♪ dani: good morning. 6:00 a.m. in the city of london. i'm dani burger fair daybreak europe. it's jobs day. wall street closes at a record as traders await u.s. payrolls data. the return to office in disarray. blackrock and amazon delayed getting staffers back as the delta variant spreads. and as earnings season winds down, don't miss our

conversations with the cfos of allianz and ing. a quick look at where your data sets as we await payrolls coming in 7.5 hours from now. but who's counting? until then, we're getting a firmer dollar, 10 year, and s&p futures weaker after records. but we're waiting patiently for jobs data, expected to come in at 860,000 jobs. let's bring you earnings across the wire, allianz reporting earnings, seeing bowl year at the high end of their range, sitting at 11 billion euros to 13 billion euros. the fact that it's at the high end of the range is significant. allianz announcing a probe from the doj and the u.s. over some of their investor funds, also saying they're seeing second quarter eps at 2.2 billion euros, as well. so again, it's the operating

profit they're seeing in the upper half of their target range, which is important. and don't miss our interview with the cfo of allianz. that's coming up later this hour. let's stay with the financial industry and get to ing numbers, which are just breaking second-quarter net income, coming in at just under 1.5 billion euros. the expectation had been 1.15 billion euros, as well, also going to make additional distribution of 1.70 4 billion euros. second-quarter net income coming in at a pretty solid beat, expecting some shareholder distribution, a payment of $.48 per share in october, as well. so a beat, and also some payouts to shareholders coming on deck, as well. let's get further into the conversation with ing. joining us is the ing cfo. thank you so much for joining us this morning. so, your numbers coming out

looking like a pretty hefty beat. really, what area of the business propelled these figures higher than expected by analysts? >> hi, good morning, dani, and very nice to be on the show. i think the biggest driver has been the commercial activity across the board. i think all of our divisions are doing well. but i think what really stands out is the performance of our customer base, whether they are getting much more active in terms of their payment activities, and also their credit profiles are improving significantly, and that has resulted, to a degree, in lower risk off and negative risk off. and i think we have a big boost in seeing income growing by about 18%. dani: leaking of a big boost, planning to distribute billions of euros to shareholders after september 30. what does the path of payouts look like? do you see returning growth when

it comes to capital shareholders? tanate: yes. what we announced today is really two. we're paying a $.48 per share dividend, 1.4 billion euros, and we're in the process of getting the necessary approval for further cash dividends or a share buyback. so that is all coming in the next period. dani: what has your communication been like, assuming part of this is the ecb? what has your conversation been with policymakers when it comes to the moves to pay out dividends and buybacks? tanate: i think the conversation has been constructive. we fully understand why the dividend was in place up until recently, because of the uncertainty around covid. given the strength of the banking sector, our customer base, i think it's a good time to return to business as usual, and normal capital returns to the shareholders of banks.

and that's what we see today is more of the resumption of normal business, normal dividend policy. and that's good news for all stakeholders. dani: and your loan-loss provisions coming in significantly less than had been expected, the estimate 282 million euros, as well. the headlines are just coming in, so in terms of getting back to normal, from getting away from this place where covid really impacts earnings, the rise of the delta variant is something that's been troubling a lot of executives. how has that impacted your outlook? tanate: dani, we remain conservative in terms of loan-loss provisioning. but having said that, the macro picture looks a lot better than it did 12 months ago. the performance in terms of nonperforming loans looked better than it did 12 months ago. and quite frankly, a lot of our customer base are coming out of

covid in very strong financial positions, and deleveraging, getting financially healthy. so, i think while we remain cautious, the reality of our corporate lending is reflected in our office which is low for this quarter. dani: looking into the future, as well, not just when it comes to covid, but what about inflation? this is something that's been flexing, regardless of industry, and of course this is important to ing given net income. where do you see inflation going? is it moving higher? and how long-lasting will that be? tanate: i think our view is that the high topline inflation for the next couple of quarters will not last, and that inflation will levitate more towards the targeted 2% by the ecb. having said that, i think we're preparing for at least operating and negative interest rates in the euro zone for quite some time. and as ing, we are busy taking steps to make sure we can

