anna: good morning from bloomberg's european headquarters in london. i am an edwards. area: i am manus cranny this is bloomberg daybreak: europe and this is today's top stories. anna: china's trade warning. u.s. tariffs on its exports will backfire hurting americans and damaging the world economy, they said. we are live in beijing. ecb uneasy. some policymakers are set to see a december 2019 rate hike as too late. could the central bank move s in a september? we will you the latest from frankfurt. david davis is rejecting the customs plan while jaguar rat -- land rover warns a bad deal will be expensive.

anna: good morning, thursday morning in london, it has gone 6:00 a.m. and this is the picture on the equity markets in the asian session down by .6 of 1%, underperformance coming through in china. the shanghai composite falls 1% after its lunchtime break. a focus on how chinese equities are performing. nine months across the asian equity sphere and interesting debate about the imposition of trade tariffs we expect to see from the u.s. administration tomorrow. how much of that is in the price globally and how much of that will be news to the market to factor in? in terms of the tiny china has said they will not fire the first shot in the trade war. the u.s. may detect a different view of where things started. let's look at the chinese

currency. we are in that range but we have seen the chinese currency slipping not like monday but it has slipped despite the strongest fixing to its feeling reference rate since october despite efforts to the contrary. it has slipped a little. the euro dollar is flat but that was not the story yesterday. we saw the euro getting a boost, policymakers and the ecb, a little uneasy with the assumption that an interest rate hike will not come until december. the euro moved and some in the market told forward their expectations for a rate hike. manus: all central banks want everyone to weigh the risk. not when the come back and say your mispricing the situation. the question, you did dollar you want, it is easing, has the pboc drawn a redline line in the sand? they are saying they will not blackmail and that trade wars

are a bad idea for the world. nine ofed line said -- the asian currencies that could feel contagion from a trade war from a cascading down and the yuan. we have this stable yuan but investor pessimism on nine asian currencies, this is the october high, it would -- we were turning off that. the question is have the pboc contained the cascading of the yuan and therefore is the contagion narrowed when it comes to the rest of asia? bank of america merrill lynch have no it -- narrowed the asian fx forecast area the timeline draws we're -- near. the singapore dollar -- this is a moment of rest by. the question now whether it will injure. the rhetoric from china setting

the global risk stakes. anna: reiterating those lines around trade and focusing their mines and what we expect to hear from the u.s. administration around those tariffs and later chinese retaliation. let's talk about u.s. futures. it was the public holiday yesterday so it was the fourth of july. perhaps we have not got everyone in the market back to their desks yet. no great direction coming through. we get minutes from the federal reserve later on. something else to watch. poland'seaking here to investment and development minister after 8:00 a.m. something to watch. let's get a bloomberg first word news update. juliette: thank you. byompromise brexit proposal theresa may that aims to unite warring ministers has been

rejected by her chief negotiator. david davis is writing to her telling her the new idea for how customs should operate after that the divorce is unworkable according to a person familiar. his move comes ahead of tomorrow's key meeting where may well try to force an agreement on what the u.k. wants from the eu trading relationship. have's new government will tax cuts and a universal basic income in its first budget in a move to show markets the coalition is not backing down from its agenda. thefinance minister said measures need to go hand-in-hand to change the system and support economic growth. he said the time may have come for an agreement at the european level on excluding some investor -- investment from the deficit calculation. uneasyb policymakers are that investors are not betting

on an interest rate hike until december 2019. sources say that a move is in the cards september or october. any decision will depend on the economic outlook. u.k. police say to more people have been poisoned in southern england with a nerve agent. the same substance british authorities say was used in march to attack survey scribble and his daughter. the latest victim fell unconscious around nine miles scribbskripols were. trading resumes later today with futures pointing to a fairly flat open. here are some pictures from our exclusive coverage of the bob's -- boston pops fireworks spectacular.

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 . a fourth day of losses for asian markets. we are seeing weakness in japan down over 1% and hong kong and china being sold off. australia's market supported from the big weeks. where counting down to the tariff and we have seen weakness coming through across the board. asian stocks holding at those four-month lows and copper futures plunging and shanghai. let's have a look at the stocks we are watching. we are hearing that samsung -- south korea may force $13 billion worth of sam some stock which is going to over flood the market. lawmakers are trying to restrict the control so it would decrease the lee family's ownership of samsung.

ceo fromaring of a new the company but it is an internal higher. domino's pizza down by 9% amount cut from credit suisse cutting them to underperform from mutual citing higher labor costs and the government inquiry into the franchise industry in australia. a lot of pressure across the board. australian and new zealand markets are higher. anna: thank you. the latest on the asian equity session. -- itsays it will not will have to fight back if the u.s. goes ahead and impose a -- imposes tariffs. another government official said of tariffsposition on chinese exports will not only hurt china but the u.s. and the rest of the world. the majority of the goods are produced by foreign companies including american companies.

joining us now tom mackenzie. this is the latest, this is the latest reassertion of the messages coming from china overnight. we will not fire first in the trade war in their words. tom: absolutely. 's lightning -- slightly heartening of town but the rhetoric seems to be sharpened up. the chinese said we're not going to fire the first shot but we will fight back to protect our interests accusing the u.s. of starting a trade war and as you that of theseout tariffs on $34 billion worth of chinese goods, they would eat effecting $20 billion worth of goods area the chinese also pushing back against what they said is the threat of the protectionist sentiment coming out of the trump administration, the impact that is having on the global trade picture.

no sense that the chinese are stepping out of the ring ahead of this fight over tariffs. manus: hundreds of -- how does the rhetoric change the dynamic? it is very strident, it is warming -- warning about the global ratifications an. and the chinese have a domestic audience to appeal to although they are a one-party state. they do not want to be seen to buckle to pressure from the u.s. and from the u.s. side they are looking ahead from those midterm elections and both sides are digging in. the u.s. would counter by saying some of the soft diplomatic talk from previous administrations, the u.s. has failed to change the behavior of the chinese, they're working through organizations and that has not worked. to tiesay the u.s. needs

up and work with others are -- with others. it seems both sides are digging in. what we are expecting to see on friday is the u.s. imposing the tariff and china will be -- retaliate quickly on the back of that. trump has said he is considering additional $200 billion worth of tariffs. you.: thank the latest on the trade wars from china. you alongside us this morning. to what extent as a bondman are you worried about global trade wars, to what extent does it price into your world?

stephen: it is good news for the rates market. for the so-called safe havens and i am thinking about treasuries and maybe bunds. it is bad news for credit. this starts with investment rate credit and spills through into high-yield and emerging markets. it is a mixed bag. clearly, companies are the ones that could suffer if margins are revised downwards and we have to reassess what the earnings outlook will be. so maybe a repricing is appropriate. there is an asymmetric risk to credit. what that means is if the spreads are tight historically and you have these shocks coming , the spreads will widen. recent --ng are most reading your most recent research, the critic crunch has taken hold. there is not much mention of trade so i wondered if that is

because it is not material enough to factor into the base case. i have been focusing on the triple wham! he of tightening, financial conditions are very high. janet henry in the global economics team focus on the triple shot which is the financial conditions about which i am talking and trade. and oil. if you put those three together some of the more bullish growth forecasts we have in our global economics might be heading downwards. bet -- the economic data may ends up being weaker than expected. the financial markets have been in a way responding to this all year. how many things have we discussed in the last six months?

vix,ility, reverse of volatility on the s&p and every single event among the emerging-market. i think those are common denominators. it is the tightening of u.s. financial conditions. the threat of trade war is not good news for risk. anna: manus has that chart. hoped but what we got was we are ahead of the pack. let's keep this yield curve up there for our viewers. this is the core point. havens are bid. you have gone to the lower end on treasuries but it is the two-year paper that we have seen a ratcheting in terms of the shorter end of the curve. you are calling for much flatter yield curve. end has doneong nothing. the forward rates i am looking at, it has been stuck between

three and 3.25. there is nothing much to say. we are lower than that now. the story is the rate hikes and the upward path of the two-year yield. the yield has been going up while the fed has been hiking rates. nothing special there. that is normal. the yield curve has been flattening which is normal. you see for the fx people, to them the short rate is the one that matters. the higher short rates propel or support the dollar rally. and the dollar rally has its consequences on emerging markets or for emerging markets. to me, the story is consistent. tellsattening u.s. curve you the structural story in the long and -- end. we do not believe that rate hikes will continue and focusing on structural issues like that,

demographics, technology. the long and is doing that and the front end is priced to where the head puts the short rates. anna: what is anchoring the long end and stopping rates are moving higher question mark is at the things that are driving the slow-motion credit crunch, blowups or isty it the global context, global central banking, policy being loose and there are lots of global buyers. steven: it is both. the excess debt means that growth expectations we would have had in previous cycles do not apply because cash flow is deducted from investment or and it is deflected toward saving. the assumptions in the gp -- gdp calculations are not right when you have to add in additional debt servicing costs. that is one way to bring into life the debt overhang and demographics mean that old people hang around a bit longer working.

they do not need as much money perhaps and that will help, there are many other things in the demographic story. labor has not done that well compared to capital in the last 10 years. is the mostong end logical. to hang around for a few more years, i hope you do too. --have mentioned steven: i was thinking about you when i said that. manus: i am like a boomerang, i keep coming back. financial conditions, we are in a slum oh train wreck, a slum oh low-mo credit crunch.

this is what tight financial conditions really look like. a long wayu we have to go to get as tight as we did ins 2008. teve -- in 2008. 1966 is the one, i am talking about the famous credit crunch along the time of the vietnam war. unemployment was low 4%, england won the world cup. you have to slide that one in. way, the slow-motion credit is a higher probability. canreality is that people look back in history and try and find precedents for what is happening today. there is not a precedent for rate hikes shrinking balance sheets and the rejuvenation of wars, high oil

price, all at the same time. the list is getting longer. anna: you wonder how much the pace makes a difference, doesn't make it easier to deal with? it would be incorrect to focus on the interest rate and look at previous cycles and the reason i am talking about slow-motion is we have had 10 years to get where he are of the qe and unconventional monetary policies. it would be reasonable if we go to normalization which we should be thinking about a decade pace. i think this creates fantastic opportunities. meetings and customers say what is the trigger, what is the piece of data that makes your right and i say looking back over the last six months there have been any number of events that are consistent with the story. we are describing it, not forecasting it. anna: thank you very much.

your thoughts. staying with us. threatening investments in the u.k. and we bring you the latest. this is bloomberg. ♪ ♪

anna: this is the berg daybreak europe -- bloomberg daybreak europe. the msci asian-pacific down by .7 of 1%. weakness in the chinese equity markets the story there. david davis has rejected theresa may's customs plan calling it unworkable. he -- this comes ahead of the meeting of ministers at her country retreat on friday to try and reach an agreement on the u.k. trading relationship with the eu. and warning against a bad brexit

deal. without frictionless access to the eu, investment in the u.k. would be jeopardized. do you want to deal with the politics here are jump to the data? i have a chart that shows how gilt yields moved. what is in the driving seat? too complicated. so close to the key date and we still do not know and the people who need to know do not know either. what can i say? fiendishly complicated. there is a lack of clarity. that is convenient. i can ditch that one. it is not good. you just pointed out, there has been some upside surprise on services and that would embolden the call for a

rate hike and the probabilities have shifted on the contract. i imagine that probability has shifted. the gilt market will look through the next rate move because it has to look at 10 years of cash flows for the 10 year bond. the 10 year gilt has been stuck in this 1.1 21.5 range for a long time create we are forecasting 1% for the 10 year. we may not get year. the yield is not going to go up. canuse of the data i imagine there could be some upside surprises without knowing this on retail. without knowing, just observing the weather, the football, and so looking -- some things will do well in retail and others will not. money onare spending drinking and entertainment but not much on shopping. manus: if you go on to tip talk -- tictoc, there is a lovely

two. about making a cup of i know you like a little bit of foot all is well. your asset management team says gilt is on the track and aberdeen investment said they are tactically short. what makes you convinced that 1% ?s nearer on the morning card why is it the number, what takes me there? steven: i am looking through the near-term noise. some of the incoming news would suggest it is not a good story for guilt -- gilt. i am trying to look through the next few months and that is what you have to do as a investor. whatever you want to say about the u.k. and sterling, with gilt , you will get your coupon page and you'll get the redemption.

manus: stay with us, we have more to talk about, foot all and bonds. what more do you want on a thursday? ♪

>> good morning. good morning. it is 6:30 in london and it is pretty flat with the dollar against the yen and there is a yuanle weakness in the ua despite the markets focus. let's have a look at some of the things we're look and add. at.looking the fed raise their benchmark

this year and we will get to know the details behind thinking today. manus: indeed. the guest host has pushed calls on treasuries down and is talking about a further flattening. z,e austrian chancellor, kur briefs people on his european union presidency and mark carney will speak in newcastle in the north of england. what has he to say for himself today? particularly important thing, geographically, when you going to the rest of the country. nejra. perspective is >> thank you. you see the equities are lower shares are doing

ok, but there is risk with investors looking ahead of the deadline to impose the tariffs on china and we heard from the commerce ministry today and did not get a lot of detail, other first in theseng trade tensions. in terms of timings, that is all up in the air. we see the onshore and the offshore flow and we take a look and have this, despite the daily october and we are this underperforming on trade tensions. this is a high for asian

pbocncies and there is the and a little bit of context we are looking at the japanese bond market and we are seeing andyields at the lowest japanese investors look at what they favored with the european ands that are coming back the bond yield has broken a key level on the downside with the basis and you are seeing oil and theittle bit weaker commodities had their worst anth in june and they are now bnuy across the spectrum. >> thank you very much there. ecb policymakers are said to be uneasy on the rate hike and

sources told bloomberg that a and is in the cards now this is towards the end of yesterday's session with a lift itthe rates from 80% and moved the markets a little bit. carolyn, it is good to have you with us. what are the policymakers saying? it is quite a ways off. what could we know this far out? >> it is a good question and let me backtrack a little so that you can contextualize what is going on. we had the plan for ending the purchase towards the end of this year and they paired the announcement with a pledge to keep the interest rates low through 2019 and that wording is

vague and people have taken that with a lot ofing investors prizing a rate hike policies are not comfortable with that. a lot has depended on this and they want to see september and october in the cards. >> bankers do not like it when risk.is not to weigh there is the deposit rate and not just the headline rate. there is policy makers and

they will be equally gradual when it comes to raising the interest rate and they will keep a close look on the markets and see how actions impact things between now and next autumn and next winter. a lot can happen. >> a heck of a lot can happen. thank you for being with us. guest postack to our this morning. andhen, you made a big call the market interpret

to be with the reconsidering of the pricing in the sources we speak to? >> the ecb has a forward guidance and has a policy of theyng the market and accuse the market of being wrong or right. this at the start of the year with everything looking great with the incoming data and the marco was priced for a tightening cycle. it was good and it was exuberance and we now have the and the pmi around the world is little bit weaker

think is reasonable to they could be lucky to get rid of the negative rate in the next few years. 1.2 or 20 them was basis points and this gives you 60 basis points as they rate and that is where the market is and it isn't wrong. has two.t like the ecb >> we get the more hawkish message towards the end of 2019 and you would have to have a lot ,f visibility to see this data but you see the bond yield. why do you see the ad a as weaker? and let'sas 120

way withhis going that the data not reflecting the there ishetoric and the trade war threat that could ands hawkish as you'd like that is what the market is doing and a goes longer. the inflationo cycle for europe and do you think you can take it a little it just globally or is europe? >> there is this and it andldn't be a surprise

there is the energy and the writescosts and you are and it is priced in with a havef inflation and we been moving towards the target up to 2% target. breakeven andhe factor in thet forecasts government bond markets and it was important with a valuation.

>> there is a relationship that germany has with the of the par the world. >> you have the risk of the look throughnd you the noise and, if you had the tariffs, you would get these going out for the next year. what about the year after? it drops. conditioned in a transitory way and what if that was wrong? i was worried about the and itonary consequences

andeighs the superficial that is where the smart money is. >> we will wait to see. the head of fixed income research joined us with his latest thoughts on the bond market. bloomberg users can interact with any of the charts on the program. the recentwse on charts and save them for your own research, as well. >> they are high this morning. answer -- aree not the answer. that is the exclusive interview coming up next. lower ahead ofre the imposition of tariffs on exports and we will bring you the latest there.

price or havehe we yet to price it in? this is bloomberg.

thet is the morning after fourth of july celebration and it will be a rough and tumble 24 hours. the stocks are finding a level with the chinese warning that they will not be blackmailed and warned about global trade. >> thank you. a deal without access to the european union. ofe than 100 billions worth investment in the next --

they said that that will cut off a by $.5 billion a year. billion a year. shares that lawmakers look to restrict over empires. samsung is facing pressure to sell holdings as president moon bans over 3%l that of his assets. , amazon has gone conventional with a holiday toy catalog. be handedd guide will out at whole foods and the move is part of the amazon push to incorporate traditional retailers into the business model. looking at a possible

theyr or alternative way will the relationship. sources say the two want an agreement and the options include setting up a holding company and merging the companies as a single stock. that is your bloomberg business flash. >> thank you. china has slammed the impending u.s. tariffs and says that they will harm america, if they pulled the trigger as planned. we have heard from the trade and tourism and investment manager. we are talking about trumps there istion and

-- ntially we have seen china indicate dynamic, ifand this it comes to pass, is not good for global growth and we will see an impact from that. the extent to which that is mitigated or we feel the full force of it, we do not know and only time will tell. iom australia's perspective, want to diversify all the trade interests and that is about the trade barriers and pursuing high-ambition and good quality. this week, i have talked about the regional and comprehensive economic partnership. >> let's talk about that. seems that the path to an

agreement by the end of the year is clear. do you think it is optimistic? >> i don't think it is. i think it is reflective of a mood in the room and we have worked closely together with this and we are comprehensively invested in this partnership. there is a general view and it and we need to redouble the effort by the next round for ministers.

>> thank you. fromdespite the warnings other countries about the effects of a global trade war, investing a chinese goods and they say they need to invest. with us is martin. thank you for joining us. by "the rest of the world needs to up their game ? game?ir " wto is not fit for purpose and we have had a failure to recognize that act and reform it. the european union, japan,

america, they came together to form a trilateral to do that. they would like this fact to be something he thought is not the is that the issue america will impose the tariffs on china and this is a very small number that we should put into perspective. this is an aggressive tactic and not a trade war. not ais aggressive, but trade war. >> why should other industries ,ork to take on china on trade rather than suggesting that they get real on china?

the europeant done deal and the trade is thisgh those purposes and is -- when china joined, it was $1 million and it is now 12. povertys eliminated during that time. they are increasing because of the access. the issue is that they do not take the same market economy status as the western countries. the european union is very much in favor of a lot of the reforms that the americans want and they

are doing it behind the door. >> what could be offered on this as a result of the current trade move themhat would away, in terms of rhetoric? >> there has to be a dialogue and this is a major part to step in. they cannot be just the western alliance. reform is the core part there is this status

in the wto. not turned up in theington yet to deescalate issue. we know that the chinese will not impose tariffs until after america does and we could easily have this case where trump steps back and we don't know. we will just have to see the situation carefully. the negotiations will take place. >> there was a general acceptance that there was needed and he hasre trump talked about it for a long time. it could be the pace that was disappointing. the wto conley was smaller than now.

is this a status and nonstarter? is what the european union wants and what japan wants and china would clearly prefer to be a developing economy and do whatever they have been doing , they have to take the market economy status. and theuld up the game thee facilitation act was first multilateral deal in years that it is means something that >> it should look at. today is not fit for purpose. >> thank you so much for joining us.

we will be speaking a little later on to the investment minister. it is an interesting conversation, given the recent developments there. interview.ive more on the markets when we talk china and trade. this is bloomberg.

>> this is bloomberg daybreak europe. >> live from european headquarters, these are the top stories. >> the trade warning. tariffs will backfire. we are live in beijing. the ecb is uneasy and some see the rate hike as too late. could the central bank move as

soon as september of next year? we will bring you the latest. rover warns that a bad deal would risk investments. >> this is bloomberg daybreak europe. the numbers are coming through the german economy for the month of may and this is the year on year number. the estimate was for an increase in that factory order number comes in more strongly than anticipated and the manufacturing orders number rose. estimates rose and suggested

a much-awaited pickup and it is something the markets may find very comforting. we will see how they react off of the better than expected journey. and theyle bit of news are doing a share buyback timeam and it comes at a with glencore under a new probe that came to light the other day youwiped out as much as could be slapped with, in terms nigeria and that was and venezuela and this is the collapse inwith the

the share buyback. we are into the trading week and withe tell you about that a loss of over $5 billion worth in the past trading days. to dos the opportune time the share buyback. potentially the trade tariffs coming into play. finishing the says you can he get the trade off the table and it is renegotiated with the true negotiations from europe and china and the rest of the world. boon of equity

markets and, for the moment, we are holding in a little bit of breaking is there more news to go? 3/10 of ap by percent. better than number -- better than expected with the german growth story. andhe assets with the deal they plan to finance this with cash and bridge loans and do not plan the equity finance.

familiar with located is try merrily in the north and the south of north america. europe.e businesses in those reinforced that we are watching this for the imposition imports and we will have to see if it is priced into stocks. this is where we traded and we mentioned the reaction with some reporting the ecb.

a quick line on this side of the business and it looks like there will be a little bit of a drag on the numbers going forward. ais increases the profit with big rollout. this on the margins and they sell the data ahead of there is a little bit more of a breakdown. is the bond markets and the equities are little bit flatter. there is the slow mo credit crunch taking place and he put

up the new levels. there is the flattening of the yield curve and you have seen this higher and it will continue. there is the flattening of the yield curve and this will continue down lower with the rating coming through. you mentioned this and we have the whole story. we had that risk in the market. and thatthe pricing she one >> it comes better than expected and reinforces the hawkish via.

man no and what does he have to offer us? that and we have no doubt on what we can expect from trump entrée. let's get the update. >> thank you. the rejection by the chief negotiator. david davis has written and said that the new idea on how the customs should work is not workable. looking to reach an agreement on the relationship. some policymakers are said to be uneasy that they are not betting

on an interest hike and sources tell bloomberg that a movie is in the cards for september october next year. this climbs from 70 in the report. the u.k. police say that two more people have been poisoned samegland and it is the substance the british authorities say was used to attack. victim -- after yesterday, trading resumes and there was a fairly flat open. in case you missed it, here's the coverage of the boston pops.

the tictoc and you can find more stories on the bloomberg. closing down the session and still a lot of weakness coming through in china. australia is looking good and the indexes in the red for a session.nsecutive there is about $13 billion in this market and we are talking about telecom malaysia and

analyst turned out to be bullish and this is in honor of all the minimalist rings. of fresh that a lack details is a worrying sign. >> you better get out there in singapore. clock's with the exports. overnight, they said they would not bow to threats of black male. to retaliate immediately after the ax. how does this frederick from china change the dynamic ahead?

they reiterated what they said before. >> there are the fairly harsh words and terms for this and theythey said was that thed respond to protect interests and this would be there is thed and manufactureduld be and some of those films are american. painting theis

idea the u.s. is an outlier and i don't think it changes them digging in ahead of the tariffs .s the clock ticks down >> yes. this clock is ticking. let's see what happens with the u.s. and the chinese side was up you caught me without my glasses and, without my glasses, there will not be a lot of reading on this said. , is the asset manager. great to see you. where do you want to be to win the trade war? thee do you want to be in back six months of the year, if this really escalates? >> it it escalates, you want to go to the assets. and youery difficult

want to look at assets or strategies with a low correlation of the traditional equities and the bonds and it isn't really the end game. i don't want to belittle the severity of the situation because the stakes have risen. we have to remember that this will escalates and we know that they market finds it difficult to press with this being difficult for us to guess where the outcomes will come out at. you have to number the global anders are pro-business know that a full-blown trade war is not in the best interest of everyone. they also know that politicians

bringo use tariffs to countries to a negotiation table. do not actually stop the ongoing talks or the continuations of them. you look at the combination of the stronger dollar and the weaker stock harkin and it isn't optimal for trump. his power is in the unpredictability and he can change on a dime. we saw that with north korea. and are having photos taken he is and afraid to take a change of mind. >> what is the upside to the equity markets tomorrow? there is an interesting question about if it is priced in. tariffs on billions of

tariffs may be material, but -- >> there is some kind of youement on the table and have stock markets up and you have bond yields up and the dollar is down. >> there is the global head of fixed income and there are tightening and growing conditions in the credit crunch. do you buy that erie? they say that the bonds will drop and the treasuries will drop and that the curve will continue to flatten. suggesting that things are getting tighter.

the index here. what is the biggest risk from the tightening? and itextrapolate that with a credit is a shortagere of funds and it can come in a there areways and most market watchers who and it was acrisis standard deviation event that we have notvent and

seen a big buildup of him recovery thatthis is suboptimal and i think the next recession will be mild and brought across various sectors. >> they say to draw the parallels with 1966. that is beyond the memory. we have the equities on the far there is a couple of baskets with considerable seen thisnd we have and it is time to jump back in. >> we don't know where the sin. predict you cannot

part of this was profit taking and toys 17 was a fantastic year. we have the emerging market exposure with emerging market hero-2-0this is a o-to-zero story with the trade talks going higher. >> thank you. the fed minutes or out later today with investors offering insight into the meeting. we describe what the markets are looking out for. this is bloomberg.

>> welcome back.

37 minutes to go until the start of equity trading. what do the futures tell us and what do we expect to see? unshaken when it comes to europe. bond guru and the head of rate. andcurve will flatten futures are coming back. left for ay space helicopter in the hamptons all stop we see the equity markets and clinging on the green with china responding that they will not be threatened by blackmail. that is the line from the chinese. will he change on a dime? will donald trump change his mind and say no more tariffs

russian market that is a possibility. >> it is a possibility. what is the upside for risk assets? with the minutes out today and need had a out, the economy let's geter stage and back into the conversation. ?hat are you looking for are you looking at how much the fed is thinking about trade? rates and itises was totally expected, but the raise of growth and inflation forecasts with the possible overheating in the economy and inflationary pressures.

on trade, the central bank will thatgnizant of this fact it impacts business making and things like hiring. , there wasd curve the atlanta fed member and he said it was my job to make sure the curve doesn't invert and it is interesting for the fed to make that kind of a statement because it tell us you how aware the market participants are about this yield curve and the reliability as a recession indicator. said was the things talk about the dollar and the ascendant dollar.

this seems to have ended for now. continue higher with the u.s. economy blitz on fire? quality on the and there is fears this that is more sustainable. >> ok. multi-asset manager and we are counting down to this ontrump imposes tariffs. what are they going to say and intimate?

>> we will give you this on the front and we will focus in on some of the corporate's. interesting in europe. that is it for bloomberg daybreak. this is bloomberg. this is bloomberg. retail.

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guy: thursday morning. markets,o bloomberg this is the european open. castrated now less than 30 minutes away. -- cached trade now less than 30 trade noway -- cash less than 30 minutes away. ♪ guy: still falling. chinese stocks continue to drop. terrorist -- tarrifs coming into effect tomorrow.