joumanna: good morning, this is "bloomberg daybreak: europe." i am joumanna bercetche. asian sauce closing in on a four

month of games -- gains as those grow for a soft landing in the u.s. we get the feds prefer to read on the inflation gates get. kamala harris speaks in her first tv interview. she is leading in the most consequential swing states according to bloomberg's latest poll. intel explores its options. the chipmaker speaks with investing bankers to navigate the most difficult period in its history. good morning, everybody, and welcome to "bloomberg daybreak: europe." under their big day for u.s. to deal with the pce number coming much later this afternoon. this after some of a pullback for nasdaq. that was led by losses in nvidia

which ended the session down more than 6%. trading slightly weaker on the session. the dow did make an all-time high. european stocks futures tilted toward the red seen opening lower to the tune of .2 of 1%. eurozone inflation report coming up today after a weaker than expected spanish and german inflation today yesterday drove some gains in fixed income. ftse 100 also seen opening up in the green, but let's switch over to process at an take a look at how some of these other indicators have been trading. we did see upward pressure on yields yesterday, we ended four basis points higher after a weaker than expected seven year option put some pressure on yields. goal trading sideways, but for the month a massive outperformer up 4%, so a lot of money pouring

into the safe haven. a weak month for the dollar, and euro downward pressure coming through after inflation trends. let's turn to have asian markets are fearing with avril hong in singapore. how is risk trading overnight? avril: it is mostly risk in the region. we are back to this mode where good news for the economy is good news for stocks. asian declined to raise four yesterday after upward revision on u.s. gdp showing strength and american consumption picture, but i want to do i like chinese stocks, because they are the ones outperforming today helped along by insurance names helped along by solid earnings. on the mainland we did get a bloomberg's group the chinese authorities good to be mulling leading homeowners switch banks to get cheaper loans.

this is the refinancing potentially give up to $5.4 trillion of mortgages, so this would help to lower borrowing costs for millions of families and maybe have knock on effects to booze consumption. maybe a bit of a mood lifter. as we see the csi 300 today, last trading day of the month potentially going with those gains into the end of the session. keep in mind this is a story that we have seen before in june and july, yet as our colleague mark cranfield has been reminding us on the blog we are 10% down from the peaks we saw in may. the other thing i wanted to highlight is what we are seeing on the chinese currency, offshore yuan hitting the strongest levels against the greenback since june of last year helped along by differentials in the unwinding of the yuan carry trade. today we got a pboc fix that was

strong. the japanese currency, under their what i wanted to highlight in terms of data that we got today from tokyo cpi. it was a core print stronger than expected and a pickup from the prior month, still boosting the case for the boj to hike rates again. if you take a look at the moves, even though it is headed for a stricken -- a second straight month of gains, it was 145.5, so not that much strength. that expectations also matter for dollar-yen. joumanna: looking at the monthly performance they get is 3.5% stronger versus of the u.s. dollar. thank you so much. asian stocks closing on the fourth month of gains lifted by hopes of a soft landing for the u.s. economy. traders looking ahead to the fed's preferred inflation gauge later today. for more guidance on the

potential rate cut in september let's get out to mark cranfield, who joints me now. we have had a busy week of data to look through, starting from a day's jackson hole reaction, wednesday nvidia earnings. yesterday we had gdp numbers revised upwards, which is interesting, but today the focus will be on the pce report. how relevant isn't the gdp reading going to be for trader'' expectations of that september rate cut, or does it got better once we have got the pce report? mark: it certainly has some impact, because at the moment it will have people thinking the soft landing scenario is still intact, that it can still be achieved when you have a good gdp number like that, but people willbably forget about it fairly quickly if some of the other data has underlying factors which are not so strong. today in pce when investors will be looking at closing is the personal savings aspect of those numbers.

bloomberg economics has been highlighting that there are some signs that consumers are struggling. the savings that they had built up during the pandemic period are mostly gone and that they are not able to sustain the savings in a way. that may drag down the inner workings of the pce number, so even though it looks as though it is coming down gently, it may be a harder scenario than people expect at first. that will worried the fed a little bit, because next week we have got an employment report. there are some things coming up in the next few days, starting with the pce that could lean toward risk of a harder lending, and that will be on trader's minds as they go away for a long weekend. joumanna: that is going to be the big question post labor day. let's not forget monday is labor day and a holiday in the u.s. thank you so much, mark

cranfield. in u.s. politics kamala harris has pledged to most of the middle class and negotiate a possible cease-fire in the middle east and her first interview since capturing the democratic presidential nomination. v.p. harris: my agenda includes what we need to do to bring down the price of groceries, for instance, price gouging. what we need to do to extent the child tax credit, take care of children in their most formative years. at what we need to do to bring down the cost of housing. i made it clear that i would not ban fracking. there should be consequences. we have laws that should be followed and enforced that address and deal with people who cross our border illegally. i think it would be to the benefit of the american public would have a member of my cabinet coup was a republican.

we have to get a deal done. this word must end. we must get a deal that means getting the hostages out. let's get the cease fire done. joumanna: let's get more on this with bill faries. this was harris' first interview since she became the democratic nominee. there were a lot of questions directed at her, a lot about the economy. what did we learn vis-a-vis how harris is thinking about her plans for the economy? bill: to be honest, we did not get a lot of detailed policy prescriptions from that interview. vice president harris talked a little bit about how she would go after price gouging in supermarkets and the food sector. she talked about her proposal that is already up there to try to help first-time homebuyers. talked about extending a child

tax credit pick it up for a year or two during the pandemic that was shown to reduce child poverty, and then that tax credit expired. so she talked about those things, but in terms of details, how do you fight inflation more broadly, how do you get at some of the core economic issues that americans they are concerning them, she did not give a lot of details. that said polls show her chipping into former president trump's previously done economic policy. the lack of details in her policy proposal has not been hurting her so far. joumanna: you talk about those polling averages, and it does appear to be the case that harris has pulled even or ahead of donald trump in the latest polls, but will the interview she did overnight add to the momentum, or is the rate starting to stabilize now? bill: it is hard to see how you

add further momentum. she has been riding a wave of donations and positive reviews and public polls. the latest poll shows she has a lead over former president trump in all of the battleground states. that dips and falls into the margin of error, but she has had quite a lot of success for four or five weeks now that republicans and the trump campaign now have struggled to stop. so we will see what happens next. there are about eight or nine weeks to go before the election and very little time for the candidates to change the impressions that voters have of them, but it will also be i would expect a lot of ups and downs in that time, and we saw in 2016 when former president trump was first elected that a lot happens in the final three or four weeks. joumanna: only eight weeks to go.

it has crept up fast. it was a joint interview, we should mention. coming up, intel's call on it investment bankers to help them navigate a path through the company's most difficult period in history. we will have details next. this is bloomberg. ♪ why do couples choose a sleep number smart bed? i need help with her snoring. sleep number does that.

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joumanna: welcome back to "bloomberg daybreak: europe." intel is said to be exploring options to cope with its historic slump. the company is working with investment bankers to help navigate the most difficult period in its 56 year history. annabelle droulers has more of the details. the stock is down 60% year to

date. there was a lot of pressure on intel to do something. what do we know about their plans? annabelle: that is right, a 60% slump so far this year, even in the last few weeks we had earnings out and we saw the biggest drop for intel in more than 40 years. the company lit up plans to slash around 15,000 jobs. there is a huge amount of pressure on the ceo pat gelsinger who took the role in 2021. it seems like he could have been overly ambitious, and intel is talking with its long-standing bankers, morgan stanley, goldman sachs to talk about different options for the company moving forward. one of the most extreme we are sharing about his it could spin off or list its foundry business.

that is an area pat gelsinger viewed as key to restore intel's standing amongst chipmakers. perhaps it will not come to that. we could for instance see a less dramatic step forward before we reach that point. joumanna: again, we were speaking about this earlier on one of the earlier shows and about the foundry business being a business of scale, and it became increasingly difficult for intel to compete with the likes of tsmc. you talk about the spinoff of its foundry. do you know anything about the timing? annabelle: the timing of the options is what we have been hearing from sources. we understand there is a board meeting taking place next month in september, so at that point in time these options could be presented. we don't understand a major move here is imminent. it is discussions in the early

stages, but it seems like pat gelsinger is running out of time to pull off this much-needed turnaround, give it a loss of around $1.6 billion in the last quarter, and analysts are predicting we will see further losses were at the end of the year. pat gelsinger had ambitious turnaround plans, and they have not come to fruition at all just yet. joumanna: bloomberg tech reporter annabelle droulers, always a pleasure. bloomberg has also learned that another lens plans to limit asml's ability to repair and maintain in semiconductor equipment in china. the dutch government will probably not renew licenses to service and provide spare parts in china that expire at year end. let's get more with sarah jacob. what are the new curbs the netherlands are working on with

regard to china's asml business? serco good morning -- sarah: good morning. we are hearing the dutch government will probably not maintain the ability to provide spare parts in china. the move is expected to curb asml's top-of-the-line deep ultraviolet lithography. asml is europe's most valuable tech company. this equipment is sold with the maintenance agreements, and a decision to limit asml's ability to maintain those machines go to make some of them inoperable in china as soon as next year joumanna:. joumanna:what is the rationale behind this latest move? is it purely geopolitical considerations? sarah: a lot of it is

geopolitics because the dutch government has been under pressure from the u.s. government. but is sought to limit china's advancements in the chip sector now and is implemented sweeping import controls, citing national security. we have also previously reported the by administration has raised the possibility of imposing a stringent trade route that allows american officials to control the floor -- flow of foreign products if they contain even the smallest amount of technology originating in the u.s. the u.s. is urging the dutch government to take more action. this is essentially a tightening of those measures. joumanna: we were just displaying a screen showing for asml 50% of its revenue still actually does come from china, so what are the likely

implications of the decisions that they have come out with today, and how will that affect them in all likelihood given that so much of the revenue is still derived from china? sarah: it is a critical market. it is important to mention asml and has never been allowed to sell its extreme ultraviolet technology to china. that is due to the u.s. urging slow down in beijing's measures. john it relies on asml's systems to advance its chipmaking technology, so for asml definitely it will be on sales, and these new curbs under the same constraints as u.s. peers. joumanna: it makes sense. thank you so much for that

report. now to some of the of the other stories making news. bloomberg has loomed -- learned brookfield's and talk with firms to join it's a bit to acquire a spanish blood pharma company. the abu dhabi sovereign wealth fund and a singapore counterpart are amongst the investors brookfield has held discussions with over a potential partnership. no agreement has been to reach any of the funds. i still unit ceo will leave the company along with several supervisory board members and other top managers following a dispute of their troubled future. the move comes after a weeks long tussle between executives and worker representatives over efforts to lower steelmaking capacity to restructure the business. bloomberg is being told samsung is amongst shooters interested in nokia's mobile assets.

nokia has considered several scenarios including selling some or all of the division to combined arrival amid increasing pressure to find new growth and the trouble telecom equipment pressure. also coming up, are we still speeding past peak demand of oil use on our roads despite the slow down in ev's. this is bloomberg. ♪

joumanna: welcome back to "bloomberg daybreak: europe." the growth in electric vehicle sales may be slowing, but peak oil use for road transport is rapidly approaching, and sooner than you may think. here to join us is the head of the bloomberg downstream oil team.

how big is the ev slow down reverberating across the outlook for road if you will demand? >> we still see ev posing a threat to road fuel consumption. ev's are already displacing 1.8 million barrels around the world per day. we expect this number to double by 2027 and tripled by 2029, and it is important to point out that even though ev sales growth so on israel, it is not happening at the same rate everywhere in the world. for countries like china, india, and france we are seeing healthy growth numbers, so in the next couple of years we see ev's sales are despite at a slower rate. in the longer run the improving economics of ev will help continued growth of ev adoption

and help it spread to more markets like india, brazil, and southeast asia. this coupled with the rise of shared mobility and autonomous driving was sent will peaking in 2027, so that is happening soon. between now and 2050 we expect demand to half with the decline accelerating after 2035. without the growth of ev and fuel cell vehicles oil would have continued rising until 2040, so the impact is pretty phenomenal. joumanna: you said 2027 is the year we need to be watching out for. that is the global tipping point. presuming there is some regional variation, so who is going to get some of the peak road fuel demand first, and to what the laggards? >> there is a big regional difference.

in mature markets like the u.s. and europe road fuel consumption look like it is already peaked, and with china penetration almost a 50% bcp coil arriving pretty soon for china in 2025. for other markets like india and other major the living markets fuel consumption is likely to keep growing, but the momentum is likely to slow down in the 20 30's. joumanna: with peak oil, what does that mean for oil producers and fuel retailers? what are the ramifications? >> currently road fuel accounts for 45% of total oil consumption, so that she can decline will be a structural threat for refiners, because diesel and gasoline are their primary products as well as

convenience store chains with exposure to the sector. with a shrinking market in side we will see more closure or consolidation for the sector. we have seen some producers taking action to adapt. refiners have already been growing their presence in the low carbon fuel markets for years. we are seeing a strategy being adopted in europe and the u.s. joumanna: going to jump in there. thank you so much for the report. we are going to cut them a break, but when we come back we will be talking about ge with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place?

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>> good morning, this is bloomberg daybreak: europe. these of the stories that set your agenda. asian stocks -- soft landing in the u.s. we get the latest read on u.s. inflation later today. kamala harris speaks in her first tv interview at the nominee, she's now leading in the most consequential swing states according to bloomberg latest bowl. intel explores its options. the chipmakers speak with investment bankers to help navigate the most difficult time in its 56 year history. welcome again, everybody. we are going to get a check on markets because it is that all-important pce day and we talk about it in the context of it being fed's preferred inflation. the markets yesterday reacting to nvidia earnings coming through in the stock ending the session 6% lower, pulling down the nasdaq.

this morning most of these u.s. majors are seen opening up in the green. the dow actually closed at another record high yesterday. the s&p very close to it, some positivity, some risk on momentum really pervading in this morning session. euro stock futures seen opening slightly weaker. cross cross asset, what we saw as a marginal move upward yesterday and tenured u.s. notes. we traded four basis points higher by the end of the day after a week seven day auction came through putting upward pressure on yields. go also interesting to watch, trading above $2500. for the month, gold was up 4%. so one of the best-performing assets for the month of august. the dollar trading sideways today, but it was a weak month for the dollar, its second week month in a row. actually tracking its worst month for the year now for the month of august for the usd. downward pressure as markets start to price in a more dovish

position out of the fed and about 100 basis points of the great curve as of this point. then the euro seeing some losses yesterday after those weaker than expected inflation prince came through for spain and germany. watch out for later today the aggregate euro zone prints. we will watch out for that as a comes through. speaking of germany, the far right could win the most votes in one of the nation's 15 federal states for the first time in this weekend's regional elections. the former communist ease head to the polls on sunday. let's get more from bloomberg's oliver crook. oliver, good to see you. first of all, what are we expecting out of these elections this weekend. oliver: this is a region of germany where the far-right has done very well and is been rising in the poll. the afd, which is a party growing in germany over the last few months and years dealing in part due to the fact that the economy has been slowing. there's been a lot of questions on immigration.

but we are expecting as though it's closer where the cd you may take the number one spot, the afd will almost certainly take at least the second spot. we are expecting the same thing, taking 30% of the vote, which will make it the biggest party in the east for this region. what is it mean for germany concretely. it will make it slightly more difficult to pass laws within germany if you have more of these non-mainstream parties in the upper house. this is the upper of the two. the other thing that's a real question is for the coalition and governing government in germany. we are expecting single digit results across both of these regions. this is a poor referendum for schulz and the greens that are currently governed in the country and are doing so with great difficulty. in longer-term, i think if you see this weakness enduring in the polls and germany, there becomes a real question, concretely next year when the federal elections happen, will schulz have the popularity to lead the party once again into

the election? these are all the things we are watching going into this weekend. very -- joumanna: very important, just a continuation. what is the latest regarding their reshuffling of these eu top jobs? oliver: tomorrow is technically the deadline when the eu commission every cell in one of the member states. the candidates going to different portfolios that will then later be assigned in september and then voted upon, then you get the new commission. where the difficulty has been, she doesn't have all the names yet from all the countries, so that is causing delays. at some domestic problems in countries that has added to delays. but then there's the question of who they are going to put forward. we know that some of the names are ready for the portfolios, we know from estonia will get the foreign ministry, also noting that antonio will be a part of

the council, but you need to get the names to have negotiations. also at a time when you have domestic distraction for the domestic countries. we just talked about germany and the issues olaf scholz is having there. let's not forget about france. ursula von der leyen needs to get these names in and begins to give out these portfolios so they can get to work for that november 1 deadline of getting the commission started where the priorities for the commission are going to be security and defense, edu values and also this big question for the eu, how do you make your competitive in a competitive global landscape? joumanna: the number one global question. speaking of top jobs we should be hearing, in theory, hopefully in the next few days, bloomberg's oliver crook, thank you so much. switching over to u.s. politics. u.s. presidential nominee kamala

harris is pushed to address economic woes and bolster the middle class that would be heard day one priority in her first tv interview since the d&c. vp harris: my agenda includes what we need to do to bring down price of groceries like price gouging. what we need to do to extend the child tax credit to help young families be able to take care of their children and their most formative years. what we need to do to bring down the cost of housing. joumanna: let's get more on this story with bloomberg's kriti gupta, many people were watching out for this interview because it was the first that harris has done since she became the democratic nominee. she was asked a lot of questions about her policy positions in the evolution of those policy positions. what have we learned? >> very, very little and i think that was almost by design. this is something she and her campaign have been less vocal about because it's something that invites a lot of criticism. and i will go through the

details. we came into this with a little bit of sound in the interview she really targets what's going on in terms of the cost of living. this is one of the key voting issues that is driving the voting decisions coming in november. that among what's happening at the u.s.-mexico border. then of course abortion rights, not to mention gun control. those are the four key issues but the economy and inflation is top of mind and that is the argument of her administration and she is catering to it. and it's how much is a continuation of bidenomics. and the answer is a fair bit and goes one step further. it invites a lot of criticism. the last time we talked about things like price gouging, limiting some of the things that corporations have to do to increase profit margins which affects the ways stock markets trade. last time we had that conversation was when inflation was a subject -- a topic and it

led to richard nixon leading to a 72 day cap on all prices, which had disastrous effects for the economy despite the intention being the opposite. that's the kind of criticism she's dealing with when it comes to her economic policies. joumanna: let's talk about how yesterday's interview is likely to translate to voters to undecided voters. i'm looking at the latest polling averages. harris seems to be ahead of trump. if you just take the average pulling it around 48% versus donald trump 46.2 percent. will this interval drive more momentum or is it a sense that things will stabilize at this point? oliver: definitely the -- kriti: definitely the latter. if you look at what political strategists are saying, she's had momentum driven by key events. taken over from president biden as the party's key choice, then a very exciting vp race in terms of who her topic would be, followed by a pretty energizing

democratic national convention, so she's at a couple key events, not to mention key rallies in places like milwaukee and arguably pennsylvania that have really given her and her base in her campaign a little bit of juice. the question is how long does it last and the expectation is that going into september you will still see things stabilize. this edge, even a less than two percentage point edge, as you point out correctly, may fade as we get closer and closer to the election. joumanna: only eight weeks away. time has crept up on us. bloomberg's kriti gupta, thank you for that analysis. now to the other stories making news this morning. bloomberg understands that the top financial regulator is set to delay the next wave of bank capital reforms. it marks the latest example of a label global rule maker and abandoning its timetable for the changes until u.s. finalizes its own package. sources say that the bank of england is poised to announce in the coming days that it won't postpone its entire package

until january 2026 at the earliest as it monitors international developments. dell outperforms revenue expectations as customers bought more of its gear designed to handle ai workloads. orders of ai optimized servers were 3.2 billion dollars of from $2.6 billion in the previous time. in the fiscal third quarter dell expects sales of 24 point $5 billion in line with analyst estimates. in bloomberg has also learned that nvidia has discussed joining a funding route for openai that would value the ai start about more than 100 billion dollars. apple and microsoft are also in talks to invest, according to sources. if the discussions move forward, it would mean the three most valuable tech companies are all backing openai. looking ahead to some of the major data points that we are watching out for, there is an eu minister with an informal

meeting taking place in brussels. we were just speaking oliver crook about the potential nominations of those seeing jobs. so that's something to watch out for. at 10:00 a.m. u.k. time, we get the italian cpi print and the all-important euro area cpi print after spanish and german inflation figures yesterday came in lower than expected in the german figure coming in at 2% in line with the ecb target. yet to see with the aggregate figure will look like, analysts say two point 2% for eurozone hold but it is worth pointing out that yesterday's lower than expected inflation data did drive a rally in fixed income. so something to watch out for as we head into the ecb meeting. 1:30 pm at u.k. we have been talking about this u.s. pce number to watch out for. the fed's preferred inflation date. will we see this inflationary trend. how will impact market expectations of what the fed does in september. a big one to watch. at 3:00 p.m. u.k. time we have

the university of michigan argus consumer sentiment survey to get a more complete idea of how u.s. consumers are viewing the economy. coming up, we will be speaking with the head of market analysis as traders look ahead to the release of that all imported pce print. this is bloomberg. ♪

joumanna: welcome back to bloomberg daybreak: europe, the fed's preferred inflation date is due today. the last before potential rate cut next month. bloomberg's mliv married joins us now. get a little bit more granular detail on what to expect from these numbers. i'm just looking at expectations here for the year on year

figure, people are expecting 2.5%. but perhaps the upward surprise could come from the core pce figure, which is expected to come in at 2.7%. why is it a surprise, because it will be higher than the prior month. that's not what the fed wants to see. >> it's not, but it's really about if it comes in line with expectation. what the fed did his pivot the markets expectation and the focus on the labor market. jerome powell made a very clear he doesn't want to see any further deterioration in the labor market. yes, pce is important but it comes down to the labor market and jobs to really determine the path of the fed. so whether they cut 50 basis points, 25 basis points and how much more they cut and how much market expectations goes on the back of it, i think we will be more dependent on a labor market than what we see from core pce. joumanna: it's not just the u.s. or we get important inflation

figures, we got the euro zone figures, after the downward surprises from spain and germany, how are the expectations evolving into the euro zone inflation print? >> we could say another downward surprise just fuels expectations of more rate cuts from the ecb and the ecb becoming a little bit more aggressive. at the end of the day for them it really is about their inflation mandate. as long as they move more and closer to 2%, there's no reason for them to hold back and move towards neutral. there's no reason for policy to be restrictive if you have inflation going towards that 2% target. with euro zone becomes more critical, especially at this juncture of how quickly the ecb will continue to cut rates joumanna: and was one of the

reasons why we saw turnaround was the euro dipping after the inflation numbers came through. thank you so much. joining us to discuss more is head of market analysis at rbc parental. good morning to you. i was just taking a look at how markets affair this week and there have been so many events for investors to piece together. but at the end of the day the dow was at another record high. s&p is close to another record high. are investors getting ahead of themselves in terms of what they are pricing in and what they are pricing out of the fed by the end of this year? 100 points of basis rate cuts priced in. >> thank you for having me. i do think for the bond market there seems to be a lot of rate cuts priced in. as you mentioned, 100 basis points this year and further 120 five basis points for next year. i think it depends on the economic situation. if we continue to see economic expansion, i don't think these rate cuts are justified.

on the equity market there is good news. the economic resilience is there. investors like those shows the u.s. consumer is actually resilient. and of course we are looking at a bunch of rate cuts. although i say, the rate cuts are priced in, but we are turning to the easing part of the interest rate cycle. i think that is significant. of course corporate earning is so far, so good. a cloud has been lifted, so there are just more reasons to keep rallying. joumanna: i wanted to ask you about nvidia because so much of the leadership this year has come from nvidia, from a handful of stocks, did we learn anything yesterday from nvidia's earnings that should dent the hype around ai? >> we think the results are actually very strong in terms of the actual earnings in the

guidance. i think that investors could be sensitive around the earnings season. things could get volatile with lofty expectation going into the event. we don't see the numbers as anything concerning, it shows demand is still very strong. demand from hyper scaler and from a broader range of companies. we think that ai infrastructure is in tack and we continue to think nvidia is a leader primarily because of the whole developer ecosystem. we appreciate that the stock is volatile, so we think it is a better way to assess ai and semiconductor related stocks. joumanna: you not worry about concentration risks. it was only a couple weeks ago we talked about this big cut in

the market because of such concentrated positioning and specific traits like the yen carry trade, like the nikkei and some of those ai stocks. are you not concerned that there is too much of a buildup of positioning in just a handful of pockets and some of these assets? >> i think these concerns will continue. i think we need to see ongoing results from these type companies. i think in terms of the market growth, as you said the dow's record high. the s&p 500 has reached a record high, so there seems to be more broadening out of the equity market rally. so i think that is actually a positive development for us to see. so overall, as long as the economic resilience continue, if we get the rate cuts, i think it's ongoing and the smaller mid-caps will continue and beyond that they will continue. all the companies out there are going to benefit from these

easing financial conditions. joumanna: i want to ask you about one quite successful position you have in your portfolio and that you are overweight go. go had another stellar month up 4%. what you think -- why do you think gold has done so well this year and do you think it has legs to continue going? >> for the first half of the year gold prices were disconnected from key fundamentals, which is real interest rate. there are other supporting factors such as central bank buying and from emerging markets and i think chinese households also buying gold because the lack of investment opportunities. the house prices and equity prices falling in china. so it is alternatives. that is the structural element. but in the past couple of months gold prices have more in line with real bond yields which

means moving it together. we think that this would be the driver going forward given that our view is lower interest rate and we think real bond yields are going to go down further in the u.s. joumanna: very clear. always great to talk to you. thanks for joining us on this friday. plenty more of coming up. stay with us. this is bloomberg. ♪

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joumanna: welcome back to bloomberg daybreak: europe. we will round out the show looking at charts we think should be on your radar. namely, let's start with the pce print because it will be a major focus for the investment community as we head to the data print in a couple of hours time. here you could see that the

trajectory is quite clearly moving lower. there has been a disinflationary trend very pronounced in the u.s. but you want to watch out for core pce, which we were just talking about. if it comes in at zero .2 month for not -- month for month it would lead to an analyze -- annualized 2.7 percent. despite optic from where it was a month before but at the end of the day the fed has been emphasizing the weakness in the labor market. perhaps investors will be willing to look through that data once it comes through. keep an eye on that trend for core pce. but it's not just u.s. inflation, we are also taking a closer look at euro area inflation. it will be a key signal as we head into the ecb's meeting next month. about 80% probability of a rate cut is now priced in for the ecb in september. we are expecting further moderation to the headline inflation number. the last came in at 2.6 percent. the consensus is that it will come in at 2.2. we might get an even lower

number, so you can see the whisper number for euro area inflation is actually lower than that two point 2% expectation. finally it is the end of the month or close to the end of the month. let's take a quick look at how cross assets performed throughout the month of august. you could see it was a pretty good month for commodities, for fixed income, for equities, but not a good month for the dollar. it is two months of decline for the usd, back to back its worst month for the entire year for the ust as markets start pricing in a more dovish fed for the rest of this year. but that was it for daybreak europe, i'm in dubai, stay with us because the opening trade is coming up next. this is bloomberg. ♪ your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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