>> i'm kailey leinz, let's get to "first word news" this afternoon. by -- the attack today prosecutors fear could be terror related. police described him as a multiple repeat offender who has been incarcerated since 2003. italy could be headed for snap elections as early as july. the country prime minister delegate left a meeting with sergio today without an agreement on a cabinet team. find common to ground. dissolve parliament within 60 to 70 days. students at a texas high school went back to class today,

returning for the first time since a shooting that killed 10 people. they say conditional law-enforcement officers will be at the school this week to provide security. they were found unconscious after march 4. moscow strongly denies the allegation. day, powered by more than 2700 journalists and analysts in 120 countries. this is bloomberg. ♪ julie: live, from bloomberg's

world headquarters in new york, i'm julia chatterley. julia: i'm julie hyman. scarlet fu is on assignment. joe: and i'm joe weisenthal. is -- the question joe: "what'd you miss?" julie: assets for the country that could beheaded for snap elections as early as july. canada takes on a high profile infrastructure project. thein trudeau talks about pipeline, with much more, just ahead. president trump us trip appears to be back on. north korean officials are headed to the united states to iron out the details of the summit. -- julie: it has been a pretty lively session.

" let's givemiss? you a quick look at markets, it has been a pretty lively session. the s&p 500 is off 1.5%. relying the pressure that we have seen on the likes of the financials, industrials, the materials sector in particular. financials are off the session right now. be at the nasdaq, the relative safety of an cough -- safe haven, we have seen a significant repricing in the rates market. let me give you a look at what we have seen. 3%, as i mentioned earlier on, a really long way away.

in the epicenter earlier on, italy, the tension surrounding the apparent collapse of that there. spreading the widening story. it's the largest in a single session since june 27, 2016. julia: we have been saying since brexit a lot today. >> brexit has not yet happened. canada is buying the kindred morgan trans five line. nationalizing the highest profile infrastructure project. stephanie flanders is talking to the canadian prime minter in toronto right now. let's listen in.

>> determining that the pipeline was in the national interest. not every pipeline was. we said no to the northern gateway pipeline, but the transmountain expansion was the twinning of an existing pipeline . there are 40 some indigenous communities that have signed cost-benefit agreements with it. we got the approval of the british columbia government at the time. and then there was an election in d.c. and the new british no,mbia government decided they wanted to do what they could to try to block the pipeline. too risky forcame a commercial entity to go forward with it. so, we are now in the position where we, because this project is in the national economic interest moving forward in our climate change -- climate plan, getting a price across the country, we have stepped in. we are going to get the pipeline built. we don't intend to be in the

pipeline business for the long term. there is a very small business case for this pipeline, but we are going to ensure that against built up so that we can get our resources to markets. >> how is nationalizing it going to make those pressures go away? there were environmental objections to this. how is that -- are you just going to steamroll over it? >> the challenge that the pipeline proponent had was political uncertainty involved when a province was determined to do everything that it could to block the pipeline. when you shift the ownership of the pipeline from a private corporation to a federal government that has explicit control over resource projects that go between provinces, a lot of the legal barriers, a lot of the challenge points actually

disappear. we approved of this pipeline under the existing regulatory authority that we had enhanced. provincial government in british columbia approved the pipeline the pipeline with strong conditions that we absolutely agree with. authority to proceed and it became a question of -- is canada actually able to get big projects built? and therefore we are demonstrating the yes, we will do what we need to do to get projects properly approved and built. >> you are demonstrating that the public sector could do that at sending the message that maybe a private sector investor should not expect to get this kind of infrastructure deal done in canada. >> but we have also seen a number of guidelines built over the past years, a number of energy projects built that didn't need this kind of extraordinary intervention. tos as one province decided

directly contest the federal regulatet authority to and allow for construction of intra-provisional -- intro provincial works. this is been a long-standing element of the canadian federation of the system of rules. and the exceptional circumstances of a government going against the federal government's authority, requiring us to take this exceptional step to demonstrate that when we approve of a project, we are going to forward with it. >> if this comes up again, you're willing to nationalize again? at thingsn a se-by-case basis. getting this pipele built is in the national interest and we as also very confident that the pipeline gets built, the business case is certainly strong enough that there will be

bought -- be buyers for this pipeline that women tend on holding onto the pipeline for the long-term. dekes thinking about the things that could easily hijacked this coming up next week, they are always at the mercy of events and discussions around national security. i guess your summit to be hijacked by north korea, by italy, by all the things that are happening or did i guess trade is really what's casting a shadow. your foreign minister is in washington today. if we don't get a deal in the next week or so, the window for a deal this year is really starting to run out. are you worried? believe deeplyto that there is a win win win opportunity for canada, mexico, and the united states. continuing to work constructively with the united states and mexico to do that. powerfulhat trade is a

lever to create opportunities and jobs and growth in the economy's. we understand that there is an anxiety about trade out there. large segments of the population don't to feel it has worked well for them. as a country we have been working hard to make a case for sign that we can progressive train deals -- trade deals where we have demonstrated equalityes like gender -- >> flat tariffs on canadian steel. >> taking a step back, the g7 is fundamentally a gathering of the most advanced economies in the world to talk about challenges that we have in common. there is one big challenge shared right across the g7 and the developed world, which is

how do you reassure people that all the changes we are going through in our work voices, stemming from automation to ai to greater trade deals to globalization in general, how are these factors going to ensure that the growth that we create is fairly shared by everyone? when you look at the anxiety of , theggressive nationalism polarization, the insularity, anti-trade, all the facets fitting in around the world, it stems to an anxiety in which the people feel the system we have might be good at creating growth, but is also good for all citizens. whether it is president trump getting elected on the commitment to make america great again, bringing in people who felt left out by the recent in the united states,

whether it is the same motivation that led to questioning by the u.k. voters of their association with european union, whether it's whatever is going on in italy right now, whether it is economics or the approach in into, folding more people the workplace, like women and retirees, or whether it is the challenges that have recently been overcome in both germany merkel,ce tried angela we have a similar challenge. how do we demonstrate the growth can be reassuring and confidence segments of larger our population. there are places that have exacerbated this year in their kids future. canada is one of those places that is working hard to allay those fears. having an honest and rigorous conversation about this shared and thee we face

solutions we should be putting forward to create growth as better for everyone is exactly one of the things we're talking about. >> just thinking about the negotiations right now, and i few days, you have to make some real headway with the americans to have the prospect of renegotiations this year. are there things the you are willing to go up as part of that conversation? >> in many times i -- many times i have said i'm not going to negotiate in public going forward, but in any trade deal there are always ways to look for compromises and understand that we can get to a win win win , but i have also said clearly, and canadians know this about me, i will stand up for canadian interests and only signed a deal that's good for canada. no nafta is better than a bad deal. we have made that very clear with the president. we know that there is a good deal to be had they can create

gainr all three countries. that's the nature of the non-zero-sum game when trade is done properly, but we are not going to move ahead for the sake of moving ahead. washington a lot of people have been impressed by the way that the canadians in particular have galvanized the business community to go to congresspeople and senators, wilbur ross, commerce secretary, i think, said that the canadian officials have spent more time on capitol hill than they have with official negotiations. do you find congress easier to deal with than the official negotiate -- official administration? >> one of the easy things is the level of interconnectedness. countries,ny other there are many embassies there but we have a level of partnership with the united states that is not like any country in the entire world. when we talk about whether it is prime minister to president,

parliament to congress, whethers the governors, it is legislators to legislators or businesspeople to business people, there are huge and deep and actions between us and when we want to talk about the advantages of trade and of modernizing, we find that governors are extremely strong allies in that and that members of congress are as well. they know, they see within their communities all the jobs that come from smooth access to the canadian market. the u.s. sells more goods every year to canada than it does to china, japan, and the u.k. combined. we are their number one customer . there is no question that any disruption of that flow of goods would, yes, the terrible for the canadian economy. but it would also be pretty terrible for a lot of u.s. jobs and a lot of industries. making sure the case for

something that, quite frankly, a lot of americans take for granted, rightly so, we have just always been there and working together. highlighting the benefits of what we have always had has been the work of we have done and i really have to say that across political parties, the level of cooperation on this issue, you will know that there's a lot that i agree with on the official proposition and with the other parties in the house, but on this issue of renegotiating nafta and the common front have shown for different parties in government ,cross our provincial capitals that has really been effective and strengthened our position in , signicantl with the uned stas, where it's easy to see that democrats might

have one perspective, republicans another. certain factions think one way, others another. not the same kind of unity to have been able to bring to bear as canadians and that is not just to our credit on a moral level, it's actually an extremely useful advantage in our negotiations. >> i guess that one of the things i would have thought might concern you is the uncertainty around this has been pretty damaging to canadian business. you have talked about it, many officials have talked about it. it seems to be doing quite well for the americans. how are you really going to push the urgency of this when actually the more uncertainty there is, the more there are companies saying -- guess what, if i need to add capacity am going to america? wethat's one of the reasons are motivated to try to get a trade deal and why we are willing to be very forthright. >> how are you going to get it

this week? you need to get it this week. >> we will continue to engage with all levels of the u.s. administration. i spoke with the president last friday and i will continue to engage with members of the administration and impress upon som that when the u.s. has many things going on, picking fights with china, trying to solve north korea, concerns about all these different parts of the world, being able to show achievement and solid this within the north american market , demonstrating a capacity to get a good deal would be a political win for the president. this is a good thing and it allows them to focus energy. yearve spent a good negotiating the modernization of nafta. there is a moment where we should be able to move on to other things.

in the meantime we have gone and signed a number of trade deals and we are now the only g7 a free trade deal with every other g7 country. canada's preferential access to the global gdp, that advantage is significant. yes, the uncertainty, to go back to your question, uncertainty over what will happen to nafta is there and is a factor, but right frankly you cannot get around geography. no matter whether we have a nafta or fall back to canada and the u.s. or go back to wto rules or figure it out ad hoc, as sometimes the u.s. administration puts forward proposals, the interconnectedness between the canadian and u.s. economies is not going to change anytime soon because it has been a source of so many good jobs and so much prosperity on both sides of the

border. likefortunately it looks president trump is able to have different strands of trade policy. if i were you looking at an administration that is supposed grounds ofe last renegotiation of nafta but then announces a major investigation into auto imports, one of the biggest supporters, doesn't that send a message to you that they are not interested? >> it might. it might just send the message that they really want to make concessions at the bargaining table because wouldn't it be terrible for that to come in? but again, the idea that the export of cars from canada to the united states is somehow a national security issue for the united states is even less traction find real that any legal level than the fact that aluminum horse

nationals or threat to the united states when they use our aluminum in their fighter jets and are steel in their armored vehicles. canada and the u.s. are the example of two countries is there are any two that have no national security locations towards each other. more -- it looks more like a negotiating tactic , you know,ks like aggressive attempts to hurt canada and the united states. the levels of integration of the auto industry or the steel and aluminum industries mean that these tariffs would have devastating impacts on american jobs, too. >> is the tactic working? what do you use trying to do with this tactic? >> one thing that the president has prided himself on his being

unpredictable, being willing to theupt the patterns of well-established traditions of international relations. i think it certainly causes people to take notice. getting courage is us in our resolve to yes, indeed modernize nafta, but it doesn't push us to be willing to accept a bad deal for canada because quite frankly , that's not what we are going to do. >> do you worry that donald will be unpredictable and your summit? [laughter] >> i think that the international relations with anyone, regardless of whether it'sgree with them or not, all about finding common ground, a common shared priority. to make ourlingness economies work for the middle class and those working hard to join them is something that

certainly, in our goals, anyway, if not in our mechanisms, the president and i, and many of the other members of the g summit, we will stay focused on the ways to find consensus. >> if we agree to disagree, that's fine as well. what the g7 fundamentally is is an opportunity for us to have candid conversations amongst politicians and leaders of perhaps different ideologies whose citizens areyou kn, in advanced modern democracies and therefore sharing, broadly, of a range of values that we have in common. >> we are just starting to see quite a lot in the markets with the results of what's happening in italy. there's a fine tradition that i mentioned earlier of the g7 being hijacked by whatever happens to be on the agenda.

how close are we, do you think, to having that be the issue of financial services in the eurozone on the summit? >> it may be part of it and i certainly look forward to who is going to show up from italy in 10 days. normally we have a little bit more notice on who is going to be there. but there is just no question causing so much of the political turbulence and uncertainty around the world stems from fundamental anxieties that people have about the future. about their jobs, about their kid hostage jobs. sharing what we have been able to do in canada, which as you know, we have been investing massively in ai, investing massively in the tech illogical advances that, whether it is computing or robotics or what , that will be disruptive to our workplaces as

a global economy. to do those at the same time as we are investigating direct and indirect support for the middle class, whether we are investing in infrastructure in ways for public trends, housing, to green infrastructure, we are demonstrating that we are reassuring, giving people confidence in the future that we are building together and they will be integral players in the future together through education, training, and support , where the kind of anxiety that is leading to what's happening in italy and elsewhere isn't taking root to the same degree in canada. yes, we have anxieties and you can talk to people who are worried about their futures, but it is in translating into almost some of the big themes that we see elsewhere. the populism, the polarization, the anti-immigrant -- all of these things are not necessarily as strong and canada as

elsewhere because over the past two and a half years we have been able to demonstrate the strongest growth in the g7 having historically low unemployment rates, hundreds of thousands of jobs being created over the past two and a half years while at the same time signing trade deals and moving forward on a strong investment in science and growth, these kinds of things altogether are a narrative that give off confidence in the plan we are putting forward, which is focused on allaying fears rather than exacerbating them for short-term political gain. we shall leave that conversation there. the head of bloomberg economics speaking to just intraday -- justin trudeau. great headlines there. you can check out the full conversation on the bloomberg is this brief. markets were off the lows? ratio still a four to run of stocks rising in the s&p 500, however, the difference between

the averages, facebook is up today, four minutes until the close. this is bloomberg. ♪

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[closing bell] julie: stocks end lower, off the session lows. the euro 10 year ending at session at 2.7% and percent. i'm julia chatterley. >> i'm julie hyman in for scarlet fu. liveif you are tuning in on twitter, welcome to our coverage that we offer everyday weekly from 4 p.m. to 5 p.m. eastern. we begin with market minutes and as we have been talking on the lows of the session, the dow at one point falling more than 2% at its lows, the s&p 500 at its lows, down 1.6%. definitely a little bit of a comeback over the course of the day. still the worst-performing group by far is financials, losing 3.4% on the session, the lowest since last november.

health care, consumer discretionary, selling off relatively sharply over the course of the day. in the advanced to klein mine in the s&p itself, stocks declining , four for everyone it was rising. still pretty negative for stocks. is aboveshould mention the 20 day average for the s&p. togan stanley helped exacerbate the selling within the financials. andy saperstein, cohead of the wealth management unit said in a conference that transactional revenues remained slow after march and since the second order had obvious headwinds he felt good about year-over-year growth and it wasn't enough to salvage the stock performance. down along with automakers and suppliers, nissan said that they would cut vehicle output in mexico towards the summer to reduce inventories in a cooling market, as well as the lingering uncertainty on auto tariffs.

alongan following right there with morgan stanley and some of the other financials that we saw, yields coming down. also, jpmorgan at one point during the day was negative for the year. that is the first time today that has happened since 2016, 0.08%. macron, one of the out performers today at an 18 year high, macron has been on a tear, featured in barons over the weekend, talking about strong pc demand today that will be good for memory chips. so, talking at the down trend. at wheres take a look the real center of the action was today, which was the bond market of sovereign fixed income. in the u.s. massive flight to safety, people buying u.s. treasury's on the short end or the long end, basically some of the biggest moves we have seen across the curve since brexit. two year yield down, the 10 year yield -- remember, that was like

3.11% days ago. people talking about finally being off to the races. look at th, people piling into that safe haven amidst anxiety about europe and there you see right below that the italian two-year yield, this is an unbelievable move. , that is 1.86?t i have never really seen anything quite like that before, such a big government, we are talking about a g7 country here. to give an example of how this is spilling over into anxiety along the rest of the periphery, there's portuguese yields here and if we take a look at the intraday action in the italian two-year, you can see how incredible it was. it was right in the 4:00 hour, right when i was sort of getting up when we had that first selloff and there was not that much liquidity with a bit of

stabilization, the yield had gone down below 1.9%, looking incredible before it ended close to the highs of the day with an incredible swing, the likes of which you never see for a market of this size. julie: then it's a regular occurrence that the ecb has shielded it for a while. currency land, it's very much tied to what they are generally saying. you can see the euro dollar by 8/10 of 1%. u ringing in my years with a whole other month ago. we saw a flight to safety as you would expect. the euro swiss is off by 1%. pushing 1%, it's likely to see dollar support adding to some of the traction you can see here. i have a chart that you want to show as well with relative volatility and i cannot even remember the chart i should have

brought up. does anyone remember? no? anyway. i will talk about that again in the conversation to come. i want to show you what else happened with turkey as well in the session. with some of the eastern european currencies as well, the checks that you can see there, various currents they're often the trade, watching what has been going on in the dollar, the issue there hasn't gone their way, but tech is in fact stronger relative to the u.s. dollar on the day. joe? look at theake a commodities market. interesting action there, gold is not doing well, not as well as one might have expected. you might have guessed that there would be some sort of like the gold and the anxiety. not so much down, modestly, oil is interesting to watch. remember we will well -- we were well over $70, intermediate

several days ago, with signs emerging that maybe there is going to be some sort of increase in production to ease the pain. something to watch their. cotton, not a commodity that we talk about that often, but if there are limits on the weather concerns about the impact of storm alberto and cold weather sending cotton up over 4.6%. and those are today's market minutes. talking more about the market selloff now, we got brian, the capital markets chief investment strategist. --brian belski, let's start with you. we know you haven't upwards bias on the s&p 500. obviously, sentiment is not fantastic today to brian: today. -- today. brian: today. i know you look longer-term. are the risks that we are watching in italy more of a substantial problem? brian: it is more of a substantial fuel to buy america.

a look at what the dollar is telling you, right? and take a look at 2010, 2011, 2012, throwing in brexit of 2016, it hadn't happened yet. the brexit vote. i stand corrected. anyway, you see how u.s. stocks have rallied since the issue with the spec to europe, also seeing how europe has rallied, clearly europe went down more in that went of more, but if you are willing to live with volatility, great. the biggest problem is the whole notion of europe being a place that was exceeding consensus for everybody and their family to love. the thing i like to talk about is the 18th consecutive january, myself as a senior investment strategist marketed in january to europe and for the 18th consecutive year, my clients told me to buy europe for

exactly the same reasons, it's cheaper than the u.s. and then during the 2000's, we have the decoupling with the fancy international and emerging markets growth with your of outpacing the u.s. and all of this. every year it is cheaper than the u.s. and you have seen assets leave the united states after a great year last year. what are people holding in terms of this fundamental basket of stocks? that's the bigger issue that no one is talking about. >> come in on the right side of things in the u.s., put it in context how extraordinary today was. across this some of the moves with the biggest we have seen since the brexit vote. it's not unprecedented, but it's remarkable. across the board we are seeing a reduction of risk. we have moved from an environment where there is this

perception of low volatility in risky fixed income instruments where italy has clearly disproven that. there's multiple equilibrium's in the itaan bond market, with highs spreads and low volatility over the last couple of years anarchy.with clearly we are moving from one to the other. it informs the sentiment that ripples across different markets. and these are markets that might be impacted by this higher volatility. given the position size, your market risk goes up, so what do you do? you close position. you know that there are larger positions short on futures, so i say that the biggest loosens brexit, but this worse anything

that we saw in brexit in terms of dollar impact on markets. shortecause people are so . >> yes. i look at this about an hour ago . the belly of the curve is the popular area to trade because it moves a lot and in the last day of the art before the brexit, the short position was 35,000 contracts. then it would short 629,000 contracts. for every basis point that is moved, the speculative market was 20 mind. those were down 19 basis points. five-year and the tenure in particular, to have this kind of dramatic move just based on positioning to some degree make sense, but getting back to what you are saying, we have riced out in the session today a 25 basis point hike for the united states. is that a genetic overreaction to the risk in europe?

arguing that you have been saying for a long time that there are reasons to be cautious in europe when you look at the fundamentals, but that is one heck of a reaction. >> it is. we are a marketplace that feeds on perception and conjecture and we don't really believe anything until it actually happens to us. we have no faith in the art of investing anymore and we are so afraid to be wrong, we don't want to be right overnight en route react, react, react. let me be clear, this is not 2008 2009, we are not seeing signs of contagion. stop saying that. this is one of these events where, think about the italian importance to the world in europe, europe has been a declining asset for 50 years. also a big trading partner for the united states. it's not as though if the european economy suffers as a result of this that we feel

nothing. we are acting, julie, like italy is out of the eurozone. that's the whole issue with respect to currency devaluation going down, affecting trade imbalances based on what happened today. it's a 25 basis point -- i don't know, i think it is too early to say that. we believe it is just another example of reactive, emotional trading providing opportunity. with financials on sale today, we would be buying more. >> what else would you be buying? >> industrials. that's another shortsighted view . if we are going to increase and build stuff in the country again , financials and industrials will benefit. cameron, will you be looking at tomorrow? >> i would say a couple of things.

one, we are getting to the point where you start to look at what is being priced into the fed and you start to look at it as interesting. the problem is that everyone has got the other side and that's the issue, in the long run this is all in overreaction. in the short run, particularly when you have volatility like this, positioning is the fundamental. it doesn't really matter because you don't say equities today based on 2019 earnings. you do it based on your position today. not only a fixed income with commodities in short, going up, or going down, is that going to stop today? my guess is not. at least until month end. it's easy to say that we will get some risk impression. once we only price in one and a bit more hikes, you start to say that looks interesting. certainly on a plane sheet of paper you would want to take the

other side and if the sheet of paper is full of red, a trickier to hope to get back in with the basic points from now. >> come on, we are investors. the bond people have had all the money for 36 years. it's time for us to seize on these types of opportunities. it's time to buy america and stocks again. this changes nothing about the high-quality notion of u.s. the earnings environment that we are in and that is what we are paying for. there you have it. , werechick --brian belski you told tstop talking? i was being told to stop talking. political chaos in the italian bond deal surging, white italian voters could be heading back to the polls for a snap election as soon as july. what do we think of what the

italian president did over the weekend? we will be discussing from new york. this is bloomberg. ♪

kailey: let's get to first word news this afternoon. gaza militants fired dozens of rockets and mortar shells into southern israel, wounding three soldiers. nikki haley said at the security council should be outraged in response to the largest attacks out of gaza since 2014, which she said were directed at innocent israeli civilians. has allclick parliament for a partial recount of the vote cast in the may 12 election following allegations of irregularities and rod. they are demanding a manual

recount of 10% of the vote and a full recount is more than one quarter thought to be irregular or fraudulent. having claims of a right -- irregularities earlier this month in which an electronic voting system was used for the first time. abc is going the plug on the hit reboot of "roseanne" following her tweets about valerie jarrett. the president of abc entertainment called it inconsistent with values and said that they had decided to cancel the show. the disney ceo, bob iger, tweeted that there was only one thing to do here, the right thing. she apologized for the tweet, saying that she made a bad joke. the revival this spring was an unexpected major hit for abc. global news, 24 hours per day on twitter, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ julie: "what'd you miss?" italian voters could be heading back to the polls sooner than

expected. the former executive that have been tasked with forming a caretaker government left a meeting with the president without any agreement on the cabinet. they will meet again tomorrow and another failure could prompt a president to dissolve parliament and hold snap elections as soon as july of this year as the european union crisisnother existential . should the ecb be doing more? for now we welcome our opinion columnist by phone from london. thank you for making the time this evening. i know it is late. he wrote a piece today about redemption and italian debt. they have to provide an amount of money this year with the ecb bond buying, just spell out those numbers for us here. how concerning is it, ultimately, if they need to issue more debt?

>> the big number that we need to worry about is that the european central bankers spent 4.5 trillion euros with quite since 2015 when the crisis was already over, certainly it was over in the states in the u.k., but 2011, 2012, europeans had cause to say -- drop the balance sheet, they raise interest rates thinking they were out of it and realized quickly that they were wrong. , bumbling through. in 2015 they decided they were going to get on top of it and offered further euros with a lot of change. now all of a sudden they are wasting it i am allowing european yields to have gone above 2.4% in the 10 year today, jumping to 3.4 and i believe the european central bank was buying today.

nonetheless we won't know about it for a while. withleft the situation that sensational cash flow situation this year with redemptions in the market. there got positive cash flow in the sense that this year, let alone when the central bank itself starts buying. it's a great situation and the european bank had to let it go. joe: in 2012 they didn't even spend a penny on it. the backdrop for countries that would be willing to go buy some program, that doesn't do anything of the country doesn't want to be a part of a program that investors are concerned about with a populist government in italy, clearly that would not be a government that wants help from the ecb. what can the ecb ultimately do against the new government if

the new government is not playing ball? the way the question was phrased is quite interesting. controle to be has here. they should be an instrument of democracy. the european union should not be dictating to a sovereign nation. they should be a part of a union. the context of the european astral bank has many tools, you mentioned, are an implicit stick that they can put on still now between one and three years of maturity, they can buy anything they want to buy as long as they are saying that the nationstate is happy for that to happen. unlike qe, they actually take the money back out again. it doesn't stay in the system. the european central bank has a lot of tools here. but more importantly they said to the market that you will be buying 4 billion worth of

italian bonds every month at least until september, reinvesting all the maturities this week in which whatever share it is, which should be considerable. it has the tools and is disposable and clearly hasn't been using them in the way that they always have done in previous crisis with a french presidential election and with the italian referendum itself back in december of 2016, the ecb is choosing not to do what it is supposed to be doing. we will see if they decide to change their tune on that. marcus ashworth, joining us by phone from london. for more on the political situation in italy, pulling for rasmussen global in london. joe: nina, thank you for joining us. the essential extra nation was that it was ok to have an

anti-euro finance minister but not if you didn't campaign on it, otherwise that is a bait and switch. do you in's -- expect in this that when we have another election for the more populist parties to campaign on a more explicitly eurosceptic platform? >> i don't think we will be seeing that. i do think that we will be seeing a new election because the technocratic element that has been elected is unlikely to get the votes that it needs in parliament. heading for new elections, the two populist party five-star movements who have campaigned on an anti-migration kind of skeptic platform have not made the anti-euro platform save. why? italian voters are eurosceptic and they like these arguments that they are thinking about with the italian economy or the woe of germany and brussels. italian voters are similar to greece in 2015, they don't actually want to leave the euro. they reason they didn't actually

campaign on that is that on the euro position it benefited them and i don't think that when we go into new elections they will campaign on anti-euro platforms that take us back to exactly the same crisis we have now. allow theresident choice for finance minister to come into office it would have been a self fulfilling crisis and italy would have sleepwalked out of the euro. we will have the caretaker government with new elections, nothing will change. for markets and investors it looks like a grim outlook for italy because i don't see how this situation is going to resolve the euro nightmare the rumbles along. in recent polls we have seen the league gaining relative to the five-star movement. if we go to fresh elections and it happens in july, july 29 been the date that's muted, we could see some form of center-right coalition as the prospect to

gain a berlusconi italian win with the league tying up, sort of pushing the five-star out simply because they have enough votes to do it. >> and let's not forget that the league has been around for a long time. they are a fairly nascent political party. suggest that if a new election were to be held, they would be the big winners of the race. italy observers say that despite the league and five-star have been putting on a united front, behind the scenes, the league might have very cleverly been manipulating this ploy because the fact is that after their choice for finance minister was rejected, they could have come back whnother. by the way, it w wl within the president's constitutional duty to do so. this has been done in the past by italian presidents, but they refused to budge on that which leads me to think that the league is playing a sophisticated political game

where they think that if another election is held they will do even better and they will not have to make compromises and if they do, they will go back to the coalition failing the 40% majority that they need to have a parliament. it's clear that they would be the junior partner in the coalition. all the other parties are remaining static and it looks like the league at least, the latest polls indicate that they seem to be the big winner and it's unsurprising if you look at what the leader of the league has been saying with his overtures on social media. he is keen to portray this as a attack on democracy but realistically, it's not, the president was acting well within constitutional rights. others you say and as commentators have said, the president has the frog of on the constitution to reject this finance minister. there is this other view and i think a lot of non-italian's raise their eyebrows at it and obviously these parties would

like to make a big deal out of it. sure, it's center-right, but it's really bad and it undermines democracy. howdy you reconcile those views? can it be well within his rights but also a move that may backfire and undermine the current constitutional structure? >> at him think it undermines the current constitutional structure. he was between a rock and a hard place. having the proposed finance minister, the 82-year-old skeptic with a plan b b to leave the euro, you are basically allowing a self fulfilling crisis to take place in italy. nonetheless -- and by the way, he has not said that italy should not be the euro. he simply said that if this is to happen there needs to be an open debate about it and it needs to take place in the election campaign before the election and by the way the parties didn't have this in their coalition agreement either . the people haven't had a chance to vote on it.

you are absolutely right, the populist parties will seize upon a political gains in the next election. this is my primary point, we will be stuck in a new election where we are right now again. >> angela merkel was inspiring merkel, peoea thought. extent do they stand back and allow the mood to life? what part does that play. >> he was quickly put down by the head of the european council

the cure to serve. like theally it is political movements that you see around europe and a populist wave, is very emotive and it might not have much to do with what makes economic sense. the thought of italy returning scary fora is very investors and they will sell their italian assets. where or not that is a defining diameter for voters, i don't think that will >> nina, there was a little bit of anxiety today in part to gaze -- portuguese. is only up specific issue right now in your opinion? >> it is larger than italy. and if you basically have two populist parties that storm the election and are likely to do better in the forthcoming

elections, in particular the leak, even though they temper down their rhetoric on the euro, if you study what the league actually thinks, they literally want to leave europe because they think it is bad for italy. theing that -- taking ultimate conclusion, and were italy leave the eurozone, the effects of that will not only be felt in spain and portugal, but for the rest of the world. >> and early on the world, you said it was complicated to do that. it's good to have a con -- a referendum on leaving the area. unto greece,g you expected to exit their bailout program. what is the risk, if we do see greater spillover with the likes of spain, portugal, and greece, chance.n greece's

>> when it comes to the eurozone, i think greece has been contained for now and we can draw parallel between what we see happening in italy and greece where populist politicians come to power and promise the electric -- electric eletric something. similar in italy, they know but just do not want to leave the euro or the eu, but they also want to have a plan b for exiting the euro. these are claims made by populist politic wchre simply n -- you cannot reconcile the two. with the case of greece, it was able to be contained. if italy is searching for an exit -- >> that will be a nature -- that will be a bigger issue. nina, thank you for talking to us.

as always. let's get to your first word news update. trump iste, president raising money and rally support and a crucial senate race. yep hoping -- he is hoping to boost the chances of marsha blackburn. republicans hold a 51 249 advantage in the senate. 49 advantage in the senate. according to a harvard study in the new engine -- new england , theey -- journal government said there were only 64 deaths in hurricane maria. they were more. the trump administration says ethnic cleansing targeting muslims has not stopped. states, they

imposed sanctions. the annual report on the international religious freedom which was released today finds the violence is continuing. herel news, 24 hours a day and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's get a recap of the market action. the steepest levels have been backed off with real estate and utilities higher, barely, in the s&p 500. that is for stocks falling by 3.37% on the day. we saw the drop in bond yields as a pretty dramatic move. crossing the terminal now, the u.s. treasury department and the that an-- indicated

plus might be spared from sanctions according to a person familiar with the matter. let's toss it to joe. miss?"t'd you could this be a symptom of a much larger problem. one billionaire investor warned it could be a time to come. >> and existential crisis is no longer at the euro speech, but the harsh reality. somethingds to do drastic to escape it. it needs to reinvent itself. more to help us but all of this stuff together, i'm joined by a research director for the forecasting center. thank you so much for joining us. even before italy got people's attention, there has been a lot

of pockets of anxiety. argentina, turkey, south africa, and the whole complex there. is this something bigger going on here or is this an isolated story? >> something bigger always starts with isolated stories. if you go back to the housing said that the isolated incidents were contained. i don't know whether it is the start of something bigger at this point, but one of the things we have been seeing is the weak link of the global economy contrary to what people think. this is not the conventional crisis. a lot of people that see the problems they immediately look back and see it is 98 -- 1998 again. this is not that's again. hot money flows are combining ish short borrowing and that

the situation right now. what you have is a fundamental problem for em. they have a group challenge. it has been there since the crisis but they have not been able to address it. their exports peaked out with the markets, so they have to now compensate by finding domestic sources of credit. domestic sources of gold, which remains you need domestic sources of credit. initially, it started with the in 2014 toum and 2016, it showed a bigger rate. >> this is not external reliability, per se, how is then, if we were to see a further deterioration, how would we see it look versus our

traditional yen crisis? the em we will see is investment, the private investment, it is not weak in any case, but it is starting to go up again because growth is not showing up. number two, the capital flow stops coming out because the capital flows are chasing the em. that is why you go to the em. then, because their inflation to currencies,d even if they do not export or import a lot, then, center banks -- central bank's are forced to tighten policies. even if they are doing domestically, because of capital with jobs on the government. then you have an economy where the government is supposed to do tightening of policy and that is

where we get into trouble. joe: growth gets clobbered. >> yes. that is the real problem. they have not found a solution. growth are of em growing shares of the market exports. a lot of attention paid to turkey, who else has a profile the likes of which you have described that is particularly vulnerable in this environment? >> turkey is an extreme case. even taking them for instance, have not been growing. -- if exports are not growing and the domestic economy grows faster, you tend to see the current accounts widen and become under pressure and even the fiscal policy now becomes into question.

the account has been worsening, partly because of oil and partly because domestic growth is strong. joe: real quickly, how does the rise in oil price -- that has caught a lot of people off guard -- how does that factor in? >> there are two sources of em's. ems, evenhe other thailand is a big importer, these countries, so much of the fortunes are tethered to oil. especially india. joe: we will watch those. the research directer for the levy forecasting center. thank you very much. >> this is going to evoke a certain smell from many viewers. servant --ion and you being started

can get a subscription box from katz's. the boxes are tied to the seasons. they will feature food from four to six people. it will have pastrami, sausages, and this is one of these new york icons that apparently julia has never been to. >> i never even heard of it. >> really? but? -- what? e on a to take juli tour. broadcast from the new york stock exchange, they word order in katz for lunch and that was always popular. >> it is a date. >> we are on. from new york, this is bloomberg. ♪

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>> italy's crisis is hitting bankshares in san pablo as one of the worst performers. a bloomberg exclusive and spoke about it earlier. >> i think the selloff is not just defined. we are in a situation today where the fundamentals of italy are very good. the economy is growing at a good positive,orporate are and consumers are positive as well. there is a political uncertainty, but i think the ceo of italy evening -- leaving the and is something overdone this is what has prompted the selloff. italy will not leave the

eurozone and we need to look at the good fundamentals of the economy. tohow much is your exposure sovereign debt and are you changing any of that exposure? >> exposure to italian sovereign debt is 42 billion which is less than our total capital. it is an exposure that is a less than three year duration. we are very comfortable with it. that there anything politicians can do, bakers can do to appease the markets right now? -- bankers can do to appease the market? is important we pass a proper message to the market. the current situation in italy is actually stable. the economy is growing very well. see,tt corporate client i tells me that they have better

quarters than the past one for the yello -- for the last 11 years. in italy has been turned and the situation is very good. italian companies are exporting at rates higher than the rates of other countries. they are getting market shares. in italy, the retail clients are consuming well is well. when you look at -- well as well . when you look at the fundamentals, there is no reason to worry. >> when you look at the selloff, is it impacting your company's deposits or economy? >> absolutely not. i was visiting clients yesterday -- the clients are very quiet and they are very confident. between thesconnect financial market and situation locally. it is important that we understand that more than 65

percent of italian debt is owned by italian nationals. would you consider italy leaving 65% beingnd having impossible? let's look at the situation in a very sensible way. emergency putting any plans in place in case of the situation deteriorating? should banks in general have contingency plans? >> may we always have contingency plans for many no plan forwe have the current siatn. we have liquidity and extremely gh amounts like every other italian debt. the liberty of the italian bank it superstrong -- is it superstrong.

italian banks are strengthened. we are handling exposure in a dramatic way. the situation for italian banks has nothing to do with 2011. the italian banks are much stronger, have a much stronger balance sheet and liquidity. it is important to go back to fundamentals and look at the situation as it is, and not feel the markets. >> that was an exclusive -- fear the markets. exclusives an interview with the ceo of unicredit. and the meeting between north

korea and the united states is back on. we will have more on that next. this is bloomberg. ♪

>> what you miss? hopefully the summit between north korea and the united states, trump has confirmed that he has sent his right hand man to north korea to talk. -- north korea is sending his right hand man to u.s. to talk. bill, from washington, great to have you with us. is this following a normal direction in the lead up to this momentous meeting if it does go ahead on june 12? >> we are only 14 days out from

june 12. normally, we would have a lot better sense of what the deliverables would be from this meeting. and what both sides are really itching for. side thathe positive the representative is coming to new york to meet with mike pompeo, they will be trying to iron out the key differences over issues such as, oh d nuclear's asia and of -- of what clearization of what north korea looks like. the think after we were at end of last week wondering if this was going to happen at all, this is a positive sign the summit will go forward. >> what do we make of the fact that it is pompeo who has an intelligence background and show who has an intelligence background to our meeting here cho with an- and

intelligence background meeting here. typically it would be something that the state department or the national andrity council would do organize. mike pompeo is the secretary of state, but he is largely bringing this artfully a with him from the cia. he was the director at the cia when he had that first trip into north korea where a lot of the initial planning for this meeting was taken place -- taking place. later, he flew back to pyongyang to get those american detainees back. that has the ball rolling on the summit which was suddenly thrown into disarray at the end of last week, but seems to be back on. >> the president praised the moderate response from the north koreans after he suggested the

meeting was no longer on, as far as the nuclear reservation -- d enuclearization, they are completely different fields in terms of communications and desired. -- desires. as i got in their own in terms of tension and the step back of ?ension once again >> it is hard to say if the gap has narrowed back. the president signaled that he understands total denuclearization wouldn't necessarily all happen in one big step. at the end of last week, he said there could be a phased-in approach, ideally, quickly phased-in approach. distinction, that negotiators have a lot of room to work with in terms of how you defined, how quickly north korea starts to give up its weapons. believe that north

korea will never give up all of its weaponry. in fact, it is their whole weapons program that got them the attention of the united states and got them to the summit altogether. there was something that the president we did that one of his aides never said something even though it was set on background. the speed with which they have to hurry to prep for this, if it is still going on, how difficult is it now to organize something like this if so many are worried about whether it is happening? bill: it is a difficulty. the logistics of posting this thing alone are huge. they're talking about thousands of journalists, potentially converting -- converging on singapore. the biggest issue is, how do both sides go in and look like afterwards that they got something out of it that they wanted. i'll trump does not want to fly all the way to singapore and

either get stood up or have no agreement to point to when he is done. kim jong-un has a constituency to bel and does not want able to walk out of the meeting without saying, i got something on these engines or got something on american troops -- , or i gotons something on the american troops. they want something to show to their people when it it's all said and done. >> bill faries, thank you very much. -- those ino the the administration are already used to strangling -- straggling. joe: this is bloomberg. ♪

>> the fed releases the beige book at 2 p.m. eastern tomorrow. joe: and we look at economic data, adp employment comes out in may. >> and don't miss wilbur ross speaking at the oecd forum in paris. >> that is all for "what'd you miss?" bloomberg technology is up next. joe: have a great evening. this is bloomberg. ♪ his is bloomberg. ♪

>> emily chang in san francisco in this is "bloomberg technology." coming up in the next hour as the midterm elections near, cyber threats are at an all-time high. how are countries battling it out in cyberspace? rollout ande's rollout and why google mightav