closed on friday as a result of all this talk about whether theresa may could be ousted this week, or could she stepped down. we are expecting a negative start to the european trading week. expect to see these markets down by .3%. over in the united states on friday, we saw extensive selling as a result of concerns about growth, the french and german data, the u.s. data, inverting the curve, but we are seeing that curve inversion and along with that lots of concerns about the global growth story. a week session in asia feeding through into europe and we are seeing weakness coming through. better than opening we anticipated by 1.1% at the very start of the trading day.

we are seeing weakness across these european equity markets. let's have a look at the sector picture and see if we can get any clues. areumer discretionary items certainly seeing the heaviest selling and that might be expected, financials, health care, staples, energy, materials all to the downside. it looks fairly indiscriminate and if i look at the stoxx 600 in the number of stocks that are trading weaker, 430 out of 600, only 77 stocks to the upside. let's have a look at what we are seeing on the individual stocks. on a great deal of individual corporate news flow. in terms of the individual stock movers let's have a look at what is taking us higher. one by up -- one up by more than

is one of the big standout movers to the upside. on the downside, lvmh is a big fall are, down by more than 8.9%. about chineseking demand perhaps that is where the luxury names get caught up. there does seem to be a luxury move to the downside and we see wirecard is one of the fallers, and we still see this big weight from lvmh coming through, sap also down by 1.1%. a number of corporate tax into the global growth story leading the charge lower for european equities. the european market opening lower as concerns about slowing global growth persist. j.p. morgan chase -- we spoke to the chairman, and he says the economy is going through different phases of recovery.

>> this system is no much stronger, especially the financial system, the banking system, and the like. the systems are much stronger and therefore like always you have a cycle, but those cycles are not between recession and boom but the different phases of economic recovery. chairmanorgan chase speaking to us in beijing. joining us now on set, the head of u.k. rate strategy at hsbc. good to have you with us. you are the perfect person to speak to today when we see what we have seen in the 10 year yield curve in the united states. do you think that inversion of the yield curve is significant for where we are in the global cycle? >> well, in the past we've seen numerous occasions where the yield curve has inverted, some

of which preceded sessions and others which haven't. for me, in isolation it is not that improbable given the global but i think in conjunction with the moves we are now seeing, we kind of move into a scenario where bad news is good news for equities and bad news is also bad news for risk asset markets. if you go back to the early part of this year where the fed started to turn more dovish, that was taken very positively and risk markets reverse what they saw in the fourth quarter of 2018. that thingsnow is are perhaps worse than we have previously expected and maybe the fed know something that the market doesn't and you are seeing the yield curve inverting in the treasury market and risk coming under pressure. >> i have a chart of that u.s. 10 year yield dipping below the

three-month for the first time since 2017. i want to come to you with our mliv question of the day, -- will the u.s. yield curve recession signal be valid this time? as quickly as we see yield curves invert, we quickly see that followed up by lots of people saying it predicts more recessions than occur and the length of the time is often quite substantial -- what are your thoughts on its predictive capabilities? >> i think it has to be viewed in conjunction with the response of risk asset markets and certainly it is a big concern, but one thing which is different this time around, the fed reaction function has changed somewhat and they are very fortunate in the sense that inflationary pressures and particularly high end we have seen being proactive and seeing

how the data rolls and on our forecast we are expecting them to be on hold this year and to cut rates next year. them toe in order for prevent a recession, they are taking to ease off the terms of monetary tightening, which may be had a bigger impact already that they have previously anticipated. >> we heard charles evans talking to rishaad salamat, talking about how the fiscal stimulus is waning and could be back to trend growth. how gloomy is the data for you versus gloomy data? in terms of coming in below expectation >> below foroup has been an unprecedented 350 days -- do we all just expect too much and this doesn't tell us the end of the world but things are not as good as we hoped they would be. >> if you think back to the last part of last year where you had

the soft data gives the warning centrald then you had banks sticking to a neutral and dovish start, the data continued to disappoint. we have downgraded our forecast enough, but that is not priced into the market, you have a decent chance of a rate cut in the u.s. priced in and further easing for next year. the question is one of valuations, which are already pricing in quite a gloomy outlook. >> thank you very much. daniela russell, head of u.k. strategy at uh we see. next, we will bring you the stocks on the move so far this morning, including reports that a carmaker has discussed a tie up with fiat chrysler. m&a in the auto sector. let's talk about that next. this is bloomberg. ♪

♪ >> welcome back to the european open. 10 minutes into your trading day . let's get a look at the top stories we are focused on. the wrong picture is one of selling, a bit of m&a news as well. >> a rare respite from the global yield story. individual stores of fiat chrysler, and in a news --

according to reports fiat chrysler has been approached for a merger but they rebuffed those offers. the idea that they might get an even higher price is sending shares higher by more than a percent. are widely suffering which is impacting the prices of commodity companies, rio tinto down a half percent also impacted by one of their plants, certainly hurting shares. story today, m&a shares higher by 7.5%, the biggest gain since 2018, holding on to this level. we received a $3.4 billion cash deal for a takeover. >> thank you very much. bucking the trend compared to the broader market. let's talk u.k. politics. u.k. lawmakers could be about to take back control of brexit. parliament votes today on a

plan to seize the agenda. theresa may is denying a plot to oust her. niall ferguson told bloomberg it is only a matter of time before she resigns. >> she really is the dead woman of phrase usedgo by the former chancellor george osborne, she has to go and in my view she should have gone weeks ago. >> let's talk about what this means for market. daniel russell is still with us. away from the politics -- you can't get away from the politics i suppose, but away from the day-to-day politics, how do you plot a course for gilt? do you focus on demand for pension funds, and the fact that they need this long-term investment, or do you focus on the day-to-day politics? >> it is hard to completely ignore it much as we would like difficult,this very and to look through the noise,

the big thing to focus on is what is the bank of england's reaction, and don't underestimate what is going on in global bond market, because those will be the key drivers both in terms of where the outright level of gilt yields go after we get some sort of brexit clarity and what happens to the shape of the curve. >> do both of those point lower yields for the u.k.? inwithout a sustained rise global bond yields i think it is difficult to see them rising even if we have a long extension period that brings relief. it is difficult for the bank of england to consider raising rates, even in that sort of scenario. growth has obviously come under pressure in the u.k., inflation is already below target and will fall further/ now that global central banks are shifting to an easier monetary policy start, it gets very difficult for the bank of

england to be raising rates later this year, even if there is a deal or a long extension. >> lydia thew me ask you buy the underlying performance of the u.k. economy. this chart gives us a sideways look at it. these are the two stars that exist in the u.k. housing market. on the one hand we have the rise and fall of the london market and in the yellow we have one yorkshire,his is making the point that while london has risen and fallen other parts of the country has been quite stable. does this tell us something important about the u.k. economy in the face of this brexit uncertainty? >> there are two metrics going on in the housing market but if you look at the picture as a whole, certainly when you view that combined with other indicators of consumer confidence, which have been quite weak, the story is difficult in terms of the outlook for consumer spending

and one of the things that the bank of england will be paying particular attention to, if you do get some clarity, is how much investment and consumption responds to any kind of improvement in the political outlook. the housing market potentially as a whole has the potential to be a continued drag on consumption so we may not see the bounceback connectivity that perhaps we are hoping for. >> how vulnerable are gilt markets typically to the day-to-day workings in westminster? if we do see a change in prime minister, if we see a general election, if we see a referendum, do we typically see gilt markets move around the story substantially or very much at the margins? >> over the last few months, i think as a whole the foreign exchange market has been much more volatile.

the bond market has much more easily been able to look through the noise but when it comes to the big events, if there's a change in prime minister lara setrakian referendum or general election, the gilt market will pay attention. but if you look at how gilt yields have moved compared with bund yields, treasuries, they have practically moved in line. it is premature to think that gilt yields should necessarily rise and we will see some political clarity -- it depends on the global bond outlook which is why we are still comfortable to forecast tenure gilt yields. >> daniela, thank you very much. let's continue to focus on where politics meet markets. let's stay in touch with one of our top stories. president trump is calling the mueller investigation and illegal takedown that failed after the special counsel finds no evidence of collusion with russia and the attorney general

says there's not enough evidence to charge it with obstruction of justice, but the political fight is far from over. top democrats are demanding the release of the complete report. from faces continuing risk other investigations with federal prosecutors in new york, looking into his company, presidential campaign, and inaugural committee. we will look into some of that little later and get some analysis from one of our colleagues in london. up next, seeing double. africa's most valuable company is spinning off its internet businesses in an absurd in listing. the ceo joins us for an exclusive interview, next. this is bloomberg. ♪ ♪

♪ >> welcome back to the european open. day,nutes into the trading a week session for european equities, down on the stoxx 600 this morning. africa's most valuable company is selling off its main internet asset, planning a secondary listing in amsterdam as part of a plan to reduce exposure to the johannesburg stock exchange and focus on its fast-growing online investments. joining us now on the phone is the ceo, very good to have you with us. tell us a little bit more about why you are making this move.

have european investors told you they want to see this? >> thanks for having me. first and foremost, it is not a spinoff but primary listing of all our global consumer internet we think anthat is extremely exciting portfolio of assets that we believe global tech will be keen to access and we think we need the euro next exchange to do that. >> why amsterdam? -- we have been in the city for almost 30 years and it has been like home for a long time. we found an excellent place to trade, we think people are comfortable to relocate and we have an excellent group of people and in exchange that is about 3.2 trillion.

all in all, a great home for the group. >> can i ask you what you hope to see in terms of the share price? we see a little bit of movement up this morning that you will be well aware that your company trades at 30% or so in tencent. is this designed to close the gap? >> we basically see -- if you look at the company where it is is a very attractive investment opportunity. we think it also attracts significant pools of capital that previously weren't available. we think that is going to be a thinkositive thing and we that 75% of the new company will still be owned -- that advantage will flow through and at the same time we have a very high

concentration on the johannesburg stock exchange, almost 25% of the index, and that will also be alleviated. >> ok. a look at the news this morning -- let me ask you about your plans for where you are excited to investor money. a storytly carried talking about a billion dollars worth of investments in india -- does that number ring true? >> if you look at where we have been allocating our capital, india has been an important investment destination, mainly driven by explosive growth in a number of mobile internet users and on the back of that we have invested early in companies -- they have been making great progress in india and we plan to continue doing that. indiahard to predict but is a nice opportunity for us. focus in thatur

country has been in food delivery and other associated businesses. what about other areas, the growing finance market? payments? lending? that sort of thing. is that of interest? >> absolutely. business, a big payment business which connects merchants to customers. it is doing very well. we have also been investing in consumer credit, because we realize there's a huge credit gap in india. that is definitely something we are keenly pursuing. >> what about your holding in tencent? you have been trimming it a little. do you plan to keep it as it is? >> absolutely. we are still so impressed with the quality of the leadership team and how they take a long-term view of the equation. it was clearly the largest internet market in the world and it is our intention to keep that investment visitors.

>> what about the most recent update? the profit numbers came in below estimate, rising investment in cloud computing, slowing gains approval. you are not concerned about those issues? i will say i think it is best to ask the question -- this is the long-term focus of the team and i think it is the best internet team in the world and they are investing in things which i think are extremely promising for the next decade and we are extremely supportive of that. >> a quick what about tv. your business has been selling your africa pay-tv company. you solve that a little earlier on. a month or so ago. we are expecting to see an announcement from apple later on today, around further activity in the pay-tv sector. is that an area that is gone for

you, or are you still interested in gaining more exposure in that side of things? actually didn't sell the itsany, but we gave it separate primary listing and unbundled the shares and the company is now trading independently and got off to a really nice start. in africa, the multichoice asset is still the runway. in sub-saharan african countries, broadband penetration is still very low and broadband may never get there for most of the continent. whether we are going to expand remains to be seen. but it is also highly competitive. we will see. >> ok, thanks very much for joining us, great to speak to you. the ceo of nascar's.

great to get that interview. up next, trumps a victory lap. special counsel found no evidence of collusion with russia, but it is less clear-cut whether he has sought justice. more on that next. this is bloomberg. ♪ want more from your entertainment experience?

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>> 30 minutes at your trading day. here are the headlines. write a, the selloff continues after a key part of the u.s. yield curve. is a recession on its way? minister's cabinet stands behind her amid reports that she is being pressured to step down. and no collusion. president trump says he is indicated as robert mueller's report finds no evidence of collaboration with russia. trump: there was no collusion with russia. --re was no abstraction obstruction. none whatsoever.

it was a complete and total exoneration. markets.e to bloomberg 30 minutes into your trading day, let's take a look at how the stoxx 600 is shaping up. stocks are trading down. seeing a great deal of conviction toward the downside move in overall markets. a lot of concern about global growth and the conversion of the yield curve. to the upside, some standout movers. m&a is part of the story. the satellite operator up by 7.5%. they have finally signed a deal to be acquired by aipac's lead group. that was a long lingering m&a story. we will talk about that with our team shortly.

and they has seen an upgrade at goldman sachs. and we had a story over the weekend that was talking about -- the dow jones reporting several times about combining businesses. .hey are interested in m&a let's have a look at the other side of things. we have many more stocks to the downside. there is a lot of concern about global growth. luxury was one of the sectors really trending downward. the we don't see the trend quite so clearly but one of the big movers down 5.3%. oil services downgraded at jefferies. and they are selling assets over at john would. let's get to the first word update. annabelle? theresa may is clinging to power at the moment.

parliament moves to take control of brexit. she is hoping for one more chance to court her divorce deal in parliament. the u.k. was originally supposed to be leaving the eu this friday. china will be opening up its financial markets according to the financial governor of china. they will be treated the same as to mastech ones. meanwhile, jpmorgan is calling on china and the u.s. to resolve their trade disputes. >> the world economy, the u.s. and china. we don't get along. we passengers should be very worried. annabelle: an area once held by the islamic state in iraq has been liberated. that is according to the

pentagon. it is the first time the u.s. military has proclaimed the terrorist group no longer holds caliphate.lled it global news 24 hours a day on air and on tictoc on twitter powered by 2700 journalists and analysts in more than 120 countries. anna: global yields have plummeted, but what does that tell us about the state of the global economy? is astrategists say it sign that it is not a completed event. be less dire.st >> it is no wonder that we have so many opinions. the curve inverting, we had bond yields deal negative. shifts might be just as important. your example, there could be a

far less ominous reason for those muted prices. the amazon effect has made everything cheaper for consumers over the years. when asked for the rising short dated u.s. bonds, they have a reliable buyer. the fed is poised to let the balance sheet unwind. a balance sheet will automatically shrink. then there is my favorite. the price insensitive alga driven buyers. just because trend suggests momentum is to the upside. there is your everyday portfolio construction rationale. asset valuations are still elevated which means investors by hedges to hedge the stock holdings. it is a much less frightening reason for the synchronized bond yield. that is dani burger with a look at the bond markets. , wheretay stateside

donald trump claimed a victory after the special counsel found no evidence of collusion with russia. attorney general william barr says there is not enough evidence to charge the president with obstruction of justice. demanding theare release of the complete report. kathleen hunter, very good to have you with us. how big a win is this for president trump because he tweeted how many times, no collusion, on many occasions. this does fall short of the complete and total exoneration that trump is saying it constitutes. huge victory for him in the sense that he was often mocked by democrats by tweeting no collusion, witchhunt, things like that.

is certainly what robert mueller in the end concluded. it makes it hard for democrats who spent the last two years defending his integrity to come back and say there is something wrong with the conclusions he has reached. anna: democrats were on the same page about what strategy to adopt here. 2020 is not far off. kathleen: the democrats are unified in as much as they want to continue their own investigations on capitol hill into some of these other questions that are still outstanding. mueller didn't really find a conclusion on. he didn't in fact say that he definitively did not obstruct justice. we see democrats wanting to .ontinue that line of inquiry where we may see some division in the coming weeks and months, and i think this is a dynamic

they are watching closely, how much they want to push those investigations as we get closer to 2020. that will depend on the response that they get from the voters. the public is not interested in this storyline anymore. they feel like he made his conclusion and is time for democrats to give up this line of inquiry. that is difficult in some regards because they will have elements and their base -- in their base that will want them to take this even further. something that will come to the fore and bears watching. about2020 will be tackling the trump presidency, for sure. take you for joining us on set in london. next, we are john -- joined by john hitchcock. turning the center into a

cultural hub in investment capital property market amidst brexit uncertainty. what certainty does he pick his plans on? we will talk about that next. this is bloomberg. ♪

welcome back to the european open. we are 41 minutes into the trading day. it'sntial says conservative nature is paying

off. says theance ceo approach means it is culpable with the current climate. we spoke in beijing and they started by talking about the brexit contingency plan. >> we replicated the fund portfolio and legacy emergency cap's. that is a strategic value to us because it is very successful in europe and the clients are very familiar with that class. it was done about two weeks ago now. it cost us about 26 million pounds. probablye would have got to that decision with or without brexit but brexit clearly defined the timing. >> is this expected in the u.k.? brexit.olicy saver was said you are responsible for your own retirement. we have had tremendous demand

because these consumers are now looking about how to fund their own retirement disproportionately. and ofin the lower risk the product offerings. >> could you give us an update on your de-merger? the splitting of the business? >> it is progressing really well. there is a lot of structural stuff that we have to deal with. we have 170 years of contracts to review to make sure that they are as they should be going through. we are one year since the announcement and i would say that we are slightly ahead of schedule. couple of elements coming up later this summer that are out of our control. that we a court case have to accept the timing of the court and the decision of the court on.

