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tv   Bloomberg Markets European Open  Bloomberg  June 29, 2018 2:30am-4:00am EDT

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morning and welcome to "the european open." cash trade is less than 30 minutes away. holding back the bears. asian stocks are set for their first gain this week as trade tensions simmer. europe looks set to follow suit. europe united. the single currency gets a boost after italy's prime minister secures a deal on immigration at his first leaders summit. plus, stressing deutsche bank.
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the u.s. unit failed the fed's stress test due to critical deficiencies. well more investors which the stock, already at an all-time low? we are less than a half-hour away from the open of european stock trading in berlin. take a look at the gains we are seeing in futures this morning. dax and cap futures are up more than 1%. ftse futures are 0.7%. more risk on today. investors are selling treasuries as well as bunds. take a look at the euro. if i can take one asset to show the news flow overnight, it would have to be the euro-dollar. you can also look at the euro against the pound, against the yen, it is up against all commerce. this is a three-day chart.
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it was the optimism out of the european summit, it went until 4:30 in the morning, but came to a deal that boosted the euro. we are seeing it come down a , maybe as concerns arise about angela merkel bringing that deal to berlin. let's get bloomberg first word news from juliette saly. juliette: italy's new prime minister has negotiated a package of measures at the eu summit to stem the flow of migrants into europe and spread the burden of handling arrivals. during talks in brussels that continued be on 4:30 this morning, member states agreed to increase border security, set up holding centers, and speed up the processing of applicants. leaders also agreed a key italian demand to overhaul rules for disturbing -- distributing why grants when a gateway country is overwhelmed.
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theresa may has accused the european union of putting its citizens at risk by blocking a deal on security. during a working dinner, may told fellow leaders britain wants to play a major role in european security after it leaves the bloc. the federal reserve stress test for wall street's top banks to rein in ambitious plans for pumping out cash, but with payouts at record levels. the four largest u.s. lenders said they will distribute more than $110 billion through dividends and stock buybacks. deutsche bank's u.s. unit was the only one to receive an objection. the company responded it had made significant investments to improve its capital planning capabilities as well as controls and infrastructure. the cofounder of carlyle group noid rubenstein says he sees signs of impending recession.
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>> i think the economy is in good shape this year and next year. something unexpected could come along. if we went into a tariff war, that would not be wonderful. i think there will be negotiations that will result. resolve. -- that is my hope. we may be on the ground the longest cycle ever of economic growth, but it could go on another year or two. i cannot find any economists who say we are going into recession in 2019. they do not say that. juliette: global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in this isn 120 countries bloomberg. matt: thanks very much. let's get more from our top story. this eu summit still ongoing today. our reporter maria is in
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brussels. a very long night for eu leaders. they were up until 4:30. what did they agree on migration? >> it was a long night, but a very contentious night in brussels. the sticking point, the italian government. the italian prime minister said he would veto the entire summit if he did not get a comprehensive migration deal. we have a deal of sorts. european leaders have agreed to set up migration control centers. they are not calling them camp's. basically, they are going to vet.to screen and that -- migrants who qualify for asylum will stay in europe. those who do not will be sent back. the timee for government, if a country feels overwhelmed by migrants, other nations are going to have to
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step in. enoughs this going to be to save german chancellor angela merkel when she comes back to berlin? or is it going to be the wrong thing for her to tell when she gets here? well, she know this came to the summit under massive pressure. -- said the agreement was positive. there are a lot of question marks. a lot of these points are voluntary. does get something to present at back home. take into consideration more controls over migrants will limit the secondary movement to germany. we are expecting more bilateral deals between germany and other nations. there is a sense in germany that
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a difficult time for a destabilizing the german government is not a good idea. matt: reporting all day today as well. let's get the trade impact from a mark cudmore. as i was showing, a big gain in the euro against all other major currencies. how can this be since angela merkel is going to come back to berlin and say that italy is going to be allowed to send more migrants north? mark: what is most important here is there was an agreement. not what the agreement is. you may see the surge in the euro come off a little bit in the european session. there was fear going into this weekend there would be no way to get an agreement. the italian government floated the idea of the towing any
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any idea -- vetoing from the summit. that would be a much bigger problem especially with the policies the italian government has taken fiscally. the fact there was an agreement is why the euro reacted. as we go into the european session, more local political specialists might go, this agreement is not so good, some of the euro surge might ease off. it does not seem fantastic from this vantage point. current trade war concerns? they have been hitting asian stocks. they continue to way down on the the yu the you want -- an. asian stocks bounced up overnight. a shiftere has been
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from chinese officials and i think these are issues that are not usually understood outside china. week,rst thing was last everyoneuld mention, with many other tightening measures, that is not the big news. officials ares saying they're starting to worry about market moves and they want to fight back. that is a change of a crotone. -- in tone. several years ago they were left providing a lot of support to markets. that was a subtle and important shift. that was reaffirmed when the advisory chip -- council said they are looking at global economic conditions and they are concerned about financial market stability. neither of those are normally mentioned by this panel.
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the fact they have mentioned is very important. it is not officially policy, but they will send their minutes to policymakers. that advisory panel is overseen by the governor of the pboc. chinese officials changed their and said, we are causing too much stress in the markets, and that is an important shift for chinese equities. matt: one of the most important questions this morning is whether or not england did a good thing by losing to belgium last night. are you concerned they will have trouble with columbia next? or does this clear the path for them to play some easy teams until the final? mark: i think they will get to the semifinal. they should have enough to be columbia. after that, they could get through switzerland as well. they will going to the semifinals probably against spain, possibly croatia.
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i think that is the stage we will see england stumble. i not time for the english press to get very excited -- enough time for the english press to get excited. marketou can follow life insights from mark on the bloomberg, type mliv on your terminal. up next, what can central banks do to help their struggling currencies? how can that help your portfolio? this is bloomberg. ♪
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matt: welcome back to "bloomberg markets." this is "the european open." futures are very positive. let's get the bloomberg business flash. xiaomi and investors are said to have raised $4.7 billion after the company's ipo priced at the low end. according to the source, the smartphone maker price chairs at 17 hong kong dollars each. the pricing values xiaomi at half the company's initial goal. thesche bank has failed first public stress test of its combined u.s. business. the federal reserve fault of the
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company's internal controls, saying there were critical deficiencies across capital planning practices. deutsche bank was the only foreign bank -- domestic or foreign bank to receive an objection. its business made investments to improve planning capabilities as well as control and infrastructure. novartis is to spin off its eye care business alcon as the company's new chief executive refocuses on prescription pharmaceuticals. the drugmaker will buy back up to $5 billion of shares using proceeds from the sale of its stake in a joint venture with another company. the spinoff is subject to final approval by the board and shareholders at the 2019 annual meeting. australia has awarded a 26 billion u.s. dollar contract for nine anti-submarine rickets -- to the u.k.'s bae systems.
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bae shares climbed in london while those of the unsuccessful italian better slumped -- bidder slumped. matt: juliette saly in hong kong. she flies back and forth, the jet set life. let's talk about equities in that region. ending the week on a high, but the region's benchmark is heading for the worst first half since 2010. at head of equity investment stater partner joins me now. partner joins me now. the overnight trade looks really strong. asian stocks were up big. >> we are bouncing back from a week start to the week on concerns about trade war's. maybe bargain hunters are helping to support markets.
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the overall backdrop is still negative in the short-term. why the weakness? has the weakness been due to donald trump trade war concerns? >> i think that has been the catalyst, but not the cause. the cause is the u.s. dollar. we have seen the dollar being much stronger than standard charter expected. aat is resulting in flattening out of portfolio funds. that is being compounded by the weaker chinese yuan. matt: so it's really all about flows. i guess this has to have a lot to do with the fed as well. continuing?his all the signs we get from jay powell are that the fed will want to continue its rate path fairly steep.
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what the market is beginning to focus on is the path over the next 12 to 18 months is clear. this year we will get for rate hikes. next year we will get three. what the market is focusing on is the impact of quantitative tightening. the was a paper by ben bernanke that highlighted for every shrinkage, that translates to 25 basis points on rates. given the path of the fed's sixnce sheet, that means effective rate hikes. that puts us toward tighter than expected territory. mean you do not want to own asian stocks going forward in 2018? >> i would not go so far as to say we do not own. fromve reduced asia preferred status down to core, which represents neutral allocation.
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we would not be adding at this time, just holding our positions until we get greater clarity on the dollar. matt: thanks very much. is head ofnell equity investment at standard chartered. a hot topic after the moves overnight, but of course, we were watching this closely the last several weeks and months. we are minutes away from the open of european equities. we're going to take a look at the stocks you will want to watch of the open, including deutsche bank after hitting an all-time low. the lender is the only one to fail the fed's stress test. maybe not a surprise, but not a reason to buy the stock. this is bloomberg. ♪
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matt: welcome back to "the european open." let me show you a screen i like to use. for me, this is the best way to get data when it comes out, economic data, because it gives me all these flags. click here. we just got the inflation data coming across the wires. you can see the cpi numbers
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here. bang in line with what the street had been expecting. the same is true if you look at year-over-year and month over month. consumer spending was a big mess , -0.2%. we were looking for a gain of 0.1%. the weco screen is a great way to get that. joining us to talk about deutsche bank is our equities nejra is covering the novartis story. i want to start out with deutsche bank. the stock hit an all-time low. for investors inspecting this failure? >> you would have to be living under a rock to not know deutsche bank had compliance and risk reporting problems. the big question is whether this is going to be surprising.
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surprise was no harder measures coming out, no forcing them to scale back u.s. business. it may lead investors nonplussed. why don't they shut this unit down? they just get blow after blow. all the big bankers are leaving. it does not make sense why a client would want to use their services. no bankers can't afford to pull back from the u.s.. think about all those german corporate who want access to u.s. investors. you need a presence in the u.s.. that is essential if you are a corporate investment bank. the question is how big. we saw deutsche bank pullback from some is mrs. in the rates business, also trading with headphones.
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-- hedge funds. it would be a disaster to pull out of the u.s.. matt: thanks for that. on bae, they got a big contract from australia. >> nine anti-submarine warships. 35 billion australian dollars. this represents a bit of a political win for theresa may. , airbus,een reports bmw had that similar signal. we have a big export contract. the stock went up yesterday when the first reports started trickling in. we had a jpmorgan upgrade. we might see the stock gain a little bit more. matt: take us out here with novartis. nejra: three things to watch.
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it is splitting off its eye care business to focus on the pharmaceutical side. bloomberg intelligence already reacted. also of i've billion dollar buyback -- also a $5 billion buyback.
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matt: welcome back to bloomberg markets. open.s the european we are less than a minute away from the start of light trading. let's see whether or not how risk on the session is going to be. we have seen a lot of marketions with this that there is a stronger euro against the dollar, against the franc and the yen, after the summit. that could be a catalyst to sell stocks. futures are up across the board.
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you can see big, green arrows. 1%.futures up more than we could see a big pop into the start of trading. volume is a little bit light on some of those futures contracts. let's look as the market opens at the start of trading. you can see the ftse starting to one, gaining a quarter of percent. a takes the dax and the smi little bit longer to open. they typically drag at the start. we are seeing the ftse continue to rise three quarters of 1%, gains of more than 1%. in france, the ibex is up 8/10 of 1%. we will see positive gains across the european sector.
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let's look at the breakdown industrially and see if we can discern real change. everywhere, you specially in the industrials. there is a little bit of red in the financials, a little bit of red in energy. most part, we are seeing gains across the board, no matter where you break it down as far as all that -- all the kind of companies we are talking about. the stoxx 600, moves are green. fiat-chrysler is a big gainer, up 4.5% right now. we have seen real weakness for automakers because of those trump concerns. we see gains in anglo american and glencore. steelmakers, also gaining.
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taking a look at the losers. we don't see a lot of big sized drops as far as the huge gains. 34 stockss, only trading down. as far as ex-dividends, hardly any today. stocks falling more than 1%. strong gains on the stoxx 600. seeing strong gains on the european markets across the board. , recent losses, big 1%-2% gains. escalating trade tensions between the united states and china. the seniornow is multi-asset specialist at bnp paribas to dock about what we are seeing happen today. there writing this way from super late-night summit in
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brussels. the lack of an agreement on migration is helping stocks globally to rise? >> good question. that is going to be a short rally. probably went into the session with low expectations because of the stress in europe and a lot on the agenda. i think it is those low expectations that have reduced this rebound. the euro has been the key beneficiary. would talkactor i about its positioning. the market started this year very long. very long on euros. that shifted into a net short position. we think the market went into the summit with a very substantial short euro exposure
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on a decent rally unexpected, decent outcome. if you look at the three-day chart of the euro, let's check out the three-day i have on my terminal. 116 .60, one 15 point 70 on wednesday. we sold off the euro dollar going into the summit and it is now recovering. how does this help european stocks? when i look at a currency gain, if i see a strong pound, i know the ftse is going to be down. do you see this same kind of inverse correlation with the euro? >> it is more complicated. the bottom line is, yes. it's can be more sophisticated with our analysis about that
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relationship. the euro zone economy is going to outperform, with a goal of 2.2% this year. we think this number is much stronger than trend growth in europe. we think that is going to lead to outperform its of european equities. at the different sectors and small caps and large caps. your question about the relationship with the euro is very much in focus for the large-cap stocks. these are the stocks that are highly correlated and susceptible to moves in the euro. if you look at the other side of the coin, the small to medium-sized entities, these tend to be less driven by exports. to focus much more on the domestic markets. if it is a domestic market
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pickup, these companies should do well. our clearview at bnp paribas's we think small and medium-sized enterprises are likely to outperform the large-cap stocks in the eurozone. >> europe has been very strong. we are now seeing problems in the core of the struggle between angela merkel and her advisor. would this be bad for small to medium-sized companies around europe if we saw countries goes through the same kind of instability we have seen in the periphery? are some physical issues to focus on in europe at the moment. i wouldn't compare what is going on in germany to greece as of
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last year. from our perspective, we would bring that argument back to growth. the two burst 2 -- 2.2% growth we are forecasting this year. what we have seen in the eurozone if you look back, 2013-20 16, we were recovering at a low level. we saw an aggressive increasing growth at the end of 2017. what we are seeing now is a slight drawback from that. bank is thathe this is above trend growth of the eurozone. that will probably be the dominant theme in european financial markets for the rest of 2018. matt: we will keep you with us. there is a lot more to go through. it is not just about what is happening on this friday. we need to sort out a lot of issues.
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if you look at what we have happening this morning, big gains in trade across europe. euro stocks are gaining 1.1%. every other index is gaining around 1% or more. session --into the this is bloomberg. ♪
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matt: welcome back to bloomberg markets. this is the european open. big trading gains for stocks. unit wasche bank u.s. the only one to fail the fed stress test. the company responded it made significant investments to improve capital planning capabilities to improve infrastructure. let's go to our bloomberg intelligence -- intelligence senior analyst for european union banks. what does this mean? it is not like anyone expected them to pass with flying colors. the share price is that a multiyear low. this does not really make any difference. difficulty the management has providing
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visibility. this was about capital planning. it was about the stress test scenario. how can you plan for capital? that is where they struggled to articulate plans in the same way the other banks dead, that passed. passed.that >> you suggested earlier that maybe they could speed up the shrinkage they already had on the books for their u.s. business. dbusa is about 30% of the u.s. business. it is headlined risk. risk.dline consensus expects them to pay about 30%. but what is the profit going to be? this consensus is $700 million.
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that keeps falling. repatriated- capital does it make a difference to their dividends. what makes a difference is what people earn -- they will earn? matt: let's look at all the u.s. and international banks that took part in this stress test. what is the general theme to come out of this? stronger banks decided to freeze their capital returns, like morgan stanley and goldman sachs. the u.s. is a growth market for banking. if you look at europe, there is very little growth. there are farmer comfortable margins that have already moved into the flattening curve. marginsore comfortable that have moved into the flattening curve.
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the united states is far more profitable, with far bigger dividends, and the united states continues to struggle. guy: i -- matt: i like the analogy. somet to quickly break news we are getting out of the central bank in indonesia. it is maintaining its monetary policy at levels where they are -- we were expecting them to hike rates. it is holding. it is going to put the rupee a iyah in line -- rup with fundamentals. they are holding pact where they were. let's get back to the bank story. the senior multi-asset specialist at bnp paribas is still with us.
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this particular deutsche bank story aside, when you look at the broader european bank picture, you were more positive on the future of their earnings. steven: we are. this week in our flagship markets call at the bank, the title of the call was including european outlook. we think there are strong opportunities with european equities. we broke this down from a sectorial perspective. what we like very much in europe are financials and energy related stocks. financials, we have a strong view the ecb will be hiking next year. maybe more than what is priced into the market.
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curee a steepening of the -- curve in europe and we think that will be positive in the financial sector. the other sector we like is the energy sector. that is clearly related to the rise we are seeing in commodity prices. we think oil prices will also help that sector. matt: let's talk about the energy sector, briefly. we have seen 25% gains for oil. producers still have time to catch up? does oil still have a ways to run? how do you see it's going forward? st-- it going forward? steven: re-think oil continues to rise. our medium term target for brent is $85 a barrel. we think it will be driven by
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willg demand and that we see supply struggled to keep up. we are very happy from that perspective with the $85 target. previously, we were looking at overcapacity and too much supply, but we recently changed that to you. market.new view in the that is one of the reasons why we think the energy sector and oil stocks in particular in europe continue to move higher. one of the trade recommendations we had in our cross asset team has been to buy energy stocks in europe against the auto sector. this is an aria that has been spoken about quite a bit from trade. trade friction is a key risk. donald trump is threatening tariffs on european union-made
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cars into the united states. this is a huge market for producers. they will come under pressure. that is why we like this trade of the overweight in the energy sector in europe. matt: fascinating. it is clear logic. you are going to stay with us. we have more to go through. want to get into the market. it is up across the board in terms of indexes. let's see how the individual stocks stories are doing. matt: i -- >> i have three gainers today. this is news coming perhaps little bit earlier, down in the market. bloomberg intelligence reacted quickly, saying that separating the ill-fated businesses will
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allow for a meaningful margin job. it does seem to be about the new -- this is subject to approval by the board and the 2019 annual meeting. stocks seemed to be moving on the news today. ovartis wille, n back -- buy up to $500 billion a share. it has been reinstated at goldman with a neutral rating. his has been updated -- the australian frigate won a landmark contract. bae certainly winning with shares. deutsche bank is higher up 1.3%. is failing thees
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qualitative section of the fed stress test. you are talking about weakness in the risk management function. the stock is gaining, perhaps the financial impact is seen as limited. it draws on other sources to pay dividends and has enough cash in europe to make operations. does notst says this have much implications in terms of the financials. jonathan: -- matt: the stock was at an all-time low. how much lower can ago go is what people are asking? we want to break some headlines we are getting out of the ecb. there at the ecb meeting a couple of weeks ago. the lack governor was not allowed -- latvian governor is not allowed to take part, he was being prosecuted.
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we did not know the specific reasons why. we now hear the prosecutor in the country speaking on this governor's case. i, up to and allegedly 500 thousand euros, according to the prosecutor. we will continue to follow this , as i'm sure will also mario draghi. a quick break. we will talk about -- about what is going on with the trade war and european stocks when we come back. this is bloomberg. ♪ loomberg. ♪ matt: welcome back to "bloomberg
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markets." bank, indonesian central we said they changed their policy stance. they have raised their seven-day -- repo rate to 5.25%. they raised it 50 basis points. our survey,er than them to race to 25% even. even.se to 5%
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they have changed their preemptive policy stance. with that, let's get back to our discussion with the senior multiasset specialist at bnp paribas. before we go to our ray dalio selloff inwe see a bonds, today. thexpect from circles 10-year rate to rise to 3%. do you expect that to be a possibility? steven: yes. perspective,m our we would highlight the ongoing strength of u.s. growth, also inflation. the upside to use potential for inflation coming out of the united states.
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the second point we would eethlight is the balance sh reduction. there is a substantial impact on yields. that combination is pretty strong, particularly since we see robust global growth continuing. seehe eurozone, we improving outlooks there. -- an improving outlook there. european yields go higher, which we think supports higher yield trends in the u.s. matt: ray dalio is in agreement. we will be playing his interview throw up a day. stephen will stick with us. let's get a quick check of markets. in europess the board
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of one percent or more. games are increasing as we move through the beginning of the session, 26 minutes in. this is bloomberg. ♪ what's a gig of data?
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european stocks are up across the board after asia cap its first gain on the week. currency, euro, get boost after the italian prime minister gets a deal on immigration at his first leader summit. unitgerman ledger's u.s. fails the fed stress test. will investors ditch the stock? it is actually rising in today's session from an all-time low. welcome to bloomberg markets.
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this is the european open. i am matt miller, guy johnson is off today. stocks are moving -- we have gains of more than 1% across the european board. more than 400 of them are gaining now. you see some of the peripheral stocks moving. fiat-chrysler, up 4.9%. very interesting to see oz rim -- osram, a gainer today. it makes headlights for the german car industry. it has come under pressure. rtl, down 2.5%. it is tough for some of these
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media companies, especially in germans werer the booted out of the world cup by south korea. wants to watchny soccer anymore, or as they call it here, football. go to the first word news. during talks in brussels that continued beyond 430 this morning, member states agreed to set up border security to handle site -- asylum-seekers and speed up the processing of applicants. it addressed key italian demands to distribute mike woodson to a countrytries when is overwhelmed. during a working dinner at the
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summit, theresa may told her fellow leaders britain wants to play a major role in european security after it keeps the bloc. six wall street top firms are toning -- reigning in plans distribute more than $100 billion through stock buybacks. bank has said it has made it significant plans to control its infrastructure after its u.s. arm of distribution failed a stress test from the fed. the economy is in pretty good shape for this year and next year. for something unexpected to come along, that may change. war, went into a tariff
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that won't be wonderful. my hope is there are negotiations that will resolve this. we might be in the longest cycle ever of economic growth, but it could go on for another year or two or three. i can't find any leading -- whost who doesn't sees a recession in 2019. the bank says it is stabilizing the currency, down 6% against eh dollar this year. global news on air, 24 hours a day and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. european stocks are trapped in the maybank between the united states -- melee
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between the united states and china over trade. unveiledsident trump additional tariffs on chinese imports, it is ending down 2% on the month. joining us now is the leader of bloomberg's max markets team. making some of that back -- is it because trade concerns have abated? >> it looks like a technical rebound after the loss of the past two weeks. it has been quite violent for cylical sectors. because sector is down more than 10%. the gains today, you have to put
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that into perspective. let's talk about what we have seen in the recent past. chart. the three month sector, it has gotten hit the hardest. how do you sort through the carnage? it started with the warning daimler. it was a wake-up call for the markets. going into the earnings season, it is going to be difficult to see what the companies have said about the trade war and the impact on sentiment.
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matt: can you tell me about the concern in the steel and the mining sector? i always think about the cost coming in because of steel. is that part of the problem? areor the steelmakers, they indeed exposed to the car industry. there is this fear because of the tariffs on the u.s. and china on steel that we end up with a lot of chinese products on the market, that we have an impact on prices for europe. mightakers -- steelmakers take a hit. the european union might take measures to curb input. maybe steelmakers will gain from this in the medium term. matt: thank you very much.
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blaise leads our marketing team out of paris. steven, we know your take on the auto sector. how bad do you expect this to get? can europe in the u.s. -- and united states can do some sort of agreement, or do you think this will be problematic on both sides of the atlantic? steven: this is the classic question. the market generally has underestimated how significant this traits that is. bluffing,mp could be but that is not the case. we have seen the terms already imposed on china and initiated a initiated a -- and tit-for-tat. inhave seen this sentiment
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the automobile sector, the one that gets hit the hardest. europe has a lot to lose if these tariffs coming. -- come in. the united states is one of the largest markets for the big car exporters. there has been a great downside risk. also for european growth, our economists believe if tariffs come in, it will hit eurozone by .02%. suffer soay not much. it does not depend on exports so particularly when compared to china or the
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eurozone. you have the strong belief from president trump the united states has been treated unfairly. it will be quite tough to negotiate going forward. the market has every right to be worried. thanks very much, the senior multi-asset specialist at bnp paribas. oure will be joining bloomberg radio daybreak team in just a few minutes. i will be there with him and mark barton. if you want to appear more from go onune in, or use radio your terminal. on your mobile phone, you can get us on london digital radio. upgraded to a buy at bank of america merrill lynch. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets." stocks are soaring as far as indexes are concerned, no matter where you look in europe. let's check out with the big cap movers are doing. >> interesting losses to look
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at. let's start out with one of the worst-performing stocks, down by double digits. implied volatility surging as though shares fall. adv,econd partnership with following disappointment from the pelican trial. could be a potential takeout for galapagos. shares are ticking a hit. you want to look at european media companies. is coming off the back of a morgan stanley note. the netflix challenge will intensify for european media. it has cut the rating of five stocks to underweight, including mediaset. downan eye on mediaset, 5%. on the upside, double upgrade.
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"d" of america says it's rating is overdone on osram. thank you for that. the new prime minister of italy hisnegotiated measures at first european union summit to stem the flow of migrants into europe and spread the burden of handling those migrant arrivals to the rest of the members. we have the founder and director of the european democracy lab at the european school of governance in berlin. the currency markets reacted euro up,y, sending the back to levels we saw on wednesday. what are the details, when you look into this plan? merkel has something she can
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bring back from sunday's negotiations. she had to do some concessions. there are some signals that heads of state in europe were standing behind her. whoe were concerns as to will handle this, how much money will be spent, who secures the border's? there still needs to be time to fix these details. matt: some want to send immigrants back to the places where they first registered, meaning italy. the prime minister has gotten this deal to send migrants north beo this is not going to good news for relationships in berlin. >> it depends on how it will be
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framed. messages to secure the migrants willr -- be pre-distributed. there are systems to have this is going to be managed. thata merkel's argument is this is a european problem. refugees who board in italy will be distributed over the territory. and the cpu has a strong european tradition. a strong european tradition. makes sense strong european members will stick to what they have agreed. you mention a strong transition team. what about members like hungry and poland?
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will they stick to these quotas they have been assigned? problem of a sanctioning. figures are circulating how much each country should take. this is not implemented to some extent. the e.u. is working on this. ther eis ongoing work. it depends on if the glass is half full or half empty. has been promising a european solution and on that symbolism, she has brought back something. matt: urika, thank you. we are talking about the deal that was struck in brussels and
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how that will affect negotiations in berlin. let's look at the stock of the hour. we have chosen fiat-chrysler. it is doing quite well in today's session. , and i will report say those reports are not from , the "asia-times" is reporting hyundai interest in fiat chrysler. and -- theyto try are going to try and deal with this carmaker after making it much bigger. there was an expected decline in fiat shares before an expected takeover was launched. 5.5%e chrysler shares up in today's trading.
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the third biggest gainer on the stoxx 600. up next, the battle of the charts. this is bloomberg. ♪
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matt: welcome back to "bloomberg
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markets. y can see the start that we use on the bloomberg. gtb go.pe this is the battle of the charts. you got? there are great stories all of the -- although for the bloomberg. when you is not so bad look over the past 15 years. i want to focus on you taking out of china -- if you takeout onna, should you blame this the trade that has been going on in the chinese stocks? the chinese stocks in particular, you can see what has been underperforming in the emerging market space. line has outperformed
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2018&p 500 since june of we are seeing ip stocks in particular make the rest of the emerging markets space look bad. let's go to christine. there is the world cup and the currency world cup. you can see all the countries that has made it into the second see how their currencies stack up against the dollar, especially with the recent gains this year. this is a winner in the currency markets. ofentina, it is seen as one the favorites to win the cup this year. than is a decline of more 30% in this currency. check the start out on 0-- this
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go.t out on gtv matt: i have to give this to nejra. if you take the idea a step further, you can find an indexat tracks the cinhina and look at what the emerging markets are going to be doing x-china. -- ex-china. nejra, you are the winner. nejra: i am also now down in fifth place on world cup. matt: i am in first among the playing.urnalists we have fascinating stuff on bloomberg today. summiti china technology
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brings leaders together to talk about a.i. over the next decade. we will get inflation numbers from the 19-country european union region for june. are also getting key data out of the united states. economists expect personal spending to have increased in may for a third month. i want to also point out that bloomberg surveillance is coming up next with francine lacqua. they have a special guest. he has a special place in my heart because he writes the powerful motorcycle -- rides a motorcycle. the greek finance minister will give an exclusive interview. if you go to tv , at the bo
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ttom, you will see a blue link. clik that -- click that to ask yanis a question! this is bloomberg. ♪ francine: europe closes its
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doors as eu leaders reach a deal to stem the flow of micro -- m icgrant -- migrants. they felt the friends -- effects of stress test. and ready for liftoff. elon musk's rocket is inspected to take off in the next hour. ♪ good morning, and welcome to

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