giulio terzariol, the cfo of allianz.ring our interview with rbs' cfo later. .nna: return to the dividends managers sort out issues with fines in the united states. we will wait for more details on that. that is it for "bloomberg daybreak: europe." "the european open" is next. european futures continue to point higher, can -- in spite of the lackluster session in asia. nejra: this is bloomberg. ♪ guy: good morning. welcome to "bloomberg markets: the european open." we are live from london. i am guy johnson alongside matt miller in berlin. matt: not a lot happening in asset prices, with the exception of asian markets. a mixed trade, but big arrows. the cash trade is less than 30 minutes away. guy: china's currency heads for eight weeks of decline, its longest

of the saudi and emirates allianz none some do and emits indians and then they are held hell being of the visit to me to boot is a dent on restoring his also tedium and they can then that and they are they said that they are with the legitimate other thing with the president teddy but the kid the reality unfortunately the they are cuba in yemen they are to cuba gooding the. about the most important parts of this event to bursa it also liberated. prevents is the good the bad the posts. i did the airports and also they are the curious thing i did the militia. you know the yellow to to then special to him or its they are polish and has had young men under blockade for too we are so ready and the saudis say it is aimed at preventing arms smuggling to they who threw up poles you want to saying it is creating an imminent catastrophe with cities running out of fuel clean water four hundred thousand children starving why are the saudis more afraid of arms smuggling that causing this huge despicable humanitarian tragedy that is through yemen now is suffering from a huge flow from the worst hum

joining usies-hippen from allianz global investors. central banks around the world are watching, but they have a very different relationship with a market in turkey does. that doesn'tleader believe in the current interest rate environment. others will react differently, yeah? you are absolutely right. that the turkish lira -- leader is not defending the situation. let's pick it up on the other side of this break. other side of this break. retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. matt: 30 minutes into the trading day. headlines off the bloomberg. the past 48 hours. it spikes up. the market awaits trump's next street -- next week. points to amarket 5% m

hordern.s, annmarie beside about allianz this morning. -- let's talk about allianz this morning. >> theuble is in italy. allianz was affected twice by the collapse of the bridge. the company is part of the group that has ensured the bridge. it is playing a minor role there. on the outside the company has invested 600 million as part of a group together with another company in the italian highway operator. that is not going well right now while italy is pushing to revoke the license for the highway operator. we will see how that stock opens. range, down two to 5%, we could see this stock drop this morning after one of thing prisons is being taken over by the u.k. ministry of justice. it could be for a period of six months while they provide additional resources to the prison. theyked the senate if welcome this to urgently address issues facing the prison. one of the managing directors at g4s is saying they face exceptional challenges including high levels of prisoner violence. there seem to be issues that this one particular prison, the government stepping in. the calls are looking like

lucy macdonald is the cio of global equities at allianz global investors, cio .hope the canada gets on board from his market perspective. this overallok at progress? is it a small step to progress? lucy: yes, the whole trade issue has been a major source of concern this year. the market over all has been held back. ande need progress on that, it will be seen positively, but it is a china nexus of that is really in focus. anna: you say that it is a china story that is real interest. what about what we know about whatever it ends up being, how do you see it? is a game changing, or isn't it? analysts for example were saying that they do not expect the revised terms will have any substantial microeconomic effects. with that mean that the lens with which you look at the conversation -- what does that mean for the conversation? lucy: as i said, china is the big story, and that is what we will be focusing on more. certainly, when you are looking at some of these industries where you have already had some tariffs imposed, it becomes clear and clear what we have said all

let's welcome in mona fr from allianz everyone's 401(k)s and retirement accounts are doing great.time we should be feeling more bullish as the momentum continues should investors be using this opportunity to gradually raise cash a rainy day fund or a war chest for other opportunities? >> thanks. a few things there when you look historically at how markets perform, typically what you see is that in a late-cycle environment markets can do quite well. we've done some analysis looking at the last four fed cycles. on average the s&p was up 9% during the cycle up another 16% the year after the cycle ended. so typically what that has told you is that markets tend to perform well until you get up to that recessionary period so it's usually the one-month to six-month period prior to entering recession where you see a selloff. you usually don't get bear markets until you enter a session. we're far away from cessionary environment. we feel markets have a way to run here >> so what does that rotation look like? what could it tell us? what kinds of sectors would we want to see outperform to te

up how safe are italy's bridges with anger mounting over the deadly general or bridge collapse at allianz tell me that there were.

the others only in many parties even with the militia for truth even with that without any solace allianz in one table and we did a great national dialogue outcomes and we wrote a great draft of could a situation we were just steps forward making putting this constitution for a friend but the cool head bent the killers had been so the coup the killers the order isn't the result of the peaceful revolution is the result of the counters of pollution and it is the result of conflict that is you know conflict so it is not our fault but still we are in our revolution and we will you know that continue i wonder where and dream for change and we will when absolutely no you have blamed the hearses for this crisis. amongst others who are and they're fighting for one side in this yemeni conflict but you also speaking against the saudis who are fighting this is for the sake of president hadi is there anyone inside yemen you would want to work with. do you think that yemen is divided between a group backed by iran and well by somebody and and and emir it's no yemeni people they have they are they they

germany has now to be grown up to be you know to to be responsible for their country and for the allianz and for europe defense policy spokeswoman of the free democrats mary agnes trucks and i'm on we thank you very much for joining us this morning thank thank you very much. you're watching news still to come on the program with its currency shedding half of its value this year and new threats of unemployment and inflation turkey's economy as investors worried more and more of them say that the real problem is president and have won. first to some sports news now as the first round of the german cup is already in the books dortmund barely escaped crashing out of the tournament banks to a marco royce's goal in the dying minutes of extra time in a match against second division fare now dortmund had already scored in the final seconds of normal time through new signing alex vits though to draw the sides level after first took a deserved to lead the two one win it gives the new coach lucien fog a winning start to his tenure. and let's take a look at the other matches from the german cup this

i don't see discrepancies are differences from my colleagues at the allianz or even the opposition.lieve that the only all —— only way we can provoke a change is to bring pressure on the streets and bring it to the table the national dialogue that has been suspended since the end ofjune and tried to convince the government that the only solution here is to continue the dialogue and bring the anticipated elections to 2018. i think that is the general demand from the nicaraguan people. you keep saying the nicaraguan people, as though they are united behind your demands. but of course they are not. we'll see the demonstrations mounted by the sandinistas. talking about the achievements —— the achievements of 0rtega. you have had economic growth for several years. we have the least crime ridden a stable society in central america, compared with some of your neighbours nicaragua has been a success in recent yea rs. nicaragua has been a success in recent years. daniel 0rtega has made a point to working with the business community. 0rtega's achievements are not inconsiderable. many people i

francine: lucy mack donald, from allianz.'s get to the business flash. >> christian sewing pushed to get back into growth mode and says there is one of business in which there are no hiring limit. bank in asia is still recruiting after bringing on hundreds of new staff members. their leader told bloomberg quote i do not think there is a limit on what we can digest. house of fraser has decided to seek appointment of administrators and says court hearings may take place. the move comes as discussion with investors and creditors have not concluded a solvent solution. been holdingin has last-ditch talks to avoid filing and jeopardizing 17,000 talks after a would-be rescuer shelved plans to buy a stake. ryanair is grappling with major strikes in the first time in its history. disruption is set to hit a new peak, with at least 400 flights canceled. that is asked pilots wrap up a bit to get better contracts from a company defined by its pennypinching culture. pilotsiled a bid to stop in the netherlands from joining the strike. samsu

and net profit allianz has beaten expectations coming in at 1.9 billion euros for the second quarter, down 5% from a year ago. they are on track to meet the to 18 targe 18 -- 2018 target. >> we had some volatility, especially in the second quarter, that's because of uncertainty around interest rates. the point is when you look at just june and july flows are back to positive i think we went through sort of a slower momentum in the second quarter, but now we see stability coming back up >>> let's check on swiss re shares which are under pressure after a 17% fall in first half net profit. accounting changes cut into the earnings which would otherwise have been flat gross premiums rose 8% they announced they would explore a potential ipo of reassure joumanna bercetche is in zurich this morning you have been trains, planes, automobiles for this earnings season what can you tell us about the swiss re results >> exactly today it looks like the market is reacting adversely to the swiss re announcement, even adjusting for that accounting change earnings would have come in just flat from a yea

business change >> i want to ask about what's coming down the line as long as we've been talking to allianzhey've been warning about a crisis, a market correction coming. it's been a challenging market to trade also now saying it's a matter of time before a crisis hits. two to three years that was the comment from the cfo. what does that mean for the insurance companies? i know a number of the insurers have been moving into liquid assets because there's not been much to buy. they want to protect the long tail of their assets and what they pay out in claims >> market volatility is affecting insurance companies. they are a big investor. they invest a lot of money into fixed income securities, equity, liquid assets. what we're seeing is, for example, the spread increased over the q2 and had significant impact on insurance companies in italy. volatility in capital markets affect mostly, you know, the solvency positions of these companies, and we need to keep an eye on those. >> thank you very much for joining us >>> we will take you back to market action. a look at how we're perched on the majo

the positive, though, is that the student-led protest movement a civicaentire allianz fighting in nicaragua has been the glowing exception to the trend, the bright spot, people willing to fight and die for their country and democracy. that is what i want to keep in mind as i talk about the bad things that have happened. that is a really good thing we can take away from this. so, how did all of this "and begin?think ambassado i think that ambassador ulibarri explained this. know, inall of you april, then ortega and his sandinista party government be changes to the social security system. and you think, so what? well, it turns out that the in social security in any country, whether it is a democracy or dictatorship, is really, really difficult. so this generated opposition from two really imported have it sector lobbies, and from the chamber of industry , among others. of that, people took to the streets in the capital city and other cities like granada to protest. and there was a crackdown. unrestgest show of against the government since then it ortega took power more than a decade ago. he h

it's a new campaign and i really want to see what half and half and haim are going to do down in the allianz arena which is a notoriously difficult stadium to be where you will know in a couple of minutes thank you so much probably oh yes thanks a lot. now the final major tennis tournament of the year known as the u.s. open is right around the corner starting on monday and many fans of the game will be watching american tennis superstar serena williams who is one grand slam victory away from matching margaret court's all time record of twenty four wins well it won't be easy for williams the six time a champion of the tournament here self because of her drop in the world rankings but here's a preview now of the year's final grand slam. since making her return to tennis after the birth of her daughter serena williams has admitted to struggling with post-partum emotions but she's still considered by many a serious threat on the court despite her plummet in the rankings at wimbledon in july she reached a final showing evidence of a resurgence after missing the last u.s. open serenus back this ye

allianz is also a gain or. they are the financials up. when you look at the losers, downside 1%.re the financials on the losing side. you see -- down, which is interesting because of the linde merger concerns. we also see glencore down. metals and miners are losing today. european markets, basically flat after a mixed session in asia. joining us is tim graph, head of macro strategy at state street. thanks for joining us this morning. once again, trump and trade, big in the headlines. but there aren't actually tariffs on any more than, i think $34 billion worth of goods coming from china to the u.s. is it all about the bark and not really about the bite? tim: i'm not certain because trump has been consistent on this issue over the years and sees no reason to ratchet off the rhetoric. you look at his twitter feed, which we all have to do to follow his thinking, and it does seem as though he's pushing this line. it's a winning issue for him domestically and is going through a rough patch in relation to the russian investigation and the politics around that, ahead of the midterms as

allianz, up -- down 2/10 of a percent. they did have to pay out a lot for those u.s.nes and wildfires. though, we should note those disasters prompted more customers to buy insurance. we spoke to their cfo. >> in the quarter, we had outflows of about 8 million. this was driven by a large mandate. if you adjust for this mandate, the outflows at pimco were zero level. what is important if you look at the six months, the inflows were about 11 billion euros. in general, a strong inflow for the six-month picture. matt: all right. i want to bring the focus to the u.s.. wilbur ross signaled more pain ahead unless china changes its economic system. this as the asian nation repeats it will never surrender to u.s. trade threats. meanwhile, the latest round of u.s. jobs the data comes out at 130 p.m. u.k. time. still with us is our guest. war, it seemsade so big, fuzzy, and cloudy. and you cannot get your hands on what is happening. a lot more noise than signal, right? well, so far, markets have been trading fear rather than fundamental damage. surveys, coming off. but still hig

the fact that people say, let's paint allianz with the same brush and think the dollar is a , move back, and iselle e.m.'s. will cooler heads -- and iselle e.m.'s.- and sell joe: i mention there has to be a lot of career riskier. whowants to be the idiot might have a bunch of e.m. when it blows up over the place. caroline: precisely, but there are more people talking to us about the moments of opportunity we are something to see in emerging markets. how are we seeing the fx market play that out? saying if i was not going to put my career on the line i would get into this? the mexican peso has been the outperform or so far. lananh: we have definitely seen people talking about this on the wire and we have pimco's blackrock asset management all talking about e.m.'s are supercheap. there is huge selloff and red across the screen. when you get back in is the tricky part. if you do see a lot of inexpensive currencies, -- caroline: who catches that falling knife? joe: is everyone looking for what will break the dollar strength or cause the fed to tap on the brakes? is that sort of the signal p

investment strategist with allianz and rob is with cabot wealth management. mona, we've had a very volatile week it seems the market has a very short attention span one day it's worried by something, then it's comforted, then it's worried, then it's comforted. what do you think is going on? >> this is kind of natural as we get later and later cycle in the u.s. economy we have the fed in play and now we have risks from both the china trade tensions, turkey and the potential contagion there. some sector rotation as we've heard. the investors that have been in tech and discretionary, they have done quite well, up about 15% year to date so i think it's natural for those sectors to take a little bit of a pause, a little profit taking, but we're encouraging investors to round that out with some energy potentially. health care and staples are areas that can do well even in a downturn. >> what are you advising are you encouraging people to follow this defensive rotation >> we are encouraging a little bit of a defensive rotation here we think it's important that you r

investment strategist at allianz. tony, a portfolio manager. good to see both of you.ve been watching this hand rail outside the ustr's office for a couple of days now do you think the overall conversation about tariffs, trade deals falling apart are not as overplayed? >> it has tended to be overplayed in the financial markets. when we think about the size of tariffs. let's say there's another round of tariffs put on chinese goods. it's said to be around $200 billion of products. if the total size of the tariffs might be in the $300 billion or so range, what's the size of the global economy $100 trillion. and this is a one-time hit on prices so over a few years, instead of $100 trillion of economic activity u.s. economy, 150 million people employed 85% of them are in the service sector we speak to tariffs, we speak into the idea of the goods sector being influenced. a smaller portion of the economy. to that extent it's been overplayed, overhyped and not affecting the markets or even the u.s. bond market on a whole. >> how nervous, if at all, should a u.s. equity invest

that, heut prior to was an investment officer at allianz. when it comes to central banks, is there a policy mistake being made? >> i do not think there is any mistakes. the fed has to race. i think they will stabilize, so no problems there. the ecb will probably go to zero year. and the boe, you could argue it is a mistake. i just think they want to raise, but will not be raising too fast. francine: if you look at pound and the boe, the market is just not believing what governor carney is telling them. that they could hike again. >> not much growth is what i should be saying. not much inflation, uncertainty around brexit, i think the market believes they will not hike. logical. let's say brexit, first of all, what is your best case scenario? there will be a brexit -- francine: not a disorderly brexit. nikhil: i think what brussels has to give. it has been unfair how they have been dealing with britain so far, and they will start to change their tune. they started to change this morning. they will become more accommodating and there will be s

celebrate 40 years of it, there are 40 special shaped balloons this year, they change from giant allianzous worldwide. this is the biggest gathering annually of anywhere in europe. quite an amazing spectacle watching these balloons inflated. they will not be taking off because we have got a bit of rain in the forecast and some breezy conditions. how is the weather looking? here that the clouds are gathering. we are expecting a few showers and that picture will be true up and down the country. a day of sunny spells but scattered, heavy, blustery showers and it will feel quite easy for many of us. we have got low pressure to the east and in the west with fronts moving in there will be showery rain. this morning their heaviest showers will be for the west of scotland, northern ireland, north—west england and wales and the south—west. some of them heavy with thunder and hail. those heavy showers will drift eastwards, sunshine returning to the west but heavy showers and thunderstorms in the east, particularly breezy on the south coast and quite a caulfield to the weather with capita is betwee