francine: trump's trip. james says downward adjustment maybe want concern. big tech gets battered. out $137tors wipe billion in value from backstock. welcome to "bloomberg surveillance," i'm francine lacqua in london. these are your markets. downward pressure for the stoxx

600. stocks, a route among faang stocks yesterday on the nasdaq, after talk of investigating them, leading to speculation. u.s. 10 year yields, aftermarket focus, is on when the fed will cut, instead of, if. coming up on "bloomberg surveillance," we hear from the shell chief executive on the oil price and later, liam black and bob diamond. straight to the first word news. the italian prime minister threatening to resign if the partners in the populace coalition do not stop squabbling. he is demanding they get to work on new policies to help the country. he has acted as a mediator in

the-year-old government. they argue on everything from tax and immigration to infrastructure. the u.s. fed may need to cut interest rates soon to counter downside risks from the trade to jamesording bullard. these comments, marking the first, fed official has publicly suggested the need for a cut. edging closer to a bear market collapse, as wall street bankers raise the specter of recession and saudi arabia tries to reassure investors opec will avert a supply glut. we spoke with the chairman of the world's largest independent oil trader. probably, it is the easiest

thing to do. australia cutting interest rates for the first time in three years, to guard against a darkening global backdrop, and to revive inflation and economic growth at home. adjustment.first cut.ash rate was global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thanks. president trump has hinted at a trade deal with the u.k., calling on britain to throw off the shackles of e.u. membership. desire tognal of his get on with the bilateral trade deal. he has been critical of the government's approach to brexit.

maying with prime minister and other officials today, meantime, the inflatable trump baby is just being inflated next to the house of parliament. forwardsbackwards and between the president and the mayor of london as soon as president trump touchdown at stance said yesterday. he allowed the blimp to fly. we are expecting it to fly shortly. our european news editor, david, and margaret, previously president of the white house correspondents association. thank you all for joining us. get tot, europeans don't

see the president firsthand very often. how did yesterday go? landedt: before he had there was a storm on twitter but the president has a healthy amount of respect for the queen and the tradition at buckingham palace and for the most part, it was calm after his landing. today is the day where politics and policy, where the rubber meets the road. he has this meeting with theresa may, also the discussions with business leaders and the news conference. before he left the u.s., the president said his press corps in washington was asking him, is it appropriate for you to be jumping in on the next prime minister's contest in the u.k.? he said, if you don't want me to answer the question, don't ask me.

people will ask him anything today. we will wait and see. francine: this is not anything new. >> he came for that working visit previously. he made similar interventions, similarly unwelcome by the government. he is already laying down conditions, very controversial, access to the nhs, access for american farmers, lowering of food standards, all this stuff, very controversial. he will not shy away from any of that in this trade deal. the more brexit supporting members of the -- the peoplearty about to elect the next prime minister -- his interventions could be more significant this time. we are about to kick off a tory leadership contest, starting on

friday, as soon as the president is gone, and people will be listening to his words. allhat is important for britons to see. getting out of the eu, and if that means a bilateral relationship with the u.s., do you have more leverage? this is a peek under the curtain. francine: trump is thinking of u.s. interests and he wants these deals. let's get to downing street. president meeting and not meeting? we know that, there are public times for boris johnson and nigel farage. he has said nigel farage should be part of negotiations, but

that is unlikely to happen. he has spoken favorably of boris johnson. he will be asked later what he thinks of those gentlemen, and to give more thoughts on boris johnson and the leadership of the conservative party. if there is a possibility of surprise meetings, perhaps, this afternoon would be the time. he is hosting a dinner at the u.s. ambassador's residence later today so people on the guest list will have to wait and see who pops up. we are expecting president trump's helicopter to be in the sky anytime now as he goes to buckingham palace and then st. james palace. between theng trade u.s. and the u.k. yesterday was all about the royal welcome. it is much more down to business.

huawei will get a mention. francine: how are protests this time around? david: they didn't have as much time to prepare. we are expecting a lot of people on the streets of london. it will be more apparent to the president. he will be in downing street. you are seeing that picture of the balloon. not guaranteed to put him in the best of moods. we can expect a response. francine: we were trying to figure out yesterday, if you suddenly imposed tariffs on germany, it takes a beating. simon: if he signals some redlines on the bilateral trade deal that are not acceptable to the u.k., that may put sterling under pressure.

on the point of, any bilateral isotiation, the u.s. economy $20 trillion. the u.k., fifth biggest in the world, just over $2 trillion. that is not a battle of equals. the u.s. can dictate terms. i bilateral deal takes how long? 10 years? longer? simon: that probably is not that long. if you look at multilateral deals, the canada one, seven years. to get theminimum i's dotted. given the areas that will be looked for market access, they will be politically controversial. margaret: that is if there is a hard brexit. if brexit is more nuanced, the

u.s. ability to negotiate will be predicated on what the implications are for britain's ongoing relationship with the eu. there are a lot of unknowns. president trump, his instinct to make a splash has to be tempered against his longer-term objective of getting the person he wants in as prime minister and giving them the space to negotiate the exit from the eu in the way they see fit. they are beyond the rhetoric, there are a lot more discussions behind the scenes, that are more complicated about the u.k.'s next steps and how the u.s. wants to play it. presidentdoes the visiting the queen make him look better back home? margaret: it presents him as a world leader on the world stage, he is able to play by the rules when it is important and necessary and he is receiving those honors and return.

isthe end, the expectation the presidential contest, 2020 will be decided on the economy and who the democratic nominee is. an image of the queen flashes before voters, that is pretty marginal. is base does not care that much. base does not care that much about it. it is his ability to get through it without doing anything weird, that is important. francine: we will talk about trade in the u.s. economy, next. thank you for joining us. coming up, much more throughout the day as president trump prepares to meet with politicians and business leaders on day two of his trip to the u.k.. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg surveillance," and i am francine lacqua in london. learned lawmakers could revise a resolution over the national emergency declaration the president used over the base of tariffs. margaret, when you look at, does the president go hard on tariffs because this is what he promised but try to safeguard the economy? or is he full in? margaret: yes. yes. [laughter]

what he has proposed in terms of dealing with mexico is the sliding scale thing that ramps up between now and the election. his expectation is that he will have something to show his base. and insaneetween 5% -- that isr like 25% all reading the tea leaves -- this is what many folks think. state, apresent a farm state in the middle of america that is affected by the potential for supply chain disruption, major auto implications, maybe you cannot wait to find out. this is a situation where the president and some republicans are at odds in a way that is not ideological, messaging -- this clearly affects the economy.

whenever the present goes overseas, he has always had to worry about what happens when he is gone. this is a conversation. --ncine: how much do we know the fed needs to cut rates -- the market is expecting a cut. how much does this help with tariffs? regard -- at in the margin, it will reduce the attractiveness of holding dollars. you expect some dollar depreciation which should help in terms of the underlying u.s. economy in the exports. in terms of actually, the ability to target, this is quite key, target specific areas paying those tariffs, u.s. households, u.s. businesses, it is not clear that the reduction, the servicing cost, you will get through the transmission --

whether this will hit the same group, there will be interesting distributional elements. 2020 anduite key into receive the color of the primary races on the democrat side. how is this hitting in different states? francine: we have a question from a viewer. keep on writing questions you want answered by us directly or through our app. last month said there would be no quick u.s. trade deal passing through congress that jeopardizes the northern irish peace deal. this goes back to the backstop. what does that mean? any trade deal would have to be an orderly way that the u.k. leaves the eu? simon: with all the noise in recent weeks about theresa may's

departure and the failure of the withdrawal deal, it is the only legal mechanism that the u.k. can leave the eu with out causing a significant problem at the northern irish backstop. there are differing views on the scale. undoubtedly, it will cause problems from the perspective of the crucial stability on the island of ireland, but also that crucial relationship between the republic and the u.s. and whether that passes through into the tolerance to be supportive for a new leader of the conservative party, may look to the u.s. as a key ally. francine: margaret, i have been dying to ask you this difficult question forever. [laughter] is it share price? margaret: to be simplistic, by winning. the president has fundamentally shown himself to be a tactical player rather than strategic.

and a half or so out from a race, you have to think strategically. he moves short-term on the chessboard. the president and his team understand there is not going to be a trade deal negotiated on this. they all know that. when officials brief reporters, they speak in those terms. they are meeting as much as they can. they are getting the pieces ready. that is part of this breakfast this morning. breakfastall intimate with business officials from both countries, to get in position to make moves on trade. the public messaging tends to be blunt and simple so that a larger volume of constituents can understand or hear at the way the president wants them to. he is saying, u.s. trade, americans, economy winning. the more nuanced pieces which

is, this will take years to work out and we don't know which way it will go -- that is not part of his messaging on this trip. francine: thank you both so much. erasedup, $137 billion from the market value of the faang stocks yesterday. this is bloomberg. ♪

billion, market

value wiped from faang stocks --terday after investors after regulators are investigating the tech industry. alex, this is divvying up who is looking into what. what is the worst case scenario? alex: that there is a breakup. they have not said anything publicly. get at&ty, you could breakup. that is a long way away from happening. it is something that elizabeth warren has talked about. if there is conversation of a breakup, does it happen on the level of, whatsapp, google, productsnsumer facing or is it on the advertising side? that is the anticompetitive piece. stuff that goes vertically and gives a huge amount of control

over a lucrative ecosystem. francine: it could take years. alex: absolutely. it could take five years or longer. meantime, live pictures of a helicopter carrying president trump, or picking up president trump. this is on its way to st. james palace. we think that is president trump, on the move. plenty more on the state visit. president trump meeting with business leaders and the prime minister, theresa may. ♪ .

trip, he said he traded with the u.k., he

meets with the prime minister shortly. calling for a cut, james bullard said the adjustment may be wanted soon as the treasury rally takes a breather and the tech gets badgered, washington ,egulators set their sights wiping $137 billion in value from faang stocks. i am francine lacqua in london. getting some u.k. data. probably about the bitcoin negotiations and the leadership of the tory party. 1.2657. expected, 48.6, that means contraction. we will get back to the pound but first straight to what is moving on your markets. i am looking at some of the main stocks that are moving.

we will keep your market check on hold and let's get to the first word news in new york city. >> a big trade deal with the u.k., president trump is hinting about this and calling on britain to call off the shackles of eu membership, his comments during the state visit to the u.k. are another signal of his preference for a bilateral trade deal and has long been critical of the government's approach to bitcoin -- brexit. some breathing space for angela , her partnerrnment agreed to remain on board this fight the turbulent resignation of its chief, the departure following the parties will results in european elections -- poor results in european elections. looking overbought as the global bond rally pushes

yields to multi-year lows. that is according to guggenheim partners. druckenmiller says in the next 18 months he can see fed funds rate going to zero and he recently filed into treasuries as the trade war between the u.s. and china escalated. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you. let's get back to the markets and a look at some of the stocks moving. this is sebastian. >> with the high-end electronic goods, i am a window shopper and have never bought in for that big purchase and of not alone. slumping today, the danish electronics maker not drawing in i is for big-ticket for figure items with their revenue down

14% in the full-year as they expected 10%, close to a four- year low. 18% declines. soft,oking good for ubi selling 20,000 shares, a 1.5 -- the brothers selling 20 -- 20,000 shares. a fortnight effect, these companies with a hit, drawing the gamers away from traditional countries like -- companies like ubi soft. hargreaves -- dropping the most since january. francine: we need to talk about the federal reserve and are watching the president going to buckingham palace and then going from there to st. james palace

for a business meeting. we are tracking the president in the u.k. but must talk about the fed, the federal reserve may need to cut interest rates sooner to counter downside risk from the trade war's according to the st. louis fed president. also be centering inflation. -- re-centering inflation. let's get back to the experts. thank you for sticking around. when do treasuries go to two? seemed unfathomable six months ago. thehe problem is that market is ahead of itself in terms of anticipating -- the u.s. economy could decouple from the ranks of the advanced world where low inflation and negative

interest rates are still the order of the day and a structural problem the u.s. economy was never going to be able to decouple to the upside but bets have been put on expecting treasury yields at the long end of the curve to move towards four. the momentum is so strong, we could well get to 2% quickly because the scale of the reversal going on now. also, comments from neel kashkari which suggests fed members are trying to prepare the market for a slightly dovish tone or maybe quite a dovish tone on the june 19 press conference. francine: treasury at 2%, what does that mean for the rest of the asset classes? >> the u.s. is an outlier in so far as positive real rates on its 10 year. it is pretty much unique. japan, europe, u.k., the rest of the developed world there are

negative rates at the long end in real terms. is it extraordinary or is the u.s. extraordinary on having real rates and coming back to the pack? i have been arguing it is the later. francine: we are looking at live pictures i believe of buckingham palace and this is what we know the president will do today, leave winfield house, this is the ambassador's residence at regions park, buckingham palace was earlier today and now he is leaving buckingham palace -- or he will leave shortly in the motorcade to st. james palace and participate in a roundtable and meets with the prime minister and they had a number of pageants throughout the day. how much, during this trip, not really during the trip, but how much is he thinking about tariff s and trade and what happens with china next? >> he is thinking about china all the time and using a messaging opportunity to send signals to china and his base

about his posture towards china. we saw him yesterday, as he was preparing for meetings with the royals, talking about china and saying businesses will flock back to the united states goes of the test stance on china. -- tough stance on china. francine: we do not often see the beast. >> we see the beast all the time. [laughter] francine: live pictures of the president traveling to st. james palace and he will participate in a business roundtable shortly. details of a traveling u.s. president is huge, is it bigger than inland -- in london? >> it is huge and the process of moving those vehicles over is its own many enterprise -- mini

-enterprise, weeks worth of planning so they can operate. awkward is it for the prime minister? she has been a lame-duck for some time. starting a leadership race on the conservative party on friday and the president wants a lobby the fact the u.k. should be tougher on china on huawei. >> there is no upside for the incoming dutch incumbent prime minister, everything with political ramifications is relevant only for her successor and who emerges from the pack in terms of the number of candidates, more than a dozen conservatives mps putting their name's forward. what kind of messaging and relationship will they have with the u.s. will be the key element in how they respond. matt hancock, the health secretary, was quite protective of the nhs and the will that and

health care may have in a free-trade deal. one wing of the party will go down quite well but he is speaking to multiple constituencies within the party and has to be careful in calculations but almost none are by theresa may. then nhi is different s. it is a national security concern for every western european country and the united states, how much of a concern and where does it end, thatnment systems or 5g, is being discussed and the u.s. is leaning hard on the u.k. and other countries. in general there is an agreement that hallway is a serious issue -- hallway is a series -- >> -- the treasury will not be keen to be locked out of this, even if there are ambiguities over the national security implications because they are cost

competitive and the bilateral relationship with the u.s. and the u.k., there is a u.k. and china relationship with theresa may's predecessor david cameron was key to promote, that is something post-brexit the u.k. will have to be mindful of. francine: we have and try to figure out if you can build a 5g network without huawei. >> the capability to do it is there without huawei, but whether it can be done at the same cost and there is a tight fiscal envelope in the u.k. would snow chancellor is key to break open your. francine: is this about trade, or a bigger role that china and the u.s. will have with dealing with technology and is a than i'd the article or -- ideological war? >> john bolton, the national security advisor for the united states, maybe has more national

security or geopolitical concerns while the president's instinct may be to go to reelections and to some extent the language is with trade. with mexico and his willingness to punish them with tariffs on immigrations, huawei, there could be a place where china trade talks with xi jinping and huawei concerns meet. even while he is allowed the possibility, the entire administration talks about huawei in a different market than they talk about let's make a deal on other stuff. francine: thank you. margaret traveling with the president. we are looking at pictures, onto buckingham palace where the motorcade of president trump is on his way to st. james palace and he participates in the business roundtable, not too far off from buckingham palace you

can see baby boy -- blimp, inflating, it took so much airtime while president trump was here for a working visit and the authorities tried to push back from america but the london mayor said it is the rifle way for londoners -- rifle way for londonersight way for to protest. the first lady will participate in a greeting with theresa may in the northern irish -- and the northern irish person. this is bloomberg. ♪

francine: this is "bloomberg

surveillance." i am francine lacqua. >> a bloomberg exclusive, for years tesla brought in revenue by selling carbon credits to other carmakers and these transactions have been shrouded in secrecy until now with general motors are -- saying they reached agreements to buy them from tesla, the first time an automaker acknowledges it is turning to the electric car company. taking ay giants beating as top u.s. antitrust officials carved out a battle plant to take on silicon valley's best-known names. facebook and amazon will be probed by the u.s. federal trade commission, the justice department said to open an investigation of google. apple for the future of its software, the tech giant for the first time will let developers rework their ipad to run on mac

computers, this will help revive and runapps ecosystem broader conversions two different software platforms. you.ine: thank the chairman of the world largest independent energy trader on opec's production target. to roll.ly expecting decision late, understandable. we are expecting more u.s. exports in the second half of the year. the role is most likely. lrancine: that was the vito german. breaking -- chairman. the president is on the move.

we saw pictures of the motorcade on the way to st. james fales and with he will participate in a business roundtable -- and he will participate in a business roundtable. will watch this and see if there is breaking news. we expect a news conference from president trump and theresa may later this afternoon, actually early afternoon, and there will be bilateral -- president trump and his wife participating in meeting with theresa may, the prime minister of the u.k.. us is simon. tweetesident could something at any time and we are looking at inflation, coming to the u.s. in the second half of the year? >> there are factors that have a upside to the u.s. inflation,

the first is tariffs, they are inflationary for u.s. households , but the degree to which they will continue in the second half will depend on the ramp up with mexican imports and the sustainability of the existing --ndup tariff, china import china import scarlet fu -- chart -- china import tariff. we have are less about the oil story and the hawkish iranian nuclear deal, that has kind of gone away and the worries over the demand side on opec and opec supply means the oil price has weakened. that will pull inflation back. it is a mixed picture. if we have gone back six weeks we would have thought the pickup in inflation which means the federal reserve will stand pat, that is pull back on the oil price and the balance is starting to shift towards inflation undershoot and the federal reserve.

francine: let's crossover to downing street with pictures of the president with his u.s. ambassador to the court of st. james, woody johnson. the second day of his state visit. anna edwards is that downing street. do we have any insight into what the president will tell businesspeople? orl the talk about brexit death will key talk about brexit or -- will he talk about brexit or huawei? >> i am sure he will be asked about brexit, the bilateral conversation between theresa may and the president, he said the business agenda, goldman sachs, j.p. morgan have come from the u.s. to be a part of this conversation. barclays, whether u.k. businesses, a meeting of these business sides. you wonder to what extent trade tensions will be talked about.

people feeling optimistic about the prospect of a u.s.-u.k. trade deal, what are we learning from the global trade conversations going on at the moment and how that can be translated into what the u.k. may experience in the headlights of a u.s. trade conversation. you have been showing pictures of president trump participating in the conversation. things more political after that with president trump and the first lady expected to meet theresa may at downing street. francine: thank you, anna edwards at downing street. coming up, the italian prime minister getting tough, the story is next. this is bloomberg. ♪

francine: breaking news at president trump, saying the u.s. has an opportunity with trade for the u.k., just talking at an event with business leaders in london. we saw president trump flanked

by his u.s. ambassador, woody johnson, to the court of st. james. we have reporters on the ground trying to figure out what they it islling each other as an open event and the u.s. can enlarge trade with the u.k. -- what is thece relationship of president trump and business leaders? it ism what we know, cautious engagement from u.k. businesses. the caution comes from -- the engagement comes from the size of the prize, expanding actual trade and the caution is -- president trump has been clear countries have a trade surplus with the u.s. are in his crosshairs. francine: germany! >> correct, but also the u.k., the data is mixed but according to the office, we have a trade surplus with the u.s. and if that is the briefing the

president is getting, he will be looking to greatly enhance trade but he will be looking to make sure the u.s. gets more of that volume than the u.k. we do not want to get into mercantilist economics. of maybe we should in terms understanding the incentives and the likely outcome. that is why it is cautious enthusiasm because the conditions may not be attractive. francine: what is the president relationship with fx? should we care? should we try to figure out how the president uses these movements? >> does he want a strong dollar weak dollar? i think he wants a weak dollar. should we care what he thinks and whether it will change the direction? my own view is that what he is prescribed in terms of a more hawkish strategy towards china and mexico, that will encourage

the weaknesses that have been weighing on the dollar over the last decade, the dollar moving out of the u.s., seeking yields overseas, will start to repatriate themselves in the u.s. which strengthens the dollar and that is why one of the ended to the consequences of what he is doing -- unintended consequences of what he is doing, takes away some comparative advantage. francine: thank you,. we continue in the next hour with tom keene in london and later we will talk to bob diamond from atlas merchant capital. we are watching president trump, currently meeting with business -- ers and the b

francine: trump's trip, day two.

he meets with the prime minister shortly. james bullard says a downward adjustment may be needed as the treasury takes a breather and big tex gets badgered with regulators wiping out more than $137 billion of value. good morning. this is "bloomberg surveillance." tom and francine from london. trump is meeting with business leaders where he says if you can a deal with the eu, we come to an agreement and the u.s. can greatly in large trade with the u.k. tom: trade is front and center, a surprise we have seen the different countries, we saw india, australia, and trade officials, the president with a closer for us treatment -- -- president trump is

assuming brexit gets done. francine: boris johnson and nigel farage -- breaking news, inflation, president of the ecb, mario draghi, looking at bloomberg and tried to figure out what that means for his rate policy before his term ends at the end of the year with inflation slowing to 1.2% in may instead of the estimated 1.3%, a little more difficult now to put policy for the ecb as inflation is not taking a stronghold. tom: we see that worldwide, south korea data overnight was tough. amazing to see the regression of slower economic growth in south korea over the last 18 months. a most interesting london in the last 48 hours. the magistrate -- magistrate we go to annaam -

edwards. street withning bilateral conversations between the trump team and the theresa may team. new leader for this country for the conservative party. agenda, he will be asked about u.k. politics and talk about brexit and who he thinks leads the negotiations and the conservative party. we have heard a lot about trade. some skeptical about what can be achieved from a u.s.-u.k. trade deal, or what is still to be achieved that has not been secured. tom: the president and ambassador johnson in meetings now with the business roundtable. anna edwards, a protester in the background but the greatest protest may be from prime minister may who has diminished power. how diminished is she as she

goes into these final days of her administration? anna: she is waiting to resign which he will do on friday. very diminished. we have been getting assurances from the u.k. government about what will not be on the table for u.s.-u.k. trading decisions. if the u.k. leaves the eu first, that is the criteria, what are the assurances worth when you know the leader of the party will not be so into the future. meet whether trump will boris johnson or nigel fairer, a gap in the schedule, midafternoon, early evening, before you post a party, a banquet at the u.s. ambassador's residents in london so we could see those encounters if boris johnson and those in the running for leadership field it is in their interest to be associated with the president at this point.

francine: how much and how tough does the president of the united states of america want european business leaders and the government to be on huawei? anna: he wants them to be on his side, he has launched a battle against huawei and has already seen the effects of the u.s. policy going global what he wanted to go officially global. we do not know what the u.k. official decision will be. there are leaks would suggest the u.k. would not ban huawei how right but only allow certain parts of the infrastructure. that will be talked about at the press conference a little bit later on. some people asking about how much does this have to do with real security concerns and how much is trump's geopolitics. francine: thank you, anna edwards, live from downing street and she will be on the ground throughout the day. let's get to the first word news. >> senate republicans are

considering whether to overrule president donald trump's plan to impose tariffs on mexico as lawmakers could revise a resolution disapproving the national emergency declaration the president used as a basis for the tariffs. senators in farming states are worried about the impacts of the duties on their voters. china blasting mike pompeo for his statement on the 30th anniversary of the tiananmen square crackdown, mike pompeo saluted the protesters and urged the chinese government to make a full accounting of those killed. china calls that an affront to the chinese people and says mike pompeo grossly intervened in china's internal affairs. for the first time in almost three years, australia has cut interest rates, their central bank is trying to drive increased -- increase hiring and faster inflation with data tomorrow may show the first quarter the australian economy rose by almost one full percentage point less than the

central-bank target. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you so much. after a couple days of lower yields. features up 12. the euro advances off weaker dollar and oil is south. oil has had a tough go. 20. away from20 yen, stronger. yields has an-year life of its own. the most interesting chart. francine: so does the u.s. 10 year. a love the focus on the u.s. 10 year.

-- a lot of focus on the u.s. 10 year. i wanted to show you what the european stocks in the technology sector are doing after there was talk about technology fears in the u.s. that led to a route because some investigators are looking at whether these companies should be broken up. watch technology and treasuries and president trump. president trump with business leaders and says they will have a substantial u.s. trade deal. it was interesting, a viewer wrote in about a half an hour ago saying that nancy pelosi said to get some kind of deal through congress it would also mean that the brexit negotiations would not have had to hurt the peace process with ireland. there are multiple facets to this and everything is linked. the unicredit chief economist is joining us and our senior writer who has been following the trump administration closely.

,rom an economics point of view with the trade deals that have been negotiated in the past, there is a clean slate for the u.s. and u.k. to sign something, how long does this take, five years, 10 years? >> trade deals are extremely complex and take a long time. tookuropean-canadian deal almost seven years to negotiate and another year to ratify. it does not include anything on services. for britain alone, services, financial services hopefully will be a part of it and that makes it even longer. between like-minded countries, without the process, three years, four years, five years. francine: what are the implications? president trump arrives in the u.k. and says the london mayor is all sorts of things and

starts talking about the brexit process. does this change anything? we are about to elect a new tory leader and prime minister? . >> yesterday he stuck to the script, surprising, today could be different, given the press conference he will likely talk about brexit and i expect him to say that -- more things about boris johnson and nigel farage, repeating what he said in his interview over the weekend. will say warm he words about the prospect of a free-trade deal between u.s. and u.k. but not clear he will be in the white house once the serious discussions get underway. he has been waging a trade war with china, given that, threatening mexico, playing tough with europe, i am not certain he has much credibility on that front. tom: credibility is being tested

over the last three days and we see if this morning. 10:00 a.m. in london and the festivities beginning today, the tells the prime to getr to "stick around a u.s.-u.k. trade deal done." how was prime minister theresa may greeted last night? >> she is in an awkward position. she is leaving office on friday and basically a lame-duck prime minister. her positions on things like whether to use huawei technology in the buildout of 5g, are likely different than other tory party contenders and today does not have substantive long-lasting affect because she will not be around. tom: you grow forward today your award-winning work on paul manafort. you had a story out on this

issue for the president. one of his issues today and i believe we can show, the baby blimp being blown up, he wants to ignore these things, can he ignore the protests in london? how do we rationalize what he usually does, ignore the negative slightly protests and paul manafort? >> hard for him to ignore the willsts, if he is smart he , but i think it will get under his in. if -- under his skin. he should laugh off the baby blimp and laugh at himself rather than let it annoyed him. it is unclear how many people will protest, the fact that jeremy corbyn will be addressing the protesters today, i am sure that will bring a comment from president trump. tweetingieter day of

yesterday except for the mayor of london. erike political day with and stephanie baker. coming up, may the most interesting moment of the day, not francine and i, but the news conference we may see president trump and prime minister theresa may. this is bloomberg. ♪

is francine, a beautiful street, the clearance house is

there at st. james ballots. -- palace. francine: the security is amazing, a lot of european , we saw him go from buckingham palace to st. james and to downing street to meet the prime minister. tom: where will the protests be, in cornwall? [laughter] francine: the authorities have done their best to make it more comfortable or the president, as usual, but we expect protests in large numbers and he is not addressing the house of lords for that reason. tom: stephanie baker is with us and derek neilson -- erik nielsen. you are on optimistic but multiple trade wars, china, mexico, if it is friday, let's go after india and saturday, let's go over -- after australia

and now the united kingdom, why would the president want to be adversarial with the united kingdom? erik: i do not know why trump does what he does. he is a divisive figure. he is a person who creates enemies to boost his standing in his constituencies in the midwest. he does not understand or believe in multilateral trade. francine: this is crucial. margaret has been following the he considers anything bad for america unilaterally good. appreciatees not that it is a zero sum game. he thinks there is a winner or a loser. makes no sense. londone ugly american in

, but post-brexit, a different united kingdom. does it really want to turn west to the united states with all of the trade going back and forth with europe? psychological, do they want to turn west? stephanie: the irony is president trump is very unpopular but the u.s. -- u.k. government, theresa may or boris johnson, need to keep u.s. on its side because of the hope there is a u.s.-u.k. treated -- free trade deal even though the volume of trade between the u.s. and u.k. is small compared to the european union. increasedu assume u.s.-u.k. trade means diminished europe trade? theyning: -- stephanie: have sold it as a world beyond the eu and if they cannot get a u.s.-u.k. free trade deal, a deal with their closest ally, there are questions over whether

the brexit project can succeed. francine: stephanie, thank you. a senior writer. erik is staying with us. david rubenstein and the carlyle group co-founder will be talking with a lot of people, including , on bloomberg tv. ♪

ease now, that if we we could reset inflation at 2% target, a good thing for fed credibility and the 2% -- credibility of our 2% target, and provide insurance in case the downturn was in global growth was more severe than we had previously expected. louis,e man from st. there are governors and presidents and the vice chairman , the chairman speaking today, jerome powell but far more importantly each is different and james bullard is decidedly different in st. louis, the president of an interesting district. in chicago, jerome powell will speak and we will have coverage. michael mckee is in chicago, a good thing, with his interpretation. we interpret in london, thrilled to be here, the president, eric

nielsen oferik unicredit. he said assurance, there is a confidence that any central bank can get out front of whatever the trend is and manage the trend. history shows that to be difficult. erik:. impossible tom: thank you --erik: impossible. tom: thank you. erik: he has shifted his stance come he talked about normalization of rate and they are getting nervous. they are getting nervous about the inflation numbers and inflation expectations. as we talked about, there is a school of thought, that i belong to, that says the u.s. is more likely than not to drop into something that looks like a recession next year. tom: even though not a defined

recession? models onprobability whether they are definitions are not, whatever, sometime in the middle of next year, it is forecast, you have the ducks lined up for a -- something that looks like a recession and for me the risk is not that it does not happen but it happened early or more dramatic because of this man-made myth of trade policy. francine: it does not change the outcome but the timeline. how quickly could it come, a recession, in the u.s.? takes fourlly it quarters. francine: it could come in six months? erik: it could come early next year, three months. if the gdp takes a good dive

down you could have it early next year. francine: the concern is the fed does not have the tools to deal with it? erik: central bank does not have the tools to prevent it. they have stopped be hiking cycle than normal, normally they would cushion some of it but they have more ammunition than the europeans but you cannot prevent it. tom: your study of history is we never see it coming, usually it is the short-term paper market and we have shocking inversions, what does that signal? erik: there is never is a certain guide. you look at the inversions and up to the 10-year, you look at the probability models they still labor markets, you look at the length of the expansion period and you have to include the overwhelming probability is around zero sometime next

spring, summer. it is not a given. we are living in a probability world. it is all about probability at the end of the day. rik, philosophical but you still need to make a bet. erik: you do the probabilities and you see what the price is and that is your pet. -- bet. francine: the unicredit chief economist stays with us and coming up, plenty more from president trump and his state visit to the u.k. we speak with robert kaplan and charles evans tomorrow. ♪

♪ we welcome all of you worldwide in the early morning of the united states of america, as the president is in london.

we have a jittery camera, there it is, so beautiful. important meetings, including with prime minister may. erik nielsen is with us. we got a few bottles of the windsor great park 2014 english quality -- francine: not on set. this was at the banking -- banquet. tom: finishing with a 1990 premier crew class. how much does that cost? francine: a lot. tom: that is our "surveillance" research. francine: president trump is still participating in the business roundtable, and he and the first lady depart for number 10 downing street where they will meet with the prime minister and the head of the dup.

how awkward is this for the prime minister? she leaves as conservative party leader on friday which opens up the leadership race. erik: it must be awful. it is the capping of an awful prime minister ship that has decelerated into more awkwardness. it must be strange to host. ,aybe for somebody like her having been in politics for her life, it is important to host the american president, whoever he is. if i was hurt, i would have left before he came. tom: the images of protests in london. our first word news, here is viviana hurtado. viviana: china issuing a travel warning for the u.s., saying u.s. law enforcement have interrogated and harassed chinese visitors.

president trump restricted student visas at elite universities, several students and and structures saying they find the environment and friendly dutch unfriendly. last week, a south korean reported north korea executed kim jong joel for failing to reach a deal with the u.s. he led the negotiations. no official response to the cnn report. his populistin coalition do not quit posturing, that is a warning from giuseppe conti. i want agree to languish my presence here. if they do not take

responsibility in full transparency, i will hand them my resignation. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. thank you. there is breaking news, two items. south africa with the first foreigner contraction in wetralia drives forward -- need to get a quick thought with eric. -- erik nielsen from unicredit. how does this correlate back to the central bankers speaking in chicago today? about what thes fed is doing, so it is more fundamental what tools you need. tom: more domestic-centric? erik: yes. tom: can he ignore the foreign

tea leaves? erik: no, he cannot. this is very important for the fed, and the world is not looking particularly good. global trade came back, but it is much weaker. you see the first tea leaves of countries reacting to it. francine: do you have to become a political analyst? -- far do we think political president will go? the president tries to use the tariffs to get foreign policy, but he is up for reelection so he does not want to hurt the economy, or does he? erik: i am sure he doesn't, but i don't think he understands. a particularly strange thing in the u.s. and europe for some extent, trade restrictions sit well for parts of the population. say,pulists are again to

the trade is not fair for us and therefore we go after other people, he is playing that political story. you have seen it with many politicians. francine: we will talk a little billiont tech now, $137 is the amount of value wiped from faang stocks yesterday after antitrust enforcers announced they plan sweeping investigations. the ftc will take responsibility for antitrust probes of facebook and amazon, while the antitrust department will investigate google. make us smarter on what this means. we saw a little bit of route when it comes to tech spots -- stocks because people are worried about country dutch companies being broken up. alex: that is the long-term

concern. the two headline ones are googling facebook because booken them, -- google because between them, -- they are getting all the growth. when it comes to breakups, increasingly the competition not be about whether facebook should own all it owns, or whether they should own the various pieces of the advertising stock which means they control the bidding and buying process for online apps. francine: you divvy up who looks into what. how much do we know about the regulators understanding these country dutch companies? alex: that is the perennial question. say, youcompanies don't understand, you are stifling innovation. realized theyy

cannot say to the european condition, you are wrong, you are stuck in the mud regulators and we are the cool kids. they have to work with them to limit the damage. tom: i thought you were the cool kid. alex: i will take that. tom: this chart tells a great story of the bear market of the faang stocks. this is the u.s. stock exchange faang index, more than just the regular faang. early may.m that is a stunning chart from the decline here. can they use their cash and cash generating ability to buttress and support their stocks while they go through regulation? alex: certainly we have seen apple do it for quite a long time. tom: google becomes apple? alex: that is the question. even with problems this year,

google and facebook are over where they were 18 months ago so it is an option. facebook and google are heavily cash generative but they do not have the same amount of money as apple. tom: there was a headline in the bloomberg, justice department drops charges against that evil guy bill gates. congresses,fferent different department of justice officials, and there is a signature headline, doj drops regulation of google. alex: he did change behavior at microsoft. having gone through all this hullabaloo, every decision they made they thought, am i going to be subpoenaed? it led to a change. tom: and my buying a new iphone? alex: i personally would buy a

new -- tom: and huawei has the new camera. alex: they are apparently incredible. francine: can i ask something about encryption? phones wes not safest can have? alex: it depends on what apps you install. the phones are comparable. google will take your data and aggravated to serve you, but as a product it is a bit better -- aggregate it to serve you but as a product it is a bit better. francine: tom does not ever call me the cool kid, so i'm trying to be cool. "surveillance" in london with the president of the united states, a political day. erik nielsen with us. this is the most interesting panel. we are thrilled to bring you we on black.

-- leon black. ♪

♪ this is bloomberg "surveillance." the trump administration may have found its most powerful weapon yet in the fight against huawei. the equipment maker is losing ground with european smartphone buyers. foranalyst says demand huawei phones has dropped off a fear that means the phones will become out of date. maker of the danish luxury electronics are plunging, posting a larger than expected drop for this fiscal year. --sumers are bulking at

bulking at the prices. its collegexpanding tuition program to attract and retain workers. there one point 5 million workers in the u.s. can pursue degrees in additional fields, and they will offer prep courses onerouss and less hours. francine: the italian prime minister threatened to resign if the partners in his populist coalition do not stop posturing while he insists they get to work. not agree to language just to prolong my presence. -- languish just to prolong my presence. i will hand in my resignation. francine: erik nielsen of unicredit is still with us.

when you look at what he was saying, he does not really hold power in this coalition, especially after the e.u. elections. will he go to early elections? erik: in italy, only the president can call elections. there are two theories. the prime minister has had enough of this squabbling. it is unusual in government. he could have had enough of this, and that is the most likely scenario. the other possibility is salvi wants an early election because he will win, actionneeds to set into the prime minister calling for the. -- francine: who is in charge? is it matteo salvini?

erik: he came up to power on a , evennti-european stands threatening to take italy out of the euro. support for the europe -- euro increased to 72%, 73%. inn he said, i want to stay but change it from within and that is where we are. tom: what is the dynamic with economic growth in italy? structuralalks about permanence to a better economic growth. the entire unicredit team, your economic and commercial banking teams, do they see any sense of inting to a better liturgy italy? erik: now. -- no. you have very good companies in the export sector so exports

continue to grow faster than the growth in the markets. this is a good part of the story. the savings ratio has gone up instead of consuming, and companies have started to invest less. nervousness has been the predominant part where italy is different from the rest of europe. francine: do you worry about germany? last week we were reporting angela merkel is not as pleased as we thought she would be with her choice of successor. yesterday, the spd was stepping down and she convinced them to stay on. how politically dangerous is germany? erik: many other countries are dangerous in a sense. francine: more stable. erik: it has certainly within the leadership context and the spd party and the government,

the possibility of early elections have increased quite a bit. i always thought it was not likely because merkel at the end of the day was in control and wanted to see the rules stay in place. she seems to be in trouble. spd could be the one pulling out. they are in trouble. francine: erik nielsen of unicredit stays with us. we are looking at live pictures of pall mall. it is not the convoy, because we are not seeing the beast where the president travels, but we are seeing a lot of land rovers. that is what the royals travel in. we will stay on top of any movement of president trump and his entourage. this is bloomberg. ♪

♪ very difficult times in the markets where the financial wars, andrade

understandably, and yet the still.nd is pretty good it does not look bad. i almost feel it is almost too early to rule out a recovery of price. it is a very exceptional time and you can probably expect them to roll. it is the easiest thing to do. they have made the decision very late, which is understandable. we are expecting some more u.s. exports and the second half of the year. probablyhe role is this moment in time probably. francine: from our exclusive interview with the vtol chairman. do not miss this energy panel moderated by annmarie hordern.

we will be hearing from oil ministers and executives. you can catch that on bloomberg tv this friday. tom: we are speeding up what we see in london late morning, as we say good morning and america. the president asked one of the prime minister candidates for a meeting. this is important, and that we expect the president to go to true brexiteers like prime minister johnson or farage. now he is requesting a meeting with someone different. francine: if you track what president trump was saying from the beginning, ed is almost like boris johnson and nigel farage -- it is almost like boris johnson and nigel farage were his guys. there was a moment where he also said theresa may should stay on to negotiate a brexit, and that

was a little bit odd. sometimes you focus on the messaging without looking at the details. tom: erik nielsen is with us, and we are thrilled. now, jenny leonard will join us today. she is looking at china, mexico, india, australia, and on and on. you have been working a legit 25/eight day on trade. what is the cacophony now? >> when the president does trips overseas, trade is always on the agenda. here we have brexit, potentially and e.u. deal. back home, there is drama because of the mexico announcement. congress is freaking out, is this really going to happen? itse need to stop this in

tracks? we talk about the president being mercantilistic in his trade theory. how mercantilistic was he last night speaking to the queen? jenny: it depends on his audience sometimes how mercantilistic he is. has messaging to an audience, to brexiteers, his base back home as tariffs are good, tariffs are beautiful. hard brexit is what he is going for, but again the white house message on brexit is very inconsistent when you see the statement put out yesterday that was contradicting what trump was saying. the messaging is a little off, but we see this throughout the trade agenda. francine: if president trump goes back to mexico, does that mean he is less likely to have a

deal with china? erik: i don't know that, but it is strange. it is a sign of his randomness that we thought we had nafta 2.0 and it decided to pick up again. i think it has to do with the fact that he finds china difficult to deal with. they are tough and he cannot win this battle, so now he picks on somebody smaller. that is my guess. francine: it is the first time we have seen him use trade as way to fixicy, the immigration is to work through tariffs and trade. will we see foreign/trade intimidation from the president? which countries are vulnerable? jenny: i have to disagree. i think mexico is a lot closer to home for the u.s. congress and u.s. consumer. china is kind of the bogeyman in washington now.

mexico is something where everyone -- tom: what is the update on nafta to? will there be one? until wednesday or thursday afternoon, we thought so. the white house notified congress, we will move this along and then at night out of nowhere came this mexico announcement. congress has leveraged to say, do you want this trade deal? you might want to reconsider. tom: jenny leonard with the cacophony of trade we have seen, percolating in the beginning of a post-brexit u.k.-u.s. trade deal. ♪

♪ tom: this morning, the morning lemonstrawberry sable and

verbena cream, the president turns to politics. trump wants a brexit in britain to turn west and leave the e.u. behind. global economic data signals recession, governor carney dining with mr. kushner over the 1990 rate cuts. the markets, what about the markets? steady as she goes, on tomorrow support smith. this morning, 10 -- on tomorrow to portsmouth. this morning, 10 downing street. blueine lacqua wearing the like carolina herrera. i am wearing a ball gown because i was not invited to the state visit. but for you, i wear a ball gown.

tom: the uproar over the state visit and now to politics, we go to 10 downing street. -- odd is prime minister blackminister may in dou -- dour black last night? has askedmr. trump for a meeting with michael gove. prime minister may will meet with the president today and is stepping down as the leader of the conservative party on friday. president trump has endorsed boris johnson and nigel farage. this is another party, and he sees him as one of his guys. it is not necessarily an endorsement that plays well with the conservative party, but certainly interesting to look

into these factions and parallels. tom: interesting imagery, i believe that is sir lawrence the cap and the window at 10 downing a tuxedo.obably in francine: i think he is called larry. tom: this should be a busy hour for the president in london. now with our first word news, here is viviana hurtado. viviana: senate republicans considering whether to overrule donald trump's plan to impose tariffs on mexico. they could revive a resolution disapproving at as a basis of tariffs. senators in farming states are worried about the impact of duties on their voters. china blasting mike pompeo for his statement on the 30th anniversary of the tiananmen .quare crackdown

he saluted the protesters and urged the chinese government to make a full accounting of those killed and china calls that an affront to the people, saying he intervened in internal affairs. hailing a $19p billion disaster bill. it provides aid for those hit by hurricanes, flooding, and wildfires. they turned back the request to include money for border security. australia has cut interest rates. central bank is trying to drive increased hiring and faster inflation. data may show their economy rose by almost one percentage point less than the central bank's target. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much.

we should go to data but we will not right now, something in a busy hour of breaking across london. francine: we are on president trump watch and we know he has departed winfield house. he will not meet with arlene foster, but we saw the red carpet rolled out at 10 downing because he is due to meet the prime minister. tom: protests happening as well, we will have to watch those. let me do a data check, and is do with-- it is easy to the lighter market today. lift,s left, the year -- the euro lifts. a 49 handle on west texas would be something. vickspull away from a 20 with better equity markets this

x with better equity markets this morning. francine: european equities were down, and if we bring my board up, they are moving sideways. i am looking at treasuries dropping, dollar edging up. the big story is what is happening in tech. stocks, lended faang stocks index threw two a bear market now -- blended faang stocks index through to a bear market now. we just spoke with jenny leonard on trade and we are thrilled margaret can join us today. senior white house reporter barely describes her experience. edwards is with us as well on the red carpet at 10 downing street. what will we see in the coming

hour? waiting here in downing street for president trump to arrive. they have literally rolled out the red carpet, as well as metaphorically, with the royal exception -- perceptions. he will be meeting with the prime minister and will have a doubt where he pauses, no for the media that have gathered to witness this meeting. interest,eadline of the u.s. team has reached out for a meeting with michael gove and the ongoing battle for who will lead the conservative party. gove interviewed trump while he was taking a break from his front line in politics. whether this plays well for gov e, it is something he will be thinking about, because this has not been finalized whether there

will be a meeting. he is interested in the contrast make of himt will what jeremy corbyn. protesters are expected to gather in trafalgar square and westminster. we have seen the trump baby once again flying above london. francine: in the interview that times"trump gave to "the on sunday, he was talking about the labour leader, jeremy corbyn is making a big mistake. he did not go to the banquet yesterday. what would be the implications of a trade agreement? anna: it is interesting. jeremy corbyn has been very clear to distance himself from president trump, and that is the stance. also the leader of the liberal democrats banquet yesterday,

vince cable, did not attend. community is divided, business leaders are divided. many business leaders we spoke to come at ceo of shell is talking about the positive take from the room yesterday. interesting to talk about the possibility of the trade deal and whether it will get done. the u.k. economy will be on the table during any u.s.-u.k. trade negotiation, but the u.k. needs to leave the e.u. first for the u.k. to have the confidence to negotiate trade. tom: anna at 10 downing street with protests in the backroom -- background. margaret, i want to look forward but i must look back at the firestorm of american snark on twitter last night at the state

dinner and the presidential family. you have wonderful experience. put it in true perspective. due-- how did the president at the state dinner? margaret: at depends on the lens through which you view it. the president did not create a lot of waves last night at the state dinner and conducted himself within the normal lines of presidential behavior. that is the measure by which these optics and visit will be judged. today is supposed to be the day when any political news got made , and there was some controversy over whether he touched the queen or why he had his can't just hand by the queen -- hand by the queen's back. , everyrgaret talev foreign leader plays to the home audience here who is president

trump playing to an audience? base, hisone is his most consistent audience. he is sending signals to congress and outside the u.s. he sendingignals is to republicans in congress? margaret: i am still the president, four back. -- watch your back. francine: we saw the red carpet rolled out and jeremy hunt just walked in with jared kushner. what does the u.k. want to focus on? is it foreign policy or do they want to make sure they can start working on a trade deal? been manythere have movements and discussions toward 40 period of several months. period of several

months. he told theresa may this morning to stick around. i don't know what your timetable is but maybe you could stick around. not so much. the ability to even begin to negotiate this trade deal is minimally amount of months, to a mount of years. the president is here, i am here, i want to do something now. that is not the way this works. francine: thank you very much. bloomberg "surveillance," and our live coverage of president trump and prime minister theresa may's joint news conference this afternoon. this is bloomberg. ♪

tom: john adams and the time of the colonies, and woodrow wilson in 1918 and the celebration after world war i, on to dwight eisenhower in 1951, and to the modern age. it is always a historic moment to see any president with royalty and today, the prime minister of the united kingdom. francine: you see the president walking to 10 downing street flanked by melania trump. the two leaders will not hold any private talks, because they are going to have a working lunch. it is not unusual that there is no one to one meeting at this

sort of event. tom: this is so different than it was expected to be 10 days ago. i cannot remember the calendar, 14 days ago. suggesting a motion of prime minister may at this moment. anna: she knows that she is out of this job. she is leaving this post and she will no longer be leader of the tory party. she will maintain as prime minister in a caretaker position until a new leader is found. melaniahe president and exchanging greetings on downing street. moments ago, we saw the beast and the decoy beast toward the gathered media. the international media out in force to watch this visit. lame-duck or not, this meeting

is certainly drawing a crowd. whether she has the ability to agree anything as debatable, so this is certainly what we are following. we understand from her spokesperson that all of that will be on the agenda, as well as any trade deal. unfolding,istory is the prime minister of the u.k. for the last time inviting a president of the united states into downing street. we have a couple of people traveling with the president. he is about to embark on a working lunch. let's bring in margaret talev. purpose is tont's talk trade and get something done, the prime minister is not the right person to talk to. margaret: that is why there is not much need for a one-on-one meeting. this relationship is essentially

over and you could argue it has been over sometime. the purpose of the president and team,am, and may and her is to try to build some bridgework to extend along the -- beyond the prime minister. tom: margaret is exceptionally experienced in american politics and the relationship with the rest of the world. as has relationship over with , thee, with mr. macron next chancellor of germany? is it that fractured? margaret: there are personal relationships and the country's relationships. europe seems to be emphasizing that. the president is encouraging the u.k. to get out of brexit clearly. that is not a message europe wants to hear. tom: i read all the press and it is a mono lateral my way or the

highway tone. he wants to go into the medical system of the united kingdom and he wants open services. i don't hear much of a give-and-take with me bringing in stilton of the united kingdom. margaret: this is precisely who we have known president trump to be in his two and a half years as president. it should surprise no one. it is an opportunity for anyone who wishes to succeed prime minister may to speak clearly now on how they were -- how they want to respond strategically. francine: a live shot of the beast. tom: cadillac, not a beast. francine: they are in 10 downing street for a working lunch. a foreign joined by shadow secretary. the president of the united

states says jeremy corbyn is making a big mistake if he is not america's friend. would you have gone to the banquet yesterday? emily: we are america's friend and have been for a long time. men of your brave young came over to europe in order to fight for certain values, and lost their lives. i will be commemorating their deaths and thanking them in the next few days when i go to france, so we are close friends. we share certain beliefs in democracy, internationalism, give-and-take, working together, and world order. i don't think this president believes that and is trying to take it backwards. as a close friend of america, it is right to say your president is wrong. do not go to war with iran. do not start squaring up to them.

do not allow the west bank in the middle east to be carved out by netanyahu. stop selling arms to saudi arabia that can be used in yemen. those things need to be said, and i don't think this president serves the honor of a state visit. only three of the american presidents have been given it and it is wrong for this president to have one. that is not to say we should not talk to him, but not a state visit. francine: someone who hopes to become the next prime minister of the u.k., should they be speaking at an anti-trump rally? emily: we are against the idea of him being at the state visit. we wish to speak to him, have no problem to speak to him, and if jeremy was given a meeting with trump i would be kicking the door in to get in, because there are a large number of things we

need to talk about. i suspect they would be heated and it is inappropriate for us to have heated discussions in front of her majesty. we also think it is wrong -- go ahead. tom: if i may, mr. corbin will speak today. which part of liberal united kingdom will he speak to, his constituency, or does he need to brownoward a more blair labour party? emily: what we need to do -- and obviously today as well -- we will be speaking to those with grave reservations about this president and his behavior. i think frankly, we are also speaking for a very large number of americans as well who have grave concerns about the way he behaves and what he is doing on the international stage. to him,say harsh things

it is only on the basis of the way he behaves and things he has done. francine: can i ask your position -- emily: seem to be unable to criticize him, and behaving in a way that is entirely weak and inappropriate. i think donald trump only respects people who are strong and if you kowtow to him he will kick you harder. francine: can i ask about the threat posed by well way? who is right -- while way? -- huawei? emily: i am in a counsel to the queen and i am given security briefings. not in the same depth as when i hope to be foreign secretary, but any decision a government would make is primarily on the basis of what it is that would sit -- protect our security.

we would not let economic expediency to get in the way of security, so it would depend on that advice. unfortunately, i am not able to reflect the advice i have been given. we were not given the same depth of information is the government. francine: would labour allow huawei to run 5g networks in the u.k.? emily: it depends on the security advice. francine: would you make it policy? listenthe policy is we to our security advisors and act on the security advice we are given. u.k. shadowat was a secretary, emily thornberry. stretch.s here, jeremy still with us in london as margaret.

president trump talks about a very substantial trade deal. what would that encompass and how long would it take? jeremy: as we well know, trade deals take a large amount of time to negotiate in their full depth and granular dutch granularity, so being glib does not mention -- there is that mechanism in terms of the implementation which may negate the opportunity to negate -- negotiation trade deals at all. we are still a long way away from seeing this scenario playing out. i would be skeptical as to how much of an impact the trade deal can make in the context of the u.k. trade relationships with the euro zone and e.u. tom: the president was at westminster abbey yesterday and looked at byron's grave and the unknown soldier.

that is fine, and harkens back to a time of empire. is the empire out there? you represent a canadian bank. is canada still out there for the united kingdom? jeremy: those who are somewhat nostalgic for a britain that was opportunitiesre outside the european union. whether it can offset and replace the trading relationships with europe is where the market has a great degree of skepticism. tom: i am naive about the size of the trade between europe and the united kingdom. we are all back to the time of empire and transatlantic. francine: the problem is we were talking about trade deals between the u.k. and e.u. when you come down to negotiating, it could be different.

the president shows up with a very large entourage, almost every of his child. who does he listen to in the administration? margaret: take a look at who was in the room. he had treasury secretary mnuchin with him and his national security advisor, secretary of state mike pompeo who is a very important voice. as he seeks to balance his own instincts for america first against this guidance for the alliance and national security in history, all those are concerned. tom: thank you for your state dinner coverage. we will continue from london. ♪

♪ certain in our reporting from anna edwards, the president of the united states did not take an uber to 10 downing street. francine: that would be a

serious breach of security. tom: there is breaking news on uber and it harkens back to another time and place, smaller private company with interesting taxes. they say their effective tax rate was -2% and some tax review for 2013 and 2014, let me bring up a chart. we have not done this chart in ages, as we pretend the market matters. ipos,nd lyft from their this is not normalized. this is a simple y-axis chart, uber down and down and then flat flatlining, lyft flatlining as well. the challenges we see for these unicorns. francine: we saw the way the chief executive was trying to keep a handle on it was to keep

the cost down. i lost one billion, which was in line -- they lost one billion, which was in line with the markets. that is a hefty number. tom: i strongly agree with you. the great distinction is driving being a car company versus a many different segment company as uber is trying to do. we have a lot going on in london. right now to new york city. viviana: day two of president donald trump's visit to the u.k., talking up the prospects of what he calls a "very, very substantial trade deal" with the host country. he tweeted they already are talking. president trump is meeting with theresa may and they will hold a news conference. china issued a travel warning for the u.s., saying law

enforcement has interrogated and .arassed chinese visitors this as the trump administration scrutinizes researchers and restricts u.s. visas at elite universities, students and instructors saying they find the academic and job environment increasingly unfriendly. topqueria nuclear envoy -- north korean nuclear envoy is alive and in custody. it was reported he was executed. no official response yet to the cnn report. in ed away, a warning from the prime minister -- italy, a warning from the prime minister. he will quit of his partners do not quite posturing, and he has served as a mediator between the

right wing lead -- league and the five-star movement. prolong toot languish my presence here. if they do not discuss in full transparency, i will hand in my rags a nation. -- resignation. viviana: global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. tom: thank you so much. we are here at queen victoria street in the city with exceptional news flow. we are going to rip up the script with jeremy stretch, with europef looking at dynamics from a french point of view. for our american viewers, french foreign policy is a huge deal right now in europe. balanced budget should not be a dogma. they say they still have a long

way to go to fix the budget, and the other day, we were in conversation with salvini's party members, what about france? they say france is worse. all into a fiscal soup of europe. what does the soup look like on a fiscal basis? jeremy: there are fiscal concerns, italy being a sore point. france has been an area which has exceeded its fiscal targets on a number of occasions, and acted with relative impunity, which causes a great deal of resentment from euro zone members. there is a degree of fiscal expansion evident in europe providing a little stimulus from the domestic or endogenous growth perspective. we always speak about the dynamic of the global trade trends and the impact on the

german economy. the fiscal expansion of europe is driving growth and encouraging growth faster than some people may have assumed. francine: growth with inflation? god forbid. tom: we have an optimist on set. who let him in? jeremy: we have seen the numbers with inflation levels dropping black. it is back near the cyclical lows. that continues to be the achilles heel of europe. we are seeing some growth without inflation. the ecb continues to talk about wage growth. all central banks have been doing that consistently over two to three years. francine: who believes the central bank at this time? jeremy: they have been crying wolf a number of years. recognize have to

these 2% inflation targets we talk about routinely with many central banks, they were created in another era. we need to address the policy perspective. youri want to go back to appropriate study of endogenous versus exogenous analysis. it is a year of the argent analysis, china, global trade. you bring it inside the domestic economy and things are better looking than people think. call, allgreat miss this talk about rate cuts? jeremy: there is an element of that. targets are amplifying the rate cut mentality, so we are seeing that. the way the euro-dollar has moved the last week is quite impressive, monetary easing.

the growth is being misrepresented or ignored. that is one of the factors the market needs to get its head around. see acan see that, we may paring back of rate cut expectations. francine: we are keeping an eye on the protests of london. this is trafalgar square where we saw significant crowds gathering, and we saw the trump baby -- tom: that is another location. francine: the floating trump baby, mayor sadiq khan said it is just a way for people to protest the arrival of president trump, lifted off in front of westminster. protest-y is that protest in front of the national gallery? at looks like a lineup to get into leonardo. francine: compared to paris, this is not much, but we do not

have protests in the u.k. jeremy: there is not the history of mast -- mass protest like there is in france. if you think about the anti-brexit margin with one million people, that looks to be larger than this gathering so people need to keep things in context. tom: give us a brexit update. the president gets on a plane and goes back home. when is a new prime minister? francine: it takes 67 weeks. weeks.-- six 27 weeks.even tom: then what? jeremy: it comes down to who is chosen and it is our most inevitable that it will be a harder brexit candidate then we have seen.

the parliament does not change by a prime minister, and the u.k. is burning through time in terms of its extension. it may well be the case that whatever the identity of the prime minister, the political rhetoric and challenges are just the same as faced by theresa may. we may see ourselves coming into the summit with a new leader faced with the same fiscal issues and unable to move forward. day,a more than busy bloomberg is in good conversation today with any number of people. one of those individuals, leon black. look for a conversation in the 8:30 our. the president at 10 downing street, this is bloomberg. ♪

♪ now, we could help re-center inflation expert to actions at the 2% dutch expectations at the 2% target. it is a good thing for fed credibility and the credibility of our target. it could provide insurance in case the downturn in global growth was more severe than we had previously expected. fed,james of the st. louis we welcome all of you from theon -- james bullard of st. louis fed, we welcome all of you from london. speaking today will be jerome powell, the chairman of the fed. this will be exceptionally important as a speech, more than the average importance as we go

to our june 19 meeting. .ichael mckee is in chicago right now, let us go to 10 downing street. the first lady, president, and prime minister. it is an intimate location, isn't it? francine: downing street is quite intimate. most of the walls are yellow. when you go into the staircase, it looks like you are in someone's house. it is more understated. you arrive in the reception room where we see the president and first lady. yesterday, there was controversy from the u.k. press that there were not be a one-on-one meeting of the president and the prime minister. if you think about it, it is unusual. this was a raged ages ago. the private -- arranged ages

ago. the prime minister is kind of a prime. -- lame-duck and has no influence on policy. she cannot even have an impact on huawei. our i would point out to american audience, to images with the president and the queen looking at historic artifacts out of the royal archive and it 10 downing street, he seems to have a genuine interest in learning about this as well. we will continue with these images, but right now to michael mckee in chicago. an exceptionally important speech today by chairman powell. what will you listen for? michael: the question is does jay powell rewrite the script for what happens in chicago? this is supposed to be centered around the fact that the fed is looking at how it makes monetary

policy. as opposed to whether they should cut or not, the market is sending a message to the fed and the answer is, does jay powell want to answer? tom: you know where the markets are and you know where the fed is. have they ever been farther ?part michael: in december, the markets were much farther along. the one thing about the selloff, it has been steady and the bond market has been swift, but not disorderly as we saw in december. that might give powell out he needs, the fed has always said down.rkets go up, -- goes we will see whether the economy

reflects the impact of the trade war instead of the market fear. they do not want to get caught reacting and have it not turn out to be as bad as they thought it was, and then they do not have the ammunition if they need to cut. tom: jeremy stretch with us. what is the relative call on the dollar now, given the noise? jeremy: the u.s. dollar should be cheaper over the second half of the year. tom: you sought in the last 12 hours. jeremy: growth expectations in the u.s., but there is more to come. dollar has held up well. it is more the interest rate cycle which has become more of a challenge for the united states. political considerations will become more relevant for global investors. also the fiscal dynamics are more challenging as we go from a

virtuous fiscal expansion in 2018 to a tightening in 2020. the conditions for the dollar will become more challenging, making the dollar cheaper and increasing exports. francine: you are stealing my line. jeremy: you should never say anything is ever weak. francine: let's talk about tariffs on jewelry exported to china, average 25%. of thethis is back envelope calculations, but if you see a jewelry company coming up with tariffs and saying, this will hurt my dollar -- bottom line, how much weaker does the dollar need to be? jeremy: there is the tariff impact, and you can make the argument and assumption of how much will that affect gdp. when you start to look at tariffs, it is the case that there will be a flow-through in

terms of earnings numbers and earnings expectations. that is one of the factors which will have an impact in terms of perspective of the dollar story. it is the narrative, a cheaper dollar. there are many reasons combined to make that dollar story play out. some of the euro shorts are likely to be gradually pared back as the euro as a short trade for high-yielding markets start to be taken off the table. francine: jeremy stretch, thank you so much. michael mckee looking at what jay powell will do next. coming up tomorrow, we speak with fed president robert kaplan and charles evans. tom: those are two fed voices that are very important. smart to talk about as we move forward through the day, the politics of the day with the

president at 10 downing street. this is bloomberg. ♪

francine: bloomberg "surveillance," francine lacqua in london. donald trump continuing his second day of his state visit, meeting leaders at downing street. we are looking at live protesters at trafalgar square in central london. joining us from london is kevin cirilli for around up from what we can hear from the president, his thinking on trade, and what awaits him in washington. thank you for joining us. if history is anything to go by come at the president leaves his home country, goes on a state visit, and finds a miss back home. what is going on? kevin: countless republicans are frustrated at the proposal over

tariffs, whether it is anthony scaramucci or joni ernst. -- senatormpletely ernst is hearing from her constituents in the farming community that they do not like the tariffs and are concerned about what the tariffs would mean for usmca passage. not back down,ll will he? behind the scenes when i talked to republican lawmakers here today and tomorrow, they are hopeful he is just threatening the issue of tariffs with mexico as a way to kickstart the discussion for speaker nancy pelosi and the democratic-controlled house of representatives to get something moved on the issue of usmca, because they are hoping the democrats would be fearful this issue would become so volatile they would have no choice but to pass it. it is anyone's guess. francine: are these state

visits, with the pageantry of the state visit, does it help his party back home or does his base not care? kevin: the pomp and circumstance, it looked like a fun time. i am bombed you guys are having all the fun across the pond. you guys are having all the fun across the pond. i am not sure it will move the polls much. the u.k. and u.s. have a solid friendship, much like you and me. francine: the state banquet? i already have tom on the state visit. this is how we roll in europe. on the democratic side, who are you watching? kevin: the mayor of south bend, indiana is still percolating in the mid tier candidates. look for him to break out.

former vice president joe biden has had a solid launch. senator elizabeth warren has been putting out a lot of policy proposals as well. it is incredibly early and we are weeks away from the first debate in miami. we will have to wait and see. francine: it is unusual with a sitting president to bring all of his children to a state banquet. our people talking about it or is it just that he does things differently? kevin: i have not heard too much. there is more economic criticism and debate percolating around washington, d.c., the investigations. i have not heard much pain stream criticism. -- much mainstream criticism. a lot of people were taken aback by the president criticizing meghan markle over the weekend.

francine: the president saying, i did not say she was nasty. kevin: the audio. francine: it was on tape. kevin cirilli with everything washington. jonathan ferro and tom keene continue on radio. anna edwards is in front of downing street for any kind of movement. we were looking at live pictures of the president of the united states, donald trump with melania trump being shown some artifacts in number 10. he will give a press conference with the prime minister around 2:00 p.m. london time. do not miss that. ♪ the latest innovation from xfinity

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splitting up the job of monitoring giants with fears of a breakup and revelations clotting stocks. the st. louis fed president says the fed should cut if inflation stays low. they will discuss strategy in chicago. and inflation, what inflation? inflation in europe disappoints, prices uncomfortable below their targets. there will be central bank meetings this week. david: welcome to "bloomberg daybreak." president trump is meeting in london as we speak and he is at number 10 downing street, just outside you can see the beast, the limousine. he is meeting with the prime minister and there will be a news conference after that, but before that there was a state dinner last night. alix: apparently, some issues with outfits. david: