nejra: good morning. i'm nejra cehic. ♪

nejra: welcome to daybreak europe. bloomberg learned the decision follows a backlash over brexit plans. for more, and edwards joins us from westminster. good morning. what will this timeline for theresa may's to proctor look like? what are we likely -- departure look like? what are we likely to learn? anna: she is likely to set out the timetable. she wants to hang on until june 10. why? small election in eastern england. trump will be visiting. she wants to get through the anniversary of the landing. 10 wants to delay until june

but setting the timetable could be important. she wants to stay from minister through the context. gun has been sounded, we could see a process that lasts six months. that is the hope in the conservative party. this is a long process. it starts in parliament and goes to the members. nejra: in terms of succession,'s boris johnson the top candidate to launch? anna: absolutely. that's crucial. it's a two-stage process. the mps have to whittle a crowded field down to the final two and then the last two get put to party membership. groupings don't necessarily say brexit in the same light, the membership more

pre-brexit than many of the mps in the house. london, former former secretary, he is seen as one of the favorites within the membership of the conservative party, although you'll remember speculation around boris johnson, what he thinks of a no deal brings it, that is something guiding the pound lower. we've seen the pound in an aggressive losing streak. how much more likely that makes a no deal brexit. nejra: absolutely, record losing streak for the pound. thanks for joining us. we'll talk more about brexit and a minute, but let's get to the markets. s&p 500 futures, a drop of more than 1% in the benchmark yesterday, heading for a third

consecutive down week, the longest losing streak since december. 2.73 handle on that. we bounced back on that yield. with a big risk off day, the bloomberg dollar index was a little lower, not the safe haven of choice. low, hit a four-month below 1.27. rateac calling for three cuts, worst-performing g10. wti bouncing back after its worst day in 2019 yesterday. u.s. stockpiles weighing on oil price. juliette saly in singapore has more for us. how are we looking? juliette: we are looking a little lower, asian stocks holding on to the lows. but we look at the wide picture,

on track for a third weekly losses. trade concerns weigh into sentiment. the nikkei is oversold. we've been watching indian markets in the wake of the election, a little upside after they sold out into the close yesterday. also worth noting morgan stanley sees the syntax touching 45,000 points after the modi win. 40,000 points briefly yesterday. ghing intowoes wei sentiment. is making preparations for new tariffs so they are prepared for an escalation in the trade war, slightly lower in the hong kong session. a lot of korean commodity stocks under pressure in uncertainty over the trade dispute. we've been watching the energy itset after oil suffered

worst day in 2019. one of the laggards off by about 5%. nejra: thank you so much. markets have been roiled amid concerns about trade conflict and crack in the global economy. disappointing u.s. economy did a help to drive the data down to the lowest levels since 2017. oil heading for its biggest weekly drop since december on trade concerns. will it trade first at 2700 or 2950? you can join the debate. joining me now is the head of from and come and the ceo connerly wealth management. let's talk about the reaction in bond markets. the risk offo spur was the data in terms of u.s.

manufacturing pmi heading the lowest in the decade. there's a contraction for the first time since august, 2009. it begs the question whether the first quarter gdp number was down, the company frontloading orders ahead of concerns over an escalation in the trade war. how bullish is this backdrop for bonds? you have tol: conclude that it's bullish. loose, meeting they're maintaining low interest rates. bond markets are the safe haven market of choice. if you believe the economy is slowing down, all the evidence so far is that the economy is not responding to this attitude. they need more than that to turn around. slower economic growth. and bond markets should grind higher. not a bad place to be in this

environment. nejra: what would be the catalyst for you to add to equities? you're actually underweight equities and we are seeing the s&p 500 poised for its first losing month of 2019. chris: absolutely. to give context, we've had concerns about rising risks for 15 months through the course of last year. by september last year, we were cautious on equities. we've moved closer to neutral. in march, back underweight because we were questioning the extent of the rally, which we've had. the problem we have right now, consistently this year, is that one of our blocks of indicators is growth, and we've just not seeing confirmation from our indicators the rally has taken place.

synchronize global recovery. the u.s. is still doing pretty well, but outside the u.s., we're in a pronounced growth slowdown. that's where we've yet to see the daylight. that did open up a gap in equity markets. i think that reality is beginning to dawn now. far, we seeion, so is quite rational and probably quite sent of -- sensible and not yet of great concern. we do have to keep an eye on bond markets because they are an indicator of future growth, as well, and they are painting a grimmer picture of markets. nejra: in terms of a catalyst, what data points or what things do you need to see? the ten-year treasury yields at certain levels? pricing change around a rate cut to think we add that to equities? chris: for us, keeping an eye on

growth indicators. we have bleeding indicators. it's less about the u.s., and more about outside the u.s. for instance, a pickup in purchasing manager surveys in europe would be a good indicator. it's also one of the absentees from the party in the last few months, which has concerned us. looking at the u.s., we have seen a stay in growth in the u.s. we have been slightly concerned. as long as europe and em are driving global growth, there is the potential for further fate in u.s. growth to the point where people could start to question a restriction -- a recession in the u.s. i don't think we're there yet. for the moment, it's not too bad. there's still time for the indicators to turn around. nejra: we did see a big drop in

crude, bouncing back today, but the flight in crude has sparked of biggest plunge this year. ,oncerns around global growth how much are you looking at crude as an indicator for you of global growth and inflation in terms of how you invest in the bond market? paul: you would naturally assume it wouldn't be used because it's linked to economic growth. down with a forecast of less demand. it is also heavily distorted by supply stories and a manipulated price, as well. it is not as manipulated as a pmi indicator to give you a sign as to when credits are slowing. when, in the face of all evidence is still coming down or declining, that's probably a suggestion the expectation of demand are falling off and adding to the other indices, it

suggests global trade is slowing down. chris stay with us. let's get a bloomberg first word news with debra mao in hong kong. : the trump administration is proposing tariffs on goods from countries who undervalued currencies. that further escalates the assault on rule. it would let america seek tariffs from those nations. currently, no country meets the criteria. but this sets a much broader view of the meeting of undervaluation. deutsche bank's top leadership felt the heat from ire. withtors still backed him 72% of share capital, but that's down more than 84% last year.

deutsche bank has had a rough few years, shares hitting an all-time low before the agn. euro area economy remains on track with ecb projections that see an upturn later in the year. that's according to governor council members and senior central banker. investors should get insight into how generous the next round of bank loans will be. >> at the moment, i'm quite confident that economy's on the right track and what's happening is what is in line with what we are expecting. changes will be depended from the new projections. debra: spacex launched 16 satellites. that blasted off from cape canaveral at 10:30 p.m. local time. this is a key step in elon musk's vision of crating a space-based network to provide broadband around the world.

he says this is an important source of funding for spacex. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. nejra? nejra: debra mao in hong kong, thank you so much. china and the u.s. go head-to-head into their battle over tariffs. we take a look at the scoreboard to see who is winning so far. that's next. when you're traveling to work, go to bloomberg live on your mobile device or dab digital radio in the london area. this is bloomberg. ♪

nejra: this is daybreak europe. i'm nejra cehic in london. looking back at the asian index,, the msci pacific a little bit of a next picture across asian markets. the index flat, 10 year yield

bouncing back slightly. we had a 2017 low yesterday. the 10 year yield in australia plumbs fresh lows. we could get fresh rate cuts. cable study. sterling on a record losing streak, the euro with concerns of a no deal brexit rising. s&p futures bouncing back. dropping more than 1% on the benchmark yesterday, and heading for a third weekly loss. big risk off day, but we could look at her today -- better today. let's get bloomberg business flash with the debra mao in hong kong. debra: facebook says it removed 2 billion fake accounts in the first quarter. the record number shows how the company is battling an avalanche of bad actors on its social network. the vast majority are removed within minutes of being created. that means they are not counted and facebook -- in facebook's

metrics. >> when i hear people asking about whether we are two big, a lot of them come from concerns about whether we do our part to be responsible, about safety, privacy. that's why we do things to show people we are being responsible. debra: uber is expanding its bike rental service to the u.k. they will have a rollout, about 350 red bikes will be available for by the minute rentals. they have an electric kettle assist that can propel writers across the city. they bought bikes for hundred million dollars last year. greato was may with fanfare, and then it wasn't. it's sort 50% on the first day of trading, but since then, the stock has plunged 40%.

it is seeking to overtake starbucks in china, opening more stores in two years than the coffee giant has in the last 20. that is your bloomberg business flash. nejra: thank you so much. the u.s. and china are going toe to toe. president trump's is swinging away. who is winning? dani burger chalks up the score. i thought there were no winners in a trade war. dani: it might be all losers. but when it comes to trump, there is only one metric that u.s. isether the winning or losing and that's the trade deficit. when we look at the figure, the u.s. is still behind by a large margin but the figure has narrowed in recent months. that'sount this one,

score one for the u.s. inflation isven showing through in america. the price of tariffs hit categories in the white, increased 1.6% since july. then we look at china, their tariffs don't have an effect on consumer prices. since those are industrial and not used products. for this one, we give a point to china. consumer confidence rebounded in the u.s. -- in china, rather. and then sales growth has fallen. for now, yes this has fallen, but consumers not too pessimistic, so we'll say this is a draw. weakened 8% against the dollar. a weaker yuan does give chinese exporters a cushion against tariffs, but it has both

positive and negative economic consequences. so if we include that currency as a draw, it looks like a draw, 3-3. in the next hour, i'll bring you three more charts to see just who comes on top of the trade war. nejra: thank you so much. are still with us. we've got the scoreboard there. how did the scoreboard stock up in terms of assets? when you look at how you could invest around the trade war, sort of escalating, are inflation bonds the answer maybe? paul: ultimately, they could be if you end up with silver growth, slipping to recession -- slower growth, slipping to recession in some markets. but also the extra cost of doing business the trade war ultimately produces. a little bit of inflation,

normally doing quite well in that environment. not so far, but they could in the future. paul: your neutral bonds at the gnome -- you're neutral bonds at the moment. are there opportunities you see in the bond market, or maybe move to an overweight if the trade war escalates further and risk off continues? chris: the problem with bonds for the euro investor is your risk return is exceedingly low. -2%u.k. index linked and a return linked to r.b.i. come out which is in a great measure of inflation. we're trying to beat inflation. it makes it hard having portfolios with that long-term goal. goes against

government bonds as u.k. investors but we see value within the broad bond complex if you are prepared to take credit risk, you can get return in an area such as loan. that's where we are. so-called risk-free investments in government bonds, the u.k. investors, i don't think they're with a candle. nejra: in terms of equity markets, low we've seen is the 2000 not doing so well, small caps suffering. a lot of the industry groups that normally perform well when expectations are good. do you have preferences over industry groups that could do better or worse at those -- as the trade war escalates? paul: this is the million dollar question. we are somewhat underweight u.s. equities. naturally, we're more neutral or slightly overweight. it seems counter intuitive, but that's because receives recession pretty much.

they're not going to be a great place to be, the probably no worse than they were going to be. if we go into a worse growth environment, some of the secular growth stories in technology will turn out to have cyclical exposure, which is not priced into shares. that's why we're weary. when you look at the cyclical sectors, they're still bombed out. there's a tremendous skepticism at the moment. they were saying the u.n. was the most important gauge out there at the moment. we have stability in the yuan. and that translates. there have been idiosyncratic stories, but it looks like china is planning the fan for a seems tou.n. -- yuan be 690. what indication it does that have?

we have seen treasury spreads widening out, maybe making chinese bonds more of an opportunity. paul: there are a number of things going on there. if they decide to use it as a weapon, they can do so. it's also interesting they're trying to build stability into the value of the currency. just doing the natural em thing of devaluing currency in the face of global trade ror weak economic growth may not be what they're about. that debate about how it affects bond markets and kind china deep for escalation to the rest of the world? ultimately, the bond will devalue generally. look at lower inflation. and also, bonds can be included in various indices. there's various demand. nejra: paul and chris stay with

us. coming up, election time in europe. we'll talk about europe and brexit. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. i'm nejra cehic in london. gives a look at what you should be watching. voting continues to elect the next island. and other countries voting tomorrow and on sunday. an update on the u.k. economy with the latest retail sales figures. to show a expect decline of 0.5%. on saturday, with the china trade war continuing, president trump turns his attention to another major trading partner. he travels to japan, when he will become the first global leader to meet the new emperor. to india, the economy is set for a boost if modi follows through

with campaign promises. this follows his party's sweeping election victory. he promised cash handouts to farmers, $1.4 trillion to improve roadways, a boost to manufacturing, and a doubling and exports. haslinda amin joins us. let's go to her first. great to see you again. will modi followthrough on his election promises? haslinda: it remains a big question. we have to wait and see. 2.0, modi's india. these are terms tossed around. modi did talk about these things. he said together we go. together we prosper. together we build growth. india wins yet again. inclusive growth. that is what we're after.

we've seen 7% growth, but that has not trickled to the people. the 10 million jobs, that didn't happen. one million jobs needed to be created every month. modi hasn't seen that through. modi's win comes at a time where growth is actually solving. we talk about 7% growth among the fastest-growing economy among major economies. but when you take a look at how it is, first-quarter growth expected to be below 6%, the lowest in two years. modi has to address it. it remains a challenging situation. nejra: thanks to haslinda amin in new delhi. let's see how markets reacted. we brought a gun back yield. still challenges ahead. you saw it breached $40,000, a fresh record. how strong is momentum to the upside for equities?

>> that's a very valid point by haslinda. now that the big event is behind us, the dust has settled, we will be focused on the economy, as well as recovery, discretionary demand, which has slowed. that is evident in the earthlings for the quarter going back. we are looking at gains for the benchmark, but more or less back to where we began last week. a little more strength coming in on the banking index, but that's largely on account of recovery, considering you did see weakness in the past couple weeks. the broader market index is seeing gains. from here on, we expect sideways movement before we have more clarity. aagam thank you so much,

mumbaiin. voters across the member states are casting their ballots. the election kicked off in the u k and netherlands. ireland and the czech republic vote today before the majority olls.untries go to tp maria, what is the view from brussels? morning.od it's the final day of campaign and the focus is on turnout. this is not election where europeans don't turn out. a big question, whether we do see a spike. this time they decided they do want to take part in the election. there are two important polls. we many repercussions, what

establish is the conversation will focus on the jobs that will become available i the end of the year. on sunday,esults that may shape a lot of the conversation as to who gets what after the election is done. nejra: thank you. they voted recently, but they focused on prime minister may's imminent up archer. what kind of -- departure. what kind of timeline could we see? anna: what could be the last days of may, she's expected to set up the timetable. she wants to remain in post until june 10. and even after june 10, while the process is underway to find a new leader, she wants to stay as a caretaker role. all of this is dependent on one beating later today. rank-and-filehe committee.

it will depend on whether or not he is ok with that timetable as the way things proceed. once the timetable is decided, if we do get a date of june 10, then there's a leadership contest in which the conservative party was speedy last time around when may wo n. this time, they hope it can be done by the end of july. that leads to interesting questions about how donald trump's visit still goes. it could be interesting dynamic to watch. nejra: thank you to anna edwards and maria tadeo. great to have you with us. paul and chris are still with us. let me take you to a chart on eurosterling. [no audio]

>> we have. we often made the point to clients that people are very aware of equity market risk in their portfolios that they don't think a lot about currency risk. or where stern -- sterling references currency. i think one of the reasons people don't worry about it is because sterling tends to depreciate at times of heightened risk. and that gives you fx gains. one of the problems, of course, brags it changes all of that. the pound has been priced off the prospects for brexit. if a soft brexit came, than the pound would rally. that was concerning us a few months ago. so for that reason, we were actually hedging out fx risk at

that point because we thought a hard brexit, earlier in the year, was unlikely. in the last few weeks, that has changed entirely, since easter, since the reemergence of the brexit party. it has reset the agenda in the conservative party. and it has got us to this point where may is now out. we're going to have a new leader, almost certainly a hard brexit leader, probably boris johnson. we have taken fx exposure back into portfolios. nejra: a lot of people would agree with you. paul, would you say, having seen the chart, the fx market is still underpricing the risk of a no deal? paul: without a doubt. i think the debate so far has been about brexit on, brexit off. it's easier for us to sit on the fence than it is to make a

decision. now, as you look forward with may going, the chances of harder brexit are rising. folks areas are probably fairly -- both scenarios are probably fairly damaging. nejra: 10-year gilt yield dropped below 1% for the first time in seven weeks. and the gilt curve narrowest since the financial crisis. what does the latest news mean for the way you would invest around gilts right now? paul: gilt markets, we think is pretty overpriced. it's good for gilts and government bonds, safe haven demand, of course. what heru think about politics could influence the market going forward, the natural reaction would be to loosen those fiscal pursestrings to spend money to basically reward the electorate that put them there in the first place.

if we are going to see a shift to the right within the conservatives, or even a shift to the labor government, i think gilt yields should creek fire. nejra: does that have implication for equities? chris: u.k. equities compared to gilts already look attractive. they've pretty much never been higher. they are giving you a signal there's an equity risk premium in the u.k.. weirdly, we have warmed to u.k. despite the backdrop because you get fx exposure through u.k. equities. the u.k. stock market is internationally oriented so is not about domestic prospects. risk companies, much more

to the economy. up for u.k.hould equities and u.k. government bonds, government boston finale wins. nejra: chris was saying he has a preference. let's talk about the european bond space. you might see gilts briskly priced -- risk lee paul: we like the barbell situation. clearly, northern europe still under pressure, slowing down. we like the fact we have a positive curve in europe. of aaa countries in europe. if you get the ratio correct it starts to raise its head once again.

btp's inon of italian the area is not a bad place to be if you think the ecb is not going to change policies for some time. nejra: without getting into details of elections, we cannot discuss polls, how much of a potential market event with the results be when we get them on monday? chris: probably not huge. that's the honest answer. to the u.k., i think it's about people seeing it has a referendum, another referendum on europe. it's not going to be a clear takeaway. the rest of europe, i don't think it's a big market. nejra: great to have you both here. paul and chris stay with us. a lot more to discuss. let's get bloomberg first word news with debra mao in hong kong. debra: nejra, the trump administration is proposing

tariffs on goods from countries who undervalued currencies. assault on global trading rule. it would let america seek tariffs on products from those nations. currently, no country meets the criteria. but this plan sets a much broader view of the meeting of undervaluation. deutsche bank's top leadership felt the heat from shareholder ire. the chairman bore the brunt of the backlash. investors still backed him with 72% of share capital, but that's down more than 84% last year. deutsche bank has had a rough few years with shares hitting an all-time low before the agn. the euro area economy remains on track with ecb projections that see an upturn later in the year. that's according to governor council members and senior central banker. at the meeting in two weeks time, investors should get insight into how generous the next round of bank loans will

be. >> at the moment, i'm quite confident that economy's on the right track and that what's happening is what is in line with what we are expecting. changes will be dependent from the new projections. debra: spacex launched 16 new satellites. the rocket that carried them blasted off from cape canaveral at 10:30 p.m. local time. this is a key step in elon musk's vision of crating a space-based network to provide broadband services around the world. musk says this is an important source of funding for spacex. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. nejra? nejra: debra mao in hong kong, thank you. while investors are banking on a rate cut, investors are taking a rate and see approach. as always, when you're traveling

to work, tune into bloomberg radio on your mobile device or dab digital radio in your london area. i will join you there at 8:00 a.m. this is bloomberg. ♪

nejra: this is bloomberg daybreak: europe. i'm nejra cehic in london. minutes after the policy meeting, officials expected patient for some time. no insurance cut. increase trade tensions are a concern, but he's undivided about when the next move should be a hike or a cut. take a listen to disease and some of his colleagues. >> there is a lot of uncertainty and whether it's about how slow the global economy will be or whether brexit will or won't work. or what will be the end result

of tariff discussions. those things all put a damper on reaching for more and in growing more quickly. >> if it's short, i don't see much impact. if it's long, i think american businesses are going to figure out how to navigate in a world with a different set of trade barriers. i think the real issue we've got is if it's indeterminate. it's just really hard to make a move. >> being patient may serve as well because if you go too far with accommodation, it's creating access and balances. those are cyclical and is a very hard to deal with. this comes as the rally in sovereign bonds showed signs of easing after tenure treasuries touched the lowest since 2017. america sees the chance as low as 2.05%. paul and chris are still with

us. discussion into the in just a second. old mutual suspending its ceo breakdown a material in trust. andcoo is the acting ceo seeing the material breakdown in trust. this is the board. the headline coming through. we'll bring you any more details as we get them. let's get back to the conversation around the fed and u.s. bond markets. thatul, obviously we saw patience is the word of the day and the insurance cut markets are pricing not likely to come soon. do you see a situation where risk assets sell off the economy doesn't falter, despite the data on the pmi front yesterday? the facth, i'd guess

that the central banks have been causing is good news for risk assets that were concerned about fed tightening last year. we've seen a relief rally, which is probably fizzling out now. definitely a repricing of risk assets that occur independently of what the fed does and the economy does. but also, the longer we go through this phase of pausing uncertainty, maybe this goldilocks phase for markets, the more we worry about what's the next move, is it slower growth, which is good for bonds and will enable the fed to cut interest rates? or is it a resurgence of growth and fed tightening of monetary policy? i think most people would agree on the balance we're leaving to the first option, slower growth and a fed rate cut. the policy should have peaked in the cycle, which is good for bond markets. it means they can rally. right now, risk assets selling

off is enough demand for safe haven, but not enough to move us into the pricing area. to get down to the treasury euro, we need to forecast economic growth slipping rapidly. nejra: paul suggesting a rate cut is talents of risks than a rate hike. if i take you to a chart, which we can talk about with the 10 year treasury yields, and whether it's showing a recession, this is showing the fed funds rate and 10 year yield inverting. does this show and you warning signal, this particular gauge here? debateit's been a huge on whether the bond markets are signaling a recession or not. that they to observe have been right and a positive way and they have also signal

that one that hasn't been the recession. it is not a simple argument. is the what is happening whole range of interest expectations has shifted lower. some of this has been about the simple on-off signal but it's also the other universe, where we don't have a recession. maybe we continue to bond along with growth, monday and growth, maybe a pickup in growth. sayingago, people were interest rates were at 3% plus. becauseink it's 2.5% the fed made it clear they are going to be patient in dropping rates and also patient in raising them. i think the threshold for raising rates has considered -- has raised considerably. that's why bond yields, pricing in the spectrum of outcomes, has

shifted down. nejra: part of that is inflation expectation. it's coming down. does the fed need to cut to get those expectations higher? reasoncut come for that rather than the growth story? paul: it would be a bold move to do so. i'm happy to have the debate. there will be a lot of debates about how we engineer inflation? long-term inflation target? more flexible inflation target? to build higher inflation expectations in the u.s. with a this economic story coming in, economies slowing down, also talking about china exporting deflation, i think that's overriding that. as we've seen with japan, also europe, central banks find it difficult to engineer higher

inflation expectations. it's really out of their control. nejra: that probably explains why you hold the longer treasury curve. great to have you with me this hour. thank you for joining me. paul and chris as our guest hosts. let's take a look at the oil market, crude headed for its biggest drop since december. for more, let's go to annmarie hordern. seeing a bounceback today, but what a selloff yesterday. annmarie: what they selloff it was. brent under $70 a barrel, actually under $69 a barrel. this shows the drop off of wti, the biggest weekly drop of 2019. you can see there, look at that red bar to the downside. we haven't seen a drop like this since december. but this one has been particularly bad. clearly, the market is focusing on the demand side.

whatever happens with the trade war, less demand for oil, they're pretty much ignoring the supply-side, deterioration in venezuela. we still have contaminated oil in russia. the pipeline is not fully restored, yet the market is looking at the other side of the story. on the technical side, look at this wti. two days it was down 8% over one -- wednesday and thursday. we have broken the channel will has been trading on. this is setting and even new course for lower prices. one thing, we have this opec meeting in june. when you have prices like this, it is going to help push forward the agenda of rolling over cuts. nejra: also to note, the spread between one and two months brent future contracts have been rising, as well. thank you so much. coming up, made a.

she's leaving -- mayday. she's leaving, but when? go to bloomberg radio if you're on the move. this is bloomberg. ♪

nejra: good morning. i nejra cehic. this is bloomberg daybreak: europe. u.k. prime minister is set to amount a timetable for her resignation after a backlash over brexit plants. we are live in westminster. president trump says huawei could be part of a china trade pact. the u.s. considers tariffs on nations with undervalued currencies. equity futures point to a positive open after the s&p 500 dropped yet again. ♪

nejra: good morning, just under an hour from the start of cash equity trading. let's look at have futures are set up. we could see a stronger open across the european spectrum. futures in the green, dax, and cac 40 after we saw a plunge in u.s. equities, a drop of more than 1% in the s&p 500, headed for a third consecutive down week, first losing month in 2019. in terms of european equities, generally across the spectrum of risk assets, it was a risk off day. the stoxx 600 close lower by more than 1%. we could see a bounceback in equity markets. what was plaguing equity markets, yes the trade wars, but also the manufacturing pmi the lowest in a decade. that seems to spur more

selling. gamma shares rising 5.2% premarket after the fund was building stakes. something to keep an eye on as we look to the market open. also, nomura's ceo is to take a months cut for the three on an information leak. those are two important headlines to keep an eye on. we're also looking for numbers from earth. in the meantime, let's get to the bond market. lots of action. we saw the tenure gilt yields below 1% for the first time in seven weeks. 27-year-old -- 27 year low. the 10 year yields are right now and we also saw

moves lower in other parts of the bond market, the 10 year bund future pretty much unchanged. stabilization looks to be what could happen as bond markets get underway. more, big moveas across the aussie 10 year yield and asian equity markets. take us through. juliette: it will be really interesting watching the yield. record those once again. rising in afternoon trade. we see this so often played out friday afternoon and we are toing the csi 300 up 3.5% prop speculation of state led by. -- estate led by you. morgan stanley saying you can see the index hit $45,000 on the back of modi euphoria.

australia closed lower, as did markets in south korea. a lot of commodity stocks under pressure. the nikkei closing weaker by 2/10 of 1%. let's look at the commodity market. you are seeing the rupee rise strongly. indian bonds getting on the back of this euphoria over the election, the rupee up .5%. pretty flat on the offshore yuan, although we are seeing a weaker spot despite another strong sick from the pboc today. and the aussie dollar on the back foot, down 2/10 of 1%. a very strong call from bill evans, known as interest rate connections. he is not calling for three interest rate cuts this year from the reserve bank of australia. nejra? nejra: juliette saly in singapore, thank you so much. prime minister theresa may will be announcing a timeline for her resignation.

bloomberg learned the decision followed backlash over her brexit plan. anna edwards joins us from was mr.. -- from westminster. just give us the timeline for theresa may's departure. process, but slow it does seem as if it is in trade. we do expect the prime minister or her team to set out today the timetable for her departure. she has to me graham brady, the guy who leads the 1922 committee, the rank-and-file conservative lawmakers. she has to meet him and that's expected to take place midmorning. she needs to get his approval for what she is planning. you understand she plans to resign on june 10. she wants to wait until then because there are a number of things to get done, including a visit by president trump. she wants to stay on after in a

caretaker role. once we understand the details of her timetable, we have to get into the detail of how the party nominates a new leader. that's a process in two stages. it starts with mps and goes out to the members. expect that to be something that takes six weeks to two months to achieve. nejra: is boris johnson the want to keep an eye on as the next leader? anna: he certainly is the one to beat in terms of betting on's and the chitchat -- odds and chitchat and westminster. the front runner doesn't always win. it also depends on whether the front runner manages to get on the final two. the weather process works is down a long whittle list, crowded field, to the final two. the final two are presented to a eurosceptic membership of the conservative party.

it's than the party will decide who the leader is. boris johnson still the one to be, but there are many others putting their names into the ring. siderouping on the other of the brexiteers within the conservative party, some of them are known to not like boris johnson, so what they will try to do to stop them is interesting. will some back boris johnson because they don't like dominic raab? the deputy prime minister is somebody to keep an eye on. jeremy hunt is talked about. went to seentlemen theresa may yesterday to encourage her to name a date for her departure. they too could be on the list. all these names are being talked about. a long list of names

of people interested in taking this role. nejra: thank you for joining us. joining us now is stephanie, the chief currency strategist. great to have you with us. thank you for joining. as we look at cable trading at 126.68 right now, how clear is the path to 120 and below, a 2016 low? stephanie: good morning, nejra. the discussion around the sterling and the whole situation of seeing the end of may before may has already seen the markets selling off, so the market is bracing for a successor that will take a much harder stance on brexit like boris johnson and i think right now, we are stabilizing here and people are waiting for european parliament elections, which both sides of

the equation will use as an indication to prove their point. we would just highlight this is not a referendum, but i would expect some volatility. direction?.20 i don't think so. nejra: you say the market is bracing for a harder brexit and possibly for boris johnson. i would counter that the market would still be underpricing that risk, particularly if you look at risk reversals on the pound. they don't seem to be braced for a no deal brexit. is there a lot further downside to the pound from here? where would you target in the next three months? stefanie: the problem is that actually both probabilities have gone up. no deal and no brexit. so that is where the market is stuck in between and this is where you rightly point out you're not seeing the whole market shifting, embracing for

hard brexit. in the next three months, also for a longer-term, we actually see continuation of what we see happening in the past, the sterling being in a wider range, but without any resolution being in place, which is a binary event, not breaking to the extreme, as you were suggesting before. nejra: makes sense. 128.nie: nejra: 128, go ahead. 128,nie: i was just saying 130 handle is more realistic than to claim something extreme on the outside, like want 20, 125 -- 120, 125. nejra: yesterday, we saw that u.s. equities selloff. that seemed to be largely fueled

by the u.s. manufacturing pmi coming in soft. also, you got the trade war concern. 10 year yields hit a 2017 low. interestingly, the dollar didn't rally. it didn't seem that was the chosen safe haven yesterday. you're preferring to look at currencies that are neutral risk rather than risk on, risk off. why? stefanie: first of all, before you conclude too early that the dollar is not a safe haven currency, i would concur that it is actually not true. what we see is that we saw a strong technical reaction in euro-dollar. we had a textbook reaction. we have been working the last few trading sessions already. there was an expectation there would be a strong pound to see whether this brakes on the first attempt or not. the currency markets, if there are strong support levels, it

doesn't go beyond through this without any bigger headline on the first goal. to see the counter reaction and 1.85 handle, 11 where we are now, it doesn't put it in a safe haven. we are trading on a technical level. as long as we are here, the downtrend we still have in place in the euro-dollar in the 2018-2019 timeframe is still intact. nevertheless, it is of course a benefit of looking to currencies that are not trading on a risk especiallyf handle, as we are now heading into this headline during u.s. trade environment. so, picking the currencies that are very low, very low correlation to s&p returns actually can diversify the portfolio quite a lot.

i think something like euro canada is interesting to look at. nejra: so it's about diversifying. stefanie stays with us. a lot more to discuss. moody's downgrading nissan to a three. the outlook is negative. moody is a saying nissan's margin deteriorated, which is that's how they are justifying the cuts to a3 and the negative outlook. let's get to bloomberg first word news with debra mao in hong kong. debra: deutsche bank's top leadership felt the heat from shareholder ire. the chairman bore the brunt of the backlash. investors still backed him with 72% of share capital, but that's down more than 84% last year. deutsche bank has had a rough few years with shares hitting an all-time low before the agn.

wikileaks is blasting the trump administration for charging julian assange with espionage. the group calls it the end of national security journalism. conspired to he disclose classified information in one of the biggest intelligence breaches in american history. he's serving an almost one year prison term in the u.k. for jumping bail. over 2k says it removed billion fake accounts in the first quarter. the record number shows how the company is battling an avalanche of bad actors on its social network. the company says the vast majority are removed within minutes of being created. that means they are not counted in facebook's closely watched active daily user metrics. >> when i hear people asking about whethers we're too big, a lot of them come from concerns about whether we do our part to be responsible. responsible about safety,

responsible about privacy. that's why we do things to show people we are being responsible. debra: spacex launched 16 new satellites. the rocket that carried them blasted off from cape canaveral at 10:30 p.m. local time. this is a key step in elon musk's vision of creating a space-based network to provide broadband services around the world. musk says this is an important source of funding for spacex. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. nejra? nejra: debra mao in hong kong, thank you so much. coming up, the second round in the clash between the world's largest economies. we will give you the final tally, whether the u.s. or china has tacked up more points. to into bloomberg digital radio in the london area. i'll join you there from 8:00 a.m. this is bloomberg. ♪

minutes away 41 from the equity market open in europe. this is bloomberg daybreak: europe. i'm nejra cehic in london. let's get a check on the markets. futures pointing to a bounceback after the selloff yesterday. we dropped more than 1% on european equities, concerns about the trade war, but also in the u.s., manufacturing pmi hitting the lowest in the decade. pushed the yield lower, we got to a to 29 handle. we are stabilizing at a 2.32 handle. the 10 year yield in australia plumbing fresh record lows. cable actually on the front foot, up 2/10 of a percent. we have seen sterling on a record run of losses. it has hit a four-month low.

have the markets sufficiently priced a no deal brexit? oil bouncing back, its worst day in 2019 yesterday, combination of concerns around the trade war and u.s. stockpiles. let's get a bloomberg business flash with debra mao in hong kong. debra: uber is expanding its bike rental service to the u.k. they will have a rollout, about 350 of the red bikes will be available for by the minute rentals. they have an electric peal assist that can propel riders across the city. uber bought bikes for over $100 million last year. the ipo was may with great fanfare, and then it wasn't. it's soarded 50% on the first day of trading, but since then, the stock has plunged 40%. they are seeking to overtake

starbucks in china, opening more stores in two years than the coffee giant has in the last 20. the parent companies of the french retailer fat now have been placed in protection. this is they saved to save the debt from collapse. it has come under attack from short-sellers. they say the ownership structure hides the true financial state. and that's your bloomberg business flash. nejra: thank you so much. another round in the trade war between the u.s. and china. counting the type -- charts, the heavyweights are in a draw. trade induced inflation has begun to hit american consumers. to bring you the rest is dani burger. dani: let's kick it off with markets. trump loves talking about the u.s. stock market and what that stung.

we've seen both the u.s. and china slump last year. taking a is definitely bigger beating. decline, four times that of the u.s. we'll say score to trump for this one. but both economies have shown signs of weakness. when we neutralize and see china seems to be slowing at a faster pace. we have to keep in mind, they have more fiscal and monetary firepower than trump, so this is another win for the u.s., but one worth watching. finally, foreign direct investment. , u.s. investments declined just marginally, which is in the blue here. not much changed. but chinese investment in the u.s., and 80% slump. it went from $29 billion in 2017 to $5 billion last year. stock this up to china.

so the final score, we have 5 u.s., 4 china. but if anything, there's no clear winner. ultimately in a trade war between two giants, everyone pays a price. nejra: thank you so much. stefanie is still with us. stefanie, it seems, judging by the fixing, that 6.90 is actually the line in the sand for the pboc. how long do you expect stability in the yuan to last? depends as to how much longer these trade talks drag out. i would believe we have to brace ourselves for the negotiations to take much longer than expected. and we're actually going from deadline to deadline. the next one is the g20 meeting in japan. until then, it seems the pboc is

quite dedicated, although lots of pressure on the renminbi. to be honest, we have to look at how the negotiations develop. and if things heat up, to open the currency channel and to offset potential new tariffs. with of the currency, i don't think we can rule it out completely. nejra: how would you be trading this an fx? would you be taking a dollar long against the u.n., or would you rather reflect trade war risk if yen crosses? stefanie: the trade war risk i think is best with the yen long position. you are right because the dollar vivendi is a politically driven motivated currency move. but the yen is quite well reacting right now to any dent in sentiment on the equity side.

to have it long position would upset pressure we see coming onto the equity market. there's a preference to take this position against the euro, to be honest, not against the dollar. nejra: great to have you with us. thank you for joining us this morning. now, let's turn to one of our top corporate stories. nomura's ceo will take a pay cut to assume responsibility for improper handling of stock market handling by employees. this is the latest setback for the firm. joining us from tokyo is russell ward. great to have you with us. what is your take a light on the newest newsline that we've had out of nomura? russell: this is quite a blow for nomura. what happened here is a researcher who was sitting on a stock exchange panel that was considering changes to the stock

exchange and properly shared that information with analyst and employees at numerous security unit, who gave that to clients, potentially market sensitive information. so the fsa is looking at this and preparing to issue what's called a business improvement order very soon that doesn't involve financial penalties, but it's very embarrassing for the company. that got one of these seven years ago when there was a trading scandal, and the ceo ended up resigning. the stakes are potentially high. very early days, but we'll see how this plays out. nejra: thank you so much to russell ward for keeping and i on that story. that is it for daybreak europe. the market is up next. we could see stabilizing in equity markets after the big risk off day yesterday. we are also seeing steadiness

and bond markets. when you're traveling to work, tune into bloomberg radio on your mobile device and dab digital radio in the london area. this is bloomberg. ♪

anna: good morning, welcome to "bloomberg markets: european open." we are live in westminster. i am anna edwards alongside matt miller in berlin. tradethe market say tgif, mixed as investors wrap up trade treasuries, the cash trade is less than 30 minutes away.