>> good morning. these are the stories the stories that set your agenda. asian currencies had a two decade low against the dollar with japanese stocks falling on their first trading day of the year and china reaffirms its

support after a sudden drop in the currency last week. prime minister justin trudeau in canada reported to be planning to resign as early as today following months of pressure within his party. the loonie rises. herbert is on track to become austria's next chancellor paving the way for the country's first government led by the far-right freedom party. happy monday. european futures pointing to gains of .5%. a big week in terms of the data coming through and cpi inflation as well. we keep an eye on fed speak given cautious commentary over the last couple days.

ftse 100 futures are currently flat. nasdaq 100 futures pointing to modest gains. let's look cross asset because higher yields continue to be a theme. further issuance later today will test the market. the 10 year at levels we have not civilian since about may. cautious commentary from fed speakers including mary daly on the continuing need to fight inflation. brent crude a little softer at $76 a barrel and gold at 2600. goldman sachs pushing back there forecast of $3000 per troy ounce until the middle of 2026. let's cross over to asia. avril hong standing by. what is standing out to you? >> it is how it's been fluctuating on the benchmark is what is standing out and this is

a risk off day as the dominant themes for the year are expected to still be about these tensions between the u.s. and china. the greenback uncomfortable for asian equities, starting the trading year on the back foot despite the weakness in the japanese currency and helping to cap some of these declines, the chip stocks as microsoft talks about plans for $80 billion in spending on the ai data centers, reinvigorating the ai theme and the stock gauges outperforming. and china continues to struggle after what's been a difficult start to 2025 and also concern expressed about chinese economic weakness and if you look at what we are seeing today via the pboc it is providing some support for the chinese currency.

but if you look at how it's been varying based on the renminbis basket it has actually been gaining against some of its major peers so this suggests one of two things, that this is really a dollar story that also to some that it will not be long now before the pboc eventually has to start loosening its grip so that is what is standing out today. >> thank you very much indeed. avril hong with a check on the asian markets. justin trudeau is expected to announce as early as this week that he will be resigning. trudeau has been under pressure for many months. what do we know about the reports and this potential resignation for trudeau and the challenges that the canadian

leader has been facing? >> there's a lot of challenges he's been facing. this is kind of the culmination of the past month and a lot of the issues and difficulties him and the party have face. they are reporting he will be resigning or likely to resign at some point this week and reuters reporting as well afterwards that he is likely to resign by wednesday, when his party is expected to have a caucus meeting so sometime before wednesday although i should know clearly that he has not as was reported in the globe and reuters decided definitively that he will step down but certainly it is a surprise despite this pushback he has been getting. his favorability ratings that have been low in the main issue that happened last month which is his finance minister is stepping down with this letter

she wrote to the canadian people that was a complete surprise and led a lot of this momentum because after that we had another 20 odd mps coming forward from his own party saying trudeau should resign and he will not survive this political upheaval and even more people in private meetings saying the same thing so the pressure is really building on something to happen here. >> is trudeau potentially an early political victim of donald trump? >> if you look at the data, the favorability ratings, at what has happened since trump -- he is not even inaugurated yet but when he was elected -- promises of tariffs on both mexico and canada have changed things and moved the needle because now you have a situation where a lot of

canadian businesses and consumers are worried. they were already facing pressure with skyhigh housing prices and inflation. that's been a story for much of the developed world. a lot of citizens are pushing back against leadership because of how one -- how high inflation has been and with that set to get worse under trump there's certainly been a lot of pushback and you have seen confidence in trudeau and his party to navigate this faltering since that election. >> thank you very much indeed. excellent in terms of the update coming through on the politics of canada. let's stay in north america because joe biden has urged americans not to forget the january 6 attack on the u.s. capital four years ago. his comments were published in an op-ed on sunday as u.s. lawmakers will meet to formally

certify donald trump's election today. joining me is john harney. four years since we saw those dramatic pictures and images of trump's supporters storming the capital. what contrasts is he trying to draw? >> he points out that this will be a routine event, the way it was intended to be. and the vice president will preside over a ceremony that will eventually -- that will confirm her opponent. this is in the tradition of al gore with george w. bush, richard nixon was john f. kennedy but as routine as biden

