francine: hitting cause. president trump and xi. crude climbs. russia looks at a send out for 2020 as demand falters. deutsche bank could be set to thousands of as jobs. welcome to "bloomberg surveillance." i am francine lacqua here in london. these are your markets.

-- giving a little bit of a lift to your markets. i am looking at the u.s. 10-year yields now coupled with this truce around these trade tensions is weaker than expected factory numbers. watch out for that. , 1387. see gold down manufacturing pmi below estimates at 47.6. than what the preliminary reading was. we speak to joseph oughourlian. the best opportunities to find value. let's get to bloomberg first word news. >> hi, francine. deutsche bank may cut more than a fifth of its workforce. it would be the lenders shakeup in years. they may approve the loss as many as 20,000 jobs.

they were working on tough cutbacks after failed merger talks. trump coming the first sitting u.s. leader to set foot inside north korea. he met with kim jong-un at the militarized zone -- at the demilitarized zone. he said stepping across the border was a great honor. he also invited kim to visit the white house. closer to becoming the next european union commissioner. president donald two skids trying to shore up the fort for the appointment. hsbc is -- it isn't responsible for the arrest of huawei cfo. it reports hsbc provided information that help prosecutors build a case. she is under house arrest in vancouver after being arrested in december.

fresh protests in hong kong as police clash with demonstrators. activists smashing glass to break into the city's legislator. and mark the anniversary to the return to china in 1997. the term real -- the turmoil raising questions. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. hitting pause on the trade war. u.s. and china have agreed and said they will revise stalled negotiations. says he willmp also scaled-back restrictions on chinese huawei. the president saying the u.s. is winning the trade war and he will hold off tariffs. hour,g us for the first joseph oughourlian. , simon us on set

kennedy. thank you both for coming on. simon, when you look at the trade war and the fact they are having a truce, is it all cosmetic? simon: it is both. terribly, they could've put it on the new tariffs, trump could have walked out of the meeting. expectations.et xi and trump got into a room. walked back by larry kudlow over the weekend. francine: will it hold? that is the million-dollar question. >> it will continue to be the case that trade, ward and uncertainty -- war and

uncertainty at morgan stanley thatg it achieved in osaka it is cutting its global growth forecast. positions are -- we have seen commentary by the treasury secretary talking about 90% of the deal is done. it is always the last 10%. will it hold? who knows? there's a long way to go for a permanent deal. doncine: joseph, what did he for the markets? joseph: there was a lot of uncertainty this weekend. this removes some of the uncertainty. got -- have gotten used to the tweets. the changes of opinions and so the markets will still be jittery, especially as we get into an election period in the u.s. which may prove rocky on the front of the china-u.s. trade race.

francine: we are asking all of -- how long could it last? >> it could last a while. we are quite far into a cycle as far as one of the longest expansions on record. however, particularly in geographies such as emerging markets, such as in europe, the expansion is more recent. the evaluations are very attractive. a bit more qe. there more fiscal stimulus in europe. that makes for a very good combination for a risk rally. francine: are the leaders going to talk on a quarterly basis? simon: we are going to see these aids come back to the table. we will continue to see what they get. francine: there is nothing mega coming? simon: no more. certainly when they get to a

deal you will want to see trump-xi summit in the world. they were looking at heading down to florida. -- we will seeit tariffs on european carmakers? joseph: that is a tough one. there is this element of randomness here which is very difficult to predict. i think, i look at it from a market perspective and i think a lot has been discounted if you look at the automakers in europe. they look attractive here. think, but, i would there is a reason for it. the automakers have collapsed this year. simon kennedy joining us today and joseph oughourlian stays with us for the next hour. still to come we get joseph's

calls on where he sees value in european debt. he will also talk about greece and we are seeing quite a lot of movement in hong kong coming off protesters on the ground. protesters seem to be in a standoff with police. we know that thousands more in opposition to china's backed government. carrie lam pledging to be more inclusive and this is after she started her third year in office facing this crisis. this is bloomberg. ♪

francine: these are live pictures out of hong kong. tensions were drawn to hong kong

streets. protesters breaking down the door at the city legislature. we will have updates from our reporters on the ground. this is after we have had a lot of protesters for weeks. thousands of protesters. today they are beginning to arrive after a slow march as they walked. democratic party gave out stickers. some pro-democracy groups appealed to the crowds for donations. our live blog.to we have a great live blog. get to the bloomberg business flash. >> the probe of boeing expanding. the governments is subpoenaed records fromoenaed a plant in south carolina. it also faces civil and

congressional inquiries into certification of its grounded 737 max 8. a bloomberg scoop on boeing, the company outsourced software to nine dollars and our engineers. we have learned the iconic american playmaker relied on temporary workers to develop and test programming. some of owings own engineers feared it meant the code wasn't being written correctly. apple is wrong to manufacture its new max pro computer in china. we have learned it is ramping up production at a factory in shanghai. the company will use quantum computer. it has been apple's only major device assembled in the u.s. that is bloomberg business flash. francine: thank you so much. oil is surging to a five-week high after saudi arabia and russia signaled their report -- support. it comes as opec plus oil

ministers gathered in vienna for a series of meeting today and tomorrow to discuss production policy. covering all the latest. as anything been agreed to so far? saudi arabia and russia will stick to the agreement? francine, with an edict not from putin, -- saudi and rubber -- and russia, six-month, nine months, make your decision. can they agree on a nine-month extension? the word in the various hallways and hotel doorways that we have stood in, stronger horizon. about anrudy talking easier meeting he is optimistic the question on everybody's mind is about compliance. you got the iraqis overproducing

. the nigerians are looking for little bit extra. if you extend for nine months, that delivers a certain amount of a surety what the markets are worried about is its level of oversupply. this is about saudi and russia trying to get ahead. francine: anything else that they are talking about? the secretary-general is coming to the end of his term. i imagine that will go smoothly. how many ofine, these opec meetings have you gone to where everything goes smoothly? i mean, come on. francine: you are so right, manus. i don't know what i was thinking. [laughter] rerun.i don't need a i will leave you with that thought. he is set to retain his

position. if patrick who wasn't reappointed in the asked for kendall to come back. there's a ball for you and tom to play with it i want to talk to iran. what political position might he ask from opec and its members? unilaterallike this handing down from russia. too much interference. how much oil is china buying from iran? what does iran want for a precondition? swan, that isrey the curveball back half of 2019. francine. francine: you are not wrong. manus cranny from opec. on, -- josephg

oughourlian, we follow the price of oil. how does it translate into your wallet? does it make a difference in your portfolio strategy? joseph: it does. i tend to get worried if the price of oil gets above the $70-$80 level. europe is a big consumer of oil. there isn't a big producer except for norway. francine: does it make a difference on the company that you like question mark are you take a wide range? joseph: the sector is attractive. prices are quite depressed. it is a combination of things. it is a combination of the oil price not being great. it has been quite volatile. there is a general trend towards

people selling these stocks for esg reasons. the government of norway trying to say they wouldn't buy it. there is structural pressure on the sector. that is actually marginally positive from a supplier perspective because it means the higher cost of capital for the sector. that is the whole story of the oil sector, kind of lackluster demand but good supply dynamics. francine: thank you so much. joseph oughourlian stays with us. president trump becomes the first sitting u.s. president to enter north korea but what was achieved at the summit? that is coming up next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua. just keeping an eye on hong kong depending on what is happening there with the protests. quite some strength there. we are keep an eye on what is happening. testers and police are in a standoff. we saw tensions from earlier this morning. protesters broke down the door entering into an uneasy standoff with police. president trump has become the first sitting u.s. leader to set foot inside north korea. he met kim jong-un at the militarized zone. the meeting, the leaders agreed

to restart talks. kelly. us now is robert professor, thank you for joining us. president trump says he was the first sitting u.s. president but does it make a difference? does it make a difference with north korea? robert: at home, it will make a difference. the president will get great play from sympathetic media and is voters will love it. the real issue is will it change things on the peninsula? will they be strategic change? will there be forced redeployments? i don't know, american concessions on something or another peer so far, that doesn't look like the case. thatork times quoted -- seems to be floating out there.

nobody knows if that is real or not so maybe there was progress on that. there was no statement from the event, so it looks like it was another handshake and photo op. that isn't bad but it doesn't progress on the issues. francine: does it mean that the north korean leader will be more amenable to signing something? does it make no difference? robert: that is the trump gamble. hispresident is hoping personal relationship with kim will convince kim to believe the united states is no longer a threat and can can give up some of his missiles or warheads. it might work. there is a why not see what happens approach? that is not how states make decisions. donald trump has credibility issues in the past where he is not been great with his own personal contractors back in the

united states so there is issues with whether kim would believe trump. after 40 years of little progress in north korea, i suppose it is worth a try. francine: wind we find out if it moves the needle on denuclearization? how much time do you give it to see if this was a photo op or more? robert: that is an excellent question. trump has been saying he wants this relationship with kim since march of last year. we are in month 15. months, has anything happened? the answer is no. many people in the analyst community are skeptical. it looked like a big thing last year when it first happened in june in singapore but now this is the third time and everybody starts shrugging their shoulders. what is different? not a whole lot. we can mark it as a victory but any sort of denuclearization

out. the north koreans have a lot of stuff. it is a big thing in will not be wrapped up in a short handshake like this. francine: given the process between china and of korea, could some kind of agreement happened with the u.s. -- if the u.s. is in a trade war with china? robert: that doesn't help. this is what is surprising about the trump administration. they are not cooperating with china which is the patron and the paymaster of the north koreans. without china, and of korea is in real trouble. -- without china, north korea is in real trouble. to cooperateoing with us on very much. the trade war is going to sour the whole show.

francine: thank you so much for joining us. robert kelly, pusan national university. oning up, leaders are stuck who will get the european commission post. this is what we are seeing overall on your markets. there are still a global stocks search. this is as the tray trues gives a little bit of a float to -- trade trues gives a little bit of a flow to markets. we did also have a series of weak fact reports. it takes a little bit of the h off of bonds. -- a bit of the age off of bonds. this is bloomberg. ♪

francine: hitting pause. president trump and president she agreed to -- president xi

agreed to scale back trade talks. pressure looks to extend out cuts in 2020. deutsche bank could be set to/is -- slash as many as 20,000 jobs. this is bloomberg surveillance. i am francine lacqua. we are getting a little bit of working news out of the u.k. manufacturing pmi falling to 48. you can see the pound, 126, 40 8 -- 126.48. it has to do with who becomes the next prime minister. johnson still the favorite to get that. let's check in on what is moving in the markets. >> it is all about trade today which means it is all about tech. we have seen huawei, u.s. companies allowed to do business with the company for now.

we are seeing hopes that the supply chain will not be disrupted. to the downside, one of the biggest losers today is lancia. tragicinvolved in the bridge collapse in genoa. shares under pressure today. it's a bank one of the biggest stories today slashing 20,000 jobs. looks like some of this restructuring has investors excited. shares up. francine: let's get straight to the bloomberg -- if i find my voice. it is like, july. let's go back to the first board news.- first word >> the u.s. and china agreeing to a trade trues and saying they and revise -- trade truths saying they will revise stalled negotiations. trump says he will scale back

restrictions on huawei. the president says the u.s. is winning the trade war. >> as the president said, continuing the talks which have been interrupted for a while is a very big deal. that is a banner headline and everybody is going to be pleased at that. no promises, there is no deal made, there is no timetable. i want to emphasize that. >> deutsche bank might cut more than a fifth of its global workforce. it would be the lender's biggest shakeup in years. the chief executive may approve the loss as many as 20,000 jobs. he was saying he was working on cutbacks after failed merger talks. they grapple with surging u.s. shale output and weakening demand growth. the group output falling for a seventh straight month, this as

oil jumped to a five-month high. we heard iran's oil minister ahead of the meeting. decide inside opec, not to receive the instruction from outside. kong as protest in hong police clash with demonstrators. activists smashing glass to break into the city's legislature. the city marked its anniversary of its return to china in 1997. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. francine, sending it back to you in london. francine: i had a holes ghosn in mighty. -- a whole scone and my tea. regarded asist is

an elite candidate after receiving backing from angela merkel. victory still hangs in the balance as it faces opposition on the section of the center-right. joining us, why is it so difficult to find the people get the top jobs? >> good morning. it is timmerman who is now the frontrunner in this competition. it has been a night of long internal invention -- division. angela merkel has backed him but the issue for the chancellor is at her own christian democrats disagree with the decision. don't seetell you we the rationale behind this decision to appoint a socialist who did not win the european election to be the biggest political job in brussels. they don't understand the rationale behind it but it is interesting that we have seen

for a very long time for the first time in a long time, a real pushback against angela merkel which will tell you a lot more about our own political career as a stage. of whoe: give us a sense will get the ecb job or what's country wants to be ahead of ecb. >> that is another big question because if we do get friends timmermans, that means you have simmer -- that may mean the germans will still be empty-handed. waveform media frenchman to leave the european central -- lead the european central bank. the fact that there is a real possibility that by the end of this protest they could go home with nothing. we do understand the european leaders will tell you we need to look at the european central

bank differently. this is a big package. nothing is agreed until everything is agreed. we perhaps need to take a little more time to make this decision to get the political job done. francine: maria, thank you so much. still with us, joseph oughourlian. you are a big investor in all of the periphery countries. you need to have a good appetite to try and get through them. where do you see value in europe? joseph: value in the stock market. they look cheap and even cheaper now. we have seen major can pressure -- major compression in the yields. greece has gone from a staggering race from 8% yields to less than to perform -- less than 2.5% now. the best performance in terms of yields. as a consequence, the stock

market is due for a big bounce. it has done very well this year. probably one of the best-performing stock markets, up more than 30% this year. thecine: understand, disenfranchised youth may turn to conservatives. does that change how you view greece? joseph: it would. what is interesting about greece , if on july 7, the new democracy, i.e., more the stream pro-reformsrty, party gets elected, then, greece would have been the first european country to have gone through the tunnel of populism and to have come out the other way. in some ways greece is ahead of europe from that standpoint. italy maybe next. francine: i guess the greeks had

a very clear referendum. can you say the same thing with other countries? does it worry you that some of these populist parties will come much more vocal in either having parallel currencies or something like that? joseph: i am not that worried because what you have seen in greece is actually the template for what is happening in the rest of europe. those populist parties are great in terms of dealing with social networks, making opinion, even getting elected, but once they are elected, they kind of inlize the room for maneuver terms of economic policy isn't that great. as you mentioned, tsipras went to his people. they all said, they all gave a resounding no and then he turned around and still had to deal with eu and stayed in the euro

and gave them austerity for five years. that is why people are through with populism in greece and i think that is why people will be through with populism and the rest of europe at some point. francine: let me show you the share price of atlantia in the last five years. italy's government took some preliminary steps in relocation of this concession held by the tally a. how do you do this? following the disaster in general, should it make investors a lot more nervous? is it a good buying opportunity? joseph: it has been a tricky one, to be honest. it is not something i would have appetite to take on. i think there are some reasons. you've got to distinguish the underlying case and the form.

the underlying case is quite murky. in terms of provoking the concession there's a risk there. there are lots of issues with the concession and those issues go back since the privatization in 1999. in some ways, the italian government might have a point here. unfortunately, the form with which the italian government approaches is awful. minister of the country to get on the tape, the stock market is open, well, the shares are listed are moving and to say, this company is cooked as he did last week, that sends shivers down investors next. frankly, it sends a terrible signal about the italian

government dealing with business in general. francine: where do you pick where you want to be? joseph: there's a lot of utilities if you like utilities that don't carry those types of risks. i don't think it is particularly attractive here. i would be looking more at is here bets. the banks look very oversold to me. i'm not a big fan of banks fundamentals there's a big price for everything and they have cleaned up, by a large. i think it is improving. you would be surprised by the numbers this year. receipts will be stronger than what people think. there will be issues with brussels in terms of them having to adjust their budget. there is a lot of good

buys in that italian market from even caps to banks and some utilities it joseph, thank you so much. we will get back to you and ask about more of these banks. could slashutsche up to -- could slash up to 20,000 jobs and live pictures out of hong kong. tensions returning to the streets as protesters working down the door of the city possible legislature. they are now in a standoff with police. thousands more began marching in opposition to the financial help china- financial hub backed. this is bloomberg. ♪

francine: this is bloomberg surveillance. i am francine lacqua. deutsche bank is back in the spotlight with plans to cut as many as 20,000 jobs. the decision is a part of the chief executive strategy to revamp the struggling lender. sources say the restructuring is likely to hit the u.s. corporations the hardest. the answer could come as early as this week. barnert.s, jan-patrick what can you tell us about these changes? >> it is a radical cut with 20,000 jobs that could be on -- that could be cut. is it -- it is the most radical cut that deutsche bank has ever done. it is the sign that the market was waiting for.

will it be enough? we will see. have any ideae whether this will be confirmed? if so, when? is it happening because we have had revival plans and shareholders do not believe in this overhaul. >> that is true. what we need is some more details here. how fast will it go for these cuts? how quick will they be able to implement them? how quickly will the benefit flow? how will the new bank look like? is this the beginning of the investment bank -- beginning of the end for the investment bank as a whole? these are questions that the management has to answer. all of the metrics they are going -- measures they are going to take will all be very costly and might mean that the big has to raise capital again. if that is the case, that will

not be an easy story to sell to the investors. francine: young patrick with the very latest. still with us, just of google yarn. if you look at -- joseph oughourlian. if you look at dutch bank -- >> i would not touch it with a large bowl. there is no value in the shares. they are going to make some significant costs and for that they need to raise capital. even beyond that, if you just look at deutsche bank, what does it stand for? where is it strong? francine: 15 years ago, everybody wanted to work for deutsche bank. perhaps.0 years ago, francine: there must be value in the brand? if it merges with someone. will the bank survive if it finds a purpose? joseph: there is value in retail firms and

banking. inre is not much point corporate investment bank. they are not there. they don't have the size. they don't have the wherewithal and probable domestic markets like the americans have. deutsche bank doesn't have the ,alance sheet, business model even if it had a retails franchise next to it on which he could use. unfortunately, it has none of that. no, i wouldn't touch it as a shareholder. i'm not sure i would put my money in that bond. francine: is there anything in the european landscape -- is europe over bank? can you find value as a shareholder? joseph: the fundamentals of the banks are not great. negative interest rates is

terrible for banks. their business model is being .hallenged by sin tech having said that, there is a price for everything. frankly, banks in southern europe, lee spain and italy which have cleaned up, they look interesting. they are more of a trade than a long-term holding. they are on their lowest evaluation in terms of pe and price book. frankly, they are a lot more capitalized and they are a lot cleaner than they were back in 2009. francine: joseph, thank you so much for joining us. the chief executive and founder at amber capital. we are getting live pictures, the opec roster has just started. poised to extend production cuts

into 2020. the roads leading oil experts -- the world's leading oil experts. we are keeping an eye on opec and we will bring you up-to-date with anything that is going on in vienna right now. this is bloomberg. ♪

francine: economics, finance and politics. this is bloomberg surveillance. those are live pictures of hong kong. definitely tensions returning to the streets as protesters working down the door. let's get to our reporter on the ground to find out more about what is going on. carrie lam under fire yet again. sophie kamaruddin is on the phone. what is the atmosphere like? is it more rowdy? >> in the past hour we have seen the crowd growing significant in numbers. estimates being tallied so we could see perhaps if this momentum continues given the number people we saw joined in the past. we are seeing people stream and

-- about three kilometers east from here and keeping a good pace. roads clear for this public holiday. we have thousands of people coming to the area and also we have learned the small group of protesters broke into the glass entryway of the building. they have now retreated after a tense standoff with the police. these newly brand protesters are deviating. about a 10 minute walk and west of us as the new endpoints -- hereed there was there's a camaraderie among the crowd, volunteers handing out tablets and there are countless signs being carried by participants, many calling for

the resignation of carrie lam. francine: bloomberg's sophie kamaruddin there on the ground in hong kong. still with us, just oughourlian from amber capital. like yet to bems a political analyst to do a lot of market decisions and how does it play into your world? joseph: it is a big factor and it is relatively new in the developed world because we all thought the world was going toward more globalization, more integration. now this something with china shows there could be trade barriers and we could be going back on this movement that went on for the last several years which has been good for corporate's. the whole outsourcing thing. we all thought in europe that we were going through more integration, that europe was going to get bigger, was expanding towards the east, going to get closer with the

big and brexit clearly is a morning -- big warning signal for europe, the second largest economy in europe. lots of signs that there is physical risk so it has to be a factor. that is the reason despite incredibly low bond yields, stocks critically in europe haven't reacted. young -- joseph local joseph google jan. bloomberg -- joseph oughourlian. tom keene joins me in the next hour. this is bloomberg. ♪ ♪

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agreed to resume trade talks. saudi arabia and russia look to extend output cuts into 2020 as demand falters. deutsche bank could be set to/as many as 20,000 jobs -- set to slash as many as 20,000 jobs. tom and francine from london and new york. kong resuming.g demonstrators smashing glass. we saw an incursion earlier this morning demanding carrie lam to step down. tom: this is all around the 22nd anniversary of the movement from british to chinese control. earlier, carrie lam

did pledge once again to be more open and inclusive after starting her third year in office facing this historic crisis. we saw clashes outside of the legislative council. we were trying to follow live images. canugh our live blog, you follow what is going on. demonstrators using a metal cart to smash a glass door with police inside. it matters whether these demonstrations get more rowdy or not if we will get an idea of what the people in charge will do. tom: an eventful week over the leadership in beijing and all on the pacific rim. if you go from the visit of china in north korea to the many visits in osaka, and then this meeting at the dmz and then wander down to hong kong, it is

a hugely eventful time of international relations on the pacific rim. francine: it is a hugely important time. we are looking at thousands of protesters beginning to arrive after the slow march through causeway bay. it happened about 40 minutes ago. live blog, we have a number of journalists on up-to-datekeeping us in hong kong. a lot of the opposition democratic party were giving out stickers and calling for carrie lam to step down. pro-democracy groups were appealing to the crowd for donations to campaign in this fall. a lot of people are trying to shelter themselves from the sun with umbrellas. tom: these are live images. let us look at something in the night of hong kong, a much darker moment. legislative council

with a garbage cart being rammed in and an individual with a metal pole rammed in. this is a different energy than what we have seen over the last 1, 2, or three weekends of protests. francine: the energy of some of these pictures we are seeing from a short while ago seems to be a lot more rowdy. has something changed? into a context, we began this monday with two different sets of protesters. one was gathered around the central government advocacy. a small group of testers attempted to gain entry by pushing a metal cart through the glass at the legislative council building. so amanaged to succeed and

standoff with police in the lobby of the building. they were reportedly loading rubber bullets. that group retreated after what by assumed to be a victory that group. we are seeing thousands of people streaming in from the victoria park rally point for the official annual pro-democracy march that has been organized by the human rights front. out templatesng and science, many of which are calling for the resignation of chief executive carrie lam. tom: that is right where i wanted to go. tenure of the the chief executive? monday march the 22nd

anniversary of the handover of hong kong from british rule to china. it is a somber day. she kicks off the third year of her term with this dour outlook of her leadership and a brief speech to officiate the ceremony. she pledged to become more open-minded and recognizing she did not manage to gauge the of the public around the extradition bill given the public uproar against that controversial policy. going forward, the pro-government camp may be looking to see what other leadership opportunities that may be given there are district council elections in november. at carriest may erode lam's power and position.

if she is able to demonstrate she is willing to compromise, that might be an opportunity for her to make amends. francine: thank you so much. sophie, our bloomberg news reporter on the ground in hong kong. we will be watching the events unfolding very closely. let's get straight to bloomberg first word news. >> there has never been a scene like this one. donald trump making history by becoming the first sitting u.s. president to set foot in north korea. he met with kim jong-un at the demilitarized zone. they agreed to begin talks on diniz arising the korean -- d denuclearizing-- the korean peninsula. the white house has not revealed details of mr. trump's arrangements with china. trade talks will resume at the

g20 summit. president trump said he would hold off indefinitely on tariffs planned for chinese imports. bloomberg has learned deutsche bank may reduce headcounts when more than 1/5, more than 20,000 jobs. the ceo may present his latest restructuring plan as early as this week. thes likely to hit investment banking business the hardest. 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: very good. very important guests today. market off ofthe asia. s&p futures up 32. dow futures up to 35. we will go to vienna this morning. under 14.

dow futures. sterling 126.129. weaker sterling. continue to try to rally the troops so the people vote for them. i am looking at stocks. they are still climbing. oil jumping. 108.24. tradeg pause on the floor. this after talks on the sidelines at the g20 summit in japan. president trump says he will scale back on restrictions for the chinese technology giant huawei.

joining us now is john morgan and land a car. thank you for joining us. when you look at this trade truce, will we be back to trade tensions after two days with a presidential tweet? >> i don't think we will be back there in two days. i will not be surprised if we are back there in two months. the congressional leadership was criticizing the president's , so whoon on huawei knows if that is going to stick. i think you are seeing an overly optimistic extrapolation of a trade deal. francine: what is at stake here is clear for both countries, but does china want to deal at any cost? >> no.

it is almost like we had to reset the negotiations because it is not just about whether it .s on the imports what destroyed the trade deal was going to the harsh state directed capital overshift in china. it is almost like you have to have a reset to the negotiations and address the wider issues in the relationship rather than concentrating on the trade. if that happens, that will take a long time to happen. saw imagesa, we just from hong kong. we are trying to catch up with an historic handshake in north korea over the weekend. we forget osaka. how big of a cave was it for the president of the u.s.? >> in terms of? huawei and theon

rest? how do you look at the agreements the president agreed to? >> from the chinese side, it is not looking like a cave at all. we are taking back the negotiations to where we were in may. uawei deale h back. tom: what about the u.s. side? >> that is where you get both sides thinking they won. we're going to have to shift to negotiations on where the technology side comes on the longer term. now there is no way you can go back on what happened. i or similara huawe measures taken against china by the u.s. has been revealed. you have to come back to a reset where they are going we can still cooperate, but under what

terms, and what is the relationship going to be in this new world order? the existing negotiations were almostcessful, and it is like both sides have to come together with a new agreement. francine: when you talk about too much optimism in the markets, is there too much optimism? longer-term is it too steps -- optimism longer-term? is it two steps forward, two steps backward? >> what was announced over the weekend was a truce, not a rollback of tariffs. one wants to justify the levels that equities are at, you need steadinessthat this over the course of the summer is going to restore growth above

trend level. i believe there is over optimism. i believe we avoid a recession, but i don't think we go back to trend growth as quickly as markets are discounting. francine: thank you. john normand and miranda carr stay with us. protests from hong kong resuming. demonstrators smashing glass and raking down the doors to the city's legislature. thousands gather outside the city legislature. we are live on the ground. this is bloomberg. ♪

tom: from london to new york, the view from hong kong. as we saw a earlier, this seems .o be another day of protests the violence as we saw glass broken at the legislative council was quite extraordinary. john normand of jpmorgan. we are thrilled to have miranda carr with us from high tongue international. we had an eventful weekend on the pacific ring. do you need to rewrite your view forward for jpmorgan? >> i don't think so. i hope i don't. it willis that outperform over a rolling six-month horizon. much't think there is

called to increase exposure to cyclicals. out ofought something the g20 would stimulate the global economy this summer, then yes, i would be telling my clients to get as many cyclical assets as they can get. to revive for the fed growth through cuts, i think you want to moderate exposure to cyclicals. on: central bankers lecture low interest rates as a single solution. how do you feel about that? if we are for chairman powell to cannot be the proper medicine to get us to the end of the year? medicine,ot the best but it is the only medicine in the cabinet. if we want to talk about the types of policies that would promote better or more stable growth, it would be some

rollbackon of terror and lower interest rates. the only way to get growth back to trend is through lower rates. the problem is it has reached its limits in europe and japan and is within 250 basis points of reaching its limit in the u.s. francine: when you look at the chinese economy, is there anything investors get wrong? i don't know if it is the capability of managing it in an orderly way, even if we see these dead overhangs for investors. >> it is almost like the trade war is exaggerating the changes in china already. exports are falling. industrial production is falling. there might be some pickup in production. if you think about what china is

trying to do to address that come it is all about the consumption side, the tax cuts, not your soe. still rolling forward with the tech board launch. we can foster our own. this ties in with the trade war that something china wanted to do anyway. it is now being pushed forward even faster. you have these divergent trends reaching a new economy strengthening inflection point. francine: is the new economy the spending part? , the u.s.wants to see wants to see, is it accelerating faster than we realize? >> in terms of consumer spending, that is still going at 8%. you have some weakness in the discretionary. autos are falling on a year on year basis.

items likeg-ticket p2p financing or consumer financing are relatively weak. people have a bit more money on their pocket on a day-to-day basis as of the tax cuts. that has encouraged luxury spending, a bit of consumer staples spending. we are not going to see that replace the growth that is lost. we are still seeing a weakening economy overall. you have that support level there. francine: thank you. miranda carr and john normand stay with us. we are still getting live pictures out of hong kong. it seems to have taken a different tone to the last couple of protests. demonstrators smashing glass and breaking down t the doors to the city's legislature. they marks the return of

china.rule to china. this is bloomberg. ♪ is is bloomberg. ♪

francine: this is "bloomberg surveillance." we are getting a little movement from technology stocks on the back of that trade truce from the u.s. and china. this is giving a nice little left to tech. we are back with john normand from jpmorgan. with the trade truce, a little momentum to the fact, a

breather. i think jpmorgan had a call of 1.75% on 10 year yields. does that still hold? >> absolutely. francine: regardless of what happens on trade? >> given that the view is that the tariffs stay in place indefinitely, the fed is going to have to ease a couple of times. you have this story of inflation being too low and the fed trying to achieve higher sustained inflation, i am comfortable with the call that the 10-year yield is going to be below 2%. francine: what does that mean to the rest of the market? that would be quite remarkable. >> usually you would be nervous about the growth outlook, but this is a different kind of

environment or part of that low-level of yields is about growth and low inflation. you can be comfortable with a low growth environment. tom: thank you. we will continue. huge risk on feel to the market. the dow is up 30 points. sorry, s&p futures. the dow up 230 points. much going on from washington to hong kong on the 22nd anniversary of the british handing hong kong over to the chinese protests. stay with us. this is bloomberg. ♪

francine: oil surging to a

five-week high after saudi indicated russia output cuts. opec plus members have in vienna today and tomorrow. our position is very clear. i told you before i have no difficulty with extension of the cut or more cut. unilateralism. francine: joining us from the end is manus. will they hold to their agreement and continue to try to stabilize the markets? donethink it is all but bar the shouting. there will be a little bit of shouting. what we have behind me is the

jmmc monetary market. it is frailty of demand that needs continuity and certainty, the language the opec ministers want to convey. general the secretary all wanting to convey this is our intention to deliver continuity. my guess is a nine-month extension is preferred. that is the preferred option of most of the jmmc. the iranians are not in that agreement. they be how would looking at the trade truce between china and the u.s.? does it have an effect on global growth? >> i think inevitably it does, anything that moves the needle on global demand. this is about the point of frailty in global demand.

that can turn on a dime if there is an aggressive and substantial deal done between president xi jinping and donald trump. you have trade negotiations with the u.s. this is not a done deal with regards to trade. this is about opec plus try to get ahead of the frailty of demand that might come to bear in 2020. iran wants to lobby for a political settlement. tom: i think you are dead on about the idea of demand being more important than supply. how do they speak about oil inand at the supply fest vienna? do they talk about it in open conversation? >> absolutely. the two most pressing issues are inventories. it is your part of the world that is giving these people much more to think about. lostince 1991 has opec

market share. that comes down to the permian basin, fracking, a structural change in supply side on your part of the world. , that hasand side been slowing down. i take your mind back to dallas when you and 2018 francine were there. the verbosity of their optimism was astounding. here we are, 18 months, how quickly it can turn. that is my point. tom: thank you so much. john normand watching from jpmorgan where he synthesizes across asset classes. i get a wide set of opinions on oil. do you really care where oil settles six months from now? >> i do care. i think if oil were to settle above $75 a barrel, that would be a source of supply strength

and another problem for the global economy. if oil is below $50 a barrel, i worry about the suitability of a lot of currencies. about $65, i don't really care. i don't think it matters for global markets. tom: well said. what is your dollar call right now? what a sense of ambiguities over the last two weeks in our conversation. what is your dollar call? >> i think the dollar is going to go down against the yen. that is the constants of the fed easing monetary policy. the dollar will go down versus a handful of high-yield currencies. you have a temporary truce on the trade side. i think the dollar is going to go up against a handful of currencies where the non-us economy looks worse than the

u.s., and that is the u.k. and sterling and australia and new zealand. specific call.ir francine: overall, if the dollar drifts off a little bit, this will not be a bad thing for international markets. >> it is one less problem. i don't think the dollar will be going down 5% or 10% in trade weighted terms that will be that is oneem's. way to think about it. francine: john normand stays with us. let's get to bloomberg first word news. >> critics say president donald trump's meeting with kim jong-un shows how little north korea has conceded on its nuclear program. mr. trump has become the first sitting u.s. president to step foot inside north korea.

they agreed to restart nuclear talks. those talks have gone nowhere since the president walked out ina meeting with kim february. a lasting trade truce with the u.s., you measures of the manufacturing purchasing index staying in the area that indicates contraction. over the weekend the u.s. and china agreement to resume trade talks. jeremy hunt will try to burnish his brexit credentials. the former foreign secretary is running for prime minister. he will set out a no deal exit taxthe eu, cut corporation and ease the burden for british retailers. 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. tax thank you.e burdenfrancine: let's go back to hong kong, where we have seen protests resuming with demonstrators smashing glass. let's get to a reporter on the

ground. different the tone from other protests? >> here we are on the ground further east from the main column of the official annual pro-democracy march. as you see behind me, there are chanting crowds calling for the .esignation of carrie lam the resignation of chief executive carrie lam, the explanation bill -- extradition bill, and other things have been called for by the crowd including election recalls, which has been a central theme for the opposition movement since 2014. carrie lam has said she will remain open-minded given that she did not recognize the true brunt of sentiment against the extradition bill which she

attempted to push through before this summer. she will certainly be tested. you have pro-government lawmakers wondering what this means for the future given there are elections coming up in november for the legislative council. you could see carrie lam retreating, with this extradition bill undermining the power of the government did we are seeing hong kongers -- government. we are seeing hong kongers on the ground here, crowds of over one million. as you can see tens of thousands have showed up. we have families among the crowd. at the central government complex, the epicenter of these demonstrations, we have one set of protesters attempt to gain access to the legislative council building, smashing through glass with a medal card

and a standoffrt with police. there is a lot of emotion in the air right now. tom: thank you so much. greatly appreciate it from the streets of hong kong. we are going to continue. we have an important conversation with john normand of jpmorgan on the markets, and then we are thrilled to bring you a good section on deutsche bank, very strong opinions this morning on the street of deutsche bank. stay with us as we consider the images of hong kong. ♪

francine: we talked a little bit about treasuries, the call from jpmorgan. ,e talked about dollar strength stabilizing or weakening against certain currencies. we want to ask about euro and in specific whether the euro trend shifts depending on who becomes ecb president? there are some questions of if they have the tools for the next downturn. i think you need an ecb president who follows in the footsteps of mario draghi and someone who should be skilled in thinking of new ways to implement and craft monetary policy. if you have a region where balance sheets are negative, inflation is undershooting the

central-bank target, you question of how they get back to their objective. you have to be concerned if the next ecb president is someone who does not have a lot of experience in monetary policy. francine: do they need monetary policy, or do they need to be a good politician? assuming they cannot do anything terribly new, they have to go back to the existing toolkit, which is cutting rates. that will require some salesmanship, and in that sense i guess it politician would be helpful. when the next crisis hits, you are going to need a greater range of newer tools. i wonder where that is going to come from if the next ecb president is not a career monetary policy person. tom: the setting of euro a million years ago was extraordinary. this is synthetic euro. this is going to inverted. you check on the euro at the blue circle. euro weakness, massive euro

strength, and that great rollover that john normand chronicles every day. to your point on monetary theorists running the view forward, what do they need to avoid that mr. trichet did? there seems to be such a stark path from trichet to draghi. i think if you want growth higher than inflation, you need more draghi as opposed to more trichet. positionomes to that is going to have a difficult predicament. you cannot really use the traditional tools they have used in the past. those have been almost completely exhausted by draghi. this is why the person has to be skilled as a politician to sell the existing toolkit more forcefully to european capitals or come up with different possibilities.

vitamin toolkit the toolkit of austerity? >> i don't know if it is austerity per se, but he is slightly more conservative in his views. if he ends up as the next ecb president, i don't think one should buy the euro thinking he will tighten monetary policy. i think he will be looking for additional unconventional ways to provide stimulus. he would use the traditional stimulative tools if the economy required it. francine: there are loads of legal questions. if it goes beyond the toolkit we have now. >> sort of. i think the legal questions have been handled by the ecj. there are a number of operating adopted.s the ecb has these are of their own construction, so they can be changed if the ecb governing council decided it were necessary. francine: we are looking at a

number of jobs opening up with council president, commission present. why is it so difficult for these leaders to find a name? all the front runners have stepped aside. now there is a second batch. >> there are national the issues, gender issues, big versus small issues. since all these jobs are decided jointly, nothing is final until everything is final. you have a pretty deep bench in europe if you have sony formeres, choosing from presidents, finance ministers, heads of central banks. normand stays with us. we are looking forward to the boston sox. we're looking forward to it, hopefully with a little less heat.

hopefully on july 4, there will be a lesser heat in boston for our special coverage of the boston pops and their fireworks. this is bloomberg. ♪

>> this is "bloomberg surveillance." let's get to the bloomberg business flash. a peripheral asset management fund has agreed to buy railroad operator genesee in wyoming for $9 billion cash and debt. the price represents a 10% premium to the closing price on friday. has agreedas learned to buy from kkr.

they make mobile phone and wireless equipment. the trump administration is defending its decision to ease restrictions on huawei technologies. larry kudlow saying it is not getting a general amnesty. u.s. companies will be allowed to sell to huawei. tom: it is my chart of the day within a country mile. it is the research note from bank of america merrill lynch. let's get the future of a german bank. deutsche bank right now with a nice surge over the last 10 days or so. bank of america just clobbers it on dilution risk. they will have to go back and find 5 billion euros of funding. it will be diluted to

shareholders. they have a five euro price target as well. could a cash call for deutsche bank actually be that dilutive? >> if you look at the current share price, potentially. they do present a plan that convinces shareholders and potentially new investors that sets the bank on a course to sustainable profitability, it may be a sign investors are willing to take the hit the details of that plan will be absolutely key. tom: how much of the pressure right now is large shareholders, including sovereign wealth funds? >> the key shareholders have been losing quite a lot of money. they are probably not taking to be putting more money -- to keen -- too keen to be putting more money into this. something is going to have to

give. beuspect the tension will between what they are able to put on paper that really puts ubts as to whether they can get to a sustainable model. francine: overall, 20,000 jobs cuts, is that enough? >> it depends on where the jobs cuts are. speculation is thin. there is this point thousand jobs market. it is not clear where. willems like most of it land on the investment side. is this something the bank is going to have to cap investors to help fund? francine: what would you do if you are the u.s.? test lastast a stress week. >> you to take for example global equities where they are a

laggard, strategically and from a competitive standpoint it may not make any more business sense to remain in that pocket. there are parts of the u.s. where it makes sense to go back on, including the advisory business where they are not among the top five consistently. tom: doing know what the mood is of the german government? what is there immediate urgency? >> just a few months ago, it appeared there was an interest in combining commerzbank with deutsche bank. that did not go through because the numbers did not add up. i suspect that the moment they are keen to get this bank on solid footing because germany's small to medium sized enterprises need that bank financing. it helps to have strong domestic banks.

i guess it helps to have strong investment banks, but i don't know if they are going to have a strong investment bank. how do you invest 20,000 jobs cuts globally? they are going to hammer somebody. you know all. speculation is a lot of that will be in the u.s. we need to see because i have seen reports pointing to them cutting the consumer banks in germany a little bit. .e need to see these figures as you say, who takes the hit, which businesses are scaled back, and where do they invest. they told reuters they plan to hire somebody for wealth management. that is a business the bank appears to be investing in. francine: thank you very much. meantime, breaking news out of italy. the 10-year italian bond yield falling below 2%, the first time

since may 2018. there is a bit more confidence in the market. we started seeing at the end of last week that the nation will avoid punishment from the eu over its budget deficit. if you look at the yields, they have been coming down a touch. there is a little bit more optimism out there about italian bonds leading the peripheral outperformance amid the search for yields. francine: -- move, 10 basis points lower in italy. this is bloomberg. ♪ this is bloomberg. ♪

the this morning, back in

wbc, the clearance -- present returned. kong, a 22nd anniversary of a return to chinese control. storm the legislature, glass broken. board this great bull market? this is "bloomberg surveillance." from francine lacqua is queen victoria street in london, a live shot into the summer evening. it is not what we saw just 12 hours ago or so. millions protesting. francine: i do not think we have an exact number of millions. i would say thousands for the moment. we are keeping an eye on it to see how many people there are. houses more emerging peacefully and opposition to the financial

hub china backed government. we saw glass breaking. promisestled executor to be more inclusive starting .er third tom: risk on futures up 32. here is viviana hurtado. >> there has never been a scene like this one, donald trump making history making him the first sitting president to enter the demilitarized zone. they agreed to continue talks on denuclearizing. president trump says the u.s. is winning the trademark after reaching an agreement with china's president. the white house has not revealed the arrangement with china.

trade talks will resume at the g 20 summit. the president said he would hold off indefinitely on plans for an additional $300 billion in tariffs. the price of oil hits a five-week high. saudi arabia and russia signaling an extension of opec production. there was an agreement to prolong the curb by six to nine months. the oil cartel meets in vienna this week. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm viviana hurtado. this is bloomberg. now,let's go to data right equities, bonds, currencies, and commodities. we have a technical problem with the data. i am going to do it for you. there it is, thank you.

futures up 32, dow futures up to 74. -- 274. strength, with dollar euro weakness. are in vienna for report meanings -- for important meanings. i have the close on the dow on friday and the present teachers on the dow to show the leap forward. boris lost track of what is doing. francine: i am here for you. when it comes to braggs it, -- brexit, both candidates are to elect the new administer. are looking at stocks

globally climbing, oil jumping. we have a little bit of applied materials. this was expect did. and applied materials jumping in with a little bit of m&a. marty schenker is with us, bloomberg chief content officer. we are thrilled to have with us jean-luc. how successful was the weekend for president xi jinping and all of china? potential concession on huawei was more than people were expecting. the markets liked it, up the most in two months. tech shares leading the way. he came out of it good. tom: i would agree.

,arty, i have to ask you exactly what did the president give up? summaryg had a good worldwide with the coverage in osaka. did the resident cave in? is that too harsh? marty: there are some in his own party that think he caved on the huawei been. marco rubio tweeting it was really tough. it was clear donald trump wanted to come out of the meeting with success. what he gave up is not known. the devil will be in the details. will drag on for weeks and perhaps months before we know exactly what the u.s. has given up. john, how is the feud in asia? they were prepared for a bigger trade war that was much bigger

than the trade war that was the fight between the two superpowers. does seem to have the u.s. president, if not backing away, saying he is not dogmatic. is that how it is seen in china? john: people are taking a cautious, optimistic view. we have been and the situation before six months earlier in argentina. we came out with a truce on trade and it did not go well. people are just waiting to see what the details are. marty, do you see a difference between what the president wants and those advising him? marty: throughout this entire trade negotiation, there has been talk of different actions within the white house. ultimately, donald trump decides what is going to happen on trade.

his advisers reflect what he wants. if you believe this is a transactional president who wants to come away with a win, it will be donald trump who decides exactly what concessions to give up in exchange for a deal on trade. lost david in the korean war is one of the best songwriting. there is a president at the 38th parallel. ted williams flew over it and a whole bunch others. what is the tone of him stepping into north korea? marty: it is hugely a symbolic moment in history. i would not equate it with nixon arriving in china, given just the sheer size of china versus north korea. this is a major adversary of the united states for years.

it is a singular achievement of donald trump. tom: marty schenker, thank you very much. john, thank. theave been looking at protests in hong kong. do you assume protests tomorrow? sophie: given that it is a public holiday, i will imagine demonstrators will come out. likely toum is continue with protesters here saying they would come back. we have thousands of people in asia. we did see protests near the government building.

for now we are seeing a buy in demonstration. do you have any idea of how many people are demonstrating? not have ano official number just yet. it is estimated 10 to thousands -- tens ofup thousands have showed up. past, we have seen many take part in these rallies and demonstrations. spillovers at the local train stations. , there was an annual

pro-democracy march and there have been up to 400,000 people participate. much.hank you so we will continue. economicsng to talk looking forward to a third quarter. futures up strongly. this is bloomberg. ♪

tom: it is the strangest thing. the meaning of you thing. keenengue keen -- i'm tom with francine lacqua.

we are seeing huge, international relations and news flow with the president back in washington and the drama in london over the future of the united kingdom government. a wonderful q3 start. we speak to carl weinberg of high-frequency economics. and debtp public debt disaster in latin america decades ago and his work in economic markets today. what is the tone of your research into q3? it is the overall high-frequency economics tone of the view forward? carl: europe is getting more bearish in the market is waking up to the realization that the industrial sector slowed down to a halt and is starting to contract. secondata for the quarter will be out in a few days. that has us worried. slow growth in china is a bearish thing. tom: madame lagarde may be playing second fiddle at the

osaka meeting for the world leaders. is she and the imf worried about global recession? carl: they are not allowed to get recession yet but they are on the transition to becoming increasingly bearish about the u.s. economy and the global economy. that is as far as they can go. the key metric for them is trade -- world trade is flat or down depending on the metric you look at. that has always been consistent for a rough patch for the world economy. francine: how do you view the world economy after the trade truce? can trade truce last or is it one step forward two steps backward? carl: it is just an interim measure that allowed the president to avoid imposing the tariffs. he didn't want to go there. he wanted to take a win so he gave up two important things, tariff options and some of the restrictions on huawei.

the chinese gave up nothing but agreed to go back to the talks and listen. as far as i'm concerned the president conceded a lot to save face and the chinese allowed him to save face and agreed to go forward with the conversation. there is no assurance the conversation will go anywhere. there is every indication from the chinese that they will not compromise on key issues. before ande we were the markets are enjoying a brief rally. when we really look at what happened, not much has changed except we francine: are talking again. -- talking again. francine: do you think the market is getting out of itself? carl: people were worried about the summit and were prepared to say so and positioning accordingly. we are seeing that out of the market this morning. the talks and the

administration has to prove they can deliver something on china. they are nowhere near getting to where they have to be. tom: we are looking at live images from hong kong into the summer evening. i believe that is the legislative offices. i'm only guessing at that because of the architecture we see on the left. we will have to continue to watch that. sophie cameroon's on the streets of hong kong. we want to take a broader q3 view. hong kong is more than a distraction, isn't it? carl: the chinese really want to fix this and make it better but do not to give up their natural authoritarian stance. -- i do not think hong kong is going anywhere. i do not think this is the start of the new revolution. the question is -- how will it

be resolved more peacefully in democratic or will it be a heavy hand? francine: thank you carl weinberg. jeremy hunt has delivered a speech and the policy exchange in westminster and he is trying to say he will put funds aside in case of a no deal. it is a pledge to fishing and farming industries. we will have plenty more on the two candidates and who the next prime minister of the u.k. will be. this is bloomberg. ♪

thecine: -- >> let's get "bloomberg business flash." an asset management fund agreed to by a railroad operator for $9 billion in cash debt according to reuters. the price represents a 10% premium. has wholesale park prices taking a dive, the lowest level for this time of year in a decade. that is a huge u.s. expansion in the hog herd which has not been this big since 1943, coming just

as the u.s. comes to the biggest grilling day of the year, the fourth of july. swiss top traded without a hitch. with a feuddo between the swiss and the e.u. over and agreement for political ties. that is your "bloomberg business flash." we were talking a lot on friday weather today was a litmus test or indication that it made provide for the post-brexit u.k. market. we saw stocks trading without a hitch today as this was put up neverever protective -- tested. we are seeing horse traded in brussels with no clear outcome

of who will be counsel present -- president and the european how much do the jobs matter? carl: that person is a spokesperson of the governing council and hard votes are not taken and the president assesses the mood of the room to come up with decisions. that is a significant choice if we get a hard line monetarist. he can spin the conversation and decisions and with his worldviews. much is saying what needs to be said to get the job and how much is it his vision for the world. it does matter. -- the eu hashave failed to reach a decision on top jobs.

you could argue that the most important job is ecb president. what kind of qualifications that person need if we are going to limit monetary policy? carl: the ecb president should have a strong backing in economics. that is something that draghi brought to the job that his predecessors did not have. they had no real strong training in economics and navigating through these extreme times of unusual policy and extraordinary policy measures. that is what i would like to see, somebody with that. do others fit the bill? carl: all three have what it takes but they have different worldviews and different cultures. carl weinberg with

high-frequency economics. mr. hunt is speaking. implementation period without a divorce deal. moments. important how close is mr. hunt to catching up with boris johnson? francine: i think he is still quite a ways away. what happens now is the conservative stte party -- ist party will have a vote. eu u.k. is due to leave the on the 31st of october and a no deal still remains the default position and that is why it is important for both candidates to have a clear plan to deal with the possible no deal. tom: sterling a little light today. extraordinary news on a monday.

we want to show you the images from long kong -- from hong kong. these are protests at the legislative building. the protests appeared to be cladding offuminum of the buildings. we saw a number of them yank that off and now are moving more towards a doorway. this is into the monday evening in hong kong. on -- sophien is cameroon is on the roads. please stay with us. this is bloomberg. ♪

francine lacqua on queen victoria street. -- i'm tomkeen

keene. we want to go to sophie cameroon on the streets of hong kong at the council building. we have been looking at images of a substantial protest against the architecture of the legislative council government offices buildings. it is extraordinary images of umbrellas being piled up. is that something unique to these protests or something original? this particular event the be considered unique at legislative council building. there was a break into the glass panes. the police are behind that barrier waiting for a standoff. a red alert was issued today regarding the area around the

building. francine: will lam have to resign? sophie: resignation is being called for by this pro-democracy movement. whether she is pressured to resign remains to be seen. whether or not her pro-government camp will support her remains to be seen. like carrie lam

will be focused on that. we have the foreign secretary of the u.k. i'm one of two contenders to become the next u.k. prime minister delivering a species -- a speech in westminster. this is him pledging a 6 million pound award to handle a no deal brags it. .- brexit we will also follow what boris johnson says on the others as the two battle it out. we should have a decision by july 23. reach ahave failed to deal on top jobs and will start negotiating tomorrow. never going to be an easy job because the influence is the european elections and each country wants to get their guy or gal and the top dodge --

top job. is it more difficult than we thought? maria: everyone expected this to be a long night. we have been here for 19 hours. european leaders locked in a room for 19 hours and we have been told there is no agreement. they will stay in brussels. everyone thinks this is unprecedented to see this. the finger-pointing is down to angela merkel. she negotiated a package deal them said they there isree to this rebellion against angela merkel and usually she was a powerful woman to bring everyone in line. that is not working and it is her own people she cannot bring to her side. 19 hours have passed and no

agreement. tom: what are they arguing about? contention point of in 19 our meetings? here is the thing -- the european democrats angela merkel want an election and the european commission is one of the biggest jobs in europe. they do not understand the rationale to get to the democrats going home empty-handed. at the same time, there is speculation the germans would not be able to get the european central bank either. this makes note sent -- cents for the democrats and for angela merkel to go home empty-handed. macron hase emmanuel been a shock to the system and they disagree to how he has done this. tadeo, thank you very

much. here is viviana hurtado. --liam: --lorenzo codogno nuclear talks have gone nowhere since the president walked out of the meeting in february. to china where week factory reports show the need for a trade truce. contraction is indicated. the u.s. and china agreed to resume trade talks over the weekend jeremy hunt today is trying to burnish his brexit credentials. the foreign secretary is running for prime minister. he is setting out a no deal exit. basketball.pro

brooklyn nets are the talk of the town and they agreed to a deal with kevin durant and kyrie irving. this year, irving became frustrated while playing with the boston celtics. the deal is seen by a blow to the crosstown rival, the knicks. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm viviana hurtado. this is bloomberg. tom: extraordinary news flow today in international relations in politics and finance and investment. carl weinberg is with us from high-frequency economics. we are going to bring you the global chair of mergers and acquisitions. that barely describes him as

"the guy" who understands. is the business of scale right now? is the phone ring off the hook with c class officers searching for scale? >> there are a lot of things being looked at. but bringing the deal to fruition is difficult. tom: why? kongu see images of hong and this captures metaphorically what is going on in the business world. deal working on a refining and the mexico tear threat came up. that is what is happening lots of people looking at things. fundamentals are good the economy is ok capital markets that is practically free. it is difficult to do anything

when you do not know what the rules are. tom: do we improve the rules over the weekend? the market has improved. the bull market has lifted up. am i right that money is up to our chins and there is money available to effect transactions? bob: it is not money -- you are completely right to ask the question. the problem is -- what is going to happen if you announce deal? all the financial modeling looks great but how do you value things with tariffs and threats and inconsistency? it is not just trump, the world is more nationalistic. : we saw this around assessld but banks can't risk whether it is trade

differences are uncertainty about who will be the president of the eu and what the relation with mr. trump would be. there is a lack of lending in europe and japan and canada and that is the flip side that you are seeing in the deal world, which is we are in turbulent times and without credit being willing to go out and people willing to take the risk, things slow down. francine: i am looking at some of the figures because we have someone from ap morgan talking jput m&a fraud -- from morgan talking about mna. -- m&a. there has been a transformation of deals in the u.s.. what are the deals driven by, industry or funding? carl: it is not a motivating factor, funding.

equity values are up. if you are a buyer rather than a merger partner, it is an offset. it has stripped away the very mentioned. you u.s. numbers would be down for the first half. on.cine: but come the deal was probably a record setter. m&a guys tend to be eternally optimistic but it is a difficult market. it is still a good market. look at this morning. it is doing another deal in a are buying outy railroads. francine:'s europe different because of regulatory concerns? a europe different

because of regulatory concerns? bob: it is down from high numbers but there is a lot going on. europe is different. nationalism has always been a factor there. frankly, i think the financing is still there and it was down 30%. how do you explain that? there is uncertainty about whether a recession will happen first, assuming when it happens. tom: do you have a thought on the new world of health care? there seems to be a rollup of health care because profits are nonexistent. is that a correct analysis? bob: it is an industry where synergies play a bigger part of the story and that improves the profit margins. --ergize means tom: to cut costs.

something?t to add is there a question? trade creates uncertainty and barriers divert trade as well as create trade. is there any evidence you are seeing that the trade barriers are creating new opportunities for mergers in different directions and new producers in the pan, india, places like that? bob: i don't think so. worth,e, for what it is is that it is uncertain. making huge capital commitments, you have to have some level of certainty. it goes back a week to mexico tariffs. when you have those curveballs, it is hard to figure things out. until it gets settled, whatever it is, and that is the thing with china.

a big difference this weekend? i don't think so but will it be something eventually? for sure. tom: bob profusek with us and carl weinberg. what a great way to start. in hongerent locations kong show different perspectives. this is the ongoing tensions into the evening. i would suggest with the images have seen over the last two hours, the intensity is up, i would say. please stay with us. this is bloomberg. ♪

tom: bloomberg surveillance. about a chart right now on oil? carl weinberg was with us as well as bob profusek doing m and a within the oil patch. moving average $100 a barrel is long ago and far away. there is real debate about where this goes. we go back to the weaknesses are do we elevate? how does oil filter into how the global economy does? carl: oil is transferred income from importers to producers. that is old school. a lot of importers are now producing. i do not understand myself the uncertainty about the future horse of oil. -- future course of oil. peaches have been in demand for

a long time. -- futures have been in demand for a long time. tom: i do not know if you can talk about occidental but will we see more oxidation's and hydrocarbons? carl: probably, for the reason you mentioned. prices are low and there is no debt overhang that existed a few years ago with the fractures. ackers. they are ready to be harvested and a lot of people missed out. guys -- mis what mna and a guys say. was it harvested by brookfield? francine: are there any other industry groups that are right

for consolidation? carl: it is hard to find one that isn't. factor behind m & a has obviously been an issue and technology has created the ability to globalize. the technology impact is not changing and it is accelerating when you think about it, you will see more and more companies impacted by technology. affected byis technology. huge ag company is looking at drones and all sorts of everything. technology is affecting everything and makes things happen. if i could think of an industry that wasn't true, it would be things where it is not happening

. technology is driving everything. francine: is at the right kind of m&a? desperatione out of because the companies will be irrelevant? bob: i am not sure relevant is the standard. when you mention the 25 deals over $10 million -- it is interesting looking at what happened to the stock prices after they announced the deal. usually there is a dip because there is an assumption that there will be a transfer of value. in the any anadarko case, there was a -- in the indiana dark case, there was a little drop. -- it is born of

logic. you mentioned health care, the big pharma deals when you have to do a big deal, is it a question about the pipeline? it really depends. host deals create value, contrary to what you read in most of the eastern university press. tom: which university? bob: certainly the one in boston. tom: we will continue. carl weinberg is with us and someone reading bob profusek eastern university literature, bob profusek we'll be staying with us as well. this is bloomberg. ♪

tom: into the evening in hong shot here is a beautiful of the legislative offices in the central district down from

the famed mandarin hotel. substantial protest with violence including broken glass against the government buildings. it appeared to be some aluminum cladding been pulled off. hong kong after a 22nd anniversary. francine: we are also keeping an eye on what is happening with the eu over in brussels at the leader summit. the prime minister briefing reporters right now. i believe he is speaking in italian. italian,unate to speak not as useful as others except when listening to opera. we are hearing from angela or saying angela merkel that no candidates were voted down for the eu council. leaders are not going home. they will start again tomorrow to find consensus for some of the top jobs in the e.u. tom: bob profusek

is with us. we need to talk about deutsche bank and you do not represent the bank or any other parties in the future of a giant german bank. what would you presume they ?ould do in new york >> an speculating -- they will do what other companies do, look at where it makes sense to exit and where makes sense to consolidate. they will look at it and model it and come up with what the best idea is going forward. it is interesting because the discussions have gone on for months. gone.ave come and when you compare it to the aftermath of the financial crisis, it took a day to merge things. that is because they were under intense pressure of all of that.

these banks have their issues, like any company. there is not the sense of panic to get something done. it is very difficult. these are global institutions, including one that has a substantial governmental ownership and it is hard to work this stuff out. if one of them were under pressure, it would be a lot easier, but they are both doing ok. tom: bob profusek marketsyou extraordinary elevated -- thank you. markets extraordinarily elevated. here are some images. this is bloomberg. ♪ wanna take your xfi to the next level?

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meeting. and we will be continuing to negotiate. >> trading securities for soybeans. president trump takes tariffs off the table and opens the door for hallway -- huawei. strategists and economists say it is not good enough. morgan stanley cutting the global growth forecast. manufacturing surveys shows the damage is already done by the trade war. and oil may have a deal. the extension on production cuts and the oil rally, what it says for the future of the cartel. >> welcome to bloomberg daybreak. i'm david westin right here with alix steel. in hong kong, they are back at it. alix: unbelievable video and pictures as you have protesters