>> good morning, these are the

stories that set your agenda. bank of japan and federal reserve kick off to day meetings. latest gdp numbers from germany, france, italy, spain. thousands of venezuelans protest a fraudulent election win for nicolas maduro. ♪ lizzie: good morning and welcome to tuesday as we edge, a hold, a cut and more earnings. futures point in opposite directions. we saw the trade rotation from

big to small caps unwinding in the u.s. but if we flip across asset you have the 10 year yield pretty much where we left it. as we look ahead to some guidance from jerome powell on the rate path ahead euro-dollar is one only awaiting data and the yen at 154 as we look ahead and brent under $80 on concerns about softening demand so $79 is where we trade. avril is in singapore on standby. avril: well, boj today policy meeting underway. and a lot of scrutiny on the governor ahead of decision-making, hearing analysts despite the consensus being hawkish saying markets might be ahead of themselves.

regardless we will watch out for reduction of bond purchases, over one to two yaz. women looking at the data and seven through 10 years, boj has most holdings concentrated in that duration. yen losing ground ahead of recalibration of the boj. japanese bonds catch a bid. let's flip the board. risk off, investors taking money off the table ahead of decisions, tech earnings, then later we will get payrolls to shape markets. nikkei is down. as we see a bleed in china and

hong kong stocks china will publish global daily stop flow. making the market less attractive. let's flip the board because the other question is can japanese equities take tightening from boj? mark cranfield has been looking back. 2006-2008 and the topix declining so that both well for equities. lizzie: really interesting. thank you. now let's get to europe because a barrage of economic data will deliver crucial info as officials look for signals on whether to receive. let's bring in mark cranfield

for more. we have a june quote and it seems the longer they leave it the more june looks like a policy era. as we look ahead, how could this change the outlook from the ecb? mark: investors will look at german gdp, clearly the country that the central bank is the most concerned about. such an important part of the picture and not performing well so investors look for the economy to show improvement second quarter. ecb's idea that they can cut and hold would make sense if we see another pod performance it will cast doubts.

france is out pre-olympics so people will be more interested after the olympic games but germany is the key in another poor performance. they will consider two or one rate cuts. lizzie: that reflects ecb speak and uncertainty. i want to ask you about the boj. what happens to the yen? a lot of volatility. mark: i think we will be talking about dollar-yen highest levels all year, something the market is not expecting a tall.

we'll see how traders have reacted when disappointed. they sold the yen in june close to 162 and we needed intervention from the japanese authorities. people have been trimming yen positions so we go into a neutral stance to raise interest rates and reduce bond buying. if they don't come through that will be a negative signal and going up fast. the press conference is neutral for dovish in press conferences. not much help from the yen, it's down to the statement, they need

to achieve a hike and if they don't the yen will be in 12. lizzie: andre, mark cranfield looking ahead to the commentary from the boj governor. thousands of venezuelans are protesting after president nicolas maduro claimed. . the opposition campaign can prove than solace won the election after the public prosecutor named marina machado a suspect in a plot to sabotage the election. >> today i want to tell that is civilians, democrats of the world, we have roof of the truth of what happened yesterday in venice mitte. lizzie: let's get to bill faries

for more details. what they lena? -- what do we know? bill: maria moreno much auto said they had detailed tabulations across the country in the data shows there candidate got twice as many votes as president euro. we have not seen that data. much auto called for citizens assembly is later today in venezuela. we may get more information there but we have seen allies not stepping up to congratulate maduro on this election win. brazil, mexico, colombia are

calling for transparency and the brazilian president is expected to have a call with joe biden in the u.s. has also called into question the validity of results in venezuela. lizzie: what about domestic response, seeing protest in the streets? bill: thousands of people took to the streets and thieves protests are taking place outside caracas where the opposition has had a strong. more rural areas, small cities, a warning sign to maduro's regime about how these protests could catch fire and spread in the coming days. we do not know, it is quite

tense and the government accused the opposition of the railing and hacking into the electoral systems. they have not called for the arrests of much auto but that is something they will call for. lizzie: bill faries, we thank you for the latest. let's get to what we have on the docket day. we've got euro area gdp, second straight quarter of positive growth and men at 3 p.m. we have jobs data. consensus is a drop from 8 million but still over 8 million and then we will be able to look out for earnings from bp and l'oreal. l'oreal could be insulated from the slowdown given its scale and diverse range of products as we look ahead, all of them when

they cross and speaking with deborah carew at 8 a.m. london time. get stories you need to know in daybreak. they are leading on the news that sam some wins approval from nvidia for high-bandwidth memory chips and looking ahead to decisions and gdp growth figures. if you would like to take read of that letter go to da why be go on your terminal. we will speak to the ceo bill winters about earnings peaks and buybacks at 6:30 a.m. he u.k. time and the latest from the middle east as far protesters storm army bases in israel after soldiers were arrested on abuse allegations. this is bloomberg. ♪

lizzie: welcome back. just a recap of the earnings out

of standard chartered as we speak to bill winters later on in the program. shares rising in hong kong, on the second quarter profit beat driven by its wealth business and a repurchase in imax as they look to return $5 million by 2026. are they more ambitious? we will ask the ceo. let's get back to the middle east. protesters from netanyahu's coalition storming bases as tensions soar after accusations of abuse.

the u.s. scrambled to prevent conflict from turning into war. analysis from joumanna from dubai. tell us what we know and will cause low pro 10? joumanna: 12 hours of chaos. demonstrators and lawmakers from netanyahu's coalition stormed to military bases and protested in -- in -- against soldiers at one of the bases where suspected fighters were being held. israeli police said they rated the base following allegations that an inmate was subject to abuse at the same base where many political prisoners are held and it has been subject to challenges alleging intolerable

conditions and the riot spread to another base. even though there were no reports of arrests or injuries well it does show is upheaval domestically. you had the likes of the minister secure ready putting out a tweet saying take your hands off the reservist and also another way of showing that they are divided and split over how political prisoners are treated at a time when you would think security officials would discuss reprisal over the golan heights attack. lizzie: you got diplomatic efforts continuing to avoid war, what is the latest on that? joumanna: lebanon the country

has been preparing for reprisal with israel and the u.s. pointing their fingers at hezbollah which denies responsibility. many diplomatic efforts have gone through in an attempt to convince israel to keep it limited and many outlets report that if there is a response it will be limited and significant. on the back of that we've seen many flights out of beirut airport delayed or postponed, some embassies advise citizens to leave the country next 24 hours will be crucial. worth pointing out antony blinken does not want to see the conflict escalate. european foreign affairs chief calls on all parties to exercise restraint and even the lebanese foreign gave an interview saying

israel will escalate and hezbollah will respond. these are assurances we have received so diplomatic channels are working hard. lizzie: you twitched on the impact. how are the markets reacting? >> what you have seen is an outperformance of assets. up until the attack what you saw was a huge performance for the local and dollar bonds. israeli shekel started to see stabilization and then the attack happened and you saw the shekel in those sums stabilization through over the day when it became apparent israel was not ready to launch an offensive. currency bonds are a strong gauge about risk.

not manifested in oil. continues to break through $80. after gyrations assets have done well. lizzie: joumanna in dubai. brent trading at $79, weaker. coming up standard chartered has expanded its share buyback program, we dig into the turnings with bill winters. do not miss our interview in 10 minutes, this is bloomberg. ♪

>> there is a lot of new stuff to build and even if the progress and models stop now i think we would have like five years of innovation for the industry to figure out how to use the stuff that has been

built and the foundation models are accelerating. so that is a wild time. guest: companies are building one central agent and we will have a meta-ai assistant but our vision is to empower people to create agents for themselves, whether it is the millions of craters on the forms or hundreds of millions of small businesses. lizzie: that was mark zuckerberg speaking to jensen wall and meta-reports results tomorrow and results from microsoft, apple and amason. $10 trillion total and we can also look ahead to other

earnings, plenty of big oil. let's get to other stories, treasury reduced federal borrowing estimate and projected a decline in the cash for. our estimates between july and september are down. the estimate comes ahead of a possible fresh fight over the debt limit. energy trade group paid a record dividend last year after russia's invasion of ukraine delivered a profit whom representing $14 million for each employee that owns the company. bloomberg calculates they distributed more than $25 billion to partners over the last 15 years. and to asia where singapore is planning to invest $30 billion in the u.s. market over the next five years. the fund told bloomberg it is

looking to put money into ai-related firms and semi conductors and infrastructure. investments surpassed china for the first time in at least one decade. let's check in on these markets. you are seeing futures higher in europe, 2/10 of 1% on the euro stoxx 50 futures and in the u.s. as we look ahead futures point ever so slightly lower. big tech climbing so a bit of rotation unwinding but if we look at the cross asset take you got that 10 year yields basically you didn't see it but since yesterday and more signals from jerome powell ahead.

the yen is at a 154 handle as we look toward the boj. euro-dollar at a 108 handle as we await data out of the euro zone and brent crude is below that a dollars a barrel level. weaker 4/10 of 1% because of these concerns about softening demand. coming up we will speak to the ceo of standard chartered, bill winters, to get through his results. they have expanded their buyback program and we will dig into those earnings exclusively in a conversation next. this is bloomberg. ♪ with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place?

show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity.

>> good morning, this is bloomberg daybreak: europe, i'm lizzy burden in london of these of the stories that's set your agenda. asian stocks trade lower as the bank of japan of the federal reserve kick off their two day meetings. data dependence, ecb watches with the latest gdp meetings today. we will bring you the numbers from germany, france, italy and spain, standard chartered announces a buyback after beating on profit. our exclusive interview with ceo bill winters is coming up shortly. we just have some breaking data out of france, the gdp numbers for the second quarter to the beat. now .3% with the expectation for not .2% growth is up from the previous quarter where you had not .2% growth again. this feeds into the picture for the ecb has it looks towards that september cut decision, expectations have been forward cut.

investors were pricing a 90% probability of a move, but of course they are going to have to feed in all the other data we are going to get as well, from spain, germany, italy, the euro area, july cpi for spain and germany later today, euro-dollar they are at one 08 barely budging off the back of this. stick a broader look at the markets as well as we edged toward so central-bank decisions. you've got futures pointing lower stateside. .2%. higher for euro stoxx 50 futures. higher .1%. we look at the cross asset picture. 10 year u.s. treasury yield is higher basis point of 4.18%. barely budging since yesterday. we'll look ahead to signals from jay powell and the great paths tomorrow, the yen is at 154 per dollar. euro-dollar very budging off that at 108 and brent under $80 a barrel now amid these concerns on softening demand. let's get to the earnings story,

standard chartered shares higher in hong kong after the london-based bank said that it would ramp up its multibillion-dollar share buyback program, this as he reports a beat on second-quarter pretax profits driven by its wealth business. i'm pleased to say that we are joined now by the ceo standard chartered, bill winters. welcome back to the program. let's start with that buyback, $1.5 million, plan to return $5 million to investors by 2026, is there a chance you could go beyond that target now that you've got results like these? >> we have are the three year target of an excess of 5 billion. 2.7 billion of first year so far . if we continue to reform well, what we said to shareholders is, we've got a strategy, we are pursuing the strategy, it's working well, earnings are strong, managing capital very directly and actively and that has allowed us to return any surplus to shareholders. especially given where our stock prices, which is not a size we

think it should be, we will buy back as many shares as we can with surplus capital. if we keep performing, we could keep buying back shares. >> earlier you describe the stock price performances, see you're still not happy with it. >> it's less prep than a was, we have a long way to go. we have to ask the question, why. it certainly is and that we are not performing well. the performances, we could do better, i will always recognize that we could do better and we are doing better. but i think we are in a pretty difficult environment and we need to be clear about how differentiated standard chartered is. at the end of the day, we serve multinational corporations on the cross-border need and we serve affluent individuals. we do that extremely well. we've got a fully scaled and substantial position across a show middle east and africa. national corporations coming out of the americas and europe, that's what we do, we are doing it well. it's generating good returns.

>> to have a new target for the buyback target? >> we just at the 5 billion target in february. we won't find tunis every six months. we will do in excess of five building and we are on track to achieve that. as i said, we will keep on going if we can generate the strong performance. >> this is your plan to cut costs by $1.5 billion over the next three years. are you seeing much wage -- wage inflation? >> we had a big spike in wage inflation last year. it's getting back down to normal . the fit for growth as a transformation program. we've had cost-cutting programs my whole time at standard chartered and we continue to get more efficient. we are trying to do this a bit different, which is quite a bit differently, which is to look at every single one of our processes and see how we simplify this, how do we replace it with digital prophetesses, automation, etc. how do we make it an easier place to get things done for

ourselves and for clients, that requires investment. in addition to saving 1.5 billion, we said we would spend 1.5 billion up front to achieve that. everything is on check, we have over 200 initiatives we are pursuing. these are not big marquee products -- projects, but it makes a big difference. >> let's delve into these pretax profits. arise driven by your business, where the biggest inflows geographically? >> everything international, international banking, a big chunk from mainland china, investing in hong kong, investing in singapore, investing in dubai, that's happening. global indians so that the indian wealthy population is growing very quickly. across to buy a, singapore, hong kong, but also the rest of xeon. a wonderful thing about our footprint is there is a rising up a minute -- upper-middle-class. they are saving for the first time in their families histories

and people who had wealth before are becoming wealthier as these economies grow. it's playing into our strengths. >> i want to come back to the outlet. on wealth, could you hire more wealth managers? >> we have grown the number wealth managers by 9%, 10% for the last three years and we will keep on going. we are focusing on the full spectrum from the ultrahigh networks, so private banking's, through to our real sweet spot. people that have material savings, but aren't in the family office zone. we are very good at helping with those individuals and families out of the states that they have been in, which have been typically not accumulating savings, into investing substantial amounts. >> you had a taco new money from 2024-2026, are you confident you will be that target? >> we are very much on track, the guidance that we gave six months ago, we have already surpassed that in terms of the

earning stages. it has been a good market, it has not been a perfect market, we've had challenges in the equity markets around the world and those are questions about how the tech sector will perform, etc. against the backdrop of a market that is neutral in terms of attractiveness, we were outperforming. assuming the market stays neutral, i think we will do very well, if we have a difficult time in the market, it gets tough. but we have been growing it at 9%, 10% for 10 years. we will cover that in our earnings presentation and just a bit. this is a long-term secular growth story and it will be valuable from quarter to quarter, maybe even from year-to-year but the trajectory is clear and we are perfect for a. >> you mention china-hong kong, you staying on the sidelines when it the hong kong mortgages? >> to stories about hong kong mortgages, they are safe, very low loan to value. we have zero concerns, even with

a soft residential property market in hong kong. we got no concerns about losses. but the market is extremely competitive and hong kong mortgages tend to be the thing that soaks up surplus deposits. and there is a surplus of deposits in hong kong. so the markets are unattractive in hong kong. our market share has gone down deliberately but we are not concerned about that because the franchise for our customers and hong kong are so extremely strong and we are able to service any customer that looks at mortgages as part of a broader relationship. we continue to be active, just not a vet -- not as active as we have been. let's we talked about the stock price, what will it take for it to be properly rated by the market? >> that's a big question. the first story for us is to keep on performing. this performance today will add to the momentum. you could draw a line through the interest rate effective, the covid time has been a steady performing story for five years. we have to demonstrate to the market that it's sustainable in

this great environment, everyone expects rates to come down in september, that will present some sort of interest rate headwind, but we have still guided to an increase in net interest rate income because we can offset the great effect with volume growth in mixtures in our portfolio. we need to demonstrate that. second, the world will need to recognize that we are not a proxy for chinese gdp. we are proxy for the degree to which china opens up. we have a super business in china, we are helping connect china to the rest of asia, to the middle east, africa and to the rest of the world, and vice versa. those trade links haven't gone away and they are extremely robust. the market still sees china as an economic weak spot in his concern that that could spill over to our earnings. empirically, we are showing it doesn't. i'm very hopeful that as we focus on those things where we really make a difference, we will perform and generate the results.

>> you are not proxy for china gdp, you are lended listed but the business is in predominantly about london, i wonder whether you expect a lift to the valuation because of the boost from the lack of political uncertainty given labors electoral win. >> it's good to have a stable government in the u.k. as the chancellor has made clear, we are working through some challenges, fiscal and otherwise, but certainly, all of the rhetoric to this point for this labour government has been very supportive of a stable business environment, which is not to say there is going to be giveaways or handouts, there won't be, we don't expect that. that predictability is a good thing. the last government passed through a secondary objective for the regulators to focus not just on financial stability, but on creating a competitive financial sector. these things work through the system and it's a highly sophisticated regulatory environment. stable politically, that's a good environment for us to have

a headquarters. >> just finally, you are in your 10th year's ceo, you talk about long-term, you have said you have no plans of going anywhere, and i wonder whether it's your intention to see through this cost and growth plan until at least their completion in 2026. bill: i would like to, you know how these things go, you live it from day-to-day. all the actions i'm taking today are with a medium-long-term view. we have a fantastic team at standard chartered and we have a couple of people that have been with us for a long time. i'm pretty sure that what we built in the coming years we could be there for some time to come. >> to be discussing your earnings with you for your succumb, bill winters ceo standard chartered, thank you for joining us on that exclusive interview, let's go to other stories making news this morning now. mcdonald's has shrugged off the

burger chains for sales drop in four years, pledging to launch new promotions. second quarter comparable sales fell 1% year on year with the ceo warning of further weakness as cash-strapped consumers curb spending. investors retain their appetites which shares posting their best day gain since 2022. u.s. politics, north carolina governor roy cooper has withdrawn from the race to become kamala harris running mate. democrat is worried that his republican left tenant could try to assume control if he left the state. cooper said in a statement that it's not the right time for him to be on the national ticket. donald trump said that he expects to eventually debate, harris. he previously declined to commit to appear at a scheduled face-off. those are some of our top stories this morning, busy day ahead on the docket. 10:00 amu k time, euro area gdp coming up. 1:00 p.m. u.k. time we get german cpi data for july.

at 3:00 p.m. u.k. time, it's the u.s. jolts data in the conference board consumer confidence numbers and aftermarket will have earnings from l'oreal and airbus as well as microsoft. plenty to watch later, but coming up on the program, britain's new chancellor, rachel reeves, accuses the previous government of racking up 22 billion pound hold in the public finances. we will get the details with our europe economist next. "bloomberg daybreak: middle east." -- global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts, in more than 120 countries. thi. ♪\\

quex overspend of 22 billion pounds. it would mean a 25% increase in the budget deficit this year. i'm announcing today i will hold the budget on october the 30th alongside a full economic and

physical force that -- forecast on the office of fiscal responsibility. >> that was britain's new chancellor rachel reeves and parliament accusing the previous conservative government of running up a $22 billion -- 22 billion pound fiscal black hole. she hinted she may have to raise taxes to help balance the books. for analysis we are joined our europe economist here at bloomberg economics. before we get to what she's going to do about it, let's start with reeves audit of the public spending. was any of this surprising to you? >> good morning. what was said was a little bit surprising in the sense that the product -- the problem is a little bit bigger than we thought. taxes are going to rise and will need to issue a fresh one. the reason it was a little bit more surprising is that we were sort of expecting a 20 billion fiscal hole would be found in

finances, but this number related to the medium to long-term pressures on public spending due to the unfunded unprotected departments. what we found out yesterday was that for this budget alone, there's a 20 billion shortfall. i think it's important to say two things, the first one is that it's not only do to the -- the 20 billion numbers not only due to unfunded spending commitments, half of it does generally seem to be that there are some departments that are struggling that needs cash injection right away, especially the home office and transport department. another half of the 20 billion is also a political choice from labor. it wanted to meet public-sector workers, and that is also reflected in 20 billion. just a second thing to note is that there is still a bit of uncertainty about this 20 billion because the document published by the treasury site until the autumn statement, the government would try to find sir

there -- further savings in an existing budget to make up for the call. there is still a bit of uncertainty there and it's possible this is an upper estimate. >> you are agreeing with the conservative chart that this isn't just an economic exercise, but a political one, the other charge from the opposition is that tax writers now look likely that she is abandoning growth as a solution to the fiscal black hole in favor of austerity and tax hikes. what do you expect this coming? >> i think tax hikes drag on the economy. they will probably drag a little bit less if they are targeted to wealth, pensions and to businesses that they are considering. and they can drag less than the tax hikes on income. at the same time you are going to have increased public spending. so in the short-term, there's

not a big impact on the economy. but now i do think there is a more fundamental question about which fiscal space this current government has to invest because we didn't talk about that yesterday. the public investment is also said to fall. and not to change the growth prospects of the economy, you kind of need to add more investment in that something that in the current fiscal rules there is no fiscal space to do it. at some point we are going to have to have a conversation about whether the fiscal rules are the right ones if we want to stimulate growth. >> perhaps we will have got on october 30. the date reeves announced for the next budget. i wonder apart from tax rises and spending cuts, what about the question of borrowing? can we expect more of that in the near term and how do you reckon the boe will think about that? >> i think, yes. as i said earlier, the number we got yesterday is that there is

going to be between 16 and 17 billion of fresh borrowing this year. it's possible that the number comes down until the autumn statement. i think for the boe, there's two reasons why it wouldn't be too concerned about the news yesterday. the first one is that even the 16 billion in extra borrowing, they are unlikely to change much in the short-term to the economy, so it will probably live gdp by 23%. it's what we are estimating, in inflation by just .1. fundamentally, what the boe is more concerned about is the medium term impacts on inflation . there we heard from rachel reeves and it's widely expected that he will try to make up for that extra borrowing with tax hikes. that's what we will hear this statement. that corrective action means the inflationary consequences will be big. lizzie: let's look ahead to the

bank of england decision on thursday, looks like it will be on a knife edge. looks like it will be an incredibly divided monetary policy committee where you sat for whether we get a cut or not? >> we have been looking for a cut into august for some time. we know that services inflation has been probably a little bit sticky and then many would hope. if you look at the progress that has been made on inflation since the start of the year, you will see the jobs market cooling, i think there is enough not to start a very fast and aggressive easing cycle, but to cut once and then may be gradually, but starting in august is what we were expecting. >> europe economist, we thank you for that analysis of reef statement yesterday on the preview of the boe decision on thursday. plenty more coming up on the program, do stay with us.

this is bloomberg. ♪

>> there is a lot of new stuff to build. i think even if the progress in the foundation model stop now. i think we have five years of product innovation for the industry to basically figure out how to most effectively use everything that's gotten built so far. but i think the foundation models on the progress on the fundamental research is accelerating. so that is a pretty wild time. >> that was the ceo of meta mark zuckerberg speaking to the ceo of nvidia, jensen juan in a fireside chat. looking ahead to all of those earnings that were expected this

week from meta, from microsoft from apple, from amazon, together with a combined $10 trillion. this week, the biggest week for earnings season. we will have all of coverage on bloomberg for you. meanwhile, the central bank decision coming out of the boj, two decision already underway. we've got the fed and the bank of england as well. if you flip the board, you can see how much volatility there is around this boj decision when it comes to the yen. traders brace for big yen moves as we look ahead to the potential hike in the announcement on bond buying. if we flip over to the u.s. politics, we've had developments leveling away in the background, you can see the race for kamala harris running mate is narrowing. in the lead at the moment, according to the current betting odds, is mark kelly, but you've got tim waltz and josh shapiro

behind him. we also have the news that kamala harris has raised 200 million dollars since entering the race for the white house. this as she hones in on these running mates to join her. we also have lots more on the docket for today. we have the multinational beverage company expected to release its earnings in just the next few minutes. we will be speaking with the ceo at 8:00 a.m. on the opening trade. that does it for a daybreak europe. things for joining me. the opening trade is up next. this is bloomberg. ♪ (♪♪) (♪♪)

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