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israel vows to retaliate after iran launches 200 ballistic missiles. we will bring you the latest from the region. traders with gold holding near a record. chinese shares listed in hong kong extend their blistering rally to a 13th consecutive day. we'll discuss middle east and the wider global outlook with or exclusive guests from the berlin global dialogue including le, handric rodder and oliver better. ♪ >> the risk factors in focus for these markets. european future points to gains.

8:00 p.m. uk time. losses yesterday after european stocks of around .4%. you're looking to make up for that as futures points higher .4%. they're looking to add 28 points. s & p futures pointed to loss of .1%. the s & p fell 1%. and 1.4% by ten of the close. nasdaq looking to build pointing lower by 38 points. the u.s. bench mark 10-year continues to be in focus. those safe haven plays and the future of gold. the u.s. 10-year at 3.73. your row dollar at 1 minnesota 1 and the brent currently at 74.68 on the middle east tension. gold holding about 2,600. let isocheim check in on sha.

mainland markets are closed in china. but the gains coming through. once again pronounced the priority. the asia pacific up 6.0%. the hongsang soaring more than 9%. the nikkei dropping close to 2% in the session. let's get to the middle east right now. israel's prime minister benjamin netanyahu has vowed to retaliate after iran fired 200 ballistic missiles at the country it started after the u.s. warned an attack was eminent. the israeli army aid in missiles have been intercepted with reports one person was middle the west bank. >> iran made a big mistake tonight and it will pay for it.

the regime and iran does not understand the determination to defend ourselves and our determination to retaliate against our enemies. >> let's get more from bloomberg horizons middle east. what do we know about this salvo of missiles, ballistic missiles fired by iron -- iran. >> around 7:00 p.m. local time, iran had sent over 200 ballistic missiles into israel. the i.d.f. said that most of the missiles were intercepted causing limited damage but there are reports that one person may have been killed in the west bank and potentially on back of shrapnel as opposed to being directly hit. but some of the missiles per iranian state tv did appear to it their targets. iran has said they hit important security and military sights.

and this is the response from iran in retaliation to the killing of some of their senior allies of the last couple of weeks notably hassan nazrallah and another who was killed about a month ago and one to their senior commanders who were killed in the same air strike that took out hassan nazrallah. they said another wave of strikes could come to but that depend on how israel themselves retaliates. a couple of things to note here, tom, the first is that this is the second episode of direct attack from iran to israel. the first if you remember happened back in april. but a few distinctions that people are drawing on. the first distinction is that the type of missiles used in yesterday's attack were ballistic missiles. they're first moving and more potent. they used slower moving missiles more easy to intercept. the second point to note that this time around they

choreographed it less. the u.s. and israel had less time to put up their defense system. but of course, by the time it did actually take place, they were able and israel with the aid of the u.s. to take down most of the ballistic missiles that were sent towards the country and so at this point, israel is on a state of high alert. we have heard comments from the israeli prime minister saying that iran has made a big mistake tonight and the regime will pay for it. so the world is on high alert to see how israel will likely respond to these barrage of missiles. >> well, indeed. that remains a dequestion as you suggest. how close are we joumanna? what is the assessment of how we are to and all-out regional conflict? >> that's the major conflict for the region and certainly we're a lot closer because there are wars or conflicts, escalations being waged on several fronts here. it's notable that the same day

that iran launched these missiles that israel was the same day that israel started what they call a targeted ground incursion into lebanon. air strikes have continued over the last 24 hours in southern parts of beirut. also notably air strikes were targeted against some of these key spots in yemen too. and so there are attacks taking place on all fronts here. i think it is important also to know that just the last 15 minutes or so, actionist has reported that israel will be likely to respond in coming days and that they plan a significant retaliation to the iran attack. some israeli officials think they could target iran's oil facilities and the big question, of course, is not whether they only targeted the oil facilities because that will be key for global markets but also potentially nuclear sights as well which would take it to ooh

whole other level. >> ok. bloomberg's joumanna with the latest. the escalation significant as it has been that we have seen to the oil market there is. and she left it on that point that potential retaliation. oil extending gains as geo political takes change. there's a potential option we are hearing at least according to reporting. israel could target some of the oil infrastructure ofay on what are they monitoring as we se brent at over 1% today? >> that's precisely it. there have been some strikes. there have been retaliations on each country but over all oil remained intact.

the output has not been affect. there have been maybe some of israel's offshore a gas field shut as a precautionary measure here and there. but the flow of oil has not yet been affected. so is this actually going to happen? is israel really going the hit potential sights that could curb or hurt effect iran's oil production, oil exports. iran produced over three -- produces over three million barrel per day. that's about 3% of oil supply. so any disruption there, you would see a sustained spike. in oil, the traders are thinking that any sort of confirmation on attack on the infrastructure. the war premium continue to balloon. if that doesn't happen and any retaliation doesn't lead to any disruption to oil production, we're going to see brent

interpret crude which is around $475. it is still a bearish mood. there is worries about oil demand in the united states and elsewhere. and production remains strong. >> ok. excellent analysis as we continue to watch the fullout in terms of the market reaction. brent 1.8%. bloomberg's steven stepchinsk. let's bring in mr. bernie at special list risk consultancy. thank you for joining us bright and earl early. what are the scenarios being considered by israel at this point? what do you think? >> there's quite a wide range of potential responses. high in the list is going to be lebanon as she said. there were already attacks last night. so we could continue to

increase. there's also the possibility being discussed of right -- the highest of the escalation ladder of attacks by israel on iran's nuclear and oil facilities. it's all positioned that that is effectively an outline scenario, that that would only come in the severest possible escalation. the situation we're in now is obviously concerning. the situations as we highlighted just a couple of minutes ago. this is if we can call it a measured response by iran. it was a contained response by the attacks that israel has carried out in iran's sovereign territory and the proxies. it used weaponry that it hasn't before. it's back lastic missiles but it targeted military sights as far as what they're allow today confirm by the i.d.f. so there will be an israeli response. israel always looks to have the final word in this as they did

in april when they targeted their leader in response to the previous rocket barrage. the question is now is decision-making within israel the relationship between benjamin netanyahu and the defense minister and how israel perceives its position. right now what it would like to do in the next couple of months. we need to think towards a longer term here as well. >> does israel act alone, or does it act in partnership with the u.s.? >> the u.s. will support it. there's a couple of different ways that it does including providing military aid. i signed off just a couple of days ago. we should not expect the u.s. to engage its military forces in support of israel. so if we're talk in technical terms, it will be israel doing it alone as it has in the past.

>> that's a role that he's continue to carry out as it has shown frankly over the last couple of months. tom: how dangerous is this moment drawing on your deep expertise around this region? >> it's a very, very concerning moment because there is the potential already for significant contribution. in the attack carried out last night, iran has signaled that it is not looking to escalate. it is israel east perception of its incredible strength at the moment. it's ability -- the best opportunity it has effectively in 40 years to severely weakness cannot defeat the access which perceives as a fundamental threat to its security. in the conflict. we're in a deeply, deeply concerning moment. we can draw parallels with 1967 in terms of the kind of

strategic issues that play and the potential already shall we say -- but certainly kind of how countries pursue the various strategic position and what they would like to do in the next 10, 15 years. >> ok. >> it's absolutely mental on history right now. >> on the potential redrawing, how far do you think israel goes in lebanon? are we clear on what their goals are? >> nair goals aren't clear right now. frankly because they're keeping their claws close to their chest. we've seen in 1982 and 1986, they have a track reported of being unsuccessful of meeting their ends. what we're expecting to see and what we've been telling their clients is sort to probably holding territory along the bored to allow them to have -- to try to continue to suppress

some of the hezbollah activity along the southern border. there was of course, the announcement by the i.d.f. encouraging lebanese is it dens to move further in other words towards beirut. only 20 kilometers from beirut. they are preparing for a number of different scenarios. but which of those they choose including how far they go into lebanon and what kind of person they choose to have is going going to depend on a couple of different factors including domestic pressure at home. >> associate director at control risks with some valuele valuable context around what continues to unold in the middle east. thank you. coming up, as germany faces headwinds, we will speak to the founder and chairman of the global global dialogue and that interview is next. plus, later, i'm going to speak

exclusively to oliver, the c.e.o. of pinco owner aloins. stay with us. this is bloomberg.

♪ tom: welcome back to "bloomberg daybreak: europe." the german government has promised a growth package in 2025. the chief executive adviser spoke to bloomberg from berlin about the need to lift the country's growth rate. >> it's definitely too low. we are struggling to get positive growth this year. but the more fundamental problem is that we not only have a cyclical growth issue we have a

structural growth issue tom: very pleased to say i'm joined now with an exclusive interview with the founder and chairman of the berlin global dialogue which is taking place here in the german capital he also served as chief economic adviser to former german chancellor angela merkel. someone who is very well positioned to talk about the economy. thank you for joining us bright and early on a big day on the global dialogue. we heard you were the predecessor -- predecessor. so you know him well. the german economy is struggling. this is an issue for global growth. the german government piece? growth this year. what is going on with the german economy and what is your outlook as we push in to 2025? >> the german economy has some challenges. part of it is actually homegrown. and part of it goes back for many, many years. the other is a geo political situation and the fragmentation

which is a disadvantage for germany. mr. kukie is right the problem is the potential growth rate which is declining and it's because of a labor market. we don't have enough people in the job. i think german government is working on. that second big issue is capital investment in germany and the finance ministry and the chance or are working on improving conditions to get more private investment into the german economy. i think then if we get through that and this government has about a year left before we have elections. the future for germany will be better. >> specifics aren't capital market, investment and the labor market. and you think we will see changes on that front. what does that do for 2025? >> they're working on. that they need to push through some of these changes. the growth rate for 25 looks much better. certainly, we will have growth again in 25. a lot of it also depends on europe. you remember the report and other things.

i think there's also the technology issue sort of how do we actually treat investment in the technology area and in the bureaucracy and regulatory issues associated with technology. and this's the third area the german government is very concerned. most of those competenteses are also in brussels. >> now facing a pronounced challenge. v.w. considering closing factories for the first time in decades. to what extent is the challenge of the auditor sector of germany a failure of the shultz government? >> i don't think it's a failure of the shultz government? >> it's a development where technology is changing and companies have to adjust to new technologies. and i think they're doing it. they're going through a transformation so the positive side of it, they will be able to do that. volkswagen were at the berlin global dialogue talking about trade challenges for china. i think that is something which

they will work on. and i'm quite positive that we will get there. but they're going through a difficult period at that time. but i'm hopeful again. >> what to you think the chances are that we avoid those taxs? >> i don't know. we have about a month left. and i was never a big fan of p anti-dumping procedures. the good thing about these anti-dumping procedures is that they bring people to the table. if the chinese are willing to talk about the subsidies. the structural policy issues we've been discussing. if we get a solution in november, then it's well done. if we get into a trade war or have these tariffs in place, then that's a fill failure of the -- is a failure of the season. brussels and the chinese need to work very hard to prevent that from happening in november. >> how vulnerable is germane? >> this is not a new story. we've had a previous trump

administration imposing tariffs on europe. not only in europe in steel aluminum and they were threatening to impose tarriffs on all the auto sector. we ended up not having. that's a big issue. whoever wins will not matter but there will be some additional tarriffs. >> i don't think it's going to be the end of the european economy. it's not helpful. and generally if it escalates particularly with the chinese it's going to back bad thing for all of us. what we were discussing previously to getting the pro tonetial growth rate up and solving our problems at home i think then europe will have a bright future. >> and clearly if the stimulus in china kicks in, that could be helpful to the german economy as well. >> is the german economy still reliant on china? >> for imports and exports. >> i think the relationship with china which is a major trading partner has been beneficial for

both both sides. so i don't think that -- >> that is true so we need to be mindful of not being too dependent. but as long as you do trade. and as long as the german economy or european economy is benefiting and we're creating jobs in europe, think having trade relations is important. what we need do is avoid dependency in particular supply chain areas. there we need to be smarter. that's the lesson learned. i do believe that china will be a strong economy obviously even though they have domestic issues as prow you probably discussed. but i think we need to be careful of not going too far with this -- i call it the independence trap. i said that at the global dialogue of not going too far in the other direction because we will all lose. we need to find the sweet spot of getting not too much depen sense city but working -- dependency but working with china. >> the founder and chair of the berlin global dialogue joining

me exclusively and a former adviser to the former chancellor of germany. i'm going to speak with oliver butte of allianz. that exclusive conversation at 6:30u.k. time. stay with us. this is b.

♪ tom: welcome back. some other stories making the news. nike shares have extended declines in afterhours trading as they withdrew full year guidance. nike is seeking to reset expectations before incoming c.e.o. elliott hill takes the reigns later this month. the company reported a 10% fall in fiscal first quarter revenue just short of the average analyst estimate. but nike's gross margin and sales in china exceeded

expectations. bloomberg has learned that boeng is considering raising $10 billion by sell unstop stock. they're looking for ways to replenish cash reserves further decompleted by the ongoing strike testimony share sale isn't seen as likely for at least a month as they struggle to assess the cost of the walkout by 33,000 workers. later today, emmanuel macron will be speak at a panel here at the berlin global dialogue with bloomberg's head, stephanie flanders. that's at 2:15 london time. tune in for that. this is bloomberg.

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♪

tom: good morning. i'm tom mackenzie. israel valles to retaliate after iran fires missiles, we bring you the latest. gold near a record and oil moving higher. shares extend a blistering rally and tim walz and jd vance go head to head and the only debate before the election, the highlights. let's check in on markets. futures with modest gains after losses yesterday. ftse 100 futures pointed to

gains, s&p lost 3/10 of 1% and nasdaq futures pointing lower by 4/10 of 1%. the geopolitical tensions and the risks of war keep investors on edge. gold holding, down 5/10 of 1% but still near record highs. behrendt getting a lift. jumping almost 5% yesterday, euro-dollar is softer. let's flip the board and check in on asian markets. pronounced rally in china,

jumping the most in almost two years. extending 13 consecutive days. it's china and hong kong that are overpowering the downside. nikkei is down. netanyahu called a missile attack a big mistake. many of the missiles were intercepted with one person killed in retaliation for the killing of a leader in the move into lebanon. >> armed forces are ready to

repeat the operation. tom: joumanna joins me now. what do we know about this attack and if it's cryo will respond -- israel will respond? >> iran fired ballistic missiles, explosions were heard. most missiles were intercepted. shrapnel may have killed one person. military sites expected to be where the nish -- missiles

initiated from. they had been vowing to respond to the killing of ishmael entire on -- in tehran. one commander was killed as well, they have been hinting retaliation was coming and it came yesterday in the form of missiles. the potency of the attack was higher in terms of escalation dan april. les telegraphed, stronger and faster missiles capable of being intercepted by the u.s. and israel. the u.s. helped.

the israeli prime minister, netanyahu, saying iran made a big mistake. how far does israel want to go? axios's saying retaliation will be swift and potential, maybe some oil infrastructure, assassinations or nuclear sites as well. tom: joumanna joining us out of dubai. brent is up, waiting for the expected israeli response. traders position for interest rate cuts and the economy is in need of loose policy. joining me now is oliver better.

thank you for joining us. on the monetary policy front is the ecb at risk of being behind the curve? oliver: i don't want to give advice to the ecb. they have done good job. germany needs more than a interest-rate cut, i don't think that will do the trick. we have to be cautious. inflation has come down, labor costs have not. i do not think they are behind the curve.

i would not -- i would recommend be very careful because we misread info about inflation. let's be cautious. tom: concerned are you about the german economy? oliver: i'm worried about sentiment which is important. the german asked with the middle east, they are cautious but people are not investing because we are not offering a proper outlook to remain competitive. we ask our population to transform economy, fund the

world, change their problems. absorb millions of migrants, asking a lot of our people and they are worried about the ability to absorb change so we need a strategy. many things. we have an educated workforce, highly skilled. best engineers in the world. companies are producing the best goods and we have a stable society. people like to live in germany so we need to go back to made in germany and back to working harder. tom: talk about pimco, what are

you seeing? >> thank you for the question. our colleagues had 50 billion inflows and that has continued strongly. we are very happy. we are also happy to pivot and wherever i go policy makers are very happy. im not forecasting but based on today, very strong. we are above 50% of net flows. tom: what are you seeing given

concerns? >> people need strong advice on how to's vision. lots of risks. they are not priced in people are worried about spreads and the highest level of debt since the napoleon war isn't narrowing will not get back to the rules. i would ask some people. i would not focus on an individual one but i would be very cautious. someone asked if it was risky.

tom: french assets are risky. in terms of tensions and tariffs are markets overlooking potential risks? oliver: people talk about all the time and a lot of noise. before various elections i have been impressed. a lot of noise and people are clever. every president understands. tom: ok, so maybe some lessons germany could take. let's get back to the rates question. you have benefited from higher reinvestment rates.

do you see that continuing? >> no, we have a tripling and we have to hold a lot. given levels of debt investors are not stupid. crowding out private capital has been a bad idea, miss allocating capital and we need proper return on bonds. tom: what is your longer-term view? >> ask dan iversen and you will get a much better answer.

my question is where will be the interest rates? investors have to be vigilant and we will be. policymakers understand we need to invest so regulation will have to change. tom: you will be outlining new targets. give us a sense of flavor and additional deal activity. >> nothing changing. if we find something useful we will do it. no surprises. nothing in nine years that i would have done and what it is going to be about is any

criteria, that drives enormous amounts of clients so we need to grow the customer base. tom: thank you for that. oliver better, we appreciate your time. ceo of allianz. a view in terms of the need, thank you. emmanuel macron will speak with bloomberg's head of government's at 2:15 p.m. london time. tune in. coming up, tim walz and jd vance in the only debate before the election.

was there a knockout blow? this is bloomberg. ♪

♪ >> welcome back. tim walz and jd vance have gone head to head in the only vice presidential debate in five weeks time. a shaky start as he stumbled but no knockout blows. including immigration and whether donald trump lost of the 2020 election. >> continuing to bring this up, blaming migrants, on housing we can talk about speculators but

it becomes a believe. this bill gives money to adjudicate. it should not take seven years. start to make a difference and adhere to american principles. donald trump is still saying he did not lose the election. did he lose? >> i'm focused on the future. did kamala harris sensor americans? >> that is a daily nonanswer. tom: let's bring in vonnie quinn from new york watching this. who won? vonnie: it reflects the mood of the country. cbs asked who won and they are basically tied.

17% said it was a tie. that is what we are seeing and why the final stretch will be so significant. harris has the advantage, she out fund raised the trump campaign or-one. in terms of everything else it will be extraordinarily close and that moment was the most combative that we saw them. it was convivial. very few points of combat. tom: any memorable moments from they closely run debate? vonnie: we will get to maybe a couple of nuances post debate

but the questions we were asking was did they pick the right running me and would we learn anything new? both candidates picked the right running mates but there were small gaps so on a question of gun control tim walz said he had become friendly with school shooters, he was talking about sandy hook victims and it's likely that's what he meant to say but that has blown out, trump retweeted it and there was another moment in which phrases like knucklehead were being used. it went off as planned and they

abided by the rule, do no harm. tom: vonnie quinn indeed on the vice presidential debate. french prime minister biased time to fix finances, delaying a plan to bring the deficit in line with rules. more details from the first consequential policy speech next. this is bloomberg. ♪

>> welcome back. prime minister michelle has delayed a target by two years. >> are colossal debt, if we are

not careful it will put our country on the edge of a cliff. tom: let's bring in caroline connor with the latest. what were your main takeaways? caroline: austerity is coming to france and there was a lot of reading in the speech. it was hard to hear the prime minister because more than half of the parliament question his leg jimmy to see -- legitimacy. two years after the end of the

mandate. he wants to reduce the debt burden, 50 billion euros a year is more than the entire french budget for education so there will be spending cuts. local authorities will have to tighten their belts. a crusade against social fraud but there is the mantra of raising taxes. he has been talking about bringing taxes down. we get those details next week

and multinationals, in order to raise 15 billion euros of additional taxes. the left has not put in a vote, we will see if there is one. tom: caroline connor in paris. austerity for france and later today emmanuel macron will speak at the berlin global dialogue to stephanie flanders at 2:15 p.m.. opening trade is next, this is bloomberg. ♪

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anna: we are one hour away from the opening