anna: good morning fromondon. i'm anna edwards. matt: this is "bloomberg: daybreak europe." these are today's top stories. the fed chairman strikes and optimistic tone was trying to reinsurer investors over its tightening path. in europe, will the ecb: in-state to qe today? comcast tables and $65 billion offer for 21st entry box entertainment asset. we wait for disney to respond in the fight for rupert murdoch's empire.

rolls-royce is set to cut about 4000 jobs as it contends with a price freeze. ♪ anna: good morning, everybody. this is "bloomberg: daybreak europe." it's 6:00 here in london. riga,you are over in decamping with members of the ecb governing council. the questions over the timetable and how much we will learn about it today. matt: yes, absolutely. the interesting thing is that here in latvia, the only central bank governor missing will be the latvian central bank governor because he is involved in a corruption probe right now. but the important question is whether or not mario draghi and company will set an end date for the quantitative easing.

clearly they will be discussing that in this meeting. the question is how much detail they will give us and how much optionality that will want to leave open for themselves, considering the state of things, for example, in italy. on the other hand, they have wage growth rising to an accessible level. getting closer to the path to normalization as far as quantitative easing is ned. anna: we will talk more about the ecb as we go through the program. the fed looms large in this conversation in the risk radar for you. is it the fed, the chinese data, the mix. much in still a number of questions around the balance sheet and the neutral rate. w' leaed lot mor the communication policy from the powell fed.

we have the u.s. 10 year yield at 2.95%. we are now back below 3%. one blog talking about how this is no longer a fed that is scared of it some shadow, different communication strategy perhaps or pace of action. the euro against the dollar, in honor of you being in latvia, and we wait for details of that timetable from the ecb. we did see a bit of a selloff as a result of the fed's hawkish move but some of that was toward the end of the session. a quick word on what's coming up during programming, later we will speak to the rbs chairman, howard davies, at 10:30 a.m. u.k. time.

word news the first update with juliette saly in singapore. fed chairman jerome powell has snad growing optimism in the u.s. economy. he tried to reinsurer investors the ecb will not aggressively tighten monetary policy. officials raised interest rates by .25 points for the second time this year. at the same time, powell announced that starting i january, he would take questions from the media after every meeting. >> as chairman, i hope to foster a public conversation about what the fed is doing to support a strong and resilient economy. when practical step in doing so to have a press conference like this after every one of our schedule meetings. thate going to do beginning in january.

it will give us more opportunities to explain our actions and to answer your questions. juliette: china's centralk has held off from raising borrowing costs following the fed hike. economic dedicating worse than expected. the world's second-largest economy showed signs of losing steam in may with an unexpected slowdown in factory output and lackluster retail sales and investment. ecb policyhere is an decision as well and will -- we will bring you that live, and 45 minutes ter we will hear from ecb president mario draghi. british lawmakers have rejected proposals by pro-asia politicians that were intended to lock u.k. into the customs union and single market after brexit. the house of commons vote is a victory for prime minister theresa may and largely reduces -- did -- largely reverses that had been inserted.

above the pacific ocean because of turbulence from another superjumbo plane. the two jets were about 20 article miles apart in distant and 1000 feet apart in out to two when the flight was affected earlier this week. global news, 24 hours a day, journalists and analysts in more than 120 countries. you can find more stories on the .loomberg at top some weakness here in asia following the fed hike. the pboc is meeting that the hong kong authority to raise its rate. down by .75%. the nikkei down by .6%. south korea was close yesterday for a public holiday and were seeing exacerbated selling as a play catch-up in the region.

there were hopes the summit we had in singapore would lead to better north and south relations. , we'ing a lo of construction companies fall day in seoul. goldman sachs has cut the hong kong listed shareutlook there. of $3.30 on the stock, upgrading it to overweight. thankjuliette saly in singapore with the latest on the market. the fed has raised interest rates for the second time this year. officials signal there are more powell stressed the health of the u.s. economy. >> overall we have a solid isnomy, so what we are doing

trying to conduct monetary policy in a way that will sustain that expansion and keep the lake -- labor market strong .nd keep inflation right at 2% as chairman, i hope to foster a public conversation about what the fed is doing to support a strong and resilient economy. wh practical step in doing so is to have a press conference like this after every one of our scomc meetings. we will do that beginning in january. they can -- the committee continues to think that we are just about at our 2% goal. we know why the yield curve is flattening, it mak the since the world that the shorting would come up. the main takeaway is that the economy is doing vy well. most people who want to find jobs are finding them, and unemployment and inflation are low. ciof wealth management joins us here on set.

very good to see you thi morning. let's talk about the fed, we heard from jerome powell yesterday on a host of topics about his thinking and communication strategy. were they retired some phrases about promising low for long interest rates. if you are looking for hawkish notes, there were a few in there. >> what was interesting, jerome powell saying the economy is doing very well. it is a phrase that was repeated during his press conference. also the phrase, when he corrected himself saying they were not targeting inflation above%,ut aun2%. giving somefed messaging about how it is thinking about the outlook for the u.s. economy and therefore the fed policy going. actually the change that we focus on enormously at the time of the fed announcements was

only minor. on the one fed governor was moving from having increases in 2018 up from three. anna: twas combined with positive commentary around the u.s. economy. iulhave been equally they, but language associated with it, as you say, or pitive. on the other hand, you see the curve flattening so much. it's looking like 40 basis nversion.fore does that concern you can do you think it concerns jerome powell? >> i'm it's into be something that jerome powell will be looking at because obously when the curve has flattened or inverted in previous times, that's when

recession has been more likely. , itf o see an inversion will be something the fed will be more focused on in future anuncements. as we heard, jerome powell is giving himself more license to talk more regularly to the markets after each fomc meeting. anna: we've had a few pieces of citing one person saying it's a big unanswered qution wit regard to the federal reserve. estions w much liquidity do they need to keep in the system as we've seen overnight interest rates increasin consider asave to whenve on from a time everything is very confident

about what the u.s. economy is doing to the ce of rathere tightening than easing. and combined with what's happening with the ecb juncture we will talk about with our meeting later on today. there is a lot of nervousness out there about the amount of sovereign debt and away in which the fed wl talk to the market about re it. but were not seeing any really asar signs, to my knowledge, to any change in language about the pace of tightening. matt: yesterday we were talking abou forecast for the 10 2021yield to go to 6% by because of the amount of debt the u.s. is taking o at the same time money costs are being driven higher because rates are being raised. we saw the tenure go up to 3%, now it's trading back around

2.94. what are your expectations for the 10 year? shouldn't the rate be going higher if we know they're going to keep hiking so much? >> what we saw last night was announcement, as jerome powell was standing up, president trump put out a tweet talking about further trade sanctions against china and the 10-year note back below 3%. likely thats highly the 10 year rate would go above 3% what i'm hearing is that it probably 3.5 or 3.6 for them to really think about transferring some of their poke for leo -- some of their

portfolio. that's the way to fund managers are thinking. anna: what about the concept of having more dialogue with e media, more press conferences. you can understand the rationale. time, it seems move away from forward guidance in relation to what the fed previously did. it seems as if there will be more room for communication. >> that is the challenge, the continuity of communication will be important. the market will be trying to second-guess every word that jerome powell is saying. he comes from a different

andground to janet yellen he is one to have for communication with the markets. anna: there is a new sheriff in town. chris, thank you very much. he stays with us here on the program. , andg up, the ecb unwinds the first formal talks on ending qeutill they set the timetable today in riga? matt: we will pay close attention to that. we will bring you the ecb policy decision live here on bloomberg. no change is expected. 45 minutes after that is when we get to the important stuff. draghi hear from mario ant l th infmation you have been craving. this is bloomberg. ♪

it's 20 pastrning, eight here in riga, latvia, where i'm standing by for the ecb meeting. is when: 20 in the afternoon in singapore. that's go there for the business flash with juliette saly. has made itscast offer, saying the offr valu fox your payment assets at 60 got billion dollars. that tops the previous bid from disney and sets up a bidding war for rupert murdoch's empire. the bid represents a 19% premium over the disney offer. pay a one will billion euro fine imposed by german prosecutors for cheating diesel emission regulations. closes one chapter in the three-year-old crisis even as new developments arise. the world's biggest carmaker

says it will have a positive impact on other proceedings in europe. still faces legal action in more than 50 countries. rolls-royce is said it -- is set to be cutting for thousand jobs trying to simplify its business and boost profit margins. it would bring the total number of jobs eliminated to 10,000 e 2015. rolls-royce says it will deliver toual cos savings of up $533 million. is said to company have won a bid to build a high-speed express train to o'hare international airport. firm and engineering fund backed by magic johnson. the result gives the young company of the used in

legitimacy as it tries to get transportation projects underway in los angeles and whi d.c. that is your bloomberg business flash. ecb: mario draghi and his colleagues will hold her first formal talks and went to end the central banks asset purchase program. expectations are split as to whether officials are ready to set a timetable now or if they will hold off until july. matt is in riga, in latvia. a lot of focus on will it be today, will it be in six weeks time that we will get some sort of timetable. in fact, mario draghi has previously denied even discussing the end date for quantitative easing in previous meetings. he's got to obviously talk about it because the scheduled to run out in september. there's only one other meeting

between now and then. up, attbe broug least. the question is, will they set an end date? they need to signal that clearly t market that this is going to go on forever. you've had some positive economic data lately with wage growth rising over the same quarter last year. could be time to not only discuss it but me to take to the --ket that the ecb knows communicate to the market that the ecb knows it will get out of quantitative easing in ptember. chris, matt is setting up the quandary the ecb is facing going into this. is there rationale for you in waiting another six weeks in learning morabout trade and italy and then communicating a timetable?

or just do it today? the data is mixed. there has been some positive net -- positive data in at the same time, some negative data. the ecb is going to be focused on making sure it does not confe markets or give them the wrong sort of signals at this time. clearly that t do something before september and they need to get on and communicate a message. we talked about the wage wrong jerome powellay is going to communicate. needs to continue that with a sense of how the quantitative easing program is going to end. matt: the three things the ecb wantee our conversion, they want the inflation rate to get close to their target, they

want to see confidence in the market that the inflation rate is growing at a decent pace, and they want to see resilience and that inflation rate, so that rise, it comes back. do you think the situation in italy moves the ball on idiot those three things? doesn't seem like anyone care it and we are right back where we work. it seems italy has a volatile governme and it doesn't seem like they would actually leave the eurozone. that's absolutely right. it seems likely the market is suggesting that italy will not leave the eurozone. the ha moved over the past and 12 or 18 months in the impact it's going to have on inflation through europe, in put prices into companies in europe, and makes it much more difficult if

it comes that from -- to lower levels. that means inflation slows down. some of the other price sures we've seen coming through the european companies start with stocks slowing down. it's a difficbance t current time. the bond market, the bigger story about what is happening with i he is a good communicator. he has not stepped away from talking about things that maybe would be consideredoliticalr controversial. he talked about the threat trump protectionism and the trade rhetoric, in previous meetings. it's a tricky line. it affects growth in a very export driven economy and he needs to mention it. it would be surprising if

he doesn't talk about italy, and equally surprising if over the weekend, he is not asked about trade and does it respond. bankers are more likely to be more cautious than politicians about making grandstanding statements about trade and the way the plow aians will try to re evenhanded furlough, rather than making big grandstanding statements. do you see the euro all of this, the valuation agotencies, especially the dollar? ris: do euro will be affected by big sentiment. if we see some more negative news about stability across the euro, whether from italy,

whether it's from machinations in france because all the labor negotiations are not concluded. you thatwill bring policy decision live here on bloomberg. this is bloomberg. ♪

anna: good morning, this is "bloomberg: daybreak europe." in general, the dollar is weaker, the dollar index down by .10% after donald trump continued rhetoric around tariffs and china. stocks take a bit lower, the hang seng down. a sea of ready asia, somewhat hawkish tone as everyone is saying.

indicators could be see more pressure on stocks there. the european central bank following the fed yesterday. tomorrow the bank of japan. i'm looking at policies divergence and the rates. the fed in yellow, and the ecb in pand the bank of japan in the middle in white. you can see the diversion today. no changes expected from ma draghi ath meet but investors will be bracing for any news of a potential into the qe program whether they decided in june or the next meeting in july. pboc, were seen a bit of divergence when it comes to chinese central bank, refrainirom following in the fed -- footsteps. they held steady, which could be due to softer anticipated credit data is sought tuesday.

if they had raised rates, it doesn't mean the pboc is titening. we are seeing divergence there as well, anna. matt: i will pick it up there if you don't mind. breaking news coming across from germany in the form of inflation consumer price index rising 2.2% year over year, the same as the previous breeding in the same is the estimate as well. still high for germans, 2.2%. one more piece of information that helps mario draghi and company make their decisions today. at warservative party is over leaving the european union. british lawmakers have rejected proposals intending to lock the u.k. into the single market after brexit. the house of commons of his a

victory for prime minister theresa may for now. is cio at st. james place still with us. let me get your take on, every week it seems like there is a really big piece of news for brexit, although it doesn't seem to matter much the following week. how do you invest around this? when do something really make a difference to you? a really good question, and it is very difficult for anybody to have clarity what is theolitical war, as the internecine we saw last night in the vote, the leader of the opposition, jeremy corbyn, unable to persuade his members of parliament to abstain. he had 75 members of his party voting for theot go. there is a real problem in the u.k. government and u.k.

parliament terms of the negotiations going on in brexit. saymanagers i talked to it's how the u.k. economy is performing. the problem is consumer confidence is being dull by the brexit negotiations and making it harder for companies to invest, which means the u.k. mark been the rated. some fund managers are sayin there may be some good opportunities out there and companies that trade internationally. they have to look at it, company by company basis rather than try to understand what is goi o in the brexit deliberations, because it is really hard to get clarity. different signs and exposures, and that all matters. in terms of the money market, guestbeen speaking to one and he's talking about the mess politics here. would you go along with that, or

think that the euro with all its troubles around italy is not meyer.n the brexit grexit seems to me there is still so much to be determined and decided about what is happening with brexit that the pound could go either way. anna: we still could have that staring into the abyss moment. if prime minister may manages to come up with a really good deal, the markets will say hang on, d the pound will climb. what i think would be surprising is if we don't experience a lot of volatility over the next nine , what is obvious is that we are really approaching crunch time as we go into the third quarter. there have got to be some decisions made an clarity on what the u.k.'s exit looks like. anna: i'm trying to work out

where the deadline is. march next year is when deep brexit date is due to take place, but there is the transition ands long as some rt of de can be done on the transition, we've seen what it's going to look like, but it's othing i a great into everything is agreed. it could push the date of these conversations way out into the future. do you see that happening? chris: of course, but at the same time, mrs. may needs to keep her party together. eventually if they don't feel they are getting a good al leadership in the last thing the u.k. need to further destabilization in terms of political issue. questions yet to

be answered on the subject of brexit, although we get ever closer to that march 2019 date. chris will stick with us here. a lot more to talk about with him this morning. bloombg users can interact with our charts shown during the program using the gte future on the terminal. browse recent charts featured on and save television the charts for future reference as well. us talk about media m&a. the bidding war has begun. comcast made a 65 billion dollars bid for fox entertainment assets, the same holdings disney has agreed to buy. is dave, good to have you on t program. just how badly does disney need fox? i guess that is what they are

wehing up in deciding the way to come back and conquer. >> certainly they need this deal. it is a linchpin for their strategy, which is eventually moving to offer their content over the internet. there has been a big, swift change in the way entertainment is consumed, and disney nate -- disney needs to stay on top of that. they have already said they are taking some of the content on netflix, so they are pulling back from systems that have grown so large and now they are challenging them. .his is part of a strategy the second part is related to that. imagine you are out shopping and addenly you hear there are bunch of new buyers that have entered the building. you start to scramble and look for stuff to put in your back, and that is what is happening here. what happened with the at&t time

warner deal, given the light for that. there is a mad scramble for entertainment assets. did both disney and comcast realize that fox is on the block? one of them is going to be the winner. that's how you build a classic eating more, ahat is what is g onder about comcast and funding cost. i'm sure the company doesn't just cap $65 billion in cash lyg around, right? >> it does not. if you look at the balance sheet, you will not see $65 billion just sitting there waiting. what you have is solid indications of finance. many have come in with letters of confidence. you have a couple of major banks saying we definitely can provide you with the credit you will need for this deal.

part of that is comcast actually a3 rating. that's a very high rating and something probably ryan -- brian roberts wears on his lapel. that's a pretty powerful statement of a strong company filley do ve the balance sheet to make this real. they are offering to pay for the breakup fee. they will kick in $1.5 billion, that's how bad they want is deal. and they do have the money to make it. let's talk about how things have changed since at&t. what kind of regulatory concerns are being introduced here? having to think about t will get the easiest right terms of the regulatory conversations that go on. yes, exactly -- yesterday

we were talking about the fact that at&t got the green light carry out its takeover of time warner. this is a simir type o transaction where ite vertical. the expectation is that there will not be significant l chleng. all these deals do ve to go through and underwater review. regulatory environment has improved considerably now that at&t got its green light. chaine set off that reaction, people that always need more money, especially with netflix out there doling out the cash for production, you have a bidding war. i expect you will see quite a few more coming down the path. much.thank you very

up, rolls-royce is said to be cutting for thousands have in an effort to boost profit margins. we will have analysis. this is bloomberg.

matt: gooing, jus past 8:45 here in riga, latvia, where the ecb is set to meet. you see the emaar state building lit up, red, white, and blue, to celebrate the world cup kicking

off locally on friday. i think some people in new york hope it comes to north america -- the impact state building. that's get the bloomberg business flash from juliette saly. itsette: comcast has made long-awaited offer for much of 21sttury f. it values the assets at $65 billion, topping previous bid from disney. a share in cash, it represents a 19% premium over the disney offer. a oneagen will pay billion euro fine imposed by german psetoing .iesel emissions regulations it closes one chapter in the three-year-old crisis, even as new developments arise. the world's biggest carmaker criminallement of the

case will have a positive impact on othminal proceedings in europe. it still faces legal action in more than 50 countries. to be cnge is set 4000 jobs as it tries to simplify business and boost profit margins. the layoffs would bring the total number of jobs eliminated to nearly 20,000 since 2015. rolls-royce says it would toiver cost savings of up $533 million. that is the bloomberg business flash. thank you much, juliette saly, from singapore. the world cup kicks off with the first game between saudi arabia and russia. do you call it football or soccer? let's talk about how the country's stack of economically. give us your unique oil related take on the world cup.

against gdp and unemployment, russia clearly tsading the way but popus more than ur times that of saudi arabia. oil form a is stacking up pretty nicely. if you look at how they're doing long-term, russia leading but we know the shouting -- saudi's have the share of capacity. they want to lead by example when the opec cut was announced. you can see the last two years having tosaudi's spare capacity. matt: the oil markets will be paying close attention to the soccer game as they watch football together.

teams had the two worst in the world cup rankings for this year's event, but they are the world's largest exporters. what the markets care about is what president clinton will talk will -- president putin talk about. is just eight days away from the opec meeting. they are meeting at a historical time. now they are talking about unwinding the deal. the saudi's are looking at 500,000 barrels a day to one million barrels a day. the russian saying that would potentially like to go back to october 2016 levels. top of this, there is already in fiting, all coming out saying they don't want to unwind the deal just yet. off, we have president

donald trump again talking about opec yesterday, calling them out prices artificially, and the meeting has not even begun. so there is quite a bit of drama. anna: they have a lot of oil market movement to talk about. let's go forward little bit, and amazing act of mulral cooperation has led to a nafta world cu being created for 2026. >> you see these countries coming together to win this kind of epic it, $11 billion at , and is how you're getting these countries that are arguing about trade tensions and how they are going to deal with the future of that. they are coming together, but a lot of money is at stake, so you can see why. matt, you have done your bract already. 4:00 p.m.t before london time. anna: it's not because she

copied anybody that knows more about football than we do. thank you for the latest on the world cup. engines,lk rolls-royce is said to be cutting 4000 jobs as the jet engine maker tries to simplify its business and boost profit margins. the retrenchment would bring the total number of jobs eliminated nearly 10,000 since 2015. rolls-royce says it will deliver annual cost savings of up to $533 million. joining us is benjamin katz. what is the focus of these cuts? weiss is happening in slow motion and not all at once? interesting question

and we will find out at 7:00. we know it will focus predominantly on the back office and the hq. on a bigger scale and a bigger question, why now? the ceo, who came in about three years ago, has been quite frustrated by the lack of progress that rolls-royce has been asked to achieve. this is a crucial next step. simultaneously battling a bit of a crisis. >>orerday that sent were struggling seeing, if you want to find out more, you can

read it on the terminal. it's a huge wrapup of the supply chain in terms of delivering new parts that's putting pressure and delay on the process. and we an ongoing issue will see h t c help mitigate it after that. for: thank you very much joining us here on set in london. asian stocks accelerated their drop after the fed meeting and after a rapid chinese data painted a picture of a softening economy. the pboc held off fr raising rates in the wake up u.s. tightening. china -- not mention we should mention china. the data is little bit weaker. , is the pbocang on worried and backstopping growth

of a little bit more than chinese economy? >> we need to focus on what is going on in terms of the way chinese authorities are communicating. it is continuing its ability to maintain the high levels compared to the western world. at the same time, we should not automatically think the pboc is going to raise rates every time the fed raises rates. it would not seem to be just following in the stead of the federal reserve, particularly considering the ongoing trading go shenzhen's between the u.s. government and thehinese government. mike pompeo is in beijing today will be not only rorting back on the meeting with kim jong-un a president trump had earlier in the week, but also will be discussing trade, and therefore, the pboc absolutely does not

want to be seen to be the federal reservepet. matt: trade issues are clearly bit, but how much does investment in china matter to you and your clients at st. james place. what size is the average portfolio for eight british investor, and how much is chinese equities? >> in the past mth or so we marketchina ratio , prepared -- proportional on the emerging market index for the first time. and will signal acceleration or a change in the way in which chinese stocks will be perceived by global investors and indeed, in u as china becomes a more important economy, there is more

trade in chinese security center , i think n.y.c. investors will spend much more time looking at chinese securities than they would have done in the past. how worried are you with the trade rhetoric? you?ervous does it make >> i still think emerging mark in terms of their valuations, look unreasonably unpractical as a way to run the money markets. emerging -- there so much dependency on emerging markets. --zil, continued vote continued growth in china. anna: so much for your time this morning c.

up nt, back he fed. two more rate rises so far this year. more details are next. th ♪

matt: good morning from regan, latvia. where the ecb is meeting. anna: i am anna edwards live in the ci of london. these are today's top stories. the fed chairman strikes an optimistic tone while trying to reassure investors over its tighning path. in europe, the ecb will call in it qe today, or will question mark that is the big question. upping the ante. comcast tables and $65 billion fox'sfor 21st century

entertainment assets. the world cup of crude. russia and saudi arabia kick off the soccer championship. vladimir putin and crown prince watch from thean sidelines talking tactics and gold. anna: good morning. this is "bloomberg daybreak: europe." let's talk about some breaking news from a desk u.k. from the u.k.. we are getting confirmation of the story we brought you earlier. rolls-royce confirming a fundamental restructuring of the business.

has been the retrenching of the busins nce the new ceo took over. that is coming to an end in 2020, talking about that this morning. also talking about the reduction of 4600 jobs. that is the headline story. we have been talking before the break about the ssibility of cutting 4000. they are talking about the possible reduction of around 4600. in an attempt to simple fire the business, to take on the concerns and considerations of an activist investor to boost profit margins. this will take the total number ceo to nearlythe 10,000. since 2015 when he over. a lot to talk about when it comes to rolls-royce and restructuring that is taking place. quick word on your -- what you the ecbiga for. matt:

is meeting here. the european central bank major location outside of frankfurt somewhere in the eurozone. they picked latvia a long time ago before the corruption thedal flared up around latvian governor for the ecb. he will not the allowed to take part. he is not allowed to leave the country. he is under investigation for corruption. the meeting will carry on. they will discuss the remaining the possibility of ending qe in september. it is scheduled to end their area the question is, do they want to tell the market y, will ended in september, or do they want to leave some optionality open in case they have issues with italy but as on thealph pointed out, other hand, oil price. it has been right -- racing

which is good for inflation but it could turn around it anytime and that would complicate things. they want to give their auctions -- options open when it comes t ding quantitative easing. there are hawks and the council who want to close those options down signal to the market the punch bowl will be taken away. for inet's to watch terms of the timetable. we will talk about that in a moment. futuresok at what suggest. would -- this is a leg down. we saw u.s. markets more sluggish after we heard from the fed. the hawkish tilt there. future features and dax futures and cac futures d. thadar shows uthe asian equity session, we have seen selling in the chinese market. the korean market is looking weaker. the selling, we have gone

through the warning. down .9 of 1%. a clip -- quick look athere we are. moves.aftermath of the 2.95 is where we trade right now. moving field that and bringing them back down. put in the euro-dollar because it is ecb day and matt is in riga, what will that tell us about e timetable? bs will be speaking to the chairman. m&a will be a subject for conversation, brexit getting a mention as well. let's get a bloomberg first word news update. fed chairman jerome powell has signaled growing optimism in the american economy. he also tried to reassure investors that the central bank derail- will not

expansion by aggressively tightening monetary policy. raising interest rates by a quarter point and upgraded their four totalcast to increases in 2018. powell announced starting i nuary, he would take questions from the media after every meeting. a public to foster conversation about what the fe dngo support a stronger, resilient economy. one practical step in doing so is to have a press conference li this after everyone of our scheduled fomc meetings. we will do that beginning in january. that will give us more opportunities to explain our actions and answer your questions. juliette: china's central bank has held off from raising borrowing costs following the hike. the cision ce as economic data came in worse than expected. the world's second-largest economy shows signs of losing steam in may with an unexpected slowdown in factory output and lackluster retail sales and

investments. cut bondof japan has purchases for the second time this month, taking advantage of the recent stability in local yields. by ¥30wered buying billion to ¥300 billion at the regular operation. the reaction was muted while 10 year bonds held onto an earlr advance. its a3has said one of the aircraft had a brief diet above the pacific ocean because of turbulence from another superjumbo plane. they were about 20 nautical miles apart and 1000 feet apart in altitude when qs 94 was affected earlier. 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 . risk off in the asian session.

,s we react to the fed decision we talked about the bond buying in japan, the nikkei closing down by 1% but soul is being hit hard. was hit hard as south koreans went to the polls. ino a bit of weakness large-cap stock. australia closing out the session flat by .1 of 1%. it had been tracking hiring the session. the weakness coming through in south korea. a lot of the korean businesses that have been rallying on hopes of the summit would lead to better ties between the north and south falling today. by the dailyimit the h shares fairly unchanged. goldman sachs hasot- downgraded the stock to neutral. 6%,endo falling, off by down another 5%, one of the worst reformers in tokyo,

underperforming at the e3 conference in l.a. anna: thank you. sinpo is interest rates the second time this year, officials signaled there are more hikes to come. let's take a look and see how are guests have reacted over the past 12 hours to the decision. >> the message is leave them alone. which is so far whhas done. they haveof thinking done almost everything wrong except the fed. >> we will havehe stronst year of expansion at 3% but at bringme time, that will fiscal stimulus and we have a high rate of uncertainty with hrionly the future rates because of deficits and debt, you overlay that with trade tensions and escalating trade tensions. >> what powell was trying to convey is the idea that the --

we are recalibrating monetary policies, we have been doing that since we were lifting off from zeroe yea ago. we are not doing this in the of haltingpectation the economic expansion. just keeping pace with it. that is not bad news. >> aowell f seems to bee reactive than anticipatory. ultimately that will have to chge in 19. now, adding his thoughts to that roster. i was reading this morning, this said this is no longer a fed scared of its own shadow. inis increasing the pace tightening. do you sense a new guard? scott: the dot plots have been consigned to history. i think we can pretend it is norm.

you're going to stand there and say we will adjust as quired. seems reasonable. it does imply a degree of normality. we're still dealing in extremely low rates. anna: is this less guidance to come? scott: we will adjust. he will be slightly more straight talking. peapng to brine touch of the common man. i think we do this because of this. recent will. is ireasonable because things are better? there is a lot o to be concerned about. there is a key change. you think you should be selling treasuries, do you see the yield continuing higher, it went above 2%amdo.

if they are going to continue raising rates, if they strike a slightly hawkish tone, why would you want to hold 10 years in this climate? scott: i would -- could also 'sgue -- the u.s. economy productive capacity is not there. -- theyis there is have capacity restraints. we discussed how this is working. you have the economyngfull city. oe not have to flow through to a huge cpi number. anna: what does that do to ten-year rates? you are taking a long view. in 1979, testing some of our

mo the making the point that euro has to go back down or it is breaking out of this trend? scott: youcan draw the line. the point i am trying to make is i hope you enjoyed the bull market. that is very anomalous. normality. to that is much more difficult. the breakup could reflect the economy operating at full capaci.maybe cpi does not reflel those things. it is that capacity issue at hand and you would expect the next thing and that reflects a higher, not lower set of price points. the fed said we would have to respond to that. the business cycle is long in the tooth here.

and the yield curve is flattening out almost completely. eventually, recessions happen for you do you think the fed will try a g ahead o this wily e. coyote rate? gest: if you look at the you are definitely slower. china's weaker sales, i do not know why anyone is surprised it is slowing down. if you look at south korean exports, theyre pointing the wrong way. q4 last year, suggesting there was going to be a big splurge by consumers. the u.s. savings rate are on the floor. there is not much fuel left to fire up this supposedly wonderful global recovery. i would argue last year, china had the same ratio as the u.s.

in 2007. five dollars of debt for one dollar of growth. everything is about expectations. global growth has peaked, the u.s.s stronger and operating at full capacity as is most of europe. that is the reality in the situation. anna:s global growth story, any slowdown in china and any threat to the global trade regime matters to an economy that is open and driven by exports are has a large export mponend i am talkout the eurozone. when we listened to the ecb, what are you tuning in for, comments on trade, italy, or are abother itxed is this week or next week? why whytransfixed reflect on the fact the region as a whole is a ture enomy.

it had a nice boom last year. lest we forget, the north europeans are busy squirreling that money away. they are worried about their pension plan. the reaction function has been to save more. this is not in the plan but that is what is going on. expect the european consumer to go boom is nonsensical. i would argue why this obsession with this inflation target in somewhere like the eurozone? is indifferent with a mild positive, not negative. what difference does it make question market has pushed inflation up a little bit. why bother? i do not get it. anna: lots to think about. our guest is staying with us. tell us what is coming up, is it

ecb related? matt: we will bring you the ecb policy decision at 12:45 p.m. aonomists do not expect change in policy. 45 minutes later is when the important start get -- stuff gets going. we will hear from president mario draghi and get a sense of wh he expects to do with quantitative easing, maybe hear about in and day. st, speaking of the european central bank will hold its in portugal. president mario draghi speaks alongside his counterparts from the fed, the boj, and the rba, moderated by stephanie flanders. you can watch that live on bloomberg television or your terminal and you can listen to it on bloomberg radio. ilion bid. the same assets it agreed to buy. we'll bring you the latest when we get the counter bid from this

-- from disney. this is bloomberg. ♪

anna: 7:21 a.m. in london. 921 a.m. if you are with matt miller in riga where he is for the ecb meeting. the bidding war has begun. let's talk about m&a in that media space. comcast made a $65 billion bid for the fox entertainment assets , the same holdings that disney has agreed to buy already. joining us now for more on the dave mckeown. good morning. this comes down to how badly disney wants the assets, will they come back with a counter bid?

>> bob iger has not slept probably since the at&t decision has come down. they knew this counter bid will come after the at&t deal got a green light. he has to be thinking of ways to come up with a counter bid that will be as compelling as comcast's all-cash it is. this is important for disney. they need the content. there is a mad scramble on, bidding wars erupting for studio content, film, and television entertainment, so these distributor's can control their . without controlling content, you are not longer able to control your fate. you have people coming in with their own content, they are coming in with content they have billions odollars to buy is creating competitors that can peel subscribers away from people like comcast and disney. there is a mad scramble on to get this content, and you can bet disney is coming up with a

counter offer as we speak. anna: thank you. mediaia telecom and editor. m&a ithe media space, does this make sense to? >> my paper is bigger than your paper. it is classic late cycle, what is new? sorry to rewrite the script. make hugeyou have to monopolies. you are burning yo cash. it's go for it, let's take and overtake that content. i see why but it is late cycle. they are all doing the same thing, it is classic late cycle behavior. anna: does anything convince you to buy at the moment? i have this chart you suggestively look at which is

fascinating. guest: shall we see where we ? let's have a look at our chart and look at the last time we were here. that would have been the last crisis. the reality is most insiders are aware of the fact that they are reaching peaearnings. i could make a good guess for the -- a little earnings decline this year. let's go with the growth recession. anna: the chart behind me shows what happened. my point.t is no one does. they buy each other's shares. occam to corporate ame and corpote.k thwhat is ing when people say invest today i would respond with why? matt: he is not convinced.

matt: it is a compelling argument. we always talk about the amount of money that private equity has to make deals right now. it is 1.7 trillion dollars or something. you have the corporate ire's willing to shell out as much as they possibly can borrow from the bank as well. what about all this cash that is floating around? where does that go? alternavere is no market. i concur but you have the fundamentals. why is private equity a good thing? quite a lot of private equity deals being done, it would not mnse in t open market. this mystical idea is smart, it is smarter getting money and we paid egregiously for holding y. how many deals are being done with a smile?

this is the classic cycle last time, private equity was seen as the last vestige of a long duration asset. earnings are set to peak and that is not a good mix. matt:haor do right now? in your view, are you still looking for return on capital, or are you looking for return of capital? would not be in investment mode. i would think about preservation mode and i do not see why that is wrong. cares,know, no one invest today and come back tomorrow. i uld not inst in the u.s. fiat emerging market looks interesting but it is pretty much that. anna: thank you, thanks are coming in. it for us.

the european open is next. matt miller is with the team, guy johnson as well, matt is in riga for the ecb roadshow. we will have more on that. this is bloomberg. ♪ retail.

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bloomberg markets, this is the european open. we're live from london. i am guy johnson alongside matt who is in riga today. latvia.am in it could be a very exciting meeting today. mario draghi and h governing council might announce the end of bond buying. the standoff over the latvian central bank governor who is not in the meeting because of a corruption scandal is likely to come up as well. the cash trade is less than 30 minutes away.