wax what do those conversations mean with your expansion plans in china? >> we have not commented on any m&a specifically but i will tell you what is interesting about announcing a demerger. a variety of firms have approached us that probably would not have looked at us before. people look closer at you when you do something seen as different. i think it is a much broader set of firms that we can do more with. there are lots of firms that would like to work with our company and our growth. nowe have lots of options that we are talking to. we are not looking necessarily at looking at the structure of the group. it is more capability. anna: that is mike wells speaking to tom mackenzie in beijing.

london's olympia exhibition center is getting a facelift. to transform the landmark into a cultural hub. joining us is john hitchcock, the chairman spearheading the plans. tell us a bit about what you're hoping to achieve with this redevelopment. building to the west of central london. sits on 14 acres. it was built 130 years ago. it hasn't had that much attention since then. cousinslightly been the -- i think we are focusing the spotlight on olympia. the performing arts cultural district, we have 225 shares a year. am i going to build another to , more, to theaters performing arts.

and there is a thing called brexit happening at the moment, possibly, probably. we will see. how does this link with your expectations in the u k economy? or is this more about tourism? >> i think there are two ways of looking at this. it is a very long-term projects. we will be in construction for the next three years. the point about brexit is that this is the marketing platform. we are about performing for the u.k. london is a great city and this will keep us going. we have european investment in the project which is very exciting. it is not about retail. 10 of 15 years, we might have been talking about detail. the trendap's into

that we are seeing among consumers in the u k and elsewhere. it is less about stuff anymore about time well spent. you have much more experience. i will not take anything from the retail of the future because it will all be to your door. we have 130,000 businesses with us. there is a lot of talking and thinking going behind that. it is a collection, but predominantly, the beating heart , the intention is to keep all of those going. projectill build the around these events. the system will all be complementary.

you have accelerators and incubators that will help these businesses market themselves. anna: you're at the only part of europe trying to set up a tech hub. what will make your's different? foundation, it is a huge number. there is this program together which is exciting and there is a lot going on in the east. you surprised by the underlying resilience of the u.k. economy given what it has been through? >> it is given certain sectors. for us, it is very lovely to be working on a project that is very vibrant and good for brexit. anna: thanks very much, john. oo capital, telling

.s of his investor plans just weeks ahead of the ipo on the new york stock exchange, the video that the ride-hailing giant is set to release. this is bloomberg. ♪

anna: welcome back to the european open. europe down by .7% on the stoxx 600. let's have a look at which of the factors we need to keep an eye on this morning. sandy -- dani burger has that press this morning. surprise what is going on today. a lot of this is driven by the bond market. not surprising because we have that bond proxy trade going on with investors looking for yield. they are piling into stocks with solid profits. this is something that goldman sachs today said was attractive. and on the downside, we see very volatile stocks are losing today. it might reverse as investors look for safer companies that provides growth for a difficult economic environment. this chart shows the divergence of the u.s. dollar and bought trends.

they have sent german bund yields negative. we see the spread widen. hand, the dollar swap spreads have been tightening because of the u.s. mortgage bond market. it is a phenomenon called negative convexity. homeowners tend to refinance, but it forces mortgage bond fund managers to readjust their hedging which more or less causes this continue to spread to widen. anna: watching some of the phenomenon we are seeing in the bond markets. and on m&a, there is 20 to talk about this morning. plenty to talk about this morning. we will go first uber -- we will .o first to uber this acquisition comes ahead of the planned ipo which could be one of new york stock exchange's biggest egger -- biggest ever

listings. let's go to sarah first on the uber story. the news is that uber is set to announced this deal with kareem careem shortly before the ipo deal. >> we have news coming out this weekend. i think the decision to acquire days before the eminent ipo shows a real commitment to the middle east and a real commitment to one of uber's largest investors, which is saudi arabia's sovereign wealth fund. there is a tie up between uber and careem. ipoies to uber's largest and saudi arabia in the middle east. anna: another m&a story, a

satellite provider attracting an offer from aipac's, who else is in the mix? >> it is a very attractive kind of business model. we have seen the increase in in-flight communications. there are people flying that want to stay connected area this is what they are trying to offer. it is a u.k. business. with macroeconomic issues that surround it like exit, it is also quite global. this is what the private equity firm is bundling together. from oldcompetition rivals and newer ones including air, andranson's one elon musk's business.

there is a solid bet on an industry that expects it to flourish. let me ask you about another company in africa deciding to spin off part of its business and answer dan. -- in amsterdam. are they trying to close the valuation gap? putting up ais not share price this morning, is it? >> not particularly. but that is the boost, the gap that the ceo is trying to bridge between the market cap of tencent and masters -- and naspers. owning a business that has a larger market cap and. i think this move to offload bulk of the business to the euro

next could help bring the valuation bridge together. , sarah, from our deals team. they may go if you want to get m&aago if you want to get news from the european markets. more next. this is bloomberg. ♪

>> trump's victory lap.

the ball report -- the mueller report shows no collusion, but less clear is if he obstructed justice. lawmakers looking to seize control of brexit. shows deepck market in -- deepening recession worries. tom keene is back in new york. tom keene is back. we have a lot of market action. there are concerns about recession. i went to the lady gaga tanning salon and we will leave it at that this morning. can i just say maybe it is the wall street journal or from action last week but

deutsche bank is a horrific chart this morning. francine: we will get to will get tok and we politics and brexit. but first, let's get straight to the bloomberg. >> theresa may zone cabinet is pushing her to name the date she will step down. some believe this will help the prime minister win support for her brexit deal. one million protesters marched in favor of a second referendum. calling for the government to scrap article 50 and getting 5 million signatures. >> the government has absolutely failed to deliver on the results of the 2016 referendum. when the government fails, the only sensible thing to do is to put people back in charge. the turkish lira is rebounding after plunging friday more than 5% after president erdogan warned bankers about

being responsible against the currency. research notes the recommended move had a manipulative content. a spokeswoman for the bank declining to comment. the final swath of territory once held by the islamic state has been liberated. that is according to the pentagon. a fightingafter force in syria claims victory. it is the first time the terror group no longer holds the land it calls it caliphate. global news 20 for hours on air and powered by more than 2700 journalists and analysts in more than 120 countries. i missed that move on the turkish lira. think you for keeping me up to speed. let's look at the bond currencies right now. fridayoff of a very ugly

, the curve flattening from 15 down to 13 basis points. europe there. oil there. big 17.13. what a backup. yield on theher german ten-year. it is a little bit right on the level. at the 30 year bond from a 302 into 290 11 week and sterling, francine, i will let you discuss. sterling i will get to and a second but overall, there was a clear movement when it came to weaker than expected pmi data out of france. we have news and data out of germany. pretty much better than expected for the month of march. markets are showing no signs of ending. tom: it is very important when

talking about mr. mueller and , we school anyone in the sweet 16. our guest, glued to the ncaa. to our global audience why america and particularly elite america is totally focused on the mueller report. >> it was a convenient timing for mr. mueller's report coming right in the middle of march madness basketball. this is the number one geopolitical risk issue that is not trade from the united states standpoint. it is a big overhanging question that has been looming over u.s. politics for the better part of two years. did president trump collude with russia?

no.big headline is to mueller's report as we learned from the summary written by the attorney general, no collusion on there. between the two, formal or otherwise. the question is a little bit easier about obstruction of justice. easier -- the question is a little bit hazier about obstruction of justice. tom: here is professor some steam -- sunstien. that the not clear president committed a crime, but they also weren't clear that he did not. ultimate judgment to the attorney general, mr. barr himself. it is not exactly ideal.

this is a really important .istinction it was responsible and prudent, but not ideal. public explanation was thin and brisk. what happens next? the washington post seven articles down says, what happens next? what exactly happens next? think the next thing is the democrats will scream for us much of this report to be released as possible. are ongoing questions about how much is in this bigger thing. we have a summary written by a trump appointee. must be aware of his statement and the report. the star report has a different circumstance, i know. i think democrats are sitting

there, looking at turnabout is fair play. in the southern district of new york and elsewhere, the questions involving the trump organization and other things that are not exactly central to the mueller probe, those are continuing. desire by great democrats in a house to have in bar orngs to bring mueller himself to explain all this. i don't think that this is over, per se. but when donald trump goes to grand rapids michigan, a swing state very near the sweet 16 home of michigan state. tom: killing me. trump will go out there and say to an audience of proud supporters, no collusion, vote for me. francine: does that help president trump and his base?

>> i think the white house is thrilled. they will wake up this morning as happy as they went to bed. if you look at any of the republican commentators that have been with donald trump, they are over the moon. i understand that this is not a choirboy report. do, too.to -- they but they can backup the one thing that trump has been saying since jump. no collusion. there is a difference between legal, but this is a big headline for the president, no question. francine: how many other investigations are there? for example, the business affairs of the president? >> numerous. i don't want to quantify. there is some stuff that we may not know like the question about the grand jury ongoing.

we have some people close to the president, paul manafort in trouble. michael cohen is going to jail. there is lots of this stuff. i do want to get to something because it is interesting. when we were in hanoi and we were going for the trump-kim talks that broke down, hours before, trump is watching part of the: testimony in congress. this has occupied a huge amount of headspace for this president. it will be interesting to see if he can put that to one side and focus on other things now. derek, thank you so much from singapore. it wrapping up the events of this weekend as well. this is exceptionally timely, particularly with secretary pompeo's comments last week.

robert joins us, a kissinger associate, on all of washington. please stay with us worldwide. this is bloomberg. ♪

francine: this is "bloomberg surveillance." from london and new york. both stock and bond yields tumbling to fresh lows. some say a recession is coming. u.s. futures in the red. for bonds, australia is recording a 10 year low. if we closely watch the three months and 10 year treasury spread, we can look at all of

these market actions. we are joined by the head of european equities and rbc global head of fx strategies. thank you for joining us. an impending recession, yes or no? >> where? i think when people look at the u.s. yields curve, it really says the signal to the u.s. economy about what is going on in the rest of the world. francine: that means yes. >> in the u.s., i don't think that we have signs. that overot showing time. we are seeing slow down in cases, but no signs of recession coming. fight the of don't fed, don't fight german yields. >> if you have been following german bund yields, they have gone from 2% or 3% to nothing.

is a we sort of see it picture of some caution. but europe's challenges may be different than those in the u.s. the continuity of existing challenges and being affected by some of the wider global events as well. want to talk about the friday that we saw, the correlations that are in the litmus paper. this is something that the pros look at. i will not explain this on a monday. on aplain kobe db -- obdb wednesday. the volatility on sterling is next to nothing. there is no other way to put it. where is the correlation right now in a no volatility space? >> it is a difficult market for it is to trade because

very low but it has been that way for some time. i think you have to be a bit more selective. tom, i know you love it when i -- ofou of skier passes skier -- obscure passes. i do think there is an opportunity to be long swiss against the japanese yen this week. but what did you learn on friday? i got a lot of confusion about if thursday or friday was noisy or significant. >> there are two things that happen on friday. rates were really great at dissecting what that meant. versionand, you had the that francine mentioned earlier and i would not get too carried away with that.

on the other, you begin to see interesting price action in the u k market. at thehink if you look price action there, it is a signal of markets losing all hope that rates are ever going up. if you take that to a european perspective, it means you can look for opportunities to carry, and pick up, maybe not find it with the normal kind of currencies that you can expect. >> are we misreading the yield curve? do think so. there are lots of reasons to be fairly cautious. i think it is right that we are in the last stages of the cycle. say that wee can are in the last stages of that, that is right and it will inevitably carry through to the rest of the world. what we have seen his weaker

economic activity in china, which combines with the u.s. making for a cautious picture. former chair janet yellen is speaking at the credit suisse asian conference in hong kong right now. the headlines, yellen debt buildup unlikely to cause financial crisis. she is concerned about a buildup in corporate debt. that is an important question right now. what is the extension of corporate debt? is it like 2009 or 2010? is it different this time? >> i'm not sure there are any particular areas that are of real concern. on these most recent issues, having seen a systemic and massive crisis, we will be looking for the same thing. it is possible for us to have a slowdown in the economy without reeling to a global crisis at the same time. there are some elements of the corporate debt that are a little

bit overextended. i think what we just see is a slowing global environment. ofncine: thank you, head european equities and rbc global strategy. ,oming up, a little bit later we have a market strategist and portfolio manager. that is 11 a.m. in london. and this is bloomberg. ♪

is bloombergs surveillance. tom and francine from london. in the last 20 minutes, releasing the german mark survey, with data beating across the board and the euro to a session high. -- the euro-dollar rising to a session high. fusse. us, mr. how did you take the news on friday that yields were negative gekko is it concerning yak -- when negative? -- yields were negative? is that concerning? >> people seemed to expected downturn and not a recession. it makes spending and investment easier for the german government. but in general, it is not a good sign.

francine: how bruised is the german economy? today, business improving more than forecast. >> that is correct. economy individed germany but the domestic economy is very strong. wages are rising rather quickly. reading introng construction. we have a strong service sector. we have strong retail. the weakness is from the outside here. manufacturing is continuing to decline. we have very weak export demand. this is affecting the world economy, but the german domestic economy is strong. tom: you are exceptionally qualified to answer this question? want in ankers deutsche bank-commerzbank merger? what does the rest of banking

want out of this forced marriage? my impression is that the rest of the banking sector will be pleased about this merger because we, germany, is an overbank economy. some consolidation is needed so my guess is that the rest of the sector would be happy about that. we would have a very large german bank, one that would be too big to fail. question is, would it have to be a german merger? could it not be the case that other european banks have taken over? end, i think politicians should not intervene here. this is a question mainly for the bank itself. what about the smaller banks? the heritage of germanic banking is so different from the rest of the world. don't they have to confront the merger as well?

the question is, do we really need this public banking sector? a lot of people say the weakness in the german banking sector is related to state intervention and state presence. we andstion is, can should we maintain this public banking sector? why not privatize this? we need a fundamental debate in germany. francine: but if we have tens of thousands, 20,000 or 30,000, possibly even more. what does that mean for the strength of the german economy? i don't think that is a problem. we need consolidation. of banks moving at the moment as a result of brexit. i would not be worried about that. but the market is very strong.

that should not be reason to stop the merger. thank you for joining us. coming up on bloomberg daybreak: americas, the cohead of global -- that is ahead on bloomberg. in the meantime, we see quite a lot of market action. it is good have you back, tom. stocks are dropping on concerns about growth. overall, we are looking at some of the more diverse or the more obscure bonds. australia's 10 year bond is actually at an all-time low. japan is hitting the lowest since september of 2016. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two hour window so you're up and running in no time. show me decorating shows.

this is staying connected with xfinity to make moving simple. easy. awesome. stay connected with the best wifi experience and two-hour appointment windows. click, call or visit a store today. tom: good morning. francine in london, i am tom in new york. mr. mueller, you have been

reading about it or 48 hours. we have a great morning must-read. right now, elsa lignos with rbc with us. one thing i see is there are three american dollars. maybe four. can you make a dollar call, or is it just too complex? my viewdo not know that has fundamentally shifted on the dollar, because i started the year being a lot more positive than a lot of people. i think we are in danger of doing a repeat of 2018, where people are scrambling to find dollar bearish arguments. revisedugh the fed has and lowered its guidance, it has been happening in the rest of the world as well, so i am not sure this is actually that bad of an environment for the dollar.

go james bullard the regime shift. these are the great mathematics in the bloomberg dollar index. eight years to nine years, then the shift to a stronger dollar. what does a regime shift for a four year stronger dollar signal? elsa: part of the struggle at the moment is we may be out of that regime shift where we had the constant dollar appreciation, and now it is a bit more selective. is hardlar at 1.13, it to envision something a lot higher or a lot lower. the struggle for people at the moment is they want to make a huge dollar call, but they are better off looking for relative value trades. francine: i need to ask you about powell before i let you go

the samebinary, and at time it is binary in the morning and it seems different in the evening. elsa: a lot of people have struggled with tandem in the last couple of weeks. there will be opportunities to pick it up later. decisions forcult parliament to make, and i do not think they are prepared to make those decisions. the markets have a low probably of a no deal exit, but we may have a higher risk of that. francine: thank you. we will be back with ben ritchie. we will have plenty more from brexit and what theresa may's week looks like, but let's get to bloomberg first word news. viviana: no collusion between russia duringp in the 2016 election. that is the conclusion from

robert mueller. the report also says there was not enough evidence to find that the president obstructed justice. but the fight is far from over. top democrats are demanding the release of his complete report. there is plenty of scope for china to open up its financial market. when it comes to shareholding in licenses, he says foreign beancial firms should treated the same as domestic ones. the federal reserve may have to ease policy if economic forecasts for 2019 disappoint, according to the chicago fed president. he says of the moment there risk to the downside looms larger than the upside. the yield curve is something to be mindful of as well. flat rightd curve is

now. long-term interest rates have come down over a long period of time, so it is not surprising yield curves tend to be flatter. viviana: eight rocket hit a home in the gaza strip, raising tensions to its before elections. prime minister benjamin netanyahu says he is cutting short his trip to washington because of the attack. he is scheduled to visit president trump before going back this morning. global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. thank you. u.k. lawmakers are moving to take over brexit policy, and some in theresa may's own government are planning to oust her. aremberg has learned some arguing this would win support for her brexit vote.

-- i've a million questions and 30 seconds to ask. i'm kidding. what is sleep of ability of theresa may once again surviving this? papers, youad the think this is a prime minister who will be hounded from office soon. but this reported rebellion sort of fizzled last night. she is hosting a cabinet meeting this morning, so we will have to see. that maybe she will agree to stand down after getting her deal over the line. a lot of this is unconfirmed. but we have been here before, sat at this table over the years that this prime minister is headed for the exit, and somehow

she still survives. we know things are moving fast, but so far, she remains in place. francine: will she put her deal to a vote this week, and if she does, is that even a slight chance she gets it through? it looks difficult. she will probably not hold that vote this week. tonight, we get a lot of votes. starting from 10:00 p.m., we will have a lot of different amendments voted on. the one to look out for tonight downis one -- it was voted by two votes before. parliamentut properly taken control of the agenda. you might see some form of a brexit that, could vote for. but that is a big "if." tom: i am fascinated by the news flow. with wolfgall start

ng munchau, he says we are closer to no deal. david: what we saw the european council is that no deal is not something the e.u. is willing to let happen. they sat in the room and came up with a two-week extension and an even further extension if may does not get the deal through. they said they did not want to be blamed for no deal getting through. and there would be happy -- people happy to get no deal pass, but we try to vote for that, and he did not happen. the chances are baked in as another cliff edge, but if you look at the motivations of both sides, it is hard to see a person coming to that. of: with us is ben ritchie

aberdeen stated investments, and megan green. thrilled to have you with us. inh deutsche bank going down flames today, how close is the united kingdom to enjoying a european recession? >> a lot of it will be dependent on the choreography of brexit. so far, growth is coming in a bit far compared to expectations. is vulnerable to a slow down, but i do not think we should suggest the u.s. -- u.k. will go into recession. i would agree a no deal brexit is not anybody's preference, but it could happen by mistake. it seems like theresa may is playing chicken with parliament. the e.u. is playing chicken with the u.k. mystics can happen. in the event of a no deal brexit, we can expect the u.k.

to go into recession. francine: what would this mean for your assets? no deal people what a brexit, but it could happen. ben: that is why hedging your bets from an investment perspective makes sense. a balanced view of a range of dental outcomes and positioning yourself so any particular outcome will not be that europeanal from a perspective makes a lot of sense. francine: last week, we were covering the e.u. leaders summits in brussels. it was close to possibly going over the edge with a no deal, right? because of the timing. we have any idea whether april 12 will be that looming deadline or will we have resolution before? david: this is moving so fast. i think we see also options become clear, perhaps this week. yes, that is a cliff edge. but the e.u. has said you can

ask for a longer extension if you do not have anything sorted out by then. out,primacy has ruled that but as i said, you pick up the newspaper, and she is on a knife's edge. we could end up with a different leader before we get to that deadline. francine: thank you. david merritt, ben ritchie, and megan greene. munich securities conference chairman at 10:00 a.m. in new york, 2:00 p.m. in london. this is bloomberg. ♪

tom: "bloomberg surveillance." good morning. francine lacqua in london. tom keene here in new york.

, ben ritchie, and also joining us from hong kong, anet yellen, speaking at credit suisse conference. and the headlines are actually germane for the moment. she comes out and says i am not a fan of mmt -- we will not go there now. there's so much to talk about. she says maybe fiscal policy needs a greater role with low rates. have benfinished to ritchie and megan greene with us. this goes on and on and on. the yield curve watch. explain how the yield curve, with the tenure yield lower than the to your you -- two year yield will lower the call on recession? megan: the fact that the yield

curve inverted in and of last week will probably not change the call for growth. there are a lot of reasons why that may not be a reduction on growth. you could argue that -- , nottion is the tail risk inflation. long-term bonds are a great equity hedge for investors. that is pushing the long and down. you can also say yields are lower outside the u.s. a lot of foreign investors are piling into the long end of the yield curve as well. so this is not actually signal our recession. that said, seven of the past recessions have been predated by an inversion of the yield curve. so everyone thinks an inversion of the yield curve will result in recession, investors will make it happen. tom: and this is an important question -- how does the financial system work with a curve inversion to carry it

forward to the negative yields we are seeing again? explain how a bank does banking within that environment? megan: that is a concern. that is how markets can make a recession happen. if the yield curve reverts, bangs cannot benefit from a carry trade. so that is one way a yield curve inversion can feed through into recession. it does not have to. a yield curve inversion for a day or two is not something we have to worry about. it is a quarter that would be a signal. francine: we talked about it when we started the show -- there are multiple signals flashing across the world, but could it be self fulfilling? the more investors convinced themselves that is impending recession we will get one? ben: that could be part of it. are well-established signals.

the question is timing. i do not think there is anyone out there not saying it is -- i do not think there is anyone saying it is not late cycle. when is the debate. if you are a prudent and sensible investor, it is a good time to get out the door before midnight as opposed to one minute before. megan: i have seen research saying that if you are an equity investor, you have about two years to make gains before stocks tank. just because the yield curve is inverted, does not mean that investors have to jump out. francine: how about china? megan: china has been shoveling so much coal into the furnace, there are some indications it is starting to feed into growth, but not as much as we expected. people asked me how much will china do to stabilize the economy? the answer is whatever it takes.

i think china will be accelerating by the end of the year. that will change our discourse on what is happening with global growth. up: we want to get the chart -- this is the correction in the bear market. we forget the recovery we have december.e horrific what is a signal to you, as an equity investor, that we have are 4%, 5%t, yet we below market highs? we are hardly in any disrepair, right? ben: that is an important point. if we go back to conversations in december, we were concerned about the pace of interest rate increases. we were worried about trade deals with china. and we were worried by the chinese economy. those were the three issues causing market dislocation. we have seen equity markets recover. you could argue all three of

those issues are still out there, and we are more concerned about the pace of global growth then we were in december, yet equity markets are still at almost an all-time high. that is not a context making me feel particularly warm about the duration of equity markets. tom: what are you going to do today? i know you are watching college basketball in the united states. what do you do in the equity markets now with new money? do you let it sit or can you allocate with confidence? focused strategy is around focusing on a high quality businesses. in this environment, it is an easier pitch to investors than during a big cyclical boom. so we just continue to do what we always do. if anything, asking ourselves, are we really comfortable with everything we have? if not, make those decisions earlier than later. tom: megan greene with us of

manulife and ben ritchie of aberdeen standard investments, and thank you to elsa lignos earlier. we interview mr. michael of jp on "bloombergent markets." this is bloomberg. ♪

viviana: this is "bloomberg surveillance." business the bloomberg flash. there is a new global internet group being listed on the euronet amsterdam. it will consist of internet companies outside of south africa. nesbitt is going from an africa focused media company into an investor in media companies around the world. deutsche bank's investing arms have reportedly become the focus

of merger talks with commerzbank. the two lenders have only started to touch on tougher issues. that is the bloomberg business flash. francine: thank you. uber reportedly set to announce a $3.1 billion to acquire dubai-based rival careem. our guests in london, and let's also go to matthew martin, bloomberg's middle east finance reporter in dubai. first of all, if they take out careem, do they own the middle eastern space? matthew: exactly. a deal will give them almost a complete monopoly across ride-hailing, food delivery services, across the whole middle east region. there are a few other, smaller bit power players, but uber and careem are the two main ones

that dominate the space across the middle east. tom: what is so interesting in your story is the cramdown nature. it is careem being forced to sell? is that what is going on here? there is definitely, behind-the-scenes, some consolidation stories going on. you have the pif as a big investor. on the uber side. if you look into careem, some of the big investors are our the venture capital arms of the study telecom company, owned by pif. you also have companies like kingdom holding, which have a big stake in careem. it is not too hard to imagine minds toa meeting of

say let's stop burning cash competing and just form one ride-hailing company in the region. if you look at the structure of the deal, those investors will be getting a stake in uber as part of the payment. it is not just a cash deal. they will walk away with a stake in uber before it ipo's. francine: thank you. matthew martin in dubai. still with us, ben ritchie of aberdeen standard investments and megan greene of manulife. at this, does it have an impact on european equities? ben: i think it does. the readthrough we will get in some of the price through will have consequences. what we see in these type of businesses, the winner takes all type market, is there is a natural logic in terms of aligning your assets to make sure you can put them in places where you have the best assets. we saw that with delivery hero and takeaway.com deciding to

combine their german assets. tom: ben ritchie, thank you so much. and megan greene with us for too short a time. coming up, many stories. the continuing saga of brexit. the market reaction after friday carnage. and also mr. mueller and all of washington. robert hormats joins us in the next hour. much going on in the markets. sterling 1.3181. london, new, from york, and kevin cirilli in washington, this is bloomberg. ♪

does germanyning,

signal a european recession? deutsche bank weakness -- they are squabbling with commerzbank. it is a checkered brexit. -- the three racketeers just -- the three bredxiteers. devils survive to play virginia tech. in london,ene francine lacqua in london. good to be back with amazing market carnage thursday and friday. you wonder if it is almost all linked together, brexit, mueller, and the markets. francine: you are right. if you look at the inverted yield curve, which we had friday, if we look at the negative yields on the 10 year

in germany, and what is happening with the australian boon, a lot of people are saying this is not the sign of an impending recession, but when you look at them all, it is like flashing signals across the world. we have to talk about that and u.s. politics and politics in brexit. tom: right now, here is first word news. viviana: theresa may is clinging to power as her own ministers plot to oust her. may is hoping for one more chance to put her divorce deal to parliament, but huger majorities-- huge have already rejected it. a dead woman is walking, to echo a phrase used by the former chancellor, ward osborne. she should have gone weeks ago. viviana: the turkish lira rebounding after plunging more than 5% friday after president erdogan warned bankers being

response before speculate against the currency would be punished. recommending lira was written by jp morgan. a declaration coming hours after a kurdish fighting first in syria claimed victory is the first time the u.s. military has terrorist group no the territory claims as its caliphate. and a rocket hit a home in the gaza strip, escalating tensions just two weeks before national elections. prime minister benjamin netanyahu says he is cutting short his visit to washington, d.c. because of the attack. this morning, he will meet with president trump before traveling back to israel.

global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. so much paid equities, bonds, currencies, commodities. a little follow on to what we 2/10's showinghe re-steepening. 17.17 --y back up to 17.17. way back up to francine: i am looking at stocks. they are starting the week in a groovy mood. european shares are down. and i'm looking at australia's 10 year bond deal, hitting a 10 year low. japan has had the lowest since 2015. we are also getting reports from an ecb executive board member, talking about fervent growth in

believes theree is a need to discuss a best set of fiscal rules. and we are getting a little bit of brexit update with the e.u. getting the possibility of a no deal exit. speakingjanet yellen in hong kong also mentioning fiscal rules as part of her monetary policy. joining us from the russell rotunda at the house is kevin cirilli, who survived a very mueller weekend. your personal takeaway on what we have observed the last 48 hours? kevin: first and foremost, no collusion. no further indictments. and also a sign of things to come in terms of where democrats go from here. this is a massive clearance for the president and perhaps the most significant day of his beendency as a shadow has

cast over his administration suddenly dissipates as there is no collusion found by special counsel robert mueller with the russians. democrats are already continuing this notion of whether or not there was obstruction of justice, and that is going to be something that houses jerry committee chairman jerrold judiciarythat house committee chairman jerrold nadler is challenging, calling for william barr to testify in the coming days and weeks. is saying thatan i cannot say enough -- the president claims total vindication by mr. mueller on the russia issue, he is not lying. the takeaway is the trump campaign let the russians continue to try to help trump but did not actively collude or

conspire. a criminal charge requires enough evidence to convict beyond a reasonable doubt. totally polarized on this. are the democrats wasting their time? kevin: there are many within the democratic party, including democratic strategists i've spoken with over the last 12 hours as well as through the weekend, who would argue they are talking policy, medicare, environmental regulations, more regulation of financial services, but the bottom line is senator kirsten gillibrand, democrat from new york, will formally unveil her presidential campaign wednesday in front of trump tower. the optics of that speak for themselves. but from a broader standpoint, the magnitude of no collusion cannot be under scored. the headlines from last night could have been that several

prominent individuals were indicted. that was not the story. the story now becomes where does the president go from here? senator kristen gillibrand will be unveiling that in front of trump tower, where the president will be heading to michigan to have a campaign style rally. if there is any indication i last 12e over the hours, they ready to go to uses not just against democrats but also the media. francine: i know there are plenty more investigations against, for example, the businesses of the president, but is there anyone that could actually hurt the president? kevin: this was the biggest legal hurdle that needed to be cleared in terms of the collusion issue, and it was cleared. as you mentioned, there are other investigations that are incredibly important and are still ongoing, but from here, you're hearing this and the messaging coming from top publicans -- top

republicans. they view the issue of collusion as an endpoint, period, and a turning point in turning the page. democrats now -- this takes a host of things out the political table, including the issue of impeachment. the votes simply not therefore that. tom: kevin cirilli, thank you. now time for a three hour conversation with robert hormats , ambassador for secretary clinton with president obama and many other services to both republicans and democrats. i want to quickly get out of the way mueller -- what is your perspective on this versus the time of watergate? there is a distinction here, isn't there? amb. hormats: there is. and attorneyueller general barr have taken

collusion off the table. while there will be follow-up actions perhaps in congress and perhaps other jurisdictions, the big issue people have been focusing on is now no longer an issue of prominent focus. going and, it kept going, and you had a bipartisan movement. that is the big distinction. -- at the beginning it was, but at the end, he became a bipartisan issue, with republicans taking a hard line as well as democrats. this is a very different environment. now the question is where do we go and what other issues congress is going to focus on and the public is about to a greater degree. tom: i cannot convey the distinction between this. i will guess the summer of 1974, when it was truly a bipartisan study of president nixon.

francine: right. does question to you is this leave democrat on their face? amb. hormats: the question democrats now have to address is where do they go from here? there are clearly going to the otherhearings and committees related to issues on trump. but the questions they will have our what is the american public focusing on now, and will they be moving the focus of issues, and will they want the democrats to move ahead with their ideas on dealing with the economy, which looks like it is weakening, and health care a health carened system and improve the system. the political focus in washington may continue to focus somewhat on this, but it will have to deal with much larger and broader issues that the

public and most of america now will be focusing on. there is one point that i think is important to understand, and that is this study can -- we will not know until we see it -- describe in greater detail what the russians were actually trying to do and how they were trying to do it, and perhaps develop a bipartisan effort to get at the russian meddling intervention-intervention issue, and -- the countryg together, which has not been cleared up. tom: robert hormats with us. i want to speak with him about tech interested pompeo. francine: we are just getting breaking news on jet airways, the carrier, national indian

carrier, a that had suspended some international flights. we are seeing changes at the tops. there were rumors about possible leadership change. goyal, isr, naresh stepping down. we will have that, plenty more on brexit as well. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." let's get the bloomberg business flash. a $3.1 billion deal to acquire -- uber is careem reportedly set to make the announcement. estimated at $1

billion, making it the most valuable tech startup in the middle east. youtube reportedly pulling the plug on high and dramas and comedies, pullback from its plan for a paid service with hollywood quality shows. it is reportedly due to the high cost to compete with netflix and amazon. deutsche bank's investing arms have reportedly become a focus of merger with commerzbank. the tone of discussion is constructive, but the two lenders have only started to touch on tougher issues. tom: thank you. with us today, robert hormats, ambassador hormats. there's so much a talk about with international relations. pimco's investor for short-term payments. what you observe from thursday and friday?

once again, negative rates. of tenureheer shock negative rates in germany. what does it mean? >> nothing real, really. the yield curve inverted, but the low interest rate period began years ago, and it will probably extend to 2030. if one looks at the factors causing it, demographics in japan, america, et cetera, it it will be with us for a long time. hormats set up an account 20 years ago -- how did they make money? rate is around 2.5%, yet yesterday rr around 2.75%.

they think the federal reserve will lower the cost of money at some point. it is a 30% chance of recession. francine: away from the u.s. treasury yield curve, global bond markets are flashing the same morning. should we not sit up and listen? i cannot hear you too well. seems like you have a cold. speaking of colds, you know the old expression, if the u.s. sneezes, the world catches a cold. caught a i think you cold from china. the world has. when we think of problems in china, that is probably a force here. but the feeling is in the second half of the year, things will change. china has engaged and has given the world a lot of stimulus. china's economy is growing at 6% plus, meaning a billion dollars of new gdp in the world. in other words, china is the

fulcrum shaking that shaping the globe. and the bad news in europe had everything to do with china, center the manufacturing -- sector was affected. but oneit is a signal, should really be looking to china in terms of the outlook. francine: thank you so much for the great analogies. and tonyrmats crescenzi stay with us. chief up, duke energy's executive at 10:00 a.m. in new york. this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york. tom: and the aluminum out like this. francine: why did you call it? tom: the george hamilton novel. some in theresa may's own government are plotting to oust her. the prime minister is reportedly under pressure from colleagues inside her cabinet to set a date for when she will step down. but some arguing this will help her win support in her brexit deal. a bloombergow is opinion columnist.

a brilliant piece talking about how she has been -- protests over the weekend, a petition, but do we have any idea of what shape and form brexit will take place, can theresa may even survive this? >> the first thing we need to find out -- hopefully by the end of today or late this evening -- is who will control the process that comes next. whether parliament is going to decide the process by which they will vote for various options or the government retains control. that matters hugely, because the way they organize these indicative votes can determine whether a majority can be found, determine whether proletarians have tactical voting. there is now an almighty fight over the process and we should know more by the end of today. there is this question in the background about whether theresa may can survive. that becomes a question of the hard-liners in her party won a

ladder to climb down? if so, they may be willing to trade. francine: who is the prime minister in waiting if theresa may steps down? a hardliner brexiteer? are quite a few conservatives who have all but put their hands up for the job. boris johnson is the best known of them. he has been writing transient pieces in the "daily telegraph" against her deal but not quite saying he would never support it. it is possible we could end up with a hard-line replacement, which is one reason she could still have a job. francine: -- tom: therese raphael, thank you. the hope here is essentially a singapore model, this will all get fixed, and out we go to a new united kingdom. is there a reformation out there for the brexiteers?

is. hormats: if so, it overly disguised in the murky environment we have today. the idea that was behind the brexit vote in the first place was you would have that. britain would be independent, could make trade deals with whomever it wanted, and everything would be fine he had almost no attention was made to the question of ireland, the border between the irish republic and northern island. now that has become a major issue. britain, turns out, will not find it so easy to both create a customs union or some new type with the continent, and make trade deals with countries like the united states and others, as it intended or hoped to do. the united states is not going to be making easy trade deals with anyone. all these new options that britain was supposed to have if they left europe are not so easy. now you have the irish issue,

which is a fundamentally troublesome issue for both the irish republic and britain. then you have a declining level of support on the continent, because of the year reputation and anger that has developed over the process. working out a deal with the europeans in round two will be very hard to do. francine: thank you so much, bob hormats and tony crescenzi. we are getting headlines, new sayingnoit coeure, the ecb is not at the limit of what it can do yet. a also says they need discussion on a best set of fiscal rules. this is bloomberg. ♪ so with xfinity mobile

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now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. and now get $250 back when you buy a new samsung galaxy. click, call, or visit a store today. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. tom: good morning. negative yields in germany. fluctuating around the

negative yields, one of the market futures. right now with our first word news, here is viviana hurtado. viviana: plenty of scope for china to open its financial markets, according to the people's bank of china governor. when it comes to shareholding in licenses, he says foreign firms should be treated the same as domestic financial firms. ismorgan's jacob franco calling for resolution. bloomberg learning naresh goyal will step down as leader of jet airways. he built one of india's biggest airlines. he will now resign after giving into pressure from creditors. he and his wife will also give up seats on the company board. the federal reserve may have to ease policy if economic forecasts for 2019 disappoint, according to the chicago fed president. he says the risk to the downside loom larger than to the upside.

the fomc says investors should the mound for love the yield curve, but u.s. fundamentals remain strong. >> the yield curve is flat right now. long-term interest rates have come down over a long period of time, so it is not surprising yield curves tend to be flatter. viviana: global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. . thank you. if you have a pulse, you are probably mueller-ed out, whatever your view is. everybody is mueller, mueller, mueller. but what happens next? we are thrilled to bring a gentleman expert. rossi is not gene only a former federal prosecutor, he is one of the lead prosecutors in fighting the opioid epidemic. far more important lay, his train well in excess of 1000

department of justice prosecutors. we are thrilled he could join us. i should call you professor. professor rossi, this will go to people like you, move from people like mueller to real prosecutors like you prosecuting. what should we expect in the next number of weeks, months, and quarters? gene: before we get to the mueller letter -- and i am mueller-ed out. but my bracket is still doing good in basketball. but here's what we should expect. leviathan, that biblical symbol, called the southern district of new york. regardless of what was in this letter by robert mueller that was handed off to attorney barr, letter, if there are many investigations still being conducted. the southern district is a huge part of this whole investigation. we have the district of

columbia. we have the eastern district of virginia, where i used the work, for many years, 20 years. it is not over. to draw an analogy to basketball, we have finished the second round. we still have the sweet 16, the elite eight, the final four, and the championship game. tom: this came up eight times this weekend -- aren't the prosecutors hugely motivated to drive this case forward just to make a name for themselves? a guy named giuliani did that a few years ago as well. what is the motivation to drive this forward for people like you? gene: when i was a prosecutor, for almost 30 years, there is that motivation, a little bit, to get your name in the papers, to get on tv. there is that. but when i trained 1000 prosecutors, including five that are now in mueller's office, i told them you do not care what the person's color is, what

their political affiliation is, you just call it like it is, and you try to do justice. you are not going after anybody. you are going after the truth. that is why i have a lot of respect for robert mueller. francine: but -- there was no collusion. that was pretty clear. gene: with the utmost respect, it was not clear. what this letter says is that ,here was not a conspiracy where members of the trump campaign or president trump joined the conspiracy. this letter does not say that they did not aid and abet, the russianstivate to do this. those are two different standards. joining a conspiracy is different than aiding and abetting something that someone else is doing. two different things. francine: are you saying that

you question william barr's rationale for exonerating president trump? gene: i am definitely questioning attorney general barr's decision to decide the obstruction issue. here is why -- he should have recused himself. this --d not have decided the objection issue. june of last year, he wrote a 20 page memo saying there is no obstruction. what he is now doing business -- mueller -- to draw the basketball analogy. mueller said there is a junkball. barr -- a jumpball. barr says the position error goes in favor of president trump. he should have recused himself from the objection decision. this tanks the letter. tom: and how will this the advanced by congress? will they go after barr, that he

did not recuse himself? gene: yes. i think this letter gives more problems for the president and emboldens congress to dig deep. tom: we will have to have you back, see how your bracket does. gene rossi, expert and former federal prosecutor on the process of the term foreman of justice. many headlines today. chair yellen out of hong kong. many others out of your. and this out of london. harker with a white set of headlines, says he sees a u.s. tilt slightly to the downside. we will speak about that later in this half hour in about 10 ofutes with tony crescenzi pimco. coming up, bob hormats on d secretary of state. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." francine lacqua on par minister watch in london. i am tom keene on mueller watch in new york. we are both looking at the markets. with us.rmats here we will have an important conversation on secretary pompeo and the path forward for the department of state, but right now, anthony chris anstey with a -- anthony chris anstey -- pimcoy crescenzi with a look.

what did estrella and michigan say that you fold into the pimco outlook on recession? shows ae yield spread three month treasury bill and a 10 year treasury note, which most studies suggest is the best spread to watch. in contrast to the 2-year note compared to the 10 year or 30 year. the table would suggest that today's is spread, slightly negative, would give us a 30% chance of recession in 12 months time. as soon as it hits that spread. it does not have to stay there. but it is a signal from that point. 30% is not high when we consider is typically around 20% where recessions attend -- tend to occ ur. we should not overly worried. this spread has been affected by

different things. the federal reserve holds lots of securities, trillions of dollars worth it is trying to shed but will stop trying to shed soon. it is pushing down long-term rates more than they would otherwise be. tom: when hormats and i were thating this -- we learned whitesmoke came out of the echoes building, and we learned there was a recession. it is totally different now. it is not two quarters of negative gdp that is a recession, right? tony: that is a technical recession. it is used typically in a decline in production and factory, and a rise in unemployment. tom: not occurring. tony: the key for the fed -- and pimco have this discussion with and theead of the ecb

federal reserve -- the view would it would be a few tenths move in the jobless rate would start the signal we could be in recession or on the verge of recession, than the federal reserve may consider being more active and follow the market rather than lead it and cut interest rates. only in that case. francine: where do you think the next recession will start from? is it unlikely he will be in the u.s.? tony: it will probably be because of some financial incident. the one source we can all think of is an escalation of a trade war, but more than likely, that is resolved in the second quarter. we would call it a simmer rather than a boil. but the odds of recession this year are low. plus, there are low inventories relative to sales, a big indicator the past two years. household balance sheets are strong. i could go on on various

statistics. banks are in solid shape. securities -- there are a few reasons to believe in recession this year. let's put it in terms of the bigger picture and how little it moves relative to the big rally since december. francine: but it would not come from china? tony: it is not likely, but there is the risk. ,t is widely felt that china recently having engaged and decided to open up and cut taxes, in the second half of the year, things will change and get better. there is one risk. ofe of the stimulus in form tax cuts, it is not clear that the chinese consumer will decide to spend money they have been given. so there is little question mark in relation to china second half. tom: bob hormats, you basically wrote the book on this. secretary clinton turned you and

said i do not get anything about the state department stuff, i want you to push america's economy forward. in the discussion on the recession, are dynamic so messed up, -- is this whole discussion about the shift and annex in the equation? amb. hormats: basically what is affecting the markets is really internal in the united states. the point you made towards the end is important. that is a lot of countries are important to a lot of american companies. both in terms of exports and in terms of the fact that we have a lot of production abroad. if we get into a full-scale trade war with china, if this thing really deteriorates badly, it is going to have a very negative effect on our financial markets.

particularly high-tech companies and farmers. tom: that is critical. upside down because your world is upside down? has the president made crescenzi 's world upside down? amb. hormats: the stimulus will continue for a while longer. the regulation has helped a lot. i think the international component of the american economy, particularly for american companies, is something that is not fully understood, how interrelated -- tony: to his point, a chart from the u.n. -- when we think of exports, any nation's exports is ofut 30% and are components a final product, not the final product. so pieces of a car rather than a car. so we are dependent on each other. supply chain shows a very high

nations.ectedness of if the trade war escalates, that is the risk. that the supply chain gets affected. amb. hormats: and most chinese goods targeted by the president's tariffs are really on components that american companies utilize. the farmers get hurt because the chinese retaliate, raised tariffs for farmers. and if you put tariffs on automobiles, everyone will do it. the europeans will do that, too. francine: so with the chinese actually retaliate and stop buying treasuries? how ugly could this get? amb. hormats: that is the one thing the chinese are least likely to do at this point. if they were to do that, they would push the dollar down, push the rmb up. they have a lot of treasuries. they couldn't dump them all at once. it would hurt all of their

reserves and currency and make them less competitive. the probability of their doing this is not zero but probably at the low of probabilities. there are a number of other things they could do with -- that would be more likely. tom: this has been wonderful. we continue the discussion with investor hormats. tony crescenzi, as always, thank you. later, a further conversation with nick maroutsos. there fixed income strategy moving forward, in the 8:00 hour. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." let's get the bloomberg business flash. we begin with a bloomberg scoop. to getbillion deal careem. uber is expected to announce this. careem is one of the most valuable tech startups in the middle east. the company says it has over one million drivers and operates in more than 90 cities. no high end and comedies for

youtube, according to a report. it is a pullback for its plans for a paid service with hollywood quality shows. this is reportedly due to the high cost to complete with netflix and amazon. ers is forming a of index, consisting companies outside of south africa. naspers has grown from an africa focused media company into an investor in internet businesses around the world. . this is aeported listing of international assets. francine: thank you. we're just getting some news. the president of china is arriving in paris. we saw over the weekend pictures of the president of china with his first lady with brigitte and

emmanuel macron. so there is a five day, , with the tour stop president of china arriving in rome, monaco, now paris. still important. we are thrilled to have with sebastian robert hormats. have ambassador robert hormats. i must speak about the recent uproar with the secretary of state. not only for speaking to a limited part of the press, but also the actual diplomacy. what we saw with the golan heights and the rest. this goes back to 1807. president jefferson, former secretary of state, his discussion of how the press fits in into the robert hormats world. what is the optimum fit?

amb. hormats: i think the key to the press is -- when i was in washington, for many years, i had good relations with the press. not that i anticipated they would agree with everything i said. but that i always found, when you laid out the facts in a rational way, they would respond with rational reporting on the basis of their judgments, and their judgments would not always be the same as the administration's or mine. but they play a critical role, being a watchdog, which jefferson sought to be an important watchdog, and informing the american public. a well informed electorate is critically important. washington said this as well-paid we will not be able to have a robust, domestic or foreign policy if the president little -- the process to be seen as a credible conveyor of information.

by and large, it is. tom: do we have a foreign policy right now, or is it so original and ad hoc, is there a permanence to trumpian foreign policy? amb. hormats: that is interesting thing. if you're going to change and make decisions like golan, it is important not just to make them but also give the press background as to why you are making them. give them background as to the process utilized. and variouscts arguments that went into making those policies. creating a black box with surprised things coming out both confuses the american public, as they do not understand how this originated, and confuses our allies. one thing i've learned over my many years in washington is great powers cannot afford to be misunderstood g8 if they are misunderstood, it confuses allies, who would otherwise, we hope, be with us. and it gives adversaries a sense

that they can stir up doubts about america's staying power, about america's credibility, and about the foreign policy process for the united states. you had to be clear about what the policy is, how it is made, and what the basic facts are in making it. francine: people would say -- if people are confused about what you stand for, it gives you extra leverage, right? amb. hormats: it crates doubt among allies and gives adversaries a sense that they fish in troubled waters. saying we do not know what the americans will do, they are unpredictable. it gives other countries a more charter argument. tom: robert hormats, thank you. story coming out of london and jp morgan right now. really important story and a real change in the discussion of

jobs leaving london. push 300 set to employees to leave london to the continent after brexit. that is really something, isn't it? francine: it is really something. we know from various banks -- it is a problem of timeline and regulators forcing these banks to take measures before brexit actually happens. so you will see probably a lot more of these kind of headlines coming out. tom: you really wonder what we will see. these are contractual with the risks of jp morgan in london. the leader of china in paris as we speak. this is bloomberg. ♪ you.

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policy could be loosened if inflation expectations run too low. sovereignly yields are at their lowest levels in years. investors grapple with the short-lived u.s. curve inversion. and president trump's concerns might be over. attorney general william barr clears him of obstruction of justice. the focus now turns to the southern district of new york. alix steel, here with carol massar. carol: now we have to figure out the legal and political inclination of that news over mr. miller's report. -- mr. mueller's report. alix: president trump tweeting over the weekend "no collusion. no obstruction. complete and total exoneration. keep america great!"