matt: good morning from berlin. this is "bloomberg daybreak europe." i matt miller. manus: i am manus cranny in dubai. these are today's top stories. matt: new sanctions over syria. the u.s. set to announce fresh action against russian leader, -- nikki haley says washington is sending a strong message. manus: delay in the doj. donald trump lawyer asked a judge to block prosecutors from reviewing evidence in the fbi's raid on the president personal attorney. matt: fall from grace. after three decades, martin sorrell quits amid allegations of misconduct.

all right. welcome to the program here. let's take a look at some of the assets that will show us directions in this morning's markets. oil in the middle east, you would expect the oil price to rise. very strong into the action. right now, nymex crude actually down under 67 of $.55 a barrel. that is a drop of almost 1%. nymex crude, as the u.s. production numbers grow. you're going to want to continue to pay attention to the data sets coming out of the u.s., because we continue to see more rise.re rigs a three-year high in the rate

rates. jp wide. the u.s. a little bit of strength on the yen against the dollar. not a huge jump. investors indeed were buying stocks in asia in the middle east yesterday and overnight. take a look at the 10 year yield here and we see it coming up one basis point to 283. that shows you a little bit of a risk on appetite this morning. manus. manus: matt, they be a time for be time toge -- may change. are the most bearish since 2013 in terms of their net positioning. 275,000 net. 98% run a fund that beats of the market, hence the reason why i quote them. this is it for them. they basically say you want to short the dollar, by japanese. -- buy japanese.

white line is your bloomberg dollar index. u.s. dollar for them looks expensive. the market has already priced in a tightening cycle. ,he events this week are abe trump, bank of america earnings, and what those things and might be from the u.s. into russia could all play into the dollar complex. let's get your first word news now. stephen engle is standing by. good morning. good morning, manus. russia will have fresh sanctions imposed on it related to syria's reported use of chemical weapons according to the top u.s. diplomat to the you ignited nations -- the united nations. nikki haley said steven mnuchin will announce new sanctions today that go directly to any sort of companies that we are -- were dealing with equipment related to a thought and assad andhat --to

chemical weapons former fbi director james comey has said donald trump is "morally unfit for office" and he cannot rollout russia have -- rule out russia having information. he introduced a barrage of tweets. in an exclusive interview with abc news, george stephanopoulos, he concluded that during the presidential campaign, trump was dishonest. >> i chose those words carefully. i chose the were dangerous first. i do not think it's an overstatement. >> why not? >> i worry that the norms that the center of this country, we always have. what we have in common is the set of norms, most importantly the truth. if we lose that, if we lose the tethering of our leaders to that

truth, what are we? stephen: president trump has taken the extraordinary step of asking a judge to block his own justice department from viewing evidence about his private lawyer seized last week in an fbi raid. the attorneys filed court papers seeking to temporarily barred prosecutors from reviewing evidence taken during the raid last week, home office hotel box, andety deposit phone of michael cohen. japan and china have said they will work together to encourage north korea to abandon its nuclear program. it came as china's foreign minister made a rare trip to tokyo ahead of the korean summit and president's potential meeting with kim jong-un. premier lisa trump is said to -- ng is said to visit next month. theresa may could be sent back

to the negotiating table to engineer a second referendum. the final brexit deal comes to parliament for approval. there will be a take it or leave it vote on the deal. it negotiates with brussels. argues thatnk parliament will certainly be able to amend the motion. family spokesman has said that former u.s. first lady barbara bush is "in failing health and will not seek additional medical treatment." jim mcgrath saying the 92-year-old is surrounded by her family and thanked people for their messages of support. she married george h.w. bush in 1940 five. they had six trojan and have been married longer than any presidential couple in american history. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top .

manus: thank you very much. the u.s. is to announce a new set of sanctions against russia today. this is washington. the measures will be in that companies deemed to have worked with president assad and his chemical weapons program for the french president, emmanuel macron, called out russia for enabling the syrian regime. >> of course they are a publicist. i have said it before and i talked to president putin this morning. they did not use the chlorine, but they have worked methodically towards weakening international the community through diplomatic means to prevent the use of chemical weapons. manus: joining us now from hong kong is our senior editor, jodi schneider. good to see you again. phraseologyis using like locked and loaded, but the possibility of more sections on russia, how are these going to be connected to the serious

story? -- syria story? jodi: nikki haley said the u.s. want to impose fresh sanctions on russia for its involvement in syria. we don't know exactly what they would be. the treasury department had no comment on them. these will be coming soon. she also said the u.s. remains locked and loaded for potential further action in syria should it become necessary, even as boris johnson came out and said this is a one-time event. there is a little bit of division as to whether the u.s. would look at further action as other countries are saying that this is only related to what occurred over the weekend. this comes as president trump is trying to distance himself further from russia as robert mueller's invest edition into

russian tampering in the 2016 election heats up further. matt: the pentagon is saying missile strikes on syria hampered the regime's ability to use chemical weapons again. what do we know and what has been the reaction in the u.s.? jodi: it appears to be successful. we are not hearing of any resistance from syria at this point, and we are not really hearing anything further from russia either. this has helped president trump in the short run. his approval ratings are at 40%. that is a historically low average. is the highest it has been this year. there appears to be support for these limited strikes. manus:t's been a busy -- it's been a busy weekend in terms of the tweets machine, jodi. byt mission accomplished

going what george w. bush said at the end of one of the gulf campaigns. i mean, i should not have said that. what has been the concurrent thing? much at as well very play. talking about comey, a whole host of issues. there's lots happening, and the twitter machine has been very active this weekend. president trump said mission accomplished, echoing george w. bush, what he said after the beginning of the iraq war. it went on much longer than that. he had five tweets about james comey, the former fbi director. is getting aook lot of attention, including high-profile broadcast interview where he called president trump and said he was morally unfit to be president. president trump sat back, saying mr. comey was one of the worst fbi directors in history, and

that his memos were fake. .e -- there is also action they are taking action in washington to try to stop the justice department from acting on material that was seized in an fbi raid from president trump's own personal lawyer. there is a lot happening in the background, and president trump is tweeting a great deal -- tweeted a great deal about it over the weekend. thank you very much. thanks to bloomberg senior international editor jodi schneider, for us in hong kong. joining us now on the program's on the program- is peter. what is your take on the syria strike? how should this affect the market environment today? peter: i would not think it has much legs on it, to be honest with you. people got very fraught. north korea was going to send nuclear bombs to us less than a

month ago, and this appears to be an equivalent. i don't think anyone in the particularly responding to it. treasury yields have hardly collapsed. anyone iso indication running for cover on the basis of this. very good morning to you. sorry you left in splendid isolation. i know you miss us all. i know you miss anna more than you miss me. here we are. ,e had a p three coalition coalition of p three over the weekend, yet here we are with the u.s., holding up the lightning rod again of more isctions on russia, and that what irked the market last week, rather than the prospect of a military strike. peter: the russian market, that's for sure. manus: it did irk the russian market. peter: the truth is, russia is a

it is a sort of show and tell. we know where russia want to support it. in the political scene, it's no great shock. for everyone in syria and we should all reflect on that. i don't think it will be a major staging post. to suggest that is ridiculous. they avoid anywhere near the missile curve. which bit of the russians knew what was coming? and was missed it's the second -- coming in was missed? -- matt: it's not an excellent time for investors, and you point out that we are looking at shrinking liquidity right now. capacityking at constraints globally as far as

unemployment is concerned, as far as workers available are concerned. we are looking at may be slower growth. at least, the peak of growth rolling over. higher inflation. how do you see that all coming together? peter: growth has already. q1 showed that. europe was december, january. japan is rolling over. america was weaker on q1 than q4. it's innately obvious that growth is slowing. the real conundrum is that people have priced insomuch good news, so much bullishness, and expectations survey data meeting as well, which is another conundrum. we started very expense of a year ago. we went into this year even more expensive, led by the fangs primarily. emerging markets were strong, too. this is a reality check. i was here a month ago, and people were trying to explain it away. corrected into the earnings season. you may see the earnings are still ok.

people ought may feel inclined to push this market backup. growth peaked and liquidity is tightening. valuations are very punchy. that is reflected in the meetings we had with fund managers, the people we talked with during the market, none of them can get excited. immediate phase where we have got very still, very invested positions. i don't think anyone has taken fright. we have not reached any fear stage whatsoever. we reached a jolt and a bolt to sentiment. i don't think that reflects the new bear market yet. you will have torture. bear markets are born of torture. you will have more corrective phases. the most important part is the technical change. we are dancing around it. if that breaks meaningfully from here. we are going to have a very different marketplace. people are fully invested. that is a giddy combination.

manus: i like a giddy combination. giddy,ket that is not probably crying. dollar investors. we flash it up earlier. the producer was only giving you -- more pain to come. we are the most bearish since 2013. a quarter of a billion short positions. are the bears done with this, peter toogood? what do you make of it? peter: the dollar is interesting. you don't see dollars rallying. from the perspective of international investment, it's interesting. people do still tends to avoid high asset allocations. they are not referencing the u.s.. u.s. companies are sending money out, buying abroad.

there is a lot of activity from u.s. companies. that will be another effect as well that's interesting. we keep site, when looking at the dollar, its biggest headache is the emerging market. let's not talk about the dollar for a minute. it's a constrained for emerging markets. it's one of the reasons that they are struggling a bit more this year than they were. it's on the rest of the world, i suspect. that's probably why you see the dollar, from our perspective. it is this idea that relatively's "the rest of the world is ok. take your view. imf convinced by that. i think the u.s. is an engine of growth. the second half of year was not a bullish one everyone expected out of the u.s., by the way. consumer, ok. i would not call it sunday. q1, so far, the u.s. consumer has been pretty uninteresting, indifferent. there could be reasons for people who are sentimentally driven by that as well. most people are short dollar.

he pointed out how that is. bond managers certainly are. when you look at positions, they would rather be in the aussie dollar. also canadian to a degree, which may surprise you. their positions are against the dollar. everyone has got a global mandate. manus: hold those thoughts. let's get the crew to get you a little cup of coffee, cup of tea. that's peter toogood. peter: i got one. manus: good. peter toogood. matt miller and myself. about to leave for work, don't worry. we can be with you on the journey, part of your life. bloomberg radio, dab digital radio in london. matt. up, a parade of fed official set to speak this week. we got treasuries and the central bank's policy with peter. is the next big

wall street banks to report earnings. we will discuss that and more. this is bloomberg. ♪

manus: if the live shot of singapore. 9:22 a.m. here in dubai. 1:22 in the afternoon. gray skies clouding over msci. the market is declared mission haveplished too soon -- the markets declared mission accomplished too soon? not exactly running away to redeem clings about about market risk in the equity side. stephen engle is never in doubt. he has your business flash. stephen. stephen: absolutely. never in doubt, but the future

of the world largest advertising company, wpp, is in doubt. it's in sharp focus this morning after the abrupt departure of its founder and ceo, martin sorrell. the boards priority will be finding a longer-term solution to replace a stopgap plan of having to interim operating chief. the financial times is reporting aat sorrell doesn't have noncompete agreement with wpp, leaving him free if he so desires to start a new ad company. advent international is close to acquiring sanofi's division in a deal valued at 2 billion euros, including debt. according to people with knowledge of the matter, the french drugmakers board is scheduled to meet today. representatives for sanofi could not immediately be reached for comment. a spokesman for advent declined to comment. and that is your bloomberg business flash.

think very much for that, stephen engle, with the news. this week, a parade of u.s. federal reserve officials are set to speak. they willipated -- stick to the message outlined in the minutes of the march meeting. of the pickup in volatility, gradual rate increases are still on the cards. the boston fed president, eric bankgren, said the central has to be vigilant and warned about the consequences of overheating the economy. joining us now is peter toogood, cio of embark group. what do you think the risks are of the u.s. economy overheating? peter: you could argue it is already capacity constrained. you talk to fund managers, skill shortage, material shortages, some of some of that -- so some of the is intangible. you do indeed continue to tighten. there is nothing to suggest the u.s. economy is going off a

cliff anytime soon. the stock market correction, i don't shut about that. if you are the fed, prepare for the next down cycle. why would you not continue to be consistent in that message? no new news, i think. they are sticking to it. the economy is ok. interest rates are still though. i think they are doing it. manus: i've also got another chart. i do like a chart. this is the short position. short dollar, short bonds. the market is readying itself for steady as she goes gradual mess. piling into the short and seems to be the favorite trade of blackrock. how do you look at this whole curve trade and where the flow of money is going? peter: short is the key.

you need a bond rally. the bond rally at the long end would confuse everyone. it's the cpi question for the growth is going to be 3% in the u.s.? not to similar to last year. good. you have growth, not negative growth. slower growth. it quite interesting. end,one is in the short underweight duration, or crowded in the short end. everyone is working. eventually, it does reflect all of those things. does it flatten aggressively? we'll see whether the market has tipped over. people are crowded into the short-term. the interest rates continue to rise. with all consensual. there's no reason for it to be wrong. isus: sometimes, consensus

the trade where you want to be. we have more value to extract. peter toogood, cio with us. up next, matt and myself and's or martin sorrell. myself and martin sorrell. this is bloomberg. ♪ this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. >> good morning.

it is 7:30 in the morning in berlin. the u.s. dollar losing strength against the yen. again gaining some ground. -- the yen gaining some ground. let me give you what you should be watching this week. it's a very busy one. tomorrow we will get gdp out of china. it looks like it will be stronger than the targets set by the president there. manus: yeah, 6.8% is the number

in china, matt. i think the thing for xi jinping is really, he cannot afford to miss a beat in these grwoth numbers. it's whether there is an escalation or any risk. we have a number of lovely c harts, charting the cresting. i love that phrase, cresting. donald trump will be meeting with shinzo abe. the men on the left, donald trump, his ratings have gone up on the month -- sorry, the year over the weekend in an abc washington post poll, where as abe's have slipped. it will be interesting tomorrow. matt: i think his ratings have gone up because of the weekend. that typically bolsters an american president's rating. still, though, 40%, fairly low.

much lower than the average for a u.s. president. especially we have watch this for the possibility of the reentry into the tpp for the u.s. that onhat yo thursday -- on thursday merkel and macron. and then macron visits the president in the u.s., and then merkel. vying for the position to get themselves off the tariff list. manus: i think it is interesting merkel has taken that position. there was a poll in germany, huge support for merkel not being part of that military operation. matt, a lot more to get to. we are circling back to somethin

g, hard tiem for opec and non-opec. the big question around the ether toace, matt, is wh use the five-year average or the seven year average. matt: that's interesting. the rig count in the u.s., going up to a three year high. that could concern those in the middle east because they want to get the oil price of ahead of the ipo for saudi aramco. and has fallen off after the weekend. manus: let's get into these markets, matt. guy johnson, standing by. guy, good to see you this morning. the mliv blog, the line to kick off the day, mission accomplished is the rhetoric for trump, but is it mission accomplished for markets? guy: i do not know what the mission is for the markets, matt.

but you have the before and after picture here on the gmm. the nymex, down by 1.6% on friday. uncertainty surrounding the reaction. than the relief story monday morning and that is reflected within the russian ruble, which is rising. the before and after picture represented here. i wanted to mention the chinese market, it is trading down strongly. both the mainland and hong kong market trading down. a very interesting stories surrounding hong kong right now in relation to the currency. the markets last week trying to defend the bottom of the hong kong dollar range. will they continue to have the spending they did last week for that story to carry on? there's another angle on the russian story as well. there was a premiumm. matt mentioned the rig count. you have got to bear that as well. brent crude trading down 1%, and wti the same as well.

a little bit of a premium when you factor in the russia story. a technical analyst from credit suisse believes brent to be poised for a big move here. in europe, a mixed session. ftse futures pointing to a flat start. andtake a look at the u.s., you are looking at a little bit more. the s&p, up by 0.5%. is seems the two day moving average is holding, you can see that within the banking sector. of therisk point of view day gets better as we progressed towards the wall street opening. matt, back to you. matt: thanks, i will see you i in an hour. martin sorrell has quit as ceo.

his resignation followed allegations of personal misconduct and misuse of company assets, both claims which he denies. the aussi investigation by the board, wpp shares have lost 1/3 of their value over the last year. we have more from london. joe, let's start out with who wpp is looking to take over as ceo, probably the most important issue for shareholders right now them. joe: right now they are looking at one of the chief operating officers, signaling a continuity of strategy. or do they go to a candidate lake erie bowman, who is running an ads network in japan, or somebody from outside that world, like jeremy derek, for a big name within the media sector? the they question for wpp investors this morning. -- the big question for wpp

investors is morning. guy: we have a cracking story th is morning, which is a backdrop to the revenue drop at wpp. what will the new ceo do there, what is the shape of the business there? i love the fact he does not have a noncompete clause. i have this vision -- what day is it, monday? i have this vision of martin sorrell walking around berkeley square, looking up brokers. i feel he could get marketing at morton's and open up a new shop by 5:00 p.m. today. joe: maybe he could. martin sorrell always said wpp is his baby. we are 33 years on, and he is no longer in control of that baby. maybe he could set up his own advertising venture. there's no sign of that dimming.

one cannot expect he will go away quietly here. joe, let me as sk quickly. what did sir martin do here, for the completely unknown? joe: so, the nature of the specific allegations is not known. probably know is there was an investigation into allegations of personal misconduct and misuse of company assets. the company said the investigation has concluded, but they have not said what the allegations were. some critics said yesterday maybe they should, maybe for transparency sake they should say what he was accused of. as of yet, they have not and maybe we will never know. the yeah, i think it was in story we had this morning, talks about transparency. this has been one of the big issues that has been lobbied at

wpp over the years about transparency. the circumstances around his exit are regrettable. so, cracking story to read there about transparency. thanks for being with matt and myself. peter, could i ask you -- i don't know whether you have an individual repost on this, but this is shocking. for me, it was the haste with which martin saraorrell spliced, diced and went. peter: he took a big package last year, signing his own death warrant. they did not respond and do you really want a conglomerate business in a world where you are not focused. strategically, he had done such a great job, but we have reached that point where the nature of wpp's business was inappropriate for the way advertising

generally is moving and just acquiring more businesses, g-0 star in terms of the long and short duration business. it was not the best of ideas, probably and the package last year caused a stir. they shot it down. difficult, awkward. matt: peter, does that mean you expect -- investors expected breakup of the company as soon as they get leadership in place? peter: it is very difficult to orientate that, matt. if you look at the commentary around the split, something wpp is not necessarily as it dan's at the moment in the best ways to take advantage of. the best answer would be a restructuring at the minimum i suspect. a better focus. if you talk to shareholders that is what they have been asking. guy: peter, the one story which has tipped onto the back burner is the butchering of tech

. value.lion worth of said wely economists would see more contrition from technology companies. what do you reckon? when it comes to tech, how are you positioned? hardware, software, creating value, debt, facebook? for me, it's a case of perhaps the emperor's new clothes have fallen off. [laughter] peter: or they were just very expensive. guy: that's true. peter: the meeting last week was apparently one of surprise. the fact this was a revelation i still find amazing and i think the senate's response as to "how does this work" is amazing. if facebook does what it says it even they could become

more interesting is a business. the bottom line, amazon, google, all of them, they are going on vertical lines. they are eating other people's lunch. every manager meeting we have, they talk about whether they're affected bycould be not internet or technology, but amazon itself. that's an amazing ability of amazon to maneuver itself there. on the future, they were, and probably still are, in some cases, very expensive. matt: peter toogood, ceo of embark group, still with us. citi group results came out friday. joining us for analysis, tim craig head director of research at bloomberg intelligence.t

got earnings numbers from the big banks friday. what was the key take away from that and what are the implications for the banks, for the boards going forward? tim: it is quite simple. equities are gaining. that's how it has been during the first quarter. the equities business on the year on year basis for these two 25%up somewhere between to 45%. equities were up 55% to 65% quarter on quarter. this has applications that are good for morgan stanley, goldman sachs, ubs, credit suisse. not so much for deutsche bank, which you know, continues to be accord, andits own broadly speaking it is more fixed income oriented. that's where one of the weak

points were during the first quarter. guy: i put together a grr, which 600 correlated data. jpmorgan has a big note out from late friday. buy oil, buy all services. let me get rid of that pesky thing --there you go. these are the standouts. which sector stands out for you, because this is a top level down view. but you go deeper. >> the first quarter, along with the third is a little bit of an odd duck from the standpoint of european earnings. remember, not that many report q3 earnings. we have to take everything with a grain of salt, but energy is certainly upfront. a report on a yearly basis. -- on a quarterly basis.

along with that, we have seen positive revisions going into the quarter for discretionary and materials. so, call it more of a cyclical bend on the flipside, if you look for the full year, where we continue to see problems here in some of the more defensive areas lthcare,rticular, hea which unfortunately, given the benefits they bring broadly speaking, is still a value trap. revisions are negative and we still have yet to see life there. guy: excuse the pun. tim craighead, the director of bloomberg intelligence research. if you are a terminal user, you can interact with the charts. check that out at gtv . you can adjust the data and the time period, whatever it is you need to do there on the analytics.

matt? let's see howt, hedge funds can adapt to the changing environment. we get an idea from aberdeen standard investments from a recent paper they published. plus, the governor of zimbabwe's central-bank joins us here at 1:00 p.m. u.k. time. you do not want to miss that. this is bloomberg. ♪

matt: it is just 10 to 8:00 in berlin, yes. i often think in london time. in london it's 10 to 7:00. you are looking at a cloudy day over the brandenburg gate with the euro, i mean, barely budging against the dollar. not a lot of movement there. let's get the bloomberg business

flash with evening -- with stephen engle. reporter: the future of wpp is in sharp focus after the abrupt departure of the founder and ceo, mark sorrell. -- martin sorrell. they have a stopgap plan. meanwhile, the financial times is reporting that sorrell does not have a noncompete agreement with wpp. he can, if he so desires, to start a new ad company. the online fashion retailer backed by tencent is in talks with several investment banks for a u.s. ipo. e startup could be valued at $4 billion. it is a chinese technology company looking to sell shares.

the global ceo of starbucks says the arrest of two black men waiting for a friend at one of the philadelphia outlet was a reprehensible outcome. kevin johnson intends to apologize personally to the two men. demonstrators protested outside of the coffeehouse. that is your bloomberg business flash. before we get to our next guest, let's look at the asian markets. hong kong stocks are dropping and they are watching the central bank, which was forced into interventionist mode last week. asian stocks are declining, lingering. the csi down now over 3% and hong kong in china, the steepest monday losses in more than a month. the defacto central bank was forced to stop purchasing the local currency last week to preventive dropping past the week end of the trading ban.

a lot going on within the asian markets, not just syria. let's talk about the hedge fund industry, it must adapt to meet the changing needs of investors -- what do they say? adapt or die. to achieve this, they will adapt artificial intelligence over the incoming decade. they will be changing internally to help them better compete. investment,aberdeen the sponsor the report. great to have you with us. when i see reports like this about artificial intelligence, i am almost filled with dread. if something goes wrong, this passive a.i. orientated leadership is stacked with risk. prove me wrong, andrew. good morning. andrew: good morning, manus.

i think the point you raised is key. it is the darwinian nature of the industry that's being shown this, drawn out from report. artificial intelligence, that is one aspect, but really it is any of the strategies, whether they be discretionary or quantitative. for those who are short-term trading and the nature of how they run their strategies, they will have to compete by evermore resource into the research and ding so it can be brought about through elements of machine learning, artificial intelligence. but more importantly, it is about that quantitative opinion we see across all strategies that will be vital. matt: so, it is not so much, andrew, about a robot making calls and executing trade, it is more about taking a much more

data driven approach and using, rather than the hedge fund titans of wall street, you are bringing in physicists and engineers from m.i.t. instead. matt.w: that is correct, a differentill be style within organizations in the future. i think there will still be in-site judgment. the ability and knowledge that brings to the table, but there will be many scientists, coming from physicists and mathematician's coming from different understanding and experience brought into the firms. more importantly, to give that ability to understand data, to bring to the table in a way that can draw out value and generate that for foreign investors. guy: one of the lies within this

report, andrew, we have touched on this several times. sustainability and in many ways, evolution,ion, the will allow much more competency when it comes to those mandates. efficacy, or sustainability. berw: i believe that will very important. investors are expecting to see this coming from all the managers they work with. and hedge fund, managers will have to evolve their understanding but also the way in which they can incorporated within to their strategies. and i think the ability to look through data, to prove the dataset and then the way in wh ich they can filter that to bring about those types of securities as exposures that will make sense, and meet the guidelines that will be set by the investors coming to them.

they will be improved by the use of these techniques. more importantly, it is essential they do deliver the because of the most important things as well that comes out of the reports is the client driven nature of what is required at this stage and how they are responding. that is key for the future of the industry. mccaffery, the global head of client driven -- a key part of his title, and the paradigm shift we are talking about. client driven and multi-manager solutions at aberdeen standard investments. up next , the usi's new sanctions against russia over the reported use of chemical weapons. we discussed the geopolitical risk, especially for a russian market, which has taken such a huge hit and a big declining ruble against the u.s. dollar. we look at those aspects next. this is bloomberg. ♪

manus: good morning from dubai. i'm manus cranny. matt: i'm matt miller, live from berlin. matt: new sanctions over syria. the u.s. will announce fresh action against russia later. nikki haley said washington is sending a strong message. matt: delaying the doj. donald trump's lawyers ask a judge to temporarily block prosecutors from reviewing evidence from the fbi's raid on the president's personal attorney. a fall from grace, after three decades at the helm of amidstrtin sarao quits

allegations of misconduct. ♪ manus: welcome to daybreak europe, live in london and ddubhai. declared his mission has been accomplished. this gives the asian market something else to do. and chinese gdp. but at the moment, it's ekking tout the smallest gains. trump will meet abe. goldman sachs, bank of america, more think earnings. is jamie dimon right? they will be more margin compression and pressure as the week goes on. we are eking out the smallest gains. nasdaq futures are at the bottom of your screen and you can see a

very small movment. keep an eye on the dollar-ruble. the ruble is rising. that's the ruble rallying there. the dollar is falling. the ruble -- more sanctions to come, yet the ruble rallies? matt: very interesting. the ruble had a really tough week. 12%.week the rts fell it has been tough for russians. take a look at some of the other risk indicators. the yen is one where you see a little bit of strength. the japanese currency weakness for the dollar. as you can see there. right now we are looking at 1.0720. crude oil will be interesting to watch. we had a pretty incredible gain. around $72 trading and nymex crude around $67, but

down below that now, the rig count bounce to the highest thels in 10 years in us.. you have supply coming online big-time within the united dates of america. -- united states of america. look at the 10 year yield, though the color is red, the arrow is up. that means the u.s. treasury yield is gaining, and people are selling off on bonds. you could see more of a risk-on day today. manus: a little bit of breaking news coming through from anglo gold. it looks like the current ceo is set to step down. he is going to go and join. research has started. the surge has started at anglogo ld. he is off to vedanta. the global search is underway.

the company is trying to say this is continuity. he will remain at a position at 30 ofgold until august this year. so, no aggressive departure. matt, we mentioned what a weekend would be, but it will be interesting. here you have equities, a little bit better bid. u.s. equity futures by the way, should show a rise. a will show you you those in second. certainly one of the longest serving members. the boss said, we need restrictive policy at some point. we must be vigilant. bonds are a little bit lower, nothing too aggressive on the down side. we have a lovely couple of lines . regardless of the pickup of market volatility, we have the flat steel curve since

2007. the oap's are down. let's see what the new sanctions are for russia from the u.s.. let's see what comes out of the trade discussions between abe and trump. stephen engle is standing by with your first word news. stephen: russia will have sanctions imposed upon it. that is according to the top u.s. diplomat to the united nations. speaking on face the nation, nikki haley said steve mnuchin will announce new sanctions today that "go directly to any sort of company that is dealing with syria's president assad and chemical weapons. this comes as the u.s. and u.k. assess the next apps after friday's strike on the country. james comey has said that donald trump is "morally unfit for

office." and he cannot will not russia having incriminating information about the president. trump treated a barrage tweets. george stephanopoulos interviewed him and he said that that during the campaign he was dishonest. >> i chose those words carefully. i used the word "dangerous," in a do not think it is overstated. why not? about guns ort taxes or immigration and we always have, but what we have in common is a set of norms, most importantly the truth. that, thelose tethering of our leaders to the truth, what are we? sebastian: president trump has taken the extra very step to ask a judge to block his own justice department from viewing evidence about his private lawyer in an fbi raid.

the president's attorney thought to temporarily prided justice department prosecutors from reviewing evidence taken during the raid last week on the home office, hotel room, safety deposit box of trump's personal n.wyer, michael cohe japan and china said they will work together to encourage north korea to abandon the nuclear programs. the latest sign of improving relations between asia's two largest economies and as china's foreign ministry made the rare trip to tokyo as part of a korean summit and part of president trump's potential meeting with kim jong un. u.k. lawmakers could send theresa may back to the negotiating table, engineer a second referendum or process the general election when the brexit deal comes to parliament for an approval. the government said there will vote,ake it or leave it

but the inspirational think tank argues that parliament will almost certainly be able to amend the motion. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . matt, manus? manus: thank you, from here, the u.s. is announcing a of sanctions against russia today. this is washington and the impact of the missile strikes on syria, the measures are aimed at companies deemed to have been working with president thought. and his chemical weapons program. last night the french president call that russia for enabling the syrian regime. >> of course they are accomplices. i said it before and i spoke with president putin this morning. they did not use the chlorine, but they have worked methodically towards weakening the ability of the international community through diplomatic means to produce the use of chemical weapons.

guy: when you see macron and yheresa may's responses, thae are diverging away from the theecta of p3 over weekend. what did you make of donald trump's statement with regards to a call from russia. there is military intervention in syria and that is why the war -- changed in april of at it assets. he said he tried to convince u.s. troops to stay longer and that is a true fact. two weeks ago he said, we need to get out there pretty simple if the u.s. is going to stay there longer, are they going to the troops there?

what is the aim of the mission? are we going to see more aggressive involvement. that is what we should be doing eye an on. regime's ability to use chemical weapons again. is -- is that the truth? if it could have been done before, why not? >> there is a lot of skepticism .bout that, matt forte chemical weapons facilities can be rebuilt elsewhere and they can attack again, if they do not see the deterrence as credile. you know, what the u.s. allies did this time is compared to last year, which had one country lobbying 1500 missiles. this guy said, let me look at

three countries, a slightly larger coalition, double the firepower and then you have fire range are saying, if you want is to join, we will join. this risk, if you want. or if there's going to be any contemplating of more attacks. is the response going to be stronger next time, will we see more countries and the like? -- s: matt: thank you very much. ay lee, us now is w let me first ask you about the geopolitical risk in the market. bounce,seen stocks good forre looking the market and the u.s.. it does not seen the market is as concerned post bombig as it was pre-bombing way'

>> what we have seen in markets>> is investors g investment within the early part of the season. at the end of the day, when we analyze what the impacts of june political development are, it location. i have seen so far coming year to date, growth has been capped so much. but still stabilizing at a very high level and earnings, the expectation has been by a tax cut in the u.s. and because of all of that, the u.s. is having to look at this boost. and that is why we see markets trending higher last week, but also with starting to see flows back in as well. a reasonably start of the year.

guy: i thought of you when i viewed this chart yesterday. everybody was having a lovely sunday in london and we put this together in the library, it is the flow of money into equities. a lovely line, you could go 2% all day every day. trump tweets laid on top. the are you adding money on these fifts. the you mean a month of money being added in lump size to the equity floor? yei: not to the extent we saw last year. 2017 is the year we have found it remarkable in that every single week on a global tt faces, we have had three weeks of aggro gains also. not the best sounding, considering the pile of money sitting on the outlines. this time on allocating on the deep because we are also showing

liquidity and because of the outside being cap and because of headlines. but they have got to say they are not doing it. they are just a bit more selective. so, what we have seen so far is that emerging markets have been a lot more favored as a , but theyn for a lustrous are ok with 50% of the global equity benchmark. matt: do you expect that to continue? i mean, global stock valuations have come down for the markets.d we are looking at 17% right now for the u.s., s&p, looking at 14. t 14.5%. even lower in asia, less than 14%. does that mean you find margits.

wei: with developing markets, you can compare them with the broader benchmark we do not expect the rating to that even more stretched for this year. retails can govern earnings. and so far, earnings and upgrades have been very boldfaced and have really been .uite impressive as well this year, we are looking at low teens and since then, we have by 7%ese upgrades and higher. that suit of returns, steel makes the stop more attractive. income credit with government bonds. guy: when we look at the global growth story, we have got a lot of challenges and headwinds in

front of us this week. more sanctions potentially against russia. discussions between trump and abe. have a look at this, this is in .he gpp i am talking but upgrades to earnings estimates, but interest of global growth, how do you see the biggest risk? where is the biggest risk. is it china, asia, or is it in developed markets in the u.s. and eroupe. this was forecasted from the ocd. wei: the biggest risk we see to changesst pace are the in growth that come from trade tensions. are nontriviale risk affects. there are -- we are talking about the surprise for global growth, specifically looking at g7 this year.

spple.psdie -- the leadership of growth last year is starting to move and has already started to move from u.s.e to back to the because of the greater fiscal package and tax cut and emerging markets see greater potential there. the with picture, it's important to recognize that it is less. you can realize the diminishing outcome expectation. but it is a reasonably high level for the g7. looking at 2% to 3% growth, which is quite robust. that should be supported by the sentiment, if we do not see thes coming from trade side. much!!!nk you so

-- one intellectual think tank says it might get his opportunity. guy: and a little bit later, the zimbabwe'd central bank manager joins us here on bloomberg at one a copy and time. -- at 1:00 p.m. time.

matt: good morning, it is 7:21 in london and 8:21 in berlin. we of 40 minutes away from the market open, a little bit less. let's check on how the markets are trading. futures gaining a little bit. you see that until you get to russia. the bund yield rising one basis point to 52. and s&p futures are gaining,

right now about 0.3%. let's get to the bloomberg business flash with stephen engle. stephen: the future of wpp is in sharp focus after the abrupt departure of the founder and ceo martin sorrell. the priority will be finding a long-term replacement and the stopgap plan of having an executive chief. sorrell does not have a noncompete agreement with wpp, giving him freedom to start a new ad company. advent international is close to acquiring the european generics division in a deal valued at 2 billion euros, including debt. the french drugmaker's board will meet as early as today to sign off on the deal, which could be announced in the coming days. representatives from sanofi could not originally be reached

for comment outside of working hours in paris. and folks from advent declined to comment. that's your bloomberg business flash. manus: the u.k. lawmakers could set their own course for brexit. the final deal will come before parliament for approval later this year. that is coming from the international thinktank, which says members of parliament could send theresa may back to the negotiating table, and during a second referendum and prompting a second election. wei, when you hear comments like that from thinktank, is that constructive in your view? or is that the worst of every scenario that democracy might by decried? wei: i do not think there will be a lot of headlines going back-and-forth.

i do not have the expectation of that. the bottom line is the conditional agreement, the transitional agreement that has been agreed on is likely going to decrease the possibility of a an out for next year. but it does raise the risks for the political appearance towards the end of 2020. risk form line is the the access without the deal is still there and that is why we see this back-and-forth. now, in our point of view, the u.k.'s stance for a vague deal is perhaps a bit too optimistic. but going into the deadlines for negotiation, both sides could

soften their stance. now,f you look at trading it is about at the same level before the referendum. you wonder if that is a touch too optimistic. and if you look at markets and investor flow, internationally, they have been staying away from the you can market because of the uncertainty. matt: you think that it is a touch too optimistic? we are looking at 1.4266, getting up to pretty lofty levels with the cable rate. as you said, we are at the level we were before the referendum. do you think investors should be wary, selling the pound right now? wei: we have greater conviction behind the volatility level of the cable rates. there is so much driven by headlines and it's hard to get

the immediate direction right. we do expect growth to take a bit of a hit. depending on the kind of deal we end up with, which is why warrants later questioning. li, thank you for joining us, the head of ishares emea investment strategy at blackrock. we continue our conversation with her on bloomberg radio. that is something you do not want to miss out on. check it out on sirius xm, if you are in the u.s., or on bloombergradio.com. anna edwards will be back in the hot the tomorrow morning. we have u.s. equity futures a little better bid. the question is, is it ad de-

escalation story, versus new sanctions? there is your dollar-yen, looking good, down 0.5%. this is bloomberg. ♪ welcome to the xfinity store.

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♪ guy: welcomed the bloomberg markets. this is the european open. i'm guy johnson in our london headquarters. matt miller is back in berlin. cash trade less than 30 minutes away. ♪ guy: muted markets. serious strikes. asia had a mixed session, both europe and the u.s. higher from an equity's point of view. an ever upped