>> good morning. this is "bloomberg daybreak: europe." former president donald trump is fee after an apparent second -- is safe after an apparent second

assassination attempt. morgan cutting -- as markets prepare and brace for big central bank decisions with ramped up bets on a jumbo fed cut. and it is revealed it took more than two years for bmw to discuss -- to discover the extent of a fall suspected to cost the german carmaker nearly one billion euros. happy day break and happy monday. it is about the central bank decisions but we focus on the political impact of the news out over the weekend. we will bring you the latest on the apparent assassination attempt of former president

donald trump and the ramifications for that election. in terms of the market focus, central banks upfront and central. the debate is still around whether or not they go 25 basis points or 50. markets increasing the bet on a jumbo cut. european futures pointing to gains, .2%. few -- ftse 100 futures. s&p futures looking to add three points after decent gains for u.s. and european equities last week. nasdaq futures are flat. cross asset, treasuries not yet trading. the bloomberg dollar index in focus. softness on the bloomberg dollar index down .2%. some of the moves you saw on the back of the news around donald trump. and the implications for the u.s. election. japanese yen crossing through the 140 level.

a gain of .5%. we are looking at a boj decision on friday. not expecting to move higher at least this week. we focus on that decision. brent, flat on oil. a reduction in output from libya. the demand question is back in terms of the china component. gold, a fresh record high. pricing in deeper cuts from the federal reserve. up .3%. let's get to another momentous weekend in terms of the political landscape of the u.s.. donald trump is said to be safe and unharmed after an apparent second assassination attempt. it is believed the secret service detail opened fire on a man who was close to a golf course on the edges of a golf course where donald trump was playing.

take a listen to what we heard. >> former president donald trump is safe and unharmed. following an incident shortly before 2:00 p.m. on sunday at trump international golf club at west palm beach. circuit -- secret service personnel opened fire. this man -- this matter is under investigation. tom: let's get more on this story with bloomberg's news director. what do we know about this alleged shooter? >> he is a 58-year-old man. not much is known about him. he seems to have moved to a oh -- hawaii six years ago. he has had a series -- he has a criminal record but mostly from minor offenses. some include firearms. what could have motivated him to

do this if he was intending to try to shoot donald trump? we know from some of his social media accounts that he did express strong support for ukraine and its fight against russia pushing the u.s. to do more to support ukraine. volunteering himself as a soldier for ukraine. we don't know if any of that played into his intentions. there is evidence that he donated to the democrats in small amounts. and he was a supporter of donald trump until a few years ago. this is all being gleaned from his social media accounts. he is the alleged shooter and is in custody. tom: it is remarkable what is unfolding in terms of the buildup to the vote in november. we get immune to the fact that there is surprise and shock one day after the next. talk to us about what we think

this may do or has done in terms of the political outcomes for trump and harris. >> this would be the second attempt on donald trump's life potentially in a matter of months. after the first one we saw him get a bounce in the polls and an increase in donations. this time he has been on the back foot for the last few days. his debate performance was messy. there was a concern that his campaign may be teetering with some of the things he may be saying. does this recent momentum for him -- does this reset momentum for him? or does it change the minds or bring out people who would not have come out to vote? and in the swing state areas, will these people vote for him? that is the leap we are not sure we would see tom: thank you for

the latest on what we know about the alleged shooter and the political read across. avril hong is standing by in singapore. avril: we are seeing the markets in japan and on the mainland are shut today. against that black drop the gauge of stocks for the region excluding japan clocking gains amid optimism surrounding potential fed easing. that is helping equities in australia and taiwan. we are seeing that being offset by the concerns surrounding china. data over the weekend painting a more worrying picture when you look at factory output and consumption. even new home price declines accelerated. it shows the weakness of the chinese economy. the hang seng and hang seng

china enterprises index which is the hong kong gauge of mainland stocks. managing declines of 1% from earlier in the session. paring some of that somehow. the story in the last hour has been about the yen strengthening. we see the nikkei futures in singapore pointing to declines as markets in japan are set to reopen tomorrow. the dollar yen moves are important to flag in this big week for central bank decisions. it is amid the backdrop of the expectation of narrowing yield differentials between the u.s. and japan. we saw the dollar-yen move below the key psychological level of 140. there are expectations in the market that it will sound dovish if the fed cuts 25 basis points.

