>> a new turkey, erdogan tightens his grip. we are live in istanbul. pushes back. the prime minister deploys troops on the streets of baghdad as he opposes a more inclusive government. rejected again. foul first burns attempts to revive merger talks. four spurns attempts to revive merger talks.

welcome to those waking up in the united states. this is "the pulse." lights, camera, and lots of action. what does it take to make a stunt performer? lust, putting their best faces ialward, the newe face recognition software. from turkey to russia to israel, we have it covered. we have our international correspondent, hans nichols, live. ryan chilcote is here with me in the studio. the nation has deployed troops in baghdad. aviv atins us from tel the latest on gaza. that start with hans. erdogan wins the presidential election. 52% of the vote, extending his

leadership until 2019. it has consequences. >> it has consequences. the question for erdogan is does he take the power play, the pageantry of it all, and can he do it seamlessly. the leading business group has called for him to stop polarizing turkey. the question today is what is the reaction going to be from erdogan and the international community? the lira is down. it has been down this morning. the stock market is up. there is some optimism there. the question for erdogan, what does he due to continued growth in this country. years.he last 10 or 11 4% this year. to 2%.s put it closer inflation is a problem. he seeks to consolidate power, may erode

some of the independence of the central bank and that may mean putting pressure on the central bank not to increase industry, to keep money easy as turkey continues to grow. 10 -- theo make the country the 10th biggest economy by 2020. right now, it is the 17th. >> i was having a conversation saying it was important in terms of the prime minister, in terms of flexibility, and in terms of openness to change. who are you hearing he might appoint? >> this meeting is going on now justice and development party and they are asking themselves the question, can the current president be installed as the prime minister? he could be able worth against erdogan's party.

will he muster the party to take on -- will he muster the courage to take on erdogan? august 28 is when the new president has to be inaugurated. we are looking at weeks, not months. >> thank you for that. we will speak to you over the next couple of days. turn our attention to iraq and the nation's capital are. -- and the nation prime minister. ryan chilcote is here with the details. line, obama and a number of other nations push to create an inclusive government. this is not solution kind of stuff, is it? >> you have the iraqi prime making a clear

he intendsvening to to stay in power. also, perhaps even go on the offensive, accusing the president of being unconstitutional and extending the parliament, the amount of time a parliament has to examine other candidates for the position and deploying some troops in the iraqi capital, including troops around the home of the president of iraq, suggesting perhaps he is being aggressive. john kerry said u.s. supports the iraqi president. we hope the iraqi prime minister does not intend to stir the water. you have the situation to the north, the u.s. has been using airstrikes to strike acca at the islamic state. we just learned the associated press is reporting the united states is already arming kurdish

fighters. isn't it? a big step, >> it is a big step. we are not discussing the possibility of arming. sources will not say which agency is doing that. thean assume mib one of more secretive because of the way we are learning this information. certainindicate a readiness for the u.s., if not to directly get involved, because obama has been clear there will not be u.s. troops on the ground, to do as much as they can in a long-distance proxy. airstrikes, weapons to the kurds . people trading oil said, there kurdish oil to supplies in the north of the country. the larger supplies in the south of the country were safe. they do not see a geopolitical problem. thele are unconcerned about

situation on the ground in iraq itself. >> so long as the kurdish oil continues to flow, it might not be the level that the market wants to see, but it is intact. take me to russia. in -- exxon going towards their big joint expression project and putin saying it is good, a great thing. it shows harmony in relationships. >> he gave the go-ahead in a very public way to start drilling. he said -- he pushed the button manythe black sea on what people are calling the most important well to be drilled this year, and he where in the world. the head of exxon was there. great.id this was

they are spending $700 million to see if there is any oil there. aty will not know that for least 70 days. for the likes of bp, who has a 20% stake, it is now the most controversial. i thought there were sanctions to prevent them from ratcheting up their oil supply, and what is interesting here, perhaps this shows that the sanctions might be more toothless than we thought. the drilling equipment that they are using, and drills to a depth of about 240 feet. wereestrictions that imposed last week applies to depths of 500 feet and greater. was this just rhetoric from the european union? >> thank you very much for that. let's cross from the russian and

iraqi soil to gaza and israel. hamas militants have begun another 72 hour cease-fire. time to putotiators a lasting deal in place. david joins us from tel aviv. what needs to happen before a cease-fire? he for this cease-fire expires again? sides are steadfast in what their demand's are from the cease-fire and talks and what they expect to happen. the rhetoric is the same, even though they have reached a three-day truce. hamas is calling on israel and blockade.ase the they want to show the palestinian people that they have achieved something meaningful and did not just drop on themselves this war without

bringing anything to the palestinian people. they are trying to get the blockade eased up on gaza and they are talking about a seaport and airport in gaza. they do not want hamas to achieve anything whatsoever because that would allow hamas to say they are victorious. both sides are very much at a conflict and not indicating any signs of being able to reach some sort of longer, more enduring truths. truce. the faction bank -- based in the west bank would perhaps come to gaza and oversee the easing of the blockade and the movement of goods and people in and out of the borders. that is being floated around a bit more now. calling forelis are the army to go back in, take

gaza. how realistic is that? a bit of a talk here and israel, especially for the more conservative elements of the government, of the israeli parliament. into gaza, to show hamas they cannot keep firing rockets in definitely. to take back the gaza strip and rockets and of the weaponry. benjamin netanyahu has been clear that he is not seeking to go back into gaza right now. that still seems unlikely at this point. >> we will leave it there. ahead, a crude discussion -- how much impact will the ongoing geopolitical tensions

have on the price of war? we will talk about that when we come back. ♪

>> welcome to "the pulse." for a quake foreign-exchange check for you. traders at their best. the most bullish in over a year.

this week is a big week. retail sales come out over the course of the week. rise. looking for a de-escalation of risk around the marketplace. we are seeing quite a position of long, if there is a de-escalation. money is still going into the dollar. money is coming out of the yen, against all major currencies this morning. you are seeing a little bit of a shift there. the overall tone is one of dollar bullishness. our next guest says despite the geopolitical conflict, there will be limited impact on oil prices. joining us now, the energy strategist at bnp paribas. near-term, the market seems to be appeased that there is the american strikes defending the kurdish positions in iraq and the fact that iraq

still remains intact. oil prices have fallen about three dollars over the week. that tends to lead to higher prices. the general census, supply and demand is balance. particularly, in iraq, surprise from iraqi exports of crude, which comes from southern iraq to almost exclusively. it is the longer-term issues that need to concern the markets. >> those issues, we have america in air act, but we have the deploying, malachi, troops on the streets. inthe biggest threat that three years time they are not in a stable position?

within the three-year window, the fear is can the oil production from southern iraq be sustained? going forward, i think this issue about investment in new place,ion does not take the hope for increasing iraqi emerge as, it may not quickly. iraq, the northern kurdish people have plans to via their own pipeline into turkey. this is a scope for this production being delayed.

that will also have an impact on iraqiraqi -- on planned production. >> a bigger macro picture, u.s., there is no structural problem with supply. is that fair to say? you have the bombs and moments of agitation, supply is plentiful and will go on to be plentiful. produced fromo be unstable areas, perhaps no one could -- oil production has collapsed. no one has anticipated the isis would gain a foothold in iraq.

mineare the elements that lead to that oil being disturbed. if it is disturbed, saudi arabia would be able to make up some shortfall. world has,that the if there is an additional outage, it is very small. as a consequence, that feeds into prices. we have a current situation where the markets can cope with limited supply disruptions. at the moment, we are in a situation where the consequences , oil exports in iraq have not been affected. about the demand side. we are going to get a flush of gdp in europe this week. geopolitics at play. from the demand side, what is your research telling?

what is the baseline assumption on global growth? how is china plan to that? a lot of it is predicated on developing economies. also, we are seeing growth reemerging from economists. there have been a few economies with oil demand growth. concern about me -- around the , with enhanceder coveringcal risk, europe may be impacted by economic sanctions that might take place on russia. this has an impact on the risk of reducing expected rate of oil demand growth. they might come in

slightly lower. geopolitical tension t -- tends to lead to a stronger dollar. >> thank you very much for joining us this morning. gareth lewis-davies at bnp paribas. screensme, famous fight -- fight scenes on the screen. ♪

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we do action sequences for films from beginning to end. we core graph -- we choreographed fight scenes and choreographed the filming of them in the movie. some have dance backgrounds and breakdancing, you need people with extreme talent. >> i was a gymnast. i don't have a fight the background at all. when i my first punch stepped foot in this jim. -- gym. every job is different. the hunger games is running and jumping, axman is more like fighting and flipping. is more like fighting and flipping. >> it was the passion in martial

arts that allowed me to build this company. there are actors i can do 90% of their stunts and can do them better than their stock performers. pitt, matt damon, hugh jackman. tricks to thet of trade. the stunt double is more prominent in the film then you realize. there are ways to disguise them. a lot of our stuff is rigging wires,d, safety photography that we apply to green screen elements that make us look like we are in a dangerous spot. face, iu cannot see the would say it is usually a stunt double. most of the time, they are not hitting each other or making contact. there are accidents sometimes where people get hit. i have had knee

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>> welcome back. manus cranny. here are your bloomberg top headlines. traded higher after consumer inflation came in below the government boss goal for july. the communiststs party leaders have leeway to roll out more stimulus measures to support the economy. the ukrainian government is rejecting a cease-fire off -- offer from the pro-russian

rebels. -- travelingmakers from ukraine to europe. a revised merger proposal. the merger would undermine the sale process of its new york-based units. rillion approached the company to revive talks that collapsed in late july. those are your headlines, let's get a touch on the markets. >> we have the balance. equities up across the board. dax, up by 1.33%.

the index was down from his 2014 hi. german tenure is a little lower today. still near record lows. there was a period of severe market stress. the difference between now and then, italy. record lows. italy. not painting a pretty picture of the euro zone economy. let me bring you three things today. we talked about balfour beating carillion. two big banks. they maintain the inclusion of those particular stocks. news for the russian lenders, stocks are up by over 3%.

a stronger krone, why? cpi comes in higher than anticipated. >> matt campbell joins me now. this is the second time that balfour has rejected carillion . return the funds to the shareholders. what has gone wrong? karelian -- carillion came .ack to balfour

-- >> why is it so important? is it a trance formation of a part of the business? >> it was seen a bit of a crown jewel. there was some surprise when balfour decided to sell it. thestate was that acquisition was not working out. a -- betweene is the two companies. the road to organic growth can be long and not always smooth. the door is closed? >> i did not think it is totally closed. are making an effort to

make the door slightly open. it does mean they are trying to signal the market that this could still happen. hostile deals are not the hallmark of british m&a. >> i do not think it is a cultural thing. if you look back at the history of the city of the financial market, there have been plenty of hostile deals. they have almost become a bit of a taboo. pfizer-astra did not go hostile. part of that is the takeover code that was making it more difficult to go hostile.

we still have some skittish chief executives. you have to feel very good about the world and future, and perhaps we are not there yet. it is 25 minutes to go. tom keene is revving up in new york as we speak. i hear you have a big ceo. we will talk about iraq, certainly. troops within the green zone. richard haas will join us. he is president of the console. we will speak about iraq. we are looking forward to speaking with richard haass.

richard johnstone will join us. we will speak to the head of the eurasia group. >> we have looked at turkey and russia. when you look at that, it really is -- it turns and swivels on a knife edge. >> at least to a lot of controversy. one of the back stories was criticism by secretary clinton. real criticism of the obama

administration and how they have applied their strategies to iraq. it,om, we look forward to as always. tom keene at the top of the hour with "bloomberg surveillance." let's talk tech. in an effort to fight crime, one police forces testing they show recognition systems. it is analyzing their records apartt local crooks, but from becoming a police tactic, doesn't hold a greater role for the future of our lives? hold a greater role for the future of our lives? getting a positive id on who committed the crime. they are running a six-month trial to see how it holds up. footage, and if we can get an image from that if it is a good enough quality, we

will download it onto the search database, we will run it. it will give any potential matches. >> a human operator is still needed to check the matches. >> it has brought back the top 200 potentials. purely looking at facial features. this is where i can zoom in on faces for distinctive features. potentiale officer a person. if the person is not in the database, the system does not work. estimated run has an success rate of 44%. another version allows employers monitor movements in real time. an improvement.

it recognizes returning come -- customers, allowing to start targeting. facial recognition technology could turn your face into a commodity. following the recent scandals and mass surveillance and how changelic reacts, it may how technology affects our lives in the future. >> pretty scary stuff. coming up, a new turkey. we are live to discuss the road ahead for turkey and the results of the nation's first presidential elections. ♪

>> welcome back to "the pulse." the elections -- that is what we are focused on. turkey's prime minister has won the direct presidential election. it extends his rule through 2019. hans, you have a special guest. >> we have a special guest.

the man who knows the country cold. we were last you the first question -- we will ask you the first question. the prime minister? >> he is too independent-minded for the kind of cabinet that erdogan wants to have. will not even play a prominent goal and the convention. my candidate, the leading candidate is the current foreign affairs minister. outsiders are named, i have not really heard. [indiscernible] wants bowlers, he wants yes-men. >> that is correct. a his vision, he needs

streamlined administration. a man who can meet the nerve ends of the state. the functionry out or duties as expediently as possible. the drawback is that there would be no checks and balances in turkish policymaking. jeopardizing -- or -- where is a one-man show. russia have oil and natural gas well. turkey does not have those natural resources. >> this is a guy who keeps playing. i am afraid it is not going to be the new economic policy of turkey, which means alibaba is

out. his protége, the central bank [indiscernible] we'll be forced to cut rates. or resign and be replaced by someone. is very much at risk. >> very much at risk. >> if he does not resign, he will change the law and change the central bank mandate. belation targeting will abandoned. the central bank will report to the president's office. the lira is on shaky ground. the only thing that supports the lira is the trade. once trade and's moderates, the

lira is only one direction to go, which is down. >> 10%, then 20%, and a down of 30% over the next 20 years. in many ways what happens here -- what is your outlook? i do not believe inflation is dead forever. the american growth rate has not slowed down as much as people anticipate. i would expect deals to accelerate gradually. scenario which is .ifficult

each year, $200 million or 25% -- where entities are shut off, turkey will have payment problems which will spread to higher inflation and low growth rate. >> we have the potential worsening situation in russia and ukraine. >> i am optimistic. everything works to turkey's advantage. i am not making this up. i am almost quoting directly from investment banking reports. unless erdogan changes his

management style and turkey talks about structural reforms and we revise our growth model , turkey will not do well in what we call the new normal. the problem with iraq, never implications,ical $6 billion within the next six to 12 months will be evaporated. turkey's trade losses would amount to 1% of gdp, which means 1% lower gdp growth than 1% higher [indiscernible] current to reach unless the next year iraq situation changes, it will be higher than 7%, which will be

difficult. there anything to be optimistic about? tanks in theconomy third-quarter quarter or russia rateses war in american stay low forever. >> thank you for your time. it backt, we will send to you. those are some pretty outrageous calls. -- not calls, quotes from you guest. low rates forever and russia decides to declare war. stay with us. we will be back. ferro will give you an outlook on the eco-front. ♪

>> it is time for a currency check. turning most bullish in almost a year. ?hat could falter that retail sales this week. 2/10 of 1%, a rise. positioninginitely here to the long side of politics. with that in mind, we have an expert on politics.

off with you, ryan. we have iraq and we have issues prevailing in ukraine. what is the latest on ukraine? >> i am watching donetsk. it is a city of one million people. many people have fled. largely surrounded by the ukrainian military. a prison was hit by artillery fire. prison, someut of returned because they said it was safer in the jail. a significant excavation in u.s. policy beard in baghdad in the last five minutes, forces loyal to the prime minister have started closing some of the roads. we have the standoff between the iraqi prime minister and the

president. there is concern it could get ugly. >> that is escalation over the past couple of days. bank of england, unemployment numbers, wages, some new targets. wage growth is set to get worse. this is the problem. slot, is a structural? what is happening here? unemployment drops. wage growth, excluding bonuses, at an all-time low. how much slack is left in the economy? what is going on? that is something they have to square when they meet. to highout the roads rates and what do they think? call.s going to be your you take a viewpoint on that and that will be your call as to

whether you want high rates. it is for greater minds than mine. we have a new poll. 33 respondents. they supportll say carney's view that there is more slack in that zone. wage growth is under pressure. back and talk it to me about your take on where we are with putin and the de-escalation move. >> on one hand, you have the russian saying they want and on the other hand, you have the russians threatening to launch a humanitarian aid mission into the east of the country. that might involve russian troops. again tomorrow. thank you. keep it here. "bloomberg surveillance."

that is up next. you can join me on twitter. globally pleasant -- present on twitter. join the debate. ♪

>> maliki demand a new term in baghdad. meanwhile, ukraine attacks separate test --separatists.

the truth holding gaza. returns to presidential election. and the u.s. naval academy is inundated in annapolis. good morning. this is "bloomberg surveillance." we are live. i am tom keene. joining me, olivia sterns. scarlet fu is off. adam johnson is on assignment. i think they are both on vacation. let's get the morning raid, here is brendan greeley. >> germany is underperforming spain. the engines buttered in the second quarter. have deemed food and cisco out before the bell. pace one of my favorite companies not based in the valley. >> no idea what he said. >> they host websites. so, they h