francine: may falls fast, the prime minister faces pressure to scrap her latest brexit vote and resign within days. president trump considers blacklisting five chinese surveillance companies. and jumping the gun, james bollard tells bloomberg it is too easy to talk about the cut but that policymakers may have moved too quickly. we may have slightly overdone it with our december rate hike. ♪ francine: welcome to "bloomberg:

surveillance." good morning in europe and of the u.s., good afternoon if you are watching from asia. these are your markets. the stoxx 600 down to 0.1%. people are trying to figure out exactly what the latest rationing -- ratcheting up of tensions means for their portfolios. this is on the back of the pound rallying a touch yesterday when theresa may was talking and there was hope there would be a second referendum. unclear asture seems a loss of labour mps and the head of labor says they will not vote for her deal. 15.12.a touch at , we speak to a candidate for the european green party. we talked to him about the possible composition of parliament. now, let's get straight to bloomberg first word news. >> the fed and have quote

slightly overdone it i raising rates. that is the opinion of james bollard. he says it is premature to talk about a rates cut and has consistently been amongst the most dovish members of the fomc. he sayshe says it is premature k about a rates it will be quite e time before tariffs impact fed thinking. >> for this to actually affect fed policy, these tariffs will have to stay on for quite a while. >> donald trump is considering a blacklisting a number of chinese surveillance of giants. -- surveillance giants. the company face accusations they are part of the government persecution of uighurs, a muslim ethnic group in the west of the country. the restrictions would be similar to those imposed on huawei. robert mueller is bulking -- ba

lking at public we testifying before congress about pushing for a closed-door negotiation. we are told he does not want to be pulled into a political fight. he is hesitant to discuss his final report publicly. another option is for mueller to make a public statement for the committee questions him and private. and good news for millennial's. listen up, it seems your meme game can get you a job at a top company. adams tweets of a picture of a sheep led to elon musk changing his profile picture. guess what, he now says he has landed a job at tesla to manage the company's social media. 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. francine, sending it back to you. francine: thank you so much. may's final shot at

passing her brexit deal is coming under fire. sources tell bloomberg the prime minister is facing pressure to scrap the vote and resign. several officials were shocked the offer has been so badly received. the is after promising mps chance to call a second referendum. a cabinet minister and tory party chairman told us lawmakers should give us -- give it a chance. >> it is the most important thing she has done for months. i think a lot of fair-minded people should be prepared to give that a chance. what is to lose? if you want a referendum, how else are you going to get it? francine: so what's now for the embattled prime minister? joining us now is our u.k. government reporter. and peter, global macro strategist at rbc and the chief operating officer at pg i am -- at pgim all join us for a big

brexit conversation. art, what are we looking at? is this the end of the road for theresa may? >> it is certainly difficult. there are calls in the house of commons for her to abandon her deal. it would be her fourth attempt and has been voted down overwhelmingly. it is very -- it is looking very bleak this morning. the adverse reaction that was immediate yesterday did catch officials by surprise. we heard michael gove, environmental secretary, refusing to concern -- confirm the bill would go to vote. so there is a lot of thinking going on. francine: how quickly could she resign, and what happens next? there is a leadership contest, we have many, many names.

and that is unlikely there is a pro brexit prime minister? he or she would have to deal with exactly the same arithmetic. stuart: it is likely to be a pro brexit prime minister. the question is how far on the scale would the next prime minister be? partyare calls within the from her strongest opponents to step down immediately after the european parliament election results are known on monday. so the pressure is building. has stepped down, the party is determined to get a new leader in place as soon as possible. obviously, the time is ticking down towards the october 31 deadline. it cannot be pushed to close to that, otherwise, there would be even more chaos and political impasse. francine: peter, what did we

learn yesterday? does parliament want a second referendum or not? peter: it is a bit more than that. if you look at what she has said, she said if you endorse my deal, you will get a vote on whether or not to hold a referendum. she did not say there will be a referendum. so i can clearly see that even might not like that path. because you could end up endorsing the deal and the referendum anyway. francine: but if we look at the arithmetic's do we think parliament will vote or not if they get the opportunity? peter: what we know from the previous votes is that parliament has not endorsed it. it was very close when this was put forth, but parliament has not endorsed it. if i put myself into the shoes of a lid down -- lib-dem, there is no guarantee i will get it,

if i support that deal. if parliament votes this down, it is very difficult to come back from that. so i think there is a high risk to go down that path. francine: if you are a lib-dem, right now, you are thinking you want to push for general elections. and then i prefer a second referendum. is there a commonality in the house of commons, or does everybody just want to go to party lines? i.e. a general election? problem, at the moment, is the lack of commonality. those pushinge for a second referendum, it is how do you get there? there is an argument building that, if the tory party chooses a no deal brexit nt leader, -- would be athat

vehicle for parliament to finally convene around a strategy to push back. but there are so many arguments across the party, they have not been able to find a cohesive stance. francine: you live in new york, so welcome to london, in the midst of brexit negotiations once again. does it feel removed, or do people care about it? >> it does not feel removed. ,e'll talk about it later on brexit is very much something people consider. with the latest developments and its low chances of success, the concern is that the spectrum had narrowed on political risk and now has broadened again. you have a no deal brexit, all the way to another referendum. people find it very hard to deal with these binary risks. this has added a lot more

complexity to understanding political risk for any portfolio you have. brexit is unappealing to the european markets as well. francine: thank you. , joining us from our u.k. government team. and we will have more time with our guests. whereith "surveillance" we speak to one of the candidates hoping to lead the eu commission. and as the u.s. is considering blacklisting five more chinese companies, we focus on the future of global trade. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg: surveillance." let's get to you are bloomberg business flash. >> we begin with a bloomberg exclusive. the job of bmws chief executive maybe hanging in the balance. luxury carmakers steers towards a future of electric and at times vehicles. -- and autonomous vehicles. we are learning the supervisory board is questioning whether he is the right choice. we discuss prospects for his second term as chief. barclays has cut 12 employees from its equities division in new york. we have learned the dismissals were across the research units and the electronics trading decision.

they are seeking to reverse a 20% plunge in stock trading revenue. reportedly coming weeks away from settling a tax evasion case with italy for 100 million euros. the bank says they have faced claims from tax authorities regarding its activities starting in 2012. and this comes three months after ubs was ordered to pay more than $5 billion for helping french clients launder their assets. that is your bloomberg business flash. francine: let's continue the conversation on brexit and politics. when you look at concerns in the markets, it is all the currency that is moving, or at least cable is. what happens to euro-sterling? before, have said this i think euro-sterling is the much better barometer because the dollar has a life of its own. ,hen you look at euro-sterling

it has been in a broad, but stable range. we are now sort of back towards the higher end. if may steps down and eventually somebody takes over, we will be losing another two cents, i think that will be plausible and take other assets along. overine: let me move you to our euro-cable chart and you can see the 200 per day moving average. if there is a pro brexit minister who takes the handle, what happens after that? am a dove a elections need to start pricing in a corbyn government in the pound? peter: we might get there, but before we get there, the question is who will be the next prime minister? let's say, let's call him boris,

for lack of a better nine. -- name. the next question is what will this person do? will this person stand up, essentially alone, and say i will follow the path with or without you. in that case, i think sterling will take another tumble. francine: that path is a harder brexit? peter: a harder brexit. take,her path they could and these are some of the rumblings we are hearing, is a much more conciliatory approach where they try to take the one nation guys with them. markets, this be a slightly more nuanced view. it is not clear to me that, even if the person is a hard brexit person, if they do not follow that strategy to the last degree , pound-sterling does not need to tumble. francine: how do you look at

u.k. assets? you could argue they are cheap. most --i would say that most investors are in many asset classes. we have seen activity across real assets in general. , and wes are waiting are seeing activity levers much lower. there is this growth that is quite good for certain income assets, this is the kind of environment where bond positions work well. we have seen some activity there. but i would say lots of investors are just waiting for this to pass on and see what .appened after the dust settles francine: thank you both, we will come back to brexit. taimur and back to

peter. coming up, the future of europe as the u.k. and the netherlands get ready to kick off elections. taimurwe one of the candidatesg to lead the commission. that is up next to the this is bloomberg. -- up next, this is bloomberg. ♪

francine: good morning, everyone. this is "bloomberg: surveillance." let's get straight to the eu elections. the eu and benevolence kick off voting for the next eu parliament.

the next countries will vote between friday and sunday. but with parliament serving for a full five years, what will europe look like? joining us from amsterdam is bas, vice president of the european green alliance and candidate for presidency. he is also a member of the european parliament delegation for relations with the u.s.. thank you for giving us some of your time. if you are in charge of the commission, how do you sell europe to citizens across the nation have been disenchanted with the project? bas: what is very important, it seems always that the elections are for or against europe. importants much more is that we will see the elections are about the direction of europe. i think that you will see you in many countries, a chunk of people that will vote against the eu.

but the big majority is in favor of the european union but has a different opinion of the direction. do you want to keep on having the current market union or a more social and environmentally friendly union? that is the debates. union, that is the big debate. how green can we be to change the course of the european union towards social justice and green policies? leading: some of the groups in the past may have fallen short of the majority. you could be the kingmaker in this. is there anyone you would not support under and the circumstances? -- under any circumstances? what would you want in return for supporting them? bas: absolutely. that is, of course, going to be the big one. for the first time ever, these to a big blocks will not reach a

majority anymore. so they will have to turn to, well, i think the big question is for the christian democrats. will you turn to the right, where you see anti-european forces? i do not think that is the direction, so i think they will have to turn to the left. and our demands will be clear. we need a stronger climate ,ction, more social justice that it is about time companies start to pay taxes, and thirdly, a stronger democracy. for example, developments in poland, hungary, romania, it needs to be tackled much stronger. issues, climate action, social justice, we will put our demands on the table. and if nothing will change on these three topics, the greens will not help any party for a majority. francine: but what, can creepily, are you asking for -- for?etely, are you asking

bas: there are a couple of things. first of all, co2 pollution needs to get a higher price. that needs to change. , airlines are hardly paying anything for their pollution. of course, looking at agriculture. it is one of the biggest problems of the european union and politicians have failed to modernize agricultural policies. so if you think of climate policy, these three topics are certainly on the list of our demands. francine: emmanuel macron and his group says they will not support future trade deals that do not support the paris accord. how would you deal with the trump administration? bas: well, what is important is that our economy is very dependent on, for example, fossil fuels.

that is what you see when we have relations with the united states. they are trying to sell shale gas to the european union. so you will not be surprised that, in our policy, we want an energy union that is raising its own energy. but let me be very clear to the united states, to the trump administration. planning getting out of the paris agreement, the paris agreement of climate, and we will not negotiate a trade deal. that is going to be key. eickhout, thank you very much for the european commission. up next, we talk trade. this is bloomberg. ♪

francine: the u.k. prime

minister scraps the brexit vote and plans to resign within days. president trump blacklisting five surveillance companies, cutting off vital american technology. and james bullard tells bloomberg it is too early to talk about a cut. policy makers happen to quickly. quickly. we may haveerned slightly overdone it with our december rate hike. stories andp looking at markets, it is inflation for the month of april. touch below1%, a what we were expecting and better than the months before. that't think we are seeing much of the pound because so much weakness and strength comes from brexit negotiations. we need to remember that there is still a bank of england and they need to decide what happens with rates.

it straight to bloomberg first word news with viviana hurtado. viviana: theresa may is facing pressure to abandon her brexit deal and resign. senior officials see little chance of her divorce deal be in past in parliament. this is after her promise to .ive mps a second referendum the potential next prime wasster of the u.k. denounced as incompetent and a liar. usedormer cabinet minister candid language to describe or strong since qualifications and his track record as foreign minister. -- to describe boris johnson's

qualifications in his track record as foreign minister. >> i think he would be a very, very bad choice indeed. viviana: german chancellor angela merkel was approached about taking on one of eu's top jobs. bloomberg learning that she rejected the overtures to take over the presidency of the european council. we are told some heads of state are holding out hope that she may change your mind. robert mueller is bulking -- , pushingt testifying for closed-door negotiations. the special counsel does not want to be pulled into a political fight. he is hesitant to publicly discuss the final report. is mueller making a public statement before the committee questions him in private. 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. i'm viviana hurtado. this is bloomberg.

the u.s. is considering blacklisting five more chinese companies. among the names are two world leaders and video surveillance, accused by human rights groups of facilitating china's persecution of muslim ethnic groups. the companies would join huawei ofa list banning the sale items without a license. war,you look at the trade i don't know if the markets were topped off. if it was smoke and mirrors would get a handshake. -- notd we not get that only did we not get that, it is getting worse by the day. >> president trump likes trade

wars and there will be some kind at the g20 summit. inat, saving that china. francine: is this status quo? >> it is the base case. just created demand for 200 billion more. even if they agree to a new to not bet is hard severely affected. francine: do you also need to model the worst-case scenario? with that lead to a recession in would that lead to a recession in china?

the worst-case scenario is the probability of tariffs. about laptops, cell phones, and toys for children. appetite for u.s. consumers to take the price increases? and how much appetite is there to see prices before an election? natural gas in asia and semiconductors, soybeans and argentina as china tries to divert demands. willthere is a deal, it have an effect on those countries. francine: peter, let me come to you on trade. we're keeping a close eye on the agm of commerzbank, this is a bank that many thought would emerge with deutsche bank and then came the news that they wouldn't. a lot of investors want to hear to seee chief executive

exactly what kind of plan they want to put in place to convince investors that they are worth sticking around for. what does all of this market movement mean because of trade? are they priced correctly or are ?e still a little too cool the market was convinced it was coming imminently. europe, thearly in economic activity to begin with was not as bad. this was the concern for the nowet because if we accelerate the trade war, it could put downward pressure on some of the key trading markets in asia in particular. we heard about secondary effects. one of the secondary effects will hit right here. is that if this drags

on and the economic expectations that are currently implied to get better, this will not leave markets untouched. we have seen it in the front end pricing not only in the u.k. but also in europe. we can see it in other places as well. francine: had you figure out if this escalates are not? -- or not? the base case is that president trump may cool off a little bit. can we see this kind of trade war for 10 years? will that spread over to affects wars? >> i think that you are finding a very important point. quality of how this trade war has been fought has changed. previously, it was there is something i don't like and i

will put a tariff on you, thank you very much. -- we saw ite case in the case of russia and iran. if you do business with someone we don't like, you as a third-party get punished as well. we potentially takeaway away access to the u.s. dollar market. access toay intelligence. these things are used to further the case. trademore than just a war. let me be absolutely clear. now, does itnd impact economic activity. the here and now is what? as we try to figure out some of the price of goods impacted by tariffsorists -- by the

, we're not sure if inflation touchesand if renminbi seven, does the sky fall? bei think it will definitely the next wave of tariffs that will be inflationary. i think consumers will be affected. it will be slight but not a huge effect on gdp growth. rights,lectual property the core of what they want to achieve and a different approach than trade wars and tariffs. the efforts have been for reforming chinese markets. use the center to generate demand for u.s. goods. this is the reverse of how china

politically must behave. francine: how do you hedge risks? so you're covered for every eventuality. >> there is enough action for will that we think there be a rebound in the second half based on domestic growth. you still have a pretty positive 6% gdp growth in china. we think of those effects will dwarf the tariffs. we have spent a lot of time taking on political risks. approach toge in how you look at things. thank you to our guests, both stay with us. was it a fed hike too far? jamesbullard it --

bullard spoke to us exclusively. as cars shift from hybrid to electric, we hear about more .ensions it will bring you that story. this is bloomberg. -- we will bring you that story. this is bloomberg. ♪

we willnk eventually see consolidation. i think there is no question about it. >> consolidation is part of any business growth. and that cannot be ruled out, per se. to seen italian, i want an italian company compete at the international level. >> there are many measures to the foreseeable future. are notet conditions

really set to see consolidation in europe today. >> m&a is not something that we find attractive. >> we don't have any comments on market rumors. marketbout sticking with strategy and we look at the transactions as they are presented to us. >> they are more risky and more challenging in the current environment. i would say that the shareholders would say no. francine: there they are, some of the biggest names in banking talking to bloomberg about consolidation in the sector. we were just hearing about some proposals for the dividend. he was talking about his strategy. his top priorities are growth and speed.

he is not, at the moment, addressing the main concern. who will he be acquired by? move in december a hike too far? our guest spoke to bloomberg exclusively. >> if anything, we are a little bit restrictive. we may haveed that slightly overdone it with our december rate hike. but i am pleased that the committee pivoted. guests are still here. what do markets misunderstand about the fed? are we already pricing in the fact that if we do have a downturn or recession because of trade, they may not have the tools to deal with the downturn? >> i would not necessarily say so. if you think about the fed

keeping raising rates, there is a certain severe transfer downside. there is probably more space to cut. and then we are faced with what we currently have. be absolutely clear. we don't think that this will materialize. we think the labor market is strong. we don't think the fed will be to necessarily have to cut interest rates. we think that the market has priced into much of the downside. much of the too downside. francine: do you agree with that? this is the rocket question of the day. -- this is the market question of the day.

-- andon't see the fed the use of the word transitory in the last few statements were important in terms of the upward and downward pressures. we think there would not be a rate hike and there would also be a rate to climb. banks stick to the next few quarters. brexitwould see what the has talked about. and stockse a chart and yields are diverging. >> this is fascinating. we are treating the same set of facts very differently. around how hard it is to pull

investors and markets. bond markets have it more right than the stock markets. and the combination of brexit and rising nationalism and the trade risk that we see create enough uncertainty that the stock markets are probably a little more bullish than they should be. and to a large extent, they largely price risk into the market. francine: do you agree? >> not entirely, i have to admit. the relatively low bond yields is the reason that the markets are where they are. if you look at how the equity market is priced, we have really does -- relatively decent earnings. pretty good earnings, actually. is a directnd part link to the bond market. you have seen when the fed was raising rates, the market was

concerned that they were going to overdo it. the market started to adjust valuations and i think it has been priced out again. i am not of the view that we have this divergence. i think one is the getting the other to some degree -- one is be getting the other to some degree. up next, the bmw chief executive's future hangs in the balance. bloomberg sources say some of the supervisory boards want him out. we will get the details next, this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance. i am francine lacqua in london. here is viviana hurtado. viviana: in talks to buy central european assets of metlife, bloomberg is learning the business may be worth more than 2 billion euros. wants to expand and metlife is concentrated in poland, czech republic, hungary, and romania.

has reportedly cut 12 employees from the equities division in new york. thedismissals were across firm's resource unit and the electronic trading division. the firm is seeking to reverse a 20% plunge in stock trading revenue in the first quarter. and for those of you that spend too much time on social media, it seems it could get you a top job at a top company. adam ran social media for the rural life.glish his tweet of a picture of a sheep t to elon musk changing his profile picture. he says he has landed a job at tesla. that is the bloomberg business flash. francine? francine: that is literally my favorite story ever. harald kruger's job is hanging in the balance. bloomberg sources say supervisory board members are questioning if he is the right choice to lead the country -- to

lead the company. come amid ations backdrop of week markets. chris writes about cars for bloomberg opinion. why is kruger under so much pressure? >> i think the big reason is simple. he took over the job in 2015 at an incredibly difficult moment for the carmaking industry. erupt. had trade wars meeting strict emissions targets. there is alleged antitrust activities. we have seen bmw's and profits decline slightly since he took over.

carmakers have been under pressure. there is a clear and a strategy to leave bmw from this very difficult moment. francine: is this sector wide concerns? are they worried he doesn't have the skill sets to get them out of the problem? >> my personal view is that he is a little bit unfairly maligned. i think it is expected to generate something like 7.5 billion and operating profits this year. the crisis is still doing quite well in china. that it is ready to follow up the success.

in some respect, it is not a surprise either. earning much not money. some of them make losses. in might be time to take the wait and see approach. bloomberg opinion columnist chris from berlin. tom keene joins me in new york. we will be joined by alberto, portfolio manager at alger brace investments. there was a little bit of concern about the latest rhetoric coming from china and the u.s. the pound slide resumes. this is bloomberg. ♪

falls flat.y

and choking china, president trump cuts the flow of vital american technology. and it is too early to talk about a cut because policymakers may have moved too quickly. concerned that we may have slightly overdone it with our december rate hike. this is bluebird surveillance. i'm francine lacqua in london. tom keene in new york. a bit going on when you look at brexit. the pound was off and today it is fluctuating back down because there is so much uncertainty about what is happening to theresa may. and we look at the trade war and escalation. tom: i'm looking at cable down to new lows over last weekend. i think it is simply a barometer

on the future of the prime minister. francine: it certainly is. let's get straight to bloomberg first word news in new york city. british prime minister theresa may reportedly is facing more pressure to resign within days. bluebird has learned that senior government officials were shocked that her new brexit proposal was rejected so quickly. her allies say there is little chance parliament will approve her plan. u.s. may whiten the ban of ceylon american technology to china. widen the ban on sales of american technology to china. says the central bank may have overdone it with last december's rate increase. he tells bloomberg it is premature to talk about a rate cut.

bullard has argued against raising rates without evidence of clear inflation pressures. and the man that ran daimler for years is stepping down today. promising there will be cost cuts to restore profit margins. they take over at a time of unprecedented upheaval in the auto industry. 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. i'm viviana hurtado. this is bloomberg. tom: let's do a data check right now. really quick and short. it is a very sterling day. the curve flattening at any number of levels over the last couple of days. if i have time, i will look at the two-year and 30 year spread. something a little different. hitting the inversion. on to the next screen. the continued bull market, wow.

under 15. there is the sterling story. francine, i did both pairs. cable, good morning america, and euro-sterling. at 98.lar index elevated francine: if you look at europe, it is really range bound. the pound resuming the slide as optimism that we saw yesterday has evaporated on theresa may's brexit bill. looking at european stocks, they are under pressure despite a mixed session. investors have the latest china-america confrontation. tom: and euro-sterling, let's look at the chart. all of that trade with europe going on here. the weakness of pound-sterling. sterling-strength and brexit. we break down not out of the

.90 ono get above euro-sterling. that would be a big deal. we're not there yet. francine: we have the same chart. a look at that. tom: i thought we would. francine: i don't think that's happened on bloomberg surveillance. we have the levels for the daily moving average. is clear that we all want to talk about the pound and theresa may's final shot at passing the brexit deal is coming under fire. the prime minister is facing pressure to scrap the vote and resign within days. senior government officials were shocked that her offer was so badly received. this is after the promise to vote on a second brexit referendum. the head of foreign exchange bloomberg opinion

editor talking and writing about brexit. you talk up a storm when it comes to brexit. his theresa may going to resign within the next few days? no love from anyone. she comes forth with a new proposal, there is this moment of speculation. once the momentum goes against her, it goes against her in such a big way that there is no chance for her to recover from it. she needed to appeal to the euro skeptic, labor leaders, pragmatists, and they all cannot afterwards and said that we are not buying this. i think it is too late for a second referendum. she -- francine: if she puts the vote to parliament and we see a crushing defeat, will

we see elections for the next conservative party leader? it forth,ends to put but there is huge pressure to scrap it. we will have to see what she in parliament today. i don't see a way that she convinces either of the groups to support her. asking if we have taken back control with this deal. the irish backstop still remains. do we have a chance to cancel brexit altogether? they are also entering no. tom: this is a backdrop to the telegraph debate of cable and for roche. -- and farage. brexit party is

building a future this week on the european election. the mobilizing issue is what we the issue. does the telegraph debate matter? farage matter? or do we go back to the traditional two parties? >> the liberal democrats have been resurrected on the back of the promise to be the sole remain party. any time farage is speaking, it matters. he has tapped into a public mood that is fully fed up with the mainstream parties. how bad is it for labor.

how bad is it going to be for labor? tom: i will be doing this in about 55 minutes as well. i think churchill would have resigned by now. what is it that keeps may from not resigning? it is an implacable sense of self belief or it is something that we don't know. it is hard to see what she can offer now that would forestall the inevitable. francine: there are a million questions on the back of that. it of what the pound does next. do you look at this as a binary outcome? or does the pound become much more volatile? i think he given the uncertainty, it has been

highlighting it here. >> they suggest the rates are too low. looking at positioning, for example. the markets were flat in april and we are seeing that starting to be more sterling short. francine: what are you modeling next? is it possibly the u.k. under nigel farage? playbook generally goes through that center. the moderate parties tend to lose consensus. and we see this happening. gain.parties

this is what we are seeing. policies become harder to predict. and eventually, they are damaging. they are mixing up brexit with economic gain. we see a deal on extension or we muddle through the situation. in neither of these cases will the bank hike rates. it will either pause or cut rates. market bought some hopes of a deal at the beginning of the year and these hopes are gradually disappearing. we are also seeing some weakness in the economy from the bottom up. people are consuming for holidays. ,nd other firms like metro bank

for example, we are seeing some weakness from the bottom up basis in the u.k. tom: i want to show this very quickly. this is what the pros look at. i have never shown this on-air. this is euro-sterling. it is real simple, chris. i have a massive bet for a weaker euro. handle, a 123 handle, and what does that mean for the market to see those different levels? >> it is a continuation of the discussions we had so far. you can touch on where does this go from here? what is the risk of a no deal? we will probably talk about european elections coming up shortly. and the debate will move on to what is the likelihood of

brussels? keeping that failed risk in sterling. tom: a wonderful way to start this hour. thank you, writing literally every 12 hours. she has been prolific and valuable on this great debate within the united kingdom. we will continue with mr. turner and mr. gallo. we'll will talk markets and retail. we will look at an outright strong dollar call. the team has a huge dollar call. we will drive the conversation forward in the next hour. please stay with us from london. from new york, this is bloomberg. ♪

x the issue comes down to whether or not you can trust china. people are prepared interestse huawei's from china. whether you can or not given the murky issues of the ownership of an important and challenging question that we will have to discuss over the next week. francine: that was the former governor of hong kong. bloomberg sources say amongst the names are two world leaders and video surveillance accused by human rights groups of facilitating china's persecution of the muslim is -- muslim ethnic group. huawei joininghuawei --huawei joininghuawei -- joining huawei

on the so-called list, this feels more and more like a technology war instead of a trade war. , if it is a case race of who has supremacy worldwide, could it last 10 years? >> we see it is a long game with pieces.oard of many there is a security issue link technology and the control of information. linked to technology and the control of information. there is industrial competition. see inf issues which we the framework similar to what permanent imf program could have. imagine a program for competition and for trade. so like a control framework. when the market

worries about a bad outcome. but neither do we see a very strong resolution, a very positive resolution. maybe there could be an announcement of a deal, but the deal would probably be half-baked. to solve all these issues, it would take a long time. there are also winners from this because trade will be rerouted to other countries. argentina.zil, exporters of soybeans, agricultural products, meat. they benefit from the readjustment of supply chains. five-year.e with the sometimes we make these charts up as we go. war, chris patten, full them into inflation.

i'm getting a lot of inflation articles right now. ambrose evans pritchard calls us back to the ice age. the five-year european thenflation that we see in market. it do you presume this ends because of the trade war? we think below inflation trend is here to stay. outside of the u.s. in particular. this is because of a long period of debt accumulation. economies cannot stand higher interest rates. consumers have levered up in the last 10 years. most sovereigns have levered up. what happens is, persistence low interest rates are sometimes deflationary. even though the economic textbook tells you that lowering inflation and lowering inflation rates lowering interest

can reduce competition. and you have deflationary effects. there is a lot on deflation, for example. that said, interest rate curves we think are going to be flatter. but in those areas where central banks are about to capitulate, look at australia or new zealand. tom: i don't mean to interrupt but this is so important that we have to get this in. is there a global missed call right now? where the trade is so one way, trade war and inflation, that we are all going to get slammed in a couple of months going against the alberto gallo call? >> if you ask me when inflation can come back or how inflation can come back, the answer is politics. you will see a left-wing push in the u.s. with bernie sanders or biden in the u.s. elections.

or in the u.k., if the conservative party fails to brexit andan orderly you have a shift towards labor or mr. corbyn, you can see the central bank balance sheets creating growth. modernize the fear he, qe for the people. -- modernize the theory, qe for the people. create employment. maximize employment. this would create supply driven inflation. not because the economy is doing well, but because there is too much use of money printing to create growth. and that would be bad for all bonds. this is the risk we face between the ice age and a very hot age. you alberto gallo, thank very much. we'll continue with chris turner of ing. this is bloomberg. ♪

this is bloomberg surveillance. let's get to bloomberg business flash. retailer plans to challenge supermarkets by opening bigger food stores. the company is preparing for an alliance with online grocer oak auto. profits are falling again but it was still slightly ahead of expectations. are in talks to buy central european assets of metlife. number learned the business may be worth more than $2.2 billion.

-- bloomberg learned the business may be worth more than $2.2 billion. the metlife unit is concentrated in poland, the czech republic, hungary, and romania. u.s. chipmakers are preparing for a trade fight with china. the consensus is the price will be high. areler manufacturers warning of the impact of the u.s. ban on the sale of tech to huawei. industry leaders say it is hard to pressure chinese companies without hurting their u.s. rivals. businesshe bloomberg flash. thank you so much. this is what markets are doing. european stocks are drifting a touch. tom and i are looking at some of the pound dynamics. asia, the question we are trying to figure out if investors in europe aren't -- are reacting differently because they are trying to digest the chinese-american confrontation. crude oil down, dollar

.reasuries nudging higher in all eyes on theresa may as she addresses the commons a little bit later on. talkg up next, we will european elections and we will ask about italy. we will ask about the new factions in parliament and who will get the commission president. he will talk about politics, trade, and the u.s. this is bloomberg. ♪

♪ surveillanceg never far. the challenges of prime minister this morning. francine lacqua in london and

tom keene in new york. chris, i am going to wander to what francine was mentioning, which is the immovable level. bring up the charts to show the path of weakness out to seven. is this within a not floating, whatever the dynamic is -- is this about strong dollar? or week you want? 1% over thes fallen last couple of weeks. think about the start of the year. we had a good g20 meeting in late november, the suggestion that trade deal was going to be done so we had a benign period for financial markets. just over the last two weeks major resale.

have seven, we other side effects? chris: yes. if you look at the correlations with asian currencies, activity currencies. the fallout is prompting more dovish policy but you can look around the world. the canadian dollar, even though things are positive for north america, that could come under pressure as well. francine: all right. first, let's get to the bloomberg first world news in new york city. theresa may is facing pressure to quit within days. bloomberg learning her allies realized her new brexit proposal has little chance of being approved by parliament. former conservative chairman chris patten blasting johnson &

johnson. the former secretary is one of the favorites to succeed may. >> they lied his way through politics. he is a gas with a degree of charm. i think he would be a bad choice indeed. from the internal thenue service, exposes treasury department on donald trump tax returns. the memo says returns must be turned over to congress. it says the only way out of compliance is for the president to claim executive privilege. the treasury has so far received congressional request. robert mueller does not want to testify publicly in front of the u.s. congress. he is negotiating with house democrats for a closed-door appearance.

mueller telling the house judiciary committee he does not want to be dragged into a political fight. turkey is determined to go through with a russian missile field angering the trump administration. the government now is evaluating the u.s. proposal that it by the atria air defense system. buffed therdogan has turkey missile purchase. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. this is bloomberg. francine: thank you. let's look ahead to the eu elections. they go to the polls tomorrow. the other 26 countries will book between friday and sunday. we will get the latest from the european parliament but let's hear from politicians we have spoken to. the issue is how much the

european parties would be willing to get out of the -- and willing to engage. >> it is worrying if we have a low turnout and that turnout tends to give us a parliament where many people who run for the parliament not to make it work. fractured have a more european parliament. this will not mean we will have an anti-european weights. nothing.ve the only thing they have is nationalism. they cannot agree. a fight between national jurisdiction and european jurisdiction. parliament to grab more power , the air force living us to where we are now for may to watch

comfortable. now is a joining us member of the european parliament. thank you so much for joining us. how do you expect the elections to pan out in the next couple days, and how will that affect how the council president and commission president are chosen? be morewill fragmentation after the elections in the next couple days. there is focus on the rise of nationalism and those who want to break the european union. it will also be crucial to see how new coalitions will form. for example, what the role of greens that are small and the european parliament going to be? part of aoing to be constructive coalition or the against the number of agreements for a more ideal outcome? does this big support

for populist parties -- how does that change dynamics in the european parliament? we have had nationalists and populists represent the european parliament. it will be a continuation of what we have seen over the past year. there may be ships because of the emergence of new parties, new divisions between those growth and i hope the will be limited to because what europe needs is people come to the table with plans and energy to change things for the better instead of the hammers to break things down. i hope people will use their right to vote. the turnout is another thing to look out for among young people, especially who feel more part of the european confidence and who in the brexit referendum made a difference by not showing up. the sense of urgency for everybody to turn up and vote is not to be underestimated. francine: there are a lot of names printed about who will get

these top jobs in the european union. about angela merkel. your prime minister comes up. do you expect him to leave his current job to go to brussels? he has gone above and beyond to suggest he will not. you have hurt the competition commissioner, though i think would be an excellent candidate. let's see how it pans out. there are steps between now and that decision and the election will be crucial to determine where majorities by and who can get support, not only for their personal ambitions but for the program that should be leading where europe goes the next five years. -- has been trampled by all the ego and personality questions that have been debated. mentioned theu young voters and their distance from populism, they are distancing from this election.

do they know who -- to the young voters actually understand the debris of world war ii? what actually occurred in the netherlands in 1947 and why there is a european parliament? or have the young voters moved on from our collective memory? you put your finger on a difficult and crucial question , which is a deeper appreciation of why we have chosen to work together instead of fighting. and also what it has brought for the quality of life for all europeans. understandportant to as it is to understand this moment in history in changing power relations in the world and the importance of building a stronger, strategic europe. it is good if people appreciate their history, but more

importantly that they take responsibility for this moment and for shaping the future instead of being hands-off or part of a coalition of breakers instead of fielders. tom: you were definitive in europe and the digital world. you on the high ground with a select few. you understand digital in europe. why is there not an apple, a google come -- google, a microsoft -- why are there not these tech companies? there is a lot of exciting innovation going on in europe but perhaps not up the scale of the companies you mention in the u.s. we come from a legacy of 28 different legal systems. we are less risk-taking when it comes to entrepreneurship and therefore more decentralized entrepreneurship going on. i am in instagram. -- amsterdam.

think of a number of smaller that are doing wonderfully. we are in europe working on taking away unnecessary barriers, fostering more innovation, tracking the right balance. some lessons have been learned in the united states as well that bigger is not always better. think of the reputation of uber and facebook. tom: she is giving it right back to me. thank you so much. greatly appreciated. , aing up on volatility keyword for deutsche bank. really smart work. thank you. got -- from europe on digital. this is bloomberg. ♪

tom: bloomberg surveillance. brexit quiet for a couple weeks. things are heating up. the story front and center the prime minister fighting for political life. , of course of barnes iconic with his work for the united kingdom in hong kong, -- let'ser the of to listen to patten. >> he has lied his way through politics. he is a huckster with a degree of charm which i am immune. he would be a bad choice indeed but i suspect it may happen. >> it is the most important

thing she has done for months a fair amount of people should be repaired to give their charms and what is to lose if you want a referendum? how was a you going to get it? -- else you going to get it? tom: and now providing translation, francine loquat. -- francine lacqua. it was a british way of saying he does not support boris johnson. i have never translated chris that is my translation. tom: maybe it is generational. this morning we have alberto garlow and rest of returner of ing. i want to interview interest rates and a litmus paper of the global system.

where is trading opportunity in your europe now? you are always looking for the arbitrage's? looking at an environment of low but positive growth. we are positioned to receive interest rates, but not in europe. in other countries where central banks are capitalizing -- cap selling -- capitaling. we also like credit. there are companies that are going to survive even in the high-yield space. we are starting to see some ,eakness in the worst companies four to five times and also banks that are exposed to those firms. smaller banks. fallmonth we had a strong for thomas cook. we had a falling stock prices

for metro bank. we have other companies in continental europe showing weakness. it is an environment where you want the tide of central bank liquidity does not lift all the bolts. some of the weaker bolts are still down. ask if you own a jamie oliver restaurant. chris turner, in the foreign exchange market is it an interest rate market are based on capital flows? if you want to not lose money, are you watching flows were rates -- or rates? the rates determine the flows, particularly in the global fx space. dollar rates are high. in have got to have a hike conviction level that the dollar is going to selloff. otherwise it is difficult to sell dollars because if you are european you might pay 3.5% to

hedge dollar sales. the dollar is in the ascendancy at the moment until uncertainties in european growth resolve themselves. the market will continue to favor the dollar. francine: what does it mean for other currencies? is there is -- an unloved currency now? not yet. we are in a negative mode. going back to china, if there was a surprise agreement ahead of the g20 towards the end of june, seems unlikely but the market will be looking to take some undervalued currencies. for the time being, focus on eastern europe and some of these cycles have turned. moment,k bonds at the we would see a positive story over the last couple of years. turning negative over the next 12 months. look at aginge a

currencies. weakness over the last number of days. we will continue with alberto gallo and chris turner as well. coming up on bloomberg daybreak, a supporter of the president of the united states is a republican from georgia. this is bloomberg. ♪

francine: -- viviana: this is the merc surveillance. the biggest airline in china wants compensation from blowing over the grounding of the 737 max 8. air china and china eastern filing formal planes, the carriers operate 53 of the 96 max planes lying idle in china. of the bankthe ceo said he needs to adjust his strategy. bank is not happy with its level of profitability. he vowed to work hard to boost it. commerzbank and deutsche bank and it talks about a potential tie up. that led the speculation another bidder might come forward.

nordstrom is the latest retailer tip report -- to report disappointing results. forecast. full-year nordstrom citing what it called exceptional misses in the period it ended the first week of may. thanks so much. a difficult they for american retail yesterday. always interesting but very not a good day. they think differently in asia. all of the officers at bloomberg and also central bankers as they travel to asia, one is james bullard, the st. louis president .- he a regime change here is james bullard. james: rates are in a good place in the u.s. now. we are restrictive and i am slightly we may have overdone it with our december but was pleased that

the committee pivoted. tom: after we heard from clara powell williams and the cast of thousands, alberto gallo and miss turner. there too much visibility and central banks? are all of them talking too much? should they all be more like the bank is -- of japan? forward guidelines have created distortions. if central bankers always tend whatlk and you can predict you're going to do, the market becomes one-sided. everyone is pricing hikes or cuts in this particular situation. people tend to take risks in the same direction. it makes markets more binary, more fragile and more subject to losses in case central banks change their view. you can have a central bank talk too much but the risk is they

are going to box themselves in. countsket is pricing to for the fed in the next 12 to 18 months. if the fed does not deliver, the market probably will not like it. this is a risk when you have a lot of views of four to guidance. having said that, central banks around the world have little tools left and so they are to dovish stance. the economies cannot withstand high levels of debt, which have not gone down in the last 10 years. we are in a japan like environment. at pictures ofng number 10 downing street where theresa may will leave shortly to go to the house of commons to -- if you lookns at theresa may coming under brexit thenr new yesterday was rejected. it is amazing there is no panic in the market. you see a little bit of pound

pressure but there is no kind of panic. what would it take for a fully fledged pound panic to come to the front? james: good question -- chris: the question. that makes markets liquid. the market is probably factoring her departure sometime this summer. were she to leave? i do not know. i do not think selling would collapse but difficult to answer but all pretty negative in the near term. tom: can she come back to 10 downing street, francine? is someone going to change the locks on her? have been talking about this for a while. goes not going to be she

to the house of commons and does not have a job but she is facing pressure to abandon her brexit proposal. she is facing pressure not to go to a vote on her deal and quit within days. that is to our own reporting on the ground inside westminster and this is after government officials are said to have been shocked that the new offer she gave everyone yesterday was so badly received. she gave the offer and within 30 minutes everyone had shot it down. tom: it is a lovely story to say the least. that telegraph debate of mr. cable and the important european elections, brussels steered a lot of the debate over thursday, friday and saturday. thank you, alberto gallo. thank you, chris turner. ♪

the primemorning,

minister is pounded by any and all of her conservative party. is this the final straw? churchill knew when to exit. may and the tories reflect on .he options the president of the united states battles on the eastern, western and congressional front and irs suggests trump will confront growth tax writing chairs. and wealth retail. how is that working out against bezos? what an ugly 48 hours for traditional retail. good morning. this is bloomberg surveillance from our world headquarters. i am tom keene with francine lacqua on to 10 downing street. are we down to watching the door of 10 downing street? francine: we are, but this is wednesday so theresa may gets out of 10 downing street and gets into a car to go down the road at the house of commons from when she starts her debate.

i would not read that much into that because look at her body language. it is becoming more difficult for her to stay on and that would be our main line of questioning. tom: very good. we had slows coming out. home depot -- they are related but it is that pulse of american retail which is much less about economics and much more about technology and all of the choices people are making every day. lowes the .5%. that is a nice 70 basis points under 4.2% and a real markdown on their view forward. we have seen that across retail. hurtado.iviana viviana: theresa may is facing

pressure to resign in days. a bloomberg burning senior government official was shocked her new brexit proposal was rejected so quickly. her allies said there is little chance parliament will approve her plan. the u.s. may widen its ban on the sale of american tech to china. bloomberg learning to jump administration is deciding whether to at five chinese video surveillance companies to the blacklist. officials are concerned about their role in helping beijing with weaker minority. james bullard says the central bank may have overdone it with last december's interest rate increase. he tells bloomberg it is premature to talk about a rate cut. he argued against raising rates without evidence of clear inflation pressures. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries.

this is bloomberg. currencies,oking at in particular sterling turning the equity markets. let's go to the next screen. the curve flattening as a general statement over the last days. ratioterling is a flipped point. 88.90 would be weaker sterling. francine? francine: i am looking at stocks in europe. they are in a holding pattern. traders are trying to figure out --whatconfrontation confrontation between the u.s. and china means for their portfolios. dollar treasuries steady. i am looking at downing street. everyone on radio was listening to downing street. we saw the door open and we were in a panic. is at the prime minister? it was not. we expect her to get out of downing street and to get in the car and onto the house of

commons. joining us now to discuss not only the walk to the house of emmans but brexit is thomas. if you are under pressure to on?gn, can she really hold she are ready said she would set out a timetable for her departure in june. she is on her way out. the question now is we are fighting over a matter of days. the european elections or tomorrow. the latest polls are -- show the conservative party on 7%. andk about the ruling party -- there are calling on their members not to vote in the election tomorrow and that theresa may resigns today. lawmakers needs

4:00 london time. francine: getting into the car, going to the house of commons? emma: there has been pressure before. more today.e to we have to look ahead what comes next. what kind of brexit -- this from minister is not going to decide what brexit looks like. it is going to be the next prime minister. francine: who is the next prime minister? emma: the polls at the moment point to boris johnson. to recap how this works, members of parliament whittled down a list of candidates and the final two go to the conservative members. this is 120,000 signed up conservative members. thinkf them, two thirds, a no deal brexit is a good idea. dealer goes to

conservative party members, there is a real risk he is elected on the ticket. parliament is against no deal. tom: we go to the depths of the then the torilla street at moment where the ross thomas soft brexit. --emmaoss thomas ross-thomas, what is going to happen over the next couple weeks? where up topdate the left of your iconic chart. no deal. emma: right. two thirds of conservative members are in favor of no deal but parliament is not in favor of no deal. so probably in order to perceive

desperate to a no deal agenda, you probably need a general election and whether the prime and whether the prominence to could do that is an open question. there are shenanigans you could do to parliament to deliver it but it would be constitutionally a bit -- tom: you have drawn it out. let's go back to the chart jason, please. prime minister johnson, whoever comes down here. she has got us to a general election. that is great but why isn't there an arrow from here to here? we can draw that if you like. parliament is against no deal and if you want to deliver no tol, you would probably need have a general election to change the makeup of parliament. -- with the new being thester risk

shortest prime minister in history and calling it general election to get that mandate? be a secondp would referendum. tom: always drawing beautiful charts with her team, really the heart and soul of our brexit. it is 20 47. really, that is what they are doing. jeremiah putting it together for hsbc. we will talk about the dollar but now we have to talk sterling. do you just give up? tried toe not second-guess how this plays out. we have proportioned equal -- tom: did you like her chart? >> hers is relatively neat compared to most flowcharts of brexit. deal, no deal, no brexit.

for us, you put 110 on a no deal outcome, you put 155 on no brexit and in the middle we have 137 which is saying one third, one third, one third. we are trading 127 and that is a free ration. no deal has gone up. the currency mark. tom: this is important. for thesecks sold billion dollars. says it is like a jackson pollock. .t is very good this confusion, what does it do to the city? we stay at this second-guessing headline all the time. yesterday we saw a second referendum headlines on morning p.m. this a my begun by monday and sterling slower.

we keep doing this shifting. is a good question about that arrow moving towards no deal. there is this perception that the u.k. parliament does not want to avoid no deal. that is fine. i wanted ferrari. i am not getting one. at the end of the day, this is a default outcome. that is what i would do. francine: i love the fact that we went to talk about the robberies. aris.r >> jeremy corbyn is ambiguous because we can accept his economic policies are due. by the same token, if part of his agenda is to suggest the second referendum, that is bullish. be cut in a tug-of-war between economics and brexit. under boris johnson, initially i

--pect the reflex will be the no deal probability will be 110. that probability edges higher. as i said, i do not think there is any miss pricing. tom: 126. 71 on cable. 126. 71 on cable. ross-thomas, thank you. please stay with us. this is bloomberg. ♪

>> if it comes down to whether you can trust china, you cannot. i hope people are prepared to separate huawei into huawei's interests from china. whether you can give them parking interests in huawei, it is going to be an important and challenging question we -- which we have to discuss in the next weeks and months. tom: lord patten, an important conversation. he tore boards johnson decides. shreds. johnson to we get to a strong washington call with kevin cirilli, our chief washington correspondent. kevin, i do not know where to begin. an houri could go on -- on this as well. give me an update on how the president is being hit from all sides by congress. it is not just chairman nadler is it?

kevin: it is political this point. at they are trying to put out multiple issues that have emerged. there were two subpoenas issued yesterday. you mentioned during adler. the chairman of the has to to sherry committee in terms of issuing subpoenas to hope x as well as the topics of don mcgahn, the white house's -- attorney,trump's rather. you have bob mueller saying he does not want -- when i talk to democrats, i am like -- which front is most important? they said it is all piecemeal in terms of impeachment. tom: brilliant. let's go to noah feldman, the genius on law with all of his work on 20th century supreme court. professor feldman on kevin cirilli's whack-a-mole. congress should get the interest it needs to do his job in legislation and oversight and a

president should be able to win hold what is necessary to do his job well. i do not invest in simple. the supreme court did. kevin, what is the difference between an overwhelmed nixon and an overwhelmed trump? kevin: president trump feels mueller report, case closed. mitch mcconnell speaking in lockstep with the president saying, the issue of impeachment has been settled and that is time to move on. the democrats in the house said something different and they are taking a more piecemeal approach. the bottom line is this is going to continue for quite some time. that said, we have net seen -- not seen any market reactions to these latest developments, twists and turns as it continues. francine: the markets want to know if stocks go down because of the trade war, will president

trump reverse his war against china? of huawei,he issue the president has bipartisan support from democrats. onocrats who criticize him the issues tom and i were talking about, yesterday i spoke with chris coons and the members of the senate foreign relations committee. the other week i interviewed mark warner and they praised president trump for his executive orders against the ge and huawei. this is an issue of national security concern as far as lawmakers on capitol hill. republicans and democrats do not like the president's strategy. they are trying to get him to back off on terror up spoke there has been no signs of letting up. francine: even if stocks go down, the president will hold strong. does it still help his base? sense that the president is having his eyes on the impact this will have on the

crux of his base in the political coalition, which is up by the agricultural committee -- the auger cultural sector, rather. he has announced another agricultural package for many states in the middle portion of the country he needs to win in 2020. tom: have an eventful day. kevin: it is always eventful. tom: our chief washington correspondent, mr. cirelli. cirilli. on bloomberg markets today, jonathan ferro loves to show off the cisco ceo now there is something to talk about. cisco and beijing. this is bloomberg. ♪

francine: if the u.k. were to be a company, how would you fix it? >> be honest with the people.

explain what a mess the social system is. good morning. francine lacqua and tom keene. international relations and politics today. we push that all aside. the hsbc strong dollar. when did you make that call? is today an anniversary? >> pretty close. an outlier big house call on storm dollar, why did everyone get weak dollar wrong? >> they told there would be a gross conversion, that there would be all ships sinking in the relative world of currencies and that has been a wash. on thexated incorrectly

change in rates. they called that the fed pivoting. but also forgot the level, the u.s. is a high-yielding currency and they forgot that. tom: there are too many charts. one of them is the asia look plunging dollars stronger. the soup of the euro -- forget about sterling. the soup of the yen. which we focus on to glean when we break out of this range? daragh: for me, that soup you described, the euro-dollar is doing nothing but actually it is this glacial grind lower. it is reflecting this glacial rind higher in most of our industries. what we are seeing, for example on the feds dollar index we are beginning to see that dollar push to the top side of its range. that is where begin the break.

it has not been glamorous but it has been relentless. yet bizarrely,nd the consensus is desperate minister maywrong but they have been sticking to it. francine: what makes you worried about the u.s. economy? is the weakness we saw and housing or something else? daragh: we have seen occasional disappointments. the housing market has been occasionally patchy but it little angst i would say -- we had a nice 3% print for a while. u.s. gdp revised but the world rate of this economy is going to be 2.5%, whereas you have italy looking at zero. -- angstst ridding dollar andt the u.s. they are stacking up well in

that metric. francine: is there anything else you are looking at? daragh: on dollar yen, perhaps the one exception to the dollar bullish view. all of the -- you have been talking about. the u.s. china trade war, tensions over tech, concerns about global growth -- what does this mean for emerging markets? all of these are headwinds. for us in the dollar story. that is the only forecasting but we agree with the consensus. great chart as out.aher points weaker euro from a 160 back 10 years. here is ready watch, parity

watch. -- parity watch, parity watch. does not strike the markets as exciting but you do make money off of this. you pick up your kerry and it stops moving in your favor. it is not the glamorous stuff and bloomberg had a story about 1000% returns in cryptocurrency. for it is like rooting manchester united. daragh: it is a big trades. pushing against the consensus out there, chuck -- memo the food is better in london. this is bloomberg. ♪

when you rest on a leesa hybrid mattress. bedtime is no longer simply the time you go to sleep. it's time to switch off and catch up. enjoy me time, and we time. 40 winks or 8 hours solid. the leesa hybrid mattress combines two technologies to give you deeper rest and

rejuvenation. 1,000 pocket springs provide edge to edge support, responsiveness and comfort while premium foams relieve pressure. keep you comfortably cool and limit motion transfer. leesa's hybrid mattress is not only recommended by experts. experts choose to sleep on it too. try it yourself in any west elm store. or order online and we'll ship it to your door so you can try it risk free. the leesa hybrid is american made. built to last. and because everyone needs a place to rest we donate tens of thousands of mattresses to those in need. live healthier, live happier, by resting deeper. get 15% off and two free pillows. go to leesa.com today! tom: good morning. on the technology front, wall street journal out with a tuesday night report of the

jose, the west coast against qualcomm and the shares are violating. bring up the charge. there it is. bring up this chart as you can because it shows the legal ballet of qualcomm now. back to the middle of april and a big leap up and a further leap tradinggas and recently. the latest angst rollover and now qualcomm trading at a 71 level at about right here is where we are. the -- we are not back to the april trend yet. qualcomm with legal challenges on a wednesday morning. with our first world news in new york, viviana. viviana: prime minister theresa may is facing more pressure to quit in days. alliesrg learning her renewed her brexit proposal has little chance of being approved by parliament. pattenchairman chris

blasting boris johnson. johnson is one of the favorite to succeed may. >> he lied his way through life. he lied his way through politics. he is a hoax or with a degree of charm which i am immune. it would be a bad choice indeed but i suspect it may happen. viviana: a memo from the internal revenue service reportedly exposes its disagreement on president trump's tax returns. the memo says returns must be turned over to congress if requested. it says the only way out is for the president to claim executive privilege. so treasury has subarctic -- far refused congressional request. robert mueller does not want to testify publicly in front of congress. bloomberg learned he is negotiating for a closed door appearance on his rush investigation report.

mother telling the house judiciary committee, he does not want to be jacked into a political site -- fight. weekend with hockey. the st. louis blues are going to the stanley cup final for the first time since 1970. they will face the boston bruins, eliminating san jose 5-1 last night in the western conference final. game one of the stanley cup is monday in boston. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. this is bloomberg. know thisto let you is special. this was an interim coach and a four string goalkeeper. way to go. tom: it is unbelievable how ice hockey needs us. it has been a difficult season. what is important for our global audience is in hockey there is

the original 16. st. louis is not an original 16 but they are as close as you can get within the heritage of that 1970 stanley cup. there will be talk across this -- about this across the hockey world. this is the dream set up you could get out of a really challenging season for the nhl. let's move onto target. good news in retail and you get it from target. one advantage is they've right there plus release in english -- they write their press release in english. what they are doing in the next day in the store pickup area, what it comes down to is target with the idea many talk -- we do. you see that with target and that is a wonderful step. washington, our bloomberg opinion columnist in all things retail. sarah, target is one of the

nailing --actually journal. 4.8 growth is strong. income is in turbocharged. you call out the symbian initiatives they are doing which it shifts the company they acquired and also there on drive-up services, leveraging the power on your stores to the bill e-commerce orders in a profitable way. that has been successful. tom: what is this what now of kohl's disaster? nordstrom? there to be like target? sarah: what target is showing is the power of private labeled brands. target has some of the best merchants in the business in providing value priced home goods and apparel. perhaps those goods are not

competitive with nordstrom but they are competitive with what is on offer at kohl's. kohl's said home was a real trouble spot and i suspect a lot of market share was rocking to target. francine: interesting. i -- you mentioned kohl's. who else are they taking market share away from? sarah: lots of the department stores and even the lower priced specialty apparel stores. investingt of work on and displays. merchandising, outfits on mannequins and adding new fixtures and that kind of thing to its beauty departments are creating a more specialty big store.within the a lot of more traditional competitors from specialty apparel and specialty beauty are feeling the heat. same day grilling essentials, if target i can have

sent to me in one or two days. i am going to begun -- grilling in central park. sarah: that is amazing. thank you so much. we will stay in washington. , this is the center for politics. kyle, wonderful to have you with us. i look for moderation out there. give us an update on the moderation you see at the bottom center. there is positioning going on at the democratic primary. joe biden has taken a significant -- [please stand by]

conservatives, but biden is rallying the middle of a little bit or at least the middle of his party. it has worked for the time being. is: let's go to ohio, which your neck of the woods. we spoke to the presidential candidate from youngstown. he is taking a moderate tap with no traction. does a guy like biden have a place or is it going to be polarized through the primaries and democratic convention? biden's page is to states like ohio and the broader states like pennsylvania, michigan, wisconsin who are going to help to decide the direction -- the backion, he could crawl states voters who voted for obama twice and voted for trump in 2016. in terms of the primary electorate's and a lot of these states, they are not necessarily dominated by big-city liberals

for lack of a better term. they are more moderate primary voters. interestingly, african-american voters are so important for them a credit politics and primaries and dominate a lot of southern back votersstates. african-american voters are not particularly liberal on balance compared to white voters who are driving the growth of liberalism in the democratic party. francine: on what policies could he take away votes with republicans and the trump administration as long as the u.s. economy is strong? it -- is it not a second term for president trump? kyle: look at these growth numbers and say the incumbent president would get reelected based on relative peace and prosperity so long as it holds up until the election. that said, look at the president's approval rating and that is not a number that suggests getting reelected.

it is a tricky thing. what the democrats are going to try to do is say whatever growth there is, it is unevenly felt and republican policies by their arguments have helped out people doing well and they would point to the tax cut from 2017 as a policy that has not been all that popular and democrats are going to argue with helping the rich. the battle plan against trump for the 2020 democrats similar to what the -- what barack obama to mitt romney in 2012 and did successfully. francine: politics has shifted since then. do we think the american people want centrist, or does bernie sanders have a better chance of going after the trump administration? it may be the better path to winning these days is to go towards the extremes of it as

opposed to running closer to the middle. waspolitical science theory the footer theory, which is you are supposed to capture the voter who exists right in the middle of the electorate and that gets you to 50% plus one. it may be that voters are not that persuadable these days and these elections are more who can generate the best turnouts. by that standard, made the democrats are better off nominating someone who is more of an ideological progressive/liberal. bernie sanders is competing for that title. elizabeth warren is as well and several other candidates. tom: thank you for the briefing. he is about as crystal ball managing editor at uva. let's continue the politics discussion. a senator from georgia -- senator purdue will join us. this is bloomberg. ♪

tom: bloomberg surveillance, francine lacqua and tom keene here in global wall street. this is the most important chart of the day and maybe with a quarter, strong dollar. let's go to the chart. the broad including china, real trades weighted u.s. dollar, plus over on the left done we go with a weaker dollar trend over that jan. here is a 3% move, a 3% what if in stronger dollars. it is amazing if we get a small move in the dollar, it gets a profound effect of extending us to the belief of a strong dollar. >> it is a great chart.

the upset they talked about -- reflects my entire lifespan chart. ne arrived at the cusp of a important part of the dollar. tom: a little bit of a move is a big deal. daragh: investors are to a degree. long dollarve the but the forecast community is not there. tom: this is important. 2014, 2015, the magic of a big dollar. everyone gets lathered up. everyone is a genius and now it is boring. the point to be repeated as we do not need a 2015 move to get tension within the system. what will be the tension if we hsbchs bc call -- an call? time we drop into a

lowball world, maybe we are getting there. we have to recognize that so you're going to swing back to these levels. every bank is saying i'm a we do not want to do anything. the fed has been clear despite bullard. static comegot that you have to circle back. you're getting paid. everyone wants to get paid for doing nothing. you get paid for doing nothing for holding the u.s. dollar and that is what is happening. wendy you expecting new u.s. recession? daragh: we are not particular in curiouss, but what is it would be rare for the u.s. to going to isolated recession. it is going to be hard for a big global slowdown. the yen will do well. the dollar will because -- where are you going to put your money -- money?

the banks can help you protect yourself. it is a safe haven. even in that dyer, sinister environment we might paint, it is gravitating towards the war of dollar. these currencies globally and relative to the nsx under those circumstances. is it weaker nimby or higher dollar? daragh: we have a forecast of 695. you see that is clearly not above seven. seven feels like this magical number. nois clear policymakers have appetite for weaponizing currency in china as do the context of the u.s. china trade war. where you see mistakes is a stronger than anticipated. 6.95 is not distance from where we are but we have explained 35 year-end. tom: i have got to buy bruins

blues family cup tickets. cost $6,000.o where is the currency pair so i can see derek sanders? daragh: i am sure. one of the biggest currencies. at the end of the day, that is where your risk on the spectrum is. they see that short-term. tom: what is it? stuckey yen -- stocky yen, i guess. tom: thank you so much. it is an exciting moment as well in london. brexit was quiet. he is ramping up around the green cushions. lord patten of the red cushions was a little bit aggravated by

boris johnson. let us listen. died since then. life.lied his way through he lied his way through politics. he is a huckster with a degree of charm which i am immune. he would be a bad choice but i suspect it will happen. ♪

francine: this is bloomberg surveillance. theresa may's final shot at passing a briggs a deal is coming under fire. sources tell bloomberg prime minister is facing pressure to scrap the vote and resigning days. elections for the parliament begins tomorrow. joining us now is a european member of element candidate for the brexit party. he is a conservative donor. thank you for joining us. what are you expecting or how are you expecting the brexit back-- to change policies here in london, back here at home? >> the way we intend to do that is win tomorrow.

we hope -- and to win big. in winning big, we will send a clear signal to parliament and the government they need to get on with brexit. they need to do a proper brexit, a brexit ecowas with the undertakings they have repeatedly given the country and not the kind of brexit in name only sort of deal that they have been talking about more recently. when you talk about a proper brexit, is this a no deal brexit? is it the only way to get to a no deal brexit going through a general election? i don't like the word hard brexit. it conjures up images that are not accurate. we believe a no deal brexit there was the possibility of a good trade deal with europe a couple of years ago. the manner in which the government and parliament has taken the country down this cul-de-sac out of which there is

no easy return, we have to go .hrough a no deal, wto brexit whether that comes by way of the general election or parliament waking up and doing what the people want of them remains to be seen. parliament has to do it. do you believe boris johnson should be the next prime minister of this country? is he the only one who can deliver the brexit you want? ben: i have not got a view on boris johnson. he has been out of the main light as it were four months. i have not heard much about him. he voted in favor of the withdrawal agreement the third time it was presented, which makes the question about the integrity of his resolve to deliver a proper brexit. so i cannot complement on boris johnson.

i do not think his appointment to be leader of the tory party will make any difference to the fight the tories are facing. francine: you do not think a pre-brexit conservative prime minister would do away with the brexit you believe in. i think tories are incapable of delivering the brexit that should have been delivered to the people. they have got such a big schism double middle of their party that i think it is difficult for anyone to resolve. are you expecting -- there is a lot of -- they are saying a hard brexit or if you review the term, a no deal brexit hurts this country economically. how long do you think it will take for this to recover? i do not buy the narrative that a wto brexit would -- the country. look at basic figures. hijackedcampaign team the debate and focused on the economy and this is a

continuation of project fear. to give you numbers, 12% of the u.k. gdp depends on trade with the eu and if we were to wto brexit we would have led 5 billion euros a year on u.k. exports to the european union. an 8 billion -- bankers: but leading seeeither remain pre-brexit does pre-brexit see a different view on the economy. ben: most large businesses prefer the status quo and fear change. they have to adjust to a new normal. my biggest criticism of this is that it squandered three years not preparing the country positively for a new normal. even nowadays, when you hear

government ministers talking about preparing for a no deal brexit, they talk about it in terms of mitigating adversity. actually, brexit offers positive opportunities, none of which seemed to have been grasped by the government. possible -- but the timeline. we had a longer conversation. from --p, questions four prime minister is that it d three theresa may. now, thetes from former governor of hong kong. he was talking to us a little earlier on. we will look at that interview and what it means. ♪

♪ i am certain that we may have

slightly overdone it with our december rate hike. president says the right hike may have been a mistake. and tech cold war gets colder. and target hits the bull's-eye, bucking the gloom, kicking off the year with strong sales. investors wait on what it will say about the impact of tariffs. david: welcome to "bloomberg daybreak." target really beat on earnings-per-share and revenue, and took up their forecast as well. alix: same-store sales 4.8%, so that coming in superstrong. web sales rising 42%, also better than we thought. it also shows that on