tom: good morning. this is "bloomberg daybreak: europe."these are the stories to set your agenda. asia stocks slide as china's key

economic conference disappoints investors. the details were absent. ecb expects to cut rates at oath next two meetings. as christine lagarde says euros -- europe's growth is losing momentum. and the french president is due in new prime minister in the next few hours as he looks to avoid another government collapse. tom: happy friday. mixed u.s. data muddying the waters. you saw some pressure towards the end of the trading day with the s&p up by .5%. u.s. jobless claims came in higher than expected and

inflation in terms of producer prices also ticking up. european futures pointing lower by .3%. the ecb cutting rates as expected, 25 basis points and expected to cut again in january and possibly march as well. ftse 100 futures lower by .3%. s&p futures up .1%. and there is positivity around broadcom earnings reminding us that strength is there. broadcom beating on earnings and showing the upside in terms of revenue from ai. let's flip the board and lacrosse asset. investors around the ecb and fed expectations -- the expectation is that the fed will go again. currently, yields of 431 on the 10 year.

euro-dollar below the 10 five level. a little softness coming through from the euro on the expectation that there will be further cuts. gold, 2688 dollars. let's look at the asian session. the kospi almost entirely wiping out the losses that came from the back of the botched decision on martial law from the south korean president. it is up .5% on the session so getting back up to the gains were at least wiping out the losses since the shock announcement from the south korean president and an impeachment could come through during the weekend which could lead to some political certainty or lack of political uncertainty. we will watch the events over the weekend. broadly across the benchmark in asia, it is tied in with the story from china.

a lack of detail coming from the work conference in terms of the economic meeting though it is expected that the deficit target could be widened to a year. that number should come through in march. the nikkei off by four percentage points as well. to the politics of france -- the french president is widely expected to announce a new prime minister in the coming hours. he is aiming to forge a coalition that will last until 2027 when his term ends. let's get more from bloomberg's phil sarah fino standing by for us in paris. what do we know about the decision, the timeframe for macron? >> the question is -- has he managed to find a compromise with enough members of parliament to ensure there will

be a steeple government -- a stable government? the earlier government was voted out in early december because the far right party joined the far left on a vote of no-confidence. macron has been trying to thread the needle in parliament and come up with enough supporters that will back a coalition that can get a budget approved. his best hope seems to be to pry the socialist party away from the new popular front. if he manages to do that it is probably because he agreed to appoint someone from the left as prime minister. he has wanted to do this for months. he did not succeed last time around. we will see if he managed to do it this time. nobody really knows what is going to happen. tom: the suspense is total. how do we expect marine le pen

to react? we have reporting from your team on the ground as to what unfolded one marine le pen and the standoff with the former prime minister -- what does that tell us about how she and her party may react? >> great reporting. he thought he had a deal for her to support the budget. he made some concessions on some of the spending items in the budget. and then she wanted more. he was not willing to go that far. the sense i think in the macron camp is, she doesn't want to compromise. she wanted to make a political statement and bring down the government. all the more reason for macron to look elsewhere for support. he was counting on wearing le pen and her party to get the budget through. they refused to do that and so that avenue seems to be closed but it has made political points for her. tom: that remains that key

question. thank you very much joining us out of paris and another big day for the politics of france. to china where top leaders in that country have set domestic consumption as their top economic priority trying to bolster confidence against the threat of looming u.s. tariff increases. let's bring in the bloomberg executive editor for the region in beijing. what did we learn from this key economic meeting about the priorities for the chinese government in 2025? >> i think you put it well, tom. the front and center, the thing that they want to achieve is increased domestic consumption and increase overall domestic demand. they sort of sketched out a two-pronged approach. on one hand there will be more spent on improving the social safety nets.

so making health insurance better and the pension system better. there is quite a high level of savings in china. if you improve the safety net the idea is that people would be willing to draw down the savings and spend more. other thing that came out clearly is the government is ready to spend, ready to borrow and spend to achieve these objectives to improve the social safety net and also if the consumer isn't going to spend, the government says it is ready to create demand. tom: this is a government ready to spend. what about the growth target? what is the expectation for next year and is that still the metric that is and once was so important in terms of driving the output from this economy? >> i think the gdp target is still very important. it acts as a communication tool for the central government to

try to telegraph to local government officials what their priority should be and how much they should push for more economic growth and how much they should push to increase economic activity. the target was and should have been set at this conference but we will not get a public announcement of it until march. that being said, the consensus among economists that bloomberg has spoken to is growth of about 4.5% in china. tom: 4.5% may be the number we are looking at. thank you for that fantastic rate down of that meeting as we look ahead to the national people's congress in march. bloomberg has learned that ecb policy makers expect to lower rates by another quarter point in january and probably also in march as inflation stabilizes and growth remains sluggish. christine lagarde spoke to the press as she does after the meeting about the block's growth

trajectory. >> the risks to economic growth remained tilted to the downside. the risk of greater friction in global trade could weigh on euro area growth by dumping exports and weakening the global economy. lower confidence could prevent consumption and investment from recovering as fast as expected. tom: for more, let's bring in valerie. more on the market reaction and the decision to cut about 25 basis points. >> what the markets heard from christine lagarde as she failed to live up to dovish expectations priced end of the market. she mentioned the downside heads to growth and they took out the word "restricted" in their policy statement but when she talked about the risks of

inflation she talked about them as two-sided. she didn't focus on undershooting on the inflation target. she also said there was no discussion of the neutral right and that implies was no discussion about the need to get back into expansionary territory. when it comes to growth projections and inflation projections, there were only mild revisions lower on the growth forecast for next year. this was reflected in the fixed income space in the european bond market where we saw yields rise across the sphere. german yields rose eight basis points. and in italy, the 10 year yield rose 16 basis points, the second-biggest move on the day to the upside for the btp market this year. she did not live up to market expectations that she would come out more dovish in this press conference. tom: the btp reaction is interesting. talk to us -- there is some lack

of clarity in terms of the data that came through stateside. i know you will give us the clarity. what about the jobless claims and producer prices? >> jobless claims came in slightly higher than expected. when it came to ppi, the headline numbers came in hot but the inflation nerds have noted that the components that feed into pce which is what the fed forecasts, those did not come in hot. that reiterated that the fed will reduce interest rates at next years meeting and head towards a pause. the focus shifts to the fed releasing their economic projections at this meeting which includes the dot plot and how many cuts the fed is penciling in for next year. tom: here is what else to think about.

7:00 a.m., u.k. time, counting down to the industrial production drought. and we will hear from the ecb to see if they add to the bloomberg reporting. we have heard from officials expecting another mark -- another cut in january and maybe march as well. 10:00 a.m., we get euro area industrial production. we will get a gauge they are of the likely softness with a lens on what is happening in germany. you can get a round up of the stories you need to know in today's edition of daybreak. and go to d.a. why be go on the terminal. syria's next steps. we will speak to a former syrian peace negotiator, hind kabawat, about what this means for the country and regional players. stay with us. this is bloomberg. ♪

tom: welcome back to "bloomberg daybreak: europe." russia is close to an agreement with syria's new leadership to maintain vital village erie bases in the middle east. sources tell us the russian defense ministry believes it has an informal understanding with the islamic group. western officials believe these spaces could act as a deterrent to extremism in syria which talks to the complexities in terms of the international players staking a claim in the new syria. there are developments on the ground and the broader regional impact -- let's talk to hind kabawat from george mason university, a former deputy head of the syrian negotiating commission's office in geneva

good good morning and thank you for joining us. what is your level of confidence that hts, this islamic military group, will build a pluralist syria going forward? hind: thank you for hosting me and good morning. good morning to everyone and congratulations to syria and to the syrian people. the transition happened last week and it was peaceful. everything happened until now -- it has been very safe for the civilian and to the syrian people especially to the minority. education shows there will be a unity between the syrian people. and we are looking for a civil

state, democratic and we have a syria. it is important to focus on that. the national contract between us and our people in syria, it is a different syria. we are watching. and we are working closely to have a few messages. there will be no revenge or sectarianism and we will work together. tom: what gives you that confidence? hts is a spinoff of al qaeda and they tried to moderate that position. they are designated a terrorist group by different countries. israel is concerned. and afghanistan is a reminder. the taliban came into power after toppling the regime promising to be somewhat reform

minded but that has not played out on the ground. many would say that is a warning. hind: actually, syria is completely different. for the last 13 years, syrian people on the ground have been working very hard. we have now a very strong civil society on the ground working. it is not going to be like afghanistan or iraq. we are on the ground strong women, youth, civil society. and so far, everything happened in the last few years -- we have been having a great civil work on the ground with the christian, with the jews. and we have a great interfaith world, we have local faith-based leaders and i do have the

confidence that the syrian people today are stronger than 13 years ago. and we now have the strongest civil society, community and we are working together toward a peaceful transitions and to continue this political transition to have syria include everybody at the table. we cannot exclude anyone. tom: but professor, which is the foreign actor to watch right now? you have u.s. troops stationed in syria. turkey is a main backer of some of these groups. which is the main foreign actor in terms of the influence that will come to bear on this new syrian leadership? hind: i think today we need to be open, to have an open door diplomacy and talk to everybody. we are -- we know that because

of some countries, we could not be resilient and state until -- and stay until now resilient. it is syrian led. we don't want any influence from any countries but we have open door diplomacy. and we are going to have a dialogue with everybody. we won't close any doors because we need everyone today in our syrian future. tom: you are there in turkey and turkey is host to hundreds of thousands of syrian refugees. is that your understanding that many of the refugees will return to syria? do you plan a trip back to syria? hind: i am driving to aleppo on monday. many of my colleagues and friends are going back.

i will be in damascus for christmas with my christian community. we are all planning to go. we are grateful to turkey and the other host communities that hosted our people but we are not a refugee community. we are a proud syrian people and we want to go back to syria. we plan to open our civil society and we will start in damascus and aleppo. tom: what is the most urgent need right now? is it international financing? expertise on the ground? what is the most crucial need right now as syria tries to rebuild? hind: we have three important things. humanitarian, humanitarian, humanitarian needs. we don't want the people to need

anything. we need to start thinking about how we can -- because this will be very hurtful for us. we want to continue to have an open economy. we have a business community in syria and we want to go back to where we were 150 years ago before the assad regime came in. and we want to have accountability. tom: ok, hind kabawat, george mason university professor. thank you indeed and good luck with your trip on monday to aleppo. coming up, is europe on track to meet its climate goals? we will take a closer look at the halfway mark through a crucial decade. that is next. this is bloomberg. ♪

tom: welcome back. we are almost halfway through a crucial decade for europe's energy transition with the 2030 climate goals approaching. is the region on track to meet its targets? here to give us an update is an analyst in bloomberg's europe energy transition team. our things on course for europe? >> the ambition to be net zero for europe is there. members are saying the right things about targets for 2030 energy. in terms of reaching the zero, europe would need to have solar and wind capacity. that is more than double the capacity that will have been

online by the end of this year. so our base case shows that we have only reached around 85% of the way to the target. so there is a gap. that means it will be harder for the european countries to reach their emission targets. tom: there is a gap. what does europe need to do to close that gap? >> in the near term the focus has to be on solar and wind capacity. the deployment of these capacities needs to double. looking at solar, that is doable . the solar industry has been going well. we had strong installations on the residential and utility side with cost declines. and we look at wind, it is more of a challenge. the policy needs to intervene there on permitting reforms so we can get online all of these projects quicker and also on the

route to market we need to have further incentives, economic incentives for wind. tom: economic incentives for wind and that is what we hear from ceos of the big wind turbines. permitting, permitting. thank you for coming in early to break down the story. coming up, thousands of pro-eu protesters in georgia dig in for a third week despite an intensified police crackdown. details next. this is bloomberg. ♪ 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.

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tom: good morning. this is "bloomberg daybreak: europe." -- these are the stories that set your agenda. the chinese conference disappoints investors. beijing signaling more willingness to spend but the details are absent. the ecb will cut rates at the next two meetings as christine lagarde says europe's growth is losing momentum. and the french president is due to in new prime minister in the next few hours as he looks to avoid another government collapse. happy friday. european futures, after a softness at the end of the close yesterday europe and the u.s. -- gdp futures pointing lower. the ftse 100 dropping 18 points. s&p futures in positive

territory after dropping .3% yesterday. nasdaq 100 futures pointing to gains of up .4% after a softness yesterday. broadcom coming through with decent earnings that support the narrative around the ai trait. we'll see how it filters through especially for the tech trade stateside. yields moving higher yesterday stateside unmixed data of jobless claims ticking up. euro-dollar below 105. a little softer by .1%. bloomberg reporting they will go again in january and possibly march. gold is up .1%. checking in on asian markets because in south korea the stocks have all but wiped out the losses since the shock

imposition of martial law by the president. expectations that there could be an impeachment of the president this weekend which for some would lead to short-term political stability. broadly across the benchmark and asia, .9%. disappointment about the lack of detail from china. csi 300 dropping 2%. and in terms of what is happening in japan, the nikkei is down almost a full 1%. let's go to europe because work has learned that ecb policy makers expect a lower rates by another quarter-point in january and also march probably. the central bank dropped wording saying that policy would remain "efficiently restrict have" for -- sufficiently restrictive. >> the latest information suggests it is losing momentum.

surveys indicate manufacturing is still contracting and growth in services is slowing. firms are holding back investment spending in the face of week demand and a highly uncertain outlook. exports are also week with some european industries finding it challenging to remain competitive. tom: for more, let's bring in lizzy burden who has hotfooted it back to london after standing outside ecb and covering that reaction. was this a dovish cut from the ecb? >> it was not as dovish as expected. we did expect a cut but when you juxtapose that with the s&p's 50 basis point cut it felt pretty noteworthy. i saw the reaction in bonds falling as traders pairing bets on using reflecting this.

but you still have investors that cannot shake the idea that a 50 basis point cut is still coming at one of the upcoming meetings because christine lagarde did not rule out a 50 basis point cut. she admitted the updated forecast still includes prompts tariffs -- trump's tariffs. it seems inevitable that tariffs will affect europe even if indirectly. economists are already saying that the gdp outlook is too rosy not to mention the political chaos in france which comes back to how much stimulus the ecb will have to provide. probably more than the fed and the bank of england. it is why you have pimco and fidelity sagan the ecb might have to go lower than neutral when it comes to the endpoint for interest rates next year.

it draws the conclusion that her tone did not match the outlook. tom: and bloomberg reporting that they will go again in january and possibly march as well. on the politics then with the lens on france, possibly a new prime minister being named but did christine lagarde have anything to say about french politics? >> she did not want to wade into this. the question is whether the ecb would be willing to use the transmission protection instrument to deal if there is another yield spike like we saw with the greek levels of borrowing costs. she did not comment on the situation in france. she referred to general political risks that make forecasting difficult. and she mentioned the snap elections in germany. keeping it very broad when it comes to the politics. this is the elephant in the room

when it comes to the forecast for next year. tom: lizzy burden covering all things ecb for us. and general elections -- we will see how that factors in in february. low productivity and failure to invest leading to lost growth in the eu with france and germany as we have been discussing and political crisis. the continental risks more lost years with stagnation. >> the news for europe keeps getting worse. >> the french government collapses plunging eu's second largest economy into turmoil. >> france's political upheaval offered another glimpse into fractious european affairs. >> vw workers are striking hard. >> we are in crisis mode. >> if we follow our classical agenda, we will be out of the market.

>> the eu's economy is fighting for survival and struggling to keep pace with the u.s. and china. >> has the european economy grown as fast as the american economy over the last few decades, we would be generating 3 trillion euros. >> that is roughly equivalent to the whole gdp of france being added into the economy. >> europe's challenge is from china and the u.s. >> without that, the region is that risk of being unable to protect itself in a world where security is no longer guaranteed. >> it is a very tense moment in the world and europe is at the center of it. tom: you can watch this week's documentary from bloomberg originals in full on youtube and our websites. georgia's probe european -- pro

european protests intensify. it was triggered by the ruling party's decision to hold talks on joining the eu and it comes as it is prepared to appoint a loyalist as a countries next president. greg sullivan has the details. what will happen in terms of the current president and the tensions are on display right now in georgia? >> there are tensions on display. the next president seems likely to be a lawmaker with the ruling georgian party and a former football player who played a stent with manchester citi. what is notable is this lawmaker who has been anti-west and some of his comments in the west will be replacing the current pro european president. she has said that the october parliamentary elections are

illegitimate and she is the only legitimate institution and has vowed to remain a bridge to international partners. it does appear to be a clash that will continue. that is likely to continue whether rhetorically or legally or with increased protesting. tom: what are the implications of the broader implications of this for georgia's path going forward and what it means for the region, eu and russian relations? >> that is really what is that issue. the path for georgia was key to the october parliamentary elections. ruling party has been accused west about -- of pursuing legislation they call kremlin inspired. they suspended talks with the e.u. membership until 2028 which

has spurred more protests. pro european president has called for protest saying they will continue to protest because the opposition is behind the country's nato and eu ambitions. the u.s. and europe have been critical of how the election was run. they are critical of islands being used against protesters. -- they are critical of violence being used against protesters. tom: echoes of the euro in 2013 and in ukraine as well. thank you for the importance of watching what is going on on the ground in georgia. and now to asia where the kospi has closed up-to-date recovering losses triggered by the south korean presidents failed bid to

impose martial law. three quarters of respondents said he should be impeached and lawmakers are expected to vote on a second impeachment motion tomorrow with several members of his party hinting they will support the move. japan's top security officials say tokyo needs to prepare for that tariffs donald trump has pledged against other countries. he told bloomberg that he had friend discussions with the president-elect's -- that he had frank discussions with the president-elect's team. >> of course president trump has job growth and reducing the trade deficit. he seems to use tariffs as leverage to reach other policy goals. i wonder if there will be some

requests for japan and we need to communicate with them from here on. tom: that was the national security adviser to the japanese prime minister speaking to bloomberg exclusively. plenty more is coming up. stay with us. this is bloomberg. ♪ tarted 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.

tom: switching focus to a story of importance. india has a growing -- in their fertility industry and driving the trend is impoverished women desperate to survive. we have been taking a look at the true cost of a human egg. >> all my husband does is get drunk and sleep. my kids and i won't be able to eat. we have considered killing ourselves.

we went to a clinic. i was too weak. >> they are among the most marginalized groups in the indian caste system. >> all of us women are sanitary workers. >> i make 450 rupees a day and 100 goes to food. >> these women carry something more valuable than any of their families possessions, their fertility. it is an open secret that this is the fertility agent. she is a cog in a sprawling network. profiting from the sale of human eggs. every 15 seconds, human eggs are taken from a woman somewhere on the planet to satisfy the global demand for assisted reproduction. advocates warned that india's

poorest women are at the mercy of an industry that preys on the most vulnerable. for her and the other women in her village, the people who make the laws are worlds away. >> sometimes we do regret this. tom: that video is part of a global multimedia investigation by bloomberg. reporters into exploitation and opportunity in the human egg trade and it is the focus of this week's big take. the story crosses the world. joined by natalie, the senior reporter on bloomberg's investigations team. a phenomenal piece of reporting. in what way has the human egg become a global commodity? >> it is really quite remarkable. the human egg today is sourced

from young, fertile women from around the world. it can be shipped across international borders, banked and sold to ivf patients that cannot use their own egg. it is a fast-growing part of the 35 billion dollars global fertility market. and it is happening in a virtually unregulated space so most governments are not keeping track of the trade and fuel regulate it in any way. and like any precious commodity, there is opportunity and also exploitation. tom: talk to us about the technology involved but is assisting in driving the growth of this industry with those challenges alongside. >> what has changed in roughly the last decade is the technology called vitrification came about which is a flash freezing method allowing you to

turn the egg into a glass like state that enables it to be shipped across international borders. 10 years ago you could not do that. had to have the ivf patient and donor side-by-side. that has allowed the egg to turn into more of a commodity and global marketplace. tom: and given that, and you nodded to this, the potential for abuse -- what have you and the team found in terms of the abuse tied into the industry? >> there was some real remarkable discoveries we came across. one of the worst cases of harm we documented was a case in india where a teenager had been lured into selling her eggs to an ivf chain backed by some of america's most prominent financiers.

in greece there was a case of a mother told by police that her eggs had been stolen during her own ivf treatment. she thought she was just working to get pregnant for herself but it turned out half of her eggs had been given to another woman without her consent. we have documented women traveling from places like thailand and argentina being trained to skirt border officials so they could get into the u.s. and supply the growing demand for eggs there as well. tom: bloomberg's natalie, thank you very much. you can read today's big take on the terminal at ni big take go were in the latest edition of the business week magazine. some other stories making news. broadcom shares have jumped in trade after a 65% growth in ai chip sales in the first quarter. it sees a $90 billion market for

the ai components it designs for data centers by 2027. they bet the ai craze will fuel a sales surge. the cfo of klarna says his company has stopped hiring a year ago. the stockholm based buy now pay later finance provider has seen its workforce fall mostly by attrition. plenty more coming up in terms of breaking out the narrowing scope of the rally for the s&p and what is next for the ecb in terms of rate expectations. stay with us. this is bloomberg. ♪

>> i have the benefit of working with the goldman sachs team and the expectation is that the fed will cut next week as well as the beginning of next year. that is priced in. most portfolio managers expect easing cycle to continue. tom: the chief u.s. equity strategist from goldman sachs and the views of how equities

are underperforming in the u.s. around the trajectory of inflation. the waters are muddied. and you put in play the jobless claims. here is the work being done. going back to 2020 when inflation was not a problem. that is the light blue components. and then the inflation surge until june of 2023. services have remained sticky. bloomberg economics say if you take out the components of bpi and cpi and feed them into the pce gauge. then things look a little more benign. and for bloomberg economics the cut for next week is locked in but the questions arise as we push into 2025. it is the trajectory in terms of inflation and the role of services.

sticking with central banks, let's look at the ecb. they cut 25 basis points as expected. officials telling bloomberg though that they expect to cut in january as well, 25 basis points but also in march. three perth that -- 3% right now. this is traders, not the officials but traders expect 125 basis points of additional cuts. traders expect to see the rate below 2% by june of next year. inflation is stabilizing. that is the view from officials. and then you have the weakness in the economy and the politics of france and germany as well. some took this as a slightly hawkish cut from christine lagarde. that is the trajectory as you factor in the weakness in the euro. we are looking at equities.

we have talked this year and last about the narrow breath of the gains coming through from the s&p. really pronounced in december. for every stock that gained three fell. it is the most narrow set of gains this year. and that could point to the fragility in terms of the further upside for the s&p rally three records for the s&p in december alone. narrowly concentrated. for some that will be a concern. we speak exclusively with the chief executive as the german defense company reveals its long-term strategy in london. tune in for that interview. the europe trade is up next. this is bloomberg. ♪

anna: good morning. here is what you need to know,