anna: good morning from london. i'm anna edwards. manus: and i'm manus cranny. this is "bloomberg: daybreak europe." these are today's top stories. anna: daimler is the first major company to cite rising tension as it cuts its profit outlook. -- vienna, confidence of compromise will be reached. and status upgrade, officially welcoming saudi arabia and argentina into the emerging markets basket.

etf'smp on that news -- jump on that news. a good morning, everybody. this is "bloomberg: daybreak europe." it's 6:00 here in london. .anus cranny is in vienna you are tracking down those voices on the oil story, the decision-makers. i ran sounding a different tone this morning. manus: absolutely. on the24 hours here ground, the iranians seem to have moved a little bit forward. there's 2900 rooms, 19 courtyards. there is a lot of chat going on. the iranians will join the committee that discuss the nuances of supply. the king of saudi arabia saying he has spoken to nearly everybody and they all agree

it's time for a little bit of change. there seems to be a movement forward, oil prices are lower this morning. a conversation from sydney in terms of perspective on the markets. what will the communicate be? will it be real? the thingss one of we are keeping a close eye on, down .4%, inching closer to the output field. the iranians sounding a little more conciliatory. let's look at the msci asia-pacific. not a big move, perhaps. futures, pointing higher. the msci asia story looking different from the united states story and that in itself might be interesting. a lot of talk about divergence, america first. that applies to the stock market as well.

the prospect of no deal is still on the table, after all those complex statements and discussions about her to call yesterday in the house of commons. no deal is still up possibility but theresa may lives to fight another day. i mention the u.s. futures pointing higher by around .3%, as much as .5% in the united states. trade rhetoric, does the u.s. have less to lose? we have the u.s. commerce secretary joining at midday u.k. time. tough talk on how there has been plenty of conversation with china and now it's time for action. >> we might get some kind of deal and that's why you're

seeing the slight risk on. this is the gentleman we will have the conversation with at six: 30 a.m. from citigroup, always good to get his insight on the nuances of supply. in the meantime, the first word news from hong kong. >> u.s. president donald trump is planning to meet with russia's vladimir putin during his visit to europe next month. bloomberg has learned that two possibilities for the meeting are either before the nato summit in brussels on july 11 or after donald trump is it to britain two days later. reversed trump has position on his policy separating them children from parents who cross the u.s. border illegally. he signed an executive order to detain families together. he has been under intense

criticism from congress, the public, and business leaders over the separation, which saw around 2000 children placed in federal custody. and don't like the site and the feeling of families separated. for manyem has gone on years, as you know, through many administrations. we are working very hard on immigration. people haven't dealt with it, and we are dealing with it. that ithas reiterated is fully prepared to respond to on new list of u.s. tariffs its exports. a commerce ministry spokesman said the nation will use a combination of quantitative and qualitative measures. at the same time, beijing has announced that it will hold a trade summit with the european union on monday. u.s. commerce secretary wilbur ross joins us after midday u.k. time.

the chances of opec reaching an oil production deal have increased after a rent edged away from a threat to veto any agreement that would raise output. the saudi energy minister said every minister he has spoken to agrees that it's time for the group to change course. but i'm encouraged that we are converging toward a good positive union that would see not only the stakeholders within the oil industry but also our consumers. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . anna: thank you very much, deborah in hong kong. details of the market session and how they developed in asia. markets and shares

keeping the course, the nikkei 225 gaining ground given the weaker yen. .ospi shares are under pressure an ominous sign for global trade. weakness in southeast asian markets, malaysian socks entering a correction and we had shares climbing into bear market territory. authorities indicating a liquidity boost his forthcoming. the hang seng also under pressure, as morgan stanley warns the selloff is far from over. , sony optical slumped on concerns about profit margins in the camera unit. share surging after receiving an unsolicited bid from one company. announcedvernment broadband charges will i think the lowered by at least 25% by

the year-end. manus: thank you very much. markets inon hong kong. the most powerful names into draghi is breast their concerns on the prospect of a trade war. >> what is the effect on business investment? what is the effect on exports? what is the effect on consumers confidence? there have been lessons that were not learned from the and they are all very negative. >> those concerns seem to be rising. for the first time we are hearing about decisions to postpone investment, postpone hiring in making decisions. that is the new thing. >> it's incredibly disturbing. i cannot think of a country that's built its self by

building walls. this could be rescinded and a normal sort of trading relationship between the u.s. and china would prevail. manus: central banking titans by the banking panel. john, thank you very much for joining us. i want to come to you on one of the stories in our headlines that relates to this trade story , the nervousness expressed by central bankers. citing trade tensions in cutting the outlook, saying u.s. made vehicles will face tariffs going into china. an early example, i guess, of

the unforeseen effects of protectionism. john: this is the way these episodes tend to evolve, they start with relatively small skirmishes and build up in response from one side and then the other. then you start hearing about the real impact it has on those companies and the people who work for them, ultimately. manus: we think about the flow of money at the moment, one day risk off, next day risk on. there is something going on and there seems to be a move to repatriate to dollars. we are seeing money flowing to etf's, up to for your paper in the u.s. are you noticing any kind of slow movement which would correlate that, to suggest that is right? would you see the move out of european paper?

are the flows that are associated with these times of elevated stresses and money looking for a safe haven. as you say, it's sort of coming in waves and it's hard to get a strong field for exactly how things are evolving. there is obviously a lot of strength behind the u.s. recovery. there's a central bank that remains resolutely on course to raising interest rates and by doing that, pushing up yields on some of that paper and increasing its appeal care you can see what the money is going in there, but in the background there are all these issues around trade and questionable recoveries in other parts of the world. it's very uneven and it's making investors nervous, but at the same time, they see opportunities because of those different relative growth rates that are occurring. anna: where did you see the eternities? we see u.s. futures moving

hyper but we don't see asian equities responding. in your universe, where might you start to look for opportunities in this trade spat, finding the oversold assets? we are trying to see through -- see through the headlines and work out what's going on in the underlying economy. the spread between government markets is unprecedented. 10 year treasuries almost at 3%, and eurozone bonds in germany, less than .5%. that difference between the yields is highly unusual. we don't think ultimately that it can be sustained. it will not persist in the long-term. the think the spread of really start coming down, probably through higher eurozone bonds

yields. there are opportunities like that, the ability to trade discrepancies between markets. manus: one of the other conversations stephanie had with howell and one of his responses with talking about the 1960's. do you think that central banks are still so upset by their inflation targets, you end qe in europe and reduce the balance sheet in the united states of you still want to try to run these economies a little bit hot. what does it mean when we use that phrase terms of thility to tolerate a little bit more inflation? they are beastly have different agreements but ultimately they are trying to stay faithful to what is put in front of them. ecb and other central banks have not been that comfortable running the sort of policies they have been, but in

the ecb example, they are trying to get inflation back up toward 2% and keep it there, and that has proved impossible for them to do up to now. so they hope the economy is graining -- gaining traction and they have to stick to their guns because they are given a job to do. it's not up to them to try and maneuver their policy in different directions. in the u.s., the fed was already on track, the recovery was getting fairly mature, then we got this fiscal stimulus on top of that which is given them a more difficult task with policy as well. they have to adapt to circumstances and stay favorable to those regions. anna: we're getting comments from the bank of japan, talking about looking cautiously at trade moves. no need to much pessimism on prices. --e worth are guest later in

more with our guest later in the program. msci grants saudi arabia and argentina the coveted emerging-market spaces. we will look at opportunities and challenges. this is bloomberg. ♪

anna: good morning, everybody. this is "bloomberg: daybreak europe." in vienna with manus. he is covering all things opec. the hang seng down by .9%. aboutci asia-pacific down .3%. nasdaq futures up by .4%. system divergence there, perhaps. that's get the bloomberg business flash from hong kong.

daimler has become the most visible global corporation to cut its profit outlook and blame it on the escalating trade tension. the carmaker says pure chinese customers will buy were sated been suvs because of terrorists beijing is slapping on autos imported from the u.s.. two months after projecting higher profit, it said full-year earnings will be slightly lower than last your. crossovers arend made in alabama. shortly -- sharply cut back its ambitions as it starts taking orders for its ipo in hong kong. with its sights on raising $6.1 billion u.s., it is still on track for the world's biggest ipo in nearly two years. china mobile, the nation's biggest wireless carrier and qualcomm are among firms that have agreed to buy xiaomi stock

as cornerstone investors. uts tracking argentinian and saudi arabia and stocks have climbed in they trading after the msci gave two countries emerging market status. they will join nations including a, india, turkey, south africa, and brazil. argentina is in the rare position of getting an imac credit line and an index of great in the same week. afterfernandez joins us 6:30 p.m. u.k. time. that is your bloomberg business flash. anna: thank you very much from hong kong. john is still with us. we will get more details on the specifics of argentina and saudi arabia and their inclusion in the msci. i had this chart, emerging market bond years -- bond yields. the most since april of 2016.

our emerging markets work this kind of premium? what is your view? john: you can see here as well that u.s. treasuries have been seeing yields rise much more sharply than anywhere else. when you start looking at emerging markets, you will see a different picture because they are so exposed to what is going on in the u.s.. the story with the fed raising rates and high yields in general, which means there have been more ins coming into the u.s.. we are reasonably relaxed about the outlook for emerging markets at the moment. news for argentina and saudi arabia is a relief and we will see where we move from here. ultimately that spread will probably normalize as the u.s. economy stabilizes. two big issues for the

emerging markets, trade war's at the fed. ours turn our attention to dubai story where we have had the msci and the emerging markets of argentina and saudi arabia being elevated. then, good to see you again this morning. i woke up this morning and said, really? rates, a lifeline from the imf, and you get an elevation to emerging market status. have i missed something? >> know, a lot of people were surprised. complete unanimity on the expectation for argentina to get this upgrade in a way that saudi arabia did. but all those factors aside, this is really about transparency and accessibility to markets.

the argentinians have been working really hard in that respect. they areoint, deserving of this upgrade in one now see some kind of relief rally, not a huge one because there are all these other argentineaying on the story, but some kind of rally today. we seen predictions of as much weeks in coming days and as some of the flows come into argentina. as you say, this is more of a surprise that it was for saudi arabia. so we might see some reactions in markets and the etf's have been reacting, in particular, argentina. is it a vote of confidence, or is that not coming through? >> to some degree, there is a lot of expectation or there has been over the past years toward

argentina, the talks to the administration to turn the economy around, to scrap capital controls, which is part of the story and one of the reasons behind the msci decision yesterday. one of the caveats introduced into the decision was that argentina has to continue to be transparent and not rollback any of the reforms to capital controls and so on and to maintain the accessibility of the market to investors to ensure that it keeps this emerging market status, which it lost nine years ago. so it is kind of back from the cold in that respect. morgan stanley just dow has said that argentina could rally by as much as 20%. you could see by the handsome reward for this. ,he other side of the story is

there was a great deal of presumption that this would happen. this is to do with reform in the market, the second-best performing emerging market in the world. the question is, does it have the kind of depth of liquidity? that is what i asked myself every day. people say they love trading in dubai. >> there is more liquidity than in argentina. the market capitalization is between seven times and 10 times, if memory serves. there is plenty of liquidity. it's more about the ability of foreign investors to get into the market because don't forget, saudi arabiago, set out on a path to encourage more foreign investment into the stock market. this is another piece in the tosaw as it moves forward

opening up its equity market to foreigners in this way. so yes, it is good news for saudi arabia, a long way to go for both countries. anna: justin, thank you, joining us from dubai. a quick word on oil prices. your expecting a deal from opec and the oils prices -- oil prices go lower from here? >> if it happens, we think the oil price will normalize. thank you very much, we will see what the deal is to be done here. we will stay with the emerging markets story as well. bringing the cheer to the market. and from thailand, the prime minister in charge of economics joins us for an exclusive and

3:30 u.k. time. let's see what they have to say about the fed and the move to the market and emerging markets. this is bloomberg. ♪ two, down, back up!

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anna: good morning, 6:30 here in london. 2:30 in the afternoon in tokyo. the dollar in general is stronger this morning, up right .2% on the dollar index and the bloomberg dollar index. a mixed picture across markets. if we look at equities, asian equities failing to catch a bit overall, despite the fact that we saw modest gains in the u.s. yesterday and u.s. futures are pointing higher. the regional picture is a little bit mixed. you seen some gains in japan and

australia, but weakness elsewhere. markets not been doing too well this week with all the concerns around trade tensions. let's look at the next chart. indonesian but the rupee has been the worst-performing asian currency this year. today is playing a little bit of have been closed and indonesia's were pretty -- rupee of falling, dropping the most since 2016. prompting this information on where to say there's a possibility of a decision next week and the central bank hiking rates twice in quite a short time did not support much of the rupee a. emerging markets more broadly, an interesting story on the bloomberg talking about how some emergingg it is the

markets out of the commodity producers and the most to export to china, but those might be the hardest hit, the story talking that countries like south africa, russia, and thailand. you can see at the end of the chart they've seen quite a bit of a drop since the real -- we escalation of the trade tension. and were keeping an eye on very much in focus. today, thetle weaker gdp pain index. the pain index is not as low as it was back in december 2016, which means there could be a little bit more bearish skew and downside, judging by this chart. she was ending with the u.k. story. let's talk about brexit.

the u.k. prime minister fended off a rebellion to win a crucial brexit vote. the fight is on whether she should have the ability to take the u.k. out of the deal. inflationuss this and and other matters that will matter to the bank of england with our guests. no deal is still on the table, that's what we learn from yesterday, or is it? a lot of the mps were making the point that the u.k. would not be ready for any kind of no deal situation. is the u.k. government really ever going to play that card? >> they might alternately have a lot of choice. it's interesting because you could see a situation where parliament did have the full authority to say we don't accept this deal and we want you to go back and renegotiate it. then the e.u. sibley says it's the only deal we can offer you, so therefore it is take it or

leave it. even had parliament got the full control they wanted, which has not really happen, that was not any sort of guarantee that no deal was absolutely not going to happen. no one wants it to happen but it is certainly a possibility, especially with some of the series issues are completely unresolved. anna: we've spent so much time discussing what one party wants to achieve from this and what they want to do from within rather than expanding the conversation into what the e.u. will agree to. i have a chart that shows u.k. inflation in the white, coming down from elevated levels. it is above target, but is coming down, and faster than the bank of england forecast it would. >> it's been sticking of around 3% and has come down quite rapidly. it is still above the target but it disarms the argument of more

hawkish members who insist that left to its own devices it will not get back to their target, and therefore there is no need for policy further. we think it will end up back on target within the next three happened six months without the bank of england doing anything on interest rates. it's a possibility, they clearly want to raise rates. they will probably sound quite resolute today. john.thank you very much, let's get the first word news update from hong kong with deborah. trump. president donald is planning to meet with brushes vladimir putin to his visit to europe next month. bloomberg has long -- has learned that two possibilities for the meeting are before the nato summit in brussels on july

11, or after donald trump's visit to britain two days later. the white house declined to comment. president trump has reversed course on his controversial policy separating immigrant children from parents across the u.s. border illegally. he signed an executive order directing homeland security to keep families together and house them on military bases. tomko has been under increase as intense criticism over the separations, which saw about 2000 children placed in federal custody. reaching anof opec oil production deal have increased after iran threatened to veto any agreement that would you raise output. everyone agrees it is time for the group to change course. >> i would be lying to you if i did not acknowledge that there are political forces.

oil has always been influenced by politics. tois a political commodity oural economic growth and internal forces within many , consumers at push for those policies to go one way or another, but in a decision we make would be based on fundamental facts and figures, supply and demand. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . anna: thank you very much, deborah. manus is joined by a guest ahead of another day of intense negotiations and inflow around

opec. >> anna, thank you very much indeed. i'm joined here with the head of commodity research over at citibank. good to have you here. what is important here? that the tone of communiqué or the number of barrels of increase that we now think is potentially on the table? wants to know how many barrels are potentially be on the market or if there are conditions that more oil would whether will tell us the market goes up or down. down up to 600,000 going into this. talk me through the size and the timing that the market can cope with, in your opinion. upthe market can cope with

to a million barrels a day. , imore than that is required think the market will remain balanced. there are so many wild card unknowns in the market. coming back with a lot of oil, how much more oil may be lost in the market? there's a sense that these wildcard risks are on the bullish side. the numbers suggest there will be a deficit going into the second half of this year. >> absolutely. we know that demand will go up in the summer months. if you look at the difference between the month of may and the month of july, refinery usage rises by 2 billion barrels a day. the market is going to tighten as we go into the third quarter. the question is, how much more is it going to tighten?

twos: donald trump sent out tweets. trade war wars, opec, etc.. talked about the special strategic reserves of the united states of america. if donald trump doesn't like what he gets here, do you think there's a risk that he could use some of his reserves? grexit it would be wildly political to do it right now, but if we were to see the spike there's something new in the market that is not being discussed. in crude, u.s. exports oil, all these things combined , andbout the same amount -- this year the

same amount is being added to the market. sortricane season of any on the gulf and that will require a release of strategic petroleum reserve barrels. one of the wildcards is whether the u.s. is a major hub for oil supply. another factor has to be considering the market. like --ne could be -- like of supply from the opec side. dissipating perhaps due to a freak of nature. >> absolutely. there is this concept, it is legislation. the united states has the that's what do you make of that discussion? antitrusthe old

legislation, it is absolutely not clear. they are separable issues. it has gone out of committee on the senate side. talkedsident has not about it. prior presidents have indicated they will veto it. the vetoes could not be overruled. now we have this big unknown in the market. there is a long way to go between now and having that much legislation enacted. said one conversation that has not been given in up airtime is the l year or potential failure of petro state. referring to those who have arrived here with no voice and no sentiment to increase. explain a little bit about that. why is that so important to the market? >> these are countries with -- enormousumes

reserves. era, the market 1.5 million1, barrels a day were taken off the market. that was the beginning of something new. ,ree new sources of supply including the u.s. and fans from canada were coming into the market. this year, these three countries to 2.5re adding up million barrels a day. so there's a new factor in the market. ofr time it can take care whatever the problems are that are merging. >> let's get a couple of levels out of this. have million barrels of additional supply. theet's forget about

instant reaction, that should add a good five dollars to the market. it is much less than the market moves at this time. we will see maybe a five dollars drop. we are at the fine-tuning stage and the wildcards are what's going to happen to supply disruptions going forward into the third and fourth quarter. are earlier guess sounding optimistic about the probabilities of getting a change. ultimate driver for opec, what do you make of his challenge in terms of adding supply but balancing the market? >> it is a double challenge. they could not do this by themselves. formed ad the saudi's joint venture partnership.

if they do not accommodate the russian requirements and if there is a chance at russia wants to put more oil in the market, they could. he has to balance what russia wants with what other opec countries want. so two very different kinds of consensus. manus: could you see a possibility of the russians towing it along? they probably would be riding on the saudi's. it has given them a say on something they have never taken a stake in before. things.ther strategic manus: thank you for being with us this morning. russia and saudi arabia did land football game, and russia one. you forgot one million that

says at five dollars drop in prices. find all the recent charts we have used and use them in your own research and analysis. analysis, live from two months before the expiration of the euros final crisis era bailout. more on that, next. this is bloomberg. ♪

manus: let's get to your business flash. ever, good morning. .> good morning

daimler has become the most visible global corporation to cut its profit outlook and blame it on the escalating trade tensions. the carmaker says pure chinese customers will buy were sated bins suvs because of tariffs beijing is slapping on autos imported from the u.s.. just two months after projecting higher profits, it said full-year earnings will be slightly lower than last year. sadie sedans and crossovers are made in alabama. tracking argentinian and saudi arabia and stocks have climbed in late trading after msci gave the two countries emerging market status. they will join nations including china, india, turkey, south africa,, and brazil. they are getting an index of great in the same week. u.s.y is close to winning antitrust approval for its $71 million buyout of 21st century

box entertainment assets. bloomberg has learned that the justice department could be set to approve the deal within two weeks. disney and fox agreed to sell assets alluding five spots regional sports network. that is your bloomberg business flash. anna: thank you very much, there from hong kong with the latest business flash. euro area finance investors are meeting in luxembourg. eurozonee agenda, the plan agreed earlier on this week. joining us from athens is our chief economist and head of research. thank you very much for joining us. let's start with what greece needs. debt relief, and if so, in what form should it come? >> the meeting today, the greek crisis has been the longest and deepest in the euro area and now the third bailout program is

coming to a conclusion in august. we're looking to see the debt relief, the one key item on the agenda that we will be looking at today, and the other is the relationship between greece and the euro area creditors in the post bailout period. greece's debtmake manageable and sustainable. i don't expect to see any haircuts but it's about how we make the debt sustainable and manageable in terms of the financing greece will have in your's to come. anna: in terms of the relationship between creditors and the greek state, we have been reporting about some kind of straitjacket and restrictive clauses they might want to apply such as binding targets or compliance reviews, giving the impression that greece will not be allowed to go with on way after the bailout. what are you watching for the

re? next? sovereignty after the bailout program expires in august. in reality it will be slightly different. there will be some post program surveillance. it will not be a continuation of the program, but we will still see a link between economic reform and solidarity. for example, we spoke about debt relief, continuation of the profits euro area central banks may on reebonz will be linked to this reforms that greece will continue to make. i expect to see perhaps some surveillance in the form of institutions coming to greece on a quarterly basis, issuing reviews of how they are doing on reforms and that will influence how the markets increase because

if greece is to rely on market financing going forward, that will be very important. anna: the greek government will making will want to be the po they can raise their own financing. the rest of the european union will want to suggest that this is a success story. has it been a success story, do you think? is important to them to present it as a success story, especially with parliament elections coming up in 2019 and so many crises going on in europe at the moment. we spoke about the plans for reform. it's important that greece is seen as a success story as part of the european project. it's been a very difficult time for the greek economy but it is acceleratingere is growth coming forward. employment -- unemployment is still very high and you have a

lot of immigration as well. use unemployment is especially high. greece is improving and having , havingitive signal some form of debt relief, some debt restructuring, moving some of their banks of the debt back that's owed to the imf and carrying lower interest rates will be imported to sin that positive signal but we are still far from greece being a success story. the economy is still facing a lot of challenges. anna: so a work in progress. thank you very much for your time. we will look for headlines coming out of that meeting a little bit later on today. manus, what else is coming up? manus: it's going to be fascinating what else comes out of this. agenda, anthe

,nnouncement from the fnd news all about the fed. then at midday we will hear from the bank of england. it really is a trifecta of central banking. then at 7:00 p.m. u.k. time, it's the bank of mexico. this is going to get interesting, because when you look at these emerging-market central bankers, one or two of them said it is tough out there in regard to the fed. i wonder what messages they will want to send. key: a busy day ahead, and interviews in relation to some of the central banking stories. the governor of norway central bank will join the bloomberg surveillance team, so -- stay tuned for that one. thomas jordan, we've heard about the state of the banking sector

this morning. tomas tatar will speak to us later on today. this is bloomberg. ♪

manus: good morning from vienna. i am in his cranny. this is "bloomberg daybreak europe." anna: these are today's top stories from the city of london. manus: the costs of a trade war. daimler is the first major company to fight trade tensions as it cuts its profit outlook. beijing reiterates its pledge to head back on tariffs. in vienna, iran's oil minister eases off on his threat to block a deal. the saudi counterpart tells bloomberg he is confident a compromise will be reached to raise output.

status upgrade. msci officially welcomes saudi arabia and argentina to the family of emerging markets baskets. etf's jump on the news. anna: 7:01 a.m. in london. it are 1:00 a.m. if you're in vienna. --:00 a.m. if you are in vienna. hurry themried to into their opinions. i am in the castle of the court. this is a habsburg castle, there courtyards,, 19 twice 600 rooms and a great deal of discussion is going on. venting, maybe it was a catharsis. we harried and chased him, he

arrived last night with a swagger and he said i have spoken to nearly everybody and there is a consensus, the need to move on. iranians -- arabians will go on to the jcc. arehe market -- we underestimating. those are the risks of the market area -- of the market. anna: the picture for equity markets right now, let's keep that in mind. 70 2 a.m. in london, ftse futures are in positive territory. dax futures a little bit negative and cac futures looking positive. we will give that a moment to settle down. it is interesting to look at the risk radar. the u.s.ferent to futures story. the msci asia-pacific down .41%. is this the start of divergence?

s&p 500 has been relatively resilient to the trade tensions. markets,he emerging even some of the european markets as well. we have seen european week this more than u.s. weakness but this is the asian story. 65 .51.price -- it looks as if the iranians might lay ball, might do a deal with the saudi's and the russians. i am not talking about football. the dollar down .2 of 1%. we are talking about the possibility of a deal on brexit. that remains on the table after what we saw in the house of commons. wilbur ross joins us after midday u.k. time. this will be fascinating because he was talking tough yesterday, talking about how there has been lots of talk to my he has been in china doing lots of talk and

trump believes it is time to take action. defending the actions of the u.s. administration. manus: it seems they have moved on a little bit. we talked about perhaps the possibility of doing a deal. i will quickly flash up one headline to you, this is one of your favorites which is the u.k. retail. warehouse,r phone, of 3 million pounds and a similar cash flow. that is around the consumer side on the u.k. thes going to come down to trade wars, they will have an impact as well on what happens here at the habsburg pallas and how -- pallas and held this group do with it. debra: u.s. president donald

trump is planning to meet with russia. that two has learned possibilities are either before the nato summit in brussels on july 11 or after trump's visit to britain two days later. the white house declined to comment. president has reversed course on his controversial policy separating immigrant children from parents who cross the u.s. border illegally. signed an executive order directing homeland security to detain families together and house them on military bases. tro has been under intense criticism from congress, the public, and business leaders over the separation. 2000 children were placed in federal custody. president trump: we do not like the site, the feeling of families being separated. they has been a problem for many years through many administrations and we're working hard on immigration. people have not dealt with it

and we are dealing with it. china is prepared to respond of -- to tariffs. a spokesman said the nation will use accommodation of quantitative and qualitative measures. at the same time, beijing has announced it will hold a trade summit with the european union on monday. u.s. commerce secretary wilbur ross joins us after midday u.k. time. has premise or theresa may fended off a rebellion from within her own conservative party to win a crucial brexit vote. the fight was over whether she should have the power to take the u.k. out of the eu without a deal. parliament toted have a meaningful vote on the way forward. 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 . manus and anna. thank you. let's get to david standing by with the markets. we see hang on every single word that wilbur ross says. we get a day of slight risk on. how are you? david: you know what is interesting, ubs as -- was out with a note as it pertains to asian equities. a 20% chance of a serious trade war. news out of daimler, being forced to cut their profit forecast. you look across the region, mostly downward about .4 of 1% as it heads into the close. in tokyo the bright spot, australia has been a hedge or a

haven this week. the index pushing toward 10 year highs. at the close, i should mention 200 is showing signs of being overbought. the rest of the region, you look at the -- you look at asia specifically, things are looking shaky. you look at the likes of the philippines entering a bear market. if your long equities, some fairly discouraging comments coming through from some analysts. the selloff we are seeing in hong kong is far from over, you get a sense that this risk aversion overall will continue. let's flip the boards and have a look at other things. we're looking at a stronger u.s. dollar overall. as far as the bond markets are concerned, sovereigns are mostly seeing offered appear here in the asia-pacific. back to you. anna: thank you, david inglis with the latest on the asian equities session and other assets. let's get to an interesting

story that hones in on the impact of the trade conversations that we have been having. time i has become the most visible global company to cut its profit on escalating trade tensions. it expects fewer chinese benzmers to buy mercedes suvs because of tariffs. daimler has manufacturing facilities like other carmakers. it said full-year earnings would be slightly lower than last year. let's bring in jodie snyder -- jodi schneider. what more can you tell us about this, it is fascinating to see a european business is the first one to put the flag in the air and say this will impact the bottom line. jodi: this is where it starts to get real. we start seeing things like this , the biggest carmaker to come forward and say that there are going to be implications. they are starting to see him petitions from the trade war. it's cars are not being

purchased in the numbers they thought they would be a few months ago because of this -- the tariffs. this is where we are starting to see some real impatiens from what is clearly an escalating trade war or perhaps skirmishes. is going global now. it is interesting, right here in vienna, the discussion in the rooms behind me is about the possibility of donald trump going wild and suing the sovereign nation. and how much deeper are we stepping into global trade wars in the last one for hours, how do you interpret wilbur ross's commentary? the: escalation seems to be word of the day. we saw china come out and say it was fully prepared, the were to read statement, to come back on the u.s. as it goes forward with its next list of tariff items.

we saw india jump in following the eu and coming up with a list of items that it is going to place tariffs on, as much as 70% including things like chickpeas. we are seeing this go around the globe now and many countries coming back to the u.s. and retaliating and saying also they will escalate further if the u.s. does. thank you very much. the job at bloomberg will be to work out where this should be used as a useful wrigley for excuse and whether this is the fundamental driver of problems businesses are facing. is here.ussell good morning to you. conversationoader than just the u.k. and the trade tensions we are seeing and markets. how is this impacting on your world, where are you finding opportunities as people fret about trade wars, trade tariffs,

and protectionism? iela: people are calling for yields to move higher because the fed is tightening. this is a timely reminder that something unexpected can happen which is introduced in a downside risk to growth. the data in the u.s. has continued to stay strong. we are starting to see signs elsewhere that growth has started to peak out, none more so than in the u k and euro area. we had president draghi talking last week.ide risk in his press conference. we may hear a similar thing from the bank of england today. anna: they are worrying about global trade. manus: good morning. the debate is this, do you want to be longer of treasuries at the short end of the curve on

trade war risks? this is the one of the things we have seen which is the repair penetration of dollars into shorter-term etf's in the bond space. would you advocate that, take on slightly shorter duration risk or do you think that will cap out bond yields? iniela: given the rise yields we have seen and you compare that over other asset classes, treasuries in the short term and in 10 year look as if they offer value. for us, we are still looking for 10 year treasury yields to fall to word to 3% by the end of the year. are is the place that we earning and that part of the curve. anna: this is not about the bond markets, this is about stocks but i wanted to use it to make the point about american exceptionalism as we have these trade work conversations.

just showing the outperformance of the s&p 500 versus emerging markets, european stocks, asian equity. it raises interesting questions about the extent to which the u.s. does go its own way here. on the treasury side, on the rate side, the u.s. has stood apart for some time. how did that develop? daniela: it certainly has and th question has been how long can every thing else stay behind and want the u.s. used everything else question mark that question is starting to shift around. it is now for how long can the u.s. remain so resilient while the rest of the world seems to be slowing down and topping out? other discussion that we had was with jay powell and sentra and other central

bankers. they are worried about the consumer, they are worried about the late effects of the potential trade wars. what does it do to the inflation story and the breakevens as we look forward because that is probably more pressing to the bond market than anything else. billion, 20050 billion, impact for breakevens in your view. is a tough call. we have talked about the downside risk to growth which come with the trade wars. as you say, it is inflationary. very difficult, you have this bad inflation and to some extent, we are starting to see the knock on impact of that. we have had the oil price rise and we have seen that having a knock on impact particularly in the euro area where consumption has been under pressure. pmi'sas come out in the

we have seen in the second quarter which is having a knock on impact on growth. while it is relatively bullish for breakevens, i think nominal yields should be relatively capped given the overwhelming impact on growth. anna: thank you very much, hsbc.a russell at we look to the bank of england which is set to publish its rate decision at noon u.k. time. we will think about what they intend to do and factor in the brexit conversation and all that occurred in parliament yesterday. this is bloomberg. ♪ ♪

>> every minister i have met with agrees that it is time for us to change course, and respond to the market, and be the

grouping of responsible, responsive producers we have been over the past 18 months. the market fundamentals have shifted. a reality that the market demands more in the second half than what has been provided in the first half. alternativesral we're looking for keeping the levels of the [inaudible] versus going up to an increase of 1.5 million barrels and anything in between. so companies -- countries are haveng at this, countries different agendas and that is the difficult thing. i think we have to overall of that look at the unity of the opec as an entity and make sure that we come up with a solution that will be good for everybody. >> we are cautiously optimistic that we will have a [inaudible] the sessions from

this morning, people are up beat, very optimistic. >> my russian colleague [indiscernible] that is most welcome. >> that is one of the most aggressive ones. toy're talking about 300 600,000 barrels. is that enough? >> i think the higher production will be. manus: it is a sport. chasing thesters, great and the good around the habsburg palace. those are the voices we have chased so far, the secretary general who was in fine federal -- fettle. we lost 1.6% and free trading sessions. is lower by .6 of 1%. there is still the fed and

trade wars hanging over the emerging market, even though argentina, do not worry, i am not going to sing that song. i know you will not cry for me. i will not cry for them. they are in play and so is the kingdom of saudi arabia. anna: if you seeing anything you are having to sing that one. let's talk about where we are on the equity markets. are tentative.es for daimler. blaming that for a lower expectation on for daimler. bla profits. keep an eye on the sector as a result. by futures point higher up .2 of 1% but the asian equity session was weaker, msci asia down .6 of 1%. let's talk about the bank of england. they look set to wait a little longer before following up on last year's interest rate hike.

that is after a run of mixed economic data. a good england announces its time -- at 12 noon u.k. bank of england announces its decision at 12:00 new u.k. time. the window is time closing for k carney, the unreliable boyfriend to raise rates in 2018. is a rate hike off the agenda for 2018? we certainly think so. if we think back to me, they were concerned about the slowdown in growth that we saw in the first quarter. they thought it was temporary. they were standing put waiting to see if that was the case. at the time, they signaled they thought that was temporary and growth continued to come in line with their forecasts. tightening would be necessary. since may, the data we have seen is mixed.

delving beneath some of the better data we have seen. the warning signs are flashing. the prospects of continued growth into the second half of the year are questionable. and for us, we think they have missed their opportunity to raise rates. the decision in august i think could be a close call. they could emphasize some of the better data we have seen, the likes of the implement numbers, retail sales, but the picture is not rosy. anna: not all rosy in the data. what about the oil price we heard about, where the oil price or production might be going for those at opec, how does that oil price feed in? because oil- peak can be an interesting factor in the u.k. daniela: it can. in terms of the inflation

numbers, in the next couple of months, inflation will be picking up what it is the bad inflation. it is eating into consumer incomes. cpr numbers will be taking up over the next couple of months. towardsing back sharply the target. if we do see increased supply of oil and the price pressure starts to ease a little, at the margin, that is positive for consumers in the u.k. i have this vision of mr. steven major and yourself walking around the hollowed halls i have this vision talkin. is that a non-true image? the story is very much consumption and the u.k. for the last -- in the u.k. for the last year has been very much way down as a result of inflation. that has come because of the

fall in sterling we saw after the referendum. we have seen the big impact that has had on consumers. looking of england is now for this rebalancing away from consumption towards trade and investment. we are not seeing it. now that we have got these added growth, the global eu relying on driving growth. anna: thank you. joining us here in london. you are set for another busy day chasing those oil ministers. interesting conversations you have been having around nopec and that is another interesting legal dimension and accomplish picture for oil. twos: that is coming from people who spoke to advisers in the white house. oil is down. the one factor that everyone is missing is a big supply shock to

the downside. henry has arrived, it is official. this is bloomberg. ♪

guy: thursday morning, good morning. welcome to bloomberg markets. this is the european open. we live from our european headquarters. i am alongside matt miller who is in frankfurt today. i am here for a conference on etf's. most asian stocks declined today , battingjapan was up back trade worries. european futures pointing to a positive open as well. the cash trade is less than 30 minutes away. ♪ guy: