michael: greece. iain: i will take greece. lisa: will u.s. 10 year yields be closer to 2.5% or 3% by year-end? iain: above 3%. michael: closer to 3%. priya: 3%. lisa: when will the u.s. yield curve invert, six months or 12 or more months? priya: six months. michael: 12 or more. iain: 12 or more. lisa: really quick. you care about the yield curve. or is this time different? priya: i care. michael: yes. i think the fed is whistling past the graveyard. i think it is a big deal. iain: i think the curve continues to flatten off. i think this time is different. lisa: my thanks to priya misra, michael collins, and iain stealey. from new york, that does it for us. we will see you next friday at 1:00 p.m. new york time. this is "bloomberg real yield." ♪ manus: you are watching the "best of bloomberg daybreak: middle east." i'm manus crowley. aramco's ipo is a no go for the time being. the giant is preparing to head -- hit the debt market with its first international bond offer. moody's downgrades 20 turkish banks and warns the worst

i think -- i was never worried during the situations with greece or spain, i was never concerned because history is very important. irope has a rich history think as time goes on -- rich history, and i think as time goes on we will make sure that resiliency continues. thatitching to be ok and question on brexit, it seems like the deadline for coming to coming up,t has been and you must have game plans this. what would you say are the author of a messy divorce? i will not desolate -- tidjane: i will not call the outcome in that. we were all asked to present new plans by the ecb. that was the chief executive of credit suisse, speaking to us in beijing in an exclusive interview. time now for the bloomberg business flash, a look at some of the biggest business worries in the news right now. coca-cola is expanding in the hot drinks business by buying a global brand. for is trying costa coffee five point $1 billion -- $5.1 billion. both coke and pepsi have been seeking alternatives while the market in sugary drinks declines. second-biggest u.s. has-hailing company, lyft, hired an ipo adviser t

michael: greece. iain: i will take greece. u.s. 10 year yields be closer to 2.5% or 3% by year-end? iain: above 3%. michael: closer to 3%. priya: 3%. lisa: one will do you -- with the u.s. yield curve in verve -- invert, six months or 12 or more months? priya: six months. michael: 12 or more. iain: 12 or more. lisa: really quick. you care about the yield curve. or is this time birth different? priya: i care. michael: yes. i think the fed is whistling past the graveyard. i think the curve continues to settle off. i think this time is different. lisa: my thanks to priya misra, michael collins, and iain stealey. from new york, that does it for us. we will see you next friday at 1:00 p.m. new york time, it's a quick p.m. london time. this is "bloomberg real yield." ♪ ♪ looks good to bloomberg first word news is news this afternoon. it is looking less likely that the u.s. and canada will meet today. speaking to reporters in washington, canadian foreign affairs minister said while the canadian and u.s. teams are working hard "we are not there yet." optimistic, saying canadians are goo

what the s&p 500 is -- valuation that is about double what the s&p 500 is, analysts are saying it in greece in the margins by 320 basis points. rbc calling it a blog quarter. nursing growth -- blowout quarter. thank you so much. vonnie: we have news crossing the bloomberg. schattner suing the pizza chain and the board. assistance forr stopping irreparable harm to the company. papa john's down about .2%. this is "bloomberg." ♪ . vonnie: 11:00 a.m. in new york and 11:00 p.m. in hong kong. 30 minutes left in the trading day in europe. from new york, i am vonnie quinn and this is the european close on bloomberg markets. here are the top stories we are covering. indexes are fluctuating slightly higher as trade talks advance. technology shares are advancing. a fifth monthly high for the s&p 500. we will speak with omair sharif about president trump's threat for tariffs on $200 billion of chinese imports and how it could inflect -- affect inflation in the united states. --exclusive interview with 90 minutes left into the trading day in the united states. abigail doolittle is with us. >> small ga

i was never worried when portugal, ireland, greece, it , i was never concerned. europe has a rich history. i think all of the decision-makers are determined to do with -- whatever is necessary in the end to make sure that the euro continues. nejra: that was tidjane thiam speaking to tom mackenzie in beijing. says he does not regret appointing jerome powell as fed chairman, even after criticizing interest rate hikes by the fed. he made these comments and an exclusive interview with bloomberg in the oval office. andl with us is james athey christian keller. everyone had stars in their eyes at jackson hole as jerome powell spoke. james, you want to focus on what bloomberg is calling the financial stability star. a different picture to the neutral rate? james: yes. i read that article a few days ago and it was a bit of a hallelujah moment. to me it is a philosophical question. this is not about the academics ,nderlined, the economic theory this is about the notion of making decisions under uncertainty. what you can and cannot know. what we have seen in the build up t

. , withnever worried portugal, ireland, greece, i was never concerned because history is very important. , and ihas a rich history think we will do what is ever necessary in the end. >> switching focus to the u.k. and the inevitable question on brexit. it seems like a deadline to come to an agreement has been pushed back, and there are risks for a hard out for the u.k. if there is no deal. you must have gamed through and game planned on this. we were ready to present plans. there will be a reasonable outcome which is in everybody's interest. guy: that was the credit suisse speakingane thiam exclusively to bloomberg's tom mackenzie in beijing. interesting what he had to say about what is happening with the market reaction to out of europe. this talk about the stock stories we need to focus on now. coffeead is selling its to coca-cola. sage down by 8%. up next, the bank of finland's governor, olli rehn, an exclusive interview with matt miller. this is bloomberg. ♪ matt: welcome back to "bloomberg markets: european open." made,rst trade deal ever in an exclusive oval office interview, pr

over irelandorried or greece. i was never concerned because histories are important. europe has a rich history and i whatever is necessary will be done in the end to make sure the euro continues. anna: that was credit squeeze's ceo speaking to tom mackenzie. ranko berich is still with us. when you look at what is happening in the e.m. fx base and see the argentinian peso continue to decline, the rupiah at the lowest despite four hikes since may from the bank of indonesia. and then you listen to talk about how it comes down to current-account deficits. what hope do e.m. countries with those deficits have of supporting their currencies at all? ranko: it depends on the specific currency. are we talking about credible monetary policy, credible fiscal policy? are there reserves? that is additional on top of that. sayingjane is right in it is not a contagion thing were all of e.m. will enter a bear market. in places, you have very good prospects for a rally. in the case of argentina and turkey, they are dealing with currency crises the question monetary policy in turkey and

matt: what parallel can you make between greece and italy? greece is the lehman brothers of the troubled european peripherals, surely. we have learned our lesson. we aren't going to let them get that close to failure again. also, a different scale in terms of the problems. maximilian: i wouldn't make a comparison other than the political element i mentioned on how populists act in certain cases. proceed ines europe an environment where it is three years behind the united states. it will struggle to raise interest rates. it is held together by extraordinary monetary stimulus generated out of the ecb. is europe working? majorlian: so, europe has fundamental problems. you are thinking about not fully functioning baking union, no fiscal union, labor is not as flexible as capital and on the other hand, you have any cb which is setting rates -- an ecb which is setting rates for diverse member states. what we are also seeing is europe is growing quite nicely above trend. for example, if you are looking at eurozone growth potential about 1.5%. this c

if the entire in government has to make substantial cuts and go through what greece did, cannot infect your business fundamentals -- affect your business fundamentals? david: you really have to analyze and look at these things. you are right. in the case of italy, they have a healthy portion, a large portion. not economically healthy, of debt. that to gdp is somewhere near 130%. there are a few things counterbalancing this. one is the public sector also owns a lot of assets, and, unlike greece, they could probably go through asset sales to walk on -- work on that that. number two, and more importantly, italy is wealthy. to gdpvate sector debt is extremely low in italy. you don't see this consumer leverage and business leverage. it is a very wealthy country when you look at private sectors at the gdp. they do have to control spending, duty reforms, but they need to start growing their economy. the north grows in the south does not and they have to come up with ideas to energize the economy. lisa: that was david speaking earlier on bloomberg. come up -- coming up, google yourself. we hav

and unlike greece, they could probably go through some asset sales to help work on that debt. number two, and more importantly, italy is wealthy. the private sector debt, private sector debt and g.d.p. is extremely low in italy. you don't see this consumer leverage and business leverage. it is a very wealthy country when you look at private sector debt-to-g.d.p. so really, they do have to control spending. but more importantly, they need o start growing their economy. the north grows and the south does not. they have to come up with solutions to energize this economy. romaine: and that was david herro of herro associates speaking us to on bloomberg. vonnie: where markets are trading. we're just about five hinz to the european close and the stoxx 600 europe is a 10th 1%. and the s&p 500 is up as well. pulte, up higher. the peso is creeping back up towards 19. it is giving back some of those gains. 1887. wore going to speak with the economy minister later this hour to talk about that trade deal and lots, lots more. this is bloomberg. ♪ vonnie: the senate has devoted to advance

they have to make substantial cuts, they have to go through austerities, maybe the way greece did -- cannot affect business fundamentals? david: you have to analyze and look at these things. you are right. in the case of italy, they have a relatively healthy portion,, large portion not economically healthy, of sovereign debt. debt to gdp is 130%. there are a couple things that come to bounce. the public -- that counterbalance. the public sector owns a lot of assets and unlike greece, they can probably go through asset sales to help work on that debt. number two, and more importantly, italy is wealthy. gdpprivate sector debt to is extremely low in italy. you do not see this consumer leverage and business leverage. it is a very wealthy country when you look at private sector debt to gdp. they do have to control spending, they need reforms, but more importantly, they need to start growing the economy. the north grows. the south does not. they have to come up with solutions to energize this economy. alix: are you adding to the current positions or looking for new positions in different i

in greece, the government finally made an exit from its bailout program. >> greece's bailout program ends today, wrapping up a decade of crises that have transformed the country's economy and its people. how can you be sure greece won't be back in crisis? is genuine debt relief the only way to ensure that? >> you know, debt relief is something that can be seductive, but has to be reimbursed. and this is just the taxpayers of other countries money. -- if you can convince the german people that they have to renounce something like 80 billion euros of debt on greece, then you are much stronger than i am. but there are now some short-term and medium-term measures that will alleviate a lot of that burden on greece, and i think we can say that it is on the right track. that is what was testified. francine: italy is pushing ahead with revoking the highway concessions in the wake of the deadly bridge collapse. that is despite an offer from the benetton-owned parent company of aid. the disaster that left at least 43 people dead has led to a fight to salvage its lucrative tollroad investment a

. >> how can you be sure greece won't be back in crisis? is genuine debt relief the only way to ensure that? >> debt relief is something that but has to beve, reimbursed. this is just the taxpayers of other countries money. if you can convince the german people that they have to renounce something like 80 greece,euros of that on and you are much stronger than i am. there are now some short-term and medium-term measures that will alleviate a lot of that burden on greece, and i think we it is on the right track. italy is pushing ahead with revoking the highway concessions in the wake of the deadly bridge collapse. the disaster that left at least 43 people dead has led to a fight to salvage its lucrative tollroad investment and protect its fortune amid rising public anger. can the government revoked concessions or is this a lot of talking? >> if we look at the contract, it is a long process to revoke a concession. the concession lasts until 2038 for atlantia. it looks like the populist government that is considering other ways. they are not tr

and you have bigger problems in italy and greece. the economic impulses are moving slightly up. there may be a release coming area guy: french data ahead of expectations. the services line coming through at 55.7. we are ahead of expectations. servicesrly on the side. we have an improvement -- it is not a lot to go on. it is the right direction. freddie: it is moving in the right direction. it is slightly ahead. that tends to lead to earnings growth. it puts you in a position where you are negative on earnings, and at 55 or above on the pmi. it is slightly more positive for the stock market than it appears now as long as momentum continues. guy: were we just wrong when everybody got excited about the eurozone? that finally we were back to growth? was that the blip or is this? .reddie: that was everybody had believed america had solved the problems. it did quantitive easing earlier. it got into a more normal rate hiking cycle. people make this mistake where they assume because america can do it, others can do it. europe is a far worse place to invest than america. america has bett

greece emerged yesterday from an eight year plan. the israeli president met u.s. national security adviser john bolton in jerusalem. bolton said it was a very challenging time for both israel and the united states. >> i think just underlining the close fun trip -- close friendship and alliance between the two governments and peoples of israel and the united states is always important to do. again, it has been a great pleasure to be here with you. i appreciate your courtesy and all the time you have shared with us. the: the president praised u.s. withdrawal from the iran nuclear agreement. he said the move created what he called a "unique window of opportunity for exerting pressure on iran to effectively limit its nuclear capabilities." global news, 24 hours a day, on air and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. scarlet: thank you so much, mark. let's recap the breaking news on michael cohen, the president's former personal lawyer. appear in the manhattan federal court

greece can walk on its own two feet. i think the reforms which have been realized, some 450 reforms make greece a more secure country. some areas, nearly a million people are in refugee camps. kerala received 160% more rain. china is all about big numbers, and this is no exception. a number of people using the internet regularly crossed 800 million in june according to the internet information center. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. emerging markets continue to prove to be a safe haven in the recent turmoil. jp morgan emerging markets bond index is outperforming the msci emerging markets stock index. recent tensions over trading momenttics, all at the coming together to scuttle optimism about economic growth helped depreciate stocks. let's look at all this. thank you for joining us. what is going on here? i'm being told we have to look at the images coming in right now. malcolm turnbull explaining his vot

on itsw greece can walk own two feet and have free access to markets. i really think the amount of somems that it been glass, 450 reforms, make greece a much more secure country. ofsica: worldwide sales alexa cars cracked the 400,000 very in the second quarter, rising 77% from a year earlier. found yound eagles homes, more than half the sales coming in china. found new vehicles homes. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. yvonne: jessica, thank you. sophie.ing in manipulation will be top of mind in the asian session. sophie: we do have a softer dollar, easing some of the losses we saw early in today's session. below 110.k when you look at the set up on the terminal to check on the currencies that i want to highlight, we do have the yen trading at an eight with high. the dollar selling will continue as the fed is expected to suggest it will keep raising rates its upcoming minutes as well as at the jackson hole gat

greece has completed the last of its three bailout programs. it still has an and norma's task enormous task ahead. it is more than 60% below the level announced in 2010. led the five worst performer since the bailout of banks, all of which have plunged more than 99%. freew greeks can have access to markets and i really think the reforms, the amount of reforms that have been realized make greece a much more secure country. >> global news 24 hours a day on air and on tictoc powered by twitter. im jessica summers. this is bloomberg. hasi: president trump complained that fed chairman jeff powell hasn't been the policy maker he expected. the remarks were made at a republican fundraiser. the first personal criticism of powell to emerge so far. this is something of an escalation of trump's criticism of the fed, which has been building. >> he has been grumbling about rising interest rates. he is now going after his appointee, fed chairman jerome powell on raising interest rates. he said i said this -- he said this at a private event in the hamptons on

>> greece has an opportunity to .ry so, greece, as you know, has turned the corner on growth last year. leaving the program and much better physical shape than it has been for decades and they have a significant cash offer of about 24 billion euros. to exit the able markets. what they are constrained by our two things. one is they have very limited scope for a fiscal stimulus of the economy. one condition was they essentially continue the policies of the last few years and indeed, they have to. a lot of debt still to pay down. , evenher main issue is though structurally the greek economy has improved, the program has not really succeeded in being transformational. the sense is that many greeks still miss trust their government and institutions. many have left and if you are likely to time. -- to return. the long-term growth not all that great. the government will have to prove not only that it can keep on a reasonable fiscal path, but can also sustain reform. joe: the downturn in greece, basically, which is going on about nine years, almost a decade, is, by some measures, worse than th

the formal end of the troubles of greece. is entering into an interesting phase where can look , toard to progress rebuilding its banking platform and so on. this is an exciting time for investors. a new start. the announcement may be a symbolic gesture saying we are out of it now. understand how this could be exciting from a political perspective. from a market and financial perspective, is greece in a better place than it was three or four years ago? the value,ook at this crisis of the past eight over 60% ofestroyed the value. earnings have come down. the value distraction has been concentrated in the banking for good reasons. -- banking sector for good reasons. there can only be one way, up. all eyes are on the ecb policy and if the ecb were to signal an end to quantitative easing or a tightening of the situation and it remains committed to reining in stimulus and raising interest rates in 2019, it could help greek stocks make a comeback in , the euro strength is a signal the dollar is going to be weaker. it is good for em

after almost nine years of greece exitssis, its international bailout program. is the environment ripe for investment? putin and merkel find common ground, pushing the nation's closer. we are live in berlin.

greece is on the right track. how can you be sure that greece will not be back in crisis if -- is genuine debt relief the only way to ensure that? relief isw, debt something that can be subjective. that has to be reimbursed. this is just the taxpayers of other countries money. the german people have to renounce 80 billion of euro debt. on greece, you are stronger than i am. there was never an appetite for cuts. we can say it was not good there would have been a cut. there are now some short-term debt that arem going to alleviate the burden on greece. that itthat we can say is on the right track. guy: commissioner, good morning. basic piece seems to be growth. does not seem to be still there. if you move back just six years ago, there was a recession in greece of something like 5% per year. we know that greece has lost 27% of gdp. of, we have a growth focused 2% for the years to come. i am certain that the growth potential can be improved, especially if investors show that they trust the reform. is an innovative co

good luck warns of a massive treasury shorts greece. the boss morning comes as the latest data shows that short positions are at the highest on record. reports suggest turkey has tried to link the release of pastor brunson to the u.s. investigation into u.s. banks. washington appears to have frected an offer to help the pastore if it starts looking at the banks. we will get the latest live from tel aviv. good morning and welcome to bloomberg markets, the european open. i'm matt miller alongside guy johnson in london. guy: stoxx 600 up .3% this morning, not exactly exciting price action. let's look below the surface. pandora trading higher. metal materials theme running through a lot of this. nordic banks are trading higher. let's show you what is happening in the bottom end of the markets. struggling to find a reason we are seeing some of these moves. sage, i feel this is a deutsche downgraded summer out there causing this. i'm struggling to get my arms around this. persimmon trading down. and a collective list -- and a eclectic list. s

that said but what is going on in greece. todayilout program ends after a decade of crises that required more than 300 billion euros in aid. the country remains in facenation and the lenders higher financing costs when the ecb stops accepting government debt as collateral tomorrow. we of the senior research fellow at the overseas of allotment in -- institute. we are talking about this big isnt today, but how free greece going to be to run its policy its own way from here? >> good morning, anna. greece is still as you know, still under significant fiscal constraint. even though they are exiting their bailout program, they will still need to me a fiscal target of surplus in the primary fiscal the of around 3.5% for foreseeable future for the next couple of years. is more important constraint that physical commitment balanced with achieving sustainable growth. both having decent fiscal accounts and achieving pretty good growth as well in the next couple of years. that is a significant double constraint, if you like. anna: as we

>> i think the midterms will be greece come. tradition for a a07, this seems more like 1997, 98. for now, u.s. equities, there is no pricing or uncertainty. we head towards the midterm and the fact they have already , it will be so strong. the period you want to the defensive, but i think opportunities will emerge after that. before the midterms dissipated, that is what i want to get at. tariffs are just more than the trump administration. china is becoming too quick -- to powerful, to quickly. i think for that reason, the notn tensions, you would war, there will be winners and losers. .hat should be our focus could talk about buying ,ectors which do really well cybersecurity companies. there are a lot of winners and losers. there is more of for china to build alliances with europe, so after all, the job politics are shifting and we start to get different alliances. thee are talking about teflon nature of u.s. markets. destruction of emerging markets here in asia. u.s. stocks brushing off the volatility. of risk aversion likely to continue and do you see any cracks? >> when you l

are we looking at greece all over again? are we looking at another situation where the imf, eurozone, whoever, has to come in? the ecb, i guess, has to figure out a way to directly or indirectly get involved here? peter: there are two obstacles to that. one, erdogan has said he does not want the imf to come in or anything that smacks of the united states. another thing is a lot of the debts are owed by corporations and banks. the imf is geared toward lending to sovereigns. they would have to come up with a mechanism where they lend to the sovereign, the sovereign lends to the corporates. it is not what the imf is designed to do. taylor: we talked with a lot of em investors, and they would like to see a 300 to 600 basis point rate hike to stem the high inflation and they are not. how concerned should we be the central bank is independent from erdogan? peter: it is not independent. something has got to give and we are wondering what it his going to be. they embrace economic orthodoxy, raise rates -- which will cause recession,

the exit comes after 8 years of cutbacks and returns in massive lows from -- in greece. they will have to meet targets for public finances until the last bailout loan is repaid in 2060. the pentagon warns china may add a nuclear element into the disputed south china sea. beijing claims more than 80% of the south china sea and that has led to clashes over energy exploration and fishing rates with other areas. global news 24 hours a day, on air and tictoc at twitter, powered by more 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. shery: maersk announced plans for a separate shipping unit in copenhagen. shipping giant said they want to streamline the structure and focus on the transport is this. the chief executive spoke to bloomberg's matt miller. >> we looked at options for massive drilling and we believe this would create the most value for shareholders. there are many great companies in the drilling sector, but not a lot of companies with strong balance sheets. all the other possible transactions involved some kind of merg

one of the conversations that has been on the table whether it is italy or greece or others has been a return to their own currency. a departure from the euro. do you think the events in turkey change the mindset a little bit? it could be a reminder that this government has now said over and over that they are committed to the euro common currency. there was a government, the other day that said look what is happening to turkey with its own national currency. the euro provides us with some common protection. thehere do you think situation goes from here? it felt as though things have quieted around the eurozone a bit. is it is fractured as it was a year half ago? now, the italians are on their summer vacation. they will be regrouping in september to come up with a budget. that is what everybody will be looking at. especially investors. euror as the rest of the area, that remains to be seen and the italians seem to be mostly concerned with their own issues. >> winky for being with us. that is kevin costelloe in rome. followingwe have been is tencent. since a high watermark, they have

debts from portugal to greece sold off yesterday, and banks may be exposed to turkish assets. the blunder spread is at its spread is at bund its widest sense may. europe's fundamentals look solid. region'su play the debt market in this environment? still with us is julian chillingworth from rathbone. banks have concern in terms of exposure to turkey. in terms of where the bund spread is now, would you be compensated enough in italy? julian: no. simple answer is no. the reason is i think the turkish issue is a sideshow. i think the problems rest firmly in italy, and i expect we are part way through act i of a three act play between the ecb and the italian government, and they are going to put pressure on the ecb to offer some form of try to get them to support the bond market. the ecb will be reluctant to do that. we are currently -- i do not think anything will happen of importance until september, and then i think the pressure will grow. ony may put enough pressure to force another election, saying they have to go back to the country and get a stronger mandate as a coalition,

turkey's imports are 1/10 of what china's are, when you think about its external debt is smaller than greece's was during its financial crisis, it shows you that the contagion risk, at least for now, is what contained to that particular region. however, there is one big caveat there and there is this idea that the global landscape has shifted. we don't have the same monetary policy accommodation that we've been used to and we don't have a lot of the same growth metrics that we were used to. so there is some concern that with the potential for a slowing economy worldwide, combined with the lack of central bank support, that something like turkey or something even bigger than turkey could sort of rock markets. and i think that's why you're seeing hesitancy in the markets over the past few days. selina: there doesn't seem to be many direct risks to the tech sector here but what are some possible impacts there, if this does spread to other emerging market countries? >> you're seeing to a certain extent in some of the europe companies, particularly some of the telecom names like votophone, which is

president to keep refugees in turkey rather than letting them continue to flood across the border into greece. you wonder if that deal is at risk. we have already seen the risk that the migration story poses even to the merkel administration. how would you price that were make that work? is it too early to be doing that? join need to have that in the back of my mind? -- do i need to have that in the back of my mind? alberto: the geopolitical concerns are landmines. that would destabilize the eastern european region. the other one is turkey pulling out of nato. op-ed by the turkish president suggesting that turkey would seek new allies after having been a loyal u.s. ally for decades. the trump administration has been calling for a weaker nato. it is not a secret that steve bannon is in europe campaigning for populist parties in europe. i think the u.s. wants a weaker nato and it wants to continue to put pressure on iran and russia which has been supportive of turkey. there was a discussion by the in. envoy in london -- london asking for the support of the u.k. the u.s. wants to pressure russia

torlet: is their basis comparing it to greece? into hows now looking expose these european banks are two turkish banks and loans. is this fair in terms of the damage? >> it is not as extensive. it doesn't use the euro. you don't have the attentional for contagion but the big problem we had in the grease restructuring was going through the balance sheets, consolidating exposure and doing a restructuring. i don't think the exposure is going to be as high but you could see -- you saw impact today. talk a lot about hiking rates. some say they need to hike 300-6000 -- 600 basis points. has the 10 year yield up to 20%. one of the things you mentioned earlier about this is the trading and liquidity. when you need it you don't have it. then?s liquidity has it been hard to buy and sell , especially bonds? is not just turkey. it is all of our markets. fixed income markets not having liquidity. we have had to adapt our strategy to these gaps in liquidity. it ends up being tricky. if you want to buy into something you can't be picky. you just

if he takes them in does he "let them pass" to greece in europe? it is certainly one to watch. shery: thank you so much for your time. the deepening crisis in turkey leading investors to question whether this is an isolated event or it could spread. let's get of the check -- a check of the markets. bit of it has a little impact on u.s. markets, just the negative sentiment pushing the s&p off about one half of 1%. these small caps up almost 2/10 of 1% in part because of the stronger dollar story. small caps are a bright spot. to the small caps before i talk about the other major indices. coming from a lot of other things other than earnings, earnings applauded by investors. analysts are saying stay in, do not get out with overstock, you are getting a bull case scenario from an analyst saying they are on much further -- firmer footing. planet fitness up 7% on earnings. it is so hot outside, people are signing up for gym memberships. i want to look where we are for is week, given that it friday. on the s&p 500 we were looking for our fifth straight week of gains. now, looking at a

and that raises the specter of, could this be another greece? could this bring down the banking system? most analysts i have read this morning say probably not, the numbers are relatively manageable, but the idea of it has everybody on edge again. the problem is turkey's financials are not good. the budget of us not bad, but they have a large account deficit and inflation is rocketing higher because they overstimulated. so the choices are not very good. and the president had suggested that he does not want any of them, so people are looking at a wall and saying we need a door. alix: to that point, bloomberg spoke with erdogan and he talked about the central bank relationship with the presidential office. here is what he had to say. areow, first of all, you the head of the state. when the people fall into difficulties because of monetary policies, who are they going to hold accountable? they will hold the president accountable. since they will ask the president about it, we have to give off the image of a president who is influential on monetary

tom: peter dixon of commerzbank, and i dotioned greece not buy the idea that italy is the next greece. i am not a big fan of pricing versus foreign-exchange but here is the gloom of italy. 2011, 2012, we are nowhere near that. help me. italy is not greece, is it? peter: it isn't, clearly. on the one hand, italy is a much larger economy. it cannot be pushed around by that eu in the same way that greece was. tom: why doesn't italy push back? thing, it is the world's third-largest bond market. if you want to shake the italians, you start to rattle the italian bond market and that spreads risk through the rest of the eurozone. the italian position is they want more concessions, they don't want to leave. we are not hearing any signs from a tight politicians that they are serious about wanting to leave europe. in 2015, we had a situation where the greeks were prepared to leave the single currency region. it is very different. it is a different economy and environment. greece is one of the original signatories to the treaty of rome, integral to the eurozone. it will be cut more slack. tom: l

in the jet stream, a ribbon of wind that circles the earth, causing wildfires across scandinavia and greece as well as california. all experiencing high temperatures, as well as texas, africa, and japan. let's get more insight about this heat wave. alan: hi. what we are looking at is the u.s. midwest. you see extreme drought conditions from missouri to the main region of the corn belt, which will hurt soybeans at a time of pollination. key for the crop. iowa and illinois possibly seeing lower yields. that could drive up prices in the next few weeks. when you look in europe, over in the black sea region, you just saw wheat market jumped 6% today. ukraine will be limiting exports to keep domestic supplies there. ukrainian wheat crops have been affected by this weather. it is a band that goes from france to poland. there has been rain in recent weeks and days that may make the crop a little better, but they have a shortfall at this time. the final look is at china. when you look at chinese crops, they are getting more rain in recent days and weeks. that is helping corn and soybeans over there.

it's not like argentina or greece. with ary large country multiple of greece's gdp. i don't think you are getting points for basis turkey's government debt at the moment. >> i would agree that you need a higher risk premium for this country, and definitely that has been the case for the number of years that we've had a week fundamental set up leading to depreciation. we havehat trend, accelerated recently for a number of different reasons. obviously we need a higher risk premium for investors to get back in. i've looked at turkey for a very long period time. the level of hard currency debt, the typical stuff that leads to default risk, is not i think immediate. it is a risk if things escalate a lot, and we are far from that kind of level yet. it could happen, but we are not at that level yet. the main question is do investors get paid enough for the kind of risks. for a time that was the case. when you have fresh risk reemerging, investors are reassessing whether they get paid enough for that risk. francine: stick around. we will be back with alberto gallo and themos

that more than offset a marketing greece they had done as well. -- marketing increase they had done as well. good.l, i am doing pretty i'm confident compared to their rivals. how do they compare to rivals? i noticed the performance in china better than european carmakers that reported in the chinese market. >> the performance in china was good. the performance overall versus rivals was quite good. there assumption is right in the middle of what they are reporting. and theydone better were not sounding as many alarm bells as their rivals were. course, there's a lot of the year left to go to see. anna: thank you very much. bloomberg tokyo deputy bureau chief joining us with the latest on toyota. very focused on the trade conversation globally. u.s. commerce secretary wilbur pain unless more china changes its economic system. meanwhile, investors are expecting solid employment figures from the u.s. later today. a lot of talk about with regard to the u.s.. us. great to have you with i am drawn to these comments by wilbur ross. he says they will increase the pressure on china so that china

we see greece, italy, portugal, spain fall and the bonds are rising. i went to kick it on the great british pound because it is down today, even as we see a unanimous vote for a rate hike. it is all about the king dollar today as trade tensions ramp-up. ofwas nine to zero in terms voting for eight trade rate hike, but i'm afraid it sounds as though we will get more gradual rate hikes going forward. governor carney said in the speech to journalists that policy needs to walk, not run. there are more doubts of future rate hikes and down goes the pound. it is 90 minutes in the trading day in the u.s. and we have abigail doolittle with more on the markets. abigail: the global selloff in europe and starting in asia leading into the u.s. a little, but not real declines. the dow is on pace for this -- for its worst two days since june. the nasdaq managing to hold on to a small game because of the material sector. take a look at the smp material index down, --s&p material index down, weighing on the dow and s&p 500. let's look at losers on earnings. not just tr