operate profitably in negative interest rate environment. dani: how much of that has to do with cost cuts? you closed some offices, france for example, czech republic. what specifically else are you looking at in terms of those efforts? tanate: i think our cost programs or across the board. we are obviously seeing significant digitization by our customer base, and that has meant that we are reducing our footprint to fit with what our customer demands are. so, reductions in branches, digitizations of our internal processes, and looking at certain geographies which we deem to be super for less -- superfluous. but i think the biggest driver of our digitization is really the sheer usage of mobile channels by our customers, now more than 47% of our customers actually only contact us through their mobile device.

this is an incredible, lasting, structural change from the covid situation. dani: tanate, what does the hunt for talent look like right now? are you considering rising wages, or have you had higher wages in order to attract more people into the firm? tanate: yeah, so i think, speaking for myself, i think ing is a fun place to work. i think it's a place that gives a lot of balance in terms of worklife balance. we pay competitively. and this combination of factors means we rank as one of the best places to work within our market. and we are quite pleased at attracting talent at ing. dani: tanate, unfortunately we're going to have to leave it there. thank you for joining us. appreciate your time. let's get over to first word news with annabelle droulers. hi, annabelle. leigh-ann: -- annabelle: hi,

dani. starting salaries surging at the fastest pace in 24 years. the recruitment and employment confederation say firms struggling to fill gaps in their workforce after brexit reduced eu immigration, and as the pandemic prompts workers to seek more secure jobs. vacancies grew the fastest pace since the survey started in 1997. the u.s. food and drug administration is readying a strategy on covid-19 vaccine boosters. we understand the plan laying out when and which vaccinated individuals should get follow-up shots could be released in early september. some who were jabbed in december or january would need boosters as soon as this month. soccer's superstar lionel messi will lead the only club -- leave the only club he's played with since 2013. they couldn't court him due to financial optical's. he had been expected to sign a

new contract this week. his most recent for your deal, if he met every clause and condition, was worth almost $675 million. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. dani? dani: thank you so much, annabelle droulers in hong kong. amazon, blackrock, and wells fargo delayed return to office programs amid a surge of covid variants. we're going to that next. this is bloomberg. ♪

♪ >> it's difficult to tell what the effect is, except for markets that have closed down. >> trying to get people to

encourage them to come back. the delta variant has changed all that. the new cdc guidelines have changed all that. >> we're we instituted the mandatory mask policy at all of our sites. >> we are strongly encouraging, providing incentives, having good conversations with employees about the benefits. and then implementing the safety guidelines i talked about with masking and social distancing as well. >> we are going to work with governments based on mandates. dani: a number of the ceo's we've been speaking to on the delta variant and the return to office plans. let's stick with that theme. amazon pushed its return to office by september deadline back to january amid a surge in covid cases. blackrock, wells fargo have delayed their plans to october. the money manager said the delta variant raises concerns even for the vaccinated. joining us now for more is michelle cortez, how are health reporter in hong kong. -- our health reporter in hong kong. this really does feel like a

step backwards, so why are companies extending the work from home rules? are they actually going to help prevent a spread in cases at this point? michelle: it is absolutely a step backwards, and that's because of the delta variant that we've all been talking about for the past several weeks, and the kind of impact it's having across the entire world. the bottom line is these work from home policies will slow down the growth of the pandemic, the growth of these outbreaks that we've been seeing, and give us a chance to get more people vaccinated. the point is when people are traveling, when you are in connection with other people, that's when the virus transmits from one person to another. and delta is so much more very will in than other -- virulent than other vaccines, and it can lead to infections, especially in unvaccinated people. while it may slow down the transition, it certainly won't eradicate it. dani: each of these companies announcing a delay feels like it

comes in drips and drops. can you take a step back for us and just explain how widespread these moves are to have people continuing to work from home? michelle: well, across the entire globe, we're seeing these measures. more people are working from home, but we're also seeing things in china, they're not allowing people to go into outside parks and entertainment venues, places where people play chess together outside. that's no longer being allowed. so we are seeing this across the country, of course across the world. mass mandates are coming back. all of these measures are really an effort to try to get this delta variant under control and to allow us to have more vaccinations happening. and that is really the way we are going to get to this out right. dani: a lot of this is happening on the northern hemisphere, especially the u.s., and summertime, it's warm. last year, summertime seemed to be a relief.

