tom: good morning, these are the

stories that set your a gender. jobs dater fuels optimism, u.s. economy soft landing is on track. bank of japan leaves interest rates unchanged, mercedes slams the brakes blaming poor sales in china in the latest sign of trouble. strikes across israel and lebanon after retaliation is valid for deadly attacks. ♪ >> happy friday. nasdaq hitting gains of more than 2%, s&p risk on and feeding

into asia. we will check in, futures down, gains came through. european stocks on track to end in positive territory. profit-taking after yesterday. lower, down 6/10 of a percent, dater suggesting the retail segment could be challenged, consumers feel weak, s&p futures down modestly and nasdaq futures off by 33 points. modest gains in terms of the two-year down to basis points, 356, interesting to hear from larry summers suggesting too many cuts.

132 on the pound. boe standing pat, we continue to monitor the currency up a 10th of 1%. $74 on brent, positive week on oil. the yellow metal gold at record highs. up 3/10 of 1% in the session. let's check in on asian markets. bank of japan standing and holding pat with the interest rate expected, collation data coming in hotter or stronger i should say. inflation challenge is still there but maybe more benign. we wait for the press conference

coming up in over one hour .5. asia-pacific and the heavy list of the nikkei, optimism in terms of the view on the boj which could adjust. hang seng index of 1.2%, benchmark rate on hold, new measures, japanese yen at 142 versus u.s. dollar. bank of japan unchanged signaling no need to hurry after the july increase led to the route in the first part of august. let's get to paul jackson in tokyo. are we on track from the boj?

paul: uh, i think we are still on track. what we had today was a widely expected decision. they want more time to assess the impact of rate hikes and we have a leadership election in japan so the central bank wanted to be on the sidelines this month as japan chooses who will become prime minister. could have an election so when you ask about timing of that next rate hike october did not look too good. general election in japan, a reason to avoid market

stability. that turns to december or january. tom: ok. really interesting that you fold in the politics. keeping the boj on the sidelines for october. talk about how dynamics have evolved for japan and how they tie into the next decision? paul: well, signs of improvement, back to growth in the statement today, the boj upgraded its view on consumer spending. not great. not gangbusters, but moderate increasing trend some with more consumer spending even the you got inflation figures well over

nominal target for inflation, consumers starting to get used to inflation trend as wages grow so the way to think -- think of it as the next hike comes at the end of the year, so how fast will the rate hikes take place? have to wait until we see wage dater next year to see if the heights continue at the pace we have seen and if this pattern continues to strengthen because if we see all that on track we will see more hikes next year. tom: paul jackson with important context. as we count down to the presser with the governor and we will dive deeper later.

a chief economist at 6:40 p.m. -- a.m. u.k. time. wall street traders are betting the fed will engineer a soft landing spurring a rally in riskier corners, an all-time high. let's get more from singapore. what do you make of the moves in the session? the upside and whether this has legs? >> equities are celebrating, record high, asia's best week in a month, japan stocks held onto gains. let's not forget boj's decision to stand back has not come in

void. you have soft landing narrative getting credits, hosts of bigger, better, bolder stimulus taking root in china, so all of these developments are shaping up nicely for global economy in most of stock markets are celebrating. you know, we did a poll recently, most expect value stocks. where is value? pockets which have not risen. tech or india, probably a lot of sectors, and a lot of names in china and if you look at say bank of america for fund

managers there is a lot of optimism for the oil markets and japan and india. the buckets which have risen, deck stocks, they remain the top bets so all in all markets are normal but the press conference is the next thing to watch out, the press conference. if he is able to manage the narrative it looks pretty positive. tom: the governor coming up at 730 across the markets in july so we will monitor it.

. now to the french politics. proposing a new government after two weeks of consultations with rival groups. i'm joined by caroline connor. are we getting closer to the french government? >> after two weeks since prime minister we should get final details of new government before sunday. two months to name a prime minister and then two weeks for the prime minister to present a government. shows you the complexity when no one has majority in parliament.

there was speculation they would quit over the past few days. a bit of a poker game to get people on board and one less decisive meeting yesterday so what we know is 38 ministers have -- half man half women, big portfolio including seven from micron, the renaissance party, and three from conservative republicans. initially they wanted more republicans. they did not agree and they asked them to start again. in terms of names, the leader of republicans should get interior

ministry and the european minister in the previous administration should get promoted to foreign minister but we don't have the name yet. crucial portfolio after seven years. tom: we need the names, the government to be confirmed and markets will watch. given the divisions within france, risk premium is therefore french assets, sovereign debt. so what are you watching for? caroline: market should be muted because they formed a government. very different if he had decided to quit, but we should have by sunday a general speech.

october 1 is when he will face his vote of no-confidence and you have the big deadline, they have asked to push the deadline to october 9 and between them whether or not to raise taxes. the budget situation is very serious. we have increase of inheritance tax. it is a way to get support from the centerleft asking for more social justice and better share

of countries revenues. tom: caroline connor on the latest developments as we look to confirmation of the new government. 7:00 a.m. u.k. time we will get the data around retail sales after consumer confidence crashed by the most in 2.5 years. the government has been criticized. if that dater dropping 7:00 u.k. time. boj governor will be scrutinizing comments and at 4:00 p.m. we will hear from christine lagarde alongside michelle, delivering a central bank lecture.

christine lagarde was formerly the head so anything from the ecb will be of interest. the leader of hezbollah foil suspected attacks. a huge humanitarian below, the details next, this is bloomberg. ♪

♪ >> welcome back to bloomberg daybreak: europe. israel has launched fresh airstrikes in southern lebanon and the sector general says the pagers and walkie-talkies were a huge humanitarian below.

>> this will be confronted with a severe reckoning. but because this new battle -- i will not talk about the time, form, place, date. news will be what you see, not what you hear. tom: because below is a designated terrorist organization. let's bring in anchored joumanna. joumanna: this was the first time the world has heard them speak, lebanese health ministry

putting death toll at 37 and they conceded it was a massive blow, blaming israel, went on to say nothing would deter them from revenge. the only way they wanted halt attacks is israel to stop aggression. linking actions, quite explicit. multiple eyewitnesses that planes were breaking the sound barrier, even more exchange of rockets from lebanon into israel, two soldiers were killed and we saw a rockets in lebanon

so if you piece together everything, the language in the speech we are moving to another phase and there are concerns that things could deteriorate. tom: we talk about this weekly. antony blinken continues but they're becoming pessimistic. where do we stand? >> what israeli officials have told bloomberg is they are

concerned the path is narrow when it comes to the northern border. if they did not believe in a diplomatic solution they would not say they were mobilizing forces in the language has been strong. even the wall street journal are reporting that lloyd austin has started to express concerns about an offensive and the u.s. are trying all angles and then trying to get the deal across the line. antony blinken is urging all parties to de-escalate, met with president macron on and left a

statement saying more is not inevitable. tom: thank you indeed. thank you. switching focus up next, the clean energy worlds taken by storm but the promise is running out of gas. see what we did there? hydrogen prospects next, this is bloomberg. ♪

tom: welcome back. hydrogen was predicted to be a major clean energy source but the industry is facing reality.

kathy has the details and analysis. hydrogen market has not lived up to expectations. what has gone wrong? kathy: let's think about hydrogen in first place. it can the carbonized sectors like heavy industry and people can get subsidies by building this projects. while there is a lot of people who want to sell hydrogen very few company have commit because it is expensive and that is why only 5% of capacity plan has actually been financed. one reason why it is still expensive is electrolyzer is quite expensive and according to latest report it will remain

expensive for much longer, clean hydrogen will become less competitive than thought. tom: i know china has a significant buildout in terms of energy capacity, where does china stand, are we set up for tensions between china and the rest of the world? guest: 75% cheaper in china than europe or the u.s., that is why chinese company want to export product abroad to get a good margin and this has become problem for western manufacturers. they have been lobbying against import and have been partly successful so this is a real question for european politicians. do we want cheaper hydrogen or

do we want to protect local manufacturers with higher costs for longer? the difference between the two option is huge. electrolyzer cost could remain 50% more expensive. tom: that is a live debate right now and the role china could play. kathy with some deep dive takes and context around hydrogen. if you want more analysis download the switched on podcast. on apple or spotify. ♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want,

all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

>> good morning, happy friday. these are the stories that set your agenda. stocks rally as data fuels optimism in the soft landing is on track. bank of japan leaves interest rates unchanged, receives blames sales in china and the latest sign of trouble for automakers and consumer confidence tanks, keir starmer at the labour party conference. a breather with futures pointing lower, gains across european

stocks, nasdaq higher, s&p up, but profit taking or a breather. ftse 100 futures are lower. retail sales drop at 7 a.m.. markets are pricing in many cuts. let's flip the board and look at triple witching day. on average you see 245% jump in volumes four times a year.

you could see a big jump in volumes today. there that in mind on triple witching day. you've seen moves on the japanese yen giving relief in japan. the u.s. two-year is that 356, pound in focus. $74 a barrel on brent, told up 3/10 of 1%. mercedes has slashed its outlook in china. german carmaker expects adjusted

return along with 11% forecast. i'm joined by danny lee. danny it seems china is at the center of challenges. surprise downgrade. talk about challenges and issues. >> you mentioned, not the same issues but supply chain sales pivoted, and china there has been a slowdown, a challenge for luxury carmakers to navigate and

compete against active competitions. automakers have more challenges to pivoted to ev's and navigate, we may see a more for example. tom: we see more across europe? that is a threat for both sides but european carmakers, what do we know about negotiations and whether those are moving in a positive direction?

danny: implications for german automakers. in this point of no return. chinese cds in imports. there seems to be a stepping up of talks in a meeting of the mind. controlling the pricing of electric vehicles given how low they can cost and volumes. not something they have been in favor of but we seem to be having some consensus and we will see this delayed from

brussels but this will be a big sticking point on how to resolve this. tom: indeed. danny lee, always fantastic when it comes to the china challenge. a reminder from mercedes. to the u.k. where consumer confidence nosedived, dropping the most in 2.5 years to russia's invasion of ukraine amid mornings about tough decisions from the chancellor, warning of pain in the budget. joining me is lizzy burden. let's start with consumer confidence, it is a bleak picture. some is tied to the rhetoric. >> the price of doom and gloom,

many asking why they did not enjoy the honeymoon when you have not had a labor government for so long. numbers are following in september wiping out progress. this is bracing for a painful budget and we will be heading up to liverpool. will we get more detail? the wound good mood fall was the biggest we've had, this spells trouble ahead in the dater ahead but we will get backward looking data. tom: fluffy exaggerated optimism to dower negativity as you say,

doom mongering. talk to us about the data. we get retail sales, what is the expectation? >> you have to ask if labor can get away with this and roll the pitchfork what they are going to do in the budget. this number, the expectation is it will have picked up and we had the first rate coat in august and we reckon that will boost spending power in households and people with more money because of the cut in the rise in the living wage so people who prop up high street in the boost expected in august. tom: slightly better.

given the consumer survey some boe members will be thinking swat a dingo how to point. post the decision the fed is going twice, boe stubborn. lizzie: the boe would not have known but the market suggested a half-point cook was coming and they did not cut rates yesterday. swati dingo voting to cut. interesting if you look at the majority view, more cuts are needed so it does not raise red flags. caution is the vibe. andrew bailey saying we need to be careful not to cook too fast. they gradual approach is needed

ahead. interesting deciding to keep the runoff feeding into the budget. they reckon this will give rachel reeves 4 billion pounds lifeline when it comes to the budget and she needs every penny. tom: indeed. our u.k. correspondent indeed looking ahead to the data print in 20 minutes with other stories making news. nike ousts john, it ceo and is bringing elliott hill out of retirement as it tires or tries to return the struggling brand to its glory days joining nike. he retired in 2020 and nike lost ground in december of two

upstart competitors. the german government has started a probe into the commerce bancshares sale after the transaction allowed unicredit to take a stake in the lender. the chancellor is not happy. the placement was overseen by germany's finance agency and openai's latest fundraising is nearing completion with investors finding out today whether they will be part of the deal. this funding round for the ai startup is oversubscribed. excess demand was in the billions of dollars. coming up, no need to hurry you with hikes. our interview with chief economist martin schulz next as

we look ahead to the central bank press conference. stay with us, this is bloomberg. ♪

♪ tom: welcome back. bank of japan has kept rates

steady awaiting a press conference for hints of policy. let's bring in martin schulz. always fantastic to get your analysis. is this a boj that is scarred by the decision toward the end of july? martin: that was a test about getting the yen stronger, it needed to be run and now it can focus on the economy in terms of normalizing policy. quite quiet. tom: a victory shoring up the yen so what is your expectation

into next year? the space to raise, when does the next hike come? martin: normalization is going away from 0% toward 0.5. this would be something where the bank of japan would like to be to have a kind of rate where you can work with. it is cooling, inflation is still high. except energy, it is just about 2% so no reason to act. it is the economy behaving well, improving well. the question is how much.

tom: and -- and -- and to the press conference now, the countdown, what will you be scrutinizing, what language, what signals are you on guard for? martin: not too much hawkishness. when the bank of japan wants to go further, expectations part of the end of the year or next year because we have mr. ueda's comments about the economy and how strong it will continue to be, going down around 1% next year, very little debate. colwell consumption is doing, higher wages are priced in and how much investment is

happening, quite optimistic so there will be room to move if there is time. tom: you touched on the -- you touched on the politics. is the bank of japan boxed in or can they look through the elections? martin: almost as hard if not harder in the u.s.. president election on september 27. the next president will be the prime minister. they will call on election to shift this move for the party, reforms for the economy. bank of japan will probably say cooldown. we are hiking interest rates a bit. tom: you touched on the 1%

level. what is -- what is your timeframe and your genuine conviction that they can get to that point given the challenges? martin: economy is cooling. inflation is coming down, very little reason to move. as long as the yen is not weakening. moving on means going on next year and seeing how optimistic people are if companies keep in westing. bank of japan can start hiking interest rates early next year.

tom: really fantastic context around the overlay as a lead up to the press conference. thank you for the analysis. plenty more coming up, fresh records coming through. it is the broadening continuing? we will break that down. stay with us, this is bloomberg. ♪

>> the risks of going as far as the fed thinks are significant in terms of inflation. tom: larry summers speaking to david on wall street week, maybe the markets are pricing in too many cuts. cuts have come. the bait is do they go 50 in the bank is divided. rates are lower. broadening out of the rally, stocks hitting a fresh record.

will they broaden out? in terms of s&p that is its lowest in 15 years relative to the benchmark. christ earlier -- priced in line with its average. let's have a look at the russell 2000. money has flown in but they could benefit from lower rates. and the long-term view, this shows that all the way back to 2000, valuations are at depressed levels. then you have value stocks.

we are looking back to the 1990's. if we get a soft landing here is what we have seen, health care, staples and financials outperforming technology. so a suggestion this could be a place where you want to be exposed. jobless claims came in better and market is holding a better than expected. cap yacht is soft landing scenario, not guaranteed. nonetheless a breakdown in terms of the broadening out, small-cap value and an opportunity to get exposure. coming up, benjamin melvin,

global cio at rothschild asset management about markets. that is coming up and we will check in on futures. a bit of a breather for european stocks and the nasdaq rallied, s&p added 1.7%. ftse 100 is down, retail sales dropping, dax futures pointing lower, malaise in the auto market and mercedes. the opening trade is next, this is bloomberg. ♪ i need indeed. indeed you do. sponsored jobs on indeed are two and a half times faster to first hire.

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>> good morning from london. i'm anna