>> this is bloomberg daybreak: europe. these are the stories that say your agenda. kristen -- christine lagarde. europe awaits the latest inflation readings. >> it will take time for us together -- us to gather data to

ensure the risks of above average inflation have passed. tim: we will speak with philip lane. wall street maps out what a second trump presidency could mean for the bond market after the supreme court ruled he has some immunity from criminal charges. democrats may formally nominate joe biden as early as this month. plus, the tale of the ev rivals. tesla sales look set to fall again as byd hits another record. european futures pointing lower after the games that came through yesterday. the focus of course on the politics in france and the u.s. we talk about how investors are evolving around the view in

terms of a potential trump presidency. indeed, we will check in on the treasury markets. it has reversed to some extent moderately in the session. european futures lower blood .2%. the ftse 100 looking to lose 31 points. shop inflation falling to his lowest level since october of 2021. s&p futures pointing to a loss of 11 points so far. nasdaq futures looking lower by around .4% after mega cap gains came through yesterday, tesla shares soaring around 6%, but moderation leading into the open. let's have a look cross asset. we talk about the inflation story in the euro zone. you are expecting that number to come down around 215%. the data out around 10 a.m. u.k. time. we are hearing from christine lagarde expectations the ecb will pause in the rate cutting cycle at least this month. 4.33% on the 10 year as markets adjusted to the prospects of a

potential trump presidency. euro-dollar on 1.07. it was impacted by the politics of france yesterday. again yesterday and the session. currently down .1%. more dollar strength coming through. brent crude $86 a barrel, gaining .2%, partly on the geopolitics as we look to a potential escalation between has below -- between hezbollah and israel and also the supply constraints in hurricane beryl, which has been upgraded to a category five. gold trading down .2%. let's cross over to asia, where avril hong is in singapore. what's standing out to you this morning? avril: i think the dominant theme is how traders are bracing for this policy of trump 2.0. it is playing out in those u.s. yields. the greenback has implications.

we are seeing across stocks, although the dominant theme of a possibility of trump coming back is back of mind, we are seeing a divergent performance among equities. the nikkei helped along by the financial related names as expectations of a boj rate hike potentially helping profitability. in south korea, the drag coming through from automakers stocks. hong kong back from a public holiday. the hung saying is recovering -- the hong kong index recovering some lost ground. the dominant concern for these chinese mainly markets is still about the economy. the stock market has been badly beaten up along with the housing market but the outlier is what we are seeing in chinese bond space. we saw that rally yesterday

taking those yields to record lows. the pboc was coming through with an announcement without the bonds raised speculation that it could go on to sell securities to curb the rally in chinese bonds. for context, it does not want bonds to be moving in one direction. today, we are seeing that rally resuming in chinese bonds. they have not just been outperforming versus other asset classes. there's also the outperformance versus global peers. this is underpinned by concerns related to the chinese economy and how inflation in china -- the picture there is different compared to some of these other economies. let's take a look at how this all -- at how all this concern is playing out in china. we got the tweet from the pboc offshore sitting well above 730 on the onshore yen. weakest levels since the weakest

-- since last year. the yen has been on the back foot. the story of dollar strength. the korean won, worst-performing currency today in the region. this is after an inflation print that showed further cooling, raising bets we will see be ok rate cuts as soon august. tim: avril hong in singapore with a check on the markets, expectations may be inflation is slowing more quickly than expected. talking of inflation and central banks, christine lagarde says the bank there does not yet have sufficient evidence that inflation threats have passed, feeding expectations that officials will take a break from cutting interest rates this month. lagarde was speaking at the ecb's annual central banking forum in sintra in portugal.

>> we are still facing several uncertainties regarding future inflation, especially in terms of how the nexus of profits will evolve and whether the economy will be hit by new supply-side shocks. it will take time for us to gather sufficient data to be certain that the risks of above target inflation have passed. tim: let's get more from bloomberg's alex weber, in sintra for us. what else did christine lagarde have to say and is at the understanding of those on the ground at sintra that the door is now closed to a potential additional cut from the ecb this month? alex: it was in many ways a backwards looking speech from lagarde, which shows you policymakers are still coming to terms with what happened over the past two or three years, and this interest rate cycle has been unusual. that's really also the sense we get when we talk about what's happening next.

the situation at the moment is strange in a way because we have interest rates near record levels. the labor market is still strong. the ecb has an outlook which says they will hit 2% next year, but officials are cautious and want to see the economic data confirms to this assumption. that's why lagarde struck this cautious tone, seemed to imply the door was indeed closed to a cut in july, and that's also the sense we are getting from other officials. they want to see how the data develops and take it step-by-step. there's really no rush because the labor market is so strong. there's not a risk that the economy is degrading so they can take this step-by-step. tim: caution and a seeming consensus around the need to proceed with caution. what else are you hearing and expecting to glean from this forum in sintra, alex?