some board members and china are not deterred by the august market route and how they seem pretty determined to hike rates again. that is what is at play as far as some of the central bank signaling and positioning is concerned. japan markets are closed. we see then market liquidity which could be exacerbating the moves we see in the currency space today. tom: avril hong in singapore, thank you. the focus on the japanese yen. the central banks -- the boj is on friday. traders are bracing for what will be a particularly busy week for central banks. from the fed, the bank of england and the bank of japan on friday. bloomberg mliv asia reporter, garfield joins us. fed fund futures looking at 40 basis points of cuts in september. that is the betting coming

through from traders. what has changed since the middle of last week where we boxed out the idea of 50 basis points on the back of the inflation print, and now traders are positioning for a deeper cut? garfield: a lot of what happened is in the absence of actual fed speakers because they are in a blackout period, we had talked from former fed officials and they highlighted the idea that 50 basis points was possible and should be possible. the fed will discuss it which is a fair call. whatever the decision ends up being from the fed, it is clear they would be looking -- ok, we are going to start cutting. do we go 25 or 50? the reminder for markets that 50 was possible has rapidly turned

into markets going back towards their bias to bid for 50 basis points. this could be a true read. the former fed officials are taking backdoor briefings from the actual fed officials or taking the temperature of the room as it were. and realizing that 50 is quite possible. and might well be what happens. or it could simply be that by them emphasizing that, it may be 25 or 50, that the right site -- side of market pricing is for a 50-50 odds which would put you at about 37 north 38 basis points priced in. so 40 is not that much out of whack with that. a lot of times you would want to see it go beyond 40 both for

your shoulder is priced in. there is caution about what is being priced in until we see what europe and in particular the u.s. wind up doing when you have markets with more liquidity than what we have today in asia where japan and china are out. it is easier to push prices around right now in those instruments. tom: talk to us about the read across from that part of the story around central banks and the pricing around the federal reserve to what we are seeing in some of the currencies, gold and crypto. gold is still at fresh records. up .3%. talk about the read across to gold and crypto. garfield: the read across is this concern about whether or not the landing is going to be soft or hard. and that is also -- and that

also could be part of why the dollar is weaker in general. crypto is not getting much of a helping hand from that. gold usually outperforms and recessions. the worry is has the fed fallen behind the curve? there was some criticism of the fed after the july meeting that perhaps it should have cut then and gone 25 basis points rather than holding and signaling it would cut in august. because it risked not doing enough soon enough to avoid a recession. at risk has only increased in a lot of ways where people are looking at the jobs market data getting worse and worse. there is a lot of concern that when the jobs market breaks, it takes a while -- slow, slow, and then sudden. and you are at that potential

inflection point now. it teams -- it takes time for rate cuts were rate hikes to work through the economy. if the jobs data is on the verge of cracking, maybe they should have done it before. that is haunting investors and part of why bond markets are so if ulee end. they are seeing the potential -- why bond markets are so a ebullient. and for equities that concern is we want rate cuts but have -- has that been delivered too late. tom: bloomberg mliv asia team leader, garfield reynolds setting us up nicely for a big week. the debate is still as to

whether or not we get a soft or hard landing and to what extent will the labor make -- will the labor market call or crack. a lot of focus on the apparent second assassination attempt of former president donald trump and the implications for that deeply consequential u.s. election that comes in november. here is what else to think about. the fed decision will be central on wednesday. we will also get the revision to the forecast for the first time since june. the revision of where fomc officials see cuts going after the first one. and to what extent they are factoring those in for the end of the year and through to 2025. on thursday is the bank of england's rate decision.

friday, it is the boj decision as we look at the japanese yen posting the strongest danes crossing through 140 for the first time since 2023. pressure on beijing to ramp up fiscal and monetary stimulus after a flurry of more economic data misses. we talked china and the consequences. this is bloomberg. ♪

tom: welcome back. three of the bigots wall street ranks have downgraded china's growth forecast due to worse than expected data. let's bring in bloomberg's chief north asia correspondent. what does the august data tell

us about china's ability to meet the government growth target? >> we know that according to the calendar it is running out of time in order to meet the goal of about 5% growth rate by the end of the year. we have one more quarter left to do that. and by all indications, there were few pockets of strength in the latest eco-data we got on saturday. industrial production decelerating for the fourth consecutive month. the longest tree -- the longest streak since september, 2001. we are also seeing tepid, continued tepid wheat growth in retail sales. once a strong pillar of the economy. now we have had six consecutive months of low, single digits growth of retail sales. and all of the major numbers

missed analyst and economists expectations. it begs the question, what can they do and what are they willing to do going forward to meet the goal? and doesn't matter to meet the target of 5%? that question will be put to the test in the coming weeks and months. tom: this could be the second time they miss the target for the first time in a number of years. wall street banks revising their views. what is the consensus now? stephen: below five. we are seeing goldman sachs lowering its outlook for growth to four .7%. morgan stanley, 4.6%. and sadie followed suit this morning also saying 4.7%. and worse next year, anywhere from 4.5% to 4.2%. i think it was morgan stanley

that said essentially, china is getting stuck in a debt deflation loop. i think goldman cited it as well. we know what happened to japan in the so-called lost decades and the deflation trap and the issues that china is facing. i was in shanghai the week before last. the pboc governor spoke outwardly about the issues of the threat of deflation and on friday the pboc it self came out in a rear statement saying that a big priority going forward for the rest of the year is combating deflation. factory gate deflation has been deflation for 23 consecutive months. tom: 23 straight months of softer prices coming through. stephen engle, thank you for the

context around this new and grim data set coming from china and the potential policy response. shanghai has been hit by the biggest iphone -- typhoon in more than seven decades. disrupting holidaymakers at the start of what is a national festival in china. china's financial capital initiated an emergency response on sunday closing bridges, ports and highways. all flights were canceled in the evening. coming up, striking boeing factory workers are ready to hold out for a better contract. we have the details on that industrial action next. this is bloomberg. ♪

tom: welcome back "bloomberg daybreak: europe." russia reportedly sharing secret information and technology with iran that could bring it closer to being able to build nuclear weapons. western officials believe it is an exchange for tehran providing moscow with ballistic missiles for its war in ukraine. it is being described as worrying. israeli military says a missile fired by gammons ho -- by yemen's houthis on sunday. the long-range attacks have mostly been intercepted over the red sea. tomorrow on horizons at do not miss bloomberg's exclusive interview with iraq's prime minister.

the wide-ranging interview covered the nation's economy, opec and iraq's oil production and his thoughts on the geopolitics of the region. stay tuned or tune in for that interview. an exclusive tomorrow at 5:00 a.m. in london, 8:00 in dubai. the international association of machinists union says it will meet with federal mediators assigned through the federal mediation service to begin discussions with boeing on tuesday. boeing's offer of an 11% wage increase and the first year was not enough to avoid a strike. the agreement would've given workers a 25% bump over the life of the four gear agreement. the union says it is demanding a 40% raise to make up for a 10 year contract that caused years of stagnant wages and asked to pensions. in and the u.k. will of firm their pledge to support ukraine.

sources say they will discuss a proposal for kyiv to use british long-range cruise missiles on russian territory. deepening economic ties and tackling illegal migration will also be on the agenda at the meeting. asking prices for u.k. houses increased at double their long-term average pace in september. the average price of homes coming to the market rose .8% to just over 370,000 pounds. the jump comes as a sign of new optimism by home sellers in the wake of the bank of england's first interest rate cut in more than four years. and the bank of england has its next decision on thursday. markets are not expecting another cup for september. they expected to come through and november. let's check in on the markets as we build up to a key week in terms of central bank decisions.

the federal reserve front and center. wednesday. and the debate still live as to whether they go 25 or 50 basis points. taping morgan saying they should and will go 50 on wednesday. european stocks pointing to gains of .2% after the upside from european and u.s. stocks last week. the dax futures and germany up 13 points. that is what is being flagged by futures. after a second apparent assassination attempt of donald trump, we will bring you the details and discuss what it all means for the race for the white house. that is next. the moment i met him i knew he was my soulmate. "soulmates." soulmate! [giggles] why do you need me? [laughs sarcastically] but then we switched to t-mobile 5g home internet. and now his attention is spent elsewhere. but i'm thinking of her the whole time. that's so much worse. why is that thing in bed with you? this is where it gets the best signal from the cell tower! i've tried everywhere else in the house! there's always a new excuse.

well if we got xfinity you wouldn't have to mess around with the connection. therapy's tough, huh? -mmm. it's like a lot about me. [laughs] a home router should never be a home wrecker. oo this is a good book title.

tom: good morning.

this is "bloomberg daybreak: europe." former president donald trump is safe after what the fbi says was a likely second assassination attempt. goldman and morgan stanley cut china growth forecast after more weak economic data. as markets prepare for big central bank decisions with ramped up bets on a jumbo fed cup. it took bmw more than two years to discover the extent of a braking system fault expected to cost the german carmaker nearly one billion euros. let's check the markets as we built up to the central bank decisions. and betting coming across the markets. a number of markets are closed. you would be brave putting serious money to work coming

ahead of the decisions. it is really all about the federal reserve and how deeply they cut. european futures, gains of .1%. the ftse 100 looking to add 5.5 percent. s&p futures flat. nasdaq futures softer by .1%. the focus on moves around the currency space. softer dollar and stronger yen and again crossing 140 for the first time since 2023. up .5%. partly because of a softer dollar and a reaction to the news on the apparent second assassination attempt on donald trump. 7161 on brent. we watched production challenges out of the be a -- out of libya. gold at fresh record highs.

up .4%. one of the most dramatic presidential campaigns is being dealt another shocking development. members of the secret service have foiled a second assassination attempt on former president donald trump. let's bring in bloomberg's jill who has been covering the story. have the campaigns responded to what has been another remarkable weekend? jill: yes. shocking development. at this point we have heard from both donald trump who said he has survived this apparent second attempt on his life. he wants to keep going. i think he sent out a message to supporters declaring that. and vice president harris put

out a statement saying there is no place for violence in america and she was glad that he was safe. same from president biden. it doesn't seem that campaigns will suspend donation efforts. at this point it shows how dramatic and contentious rings have become. this is two months out from when donald trump was onstage at a presidential rally in pennsylvania. he was also targeted by another gunman who tried to assassinate him. the fact that you have these two events happen in quick succession spotlights how contentious and dangerous it seems like things have become as the election heats up. we have only a couple months until the vote count in november. tom: a acute reminder of the

risks around this election. how is it likely to impact the race? jill: it is difficult to say at this point. i think we will get some polls in the next few days and we will see if it has a measurable impact. a lot of recent polling shows them in a physical dead. -- in a physical dead heat. the question is how much this shifts the narrative. he had a poor debate performance against harris last week. it was reflected in some national polls that came out where she was given a slight edge. what we saw after the first attempted assassination attempt on donald trump was a bump against joe biden. as we have seen through the summer, there have been many twists and turns. after the first attempt we saw

joe biden drop out of the race. again, we will see what the polls show us. there are many moving parts. and ultimately, it is still a tight race. tom: and an hour ago we saw tweets or comments on trump's social and he was thanking the secret service and law enforcement for the job they have done. is there still pressure on the secret service given the scrutiny after the first assassination attempt? jill: the initial reaction from donald trump has been to praise the secret service. that shares county department -- the sheriff county also responded. after the first attempt in july, there was a ton of heat on the secret service. the head resigned.

a bipartisan committee is investigating the first shooting. it seems they will be involved in the second one. this case is different in that it took place at a private location where they did intercept this person about 300-500 yards away from donald trump. he was set up on the perimeter of where donald trump was golfing. just the fact that you have someone that close to donald trump in this situation impacts things. it does point to the fact that this is a really dangerous and contentious situation that has involved a lot of different security measures trying to protect the candidates as the race gets into its final stretch. tom: jl, thank you with the latest on what is another disturbing weekend in terms of the political tension on the ground in the u.s. as we build

up to november. switching focus to a major corporate story in europe. bmw taking more than two years to discover the extent of a braking system fault that may cost almost one billion euros to fix. bloomberg understands that customers and dealers began complaining about faulty brakes in june 2022. let's get the details and analysis from all over in berlin. -- from oliver crook in berlin. >> i think the main thing you could say about this is that this is a bad time to have bad news in the auto space. this is a time when investors are a little less forgiving of things.

this is a massive recall. one point 5 million cars. it has to do with the brakes. a fundamental part of the car. it will cost bmw a billion euros to fix. this hits the cars across the fleet. it hits from the suv's to the flagship seven series to the rolls-royce. if you paid $400,000 for a car you might not be thrilled to get a call to bring the car in. that is some of the reputational damage they are dealing with. no accidents or injuries have been reported. this is issues with the electronic braking within the car so this is precautionary. there are questions as to why it took so long.

the first complaints were in june 2020. this is swirling together at a time that is difficult for the auto industry. bmw was doing quite well. having great ev sales unlike mercedes and volkswagen. this is unwelcome news. tom: a couple of issues facing germany but it seems near the top of the list has to be what is happening in the auto sector but also with the focus on migration and refugees and how that ties into domestic politics in germany. we have seen changes around the support for afd. oliver: we have another state election this sunday. in the last two there was an upsurge from the far right. the afd -- they are united on

wanting immigration to stop coming to germany. as a consequence, the schulz government is instituting border checks on all of germany's land borders beginning today for six months. you already had border checks with some countries like poland and austria but this is extending to every country that borders germany. this effectively suspends schengen. the schulz government is trying to say they are cracking down on illegal immigration. germany is probably the number three recipient in terms of host countries for refugees. they have more than 2.5 million. it is not great news for some of the bordering countries. the austrians are saying that they will not take people back that they reject at the border. and some people are big fans of the move such as viktor orban

and in the netherlands they are saying it is a great idea. this is in the context of the new european commission. you are starting to see a lot of divisions among european countries coming into focus. and suspending schengen temporarily is not an encouraging sign as ursula von der leyen tries to create a new unity government. tom: it really exposes the splits in dramatic form. thank you very much for the latest on the refugee story and the migration stereo in germany and the auto sector. as traders brace for crucial central bank decisions this week , we look at the implications for emerging markets. trang nguyen from bnp paribas

joins us next. calls on how to position in em as we build up to the expected cut from the federal government. stay with us. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." the fed's first rate cut in four years is widely expected on wednesday with other key decisions around the world this week. let's ring in my next guest, trang nguyen, from bnp paribas for a few on how this likely fed cut is going to ripple across the em space. let's check with where bnp paribas stands on 25 or 50. jp morgan reiterating that the

fed will go with 50. where does bnp paribas stand with that expectation? trang: it is quite the debate. i've heard you discuss this extensively this morning. at bmp we think it will be 25. the last payroll support was strong enough. last week's inflation data was sufficiently strong enough in our view to justify a 25 basis point cut. we are looking at a soft landing. the synchronized coming cycle means central banks will added -- will adequately deliver rate cuts that are preemptive and timely enough to engineer a soft landing scenario. the risks are significant. needless to say, we have the u.s. election coming up which could deliver binary results and binary implications. it is not just about who wins

the election but also the makeup of congress. we are looking at trade policy and fiscal policy in a divided government scenario. we think the fiscal policy will remain more or less unchanged. but in sweep scenarios it could be looser fiscal and higher yields. in addition to a potential trump victory, we can also see the reposition of terrorists which would have inflationary impact as well -- the reposition of tariffs which would have inflationary impacts as well. tom: you still have the soft landing scenario as a base case. 25 basis points but caveats. we were reminded over the weekend of the dramatic volatility in the lead up to the vote. what is the positioning?

you have mapped out different scenarios. let's get the details. how do you position around that? how much cash do you want to have on the sideline and how defensive do you want to be? trang: we are looking at lower yields. that is a trait that is consensus. we think the bond curve should be steeper. and this is the beginning of a weaker dollar. we are seeing the end of a very prolonged dollar bull cycle which is -- which has lasted about 13 years. this will play out. what is a key risk? a red sweep scenario would challenge that view. the baseline scenario for us is a weaker dollar. and with weaker macro, we think that cyclical's is somewhere you want to avoid a credit markets. we have benefited from low vol

and tighter credit spreads for much of the year. near term we think it will reverse. as history has shown, it is risk off leading up to the election. and risk on later. em credit it is time to be more defensive. i've been bullish and high-yield for quite some time. i'm advocating risk reduction. tom: reducing risk on high-yield . and u.s. politics is part of the understanding around that. what would you need to see to turn more risk on in the credit space to ramp up your risk exposure and get back into high-yield? trang: i don't expect we will see the u.s. elections to drive that because it will be a close and contested race. after the fact, we will know the outcome and we can assess the fiscal and trade implications. but we also need to assess the

valuations. at the moment i would argue that we have limited premium to justify more risk addition. and also the inflow picture has not come back. we have had this debate a lot. we need to see more rate cuts for inflows to return. we are still competing with u.s. credit and money markets. tom: what level of cuts drives those inflows? is 25 enough? or do you need much more than that? trang: 25 is already priced by the markets. we need to see a more prolonged cutting cycle. we forecast a cumulative 200 basis of cuts. we would need to be deeper in the rate cut cycle for em to benefit from the -- from the inflows. tom: talk to us about china. you take a conservative view.

if you are a brave investor that wants exposure and is looking at a valuation appeal in terms of some of these assets, is there anything for the brave looking potentially attractive in china? trang: at the moment, i would say no. with the week data we have seen this last week, markets are not expecting more stimulus measures. we have maintained the view that a more aggressive response is unlikely. the authorities are reluctant to introduce imbalance to the system. we believe there policy response will be reactive and timid. it still might be enough to backstop a crisis market reaction. it is all about valuations. tom: thank you nd. important context for the em world as we lead up to the expected cut on wednesday from

the federal reserve. trang nguyen, the global head at bnp paribas. plenty more coming out. we will break down some of the data we see out of china. particularly around the housing market and how that challenges the economy. stay with us. this is bloomberg. ♪

tom: welcome back. you are watching "bloomberg daybreak: europe." happy monday. we had grim data out of china over the weekend. industrial production, fixed asset investment. all coming in weaker than expected.

one point is consequential. the house price story. new-home prices falling to the lowest level, the biggest drop we have seen since 2014. barclays has been doing some analysis and the falling house price in china till now has wiped out $18 trillion of household wealth. and that is weighing on the consumer and on demand and leading to a scenario potentially where you get a continuous cycle of deflationary prints because the consumers are so crushed because so much of their money is tied up in real estate. u.s. in a round of continuous price pressures despite policy measures from beijing whether it is cutting interest rates or encouraging local governments to buy up property or removing a lot of the restrictions on property purchases. none of that has done anything to halt the slide of prices.

until you get that fixed -- until you get that stopped, you cannot fix the chinese economy. the forecasts around of 2024 have been slashed again by the likes of goldman stanley and citigroup. the target of about 5% looks completely out of sync given the data we are getting out of china. goldman sachs revising lower to 4.7%. the lowest cut coming from morgan stanley taking 4.6%. his precious -- the consequences are there whether it is a tick up in the unemployment rate. let's talk about the u.s. when you think about china, the other headwind is additional tariffs and friction leading up

to november. the consequential moment over the weekend looks like a second assassination attempt on former president donald trump. what has this done in terms of how the markets are betting around these candidates. kamala harris still has a marginal lead. a lot of polls suggesting the race remains tight. we continued to bring you the impact of that remarkable and shocking weekend out of the u.s. . the opening trade is up next. stay with us. this is bloomberg. ♪

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anna: morning from london. i am anna edwards alongside guy johnson. former president donald trump is safe after what the fbi says was a likely se