janet yellen resist pressure to hide u.s. rates but-- to hike u.s. rates. a dissent from a 30 member of the committee. stocks and bonds rise around the world as the dollar weekends, european equities have started higher. merck the country's biggest conglomerate is to split in two withone company focused on shipping and the other on oil. welcome to "the pulse" live in london.

i'm mark barton. we have got a great show aligned up today. later, we will talk brexit with the chief executive of the mobile provider 3 u.k. a festival of central decisions today. we are hearing from the norwegian central bank. it will keep rates at its current level. it see the underlying cpi 3.3% this year. it previously said there is still a prospect for cuts this year. it is the underlying cpi 2.7% next year. and mainland gdp this year 0.9%. the rate will remain in the current level in norway. many, many more central-bank decisions awaiting today. let's get to the first word news. ersk says it will split

into separate companies. the announcement comes as denmark's come biggest -- biggest conglomerate concludes a review. the chairman first revealed he was considering splitting up the group on june 3, the same day he since missed -- he dismissed the ceo. the governor of north carolina has to clear to state an emergency and called in the national guard as a second night of protests over a fatal police shooting. according to reports, the march oneinitially peaceful, but protester was shot and critically injured. city officials say police did not fire the shots. rba governor has made his first public statement. economic committee he expects inflation to remain low for some time, but will pick up andhe labor market strength

spirit he says it is in the public interest to deliver inflation at 2%, but insisted he and his colleagues are not inflation nutters. >> the reserve bank has been a proponent of flexible inflation targeting. asve not seen our job keeping inflation within a narrow range. we've not been what some have been calling " inflation nutters." we are recognizing that some degree of variability in inflation is both inevitable and appropriate. nejra: mark zuckerberg and his are pledging $3 billion over the next decade to work on curing disease and. they planned to work with doctors and universities to achieve that goal. mark zuckerberg says after speaking with experts they believe it is possible to cure or manage all disease. global news 24 hours a day powered by 2600 journalists and analysts in 120 countries. this is bloomberg.

have a quick peek at what is happening in the markets. what a busy day yesterday. central-bank decisions. the stoxx 600 rising for the third day after the boj decision yesterday. the fed leaving the door open for a possible december rate hike. the dollar is rising against the yen. yesterday. it rose 1.1%. at the end of the day, it fell 1.4%. the dollar falling after most of its peeress. the yield on the u.s. 10-year is down to 1.3%. ingigroup advising buys securities. will go up byeld 2%. fidelity says the yield will stay around these levels.

the yield falling for the third day. oil extending its games after u.s.y data showed inventories dropping to the lowest level since february. as expecting, the fed leaving rates on hold, arguing it made more sense -- amid signs that americans have dropped out of the labor market are looking for work. ed.ee members discent the first time that happened in three years. let's bring in our expert, simon smiles. he joins us from zurich. thanks very much for joining us. simon: thank you very much. mark: is janet yellen right to give the economy more room to run? simon: well, we think so. we had an expectation that would see a december rate hike. it's somewhat of a hawkish hold.

you mentioned the three dissenters. this is the first time since 1990 we have seen three dissenters against inaction. within that context, december, we would think that barring anything on for seen, it is inevitable to see 25 basis point hike. 2017-2018, it is a dovish outlook from the fomc. one rate hike been taken out and hence, helps explain why you seen the long end of the us.. curve rate. mark: could a trump presidency derailt the hike. it couldiders thinking come into the equation as trump becomes present because it could cause a large degree of uncertainty. what is your view? the election and

when it is being held rules out a november rate hike. however, we do not think it precludes a december rate had. presidential, election have not been huge short-term market moving events. there is a great degree of uncertainty with respect to outlook politically be it trump financial markets, we do not think it will be a major destructive event. when it comes to politics, among the clients i am speaking to, the focus is -- has started to shift from where was earlier this year from the u.s. presidential election increasingly to questions or concerns over politics in europe rather than the u.s. mark: boj, simon, was the other e yesterday. if you look at the reaction in the yen, you would have to say it is a big thumbs down. is that your conclusion from this new, flexible boj?

think targeting 2% inflation, given the policy has not worked the last three skepticisme's whether the bank of japan will be able to make it that goal. conversely, targeting zero yields on the 10-year -- is much morethat is within their power. the sharp rally with respect to japanese equities very much makes sense. the rally in the yen, given the skepticism, coupled with that ,nchoring of the 10-year equally is quite logical. as an international investor, one can swap out the risk and a 75% basis points on the fx basis, buying 10-year jgb's. from a risk adjusted

perspective, a very good trade. mark: what's sentiment like i'm on your ultra high net worth individuals? the overwhelming feeling is a lack of conviction. equity markets have obviously rallied in the u.s. further this year. valuations hardly compelling. one looks across to credit markets. it has been a great thing for u.s. high-yield, up 15%. high grade bonds relatively un- compelling. a lack of conviction. typically still invested in the diversified portfolios, but where we are seeing a lot of increased increased is hedging strategies which probably tells you the lack of conviction among the client base. mark: thanks for joining us. the chief investment officer of ultra high net worth at ubs.

plenty coming up including the end of q.e. infinity is on the horizon and markets have -- are mispricing appear so says our next guest. we'll discuss. then the chief executive of mobile provider three u.k. joins us to discuss us what brexit means for his business. stay tuned for thatt discussion. hthe dove turned hawk. ranks.en brand broke this is bloomberg. ♪

mark: let's get the bloomberg business flash. nejra: executive said global investment banking london expect and germany will prevail in the clearing over euro derivatives and are making plans to do with a follow. the city of london will eventually be stripped of the ability to clear euro -denominated swaps. edf has cut its profit forecast is the french car company keeping its nuclear power plants shut for longer than expected. earlier they cut their credit rating by one level two a m

-- to a minus. he'sen has denied negotiating with apple. hone maker was in talks over the stake in a british luxury carmaker. they also said that apple wants to buy lit motors as the tech giant wraps up efforts to disrupt the transportation industry. that's the bloomberg business flash. mark: so, we are about to see the end of q.e. infinity. markets are much too complacent about this. let's welcome the head of microstrategy -- alberto, thanks for joining us. does the fact that the boj just tweet to the edges tell us we the end ofsing q.e. boj has bought more

bonds and assets of a percentage of their economy. they are over 100% of gdp. clearly, they have realized that q.e. has some limits and also realize that having negative interest rates is a burden for some parts of the economy. it has collateral effects because banks don't lend if they do not make a profit. you're trying to create a wealth effect on the one hand but then banks don't lend, and you have credit contraction. so, they've created this yield target and they are going to buy less jgb's. however, there are other central banks that are still a bit confused, like the fed, and continue to ease. therefore we have a bit of a contrast between some central banks reaching a limit and b doubt, like the boj, and like the fed, which has not hike yesterday. and the window is closing on the u.s. economy because some of the

momentum the fed was talking about, we do not see it. the momentum is pretty flat. you do not have that many hikes to do before the economy start slowing. mark: the economy will slow this year. the dot plot says just one hike. the economy is not as strong as one might assume. alberto: the economy is slowing. plus, you have election risk. trump presidency -- we asked this, does it derail the summer, yes or no? does it play into this december meeting? create: i think it can volatility and markets. for the domestic economy, it is positive to have presidents that will do fiscal stimulus. toughump has a very stance on emerging markets, mexico and china, entrée. and that would create volatility

in markets. so, we think the monday debate is key. he could actually get an advantage at the debate. boj control the yield curve by focusing on the 10-year yield and keeping it around zero? there are problems that could arise from this. alberto: in t stern kate of the the current-- in state of the economy, yes. but because everyone is positioned, l ong duration, zero ield, negative yields, to me they need to say, we we are not going to buy mor. we are going to buy less. for now helicopter money is not needed. mark: the monetary base is flexible. 80 trillion yen. in the short-term, they are reducing the bonds, which is a

form of tightening. you can see it as a form of tightening. but in reality, what banks do -- these yield curve is very flat. banks don't lend. banks are 80% of letting. -- lending. what the theory says if you cut interest rates half the prices go up and people feel optimistic and they spent. this is only the first affected people are smarter. when interest rates go down, they know they have less money in their pockets when they are going to retire. eventually they spend less. effects.these two regions like europe or japan, where people are older, the are declining and you have banks, the main motor of the economy. it is a lot more important to keep the credit channel rather than interest, cutting interest rates into negative territory. there is a push back on the negative interest-rate policy.

central bankers are finally pushing back. admitted they did something wrong to cut interest rates and keep them negative for that long. but they are finally pushing back on doing more and more interest-rate cuts. mark: there you go. maersk announced it is to split up denmark's biggest conglomerate. this is bloomberg. look at the shares, they're up over the last two days. ♪

maersk announced it is splitting its biggest company into two separate companies. in more, let's bring christian weinberg out of copenhagen. was this is a prize? christian -- a surprise? surprise christian: the chairman did flag that there was going to be a split of the company. and reports out that there would be two companies, majestic and transport. hare price's was initially far greater than it is now? what does that tell us?

e, wasian: back in jun when we saw the biggest share price reaction. the share has been going up and outperforming its peers ever since. so, much of the expectation, or much of the share price from this split up has been priced into the share. still, goldman sachs was saying this morning that this is a clear opportunity for unlocking value. mark: so, what is going to happen with the shipping unit? christian: the shipping unit is going to be the main unit that maersk will focus on. maersk has said it will continue to grow the unit organically. they also said they would pursue acquisition and the shipping industry is currently going to wave of consolidation because of falling freight rates, forcing shipping lines to look at cost savings.

it will be inducing to see if maersk will perhaps acquire some rivals. mark: thanks for telling us more on this breaking story. maersk splitting into two. let's talk more about the challenge facing europe's companies, its big banks and its economy. we were talking about the boj. can the ecb take something from the boj? alberto: i think at the moment, they are not doing it. the ebcb will probably do something in december. the paradox is if they are dovish, if they say we are going to do more, then yields go down and have less to buy. and what they are already doing becomes harder to do because there is no more bonds with positive yield. actually what they did in the last press conference was march because they said we're already doing what is necessary. you have to give us time.

yields went a little bit higher, which is good for lending and banks. the and limitation of the current program is ok. i mean, eventually, they will have to do a little bit more -- mark: december. alberto: if things stay as they are, they may keep the current program in place. mark: what is doing more mean? because they are looking into the scarcity of -- alberto: what i would do if i was the ecb i would stop buying negative yielding bonds. i would do something similar to bank of japan, which means a slightly steeper surve and bu ying more periphery which is where the more stimulus is needed. germany has a big surplus. mark: any move from the capital key? do you change that or focus more on those who are heavily indebted? alberto: i do not think it will fans fire,h a lot of

but buying less negative yields in bonds is a good thing for taxpayers because they lose less money. when the ecb buys negative yielding bonds, they lose money. so, i think this is a way to buy a bit more periphery and to, in a way that is political practical. is turning.tide a lot of people were suspecting cuts in the deposit rate, which is already -40. i don't think that is going to happen. because it has a lot of collateral effects. i know the ecb is trying to manage that. they take money from banks with one hand, charging them and they give them with the other. in the end, banks may not use lendotro and may not aggressively. we saw stocks rising when yields became steeper but now they are struggling. i don't think they are going to do more negative interest rates. mark: more ahead. four.t, then there were

what next for the country smallest player, three. we will talk about the future of mobile with the company's ceo. this is bloomberg. ♪

mark: welcome to "the pulse" live from bloomberg's european headquarters in london. getting a statement from the bank of england's financial policy committee. they met on tuesday. we get the statement today. the boe essentially is saying keptits bank buffer, it and itk buffer at zero, is going to do that in till june, 2017, as the outlook -- this words, " challenging." it says the bank should not

increase dividends. so, u.k. exposures, of course, the banks reduce that buffer in the wake of brexit. the central bank cut that rate in july.among the to stability, the boe noting height and concerned about the risk of a sharp adjustment in the british commercial real estate market. leadsarney, the governor, . they met post-brexit. as i said, the bank did cut the countercyclical buffer and eased leverage restrictions. interesting comments from the boe's financial policy committee. let's get the latest bloomberg first word news. has saideller-maersk it will split into separate companies. the announcement comes as

denmark's biggest conglomerate concludes a strategic and structural review. revealed he first was considering splitting up the group on june 23. on the same day he dismissed the ceo. the governor of north carolina has declared a state of emergency and called in the national guard after a second led a protest over the fatal police shooting of a black man descended into chaos and violence. according to reports, the march was initially peaceful. although officers did fire tear gas. one protester was shot and critically injured. officials say police did not fire the shot. the new rba governor has made his first public statement. he's told a parliamentary economic committee that he expects inflation to remain low for some time, but will pick up. he said, it is in the public interest to deliver inflation at 2%, but he insisted he and his colleagues are not " inflation

nutters." >> the reserve bank has been a proponent of what is known as flexible inflation targeting. we've not seen our job as trying to keep inflation with a very narrow range. we have not been what some have called " inflation nutters." we have had a more balanced perspective, recognizing some degree of variability in inflation is inevitable and appropriate. news 24 hours a day powered by more than 2600 journalists and analysts in 120 countries. this is bloomberg. the: so, where next for u.k.'s mobile phone operators? with regulators refusing to allow further consolidation, what does the future hold? joining us to talk brexit and the mobile business, the chief executive of three u.k. how's post-brexit for your

business? not falling in like a lot of people predicted. that is a good thing but we have to be very wary, there's an uncertain future and we need to make good decisions now to protect the future not just for the country but within the theile business, for industry, there are important decisions coming up around spectrum. pound'ssts due to the decline? >> a lot of our handset purchases are in u.s. dollars or euro. we did have some hedging in place. that has not impacted our business so far, but a weaker pound will have an impact. mark: will you pass that on to the customer? david: we would like not to but it is something we will have to watch. mark: is there an ability for price inflation or not right now? this is not the market for that? david: prices are going up after a decade of prices going down.

and prices have gone up significantly in the fixed line industry as well. there is price inflation right now. we have always challenged the market. again, will come back to it is second with spectrum. spectrum is a causal effect of price increases in the market. mark: let's talk about spectrum. essentially, you want regulators theeign, set a 30% cap on proportion of airwaves and operator can own. what level of spectrum market share do you think we should have to keep the markets competitive? david: spectrum is the lifeblood of any mobile operator. it is critical that we get access to airwaves to provide service. more spectrum means more capacity, see you can bring more customers but it also means better quality of service. it's key. right now we're in a situation owned 40% of the spectrum. have the most

imbalanced spectrum portfolio of any country in the world. gging on this measure will need to be best in class. our proposal is to effectively limit any operator from having, to have no more than 30%. offcom have been clear they want a four player market. want environment where you for competitive players, restricting the amount of spectrum that somebody can hold is a logical step to take. in fact, regulators across the world do this on a regular basis. cap: why should offcom spectrum when you can afford to buy spectrum for sale? david: well, you have to look at the individual circumstances. we're a lot smaller than the other operators. we are half the size of vodaf the size of 1/3 bte. as a smaller operator, the

economics of buying spectrum are very different. our shareholder definitely has got a strong balance sheet. but you have to look at the business case, and it is different to a bigger operator. it is a bit like saying everyone has got the opportunity to buy promote week writes. -- premier league writes. mark: will the regulatory environment change, post-brexit, new prime minister? . has to beu.k fixated on being brilliant and first in class and everything we do. i would say right now the mobile industry is not in that space. if you take a step back, our regulatory mobile is in a difficult position because it is much easier to challenge decisions of offcom, than it is other regulars in the u.k. as a result of that, we have ended up in a very litigious

environment where offcom we'll try to make a decision and all the operators will threaten legal action, which kicks into t he long grass some other good initiatives. mark: what about an o2 type of deal? is that more possible after brexit? that's off the table. david: it does not make any difference. my focus is 100% in making the best of the situation in the things we can control. mark: no acquisitions, nothing on your mind? about being as good as we can and mobile. margins have grown under you considerably. that will continue? david: if we have the opportunity to grow. and spectrum is the key thing we need to continue the growth we have seen. if we do not grow, then we are in a position where possibly the business could stagnate. so, spectrum is really the lifeblood of the mobile industry, critical for us. mark: according to seek a

hutchison holdings report, your 12 month trailing that average 14.68. is why is the number so low? david: you may not become. like with like. is not necessary the best indicator of the health of the mobile operator because it includes handset revenue they it's pass through to the likes of samsung and apple. if we sold more expensive handsets, our arpu would go up. but we do not see any of that. we do not place too much reliance on that. for me, if arpu stayed flat, i would be coachable with that. our growth will come from taking more market share so we get more of i'm customers -- i would be more comfortable with that. mark: how much of a threat of hose voice messaging apps,

facetime? david: traditional voice and text is almost gone. everyone talks about convergence. it is the same invoice. we offer our customers the opportunity to make a voice call over wi-fi. convergence is already happening. i think it will not be long before people do not worry about how many minutes or texts. all people are going to worry about is how much data they can get. mark: data. you must have a lot of data. are you monetizing it? are you able to monetize it more? david: we monetize our data through acquiring more customers. we offer fair and good value charges for data. and customers come for a great date of experience -- data experience. that is how we monetize it. we carry 40% of the mobile data that goes all over the u.k. mobile networks. we have shaped and influenced

market. our messages we want to continue to do that but they have to get the next auction right, so we can continue -- mark: everything comes back to spectrum. good luck to you. david dyson, the chief executive of three u.k. coming up on bloomberg, plenty more including from the city of london, be stripped of his ability to clear euro- denominated swaps after the u.k. leaves the e.u. the dove turn talk. why rosengren broke ranks to leave the triple dissent at the fed meeting. looking ahead to "surveillance." we'll get thoughts from the chief executive of the international rescue committee, david melamed. -- david miliband. big day coming up today. ♪

mark: let's get to the bloomberg. we have the market outlook. nejra: european stocks higher for a second day. the stoxx 600 up 0.8%, heading for its first back-to-back games in more than two weeks -- back to back gains. it is the materials stocks and the energy stocks leading gains. materials up 1.6^. of course, we're seeing commodities higher today. metals heading higher as well as oil.

it is very much a risk on day in equities and commodities markets. here is oil. $45 ave got twti above barrel. seeing oil extending its gains after government data shows u.s. inventory dropping to the lowest since february. to put this in context, those stockpiles near their highest seasonal level in at least three decades. then, of course, very much what is driving these markets is the fed decision. the bloomberg dollar index versus gold over two days. we are seeing the dollar weaker today, extending yesterday's drop and heading for its biggest annual decline in seven years. meanwhile, gold holding near its biggest advance in two weeks. then another impact of the fed, the flattening of the yield curve. bill gross was commenting on this saying that the bear market

in bonds has been delayed and also saying to go further out along the duration. this is the impact of that decision yesterday on the yield curve. sort of looks like the boj's tweaks do not have much lasting effects at all. mark: so, global banks are said to be planning for the city of london to be strict of his ability to clear euro-do nominating swaps. we are joined by john diedrich. what is at stake? what do germany and france want? john: what they are looking for is the euro-denominated derivative clearing vistas, for to play that which happens int he -- in the ccp's. we are talking about companies majority-owned by the london stock exchange. we're talking about in terms of clearing,e and euro we are looking at a market that is half a trillion a day. and some, half a trillion

dollars a day. some estimates say the people who work in this business is thousands of city jobs. mark: how did this start? the ecb try to take derivatives clearing from london a year or so ago. john: yes, this is something had has been brewing for year. when they try to do this before, it was a financial stability issue. essentially what they seem to say and their policy documents is, this is systemically important. there is a crisis and we are anking to have support institution or having to look after an economy, we want to make sure it is happening someplace where we're regulating it. if it is happening outside of jurisdiction, then perhaps they cannot make the best decision for their own economies, for countries within the e.u. so, that is kind of the origin.

it really has a systemic issue. more recently, since brexit, it has become a more over political issue. mark: what are the biggest london banks saying? gavinour colleague at sent talk to executives at the big bang supplanting. of london.s by a large, they feel like they have to prepare for the worst. they see this business is going back to the e.u. after brexit. they are making contingency planning is what executives are saying. so, they are preparing for the worst, you could say. mark: thanks a lot. let's get the final five of -- the final thoughts of alberto gallo. what is troubling you, what is number one on the worry stage right now? alberto: markets are always very focused on central bank but we

are seeing the politics are deteriorating across the world. we have both an american -- the u.s., in various countries of the eurozone. we're also starting to see a reverse of normalization. we have a war of fines between the u.s. and the e.u. we are starting to have a tough negotiation between the u.k. and the e.u. all this is also a consequence of having a very sluggish growth environment for a prolonged period. only monetary policy being the only game in town, and no other stimulus to solve. mark: does stimulus step up to the plate? with bothhe u.s., candidates, we will have some pledges of fiscal stimulus or tax cuts. japan is already doing a. the eurozone is a big question mark. mark: the elections in germany and france. afd won over 10% in

berlin and they are gaining. party is a bit more on fragile territory. so, they're not really willing to do anything. ark: should merkel run for fourth term? alberto: there is not an alternative at the moment. i think it is all about whether she will be able to engineer a coalition between now and the election results. and have good consensus. without that, europe does not have fiscal stimulus, and we're stuck again in q.e. infinity. mark: what is the outlook for credit? alberto: today, investors are taking some relief from the dovish fed they are buying everything. . especially emerging markets, high yield bonds will continue to do well. where do we end in three months?

we are going to end with negative yields pretty yesterday janet yellen said something -- we are not reaching conditions in markets as exuberant asin the run up to the crisis. i would add yet. because we are going to get there, and that it is going to be very hard to -- mark: you think some will take losses? alberto: if you have a 1% rise in yields, do you know how many years it takes you to get it back from german bunds? you're looking at 100 years. jgb's, depending on where you bought them, it could be stock with a negative return for over 100 years. you would never make the money back. mark: what a way to end the show. thank you, sir, for joining us today. rosengren leads the surprise triple dissent in the fed. we're live in new york.

this is bloomberg. ♪

three disagree. three of the more hawkish members of the fomc broke ranks. mike, talk about the dissenters? it seems rosengren is really

standing out here. vote is more unusual than it seems. has been quite a while. two years. you have to go much farther back than that to find any time when three fed bank presidents dissented in favor of a rate increase. rosengren of boston being the most prominent because up to this point he has been seen as a dove. city,her two, of kansas has voted in this direction for almost the entire year. cleveland also known as a hwak. awk. in 20 years, three vote dissenters happen only three times. wantedn 2011 when three to cut and the other time they were arguing over language. this does not happen very often. you have to go back to the 1990's to see this kind of dissent on a more regular basis when alan greenspan was chairman. mark: how does presidential

politics play into think? -- into things? is a in november, there meeting right before the election. and there is no janet yellen press conference. that is a high hurdle. we get three more jobs reports, three more months of manufacturing data. three more months of price data. three-month of markets going up the presidential election. the data will send a data dependent fed to the sidelines again. don't taken to the bank. even though they were hawkish in september, that is going to be anything happening in december is still wide open. which is why you see a demo three action today -- a. this reaction -- a dovish reaction in marcus today. mark: world interest rate probability. odds 61%. "surveillance up next. francine is in new york with tom keene. they will speed to john kaczynski -- they will speak to

-- getting thought on brexit. stocks are rising for the third decision ore fed in the decision to do absolutely nothing. this is bloomberg. ♪

francine: agree to disagree. janet yellen resist the pressure to hike rates. there is defense from a member of the committee. the dollar weakens, europe and equities have started the day higher. the euro area's biggest banks will face indexes requirements for long serving funds. we'll also look for euro clearing after budget. this is bloomberg surveillance. i'm francine aqua in new york with tom keene. seven central banks are up for review today.