manus: i'm manus cranny in dubai with the stories that set your agenda. surprise rate cuts. china unexpectedly lowers the keep borrowing comps as retail sales missed the full count. bond yields slump. $532 million a day. that is the daily profit of saudi aramco in the second quarter, the second ever by any listed company. plus, a u.s. congressional delegation arrives in taipei after a visit by nancy pelosi spurred china to launch its most aggressive military drills in decades. warm welcome to the show. we spoke about a bear market rally. are you reading michael burry's tweets? either way, it is an equity rally that has been much

maligned and deeply questioned. i had a conversation with hsbc. we are coming off the back of this trifecta of misses in the china data, which we will dig into in a moment. dennis gartman says you have to cut stocks. he recommends them cut 2% to 3%. this is a bear market rally. he or she who loses the least will be the winner. stocks are lower this morning, nasdaq down by 0.25%. there is a quantum of bad news coming in across the asset classes from china. let's talk about the cross as sets because we have a lack of believe in the equity narrative. but for the bond and oil market, oil is down by 1% this morning. could iran come back into the fold if they get the sanctions they wanted lifted? that is pressing on the supply side. 10 year yields are rising. there is a split in the camp whether we get 50 or 75 basis points. the market says 60 basis points

the september meeting. there is a long way to run until the september meeting.the hedge funds are the biggest sellers of 10 year paper. bitcoin, up by 2.25% on the back of this relief rally and equities. i thought we would show a little manifestation of the china weakness. you are looking at the credit impulse, the weakest since 2017. iron or producing the least amount of steam since 2018. the underbelly of china is malevolent, one could say, in terms of sentiment. enda curran brings us the very latest on that. stevens a chance key has a latest on the aramco earnings. bruce einhorn will take us through the lines on taiwan. juliet will wrap up the session with rate cuts and toxic data. let's get to china. the central bank cutting interest rates to ramp up support.

for more, let's bring in our chief asia correspondent enda curran. the cavalry have arrived, but are they sufficiently armed and equipped? enda: weakness across the board, manus, in china's economy according to this data. july was expect it to be the recovery month. instead, we saw figures for retail sales, industrial output, investment activity all falling. more signs of weakness in the property market in terms of new home sales and prices. as you mention, all of that forced the central bank to cut its key interest rate for the first time since january, and a sign that shows you how concerned authorities are about those state of the economy right now. there was modest good news on the unemployment front. unemployment text lower to four 5.4%. when you take it, the recovery in china appears to have spluttered out already.

it is crying out for more policy support. as one economist said, the whole picture is looking quite alarming as china heads deeper into the second half of this year. manus: thank. enda curran, our north asian correspondent. saudi aramco posted the biggest profit of any company ever. high oil prices and production helped. stephen is with us. these are blistering numbers. i don't think anybody is surprised they were so good. i think maybe some are surprised there wasn't any salivating extra dividend. stephen: when you look at the other big energy giants around the world, they are having a similar giant boost in prices because oil is expensive. because of that, they are increasing their dividends to the folks who own their shares. but saudi aramco did not do

that. instead, they are going to try to reduce their debt and invest in future production. they look over the next decade, oil demand will increase, according to them. they say the energy transition aside, demand for oil and oil like products will increase when you invest that money to boost output, particularly from a maximum of 12 million barrels a day to 13 million barrels a day. that is one of the things they have been looking at. it will be very interesting going forward whether there is more windfall. this could be the peak for saudi aramco profits, unless oil prices jump back up to where they were a few months ago. manus: stephen, thank you very much. the very latest on the aramco numbers. a u.s. congressional delegation has landed in taiwan for a two day visit, testing china's reaction after the house speaker nancy pelosi went earlier this month. joining me now is bruce einhorn. there is no real escalation

online, as far as i can see, or is this the calm before the storm before this delegation's arrival in taiwan? who are they, and how high up the pecking order are they? bruce: i think that is an important point. there are very few people as high in the pecking order than nancy pelosi, who is the speaker. that was the first trip by a speaker in a quarter of a century. this trip is led by ed markey, who is senior senator from massachusetts, along with several congresspeople. but the visits by congressmen, senators to taiwan are not unusual. there was a visit late last year by senator bob menendez, chairman of the former really -- foreign relations committee. up until nancy pelosi's visit,

china's reaction has been to express displeasure, but they have not lifted things in the way that they did following the visit by the speaker of the house. we will see what happens this time. senator markey and the others in the delegation our meeting today with the taiwanese president and other officials. they are also meeting with business leaders. the response we have so far from the chinese embassy in washington, obviously displeased. interesting they don't accept the argument that the united states has separation of powers, there is the president, executive branch, congress, legislative branch, and they are co-equals. the chinese statement is there is separation of powers in the united states, but each power is part of the broader national power representing the united states. the chinese spokesperson vowed resolute countermeasures following this latest visit. manus: bruce, thank you.

