>> good morning. this is bloomberg "daybreak: europe." these are the stories that set your agenda. the yen strengthens against the

dollar as traders position for a possible rate hike from the boj next month at the sink time as a cut from the fed. marine le pen sets to push further demands for changes to the french governments budget bill after the prime minister dropped plans to raise taxes on electricity in a key concession. we continue to watch movements in french assets. and reports suggest iran will hold talks on its nuclear program and uranium enrichment plans today with european nations. we will have details on that story shortly. happy friday. european stocks have snapped two days of losses. led by technology.

that sector seeking relief trade to the upside. today searching for direction for european markets. possibly the inflation data out of the euro area later today will provide that direction. german inflation coming in cooler than expected. unchanged for the month suggesting there may be room for the ecb to go comfortably with another cut. that is being built into market expectations. keeping an eye on the pricing when it comes to the boj with inflation out of tokyo coming in hotter than expected. s&p futures as the u.s. market will come back after the thanksgiving holiday pointing to gains of .3% in a shortened day for trading. don't forget that volumes are likely to be light because of the holiday in the u.s. and portfolio repositioning towards the end of the month. cross asset, the focus on the

japanese yen given the strength coming through on that crossing through the 150 level. it did get to the 149 level on the japanese yen on hotter than expected inflation out of tokyo. orchids pricing in a 60% chance that the boj will go for another hike in this cycle. gold up .9%. a rally in the yellow metal. crossing over to avril hong standing by for us in singapore where there is an optimism filtering through the asian markets with a focus on china. >> we are seeing a gauge of stocks in the region slightly to the green things to the surge in chinese shares. this optimism is surrounding a softer stance that could come through from china. we see how china is extending tariff waivers on some u.s. goods.

there are a lot of expectations around stimulus. a lot of rumors to that end on social media. some officials are said to have met to does cuss ways to boost consumption. as you mentioned, it is about the yen as well as its gains against the backdrop of the tokyo cpi numbers. dollar-yen around the -- level before the numbers dropped. now at the strongest level against the greenback in a month. 150 is a key level. it is the leading indicator of nationwide trends and it coming in hotter is something that the boj once to see. if you look at the wage hike prospects, it looks pretty good. we were thinking about what we heard from the labor union or the prime minister for the levels we have been seeing on dollar-yen. we have been here.

this chart courtesy of mark cranfield shows you the slide in dollar-yen. in terms of the options space, you look at the cluster of strikes it is another level we will watch for next week. tom: avril hong in singapore, thank you for the optimism coming through. and the detail around the japanese yen and the strength there appeared let's get more context. let's bring in mark cudmore. what you make of the moves -- is this a rational move? they go again in december and it seems to be the thinking at this point. mark: i think it is a rational move in the yen and i do think the boj goes and december. the price and the market is 60%

that they will hike. i think that is reasonable. if you force me to choose i would say they will hike in december but it is not my conviction. i think 60-40 is a fair way to look at it. they are worried how many more chances they will get and given the tokyo inflation print is normally a good indicator of the national print. and as avril hong excellently outlined this shows promising signs. i think it makes sense we are seeing a yen rally. the dollar is volatile. where can dollar-yen go if the boj will hike? the dollar is its own wild component but i could see dollar again getting down to 147 in the next couple of weeks. i'm not sure dollar yen will go much lower after that. i don't think this is the start of a long-term trend. tom: but maybe 147 the next

level for the japanese yen. on france, there was a bit of relief around the edges interims of the selloff we've seen in terms of the sovereign debt. do you think that continues, has the selloff been overdone on concerns about the budget? >> i have no conviction on the short-term path. the more i look at this french situation, i don't see how it doesn't get fixed without going via crisis. it doesn't sound like the compromises that need to be made between marine le pen's party and another will result in a budget that the market is going to accept as being good enough. which means either they don't get a budget or they do one that the market won't like. either way i think the bond market reacts badly.

i have -- i do fear that by december or january we will see much more stress level in french bonds. i think it is only after we see the severe stress that we see france being forced to fix the situation. the parallel will be a slow-motion and less dramatic liz truss moment for the u.k. discipline the government cannot impose on itself. tom: we are still haunted by that liz truss moment in the u.k. the analysis around what we are seeing around the avenues again. -- around the japanese yen. staying on france, marine le pen's national rally is demanding further changes to france's government and the budget bill.

further concessions are being demanded from the kingmaker around this issue after the prime minister dropped plans to raise taxes on electricity in a key concession to the far right. let's get more with bloomberg's julia. where do we stand with the concessions with marine le pen and how much more the prime minister is willing to give up to get the budget across the line? >> as you said there was a relief rally yesterday on the assumption it was a breakthrough. now as we stand friday morning, it is not clear how much more they will have to give in or whether or not marine le pen is ready to make demand that are acceptable. at the moment we really do not know what is going to happen next week.

will the government fall or not? there are a few votes in parliament that will decide that. the truth is in the pudding as you guys say. at the moment it is a roller coaster. and for french financial markets, there will be quite some volatility because visibility is not good at the moment. tom: the lack of visibility is clear. mark cudmore saying there may need to be a crisis to force the issue ultimately. is marine le pen and her team, are they prepared to bring down this government or is there a political price for them as well to be paid if that happens that may constrain them on that front? >> a lot of commentators are saying this is a game of chicken between the government and worry le pen -- and marine le pen. for any political party the

endgame is to gain power. what is the best option for her? to appear as a responsible party and avoid a financial crisis for the country? or is it not to actually have some chaos, have a crisis and put pressure on emmanuel macron to resign? we cannot have general elections until the summer. so it is really a political game of thrones -- it is hard to read what is in the best interests of marine le pen at the moment. only she knows that. and whether they can make a compromise, whether it is in her interest to make a compromise and as we said earlier, may be a compromise is to week. and maybe if he survives and has a budget, maybe this in itself will be so weak that it will create so much tension on the

bond market that we will get a crisis anyways. tom: julian, thank you for joining us live out of paris as we continue to watch the horsetrading around the budget and whether the government does survive and the budget gets through. a crucial week for france. to the middle east where iran is expected to hold talks about its nuclear program with the u.k., france and germany. the european union will also take part in the meeting as a mediator in geneva today. patrick, what do we know about the talks and what can we expect from them when they get underway later today? patrick: iran is describing this as a brainstorming session. this is the idea to de-escalate after they iaea censured iran over its nuclear program. i think what it shows is that iran is feeling under pressure

in the region. we have had more than a year with direct conflict with israel could we have an incoming trump presidency that will bring an element of maximum pressure policy that we saw in his first term. and then we had the almost surprise conflict coming from the european side through that censure. i think it shows iran looking to de-escalate where it camp your the european side perhaps being the lowest hanging fruit in the crisis. if it can do that perhaps a can do you -- tom: linked to this, the russian president has warned of potential strikes on decision-making centers in kyiv using new ballistic missiles in

response to your cranes at attacks using -- using ukraine's attacks using western missiles. the reason i said they are linked is because europe is trying to pressure iran to reduce its military support of russia in that conflict. here is what else to be thinking about -- we get euro area and italy november cpi data after the inflation print out of germany came in unchanged which was unexpected. we get the bank of england's financial stability review. and today, we get a mix of the dovish side of the hawkish side and we will hear what they have to say after the french central bank governors said the ecb should be cutting potentially

more aggressively given the challenges of that economy. coming up, we will get the latest on the country's snap election in ireland from dublin. it is next. this is bloomberg. ♪

tom: welcome back to bloomberg "daybreak: europe." irish voters head to the polls today for a snap election. for more, we are joined by jennifer in dublin. why did simon harrison call the election early? what was the rationale behind that move? >> he came under a lot of pressure from within his party. his party has seen its support rise since he took a position in april. that was a big motivating factor.

the opposition party sinn fein has seen its support fade in the last year. and the government is in a position to have a budget surplus. in october they were able to offer what is described as a giveaway budget. a lot of tax cuts and one-off measures. i think there was a feeling that they wanted to capitalize on that budget. tom: i still love the contrast you have their in ireland with a giveaway budget as we look forward to what is happening in france and germany and u.k. as well. what are some of the biggest issues when it comes to this election? >> you mentioned housing. ireland is not unusual in the fact that it has a housing crisis. but it is particularly bad or chronic here. that is one of the big issues with a lot of debate about how

many houses need to be built and suggestions on how to fix that including even a suggestion to have a new government department of infrastructure. cost of living is also a big issue. and also particularly waiting lists around health care. we've seen politicians including simon harris being doorstepped by a lot of voters on the issue of health care waiting times. those are the three biggest issues. tom: how has the budget surplus played in to this election? how are the parties touring with the idea of potentially spending more? >> it has been a big factor. politicians in this election are in an enviable position and that they have money to back up the promises they are making. the budget surplus this year is approximately 25 billion and

that is boosted by the 14 billion from the apple ruling. that is a lot of money to play with. we have seen a lot of different solutions to fix the infrastructure issues that ireland faces including housing , energy and water. and then some of the one-off measure is. the party has said it will give 1000 euros to every newborn baby. there have been a lot of innovative and interesting ways that politicians have said they will fix the problems and put cash in people's pockets. tom: so may some more incentives for voters out there in the days and weeks ahead depending on who wins. donald trump looming large over global politics. as donald trump, in terms of his potential impact on the economy in ireland? >> there are a lot of concerns.

ireland's economy is open and globalized but a lot of the budget surplus comes from corporation tax receipts. most of them come from u.s. companies. with donald trump mentioning in his campaigns lowering corporation tax and tariff -- both of those would impact ireland's economy. politicians have raised a lot of concerns. and the government parties mentioned this quite a bit during the campaign. they have talked about ways to try to protect the economy. the government a few months ago started a sovereign wealth fund with some of the corporation tax receipts. that is one effort they are taking to try to protect. but it is a big concern here. tom: really excellent context. jennifer from dublin on the elections in ireland.

our -- are trucks on track to go green? we look at commercial vehicles and the climate coming up next on bloomberg. ♪

>> cars are integral to germany's identity. 87-year-old volkswagen embodies this on a global scale. >> it employs 680,000 people around the world and it has dozens of production locations. millions of people, workers in other industries are reliant on the business they get from this company. >> it owns several household names. some are wealthy all others this end from the principal demographic.

>> there was a big celebration in germany. >> the idea of the people's car was that every individual would be able to afford one. >> decades later vw's portfolio generated 320 billion euros in sales. 7.5% of germany's gdp that year. tom: bloomberg's oliver cromwell on vw's woes. you can catch more of that documentary. focus on cleaning up passenger cars but 40% of road emissions comes from commercial vehicles. collin joins us now from oslo. talk to us about fleets and they got an xavier becerra adjusting to the need for electrification.

which technology is in the lead, batteries or hydrogen? >> batteries. this market has grown quickly. we are familiar with the passenger car. 20% of global car sales are now electric. for heavy trucks it is only about 2%. five years behind the passenger car. but they are rising quickly. in china you are at 6% or 7%. in norway, 10%. it is an electric story. there was a lot of talk before about fuel cells. now they are playing a small role you see the production of battery electric trucks in this segment. most batteries are charged as normal but some can take a swappable battery. tom: fleet operations ark capital sensitive. to what extent will cost be factored in?

our electric trucks cost competitive yet? how close are we if we aren't there yet? >> commercial vehicles in the medium-sized segment, in the urban region, those are already reading cost competitive -- those are already meeting cost competitiveness. we are starting to get there. some of the other bigger segments, that will take longer. you need battery prices to come down further and you need to be in places where electricity prices are relatively low. tom: really interesting breakdown of what is happening in the trucking fleet space around electrification and the progress being made. breaking lines crossing around unicredit and credit agricole.

the ceos will be meeting in paris according to reports from a newspaper in italy. as unicredit makes that approach to benko bpm and its own market and in commerce in germany. credit agricole also has a stake in banko bpm. so we will watch that story and see if we get more details on the ceos meeting in paris. will retailers cash in on black friday? this is bloomberg. ♪

tom: good morning. this is bloomberg "daybreak: europe." these are the stories that set your agenda. the yen strengthens breaching 150 against the dollar as traders position for a possible rate hike from the boj next month at the same time as they cut from the federal reserve. marine le pen demands more changes to the french budget after a key concession on electricity taxes. and reports suggest iran will hold talks on its nuclear program and uranium enrichment plans today with european nations. checking in on your markets. european stocks snapped two days of losses and today are looking for direction. ftse 100 futures pointing higher by .1%. s&p futures pointing to gains of

.3%. a shortened trading day in the u.s. nasdaq 100 futures looking to add 94 points. there is a move into u.s. treasuries. treasuries bid right now, for 21 on the u.s. 10 year. there is a bid for u.s. debt at this point. no trading yesterday and treasuries. the yen in focus. 150 currently. the japanese yen, 150. we will see if it gets to the 147 level with expectations boj could go with another hike in the cycle in december. gold rallied in the session up by 1%. it is black friday. retailers in the u.s. and elsewhere hoping to see that most shoppers on record. i am joined by erin brookes, the

managing director at alvarez and marsal europe with a particular lens on the u.k. this black friday leading into cyber monday. what are you looking for, what trends are you expecting to see? erin: in the u.k. we had a soft october after a quarter of growth. it was related to consumer confidence dropping due to concerns about the budget and their own ability to spend their personal finances. going into november with nervous is on how the start of p trading what look. since the start of november we have seen that consumer confidence has improved three points on the index. -21 up to -18. the search for black friday deals have been strong. our prediction is that we will end up with a higher degree of search interest in black friday deals since 2020. tom: what are you seeing in

terms of different categories? and are they trading down? erin: black friday has always been about the big expenditure paces. -- expenditure pieces. given pressure on consumer confidence, search interest in those items has come down. categories we see an increase in is clothing and beauty. tom: what about across demographics? are we seeing a marked change in terms of the spending power of different segment of the population -- segments of the population? erin: from a demographic perspective, there is still a concern across the board about expenditure. the budget has been built to be able to spend a lot of money on government initiatives and that

has hit everybody across the board including consumers across the board. concerns for everybody. in terms of other trends we are seeing, i think we will see continued heavy discounting this week and up to december. tom: retailers are able to do that while protecting margin? they want to get consumers into the stores or online but there is the margin story as well. erin: retailers will plan black friday to build margin in. they will have special offers on items they build to attract consumers to their website and stores. and searches for black friday deals in store has come out quite strongly as well.

that looks like a healthy high street black friday. the other thing to think about is that retailers are under pressure to shift stock at this heaviest trading time of the year. managing discounting and making sure they are not in january with a bunch of inventory to go on sale is a good way to think about it. tom: focusing on today, cyber monday and then the rest of the holiday season, how does the rest of the season look like and how much will today be a litmus test? erin: our prediction is that today will be strong. this year black friday falls five full days after last year's black friday. cyber monday falling in december tends to be the point where consumers start thinking about buying gifts for their nearest and dearest. i think there is a real opportunity for black friday to be strong.

because we are getting so close to christmas especially with online. consumers will not want to be waiting until the last minute to assume that next day delivery will be delivered. tom: the budget uncertainty is behind us. consumer sentiment has picked up at least around the edges. what is your estimation in terms of how the u.k. consumer evolves over the next 12 months? erin: i think january will feel very tough for the consumer. i think for retail businesses as well. it is hard to see a super positive outlook into 2025. what is wonderful is the retail executives in this sector in the u.k. has proved resilient. they follow the consumer and adapt. i think we will see another change in consumer behavior owing into next year to which retailers will have to adapt to to be successful. tom: is it the consumer putting

more scrutiny on their purchases? erin: because of employers contributions, it is one of the largest employment sectors in the u.k., retailers, retailers are telling us they can either deal with that headwind in terms of cost savings or pricing will have to go up. i think that creates nervousness. we were just feeling inflation, off. i think that will lead us into next year. tom: erin brookes, thank you for the analysis happening around black friday and pushing into next year as well. other stories making news -- romania's top court has ordered a recap of sunday's first-round presidential election following allegations of irregularities and cyber influence. the court claims a candidate benefited from massive exposure

and preferential treatment on tiktok breaching electro laws. and tiktok disputes the allegations. sweeney has sent china a request for full cooperation regarding a commercial vessel and its potential involvement with data cables in the baltic sea. they say it implies no accusation against beijing. australia's government has passed a controversial law regarding under 16's banning from social media. the ban has sparked criticism from big tech but also academics who argue it is ineffective and flawed and may drive kids to darker, online spaces. the u.k. parliament is handing and holding a landmark vote on assisted dying today.

mp's will allow -- will decide whether to allow term the leo patients with less than six months to live the choice to end their lives. coming up, why our next guest things the recent strong growth numbers from the u.s. don't actually tell the full story. we get the view from raymond james next. this is bloomberg. ♪

tom: welcome back. happy friday. european inflation is on the agenda as we look ahead to november is cpi readings from france. germany remained unchanged supporting arguments for the ecb

to keep cutting rates. let's bring in the bloomberg economic editor. what are the key data points to watch for as we track europe's economy today? >>, as you mentioned the main number today will be euro area inflation. 10:00 in london. before that we got the french number and with the euro area number we get the italian number. we also get the ecb's survey of consumer inflation expectations. it is lagging. one of the elements the ecb is looking at is not just what the inflation numbers are doing but how consumers feel about them. that is an important data point that we look at as well. tom: i mentioned the ecb and how the data will tie into the thinking around the ecb. what is the latest thinking in

terms of how the ecb is looking ahead as we factor in or start a factor in the move it is now being priced then by the markets when it comes to december? where are we in terms of the future right path for the ecb? >> today's inflation number will be an uptick. the ecb will look through this because they have expected this. inflation will be weaker than what the ecb predicted in september. regarding the rate path, there will be a cut in december. most policymakers have said rate cuts will be gradual suggesting a standard 25 basis point cut. if you have said they will have to go into expansionary territory. that could suggest 50. but given the threat of trump tariffs coming sometime next year, the gradual approach might

win -- the gradual element is one policymakers have stressed. tom: they have stressed the gradual nature of the rate cutting cycle expected into 2025. fantastic context. we can hear the bells ringing in the background. let's get more in terms of how the markets are positioning around the central banks globally. let's bring in sunaina sinha haldea from raymond james. we will talk earnings and private equity and whether there is dry powder. let's talk central banks. we have heard from the central bank governor of france striking a dovish tone. he was making the case that may

be the ecb needs to go further than some are expecting given the week nature of european economy. markets are pricing in below 2%. how do you see the rate cutting cycle evolving for the ecb? sunaina: i think the ecb will lean dovish. one of the most concerning data points to me was the pmi data which was at close to 48. that shows a contraction. compare that to the u.s. where you have pmi's well north of 52 heading to 54. the divergence of the european union and other major markets is becoming more pronounced. i think the euro zone, the ecb folks will have to get a more dovish tilt to try to rectify what is happening in the economy. and if they don't, divergence will become more pronounced. tom: how should your clients be

thinking about that potential, significant policy divergence? that could be a key theme for the markets. sunaina: if the euro zone is cutting rates, that will make borrowing cheaper which lends itself well to anyone that wants to add leverage for add-on acquisitions or anyone thinking about picking up eurozone companies that will impact valuation. don't forget the divergence will impact the euro-dollar which it has already. tom: will we get to euro parity? sunaina: i think all of those things, as you fold in the macro picture, i'm sure you will ask about terrorists at some point but it adds to potential uncertainty as well as opportunities when you think of the valuations. tom: one of the guests on our

show earlier this week said maybe something underappreciated by more -- by markets is that corporate could be preparing for terrorists. and first court -- four tariffs. and in those short to medium-term could benefit european corporate's. is that something markets are under appreciating? sunaina: yes and the fact that every board i've sat on had the trump affect on its agenda for its november or december board meeting. there is a rush to get ahead of whatever may be coming down the pike and that means moving parts of the supply chain to the u.s. as you saw from lagarde's statement yesterday. moving your strategy to a more u.s. centric approach to get ahead of what might be coming. to answer your question on

tariffs, i think it is hard to predict how and when they get implemented. china is the highest likelihood where they will first hit. but what happens in canada and mexico because of how difficult it is to unwind through nafta. and sing in europe. you will have companies getting ahead of the curve. and then what happens with currency effects and rate of facts -- and rate affects. is there a clean trump tariff trade at this point? sunaina: no where outside of the china market. i think if you are playing china-u.s. you have a higher read then in europe. it remains to be determined. you play what is happening in europe for the next few quarters.

and plan long-term accordingly to make sure you have access to the u.s. market. tom: i want to put a pin in that view around the u.s. do you want to be rotating out of large cap u.s. equities into small caps on expectations you get tax cuts and deregulation? how convinced should we be around that theme? sunaina: the data around the rotation today looks strong. 70% of the u.s. gdp is around the u.s. consumer and the u.s. consumer is strong and healthy. and we continue to see a tight labor market. those are all signs of a healthy u.s. economy. the rotation into small and mid-caps make a lot of sense today. the u.s. economy looks incredibly strong. today the bet looks good including the d regulation and loosening up of credit. the other part of the market that is fascinating is the

all-time tightening of credit spreads. it has never been as tight as this. it shows the expectation around the health of the u.s. consumer and its ability and the ability of companies to borrow and it remains bullish. tom: i want to go back to europe and a pickup in acquisition activity if we get more pronounced rate cuts from the ecb which is your expectation. talk to us about how much dry powder equities have on the sideline now. sunaina: i think deal activity is going to pick up meaningfully. think about where we have been. 2023 deal activity king down meaningfully because of the increased rate cycles around the world. and there was uncertainty in the beginning of the year. deal activity has picked up in 2024 but nowhere in near what it should have been. all of that is behind us.

what has needed to be known is now known. there is now the time for them to get on the front foot when it comes to buying main platform acquisitions and for companies to do add-on acquisitions. i think that will be an interesting couple of quarters. the last thing i would say is 1.7 trillion dollars is the answer to the amount of dry powder in private market vehicles globally. tom: 1.7 trillion dollars of dry powder sitting on the sidelines for now. really smart. sunaina sinha haldea on some of the key themes for the markets as we look to next year. global head of financial private capital advisory from raymond james. a headline around hungary and the appointment of a new central bank, and her. viktor orban, the prime minister, has tapped his finance

chief to be the next governor of the central bank of hungary. and this is the front runner, this person had been the front runner so it is not a big surprise. the front run or will be taking charge of monetary policy. he has been tapped by viktor orban for that role. he is currently the finance chief. we check in on europe -- not a huge move but a change at the top of the central bank for hungry. please stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg "daybreak: europe." context around the cac 40 that had a decent thursday.

when you compare it to the performance of the benchmark stoxx 600 in europe, it is the second worst performance versus that benchmark for the cac 40 in about a decade going back to the formation of the euro. because of the concerns around the politics of france, the budget and we see that russell continuing. the pressure has been felt. the cac 40 is down 2.3% in the last 30 days versus a gain for the benchmark. we will see if the underperformance continues. china is a factor given the exposure around luxury and cosmetics. mark cudmore is saying that country will need to face a crisis before they get that results. the underperformance of french equities. have a quick look at the other asset, the japanese yen in focused today breaking through

150 level. the only g10 currencies that has outperformed the dollar since the election of incoming president trump your the strength coming through today. the inflation print out of tokyo today coming in hotter. the boj will have space to hike at their next meeting, a 6% chance. mark cudmore sees 147 in terms of the japanese yen. why does the next level for the japanese currency that has shown that strength on expectations of the boj can go again with at least another hike in december. stay with us. this is bloomberg. ♪

♪ >> good morning from london i'm kriti gupta. here's what you need to know.