welcome to "street signs." i'm julia chattily and these are your headlines. this follows history. when there was the greek island debt crisis of the china growth debt crisis the global got print help seemed to help customers. crow manny jumps ship.

shares in electro lite slide after appliance worker warns currency headwinds continue to negatively impact earnings. i'm speak to the ceo in just a few moments. >> the republican nominee for the president of the united states. and it's official, donald trump takes another step towards the presidency after being crowned the official republican nominee. a warm welcome to you once again. i'm in red the markets are in green. green across the board for the european market so we gained relative to the start of the session this morning. a bit of weakness early on in

some of the bank stocks, but we've rebounded. particularly the italian market here. to give you a look at the individual sectors to get a look at what's moving here. the banks higher . oil off once again in the session today like we saw in the u.s. yesterday. interesting the markets decorlated now. we did see oil coming off, that leaving equities in the back end of q 2. that seems to have broken down. the basic resources sector because anglo american is falling. b bhpbilliton. still off.

bit after perspective there. also focus on the tech sector this morning. sap beat in the second quarter. licenses helped boost profits. the german software maker. told cnbc the company has experienced to impact from brexit. >> yes, we were aware of the brexit issue. no there was no impact from it. and this follows history, and when there was the greek island debt crisis terror china growth crisis, the global got print of sap and our solutions to help customers seemed to be in the mix of growth because they need our software to navigate through these cohoppy waters so it make sap a resilient asset. >> cloud helped boost microsoft sending shares up 4% in afterhours trade. >> microsoft ceo was able to

turn in a quarter that beat the streets estimates sending his stock into the green. the software giant reported q 4 eps. noul analyst had been looking for .58. the company cloud computing platform saw revenues search 102%. in the cloud is trying to keep pace with amazon the leader in cloud infrastructure technology, but microsoft does boast advantages of its own. microsoft also said that its so-called more personal computing segment which includes the flagship wip does operating system saw revenue decline, but interesting news there windows we've e revenue to pc makers

grew. that's a neat trick since pc shipments fell nearly 5% in q 2. finally the business segment which includes the companies office software grew 5%. during the quarter microsoft returned 6.4 billion to shareholders. i'm josh lipton in san francisco. despite beating expectations. posted a 77% jump in net profits for the period and raised the outlook for the european market demand this year. however it said the outlook for the uk is uncertain following the brexit vote. joining us now on the phone is jonas samuelson. what i didn't mention over the introduction is the currency affect because that's still having a significant impact isn't it on your bottom line. >> that's correct, yes, we saw a

negative impact close to 500 million. >> are you expecting similar impact the second half of this year as a result of currency volatility. >> we'll see more of a neutral affect for the second half of the year so that has been a significant drag for us for last year or so, but at current rates that's starting to even out. >> that's good news particularly for the european business. you raised your forecast for european demand this year. give us a sense of what you've expecting to see. >> i think we're -- first of all, we're very happy about our performance. we're growing in the keep areas, product focus areas that we're focusing on and the markets are supportive. most european markets are growing in the quarter and we see that stemming into the second half. >> you also said you're uncertain on the uk outlook. can i ask you whether you saw an

impact on demand even heading into the brexit vote and what are you expectations for sterling because i think that's the other critical factor for you here too. >> the british pound, and, of course, we have to take actions to counter the weakness of the pound and we're looking at doing that. in determines of demand we have seen some concerns from the construction sector with signs that are pulling back a little bit, but overall business in uk still developing were well so we're not so concerned, but there are some uncertainties. >> are you expecting more weakness in the pound. >> it's very hard to predict, but we're for sure watching our exposure to the pound. >> can i also ask you about latin america because you said it was a tough quarter again. particularly brazil. one of the comments you made last quarter was you were managing to offset some of that weakness and demand by raising

prices. i'm wondering if you still managed to do that in q 2 and whether you're managing to do that in q 3 despite the weak macro. >> right. so we've been able to offset ploes of the macro head winds including lower volume and we expect to continue to do that into the second half. the market still developing negatively, but at a decreasing skpas also the currency have strengthened recently which has provided a bit of a benefit going forward. >> the key driver was the profitability of the north american business here too. what are you doing there? is that the cost or price increases that you're managing to push through here. >> we're focusing overall on our

