♪ >> good morning. "bloomberg daybreak: europe this is. these are the stores that sell your agenda. the hawks land in japan as the boj hikes interest-rate and unveils plans to cut bond buying. we will look ahead to governor ueda's press conference and today's decision from the u.s. federal reserve. samsung gets a boost from ai with profits growing at their fastest pace since 2010. but microsoft misses estimates for cloud revenue, sending

shares lower. and hamas says israel has killed its political leader in an airstrike in iran. we will bring you the latest. so, from the geopolitics -- ♪ from central-bank decisions to the geopolitics to the earnings story, redheads crossing the terminal right now as we get the numbers crossing. and another strong set of results for spanish lenders. this time, it is bbva in the second quarter. net income for the spanish lender coming in comfortably above the estimates, just shy of 2.8 billion euros. vestments had been for just shy of 2.4 billion so it's a beat in terms of net income. goldman sachs had seen this bank outperforming. bbva saying it will "clearly

outperform its 2024 goals." so, bbva hosting a rising start posting a rising profit -- posting a rising profit and its bid for sabado. the bid process is progressing according to plan. net interest income coming in at 6.4 8 billion euros. the estimate had been for 6.4 5 billion, so it's a beat in terms of net income and net interest income for that lender over in spain, bbva, for the second quarter. and saying it will clearly outperform its goals for 2024. let's switch focus to a company with a very different set of challenges. this is lufthansa, an airline that has faced pressure in terms of its stock price, year to date down around 24%. lufthansa coming through with some details in terms of estimates. it's a beat, in fact, for the

second quarter. adjuster for lufthansa, revenues for the second quarter coming in at just above 10 billion euros. it's a beat in terms of second-quarter revenue for lufthansa. we will look at the load factor and their outlook for the rest of the year. we know the prices and supply chains have been a challenge for this airline, of course, as well. adjusted earnings in the second quarter coming in slightly below the estimates, 686 million euros. estimates had been for a little over 705. on the top line, second-quarter revenue, a modest be coming through from luka doncic -- a modest beat coming through from lufthansa. it's a major day for these global central banks with the bank of japan in the spotlight. a hawkish move coming through from the boj, raising interest rates and detailing its plans to cut bond buying. interestingly, as well,

adjusting the language around forward guidance, suggesting further interest-rate hikes could be in the cards for this boj if the data aligns with what they are saying. european futures pointing to gains with 0.1%. we look ahead to the federal reserve, the next central bank to make a decision, and expectations and questions as to if they signal if september is on the cards in terms of the first cut for the fed in this cycle. s&p futures looking positive. looking to add a 0.4% after the challenges of yesterday with mega cap tech been questioned in terms of the investment cycle around ai, microsoft, the disappointment around its cloud business and its huge capex spend coming in above estimates. a bit of a rebound given the picture we have seen overnight stateside. let's put the board and lacrosse asset. the focus on the two-year in the u.s. as we build up to that decision from the fed.

4.35 on the two-year. how much is priced in at this point? the japanese yen currently at 152, down despite that move to raised by the boj and slightly hawkish guidance coming through. brent, $79 a barrel, up one .4% on the geopolitics and what's emanating in iran. gold at a bit of a move2420, into that safe haven. let's get more details into that boj decision. the bank of japan has raised the benchmark interest rate to 0.25% and revealed plans to reduce bond buying, underscoring its determination to normalize policy. the boj also unanimously decided to cut monthly bond buying by half, but not until the first quarter of 2026. let's bring in our bloomberg economics japan senior

economist, taro kimure. how important was the statement and language change from the boj? >> i was actually one of the economists out of the consensus economists who were calling for what was going to happen -- the hike was going to happen in july. even in previous outlook reports, suggest them almost securing their 2% inflation target. they showed in their dot plot. and actually, given that the yen has weakened in june and there is more factors, there are more factors that may probably make inflation overshoot, and also the actual wage and cpi data suggests the wages and prices are going the boj's, what the boj has been expecting. therefore, it is natural for it to hike rates. in terms of the forward guidance, it's really important that the boj underscore that the current real interest-rate is at significantly low levels.

that speaks to me that the boj's intent adjust interest rates by hiking further with its update on its price out. does price outlook. if will -- price outlook. i think if a reporter asked if there's another possibility for another hike in august? i think he will say yes. >> really interesting in terms of expectations of a further hike potentially coming through in august. because some have suggested may be the press conference will be slightly dovish in terms of the language from the governor given what we saw in terms of the statement, in terms of the decision to increase rates and outlined that bond buying program. what do expect to hear from ueda in terms of more detail? do you expect to hear a slightly more dovish tone and while leave the bond buying clang until 2026

in terms of the cuts? taro: i set august. i meant october -- i said august. i meant october for a potential next take. anyway -- next hike. anyway, i expect ueda and his colleague's resolve to normalize his policy, i mean, the ditching away from zero lower bound is a stronger and i think where they try to prime the market that they are looking towards more hikes, even in this year, and steer clear on any speculations that ueda and his team is dovish. also, in terms of the pace for quantitative tightening, the plan unveiled today is not as dramatic, not dramatic and almost mostly consistent with market expectations. but it is very well detailed. they show each purchase numbers,

purchase figures for each quarter, and clarify about, clarify the pace. so that means that basic signal from the boj is they are pressing ahead towards policy normalization in both rates and quantity. >> yeah. ok, bloomberg's senior japan economist taro kimura, thank you very much on the details and implications of what we hear from the boj. let's cross over to singapore. avril hong standing by. what are you seeing in the markets in terms of this reaction to the decision from the boj? avril: the japanese currency has just been swinging today. the hike was not all that unanticipated because local media reports overnight had already been skipping in that direction. when we saw the boj hiking as it did, we actually saw the japanese currency we can post boj decision. i think what's really important here and as taro has been

outlining is that the boj follows through maybe be suggests more willingness to continue its tightening path. certainly from the statement, it was a bit hawkish compared to the previous one and also talked about prices are skewed to the upside for this year and the next. all eyes will be on what ueda says. for now, the yen is climbing against most of its g10 peers and also a lot against the aussie. as today we also got a core inflation print from down under and it unexpectedly cold so it is erased -- cooled so it erased some bets. that bond purchase reduction, in the interim, it sounds like the step down is modest. much less than some in the markets had been anticipating so bond futures actually. some of the -- actually pared

some of the declines. the top-performing sector on the topics the japanese banks. today we also got china pmi's just cementing the idea of a we chinese economy. but also from the politburo commentary, it sounds like there are hints of easing to come. chinese stocks rallying really hike today. we are seeing the etf's that are favored by the national team sing a bit more turnover. the other thing i wanted to highlight in terms of earnings, asia's bc did really well announcing share buyback. samsung also knocked things out of the park, really benefiting from the ai boom. the focus shifting not just to ueda but also to the fed for asian investors. tom: important reminder there's some really interesting and corporate stories out there moving these markets. avril hong, thank you very much indeed, with the deep dive. talking of the boj, of course, so increasing, raising interest

rates for the second time of the cycle. and the forward guidance and already economists over at bloomberg in tokyo suggesting that october. is in play as well. that could be another move higher in terms of rates from the boj. we expect, of course, to hear more from governor ueda later in the morning in the next couple of hours. we will bring you the lines when we get those. let's get more market context and reaction to this with bloomberg mliv's mary nicole in singapore. this get your reaction to what we've been hearing from the boj. our economists in tokyo sees another interest-rate increase and hike from the boj potentially in, october. what does this mean i guess for flows into japanese equities? what does it mean for the equity or japanese assets i should say? and what does it mean for the equity story and to what extent it might challenge the nikkei and corporate story in japan in a higher rate environment? mary: well, the first thing we have to remember is that they are not raising rates too much, so it's not going to really

thwart some of the gains we have seen in the equity markets. i think that's one thing to keep in mind, is the fact that, of course, they are raising rates and they are raising rates and there moving towards normalization, but it's not going to be enough to stem the increases that we have seen or to really put pressure on some of the corporates and pushback. i think that's one thing to keep in mind. i think the other thing really to keep in mind is the fact that, you know, dollar-yen is unlikely to come down very much, in terms of, if we see yen gains, they are likely to be limited. because at the end of the day, we still have to remember that negative rates, the rates in japan are still deeply negative, especially when you compare it to other g10 currencies. so, for that reason, that the upside on the yen would still be

quite limited again, which would still be supportive of the equity markets. tom: ok, and the yen sing very modest gains in the session so far. the moves around again very much dependent on what we see from the federal reserve. let me get your views on that. where are you and the team going to be focused when it comes to the decision from the fed and the language from jay powell later today? mary: well, now that the market has been, is almost fully pricing a cut in september, it will really be about whether or not jerome powell does signal a cut in september. and whether he signals even more thereafter. so, and if he's in line with some of those dovish expectations that are in the market. or does he still focus on this data dependency? remember, the dot plots had only signaled for one cut this year. it depends on how much the fomc

shifts their time into a more dovish outlook -- baritone into a more dovish -- their tone into a more dovish other. so far, it sounds like it's still going to be dependent on inflation. we've had two readings on inflation that were positive and moving in the right direction. but at the end of the day, we had a similar signal at the end of last year, if you recall, and we saw that the market was pricing in seven ricketts. i think -- seven rate cuts. i think it's going to be hard for the fed to get too far ahead of itself and it is likely going to still focus on data dependency and just highlight that the date is moving in the right direction. tom: bloomberg mliv's mary nichola on the market implications of this a boj decision and what to watch for when it comes to the fed later today. here's what else we will be focused on drug estate. 10:00 a.m. u.k. time, we begin with the euro area cpi.

does the broader picture in the euros on a line with -- the euro zone aligned with spain? how does that inform the ecb's next move after the cut that came through in june from the european central bank? 10:30 a.m. u.k. time, we are going to get an auction of seven-year debt over in germany. after the boj, it is the fed rate decision, followed 30 minutes later by the press conference from jay powell, of course, as you can see that in those pictures. hsbc perform very strongly indeed -- performing very strongly indeed. we will be watching this at the open, u.k. time, 8:00 a.m., of course. this is on the back of an earnings beat and a 3 billion-dollar share buyback. the ceo, noah quinn, will be stepping down later this year and leaving the bank in a pretty solid addition.

pretax profit rising well above the company estimate of 7.8 billion dollars returning more cash to shareholders at hsbc, $3 billion in terms of the buyback. we are going to be hearing from the ceo later in the show. another busy day, of course, for earnings. want to keep you updated as the pharma giant gsk, instagram owner meta, and ebay all report. we will be speaking to the ceo of schneider electric on their latest earnings. 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 dayb . on the terminal. focus, of course come on the central ck decisions and the importance of the earnings start with the focus shifting for microsoft to meta. samsung shares are up after reporting its fastest pace of net income growth since 2010. more than a decade, of course. we will bring you the latest on the big tech's big week of earnings. this is bloomberg.

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♪ tom: welcome back to "bloomberg daybreak: europe." happy wednesday. microsoft's cloud computing service azure posted a slowdown in quarterly growth, disappointing investors came to see a payoff from huge investments, and growing investments, by the way, in a are products. let's bring in -- in ai products. let's bring in our guest with a focus on microsoft products. the growth came through for azure, but less strongly than in the previous quarter. and then there was the capex spent as well. how are investors reacting? >> expectations were really high for the cloud computing business and sales have slowed down a

little bit. sales growth still at 29% but slightly below what was expected. that comes amid investors being a little critical about much tech companies are spending on ai and there is not as much payoff as they would like to see. alphabet shares plunged because there were sharply higher costs that overshadowed really strong sales. and now, kind of microsoft is at the center of those questions. we've got capex coming in at $19 billion for the quarter, and the company has signaled that it is going to spend even more in service. that will be really at the center -- servers. that will really be at the center of what investors care about. we will see if investors remain patient enough to see that payoff comes are. tom: the capex not slung, but maybe that's -- not slowing, but maybe that's a benefit of samsung. what are you seeing from samsung earnings and how that company is aligned to this ai revolution? >> with something, fastest pace

of net income growth in over a decade, beating out those expectations massively. a lot of that is due to the semiconductor segment. the main product is the high-bandwidth memory chips. that is really important for generative ai. that is a product samsung has been trained rivals a little bit up until -- trailing rivals a little bit up until now but now it's a received approval from nvidia for certification of those trips. there is really going to be boosted earnings, boost sales going ford. it is really trying to ramp up production as well. it is still trailing behind a little bit. but it is a progress story. tom: it got the blessing from nvidia so we will see to what extent nvidia ramps up the purchases of those memory chips, the hbm chip the earnings beats. coming through from samsung. to some other stories making news. intel shares rose in late

trading with the firm said to be putting to cut thousands of jobs to trim costs and fund unambitious rebound punk. sources say the reductions may be announced as early as this week with intel also set to report earnings tomorrow. the chipmaker. has been spending heavily on our 92 -- r&d. coming up, we will be switching focus to the geopolitics because hamas says israel has killed its political leader in an airstrike in iraq. we get the latest from the -- in iran. we get the latest from the middle east on this crucial geopolitical story. stay with us. this is bloomberg. ♪

♪ tom: welcome back to "bloomberg daybreak: europe."

hamas says israel has killed its political leader, ismail haniyeh , in an airstrike in iran. let's bring in bloomberg's joumanna bercetche. this is a major story in your region. what do we know? >> a couple of hours ago, hamas put out a statement saying that political leader, ismail haniyeh , had been killed in an airstrike in iran about 2:00 a.m. local time. media saying he was killed alongside his bodyguard and that israel were behind that airstrike. israel have not officially commented on the situation. but so far, what we are getting is a bit of reaction from around the middle east. the president of the palestinian authority saying he has strongly condemned the assassination of ismail haniyeh, calling it a cowardly act and a dangerous devout meant. a short while ago -- dangerous development. a short while ago, we heard from

turkey, who said the murder into regionalized the war in gaza. and of course, ismail haniyeh was a key figure had, not just as the pinnacle -- figurehead, not just as the key political figure of hamas, but also as a key figure of the october 7 attacks on israel and has been one of the key figures leading those discussions on a potential cease-fire deal we have been speaking about the last couple of weeks. with him gone and out of the equation now, it raises a lot of questions about how the region is going to respond to this airstrike entered the killing, and also the fate of those cease-fire discussions within gaza. tom: those are the key questions, aren't they? the location of the assassination really stands out. just very briefly, the response from tehran? >> i think you need to bear in mind that ismail haniyeh happen to be in tehran for the inauguration of the new president. this is the president's first day on the job.

he's been painted with this quote unquote "reformist" brush. he wanted to open up dialogue with the west because iran has been willing in the wake of sections. he will have to formulate a response. yet to be seen what that response will look like. tom: joumanna bercetche in dubai. thank you very much indeed for the latest pair 20 more coming ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff.

>> good morning morning. this is bloomberg daybreak: europe. i'm tom mackenzie in london. these are the stories that your tent. the whole plan in japan as the boj heights interest rates and unveils plans to cut bond buying. we will get to the governor's press conference at today's decision from the usa.

samsung gets up was from air with profits growing at the fastest pace since 2010. but microsoft misses estimates for cloud revenue, sending shares lower. and, harris wipes out donald trump's swing state lead. every poll says it is now a dead heat ahead of november's election. let's get back to the story right now. included the spanish bank pda with a solid be there, electric good electric coming through with its earnings.

they have also interestingly raised their growth targets for the year as well. in terms of the first half revenues coming in above the estimates, 18.2 billion euros. just shy of 18.2 going euros for schneider electric and it is beaten in terms of all of this. the essence have been for no .5 billion. they are crossing from the yogurt maker. this is a redhead coming in above the estimates. in terms of the sales increase of 4%, those of the estimates of 3.8% in the second quarter. for further details, let me break it up for you. that is the key line coming through from that france listed company in terms of dairy products.

beating estimates. this is the outlook. this is between three and 5% in terms of growth through people -- three to 5%. the first half recurring operator margin, a modest beat. all that press the estimate of 12.6% and the second quarter sales coming in. relatively qandil he above the estimate. 6.95. a beat coming in there. we'll see if there is any in terms of the pricing and what it tells about the consumer. we have the telephone company's telephone -- telephone companies coming in. in terms of the details and there is coming through is the second quarter revenue beef with

this company as well. here's the details. in terms of revenue coming in at 10.3 billion euros. the estimates have been for just under 10 billion euros. the german story slightly softer and it is a beat for the exposure over in brazil. operating income coming in just merciful of the asmus. let's check in on how the teacher's pager -- picture is shaping up. in the forward guidance that the heights could be in the guards for the civil bank of japan.

we bet decent pictures as well in terms of the hsbc,. chinese equities have been rallying come particular they focused on tech. still close to that correction. done about not percent from the record highs. almost 1% despite discipline coming through from micro soft in terms of the spent. as we look ahead to meda and its earnings later today. we get back to the central bank's with the boj, handing it down to the federal reserve and the expectation or at least the focus will be to what extent they guide and the pressure toward a potential cut in september. after decent gains, the front end of the treasury curve, the japanese currency remains in focus for us today. strength coming through their up just .2%.

prince double of $80 per barrel beginning 1.6% today on the back of the geopolitics and iran's claim that nikki -- achy, slater has been assassinated. gold getting a bit on that tension. up .4%. let's get to that hsbc story i mentioned with the bk coming through. we get back to the earnings a focus on banks. setting up his final quarter with a further $3 billion share buyback. they beat expectations driven by rising global banking and markets. it has been a strong performance. price we did a turn on tangible equity of 70%.

to deliver a financial performance this strong. i am pleased at the way they have handled the past five years, the work they have done, the transformation and the results today are testament to the work they have put in. mass they are to jump hsbc and the strategic promise of incas bc. the financial results mass. just one thing that sometimes we tend to forget is quarter by quarter but in the last 18 months, we have distribute it to our shareholders $34 billion of capital either via debit cash dividends or buybacks. that's in 18 miles and $54 billion over the past five years.

let's talk more about their earnings and that share buyback number.$3 billion higher than we market wasn't is a pain. how do square up what you can offer in terms of share buybacks versus the need to continue investing in the business or other areas for m&a for example? question he said that this year and lester as well. it can be retained to fund growth or additional buybacks, additions or commuters. they can do both and they are doing both. we are doing sufficient to have growth.

we do not. as buybacks, we do it on the cordova quarter basis. i'm pleased we've announced $3 billion today. it is a function of the high returns we generated on the good profit performance we generated. the other thing we announced today is a new target, ms. getty returns for 25. that's a new piece of information we put into the market. that is evidence of our covetous of our ability to continue to deliver good, strong financial performance. we built alternative revenue growth. as interest rates come down. >> the stock is up 3% in the

hong kong session. almost 50% you today. more than half in the second quarter. one that has forced the playmaker to cut costs lower that the anticipated aircraft deliveries. >> we have underestimated the risk we signed the contract away. so we have had to -- these are our challenges. >> let's get more from bloomberg's benedick,. west as out to you from these airbus results? the headline around the space division was dealt when i spoke to but you are the one who is granular on this company so

maybe this was front and center. what stands out to you? ? right. this isn't the one we talk about a lot. alsodefense products. it is the space division where they had troubles. typical most one building in additional costs. that really hurt the overall picture, the overall operating profit. in some ways from the good news is out with a bat's was out. they reported for the minorities a couple weeks go. the investors knew the second quarter was a tough one. they put some counters onto those earnings. they are taking a hard look at it. interestingly, when asked, it might mean what he read of it altogether.

the coo kept a little bit heavy list but he said all options on the table. interesting. there are some optionality around the space division at airbus. this may underestimate the risks around the part of the business. 12 he let his fantasy from holly which has its own idiosyncratic challenges. >> yes. we will get the boeing numbers later today around midday in europe. as you succumb about has had a real tougher step of the year and it's in some ways a forgettable first half, the couple has had their liberty through massive amounts of cash. the question will be if they can stem that bleeding in the second half of the year. will things start looking up a bit? will aircraft deliveries improve again? the company really downgraded its output and the rest half of the up. the really slow down the factors to make sure they can get the production back in order and

what people would be looking at, investors would be looking at for the second half is if they can get production back up. can they can catch back up? most interestingly, who will run all this? who will oversee this turnaround? difficult, he had said he wants to lead by the end of the year at the latest but who knows? there is something we will definitely be looking out for. west it might be a bit of a poisoned chalice. thank you very much indeed for the preview with boeing and wrapping the detail around airbus. we appreciate it. let's get to the politics of the u.s. right now. , the harris has wiped out telephones lead across seven around states. this is the u.s. five president driving away from enthusiasm among young, black and hispanic voters. quick the momentum in this race is shifting.

there are signs that donald trump is feeling a. while donald i do hope you'll reconsider to meet neil the debate stage. if you got something to say say it to my face. >> let's get more on today's peak take. kriti gupta is always a question u.s.. say to my face. that is what the soundbite come through from, harris. the mood has been electric according to the people on the ground. place that is the fear especially in the face of confidence she is showing. her critters was that she can show the same confidence.

that is where the momentum is coming from. it is a couple of kama harris. they saw the last time she ran for president. the swing states are what matters compared to her predecessor, joe biden who was lacking at a two deficit. , harris is now being donald trump to your point. it's physically welcome to arizona and divided. two states very important for the international audience. arizona despite having senator mark kelly and a potential vp contender for, harris's campaign is largely a republican state. they have a lot of energy infrastructure. they've been one that is a red state. that flick in harris's failure and that is a big to. nevada has always been it emphatically state but to your point, this is largely thought of as a honeymoon phase and that is why september matters a little more because she just out and asked her campaign. she is just now getting a social media campaign. we still have three months to go

. the question is sustainability, it is momentum. >> this has been the cause with which the democrats have been hitting the republicans, self-made consul by the republic's witches project 125. now we hear the head of that project -- project has been removed. what is the significance of that? this is something that has been -- i want to put this in context for the audience. this is a set of policy proposals that have been backed by previous members of trump administration but has been kind of spearheaded by something called the heritage foundation, a conservative think tank. it is also known as me in mean the backer of ronald reagan. this big figure in the republican party. he took a lot of his policy proposals from this think tank. that being said, president trump has pushed back from this project 2025 story.

for lean into that mega policy agenda but is also getting that from, harris. , harris excepted the endorsement from president biden she said we are going to take down donald trump at his project right when he five agenda and we should make clear that he himself has said he does not associate with it, he doesn't agree with it despite some of his former administration members pushing it. it speaks more to donald trump's kind of lead and dominance over the gop with an power struggle. practically pushing back on some of the biggest christmas, harris is throwing at his campaign. quick that was kriti gupta with a pointed fork harris and what it means at the top of that project 125 plan and how that informs policy agenda. thank you. but you were coming up today. a massive day for these markets in terms of what is on the agenda for sinful banks.

the soft is over in germany. to: ternium you can sum. we will get boeing earnings. this is really crucial in terms of textor, the meta-earnings after markets and then the big one on the central bank front, 7:00 p.m. phuket time. it is the fed rate decision for the by the press conference with jay powell. will they clean into market bets of a september cut? the person of the cycle? coming up, we will speak to ubs,

what she is inspecting from the fed later today. how that ties into the ecb decision-making and lookahead to the bank of england which is finally barest in terms of their decision tomorrow. stay with us for the economic analysis, that is next. this is bloomberg. his

after the boj, u.s. federal reserve is up next. bloomberg intelligence expecting a holder today with a hint that a september cut. not just on the fed but the boe which meets its decision tomorrow. take you very much for joining us bright and early this wednesday morning. talk to us about the fed and how it informs the taking of the

ecb. there is the overhang of the fed. if they do not signal that september is in the cards, if the language is not there, does that handicap ecb in terms of its next cut? does that derail expectations around september for the ecb? if we try to take a step back and look at our quarrel, we have been is making the ecb to cut rates in the december means for some time now. our u.s. colleagues have changed the call, they brought it forward. in that sense, in terms of this we think signals of the fed are less relevant for the near term. the ecb decision and the september meeting we've seen from a number of governing cartoon numbers. the emphasis on incoming data around wages, inflation. the comes to the september meeting specifically, we think to your specific data, that will drive the ecp decision. >> do you have a clear steer of

what the euro is shaping up to be? a little bit of strength coming up. we get more data today. it was like a mixed picture. the challenges set of data for this ecb. it is very challenging, very mixed data. but in the growth and inflation side. headline inflation. we are from the ecb is they are expecting mixed signals. looking forward to the next ecb meeting is in september. the particular, they will be paying a lot of attention to wage data which is yet to be released. that is coming out in late august and early september just for the meeting. in that sense, that data is probably going to be good. you think they cut tomorrow?

it's finally balanced. what moves the needle and what is the sequencing then after that cut that u.s.-backed to come through from the boe tomorrow? if you look at the market pricing, it is a 50-50 chance of recut or stay on hold. our call will be for them to go ahead with the cut. in terms of key drivers behind this we think that from the data perspective we are essentially there. when we look ahead headlight inflation, it is a 2%. exactly where with specters to be back in may. this was ignoring we are than what the boe expected. but if we look at the june meeting for several mpc members, the fact that these were largely driven by a baltic opponent, this is really change the overall picture in terms of dissipation or trajectory. finally, when we look at the last labor markets report, we started to see more signs of struggle wage growth so that.

from the data perspective, we take all the factories -- all the factors are there but where we are less confident is by the lack of communication from the npc come the fact that we haven't heard much from them since pre-election and in the meantime we for changes in the personality with the jeopardy governor being replaced. we think she is the key voter going into this meeting and a lot of it will depend on her stance about which we know very little at the moment. >> thank you very much indeed. european economists at ubs. stay with us. this is bloomberg. ♪

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anna: good morning from london, one hour from the opening trade.