>> good morning. this is bloomberg daybreak: europe. the biden administration weighing additional curbs on semiconductor equipment and ai memory chips sold to china. the latest crackdown on beijing's tech ambitions. the french government facing a

no-confidence vote that could oust michel barnier as he attempts to pass the budget, shaking french bonds and stocks as well. the u.s. ftc launching a broad investigation in microsoft, looking to everything from cloud computing to ai, even cybersecurity ahead of a new administration. good morning. let's get a quick check on the markets. green on the screen. i have to warn you that is thanksgiving in the states. a lot of folks are off. luckily for us, we get a little bit of positive vibes. we are think over that. that means light volume, light liquidity, auto. that's what you are seeing in futures this movement -- this morning. ftse 100 on the back foot, down

by two tents of 1%. s&p futures and nasdaq higher. i wouldn't read too much into that. light volume, light liquidity on this u.s. holiday. when you look at euro-dollar, it's weaker. down two tents of 1%. potential tariff overhang, not to mention what's happening in french, is overshadowing gains in the euro. you are also seeing weakness in the chinese yuan. that's where the trump story shows up to get to me what was stocking -- shocking is that you are seeing a revival in the mexican peso. dollar max weaker this morning, a bit of a retracement of the weakness you've seen in the mexican peso this morning. brent crude may be reflecting some of that sentiment, may simply be low-volume there as well. trading around 72 handle. that is your process at story. let's see how asian markets are faring. april hong standing by in singapore. avril: asia stock age is flat

because it's a mixed bag. china is down, japan is running slightly higher. helped along in part by a reversal in the gains of the japanese currency of late. note it's partially to do within liquidity, given the thanksgiving holiday. but china is really where we see the hit to sentiment. it is spreading to different parts of asia as well. it's against the backdrop of this bloomberg scoop, right? the biden administration is considering press curbs -- fresh curbs to china in terms of the sales of chipmaking related equipment. ai chips as well. while they pointed out that it might see fewer huawei suppliers in the crosshairs potentially, it's just a reminder about the geopolitical risk, the tensions between the u.s. and china. that's what we see in chinese equities today. flip the board. part of why you are seeing the japanese stock age in the green is this boost from the

chipmakers in the country. analysts have pointed out it's really the ones with heavy sales weightings to china that are benefiting today. tokyo electronic at one point jumping as much as 10%. flip the board again. i wanted to highlight the day where china stocks are underperforming, a broader trend that we've been seeing in terms of the major etf's and how they've been seeing outflows. indeed, they are set for a record monthly outflow this month. it's quite a reversal from the prior month. this was of course driven by stimulus. that was what drove the equity rebound to get sentiment has shifted quite significant leap. think about how investors now don't seem as austin mystic the chinese authorities will come through with enough stimulus to lift consumption. there's also the specter of higher u.s. tariffs. this is what we see in chinese stocks today and this month in general. kriti: the fact that the exodus

has been showing up already in the markets, even before donald trump has been inaugurated, is crucial. we thank you so much for watching. weighing additional curbs on the chip sales to china. crackdown that stopped short of some of the stricter measures previously considered but still clearly having market effects. let's get more information there. let's walk through some of these details. we've heard this before. we've heard this tough on china rhetoric for from both administrations. the trump administration again, 2.0. what's different about these measures? >> they are significantly scaled-down from what we were hearing before. u.s. officials have long been considering additional chip curbs. this is a real pain point. what we heard, our understanding of what's to come is now significantly scaled-down.

previously, there were six suppliers that were on the list between -- for u.s. officials. that's been scaled-down. there's only going to be a couple of those companies. there are sanctions under discussion. huawei being china's tech giant. part of the reason that china can perhaps think for these measures is the u.s.. u.s. industries came out heavily against these moves. in discussions with u.s. officials, have been saying, these chips are really important for us and our business. of course, the experience from trump 1.0 is those prices start to go up for u.s. manufacturers. of course, this is a preview of what's to come. because trump is of course being inaugurated next year. we know that there's going to be a lot more to come in terms of tariffs and new rules on imports.

