qwest good morning. this is bloomberg daybreak europe. i am tom mckenzie in london. these are the stories that set your agenda. agent stocks struggling for traction after wall street's tech rally and nvidia's rebound has been officials call for further evidence of cooling inflation before cutting rates. leader of rent is three biggest political -- political groups clash in a televised debate. we bring you the highlights. and at least five people have been killed after antigovernment protests in nairobi turned bad. european markets ended the session. there is caution in the asian markets but european futures pointed to gains of 5/10 of a percent. we will be focusing on w.

the ftse 100 futures here in the u.k. looking to add around 60 points. s&p futures pointing at a 10th of a percent. they gains more than 1% yesterday. lifted by that rebound in and nvidia. the company is back. that seems to have been a problem. we have been hearing in an inclusive interview with the ecb member all the rent about his views, not original. the dollar at 107. the u.s. tenure, 426, just one basis point so far. brent $85 a barrel. up .4%. proper down .4%.

the pricing on copper has come up about 5%. let's check in on the asian markets now. overall standing by in singapore. it is a mixed bag. those expectations of stimulus, the concerns about the economy, that's all helping bonds still. you so that tenure yield is low level more than two decades earlier today. let's let the board. as i see it is really about the inflation picture. nursing data come out from

australia today. the cpi print hotter for a third straight month raising concerns that rates are not restrictive enough. hawkish calls are coming in. they are not pushing out that forecast to the second quarter of next year. a hike in august potentially. the aussie and hitting the highest level since 2010. they are also seeing the buying of the aussie, the selling of the exacerbating the levels of dollar yen. raising the risk of intervention. let's flip the board. even as we keep an eye out on inflation data, it is worth highlighting what we are seeing with the largest trading partner in the forecast for the chinese economy. economists polled by reba actually expected to meet its full year gdp target of 5%. this is a revised outlook thanks

in large part to those exports. the export is doing the heavy lifting amid weak domestic demand but it might not sit so well the sum of its trading partners such as the u.s.. that is something that could exacerbate those concerned about overcapacity. >> that 5% gdp target. it seems at least according to that survey. thank you. joining us out of singapore. the three biggest political groups of attached. presumably they been watching this debate. what were the key takeaways for you to mark >> three men, a half

hour each, constant crashes -- questions about the economy and immigration. and the one were present in the far left, the first was the cost of living. they accuse them of having bankrupted the country and he accused them of wanted to create a cuban style economy. stealing the punchline from emmanuel mack brown. then you had them accusing the national rally of giving up on the cost of living. while they are offering to build prices on essential products and increase the minimum wage to 1600 euros. that measure would be a machine to door -- to destroy jobs.

the prime minister tried to defend mack brown's legacy and one of the biggest classes of the night was about the pension reform. emmanuel mack brown spent months facing protests in the street to raise the retirement age from 62 to 64, -- whether the far left wants to go back to 60 years old for retirement by 2027. a pretty intense debate. we're going to have a second debate on thursday night before the first round on sunday. >> pulls as of yesterday should not cross party in third place behind leftist grouping and behind the national rally. is this debate likely to move the dial in any way?

>> i actually wonder if this could potentially boost the far left because all expectations did pretty well in the debate here. defending his program, meanwhile , the promised of emmanuel mack brown was kind of giving lessons occasionally appearing arrogant which is something you know the french don't really like and the national rally appeared very nervous, looking at his notes. we'll see if this translates into anything in the polls as you were mentioning at the moment, the national rally still have a clear lead. 35.4% in our latest bloomberg poll of polls. we had one pull showing they could get an absolute majority.

>> thank you for the analysis on the back of that debate in france. we appreciated. sue are climbing in days. we will see how many the bottom may be. let's bring in our m life strategist for the take on this. what do we read into the ai theme feeding through these markets given the rebound we have seen for nvidia on the back of that pretty significant drop off every three days? >> one of the things we've noticed from the nvidia drop is that a lot of it was not ruled by fundamentals and a lot of it was billed by some of the technical aspects. even if you look at one of the things we've been flagging as a team, as we are approaching a month end, we could see a lot of rebalancing. nvidia had a really strong run

over the last quarter so people could be looking to lock in their profits at this point. so yes you could see a few more wobbles for nvidia. at the same time we have to keep in mind that this wasn't a fundamentally driven selloff. the ai theme remains very well intact and of words, if rates remain well behaved, a lot of these growth stocks will remain supported as well. >> on the fence big question, this is a debate about whether ai is more important than the fed right now. we haven't seen michelle bowman and we will take a listen to what she had to say. let's take a listen. >> with significant progress on inflation and labor market cooling gradually, at some point it will be appropriate to reduce the level of policy restrictions to maintain a healthy balance in the economy.

the timing of any such adjustment will depend on how economic data falls. >> mary, tied together what we been hearing from these officials this week. do we have more clarity on how the thinking is adjusting? >> it looks like whether you're a hawk or a dove, it is still all about data defend -- data dependency. even lisa cook was on the other side, she is still pointing to the fact that data has to -- the data has to point them to give them the confidence to actually start using rates and start convincing the using cycle. even michelle bowman has also said she is looking at some of the upside risks to inflation that may come through. what comes down to and what it boils down to is just that data

dependency and what we saw today from australia, if it is any indication of the bumpy road we are seeing in inflation, if we are looking at one rate cut this year and if inflation continues to be volatile, there is more than one cutter to cut spirit >> really interesting in terms of australia. >> thank you for the analysis. we look ahead to the inflation data out on friday as well for further clarity. here is the rest of this. here is what we been following from ali wren. we will see what mr. van builds

on that theme. we will have the next debate between the prime minister of the u.k. and his counterpart, the labour party, the bbc debate later this evening. we'll see if it does anything to adjustable gap that remains between labor and conservatives. and at 9:30 p.m., the bank stress test results will be coming through. so lenders and what they can do in terms of capital in terms of investors. coming up, violent protests in kenya over controversial tax proposals leaving at least five people dead. we bring you the context on that story next. plus, nigeria's central bank governor tells us the worst of the country's current volatility is over. more from that exclusive interview. this is bloomberg. music note

i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars.

oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar. i've got another one.

>> welcome back to bloomberg daybreak europe. now at least five people have been killed after protests in nairobi -- nairobi turned violent. was being pushed by president william retail. for more on this story, walk us through the event that led to this moment. of course this is one of the biggest protests in the history of kenya. they mobilized themselves online to protest against the finance bill aimed at increasing taxes. they will pop up whatever liquidity they have left so it was well organized, synchronized. while these people were out in the streets, this bill breezed through parliament and was waiting to be assented while

parliament was taking a boat, some of the processors in nairobi were looking at parliament buildings. what happens next was the most tragic thing and history of kenya. international media was showing at least two lifeless bodies lying outside. even at the peak of tension in 2008, national buildings were not targeted. >> what happens now? given this context around what we've been seeing and the tragedy of the last 24 hours in nairobi, what happens now? what are the implications with or without this bill? >> the president has been stuck between a rock and a hard place because he needs to send this bill into law by the first of july because that is when there was a lot of revenue from the imf but he risks a lot of social and political tension.

words like treason and dangerous criminals saying agencies are now disposed to ensure that the former president became the power distilled to him by the people. they are resolute in their determination as they are addressed. president wayne ritter has underestimated the anger and disappointment that canyons felt towards him and his administration. >> thank you very much indeed in terms of the political tensions and the violence on the ground of course in kenya. not to a jury where the central bank governor says the worst is over for excessive volatility in the country's currency in an inclusive interview, they told us was stabilizing the neighbor is crucial.

>> we are relatively pleased with how far we've gotten till now. in the past two or three weeks after some volatility, we've seen a lot of stability. the rates have been merged. they more or less have one rate. we believe that this is good. again, it gives an idea of where the potential road of travel is for people who are invested in our economy. although i am relatively pleased with where we are, but we don't believe we've gotten into the

position we want to stay at. this continuous work in progress and will do everything we can to ensure that we continue to manage the macroeconomic fundamentals that affects that market. >> do you anticipate more strength by the end of the year? or are we stable where it's at right now? >> that is a question which i would say would depend on a whole host of different issues. i do believe we see the worst in terms of volatility. we are happy that the market is now such that they can sell it to the market. we are also very alive to

observing the manner in which that market operates. that shows it gives the best value that can be accomplished using certain tools but is also important to mention that the money were closely together. we will only give you one picture if you said the manager does something else. i believe that couple mentality is bubble give us the optimum rate. >> that was niger's central bank governor speaking to us exclusively there. don't miss bloomberg's monthly africa amplified program. some of the top stories impacting markets on the continent. the next program on thursday, july 4. will bring you top voices from

the travel sector. there's plenty more coming up. we will keep across and bring more details in terms of the investments in the ev business, there is reviewed in the u.s.. what that means for vw's prospects, the tie up in the details coming up and we also break down the nvidia story for you. we'll give you a bit of analysis in terms of the feds bank stress tests. stay with us. this is bloomberg. music note

>> we are very much moving away from coal to oil, gas to clean energy. the reality is that frequent sometime, fossil fuels will be with us. especially natural gas. that is long.

the world economy cannot go cold turkey on us tomorrow. that is the commitment we made and we made a statement of how aggressively we were going to do it. we laid out these targets. we laid out our measures. >> ok. what's been the response there? you mentioned your subject to the push and pull. i imagine that's the case. some of your critics will want you to go cold turkey on all of these parts of the energy, the energy mix and others will say you're leaving money on the table. what's the response to mark >> i'll tell you the push and pull. in roughly the same two to three week. in january and february, the state of texas and us from doing municipal bond business because the state of oklahoma followed.

we have a retail business in the united states as well, the credit card business. so it affects us. in january we get that and then in february, about two or three weeks later, we get a consortium of euchre universities, one or two of them have been clients of ours for 250 years. saying if they didn't want to do business with us because we were not green enough. so you have the push on the pole across the atlantic. more interestingly, a major financial newspaper based in new york which is global commerce and texas but not what happened to us here. the major financial base is not what happens here. not only are there multiple actions, different actions in different jurisdictions but also it feels like we are playing to

audiences anywhere community that does not compare and contrast. >> barclays ceo speaking to bloomberg's and edwards. now to some other stories making news wednesday, the defense secretary has warned that he worked between israel and the lebanese militant group hezbollah could trigger a new conflict in the middle east. they made the remarks as israel's defense minister visited washington. israel has threatened to open a new offense after hazlitt fired rockets into northern israel. wikileaks founder julian massage has walked three -- walk free from a u.s. court after pleading guilty to leaking national security secrets. this ended a 14 year legal battle to prosecute him from raising sensitive u.s. military documents and cables. julian massage is due to return to his native australia later

today. coming up, as the leader of france's main political roots class in a gated television debate, we take a look at markets ahead of sunday's first round of voting, european markets today pointing today to .5% after dropping 2/10 yesterday. the s&p pointed to about 10% come looking to build on the upside that came through yesterday and lifted for the likes of fedex but also nvidia by the end of the cause. this is bloomberg. want to save on some of the biggest names in streaming on the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month.

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♪

>> good morning, this is "bloomberg daybreak europe." june the 26th. these are the stories that set your agenda. asian stocks struggling for traction as fed officials call for first evidence of calling inflation before cutting rates. ecb rehn tells us expectations for rate cuts are reasonable as he remains optimistic about the economy. >> the big picture is there. and our project is tells us that it's heading for a recovery this year. tom: plus, rivean shares sore as it will invest $5 billion in a joint venture with the e.v. maker.

european marks looking for a turnaround. closed at .2%. today they're at .06%. this week and the inflation data out of u.s. as well. futsi at 18 points. nasdaq futures about 20,000 adding .2% with a boost coming from nvidia. euro focus at 1.07. the u.s. tenure at 4.2. brent at $85 a barrel. leaders of france two main political groups have clashed in first television debates ahead of the first legislative elections on sunday. markets areon edge after a $200

billion stock market route. let's get view of claudia pensali at u.b.s. wealth management. claudia, thanks for joining us. it's down about 7%, less than 2% year to date -- year to date as wiped out many of the gains. do you look for opportunities ahead of the first round vote in france in terms of potential cheap stocks in the french market that you look and could be adding at this point or do you is it on the sidelines for more clarity? >> hi, tom. good morning everyone. so we are still waiting and we are being positive a lot on consumer stocks for a while. but i think around the outcome of this election. so we are waiting for an opportunity after the second round. we still see some spread widening of o.a.t. versus

boonthal and in the french mark. tom: which parts of the french market look most vulnerable to any potential policy changes from a new government, claudia? claudia: listen, i think -- we don't expect many policy change to be honest. i think the capacity of every government, we will be in two weeks -- will be very limited by the fed that france is an excessive procedure. but probably bank if we have widening spread. we would still be under pressure. we will have some building materials, stocks. infrastructure stocks, i see less pressure on luxury name probably because they are not exposed to internal consumption. small cup may also be under pressure depending on which reform we will put in place. but clearly, i think it's still too early to take any decision

to make on the french portfolio for now. >> what about relative value on the sovereign debt of france? or italy, do you look to italy as one way to play france? >> not yet. not yet. i think for the time being what we are seeing is a soft off better move. the spanish bonds have been widening. italian bonds have been widening. french bonds have been widening. so there is a concern about the level of that in europe. but clearly we will see more volatility to come. we have have -- a better opportunity. and we will probably go for this country with a high capacity to reform, stability but also on countries have low-level of that and have been some widening in the spread. but for the time being whatever is italy, spain or france it's

still too early. tom: i know claudia you've been doing some deep diving of any new french government. debt at about 110% of g.d.p. to what extent does that fiscal reality constrain any radical policy change from any new government in france? >> this is what's my point at the beginning. i think there is too much constraint in order to be able to push extra financing. let's think about it. if we have a spread widening an you have any government announcing spending and higher spending there will be a contain from the e.c.b. to buying some french bond. so i think the reality that that's inability is a critical point for everyone which would be named in two weeks. and so the capacity to keep reducing the debt is the most important thing. you have probably seen in a

different debate some party in particularly on the right side are reducing the level of spending they announced a few weeks ago. clearly this is an important point for investors to watch. there are still a lot of spending on the left side which has been announced bubu there is a lack of visible about what they can really do when it will be the government. for the time being the volatility will remain high. but there is the capacity of reentering the french market once the visibility will be higher. and i think it will be higher in two weeks' time. >> claudia, we're going to be hearing from the e.c.b. governor one of the boards, alirehn. he's been talking to us. he sees a whisk premium but no risk of debt crisis but only e.c.b.'s steps two more cuts seems reasonable. does that align with your

thinking on the e.c.b.? >> fully, fully aligned. we are expecting 25 business points for september and our 25 basis point for december. funny enough, many people have been rising -- if it cut an interest rate in september, we still have it in on scenario. i think the e.c.b. will be watching c.p.i. more to after political issue. and i think the e.c.b. is different from the monetarily policy than the fed. the fed has reduced the quantity tightening. the e.c.b. is still ongoing. clearly the e.c.b. needs to cut rate. there is some recovery on the economy. but we still see that these recoveries is pretty shy. so less -- the level of interest rate and particular interest rate is important. >> ok. claudia c.e.o. for france at

u.b.s. wealth management. be reasonable and how to position and the expectation around additional volatility in france as we lead out of course that first vote on sunday. claudia, thank you very much indeed. so the governor of the bank of -- england says it's reasonable. ali rehn says he remains optimistic about the blocks economic outlook. he spoke exclusively with bloomberg's mark shroas. >> i don't usually comment on market views, but of course we are available for the market today. and they are leading the frame of reasonable development. the essential decision -- for business-making in the e.c.b. governing council and for me personally is we look at three factors in particular in every monetarily policy meeting.

you look at the patient outlook. you look at the underlying inflation from the food prices and third, we look at the strength ofrily policy transmission. in light of this three factors and their developments, we take our decisions in -- in situation in every monetarily policy meeting of the e.c.b. governing council. >> but if the data developed in the predictions then it would be fair to assume fir interest rates cut this year and last year? >> in case we see it continuing and moving towards our symmetric two-person to target the medium term, then is it reasonable to assume that we'll stay in this direction and -- and continue

rate cuts. having said that i don't take any stand on -- on how much we're recommitting ourselves to any particular great path. >> if you stress data depen de-- datadependency does that mu depend on the projections or between the forecast meetings there's possibility of a rate cut that each meeting is life? >> i dope think we should constrain ourselves, -- i don't think we should constrain ourself tonight the quarterly projects and meetings. we have monetarily policy meetings every six weeks. we have new data on the growth inflation employment, other aspects that are important for

monetarily policy. this is the making. and we cannot on that basis take the systems and -- we must take the stops set the rates in every monetarily policy meeting. because if we leave the rates unchanged or we change the rates, if we were to result only to -- resort only to quarterly meetings and take the systems in them, we might a well cancel the so-called immediatings and save the planet. -- meetings and save the planet. ly not go for that. tom: now, to a major corporate story and rivina shares surged as volkswagen announced plans to invest $a billion with the e.v. maker. let's bring in craig trudel.

what are they planning to work together on? how significant is this? craig: this is going to be about software and electronic architecture the latter being a bit of a wonky term, but when you think about all the parts of the vehicle that are controlled electronically and tall worrying and the systems to speak to one another and work smoothly. that's what -- what volkswagen is taping rivina for. initial billion dollar investment in plans to happen to up to $5 billion over a longer period. it's really a significant move on volkswagen's part to shore up the finance of a company that really when it was going public a few years ago was, you know, sort of the talk of the auto industry. a lot of optimism about just how good-looking rivian's vehicles

were and promising a pipeline it had. and its abilities to sort of translate that into financial results has really been challenged for volkswagen to come in an backstop rivian after all the challenges it had all these years it helps explain why we've seen the stock jump more than 50% after hours last night in the u.s. >> craig, you follow the sector in detail for years. does this deal to you is iting where you are with everything that you know about this sector and how things revolve, does this deal, do you think makes sense for both partys? >> i think it's a -- an obvious deal you take if you're rivian. if volkswagen it speaks to the deal that you have for their own software system. they've had real issues with -- with cost over runs and -- and, you know, the software system that underpins its electric

vehicles has really -- you know, it's old product launches. it's held back models like the volkswagen inch d.3 that was supposed to be the vw golf of the electric age. it hasn't lived up to those or expectation. the other thing that is puzzling about this deal for volkswagen is they're standing up a brand -- a new brand called scout that to me has really kind of looked like a rivi action n rip off sort of outdoorsy, s.u.v. and pickup brand so for them to, you know, put $5 billion into a company that they're also on the other, you know, side of the house trying to compete with and in some ways replicate really just speaks to boy, their software issues really must be thorny and continued to plague them. >> that's an interesting context.

craig trudell. thank you very much indeed. coming up, nvid, a rebounds after historic routes. we will talk markets next. does the a.i. theme still have legs? this is bloomberg.

♪ >> welcome back. so nvidia bouncing back after a route that saw the biggest market in three days. investors got back into the nvidia train. you're seeing gains of 60%. still below apple and microsoft but it's firmly back above the three trillion mark. maybe there's putter to run on this a.i. theme.

let's bring in ania. what's going on with nvidia this week? does the rebound we saw yesterday stateside does it suggest there's a sustainable nature to this a.i. theme or does this give you cause for concern? >> we have seen some extraordinary leadership from u.s. equity markets take place. and it has been led by the a.i. theme. nvidia has been the dominant name within this a.i. theme. we do believe this further to run given the fact that it has had some exceptional earnings results has also put forward a very ambitious target for the rest of it. and that being said, we are seeing signs of a bit of causing from investors. the opportunity to sell remains extremely high. investors remain very he is tent

given fact that we have the u.s. elections coming up and that remains a very important risk for markets as we move ahead. >> i think it's really interesting that you zero in on the politics of the u.s. because what happens here in the uk, that will be more important in terms of political risk france. you're pushing ahead to november and saying that's a bit of a cap on this market rally. just to explain your thinking on that and post november, how you see things unfolding? >> so what we've been seeing, thomas, you know, there's been -- there's been a flock of investors into quality, you know, names where you have strong balance sheets versus the weak once, a dominance of large cap, a small cap. basically saying, flock towards higher growth oriented names. and that's just led to a much higher weight within the mega cap, large cap text dots.

we are seeing from an equity standpoint, concentration risk from a geo graphic perspective as well as a stock perspective. so that does cause a bit of an alarm given the fact that we have seen markets reach all-time highs but doing that on the back of very, very narrow breath. so the important factor for us is looking ahead if we do get those interest rate cuts by the fed and we see a broadening out of this rally that would provide further legs for this rally to run if we don't see that coming that would be a sign of causing, you know, heading into the u.s. elections. >> so we think about and focus on when that starts, the importance of course and the concerns around the concentration risk. what are you concerns in terms of the u.s. economy? are we going back to trend or is in the start of a more significant slowdown in that economy? >> so we are seeing some signs of fatigue from the u.s. consume

their was quite evident from the retail sales that we received, you know, they are beginning to weaken. and i think this's a sign of the pressure that we've seen from interest rates and credit card cost with a higher interest rate environment that being said, we're still seeing a lot of strength on the industrial side. so manufacturing data came in a lot stronger. the s&p industrial numbers were also up at a two-year high. there are science and weakness on the -- from the consumer side. and the consumer has been the strength of the u.s. economy given that 70%, you know, does dereeve from the u.s. services sector. so that gives us a sign of causing. however, if we do get those rate cuts in time that would alleviate the pressure and have the u.s. economy move ahead on a stronger path. >> very briefly what gets us from 5.3% to 3.5% next year?

>> well, we've already seen inflation coming down to the -- to the boe's rate of 2%. i think the important factor now that we're really waiting for are sticky services inflation. we are likely to see a bit of alleviation in that inflation pressure and that allows the b.o.e. to go ahead with those rate cuts and bring us down to the target level? >> fantastic director of macro economic research and wisdom treat. thank you very much indeed. there's plenty more coming up. stay with us. this is bloomberg.

♪ >> i mean, if you look at the chart on nvidia, you can barely see the correction. on a basis it's down 10%.

but you have to peer very, very carefully to see that move. so i don't think it means anything. people that own that stock knows it's expensive. but they're buying into a store. as long it is story is intact like nvidia is intact. the story will continue. tom: steve eisman. let's see if he's right in terms to drop drop we saw in the past three days although it's rebound. there's the move you can see over a longer term basis. but there was this rebound yesterday, it seems they're looking if a next level of sustainbility. 115 is seen as a key support level, $100 per share seems like a significant support level. to what extent does point to a further uptick or was this wobble this week a concern? that's the story in terms of the market rebound.

back around $3.1 trillion, tell below apple appear google. let's have a look at valuations, though because this for some the concern. steve saying this is about story. don't worry about the price. nvidia three times industry average as you can see price to earnings basis is at 44.6 versus about 40. it's key rivals -- one of the key rivals. so not hugely above m.n.d. but appear is at 12. for in the price and the valuation will remain a challenge for nvidia. markets today is coming up next. more analysis cause another big day for the markets. this is bloomberg.

want to save on some of the biggest names in streaming on the network made for streaming? x marks the spot. now you can add the new xfinity streamsaver™ that includes netflix, peacock, and apple tv+. that's xfinity streamsaver™ for just $15 a month. all your favorites. all in one place. only from xfinity. for more watching and less spending... x marks the spot. do it all on the network made for streaming, and bring on the good stuff.

♪ ow! whoa! watch where you're going. yeah mom, pay attention. what if it's a concussion? hang on, i'll look it up. uh... i'm probably fine... probably? we noticed something wasn't right and got her to a doctor. i thought i was okay, but i had a concussion. sometimes, it's hard to tell on your own. don't mess with your melon. if you hit it, get it checked.

>> good morning from london. i'm anna edwards along guy johnson. with the