tv Bloomberg Markets Balance of Power Bloomberg March 22, 2019 12:00pm-1:00pm EDT
european trading day. from london, i'm guy johnson. vonnie: from new york, i am vonnie quinn. guy: it is letting quite ugly. a strong risk on move. you're seeing that on both sides of the atlantic and into the emerging markets. it started first thing this morning with that negative press on the german manufacturing pmi. that has sent the german ten-year into negative territory. you can see the yield in negative territory but the market trading and buying the german ten-year. the euro is suffering for that. the dollar is strong except for the yen. i will show you that in a moment. european equities are lower. on the stoxx 600 we are down by 1.26%. ftse is being hammered. i will show you what the gmm looks like. i have this setup up with the g20 global macro movers. turkey is a big mover. a big move against the em.
central bank has tried to step in the way. that is not working but the brazilian real is trading lower. 100 is now trading down by 2.2%. european equities in general -- the cac 40 down 2%. and global bond markets, particularly the g10 bond market in focus. -- vonnie: the equity selloff picking up steam. we know what this is all about. our next guest is going to tell us all about the market psychology following the central bank moves this week. the 10 year yield is staying hot at 2.42%. nevertheless, we know the yield curve is inverted at the three-month tenure range. the two point tens were still
not inverted but we are below 12 basis points. let's get some more insight on today's big bond news and what is happening in other asset classes. we have this inversion vonnie was mentioning in the u.s. curve and then we have the german ten-year turning negative. this is the first time that is happened since 2016. joining us to discuss is the vice chairman and head of central bank strategy at evercore isi. timing is everything in life, so fantastic to have you. >> lucky today. so much to talk about. there's a saying in the market you never want to be sure the german ten-year. at thelook -- a look long-term chart, today confirms a long-term trend. we see yields going lower and lower. my question is more immediate. is the market signaling mario
draghi is behind the curve? >> the market is certainly signaling the ecb is behind the curve. more than that, the market is signaling europe is in danger of going the way of japan. market likes to the it might be out of bullets to try to arrest that development. guy: and that means german fiscal policy will have to be something we rely on? i'm wondering what gets europe out of its hole? is praying forne german fiscal. what is different this time is the place where it is weakest is the place that has the fiscal space. it can act. this is not italy or spain. germans areall know not date on keene's ian fiscal policy. at the moment we have the end of the angela merkel era. not quite clear who is in charge
and can move quickly and decisively in that direction, even if it is warranted for germany's economic interest. it feels like europe is reliant on the rest of the world failing it out. if china stimulus is successful enough, europe will get a left. dovish fed they also help in that regard. vonnie: what is going on right now? we have the turkish lira taking a dip, gold up to 13 .12 announce, is the psychology changing fast? krishna: it feels that way. i would even go earlier and say the initial response to the fed, the dovish fed was interesting. market trading risk on initially , which was what to expect when the fed is being dovish, and in the market when into a funk about global growth and normalization being done, central banks not having a lot of bullets.
yesterday we went back to that risk on dovish fed. now we are in risk off mode on the pmi and so forth showing the weakness in europe and generally in the global manufacturing sector. obviously aspects of the curve inverting, adding to that nervous is. i would not stress overmuch about the precise question about whether the curve is mildly inverted or not, but the level of the yield, particularly in europe is a standout morning at this point. vonnie: are traders just fixing their portfolio so they don't to the weekend with safety and get some sleep or is this a one-time shift that is going to impact things for the rest of the quarter? krishna: there is surely some de-risk in effect in a situation like this. go to safety first and then think about that rather than trying to fight a dynamic that
is this strong in the markets. i will say why do you buy a bund with the negative yield? you are binding -- you are buying it as a deflation hedge and more broadly as a hedge against extremely bad economic outcomes or political outcomes. the extreme scarcity of bunds, the structural issues,, but for me the level of yields is more interesting than whether the curb is inverted by a few basis points or not inverted by a few basis points, which would mean the same thing in economic terms. guy: let's come back to this idea that you think this relates to the point you made about where yields are and what it is signaling about where the ecb is and where the eurozone economy is. if mario -- is mario draghi paralyzed by the fact that he is done soon? is this the reason why the ecb
is behind the fed? the fed seems more dynamic. jay powell seems more reactive to what is going on in the u.s. economy and the global economy. mario draghi is nearly done and i wonder who is going to replace him. i wonder if we need to get that point soonish? helping thats not mario draghi is approaching the end of his tenure. right now the ecb may need to think both aggressively and also strategically about issues like what is the right threshold for resuming asset purchases if not government bonds, maybe private assets. alternatively, what do they need to do if they are not going back to asset purchases, what do they need to do to provide a more powerful form of easing in rate space that can be sustained by the banking system? that could involve coupling more aggressive forward guidance with
very much more generous tltro bank funding and tearing to reduce the cost of the negative rate cost to the banks. two would be if they were to introduce an economic threshold for raising interest rates rather than the current guidance to strengthen their commitment, to stay accommodative for as long as they need to. the problem with all of these --isions is their big ones they are big ones and to the tenure of the next president. is there a higher girl -- a higher hurdle for mario draghi taking those steps now? guy: one of the other big stories we are focusing on is deutsche bank in commerzbank getting together, the lack of profitability in the european banking sector, the governor of the bank of france has been talking about this a little bit. needs to haveecb
a more wholesale look at what is going on in the rate structure and the unintended consequences in terms of transmission? krishna: they are looking fresh and all of this stuff. i have some sympathy for the ecb view, which is there are lots of reasons why european banks are not profitable and low interest rates are not the only thing. the difference between rates that are marginally negative or barely above zero, depending on the slope of the curve may not be dramatic in terms of their impact on the viability and profitability of european banks. my own view is they have to look at this not for the sake of the banks, but for the sake of their own credibility. right now, people look at them and say you are maxed out because you cannot do anything more because you will screw the banks. i think that even from the classic monetary policy perspective, they have to say here is how we can deliver whatever level of stimulus is
required to keep the expansion going and guide inflation up and how we can do it in a way that can be sustained by the financial system. that does mean putting in place the tearing and reducing the cost of the negative rate tax and being way more generous with the tltro's than the miserly signals we got at the march meeting. vonnie: are there vulnerabilities being exposed by today's trading action given that most emerging-market currencies are weaker versus the u.s. dollar by a lot? krishna: that is probably more of a feature of the pronounced cross asset market risk off direction of trading today. rather than specifically identifying vulnerabilities across the em space that we are not getting attention. -- that were not getting attention. a currency like the turkish lira
is in the firing line when there is a serious across the board risk off. it is not clear to me that more broadly, in em space, there are discoveries that we are making in terms of weakness, rather this look like a relatively benign, a reasonably benign environment for emerging markets with the fed turning dovish, provided growth is staying on track. if there is an increased risk, and i do not believe it is the right baseline case. if there is risk we could be slipping into a proper global downturn, then the emerging markets are going to be exposed. guy: stay with us. we need to carry on the conversation. evercore isi head of central-bank strategy, staying with us. vonnie: let's just on the first word news with mark crumpton. mark: european council president donald tusk is happy about the
outcome of the brexit summit but says there is nothing more the eu can help -- can do to help theresa may. said the fatetusk of brexit is in the hands of our british friends. he also said eu leaders are hoping for the best but preparing for the worst. delayaders have agreed to brexit until may 22 if prime minister may succeeds in getting her agreement past. if not, the eu has given her until april 12 to come up with a new approach. the trump administration is hitting iran with new sanctions. the treasury department says the new sanctions target 31 iranian and companies involved with the country's nuclear research and develop programs. the announcement comes as secretary of state mike pompeo is in beirut warning lebanese officials to curb the influence of the iran backed has long movement. dutch prosecutors say the suspect in the utrecht tram
shooting has confessed and says he acted alone. police said the 37-year-old man killed three people on a tram and seriously wounded three others. the motive is still under investigation. the world health organization says ebola has spiked in congo because of increased security challenges. the update comes a week after the agency predicted the outbreak might be contained within six months. who officials say many people with ebola are refusing to seek care and health clinics and are dying at home. the who says outbreak responders have also been targeted by rebel attacks. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. thank you. president trump is arriving in west palm beach, florida. he is headed to mar-a-lago for the weekend, surrounded by
reporters. it looks like he is speaking, if we can hear we will listen in. it is not selling we can hear much at the moment. we will bring you any comments the president makes. he has been making many comments about the robert mueller report, about trade with china, about europe and tariffs, and many other issues, most notably the golan heights that has come up before benjamin netanyahu's visit next week. the president speaking to reporters. he is showing the map he showed yesterday, the map of isis, where they were and where they are now. saying isis is territory has been eliminated in syria. you can hear cheers. atsident trump supporters the west palm beach airport to welcome the president, who is
vonnie: president trump says he will nominate stephen moore to offend board seat. president trump saying this in florida at west palm beach. this is critical because moore is an ardent critic of the federal reserve board under its current chairman jerome powell. he is also a prominent trump supporter. he is a visiting fellow at the heritage foundation and the
founder of the conservative club for growth. moore said he had not been formally offered the job but would except had he been offered. it is now of the presidents mouth. he will nominate stephen moore. we will have a more conservative voice on the fed, certainly a champion of president trump who has been a major critic of the current fed chairman jerome powell. there are plenty of seats on the fed board. 11 of the 17 support no interest rate increases this year. once again, the big headline of the moment at west palm beach, the president will nominate stephen moore to the fed board could guy: a great -- the fed board. guy: a great guest to talk about that. let's get to the market details. here's dani burger. the tumble that started with bond yields is spreading throughout the market.
u.s. yields lowest in a year but at least they are paying you something with 2.44. is this structural or is it a recessionary signal? something that is being debated as the day continues. tightening happening in turkey. surprising the market. today at thealling risk off rally continues. europe and s&p 500 both falling by more than 1%. banks weighing on the major indexes. the only place where i can find positivity, out performances in the bond proxies. oil also dropping more than 2.5%. the euro is another thing we are seeing falling with that disappointing data. one of the reasons here is inflation. inflation swapr falls, we will likely not see the euro rally until we get any
meaningful pickup and economic data. guy: thank you very much. let's go back to the central bank news vonnie was bringing us. the president of the united states saying he will nominate stephen moore to the fact. let's get some analysis. , evercore head of strategy still with us. krishna: stephen moore is a well-known economic figure in the u.s.. he is not a classic academic fed economist type. he has been an advocate for supply-side policies. he is a big cheerleader for tax cuts, having powerful supply side effects and in general has used the fed as being too tight and do textbook in its approach to the trump tax cuts, focusing on the demand impact rather than the supply impact. we have a safe bet that if he is confirmed by the senate he will
be a vote in favor of easy money policy against a backdrop of the trump tax cuts which he believed will raise supply potential of the u.s. economy for several years to,. guy: you think he believes in modern monetary theory? krishna: i do not know of his views on mmt. i think that is magical thinking. it of secures a more serious learninghich is we are about what long-term interest rates are likely to be sustained iods of time and the sustainability of different levels of debt and deficit among creditworthy issuer countries. it still matters what your fiscal profile looks like going forward. it also matters what you do with any deficits you run. if you're making productive investments or if you're creating real supply-side incentives, not creating tax giveaways, then the economic
growth over time will pay for the spending you're doing upfront. vonnie: can stephen moore have any impact on central-bank policy given -- assuming he gets through and his nomination process goes smoothly, which is not a given -- if he were to be on the board, he is just one voice. it will be him plus tweets from the president. will he have any actual impact? krishna: not in turning any respect for stephen moore individually, he is unlikely to have a powerful influence on the decision-making of the fomc. certainly at the outset. if he were to gain influence over time, it would have to be --way of convincing presenting convincing arguments to his counterparts around the table and the economic data. the fed is a very technocratic
institution. that also an institution has closed ranks under political criticism from president trump where you see a strong desire to support jay powell. the unanimity of the decision least this week, 11 of the 17 for no hikes. this is a fed rallying around the chairman and as usual the leadership group being chairman powell, the vice chairman, the new york fed president, they will be driving the bus home and not stephen moore. vonnie: how many of your clients are asking you about the 2020 election these days? krishna: a growing number. vonnie: what are you telling them? krishna: it is obviously early days. one common concern we have from the client base is whether some lefte more aggressive progressive policies getting a lot of airing during the primary
it is not being driven by high volume which is something you want to pay attention to. the ftse and the cac 40 are trading lower, down at the moment. it all started this morning with a very weak print on german manufacturing pmi. that sent the bund yield sharply lower. we saw a big been attached the german ten-year. the trendline has been lower. where now negative three bets. -- three bits. we have seen a big move to the downside. that has ripple through and other asset classes. the ftse 100 trading down at the moment. we went through the 7300 level quickly. we are now flirting with the 7200 level. the dax, in some ways it has been a relative outperform or. that is been interesting to see.
the cac 40 also under pressure. the banks have done badly today, particularly italian banks. they have been under pressure despite the fact that we have seen the xi jinping visit taking place. deutsche bank down 2%. unicredit in italy down by 5% this afternoon. -- having a better day in these down markets. good on the.33% is back of the week 90 numbers. 90on the back of the weak numbers. it has -- on the weak nike numbers. the markets have headed south from an equity point of view. that is a look at the european close. u.s.e: we are down in the but picked up steam on the selloff following europe. the s&p 500 down.
banks inid about the europe, it is equally the case with the banks in the u.s., particularly the regional banks. some energy companies tracking that lower. we are recovering for our 10 year yield, 2.44%. 11 or 12 curve spread basis points today. pretty narrow. we know the two month 10 year did invert. below 1.10. an indication all may not be well. 13 12.73 announce. a question on who is buying the gold. let's move to global macro movers. redcan see it is a sea of as die mentioned. -- as guy mentioned.
a bad week for brazilian assets. all of the emerging-market currencies, with the exception of the philippine peso down against the u.s. dollar. guy: let's get back to the central bank story. considering the use -- the news we've had out that the president is going to nominate stephen television will be interviewing him at 3:05 p.m. eastern. very much looking forward to that conversation. krishna guha still with us on set. a lot is being made of this inverted curve we are seeing in the united states. that is effectively the new york fed model, the predictor of a recession. you are less concerned than others in terms of its ability to predict the recession at the moment. krishna: i think you would be a fool not to pay attention to what the curve indicators are
saying. i also think it is premature to panic. it is important to recognize there are unique factors in the present that way on the yields of longer-term bonds. essentially in the technical jargon, the term premium is negative. what that means is where as in the past investors required compensation to run the risk inflation could be too high going forward, today investors pay a premium to own long-term bonds as a deflation hedge. what that means is when today's interest rate roughly equals the interest rate that will prevail in the future, because of that negative premium, the yield curve may actually be inverted. that may be a relatively normal condition, at least a new normal condition. it certainly does not say good things structurally about the state of the world that people need to buy that deflation
hedge, but it might not give you the same recession morning that those moves did in the past. vonnie: why should this time be the first time ever that things are different? the tweet by a bloomberg opinion on this -- for those asking if a three-month tenure inversion is a good recession indicator, yes it is. the only possible false positive came briefly in the extreme conditions of the 1998 long-term capital management crisis. he is saying it is a situation similar to 1998 and -- in its unusualness? krishna: certainly it is empirically rare. john is right on that. it has been historically an indicator. that is why i'm absolutely not saying he nor those -- i'm not saying ignore those indicators.
i'm saying do not panic. there is one big difference between the recent period of the last 10 years and all the prior periods we used to back test these things. in the past the term premium on bonds used to be significantly positive. 00 points of50-1 term premium. today that term premium is negative. how we interpret that turns out to be important. there are some things that can make you concerned about a very negative term premium means people want to hold the inflation edges. it also means that it does not necessarily mean the curve inversion means the short rate is too high. when i look at what the market is discounting in fed funds in terms of expectations around the fed, you can certainly interpret this as saying maybe the fed ended up going a clip to far on
its rate hiking cycle. for me what is going on is actually the market is pricing some material probability, a one in three type probability that we could get a full-blown recession scare were recession itself, in which case the fed is coming aggressively. that that is not cutting .25 points. if the fed thinks it is slipping thinks it isfed slipping away, the fed is cutting 100 basis points, 200 basis points within a couple of quarters. when the market prices -- markets and some chance that that is on hold, some chance they hike a tiny bit over the next year, and some chance they go down hard. that is what gives you the skew and can give you that negative slope at the front emd of the curve. guy: we will leave it there. thank you for stopping by to see is that bloomberg. evercore isi head
of central bank strategy. let's focus on what is happening with the european banks. credit suisse has given the ceo a pay raise. deutsche bank is pledging to reverse years of declining revenue. joining us from frankfurt is bloomberg banking reporter steven arons. let me start with the deutsche bank story. that deutsche now believes it has the ability to reverse this revenue decline and i'm curious that this comes at a time when we are expecting decisions to be made shortly on the commerzbank merger. >> i was surprised when this came in today. i was not expecting a positive outlook, to be honest. they hedged it and said this would only come about if we had solid macro economic development. today this is becoming increasingly unlikely.
i would take today's outlook with a grain of salt, to be honest. vonnie: what is the update on the merger and the health of banks in europe? steven: with respect to the merger everyone is talking about , the potential merger between deutsche bank and commerzbank, it was announced last sunday. there has been a lot of resistance. the trade unions have come out against it. politicians have spoken against it and even the media. a lot of resistance. the commerzbank ceo, we just saw a memo he sent to staff to reassure them his decision will be quick, whether or not to go ahead with this because there is uncertainty in the banks and they want to be sure they have a decision, it will take a few weeks to get clarity on what is going on. they cannot make a decision
without knowing each other's balance sheet and this be the things we will be seeing over the next few weeks. our thanks as ever to steven arons, joining us from frankfurt. vonnie: president trump making comments in florida on his way to mar-a-lago. he talked about syria and at that point the pentagon said the caliphate in isis has been eliminated in syria. on another matter, he said he ,ould nominate stephen moore former trump campaign economic advisor in 2016, to the board of the federal reserve. let's get an update from kevin cirilli, bloomberg's chief washington correspondent live in rdc bureau. let's begin -- in our d.c. bureau. let's start with stephen moore. this may have been of -- may have been expected. is the president's job to nominate and he is likely to nominate someone who goes against the grain.
will stephen moore get the confirmation process? kevin: that will be interesting to see. it would appear republicans with , it would the senate appear the republicans will be more in line with his message. stephen moore wrote the book on trumpinomics. before that, he was a founding member of the club for growth, a conservative economic forum in washington, d.c. he spent time at the heritage foundation, the cato institute, a more liberal leading institution in washington, d.c. he is also somebody through in 2018 said he does believe the president of the united states would have the right to fire the fed chair. according to the interview he gave in december of 2018, which will no doubt resurfaced during his confirmation process, he
said the cause for president trump to fire the fed chair this time around would be for wrecking the economy. his words. guy: is this larry kudlow's doing? they are very close. kudlowno question larry is close with stephen moore and close with arthur laffer. they run in the same economic circles. this is without question president trump's pick to have a voice on the fed governing board. stephen moore is someone who will fall completely into the same ideological tanks as the likes of larry kudlow and president trump. vonnie: kevin, thank you for breaking that down for us. kevin cirilli in our washington, d.c. bureau. be sure to tune in just after 3:00. there will be an interview with stephen moore at that time.
in on bloomberg first word news. here's mark crumpton. judge in sanal francisco is scrutinizing the trump administration's policy of returning asylum-seekers to mexico. civil rights groups have asked the policy be put on hold while their lawsuit moves forward. the policy begin in january at the sand and crossing in san diego, marketing and unprecedented change in the u.s. asylum system. family seeking asylum are typically released in the u.s. with notices to appear in immigration court. the trump administration has approved $3.7 million in new loan guarantees to help finish the first new u.s. nuclear reactors in a generation. the expansion in georgia is years behind schedule and its estimated cost of more than $27 million has doubled since construction was approved in 2012. new support brings the government's total loan guarantees to $12 billion.
critics say taxpayer money is being used to prop up a failing project. more towns are evacuating as the flood in missouri river seats over and through busted levees. the national weather service says the river is expected to press today at levels just short of those reached during the historic 1993 flooding in kansas and missouri. the missouri river swelled following heavy rains and snow melt this month. the flooding has been blamed for three deaths, damaged thousands of homes in nebraska, iowa, and missouri and taken a heavy toll on agriculture. jimmy carter has reached a new milestone. president has9th now lived longer than any other president in american history. today mr. carter is 94 years and that exceeds the lifespan of george h. w. bush by one day. mr. bush died in november. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700
journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. guy, back to you in london. guy: very quiet auction for european equity markets. -- a toughugh the day on the market. ftse 100 under pressure. the cac 40 finishing down even more. the market coverage will continue. if you're getting in the car and are on your way home, do not forget to tune into bloomberg radio cable show live on dab digital radio. this is bloomberg. ♪
before. theresa may buying herself another two weeks. the eu gave her time to avoided no deal brexit knocks -- next weekend. joining us from brussels is maria tadeo. is the sense in brussels that they have done enough at this point to prevent a no deal brexit? maria: i think the senses just relief. everyone is happy we moved away from that imminent no deal scenario. the eu will tell you that as far as we are concerned the negotiation is done. that was the message from donald tusk after a long night in brussels. let's take a quick look. vonnie: we will take a quick look in a moment. is the assumption that prime minister may gets a vote through next week? if she does not, that is the end of the line.
it is only until the beginning of may that the door is open even with a vote. without a vote, the doors not open any more. maria: that is right. we understand she wants to secure a third vote by midweek next week. there is no indication this will get through the u.k. house of commons. she has lost that twice by triple digits. what is clear for both sides is the prime minister has almost moved away from that aggressive tone on wednesday when she said it is my deal or no deal and seemed to be blaming everyone else. in brussels there is a sense she will have to put this to some kind of a vote. she will have to go for alternatives that might open up possibilities for the prime minister to get the deal done. that is exactly with the irish prime minister said. stayid if only she were to in the single market, many options could be brought up.
we also heard from angela merkel thataid very explicitly revoking article 50 is an option and we should not be scared to talk about that. european leaders have refrained from talking about a cancellation of brexit because they do not want to be seen as interfering in the domestic politics. what is clear is that in brussels it is not a binary choice. there are many options on the table. to see one oftart those alternatives being voted on next week. maria tadeo in brussels, thank you very much. vonnie: market close to session rolls. let's get to romaine bostick. plenty of stocks higher on the s&p 500. the one slower are very much lower. romaine: you are seeing a classic cyclical rotation. most of the cyclical sectors and stocks are the ones at the bottom. financials down more than 2% on the day. you stock -- you talk about the
stocks that are higher, is the defensive stocks. tosumer staples were trying -- were struggling the line between losses and gains before i came on air. those who want exposure to equities are looking at the defensive sectors. guy: what was the catalyst for this risk off sentiment? vonnie: it was the fed -- romaine: it was the fed. what how did was a dovish sign for the market but it flashed a significant bear signal when it comes to the economy and corporate earnings. it took the market a couple days to digest that. if you paying attention to the bond market and what was going on with the yen, if you're paying attention to what was going on overseas, it was obvious this was a market there was not buying into the upbeat economic narrative we got on wednesday. vonnie: our thanks to romaine bostick. this is bloomberg. ♪ this isn't just any moving day.
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vonnie: live from london and new york, this is the european close on bloomberg markets. i am vonnie quinn along with guy johnson. global equity markets are selling off with the s&p said for its were state since january -- it's worst day since january. one of the laggards is nike. kailey leinz is here at the reasons why. it was a mixed quarter for nike. global margins beating expectations what the -- but the sales were like. billion, missed estimates by $40 billion. american estimates came in at 1% below expectations. that is their largest market but
only makes up 40% of their overall sales. all their other regions the expectations whether it was the asian pacific, china, latin america, china. it is that domestic weakness weighing on nike. investors chalking up the negative move to the fact that expectations were so high going in. you had a run-up of 20% in the shares before moved lower today. analysts say it was a tough place to meet. some analysts saying this drop is a buying opportunity. guy: what is march madness and why should we worry about it? : the ncaa basketball tournament. brackets for a cause of bloomberg. it is important for 90 because they have so many bath -- be it is important -- it is important for nike because they so many
key contracts. t could be a big driver for nike. that is pending any other shoe breakage. vonnie: have you fill in your bracket? >> i have. vonnie: i filled mine out but i'm not checking it yet. u.s. markets down 1.5%, 2% for the nasdaq. a major selloff today. we'll be covering it all afternoon. yield" is next. this is bloomberg. ♪
"bloomberg real yield" starts right now. up, concerns lingering, the u.s. yield curve inverts for the first time since 2007. more european data, the german 10-year yield dropping below zero. worldwide,eld assets $10 trillion. we begin with the big issue, curve inversion for the first time since 2007. >> potentially cautious. >> in versions are followed>>