>> good morning. this is bloomberg daybreak: europe. these are the stories that set your agenda. asian stocks slip ahead of today's key u.s. inflation data. one week from the fed's final decision of the year. israel steps up airstrikes and sends troops deeper into syria, saying it has now destroyed most

of the former assad regimes military capabilities. the united states ways new tougher sanctions against russia's lucrative oil trade as it looks to restrict the kremlin's war machine. happy wednesday. it's u.s. inflation day. the countdown to that data point, investors globally focused on that number, what it will mean for the federal reserve. that decision comes december 18. european futures pointing down by two tense of 1% after dropping five pence yesterday. euro stocks off at the end of the session. ftse 100 futures pointing lower by 32 points. s&p futures then after the losses of yesterday, pointing higher by 1/10 of 1%.

nasdaq futures adding 25 points. let's look cross asset. you could have seen some readjustment across the treasury curve on that data point. broadly, headline inflation expected to come in at 2.7% for the month of november year on year. that's a slight tick up. core inflation in focus as well. for 26 on the west benchmark. 423. 105 on euro-dollar. softer in the single currency so far in the session. gold at 2600 90. don 1/10 of 1%. the yellow metal could move around the inflation story in the u.s.. for the restrictions on russian oil could be coming from the biden administration. up 7/10 of 1%. let's check in on asian markets right now. once again, the ion china. avril: we are keeping an eye on that central economic work conference underway in china. the sense of whether we are

going to see clearer concrete details on stimulus after the politburo's forceful stimulus signals earlier in the week. given how markets have been disappointed before, certainly we are seeing that sense of uncertainty and skepticism in chinese stocks. they really been struggling to clock gains today. we are also keeping an eye on the rest of asia. the u.s. cpi print. worth noting that the trading volumes are lower than a typical this time in the session. korea is clocking gains. you have a bit of a technical rebound after the slump, given the political turmoil in the country. in terms of sectors, tech is not doing well. tsmc down for a second day, despite solid sales. this is against the backdrop of the sector increasingly being drawn into competition between the u.s. and china. as i say, for chinese stocks, they are struggling. where we are seeing gains are in

bonds. just a day ago, we saw the 10 year, the biggest gain in about four years. mark cranfield is making the point that yes, the fundamentals to support the view from longer term. these yields to continue declining. that doesn't mean that in the short term, traders are getting ahead of themselves. if we see some form of policy disappointment, we could also see a sudden reversal, the cell the fat reaction in the market. keep that in mind as we keep an eye on assets in china. if we can talk through what we are seeing on dollar-yen. next week is not just about the federal reserve. it's also about the bank of japan. the central bank of japan has been sending pretty confusing signals to the market recently. earlier in the week, it announced that deputy governor would be giving a speech to local business leaders ahead of the january meeting.

something, speculation is that it's a way for policymakers chickens -- communicate a hike in january. the beds of the december move have proceeded against the backdrop we are seeing. a bit of weakness in the japanese currency although it firmed earlier in the session after a harder than expected inflation print. tom: looking ahead to that boj meeting and the decision at hand for officials and the governor next week out of japan. also if you and a finger on the pulse of what's happening in terms of beijing. crucial annual economic meeting that's taking place and wraps up some point tomorrow. thank you very much indeed for the market check out of asia. looking ahead to u.s. cpi later today. forecasters expecting the data to show a fourth straight month of firm increases in prices. for more, let's bring in bloomberg's valerie tytel. what will you be looking for when it comes out of the -- when it comes to the data?

>> we have this on the fed meeting to cross until we close the books on 2024. the market will be keenly watching the core cpi metric in today's reading. this 0.3 month on month we are expected to get would be the fourth in a row if we do get that 0.3. that's important because a 0.3 takes us farther away from the feds 2% target. if you flip on, we can talk more about this core reading. the headline is expected to tick up on an annualized basis to 2.7. it will be this core reading which could potentially shift the dial on the fed. many out there think that friday's labor market report does cement that fed cut next week. we would have to get a substantial upside reading in this core metric to maybe throw that fed cut in december into question. many of us out there are also looking at this data point as perhaps something that could debt this equity market enthusiasm. we have seen small business confidence surge.

consumer confidence also surging postelection. what's also been surging is inflows into u.s. linked etf's. it's been a record year for those inflows. they cross the $1 trillion mark just last week. we are keenly awaiting this cpi report and the fed meeting next week as something that could possibly dentist equity market enthusiasm before trump takes office later in january. tom: a trillion dollars of inflows into u.s. etf. thank you very much indeed. a reminder to focus on the core part of that inflation data when it drops later today in terms of how it could shift if at all the views around the fed. switching focus right now. israel has stepped up its attacks on military sites in syria. hundreds of targets from airfields to weapons production sites. sending troops deeper into the country. the israeli armed forces say some 70 to 80% of the former regimes military capabilities in syria have now been destroyed.

let's get more from bloomberg horizons middle east & africa anchor joumanna bercetche. what more do we know about the israeli strikes and the rational behind them? joumanna: 300 sites have been targeted by gets really are forces over the last 24 hours or so. they've been targeting key military sites. they say they've been targeting chemical weapons warehouses. they've been targeting weapons and weapon stockpiles including some of those surface-to-air missile launchers. in addition to that, also key airbases. not just around damascus but around the country, even on the coastal areas as well. per some of the local reporting and also per the idf, around seven to 80% of serious total military capabilities have been wiped out. some reporting suggests that their entire air force has been wiped out as well.

israel going after key military targets and what the prime minister has said is that they have no intention of meddling in syria's internal affairs but they intend to do whatever is needed to guarantee security. the concern is a trick you later by the defense minister yesterday is that they want to ensure that these key military infrastructure sites don't fall into the hands of what they describe as extremists, some of those more radical groups. they are doing it with the purpose of securing the borders once more. but in return, some of the key arab states, saudi arabia, egypt, have massively condemned the actions that israel have taken because they deem them to be capitalizing on this moment of weakness for the syrian transition. the government was 20 -- with many questions ahead. they say it is a violation of

international law. tom: where does this all leave syria's security situation? what are pretty acute economic and political challenges ahead for the rebel groups who now leave that country. joumanna: yesterday we found out that the leader of the transitional government is going to be --. he's going to be the interim leader until march. that's the plan. a bit of an interesting image yesterday because it was very peaceful transition. you had the new leadership alongside new potential cabinet members sitting alongside former cabinet members of the assad regime, essentially handing the keys to the castle as our colleague has put it. which is interesting because many of those are very closely associated with the regime that pursued a regime of technical ship -- dictatorship but there they were sitting next to the new interim prime minister. so far, the transition has been peaceful.

you talk about the massive road ahead. 90% of the syrian population are living below the poverty line. 30% in extreme poverty. you talk about the huge amount of interior -- humanitarian assistance that's needed. refugees. 6.5 million refugees. many of them looking to return back to the country. it's a very long road ahead, politically, economically. as it stands right now, hts, the main political group representing this government, still labeled a terrorist organization by the u.s. and other foreign powers. tom: 6.5 million refugees in acute poverty. some of the key challenges facing syria. our horizons middle east anchor of course, thank you. here's what else is happening today. u.k., data. u.s. inflation data print that we bring, breaking down for you at 1:30 p.m. u.k. time.

mark that on your calendars. later today on the oil front, bloomberg reporting about potential additional measures restricting russian oil flows. what the opec monthly oil report drops later today. on the earnings front, 20 minutes time out of europe. then you have the consumer retail story of macy's. those earnings dropping before the market stateside. a touch on the consumer in the u.s.. you can get a roundup of the stories you need to know to get your day going on today's edition of daybreak. coming up, the biden administration mulls tighter sanctions on russian oil exports. just weeks ahead of trump's return to the white house. more on that story, next. later, workday is unveiling new features for its ai platform. we speak exclusively to the companies ceo. that's at 6:30 a.m. u.k. time.

this is bloomberg. ♪

tom: welcome back. the united states is weighing new cautious sanctions against russia's lucrative oil trade, looking to squeeze the kremlin's

war machine weeks before donald trump returns to the white house. let's get more from bloomberg's bill ferris. when we are talking about russia , key questions then. what possibly more could this biden administration do, given they put restrictions in place on the oil trade of russia? what is the logic? bill: yeah. so the u.s. has long since the start of the war band oil imports. they are reportedly looking at trying to do more to prevent russia's oil exports. so that could involve going after this dark fleet of ships that has arisen in the wake of these sanctions to carry russian crude. mostly to places like india and china that are still willing to buy it and aren't too worried about the sanctions regime. there's also a chance they could go directly after their ships in the dark fleet. they could even have perhaps the u.s. military try to intercept

some as a warning sign to other captains, other crews out there willing to take this oil on. we are trying to get more of those details but it does seem the broader purpose here is to try to do as much as possible to squeeze russia's economy, to squeeze its revenue flows before donald trump takes office and may try to seek some kind of an agreement, a truce between russia and ukraine. to try to get ukraine as most leverage of possible heading into potential talks next year. tom: what does this mean for countries like india and china? the biggest buyers of russian oil. to what extent does this make us a -- this more complicated effort from the biden administration? bill: it's going to be a very tough needle to thread for the biden administration. the u.s. has in many ways look the other way as this dark fleet of tankers rose to supply india

and china. the benefit to the u.s. of allowing that to happen is that there was less of a spike in energy prices and that kept fuel costs at home domestically in the united states lower. those prices are lower now than they were and there's no presidential elections of the biden administration feels like they can take a little bit more of a gamble. but if they do anything that makes it -- that has sanctions hitting indian companies, chinese companies more directly, that's going to become much more of a geopolitical problem for both the biden administration and the incoming trump administration. tom: before we let you go, we also have an update and more action from president biden as he works through his final weeks, which is to block the sale of u.s. steel to nippon steel. not a big surprise. what do we know then about the details on this and the impact potentially?

bill: well, this deal has been under review by the committee on foreign investment in the united states. they are expected now to pass a recommendation to the president just before christmas. around december 22, 23rd. that gives president biden about two weeks to make a formal decision. he's been against it the whole time. but it does look like there will be something done within this administration, that it won't drag out. $14 billion deal has been at risk from the beginning. there was some question about whether the biden administration would kick the can and let a final decision, during the trump era. that doesn't look likely to happen now. tom: ok. bill ferris, thank you very much indeed. wrapping up those key stories for us on russian oil and u.s. steel. some other stories making the news this wednesday. donald trump says his administration would help expedite permits including environmental approvals for

those investing at least $1 billion in the u.s.. trump did not provide any details about the steps he would take to help investors secure the permits to fast-track projects. any such effort is likely to face hurdles at the state and local level. trump has picked andrew ferguson as chair of the federal trade commission. the political charge role is currently held by lina khan. trump says his pic has a proven record of standing up to big tech censorship and supporting freedom of speech. ferguson is one of two republicans at the five-member antitrust and consumer protection agency. the suspects in the murder of unitedhealth group ceo is fighting being sent to new york to face charges. potentially setting up a long legal process. luigi mangione faced a court hearing in pennsylvania where he was arrested on gun and fake id charges. his lawyer says the 26-year-old

will contest any extradition request. the judge denied bail. he has to face court again on december 23. coming up, the dutch finance minister is pushing for eu street me -- scrutiny of france's budget plans. we bring you that extrusive interview, next. this is bloomberg. ♪

tom: welcome back now. the german chancellor has suggested lowering -- to help with persistently high inflation. he's running for a second term in an election expected in february and said he's in favor of reducing the sales tax on everyday food products from seven to 5%.

france's president is said to be working on piecing together a coalition of moderates to govern until his term ends in 2027. emmanuel macron wants to free the government from the stranglehold of national rally leader marine le pen. he's also expected to name a new prime minister within 48 hours. after michel barnier was toppled in a no-confidence motion last week. the dutch finance minister says the political chaos in france does not mean the country's budget should escape european union scrutiny. in a wide-ranging exclusive interview with oliver kruk, he discussed the market fallout from the recent drama in france. >> the challenges are quite big that they are facing. everyone is aware of this. i talked to my colleague, the minister of finance in france. he knows it.

politically, it's difficult to get support for that. i do see very much a committed government in order to get government financing back in control. >> another issue is the trade deal that was just signed on friday with ursula von der leyen pugh get the netherlands has been quite concerned on some of the issues in agriculture. what is your position? are you ready to oppose the deal? >> we don't have a position yet. i haven't seen the final agreement. i think it is published today. we will study it and come to a position. >> have you been talking to your friends counterpart, the italian counterparts? they are the ones who are raising the greatest amount of objection? >> it's not a big topic yet. everyone is waiting for the final agreement. >> what are your hopes for the relationship with the united kingdom going forward? do you see any concrete paths forward there? >> i think it's very good that rachel reeves, who was here in euro group, made a statement.

she wants to restate the relationship. she's looking for cooperation which i embrace. the u.k. is an important partner. it's a neighboring country. we share a lot of interests in security and economics. i'm pleased that they are looking for cooperation. the discussion was also about tariffs. tariffs her trade. -- hurts trade. i reminded them, if you don't want tariffs, you should join europe. >> tariffs is another one that's present in our minds with the presidency of donald trump beginning again in january. is this a conversation you are having about strategizing about how to address tariffs at the eu level? this is one of the big concerns going forward for the european economy. >> this is more like a way to see -- wait and see approach. the new government has to be installed. the new presidency. we haven't seen any proposal to get. we won't speculate on that. i always look at the european internal markets.

the imf recently published an interesting paper. if you compare internal markets to tariffs on goods, it compares to tariffs of 40% still on services, 100%. everyone has more free trade. we are worried about corporations. lower tariffs and look at the internal markets. there's a lot of work to do for europe by itself. tom: that was the dutch finance minister. stay with us for more discussion about the outlook for europe. the polish finance minister joins us at 7:30 a.m. london time. stay tuned for that conversation. to asia now. south korea's president looks to fight on rather than step down early. investigation steepen into his martial law declaration. according to a local newspaper report, yoon has rejected the idea of quitting before the end of his term.

korea's opposition says it will seek another impeachment motion this saturday following last weekend's failed vote. coming up, we speak exclusively to workdays ceo on their ai features. how they look to monetize some of those products. what the outside could -- upside could be for revenues and their push into the european market at a time of tepid eurozone growth. that's coming up. 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.

tom: good morning this is bloomberg daybreak: europe, i'm tom in london. these are the stories that set your agenda. asian stocks slip.

today's key u.s. inflation data one week from the fed's final decision of the year. israel steps up air strikes and sends troops deeper into syria saying it has destroyed most of the former assad regime's military capabilities. things going from bad to worse. london's ipo market with the value of listings this year trading luxenberg and omar. let's check in on the markets. european markets dropped about .5% yesterday. eight straight days of gains. european futures lower by .1%. some holding pattern setting in the head of the key u.s. inflation data on the headline basis for the month of november expected to take up to 2.7%. that data will drop later today and could rewrite expectations are on the fed. markets pricing at 80 5% chance that the fed will cut again on december the 18th.

european future softer. ftse 100 lower. s&p futures pointing to gains after softness yesterday ending the gains down. nasdaq 100 futures point to the gains of 34 points. let's flip the boards and look across asset. we look at euro-dollar. we look at treasuries, the u.s. ten-year. yielding you for 23 euro-dollar at 105. go unchanged and unfazed as we lead up to inflation prints. yellow metal brick getting a lift. bloomberg reporting that the biden administration could be considering further restrictions on russian. lines crossing when it comes to the earnings story. the company that is done so well in terms of the stock performance year-to-date up 14% year to date. here are the details in terms of the nine month e bit coming through. it submits versus the estimate. you're getting a print of 7.9 7 billion euros. the estimates had been for just above 8 billion euros.

so it is a slight mist there in terms of the first nine months for them coming and just shy of a billion euros. estimates had been for about 8 billion euros. they now see sales at a constant fx rate between november the first and december the ninth up 9%. and again, the details in terms of the effects challenges we are going to be looking for, this is the stock that has performed very well year to date. up 14% year to date. the expectation had been they come through with a solid set of numbers. coming in at five .67 billion euros. that is slightly below the estimates of 5.8 billion. a bit of a mess for a stock that has performed very well year to date. a sock to watch for you at the open. now to artificial intelligence and they have rolled out new

features today from its ai platform. the updates are aimed at helping managers access employee feedback, quickly making it easier to make decisions and increase team engagements. comes as the company sales finance offer is set to join the s&p 500 later this month. exclusive conversation is workday ceo who joins us from amsterdam. and we get to why that is shortly. thank you for joining us. a big week for you and the team given these updates and expectations joining s&p 500. let's start with the ai proposition. new tools, new products for your customers, what does it do, what are you modeling a terms of the revenue uplift for workday as a result for some of these new products. >> first of all, good morning, is great to be with you on your program. as you said, i'm churning you live here in amsterdam at our annual user conference call

rising. we have a record attendance of over 5000 people joining us of which 900 of those other people or partners. we have a tremendous amount of energy right here in amsterdam today. and yes, we are speaking a lot about ai, and we are talking specifically about workday's next-generation ai platform called illuminate. and we are monetizing it. we have taken a multipronged approach for monetizing ai. our ai's bill deep into our platform, it's not bolted on. we are winning time and time again because of our ai capabilities and the platform. our monetization shows up in our win rates in our competitive advantage that we have. at the same time we are rolling out new solutions, specifically agents. an example of an agent is a recruiter agent. a recruiter agent is something that allows recruiters to see a significant improvement in productivity. up to 50%. it also allows them to

accelerate hiring by up to almost 30%. once you get those people on board you have to maintain them. we have another platform called talent optimization that reduces attrition by up to 40% as well. we are monetizing all of our ai capabilities and we expect that to continue throughout the year. in fact, just last quarter we announce as part of our q3 earnings call, that 30% of our sales back into our customer base included one of our ai skews. we are super excited about the workday illuminate platform. our customers are responding well in the uptake has been even faster than we expected. tom: you said it, monetization and you see the impact because that is the key question around how ai is being embedded. can you give us a broad estimate of what it means for revenues as you push into 2020 five. you see that demand from customers. what is that translate to for a

top line for you and the team? >> we are excited about our ai platform. in q3 was a quarter we saw significant growth in ai and our recruiter platform, recruiter agent. we have something called talent optimization which is an ai solution. and we have a platform approach. as part of that platform approach we have something called extend pro is an ai integration or api interface that allows customers and partners to bring ai solutions on top of the ai platform and we are monetizing that. we have taken into account all of the momentum we see around ai and we put into our plans for both q4, and we gave an early view of fy 2026, which begins in february that includes our ai platform. we don't break out specifically with the impact will be, but we are counting on really good upside revenue from ai as we went to the new year.

tom: what could it mean for headcount, you expect reduced headcount as you in bed ai into your own business? >> we are absolutely and betting ai across workday. we are using across every single function in the company whether it's in finance, whether it's in hr, whether it's in our product and technology organization where we are leveraging copilots. whether it's in sales and marketing, we are truly becoming in ai company in every way possible. both not only how we sell and deliver a platform to the market but how we use the technology internally. we are driving significant efficiencies across our business, and we are not seeing it necessarily replace people, we are seeing people be able to move on and do different tasks and not have to do the tasks they once had to and we are letting ai take advantage and do

that for them. tom philando castile expanding europe when european growth is flatlining. there's much caution you're seeing for european clients at this point. lets see are really excited about the european opportunity that we have. as i said earlier, we have over 4500 employees in europe of which over 2000 are based in dublin. it's mostly products and technologies and they are driving a lot of innovation, a lot of our ai solutions that we are bringing to the european market and around the world. we are super excited. we have over 2200 customers in europe today. that's expanding rapidly. both at the high-end of the market and what we described as large enterprise and into medium enterprise as well and our partner ecosystem is expanding rapidly as well. yes there has been headwind in markets, like germany and the u.k., but we think it's only a matter of time before things

switch and become a tailwind, just like we saw in years prior. tom: there has been a bit of a challenge in terms of new subscriptions, does that turnaround in 2025, is that a story that comes back to you in terms of new subs in 2025? >> we are really proud of our growth, we are a company that starting to approach $10 billion in annual sales and revenue, and we are growing in the mid teens approximately 15% is what we've guided for the next couple of years. for a company of our size and scale, that is quite impressive. all at the same time we continue to expand our operating margin. people talk about software companies being a rule fording company. we are well into the 40's at this point and i think growing 15% or approximately 15% over the next couple of years is something we should all be proud of here at workday and a

workmates around the world are working really hard to maintain that growth. tom: ceo of workday. thank you very much for joining us on some of those new ai products. the momentum they are seeing with that business in the demand. now some other stories making news. space x and investors have agreed to buy as much is 1.25 -- 1.2 5 billion u.s. dollars of shares at $185 apiece. this is the important part, valuing the company at 350 billion dollars. that is according to an internal memo seen by bloomberg. the staggering valuation cement space x status is the most valuable private startup in the world with the market cap rivaling some of the largest public companies. london's ipo market has declined 9% this year with only $1 billion raised. pushing the u.k. to global ipl

rankings. it has linked by oman, a market that is 1% the size of the u.k. as well as malaysia and luxembourg. 45 due to mergers and acquisitions. many firms are listing other markets like the u.s., but also the middle east. the global airline association director general says he expects the incoming trump administration to support more consolidation in the industry. the group is forecasting higher airline profits next year as fuel costs start to come down. we spoke with bloomberg's guy johnson -- they spoke with bloomberg's guy johnson. >> placed on what we learn from the first administration is a net positive. there will be challenges and there will be opportunities. expect them to adopt a different approach to regulation. i think what we've seen over the biden administration was heavy and unnecessary regulation. tom: speaking a guy johnson.

as we look ahead to the coming holiday, travel season, guy johnson will speak to the cfo of flix about how their company has become the leading long-distance bus carrier in europe and the u.s.. that premieres tonight in the u.s.. in europe you can see it tomorrow at 6:30 p.m., london time. coming up, bloomberg economics has been running the rule over donald trump's protectionist policy saying they could have significant locations for the global economy. different scenarios coming through it different estimates. we break down the details for you. this is bloomberg. ♪

tom: welcome back, trade

policies from president-elect donald trump are set the test economic resilience around the world. it has been relative resilience. according to the latest outlook released by bloomberg economics, global growth will hit 3.1%. that is unchanged from 2024. u.s. growth is expected to drop to one point 9%. this is for next year. let's bring in jamie russia bloomberg economics. just over one month away from the new transition in the administration and the u.s. what are you in the team expecting? >> i think our base case is a modest view of what happens in the u.s. in terms of tariffs. if you give out some of the features of trump administration and what happened last time, it can point to -- given what he said on the campaign trail. there's a few reasons. there are just moderate voices in his administration it will

make it easier to go big on tariffs. if you look at the first trump playbook. what we saw was very careful about the design of tariffs. he was almost entirely focused on intermediate goods. which means that the inflationary consequences were cap low because of the increase in terror of cost could be split across the whole economy rather than just taxing ipads or consumption goods. it has to get passed on straight through to consumers. i think that's an important future. this feature. something he is not likely to follow. then you have stockmarket discipline. if you put 60% tariffs on chinese goods with bilateral trade between the u.s. and china, that's going to have very serious implications for the supply chains and america's biggest companies.

the stock market tanking is something that he wants to see. there's a huge amount of uncertainty out there and we could think of a handful of reasons why he will not go big on tariffs. the threat is more useful to him as leverage then actually implementing them. so we think the consequences could be relatively modest globally. in the main channel for eu and for other economies around the world would be uncertainty, higher uncertainty dragging on the economy and investment decisions being put on hold and causing trouble that way. tom: how much of your assumption around tariffs is tying into your view around inflation because you forecast in this report that inflation will remain above target for the fed and the boe in 2025. >> we regard that more is a legacy issue from the biden administration. when the economy is held up much better than people expected, it

would globally given how high interest rates had gone and how fast they got there. strong labor market has held up surprisingly well. until we see further weakening, it's going to be hard to imagine that there is a set weakening of inflationary pressure in the u.s.. we do expect core pc inflation about 2.5% across the year. something similar for the u.k. we have a tight labor market here. eurozone stands out as being different. we could see confidently the inflation is been defeated and price gains are less than 2%. tom: can jamie rush from our bloomberg economics team breaking down our findings worth the reading.

i'm joined now by melanie, senior europe economist at pantheon macroeconomics. thank you for joining us in the studio. before we get to your views on 2025, we have the ecb meeting to some have suggested they go with a jumbo 50 basis point cut given where inflation should -- where inflation sits. germany, france, the core. they go jumbo tomorrow? >> they will not go jumbo tomorrow. forecast is for 25 basis point cut. the reasons for this are twofold. inflation has come lower than expected. inflation would rise what has risen less than expected. also, we've had a lot of comments from governing council members in recent weeks arguing for continued gradual approach to easing. 25 would be the way.

especially as we near the neutral rates. if the bank goes for a 50 jump. tom: you have a stare at the neutral rate will be? >> it's highly uncertain where the initial rate is. some members on the governing council has argued it's close to three, some argue it's close to two. we are growing -- going straight down the middle and we expected to be two point 5%. given that the neutral rate is around 2.5 percent and that we think inflation closer to the second half of next year will come up, we have less cuts factored in for 2020 five and most consensus and markets. tom: it's expects up 2% by june. went -- where you see rates ending in the ecb? >> we have the terminal rate at two point 25%. we have a cut in january, a cut in march and a cut in june such as that the ecb will stop. we have inflation coming above target at the latter half of 2020 five.

we understand the risks are doing more than we expect them the reason could be because they think that the neutral rate is towards the lower end somewhere between 1.75 and 2% and maybe they see it in the first half of the year that could push them to go into an accommodative economy. tom: what independence your view, is that a trump tariff story? >> not at the moment because the trump administration will do after trump's inauguration is highly uncertain. we think at a minimum they will go with 20%, 25 percent tariffs on most of the globe, including europe. and that will leave inflation in the u.s. higher and will be somewhat inflationary for the euro zone. but we can't really put a number on it before we know it will happen. the reason for our inflation forecast rising in the second half of 2025 at the moment is largely based effects on energy. tom: at the base effect energy

story. how have you adjusted your view for the french economy? >> at the moment we don't know what the budget will be like. if there will be a budget. there's a number of countries which have rolled over budgets plenty of times in europe. we've seen this in belgium and spain. it wouldn't be the end of the world. we are seeing comments from policymakers that they don't want that to be the case. tom: thank you for coming into the studio. seeing europe economist at pantheon macroeconomics. plenty more coming up. stay with us. this is bloomberg. ♪

tom: welcome back, happy wednesday, happy inflation day.

here are the estimates ahead of that key cpi print out of the u.s. later today. 1:30 p.m. u.k. time, focused on call month on month expected to come in at 0.3% for the month of november in line with the previous month. you had a string of numbers around this zero .3% level. we suggest that the core there is an element of stickiness there. top line have my number coming in our 2.7%, edging up from two .6%. that is year on year in terms of the headline number. arguably, you will be focusing on a yearly basis, 3.3 percent is the expectation. markets expecting an 85% chance. the fed goes again on december the 18th. it's the question mark into 2025 that remains in focus. that is inflation data out today. that is the forecast on the preview. let's have a look at what's happening in the ipo market in london. this is bloomberg reporting. we've crunched the numbers and there's been another challenging year. fundraising on the london ipo

dropping. we've had 45 companies being snapped up as part of seven or listing in the middle east or the u.s. instead. in the woes. the london ipo market, we are now ranked below oman, malaysia and luxembourg. is there anything the authorities can do in the london stock exchange can do to arrest this decline? later today, janet yellen will be sitting down for an exclusive interview with us at 3:30 p.m. u.k. time, the opening trade is up next. this is bloomberg. ♪ ing. but i couldn't find pilates anywhere. so i started my own studio. and with the right help, i can make this place i love even better. earn up to 5% cash back on business essentials with the chase ink business cash card from chase for business.

anna: can morning from london, i'm anna edwards alongside guy johnson. we are in our way from the opening trade. asian stocks and european futures at lower ahead of today's u.s. cpi leading into the fed's december decision. zara owner mrs. profit estimates in says sales are off to a good