♪ to the couch where you at? ♪ ♪ show me the latest medal count♪ ♪xfinity's where it's at. ♪ welcome to it all. comcast nbcuniversal is proud to bring you coverage of the rio olympic games. guy: welcome to "on the move." we're counting you down to the european open. i am guy johnson. i am alongside caroline hyde. this is what we are watching this monday morning. turkey, president heard it on consolidates power after a coup fails to bring him down. where does turkey's political path now lead? investors on edge. the lira strengthens this morning. jump. default swaps how will the crushed uprising

impact investor sentiment? .he market is about to open and an arm and a leg. japan's softbank pays $32 billion for arm holdings. is this a big bet on the internet of things and -- or an opportunity for currency trade? we will discuss that. not 29 minutes away from the european equity market open. looks like we are going to see a reasonably positive start today. over to the bloomberg and the wei. the fair value calculation tells us we will probably be of 3.5%. a big premium being paid for arm holdings. phenomenal move. we will dig into that m&a. assete see m&a across classes? the pound is so much cheaper, particularly when you compare it to the end. the lira rebounding today.

the dollar is lower versus the turkish lira. breaking news that turkish stocks have opened and they have fallen. turkish airlines, the tourist industry being particularly hit. u.s. futures up .3%. money coming out of the yen. no need for that haven and no need for gold, either, it would seem. part --k aversion sparked by this concern in turkey. we have great analysis coming up across the program. we are definitely covering this story in a big way. on the get some details turkish market opened in just a moment. we are on the ground in istanbul . we will get to those two gentlemen in just a moment. let's get you caught up on news that you need to know.

>> john kerry says the u.s. is awaiting a formal extradition request for a pennsylvania-based .leric the u.s. secretary of state calls for evidence that will stand up in court and dismiss any accusation of u.s. involvement to the uprising as a responsible. softbank has agreed to buy arm holdings for $32 billion. the japanese company is offering premium tofor a 43% the deal secures a slice of virtually every mobile computing gadget on the and connected devices in the home. it would be the biggest-ever take over for softbank, which has become one of japan's most inquisitive companies. condemnedobama has the murder of three police officers in a shooting in baton rouge as the act of a coward. police say a suspect has been killed but did not give further details.

two weeks ago, police killed an african-american man setting off a protest that was followed by the killing of another black man by minneapolis police. global news 24 hours a day, powered by journalists and analysts in more than 120 countries. this is bloomberg. guy: it certainly is. let's get back and talk turkey. .urkish stocks just opening up let's go to our bloomberg markets middle east anchor and .enior reporter in istanbul we have seen the market open. give us the details of what we are seeing. >> turkish stocks are up and running and down over 2% as we're speaking. the decline arguably less than most analysts and decision-makers have been expecting. we are seeing a lot of selling

when it comes to materials and information technology. youave pulled this up for to get a better idea on the breakdown of what is selling and what is under pressure. your traditional place under tremendous pressure. the breakdown is to be expected. keep an eye out with the financials. those are going to be an important gauge about how investors are feeling about turkey and the developments over the weekend. financingy, companies costs are a very high chunk. so a good indicator of credit risk. 30 index.of the these are some of the classic stocks. at the end of the day, we had spoken on thursday that there were very strong buy signals in turkey and that these violations

were at a discount compared to .ost emerging markets peers investors not as concerned as we had expected, but we will keep you posted about how capital flows play from here. caroline: thank you. i will take over from here. we are seeing credit default swaps creeping higher. clearly, some risk in the market. standing by following the events very closely. mark, the coup is over. how concerned should investors gan's next steps? is the issue. there is a relief about the fundamental point, which is that failed. the government remains and the institutions remained and so on. the real things that people were concerned about were the coup.

erdoganake of the coup, has taken a number of steps already. they have dismissed 2700 judges. that will have a big impact on the courts. the question is, where does he want to take it from here? i think that will weigh on the minds of investors because there is a question about, at a certain point, the stability provided by strong leadership dealing with the coup and so on might be outweighed by damage done by institutions, depending on how far he goes. eu foreign ministers are meeting in brussels as we speak. does this rule out the possibility of turkey joining thanu in anything other the extreme long-term? marc: i think that has been a dead letter for some time.

there is a possibility that now you have a line drawn under it if turkey decides to reintroduce .he death penalty a lot of crowds over the weekend were calling for it. the government said they would look at it. one of the fundamental memberships for eu and talks on eu membership is that you do not have the death penalty. the reason why turkey got rid of the death penalty, so that they could begin talks with the eu. if they reinstituted it, that would have a significant impact. thank you very much indeed. anthony skinner is the head of political risk and joins us in the studio. take us forward. walk us through how this picture is going to evolve. a lot of investors around the world very nervous.

anthony: they have good reason isbe nervous because erdogan likely to solidify his grip on the executive his next step is to establish a presidency. his mission is to try to establish an executive power which is enshrined in the constitution. there are two options. one is to hold a referendum. the problem with the referendum, it is not guaranteed to succeed because society is split down the middle. the other option is to hold new elections. gan'sould play into erdo hands, but it is not guaranteed to succeed. that said, there are some positive dynamics playing into his hands. party are having their immunity lifted it at the same time, they would be ejected from parliament. guy: how quickly will he call a

general election? >> i think he will hold public opinion polls to determine what extent public opinion has shifted even more so towards that party, especially the nationalist constituents. feels they can tip the balance in favor of a full-fledged presidency, we can expect elections in the next few months. give us a sense on the conspiracy theories that abound as someone is driving this. what about the relationship between the u.s. and turkey? we know they are calling for him to be extradited to the united states. is it april the that this man who was living in pennsylvania was behind all of this? marc: there is no conclusive evidence to suggest -- anthony: there is no conclusive evidence to suggest he was behind this.

failedocu -- there are some that say that failed coup attempt was staged for the president to solidify grip on his target this is a sensitive time for u.s.-turkish relations. washington released a very strong statement indicating that they should not implicate the united states in this in any form. but the united states will consider the extradition of us based on solid evidence. seenurse, we have ,ashington and ankara at odds with washington supporting the people's protection unit. this is the syrian kurdish military group, whereas power is against this group, which is effectively an extension of the pkk, which constitutes the most

significant strategic security risk for turkey. we can expect significant friction and tensions over the coming weeks and months. strained withrly the united states. talk to us what happened with the eu and turkey. what about the agreement to do with the migrant crisis and visa-free travel for the turkish ? expect those negotiations will continue. perhaps not so visibly. erdogan is likely to used the coup attempt as ammunition with his negotiations. migrant deal is pivotal for politicians. you have to deal with the brexit fallout. you have to deal with the rise of antiestablishment parties. erdogan will use the failed attempt to show that turkey needs robust legislation related to the fight against terrorism and robust legislation

related to being able to scrutinize personal protections of data. will use this as part of his negotiating platform, realizing the hands of european leaders have been weakened because of the european union fallout. of course, the reality is that awayy has shifted more from democracy, protection of human rights, checks and balances. this is a very clear area of concern and is a significant risk. the negotiations in relation to this migrant deal and visa-free travel for turkish nationals in europe will fall apart. guy: thank you very much indeed. anthony skinner, thank you for coming in. up next, we continue the conversation with a guest who says the situation in turkey was deteriorating even before the coup. this is bloomberg. ♪

guy: 14 minutes until the european market open. the turkish target is already open. let's check in on how assets are performing following the failed coup. the stocks are down by about 2.35%. though the rest is going back a little bit. the cvseen a jump in

and in the 10-year bond. good morning. is turkey investable right now? >> i am not an emerging market thater, but i would say the impact on the other markets, it is not as significant. if things were to go worse in turkey, that would have an impact. guy: how does this impact european investments? as we were discussing, europe has an ongoing relationship with turkey about eu membership. that is a very long-term relationship, but also has a short-term relationship vis-à-vis the migrants. this is near abroad for europe. spillover, it any is not made up now.

it is similar to what happened a long time ago. it does play to the political risk. maybe not at this stage. if things were to get bad, it would be a factor. caroline: in terms of where money should be going, if it is coming out of the tourism sector, how much can this hurt the economy of turkey? >> i think it would. see, if he takes this into account to boost his side of the argument, he is putting up a more presidential form of government and it takes more power. lastly, that is the investors want. that could have a big impact on the market. i have pointed out before that india looks very attractive. china is doing its job of managing the economy. where does this take

turkey? ?hat kind of box i am trying to think about how i think about turkey. am i looking at the current a doubt -- account deficit, political risk? >> things were worse in turkey before. things were getting better before the coup started. they have a huge current account deficit. it was the case before. expert, butturkey what is the policy going to be? are they going to go down the path of being autocratic as mr. putin is in russia? that will take time to figure out. you are going to stay with us. plenty more still to come from him.

we are minutes away from the open. we will look at some corporate movers in today's trading. armed is going to be a day story. softbank is paying a massive foring for our -- premium arm. why do they want it? what are they going to do for it -- with it? will anyone else pay even more for it? it is all about the chips. nine minutes until the market open. this is bloomberg. ♪

guy: it is 7:52 in london, 8:52 in berlin. let's check in on some of the assets on the move this morning. turkish stocks and the lira a big focus. as you can see, negative seems to be the story. flight torman bund's, safety. the euro continues to drive ever lower. stories this morning, absolutely fascinating. caroline: we're going to see such a surge for one in particular. 45% because that is the premium that will be offered. on my chart, the market cap of arm holdings, more than 6.7 billion pounds. this could leap up to the tune of 24 billion pounds. of course, we see softbank's offer. this is a designer of chips that going to about 95% of all smartphones significant movement into the internet of things, taking on the likes of intel.

will it still get to do with the regulators? you have heard the chancellor of the united kingdom saying british assets three weeks after the brexit and they are still en vogue. is it more about the expansion into the mobile sector? softbank saying we look at this before brexit. it was already appetizing. some commentary coming about what its clients, samsung, apple, qualcomm, how will they feel about it no longer being independent? the key stock to watch and all of that is arm holdings? guy: it is all about arm holdings. we will show this later. it may have been something they were talking about before. that is a nice correlation between those two. you think the brexit is a good idea.

is the market reacting rationally at this point in time? >> i think it is. things are going to start looking up immediately, they were just naïve. slowdowngoing to see a and we have the reaction coming from the bank of england. the government is abandoning its policy for the right reasons. i think you will see the money being pulled by the government. arm, is this opportunistic? or is this a brexit story? >> they had a stake in alibaba. they were looking at this. arm is a market leader in chip design. i think this is a good story for softbank and how they are positioning themselves in the internet of things. going to come back and we will talk more in detail about that in a moment. the future story is positive in

europe. .2% rise on my bloomberg fair value. london is going to outperform. that is the story we have been discussing. arm is going to have a huge pop at the market open. we will take you through those numbers. the open his next. ♪

guy: good morning. this is "on the move." i'm guy johnson. caroline hyde is in berlin. we are moments away from the start of european trading. caroline has your morning brief. caroline: turmoil in turkey. president erdogan consolidates power after a coup sales to bring him down. where does turkey's political athlete? investors on edge. the lira strengthens. credit default swaps jump. how will the crushed uprising impact investor sentiment? arm and a leg. softbank pays $32 billion for arm holdings.

is this a big bet on the internet of things are taking advantage of the pound on the back foot? guy: futures definitely higher. arm going to be a feature of today's market session. this is the european open. let's see how things open up. london could expect some arm benefits. definitely some strong-arm coming through here. move ajust beginning to little bit, there we go. negative from london. the futures definitely pointed to a positive start. we are waiting to see arm open. i think that is going to be the critical factor. let's see which way we are going to go on this. initially, the market reaction for the ftse is negative. that is the white line. we are trading down 0.2%. let's see how arm opened.

it is going to be a big mover. i think the market makers may struggle to get a price on this one. the merger guys are going to try to run their slide rules over whether there is the possibility of a second bid. at the moment, london is negative. manus cranny. manus: we are waiting for that. that premium is a 43% premium. the question is not so much about a counter bid, but whether theresa may, the new prime minister, blood consider letting the jewel of british industry get taken over by softbank. that is something we wouldn't normally talk about, but it could be about regulation. this is the stoxx 600. we rallied over 3% last week. you saw the banks and basic resources take the stoxx 600 up.

tragiced back on the news. you just put up the arm price. information technology is the driver here. all ships rise on a big old tied. softbank,s a deal for what does that mean for the marketplace? energy is down 0.25%. our colleagues saying that $40 is where the market thinks we could be. this is the turkish lira. what we saw was the biggest drop since 2000. we've managed to retrace near 50% of that move so far. the market is dealing with the aftermath of the coup. commerzbank states that you could see the currency strengthen. goldman sachs are more worried about the enduring effect, the ramifications in terms of hot

money going into turkey. goldman has moved their lira target to 310. willis thanks -- will the central banks for a 50 basis point cut? we haven't got it yet. we closed on friday night at 11.89. this gives you a sense where we go. keep an eye on the pound as well. you've got this dramatic move post brexit. the analysts are saying morgan -- bnp paribas say sell cable. [indiscernible] the comment from the bank of england really summed it up for me in terms of the bank of england. i would rather run the risk of taking a sledgehammer to crack a nut then taking a miniature rock

hammer to tunnel my way out of prison. what movie did that come from? caroline: i'll pick it up from here. a quick sweep through the markets. let's return to our crucial m&a story. breaking headlines out of our arm holdings'-- ceo. it is unclear if senior management will stay on. we heard from softbank, saying they would look to keep the headquarters in cambridge. they said senior management would remain in cambridge and they would double the employee headcount in the u.k. in the next five years. is this a bit on the united kingdom, on the pound, or on the technology and the dominance that arm holdings has as a designer of chips? also starting to make inroads into automotive, internet of things, and servers, stealing market share from intel.

let's dig in to this 24 billion billion,l of a $32 with manish singh. talk to us. technologyit on the that arm holdings has more on the u.k. economy and when we go post brexit with the pound plunging? manish: i think this is a bit on arm holding as a company. makes it look like the u.k. is a very attractive destination. as you mentioned, the ceo of softbank has said they are looking to double the headcount in cambridge. guy: let's get a price on the screen to show people the stock has just opened. we are up 45% on arm as we speak. roll this into my screen so we can show everybody what is going on. basically that is where we are

now. that is the bottom of it. just to show you the extent of the move we are seeing, a huge move coming through in arm this morning. 46.62%. sorry, caroline. i interrupted. caroline: you are exactly right. looking across -- sorry, carry on. manish: i think at the end of the day, it is more a story about arm holding as a company and the role it is going to play in internet of things. i read a comment from the justellor this morning, show the confidence in the u.k. economy. of: i've got a stock price 17.27. that is not a big launch above 17, but we are above 17. the market is signaling there is more to come. manish: probably. arm is a very attractive company. you will have a lot of things

controlling your devices. arm is a market leader in smartphone technology. this looks like a very good premium. i'm happy about this. caroline: look at what is happening to some of the competitors. imagination technology up 10%. if you check out my screen, unsurprisingly, the one key out performer in terms of industry today is technology. up 3.8%, your best performer when it comes to the stoxx 600. are you expecting m&a to become more rife within this sector going forward? manish: i think that m&a and technology, that is an ongoing story. you are going to see more of that. you don't see a huge amount of growth coming through in terms of gdp.

there will be more acquisitions. a lot of corporates have cash they hold on the books. i would think you are going to see more of these things. you own the stock in one of your portfolios. manish: i'm very pleased. guy: you get a big premium, a lot of money back. where do you put it, back into tech? manish: i think back into tech, though i have put some limits because i do have concerns going forward at how long this rally is going to sustain. we saw good u.s. consumer data that showed spending rose by the highest in 10 years. also you have risk factor in terms of banks, referendum, u.s. election. guy: why did you buy it in the first place? manish: this has been long-standing. the project was very simple, that arm is a market leader in

smartphone technology. guy: did you believe there was an m&a premium that needed to be built into the stock? manish: not really. but you do believe these market leaders are going to get acquired. they have a huge cache of intellectual property. guy: stay with us. manish singh from cross bridge. recession inside for the u.k. we will talk about the outlook for a post brexit britain. this is bloomberg. ♪

caroline: welcome back. let's check in on how the markets are opening. green across the screen. technology you're out performer. on the downside, the miners. m&a, is there more to come with the british sterling at its weak as it is? the dax up and cac 40 similarly driving into gains. france reels from the ramifications of its terrible atrocity on thursday night. guy: let's talk you through some of the stories caroline has been mentioning. arm, the stock story of the morning, trading 45 pence north of the 17 offer that has come through. you can see it very clearly. arm, the standout performer. stocks in thetech

mix as well. i want to take you to the bottom , the miners moving to the downside as well. you've got when core, anglo selling off. i'll just run through and check. thomas cook is another story i want to bring out. i'm going to run you through it. this is the travel and leisure sector in europe. you've got thomas cook trading down 4.70%. this week it is turkey. the story across the british aboutis, people talking canceling their holidays to turkey and that being reflected in the market. was one of the stories people were focusing on. let's get an update on that and what is happening around the world. he's juliette saly. juliette: thank you. john kerry says the u.s. is

awaiting extradition requests for a cleric suspected by turkey of inspiring friday's attempted military coup. the u.s. secretary of state called for evidence that would stand up in court and dismissed u.s. involvement in the uprising. china's housing market cooled last month as second-tier cities joined some of the nation's largest hubs. new home prices rose in 55 of 70 cities in june, versus 60 in may, with home sales increasing at the slowest pace this year. prices also fell in 10 cities. condemnedobama has the murder of three police officers in a shooting in baton rouge as the act of a coward. louisiana police say a suspect has been killed. two weeks ago, baton rouge police killed an african-american man. that was followed by the killing of another black man by

minneapolis police and the murders of five dallas officers buy a gun man. global news 24 hours a day powered by our journalists and analysts. you can find more stories on the bloomberg at top . guy: thank you. the u.k. will fall into a "short, shallow recession" around the turn of the year as brexit hits house prices, jobs, and spending, according to the ey item club. predicting the boe will cut interest rates to zero by the end of the year. manish singh is still with us. as we mentioned earlier, you thought this was a good idea. manish: yes. i'm not surprised. what i would say is that the effects of brexit or the benefit is not going to be a short-term

one. it is a decision to have more control over its sovereign future. the brexit vote to me was more about that. if you see the new policies being proposed, we had a lot of china, terms of india, so a lot of work has been done. only three weeks ago, people were saying there's anarchy. we have a government and a stable chancellor and everything. the good thing is that we have a stable government. the response coming from the government is very positive. , what aboutnnish the concerns surrounding the eu reaction to the now stable government as you call it. we have new leaders in place, but there seems to be something they could even look to suspend britain's voting rights in eu institutions.

are you worried about the invoking of article seven? we are getting familiar with these bits and pieces of laws and regulation. manish: i'm not aware about this article seven thing. i would guess that given the u.k. wants to go out and is looking to invoke article 50, you will see the european commission play ball on that. it is not as much about what european commission to do. it is more at the political level and bilateral discussions. that is something we have to bear in mind. in my view, both sides have a lot to lose and not least at the time when eu has another big problem in terms of italian banks. i think that eu is not on firm ground to have a fight with u.k. and it doesn't help either side. it could make things better for both sides. more will be a far conciliatory dialogue. guy: what should be the right

policy response? we've got talk about rate cuts. halladay was talking about a package of measures. that is from the bank. what about from the treasury? manish: i do believe you have to have very strong feedback in terms of, don't do it piecemeal. show that we are ready and we are going to deal with it. from the treasury side, i think a big dose of fiscal spending is going to help. we have not done fiscal spending anywhere. japan and u.k. seem to be leading the way. we are going to run a higher deficit and that cuts into spending. at a time when the economy needs because there is chance of a recession, that could be seen as positive. if you can prove that we have the policy response which is

necessary, that can be seen as very -- guy: how do we stop the current account blowing out? weakening currency is going to help the current account because imports are going to fall. is the economy. you have to export more. you have to take advantage of the lower currency. that is what we have to look at. caroline: weakening currency or has it weekend to its full potential? will we see it get even weaker when we see policy moves from the bank of england? manish: i think the currency is going to weaken more. my target was that sterling could go to 1.25. we are likely going to have a rate cut in august and more fiscal spending from the government as well. i do see that sterling is on its way down. 1.25 is still my target at this

stage. i am not a buyer of sterling at this stage. guy: stay with us. the banks still very much in focused. what is next for italy's banks and as we hear from the u.s. banks, what are they telling us as well? this is bloomberg. ♪

guy: welcome back.

the equity session dominated by arm, but banks never far away. banks once again under the microscope. today we get figures from bank of america. tomorrow, goldman sachs. banks in europe facing very different problems with uncertainties surrounding brexit and italy. mannish sing is still with us. i want to take you to my bloomberg. this is the european banking sector. two banks are in positive territory this year, year to date. bancof america -- popolare, paschi, unicredit, it has got to be a no-brainer that something needs to be done. manish: let's look at some of the numbers. you can look at bad assets. in u.k. it is 1.5 percent. italy, 17%. you are talking astronomical

numbers. the thing with the italian bank and rescue is, they have to do something about it. the same banks were passing stress tests last year. stress tests have been ignored for a long time and that cannot be ignored when you have other banks doing very well. afoul of the falls rule that you have established last year. you cannot bail out the banks unless you bail in the shareholders. this is a political crisis. italy -- in [indiscernible] you cannot wipe these people out. guy: you brought up interesting numbers. this is an bl for total loans. you bring up some of the other numbers. that is the peak back in 2009.

now it is 18%, slightly higher, for italy. is there any point putting money into italian banks before you fix the legislation to bring that number down? that number is crushing. there is a fuzzy number that surrounds that. manish: i would first say no. unless you are creative and you want to take advantage of a bailout. it isn't as simple as that. if the gdp growth does not accelerate, your bad assets keep going up. when brexit happened, the italian treasury ministry lowered the growth expectation of italy by 0.8%. unless you take that bad asset out and let the lending start once again, you are not going to have growth in italy. it needs to be sorted.

the bad assets have to be taken care of. caroline: how worrying is this for the rest of the banking system? which is part of unicredit. think it is a systemic problem. let's look at two ways. the eu says you should bear in the shareholder and bondholder. that could lead to losing the referendum. i think that is a big systemic issue. if you don't do it and the situation keeps getting worse, it is going to impact all other banks in the eurozone as well. this issue cannot be kicked on and on with no resolution being formed. i think the resolution has to be formed very soon. i have a feeling there will be a bailout. they may give relief by saying some bondholders will get equity

and it provides them liquidity. you will have some going on there. caroline: mannish sing, great to get your viewpoint. thank you for all your time today. really appreciated. ♪

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guy: 30 minutes in the market trading session. travel stocks are down to let's say the picture. europe up around 1%. .7%. stock story, fascinating, caroline. caroline: some of those individual moves have been about holdings. they offered a 43% premium. 1700 is what they are being offered by softbank. they are trading in excess of that. could be a bidding war going on. how much is being driven by a slightly savable british pound. eye onle, keeping an

hapag lloyd. lastly, thomas cook, this is related to turkey. the twofications of that was overwhelmed in turkey. still, this is not good news or travel sector that clearly has many a concern. guy: absolutely. story, foreignhe ministers have been arriving in brussels ahead of a meeting with an ominous agenda. secretary,. foreign boris johnson making comments ahead of the meeting. >> on turkey, it is important restraints- we see and moderation. guy: let's get an investor

griffiths joins us now. how investable is turkey right now? we see quite a few external, internal issues, at least a lot of volatility. it is not unenforceable -- on investable. guy: do you think it becomes easier as he asserts a full grip on the authority of the presidency or does become more difficult? nathan: we could see volatility die down in the next couple of months, because despite winning 50% of the election last november, he is struggling to push through a shift in power to the presidency. now we know with this failed coup, we get more support for

-- that- for air to gun political risk could die down. we think it is a negative direction that the country is going in. caroline: you are underweight turkey at the moment. what does this mean for the dogan but the central bank policy as well? how will this filter into the assets and could -- that turkey might be seeing a flight from? nathan: the cbt is pretty much under his control. the monetary policy committee is run by his cronies. we could see another soft patch of turkish growth, very clear that his view is that the interest rates are too high.

they will look to stimulate domestic spending. look for further rate cuts. if you on the cbt now will stand in his way -- few on the ebt -- on the cbt will stand in his way. it could be taken by with a policy that is negative in the long run, but they are getting away with it. guy: if you were to look at the assets, something you would consider in turkey, what would they be? if your mandate requires you invest in turkey, what areas would you be putting money to work in? some industrials, generally -- [indiscernible] companies, strong management, growth. they are pretty expensive.

-- cheap banks on the other hand. the banks are cheap for a reason. [indiscernible] the good quality names are already expensive. a heavy selloff for some reason. caroline: nathan, give us the sense of the longer-term picture . in a short time, we might not see that much flight happen because we see a strengthening of power coming from erdogan. will there be more discontent in the way that he is taking things within the country? what does this mean for the country? what really happens to the economy going into the next two to five years. -- five years?

nathan: there are two questions. it has been clear for some time that -- at least in public. , thew controls the media analyst community. anythingfears saying negative about the government, rightly so. i don't think we get very public dissension in this event on the weekend probably amplifies that. , the oneof economics thing that concerns us about turkey is the less fears, a structural -- deteriorating. we have had a decent growth because of the context of slow global growth. the underlying trends are negative. but activities growth -- productivity growth is weak. in the long-term health of the economy look pretty weak. we think it is going to be

difficult for them to save the kind of growth weights there had -- growth rates they have had. this probably pushes us further down the negative road. if they go down the route of further interest rate cuts, through domestic growth, -- limited dissension in public, but slow deterioration. guy: great to get your thoughts this morning. thank you so much indeed. we just talked about the economic market impact of what is happening in turkey. let's get the story now i'm a ryan chilcote is at the eu foreign ministers meeting in brussels. ryan, i am assuming that the story's turkish is very fluid at the moment. a lot riding on this. extended membership as well what are you getting?

this is a story. a couple of days ago, all of the more foreign ministers were talking about how the standby turkey and prime minister. one -- prime minister anyone -- he could use it as excuse to suppress the political opposition. we heard the eu foreign ministers today, the french foreign minister saying he was concerned that turkey might no longer be a viable ally of the eu. turkey is already an ally. helping eu stem the flow of migrants from the middle east. we have seen that flow fall precipitously, it in fact the number of migrants in greece have fallen tenfold. the eu has them a good on his part. as a part of the deal with turkey reached in march, to

provide turks with free chapel to europe, and to resume the negotiations about turkey joining the european union. tocourse if turkey was institute the death penalty again, a lot of the foreign ministers have said that would be a complete nonstarter in terms of the turkey becoming a part of the eu. really you have both sides, turkey in the eu, expressing areern about willing they to go forward with this deal, which is in a temporary way a band-aid solving the migration crisis for countries like germany. not just ryan, perhaps eu and turkey relations, but u.s. in turkey. john kerry is there. u.s. seems to be being accused by turkey of being involved in the queue. -- in the coup.

what is john kerry to get out of this meeting? ryan: if it is the migration crisis, it is security that john kerry would be thinking about. if turkey is a member of nato, jim carrey will want turkey to be a viable player in nato, not just in terms of dealing with the crisis in syria, but applying pressure to russia. his concerned that prime minister has made up with the russians over the last couple of weeks. to express the same concerns that these foreign ministers have been saying which is don't go too far. the coup is not right but it would also not be right to list -- to listen to the rule of law and apply the rule of order -- rule of law. he will be more certain fact and diplomatic, because at the end of day, turkey is extremely

important for the united states. ryan, thank you very much indeed. ryan chilcote joining us out of brussels. let's talk oil. brent crude -- turkey oil flows continues unhindered despite the coup attempt. -- the recent rally sparked those -- tracy alloway joins us. tracy: this is really all about oil producers detecting themselves against another downward drift in the price of crude. at the beginning of the year we saw crude oil as low as $27 a barrel. it went back up to $52 a barrel. it since dropped 9%. the geopolitical turmoil that we have seen in turkey does not seem to be giving it a rise. u.s.e oil producers in the

increase their shortcuts on the price of oil. those hedges have come a dividing line between life and death for u.s. shale dollars and we have seen the third consecutive weekly increase now in those short bets against the price of crude. guy: short and sweet today, unfortunately. strong arms. soar as softbank makes a takeover offer. this is bloomberg. ♪

guy: 45 minutes past the hour. this is "on the move." here's juliette saly. juliette: the bank of england should implement a -- an immediate interest rate cut. that is the view of pitch and flickr. the central banks of first rate cut since 2009 should be supplemented by a package of additional measures next month. landed back in cape canaveral. the leading spot was a couple of miles where it lifted off. caring 5000 pounds of food, experiments and equipment for the international space station. the left over booster made a vertical landing. holding have

soared in london trade after the softbank decided to buy it for $32 billion. it would be the biggest ever --e over for softbank with one of japan's most -- companies . that is bloomberg business flash and caroline. caroline: let's discuss of that arm deal. richard windsor joins us now. of deal, clearly a premium 43% coming from softbank. why do they like it guy: is it -- why do they like it go -- why do they like it back oh -- like it? richard: that is a great question. everyone else is asking the same question. i'm scratching my head, why

softbank would want to buy. there are a couple of reasons here it the first is if you look at the japanese yen, it has depreciated by 30%. arm share price being flat over the last 12 months is now 30% cheaper than it was 12 month ago. you look from the perspective of they are going to increase investments in arm. the aim is to increase arms appeal. i suspect to increase their appeal and other technologies. my personal suspicion is i cannot see why softbank would want to hold onto it for the real long-term. i wouldn't be surprised if the acquisition is a stunning success, that arm ins of coming back to the market in a five to 10 years time at a much higher level.

guy: this is arm and this is the universe is it is pound. -- this is the yen versus british pound. would somebody -- we are trading at about 17 now it would somebody is come in? until was always the big-name. would you expect something to come in at this very elevated price? risk of the main reason is not because of the price, but the -- richard: the main reason is not because of the price, but the main reason is -- dependent on this technology. you would end up in a situation and theey appeal technology would completely disintegrate. guy: could be a trading that almost. management is saying it is going to stay independent. i suspect this is a ring defense

operation at what does arm get from softbank? what are the advantages from arms point of view? richard: if you look at arms share price for the last 12 months, the slowing market for mobile devices, a good chance you're not good to see 70 pounds -- 17 pounds. from the shareholders perspective, a good deal. these are the kind of investments that arm holding could've never made on its own. caroline: what about the rest of the sector? infiniumon technology, all rising on the back of his deal. all we are going to see more m&a pile in -- are we going to see more m&a pile in? richard: impossible to tell. those of the companies you mentioned. i know those could be in the --

in greater difficulty because of and arm will be investing more which means it will become a greater threat to those companies. can, itcquisition is we could make them acquisition targets. guy: is this a done deal? richard: i think so. guy: it is hard to see the fall apart. if the pound weakens suddenly, -- that could upset this? richard: i cannot see this being the case. someone offers you 17 pounds, great. it has been on the cards for a while. softbank has been sniffing around for a while. time the timing is been accelerated due to the pound

collapsing. windsor, the founder of radio free mobile good the republican national -- mobile. the logan national convention kicks off. -- the republican national convention kicks off. this is bloomberg. ♪

caroline: welcome back to "on the move." also looking at an update as the republican

national convention starts. is donald trump due to accept party's presidential nomination on thursday? he sat down with mike pence on the 60 minutes program and called for extreme betting coming into the united states. cooks there are territories and terror states they were not going to allow people to come into our country. if people want to come in, they are going to be extreme betting. they are going to -- we are going to know where they came from and who they are. guy: margaret, has mike pence seemed so far after being announced as the vp? 's arrivalmike pence on the scene seemed to be not entirely sorted out by donald trump himself. in the days since the last couple of days since this is unfolded, he is emerging as a calming voice.

some people call them the translator for donald trump having to explain the things that donald trump says. mike pence can explain it to conservative honors -- conservative audiences. can explain it to the crossover voters whom donald trump and hillary clinton are competing for? will see mike pence the on the interview later this week at the convention. he will have an entire event to himself and all eyes will be on him. another round of violence against police breaking out in louisiana yesterday. how does this affect reparations for the convention? margaret: this a serious concern, not only because of the soul of america is aching after this round of violence, but because a very will security concern. -- very real security concern. vendors, protesters,

citizens who live here in cleveland. there are already pretty strict security measures in place. attention on those outside -- but also inside the convention hall and republican party, we have seen already two things, one the decision by donald trump and the revoking party to ask and african-america evangelical pastor with whom donald trump events forpened many trump to speak twice at the convention and talk about healing and unity and what is needed to bridge the division. we have seen donald trump talk the unitedabout states as a "crime scene." -- what his job is to unite america talk about those divisions. guy: margaret, we will leave it there. joining us out of cleveland. but he more coverage coming up on that.

we are going to continue to talk about turkey. what is happening in that market. .e will be talking about arm there is this strange thing in the sky over london. it is, you guessed it, the sun. that story, next. ♪

a

manus: turmoil in turkey. resident or to one consolidates -- president erdogan consolidates power. -- keeps investors on edge or and bonds slide as goldman sachs lowers its outlook for the lira. the soft pound gives softbank the upper hand. the japanese company makes a -- 24 billionlion pound bid for uk's arm holding. ♪