-- as more signs point to the fed and ecb cutting rates in september, with christine lagarde saying the next ecb meeting is white netflix crushes estimates, adding 8 million customers in the second quarter, extending its lead over rivals. we will break down the numbers for you. ♪ lizzy: a very good morning. welcome to friday. it is "bloomberg daybreak: europe." and we have lots to digest in

the markets this morning. you got the optimism for fed cuts, mounting speculation over joe biden and his candidacy in the presidential race and you've got the geopolitical risk bubbling away in the background. as a look to the futures picture , pretty flat on both sides of the pond as we go towards the final session of the week. you had a bit of a loss of a major giant on u.s. stocks yesterday but the optimism for fed cuts boosting some of the smaller stocks yesterday. if you flip to the cross asset picture, you can see that the two-y treasury yieldear has been pretty steady this morgue. you had brent declining -- this morning. you had brent declining on these concerns. there is the two year yield at 4.48 percent this morning, euro-dollar at 1.08. you had christine lagarde trying to convince traders that the september meeting is wide open

for the ecb. it kind of fell on deaf ears at first. traders very convinced that september is in for a rate cut. some officials actually reckon there could be only one more cut this year. euro-dollar lower this morning. copper, just, we have it, it's on for its worst week since 2022. iron ore taking a blow as well. do we see this in the open for the ftse 100 miners? let's get over to asia. we have avril hong standing by and singapore studio -- in the singapore studio. what's happening where you are? avril: we are seeing asia stocks and currencies really getting beaten today, tracking wall street amid concerns about economic conditions overshadowed their rate cut optimism.

we also have lingering worries about u.s. or restrictions on ships potentially and the likes of tsmc feeling to rebound despite knocking things out of the park yesterday with its earnings. we also had china's readout coming in really vague, underwhelming investors. the csi 300 is in the green. the national team seems to be at work with the etf's that it favors seeing a pickup in activity. what was also interesting is as we watched the speech from the former, he did not seem as, you know, ramping up of the rhetoric towards china, did not single out or mention specifically the yen. these are two currencies that he did touch on in interviews previously so it's interesting the move we see today. the yen, the yen both weaker. dollar-yen looks like it could actually close out for a second week below the 160 level here as

well, despite weakening slightly today. lizzy? >> thank you for that update on asia markets. we are going to get back to the u.s. politics now, of course, having a market affect. president joe biden's grasp on the democratic presidential nomination appears to be slipping as he weighs increasingly public warnings from his party top lawmakers. he is currently in isolation for a covid-19 infection at his delaware beach house and we can get more now from kriti gupta. i do wonder if biden can be afford to be out sick this long and the health of the campaign given the state of his health? kriti: the health is, of course, a number one priority for the campaign, for i would save the entire country. on top of that, he's also dealing with calls to step down altogether so this does not help any concerns about his mental acuity. the developments you see in the last 24 hours really is your starring to see more senior officials. the latest report coming out of

the washington post is that president obama himself is talking to some top democrats and pushing them to kind of convince president biden to step down, simply because they believe he does not have what it takes. this adds, of course, to the chorus of nancy pelosi, chuck schumer, and hakeem jeffries, and the most senior democrats in the house and senate. now you are also getting more and more people speaking from the senate as well. this is three people in three pieces. we did not actually see that kind of push. remember, president obama did not even endorse joe biden as a candidate back in 2016, especially when he was running with former secretary hillary clinton potentially in the mix, where he did give his sort of undying support for her. but he did not give the same kind of support for joe biden. the fact you are starting to see obama weigh in on this, at least reportedly. there is a question of just how long president biden has to stay

in office. there is speculation and media reports that he could step down in a few days or over the weekend. lizzy: let's talk about the republican national convention as well. we had donald trump speaking in the past couple of hours. he's been formally nominated to the ticket. this is his first time speaking publicly since the assassination attempt last weekend. total theater. just take a listen to this. pres. trump: if i had not moved my head at that very last instant, the assassin's bullet would have perfectly hit its mark and i would not be here tonight. we would not be together. lizzy: i thought that it was interesting that he promised action against electric vehicles from day one, despite elon musk just backing him. i wonder what stood out to you

in terms of policy from the speech? kriti: let's start with that very surreal moment, which of course, is a very sobering moment for a lot of people on both sides of the aisle. not only was a former presidential candidate, but a former president had an assassination on his life. a very serious moment for the country in terms of, where do we go from here? what does gun control look like? and just simply defective how divided politics are and the fact that there's been commentary from both sides of the aisle that anything needs to be done to stop president trump. what does anything mean? a lot happening and he's handling it quite in stride. not a ton of details in terms of what is looking for. this is a stark contrast from what we heard from j.d. vance, talking about being tough on china, pulling eight out of ukraine, bridging manufacturing jobs -- pulling aid out of ukraine,

bringing manufacturing jobs back to the u.s. a lot of economists saying his second term might not look like the first term in terms of he's far more experienced and is looking to be taken seriously, simply because he cannot run for a third term. the way he can secure his legacy is by taking the economic seriously, addressing the deficit. lizzy: that's the economics but really more of the theater than policy and that speech. i am sure i saw some people wearing an ear bandage as a pro-trump kind of prop. let's get back to the fed story. officials are ready to cut interest rates in september amid growing confidence that price stability is within sight. while risk to the labor market have grown. let's get more from our markets live executive editor, mark cudmore, now. we got a lot of fed speak on the docket for later today but we have been digesting the jobs

data. we've had mary daly say the recent inflation data has been good but the fed is not there yet tackling inflation. how convinced are you now that september is on for a fed cup? mark: arctic september -- fed cut? mark: i think september is the base case. we are about to go into the fed blackout period. i think they are nervous that speculation could to ramp up next week. i think if we do get bad data next week, we get pmi's, for example, the speculation toward a july cut could really increase with no ability to push back. that said, i don't think there's a cut coming in july. i think it's sensible to price in a comfortable number. the fact that we are pricing -- price in a cut for september. i think there's a chance for yields to rise. we have six weeks to go before that meeting. we've got about two full month

spring much before the meeting. we might get enough good data were people might go maybe september is too early for a cut. the idea that we're definitely starting the easing cycle is misplaced even though it's right to price one cut for now. it's unlikely the narrative is going to change on that one cut in the next two weeks until that july fed meeting at least. lizzy: pouring cold water on that optimism and little bit there, mark. but let's talk about the ecb. they had the meeting yesterday in frankfurt. officials said to be considering whether another cut is feasible in 2024, as the inflation pressures still linger. we have christine lagarde yesterday keeping the interest rate, the deposit rate on hold. but her refusing to commit to a possible rate cut in september. take a listen. christine: the question of september and what we do september is wide open and will

be determined on the basis of all the data that we will be receiving. . there is no predetermined path. and that was very strongly endorsed by the governing council. lizzy: so, caution from christine lagarde. it felt very much that she had been burned by the experience of over-telegraphing that june cut. mark, first i felt like the market was not convinced by the question. i wonder if you think it's fair to say that with the help of our reporting, that now christine lagarde has landed around september in the market? mark: i think the market does believe it is data dependent. i agree with you, may got scarred by over committing to june. but i don't think it's a shock. i don't think that's particularly stunning news. the fact the market is still pricing in an 80% chance of a rate cut is because the state of the european economy and the fact that the ecb does have a

dovish reaction function. it's the same thing with the fed pricing as fully pricing in a cut for september. it does not mean their pre-committed. it means we've got a dovish reaction function, the data is pointing that way. it's the same for the ecb. this is not about it's not priced at 80% because the ecb is precommitted to it. it's priced at 80% because the ecb is a dovish central bank and the data has implied that's a likely ability to be able to cut again in september. lizzy: interesting. our markets live executive editor, mark cudmore, we thank you for that analysis. netflix shares are a touch lower in late trade, even after the streaming giant poster blowup subscription numbers for the stage posted blowout subscription numbers for the second quarter. why didn't we see a pop after the bell? >> well, it really came down to the guidance that the company gave. because as you said, second

quarter subscription numbers, it was sorta blowout. 8 million new people signing up for the platform in the last few months. it was that lighter third-quarter revenue guidance that certain played into the after hours move. they are seeing growth at around 14%. the estimate from wall street had been for a touch over 15% is dead. i was speaking to -- instead. i was speaking to bloomberg intelligence. there were same from a financial perspective, fundamental perspective, from a competition perspective, netflix has never been in better shape. lizzy: that's interesting. i'll wonder if the fact that they are planning to stop reporting subscriber numbers next year suggests there is something to hide on the horizon. what's the outlook going forward? >> that's exactly it. this is again what i spoke to bloomberg intelligence about early, was just of the challenge with netflix is going to come down to how to model the company. because investors are really

grappling with the idea that subscription numbers are not going to reported into 2025 or starting 2025, so it's going to be really difficult to ascertain not only how many new people have signed up, weather if you do see higher revenue, is that coming from more people on the platform? is it due to price increases? common people are using the advertising platform instead, or that model? really difficult for wall street to grapple with and what bloomberg intelligence has highlighted as the biggest risk facing metrics. lizzy: annabelle droulers -- facing netflix. lizzy: annabelle droulers we thank you for the analysis. coming up, israel is set to be considering transferring control of the rafah crossing to european union and palestinians. we will have the latest on the israel-hamas war, next. this is bloomberg. ♪

♪ lizzy: welcome back to "bloomberg daybreak: europe." i want to bring you some breaking news from the middle east. this is thatiran-backed houthis have targeted tel aviv with a new type of drone that cannot be targeted by radar systems. this is according to the group's spokesperson in a video posted on x. the houthis have vowed to target tel aviv again as well as other areas in israel. we can also look at the other developments in the middle east now with joumanna bercetche, "horizons" anchor from dubai. we have israel officials said to be considering transferring control of gaza's rafah crossing to the eu as well as palestinians. sources tell bloomberg officials they are in talks with the u.s. and eu about the proposal.

if it's enacted, it could foreshadow and enter the israeli-hamas conflict. let's bring in anchor joumanna bercetche. what's the latest? joumanna: bloomberg reporting that israeli officials having these conversations over the potential handing over, transferring control of the raw for border crossing back to the eu and palestinian officials. unclear which palestinian officials at this point. it's worth flagging that the european union did have oversight of the crossing before 2007. after 2007, they ceded control to hamas. it seems to be one step in the right direction towards a potential cease-fire deal because it's very unlikely that is really officials or even the eu would agree to the reopening of that crossing in the absence of a cease-fire deal and some normalcy on the ground. from a humanitarian perspective, a very important crossing that

was closed back in may. the europeans have been pushing aggressively diplomatically to reopen the crossing to allow and enable more supplies to come into the palestinian territories given the acute food shortages on the grounds. the issue is that the prime minister, benjamin netanyahu, has been adamantly opposed to seating over control of that border crossing, which leaves analyst to think that the fact that they are having these discussions indicates that maybe they are getting closer to agreeing some of the terms of that cease-fire deal. lizzy: i just want to look ahead to benjamin netanyahu's visit to washington next week. you've had knesset two-state solution to this conflict despite 3/4 of the un backing it, joe biden expected to push for it in washington. what's your view? joumanna: this speech is going to be pivotal. very controversial as well.

p.m. benjamin netanyahu will be fined to the u.s. to deliver the speech to congress on july tourney for. there's a lot of pressure on him from the international -- july 24. there's a lot of pressure on him from the international community, u.s., eu. the united nations encouraging him to get and agree to this cease-fire proposal put forward by biden about a month ago. you will remember, it had several phases. . but most importantly, domestically as well, pressure is building. the families of hostages are saying they do not want him to fly to the u.s. for agreeing to a deal that secures the release of hostages. even the leader of the opposition party cindy needs to cancel that address to congress in the absence of agreeing to a deal. there is optimism internally. if you looked at some of the israeli markets, for example, just in the last month you seen a stabilization of the shekel, a rebound in local bonds. they were down 7% in the first half of the year.

you are seeing more outperformance in the israeli equity markets, which tells you as well that the investment community are also clinging onto the hope that maybe we are getting closer to the cease-fire deal getting pushed over the line. lizzy: really interesting. of course, it will be a test of international influence for joe biden as well been benjamin netanyahu visits washington. "horizons middle east and africa" anchor joumanna bercetche, thank you for the analysis. we are going to go to the u.k. how realistic are the new labor government's green ambitions? we will give you a deep dive on the labour government's path to net zero, next. this is bloomberg. ♪

♪ >> our plans to grow the economy depend on businesses and investors choosing britain as a

place to invest. i want investors to look at britain and see a country that has a stable government with a clear mandate to grow the economy and chooses britain as a stable place to invest in an increasingly volatile and uncertain world. lizzy: that was u.k. chancellor of the exchequer rachel reeves. we will bring you much more of that exclusive conversation later in the program. stand in the u.k., earlier this week, we had the king's speech setting out the new u.k. government priorities for this parliamentary session. the labour party's green ambitions are going to be up to the crucial in shaping the country's path to net zero. here to tell us more is our head of energy regional transition bloomberg nef. we had rishi sunak in the last conservative government and kind of criticism that he had been stepping away from the net zero target.

what are the big changes we are likely to see from this new government? >> yes, well, good morning, lizzy. the biggest headline ambition the labor government will be targeting is this clean power by 2030 goal. within that target, there are a few capacities they are setting for the wind and solar sectors as well as extending the lifetime of nuclear assets. the most ambitious stretch goal within that is for the offshore wind sector. they want to quadruple offshore wind capacity by 2030, compared to what labor wants to do which is nearly 60 gigawatts. it will be difficult to get that sector to that step of innovation without a change in policies. while this is really good news for the offshore wind industry, developers and investors that are interested in the sector, it's going to be really challenging to do that within the timeframe that labour i targeting. slizzy: are there any other

places were actually they are falling short on ambition? >> i think there is one very obvious one. the heating sector. there's a lot of traction around low carbon heating technologies across european markets at the moment so heat pump installations have been growing rapidly across the region. we see per thousand people, eigh t installed in france lester. the u.k. is just that one per thousand people so we are really lagging behind. that's one obvious area. another second quick one is just on the hydrogen side. the labor government wants to get to 10 take a lot of electrolyzer capacity to produce green hydrogen by 2030. that compares with just two gigawatts capacity by 2030. without investment, they will struggle to deliver that goal. lizzy: we have across europe seen some cynicism when it comes to net zero goals and energy security. is the u.k. bucking the trend? >> i think so. they are bringing forward the target to reduce the sales of

internal combustion engines back to 2030 from 2035, which is what the european union wants. another example is they want to introduce this carbon border adjustment mechanism. that has a more ambitious scope than what the european union is targeting. potentially bucking the trend. lizzy: really interesting. i recommend that report on the terminal. a deep dive into those ambitions. emma champion, thank you for joining us, as always. coming up on the program, more on donald trump's first address since his assassination attempt as joe biden faces mounting pressure to exit the presidential race. that's coming up next. 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. oo this is a good book title.

♪

>> good morning, i'm lizzy burden and these are the stories that set your agenda. president biden's future as democrats call on him to step aside. donald trump accepts the nomination and signs point to the fed and ecb cutting rates. difficult decisions, rachel reeve the tells us of economic challenges. good morning, a lot for markets. geopolitics and doubts over joe biden and optimism.

futures are flat. u.s. stocks yesterday as giants sold off and confidence fueled by jobs data boosting some stocks. two year treasury yield is unchanged at 4.4 and christine lagarde failing to persuade markets until some members reckoned one more rate cut this year so brent traded at 84 a barrel and copper was set for its worst week after beijing held back from stimulus so

extending that slump. one to keep an eye on, iron ore feeling a pinch. joe biden facing pressure to drop his presidential bid. baruch obama told him his path was greatly diminished. >> the fact that obama is tipping it against joe biden is the story of the weekend. the fact that he may not be up to the task given concerns about mental beauty. nancy pelosi encouraged him to

step down and nothing but silence from hakeem jeffries and chuck schumer. these are people who started to build up pressure he said he could see himself as a transitional president. he did not endorse joe biden so you're seeing a timeline from weeks to days. lizzie: donald trump delivering the first address. we can take a listen to what he

had to say. >> there is a crisis, our planet is teetering on the edge of world war iii. >> this is a sobering moment and the financial community is looking to mexico, manufacturing

tariffs anything like that. it is one that he is piecing together when trump 2.0 could be very different. it was chaos, protectionism, there might be a different approach. lizzie: we thank you and we can get more analysis from melanie at university college. great to have you with me. trump was pulling ahead before the assassination. has it sealed his victory? melanie: i would not say it has because there is a lot to be said and polls, constituencies with women, where he is not pulling ahead.

given the speech, a sobering speech with a certain level of vulnerability and strong line of unity, that would appeal to people that are left of center, the right left of center. it spoke to centrist audience which could tip the scales. lizzie: interesting the differences between trump 2.0 and the first term. how different will it be? melanie: on the speech, longest speech ever, we were getting some of the old trump rhetoric but being president is the only

job you've not prepared for until you have been there so there will be experience. the assassination attempt was game changing in the sense of recognizing the need to appeal and gather more unity. and given the impact of that absolutely two point is being shaped and will have the same undercurrents. possibly more effective policy. lizzie: i wonder how damaging it is that joe biden is sick and how he could change the narrative? melanie: we've had an evolution

over the last couple of days and he part is if there was a medical condition, then he would rethink his positioning and i think with the isolation this is trying to give the elegant way, he has been firm but now there is a window to stand by and sam doing this for the country,, following the assassination attempt that has required the democratic party to rethink messaging because demonization

rhetoric is going to work against them, so it is a combination of factors and absolutely key. we're going to see a statement to the washington post. lizzie: there is potential from joe biden to do this, obama is the only person who could persuade him it was time to go. >> i think he has been a trusted ally.

it's difficult to know what is going on in delaware. to provide a dignified offer to give the democratic party a real chance. lizzie: a bit of a curveball,: suggests the only candidate is michelle obama. is there a world where that works? >> she will not go near politics .

it would hillary clinton come back? i'm not sure invested in today's world's nothing is ever surprising. lizzie: melanie, assistant professor of international security. later today we will speak to kim who served in trump presidency. rachel reeves tells us they face difficult decisions. more next, this is bloomberg. ♪

lizzie: rachel reeves joined after a landslide win, her first visit to london since taking a win. >> there are no plans i control unless we have business buy-in and i hope they soar and they have the fingerprints of

business all over them. these are all about unlocking private sector investments. >> are you considering tax breaks? >> i'm not going to announce tax breaks or changes without seeing where the money will come from and we will have a budget this yeah, but i need to be clear about the scale of the challenge we have inherited. we need to fix the foundations before we can rebuild, but i will be honest and we will rebuild our country based on business investment. i asked treasury officials to assess, stronger the economy would be if we had grown at the

average rate and the answer is 140 pounds bigger. lizzie: difficult decisions ahead. that was rachel reeves. tax hikes or spending cuts? we will see. we spoke to the minister for eu relations and he says england needs a positive relationship with the eu. he spoke with oliver crook at the palace yesterday. >> in the british government handling of the situation they have tarnished our reputation in their handling of brexit and secretaries of state in the house of commons breaking

international lore. and turning in words when britain should turn out words and promote our values. it is that governments behavior that caused problems and why we are resetting that. >> how often does the name donald trump, in conversation? >> we've been talking about european issues. in respect of the presidential election it is a matter for the american people as to who they want to elect. the relationship is deep and it goes beyond who is prime minister or president, whether the american people choose their president we will work with

them. >> surely it becomes more or less vessel -- special. >> i think it is a deep partnership forged in the second world war, transatlantic partnership will always be central. lizzie: from churchill's birthplace, the uk's minister for eu relations. breaking news across the terminal, day number two after the meeting yesterday, rates on hold. christine lagarde says it is wide open and the governor of the bank of estonia says it is important not to pre-commit. hard to comment on how many cuts we will see and disinflation

will continue over the next 12 months. if is still fluctuation and to cut again they will need more confidence. keeping their cards close to their chest as traders pass -- parse remarks. french lawmakers reelected a centrist from emmanuel macron's party. the pro-business party wonder boat -- one the vote. the left-wing has cried foul. meta-is in talks to take a stake in ray bans, as much as 5% in

both companies collaborated on smart eyewear and they're looking to expand efforts to strengthen their position. shares of broadcom gained after discussing a chip. chatgpt maker approach them as part of discussions with chip designers even though nvidia has been the biggest vichy area. plenty more coming up. stay with us. this is bloomberg. ♪

>> north of paris a neighborhood has been plagued by drugs but the paris olympics could be a game changer. it will remain for basketball. >> a new campus, we will accelerated transformation, athletes will sleep, eat and train here. this place should become a new home for 6000 residents.

the legacy of infrastructure has not always been a success. the london games regenerated deprived areas and it's a different story for beijing and rio, the games left those cities with abandoned infrastructure and a big pile of debt. paris promises this will not happen. lizzie: that was caroline reporting on how paris olympics have rejuvenated the north of the city and we love the numbers. dan curtis put together a chart on the cost of the olympics in $2022 but an interesting figure, olympics have the second highest

cost of any project. only nuclear waste disposal is higher did you know? let's turn to the ecb because we had a meeting, rates on hold, unanimous decision but the messaging was cautious. christine lagarde burned by over telegraphing so she says they're not committed to a path. off the back of the press conference you had traders pricing in a chance of a september cut but then we had a bloomberg's scoop thing --

saying officials are not sure if we will get one more cut. this is where we see the pricing compared to bank of england and before we go just a few minutes away from sales numbers at 7 a.m. london time. 2.9% growth dropping to a not .6 cut thanks to the weather in england. the next program will take you through that, it is the opening trade with kriti gupta and guy johnson for the next couple of hours of the bloomberg. thank you for joining us. this is the 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. oo this is a good book title.

>> we are one hour away from the opening trade.