click's blame on both sides. president trump reverts to his original stands -- stance on the virginia violence catching lawmakers offguard. >> you had people in the group other than neo-nazis and white nationalists, ok? the press has treated them absolutely unfairly. and the other group, also, you had some fine people. >> frontier diplomacy. britain says a physical border with ireland would be unacceptable as it lays out more of its post-brexit vision. >> amazon primed. the giant cells $16 million of

bonds during the whole foods takeover in a bid to dominate grocery sector. ♪ >> a very good morning. welcome to "bloomberg daybreak: european open." i am anna edwards. manus: i am manus cranny. carlsberg delivering -- the organic volume declined by 2%. they are being hit by russia downsizing. they see the full year is a positive impact, a positive translation impact on 50 -- 50 million danish krone. the organic beer volume drops by 2%.

the estimate was for 3.85. they are warning that the organic volume is down by 2%. that in part being hit by russia. sales numbers missed the estimates, 31.70 7 million. .- 31 point you're looking at ab inbev. that is who you have got to go up against even though you have got decent recovery in europe. we are spending more. anna: let's go around to other corporate earnings. the insurance sector, first-half net income 25.4 million francs. any good position to achieve their full-year target. recently we heard from the ceo

after some illness. swiss life will be restrained on acquisitions. that is with the ceo told a provocation -- that is what the ceo told a publication. manus: who is the king? it is china. they are back on top. they had the most amount of treasuries in june. reserve, they have improved for the sixth straight 0.68.in a row, can they sustain this number one position? strong trade flows, they reckon that china is not done buying treasury. their strong trading relationship with the united states of america. anna: it was down but now it is up against the dollar. some of those flows, maybe they did the trick in the short-term

and trying to stem some the capital flow we have seen earlier. on the risk radar, a little bit of calmness on the markets, as a result of less rhetoric around north korea. plenty of politics for us to wait in in terms of u.s. story gh-in on the wei u.s. story. only, we have day a shot of sunrise in london. this is the bloomberg dollar index. the americans spend freely in july and u.s. retail sales rose but what will they reserve say about inflation and the trajectory. we will ask stephen gallo. this is eurosterling. an eight year high for sterling and an eight year low for the pound. where will we go next? anna: we will be watching that throughout the day.

we get you take data -- we get u.k. date on the jobs. keep an eye on eurosterling. let's get to first word news with juliette saly. juliette: and not, thank you. u.s. ambassador to the united states -- united nations says iran cannot be allowed to have nuclear weapons. nikki haley spoke after president hassan romney wanted -- warned that nuclear is -- that iran's nuclear program could be ramped up. martin schulz who is running against angela merkel in german elections is giving a stick -- a skeptical response to the uk's proposal. he said britain risks further compensating negotiations -- further complicating

negotiations. >> in the united kingdom, everyday suggests another proposal. this is not meaningful. [indiscernible] help to overcome the main problems, especially the guaranty of the freedoms of the european union. let's discuss it. juliette: britain has said it wants to avoid a physical border or customs check with ireland as a part of any brexit deal with the european union. the brexit department says u.k. in european negotiators need to show "flexibility and imagination." is due toovernment publish a document fleshing out its proposal at noon today london time. china has reclaimed its position as the top foreign buyer of u.s. treasuries. china is holding u.s. bonds notes and builds -- in bills

rose. that pushed japan into second place as it stock decreased. the two countries account for a third of all foreign ownership of treasuries. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . it has been a fairly mixed session here in asia, but what you want to pay attention to is the rally and the kospi, up by 1%. south korea was close yesterday for a public holiday, so it is playing catch-up. we see these geopolitical tensions subside somewhat. status decline since june against the dollar on the back of those strong u.s. retail sales. that is playing into the nikkei it would have the hang seng growing strongly -- the nikkei. we have the hang seng growing

strongly. we have a look at some of the stocks we have been watching in detail. korean stocks really leaving these gains. korea aerospace industry stock in terms of defense going very strongly up 15%. tencent, we are waiting the earnings. sydney, -- inand sydney, has forecast strong projections. have a look at these charts. see that volatility on the hang seng index has been

♪ >> welcome back everybody. bloomberg daybreak her. 6:21 here in london, 1:21 a.m. in hong kong. a little calm, low stress coming

through on asian markets. up 8.5%. let's get the bloomberg in sight. >> thank you. amazon has sold unsecured bonds to find it its acquisition of whole fields -- whole foods market. the longest portion of the 1.5%ing was a yield at above treasuries. the first bond market by the world's largest online retailer. powerhousesces u.k.ded among offshore funding. macquarie group and copenhagen infrastructure partners also waving offers. representatives for of eva china resorts did not immediately

return calls. --r is in it close of talks .ber is in exclusive talks funding would come from softbank , the deal is said to hang on the outcome of a courtroom brawl between two of the company's most influential board members. businessour bloomberg flash. onus: economic data to feast today. second-quarter gdp from italy and poland. >> we will get a second gdp look at for the whole of the eurozone at 10:00 a.m. eurozonert with the broadly. then we will go over data points.

industrial production, exports, job picture looking better. as is still fighting that reputation that they inherited from others? >> yes, i think so. i think most people realizes, especially people at ecb that the recovery in italy is cyclical. >> it removes the accommodations? >> it is one of the risks. the issue is going to be not so much in the short run level of , the debt service cost. that is an issue for italy. >> why have you flipped your position? draghi goes next week, he is not going fishing. i can see him with a boat trying to catch a short from somebody who is long on the dollar.

why have you flipped? why have you turned over? >> we're looking at the euro dollar weakness has been felt through the dx y, which is mostly europe, the euro. the ecb we think in september and going forward is going to use all of the flexibility it gave its health at the summer rate decision. this is basically -- they will stagger the process out as much as they can and we think a is setllar, at 118 it for a rate hike signal. we do not think the rate hike signal will materialize until next year. that is our view. sellwe would do is look to rallies now. and, probably look to go neutral once we get to 116. watching the election

details unfold. the final round of campaigning. lendingl-good economy, support stew angela merkin versus italy. >> what i would say in the german elections, we mainly think it has an impact on fx if scenario.utlier for instance, getting the most votes in the lower house. other than that, not a major market impact. the plane filled, look at it like september has a huge amount of economic and political risks. coming from china the party conference season, the leadership reshuffle, the point is people are short on a dollar now. by default, we think the dollar will gain into september because risk will come off the table and

investors will take a more neutral stance. maine is: -- >> up next, flexibility and imagination. this is bloomberg. ♪

♪ is 6:30 a.m. beautiful shot of don. making an eight-year high. and an eight-your love for starters. and eight-year love for starters. in seven parts. >> lisa abramov edge, right? amazon seems like a fortress of strength sucking energy from the retail industry. but it is a good story for investors concerned with hard

numbers. manus: you either look at the profits or if you are a buyer you look at, do i want to get it back? yield that you get on treasuries. am i going to get my money back? if you look at the probability, you are not saying you're going to get your money back but you are taking a bigger risk. microsoft, they are gobbling up the bonds. >> it is amazing in the low interest rate environment, this low yield market. companies are borrowing for such durations. quite a lot of often by companies like amazon. financing. of if you are letting to accompany for 40 years. companies have to take this without the benefit of potential windfalls.

manus: if you believe in the story of whole foods and amazon, however you want to look at the debt. let's get more the debt now. great to see you this morning. anna and i are running through some of the details. what is the issuance in the bond market. we talked about yield premium and duration. what is it's a year. >> there is absolutely no summer long for the market right now. given what we saw all night. the 10-year treasury yield remains stubbornly low. in addition to that, investment-grade bonds stayed pretty strong. an extremely opportune moment for a lot of big issuers to tap the bond market and lock-in cheaper funding rates. it is no surprise amazon was able to get a pretty good deal.

one.tty long duration we have seen pretty big deals this week. at&t, british american tobacco, these are two examples of three substantial deals priced on the back of strong demand. anna: the size of this deal, on the back of it. is doing toat it the retail environment in the united states. what can we say about demand for bonds which are not exactly highly rated by some of the analysts? >> there is a pretty high demand for yield at the moment. investors want to buy amazon because it does not have a lot debt.standing at the end of last quarter, it had close to $8 billion outstanding said that is not a huge amount for the sides of this company. investors who are also looking at a potentially low full

agility investment could be looking at this. volatility,a wide for example this is a good investment. on positive tois stable for amazon. thank you very much for joining us this morning on the amazon debt. it is on the front of daybreak. we picked the right stories. in a talk more details on that story on the bloomberg. let's turn to you cape politics. -- u.k.ape politics politics. manus: both sides have said they want to avoid the obstacles to tode but written's design leave the trade union makes that tougher.

when we got here this morning early we are talking rubbed the story. anna pointed out that -- these papers were produced very much in response to a demand made by the european union. there is something grandiose from the two papers. that is why the european side has intimated the u.k. is living in a fantasy land and terms of the demands they are making. on the market looks at these papers produced, does it matter? >> right now what matters for sterling in the forthcoming debate is the vote on the great repeal bill in september. that is the real test for the government and that is what this market is looking for. it wants to see the market in action. it wants to see what is possible for the market to achieve. >> they don't realize about the market itself.

it is between that and what brexit ends up looking at. drugs i think it matters less for the fx market. looking at the picture and it is on a guilty until proving innocent strength. you are a high risk: seen. currency of until we see stability. our vote is that the government won't. there will be a rally in sterling. the relief rally is not going to be large, not yet. ofus: when does the risk this government falling over from the election lightened? the story is, everyone is dumping the pound. real money is just about to begin dumping the pound. this is in an american survey as

well. do you see the risks waiting? we're not looking for a sharp, long, protracted, whatever you want to call it rise in sterling. remember, they are banking on the revival in households will income growth in the second half of this year. neither side, including the e.u. side wants to be blamed for a disorderly hard brexit. the gamble they are taking now is they are trying to force the e.u. to start discussing what really matters for the economy trade earlier. the e.u. agenda is, we want to get it done. citizens rights, mainly the money is what it is. manus: and is all about the money. anna: and you think the europeans won't persist this to a hard brexit? >> a disorderly brexit. hard brexit before the election was our best case scenario.

a hard, orderly brexit so we have the most flexibility. income substitution, new economic model, new thinking. that will not happen now, that type of brexit because of the election result. what we are now saying is that from the e.u. standpoint, disorderly brexit would be no transition, nothing of that nature. i think the sides will want to avoid this. maine is talk let's switch gears. we know besides want to avoid it. the news does not suggest that. the news is about the british position as being joined up. we got an op-ed on sunday. this is looking like marconi's problem on the other side because he promised us -- he is very unreliable -- he promised us we are going to this potential for a rate hike. that is dissipating.

under delivered. does the data make it harder for the government to move off? >> yes. because there is a risk from the negative side effects of the rate hike. it could be worse than, for example, the risk was lower in the pound or something along those lines. anna: is it possible to do a reversal of the emergency rates? something they would've been tempted to do had it been higher? >> we thought with the august report that the town would of -- the pound would of the taken more importance. my preference would of been that it was long gdp in the decision. but ultimately if the bank wants those forecasts to play out for the second half of this year, it needs to be worried about

excessive weakness and sterling. manus: very hard-working tolerant man. it keeps getting larger and larger. are you part of that? will we see parity before the end of the year? stephen: i was a number of years ago. i was an excellent contrary an indicator. oh, we are not in that call. we think the results will be an transitionalwith a arrangement. manus: ok, you heard it here. anna: that was stephen, head of bmo. manus: bottom left-hand side, an opportunity for you and a jetstream. -- checked stream.

go ahead and click it. anna: next will focus on the world's second-largest economy. this is bloomberg. the crowd

♪ back, bloomberg daybreak here. york, 1:44 over in asia. coming through in hong kong, up .round if you are stateside, you might want to focus on that. businessto bloomberg last. >> amazon has sold unsecured bonds to fund its acquisition of whole foods market according to a person with knowledge of the matter. the longest portion of the offering was sold at a yield of 1.45 percentage points above treasury. the sale marked the first market for a by the world's largest

retailer since 2014. reporting first-half profits. the danish brewer said earnings before interest, taxes, and 652time items rose to million dollars. reduced cost and benefited from currency shift and russia and asia. says toshberg's ceo will join us for the first interview of the day. and power holdings among companies considering stakes in offshore wind fund. according to people familiar with the matter, infrastructure partners are also weighing in. toepresentative declined comment. representatives for aviva did not immediately respond to requests. aviva is in exclusive talks to lineup investments.

familiar to people with the matter, funding would come from softbank and others. the deal is said to hang on the outcome of a courtroom brawl between two of the company's most influential funders. that is your bloomberg business/in a minute. >> opec and russia, the strategy to clear the global oil glut. now it looks like that battle could last for years. anna: tracy l weight joins us with more from abu dhabi. hasn't the agreement had the desired effect? very long-term forecasts now. of the day, and i have to say the reasons tend to come in and out of fashion. it is about compliance and

participation and the ability to offset rising production from the u.s. -- thepliant to compliance is a job drifted down to 80%. that is the lowest since january. we know it is on opec's radar because they did hold that extraordinary technical meeting here in abu dhabi last week. and a like libya and nigeria exempt from the deal. you also have opec members who were part of the agreement losing a little bit of their willpower. on from ecuador. oil minister now saying they will maintain their current rate of production which is about 541,000 barrels a day. that would be a higher rate than the 522,000 production limits they had originally agreed with opec. 26,000 barrel cut.

small for the overall opec will agreement but it does say something about the political will of members of the group. you can expect that to come into focus when opec meets in november. manus: is there any good news? we caught up with the chief iaea therategist for other day. he said it would be very tough. i am paraphrasing if he is watching, very difficult to get above the bandwidth of $50-50 five dollars. >> manus, i have been searching and i did find you some good news. that is that we have -- returning to the brent oil futures curve. $.18 this is up to morning. a multi-year high. the last time we saw that was when opec first announced the

production cut agreement in november or december of last year. this is usually a good thing for the oil. the market structure is tightening. that said, there is still a lot of skepticism about whether this is a temporary phenomenon. we have a lot of maintenance outages in the north sea at the moment. others hedging production. that is why we see some skepticism in the market. jp morgan saying it wants to keep its recommendations on the 2017 and 2018 contract. thank you. joining us from abu dhabi. for a companyenue at an all-time high. better then forecast sales. : open to beijing deals even as it cracks down on debt.

>> the chinese government supports the relevant -- the rail economy. china's economy will only do well if the real economy does well. will affect the institutions and should make the real economy bigger and stronger. >> a lot of chinese companies have rushed to buy overseas brands and overseas assets. maybe getting around some of the capital controls in place. do you have such ambitions? whenant to use this time your stock prices are at or near a record high, to use that to buy overseas brands? chinesefocuses on the market. we have been actively looking for good opportunities overseas m&a inwill only consider the same sportswear business rather than crossing over to

irrelevant industries. we have been looking. i believe there will be opportunities for us to make m&a deals in the global market. how about growing your own brand overseas? you still trail a deed is, even feel it to which you have the rights in china is --e well-known they had than anta. >> we expect to do more by theoducing our products to worldwide market. it will definitely be higher than it is at present. cracks can you jump over under armour? >> i believe we do have an opportunity to move up. i am confident. >> china has a long relationship with the nba. primarily the houston rockets. your first endorsement contract was with steve francis.

i have seen pictures of you with the owner. he is put the team up for sale. would you be interested in a chinese bid for the houston rockets? >> a lot of people have asked me the same question but no, we are not allowed to buy a team because we are a sponsor, so we cannot on a team in the league. xavier example you're not an mba partner? notay for example you are an mba partner, could a chinese partner like yourself eventually mba team? >> yes, it is possible for a chinese company to take over the houston rockets. i think they stand a chance. many chinese businessmen have deep earrings for the nba, especially the -- deep feelings for the nba, especially the rocket. nba teams do not have large profits. even if they do, the prophet is thin. its are thin.

orould not spend one billion $2 billion to buy a team. ceo speakings the with our colleague about their intentions or otherwise. manus: if you tuned in at 6:00 a.m., back on top. u.s. treasuries increasing their holdings for the fifth straight month. china u.s. bonds topped out at $1.5 trillion for the first time since october. anna: let's get more from stephen. talking about what is happening here, this is what we call of victory? they managed to maybe stem the flow a little bit? as a result go out and buy more treasuries? a stephen: i think it is a reflection of the fact that china made progress stemming the

outflow. oversight.more limiting fda-related outgrowth from state-owned enterprises. what is also a product of the improving global trade picture. for various reasons because of weak investment growth, because of small global imbalances on a number of issues. trade and fiscal deficits in the u.s. the deficit will not reach the pre-crisis norms in terms of key ofitations -- cumulation reserves. when you look at it through the fx prism without a rally. manus: you say there's a different ways to look at it. there is a return to normalcy. short-term trade then returned to normalcy.

stephen: modestly higher. 66 five.a stop in at you are targeting a move over 1-2 months. below 665.slightly here is the strategy we think china will try to achieve. president xi has tried to betray himself in many ways as the anti-trump. he did this one trump pulled out of the earth accord. he did it with pro-globalization. we think he will try to do the same thing now that talks have broken down and sour again. he will do the same thing with trade. instigating a trade war with the united states is the last thing president xi one. congress in the autumn, it basically means they will maintain this relatively tight relationship with the u.s. dollar. as the u.s. dollar rallies, also that renminbi you will like not

as much. >> will we talked about nafta you said there would be nothing material in here for fx markets anymore. nothing material because you just had those small tweaks. does the same apply to the u.s.-trade? do we and up with just small tweaks relative to the size of the relationship? stephen: both sides will ofbably give way on a number issues. the thing that would really influence currency markets would be an all-out trade war. we think on both sides for china in particular wants to avoid that. there is no risk of china massively increasing its reserves, accumulating reserves to drive that point forward. manus: is you say, nobody wants that all-out trade war. thank you, stephen.

from's, trade negotiation the u.s., canada, and mexico begin today. we will break down what is at stake and talk more about nafta. ♪ ♪

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>> president trump reverts to his original stance on the virginia violence, again catching lawmakers and aides off guard. pres. trump: you had any people in that group other than the own nazis and -- neo-nazis and white nationalists. the press has treated them unfairly. in the other group also, you had him find people. says the border with its island will be unacceptable as it lays out more of its post-brexit vision. and amazon prime cell's

, with adollars of bonds whole foods take over to dominate the grocery sector. ♪ >> welcome to "bloomberg daybreak: europe." means0 in london, which we are waiting for a number of corporate's to report. it looks as if akzonobel is making headlines. they have reached impact with elliott. litigationongoing for three months. akzonobel have been battling for ownership of the company. the pact includes an alignment

on thenobel's strategy ongoing litigation. a suspension in litigation for at least three months. this goes back to the separating of the chemicals business. akzonobel saying they intend to nominate a third new supervisory board member. that is a story of activist investment and what it can do to the management, what kind of fire it can put under the management of another dutch business. there is another dutch business, and we have talked about a number of them. akzo says elliott will support the appointment of the new ceo.

manus: and the chairman of akzonobel says, i am pleased on the recent distractions we have had with elliott. akzonobel remains focused on creating two high-performing businesses. we look forward to continuing a constructive relationship. that is one line coming from the chairman. it looks as if we could be moderately positive at the start of the trading day. 8% higher for the msci asia-pacific. usa is flat at this hour area perhaps -- usa is flat at this hour. perhaps we might see banking stocks -- those two banks may be in focus. saudi is selling candy to

babies. amazon, amazon, amazon, and they reach out and say give me more. anna: let's have a look at the risk radar. msci asia-pacific fairly,. summer. more like we are without any increased levels of rhetoric around north korea, and perhaps that is something the market is running with. plenty of politics stateside. u.s. dollar is flat. it did show strength later on. retail sales better than estimated. how committed are they to the rate hike? manus: stephen was with us from there is a he says glacial drift lower in the dollar. however, is this position crowded? the euro --

orderlywe will have an brexit as opposed to a disorderly brexit. you are looking at an eight year low for sterling versus the euro. there is data on the u.k. and the eurozone. let's go to juliette saly in singapore. juliette: the u.s. ambassador to the united nations says iran can never be allowed to have nuclear weapons. nikki haley spoke after president rouhani warned that iran's nuclear program could be ramped up that the u.s. continue sanctions. president trump wants to abandon the deal in congress. martin short has given a skeptical response to the uk's temporary proposal for a you and customs unit after brexit. the former head of the

parliament said that britain risks further propagating negotiations by creating a series of position papers for the talk. the united kingdom, the government in london, everything suggests another proposal. this is for sure in my eyes not therefore, and [indiscernible] to overcome the main problems, especially the guarantee of the freedoms of the european union. let's discuss it. has said ititain wants to avoid a customs check with ireland as part of any brexit deal with the european union. the brexit department says that u.k. and european negotiators need to show flexibility and imagination in ireland. the u.k. government is due to publish a document fleshing out its proposal, at noon today. has reclaimed its position

as the top foreign owner of u.s. treasuries after increasing its holdings for the fifth straight month. china's holdings of arms rose to $1.5 trillion in june. that pushed japan into second base -- second place. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. been a bit of a mixed session across the asia pac region. we have the nikkei closing down by a 10th of 1%, after the yen fell against the dollar, the most since june. the hang seng rallying this afternoon, up 7/10 of 1%. at the cosby, up

half of 1%. a lot about lifting being done by samsung. in terms of other stocks we have been watching, korean stocks certainly in focus after the holiday. korean air space up by 15%. geopolitical tensions easing someone from investors' minds. tencent coming through after the bell in hong kong. it is the start of the hang seng index. argent energy doing quite well after a 2.4 billion dollar write-down for the previous fiscal year in australia. but it has forecast a better year ahead. you can see how much of volatility is back in asia, particularly on the hang seng index. this blue line showing volatility at its highest level since november. a lot of stocks being brought into ahead of the proposition of

the hang seng index gauge coming through after the bell. ,ne of the companies, wh group at a record high on the back of speculation it could be included . this is as we see the hang seng continue to rally, up by about 20% so far. anna: juliette saly in hong kong . president trump has returned to his controversial position that there was "blame on both sides" for deadly attacks in virginia over the weekend. faced criticism from lawmakers in both parties and business leaders for staying on saturday that any sides were to blame her the violence in charlottesville. his latest comments at trump tower caught his aid that i -- aide by surprise. pres. trump: that was a horrible day. i will tell you something, i have watched this closely, much more closely than you people have.

you had a group on one side that was bad and a group on one side that was very violent, and nobody wants to say that, but i will say it right now. anna: let's bring in bloomberg's jodi schneider. good morning to you. how are president trump's comments being received, both in washington and in the business community? we are seeing fallouts politically and from the business leaders. jodi: that's right. there is political fallout with capitol hill lawmakers of both parties. they are concerned about these remarks. it puts them in a difficult position. it's not something they want to defend. it's a -- it also distracts from the legislative agenda. congress is in summer recess, but they had hoped to get down to business on things like

infrastructure, what the discussion was supposed to be about. there is frustration with that. among business leaders, and we are seeing more defection from the president's business council over these remarks. these are not things business leaders want to be associated with, so they are leaving, and there is frustration there as well. expect?odi, what can we the other set piece is nafta discussions begin today. our last guest release said, that nothing to see here is not going to be a make or break as it was in the campaign trail. the president has moved back from some remarks he had theier, certainly on campaign trail, where he said he wanted to lift up nafta and undo it. now they want to renegotiate in positive might be more

to the u.s., particularly in lowering the trade deficit with mexico. that is a big get that the u.s. wants to get from these talks. it is a 23-year-old agreement, so there is a lot there, and it is not something to renegotiate overnight, but right now it seems trump wants to get into the nitty-gritty rather than to undo it. rishaad: -- anna: jodi, thank you for joining us. asset management joins us with his thoughts. a lot to get into with politics, some of it a distraction from the rest of the administration's agenda. ,hen you look at the nafta talk for example, something that was a big deal during the campaign. our last guest was saying that

expectations have been raised right back to just how radical this is going to be. do you share those expectations? >> i think that is right. what's interesting is the attitude in these negotiations to what may be an opportunity for us in the post-brexit environment where we want to negotiate with the u.s. or other partners in the geography. forward,an find a way that is a 23-year-old agreement -- there have been a lot of nuances -- how constructive or collaborative candidate baby -- can they be? that is more interesting than the physical outcome this week, what does that potentially set up in terms of a world where we move into more trade negotiations? manus: yesterday was supposed to be about infrastructure, which is what gary cohn wanted to do, get on and spend, but let's take it back to markets. we have had a great run. this lovely chart, the s&p 500.

we've got the fourth longest 5%.ak of no drop, by 200 85ly began in 2016, days of rally, the fourth longest since 1960. is there any inch in you in terms of, it goes off on message, we don't have any thing on infrastructure or tax, is it itching in your head? it is less to do with politics and more to do with the fundamental backdrop. what we have said in the past is, when you start to see an interest rate rise, you tend to do some sort of correction in interest-rate markets. it takes time for that to feed through and to understand the implications of that. having only the feds start that is not an obvious trend worldwide. do we have talked about others removing the liquidity possible. maybe that is the catalyst.

as for this morning, we noted that there is a big stop in the rollout program that the u.s. has had. you've got half a million sitting on the u.s. balance sheet, how much of that are they going to roll? liquidity is going to be more important than the pace the rate rises. a correction may come when the market under appreciates that liquidity. it ties into the amazon story. is this a financing leverage opportunity? the cost of debt is cheaper than the cost of equity, so why not issue debt to finance acquisition that is strategic from his perspective? that has to ask yourself a question, as providers of long-term capital -- manus: i think the question that anna and i had this morning, this is about the 1.45% over treasuries. anna: over 40 years. guest: yes, exactly.

the question is, is that a good return? the problem we have had is we keep using monetary stimulus. we are not thinking about fiscal stimulus. it goes back to your point about infrastructure. we have been talking about, how do you actually stimulate the economy? this is more pressing for us in the u.k. to create an economic backdrop that encourages investment in times of .ncertainty the fed realized they need to actually reduce some of the liquidity bubble they have created in the u.s. economy, but they actually need the government to provide a corresponding offset to that. anna: let's spot that for just a second, piers. we have breaking news from the operator of the largest container line in the world. and other businesses, oil and drilling, for example.

they are keeping their four year outlook despite the cyber attack . they say the cyber attack will impact the results negatively by $200 million to $300 million. a number of businesses were affected, including this one. second-quarter revenue came in bank in line with estimates. they are reporting in the second quarter and loss of $269 million . the estimate was a profit of $459 million. those are the numbers we are being given. fascinating story, piers. this is where i want to bring your thoughts and. it is interesting to tap into the global trade stories here, because this is a big container line. 12 months ago, we were talking about overcapacity in this sector, and now we see freight rates going higher, and a real

shifted the balance of power in this sector. this is a classic economic 101 lesson of supply and demand. a year of discipline around capacity, and suddenly freight rates start to improve. you see global economic growth. china is stronger than anticipated. you saw data evidencing that. goodk is a really barometer of global economic demand. theus, the problem with shipping company is that it is very high and the cost space. the marginal revenue swings around dramatically. what's interesting is the topline keys gives you evidence and comfort that perhaps global demand is stronger than central bankers realize. shipping rates are climbing, and the index tracking cargo rates from asia is about

20% higher than it was a year ago. piers, thankrs, -- you. manus: coming up, we will discuss the state of asia's economy. just how star on -- how strong is the revival? it is getting bright and cheery out there in london. that is what you call a summer's day. take note of it. frame it. up 18 of 1% in london this morning. ♪

is 7:22 and london, 8:22 in berlin. the asian equity session vaguely positive. at 0.44 for you,

and the dubai market pretty flat . not much to see in terms of movement in the middle eastern markets right now. get a we are going to host of european data today. it is going to be the second round reading of the euro gdp. joining us, the cio of royal london asset management. i don't know which direction to go. i am tempted toward -- guest: i will go rogue -- manus: i will go rogue. such harmony on sunday. anna: different paper, different page. manus: and boris has come back to life. it says, the brexit-trump vision must be no -- the brexit transition must be no longer than 12 months.

in ae no longer thinking cabinet level in terms of what they want. even though the u.k. government produces the stock papers, which they are decrying. is this illusionary? guest: the problem with brexit is not that it is a one-off shock and you can measure it economically. ais is a -- not necessarily car crash, per se, but because you create these periods of volatility, how do you release it to the system? the way we have is through the weakness of sterling. we are at an eight year low versus the euro. the bank of england has always needed to keep a close eye on that relationship. i really don't want to get into the politics, but it is a question of, what does it mean for us as investors and how we manage our customers' money? .here is a vacuum they want some sense of, how can we anticipate the future?

the challenge you got is, we economy [indiscernible] are seeing consistently is stepping back from long-term strategic investments, and you don't see any impact of that in the immediate economy, but bit by bit, people are looking at alternative geographies to consider investment. you've got to the other forefront of this. it is not just fiscal stimulus. you've got to say, look, we are open for business, and no matter what happens, we will make the u.k. attractive. we will look at the greatest backdrops to invest in and say, look, that's what we will try to create the u.k. for. anna: you started this talking about the relationship between the pound and the euro. the other side of this is the strengthening of the euro. when does that start to do some damage? is it too premature to talk about that?

guest: it probably is. these things normally take about six months to feed through. when you have input price volatility, can you pass that on to your end consumer? we talk about the u.k. and inflation there, and we are not seeing wage rises. we will see more of that come through. i want to get your opinion on the allocations to the 2008 low of bank of america-merrill lynch area and you cutting services to the u.k.? guest: it is a relatively simplistic survey. the ftse 100 generates 70% of revenue from overseas. the ftse 250 is more domestically orientated. you have to be selective in that market space and understand how much is dominated by macro and

how much is dominated by corporate specifics. anna: thank you very much. keep an eye on visa, keep an eye on the corporate's. that will do it for daybreak: europe. ♪

♪ manus: good morning. shortly.ery we will bring you that when it comes across the table. what are we watching? .lame on both sides president trump to finally defends his controversial reaction to the violence in charlottesville. does that put the trump trade even further out of reach? he was there to talk about