lizzy: good morning. these are the stories that set your agenda. asian stocks gain after the s&p 500 climbs on bets of federal

reserve rate cuts. we also turned to the u.s. in politics in chicago. the democratic national convention. we have been hearing from joe biden this morning. >> selecting kamala was the very first decision i made when i became our nominee and it was the best decision i made my whole career. lizzy: plus, pressure on hamas. antony blinken urges the group to say yes after israel excepts a gaza cease-fire plan. good morning to you. tuesday, august 20. welcome to daybreak europe. mark is pretty steady at the

moment, futures pointing higher on both sides of the atlantic, but the highlight of the week we continue to await will be jerome powell's speech at jackson hole friday. we are looking for clues as to the potential fed path ahead, traders thirsting for these rate cuts. the s&p managing to reclaim that 5600 level. if we flip over to the cross asset picture, you can see the treasury yield is higher at 3.8%. the yen is currently at a 1.4 6 -- at a 146 handle, reversing some of its earlier gains. gold near a record high around $2500 per troy ounce, making a bar of gold about $1 million. it comes back to the expectation of loser fed policy, which comes back to the u.s. demand story, which is feeding brent. 77 dollars a barrel, the

weakness outweighing geopolitical tensions in the middle east, yesterday's drop the biggest and more than two weeks. let's check in on asian markets without along on standby. what's happening where you are. >> equities in japan reversing the declines from a day ago in helping to offset the losses on chinese stocks. that is getting the csi 300 from the energy counters as they decline. no thanks to those demand concerns also weighing on the commodity. south korea's costs being helped along by tech and financial names, boosting the benchmark in south korea in the

form of what we are seeing on the korean won. this is something mark has highlighted, appreciation helping to bring in some of these local stockmarket inflows. this is also a currency benefiting from the risk appetite as the high beta currencies seem to be doing well against the backdrop and the confidence we will see the fed start those cuts but coming in today you got the sense that the dollar bears were getting ahead of themselves. the dollar is studying and we are seeing the unwind over the past two sessions in terms of decline in the japanese currency. flip the board again because i wanted to highlight the reprieve we are getting from asian currencies as the asia dollar index is hovering near its highest in seven months, headed for its best month in about a year. this is what we are seeing in terms of fx as well as the state of play in equities.

lizzy: all right. thank you for the update. back to the democratic national convention of chicago. the focus of the day or one of them. joe biden defending his time in office in a passionate speech he underlined the credentials of kamala harris to be his successor at the white house. >> selecting kamala was the very first decision i made when i became our nominee and it was the best decision i made my whole career. she will be a president our children can look up to. she will be a president respected by world leaders, because she already is. she will be a president we can all be proud of. and she will be a historic president who puts her stamp on america's future. lizzy: vonnie quinn is in

washington for us. she's been listening to every word of that speech. i wonder what you made of it. he has to show he is still the president while passing the baton to harris. it's a difficult balance to strike. vonnie: it was and he managed to do it. you heard how he tied harris to all of his ministries and achievements that his administration's achievements, the narrowest racial wealth gap in 20 years, the pandemic, the infrastructure bill, and basically said harris had been instrumental in all of these positive things that happened during his time in office. he does leave after this and take some time off, some vacation with his wife in california, and allow harris to fully embrace this dnc can be embraced by it -- and be embraced by, but it was a night where delegates got to thank joe biden and a cavalcade of other speakers. you see him there with his daughter.

an emotional moment as she handed over to him before he took the podium. he managed to keep most of his speech, as you can see, very nonemotional, if you like. he had that moment of emotion at the beginning and after that it was a lengthy speech, which touted the administration's achievements at home and abroad, is in fact, he mentioned some of the flashpoints that donald trump will be trying to hit kamala harris with, including the border. he basically said donald trump was responsible for killing the bipartisan border bill that harris promised to bring back. he also spoke about the protesters on the street, which was an unusual moment for joe biden. lizzy: so a gaffe-free speech, exiting stage left. we will hear from obama later and get the ceremonial roll call vote. what are you watching out for today in the city?

