♪ from good morning bloomberg's european headquarters in the city of london. i'm manus cranny live in dubai. these are your top stories. president trump says he will announce today whether or not the u.s. will leave the iran accord. be repairing ato bid for fox's entertainment -- business. be prepared, jpmorgan's jamie dimon said markets should be ready for a spike in yields. we could easily had 4%.

-- hit 4%. ♪ manus: warm welcome to the show. breaking news coming in. one of the worlds biggest cement makers. global growth in resurgence, this is the personification. 5.8 3 billion in terms of the first quarter. reorganizing this company. 2 billion francs worth of assets. recurring oh i bda -- recurring a, 700 millionbd

swiss francs coming in their. that's a little lighter than the estimate. a little bit of breaking news. first quarter net income, 143 million euros. the margin outlook is likely to be the focus. we will look for a little more detail around the margin. adecco. the falling unemployment rate is a relief on many levels across the eurozone. to the adecco ceo at 7:30 a.m. u.k. time.

the margin outlook could be of interest. marketst to the broader . asia-pacific up about half 1 -- .5%. the bloomberg dollar index pretty flat this morning. here from jerome powell later this morning. hear from jerome powell later this morning. very focused on the dollar because of dollar borrowing. mex down below 70. we will hear later from the trump administration about iran.

many questions and a lot to talk about in terms of the oil story here. does not passica there's a hole ramification in terms of sanctions. you don't want to be in breach of sanctions that the u.s. might impose. now, jamie dimon pulled the record in terms of joining the potential for barrick out. for a bear account. he said you can easily deal with 4%. and people should be repaired for that. that.prepared for would 4%ion is, what

due to the rest of your asset classes? the capitulation point for markets is 5%, it is no longer the 5 -- the 4%. bank of america says you will be able to absorb it. can the markets you down on that level of surprise -- supply? -- can the markets to -- chew down on that level of supply? we are going to hear from jerome powell. onwill be speaking bloomberg. he's in switzerland. 8:00 a.m. u.k. time

-- time. up's get the first word news date from juliette saly. thank you. u.s. oil prices have fallen back after donald trump tweeted that he would announce his decision on the iran nuclear deal at 2:00 p.m. washington time. many have lobbied the president and his aides to remain in the agreement. more's johnson, who is in is saying the deal is flawed but can be improved. after 2025, the current deal allows iran to go forward fast to enrichment programs that could lead to a nuclear weapon. we need to find a way of fixing that. president has been right to call attention to it. but you can do that without

throwing the baby out with the bathwater. jpmorgan's ceo has said that it's possible u.s. growth and inflation has grown fasterough to prompt raising of interest rates than anticipated. there is a possibility that growth accelerates and then inflation accelerates higher than you expect. which maye short end force the 10 up, not down. you could deal with 4% bonds and i think people should be prepared for it. juliette: china oversee estimates exceeded -- china overseas imports exceeded estimates. there's a $28.8 billion trade surplus.

from continues to benefit robust demand. global news 24 hours a day on air and @tictoc on twitter. you can find more stories on the bloomberg apps top . pretty solid day in asia. the only market being heavily sold off his indonesia. is can see the nikkei looking quite good and hong kong and china's markets really powering the region higher. having a look at stocks in a rise in india despite fourth-quarter numbers. g-v alto has been -- gelly ely

auto has been upgraded by credit suisse. suruga bank is dropping. roundup.eat today, president trump will announce whether the u.s. will leave the iran agreement. the u.s. leader has described the deal as the worst ever and foreign leaders and analysts say he's likely to exit. oil is falling this morning after climbing yesterday. let's bring in our bloomberg managing editor for government. earlier, you and i ran to the choreography of the next. you said 30 days. talk to us about going the ripcord on the iran deal. andrew: he comes out and says

he's going to exit the deal and baked into it is a reconciliation mechanism which gives the two sides 35 days to come to some sort of an agreement. thing that could happen that could be interesting is trump comes out of says he's going to pull out of the deal but provides no further clarity. companies are left wondering if sanctions come back and immediately, they come back in , we know it's happening with the deal that we have no more clarity in terms of sanctions and out quickly they could come on. anna: there are many ways he could reject this deal, aren't there? we know what he initially says doesn't is a sara lee turn out to be the case.

