there is a deal, we will be taxing the hell out of china. beyond,5 percent and president trump threatens even higher tariffs. the flashpoint is now the u.s. consumer. u.s. jobs day. is good news actually good news? we will look at the bar for a fed cut on good data. goldman sachs raising its probability for another rate cut. go?: how low can you germany's entire yield curve slipping below zero. fear fueling a bull market in bonds. welcome to "bloomberg daybreak" on this friday, august 2. it is jobs day. i'm alix steel. david westin is off today. it is risk off in the equity markets. equity futures only down 3/10. europe is getting hit very hard. the dax off by 2%. you're seeing voracious buying

anywhere in the bond market. -- crudear yield totally bucking its train from yesterday. were selloff in over four years. -- the worst selloff in over four years. we are going to kick things off , the morningtters news that is moving the world. we are going to kick it off with china responding to the trade escalation. ministrygn spokesperson saying china will have to take necessary countermeasures. we took now to bloomberg's chief is a correspondent -- chief asia correspondent enda curran. enda: a pretty robust response, as you would expect.

they said they will retaliate if the u.s. goes ahead with these tariffs. they stop short on specific details, but the thinking is that china could respond by making life much more difficult for u.s. companies operating within china that could divert purchases of agricultural goods away from the u.s. and scrapped those promises to buy more u.s. and they could let the yuan soften against the dollar. they probably have some restrictions on what they can do in terms of tariffs, but china does have options up its sleeve. alix: thank you so much. now we want to go to washington, where president trump doubled down on china at a rally yesterday. china has taken hundreds of billions of dollars out of our country, and now we are stopping the theft of american jobs.

they steal our intellectual property. they would like to see a new president in a year and a half so they could continue to rip off the united states like they've been doing for the last 25 years. alix: we going out to bloomberg's trade reporter shawn donnan. is this about the fed or is it really about trade? shawn: above all, this is about donald trump and his frustration that he can't get the chinese to do the deal that he wants. he wants to do this in a hurry, and that is really what we saw yesterday, his push to try to increase pressure on beijing and xi jinping to bend to his way. that is the big gambit he's taking to the election next year. alix: where do we from here? shawn: i think the first thing is let's see if these tariffs actually going to place. the president yesterday as he was leaving said he's giving the chinese four weeks to meet his

demands to ramp up purchases of u.s. farm goods. we saw before as we saw with mexico, the president take a after the target of , but already the signals we got out of beijing overnight where that they were ready to weather the storm and retaliate. alix: thank you very much. i want to head over to europe. bank earnings continue to rollout in a world of negative yields. , chandra more from london -- emma chandra has more from london. emma: yesterday we had rbs reporting second-quarter earnings. shares sliding off of that. rbs pointing to a miss in net interest income. it missed animist -- it missed

analyst estimates. we so i slump in investment banking. large, -- we saw a slump in investment banking. by and large, european banks have surprised in the earnings. of the worst performing monetary policy in the u.s. playing into that. more to come from the ecb next month. an extended global bond rally after those tariff comments from president trump. the bond now in negative territory, and the 10 year hit an all-time low. alix: thank you so much. finally, we turn to u.s. jobs. --k report coming out at then i for report coming out at

8:30 the smart -- the next report coming out of 8:30 this morning. during us now is carl riccadonna. what is your expectation? a 1/8we are looking for decline, but not a lot of wage pressures. the main take away from this report prior to all of the trade tweets yesterday was to really focus on the degree to which income creation would propel consumer spending, which is the main driver of growth right now through the second half of the year. now the focus changes to some degree. a good report largely gets ignored. a week report definitely increase concerns that the economy is not able to withstand the headwinds we see coming in. if china is retaliating if in any significant fashion, we've seen in the past how in the plink of a night, tariffs can go

to 25% quite rapidly. alix: the question becomes, the market reaction function last friday would have been a bad number is good because the fed is going to cut. is that the narrative anymore? number think a bad becomes bad, unless it is so bad it pushes trump away from escalating trade tensions. if we are really following through on this type of escalation on september 1, then we are going from what jay powell characterized as insurance cuts and a modest course correction into a full-blown easing cycle. if we see 10% tariffs are more go into effect on september 1, i would make the call that the fed is going to be cutting 25 per meeting for the rest of the year. alix: thank you so much for joining us. coming up, you've got president trump's fresh tariff threat. more on what is going to affect your days trade with the bloomberg first take. this is bloomberg. ♪

alix: time for bloomberg's first take. president trump rocking the markets with a fresh tariff threat. china responding with a vow to retaliate. we will look at how this could weigh on jobs in the dollar. here to help us break it down, rachel evans, peggy collins, vince cignarella, and david kelly. guys, busy day. vince, i want to start with you. mostis going to be the important data point we get over the next when he for hours -- the next 24 hours? vince: i would say the earnings numbers from the jobs report today.

directly after that, we are going to worry about where the consumer is. the consumer is now going to be it was tariffs realistically for the first time. with her or not we can drive the economy forward as consumers is going to be what people look at. i agree that the consumer has been holding up this economy. potentiallyng slowing down, investment in capex, because of the uncertainty around trade. if jobs hold up, it will potentially validate the fed saying we are cutting 25 basis points, but we are not going to tell you we are going crazy with easing right out of the gate, but also to say these consumers may be able to hold up this economy for longer. alix: this is where, david kelly, i was wondering how jobs and trade fit in with each other. if it costs more to buy an iphone, what is the reaction in triple down -- in trickle-down that you see? david: the problem is that it is

a lag effect. we have a degree of complacency on wall street and main street about what is going on here. it is noall, i think coincidence that a day after the federal reserve cuts interest rates, we get more aggressive on trade. i think the administration thinks that somehow, low interest rates will stimulate the economy. that gives them license to be more aggressive. we also get an ok jobs report this morning, and they will say the economy is ok. the problem is interest rate cuts don't help stimulate growth, and employment is a lagging economic indicator. i am much more worried about future jobs reports beginning to fade. i think this is really negative for the global economy, the business uncertainty around trade. rachel: coming into this jobs report, yesterday morning i was looking at the screen, and my sense was we could see a good , but and markets selloff

now we've got trump coming out with these tweets about tariffs, and it seems like the markets need a good print to put a floor under any further losses. i think that gets a really interesting dynamic. to what extent can data overcome concerns about trade tariffs? the stock market in particular is going to be looking through data for the likelihood to cut. think at that point, i the stock market will be weighed by tariffs going forward. these talks, from people i spoke to, did not go well. day?oes to china for one you don't go to boston to fish for one day. china sent a hard message, and this was trump's retaliation to that hard message. if the message gets harder from china, he will ramp up to 25%.

of the key elements to all of this is global repression is going to see the dollar rise. that is the next thing we need to look at, whether or not trump starts to tweet about the stronger dollar. this will weigh on emerging markets and help the dollar. alix: that's a really good point as well. we saw some mixed messages coming out from the administration on the dollar. we have a great story by our colleagues this week on how there is some chaos in terms of kudlow come out last week, saying currency intervention is off the table. but then trump tweeted on friday saying, i didn't say that. currency intervention isn't off the table. we've been talking about in the economy team, it is extraordinary they are even having discussions about intervening on the currency. how does that relate to the other central banks in terms of what they are doing as well? i thinkthink -- david: this is one of the main problems

we have with currency right now. we don't have coordinated central-bank action. it really makes no sense at all for japan, europe, and the united states each trying to edge their currency down with super easy money that is distorting the whole global economy. what we need to see in many areas is coordination among countries. a basic allied interest in a stable currency market. it depresses me a bit to see the moves by central banks and the political rhetoric of trying to use just a zero sum game. can agree that the u.s. dollar is too high, hurting everybody in emerging markets and the united states. let's bring that down, but bring it down to a reasonable level, but let's have some coordination and agreement. this kind of currency war just adds to the effects of the trade war. won't like that

very much. that's the challenge. the political rhetoric isn't going to go anywhere. we can talk about an international accord, but given where we are at, there isn't a lot of more room to go. if you are putting a 10% tariff on the rest of chinese exports, you can increase those, but you are running out of room. so what is next? currency intervention could be the ultimate escalation from the trump perspective to help u.s. manufacturers overseas. vince: i think unfortunately, you are right. i agree with david it would be great if we had coordination, but if we put more pressure on china and on our allies as well, it wouldn't surprise me if we start coming down on germany pretty soon with auto tariffs. the problem with that is there is no coordination. alix: you mean everyone wanting

a weaker currency is not coordination? [laughter] vince: well, now. as we put tariffs on china, china looks to other avenues for resources. they are going to ally with european countries, for instance. that is going to increase tension on the administration. the idea we are going to coordinate with other countries while we are at each other's throats is unlikely to happen. if it should continue to escalate, it wouldn't surprise me if the administration would revert to currency intervention, even though it won't really do much in the long-term. it will cause enough of a problem in the near-term to ande get some of this angst get where we are really going. david: one of the problems i think we are having is that populist leaders seem to always think the other side is going to be rational. with the president and china, the assumption is the chinese can't take the pain, so they will come to the table. if i am sitting in xi jinping's

seat, i know on my calendar that it says 450 days to the next u.s. presidential election. i am probably just going to try to wait it out, and the same way the euro will not want to do a deal with boris johnson on brexit. the assumption that the other side is going to cave because they are logical, and we can afford to be illogical, that is a very dangerous assumption. think the point about the election is very important. even trump has said this himself. are the chinese going to wait it out and see what happens? also, trump only has a certain amount of levers he can pull between now and november to make sure the economy is still in record expansion. how much can you really press on before its lever starts to seep into consumer prices? alix: on the flipside, i wonder if it is the sweet spot. you have a fed continuing to ease in some capacity, and you

are also able to ramp up rhetoric on getting tough on china, which could play more to his base for elections. rachel: we had another rally last night in cincinnati. being tough on china plays very well with his base. having consumers pay more for their goods may be doesn't. i think it will be really interesting to see whether some of his opponents start to leverage up rhetoric as it relates to how the consumer is paying for these tariffs and get a bit wonky with the consumer to explain it is you and your company's having the impact. vince: the problem is you had schumer this week say one thing be president can't do is take a bad deal from china. this is the one thing the republicans and democrats, maybe the only thing they agree upon. inna has been a bad actor the technology transfers, and the story from china yesterday

as we are not going back to that original agreement you wanted. as far as information technology transfers, you're going to have to take our word for it. it is not going in the agreement. without that, i don't think we will have an agreement. it will be well past the 2020 election and depend on who xi jinping is dealing within the white house as to the next level of those trade discussions. alix: david? david: i think one of the time,ms here is that over we think china's going to capitulate here. the trump administration does. they also think the low interest rate it them cover. cuttingysis suggests interest rates at this level actually slows the economy. where we think that will give us some leverage, i think that is -- i think the economy is going to weaken in the end of this year. if the economy is weaker and

2020, they can say you just did it all wrong. you didn't do the trade war the way we would do the trade war. alix: i have to ask come with this global bond rally, is that what you want to do? is that how traders are really positioned? vince: no, and i think david makes a really good point. what affects the price of money? we are all forgetting the demand side of that function. demand is relatively steady. if we continue to increase the supply, we just lowered the price of that commodity. we don't necessarily make it more valuable for anyone. if the perception is this is the way things are going to go, you have a disinflationary environment and a very easily could weaken the economy, not strengthen the economy. these interest rate cuts really don't get down to the consumer level very quickly, if at all. they do in the auto sector, perhaps.

this creates this feel of a or depressednomy monetary inflation situation, and the demand doesn't pick up to absorb it. alix: and it is not going to help you buy nike shoes at the end of the day. guy's, things a lot. rachel evans, peggy collins, vincent cignarella, thank you. david kelley of jp morgan asset management will be sticking with me. if you went to check out the charts we use and more, go to gtv on your terminal. coming up, we break into the sector decline next. this is bloomberg. ♪

viviana: shares of ferrari falling by the most in almost 10

months after the carmaker posted a slowdown in profit growth and shipments. shares declined 6.9% before being halted from trading. the drop coming after a slight mess of analyst expectations on adjusted earnings. campbell soup inking a deal to sell international operations to kkr. the 2.2 billion dollars deal completes the soup maker's asset plan made last august, trying to pare down its debt. --th korea is warming that south korea warning that it could take japan off of its easy trade list. that is your bloomberg business flash. alix: thank you so much. if techs needed anymore problem,s this is the breakdown we have seen in the semis.

the stoxx heading for their biggest asked the stocks heading for the -- the stocks heading .or the biggest decline volatility is really rising. just to point out what the big losers were yesterday, this is function showing semiconductors getting hit as much as 4%. we will break that down. coming up on the program, industrial commodities also getting hammered as trade fears resurface. bp's cfo talks about the political risk. ♪

alix: this is "bloomberg daybreak." it is jobs day, and a huge bond rally day. 2.5%, andf by over

increased trade fear is that economy is very levered to china. and other asset classes, it is in a norm global bond rally. german 10 year yields now down 50 basis points. -50 basis points. the whole curve now below zero. the curve here in the u.s., 14 basis points. two days ago we were in the 20's, so a huge amount of flattening still happening. crude kind of bucking the trend. i do want to highlight exxon earnings coming out. they are looking at cap up 22% on a year on year basis in the second quarter. they did beat on earnings and have higher production, so all told they had about 3.9 billion barrels of oil a day. technically the market does not like a higher capex. if you spend more and produce -- producee will see

less, we will see how the market reacts. talking about overall oil, you have the trade war and geopolitical risk. industrial commodities keep getting hammered, particularly when it comes to iron ore and steel. yesterday i sat down with ryan gilvary, -- with brian the bp cfo, on his biggest concerns. brian: if you look around the globe, it feels pretty uncertain right now. three months ago i was worried about the rates and what interest rates would do. specifically in the u.k. and the u.s., and europe. i would have assumed about three month ago we were going to get a rate hike across both pieces, and the opposite has happened. in some respects, that is easing balancing perspective because our cost of debt is around 3.4%, and rates coming down will help that. alix: so that is the macro.

you also mentioned the demand. in terms of the supply, we have geopolitical risk and u.s. shale, which has been a gangbusters. diva expect it is going to be the gangbusters -- do you expect it is going to be the gangbuster to the supply and demand dynamic? brian: we definitely see growth out of the united states. when i was first working here in trading 10 or 15 years ago, it has been a prolific growth story. beyond this year, we will see. a lot of it is on what happens with the smaller players. if you look at the big caps and mid-caps, capital investment still continues to go in. as oil prices come up, you can ramp activity up. as they drop activity down again, you can -- as they drop prices down, you can drop activity down again.

going into a market where you have a large number of lng in the n, so you'reulls story, going to see some pressure on gas prices, but i think they will stay pretty suppressed. the u.s. is pretty much built out. you can move gas in the united states. you can see with the issues they've had around the gas pipeline. gas is finding a way down to texas even though it's been constrained. you've got a lot of infrastructure in place. in terms of lng, it is just more and for such are being built and more projects, particularly around australia. alix: do you think they get belt? -- they get built? arrivei think they will next year or in 2021.

that's why you have plentiful gas trying to be exported, so i think you will see it backed up even further in the united states. alix: that was part of my interview with brian gilvary, bp cfo. , j.p.with me, david kelly morgan asset management. in the internal dynamics, how do you see this playing out? david: i think the trade war ing ais hav detrimental effect. just changing plans. it is causing people to not follow through on plans. the response is, let's just wait and see. see,everyone just waits to that's when bad things happen. when you look more specifically at oil markets, i think the key issue is that because of u.s.

shale production being very sensitive to prices, i don't think we are going to see a huge break out the upside or the downside. i think if you see enough downside pressure on oil prices, you will see shale production slow down, and that will begin to mop up some of the excess. alix: before remove more specifically to oil, just in industrial commodities, do you feel what they provide the same kind of bellwether for the economy they use to? is there some kind of money to be made in that? david: i think the global economy has evolved enough and have become complicated enough and changed its shape enough that you really trust other commodities to really tell you where things are going. i think there's no substitute for a big macro model to try and figure out what is going on here. in a slow growing global economy, you could have a continued steady growth and weak commodity prices just because producers in a low interest rate environment don't want to take capacity off-line.

but when you see trade volumes overall fall, that is a problem. alix: fairpoint. david kelly, hang tight. exxon earnings came out earlier. bloomberg's emma chandra is here to break them down. what did we learn when exxon came out? emma: we got exxon results just a few moms ago. we saw a beat -- a few moments ago. we saw a beat on earnings-per-share, also production, but capex, too. nevertheless, we are looking at exxon spiking in the premarket, up 2.3%. that is very different to what we saw here in europe. a number of the big european names posting some disappointing second-quarter results. shell, the ceout blaming what he called severe macroeconomic headwinds affecting oil, natural gas, and downstream refining. bp doing pretty well.

it bucked the trend for european majors. that cfo saying they put in a solid performance, and also saw higher production, something we have just seen from exxon, too. what to expect from chevron as we hear from them later? we heard that exxon did better than has been expected, in line with what bloomberg intelligence was saying to us earlier. what will be interesting on the call is if we hear anymore about global concerns, global demand concerns from the executive team. also, anything we might learn with regard to u.s. production. we are still looking at u.s. production toward record highs. both exxon and chevron have been late to the party here. exxon is now one of the biggest producers in the permian. that is quite interesting, given what we learn from independent producers in the permian, the original shale darlings. i'm talking about the likes of apache and whiting.

really not looking good for concho or whiting, reporting some disappointing second-quarter earnings, stumbling and lowering production estimates. analysts for these companies accusing them yet again of overpromising and under delivering. alix: really great perspective. thank you so much, bloomberg's, chandra. -- bloomberg's, chandra -- bloomberg's emma chandra. david: i think what helps these independents keep going is very easy money. i think what is going to happen here is there's no risk the federal reserve will have to cut even more. when you have very easy money, very low rates, that really allows them to keep production rising. i think they will be much more threatened by a rising interest rate environment than a falling interest rate environment.

for the moment, i wouldn't want to make a call between the majors and the smaller players in the space come about in this kind of environment of very low rates, the tendency is to overinvest and overproduce. alix: fair, but it does bring into question the broader view of value versus growth. in financialse and energy. where do you make the call? david: think about the psychology of markets here. what we have is, unlike the economy, which is kind of sluggish, the markets still have euphoria that tends to help growth stocks. when you look at relative valuation, value stocks look pretty cheap across the board. i think the right way to play you almost have to close your eyes and recognize that at some stage, there's going to be a big market correction. at some stage, there's going to be a recession.

in the days of nightmares, that spread is going to collapse. so the time to really profit from these value stocks will be in darker days indeed. alix: so poetic, david kelly come on this jobs day -- david kelly, on this jobs day. thank you very much. now we are getting an update on what is mucking headlines outside the business world. viviana hurtado is here with first word news. u.s. secretary of state mike pompeo defending donald trump's decision to impose new tariffs on chinese products last night. during an exclusive chat today with bloomberg, pompeo says china has been taking advantage of the united states in trade for decades. cannot be thet case that a nation uses protectionism to protect its own goes and uses -- its own goods and denies others the chance to grow. viviana: he added that china can

go back to the agreement that was originally on the table. in the coming weeks, the united states plans to test a new missile. it would have been prevented under a landmark arms-control treaty that expires today. in 1987, president reagan and soviet leader mikhail glover to have signed -- and mikhail gorbachev signed the treaty. the u.k., today british prime minister boris johnson's governing conservative party losing a special election. that leaves the party with a one-vote working majority in parliament. it was the first electoral test for the conservatives since johnson took office nine days ago. johnson says britain will leave the european union october 31 with or without a deal. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much.

let's stay with brexit for a second. everybody seems to have an opinion on brexit, and now it is -- itg chief mark carney is banking chief mark carney that told reporters in london "is just wrong." both of these guys former goldman sachs. weeklyore in our "bloomberg businessweek" feature. if you have a bloomberg terminal, check out tv . this is bloomberg. ♪

viviana: this is "bloomberg daybreak." hour, d.c.n the next properties ceo. alix: we turn now to our weekly "bloomberg businessweek" feature to profile some stories in the latest issue, on stands today. first up, competition escalates in the world of streaming on demand tv. and china's jens e with little income -- china's gen z with little income and no credit turns to easy credit. and victoria's secret has great challenges i had to stay in touch with today's consumers -- challenges ahead to stay in touch with today's consumers. joining me is taylor riggs and brooke sutherland.

so with tv streaming, who is in the pit here? taylor: this is the cover of the story we did this week. basically a year from now, everything is going to be changing. you will have all of these companies coming out with streaming. you have disney coming out with their streaming product. it is going to be an entirely different long game. the thing for me really was the cost that you have to spend on original programming. some of these companies are saying, because they are trying to keep up with netflix, we won't even be profitable for another five years. talk to us then. that is just the amount of competition that is out there. brooke: it is not even just deprogramming. it is the technology, the plumbing to support the streaming service, the marketing. netflix is doing these interesting things with super bowl commercials and "stranger things" merchandise. if you have a down season or

content that doesn't appeal to people, they have no problem pulling the plug. alix: isn't the whole thing they really do well on his reruns, and stuff you already know? like "friends" crushes on netflix and will end up going away. brooke: but i think it is hard because you do not want to have so many different streaming services. am i going to stick with disney just to watch reruns of an old show if i don't like the new programs, or put my dollars toward netflix when they have a good new season? taylor: they said that they are so easy to cancel and sign up immediately, so it is becoming so competitive. , with hbo at $15 hulu, wind we all start going to five dollars a month? go to thes second-story that has to do with china and gen z. they get hooked on easy credit.

right?the whole point, when you're 20, you get the credit card that has 30% interest? taylor: this is really all about z anda and gen millennials buying all this stuff on social media. there's a great story about an individual who had to go to another alibaba company to get a loan to repay the debt. it is a consumer story, a social media story, and if you don't have income, it is going to be a debt story as well. brooke: credit cards are much more regulated than this new fin tech economy. they don't have great data on it. we don't really even know how indebted some of these people are. concern is that you have to repay those loans, and that is money you then can't spend on new products. as china tries to transition to more of a consumer economy, are they going to have the financial firepower for their consumers, especially this generation, to

that? alix: alsoalix:, china is not going to let these lenders sale, either. that will be a significant issue for repayment. brooke: and they have to support other parts of their economy given the trade war, especially when factoring. alix: let's get to victoria's secret. you have the macro with jeffrey epstein, and they just can't get a bid. brande ways, how is this still around? taylor: we were talking about 10 years ago, you would watch the victoria's secret fashion show was a big thing and watch on tv. it was an event. that does not resonate anymore with the me too movement. i think another interesting thing is well beyond the epstein problem, they have some other things. i was looking at victoria's secret sales. it has slowed in the last two years, but they are still

pulling in $7 billion a year, which i think speaks to the monopoly they have, regardless of the image problem they are going through. brooke: i think the difficult thing is, how do you change that image? victoria's secret has banked its whole business on being sexy. that is what they sell. so how do you pivot? freight company like american eagle -- for a company like american eagle, they really started from the ground up by trying to sell to women of all different sizes and shapes and colors. victory a secret has not necessarily done the same thing. i don't know how well it can completely reposition its business model. they were originally founded by a man through man's eyes. he wanted to buy lingerie for his wife. he didn't have a good experience. that's how the tory's secret was started -- how victoria's secret was started. maybe that's how they change it, using a woman's eyes.

that maybe was where the whole problem started. alix: interesting. the fashionfter show years ago, we would have to do the package. businessweek" is available on newsstands and online now. more consumers are saying goodbye to unreliable public transportation and hello to helicopter service. this month, uber started helicopter service to jfk. overguardia, there were 1000 helicopter takeoffs and landings just last year. yes, you have to pay for it. it cost about $195, about $100 more than an uber ride, but i've got to tell you, after taking 20 minutes to get out of jfk's parking lot yesterday, that sounds pretty awesome. coming up, google's response to european regulators. we will give you the latest on

the work to fend off antitrust scrutiny. and if you're going to hop in your car, don't miss out on anything. you can turn into bloomberg radio -- you can tune into bloomberg radio on sirius xm channel 119 or the bloomberg business app. ♪

alix: here's what i'm watching, google. it's moved to fend off antitrust scrutiny, the company is going to becomevals bid alternative search providers on their phones. what are they trying to do? reporter: last year, google was the subject of a 4.8 billion euro fine for the way it forced handset makers to preinstall android. now the european commission says you can do that. what happened when microsoft was in the firing line is that microsoft just offered a random

sort of selection of internet browsers, and they didn't pay anything. google is saying it search engine rivals have to bid in order to be listed as an alternative on the default search engine rotor. to me that seems fairly brazen and not really what the european commission had in mind. alix: so what do you make of that? do you feel like they are saying we are still going to do what we want? ec is goinglike the to push back? above.es to all of the this is google following the letter of the law, but certainly not the spirit. they were left to their own devices to resolve this issue. it gives them a lot of competitive insight into how much a customer is worth to some of the rivals. does that mean the european commission pushes back and says this is not acceptable? i would expect so, but that buys

google more time to carry on with the status quo and leverage its dominant position. as we head into the autumn, when smartphone buying season runs up , it gives them another year of prominent position in handsets. like a whole different kind of game like a we different kind of game theory. alex of bloomberg opinion, thank you for joining us. coming up, we are just about a half-hour away from the jobs number. we will have the coverage from of harvard kennedy school, cohosting for the hour. you're seeing some unbelievable moves in the bond market. at -50 basisyield points. this is bloomberg. ♪

