>> good morning. this is bloomberg daybreak: europe. these are the stories that set your agenda.

traders stand by for what could be the most consequential u.s. jobs report of the year. the fed says lower rates are coming as the labor market cools. the former brexit czar becomes france's new prime minister as he bids to end the political turmoil of the past two months. we bring you reaction throughout the program. plus, lower taxes, less regulation. donald trump vows to cut america's corporate tax rate from 21 to 15%. he says elon musk will lead a task force on reforming government spending. jobs, jobs, jobs. that's the focus of the markets today.

non-form -- nonfarm payrolls coming out. focus will be on the on employment rate as well. the expectation is that what -- will move forward. what happens? the consequences of this print in terms of how the markets assess the move. officials say from the fomc, a cut is coming. 25 basis points or 50 basis points. european futures looking lower, down 1/10 of 1%. you are set for losses for the week for european stocks. as you can see, futures pointing to further downside. investors having sideline attitudes until we get the data out of the u.s.. the ftse 100 futures pointed lower by 12 points. s&p futures looking at 5500. down 1/10 of 1%. u.s. markets off to a soggy year yesteryear. let's flip the board and lacrosse asset. further moves into treasuries yesterday.

yields down on the two-year in the week by about 20 basis points. 373 on the u.s. two-year. that could be vulnerable as we look to the jobs data. euro-dollar at 70 tall -- $72. down 8% for the week despite opec-plus saying they will hold back on putting more oil into the market for now. gold and 2580. let's cross over to singapore. a deep dive on the asian markets. avril: we are seeing anticipation building. a hint of the u.s. jobs print. worries about whether the federal but -- reserve is behind the curve is prompting a bearish move across the region. it's pretty mixed. the taiex is managing gains for a second day. if you take a look at the bloomberg asia ship gauge. it's actually headed for declines.

hasn't regained the loss mojo from the nvidia meltdown. we are having hong kong markets shut because of the super typhoon. hung singh is not on the board today. as i said, it's really about the u.s. numbers. we are seeing the u.s. dollar extending declines in the asian session. these are among the ones that are the top-performing today. the philippine peso comes a thai baht. a lot of these asian economies get most of their business from the u.s. and china. as china's growth doesn't really come through rate has fallen short, the owners lies with the u.s.. that's why the data today takes on added significance. as our mliv colleague has been talking about on the blog, is not just about the size of the cut in september.

it's also about why the federal reserve is doing this. dollar-yen has been climbing for four straight sessions. today we got some comments coming from the former boj official saying there could be two cuts this year. i just wanted to highlight the correlation between the yen. if we get a poorer jobs picture, we could see further weakness in the dollar. that could send the japanese currency rallying. greg: -- tom: as we lead up to the jobs data out of the u.s. and the ripple effect to the asian region. traders are looking ahead to that number. u.s. payrolls data later today as we've been saying which may determine the size of the fed's interest rate cut this month. our executive editor for asian

markets standing by for the analysis. what's the market expectation? what's priced in at this point? >> yeah. the market is priced for a pretty middling looking jobs number. with very much the risk of it being a deeply or negative number. being where there are skewers. if you look at fx market volatility for example, the market is priced for a pretty big move in the dollar against most of its major counterparts. the skew is favoring the risk that the dollar will continue to weaken sharply. people more worried about about number than they are hopeful for a good number. that's because another bruising looking labor market figure could be enough for the fed to decide that it needs to start it series of interest rate cuts with a 50 basis point move rather than a 25 basis point

move. could technically pull the u.s. currency weaker. tom: we are getting data out of the u.s. on nonfarm payrolls. we will continue to hear from officials over the next 24 hours. we heard from elite -- mary daly , suggesting that they are ready to go ahead with those cuts. does anything that they've said change the pricing that the markets are now seeing? about 100 basis points of cuts by the end of the year. what do you make of the comments from these fed officials? >> yeah. if you look at them one by one, mary daly was in line with what the governor was saying and jackson hole. talking about the idea that the hiking cycle is definitely over and it's time to start cutting. let anymore deterioration would be unwelcome. the same words that were used by the governor talking about the numbers that we are going to get later today. a little bit more interesting.

this is something that people will start to pay more attention to. what does the terminal rate look like? how far are we going to go with those interest rate cuts? talking about the need for a series of cuts. not just sporadic or scattered. so the market is into minds about how deep the cuts are going to have to go. seems like the consensus is that we will get to as lowest 3%. that's a long way from where we are today. it's nothing like where we were over much of the last decade were interest rates were much lower. that's helping people to calibrate their expectations for the two year yield relative to the 10 year yield. we have seen those variations and fluctuation around the difference between the two in the shape of the yield curve at this moment. tom: and the debate about the neutral rate continues.

whether it's 3% in terms of the neutral rate. that debate will continue for days and weeks ahead. setting us up really nicely in terms of what to expect on a big day for these markets. the politics of the euro zone and france in particular is also a key story for us. the new french prime minister has made a plea for political parties to work together in order to move beyond uncertainty. france thrown into chaos after the president called the snap election. speaking after his appointment, the new pn said his new government will act more than talk. >> we will act more than talk. we will try to find solutions coming from everywhere. the government will not pretend to have a superior knowledge. i have learned in my long public

life that good ideas come from everywhere, often from the bottom, the most humble of people, when you take the time to listen to them. tom: at this point, let's bring in our reporter from paris. i know you and the team have been waiting for this moment on tenterhooks. and finally we have an answer. why has he chosen michel barnier? >> that's really the only name that he came up with that he believes will not face a vote of no-confidence. the reason for that is that the national rally had said that it would not vote and make the government collapse. at least he could stay a little bit. he is a very well-known international figure, especially for you and the ok. he was in charge of the eu for the brexit negotiations for four

years and was considered very tough, patient during those negotiations. especially when you had lots of divergence on trade, fishing, on transitions. before that, he was also the eu commissioner for internal markets. he's very well-known at the eu level. quite a reassuring figure. last time i interviewed him in july, the middle of those snap elections. he refused to say he could be a solution as the prime minister. he said his redline was any threat to the european project. in france, he's been around for a very long time as well. he was elected mp in 1978. he was european minister, foreign affairs minister, agriculture minister. he didn't even try to run for the 2022 presidential elections and lost in the republican

primaries. of course, the left-wing today is feeling outraged. the far left leader has said the election was stolen. the socialist said it was a denial of democracy. we will see over the weekend if there are some process -- protests that could potentially damage the credibility of the new prime minister. tom: ok. the response from the far left. this is clearly one important piece of this puzzle. the anointment, the appointment of michel barnier. what's next to build out this puzzle that is the new french government and its policy agenda ? >> they hand over between the youngest prime minister and the oldest at 73 years old. over the next few days, he's going to have to form a government. that will be tough because he will take some personality from the center. also has to extend the hand to

the center left and right, as we have been discussing. if he doesn't want to see his government collapse immediately. he will do a general speech in parliament. he could face a vote of no-confidence. then there will only be a few weeks before he has to present the project. the deadline is october 1. michel barnier talked about telling the truth to the french about the project. we know that the deficit slipped to 5.5% last year. much higher than the target. it's expected to rise even more this year, up to 5.6%. already the previous finance minister has warned about that. potentially too much spending from local committees, as much as 60 billion euros. some entities have told us on bloomberg tv that france could

need even more austerity. as much as 0.3% of new austerity in the budget. that would be around the equivalent of the savings from the pension fund. tom: lots more questions that still need to be answered. the input case and for that budget deficit and potentially further cuts coming through. at least some cuts coming through for the french state. thank you very much indeed. we have the answer in terms of french politics when it comes to the prime minister and economic data out of the euro zone. 10:00 a.m., euro area second-quarter growth numbers will drop. important if you think about the fact that the ecb is coming out with their decision next week. that data live at 10:00 a.m.. 1:30 u.k. time, it's the big one. we've been talking about this and we will continue to talk about this because of the consequences for the markets. the jobs report at 1:30. don't miss that live coverage.

1:45 p.m. more speakers from the fed. williams will speak at 4:00. chris waller will be speaking and reacting to the nonfarm payroll numbers. the time is right to start cuts. austin galls be suggesting that the economic data justifies multiple cuts starting soon. will we hear a similar message? opec-plus pauses. the price of crude fails to meaningfully bounce. we take a look at the oil market. rent at $72 per barrel. later in the show, low taxes, low regulations, low energy costs. donald trump sets out his story on the economy. the latest on the race for the white house. this is bloomberg. ♪

tom: welcome back to bloomberg daybreak: europe. happy friday. oil heading for its deepest loss in a most a year, despite opec-plus members delaying an output increase. let's get more with bloomberg

horizons anchor who joins us from dubai. the speculation this week given the downside on oil, 8% was the drop so far through the week. we'll opec-plus have to delay putting more oil on the market? they are finally saying that they will do that. talk us through what we've been hearing from the cartel and their allies and where this leaves the market. joumanna: certainly. huge price drop. the oil complex down a percent over the course of the week. it was over to u.s. far as opec-plus was concerned. yesterday afternoon, they put out a statement saying that the eight countries that had announced those voluntary cuts had held a virtual meeting. on the back of that meeting, they decided to push back the timing of tapering those voluntary cuts. essentially what we are seeing is instead of starting the unwind of the cuts, they've now

pushed it back by two months. they will start on december 1 this year, keeping the exact same tapering schedule as they had in place. now scheduled to end at the end of december 2025. there are a couple lines in the statement talking about the two serial offenders when it comes to over to reduction -- overproduction. they have been urged to start conforming with the quotas and come up with compensation plans to reveal to the market how they are planning on compensating for all of the overproduction that they've introduced since january 2020 four. those highlights came out from the opec-plus statements. ultimately what you saw is a bit of stabilization coming through with the price of oil. it didn't last very long. at the end of the day, people read it as not them ruling out the possibility of putting for -- further barrels to the market. they have just pushed back the decision by two months. tom: that leads me onto an

obvious question. market expectations are rather -- around whether they have to kick the can further down the road. whether we revisit this question and they will have to kick it back even further. what are the markets thinking about in terms of what could determine that decision? does the pressure within its cartel mean that they will have to finally actually put some oil back on the market? joumanna: you raise a good question about opec-plus. the fact that they are able to still come together and make these decisions tells you that they are intent on coming up with decisions at a group level. certainly a lot of pressure on the countries that are overproducing. the uae managed to carve out their own quota back at that june meeting to start producing more. there will be members pushing for further market share. as we've been talking about, the main driver seems to be the outlook for global demand. the big catalyst for the drop in the price of oil this week was

not data coming out of the u.s.. it was actually that china pmi data that disappointed to the downside. keep an eye out on the data that comes out from china. the demand signals there. in addition, we are entering into the refinery maintenance season which means that the broader demand for crude oil could subsume by -- subside from a seasonal perspective. keep an eye on the technicals. i was speaking to traders and they say as we approach the $70 barrel -- level, you could start to see some gamma selling. some options activity. in which case you would see further downside momentum. in which case would be on the alert for further bearish moves to the downside. keep all of those things in mind. it's not just a man but also some of the technicals. also the non-opec supply that we've been speaking about that is still hitting the market. tom: really interesting on the technical line as well.

coming up, power grids feeling the heat under intense demands for energy. we look at ways to boost investment in critical infrastructure. that's next. this is bloomberg. ♪ ♪♪ ♪♪ ♪♪ sandals jamaica sale is now on, visit sandals.com or call 1-800-sandals

tom: welcome back to bloomberg daybreak: europe. analysis by bloomberg has sound -- found that investment in u.s. power grids hit a record. for more, we are joined by the senior associate in bloomberg and he asked grids team. so thanks for joining us at the studio this morning. does that suggest that policy within the u.s. is working to drive these investment rates higher and have a material

impact on the grid infrastructure? >> we certainly seen very promising policies like the inflation reduction act that has allocated several different funds to supporting power grids. that's definitely a contributing factor to the growing grid investment we are seeing in the u.s. and also in europe. we've seen a big policy push. globally, we've tracked 326 billion u.s. dollars going into power grid investment last year. our analysis shows that this could grow 13% this year. continuing to grow. tom: 111 billion in the u.s.. 326 billion globally. an expectation that that could row 13% this year. you are talking about the policy stability and transparency and certainty in the u.s. as a result of the inflation and reduction act. what is the funding coming from at this point? >> although this funding in the

u.s. has been very promising and important, most bridge funding is private. around 60% is typically borrowed capital. so that's why the bond markets are so important. especially in europe and the u.s. as well to some extent. we've seen the green bond market really growing. many utilities raising green bonds to fund their grid investments. that's a recognition of how important the power grids are for the energy transition. tom: i'm thinking about the shift to renewables. there's been a big debate about how you get renewable assets onto the system more quickly, given that a lot of these grids need to be upgraded. the infrastructure is dated. it's a bit of a bottleneck. is that improving? >> things are still getting a little bit worse before they are getting better. we were talking about policy.

one of the promising policy developments has been the administration on how you connect renewables faster to the grid. as long as the actual building out of the grid can't be accelerated, there are large projects and they take a long time. you have a situation where renewables connect before the grid is fully ready. that can lead to what we call curtailment. the grid operator instructs a wind plant to turn off when the grid is overloaded. tom: thank you so much indeed. really important analysis. senior associate at the bloomberg nes grids team. coming up, a new french prime minister. the details and implications. 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.

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mackenzie. consequential jobs report, lower rates are coming as the labor market cools. francis prime minister vows to end the turmoil. 15%, elon musk will lead a task force on reforming government spending. european stocks set for losses but the jobs report, you will

get a print with focus on unemployment. european futures are down. s&p futures are off and nasdaq futures are down. the move into treasuries continues, the dollar is under pressure. yields have come down.

brent is 72. they will be delaying that increase. gold is up 2/10 of a percent. politics of france, ending deadlock for now and allowing the government to focus on financing. joining us from paris is the head of market strategy. is this the name markets were hoping for? guest: this appointment is a

relief at the end of two months of uncertainty, expecting the new prime minister but the spread is compressing because this name means more stability in france, this is a key thing emmanuel macron was looking for. my comes to french policy we have to deal with fragmented parliament, far left and far right. increasing fiscal spendings when maneuvers are limited so we vended negotiations between emmanuel macron and the parties

and entering negotiations between the new government and the parliament so another. of -- another time of positive outcomes for the market, something more volatile and complicated for the equity and bond markets. tom: you have the spread of french debt, 70 basis points now. when do you see that being raised, how long before it returns to precrisis levels? >> some key figures, last year

5.5% fiscal deficit in france and now the market is expecting a reduction so the deficit is not expected to decrease, no measures decided by the government. the spread now is no reason to disappear because there are difficulties so now the key thing is the -- the -- the -- the roadmap of the new government. in route to reduce the policy. numbers that we have so far is 0.1% this year, 5.6% if nothing

is decided. tom: ok. year to date down 1.2 or 1.3%, underperforming clearly the s&p in the ftse 100. is there a buying opportunity for the french equities? >> when you compare the performance of french equities to other markets, the spread is an entry point but we need to be careful because the market investors are more selective. looking at the equity market because there is no positive trend, investors are looking for

protections and this is why no positive news is coming from the government. this will change at a time where if you look at different segments of the market small-cap has been damaged and you need more guidance, more growth. equity market increasing, we need to wait more to see these things happening. tom: sounds like you would advise on sitting on the sidelines. looking ahead to the ecb do you expect rate cuts and could that

be a catalyst? guest: it could help. the situation is different because the fed announced what they are going to do. more uncertainty, we don't know what but the timeline, preparing the market for one or two rate cuts may be september, october but the environment, there is a need to lower interest rates so ecb cutting rates could help. the market has president rate cuts and consequences could be

unlimited. we'll know when the ecb will cut. september or october and clearly the signal is priced in. tom: ok. so we have demand for european goods from china. connie mack makers as well, to what extent is china christ in to the luxury sector of france. guests: excellent question, depending on the chinese business cycle the manufacturing sector depends on the chinese business cycle so what is the

situation? chinese economic situation disappointing investors and issues in china are more structural than investors expected. seeing the chinese economy recover will take time and the segment of the downturn is damaged, demand. if there is no support from the fiscal policy, little chance and luxuries. this is under pressure chinese business cycle and there is no positive signal at this stage.

tom: i read, thank you very much indeed on the china impact and politics of france. we will stay on that topic because we caught up with jean-claude, former ecb president for an exclusive interview about france's prime minister. guest: the market is between 25 and 50. i will not choose. the open market is serious, they were determined to do the job, raising rates 11 times. this'll be the first time they decrease so they did a good job,

decreasing rates would not be absurd in the market is anticipating it. how much it was overdue? i think that the choice is a very good one. i think it will inspire confidence in europe. and the brexit negotiation. he was minister in france, has a lot of experience, so a good choice and of course the difficulties are enormous, in terms of the finance problems in the fiscal problem. tom: former ecb president speaking to us. the u.s. imposes new export

controls including quantum computing and semi conductor goods targeting china and adversary nations, including cutting edge technology. bloomberg learned intel is weighing a sale of its majority strength in mobileye. they have a board meeting where plans will be considered, sales slumped. reuters says qualcomm is exploring acquiring intel's design business. broadcom fell post market after fourth-quarter revenue forecast list. ai growth was unable to offset

operations that grew more slowly than anticipated and aviation safety agency will require inspections of airbus engines after a midair fire on a cathay pacific flight, which forced the airline to ground planes and operators must check for damage inside engines. donald trump unveils plans including a tax cut and tapping elon musk to head up and efficiency task force. the details next, this is bloomberg. ♪

♪ >> welcome back to bloomberg.

donald trump pledges to cut corporate tax rates and audit the federal government as he pitched his agenda. he says he will prioritize the economy. trump: to support american manufacturing my plan calls for tax credits, 100% bonus depreciation, expensing and reduction in corporate tax, 15% for companies that make their product in america. ,: join now by kriti gupta.

kriti gupta, this sounds like a full-blooded pitch to corporate america. there is a deep division now from kamala harris and trump. kriti: the -- the -- the thing is these are two candidates trying to appeal to voters because the biggest topic is the economy, inflation, more so than any other, this is where they are trying to make strides with donors and that's where the comments come in handy. this is in comparison to 28%, still lower than biden. trump leans into a success story

that he kind of had his first term, significant because not only did they make the deficit larger and it came with a lot of criticism but net-net economists will agree regardless of what spectrum and income bracket submitting he's building on, the flipside criticism is how he will find this given the deficit in his answer is tariffs. tom: he's already cut the corporate rate, we had harris and house and senate, whether they can push through but in terms of the funding is there more detail, is there

skepticism, concern? kriti: the deficit is getting larger, budget ceiling gets hit january so prior to the new president. you cannot make the time, so this will show up in congress more so than the president. tax cuts expire in 2025, so do we wait for them to roll off or extend the is arguing to extend and make it lower. the concern is this could be inflationary not because of tax cuts but because of the way he is talking about funding them.

it could show up as quickly as 1%. tom: trump wants to cut, name checking musk. take a listen. trump: i will create a government task and audit of the entire federal government making recommendations, we need to do it and elon musk has agreed to head the task force. tom: elon musk being tapped for this role. kriti: elon musk is a donor and major trump supporter with a massive following. he is a key voice in these and this is coming in a time when harris is trying to court

belieber vote. folks trying to work either direction figure out which candidate is better elon musk plays a big role but trump has started tweeting, he was on a live interview with elon musk so there's a friendship. tom: fascinating for a candidate build out by the obama administration. kriti gupta with the latest from trump. stay with us, this is bloomberg. ♪

tom: it's all about jobs dater out of the u.s. for these markets. in terms of jobs don't forget openings were higher and layoffs were smaller so fewer job openings and more surveys. private payrolls below 99,000 suggesting we are set for a soft a number. the forecast is around 165,000 in terms of the numbers, up from the july print but seasonally still close for a two-year low so that is forecast. unemployment is 4.3%.

so consequential and here is the picture across this historical context and it's the lowest we've seen in two years. hearing calls from fomc's austin goolsby to cut and have a number of cuts. weaker and lower yields weigh on the u.s. dollar. softer dolla, 20 basis point move lower in terms of the two-year. watch the dolla and the implications. stay with us, the opening trade is 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.

anna: