good morning. these are the stories that set your check. asian stocks slip as the chinese economy falters with fact-checks's we can get tricky for a fourth straight month. israel bases for a nationwide labor strike will hundreds of thousands rally to demand a cease-fire deal after the bodies

of six hostages were found in gaza. plus germany's far-right has a regional election for the first time since world war ii as the really coalition is punished in the east. happy monday everybody. it is a bank holiday in the u.s.. bear in mind some of the trading activity will be later levels than usual. perhaps lower volumes. we did have a big build up on friday, that pce number. all inlet expectations. the court pce is slightly lower than what the market had penciled in that propelled the s&p and nasdaq to highs of 1% in the close. you can see the futures are

leaning toward negative. the nasdaq down another .2% as we look forward to even when data coming out this week. a lot of emphasis will be on the jobs data. the np numbers coming out on friday. you can see the euro stocks traded sideways. the euro flat display some of the news coming through. we will talk more about that. we have seen a huge surge in population. not a meaningful reaction yet on the currencies you can see trading sideways. the pound to slipping a little bit. 130 125 is where we're at and brent can't keep a bit down. this is the energy compass takes a consent into consideration the weakness. all in addition to the prospect of a pay plus 20 back more

bounce to the markets. to talk more about some of the signals we are getting through from china and more broadly from the chinese economy, let's talk about how asian markets are fairing with april hunger in singapore and the reaction we've had in these markets to the data that has come through. >> it has been really negative reaction. we saw the csi 300 on friday, that did not last at all. some of these new home sales are showing the picture worsening and then after that we also got some numbers. this is a company seen as a bellwether in china. they posted a loss. nothing looks to be happening. clearly this real estate crisis is reeling through the economy and market sentiment is taking a hit.

it seems to be spreading to other parts in asia. not helping to live sentiment. we have a bit of a firming in the japanese currency but none of this is, despite the japan corporate profit growth coming in above consensus. it gives you a sense of how weak sentiment is overall. they could heighten expectations of a doj rate hike. something else to consider. if you're wondering where we are seeing some green on the cosby. we had worked sally up. some potential catalyst coming through eventually.

china has threatened retaliation of japan. we saw the tokyo electron laser. japan chip stocks turning tail. >> thank you so much. some important contacts there are some of the price action we are seeing. let's get back to the u.s. data we got on friday. underlying u.s. inflation released friday afternoon. 0.2% last month. reinforcing defense plan to start cutting rates month. let's get more with mark cranfield. the numbers are pre-much in line, mark.

>> probably only by a small amount in september. the look of that pce specifically will be watching the three month annualized numbers which is what the fed watches. akeem dent 1.7%. the fed has been very keen to see inflation rates. overall, the picture is good. the fed can go ahead and do what they want to do. there is nothing that will dissuade them that there is anything wrong there. that may also be affected by the long weekends as well. but overall, people will be reasonably comfortable. even if they don't give us a classic.

>> how will that data feed into the markets? this is in the unemployment rate himself. this is for a larger rate cut. this is not the asportation from limerick economics. 4.3 in the last month. there is not really enough. there is one more inflation report to come. the dictations we have so far is that it will largely be in line with the previous month. on the data front, only ever the

big surprise is what traders would jump on if they are looking for a larger rate cut. reading for now suggests that 25 basis points are what we're going get there this month. equity markets overly up and going, all guns blazing has they rebounded from the lowest in august. there could be some disappointment. the fed could push back a little bit, trying to call people down. if you look at the derivative curve, suggested 200 basis point cuts. they may dampen its vacations when they meet later this month. >> yes. a big one. certainly. there could be a lot of eyes on the data on friday. talking about some of the big events that are coming up this week, in addition to the nfp, let's start with the manufacturing pmi data that comes out today and the u.k.. you want to keep a close eye on

that. some of the signals coming to have been positive in the last few months. tuesday, to build up on the manufacturing pmi data. keep an eye on that. another sign that would reflect the health of the u.s. economy and the recent signals from u.s. manufacturing perspectives have been a little bit weak so it will be interesting to see whether this number also follows the same trajectories we saw the last three months. in the big event is going to be on friday with those in fb numbers the day before. the big focus will be happy and not just the headline figure as you see it as been shown there. but also on that unpleasant rate which has been taking higher sympathy to watch out for this week. you can get around up of all the stories you need to know to get your day going in today's edition of daybreak.

you can take a look. we are meeting with some of the news coming out of germany this morning. we'll talk more about that in a moment. a new week and a possible new prime minister for france as president macron meets with some of the candidates today. we will bring you the details next. this is bloomberg. ♪

israel's largest labor group is poised for a nationwide strike today. it is the strong is pushing to force play mr. nieves come into a cease-fire deal in gaza. this after large protests over the weekend following the discovery of the bodies of six hostages in a tell in the gaza strip.

we are now joined by paul wallace. our economy and government team from our economy and government team in the middle east. bring us up to speed on the scale of these demonstrations and what the dems traders are protesting against. >> we saw yesterday around the afternoon onwards and into the evening, some of the footage on screen there, they were some of the bigs protests we've seen since october the seventh. these people reacting to the news of the six hostages that have been killed. demanding a cease-fire. in many ways, and antigovernment protest. they are protesting on the cease-fire talks. we have yet to see how big a strike is today.

not all members of the unions will take part in the governments trying to block them from doing that. we have yet to see how big that is and what the things are like. it certainly seems pretty significant. >> how likely are these demonstrations to move the needle on the cease-fire discussions? question we've been talking about this for weeks now. a lot of daily between the two sides. there is a lot of pressure on netanyahu to secure the release of the outstanding hostages. how likely is it that public pressure is actually going to force netanyahu's hand? >> i think what happened with the discovery of the bodies is going to turn into a turning point. what will determine that is what happens on the street in israel. if the political pressure is big

enough, that is something that will move closer toward accepting a cease-fire deal. if you like the unwillingness to do so so far, it is causing a lot of strain with israeli society. certainly what happened yesterday was a significant move and certainly something that could get the government closer to excepting a cease-fire deal. >> yes. paul wallace, thank you for joining us with the latest out of israel. in the region, the u.k. maritime tree operation says he received a report of an incident 70 miles northwest. 30 sit accurately must again. we will bring more details as we get them.

the vaccination drives led by united nations agencies aims to reach more than 6000 children. in europe, the german chancellor olaf scholz's really coalition as parties on the right and left are taking more than 60% of the vote. let's get more with oliver quirk. walk us through some of the results that came through over the course of this weekend. it seemed like it was a very victorious weekend for some of these populist parties. it looks like we are having some technical issues with oliver for the big story over in germany. get accident story initial while. another story we are watching very closely in the region as well is in france. emmanuel macron's technical talks with senior political

theaters as he prepares to name a new prime minister. he will meet with a former socialist and plans discussions with daschle enjoying me is douglas yates. good morning to you sir. let's start off talking about how long it has taken for the president to select his pm candidate. many on the left are criticizing macron, saying he's interfering too much in the democratic process. what is your take? >> if the democratic process had really been respected, you would have populist in power. marine le pen would be in the back row. like one of the people which is. the democratic process has been tampered with brilliantly by phone. he called elections in june, he lost them but he counted on a

republican route that worked perfectly. the national front is number three and jordan burch ella is not going to be prime minister but then that left macron with a problem. who is -- to who does he give power? he would have worked with the center-right party. you might from her that as the circo seems. the head of that party does not want to give it any ammunition to macron because he wants to present himself or present. that left macron having to work with the left. on the left was his worst enemy. the extreme left. macron couldn't accept that. it took them months to find a common candidate. macron refused her. all that leaves him with his center party to work with

centerleft and there he finds himself with his old friend. and with it, the mayor of paris and the centrist socialists are the only respectable partners were willing to work with him and that's where we get. it's taken two months but from macron's point of view, no problem. >> it reminds me of one of those french sayings. all of them are going back to the same people with the potential selection. if he does do that, what are the chances of a no-confidence vote coming through? for any single one of the candidates he picks? >> in the theory of what he's been doing with consultations of the right and the left, he has

resented his strategy as this. he knows that nobody has a majority. but if he can choose someone who can survive a vote of no-confidence then he is choosing someone who can do the budget and the theory is that he can work with the left, can work with the right. he is a former socialist and he said i'm not going to become a prime minister of the right but he is also willing to work with macron. the two exley have a long history of working together as ministers in the same government but effectively choosing him is a problem for macron because he will be trampled over. he has his own views and he used to be in the hierarchy above that when macron was just an assistant general secretary and he was already european minister , budget minister and then

interior minister. >> can i just ask you how you see french politics evolving over the next year? it appears as though the left has fragmented, the right is fragmented and then they have to put e-government together because there is a budget deadline coming up. how do you see this up handing out over the course of the next year? is there another possibility of snap elections? >> he can't call anything for one year after the last snap election so there is a constitutional limit on him being able to call another election. so the group that we have here in palma, in the national assembly is the group that we are going to do with over the year. he was a budget minister. he is someone who knows how to negotiate and he is not entirely opposed to some of the fundament of reforms of macron. things like the environmental transition, things like this

present, readily reforms, budget cuts to welfare. new caledonia, france's pacific colony that is rebelling. euthanasia reforms, organize crime reforms so he is on board with white bit and he might negotiate a position that macro would be satisfied with. the only question is can he build a majority in parliament? then he has the support of macron's ensemble. the republicans have already indicated they will be a leader. i expect the budget to pass in the end but with real opposition and it will be a brutal political battle as people position themselves for the presidential elections in 2027.

>> yes. and it has been reflected in where french assets are training. let's not forget about that. thank you for joining us on the show. professor and political analyst at the american graduate school in paris. let's talk about in germany. we've also had some development's out of germany over the weekend. all of schultz possibly coalition is set for a landslide defeat as part of this parties on the extreme right and left are taking more than 60% of the vote. let's get more with oliver quirk. perhaps up to speed with what happened. it was a victory even for the far left. quick 70 angles. this was the center really collapsing. the biggest winner really so far has been the afd. where they won the greatest number of seats. this is significant.

they are our bca far-right groups. the ones that were on the ballot. all as extremist political gross. the first time they have come out on top and getting everything within germany. also significant because it was the first time since the second world war that he far apart in germany has come to this level at a local election. the gym is is not really resented it up what is happening on the national level where the afd is not really the number one party but is the number two party in a seen as potentially a harbinger for what is to come. particularly when you look at what has happened to the spd which got single ticks in both regions. the finance ministry were knocked out of the local government because they got so few votes. >> one of the big questions is

which other put up a party would be incentivized to work with the afd? we will talk more about that later on in the show. thank you for the update. from the german state election. there is 20 more to discuss on the show. this is bloomberg. ♪♪ ♪♪ ♪♪ ♪♪

♪♪ beaches jamaica sale is now on. visit beaches.com or call 1-800-beaches.

>> welcome back to bloomberg neighbor cured. democratic presidential nominee kamala harris has erased most of dollars from sleet amongst likely voters in the battleground state of michigan. the statewide epic pull of likely voters had 46% of respondents opting for trump while 45% back terrace. the sample in mid-july give trump a 7% -- seven percentage point lead over president biden.

the country continues with the hedge fund over akron claiming the ruling will likely driveway investors and harm the country. and coming up, it is the landslide that chancellor shows did not want as whispers on the stream right and left take more than 60% in reasonable spirit have more on that important story next. this is bloomberg. ♪

with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity.

>> good morning. this is bloomberg daybreak euro. these other stories that set your agenda. asian stocks slick as china's

economy falters as activity it's working for a fourth straight month. his real places for an nationwide strike for hundreds of thousands rallied to demand a cease-fire deal after the bodies of six hostages were found in gaza. germany's far-right sent to win a regional election for the first time since world war ii as the ruling coalition is punished in the east. let's get a check on some of these equity futures in the u.s.. we are coming off yet another strong session for wall street on friday with the s&p and nasdaq ending 1% firmer in response to that in-line pc data , better consumer spending numbers coming through on friday as well, propelling some of the positive recovery in risk on assets. overnight, we will be overseeing these asian indices setting the tone. you can see s&p futures leaning toward the red. the nasdaq down about 16 basis

points. the euro stops you true looks like it will open up in flat territory. a lot of political news today just as we've been talking about the elections coming through for the states in germany showing a big search for the support of the far-right. we will talk more about that with against the moment. and this is the only relative that we have on the board today. the u.k. index seen opening up. we are looking at some of the assets in the radar. we are keeping a close eye on the euro. this was the -- the next you see the meeting. as the market prices and some of the political premium that we mention. the town trading sideways. an imprint, the oil complex still sitting at around $76

handled. about 7/10 of a percent today as the energy complex considers weakening demand. in the next couple of weeks. let's go back to wilbur's oliver kirk in berlin. let's talk about the big victory some of these pop this parties saw. -- one of the broader implications of this one on the far-right? >> they got second place. the afd has never done so well on state elections but where we

take a look at the next steps are here is we begin to have a conversation about how you connect to the rule, how can you govern these regions? we will build the coalitions? there are many firewalls declared. that makes it really hard to collects all of the pieces to try to figure out how they would form a government. the interesting thing there is we saw the rise of the far left within these regions. this is a new little party that only began in january. they took about double digit percentages of the vote. without 12 to 13%. the thing that is interesting there is it to some of the afd's boat away. this is another question of if any of the mainstream parties will ever work with her. they've never been in a position where they have to and they have to start to look at that as a real possibility and one of the mission that she put on working with these governments is that explicitly they would have to back diplomatic efforts to end the war in ukraine. talking to russia. that is something a lot of the

mainstream parties have entirely ruled out. where we look at 20 to five we have federal elections within germany so you have some questions about what will be the dynamic going in there. we have the cdu pleading. they will look would be the biggest party going. there has been a lot of concern that you love these parts cannot be controlled so well but there could be collaboration theoretically with potentially the cdu and the afd. it is something there's been a lot of debate about within germany so we have to see how that will evolve. the last question is there is a real question about the election in 2025. is schultz the right man to lead the spe into those votes? >> yes. there could indeed be ramifications as the leader of that party. thank you oliver. thank you for giving us the contents. continue to conversation.

let me just ask you your take on these regional elections. a very interesting development. no surprise really that we have not seen so much support for these far-right parties. quickly government in berlin has been bracing for the state elections. this is a blow for filters government. the type for the centerleft, the greens, the free democrats. they barely made it into the state legislatures. the greens only made into one state and they did make the 5% threshold. so there is going to be talks in berlin about how long this coalition will hold. right now there is no motivation for any party to pull out

because the favorability ratings for the government are just incredibly low in germany at the moment. what does it tell you about the german public and the fact that both of the parties that 12 over this weekend -- even the we are talking about the right and the left, there are two common denominators, they are both enzyme aggression and they are anti-giving further military support to ukraine. what does that tell you about the mood on the ground for the german public mark >> that is corrected. there is a lot of overlap between these two parties that didn't prettily well it's elections but they are on opposite sides of the spectrum. so you can perhaps say the success is more pronounced because these two states are located in what was once east germany and you can look at factors like a lack of political party identification.

the rapid economic transformation over the past three decades as well as sympathy toward russia. but i don't think one can ignore the results because many of those themes that played out, this concern over migration, concern over inflation and concern about escalation with russia's full-scale invasion in ukraine are also being played out all over germany and will accompany the federal government into next year's campaign. >> i want -- of course, after the european elections there in the big win for some of the parties on the right, macron took the very self-destructive opinion to stop elections. i wonder if schultz pushed into a situation where he has to pull elections sooner. that is september.

question is a country that cherishes stability and chancellor schultz is very risk-averse. kind of like his predecessor chancellor merkel. there are many hurdles, off very high germany. there is much instability in journey. there is vast clinical leadership in france. they could advise about what to think about when the collection would occur. >> going back to the coalition itself, we -- what about ftp? the greens party as well.

not a good showing there as far as the regional elections are concerned. how did they regain momentum over the course of the next 12 months? question a results of the state elections have been a setback for chancellor schultz and his two partners, the greens and the ftp but it is constant concern for the cdu. at the end of the day there is much more party fragmentation in the political system here in germany and it is getting very difficult to form viable coalitions. we will be saying that in the two state elections and we are probably going to see that next year as well. for the greens, there is a chance to still increase his popularity within germany. the spd greens have historically not done very well in the form of east germany and the ftp as well.

there is still time. it will be difficult for the traffic coalition to enter a second term and we are looking at all kinds of possible tie absent next year out of the federal election here in germany. >> the clue is in the name. thanks so much for joining us today. there was the office director of the german marshall fund. coming up, how ai could improve the way small businesses manage everyday payments. we'll speak to the chief executive of county software. this is bloomberg. ♪

welcome back to bloomberg daybreak europe. the uk's private equity industry has offered to support some of

the governments propose plans to remove a tax break. jenny joins me now. talk us through what the government is potentially looking to do that has private equity firm so worried recently. >> there is a couple of different possibilities this could take. the broad goal for the prime minister is putting more of the weight on the people with the broader shoulders and so they really looks to do a couple of different things. whether it is change the tax rate that is applied to carried interest. that is a key part of the weighted dealmakers in the u.k. have made the money or they also could propose some smaller changes. i think all of the confusion and maybe lack of clarity has really had the entire private equity industry on edge for several months now.

>> it seems to me that they are coming up with some sort of a mechanism that will make these private equity firms come over and show support for these measures. >> that's exactly right. what we had over the weekend was on saturday was the deadline for different industry players or people that might have a view on what the government is proposing to submit their views. it was surprising because as much worry and angst as we've heard from them this month they've said as long as these measures are only applied going forward, that is they won't be apply to funds already raised in the past then this actually could work. that is a pretty big and key when for chancellor rachel reeves as she was to balance the

budget and come up with the plans for october. the government has set some of these moves in terms of raising the tax rate on carried interest could actually raise about 506 to 5 million pounds every year so i think that is a key piece of what they are trying to do. they've already got some support from the industry. that is a really good sign. >> it is a good sign. let's talk bigger picture. raising interest in carrot interest, talks of carried interest. in addition to potentially other tax raising measures. there has been lots of commentary on how these hurt competitiveness and made places like to buy more attractive financial centers. is that something this government is worried about mark >> acting so. they bring it up in almost every press conference or every news

announcement. we think they are doing is meant to have that i toward attractiveness and competitiveness. you will drive them away. that is good to be seen. we haven't seen any packed -- anybody packed their bags and head to the sunny shores of dubai. all of the lawmakers that are konta planning how to carry this out early keeping in mind. >> thank you jenny for that overview. let's turn our focus to the text challenges for small businesses and how ai could manage payments.

could have you with us. maybe just walk us through some of the growth plans you put in place. you been ceo for more than a year now. how are these plans looking to generate growth? >> we are really excited to grow our platform for small businesses. the u.k., the u.s. and australia we have long been a flash of their and three critical jobs where we see expansion. we alluded to the payments, both getting paid in making payments for small businesses. that is another -- >> you are primarily dealing with smes, small and medium enterprises. i just wonder if the landscape

significantly has structural change following on from covid and during the types of cover, we spoke about the castle issues, the liquidity issues. are you still seeing those issues today? >> yes, we are. covid was a very difficult time. it started new businesses. that is the entrepreneurial flavor. many people actually started businesses in new ways. the persisted issue, pre-covid and now post-covid is really late payments. many small businesses struggle. so cash flow continues to be an issue we see through our data in every market we serve. we serve over 180 countries across the country. we continue to see late payments be an issue. that is what governments need to support.

big businesses paying small businesses on time. question in a certainly an issue in the u.k.. speaking to my colleague about -- colleagues about potential measures. to what level do you think legislation can help spur growth ? what's ethic legislation scan. i think the digitization of software, whether that is taxes or even upscaling encouraging schemes and tech upscaling have all proven benefits to the productivity. late payments is something we see in both the old government and government looking to embrace. that's to -- that could also use a push from government. >> i want to talk you about the

main and strategy. just how you think about the amount of money you want to invest going into artificial intelligence versus the likely return of investment you're going to get in an environment where you have to keep them under check. >> this has long been a platform that embraced machine. if you think about the platform from today, anything where we offer auto categorization of expenses or things like scanning in your bills or things that historically require ai. we have been a big investor in ai throughout our history. that is generative ai and the ability to automate tasks. whether that is an automatic or a sophisticated ai agent. we see them giving bessel much time and efficiency that we do believe it is essential to our platform to include teachers

from simple to more complex. this is our own ai agent. it has just launched into beta. it helped small businesses raise invoices on our platform on platforms through email, through what's app and also write on zero.com in an automated way, trying to tackle that late payments issue and get cash flow in faster using generative ai. >> already seeing the efficiency gains there. great to catch you. thank you for coming onto our show and staying up late for us. plenty more coming up, stay with us. we will take a look at some of the key data to watch in the week ahead. today is a u.s. bank holiday. this is bloomberg. ♪

♪♪ ♪♪ ♪♪ sandals jamaica sale is now on, visit sandals.com or call 1-800-sandals

>> welcome back to bloomberg daybreak euro. we are keeping a close eye on developments in the middle east with some lines coming through now that the israeli government's is petitioning the court to block the labor union strike that is set to take place today and this all about it over the course of the last one for hours with israel's largest labor union calling for strikes. demonstrations in protest. six hostages were found dead in a gaza tom. the israeli government is looking to block that union straight from going ahead. we have another big week coming up. the main event will be out friday with the jobs data. we will look ahead to that. that comes up on friday.

thursday, 80 p. that unemployment rate figure as well. whether that will continue to tick up again. a big mess to downside would mean that perhaps a 50 basis point cut could be set is dumb for september. it will be a pivotable -- it will be a pivotal want to watch. more details on these jobs figures. on the next chart, the trend has been one of sequential lower and lower headline figures. you can see it right there. we have the nfp, that is the green bar that continues to trend lower and the private figures also trending lower month-to-month. it is quickly when you look at it going out over the last couple of months. the data has been drifting lower and lower. where will it form? where will it base out? bear in mind this downward scum a lot of those employment numbers over the last year. the true figure is over than what we thought it was before.

a quick glance at what is priced in for the subsequent fed meetings. more than 30 basis points priced in. 100 basis points by the end of this year. will those come good question mark that is a big question. when we will be paying close attention to but that is it for daybreak euro. stay because the open of trade is coming up next. this is bloomberg. ♪

ryan t. writes, "moving is stressful. can you help me take one thing off of my to do list?” ugh, moving's the worst. with xfinity, you can transfer your internet in just a few taps. just a few easy moves. did somebody say “easy moves”? ♪ ♪ oh no. no, i was talking about moving your internet. this will move the internet. ♪ ♪ ooh, ooh. -let's keep it professional. professional dancers! -ok! stay connected during your move with the best in home wifi. easily transfer your services in the xfinity app. bring on the good stuff.

>> good morning. i am guy johnson alongside kriti gupta. what do you need to know this monday morning? germany's ruling coalition is crushed in regional elections, raising questions as to how much longer it can last. the afd has won the far-right first state election since the second world war. emmanuel macron will meets today