>> good morning from bloomberg's european headquarters in the anna f london, i'm edwards. >> i'm matt miller from berlin. this is bloomberg day break. these are today's top stories. for deelsz deals, sprint agrees to buy advanced talks. matt: britain's home secretary cabinet exit in six months robbing the prime ally,ter of a pro european oes her departure point to a harder brexit. minister finance

tells bloomberg he wants to take advantage of global growth. >> we want to take an opportunity. inwant to capture the moment the best way possible. anna: good morning, everybody, matt, welcome to day break europe and welcome to audience across canada on bnn bloomberg. cairo n the program in speaking to some of egypt's leading voices. us, what is on your mind? manus: they're honking their horns, a whole another language here. over this city. he finance minister has

ambitions, inflation is on the downside, we talk about the bond market and something very special for tomorrow. matt, good morning. anna: good morning, we'll hear more from your interview with egyptian finance minister later on in the program, more egypt, beautiful shot there. coming up later in the program, interview with the egyptian finance minister. let's show you what is happening in the markets overnight. up ulled out the hang seng, by 1.5%. closed t showing this, in china and japan today. he korean market is getting a bit of a boost, it's attributed to what we saw on friday. that in mind, the dollar is another .9, the peace dividend, is that something that

e're starting to realistically trading. the growth story, great data on friday, it cooled a little bit united states, came in below estimates in many cases in europe. p.m.i., the pound is pretty 137.85, far from the 140's that we saw a few weeks ago, has to do with brexit turmoil, losing another minister this week, esigning, accepting her resignation in the space of six months. dd in to the political shenanigans, the weakness of the u.k. data. att: we saw the worst growth since 2012. i have a chart showing that here

canadian viewers to check out what is going on, the partner.lth the actual growth in purple coming variety down. the forecasts in white, you can post-brexit ore than we actually got in the u.k. little bit ecting a of a recovery. we could see at least a pickup forward, wth going anna. janet napolitano the global armth story and others factoring into the markets. expectation in united a big deal for deals. of the peaking to one key voices, kevin, this is a business that is trying to do a make it a lot bigger in the united kingdom. how does that help it take the

discounts and the the likes of amazon. we'll talk to him. just after ng 7:00u.k. team. here is the first update. anna, in the u.s. we have seen the trump administration relief from steel nd aluminum tariffs to some countries, but not all tomorrow. ross declined to identify which nations would be spared from the tariff. announcement will be made before the deadline. ations have been asked to accept for quotas. anna has resigned. calling for been her to step down. prime minister teresa may has resignation. counterpoint to

brex brexit. kim jong-un is turning on the charm ahead of his summit to donald trump on the u.s. re president to ease sanctions on has made y before it significant concessions. the south korean president says invite foreign journalists to witness the main wn of north korea's nuclear weapons test site in may. to came after he pledged complete denuclearization in a moon on friday. dramatic and embarrassing drop and the government is under fire for a tax policy that put consumers off of buying instead of fossil fuels. to less than 700 last year. he government will now

reconsider the scheme. > we have a tax incentive for electric cars. you can discuss whether it and i will not is ude that, but today's about the supply side, to so speak. announced today as well after the summer break we will a package. air and on a day on twitter, powered by 2,700 120 alists and analysts in countries. in king in on the markets asia, we have japan and china and tomorrow pretty much every market apart those countries, australian will be closed. the first time that investors in reacthave had a chance to

to the news that the north and the war as nd announced late friday, over the course of april, the regional is on track of a monthly gain of .9 of 1%. we have been watching, eading a rally in singaporean banks. share also seeing a price. watching these korean stocks if the n the fact that north and south do end that war, interconnecting businesses. in seoul, another colluded rs have been on limiting the supply. of action ing out until thursday with a complete stock split, anna.

anna: the u.k.'s prime minister ally, the fourth member to exit within six months. amber rudd resigned. rudd faced allegations of misleading parliament over for deporting immigrants. inal elections are happening the u.k. which has heightened emphasis of this story. very good to have you with us, good to see you. let's talk about u.k. assets, a here, the things in ongoing political context which disruptive to y high snack the changes we are seeing in the u.k. at the moment nd the banking of england story. where is your focus right now? we're trying to avoid the assets.

anything you predict didn't come to fruition. exit,th ram better rudd's that makes things worse. referendum, they don't the path you would expect them to. you look at other areas where better.ortunities are we see much more uncertainty. e should see currency depreciation from this point, whether we will, it's uncertain. if we did see a panel, leading to stocks of course. ank of england's expectations, pricing out into the future, you move from the blue box. weak data is enough to put for ank of england on hold

a while, i guess. if it came to the crunch, the dates were very, worrily if they have some kind of general election or a of referendum, the bank england would be expedient like 2016.were back in june of would have seen a record rates. expediency. matt: where do you see the economy going right now? u.k. consumer has managed

to sustain the overall growth picture. to fadectually starting now if you look at motor vehicle ales, they're starting to roll over. you look at the u.k. balance housing survey, that is start to roll over. theirers are maxed out on credit cards. that support from the consumer fade.arting to that leaves the economy vulnerable. you got that on one side and the other. matt: are there decisions made o help the economy or the uncertainty until we get an deal brexit hinted, not she union, but now that

gone, we need custom union. have gone back into that scenario, brexit in name only. what the name is as ong as you stay within the customs union. anna: it wouldn't matter if it union or arrangement. community would have been happy. >> if this is material, from you are suggested, inking it with the customers union. it's entirely flat. renewed be seeing pound, or it's kind of in there? >> it's the widowmaker.

it's so unpredictable. there are forces that keep it of what regardless happened to the academy. you couldn't think of a worst circumstances, the ones have left. it could be it's self-limiting depreciatating, foreign it.ment to support matt: thank you so much. we have a lot more to talk about merger monday, when there traveling to work, by -- head of trade with is about to sitdown a team on bloomberg radio for u.k.e.a. relations. they have been talking

about the preparedness on the ports. talk about trade, a player.t took to buy as a market. back against discount that's after 7:00 a.m. this is bloomberg.

matt: good morning, 7:18 in berlin, 1:18 in the afternoon in singapore. equity indexes across asia doing quite well after the korean announcement that we had on outay and the tech earnings of the u.s. let's get more in the bloomberg we go to lash,

juliette. >> confirming a bloomberg report in the companies were discussions, according to people familiar with the situation, largest would be the shareholder in the combined 40%.y with a stake of over epresentatives defined to comment. kevin joins us after 7:00 a.m. u.k. time. t-mobile is to buy sprint for billion that they can team generation a next wireless network. or won't they talks. c.e.o. of will be the new operation. up the wireless sectors through innovations.

and later on bloomberg, 4:00 p.m. london time. xtending the transformation by launching a dedicated unit. it is tapping into the growing demand for flight. samsung, l.g. electronics have vietnam into a major prompting ng hub largest growth. now things and, yes, we past past lth, the

is planning to extend tariff exemptions for country but not at all. that's according to wilbur ross e.u., dicated that the to have ave been asked -- where opposed to does it stand as far as steal tariffs?inum >> secretary ross mentioned over weekend in order for countries to gain exemptions to tariffs, they have to quotas ertain import which is a difficult possession e.u.the , as you know, german

chancellor angela mercuriell and french prime minister went to negotiate an agreement with washington. that does not appear to have gone as well as the e.u. helped.ve nna: when i was last in brussels with you, they have ust been announced, the tariffs. remember the belgium its rship with a gun to head. from the e.u., what is the to be?n likely exactly right, german mentioned that they would like to bring back

the -- more importantly, the european commission which handles trade policy for the e.u. has indicated that they talksot be bringing those back up. commission's an trade commissioner has said that threefold to t u.s. tariffs. retaliation.ng the u.s. has already put thather a list of products they will target from the u.s. those include things like harley which was made ryan's onsin which is bourbon from

kentucky. anna: thank you very much from brussels. when you look at the tariff and it continues to, there is a sentiment we get from so guests, you look at, the opening salvo, is that your view? this is part of the master strategy, it's part of the book years ago. noise as yous much can. you take it back to your base. on.'s part of what is going we're in a consultation period. don't do it now, we'll it tomorrow. worried, there are signs that they would be at things again.

we have seen t, compromise. anna: the global growth story, taking the edge off of reports from the u.s., european last week, the p.m.i. looked good this week. solid, link is rock trade has been much hell if i. affecting global grove that perhaps is shown here. joining growing is converted. global growth was the weak which means

for trade.elpful matt: julian howard, we still talk about ore to today. so much going on on this monday. p next we're going to talk about egypt getting ambitious. cranny spoke with the finance minister. we are live in cairo and we will bring you that exclusive interview with manus next. with us for that as asian markets right on optimism of korea, optism and right now we're looking at european itches that are showing games across the board. this is bloomberg. anna: good morning, everybody.

this is "bloomberg daybreak: europe." this is the picture on the currency markets. remember that many markets and japan are closed and in china. we see gains elsewhere in the hung saying -- in the hang seng. let's check in with nejra cehic. nejra: we are seeing gains in asia. the pacific index is up more than 1%. we are seeing japan and chinese markets closed, so they are not shown on this map, but the hang upg is leading the gains, more than 1%, and the kospi up.

we have seen the jump in south korean equities, but also the won. the prospect of peace on the korean peninsula and the nuclearization of north korea is giving a list to the equity markets -- is giving a lift to the equity markets. let's switch the chart reflected in cds. south korean five-year default credit swaps falling. you see that decline in the risk, and more risk appetite in the cds market as well. i talked about the koran won against the dollar. the dollar had a good week against its peers last week. we saw it track the 10 year treasury yield higher, and it was stronger as well. we did see the growth data on friday being better than estimated, although it was a slowdown. the question is whether the bloomberg dollar index reaches the 200 day moving average. it got pretty close. we have some stephen not cheat levels.

cciwe have some fibbona levels. finally, i am looking at oil. heading for a head -- oil heading for a second monthly gain, with concerns over the u.s.-iran deal. opec getting very close to the target for its output cuts. on the other side, the latest data on the rig counts rose by five, the most since 2015. it trades just below $68 a barrel. matt: thanks very much for that. earnings season in the u.s. is in full swing, with just over half of the s&p 500 reporting so far. a record 90% of companies have seen higher earnings, compared to the same quarter last year, as tax cuts as did results. julian howard is still with us. i think this is fascinating because we always see companies

beat earnings expectations, but the growth has been amazing. on thea screen appear bloomberg that users can access by typing ea. it shows you earnings. you can see we are looking at 25% growth this year. 33% growth in the tech sector specifically. are you optimistic for earnings, or do you think we have peaked here? julian: i am definitely still optimistic. on your first point, the rate is phenomenal. always that discounting of the wall street expectations machine. that is certainly the best in seven or eight years. in terms of the outlook, the guidance for the rest of 2018 and 2019 is extremely positive. this is a good earnings season. i think people have been taken a little bit by surprise by this because we have nine years of a

market rally, where people think earnings are exhausted. people not being paid anything. but workers are not being paid anything. but there is still room to grow. dollar, buts weak also the tax cuts are starting to kick in. matt: you mentioned the beats rate. it is true that companies usually beat wall street expectations. typically they are cut into earnings season. they have been raised in the season and we are looking at record beats. 8161 on the bloomberg. o> for the charts we use. we have more companies reporting beating than ever before. a lot of this comes in tech. we were so worried about tech coming into this earnings season. should we still be concerned, or should the selloff be an opportunity to buy? julian: i think it depends. yoit depends on how much the

model is based on europe. the regulatory threat in the u.s. is nonexistent. there is a lot of talk, but for congress to actually get its act together and do something for the midterms, forget it. after the midterms, you have the lame-duck season. i don't see the regulation coming through. i think europe is going to be more active on that side, but we are several years out. for technology, there is safety in earnings. i am not worried too much about regulation getting in the way. anna: you think the business models are funded by data? you think nothing is fundamentally changing manus: is that because -- , is that because there is no appetite for it? julian: there might be some appetite in theory, but congress, there were hearings of mark zuckerberg. they didn't even understand how his business model worked. some of the questioning was seriously naive.

i don't see a concerted effort to do something. i think there is a vague will. but for something to take shape is years away. anna: in terms of the earnings season, dollar weakness was and now the newfound dollar strength could be a theme through the earnings season. is this something you see having an impact in the months ahead? julian: i think they cited half $1 billion worth of revenue coming or increase profit coming from the weaker dollar. the danger would be if the dollar picks up from this point onward. i am not so worried about it. i think the 10 year yield picking up has a lot to do with oil, and i am not worried about oil. anna: this chart is showing the dollar breaking away. itdoes seem to be something, is whether it is a move that has long-term potential or whether this is covering positions because the market was overwhelmingly sure the dollar

would weaken. julian: some of it is interest-rate differentials. i think at 3%, the 10-year note if you quite attractive, holds a maturity.it is not bad today . that is part of it. but we will save about 3% for much longer. anna: we saw an interesting story this morning talking about a cold currency war. ecb and boj, banks are turning dovish against the fed. have you seen that? do you think they are talking about being more dovish? julian: i think there are signs of dovishness, but i don't think it is a concerted conspiracy against the u.s. dollar necessarily. but i think in europe a are all concerned -- they are all concerned. anna: there were a few data points concerned about last

week. thank you, julian howard. we will be continuing this conversation on bloomberg radio. you can find him on bloomberg radio 7:30 london time. bloomberg users can interact with all the charts we show during the program. you can browse recent charts featured on bloomberg tv. let's turn to something different. egypt is in the spotlight and remains one of the favorites. manus is in cairo for us. good morning. manus: anna, a very good day to you. this is the carry trade to end all carry trades in emerging markets. $3.5 billion has flowed into this economy. and direct investment is up. amr el-garhy has been telling the good news to the eurobond are get. i asked him what is the single

biggest issue that has come up on the roadshow? people want to make sure there is no fatigue in the program, that we control the regulative affect. no economic reform takes place bothering people. it takes place by looking at other parts of the story. if you didn't do this thing, it would have been much worse. but it could be a level of pressure. as you improve and people find opportunities, it rebalances. manus: i know you have been in london and telling the story. will we see you go to the asian markets? will you issue in other currencies apart from the dollar and euro? guest: we did not have much of

that type, but we will check it out. we will see what is the best for us. remember, when we went to europe, europe is our biggest trading partner and definitely there is ament and level of debt in europe as well. we will look at other opportunities. manus: what can we expect from bonds in 2019? guest: we are talking 6% to 7%. manus: are you worried about interest rates rising? the fed is on the move. guest: it is rising, but so far our performance since january of last year, even with increasing interest rates in the u.s., we are still at a good level from the last year. if this reflects anything, it -- i wouldn't say

credit trading. the assessment of the investment on our credit risk where we wish to see a better look from asia. manus: we had -- you had good luck. $23 billion. plus 23 plus -- guest: 23 billion dollars. manus: but that money can go. that is your risk, isn't it? guest: no, because in 2010 we were at $12 billion. that is equal to almost $50 billion today, depending on the level of liquidity. the level of investors that we think is manageable. we knew from the beginning that we were going up, so we are

fine. this trade-off between the credit risk and the level that we can achieve. . manus: you have no concern about the carry trade for egypt? guest: there is always concern, but our performance is actually improving, and we have seen a rise in the amounts. week never expected this would go through the roof because we were almost at zero back in 2016. anna: interesting conversation. while the rest of the world tries to find inflation, this is an economy that has a target of 13% inflation. what did he have to say about the latest inflation data? manus: this is a big balancing act. with oil at $80, it gets a lot harder for this minister.

when it comes to the inflation target, fascinating. he is erring on the downside of the target. guest: let me tell you something, when you talk about lasttion, people think year when we did the economic reform because more than one action, which was a tax move, but at the same time, there was fluctuation of the currency, which was the big thing. the other things when we look at what happened before, it was not as bad. but the target we have for the end of the year for the replaced -- for the inflation target is around 13%. i think it could be around 11% to 15% by the end of the year. we see inflation by a monthly basis, which we see with good momentum so far. the level of inflation is up 20%.

a little bit of something for .veryone here the pound is critically important, the inflation story is good. from an economy that is really trying to sustain 5% growth and get to 5.8% growth, it is about the foreign direct investment. which brings me to another conversation i had on the other part of this river, the nile. what does he make of this country? where is he investing? what does he think of markets? where do you put your money? there are those horns again. this is a man with the answers. fascinating insight. he is one of the investors in north korea. what is his take on trump and that historic meeting that is set to come between trump and the north korean leader kim jong-il and? -- kim jong-un? it has been a fascinating 24 hours. i want to hear that.

i will pick it up your. -- i will pick it up here. manus cranny in cairo. it is merger monday. t-mobile and sprint have agreed a tie up after four years of back and forth. we will have the latest from our telecom team here in berlin. this is bloomberg. ♪

morning.d 12 minutes to 8:00 here in berlin. let's go to the bloomberg business flash with juliette saly. juliette: marathon petroleum reportedly plans to buy rival oil refineries. according to the wall street atrnal, the offers value it

$150 a share. of the largest independent fuel maker in the united states. to revealy plans plans today after confirming a bloomberg report that the companies were in discussion. according to people familiar with the situation, it would be the lot -- walmart will be the largest shareholder. representatives for walmart and sainsbury declined to comment. ceo joins us at 7:00 a.m. u.k. time. that is your bloomberg business flash. matt: thanks very much for that. t-mobile has agreed to acquire rival carrier sprint in the u.s. billion. if the deal gets any -- gets antitrust approval, they will own 42% of the company and softbank will own 27%. let's get more from our telecom reporter here in berlin.

telecom owns t-mobile, and softbank owns sprint. what are the benefits of this combination for the parent companies? reporter: first of all, this is telecom's major merger that will benefit both softbank, sprint, and the owner of t-mobile. they will have more financial firepower to invest in new technology. they will expand their network of thee and reav competition with at&t and verizon. anna: good morning. this is about them taking on the biggest two rivals. it will reduce the number of players in the market. as a result, what are the hurdles they have to get through under the trump administration? stefan: the regulatory hurdles are definitely there. in the past, administrations said they like four players in

the market. this would reduce the number from four to three. some people might argue it would effectively reduce competition. the companies argue that will not be the case because cable companies like charter are already in the market snatching up wireless and broadband customers. the companies will argue against it. and they have an administration that is believed to be more friendly toward these mergers than a democrat government. there is hope this deal will be approved. matt: i first covered deutsche telekom back when rod summer was the ceo, even before they had a u.s. outpost. this is the third time in four years they have tried this combination in the u.s.. how likely is it that we actually see this deal really and truly done? stefan: it is not unlikely at all. this is a republican government with a republican congress, so we have a chance there.

the companies argued they need this come -- this domination to invest in 5g and make the u.s. a 5g leader. that makes it sound promising to the administration. anna: thank you very much, stef an nicola. what areerger monday, the big macro trends those executives need to be aware of and plan for in the decades ahead? joining us, karen harris, managing director at bain & company. you put out a recent report that paints a picture of income disparity out for 2013 -- for 2030. give us a sense of the social shift you are expecting to see here. karen: there has been a lot of ink spilled about demographics, automation, and inequality. we thought it was critical to

look at all three of those forces in conjunction and how they push and pull against each other. for the moment, we have a declining, decelerated workforce. in europe over the next two decades, the workforce will decline by about 0.5% to 0.7%. quite a dramatic change compared to the growth we have seen globally. but because of service sector automation, what would have been rises in wages,, which we see today in the u.k., wages writing thee -- riding above, culmination of robotics and machine learning allows automation in the service sector in ways we have not seen before. ultimately, that has an impact on wages and job opportunities. it allows the opportunities to come through while avoiding the negative. some attribute it to the middle class coming under pressure and the income

distribution in the united states and elsewhere. karen: the best of it will eventually be having much better potentially quality of life, standard of living, as we did from agriculture to industry. we are desperately in need of automated solutions are an aging workforce and aging population. the warning is that transition will be challenging, like any transition. the agriculture to industry, that took 40 years. in that time, we lost about 12 -- $1.2 million -- 1.2 million jobs a year. simply saying we will all be better off eventually is not a great answer, rather than considering what that path of transition should look like. matt: i wonder, years ago i read "raise against the machines," which warned robots would take over our jobs.

so far, we have not seen robots take over the jobs, but are robots responsible for the lack of real wages nation -- of real wage inflation? karen: i don't think so. the lack of wage inflation has been because of demographics. when there are lots of warm bodies to throw at a solution in a global labor market, you are competing for wages. it is this demographic shift to a dude celebrated -- 28 decelerate at work shift. in the absence of robotics, you see inequality diminish. but instead, that is when we would expect early to the middle of next decade is when we will see what mcafee was talking about. anna: deep into the notes, you talk about interest rates. you say they are likely to surge, but returned to near zero levels by 2030. what do you expect to see? buying au are not just

robot, you have to put it into space. chefs ande two sous you replace them, you can put them in a dark space. the robots, not the chefs. in the u.s. alone, we are looking at $8 trillion alone to build and the boy that technology. on the back of that, that very deployment is eroding the jobs and potential jobs, capping wages versus where we were before. at the end, the supply-side boom, but demand is a bust. that is where we see the interest rates collapse. anna: thank you for joining us. karen harris, macro trends director at bain & company. coming up, more about the mergers. we are expecting an announcement

on the discussions in the next two minutes and will be speaking to kevin o'byrne. this is bloomberg. ♪ retail.

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and it's "daditude". simple. easy. awesome. xfinity. the future of awesome. matt: good morning from berlin. this is "bloomberg daybreak europe." anna: and i'm anna edwards. these are today's top stories. matt: styling for deals. t-mobile agrees to buy sprint for $26.5 billion in the u.s.. meanwhile in the u.k., we await an announcement from sainsbury in their plans to acquire walmart. becomes- anna: rudd the fourth cabinet exit in six months, robbing the prime minister of a pro-brexit ally. matt: and riding the wave. tellss finance minister

us he wants to take advantage of global growth. guest: we want to take the opportunity of the upswing and the global economy. we want to capture the moment. ♪ matt: good morning. welcome to "bloomberg daybreak europe." look at the way the futures indicate. we will kick off today's trade.we are an hour away from that . looking at gains across the board as far as futures are concerned, you have gains across the board in asia as optimism about what is going on in korea, and tech earnings out of california helped to drive expectations for future earnings. anna?

anna: let's have a quick look at the risk radar. we have positivity in the asian section. . a number of big markets are closed we are closed in china and japan. the hang seng is up 0.1% right now. some sluggish growth data out of the u.s. and out of western europe at the end of last week. we have some chinese pmi numbers. we suggested the bottom is not falling out of the global growth story, in that seems to agree short-term in the markets. the dollar is down against the korean won. the pound is pretty flat as we see amber rudd dip hiding -- departing the department. 's things are going as expected after confirmation of their intentions toward assets. -- they sayersation that walmart will hold on to 42% of the business.

the deal is valued at 17.3 billion pounds. part of the story is this m&a story. as expected, confirmed that walmart will maintain a holding of 42%. but what is the strategic rationale at a time that the ceo is trying to defend? what is the rationale of doing a deal? we will talk about the subject. kevin o'byrne joins us shortly. we have other breaking news coming, this from another newsworthy sector. first-quarterd's sales -- world's largest advertising company says first quarter sales dropped for the first time since the departure of founder martin sorrell. the wpp reporting that like for costs felle minus

0.1% in the first quarter, with declines in north america and continental europe. warning ins wpp's march that the year had gotten off to a slow start when it reduced its long-term outlook for growth. it has not changed that long-term outlook. you can see how the stock has done, it has come down. over the past year, almost by a third of its value. let's take a look quickly at what is going on in the bond trade, and see if we can get some more directional indication as far as the equity trade that opens up in about 55 minutes. bund futures down. that means you would see the rates rise. the same is true in o.a.t. futures. watching closely that u.s. 10 year yield. right now, we are looking at

2.9587%. you can hear we are just under the 3% level. the question is will we get back there? let's get some more headlines with the bloomberg first world news -- first word news. u.s., the trump administration plans to extend relief for steel and aluminum tariffs to some countries, but not all, when temporary exemptions expire tomorrow. however, secretary wilbur ross refused to identify which nations would be spared. he said the announcement will be made right before tomorrow's deadline. he indicated friday that nations have been asked to accept income quotas. u.s. commerce secretary steven mnuchin joins us from the milken institute global conference at 10:30 p.m., u.k. time. kim jong-un is turning on the term ahead of his -- turning

on the charm ahead of his summit with donald trump. south korean president moon jae-in's spokesman says that he plans to invite foreign journalists to witness the shutdown of the nuclear sites. that happened after kim pledged denuclearization with moon on friday. the austrian chancellor says brexit is at the top of his agenda, and the trade war is negative with both the eu and u.s.. he spoke with bloomberg after signing a deal. next july, he will hold the presidency of the eu. >> there are some themes we wouldn't choose, but will be keeping us busy. at the top of our agenda will be brexit. the year, 2018, is

brexit has to be agreed to so that in 2019 it can take place. juliette: global news, 24 hours a day on air and tic-toc on twitter, and powered by more than 2700 journalists and analysts in hundred 20 countries. final trading day of the month in asia. we do have japan and china out of commission. every asian market will be closed. today, australia closing high by 0.5%. on track forindex his first game since january. -- for its first gain since january. the first time investors have had a chance to respond to talks by north and south korea in ending the war. we will see the korean stocks that could get a boost when the north and south start to work

together with each other. hyundai engineering up in late trade also seeing. strong moves coming through in tech players on back of the earnings from the u.s.. tencent up by 0.9%. here in singapore, southeast beat netrgest bank income, rising to a record over 3% and lifting the other singaporean banks as well. anna: thank you very much. juliette saly and singapore.the u.k. prime minister has lost the fourth member of her top team in six months. amber rudd resigned over and immigration scandal this march. this is as exit battles come to a head. ministers meet this week to discuss post-brexit trade plans. meanwhile, markets expectations shift. speak to todd elmer.

let's start the conversation around brexit and then broaden it out. in terms of the brexit story, we spoke from julian howard. he said this can be significant. are you surprised the pound is pretty flat at this stage of trading? todd: i think that is the interesting observation that we have not actually seen a big footprint. if we look at how the market has is prettyis, it consistent with how we have been treating political news for a while now, because there is not much evidence that brexit concerns are the primary driving force for the pound. what seems to be driving the. pound are abroad moves in the dollar that has been higher recently. we think that investors got a bit long on this optimism, that we were going to see rate hikes and we think there is some vulnerability. anna: it is partly a dollar

story, the rallying of the pound was about. the dollar, not the euro as far as the underlying data picture for the u.k., we saw the sustenance in the data on monday. t but showsar the number of hikes we have seen from the pink of england -- from the bank of england this year. todd: it was not a very good week for the pound. when we look not just at the data but the message we were getting from governor carney and the npc, and as those expectations continue to get pared back, there probably is some further downside. matt: i have another chart here. i don't want to give you too much in terms of graphics, but i think this is fascinating because confidence in blue is coming down. the resignation surely will not help.

we had financial conditions coming down, but they are going back up again. you say it is mostly the dollar, but how much does this affect the pound rate? todd: i think it is certainly something investors pay attention to. but we are coming down from relatively high levels, and we do think the overall trajectory of activity in the u.k. remains relatively firm for the time being. i think overtime, it is more likely to support the pound than weigh on the pound. but with the dollar in the driver seat, i don't think we will see relief yet. matt: i am getting some walmart headlines i want to talk to you about. i will ask you some dollar questions, because walmart sees a non-cash loss of about $2 billion on the deal. they see the deal as neutral after the first of the year. it is an interesting deal to look at from walmart's point of view.

it sees its earnings hurt in the first part of the year, but will recognize a non-cash loss of about $2 billion. will those losses be worth more or less in a year than they are worth now? it has been a fascinating trade to watch. todd: i think those dollars are still going to be worth less. if we look at the factors that have been driving the dollar, certainly there has been some improvements in the backdrop recently, which is to say we have seen outperformance vis-a-vis other major economies. i think the market has started to move some of the political as weemy him -- premium, have seen the de-escalation in syria, as we have seen the diplomatic thaw in korea. some of the individual u.s. measures have been watered. down we don't think that will give you a good indication on the

longer term trend. we think some of those factors will come back to bite the dollar. we think valuation is attractive for those who would sell the dollar, and many long-term investors across the world probably will use any rally as an opportunity to continue to shift their portfolios in favor of other currencies. interesting because those comments and the context of where we are on central-bank policy, i read this story, pimco saying they think we are headed for a cold currency war. they suggest other central banks are turning more dovish. do you see that in the latest rumblings? we heard from the ecb and the boj recently. do you see them more dovish and emphasizing that transatlantic divergence? todd: i think this is something investors have seized on, that there seems to have been a dovish turn by global central banks that is, as you say, contributing to divergence by the u.s..

the question is whether that persists. for do we move versus expectations. the expectations are low, and i think the risk is probably to the upside if we continue to see strength in terms of data. when we look at europe in particular, the market was willing to give the u.s. the benefit of the doubt when we had hurricane impact, and it begs the question why the market has not been willing to give europe the benefit of the doubt. matt: what do you expect from mario draghi and co? do they air on the dovish site -- do they err on the dovish side? or do your concerns override them? todd: i think they would certainly like to see a lower euro. there is very little downside. i think that is true of many central banks.

the question is whether or not they will be successful in terms of trying to talk it down. without blocking -- backing that up with policy measures, it is difficult to win these so-called currency wars. matt: don't you think draghi once to get out of qe and get the ucb -- the ecb ready to raise rates? todd: certainly he wants to put the ecb on sound footing for the future. i am not sure the currency is going to be the main factor in terms of determining his legacy. matt: very cool stuff. thanks for joining us. todd elmer with citigroup will stay with us. up next, sainsbury announced it has agreed to merge with walmart asda. it will buy the company. we will speak to the cfo kevin o'byrne next. and the ceo of goldman sachs.

anna: he will be joining us from the milken institute global conference. that conversation will be at or p.m..m p.m. -- at 4:30 this is bloomberg. is bloomberg.

it is just about 20 past 8:00 in berlin, 20 past 7:00 in london. let's get a check on the markets right now. first off, take a look at euro stocks. futures, slight gain, but not getting a lot of direction. we do see the german bonds yield rising right now, 58 basis points. investors are selling up the debt -- selling off the debt. s&p futures, a gain of 0.2% after strong earnings in california, and optimism that the korean war will come to an

end after 58 years. what's get the bloomberg business flash -- let's get the bloomberg business flash with juliette saly. juliette: marathon petroleum plans to buy rival refinery endeavor. according to the wall street journal, the stock and cash at a 23%ues aendeavor closingover friday's price. the deal could create the largest independent fuel maker in the united states. aologis agreed to acquire company for $4.8 billion in stock. stockholders will receive 1.02 euros per share for there's. that represents a premium over the closing price on friday. 'se deal makes the world's largest warehouse owner even bigger as demand surges in the age of online shopping. the and him airlines is

expanding its transformation by launching a dedicated cargo unit. it has been revamping its fleet to tap into the growing economy. international companies such as samsung and nestle have turned vietnam into a major any factoring hub, producing southeast asia's fastest growth. that is your bloomberg business flash. anna: thank you very much. -- sainsbury has agreed to take over walmart. walmart would own totally 2% of the combined amount. kevin o'byrne joins us now. a very good morning to you. a busy morning for you. could you start by explaining why is it so important for you to be bigger? take on rivalsto if the discount sector the likes of amazon. why do? you need to be bigger on the high street? ?

market has changed dramatically with so much choice for customers. the discounters, online players. since the benefit of combining these great u.k. businesses, and sainsbury can create a stronger business. we can have better prices on the shelf, better for colleagues and suppliers, and for the sellers. anna: you say combining. you are taking over this business it seems in many cases. sda keeps the ceo. why does walmart want to maintain this 32% in the share group. kevin: they will be a major shareholder. we look forward to working with walmart. this is not a takeover, this is a combination of two great businesses and management teams will be made of the best of both

businesses, and we will have two separate businesses. matt: doesn't that provide a little bit of confusion? aren't you going to want to have laser focus on giving the customer what it wants and making profits for the shareholder? have: we will absolutely laser focus on giving the customers what they want, you are absolutely right. , we have a very strong heritage have been in the u.k. market for decades, and have a loyal customer base. what this transaction will allow us to do is make an even better sainsbury's. and the cost of products on a shelf will go down. have aon't you want to clear leader running this business? the idea of mergers of equal, in the past they have historically failed miserably. very confident in the leadership structure we currently have.

we have a bank, an hourglass, sainsbury's, and we run them independently. it will operate with its own management team. the important thing about that, to your earlier point, we can lay the focus on what the customer wants. and to give them that. we will give greater focus from keeping the great brands. have you had any signals from regulators as to how they will approach this? how many stores you may have to close as a result of this? kevin: we will start today with the regulator. the regulator has a very important job to do. their role is to protect the u.k. customer and ensure the choices there. we have done a lot of work with our teams looking at this, and we believe this is very good for the customer. we look forward to explaining that the regulator.

the market has changed medically since the last time the regulator would have looked at a deal like this. enormous consumer choice, more players. if you look at the geographic spread of the businesses, there is a perfect match up, as it is strong in the midlands, wales, and scotland. it is a very good match. anna: kit is a good match in that case. -- it is a good match in that case. where will the synergies driven from? kevin: that is a net number. , whetherot synergies it is electricity, media, etc. we have synergies from putting our stores inside asda stores. we have a good record of doing that in the sainsbury's business.

combining those buying books and getting lower prices that we can invest in the business and give customers lower prices. matt: kevin, that is all part of the course of the strategy to take on amazon. but amazon has a real benefit in its online presence, it's prime minister ship -- it's prime membership. where is your plan to take on the behemoth? our business in the u.k. has the fastest home delivery service. we call it fast track and you can order it within four hours and have products at your home the same day, and in more postcodes than anywhere else. we are aligned to the competition, and we think come edition is good for the customer. -- we think come petition is

good for the customer -- we think competition is good for the customer. matt: are you focused solely on that market? kevin: our focus is the u.k. market. anna: let me ask you about shareholders. our reporting suggests the sovereign wealth fund are supporting this. then you confirm that and give us any other feedback you have had from shareholders? kevin: that is right. whether they have confirmed the support, we are delighted about that. we will have discussions with shareholders over the next few days, and we think we can give a compelling case why this is good for shareholders, and we look forward to having those conversations. matt: what you think about further m&a action from here? you are going to be the biggest leader in grocery retailing in the u.k.

is there any scale, any scope to add more? kevin: we have got to focus on what is in front of us. we have a lot to do in the next 18 months to complete this transaction, and we think it is a good transaction for shareholders, good for our customers, good for our colleagues. and that will be getting a lot of our attention in the next 18 months. matt: you will be dealing now with 330,000 employees. that is a massive headcount. where do you see that number going in the next 18 months? kevin: putting these two businesses together, combining these great brands express a very strong employer. we will have a much stronger balance sheet after this transaction when we come together. that has got to be good for employees from the point of view of career opportunities, and we have no plans to close any scores -- to close any stores. employees.for

on top of that, these organizations are responsible and300,000 pension holders, both set of pension holders will be more secure after this transaction. matt: you are going to keep the separate brands open. what will you do in order to win customers with the sainsbury brand, which is geared shoppers,to-do compared to the asda brand, which is aimed towards people seeking lower-priced goods. kevin: all customers are looking for great value. and are looking for good improving quality, and they are looking for convenience and easy shopping. by combining these great brands, there will be more resources invested in all those areas, whether it is technology, improving the quality of the products on the shelves in both of the businesses, and more

importantly what if it will be good for the customers and reduce the cost of living in the ok -- in the u.k. matt: matt: the bigger scale helps you negotiate. will you be able to squeeze a lot of savings out of suppliers? what we are proposing is to harmonize the bind book. if are buying a particular product for certain price, we expect out of the same price in both of the businesses. if you stand back and look at our business, we have thousands of suppliers but about a hundred suppliers make up 85% of our business. there's real benefits here for the supplier as well. they have the opportunity to have a very efficient level. lift all of their wide range of products. it's a great platform to launch into the market.