>> good morning, these are the stories that set your agenda. investors fear the fed's next move may be a pause after raises rates to their highest level in 22 years. even as more rate hikes are on the horizon. >> i would say to certainly possible that we will raise funds again at the september meeting and i would say it is possible we choose to hold steady at that meeting. we will be making careful assessments meeting by meeting. lizzy: attention now turns to the european central bank pricing another hike but with economic data looking week, will it be the last? we are live in frankfurt. sales beat, we will bring results as they break, all

coming this hour. good morning, welcome to thursday. no surprise, we've got a 25 basis point hike from the fed yesterday, but really, there is something for everybody in the presser afterwards. yes, we had a nuanced tone, leaving the door open to future hikes if the data warrant. we will get more data later today. the market verdict, a dovish hike. on whether the federal squeeze in another one this year. the dollar weakened and u.s. stocks strengthened, futures pointing to a positive session today. asian stocks have also had a bit of a of, the hang seng performing off the back of volkswagens investment into -- as we look ahead to the ecb decision later, i recall a classic comment at an earlier point in the year, i think it

was july. he said it was by no means a certainty that we get a september hike. so we keep and i especially on the ecb's read on goods versus services inflation later. speaking of earnings, six eval companies reporting on the s&p 500 today, 83 on the stoxx 600 and we can bring you the lake is spray -- latest breaking earnings right now starting with bnp paribas off. second quarter net income eating estimates at 2.80 one billion euros. second quarter revenue missing estimates, coming in at 11.30 6 billion euros. second-quarter quarter loan loss provision has come in at 689 million euros. a very slight miss there.

shares are up 39% in the past year, so outperforming the cut proceeds from the sale of bank of the west, and it will be interesting to get his read on the right path ahead for the ecb. a big day for autos, we've got a couple breaking right now. mercedes second quarter, beating estimates. and adjusted at 3.80 one billion euros. sales also missing estimates at 38.20 4 billion euros.

were sadie's raised its earnings forecast video yesterday thanks to better pricing on its cars in the second quarter. we will bring you an interview with the ceo just after 8:00 a.m. u.k. time here on bloomberg tv. we will look for update on the cargo ship that was carrying 3000 cars, including 300 mercedes that caught fire off the dutch coast yesterday. and out of france, more auto earnings, renault just crossing the terminal. first half revenue coming in at 26.80 five euros, beating estimates. first half operating margins of 7.6%. the estimate was for 6.5%, so a beat there. renault sees operating cash flow at least at 2.5 billion euros. the ceo has been gaining a reputation for beating

expectations. he has been executing a new turnaround strategy as part of the transition to battery ev's, and we will bring an interview with him at 9:40 a.m. u.k. time private manus cranny bringing you that conversation. except, more earnings, roach has been facing pipeline interviews, exacerbating the swiss francs in lost sales as covid takes a backseat. we learned this morning that first half sales come in at 29 .70 8 billion swiss francs, missing the estimate for 30 billion swiss francs. first tap core epf at 10.1 swiss francs, that is a slight miss on estimates but it does confirm the outlook for 2023. shares down 17.9% in the past

year compared to the swiss market index which is near flat. don't miss our interview with the ceo of roach at 9:30 u.k. time. -- the ceo of roche. it was expected to continue to benefit from strong demand for chips used in cars, same story, the market under close scrutiny with demand for chips used in consumer electronics. that's it for earnings for now. we will have more for you throughout the program. now time for our roundtable. today with our europe correspondent, a big day for central banks again. the fed hikes by .25 points.

>> we will be going meeting by meeting. as we go into each meeting, we will ask ourselves the same question. we haven't made any decisions about future meetings including the pace at which we would consider hiking. lizzy: so what were the main changes you detected in powell's comments from last time? >> it was all about the nuance last night. he said it -- he said a few things, one, the staff is no longer forecasting a recession. the fed is following all other economists on the street, capitulating with a recession call, upgrading their view on u.s. growth. he also said he believes policy is restrictive, it just hasn't been restrictive for long enough. if you compare the fed funds rate to forward inflation, it is

looking meaningfully positive. that is key one for powell to hear from him. also he said he can see 2% inflation without big job losses. if you wanted to pick out some bullish comments, those were the ones. the market was fairly unchanged after the press conference but we are seeing some green on the screen as asia picked up the session, most of it led by the meta-earnings overnight. two year yields falling three basis points, and it almost back to the soft landing narrative that he kind of told us if you read between the lines at the press conference last night. lizzy: we've got president christine lagarde expected to follow in the fed policy footsteps with the rate hike later today. maria, what are you watching out for? >> you have the monetary policy

decision itself, and that is not a mystery. no they were very much likely hike by 25 basis points. she already essentially preannounced it in the previous meeting in june, repeated the idea that inflation is somehow cooling down but still seen as too high for too long. therefore more action was warranted, signaling the meeting with carrie again another hike. then we have the core cpi print that came in, you also have to look at the future guidance. the press conference will be key. i know i selling a broken record but it really is about the press conference today and it will be about september. july was seen as a necessity for the european central bank. i will be curious to see what

kind of forward guidance we get our maybe we don't get any. we will wait for the forecast we get in september and just take it from there. lizzy: we will be monitoring the ecb decision with you throughout the day. >> what is been clear is that in the last month we've seen european debt it really deteriorate, clearly showing the ecb is in restrictive stance. there's a lot of questions out there saying could we see the ecb cut before the fed, but i want to remind everybody, the ecb only has one target, that is inflation. they do not have a growth target. lizzy: i want to get back to earnings because you touched on the market impacts.

it was better than expected, meanwhile you have meta shares jumping in extended hours after it posted a revenue beat and a forecast return to double-digit revenue growth for the third quarter. so that's the rest of the earnings picture there. some of the developments we are watching through the day, at 1:15 p.m. london time, we get that all-important ecb decision. followed half an hour later by the press conference with christine lagarde. at 1:30 p.m., key u.s. data, economists expect a slowdown in the annual growth rate in the court -- first quarter, and politics at the white house, president biden toasting the italian prime minister, ukraine likely to be top of the agenda.

>> i think it does have potential, the first advance eating of second-quarter gdp. the pce measure will basically tell us what the monthly pce we get on friday will be, that is a key indicator for the fed that the market definitely watches. there's a lot of positive things going into the second-quarter gdp. first quarter gdp, the biggest drag was inventories which is often quite a big tailwind for gdp prince ahead of time. watch out if that comes higher than expected. if it shows a lower inflation reading alongside strong growth -- growth, that is a bullish sign for the market if in the fed's comments yesterday. lizzy: how important is this u.s.-italy meeting? what are you looking out for? >> the italian prime minister

heads to d.c., we know it is a close and tight relationship, but there will be maybe an uninvited guest, that is of course china. there has been a question for months in the italian government as to what to do with the silk on bell road. it was a g7 country, signing onto the chinese investment plan. at the time this was really a shocker for the u.s. to see that kind of bilateral relationship between italy and china. she may tell by, she doesn't want to make a big deal out of this plan but the indications from the italian government is that they will not renew this investment deal. lizzy: thanks to valerie and

maria. around about the stories you need to know to get your day going in today's edition of daybreak. they have a backdrop for us today, is it the end of the cycle? they have a washing machine to take you through the day. they are leading on the ecb. they also have meta results. profit substantially down from last year. you can check out those stories and more on the terminal. coming up, investors bet the fed's next move might be a skip after rates were raised to the highest level in 22 years. that is next. this is bloomberg. ♪

lizzy: welcome back to bloomberg "daybreak: europe." more breaking news, nestle salt 6%-8% previously. it saying that underlying trading operation -- operating margin for the first tap is 17 point 1%, so slightly beating estimates of 16.8%. the expectation had been progrowth in the first half with a slowdown in the second quarter. the fear had been that fragile consumer confidence would push people towards cheaper brands. the shares have barely moved year to date. i want to get back to the central bank conversation, the fed has resumed raising interest rates, chair powell leaving the door open to the possibility of further hikes.

