good morning. these are the stories that set your agenda. donald trump puffs team is looking at a slow and steady approach to tariff hikes rather than going all in on day one. u.s. futures and chinese stocks again. bring you the scoop. as the clock ticks towards a tiktok fan, chinese officials

may be looking at the elon musk as opera -- potential buyer. branches -- france's new prime minister delivers a policy speech. will he survive where others have failed? in u.k. futures getting a lift, the asian session benefiting from the story that the team around trump are looking at a gradual approach to tariffs. we will see how long that sustains the upside on markets. gains of around 0.8% looking to snap two days of losses. ftse 100 futures pointing higher by zero point 1% as we scrutinize u.k. markets as --

and investor questions about the sustainability of the debt parlay. nasdaq 100 looking to gain 0.5 percent, a mixed close for u.s. markets yesterday. producer prices out later today and cpi, inflation, that gauge on wednesday. let's look cross asset. money moving into treasuries, moderation on that, yields down two basis points on the tenure at her .75. the pound at 1.22 after losses, keeping an eye on the pound. the story is about dollar weakness. $80 per barrel on brent, close to the five month highs on concerns about the impact of u.s. sanctions on russian oil. bit is broadly under pressure -- bitcoin remains broadly under pressure, wiping out gains of about 5% since the start of the year, down about zero .5%.

donald trump's economic team is discussing a gradual approach to tariffs to boost negotiating leverage and avoid a spike in inflation. let's get more from bill, standing by with the details. what do we know at this point ? >> it seems like the big question has been donald trump promised tariffs when he takes office on january 20. the question has been how will that come into force? some of his key aides including his pick for treasury secretary are discussing a metered approach, having some tariffs come into place early on but increasing 2%, up to 5% every month, building pressure on u.s. allies and rivals to change their policies more towards the new administration's liking. this is something being discussed among trump's aides, but it is not something they

have taken to the president-elect yet. in the last couple days, trump has rejected a report in the washington post that he would implement tariffs only on select national security related goods or products. i think what we can draw from this, there is discussion going on at a staff level about how to follow through on the president pledges without causing immediate disruptions to the economy or spiking u.s. inflation. tom: and the mechanism they would use that and implement the policy approach has drawn interest from analysts. on geopolitical priorities of the incoming administration, the prime minister of greenland spoke out and suggested maybe there is some interest in a deal with trump. 3 what we are hearing is, if

greenland can benefit from this increased u.s. interest, that is something they are willing to talk about. the prime minister says he is keen to discuss mining opportunities for the u.s., lots of critical minerals there and that is one of the key reasons the incoming u.s. administration expressed an interest in greenland. there is a consulate facility there. greenland is now looking at, how can we benefit from this interest from the u.s.? that is not saying they are putting themselves up for sale or annexation but they are trying to find a way to cooperate with the incoming ministration. tom: bill, thank you very much, the details around greenland as well. in terms of the market reaction to the news around the tariff plans, considered at least by members, key members of the incoming administration. avril hong is in singapore.

we are feeling the effects of this in asia . >> certainly seeing that bounce in asia stocks, chinese stocks leading the way on the reporting that the trump team is discussing a gradual approach to tariffs. caveats including we would need to hear confirmation from trump. chinese stock outperformance is pronounced today. csi 300 and the last half an hour extending gains past two .5% and this is on a day when japan, underperforming. japan is back from holiday but chip shares are the key drags as the white house has been unveiling rest curbs on nvidia's ai chip exports. think about how the boj needs, days after trump returns to the white house, there has been a cautious optimism potentially in the markets as well.

when we take a look at chinese stocks, part of it might be optimism that a joint briefing between the pboc and securities regulators might produce positive headlines that drive markets. the other element is it has been looking oversold. this chart shows you the port of call ratio -- put to call ratio and how sentiment has been reaching lows. a turnaround, suggested against this backdrop. and coming through on this gradual approach potentially for tariffs, the reaction has been pronounced on fx. as the dollar falls back we have seen spikes, the kiwi and aussie dollar. one thing is for sure, fx volatility, something we have to get used to under the trump administration, focusing on what we see from the boj as well, a big speech by the deputy governor seen as the last chance to telegraph to markets a hike

next week. ultimately he said the board will be discussing one but that is far from actually pulling the trigger. markets aren't convinced. bond markets are a bit more convinced of a hike for the boj or hikes, and the selling continues, part of the global selloff, the yield on the 40 year hitting levels we have been seen since its debut -- have not seen since its debut. tom: hmmm, thank you very much -- avril hong, thank you very much. the latest trump tariff report, a gauge in terms of the market reaction. with dollar down and bonds up now, does that make sense to you given the reporting? >> the conclusion the market is taking from this leak on gradual tariffs is it isn't afraid.

it seems to welcome it. equity markets in the green on the dollar softer on the back of this leak. maybe this is the trump administration floating a trial balloon to the market to see what the market reaction would be to win approach about gradual tariff hikes. i want to focus on the dollar because the backdrop is interesting. weaker today but the bullish sentiment continues. we take a look at how close the dollar is from all-time highs we saw in 2022, 3% away from the all-time high. if you look at how the dollar reacted since the trump trade started, it percent stronger in the bloomberg dollar index since the trump trade began last september. the position is still extremely stretched. if we look at cft positioning and leverage accounts, another way to talk about how hedge funds you the dollar, seeing stretched positioning when it

comes to the dollar longs from hedge funds accounts. tom: a softer dollar today but expectations building a further dollar strength. chinese officials are said to be discussing the sale of tiktok's u.s. operations to none other than elon musk. the app is said to be banned in the u.s. on sunday unless it is divested by its chinese owner bytedance. the supreme court continues to evolve the case but is edging in that direction. annabelle, tiktok and mosque. what do we know? >> it was something that caught everyone by surprise this morning. this is a bloomberg scoop and what we hear from sources is that clearly, we are coming up against the january 19 deadline when tiktok needs to be divested or risk the possibility of going dark in the u.s. where people can't access the app and don't

receive updates. if they already have tiktok. the chinese government is thinking what is plan b? what we're hearing from sources is they could be looking at musk 's x they can control of tiktok and running the business. -- megan control of tiktok and running the businesses together. x has 170 million users in the u.s., tiktok, and tiktok would help x attract advertisers. the ai could be benefiting. a post on x from elon musk in april of last year, he said tiktok should not be banned in the u.s. given concerns and that is the argument tiktok is making. it goes back to plan a for the chinese government, and that is for bytedance do not need to sell operations in the u.s. tom: i wonder how much head

scratching there is in the halls of power in bc tiktok saying we are not a chinese company, suddenly it is all about the chinese government. what do bytedance, what have we heard from them? >> no response from them yet and i think that underscores another interesting element. it is unclear how much bytedance knows about these conversations taking place in beijing. and even if musk, if tiktok and bytedance and musk got together and thought about the possibility, beijing has a big say in this. there are a couple things we can think about. the chinese government holds a so-called golden share in a bytedance affiliate, the tiktok equivalent and china. bytedance would save the golden share only up lies to the

company but the chinese government might say otherwise. a golden share gives beijing influence over the strategy. aside from that, china has export rules in place to prevent chinese companies from selling certain software algorithms. that is integral to tiktok. china will have to have a say in what happens next if that includes a development but that is not what china wants and not what bytedance wants to see. tom: we will see how it unfolds. an interesting twist in the story as we count down to the supreme court decision on the fate of tiktok u.s. annabelle, thank you. they eu is considering expanding its investigation into whether x broke content moderation rules. elon musk's company is accused of failing to tackle illegal

content and disinformation. the top digital officer told bloomberg they are looking at whether a livestream conversation between musk and germany's far-right leader gave a political candidate an unfair advantage. >> x, the investigation has been going on for one year so it is quite broad, the scope that the commission is investigating. we are assessing if the scope is large enough. also, when it comes to the upcoming german elections, that we are covering the risks on that. tom: european scrutiny on x and musk continues. 11:00 a.m. you pay time, details from the u.s. nfib, small business optimism at a time when we are assessing the strength of the u.s. economy and that is one factor the selloff broadly.

i'm, tying into the story, u.s. producer prices, bloomberg economics expects strength there, no confirmation of disinflation. that is the view as we look ahead to producer prices later today. at 2:00 p.m. there will be a push to lay out the new policy agenda in france from the french minister. coming up, the french prime minister is set to present his policy agenda to parliament. whether francois bayrou can succeed where his predecessor failed. this is bloomberg. ♪

>> redline is to choose to come back and increase tax. everything we hear now shaping the debate is increasing tax, having tax on the corporations, having tax on household, on the airlines. this is not a good way because the problem that could lead us to that is in excess of public spending. tom: that was the vice president of the french business union speaking to bloomberg. the french prime minister is due

to present his policies to parliament. francois bayrou faces tense discussions on the budget with france relying on special laws to keep government functioning. until they get the budget across the line. let's go live to paris. what can we expect from the new pms policy speech? how consequential will it be? >> we will hear about immigration, pension reform and the budget the new prime minister francois bayrou has promised. he should deliver by mid february, which is ambitious, given we are mid january. his predecessor was toppled by emotion of nonconfidence early december on the same issue of the budget. this is the second general policy speech we will hear from a different prime minister in france in just three months.

the novelty for francois bayrou is a change in method, at least that is what he is trying to show. he wants to appease attentions with having the centerleft, the socialist party on board. over the past week, the new finance minister and all of the parties including the socialists, the greens, not the far left, they are trying to find a compromise. we heard from the head of the socialist party last week saying there was some kind of progress and he was perhaps ready to compromise, but compromise on what? that is to be question. the socialists and greens would like to suspend pension reform. this was a controversial 2023 pension reform and that is something francois bayrou is not ready to do yet because he doesn't want to lose support from the center right republicans.

he should remain vague today about the pension reform. he doesn't 20 the word pension -- want to use the word pension. he has no interest in making big announcements today, because a possible motion of no confidence, the highest risk, is next month on the budget. tom: how different is this government of bayrou? apart from one party, bottom line what are the chances they succeed and get the budget passed? >> it is actually, it doesn't have better chances necessarily been michel barnier because parliament is fragmented in three blocks and president macron can't call new elections until july so we will see this parliament fragmented over the next few months. marine le pen, head of the national rally, still has the

upper hand unless francois bayrou manages to secure some sort of pact of nonaggression from the socialist party. that is what he is trying to do on the budget and that is what he is trying to do the pension reform. with it finance minister -- the new, we have someone who is considered quite close to the centerleft, even though we don't have details about the new budget. he was talking about a spirit of responsibility when he met with the parties last week. we know he wants to bring the deficit down to between 5%-5.5% of gdp for this year, which is a target that is lower than he -- then his predecessor. he wants to make about 50 billion euros of savings, which is also lower than the 60 billion euros michel barnier was

talking about. we don't have many details on whether there will still be a surplus tax on the process deaf profits of the biggest companies. we will see discussions over the next few expect the bank of france last night -- weeks but the bank of france released a survey about political uncertainty weighing heavily on businesses. as we heard at the beginning of the segment from the bp -- the vice president, he warned how long uncertainty will last and the urgency of passing the budget. we had zero growth in the last quarter of 2024 and the bank of france expects sluggish growth in the next couple quarters. tom: caroline, thank you very much. as we look ahead to the preview of the prime minister's speech today, politics in france,

uncertainty weighing on bond markets there but we have a similar story, different dynamics but similar measure in the u.k. how u.k. bond markets could impact personal finances on bloomberg.com, today 12:00 p.m. london time, bloomberg orders breakdown implications for u.k. mortgage rates and savings, the stock market and more. terminal clients and digital subscribers can login it direction -- direct questions to the team. coming up, california's governor wants an additional 2.5 billion dollars of state spending to a emergency response in los angeles. the latest on the wildfires, next. this is bloomberg. ♪

tom: welcome back.

it is tuesday. the other stories making news today, southern california faces another round of dangerous fire whether as crews struggled to contain wind driven blazes that have paralyzed los angeles for nearly a week and killed at least 20 four people. the disaster is suspected to be among the costliest in u.s. history with estimated damages estimated between 250-2 hundred $75 billion. length lifts and new or are looking at a joint offer for u.s. steel. cleveland cliffs expressed interest saying they would fund the deal in -- using debts. nucor would use assets. goldman sachs promoted key executives in combined teams to form a capital solutions group,

recognizing the growing importance of private markets. the chief executive says the restructuring reflects goldman's desire to operate at the fulcrum of one of the most important structural trends taking place in finance. coming up, trump's economic team is said to be discussing a gradual approach to tariffs. the market reaction and. stay with 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 mrs. bloomberg daybreak: europe i'm tom mackenzie in london these are the stories that site your agenda. donald trump is looking at a slow and steady approach to

tariffs, stocks rally. our market moving scope. chinese officials are looking at elon musk to buy tiktok and a french speech to parliament. decent rally coming through, european futures point higher and on the back of this report trump is considering a gradual approach to tariffs. modest gains as you can assets are under scrutiny. modest gains, stocks fell.

now pointing to gains of 105. money moving and the dollar index is softer, the pound remains in focus, gaining modestly, brent crude is down and bitcoin is that 92,000. let's bring in the chief economist at ts lombard. i want to start with the tariff reporting. what -- what do you make of the -- the -- the news?

if -- a big if, if that is the approach how would that change your views on the impact? freya: we thought they would go gradual. we did not know they would mess up this month. very positive, gets us out of the dynamic in december with tariffs, injecting negative shocks, markets are focused on demand positives, neglecting the negatives, what happened is markets think you have to make

noises on -- on the -- on the tariffs. fiscal policy make -- make -- make the outlook different. that's a key -- key difference. if you have negative shocks you have problems with positive correlation, very difficult. if -- if -- if -- if we move to gradual. tom: we see the -- we see the grind higher, you -- you have had a call for 5%, what -- what do you put the catalyst to now?

do you expect to see buyers? freya: term premium i've got only 0.5 but we could see premium grinding higher, tariffs are kicked so other countries will respond, further down the line, when you stack the -- the shift, 5% is the resting place, just a question of do you get

tactical long bond -- on -- on pushing tariffs into the future when -- when trump comes in. tom: 5% may -- may be, here -- here in the u.k., you -- you push back on the idea that this is a liz truss moment. freya: yeah, the budget is different from the -- from the liz truss budget. this will be inflationary because of national insurance contributions. what was done was to change rules to preserve the ability to

invest, in fact turning to negative shocks it's the and ability at the supply side to respond to demands that creates the correlation, think of it as the hedging of the bond market is -- is reduced because inflation is coming into the system destroying -- destroying demand. everything is going in -- in -- in -- in the wrong direction. it should be a for preventing term premium, it's a little bit psychological. tom: market pricing in fewer than two cuts from the bank of

england through this -- through this year. you see that is hawkish? freya: we should listen and the inflation is not systemic, the way in which we differ from the boe is inflation is a solution requiring rebalancing through immigration or other means so the -- the -- the inflation should work its way through -- through the system and in -- in -- in that medium is -- is -- is the wrong kind of inflation.

if -- if the gilt market gets out of hand the bank of england will step in just as it did and that proved effective. tom: very interesting, slightly more benign. freya from ts lombard, thank you. repeated cutting of cables in the baltic sea cannot be accidental the block needs to be ready for a range, and forward

to working with the president. >> usa is most important ally so our sovereignty has to be respected but usa is very important ally so we are looking forward to cooperation. >> what do we know about what has occurred? i know this will be a focus for you. >> incidents, authorities our investigation -- investigating

this. working together with a two countries and nato, to discuss about this topics, to prevent and also response to that incidents. it cannot be by accident if these are happening -- happening, on the bottom of the sea, digging up. >> because of the horrors in the middle east we have been desensitized. europe would be more concerned, hybrid warfare with russia?

>> we have seen everything can be navigated, also damages and sabotage, europe has to be better prepared. tom: speaking to oliver crook on the ground, also the climate commissioner and representative for foreign affairs here tomorrow, gsk doubles down after the drugmakers agreement.

the ceo spoke to us about vaccines and the u.s. administration. >> and commentary, we should wait and see what the facts are but any conversation, these are things we are wanting to engage on. tom: spain is proposing a tax of 100% that could affect buyers from the u.k.. pedro sanchez says nonresidents bought 20,000 properties.

the proposals are inspired by denmark in canada. we speak to a platform enabling a valuation. this is bloomberg. ? ♪♪ ♪ three little bi ♪♪ ♪♪ ♪♪

tom: welcome uh back. raising three hundred million dollars the german firm is valued at more than $2 billion,

the world's most accurate translator. the company says its products make it easy to operate and am joined by the founder, thanks for coming into -- into the studio. what is 2025 looking like? any moderation? guest: we have launched big products and making sure the quality, that this comes to a level -- to the next stages, there is something really so fascinating, making sure customers get the most and

translation is something companies see as lifeblood, extremely important. really good competitive advantage. tom: what are you seeing? is the -- is the demand moderating? >> people are more sensible, companies are coming out of the hype cycle and assessing how solutions help them, little bit of a different space, one of the ways aia could be applied this

whole field is uncertain more and more specific how to -- what to judge those on. tom: founded before chatgpt, did we get to a point where big foundation models end up eat -- eating -- eating -- eating your lunch? >> there is a lot of solutions targeted toward the consumer, translation for business is different, not only highly accurate but with security

guarantees, adapts itself to the company, you don't want your translations to look like anyone else's. across the world that -- that -- that -- that is where solutions come into play. tom: is the -- is the -- is the -- is the view that europe is losing the battle -- is that -- is that -- is that overblown? does it -- does that suggest we are overplaying this or is there -- is there -- is there a massive gulf that we see? >> we should be confident, i'm super happy trying to foster the

environment so we should not sell ourselves short. i am not thinking about ipo. it is a great experience for them, something that will teach the brain on how to think but also as far as i em enthusiastic there is always the part of where it is better if you speak the language. -- where do you see -- see the business? guest: we wanted to be the player, we've captured the fortune 500 as you mentioned, 80% of the companies, so really

a footprint there and like every time somebody thinks translation i want them to think about it. tom: you're building out a supercomputer, how important is that in terms of your ability to spend? guest: we've been researching and building models since inception, building data centers and it does not change. that is part of our business and something we have to see, these costs are rising as well as becoming louder but they will become larger and we are working

very hard seeing is there ways to do the same and building. tom: thank you so much. the ceo and founder expecting a more significant yeah in 2025 for the business with global ambitions. stay with us, this is bloomberg -- this is bloomberg. ?

>> i still think you are likely to get a couple of cuts, no hurry, it will take until the june meeting to be delivered. tom: fed expectations through

this year, analysis based on inflation dater and producer prices holding, estimated increase, the headline rate will be lifted in financial services, bloomberg says the dater today will not assuage the fed, and not likely to come through from the dater. let's flip the board and have a look at what higher rates means for the earnings story because the view on tech if you strip out names they are making money,

including amason and tesla. worth looking at. coming up, opening trade is actually first -- first, but we will hear from the ceo on the polls, be fooled that the it is the opening trade, 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. ♪ ♪

kriti: we are an hour away from the opening trade and trump's team consider a plan to increase tariffs using emergency powers, chinese officials evaluate possibility of elon musk acquiring tiktok.