kriti: talk to us about the mexico story. it's all connected. the china policy with the mexico policy to tackle the fentanyl supply chain that eventually makes itself into the opioid crisis in the united states. some conversations happening between the mexican president and president-elect donald trump. what we know? >> they had a press conference today about it. they gathered business people. mexico really came out and said it was the president and the finance minister singing, we are preparing countermeasures, potential countermeasures if this comes into force. they laid out a presentation that showed and acted as a warning to u.s. consumers and said, if these tariffs, income of the 25% that trump had vowed on monday against canada and mexico, that would cost 400,000 u.s. jobs. it would also raise the cost of cars by about $3000 a unit.

that's ford and gm which have manufacturing pants -- plants in mexico. it's a big hit to the u.s. economy and u.s. jobs. this was not an answer to one reporter question. it was a full-fledged report. we heard something similar from canada's finance minister as well, just about how they are planning to push back in case of tariffs. kriti: yeah. really something that's crucial. donald trump immediately saying, actually they are looking to close the border. the mexican president saying, that's not what the conversation was. interesting to hear that to for tat. in europe, a different conversation around government. french banking stocks have been under pressure. the deepening political crisis in the country as they face a potential no-confidence vote that could oust the prime minister. a lot of that coming from whether or not he can pass the budget. >> if it stays the same, yes.

this is not a surprise. we always said for the past three months. i'm telling you. if this budget is not approved, the budget will apply and actually it's not as bad as this one as there are less taxes for the working and middle classes. kriti: let's get more from caroling conan, joining us from paris. today is crucial. pension reform repeal the -- vote. how will it work? walk it -- walk us through it. >> this is a test of what could happen if there's a no-confidence vote over the next few days against the prime minister michel barnier. the national rally of marine le pen and the left-wing, which reposed -- proposed this vote of the pension reform, probably will join forces in order to

support this proposal to repeal the pension reform. now it's actually unlikely to happen. it will be stuck somewhere in the process. in the senate, they've got the republican majority. it's heavily charged. marine le pen has been threatening over the past few days to really really support this vote of no-confidence. she is the kingmaker in parliament, given michel barnier does not have a majority. she has some red lines the budget. she doesn't want to see prices of medicine rise, for example. she said she wants more measures to cut spending on immigration. she is totally against raising taxes again on electricity. there will clearly be negotiations over the next few days and weeks.

potentially michel barnier could face first vote of no-confidence as soon as next week on the social security part of the budget. if he manages to survive next week, we are looking at the week just before christmas which is going to be the deadline for the budget. it's all a game of chicken. one of the ministers who is in charge of the relations between the government and the parliament said over the past couple days, we are like turkeys waiting for christmas. kriti: an apt analogy on thanksgiving. we thank you so much for walking us through the french story. that is something that's having

rippling effects across the markets. we've seen that in the bond market. those wives against the german debt story showing up there. showing up in the stock market as well. valerie tytel over that story. >> the cac 40 has underperformed by a very wide margin. broader urine nasa be -- broader european assets. the comparison versus the stoxx 600. if we look back all the way from the creation of the euro, this is the second worst underperformance when it comes to the french stock market. a lot of the recent drag has been due to the weakness in french banks. we can talk briefly about how those banks have performed in the last two weeks. all three major french banks, bmp, socgen, credit agricole. maybe we can take a look at how they performed over the last two weeks. all solidly in the red. a lot of this has to do with the widening of those french o.a.t. for -- spreads.

yields rising when it comes to those bonds. a lot of these banks hold those bonds on asset swap. though swaps have not been performing very well. we can take a look at how they've been performing. we've actually seen a d-link back in the asset swap versus how it's been trading in germany which is worrying to the balance sheets because they hold the french bonds on asset swap. another thing i found interesting, we can talk about how the french yields compared to the broader yields across europe. this is something i never thought i would see. being on a trading desk during the sovereign debt crisis. we are now having the french 10 year yield basically on par with the grease 10 year yield. they are very close to inverting. this is something that hasn't happened since the creation of the euro. we see a bit of this inversion happened today. interesting. a decent sign of the times of the peril of the french economy. kriti: and that's just the

european story. talk to us about the european story as well. >> we did get a lot of data out of the states. a lot of this brought forward because of the thanksgiving holiday today. thankfully there wasn't any surprise. a lot of the attention was on the core pce metric which basically come down to expectations to the third decimal. not a lot of volatility when it came to the u.s. markets after these data releases. expectations for the federal reserve december meeting stayed very stable. we are now looking at a 17 basis point cut priced and for the december 18 fed meeting. kriti: trying to see how it shakes up in the market. thank you so much. some of the other data points we will get on their side of the atlantic in the next couple hours. this thanksgiving, they are having liquidity. let's look at a stock covering the inflation story here. october cpi nutters -- numbers coming at 8:00 a.m. u.k. so basically in less than two hours or so.

i 1:00, germany october cpi. a lot of those numbers crossing the wire. plenty of ecb speak. all speaking throughout the day. coming up on the program, we go back to the states. the ftc has opened a brought a -- broad antitrust investigation into microsoft. we dive into the details, next. this is bloomberg. ♪

kriti: microsoft investigated by the u.s. ftc. after hours, moving down to tense of 1%. in the session when the headlines broke, drat -- down 1.2%. let's get more on that investigation. john carney joins us. walk us through this inquiry here. why now? what are they looking into? john: well, there are a number of factors involved. as my colleagues report. one is, microsoft is a major government contractor including

with the defense department. and the other is, in the minds of the ftc, the crowdstrike failure of earlier this year. july. that of course affected entities, companies, individuals , organizations all over the world. everything from airports to doctors offices. crowdstrike of course was carried on the windows operating system. so it demonstrated to everyone, at least in the government, that windows might be vulnerable. so this marks the finale probably for lina khan, the ftc chair who has had pursuit of a very vigorous antitrust campaign

. the most aggressive in washington's recent memory. kriti: it's fascinating that you are talking about this. it feels like so much of this last-minute ire from the ftc and biden administration is being rushed through ahead of president-elect. walk us through that dynamic when antitrust has been a bipartisan issue in washington. john: right. i don't know if rushed is the right word. according to our report, the request for information runs to hundreds of pages. he can't just do that quickly. you can imagine just how broad this inquiry is and what the responses, how many pages that will be. it remains unclear what will happen. they can't shut off the

investigation once it starts. lina khan, unlike the rest of the biden administration, has some boosters in the republican ranks. jd vance once praised her work. the tech industry is regarded still with suspicion among conservatives who have these giants censoring them. these companies have denied that. kriti: certainly something we will be keeping a close eye on. these things can take years and can shake the markets in the meantime. we thank you so much, joining us out of washington, d.c.. let's get to the other stories making news around the world. uber under investigation by the u.s. federal trade commission over whether it violated consumer protection laws with us obstruction surface. the ftc looking out the enrollment cancellation aspects of the uber one service which

provides discounts on rides and delivery orders. huber says it is quick and easy to cancel the service. blackrock agreeing on a broad outline of a deal to acquire private credit group hps investment partners. the deal values the target at about $12 billion. if he goes ahead, it would see blackrock gain more than $500 billion in alternative assets. sticking with the asset management story. texas sued blackrock, vanguard, and state street over their climate push. they are clues -- accuse them of violating antitrust law. blackrock hit back, calling the lawsuit baseless and that it defies common sense. coming up, we go back to d.c. and take a look at how donald's threats of tariffs could impact the so-called special relationship between the u.k. in the united states. more on that dynamic, next. this is bloomberg. ♪

kriti: americans are big buyers of british exports like land rovers and a string of blockbuster pharmaceuticals. how can donald trump steer of threats impact the u.k. economy? bloomberg's u.k. reporter has delved into that very issue. i'm sure you are far more awake than im. walk us through how exposed the u.k. economy really is. >> the u.k. economy is more exposed to potential trump tariffs than we think it is. the u.k. likes to think of itself as this consultation nation, superpower which it is because two thirds of its trade with the u.s. is in services. as you mentioned, americans love lots of british goods. they are the top buyers for land rovers and farm products.

if you look at the 15 manufacturing sectors, the top 15 manufacturing sectors in the u.k., nine of them has the u.s. as the main buyer. in germany, all these sectors have the u.s. as their top client. in france, there's only one. that leaves us more exposed. kriti: the argument against that, there's defense exports for the u.k.. does that apply here? >> we've spoken to a couple of lawyers who mentioned that it would be very unlikely that the u.s. would carve out specific exemptions for sectors like pharma. that still leaves those sectors exposed. kriti: walk us through the retaliation here. something we talked about with europe, mexico. can the u.k. do anything to say, we don't like what you are saying? do they have their hands tied? >> there have been media reports this week digging to the fact that the u.k. could actually

repurpose some of eu's tariffs against the u.s. from the previous trump administration. those would include tariffs on goods like harley davidson motorbikes or levi's teams -- teens. it's clear that the u.k. would very much rather avoid having a trade war. we've had the bank of england governor andrew bailey really pushing for free trade and championing that. but it would be very difficult to reach a free-trade agreement with the u.s.. it's important to remember that. we know that discussions with the previous trump administration have reached because of major disagreements on issues like climate change, tariffs, government procurement. those are still very much happening, those disagreements. kriti: all right. walking us through that special relationship and potentially coming into peril. you can read health -- or full story on bloomberg.com. coming up, we stick with a european story.

france's budget standoff. what happens if marine le pen follows through on her threat to bring down the government. we are seeing it shakedown some of the stock market, the bond market. we talk about this as well. at the same time, you have germany. the debt conversation, the federal election as well. all of this will shake out to real volatility. even talked about the trump threat on eu exports. it is things giving holidays here in the united states. european futures are actually up. all of that coming up, next. this is bloomberg. ♪

kriti: good morning this is

bloomberg daybreak: europe. let's get to the stories that set your agenda. the biden administration weighing additional curve on semiconductor. ai memory chip sold to china. a crackdown on tech ambitions. the french government facing a potential no-confidence vote that could oust the prime minister as he attempts to pass the budget. french bonds and stocks feeling the effect. ftc launching a broader investigation into microsoft, looking into everything from cloud computing to ai, even cybersecurity ahead of the new administration. get acute -- get a quick check on the markets. it's thanksgiving holiday in the states. u.s. traders are off their desk. especially when it comes to the bond markets. they are closed around the world but the future story remains open with a caveat. light volume, light liquidity. that's why you see the green on the screen. euro stoxx 50 futures higher. the ftse 100 rate on its heels higher by .0 1%.

it kind of feels like the markets are on a little bit of autopilot despite the economic data that we got in the last few hours on both sides of the atlantic. more volatility in the currency picture. when you look at the currency stories the currency story see tier four overhang. euro-dollar coming into a 105 handle weakness in the chinese yuan. but straight in the mexican peso. that's not necessarily because of the conversation that happened between the president. it feels like a retracement of some of the weakness we've seen in the mexican peso. we dive into the hours ahead. brent crude very low volume, very light liquidity trading shy have a 73 handle. i want to get to earnings moves -- earnings news. one of the big tear conversations will be in the drink maker space. the full-year organic revenue coming from 15% to 18% of a drop. the estimate was a drop of about 12%.

a worse drop when it comes to that organic revenue. operating margin coming in from a full year between 21% to 22%. seeing potential pain when it comes to these numbers. we will have to see what happens when you get more of a signal from what the impact on potential tariffs may look like. we will bring you those headlines as we get it. let's stick with the french story. investors in france watching a key budget vote in parliament. yesterday the french spread between their 10 year and counterparts move close to turning negative for the first time since 1990 eight. we've already seen it happen. it only on the agenda down the road. the french prime minister warning of a storm in financial markets. if his government spending cuts are suspended. i'm pleased to be joined by the founder of alpha value. a pleasure to have you on the program. thank you so much for joining me this morning. let's start with the market

reaction. talk to us a little bit about just how much turmoil we could see given that those spreads haven't really closed since we have the first budget freak out earlier this year. >> i think it's a lose lose situation. we know that the bargaining process, which led to an ongoing definition of what could be a budget for 2025, has been so ill managed that there is not enough in terms of spending cuts were not enough to bring the 2025 budget to its insurer target, which is a 5% budget. markets are recognizing that. the parliament is said to have a vote of no-confidence, therefore we are back to square one. that means redesigning a budget. that brings the french class on

the budgeting process into an agenda, which is out of control. practically spending will continue to grow. taxis may go up thanks to inflation but it's if we end up with a wider deficit even in 2024. it was 6%, unexpected up to last summer. by and large the news is only negative. the surprising thing is that markets took some time to react to this ugly outlook. mccready: it's straightforward. the fact that you see austerity is back in vogue from a lot of governments around europe. we may get the first taste of that on pension reform. is this something that people are responsive to and it comes to trading the french story?

critics if the question is narrowed down to this pension issue, is there going to be a more relaxed system, i don't think it really matters today. we were speaking of adjustment at the margin, the real issue is the lack of stable government looking forward. it's more of the political counter, which is on the table. from a debt market standpoint it has been clearly indicated. it's actually a surprise that it stopped at 85 basis points. it has all the potential to widen up. kriti: we talked about how it's passing greece. italy down the pipe. it's already performing worse. i'm curious if there is any sort of light at the end of the

tunnel. if we get the spreads against german debt back down to levels we saw at the start of the year, what will it take for that gap to narrow? >> that's a hard question to answer. i would think the key point is for the government to give a clear-cut decision on the one single financial item. it shows a has a clear intention and we haven't seen any such thing. we were suggesting that it would be a very clear-cut statement about the willingness to start cutting the deficit. but this is mired it also to political issues. their most important question, i'm very sorry for that. kriti: i think everyone is trying to figure it out. i'll give you an easier one.

we've only been talking about the inefficiencies of the french government. arguably the european one as well. i'm curious about what the effects of the trump trade might be on france. we talked about how emmanuel macron has been very tough on the ira. the fact that the carrot and stick method, either way when it comes to the u.s. approach on europe, has a negative effect. what more can france do to maybe cushion itself or combat some of the tariffs that may be coming down the pipe from president-elect donald trump. >> if it is about more tariffs on pean gods, france is less exposed than the other european country because france doesn't explore that much manufacturing goods. when it comes to ira, that is not a negative for french companies because they did not

participate that much to the advantage that the ra was providing. i would say from a pure front of u.s. perspective, the outlook is not that negative and it could have been resolved. the broader issue is that the other countries in europe, typically germany, will not recover as much as they should have in the full front to the partner as germany will suffer. it's very much an indirect cost that we see with impacts of the trumponomics on the european countries and as a result on france. kriti: talk to us about the currency impact. what matters more for the euro, the french story or the german story? >> it has to be the chairman story. the euro is just the definition

of how strong the area is, which means how strong it is. how strong the ability to export is. it can be narrowed down to that sort of angle. kriti: a very straightforward answer. the founder of alpha value joining us talking about the dynamics in the french government. of course we do await that vote on pension reform. other stories making news around the world. france richest man is set to testify in a criminal court room today. the lvmh ceo saying he's completely unaware someone was trying to blackmail him. the case centering around a paparazzo who demanded 300,000 euros in exchange for photos of him with a woman who is now his wife. direct line insurance has rejected the 3.3 billion pounds takeover bid. it substantially undervalues the

business. they have until december 25 to announce a firm intention to make an offer or walk away. it's a second takeover bid projected by direct line following a proposal of the belgium rifle. the larger ikea franchise saw a sharp decline in full-year profit after a round of price cuts in tough economic conditions weighed on the bottom line. the furniture seller reported a 37 decline to $1.3 billion for the financial year through august. coming up, we will talk about the defense base. ukraine seeking more weapons and equipment to shore up its defenses against russia ahead of any possible drop-off in support during the trump presidency. that conversation is next. this is bloomberg. ♪

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kriti: welcome back to bloomberg daybreak: europe. today's big take we take a look at ukraine's attempt to fill the trump sized hole in its defenses against russia should they have to defend themselves without backing by the ally. we are joined by bloomberg's correspondent joining us out of brussels. a pleasure to have you. walk us through how much of a challenge it would be for europe to step up its military support if we do get that u.s. support out of the picture. >> there is no understating how much of a challenge it would be for europe to step up and pick up the part that the u.s. would leave behind. until now until since the beginning of the war, we can see the u.s. and europe have been roughly splitting the cake. they have been roughly splitting the burden of supporting ukraine, but it's clear that while europe has come up with

most financial aid, it's the u.s. that has been delivering the actual weapons and military equipment that ukraine so urgently needs. the u.s. is ultimately been providing intelligence sharing. it's a really big hole the u.s. would leave behind if it were to step down. kriti: walk us through that ramp up. what does it look like when it comes to actually acting on it. we heard about it in the draghi report and the eu commission and ursula von der leyen, how is it progressing? are we seeing signs that there will be a defense ramped up and it will bear fruit down the road? >> there is definitely an understanding and europe that something needs to be done and it's very urgent. how we get there is a different question and when we look at the estimates of how much europe would have to come up within the next decade, we are talking hundreds of billions of dollars. there is no clear plan with how to come up with that type of

money, especially when you look at a state or european powers are in, they have tight budgetary situations, domestic political turmoil. there is no clear path forward right now considering european countries defense industry is quite fragmented. it has been operating at low levels for the past decade, since the end of the cold war. it's clear that there will be a huge effort ahead. if not, i'm not clear how they will get there. kriti: we will leave the conversation there. fascinating reporting on something we are keeping a close eye on. a similar story and conversation is happening in the nordic region or country's have been among the most vocal about the threat of war on their doorstep that andrea was talking about. finland launched a website showing people how to prepare for any type of crisis, including how to last 72 hours in the event of a conflict or other crises.

neighboring sweden has begun mailing updated leaflets to households urging a greater emphasis on preparing for war. bloomberg nordic management editor, walk us through this. walk us through why european countries are stepping up the preparedness now and it has been a conversation for some time? >> it has not gone unnoticed that russia's war in ukraine really means it's not just in the history books on the primary job of the government is to keep it safe. this is really why governments are starting to prepare. it's not just that. there's an awareness that change will bring on extreme weather events, like the recent floods we saw in spain, and we have just come through a global pandemic a few years ago. this is the backdrop of all of the preparedness that was starting to happen across europe.

kriti: walk us through the other european stories here. how does this compete or compare with the conversation happening in brussels? click the eu it's going back to its roots. it was boring to safeguard peace and keep there's talk of a preparedness union. ursula von der leyen made a report on how europe should be better prepared and what they could learn from finland. countries are doing various things. sweden has sent these leaflets tousle.

denmark is thinking about what to do. encase power is out, how would you pay for groceries. the solution is enabling payment cards to people use to last for a week lithuania is doing work on stockpiling medicines that's an effort to put in 22 stockpile medicals and 16 eu nations. norway and sweden are thinking about stockpiling green for a rainy day. kriti: you talked about different countries and the eu story but finland has been a yardstick. for a global audience not familiar with the history, why is finland a crucial piece of this equation?

>> finland has history of conflict a period of the country is within the arctic circle. there is a history of famine. just 100 years ago there were still cases where people made bread out of tree bark because that was the only thing left to eat. there has been a long-standing effort to ensure there is enough food. organizing work seven going on since the 1950's. it's a conflict at the country is surrounded by water on all key sites. could be hard to bring in supplies so you have to be prepared. when people have been doing this for decades it built this mentality of preparedness. it is not alarming as many may cmac the story or read the story, it's more comforting for a lot of people to know that they are ready in case something

happens and they know exactly what to do. kriti: a terrifying situation and we keep a close eye in terms of how this develops them what this assistance in preparedness a looks like. we thank you so much for joining us this morning. i want to go to the other stories making news. we want to stick with the impact of united states. donald trump's picks for commerce secretary is among a number of the president-elect's political nominees targeted with bomb threats and a whole hoax phone calls. several cabinet picks and a face violent un-american threats to their lives and those who live with them. the fbi says it is investigating the incident. sticking with the new administration, donald trump had dinner with mehta ceo mark zuckerberg at the president-elect's mar-a-lago estate in florida. zuckerberg and trump had have a contentious relationship in the past and facebook band that then president in 20 the wake of the

attack on the u.s. capitol. however, the two men made amends with the mehta ceo congratulating trump on his recent election win. we should make the key point that elon musk has the ear of president-elect donald trump and he and mark zuckerberg don't get along. social media conversation to be discussed. plenty more coming up. we go back to the markets. stick with us. this is bloomberg. ♪

kriti: welcome back to bloomberg daybreak: europe. i'm kriti group the in london. we talk a lot about the tariff story and the slight volume in light liquidity. i think the highlight of today's conversation is what's going on in france because that's what has the potential to move these markets. i want to put into perspective of the kind of risk we are talking about. we are looking at the french

yield premium over germany. and we are all the way up at 86 basis points in terms of that spread. compare that to what we've seen in iterations of crisis. it's higher than the pandemic of 2020. it is higher than brexit avenue whether or not french sugar should not be a part of the european union. the themes are similar, does the budget in peril this idea of french borrowing, which is gone unchecked the last couple of years. even potential fines on the table from the european commission if they don't get their budget under control. this is why their conversation with the prime minister matters. he has to get the budget across the finish line and marine le pen may not let him do it or he might find that loophole seven marine le pen may end up costing him his job. there's a lot going on. let me show you what's at stake. i want to compare this to friends 10 year yield. we've already seen the premium for french debt is higher than

that even of spanish credit. it was a big pride of -- point of pride and some of the peripheral credits are seen as safer debts to the french counterpart. this is something that's crucial because now you see this happen with grief. this is valerie tytel's handiwork. it proves a crucial point. greek debt is now investment grade debt. they are growing in a way that may be the french counterparts all aren't. this is a bond story showing up in the equity story. that's by want to go next. this idea of the underperformance in the french benchmark is actually pretty brutal. we talk about it whether it's a tariff hangover china consumption story which drink makers and luxury names. maybe it's political overhang and this is where it shows up. the performances relative to the stoxx 600. this giant red bar to the downside goes all the way back to 2010. what happened in 2010. this idea of the recovery from the global financial crisis.

that's where you see most of the pain. that french had lagged relative to its peer. this is crucial that it's coming in the bond market, in the stock market. maybe not in the currency market. we had a guest earlier saying the euro was far more exposed to maybe the german debts break story. while we wait for what happens with the united states, the federal reserve and the german election, maybe some of this underwhelming we see in the equity story, the bond story could show up in the euro. 105 handle on euro-dollar. a lot to digest. anna edwards and guy johnson will be joining me in a few minutes. the opening trade is up next. this is bloomberg. ♪

anna: we are an hour away from the opening trade. here's what you need to know. the biden administration weighs additional curves on semiconductor equipment and ai memory chips after china meets the latest crackdown on beijing's techt