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tv   Bloomberg Surveillance  Bloomberg  June 1, 2017 4:00am-7:01am EDT

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♪ >> the secret is the u.s. economy is doing fine. update --loomberg his upbeat about the u.s. economy. meanwhile, the u.s. weighs stay with the paris agreement.
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>> the prime minister cannot be bought. so why should you? by othera may slam leaders. the election one week away. it is the final reading for the month of may. the preliminary estimate and 57 is where we are right now. a shows it is expanding at pretty hefty rate. here's what is happening to
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european markets. we've had five consecutive days of decline for the stoxx 600. euro rising yesterday. german 10 year years old is 30 basis points. crude is rising. datad show stockpile climbing for an eighth consecutive week. trump willt donald announce his decision on whether to leave the harris climate agreement or not. he is leaning towards quitting.
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meanwhile, china and the european union commit to the pact. according to a statement, the two -- may's decision to skip and event -- televised event her night was seized by rival. he announced he would appear. minister is not here tonight. she can be bothered, so why should you?
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>> in china there is fresh evidence the start to the year maybe paying off. it comes in contrast to the government reading yesterday which showed china's recovery steady last month. news 24 hours ago 8 -- this is bloomberg. exclusively to .loomberg's tom mackenzie >> the administration came out with a very old agenda. repeal and replace obamacare and introduce major tax cuts and andced trade negotiations reassess nato and defense
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spending, encourage companies to bring jobs back. of changeworld potentially and not surprisingly for new administration, it has been tough. i think the disappointment of a replacement to obamacare, there was more done on the repeal then the replace and has set back the we needhe little bit to progress on some of these >>islative programs for it are you concerned about the u.s. economy? >> no. the u.s. economy is doing just fine.
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are almost at full employment. to rate increases and expect to do more. recovered.ces have state and local governments are under better control. if you look at it objectively, the u.s. economy is doing fine. >> are u.s. stocks overvalued? >> no. look at the earnings. at 10%-12%. are look at the future and thews, not the past
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future cash flows suggest a growing economy. the question is are we getting earnings,use expectations are growing for because there is a lot of front on the market. i think right now i don't see but i don'tpside see an overvalued market.
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it is a big week given the criticism of president trump over germany and the eu. meanwhile, -- recent decline in core u.s. inflation. >> i believe we should remove accommodation because i don't think this economy has run away from us. i think we need to do this in the very careful way. >> joining us, and economists lgb. the economys saying
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is strong enough. we've had a couple mornings this week about inflation. >> i think the market is wrong there. if we get some movement on tax reform and don't spend, i don't know if that will come. unemployment is very low. lagged on have physical thrust there. unemployment and economic growth. those numbers. -- it is running close to 2%.
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>> if you look where we are right now, we've got interest rates below inflation. you got 10 year yields way below in these got a four and a half -- mark: mikita, what you think? there is a suggestion that the economy is strong enough we could have for rate hikes. >> i think that is hawkish comments. largely rates are faith-based. i don't think that is a good if you going forward and
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miss without getting, there is a few reliable and monetary conditions which suggests conditions are roughly neutral. perhaps, on the tight side. i think the key point is the inflation target. -- there is a that has a cost for their credibility and it is not a constructive attitude. i think they should be cautious and also postponed talk of normalizing the balance sheet and further rate hikes until we really have evidence they are hitting their targets are they say it is not a target and it is a ceiling and we don't mind it
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is below 2% but that is a completely different story. -- which one is right? >> i think in a way both of them are right at this very moment. the bond market in terms of forward sos going they are slightly on the skeptical side. they look at potential fiscal measures and they look at global trade. they're both kind of right because her not in an excuse -- a situation where policy like we
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are headed for sure into a policy mistake. there's a risk of too much .ightening so overall ok i think the first indication will be june when they said should signal awareness that it hasn't hit it target and it is not pursuing a tightening path because of this fixed idea of normalization whatever the indicators tell you. i think we are in a broadly neutral spot and waiting for new inputs. live pictures from the economic form. it exactly a week to go before the election.
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theresa may's decision to not take part in a debate last night was met with criticism. x she is taking you for granted. she will turn up to these debates because her campaign of soundbites is falling apart. then not even become to it is ared to be -- most important election of her lifetime and she has not even bother to come to the debates. >> it is about being prepared to learn, not being so high and mighty you can't take advice.
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politicians must show leadership and show our way of life and values and democracy are secure. the prime minister is not here tonight. she can be bothered, so why should you? it is only theresa may that can deliver that leadership. >> mark: this is my favorite chart of the week. miss tells us what sort of majority or not the conservatives will have. we are down to zero today. ago, we were at
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nowhere near brexit. pricing the risks of parliament? to anis getting back increased majority and cameron made the mistake of calling the referendum. there is uncertainty there. very bad newsl be initially. >> i think it will strengthen after the. if you have a weak majority, you may have another referendum even though it is uncertainty. majoritya weak
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definitely negative in the short term. >> is it time to start looking at the scenarios and what that -- what are you starting to think of? >> at think on that point, and the u.k. i would fully agree with my colleague. as a firm, we must say we have been maintaining a cautious view of the u.k. anyway. we did not think this was conclusively going in one direction. even though the pound is
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attractive, doing a relatively good job. there's too many political question marks out there which call somee -- volatility in unexpected changes in the pound. we say away with the exception of speculative strategies. -- >> we are in the midst of a synchronize recovery.
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1% yield. for any not be price inflation. live pictures from berlin. work angelack to merkel is meeting with china's leader. she says china is an important part. this is bloomberg.
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♪ packed in a sweeping rejection of president donald trump's protection and policies administration. becoming the first southeast asian leader to meet president trump. new tradeing for deals and the continued american presence in the region against growing chinese uncertainties.
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if i could talk to about in the wake of this taking place right in -- is thisrkel -- the riskty between the eu and the u.s.? no -- >> yes and no. there's a huge opportunity for all countries to make a point about the commitment to global trade in the face of what is going on at the white house. the bottom line is the u.s. remains an economy that is far more open than china so you have to look at the relative
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position. theseimportant that systemse in rule-based by major countries and that is -- china is doing the right thing and i would say i fully trust mrs. merkel to make the best in terms of european interest. carry on. >> there's also other things going on. similar developments with the tpp wishing to go ahead and a lot of talk about going ahead ith the -- without the u.s. i think there is a lot of momentum. theeally quickly, we have out of china.
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anything to worry about? >> i think manufacturing getting below if the. none of those are strong indicators of economic growth. i think it is really the economy now towards manufacturing services. if that deteriorates, i think that is when you start to see risk in china. the yourt is inflation. we will talk prices. this is bloomberg.
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whether america will lead the parents climate agreement. familiar, hepeople has not yet decided and is leading -- leaning towards quitting. >> meanwhile, china and the european union union plan to commit to free trade over donald trumps policies. according to a statement, the two sides give additional have china has to. u.k. prime minister's place was taken. may decided to not to stick to her decision. the prime minister's not here
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tonight. she can be bothered, so why should you? why not make herself -- you're ,ot worth theresa may's time don't give her yours. areorgan stanley says they encouraged by the u.s. economy. he spoke exclusively to bloomberg's -- in beijing. >> we hope the administration can pull some of this together. we need progress on some of these programs. >> are you concerned about the u.s. economy? no. i'm very encouraged. the secret is the u.s. economy is doing just fine. >> maintaining its momentum in
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may. confidence running -- rising. at 56.7 in reaching 56. margaret says growth largely being driven by domestic demand. citing solid orders, optimism and the biggest jump in six years. manufacturing just down from the highest since three years but still beating estimates. theycb starting to economic prospects and its policy guidance.
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before in at hours of next week's policy meetings. is it just a flash in the pan? >> it is not an upward trend after yesterday. enough -- be seeing this balance in their are risks to the downside. i think that is a subtle tweak. your short euro? >> we are shortly euro and the emergent is going to really push that back so you got a lot of impeachment,ntial
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isolationist policies. it is central banks that are going to drive currency. we think it is high bar. whenever you shortly end, it is a risky trade. >> equities net 12% from us that is a sector that has just gone too far on all the policies and they will be delayed. it is very expensive. two times in its history cut above that in one is the tech bubble so you are paying very lofty valuations.
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>> lowest of on average on record. >> it is amazing and there is a like pavlov'ss dogs. buy.e market gets, they they --t apparent, but there are risks. tax cuts are not going to come anytime soon. repeal.he health care monthsent the first two citing the media and now he is doing things on foreign policy because he can't get anything done domestically. i think the markets not putting a premium.
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we're at the point where it is going to reverse. that is going to create a stronger dollar. industrial. >> the banks are going to be a beneficiary of the continuous improvement of the economic outlook. they are sort of diminishing in europe a little bit. merkel is pushing towards china -- shouldk that is --ope and china invented china band together >> -- political risk from italy.
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>> we are used to dealing with it. . think risks nothing like then they have addressed some of their bad loans. i don't think we have a systemic contingent what we would have a few years. it is just by construction how is and i think the market has adapted. doesn't mean much in the long-term. some point in the next 20-25 years, the world is going to there is tons of
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dollars of oil in a row that will not get taken out. there's reasons why everyone wants to maximize production. >> just want to bring you some live pictures. bloomberg customers can now follow that on life. >> coming up today including cold hard cash. the world's largest owner of banknotes gosar money some matters. plus, more exclusive from james gorman. this is bloomberg.
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change in atum will positive direction. >> let's bring you some live pictures. be an been saying it will immense of the damaging process and says the eu must possess the patients punish the u.k.. he says the eu needs to be radically reinvented. the man who made a few pennies sorting the pound a few years ago.
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the company says 85% of global transactions. everything in good shape? some of current >> absolutely. reallyk we made some solid progress on our strategy. we had a good set of financial results. . the process here -- what can you tell us? >> i can say too much.
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we have the contract here in the u.k. to provide the british passport. we are proud to work closely and the british government it is an iconic symbol. we will be working with the british government. >> how valuable is that to you? >> it is a large contract. should not overstated. we work with 40 countries around the world producing passports. a close relationship helps us in the market. more credibility. met is not for me to
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decide. but as for the british government to decide. i think people get passionate about their passport. it helps you travel. you connect to different countries. certainly some of those -- >> there is a new bank in case anyone missed it. >> we have a 10 year contract with the bank of england to design the bank note. -- i thinkis a very
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when you compare, you can see how much currency has moved on between the two. on.s something we focus capturing interest in design that will engage with the public like a passport. there are a lot -- a lot of security features in a bank no. >> holiday provoking? we think -- how are they evolving? to look at trying -- there are
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various features. there's all sorts of things in part of our strategy, we are increasing our investment in material science to make sure we can keep ahead not just here in the u.k., but around the world. i think for business like , we aree over 80% working with 140 countries around the world so we are not the sort about the u.k.. we are working on a global stage. cracks we talk about brexit in the u.k. election. does the election have an impact on you or not?
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the next week will be exciting. does it affect you are not? >> it is not really for me to comment on politics. governmentlavor of is formed a week from today, i guess what is important is for me to have a government supported by the british industry. i think it is important the british industry have support from the british government and have the right kind of -- right kind of environment. >> i think we are a great of trade on a global
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stage. -- ook >> is cash that or not? >> people talk about it. the amount of cash in circulation globally is increasing at about 45% year on year. 85% of all transactions in the world are cash-based. there many people don't have a bake account. the only way they can engage in the global economy is through cash. i think it will be an important part for many years. >> thanks for joining us. just want to get back to those live pictures. he says china is prepared to incorporate globally on climate
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change. passive aggressors talk about -- we have more of the exclusive interview. this is bloomberg.
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mark: live pictures from the st. --ersburg economic foreign you can fall the slide. getting interesting comments from the central bank governor regulation should be smart. regulators have created some moral hazard. -- we will come back to that. morgan stanley james gorman says similar is making
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clients to jb and morgan. >> i think it would be hard. we're all in the same markets and have similar clients. the environment towards the end quarter.rst how that plays over the next 46 weeks remains to be seen. it is a very interesting in parma. there's this very passive perspective and i think the theside risk is weighing upside risk. that could change quickly.
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we have things coming out of the white house every day. there are plenty of opportunities to trigger a trading environment. i don't think we are very different from reality. >> is it a lack of volatility? .> it is a lack of engagement it is unusual. we're seeing very subdued activity and suddenly the political backdrop is quite uncertain. it is uncertain. it won't last. much tradingght up activity month by month. >> i want to get thoughts on the politics. aroundhave a target for 9% to 11%. is that target on track? the first 10.5% on quarter. i don't expect every quarter to
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hit the tide. we want to demonstrate very high capital levels. with very high equity, that we , could we generate a return of that percent to 11%? we believe we could. we are pretty comfortable with the outlook. >> let's get to breaking news from the time finance minister. he says the eu has reached an agreement in principle. the restructuring plan will enable him cautionary -- the ecb must confirm the
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solvency of it. berlin, a meeting with angela merkel china will send my it's tied to the paris record. we will continue to monitor developments in berlin. bloomberg surveillance continues . this is bloomberg.
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♪ tom: june signals house of
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cards. the prime minister, the bbc debate, tory outrage. call it the white house warming. confidants are divided over the paris accord. and on the state of global wall tells tommes gorman mackenzie we are not going back to 2006. good morning. this is "bloomberg surveillance." i am tom keene. why did this happen? what a lot of people are asking. you have comments from the liberal democrats saying theresa may could not be bothered to come up to the debate.
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it is a little controversy all. we had this debate happening on tv. you can see some reaction in sterling. conservatives have a three-point lead and a weaker sterling this morning. perhaps partly in reaction to that. general concerns and jitters around june 8. your firstnow with word news, here is jessica summers. jessica: president trump will announce if the u.s. will remain in the paris agreement at 2:00 p.m. eastern. people familiar with the deliberations say he is leaning towards walking away. calledsident has climate change a hoax. looking torump is rescind rules on power plant emissions and methane leaks. raising the stakes on the investigation into russian investigation meddling.
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they are demanding a number of documents. the president's personal lawyer has been subpoenaed. is nothingthere linking him to what he calls a fake rushing conspiracy. the taliban denies it is responsible for the truck bomb that exploded in kabul. it blew up in an area filled with embassies. 9 americans were slightly wounded. theresa may getting slammed for skipping last night's televised debate. leaders say it shows she is not fit to lead britain. she was represented by one of the most seniors in her party. has bundledr labour to three points. global news 24 hours a day powered by more than 2600 journalists and analysts in more
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than 120 countries. i am jessica summers. this is bloomberg. check, a lot going on this morning. .sia, asia, asia 91.99 basis points. it shows you the challenges of the last five days. oil gets my attention. euro-sterling. the renminbi is stronger. this is a concoction, a soup. we will have a conversation with the prime minister of australia, timely. all you need to know is iron or sells. big dollar-yen.
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a bit of sterling weakness. below 128 in yesterday's session before recovering. european stocks starting this month on the front foot after losing a little. tom: any number of ways to look at what is going on in asia. to is between japan and the rest of asia. this is renminbi, the chinese currency. this shows the abrupt strengthening. this is a strengthening down of the chinese yuan. 3.3 standard deviations. for those of you doing math in this early hour in new york that is a fitted standard deviation where i fitted the point to the blue. you have a substantial managed and stronger moves in the chinese yuan. anything out of 4 standard deviations is a big deal.
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right now, three point three standard deviations. i did that for anyone studying for the cfa exams this weekend. is not me. we looked at developed markets in the u.s. you talked about an inverted yield curve. i have the yield curve, the 10 against the five. you can see the yield curve did invert for about a week earlier. tom: very cool. nejra: we are out of those words now, tom. tax five years you can see the trend, how rarely that happened. we have this little inversion here. what does this say about the prospect of recession in china? on the bloomberg, it is said don't look at this the same a you look at the u.s. because this is about intervention as
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well. u.s. economy continue to grow modestly or modestly in all recent weeks. morgan stanley ceo tells bloomberg she is encouraged by the performance of the u.s. >> we hope the administration can pull some of this together. we need progress on some of these legislative programs. >> are you concerned about the u.s. economy? >> no. i'm very encouraged. the dirty secret is the u.s. economy is doing fine. nejra: all of this comes as the dallas fed president told tom he is sticking to his outlook for two more rate increases this year. let's get to our guest host, paul donovan. make to have you on the program. comments fromthe james gorman, he talked about falling unemployment, recovery in housing prices, and quickening inflation. a lot of other people don't.
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-- that is something i want to pick up on, a lot of other people don't. storythe big inflation was the aberration, the unusual drop in oil prices is over. over six inflation of months. that was blindingly obvious. every economist and this would happen. normal,re back to literally to normal. every consumer price inflation the 20 is at or above year average. pc to plate or core headline, it doesn't matter what you look at. that tells us we are in a normal environment. you will get quirks, noise, verizon mobile phone thing that causes momentary distortion, but we are in a normal inflation environment.
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nejra: do you think the fed is at risk of getting behind the curve? atl: i think they have been risk. they're coming out with a clear plan for continuing to tighten monetary policy. the interesting story is what they're are doing on quantitative policy, that they are preparing a multi-year passive tightening of quantitative policies is the story. tom: congratulations on your note on inflation. i thought it was nuanced. you know where robert kaplan was yesterday of the dallas fed. the idea that is inflation is odd, local, and what was interesting to me is the idea that it inflation is subtle. what do you mean by "subtle inflation?" the brute force of the oil last dropping 75% over the two years. nothing can stand in the way of
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the oil price collapsing in that dramatic manner. normal.are back to the oil prices are up and down, but not 75% moves. we are paying attention to the quirks, the subtle patterns of inflation. it is things like the hydronic ments to mobile prices. it is an up and down movement in terms of eurozone inflation. we are back to more detailed works. we shouldn't extrapolate these from long-term trends. verizon will not increase the amount of data you can download every year. this is not a long-term trend, just noise. tom: the most mail that i get is how to tie a bow tie, the next is what is the level of
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inflation? our audience does not by janet yellen's level of inflation. what is inflation now? everyone should be able to tie their own bowtie, or employee a valet to do it for them. everyone gets inflation wrong. consumers are useless at forecasting inflation. markets are useless at forecasting inflation. only economists can forecast inflation. the prices of things they don't buy frequently. can you remember the price of the last television you bought? i bet you have a reasonable idea of what the last couple of coffee cost you, because that is a recent purchase. to pull are unduly drawn high-frequency purchases, so they get a distorted idea of prices. and people remember when prices go up, not 20 prices go down.
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stay with us. toing up, lots more to get on surveillance. we hear from the prime minister of australia at 5:30 a.m. in new york. 7:30 p.m. in sydney. this is bloomberg. ♪
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tom: bloomberg surveillance. your comments, mr. kaplan. thank you to the council on foreign relations. "bloomberg surveillance." right now, to our bloomberg business flash, here is jessica summers. bank steppingche up hiring for its asia business
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adding 50 positions in the second half of the year. in asia bank's business has suffered two years of declining assets under management. the chairman of russian btb banks says they are in a cold war. >> what we see in america, unfortunately, is that russia is a playing card. when those who oppose trump are preventing him from performing his duty as a president. that is why we, the russian-american relationship, is in conflict. jessica: we will talk to the chairman of rush's bank at 6:00 p.m. eastern. nejra: thanks. theresa may's decision to skip a televised election debate
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rebounds on her as other parties lambasted her absence saying improve she is unfit to lead britain. the prime minister cannot be bothered, we were told. >> the prime minister is not here tonight. she can't be bothered, so why should you? fact, why not make yourself a broom? you are not worth theresa may's time, do not give her yours. nejra: for more, bloomberg news u.k. government team and paul donovan also still with us. let me go to you first. surely this wasn't about theresa may just being not bother to turn up? >> the interesting and weird history of political tv debates only does back to 2010. the general view is you don't want to be the most important person in the debate, because everyone turns on you.
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david cameron did several in 2010 when he was the challenger. may has decided to do none. what is happening in the polls? one shows conservatives with a three-point lead? yes, but this is not directly related to the debate as far as we know. lastwe have seen in the two weeks is a massive narrowing of the tory lead. when the campaign started four weeks ago, the tories were literally pulling twice as much as the labour party. there was always doubt as to whether that was sustainable. some people thought it was. tom: look at this video. it looks like a game show. did they borrow a game show set? robert: it is difficult when you
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have so many leaders. it looks like kraft pop. you have to do something with them. tom: in america, we would be flabbergasted that the lead voice did not want to participate in a debate with the bbc. what does the average voter think of her no-show? robert: well, we don't know. we are waiting for the polling. she is doing other things. slightly nervy to know she is not doing a debate. something with sky on monday. the viewers who did not notice will say, "i think she did something." they did make a lot of it last night and there is no way that it looks good. must-read,orning
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this was written on the 31st, yesterday. political parts that seemed is diverging while america has taken 100 days to 's alternativeump reality. almost no one in britain is questioning the alternative despite theer exit, unexpected opportunity afforded by the june 8 election to avoid a self-destructive rupture from europe. kaletsky saying we are seeing britain is the odd one out. some americans never 'sught trump -- bought trump agenda, but he has strong support amongst his supporters. you have a polarized country. in the u.k., you could argue we don't have a polarized country.
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since the referendum, you have seen 75% of the population saying, get out and get on with it. half the people that voted for theresa may are saying, we did n't get our way, what we don't want a second referendum. there is a more polarized approach in the u.s. for france, let's see what comes out of their national assembly election. tom: i need more wisdom on the election.f a snap coming up, a snap announcement by the president of the united states. he will speak of a deeply divided white house and the paris climate accord statement. a huge moment.
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tom: "bloomberg surveillance." for francinen lacqua. a lot going on, the president speaking it 3:00 p.m. this afternoon, a big deal. yesterday, a joy to speak with mr. kaplan of dallas. we have japan in read, the ecb in blue, the fed balance sheet in white. this is the big move by the fed. the euro comes up and says no, this is a percentage.
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this is the disaster known as japan. i thought it was great how mr. thean said managing choreography. what is the choreography for mr. draghi to bring the balance sheet down to where the germans want it? paul: i don't think mr. draghi is necessarily going to bring it down to where the germans want it that quickly. we are about to see mario draghi toer into a 12 step program hear his addiction to reason. the first stage will get over the course of the summer, maybe this month, is change in the language. you make some kind of announcement about the scale may be at the september meeting. then, you taper over the course of 2018. draghi will be pushing for a
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long, slow taper with the germans and others pushing for a faster taper. tom: i was stunned that mr. kaplan paid respect to the tantrum that could occur in this movement. with balance sheet tapering, he was very careful. together, butd which is the horse and which is the cart? is proposing, at this stage according to the , to pre-announce a complete tightening program. this is where we want the balance sheet in three or five , and this is what we'll do each quarter. on the monetary policy side, not the quantitative policy side. concernsore about about fed independence, myself, realizing she may not
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be in office after january is trying to pre-commit. tom: paul donovan with ubs. with, a conversation christine todd whitman. what a wonderful time to speak with the former governor of new jersey. she has been diplomatic and her criticisms of donald trump. governor whitman speaking with her knowledge of the environmental protection agency. kevin cirilli scheduled to join us later ar. at 3:00, the president speaks on paris. this is bloomberg. ♪
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of ave pictures german-china business
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conference. he is saying they complement each other perfectly and all actors must play a role on north korea. he is saying china will stand by the paris of court. executives are pushing tromped to stay in the paris climate change accord. familiar with the matter say he is leaning towards walking away from the deal. san francisco fed president john williams says the fed could raise the interest rate four times this year if the economy gets stronger. the u.s. economy is on a good growth track. the next step will be to reduce
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the balance sheet. hill, some are signaling the intent to push back on the moves to improve relations with russia. the senate banking committee wants to toughen sanctions. sectors oftargets the russian economy, including mining and railways. republicans are pressing for more shank things -- more sanctions. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am jessica summers. news acrossing bloomberg. ppg to which raw its proposal
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and not pursue an offer for axorent of ellie -- noveli. the u.s. is still a reliable trade partner. he also said chinese leaders need to do more to lane in north korea. reckless,ombat is dangerous, and becoming more so. china has the greatest leverage. with the greatest leverage comes the greatest responsibility. past ofdo our sanctions, but we look to beijing to bring the pressure to yangon the regime in p on -- pyongyang.
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>> the recent g7 seems to portend something of a seismic shift when it comes to global alliances. angela merkel suggesting germany cannot rely on the u.s., u.k. europeans must take charge of their destiny. be lookingance can fractured, what does that mean for australia? you say the u.s. and australia values, but dod they? >> of course they do. the alliance is more important than ever. president trump and i , our commitment, the commitment of our two nations, based on our history,
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our shared values andnations in, is stronger than ever. >> is their concern trump has proven himself to be irrational, erratic when it comes to policy decisions, and other times, transactional. is that level of good faith something that can be relied on? >> the relationship is in the best of health. the relationship is as strong as any relationship should be. based on history, shared values, common interests. the closest possible engagement at every level. people toconomic, people, family. it is the closest possible relationship and it gets stronger all the time. >> scotland yard was forced to suspend intelligence sharing after reports following manchester. formation had been leaked.
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has australia sought reassurances from the u.s. that any intelligence shared would remain confidential? isintelligence relationship intensely close. we have every confidence in the confidentiality of the intelligence we share with our friends in the united states, just as they do in the confidence we give in the intelligence they share with us. it is more important than ever in the battle against terrorism. it is a global phenomenon. , islamicl threat terrorism extends from europe to the middle east, to asia, america, australia.
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>> have you sought assurances from trump? assured on the security and strongest confidentiality between our intelligence services. it is a relationship of many decades standing and one that is as rocksolid and part of the alliance. 29th prime is the minister of australia. he had a back-and-forth on the telephone with the president of the united states after the inauguration. we have paul donovan. tell me about the mercantile world. australia is a trading nation, the nexus of mining. in one part of the asian dynamic. is it a more mercantile world? paul: it is the reverse.
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packing teace on chests onto sailing ships and sailing them around the world is gone. we are seeing the peak of global trade in stocks, manufactured product. the expansion of global trade over the last 20 years has been about applied chains getting longer and longer. with robotics, artificial intelligence, they are starting to get shorter. goodse cases, physical are not being traded at all. when is the last time you bought a compact disc? no one buys them. you download music. au have replaced a good with service. that is what is happening with trade. whenthe proper question is did i buy a 78 rpm record with a
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needle that you put in up at the -- up in the attic so you can listen to your mother's glenn miller records. net experts for any nate -- net are youfor any nation, telling me we should analyze them on domestic economy and take the annex out of gdp? going to bee are trading in the future is intellectual property, services. that will be more important. if you are rushing out to buy the justin bieber album, you are downloading property from him. if i am doing that, i am importing in canada. you are still creating something , on the in the economy arguable assumption a justin bieber album adds value. the data we have today does not capture this. nejra: if we are talking about a
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trade inolden -- of stuff and china rises as the next world power against the u.s., what does this week of global trade in stuff do for china? paul: it is not good. their competitive advantage, their model over the last 20 years has been an important link in these supply chains. if the supply chains are starting to crunch down, china gets bypassed. needs to do is focus on intellectual services, on the intellectual property value and that has not been its forte over the last 20 years. paul donovan of ubs, staying with us. vladimirheadlines from putin, holding a news briefing in moscow.
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he says certain countries are trying to contain russia. i see russia-phobia in some countries. erik schatzker sits down with a ceo. this is bloomberg. ♪
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nejra: you are watching surveillance. the economic forum is in full spring -- full slowing and we are heading to erik schatzker. he is joined by alexey mordoshov. erik: good to see you.
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you are in the steel business. like freeteel, you trade. you like to see the free movement of goods across the globe. what does the apparent move towards protectionism in the united states represent? -- driven by the -- of global trade . i believe we should not forget the contribution global trade makes in the development of the world the past 15 years.
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erik: what are you most concerned about? which country concerns you the most? alexey: i cannot distinguish anything. erik: between the united states and europe? -- the those that developed world, i am afraid -- reciprocity. there is noears protectionism. erik: is that what you expect? we will see a domino tumble of tariffs? know.: i do not i hope there is enough common sense among policymakers to stop it. it probably makes sense to discuss certain rules on this to make it more transparent and rule-based. [indiscernible]
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supposed to be measured against unfair trade. we see more examples [indiscernible] where the protection is measured. we should have more open transparencies. mr. trump: he will consider major action if his andnistration decides steel --.inum imports affect the united states needs steel imports because of supply demand barriers. any substantial distortion, deterioration from free trade [indiscernible] eventually, we will all pay for it. eric says he has also said he
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wants the u.s. government and american companies to buy american when it comes to steal. given your experience, will a buy american policy help u.s. steel suppliers? alexey: difficult to say. short-term, it could make some impact. undermines run, it free trade. [indiscernible] the u.s. -- during the great and the widely spread conviction is more protection is driven by short-term --.
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substantial deterioration -- in the u.s. in the world at that time. erik: you have suggested the oversupply situation in the steel market can only be state level.the countries have to decide to cut productions. do you feel that way? alexey: i don't know for sure. we should openly discuss it and get engaged, involve all interested parties. we should engage governments in the discussions, to have open dialogue. capacity generation is very risky for the health of industry long-term.
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the world needs steel. healthy to have a sustainable steel industry. [indiscernible] some subsidies, some inferences, whichlements [indiscernible] probably, it is helpful. far, we don't have open dialogue. there is a gleam of hope. -- previous -- mentioned he
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and should be addressed on the global level. i hope it could be the foundation. erik: thank you. that is alexey mordashov. you heard it, a glimmer of hope. nejra: thank you. erik schatzker for us. i want to draw your attention to tv . you can see erik schatzker there. paul donovan, can you remember the last part of your tv? this is bloomberg. ♪
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tom: good morning. eye.scratching my it is the pollutants and our studio. china and climate change. look at the pollution of beijing. in the winter, the pollution is terrible. inly may, in boot -- beijing, they called it an
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airpocolypse. how do you link the president and the paris accords to the airpocolypse with beijing air pollution? 's retreat from paris does not necessarily change that much in terms of the approach to climate. are moving pollution, climate change, the , allonmental credit crunch of this is constraining profitability. changing corporate action. pulls outether trump of paris or not, i don't think this makes a difference to how investable companies are going to behave. tom: give us a league of nations
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compare and contrast. i saw a chart yesterday saying we are joining syria and nicaragua in our opposition to this accord. what?" to big "so what we are going to hear at 3:00 p.m.? there are two issues to focus on. if you are a small company in america, you don't have global shareholders or customers. comply withot you climate change issues is going to be dependence on what your local, domestic customer base is up to. small businesses could change the u.s. economy. thing, changing international policy. china and the eu are being herded together by the policy approach of trump. this changes international
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diplomacy. look at the diplomacy around ofs and what is coming out that over the medium-term, what it might mean for the economy. china will stand by its paris climate accord pledges. you talk about the impact to the economy, what is the impact as we see the u.s. isolationism in this impact? paul: you might start to see protectionism. protectionism based on climate issues. you don't meet our standards, you don't sell goods in our country. that is one of the new forms of protectionism coming through. something negotiations have been , but it is notnt progressing far under trump. it does create a vulnerability, potentially, for the united states. paul, thank you.
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erik schatzker is in st. petersburg. it we will continue our coverage in st. petersburg through the morning. afternoon, at 3:00, i cannot wait to talk to kevin cirilli. a divided white house. this is something. will throw ratification of the paris accord to the senate. there is a beautiful general motors building, the." , and central park. ♪
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tom: white house warming as trump confidants are deeply
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divided this morning over the paris accord. theresa may and jeremy corbyn, june signals a house of cards as the prime minister skips the bbc debate. tells tom mackenzie we are not going back to 2006. this is "bloomberg surveillance." election, rob confused me last hour. doesn't every article say theresa may is going to win anyway? nejra: polls have been tightening. people are sticking with the original view, but we are seeing jitters in sterling and that is what you have to look at.
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volatility is rising. on the risk reversals. tom: it is amazing. we will talk about risk and election reversals. first word news in paris, here's jessica summers. jessica: trump will announce whether the u.s. will remain in the climate agreement. two people say he is leaning towards walking away from the deal. the president has called climate change a hoax. has raisedommittee the stakes in the investigation of russian election meddling. they are demanding a number of documents. the president's personal lawyer was also subpoenaed. said there was nothing linking him to what he is calling a fake russian conspiracy. a truck bomb exploded --
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exploded in kabul. may isu.k., theresa getting slammed for skipping last night's debate. leaders say it shows she is not fit to lead. l shows the 20% lead over labor has dwindled to three hasts -- lead over labour dwindled to three points. tom: equities, bonds, currencies, commodities. we want to get to our guests. equities churning. much flatter than disco weeks ago. oil has found a bid. 48.60 on west texas intermediate. or, it cannot find a bid.
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heidi with her prime -- with her conversation with the prime minister of australia. nejra: is a going to snap a five losing streak. the polls are just a week away. a trading envelope is typically two's standard deviations. huge move and asia. there is something going on. you can see it correlated together.
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let me go to the morning must-read. freeze.brain i was worried about the u.k. elections. -- trump's policies corporate interests at that pay the campaign bills and effectively run the u.s. government. powerful corporate lobbies have bought their way to power. handed them the keys to state, epa, and the energy department. we get a briefing on what we are going to see from kevin cirilli. it is a gilded age. >> from a political standpoint, you have to remember this is largely politically ideology ideology debate.
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it is worth noting, there is a lot of intrigue. noting outside groups who have lobbied for and brothers,is, the koch very powerful in washington. they have been against the paris and aregreement significant within the president's administration. tom: i see the idea that the president can punt this to the senate. how does that happen? i was speaking with an expert yesterday to go through the process. in the sense this was never ratified, as a result, by some experts view the
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paris accord agreement as something that should have been ratified by the senate during the obama administration. if that is the case, we are going to talk about the paris accord agreement for a long time. the downside is the senate already has it hands full. they have to keep the government open when we hit the debt ceiling. nejra: regardless of what happens with climate accord, companies are going to do their own thing. is this how you think it will play out in the u.s.? >> yes. there is nothing wrong with having people who have corporate backgrounds in administration.
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flipside, when you look at regulatory matters, especially on the issue of federal reserve policy, this is a more global a stick administration. issues, other, flashy like the paris climate accord and tax reform, that is going to drive significant headlines in terms of what breaks through. internationalo financial regulatory policy, this is a much more global a stick administration -- much administration. we do a made-june reset. people likeolistic you, looking at the larger picture. to begin.ow where let's begin with janet yellen. does anyone care what central
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banks are going to do? >> investors should care what central banks are going to do. for years investors have wondered what is going to be the thisf this will market or credit cycle. the ideal bull markets die of old age is not true. they die when the federal when the federal reserve kills them with rate hikes. it is signaling a slowdown in the united states and the bond market is not latching onto the reflation trade we thought we had. tom: do you see reflation or a vector of inflation moving up. >> i am skeptical. we have a low unemployment rate, wages that are modest. they are not climbing significantly. the federal reserve is going to
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raise interest rates and the long-term bond market is not latching onto that reflation trade. isare not saying this cycle ending, but that the risks are widening. nejra: some people point to the risks being in china. you see the risk to the global economy centralized in the u.s. >> we have gone through a prolonged cycle. tightert has led to is policy in the united states. we were looking for the stimulus to extend the cycle. that stimulus is still not forthcoming. in other parts of the world, it
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took much longer to get going. china had a large stimulus. china is now tightening policy. we will watch china, as well. the secular story in china, they aansfer to -- the transfer to more consumer-based economy is alive and well. what does this mean for positioning around the dollar? >> investors or convinced the dollar would be strong, you can only invest in u.s. dollar assets. of the year,inning it has been the opposite. trended lower. it is a big surprise of this year. tom: we did the morning
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must-read. dr. sachs of columbia will join us tomorrow. we have a spectacular lineup for you on jobs day. sachs with his outrage about the state of american society. look for that tomorrow. this afternoon, 3:00 p.m., the president on the paris accord. this is bloomberg. ♪
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tom: good morning. right now, we go to the bloomberg business flash. >> first-quarter revenue rose and lost is narrowed at uber.
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lost 780 million dollars on revenue of $3.8 billion. the head of finance has step down. investors have questioned whether he had the experience to lead uber through an ipo. -- plans to add positions in the second half of the year. deutsche bank has suffered two years of declining assets under management. tom: tom mackenzie with the chief executive officer of morgan stanley, james gorman. so much of wall street is about the market. -- arey day, you should
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we getting there because of irning expectations growing don't see upside without further confirmation in the story, but i do not the and overvalued market. tom: that was beautiful on the parsing of the market. let me talk about what you said abouttom: that this or is it th. >> i like to look at price sales. it is a good indicator.
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returns in the united states are going to be more muted. stocks are quite cheap. stocks still seem more attractive. if you look at -- investors are buying broad indices. if you look at the top 10 names, they are trading around 3.5. that is elevated. this is an environment that should favor active managers. tom: let's go to the chart. for those of you studying for
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cfa exam, this will be on level two. movingre cfa gorgeous averages, which means you get in the market and stay in the market. how do you courage to stay in the market? for a variety of reasons. we are likely in a longer term bull market. it does not mean returns will be like they were, more modest returns, boeing when you compare stocks to other asset classes, they appear reasonable. u.s. economies plodding along a couple of percent growth, that should be reasonably supportive for earnings, but not to be massively inflationary. when the risks are rising in the united states, if we want the cycle to continue, the federal reserve will have to back off,
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given where wages are, where inflation is. the credit of market? where are the equities going? spreads get fairly tight in credit markets. we have seen credit spreads quite tight. environments tight for a prolonged period of time. i don't think we are in the cycle where you should expect significant price returning credit. we have taken care of that. you are in a coupon clipping environment. credit will be the first to go. we watch it closely. cyclesrkets and credit end with a lot of exuberance. we don't see that yet. tom: we do not see it yet. we will come back with brian. , the former governor
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of new jersey. she had a tour of duty at epa. the perfect time to speak to tom whitman about paris. this is bloomberg. ♪
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tom: we welcome you. the president speaking on the paris accord later.
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been trade.nter has it would be nice to speak to someone with perspective and experience. to gary, working with adam pozen and olivia. he is authoritative. america's up his perspective on global trade? what are your to do list for the president of the united states? a track that is not productive. he picks out countries that have a bilateral trade surplus with the u.s. and goes after them and havethat is evidence you been unfair and his current attack in the last week was germany. sense. not make a lot of
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in the case of germany, he made the double mistake of thinking germany controlled the trade policy of europe. that is not correct. or that germany controlled the value of the euro. that is not correct. one of the things germany can do to reduce its global, not bilateral, but global surplus, but not the things trump talked about. naive about what the dollar will do? your colleague has done historic work on this. you worry we are naive about an abrupt dollar move? either stronger or weaker? >> no. it is misplaced to be worried about a strong dollar move, either down or up.
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the market does reflect the news that is out there. right now, the news on the tax mark ofa big question whether it is going to happen. if you don't have a big tax bill, there is not a lot of reason for the dollar to change its value much from where it is now. this is not a big concern of mine. which three economic policies could trump all for angela merkel to enact? merkel tod call for cut taxes. he loves cutting taxes here. germany has more room to cut taxes than we do. relativerage tax bill to gdp is 41%. ours is about 26%. i am sure germans would welcome
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a cut in taxes. that would be a big help. merkely, he could urge to do a deal with the unions. in germany.s rise they are out of line. they are way out of line in germany. they could go up 5% to 10%. more could be infrastructure spending. these are reasonable things to ask merkel. nejra: indeed. coming up, we are live from st. petersburg international economic forum. this is bloomberg. ♪
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nejra: i'm nejra cehic in london. tom keene in new york. here's jessica summers. >> top corporate executives are
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pushing president trump to keep pariss. in the landmark climate change record. he announces his decision today at 3:00 p.m. he is leaning toward walking away from the deal. among those appealing the u.s. to stay on board, apple, elon musk. central bank can raise interest rates four times this year if the economy gets sterner. he says the next big step for the fed will be to reduce the size of its balance sheet. that's likely to happen later this year. security and terrorism continues to be a big issue for world leaders at a time of changing dynamics. hadralia's prime minister this to say on intelligence cooperation and the global terror threat. >> asia the americas australia.
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the sharing of intelligence not just between the five eyes but between all nations committed is more important than ever. >> global news .4 hours a day powered by more than 2600 journalists and analysts in more countries. tom: it is st. petersburg. not florida, st. petersburg russia. the 20 anniversary of the economic forum that was put together in 1997. and005 mr. putin showed up it was a must attend. all that changed with ukraine and crimea. it has become a very different summit. erik schatzker is there with an important guest. erik: i'm here with mr. putin's economy minister. this. begin with
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russia's agreement with opec to extend oil production cuts as far has failed to lift prices. if prices don't rise from current levels, of how much goodwill that agreement be to the economy? >> it is not failed at all. if you look at the price levels we saw a year ago, they were much lower. the agreement is already
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+++ reach. we are targeting tighter short-term end of the curve. i do not understand why in the midterm long-term -- what is the strategy of those hedge funds from the show producers for one year. erik: which risk specifically? >> those funds that are on the other side of the yield from the hedging are taking huge risks. erik: is that your expectation? that once this extension is over oil prices will drop substantially? wein medium to longer-term will do everything that is possible to bring the inventory levels lower levels and make the markets tight on the short end of the curve. if that doesn't happen do you extend the cuts even more? >> it does not depend on the oil prices as much as five or 10 years ago. erik: it's still important though. >> not that much. key assumption. they are all based on these assumptions and we are ready to leave forever with all prices -- live forever with $40 or below. it's not a problem for us. erik: let me ask you about
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capital outflows. they were down last year by 75% to about 15 billion u.s. dollars. it's june 1. do you expect another net outflow for 2017? in march alone we've got more than 3 billion in the government market. typically when talking to the -- russia, turkey and south africa. turkey is double-digit inflation. in russia we have new phases of growth. the is why money goes into -- we might expect a decision with the capital flows will be much better. erik: if it was $15 billion outflow last year what do you expect for 2017? >> much stronger inflows.
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russian campaign might start investing abroad. the structure will be totally different. your government wants the russian economy to be more investment driven. the constant borrowing is down. they aren't making investments. what can you do to change that? >> they are making investments. if you look at the recent data. what we will be trying to do to diminish as much as possible stems from the predictability grading and the predictable environment. erik: president trump's top economic adviser warned over the weekend that it's possible the u.s. will toughen sanctions on russia. is that now the probable scenario? that much.'t matter
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we are concentrating on what is happening in our economy. happening inside russia is much more important for us than what is happening outside. erik: it may be more important but i can't imagine sanctions don't matter. >> it may be important for u.s., but not for russia. in terms of new investments we're just waiting on those issues. erik: your concentrating on those issues. >> we are not dependent on the capital flows of the other markets. to live without huge inflows from the global capital market. local progress means much more for us. from thefollowed sanctions and no followed from the investigations taking place in the u.s. congress? >> it doesn't matter much for
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us. erik: thank you very much. economy minister here in russia. we are live at the st. petersburg international economic forum. oil, brian levitt is with oppenheimer funds. there is four oppenheimer's. it's a little confusing. you own frontier e.m. international investments. i've got oppenheimer and affect oil.- i've got what are the ramifications if you get $40 a barrel oil? >> not significant. we manage the largest emerging-market strategy in the industry and that is focusing on great companies in the emerging markets. great growth stories. it has never been driven by the price of commodities. cheap oil prices benefits
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the oppenheimer companies. urbanization of the chinese cities and now with housing reform we have a urbanization of the more rural areas of china. that is creating huge demands for goods and services and a lot of companies are benefiting. it has never been a commodity story and is not likely to be a commodity story going forward. we were getting comments out of opec saying that could be $60. we were away from that world of $100 a barrel oil. to get to $60 barrel oil you will need to see significant pickup in economic activity. supply there is a strong of oil in the united states, north america and other parts of the world. you would likely need to see a pretty significant pickup or deterioration in the u.s.
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dollar. neither of which we expect to happen. we are not believing that oil is going from where we are today to $60 a barrel. core inflation in the united states is still generally modest. a lot of that is going to be driven by wage growth. 2%, 2.5% and somewhat rolling over on the last data point is not an indication of significant pickup in inflation in the united states right now. commodities not having much of an impact on oppenheimer. any concerns over iron oil? impact toh it as an production. our expectation is that in a slow growth world we are not going to see a significant bowl expansion in industrial metals.
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expansion as the emerging-market economies came online and the big driver of growth was china. we believe now we are behind that in the big bull market in commodities and industrial metals bond and we are believe we are in a longer-term market in equities. we are seeing nice returns in europe, in the emerging markets. our goodre focusing on growth stories, not commodity drivers. larger cap funds with oppenheimer funds as well. coming up tomorrow, we got a terrific lineup. we have really been working on america and the stresses of the american labor economy. we are honored to bring you jeffrey sachs of columbia university. this is bloomberg. ♪
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tom: bloomberg surveillance. tom keene in new york. nejra cehic in london. right now a business flash. here's jessica summers. >> ppg industries has ended its unwanted pursuit of akzonobel. won't make another proposal. it had rebuffed the latest $29.5 billion bid. activist investor elliott management want of the company to hold talks with ppg. the firm failed a legal attempt to fire the chairman. inkswagen may make more suvs factories in the u.s. it will bring it to full capacity by the year 2020. that could be complicated by uncertainty over the president
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and possible trade barriers. theresa may's decision to skip a televised election debate threatened to rebound on her as other party leaders lambasted her absence saying it proves she's unfit to lead britain. the prime minister is not here tonight. she can't be bothered so why should you? not make yourself a broom. you are not worth theresa may's time. don't give her yours. more, our guest host brian levitt. oppenheimer fund senior investment strategist. i'm not going to ask you where sterling is going. reversalsonth at risk . you can see the bearish
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sentiment increasing. ultimately is this about concerns that jeremy corbyn could come forward when we get the u.k. election next week? how likely is that from a political standpoint? >> it would be astonishing. it would be something that no one had seen coming. the poll doesn't quite -- they've got this model. what the result would be if we were to have the election now. if you go to any of the pollsters and say to them what do you think the result will be, almost all of them say they think theresa may will have a majority larger than 40. we have seen a few things in the last 12 months that nobody saw coming and people sitting at
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desks like this said that will definitely not happen. may losing her majority would be a political earthquake. --wouldn't be the poetess biggest political earthquake in the last 12 months. nejra: we were not as bearish as we were at the time of brexit. what should we keep an eye on in the next week that might get us ahead in terms of predicting properly what might happen on june 8 even as the election is highly unpredictable? >> the expectation is we are going to see a reversal in the polls. to see the tories open up a bit of a lead. question the tories have been asking is who do you want to be prime minister. the polling suggests they do quite well on it. labor is asking how big a majority do you want theresa may
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to have? a position where someone says i quite like theresa may but i don't want her to have a majority of 200. now you've got things that suggested jeremy corbyn could win. you might expect to see some kind of shift to i don't actually want that. it might be that people are looking at corbyn and saying, he turned up for the debate. that's the question, are we going to see a reversal of the tory lead? you will see real panic in the tory ranks next week. an acquisition. i love it. it's a foreign transaction. going after a construction company of about 40, 50 years old in germany. for a nice piece of change. i believe you would call this a hold on. bolt-on. -- most --
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todayn learn more of this on tv . ,ou can migrate to the right you can bring up an old section and there is a gorgeous chart. this is bloomberg. ♪
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tom: front and center today on foreign exchange. euro-yen showing stronger year weaker yen.s -- this is a big move. at this chinese yuan moment. bloomberg daybreak: asia's nothing without alix steel. here she is. the risks's one of that pimco highlighted yesterday saying, there's a 70% chance of a recession. one of the risks is a slowing china.
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we will be speaking to andrew balls. he is pimco's cio of global fixed income. you will be talking to him on radio as well. a really interesting breakdown. worried about china. i found that really interesting. tom: thank you for the conversation. this is the optimism chart. you remember the gloom. 10% unemployment. the world coming to an end as we know it. a lot of people got this call right. what they didn't get right was the stunning persistency of improvement under 5% down to the unbelievable level of 4%. brian levitt, the help wanted sign is out in america. >> it has been a stunning decline. it's what we should expect now some eight years into an
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environment where the u.s. has grown 2%. been enough to please most everyone and wages have been generally modest. a lot of it has accrued to profits and shareholders. given where we were in december 2008 this is a sustained improvement and warns looking at. tom: bonus round. this is our single best chart. the amazing most optimistic chart of america. that is claims adjusted for population. what is the symbolism that we helpnever been with such a wanted america and yet so much of america is miserable? >> the symbolism is the point i was making, we have had a good environment for job creation and we have not seen a lot of people laid off. we are in an environment, a
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secular environment where a lot of the profits are accruing to the shareholders and businesses and less to the workers. we have not seen a significant pickup in wages. we have not seen a significant pickup in median household income. we have seen a substantial pickup in u.s. corporate earnings. for investors that's been a good thing. u.s. markets are up 2.5 times. for workers we are seeing modest improvements but not enough to please the country as a whole. led to unexpected political outcomes in the united states and other parts of the world. nejra: i wanted to get your reaction to pimco's call. the 70% chance of a recession in the next five years given we are nine years into the recovery, not really sticking their neck out. it's not going to be the age
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of the cycle that matters. when i think about it from the perspective of the u.s. treasury yield curve we are at 1% on fed funds. 220 on the treasury rate. for the fed when can they raise rates if not now? credit spreads are ok, the dollar is generally weaker. when if not now? the problem is when you start to 2, 3, four rate hikes you can see how you could flatten the yield curve further and potentially inverted the yield curve over the next few years. we don't have to. all going to end like cycles with the fed raising interest rates. thank you for the briefing this morning.
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very valuable on international investment. tomorrow we will turn to the domestic labor economy. fromssor sachs will join columbia in the most timely conversation with william gross. we will do this in the 8:30, about five minutes after 8:30 on bloomberg radio and bloomberg television as well. bill gross today. what am i looking at? under $49 a barrel. something for west texas intermediate. john farrell will do some good currency reviews on daybreak here in a bit. it is a new york. it is a beautiful new york. ♪
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jonathan: jpmorgan and bank of
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america say second-quarter trading revenue may drop 10%. economic data in china suggest growth may have already peaked in 2017. factory output contracts for the first time in almost a year. and the president may pull out of the paris climate accord, asning syria and nicaragua the only countries not part of the deal. will to bloomberg daybreak. i'm jonathan ferro alongside david westin and alix steel. futures firmer on the market today. up about .1%. yields grind higher by a single basis point at 221 and euro-dollar pretty stable. governor jerome powell will give his take on monetary policy at the economic club of new york. he is the last fed governor to speak before the central bank's blackout window begins. -- period


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