if you squinted at christine lagarde's necklace, it said in charge. those are real -- there's a real sense of disarray yesterday, both around the decision and the rate path ahead. it was a head scratcher. you have the ecb cutting rates by a quarter-point, as expected, but they raised their inflation forecasts for both 2024 and 2025. and you can tell the market read it hawkish leah initially at least because of the rise euro-dollar. you also had economists saying the ecb had talked itself into a corner by telegraphing that june cut. only robert holtzman of austria felt he could to send on this. that's because of the recent economic data. sticking inflation and rapid wage growth. our defense was to say that there are going to be bumps in the road. these are bumps in the road and there will be more to come and things are moving in the right direction, hence the cut. the imf came to her defense. they said it was the appropriate thing to do. tom: ok. they were telegraphing this cut from january. now suddenly they are data dependent again. hence your commen

>> christine lagarde is in the building.he has been telegraphing this decision for a long time. we are expecting a great cat today to 3.75 percent fully priced by markets. it's almost unanimously expected by economists, but as you say, the recent economic data has muddied the waters for the path ahead. inflation has been sticky, wage growth has been rapid. therefore we look to the cruise -- clues to the path ahead because economies have said they expect three cuts this year but traders have paired their pets and they are only fully pricing two. we look to the forecast for inflation for clues to make revised upwards for 2026. that would signal a high bar for more cuts. also listening closely to madame lagarde. does she say that we are going to have quarterly cuts from here on out, or is it a cut today, a pause, that a return to data dependence? tom: bloomberg's lizzy burden outside the ecb in frankfurt covering the story throughout the day. thank you very much. the world's largest private equity and venture capital event is t

in her press conference ecb president christine lagarde did describe the decision as a cautious movemuch as to remove excess restriction. >> are we today moving into a dialing back phase? i wouldn't volunteer that because, as i said, we are making a decision on the basis of the confidence that we have that we are on a path we will need data and more data and analysis of the data to constantly confirm that we are in the disinflationary path. >> okay. why did the ecb cut? underlying inflation has indeed eased over time from double digit downs to mid 2s right now. inflation is forecast to further decline over the next couple years and rates are more restrictive because of that decline in inflation. importantly christine lagarde described the cut not as an easing but removal of excess restrictions, so there could be further cuts to come but july sounded unlikely. the u.s. started hiking before the ecb in this cycle and actually went higher. now it's lagging in cuts. what's interesting is, fed officials in the past mentioned the same criteria for cutting that christine lagarde relied on t

all eyes are on the key meeting at lunchtime european time, and the message from christine lagarde. >silvia, thank you. a lot of excitement as well. thank you very much. >>> the ecb decision is the driver for the day ahead. let's bring in the vice chair now. >> good to see you. >> good to have you here. let's talk about nvidia. nvidia continues to power the market. it is the biggest momentum stock ever. how are you advising clients to invest in the a.i. trade? >> we're bullish on a.i. we have been so for quite some time. i think the best advice i can get right now is it appears that valuations are beginning to get extended. when you look at the s&p in general, you have five companies that are responsible for almost 30% of the index itself. that overconcentration or narrow leadership in the s&p is also beginning to trickle into client accounts and investor accounts where they see an overconcentration in companies like nvidia. we're just cautioning investors and saying look at the macroeconomics data that is being setfor forth in front of . definitely don't sell out completely. >> you a

the first time since 2019, but the persistent price pressure has one more cut this year, but christine lagardeefuses to commit to further easing. >> i cannot confirm it is the dialing process that is underway. there is a strong likelihood, but it will be data dependent. >>> and u.s. futures point higher as attention turns to the all-important jobs report with operators looking for any signs of labor market cooling. >>> it is all about the data. the mainland market with the chinese export growth roaring past estimates in may coming in at 7.6% higher on the year versus the 6.6% reuters pencilled in. expansion was five times higher in april. the trade surplus with the united states widened to $30 billion the as import growth came in above expectations. our colleague emily tam filed this report. >> reporter: exports grew at a faster pace in may with exports beating ex-pecexpectations. i am imports were a miss. the chinese economy recovering at various speeds. protracted weakness in the profit sector is the biggest drag on the world's number two economy leading to consumer confidence and hurting co

christine lagarde from new york. ♪ jonathan: ecb rate decision in just 20 seconds time. a theme. up by a couple basis points, over in italy. this is what things look like. the euro shaping up as follows. there is your rate cut. 25 basis point cut on the main refinancing rate. in line with expectations. in line again with expectations down 25 basis points across the story. this was widely expected by pretty much everybody. it is going to set the tone for the summer. lisa: kind of echoing what we heard from the bank of canada as they embark on the rate cutting cycle. just what this means going forward will be key. expectations have declined just to make -- this is the first rate cut in five years. how deep is this path? jonathan: this is what they have to say. inflation has fallen by more than 2.5 percentage points and improved markedly. price pressures have been weakening. monetary policy has kept financing restrictive, keeping them well anchored. a major contribution to bringing it back down. domestic price pressures remain strong and inflation is likely to remain above

in other words, do we get, from christine lagarde later this morning in the press conference, happense about more as we come meeting by meeting. first cut by the european central bank since senptember 2019. the first market bank to cut after switzerland and canada and the question we ask this morning is this the end of this inflationary period been through, end of these high rates, beginning of a global easing cycle with the big question whether or not the federal reserve gets onboard. a chance to talk about that i think at 8:30 and after that, joe. >> probably worth pointing out quickly. look at the euro again. immediate reaction at least was one that was no change basically. this was such a widely telegraphed cut that no surprise on that. steve mentioned, listening to the context, christine lagarde later. >> in fact, looking at additional commentary here that they will keep rates sufficiently restrictive for as long as needed. central bank wants do a lot of rate cuts may not be saying that kind of information there. >> yeah. >> what people are going to be looking for -- go ahead, jo

are pricing in two more and not getting too excited and there were comments from ecb president christine lagarde path. there could also be phases in which we leave interest rates unchanged. she successfully talked the market into thinking every meeting will be a cut. look, they have to monitor inflation just like the fed and the key question for the fed tomorrow is going to be how high does the bar seem for powell right now to be cutting interest rates and is it enough that we started to see some weakening data for instance in the labor market although not too weak judging by last month's jobs report and some better inflation data although not too much better and we'll see what we get from cpi and those are some of the questions i think that will be on powell, the powell agenda tomorrow, and he's also going to release the dot plot which is always exciting. they haven't done this since march, and it shows how many rate cuts they expect to happen this year. they've had three this year in march, and that's going to change and the small business sentiment was notable today and it's still historicall

christine lagarde will be speaking also interesting given the uncertainty around the next steps for theeuropean central bank so tune into that. you can get a round out of the stories you need to know in today's edition of daybreak. subscribers to the terminal can go to day gp. nigel farage versus nietzsche -- versus rishi sunak. what he calls his party the opposition to labor. that is next. this is bloomberg. ♪ tom: welcome back to bloomberg daybreak: europe. happy friday. to the geopolitics. g7 leaders meeting in italy. they have reached an agreement to unlock a loan for ukraine by using the profits from frozen russian assets. they have been wrangling over this. the details are yet to be ironed out but fresh cash is expected to reach kyiv by the end of the year. leaders say is a strong signal to vladimir putin that he cannot out wait the bloc in the conflict. >> we have agreed to have a 50 billion euro support in addition for ukraine. this 50 billion euros will be fed by windfall profits, from mobilized assets in europe, russian assets in europe. >> we have the agreement today. we are

that was widely expected looking at those interest rate cuts and even though christine lagarde was tightlippedher rate cut expectations could be if you look at the curve there are those expectations there would be at least two more interest rate cuts but a diversions when you think about the path of the federal reserve and also on the back we had the bank of canada cut interest rates is well earlier this week and then you think about the bank of england. a different situation because of them grappling with the inflation problem but recent data out of the bank of england showing that mild recession is starting to improve moving out of that. seeing some individual stocks this morning some things i'm keeping a close eye on. nvidia the 10 for one stock split before trading on monday in order to be qualified to test for that stock split you have to be a shareholder today so that something important. i had a stock split you see stock run-up and they give back a little bit of those gains. retail space if you think about luxury retail when it comes to athletes are aware, lululemon is higher because it

don't forget yesterday in the ecb press conference, christine lagarde was talking about the labor marketthe labor market and labor market and services prices. we have had the employment numbers today. also plus 1% year over year. still an l little bit of acceleration here, but not enough to scare bankers. don't forget the expectations for the rate cuts. we are sitting on the fence for two or three this year before the ecb. take a look at what we are seeing on the european markets. we had days odisappointments on the equities trade. some of the selling rampss oingo up. back to you. >> i have seen a few notes calling it a hawkish cut. karen, thank you. >>> time to check on the top corporate stories with heps of silvana henao. silvana. >> thank you, frank. shares of gamestop surging after jumping 40% yesterday. we are seeing shares of 34% in pre-market trading. this after trader keith gill, roaring kitty, had his first live youtube stream in four years. now totally $557 million. if the position is confirmed and the stock returns to $64.83, per share, the paper position would be worth more t

takes to defend the euro and the european crisis just went away leaves me feeling like, well, christine lagarde cleaned up whatever mess is made. that's what would you have to say. >> two issues about the central bank rates and europe. short-term issue is probably in the price, but the long-term issue is i would argue it's an upgrade for the european equities or cyclical equities around the world because the environment we've seen, after whatever it takes and after the the environment of zero rates and zero inflation and that's an impossible environment for cyclical markets to outperform a growth market like the u.s. the emergence of inflation and the fact that after the cuts that we have facility and we have another for this year and the terminal rate is going to be subst substantially higher than what we've seen and don't forget about europe and what is happening in the political front and short term headwinds and another thing that i would point out is what you were discussing with the previous panel and that's the narrowing risks of the market narrowing again to mega-cap, large-cap growth a

i will say at a dinner party, when christine lagarde left the imf as executive director i sat in betweeni might add, both lovely people personally and he is very charming man. >> sure. larry: for all of the disagreements. i never personally had any problem with ms. yellen. just we disagree. she is another one, treasury secretary, she was in the papers today saying that trump's tax cuts are responsible for all the deficits and borrowing. really? is that true? really? >> really. look at revenues, up and look at, look at spending higher than it was during the covid crisis. tells you all you need to know but why let facts get in the way. say it, pretend it is true. like alice in wonderland, it is because you say it is. don't you know? larry: i want to see trump smoke biden out early. maybe biden will surprise the whole world. i think the way to do it, certainly he can talk about tax cuts versus spending. perhaps he will, ask reagan's question, but i would like to see him talk about the tax-free tip proposal. spring it out. what do you think about this, mr. president? this is from one preside

lucky enough to have that spot with the head of the ecb christine lagarde and the central bank governorhey've been cutting rates. his first reaction to pce numbers and this idea of whether the economy is weakening enough to make them a little uncomfortable that would push them toward a cut while the inflation numbers are sort of stabilizing here. >> some voices on the fed have started to hint. more attention to the -- >> they don't want to wreck the economy just to keep rates high if inflation numbers are benign. >> we had bowman and now bostic. we'll get to steve liesman. hey, steve. >> yeah. and a little bit more dovish talk from raphael boasting, the atlanta fed president, who is a voter. he says conditions will likely call for a cut in the fourth quarter. that's what he said in the past. he goes on to say inflation is, quote, moving in the right direction and recent reports push against the idea that inflation progress is stalling. he sees, quote, a few promising signals. still expects a slower progress towards 2%, the 2% inflation target this year compared to last year hitting the

. >> we could see further euro weakness if ecb president christine lagarde signals that more cuts are next one is coming. remember, she telegraphed this june cut pretty clearly, so if she gives more sort of transparent signs about the next one, for sure you could see more weakness in those bond yields in europe and in the euro/dollar. some overnight news from abroad to mention, the china -- one of the china private sector manufacturing numbers came in at the best level in about two years and i don't want to make too much of this because the official china manufacturing number actually showed a contraction for may, but i will note it because the market moved off it. it was the best number since 2022. it has, though, consistently outperformed the official china manufacturing number for the last few months. again, maybe could point to stabilization in terms of external demand for chinese goods. china needs the unless to go up if it wants to mention the growth target. we have exit polls over the weekend showing modi looks set to win a third term, and that's considered by the markets. indi

or is it possible to do what christine lagarde did in europe.d just by way of background, the fed did that back in '96, which is something vice chair jefferson brought forward as a potential analog. do a cut, see how it works. tell the market and country you're doing a process or a series of cuts? >> this sounds like an abstract hypothetical and you know i hate abstract hypotheticals. i usually -- >> well, no. i disagree. i -- >> yeah. >> austan, i disagree. it's knot abstract. chair powell sees it as a process. on one hand why do one cut if you're not doing a series of cuts. it's not a -- >> i gotcha. i'm not going to weigh in on, that's going to break my fomc communications policy on two grounds. i'm going to start talking about thoughts in jay powell's head and the future about what the rate cuts are going to be. i don't like tying our hands, even partially. i do like the idea that as we make movements, we're not willy-nilly surprising people. what i like is for the public to understand our reaction function, and i like that over the last yea

lisa: it is a christine lagarde moment.g into a league of's -- of fed speak. it is full on fed speak week. this is bloomberg. this is bloomberg. ♪♪ sandals jamaica sale is now on! with rates from $199 per person per night. visit sandals.com or call 1-800-sandals >> people are chasing the winners and continuing to feed into it. >> earnings are happening. >> this is a story and they are still not ridiculously priced. >> it does seem like there is a little bit of caution around how much markets could be priced to perfection. lisa: caution but still upgrading the forecast. annmarie is still back in the hot seat. right now we are coming into a week after straight record highs led by a small cohort of stocks, coming into a number of upgrades from a lot of shops. >> exactly. it is interesting because they are essentially arguing that this is the first inning of nai boom, but it argues that he will have to see more cooperation. is that really the case? is the ai boom going to spread? lisa: what could shatter the confidence that the

christine lagarde says yes, i'm not so sure.data there are green shoots, and if you look at the u.s. data you could argue you have seen a sign of softening. i do not know if we will have a massive divergence between the u.s. and europe if you take a longer 12 to 18 month period. jonathan: convergence or divergence? iain: i think over a period you see convergence. the fit is late to the party and sitting on the sidelines, fashionably. they are going to come to the party. jonathan: what does that mean for u.s. bonds relative to europe? iain: the bonds will be dictated by the central banks. we are back to data watching, checking out inflation prints. i see u.s. yields looking reasonably attractive on a 12 month time horizon. jonathan: you say data watching. that is not what we are looking at. we are looking at a building in manhattan. pimco, what are they warning? lisa: they are warning regional banks will fall apart because they are massive lenders to a lot of commercial real estate and office space that has yet to fall out of bed

same story for christine lagarde. i'm sure you will be busy tomorrow. thank you for the preview.lden goose postponed its ipo. what's behind this? reporter: luxury stocks, in the past couple weeks, their closest competitors have come off a lot. there's broader uncertainty about european markets right now following the elections in france. a broad selloff. there was demand for the shares being offered in ipo but backers were worried about first day performance. that was behind the decision. lizzy: wondering whether it is a european equities thing or maybe it's just a shoe thing. doc martens was kind of a flop. swetha: they were keen to avoid another ipo debacle. they didn't want another poor performance. they decided to try it at another time. lizzy: the political risk. maybe after the elections they will reconsider? swetha: it's unclear. it will be tricky. now there is a marker. the next time they try, investors know exactly what the stock's worth. they have to be confident of that first day. we have to see how markets pan out in the coming months. lizzy: that's what makes things