mark crank you will take us through the market reaction. how are traders playing the fed in asia? mark: asia is enjoying it. they see a fairly dovish outcome. lower dollar, higher equities, a bit quiet in the bond market but no sign of trouble even though the fed did raise rates. a signal that rates in the u.s. have pretty much peaked even though the doors open for september. no one is really convinced the fed is going to do that. of course there is a long way to go. there are two more job reports so plenty can happen. the mood so far in asia today is that people think the fed has done most of what it needs to do. traders are looking for stocks

that will start to outperform as the yield curve starts to take a little bit lower and people get used to the idea that the fed is very close, if not already, finished with its rate hiking. lizzy: we've also got the ecb today and the boj tomorrow. >> i think it's more difficult to sell tickets to the second version. christine lagarde has a very tough job. in a way it is even more difficult than powell because the data is already deteriorating in the european zone. the focus is very much on inflation. the inflation numbers are way too high in europe, and yet there are other aspects,

especially in germany which is the largest economy. somehow they've got to get the message through that they are going to be tough, yet they recognize their coming toward the end of the cycle. there are -- there's room for bonds to converge closer. they will want to look at some signals that we are going to hike today but the chances of september are not as great as to where just a couple of weeks ago. if we get anything like that it would be quite good for equities and the european bond market, especially the spreads would be water. so italy will be watching this with particular interest. lizzy: i want to stay was central banks because bloomberg has learned that advisors to the u.k. chancellor are increasingly

concerned that the bank of england risks raising interest rates too much in the coming months. the majority of the economic advisory council believes the bank should slow it's fastest cycle of rate increases in three decades. sources tell us the view is being taken seriously atop treasury officials in the wake of better than expected u.k. inflation data. coming up, headwinds in the supply chain, more from the world's largest playmaker, next. this is bloomberg. ♪

lizzy: staying with the u.k., andrew griffin told bloomberg that with ceo alison roe

stepping down, it was the right decision. i spoke with andrew griffith about this. take a listen. >> allison and her board have taken the decision that is right for her to step down. i agree with that decision. in a democracy, it is fundamental that people have the right to a bank account, a basic building block of life, without worrying about being debanked. the important thing is that it is right she has decided to resign. we all need to learn lessons from that across the whole financial sector. i just come from a meeting with the biggest -- they express their strong support for our policy. making sure that everybody has

confidence that they won't be denied banking services because of something they believe in. i'm not going to comment on individual conversations that may have happened over the last 24 hours or indeed over the last two weeks. anyone who has followed it closely will understand the government has made his position very clear. the opposition of had nothing to say about freedom of speech and deep banking over the last two weeks and i think that is regrettable. the most important thing when i was working with the chief exec is how we go forward from here, how we had the financial sector do its brilliant job of giving people good service. but also not telling their customers what to think or what political parties they should be members of. lizzy: so in response to those calls from u.k. banking and fintech leaders, can we expect

you to introduce any new legislation, regulations to stop a situation like this happening again? >> yes, the government has acted, also responding to a consultation we ran earlier this year following talk of a free-speech union losing its account with paypal, that providers must give clear explanations as to why their bank accounts are being removed, and also periods to allow people to appeal against that and to seek alternatives elsewhere. it should not happen anywhere when it comes to freedom of speech, but in the water case of how we restore trust in the banking system with this having happen. the new measures announced by the government last week will go a long way to help that. lizzy: allison rose was the first woman to run one of the

big u.k. banks. now none of them are run by women. just that concern you? >> we want the broadest, most diverse representation and good leadership comes from that. it's not about looking at any particular subset, it simply the policies that the bank were apparently pursuing in this case . they will get to the bottom of that. if it is the case they are removing bank accounts solely based on one's political views, that was wrong. we are now working with the sector to make sure it when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working. i've done the diets, all the diets.

before golo, i was barely eating but the weight wasn't going anywhere. the secret to losing weight and keeping it off is managing insulin and glucose. golo takes a systematic approach to eating that focuses on optimizing insulin levels. we tackle the cause of weight gain, not just the symptom. when you have good metabolic health, weight loss is easy. i always thought it would be so difficult to lose weight, but with golo, it wasn't. the weight just fell off. i have people come up to me all the time and ask me, "does it really work?" and all i have to say is, "here i am. it works." my advice for everyone is to go with golo. it will release your fat and it will release you.

it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything.

lizzy: good morning, this is bloomberg "daybreak: europe." these are the stories you are waking up to privette asian stocks again as investors bet the feds next move might be a pause after raise rates to their highest level in 22 years. economist now said the u.s. will not go into recession even as more rate hikes could be on the horizon. >> i would say the certainly possible that we will raise funds again at the september meeting and i would also sets possible that we will choose to hold steady at that meeting. we will be making careful assessments meeting by meeting. lizzy: attention now turns to the ecb. with economic data looking week, will it be the last hike? we are live in frankfurt. plus, earnings season is in full swing. in europe, nestle and renaud

both joined the outperformers. we will bring you all the details throughout the program. happy thursday, welcome. there is something for everyone in jay powell's comments last night. the tone of the presser was nuanced, leaving the door open to future hikes if the data warrant. traders pricing uncertainty over whether the fed will squeeze in another hike later this year. the dollar weakened and u.s. stocks strengthen, futures pointing to a positive session today. asian stocks have also had a bit of a lift, the hang seng performing off the back of volkswagens investment into a company. it was almost the biggest contributor to the tech bull market, that and the autos responsible together for over 65% of the near two month rally. it's almost a parallel of the power of the magnificent seven

in the u.s., you might say. we look ahead to the ecb decision later. the september hike is by no means a certainty. vw earnings we can bring you right now. second quarter adjusted operating profit coming in at 5.6 billion euros, missing estimates for 6.09 billion euros. operating profit five point 6 billion euros for the second quarter, missing estimates there. looking for indications on whether vw can hit its ambitious volume targets, and china also in focus as well as car pricing and the margins from rising ev sales. we will bring you more on vw earnings with an interview from the cfo at 8:00 a.m. u.k. time on bloomberg markets today.

as expected, the fed hikes by .25% -- .25 points. we look ahead to the ecb decision today, president christine lagarde expected to follow in the feds footsteps with the 25 basis point hike. we will speak to our european close foreign -- correspondent who is standing by in frankfurt. first let's get over to the reaction to the fed. take it away. >> i think at this point, investors pretty much knew the fed hike today was going to be baked in. the question now becomes what happens in september. powell wasn't ready to be pinned down on whether he would see another rate increase at that time.

the feds dot plot indicated there would be one more before the end of 2030 -- 2023 but now he's saying a lot of this is data dependent. as much as we can divine out of what powell was saying at today's meeting, it's really going to be up to a lot of the data that comes out tomorrow and over the next few weeks, looking at jobs data to see what exactly happens by the time we get to september. so we will get a better idea of where we are in the tightening cycle and when it is going to end. lizzy: we've got durable goods, gdp out today, but does it pale in comparison to the jobs and inflation data we will get later? >> i think the consumption numbers will be important for us to look at. i do think from where the fed is concerned, they are really concerned about the jobs and inflation data.

because we've got another eight weeks, it's going to be multiple data points coming in. powell has said he is not just looking at one set of data but factoring in a broad spectrum of things that have to consider before we move forward. we just saw cpi cooling by more than we expected. the trend is going to play a role, where they are with the tightening cycle. ultimately it's going to take additional data points as we get into that meeting in september before we can really start to figure out where exactly we are going. it is a -- is it a rate hike or is it a pause? lizzy: meanwhile the ecb is in focus today. maria is covering the meeting in frankfurt. the ecb gathering, what are you expecting? >> we are expecting another hike

, another 25 basis points and that should take the deposit rate to 3.75%. not a lot of mystery in terms of the decision itself. christine lagarde already preannounced the site. she reiterated the idea that yes, it inflation is cooling somewhat payment energy prices go down immediately, headline inflation follows, we know that story. but again it is the potential stickiness in the core inflation that is a problem. we did that -- get that core inflation print which gives some argument to the idea that it is still sick he. -- that it is still sticky. not a lot of mystery, however the focus will be very much on the press conference in september and at that point, it's all up for play. lizzy: there were very slight

changes to the language in the fed meeting. we went from modest to moderate views on economic activity. what are they precise changes you are looking out for today? >> we have seen for multiple meetings, christine lagarde has been very keen on blaming the top central bankers. yes, it is restrictive, but not restrictive enough, the journey continues. maintaining that bravado in the face of weaker economic data, and we also had a london survey that can out this week, it's difficult to maintain over time when you have an economy that is clear to cylinder pressure and cannot catch a breather. to me what will be interesting, and this will really be the focus, weathered the ecb now turns perhaps into a more neutral stance that does not indicate a bias either way.

a lot of data will come out from now until september. perhaps an want to give themselves some room for flexibility. the other issue that will be crucial is a question i am particularly interested in, about the idea of rate cuts. the nightmare scenario would be to have inflation above target and have all of this chit chat in markets about rate cuts that could come sooner than previously anticipated. what kind of language will we get on this, especially if there's massive pushback on the idea not to expect rate hikes sooner than anticipated. lizzy: don't miss the ecb rate policy decision on bloomberg tv followed by the press are at 1:45 p.m. london time. we have earnings, we've had second quarter earnings from bnp

paribas this morning. the french bank relying on tight cost controls and loan provisions to offset a slump in fixed income trading that was worse than what most have seen. operating expenses rose just one point 6% from a year earlier, much less than analysts expected. we will speak to the bank cfo shortly after 7:00 a.m. u.k. time on bloomberg markets today. airbus has been reporting it ditched its previous target to raise plane production past three covid levels. the world's biggest playmaker said it is on track to meet the goal of building 75 of its best jets a month by 2026. boeing generated nearly 2.6 food dollars and cash flow in the second quarter, far exceeding expectations.

benedict, airbus and boeing both delivering earnings that beat estimates. >> we had boeing in the morning and airbus in the evening, so it was a nice read across both companies. as you said, they both eat earnings. last month they brought in big orders at the paris air show, hundreds of planes being ordered there, so that gave them a lot of tailwind. that really helped the cash side , as you mention, both beating on that. is in the outlook that people focused on. they said that we will still reach 75 in 2026 but were going to bury the 65 target. the other wave looking at this is to say we don't want to get

too bogged down in all these needy gritty numbers. we are looking at the big number, the 75. the less charitable way of looking at it is the first -- more transparency you have, the more wiggle room you get should things not quite work as planned. we will see how investors take this on. the numbers came after the stock closed yesterday so we will take -- keep an eye on how the reaction is today. lizzy: we've had all of these supply chain snags. the companies anymore optimistic that they can get that under control? >> we have come through very difficult period. covid era put a spanner in the works, a lot of people missing. we are not out of the woods yet. there are specific issues.

boeing is had some strikes and airbus has had some real issues with in you and -- engine manufacturers. they will need to service 1200 engines in total in the next year. that will cause a lot of headaches for airbus. each company have their own issues, but overall things are looking slightly up on the supply side, but we are not out of the woods yet. lizzy: thanks for that update. coming up, we switch from planes to cars. we are looking ahead to what is in store for european automakers. that is next. this is bloomberg. ♪

lizzy: welcome back.

samsung posted and 86% profit drop in the first quarter, thanks to continued weak demand for a memory chips. that was less bad than estimates. meta shares jumped in extended hours after posted better than expected results. tim, this is meant to be mark zuckerberg's year of efficiency. how is it going? >> they are doing quite well. reels was the highlight for meta, they're very good at copping their competitors so that really has helped them a lot. we can't deny the fact that snape didn't do as well in the last quarter, so they may have taken away some of the advertising revenue from snap during that period. twitters having all sorts of turmoil and meta is jumping on

that bandwagon by bringing out threads. there's a lot of things mark zuckerberg is doing to boost the top line. of course he has been cutting staff over the last year and is hoping the bottom line will be healthier as a result. lizzy: we are at the halfway point for the year. what excites you about samsung for the second half? >> samsung is a totally different company but they do power a lot of stuff that everybody needs in their data centers. samsung had a tough quarter, as you just outlined. going forward for this year, there is some hope that there d-ram products, they are trading their smaller rivals. it's a niche part of ai processors, samsung believes they have a future there.

moving away from chips, they're going big on mobile phones, they've been pushing that for the last year or so. they will have more models coming out and they really think people are going to buy those. that's a real differentiator from apple, that's one area where they can get a bit of an upside against a company like apple. lizzy: thanks for being with us this morning. let's switch to the auto sector. sadie's and renault both benefiting from strong demand. volkswagen posted worse than expected earnings in the second quarter. all of your key takeaways from the auto earnings this morning? >> it's been a riproaring 24

hours for the auto sector here in germany and across europe. it has been a positive story overall. there may be some surprise at how well the auto sector has held up against rising rates and all this uncertainty. run out -- renault had record margins, much higher margins and analysts expected. porsche was still strong, mercedes again up. it's all down to the vans, that will be driving the growth. mercedes amg up 19% in the second quarter. the most expensive beautiful lecture cars up 40% in the second quarter and the g class up 30%. the outlier so far has been volkswagen, a reduced its delivery expectations for the rest of the year. lizzy: i am a fan of the g1.

we've got the hang seng up off the asian shares. the hang seng up 1.12%. >> this is a big play from volkswagen. they are buying a stake in a huge play. they want to develop a car in conjunction with mercedes that will hit the roads in 2026. it follows another partnership from last week with audi, their fourth partnership with local competitors. it's all down to the fact that this is a market that volkswagen has dominated since the 1980's and they are aggressively losing market share and it shows a reversal of what is happening historically where the german automakers would come in with

their expertise and teach the chinese automakers. now the opposite is happening. volkswagen is behind and is relying on these chinese partners to boost their demand and what is their biggest market. it's not the risk were hearing from the german government, this is re-risk. lizzy: treasury advisors worry that the bank of england is overdoing the inflation battle and raising rates too much in the coming months. we will bring you that scoop, next. this is bloomberg. ♪

lizzy: welcome back to bloomberg "daybreak: europe." bloomberg has learned that an advisor to chancellor jeremy

hunt are increasingly concerned that the bank of england risk raising rates too much in the coming months. philip, the majority of advisers are concerned about the boe going to forward tightening. does that mean the chancellor is being told that the u.k. is in for a recession? >> it means a recession is certainly more likely. more than had been expected just a few weeks ago. there is no inevitability about it, that doesn't seem to be -- the whole point is they would rather the bank of england stopped before it does cause a recession. the idea we used to talk about before the crisis took off in the u.k., the soft landing, the perfect landing between bringing inflation down and aborting a

recession. that is a territory people are now talking about. lizzy: can you foresee a time when the chancellor and prime minister become more critical of the bank of england, especially if inflation doesn't half by the end of the year? >> it's tricky, because the idea is that the bank of england takes his foot off the paddle with interest rates and go slower on interest rates. in june at the last meeting when they raised rates by .5%, the chancellor said he fully supported the bank in its relentless targeting of inflation. back then increasing was the right thing to do. the idea that there is now some pivoting, like flipping a coin to the other side, it is

striking. they could obviously be more public about their criticisms of the bank. that would be quite an extraordinary step to take. historically it doesn't happen, it will happen behind the scenes. in gordon brown's opinion, he said he did not feel like he could speak out publicly because it would undermine the integrity and independence of the bank. so it is likely these conversations will just happen behind the scenes. lizzy: the coolest reporter, i can see a surfboard in the background there. thank you for that. elsewhere in monetary policy, don't miss the ecb rate decision

on bloomberg tv at 1:15 p.m. u.k. time, followed by the press conference at 1:45 p.m. u.k. time. we will have a slew of interviews to bring you throughout the morning. we will speak to the shell ceo, and don't forget our conversation with the volkswagen ceo, coming just after 8:00 a.m. u.k. time. also we will speak with the mercedes ceo. of next we have markets today. this is bloomberg. ♪