>> there's going to be more soul-searching this morning.we are going to have a session on the drivers of this post-pandemic inflation surge. there's a debate going on whether it was driven by demand or supply. that's really the theme of this whole conference. there's also a session on geopolitics, which is a very topical -- which is very topical at the moment. we have potential threats coming from around the world, also from within the euro zone, of course. the situation in france is a topic on them -- on the sidelines. it seems they are not too concerned about the situation at the moment but this is also something this going to come up again. tim: bloomberg's euro area economy reporter on the soul-searching by the ecb at that sintra forum, bloomberg's alex weber. thank you very much indeed. he will bring us that reporting and analysis from the next few days.

don't miss our exclusive interview with ecb chief economist philip lane. that's at 6:40 a.m. u.k. time. it's an exclusive. you need to tune in for that if you want to clear understanding of where the ecb stands on the question of inflation and the next steps for rates. euro area cpi out at 10 a.m. u.k. time today. at this point, let's bring in mary nicola from our mliv team. how much progress are we expecting torts that 2% target for the ecb and how much conviction do we have that inflation is moving in a sustainable way towards that 2% target? mary: if yesterday's numbers out of germany were any indication, it looks like inflation is stabilizing, at least the headline numbers. the key thing is services and how inflation of services will unwind, but overall, the

trajectory looks positive, indicating we could see further downside on inflation, indicating we could see concern from the ecb easing heading into at least september, so going into september, they will have a few more readings before they decide on whether or not to cut interest rates. of course, july is probably likely off the table, but of course it puts the onus on september. and a few more readings where we see the stability in inflation could push the ecb into the direction and into cutting a little bit more. tim: mary, switching focus to the u.s., then, this is fascinating in terms of how we link the market moves, particularly in the bond markets, to that disastrous debate with president biden and that momentous ruling from the supreme court they came through yesterday and -- that came through yesterday and the market pricing in a potential trump victory in november.

what could that mean for inflation as markets adjusted that potential reality? mary: one of the main things we are seeing from the bond market is showing that upward pressure on yields. the market is looking at a trump presidency has more of a ballooning fiscal deficit, but it's worth keeping in mind in a matter which party wins, it looks like fiscal prudence is completely out the window. two different parties have shown -- that over the next few years -- the last few years. it's a question of what parties -- what the two different parties will spend on. republicans might cut taxes while democrats might expand spending overall on medicare, social security, etc. upper pressure will persist on yields because of that, but also adding to the inflationary pressure is a trump presidency

and of course the expectation of potential tariffs on imports. and that essentially is going to fuel expectations of what inflation expectations could become and what could happen potentially with the fed and the likelihood of actually being more prudent than originally, so there is a lot to impact here in terms of what are the potential applications bond yields, but it looks like the longer end will be impacted as we inch closer to the elections, which is still quite a few months away. tim: mary nicola, thank you very much indeed. from bloomberg mliv on the analysis as we look at the 30 year stateside at 4.6 percent. the selloff easing somewhat, not making up at the losses yesterday. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak.

terminal subscribers can go to da why bigo -- daybgo. how markets are adjusting to the prospects of a potential trump presidency in november and what that would mean. we have been discussing the inflationary input if you go through with his pledge is around tariffs, immigration and tax cuts, just some of the factors that could feed into higher prices. in terms of the day ahead story, let's focus on inflation. we have been getting a preview with mary in terms of what comes out in terms of the price pressure. 10 a.m. u.k. time, expected to ease headline year on year to around 2.5%. we will see if this confirmed. bloomberg economics things we will get back to that target for the ecb by the second half of this year. that data dropping 10 a.m. u.k. time. meanwhile, the focus on the u.s. at 3 p.m. u.k. time, the jobs data. we know this is important for the fed.