how troubling is this that we are getting higher infections during the summer months? michelle: absolutely. we were worried last summer when we saw this increased number of infections happening during the summer. but epidemiologists were saying that's ok. it's because it's a new virus and we haven't seen it before. we are not getting the normal ebb and flow with all viruses, when rates generally decline in the summer. this is the second year we're seeing that, so it raises questions about what does that mean going forward. and certainly going into the fall, if you're going into school, you have people going back to the office as these return to office policies, or work from home policies expire. we can see yet another search, and that's on nash sur -- surge, and that's on top of previous rates because of delta. dani: do we have any sense of a timeline? we have some companies delaying, we're pushing it back. is there a consensus of one

that's being pushed back to, of one we might have people back in offices and mass again -- en masse again? michelle: every company has its own analysis, and every country has its own analysis. you do tend to see exponential growth and exponential decline of outbreaks. the companies generally seem to work in a few weeks to a few months, and they'll set these targets -- september, the start of the school year, the beginning of the year. but in the end, it's all going to depend on how much virus is circulating in their areas at that moment. and honestly, that's an answer none of us know at the moment. dani: right, and hopefully the answer is one that's positive. michelle, thanks for joining us today. that's michelle cortez, our health reporter in hong kong. the bank of england is warning inflation may peak around 4%, and tightening may be needed

soon. governor andrew bailey spoke with guy johnson on tapering and the path for inflation. >> when we talk about the whole process, i would emphasize we are not going to be selling the whole stock because the level of reserves demanded by the banking system now is higher than it was pre-financial crisis. you have to go back there to get the beginnings of quantitative easing. so we don't know because it's going to be very -- when we will hit that steady-state. but we do know it will be a lot higher than where we were before qe started. guy: you have significantly upgraded where you think it's going to be. you do see it falling back towards target? >> yes. guy: given the scale of that, how confident are you in the shape of how inflation is going to develop? is it possible we can see a number of prints above 4%?

what is your tolerance for above average -- sorry, above target inflation over a significant period? i'd be interested to get specific. >> for me, i described a hump in inflation, around 4% of the peak, final quarter of this year, first quarter of next year. of course, a lot of that, we can see it coming now in the sense of our price effects that are built in, base effects, annual base effects, or sometimes price increases. we know tomorrow, there's going to be an announcement. we know it's going to happen. so, those sorts of things you can see. for me, to be more precise on your question, the big issue is inflation expectations. that gets us to the question, are we going to see second round affects? are we going to see it built into wage marketing? are we going to see this becoming more persistent? that's where we have to act.

i say to people, it can't solve a real shortage of semiconductor chips. that's not something we can do. we can't solve that problem. the key question is, to all of those things, first second round of effects, we have to act. and that's why we very clearly signaled today that of course, we will act. dani: boe governor andrew bailey speak into our guy johnson. coming up, it's not friday. it's u.s. jobs day. flashed green ahead of today's payroll report. we discuss america's labor market next. this is bloomberg. ♪

>> is the backbone of global

trade, carrying more than 80% of the world's goods. an invisible industry to many until something goes wrong. but increasingly difficult is the pollution caused by shipping , responsible for almost 3% man-made carbon dioxide emissions. seen another way, shipping sees more co2 to the site each year than france and the u.k. combined. perhaps surprisingly, some are calling for an attack on their own pollution to help bridge the gap between fossil fuels and greener alternatives, which are currently more expensive. maersk, the world's largest container shipping company, wants a carbon levy on fuel, which could almost double the overall cost. while expensive, maersk said it would raise a price of shoes by a matter of cents. the global shipping regulator to move at lightning speed with an even steeper levy on steel to.

