>> good morning, this is bloomberg daybreak europe. i'm tom mckenzie from europe. the global selloff continues as

investovers bet on a slower cut of rate cuts from the fed. the dollar gains against all grand jury 10 peers. we'll speak with the c.e.o. of volvo cars. plus, mcdonald's shares slide after its quarter pounders are linked to a severee. coli outbreak. at least one person has died with over 50 falling ill. tom: deutsche bank earnings, a beat for the german lender. 2.6 billion euros above the estimates. a stock up 35% year to bank.

deutsche bank also seeking authorization for further buybacks. we look for the fixed income and currency sales and in the third quarter that came in also as a big 2 at any time 1 billion your east. it's beat in terms of fixed income and currency trading. again, the stock is up 35% year to date. we are going to be hearing from the deutsche bank c.f.o. in just under half an hour so stay tuned for that interview. roche, the drug make herbalisted in swither land. third quarter sales are a beat. 15.1 billion swiss franks so it's a beat on that line in terms of third quarter sales. a beat for roche and this is

scrutinizing the pipeline in terms of some of the new drugs. the details on that will be important as well and we'll be speaking to the rochec.e.o. let's go to the markets right now. the focus and interest is far less on the equities at this point and far more in terms of the bond market. equities have basically been doing nothing over the last 24 hours. looking for a new catalyst. the action is in the bond market. s&p futures currently lower by 10%. let's stay on the u.s. 10-year which is back above 4.2. that's the two-year but at the long end as well you continue to see that selloff in terms of the treasury market. yields are up around two basis

points across the curve. gold currently flat at $2,749. volvo cars is seeing full-year retail sales increasing between 7% to 8%, a downgrade to the previous forecast which had been 12% to 14%. very happy to welcome in the c.e.o. of valveo cars. jim, thank you for being here. what is underscoring the downgrading? >> basically we're seeing a softening in the market. lots of factors, first of all, inflation, which is an obvious impact to new car sales but also sales in the e.v. sector. partially the rollout has been slower than we would like to see. when you add all these things

together, you start to see a slowing in the market. the trade tariffs are another specter on the horizon and consumer sentiment is changing as we approach christmas and people are looking at where they're going to spend their money. tom: jim, which for you is the most challenging of those held winds in the here and now? jim: i think it's the growth in the overall sector. we've broken 10% year over year, 3% in the third quarter but in the fourth quarter, it's much more of a flat outlook. that's why we've downgraded in terms of the growth outlook for the higher year but it's the high inflation rates, the uncertainty around trade tariffs and of course the changing consumer sentiment. tom: what's your level of

confidence at this point that that that 7% to 8% deadline holds? jim: i'm pretty confident we'll hold that we've outgrown the premium markets. we're pleased we've outgrown significantly the premium market. that's helped by the new third best-selling new e.v. in europe and of course it's helped by the electric hybrids which are extremely strong. so the xp-60 remains the best selling in europe and has been for the last 10 months or so. we have hybrids, we have plug-in electric hybrids, five new e.v.'s in the market. we're in relatively good position but nevertheless the market is startening to weaken.

tom: when does that softening market for demand in vehicles start to turn around or does this continue through next year? jim: that's really the question. when does this market begin to change? it's certainly on a downturn at this point but at some point the market will change and the main thing for us is to complete investing in the technology and be well protected as we go through the transition. that transition to e.v. has taken longer than people would have expected or would have liked. if you don't have the male hybrids or plugin electric hybrids, it becomes much more difficult. because we've continued to invest in them and because we have a nice, wild customer and loyal customer base in 80 countries with a wait. coupled with the fact we have

40, 50, 60 s.u.v.s and wagons. it's difficult for those that only sell this effort v. and only in one segment. we're varied and that's going to allow us to write the story. tom: you're heard in sweden. you have manufacturing in the u.s. and china amongst other places. on the tariffs question, how much of an impact do you expect to see and how are you trying to mitigate that impact? jim: yes, we're very fortunate in as much as we've had a strategy for quite a few months. build what we sell and sell what we build. we have manufacturing facilities in asia, europe and north america and that leaves us to circumnavigate some of those tariffs. in europe, the ex-30 which is currently only built in china

and we started globalization of that car in the summer. so that car starts production at a belgian facility in the first quarter of next year so that helps us navigate some of the tariffs that we'll see come in and from the importation of cars from china and to europe. so it's a short-term problem for us but it is a problem in the short term. tom: talk us to about what's happening. a pimm, a j.v. with electric vehicle batteries facing some significant challenges, that business. when it comes to the j.v. with norfolk, is production still on track for 2026? jim: right now we're still on in terms of the production plans but one thing i should state to make clear, we're dual and in some cases triple sourced on our batteries. so we don't have any single point of fracture and that's

good and again it goes back to the strategy of making sure we have resilience in the supply chain. the norfolk guys, so they can get the funding required but at the same time we're mitigated by our supply strategies. tom: sounds like you're not awfully confident in the fortunes of norfolk. would you consider liquidity in that at this point? jim: no, these days you have to have resilience in your supply chain by having one more than one single supplier. this is not specific to norfolk but general across our entire supply chain. tom: volvo c.e.o. jim rowan. thank you very much. let's get to the asian markets.

checking in with avril standing by in singapore. what's standing out to you so far in the session? >> i think it's how subdued we're seeing most of the stocks in the region. trade tariffs are a concern from asian investors two weeks out from the u.s. election. wrap in concerns surrounding u.s. fiscal spending the federal research. risk appetite looks pretty subdued and other than chinese stocks that are really charging ahead and the rest of the region is looking like it's struggling for direction. i do want to highlight what we're seeing in japan. this weekend japan also has a general election and polls show that the prime minister's ruling coalition could lose its majority. is this a backdrop that the b.o.j. wants to hike rates?

we're seeing weakness on the japanese currency. let's we vice president seen against the green in three months before the august eruptions and this chart shows you how it's toughed the00-day moving chart. the g10 this month has lost about 6%. we are seeing that chinese stock out performance and this chart shows you how there's been a divergence between chinese and india stocks. there's a reversal of the narrative we've been hearing for much of this year. long india, short china and in speaks to, yes, the stimulus announcement of late september but also how india's stocks have been struggling against the backdrop of slowing growth and slowing earnings. tom?

tom: avril, thank you very much. here's what else we're thinking about today. a big day in terms of the earnings story and sales so keep an eye on some of the key companies reporting there out day. we'll be breaking those through the day and bring you a number of interviews. today as well we're going to get third quarter earnings out of the u.s. a number of companies in focus for us including tesla and boeing. coca-cola also reporting and on the macro economic fronts, the beige book from the fed so more details in building out the color around the economy. talking of that, bank of america c.e.o. coming up. why he thinks the fed should not go too hard with rate cuts. and later, we'll hear from the deutsche bank c.f.o. on the

latest earnings. stay with us. this is bloomberg. ♪

>> we don't normally have all the general economic work. we have the top research team in the business. they do a great job but we also have american consumers. if you look at the consumer spending this year, the month of october this year or third quarter vs. last year's it's up at a 4% to 5% range, instant with a low-inflation, low-growth economy. it's a big sample and the people spending each quarter on all different things but generally consistent with yes we were

pre-pandemic. the fed rate at% level. inflation under control and growth at the 2% level. that's what we see. >> for the consumer is there a degree of -- there demographically? >> it's less about bifurcation. inflation hits people in lower brackets more than it does others. the good news is gas prices have come down. inflation is down to the 3% range. so that helps but if you have auto department death and you want to get a new car, that debt is higher. if you have mortgage debt and you already had a mortgage loan it's very low so it depends on the consumer than where they are. the average consumer has more money than before the pandemic and is spending money and that's all good stuff for the u.s.

economy because we're such a consumer-driven, consumer led economy. >> are you thinking about allowances for stress at this point? brian: we always do that. every day we run thousands of stress tests. what's the case if it turning out the wrong way? even how we set up reserves we have a model series of cases we put in. the rest are stress cases. you add them together, we're setting researches as if unemployment was going to be at 5% at the end of next year, not what is predicted at 4.3. then we look before that. >> there are indications for the fed depending what happens in under two weeks' time. the scenario particularly under a trump administration but also the risks under a harris camp as well. is that something you're thinking about? brian: hard exerts have the fed

cutting again a couple more times this year. 100 basis points this year and a couple hundred more evenly spread out next year and then inflation comes down to the 2.3% as we move into 2025 and 2026. that is a well engineered fed change so thetarian is the data go too fast or too slow and that risk is higher now than six months ago. you see the treasuries one day and the rally the other day. everybody is going to watch all that. tom: bank of america c.e.o. brian moynihan speaking. the yield is up around three basis points. let's bring in valerie. what is happening in these treasury markets? >> a lot of angst.

we just heard c.e.o. brian moynihan saying he's worrying about the fed cutting too much. in the next chart it will show more about the direction that we're worried about the treasury market movement. note, we are seeing a very high cost now of hedging against higher yields. it's hit the highest this year and the highest since september a year ago when treasury yields hit 5%. so you can see this angst in the treasury market. trying to scramble for upside protection for yields headed higher potentially after this election. tom: are they building out a divergent policy for the fed? >> we heard in christine lagarde yesterday. we've had inflation dropping near the fed's target.

service inflation is down to 3.5%. that is on her mind and she reiterated that yesterday. we heard envelope roy talking about the downside risk to inflation and growth. he called them significant so he saw some weakening in the euro. it's been on a weakening trend. down 3% so far in the last month. tom: thank you very much. coming up, mcdonald's is grappling with a severe e. coli outbreak in the u.s. it's killed one person and made dozens sick. this is bloomberg. ♪

>> there was a narrative i think that was prevailing when this administration took office that

the united states was on the verge of being surpassed by china as an economic power, that the united states' influence was waning in the world. that china's influence was on rise. i think those predictions have very much been reversed over the course of the last few years, in large part because of the partnerships the united states has built with key allies and key partners. tom: u.s. national security advisor speaking with editor in chief of bloomberg after the the bloomberg new economy forum. staying on the u.s. and its attempts at building out a cease-fire. the u.s. secretary of state blinken is in israel making a last-ditch push for cease-fires in both lebanon and gaza before the presidential election. there seems to be agreement with benjamin netanyahu that the

killing of sinwar last week opens up a path for a cease-fire. u.s. prime minister keir stormer says donald trump's legal complaints over his labour party about election interference will not jeopardize their relationship if the former president wins next month. the filing looks unlikely to gain traction as foreign nationals are allowed to volunteer for u.s. electoral campaigns. and car breaks for u.s. car purchase but only those made in the u.s. he did not speak on foreign carmakers in the u.s. in addition to tax breaks for car buyers he's vowed to impose

stiff tariffs on cars made elsewhere. jamie dimon privately said he supports kamala harris and would consider a role in her staff, perhaps as treasury secretary. sources told "the new york times" that the selection is close to a disqualifying factor as reported by "the new york times." from deutsche bank, it's a beat in terms of the fixed income and currency sales and they are weighing up a buyback on back of a beat coming through in terms of the investment banks so buyback approval has been sought in deutsche bank. an interview with the c.e.o. on it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall.

change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people. - after military service, you bring a lot back to civilian life. leadership skills. technical ability. and a drive to serve in new ways. syracuse university's d'aniello institute for veterans and military families has empowered more than 200,000 veterans to serve their communities and their careers. from professional certifications, to job training, to help navigating programs and services, we give veterans access to support from anywhere in the world.

tom: i'm tom mackenzie in london. global bond selloff as investors bet on the fed, big day from deutsche bank as they report better than expected sales and revenue, we will hear from the cfo and quarter pounders linked to severe e. coli outbreak, one person has died with nearly 50 falling ill. big day and a beat, trading business went well, 11% increase, stock is up, a beat

coming through and we will wait to see if they get that. currency outperforming. those units are performing well when it comes to the corporate and private bank you had soft loan loss provisions and strength from the business. let's bring you our interview with the ceo and all crook. >> conditions carried through.

usually we see strength as investors and corporate's position for changes and so that is what we expect to see passed the milestone. >> this year was marked by the loan loss, got some money back. enough to justify a buyback? >> we have applied for authorization in 2025. we have seen a release and we have a court case this morning. we think we have reacted well to the setback that was the -- the -- the -- the court in april.

gratifying to go through that of -- of -- of -- of mitigation. we will speak to size but we've laid out a plan which is -- which is increasing levels of return, representing normalization which we expect to achieve. provisions have been influenced by transitory effects which we expect to ameliorate including bank integration, defaults which were hedged. impact was -- was -- was -- was moderate but we called early for

stabilization, we've seen that continue whether driven by interest rates, the economy and indices tell us there is stabilization down in commercial real estate occluding a -- a -- a sort of acceleration, so we feel the trend is established. >> quarter in germany, are you able to capitalize? >> we are up this year, with a market share gain. the wallet was softer in the

third quarter, seasonal and temporary, momentum is there. >> wonder what it tells us about germany? is there a sense of germany for sale? >> it is both ways, and and a or foreign investment, we see two-way flows. germany has private middle-market companies selling to private equity and then large companies investing abroad has been the trend. >> m and a in a lot of talk about deutsche bank and commerzbank getting together.

i would like to get the process of where you ended up? >> domestic consolidation is on the list of things as you observe. industrial logic makes sense but we needed time to be ready and it has not come. tom: deutsche bank's ceo. for more details you said down, they beat the results. what stood out? does that power them ahead?

>> yeah. we saw sic trading, 11% growth, bigger than wall street. best was bank of america so it was decisive. that put their fixed trading up. origination and deals and advising was up 24% and remember they put aside 1.3 billion euros for legal issues. some of the money they got back and they confirmed a buyback, have not given us the volume. >> you asked about this, the

takeover or building out stake, what did he have to say about -- about -- about consolidation? >> the situation made huge headlines with regulators and the government but is not the only consolidation. there was a takeover of credit suisse. this is a moment of banking consolidation, no banking union yet. it seems like they are trying to build it and deutsche bank have

to ask what position they want to hold with bigger banks, i think james suggested he is aware and which a bank wants to play a role but not just now. they are executing on the turnaround strategy. he said next year, that will be key. tom: i like -- i like -- i like the framing of that. we will see if we get it in 20 -- in 20 -- in 20 -- in 25. watching the stock move at 8 a.m. u.k. time. maybe that is the catalyst for lackluster markets, the earnings

story. more optimism, we will see if the dax gets a lift. action has been in the bond market but it could change. ftse is flat, snp lower after a lackluster story, nasdaq features off, let's flip the board and have a look at u.s. treasuries. yields up on expectations the fed will be moderate, built up 2%. euro-dollar at 108, brent close to $76. inventor restoring adding softness and gold up 1/10 of 1%.

arm cancels license that allows qualcomm to use ip for chip design escalating legal dispute to disrupt smart phone pc markets, ratcheting up a fight that began when arm sued for trademark infringement. this gives qualcomm eight weeks to remedy the dispute. john jumper says the first drugs discovered without full fold technology will be five or seven years away. it is ai that can predict protein shapes and help scientists skip the steps of the process and predicts how molecules interact with dna.

take a listen. >> the resources are growing so rapidly that if you look toward any area it's growing quickly and we have more capability, a lot of it will go commercial and develop drugs that are actually available, in some ways i think it is good, gives us the prospect of funding technology. it is a challenge, the fact that we benefited from working on this and a team of 15 people is hard within academia, so the costs of accelerators and others is a challenge as ai grows, but

a good thing. we will see maturation and healthy research. i'm quite excited. still trying to put useful systems into hands. tom: john john jumper, recent winner of the nobel prize and google scientists. l'oreal's american receipts fell by 5% after disappointing sales last quarter, blaming china's slowdown for sales dropping, marking the fifth court of following -- quarter of falling sales. they hope it will boost local

demand. starbucks shares fell after they pulled guidance. they reported its steepest sales drop four years with weakness evident in the u.s. and china. withdrawing guidance will give the new ceo opportunity to solidify a turnaround plan. christine lagarde challenged to of donald trump's criticisms on the importance of global trade. >> fair trade is -- is -- is -- is a key boost for employment, innovation, productivity and it -- it -- it -- it is something we should not throw away because the u.s. has thrived during times of trade, not i'm going to

retire behind my boundaries. no. >> i mean there was a big u.k. media outlet that called the u.s. economy the greatest economy right now. would you agree? christine: it depends on where you are, you have to go further than look at the aggregate or average numbers, depends on where you are. if you are on the bottom of the ladder, if you have small job, not much income i'm not sure. everything needs to be considered but it is a case that the u.s. has very high productivity, vibrant tech sector and has for a long time so it capitalizes since the --

the -- the beginning of the 20th century and there is a lot of catch-up at the moment. you have to look also at the people and -- and -- and the coefficient, the u.s. is not doing so well so it is spreading and distribution so that people can benefit. i'm being political now. i think there is a huge resistance in decisions despite what is being expected anyplace and for central banks which have the privilege of independence it is important to hang on and

defends because the credibility really is a factor vis-a-vis the politics. >> do you think the -- the -- goal, -- you'll come under fire more? he said it's a flip of the coin every -- every -- every month. >> you should visit us. i have thousands of hard-working people, uh, economists, scientists, they work super hard every day. not just once a month. tom: that was christine lagarde with for seen -- francine locke was.

mcdonald's grappling with e. coli in the u.s. that killed one person and make dozens of sick. this is the bloomberg. ♪

♪ >> welcome back. mcdonald's shares fell after the cdc said a severe outbreak was tied to the pool to pound of virgos. -- the quarter powder -- pound are burgers, onions are the source and they removed it from some restaurants. >> the decision was made in

close consultation with the cdc. the majority of states and menu items are not affected. the cheese will give -- cheeseburger, the make double are not impacted. tom: they risk off mood as traders waive the prospect of less aggressive fed cuts, european futures are up but not a little of action, looking for the catalyst. when it comes to risk off sentiment gold has hit a record high with investors monitoring the election and conflict. let's break down these stories and bring analysis with a nikkei group the from research

partners. i want you are kind of take on the bond market selloff. i wonder if we are set for repricing as well on the back of the readjustment? annika: we have had quite a few rate cuts being taken out and equity markets digested it well and it's been on the back of growth so it continues to support equity markets lot higher. tom: 6000 poor -- for the s&p. i want your take on what a you are making.

were going to come back to you for further analysis. annika, what wisdom tree directory staying with us, more in a minute, this is the bloomberg. ♪

>> welcome back. you are watching of course bloomberg tv going through the markets with annika from wisdom tree. an eager to hash annika, what assumptions are you make? >> we have maintained the earnings growth estimate but we have lifted expectations from 11 percent in targeted earnings.

now this is driven by margin expansion supported by improving macro factors and if we look at it the biggest upgrades emanated from tech. we have seen earnings growth and increase in expectations. >> ok that's interesting. my next question is about the challenge to the view from tariff risks, u.s. politics. you need to be focused on set does that are more isolated? annika: u.s. election is a big risk and investors are being careful on where they put exposures but if we -- if we -- if we see an outcome where president trump -- trump does --

actually wins, that puts us in less of a regulation stringency in the tech sector. if it is the democratics that come into power that will have a bigger impact on the tech sector, the least regulated sector, so that would have a big impact. tariffs have a role to play alongside many other sectors. those would be primary, primary risks. tom: ok. the bank of england, we've been hearing from the bank of england that they are continuing rate cuts. how much divergence do you see?

anika: boe has been late what we've seen a sharp shift, andrew witty hinting on the dovish shots. we are expecting 25 basis point rate cut and expect 25 basis points of rate cuts up to the september meeting. tom: ok. 3% by next year. thank you indeed. wisdom trees director of economic research indeed. we will speak to the ceo of roche on third-quarter results. opening trade is next, this is bloomberg. ♪

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anna: i'm and or edwards alongside guy johnson an