francine: the u.s. rocked by riots after the killing of george floyd. president trump meets with national security officials and governors. andident trump stop shorts -- stops short of new security measures. rise as thecks continent read open -- reopens. than half of more

parents will keep the children home. welcome to bloomberg surveillance. a lot going on in the markets. we have several markets closed because of the german holiday. in atnufacturing coming 39.4, touch below estimates. we were expecting 39.5. the impact on the euro is pretty minimal. the focus is what's going on between the u.s. and china the focus on the rally. investors are shrugging off this political unrest in the u.s.. followingng at dollar with treasury. u.s. is planning and expanded to 17 in the autumn. he says he also would like to invite leaders from russia and

south korea. inclusion of russia is likely to be the most controversial. it was suspended what was then the g8 when it annexed crimea. south africa emerges from its lockdown. proposing a range of measures including hedge fund and financing for structure spending. they say there are limits to what central banks can do for the economy. because they've been useessful, then we can central bank to solve our problems. >> do u.k. government coming under pressure in easing the lockdown. said public experts

faith has been damaged by the saga. they defended the decision to loosen restrictions saying scientists not always agree. two american astronauts aborted the international space station from a spacex capsule for the first time humans are traveled to orbit on a commercial spacecraft. musk. big win for elon --the first time u.s. pilots u.s. assets of loan from u.s. soil since 2011. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. violence erected in dozens of cities across the states following the death of george floyd after a white police officer pressed a knee into his neck. some demonstrators broke off to

rampage through shopping districts and set fire to police cars. the chaos in the otherwise peaceful protest comes as america works to recover from the coronavirus pandemic which shut down economies which resulted in tens of millions of lost jobs. leslie, the figures and what happen last week is truck -- is shocking with the killing of this black man. how will this change the narrative in the u.s.? >> i think what it's done is brought race back up to the center of the debate and what we have been seeing is the discussion of the 100,000 deaths in the pandemic and climbing, the 40 million who have registered for unemployment benefits, but now race is right back on the table after protest across 140 cities, police brutality back on the table in a

major point of discussion. and a president and a white house, on friday night he spoke about the who and pulling the united states out, yesterday he went silent. tohas used twitter feed really inflame and divide the country but he hasn't taken a leadership role, he hasn't spoken calmly to the country. several months, the role of race is going to be at the front of the agenda as we run up to the november election which is a very long ways away, but i think that will be at the center of the debate and certainly as we think about the -- with vice president biden it will be, that will weigh a lot into biden's decision. trump saysresident he will meet with attorney general william barr the white conferenceonvene a

of governors and law-enforcement officials. what can he change? >> what he needs to do is try and demonstrate unity across the country working with the governors. storyvernors of been the in the pandemic, they have taken the lead in putting forth the measures for shutting down the economy come for reopening them. they demonstrated leadership and -- in coordinating internationally and nationally. he needs to work with them not only on the question of reopening the economy which is so critical now but now on this question of protesting. 140 cities protesting. a number of curfews we haven't seen since the late 1960's. this is an extraordinary moment and you've got to bring stability and recognition of the devastation that's taken place and the tragedy surrounding police brutality and the violence in the death of george floyd. francine: how will this play

into the election? november is a far time away from now. >> it is. as we've seen in the polling right now, in the popular state-by-state but polling has joe biden ahead overall by about 10%. but even in florida he's up by about 4%. a little bit less so in wisconsin. that could change a lot, but right now we've seen him come out more onto the national stage talking with protesters, he's made a statement and so i think it plays to the strength in the short term to say. to asof it will come down a vice president joe candidate there'll be a lot of desire freedom to choose an african-american female.

we are months away from metal action, so much we have to do with what happens in the economy as we begin to see that reopening, what happens with those unemployment numbers, we are at percent right now. does the economy restart, is there a second wave. as we get november there will be a real -- real question. so there's a lot at play but at the moment, president trump has to demonstrate that leadership if you wants to bring his numbers back up. francine: according to bloomberg , tensions between china and the u.s. on the rise. i don't know that having huge impact on the markets. we will look at the markets. the fact that there was so much fury over this, the way the

death of george floyd came, this as black americans are dealing with additional proportionally heavy impact due to their health and finances because of the virus spread will this be addressed in any way? >> the coronavirus crisis in the united states and frankly in many parts of the world have demonstrated a grave inequality come in the u.s., that is expressed through racial divides. black americans have suffered unemployment, death, at rates that are disproportionate to their percentage of the population. i think it will mobilize the african-american vote in the united states, especially for feel inspired to turn out for the candidate. what's going to become a major theme in the election, candidates are going to need to discuss what they do to solve the endemic structural

inequalities that are experienced african-americans. white americans are going to look to see that, as our black americans. it will be the number one issue going forward. francine: can donald trump be reelected without black american support? >> as we know, this is an election that comes down to certain swing states, the question is whether the african-american vote turns out and if they turn out in support of the democratic candidate, that will really tip the balance towards joe biden. it will be harder for the democratic candidate to win the election without the african-american vote. that's the lens to think about this through. on this breaking news. china set the whole u.s. soy imports as tensions are rising.

is it good for donald trump to look like he's picking another big fight i had of the elections? game becomesblame such an incendiary issue in the united states. democrats are playing it, republicans are playing it. needs to be some stability in that relationship and people will see this, not only clearly on the need to maintain some sort of economic stability, but as we begin to talk about coordinating body vaccination and pushing for greater changes. the other move over the last few days was donald trump saying the g7 will meet in september, it will be the g10 or 11, he's inviting australia, south korea, india and russia which is base the complicated one. but there is a move now from the president to try and build a

coalition, he's bringing in asia's democracies to develop some sort of concerted response to what he sees as this very grave threat from china. the need to dial it down is absolutely critical to maintaining the level of exchange that's inevitable and important. this debate is part of the agenda as we move into the election cycle. francine: thank you so much as always. head of the u.s. and americas program at chatham house. an exquisite conversation shortly after. we have plenty more after this break. our bloomberg reporter says china may halt u.s. soy imports. this is bloomberg. ♪

francine: economics, finance, politics, this is bloomberg surveillance. let's get to the bloomberg business flash. renault is looking to diffuse a situation at its factory in the northern france. the action erupted after the company announced a sweeping cost-cutting plan and do reduction of about 46,000 jobs around the world.

the european union will charge 70,000 companies access to the u.k. market -- to the market. new reports say no alternative for the revenue to service the eu's debt. theus is reassessing as pandemic continues to lower the demand for jets. they will discuss productions of the company's top-selling a320 narrowbody which was cut by about a third in april. that your bloomberg business flash. let's get the latest on the u.s. china story. ofsident trump stopped short fully escalating tensions between the nations. seng rose after the

president's lacked specifics. joining us as a chief asia -- is our chief asia economics expert. china is now set to halt u.s. soy imports as tensions are rising. can this be contained? only last week we had the national people's conference cingulate standby. respondow china might to the ongoing tensions with the u.s. over hong kong and other issues. his indication perhaps there be -- there may be some rethinking. analysts are questioning whether

the trade agreement could even be met with what's happening with both economies. tension continues to simmer. when do we get details? when do we know what this entails? >> that's the critical detail. the national people's congress is authorized for a new law to be drafted on national security for hong kong. critics say it will be an explicit erosion, china says national cash important for national security which will depend on how both sides respond or react. theses no indication

tensions are going away anytime soon. evenkong remains in play the president trump stopped short of specific measures on hong kong, still has the power to do so. festival facet of the relationship with hong kong. retaliate ond yet china via hong kong. there is a sense it remains in play. it depends on what president trump decides. up's currently 7.135 two the u.s. dollar. when are we expected to find out more on what president does next? calls or kindany of communication scheduled in the next couple of weeks? to see iflooking

