>> the kind of economic activity we are seeing is somewhat unprecedented. >> the inflation story, may be at peak in june. >> it is impossible to craft a story where inflation comes neatly back down to 2%. >> inflation goes up, the dollar strengthens. >> in europe i think the worst case scenario is priced in. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: this is bloomberg surveillance on tv and radio

alongside tom keene, i am jonathan ferro, together with kailey leinz. bramo back we hope next week. tom: we heard from a listener in nepal who has seen her, she is at everest past camp two. she is not near the death zone next. from the gentleman from nepal, he thought you and i were on speaking terms. jonathan: will get an update from bramo hopefully later this week. the dollar is weaker, the euro stronger. tom: help me with the parlor game on ecb. are we having a parlor game on how much christine lagarde will lift? jonathan: according to sources may be 50 basis points. how small is this window for this ecb to hike interest rates given what people think will happen with growth later this year and given what may or may

not happen next week on thursday when nord stream one was meant to come back online. the european commission said "we don't expect it comes back." tom: in addition, the window of the heatwave. you assume that what we are seeing once in a century, once-in-a-lifetime in england diminishes economic growth? kailey: i am -- jonathan: i am not a meteorologist so i will not assume anything about the weather. in london if you do not have air conditioning i imagine your activity would be lower than it otherwise would be. tom: i was thunderstruck at 25 degrees celsius at night. doctors say that is the most important thing, that is an unimaginable 77 degrees in london at night. jonathan: brutal. one more day of it in that it will get cooler. it gets hotter here in new york city. tom: we will go next week. jonathan: put that in the diary

after frankfurt. and where did you want to go? rome? tom: i think we should go to rome and make sure mario draghi is ok. jonathan: next will go to the west case. we want to see netflix is ok after the bell. kailey: the stocks are down more than two thirds on a year-to-date basis and we expect they lost 2 million customers in the second quarter. the real question will be does that get better in the third quarter and how they go about monetizing password sharing. there was news in latin america if you want to add an additional household, they will charge you. netflix trying to figure out how they can bring those dollars in. jonathan: let's keep it on tech and go to apple. it is slowing hiring in some places next year. kailey: it is interesting how it was able to turn around sentiment in the entire market given it is only some teams. it is slowing hiring, it is not outright job cuts.

we have to take into conjunction what we have heard from other big tech companies that is slowing hiring or at least in the case of microsoft cutting jobs outright. it adds to the signal that even these tech giants that are insulated from macro economic pain are still preparing for it. jonathan: tom, you will love this quote from goldman, we have made the decision to slow hiring velocity. have you ever heard that one? tom: one of the biggest arguments i've had in the history of bloomberg, and you know i have daily arguments, was over the language of fire rings, layoffs, job cuts, and everyone is struggling for new phrases. jonathan: why do bank executives have to say things like that? what does that mean? we are slowing hiring velocity? kailey: i thought tom was going on a rate of change, second derivative. jonathan: that is what they are trying to say.

[laughter] tom: we would never get that from bramo. she is calculus free. kailey: tom made me do a calculus primer. real story. tom: javier blas, i am writing it up in real time. javier blas, the giant. france electricity has something called baseload, up 891% since the end of 2020. jonathan: we have things to do. futures up .7% on the s&p, on the nasdaq up .6%. i want to hear more about this calculus course. yields higher a little bit. euro stronger, the dollar weaker. crude, let's call it unchanged, $102.41. kailey: still in triple digits. calculus is not in my agenda but there's plenty else going on.

at 8:30 we will get housing starts and building permits data. i am more interested in this and the light of the fact we saw homebuilder sentiment following to the lowest level since may 2020. the chairman of that nahb survey saying we saw higher costs and higher rates meeting we are seeing a slowdown in construction. then after the bow, netflix will be reporting second-quarter earnings. 2 million losses on subscriber is what we are expecting. it does not get any better in the third quarter. how they monetize more given all the password sharing? that stock is down 60% on a year-to-date basis. the ultimate crypto plug. all day long the bloomberg crypto summit will be taking place in new york and we will have bloomberg crypto at 1:00 eastern. i will be moderating a panel at 2:30 eastern time.

i know you will be tuning in. tom: i will break the surveillance snap. i'm looking at jack mailer. he has the hoodie on. do i need a hoodie? jonathan: i have no time for that. i will not comment. tom: this is the price of having kailey leinz on. we have to flog crypto morning. jonathan: i am happy to do that. the port folio manager for the blacklock global allocation fund joins us. you been conservative. you have not been constructive. has any of that changed? russ: i think the short answer is not really. we are still in an environment where we have had. we have had tightening liquidity which has been a huge headwind. you have a slowing economy. these have not gone away. i would say valuations are much more reasonable plays than they were 12 months ago.

globally ec multiples compressed around 30%. i think we are close to a bottom. the market is in the process of making a bottom. all of the conditions that led to the volatility, they have not gone away yet. tom: julian emanuel gives me the first look at 11% of spx earnings. he has a nice inflation revenue lift, but critically he is modeling out earnings at 4.8% growth. that is not bad. i know things are down. is the pendulum overestimating the gloom? russ: you hit on what is the big issue going forward. i spoke about valuations. that has been all of the losses year to date, all of the loss on the s&p. what is the issue going forward now is how much is the economy going to slow? how much is nominal gdp going to slow and what does that mean for

earnings. earnings for the second quarter do not look that. the real question is if we continue to see the result of fed tightening as the economy slows, all that -- are those earnings estimates realistic and this is why think the market is struggling to break out of this range. kailey: if equities are struggling to break out of a range if you are not yet seen the signal we have reached a bottom, how much do you like treasuries? russ: the short answer is we really don't. we are still underweight. we dislike them less than we did a year ago. we have seen the real rates have gone back to where they were in the post-gf see environment. i still think you might have more pressure as the fed continues to tighten. in u.s. high yield for the spreads are widening considerably.

if we are in an environment where equities will be choppy over the next several months, one of the things you can do in your portfolio is at income. we are starting to see better value. jonathan: are you making an assumption about how sticky inflation might be through the next several years, not just this year? russ: we are certainly assuming it will be difficult for inflation to get back to the 2% post gf see norm anytime soon. at some point while the fed may have to slow down, we are not envisioning a world where you will go back to this very easy environment of low interest rates qe, which obviously was a huge tailwind for financial assets and the better part of a decade. jonathan: good to catch up. works closely with rick rieder at blackrock. getting a little bit more constructive on credit. take a listen to this. it is the bank of america fund manager survey.

the quote was i'm am so bearish i am bullish. record low growth expectations, record low profit expectations. equity allocation the lowest since 2008. cash levels the highest since 2001. it is packed with doom and gloom. tom: absolutely mediocre world-famous mutual fund with garbage performance in their almost 9% in published cash. that is a rare occurrence. jonathan: what you make of the line things are so bearish it is time to be bullish? tom: that is part of it. we have not seen the catharsis. nevertheless, many of the tea leaves you look at on mood are pretty grim. jonathan: we will put that question to sebastian page, the cio of t. rowe price coming up very shortly. futures positive .8% on the s&p,

a lift again on the nasdaq. the lift yesterday morning did not stick. it faded pretty quickly. thanks to mark gurman for his write up on apple. we will keep talking about that. from a beautiful new york city, good morning. this is bloomberg. ritika: keeping up-to-date with news from around the world. the field is narrowing in the battle to replace boris johnson as british prime minister. rishi sunak and penny more that where the top two candidates. another vote will whittle the field from four to two. a drive in the senate to pass $52 billion of grants and incentives for american semiconductor makers has picked up steam in congress. chuck schumer says the democrats and republicans are hatching out the final details. legislation is a scaled-down version of a larger bill intended to make the u.s. more

competitive with china in technology. nancy pelosi reportedly plans to visit taiwan next month according to the financial times which says there are divisions in the biden administration over whether nancy pelosi should make the trip. in april china said a plosive visited taiwan would be a malicious provocation. twitter has dismissed elon musk's complaints he does not have enough information about spam and robot accounts. the company called it an irrelevant sideshow and urged the judge to hold a trial as soon as possible over mosques cancellation of the takeover. ibm lowered its forecast for cash flow over the stronger dollar and the loss of business in russia. that overshadowed results that beat analyst estimates. demand for mainframe computers and cloud services remain strong. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg.

♪

>> this president has pledged to do all he can, you heard him say

that yourself, to ensure we have an ample supply of oil to ease inflationary pressures, particularly at the pump. jonathan: that is jared bernstein, white house council of economic advisors. we are south of $4.50 a gallon, the average gasoline price in america. they have been falling since the middle of june. tom: other commodities. i am looking at chicago copper. a stunning statistic. even with the worry of the food crisis and david malpass coming up, even the brains are somewhat quiescent as well. jonathan: are they getting less greedy, those companies? they decided to be generous and just bring prices down. tom: i have no idea what this headline means. heathrow refuelers to go on strike. that is another inflation strike?

how much worse will heathrow get? kailey: it is hard to see how it cans. you already have them restricting capacity. they have been dealing with labor issues and alice strike of the people who want to put the fuel back in the planes, i cannot imagine that helps with the delayed cancellation situation that one of the busiest airports in europe was already dealing with. jonathan: a test run later this summer, tom. tom: still constructive even off the apple gloom yesterday. emily wilkins of bloomberg government with us right now on a washington brief. we have the texas grid struggling. we have heat across the nation. washington is used to the heat. how is the heat affect the politics of the white house? emily: they don't call washington the swamp for nothing. at this time of year it feels like it outside.

biden, when it comes to energy it is interesting to see the two sides he is dealing with. yes gas prices are coming down but they are still higher than most americans are used to and it is still an issue for the democrats trying to get the prices down as well as going into november with the elections when i talk to voters outside the d.c. bubble that is one of the most common things they bring up. the other side he is now praise -- now facing pressure from the left from democratic senators who met with the president and said if this plan we had with joe manchin to get a number of tax credits for clean energy is off the table, you need to go ahead and declare a climate emergency and this would open the funding gates for biden to be able to use funds on clean energy, potentially restrict the movement of fossil fuels, ban offshore drilling, there will be a number of revenues open to him if he decides to go that route. we know the washington post has reported this is something the white house is considering.

we do not know when an announcement will be made. at this point congress is throwing up its hands saying we cannot do anymore legislation on climate. jonathan: that transition, has support for it gotten stronger or weaker cross washington and the country given what has taken place over the last months? emily: it has gotten weaker because folks realized gas prices are the number one short-term concern and there is a big push to address that in the short term. at the same time you have a lot of other folks saying look at the recent reports we have seen, look at the warnings from climate scientists, we need to address climate. that is one of the main things president biden ran on, one of the main things he won on, now he is facing pressure from voters inside his own party, if you want our support and decide to run for president, this is an area we need to see real action on. kailey: obviously there is the supply-side challenge when it

comes to oil, the administration trying to address that, there is also been a consistent supply-side challenge when it comes to a shortage of semiconductors, it seems who are making some progress on that on capitol hill? emily: we are expecting a procedural vote later today on a package that has more than $50 billion for semiconductor manufacturing, encouraging companies to come to the u.s. and produced these chips in the u.s.. we are starting to see blowback. the washington journal op-ed board noted with semiconductor industry is not where it was a year ago when this legislation was first negotiated. you are starting to see the industry have supplied meet demand better than you get. the editorial board suggested this could be a case of corporate welfare, giving money to an industry that might not need it. it will be interesting to see if that becomes a factor for some of the senators who will be placing these procedural votes. right now the one message we

have heard from a lot of lawmakers as they think this funding is important. a lot of them can type back to industries within their states. it is a bit of a question on how this will play out but right now support within the halls of congress remains high. jonathan: emily wilkins, thank you. rare news for this president. at 35 day slide in gasoline prices. good news for the president. tom: i do not know how it will turn over at the polling. front and center for the zeitgeist is joe manchin and the stasis we have slipped into. given the heat, and i believe for the next five days in new york city it is what i will call seasonally hot, not like the crisis in london. i wonder how they will be overwhelmed by events, including market events? this is incredible. this is a bridge, john went to see full of manchester united

about 12 years ago and jumped off the hammers with bridge -- the hammersmith bridge into the thames. jonathan: that is not what happened. tom: you are pushed off. it is an impaired bridge and they are wrapping it in foil. jonathan: i try to go south of the river. do not use the hammersmith bridge. an amazing picture of what is happening. any to say? you're very excited. tom: i am not excited, that is the wrong word. the tail risk of that he is in france, it is supposed to be 100 degrees in paris, but it is shocking what we are seeing in london. jonathan: it is rare to get days like this in the u.k.. i understand it will fade after today it will get back to something more seasonal. at least for now. are we done? tom: i will look at j&j.

kailey, thank you for that. kailey: you had second-quarter covid revenue up more than expected. the estimate was for just south of 223 million. the real headline is they have cut their full-year earnings view to $10 and $.10 a share down from the previous view of $10.15. i am looking to find the release as to the why. we will take into those numbers more throughout the morning. jonathan: will come back to that in just a moment. futures up .8% on the s&p. we will talk a little more about what will happen with the ecb later this week. 25 or 50? from new york, this is bloomberg. ♪

jonathan: it is yesterday on repeat. yesterday equity futures elevated, than the gains faded quickly. futures up eight or 9/10 of 1%. on the russell small caps up 1%. muted price action in the bond market.

at about 8:30 we should get housing data and building data. the bond market looks like this. your 10 year yield unchanged. your two year 3.17. what is not unchanged is the situation in europe. let's take a look at the euro. a conversation about potentially a 50 basis point hike from this ecb, 25 or 50. reporting a bloomberg and elsewhere according to sources suggesting they are considering a 50 basis point hike. given where inflation is, it makes a ton of sense. given where the situation might be going, that is where things get more complicated. you have to compare and contrast the expectation for ecb rate hikes with the expectation that nord stream one might not come back online and that was the communication from the european commission a little bit earlier this morning.

tom: as you are reading it is on or off or can it be in between? jonathan: it could be in between in the sense it would come back online but you would not see the full amount of gas come through. we saw little bit of that before it went down to maintenance. the worry is does it come back at all? then you do not get to restock going into the winter. storage is a big issue. tom: i look at that but i would just say europe is a set of issues christine lagarde has to address at the historic press conference. jonathan: i did not even mention italy. i am not seeing a massive move on the italian 10 year but every last couple of days we have. the spreads are about 20 basis points. that was as wide as 240 in june. the concern about the italian government, factor that in with concern about the energy supply. factor that into the downside risk to growth.

tom: i could talk about this all day, but we are not on speaking terms. joining us is the head of european fx strategy. i love what you say about this important ecb meeting. i will call the surveillance acronym for july, tpm, which i believe is fragmentation. are we going to see tpm? >> i think we are going to get an announcement on anti-fragmentation. if we do not get an announcement at all or very vague there is no question. the question is will it be where the market has been affected and able to occur tail further widening in spreads and a large

number compared to bdp bund spreads. i think it is likely there will be a trigger. i think there is a much bigger picture. the bigger picture is in terms of inflation the ecb is way behind the curve. it has a currency that has depreciated significantly and it is facing a massive recession risk, to a large extent driven by the increasing energy prices. the question is how do you address that from a central-bank perspective. my concern is the ecb has been very late in actually going into a heightened cycle -- into a hiking cycle. tom: i have eight questions. let me cut to the chase.

is the ecb very late because the buddhist bank wants to be very late? vasilieios i don't think so. i think the ecb has been very late because it has not had a good assessment of developments on inflation and i do not think it pays particular attention to the geopolitical crisis. i'm very critical of the ecb at this stage. you asked me the question can you prosecute a central-bank? i think that is a very fair point. you can certainly be critical about the assessment of risks. it should have been, i would not say obvious that inflation was setting in it was something the fed recognized much earlier. a case of frontloading hikes in

order to be able to cushion the slow down -- that should become increasingly obvious to the ecb and i think the ecb is management us mistake. jonathan: it is too late now and this is what we have got. walk me through it. 25 or 50 on thursday and from there where can they go? vasileios: one thing i think becomes a big danger in the market, are we going into the ero of leaking central-bank decisions before they go into the room and make? i do not have any information but i am flagging that question. there is a risk of 50 basis points. my question is is that frontloading or is it signaling a more extensive and aggressive hiking cycle?

my case is it is more frontloading, starting too late, and will be perceived by the market as an aggressive hiking cycle, because the window when the ecb can hike is getting shorter by the day. jonathan: would you fade this euro strength? vasileios: absolutely. i think it is a dead cat bounce. the euro has far more issues to contend with and that is the recession risk. the recession risk, and on top of that you have an ecb which is not acting to prop up its credibility. you have italian politics. you have the big question with the nord stream pipeline. unless you can get the re-rating in the growth outlook which currently is extremely challenging, i doubt --

jonathan: this is a more important question and a difficult one to answer. you have a decent understanding of the reaction function of the european central bank? they have had a liberal interpretation of their price stability mandate. if italian yield start blowing up and we see growth risks start to pile up and inflation is elevated, did they start to focus on the other two and not the one that is the story for them? vasileios: i would be lying if i said i had a clear understanding of the ecb reaction function. to a certain extent the ecb seems to be moving the goalpost. look at the june speech by christine lagarde. they have been emphasizing and highlighting gradualism and optionality. on june 28 she said there comes

a point where gradualism may not be appropriate. this error of forward guidance -- this era of forward guidance i think is long past us. the ecb now has to do the best that it can, which means hike rates, but at the same time with details on the fragmentation, this is going to be about damage control. kailey: how do you model different scenarios of 20 -- of 25 or 50. if you are saying this is a dead cat bounce, does that mean we going below parity, does that mean $.90? 95? what are the different scenarios? vasileios: obviously there are a lot of moving parts that can blend together. i think if you get the combination of the ecb hiking 25

or even 50 basis points, which i do not think is going to have a lasting impact. if you get a hawkish ecb -- at the same time you get around 40% capacity in the nord stream one pipeline, you are still talking about downside risks and headwinds to growth, which means the probability adjusted that we come up with levels for euro-dollar are between 95 and 99. jonathan: awesome to catch up. tom: phenomenal. jonathan: in that world i'm not sure what interest rate hikes would accomplish. tom: i love how you took it to the reaction function. when we invented this this is what we wanted, a serious, nerdy discussion of this huge ecb meeting.

i thought your idea of reaction function and the mathematics of that was tangible. the answer is politics part of the ecb reaction function. politics is not part of the math, there is too much variance around each coefficient, i call it soup. jonathan: it is not a stretch to bring it up. more broadly the relationship between the ecb and the federal reserve, the post-financial crisis framework for communication has totally broken down. we have got into a federal reserve meeting two days before that. we had a wall street journal article that teed up a bigger interest rate hike. we have got into this one with months of communication about gradualism. only recently did president lagarde have the opportunity to tee up 50. we still have talk of 25. bloomberg and reuters going with the same story that it could be bigger. that framework has collapsed. tom: it has.

you can take it right back to monet. it is europe. it is not a union. jonathan: futures up .9% on the s&p. the euro up more than 1%. tom: did i move the euro? i was trying. jonathan: a bit. from new york, this is bloomberg. ritika: the european mako big when it raises interest rates this week for the first time in more than a decade. bloomberg has learned policy makers may boost rates by double the quarter-point they outlined last month. the latest eurozone inflation report showed prices searching to an all-time high when 6%. the price of oil is holding steady after posting its biggest one-day advanced since may. saudi arabia declined to comment -- declined to commit to output

increases following a visit by president biden. in the u.k. temperatures are set to hit a record. the met office says the top or turtle rise over 40 degrees celsius. the heatwave is disrupting life all across the country. trains have been delayed or canceled and workers have been stranded at home. in china the number of new cases of coronavirus increased to nearly 700 infections, the highest number in almost two months. or infectious strains of the virus are testing china's hard-line approach as outbreak spread beyond the major cities. bloomberg has learned anthony scaramucci skybridge capital suspended redemptions in one of its funds following sharp declines in cryptocurrencies. the fund suspended redemption because private companies now make up 20% of the portfolio. global news 24 hours a day, on air and on quicktake by

bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

♪ ♪ it's electric... made extraordinary. ingenuity... in motion. it listens, learns, adapts and anticipates your every need. with intelligence... that feels anything but artificial. the eqs from mercedes-benz. it's the car electric has been waiting for.

>> what is important is whether oil prices have more upside or downside. in my view there is more downside and there'll be a flip of correlation between equities and oil. jonathan: the chief strategist at clocktower group. great to hear from him. interesting things on china. futures at .9% on the s&p. on the nasdaq up .9%. also in the bond market yields unchanged on the u.s. 10 year at 2.99. europe the epicenter of the action on thursday.

euro-dollar positive more than 1%. stronger euro and weaker dollar. we could talk about the prospect of a 50 basis point rate hike. if you speak to people in foreign-exchange strategist looking at europe will tell you they want to know what happens with gas. the european commission does not expect russia to restart the pipeline this week. here is the quote. "we are working on the assumption it does not return to operation." they go on to say "in that case certain additional measures need to be taken." tom: that is the story and the answer is you cut down gas or vladimir putin sends a lesson in the heat of the summer versus autumn or winter. we protect the copyright of all of our guests. it is something sacred at bloomberg surveillance. it is their meal ticket. it is how amrita sen pays for air conditioning.

her research is exquisite. she walks through in her latest note why she is structurally and oil bull. my head is spinning. up we go, down we go. why do you suggest oil gets a bid in moves higher? amrita: that is why i say there is a different between tactical and structural. right now people are away on holiday, there are more machines than humans and we continue to trade in this very technical band going up five dollars in a day, going down $10. this is a market defined by underinvestment. we have not been investing enough. it has been going on for a long time. that does not change overnight. even above $100 there is not an incentive to increase investment and that is why we we remain structurally bullish.

jonathan: what does that mean for gasoline prices with the average price below $4.50, what you make of that? amrita: right now these have been driven by recessionary fears and i still think in the short term prices can correct lower once again. that does not change the fact that overall refining capacity is extremely tight. remember gasoline does have seasonality in its favor. we are going to come out the driving season and we do foresee a much weaker winter gasoline pricing. next summer we will have similar high prices. diesel is the one to watch out for. that has been the tightness in the market. with the european embargo kicking in early next year for products, russia exports a lot of diesel, about 600,000 barrels a day to europe, that is where the real tightness will be. kailey: we know the prices at

the pump have dogged president biden for some time. is trying to take whatever measure he can to get those down in some way, and hence the visit to the middle east. the buy-in administration seemed optimistic we would see the uae start to pump more. what you actually expect opec-plus to do on august 3? amrita: we are expecting them to increase production gradually. in theory the deal ends after they have unwound all of the cuts. that does not mean opec-plus will sit on their hands because not increasing production for four months when massively over tightness already tight market. we are expecting them to continue adding over the last four months of the year. i recommend the biden administration will take that as a win and say that is because of

a trip to the middle east, where is the reality is that will happen. jonathan: i want you to describe what would happen in europe if nord stream one does not come back online this thursday? what does the situation look like, where does germany get its energy, walk us through it? amrita: on our balances we are not expecting them to come back next week. i know that is the focus in the market. we have been building a scenario where it takes a lot longer to come back. we do think if russia is actually playing logically and economically they will have to bring nord stream one back by the end of october, otherwise they will have to shut down fields domestically. that might lead to more long-term damage for their gas fields. that is yet to be seen. if they choose to go down a political route that is very different but they still have until october to make the mind up. tom: this is critical because

non-sophisticates like me say if russia does not sell to europe they can sell to other people like india and china. if they have to play with nord stream 2, can they move the hydrocarbons over to other countries or not? amrita: you could do that for oil. you cannot do that for gas. gas is very distinct. the gas that comes to europe cannot be redirected to the east. it will take years to build new pipelines, to redirect the flows and that is where this comes a struggle for both sides. europe, you've already seen germany come out, putting measures to cut down consumption , nationalize some of the utility companies. things will get materially worse for europe. jonathan: in your assumption you assume vladimir putin is still a

rational economic factor? amrita: for now, yes. let's put it this way. we are saying that should nord stream 2 one not come back by october that we will clearly know he is not. our base case is still that it does come back but with a very high probability and risk it could get delayed further and probably not come back because that is where the swing factor comes in. what is the signal he is trying to send? even if it is the end of october, for europe, given the heatwave going on right now, the call on gases very high. we will not be building into the winter. i cannot stress how important that is and how much upside there is to gas prices. one of the things we're seeing right now with gas so high, we are getting oil back into the power mix as a result of this. jonathan: what a tough situation .

amrita sen of energy aspects. here is a headline. a temperature of 31.9 degrees celsius has been recorded at surrey. if confirmed this would be the highest temperature ever recorded in the u.k.. temperatures are likely to rise further throughout today. tom: through today and tonight. i would go to what i've heard from doctors, particulate if you are elderly, nighttime is more important, the temperatures have to come down. does it come down today or do we wait two days? jonathan: we will keep you up to speed and the latest on the ecb decision. the euro-dollar is 100 255. this is bloomberg. ♪

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>> the kind of economic activity we are seeing now is somewhat unprecedented. >> the inflation story, may be at peter did in june. >> isn't possible -- it is impossible to craft a story where inflation comes neatly back down. >> when you think about what is going on in europe, i think the worst case scenario is priced in. >>