-- we know what he initially says doesn't necessarily turn out to be the case. andrew: the three scenarios are one, he exits the deal, too, he exits that europe tries to hold it together and you have a deal in tatters. the third is the five where he where he is the fudge leaves but maybe iran comes back for a secondary agreement. back its the heart of what the critics are saying. iran is complying but in the region it's causing a lot of headaches with saudi arabia and the u.s.. he could unleash the dogs of aggression between iran and israel. my proposition that he pulls the

ripcord and then within 30 days he offers to our ron to come to the negotiating table. there are some hawkish voices in foreign policy. the backdrop to this, it just won't end, today, will it? he surrounded himself with people who are more hawkish and want to drive a harder line. the real possibility is if he pulls out, you will see increasing confrontation between powers. we have that story about israel and its concern. there are lots of places where iran could come into greater conflict with some of these powers. anna: they give a much.

-- if the u.s. leaves, what would that mean for markets? we are talking with anne-marie about various markets. energy companies, banks, and industrials are the most exposed. in this chart here, it shows the investments in iran and it really is a 21st-century phenomenon. you can see the spot of the 2015 nuclear agreement because that's where we see this bike. spike.ng -- this mr. trump's decision, businesses could lose access to u.s. markets. gain backble to

market share after sanctions were lifted. you can see that right here. on the blueline, you have saudi's losing. but that was artificial, the deal with opec. the big question is, who fills the gap? the saudi's have the capacity and they've done it in the past or do they let the market get tighter with higher oil prices in mind. they are targeting $80 per barrel in this could be the month they see it. -- why argue rainy and's are irnaians gorging on gold? currency fading to a record. much more gold they are hoarding over the saudi's.

things are little bit unstable and they're worried about what can possibly happen if trump decides to pull out. you see them really hoarding up gold. thank you very much. great market context. will hobbs is head of investment strategy at barclays investment bank. thank you for joining us. i want to take a look at this. this is political risk. we are higher than we were last year but still we are nowhere near those dizzy heights of korea at the start of the year. i am fascinated by this that average geopolitical risk is below the average for this year and indeed trending lower. yes, quite hard to measure

but it does feel like we are living in slightly calm at times even though we have the u.s. administration that you rightly pointed out which is populated by some of the biggest foreign-policy hawks and iran hawks. from iran's perspective, whether we see a big announcement of ,acking out of the deal today what we can probably assume is that we are in for a more combative and aggressive. -- a more combative and aggressive moment. let's talk a little bit about the decision-making that trump is doing. here is the price at the pump that americans are going to be paying.

he said many times how he does not like the deal. he would be wary of pushing the old price of any higher. i think you would creates in the economy is slightly bigger headwind. the economy looks enough to digest it. it's something to watch out for. anna: we will talk much more later on. bloomberg sales data information and terminals, you still strategy. goldman says get more catch -- cash on your book. take more cash positions relative to everything else at the moment. when you say we are living in strange times, it's a very classic and very boring.

are you surprised they would advocate more cash in the near term? it seems to be a little bit of a copout. will: they are not alone in doing that. which you are seeing is a number of things coming together. you have the peaking of the pmi. and just a little bit more hostile to risk assets. you're also getting paid a little bit more but that's a little bit better. it's a less punishing investment trade. there is a feeling that the next few months, he would rather be on the sidelines. we would rather be pro risk. it's set to be a more difficult time. he stays with us on the program. coming up, the u.k. house of lords could vote again to amend

theresa may's bill. it's been defeated 10 times in the upper chamber. manus: sounds like me on a conference call. could it be, anna, that 4% is the new number. jamie dimon says investors should be prepared. ♪

♪ anna: good morning, everybody. it's tuesday morning. it's 2:22 in the afternoon over in tokyo.

the japanese prime minister speaking in parliament saying that he is discussing it is such -- a summit with china and south korea. to talk about was going on in the united states or at least look ahead to something will have on the show later. manus: i think this will be fascinating. we have jerome powell in switzerland. any hint of his current thinking , we are going to carry that speech a little later on. let's get your news from juliette saly. comcast is lining up financing for potential bid for 21st-century fox's entertainment assets. countering a previously accepted offer from disney.

comcast is talking to investment banks talking about bridge financing for an all-cash bid. deal totens disney purchase the tv assets. a -- an agreement is being drugmaker. a fellow a deal could be offered as early as today. recent negotiations have centered on the structure of the transaction. that is your bloomberg business flash. teresa mays brexit bill continues its painful process to the house of lords. still with us, will hobbs.

painful passage is absolutely right. it's been defeated multiple times in the house of lords. what seems to be sticking at the moment in the markets mind is a weakening pattern for u.k. data. how would you characterize that weaker data? will: there is some residual seasonality. it seems that for the past four years it's been a little bit stronger than q1. however, the april pmi's came out. they were weaker. that's what you saw kick out the may rate hike possibility. now people are wondering, how are they going to guide to august. the economy is bubbling along a little bit. the way we characterize it is if is gettingconomy

increasingly noisier, we might sit outside a little bit. a brilliant metaphor. have a look at this. pound to goor the back into the party? it looks like we have a base put in here. we have to watch how they talk about august. is a going to be a hawkish hold? are you going to leave the possibility open but the probabilities roughly unchanged. it's difficult. atif you look at the economy the time, on the consumer side of things, things are going to get better. it should get easier. we will look for all those

things. coming up, we will hear more from our exclusive interview with jamie dimon. this is bloomberg. retail.

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and singaporeans just gotten to 9:30 a.m.. stocks are rising. oil is a little bit lower this morning but just off the level since november. gradual recovery. the dollar is flat this morning. a little bit of breaking news. confidence that the eu and approve a sale in the couple months. hitting seven or

27 million euros. 2018 adjusted will be -- adjusted net income will be 1.321.5. to 1.5. numbers anding profit guidance. to 2.5nt one billion billion euros. re is the world's biggest reinsurance business. the biggest question for the twoor has been around the

thousand 17 hurricane season and big natural disasters. they were so frequent and devastating, and that was one of those questions. it's interesting to see that help their guidance firm. from nejra check cehic. nejra: we are seeing gains on the asia-pacific index for a second day. one of the outliers is the jakarta stock exchange. i will talk more about indonesia in a second. the next chart, oil is front and center when it comes to global markets. it gained this month as traders brace for a decision on iran. bit of softness and pulled back. we saw it go above $70 a barrel

for the first time since 2014 and now it's trading at 69.90. when we look at emerging markets, we have seen some outflows the past three weeks or so. this always shows the haves and have-nots. this is a great charts. why have p.m. assets taken such a fact -- a battering? compiled the dollar with the average of two and 10 year yields. this is the tightest u.s. policy since pre-labor. sticking on emerging markets, one country and its assets that have been cost -- caught in the crosshairs is indonesia.

h extend itsupia losses. there are questions whether the central bank will tighten policy. we do have some supply in the bond market coming on today in indonesia. anna: thank you very much. nejra cehic on the market. the munichdetails on re statements. renewals at april the first, ofed on increase in prices zero .8%. they are lowering their forecast by two percentage points. that combined stash that follows

a very strong -- that follows a very strong combined statement. let's talk a little bit more about the united states. fascinating interview with jamie dimon. he said it's possible that u.s. growth and inflation could be strong enough for the fed to raise interest rates further than many anticipated. he spoke to bloomberg at the global china summit in beijing. of aat are the as recession, it's a hundred percent the question is when. right now, the american economy is strong. the capital markets are wide open. there's much less leverage in the financial system than the past.

the consumer balance sheet is in very good shape. but look beyond the year. we had 20% growth over nine years. the nine years is really good but the 20% is really bad. it should have been 40%. this may have a ways to go. rest of the world is also doing better. japan is 1.5% and for the last eight or 10 years it was zero, that's a positive. america is in pretty good shape ofthe new have some benefit greg will toward reform, some benefit of tax reform -- some

,enefit of regulatory reform some benefit of tax reform. said inflation might raise its redhead and we have oil above $70. >> there is a possibility that growth accelerates, that inflation accelerates and it's higher than you expect and the fed raises rates a little bit more than you expect which might force the 10 year up, not down like in the past. you could see 4% bonds. it's because america is strong and healthy. almost like normalization. it's a huge shift in the past.

in may cause more volatility, higher rates in a way we don't understand because it never had qe and we've never had reversal. growing is more important than that. markets are one thing, they fluctuate and move. but jobs, wages, stability, and the economy. not the markets. manus: jamie dimon talking about 4%. here is what he is saying. some say there's a hibernating bear market. in our guest. you can check this out at some

stage. 4%. how much of a dislocation would that be for markets? are you prepared for that? will: that's a good question. it depends how quickly he gets there. at fairant to look value for the long end of the yield, you look at trend nominal gdp growth. that --e, we have found this cycle is very different than that. the economy can handle it it depends how quickly he gets there. raised couple of points there. a decade of mega easy monetary policy, we can say with some safety that someone out there will have been borrowing too much and someone will have been lending to the wrong people.

