking about being reelected, there were already concerned about his age and mental well-being. he said, i am not a young man anymore but i can do this job and that seems to have rally to some support. he immediately went to new york and new jersey for a round of fundraising. first, it was meant to be a kind of victory lap but it ended up being kind of a fundraising squeeze instead. you are starting to see not only bite in reinforced his campaign bid but some of his allies reinforce it as well. they are still rumors and whispers that the likes of kamala harris, gavin newsom, josh shapiro, some of the other prominent democratic governors in the country may actually be a better bid this time around but

there's no precedent for it. it's only been two times in history and they have only been one term president really inherited the presidency when their presidents, johnson and truman at the time, were assassinated and/or died of natural causes so you are not necessarily seeing a massive president and right now, there seems to be a ticking clock because it's not the democratic convention we are waiting for. it is the ohio general ballot decision. basically you need to get on the ohio general ballot by august 7. what they have done instead is have a virtual rollcall which would make him the presumptive nominee but it would happen weeks before the democratic national convention. the problem for markets and for everyone watching his we don't know when that rollcall will be. tom: thank you very much on the latest regarding the tension within the democratic party of course following that challenge debate for the president. there is plenty more coming up of course throughout today but also throughout the week as well. on tuesday, we are going to get euro areas epi so the data and the picture around the inflation

story out of the euro area of course really consequential when you are thinking about the next steps for the ecb after of course they cut interest rates, to what extent that informs the next move spirit on thursday of course, the political attention and the focus turns to the u.k. with that election in the u.k. and that polling gap that remains of course between the incumbent labour party or the incumbent conservative party and the labour party 20 basis point moves in terms of the pole gap that remains a 20 point lead. we will see to what extent that adjust. the u.s. jobs report, we have been talking about the importance of this with the excitation that may the number will come in at 190000 and of course how that ties into the fed's next steps as well so a big week on the politics and data from. you can get more in terms of the round up the stories you need to know to get your day going in today's edition of daybreak. terminal subscribers can go to dayb for more details. coming up, keir starmer on the

priorities of a potential labor government. three days ahead of that u.k. general election, we are going to bring you some of our interview with the labor leader. that is next. this is bloomberg. ♪

>> we have seen the rise of populism and nationalism across europe, america, and other countries. it is very important that we make the case that only progressive democratic governments have the answers to the challenges that are out there. i think there are more global challenges now than there have been for many years, whether that is poverty, climate, energy, you name it. we have to join with allies across the world. -- across the will to make the positive progressive case for meeting those challenges and we have actually been doing that

already in opposition so i talk regularly to my -- across the world. we doubled down on that as a form of government because that is the important part of the reset here in the u.k. in relation to america and europe. lots of moving parts. tom: the u.k. labour leader telling bloomberg's that a win for his party in thursday's u.k. election will be the answer to rising populism or at least one answer to rising populism. keir starmer telling us about his priorities as the polls predict labor will win. a landslide victory. we will wait for the details and see what comes to pass post july 4. let's bring in lizzy burden for the details. what else did the labor leader have to say? lizzy: there are not going to be any surprise tax rises after the election the banks are worried about windfall tax but it means he's going to be

relying on growth to bring extra revenue for the treasury. of course, the institute for fiscal studies says that is a gamble and you've also got some of his own officials saying labor is going to have to reenter the customs union to achieve this 2.5% growth target. if you can't actually get the revenue from tax rises. now, we have also had rishi sunak, the prime minister, out in the last furlong of this campaign. his message being not surrender to labor. it's interesting. i think that actually, it's only in the latter stage of the campaign that you have had him fighting like an underdog, really trying to distinguish himself from boris johnson and liz truss. where was this earlier in the campaign? but he continues to be forced to defend the 14 years of conservative rule and answering for brexit and the corruption during the pandemic, but he insists he is still going to be the prime minister on friday. of worse, he has to, really, whatever the polls say.

think it is significant that over the weekend, you have seen both the sunday times in the financial times saying that really, it is time for a labor government, and actually echoing the message of philip hammond, the former chancellor who we spoke to last week, saying, yes, the conservatives could do with a bit of time in opposition to regroup but it would be unhealthy for democracy for them to be reduced to opposition. tom: really interesting as we get the endorsements from some of the main national newspapers. rishi sunak insisting conservatives can still win in the labour party warning against complacency. lizzy: that is the message from keir starmer. as you always remind me, the scores on the doors are what the undecided voters not to put their tick the labor box so that is the starmer message. what you heard in that clip him saying, actually, labor is going against the grain in europe and the u.s., it would seem, with populism rising on both side of

the atlantic. actually, a closer parallel perhaps would be reform. this party on the right wing led by nigel faraj to be a closer parallel to what is happening in europe and the u.s. i think he would be interesting to see whether nigel faraj would claim to do a better trade deal with the u.s. if it is led indeed by donald trump. tom: is international political ramifications which are really fascinating as well so that will lead up to the vote on july 4. lizzy burden, across all things politics for us, thank you very much indeed with the latest as we lead up to the general election in the u.k. to the politics of south africa, cyril ramaphosa announcing to government cabin and after more than a week of discussions. we are in johannesburg with the details. that is next. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." happy monday, july 1. cyril ramaphosa has announced his new cabinet, allocating ministerial posts to opposition politicians while also retaining some close allies. the finance minister days on, signaling continuity in south africa's economic policies for more on this, let's bring in our reporter who joins us now from johannesburg. why did it take so long for him to announce this cabinet? this is a moment of history for south africa. >> it is important to note that there is not a legal prescription that delays the period of time that the president has to announce new candidate -- cabinet. it is certainly not the norm and part of the reason it took so long is because in a government of national unity including about 10 parties, there had to be negotiations about how those

cabinets posts were going to be shared and there had been contestation between both parties about which positions should be given to the da and which positions should be retained within the agency and the democratic alliance actually wanted significant post in south africa's economic class which the agency was resisting to let go of so that is part of the reason why the negotiations took such a long time. in actual fact, the agency had initially offered the post of trade minister but then withdrew that post and it caused quite a bit if you roar -- furor, and those are part of the reasons why it took so long. tom: are the markets interpreting this announcement, the details that we now have on the south african cabinet? ntando: we have seen the rand

ready after the announcements, pointing to the fact that markets are anticipating an acceleration in key reforms that had started to gain momentum in the last administration and that is partly reinforced by the reappointment of finance minister -- of the finance minister who is walking a very tight rope and trying to get the country to deal with its debt problems. he is trying to, consolidate and some of the posts are related closely to those key reforms that south africa is trying to work on like energy and transports. if you look at south africa's situation on the power side and the logistics side, those two areas have crimped economic growth and markets would be really excited to have this government will work together to solve those solutions -- those problems. tom: thank you very much indeed.

don't miss africa amplified, by the way, which this month will be on thursday, the fourth of july. we will be looking at it be issue with interviews from industry experts including chief economist and the ceo of south africa's airlink. coming up, going to take a look at the market reaction in more detail to france's first-round vote as a national rally scores at 50 while other parties now maneuver to prevent a far right majority. that is coming up. this is bloomberg. ♪ the moment i met him i knew he was my soulmate. "soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse. well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker.

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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.

le pen ahead by a majority is in doubt. the euro gains in european futures jump as france's national rally wins with a smaller margin than some polls indicated and with three days to go until the u.k. general election, keir starmer tells bloomberg that boosting gdp will be the focus of his government. rishi sunak says the conservatives can still win despite a 20 point gap in the polls. top democrats rule out replacing joe biden amid calls for him to quit the 2020 for race following that disastrous debate. european futures pointing higher, of gains of more than one person on the backs of the -- back of the politics of france. the national rally has scored big but arguably, not the worst case scenario for these markets in terms of a majority for the national rally. the focus of course switching to

the movements behind the scenes between now and the second round vote on july 7. gains of one point -- 1% for european futures. the ftse 100 pointing to modest gains of 23 points. the s&p stateside looking to gains of .3%. mastec futures pointing higher by 74 points, up by .4%. the data out of the u.s. suggesting there is a calling to this economy but a soft landing remains in the cards. we look at the nonfarm payrolls later this week. rockets pricing in closer to cuts for the federal reserve by the end of this year. the s&p up around 14% year-to-date. let's look at the moves in treasuries and of course the euro, which is getting this morning on the back of the vote out of france. euro-dollar at 107 a pop -- a pop-up up .4%. not a lot of movement in the session. we will see how that adjusts around the data out of the u.s., worse. potentially more volatility as we lead up to the vote on my

fourth. $85 a barrel on gains coming through for oil in the session so far this monday, up .57. let's go to france and the question around how traders are positioning as they digest there's results from the first round of cap parliamentary elections. let's get the view from state street's head of equity research. how to position, how to think about the politics of france. are you relieved by what you have seen over the weekend? would you position and lean into this move on european and french futures? >> we were quite skeptical about an outlook for europe relative to the rest of the world. even before elections, even actually before the elections were called. our key point was that, i mean, european earnings outlook looks very vulnerable. europe is very cyclical economy and economy slowing everywhere. that is what central banks wanted to achieve by hiking interest rates so european

earnings were problematic to start with and then we have this huge political uncertainty. everything goes down. i will say, i read this morning is that the results, the first trial -- we don't have final results. it may be not as bad as people were worried with still, i mean, education -- it's very difficult inference. you have a choice between hang parliament and far right government so neither of those sound particularly appealing so i would probably stay out of france permit beacon buy the dip countries like italy. tom: that rationale than that france has -- france's loss could be italy's gain, what underpins a few? >> a lot of it comes from, again, i'm having my equity hat on. i do like to focus on earnings

and what earnings backdrop in italy looks a lot more constructive. italy's stock market is dominated by banks which spent the last decade getting the house in order for the european debt crisis so it took a long time but currently, italian banks are actually in decent shape. the quality of their balance sheets is quite strong. they cleaned up. they probably, i mean, they are not very vulnerable to changes in political backdrop, political risk, so that is constructive. to us, earnings backdrop is better. france, on the other hand, biggest sectors in the index are industrials, consumer discretionary, and those were suffering even without the elections that is kind of the key can and for us. tom: ok. when it comes to the u.s., if we just stay on politics for the moment and look ahead to november, course, all the focus on the weekend is whether or not joe biden remains a candidate

the democratic party and the challenges there. how do you think about the political risk in the u.s.? is it too early to start positioning around that? >> i am a little bit less concerned about u.s. political risk because what kind of -- our thinking is whoever wins the u.s. presidential election is very unlikely to have kind of the full sway. the house on the congress. again, it would be a lot of political negotiations. if trump wins, there will be a lot more drama maybe but -- more volatility. if i look at things like this, volatility is extremely low and it really seems that with the market focus, there is a benign trajectory of inflation is coming down. the next move from the central bank, market believes in soft landing so that's kind of suppresses volatility and stocks are higher.

as you know, i would be a little bit more concerned with the soft landing which is harder to achieve, but still, market is looking for -- volatility and stocks rally. tom: you still have a question mark over that soft landing although the date of last week seems to suggest that is still in the cards. if you get that soft landing scenario, it's not your base case right now, but if we do get it, what is the soft landing trade? >> that is a good way of kind of thinking, answering the question. i mean, if do believe in the soft landing, you should buy soft caps an european equities. you should buy value, industrials, materials, and that is actually the trade that investors are not making. if we look at the three custodial data, we see how investors are moving the money and those five trades are really what esters are selling. then, -- in fact, all the trades they are buying is to buy u.s.

and the biggest position to have, it's crowded camesa, but we see people edging through it and to me, that is a confirmation that overall, as i said come earnings are slowing down pretty much everywhere. it's hard to find places except for technology sector so ai created this kind of source of revenue for the sector that almost independent of what is happening with the business cycle, soft landing and hard landing. that is the source of revenue that is there, is likely continue -- to continue to be there as long as a couple of years. that is what investors are buying. they are buying the large-cap quality technology sector. tom: ok. state street head of equity research on the concentration of course still within the equity market of the u.s. around ai and technology and a bit of concern till about what is on thing in your. not that confident in terms of wanting to buy french equity so

it may be italy gains on the back of the challenges around france. thank you very much indeed on the market take into the politics of the euro zone. let's go back to the top story and get more details in terms of how this is all transpiring. marine le pen's rally scoring victory in the first round of france's legislative election. with a smaller margin than polls indicated. le pen will chase a majority while president emmanuel macron and the leftist new popular front maneuver to keep the far right from power. >> our instructions are simple, direct, and clear. not one more vote, not one more seat for the national rally. tom: let's get more from caroline connan who is outside the national assembly in paris. caroline: i'm happy to be joined by a professor of economics and

international relations from the business school. good morning from this national assembly. were you surprised by those results last night? did marine le pen do better or worse than? >> these results are more or less in line with what polling institute had told us. there may be a slight appointment in the le pen camp right now. they are slightly under according to a lot of estimates at the absolute majority. we are not at the 289 seats they would have hoped for. this is the way we expected, the way that was announced. the way that he could foresee with the european elections a few weeks ago. caroline: what is your likeliest scenario next week on july 7? are we going to see a hang parliament? are we going to see an outright majority for the pence party? what is your likeliest outcome? jeremy: there are two scenarios. scenario number one is the absolute majority with someone

handpicked by marine le pen, probably not her. so much handpicks becomes prime minister. the name of jordan is probably on everyone's minds right now. he made it clear that he would only go -- he will not only take the prime minister's spot if he had been absolute majority, and as of today, this is one scenario. there is no certainty because a lot of estimates are still below that absolute majority nine of 289 seats. jeremy: if jordan -- caroline: if jordan does become per minister, how is it going to work out? is that going to prevent marine le pen from becoming president in 2027 or is that going to help her? jeremy: the italian president of prime minister miloni in italy has been disciplined by the exercise of power in so many ways. jordan has walked back. a few of the most controversial

measures. he may take a few symbolic to satisfy his base but the italian president might be in place. the longer run, 2027, we are three years away from a presidential election. emmanuel macron ebt might be it will tire them out and make them even harder to reach the palace in 2027. this said, i'm also very interested in u.s. politics and as a u.s. political student, i would tell you, look at donald trump. his exercise of power, populism may have damaged part of the country including forces of a few. be careful with wishful thinking. caroline: you have another scenario which is very interesting. there's a lot of three-way contest. do you think that we could potentially get instead a survey of technocratic government like we had with mario draghi? jeremy: those three-way contests

would mean everyone except marine le pen's camp and getting together to try to limit the right's score next sunday and this would mean basically a hung parliament where the national front, marine le pen's party, would have a smaller majority, a relative majority in a hung parliament. in which case, all bets are off. it might be a possibility. a second italian precedent right here like the draghi president as you suggested and this means what? it means we have in france our pool of technocrats. very talented ones. it would probably not last very long but enough basically for politics to settle down and enough for basically, you know, the situation to get us out of this. would this be [speaking french]? would this be any one of these big voices we have seen in the

past that have exercised power and that could there be lights a country? i want to state i am not privy to any conversation but this is a possibility. caroline: that is very interesting. does that mean the current heavyweight bruno le maire are definitely out? jeremy: they have been branded as macron supporters and they have that legacy. i think in the short run, it is hard to imagine what their political future would look like. gabriel is incredibly young and he makes it out a couple of years and come back but really, all bets are off depending on the rest. something has got to give. we are in a political crisis. we have talked about limits of the fifth republic. something's got to give. maybe this is the transition we are witnessing but something has got to give. caroline: many thanks, professor of economics and international relations at the business school , from the national assembly with this very interesting point that we could potentially also get a technocratic government.

tom: really fascinating insights and of course describing what we are seeing in france as a political crisis. caroline connan on the ground for us outside the national assembly in paris. there's plenty more coming up including the latest in terms of a potential banking deal. bbva and its attempt to take over -- the ticking clock of time could do the biggest challenge in terms of potentially derailing that takeover offer. we will get the details on that, coming up. they with us. -- stay with us. this is bloomberg. ♪

tom: the chairman of spanish bank the bbva says there is no consideration to take over. it would be spain's biggest banking deal in decades if approved.

the chairman spoke with the opening trade anchor, kriti gupta. carlos: if for some reason were that merger not to happen, which would be unprecedented, we still believe the transaction has merit and most of the synergies -- we would be able to capture most of the synergies. >> that is based on the assumption that this gets approved or that you are able to be left with a stake in a merger. what if you are wrong? carlos: if we are wrong and shareholders decide not to tender, which i think is the key critical decision maker apart from the other decision-makers i discovered, bbva would continue with the positive momentum that the bank has. we have a 17.7 return on tangible equity in the first quarter. we have a 20% increase in value per share in the last 12 months and this has continued for a few years now.

