anna: the fed hikes rates and send out plans for shrinking it balance sheet. >> and light of the softer reasons -- recent inflation readings, the committee is monitoring inflation development closely. details delivered at deutsche bank. the lender set to announce a new structure for its corporate and investment banking division. anna: u.k. chancellor philip hammond is set to make the case may fights toesa stay in office. manus: the u.s. investigation into russian election meddling

is set to widen, looking into whether the president's limited -- attempted to slow the michael flynn probe. ♪ anna: a very warm welcome to "bloomberg daybreak: europe." our flagship morning show here in the city of london. --us: she finds the story the fed told us what they're going to do incrementally about the balance sheet but what is the dollar more focused on? it's down 6% this year. it's focused on this, the economic surprise index in the united states of america is careering towards zero. we have not seen that since the president of the united states was elected, and there is your dollar index, giving it all

back. what is the dollar really focused on? anna: focused in the longer term around this. the dollara boost of around what the fed did but that was only after it sold off inflation earlier in the day. that astalk more about we go through the program. there are stony -- some another stories we want to get to as well. the msci he's in the red, down .8%. a lot of that has to do with what were seeing in oil prices. oilprice of a barrel of below $40 abit but barrel. it was up by 3.7% in the session yesterday, the lowest levels since november. as concerns intensify as to whether u.s. production will

offset it. manus: the 8% tells the broader story. let's have a look. looking at s&p futures as well. the s&p is a little lower. bloomberg intelligence saying we are impressed by the aggressiveness of the fed pause intentions. we will talk more about that in terms of balance sheet reduction. this is the aussie dollar and new zealand dollar. australia just keeps on making those jobs. unemployment drops to a four-year low in australia and there's a rebound in full-time positions. if you were short aussie in any way, you're getting lynched. see some of the features in the u.s. coming up a little bit more after we got use

of the probing of whether the -- news of the president and whether he's was attempting to obstruct justice. maurice leave you will join us at 6:30 a.m. london time. juliette saly is standing by with your first word news. a special counsel investigating russia's interference in the 2016 election will examine whether donald trump sought to slow the investigation into former national security adviser michael flynn. according to three people familiar with the inquiry, robert mueller plans to interview to top intelligence officials over the matter. the move expands the scope of the investigation. u.s. president donald trump and stevefe have visited scalise in the hospital after he and four others were wounded in a shooting yesterday. the third-highest rank republicans suffered fractured

bones, internal organ injuries and severe bleeding after being shot in the hip. he remains in critical condition after the attack at a congressional baseball practice in alexandria virginia, near the nation's capital. in the u.k., fire crews have worked through the night to doubt the deadly blaze that killed at least 12 people. officials have warned that the number of for tallies will almost certainly rise. the fire also injured 74 others and left an unknown number missing. cause of the blaze remains unknown. into.k. has slipped 'slitical limbo as theresa may talks drag on. calls are mounting for cross party consensus on brexit. the slow progress of talks will further delay the formal opening of the new session of parliament. apparently it is scheduled for monday. the chancellor of the exchequer philip hammond will make the

case for a new path to brexit today. he will give his annual address to the city of london to push for so-called pragmatic brexit. it will come in his first public appearance-- public since the election results. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it's a been a little bit of a risk off move in asia after we had the fed hike. a lot of the energy players dragging the region in light of the australian share market and the hang seng which is off by 1% . the nikkei index is weaker to the tune of about .3%. the taiex is one of the few markets in the green. digital sought a court order in california to try to sale -- we've heard

that private equity firms are interested in trying to buy that unit. goldman sachs is come through saying alibaba risks are not as extreme it's what we've seen in the u.s. tech stocks. bellamy australia is looking quite green, up by 12%. after back online completing its institutional offer. manus was talking about the australian jobs numbers earlier. it was once again a surprise, but check out how many full-time jobs were created in the month of may. we see that reflected on this chart. overall, 42,000 jobs were created in the economy last month, 52.1 thousand these were full-time. those will start to show strong momentum coming

.ack into the economy the aussie dollar spiking on the back of this. anna: we were looking at the aussie against the kiwi. -- new details's out of deutsche bank in the last hour or so. a new structure for its corporate and banking division which includes creating a separate business for its capital market corporations. manus: let's get into the details. i reported joins us now the colors finance for bloomberg. this would bring corporate and investment banking together. it's about more efficient use of capital. 60 got percent will go to the corporate side. step inis just the next

the restructuring that was announced earlier this year. the bank tried to do a few things to streamline some of the different businesses and is now basically putting its corporate -- to overseeking the effort. the responsibility is to oversee some of the business lines including corporate finance, s.obal market these are crucial businesses for the bank. i think that's part of their it moreo try to make efficient and streamline the managerial structures. i suppose that's what they're trying to achieve. whether they will find it effective or not remains to be

seen, but for now it appears it's a long expected plan to overhaul the bank top to bottom. anna: thank you very much, matt scully with that update. fed. return to the manus: janet yellen is pressing ahead with plans to normalize monetary policy and raise rate. she news coverage yesterday played down softening price pressures and showed confidence that the fed could hit its 2% inflation target. data maping inflation move the markets, but it didn't move the fed. policymakers raise their benchmark interest rate once again and say they remain on a path to have another rate manyase this year and as

as three next your. while the statement suggest policymakers are watching closely the decline in inflation, chair janet yellen said they expect to raise rates, because it is prudent. >> even with the moderation of newlevels needed to provide entrants in the labor market, we do have the strengthening policy, with accommodative, all that we are doing in raising rates is moving -- removing a bit of accommodation heading toward a neutral pace. appropriate, were not moving so aggressively as to put a brake on continued improvement in the labor market. >> the fed released a plan for winding down its $4.5 trillion balance sheet capping investments over a 12 months. and continuing to do it until

the balance sheet reaches and unspecified level that will allow it to decline in a gradual and predictable manner. the committee will continue to use the balance sheet if necessary in the future in the event of another recession. stubbsoining us is david from j.p. morgan asset management. janet yellen, so much to talk about from this press conference and what did or didn't happen in markets. they are data dependent, but we're talk to ignore some this data because it is a bit noisy. david: they are in a difficult situation where historically you'd expect inflation pressures to ramp up. withdraw,to gradually the key word is prudent there. at the same time you have some

unusual things going on in the global economy and the u.s. economy which is dragging inflation down. a couple of key things in the p intion data, core cpi august of last year and is down to 0.6. so there's nothing to see here for the moment. bloomberg intelligence, we talked about the balance sheet. they given some caps in terms of what they're doing but i love going to be like watching paint dry. what did you interpret in terms of the cap's? >> it's quite ambitious, they want to wrap it up by a further $10 billion to get to a point where in theory they will be

allowing $50 billion a month to roll law, if it is rolling off in that month because the actual schedule of three investments is in the balance sheets. pre-committing to that is quite ambitious. are fully cap's filled, that gives $1 trillion off the balance sheet by 2019. it's fairly aggressive. where is the target for the balance sheet? phrase, we wonderful don't really know, but we are going to learn. it will be lower than it is now. started, it will be nice to see a staging point. the main power of qe3 was its unlimited nature.

if you don't tell us where you going to stop, the part of the market that might worry is still waiting for details. anna: what about the start time? do we know that yet? we're were looking for an announcement in september on the wind down. some people now say we get the start time for the wind down in september and then we get the next rate move in december. david: that's where i am right now. manus: he's off like a racehorse. this is obviously pointing to the fact that maybe you should focus your tightening on the middle and long end of some of thed allows dollars to roll law there instead of hiking the short rate.

there was another line in mayerday's story that she go for a bit of a path in september. it looks like it will be balance sheet reduction and rate hikes in syncopation. has the market got the ability to do that? david: the market is not priced for it. i'm very skeptical. the difference in getting policy away from being extraordinary low and continuing to hike it three times a year while the global context remains the same. by the end of next year, the ecb will still be at -40. it will be very hard for them to go at that pace and i'm not sure the economy is going to warrant it.

i think it remains quite aggressive. remember they took down the inflation forecast for this year for the next couple of years. they still by that inflation will be at the target but i'm not quite sure. anna: we have at least three more questions to ask you. david stubbs will stay with us. a busy day ahead. manus: rate decision from the swiss national bank at 8:30 u.k. time. tonight u.k. chancellor philip hammond and mark carney mansionak at the annual house dinner. that will be very interesting. find outmage control, how the u.k. chancellor is looking to refocus brexit on the

economy and away from the immigration story. this is bloomberg. ♪

anna: welcome back. 1:21 in the afternoon in hong kong. the hang seng down by more than 1%. move lower in the oil price yesterday. talk about what's going on in the u.k.. manus: philip hammond will make the case for a new path for >> it that focuses on protecting jobs and economic growth. his first appearance since the election. use his annual mansion house address this evening to the city of london to push for so-called pragmatic brexit. reflects theresa may's

failure to make immigration control the priority in leaving the eu. fascinating, how strong the language will be will be one thing we will be looking for. how convincing he will hold sway and have the upper hand. i think he has more sway right now after the election because of the weakness of the government in general. machinations the of the -- the key word is pragmatism. that's what markets and investors want. step away from the harder line issues on both sides and try to find a way forward that doesn't disrupt supply chains and investment. manus: we saw nicola sturgeon yesterday politicking.

and hisut participation call for greater cross party unity. went through my mind was this, the eu are so united or would appear to be, no sidebars, no side deals. ofbe there is merit in terms reestablishing some kind of strength from bargaining. david: it would be nice if you had a position that was well supported. think there are people who are putting the cart before the horse. , were we discuss the future don't discuss the trade deal before we discuss the phase one exit modalities. it includes the u.k. national and also the brexit bill. brexit bill is where the eu is most united.

those are the figures, anything more than a billion or two -- somehow we are told the issue is going to go away later after the general election and i still don't see how. to a certain extent you can have consensus on the final point of the -- final resting place of the issue. somehow both sides have to get past this incredibly difficult issue. we will not still be talking about this issue next year. you think so much of the time could be eaten into by talking about that bill. david: i'm worried that it will leave zero time to discuss it. do mark carney and company go?

nowhere, seems to be the consensus. they don't really have anywhere they can go. they're very cap doubt, interest rates, rock-bottom. the hard data of a recession to bring any further stimulus back onto the table. they will look over downing street and say they will -- that done senate -- something about it was a budget. one is talking about a hike because you have the consumers under pressure from the ratings being squeezed. savings rate at an all-time low. somewhat.h has slowed on top of that you have a hit in the business confidence we saw from the elections.

england isbank of perhaps in the worst of all carney we knowse has intimated he's not a fan of negative rates. reengage qe?ly what does it do to the gilt story? it will don't think react badly to bore fiscal spending in the short term because the u.k. is credible and does borrow as a safe haven asset. in the event of a recession you'd see lower gilt yields because of weaker growth and inflation. u.k. does have the fiscal space to respond to that. that's the opposite of the plan for the government, which was planning the greatest fiscal consolidation over the next couple of years.

anna: we will see that plan has changed. david stubbs this staying with us here on daybreak. manus: we will talk about tax with -- tech with maurice livy, next.

anna: welcome back to "bloomberg daybreak: europe." the dollar against the yen, pretty flat. big moves in the australian currency as the result of a strong labor report. pretty flat on the dollar against the yen for now. 6:30 herein london. let's look at some of the stories that have made it into today's edition. manus: the cover story, something we will probably see boyle a little higher as the day looking into whether

the president trump possibly sought to obstruct justice. investigators plan to interview the director of national intelligence and the nsa head, michael rodgers. expands the probe focused on russian meddling in the 2016 election to examine the president's own conduct. all the way back to james comey's testimony last year -- last week. the next story is on the federal reserve. the youth central-bank raise rates by point we by basis rates and laid out plans to cut its bond portfolio this year while evincing some concern about week inflation data. the cap forecast for another hike this year and three more next year while lowering its 2018 unemployment estimates. janet yellen blames it on

one-off factors such as reduction in wireless plans and drug costs. she expressed confidence the central bank is on course to hit its 2% inflation goal. anna: -- manus: and lastly, we focus in on brexit. philip hammond will make the case for the new brexit pat. he said there's more focus on jobs and less on immigration. plans ary official nationals.fer for eu officials will meet today in brussels in the hope to finalize the arrangement for talks that began on monday. theresa may is still convinced they can start these talks. anna: when will the queen's speech take place?