jay powell scrutinizes this, potentially -- especially the ratio between unemployment and the jobless rate. job openings coming through at 3 p.m. u.k. time in terms of what extent that will build into the picture for the fed. on the corporate front after that record number of deliveries, likely a different story for tesla, particularly in the chinese market, with second-quarter deliveries expected to be challenged again. that data later today. we have a preview of that in the next few minutes. coming up, joe biden nomination could be rushed forward to as soon as the middle of this month. that story is next. this is bloomberg. ♪

tim: welcome back to bloomberg

daybreak europe. bloomberg has learned the democratic national committee could formally nominate joe biden as early as mid july. kriti gupta has more. what is the rationale for this? what does it mean on the back of that disastrous debate for the president? we know that internally they have been talking about possibly replacing him, a lot of voices coming out and behind the scenes as well, but now they are footing -- they are putting out this date. kriti: it seems like they are pulling forward the date but in actuality this has been going along -- going on for a while, particularly because of the ballot decision-making. to get on the ballot in november you have to meet certain qualifications and you have to do them or file for them in certain states in august, so

north and south dakota, august 13 and 14, ohio august 7, so the party newly would have to decide on a nominee before the ballot deadline even if it was preemptive to the actual democratic conviction itself -- convention itself. this was not an issue when biden was the presumptive nominee and still remains the present of nominee. the date and time me -- and the timing did not matter. however, now, it seems like with the panic you are referring to around whether or not joe biden is actually the best person to represent the democratic party in this race, the timing has been solidified. that's what i think people think our reading as being pulled forward to around july 21. the timing is crucial here because at the same time you have in mid july this virtual rollcall, which is expected by joe biden to become again the official presumptive nominee. he already has all the electoral votes he needs by law.

all those electoral votes are already part of his base, if you will. that also comes just a week after, if july 21 is the day, of president trump's sentencing. so there are weeks to come of geopolitical events. tim: we will see if it closes down a debate and the rancor around joe biden, whether they should be considering a different candidate. meanwhile, the president coming out and slamming in pretty direct terms this supreme court decision, which was split on ideological grounds, around immunity for some areas of official acts of the president. let's take a listen. >> no one is above the law, not even the president of the united states, but today's supreme court decision on presidential immunity, that fundament lee changed for all -- that fundamentally changed for all practical purposes. today's decision means there are virtually no limits on what a

president can do. tim: president joe biden saying no one is above the law. the supreme court ruling suggests that the president is indeed in some areas above the law. what does it mean? kriti: it was a momentous decision. this was on a court case, several. there are several of these but this was related to his efforts to overturn the results of the 2020 election. this went to the supreme court, asking about the level of his immunity. the initial question was does he have a legal field, some sort of -- legal shield, some sort of diplomatic immunity because he was president? the serene court said they are asking the wrong president. the question was what did he do in his capacity as president. they have kicked it down to lower courts. they are saying if you separate the two, that's when you can know what the convictions actually look like or what the

charges look like, but the supreme court basically saying there are some things he could have done, things like speaking to some of the electoral voters, for example, speaking to the attorney general. those were done in and act as the president to potentially -- not confirmed -- protect democracy. tim: they will have to work through what is defined as personal and what official. that of course delays the court decision -- or when and if this goes to court, but ultimately, this could be a president who is in power biden, so it seems like this case is standing on very thin foundations at this point. kriti: timing is everything here. this is being kicked back down to lower courts to decide what that separation looks like. the district federal judge overlooking this says she now has a couple weeks, potentially months, to go through with it. she has said in previous proceedings that you need about two or three months of prep time

for a trial it takes two to three months. that's six months of just the trial. that's separate from parsing out what is official and what's private. do the math again and you are not going to hit november 5 even in terms of the start of the trial date, much less the end. tim: it will be interesting to see how the polls reflect this. this ruling going in his favor so we will see how that reflects in terms of how the polling shifts. kriti gupta with a breakdown of a historic day for the supreme court in terms of how this ties into the race leading up to november. thank you very much indeed. anchor on the opening trade. coming up, a lawsuit accusing roaring kitty has been dropped mysteriously. the details on that next. this is bloomberg. ♪

tim: welcome back to bloomberg daybreak: europe. now to some other stories making news today. this is potentially a really impactful. hurricane beryl has reached category five strength as it has across the caribbean for jamaica, the earliest point in the year that an atlantic storm has reached that strength ever. the u.s. national hurricane center says maximum sustained winds have increased to around 260 kilometers per hour with even higher gusts. this story is evolving. it's having an impact on the oil markets. we check in on brent now and a bti. there's the geopolitics. there's the clash on the northern border of israel and lebanon. we continue to monitor that. tensions between israel and hezbollah currently -- certainly

a key concern. also the potential impact of hurricane beryl, now a category five. brent up .2%, wti closing in at $83.51. close to $87 a barrel on brent, a two month time. we will continue to monitor oil prices on the back of the geopolitics and hurricane beryl. a fraud lawsuit against stock influencer keith gill has been dropped within days of its filing. it accused gill of engaging in a pump and dump scheme. gill was one of the faces of the 2021 meme stock craze and reemerged in may with new posts about holdings in gamestop. coming up, byd sells a record number of cars in the second quarter. tesla, however, is struggling to accelerate. the price cutting story, the competition in 19 chinese

market, the divergence -- in that key chinese market, the divergence between byd and tesla. we get a preview next of what that means in terms of this rivalry. stay with us. this is bloomberg. ♪

♪ >> good morning, this is bloomberg and these are the stories that set your agenda. the ecb could pause rate cuts as

europe awaits inflation. >> it will take time to gather data to be certain that risks have passed. tom: we will speak with chief economist in the next few minutes and wall street maps out what a donald trump presidential victory could mean for the bond market and democrats may nominate joe biden this month. tesla sales are set to fall as byd hits another record, that story in the next minute. european futures .2 modest losses. dollar strength on the back of political expectations leading

up to november. not pairing losses. ftse 100 is low, inflation up to levels we have not seen since 2021. s&p futures lower. mega losses of 60 points. treasuries in vocus on this crucial assessment that trump stands a better chance. risks of a trump presidency, 450 on the tenure. euro-dollar soft, brent crude at levels we have not seen in months.

storms across the atlantic. gold gains 13%. let's get to tesla, byd sold a record number of cars in the second quarter. price cuts stoked consumers. let's bring in danny lee in hong kong. shares trading lower, what do you make of that? not much advertising for tesla at the euros. investors are cautious. >> yeah, investors are looking to see if the momentum can continue into the third quarter and the verdict is maybe not because of the low season summer

sales and automakers cutting prices to stoke demand and so byd who have had to cut, not good news because if they cut the rest of the industry has to cut so investors are taking money off the table. tom: what is your assessment in terms of byd vesting tesla when it comes to electric vehicles? danny: the -- the -- the -- the matchup is close. tesla's quarterly numbers, that is the average estimate.

for byd we know the answer and tesla has a lot of downward momentum, so if they miss by a small margin they could be overtaken by byd as the biggest seller of electric vehicles. tom: we will get the numbers today, what are we expecting, how bad or challenging is the most recent quarter likely to have been? danny: we would like to see another drop in sales, that is a rare time it has happened but for tesla, they are running out of excuses to explain away falling sales and you have to look at the lineup. it is stale. as elon musk warned, they would see a down year on sales.

downward picture should not be too much of a surprise. tom: asia transport reporter danny lee with the preview of tesla sales numbers later today, thank you, indeed. antitrust enforcers in france are preparing to charge nvidia with anti-competitive practices. france would be the first country to take such a step. they raided a business suspected of anticompetitive processes. nvidia has been contacted for comment. french political groups have reached out to voters as the battle for the second round of the election turns into a scramble for parliamentary seats.

there were tv interviews amid course trading for alliances. switching to the u.k., inflation falling close to zero for the first time since 2021. prices were 0.2% higher, down from may due to discounting items like tv is a fall in inflation. u.k. voters will be off to the polls on thursday. inflation data not a benefit. the polls suggest they have not change the dynamic. one challenge is universities. stagnant fees are squeezing and

losing students. universities are calling for swift action. >> we need to increase fees in line with inflation and this is not money students pay upfront, this is a gradual repayment. we need a change from 9000 and four that there needs a wider settlement with whichever party is the government. tom: caroline hepker has a podcast out today and joins us for this. a success story, what led to the problems? caroline: perhaps this is important because of skills and growth. student fees paid by graduates

have remained stagnant and a dramatic decline in international students because of changes to visas and you've got the office saying out of england, 40% will run a budget deficit so we spent time thinking about higher education which is crucial to the services economy. helen and i put together a podcast with lord willits who was the president. he regrets not indexing those fees. there will need to be change increasing the fees every year or so we've spoken to him and vice chancellor's. tom: nicely -- nicely named.

it is controversial, raising -- raising prices and the ticket. there is a need to address the funding gap. what is in the manifestoes of the parties? are they looking to address this? caroline: they promised little and that is the problem. they talk about securing the future but they do not say how or assign any funding. they said they would drop tuition fees. it was a hot political issue and it caused protests. they've dropped that pledge but they are not saying how they will resolve the issue and conservatives have not pledged money. the issue is running alongside this is the idea of increasing

apprentices, talking about scrapping ripoff degrees is the terminology that the sector dislikes hearing and yet we got a separate piece from our colleague making -- looking at employment data that shows university degrees are something that universities want even more in the u.k. and the push may go into reverse even though businesses have talked about dropping. tom: a deep dive. caroline on that sector for the u.k. as we run up to the thursday election. coming up, our interview with chief economist philip lane next. stay tuned, this is bloomberg. ♪

♪ tom: ecb governing council member says when they spoke to bloomberg at the ecb forum that there will be more than two rate cuts. >> we are talking about small deviations and we believe the economy will recover. we have uncertainty. tom: let's crossover with bloomberg's francine and an essential interview. francine: i'm delighted to be

joined by philip lane. thank you for joining us. there is election drama in france. does that complicate the euro zone economy? >> round number two is next sunday so let's see the plans for the future. we will have to see what the government decides. we have a fiscal framework and advocated that all governments should be promoting fast growth, support banking so let's see what the government decides. >> are you worried about the

spread between german and french? philip: it is the market repricing so i think there are elections all the time. their movements all the time. france is an important country but this looks like repricing. francine: so you don't feel the need to talk? >> it is important and we have transmission protections but this is important in disorderly adjustment and this is an orderly adjustment, important that we let the market reprice.

francine: does it make a difference into some of these things? philip: i think it remains important but of course the next six months and then it will be runoff but we have a framework so i think we know the market will reprice and we know the condition for the ecb. we are -- what we said in june, we will be into early next year and there is a lot of foundations in the movement, we see inflation come down next year and early indications are

in line. >> what does that look like? >> that's a natural question. under baseline of course we will not remain where we are. we have eight meetings between now and next year. this time next year we are going to be looking at target. being at target is not where we are going to be but the timeline will depend essentially, looking for extra confidence about the disinflation and the key issue

is services inflation remaining the outlier. hi services inflation, a legacy of rapid disinflation or is there a persistent element? we need to take time to work. francine: do you see to cuts this year? philip: i don't think this is a very interesting question. this is not the natural way to divide monetary policy and the market has reprice the lot so

current pricing does not add value. coming back to lagarde's speech is we have to look at the data and will we can learn from gdp data. we will have a corporate telephone survey with the firms for early indication. we have surveys which let us know about small enterprises. we have a lot of soft data flags and updating our view about the economy next year, that is important for the september forecast. francine: do you think every meeting is live? >> it is live but it is fair to

say it will be live in assessing what surveys tell us, how is our attitude updated? and the questions are on the economic side. corporate's, what do they see from customers? is a live meeting but june data, what i've said is we still have question but it is not an outside surprise. it is baseline and we need extra time. it is important to map a

productive meeting two weeks from now. >> how -- how -- how -- how does the fed complicate things? there is always a gravitational pull. >> i disagree because what is going on has multiple effects. exchange rate works in one direction so in terms of things we can talk about in the spillover has an influence on our policy. >> there is a belief that when you start cutting you cut. you continue cutting.

is this cycle different? philip: as i said we have an lesion projection second half of next year and that will not happen if we remain at 375 so as you said, the world has lots of things going on, let's see what the world brings us so the overall pace and i think lagarde said it, the traditional reason to cut rapidly is weakening economy, rising unemployment and you move quickly. right now the economy is growing in the labor market has low unemployment so we have an

opportunity right now to take time firm the upside risks are contained and the urgency is not there but this is something where that could change and so we are keeping her eyes on the economy, labor market, overall growth in the economy because that is a leading indicator for inflation and our focal point. francine: that was chief economist philip lane. plenty more throughout the day. tom: thank you very much indeed. on the terminal lane said june inflation will not answer questions on services. indeed. this is bloomberg. ♪

♪ tom: welcome back. job openings data expected below 8 million. they focus on the ratio of openings to unemployment at levels below the pandemic. plenty more coming up indeed including the opening trade. this is bloomberg. ♪ sandals rhythm and blues caribbean sale is now on. visit sandals.com or call 1-800-sandals.

>> good morning, we are one hour away from the opening trade. lagarde fuels speculation saying she does not have evidence inflation has passed. live at the bank forum