delegates, and fellow americans, i humbly and gratefully accept your nomination for the presidency of the united states. accepts thed trump republican nomination with a speech warning of dangers abroad and at home. i am your voice, he tells the american people. will he get their vote? draghi reiterates his commitment to act, but holds off for now. the fed and the boj prepare decisions next week.

what is next? and, european earnings season hits its stride. vodafone and phillips beat as they sidestep the brexit impact for now. welcome. this is "the pulse" live from bloomberg's european headquarters in london. i'm manus cranny. breaking news on the eurozone pmi, the composite number is a beat. these on a provisional numbers at 52.9 on the eurozone. something different at the bottom of your screen. 52.9 is the actual number. the market was looking for 52.7. what is driving this is services at 52.7, but it is the

manufacturing side that you see that little bit of a dip. germany is not just striving i had as much as everybody thought. what you have -- excuse me. i have a slight issue with the data i just gave you. the manufacturing data comes in at 51.9. the forecast was for 52. apologies on that. i will bring that to you. germany manufacturing, that level fell in germany. 53.7. market was looking for 53.4. it beat in germany on the manufacturing side. the services side, then rises in germany. i think the word for france would be stagnation. that is pretty much my take on the eurozone data. we are waiting for the u.k. data

a little bit later on. 28 minutes, we get the first signs from the u.k. stay with me for all of that. let's talk about some of the stocks. stoxx 600, we are eating out gain.-- eking out a if you think of what drove growth this week, arm, softbank, philips lighting, profit up 16%. sales came in short of estimates at 1.7 billion. philips lighting, the ceo caught up with anna edwards and myself. they will do deals if it makes sense. they say the european business is growing and lighting continues to serve the u.k. market. vodafone at the bottom of your screen up 3.49%. sales in germany and italy are cranking.

little more pressure in the united kingdom. nejra cehic is with me. nejra: donald trump has officially become the republican presidential candidate. in his acceptance speech in cleveland, he cast himself as the outsider who can repair a nation teetering on disaster. he reinforced his campaign themes, curbing immigration and free-trade wound in -- while criticizing his democratic rivals. >> hillary clinton's legacy does not have to be america's legacy. the problems we face now, poverty and violence at home, war and destruction abroad, will last only as long as we continue relying othe sa politicians who created them in the first place. hillary clinton is poised to unveil her choice of running mate today. the democratic nominee will seek to recapture the attention of

voters after a week in which donald trump and the republican party dominated political news in the u.s. virginia senator tim kaine and secretary tom vilsack and new jersey senator cory booker are said to be among the favorites. lagarde hasristine blamed brexit for a downgrade to global gdp forecast. she said the rest of the world is doing better than expected. today tohoping to come for the first time in six years, revise upward the forecast for growth. , becauseave done that china, japan, the euro area, were doing better than what we had expected. but unfortunately the united kingdom decided to go for

brexit. so we had to revise downward. nejra: speaking at the same event, bank of england governor mark carney said 2016 had seen the world's financial system weather two major threats. france's private-sector economy showed signs of stagnation. the composite pmi stood at 50. that is as a continued slump in manufacturing output erased a return to growth in services. global news 24 hours a day powered by more than 2600 journalists and analysts in 120 countries. this is bloomberg. manus: the ecb is ready, willing, and able to act. it is just not doing it yet. that was the message from mario draghi yesterday. whatank grappling with he refers to as the brexit headwind. >> the governing council will

act by using all instruments available within its mandate. i would stress readiness, willingness, ability to do so. manus: ready, willing, and able. as draghi sticks to his stance, the euro sticks stubbornly around 1.10. joining us now to dissect draghi's comments and the picture from central bank's overall is bank of america merrill lynch director of g 10 fx kamal sharma. thank you for joining me. freshesthe flash, the paint on the wall. it doesn't read well. services sector, good in july. purchasing managers index, 18-month low. business confidence and outlook has deteriorated to its worst in 1.5 years. is he behind the curve in terms

of not acting, or are they prudent? kamal: i think a little bit of both. if you look at the comments from the bank of england, that may have given them a little breathing space. , was a little surprised especially given our own forecast for central-bank easing. what the central banks want to assess first of all is, is this knee-jerk weakness, or is it transitory? by the time we come to september, a lot more will be clear. by the time we get to august, a lot more numbers will be coming out. view isy own personal that it is going to be when you get a nuts and bolts of article 50 executed when you are actually going to understand what it is. let's talk about the euro. gridlock.t your

traders questioned the ecb's ability to boost growth. we are just drifting along. i remember when everybody was talking about parity here. the euro was a haven. do you think there will be a significant? kamal: i think the policy divergence story has become heavily diluted. have euro protection. we do believe the ecb will step up to the table in september and deliver further response. that is also a view that we need to see some policy tightening by the fed as well. manus: give me in outline of that policy response. there seems to be this backlash to more negative rates. kamal: heavy on hint, light on

detail. we think it is going to be qe. we have been skeptical about the ability of the central bank to cut rates in japan as well. we think that is not likely the major option. qe, probably a discussion about the t as well. we saw the reaction of markets when the ecb cut rates in the early part of the year. manus: there's a lot of people making the point that the church of bonds that are available for them to my could become a problem. i suppose you channel the japanese. why not? stay with me. we got a lot more to get to. kamal sharma stays with the show. we've got plenty coming up. the yen falls, the strategists stand their ground. we look at may to next week's bank of japan's asian.

-- bank of japan decision. this is the number that will set the tone for the post-referendum trade. and, donald trump paints a bleak picture as he accepts the republican nomination. this is bloomberg. ♪

manus: let's get you a bloomberg

business flash. nejra cehic. nejra: vodafone is higher after revenue beat analyst estimates. organic services revenue earned from customers' monthly phone bills but not including handset sales rose 2.2% amid gradual improvement in european business and growth in developing markets. boeing expects to report a $2.1 billion after-tax accounting cost for the second quarter as it absorbs expenses. the biggest loss is related to the dreamliner. the company also reported hits from the 748 jumbo and a refueling tanker for the u.s. air force. goldman sachs is said to the amount to start raising money for its first private equity fund since the financial crisis. they also said the fund won't be as large as some of the earlier firm willnd the

contribute a relatively small amount of capital. that is the bloomberg business flash. manus: thank you very much. strategists forecasting that the yen will post its first annual gain in five years. they are standing their ground. the japanese currency is the best performing currency this year among developed markets. the strength has put policymakers in an uncomfortable position as policy tools fail to deliver results. investors regulate the boj will implement so-called helicopter money, rejected by governor kuroda in june. >> fiscal policy is decided by the government and the parliament, while monetary policy has decided by the central bank. i don't think at this stage we should abandon this institution.

no possibility for helicopter money. manus: for more, let's bring in kamal sharma, bank of america merrill lynch director of g 10 fx. that recording was done before brexit. what i've got for you here is the analyst view, the consensus view for dollar-yen at 105. they are moving lower. the view today would be that actually dollar-yen's longer trajectory is driven more by what the fed does rather than bank of japan. do you believe that helicopter money is off the table? kamal: in our view, the response next week is likely to be a doubling of etf, potentially an extension of jgb purchases and a small probability of negative interest rates. kuroda doesn't believe in helicopter money.

we think it is the last resort for them. the focus is the size of the fiscal stimulus program. manus: the nikkei newspaper coming out with a suggested number of 30 trillion. do you agree with that? what is your number? what would 20 or 30 really due to gdp, inflation, and the yen? kamal: we've been here a number of years with japan. we had stimulus after stimulus. the banks are in a better situation. it depends on whether we can see the fiscal policy come to the assistant of the mechanism, monetary policy aided by increased lending as well. ultimately a multiplier effect. , which is abenomics all about structural reform, helped the transmission

mechanism? kamal: it has helped the banks. we've seen consolidation of the banks. we've seen them provide liquidity to the financial system. if you are asking as it weakened million sustainably, it hasn't. we think the focus of the japanese is moving away from further incremental increases in quantitative easing toward a more fiscally orientated policy. manus: i've got another index for you. withiscomfort, i caught up mark at ubs, and he said that central banks will trump politics for markets and that a trumpet in the white house wouldn't have a very big impact on the dollar. do you agree? , comments from trump seem a lot more interventionist. various occasions through the

years, we've seen government imposed unilateral tariffs. clinton, then, japanese automakers were hit. dollar-yen fell. trade barriers are negative. lucky i think will be whether any fiscal stimulus program that trump can engineer would outweigh a potential rating of tariffs. mexico,ith that canada, the yuan, trade barriers never mind walls. trade barriers would have a dramatic impact on those currencies. kamal: canada and mexico are part of the nafta area. manus: ok, stay with me. we've got a little more to go. that is kamal sharma from bank

of america merrill lynch g 10 fx. up next, the turkish lira, the biggest fx story throughout the week. we look at the moves. what is the opportunity? this is bloomberg. ♪

manus: let's turn to turkey, where the lira fell to record lows this week. that followed last friday's failed coup attempt, a crackdown

by president erdogan. the plunge and led to some opportunities in the country. what am i talking about? you've got a currency that has been demolished. where is the money flowing. money is flowing back into turkey. if you want to pick this up, the hash tag is at the bottom of your screen. equity valuations are the lowest in seven years. look through the wreckage. they say coca-cola picked some of that up. they sell to syria and iraq. developer,perty black friars, they are saying overweight on turkish stocks in some funds after spotting opportunities that are no-brainers. $14 million went back into rurkey over the past fou trading days.

for more, let's bring my guest back into the conversation. it is kamal sharma, bank of america merrill lynch director of g 10 fx. i suppose this is why you have various managers that take opportunities where other people see crises. other people see value and opportunity. when you look at the lira in the prism of fx, overblown, oversold? kamal: neutral outlook in the near term. the failure of a sustained breakthrough in the room -- in suggests to us that the market is overdone. we do expect a downgrade. that is not the time to start dipping back into the turkish markets. what we would say is that the inflow you are seeing is a broader trend that we've consistently seen. the search for yield, for investment opportunities outside of g 10 when we are seeing yield

compression in developed countries. manus: we've got yield compression and the fed on hold, one hike by december, and i got this rush. through your prism, this is wcrs, month to date in terms of return. the rand, the peso, the won. is there more trajectory in the e.m. trade, and where would that be? kamal: in the asian space, india remains one of our favorite trades. we think that gives a nice mix to kind of in use ourselves the machinations of what is going on. we think china will continue to go higher. we do like poland. we like that from a trading perspective. turkey, we are neutral. i think overall it is the regional underperformer. manus: the chair said there is a

next wave of easing to come, a pickup in the new zealand dollar. aussie was on the move. new zealand was on the move. the new zealand dollar is beginning to return. are we set for another big policy shift? divergence? kamal: how much more can they do? australia and new zealand can cut rates. else has got? we think the policy constraints are now being tested. theve seen the illinois -- inability of currencies to weaken. this is why we debate about what kind of physical response can the central banks make to start increasing investment. manus: but you need political stability. you need a good, strong form of government. thank you so much for being with me. that is kamal sharma, bank of america merrill lynch director

of g 10 fx ♪ strategy. up next on "the pulse," pmi for july in the united kingdom. we get the first piece of post brexit data. will it set the tone? this is bloomberg. ♪

manus: welcome back to "the pulse." we had a seven-year low in the composite flash pmi, purchasing managers index. a seven-year low, 47.7. the market was looking for 49. this is july. this is the world, and the reality for manufacturing and services in a world at the beginning of the shock and all of the brexit vote. , 1.3216. dropping

services, 47.4. market was looking for 48.8. manufacturing came in a little bit better, 49.1. the manufacturers will benefit potentially from a lower bound. manufacturing beat. services is where you are seeing the significant drop in the number. ote wreaks havoc. there has been deterioration in the economy post brexit. could we fall into a recession? the latest readings put the economy on course to contract. what happens next? we will get into that discussion with my guest. in the meantime, the first word news. nejra: hillary clinton is poised

to unveil her choice of running mate today. the democratic nominee will seek to recapture the attention of voters after a week in which donald trump and the republican party dominated political news in the u.s. tim kaine, tom vilsack, and cory booker, are said to be among the favorites. imf chief christine lagarde has blamed brexit for a downgrade to global gdp forecast. worldid the rest of the is doing better than expected. toi was hoping to come today , for the first time in six years, revise upward the forecast for growth. i would have done that because china, japan, the euro area, were doing better than what we expected. , the unitedy

kingdom decided to go for brexit. so we had to revise downward. nejra: bank of england governor mark carney said 2016 has seen the world's financial system weather two major threats. >> this year, the global financial system has faced two spikes of uncertainty and risk aversion. throughout those periods, it has demonstrated resilience. nejra: france's private-sector economy showed signs of stagnation in july. composite pmi stood at 50. continued slump in manufacturing output he raced a return to growth in services. global news 24 hours a day powered by more than 2600 journalists and analysts in 120 countries. i nejra cehic. this is bloomberg. manus: that was a shocker in

terms of pmi data. we saw the pound react on the downside. how are the rest of the markets going to take this? we are on recession watch. managers index comes in at a seven-year low post brexit. take us through the markets. forgive me. i'm trying to give nejra too much work. bring in the guest. make him work. peter, thank you for joining me. services thew, list since 2009. action from the bank of england in august? >> i think so. it was pretty much promised in july, but we saw from the comments earlier that maybe we should wait. i think now we've waited, seen the data, and that affirms the

view that maybe it is time for a cut. manus: let's say it is 25 basis points. i got the indication of a rate cut in the united kingdom at 78% probability at the moment. 25 basis points is not going to make a blind bit of difference to me, my life, my mortgage. the average person would save about 15 pounds. that is not going to help you and me. >> it isn't. frankly i think that policy measures are nothing more than a signaling device. they tell us the bank of england is willing to help out, but as mark carney said, monetary policy is limited in what it can do. aresions about the economy going to be taken elsewhere. manus: qe, you mentioned martin wheeler. he said in his report, quantitative easing of around 50 billion pounds would add to the

inflation expectations. how does that work? he's a proponent of more qe. are you? >> probably not really. we haven't got much ammunition left. if you cut by 25 basis points, what more do you do? i suspect the bank will be forced into more qe. manus: when you talk about theresa may's government, the new chancellor mr. hammond, there's no emergency budget and fiscal spending is not the magician's at with a rabbit coming out of it. it takes time. , 1.3193.erling down we will wait and see. manus: i'm rather presumptive. >> i think ultimately the u.k. will have to loosen the policy stance.

arguably, the austerity policies of george osborne helped get us where we are in terms of the popular protests. theresa may's comments have recognized that. manus: do you think it was osborne's austerity or do you think it was ukip and boris johnson that got us where we are? >> it think it was a range of package. i think they squeezed the list ends of the income spectrum. i think it was a factor. manus: in terms of the u.k., current account deficit, you give me some heart. there is less bad news. give me some cheer. >> in terms of what the currency markets are looking at, the first thing to look at is the deficit. it is big. that is the concern. ultimately, what matters is how big are the u.k.'s international liabilities.

at the moment they are relatively small. that gives me some hope that foreigners will continue to invest in the u.k. without putting too much downward pressure on sterling. manus: we will see what happens. now i am going to make nejra cehic work for her lunch. stay there. nejra cehic, take it away. dollar sterling at 1.3117. nejra: it is really not good for us. i'm starting with european stocks because what we're seeing today is global stocks retreating from an eight-month. some of this is down to the fact that mario draghi kept stimulus unchanged. we also have those comments from kuroda today from an interview in june saying helicopter money is not a possibility. it begs the question, are central bankers may be holding off a little bit on this record stimulus?

european stocks not immune to the decline. the stoxx 600 down 0.6% at the moment. more than 400 stocks declining. worst part of this is the prospect for central bank stimulus not being as aggressive as we might expect. it is also one of commodities rolling. oil declining, industrial metals, and gold as well. the stoxx 600 commodity producers leading the losses. most industry groups are down. telecoms, the one group gaining, up 1.2%. vodafone up 4.2% at the moment after it reported first-quarter service revenue that beat estimates. we're talking organic service revenue, the money vodafone earns from monthly phone bills. it doesn't include handset sales. sales advanced in germany and

,taly while falling in the u.k. but basically seeing gradual improvements in its european mobile phone businesses. that is vodafone rising. finally, dollar-yen. i did mention kuroda. this is where we saw the dollar dropped, the yen strength and yesterday. the yen is pulling back a little today. this is the picture over the past five days. the yen is heading for a second weekly drop. manus: thank you very much. you fill me with cheer. peter dixon, one last question. p l.a. at a seven-year low, recession risk -- pmi at a seven-year low, recession risk, how deep could it be? >> i think it will be shallow. the numbers will likely refract economic shock. i expect the recession worries will dissipate. that doesn't mean everything

will return to normal thereafter. i think we are in for a long sluggish growth as we head into 2017 and 2018 because we don't know under what policy environment we will be updating. manus: that will hopefully become clear as time goes on. peter dixon, thank you for joining us. stay with "the pulse." we're going to look at vodafone. first-quarter revenue numbers are out. then, donald trump accepts the republican nomination, reaffirming his pledge to put america first. later, on bloomberg, we speak to the former vp. this is bloomberg. ♪

manus: let's get the bloomberg business flash with nejra cehic. nejra: the u.k. economy saw a dramatic deterioration in the wake of the brexit vote as business activity shrank. that is according to a market survey. pmi data combining flash estimates of services and manufacturing slumped to the lowest since april 2009. the findings suggest britain risks falling into a recession. the economy on course to contract in the third quarter. vodafone is higher after it reported first-quarter service revenue that beat analyst estimates. the money it earns from customers' monthly phone bills

and network usage not including handset sales rose 2.2% amid gradual improvement in european businesses and growth in developing markets. boeing expects to report a $2.1 billion after-tax accounting cost for the second quarter as it absorbs expenses from programs with well-publicized stumbles. the biggest losses related to the dreamliner. the company also reported hits jumbo and a8 refueling tanker for the u.s. air force. manus: thank you very much. vodafone has reported results and it says growth in europe remains stable. ryan chilcote has been breaking down the numbers. service revenue up. make sense of this for me. ryan: look, investors have been watching the company and they were pretty sure that we are seeing a turnaround. today confirms that. great growth in emerging markets.

turkey, service revenue up 19%. europe, up about 0.3%. u.k., the weak spot. on the whole, the company is doing better than expected. manus: what about roaming? 80 i didn't get the message. i used a lot of whatsapp in japan. what is going on with roaming? ryan: it is not helpful. goingmpany said it is not to be as big of a problem as some expected. by 2017, they have to completely do away with roaming charges in the eu. if the u.k. leaves the eu, that means the money that you and i paying, or bloomberg is paying, we could end up outside of the framework. manus: earlier, i caught up with the ceo of the mining company. take a listen.

>> i used to say that as a company and a team, we are just made to face whichever economic environment we have in front of us. we have businesses and customers established in the u.k. and we will continue to sell them. manus: that was the ceo of the lighting business of phillips. ryan, in terms of brexit, the first report that vodafone put in, there was lots of talk about moving their headquarters. where does brexit feature? ryan: vodafone was one of the first companies to say they can't guarantee they will keep their headquarters in the u.k. if the u.k. leaves the european union. today we heard from the ceo that they are looking for pragmatic solutions to the headache that brexit creates for them. there are a lot of reasons for them to move their headquarters out of the u.k. they only get about 15% of their

revenue here. a lot of their revenue is in the eurozone, in the eu. manus: there's a historical association. vodafone was that shining star, that big deal that was put together. it is a big economic symbol for the u.k. ryan: they won't have all the answers yet because we don't know what the relationship is going to be. how do they fit in with eu rules if the headquarters is in britain? it might be that britain becomes like norway and still is part of the club. it might not be. they may find it is more advantageous to be in germany. germans have been lobbying for their business. they've got a big office in dusseldorf anyway. manus: there you go. ryan, thank you very much. vodafone stock is trading higher . ratcheting higher.

ryan, thank you. also talking about the impact of brexit was john hoeven k. he told bloomberg that the strength of the global economy influences his business the month. >> we've not seen any impact on passengers, volume, and it will probably take three to six months before we see any of that. we are phenomenally resilient. even in the financial downturn, we didn't see a very significant reduction in passenger volumes relative to other airports. that is because there's so much demand to fly out of heathrow and we are a global business. we are flying to emerging markets around the world. we are more affected by the global economy. manus: up next, donald trump's republican takeover is complete. he accepts the party's presidential nomination. we are live in cleveland to

analyze his america first acceptance speech. this is bloomberg. ♪

manus: donald trump has become the republican presidential candidate. in an acceptance speech that lasted over an hour, he painted america as a nation under siege before promising to lead the country back to safety, prosperity, and peace. >> the most important difference

between our plan and that of our opponents is that our plan will put america first. globalism, will be our credo. now livesha joins us from the convention center in cleveland. many are saying this was unlike any previous acceptance speech. tell me how it was so different. sasha: i think that trump broke from what is basically a half centuries worth of consensus within republican politics about the united states' place in the world. he was, as he was throughout the primaries, very negative toward global trade, saying he would do away with more try to renegotiate multilateral trade deals. also calling of the u.s.'s fairly recent bilateral

agreement with south korea. at the same time, has talked about rethinking u.s. alliances with countries around the world in national security terms. all of that, in a language suggesting the united states needs to be more transactional, something we have not heard from internationalist republicans like the bushes were ronald reagan. manus: so he is most assuredly a break from tradition. he's made waves before with comments about his commitment to the nato alliance. did he clarify anything in his speech last night or become more demonstrative? he wasn't specific about policy, but in a sense he doubled down on what had been comments he'd given in interviews and in speeches, saying the united states should not feel obliged to come to the defense of nato allies. he gave an interview in "the new

york times" in which he said -- it was one of the things that seemed to be written into the speech at the last minute, reaffirming that idea, that is nato countries aren't found to have paid their fair share to the alliance, that the united states would not necessarily feel obliged to come to their defense. manus: one other thing. he didn't really go to the center ground. he didn't abandon those extreme views that he holds so dear. did you find that strange? has anybody commented in terms of an acceptance speech which is to try to unite and bring together the voters? on my way into the building, i heard him talk about, let's get hold of bernie sanders voters. sasha: i think he did succeed to some degree in unifying

republicans, at least the party faithful this week. people in cleveland seem very much invested in him beating hillary clinton this fall. but last night he had the opportunity to try to sort of expand the turf on which he was competing against her and he went back to a lot of the same issues and themes that got him through the primary, immigration, a ban on foreign refugees from countries with patterns of terrorism, a bit more of the same from donald trump. manus: thank you very much. sasha at the republican national convention in cleveland. stay with bloomberg. before the u.s. market opens, we get earnings from ge and american airlines. after europe closes, we get ratings for saudi arabia and greece. a cracking lineup with guy johnson and michael mckee. energyll be joined by l1

chairman and former bp ceo john ryan. this is bloomberg. ♪

>> a dramatic deterioration. data showsost brexit the u.k. economy contracted at the finest -- fastest pace since recession. alone can fix the system. what does this mean for the global economy? we will spe t