manus: taking brexit to berlin. just meet chancellor merkel today. can they hammer out a hammer -- a timeline for brexit talks. a coup, a talk, a purge. tensions push the lira to record anyone -- as erdogan convenes. the tycoon wins the republican nomination. ♪

manus: you are welcome. it is "the pulse." we're live from bloomberg's european headquarters. it is me, manus cranny. keep an eye on cable. what you've got is a dullest is --g -- what you got traders are pricing in over more than 80% probability of a rate cut in august. anglo american down 6.3%. iron ore production false 15%. there cutting their copper production target. management.capital change at man group. a man he goes -- manny goes.

often pimco. -- off to tim:. near changes with me. nejra: good day. donald trump has told supporters he is going all the way after securing the nomination. the tycoon's a son made the announcement at his home state of new york. trump supporters are looking to get the convention back on track after an opening day rocked by questions over whether melania trump plagiarized her speech. the turkish lira is close -- is trading to an all-time low as the purge of the country's institutions deepens concerns about the fallout from last week's failed to. appeared to visa central bank lowered its overnight lending rates by 25 basis points to 8.75% yesterday. pimco has named emanuel roman as its next chief executive.

-- a plunge in assets at the firm. roman has been ceo of man group, publicld largest traded heads fund -- hedge fund. --n is restoring a return to iran's economy minister whose ministry is at the forefront spoke to bloomberg. >> right now, the groundwork for iranianbonds in various debt securities in international markets exists. the situation will improve in the future. we have something like $45 billion worth of signed agreements with different countries for financing iranian projects.

nejra: global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. find more stories on the bloomberg at top . i'm nejra cehic. manus: a little bit of breaking news, investors holding e.on get -- theor a day vesture business is set for listing. they are going to list the business in september. visit this and this is a part of a strategy that was rebuilt back -- this is a2014 part of a strategy that was revealed back in september 2014. --ford bernstein is a saying is saying this was a re-rating which would significantly readjust the stock price. growing 12% on the back of this.

ticks.p a couple of that is the latest breaking news. let's talk about theresa may and her schedule. brexit to britain people got the .ew prime minister traveling she is going to meet angela merkel for the first time the first time after taking office under a week ago. the six will be high. merkel -- the stakes will be high. merkel says she will not -- until the u.k. has triggered article 50. thomasring in a morose -- this is part has entry. -- this is part pageantry. she is meeting merkel. this is about the two women eyeing one another. cooks that is right. -- >>, that is right.

is best they can hope for establishing a good working relationship to take them through what is going to be a very tough negotiations in the coming years. manus: let me bring you into this conversation. you are joining the chorus that seems to doubt that sterling rebound. it seems assets have had a nice little reprieve. stocks have had a reprieve. you don't buy into this necessarily. there is a wonderful line that i to be can only lift the pound so far." .> it is true so far we have had very sizable adjustment in sterling. it will largely be ongoing. you have the bank of england. i think this 80% probability over 25 basis point cut is a little low. the cut is a done deal.

it'll probably get an announcement on some other front , probably in the funding for lending scheme. it is a story that we have been calling -- since we got the referendum result. it is the outflows that are going to wait on sterling. over the past five years, we have had significant inflows, this is hot money. this can unwind, reverse in a matter of weeks and months. thending on how long negotiations are going to take, i would expect we are likely to see an acceleration of outflows. manus: what would that do to the sterling? vasileios: pimco -- you have pimco being 120. we asked the question what if we see a reversal of the portfolio, back into pre-2012 levels. that indicates 125.

manus: a number of other set johnsonent on -- boris and john kerry at the podium talking about britain's relationship with the united states of america. it's it -- it is interesting that theresa may makes her first trip to germany did this is about creating -- germany. that is about creating a platform. >> their hands are tied although they are members of the eu. they can talk about trade deals with half the world or even more , but there is a lot of untangling to be done before any of that can go ahead. manus: let's see what that meeting brings. m a, great to have you back. us, heliest jim knock stays with us. stay with the pulse. 9:20, we are good to hear and

breakdown the earnings including the numbers from microsoft and sap. 9:30, that is when we get the first hint of data and we get uk's unappointed figures. how did it impact the jobs picture here. 9:50, we go live to cleveland, ohio. it is all about the soap opera. the republicans made it official last night. donald trump will be their nominee for the u.s. president. this is bloomberg. ♪

manus: let's get you to the business flash. nejra cehic is with me. nejra: sabmiller boss will meet this week. that is according to people familiar. fund managers including ppi, davison kepner have complained for 77 billion pound offer is less attractive following the plunge in sterling. sabmiller's two biggest shareholders are getting a bigger deal than other and investors -- other investors. wasthe quarter revenue $22.6 billion after adjustments with cloud platform doubling its earnings. ceo has been changing since the clout and productivity services field risepokemon go

that saw nintendo's market value rise in over a week, it's shares slumped by over 4% in tokyo trade. they saw their biggest intraday fall in 26 years. the company is -- the company behind pokemon go decided to cancel today's launch and japan -- in japan. -- theottlieb's desk cuts will happen as early as october. that sb firm liquidates its hedge funds. -- and that as the firm liquidates its hedge funds. that is the bloomberg business flash. manus: let's talk about one of the most volatile currencies, the turkish lira. this is moody's when they upgraded the country. the 23rd. from

vasileios gkionakis. he is with me now. , outflows, and credibility. you are quite bearish. vasileios: i am quite bearish. that is largely because it is not just the usual health story about you need flows to maintain that big of a current account deficit. it is also the fact that right now we have the consolidation of powers as far as. a gun is concerned -- is fares -- as far as erdogan is concerned. from that perspective, you've got to do much a perfect storm. you've got inflows stopping or reversing. at the same time, you have the

losing itsk credibility quite fast. ,anus: the political situation warning shots coming from the united states in terms of what they don't want to see from a nato member. this is the biggest challenge overall is the politics that will dominate the flows. you saw net inflows until this time yesterday. that is what is going to drive this. vasileios: i think that is right. the question is, however, overall, you will have general quite good environment for emerging markets on the whole. the big question is why as a foreign investor you would like to put money in turkey? largely because you have so much political uncertainty going on. i will highlight that central bank which is losing its credibility fast. yesterday when i read the statement, there was no

reference why these guys actually cut. you would've been excused to think they actually hiked. manus: let's talk about the em space. what i have done is w crs over five days. bottom.are all at the the imf has cut world growth. i am contrary here. inaid the fed is in play 2016. that to me is a deckhand which me.n't appeal to cap it up. isileios: the fact that oil around $50. -- that is the first point. the second thing is a lot of doom and gloom already in the price about the outlook. as far as the fed, i think as

long as they move in line with our expectations which is one , i don't think this is going to be a serious challenge to the emerging market outlook. manus: let's talk about the -- the cracking article on the bloomberg. the bank of japan needs to end its lies. 2% inflation target, that is line number one. the reality is they need to take their desk taper their bond purchases, not expand. where are you in this debate? because abenomics many people say have failed, in which case why would you sell in the end? vasileios: where we are on the bank of japan, i think the helicopter money, the pure definition of helicopter money which let's clarify does not

involve issuance of debt. if you go back to the definition of zero, this is not that. definition of helicopter money is very low likelihood outcome. , either we're going to have a pew fiscal stimulus. or accompanied by an extension of the current quantitative easing program which may run into some problems as far as the availability of gdp. what this means for yet -- for yen, things are going to be quite binary. it is going to be the big story over the next two or three months. if we don't get the helicopter money which i don't think we will. i think we'll glitzy dollar yen gravitating lower, below 100 and

toward 95 by the end of the year. yen is undervalued. it is not as undervalued as it was six or nine months ago. still, the structural forces on two fronts, japan as well as the dollar, the dollar remains -- that plays out to correlation rates. manus: at 95, do you not invoke the wrath of intervention? not.eios: i think i would not say that. first of all, as far as by theral intervention, bank of japan, i think it is highly unlikely. the yen around the 78, it moved to 120. what good did this do? affects that are passing through the exchange

rate, i think they are overblown. they are exaggerated. in the sense that if you want to keep on having fx and inflation from the exchange rate, you need to keep on having a constantly depreciating exchange rate. manus: that is not going to happen. everybody is saying the backlash against negative rates. when the japanese go -- is there a number? u.s. thing we need some kind of fiscal stimulus. i think we need some kind of fiscal stimulus. vasileios: it is an unprecedented event in the sense that we already have a lot of quantitative easing in the background it you don't know if it is reacting linearly are nonlinearly. -- or nonlinearly. from that perspective, i think

they need to go gradual. i am fully supporting the fact that they delayed quite significantly, because the previous one installed all of the progress that was made in japan. , threevasileios currencies we are going to be focused on. cable, dollar lira and dollar yen. always good to have you with this. vasileios gkionakis, the head of fx. up next, s&p and software to hard cash or did the company beats -- how did you do? we spoke to the ceo. this is bloomberg. ♪

manus: sap ceo says brexit has not had an impact on their business so far. the company reported results that top analyst estimates. he spoke to bloomberg in the last hour. >> i have not seen big global multinationals at this stage say i change my business strategy because of brexit. as you know, we see some of this more nationalistic behavior in many different markets of the world which is why i am very happy we are in 193 countries and 25 industries to does a person just to diversify our portfolio and be relevant. -- to diversify our portfolio

and be relevant. manus: great interview there with the ceo who is quite optimistic. he spoke about the m&a opportunities. caroline: really buoyant. he is always ready of fugitive. sieve.ys pretty a few pretty slow first quarter. worried about the impact of brexit but actually we are starting to see shares top. this is significant. we are seeing s&p shares hoping the technology sector lead higher. if you dig into the gr our function, technology outstripping the rest. this is a company that is re-orientating itself, getting into the cloud. their sales up 5%, driven by their cloud subscription.

that was up 41% overall. this is a company that is take on competitors, like salesforce and as for hannah. that is the suite they have been selling, adding 500 customers. they are talking upbeat about the cloud shift and opportunistic acquisitions that they might take. s&ps cloud that is helping -- sap in particular. it is cloud that is helping ibm beat estimates yesterday. u.s.-japan not, we had $5 billion coming from sap. about $22 billion coming from microsoft. it is a juggernaut. the sales up 2% but it is cloud that is saying a doubling in revenue, 100% growth in the last quarter. concern,ou one area of there is $1.1 billion in the

phones unit. overall it is a thumbs up from under soft. back to you. manus: caroline, thank you. stay tuned to bloomberg. it is u.k. unemployment day. that is next. this is bloomberg. ♪

manus: welcome back to "the pulse" live from bloomberg's european headquarters in london. by. unemployment grew 176,000. of estimate was for an add 73,000. this is in the three months running up to the end of june. there was one tiny week of brexit. the unemployment rate falls to 4.9%. earnings dip again. weekly earnings when you strip out the bonuses, 2.2%, lower

than the previous reading. the headline number, the big headline number is that employment grew by 176,000. the market was expecting 73,000. in terms of cable, no immediate reaction. breaking news. let's bring in -- let's get your first word news. nejra cehic is here with me. nejra: theresa may will make her first overseas trip today since becoming uk prime minister. haveisit to europe will meetings with her german and french counterparts as she starts to pave the way for britain to leave the eu. after taking her first prime minister's questions in parliament, she will travel to berlin to meet angela merkel. donald trump has told supporters he's going all the way after formally securing the presidential nomination.

the tycoon's son made the announcement as his home state of new york pushed him over the line. trump supporters are looking to get the convention back on track after a day of questions over whether melania trump plagiarized her speech. pimco has named a new chief executive. he will replace done this on who presided over a tumultuous time. roman has been ceo of man group, the largest publicly traded hedge fund manager since 2013. iran is exploring a return to international debt markets for the first time since 2002. iran's economy minister, at the forefront of securing access to the global financial system, spoke exclusively to bloomberg. groundwork forhe issuing bonds in various iranian debt securities in international markets exists and i'm certain

the situation will also improve in the future. we have something like $45 billion worth of signed agreements with different countries for financing iranian projects. nejra: global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i'm nejra cehic. manus: we're going to get into markets. britain is to relinquish it six-month european commission presidency. this is coming in as a little bit of breaking news across the bloomberg terminal. this according to theresa may. i want to give you context on those unemployment numbers. labor market continues to strengthen. unemployment fell to 4.9%, the lowest unemployment rate in the united kingdom and the third quarter of 2005.

the flip side is that wages, pay growth came in at 2.3%, the market was looking for 2.3%. it is a little bit of a mixed picture. none of this includes the reality of exit. check on the pound. 1.3119. we are taking it a little bit higher. nejra: we are indeed. looking at european equities, we are seeing some optimism in these markets after the stoxx 0.5% on yesterday, up europe's equity benchmark. we've had some data out of the u.k. which you clearly outlined. it is a big day for corporate news. if we look and see how the different industry groups are performing, tech stocks leading the gains, up 2.2%. commodity producers leading the losses, down 1.6%.

there are more industry groups in the green and in the red. s&ping at tech stocks, leading the gains. shares have it their highest level this year, 4.3% at the moment. this is after the company reported results that can't edalyst estimates -- that topp analyst estimates and closed her software deals despite political turmoil. european revenue growing strongly despite concerns over brexit. software licenses and cloud revenue surpassed expectations. good day for s.a.p. not such a good day for anglo american. we've seen it fall after it cut its full-year copper target. this is the annual target for copper output after heavy snow at operations in chile and the shares have slumped the most in three weeks. this is actually the second best

performer on the ftse 100 this year. shares getting punished today. yourly, i wanted to bring attention to the bloomberg dollar index. the dollar is holding a three-day gain. the bloomberg dollar spot index near a six-week i after housing stocks in the u.s. rose more than forecast. i've tracked the citi economic surprise. it has risen to the highest since 2015. manus: you know all the ones i love the best. thank you very much, nejra cehic. couple of breaking news headlines coming in from the bank of england. bank of england saying that firms see a positive effect on firms from the brexit czar. many firms are undertaking strategic views. some see a negative impact from brexit on the next 12 months.

they see no near-term impact on investment. let's tie all this back together with the u.k. data that i just brought you in terms of the growth. 176,000,some unemployment rate of 4.9%. we have rob wood. he joins me now. one do you make of this set of numbers? do i ignore the past three months? rob: i don't think you ignore them. it looks like the u.k. market was ok before the referendum. looking across the data, there were a lot of surveys that were slowing before the referendum. there were signs the property market is slowing as well. data from the bank of england that highlighted falling investment in commercial real estate as well. i don't think you ignore these data, but take them into

context. there were signs of gentle slowing before the referendum. manus: you say in action will cost the economy. rob: i think it will. i don't know exactly when brexit is going to do. the bank of england doesn't know. it is not going to know my the fourth of august either. what we can see in the data so far, is that firm sentiment is tone down. their investment intentions for the next year have fallen. the housing market indicators have:. everything points to a downturn. the bank of england was already at a half percent interest rate and expecting to hold it there for a considerable time. what do you do? you cut rates. what is the worst that can happen rustenburg if you are wrong and the economy does well, you can start hiking later. manus: that is a slight

flip-flop approach. the whole point is -- i get you, cut by 50 basis points and if you are wrong, you can begin to hike, but they can't flip-flop like that. zero, cut rates back to we are committed to a lower for longer policy. rob: the bank of england has to do the right thing to the thing forot the right whether it is seen as flip-flopping. you can wait longer if you have a lot of room to cut interest rates. if interest rates today were at 5%, then sure, wait a couple months. you can always make a massive cut to catch up. they can't do that. that is why risk management approach to policy need to cut early when you face uncertainty and you think the risks are to the downside. manus: give me your schedule of cuts international quantitative easing. -- and additional quantitative

easing. rob: we reduced the rate currently expected. we are now looking for 25 basis points in august. i think they will have to do a bit more qe. we are looking for 50 billion qe. there's a chance that is more skewed toward private sector assets, credit easing type approaches rather than straight gilt qe. after that decision last week -- after the speech as well sledgehammers and nuts, but saying the day after to cut rates is odd. it is hard to parse out dovish they are. manus: more friendly for lending? rob: it is an obvious one. we've seen it before. they could reboot it. i'm not sure what it would do this time either. [laughter] manus: rob wood, stay with me.

rob wood's chief u.k. economist at bank of america merrill lynch. what does boris mean for the special relationship between the u.k. and the u.s.? then, trump takes the nomination at the rnc. is his campaign back on track? allegations of plagiarism rocked the convention. and was the bank of england wrong to wait? surveillance discusses that in just over an hour. ♪

manus: let's get you a bloomberg business flash. nejra cehic. nejra: u.k. unemployment has fallen below 5% for the first time in more than a decade. the jobless rate dropped to 4.9%, the lowest since 2005. economists expected it to stay at 5%. after a pokemon go rise that saw nintendo's market value more than double, shares slumped by more than 12%. at one point, they saw their biggest fall in 26 years. earlier, tech crunch, citing a person close to the plan, said the companies behind pokemon go decided to cancel today's launch in japan due to concerns that hype generated will overload the app. visio massive management plans to fire 33 employees in new york.

that is as the firm liquidates hedge funds following charges against three former employees. according to a person with knowledge of the matter, the firm has been notifying affected staff. that is the bloomberg business flash. manus: thank you very much. john kerry has made it very clear that there can be no trade deal with britain until the country has left the european union. that is despite the so-called special relationship which he and the u.k. foreign secretary boris johnson working to stress remains strong. >> no shift in administrations, and i'm speaking for us, in either of our countries, is going to alter or undermine the bonds that we have. >> the special relationship between the united states and the united kingdom remains strong and vital and we continue to advance mutual interests and tackle shared challenges.

chilcote joins us. what have we learned? will they start those negotiations and mark ryan: i think the answer is yes. what secretary kerry said in that formally speaking, the u.k. can't enter trade negotiations with the u.s. until it has exited the european union. when you are in the eu, you have to do trade deals through the eu. what he also said if the u.s. is keen to begin preliminary discussions. they have already started doing that. barack obama, the u.s. president, was here not long ago. he said if the u.k. exits the european union, it will be at the back of the queue to do trade deal with the u.s. seems it is moving to a more friendly position. and boris johnson

in front of their national flags. first encounter for the u.s. media with the united kingdom's new foreign secretary. how do they treat him? ryan: i'm not sure the u.s. media was any harsher than the u.k. media. the times went with a story saying "bojo loses his mojo." affes in thatwo g press conference. he referred to turkey as egypt not once, but twice. he was grilled on his gaffes, namely the one he made a couple months ago when he accused barack obama of having an ancestral dislike for the u.k. because he's part kenyan. the other was calling hillary clinton a sadistic nurse in immens a mental institution. none of that has gone well with u.s. politicians or u.s. media.

he said he was misunderstood, he's not going to apologize. generally speaking, he had done his hair, his tie was straight. think of it as box office boris. he is the foreign secretary. the u.k.'s numeral is to show the u.k. can be a world power without the european union. he's embarked on that task. he met with the saudi foreign minister as well. syria,lked about turkey, and now he's on his way to the united states. there's going to be a transition, a metamorphosis. manus: great work, ryan. ryan chilcote on the special relationship between the united kingdom and united states. rob wood's chief u.k. economist at bank of america merrill lynch. embarking on this road of putting the great act in great britain beyond the european union, that is boris johnson's

job. is he the man for the job? rob: i don't think that is for me to say or not. with the u.k. now embarking on leaving the eu, which to my mind probably means worse trading now, setting has of better terms with other countries is vitally important. the real difficulty that the u.k. will find is if -- informal talks are one thing, but trade deals come down to the detail, the nitty-gritty. at the moment, the u.k. doesn't have its own tariff or menu of external tariffs that it applies. they are part of the eu. manus: surely that is where people would say, use the wto menu. talk to me about theresa may. very interesting, these nuances in terms of how we think the negotiation of start and go in

terms of theresa may's ambition to have access to the eu, but to reduce immigration. square the circle. rob: well you can't. there is a fundamental trade-off. full membership of the single market requires free movement of workers. if you restrict free movement, it jeopardizes full access to the single market. that is the choice the u.k. faces. outside the single market, you can have free trade agreement, but the single market goes a lot further than that, which is why it is so important. manus: is that when the reality check comes, when people realized access to the eu is not something that you get unless you've got immigration? rob: when does the reality hit? manus: if that is the scenario. rob: it feels like a lot of decisions have been pushed out with article 50 maybe not being triggered until the new year. ande that gives relief

comes back when it becomes clear that single market access is in question. there are a bunch of holes which pollsst a majority -- which suggest a majority of people expect free access to continue. manus: it could be a long indian summer. rob wood, chief u.k. economist at bank of america merrill lynch. up next, the republicans make it official. donald trump is their nominee for president. we go live to ohio next to wrap up day two of the party's convention. this is bloomberg. ♪

twos: to the u.s. now, day of the republican national convention. donald trump secure the hisnation last night and team are looking to get the convention back on track. accusations of plagiarism in the melania trump speech. trunk spoke to the party convention in ohio via video, saying it is just the beginning. >> together, we received historic results with the largest vote total in the history of the republican party. this is a movement. but we have to go all the way. manus: let's go all the way. it almost reminds me of a caps on. margaret is in cleveland at the

republican national convention in cleveland. day two is about getting the convention back on track, nevermind the accusations around plagiarism. >> certainly come a day two was headed in a better direction and a one. -- than day one. the entire first day and most of us by this day distraction of melania trump. what is happening with the campaign? why can't they get organized? we saw the convention floor empty for a lot of the day. finally getting signage. still some divisions, the gaffes from alaska delegates to try to slow down with what the nomination. in the end, he is nominated and it goes forward. the remarks by his son, probably the star of the show, rallying the route around his father.

take a listen. >> speaking to real americans, giving them a voice again. it is my honor to be able to throw donald trump over-the-top in the delegate count tonight with 89 delegates. and another six for john kasich. congratulations, dad. we love you. >> donald trump junior's remarks and those of tiffany trent, one of donald's daughters, did one melania trump wasn't quite able to do, really got the ground to know donald trump on a more intimate level, a more human level. if they can keep that up, they have a better chance of unity. manus: margaret, let's see what the next couple of days bring. great reporting over the last couple of days. stay with bloomberg. "surveillance" is next.

in the u.k., we've had our unemployment data below 5% for the first time since 2005. it is dawn in new york. the pound is rallying. this is bloomberg. ♪

tom: this morning, currency markets tell all as sterling weakens and the euro too. prime minister may crosses the english channel to visit angela merkel appeared trump takes the trophy amid dissent, not seen in 40 years. this is bloomberg "surveillance," live from our headquarters in new york. i am tom keene. in london, giant -- guy johnson. what is the prism of cleveld