cehicd morning, i'm nejra live with manus cranny live from divine. -- from dubai. this is "bloomberg daybreak: europe." >> the author something bad happening has doubled. that is why the markets are it.ting to ra: jamie dimon says he would prefer no trade deal that a bad.

declines in asia as the s&p 500 has its biggest fall since march this after exports unexpectedly fell. and toyota's profit misses of buyback stabilizes the price. focus in europe turns to results from commerzbank and siemens. manus: commerzbank delivers numbers and they are banging in line when it comes to revenue. the market is suffering from shrinking market share in germany. you have got an equity ratio a little bit ahead of estimates. underlying revenue for this year will be higher than the last year. course, this is the commerzbank-deutsche bank breakdown that leaves the bank vulnerable. we spoke to the ing ceo last

week, he would not tip his hand. jpmorgan is saying the company now has a target on its back. return on tangible equity by 2021 is just under 5%. the ceo will continue to work on profitability. it is a weaker german economy. these are the challenges for commerzbank, where they go to next? they are planning to pay out dividends of a ratio similar to 2018. nejra, you have got more breaking news, looks like this out. stephen engle's is live from frankfurt at 10:30 a.m. u.k. time. good morning. nejra: good morning. second quarter industrial comes in at 2.4 one billion, a clear beat of estimates.

that is the red headline you want to dry your eyes to. going to other numbers, siemens confirms their industrial profit margin and basic targets. we are also seeing second-quarter sales number coming in at 20.9 billion euros, slightly short of the estimate. second-quarter orders rising 6% to 23.6 with an order backlog of 142 billion. the thing you want to focus on is siemens confirming targets and the second-quarter adjusted business coming in at a beat. also, the supervisory board has approved the spinoff of gas of our. power.and pwoer. -- they are carving out and listing their gas and power division and cutting jobs in a sweeping overhaul of the german engineering giant. manus: let's have a look at the

new zealand dollar, it is like a currency that has gone to rounds with mike tyson, have a look. battered and bruised, it dipped. the market says there is another rate cut to come. and the australians left rates unchanged, cap the powder dry -- kept the powder dry. but they are forecasting the ocr falling by third quarter. again, repressed inflation, a lack of this capability is a global issue. who says that trade angst was the only thing the market had to deal with? you got the markets of turnaround, because there's little bit of crude stuck on russian anchors -- tankers. view dimon reiterates his that yields are extraordinarily low.

the extent of we also must talk about if you can really bank on an inversion in the yield curve being a real indicator of a recession? in termseeing day to of protectionist mode against the very limits of trade angst -- the veer limits -- the virulence of trade angst. nejra: we had the eu commission cutting forecasts as well and comments from nancy pelosi, also selloff. the we saw the s&p 500 dropped 2.4%, the biggest since early january. sincesed down, biggest march. teachers are steady in the s&p 500. question i want to ask is if

the selloff is unremarkable. meanwhile, the yen is bid. the msci all country world index was only down .1%. as a big of a drop and emerging-market equities. markets in this environment of are they the first place you want to get out of, or are they a place you want to hide? juliette in singapore has more for us. how is it looking? >> still looking great, as you would expect. grilli weighing into japanese stocks in late trade off by almost 2%. seeing a fair a lot of weakness in stocks, they had trade

numbers. the csi 300 a little more resilient than some other markets. imports were higher, all of this coming through before we had the latest headline over these trade talks. the asx closing weaker by .5% and a weakness. let's have a look at some of the stocks we have been watching in detail. toyota andmentioning its forecast lower then what the market was looking for. but the announcement of a buyback has stemmed a deeper slide in shares by 1.3%. one,nt is an interesting remember beijing cracked down on a number of games trying to stem addiction. tencent has swapped out one of those games it did have a ban on for a more popular chinese game that will be more profitable.

in australia, the maker of the temple treasury estates falling substantially. the biggest loss we have seen in the ceo has sold over 400,000 shares and there was a call for a short wager on the company. manus. manus: thank you very much. the very latest on the asian markets. equities are following a downward move in the united states of america. president trump's threat of higher tariffs is continuing to reverberate, almost like day to -- two. it shows markets unexpectedly , thisnd ground in imports was before the abrupt turn in trade talks that led to re-escalation. our colleague

stephen engle sat down with the ceo in beijing and asked him for his take on the back and forth trade dispute. >> i don't think they get the deal done by friday. i hope they finish agreeing. but whatever the odds were, i think it is still 80% to get it done but the odds of something thatappening has doubled is why the markets are reacting. there not just afraid of the direct factor. could slow down global growth or hurt a lot of countries around the world. projectingis already local growth to be at the slowest pace since the global financial crisis. with a china deal, could be as dire as that? >> the world economy is doing ok. ofna is growing, trillions dollars. america is growing almost a 3%.

-- almost at 3%. if this goes south, i think that could change global growth. >> do you feel talks are getting a little bit louder? even here, as there is a bit of a push back to the comments from donald trump. and in that sense, do you hang tough, or do you have a less than ideal deal? >> i think both sides should be do best should be doing what is in their best interest. should be doing what is in their best interest. it is good for both the chinese and the americans. just to get the proper trade deal done. it may take more time, but we should do a proper deal. i would rather not do a deal them to do a bad deal.

i think it is a bad idea for america and china. and remember, japan and europe weo had invested interest are not coordinated, but they would like to see a proper deal done and then they can support it. >> can they overcome big differences? a variable timetable, as well as a reversing of the technology transfer? think there is anything that can't be resolved. china has already opened up a lot of industry. they have been doing that anyway. they need to reform in their own markets. i don't expect the chinese to do anything in our interest, i think they do it in their own. but americans should not blow this out of proportion. while you don't want unfair

competition, let's not blow it out of proportion. a country like china is allowed to have industrial policy. i wish we had better industrial policy. >> what are your concerns about the market? perhaps the rally in the recovery is over. are you concerned that donald trump would like to see the stock market performance as a referendum on his success as president? >> i think it would be a huge mistake for american policy to be set based on the stock market. i never worry that much about it. 3%,world is growing at china is growing at 6.5%. how can we serve clients over time? the economy will fluctuate, people always get scared or

overreact. that is not how we react -- run the company. nejra: that was jpmorgan ceo jamie dimon speaking with stephen engle at the jpmorgan summit in beijing. joining us now is the head of investment at rbc wealth management. great have you with us. let's talk about the selloff in global equities. interesting the selloff was more pronounced in the u.s. of them elsewhere in the world. more than 90% of the s&p 500 is down. we are talking about the broadest a day of decline since the christmas eve selloff. and you did see tech sensitive centers leading the decline. how much of the selloff is due to trade asked? >> tough to say. we know that valuations are not

vastly stretched, but above average. there has been a sense of complacency building in in markets. sentiment had become very bullish. you have had dovish central banks, better than expected results, all of it giving a sense of comfort. over the weekend, the trump tweets, which really meant that people have to revise their outlook in terms of the trade deal. we had mr. dimon talk about what he thinks in terms of a prospect. we put thet is 80% possibility of a negative off somet 25%, shaving 4% of growth for the u.s. and china. we think there is a slightly higher negative outcome which will impact growthless. -- growth less. manus: we have been seeing

numbers if it really goes into deep freeze. good morning to you. one thing that caught our eye was volatility. we have asked a number of guests this question. this is the front month over the second month. if a more aggressive story. we could not have a deal by friday and go into a protracted period of ongoing discussion. do you hunker down and buy protection in the form of volatility protection? we have been telling clients that, given the rally we have had in equities about to become slightly more defensive. you can do that in a number of ways. you can look at sector allocation and take away from sectors which have done particularly well. such as technology, such as industrials, and in terms of the .yclicals, redeployed in areas

even to look at some of this positioning. we like consumer staples in particular. you can look at the sox we have and our portfolio and make sure they are dividends brewing high-quality stocks. nejra: it is interesting you say some of the sectors to move away from our industrial sensitive, i know that is not everything to do with your strategy. there is one thing, and a lot of commentary out there is saying that, as manus was pointing to some of the stocks go on and on. there is no sign that china will step away from that industrial policy which could cause more tension, even if they are not calling it that. our equity traders focusing too much on the tariff on-tariff off rhetoric? not focusing enough on the retracted tension?

some have said the selloff is unremarkable and healthy. frederique: people would like to hear there is a deal in the issue is over, but it is likely it will drag on. it is not only trade, but geopolitical issues which are intertwined. this is likely to go on for many months. one thing the pboc has done is a cut and set the weights at the lowest level since 2015. the pboc, i would say they are arming up. clearly, the health of the chinese economy is very important for markets. even though the focus is on trade talks. seen out ofwe have china are surprising to the upside. the momentum has not kept up more recently. it could be that more stimulus is needed.

clearly, we have to see what is trickling through to the economy. manus: doesn't get down to the real economy, that is the question. us, fromhave you with rbc wealth management. firstget a quick look at word news from debra mao in hong kong. jamie dimon is warning investors to prepare for higher treasury yields. there are often missed turning points and urges his board to think about yields climbing whether they had 4% or even higher. but he declined to give a forecast of where they are heading. i think the 10 year at 2.4 is extraordinarily low. i think that when government has bought 10-12,000,000,000,000 dollars in sovereign debt, it has fixed the 10 year.

4%, when you are having good growth, is not a that number. -- a bad number. the federal reserve vice chairman has pushed back against speculation it will cut interest rates. bank is in aentral good place in the current stance will bring inflation back to target. his comments echoed those of chairman jay powell at last week's news conference. >> inflation has been running on the soft side, recently. we think there are some temporary factors to release some of that, so the baseline view is that inflation will begin to move up towards 2%. but we are certainly looking closely. cut --central bank has cut interest rates to 1.5%. the first central bank in the developed world to begin loosening policy.

remainy inflation will below 2% until mid-2021. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus, nejra. manus: thank you very much. some live pictures of the president of iran. get ready for a statement in regards to the nuclear accord. is he ready to step away or water it down? will are expectations he notify those who signed up for the agreement in tehran. we will monitor the story right here on bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." let's take you back lines from iran -- to the ines from iran. the president is saying he will not withdraw from the nuclear deal, that was expected, and today we take the first steps for the framework. he says he knows how important the nuclear pact is, of course, this is all about progressing after the waivers were stymied last week. back to zero in terms of iran's exports. we will bring you more from the president of iran as comes. they will scale back the nuclear commitment to let's talk about the other subject, earnings season. the german industrial giant siemens has posted their second

quarter profits exceeding commerzbank,ile they give us the first quarter revenue matching estimates for the lender, but missing out on net income. let's get into the earnings season with our guest, head of investment strategy at rbc. these are two idiosyncrasies of germany, one, banking. and siemens is an industrial, global story. there is a warning across the european monetary. you want toyour take on board -- how much of europe do you want to take on board? frederique: the banks are being very challenged, low interest rates, most of the disruption they are not expensive, but they could be a value trap. i think the question about europe is going beyond headlines , beyond the macroeconomic

description and situation. you have to look at companies which are secular growers and benefit from trend is which are not domestic. for global, robust companies with a strong business model. they will pay good dividends and generate good gains for shareholders. it is very much about stock specific markets. the headlines are not always positive. you are not necessarily looking at specific sectors, but how good are you about the downgraded? frederique: it is important to monitor monthly data, then look at what -- then look at the eu. are giving ushey

is very important and very few companies have downgraded their guided -- guidance. nejra: our guest essays with us. coming back, we hear from the fed. this is bloomberg. ♪

>> that is why the markets are afraid, it is reverse of global trade. it will slow down global growth. manus: that is jamie dimon speaking exclusively to bloomberg. he discussed the market response to the trade deal. you would rather not do a deal then do a bad deal. he has been on the phone for -- with theresa may doing deals that are not good deals. the point is risk has risen. we had a conversation with ubs arehe said clients

interested in buying china [indiscernible] but it depends on how long the deep freeze is. the key thing. we are looking ahead to friday and the tariff story. i was mentioning earlier whether traders, equity markets, investors are focused too much on the tariff on, tariff off. sticking to a be china industrial strategy. even if it is not [indiscernible] another interesting comment is yields are extraordinarily low and 4% would not be bad on that 10 year treasury yield. he did not give a timeframe on that. manus: he has been banging on about higher yields. he talked about four or 5% to which is not necessarily off-the-wall. esa -- you are seeing a whole host of talk from the fed and we've will hear more about rates are appropriate for the moment.

little bit of insurance that is inherently exposed to interest rate risk. >> we have not seen that on the 10 year yield since 2010. it would be a long way from where we are. first quarter net income comes in at 632 million euros, the estimate was 620.7. it is a beach of first-quarter net income from munich re. 800 75 milliont euros, that is amiss on 979.5 billion euros which was the estimate. at 2.5he net result billion euros. its first-quarter pnc reassurance combined ratio was 97.9%. the estimate of 98.5%. manus: i love the combined ratio. let's talk about services, they

ebitdasing the 2019 forecast. 760 two 810 million. 2019 guidances raised and 566.7 fromes in at 558 point -- 558.2. nejra: let's check in on the markets around the world. here is dani burger. we are kicking off with you. indian markets have started lower along with what we saw in global equity markets. nervousness creeping in. how much of that is macro stress versus india's particular factors? said it ishave [inaudible] from the globe. we connected quite strongly as

well and started off low in-state lower today. today, we start off almost all the key indices are there. they have gone [indiscernible] in the first one and a half hours of trade. why thisee partly as is happening, there is nervousness about what is happening, the election two weeks from now and as a result, markets are shooting up significantly. currently, the india fix is at levels not seen since 2016. as much as we would like to believe these are at high andls, we have seen in 2009 2014 that volatility tends to shoot up to [inaudible] levels. do not be surprised if the [indiscernible] inches up from where we are right now and there could be some nervousness around the election verdict over the next two days.

back to you. manus: a little bit of volatility never killed anybody, it is a question of whether or not you are protected. you have got the strengthening in the yuan and yet i mentioned this earlier, they have cut their ratesetting, the lowest in 2015. join the dots for this -- on this for me, it is not paring up. >> it is related to trade so -- because you had the pboc cut the reserve requirements for smaller domestic banks and this is something, any volatility that comes into the market because of combat itwill help with listening liquidity and that is how the market is reacting. i want to show you the chart that illustrates what you were saying, that's why 15 figure is that overnight repo rate and this is that, the market reacting to that cut, to the an

additional liquidity. it drops the funding their, dross -- drops drastically down to about the lowest since 2015. that level is 1.14%. some china help markets as we have seen them selloff due to trade. not completely helped because we are seeing a few red out there. this does give investors more confidence. i know you love a good volatility chart as do i. i am throwing this one in here and this is emerging-market volatility versus the g7. we have been saying where is emerging-market volatility? all this has been going on. markets have been bracing for more volatility in a.m.. e.m. fx volatility in the white, it is step -- it has gapped up. -- it is gapping up again and there are some idiosyncratic issues like the lira falling on political pressure but investors are

bracing for more volatility with the trade. nejra: you have to look at the vix as well. thank you for -- and so much. let's get the first word news with debra mao. debra: china's exports unexpectedly fell in april as imports rose. this was before the abrupt turn in trade talks that had led to a free escalation of the dispute with the u.s. the china hawks in the white house are gaining the upper hand. these latest of elements raise the prospect that talks could collapse entirely. warming -- is warning investors to prepare for higher treasury yields. he said they often missed turning points in the market and told the board to think about yields climbing whether they hit 4%, 5%, or even higher. he is inclined to give a forecast of where they are heading by years end. 2.45 ornk the tenure at

whatever is extraordinarily low. governments bought $12 trillion of sovereign debt, [indiscernible] 4% when you're having good growth is not a bad number. >> iran is scaling back on the comments made on its nuclear pact. they submitted a letter to the nations that a party to the deal. the -- in response to the u.s. rack -- ratcheting up pressure. governments import iranian oil. this is a drive to cut oil exports to zero. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: thank you very much. big red headline before we

get to the next section, to bring this to you, hitting the bloomberg right now in the telecom sector. tpg telecomtralia, merger has been blocked by the regular readers. this is one of those fresh headlines in terms of m&a action across the world. by merger has been blocked the regulator in terms of the reasoning, we will continue with that story as it comes. exclusiveg you are interview with richard glared at who says the fed is in a good place and he sees a strong case to move rates. the vice chair talked to mike mckee. take a listen. >> we think the u.s. economy and monetary policy is in a good place. right now, our focus is in sustaining national employment and price stability. we do not see a strong case to

move rates in either direction, but this data comes in, we will be looking for indications on that. >> in march, jay powell said that low inflation was one of the major challenges of our time. last week, he said inflation problems are transitory. people are confused here. >> what he is referring to is for the global economy, whether he or not you look at the eurozone or japan, if you look at big chunks of the advanced economies and the global economy, inflation is well below the levels they would desire in those countries. in context of the u.s., our inflation rate is near 2% and there are some transitory factors we think will play out. aboutch, we were talking the global economy and the more recently were talking about the transitory factors in the u.s.. >> jay powell said last week they diminished but trade talks with china may be in jeopardy. have you modeled the impact on

the u.s. economy if the president were to impose the additional tariffs? richard: what we have determined is so far the trade measures put in place only had a very modest effect on the economy last year. and we are hopeful that there is is obviously that up to the president and the negotiations that are ongoing. the outcome, we will take that into account in future policy. right now, trade is not having a big impact on the economy so far. was richard clarida speaking exclusively to mike mckee. still with us, the head of investment strategy at rbc wealth management. from the companies you look at in the us, how much evidence do you see that we could see a pass-through in inflation, some pennies raising prices to deal with wage growth but also the risk of tariffs and increasing commodity costs? areot many companies

commenting on that. they are commenting on the underlying environment which is better than expected. they are commenting on buybacks, one of the [indiscernible] to have a buyback program and they are talking about cost initiative. wages,r to upset inflation, the material. it seems to be an cost-cutting but there are price increases the bulk of companies are reacting. manus: it is always easy and hindsight, we have great hindsight, valuations were stretched, we were do a catharsis. what our team have put together of -- 500n the s&p are racing against that. multiples are hitting levels that we saw 20 years ago. to that end, do you think that a drawdown, do you think there is a risk that a drawdown amount we

will have a correction and if we have a correction in the u.s., does this create better value and better entry points on stretched valuations at the moment? guest: price-earnings ratio, there is a number of valuation which are suggesting valuations are starting to be stretched and after the strong run we had, we had been expecting a bit of a pullback. i think a natural market behavior and yes, we would look on theto positions pullback, we expect that over 12 months view that there would be some gains including modest gains, equities including dividends. manus: thank you so much for being with us. head of investment strategy at rbc wealth management.

continue the conversation on bloomberg radio. let's turn our attention to another election, this time, south africa. the african national congress which has ruled for trying five years is almost certain to win. the key question is about how much. volatility measures leave no doubt that the rand traded, [indiscernible] let's get the latest. joining us now from johannesburg. just what is it that -- in this election? guest: opinion polls are pointing to the ruling african national congress which is led by the president extending its monopoly on power. this is a power -- a party that has been in power for over 25 years. what is critical is that he positionecisive win to his own party.

this is a party that has been divided through factionalism and a narrow victory could embolden his critics and force the party into coalitions to keep control over those key provinces. essentially, limiting his policy options and his ability to deliver on the promises he has made to south africans and the investment community. thank you so much for joining us. coming up, we speak to go bank about the german licensing company reports earnings. that is next. this is bloomberg. ♪ s bloomberg. ♪

nejra: this is bloomberg daybreak europe. i am manus cranny in our to buy studio. we have numbers, second quarter

numbers have slumped, down more than 50% than a year earlier. talks with bain capital and carlyle group on a possible takeover are continuing. joining us now is the cfo of ostrom licked. licht. in terms of is it this? when will you get control of these numbers and turn the situation around? go: thanks for having me. the tough market environment continues in both our key markets, automotive and general lighting. we posted a decline in revenue of 13.5% and adjusted margin of eight, less than a year ago. a big factor was china again.

where the business declined further. we had a week qr but in the second quarter, down by approximately 30%. china makes up for 20% of our overall business and we saw still the stocking in our supply chain, automotive and general lighting in europe as well as in a pack. we took action on cost and increased our savings target to more than 200 million by 2021. we believe now when we look at the second half that things will stabilize somewhat for us. we are confident on the back of the cost programs we are running. speak to youto this morning. some of the commentary coming through from your ceo after the earnings is that your long-term strategy is implementing new application and the led sector remained intact and he says the focus is on optical automotive, and digital applications. you talked about some concerns in china and when you look at those sectors, so my conductors,

automotive, a trade war springs to mind. there is a lot of trade and market at the moment. how concerned are you that your business could take a hit if we do not get a deal on friday? be twofold, itd would still create some havoc in global supply chains, especially to our customers, and we would see an increase impact -- increased impact from tariffs in the second half. the number is roughly 20 million that we expect for the full year if the 25% is increased but the bigger impact will be on the supply chain. we first will have to see if they will be implemented and how. we have 10% today so we have seen some effect, that is what i was mentioning when i was talking about the stocking. we will see how that develop -- that will develop. it is hard to predict. --a: is carlisle and been

and rain walking away, how do give the market some sense of and assure -- an assurance or perhaps we should have a risk morning. where do you stand percentagewise? you: i can give probabilities. the only thing i can reconfirm is what our ceo said before that the talks are continuing with ain andd carlisle -- b carlisle. whetherput a chance and there will be a bid or not. nejra: the other thing you have been doing is trying to diversify away from being as reliant on automotive revenue as you are now and getting into things like horticultural lighting. how do you see that market developing? how is that diversification going? houston will it happen? bingo: it will take some time.

more than 50% of our revenue base is based on automotive. theike automotive despite insecurity we see and it will be an engine of growth once we come out of the correction we see now. we have to be careful to mix up and economic slowdown and corrections with our strategy. upger-term to build additional businesses and horticulture and other areas will take some time, but they are progressing very well. we made an acquisition in that market that is almost growing 50% at this point. it will take some time because automotive is a big share of the oz room business -- osram business. manus: if these talks with notisle and bain do succeed, what is the backup plan? are you going to have to take serious action in terms of reducing the size of the business question mark what is the plan b? ingo: it is still plan b because we continue to implement our

strategy. we have taken measures on costs to respond to the market slowdown that we are seeing. if you refer to our ceo saying that we will continue to build up businesses outside of automotive, that we will continue to do as we do it today. manus: thank you for joining us. that is ingo bank, the ceo of licht.- osram the nuclear part of pack. the country has submitted a letter to various nations that are party to the deal. this comes after the u.s. ratcheted up economic pressure earlier this month. let's bring in our executive editor to the northeast and africa. what is iran trying to achieve, they are not stepping out of the deal completely. >> know, they are not. they are telling the partners, especially the europeans, the message is aimed at the

europeans telling them to my we don't want to step out of the deal, but if you are going to allow the u.s. to proceed down the path as it is, which is basically taking away all the interest we get out of this deal, we are going to gradually step away. -- thee giving of europeans the deadline. you have 60 days to show us that you are going to be capable of fulfilling some parts of the deal, especially specifically banking and the oil sector. so we do have some benefits that would encourage us to remain committed to this deal. you.: good to speak with according to the letter, there should be other nations meeting the request, the islamic republic will revert to its pledges. can we say with any certainty what the outcome might be here? is -- i am not sure i

see a clear path for iran. the europeans are keen to stick to their agreement. and the europeans have tried to put in place measures that would enable iran to get some of the benefits. i think there is great doubt example, private companies would continue dealing with iran as long as the u.s. is putting such massive pressure on iran. i don't see much chance of revival in oil sales or at least maintaining the kind of oil sales they were able to do initially. i don't see much chance of banking sector getting some money they were hoping for. nejra: the executive editor for the middle east in north africa -- north america, thank you. --ie dimon prefers to not prefers to not do a trade deal then do a bad one.

the s&p 500 having its biggest drop since march. bloomberg users can interact .he chart using tv we will be back to talk through all the markets. this is bloomberg. ♪

hiss: good morning, i am in granny from -- manus cranny from dubai. 80%,think it is still whatever you thought there were was probably doubled area that is why the markets are reacting to it. tells jamie dimon bloomberg exclusively he would prefer not to do a trade deal than to do a bad one. the full interview coming up. the risk factor. oil holds steadily as president rouhani announces iran will scale back its nuclear pact commitment. point to as

bounceback after asian stocks slump on trade concerns. and after the merger. that never was. boostzbank reports a 12% in net interest income for the first quarter. we speak to the ceo this morning. nejra: good morning, welcome to daybreak europe. let's get to some news from imperial brand. focusing mainly on cigarette products. ahead of this, analysts were looking for the next generation outlook. that is what has been in focus. let's see if there is commentary on that before we go through the numbers. first half adjusted operating profit comes through at 1.6 2 billion pounds. the estimate was 1.6 billion so a slight heat on the first half

adjusted operating profit. it is on track to meet its full-year views, the medium-term remains for eps growth and taking a look at some of the details, the first half adjusted operating profit, that is a red headline, that is a slight beat. first half revenue comes in at 14.3 9 billion pounds. the interim dividend is that 62.5 cents pence. looking at first half total tobacco volume, that comes in at 115.2 billion, the estimate was 116. slightly soft there. going into these results. ubs was saying that tobacco revenue excluding and gps, which is the next-generation product would decline marginally with vaping revenue expected to grow. we speak exclusively to the ceo of imperial brands.

do not miss that interview later this morning. bit of breaking data from germany. this is probably the most forrtant bench mark we have where's europe. industrial production prices by 1.5%. penciled in a contraction of 1.5%. year on year, we are still in negative territory down at .9 of 1%. the market had penciled in a contraction of 2.6%. the eu cut germany's outlook saw euro areathey risks coming through. that data is a little bit better\ coming through. we are way to break some itv news. let me show you the board for the bond market. jamie dimon says get ready for this equilibrium to come in. bond prices come back a little. that is important. there's nothing wrong with the fed. we have dropped in terms of

yields since last november. the yield curve inversion will get harder as the rates are low. over three basis points at the moment. bonds a little bit soft, you have equity markets in asia playing the catch-up to the u.s. let's see how the day plays out. nejra: you mentioned itv. numbers.ing you those total advertising down 6% of the first half, that is a red headline. they say continuing to see double-digit growth on online revenue, on track to launch breadbox in the second half of 2019. the key is the total advertising down 6% over the first half. yesterday, we did see a selloff in global equity markets. the u.s., the s&p 500 having its biggest drop since early january down as much as 2.4%. it closed down 1.7%. to put that in context, the

lowest since april. is it all about tariffs question mark it was industrials and tech that led the losses but you could argue the losses have been fairly new and a bit of a healthy correction. 600 lower.the stoxx heading toward european equity are get open and 55 minutes time, ftse futures flat, dax futures in the green but overall seeming to take a pause in the selloff judging by u.s. futures. let's check in on the markets in asia. juliette saly has more and selling in asia, not taking a pause. juliette: we are down for a third session in a row on the msci asia-pacific index. widespread selling, hard to find a winner in these markets. that isthe only one moving higher. australia's market closed out lower by .50 1%.

japan eager -- weaker after reviewing trade in the wake of those golden week holidays, off by 1.5%. the yen at a six-week high and selling coming through in china. we had the trade numbers coming here today. exports falling in april but imports were higher. the trade wars between the u.s. and china weighing into investor sentiment today. also the indian market sextinuing to fall, the sem off. and the worst-performing g10 currency, cutting the cash rate 1.5% and the central bank saying the reduction was needed to support jobs and reach the inflation target. qe at a six-month low. the aussie dollar was lower, we were's -- we're watching those numbers coming in closely out of china and it has picked up a little bit and we are gaining

some ground. the rba leaving rates on hold yesterday. also looking at the [indiscernible] a little bit stronger but there could be further weakness according to a number of economists we are speaking to, they are saying that if the china-u.s. trade tensions escalate, the yuan will hit that 200 day moving average. saly inuliette singapore, thank you so much. european and u.s. futures point to stabilization after asian equities slumped on trade concerns as we heard from juliette. german industrial eight i came in slightly better than expected. a different story in china this morning after data showed beijing exports unexpectedly fell in april with imports rising this morning. our colleague stephen engle sat down with jamie dimon and ask him for his take on the trade back and forth. >> i don't think they get the deal done by friday, i hope they

agree. it is still 80% getting it done. whatever you thought they were, that is is doubled area why the markets are reacting. they are not just afraid of the direct effect. trade, itrses global andd slowdown level growth heard a lot of economies around the world. >> the imf is rejecting growth to be [indiscernible] since the financial crisis and that is with the deal. world economy is doing ok. china is at 6.5%, america is growing at 2%. that is half $1 trillion of growth. it is still active. the fight -- fly in the ointment is this. that could change global growth. the talks are

getting allowed her voice and even here, as there is a bit of a push back to the comments coming from donald trump and in that sense, do you hang tough or less thangle for a ideal deal? >> i think both sides should do what is in their own best interest. so hang tough, there are serious issues. they need to be seriously resolved. i think it is good for the chinese and the americans. either side has to do something, it is a terror -- terrible error to say we are doing better and the economy. just get the trop -- the proper trade deal done. i would rather not do a deal then do a bad deal. i think it is a bad idea for america and china. anan and europe also have invested business. they would like to see a proper trade deal done between china and america.

they can support it. >> can they overcome the difference of getting a verifiable timetable for implementation of their pledges as a reversing of the forest technology transfers and other big issues? jamie: i don't think there's anything that can be resolved. china has opened up a lot of industries. we have 25. they have been doing that anyway. they need reform in their own markets for bond markets and equity markets, for transparency, rule of law. they need that. will act in their own interest. -- a lot of fair enterprises do not do well. let's not blow it completely out of proportion. a country like china is allowed industrial policy. i wish america had better industrial policy. left him work it out.

>> they have been selling off at 2.1%. perhaps the rally and the recovery is over especially in chinese stocks. are you concerned that what may be donald trump would like to see is the stock market performance on -- as a referendum on his success as president. is he willing to put that aside to get a better deal? jamie: i think it would be a huge mistake for american policy to be set based on the stock market. i never worried that much. the market has overreacted two different things. the world is growing, america's growing at 2.5 percent to 3%. china is growing at 6%. how can we serve those clients over time? fluctuate.will people always get scared or react and overreact. that is not how we run a company. i am not worried about that. j.p.: jamie dimon, the morgan chase ceo. speaking in beijing.

you with us today. trade in the eye of the storm. the question i have for you, richard clarida made this point. trade has not growth -- has not hit growth yet. which is rather disingenuous. it may have hit the growth numbers in the usa but it has not impacted global sentiment. how concerned are you that we are going into a deep freeze time on these trade talks? guest: certainly, i would agree that there has been an impact on growth. ironic.mewhat the u.s. is going to talk about protectionist talk to why the net trade was a big boost over u.s. growth in the first quarter of the year. when we look at europe, it is hard to say that the slowdown in global trade has not heard

growth. centraloncerned, our case remains that there will be a trade deal. we also see a case for the chinese authority to reform their economy and make it more open and that should help somewhat those talks including intellectual property rights. the rumor has been limited by those bad numbers in the case of china. to giveght be less keen up on something in terms of their experts. we are concerned and think when it is easy europe, to tip the balance between slow growth which is what we are seeing now and the recession. germany will be at the forefront of some of those concerns. expressed hopehe for a trade agreement but added

that is not the outcome, they will take that into account in future policy. how contracted and how bad with this trade war need to get for you to start factoring in a rate cut from the fed? >> we know that the fed takes into account the situation in the u.s. but also the global situation. the global situation is what made the fed more cautious, it was always about the slowdown in global growth. the -- there is a good case. if trade talks were to go down the wrong direction, we might need to take into account the second implication before we were hearing about possible retaliation and things of that sort. that could quickly turn the fed toward possible rate cuts. that is a possibility. it is the risk as i see not just growth, but also for the great reflation trade.

there is, let's all get down on our knees and play at -- print the altar of china for reflation. this kind of angst threatened that reflation, doesn't it? from be a: certainly. markets work -- were complacent in the first part of this year. everyone was looking at a possible trade deal. it is fair to say that there is some strength in terms of the domestic economy across the world. and that is what is keeping europe afloat, we are seeing that in the u.s. as well. it is true that we are looking at china for growth in this part of the world. we are among those who have consensus growth in china that held live -- helps lift growth. there is an underlying driver of translatet they did

into hard numbers in the second half of last year but in the first part of this year, we are seeing more of that, it is not just about china. our guest stays with us. we will talk more about europe. let's turn to commerce bank area the german lender added 123,000 fuelingil customers better than expected results for net interest income. the numbers should give a boost to the chief executive after the breakdown of merger talks with deutsche bank. let's speak to matt miller who is in frankfurt area degree to have you with us. we mentioned a couple of them but take us through the bright spots for commerce bank. spot really ist the fact that costs are not is not and revenue falling as much as the street may had expected. costs have remained stagnant over the last couple of years even as revenue has come down at

2.16 billion euros, it matched analyst estimates. they're able to make money and that is because they are adding 100customers, the added 23,000 private customers, 800 corporate customers, and they are lending more money. this is part of the ceos strategy to boost revenue by adding customers and trying to take market share in the german lending market. manus: good to see you this morning. bi have written a lovely piece. commerzbank has a target on its back because they are not delivering the return on tangible equity, are they, and that is the issue. where do they go from here, do they need to bulk up and do a deal with ing? matt: right now, they are saying they have a standalone strategy, they are fine-tuning and they will get the details of that after the summer so it is a long way away. ing has expressed interest. we also know that other banks

have -- that have a position in germany like santander, bnp paribas have an easier time lying commerzbank because of their position here will make a cross-border deal less difficult. people tell us that unicredit and ing are interested in the possibility of a bid. manus: the cfo would not outright say no last week when we were chatting to the ing cfo. great to see you, good luck with the interview later in the day. matt miller, our man in berlin. give you just give up quick let's have a look at european equity futures, a couple of different bolstering and entering rem's coming. there is the euro stoxx 50. i tv, talk about advertising revenue getting battered by 6%, down by 6%. -- the earnings

season has not been as torture does everyone thought it would be so far. is a: yeah, and there mixed picture. in terms of how u.s. futures are set up, you're seeing them dead flat on the dow and s&p. equities or the branch of the selloff. the breath of the selloff that was stunning. it was mainly tech and industrials. was down. s&p we will talk markets and focus in on the outlook for europe next. this is bloomberg. ♪

>> president trump appears to be crazy. i call him rationally crazy. he wants to squeeze a better deal for the u.s. and he wants to appear to be tough in front of american political stakeholders. but at the end of the day, he wants a deal. manus: the theater of trade wars, the thoughts from a former adviser to the people's bank of china on trade tensions as they continued to run markets. i am manus cranny in dubai. hitch inam narrative london. the european commission has cut the growth forecast for the euro area. the projection of german expansion how the most pronounced cuts, it was cut to 0.5% from 1.1%. cuts reflect economic weakness in the region and this is due to a slowdown in the global economy much unresolved

trade disputes, and exceptional weakness in manufacturing. still with us is the european economist from hsbc. how does help us to figure this out. i get differing views on europe, whether we are stabilizing or we have reached the bottom. what are people missing when they are looking at the outlook for the eurozone? fabio: italy has some problems of its own that germany is 50% of the economy is exports and they are exposed to the automobile industry and china. that is why germany is being hit hard. what people might be missing is there is resilience in terms of the domestic side of the economy and that we are seeing it through real income, continuing to grow strongly. employment keeps falling and

including an march we saw the unemployment rate that keeps coming down. there should be underlying strength as long as people are willing to consume that amount. we could see that coming through in the data. there is some fiscal support. effectivelyt time since the crisis, the eurozone deficit should increase,, it is dwarfed compared to that of the u.s. a additional boost to domestic consumption. extent will italy policy bolster the case? everyone stepped back on their expectation last week. are you a buyer? are they a panacea to our issues at home in europe? [inaudible] as ecb tried to portray

additional stimulus. the only alternative would have , that isverage something the ecb would not have wanted and the current -- at the current time. it cannot be seen as an additional stimulus. isthe ecb said that -- there stimulus in the pipeline. they are keeping the balance sheet, they are buying bonds that come to maturity and might be considering other things. the truth is the tank of the ecb is running low. the one that would happen most growth that q1 point forward be the ecb because it reduces the pressure to deliver additional stimulus before the end of the year. manus: the tank is running a bit low. glad to have you with us this morning. he continues his conversation with the radio team after this show. let's show you what is coming up on the show.

the cfo of commerzbank.

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to bloomberg to markets. we are they from the city of london. i am anna edwards alongside matt miller who is in frankfurt. matt: the markets say which way is asian equities going to follow wall street into the abyss as donald trump's terror of threat is felt in markets. europe and u.s. futures are not showing as much as far as direction. the cash trade started 30 trade started 30 minutes time. -- starts in 30 minutes' time. ♪