a modest risk off move filtering through markets, waiting for key data, the manufacturing gauge crossing later today, expected to be in contractionary territory. more data around the jobs market. the u.s. reopening today after the labor market holiday of yesterday. european futures pointed flat. ftse 100 futures also in similar

territory. s&p futures low but near record highs -- futures lower but near record highs. this rally may stall out even with a cut, the view of jp morgan strategists. let's look cross. oil in focus. libya announcing force majeure, output challenges around that oil exporter, oil and brent currently trading at $77 a barrel. the u.s. two-year, as we look at the data story, evolving out of the u.s. the euro at 110. down .1%, more to do with dollar strength. and on iron ore, the selloff continues around that key commodity, $94 per ton when it comes to iron ore, down 2.2% after a drop of around 4%, so looking again at the basic resources sector at the open.

let's check in on how asian markets are faring this morning. avril hong standing by in singapore. avril: we are not seeing a whole lot going on in this part of the world. we are keep an eye at the end of the week on u.s. jobs data and in the meantime for u.s. markets to reopen after the long holiday, so thinner than usual trading volumes, particularly on the nikkei. not a lot of trading, but chinese equities are moving sideways more or less after the steep selloff just a day ago that was triggered by the data over the weekend showing those cracks continuing on the manufacturing sector. i also wanted to highlight in terms of sectors we are watching the chip stocks continuing their declines from a day ago, but the financial names and japan are among the big gainers as we see higher yields. let's flip the board because to your point about what we are seeing in iron ore futures, as they decline, they are dragon

the aussie dollar along with it. this is the worst performing g tuning -- performing g10 currencies today, down by the most since june. the one currency that is gaining in this part of the world is the japanese currency. the debate continues where does the yen go from here? at the heart of the debate is the extent to which we will see the narrowing yield differentials. mark cranfield raises the point that either way, what we get out of the jobs report friday, the yen could win. say we get a bad jobs picture and aggressive easing bets. we see the weak dollar strengthen the yen. if we see an ok jobs picture, that could prompt some safe haven demand for the currency. either way, maybe what we see is potentially going to continue. some of the dynamics to keep in mind in this part of the world, tom. tom: pimco suggesting the next

hike for the boj could come in january of next year. avril hong with a check on the asian markets. thank you has ever. in the middle east, thousands of israelis took to the streets and labor strikes and protests yesterday, the strongest pushy had to force benjamin netanyahu's resignation. the is really prime minister is for now at least standing firm on cease-fire terms. >> we say yes and they say no all the time but they also murdered these people and we now need maximum pressure on hamas. i don't believe either president biden or anyone is serious about achieving peace and the release would seriously ask israel to make those -- to make these concessions. we have already made them. tom: let's bring in roz matheson

for the latest. the pressure mounting but a defiant prime minister at least in that commentary from netanyahu, not suggesting he's wavering or changing tack, but behind-the-scenes is it moving the dial in any way? >> it does not seem to be. we had joe biden saying he thinks benjamin netanyahu could do more to get to that se -- that cease fire. you see an unusual apology from netanyahu. he did actually apologize to the families of these hostages who were shot recently, the six of them. he apologized directly to them with a big however. the however was i'm doing what is necessary to protect israel. his view is, if you allow some of these concessions to get the cease-fire, then you risk hamas being able to regroup, rearm and

come back potentially directly to israel so he feels he cannot move any further. he also wants the option still to allow fighting to resume, this to be a temporary cease-fire and not a proper pathway to the end of the work. it's hard to see how he can shift on that. he's very much bound in by the right in israel. he's aligned himself with the right to stay in power over the past year or so, so he's stuck on that front. and we have seen the u.s. pressure before. we have seen joe biden say repeatedly, directly, to the point that they were kind of fighting publicly over it, and it's not done anything, so the question is what actually will move the needle here? tom: the u.s. has not halted arms sales to israel. the u.k. though has halted at least some elements of arms shipments yesterday. did that come as a surprise? are they trying to leverage pressure on israel? >> is a reflection of the fact

probably that we have a change of government. in a way it matters more politically than militarily. the u.k. government does not ship weapons to israel directly. it allows companies to do so it it's very small. it is key components for things like f-35 aircraft and so on. it's going to be a very small military impact for israel but it's symbolic that the u.k. has done this. you can see this criticism already of the u.k. from israel and the israeli community as a result in differentiating themselves from the u.s., where kamala harris, the democratic nominee, has said she would not do the same thing, so it's interesting to see the labor government and the u.k. putting itself out there and signaling a different kind of relationship with israel. the u.k. is a strong ally and supporter of israel in all of this but certainly raising some questions about where the war in gaza is going. tom: roz matheson, thank you very much indeed on the latest out of the middle east and that decision by the u.k. to halt at least some shipments of arms or

components to the israeli military. now to the oil space. oil is steady after concerns over china's economic outlook, offset supply disruptions in libya. the state oil firm in that country to clearing force majeure in libya on a key field in the country's east, widening a production shutdown tri ggered by a power struggle. what do we know about the shutdown in libya in the impact? >> good morning. it's a major field for libya, the elephant field. giving you an idea of the importance. it's a big field the national oil companies declared force majeure on, meaning they won't have to make shipments to buyers. we have seen some shipments continuing from some of the ports in libya but with the amount of crude available and the amount in storage wendling

as these shutdowns cycle through the market, we have seen the eastern government initially declared force majeure and orders going into some fields to restart over the weekend. mainly we think for domestic use and refining. but that does bring some oil back to the market. but the real picture there is one of uncertainty, that we are not sure which fields are going up, which are coming down, trying to find out the actual level of production. libya does about one million a day normally. we are probably down to at least half of that according to some of our reporting. we will see how that develops in the uncertainty for the market about how long this potential disruption will last, tom. tom: we look at the disruption side and continue to monitor developments in libya. the question about china and chinese demand, with the softer data, we saw that play out to

some extent yesterday. where we stand on that front? what's the latest in terms of the demand and pulls from china and the outlook in the weeks and months ahead? matthew: the market is concerned about that because we are seeing focus on the construction market. and whether that will reduce demand. we are seeing some additional refinery startups. that will potentially push more product into the rest of asia. the market is watching what will happen. they do have export quotas for refineries. they need to see if they will fully use those and that will have an impact on the margins for refineries and the demand in asia. what happens in china does have an impact on the wider market that feeds back through to hear. we know opec-plus is supposed to go ahead with plans to add

barrels back to the markets starting october, some of the voluntary cuts members made, and that follows on a decision made in june to do so, so we will be keenly watching the market here, watching that chinese issue in terms of demand, the libyan disruption, as well as a lot of non-opec supply coming on from the u.s. and other countries in the americas, tom. tom: bloomberg's middle east energy reporter, anthony to pl -- anthony payola, thank you. a lens on china but also a disruption to export out of libya. here's what else to be ticking about today. 7:30 a.m. u.k. time, the august inflation print, cpi out of switzerland, expected to cool around the edges at least. it could lead to further expectations around the september cut in terms of interest rates from the central bank. we will watch that later today.

10:30 a.m. u.k. time, south african second-quarter gdp print coming out, a gauge in terms of the key emerging markets and the growth picture on that front. 3:00 p.m. u.k. time, a big one, particular for the u.s., the ism manufacturing print. we may get a second straight month of contraction when it comes to manufacturing. also looking at the components within that data set and to what extent that will factor in to thinking from the federal reserve around a cooling u.s. economy if indeed that is what comes to pass. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. subscribers can go to da why bigo on the terminal. a couple stories coming through, one of them a call from t. rowe price sounding the alarm onion ski volatility, saying that it is not yet done -- alarm on yen volatility, saying that it is

not yet done. cathay scrapping flights and ordering inspections between -- inspections of some of its planes. we continue to follow that. kamala harris says she wants u.s. steel to be domestically produced, so imposing another production problem or potential problem around nippon steel's bid for that key asset. kamala harris weighing in with her views yesterday. today's bloomberg big take focusing on volkswagen as it weighs closing factories in germany, the first in its 87 year history. we will be drilling into that and european carmakers struggles in the face of competition from chinese rival. next, india's nifty 50 has been rallying for 13 consecutive days, but it could be about to hit the brakes. we will analyze the numbers and get a view on india's markets. that is next. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak. let's turn our attention to india where the nifty 50 has been on a record bull run recently. year-to-date it's up about 16%. let's bring in the head of uae business strategy at a firm. always smart on these markets. does the bull run on indian stocks have further to run or are we looking at a pullback? tanvi: thank you for having me. a lot of people are asking the same question because they are outperforming not only their emerging-market peers but elsewhere. you see them outperforming even at the 20 year average.

if you look at the dollar return, it is something like 8.9% in the last 20 years, followed by the u.s. economy. so there has been a level of consistency. however, looking at short-term, we are looking at multiple different levels of risk. there's obviously the hovering u.s. fed rate risk. that is followed by the -- because the gdp numbers have also been below expectations for our b.i. we are expecting a dovish trend followed by a certain level of contraction in the monetary policy stance as well, whereas, in the indian equity markets, it will primarily be driven by private consumption, so taking the risk factor in place, take in place, and also the kind of inflow we are looking at from fii. there is a level of performance they are expecting that's better. tom: we want to get your views

on those flows, particularly in light of the expected cut from the fed. the question that always comes up, when it comes to indian equities, or within the recent timeframe, is the question of valuations. valuations now, benchmark price-to-earnings ratio about 23 times, well above the long-term historical averages for indian equities. is that a challenge to the run-up we have seen so far for going forward --far or going forward? tanvi: i do believe we are somewhat overvalued, not only looking at us in comparison to the emerging markets, we are overvalued by 2x to 3x, but if you take the nifty 50, the five year, 10 year long-term average in comparison to long-term average data and take 2006 as a base, your current averages are at 112.1, and

long-term tenure averages stand at 10.4. similarly, for mid and small caps, it's 4.9%. valuation in specific sectors is more than the long-term average. however, when you do a deep dive on a broader level market, we are somewhat still in line with the long-term averages. as you mentioned, 20 is not that high of a fall in indian markets. >> what is your sector preference at this point in? tanvi: on a broader level, we are looking at fii's, inflows in sectors such as power, telecommunications. we are very positive on manufacturing, on industrial goods, on cement, automobiles. these are the drivers we are looking at. if you look at the last quarter data, the best-performing indices were auto at 27.4% in

terms of year-by-year growth followed by financials. so these are the sectors that are also the key drivers for the indian markets at a broader level. tom: what kind of catalyst do you think a fed cut on september 18 would be for e.m. flows into india? tanvi: we are looking at a certain level of shock factor. all eyes are on the fed rate cut and there are expectations already building up so we do expect a certain level of knee-jerk reaction. however, the good thing is there is a healthy buildup by the dii 's, so you are already looking at 2.5 billion coming in consistently by way of investments in indian markets. with the infusion of jp morgan's index, we are expecting good, consistent inflows. so, again, positive inflows on the long-term, that yes, there

are a certain level of shock or volatility that we are expecting indian markets to have, also because of the rally that it has witnessed. tom: ok. so brace for a bit of volatility and may be increased inflows as well into india on the back of that expected fed cut viewed around september 18. they constructive view on indian equities from tanvi. thank you very much indeed with the nifty 50 flat on the session. aston martin puts its foot on the accelerator as it launches its new car. our interview with the executive chairman is next. this is bloomberg. ♪

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tom: welcome back.

switching gears and focusing on aston martin's new car, the vanquish. it's just been launched and was the center of attention at the venetian lagoon during the venice international film festival. i spoke to executive chairman lawrence stroll about how crucial the car will be for aston martin and his ambitions for formula one. lawrence: the demand is going to come from our long waiting list aston martin customers. we have a long history of making wonderful engines. this is our newest and latest and greatest made in-house. we have a long following of aston martin customers for rp 12 engines and have for decades. we have shown the car to several customers with great enthusiasm. tom: and the expected demand, i mean, is there any expectation that you will be going above that 1000 a year? why keep the production so limited at this point? lawrence: it is our flagship

vehicle. we have history and data from our previous flagship vehicles, so before the vanquish, our last flagship, we were selling approximately that amount, 1000 year for several years. that is the right amount of demand and supply. these cars are made to order and built by hand so we know that's what our demand will look like and we do not want it to be more than that. this is a very, very special car, and 1000 a year is the right number, as history shows. tom: you have a new ceo leading the business, adrian hallmark. some analysts have questioned the near-term targets of the business. does adrian stick to those targets or is this an opportunity to revise those targets for aston martin? lawrence: no. adrian has done plenty of due diligence. i will let him get his feet under the desk before i answer that, but basically, the answer is he does believe in the

targets. we are on a plan. he's bought into that plan and will be helping to deliver on that plan. tom: is adrian going to be joining the team? >> i certainly hope so. we have been talking not only for months but actually for years. adrian is clearly the most talented and gifted individual in formula one based on his track record in history in addition to being a hell of a gentleman, so i would be very excited for adrian to join our team, as i think every other formula one team on the grid would feel exact the same. >> we can assume that you are pulling out all the stops to ensure that adrian does join aston martin formula one. lawrence: you can definitely assume that. tom: ok. lawrence stroll speaking to me from venice. switching focus now to live pictures coming out of mongolia's capital, but there

-- where vladimir putin is meeting with his mongolian counterpart. you can see they put on the display there in the mongolian capital. this is a trip that putin ensured that he would not be arrested by the mongolian authorities because they are signatories to the international criminal court. there is that arrest warrant out for putin. he received that assurance. he's being given a warm welcome. plenty more coming up, 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.

♪ tom: good morning, i'm tom mackenzie. global stocks hover near record

highs, looking to key data for clues. dw considered its first closures in germany to cut costs as europe's troubles. it is really prime minister netanyahu asks for forgiveness over the deaths of hostages but pushes back against pressure for a cease-fire. keeping our eyes on the events in the middle east. european futures point higher after the weakness yesterday, a holding pattern for equities. our eyes are on manufacturing and payrolls i should say. data out of the u.s. could gauge the health of the economy and

the deliberations of the fomc. european futures point modestly high, ftse futures up by 1/10 of 1%. u.s. market reopening after labor day, nasdaq is lower. focus on the yen coming through after four sessions of weakness and euro-dollar softer, down 2/10 of 1%. 392 on the two-year, one basis point. brent is down, production challenges in libya declaring forced measure of an oilfield. after the weakness of yesterday

we look for the resources sector and concerns over demand in china. focusing on airlines with cathay pacific, disruptions to claims, inspections carried out around the airbus a350 that flies between hong kong and singapore. it seems to be revealing engineers have been checking fuel lines suspected to be the reason why they have canceled the airbus flights for what our fleet wide precautionary checks according to people familiar with the matter. they've asked for specific checks to hoses supplying fuel to the engine. that is according to the people

who have asked not to be identified. this story continues to evolve and the issue around supply chains for these aircraft makers has been prominent in recent months. this involving inspections of a350's halting flights between hong kong and singapore. the price right now is down 2.3%. today's big take digs into volkswagens moves, a historic move being considered to shutter factories in germany, chinese manufacturers are racing to produce vehicles. let's get more with elizabeth.

what does this say about the state of cars in europe and how careless the situation is? elizabeth: i would say since last you there has been a sense of things derailing led by the slump in electric vehicle sales as governments removed incentives. things did not pan out, vw is the one that has the most work to do. the company has a particular governance, it makes it really

hard. tom: given the structured and the role of unions on the board how challenging will it be to cut down or shut those plants? elizabeth: if history is a guide you would say not very lots of key executives have vacated their seats over plans like this so all blumer will be in a tough spot even as vw breaks in profits. they may billions that the competition is growing, they need to make changes him -- last

year they made 9 million. but the plants most at risk would be in the high cost areas of western europe and that is where vw has most plants among those high costs. palm: elizabeth with the latest in terms of historic closures in day to remind you that on our website and on the terminal.

looking to finally name a prime minister overt or country's. he is kevin. does the risk become unwound if we get the prime minister named? kevin: i'm not sure. when we look at the french traded versus germany they have gone up since last june moving from 40 basis points to 70 in should be able to tema upward pressures. we do not have a government, not convinced of how stable it will be.

we need a prime minister with the votes which is a hard challenge. you have to be working on the budget and responding to the deficit, very tough job. tom: do markets have a preferred candidate given what you have unveiled? kevin: well, i would say extreme scenarios have been pushed. no clear majority hence the movement on the spreads we have seen. no clear winner, spreads have gone higher i reckon so this status quote is the less bad option of those elections.

stability is key. poor two months we have not had any governments in france. the budget will have to go. tom: indeed. you talked about a spread. 70 basis points in terms of the yield over german equivalents. it sounds indeed like you think the spread is the new normal right now for french that. is that right? kevin: yes. deficits are massive. 5.5 or 4.5 expected deficit is huge. does this warrant 40 basis

points reds? low-level spreads were a sign france was part of the european engine. popular party gaining ground, this is not a given. in one sentence, populism has gained ground and that is not positive. tom: with all the caveats what our markets looking for when it comes to the budget because there is no fixed timeframe but the countdown is forcing a push. what our markets looking for? kevin: what has to be baked in his .44 .5% in the budget.

that is tough, emmanuel macron has to square a circle because whoever will be appointed will push for spending, physical spending, so questions around pension reform is the equivalent of what needs to be saved, that is what we are looking for. having said this there are second-round effects because if the government pushes for austerity, there would be more required so this could be 1% of austerity. tom: kevin, portfolio advisor,

smart context around france. we wait for the nomination from emmanuel macron for french assets. indeed. where to invest beyond big tech with james from investment firm aberdeen on that view. stay, this is bloomberg. ♪

>> welcome back. chatgpt sparked a frenzy and silicon valley names grabbed much of the attention. changes are also happening in

taiwan. annabelle droulers has more. >> taiwan is the home of our treasured partners. this is where everything begins. annabelle: taiwan's dominance in advance chips has grown through the ai boom created fortunes. industry billionaires are 90% richer. stocks in taipei have searched. property hit a record high with the biggest gains in the home of tsmc. the wealth boom is raising fears. guest: worsening of income distribution and i don't see any measure to improve this. parents take the brunt by helping their kids but it is not

sustainable, the next generation will not be able to do this. annabelle: taiwan is seeking a $1 trillion economy with gdp surpassing south korea next year. annabelle droulers, bloomberg news. tom: let's bring you jamie, investment director at aberdeen. i want to look back at earning results. the earnings beat and outlook was more upbeat than suggested but the stock sold off. the take was the ai bubble is losing air. would you agree? jamie: yeah, i -- i -- i -- i

challenged whether it is a global. i think it is fair to say earnings season has been mixed and nvidia fell in that bucket where you had good revenue and weakness in gross margins. those kind of misses are going to be punished and there is a bigger story, fundamentals driving tech. the difference between technology and the rest of the market converges next year. how -- tom: how do you invest around that? jamie: it is a case of where do we see derivative place?

tom: too early to be looking for those or is now the time? >> outside data centers we moved from gpu club says to one million. the impact on the grid, you've seen a five times improvement in performance. roadblocks are good places to invest in tech. these were big themes around ai. tom: huge capex spending will continue even as those questions

become more common? how fundamental is that? >> it is fundamental. divergence between r.o.i., we must invest regardless of returns, risk of underinvestment is greater. that introduces risk. you get digestion and in the future the market or ceos are saying continue to invest. strong move up in the problem is

not demand, it is supply. blackwell was a big concern and also supplies. tom: visibility through 2025. >> navy. -- maybe. tom: the energy component is crucial. how are you thinking about the grid upgrade? >> it is a global phenomenon, not just the u.s.. if you look at data you are having problems in taiwan, you

cooling stations. that is interesting. the u.s. is adding to its grid. in the u.s., under invested utilities infrastructure make it problematic so reassuring is prompting a rebuilt alongside fai, more pressure, double whammy. industrials have a role to play. far more geographical concentrations in the u.s. and europe. a lot needs to be done.

tom: you can imagine unhappy executives. the visibility is more challenging. fascinating. investment director for equities, we appreciate the insights. stay with us. this is bloomberg. ♪

tom: welcome back. we are on the biggest percentage

drops month of september. maybe the federal reserve will cut. that is the backdrop. let's look at manufacturing data as we lead up to the picture with payrolls ending on friday. you are expecting to see a further contraction. 48 when it comes to manufacturing. the divergence expected to

expand. scrutiny on hiring. barrels on friday. plenty more, it is the opening trade speaking to executives and setting you up for the week. 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 anner edwards. here is you need to know. volkswagen's first factory closers -- closures. emmanuel macron under