margins and we're seeing that pay off. particularly in south america. that's driven both by mixed price in management and operation expense and product cost. >> great to chat with you thank you for joining us this morning. joining us now is nick nelson. nick, great to have you on the show this morning. how much do we care about q 2 earnings in europe really? >> it's a good question because obviously we had the uk referendum right at the end of the quarter and ting cynics may say this is what you manage to do in q 2. let's see what happens in q 3 and q 4. you may find some companies have a tough time in market share. yes going forward it's brexit. so i think unfortunately it's going to take a quarter or two before you actually see the underlying trends that are going

on. before we had the uk vote, we were starting to see a modest improvement in the backdrop for european earnings finally. >> so you're not necessarily surprised when you see creos saying at this moment no impact from brexit at all. >> for companies like that in those particular areas with in each niche products. >> you've just spent two weeks traveling meeting clients in the u.s. and europe as well. what are they saying about t investment in europe. >> you have french elections next spring, you're got german elections next year, dutch elections. i think the u.s. and national investor base look at the brexit vote and wonder what that means for the wider backdrop.

>> they're pulling money out. >> they are in the three weeks since the vote we've seen $3 billion of selling by u.s. based investors and conversely we've seen $2 billion buying in european domestics. there's a tension between the domestics selling to europe and the domestics buying. >> what kind of impact are you expert testimonying as a result of the vote. >> it goes in a few ways. in the uk you'll have an upgrade so 75% of your revenue come from outside the uk. in continental europe we've seen the numbers come down 2% even in the last three weeks. >> i like at the multiple of the uk market, the ftse 100 here, and i think actually that's expensive. it's really expensive. we need some serious upfwrads of earnings. >> we do. we on 16 times which is the

highest we've been. the average is closer to 13. you're baking in 20, 25% upgrades. i'm not sure we'll necessarily see. >> are there any cheep defensives left in a low interest rate world that a investor should be looking at this moment. >> you're right. price are a little lower. bond yeemds are lower. you would normally go to defenses, but the problem is consum consumer staples. we would look at utilities and the health care stocks and maybe tell cos and those sectors to us look reasonably valued. >> you look at the dividend yield you can get from equities relative to the yield you got from bonds and that's super attractive. >> it is and with the gaps at a record high so if you look at dividend yields in the euro zone, you're about 3%. you look at corporate bond

yields you're blelow one. we have crazy situations. some of these bond yields are negative yields. >> a lot of them. >> and corporates as well now so that makes it very peculiar. >> it's around 15% isn't it. >> yes. >> 15% have negative yields. growth should be higher. nick, you're staying with us, we're going to talk a bit more in the show. for now let's bring you more news. donald trump officially won the republican presidential nomination. >> madam secretary. >> the great state of maryland. >> new york. >> the great states came with new york trump children at the microphone. >> glancongratulations dad, we you. >> has been selected as the republican party nominee for by voice vote mike pence was .

nominated the vp. >> we're going to win the presidency and bring real change and leadership back to washington. >> making the case against hillary clinton was chris christie. >> the charge of putting herself ahead of america, guilty or not guil guilty. >> 22-year-old tiffany trump vouchered for her father. that's a great quality to have in a father. and better yet in the president of the united states. >> 38-year-old donald trump junior. >> his unrelenting determination is why he's going to be our next president. and why i know that when my father says he can fix the country he means it. >> don, i veronica and tiffany urging americans to trust their

father like they do. it's that time of the show again where i ask you to e-mail. if you have any questions get them in. any questions of donald trump, plagiarism. on twitter tweet me directly. we're going to take a quick break, but coming up on the show, pimko purchases and looks to tie a. all the details when we return. we're back in two. stay was.

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ended the session down 12% amid the launch in japan will be delayed. how are the japanese going to cope? >> pick chew needs a power up, doesn't he. what's going on here is this is a stock given the success we've seen on pokemon go so it's come back down to earth here. no surprise to see given the fact this is a stock that doubled its market value. we were down as much as 15%. anyway, let's talk about the broader market. not a great deal of conviction. in terms of localized risk events there aren't many, a great deal of them until we get to the bank of japan next week. 29th of july and prior to that we have the fed on the 27th.

so look at the price action. also the japanese equity markets as well. dollar yen has been looking firmer. it seems to be pricing in expectations that the bank of japan is going to deliver additional stimulus. there's a very real conversation about helicopter money, outright debt monoization. that could be delivered as soon as next week and announced. really interesting conversation that's being had. it has weakened the japanese yen. there is a risk they may do nothing just sit on their hands and say negative rates have to cipher through testimosystem. >> did you know that pokemon is quite exciting to me. it is operating in 35 countries and they're afraid in japan it

will crash the server. >> they are so fickle aren't that i. that's not the whole story. 40 something, 5 something trying to catch these animals now. the mind boggles. >> are you children play something. >> no, they play real games. >> you're such a purist. boring. i can hear the boos from here. >> believe me, they are. >> the ceo of man groove is leaving to become the boss at pimco. he will step down in august and replaced by luke ellis. roman has been running for two years overseeing a number of acquisitions at that time. he was previously ceo. the appointment will position the firm for long-term success. now ericsson two main

shareholders want to replace the ceo hans vestberg. this follows ericsson's pledge to boost the income. ericsson shares fell 5% tuesday and lost about a third of their value in the past year. yesterday we were talking to him. i asked him in a cnbc interview if he still believes he's the right man to lead ericsson forward. >> when you're doing as many changes was we're doing right now, the structure, reducing cost, putting a new structure in place. you have a market where some areas are coming down. some are growing. i think my focus and the leadership team execute on that and to perform on the performance of the company. that's our main focus. >> that was the ceo of ericsson. a man with a job on his hands there. nick, let's get back to what we were discussing. i read an interesting piece oaf

paper. the only people not buying stocks were corporates buying their sharing back. we all know buy bax an i went grel part here. >> you had some very solid earnings growth in u.s. of those 7% points, half of it was basically just shrinking the share count. if you look at earnings per shares, less shares because they buy back the shares. this has been a huge thing for the u.s. market in terms of the driver of profitability and clearly companies in the u.s. have relabored the balance sheet. going back to the previous conversation in europe, you're looking at the dividend yield costing you 3% on average and you can borrower at 1 and some

companies negative yields. why on earth wouldn't companies in europe issue debt to buy back what for them is spent equity. the difficulty is culturally we just don't have this buy back culture the u.s. has. >> why? >> first we're more focused on dividends. you can't cut your dividends. so dividends, income funds, they want those yields in the uk, but also europe and, secondly, there are a lot more rules and regulations around this. each country so uk, jernlny, france, spain, they have different rules about when you can do a buy back. who you need to ask, you need to have a meeting of the shareholders, at what price whereas the u.s. you get permission and it's open ended. >> i don't buy the argument about cutting dividends. that's kind of not part of the argument, but i guess if it's

procedural problems, can we change that. >> you thought you could. you thought you could allow more flexibility and if you dethe buy back and add the u.s. share, it's not too dissimilar from what europe looks like. net share buy backs in europe last year was 0. the dividend yields plus buy back in the u.s. looks like europe. if we allow people to say your dividend is three. if times are tough it might come back down and go to three. then that would be something that maybe could change in the future, but right now it's very one-way traffic. >> what are your pricing in as far as the currency is concerned for the euro here? there are a million different reasons i could give why it's not weaker than it is. whether it's interest rate differenti differentials. do you expect more talk from mario draghi to weaken the

concern around these levels. >> it's been in the range of roughly 105 to 115. our affect strategist is looking for 116 at the end of the year. they think it strengthens a little bit from here. most people have been bearish on the euro. we would argue as you point to you have these current accounts particularly in germany in. you have funny enough the growth differential getting better. europe is accelerating a tiny bit and the u.s. is decelerating a little bit. that economic growth gap has narrow add bit. fair value and purchasing power may be somewhere around 120 or 125. >> translator: you can . >> just give us a sense of what you expect embassies to end third quarter by the tend of the year, like our investors smart

to get in levels. >> i think there's some upside in europe. i think in the uk as discussed we really struggle to see upsides for the ftse given where it's standing right today. a lot of the good news is priced in. >> what about italy if we're talking about continental europe. >> that's if you look at straight ps where earnings are compared to previous peaks, they're down. u.s. is of course well above previous peak. if you think there's a recovery. you need to navigate is the banks and the form of whether it's a capital support or capital injection, whatever, however that takes it shape. that gives people confidence to look back at that system, but that's where the value to us in continental europe rather than the uk. >> do you think there's some assumption in the price here that there will be some support in the next six months let's say

for the banks in which case that would argue there's an investment story there. >> seems to be moving on political comments. last week it was a tuesday. chancellor merkel made comments there would be some form of conclusion here. so i think it's very hard as an investor to look at the fundamentals when you're actually being blasted from side to side by there will be some form of bailouts or capital injection and there won't be and i think that's going be quite nosey through the third quarter. >> we have to wrap it up, but i just spotted this morning the vix is below 12. should we be corned. >> broadly speaking we had this event in the uk. the market didn't expect to it happen. it happened now. we haven't really felt the bad news yet. there's been a couple of uk indicators. so that's just starting. and i wonder as we go into q 3 the data in the uk gets weaker

whether people reassess whether the volatility levels are and the index levels are. >> talk overnight fed perhaps talking about rate hike this year again. >> we think it might be at the end of the year in december. >> interesting. ga great to talk with you. we're going to take another break. check out or blog. stay with us, we're back very shortly.

welcome back to "street signs." i'm julia shchattily and these e your headlines. ceo tells cnbc the company is experienced no impact from brexit. >> this follows history.

when there was the greek island debt crisis or the china growth crisis the global fingerprint of sap and solution to help customers seemed to be in the mix. manny roman jumps ship as he looks -- >> share slide after warns currency headwinds will continue to negatively impact earningings. the republican nominee for the president of the united states. and it's official, donald trump takes another step towards the presidency after being crowned the republican nominee. >> so we've got some data from the uk this morning in certainlies of unemployment. the rate up 4.9% in the three

months. down 54,000 the forecast was slightly below that so better than expected there. 4 .9% on uk unemployment. reuters poll coming in at 5% there. a little better than expected. now in the first leg of her european tour, theresa may will meet the german chancellor, angela merkel to hold discussions of brexit. may said quote i firmly believe being able to talk frankly and openly about the issues we face will be an important part of a successful negotiation. first may gets set to first the first prime minster questions in westminister where nancy joins us now. good morning. i wonder what difference in tone there will be between the theresa may that faces prime minster questions today and the theresa may that goes and faces angela merkel who already said no cherry picking. >> reporter: that's right. what we are expecting here from

phil mickels theresa may in her first prime minster session is the impact of brexit. you were just touching on some economic data there and several members of parliament are still waiting to hear what the plan is to offset any uncertainty so expect that to be a topic. we did hear from theresa may in her first cabinet meeting saying i don't want this government to be defined by brexit. call can go on her ministers to take on the opportunity and really make in an opportunity of lead lg the european union and take that as their fir priority so we'll expect to get a bit more on that today as well and then on the domestic front it will be very interesting to see her interaction with jeremy corbyn. in many ways the spotlight falls on him today. so it will be very interesting to see what the dynamic is there given that david cameron gave

corbyn quite a hard time saying look how quickly we sorted our political issues out. your party is taking too much time here. whether she picks up the we are expecting a more serious tone especially since this coming hours before theresa may heads to berlin to meet german chancellor merkel. merkel has said before they won't have any informal negotiations on the exit until that article 50 is triggered. can want expect testimony to come under additional pressure there to speed up that process. we will follow that closely. also cholesteroling when we talk about the eu ponce, we have heard that theresa may saying they will officially give up the rotating presidency of the eu counsel. the uk was expected to hold that at the second half of 2017, but the early days when i was in the brussels following the eu outcome it was widely announced how inappropriate it would be

for the touk take up that presidency presidency. donald tusk called for a velvet divorce with the uk. it will be very interesting to see whether theresa may responds to that in her parliament question time today because people are concerned a velvet course would give up more ground on the security issue. >> just how velvet do we think it will be. >> that's the question. we talk about someone has to give here. we heard theresa may and members of the party saying all along we want to maintain access to the single market. we want to get a financial passport deal which is so crucial for london's financial center as you know, but all along we heard from german chancellor saying youp can't cherry pick. you can't just come in here. it's nots cafeteria membership why you pick and choose what you want. it's all or nothing. that remains the question, but

others suggesting that the european union needs the uk more than ever, not just on the economic front, but the security risks as well. >> really interesting for the financials here depending on what they get as far as passporting is concerned. i spoke to a member of the bank recently and talking about what the banks are willing to give up. just not set up like the uk is. 2 to 3% of earnings. interesting. meanwhile boris johnson has refused to apologize for what he described as rich thesaurus of insults. he would take too long. it would take too long to apologize for all his past jibes. arguely there's probably going to be more too. meanwhile angela eagle has pulled out of the race.

leaving it soful jeremy corbyn. >> we had some comments from the bank of england this morning. it's their regional agent survey. i'll give you the headlines. following the eu referendum business uncertainty as you would expect. this around the third of the firm thought there would be some negative impact on hiring and investment over the next year. though there's little evidence of an impact on consumer spending on services and nonjeshl goods so far. saying no evidence of a sharp general slowing in activity though they will continue to watch. reporting the demand for credit was easing already. lowering expectations for investment spending. now, donald trump officially won the republican nomination on tuesday night staging a surprise

by a closed circuit tv. nbc tracey joins us from cleveland. trac tracey, what was the surprise? >> reporter: well, it was the fact we saw donald trump again. we've seen him more in this convention than you typically see the nominee before he makes his speech. of course he introduced his wife on the first night. he appeared from new york via video accepting the nomination last night. we understand he'll be here when mike pence speaks today and tomorrow when he does his own speech, but the children of donald trump have been here making the case he's not just a smart businessman, but a down to earth compassionate guy who can really tuns american class. last night we heard from tiffany trump and donald trump junior who was really the head liner here making a strong point by point case behalf of his father. we will hear from mike pence.

he'll accept that tonight. typically the vice president is the attack dog and this case he seems to be put on the ticket to balance things out. the attack dog seems to be chris christie. going after hillary clinton what he described as a mock trial on stage getting the audience involved and cheering and chanting during that. we will hear from another trump son tonight as well as some of donald trump's former rivals, ted cruz and marco rubio. interestingly not billed as headliners here, but both of them will be speaking. >> i saw the write up review of trump in the "new york times" and they said he looked wooden and constrained. do you think he was under pressure as a result of the chatter of plagiarism yesterday? >> reporter: it looked like he was using a teleprompter as

opposed to typical prump when you don't see him on a teleprompters. if you look at the cadence of the speech, if you listen to the wording of the speech, it wuntd your typical donald trump at a rally. it was more planned. this is the donald trump they've been talking about rolling out, looking more presidential and more controlled and i think that's what we saw in that video last night. >> as someone who understands how difficult of times would be wouldn't you constrain, i'm not going to criticize him for that. john joins us now. what do you make of the convention so far? this is supposed to bring the republicans together and fine he's got the nomination, but the tensions still remain. >> absolutely. this has been a tale of two cities so to speak. we have the dire city of course the accusations of plagiarism and the second night really a turn around for the trump campaign. son gets up there does a good speech.

changing the narrative. much more positive. makes his father seam human in some respects. brings him to the public. i think actually a nice turn around for the trump campaign. we'll see what happens on day three and four. >> from the daily show yesterday suggesting there was plagiarism in donald trump junior's speech and turns out the guy who he plagiarized helped him write the speech. >> this is modern politics. we deal with it. i think if you're going to give a speech like trump's wife did, you're going to find yourself under incredible scrutiny so i'm not really surprised by the fact people would look to see if she lifted lines from a privacy speech. i don't think she's been unduly criticized here, but it shows a campaign that isn't vetting the speeches possibly to the degree they should have done. it's the fly by the cuff mechanism that's been successful for them in the past.

is this going to be successful for a general election campaign. >> expecting for mike pence trump's running mate when he speaks later today. maybe he's the option for the gop here, but if you want to bring in disaffected bernie sanders voters, he's got some work to do. >> i think you're totally right there. i think tracey brought up a good point as well. normally we think of vp candidates as attack dogs and he's certainly not that. he does give you some benefits. he does kind of coalesce the party which have been concerned about donald trump's conservative bonn fieds and, secondly, he comes from a midwest state. i think there's some benefits there. if he wanted to actually mellow his message as far as an idea logical perception, that's not going to happen.

>> what did you think of chris christie? his speech was interesting. >> it's a different time. when you're in the nomination process and you're in the primary process, you're going to go attack after your enemies so i think certainly chris christie did that, cruz, rubio and others. chr chris christie was the first to hop on board after he dropped out of the race. what was interesting is that using his prosecution method in order to actually attack hillary clinton, i think very, very effective with the crowd. and actually it played well with the audience. the question is how long do these speeches lead. >> it surprises me that actually hillary isn't further ahead at this stage. i just wonder why or wonder whether we as an international audience actually are still

underestimating trump's potential here. >> reporter: i think that's toerlt true. easy to underestimate trump. here's a guy who has basically written off as a laughing stock when he announced his campaign and then ends upbeating 16 other candidates. you can't underestimate him. the question is what bounce clinton gets and how they fair in debates and the campaigns going forward. >> john, great to chat with you head of political risk at ihs country risk. there was a moment when donald trump said dad, we love you, congratulations and i thought back to when obama and her dad won. plagiarism there as well. maybe we should check the take place tapes. internal review is ongoing

following accusations of harassment. been a strong force in media for decades as nbc reports. >> reporter: reports circulating tonight that fox news chairman and ceo roger ails is on his way out. this in the wake of highly apply sized claim of sexual harassment by form early fox anchor. said ails fired her in june after she rebuffed his advances. widely accredited to turning it into the giant it is today. >> ails is fox news. there's not a detail of fox news that ails does not have his fingers on. he is the person who is most central to his organization and the product it produces. >> reporter: als's rise included

working with a media consultant, becoming the founding ceo of fox news, he solidified his representation as a king maker. working closely with rupert murdoch. >> it has always been a good relationship. roger als provides the one things that rupert murdoch likes most and can't do without which is money. >> a year ago put his sons in charge of fox news. a source with direct knowledge of the situation told nbs news the brothers wanted als out even back then. today the drudge report posted a document that purported to be the $40 million separation agreement between ails and 21st century fox. the document was immediately taken down. the company fold with a

statement. roger is at work. the review is ongoing. the only agreement in place is his existing employment agreement t. cynthia mcfadden, nbc news, new york. more than 50,000 people have been swept up now in erdogan's crackdown after the failed coup attempt in turkey. joins us now on the phone from istanbul. hadley, according to those that you're talking to there, what should we expect today? >> well, all eyes are on this cabinet meeting and meeting of the national security counsel. president ir gone has been back since the couple attempt. we just got a report out not too long ago talking about how

apparent apparently economics had been banned from traveling abroad. so including you know over 1500 university deans in this country so a lot of speculations surrounding what's going to happen next with that kind of a travel ban. are we going to be seeing other travel bans. the question that everyone is asking, at what point does it stop. >> that's a great question. let's say parliament do decide to reinstate the death penalty erdogan has said he will consider it. i know when you were talking to the deputy prime minster he kind of hinted the opposite. what doe you think happens here. >> i think we're going to hear more of that later in the day because the parliament is discussing that very issue at the moment, but as we know, this is going to have serious implications for turkey when it comes to europe, when it comes to the united states as well.

then also talking of course about the extradition of fethullah gulen from pennsylvania from the united states. and, of course, we've heard over the last couple of days from the white house very tepid in their response and review whatever evidence they provide and that that kind of thing. at the end of the day, the deputy prime minster was taking a much more pragmatic approach and saying this is something that became an issue because of the events of last friday. whether or not it will happen remains to be seen. he didn't think it would happen. he seems to feel the entire administration and entire government surrounding presid t presidenterpresident erdogan swept up in an emotional response to what happened friday. if the deputy prime minster explained to me the idea of turkey eventually joining the eu is pretty check academic at this point. you have to wonder how important

a death penalty would be. at the end of the day, europe needs turkey. keeping radicals from traveling from europe to syria or syria to europe and at the end of the day, turkey has to be on the same page with europe when it comes to the migrant crisis. how much this would really impact relations at the end of the day, the bigger question. >> you're right. we're going to take a break. coming up on the show a july hike might be off the table, but is the fed likely to raise rates in december? stay with us, we're back in two.

signs." a accident quick look at european markets this morning. holding in the green. it's gained back one of that 2% losses already so strengthening as we push through the session: give you a look at futures. i saw one statement yesterday in some press report saying the s&p 500 yesterday had it's worst day in two weeks. now, moving on, morgan stanley due to report before the bell today. don't miss that. it comes of course after wall street rival goldman sachs easily beat expectations with a jump in second quarter profits. thanks to a strong performance in fixed income trading and a round of cost cuts. now, could hike rates in september. that's according to fed watcher. he says they are growing more

confident about a move now that the markets have stabled after the brexit vote. joining me now is margaret. does that make you more constructive on the dollar here? >> well, i think certainly win of the things that's changeds for the dollar so i think if we look at how the dollar has performed in the last few years, really we saw one of the strongest rallies we've ever seen. we need to go back to the 80s to see more moves of that scale. off that we went neutral in our allocation on the dollar. i suppose you're point on the fed is one of the key things that has changed there and leadstous be tactically a little bit more constructive. markets price nothing really a lot the moment. >> i wonder if it underpins the dollar if we don't get stimulus from the bank of japan next

week. we don't necessarily get more stimulus next week from the bank of japan. >> always two sides to the trade. one side is the dollar lag. point outs this morning for example the markets are pricing. you have to go to next march to find a full hike price with the probability of 50%. you go back to january that number. i think certainly the dollar lag is more supported. on the yen side of things, you're absolutely right. i think certainly both nominal and real interest rates differentials at the moment would point to a stronger, not a weaker yen. we need something much more meaningful like a acknowledgment of helicopter money we think to change the dynamics because what we need to see a weaker yen is higher in expectations. i don't know that we get that without some more meaningful policy action. >> would you agree the

policymakers are the driver of the action here. things don't seem to budge on good or bad data: it's all about whether the bank of japan is going to give stimulus. the bank of england, australia overnight. they left the door open to more stimulus. >> i think central bank is one big driver and the other big driver is risk premium. that's been a big potential help for the dollar and may continue to be so for the rest of this year. that is also in periods been supportive for the yen. also like a safe haven of sort. >> we have 30 seconds left. what are you top trades for investors at this moment. >> as i said, we have strategicalstrateg strategically neutraled the dollar. tactically a bit more constructive. we see downside for sterling against the dollar, euro against the dollar. both at the top end of their ranges. >> and what kind of target are

you talking in sterling if you do see more downside. >> it wouldn't see us to see cable around 125. the way markets are pricing. >> makes sense. great to chat with you. multi-asset fund manager. that's it for today's show. i'm julia chattily and "world wide exchange" is up next. have a great day.

good morning. earnings are out. microsoft shares. company sores more than 100%. see what the ceo has to say about the business coming up. >> the summer of stocks. the dow closing in another all-time high. >> plus pokemon go problems. nintendo shares slammed overnight over reports in the fames roll out in japan. it's wednesday, july 20, 2016. and "world wide exchange" begins right now.