if global shipping -- levee on co2. it has to start earnings by 2030. there are possible alternatives. a tax may be one way towards a greener future. dani: a look there at one approach to make the shipping industry greener. we'll be speaking with the ceo of maersk. later. we also have the macro, key jobs data out, estimated about 68,000 jobs. so far, markets just waiting for it. we have a dollar that's a little bit stronger, s&p future session a little weaker, but we're waiting to see what the data will tell us and what that means for the path for the fed. let's get more into this with bruce einhorn, who joins us to discuss the labor market. we also got the latest weekly report of jobs and employment. what have we learned from that? bruce: so, we got data for u.s.

unemployment benefits, and we saw that applications for those benefits down 14,000 from the previous week to 385,000. that was pretty much in line with what economists were expecting, and is a sign that the u.s. economy continues to slowly return to a somewhat pre-pandemic level as the economy recovers. dani: bruce, what should we be expecting for today? the estimates, they range very hot -- very widely at the high-end. 350,000? is it somewhere in the middle? is it going to be strong? what is the market anticipating? bruce: so, market is anticipating something in the middle, as you just said. so we're looking at 870,000 jobs

in july. and we're also, or economists are expecting unemployment applications will continue to ease in the months ahead as the economy recovers. but the big wildcard there is what's happening with the spread of the delta variant across the country, and what sort of impact that's going to have on the job market, significantly. some of the strongest numbers for the weekly results that we just received were in florida and texas, two of the states hit the hardest by the current outbreak. so, there maybe some follow the -- falloff there. the additional unemployment benefits that congress passed early in the year as part of president biden's covid recovery plan, those are due to expire in september. so, those will also start -- and that will start to have an impact on the market.

we've already seen about half of u.s. governors have early ended those programs. dani: we have less than a minute here, but i'm wondering if you can explain some of the seasonality that comes with the summer jobs report and whether we're still likely to see that in the data today. bruce: well, you're right. of course, we do see seasonality's, especially -- seasonalities, especially with students off from school in the summertime. so yeah, we will be seeing more of that today because the numbers we're going to get today are from the month of july. so going forward, that will start to ease out. dani: bruce, thanks so much. that's our bruce einhorn with bloomberg. we turn to earnings the again, and allianz sees profits at the higher end of the target range. our conversation with the ceo,

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>> good morning. this is daybreak europe. it is jobs day. walsh agreed -- wall street closes at a record. return to office in disarray. staffers getting back to the delta variant spread. elian's -- aliance raises its

bid rate don't miss our conversation read forecasting and operating profit for the full year in the upper half of the target range. announcing 750 million euros of its own shares. thank you so much for joining us. let's start in the buyback program. how sustainable is that and ones to come? >> thank you for having me in the show. the second quarter, and also for the six months of the year, the underlying performance is very strong. we are operating with an underlying profit of 6.7 billion. based on the fundamentals of the business, we have revised our outflow to the upper half of the

range read the ability of the underlying performance is very strong. you see this from acted in the solvency, capital generation. we are ahead of expectation. definitely, there is a lot of strength in the business. this trend is across different is 's. from a sustainability point of view, we are deafly on a good track. dani: i wonder if there is any thing in particular that allows you to repel your forecast of the higher part of the range? >> there is the management side root we gave and outflow of 2.8 billion. as of june, we are already 6

billion. there is a lot of strength in management. also, we are ahead of expectations. at the level of we were expecting to have read according to expectation, and life is exceeding expectations. dani: you announced a u.s. doj probe into structural funds. the outlook you gave, 13 billion euros, does that reflected the possible impact from that probe? >> any impact coming from the probe will be reflected low the line. the operating profit, reflecting the underlying business.

not in the underlying operating profits. dani: how does that affect your guidance? >> it is too early to come to any conclusion. what this might imply for our financial results. clearly, the situation we have in the u.s. has nothing to do with our underlying performance. it is not changing our outlook with respect to operating profit read we are going to see if we need to proceed to do anything in the next quarter. this is going to be dependent on the information we are going to receive. dani: what remedial steps have been taken so far, given the probe you announced over the weekend? >> we started basically a review already globally, we came away

and set out to review products performance. we set up a team with the support of legal and economic advisors. recently, we have augmented this effort read we are in the process of gathering elements. this is part of an investigation from the doj. we have been looking to that. we are going to make action if we come to the conclusion we need to do things. dani: the investigation, what you yourself is specifically looking at. is it global investors more oddly you are looking at? >> we are investigating,

reviewing, what is happening in the structure. clearly, we are going to take a look at the global investments in the u.s.. the investigation, the review is limited to global investors in the u.s.. dani: another thing that has affected insurers in europe has been the flooding in germany. i am wondering if there needs to be an examination of how insurers handle climate-related claims, given climate change and the likelihood this will clock -- crop up? >> that is a big topic not only for allianz but the industry. regulators are engaging with us. to understand how climate change might impact the insurance side.

also the investment side. there is a lot of effort to understand the implication of climate change for the society, the community and things we need to be aware of and change to provide an advantage in the others. have a strong financial such as climate change. it might create additional stress as we move forward. you are going to see some developments around this area. dani: unfortunately, we have to leave it there but thank you for joining us. the allianz ceo. alibaba said warn of higher taxes. some units lost their preferential tax status.

this comes as china's campaign to reign in big tech extends to incentives centering around tax. we will stay on top of that story for you. let's get over to the first word news. annabelle: several u.s. firms are delaying plans to office return. wells fargo saying employers will not to return until early october. amazon meanwhile has changed timing. the ukase starting salary surging at the fastest level and 24 years. this after brexit reduced immigration. vacancies grew at the fastest

pace since the survey started in 1997. apple will launch new software that will analyze icloud photos for sexually explicit photos of children. if it detects a threshold, the instances will be manually reviewed and reported to the relevant authorities. some security and privacy experts have criticized the plan. novavax says it asked next to apply for emergency use of covid in the -- for the covid vaccine in the fourth quarter. in a trial in the u.s. and mexico, the vaccine was 90% effective with relatively few side effects. it is approved for emergency clearance in india and the philippines read global news, 24 hours a day. powered by more than 2700 journalists and analysts.

this is bloomberg. dani: thanks so much. coming up his dogs day -- jobs day. we will discuss america's labor market, next. this is bloomberg. ♪

dani: welcome back to bloomberg daybreak: europe. we had some breaking news. alibaba set to face higher taxes from chinese authorities. the hang seng stocks hong kong reversing their gains. looking at a hang seng that is lower by about 0.1% rate alibaba slightly weaker as well. they were up ever so slightly, now they are down zero 3%.

china and the focus as well as what is happening the u.s.. 60,000 is more so. this jobs day getting more importance pinned onto it after a plethora of fed speakers laying out a sketch for where things go. how much that depends on the data we see over the next few months. someone attuned to the data and what means, joining us. a simple question with a complicated answer. what are you expecting out of the jobs report? >> it is going to be a big number. we are seeing a lot of big numbers since the pandemic gdp

data shows there is some uncertainty around that. a lot of uncertainty about the headline number. what the market is going to focus on is what does for the fed ahead of the jackson hole meeting? we are going to be zeroing in on the earnings growth numbers to see what is happening with inflation in the economy, wages. also, the dissipation rate. it is likely the unemployment rate is going to fall. they are going to be watching to see dissipation rates going up. dani: given that specific focus from the fed. and devilish voices coming out, even after a hawkish report, how

high is the bar? how good does this jobs you need to be? >> the fed is not really backed into any kind of corner. inflation expectations, we think they have strong credibility from the market. the inflationary pressure is going to weaken. we don't think there are any particular pressures. as we start to get these job sprints, that does start to meet the feds condition. that is why we are starting to see some of these signs about

tapering, laying out that framework. we think they are going to stay relatively loose. that is going to be a good backdrop for risky assets. >> there are market participants who would like to push the fed. there is an everything bubble and the fed acted sooner or later. where is your assessment on that? >> this is about how much is really the fed in control of what is happening, particularly the longer and of the yield curve. we have seen a drop in the longer and for the yield curve read i don't think the reasons are particularly well diagnosed.

there is a lot of demand for financial assets. longer end of the yield curve. that is contributing to pushing down interest rates. the fed will obviously be watching to see if there are signs of financial instability. except in corners of the market, we don't that is the case. dani: we had some breaking lines, alibaba set to face higher taxes. we are continuing to get more lines of a new focus of china or approach. what do you do with assets right now? you step back and see how this

plays out? >> china does seem to be taking a different approach with listed companies in particular. you have to be mindful of that. the politburo is talking about user monetary policy. what we are saying is look at your strategic allocation to china. this is one of the fastest growing regions in the world. you need to have that allocation. think about where you allocate within that read some of the names in technology, perhaps more at risk is this ongoing regulation. shifting toward some of the more cyclical names. we think there is less risk of

this regulation. we talk about bsg, via mental social governance. the government is taking a harsh tactic. having that overlay in china and asia is almost more important than it is in the rest of the world. dani: you can't avoid china so you have to get or picky so great to have you in with us as always. coming up, we are going to stick with the china story. from video sharing platforms to property and baby formula, china's crackdown is widening as we learn of tax breaks

disappearing for alibaba. this is bloomberg. ♪

dani: is the final days of the tokyo olympics. covid-19 still a concern with record daily cases. within the olympic village and games related personnel, we have not seen any major outbreaks. the infection rate in the olympics has been lower than tokyo read concerns linger with the delta variant. what will this mean for the prime minister in the coming election? approval ratings dropped, following -- falling to 34%. despite the olympics bringing wendy of excitement in the ground and record gold-medal wins, his ratings likely depend

more on covid-19. japan continues to see a surge in cases. dani: the latest on the tokyo olympics. let's move to alibaba, said to warn of higher taxes. bloomberg sources say the biggest e-commerce company has been telling investors they have stopped having customers a prep rental tax status. what exactly are the details of what we know so far? >> this is executives talking to investors. they have been enjoying this parental tax data. that changes now read some of the units are being hit by this change. it is going to go up to 20% read from 8% to 20% read analysts have been crunching the numbers. they say this could lead to $1.7

billion hit for alibaba. it was carved out not just for alibaba but other companies. the broader sector. dani: why are we not seen much of an effect on shares mark initially dropped read now it is up. why the muted reaction? >> maybe because a lot of it is priced in. this is the latest headwind for this company, at the front and center of this regulatory crackdown. all of this has been hitting alibaba. maybe the view is, it is not minor but maybe some of this is already priced in. dani: big tech is one thing. there are concerns perhaps the

crackdown is widening. another would be beijing targeting divorced couples. >> this is around property. operating sector key to the economy. -- property sector key. concerned about speculating in the property markets. we have seen further curves recently in beijing. what you see in china is sometimes couples diverse seen, not because they have fallen out of love but so they can continue to buy properties. that allows them to buy. that is being squeezed. they are trying to get their grips on the speculative paper. dani: what is next? are there other industries china might examine?

>> health care is one. more investors are doing it. we know technology, data security. also, health care. we have yet to see any specifics in terms of regulatory changes. dani: thank you for joining us. that is tom mackenzie. let's take a quick look at where the markets are trading in this jobs day. we have about six point five hours to go. why not stay on the sidelines until then? the s&p futures that are flat with little bit of weakness but that comes after a record level. your european futures session is looking slightly weaker, down about five basis points. that is it for bloomberg daybreak: europe. the european open is next. anna edwards will walk you

through that. this is bloomberg. ♪

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♪ anna: good morning. welcome to bloomberg markets the european open. the cash trade is less than an hour away jobs day. asia slips in covid concerns wall street closes in a record. firms including blackrock and amazon delay going back to the office as the