would like to present this as it is anything but because of what happened four years ago on january 6, 2020. this certification is a national security event, the first time the certification has had that designation. the secret service will be in charge of it. it will be 500 national guard troops standing by and the capitol police will be on high alert. there will be tension. the vote will go forward. sick -- fairly seamlessly. >> and that is the expectation. they have ramped up security around an event that was essentially a nonevent until four years ago. in terms of the specifics of the implementation of the trump policy agenda, mike johnson saying he plans to pass a bill

that would encompass much of trump's agenda vice spring, which sounds like a pretty swift implementation process so how likely is that and what is the uniformity in terms of the house and senate on getting that across the line? >> we will see. don't forget mike johnson himself was reelected as speaker by a very narrow margin friday with a bit of drama i should say. his controls is even narrower than it was last congress but donald trump echoed johnson's addition saying he would like a giant package that would encompass the border, taxes and perhaps new tax relief for overtime or maybe social

security but it's a tall order and given the fractious nature of the republicans in congress who are all very conservative but have different opinions about how to achieve their goals, and then the senate, which is now in republican hands but is a very different animal than the house. so it's possible certainly but it's a very ambitious goal for mike johnson. >> john harney, thank you very much indeed on the latest when it comes to what's unfolding in the capitol, washington, d.c. as we look to the days ahead and that confirmation on january 20 for that incoming president. some fed officials are continuing to a stress that the inflation fight has not yet been won. adriano spoke over the weekend

during a panel discussion. >> obviously our job is not done. we are not at 2% yet so we definitely aiming still to get there and we know the job is not done. >> let's get more with valerie tytel. we had the jobs data on friday. what is the uniformity around the message from fed officials and to what extent have they coalesced around the idea that there needs to be more time to bring inflation back to target? >> there's been a regime shift in fed speak lately. they were worried about the weakness in the jobs market and now seem to be more focused on the upside risk to inflation. she also went on to say they need to make sure the recent bump in inflation is not persistent. we heard mary daly saying inflation is uncomfortably above target. tom barkan saying there's more upside than downside risk to inflation and what may be behind

these words is the fact that from's political and economic agenda might boost growth and cause more upside risk to inflation. we had the ism manufacturing friday they came in strong and boosted treasury yields. overnight these yields continue to move higher. the u.s. 10-year yield at .46 2, 8 basis points shy of the 2024 hi but if we focus on the 30 year yield, which is driven more by growth in dead -- and inflation expectations it's very much hitting those 2024 highs. if we see how that has fared versus last april, it is through those highs of last april and off the highs we saw back in 2023 but .483 on that yield does show that the treasury market is trying to price in the upside risk to growth and hence inflation that are within from's policies.

finally what we have through this week, on tuesday we get the ism services and jolts data, wednesday the fed minutes and after that the market will be closed for the jimmy carter funeral and friday is the big one, nonfarm payrolls showing what is ahead for the u.s. jobs market. >> data to build out by the end of the week. valerie tytel on fed speakers and what to look out for this week when it comes to the data out of the u.s.. valerie tytel, thank you very much indeed. euro area inflation comes through tuesday. we will have that for you. markets expecting 100 basis points of cuts for the ecb by the end of this year. thursday, a very different inflation dynamic with policymakers wanting to see an increase in inflation where pricing has been challenged in

on friday it is u.s. nonfarm payrolls. unemployment around 4.2% and austria's far-right leader gets a chance to form a government, the latest on the developing situation in vienna next. we will bring you the details. this is bloomberg. ♪

>>. welcome back to daybreak europe. austria's freedom party is creeping closer to appointing its first chancellor after receiving an invitation by the president to discuss forming a government after efforts to form a centrist coalition collapsed when the conservative chancellor resigned. more with oliver crook. what is the latest in terms of the politics on the ground in vienna and how did we get to what could be a pretty historic moment for austria? >> absolutely. remember this is an election that took place in september and the winning party was this freedom party. they won the greatest number of votes but were effectively firewall out of politics because

they were boycotted by the rest of the political establishment and austria. the incumbent stayed on to have power as chancellor and began negotiations that have been going on since september between the center-right and the liberals, who pulled the plug on negotiations over the weekend and that led to the resignation of the chancellor. they basically call new elections and the second option is maybe the far-right is given a mandate and so we will have them meet with the president of austria at 11 a.m. today. and that potentially now seems like the most likely outcome but does this sound at all familiar to you? you have an ascended far-right across the country creating a problem for the political establishment and increasingly cannot ignore the influence they are having and add to that weak economic growth, major budgetary

issues. this is exactly what's going on in france and germany and there are echoes also of this in the netherlands. this is the same exact movie playing out across europe at a time when they need to get their act together and work collectively. these happening are happening everywhere particularly when you have this commission trying to bring on ambitious plans trying to face-off china and the new trump presidency. >> as you not to, the political firewall that has so far cap these far-right parties out of power, and you are seeing that, appears to be crumbling and austria. talk about the catalytic effect of most's support for some of these european far-right movements? quest the seems to be the other

thing unifying a lot of these political stories in europe, muska's more ubiquitous involvement in european politics starting with the united kingdom. this is basically the major political story for the german election, elon musk backing the far-right party. he will do a twitter space with the head of the party on thursday and weighing m. he has called olaf scholz an incompetent fool and the president of germany a tyrant. we have heard many horrified by this. we heard schulz saying germany is governed by the will of its citizens and not the erratic statements of a billionaire but these statements are gaining a lot of attention internationally. we reached out to the afd and we heard from their spokesman saying in the view of must we also believe it is important for german-american relations if the

afd can build diplomatic bridges so we heard it directly from them that they see this not only as a way to gain support and credibility from an esteemed businessman but to build a relationship with the trump administration. there is something of a rich irony in this because part of the platform is skepticism and dislike of american influence in european politics and in germany. obviously they feel a little bit different about it when it is in their favor. so there's a lot of contradictions within all of this but it is significant putting it in the context of this new trump administration and the sort of charm offensive we have seen from different leaders. maloney was just at mar-a-lago over the weekend to meet with donald trump in florida. everyone is trying to find their path to this new president who will be inaugurated in just a few days. >> thank you very much indeed on

the influence muska is already having on some parts of the body politics of europe as well. now we are going to be speaking exclusively to stephan on europe's political and economic headwinds so stay tuned for that conversation as well. and this is a story he nodded to. italy is in talks with spacex for a five-year contract to provide communications for the government. they say the deal is aimed at supplying italy with top-level encryption for telephone and internet services. the plan is opposed by some officials concerned about the impact on local carriers and russia's defense ministry says its forces have repelled what appears to be a fresh ukrainian offensive in the border region of kursk.

ukraine earlier seized territory in a surprise incursion in mid august. russia has claimed back about half the territory and could get the rest in a matter of months. new york city finally joins london with a congestion pricing scheme. what drivers will pay and their reception to it. that is next. this is bloomberg. ♪

♪♪ ♪ three little birds ♪ ♪♪

♪♪ ♪♪ >> new york city has joined stockholm and london charging drivers to enter high traffic areas with the congestion pricing program starting yesterday. >> drivers in manhattan transportation will get pricier.

motorists will have to pay a toll during peak hours for small vehicles and vans, nine dollars per day down from $15. for trucks and buses, between 14.4 and $21.6. a motorcycle $4.5. the money will fund the fta -- the mta's budget gap, paying for subway improvements and new electric buses and help get cars off city streets. kathy hochul delayed the measure before it took effect. >> i have come to the difficult decision that implementing the planned concession system risks to many unintended consequences. >> later she revived the idea but lawsuits from opponents, including the governor of new jersey, poured in. >> we are not a -- not against

lowering pollution but there's a time a place at a deal that works for commuters. >> the toll will rise to $12 and 2028 and 15 and 2031. in new york, shakeel. >> elon musk appeal to have turned on nigel farage. more on that next. this is bloomberg. ♪ let's go boys. the way that i approach work, post fatherhood, has really been trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families, like my own. connectivity is a big part of my boys' lives. it brings people together in meaningful ways.

♪ ♪

>> good morning.

these are the stories that set your agenda. asian currencies had a two decade low versus the dollar with japanese stocks falling and china reaffirming support after a sudden drop in the currency last week. canada's prime minister is reported to be planning to resign as early as today following pressure within his party. the loonie rises on the report. and herbert ginkgo is on track to become austria's next chancellor. let's check in on these markets on a day and week of big data releases across the euro zone and nonfarm payrolls out of the u.s. and listening for fed speak throughout monday and tuesday to give us a sense as to how much caution is within the fomc in terms of further in future cuts.

european markets set for a fairly positive start on the first full week of trading. s&p futures stateside pointing to modest gains after a decent session. let's check in on the treasury and u.s. yield story because they are at about the highest levels since around may, currently in poor .61 with yields up again two basis points. euro-dollar at 103 and we look ahead to pmi data at 9:00 a.m. u.k. time. trading lower at 76.22 and gold down .3% and goldman sachs pushed back there forecast for $3000 gold until the middle of 2026, currently 2631. elon musk appears to have turned on nigel farage, a friend of

donald trump who he previously supported. he posted the reform party needs a new leader. faraj does not have what it takes. lizzy burden joins me now. why the sudden and dramatic pivot on nigel farage from elon musk and do we care? >> far be it for me to read the mind of elon musk but this really is a u-turn and it shows he's becoming a headache not just to keir starmer but the right wing of british parler tics as well. it was only days ago that his was apparently the party that could save britain and they recently went to mar-a-lago. you can see as well he had been touting this big donation by musk to his party but now the question is whether he will back

robinson, this far right activist to be the reform u.k. leader. you had him talking about how robinson should be released from prison, he is in for contempt of court. faraj has distanced himself from robinson and we have reported several politicians in the u.k. have been in touch with people on the republican right warning them against endorsing robinson because they say his particularly your hue of anti-immigrant politics just is not supported by the mainstream right in britain. it's a big question because at the moment he has only suggested rupert lowe should succeed him so that is something to watch. >> one of the animating factors for him seems to be this child abuse scandal and how it's been handled at the local level but also now by the labor leadership and a target on the back of keir starmer. that's how he has put it at

least politically speaking. this seems to be an animating factor for him. what has the u.k. government been saying about that scandal? >> the reason this has come back to the forefront of british politics is because labor has rejected calls for republican cory into it. musk has said that starmer is complicit in the rate of britain but he was head of the crown prosecution service that began the prosecution of these grooming gangs in british towns. he does not want to get dragged into some sort of soap opera battle with elon musk. so far he has been brushing off the attacks. when musk said that civil war was inevitable during the riots, starmer has been trying to rise above it but it raises the question of how the special relationship between the u.s. and u.k. will play out between trump and starmer, which is an

interesting question for the new u.k. advance at her to washington, lord mendelson, a cure blair right -- a key blair right in his day. previously you had the foreign secretary and deputy prime minister criticizing donald trump. you have rachel reeves and others jetting off to beijing to try and woo china. is it that from's attack dog is merely doing what you would expect? >> he has his own skin in the game. talk to us about the domestic front and the u.k.. it is not all about musk. >> indeed and starmer will be giving a speech on the national health service today. clearly first of all trying to

keep it brief when we have had such confusion over his missions and milestones and first steps and foundations in 2024 trying to clarify the messaging and importantly to focus on the domestic agenda when he's been accused of being absent as prime minister so far. we have looked at how much he traveled and he in his first six months in office has been abroad more than any of his immediate successors and you have to wonder what the point of it was when he went to azerbaijan and there were hardly any other high profile leaders there. many leaders he's met on the circuit have waning influence. justin trudeau in the news today, joe on his way out so as i say you have the chancellor visiting china this week and interestingly we have not yet had a decision on who will represent the u.k. at his inauguration.

>> we are monitoring that china visit as well by the chancellor and other members. lizzy burden, thank you. now to some other stories making the news this monday. a u.k. minister is coming under growing scrutiny after reports she was given a central london property by a developer associated with bangladesh's former government. the financial times reports they received a -- an apartment in 2004 and a spokesperson said any suggestion that it is linked to support could be categorically wrong -- would be categorically wrong. and u.k. business confidence has dropped to its lowest level since liz truss's miniature budget more than two years ago according to a survey. in the majority of firms expect prices to increase as they pass on higher taxes -- taxes and a

jump in the minimum wage. the lobby says business conditions are weak and more firms have slowed investments than accelerated it. and joe biden is set to ban new offshore oil and gas development across some 625 million acres of u.s. coastal territory. the move is designed to protect coastal waters in the communities that depend on them from fossil fuel development and the risk of oil spills. bloomberg understands biden is keeping the door open for new oil and gas leasing in the central and western portions of the gulf of mexico. shares of nippon steel are falling after joe biden blocked a planned takeover of u.s. steel siding a threat to national security. let's bring in kriti gupta. not unexpected, the decision from biden. what is next?

>> this used to be the world's first million-dollar company that helps with the war effort in europe way back in the day. this is considered a company that is too big to fail and basically a key piece of the american framework but it's a company that has not actually dominated the steel space the way it did in the first half of the 19th century. it comes down to the idea of production capacity, the idea that china dominates steel production. the u.s. is not even second or third but fourth. within that u.s. steel has not been the dominant player in some time. it comes down to production capacity. take a listen to what one major union president had to say. >> the amount of steel we are capable of making in this country today we made 30 years ago. there's been a lot of changes in

the way we do the work but also changes in their equipment and materials so we are very capable of making steel in this country and the demand is actually higher than our capacity. >> dave mikal there and he is saying they have the capacity but they are not actually able to get there and that's really where the concern lies because one of the major concessions that nippon steel had offered biden was the veto on production capacity. he did not say anything about employment or the output itself. >> so what is ultimately at stake? >> they do not have investment coming through now. >> that is why they wanted the steel so badly because you will remember cleveland cliff offered to take over the company for $10 billion but the concern was that

there would not be enough meat on the bones to appease some of the antitrust regulators because that union would have bought 95% of iron ore production under one company so again bringing back the regulatory concern but this time around there are global repercussions and in the fallout of this decision from joe biden, even his inner circle showed some concern. janet yellen voicing concerns simply that japan is the u.s.'s number one foreign direct investor. does this affect the relationship? you are concerns from the prime minister saying this could hurt some of the alliances around the approach to china and the south china sea situation and again you are seeing the other side of the situation is the likes of those who supported the decision

saying this is how you keep energy and commodity security under the arm of the u.s.. one of the foundations in terms of building out the infrastructure of the u.s., designed and built in china, talking about tiktok and their appeal of a potential ban. there's a real risk it could be banned in the next few weeks. they are going to appeal it this week. you say there's a linkage. >> two completely different companies but the fact that they are both being reviewed for national security reasons is at the heart of the concerns. for china there's a clear narrative. it is american data in the hands of arguably america's biggest competitor. can you check all those boxes for japan? why are they meeting with those same allegations or checkmarks? that is the concern anyway and you're going to hear that from

tiktok with the hearing set for january 10 so this national security conversation under trump and biden will continue. >> kriti gupta, thank you very much indeed. coming up, shares gain after revenue growth beats expectations of strong ai demand. traders there. more on the outlook. that's next. this is bloomberg. ♪

>> welcome back. shares in foxconn are gaining this morning after they reported better-than-expected results on stronger demand for ai.

let's bring in our asia technology reporter for the details out of taipei. this seems to be bolstering expectations around their ability to profit from ai. >> right. as you know, they are a major assembler for nvidia servers. it is actually the biggest in the world so it's been closely watched to see the future of the build out. i was surprised and i guess so is the market that they had such great sales in december because this is not a quarterly earnings report but a monthly sales report and brought together we get a picture of the fourth quarter, which sales were up 15% , exceeding analyst expectations and that is thanks to a 40% monthly sales growth year on year and so that is spectacular

and they are also saying that the outlook for the first quarter will be significant year on year so that is giving some breathing room for investors who are worried. it was single-digit growth for november and october and so it was quite a surprise. i thought they would miss that outlook. >> what do you read into that? can you take that number and extrapolate? how sustainable is this demand going to be? >> month on month this kind of 40% growth -- i think it's going to be difficult also in the first quarter there outlook -- while there outlook you're on year is significant they are saying they will have a sequential down because the first quarter is generally more

quiet with chinese new year and so according to that some analysts have calculated that they would be missing market estimates so the city analyst has said that could bring some softness into the shares going forward in the near term but the company has said and repeated as recently as november that it expects ai service sales to remain strong this year and even the division that houses the servers could match the sales of the division that houses the iphone sales so it's good news for them to be able to diversify away from just being an apple contract manufacturer. >> on apple then to what extent is this becoming a two speed company?

what is the outlook for the iphone part of the business? >> for iphone sales, you know, it takes some of the risk away but it is still a major part of their revenue and so that will continue to be a focus for investors. iphone sales as we have read have been muted and whether that changes in 2025 is the big question and that will still have an impact on their bottom line. >> jane with a breakdown of the numbers coming through. thank. and what that tells us about the outlook for ai and microsoft plans to stay -- to spend $80

billion this year building those data centers with over half of the projected spending to be in the u.s.. cloud infrastructure providers have been racing to expand computing capacity by building new data centers. microsoft spent over $50 billion on capex in the last fiscal year. shares of getty images rose after it was reported its exploring a combination which shutterstock. sources say they have been laying how to structure a deal that would bring in two providers of licensed visual content. deliberations come as ai upends the content creation business. there is plenty more coming up. a breakdown of what to expect in terms of the data front and mary daly on her views around policy settings and the fight against inflation. this is bloomberg.

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>> i would not want to see further slowing in the labor market so while we absolutely have to continue to get inflation down to our target, we have to be resolute about that. we have to do it in with thoughtful manner so we can also support full employment. >> san francisco fed president mary daly, another voice from the fomc seemingly cementing the idea of the need for caution around the fed's attempts to get back to that 2% target with three-month month annualized inflation above 3%. we will hear from more fed speakers today, lisa kuebler, chris waller and barkan as well. so to what extent you get uniformity or not -- maybe there's a discussion around the balance of risks between those competing targets on unemployment and inflation. hawkish commentary from fed officials has been there. markets pricing and fewer than two interest rate cuts by this

year, 38 basis points, with the first not fully priced until june by these markets. 38 basis points by the end of the year. to what extent is that moderated by change on the data front and what we hear from inflation that from fed officials -- hear from fed officials? nonfarm payrolls could potentially adjust those views. pretty solid, around 160,000 for december. expecting to see unemployment stay around 4.2%. it will be a reminder of u.s. exceptionalism and therefore underscore the views we have been hearing articulated from fed officials but we will see the number and how that transpires if you get significant softness, maybe employment -- maybe unemployment going up. let's flip the board and have a look at inflation expectations and the prints out of the euro zone. pmi data and inflation later

this week. markets still pricing in about 98 basis points, almost 100, 1% in terms of cuts from the ecb. you could seep a bit of a move up that she could see a bit of a move up -- you could see a bit of a move up. that's down to fuel. they see that trend continuing. tuesday, we will speak with stefan, the eu's commissioner for prosperity and industrial strategy, on europe's political and economic headwinds. up next, is the opening trade. stay with us. this is bloomberg. ♪

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kriti: good morning from london, i am kriti gupta alongside guy johnson and lizzy burden. some went on track to become austria's next chancellor paving the way for the