both metrics -- we are at the top of the league among our peers but also in the other dimension that matters, growth. if we look at the grown of our low -- growth of our loan book 9.5% growth. 7%. on growth come on returns, we are top of the league and bbva would continue in that improbable scenario. good momentum, the words which we are on. carlos: one of -- >> one of the criticisms of this deal is the value of it and that this is not a juicy enough offer. have you considered raising your value? carlos: we have considered a knockout offer, a premium of 50% of the three months prior to the presentation of the transaction. on top of that from you, we are very rich. the offer is an off or in shares which means that the shareholders would participate with 16% ownership on the combined entity and that means

participating on the value of the synergies, the 850 million euro per year cost savings which represent multibillion-dollar value. 60% of that multibillion-dollar value will accrue through shareholders and maybe the summary of it all is the earnings-per-share accretion that you can calculate 27% increasing earnings-per-share for the shareholders. it is a very attractive offer that we are sure will convince the shareholders. >> no appetite to sweeten the deal? carlos: we have no intention and no need to improve the offer. it is very rich. with precedent. market is also telling us that the offer is worth more in the long run. and that is why we are not changing it. tom: bbva chairman carlos speaking to critique the there.

now to some other stories making the news this monday, creditors reached an agreement that we will see them -- that will see them take control of the i.t. services company in an event outside investor. bondholders and lenders have agreed to convert two point 9 million euros of loans and bonds and take equity, and inject new equities. existing shareholders equity will be close to zero as a result of the restructuring. bloomberg understands the u.s. justice department will charge growing with criminal fraud over two fatal 737 max crashes, leaving the playmaker to choose between pleading guilty or going to trial. if we are told the doj will also find boeing more than $240 million and order three years of corporate monitoring. a lawyer for the pressure from families says it is a sweetheart deal for the company. the rig understands that boeing has agreed to buy spirit

aerosystems in an all stock deal. blackrock is buying private capital database provider for your pin -- preqin. the founder will join as a vice chair after the deal closes. he competes with bloomberg lp, the parent company of bloomberg news. there is plenty more coming up. stay with us. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." all eyes on the european asset this morning as the national rally of rants comes in first place as expected. real questions as to whether or

not the party of marine le pen can get the majority that she says she wants. the market, a bit of a relief, a bit of risk premium being feted on the back of that. currently the single currency up .4% but the concerns of course about a national rally, the majority around the debt and of course the deficit given you have debt to gdp at around 111 sent in the deficit around 5.5% as well. let's have a look at the data coming through from china. this ties into the fortunes of the eurozone economy longer term. you are looking at the manufacturing data and this is a survey of businesses. many factoring services theater coming through. the government's data point coming in as you can see all in contractionary territory in terms of manufacturing. not a big surprise, in line with expectations. the survey was stronger but it was the outlook for future demand that has led to some question marks. he saw a lot of money moving into the debt of china, the

sovereign debt, to the point to where you have seen record lows in terms of yields on the u.s. 10 year so that is as significant as well because it has been a mixed outcome in terms of the recovery of the chinese economy. the consumer being surprised. real estate remains a challenge as well let's flip the board and get a preview of the data out of the u.s. after some of it came in this week suggesting there is is calling but household income is remaining pretty resilient. we look ahead to nonfarm payrolls and this is the small business sector. the national federation of an attention or i should say individual businesses. smaller businesses and patience at the nonfarm payrolls as we assess this is going to call to around -- cull. the unemployment rate at around 4%. markets pricing in effect this is of cuts from this federal reserve but the nonfarm payrolls data and just how the labor market of the u.s. is evolving,

really consequential, always 20 think about the next steps for this federal reserve. guy johnson and kriti gupta are going to kick off the relaunch of their show, the opening trade. they are going to bring you everything you need to know as markets open across europe every weekday morning, 7:00 a.m. london time. it kicks off next. this is bloomberg. ♪

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>> good morning from london. i'm anna edwards. we're an hour away from the opening trade. here's what you need to know. the national rally takes the lead in first right now of the first snap elections. but can the far right win a majority? we'll break down the market reaction. and the