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there is a deal, we will be taxing the hello out of china -- the hell out of china. that's all there is. alix: president trump threatens higher tariffs on chinese imports, while china promises retaliation. u.s. jobs day. is good news really good news? we will look at the bar for a fed cut. goldman sachs raising its probability for another rate cut. and how low can you go? germany's yield curve slipping below zero, while the bund yield hits another record low. welcome to "bloomberg daybreak" on this friday, august 2. happy friday. joining me for the full hour is megan greene, harvard kennedy school senior fellow. thank you for being with me for the hour. abouts article the talked triathlons we were just talking

about you say the worries a u.s. recession remind you you of amind triathlon. first of all, you ran a triathlon. megan: i did. it reminds me of the swimming part, which was awful. i thought i might drown. but i came through and i did find. u.s. economyg the will do better than expected, but it is possible that the manufacturing sector could be in recession and it doesn't mean we are going into a full recession. just because we are not investing in things like new structures and equipment, we are investing in things like technology and intellectual property, things like that instead, which are intangible. that doesn't bode well in the short term, but in long-term that should boast productivity growth.

i think we have this manufacturing recession, but our hair doesn't need to be on fire. alix: you don't need to have a floaty when you are swimming. [laughter] alix: in the markets, the position is all about the rally in the bond market. equities are a little off, softer in the u.s. you're seeing big declines in europe, particularly germany. a mixed dollar story. 1.86 on the 10 year as yields move down. that is really the highlight. german bunds continue to get that rally. crude up by 10%. a geo political risk story. in the meantime, president trump ratcheting up the trade war, saying the u.s. will put an additional tariff on the remaining $300 billion of chinese goods. the chinese responding overnight, saying if the u.s. is going to implement additional tariffs, china will have to take necessary countermeasures.

that comes from the foreign ministry spokeswoman. joining us on the phone is george magnus, associate at university of oxford's china center. so what can china do to literally retaliate? george: there are still lots of things they could do, even if they've basically run out of imports from the united states to tariff, because they've already than that -- they've already done that. people may remember that soon after the administration published proposals to create this so-called entities list, which has on its companies which are forbidden from selling products to chinese companies, particularly tech products, the chinese announced their own entity list proposal. it hasn't made very much headway, but they could accelerate the rollout of that list. really --of suitably

studs sibley -- this list would include u.s. businesses where they can make life more difficult for american companies by be more rigid about licensing, regulations and redtape. they could step up the media campaign against the united states. it is not to be ruled out that there could be harassment of individuals or corporate executives or visitors. there are a lot of things that china could do if they really wanted to fight back. megan: china has been trying to reflate its economy since the end of last year. how much does the latest round of tariffs bite for chinese growth, and what can officials do to try to stimulate the economy further? have a lotl, they do

of options available. not all of them are options that most economists would recommend or particularly useful advisable at this stage, and in fact, the chinese government itself has been relatively restrained in 2019. --has tried to defray totrained in 2019 in trying defray the downturn of the economy. probably during the last year, china has lost about 5 million industrial jobs. probably about 40% of those jobs, may be less, are attributable to the impact of the trade war. that is before the 25% tariffs were imposed on the last $200 billion. that's according to a couple of bank research papers. so things are beginning to grind away at the chinese economy, although they pale in comparison so the made in china factor

contributing to slower growth. that if youo doubt add on the effect of the 25% $200fs of the last billion, then cumulatively this is going to have a more negative effect on the chinese economy. alix: more red flag for china. thanks a lot, george magnus of university of oxford's china center. so how does trade play into the election? last night at a rally, president trump called out china for what he says are decades of abuses. pres. trump: for the last 20 years, china has taken hundreds of billions of dollars out of our country, and now we are stopping the theft of american jobs. they steal our intellectual property. they would like to see a new president in a year and a half so they could continue to rip off the united states like

they've been doing for the last 25 years. alix: joining us on set, subadra rajappa, socgen head of u.s. rates strategy. i want to start off with the election because i wonder how much of the electorate cares about china specifically. ?o you have a read on that increasingthink an amount of the base and the u.s. population are worried about the threat china poses. i also think trump made this pretty central to his last election campaign. ityou look at opinion polls, really well, so i think you will make it central to this campaign as well. what if you pare that was we are seeing in the bond market, for example, you have the base more worried about china's influence and power, and this move in the bond market

which shows global growth worries over the long-term. how do you square these? subadra: for the markets, i think it is about the transmission mechanism and the impact of global tariffs. we saw a rise in breakevens, moves lower in bonds, a stronger dollar, as well as the move lower in oil prices. it is all part of the global growth story. i agree, i think it is more of a bipartisan issue. you have agreements on both sides of the party. it is going to have a tangible it might help politically. megan: how are you singing about tariffs with respect to inflation? typically economists -- you thinking about tariffs with respect to inflation? economists think of it. subadra: if you look at the last cpi number, there's evidence of

some feedthrough into the inflation numbers, especially if you look at sectors like home goods and things like that. you're seeing some pressure come from higher tariffs, but it is really the global inflation picture to me that is very troubling. there's a slowdown in global growth, so you should see that translate to tighter breakevens in the u.s. as well. if you look at the last week, there was a survey that came out on wherean economists they thought inflation would be in europe and the next five years, and it was at the lowest level. so you're looking at a global weakness and decline in inflation. the trajectory is really what ultimately matters for expectations. alix: do you feel like all of that justifies -50 basis points on the german ten-year? the entire curve in germany below the 10 year? is that justified? subadra: that's a tough question to answer because the markets are starting to be a little more

forward-looking and trying to gauge what the reaction function is going to be from the ecb. the expectation is they will cut rates by 10 basis points, and then introduce some kind of mechanism to be even cut rates further. the trajectory for deposit rates in europe is -70 basis points. the market seems to be efficiently price for that. megan: the 10 year, how anchored is it by what is going on in germany? can the 10 year actually increase? can we see the yield curve on un-invert?ield curve subadra: we think the 10 year yields are going to be anchored, or the risks are asymmetric towards lower yield, because you have this gravitation coming from global bond yields. . you've already seen the japan of occasion -- the japanification of europe.

now you're seeing it leak into the u.s. alix: coming up, the numbers that could set the tone for economic activity for the second half of the year. we are going to look at job expectations next. this is bloomberg's. ♪

♪ alix: this is --viviana: this is "bloomberg daybreak." allianz getting a boost from pimco in the second quarter. operating profit from nonlife insurance missing estimates, falling 5% from a year earlier.

google is trying to fend off more antitrust scrutiny. google says it will require rivals to bid in order to be alternative search providers on android smartphones. that's willune choose between people and three others as their default certain google choose between and three others for their default search engine. ubs is warning of tough -- rbs is warning of tough times ahead. the cfo tells bloomberg the bank is unlikely to reach some profitability targets, including returns on equity of more than 12%. >> there's a bit of pressure on income, and because of uncertainty in the rate curve moving down, and then there's also -- and that really is the driver of the 12%. viviana: rbs didn't offer any new details for its search of a ceo. to take an is leaving

job in australia. alix: thanks so much. we are counting down to the july jobs report. you are looking at the estimate to have been added last month. of harvard kennedy school is with us, as well as subadra rajappa of socgen. megan, what are you watching? megan: i would be looking at manufacturing in particular, and some sectors to see what the impact of trade are. autos, those sorts of things. subadra: i want to see multiples getting pulled back into the workforce. andk the impact of tariffs which sectors you are seeing is going to be important. alix: let's get to the perspective of the employment rate. who is coming into the workforce, and are there more women? for that, we are going to talk to katica roy, pipeline's ceo. improved gender

pay. you use data to help companies on why you are going to hire more women. what is the take away from your research? katica: we found that for every equityrease in gender towards parity, there's an increase in revenue. alix: interesting. and you can draw the line directly? katica: yes. it is good for business. we often talk about it as a social thing the right thing to do, but in actual fact, it is an economic opportunity. if you think about ceos, they are held accountable for maximizing shareholder value. this is a key lever they can pull to make that possible. where do you see the disparity most pronounced? where do you see the

disparity most pronounced? katica: the higher you go and the more educated you are. subadra: does that change in different countries? katica: i know it most for the u.s., and it does change in other countries, but it tends to be pretty constant. megan: what is the transmission mechanism between hiring more women and boosting revenues? he also had this incredible statistic that we are leaving $2.1 trillion on the table by not having more gender equality. how are you measuring that? question,, your first what we actually look at is not only the number of women in your workforce, but what level are they at. are they at the entry-level? c-suiteke up 22% of the , but which position is it? typically it is not the pay ultimate positions. just count your

women. it is actually, where do they fit and what numbers do they impact? the second question around the $2.1 trillion, it is actually based in labor economics. we look at education attainment. we know that women are outpacing men as the most educated cohort in the u.s. but also, are they participating in the labor force? that is projected to decline. what industries are they working in? do if they can women feel like they are at the wrong end of this gender pay gap? alix: the answer can't be go get extra education. [laughter] katica: that's right. what is interesting is for the first time, we actually have more educated women in the workforce, so one of the things we've seen is that women have been getting more education, but

labor force participation has been falling. for the first time this year, we see more educated women participating in the workforce. i think that will be interesting to see if that is a leading indicator in closing the gender pay gap. alix: megan, from your work, what do you see in terms of labor force participation rates, based on sex economic indicators? megan: in finance or in academia? because i've been in both recently. alix: the answer is yes to both. megan: i think you find a lot of women leave the workforce, particularly in the u.s., because they go and find kids -- they go and have kids and never find their way back. it does seem like it has to come more from firms and from policy. we have a social safety net in the u.s. we don't have unlimited funds, but i do think that would help. if you are also, asking women to speak up about not being paid equitably, you

are asking them to take on economic risk. we know that women are the breadwinners of 40% of u.s. households with children, so you are not just taking a risk for yourself, but also a risk for your family. have been a big new story this morning, and tariffs actually hit women harder because we pay 65% of the burden that hits households. if you are asking women to speak up about not being paid equitably, you are not fixing the system. you are actually asking them to take an economic risk. subadra: so ultimately i think it is about transparency in pay. how do you actually know you are not getting paid what you're supposed to be getting paid? katica: ask. alix: ask your peers or your boss? katica: yes. one of the ways i found that i was not being paid equitably is i asked my male colleague what

he was being paid. be hard to get that information. katica: and i was somewhere where you are not allowed to ask about the salary of your colleagues. under president obama, they did begin to loosen the restrictions. alix: i did not know that. information, it is just like in the u.k. where it is reported. that information is coming september 30 in the u.s.. associations handle this. the national association for business economics, they do an anonymous survey on what money you make and what industry you are in so they can sort of gauge. at least you have an idea on average of where you should be. ceo, katica roy, pipeline thank you so much.

subadra rajappa and making greene will be sticking with me -- and megan greene will be sticking with me. this is bloomberg. ♪

alix: we are just moments away from the u.s. jobs report. i am definitely watching the dollar. subadra rajappa of socgen and megan greene of the harvard kennedy school are still with us. how do you look at the dollar and how it is going to change with the rate market? i think it is definitely a big concern for the u.s. economy over time. the thing that is ironic is we've seen the steady strengthening of the dollar as the fed has been on pause, and actually delivered rate cuts. to me, i think that is going to continue to be a concern. yes, there's also more easing coming, so it is not the

situation now that only the fed is easing, so that interest rate parity is going to affect it. megan: it seems like growth potential is also a huge factor here. we saw the fed make a huge u-turn from rate hikes to rate cuts in a quick period, and the dollar hardly moved. it seems like the u.s. is the cleanest shirt in the early basket. subadra: i completely agree. if you do a six-month backup and see expectations, but patients coming into this year was for the ecb, if anything, do deliver hikes and begin slowing down next year, and then may taking in a pop -- taking a pause. marketssee the european doing work. if anything, i would say the global economy drags on u.s.

growth and not the other way around. that somewhat justifies a slightly stronger dollar as opposed to other global currencies. alix: what is your favorite trade right now? subadra: i think i like staying long duration. tuesday 10 -- i think the rally is going to be led by the belly of the curve. alix: subadra rajappa of socgen and megan greene of the harvard kennedy school. we are just minutes away from the july jobs report. we will break down what it means, next. this is bloomberg. ♪

alix: this is "bloomberg daybreak." i am alix steel. 25 seconds to trade until the job report. the dax getting hit hard on trades, down 2.5%.

the move you will want to watch is the bond market, the 10-year -49,yield in germany at off the lows of the session. the curve continues to plan in the news -- in the u.s.. .he jobs number let's head to the labor department where michael mckee has all of the data. michael: 100 64,000 jobs created in july. unemployment rate unchanged at 3.7%. wages have rise by .3, which pushes the annual gain to 2%. hours worked down to 44.3. revisions not 32,000 jobs off of the total. the biggest gainers continue to be health care. 50,000 jobs created last month. manufacturing holds in, 16,000 jobs, but only 6000 and construction raising the

question of whether it is harder to find the workers they need. retailers, another 3600 jobs lost. the sixth straight month retailers have said -- have shed jobs. another 5000 jobs were lost in mining. a big proportion of that is in oil and gas extraction, feeding into the story that investment is being curtailed in that area. there were 800 jobs lost in coal mining. 1400 jobs lost in metal fabrication. alix: michael mckee, stick with you. still with me is so broad showroom shopper -- subadra rajappa and megan greene. your initial reaction? megan: this was straight down the middle of what people expected and every month i feel it we are trying to figure out what the implications of trade are and it is not coming through as strongly as we expected. that train continues. what is interesting to me is the

senses was supposed to kick in in april and may and june and we were supposed to see this huge jump. we still have not seen it. is that because we are automating these jobs? it is weird that has not come through. subadra: this is as middle-of-the-road as it possibly can get. i do not see anywhere where things stand out. we did see revisions for last 123, then to participation rate went up a little bit. betweenings are still 3.1% and 3.2%. the trend is clear. you had 225,000 jobs on average last year and this year you start to see that trend toward 175,000. that has not changed. the trajectory seems to be toward a modest slowing in the pace of job creation. megan: we should expect that.

between 100000 and 150,000 is considered neutral. given where we are in the business cycle, still a pretty good report. are wages ok enough to offset a rise in consumer goods due to the tariff? megan: we just grew 3.2% year on year, that is good for this cycle. if you take the chart back further, that is pathetic relative to where we are the business cycle. real wages are still pretty low. the wage picture looks exactly as it has for this entire recovery. not getting much wage growth for structural reasons. even if we are getting a little bit, it is not beating through into inflation the way it used to in the day and that is because firms feel like they cannot raise prices for they will lose market share. the amazon affect. alix: we're still seeing the outperformance on the 30 year. what kind of numbers to we have to see for the market to think growth will not be terrible?

the long-term goods expectations? subadra: the focus is not on the jobs picture because it has been the shining star of the economy. at least what we know from this report is some of the underlying risks we could have gotten from a weak number are getting priced out. markets back to focusing on all of the other risks. tariffs, brexit, global geopolitical risk. that is where the market will shift its focus. michael: until 1:00 yesterday, this would have been an important report. it would have ratified are gone against the fed rate cut and the idea of a rate cut in september. now with the trade tariffs going into effect and the fact that this was a very mediocre report, not bad, not good, it will be quickly forgotten by the markets and they will move on to other things. alix: what do you think jay

powell thinks of this report? his entire plan was to run the labor market a little bit hot, try to get some of the labor report. in reading these jobs data do you see any indications that is happening? michael: there are some indications that is happening. jay powell said things are not hot in his congressional testimony. we are still running at a fairly strong pace for this for a long. they are still drawing workers in. we saw 1.5 million unattached workers. discouraged workers have fallen significantly, down 144,000 from last year. they are drawing people into the labor force and we are also seeing for some of the marginally attached workers at the bottom of the chain, the people with less than high school education, unemployment has fallen to 5%. that is a low number at this point, given where we are.

megan: if we are drawing people into the labor force or boosting the labor force, we have also seen a slight acceleration in productivity growth. you have to squint to see it, and it is too early to say it is here to stay, but those whose potential growth, so that is positive news. alix: what do you think? subadra: i agree with megan and mike. this is a report that is status quo for the fed. i think the focus is going to be on all the other events and the rhetoric around tariffs going forward. alix: i should point out that the boston fed came out and had a statement from the meeting on wednesday. one of the things he cites as low unemployment and stability concerns. megan, what is the bar for height and cut? you're looking at me like i'm crazy. how has that changed in the last 24 hours? megan: i thought you were asking

in terms of the jobs report, what is the bar, and i was going to say that does not matter. that is partly because the fed has changed his reaction function. was be -- jay powell was speaking about global factors. it is clear the fed is moving away from its central target and starting to think about some of these other things. it also opens the door to the president being able to be more of a hardball are in terms of negotiations. economists have come up with conspiracy theories. but it sure i buy them is clear the fed is looking at trade, which the fed can do nothing about. there is a question of whether they should be doing anything about that, unless it is job data and inflation expectations. alix: that is a reaction function from the fed that changed. how has the reaction function for the market changed? subadra: after the fomc meeting wednesday we saw hikes priced

out. now we are pricing in a cut for the september meeting and potentially more cuts. over the next year we could see three cuts after the cut we had this week. i think the market is going to lean on the fed to do more. that is what you are seeing in the market pricing, whether you look at the stronger dollar, the flatter curve, or the sharp repricing of rates. the message is clear. they want more accommodation. alix: so good to have you with you -- so good to have you with us. subadra rajappa. megan greene and michael mckee are staying with me. ,arnings had a nice beat upstream earnings also coming in stronger. the week part were the downstream earnings, down about 13%. not a huge surprise. all of the oil majors struggled with refining margins.

gasoline has been a negative in the last quarter and they delivered on production and upstream earnings. now i want to get an update on what is making headlines outside the business world. viviana hurtado is here with first word news. beijing vowing countermeasures if the u.s. follows through on the threat of extra tariffs to chinese imports. at a campaign rally last night, president trump said the proposed 10% tariff hike could go higher, to 25% or more. : until such time as there is a deal, we will be taxing the hell out of china. that is all there is. the chinese conference ministry saying president trump's terror announcement violates his agreement with president xi. in syria, government airstrikes halting after a truce went into effect hours after the u.s. secretary-general authorized

investigation into attacks on syrian health facilities and schools. has displaced more than 400,000 people and killed hundreds. it is down to the final three. the eu narrowing the field of candidates to the top job at the national lottery fund. christine lagarde resigning to lead the world bank. 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. alix: thanks so much. what do you think about the imf new chief? megan: it is interesting the europeans cannot come up with an agreement and their voting by email. surprised -- it shows the divisions between the europeans. if you think they will do

something like a union, they cannot even choose the next imf had. europeans are dominating the conversation this time around. emerging markets are a much larger share of world gdp. there are bigger share of financing. i am surprised it is not a bigger issue we do not have em candidates that will take it. it seems like we've all accepted it will be a european. alix: that is interesting. i wonder why that is. megan: the last time, when christine was chosen, there was a conversation about whether someone from india or china or brazil would lead the mf. alix: the pope is from argentina. you would think that would move to the imf. 60,000 jobs in july, wages stay stagnant. we will get a lead on that does he. -- wel speak to the ceo will get a lead on to see. check out gtv .

you can browse the features we do throughout the show. this is bloomberg. ♪

viviana: i am viviana hurtado in the hewlett-packard enterprise greenroom. coming up in the next hour, larry kudlow, national economic council director. here's your bloomberg business flash. apple and barclays dropping the rewards program from their longtime credit card partnership. the move comes ahead of this month's debut of a new applecart with goldman sachs. the card will offer 3% cash back on apple purchases. bankrupt utility giant pg&e reaching a deal with some of its power suppliers to cut the prices the company pays for electricity.

asked a judge to approve the agreement with canadian solar and energy. the company was blamed for igniting deadly wildfires in california and agreed to pay $1 billion in damages to local governments. shares of ferrari falling by the most in 10 months. the carmaker posted a slowdown in office growth and shipments. the shares halted from trading. the drop after a slight mix of analyst expectations. i viviana hurtado, and that is your bloomberg business flash. alix: time for paulo the lead -- time for follow the lead. today our focus is on wages and jobs. here to take us through is michael mckee. michael: we did see wage growth across a broad range of industries. -- which raises the hourly earnings to 3.2%.

changes, transportation and warehouse, which saw .7% gain. the big job gain was in health care. 50,000 jobs added but they only saw a pay increase of .2%. we are seeing some gains of hiring in areas that involve recreation and leisure. 10,000 jobs in hotels and food service jobs. there are areas where they are still looking for people. alix: does that come with higher wages? we will break that down. joining me is vinci property ceo. it is an experimental real estate investment trust that owns one of the largest portfolios of gaming hospitality , including caesar's palace. megan greene of harvard kennedy school is still with me. what you think of wages in your industry? industry is an industry

that employs about 700,000 people. the wage basis $34 billion. if there is a 1% increase, that is $300 million. we talk about a 3% increase, you're talking about nearly $1 billion of incremental wages. billions in that sectors available for consumer discretionary spending. megan: we have had strong consumption in the u.s.. gambling and gaming are different beasts from most resort activities. does that mean you're insulated consumption start slowing down? ed: it is a remarkably resilient sector. as a consumer discretionary sector, if we take the most apocalyptic case, the great financial crisis. 18%500 revenue went down through the great financial prices. gaming revenue declined at half of that rate. ,f you going to retail gaming

which constitute 70% of american gaming, same-store only went down 3.9% through the great financial crisis. if we are talking about a garden-variety recession, this is a resilient sector. megan: if you own property, you have to love jay powell. how much does a 25 basis point cut affect your acquisition plans? is it changing the metal? -- is it changing it at all? .d: it is very positive for us it will lower our cost of debt and when our cost of debt goes lower, our cost of equity follows accordingly. megan: do you think you make different business decisions or is it a cost of capital thing? ed: you want to be careful about using a lower cost of capital to do what you normally would not do in a more prone to environment but in an environment that calls for greater prudence. it should be a good property, a

good operator, and a good lease. needless to say, when money is cheaper, it tends to act as a greater lubricant in the market. consolidation, how you see that playing out and what does that do to hiring and all of that stuff? ed: there's obviously a lot of consolidation going on. we are a participant in the biggest deal, the el dorado acquisition of caesar's. that will mean certain job losses as they go for cost synergies, but those will be at the management level. at the property level, what you will see in this particular case is an empowerment of the properties and their managers to get deeper and deeper into their marketplaces and engage more with their marketplace, which should read to 11 -- which should lead to revenue growth and job growth. alix: look kind of people do you hire and what you look for?

how readily available are those people? ed: you look for people who most want to interact with the guest and see service as a chance to be a host. there are a lot of people attracted to this. went to higher in boston, they had 100,000 applications for a few thousand jobs. it is a sector that is very much like show business. you put on a show every day and are a lot of extroverted, energetic people. alix: that's how i live my life. megan: sports betting is the latest greatest opportunity in gaming. how much opportunity do you see? ed: a lot of opportunity. last fall, the most active sports betting environment was mississippi. sec football games are taking place on saturdays. sundays in the fall, new jersey was the most active sports

betting environment. people are quickly realizing that they had been scorched manage previously and had to do so illegally, they cannot do it legally. you hear stories about new york residents who establish sports betting accounts in new jersey, traveling to hoboken took place a bet. that is how much they want to participate. alix: appreciate it. great perspective to have on jobs. vici ceo. megan greene of harvard kennedy school be sticking with me. coming up, chevron and exxon delivering on production. what that means for developments in the permian. if you are jumping in the car, check out bloomberg radio heard in the u.s. on sirius xm and on the bloomberg business that. this is -- on the bloomberg business app. this is bloomberg. ♪

alix: where watching a bunch of stuff. i am watching what is happening with chevron and exxon. both of these players talked about output in the permian increasing versus shell companies over the last 24 hours that have been decimated because they cannot make the production targets because they are spending too much. megan: this output increasing is important. it looks like we are heading into an oversupply of oil and that should put downward pressure on oil prices, which has interesting implications for the economy. the tale end for consumers is strong. it is a head wind in terms of business investment. we have seen investment has fallen if you strip out anybody who is not in the oil patch. alix: that is interesting, and a lot of those players have to wind up going bankrupt. that is what i'm watching. what are you watching? megan: it is national ice cream sandwich day today.

sorry. [laughter] megan: that is the most important thing today. beyond today, i would say there is chinese data coming up next week. inflation data and foreign reserves in trade data as well. we will get a sense of how they have been responding to trade, even if it is a backward looking indicator, and then there's a ton of central bank activity. india, have rate decisions coming up and we're expecting them to cut across the board and that should a implications for the u.s. dollar. reserveserested in the because we talk about currency manipulation, but they've been trying to support their currency. megan: that's right, and in terms of how much they will have to throw at keeping their currencies in check. we are clearly in a global rate cutting cycle, even if jay powell is saying it is not a cycle, i think it is probably not one and done globally and the trend is toward easing.

alix: are other point is that it is national ice cream day and apparently there's something called mustard ice cream you can get in brooklyn. megan: today and tomorrow in the hamptons. it is made by french is and is a limited edition. alix: mustard ice cream. megan, it has been so great to have you on set. megan greene of harvard kennedy school. up on "the open," larry kudlow, national economic council director will react to the jobs report. a huge rally in the bond market in europe. here in the u.s., continuing on a goldilocks job scenario. this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, the payrolls report in line with expectations. signs of weakness abroad hitting hiring. the white house announces more tariffs on chinese imports, providing more fuel for global bond markets, driving 30 year bund yields into negative territory. here is your friday morning price action. the s&p 500, four day losing streak. futures lower .33 percent. in foreign-exchange, the euro stable. euro-dollar does nothing. in the bond market, unchanged after a massive rally in the last 24 hour. your 10 year is 1.89% on a 10 year treasury. let's begin with the big issue. trade policy with soaring wall street. >> the trade tension will escalate. >>