bb tech showcases the work of thousands of startups. where there with one of the industry's biggest names. >> good morning, it's the second edition of b the tech with 5000 startups, more than 1000 investors and i'm joined by the cofounder and chairman of the advisory board. last year you raise more than 100 million euros for startups. yes, what happened last year, collaboration between large-company startups and we expect there will be more of that. 850 investors last night, 1400 have registered, so we are expecting a lot of investors, and we know

expect weat we do will have a multiple of the 100 billion of last year, maybe four or 500. people areke focusing on making good contact an investment. >> we also have the visit of the new french president, emmanuel macron. how excited are you about this? theou think he's creating right environment for startups in france? >> he's been the one that would been leadinge's the way during the last four or five years. something a bit

-- a little bit like his baby. be a very good president for innovation, rmb, and startups. agenda, heis in his has plan to spend about three hours, maybe a little more, and he will make a speech at the plenary session. so i am expecting that president macron will play a key role in the digital environment. >> there's always been a concern from investors that the difficulty of doing business in emmanuel macron does want to reform the labor market by the end of the summer. do you think he will succeed, and you still have to explain the environment for business.

>> clearly it's not something we will change overnight. it's the first thing you want to attack with the congress. the legislature will end on sunday. everything indicates he will have a very large majority and there's nothing that will stop him. so the key question is how much -- even when he was minister of economy, it was the top of his agenda. i believe he will move very fast on this. yes, we still have to explain to people because there is a kind of skepticism. will france be able to reform labor laws? expecting to see

things changing very fast. thepretty sure that is also objective of the president and i hope this is what is happening. we're seeing theresa may in the u.k. after her election, and with brexit looming, do you think that's going to give a boost to the french tech system? that.pretty sure of first, emmanuel macron has been elected without any concession and any complacency, he's been very clear with the french what he wants to reform and he wants to modernize the country. currently anis and a way that is really supporting him as a person and his ideas.

believe this is something that will push the french tech and will push innovation. >> and brexit will help. i don't like to bet on the failure of somebody else. i prefer to bet on our own strengths. the brexit and the problems to theresa may and hopefully they will change their we will work very hard on making friends a different country, more aggressive country of entrepreneurs and i believe this is what we have to do. >> advertising companies are media,ng with new google, for example. how difficult is it for the advertising market today and

what world do you see for the global advertising market this year? >> if we stick to the old advertising, clearly there's a lot of problems to be expected. if you look at the broader new it,, as we have to find with technology, with the fact helping our clients to form their business, i think for auy is lou transformation. i'm veryeason why optimistic regarding our future that it's the fact probably best suited for all our clients.

the latest information, it would be around 450%. i don't know exactly the final number. 4.5%. less,it would be slightly maybe it would be above 4%. possibly it's a very good number when you compare it to last year when we had the u.s. election, the olympic games, football, soccer. i consider that we are in good europend i consider that is clearly coming back. a year be a key player from now. >> thank you so much, the tech, fromof viva paris for this event with 5000

startups and nearly 2000 investors. manus: the message very clear from maurice levy. there is plenty more gas to interview. come from vivatech. we have john chambers at 12:30 london time. remember if your bloomberg customer, you can watch the show using tv and pull up all the charts and functions where using and join the conversation by clicking at the bottom of the screen. manus: is the greek bailout drama in the spotlight?

will there be an into this difficult -- and end to this difficult chapter? this is bloomberg. ♪

anna: welcome back to "bloomberg daybreak: europe." you're looking at a live shot from new york, 1:45 in the morning. the s&p down .2%. interesting to follow the story developing by a special counts investigating interference in therussian interference in u.s. election. all of this has the markets a little bit edgy. that's get the bloomberg business flash with juliette saly. deutsche bank has outlined a new structure for corporate and investment banking division.

a copy of an email seen by bloomberg will create a separate business for equities and leverage capital market operations. the german lender unveils details on division of responsibility between the cohead for the new investment banking and trading unit. buyr his to sign a deal to as many as six jets from the u.s.. the pentagon said that current the $12nt completed billion agreement in washington yesterday. the move comes as the two countries navigate tensions over president trump backing for a saudi led coalition moved to isolate the country for supporting terrorism. asking a court in california for an order blocking the sale of a chip unit of toshiba in a joint venture. the u.s. country is tying -- fromg to stop toshiba

sharing joint ventures a have in preparation for a sale. aspokesman would not comment it has not yet received the complaint. corporate chat room black technologies has received recent inquiries about a potential takeover from technology companies including amazon. the deal could give the san francisco-based startup evaluation at least $9 billion. discussions may not go further. that's the bloomberg business flash. it's a day after the federal reserve raised rates. economists expect no adjustments in the interest rates are the key policy announcement. anna: that means a deposit rate of -.75 and a pledge to intervene if needed. matt miller joins us now. what are we expecting today?

a focus on the currency is crucial in this conversation. matt: the currency is very important. considering the fiasco that a lot of currency traders got into in january 2015. with an unexpected move. the swiss franc has gained so much strength on that day, and has since held at a fairly steady level of euro costing about $1.09, less than a frank in the month of 2015. but is still very strong. the swiss national bank says significantly overvalued and they stand ready to intervene in the currency market. bloomberg data shows they do regularly intervene in currency markets, just not to the level they did when there was a cap. negative rates continue to be fairly extreme.

credit suisse expects the negative rates to hold through 2018, but we will watch for a change in language. about one third of the economy as we surveyed said there could be a change in language. not a majority of the economists, but some said we could see that, so we will pay close attention at 9:30 swiss time when the statement comes out. obviously all three main central banks have dynamic differences on how they communicate. they won't necessarily send the clearest of messages. it's a little bit of doublespeak. matt: they tend to hit it more with a hammer than us capitol here at the snb -- than a scalpel. the importance of banks plays a

much bigger role in the swiss economy than it does in the u.s. or the european economy. they watch closely to see bank profitability and how to affected by rates and how it pushes banks to either go out and take more risk or less risk. right now they are looking at a situation they consider to be improving both domestically and internationally as far as the banks are concerned. that could be a good sign for the snb. much, matt you very miller standing ready in burn. -- in berne. the greek debt trauma returns to the spotlight today. the meeting in luxembourg is hoping to meet a deal on how to ease the countries debt burden. forth,onths of back and how likely are we to get a deal

today? >> we will get some kind of deal today. we have two issues on the table. one is the disbursement of the latest crotch in the greek bailout program. after some additional austerity measures the greeks have passed recently, that looks like it was set to get done and that will be going through. greece could make some additional commitment in terms of debt relief in the future, and this is more iffy. germany is pushing against it, the imf is demanding it. we will have to see what happens in luxembourg to see what kind of compromise they are able to come up with. debt relief, at what with the details need to include in order to get the imf on board? imf has been very strong that it will participate in the

program unless there is substantial debt relief. is going into elections in just a few months so they are resisting any kind of effort along these lines, any additional effort along these lines. they will have to come up with some kind of compromise. it will probably be along the lines up longer maturities and lower interest rates but these are things that are bones of contention at this point. this week, france has come up with a proposal to have the measures linked to germany's economy and how that progresses. this is another idea that will go into the mix and were likely to see some language along those lines in the agreement that we get today. anus: it's us -- it is sustainability question. , our bring david stubbs guest host, back into the conversation.

today -- tamara you have the bank of japan. we started talking about carney saying he must be one of the most harried central bankers out there. , andk at the swiss franc it still below, but to a certain extent, finally the world wants to own a few euros in not so many swiss francs. david: i'm very pleased about the progress he's making and getting past some political worries and embracing that. it's the first few steps on a this rate get out of and the huge balance sheet thanks to all the intervention they do in their currency. we are still a long way from the of the monetary policy landscape changing.

story, if's a 2019 you ask me. there are some whispers out of tokyo we might get some changes to the balance sheet at the meeting this week. progress is one thing, getting to a point where the swiss franc is not overvalued and they can take out the policy rate, we are still years away from that. at the same time, the central banks are unable to move the stimulus that quickly. anna: you try to come up with some sequence of events that gets us to the end of this, and it's difficult to do so without including some kind of debt relief because of what the ecb has said. when will we see some kind of debt relief for greece?

we will get a holding pattern today. say wille imf will come on board when there is debt relief in the future. the ecb will link and say we will allow it to be part of qe because even under present conditions, you're just about sustainable and there some kind of compromise their. the worst of all worlds would be a were -- another political blow up and the greeks backtrack on some of their reforms. i don't think anyone wants to go there. asian text and bank of america merrill lynch survey the other day, fund managers surveyed overvalued

stock markets and the most crowded trade saying internet 18%ks are expensive and calling it bubblelike. ,it's not just in america it's also very tech heavy. it's a tough thing about investing in a bull market. seemingly overvalued positions can persist for years in the market makes new highs. it's not clear that you have another way to tap into the robust global growth we are seeing. anna: david, thank you for your time this morning. david stubbs, global market strategist at j.p. morgan asset

strategies. up next, we will talk more about the fed. janet yellen with plans to normalize monetary policy. that is next. this is bloomberg. ♪

manus: betting on inflation. the fed hydrates. yellen says do not dismiss future price growth. softeright of the inflation readings the committee is monitoring inflation developments closely. anna: details delivered. deutsche bank the lender said to announce a new structure for its corporate and banking division. manus: going soft. philip hammond is said to make the case for a brexit that protects jobs and economic growth. theresa may fights to stay in office. anna: turning to trump.

the u.s. investigation into u.s. russian election meddling is whitening. looking at whether the president attempted to slow the flynn probe. tous: you're welcome "bloomberg daybreak: europe." anna: i am an edwards. it has gone 7:00 a.m. in london, 8:00 if you are in paris or berlin. weneed to be mindful of what see on the u.s. futures on the back of the story that the investors are probing if the president himself attempted to relation totice in the michael flynn story in that seems to capture the imagine -- imagination of some in the asia equity session. features are weaker -- futures are weaker. manus: that is a political weight in the u.k. story.

it is about the common of political risk rising. i translate into the risk radar which is they are impressed by the aggressiveness of the fed's intentions in regard to winding down the balance sheet. we have european equities. is the msci asia-pacific. oil was lower, 8%. anna: we're talking about u.s. politics, the fed, and oil. we had this big move in oil that throwing the msci asia-pacific off. considerably weaker as energy and raw material stocks flow. -- fall. -- down by 3.7% marking a low that we have not seen since november and oil down almost 8% this month. the ongoing conversation is about u.s. data coming out but ongoing conversation about the u.s. extent of production and how much that is affecting what

opec is trying to do. manus: also bond markets, that is asian equities and the aussie dollar is against the new zealand dollar is ripping higher. have three straight months of job gains in australia, unemployment dropped into a four-year low. it is on a river -- ripper. anna: let's have a look at some of the closes of the market in the asian session. asx in australia closing weaker. stocksand raw material and the politics in the u.s. and the u.k. and elsewhere. all of those are the great stories. manus: that's how -- look at how the on markets are opening. down on the bund. maketle bit of money to

into the bond market. the s&p is having a drop in prices. oat's.ewise in the in the u.s., the special counsel investigating russia's interference in the 20 election will examine whether theld trump sought to slow investigation into former national security adviser michael flynn. according to three people familiar with the inquiry, robert mueller plans to interview to top intelligence officials over the matter. the move expands the scope of the investigation. trump anddent donald his wife milani i have presented the -- has visited the majority whip in the high school. he is the third ranked house republican who suffered fraction -- fractured bones and internal bleeding.

he remains in critical condition after the attack. in the u.k., fire crews are working through the night to dampen a deadly blaze that killed 12 people. officials have warned the number of fatalities were almost -- will almost certainly rise. the higher that broke out yesterday injured seven people and an unknown number missing. the cause of the blaze remains unknown. the u.k. has slipped further into political limbo. the northern ireland democratic union drag on. the slow progress of talks could further delay the opening of the new session of parliament currently scheduled for monday. u.k. chancellor of the exchequer philip hammond will make the case for a new path to brexit. according to a treasury official, hammond will be giving his annual address to the city

of london to push for a so-called pragmatic brexit. the move is to focus on jobs. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . rate hike outed of the way. there is the boj's decision, the nikkei is often the close. the route you side oil and energy players weighing heavily on the hang seng. yes austrian market down 1.2% despite the better-than-expected jobs number. china also weaker in late trade down .3 of 1%. toshiba never far from the headlines back in the news. western digital is seeking an injunction and a california court to lock the cell of

toshiba posture unit because it is worth the money could be taken away from some of its joint venture projects. holdings are down with this week is coming through in tech plays. even goldman sachs said the asian chick layers had nowhere new the risk that we saw in the u.s. tech stocks. and rising significantly in sydney, up 15%, the biggest opening year. ano successfully completing institutional offer. let's take a look at the australian implement numbers. if you break it down in terms of part-time and full-time jobs, this purple color is the full-time change you have seen switch out from part-time from april to may. we know that unemployment fell to a four-year low to 5.5% but also you are seeing this transition into more full-time jobs which will please the rba. three consecutive months of growth.

analysts on the mliv blog saying a obituary for the economy is too early. .anus use the word ripper a big spike coming through in the aussie dollar. manus: always good to get a listen in terms of local language skills. i have not brought in the irish terms it. anna: that was fabulous. manus: let's talk about china. there is an insurance company and there has been a direction from the authority to suspend dealingsw the company. this goes back to the other story, their woes are beginning to deepen. the chairman had been detained challenges and this adds to their level of well -- woe. anna: this comes as investigators are beginning the

probe into operations including how they hunted m&a in the past. that was part of the conversation, looking for the source of funding for acquisitions over shares -- overseas. this is according to people familiar with the matter on the subject of the chinese insurer ambang. sailed -- sold double the amount they sold in 2015. anna: some of this is specific. 709 a.m. in london, 2:09 a.m. in new york. the focus on what we had from the federal reserve. janet yellen is pressing ahead with plans to normalize monetary policy and raise rates for the second time this year. manus: and her news conference yesterday, she played down the softening price pressure and showed confidence the fed could

hit this 2% inflation goal. -- employment it near its maximum sustainable level in the labor market continuing to strengthen, the committee still expects inflation to move up and stabilize around 2% over the next couple of years. in line with our longer running objective. nonetheless, in light of the softer recent inflation readings, the committee is monitoring inflation developments closely. provided that the economy evolves broadly as the committee anticipates. we currently expect to begin implementing a balance sheet normalization program this year. is plan is one that consciously intended to avoid creating market strain and to allow the market to adjust to a very gradual and predictable plan. i fully intend to serve out my

term as chair which ends in early february. i have not had conversations with the president about future anna: janet yellen there. ursula us on set, marchioni. good morning to you both. we saw the dollar fall on the back of the inflation data and we saw it get a boost from what the fed had to say. all of this because they stuck to what they had said previously about guiding the market toward more rate hikes in the future, was that your takeaway? u.s. yields are lower and that is a function of inflation. lower inflation is starting to smoke investors. janet yellen was talking about the transitory nature of

inflation but the fed's preferred measure of inflation has averaged 1.6% over the past 10 years. it has not been at or above 2% for over five years. if you look at it at 1.5% is off the recent peak but is not transitory. it has been there for a long time. have been sideways. they have been throwing the kitchen sink at this and investors are saying this is more than a transitory problem. she have thrown the kitchen , transitory or a structural challenge? nuanced inlightly terms of i agree with the numbers. if you look at the [inaudible] the focus is around if we

from short-term discussions their big changes in the economy. thinking about graphic trends and technology disruption which we think in the long term well change the price dan emmett. the attention to the fed on a short-term basis is potentially overplayed. we think the decision was a good decision. anna: those factors are often seen as weakening inflation. technology and other structural factors in the economy. economisted labor putting her faith in that phillips curve. >> one thing is the flatness of the yield curve. investors are a little bit concerned about the younger term trajectory for inflation. that is: this is flattening. yields are lower

than they were a few months ago. that is a realization by investors that normalization is something that is worth trying to achieve. there might not be as much in this as initially thought. manus: can i ask you for what rick had to say about the map -- balance sheet. implemented on market -- mortgage backed securities. taking a trillion of the balance sheet i-20 19. his -- how aggressive with that be in blackrock spew? exit is pretty aggressive in i think that if you speak to investors in europe, the area i cover, there are several questions you referred to. in terms of flows into u.s. equities, we have seen in may outflows and there is more tactical perspectives for

nervousness to the benefit of european exposures. anna: is that concern about what trump can deliver in washington? ursula: it is a combination. perception of political risk is helping. the momentum you see in the economy, earnings on a solid path are t inch mark levels. the flows that will continue for technical reasons, in addition to that you have the benign economic picture that we have seen which we do not believe will be derailed in the short term. i would classify it as short-term. anna: thank you. our guest is staying with us on the program. 7:16 a.m. in london. manus: the exchequer will make his case. we will bring you the latest.

this is bloomberg. ♪

anna: 7:19 a.m. in london, 8:19 a.m. in berlin. some of this news flow, the latest twists and turns on capitol hill, taking the edge off u.s. futures. weighing into european trade and the weakness in the oil price adding to the mix. is's go to the bloomberg this flash with juliette saly. juliette: thank you. deutsche bank has outlined the new structure for its investment and banking division. a copy of any mail seen by bloomberg will create a separate business for equities and leveraged o market operations. they unveiled details of the division of responsibilities itseen the co-heads of

newly combined investment banking and trading unit. qatar has signed a deal to buy jets from the u.s. the defense minister and his completedounterpart the $12 billion agreement in washington yesterday. the two countries are navigating tensions over donald trump's backing to isolate the country for supporting terrorism. has asked thel court in california for an order blocking a sale of the chip unit of toshiba, it's hard and are in a manufacturing joint venture. the u.s. company is toshiba from transferring joint ventures they have together in preparation for sales. a spokeswoman said the company could not yet comment as a had not yet received the complaint. slight technologies has received potential inquiries. according to people with knowledge of the situation a aal could give the start up

valuation of $9 billion. they said an agreement is not assured. that is your bloomberg business flash. manus: let's talk about the u.k. philip hammond will make the case for a new path for brexit focusing on protecting jobs and in his firstth appearance since the election. anna: hammond will use his mansion house address to push for so-called pragmatic exit. joining us now on set, dan hansen. .till with us let's start with you. we have a couple of things on england,r, the bank of no change there but also this address by hammond. this is going to be quite

crucial although iamb confuse because we have been talking about soft and hard brexit and now we are talking about a pragmatic brexit. the definitions of soft and hard brexit, i lose myself with it all. the way we look at this is the soft brexit takes into account things that the single market and customs union. what hammond will lay out probably still discounts the possibility of the single market. staying in the single market means you have to have freedom of movement of labor. customs union, it is possible that he still keeps that on the table. what i think is more likely is that he puts forward the idea that the u.k. can push for a transition deal, after -- with the new deal, whatever we agree to. anna: they're talking about a norway model. as it interim. -- an interim.

that would mean freedom of movement and that is one thing the electorate has honed in on. i think it is difficult to sell. it might as interim deal potentially but i still think we are heading for leaving the single market, leaving the customs union, and going for a deal that puts, as hammond has put it, the economy in the center, not just all about curbing immigration, getting a down to the tens of thousands. >> the economy at the center is what mark carney is going to have to focus on. markets,ignaled for with be bullish for u.k. assets but would it take some of the pressure, these are the possible rate hike probabilities for mark carney. he has a tough job. he has to tread the line between what he is prepared to do and

not spooking us. ursula: i agree. i look at flows, the u.k. election has been unlike any other political of it we have seen in the last 18 months. anna: we have seen a lot of political events. ursula: that is true. manus: visit bigger than trump? ursula: we saw this wall of money going into ftse assets. a lot of investors me back to the market. that was another point in with investors coming back taking cash out of the sidelines. and it was a reflection very -- reflationary trade that was happening but it certainly happened. u.k. election has been unusually quiet. we were talking around the desk that we have not seen such low flows in this space for quite some time. the question is what is happening out there. when i checked with investors

the view is we are not going to play the u.k., we will state benchmark. you do have exposure to the u.k. but it is confused. u.k. investors were needing some guidance. >> all it does is cloud what the government's strategy is. the talks are next week. manus: i do not know what he will do but that is unlikely. dan: all this is going to do is make it more uncertain about what the government's negotiating stances. you saw michel barnier say the u.k. needs to get going. there's a short time to get this yield on and if you keep delaying, there's a chance you will follow with nothing. anna: he said i cannot negotiate

with myself. inc. is so much to the both of you. a lot to watch later on today. manus: futures are lower, the european market open is next. i will see you in 10 days. ♪

♪ guy: good morning. welcome back. :his is "bloomberg markets" europe." matt miller is in bern. what are we talking about this morning? inflation expectations. the fed raised rates. it is going to start pretty

soon. the big question is