>> theresa may is ramping up in the wake of the terrorist attack. with three days to go, how does the atrocity play into the u.k. election race? toted emirates cuts off ties qatar over its relationship to iran. stock markets plummet. as president trump continues to watch his biggest constructive initiative, jamie dimon tells us that u.s. infrastructure is embarrassing. morning everyone, this is

the work surveillance in london. this is a after the weekend of terror in london we will be live to the scene of the attack and to westminster with the latest on the investigation and a knock on effect this will have on the u.k. election. it's on thursday, june 8 that the u.k. kosovo. we will be joined by anna and nejra in just a second. but first here's first word news. >> let's get started with oil here. for countries like by saudi arabia cut diplomate ties with qatar and access to the nation started over and its support for the muslim brotherhood. rex tillerson has urged members of the gulf cooperation council to remain unified. we encourage the parties to sit down together and address these differences.

if there is any role we can play in terms of helping them address those, we think it's important for the gcc remain unified. says -- present >> jamie dimon says the bank is hoping to get up on the license in the country and would consider another venture in asia's largest economy. progressave made huge in financial reforms, market reforms. they're going to have tough times and we should understand

that. it's true for every single country that goes from emerging markets to a developed market. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm david inglis, this is bloomberg. >> thank you so much, theresa may is chairing a meeting of the u.k. government's emergency meeting, cobra, coming after saturday night terror attack in central london that left several people dead. sterling is weaker this morning with atrocity raising the stakes in the u.k. election, which is days away. we have the latest on the political ramifications with anna edwards in was mr. in just a moment. first let's get generic a hitch that joins us from london ridge, the scene of the attack. it seems like we are still in locked out of it we have any more on the identity of the attackers? >> as far as we understand francine, police are aware of the identity of the attackers. they think they know their

identity, but they have not yet released the information about those three attackers that of course were shot dead by police just minutes after they began their attack, which involved ramming into pedestrians on london bridge in a van before, and working on a spree -- stabbing spree. a lot of the bridge is courted off behind me, it's likely to remain up today, but the station is working fairly normally with trains and underground going in and out and a lot of pedestrians on the streets, commuters walking across london bridge as i speak. in terms of investigation, 12 arrests were made, one of them was released without charge and property search this morning, please raided a further two properties and have detained a number of other people. that's what we know so far. an investigation is still ongoing but we know the islamic

state has claimed responsibility for the attack retrenching? we will have plenty more throughout the day. but get to an edwards who is at westminster. how is all of this thing into the election? >> good morning, francine. mealy after the dreadful events, we were supposed to have a policy in campaigning, but it did not last long. we heard from theresa may yesterday morning. she said enough is enough and there needs to be an end to toleration of extremism in britain. so not sure exactly what she difficulthat, but conversations we need to have, often embarrassing conversations in this regard. jimmy corbyn answered last night, saying we need to have these difficult conversations, we can start by talking about saudi arabia and their role in his view, funding if you missed ideologies. how does this play into the election race? it's on thursday, of course. it's interesting to see what

people are voting about. security is certainly a bigger issue now been it was a few weeks ago. it was all going to be about brexit. now things have changed. some of the polling has tightened, but if you look at measures are meant defense and dourity, the conservatives enjoy it more of a substantial lead in that type of polling and they do in the general polls. does this play into conservative hands? i spoke to charles lichfield and he said yes, but theresa may when she was secretary, she did the job for six years. should she not have been doing more to tackle this, some say? to criticize german corbyn, around his record on terrorism, they say he's soft on terror, he makes uses for terror, something he the humanly denies. he claims his relationship to the ira, he is reluctant to sing the national anthem. they tie all of this together in

the hopes it paints a picture that they want find it appealing. corbyn .2 theresa may's record at the home office and the authority cuts and the pleasing budget. we will have plenty more from both of them throughout the day. the u.k. election, terrorism, and political risk are all set to be seen at global macroeconomic conference in london today. global equity strategist joins us there now. great to have you on the program. which is this tragedy at the forefront of everyone's mind, how do the markets view attacks? these terrible events >> it is different -- difficult for the markets to make this on macroeconomic factors. at the moment, volatility is

very low despite the events we seen. i think in some senses, this reflects the extent the macroeconomic backdrop is very stable, people have seen very little to trigger a big move one way or another in terms of interest rates or growth expectations. >> i know you don't have a crystal ball and it is extremely difficult to know which pulls to trash or which models. could this change the election on thursday in the u.k.? >> as you say, it is very to know how this or other factors will affect the elections. people,s are there for they have been narrowing, they are bored of factors that have impact on the markets.

the market have been relatively stable. because the markets are affected by macro factors. >> is that more central banks? what does it mean in terms of your positioning ahead of the thursday vote? banks are obviously very critical. vote benign backdrop in terms of global interest rates. also, the stronger more global balanced economic picture we have been enjoying over the recent months. it explains relatively low volatility. the u.k. market, it is anything -- it is the most global of all equity in -- industries.

it is very much affected and a barometer of the pace and breath of that global backdrop. i think that is what has been reflected in a robust picture for the u.k. antimarket. do you see volatility as we get into the summer? is it in check? >> i think volatility is a -- tion the sort of things that people can model that have that impact on the way risky assets will behave. we are in a bull market for equities. that is because they are of their little value. indeed, also because global growth is strong.

it rises to a level which is likely to trigger a shock downturn. you really some catalyst to bring them to an end. equity markets are expensive right now, that catalyst would need to come to some trigger to make a recession look more likely. at this current stage, there is not an obvious catalyst for that to happen in the very near term. that, there will be events that will pick up volatility. there is a combination right now, it is pretty high volatility in the empty market.

you're likely to see a bigger tour because of the combination. you will get what i -- he stays with us, we will be building up to the u.k. collection. also, right here on bloomberg television. you will get instant analysis of the markets as exit polls are published. here's david england. they are doing how to bolster liquidity drained. according to people familiar with what is going on, it is raising -- there are plans to me tomorrow with the european central bank.

it is considering seeking oversight from them to guide the discussion. asking lenders in to waitedit facility until the trader six breathing room. according to the person with knowledge of what is going on, that company's core bank advises them on a $2 billion credit facility that actually expires this month. now, spacex has taken another step toward affordable spaceflight. it had previously supplied this back in 2014. it is starting to feel normal. that is how it is for cars and flames.

>> jamie diamond says the state of u.s. infrastructure is embarrassing. viewcame from an exclusive from bloomberg. president trump will formally launch his big infrastructure plan this week. >> we haven't filled a major airport in 20 years. to told it takes 10 years get the permit for one bridge. a new bridge in your city in 50 years. it is embarrassing. america should get that -- get back to building and constructing. we need to get back our can-do attitude. it is our country. we are getting behind and we shouldn't. >> he also said the u.s. is going through a weak recovery. he thinks growth can be increased. still with us as peter oppenheimer. peter, thank you so much for

sticking around, we want to get back to the u.s. and a second. you can seeyst, that there is in a correction in this kind of bull market. you look at the biggest risks out there, is it china? is it something to do with geopolitics, is a something with the u.s. or the trump administration promising that he may not be able to push through -- push through? i think the aspirations of the administration show that the markets hope for those, it has faded quite a bit. many of which surged after the election. -- the election of the trump administration. the fading of these performances, i think there are huge expectations for big tax reforms, at least for this year. politics always has the possibility of triggering a

correction, the have high evaluations. we have a bench that you discussed in europe with the u.k. election this week but also potentially an earlier than previously expected italian election. that could bring back some nerves into the market about the -- the backdrop is the result of that. in terms of more meaningful setbacks, bear markets, i will think that would come from nowhere, it is likely to come from fears about a recession and a downturn and probability. eventually, we to see some triggers for that. the rates are rising more than expected. that is likely to happen with rates rising a little more than the markets. we also need to look at things

that tend to proceed recession like rising unemployment and so on. when we start to get into these points i think we would get more orange flags, we are getting closer to a point where it was more substantial. >> talk to make at the bit about the equities, -- >> we preferred europe all this year. non-us secretary market have had minimal. i performance since this -- since the financial crisis started. it had better profit growth. there has been an area where there has been more confident in less concerns about the political backdrop or about the banking markets and systemic risks. the world is more robust globally, economically, because some of those previously seen risks about actor -- banking sector robustness and potential

systemic political offenses plating -- fading, we are getting more markets outside of the u.s.. thanks, capital is now at a more robust level. reducing some of the risks there. we're seeing stronger profit growth in europe than the u.s. for several years. the valuations are more attractive, we would expect to returns for this year. >> one very brief last question, we are hearing that the saudi led alliances are trying to isolate qatar. how does that translate into your equity world? much, of play not that course, it could, it has been out into further political developments, we would need to monitor it. i think the important point is

by oil price has been driven supply and production by shell. we think that oil prices will our commodityre, team will rise to around $57. as long as it stays within a relatively stable range, that is not likely to spill over significantly into markets that will derail the current relatively stable and robust trend. >> peter oppenheimer there chief of global strategies and goldman sachs. explain the diplomatic events next. this is bloomberg. ♪

♪ this is the latest we have from the u.k. terror. at the moment, theresa may is still in a meeting. we know that police will increase the significant force in london. they may know the identity of the three attackers that stabbed more than seven people. within 40 eight people were in hospitals. they still haven't released the name and the identity of the men who were near the london bridge on saturday evening. these attackers were shot dead by police officers who fired his

bullets. we have plenty on that. onto our other top story, egypt and the united emirates have cut diplomatic toys -- ties with guitar. -- qatar. they will suspend air and sea travel from and to qatar. from dubai. us now this didn't come out of the blue. yousef: it has been a few years in the making. they patched things up after the with the recall ambassadors but it really started kicking off in the last couple of weeks with the visit of donald trump to saudi arabia. after that, the accusation was from saudi arabia.

now the blockade across their land and sea from some of these countries, there is a lot going around it. ferocity of this decision to move ahead with the blockade is unprecedented. this is the new crisis law. let me show you what that means in terms of trade. this is for qatar. egypt and saudi arabia are on the 12. he's respect to imports, the united emirates goes up. important to remember that a lot of food is imported by qatar. citizens will be affected, they are not allowed to stay long. at thisme a quick look alert. the airlines are affected by this. reactione seen a big

on the qatar stock exchange. most of the stocks were affected quite significantly. in 12 months, there are people that are going to be betting against the weakening currency going lowered. mitsubishi,course, the potential rates are open and will significantly impact oil prices. they are also speculating on a full-fledged confrontation. >> thank you so much. next, keeping calm and carrying on after saturday's attacks. london has to go back to work. this is bloomberg. ♪

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surveillance." sterling is weaker. nerja is at the scene of the london attack. do we know so far in terms of police presence and the identity of the perpetrators? nerja: that is one key piece of .nformation the police say although they might know the identities of they are notrs, releasing information yet. that is something we are waiting for. this emergency cobra meeting began with theresa may and other

ministers into departmental officials as well. far is thereso have been 12 arrest's. one person was released without charge. r propertiesd fou in london. the investigation has gathered momentum. properties raided and detained a number of people. up., security is ramped there are police vans and officers around the area. we understand it will probably thein cordoned off for majority of the day. trains and underground running and a lot of commuters have been walking by as i have been's taking.

the last thing we know is the islamic state has created responsibility for this attack. we are waiting on the identity of those three attackers. we are getting pmi's figures, below estimates. important to mention them for our global viewers. this is the biggest component of the u.k. economy. it has a little impact on pound. pound was also weaker in the wake of these attacks. let's get more on this risk. an independent global risk consultancy. with you.peak give us a sense of how this can impact the political sphere.

>> there is a lot of talk of this attack. are they going to impact the u.k. elections? whatever happens on thursday and when we wake up on friday morning and we know the results, people will be wise in terms of the political impact of this attack. to play ins going the couple coming of days. yes, they will play, but i think it will be other issues that will decide this. whoever comes into power and forms a new government, this

and how terrorism intelligence is collected, and in particular, what that means for online platforms. it will be a big issue going forward. there will be a lot more to see on that coming up. francine: how difficult is it to prevent these types of attacks? >> it is extremely difficult. if we take the three from the united kingdom, the one in westminster, which was the most basic and the one in manchester, ,here it was more sophisticated to this one on saturday, where there were three people involved, maybe others, but the method was basic in term of using a van and knives.

security services say they have intercepted 18 complex plots. it is very difficult. there are some 500 people we know under observation who want to stop people who get a hold of a vehicle and a knife. francine: we had the manchester attacks two weeks ago, there was concerns about intelligence sharing. share less intelligence, does this put the u.k. more at risk? you saw quick reaction in the when those photographs were leaked in the united states.

there is talk about brexit and what happens after that. let's be clear. have an interest in sharing intelligence. i think that will continue. if you take russia for example, there is a lot of shared interest. ith the attacks on u.k. soil, is there information on why the u.k. seems to be so heavily? >> it is expected the u.k. would be subject to these kind of attacks. some estimates vary. we are at this days were some of

them have come back and where there are links with islamic state who are inspiring these attacks. the threat picture remains the same. we need to be aware of these attacks, there will be more of them. the month of ramadan. francine: thank you for your analysis. now, the global head of fx strategy at bnp paribas. human at a loss of tragedy. the impact on pound was striking.

investors worry this may have an impact on the election. way to look at it as far as markets are concerned. the pound surged when this election was announced. the reason was, it was assumed conservative government would increase their majority somewhat, based on polls. aom the perspective of narrowing of polls, the logic is the pound suffers. i think that is what we have seen. we should focus on positioning. a couple weeks ago, when the election was announced, the market was short sterling. a loss of this rally was short covering. we are back to a more mutual

scenario now. francine: was it a game changer when we had the you goes -- u gov model? you could have a collision between s&p labor and risk. what is the need for pound? >> that was a game changer. a bad parliament is outcome for the u.k. short sterlingt positions we had discussed previously would rebound. there could be quite a sharp decline in sterling against the back to at least 125,

potentially lower if there is a hung parliament. francine: we had back to at then , services activity called more than they expected in may. is this a sign of things to calm? ahead of the elections, people were calling off services a little bit. >> we had that weaker than gdp.ipated as far as the currency market is concerned, it is about politics and sentiment. sterling is very weak. ifative to where it would be we did not have the uncertainty here over brexit. there is a lot of uncertainty priced in.

francine: thank you. next, a we speak to the morgan chase ceo, jamie dimon. that is coming up next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." check on your markets. mark: stocks are down today. a few stocks are closed today for a holiday. leday jobs report -- saudi

the lines cutting ties with qatar. attack killedrror seven people. we are down a 10th of 1%. sterling is up by two point 4%. in may, it rose. buffeted by been the polls, which signal a tightening race. to add tog uncertainty 11 days before briggs and negotiations begin. to 2012.y goes back highest since january. we are nowhere near the record levels we were before the brexit referendum. 2014e also circled the

scottish referendum. we are nowhere near those levels. qnb index.ar's -- qe index. cutting ties with qatar is a moved to punish the region. that is a massive decline for the qe index today. francine: jamie time and -- jamie dimon talks about staying in the paris accord that trump abandoned last week. i hope it may come back in some form or fashion. i am confident wilbur ross and steve mnuchin are negotiating a

trade agreement with china. i hear they want to do something with nafta. i would the in favor of that. the extent things were unfair, there are things unfair in trade. we will deal with them. lets him a little more fair. is not fair. that is true. it may not be fair to the other side. >> should the united states take and some of the agreements china is pushing forward? jamie: i would have. i have not looked at it in a long time. helping regions develop is a good thing. if it is done well, i would participate. it is in america and china's interest we both do well.

it is not one against another. how do you see the u.s. economy now? in the second quarter, some of the trading revenues are taking a bit of a dip. maybe we will talk about the economy first. trading is like the weather. it goes up and down and you can predict it, i think it is a waste of time. if you say over 20 years, it will go up. it is going to do next week, i could not possibly do enough. it is a very long recovery. it is a weak recovery. it is about half of the average recovery. decisions wise policy infrastructure, regulatory

reform, we could grow the economy more. i feel strong about it. >> china is pushing infrastructure. what needs to be done in the united states? >> we haven't built a major airport in 20 years. we haven't built a bridge in new york city, the first one in like 50 years. just came from hong kong. it is embarrassing. we should get back to building and constructing. we have to get back a can-do attitude. it is our country. we are getting behind and we should not. francine: still with us, stephen. first of all, what is your take on the u.s. in general?

a clear view. we think the dollar is surging. the market is not pricing enough said tightening. week quarteris the . we are calling for around 3%. we think the dollar will rebound. a bit of a curve ball on friday. the market did not take that well. 10 year yields breaking lower are not going to help. if that is the case, we think the dollar rebounds. the market has the largest short position out there.

francine: why is the market getting it wrong? >> it is a belief in what is going on, and the data. even though we have a lower move in unemployment, the tight labor market inflation is coming. you sought jobs growth disappoint and a downward revision. of market is skeptical here the growth numbers coming through that would justify the rate hikes. francine: when you look at the the market is one way, saying trust me, i am right.

is it wage growth and inflation? is a key point. it is generally the level of growth or the speed of growth. the market was hit with that downside surprise. they want to see proof the market is rebounding. greatne: we have this chart on friday. does this impact your forecast or are you focusing more on gdp and inflation? care aboutdoes not inflation today. they are looking two years down the line. one of the best indicators they it signals the tightness in the labor market. fed theyignal to the

need to get going as far as tightening is concerned. friends of the governing council looks to have its first discussion on what an exit from stimulus looks like. there are more -- they are more split on whether the bank will lose its easing bias on interest rates. we thought this was a huge meeting. when girardi spoke to parliament, he seemed to be more tempered. >> there is a clear explanation here. the risks around growth are more balanced. this is where the comments were focused last weekend when he spoke. we think it is going to be dovish because it is going to

highlight the risks of inflation are still in the market. we have not seen sustained recovery. it is a trade-off between growth and inflation. is concernedhi about the level of inflation, it .ould come under pressure francine: growth in europe is so much stronger than the u.s. you sayingve angela merkel we have -- a policies. when will mario draghi rein it in? >> policy has been more focused on inflation for a long time. growth was actually ok. it was fear of deflation. logic, we think there

slight inflation that drives monetary policy. francine: here, the problems with the banks, a possible early election. >> it probably is the moment. a huge improvement, a fantastic spread. we are seeing a little pullback from that. you mentioned the potential election coming up. this is the key here. we're going beyond the election. make, it doesuld not carry anything like the same

risks. that french presidential in focus for the market. francine: do you prefer euro-dollar? >> we think it is overvalued. are too hawkish. fed.are underpricing the every measure we look at tells us the euro dollar should be moving to the downside. near-term models tell us we should be closer to 110. we would not be surprised to see a move towards 105, which is reversal of the trend we have seen.

francine: quickly on pounds? >> we see the potential for a moderate recovery. he gets back to positioning. the market is flat. it is going to be harder for the market to go long sterling. francine: thank you. surveillance" continues. tom keene joins me out of new york. on thursday, it is ecb day. this is bloomberg. ♪

francine: taylor before thursday's votes.

the terrorth of attack that claimed seven lives. oil gains after saudi arabia and the other arab nations cut diplomatic ties with qatar. president trump kicks off his so-called infrastructure week as jamie dimon tells us the situation is embarrassing. good morning. this is "bloomberg surveillance ." i'm francine lacqua in london. tom keene is in new york. we are try to figure out the implications of these terrorist attacks without losing the human component, but on markets and of course, on the general election, which happens three days from now. edwards,a and anna helping out this morning. francine: we will talk about the u.s. economy and those jobs figures from last friday. let's get straight to the bloomberg first word news. reporter: starting in the u.k.,

the political truce after the london terror attack's. theresa may and jeremy corbyn ramped up the rhetoric before thursday's election. they argue there is too much tolerance, calling for a series of new measures. jimmy korman criticized theresa may for cutting police budgets. less than 24 hours after the attack, a benefit concert for victims of the terrorist attack there. it was headlined by ariana grande. two weeks ago, she had just finished a concert a manchester when a bomb exploded, killing 22 people. saudi arabia isolated qa tar. the saudis, bahrain, the uae, and egypt have cut diplomatic ties with qatar. r isi arabia has said qata trying to undermine efforts

isolating iran. he istells nbc news unaware of a proposal from donald trump's son-in-law. putin says it is nonsense to say russia has collected compromising materials about mr. trump. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. i'm taylor riggs. this is bloomberg. jobs report moved the markets. the equities, up at highs. oil, now 48.02. next screen, if you would. 212 reallye dow, gets your attention. it has been a weaker dollar across the complex. if you look atnk

the pound, it is front and center, and so is oil. most of it, because of this gulf crisis. oil climbed because of this political spat. paired earlier losses in the wake of the terror attack in london. treasury yields are remaining low. very quickly onto the peso, because there is a lot going on with elections. 18.3672.an peso, tom: we have a comparison of where we are now with economic growth to the 1930's. modern economic data starts in 1947, which is over here. here is the best decade, the boom of the 1950's. then we have this 3.2% consistency here. francine, this is where he are

in the last 10 years, 1.3% average gdp. this shows a social shock of the moment. that is back to 1947. that is a jaw-dropping chart. francine: that is a great chart. let's turn back to london and the bridge attack. after a brief break in campaigning, a war of words between the prime minister and opposition leader, jeremy corbyn. speaking outside 10 downing street, the outline a plan for tackling extremism. >> while we have made significant progress in recent years, there is, to be frank, far too much tolerance of extremism in our country. so, we need to become far more robust in identifying it and stamping it out across the public sector and across society. that will require some difficult and often embarrassing conversations. francine: this morning the prime

minister had an emergency cobra meeting here in london. anna edwards is outside the house of parliament, but now, nejra joins us from the london bridge. first of all, an update. do we know the identity of the attackers, and how much do we know about the extra security? anna: we are still waiting for that information about the attackers. the police say they believe they know the identity of those three men, the perpetrators of the attack, but they have not yet released the information. we know that the metropolitan police have made 12 arrests. one of those people was released without being charged. this morning they have raided a further two properties in addition to the four that had already been searched. the investigation is ongoing and in terms of security, certainly stepped up all across london. areaat london bridge, the

is still cordoned off. that said, the station itself, london bridge station, is pretty much back to normal. francine: ne areajra, thank youo much. nejra at london bridge throughout the day. we are three days away from the u.k. general election. let's get to bloomberg's anna edwards, who is at westminster. how much do we know about this terror attack and how it could have changed the results on thursday? anna: we will have to wait for the latest polling data to get a sense of whether it changed anything. butaw the polls narrowing, it is unclear whether that had anything to do with terror attacks, or a policy u-turn around social care from the current government. we will wait to get more information there. it seems both sides, conservative and labor, have get growing, trying to tourity concerns to stick

the other party and make their party look better. the labour party has been suggesting that theresa may has a record. maybe she should have done more. ino pointing out, the cuts policing we saw under the last administration. francine: anna, i read john schindler in "the observer" yesterday on the size, the scop e, the scale of this disaster. what does "enough is enough" mean to londoners? when the prime minister says, "enough is enough," translate that. anna: it is a tricky one, tom. she went on to set our four policy areas she wanted to focus on. she discussed what she wants to see. the themes she picked up on where already being worked on.

tackling islamic extremism in the community, this is something that is in the process of being done, has been done, maybe it needs to be done more, but this is not a new term. and shewith a baroness, was suggesting that a lot of that did seem to be things already in the works, but were not necessarily radically new. we have to wait and see what that means. we also have to wait and see what she meant by "difficult and embarrassing conversations." some people are talking about hostedee speech ies posted on campuses in this country. francine: anna, thank you so much. joining us as our guest host, the investment chief executive officer. thank you for coming in,. the pound has had a little bit

of an impact, related to services. markets seem to take attacks like this in stride. >> well, markets look at the economic implications and if you it, london remains one of the safest capitals in the world. and a man in a van with three psychopaths will not make a difference and assist the of 50 million people. -- difference in a city with 50 million people. politically, we have the election coming up. francine: does this change the election? the economy has been part of this election cycle. brexit has been part of it. security has been part of it. does this latest terror attack have any way of changing the election result? >> idle think it will have a big impact. clearly, the message of strong and stable after being the home

office secretary for six years, which we have on the continent in europe. in a way, it is kind of ridiculous. and the key debate in particular beenerrorist attacks have carried out by u.k. citizens, carrying u.k. passports, even the home office secretary for six years. key result, why is that the issue, when all of our problems are homegrown with u.k. nationals born here? they have their own passports. if you don't know them, what have you been doing for the last six years? which is what we have seen the two sides arguing. theresa may saying jeremy corbyn has supporting groups, such as hezbollah. jeremy corbyn says, you have

been in charge for six years. why have you not done more about this? we have the latest polls out. i would take it with a pinch of salt. the latest poll has the conservatives winning with an 11 point lead over labour. this is the first pull that have come out since the attack on london bridge since saturday. tom: coming up, an exceptionally important note, and a goldman sachs adjustment, looking for a rate increase in december of this year. all of this off the balance discussion. we talk about central banks, rates, and balance sheets, next. ♪ francine: this is "bloomberg

surveillance." let's get the bloomberg business flash. in france, plans to raise $1 billion in anlet' ipo in the car leasing subsidiary, giving money for potential acquisitions. 20% ofplans to sell the unit, but will remain the main stakeholder. according to people with knowledge of the matter, the group has been in preliminary discussions with china guodian. shenhua is china's largest coal miner. that is your bloomberg business flash. tom: thank you. to win the lawrence klein the award is a big deal in economics. to do it twice is flat-out unprecedented. joins us now.

he is goldman sachs' chief economist. wonderful to have you with us. you made a fed adjustment on friday and you linked the balance sheet debate to the interest rate debate. how do you link those two together? jan: we did make a change on friday. we basically pulled forward our expectations for when the balance sheet runoff starts. we had that in december previously and we now have that in september. we also think that the meeting at which they announce balance sheet adjustment is one where they forgo the hike. so, we pushed the hike from september to december. we do expect a hike in june, of course. we made a change to the second half there. tom: a bit off the plot, jan. is president trump dampening the economy? this was in the sitewe made a cd

zeitgist this weekend. is it dampening the american economy? jan: i don't see it in the data, necessarily, but i do think the prospects for a fiscal boost in 2018 have diminished somewhat. we still expect a moderate tax cut because we think the republicans in congress will want to pass something to take to the voters in the midterm election. but i think the various political difficulties that president trump has had has probably made it a bit more difficult to support something through, and basically corral reluctant lawmakers to pass something. it is very hard to say at this point. we certainly don't think fiscal legislation is imminent in any case. we are probably talking early 2018, maybe very late 2017.

in terms of the data, i am not really seeing that in the numbers. francine: jan, thank you for joining us because i know it is the goldman sachs macroeconomic conference. talk to me a little bit about how the fed can actually tighten financial conditions without hiking interest rates. jan: well, i think the short answer is, it is going to be difficult and they will have to hike interest rates and we think probably by more than what is priced in the markets. balance sheet adjustment is a tool. think that if you very slowly let the balance sheet runoff overtime in a well signaled way that that will have a large effect, but there should be some impact from it. i'm not sure it will be enough. so, especially as we get into

fed and beyond, i think the will have to do more on the interest rate side than the very limited amount that is currently priced in. francine: what will happen to treasuries from here? jan: i think treasury yields are likely to rise rapidly over time. i have a stronger view in terms of intermediate part of the curve, the part that is most sensitive to two to three year forward expectations for monetary policy than i do on the longer and. the longer end tends to be driven by international factors and changes within the premium that are not as directly tied to the outlook for the economy and monetary policy. my broad view is we should get higher rates overtime as interest rates normalize and the economy makes some forward cyclical headway. and jan, you cut your teeth

made a claim under bille du gley, watching what the american consumer actually does. what is the american consumer doing in 2017? jan: mortgage equity withdrawal has not been a major issue in the last decade. i think it was important before the crisis, basically liquefying some of the capital gains through the housing market and using some of that for consumer spending. that has not been a major issue recently. i think it has been more of an consumeriven of spending in the last few years. and a couple years ago with the big drop in energy prices, we had a large increase in real income. that gave you consumer spending growth of 3% in real terms for a couple years. i think we are now behind that and the reason why 2017 consumer

spending is no longer as strong as it was in the prior couple of years is mainly this big increase in real income was a one-off. we are not pessimistic about consumer spending, but we do 2%,k 2%, for a little over is a little bit more realistic than 3%. jan, thank you for joining us. coming up in the next hour, we speak with stephen king, hsbc's senior economic adviser. this is bloomberg. ♪ built a major

airport in 20 years. i am told it takes 10 years to get the permit to build an average bridge. this is the first in new york city in 50 years. i just came from hong kong, it is embarrassing. america should get back to building, the permitting, the rules, the requirements. we have got to get back to the can do attitude for infrastructure. it is our country and we are getting behind, and we shouldn't. francine: that is jamie dimon discussing the need for an infrastructure overhaul in the u.s. it is a big week stateside is president trump is ready to reveal details of the $1 trillion infrastructure plant.

-- infrastructure plan. a very simple bet is whether the fed can raise rates, whether banks can get a bit of breathing room. u.s., a lot in the is priced in. trump has promised the dream. infrastructure, animal spirit. hikeality, the fed will because of inflation pressure. think the numbers will have to adapt. of european review and international investors, he raises more doubts than answers. francine: does that mean we will get a correction in equities? jan: i think you are more

likely to get a correction in equities, also because the vast majority of investors are overweight ont h the u.s. dollar. thiswe will continue conversation on banking on "bloomberg daybreak" this monday, a conversation with lawrence summers of harvard. professor summers, he is looking at the global community and the trumpian arena. he has a blistering op-ed in the "washington post" today. this is bloomberg. ♪

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delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. francine: this is "bloomberg surveillance." news.get to first word

>> in south korea, a new president is proposing a plan to increase jobs. will be used to create 86,000 jobs. the plan may face opposition in parliament. just 40% of the seats. the u.s. military has begun an operation to drive islamic state from a stronghold in syria. the u.s. has been arming syrian kurds for the opposition. turkey considers those forces to be terrorist. qatar says the decision by saudi arabia to cut diplomatic relations is baseless and without justification. suspending air and sea travel links.

rex tillerson was asked about the split while traveling to australia. >> we would encourage the parties to sit down together and address these differences. any role we can play in terms of helping them it is important the gcc remain unified. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts, this is bloomberg. to oure: let's get speaker from dubai. off we heard about this cut , it has had a huge impact on qatar's stocks and airlines.

>> this is something we have never seen before, the veracity of the reaction from saudi arabia. line, we are not convinced about you towing the line. not lived upar has to their part of the conversation. they will toward efforts to negatively impact the economy. blockingike germany air, sea, and land travel. there has never been something like this before. this is not a diplomatic crisis. disaster.diplomatic it creates a fisher between monarchies.

that is the issue at stake. it will be difficult to heal those wounds, which is what rex tillerson was pointing out. what does it mean for oil? it is the biggest producer of liquefied natural gas. serious are implications on the energy front. questions are being raised in terms of compliance. leavingl risk of qatar opec could impact oil places. the human toll, this is important to underline. citizens have to leave within the next 14 days. of food from a lot the united arab emirates.

is an important market for these companies and for creating and sustaining those business so this is a serious setback. i like your idea of germany and italy. the difference is, families are involved. tell me the distinction and the tensions. going back to the middle of the 18th century. what is the animosity between these two royal family's? families? been able to patch things up over the last few decades.

now, saudi arabia felt they needed to establish themselves as the center of power. with the united states coming off of the back of a landmark visit with donald trump, they .elt they could take this step the ramifications, we are seeing across asset classes. tom: thank you. our next guest has traveled to the persian guests many times. -- howcut or perceived is qatar perceived in the london community? >> as a key investor. being one of the largest investors in the u.k. they have been supportive. they are seen positively.

it is local fights, family fights, and we are just watching it. francine: they have 10% of an .irline and big stakes deutsche bank just under 9%. of an impacte more on the price of oil? it won't necessarily filter through inflation. >> the reality, donald trump visited. it has been, in a way, destabilizing. we will have to go through an adjustment phase. biggest gcc collapse

is not reallythat what we want. ideally, you have more cooperation. you never know where they lead to. francine: it has become so unpredictable. china, theng of south seas, all of that asia area. >> a markets have been overstimulating some of the geopolitical events. last year, the community was convinced angela merkel was done . she is still the strongest leader in europe. the market, don't

,anic on the short term understand the implication, see what the economy does. they had to end up with more stimulus. in a way, like the stimulus. youkeep promising stuff cannot deliver, you will have to open up the check book. have lown markets volatility has to do with the $14 trillion being printed by central banks. i was in favor of quantitative easing at the beginning of the crisis. the banks recap was a must. now, we are probably keeping the

.ad along we set up our self eventually for a big shock. tom: thank you. we are going to come back and speak about banking in europe and the united states. up, david and i will have a conversation with richard haass. it is a good time to catch up with him. we will do that in the 8:00 air -- the 8:00 hour. ♪

"bloomberg surveillance." we have to talk about the italian yield. services, this by staying in positive territory, comes as a yield. back. when you look at the european economy as a whole, it seems like growth has taken hold. risk remains. >> the european economy has been stronger than people expected. if you look at pmi, we are at an all-time high. in the unknown remains a bit of a political risk.

italy is the last --. the market is already taking protection on it. majority is --. what could happen, because of vote, they are going to have a grand coalition because they won't have a choice. you might see a situation like france, there could be more upside. francine: give me a sense of where this happened. this is my mario draghi says i will do whatever it takes. 1.9.pread is

the ecb is standing firm. is there a danger they normalized too soon? take the 2%. what does it mean? it means the euro, the italian euro is about 14% overvalued via the german euro. consider an italian exit will probably lower the lira by giving a 50% possibility of leaving the euro within the next 10 years. that seems way too high. the 2% is very rich. in can see the blips october, november. political action went back up. 35 to 40% tells me

probability italy leaving the euro, that seems wrong. tom: the president of the united states going after germany, they are being evil, being bad to the united states. what would the president say about italy's trade? being exported into the economy should over stimulate their domestic consumption. top sixmains one of the nations.global export we do import a lot. we keep fiscal primary surplus because we have a high public debt.

is, if yout, my view make something good that people want to buy, that is great. donald trump rhetoric will backfire. apple, google, amazon, facebook. they pay zero taxes in europe. they pay 40% tax rate in the u.s.. they pay zero here. this will end up with us and ang a proper tax rule u.s. company ends up being her. tom: what should we watch for mr. draghi this june? what are you going to pay attention to? what about the ecb? >> if i were the ecb, i would watch how macron and merkel --.ape european

we have brexit. it is unfortunate the u.k. decided to leave. is a game election changer. it means france is back at the table for constitutional changes to further advance the european integration. they have already mentioned the european finance minister. as a result, the ecb is probably going to watch this development rein int to quantitative easing. we started five years behind the u.s.. we have time to let qe back off. francine: thank you. customer, a bloomberg you can watch us using tv . you can look at some of the cool graphics tom has put together, askdata check, and if you

-- and you can ask questions directly to tom and i. ♪

time infor the first years, apple will use its conference to show off hardware and software. it begins today in san jose. familiar to people with the plans, apple is ipads ando unveil laptops. jane and that -- jamie dimon told bloomberg the country is on track for chandler -- plans to change the financial ipads and laptops. system. >> they have made progress in financial reforms. taylor: jpmorgan hopes to get corporate bond licenses in china. a bank is racing to find a buyer. it has had that real estate

loans and is running out of time to repair its balance sheet. bank will discuss options with the european central banks tomorrow. is your bloomberg business flash. to catchs a good time up on the world of banking. to catch he joins us now on banking. banks, thehe big same idea, where are the synergies in europe. the waiting to see combination within european banking. where is it? economyyou have a real loan crisis, overexposure to real estate for the last decade. have the range of

three to 4 billion euro. they have the surtax assets, valuable back shields. european banks are worth about thattimes -- profit there franchise could be worth 10 billion to the domestic inquirer. eventually, for popular, you are likely to find the domestic solution. tores will probably be close zero. as a result, you would be able to see consolidation. what is your favorite financial stocks so far? >> one of our largest holdings.

they have sold half of the nonperforming notes, exactly what popular has not done. it still trades tangible. it will be part of the pan europe consolidation. is a valuable infrastructure. francine: what is your least favorite? >> our least favorite banks in europe today are the overvalued regional banks, mainly the in these perceived safe countries. we are adding protection in the u.k., where the all-time high consumer debt on credit cards,

housing, some of the new entrance banks have been running too much risk. thinking brexit will be a hard brexit. is we are getting breaking news from theresa may. she is saying national and terror threat levels remain at severe. you can see the podium outside number 10, these are not live pictures. in the wake of the manchester attacks, it was raised to critical and is now back down to severe. is enough. where are we on enough is enough

or are we going to learn about that from the prime minister's questions? fromine: we are three days the election. the concern is that jeremy corbyn doesn't have the leadership, also because of possible ties with groups such as hezbollah. this will boil down to the crux of the election on thursday. tom: we hope to hear from the prime minister after a terror attack. we will have more on that. hour, stephen king out with a wonderful new book. ♪

tom: there are too many again's.

the islamic state claims responsibility and trump criticizes the mayor of london. the gulf states say enough is enough. will janet yellen adapt and adjust on to june 14? this is "bloomberg surveillance." hear from the prime minister of the united kingdom. we need to look at the terror attacks, the impact this will have on the tone of the conversation going into the election on june 8. we need to talk about the saudi led alliance isolating qatar.

for oil andcations qatari stocks. in the u.k., prime minister, there is a political truth. corbyn may and a jeremy ground out the rhetoric. may called for a series of new measures. corbyn criticized her for cutting the budget. came together for a benefit concert for victims in manchester. she finished a concert in manchester when a bomb exploded, killing 22 people. the saudi's, ball rein, and

egypt have cut ties with qatar. they are suspending air and sea travel. vladimir putin is downplaying reports of russian interference in u.s. politics. he says he is unaware of a proposal from jared kushner to set up a back channel from the incoming administration and putin. global news, 24 hours a day, in morei journalists than 120 countries. tom: let's do a data check. a balanced today. futures are green. the yield is up two base points. 4782 shows weaker oil.

up weea of the dow, up, go. churningthe dollar this morning. jumping after the alliance cut diplomatic ties. this has a some of the slides. i am looking at 10 year yields. the rolling of pri was ahead in the governor's election for the key states of the election. in the u.k., the prime minister has been sharing an emergency cobra meeting. that is the same place where she launched her campaign to be conservative leader back last year.

joanna edwards -- anna edwards is outside -- in washington. >> we are waiting for the latest polls. a clear picture, we have to wait for a number of polling. quite a big margin. the polls started to narrow after the manchester attack. if it was any kind of judgment 's record oray because of a change in policy, a u-turn on social care policy. the polls toit for get more of a clue to see if voters' changed

opinions. a poll last month said 44% would trust may to protect them from threats. only 14% said corbyn. the what is the goal of prime minister in her comments this morning? >> certainly the bar has been set quite a hide. some new initiatives and new policy. she went to set out the four she was set to focus on. all of these things, i think she has talked about before. spoke to charles. he said we need detail on what that means.

tom: we wanted to bring you an expert on terror. -- neil, lend wonderful to have you with us. tax, how do you change your thinking? >> >> when you are predicting the likelihood of a terrorist attack, a previous terrorist attack is a large influence. it gives a psychological kick

and you see that clearly in the attack we have just seen. one of the issues we have seen, manchester, very complicated. the attack was very crude and thrown together. my guess would be a lack of preparation. that psychological kick encouraging action from others after the successful action of one terrorist action. interesting is how long is the gap until the next cluster that may occur. the i read the article in observer yesterday. are the public forces, are they too many badith people? >> we don't know what threat is or what threat looks like.

we needed more intelligence, surveillance, invasion of privacy. the issue is the move we have seen over the past five to 10 years is crude and more simple. attacks that require little planning can be decided on the drop of a hat. risk.akes predicting high tom: we saw the image there earlier. we have the image of an

outstanding look for 2017. this is international relations with a huge dose of wonderful. i did not mean to pull it away like that. new book. it you talk about islamic state and like-minded people. modern mediacing into like mindedness. >> the west has assumed -- it is rather colonial. it seems to be universal values. at the history of the world and the different

civilizations, you have big civilizations going through. the leader of labor is speaking. let's have a listen. >> for those people that imagine these terrorist attacks are going to deter us from exercising our democratic right to have our election to decide will carryernment on, they are wrong. democracy will prevail. made a speech about this last night and about the issues surrounding it. this election is about many things. it is about recognizing those

people who have lost loved ones. if you could pause for a few moments for those who died in manchester, and a huge thank you so muchervices that did to try and save life. thank you to all of them. they stand by us every day of the year. we must stand by them at the same time. thank you. this election is only a few .ours away we have been traveling the whole

country. francine: that is jeremy corbyn. we are seeing jeremy corbyn continue with the campaign. .e had a brief moment of truth it are expecting the prime --ister to talk in front of where she decided to go for leadership of the conservative party just under eight months ago. , congratulations on your book, "grave new world." will it shape the political parties of the u.k.? attacks in three three months. it is extraordinary. >> it is. i don't have an easy answer for you. democracy is about debate.

it is about ending up with a general election that reflects the will of the people. is something all parties have bought into over the course of the next few days. think it is right the debate should continue. what happens thereafter depends on the result of the general election. polls have narrowed quite considerably. it is going to be interesting to see what happens thursday. this is real gdp back to 1947. here is 3.2% american gdp. here is the boom in the 50's and here is where we are now. it is extraordinary the .ecade-long shortfall

>> it has been remarkable. have seen before the global financial crisis is a sense that western economies are not doing as well as they had been doing. there are disco aspects to it. one is the increase on income and equality that has been associated with this. you have the narrative of globalization and connections across the world has somehow soured to a degree. who has the commanding heights of capitalism? >> technology has created a winner takes all approach. be -- you become a millionaire or billionaire overnight. is also the case when you

look at workers in the states in europe, many have seen little in the way of a pay increase. tom: a wonderful book. we will get a morning briefing from kevin cirilli as we await comments from the prime minister. i heard a lack of information this weekend about mr. comey. why? administration is trying to focus on infrastructure. trump will, as these hearings alone, officials testify in the house and senate, starting on wednesday. the administration is trying to pin it on infrastructure. there is no plan. let me go to lawrence summers must-read. he says -- where i went a week

, and we finally saw it from this will not go away. witnessed more human betterment than any time. and cohn have advanced a theory of international relations not online the one that animated the british and french ever sigh at the end of world war i. the arena? >> the u.s. senate intelligence .ommittee james comey a set to testify on thursday. this is a busy week in terms of the ability to move past the pressure probe. it will be hard for them to do so because of the caliber of

officials who will be testifying beginning wednesday. there are a series of questions they have not been able to move beyond. this comes at a time the put thet is trying to focus back on his agenda. francine: thank you. let's go to central london, where theresa may has started speaking. >> five years will define the country for generations to come. i called this election, because as we face the start of the negotiations, i believe it would be essential for the british government to be in the strongest possible position going into those talks. that remains the most critical issue in this campaign. when this campaign started, we

could never have predicted the tragic turn of events that would take. we could never have imagined the appalling depravity that led a killer to target innocent men, women, and children. we have envisioned the on -- over the evening. let us can tune you to think of the brave men and women who continue to deal with the aftermath, many who will witness things no one will have to's -- no one should have to see. while it is right to paul's to , today, i wantt

to return to the choice people face in three days time and to the question of leadership. that is what this election is about. it is about which leader and which team people trust. about which leader and which team will deliver economic security. the question of a leadership has been at the heart of this campaign. it is crucial we get the answer right. the ability to say the courageous things and do the difficult things. and address great

challenges, not to pretend they do not exist. the strength to be straight with people. the ability to get the job done. leadership means to me. it is that leadership i offer the british people at this election. we need the strong leadership now more than ever. in two weeks, we embark on the most difficult set of negotiations the country has ever known. every thing we want as a country depends on getting these negotiations correct. each and everyone depends on having the strongest possible hand as we enter those negotiations in the order to get

the best brexit deal. ofwe fail, the consequences ordinary working people will be dire. if we seize the opportunities ahead of us, are great. i have negotiated for britain and europe. the best place to start is to be clear about where you stand and what you want. we do not seekt to be half in and half out of the eu, the british people made their choice. it would the a scandal to do anything other than respect their decision. we will leave the european union and take control of our money, our borders, and our laws. money, so we no longer pay huge sums to the european every year, but spend it on priorities

here at home. to reduce the inequalities that exist within and between the four nations of our united kingdom. our borders. while we continue to attract the brightest and the best -- francine: that is theresa may speaking from central london. you can follow the prime summers talks about 75 years. it talk about the new imperium. it is basically the u.s., which set the rules and sponsors the institutions we know about in terms of the rules of the game. there are new actors in this game pushing their own institutions. institutionsting

that are like a 21st century version of the institutions you think about. you think about the asian infrastructure bank response to the initiative's the chinese have. they want to pick up the range of globalization. tom: help us with the 30's word bloc? back to the 1930's? >> i don't think it is the right comparison to make. most obvious one is pretty first .orld war i the rising power was germany. today, it is china. how do you make room for the rising power to succeed and have

space to expand and keep the existing power comfortable? that has been difficult to achieve. could be anship difficult one. tom: you wonder about moments .efore world war i as well candidates and england. the election is on thursday. we will have coverage on that. today, my morning must-read. trump's arena. a conversation with lawrence summers. read his article. this is bloomberg. ♪

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francine: this is "bloomberg surveillance." we have been talking about oil all lot. it has given up a lot of the gains. it had gained after the saudi alliance cut ties with qatar. it is closing off access to the golf country. king. back with stephen this is significant. what do you make of the fact that it is giving up a lot of the gains today? saudi is trying to reposition

itself as a country that can be trusted by the west. is, a break in the relationship within countries with regards to oil. somehow it is undermined by this. we are still in the early days to make predictions of that kind. francine: does it feed through inflation or does inflation stay oile into a spike in the prices? >> the kind of oil shocks we had in 1973 and 1979 don't have the consequence as we had back then. it is partly because aging inflation. hate

partly because technology makes sure wages cannot rise quickly. tom: you look at oil, how it herein the year -- ties in . oil, butd dynamic on

is there one on the greater global economy? >> they are not delivering the outcome people hoped. the productivity has been weak, particularly in the states north of europe. look at the report last friday. the unemployment rate is low. you think of that as a sign of economic strength. francine: thank you. we will be back with stephen king. let's get to first word news. taylor: starting an london, theresa may will seek new powers to root out terrorism. the u.k. prepares for thursday's election. it will require difficult and embarrassing conversation. pointed to her cuts and police budgets and protect --. cannot putin says he is unaware of a proposal from trump's son-in-law to set up a bag channel between the incoming administration and the kremlin.

trump is kicking off a campaign for his infrastructure plan. later in the week, we will go to ohio to put $1 trillion in two roads and other public facilities. this is bloomberg. aware is waldo? we know the cliche. staff?s it would be good to talk to andone politically attached who knows how to build, manage a staff. mr. haynes joins us on the

goings on of the beltway. you helped write --. staff.ped create where is the staff in 2017 washington to create wall? >> thank you. the staff is in waiting and is caught in what appears to be warfare within the white house. the president has been slow to nominate those who can be confirmed by the senate and who fill out the appointed staff that does not need senate .onfirmation that is a looming problem

getting larger by the day. tom: that is the light at the end of the tunnel. how is this going to get fixed? it gets fixed because the cabinet secretaries, those in the most important post. people like secretary mnuchin , they say we are engaged. we are engaged in a process to slim down and streamline government departments. at the same time, we will need political appointees. we need to get on that right away. my guess is there is the nonsense it confirmed lower go first, almost by

default, confirming a senate nominee takes a fair amount of time. they have worked themselves into a position where they can deal, but a great time is tight. they will need to do both of those things. francine: talk to me about the .audi led alliance does that make it difficult for the trump administration? it is just 10 days after the saudi.nt has shown up in does that make it difficult for presidents in the middle east militarily? >> they are proceeding carefully on the koran sanctions issue, korang a lot of -- on the issue,iran sanctions

they are proceeding carefully on the resets. i don't look for precipitous actions to happen here. i see a collaborative process between the administration and congress on this and that is generally good news. tom: thank you. we continue with mr. king. i am reading it. day ina chapter every the food court with my cheese it's. will be onrs daybreak, talking about a post-rational president. terry was just talking about the irrationality of no staff. how do we get to a post-rational

presidency or united kingdom? >> there is a sense the narrative has changed. they engage with the rest of the world and becoming disengaged with the rest of the world. has the desire to say we can do better in the u.k., almost like a nostalgia trip. u.s., with of the the rise of china and other andrpowers in the world, has to cut its costs in a different way. is theer issue here forgotten men and women in america. has a point. people have not seen income gains they have

seen in the last or four years. come through has and said globalization is not working for everyone. francine: thank you. stephen king stays with us. in the meantime, there are elections in the u.k.. we are hearing from theresa may, talking, saying we cannot deny the threat of islamic extremists. theresa may is accusing jeremy corbyn of hiding and denying dues on the ira. we will have more on this contest. we are three days away from the election. this is bloomberg. ♪

francine: this is "bloomberg surveillance." coming up, bloomberg daybreak with david erro.and jonathan fa summers.e larry he is concerned about what it will mean if the u.s. abandons the coalition we have had since world war ii. sorensonalk with arnie , asked cam, as a global ceo, how does he address all of the rings that are happening. going to lead into another ceo that you have on.

king is with us. joining us, richard solomon. you are moving on in august. you have a hotel. a fabulous hotel. running bentleys anywhere you look. how do you adapt to the horror going on in london. your head of security goes -- we need to do this. it is an unfortunate fact of life we have these events. it is something we have to deal with. it is not new. and has been around for a long time. about head of security, we have an experienced security and risk team.

we have clear procedures in terms of how we operate in different risk environments. will know and will practice what you have to do. that is part of our life today as a global hotel operator. hotels are trying to get the booking process back from the internet people. how are you going to do that? how are you going to take the world back from the booking.coms? >> the vast majority of our booking is direct already. 's is a smallta part of our business. it is perfectly -- perfectly

acceptable. , we havety travels nearly 100 million enrolled members. they want to book direct. richercreate a experience. it is about channel management. it puts you in a good position. francine: do you believe terror attacks will impact tourism in london like they did in the wake ?f the paris attacks >> there is a risk of that. are we have seen is people resilient. they want to carry on their lives. if they believe security forces peopletop of things,

carry on traveling. you get a short-term blip, but it comes back quickly. francine: we are seeing the pound getting a bit of technical support. have you seen an increase in demand for your hotel room's sense of brexit happened because the pound was weaker? >> the u.k. has been strong and london. at the margin, the strong founders help us in the u.k.. francine: you are a huge hotel company. you have many brands. what is doing well at the moment? >> our biggest markets are the u.s. and greater china.

it is important for us to be in we are shortly going to be announcing a new mainstream brand. tom: i want you to bring cigars back. own the iconic electronic hotels in washington. an upstart down the street opened a hotel in a post office. how do you tackle the bar of a trump hotel? kevin is there five nights a week. eu will be surprised if i knew the strategy we are putting

on the ground. it comes back to what you were talking about. strong brand, strong loyalty program. many customers, when they are could be goingey to a holiday resort or continental resort. it comes from having a good portfolio brand, a program that adds value. tom: you have to get the president to bring back cuban cigars. lobby.ve this gorgeous thank you. i am on tv . you can look at our guests. picked thate, who out?

chart and to a great the discussion with stephen king about "grave new world." tv , try it. ♪

in china, jpmorgan ceo sounded off on topics from infrastructure to climate change. he spoke to stephen engle's in beijing. it is embarrassing. america should get back to building and constructing. we have to get back a can't-do attitude. the u.s. economy has been tried -- been chugging along with a weak recovery. we are in favor of trying to control carbon. another reporter made the argument that it is just to show collaborating is a good thing

between nations. the trump administration felt differently, but we wish they had stayed in. taylor: china has made progress on market reform. that is your bloomberg business flash. tom: we are going to make an exception here. ar single best chart today is chart i showed you at the beginning of the hour. u.s. real gdp over 60 years, showing where we are now. extraordinary, 3.2 across these decades. stephen king, this is extraordinary. is it about the dynamics of capital, labor, or something we don't know? robert kaplan said we don't know technology. productivity has not been

helped by the persistence of low interest rates and qe. it is more difficult when you start up to come into a particular industry. francine: if we start normalizing, you think we normalize asap because we are behind the curve, but as soon as they get normalized, it would get -- it would create shocks. >> growth is already low. the last thing the central banks want to have is a recession around the corner, which they are blamed for.

it is a tricky issue. tom: thank you. we appreciate it. jobs report, some of them we saw, weak dollar. dollar-yen was 109. sterling back up above 120. the dollar index churning. is peso down to the basic idea of support? now, prime minister may still speaking in the united kingdom. lawrence summers, look for that coming up. that is not pollution.

york.s the fog of new ♪

♪ jonathan: the city of london gets back to work after a weekend terror attack killed seven people just days before the u.k. vote in a snap election. nations including saudi arabia cut off economic ties with qatar. jpmorgan chief sits down with bloomberg. he says u.s. infrastructure is embarrassing and damages growth. good morning. i'm jonathan ferro, live from london alongside david westin and alix steel in new york. market action this morning. futures a little bit firmer. we are up .1%.

higher by two basis points. euro-dollar softer. a lot of solid guests coming up. david: