ofning us now, the cia of global equities at allianz global investors. do you think what we are seeing is a little bounce after so much concern over plummeting yields this week? >> in short, yes. change is not going to the trajectory of what markets will be doing and after a difficult week, you get a little bounce. we are still in for a bout of volatility. it is that time of year but on top of that, you got the volatility caused by the trade uncertainty and uncertainty over what the central bank will be doing. we anticipate a lot of volatility. matt: when you look at the inversion of the yield curve, and historically it looks like a pretty good predictor of recessions, does it look like that will be true again this time or do you think things are different? both ways.an argue things are different in some ways because even the central bank suspension in bond markets, but at the same time, we've got the slowing down of pmi everywhere around the world. growth is surprising on the downside so there is increased recession risk. whether we get there is up for

i informative our with allianz global investors -- and hour with allianz global investors.rning, violence in hong kong intensifies. police fire rubber bullets at close range. authorities closed the airport. cathay pacific shares closed at a 10 year low. markets react. yields, lower. the dollar this morning resilient. the grand experiment of ever negative interest rates in this hour. carl weinberg of high-frequency economics. this is bloomberg surveillance. your live from new york. from london, francine lacqua. everything pushed aside by the drama we see in hong kong. francine: i am glad our man will be on the ground shortly. we will be getting updates throughout the day. significant they have canceled the rest of the flights for the rest of the day. if you are traveling from hong kong, call your airline before you show up at the airport. this feels like escalation. we saw that yesterday with some of the police response to the protesters. tom: hong kong authorities in the last hour speaking. the news flow continuing into the early evening in hong kong. let me do a data check

taylor: burns mckinney of allianz global investors will stay with us.'s, down about 12% or so in premarket. if they opened at that level, they would open up the lowest point since 2010. for me, the big thing for me was here washe big thing cutting their full-year bottom-line view, which means they are getting hit on the margins, getting hit on that income statement. you are seeing shares in macy's off about 13%. then some readthrough to some of the other retailers, like kohls and nordstrom's, also down about 5% in sympathy. david: in particular, the apartment stores -- in particular, department stores. taylor: we will continue to discuss the health of the consumer as we switch on over to the fed. of course, our bond story coming up. -tens all about that two spread, now inverted. the first time since 2007, all as recession risk continues to rise in the bond market. what position does that mean for the fed? we will discuss next. this is bloomberg. ♪ viviana: this is "bloomberg daybreak." weworksharing startups applied for an initial public offering. to ra

the 57th one is legacies and started with an opening ceremony at allianz arena in munich by and snicko covert action hatice and take over both berlin natives with gratian roots shared an embrace prior to kick off it looked to be business as usual for byron early in the match but levin dusty opened the scoring in the 24th minutes of an dusky is now netted in 5 consecutive opening matches but the celebration didn't last long at his new signing doda looked back you know found the net from outside the box a level to score the shot took a deflection forcing manuel neuer in the opposite direction. minutes later neuer was beaten again not a group which grounded the keeper and put the. all in the net to make it to one fattah. after the break finds 11 converted a penalty to level the affair at to all 5 and that was the final score it wasn't the opener of the defending champions want it but for hats and on to covert ch running a points in munich was worth a smile not a bad debut. say by munich that only managing a draw in that opening match that closest rivals dortmund play it later today and i

last year, we played fiorentina at the allianz stadium with juventus and fiorentina at the allianz stadium's sold out but when can thus become more consistent? three, four, five times a year so we are consistent? three, four, five times a year so we are building fan bases to really start having women's football as a habit because football asa football as a habit because football as a habit is a religion in this country and in many other countries and that's what women's football can be if fans turn up or regularly every week. fans might vote with their remote controls when it comes to free to add television and it's a question of supporting a national side but they won't vote with their feet to what your club side in the middle of winter. i think they will. i think when you are passionate about the team and players and have about the team and players and have a sense of community with a club, you will go out in the snow, wind, rain, lightning. that's what football fa ns rain, lightning. that's what football fans do. but attendance is in women's football in england aren't good. 900 or so. t

the 57th bond as they go season started with an opening ceremony at allianz arena. byron's nico covert action and hats as anted show which both birth the natives of croatia and groups shared an embrace prior to kick off it looked to be business as usual for by an early in the match robert leaven dosti opened the scoring in the 24th minute 11 dusk is now netted in 5 consecutive opening match is the celebration didn't last long at his new signing doty luka back e.o. created some space and found the net from outside the box to level the score his shots like a deflection forcing manual noir in the opposite direction minutes later neuer was beaten again marko grew yet ragged the keeper to put her through in the league 21. after the break by 11 dosti converted the penalty to level the affair. i it wasn't the opener the defending champions wanted but fair to and show that owning a point in munich was worth a smile not a bad debut. hollywood is mourning peter fonda star of the sixty's cult classic can move easy rider the actor and producer died of lung cancer at the age of

the 57th bundesliga season started with an opening ceremony at allianz arena in munich by uncynical covert action happens and take over both berlin natives with creation routes shared an embrace price a kick off it looked to be business as usual for byron early in the match but levin dusty opened the scoring in the 24th minute of an dusky is now netted in 5 consecutive opening matches but the celebration didn't last long at his new signing doda looked back you know found the net from outside the box to level the score his shot took a deflection forcing manuel neuer in the opposite direction. minutes later neuer was beaten again marco group which rounded the keeper and put the ball in the net to make it 21 for hats or. after the break binds 11 he converted a penalty to level the affair it to all. and that was the final story it wasn't the opening of the defending champions wanted but for hats and on to covert running a points in munich was worth a smile not a bad debut. so we know what was missing by last night though there is a few things missing and also a few things going wrong for buy i

and has a ball and it's very strange one isn't it after they took a point of buying munich at the allianz arena on much they want to then come crashing back down to earth like this perhaps a reminder that show which that you have to get your team up to not just for the big games against by and but for every same in the bundesliga if you want to compete you know i think the other pressure on chauvet is that he's taking over from a real club legend you remember the state that hats were in when i took over at that club they looked right through relegation and he stabilized my for a couple of years is now going to build on that success that in some ways it's an even harder job when we talk about coaches is new which is happening the biggest of this season that's yellow car. coaches but we sort of saturday from stephanie who was booked tell me briefly who do you think is going to get the most other causes season and you write so yes jeff and barbara as you mentioned powder born coach i think god himself and here's why he's got a head start he's got one no one else does also his statement after

. >>> allianz backed its full-year guidance after delivering better than expected second quarter resultsofit rose 13%, revenue increased more than 6% that was thanks to property casualty and live and health insurance units as well as asset management that asset management business houses pimco allia allianz's cfo said they may have to reassess investments in the current low-rate environment >> the interest rates are low. as they keep going, somehow the assets under management are going up, that's good for the customers. maybe we need to rethink sometimes the way we look at investing into bonds in a low interest rate environment. as you say, we're pleased with the 1.6 trillion of assets that we have in our books that level is promising also for the following quarters in terms of revenue generation and profit generation >>> from banks to central banks, the bank of england has cut growth forecasts in part because of brexit uncertainty. the central bank now expects the uk economy to grow by 1.3% this year that's about 20 basis points lower than the 1.5% growth it had forecast in may. it also

the 57th bond as they get season started with an opening ceremony at allianz arena . by and nico covert action and hats and to chose which both but the natives of croatian roots shared an embrace prior to kick off it looked to be business as usual for by an early in the match robert leaven dorothy opened the scoring in the 24th minutes is now netted in 5 consecutive opening matches the celebration didn't last long at his new signing dodi luka back you know created some space and found the net from outside the box to level the score the shot took a deflection forcing manual noire in the opposite direction minutes later neuer was beaten again marco group which ran to the keeper to put her through in the lead to one. after the break find levon dusky converted to penalty to level the affair at. 5 it wasn't the defending champions wanted but for hats and show that she earning a point to munich was worth a smile not a bad debut. well there's a new 3 attraction drawing crowds at the zoo and the peruvian capital lima 3 bengal tiger cubs have made their public debut with one r

the chief economic advisor at allianz said the easing cycle may not be what the economy needs right now. >> for markets, it is important. markets are looking for a cycle that goes at least 75 basis points. some argue even further. the reality is it will not do anything for the economy. it may boost asset prices in the short term, but increase the risk of instability around the world. nejra: while investors have priced in the 25 basis point cut next month, three fed policymakers have voiced resistance, with a fourth saying he wanted to avoid further action. one of those dissenters is esther george. >> as i look at where the economy is, it is not yet time. i am not ready to begin to provide more accommodation to the economy without seeing an outlook that suggests the economy is getting weaker here. >> hiring has slowed. health care companies struggling to find workers -- or are they limiting hiring because of the uncertainty about where the economy is going? >> the reports we get our businesses are having trouble finding people. they are wrestling with wages and thinking about how to comp

france host scotland at the allianz in nice in under 30 minutes' time.ury crisis that caused them problems when they played that match. andy burke reports from nice scotland come here to the french riviera looking to register a victory. it would be a real shot in the arm ahead of the world cup next month in japan. it is over 20 years since the scots last won in france but it is the performance of individuals that will be key with world cup places up for grabs. duncan taylor starts his first test match for over two years. he has had a horrid run of injuries. john barclay throws on a scotland jersey for the first time in a year also. rory hutchison should make his debut from the bench. they will all be looking to impress gregor townsend and secure a seat on the plane to japan and what better way to do that then end scotland's long losing run here in france. world champions new zealand have emphatically bounced back from last week's record test defeat to australia. they hammered their rivals 36—0 in auckland, with a really polished performance, richie mo'un

last year, we played fiorentina at the allianz stadium withjuventus and it's sold out — 39,000 people, it was a one—off occasion. when can this become more consistent? three, four, five times a year, so we are building fan bases to really start having women's football as a habit because football is a habit, is a religion in this country, and it's a religion in many other countries and that's what women's football can be if fans turn up more regularly every week. the thing is that fans might vote with their remote controls when it comes to free—to—air television and it's a question of supporting a national side but they won't vote with their feet, will they, to go and watch a club side in the middle of winter. i think they will. do you? i would say when you are passionate about a football team, and you're passionate about players, and you have a sense of community with a club, you will go out in the snow, wind, rain, lightning. that's what football fans do. but attendances in english football, women's football, are not good, are they? they barely get to four figures. no, they haven't b

we will have more with ji mo, from allianz bernstein. bloombergso turn to for this discussion. geto tliv to commentary and analysis from bloomberg's expert editors. david: let's look at where markets are post this fairly set of numbers out of china. you can read about it. asia's point 9% doing well, .6% pix isast asia, the tomo same as. the aussie dollar, down 11 pips. look at the chinese markets given what is happening with the economy and we will see what happens on that. decent session bounce backs, short squeeze, we are up-to-date -- up today and to round up the market check, look across assets 1.68 on youries, 10 year. oil, pulling back about 1%. we are above 106 on the dollar-yen. let's get the first word news with su keenan in new york. the hong kong airport has resumed normal operations after another night of chaos saw clashes with police and departing life -- flights suspended. airport authorities have warned an interim injunction that bans protesters from unlawful obstruction. u.s. intelligence claims china is massing voices on the border. president trump says be

kailey: as global stocks plunged and yield curves inverted on wednesday, allianz's chief economic advisorg and bloomberg opinion columnist mohamed el-erian spoke to chief executives about the bigger economic picture behind the turmoil in the market. he said the federal reserve rate hike was a policy mistake that will have long-term implications. mohamed: the fed has lost credibility in the last nine months. it had to do a massive u-turn and the market is holding the fed hostage, asking for more and more, and at the same time not believing the fed can make much difference. you no longer have the ability to repress financial volatility, which leads to the third issue of what is next. the answer to all this is not the fed reducing interest rates, that is not going to help economic growth in europe or in more economic growth in china. the answer is more progrowth policies, and, unfortunately, that is unlikely to materialize, and that's the big concern looking forward. david: how worried are you about a recession? i will put a graph up from the new york fed -- they are showing a chance at grea

jp morgan and bank of america down sharply in the u.s., and in europe, deutsche bank and allianz downwell. guy: we also had commerzbank reporting earlier on as well. thank you very much indeed. let's get back to viraj patel, arkera fx and global macro strategist. global years are under pressure. let's talk about the pound. the latest book he odds on a no deal brexit are five to seven. is that fully reflected at the moment? viraj: the odds are like 35%. the game is guessing the right probability for what a no deal brexit should be. havenk sterling markets probably priced in above 50%. this seems like a momentum driven move related to no deal, but i'm not entirely sure we are all on the same no deal risk assessment page. i look at the probably of us, november 1, moving to the ,ideo trading terms -- of us november 1, moving to wto trading terms, i would put the probably be much lower than implied betting and certainly much lower than what sterling markets are indicating. guy: are you willing to bet against the market at the moment? as you say, it is kind of a one-way trade at the moment.

we were seeing a private equity takeover on that listing, but allianz does not like that.rading strongly. craft beers, demand for craft beers driving carlsberg. that is look at the european close. vonnie: here in the u.s., we have had a -- markets getting lambasted the last couple of days. today we are seeing stabilization. the u.s. taking its cue from china, which is fixing a tiny bit above seven. the offshore yuan still trading weaker, but a little bit of stabilization is the mood of the day. you can see that in gold, trading around $1500. definitely not going below $5,000. the s&p up 1.25%. the nasdaq up 1.5%. a couple of chip stocks doing well, also amd and the symantec deal. sox up one -- up 1.75%. amd up 14.5%. the board is gone from perrigo, saying the job is done and they do not need to be there. that has a selling going on in that stock. beverage down 5.3%. a little bit of warning. guy: let's talk about the asset management industry facing in existential prices. for years, investors have been -- shifting their money into active funds away from passive. that has fo

allianz getting a boost from pimco in the second quarter. pimco attracted $25 billion of new money.push for overseas outside clients, operating profit from nonlife insurance missing estimates following -- falling 5% from a year ago. campbell soup inking a deal to sell international operations p this includes australian biscuit maker arnett. the dealer completes the soup maker's asset plan it announced last august. this would pair down its debt. investors will likely turn their attention to the new ceo's idea for revitalizing campbell soup and snacks. that is the bloomberg business flash. francine: let's get the latest on the u.k.. boris johnson's working majority in the house of commons has been reduced to one. liberals impacts -- liberal election.won a bye byseeks to deliver brexit october 31. our editor for brexit joins us. neil shearing and peter chatwell are also still with us. first, what this means for how boris johnson views the possibilities. it probably makes another election more likely. it has been pretty complicated for a long time, and already johnson did not have a maj

se are looking at allianz' earnings coming across the wire right now. companyres to the compiled estimate of 2.9 9 billion euros. it is a leading on -- it is beating on the second quarter. seen a range of 11 billion, 12 billion on the year. if they hit that number bang on, it will be no change from last year. we are going to speak with the .llianz cfo do not miss that interview at 7:00 a.m. london time. in about an hour. nejra? nejra: i have numbers coming in from credit agricole. the context is it is joining fox capital.listing the second quarter ratio, 11.6%. second-quarter revenue coming in t on -- meeting the estimate. if we take a look at some of the other numbers coming through, second quarter french retail bank revenue. versus the estimate of 875 million. that is what we are looking at there. the context -- revenue gaining. in the about a rise ratio further securing the dividends. the key return on equity. that is what we are looking at. markets,ntext in around trade tensions. absolutely. we are getting more from south korea's president moon talk

companies to raise their offers, especially as osram's biggest shareholder alley ends -- shareholder allianzid too low. earnings have suffered as the company is heavily exposed to the automotive industry. about 40% of revenues at the end of 2018. it has also issued a series of profit warnings and heritage very public spat over strategy with its former shareholder siemens. company will the lie in the hands of its shareholders. bloomberg theg takeovers allow them to choose between competing business concepts, and whichever bid wins, they need at least 70% of them investors in order for offer to be successful. it will likely have until october to decide. guy: thank you. sorry, vonnie. italy's matteo salvini is speaking right now. he's briefing reporters. he's just come out of a meeting with president mattarella. in terms of what he is saying at the moment, the league is united. he wants to act in the best interest of italy. there have been a lot of accusations, particularly from giuseppe conte. the former prime minister suggesting he acts in the best interest of matteo salvini. we will continue

the chief economic advisor at allianz says the cycle may not be what the economy needs right now. >> for markets, it is really important. they are looking for a cycle that goes 75 basis points. some argue even further. but the reality is it won't do anything for the economy. the reality is it may boost asset prices in the short term but increases the risk of instability down the road. nejra: investors have priced in a 25 basis point cut next month and three policymakers have voiced resistance with a fourth saying he wanted to avoid further action. one dissenter is kansas city fed president esther george. >> as i look at where the economy is, it is not yet time, i'm not yet ready to provide more accommodation to the without seeing an outlook that suggests it is getting weaker. >> hiring has slowed but is still healthy. are they working or limiting hiring? the reports we get our that businesses are still having a hard time finding people. still wrestling with wages and thinking about how to compensate a workforce they need to be productive. that is still one of the largest concerns, ke

to begin the conversation, john hardy, head of ethics strategy, and captain peterson with allianz.ng up the pieces from friday. when did you write about over the weekend? how do we encourage, given all this news flow, to participate in the market? clearly the trade war continues to be a major topic for markets and continues to overshadow other developments. on friday morning at the jackson hole summit investors were relatively content with jerome seats,for the fed chair which was pointing to some further easing or even another insurance rate cut in september. but then news concerning the trade war continue to overshadow this easing of monetary policy. was -- we sum up what will continue to see major uncertainty when it comes to the trade war, the theoretic announcement about one sign of this uncertainty. >> dollar-yen has turned around since we got the comments from president trump, saying china wants to talk and they had phone calls, but with this uncertainty -- is the simple trade to buy yen? isthe problem across market you have so much correlation so whether you are buying along

allianz is down 2%. we just spoke to the cfo.left their forecast unchanged because they are unsure about the second half. you see the oil producers all down. bp,le, royal dutch shell, as well as the miners. even anheuser-busch is falling today. there is an argument that you need beer to survive and yet it is being sold off this morning. i guess it is a little too early for that. [laughter] let's talk about fixed income markets. we are moving out of equities. we are seeing another leg up in fixed income. another leg down in yields. 124 is where we are trading. we dropped below the 1.85 level on the u.s. 10-year. a little bit of a leg down on the 10 year yield. that is part of the story. i'm also looking at the way we started trading this morning from a sector perspective, which i think is pretty interesting. we are down 1.8% on the stoxx 600, but there are no sectors in positive territory. some of those a little bit more resilient. usual slightly more resilient component to the more resilient side of things. essentially, we're sel

the allianz group is europe's biggest insurance co and one of the biggest players in the global financial markets. it's been fun for 600000000 oil the from from 400000000 leaving so see shown at 400000000000 for the softness you know in the lead so say showing leading via the foresaw good ones o'quinn one fist to she went on my country to so 1st and. does so much period of figure one inch on base your pick your own and box uk to a little finzi a party for mukesh cotton and the same box to pot it's a peon so buy spirit box and investments invest its own in it will be an infrastructure to investments in autobahn and when the tulio could detect. the sun was more of a positive closed in in china therefore also a show although some kind of one of the growth. in the developed markets in europe and us. they also know new trials to be seen which we could never knock to a finance if a few puts in but it does if you puts into the high misson via in so going to invest the high heating visteon as acts in him obedient it's at the law. as a given in the token fini gun opining given that mia in didn't t

manus: talking about being defensive, in conversation with allianz, they said the probability of thees in the near term having a recession is about 80%. 10-year, i have three-monthed ourselves to death, so a new proposition. u.s. capitol goods expenditure, nondefense, back at zero, crossing the three month moving average. inlect on that yellow lump, the middle. every time you go to zero, a recession. two-fold question. one, does this indicate something more malevolent, and how soon, if at all, could we needed another -- could we need another dose of q.e.? seema: that's a great chart to show. any weakness coming through will be from investors, companies pulling back spending plans, pulling back on capex, which then triggers less hiring and consumers. what we're looking at, if the trade issue continues, we would expect that line to continue falling, and recession becomes more likely. for us at this stage we don't see recession as the main scenario, but the chances have increased, and day by day it becomes more likely. nejra: i suppose that makes sense, why you are advising investors to

osram licht to the downside, their biggest shareholder allianz is saying no to a takeover, saying itand should never have been accepted. 's to the downside, down more than 3%. jeffries says it was a core set of results and there are just no buyers out there. matt: thanks very much, annmarie hordern with some of your movers. asset managers are facing and existential crisis. for years, they have been shifting into passive funds, pushing fees lower and leading to the loss of thousands of jobs and large-scale consolidation. now the industry is on the brink of a shakeout and only the strongest will survive. joining us is bloomberg's european hedge fund reporter. thanks for joining us. what surprises did you find in your research? >> the industry is clearly struggling and is at a tipping point. active managers have been charging too much for subpar returns for too long. investors are voting with their feet. they have been pulling money out with -- out of passive funds. lower, jobs grinding cuts, and large-scale consolidation. that passivets will overtake active. anna: compression is a tren

the chief executive advisor at allianz says and easing cycle may not be what the economy needs. >> formportant. markets are looking for a cycle that goes at least 75 basis points. some argue even further. but the reality is it won't do anything for the economy. the reality is it may boost asset prices in the short term but increase the risk of instability around the world. have priced in a 25 basis point cut for next month. three fed policymakers have voiced resistance, saying they want to avoid taking further action unless they have to. is of those dissenters kansas city fed president esther george. >> as i look at where the economy is, it is not yet time. i am not ready to provide more accommodation to the economy without seeing an outlook that suggests the economy is getting weaker. >> hiring has slowed. our companies struggling to find workers or are they cutting back because of uncertainty? get so far arewe that businesses are having a hard time finding people. still wrestling with wages and thinking about how to compensate a workforce they need to be productive. that is still one

and joining us now from irvine, california is the chief economic adviser at allianz, mohamed el—erian and you are right it is a roller—coaster in stocks and what a roller—coaster in stocks and what a difference between today and yesterday. today us markets are up up yesterday. today us markets are up up to 2% but underlying that is something more significant, markets no longer have an anchor. no economic fundamentals or central bank policy. so it is a very volatile period and as you say traders are having an enormous difficulty figuring out what they should be doing. but volatility if you're trading is not necessarily, it might be bad for your nerves but not necessarily bad for your pocket. plenty of money to be made in volatility. there is but the money made on volatility is because traders had an edge and it is hard to argue that they have an edge in predicting tweets from the white house. so i think they are as puzzled as many others are and it just speaks to the new reality in markets when both fundamentals are no longer anchoring day—to—day moves. how do you, how much do you thin

allianz getting a boost from pimco in the second quarter.from nonlife insurance missing estimates, falling 5% from a year earlier. google is trying to fend off more antitrust scrutiny. google says it will require rivals to bid in order to be alternative search providers on android smartphones. that's willune choose between people and three others as their default certain google choose between and three others for their default search engine. ubs is warning of tough -- rbs is warning of tough times ahead. the cfo tells bloomberg the bank is unlikely to reach some profitability targets, including returns on equity of more than 12%. >> there's a bit of pressure on income, and because of uncertainty in the rate curve moving down, and then there's also -- and that really is the driver of the 12%. viviana: rbs didn't offer any new details for its search of a ceo. to take an is leaving job in australia. alix: thanks so much. we are counting down to the july jobs report. you are looking at the estimate to have been added last month. of harvard kenne

allianz is cautious over interest rate breaks.estec points out the current situation is totally bonkers. the last time japanese debt looks this appealing was 1995. it cannot survive long at the heel duffels. paul: beijing's also pushing back on u.s. efforts to link the trade war with the turmoil in hong kong and that is as trump says he is set to talk to xi soon. pres. trump: i do not think they will retaliate, but if they did, we have the ultimate form of retaliation. up.ould be able to step it i have been very mild about it. very mild. there is a long way i could go. mackenzie joins us now from beijing. talktalk there from president trump. looks like there was another setback for the trade negotiations between the two sides. u.s. sidenk if the thought that by pushing back some of these additional tariffs to december, they would appease the chinese, they got that wrong they got is all -- that wrong. we are forced to retaliate. they believe this is breaking the accord that was met between the two presidents at the g20 in osaka. xi

this is allianz's biggest shareholder.cided to go against one of the private equity bids for that company. alianza set the price was a knock-down price and the company should have never accepted. tod's reported a first-half loss. it was yet another set of results that were poor and there is no buyers out there. let's check the boards. i want to show you something else i am watching. i am looking at brent. it is trading $57.41. that green we see up 2% this morning has to do with a few phone calls the kingdom of saudi arabia is making to other producers. they are looking at options to stem the weakness we have seen in prices. we still have brent trading under $60 per barrel. one clear and obvious solution would be of opec and its friends were to cut production more and before 2020 when the iea says we have this oversupply of market. someone from rbc says they will not be complacent about these prices. she was saying you can imagine the phone because you are seeing between the secretary-general, russia's novak, and getting pr

allianz's chief advisor. this is bloomberg. ♪ scarlet: we have some breaking news.lligence sharing pact with japan. i see the yen strengthening to its session highs. u.s. futures falling to their session most, overnight session well.s this comes on the hills as japan and south korea struggled through their own kind of trade war where they are limiting exports to one another. once again, the relations between south korea and japan worsen a little bit with south korea ending its military intelligence sharing agreement with japan. francine: it feel significant. let's get peter oppenheim are from goldman sachs to maybe explain how the geopolitical events could become even more dangerous or that could actually go away, i guess. how do you factor into either of the chief executive's thinking when it comes to equities or when you think about it from a markets perspective? peter: there are certain things that you can look at in terms of what you can create models for. they may be wrong, but there are ways in which you can forecast probability on gdpr inflation and interest

. >> a busy show we've got chief economic adviser of allianz errian joining us to talk markets what issted in his views in terms of where tech goes from here after that sharp sell-off yesterday on china story, michael burgess here stuart varney weighs in don't miss a moment having we know that this was a severe selling yesterday because of the china-u.s trade doesn't look like a deal is happening soon, i have given up i am not expecting a deal. dagen: our viewers so smart somebody tweeting the show said it seems like -- irrational reaction to 10% tariff on 300 billion dollars imported goods it is 30 billion dollars why would market sell off like about this? you know, panics are not rationale it doesn't make much when a market is very overvalued price to perfection where you have assets arrange the globe that are like that on top of a very, very leveraged economy here, there, and everywhere. maria: good point. dagen: what was unnerving yesterday going on in kurns overseas, where you have, entities, companies, say in china even south korea when currency drops they have dollar denominated

let's get back to the plunge in bond yields, continue this discussion joining us now allianz's mohamediscussion you agree with much of that or have some, you know, can you drill down on some of those points >> absolutely. good morning, joe. i would add two points one is that the cpi number highlights the dilemma facing the fed which is neither the real economy nor inflation calling for what the market has priced in. but the fed will have no choice but to deliver what the market has priced in. that's the first set of dilemma. and the second one is look at how the narrative has evolved. it used to be the fed can help us avoid a slowdown. then it went to the fed is pushes on a string but it's okay. it helps financial markets this morning on your show, you had guests saying that rate cuts would be bad for markets and what we're seeing is that the fed is being viewed increasingly as being less effective and people are starting to worry about the risks and the unintended consequences so i think these two things are really important, joe. >> how do you think -- i mean, can you give us an idea