either side communicates they are in talks. on the u.s. side they're probably waiting to see what happens on the national security level. you have to wait and see how the protests involve in hong kong. pointsre various trigger , but i think there's a broader byse now it will be driven development of the election cycle, from the china side, there's no indication there is a circuit breaker. much will depend on how the u.s. responds in the coming weeks. we have china retaliating intern -- in turn. francine: thank you so much, our

chief asia economics correspondent. i'swill also speak to huawe vp for europe. this is bloomberg. ♪

francine: this is bloomberg surveillance. , she saysthe latest

she doesn't think the federal bank decision on yield curve control. >> i think the yield curve is so maybehe short and it's not necessary to do something to emphasize it. i don't want to take it off the table is something that has the potential for me to think about. i just don't see that we needed here in the space. it, i we were to use would view it as a reinforcement on the short end. inncine: mohammed allaire warns by taking rates negative, the fed would risk creating markets that no longer send accurate pricing to efficiently allocate capital. this is what we are looking at later. we will speak to executive vice

president margaret bes. huawei andk about its rising tension between the u.s. and china and the impact it's having on markets. european stocks not gaining as much as earlier this morning. favords are in the euro's according to one of our toategists when it comes digesting the manufacturing for may. we will have plenty more on the markets and china. this is bloomberg. ♪ ♪

francine: economics, finance, politics. this is bloomberg surveillance. let's get to the bloomberg first word news in new york city with ritika gupta. is -- government officials are asking major --icultural companies including -- as beijing is valuating the ongoing escalation of tensions with the u.s. the move threatens to derail the trade deal between the world's biggest economies. in dozensas erupted of u.s. cities following the death of george floyd. protests have ranged from being peaceful marches to setting fire to police cars and government buildings. president trump is blaming the riots on antifa, a movement of left-wing activists. he declared the group a terrorist organization. opec and its allies are discussing a short extension of -- bringing forward its next meeting on june 4. the group may extend the curve

for one to three months, a delegate told us, as the market is moving so for, a president for short-term measures. american astronauts have boarded the international space station. it marks the first time americans have traveled on a -- it is a big win for elon musk and it is the first time american astronauts have flowed from u.s. soil since the shuttle program ended in 2011. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, ritika gupta. this is bloomberg. francine? francine: thank you so much. we have data out of the u.k. and data out of hong kong. let's kick off the u.k. -- u.k. manufacturing ami a touch better than expected, and if you look at hong kong, april retail sales , the value coming in at -36

point 1% year on year instead of the estimated -40. it is not moving currencies that much, but just a little bit of a brighter spot than expected, in hong kong and the u.k. european stocks trading hider today as confidence opens up. speeding up lockdown procedures as schools reopen, but a survey half of parents will keep their children home. sebastian, great to have you on the program. first of all, it seems that no matter how many protests there are, no matter how much concern there is about u.s.-china, and no matter the concern about the second wave of coronavirus, equities are going up. what are they looking at? is it central banks? >> that is a good question, the q question at the moment. a lot of people are scratching their heads and saying how is it possible. economy is rising and yet

the equity market is up 30%. that is exactly what you should expect because what matters is not so much is the economy in a bad state or not. the question is, is the situation getting better or is it getting worse. we see a clear inflection point in the cycle. activity is now recovering because the virus, the economy is being reopened and that what is what equities are pricing. activity is starting to pick up. you see value, or are you expecting corrections? the rally is think justified and it has further to go. way's a single -- a simple of thinking about it. the main driver of the european equity market is the rate of change in the pmi. the pmi is still at a depressed level of 30. the market, after an almost 30%

rally has gone from 30 to 40, at the key thing to remember, pmi -- if activity comes back, the pmi should rise above 50. but the market is only apprised to be at 40. if it rises as we expect, that is consistent with another 15% upside for european equities, so we remain positive on the market. where do you -- francine: where do you see the most value? is there more value in the western economies, or do you worry about the u.s.-china trade relationship? sebastian: we expect to see roughly as much upside for the u.s., but the main determinant relative to performances the dollar. the dollar has benefited tremendously from the spike in global uncertainty to an all-time high. the uncertainty index phased in

the risk premium that had to be priced out of the dollar. it is good for yen, good for commodity prices. within the european equity markets, we have a lot of investors clinging onto the recession plays effectively growth, and the farmer sector which has done tremendously good after the last two years. we think there is a limitation that has already started since the middle of may, with financial sectors outperforming and how it followed that high-quality names underperforming. we think this rotation out of --rma into financial terms financial returns has further to go. francine: i understand that you are the head of european equities, but some have more exposure to china than others. how do you break that down depending on how global some of the companies you follow are.

sebastian: the question really is that, what is the main swing factor at the moment? you clearly were concerned about the u.s.-china trade war. from our perspective, it is likely that the dominating story over the coming months is not going to be an increase in tensions on that front, especially if you think about it coming during the trade war, most of the trade war comes from the u.s. side, and they could afford to do that because they had a very strong economy to fall back on. it is unusual for an administration to engage in actions that we the economy in -- i'm notto convinced that the dominating story over the coming months will be an escalation in that conflict. far rather, with a depressed economy released from its shackles -- a lot of the activity that we have lost is set to come back, so i went to

focus on the region that benefits from a continued pickup in the economic cycle, and these are some of the cyclical plays, some of the cyclicals are based on china, but i think it will still benefit as economic activity picks up from a very depressed starting point. francine: thank you so much. sebastian raedler, head of european equity strategy at bank of america merrill lynch. most businesses will restart and an additional 8 million people can return to work. the country's central banks as -- early -- earlier the country of south africa's head of the reserve bank given axles of interview. >> this is what the full opening of the economy as the government has set out, it is featuring a risk-based approach.

of as a matter of including the -- gross domestic product, including the consumer price inflation, and as the economy opens up, we do have a meeting scheduled in july, and by the time we get there, we would have seen enough -- >> that being said, the mist to the role of central bank are in play, but is there conversation about broadening the mandate, changing the mandates of the central bank can respond to the needs of the south african economy? there must be lots of central banks globally asking themselves

what is the limit of our action here? you -- we do not -- the is set out price the instance of growth in the public, and we have taken this to provide relief. disposal,truth at our as the role takes place around the world and south africa is no exception. very clear.e there are limits to what the government can do. ,here are institutions designed

makingis important in decisions about lending and borrowing. we are now sustaining in that spending -- the identity is very important. this is taking place around the world, and many central banks are engaged with this discussion. but i think that it would be wrong to direct government information because they are run by technocrats. >> let me ask you about things that the central bank can do. you currently have a 3.5% spread

spread over 3.5% the south african repurchase rate. is that something you're looking to change? are you interested in bringing that down to increase the cost of funding to the real economy? >> i think we know what the limit of our actions are. we are very good at dealing with issues of financial stability, and we have been good at that. in the evidence around the world we can be exemplary in dealing with those particular things. because of the mandate, there are unrealistic spec tatian's unrealistic-- -- weations coming from

tonk that we can use that solve problems. francine: that was the governor of the south african reserve bank, speaking to us earlier. coming up, we will speak with huawei's vice president for europe. that conversation is up next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." let's get

straight to the bloomberg business flash in new york city ish her ritika: renault looking to diffuse the strike at its factory in northern france. the carmaker says it has no plans to shut the site. the company announced a sweeping cost-cutting plan including a reduction of around 14,600 jobs around the world. union are set to get underway tomorrow. amazon and apple -- the e-commerce giants have scaled-back deliveries in areas including chicago and los angeles. apple has reopened about half of its 200 70 stores following the coronavirus pandemic. most of them were closed on sunday. the protests sparked by george floyd's death in police custody. and according to analysis by a think tech, iq, that's a think

lost iq, the company has jobs. the only reason for the cuts, it has caused a domino effect from everything from rent to mortgage payment. that is the bloomberg business flash. francine? francine: thank you so much. let's have a conversation as the u.s. relations between the u.s. and china continue to be strained by hong kong, and huawei is coming under increased -- developing mobile network systems to reduce reliance on the chinese tech giant. joining us now is abraham liu. thank you so much, abraham, for joining us. we have had a combination of a , getting the u.k. extradition case against the cfo thrown out, and also the

hardening against huawei. what can huawei do next to make sure that people loosen up some reservations that they have. abraham: good morning. actually, this is proven that huawei is, in terms of the quality of service, we have been a good partner. i think this has been proven, but we are in the -- we are under an unprecedented situation disaster,a natural but we are also under a storm of .eopolitical uncertainty and actually come as you e.u. or u.k.

governments have been factual based, and according to the statement from a u.k. government, the reasons they , we made their decision maintain confidence that we are able to continue to serve our customers in europe, in the european union. francine: but the u.k. come have you been given any assurance from the u.k. that they will not look elsewhere for 5g? >> i think europe has made the decision based on the u.k.'s interests. -- you look at their decision making, i don't think there is any major chance. of course, you talk about the global pressure from the u.s. side. geopolitical the

-- you oversee the global supply somehow in this situation, but decoupling the supply chain is not an anyone's interest. the most global coordinated industries. is notply chain practical. winnersook at all the across the continent, the u.s. and china, they share the same supply chain. in the same with global services. that --: do you believe the supplycoupling chain is going to come, but it is going to spread to other industries as well. believe thatyou

because of huawei's position as a major international vendor of critical infrastructure, because of your close association to the chinese government, that huawei will have to get smaller within the next three years because government will shun away from you? i have to make it huawei is ar that private company, and our relationship with the china as a europeanseen company like erickson, their relationship with the chinese government. our compliance with the law is the same here in europe as in other countries. we have to obey all the local rules, international rules, including the u.s. rules. so that is our -- we are a global corporation, and i think that is the cornerstone.

the u.s. toward huawei is a challenge. theei's development, in past 20 years in the western key reasonsof the to support our success apart ,rom our innovation capability apart from our service to our customers, is basically full compliance with rules. in this, they will have to continue. with the challenge, checking from the u.s. government, they u.s. -- its -- the is threatening to industrial players. in the international players will share the same -- also there supply chain will be in

danger by political tactics. francine: thank you so much, iu.aham l u.s. equities have gained 36%, but with social unrest sweeping the country and disrupting plans to open, we talk about how the markets continue. that is our discussion next and this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance. the equity market now has to navigate sparking civic unrest. joining us is dani burger. do the gains look sustainable from here? dani: if you are putting it in the context of what unfolds over the weekend, it is hard to put into words the anguish that is gripping the country, and perhaps equally as hard to what is going to be the impact of this because it is a human story at this point. strategists, one thing they are discussing is the scope of gains that we have seen since the march bottom, that 36% increase

really putting investors at a point where their hand could be exposed ahead of potential landmines. jobay, the talk about 40% losses, 40 k or less, that means a lot of turmoil within markets and a lot of political risk as well pricing in october volatility around the election. for now these gains are looking a bit auspicious. francine: thank you so much, dani burger with the latest on the markets. this is what the market is looking at. the focus is on a lot of the figures and the pmi's that we got. this is bloomberg. -- bloomberg surveillance continues in the next hour. tom keene joins us from new york. this is bloomberg. ♪

francine: the u.s. is rocked by

riots over the killing of george floyd. thousands protest across the nation from los angeles to new york city. president trump meets with national security officials and governors today. they hangs in surges after president trump stopped short of specifying tough sanctions on beijing. pmi data shows china's recovery continues. an exclusive conversation with the commission responsible for thecing euros spent on pandemic. our conversation with margrethe vestager is coming up shortly. this is bloomberg surveillance. is, the focus for me today actually on everything going on in the u.s. this has to do with the huge protests we saw over the weekend, and i cannot match that up with equities continuing to rally. i think a lot of the conversation will be on how markets are reacting, the upheaval in the u.s. tom: t