vonnie: there's lots still to come. that was only night one. it was joe biden's sort of big speech but there are more to come. the dnc will want to keep the momentum going, not just what they had going into this but the momentum from night one. it is the first in person dnc in eight years. you can see in the audience people were really riled up and fired up in the dnc will want this bomb they get after conventions to even be bigger and broader and for some of this joy and excitement to percolate and convince voters that are persuadable that have not yet decided who to vote for that harris is the person to vote for it. to that end, hillary spoke about how harris will break the glass ceiling when she takes office. we have the clintons later in the week. bill clinton will be speaking in two nights time.

tuesday night, the obamas will be speaking. a whole array of celebrities as well that have been in attendance. you mentioned the influencers. about 200 of them and some of them spoke on stage, the first time that has ever happened at a democratic national convention or indeed any convention. kamala harris-walz ticket understanding how important it is to target the youth vote in doing so by allowing these influencers to come in and give them permits and privileges and even let them videotape as this is going on. we had tiktoks and instagram lives in all these things going out as the d&c was happening. lizzy: i still don't know what brat means so we will leave it there. thank you. back to markets. safer territory. the s&p 500 posting its longest winning streak this year on bets that the fed will signal it is ready to start cutting rates.

this comes as central bankers diverge on rates ahead of the jackson hole meeting this week, where jerome powell will take center stage. more from mark cranfield. just how divided our central bankers as we head to jackson hole? >> there's not a huge division, really, if you look at the way traders are pricing for interest rate cuts. it's pretty much across the board. the obvious exception is japan, where we still expect maybe a little bit more in terms of increasing interest rates, but everybody else is going to be lowering rates, but may a different speeds. that's probably what is causing a headache for some investors. we have seen in the past there have been historical periods when pretty much all the g 10 central bankers were cutting rates within the space of a few weeks of each other. that is not so much the case now. we have seen new zealand move and the bank of england move and we are waiting for the federal

reserve. they are the one that leads the pack but this time they are playing catch-up to a degree. and from here, it's a question of modifying expectations, where jerome powell has a tough job. he has to persuade traders that he can cut rates but at his own pace where the market is already pricing for more than he wants to give away. then we will hereafter that from people at the ecb and bank of england, who will also be under pressure to extend rate cuts, but they will want to temper it with the fact of their inflation numbers are not coming down as quickly as they would like. you will get the question of will traders be satisfied with a different pace of cuts? we will get a better idea after everyone has spoken this weekend. >> we have heard from the finish central bank, saying europe's growth risks bolster the case to cut next time in september. do you expect september to be one of the two rate cuts traders are pricing for the rest of the? lizzy: if you look at the way

the market has responded since the first interest rate cut from the european central bank and the way christine the guard has guided the narrative, it will be surprising if the ecb does not deliver another cut in september, and central bankers know it is dangerous not to give the markets that you need to give the markets some of what they are expecting, particularly if it's been there for a long period, which it has been in terms of traders expecting a rate cut in september. beyond that, the story becomes more difficult. there seems to be a divide between -- the you that you have 20 different members on the council so there are different opinions but they seem to be up at odds with each other as to what to do after september and that's partially why the market is not pricing is aggressively for the ecb as they have been for the fed. we will get to september. the ecb president will have a tough job and have to manage

expectations and we will see how dovish he is at the press conference in september. that will give us guidance as to how much more we could expect and it may well be that she will try to dissuade investors that they have done enough this year and we would like to see inflation come down quite a bit more. it is still a bit higher in terms of lowering interest rates one month after another so she will probably ask for a period of consolidation. whether or not it's given to her is a different question. lizzy: itely seems like she learned the lesson of being overly dovish in the first half of the year. mark cranfield, we thank you for that lookahead. let's look at what's coming up today on the docket. 8:30 a.m. london time, a decision from the reichs bank. it's expected to resume its easing cycle and cut rates. do keep an eye on the kroner. we will bring you an update later. 10 a.m. london time, euro area cpi, feeding into that ecb

decision we were discussing with mark cranfield. 12 p.m. london time, the turn of turkey, expected to hold the rate at 50% for the fifth straight meeting. and elsewhere we will hear from the fed's rafael bostic and michael barr ahead of jerome powell's jackson hole speech friday. coming up, antony blinken says israel has accepted a cease-fire proposal. we will bring you more from the u.s. secretary of state's visit to israel next. volodymyr zelenskyy urges ukraine's allies to lift restrictions on the use of weapons to strike inside russia. the latest on the geopolitical situation next. this is bloomberg. ♪

lizzy: welcome back. antony blinken says benjamin netanyahu has accepted a cease-fire deal and it is now up to hamas to say yes. it puts the onus on the militant group to end the war even as the violence continues. lincoln called the deal a bridging agreement, acknowledging not everything is spelled out in detail. more with our correspondent. what's the latest we're hearing? >> antony blinken has been doing a regional visit to the middle east over the past couple of days. this is as nice visit since october 7 and he was in israel yesterday, whereas you mentioned correctly, he said netanyahu, the israeli prime minister, has agreed to a cease-fire deal. granted, this does not encompass everything that was suggested in

president joe biden's land in may -- plan in may to return all the hostages. we don't know all the details of that but it is a bridging agreement. it is up to hamas to agree to those terms and hopefully end a war that's been killing tens of thousands of people in gaza and has killed thousands of people in israel since october 7. now, we know that the last hawks that happened in doha, hamas did not attend. israeli negotiators met with mediators from the arab world and the u.s. to reach the cease-fire agreement, but we know the mediators have conveyed israel's demands to hamas, so it's not really up to hamas what they decide and whether they do in fact agree to the terms of this latest agreement. >> from a markets perspective, oil traders have been waiting so long for a cease-fire deal and an iranian retaliation. now they are waiting on the demand story out of the u.s. and

china. was the latest on whether iran will strike? >> yesterday, as we were reporting the story, iran said they do welcome the terms of reaching a cease-fire agreement, but a retaliation is still on the books, so we are still expecting a retaliation to happen. we don't know when or how. this is taking revenge for the killing of hamas's president at the end of july by iran, an attack israel never took responsibility for. our understanding is a retaliation is still very much a prospect but antony blinken will visit qatar and egypt to speak with officials they to understand from them what is in the heads of hamas leaders. so we are following the story and by the end of this week hopefully we get some more light about what has been reached, what hamas agreed on, if the deal is actually going to be agreed upon. >> so a strike still very much on the table.

we thank you for the update on the middle east situation. we can turn out to the geopolitical situation of ukraine, where volodymyr zelenskyy has urged allies to lift restrictions on the use of their weapons to strike inside russia. to comes as kyiv continues its two-week incursion into the curst region. we get more from tony. give us the latest developments on ukraine's incursion into russia. i wonder whether analysts see zelenskyy's strategy of creating this buffer zone is likely to be effective. tony: good morning. yes. president zelenskyy was in a bullish move when he addressed ambassadors yesterday. ukrainian forces apparently now control something close to 500 square miles of russian territory inside that kursk region. zelenskyy said they succeeded in pushing back russian forces threatening communities inside northern ukraine. that was the whole point of this

incursion, that they wanted to demonstrate first of all they could effectively, by going on attack, improve their defense, but also to demonstrate to the wider world that the allusions about russia's red lines were being exposed in this bolstered his argument for ukraine to have restrictions lifted on long-range weapons so they could take the fight to russia and airfields used to attack ukrainian cities. lizzy: germany pushing back against the weekend report that i won't provide additional aid to ukraine. we saw shares in german defense stocks falling yesterday. do you think there is any connection to keith's surprise incursion here -- to kyiv's surprise incursion? ralph: it was something of an embarrassment for germany when they meant they were limiting

the amount of support that was not already in the budget. there was a scramble to clarify that message and clearly kyiv will be keen to ensure they do maintain support for ukraine because germany is an important partner for kyiv, the second largest after the u.s., and what kyiv wants to demonstrate is that as they are succeeding in pusher russia back, they need support from their allies to bring food and -- to bring putin to the table. lizzy: tony, thank you for the update. we also have the indian prime minister, narendra modi, said to visit kyiv on friday, but he is rolled out a role mediating an end to the war. coming up, africa's biggest, wireless carrier reports its first loss since 2016. we will bring you some of our interview with the ceo next.

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lizzy: welcome back to bloomberg daybreak europe. the world health organization says parenti has reported 100 cases of mpox caused by a subvariant. the cases, 28% of which were in children under five, have been reported since july in multiple districts. cases have been reported in kenya, uganda and rwanda. the biggest wireless carrier, mtn, has posted its biggest -- it's first loss since 2016 after the devaluation of the nigerian naira. the ceo told us he expects pressure on the currency to

soften. >> the naira and didn't last year minus seven -- naira ended minus seven last year against the dollar but between q2 and up to now, it has been fairly stable. and in a more recent forecast, they forecasted the pressure on the naira is projected to abate somewhat as inflation expectations are that inflation in nigeria should start to come down and that tightening cycle in nigeria will remain and take the pressure off the naira going forward. lizzy: that was the mtn ceo ralph mupita on the company's latest results. for more on this, we can go to our chief africa correspondent, who brought us that interview. the ceo seeming pretty hopeful on south africa. >> right.

and i think it's important to note this because south africa is the home market for mtn, so what we did hear from ralph mupita during that interview is he said the results from mtn south africa were decent, that he still sees some scope for even more growth contributions from the country and the market here so if we look at their contribution in the first half, subscriber numbers grew 4.7%, reaching 38.5 million at the end of june. we also did see revenue jump by 59.1%. part of that, they noted, is because of airtime advance fees. we also saw partnerships with mtn and show max and disney plus, so that potentially helping the subscriber numbers here in its home market, but still, as ralph pointed out, a lot of their other markets have been challenging, namely nigeria, so still a number of headwinds they are facing in the near term. lizzy: great interview.

mtn looking to exit more markets with. jennifer, our chief africa correspondent, thank you for bringing it to us. we will go to u.s. politics next. chicago, the dnc continues. what is donald trump up to? claiming he should not be blocked from speaking freely. some analysis on those comments next as we look at futures pointing ever so slightly higher stateside as well as in europe. do stay with us. this is bloomberg. ♪

>> good morning, this is bloomberg daybreak: europe. the stories that such her gender. asian stocks gain after the s&p 500 powers to his longest winning streak. the federal signal it's ready to cut rates. president joe biden calls on democrats to rally behind kamala harris as his party's convention kicks off in chicago. president biden: was the very first decision i made when i became our nominee. it was the best decision i made my whole career. >> pressure on hamas, u.s. secretary of state antony blinken urges the group to say yes after israel excepts a cease-fire plan. those are our top stories, welcome to tuesday, the 20th of august. looking at futures pretty flat on both sides of the atlantic

this morning, the s&p managing to reclaim the 5600 level at the end of yesterday's session, logging of's longest winning streak this year, if we flip the board over to the cross as a picture, 10 year u.s. treasury at 8.8%. the yen now add 147 -- 147 per dollar. go steady near record high, really taking in those expectations of looser fed policy, it's now about a million dollars a bar for gold, just brent there as well. $77 a barrel. weaker .8% as the demand weakness story out of china and the u.s. really outweighs the geopolitical tensions in the middle east. let's return now to the u.s. election because donald trump has downplayed criticism that he's undercut the fed. he has been saying that he should be able to speak freely when it comes to monetary policy, let's get back to bloomberg's vonnie quinn in washington monitoring the dnc

and analyzing these comments for donald trump. he made them to bloomberg and he's now downplaying the criticism that he has undercut jay powell's autonomy. vonnie: his argument is essentially that he was job owning and he job owned with the fed chair during his term in office, but that doesn't necessarily mean he had an effect in any decision the fed chair might've made. so essentially he's downplaying the fact he would like to have more of a role in monetary policy perhaps than other politicians who tend to be a little bit hands-off, totally hands-off. the fed chair himself and previously janet yellen herself and all of the fed chair's previous to that have always said, this is an independent role, we don't take any advice from politicians, we do with the economy needs us to do, but it is an interesting glimpse into what might be the future if donald trump were to be elected president, he had said in the past that he wouldn't want jerome powell to continue on as fed chair after his current term

expires. free to change his mind and so on, but he said when he was asked to he would like to be as his next fed chair, he said it was way too early to tell. he suggesting that he has a good instinct when it comes to monetary policy. >> i suppose these interviews are just one attempt from donald trump to try to steal the limelight from chicago this week, what else will he be up to later on? vonnie: it's true, all week long he has interviews, news conferences and events in swing states plan, and it's all in an effort to take away some of the oxygen from the dnc, which is really like a helium balloon right now. you have all of the delegates close to 5000 delegates in the united center in chicago just completely riled up, having just heard from joe biden a couple of hours ago, basically what he will be saying on the campaign trail as he accompanies kamala harris, but also a good by an

acknowledgment of everything that he had done in office, a thank you to them and they were thanking him, it was an emotional scene for a few minutes in the united center. so donald trump continues to plan, he was going to be in michigan on tuesday and continues his red stator with north carolina wednesday, very important states. kamala harris is leading, marginally, in north carolina. donald trump doesn't want that direction to continue. post dnc there will be a bump, as is typical for the democrats. this year will be no different. thursday he ends the week at the border, this is the day kamala harris officially accepts the nomination. he will be in arizona, he will point out that kamala harris has been deficient on border issues, you saw the president joe biden get in front of that tonight when he said that joke -- that donald trump had killed the bipartisan border bill, which was about to pass and that he

had called people up and essentially said, don't vote for this, this will make me look weak and will make kamala harris look week as well. >> vonnie quinn, we thank you for that analysis of the u.s. analysis. plenty to watch from the dnc in chicago. tsmc building an $11 billion plant in eastern germany. this is in partnership with several other european chipmakers. we could get the details from bloomberg's oliver crook cruise in berlin for us. how big is this project and why did it end up in germany? all of her: it's a huge project, 10 billion euros is really significant and for tsmc it significant. the let's get down into what this will do, it will build within germany, dresden, it's a massive strategic venture for the german government and others, tsmc has basically said we are willing to come to europe for the very first time and build this year.

it will cost 10 billion euros. you will also have a partnership with the other companies, including a german company, they are each getting a 10% stake. but tsmc is holding onto 70% stake of the project. we should say of the 10 billion, 5 billion is coming directly from the german government in the form of the subsidy. this is really important for germany for a number of reasons, not least of which they will be building ships for the industrial sector in the automotive sector, for tsmc it's part of their global expansion, they open their first fab this year in japan, they have huge expansion plans in arizona, in the united states they are spending 65 billion dollars in that expansion, it's also relevant for the eu. ursula von der leyen and the commission want to build 20% of the world's chips in the next six years, that seems almost impossible, but you need projects like these in order to get any chip in semiconductor base production within europe.

>> in the context of the global chip race, where it germany sit, where it is a want to be? >> was really interesting is that germany is waking up to questions about what the future of its economy is. we talked about this a lot on bloomberg television and about germany basically having dominated so many industries for this past decade, the question is, what is this look like going forward in one of the ways that they want to lay a stake on is the semiconductors, that is why they have given out more than 15 billion euros worth of subsidies to a number of projects, including this one, it also one from intel. in order to do that, you need to build an ecosystem, you need to have a silicon valley, what germany has a silicone sac city, where nvidia is, where they have a number of chip production going on over there, you need certain things to build these chips, you need very consistent electricity and power supply, because if there's a blip in

that, it ruins the chips you are building, but more importantly, you need the ecosystem in terms of the labor force. you need people who can work these jobs, have the expertise, you have a number of universities around dresden that are good in electrical engineering, but you have the companies in the jobs to build it out which is why it's important for a company like tsmc to come to a place where you have this stuff. you are also feeding the auto sector. it's important to have that dialogue and industry. >> there are also concerns in the world of semiconductors right now. how can that bear on this plan? >> not everyone in the eu is thrilled about the degree of subsidies germany is throwing up these projects, germany has more fiscal fire pattern -- firepower than other european comfort -- countries. this questions your own culture clash, there has been a lot of reporting in terms of tsmc, a taiwanese company coming to arizona where you have different

ways of doing business and there has been a bit a clash. there is concern around that coming to germany where the unions are very, very powerful the way the people work is very different than it is in taiwan, then there's the question of, this is an industry that gets disrupted semi-easily only because there's so much happening at once. we sought out of intel, they are cutting 15,000 jobs, they had their worst drop on the stock in 40 years because of things that are changing and it may not be terribly well positioned for the ai future of chips. the question is for intel, they received 10 billion euros from the german government to build their own plants in another part of germany. there's been a lot of silence and could there be a delay to that, we know intel is delaying their projects in ohio. these are the risk going forward, you could throw as much money as you wants you out of it for the companies need to show up.

>> thank you for that. we will travel along the supply chain for semiconductors to electric vehicles. it really is a big week for asian earnings. expecting a competition really heating up with this eu tariff says was talked about. let's get more from our asia transport reporter. she joins us from hong kong. >> we're expecting another quarter of losses because it hasn't turned a profit it's expected to be their earnings driver. they have been growing their sales at a really fast pace so

we are looking to see a really healthy revenue, hopefully translating into profits. it's margin is expected to improve on the second quarter of from where it saw its gross margin at 13.7. probably looking at about 15% for the second quarter, and lastly everyone is really excited about how brisk has been able to deliver its cvs, it's clocking in at about 10,000 units monthly, so it said that it's able to achieve its annual go for a hundred thousand ev deliveries this year ahead of time to be achieved in november. so we are expecting xiaomi sales to increase at about 30%, and we will see how that translates into the bottom line. quex geopolitical tensions, including those eu provisional

tariffs are weighing on chinese ev exporters. i wonder how big of an impact it is if you put it in contacts for us. linda: looking up the impact from eu tariffs, we see chinese ev exports to europe in july taking a hit, it has dropped from a fast growth in june. one month after the tariffs come into effect in july, exports have already taken a hit. you've got automakers feeling the tariff pain across big portfolio brands. controls volvo, pulsar. these brands have really said they are looking to move production elsewhere, especially where volvo aleuts moving the production of its electric suvs to belgium. with that, the short-term before it moves its production, we are watching out for how it's going to manage the impact to with

pricing adjustments or other methods. one of the other brands has also said it's counting out locations in europe to find better production sites for its products. >> we thank you for their preview. we are going to see where the golden triangle in southeast asia has long had a reputation as a center for illicit drug making and trafficking. the law enforcement agencies say the illegal activity is now thriving in a special economic zone where the borders of lao, myanmar and thailand meet. bloomberg originals is looking into how a chinese businessman is seen as the de facto ruler of this remote region. here's a preview. have >> the golden triangle

special economic zone is an enormous center for criminal activity of all kind. drug trafficking, human trafficking and scam operations. >> victims have been mostly deceived by online ads promising career opportunities abroad with good pay. >> they took my passport when i arrived. after that did teach me how to become a scammer. i work here, this building. >> one man allegedly controls this transnational crime hub. chinese national. >> he is in charge, he sets the rules and chinese organized crime groups have become some of the most powerful criminal networks, both in southeast asia and beyond. >> laos is a communist country with close ties to the chinese communist party. so china has dramatically more influence in laos than the united states. the big question here is whether

china eventually decides they want to put a stop to this or not. one of the mysteries here is china's attitude to him. they seem to be, overall, somewhat tolerant of him. glaxo who is he and why alleged crime boss allowed to run this place like his personal kingdom? click subscribers can watch that report in full on the terminal or at bloomberg.com and it will be on bloomberg originals youtube channel later on, don't miss it. let's take a look at the events we are following today. 10:00 a em nguyen didn't time we get the euro area cpi numbers, crucial for the european central bank. at 12:00 p.m. london time we will have a decision from the turkish central bank. they are expected to hold the one-week repo rate at 50% for a 5th street meeting. before the u.s. market open we get earnings from lows, revenue

forecast to be 23.9 billion dollars, which would indicate a 4.1% decline from one year ago the same quarter. it is the second day of the democratic national convention. we have the fed's raphael bostic speaking, laying the groundwork for jay powell speech at jackson hole on friday. coming up to another central bank, sweden's riksbank under pressure to turn around its ailing economy. look ahead to the crucial great decision today. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. other stories making news this morning, british typhoon mike lynch is among those missing

after a luxury yacht was struck by a tornado and sank off the coast of sicily. his wife is among those who have been rescued but one person is dead and six others are missing after the boat sank early yesterday. sources the couple was celebrating following his recent acquittal from u.s. charges. in other news, carl and his firm will pay $2 million to settle with the sec over a margin loans probe that caps a 15 month time frame that saw the investors net worth plummet by $19 million. shares fell 4.7% following the news of the settlement over allegations that it did improve -- provide enough information about how he was borrowing against his stake in the company. may these shares surge in new york after the company announced its buying the server maker systems. the transaction values the deal at nearly $5 billion. they have extensive experience making server computers of large

center dot a centers. the takeover boost the efforts to challenge nvidia, which is been the runaway leader in the market. now to central banks, speculation mounts that jerome powell will roll the pitch for a september rate cut when he speaks at jackson hole on friday. today the swedish bank is likely to receive its own rate cutting cycle. bloomberg's government editor joins me now from oslo in norway. a rate cut today, is it a done deal, could it be a half-point news, -- move, perhaps? >> indeed if you look at the economists by bloomberg, everyone is expecting a quarter-point cut in any other outcome would be a surprise. lately we've had pressure growing domestically from observers and for groups for an even bigger cut and that all comes down to the state of the swedish economy.

the latest data has been rather weak with a few exceptions. we've had manufacturing going into contractionary territory in july. we've had flash estimate showing second quarter in a contraction in a on the consumption side we do have a slightly better outlook for consumers, but it's pretty weak. all in all, the figures show that the recovery isn't really there. if you couple that with the latest inflation figures, we show those are under the riksbank's forecast for the last few months that basically tells you why there's more pressure now for the riksbank to cut by half a point. >> given that weakness in the economy, given the accusation that the riksbank was behind the curve into the crisis in 2022, do you think further out it

could accelerate the plan to cut rates? >> it's a fair guess, yes, that historically the riksbank has been parents, but also there is the currency aspect of the last few years the corona weakness has been an issue for policymakers in sweden. they will definitely be not contributing to much to the corona weakness which could feed for inflation. >> we will keep an eye on the corona. government editor, we thank you for that preview. plenty more still ahead. stay with us. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe, it's five minutes to 7:00. just until we get to the end of the program i want to leave you with three charts. the first shows the s&p's rally into the close reclaiming that 5600 level. futures are pointing ever so slightly higher today, so could go even further. it's been locking its longest winning streak so far this year. it looks set to continue. but if we flip the board, you could see partly was feeling this rally, the expectation of fed cuts, hopefully we will get more clarity on their face when we hear from jay powell at jackson hole on friday, though i wouldn't hold your breath, this is a delicate needle for him to thread when it comes to a communications perspective, and finally, if we flip the board again, you can see that that same narrative is propelling the u.s. towards rate cuts and it's also weighing on oil.

the lackluster demand in the u.s. and china outweighing geopolitical contentions knocking the oil the most in more than two weeks. brent currently trading at $77 a barrel as we continue to await a cease-fire deal as we continue to await a retaliation from iran. israel not claiming responsibility for that straight, but as we heard, that strike is still very much on the table. that does it for a daybreak europe, i've been lizzy burden in dubai, i will hand you over to guy johnson and kriti gupta in london, next. they will bring you the opening trade as we look to futures in europe on the stoxx 50 higher .8%. thanks for joining us. this is bloomberg. ♪

guy: good morning from london on alongside kriti gupta, we are in our way from the opening trade. what you need to know? risk rally rolls