socialists win in spain. we are live in madrid. buyers board backs chief executive after a shareholder vote against him. avengers and game smashes the box office. the superhero flick earns $1.2 billion setting a new record high for opening weekend. good morning, everyone. good afternoon if you're watching from asia. this is "bloomberg surveillance." i am francine lacqua.

going to be busy week when it comes to economic data. we have quite a lot of economic news from asia. earnings. apple tomorrow. coming up, we have plenty more on some of the industries. you can see down. it is gaining 0.2%. flat.ollar pretty much treasury yields gaining a touch but euro-dollar 1.11. we speak to the chief executive of blackstone, steve schwarzman. that is at 3:30 p.m. london time. let's get to bloomberg first word news. buyers -- bayer posture but advise you board ignoring a vote of super confidence. it means werner baumann can stay in his position. the issue is the takeover of monsanto last year.

they are losing 35 billion euros in market value because of lawsuits that alleged around a weedkiller causing cancer. u.s. sanctions could push iran's inflation to 50%. this grim outlook would put the islamic republic's inflation as far as prices hit sudan. the white house is aiming to curb iran's influence in the middle east by cutting its oil exports to zero. later we speak to the man behind that report, imf director of middle east, jobs or. do not miss that interview. this week, the next round of u.s.-china trade talks is getting underway. significant issues remain unresolved. donald trump may walk away from the table. the u.s. trade team is set to begin discussions on tuesday.

endorse is preparing to and $38 billion takeover bid from occidental. scuffle ahreatens to previous deal with chevron. the company's board sees the deal as the superior of the two. chevron's offer is valued at $33 billion. avengers in game smashing box office records with a $1.2 billion opening weekend. this blows the watermark set by last year's infinity war with disney boasting the top four spots for opening weekends in america. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. is sete: spain's sanchez

to return as prime minister after the nation's third election in four years. the socialist leader is just a majority of the may rely on capital separatist to govern. >> socialist party has won the general election and with it the future has one in the past has lost. madride: joining us in is annmarie hordern. great to speak to you. what next for him? any form a government and with whom? sohe is going to hope forming this government. it was a comeback for him. we have seen it time again in his political career in spain. it was a gamble he called a snap election. the voter turnout, the most in a decade so it was really a victory for him.

he has two paths he can take, one is with soy done us. this is something stable and investors would want to cheer for this. the problem is, the leader has campaigned on the fact he would not do a deal with sanchez. that is one waiting in the wings. the more likely scenario for a government is him teaming up with the antiestablishment party. they would have to have a hodgepodge of other regional parties. this would mean reaching out to catalonian nationalists. we have that european union election at the end of may. no party leader is going to want to start teaming up with a rival as they start to seek voters for the end of may elections. francine: when you look at the right-wing party, what does this mean for policies in spain?

>> it is so interesting to see the right-wing come out fragmented, especially the tpp. theyne main takeaway is didn't get as many seats as many had expected. they got 20 and many thought they would get into the high 40's. it is the first time we have seen the right-wing party its seats in congress since the 1970's. what makes them different is they are not eurosceptic. they want to stay in the eu. what they are campaigning about is domestic issues. defending spain from liberals and feminism. francine: annmarie hordern there in madrid. italian bond yields are falling after s&p confirmed the rating was negative on friday.

expected to give a more picture of the region's economy. what does this mean for the euro? joining us is hans-guenter redeker. when you look at spain, does that -- flavor of the european elections? or very domestic politics at play? hans-guenter: we are still to wait until the european election outcome. you are right that there is the heat is coming in out of this. people we are assuming that populism will be on the rise at what we have seen the case of spain, populism can be contained if there is a high turnout in the election. the second answer, we have to deal with, is with the auto tariffs. we haven't dealt with that.

see comingl have to out of may and if there's -- if the auto tariffs have been implemented. if that what happened, you would have a euro rebound. there's another observation. relationships and markets are changing. the relationship we are referring to is the rise of the euro and the euro seems to be increasing and has driven with the euro -- the bund yield is doing. francine: -- hans-guenter: the reason why this is so important, we have seen one of the most prominent euro outflows driven by the investor side.

people were concerned about the lack of investment opportunity in europe and therefore placing the investment elsewhere. we have seen an outflow of euros . of the flows related to the u.s. repatriation. we had the reverse thank you activities coming to our market. the investment flow is the most important one. we have to look at the bund yield. it is a good indicator of behavior of net savings in the eurozone. down.net savings go that means the ability of europe declinet capital would and that would be positive for the euro. francine: how much do you worry about the ecb not having enough tools? worried.ter: i am very dynamics arem within the eurozone. we don't know if it comes to the

next economic downturn, the eurozone's monetary policy is going to be much more constrained compared to the last downturn. we have reached key limitations. we are running short of safe assets. we need to trade safe assets at some point. we have to resort -- reform the eurozone. that means if the eurozone could fail, then germany is going to lose a lot of assets. think europe and especially germany would be very well advised to press ahead with integration, the deepening of the eurozone in a political process in a capital market process. seen the, having

limitations of the monetary policy, it makes the reforms much more pressing. i am an optimist. francine: hans-guenter redeker stays with us and we will focus on stocks on the move including bayer. the company's board standing by the chief executive after a shareholder revolt. prices still under a little bit of pressure, down 2%. details to come on bayer and the defector. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg surveillance." i am francine lacqua here in london.

nissan in the government of japan rejecting renaults call to engage in merger talks. relations between the partner companies hitting a new low following an intense relationship after the arrest of former reliance leader. apple says it removed several parental control abs over security concerns. this is a rare response. the company is eliminating competition to its own tool. meant to manage groups of devices for employees at apple says they violate app store policies. double-digit pace of growth for phillips in some markets is being driven by electric toothbrushes. the company isn't offering discounts. instead phillips is expanding its range to cover all budgets. the giant stepping up launches to battle the slowdown in china.

the chief executive has concerns about the euro area economy. >> some countries are doing well. other countries don't. flat to lowee a single-digit market growth in europe. >> business flash sending it back to you, francine. francine: has king dollar reached its peak? dollar index which touched its highest level since may 2017 earlier in the week. dollars retreat coincided with treasury yields digested weak yields. still with us hans redeker. the u.s. dollar should depreciate and we are pretty close to cycle peaks. you mentioned the gdp report as -- that the u.s.

dollar was reading badly to a strong gdp report but the report was by no means convincing. you need to look into the inflation of the gdp report. report and when we will see more moderation. that was a highlight on the fed. the fed going to take us closer to what a rate cut? all of this is happening within an environment where we have the first signs that the rest of the globe is recovering. the chinese data, that being on the positive side. the other economies are going to develop. we had to stay out there which we investigated. [indiscernible]

francine: what are they? hans-guenter: between nine months in two months in the case of korea. that means the weakness we have seen so far in non-chinese data is not get the concern. it is not supporting the thesis that many people have which is what happened in china is going to stay in china, anyway that the chinese environment is changing. therefore the import penetration is a different one. we would say that the politics impact from the chinese economy into the health of the global economic cycle, that is going to be the main theme for the next six months. francine: what happens to emerging markets on the back of your dollar call? hans-guenter: emerging markets are to stay better. there may be some short-term

taking place. we have chinese pmi to come. this week's release of the chinese pmi could come in a little bit weaker. as that happens, you will have another test in the emerging market. last week, the emerging market currencies index lost a percentage after what happened in argentina, turkey. a few currencies having a significant impact. when you look at the main driver , that is what you can make in real terms relative to the alternative investment. when you look at bm, you see real yields is that about 0.15. that is a huge difference between the two.

that is an environment where the funding of emerging markets is far more emphasized a compared to five years sales. support ager term, quite good bit into the emerging market. back and we will come specific companies he likes in the emerging countries. up next, it was a better weekend at the box office as avengers endgame give the first film to gain over a billion dollars. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i am francine lacqua here in london. it was a blockbuster weekend with avenge his in game setting new records. it earned $1.2 billion becoming the first film to make $1 billion in three days. setting records in china and domestically in the u.s. weekend.d a top four say my producer has gone twice. behind these mega-numbers? $1.2 billion. we have never seen anything like

this. expectationthis behind it. they have created these compelling characters, ironman, halt -- hulk. people cannot wait to see it. people that go and see it and it is great news for disney's -- disney. francine: you could have franchises for the next 10 years. sequels,ironman with 1, 2, 3, 4. theyese ensemble films create an effective formula. we will not see another ironman with robert downey junior in the lead road -- lead role. francine: this is amazing because disney bought marvel back in 2009.

that has paid off. --the time, people >> exactly. that is what is so impressive, they mentioned these new characters. black panther tapped into a whole new fan base and dr. strange as well. antman. they help to grow this universe. marvel.t just there's a lot coming for disney. francine: where do you make money in these types of films? in china, we were looking at numbers. >> china is an important market. there is a wide appeal with families. they will continue to grow these box office numbers.

francine: we need to find the time to go and see it. coming up on bloomberg we speak to the chief executive of blackstone, steve schwarzman. do not miss that interview at 3:30 p.m. london time. your markets are moving sideways . we are watching for any news from mark carney. he has a rate decision on thursday. he is giving a speech. i am looking at stocks mixed in europe. we do have a big, big week when it comes to data. investors want to have any clues on global economic growth. this is bloomberg. ♪ the latest innovation from xfinity

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like never before store. the xfinity store is here. and it's simple, easy, awesome. francine: economics, finance, politics. this is bloomberg surveillance. let's check what moving in the markets. dani: it is a story we have been

monitoring all day. she is now lower by 1.5%. an unprecedented rebuke of the ceo by shareholders. the board keeping him on. is getting rid of dividends today said that is pushing them lower. anks in general having update. shares higher by banko bpm. triple b. staying at a positive for not just bonds but banks as well. aurubis down more than four point -- 4%. they are getting the chance for this copper miner to finally price in the drop. get straight to bloomberg first word news. this is viviana hurtado. viviana: pedro hernandez --

is back as prime minister. to govern in madrid, he may have to on catalan separatists. it would be one month before any shape.e takes sanchez was forced to call a snap election after failing to pass a budget. pushed ratess according to the international monetary fund. this would put the islamic crisisc inflation at level behind venezuela and zimbabwe. the white house is aiming to curb iran's influence by cutting oil exports to zero. and we speak to the author of that report, the imf director for the central asia region. of a sensor malfunction say it was not a standard feature on boeing's 737 max.

that's what southwest airlines discovered after october's deadly lion air crash. available for a fee. the operator thought the one in light worked on all macs jets as it had in previous generations. commissioner bart chilton died at the age of 58 to an unspecified sudden illness. tighter regulation of swaps and derivatives and was a critic of high-speed trading, even calling some firms cheat as -- cheetahs. global news 24 hours a day on-air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. francine? chinese equities have fluctuated after the latest data on industrial profit showing a rebound. investors want to be watching the companies pmi tomorrow.

investors are still waiting on a trade resolution. still face significant unresolved issues as president trump's top negotiators had to beijing to continue talks -- head to beijing to continue talks. hans is withme -- me from morgan stanley. are you surprised at the ?timulus taking off >> it was pretty much in line with what china was projecting. we have positive data materializing. takes away that acceleration of chinese gdp growth within the next couple of months. and then we wait to see what will occur out of china. but destabilization is working supporting the economy and

leading to acceleration of growth. china has a significant amount of debt ratio. that banking sector was so far domestically funding the chinese economy. it makes sure that the capital stock was supported by bank loans. aboutanks have debt of 273% of gdp. that is high. that means something has to change in china. while china is going to see a , we willationalization see more capital imports. if you don't have a banking sector and are unable to support that credit, china needs to borrow the balance sheet outside of china. that base will materialize with better inflows. i want to ask about

debt and then undebt. you could have rising debt, but as long as it doesn't get out of hand, we should be ok with it? hans: correct. china has domestically funded it. an environment where you have external funding situations. like this it -- this is more like the situation of japan. china, when that japan was going into deflation in the early 90's, the yen was appreciating rapidly. because they're the japanese had to borrow the balance sheet abroad. it ties into what we're doing with the market life blog. will it kill market volatility or lead to flash crashes gekko

-- flash crashes? hans: they happen when people do not expect it. francine: you can't telegraph it? after whatnk happened the last two times, you would assume that some preparations would've been taken. francine: so you never know? hans: you never know, but i would not put money on a flash crash. francine: is the seven level now gone? hans: i think the seven level is gone. in the 670olidating to 675 range. the most likely break is to a lower u.s. dollar against the survey. we made it very clear. of the united states have a

currency engle. -- currency angle. if trade goes to zero, will that have a currency angle, too? sometimes, the trump administration thinks that china is manipulating not exactly what they are manipulating. hans: that is right. but what the authorities try to achieve in the u.s. is better separation for them self -- themselves. but they don't know how to achieve that. francine: we are looking at volatility and if it will remain low. do you expect it to remain low? yes, on thek horizon. is long.f the horizon

over the next few days, yes. but we should not forget one very important relationship, the two-year lead of the yield curve. .olatility is going to increase volatilityevels of will prepare for a volatility event. in the meantime, we're getting some breaking news out of ic bc. this is one of china's bank owned commercial banks. this is by total asset loans and number of customers. a netre coming out with income of 82,000,000,001 -- 82 billion yuan. the growth is 0.6%.

they actually don't break it ,own because it is state-owned not like jamie dimon or morgan stanley earnings. but net income a little bit better than expected. stay with surveillance. coming up, buyers management digs into a growing shareholder revolt. we will get all of the latest next. this is bloomberg. ♪

this is bloomberg surveillance. i'm francine lacqua in london. buyers board is standing by after a shareholder rebuke of the ceo.

they voted to remove the ceo after the takeover of monsanto and has given rise to a wave of losses. they answered questions about the company's market cap which has slowed by 35 billion euros since the monsanto deal. joining us is our consumer news and health care reporter. not going anywhere, but does that anger shareholders? upset aboutclearly this. 55% voted against management. they have expressed their frustration after the vote and after the board stood by baumann over the weekend, saying this is not this is the -- saying, this is not the scenario we want. francine: what does this mean for what shareholders want on other sides of the business? will there be any changes gekko

-- changes? eric: there have been talks of different parts of the business. not something you can do quickly, but just responding to the media vote by the shareholders. francine: what is next in the legal process? casesthere are 13,000 that are winding their way through the system. we have a couple of them coming up in may. there is one that the judge has try to order -- tried to order them to pursue settlement talks. there is one in the state court system in california coming through in may. so we will get either another bayer for buyer that -- or so leverage for baumann's space. let's also get some

breaking news out of petrochina. it did break some of the banking industry results. at this is what we are getting out of petrochina. is 10.2 billion yuan . that is just above estimates, just above what we heard from petrochina a year ago. a little bit more in depth -- this was actually the. concerns were that they were not .nvesting a lot of apple says it removed several parental control apps over security and privacy concerns. this is in response to the company accused of eliminating competition to its own tools.

mobile device management is meant to manage groups of devices for employees. apple says they violate app store policies. staff byo cut half. many of the functions can be automated. some paperwork will be handled by software and artificial intelligence. many of the staff will be relocated to branches in the u.s. warren profits -- warren buffett's real estate brokerage is expanding. advises andve support staff at a time when the emirates property market is extending its slump from a peak in october of 2014. year, it expects prices to fall as much as 10%. is preparing to endorse a $38 billion bid from occidental.

the firm threatens to scuttle a deal with chevron. they see the deal as the superior of the door. chevron's offer was valued at $33 billion. that is your bloomberg business flash. francine? thecine: let's recap results of the spanish election with pedro sanchez set to return as prime minister with his left-leaning allies. he is close to a majority but may still rely on catalan separatists to govern. he enters parliament with 24 seats in his worst election ever. from 130 seats down seven in the previous parliament. joining us is antonio, managing director and senior analyst. what does this all mean? can he mr. sanchez govern with a stronger hand than last time

around? question is whether he can get basically the extension of some secessionists. in thatne deputy confidence boat -- vote. it is straightforward. he gets appointed, can he pass policy in parliament? francine: what does that mean for policy? what can we expect from mr. chances -- sanchez? antonio: this morning they said they were open to discussing policy issues. but on the right, it is one of competition. so all of the smaller parties mean more players and more difficult to pass big policy changes. francine: what does it mean for

, for the economy? shareholders will be comforted that there is not something more populous out there that is a clear. it -- that is uglier. past wassanchez in the a very effective government. he still have more seats that were passed. my concern is the fact that in work ont term, you will some of the reforms needed to enhance the long-term potential of the spanish economy. when decision time comes, it might be a problem. francine: do you trust the polls? the polls were right. hans: it depends on the currency operating but -- [laughter] this resultexpect has an implication on european

politics? --tugal, italy, france ensuring a deepening of european reform taking place? or will it stay where it used to stay? antonio: i think spain wants to play a role in europe but the question is, how will he play that role? , and are important roles it is very important in terms of influence. it is a very interesting question. nonissue. it was a it nobody talked about europe during the campaign. the prime minister was not pushing for a european agenda. it is a nonissue. francine: but does he not have a big mandate to stay in? antonio: to stay in the european union?

-- most spaniards see it as a nonissue. it is the anchor. government, you can push for policy issues, but sanchez wants to play a bigger policy role. i am skeptical he will be able to do so. francine: will the economy be stronger under him? now some policies will go through? not going toare have any measures that will make the economy worse. thes not so much that government -- because you have this, it is difficult to pass a budget. they were able to increase the expenditure. that is my concern. francine: what does this mean in terms of wanting to go into fx? ordered that europe has a good anchor country?

-- or is it that europe has a good anchor country? wouldthe spanish economy through the reform process and the reform process cannot be undone. it continues to work through. has a lot to do with how the new spanish government is going to position itself. right,observation is most spaniards support the project regarding it as an anchor. he has a mandate. he can go in that direction if he wants to. i would appreciate countries with a little bit of mandate going in that direction to make sure europe is going to work. francine: thank you both. our guest hosts for the hour. coming up, lackluster results

send european banks slumping last week. a six monthded at high. we will focus on the banking sector next. this is bloomberg. ♪

economics, finance,

politics. this is bloomberg surveillance. let's talk banks. only a few major european lenders set to report including bnp paribas. lost ground to u.s. rivals. lackluster results send european firms slumping the most in a month last week while u.s. peers traded at a six-month high. joining us is dani burger. of what is driving that divide that you mentioned is really this brew of toxic structural problems. there is competition from a crowded field, smaller institutions, u.s. rivals, high cost, and a tricky political landscape. is especially drastic when you look at the u.s. rivals. the top five banks profit in the overwhich is in the white 100 billion in 2018 and the past 12 months trailing.

we also have aggressive monetary stimulus in europe that is squeezing margins for u.s. banks. the for the financial crisis, earnings had be that of their u.s. peers. look what happened after the financial crisis. the gap widened in the opposite direction for european lenders in the white, the lowest in about a year. in the lowest, you have capital market setback the majority of funding. you can concentrate on earnings fees from trading and an in europe, 72% comes from find vanilla bank lending. francine: we will have plenty more on surveillance. this is bloomberg. ♪

♪ francine: socialists win in

spain. sanchez set to return as prime minister but may have to utilize catalan separatists in the majority. board votesbayer's against the ceo and avengers: billion earning $1.2 setting record highs for opening weekend. good morning, everyone. a good afternoon if you are watching from asia. seen theave not avengers. i am planning to go in the next couple of days. that this is a huge win for disney. look at what it means longer term for how many more films they can do. and what it means for the industry as a whole? i'm usually not big on following movies but there is something going on with the huge success of avengers and the game of thrones episodes last night. these shows are capturing super

bowl-like numbers. francine: disney the but the franchise for $4 billion and they seem to have recouped some of their money. let's get straight to the bloomberg first word news. viviana: pedro sanchez is returning at the prime minister workain but may need to with catalan separatists. the u.s. and china resumed trade talks in beijing according to a senior trump administration official. the administration criticized china for failing to protect intellectual property. both sides are indicating that they are close to a deal. terrifying moments inspired by a at a wounded at an attack

southern california synagogue, the shooters weapon miraculously jammed after he shot four people. one person died. the suspect is a 19-year-old college student and originally posted in anti-jewish and anti-muslim manifesto on social media. it has never been an opening weekend for a movie like this one. avengers setting a box office record. what is the record? it raked in $1.2 billion worldwide. that, by the way, beats the previous record by almost $100 million. global news 24 hours a day on-air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. black widow will be joining us in the 6:00 hour. bonds, currencies, commodities. it is a monday.

out of a huge fed meeting on wednesday. the euro up a little bit as well. francine, as you go to your data check, it is a little light. francine: you are right, tom. the euro it is pretty much -- the euro is pretty much steady. return after these snap elections, pedro sanchez coming back as prime minister. you can see european stocks are flat, tom. tom: my chart looks at how the did last night. spoiler alert, we're not going there. i think it is a great chart. you have from the middle of 2017, the stock and the bond price of tesla. and what is great here is that

the equity price shoots up at the end of last year. they are both down about 15%. francine: i know you have seen we will noones and longer be on speaking terms if you spoil. tom: i understand the sensitivity of these things. i have not seen avengers. i am starting with avengers 1 and i got to 38 minutes before my brain cells started going. isncine: the newest avengers three hours. no spoiler alerts when we look at volatility. we will see this low vol environment. stay with us about longer. investors bracing for a slew of economic data from around the globe this week. on wednesday, fed

officials concluding a policy meeting where investors do not expect a change. it we will be eyeing jay powell's news conference. we will also listen for his comments on inflation. joining us now is j.p. morgan chase chair of global research. i am delighted to have our guest host for one of the first times in london. when you look at central bank policy, there is a lot on the fed and the ecb. can the bankers do anything? are they waiting to see where they are? >> they are waiting for the latest economic round of data but they are also becoming risk managers. that is what the lesson was from last december. when you have growth this low, the volatility matters low -- lower. i think that the market is pricing in a rate cut which i think is unlikely. francine: what would need to

happen for the fed to cut rates? you would have to see slower growth than what we have seen so far. we think in the u.s. and china, there will be better growth numbers out in the next quarter. francine: when you look at gdp figures, they looked good. then you look at the bond and he say this is not a strong as we were expecting. aroundit is a mixed bag the globe and in europe, there have been disappointments. it is taking away some of the risk of a recession later this year. that is what the market had been focused on at the end of last year and beginning of this year. i think those fears are off the table for right now. there is a lot of talk about the greater platform of jpmorgan. one of the great things about jpmorgan is that john norman and the rest have huge quantitative abilities. right now? risk what is the liquidity map that you see? joyce: one thing that we take a

close look at his market positioning. the positioning is not as extreme as it had been at the end of the year. volatility is low. the positioning had been very high going into this. liquidity on aw seasonal basis back in december. where is that liquidity right now? i think there is some confusion on the jpmorgan view? joyce: it is not extreme positioning like we saw at the end of last year. but liquidity across the board has come off a lot over the last few years. well, it waser as a real test of that. i don't think we've seen a big shift in liquidity conditions but the positioning itself being much lower. hallmarks is a call for years of lower terminal rates. comes in a little light.

can you refresh the terminal rate of the u.s. economy right now? terminal gdp growth, rather? joyce: we are looking at growth right about trend in the united states. would be asions early as 2020. and you push out some of those risks. it is something that is post 2020. everyone is waiting on the review that comes up in june. asre is more of this debate others and our team have pointed out. we are seeing that there is more time now before we have to worry about that coming about. what about financial conditions? what is your take on financial conditions in the u.s.? joyce: we take a look at u.s.

equities in particular and we see the earnings growth is better than expected. the buyback also remains very strong. some of the tightening fears were really were some and have not been coming as much into play as have been expected. in the meantime, we are getting breaking news out of bank of china. chinese banks are coming out with some earnings and we have i cbc a while ago. income, 50.9 billion yuan is said of the 49 billion a year ago. of the 49 billion a year ago. this is a touch better. also coming up from bloomberg's coverage of the milken institute, stephen schwarzman,

blackstone chief executive at 10:30 a.m. in new york. this is bloomberg. ♪

this is bloomberg surveillance. let's get the bloomberg business flash. anadarko will begin talks with occidental about the takeover .ffer it is a move that threatens a previously agreed to with chevron. according to reuters and the financial times, anadarko's board decided to cash stock offer could lead to a better deal than chevron. earningsirst-quarter that met estimates, the dutch health tech company says orders are growing at a double-digit pace. this is for products like electric toothbrushes and guided

therapy you send operations. the lips next legacy products -- phillips nixed legacy products and made room for x-ray machines. making room for a mitsubishi headquarters in japan, orders are to be cut in half. according to nikkei asian review, the biggest banks said that many of the jobs could be automated. 3000 workers will be sent to overseas branches or the domestic sales division. that is the bloomberg business flash. francine: the next round of trade talks gets underway next week. the possibility remains that president donald trump may walk away from the table. beginteam is set to discussions in beijing on tuesday. china's vice premier will lead a delegation to washington next week. the fidelity investment director catherine you joins us. joyce is still with us.

thank you both for being here. when you look at the u.s.-china trade war, the u.s. wanted a deal so badly that they would get one at any cost. are we rethinking that? cleat -- >> this has been an .verhang for the market there is a bit of fatigue in the erodingbut there is sentiment. that is why the chinese government is on this accommodative policy stance. even if we get an agreement, will it hold? will it be substandard? , ice: after nine rounds believe you will see an agreement. the durability is another question. we understand that some of the issues are really debating the final hours.

whether some of these retaliatory tariffs will be removed, that is with the next two rounds of my cushy asians will center on. catherine, do you see any idea of what the chinese thinking is during these negotiations? i can't find in the media or analysis, any actual analysis of what the chinese want. catherine: interestingly at the summit last week in beijing with about 40 countries attending, president xi jinping made a speech, hinting about what he wants to do. it all revolves around the transparency whether it is customs, imports, or that china does provide that. does it mean that it will be fine going forward?

and this will weigh on the markets. mr. trump in the american political system do not have a timeline of three years to five years. how far apart are the two timelines as they meet in beijing? joyce: at heart, the question over three to five years is a technology war, not just one on trade tariffs. china is willing to make some agreements on market access. a know that they need the capital flows coming in. so removing some of the joint venture requirements has been the one thing we have seen after threeces, years having a majority stake. and also the auto sector. the chinese are conscious of a couple of things. they need the capital flows and they have been talking about having more of the chinese bond and equity instruments in the mainstream indexes as well. factorer additional

apart from the purchase of u.s. goods, i think some progress has been made. francine: how much does china need the deal? catherine: it needs to the deal. into china, the policymakers -- as joyce mention to, it is not just about the u.s. stop connect initiative, the etf connection with japan. they are opening up capital markets, not their capital accounts, for bond equities. tom: we will continue. a wonderful to have you with us as we move to fed day on wednesday and these important discussions in beijing. bloombergay on television, david solomon, goldman sachs chairman and chief executive officer -- it is the confab out in los angeles, the milken institute. the treasury secretary was there yesterday. dave solomon, goldman sachs, the 11 o'clock hour.

this is bloomberg. ♪

>> many great business representatives participated in ceo conferences, worth over 64 billion u.s. dollars. all of this shows road widelytion and supported, popular, and beneficial to all. tom: managing the message on the belt and road, that is the

second speech we have seen from president xi this week. our guests are here with real perspective on china. you have been watching belt and road. what does the audience need to know from a last two weeks of belt and road debate? priority forf the the government, president xi jinping's speech is right up there. the government talking about how to address those criticisms, that is very key. but they are increasingly soft power status to more like 100 20 negotiations or agreements representing two thirds of the worlds populations. is not going away anytime soon. it when we look at belt and road, it is a long, long term project. and there be a western or even an american response to this huge infrastructure project? as catherine said, this

is 125 countries and 37% of the globe. that there is necessarily a way that one country can respond. the question is how quickly some of this money will come in because there is a lot of hype about it. the amount of money coming in has been not as fast as one might think. there is a lot of headline and we need to see what will go into this over time. francine: is this soft power or does this go back to the chinese economy? catherine: when you look at the supply or inventory of steal, definitely the ultimate ambition of this plan is to increase the soft power status. when you lookne: at the bond defaults, i do know if shareholders should take on

that there are bond defaults, or trying to management, or if we should be worried. joyce: i think it is a healthy thing for developing a normalized market. if china wants to attract a capital flow on a sustainable basis, they will have to show the transparency. there will have to be some failures and show how the market will handle those failures. i don't think it is necessarily a bad thing but still a relatively small amount. to the heartou get of the matter. how du clear failure in a totalitarian system? how do they do that? failure asina manage it staggers towards a unique capitalism? that theyon't think will have that many outright failures or anything systemic or that big. you have most of the chinese quasi-sovereign, and they have the ability to control that. the market understands this is not a one-way trade. that is something that china has

grappled with for years, whether it is currency -- now you're talking about bond defaults. you talk about foreign capital. you are going to have to see this very gradual process of normalization and going to more international norms. tom: which western countries are the most belt and roady? i know they did a bridge in the czech republic as well. are there western nations that have taken belt and road hook line and sinker? catherine: maybe not hook line and sinker. it but an amusement park in australia was part of the belt and road initiative. but you have south america, latin america, peru. it really is expansive. as joyce mentioned, it is about criticism of the outstanding debt. there is a lot of debt being built up as a result of this project. francine: with does it mean for europe? europeans trying to crack

down, saying that we need a policy that is more encapsulating. joyce: i think some of the emerging markets countries will go faster than the developed markets such as europe. all eyes are on europe, this may 18 trade deadline as well. i think europe will go a lot more slowly on this. the developed markets generally will go slower. the amusement park is one thing, but some of these sectors is another. tom: very good. joyce chang, we appreciate it. g, stay withe youn us today. worldwide, this is bloomberg. good morning. ♪

tom: "bloomberg surveillance." good morning. francine lacqua in london. i am tom keene in new york. for global wall street, there are moments that stand still.

-- just precious afford view on deutsche bank. the price target taken down to 6.50 euros. what i find startling -- stunning is a return on equity. forget about single-digit or low single-digit, he does not see a plan forward. francine: i know you have a chart looking at deutsche bank. this is after deutsche bank missed its first quarter net income and the potential merger with commerzbank has been ruled out. credit suisse noting that the lender has not laid out structural changes to address its problems. last week, we were trying to reminisced or remembering that they already had restructuring plans in about four years, and investors now more -- now want something more.

tom: if you look at the famed one has really capitulated on the major hazards , barclays,it suisse and at stifel. right now, your first word news. warning u.s. imf engines could push iran's inflation rate to 50%. the u.s. goal is to cut the country's oil exports to zero. iran already has been dealing with a weakening economy. for aent trump's pick seat on the federal reserve board is vowing to survive what he calls a smear campaign, stephen moore telling abc news he would withdraw from consideration if he becomes a liability. he has come under fire for criticizing cities and states in the midwest, his columns

ridiculing women also in the spotlight. a surprising revelation from southwest -- boeing told southwest that a key alert was missing on 737's. told that thes warning only worked if carriers carried -- paid another fee. rear admiral controlling ---timer was relieved controlling guantanamo was alieved of his post after loss of confidence. 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. i'm viviana hurtado. tom: thank you.

an electionhere, there, and a test that capitalism. an election in spain. us from j.p.oins morgan chase. let's start with how are they linked, new populism with the far right growing in spain out of many years ago, with franco, and the idea of you capitalism forward. how are they linked? joyce: we are seeing extreme politics, whether extreme right or extreme left, playing out in emerging markets countries. how are they linked? ofing populism is a result the rising income and wealth inequality across all countries. we expect more this from european parliament to elections coming up, where you could see one third of the seats going to populist parties. tom: you see it in brexit heating up again, e.u. elections

in the third week of may as well. there has to be a way to extract yourself from a new populism over to some kind of stability. what is the path that you and j.p. morgan see? joyce: all the traditional parties, whether developed or emerging markets, remain under attack. they are being challenged for not having delivered the results. growth has continued to come down across the board. i think you will see this type of polarization continue and these types -- in these types of results. brexit is now pushed out until october, but this is something that has become a global phenomena. we have developed new indicators. one is nonnormal -- john norman's index. one of the keywords now is socialism. before the u.s. midterm elections, you would not have seen that mentioned in the united states at all. francine: by looking at these

words, can you see the kind of policies that would be incremented, or does it give you an idea politics? joyce: it gives you an idea of the sentiment. then new freshman who came into the congress and younger people today, socialism is being more talked about than it was a year ago. francine: how does that change economic policies in the u.s.? is the u.s. ready for socialist change? joyce: i do not think the u.s. is ready for a socialist change, but you see it more in the policies being proposed, like the green in new deal, which is something -- the green new neal, -- deal, which cannot really be funded but is being talked about. francine: will it change economics in the u.s.? joyce: it is too soon to say. to seee not been able how much is going through, but you can see the level of anger and polarization coming across developed markets and emerging markets in virtually every election we have seen, whether

it is spain or what we are looking at in europe coming up. tom: where is the big cap national opportunity now? the united states? joyce: we think u.s. equities look good. earnings have surprised on the upside in the first quarter. buybacks will be around $850 billion for the year. and you have already had $213 billion announced. but positioning in the market is not as extreme as what we saw at the end of last year. tom: i know it would be inappropriate to ask about individual european banks, but as a general statement, there is a value differential between e.u. banks and american banks. is it a value trap in europe or is it a real banking opportunity for investors? joyce: this morning, our european analysts went overweight on european banks. he thinks they are hitting a historical low. that was a change in view from

what we have had for right sometime. tom: give some details on that. i know you read eight pages of that when you first woke up this morning. what kind of things in europe does your analyst like? joyce: we have taken some of the ng off offf -- weighti insurance to go into european banks. it is more that the valuations have hit bottom. so without going into the security, we have seen rotation away from health care. francine: thank you. joyce chang stays with us. up next, we speak with a senior economic advisor to spain's prime minister, pedro sanchez. that is coming up shortly. this is bloomberg. ♪ mberg. ♪

viviana: this is "bloomberg surveillance." let's get the bloomberg business flash. burned talksleast with renault. relations between the companies are now low. they were already tense because of the arrest of carlos ghosn. mike manley telling bloomberg that distinct brands like sheep gave his company an advantage. he also signaled fiat chrysler is open to cooperation or even merging with other automakers. warren buffett is making a that on dubai -- a bet on dubai,

opening an office there as it expands in the middle east. dubai's property market is defying all predictions of a rebound, extending a slump since hitting a peak more than four years ago. francine: thank you. toin's pedro sanchez is set return as prime minister, winning 120 three seats in sunday's election, up from 85 in 2016. the socialist leader is close to a majority, though he may still rely on catalan separatists to govern. joining us now is manuel de la rocha, senior economic advisor to that prime minister. thank you for joining us. first of all, with this stronger mandate from mr. sanchez, how will the economic policies under the new government, if he manages to build a coalition and govern, how will the economic policies differ from last time? well, i think they will

be a continuation of what we have done the last 10 months. it is not about what we say but what we have already done. send a firm and reassuring message. if economic policies will continue with what we have been following. fiscal consolidation, macroeconomic stability, and reduction of inequalities, very pro-european priorities will be -- policies will be the priority. francine: investors are worried that an alliance with the antiestablishment party could widen the deficit. what do you say to those concerns? not aboutat i say is what i say, it is what we have done over the last 10 months. we had a firm yet

commitment on fiscal consolidation, on the reduction of public deficits and public that's. we have done it with 85 mp's last term. our commitment to consolidation is unwavering. it will continue, with -- no matter with whom the coalition is formed. it is extraordinary how the ghost of mr. franco has stepped out. the vox vote was 10.3%. the southern side of madrid as well. permanenticipate a shift in spanish politics towards a minority but growing, archconservative vote? it is worrying. spain cannot be an island in the midst of europe. right forces are growing all over europe.

ultimately the forces of progress have defeated the forces of the reaction. those that embrace the future have defeated those in the past. it is a worrying prospect for their future, but today, we are celebrating the victories of is reactionary-v forces. tom: what is the single policy bullet you need? we are open to dialogue on the basis of a broad, --terleft first, reduction of inequalities. secondly, uprooting corruption and restoring decency in spain's public life. and we are open to dialogue to

address the constitutional problem, but was on the basis of the constitution, not beyond. with those key priorities, we are open to dialogue with all political forces. hopefully, we will form a strong and stable government that can address the key problems of the country. walk us: can you through the political maps as to how mr. sanchez can secure the votes he needs to govern? little too early to anticipate the next step. last night, the prime minister has he is open to dialogue and conversations with all forces on progressive bradley what henot anticipate or the senior leadership of the party will say, but there is a centerleftity on the

. he will have to take the lead. the victory of his party is clear. it is to him to decide with whom to form coalitions. francine: it is clear that mr. sanchez is a bit of an anomaly, being centerleft and increasing in voters minds. how did he do it? think following realistic but progressive policies that impact people's lives. enacting policies that reduce inequality. and with an open dialogue to confront the radical forces on the extreme right, those reactionary forces, and also handng -- extending his with dialogue.

but always within the constitution. tom: thank you so much. congratulations to mr. sanchez on a successful campaign. manuel de la rocha of the economic advisor to spanish prime minister pedro sanchez. coming up, the milken institute in adelaide it is a wonderful event. schwarzmann of blackstone group docketing the door -- darkening the door at 10:00. this is bloomberg. ♪

tom: good monday -- different now than it was a decade ago. wisconsinent in avoiding the white house correspondents dinner. still, many attended, with mr. chernow the historian not doing comedy but present tense. a beautiful washington this morning. francine: we look at washington and also look at politics here in the e.u. also looking at the your area economic confidence slipping to the lowest since 2015. still with us, joyce chang.

we were hearing it from one of the main economic advisors for pedro sanchez of spain. does the ecb still have the tools for a significant downturn? doce: the ecb will have to more. if you look at our european government bond index, 36% of europe now has a negative yield on it. the ecb has taken down the growth and inflation forecast. for the foreseeable future, you have to see accommodative policy in place. francine: if there is there a danger europe becomes more like japan, and whatever lessons learned from negative rates? joyce: that is one of the discussions, is there a japanification? but i do not think they will come out quickly. francine: now to some merger and acquisition we paid anadarko bid --g to endorse a takeover bid from occidental,

scampering a deal from chevron. anadarko's board sees the oxy deal as a superior of the two. our seeing aw is european news reporter. welcome to the program. when you look at this, this is what we use to report on daily two years ago. we have not seen this kind of scenario where two companies are fighting. >> it is the largest deal in the oil and gas space in at least four years. the board is looking at endorsing it. but i imagine for shareholders, this seems like a more attractive option. not only is it about nine dollars more than this chevron bid, it is also 75% cash and 25% stock as opposed to 50-50. she holds have been putting the price of this company way above the offer price and slipped on the offer was made. they think there is a counter bid to come. francine: where could the

counter bid come from? ruth: the likes of the big oil majors, exxon's and bp's and shell's of the world have been looking at shale assets in the permian basin. that is where this company is the appeal, the americas. so you could think if they were full process, they go out and do it, and they get more offers. is occidental? i am getting a lot of noise that shareholders are most unhappy. alone is the ceo of occidental? ruth: i think any big transaction now, you have seen shareholder nervousness around it. the bigger the numbers, there's

always this risk of are you overpaying for an asset because there is competition? inhave seen regulators come more strongly on some of these. in europe, some of the largest deals got scuppered because they couldn't get regulatory approval. even if it goes through, convincing shareholders and ensuring they stay happy will be hard. just look at bayer's ceo. tom: she is talking about the event diagram of the gulf of mexico. knows the permian basin cold. her shareholders do not care. the reporting that occidental is overpaying? ruth: we have not said that yet, but it is significantly overvaluing the last closest offer. we have seen that in some of these big-ticket mergers, where

the ceo is going with a lot of enthusiasm, five years down the line, their market cap is half of when they began this. you would imagine that investors are being rightly cautious. francine: how does this translate into your world how does this have to do with lack of assets amongst the big oil majors, joyce? joyce: on oil prices now, we see some upside risks. just off of the news and iran, on the sanctions, as well. we are watching these events carefully, but we have been recommending the energy sector and seat some upside risk for oil prices. francine: i do not know when you do your economic forecasts -- is there a range for the price of oil that you use and how difficult has it been tipping point, given the worries about capex and iran and venezuela? to $75,e think $70

which could keep but not hold there. in iran, they will probably take aroundoduction of 500,000 to 700,000 barrels. it will not go to zero. tom: thank you. joyce chang of jpmorgan with us. ruth david, as always, thank you for the wisdom. the next hour we set up the conversation to the fed meeting wednesday. also, so much news going on, including credit suisse marking down its deutsche bank value 6.50.o this is bloomberg. ♪

archthis morning, the issue of the economic moment,

their relative outperformance of the american economy versus everyone else. the central banker to the world will report wednesday. road trip -- team mnuchin to beijing. -- china considers tehran. an spoiler alert. thrones,"" "game of sansa said "stick them with the pointy end." good morning. i am tom keene with four hours of sleep. did you watch "game of thrones" at 3:00 a.m. or whatever it is in england? francine: i have not, but i feel like i should, considering your cold open. you should take over the writing for the next season. tom: i will say this, and we will be very careful for the spoiler alert, and that is it's an image of beauty.

the show last night, the first 10 minutes is maybe the most beautiful images i've ever seen on television. , a technicalinary and directing achievement as well. there is your "game of thrones" review. let's go to viviana hurtado. viviana: socialist pedro sanchez on his way to return as prime minister of spain. but he may need the help of catalan separatists to form a coalition. he had been the head of a minority government. significant issues need to be resolved when the u.s. and china resumed trade talks this week in beijing according to a senior trump administration official pa last week, the administration criticized china for failing to protect intellectual property, yet both sides are getting there close to a deal. and terrifying moments described by the rabbi wounded in the attack on a southern california

synagogue. yisroel goldstein saying that the shooter's weapon miraculously jammed after shooting for people. one person died. the suspect is described as a 19-year-old college student who allegedly posted an anti-, anti-muslim manifesto on social media. and how do we begin this next bulletin? record blinb-bling? this superhero flick quote avengers: endgame" set a box office record by raking in $1.2 billion worldwide. it brought in $53 million in the u.s. and canada, beating the previous record by almost $100 million. 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. i'm viviana hurtado. tom: thank you so much. "avengers" 1 so

i can catch up on their briefing. let's do a data check. spotify gets a little pop. spotify with the usual active users up nicely. , the monthly active users up as well. much more on this. i know paul sweeney will join us here on "avengers: game of thrones" as well. not much going on here it -- you would expect that with a fed meeting wednesday. the euro 1.1162. francine: we certainly have a big week when it comes to data. stocks in europe fluctuating a little. we did have some clues about local economic growth coming from some of the banks, especially in china, but overall the markets unconvinced. tom: to begin our conversation here as may a purchase and the fed meeting on wednesday, it is

good on the economy to listen to the president of the united states. >> we did 3.2% in the first quarter, gdp, crushing expectations and accelerating our economic boom. shut down,s with a with a lot of different things. tom: we want a holistic view as the president takes a victory lap, as any and all presidents would we do it with marc chandler with and global foreign-exchange. david riley of bluebay asset management as well. how bullion is the american yant is thebuo chancellor merkel economy? david: pretty buoyant. when we enter the quarter, there were concerns about the u.s. economic outlook.

to yield curve also added the fears. if you look into some of the details of the gdp numbers, you some effect onre the second quarter. but bottom line, he's in momentum. i think it will post 2.5% growth this year. tom: marc chandler, the litmus paper is the u.s. dollar. we have a chart here, the bloomberg dollar index. it breaks out about one standard deviation on the trend back to the is a bit of a dollar lift. do you scrub that as a dollar breakout or is it before we get the weak dollar everyone is calling for? marc: what we saw on friday was buy to rumor, sell to fact. that rally broke out before gdp. gdp was better than expected, but the details suggested that

consumers were cut in half and inflation fell in half. that sets the stage for the fomc meeting. francine: where d.c. dollar from here. we had dollar strength, does that continue? david: you are right to highlight there is a limited appetite for a strong dollar. the fact that currency arrangement seem to be a feature of all currency trade negotiations of the trump in withration engages other countries, but from a market point of view, it is about their relative outperformance in growth terms in the u.s. versus the rest of the world. as long as that remains the case , the dollar will be big. if we get picked up in european economic data in particular, we and see a bid into the euro see a softer dollar regime. francine: do you agree? marc: what has happened is this diversion -- divergence story

has concluded for the near term. the strength of the u.s. economy is well known. we got it validated by the gdp number. data probably overstates the case. somewhat, you will see better numbers. we'll see prices pick up. and we see the number pick up. tom: you have been good about not using blended indices. give us the scope of dollar stability strength versus euro. do you get to parity? marc: it does not look like we will get there now. 1.10.uld go down to 1.08, in the bigger picture, we are at the tail end of this long dollar rally. tom: this is so important -- chandler's distinction is he does not like bundled dollar and currency data. he does not like bundled dollar and currency data. let's switch to asia.

when you look at asia, do you see a strong and stable dollar? marc: let's look at dollar-yen. the japanese markets close may 6. we will be reluctant to take dollar-yen far from its current ranges, but i think it is around 1.14 or so. the next leg carries us to 1.12. francine: where d.c. the biggest -- i do not know if it is an unloved market or a region that is mispriced. david: i think european assets have a lot of bad news in them, and i think because the economic data has been generally disappointing. we have seen the sentiment conveyed today, which was also down. and the various political risks or perception of political risk, so there is value in european credit. i think the periphery -- i still like btp's.

banke some of the european supported that as well. there is some value there. going forward, we would be seeing things like parts of the credit markets. we have also seen loans underperform. francine: so what is your take on euro? will we see euro strengthened? marc: the euro has been beaten down. there is a bit of a rebound. but in general, we have had such a return to global equity markets, if someone had told me around christmas time that you could be around 60% by the end of april, would you be happy with that for the whole year, i probably would have been. i think a lot of investors are in the same position. maybe take the old saying "sell in may and go away." tom: do you really believe in

that? marc: not so much the superstition, but it fits in with the reality in stocks, with earnings expectations still revised down. tom: is tape rolling on this? we will remember this on labor day. [laughter] francine: yeah, we will be back with marc chandler of bannockburn and david riley of bluebay. coming up, stephen schwarzman, blackstone chief executive at 3:30 in london, 10:30 in new york. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." business the bloomberg

flash paid anadarko reportedly will begin talks with occidental about it the he billion-dollar takeover offer, move that threatens a previously agreed deal with chevron. according to reuters and the "financial times," anadarko's board believed occidental's offer could lead to a better deal. orders met -- this for products such as electric toothbrushes. productsixing legacy such as light bulbs and tv's and now wants to improve margins to scanners and x-ray machines. the number of employees working at mitsubishi usj headquarters in japan are reportedly to be cut in half. the country's biggest bank concluded many of the jobs could be automated. at about 3000 workers will be sent to overseas branches or the bank's domestic sales division.

that is the business flash. tom: thank you. kevin cirilli, i know you are at their dinner. what a changed dinner over the last 10 years. does this have a permanence to it? 's after start trump president, do you go back to a white house correspondents dinner with the comedians and all that? kevin: there was a moment in ron saidow's address where he comedians are needed, but in the broader sense, the white house correspondents dinner has become a reflection of the times. it was a layer reflection saturday night. tom: we will see as we go forward. two stories this week. let's start with china. to beijing.thizer what are they walking into? they: it is a china -- need to close this deal. reportedly president xi jinping

has adjusted he may be able to get on board with some of what the u.s. is pushing for, including intellectual property and technology transfers. the bottom line is this is an administration, from president trump's perspective, that does a one-offo have meeting with china unless they come to a framework agreement. thesene: when you look at significant issues unresolved, is it all about intellectual property protections? kevin: absolutely. and beyond that, it is issue of national security and whether or not you would allow this sense where china would agree to some type of framework on cyber. i would even go one step further, last week president xi looking to continue to make inroads in europe. japanese prime minister shinzo abe was in the united states and met privately with president

trump friday and saturday. this is not in a vacuum. there are many different moving parts. francine: is it more realistic to think we are not going to see a u.s.-china trade deal or will we get something that unravels in six months? kevin: i put that question to several sources who are working on this issue at side of the administration, and they pointed two things. first, from a timeline, calendar standpoint, they would have to be a one-off meeting sometime in the next six weeks state leaks. secondly, the business community in washington is aligned with president xi in the sense that they do not like those tariffs. that is why you heard steve bannon, a more nationalistic voice last week at the saint regis saying, criticizing the business community for being in line with president xi. tom: thank you so much, our chief washington correspondent.

and the attorney general scheduled to be in front of the house as well. that will be one of the themes on "bloomberg markets: balance of power." david westin in conversation with congressman from illinois, dick durbin. this is bloomberg. ♪

francine: this is "bloomberg surveillance."

london andncine from new york. in spain, pedro sanchez is set to return as prime minister. 85.on 123 seats, up from the socialist leader is close to a majority, though he may still rely on catalan separatists to govern. still with us, marc chandler and david riley. peripherylot of bonds. what is your take on spain? active ando have an overweight position in spanish bonds. fundamentald the story in spain. we thought the political risks were overstated. we have not really added to that the result of the election, which is generally speaking bond friendly. in part, or where spain is

currently trading can tighten further from where we are. but we think there is more value elsewhere. francine: does the election in spain tell you about populism in europe and polling? david: the polls were bang on. it shows that you should not discount the polls, but you should be cap about media commentary. there was a narrative, and anglo-saxon narrative, which was the rise of a populist, far entire euroe.u., far right. and this puts paid to that, at least in terms of the spanish context. sanchez and the centerleft, the socialists, have done pretty well. vox has gained seats in parliament, but they are not kingmakers either.

so that narrative has been overstated. i think spain is a good story. tom: marc chandler, you had a wonderful book about the astronomy, the almost three-dimensional space of all of this. europe is the most interesting consolation to me. what does it look like now? davidi fully agree with that the election outcome in spain -- slightly positive. what is interesting is the economy is not the key issue. will get gdp numbers tomorrow, around 2.5%. contrast is italy, where it will %. lucky to grow 1/10t where thecold war terrain is china. -- shift,at is the germanic

if there can be a dramatic shift, given southern europe? marc: i do not think germany is shifting. they will see a lot of continuity with germany after merkel steps down. her replacement seems in line with her. this will continue, and complete unification. francine: do you worry about the possible trade war between the e.u. and america? david: it is a risk that you cannot ignore. it has been interesting. since we have had the u.s. commerce department submit its report on autos to the president, we have heard very little since then. i do not think as we approach the presidential election in the united states that the administration is going to want to engage in or escalate a trade war with europe.

i do not completely discount the possibility, including europe being particularly fragile at this point. thesene: how do you see possible auto tariffs on european, i.e. german, carmakers? marc: the ecb came out with a report that the u.s. could be hurt more than europe would in these tariffs. if these tariffs would be put on, there would be a lot of retaliation. it would not be good for the road -- not be good for the world. we would seek global trade slow down even further. tom: i look at your wonderful books. you are way out front in the cacophony of europe. it has held together, though. are you looking for a grinding forward? marc: we have to expect it to grind forward. we do not have the current leadership, and order the issues

-- tom: a catalyst. marc: yeah, we do not have a catalyst. tom: where is optimal euro for germany? how far are we away from that? marc: the german economy looks like it may not have grown. germany and italy have a lot in common. for the first time, we're seeing germany more open to these measures. francine: all right, brexit. let me bring you up-to-date. so back to the negotiating table once more. we are hearing from a spokesperson of theresa may saying there are no scheduled talks between the prime minister and the labor leader -- labour leader. this is bloomberg. ♪

tom: good morning. "bloomberg surveillance." francine lacqua in london, i am tom keene in new york. right to it. here is viviana hurtado.

viviana: the imf warning u.s. sanctions could push iran's inflation rate to 20%. the u.s. is ending waivers to a handful of countries buying iranian oil. iran has already been dealing with a weakening economy. president trump's pick for a seat on the federal reserve board is vowing to survive what he calls a smear campaign. stephen moore telling abc news he would withdraw from consideration if he comes a liability. he has come under fire for past writings criticizing cities and states in the midwest. his columns ridiculing women over the years are also in the spotlight. a surprise relation about the polling 737 max from the airline that is the biggest operator of the plane, boeing telling southwest the max lacked a key alert linked to the disaster. southwest got the warning light was standard. it had been on previous 737's,

but airline was told the warning only work if carriers paid an extra fee. the commander of the guantanamo bay president was fired, relieved of duty for a loss of confidence in his ability to lead and he had been scheduled to leave the job in seven weeks. that the newsnies has anything to do with a recent media meeting he hosted. 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. i'm viviana hurtado. tom: thank you. as you know, "bloomberg surveillance" is a nerd fest. francine and i try to do that every day. but there are times when culture overcomes all. uber's get an update on roadshow. and also joining us with marc chandler at bannockburn is one paul sweeney, who has seen all

three "avengers," every episode of "game of thrones." an x but the media. i insist we start with "avengers" now. what is your single observation on the brilliance of the walt disney company? >> the willingness of bob iger to spend billions of dollars over the last 10 years, acquiring the best content on the planet. tom: this weekend is the weekend where content is king. >> right. marvel studios, all the characters. the characters there. and star wars, all of their characters in that franchise. an extraordinary return on investment for shareholders. francine: i am actually obsessed amh the avengers, because i -- cannot believe how much money they were making. 10 years ago, people believed it was only superman and spider-man making money. how genius was it to buy the

whole thing. an: looking back, it is extraordinary investment. nobody does it better than disney in terms of taking these characters and franchises, these comic book character from the 1940's, 19 50's, 1960's the a lot of people forgot about and taking it to the big screen. it is not just the movies. they bring it to the television, the theme parks. creates a tremendous amount of value for shareholders. tom: while all of this is going on, we have "game of thrones." we have the lannister cookie and the westoros cookie -- they taste good. and last night -- we are not doing spoiler alerts. francine: i am not watching -- tom: here are the three dragons coming in and fighting with the lanniseters. we will not do a spoiler alert. [laughter] francine: everyone is so

stressed that your giving spoilers away. the stress level in the gallery is 110%. tom: the lannister cookie does not taste as good as the iron island cookie. "game of thrones," how may people watched? pau: a lot of people. it is watercooler discussion. if you are hbo, it is about creating can't miss franchises. no one is better in cable television than hbo. that is one of the things that at&t bought. the question is can at&t continue it? francine: one last question on the tv and film aspect to all of this. how much do these franchises, either "game of thrones" or "the avengers" have in them? is this another 10 years of life or is it coming to an end? pau: this current art of about

20 movies from the marble franchise has played out, but you can expect disney to mine the rest of the marvel franchise into sequels and prequels. we will see a lot more from marvel over the next five years from disney. and of course you have the "star wars" franchise and all the pixar characters. if you look at the box office the next five years, there are lots of characters and movies on slate. hem: i can wear it just like t hand. [laughter] the stark family. let's go to the roadshow, and uber roadshow in london. is there real substance? >> i think what investors will try to figure out is how long is this topline story going to last? the core ridesharing market is the seller rating. it has decelerated to high single digits now --

tom: high single digits does not get it done. column"new york times" has, uber sees itself as amazon. baloney. mandeep: that is where they go after the food delivery market. that is their next big bet. they will make some acquisitions. they acquired a few companies. that will happen. you will see them buying food delivery companies. that is how they will sustain topline growth. francine: where would he acquire something? is it a region? mandeep: food delivery is a global space as well. ishave seen food delivery fragmented. you have a bunch of companies in the u.s., a bunch of companies in europe really focused on

specific regions. the problem is, like a ridesharing, food delivery is not profitable, or at least the margins are not like the tech companies. at some point, you will hit a wall against a company like uber, which is using 50% of revenue in food delivery for subsidies. tom: the ipo's -- i know it is adjusted, but we have had 2, 3, 4, 5, pinterest and the rest of the ipo's, are they late? mandeep: for them, the timing worked out fine. because i feel like they have priced it better than they would have if they had gone first. they would have had higher multiples. in this case, at least they are seeking normal valuation, not at the height end. in that way, it has played out fine. tom: we have earnings out this week as well. paul sweeney will join in the 9:00 hour.

it has been a mixed bag, yet revenues have been pretty good. have kind of been spitting down earnings, but they have -- we have kind of been expecting down earnings, but they have come up a bit. so investors are still expecting strong tech earnings. francine: what are you looking for in apple? paul: with google, after the close tonight, people are still looking for topline growth, 15% to 20%, driven by mobile. the story for alphabet and google is the growth of their mobile business. people on their mobile devices are searching more and more, so the volume of searches is out. pricing is down. but it is still 50% to 20% topline. tom: file it under "if you have to ask." tesla sees adequate liquidity over the next 12 months,, model

three production 7000 per week, producing model y vehicles, all of this trotted out monday. this is called support the stock, right? the: it is called support stock. elon musk saying we are probably going to have to access equity markets for more liquidity. the bond market is not enough. they are burning through cash. tom: 10 seconds -- should tesla by uber, should uber by tesla's? i am making the show. marc: i think both of them have -- mandeep: i think both of them have a similar jury that they are percent transportation. tesla could come up with the opportunity. tom: ok. don't you dare, spoil "game of thrones" because you have the now.ryen dragon heads mandeep singh. we will go before i spoil anything.

really good.re ♪

viviana: this is "bloomberg surveillance." let's get the bloomberg business flash. nissan and the government of japan at reportedly spurned efforts by renault to engage in merger talks. relations between the companies have hit a new low p there were already arrest because of -- they were already tense because of the arrest of former alliance leader carlos ghosn. warren buffett is making a bet on dubai, opening an office

there. dubai is extending a slump since hitting its peak more than four years ago. the british medical marijuana company back fight snoop dogg's venture from wants big pharma money. oxford anna benoit technologies cannabinoid technologies -- businesse bloomberg flash. tom: thank you. time for the single best chart which straps across the foreign-exchange world. marc chandler over to david riley. it is a chart we showed last week, the absolute long-term 40 year decline in the real yield of the true benchmark, the 30 year bond, not the 10 year -- sorry, global wall street.

event rally, it is a structural decline. what does it mean for jay powell? david: i think what it means for jay powell and the fed is the terminal point for the fed hiking call will be lower than it has been in previous cycles. i think the market got ahead of itself in starting to price in rate cuts by the fed, but it is clear that this secular decline in real yields is one that does mean that the endpoint for the fed will be on a lower level than it was in previous cycles. tom: the terminal value will be lower. the litmus paper is the dollar in the fx system. it is foreign-exchange adapting to the permanence of a low real yield? marc: it is adjusting to this view, but there is still a wide

spread. the spread between the american and the european two year is the widest it has been. we are in a low inflation environment. i just wonder if the cover of businessweek, peter coyle, who is one of the best journalists, always had his finger on the psychology, his cover story is "is inflation dead?" i do not think so. intellectual -- inflation and volatility being dead for structural reasons will come back and bite us in the butt. francine: there you go. it is a technical term. let's bring you over to my chart, on financial conditions. in blue, you have the united states. in yellow, financial conditions in the euro zone. then we have an average of u.s.-euro zone and em-asia conditions what does that tell you? david: it tells me if you look at the fx of the chart -- the

apex of the chart in january, where financial conditions were tight and then subsequently had easing, it was all about the dovish privet by the fed -- the dovish pivot by the fed. there are some of the market that believe given how strong and asset archetype rallied financial conditions have eased, therefore we will get a little bit of a hawkish bias coming out of the fed, but this really comes back to the point marc to, which was inflation. inflation data has been softer than many expected, including myself. i thought inflation would be than it has been . francine: why has it not been as strong as you were expecting it to be? david: if i completely knew the answer to that question, i would not have gotten the original

thesis incorrect. more slack in is the u.s. economy and the ability theuck in workers into labor market. also, the labor power is still relatively weak. it has been hard for workers to push through in terms of higher wages. and with record profit margins, companies are not been able to absorb those wage pressures. sooner or later, i agree in that it is asymmetric. the risks are that we do, towards the back end of this year, start getting inflation surprises to the upside. so i quite like things like breakevens. tom: the rate of changes here are extraordinary. i look at five-year view. to mr. riley's point he made, the market seems dead set against that. think that is where the

market is at. it is a question of where the market will be six months from now. i am watching earnings coming in from the u.s. consumer goods sectors, kimberly-clark, pepsi, are now seeing price increases. it is not being reflected into the cpi basket yet, but over time, it will bleed into it. tom: david riley, give me the upfront in equities. what is bluebay asset management doing? david: we have added to some of our peripheral exposure, particularly in terms of italy. we do like some of the european bank data. one issue we are thinking of this week is the relative underperformance of emerging-market currencies. and, given their valuation, whether that now gates an opportunity to take some exposure there. that being said, it has been

sort of the least well --forming of the race asset of the risk asset classes so far this year. tom: david riley and marc chandler, thank you. driving forward the conversation. chief executive officers on wall street, david solomon at milken. look for that in the eleven o'clock our. we wanted to throw -- look for that in the 11:00 hour. of we wanted to throw up one the articles on inflation thread. this is not a spoiler alert. it is not a dragon from "game of thrones." it is not a spoiler alert. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york and we are watching boeing. the chief executive can expect a grilling from investors. questions may sharpen after a elevationlevation -- that boeing failing to tell southwest airlines at a standard safety feature had been

deactivated. is reportedly still an excellent aircraft in the orders are still coming in. we going out to taylor riggs. if you look at what muhlenberg has tried to do, he has been trying to outline boeing's plan to contain financial fallout, but how many questions will arise on whether there were sufficient safeties put in place to other airlines? taylor: all of today's focus will be on that. -- they have the standard renominate 13 executives and board of directors, but the questions will be on that. the ceo so far has done what he can to reach investors, but we do not have a lot of details. they suspended their full-year guidance last week. we are still waiting to hear when we expect the grounding to be lifted. francine: how can they convince regulars around the world that the single aisle jet is safe to fly? taylor: they said on the analyst

call that they are working on updating the mcas software. investors on the call asked how did this happen? but they said they did not know exact how to happen, but they will work on the grounding to be lifted. tom: did fly this weekend? taylor: i did not. tom: i had an offspring that did. 230 bodies have to get on the next 737 max that takes off. what is the path to make that emotional first event happened? -- happen? taylor: they are getting the faa regulars on board. tom: do they have the public on board? taylor: no. you always get protests at boeing shareholder meetings, but i think you will get a lot more. they were being barricaded out because of the demand -- every

news organization wants to be there. but on the fundamentals, boeing's balance sheet looks good -- tom: let me bring up a chart. boeing is terrible. it has been down. a failure. go back 30 years, and the stock is not even botched -- budged. two standard deviations up here that is a market. francine: the concern is sentiment. how are the people going to get back on a 737. supplyexpecting them to a full accounting of the flight control system, the feature that potentially saw the fall of these airplanes? taylor: if last week was any indication of what today will be ,no. pretty much all they got from the ceo on the earnings call was we know exactly how the aircraft is run, but we do not have any updated information, we are suspending the full-year guidance. you are looking at $1.5 billion

profit being taken off for every month the planes are grounded. by the extended cash buybacks and dividends in order to boost cash and conserve cash. but analysts are still pretty bullish on the street. tom: thank you. taylor riggs looking carefully at the trends in boeing. we have much more coming up. after the "surveillance" nap this afternoon, i have to go back to "avengers 1" so i can get up to speed on the black widow. [laughter] francine: no spoiler alerts. theyu look at "avengers," took in $1.2 billion. ♪

♪ david: the hunt inflation.

the u.s. data out today as the target in the fed gets ready to discuss what can be done about it. earnings extravaganza. 500 report the s&p their earnings this week. so far, not so bad. and spanish prime minister pedro sanchez wins the election, but still needs a few more votes to form a majority. can spain finally form a stable government? welcome to "bloomberg daybreak" on this monday, april 29. here with lisa abramovitz. the big story is "avengers." i didn't make it. i talked to my son who watched it. everyone elsely made it because it absolutely smashed box office, $1.3 billion. r