tom: good morning, this is "bloomberg daybreak: europe." these are the stories that that set your agenda. chinese stocks set for the best week since 2008 fueled by beijing's raft of stimulus measures. the s&p 500 hits its 42nd record because of the year. the fed preferred inflation gauge comes out later today. the latest bloomberg poll shows kamala harris holding a razor thin lead over donald trump in this one stinks -- in the swing states and eroding former president donald trump's lead on economic issues. i german lender promising higher profits as the new ceo meets a rival to fend off a takeover bid.

once again it is at two key catalyst powering the markets today, the stimulus from china with actions in terms of rate cuts following the rhetoric of the pboc earlier this week. they are implementing these measures at pace, and then you have the data out of the u.s. on jobless claims. we lead up to an inflation point pointing to a benign picture. european markets hit a record yesterday. the s&p notching a 42nd record high. futures up .4 of 1%. we look at the luxury sector after the double digit gains of yesterday for some stocks in europe. ftse 100 futures up by .2 of 1%. iron ore is rallying again, and tied that to china.

s&p futures currently flat after the record high of yesterday. nasdaq futures currently flat at 20,347. let's look cross asset with the focus on the u.s. 10 year ahead of data. it is the key data point in terms of how the federal reserve thinks about evolution. bloomberg economics suggesting you will get a benign print on the headline level and court level. the track toward 2% is still there for the fed. euro-dollar at 1.11. softness for the dollar on strength for the bloomberg index. there is the price jump once again for oil, of 4%. there is pressure coming through on the japanese yen right now on political uncertainty, and we may get clarity and terms of who could be the next prime minister

of japan. a story we will keep across for you. the csi 300 stock index set for the best week since 2008. it comes as the pboc pulls the trigger on easing measures announced via governor earlier this week. the central bank lower, the reverse repo rate and cut the reserve requirement rate, the rrr for banks pushes more liquidity into the system. one year rate came through on wednesday. let's bring in minmin low tracking all of this for us and the market reaction has been pronounced. >> yes, what a week for china. there is a saying on chinese social media, buy anything but china, but now it is all in, buy china, and that is the market sentiment coming through today. it is one of the most read

stories on the terminal today. buying everything related to china, and csi 300 said for the biggest weekly gain in 16 years. we just spoke to someone, and she was saying based on valuation some of these stocks still of an upside of 20% to go in the near intimate term, but if you look at the earnings story, the earnings downgrade may take a few quarters to really bottom out, because you have to separate what is going on in the financial markets and the economy. the fundamental shift in the economy will take months if not years to play out, and we have seen this three times this year. a big rally in a lead up to a national holiday on the back of expectations of more stimulus to come. the momentum has petered out after we come back from the holiday because of lack of follow-through in terms of the policy impact, so what will

happen after the golden week? that will be the first test in terms of how consumers are feeling in terms of how spontaneous, how willing they are to spend on the economy right now. tom: so far they are following through on the rhetoric, these policymakers with the action today following announcements earlier this week on the pboc. the buying frenzy around chinese equities is pronounced, and you are seeing these glitches in the shanghai composite, the chinext index has risen 11%. csi 300 come at the benchmark in china of 4.4%. hstech up 7%. what are you in the team looking for next as the pboc and ministry of finance looks to implement these measures? >> certainly there was a very swift follow-through especially with the announcement today that came bright and early the rrr cut came in at 1.5 hours before

markets opened in china. it very swift follow-through on the pboc side, but it is the fiscal stimulus where we are waiting for more details especially after the forceful language from the politburo meeting after stopping the decline in the property sector, but what they do that? some of the existing measures in terms of cutting mortgage rates, buying cuts is not moved the needle, so is the government to going to widen the usage of the local government bond firms to buy up unsold homes? when it comes to fiscal spending , the politburo meeting saying they will step up spending is needed, but what does that mean? they could issue another 2 trillion yuan in special sovereign bond to booze consumption and tackle local government debt. is it going to lead to the structural shift in terms of consumer confidence, longer-term

income distribution and confidence returning to the private sector as well? the jury is out. it depends upon the implementation of these policies , some of which are still sketchy in terms of details right now, and that is something we want to look out for in the next weeks and months to come. tom: it comes down to implementation as is often the case. fantastic breakdown of market moves and their read across given the measures that continue to come through from the pboc in the last 24 hours. let's get more analysis and bring in mark cudmore in singapore. we spoke to you briefly after the pboc press conference. is this a pivotal change? you were clear in your answer, yes, this is consequential and changes the story for chinese stocks. what is more important now, is it china or the fed? mark: right now it is china,

because the fed pricing will have to change. yields have to rise in the u.s. what china is doing is monumental. for me to jury is not out. we had the decision on tuesday. the coordinated message from every branch of a state directed economy to the highest level is extremely important. who cares if there is a pullback when they come back from the holidays. they are going to win. the stock market has bottomed out. it is under owned around the world and many of these stocks are so cheap. not all chinese indexes are cheap, but many sectors are still cheap. hong kong stocks are still cheap. many of these things are still cheap, and the world will continue to change this trade because the marker that china is put down. absolutely a pivotal moment this week, and i am not too worried about short-term follow-through. we joke about this, but it is a

bull market in china now, so do not get lost in the short term moves. i short-term move can be 4%. they will be a lot higher over the coming months. tom: there is the determination to win this battle from policymakers in beijing. they have a piece of the bit between their teeth. it comes to data out of the u.s. , we are building up to pce, personal consumption expenditures data, a jobless picture yesterday, the date at that suggest a slightly more benign picture in the labor market in the u.s. what are you and the team looking for in terms of how we think about the pricing of future cuts toward the end of the year? mark: i htink -- think many of those pricing cuts will get priced out. two year yields collapsed between late may and this week, and that was because the

narrative out there that inflation was conquered and the labor market was correcting. initial claims in the u.s. are at the lowest level since may, and they are one of the best triggers for cracks in the labor market or whether the labor market is turning. there is not a sign of significant stress in the labor market. on top of that we got massive revisions to gdp for the extended period showing growth has been strong, and therefore fed all as he was not as restrictive as some people thought, so ultimately we need to seriously reprice two year yields. people are being slowed to concede on that trade having successfully bullied the fed into cutting rates. the complacency on inflation it be challenged. we get the data today we will see personal income is growing healthily. pce court that it is lower than it was over the mass -- last couple of years but is way above

target. the narrative around we have to watch out about the labor market and we have won the inflation were is wait a minute, the labor market has just normalized and maybe we should not be so complacent on inflation if we are going to be providing more easing into an economy that is going absolutely fine. tom: ok, mark cudmore with a fantastic context on the bull market in chinese stocks and potential inflation complacency stateside. let's bring you a breaking headline. this is around the leadership race for the ldp, the dominant medical party in japan. the current prime minister will be stepping down. you have now the line crossing that someone who is an advocate for bank of japan easing takaichi will be facing his opponent ishiba in the run-up

when it comes to the ldp in japan. the japanese yen weakening to 145 down .8 of 1% versus the u.s. dollar leading up to the exit of prime minister fumio kishida and the race within the governing party, the ldp for the leadership of that party. it has gone to a runoff, and we expect details in the next hour or so. the japanese yen under pressure. it now to the u.s. election where the latest bloomberg news and morning console polls suggest democratic nominee, viruses widening her gap over donald trump in seven key swing states. bill faries has been tracking the numbers. what does it tell us about the fortunes of these two candidates and these crucial swing states?

bill: across the seven key swing states our latest survey shows that kamala harris has a three-point overall lead over donald trump. that is still within the margin of error, but it is up from a at one point lead in the previous survey. it is a good news if you are in the harris campaign. when you break it down by some of those key states, we are talking a seven point lead in nevada, a five point lead in the must win state of pennsylvania and three point lead in places like arizona. all in the margin of error, but the trend favoring harris at this point. at we are 39 days from the election. a lot can happen, but harris seems to be building momentum since she entered the race in late july. tom: give us an update in terms of the fundraising story. we have had headline after headline of the gains for kamala harris as the buildout of the warchest continues.

does the democratic nominee have an advantage when it comes to the funds at her disposal? bill: she has an advantage in terms of the funds at her disposal, and she is putting it all to work with the big advantage over donald trump. in august alone harris's campaign spending $5 million more per day than trump. a big gap. harris's campaign saying they plan to bump that up another 21% in september, so she is getting the money but continuing to build her warchest, and she will be deploying it faster. donald trump's $2.5 million per day was more than he was taking it at that point, so they will be looking for ways to ramp up their fundraising. trump's campaign advantages is that they have more outside political action committees

including one back to bite elon musk taking care of a lot of things like knocking on doors the presidential campaigns historically take on. he is getting some help on the outside, but harris so far winning the money game, basically just over five weeks to go. a lot can happen in october. tom: thank you very much breaking down the polls for us. coming up, a first encounter for the new commerzbank ceo enter unicredit rival. we look at what is at stake next. this is bloomberg. ♪

tom: welcome back, happy friday. commerzbank's management said to

meet with unicredit today, the first encounter since the italian bank started building a major stake in the german lender earlier this month. let's get more from oliver crook who has been following this at a granular level. a roller coaster week you would been charting with that insight. where do things start right now as we lead up to what could be a colorful meeting? >> definitely a momentous meeting capping off what has been a spectacular week or european banking. let's bring everybody back up to speed. orlopp made her case to investors and shareholders saying what we are planning to do in contrast is increase profitability, boosting investor payout to 90% of profits, and the board after meeting with management unanimously back this proposal as a standalone entity.

now commerzbank and unicredit have their first meeting today. this may be an early touch point. this could be the first of many meetings going forward. italian officials, we have heard more from them. the industry minister sankey is in support of this deal. germany still opposes this deal and holds 12% of it, and that is the set up going into this meeting. i should say as an anecdote outside the brandenburg gate there are two flags flying. the german flag in the italian flag because the italian president is here on a state visit. you have to imagine this might come up. tom: what are the odds of a deal at this stage? >> the german government has their position, but there are also shareholders. look at the premium you have if you were a shareholder and you

have done 30% in a short space of time. this is a stop that is not seen this level since 2011. if you look at how much money these banks are paying back to shareholders and look at the sort of return on common equity and drill down into that, this is commerzbank versus unicredit. 6.1% commerzbank is what you're getting, and for unicredit it is 21 percent. from a shareholder perspective it is difficult to do service -- to dsimiss -- dismiss this at a fan. economists he has 70% chance of this deal going through the 10% premium. in the long run they believe that tie up between these two is the most likely outcome, but that will be in part determined from the conversations we have today. tom: a 70% chance of the deal happening according to citi. oliver crook on the ground

charting the fortunes. a redhead crossing the terminal, the yen plummeting around 1% versus the u.s. dollar on the news japan could be heading toward its first female prime minister and arguably more important for the markets his or her views on the boj needing to continue the easing policy. we are talking about takaichi. we are talking about the leadership race at end within the ldp, the governing party's leadership race in the news that has come down to two candidates, amongst them is takaichi: i for continuing monetary easing. nikkei and japanese stocks rallying. coming up, climate week in new york wreps up. we take a look at the energy transition and ask if it is

still on track for the next decade? stay with us. this is bloomberg. ♪

tom: welcome back. this week new york has been playing host to what could beat the biggest climate gathering up the ghost of our -- of the year so far. we get the details and analysis on how this next decade could play out with an associate in bloomberg's brilliant energy economics team. we have a global target of net zero emissions by 2050, but before we get there emissions have to be. what is the best estimate right now? >> nice that you mention climate

week, because we are following closely. co2 emissions did during the pandemic, and we have seen them increase in the last few years. in our scenario we see the turning point is right now, and when we look at other major institutions that model how this decision unfolds like the iea, they see that emissions growth is slowing down in the p could happen this ticket -- the peak could happen this decade. the major contributors are solar and wind. tom: it could happen at this decade and a big role, and there was the cost efficiency that has come through for solar and wind. across the globe who were at the laggards in the leaders in the moves toward net zero and emissions seeking? >> the u.s. and europe are

already reducing their emissions, and this is a successful story demonstrated by implementation of renewables and large sustainable demand, but on the other side of the world china's economic boom has been the driver of emissions growth and with other increases being contributed by places like india, but in places like china, in the specific case of china we think that in the short term they are going to follow the path of developed economies, so emissions speak immediately -- peak immediately. bending the curve sooner than previously thought.

while china drove emissions to the peak it is essential to bringing them down. tom: the focus on china and the ability to shift from cold renewable energies. with the analysis in terms of how things stand on that zero, roderigo. thank you. if you would like to hear more from analysts, download the switched on podcast on apple, spotify or wherever you get your podcast. the gulf coalition is calling on israel and hezbollah to de-escalate. a senior uae presidential advisor tells us why the push for a cease-fire is so critical. stay with us. this is bloomberg. ♪

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tom: good morning, this is "bloomberg daybreak: europe." these are the stories that set agenda. chinese stocks set for the best weeks in 2008 killed by beijing's raft of stimulus measures. the s&p 500 hits its 42nd record a close of the year. the fed preferred inflation gauge comes out later today. the latest bloomberg poll shows kamala harris holding a razor thin lead over donald trump in the swing states and eroding the former president's advantage on economic issues. israel's prime minister vows to continue its bump argument of hezbollah targets in lebanon

indefinite the as calls grow for a cease-fire. let's check in on these markets. that geopolitics in the middle east continues to be in focus, but when it comes to equity markets it is all about asia right now. it is about china, policy action being implemented by the pboc following pledges and promises of this week and the politics of japan. the nikkei soaring 1.6%. we get down to the final runoff in the race for the leadership of the dominant governing party, the ldp, and amongst the two candidates takaichi, who if elected would become the first female prime minister of japan. hence the moves over in japan and moves higher in japanese stocks. the pronounced run-up we see,

hstech soaring more than 4%. csi 300, the benchmark in china on the mainland of the 4%. the bond bulls are back. the equity bulls are back when it comes to chinese stocks, and you were seeing that money and inflows coming through. will it be sustained as a question as we look for granularity on how these policies are implemented. let's check in on the futures after a 42nd record again for u.s. stocks send another record for european stocks yesterday, set for further gains. with looking to add nine points. s&p futures flat, nasdaq futures holding down .1 of 1%. israel's prime minister has about his military will continue its indefinite bombardment of hezbollah targets in lebanon. benjamin netanyahu was said to address the human assembly later today where she is expected to

defend his military campaign in lebanon and gaza. let's bring in paul wallace. where do we stand on the push for a diplomatic solution to the crisis in the conflict in lebanon? >> those efforts are going on full throttle from saudi arabia, qatar, and others. they are desperate to avoid for long conflict between hezbollah and israel and israel sending ground troops into southern lebanon. to be honest in the last 24 hours there has not been much in the way of optimism. when france and the u.s. and outs of this proposal for a three-week cease-fire at signals

from israeli officials where they were happy these talks were going ahead and they would get involved and see what would happen, but within a short period israeli officials particularly on the far right coming out saying there is no way the country can afford to give hezbollah a three-week truce. that would allow it to regroup, and they wanted this military campaign to continue. they believe that it is very much degrading hezbollah's military capabilities, and to be fair to them the signals are right that hezbollah has been hit hard in a military sense in the last week. so the u.s. and others are pushing for de-escalation intentions. prime minister netanyahu is speaking at the u.n. today, so we may get more information or a

better sense of what he is thinking today, but for now the attacks continue, and we do not seem to be -- a cease-fire does not seem imminent. tom: on that visit and expected speech by netanyahu to the united nations in new york, what are we expecting to hear from the prime minister who support even amongst his allies has started to fray? how much pressure is netanyahu under externally and domestically? >> he is under a lot of pressure internally and externally, but in some ways for opposite reasons. externally he is under pressure to ease tensions, to ease the bombardment of lebanon. internally there is actually quite a lot of pressure for him to continue and come as close as

possible to destroying hezbollah as a military force. today we will see another fiery speech from him may be similar to what he made in july equity interest u.s. congress. he said iran was an evil force that was trying to surround israel with proxies to destroy it and said israel was fighting not just its own war, but a war on behalf of the democratic free world. that is how he is presenting it, so i think there will be more of that and he will defend israel's stance against hezbollah and said the country had no choice, because hezbollah was not backing down on its aerial strikes on israel. tom: paul wallace, thank you for the latest out of that region as we look ahead to the speech by the israeli prime minister. continuing on to geopolitical

theme, u.s. vice president kamala harris has it back on former president donald trump after he said he would force ukraine to negotiate with vladimir putin if he returns to the white house. vp harris: there are some in my country who would instead force ukraine to give up large parts of its sovereign territory, who would demand that ukraine except neutrality and would require ukraine to forgo security relationships with other nations. let us be clear, they are not proposals for peace. instead, they are proposals for surrender. tom: let's bring in rosalind matheson for context. to what extent is ukraine threading its way into the u.s. election as we head down to the vote in november, and to what

extent is it dividing people or in fact uniting the electorate in the u.s.? >> it is a bit of a foreign policy topic into the u.s. election. you can see from the comments from kamala harris about that. people want to understand what kamala harris's policy would be when it comes to ukraine. is it the same as joe biden? donald trump promised to end the wars in ukraine and the middle east immediately, into gives no fan of continued military aid for ukraine, so there are those questions coming into the u.s. election which could have significant impact for ukraine if the war with russia is to going next year, and all signs are that it will. how much does this metaphor voters? there is a conversation around ukraine, the war in gaza because

there are strong voting bases in the u.s. from the jewish and arab community. voters tend to vote on domestic issues like the jobs, and economy, health care, and so on, so while it might play into some small pockets of voters in the u.s., it is unlikely to be the key issue in the election campaign. tom: we talked yesterday about how the zelenskyy visit to the u.s. has irked some within republican ranks, it also donald trump himself who came up with the verbal critique of zelenskyy . he said he was not going to meet him, and now he says he will meet him. >> it is interesting to see the change of heart now saying he will meet zelenskyy today. they were very annoyed about zelenskyy's visit to pennsylvania in an ammunition factory work he was posing in pictures with democrats.

zelenskyy said any of that was inadvertent, but that comes against the backdrop of a long-running, antagonistic relationship between zelenskyy and donald trump. none of their history is particularly good, so is interesting to see donald trump as change his mind. it might be he thinks he has the chance to get his talking points directly to zelenskyy, which is that the u.s. should not be continuing to pay until for the fight against russia. they should not be sending military aid. europe should be doing more to support ukraine and the u.s. and that zelenskyy needs to find a way to negotiate an end to the war, so we will be quite a diplomatic test for zelenskyy because he wants a reset. if donald trump becomes president again zelenskyy will have to find a way to deal with him. tom: rosalind on how ukraine is

weaving its way partly into the politics of the u.s. election. not to other stories making news come at the top federal prosecutor in manhattan says new york city mayor eric adams engaged in years of corruption. adams has been charged with bribery, conspiracy, and breaking campaign finance laws including accepting more than $100,000 in lavish bribes from foreign nationals. adam says he will continue to serve as mayor and will fight against the charges, which he denies. >> from here my attorneys will take care of the case so i can take care of the city. my day to day will not change. i will continue to do the job for 8.3 million new yorkers i was elected to do. tom: hurricane helene has

barreled into the western coast of florida packing dangerous winds and threatening to unleash flooding across several states. the national hurricane center says helene made landfall with top sustained winds of 140 miles per hour. you can see dramatic footage on the screen. bloomberg is learned chip designer arm holdings approached intel about potentially buying its product division only to be told the business is not for sale. arm did not express interest in manufacturing operations. intel has become a target of takeover speculation since a rapid deterioration of his business this year. two friends with the new foreign minister says his country supports an eu plan to impose tariffs on electric vehicles produced in china. she spoke with annmarie hordern in new york.

>> intention of the eu by raising the services not to engage in protectionist policy with respect to china. it is basically to create a level playing field against those industries in china and industries here back in the eu. francis supports the implementation of this new tool that is basically a response to excessive subsidy regimes china has used in order to establish dominance in the field of electronic -- electric vehicles that might threaten our own ev industries. >> is there a concern that there will be a tit-for-tat from the chinese? >> i think it is also in the interest of the chinese to understand that if europe is going to remain a continent that

is open, that looks favorably to international trade that the playing field needs to be leveled, and when it is not the eu uses their instruments. china should understand that this approach the eu has adopted in recent years is in its own interest. >> when you think of the changing landscape in the united states and what is going on with china, do you see europe going about their concerns with china, just europeans vis-a-vis beijing or a multilateral approach alongside washington d.c.? >> for us, as far as international trade is concerned, again, this idea to impose reciprocity to make sure that we have a level playing

field is a french idea at the top of the agenda for the european commission. this is art of a broader agenda to make the european union and europe more independent, stronger economically and strategically more enormous. tom: coming up we will be joined by the founder and ceo of a climate project financing platform. that is next. this is bloomberg. ♪

tom: the climate week new york in progress let's turn our attention to corporate investment in carbon projects. with me now is shilpika gautam.

this is a business where you find projects and you connect corporates and help when the -- with the financing to ensure they are getting closer to targets. where do things stand? what are the financing levels looking like? what is the pulse looking like across the sector? >> i just came back from new york climate week and what was exciting is how carbon renewal -- removal is critical to staying within the paris agreement. the companies taking the lead in our space are the tech companies, microsoft and salesforce and google, and they are leading the way and saying we need to go beyond the minimal and find innovation around the world, so there is immense appetite. what is hard to accept is some of the biggest polluters. it is less thinking about carbon

and more how do we go beyond carbon and fund impact on the ground. how do we support communities, inc. about social impact of these projects, climate resilience of these projects? those are some of the big themes that emerge. tom: microsoft, qualcomm, and to those others are your clients? >> we did not work with those companies directly, but those of the companies taking the lead. tom: yesterday was all the rage, and then there was the political element that chipped away. you have money managers like black rock walking away or becoming cautious leading into the esg label, the politics of the u.s., all of the money flowing into ai. how damaging has that been? >> the questionnaire here is --

let's put it this way. what is the incentive for companies to take climate action? there is the carrot and the state, so policy. what is the risk, the reputational risk, and what is the story think until around real, tangible, sustainable impact, and that is starting to come together. we have cop this year which will talk about how private sector and countries can work together to employee on the ground. in the face of rising emissions linked to a i use what actions companies can take. we have seen such a surge of activity, because they know ai will be a big part of their business going forward. there is more momentum than ever, but i think with the missing piece really is, policy and agreement within governments of this action and especially

carbon markets will be. tom: are we underestimating to give missions impact of the generative ai revolution? >> i think we are learning how big it will be and how central it will be and how companies work. every company needs to be a climate company, the same way every company will have a component of ai. we are seeing some companies take action now. one of the interesting things about carbon removal is if you do not act today you will not get access to the highest quality projects in the future. the companies taking action today are companies that will be most exposed to the energy intensity of ai. tom: have you seen any pullback in terms of concerns around financing. it is a slower growth environment and rates are higher. has that impacted the desire to commit to financing some of these projects? >> the last 18 months the

markets have been hard not just because of the macro environment, but because we are in a market that is going toward equality but not always there. what we have seen this year is a huge amount of interest in conservation, restoration. projects not just talking about carbon emissions, but have tangible community and social impact. that is happening. what we are seeing less interest in our projects where it is hard to prove the real impact on the ground. there is activity. is it what we need? absolutely not. a small number into what we need to do. tom: and you want to move from voluntary to compliance. this is a fascinating conversation, and we wish you all the best. thank you for coming into the studio and give us an update around how some of this financing to the shift to

noncarbon projects and stability pieces playing out with particular focus around the corporates and the tech space as well. plenty more coming up. stay with us. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." let's recap what is happening in terms of pricing around the yen, a softer japanese currency and japanese stocks are rallying on the news that you have a contender narrowed down to in the race for the leadership of governing ldp party, who is it up when it comes to monetary policy. wait for the results of the run-up election. japanese living on the back of that, dollar up, the end down. down to inflation prints out of

the u.s.. it is that core pce number, and interestingly on an annualized rate over three months you are under the 2% level. bloomberg economics sees the pc inflation number coming in year on year for the month of august at 2.3%, but you have seen the move lower and the work done by the fed, and if you continue on the trajectory it keeps the door open for additional cuts are being priced in by markets. let's talk about another aspect of inflation. coffee and orange prices are soaring near decade highs. part of this is down to a severe drought in brazil, and the price of a replica coffee -- arabica coffee is up. the rays are coming to brazil, so maybe the price inflation around your breakfast may start to resolve. stay with us.

the opening trade is next. this is bloomberg. ♪