anna: good morning from bloomberg's european headquarters in the city of london. manus: these are the days top stories. asia trading mixed. oil rebounds to $55 a barrel -- $65 a barrel. and we are live in the middle east one year from the qatar blockade. airways ceo's is the

campaign is failed. -- has failed. good morning, everybody. this is "bloomberg daybreak: europe." --find manus cranny in xeric in zurich austria. trying to find our footing is the best way to sum up the asian trading day. willing to put concerns around trade to one side. will it last? we saw the s&p touching its highest level since march. the australian dollar, you see at the bottom of the screen, did not move all that much.

nymex is a little stronger this morning. the trends over the last couple of weeks have been downward. we look aheado the ec meeting a bit later on this month. s&p futures not giving us a huge amount of direction. talk about just how much president trump will stick to his rhetoric and policies around trade if we see stocks moving lower. at thenot the story moment. the market is incredibly resilient to the trade story. mall be speaking to our guest from xeric, austria. rich.om zu that's at 9:00 london time. we've been on the road

because we've had a couple of conversations. we have set down and have the conversation with this gentleman , he is the man, he is the advisor to the royalourt for mohammad bin salman and is the chairman of the sports authority in the kingdom and that's critically important because we are going to the world cup. but if you have to say about women in sports? the numbers are interesting of the sentiment is there. of course we talk about qatar. stories aplenty. you will be sharing thoughts and asking a few questions. we look for a disparate range of incredibly interesting

subjects. from the banking sector to global sports. let's get a first world news update for you. the u.s. campaign to economically isolate north korea will continue even as preparations advance for president donald trump summit with kim jong-un. the white house has said at times that trumps first meeting kim be with can catch with at 9:00 a.m.. sarah huckabee sanders has said there has been no change in the maximum pressure campaign on the north korean regime. -- u.s. senate majority whip says nafta has missed a key deadline and congress one of time to approve a deal this year. legislators would need notice of

a deal by may 17 if they would vote before the current congress sends. there may be a couple weeks of wriggle -- wiggle room. to sadiq khan phase maiden speech to parliament is today and will be the first of a test of his ability to navigate between the contrasting demands of the leaders i got him appointed. is at 2:00 p.m. local time. the lower house will give its own to approve a later. iran has room to cooperate further with inspectors who have conducted a record number of snap meetings this year. that's according to the director general. time, the country's supreme leader has told officials to start boosting the nuclear program while remaining in the frame of the agreement.

the number of people killed by guatemala's most violent volcanic corruption and more the century has risen to 69 and is expected to go higher. with barely any warning, leaving local residents no time to escape. registered aas number of minor eruptions over recent years. experts report its activity is decreasing. 24 hours a day on air and at tictoc on twitter. powered in more than 120 countries. you can find more stories at top . in asia it'xed bag. hong kong and china looking ok. australian market has been weighed down by a fall. we've seen a good pickup in new zealand stocks today.

a little bit of a catch-up to the rally. up by about 1.4%. toshiba is in focus. its pc andng 80% of lifestyle business to sharp. a very interesting story coming throughout china. they are pushing green energy by the government has cut subsidies to a lot of the solar producers. in indonesia we have seen a rally in telecom stocks. to industry is expected record continuous growth. one of the best performers. as you started, it dropped on the terminal.

sharp will raise ¥200 billion. it dropped as much as 8% when this news if the wire. share cell. public ¥200 billion. a capital rsing tha has caught the market. offering shares to the public and they will use the proceeds to purchase preferred shares that the banks hold. that's one of the big headlines coming out of asia. let's talk about the rest of the markets. the s&p 500 reached a 12 week i've. the focus is on growth. that's over trade wars. resilience in the world's largest economy eclipsing the concerns of trade and political risk. stocks in asia are struggling

for traction. ourlivlife -- and i had a beautiful phrase of the start of the show. is that sincecy would prevail in trade we should focus on growth. a pretty resilient focus -- performance your seen across markets. it's kind of exceptional with how much event risk is coming up. it looks as though the usa will be a little bit isolated from their friends on the g7 who are not happy with the direction the united states is taking. there will be some effects on markets but the world growth is pretty decent. initial forecast is still very good and that's what you are seeing reflected markets.

hair --ce for negative negative headlines are the next is pretty good. it's a slightly nervous situation buts good that people for now are focusing on. growth. on pure growth. anna: you like this idea? the thought that perhaps if trump sees markets dropping on his trade policy, he steps away from it? he likes to talk about when he sees confirmation of his policy choices in the market. mark: he likes to te credi he has backed off when using the s&p 500 dropped. the fact that the s&p is going up as maybe not so good because maybe he thinks -- the g7 is a big situation for him.

he's going to feel a bit of heat. maybe he will realize it's not going down to well. manus: that will be fascinating to see the body language is content merkel. -- is conti and merkel. mark: you can see the stance germany took with greece. they let a playoff out for some time before they gave them any help. it can be the same with italy. germany may let the situation to two along the way first before they actually do anything to solve it. i think it science really need to understand that merkel is not somebody that gives in very quickly. she wants europe to stay together but she is prepared to see a fair bit of pain and financial markets before she

comes through with german money. anna: thank you very much. our mliv strategist. you can go to the blog for plenty of insights from the team. join us here on sets, brendan brown. next hour.for the brendan good morning. get your thoughts on the trade story. focusing on the global growth story. is that the way you would characterize where we are this week? the markets are far from being convinced that this is an just bluff again. there is a bigger issue behind all of this. the trump administration is concerned about current account ,mbalances, trade imbalances but the biggest world trade

imbalances europe. reports, germany, holland, switzerland, that's where the huge surplus in the world is concentrated. iectugh there negotiation on trade with europe at the moment, that is a possible problem. manu are you surprised by how brazilian markets have been? is it that we've forgotten about share buyback and we forgotten tax incentives in the united states of america? and common sense w prevail? i would agree with that view very much. all the hype about equity buybacks doesn't make any sense to any student of 101 where equity buybacks will change the

capital structure but did not change the valuation of the investment opportunity area -- opportunity. you are now at 3% interest rates are more. rates which is a very different environment from everyone with chasing and hunting for yields. we do have an increase in volatility. we know, mathematically, gets priced into options. i think these things will come home to roost. do you look on trump's commentary on trade? focusing on intellectual property, technology transfer, structural factors versus the as ait and use of tariffs way to get people to the table.

do you like sonnets, not like some other parts of it? there is the key issue inhina of tellectual property rights and technology transfers and a bunch of rules which are not followed and should have been followed in terms of the wto. there's a lot of broad support for that. when we get on to these imbalances, there's a lot of confusion. i doomback to the european point. looking at these practices --hout monetary conditions europe still running negative interest rates, japan still running negative interest rates, is a form of community -- currency mutilation. i would hope the trump administration would take on

currency manipulation instead of these tariffs on steel. -- manus: you never know he's watching. it could be defamed. -- it could be the theme. his only have planned for your coming u oil rebounds above $65 a barrel. what about future price volatility ahead of opec's meeting? will they reopened the taps? we will hear from our interview with the emirates president who says rising fuel costs are clouding the carriers outlook.

manus: this is anna: -- this is

"bloomberg daybreak: europe." oil price up for tens of -- of .4%. sector.ick with the the care very much about oil price. em. the outlook is cloudy as they face the double whammy of a rising dollar and fuel costs. little bit to show a of damage in our bottom line. the costs are rising. not as bad as it used to be. we are managing it as best we can. equally, when it went down to $30, there were issues because that affected the global economy in a number of ways.

demand for premium also fell away. when looking for equilibrium which should be about 50 to $60. we can the with that, the suppliers can limit that, and he was the economy will continue. that was tim clark speaking to haidi lun. wti futures rebounding to about $65 a barrel this morning. drops after a more than 5% in the previous three sessions. ofce volatility comes ahead this month's opec meeting. what they reopened the taps? joining us is our oil reporter.

any sign of where he will see the next leg of prices? $60? are we in the middle are we heading lower? when you look at oil prices today, it's rebounding and remaining above $65 a barrel but over the past three sessions it has dropped more than 5% to below its hundred day moving average on monday. that was the first time since september so we can say prices are still quite low. has been rising ever since saudi and russia have been signaling they may change production due to significant supply losses from venezuela. continue to see uncertainties as well as volatilities rising in the market. nna: production remained unchanged last month.

we are focusing in with what they choose to do with production cuts. what are we watching for? learned that opec kept its production changed from last month which is the lowest level in a year. the group is working really well together at the moment. now that restoring the production costs is being discussed before the key meeting , this could be the least supply that we may see from opec ever again. it really goes ahead and produces -- and boosts production. it will be interesting to see whether saudi or russia will convince other members of the meeting.the next manus: thank you very much.

let's bring in brendan ryan. it strikes me that when we read much of the copy about oil, the world seems much more carnage and about the risk of demand destruction than they were in previous bouts. brendan: i think that's true. the big issue in the background there, shale oil. also,g at the middle east the trump administration made clear several weeks ago that they are not looking very at continue saudi or opec production cutbacks. doingwhat the u.s. is now for saudi and other countries you would expect saudi to move in that direction. we've seen a little downward movement but i was in

the case of the last few months when oil prices were going higher, partly as an effective what they have been doing with production levels. i wonder what inflation impact you expect to see. this takes us back to the tariff story. aluminum very specific year. the u.s. expecting to pay more for aluminium. how do you see the inputs to brendan: i always see the commodity input story into aflation being very much subplot, not a dominant theme. in fact, if you look at previous cycles, by the time you get oil prices going up and commodity pricing, if anything, it may be lagging the cycle. you can remember that even last time in 2008.

i don't see oil and commodities as a lead factor in this inflation. anna: thank you. brendan brown. he stays with us. manus: it's going to be fascinating. i won'what bra of airplane him on but i'm hoping a variety of them. we have a conversation to have about a whole host of subjects. ins a beautiful day here zurich.in it seems that the trade war concerns are on the back burner. we are going to g7 and as our guest host this morning said, perhaps it would be better if

trumpbasted his g six about currency manipulation much more than the other issues in regards to trade. at 10:00 a.m. london time. retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. manus: -- anna: good morning,

everybody. manus cranny has a busy day. in tokyo it is 2:30 in the aftern u.s. yen is at a .1% move. marketseck in on the with nejra cehic. seeing equities struggling for direction little bit in asia after the s&p 500 closed as its highest since mid-march.

index a little bit softer in today's session and you can see a mixed picture across the region. switching the charts and having a look at what is happening in the fx space, we are seeing the dollar index pretty much unchanged in today's session. that see the chart previous to this week. we saw seven weeks of gains. it's a meeting that some people perhaps will mean a little bit of dollar weakness as we see europe start to catch up in terms of growth. reboundi european growth sending the dollar down or could consolidate in the next few weeks towards that average which is the red line. taking a look at some more technical's here, with crude oil, trading at 65. it has dropped below its hundred day moving average for the first time since september.

it had already drop below the day moving average last week. yellow line is the 200 moving average and if he went that far would be back below $60 a barrel. there are other things to keep anye on such as the futures curve which is the tightest in a fe. that also says something about what traders are thinking. toally, this does think inflation. we get this r.b.i. decision this week and what we see is 10 year government bond yields and tenure corporate yldg multiyear highs. can see the reserve park -- reserve bank of india repo rate lagging behind that. the dilemma is, hold rates or raise like some of the neighbors in asia. thank you, very much.

the italian prime minister will faces time -- his public test today. for giuseppe contrary- giuseppe conti it's his maiden speech. navigate the demands of those that placed in there and the government as a whole. brendan is still with us. brendan, i love your topline from your notes. that thetalians wanted all, no brussels and cheap funding. it is utterly impossible dream. brendan: they can having it for a while. 20% or more of the italian debt german market.he

draghi, the ecb has been a source of greaidy foe italian economy. forwarde is now going if the new government in rome goes in the direction of much bigger fiscal deficits, which require an even bigger trade -- gravy train from germany. to toleratem going that or is merkel going to be forced to cut back on that gravy train? i was reading through your notes and i found myself -- the thoughts of what you think will happen to the eurozone. you were very concerned about italy's exit from the euro or do you think this could still come

to pass. brendan: i don't think the ilstart on exit route because they have to get a thing at the moment. this is the danger at some stage of marketshe idea that germany is going to say no at some point. it could vote -- it could force some sort italian exit. italy is not greece. .t has a huge private sector it has fiscal deficit which is now only 1% of gdp. it's different from greece. you think there would be a way for italy to leave smoothly? manus: it wouldn't be smooth -- brendan: it wouldn't be smooth. there would be drama but at the end of that process there is light for italy outside the eurozone.

you said the italians could mimic the americans and what -- and wiggle around the 3% deficit target. you say they could do it in a creative way like the americans have done. i think that will be the negotiating tactic. it will have the bn assumptions about growth due to create a reforms and fiscal deficjustow the 3% of gdp even though the germans would look at it and say it's 5% or 6%. anna: thank you so much. brendan stays with us. let's get up business flash from juliette saly. thank you. the u.k. government is selling a

7.7% stake in royal bank of stock -- royal bank of scotland. the stake was worth about 2.6 billion pounds or 3.5 billion u.s. dollars. during the financial crisis, billions of pounds the bank. starbucks dipped on news that chairman howard schultz is stepping down. company from 11 outlets to more than 28 77 countries this comes as u.s. sales growth slows and in the wake of criticism -- and in the wake of criticism of the arrest of two black men and a good of you starbucks. there is speculation he may run for president. twitter and netflix are getting a leg up in the u.s. indexes. twitter will replace monsanto while netflix will replace

another company. this comes as the takeover of monsanto is due to close on thursday. stocks mayout tech get louder but goldman sachs is still bullish. most of thet industry's current success can basis bank -- explained by strong fundamentals, revenues, and earnings rather than future speculation. are notd valuations very stretched and unexpected to change anytime soon. anna: thank you very much. let's stick with technology stocks. apples developers conference saw the company make its strongest statement yet on data privacy as they announced new features to prevent addiction to iphones.

>> we now have over 20 million apple developers around the world. before.ore than ever tim cook in a celebratory mode. joining us now is bloomberg .pinions writer what are the big takeaways for you? a classic iteration on the software. we see hardware come in the autumn. there were a few small amendments but crucially, it was not the headline announcement but it does a big impact, is the ability to block on the top of any webpage the ability to share stuff on a bunch of social networks. browser, itpple's

will now have the option that , youyou visit any website can allow them to be there or not. because they send a cookie respective of whether or not you are user. it's been the real crux of the issue. i'm wondering what addiction therapy they will set up in the next 20 years for our tech addiction so to speak. how to the new features prevent addiction? to prevent. what are the features? alex: apple would say it's not

the refrigerator, it's was in the refrigerator that is addicting. what they have said is that will introduce features that will control how long you spend on any given app on any given day. this is for parents whose kids are perhaps spending all day on snapchat and other social networks. if it proves effective. these features seem long overdue. another california-based company making the headlines, something you been looking into, howard schultz the partner from starbucks, why? they are seattle-based company in washington. there were whispers see my run for president. they really thought that hillary was going to walk in the people cleared out of the

way. this time around he was see a change namely that everybody who feels they could run for prident will feel the more obligation to do so. side, theyarbucks see the increasing headwind for the smaller companies like blue bottle coffee which was acquired by nestle recently. people tend to go for the smaller nich bands -- niche rands as seattle -- as starbucks has become the donald's of coffee. manus: the competitive landscape is changing. brendan: -- alex: there are two

big players in the space. nestle and jh be. -- jhb. a small a brand is pete's coffee . there i a weakening appeal of mass-market brands across the board. if you go to a pub in the u.k., people aren't all going to be drinking fosters. there is a similar trend with coffee. challenge to starbucks to perhthey will be due something. -- will be able to do something. anna: thank you for joining us. year to thene boycotts, we'll see how qatar has dealt with the saudi led economic boycott campaign. we will see the qatar

.irways ceo, he joins a shortly this is bloomberg. ♪

manus: it's 1:47 a.m. in new . 7:47 in jurek -- in we asked his predecessor what he of theabout this ahead reserve bank of india's rate decision tomorrow. that in a world where

countries take full cognizance of international responsibility, one of the things i have been aessing for is the sense that big central bank should look of the consequences of their actions on other countries. i think emerging markets an a much better situation today. politics and policies are creating uncertainty but they are in a much better situation during the taper tantrum. but that doesn't mean accidents can't happen. powell said they are in a good position to navigate the shift in u.s. policy. with exceptions, which countries? >> there will still be stress for emerging markets and they will have to cope with the rising dollar and interest rates

as well blowback of capital flows. there will be stresses. look at which countries is always stressed, turkey undergoing some stress. the central bank has raised interest rates considerably. i think in countries looking it's a lee, depending on what the government does and w much it wants to break the fiscal constraints that the that's going it, to be a place to watch. brazil has a medium-term fiscal problem which it needs to resolve by dealing primarily with the pensions of public sector employees. is something the next president will have to opine on very quickly and that something to watch out for.

there are countries that have issues they have to deal with. as they go forward. that was the former reserve bank of indian president. brendan is still with us. india pleading with the fed to slow the pace of tapering. the fed said they are not likely seeisten unless they choices starting to hurt emerging markets. brendan: it's to some degree in when theyrst policy focus on america rather than the emerging markets. is thing i would carry on that the emerging markets have in many ways been the focal point or the epicenter of the credit inflation or credit bubble during this cycle. we know from the good work of the imf that the concentration

of over leverage corporates is very much in the emerging market. any's were the risk lies if general pullback in credit happens. hold those thoughts because we just want to talk a little bit about what are those things that has come around to an anniversary and were talking uae, saudi arabia, the egypt, and bahrain cutting their ties of qatar. -- their ties with qatar. qatar seems resilient. it has an fine without state aid. we got half the predicted loss. we will continue to grow our network in order to get into

profit 2 -- profitability. that happens, i don't think we'll need any capital injection. let's go a little deeper into the qatari economy and we have the middle east chief economist. good to speak with you this morning. you have written a lovely piece where you are talking about a year onthe economy from the boycott. how does it look? >> it looks worse. qatar has been hurt but they are still standing. they had to readjust the trade routes because they could not trade with a quartet of countries that have boycotted them. they have managed to do that additional costs. gdp growth is slowing. that started in 2014 and has continued.

qatar has deep pockets and they probably could afford it for the time being. anna: good morning to you. which of these sectors are proving resilientycott anh are struggling? doingone sector that is better unexpectedly is banks. reliant onheavily foreign funding before the political crisis started and it was a deposit flight in the immediate aftermath. injection of funds averted government has the crisis and now they are resilient. in terms of vulnerable sectors, real estate is the obvious one. we've had this -- we have had a decline in real estate prices by about 20% and house price inflation is negative and occupancy rate is quite low.

supply is running well ahead of demand. just give us ext. fund.ats are sovereign wea just how long and how big and how deep are the qatari pockets? quite deep and they can last for a long time and it's one of the reasons why the crisis is not going to end anytime soon. cansovereign wealth fund pay a bit extra for its imports. so it probably feels comfortable with the current situation. international global powers, which initially tried to broker a deal between qatar and the quartets, are comfortable because they don't feel any disruption to energy.

the current situation will likely continue for some time. anna: thank you ray much. -- thank you very much. brendan brown, last thoughts. it showed the way the qatari naged to substite imports from other countries on the basis of the situation around them. overseas and the way they have had to build up relations with turkey. brendan: one immediately thinks of turkey and their relationship . plus any potential crisis and turkey and how much qatar may have to cope with that. thanks for spending the last hour with us. brendan brown. he will be continuing his conversation with bloomberg on bloomberg radio a7:30 a.m.

u.k. time. stay tuned for that and manus, you have a busy morning. we both always have a busy morning. conversation we just had with brendan in terms of the stoicism of the markets, the opinion pieces out tre on bloomberg this morning, the trade put is you came up with. line you came up with. the trade story is a bill towards the g7 in canada athe end this month, how can we see about trading doesn't offset the market psychology and the policy story around global growth? we will talk about that this morning. manus: i think he set a whole host of things and i think i might even sneak a question about banking. it's the rage thitime.

we have a whole host of issues to cover and you can catch my conversation with the minister of sport in saudi arabia tomorrow morning. see letter. ♪

anna: good morning from bloomberg's european headquarters in the city of london. imf anna edwards. this is "bloomberg daybreak europe." ngclosing the highest level since march. from $55 abounds barrel and ahead of a key opec meeting to discuss production curves. one year from the qatar blockade. telling bloomberg the campaign has failed.

good morning, everybody. it has gone 7:00 a.m. in london. manus is on his way to conduct an important interview. i will be holding the ford. le to yoabout what is going on in futures. we are not expecting a great deal of fireworks. pretty flat which is a really for anyone who is active in the markets. futures up.and cac this is reflecting what we see in the risk radar in the asian equity session where markets struggling to find their footing. couplers over the last of days focusing on the global growth story, the u.s. growth story instead of being run into the details around the trade story. perhaps they are waiting until yunnan trade.g7 , oil prices up by

1%. we see some movement in the price of crude dropping below $65 a barrel. we are around that level. the move upward different from what we saw where the conversation has been around when the opec and french on their curves and production -- curbs in production. we have some downward prices. s&p future looking pretty flat this morning. -- there is the g7 in quebec. steady on the dollar and we will see what we have in the bond markets. , thetalianast week bond markets. we have futures for you. we could see some upside. u.s. bond futures a little bit of upside. 2.9 percent is where we trade,

around the 2.9% mark. manus is speaking to the [indiscernible] atlanta clock a.m. in london. lots to talk about in terms of tanking. perhaps that will be on the agenda. also the trade conversation. let's get the bloomberg first word news update with juliette saly. juliette: the u.s. campaign to economically isolate north korea will continue even as prarationsdvance for president donald trump's summit next week. the wet -- white house has said a time, 9:00 a.m. singapore time although the venue has not been revealed. the pressarah huckabee sanders said there is no change in what trump described as a maximum pressure

campaign on the north korean regime. u.s. senate majority whip john haver says the talks missedey deadline and congress will not have time to approve a new deal this year. house speaker paul ryan said legislators would need notice of a deal by may 17 if they were to vote before the current congress ends. ryan said there might be a couple of weeks of legal room. placing the deadline around early june. ano coopete further with inspectors who conducted a visitsnumber of according to the international atomic energy agency's director. at the same time, the country's supreme leader has told ofals to start work on boosting the country's nuclear program while remaining within the framework of the 2015 international agreement. the uk's opposition labor party leader is set to appraise --

accuse theresa may of failing to send up to the u.s. on tariffs on steel and aluminum. will saych today, he the duties imposed by president trump are wrong and "risk hurting workers in the indebted states and around the world." he will accuse me of appeasing donald trump in the hope of getting a race to the bottom trade go with the u.s. cutter -- qatar makes airlineyr, its remains upbeat. thsas e back to normal. the campaign as -- has failed and his airline does not get -- need government help, he said. successfulbeen very that weg the estimate

predicted we would face. we will continue to grow our net worth in order to get into profitability. as this happens, i do not think we will need in the capital injection. juliette: global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . we are starting to see things turn around a little in late trade. the nikkei closing higher by .31%. some good buying coming through from chinese and hong kong stocks, and uptick in a lot of em's. having a look at the companies we all watching in detail, sharp came through saying it plans to billion00 billion, $1.8

and a new share sale. sharp is going to buy part of toshiba's pc business and its licensed brand. having a look at some of the south korean gaming companies, they are doing well because we heard reports that north korea asked donald trump to consider having ties to terrorism when they meet next week. there is a lot of speculation soutan businses would benefit from that. down under, markets choice most since%, the 2008. a deming media report out there saying that franchisees are being heard by the system model, a lot of theng bankruptcy. thank you. juliette saly in singapore. thank you for the update on the markets. rbs giving us information, may have done so at 271 pence a share.

that was exactly as expected. -- this hasfering rates forhe u. vernment of theernment owns 62.4% bank it bailed out during the height of the financial crisis. president donald trump plans to meet witsenate republicans concerned about restrictions. he is weighing on chinese investments in the u.s. some members are objecting to the executive authority trump wants to use for trading -- punishing trading partners. good morning. what does this meeting call for, what is it expected to focus on, unhappiness about the way president trump tried to enact his trade priorities? that is right. senator john cornyn, senior

republican in the sent -- senate takeike crapo are going to the lead on telling the administration that they do not see a need for unilateralur on trade. they do not think this is the way to go about it. congress has legislation that could be enacted. there are concerns about an overreach. this is not the kind of thing the president and the administration should be doing on their own, they should be consulting congress more on trade matters. there is a fair amount of concern about that. and with the recent actions against the eu, canada, and mexico on the aluminum steel tariffs, there is going concern on capitol hill about the way these tariffs are being imposed. anna: the concern within his own party about how tariffs are being used, there is concern within the political

establishment. to whereking our way g7 meeting. what is the latest? been a uniteds front. and condemnation of the tariffs, particularly the tariffs that were imposed that had been a reprieve for canada, mexico, and the eu and they were imposed on them as well as china. there is a great deal of concern among g7 countries as well as on capitol hill about the possibility of the $150 billion in tariffs that could be imposed on chinese goods and possible retaliation from china. you, jodi schneider, bloomberg's senior editor joining us with the latest on the trade story. joining us, janet henry. good to see you this morning. i talked to a lot of people who say we have to get this in

perspective. aboutewey start panicking trade? janet: we do not panic. we cannot analyze it in detail. australia is empt from the tariffs. one large us trillion minor is responsible for half of the aluminum exports from canada. even if we think we can assess this and say this country is exposed, this country is exempt, this one has a deficit, it is all on the implications of supply chains we cannot analyze. we have the steel and aluminum tariffs, we have the china trade actions, they are coming through at different timings. the only thing we can say is onre will be effects investment spending. we see financial market implications. all we can say at the moment is it is going to be negative. we do not know how negative.

slightly away from your wheelhouse. there is market reaction to the trade conversation and people aking this morning, is there trade? why markets have been so resilient in the face of this trade talk and the trade policies from the u.s., suggesting if the markets start to selloff, president trump may change his tune. do you assume tispening salvos on trailed -- trade and we look at something different from the rhetoric we hear from the house? janet: we really do . we hav the g7 meeting at the weekend. if the meeting of finance correct, we may get implementation. trade wars are a zero sum game. there are short term that could

be relative winners or losers. there will be financial market implications which could be more damaging for the economy than any small impact on reducing the amount of trade imports. anna: what are the inflationary impacts of trade tariffs or what do we fear, is it about the symbolism rather than what it does to the importing costs of aluminum and the u.s. janet: they should benefit from stronger volumes to my from stop -- some stronger prices. others companies will be paying more for the steel and aluminum. we have the option passing it on to their consumers or do they take it on their profit? are still seems to be a genuine lack of pricing power globally. we are starting when profits are strong, profit sharing gdp is

strong. we may see the applications on profit on some of the steel and aluminum and other sectors that consume some of these imports. it could be a financial market channel that you see rather than the hit to world trade growth in a massive way. anna: thank you for a much. -- very much. a quick return to the rbs story that we were dealing with. confirmation that the u.k. government sold a 7.7% stake in rbs. philip hammond giving a statement from the treasury saying that the proceeds will go to reducing debt. they have 2.5 billion pounds for the u.k. taxpayer. the government should not be in the business of owning banks, they said. and was never the intention to hold onto to that stake. coming up, we will bring you

special coverage from the bloomberg investment summit in new york. lots ahead in that conversation. perhaps trade will be a big talking point there as well. this is bloomberg. ♪

anna: tuesday morning, 7:18 a.m. juliette saly has the bloomberg business flash. juliette: the u.k. government said it sold a 7% stake in royal bank of scotland reducing its holding a decade after the financial crisis. 2.5sale raised about billion pounds which will be used to pay down national debt. crisis,he financial britain injected more than 45 billion pounds into rbs within the biggest banking bailout in the world. dips on news that the

ceo is stepping down. he took the country does company to over 200,000. he will take the title of chairman emeritus them a there is some speculation that he may run for president. are gettingnetflix a leg up in the s&p indexes, twitter will replace monsanto in the s&p 500 well next -- netflix will replace the company and the s&p 100. is calling out facebook over its data collection in software uatat this year. the safari web browser will show up pop up window. before loading social networks.

the buttons make it easy to share with content but let social networks collect user data, something they have been cracking down on. >> we believe thatr private data should remain private. not because you have done something wrong or you have something to hide. but because there could be a lot of sensitive data on your devices and we think you should be in control of who sees it. juli that is your bloomberg business flash. anna: thank you. juliette saly in singapore. the brussels economic forum is taking place with jean claude juncker. get furtherif we headlines breaking and tesla holds its annual shareholder meeting with you on ms. -- with elon musk under pressure.

cash earned story go? be wrought to you at nighthawk a.m. london time. let's get back to janet henry. let's talk about what is going on in the u.k. if we could first and pivot to other parts of europe. if we talk about the u.k. and where we are on the bank of england's trajectory, hsbc, are you an outlier in europe expectations about where the bank of england goes, you do not expect a rate hike this year or next year. janet: are economists were very would the bank of england deliver a rate rise. it became clear that the bank was not going to deliver. whereas a lot of forecasts were for august, are economists took

the view that was i window for a rate rise. currency fromble here, inflation should be coming down quickly. we are coming off that week q1 figure. the jury on much of that waher-related. and over the next few months, we will get revisions the same as blue book from past data, probably not the q1 figure. butave no rate rise at all if the labor market transforms as we get upside surprises, we could be wrong. anna: have the rate hikes been justified by the data or are they about taking the bank of england to a place or they can cut again should they need to? not think that is an appropriate strategy. global. economy, the economy since the middle of 2016 and we have the vote, the global

economy has been stronger than expected. last year the u.k. was weaker but was better than had been expected, helped by the export story. the first rate rise justified. the need to tighten policy further when we saw construction data yesterday was softer, we saw signs of the housing markets going down, the only reason they would want to tighten at this stage would be if the labor market continues to tighten by more than ed and they see it in wage data. for a few months, you saw it but it has been a bit of a loss of momentum. anna: it does seem possible we could get to a climax in brexit negotiations in june or later in the year. toward therking staging post. away from the politics, what will you be watching for in the data? , it takes a long

time to get that kind of data. what will you be looking at for the insights? is looking less likely because europe has a busy june st rey. they will be discussing greece, italy, european integration, and a discussion regarding brexit negotiations. that does get pushed a little bit later. we will be looking for all the survey data, that tends to be investment spending, what are we seeing in terms of high-profile or whether we see further job shifts and also migration flows are to be seen as a slowdown in the number of migrants coming in from elsewhere, that has implications but if i had to pick one single rease, it would be the average earnings release is the one we woput the most aention on. anna: for the wages. that will be where the focus is.

that is good to know. in terms of the agenda, a lot of with a lot of issues, where does the italian reform agenda set in the context of what we have seen and italy, what are you looking for for commitment to banking unions, putting in place the infrastructure we are seeing. how does that stand up to what we see in italy politically? janet: in terms of progress, it is still quite fragile. we had some comments over the angela merkel, the german chancellor, and she gave her initial take on some of the announcements that had been proposed by mr. macron. certainly it seems like she is willing to push towards a bigger investment budget. we will see further steps in the movement of some kind of european monetary fund. that is -- as regards fiscal

integration, that is still much further down the road. anything that commits to further fiscal integration brings up the discussion of the possibility of having some kind of orderly restructuring mechanism which opens up a new can of forms. anna: hard to predict the twists and turns of italian politics. in terms of the italian story, are we passed the peak of the markets focused on it or do we continue to focus on the battle berlin?what rome and janet: the avoidance of more new early elections have come to the market. there was concern about going to early elections. program ishow much the government going to put in then do they limit their ambition or do they try to commit it all. anna: thank you so much, janet

henry at hsbc. that is it for bloomberg markets. the european open is next. ♪

guy: welcome to bloomberg markets, this is the european open. we are live from our bloomberg headquarters ongside matt miller in berlin. matt: asian stocks struggling for traction but the s&p 500 closed at its strongest level since mid-march. the cash trade is less than 30 minutes away. guy: the s&p closes at its highest level