it's easier to spot when prices start going the wrong way. that's still just starting to happen. it's the warren buffett thing. we will see who has been swimming with their trunks off when the tide goes out. the quality within the investment grade space has been deteriorating significantly since 2008. there are some interesting trends underneath and we will see what happens once prices go the wrong way. anna: it matters why we get there as well. our use -- are you concerned about the supply story? if the inflation outlook gets a bit uglier but right now it seems there's a good reason to buy treasuries at 3%. seems there are plenty of people out there interested in that trade.

if you start seeing a more hostile federal reserve, that starts to get a lot less easy. as he saw from last week's data, inflation backdrop remains benign. we are a focused on bonds this morning saw give one last play of the action. . love a bond you can't beat a bond. look of this. for the u.s., breakevens of the u.s., germany, and japan. you probably don't want to be at the long end of the curve. would you juice your duration? there is some invitation

because of the way the curve is shaped at the moment to think about a seven or 10 years space rather than just looking at the global aggregate bond market. now it seems like duration is reasonable. it's not a big trade for us right now, i must admit. the thing to watch with the it's panicking some people with regards to are we at the end of the cycle and is a yield curve inversion imminent? it's only the inversion that's the signal for the recession, not the narrowing. remember also that inversion seems to proceed the end of the cycle by a year or year and a half. at the moment, it's not imminent

so we're watching. anna: if we do see rates going higher that might be one reason we see a little flurry of m&a. m&a may come forward to get ahead of higher rates if they involve a lot of borrowing. getting off to a running start in 2000 18. we are waiting for pharmaceuticals but we seen it in online grocery shopping, western media half -- outlets. is that significant? will: it is. you have to cherry pick the targets. one of the things that is interesting is that for much of the market has been telling ceos and cios to basically issue that's an buy back stock. debts and buy back

stock. over -- if you look at corporate balance sheets, that gear up story is starting to reach its maximum thethat's why earlier in program, you want to see interest rates rise a little bit. broadly speaking, the simplest way to play m&a is to buy stocks. should exert upward pressure on valuations overtime. manus: thanks so much. will stays with anna and myself. let's turn our attention to what bidding war in a the media space.

comcast lining up financing for the 21st century fox entertainment assets. threaten disney's previously accepted bed. fox's shares jumped in after hours trading. let's get more from dave. here we go, comcast. badly enoughfoxx to outbid disney in cash? i think that's the best interpretation of the news. they really need this deal and they are willing to pay cash for it. initially it was a share offer and that something rupert murdoch inclined to treat favorably for tax reasons but when you start talking cash, it makes your bid comparison easier to make. it's like taking the gloves off. that its cableny

television business isn't growing. subscribers and starting to see itself as a broadband internet company. that side does well but that side needs content. ofs is a global chess game m&a among media con bunnies -- companies. there's a lot of competition in .he space now that it's a cash bidding war, it'll be easier for investors to compare value for value. we do like it when people say that content is king. we are waiting for news around pharmaceuticals. keda waiting for news. cash could be critical to this deal as well.

dave: yes. the price has gone up and up. it would be the biggest takeover in japanese history. not just the biggest overseas takeover. .his is a very large deal the logic is not so much a chess game is a much in her play that they need pipeline. sales have declined for five years in a row. overseas sales are doing a lot better. doing ok in the u.s. and pretty good in asia. they like the idea of foreign assets bringing those in. we dois the deadline so expect a deal to be announced anytime now. manus: thank you very much. we will see if cash is king. customer, a bloomberg

you can get everything you need and ask anna and i questions at tv . on the charts, you can use them, you can analyze them, and use them for your own reference. anna: coming up, the former hsbc chairman says the u.k. can benefit from investments into china. that's next at -- next. this is bloomberg.

♪ anna: good morning, everybody. it's 1:51 in new york. futures are flat this morning so we are not sure which way the market will head. jerome powellrom this morning around 8:00 a.m.

london time. let's talk about another and weionary policy, caught up with the former hsbc chairman, douglas flint. he sat down with bloomberg's north asia correspondent at the jpmorgan summit in beijing. >> there's a huge opportunity for the u.k. to enhance the size . when you think about the scale ,f global infrastructure bringing trade connectivity to the countries around china but then more broadly across the world, that opportunity will be

maximized of region bring in pockets of finance from every part of the world and every type of institution. the role that the u.k. can play is supporting that and using the institutions in london, the expertise in terms of project management, arbitration, rule of law, insurance and so on to effectively maximize the pool of money that can be attracted towards the projects that will comprise belt and road. >> to allow foreigners to have a bigger dissipation in many different sectors including banking. how do you think that will help? they will benefit from foreign expertise coming into the market place. it's a consistent kit -- they need sophisticated constructs

for projects which by their definition will be complicated to arrange because they are multinational in terms of the countries involved. the design, the operation, the construction. complicatedo be products -- projects so you need a sophisticated financial center. >> this is not just opportunities for foreign banks, it's also for chinese. expand their expertise, expand their ability and their experience in operating outside the domestic economy. see this new wave of liberalization that's going to be coming? this is a big bang for the foreign banks? but not on day one. they are opening up a market of 1.3 billion people.

it's a huge opportunity. treasuryt was the u.k. special envoy douglas flint. us. still with he's on the great bloomberg yesterday talking about there are lots of reasons to worry about emerging markets. some of them are about how much dollar that they have. this chart just says that yield premium over treasury has plunged. this is what the markets are doing at the moment. the argument for getting into emerging markets versus u.s. treasuries is reducing. for the fixed income sector that might be true. have a helpful global trade story which is spreading the love to places like asia. but also commodities are helping

some of the least loved areas like latin america and eastern europe. there's enough going on in aerging markets to make it suitable place to still be taking equity risks. from a fixed income perspective we are more neutral on the fence. was currency over owned? idiot sinkerown sees -- idiosyncrasies. there's a number of things that go into that. you tend to find that stocks, bonds, and currencies in em are driven by similar factors. factors,, nextal general factors contribute to those things. anna: thank you so much.

up next, it's decision day for president trump on the iran deal . it's not the 12, it's today. that's coming up next. this is bloomberg. ♪

♪ manus: good morning from dubai, i am manus cranny and this is bloomberg daybreak: europe. live from an edwards the city of london. these are today's top stories. manus: president trump says he will announce today whether or not the u.s. will leave the iran accord. oil retreats from yesterday's highs. comcast is said to be preparing a bid for fox's entertainment business and an announcement on takeda's bid could come as early as this morning. jpmorgan's jamie dimon tells bloomberg that markets should be ready for a spike in yields. 4%.ou could easily do a

anna: good morning, this is "bloomberg daybreak: europe." we were waiting for news around the farmer to the whole -- pharmaceutical sector and we are getting that. takeda saying they have an agreement on offender he -- friendly acquisition. they are saying they are executing on a bridge loan agreement for shire. lines dropping through, -- manus,for shire what will be crucial to watch is what makes up the deal. the numbers were 46 billion pounds, that was 49 pounds per share, which was made up of 27.26 in stock. has the cash element on higher?

that is what we understand was holding up the deal. we haven't seen a great deal of movement on the number. 49 pounds per share for shire is still the number on my bloomberg this morning. it is whether the investors can be tempted across the line. set today ass being the day to make the firm offer for should -- shire. it is a pivotal moment for them. a little data from germany this morning. the data yesterday was disappointing. this morning, it is the industrial production number. the market has penciled in .8%. you are seeing a pop in terms of the industrial out put coming in . that is a headline in terms of the data and takeda coming in at -- for the bid in terms of cash -- .839 decatur shares

tecate a shares. shares.a london find some support. that will have more to do with sterling. the rest of equity markets are coming lower. there is more of a commodity oriented skew. jpmorgan saying you are still late cycle and you could see markets extend their run. this was an interview with j.p. morgan. race -- the rest of the risk radar to take you through. anna: the cash component has 30.33sed, gone up to dollars per share, previously at 21.75. they are taking out a bridge loan and we heard from moody's they could see takeda facing a multiple step downgraded due to

a spike in leverage as a result of the borrowing required to do this deal. they would likely have to borrow more than any other japanese company. this would be a huge m&a deal if it goes through. we will return to this story shortly. manus, this is the picture on up .6%i asia-pacific, carried the dollar is pretty flat. butprice on the retreat, back above $70 a barrel. it had just dropped below that, 2:00 p.m. eastern time. that is when we hear more from president trump on the iran deal. manus: powell will be the focus for the markets. we will carry that across the bloomberg live. this is the state of play, prices are falling, yields are rising. jamie dimon says to get ready for 4%. andwas with yousef and i

the derision that came in regard to what jamie dimon was saying was the severus. bill gross said the market was high. other protagonists are saying the bear market is alive and well. jamie dimon is saying 4% is eminently possible and borrowing will rise to around $400 billion in the quarter and it is all about supply. i told you $73 billion, bank of america had a no doubt this morning -- to absorb the most amount of supply in years, four this lower on the o.a.t.'s morning. that is the state of play on bonds. juliette saly is standing by with your first word news. u.s. oil prices have

fallen back after donald trump tweeted that he would announce a decision on the iran nuclear deal at 2:00 p.m. washington time today. germany, france, and the u.k. have lobbied the president to remain in the agreement, which he has frequently criticized. the uk's foreign secretary is in washington arguing the deal is flawed but can be improved. after 2025, it allows the current deal -- the current deal allows i ran go forward fast with enrichment programs which could lead to a nuclear weapon. we need to find a way of fixing that and the president has been right to call attention to it, but you have to do that without just throwing the baby out with the bathwater. juliette: jamie dimon has said it is possible u.s. growth and inflation could be fast enough to prompt inflation rates to rise and it would be wise to prepare for been sharp -- benchmark yields to rise to 4%.

he made the comments in an interview with bloomberg in beijing. possible, you expect the fed to raise rates more than you expect on the short end, which might force the -- like in the past. you can easily do it 4% bonds. the u.k., opposition lawmakers in theresa may's conservative party aim to push through two changes to the flagship brexit legislation today. peers are seeking to amend the draft law to amend the timing of brexit on march 29 next year and enable future governments to participate in european union agencies after britain leaves the block. it deals a blow to the passage through the house of lords -- lords. hasy's five-star movement abandoned its efforts to form a government is -- and is gearing

up for fresh election. the party's leader declared the president still considers one last attempt to break a two-month deadlock with a technocratic government. the anti-immigrant's league also rejected the idea of a nonpartisan prime minister and called for elections july 8. global news 24 hours a day, on air and tic toc on twitter, powered by more than 2700 journalists and analysts in more .han 120 countries you can find more stories on the bloomberg at top . checking in on the markets in asia, we have australia and japan closing out the session this hour. fairly flat ahead of the federal budget. .2%.apanese market up by it is hong kong and china powering the region higher today with the regional index up around .6%. indonesia has been under selling pressure. down 2%. bonds being sold off in

indonesia. first-quarter gdp miss their. stocks we are watching, the latest on the takeda deal. the latest, agreeing to buy shire for about 46 british pounds in the cash share part of the deal. .8% in up by almost india, coming through with its fourth-quarter numbers. the core operating performance was better than analyst estimates. closing down by about 4%. morgan stanley downgrading to underweight from equal weight. they had a price target of four aussie dollar's on that. anna: juliette saly in singapore on the asian market session. today, donald trump will announce whether the united states will leave the iran nuclear agreement. he has described it as the worst ever and foreign leaders say he will likely exit.

oil is falling this morning after climbing more than 1.5% yesterday. let's bring in jodi schneider from hong kong. good to have you on the program. what is president trump expected to announce at 2:00 p.m. washington time? -- he is widely expected to announce that the u.s. will leave the deal or perhaps that they will be extending the deadline for it by weeks or months. the president has called it a bad deal, has harshly criticized his predecessor barack obama for making the deal, and has said on a number of occasions that he doesn't like it and he doesn't think the u.s. should be in this agreement. yet, just last week, he said that doesn't mean he wouldn't agree to a different accord, to something else and when the french president was in the u.s., he talked about perhaps a different kind of agreement

renegotiation to deal with ballistic missiles and potential tensions in the region, but at this point, it looks strongly like president trump will be saying the u.s. is done with this current agreement. an insane deal. what are the implications if the u.s. withdraws from this? what implications could it have for the u.s., especially its allies have been trying to salvage it, you heard from the u.k. foreign minister on fox tv, macron has been there, merkel has been there. jodi: the u.s., by leaving the deal, would be isolating itself further on the world stage after

removing itself under president trump from the paris accord, from president trump saying he was not going to go forward with the transpacific partnership, there have been several of these occasions. it would also hurt the u.s. in ands of having visibility being able to inspect these sites. part of the deal with iran is that they will have regular inspections, and the inspectors have been saying iran is living up to its part of the agreement. the u.s. won't have that assurance anymore. they won't have the inspectors at the sites. there are concerns on capitol hill, the chairman of the house armed services committee, republican, said that he was concerned and the u.s. should look for a way to stay in the deal. there could also be implications for u.s. industries that might be affected if the u.s. was to reimpose sanctions on iran upon leaving a deal.

schneider, eight preview in what could be a world stagey on the for geopolitics. the fixed income manager at aviva is joining us in london. great to have you with us. we are looking at a fairly significant moment from a .eopolitical point of view translate that into your perception on risk. i look at geopolitical risk this morning rising relative to last year, but nowhere near the spikes we saw at the start of the year. from the bond market perspective, how pressing is geopolitical risk? >> it is one of the things that could cause a flight to quality bid for developed market fixed income. i would say we saw the start of this year lots of geopolitical risk related to tariffs and even in that environment, we saw a

roughly 25, 30 basis point rally in tenure treasuries down to about 270. we have seen bouts of this already this year and it hasn't been enough to direct the course of u.s. yields, which have been moving higher. one of the risks to the high-yield is the level of short positioning that has broken into the market at the moment. if you had said at the start of the year we would get troubles in the middle east, tariffs threatened on a global scale you would thought -- have thought that would unwind the position and treasuries would be at 250. fact that didn't happen points to a bias toward moving higher. anna: in terms of things that might influence the bond market -- inflation is one of them, and that ties in with the story -- oil prices going higher could impact inflation. it is interesting to see what is priced into the oil markets and what is priced in in terms of inflation. what knock on effect will that have?

jub: trump has been so vocal about the deal that it would be amazing if it is not fully priced into markets. we might get the buy the rumor, sell the fact. we could see oil price go down. for the view on inflation, you need to look past oil price a little bit and look at the core inflation numbers. the reason the core print in the 1.18%, just a stones throw from the inflation target. that is more the story than what is going on in the oil price because it will give the fed ammunition to continue forward guidance and for fixed income markets, that is the main driver. anna: we will pick up on these things shortly. jub hurren from aviva stays with us on the program. manus: it is shaping up. m&a crossing the terminal. pay 46has agreed to

billion pounds for shire. the bidding war is brewing in the media space. fox entertainment assets are in focus. let's get to our conglomerate editor. take us through the details on the takeda side. they are making it appealing, it is all about the cash. loads of money. it certainly is a rich deal. this was a battle that went on for weeks and weeks. they have had to raise the right -- price a couple of times. this was something they felt they needed so they paid up for it. price they previously announced, it came in at the same price as that, roughly 60% premium over the share price. that is a lot of money. i don't know if that is the highest premium takeda has ever paid, but more than the previous big deal, such as the purchase

even in theh -- pharmaceutical space, that is a lot of money to pay. they will have to get their money's worth out of this company once they bring it in. anna: we've got this chart on the screen that talks about the debt level or the amount of borrowing that takeda will have to do to get this over the line. we will see if this needs amending and what they have said on what they are barwin, but this looks like it could push up borrowing for takeda substantially and moody's has warned of what that does. that is an interesting dynamic for this story. dave: it is. , that adds to ceo the pressure. not only do you have to perform and integrate this company and make it pay, but you have to got -- have to start paying the debt and that limits what your options are in terms of your capital structure.

this is a lot of pressure to bring onto the company, but it is also a sign of confidence and a boldness that the company needs to go global now. this has already been a bold company. they brought in a foreign ceo into what has been a traditionally japanese business. they have a pretty good record of globalizing the company, bringing in assets and making them work. even though they have to borrow a lot for this, i think there will be a lot of investors betting on them to make it work. manus: can we focus in on the comcast-fox story this morning? fox badlyst need enough to outbid disney? is it so pivotal to the comcast strategy? it is. dave: you are talking about primarily a tv cable company that is losing subscribers. it sees its future in the

broadband business where it is growing. that has been the focus and for that business, they need content. this is happening at the same time where its biggest rival, you have at&t looking to buy time warner, a similar vertical tight integration deal and so they need to get access to content to keep up. they're looking at buying sky. if they bought both of those, and they said if the time warner-at&t deal goes through, of sky. bid for 100% if that happens, we are looking at 100 billion dollars of assets they will take on. very bold, like takeda. another ceo getting aggressive out there, buying companies, trying to expand sales to keep in aand expand scale rapidly changing industry. you've got the name that comes up, netflix.

that is the over-the-top model, starting to put pressure on this industry. manus: if you look at what netflix and amazon have been able to do in pricing, you begin to understand the proposition of content. -- i amrime and netflix paid up for both of them. they've mccombs -- dave mccombs joining us. juliette saly has your business flash. juliette: a unit of shell has agreed to sell its entire stake canadian natural resources with the proceeds used to reduce debt. its 97 pointl sell 6 million shares in canadian natural, the total pretax protein -- proceeds of 3.3 billion u.s. dollars and the transaction is expected to be complete tomorrow. according to a person familiar with matter, shares are being offered at $34 each, a discount from its close yesterday in new york. qualcomm is getting ready to push developed processes for

datacenter servers. the biggest maker of mobile phone chips is exploring whether to shatter the unit or look for a new owner. the division have been working on ways to get technology from armed holdings into the market. of intel's only rivals in developing semiconductor designs. a qualcomm spokesman declined to comment. tesla's elon musk is putting some money where his mouth is. $9.85 million worth of his companies shares, his biggest purchase and's march last year. already the largest shareholder, now approaching 20% . he purchase comes days after taunted short-sellers in a series of tweets about his combative earnings call last week. that is your bloomberg business flash. anna: thank you, juliette saly

in singapore. the first u.s. bond auction of the quarter are being held today. with $31 billion of three-year notes on sale. ale give us an indication of the appetite for treasuries and whether yields will rise further. jamie dimon told bloomberg in an exclusive interview that markets should be ready for 10 year yields to jump higher. a possibility for acceleration -- the fed raises rates a little more than you expect in the short end and might force the 10 year up. you could easily do 4% bonds. anna: that was jamie dimon speaking exclusively to bloomberg. jub hurren, fixed-income manager at aviva is still with us. of course it matters why yields would go higher. he was talking about all the good reasons for yield to go high. could you see 4%?

jub: i think it is not an unrealistic target. the fed is signaling they want to hike about 100 basis points higher than the market is pricing out. we could see normalization their 100 basis points and the yield is flat in the space. 4% from where we are today isn't too much to ask for. the biggest story on the supply side is this year, we are seeing central banks being net sellers of treasuries for the first time in a long time. certainly in recent history. the fed are trying to tell us their balance sheet wine down is happening -- wind down is happening behind the scenes, but they want to sell two hundred 30 billion worth of treasuries this year and the traditional buyers, asian central banks and fx reserve managers, aren't there in enough size to take that down. that is coming when fiscal to about $1xpanded

trillion. now you have 1.2 trillion dollars of treasury floating around in the system that needs to be taken down. anna: will that happen without the tantrum? manus: we used this chart earlier with our barclays guest. the breakevens are rising. jamie dimon warns in terms of supplies. does the treasury market -- where on the curve, if you have to choose, where would you want to be? the emphasis on this article would be the last place you would want to be is on the longer end of the curve. we are quite bearish u.s. fixed income across the curve. on the front end, we think the fed are probably going to follow the dots and lay down forward guidance. the 2020 dot is worth taking on, but term premium is negative. we think that phenomenon has been driven by qb. central banks have been buying

this asset class en masse and come out with a program day in and day out and buy the amount that day without any view on fundamentals or valuation. that compressed term premium across the curve means that everyone thinks 30 year bonds can't go past 3% but we say, an environment where fixed-income volatility is rising, term premium is rising, we could see long and yields move for the first time in a while. anna: that sounds like to a lot -- like a lot to worry about for m&a deals. we have seen a lot of m&a announced. corporate debt levels, is that something to worry about when we see these rates go higher? the grossyou look at numbers in the u.s., it looks like something to be worried about because if you look at corporates, leverage is higher than in the crisis.

when we look at what that money has been used for, typically it has been in share buybacks and m&a. the margin issuance has gone into real assets. there has been more of a financial engineering exercise than there has been a pure relay urging. that is not to say there isn't anything to see here -- rele veraging. that is not to say there isn't anything to see here, but they are probably less worrying under the hood. manus: jub hurren, fixed-income manager at aviva. that is it for this edition of "bloomberg daybreak: europe." we have had some cracking headlines, industrial german data for me is pushing the euro a little lower. it is all about m&a. it is all about the drugs and the coms space. deal iskeda-shire

adding significantly to underlying -- more on this in the next program. this is bloomberg. ♪ mom you called?

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♪ guy: good morning, you are watching "bloomberg markets: the european open." we are live from london. i am guy johnson, alongside matt miller in berlin. asian stocks extending gains, setting up europe for a positive day carried the cash trade is less than 30 minutes away. positive day. the cash trade is less than 30 minutes away. ♪ guy: jamie dimon tells bloomberg we are in a new era for rates. >> you could easily do 4% bonds. guy: jerome powell