♪ anna: good morning from bloomberg's european headquarters in the city of london, i anna edwards. am manus: i am manus cranny. this is "bloomberg daybreak: europe." here are today's top stories. anna: renewed tensions to trade as china offer to purchase $25 billion more worth of goods. the mexican peso getting crushed on nafta. bloomberg exclusively reports about the ecb's june meeting could reveal when the ecb intends to end bond buying. and, more exclusive conversations. we bring you manus's interview with a close confidant to saudi

prince mohammad bin salman, and what he wants to see more women in the arena. ♪ anna: a very good morning, everybody. this is "bloomberg daybreak: europe." it is just about 6:00 here in london, and 9:00 in dubai where manus is. the stocks are managing to main some momentum as we go into the afternoon session. msci asia-pacific. we see a little bit of a rebound in the australian currency. wci in here, above $65, securely. 65.81, up .4%.

out of the united states, that seems to be where the m focusing, despite news reported yesterday by bloomberg, that the u.s. has been lobbying u opec and friends, to increase output in thesee some gains euro, or at least an unwinding of losses in the euro yesterday ecb. reporting from the it is live next week in terms of a conversation, pivotal conversations that will go on in the meeting. could we find out about where quantitative easing or on a buying comes to an end? mewhi, there is breaking news coming through. the maysn central bank governor mohammed ibrahim, has resigned. manus, you are talking about trade a lot this morning? manus: we are, indeed. looking at the ringgit, we are seeing it strengthen. we think the indians are asking -- justch to live down

slow down, and we are seeing a host of other dco the emerging markets. latin american currencies are at a 25 year low. j.p. morgan latin american currency index is absolutely under pressure. we continue to look at some of the flax in america. trade wars are live and they are actually happening. this is what we have. nafta according to larry kudlow is seriously considering breaking up joined talks with canada and mexico. this is what we've got, the relationship between theted states and mexico and its neighbor in canada. they have a trade surplus with canada. they have trade deficits with mexico. the mexican peso took a ttering st night. you can see it at the bottom of your screen. it hit the lowest level in more than a year. credit default swaps are at the highest level since 2013.

mexico say that they will put 25% more, tariffs on such whiskey.e tennesse there is definitely a dislocation in the fx markets as a result of the swipe and contra swipe on trade. that is of course. , going to push a lot of the e.m. central banks to react. you have futures, go to nasdaq. second day on record for the nasdaq are seeing the trades in technology stocks. up again, .3% for nasdaq. that is certainly what features suggest. it is fascinating to see how this concept from the trump administration around divide and to fix on nafta, trying the trading relationships. we will talk about defense spending more of a little bit longer. for men nato secretary-general, will be joining us at 7:30 a.m. in united kingdom time. and we will haore from your

exclusive interview, manus, with a key saudi arabian voice. manus: yes, this is the man that i set down with in zurich yesterday, in a beautiful location. he is the manager of saudi's, -- he is an advisor to mohammad bin salman. we will talk women, privatization and maybe even a little bit of qatar. let us go to juliette saly, with the first word news. >> manus, thank you. the u.s. would like north korea to commit to a timetable on denuclearization before he meets with the president next week. u.s. officials say the president has been advised not to offer him any concessions. said thatals also trump is determined to walk out of the meeting if it does not go well. alternatively, he is working with the idea of offering kim

jong-un a visit to the mar-a-lago resort if they hit it off. lawmakers anticipate holding a pivol uson at their meeting next week, which could conclude on a public announcement on wedding intended to seize -- when they intend to seize asset purchases. mario draghi's governing council is likely to use the gathering as an opportunity to debate winding down bond buying. that is currently intended to run until september. and ecb spokesman declined to comment. italy's new prime minister has alleged in his maiden's reach, a new wind of change based on a program of fiscal expansion. that means breaching european union budget rules he also used his. peach to reassure investors that the administration has no plans to leave the euro. >> leaving the euro was never up for discussion. it is not up for discussion.

this is not an issue that is part of the government's contract. this is not an objective we are trying to follow. >> the u.s. and china are continuing to haggle over the strength of a deal to fend off an impending trade war. bloomberg learned that ahead of the mid june deadline for imposing tariffs on chinese imports, beijing has offered to boost purchases of u.s. goods by year.$25 billion this meanwhile, washington is finalizing a deal for zte to allow them to renew purchases from american suppliers. global news, 24 hours a day on air and at tictoc them on twitter. powered by more than 2700 journalists in over 120 countries. you can find more stories on the bloomberg at top . checking in on the markets in asia, it is pretty positive. i am trying to see if there has been any reaction in malaysia to the previous breaking news we just had.

markets are pretty flat in china, and we are seeing good days in japan today. australia's market is doing a lot of the heavy lifting. gdp was better than expected, given a boost to the aussie dollar. there is also a rally coming through in all of commodities, copper in shanghai as well. let us look at some of the stocks you are watching in the region. it is really the energy and mining producers l the rally. petroleum is on the the biggest in terms of maca cap in the region, up 3% in sydney. talking about the story, perhaps there will be some business done with zte and the u.s. again. both involvedre in that space and they are rising sharply in hong kong aced on the newsp in malaysia, this pay-tv operator is up by .4%, soaring when we see that the billionaire owner is said to be considering taking operation private. manus: juliette, thank you very much.

not to the ecb and the policymakers, said to anticipate holding a pivotal discussion on ending quantitative easing next week. bloomberg has d thathe 14th of ne, the governing council meeting will include with a public announcement on when the central bank intends to seize net asset purchases. the bond buying program istende. we have our team on the ground in london. mark cranfield is with us. mark, this is a scoop for bloomberg. tell me this. does the italian factor change the ecb, or do you think they will see it out, from tonight come and get on with the rhetoric of change? mark: for some of the members of the ecb, particularly for some of the more dovish ones, isis that but what will have an is that the beginning of tapering

will be in september -- i said that that what will happen is that he will begin tapering in september. they will probably like the option to restart purchases back at the $30 billion a month level that they currently have. rather than saying that tapering begins in september, we have a hard finish say in generate the following year, we have the option to go back and restart should the market uncertainty increase, because of what is happening with italy's fiscal situation. that is probably what they would like, and that could be the surprise in any announcement that comes out. anna: so that is what we look for them, the possibility of a middle course, a third way. so we should not necessarily just be looking for an end of qe, that it could just be more complex? >> that could be a new twist that we haven't thought about. or something completely out of the loop. to think that this is going to be a plain, vanilla type of ending? i think. manus: is not right picking up

on that, if it is not a plain, vanilla, mario draghi -- we have feasted off his put in many ways. so really, it could be from the put to the scuttle? >>r.raghi is still a run for a long time, he doesn't run out until later next year. he would like to see this go as smoothly as possible. inly has thrown a wrench something which he probably was not prepared for. he has eight dovish nature as well. i think if there was any be -- if there will be any surprise , they would be a twist that would give him more flexibility to maintain some sort of aggressive qe, even though he looks like some tapering has already began. anna: thank you very much, mark cranfield. you can follow live market insights from mark and the rest of the team. juttinert in

london, micro strategist at j.p. morgan asset management. good morning, mike. the ecb story,th and how it in the intersects with it. what are your expectations? they meetthat next week's, but in terms of informing us about the timing of qe? >> our best case is that we are still going to see qe come to an end by the end of this year. i think the discussion around it looks into it, as -- it increases the risk mother that you getting -- it increases the risk that you get a short tapering. you see qe continuing at 30 billion or month to the end of the year, without a specific and announced. the potential for them to extend it a bit beyond the end of the year, if they need to. but i think that would be relatively key not to support italy too much.

donefore, i think if it is lightly, extended beyond the end of the year -- it is ok for german bunds, to go for the end of the year. but by the time you get to second quarter of next year, they start to run up the viscosity issues on german bunds . that. just clarify you don't think they will backstop italy too much? they are probably reasonably well in to see a little bit of pressure on italian bonds, in order to try , essentially to force that italian government to realize that they cannot just do whatever they want. anna: so, is this going to be a big test, or whatever it takes?

if you look at the language that ecb chooses to use here, is that the case? >> i think the key thing really is that at the moment, it in the still wants to stay in the euro. change.t likely to therefore, yes, you might see a bit of thishteng in italian government wants, but it is unlikely to cause a systemic crisis. ahead to the next recession in the euro zone, probably as one of the global recession, then you start to perhaps get into the world where there are some concerns about essentially a restart of the sovereign debt crisis. in many ways, that is a situation for the rest of are.is much that because you have oh mt in place, much better current account situations than you did during the sovereign debt crisis in 2011 and 2012 -- omt. on the other hand, italy has a

government that is perhaps more confrontational than it was previously. seemsomt package less supportive for them that did before. at so to ask yourself whether our yesterday, he suggested that only have to do is fun to the growth numbers just like the s do.can and then you spend your way out of thisr for a much most of europe has done that, which is fudge, french, french, note? >> i think they have some room for fiscal easing. -- which is fudge, no? mike's: i think there is some room for fiscal easing. but the extent that the full ckage would add up to, is too much. 7% fiscalt be doing a expansion, that would cause

ld probay hing two percent to 3% expansion. bond yields would rise, but without causing major problems. anna: especially when you take into account the inflation back to job. just in the last few days, the inflation story -- inflation in germany and spain, on this chart, we are at 1.9% inflation in the eurozone right the ecbdso focus on the data and stale and from the politics, they have it right there, don't ty? >> yes, but i think it is also important to focus in on quarter. there has been a pickup in core inflation, but there might be some distortion going on there. our best case is that core inflation remained relivymud. goes on the high end, the ecb might be looking to slightly extend qe. probably, qe still comes to an end by the end of this year.

but with eurozone core inflation unlikely to pick up, and assumes that you will not get rate rises until the second half of next mike, let us is market that for you, we will put it in the diary and bring you back this time next year and see where we are. coming up on the show, we will and you my exclusive interview the saudixt guest, royal court advisor and chairman of the society general sports authority. -- the saudi general sports authority. hike or no hikes? dision is due today. we discussed the emerging markets. this is bloomberg. ♪

♪ anna: this is "bloomberg daybreak: europe." it is 6:20 here in london, 1:20 or.ingle

stocks are a bit high on the asia-pacific index, -- the ms ei asia-pacific, 1% higher. let as get the bloomberg flash from singapore, here is juliette sally? >> to new heads for asian operations here in single or and for hong kong to simplify its network and reduce cost. the bank has drawn up. plans to consolidate as many as 10 south east and south asian countries, potentially including indonesia and india. standard chartered said "we continually look at ways to optimize the

liquidity structures." international paper has ended its pursuit of cover after the irish packaging manufacturer ripped up two takeover offices and refused to engage in talks. the company confirmed it will not make a formal bid today, confirming an earlier report from bloomberg news. the earlier proposals were rejected as being too low. thisatest episode of show with francine lacqua airs tonight. they discuss the future of green energy and the company's debt on electric vehicles. >> today, we are at the beginn this huge curve. in the next year, we will all laugh and how stupid we were think about the growth of elected nichols but when you think about the billions of dollars being thrown into investing in electric vehicles, i have no doubt that it will become a huge business. and of course, the word, electric. it is a question. , or the electric world will prevail. when you think of electric car, which of the two words is important? >> you can watch the interview

in full at 9:30 p.m. tonight in new york, and 730 a.m. in london tomorrow. that is your bloomberg business flh. manus: juliette, thank you very much. saudi arabia issued levy licenses to women for the first time in decades, as the country undergoes a modernization drive. -- issued driving licenses to women. crown prince mohammad bin salman has been on the forefront of these changes, but human rights groups continue to argue that slow.ss is we have the chairman of the saudi general sports authority, and he spoke to me about the country's attitude toward women in sports, and what kind of advice he took from the prince on this subject. >> as time permits. yes, i talk about the sports angle a lot and i take guidance from him. he is my school. >> do you give him guidance. turki: i tell you, he is my

school. every time i learned from him, a lot. every day. manus: let us talk about women in sports. you have opened gymnasiums, done many good thingso bring women into sports. controversy. been you closer jim, you asked the instructor to leave the country, because of some of the imagery used in oming the gym. what is the red line for you, your excellency, in sports and sports. his word turki: as it relates to women, they were permitted to enter three stadiums. in the coming season, they will enter all the stadiums in the kingdom. all the eventsthe kingdom carries out now allow women to enter. we are approaching women driving. women have gotten a lot of their rights in this period and in this era.

we just don't want to give any excuse to those who want to take us backward and delay us in the issue. we are protecting our customs, traditions and religion, before everything. manus: tradition and norms, absolutely. but global investors have told us, what you do with women driving, in sports, i incredibly important and powerful. how soon is your ambition to have women in all venues of their choice. turki: less space for freedom and the capabilityf men is very large and our society now. on the contrary, i see her as an important part -- in porton partner for the men in our society. what are women lacking now in the kingdom of saudi arabia? anna: that was manus speaking in hi exclusive interview with the chairman of the saudi general authority.

i thought it was fascinating that whether the investment community is increasingly linking the treatment of women in saudi society, and the entire investment case for saudi arabia. manus: i think it is something mind, a lot ofr investors. they go out from riyadh and dubai, on those big campaign trail, with his royal highness, mohammad bin sman. s, it is incredibly important. that is another big manifestations of the of side world about what is really happening on the ground. they want to privatize clubs. they want to privatize raise money, over $1 billion from providence nation. so change is afoot -- from privatization, so change is afoot. anna: there are big conversations to be had around morning.s the haggling continues between the united states and china as of a try to head off a trade war between the worlds two largest

economies. also, we see the canadian dollar rising and the mexican peso falling, on talks that perhaps that president trump does not want toulout of nafta, but have onen-one conversations. sounds complex we will talthtr.o ♪ retail.

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tokyo. a little bit of movement on dollar-yen. world bank may be downgrading their view in terms of growth, but for the moment the markets seem remarkably stoic in the face of the reality of trade wars and tariffs. it is a good point you made. we are seeing gains in asian equities overall. it looks like a bit of a mixed picture if you look at the region.

they seem to be shrugging off some of these risks around trade and geopolitical tensions. let's have a look at some of the reactions on fx. the greenback gaining against most of its majors peers. aussie's above the trendline. the yellow line is the 765 level. you have ml i colleagues on the blog saying that that is the level we have seen the aussie dollar move around it. we have broken above that today. he says, you have to see a push toward 77 to shake the bears off. that is something to keep an eye on. we are seeing a little bit of yen weakness. that tells you something about risk appetite as well. moving on to nafta. to mexican peso declining its weakest level since february 2017. it is retracing some of those

losses today. it is holding near that weekend level. we are hng that nafta couldcrpe we could see president trump try to negotiate bilateral separate deals with mexico and canada. the canadian dollar is gaining against the greenback on reports that canada could see itself exempted from some tariffs. a lot of moving parts here. we are seeing the reaction in a current -- the currency markets. we are seeing the msci emerging we saw thater selloff, this graph is where we are. this is normally seen as a bear signal. this has happened for the first time in quite a while, when we saw this happen at the start of you saw the, emerging markets index go on to gain. even the lid is a bear signal

does not mean that we see losses every time. let's return to the things that we mentioned around trade there. china has offered to bump purchases of american goods by $25 million a year. the gornment has showed willingness to pick up purchases of crude, oil, and farm products. the u.s. is making a deal with the coming to let it by from its american suppliers. lots going on in the trade space. we have wilbur ross doing these deals in china, as though stories would indicate. we have a nafta headlines. the president has said before that he wants to divide and conquer, i suppose. he wants to treat companies

individually entree. -- entree. how much does it worry you that we are talking about having individual conversations with mexico and canada? is likely tok it roll on and on. that has always been trump's view, that he wants to negotiate one-on-one with individual countries. i think that it is less relevant than the fact that you are seeing this pickup, rick celebration in u.s. growth. that will feed across into economies like mexico,anada. re-acceleration, that is a positive and why markets are reacting well to some of the headlines you are seeing trade. anna: i saw the us trillion gdp numbers. the trade figure picked up there. manus: they were quite stoic, workday? -- weren't they?

the dollar.er you have the plaza recorded at the top of the peak, drudge of you bush and his tariffs, is the dollar the biggest -- george w. bush and his tariffs. eu,ave tariffs now on the on china, and on canada. we are live. i think that from here, certainly over the medium-term, the dollar is biased lower. the is potential that maybe this trade could support the dollar in the short term. over the medium-term, if you look at that chart, the view is that the dollar should glor. you still have this significant trade deficit for the u.s.. the best way for them to close that is not via these trade war measures but via a weaker dollar.

that is where we are headed. anna: let's pause this conversation for a moment. let's bring on another voice against the lesson us in on some of these details. ginny snyder with us to cover some of the details. what are the details on the trade offers between china and the united states? reporter: it looks like china is offering to purchase up to 25 goods, dollars in u.s. which is part of the negotiations where they have said they would work to lower the trade deficit with the u.s.. this would largely be in the energy and agricultural space. details are still being worked out. bte, president has said that he te to allow the te -- x make agreements with u.s. suppliers. this is a reversal from a few -- in april when he said that it would not be able to do business

in the u.s.. it is a controversial statement and reversal because there are many in congress, including members of his own party, that are not happy with that outcome. u-turns are wonderful things. we have seen that. and i started the show looking at the two flanks of america, mexico and canada. now we are back to bilateral list them in ter of nafta. are we close to tom ripping up the negotiations? trump hasreporter: seemed close to ripping up the negotiations since they started again with both countries. he has not been a fan of nafta on the campaign trail. even as president he has said, we will negotiate but it have to be in the u.s. interest. he has been back and forth. kudlowoks like

statements, that they y want to go in the direction of negotiating individually with them. congress will not pass anything this year in any case. we will watch that with interest. bloomberg's senior international investor. now want to the technology sector. facebook has confirmed it had -- the social media giant said information from the integration was not stored on their service. tesla investors have backed its board, calling for an independent chairman over claims mr. model three tarts showed the board had failed to oversee elon musk. musk expressed confidence about achieving production goals. >> there will be more giga

factories in the future. we are close to announcing a factory,vehicle and future giga factories will include vehicle and power trade as a single integrated unit. we are close to announcing something in china. joining us now is bloomberg opinion tech columnist. alex, how did elon musk, who turned up yesterday, different than the one we got to know in recent weeks with the investor core? reporter: we got very used to this hit shooting maverick elon who is highly critical of journalists and shareholders. what we saw here was a very much elon,iatory andontr

missing some of his faults, admitting there are areas where he can improve. not least in improving products to deadlines. it seems to work. he got the backing of shareholders. he controls a lot of the vote himself, 90% of the stock. that is a bump that is hard to overcome. it will be interesting to see when those was are published. when those but numbers come out we will have better granularity on how close of voting was. anna: mike, let's bring you on in. do you like this tech? with this cash burn problem. you like other tech? apple, in microsoft and you get to a market value that exceeds 4 trillion baht -- dollars. guest: we are trying to be quite

selective on valuation grounds. there are attractive growt opportunities in the tech space but we don't want to overpay for them. obvious examples were the tring on 50 times earnings, even higher. we are more cautious on those names. manus: mike, although spots. what anna is referring to, a lot of that comes from earnings rather than pe multiples. let's take a -- it back to alex. i want to get into facebook. there are stories doing the rounds this morning. what are they getting wrong? to what extent does it matter? they have many things wrong, one of them is the guardianship of our data. take me through the rest of the story. peopler: i think that

get wrong the messaging on all of this and the way they are controlling the message. uber, when the- new ceo came in, a few stories talked about huge mismanagement under the previous administration and they were controlled by uber. the control to was getting the stories and they all came out in one fell swoop. that meant that all the bad news was behind them. with facebook, death by 1000 cuts. drip, drip, drip of bad news. to do 80ok was breaching reaching audit, find that theysdemeanors have had in the past and release it in one go, it would allow them to move on more cleanly. frankly, there is no real impact on the stock just yet. is that regulators are given more ammunition to

attack facebook and say it needs regulation. anna: why are they doing so well at the moment? we were talking about threats to their business model recently, whether that isrom regulators or others in the tech space. timeter: with every single that someone says facebook is on one the election, -- u.s. election, that is good for thinmodel. they continue to expand revenue from ads. engagement iser not growing at the pace that it was in the past, they are still able to ring out more dollars per user. manus: thank you very much. alex webb bloomberg opio columnist, always has a fine tongue on him.

our guests continu nversation on bloomberg radio. a bloomberg you are user, you can get everything that and the and myself create in the library. you can find everything that we use. useyze them and save them,ou own reference as well. this is bloomberg. ♪

anna: good morning, everybody. 6:47 here in london. as futures suggesting we could see a upside at the start of trade. nasdaq on a roll for us second -- a second day. what are we watching out for today? manus: it is all about what

happens in the emerging markets. you have the reserve bank of india to announce their policy decision. it would be and yet who said, fed, slow down. anna: they want the fed to slow down. we have more details on that. spain's new leader is expected to name his cabinet. a big focus on the gender split in his nominations. po let's make sure he doesn't make the faux pas that some of the airline bosses managed to make yesterday in regards to who can do the job. i know who does the job on the show. you are all right. that is at midday today. keep an eye on that. it can be a raucous affair. manus: it usually is. brexit will feature. let me to you more about what will happen in india. facesntral bank places --

a close call on whether to raise rates. the focus will be on the r.b.i. governor who heads the six-member monetary policy committee. joining us now is hot shot. is the hike in interest rates possible? there has been talk of no change, but isn't that we are looking at the possibility of a hike? guest: it is a close call. monetary policy has to balance inflation and prospects. expectity of economists interest rates to remain unchanged. believeose economists that there is a possibility of a 25 basis point rate and hikes. inflation is up to 4.6% for the month of april. that is way higher than the 4%

target of inflation for the bank of india. some economists point out that are higher inates the system, putting pressure on the bank of india to tighten policy. india's gdp grew at 7.7% for the 31,ncial year as of march so the bank of india may not want to run the risk of hurting growth by hiking rates at this juncture. manus: it is good to see you. it is an interesting time for the bank of india. it is doubly hard because oil prices are higher, even the you have this argument that opec may switch on the top. this is all fleeting -- feeding into inflation. what is the market watching out for, in terms of the central

bank? guest: you're absolutely right. outmarket is locked during for the monetary policy stance. the key estion is, will this signal the beginning of a rate hiking cycle? llt signal the exit that it has been adopting? risen 20% since april. india is a big oil importer. pressure on the indian currency, which has been weakening against the dollar since april. all of these factors are adding up. the key question for the bank of india would be, will it use intereesol to its crency? that is the thing the market will be anticipating. anna: thank you so much. our major interview with the governor of the bank of indonesia, keeping with the emerging markets things.

that is coming on later in programming. manus: let's get to frankfurt now. great to see you this morning. lots of action in the markets. let's start, first of all, with the emerging-market currencies. you are seeing brazil getting involved in the market. you see the mexican peso pacing last night. emerging-market currencies are under pressure. divide the world for us in em. wouldn't i actually say that we are only seeing emerging markets weakening. the we have been seeing, since the middle of april, is the dollar rallying. that is actually the key dollarment, and the rally we are seeing is putting pressure on the emerging-market

categories. it is doing so in some emerging markets to a greater extent than others. we have some countries that are more vulnerable, particularly turkey, whether those emerging markets currency weakness continues is based on whether the dollar rally continues. anna: does it dependshevidualen? do we expect to see central banks and emerging markets continuing or starting to hike interest rates to defend their currencies? i certainly think so. that has helped many of the central banks in emerging markets over the past couple of years. we have seen waves of dollar strength from time to time over the past couple of years.

overall, emerging markets fared relatively well, with some exceptions. example, the russian central bank, they have built up credibility by keeping rates high and keeping the real interest rates at high levels. it is a great safeguard against rising u.s. yields. that strategy has worked out over the past couple of years. i would suspect that most central banks will continue that way. can i ask you about our bloomberg scoop? that riga is live in terms of changing the forward guidance? do you concur with that? yes, there is a good chance of forward guidance being changed. usedrd guidance was mainly

to keep interest rate expectations at relatively low levels. now that we are sina change andonetary policy organization towards tightening, that forward guidance is not necessarily justified anymore. central banks are going to be more reactive to the economic depnts, therefore they will move away from forward guidance in general. anna: do you see the ecb giving us a day next week for when they stop bond purchases? do you think they will try to paint a more complex picture, not starting or stopping but keeping an option open into the future? obviously,, with the end of qe getting

nearer, they extended only until september, we will get some indications but overall, they will keep their options open. they would change maybe some wording. i don't expect them to already set a date for the end of qe. they have already given some indication, there are many policy members who have indicated that it will not end abruptly. there was a good chance that there will be further qe purchases after september. they will be for the tapering. it may be still too early for them to indicate an exact date at this point. manus: thank you so much. fx strategist at commerzbank. there is just over an hour until the start of the trading day. a couple things we're going to billy wash and

what he has to say on oils and hedging. anna: he was talking about iag having a rough section yesterday. we get the sales and revenue numbers from that business shortly. we'll bring you that next. this is bloomberg. ♪

manus: good morning from dubai. live from bloomberg's european headquarters in the city of london. these are today's top stories. manus: stocks are mixed. renewed attention to trade as china offers to buy an additional $25 billion worth of u.s. goods. the mexican peso getting crushed on a delayed nafta deal. could we see more volatility in the euro? the ecb's june meeting could reveal when they intend to end bond buying. more exclusive sound from my interview with a close confidant of saudi prince and why he nts

to see more womenn tharena. ♪ manus: warm welcome to the show. paying to be much more attention to the fact that china is setting down a moniker and saying, we are prepared to buy another 20 $5 billion worth of goods from the united states of america. stocks are higher this morning, will the ecb actually give us a different guidance in june? can they in the face of an ambitious italian president? the world bank moderated their language in terms of the growth story. you have european equity markets going little bit higher, oil is on the boost, commodities aren't interesting one.

you are seeing them a little bit stronger. let's talk about some of the -- there you go. we have the bond markets opening. this revolutionary mandate that has been set out in the parliament, it means more spending. that is the bottom line. around, way you mix it this administration has talked about spending more money. ratios are what drive the market. bears are taking on the opportunity to pile on the shorts. they have an index called the all client net long index. it has gone to -19 on the bond market from zero. as you see those yields cascade down, the bond bears are loading up. 1.78%, so far this year.

those are the worst losses in the bond market since 2013. the survey says, 3.10 by the end of the year. you are in for more of a bumpy ride. the spread is going to be bumped in a few moves. anna: keeping an eye on the brki mning. there was confirmation that they are not in pursuit, but we knew that from last night. shares reacted in dublin to that last night. let's talk about the risk radar. tesi g coming through in the asss they have been faltering and struggling to find their footing. now up for 4/10 of 1%. nymex crude oil up. we see upward movement in the oil price. the euro against the dollar is pretty flat right now. it was on the move yesterday.

around what we can expect from the ecb next week. next week's life, at least in terms of the conversations they will be having. this is something president trump has talked about a lot, that will be a part of the conversation when we speak to secretary whoo will be joining us at 7:30 a.m. u.k. time. we have been playing lots of content from that great interview with the saudi administration. manus: just picking up on your internationals to paper, if you pull up the ticker on bloomberg, you can see that the local press is saying, could abort face a backlash in terms of this deal not having gone through? the irish independent board faces a backlash as the bit hope fades. this gentleman joined me, that is the reason i was in syrup. -- zurich.

he is a confident and royal court advisor his royal highness, also head of the sports authority. what d have to say about a host of issues from ra ftball, - privatization. let's get your first word news. reporter: thank you. the whitho jong-uto commit to a timetable arsenal. his nuclear i u.s. official says the president has been advised not to offer kim any concessions as the infamous ration 60 the onus to make a summit of excess. trump is determined to walk out of the meeting if it doesn't go well. he is toying with the idea of offering kim of follow-up summit if they hit it up. -- hit it off. the world bank is warning global

growth is set to slow over the next two years. says the world economy will expand 3.1% this year, falling back to 3% in 2019. it says growth will further slow in 2020 as the world economy reaches full output. main opposition party has proposed a plan to stay in the european's single market. leader forward an amendment to prime minister brexit may's flagship legislation. it would make it a formal goal in negotiations to keep full access to the single market. may is determined to leave the eu's internal market. -- internal market. the chairman of the saudi's sports authority is saying the nation is now allowing women to attend all sporting events.

the chairman says it is another step towards modernization. thell of the events that kingdom carries out now allow women to enter. we are approaching women driving, the men have gotten a lot of their rights in this. not want to give an excuse to those that want to take us backwards delay is in the issue. we are protecting our customs and religion before everything. global news 24 hours in a -- per day on air. you can find more stories on the bloomberg top . anna: things turning more mixed year in asian trade as you start to see stocks in china being sold off. session, aut the lot of focus on the r.b.i.. you have indian stocks up by 0.5%. , you also hadhere

a big surge coming through in money and energy players today. stocks,ching malaysian we have heard that the malaysian central bank governor has resigned. no replacement named yet. let's have a look at some of the stocks we are watching in the region. perhaps the u.s. is going to boost -- do business again. i mentioned the rebound coming through. up by 1.7% on the close. the robot maker fanuc is coming up under selling pressure. this is due to ratings downgrades. saying that their earnings slowdown is going to start to hurt in this ai revolution. manus: thank you very much. the very latest on the markets. now to the ecb policy decisions.

the policymakers are anticipating a pivotal discussion on ending leaving next week. sources the governing council meeting could conclude with the public announcement on it when the european intends to seize its net asset purchases at the ram. it is intended to run until the end of september. let's get to our western european team leader from frankfurt. you got the scoop, well done. what are the pros and cons of the ecb taking this decision next week? you have italy on one hand and germany ringing in my other rear. otherother year -- ear. reporter: we're hearing that june looks like it could be a good month to finally have a conversation about an exit path for qe. conversation has not

happened, it has been crossed at every meeting it has been brought up so far. the ecb is concerned about emerging markets. that has to happen at next week's meeting. and then there are the other governing mentors who say that we should take the decision, we should announce we're going to the inflation numbers have popped up lately. the economy has slowed, but it is still expanding and there is not a great deal of concern. the ecb will have a new economic forecast at that meeting with a complaint to the robustness and the euro area economy. italy is moderately contained so far. come july, italy maybe worse. easetion willertainly back a bit. the trade dispute may be looking were so well. that makes it much harder to make a decision in july, so why not do it now? anna: indeed.

if you are looking to move steadily, not surprised the markets, perhaps you see a path that sees them discussing at this time around but leaving the annontchge till july. if they are looking for a reason to do thatalyoud be the reason for taking things slowly. re: the wrist some concern that to act now would be punishing italy. that is not a strong argument. the risk that concern among some members of the governing council. it is possible that we get a full-fledged discussion on qb exit now, no decision but a flag from mario draghi in this press conference. that decision will be made in july. in september, just before the program and's, very few members are willing to leave it that way. manus: well done on the scoop.

how would the euro rerate, if at all, on this kind of announcement? guest: i think that is an interesting question. if we look at the price action sincth newcame out, we have a bit of a break -- upward pressure on the euro. t ponsells us from euro has more to do with consolidation in terms of short-term positioning than it does any real reassessment of expectations on the ecb. fixed income markets are telling us that this news comes in line with market expectations. discussed ins june, i think that will fit with most investors expectations. if we don't see any formal

announcement on the strategy, there is now scope or disappointment that could weigh on the euro. anna: wre does y conversation that intolerant this? something spooked the bond markets yesterday. bigger story. what is spooking markets? isn't what they are saying about the fisc esi? it was supposed to come for the markets, talking about exiting era has not been on the con. guest: we have moved beyond the acute phase of the recent italian strain. if we look at the longer-term prospects, this is not going to be supportive for the euro. we are going to stake a step back from any potential positive structural reforms or greater tegrross tthe reasont e concn for investors is that will limit policymakers ability to respond to the next crisis or to a crisis in other countries.

it will limit the ecb's y i think thatnd that is a longer-term negative. i'm not sure that that is what is driving the market right now. that is likely to exert drag overtime. that is why we are skeptical that the rally in the euro is likely to continue. manus: that is down to the level of trust you have in this administration. the bank of italy warned about this. hata the euro down to, where in the next utf risk? it doesn't soundkha element has passed. of a rarest is a bit commodity, given the high baseline for political words across the globe at this point. i don't think that this is going to change anytime soon. the bigger factor driving the thatr highere fact we are seeing outperformance

from u.s. economic data, that is going to be supportive of u.s. yields. we think that that is going to drive another bout of dollar strengthening. you have to ask thestion, when we step back from some of the shortteh terms oferinvestor positioning, longer-term investors who seem to have soured on other currencies like the euro recently and have moved back into theolth weren't enticed to buy the debt in eo recently,oi to ship that for the time being? anna: thank you very much. he stays with us on daybreak: europe. even asoil on the rise the u.s. makes opec boosts production. this is bloomberg. ♪

manus: 7:18 in london.

it has gone 10:18 in downtown dubai. the u.s. government has quietly asked the saudi arabia and administration and opec producers to increase oil production by one million barrels per day. anthony to apollo joins us now on set. oil is big, it is up half of 1%. thiss quite a story. i didn't know, that quietness and the american administration would together. asking the saudi's to turn on the tabs. reporter: perhaps the surprising part about it is the quiet part. earlier, we had seen a tweet from the u.s. president tweeting at opec, telling them, lower the price. this seems to be a more private request with a specific number, one million barrels a day. to ease some of the supply

shortages. we have seen crude go up to $80 last month. that is ace that is starti get . now, one million barrels per day, that seems reflect the amou ope crude that has come out of the market because of political and economic difficulties in places like venezuela, where they are one million barrels down. countries like angora have had difficulties, libya is always bouncing around. officialt have an quota but they have problems producing. we have iran sanctions coming up on the horizon. anna: this is the level we are talking about, the level of production the united states wants to see from opec. interesting insight into their relationships. who would be in favor of opec raising output? is it ethical as if you are an imrtr ? reporter: that number is even contested now by analysts were

talking about it, saying, how much oil does opec need in the market? how much oil is exactly -- that is the discussion, who is going to bring the oil back on?peoplea russia have gotten the spare capacity. they seem to be wanting to pump some more. kuwait also has some spare capacity, whereas countries like iran are going to be facing lower production and exports. other countries in opec cannot produce more than what they are doing right now. f those countries are going flat out already, trying to benefit from this high oil price. they're not going to take a kindly to see some countries producinge in the price going down for everybody. manus: who do you think the biggest ruckus is going to be? would you think the biggest sparring is going to be? willoughby russia, quite happy to produce more because they

have been one of the least compliant. be back to thell good old days of opec when it was venezuela and iram where the most contrarianntew t wanting to make prices lawyer. have nothing to lose. they are producing as m they can. they don't want to see prices go any look -- lower. ant the ghest price possible. anna: thank you very much. middle east energy markets reporter joining manus in dubai. here in london, we have the senior fx strategy or at citigroup. oil and the ethics world meet, what are you looking at in terms of ethics and the currencies that benefit? with the talk about the canadian dollar in this context. it got a little boost yesterday

on some of the specific rumblings around nafta. what are your thoughts on the oil fx? bit of a could see a short-term boost for currencies like the canadian dollar as well as nokia. when we step back and look at this from a picture perspective, the question that we want to ask prices the longer oil persist, what is that going to do the global demand? it is going to act as a drag. we are already seeing signs that a lot of economies outside of the u.s. are disappointing, i think that this could feed into that narrative, that we are likely to see some degree of slowing, some degree of less favorable conditions pig and we don't see scope for t rrenci to run. i would be bearish on currencies like the canadian dollar. the u.s. dollar continues to gain ground. manus: anna and i started the those puffedbout

up on the borders. a trade surplus with canada and the deficit with mexico. to that end, do we think that we e gointo see more interventions from central banks to defend themselves against this volatility? reporter: i think it depends -- guest: i think it depends on how you define intervention. we are not going to e a rus of central banks in the market actively trying to influence the level of their currency through open market transactions. i think that, i am large, most countries would be with a wker currency at this point. the downside of currency weakness is so low with countries actually wanting to be somewhat higher inflation and no evidence that currency moves are destabilizing domestic asset markets.

on the margin, that will see -- we will see easier policy across the globe. a lot of authorities will continue to verbally intervene. that is something that central banks have been more active at it -- in recent quarters. where does this set with the protectionism conversation? this chart looks at previous bouts of protectionism. minutes was using this in the last hour. they say that this signals weakness for the greenback. is a good chart. i have a lot of sympathy for the view. this is the factor that the market is focused on. the dollar is likely to weaken on this basis. this is going to undermine confidence in the dollar as the preeminent global currency. whenroblem is that timing the market is paying attention to this factor because the

negotiations on trade have been so fluid, it has been difficult to time the impact on the market. when had to anticipate this is going to be a bigger constraint for the dollar, it is going to be closer to the midterm elections. the reason we say that is not just the international politics, but the domestic politics in the u.s. can be a drag. if you look back on the past seven midterm elections, there is a tendency for the dollar to weaken in the months humming into that. if this happens in a normal political environment, given that the situation seems to be more precarious, we can anticipate that happening again. manus:ine norm. normal is nothing that and a and i do on the daily basis. anna, it is technically my weekend. i leave you in charge for the next 10 days. don't break anything when i'm away. anna: i will try to play with your toys nicely.

the european open is next. we will talk about defense spending. this is bloomberg. ♪

to bloomberg markets. this is the european open. we are live at the european headquarters in london. markets rising for the most part, with a slow drop in china. european markets could gain as well. the tax trade is less than 30 minutes away. ♪