>> president trump says he'll withdraw the u.s. from the paris limate pact. condemnation from world leaders an corporate executives. president trump: the paris accord would undermine our economy, hamstring our workers, weaken our sovereignty, impose nacceptable legal risks. >> fair weather friends. -- se premier leagues china's premier meet europe on trade, migration and climate

change. and it's u.s. jobs day. could a lower unemployment rate upstage the pace of hiring? welcoming it's daybreak europe. he spoke in the rose garden. it's official, the u.s. is set to pull out of the paris climate agreement. let's go to s -- the bottom of the screen. china, the world's number one polluter. china outpacing the united states of america by 40%. flip it over and you begin to understand the ramifications of

the united states pulling out of climate change. that eachount of co-2 u.s. individual emits in a year. 17 million tons versus one's chinese counterpart at 6.65 million tons. the decries have come hard, fast and wide. the head of goldman sachs managed to put out his first tweet. we'll talk more about the global reaction, the economic and the -- and does it matter to market? that's the question we discuss. global equities are rocking it out. hey're at 10%. manufacturing gauge in the united states of america three-year high. topix ripsghest, the getp, need a little more to

the dollar higher. you need a jobs number to take the market up. let's talk about the counter side. everything is so great. what is holding this oil market back? i'll tell you what. production in the united states. the biggest loss for oil by the way in almost a month. pruck hitting the highest level since 2015. anyone who thought shale was near the peak reconsider. because production risers in 14th week in 15 weeks. gold is an event offer. we have got a risk. the fed, the market, more or less issue. we'll get this rate hike. hat's a fair kay in the marks. it's day two of the st. petersburg forum. 6:30 london time. sophie rounds off your week with bloomberg first record. good morning. >> global leaders vowed to press

ahead with the paris climate accord after donald trump pulled out of the pact. germany, france and italy issued a joint statement saying they regret the american president's decision. the u.k.'s theresa may said she, quote, express herd disappointment to trump when he call her. the trump administration asked the u.s. to immediately reinstate its travel ban. it puts a trump initiative before america's highest court for the first time, bringing the nine justice into a national drama into claims the president is targeting muslims an abusing his authority. fired f.b.i. director james comey will testify to the senate intelligence committee next thursday, june , as the russia investigation moves onto the public stage. he'll appear in an open session in the morning followed by a closed session. senators want to know about trump's statement about the -- to comey about the russian information and checks on

foreign security advisor michael flynn before president trump fired him last month. the u.s. is imposing new sanctions on those with links to north korea. the treasury department is adding three people and six entities, including the ministry of people's armed forces and the newly created state affairs commission. washington also urged china to help rein in its allies. at least 34 bodies have been found in a casino and hotel complex after a shooting incident by a lone gunman. most of the dead appear to have suffocated from thick smoke after the man set fire to casino tables. police said the incident appeared to have been a robbery attempt and was not terror related. global news 24 hours a day powered by more than 2,600 journalists and analysts in more than 120 countries. find more stories on the bloomberg app. let's check in on the markets in asia. you posed the question whether

or not trump dumping the clean energy pact would derail mact action that doesn't seem to be he case. the hang seng headed for its fourth weekly gain, the longest un in nearly a year. the kospi as well as the nste edging closer to highs. tpwhrobaling to be stock rally up more than 10% near to date. let's take a look at some equity movers here. jumping to the highest since may, 2014. goldman sachs and deutsche bank raise stock to buy on optimism about sales growth in the chinese hotel market. in the of the biggest sector, it was a mixed bag for green stocks in the energy state

in china as well as across asia. take a look at g.c.l. poly in hong kong. this is the biggest maker of silicon slidetology a 2009 low. we did see the yuan rise. there was little change to pboc's daily. so checking in on the offshore rates in hong kong with 9062. after that spike that we saw this week, you can see from the circle here, we did have the overnight dropping 34 percentage points to 8.68%, the biggest since january. anus: sophie, thank you. now, the business community hit out aggressively as donald trump's decision to ditch the paris climate accord. disney c.e.o. iger and elon musk

oth spoke out. it drove goldman sachs' lloyd blankfein to twitter for the first time ever. he wrote, today's decision is a setback for the environment and the u.s.'s leadership in the world. for more let's bring in jeff she tellman, tom mckenzie standing by in beijing. what does this mean in the first instance in terms of cloy mat change? the u.s.a. against the rest of the world. put it in context for us. is this about slashing back against globalization? this is the personification of donald trump bashing globalization. >> absolutely. the speech we heard last night was full of rhetoric, full of his view on the world and america's position in the world. but actually, what does it mean to leave the paris climate

accords? the paris climate accord is a flexible mechanism set up that requires countries to report on their emissions. that's all it does. as part of that, the u.s. set a voluntary target to cut its climate change emissions which donald trump doesn't have to stick to. there wouldn't be penalties if he didn't meet it. manus: we are hearing a variety of potential ramifications. potential consequences could be you have a lashback in terms of paris against u.s. companies. this is a very early stages in terms of understanding what this withdrawal would mean. he's made it political because it could be four year, and that would make it a presidential campaign issue in four years' time. the consequences could be paris, that seems to be the baseline thoughts that the emoment. >> we -- jess: we don't know what the reaction will be from countries. they are saying they're committed to tackling climate

change and sticking with this accord. four years of donald trump, that could not be enough to derail the paris climate accord. maybe eight years could. interestingly, the final day of actually leaving the accord will be the day after the next presidential election. so this is going to be a hot issue for the next election campaign. manus: let's try to put this in context. 9064, this is the world. this is how we look at it in terms of what's going on in terms of solar power in the yellow, ok. and you've got wind power in the red. i'm going to drill in a little more closely. look at this. solar and wind in china. and the united states. it's less pro-- its less profuse biomass waste seems to be the big draw over there new jobs, new energy, 17 times faster than

old energy in the united states last year. it is a bit of an anathema to take the g.d.p. numbers, 6 ppt 5 million jobs would be lost by 2040. new energy created jobs 17 times faster. >> donald trump talks about the job killing power tissue paris climate accord but actually if you look at china, it's got 3.5 million jobs in renewable energy, it's the world's biggest investor in renewable energy and biggest maker of solar panels and wind turbines. donald trump handed a massive opportunity to china here to lead the world in these investments. jess. thank you for that, tom is standing by. as jess was saying, this is an adhearing to the

climate accord. reaction on the ground, tom? good morning. tom: good morning, manu sumbings. they reaffirmed their commitment, the chinese, to ccord. - to the climate a the chinese have been adept at filling the void when the united states fall back. you've got the one road initiative, the speech the president gave about you've goton and now climate change. we're expecting the e.u. and china to come out with another joint agreement at the end of today spelling out that clean energy and clean technology is at the core of this bilateral relationship. as you say this is an opportunity for china. and china sees climate change as consequential not just for the economics but also socially and politically because there are huge environmental problems here in china. it poses a risk potentially to

the power by the chinese communist party. so they're tackling it with huge investment. they invested the largest investment in renewables since 2012. a huge amount of money being poured into the secondor here in china. manus: you talk about the money being poured in, there, tom. the world, a great article written by david tweed over there in hong kong which talks about the plaudits that will be given to china but the reality is there are many areas that china has to do better on as a rising power. climate change is not going, as it were, the shining star of us understanding a market economy and -- an accepted economy, one that's got human rights at the center of its policy agenda. tom: oh, absolutely. no doubt about it. what it does do. the refrenchment on trade and climate change we're seing from

the white house is give china that opportunity to fill that void and soften the blows, whether it's on issues of human rights abuses that continue here of course or whether it's on what's been discussed in brussels over opening up the market and the stodgey reforms that many economists and many market players, whether that's the european chambers of commerce or the u.s. chambers of commerce plain about. here in china, conditions are get manager difficult. they seem to be crafting the rules and being around the table on two issues that are clearly going to dominate, two of the most consequential issues. they're putting their money where their mouth. is $88 billion u.s. dollars invested in climate change last year. they're focusing on a plan to invest $360 billion by 2020. they want to create 13 million green jobs. there's a threat now that chinese companies, private and state-owned, could start to take some market share away from u.s. players because of the regulatory uncertainty in the

u.s. compared to the regulatory relative certainty here in china. manus: thank you very much, tom. and welcome. the debate, jack dorsey saying it's shortsighted, he's the head of twitter. upset he took to twitter for his first tweet. others say this doesn't impact support for the agreement. aggressive rhetoric toward trump. what does it mean for markets? >> not very much. actually, not very much. i think people overestimate the power of politicians to affect global policy. in the medium term. i think what's going to be more important will be the attitude of investors. what i mean is the whole growth of e.s.g. and clean energy in terms of investment that's going to be important.

in the long run -- >> e.s.g. is -- >> talking about social governance, the push toward clean emergency, being ecological. that is more important. so the actual investors if investors decide they want to buy funds which comply with these e.s.g. or clean energy criteria, then clearly companies will be forced over time to move in that direction anyway. policy from companies, globally, will change. i think it is changing. if we look at the investments in this whole area, it is growing so quickly. so over time, there will be more pressure put on the corporate c.e.o.'s and company boards to adhere to clear criteria moving forward -- toward better energy efficiency in any case. manus: so corporate america has the ability if they want to supersede anything coming from donald trump. ed: donald trump, we know he's in for four years, that could be

it. manus: it could be eight. ed, thanks. coming up, we look back at this week's comments from the fed policymakers on the future path of u.s. interest rates. this is bloomberg. ♪

manus: it's 1:30 in the afternoon in hong kong. you're looking at a shot of the bay there. global equities are rising, hitting record after record. now let's talk about the investors anticipate u.s. interest rate-wise just a couple of weeks away. the speculation over the number of additional hike this is year. that's the debate we had a host of federal reserve decisionmakers who talked to bloomberg. let's recap some of the views on

the rates. >> on the rate itself, i think we're not far from an appropriate rate for the u.s. economy that will keep inflation not too far from target and the labor market performing well. so what i disagree with is the idea that we have to go 200 basis points higher to get to some sort of neutral rate. i don't think that's the environment we're in. >> it's been weak the last couple of months. if you step a little further back it's been gradually increasing from 14, 15, to 16, now to 17, the thing that's giving people pause is over the last two months, particularly march, for a number of, i think, idiosyncratic reasons, inflation dipped. >> my goal would be to see monetary policy to become more boring, as we normalize interest rates and get out of the large balance sheet and the unconventional policies we did that people won't be so caught up in will they or won't they but will understand it's a basic

strategy, we're responding to change in circumstances. we're not there yet but maybe we'll get there sometime. >> can policies ever get boring? hopefully not for the bloomberg team. hypoed probably hopes it doesn't get boring either. we just listened to voices about the rate, concerns about inflation level rolling over and policy becoming potentially boring. we're on a jobs report watch day. how much impact can a jobs report have in terms of the outcome for june? surely it's a shoe in. -- a shoo in. ed: it's already remarkably strong. so we have seen a number of upgrades from the year. but i would remind you that the nonfarm payroll number is volatile. so we do see big jumps from month to month, firstly. secondly, it doesn't correlate with the a.d.p.

and you see revisions one or two months down the line anyway. i don't think people place too much emphasis on this one number. often it gets changed in a month's time anyway. and substantially. >> -- manus: donald trump doesn't really enjoy the jobs numbers. we know that. what he does want us to focus on is the underemployment. he calls the jobless rate phony, the 4.4%. it's been falling down nearly 9% in april. the longest three-month slide since 011. this is a number, like more job, we're underemployed, so this is a measurement of slack in the united states. but it's not had the desired impact. that's falling. but it's not translated into higher wages. that's a market conundrum. ed: it's complicated. is it just a delayed reaction? will there be a major spurt? manus: do you think it is?

ed: i don't. there's been a structural change over the last 10 years in terms of structure employment to the a greater degree. we talked about uber, air bnb. the technological companies in the service sector. what that also changes is the nature of work. if you're an uber driver, you're not ememployed, you're not an employee of uber you're self-employed. that's a big, big difference. what it does do is gives you, yes you have a job but you don't have a job as you might have had 10 years ago which basically got a permanent contract which provides you with benefits, particularly health care insurance, which is very, very expensive. a lot of people in the u.s. take full-time jobs just to get the health care. if you're self-employed you don't get those benefits. so though you're employed you have to ask yourself, do you want to be an uber driver? is this your goal in life? or are you doing that simply

because you couldn't find a full-time paid position? because if it is the latter, then once the jobs become available, that guy will say, forget uber, i'm taking a permanent job because i want my health care, i want more visibility for my monthly earnings. manus: let's translate the discussion into market. this is bond market. this is -- bullish on treasuries. you've got the world's biggest bond firms, goldman's, morgan stanley, boosting their outright securities positions by the most since 2013. this says one of two thing, either a we're left with a lot of paper that they can't shift out because it's been a dodgey quarter for flow and that's a. b, the recession risk is rising and you can see a 1% handle on the bond market, so says pimco. which argument do you prefer? ed: i tend toward the latter. there are two effects here.

firstly if you look at the trump reflation trade that's completely reversed since november. one of those relates to, will he deliver big tax cuts? how does that relate to the bond market? how is he financing a tax cut? in the short-term it would be higher deficit, which means yields going higher. ople would say, even if it won't be as much as he wants, we don't expect a massive issuance of bonds in the short term. the republican party won't stand for it. >> you buy the paper, ship it in. it's not about recession risk, it's about the validity. >> i think there's a bit of recession risk. the point is, the core p.c.e., the key inflation measure for the feds is not rising. it is falling. and the bond market is also reflecting the fact that they're saying, look, this smells a little bit like japan. inflation won't go up whatever the fed does. -- up we'll get into a

next we go live to st. petersburg for the chairman thief state bank of india. it's bloomberg. ♪

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delivers consistent network performance and speed across all your locations. fast connections everywhere. that's how you outmaneuver. manus: 6:30 a.m. in london. 2:30 in the afternoon, what a glorious day over the emperor's palace in tokyo. markets have a touch of the friday feeling. how does it feel in st. petersburg at the international forum? eric has been taking the temperature and reactions. he has another special guest with him. eric, good morning to you. eric: i'm here with the chairman of the state bank of india, the largest bank in india. nice to see you again.

let me begin with this. the united states is pulling out of the paris accord on climate change. in part president trump said yesterday because it allows india and china to keep building coal-fire generating plants. how should india respond? >> one thing i must tell you is that india is very aware of the fact that we do need to ensure that more and more of our energy comes from renewable sources. if you've seen the amount of solar power that we have added to the country last year, i think it's one of the largest in the world. .n fact, probably the largest the addition of solar in india. not only that, in the last two years, no coal-fired plant has come up in the power sector. so to that extent, i think, you know, we are well aware of our responsibilities. weather is one thing you can't restrict within your boundaries.

if you're burning forests in one country, the smoke from that will impact another country. similarly, you know if you do something that heats up the oceans on your borders, it's going to impact another country. so i think, you know, we have to be all responsible for weather. and for that, to pull out of something that is a global agreement, i don't really know whether that's the right response. eric: i'm not asking whether president trump made the right decision but india has a choice to make. should india continue to insist on its right and perhaps need to add coal-fired capacity or should it view mr. trump's decision as a challenge to install and respond by installing less coal than it might otherwise think it needs? >> i think one thing you do have to understand, in india there are a lot of people who still need to improve their standards of living, ok. so they have a right to a better

standard of living. how we get to it, whether it is through better ways of getting to it, fine, that is something definitely we should look at. the other thing is of course, i think, research and development is concerned, the more developed nations, i think, have a responsibility to provide those as well to those who are not up to speed in these areas so that we can bring in better technology and therefore less pollution. eric: when we last spoke you said it was too early to call the monetization program a success. what's your assessment now? >> i think it's been an unqualified success. i'll tell you two reasons for this. one, of course, is the fact that the digitalization has received a huge push and if you look at the level of the usage of the

digital channels before and ter, there has been at least twofold, we have done the work of two years in 60 days, where digital increase is concerned. the other thing that's happened is the amount of resources that have come into the banking system enabling us to lend at much lower rates. that's something i think industry has been clamoring for. we were not able to transmit the rate cuts of the central bank because of lack of liquidity. that has come into the system. i think these are two very signal achievements of the demonityization. >> at the same time, bad loans remain a problem for india's banks and consequently for the indian economy. the central bank devised yet another scheme to force lenders to write down soured assets and also to force borrowers to renegotiate terms. will it work? >> actually the central bank hasn't yet come up with a

scheme. we are all waiting for it. what has happened is the government has empowered the central bank to come up with something which hopefully this time will be effective. actually, the last three things the central bank has done, industry has said that they have not gone far enough or been flexible enough. it was three programs that were given, very, very structured so structured in fact that you couldn't fit in a large number of accounts that needed special handling. each account has its own solution. you can note really typecast it into a very rigid mold. so we are hoping that this time they will not put such a rigid structure around it. but they have not yet come up with this, it's difficult to say if it will be successful. eric: what if it doesn't work? >> i think it will. if it doesn't, i think there will be more of a push toward the bankruptcy courts. all right they have started

operate this etribunal that's going to hear the bankruptcy cases. the utilities around it, such as there has to be information, there has to be resolution professionals, that has jet to take good shape. i think what is going to happen is the speed of cases being addressed will go up. eric: inflation in india is at a record low. is it time for another rate cut? >> i think it is something the central bank should think about. eric: as soon as next week? >> very difficult. this is something i don't normally talk to in media at all. that's the central bank's prerogative. eric. but you're the transmission mechanism, the largest bank in the country. >> that's true. but it depends on liquidity. if you look at indian banks, the resources are mainly deposits. they're not market borrowing.

it impacts about % of my resources, that's not enough for transition. transmission happens when there's liquidity. what does happen when the central bank cuts the rate is, it is a signal. eric: that's why you'd welcome a rate cut. >> that's right. eric. your bank has ambitious plans to raise capital and a listing of the insurance business. what is the state bank of india going to do with those proceeds? or is that a decision for your successor to make after you step down. >> not really in the sense i think india has a very good growth cycle. we would definitely like to have the capital to be able to participate in the cycle. we have done a lot of work internally to ensmure that the risk standards are improved, underwriting is much more tight,

understanding of the situation in india is better and therefore we believe that you know the next growth cycle we will be able to participate in it in a better way. not only that if you look at the banks in most of the country in part our of the world, all of hem have capital growth in 17% whereas ours in the range of 13% or 14%. it would be nice to have a little more capital. eric: improve capital ratios and use whatever is left to make loans or to consolidate the industry? >> no, not really. i think we are done with the consolidation in the sense we've already done the merger of six banks with ourselves. which was a huge i.t. challenge. now the challenge is more to integrate the human resources. and ensure that you know the productivity and efficiency gos up. once we have done that, i think we are done with the

consolidation. i don't think we will be onsolidating any more banks. eric: i want to thank you for spending time with me. much more to come. for now, back to you in london. manus: thank you. more exclusive conversations with eric on the ground. we've got a lineup of great , at 9:50 u.k. time there's a conversation you'll want to tune into. had ally what gladenberg to say on a panel yesterday. let's talk about day break, i it's his morning's cover, going to have a huge impact. it's his decision, donald

trump's decision to pull out of the climate agreement. 200 other couldn'tries in it. india's from perspective. ultimately, ultimately you know, this isn't going to have a huge market impact. >> no. i think as i said that investors will push further toward a clean and countries ve will have to comply more and more. that pressure will come if not from u.s. government policy, it will come from elsewhere anyway. manus: looking at this, the solar industry in the united states, 17 times the number of jobs in the economy last year. i know solar isn't necessarily going to employ everyone in the energy industry but that just shows you. the next story, theresa may, who delivered a muted response to the trump decision that drew from her u.k. election opponents, you've got the

german, the french, government responses, individually responding, then via joint statement expressing, and may expressing disappointment to trump when he called, according to a statement issued about three hours after the event. fenally, account daybreak" ocuses on vladimir putin 4edlining a high profile lineup of speakers. also due to speak the saudi energy minister and the opec b.p.c.ry general and the oil marks, oil has given a lot of its momentum back at the moment. ed: i think the pressure is still very much on production numbers from the u.s. and i'm very bullish on u.s. shale. i think production will grow faster. we have to remember that the forecast of u.s. oil production has been raised twice in the u.s. we know where the momentum is. the longer the oil price stays

around 50, the more that shale il production will grow. anus: if you go to my -- go to our website, see a chart. if you are a bloomberg cust me, click on bloomberg go. you've got the charts an functions. you can influence the conversation. at the bottom of your screen, there's a chat, comes straight to our producer. coming up, fair weather friends, china and the e.u. unite in criticism of trump's climate change decision as the -- as the brussels climate meeting continues, we're live there next.

manus: :45 in london.

1:45 a.m. in new york. s&p futures, record after record. global equity market including the s&p 500. do you believe, do you believe the equity markets can run high her that's the next debate we'll have. sophie has more. sophie: germany's lind has reached an agreement far combination with packs air of the united states. it will create the largest supplier of industrial gases, ending months of suspense about whether the deal would go through amid opposition from german employees. ministers urged lindh to not mouff ahead without worker support. 3 billion as they set up investment in japan.

much the fund is 55% larger than its second major fund which generated a net internal rate of return of 28.6%. president donald trump faces unlikely opposition to pulling the u.s. out of the paris climate accords. some of the world's biggest oil companies. exxonmobil and conoco phillips reiterated support for the agreement. trump announced his decision to ditch the pact. bob dudley underscored his backing for the plan to cut greenhouse gas emissions. >> we've got to try to get to a lower carbon form of energy. i have no doubt it will happen. i think we need to be really clear, rather than walking away from it, what you put in place in the united states. sophie. citigroup traders facing the same slowdown in activity that's

dragging revenue across investment bank this is quarter. they said, quote, we're right in line with what others have said. he was referring to earlier remarks from j.p. morgan executives who indicated second quarter trading revenue will all by at least 10%. manus: thank you very much, sophie. good morning. >> good morning, maus. this chart pretty much -- manus. this chart pretty much sums it up. this is the asia-pacific index trading at its highest level records in&p 500 hit the session. as you're seing the nikkei move higher, you're seing the yen weaken. dollar yen up on dollar yen

generally a move toward risk assets and away from havens. the dollar is holding on to gains triggered by the a.d.p. report, looking ahead to jobs data today as well. i showed this chart yesterday, the 10-year yield versus the bloomberg dollar index. i am bringing it up again because yesterday some were arguing this gap meant dollar losses might moderate. today he's writing if it catches up to the dollar index we could get to 1.%. we're at 2.21%. he does stress this is a minority view of all the nalysts surveyed by bloomberg, who expects it to fall. w.t.i. crude here heading for its biggest weekly drop in four week. down 3.7% on the week. below $48 a barrel. keep an eye on this as well, it

was above 50. quick hi just on the yuan, the n shore yuan breaking a rally. offshore yuan tumble the most in five months. manus: thank you very much. the e.u. summit continues today in brussels. trade, migration, climate change. they lead the agenda. the chinese premier said yesterday that his nation will stick to its pledge to tackle global warming. lee made the -- li made the comments before president trump announced the u.s. would withdraw from the paris climate accord. bloomberg's john hayden joins us from brussels. great to see you this morning. the reaction, we've taken some of it, seen it from the corporate side. blankfein, other c.e.o.'s, the european response to trump's move.

>> it was a combination of dismay and regret. i suppose you can't say they didn't see it coming because the e.u. leaders, within the g7 did a hard job of trying to persuade trump to stay in at a summit last week. obviously they failed. so they were already kind of prepared for this kind of decision, at the same time they were hoping it would go the other way. now they're going to try to double down and say this is going to go forward anyway. the paris accord will go forward anyway without the u.s. and we're going to see, try to see how that's going to work out. manus: put that in context for us. at the start of the show i showed the number one polluter is china. number two is the united states of america. but the number one per capita is the united states of america. it's aggressively higher than china on a per capita basis. to what end can you make the paris climate accord work? because -- is it going to have

the same impact without the u.s. on board in four years' time? will it garner more dissent? >> there's a couple of factors in here. the dissent, possible more dissent is one of them. to begin with, the u.s. commitments under the paris accord represent about 20% of the emissions reductions. the overall emissions reduction that the agreement was looking forward to. so there's a big note that they're going to have to make up smu. the only way to do that is for the other members, other countries that have agreed to this, which is virtually every other country in the world to step up their commitment, which is possible under the accord. that's the way it was supposed to work, to keep an eye on how the emission reduction is going and then adjust it as needed going forward. whether they're actually going to be able to do that and hit the %, keep the temperature increase under think 2% level that they're looking for, it's going to be difficult. but i have to say that the

local, you know, the u.s. states and cities and businesses as well, you know, are really committed to this. on the local level, i think you're going to be able to see a lot of action on this that might make the federal move in the u.s. not so important. manus: jones, thank you very much. that's the latest interpretation from the european side on the climate agreement and the u.s. pulling out. let's talk about global equities. the usci index is up 10% on the year. global equities are on a charge. there's optimism in the air. en is falling. kospi up 1 ppt 7%. yen -- the dollar is up, yen is declining, it's nirvana.

ed: i wouldn't go that far. manus: don't burst my bubble. we're up 10% on the global equity. are you as bullish as i just expounded? ed: i am bullish because i think momentum begets momentum and people tend to forget that when it goes up, they want to call the top. calling the top is a dangerous game when you look at things like the nikkei breaking 20,000. the s&p breaking to a new high, led by tech stock. there's strong underlying momentum despite the fact that we have unfavorable factors. northerlyly the market should be falling. we are at the time of year -- >> go away, blah, blah, blah. ed: it does work normally. 10 we are seeing remarkably strong momentum particularly when you take into account the negative seasonal effect that can continue for quite some time. manus: let me talk to you about some of the calls you made. you spent quite a bit of time writing about autos.

i've got to say are aggressive. the other sector is vulnerable. u.s. autoregistrations for april, on the downside. if you're worried about autos, i'm worried about the consumer. ed: there are question marks about the consumer, manus. more to the point, we have reached the peak of the auto cycle. there comes a point, you've bought a car, you don't need a second, third, fourth or fifth. 95% of the time your car sitz in the driveway, doing precisely nothing. right? and we have renewed our car parks in europe, in the u.s. and even in china and i think that momentum is now slowing after so many good years for the car market. manus: let's put the chart back up do, you hold the same for european autos as well? are you concerned about that? showing european autos up

14.25%. ed: i am worried. they have done fantastically well in terms of profitability on the back of the strong sales momentum. they have high operational leverage. if the sales momentum slows down, pricing will suffer and their profits will suffer as well. manus: the other chart that aught my eye, the v stocks, so that said you're going to have that aggressive lurch forward in volatility. you would say i don't want to buy volatility, just buy the market. i wonder. ed: the point here, we're looking at the political cycle. we saw precisely around the french presidential election, , using ere aggressively v stocks to play the timing of the election. people are now doing the same thing particularly regarding the tally -- italian. italian elections will probably be in september.

it is precisely baugh of -- because of that that they're playing around that specific maturity. manus: ed, thank you so much. more from russia and the climate accords next. ♪ manus: turning up the heat,

president trump says he will withdraw the u.s. from the paris climate pact. drawing condemnation from world leaders and corporate executives. accord will undermine our economy, hamstring our workers, we can our sovereignty, impose unacceptable legal risk. a summit in brussels. on the agenda, trade migration and climate change. u.s. jobsmay, it's day.

rate ofwer unemployment states the rate of hiring? it's daybreak europe, our flagship morning show. i'm manus cranny. it yourself ready, stocks are literally on a tear. inare up globally 10% so far 2017. can we prepare? march, theice, brisk adp numbers were stronger yesterday in advance of the u.s. jobs report today. the manufacturing numbers were also very healthy. global, double equities are up 20%. record after record for the united states likewise, we have records in europe. manufacturing hitting the highest in almost three years.

let's talk about the risk radar. disappearedich took -- spirit, a little bit of breaking news, talking about a deal, in just a moment. up 1.41.x if you like risk, it's personified in dollar-yen. afflict across at the oil market, as the united states of america pulls out of the paris climate agreement, that is, as my guest tells me, one of the key questions. the head of opec, secretary-general, will be joining us a little later in programming today. what is the impact of the united states pulling out going to have on the market in the future?

dying, crude is down 7/10 of 1%, reduction in the united states the highest levels since 2015 and rising for the 14th time in 15 weeks. gold is down, that's the personification of a risk on day. can we carry that through? we have a whole load of issues this week. the unofficial or private data was a little bit more circumspect, showing contractions. that's the play on markets, let's get to sophie. she has the first word news. global leaders vowed to press ahead after president trump pulled out of the pact every -- pact. decision,t the u.s. saying the deal can't be renegotiated.

meanwhile, the trump administration has asked the u.s. supreme court to immediately reinstate its travel america's highest courts for the first time bringing the justices to a national drama, with a claim that trump is targeting muslims and abusing his authority. james comey will testify to a committee next thursday as the rush investigation moves to the public stage. he will appear in an open session in the morning, followed by a closed session. senators want to know about commies connection to the rush investigation. premier will continue talks of european council president and european commission president jean-claude juncker in brussels latest, obtained by bloomberg, li

recognized the importance in recognizing free-trade. it's due to take place of 11:15 a.m. u.k. time. germany corbyn has pledged to create more than one million quality jobs if his party wins next week's election. the plan would see a creation of a national investment bank to leverage finances. according to labor, that, coupled with regional development bank, will help create the new jobs. at least 36 bodies have been found in a casino in manila after a shooting incident by a loan goodman. courting to the bbc, local , most seem to have suffocated after the fire took place. the suspect killed himself. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories at the

bloomberg app. let's check in on the markets here. mood, leadingbeat the charge on both the nikkei. upso like the likes of cautioning some here given that the nikkei is at the 20,000 level. sayingave the hung headed for the best weekend since july 20 15. chinese stocks not joining the party. 600 and nifty in india closing in on record every take a look at some equity movers in asia, starting off with shangri-la, highest since may 2014, this after goldman sachs and deutsche bank upgraded the stock to buy optimism's about

sales growth in hotel markets. kobe steel is one of the biggest a mixed bag for energy stocks. china's biggest maker of poly cynic on use. take a look at this. we did have the yuan reversing. we also saw moved in the offshore interbank rates in hong kong. we are seeing the overnight drop the most since january, down to 8.68%. manus? manus: thank you very much. you, theify for average price that they are going to get the market is 50.113, the closing price is 50.47.

the bidding will start on that. let's talk about one of our business stories in the business community. donald's decision to ditch the pairs climate accord, while disney ceo bob iger, elon musk, they both quit. they went to twitter. this is the first time that he has expressed a tweet and his disapproval and it read this, today the decision is a setback for the environment, u.s. leadership, and for the position in the world. for more, let's bring in our renewable energy climate change reporter. she's here standing by in beijing. let me turn to you first of all. quite a buildup. ,he question i think for us is is the reason behind trump's decision to pull out, how valid is it?

droplks about a 3 million in gdp. 6 million jobs might be lost. he didn't say it was over the next tory five years. -- 25 years. the question is, is it a political decision or economic decision? killing jobs in the u.s. industry, but if you look at the clean energy company that i write about on a daily basis, the markets are growing and costs are falling by 60% since 2009 read by the middle of the next decade, solar is expected to be cheaper than coal. just this week, italy's which on five new power plants. they have been built without any subsidy. desperate global energy even need government to thrive? manus: the editors wrote a fantastic piece, that the solar worked 17 times as fast

as the overall economy in the united states last year, leaving a climate deal in any event, does nothing to advance jobs in fossil fuels. that's from the editors. the stake into the bloomberg, nine o six, you just want to understand who is doing what around the world. this is china, the yellow dot. the yellow dots are solar. the irony is, the biggest polluter in the world is china, but on a per capita basis, the united states is bigger. there is china, you can see and when youellow, take yourself across the united states of america, you can see the biomass is the bigger aspect for the united states of america. but this has potentially got consequences in terms of ramifications in the world. inre could be hit backs

terms of tariffs for those companies that don't comply. >> there could be penalties for the u.s.. at the moment, the reaction from businesses in other countries has been really strong. lots of other countries in italy , the eu, china, has said they are committed to tackling the paris accord. a couple months ago, sarkozy from the president of france, talk about carbon taxes. we heard academics talking about a label on the days, saying this article was made in a country that supports the paris accord. if you are a country looking to set up a factory, where are you going to look to now? re: what going to look at china, who has locally supported and is offering subsidies for clean energy? or are you going to go to to the u.s., with the president said he wants to bring back cal? -- coal? manus: they could for joining

us. tom, thank you for setting by. reaction for standing by. on the face of a devil, was his moment in the world about a globalist today. it's about being a good global leader. the optics are good for china on this, certainly. we heard them reaffirming their commitment to the paris accord in brussels. again,a, the state media reiterating that commitment from the chinese side. ont it really does it builds what we have been saying, you touched on this. whether it was the u.s. pulling out of the tpp deal, the belt and road initiative, and now climate change. two of the most important issues potentially the globe is facing and china is stepping up. does that mean it is always

sticking to the rule of law? no, not always. but it helps them it opens a window with them. it's interesting to bear in mind that under the obama a ministration,, change is one area where china and the u.s. have more in common than differences. that commonality filtered into other areas, other meetings, and it helps the relationship. what is going to happen now? china has reasons to tackle climate change, economic reasons, social reasons, air, water, land, devastated by pollution, and they are spending a lot of money on it. but the money is there and it looks like they will double down on it. manus: i just want to take the shot of actually what it is to be a polluter out there. we are going to show it to our viewers. total carbon emissions at the bottom of the screen. you can see there, it's actually

china outpacing the u.s. a light some 40%. that's on a per capita basis. it's significant. the usa is a bigger polluter than the chinese equivalent over there. how serious are the chinese taking climate change? you talk about the block investment in new terms and reformation. give us those, tom. year, 2016, china invested 88 billion u.s. dollars in renewables. they drew up plans to spend 360 billion between now and 2020. they want to grow and increase about 13 million green jobs on the back of that in terms of the electric vehicle market, the largest in the world. they are setting up a carbon trading market, pushing ahead with green bonds.

the market is worth about $100 billion. is the market well allocated? no. those are issues that china is going to have to work through. they have essentially an opportunity for chinese companies to take a march on led inmpanies that have terms of innovation when it comes to clean tech. manus: think you very much, tom. good reporting. now, the reaction to trump's decision from the european commissions variety of leaders there. you have bit vice president of he will be joining the team later on. that's at 9:15 london time. joining me is stephen very, standard advisory in london. thank you for joining me. we have got trump trampling across global agreements, but when i translated back to

market, we have the calmest market since 2014.ince 2014. we were gearing up, but you indicate indicators are our of the more mixed and it's harder to detect a theme. you concur we are in this low in volatility? >> yes, we are. some people find it difficult to believe, if you look at policy on something on a global basis, you mentioned trump and various other issues that are going on, brexit etc.. the policy on certain seems to be on high and volatility seems to be low, but that's not strange. very often, markets become volatile when people become aware of events. there are things going on in the future that make us more certain about what's going on. the u.k. election next week,

policy next week, also in two weeks time, the ecb. generally, we will see this environment staying in place for a little while longer. manus: do still have a preference for yen? that is correlated to sterling or dollar? where is your skew in that? is it politics for the u.k.? >> i think it's politics for the u.k. in some extent. looking for that election in the u.k. next week, certainly are biased to sterling. we are not necessarily saying that because we anticipate labor is going to win that election, but just the risk is a little bit too great. if the risks are too great, you can translate that into other currencies, creating a little disturbance and that could then if it they again. manus: we pick up that discussion shortly. he stays with us.

coming up on daybreak, we will look back at a week of comments. every time. high affairs on should unwind its balance sheet. this is bloomberg. ♪

manus: it 7:21 here in the city of london. if you are in new york, you are up late, too: 21 in the morning. interest rates, they are going .o rise we've had a host of the federal reserve decision-makers that have spoken to bloomberg this week. your is what some of their comments are in terms of how the federal deserve should do with its balance sheet. of the economy, i expect us to start the normalization. the baby step on that, that will take several years to take

place. it will be a selling at asset. the run-up in the balance sheet will go very smoothly. it will be managed, slow, it will take quite a while. >> letting this balance sheet run off should be happening basically in the background. having said that, i am sensitive that in the early stages of this, there will be a lot of market sensitivity and we will have to take that into account. baby steps, smooth, manage in the background. in your opinion, how deliverable is that view? >> it's very deliverable. it shouldn't produce any market disturbance. we spoke before the break about the low levels of volatility in the market and that feeds into that theme. that looks good. time, older people

like me probably remember in the past when the federal reserve is wanting a bit more traction. we saw that in the greenspan era. i do wonder going forward whether all of this guidance and caution and all this sort of stuff actually comes back to read -- rebound. there are no signs of that at the moment, but in the future, two or three years down the road, mike the fed wonder where they will need to tighten things up a little bit more in the market and will it be more resistant than it would like? manus: do think they should hold their horses and wait for a little more inflation, a more robust feature, whether it's falling over or just a cause? >> it's just a mantra that the

fed has used a lot. they stuck to that in the last rate hike in march because economic data was getting better since the election, looking at the survey data. the market before that increase, didn't expect the fed to do anything. and then the fed said, this is what's going on and this is what we are going to do. then they raised interest rates. subsequently, a lot of the data has been softer. officials themselves said they were concerned about the weakness of inflation. i wonder where this data dependency idea only works in one direction. it's fairly asymmetric. the fed is going to go faster, the data is strong, but if it's week, the fed want slow down. from expect a rate hike the perspective of the data dependency mantra, it might be better to wait. manus: i think they just want to pack up and have a few in there when we are not looking.

we have a few other issues to worry about. spread ised narrowing. had he position? dollar's as the concerned, i would position from the short side. against most major concerns is -- most major currencies. with respect to the euro, i think it will go in short-term go out to this is sort of top of the range that we have been in the long time, one of 5, 150. we have been in this range for two and a half years. in time, we will break that level and similar with respect on the downside as far as dollar-yen. , therejust circling back has been a rough and tumble week. we felt it a couple times this week. it is getting higher and higher as we go into more intricate

polls. of the we are less than seven days to extrapolate,let's if she wins, 60-80 would be there proposed majority. if it wentou review, more or less according to plan? >> i still sell it. manus: you'd still sell it? >> if there was similar levels before the elections, if the conservatives win, we would probably get a pop in sterling and sterling would move higher, but i would sell into that rally. or soason is, a week after, we go into the brexit negotiations and they are, from my perspective, not going to look as if they are going well in the early stages. i think the markets will worry about that and it will be a consequence. manus: stephen, thank you very

much. thank you for joining the daybreak team. that's it for the whole of the team this week. the european market is up next and they have a host of conversations from st. petersburg. those interviews are coming up. ♪

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it all adds up to our most reliable network ever. one that keeps you connected to what matters most. >> welcome to bloomberg markets, the european open. we give you the first trade of the day, i met matt miller in london for the week. happy friday, by the way. here is what we are watching. is the climate agreement crumbling? president trump said he will withdraw from the paris accords drawing condemnation from world leaders and getting heat from corporate executives, as well. premiere pivoting east? li meets on the agenda.