let's see what that holds for the world. to asian investors, they are grappling with disappointing data, a surprise stimulus from the pboc. juliette saly has put the market reaction together for us. it is torn between the data and the delivery from the pboc. juliette: indeed, manus, and also what it means for the banks next week. will they cut their loan crime rates? -- their loan prime rates? what we are seeing is a big rally in the bond market and china's 10 year yield dropping by about seven basis points. this is one of the biggest moves we have seen since the onset of the pandemic. we are seeing this play out into the currency market. let's have a look at what we are seeing with the offshore yuan and the aussie dollar, both weaker against the greenback on the back of this disappointing data we had that end up to -- that enda alluded to.

we have seen the stimulus in terms of the rate cut for that one year mlf and the seven day reverse repo giving stimulus or support to asian investors. but it is being driven by what we are seeing in japan. the nikkei an outperformer. that index close to erasing its losses for 2022. manus: thank you very much. very since angst, to the point, currency under pressure. coming up, the chinese economic a dutch economic recovery weekend -- economic covering weakened. our guest is with us. is she part of the bear market rally? plus, the u.k.'s labour party calls for an energy price cap for the country, facing its worst cost-of-living crisis in decades. more on the story right here on bloomberg. ♪

manus: that is "daybreak: europe ." your monday morning kicker for risk. the economic recovery weekend in july. fresh outbreaks weighing on the consumer and business spending. industrial spending and retail sales missed analysts estimates. earlier, china's central bank took a surprise step, cutting its key rate for the first time since january. we are waiting for the fed minutes to hit the tape this week, which may review clues on -- may reveal clues on the size of the next rate hike. a lot has changed since the last rate hike. our guest is the head of equity strategy. i don't know if i read one bullish note over the weekend. dennis gartman wants to cut risk.

you've got michael burry sending out really scary tweets talking about the year 2000, enron, 9/11. it is all bearish rhetoric, yet this is a hard rally to miss. how convinced are you this equity market rally will hold globally? let's start there. guest: what we have been seeing this whole year is rallies and pullbacks. i think this is what was expected when we have a raising rate regime. you have growth slowing as well as the supply chain constraints we are seeing. this current rally you are seeing from june 17, which was a 10% rally in global equities, about 17% in the s&p 500, now of course every single investment house is trying to figure out the way the s&p 500 will end this year. manus: where are we going to be at the end of the year? guest: our estimate is for

41.25, and that was based on a reasonable price. we are not able to -- most houses are in a state of flux because earnings have surprised to the upside, so we talk of recession risk. but will we see it this year? unlikely because equities usually lead economic growth. manus: we just had these three big misses from china and people are talking about gloom and doom. there is one chart we have created and i think it is quite informative. it is the aggregate financing for china. this is credit, anita. this is perhaps somewhat say the real number. covid closes you down. i can normalize all of those misses. but what worries me is when i see a credit number so obliterated as this in china.

is this a warning on growth for the world? guest: absolutely. china has been an important part of adding to gdp growth in the last decade, the last 25 years. we have seen this china slowdown will impact geography like europe, which are larger trading partners. not the u.s. so much. what we have done for china is we took our overweight off about a month ago, and we have been fluctuating between adding to china or removing because everyone has been convinced that asia is the growth path forward. manus: are you honestly changing as often as that in terms of your conviction? is it that difficult on china? guest: we speak every three to four months. i would not say every month, but we keep thinking china will provide the upside. then you have china growth

slowing down, you have the sec cracking down, you have many china listed companies in the u.s. being taken off the u.s. listings. the government entities today announced. manus: it is like dating in dubai, littered with potholes and disappointment. you talked about the s&p at 4100. the whole growth narrative has been refused, up 50% from the lows it met in january. i am talking but the nasdaq, up 20% from the lows in june. it is hot. i'm sorry, i shouldn't be so subjective. is it difficult for you to be bullish on growth in a not finished fed hiking cycle? guest: we have never actually stopped being bullish on growth. [laughter] i don't think it is anything new. part of our equity strategy has

always been around technology. we never took the overweight off technology. all we said was look at the select subsectors. we have a huge pull on electric vehicles, seeing the new bill passed in the u.s. incentive has been given in europe. while you have oil prices going up, oil supply is becoming an issue, we think focus on electric vehicles will go up more. nothing has changed in terms of companies adopting technology. manus: i know you don't name names in terms of what you are buying, but let's extract a little. i had lucid motors on, and a lot of headwind is the access to the commodity at the bank, whether the cars, the batteries, or producing them. if you are so bullish on that, is it then i take the branches off that commodity? is it the supply chain into that? is that how you dissect that major bullish call on ev? guest: absolutely.

we look at manufacturers, light vehicles and trucks. we look at the battery manufacturers, the supplies of lithium, you look at the people putting up the infrastructures. manus: are you bullish on commodities as well circling back to that? guest: we have an outlook on oil, which has been our in-house economic research team's outlook, which is oil at about $115 this year. i think it will keep fluctuating on that. a little below $100 right now. but with what is happening in europe and ukraine and russia's supply of gas, it would not be surprising of oil goes back a little bit winter. manus: you are always a good sport on the calls. thank you very much. rolling with the punches. vanita gupta, head of equity strategy for emirates nbd. coming up on the show, several major wall street banks reporting they have begun

offering to facilitate trades on russian debt. important word. what does it mean? we will take you through it right here on bloomberg. ♪

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portfolio. >> 60-40 portfolio, generally speaking for most investors, would make sense. >> we need to give it some more time. there may be better ways to go than 60-40 but as a base case it makes a lot of sense. >> 40% in bonds is closer to five or 10. i think they are increasing it pretty dramatically at the moment as they are looking for secure yields. >> going outside into real assets, real estate, private equity, private credit can be a healthy addition and diversify your returns. 60-40 has been a challenging exposure to have. manus: our bloomberg guests on the 60-40 portfolio split. let's get the first word news with jewels in singapore. juliette: water levels at a key waypoint on the rhine river are expected to study at a low level

this week. many barges cannot translate past the marker at a point west of frankfurt, where the water level is below 40 centimeters. according to data, it is already at about 35 centimeters and is set to drop to 30 centimeters today. the uk's opposition labour party has proposed extending the tax on companies to fund a freeze on energy bills over the winter. the plan will be announced later today and will put renewed pressure on the governor to act. the typical household energy bill could top 4200 pounds by january. salman rushdie is starting to recover two days after being stabbed at a lecture in new york. ap has quoted his agent saying the author is now on the road to recovery. rushdie is said to be removed from a ventilator on sunday and is now able to talk. the author of "the satanic verses" suffered serious injuries on saturday after being stabbed multiple times shortly after taking the stage.

global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: jules, thanks very much. juliette saly in singapore with the latest headlines. several major wall street banks have begun to offer to facilitate trades in russian debt in recent days. that is according to a report from reuters, citing the bank's documents and unidentified people. let's get context for this. paul dobson is with me. we were discussing, we've got sanctions on going, but russian bond trading starting again. can you square that up for me? paul: very much so. it appears from what we understand talking to the banks and the reuters reporters that this is about facilitating closeout trades for customers who have been stuck with that russian bond position for several months already. either wanting long -- either

long wanting to offload them or short. it seems her has been some shift in the permissions granted by the u.s. government in order for those banks to come in, act as the middlemen, to be able to get those counterparties that are stuck in these situations back to level pegging. it is not about bringing back speculate of trading in russian bonds or reinvigorating the market, but purely about working in the customers' interest to get them out of the situation they found themselves in when the sanctions came out earlier in the year. manus: i suppose the question is, what is in it for the banks? writing tickets, earning commission, i can only imagine salivating spreads given this is a distressed seller and a tough market with very few options on where to go to. so i can only imagine this is monster spreads. paul: i guess there is some element of that.

more than anything else, it seems from the comments we have from jeffrey's last week, it is about working on behalf of the customer and doing them a favor in a way, helping them out of the situation. that retention of customer relations, because the banks know it is not great for their reputation to be seen dealing with the russian bonds at a time when a lot of the market is untouchable. but it is really about making sure the customers can flatten their positions at the very least and come out of it. i don't think we will be thinking the dealers are looking to make a huge amount of money in commission, but more about being there for the customer in their hour of need. manus: unfortunately, i suppose i go back to basic principles, which is distressed seller's, and i have yet to meet a generous broker in my life. paul dobson. thank you very much. the very latest on the situation with reducing russian exposure. quick snapshot of the oil markets.

a decline of over 1%. there is no doubt. hsbc said they are looking at global lei's. that is broadening. there is a quantum of misery across the world as three major pieces of data missed industrial production, retail sales, fixed investments. this darkening china outlook really validates the reduction in demand outlook by opec and by the american oil institute. coming up on the show, we delve more into the economic misery delivered by china today and get the latest on the story on the rate cuts by the pboc. this is bloomberg. ♪ millions have made the switch from the big three to xfinity mobile. that means millions are saving hundreds a year on their wireless bill. and all of those millions are on the nation's most reliable 5g network and most recommended wireless carrier. that's a whole lot of happy campers out there.

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manus: it is "daybreak: europe," i am manus cranny in dubai. surprise rate cuts. china unexpectedly lowers borrowing costs as industrial production and retail miss productions. bond yields slump. the daily profit of saudi aramco in the second quarter, the most ever by any listed company. plus, taiwan redux. u.s. delegation arrives in taipei after a visit by ansi closer, prompting china to launch its most aggressive military drills in decades. a warm welcome. a snapshot of equity markets, drifting lower on the back of chinese data. hsbc warning this is an ominous sign for global markets, the

propensity for slowdown around the world. there is a definite risk off tone across the markets. the nasdaq having rallied by some 50% from its january lows, a great deal of scathing, let's say lack of belief in this rally from michael burry, others saying the verily will not -- the air rally will not last long. the dax is up by a quarter of 1% and europe set for a slightly higher opening. let's look at the bond markets. thomas barkan still uncertain whether we go 50 or 75 basis points but certainly the 100 basis point narrative seems to have been exploded off the market. hsbc again on the rise of exposure. iron ore reflecting the disease

on the -- unease on the chinese economy. steelmakers making the least amount of steel since 2018. bitcoin with abounds, will it last? -- with a ounce, will it last? pboc cut its rights -- the pboc cut its rates. let's get to enda curran. this cut, it was the reaction, some would say, to a backdrop that is tough. how tough is it in china at the moment? enda: it looks to be pretty tough. weakness across the board in july. retail sales down more than expected. industrial production down more than expected even though exports are holding up.

investment weaker, especially private sector investment. on the housing side, new home prices, housing investment all weaker. that's why the central bank took the decision it did tonight to lower one of its key interest rates. it hasn't made a move since january. why that move will not be a game changer in and of itself, because the cost of -- because the problem in china is not the cost of borrowing, it does show how serious they are taking these things, trying to pull levers where they can. the other take away all of the data was weak, and july was meant to be the good month, when things pick up momentum again. the third quarter supposed to be better than the first quarter. now it underscores how much pressure china's economy is actually under. manus: just getting some notes from martin malone basically

saying after the next rate hike in the u.s., you will have a crossover between chinese rates over u.s. rates and we haven't seen that in a decade. that may well have a big currency impact. the policy response you have seen so far, given what martin is saying, do you think it will be accelerated, accelerated easing in a key interest rates? enda: this is the big talking point, how will authorities respond? you mentioned the bank side of things, a lot of people said today the move with the mlf's optics. it won't turn the economy around, given covid zero. the reason they've been reluctant to cut interest rates is they did not want to accelerate the flow of money leaving the country. the advantages story over the u.s. is gone. downward pressure on the yuan. it looks like they may have little option now, given the

move this morning. i think the focus will remain less on the central bank and more on the government. will they delve into their bag of tricks to unveil more borrowing, more spending on infrastructure? especially at the local government level? or will they you turn on other policy areas, like the housing market or covid zero? there are a lot of questions about how the government will respond. they've been fairly reticent to take major steps so far, they are adamant about covid zero. i think a lot of folks will be on the real estate sector, and local borrowing and spending. manus: we will put those questions to my guest and the moment. for the global economy and hsbc with me, max cantor was with me earlier saying this is an ominous sign. the lei's for him are beginning

to trend lower. enda: it feels like that, really when you look of the global economy. the standard at the moment is the u.s. economy and in particular the jobs market because china is not proving to be a dynamo for global growth the way it has been. it is not proving to be a dynamo for recovering the way it has in the past global downturns. not only are we seeing us out -- a slowdown but the authorities are not coming to the rescue with major support. china in the third quarter could be something of a buffer for global growth, could put a floor under every thing. this morning, people see the scale of the downturn. anz talking about what is an alarming slowdown in china's economy. none of that is suggesting china will be a pillar for global growth going forward. also there is weakening external demand for chinese good. a lot of producers and manufacturers in china have been complaining for some months that orders are looking weaker. the external story might come

off the boil, take the shine off of china's trade boom at the same time the domestic story is crumbling under the weight of covid zero. when you take it together, it is hard to say china will be a pillar for global economic recovery the way it has been in past downturns. manus: ok, fairly gloom-laden. thank you very much, enda curran. joining me now is my guest, the chief china economist at icbc standard bank. surely we will have a different opinion. good to have you with me. enda used language from anz saying this is alarming in the slowdown, are you alarmed, and could it be a near-term low in the data? jenny: thank you for having me.

i am usually very optimistic, but obviously this set of data does highlight the severity of the challenges ahead, particularly for china, the second-largest economy, and global consumer of commodities. clearly there's some sentiment to be aware of. however, the context is important. given the domestic and external challenges, the current set of data does really highlight it is not really just about the fact that china is slowing, but expectations are very high for a quick recovery we are used to seeing in china. that might not come as quickly as in previous cycles. manus: and that is a risk, isn't it? a target is no longer a target, 5.5% growth from the authorities, it is guidance.

given what you've just seen an aggregate financing at the lowest levels, in the library, aggregate financing at the lowest levels since 2017. that might be the more worrying point because the alpha for the credit system is waning. how much of a slowdown do you think we will get in china this year, and will a crossover into 2023? jinny: the question here really is just how much this zero covid policy will continue and how much longer. we know it is here to stay for a while and that's why we are having this uncertain, particularly in terms of outlook for the economy. that's why manufacturers and the services sector are still quite pessimistic when it comes to boosting their production. on the retail side particularly, the domestic consumption picture is particularly worrying. coupled with the unemployment

situation, we had another record number in terms of youth unemployment this month again. lots of data sets to keep policymakers really concerned about the outlook, but also gives us hope that probably a basket of measures will be there to really boost sentiment. we already talked about it, the pboc this morning, in terms of the unexpected short-term rate cuts, it is really a signal of what is to come. potentially more demand boosting policy to come. and we've had a huge amount of credit and fiscal impulse and that will be with us for the next six months, but is that enough? that is the question. manus: on that fiscal lever they pulled, i know you believe they will have a frontloading of special bond issuance -- will that be an integral part of

that? jinny: we are already seeing record projects start, so we're seeing the peak of those special bond issuances being spent into investments. but it is not coming quick enough. i think in june we saw really early signs of that recovery, on the back of the shanghai lockdown. we have other cities entering small sized lockdowns. that is weighing on sentiment. consumer households as well as businesses. ticket is nurses spending, you need to have some level -- to get businesses spending, you need some level of certainty. that covid zero policy is not helping. i would expect more demand boosting measures will be outlined in the coming weeks and months. manus: we will see what those demand measures are. jinny, thank you very much. i want to reflect on the global

market map in terms of the -- of what jinny and enda had to say. you can see the scale of the standard deviation move in terms of that. you are seeing an outsized move on that. reciprocated with that drop in yield across the curve in china, you are seeing the renminbi offshore declining as well. the move by the pboc is a surprise rate cut across the mlf . and on the seven day repo. what will that do? if you hone in on the commodity complex, you see copper, you are seeing iron ore and aluminum down 2.6%. all on concern of a slowdown in china and the pace of recovery, as was just said, not as expected. that is reflected in the

currencies, australian dollar down by half of 1%. let's get to juliette saly, if i can draw breath, she can save me. she's got the first word news. [laughter] juliette: i've got you. a key point of the rhine river at a very low level and adding to europe's energy crunch. many ships cannot pass. according to government data, it is already at 35 centimeters and is set to drop to 30 centimeters today. u.s. congressional delegation landed in taiwan on sunday for a two day visit to meet with the taiwanese president and other lawmakers. the trip risks keeping tensions with china high after house speaker natural -- house speaker nancy pelosi's visit. japan's economy has recovered to pre-pandemic size. gdp grew at an annualized pace of 2.2%, below the median

forecast of 2.6%. consumer spending, more than half of japan's economic output, led the growth. tributes are pouring in from wall street and beyond for the cantor fitzgerald president and former deutsche bank ceo. his death at the age of 59 was announced saturday after a five-year battle with cancer. he has been credited with building deutsche bank's investment banking business and turning the german lender into a global trading powerhouse. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: thank you very much. juliette saly in singapore. coming up, saudi aramco posting the biggest quarterly profits of any listed company ever. anthony depaulo has the details. this is bloomberg. ♪

manus: it is "daybreak: europe" this monday morning. we've had the saudi aramco numbers, posting the biggest quarterly adjusted profit of any listed company ever, driven by high crude prices and production. meanwhile, a stock exchange finally shows a saudi arabian million are invested more than half $1 billion into russian firms around the time of moscow's invasion into ukraine. let's bring in our middle east energy markets reporter, anthony to palo -- anthony depaulo, fresh from america. good to have you back. anthony: good to see you. manus: the numbers by aramco.

they must be happy. leverage under control, production -- it is a good news day at aramco. anthony: yeah, with oil prices where they've been the first half of the year, it was clear the early profit would be huge. we saw that from some of the international oil companies that reported before aramco and aramco has had some of the biggest profits in the industry, so it was clear they would have huge numbers. the even slightly beat estimates as well. that's also positive news for them. kept up the dividend. they are also paying down some of that debt. they are still paying off the purchase of sabic, which they bought from the public investment fund, they are still paying that off because they stagger the payments. they are working on that, they made an acquisition, buying a fuel business, so they are expanding in different areas. a lot of that cash will be pumped into oil production, that is their main thing, they are

seeking to increase capacity. manus: they are bringing down the gary -- they are bringing down the target. this is a progressively good story, which has an impact on the dividend story. anthony: they are working on the gearing, but they've also taken the foot off the gas on that is welcome around the time of the ipo and shortly thereafter. as big number started to come in, the cfo in recent quarters has kind of taken the focus off of that as such an urgent matter. they are working on that, but it will be something gradual as they reduce that debt. they will focus on that investment bit, and keeping numbers and shape as well. manus: there is another really well read story this morning on the bloomberg terminal, about the prince -- his name naturally

draws eyeballs, that it is about what he invested in in the timing of it. anthony: he bought stakes in a number of russian energy companies in february. the timing, the exact date, before or after the russian invasion of ukraine is unclear, he did some money into that along with some other companies. it is a question -- does he still on those securities, does he not? we know the saudis -- manus: it is the timing of it. anthony: yeah. a potential bump there, if there was no invasion, the value of these russian securities would have gone up, if it was the invasion, it didn't, but we saw saudi arabia stand by russia and not throw them under the bus media -- the bus immediately when allies like the u.s. condemned russia. so there is that link. the economic link, a lot of analysts were questioning what

to saudi arabia have to gain from russia because there's not a huge amount of investment going in. we see the same thing with this investment, the prince put that money in, the value of securities has gone down since then. we are not sure what he gets out of that. manus: we understand product is also flowing from russia into the uae. i think the assessment on the panel with his royal highness it is a european war, not ours. anthony: they don't want to put their fingers into that and get into that. there is an issue that russia is in opec-plus, and they want to make sure the russians are with them in a down market. the invasion has hindered that. manus: there is a phrase in the article, me first. i think we leave it there. they aramco numbers, valerie sent me a number, three other

companies, between them, aramco leaving them in the dust. anthony depaulo has returned from his great american road trip. the u.k. labour party as the country faces a labor crisis. ♪

manus: it is "daybreak: europe." let's have a quick look at the u.k. the main opposition labour party wants to extend written's windfall tax on oil and gas companies -- britain's windfall tax on oil and gas companies.

these are just some of the front pages leading with this in terms of the energy solution. lindsay burden -- lizzy burden is tracking this for us. the head of the labour party has come out, what does he have to say? >> this is really responding to the criticism that there has been a policy vacuum. you have a lame-duck prime minister, we won't know he was the next conservative leader till september 5, and even the former prime minister has been telling us what he will do -- would do if he was in charge. this is the labour party setting out what they would do, this was originally a labour party idea and conservatives adopted it. remember, these aramco profits are symptomatic of what the energy giants have been raking

in through the crisis. manus: and obviously strikes not just port workers, but the barristers as well. lizzy: not just the barristers, but also the doctors are threatening to strike. they trust -- the front runner to be the next conservative leader says she wants to control wages. a argument when the public sector doesn't have the power to set prices. we get jobs and inflation data this week. power is in the workers hands. manus: ok, let's see how the strikes affect the real economy. thank, lizzy burden. morehead. ♪

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francine: