constructive dialogue and as italy is a founding member of the european union, our role in the union remains essential. >> andrea cabrini is in rome this morning you're outside the bank of italy, the bank's governor is expected to address this crisis, both political and potentially financial. >> the response is one of the key factors that concerns the market today the two parties reacted with a vibrant and vocal opposition to mattarel mattarella they talked of impeachment, which is unprecedented here in italy. the lega is gaining grounds in the polls. they moved from 17% to 27% so one of the big questions is during the electoral campaigns, in just a few months, will they run together, the to pawo parti or will the lega still run in the middle in general they made no mistake that the electoral campaign will run against the european constraints, and they are already blaming europe, germany and financial markets for the italian economy here and in a few minutes the bank governor will address everyone with a clear message that the country has to press on with its reform agenda. that the reduction of the deficit is a priority of the country and any turning back is risky f

even now developments on bond markets and the market value of banks and italy's economy in general have darkened noticeably and negatively. i get to think it. that has to do with the possible formation of a government i can only hope that this will play a role in the election campaign and send a signal not times populists on the left and right and the responsibility in government. well a warning today also from the head of italy's a central bank ignacio vickery says that the country's political crisis could quickly morphed into an economic disaster if foreign investors no longer trust the italian state take a listen to steam the destiny of italy is that of europe. but we should emphasize again that to reduce the debt there are no short cuts look as if you know the financial crisis that would be a consequence would force our country backwards people who would make an indelible stain on the reputation of italy in the world but it puts you in a bar and i'm joined here the big table now by my colleague over the humphrey from the w. business well we were talking about this last night worried

the bank of italy said that italy risks losing the sense of trust and that is... rests on the credibility of figures like central banks. and governments. sol credibility of figures like central banks. and governments. so i think that we are at the end of a long bull market. the end of a long economic cycle. and you know, people are nervous. this may be the trigger which causes the end of that. i think that is the concern. there are so think that is the concern. there are so many different moving parts you and all markets are interconnected. as you say, they are all dropping at the moment so this is an important week. what is the possible outcome of what will happen, do you think? as your economist earlier onset, what we need is a bit of stability. i think that the markets have sent a warning to the italian politicians. they have said that you need to create stability here. he was suggesting that maybe we will get an a cce pta ble suggesting that maybe we will get an acceptable coalition government put together. it does not feel that way at the moment, it feels as i

bank of italy governor in doubt still biscoe has warned that there are no short cuts when it comes to shrinking his country's public debt he added italy's destiny is bound to that of europe at the unveiling of the central bank's annual report in rome biscoe was also keen to ease fears about the tumbling of shares at the milan stock exchange. really shouldn't reducing the incidence of debt is an essential objective. if the tensions of the last days can be eased the cost of debt will also be reduced. over to correct those in our financial correspondent frank for some reaction to italy's central bank governor he does sound like he has everything under control conrad. of course it has been that's what he's paid for central banks central bankers are the anchor of stability for the financial world mr biscoe really has to use language like this and if i maintain that this is just going away just like that certainly the people i talked to here today don't think so and certainly the numbers don't look good the yield on ten year italian government bonds that's the risk premium that the market a

well a warning today also from the head of italy's a central bank ignacio vickery says that the country's political crisis could quickly morphed into an economic disaster if foreign investors no longer trust the italian state take a listen to this theme the destiny of italy is that of europe. but we should emphasize again that to reduce the debt there are no short cuts look as if you know the financial crisis that would be a consequence would force our country backwards people who would make an indelible stain on the reputation of italy in the world but it puts you in an hour and i'm joined here to be table now by my colleague over the humphrey from the w. business well we were talking about this last night worried about this approaching storm and now we've got some wild plunder deal with don't worry absolutely we had that rumbling yesterday a true thunderclap which we saw on the markets today brant investors around the world are freaking out for want of a better word essentially they're worried that it's leigh's economy could collapse that there could be contagion in the euro zone they'r

for madrid in frankfurt the german dax falling by one and a half percent by the close of trade bank of italy governor theo vickery was warned that there are no short cuts when it comes to shrinking his country's public debt he added italy's destiny is bound to that of europe at the unveiling of the central bank's annual report in rome biscoe was also keen to ease fears about the tumbling of shares at the milan stock exchange really shouldn't reducing the incidence of debt is an essential objective. if the tensions of the last days can be eased the cost of debt will also be reduced. over to conrad who is now a financial correspondent in frankfurt for some reaction to italy's central bank governor he does sound like he has everything under control conrad. of course it has been that's what he's paid for central banks central bankers are the anchor of stability for the financial world mr biscoe really has to use language like this and if i may say so slightly in comprehensible language i mean if the tensions of the last days are reabsorbed whatever that means does he really mean that this is jus

european paul dobson, managing editor, and julian chillingworth of rough bump your, we focus on italy and .talian banksone up next, we focus on italy and italian banks. ♪ on italy and italian banks. ♪ francine: the italian two-year high as the country prepares for populist elections. u.s. oil heads for its longest losing streak since february. and washington is said to be open to a settlement over illegal e.u. state subsidies paid to airbus. good morning. this is "bloomberg surveillance ." i am francine. scarlet fu is in for tom. there's a lot going on when it comes to italy. scarlet: you are right. the 10 year yield moving down approaching 2.8%. we are also bring attention to what you called early elections, although it seems like this will be three or four months of uncertainty before we actually get to the next italian election. --t happens in that period + period? we are also talking about a possible constitutional crisis. looking at live pictures. for those of you on social media, we will push it out so you can follow it. italy's governor. a lot of italian banks halted on the downside. first, let'

his comments were appreciated probably by the bank of italy governor who made his annual address todaygeneral meeting. some of his counterparties, for example the -- have made similar comments. , butundamentals are ok italy is still lagging its peers in terms of growth. the consumer sentiment numbers that came out this morning were not terrific. corporate clients are happy, but at the end of the day, it is difficult to argue that this political uncertainty is going to stop in 24 hours. we still do not have a what is appearing more likely is that there will be an election in 60 days roughly with that outcome very similar to what worried investors just to what worried investors on march 4. deficit isht now the only 2.3% of italy gdp. is it something like what's the next prime minister might do in terms of fiscal policy? is it italy leaving the euro area? dan: i think both of those concerns you mentioned, with euro concerns emerging in the last few days, with the chances of a finance minister, a emerging as a eurosceptic. that obviously didn't happen, but now the euro is in play here. to

of the problems in the banking sector. we have seen quite a lot of banks come back to health last year, but we saw a rescue of a couple of banks in italynewed market turmoil and how does that lead to putting pressure on italian banks and other italian businesses that are maybe not initiate there should be in. again. thank you. we will see you later for the news briefing. from adele to james bond, from david hockney to harry potter, the uk's creative talent is admired around the globe. and the creative industries are one of the uk's fastest growing sectors, growing at twice the rate of the overall economy. but some people are worried that brexit will be bad news for the arts, as david sillito explains. what you are looking at is the work ofa what you are looking at is the work of a british company called jellyfish. as you can see, it makes visual effects. they are one of the, if not the leading centre for doing visual effects, animation, in the world. this has become very big business. there are more people making special effects in the uk these days than work in the coal industry. but what is really striking is how international workfo

italy's pres. is in political turmoil today. >> amid so much political uncertainty the governor of the bank of italy had a message on tuesday. >ator: the destiny of italy is that of europe. we are part of the greater clinic area. >> not everyone is so sure. italy's pres. rejected the government put forward by the two dominant political parties greenlighted to go into coalition, it was to be europe's first populist government. despite everything europe had nothing to worry about italy's pres. was concerned they would try to take the country out of the euro. there will be a technical government led by this man in french elections, the two published parties became so close to ruling say they will be back with a vengeance between the coalition leaders curious about the withdrawal of support for the proposed government promised the next election will be a referendum on the euro and the other populist leader expressed his anger at the italian president. >> translator: last night was the darkest hour in italy's democracy. >> reporter: french president macron praised his foresight. >> translator: italy is an important partner for fran

italy. in thegoing to be beginning of this saga and there will be a lot more bunds on the road. manus: hold that thought. this chart,ing in the spacing of the bankshis week. ago toto go back a year a conversation with one of our last guests. italy was in the midst of bailing out europe, and they created the backstop. we are panicking would be the theention at the start of week about banks, and we shouldn't, because the backstop is there, nothing to worry about. they have done that, but there is a limited amount they can do. once credit rating agencies put you under negative, you could statusinvestment-grade and the world will be getting rid of italian banks stocks. tremendous weight. it doesn't matter how big the markets are. move in onean direction in such a large amount that can overwhelm anyone. the entirely in corporate structure can go below investment grade and it can be a very serious situation. we saw that the word santa claus. we haven't seen that since the crisis. we saw the word panic. -- the cnett's since the crisis of 2011. enter the football said it europe has kept the promise of peace since -- angela maerkel said europe has kept th

moreover the other thing i would highlight in this is the banking sectors of the economies like italy, but also spain and portugal within the eurozone have become much more intertwined. in the first four months of the year, italian banks brought another 21.5 billion of government debt. that's exposing them to the selloffs we're seeing in the bond markets, particularly at the shorter end of the curve this is a much bigger issue than greece >> david, i'm sorry, did you say much bigger? >> it's a much bigger issue than greece >> the economy is bigger, but is the potential contagion bigger than greece? greece was an issue that dominated headlines globally for years. >> well, it did. the reason that greece was like that is the exposure of the german banking sector, french banks to greece. greece, in a sense, wasn't systemically as important as italy, which is so much larger and obviously in terms of the global economy is so much more important. the other thing is i don't think we're looking at a crisis. we're looking at spreads being very sol tivolatile, spreads wig out and realizing the b

banks on the rise today. we have a lot of commentary on banks specifically in the wake of yesterday. jeffries is saying that u.s. banks' exposure to italy and european revenue contributions are modest and manageable, creating opportunities to buy dips for patient investors. that seems to be the sentiment of a lot of analysts today. david george said there would be fires of bank weakness and specifically upgrading citizens financial to outperform after the selloff because of its improving operating leverage discount.turn and discount. regions financial and comerica, park a couple of the other regional banks on the rise. take a look at the treasury market. yesterday we saw the plunge and yields of about 15 basis points. today we are reversing to some degree that movement. that also accounts for the move up in banks. finally, we have retail earnings movers worth mentioning as well. 2 down.ok at 2 up and dick's sporting goods coming out with measures that beat estimates. movado, the watchmaker, appears to be doing well. she goes come on the flipside, not doing well. those shares down 22%. dsw, the numbers look good on the face of it. howeve

italy is present through the country into political turmoil today. >> amidst so much political uncertainty and falling markets the governor of the bank of italy had asage on tuesday. >> the destiny of italy is that of europe. we are part of a great economic area that is profoundly integrated. >> but not everyone is so sure. it leaves two dominant political parties who have been green-lighted to go into coalition. it was to be europe's first populace government. despite the party saint europe had nothing to worry about italy's president was concerned they would try to take the country out of the euro. there will be a technical government for now led by this man, and then fresh elections. the two populace parties who had come so close to really say they will be back with a vengeance. one of the coalition's leaders furious about the withdrawal of support for the proposed government has promised the next elections will be a referendum on the euro and the other populist leaders on monday expressed his anger at the italian president. >> last night was the darkest hour in italy's democracy. >> meanwhile french president has praised italy's president's for

investors have demanded the highest ever bond yields and the bank of italy has obliged on this.h italy has always had way before the selection, the economic picture is not looking good and these are heavy times into which italians may be heading. nick marsh ona italians may be heading. nick marsh on a situation changing by the hour in italy. let's return to our top story. these pictures have just come into the newsroom of north korean vice chairman kim yong—chol arrivng in new york. he will soon meet secretary of state, mike pompeo. and there is even speculation he could possibly meet donald trump. the former spy chief is the highest ranking north korean officials to visit the united states in 18 years. we will see you for more outside good evening. it's time for our world weather round—up. let's head straight across the pond to maryland in the us. yes, these cars have been put in this position by heavy rainfall, heavy rainfall, in association with rropical depression rainfall, in association with tropical depression alberto, which has now been downgraded, but you can see the fo

the market value of banks and italy's economy in general have doc and noticeably and negatively. i get when you get. that has to do with the possible formation of a government i can only hope that this will play a role in the election campaign and send a signal not populists on the left and right and the responsibility in government and italians not really taking very well it's about usually not liking outsiders telling them how they should vote we have to mention that going to a tiger has actually apologized for that statement which followed our interview the reaction though barbara has still been swift and extremely harsh right reactions yesterday evening where really vitriolic later in the evening news on the italian t.v. stations then the apology was also carried but i think that wasn't really registered because essentially people know what the man said has a kernel of truth all italian newspapers this morning carry headlines was an earthquake on the financial markets and so on and so there is a rising feeling that italy might actually be in danger but. the situation was archi

of the banks yesterday significantly to the downside. correlationirect between it yields up and the concerns that the banks hold so much of this italy issuance auction is planned later. is down 1.6%. pagani,talk to fabrizio formerwill talk to the director general for market operations at the european central bank, francesco papadia. we will also speak to our donovan, the chief -- paul donovan, chief economist at the ubs. let's get straight to the bloomberg first word news. . taylor: here is taylor riggs italy may be headed toward snap elections as early as july. that is after the latest attempt aw form a government s leave. rally leave -- this could force the president to dissolve parliament, leading to elections. raise is prepared it to interest rates again as inflation accelerates. o money according to tw managers. they said that further tightening will depend on inflation data, which will be released june 4. the nation will not resort to introducing capital control. president donald trump has said he will move ahead with plans to impose tariffs on chinese imports. finalite house said a list of targeted imports will be released by june 15,

even now developments on bond markets the market value of banks and italy's economy in general have darkened noticeably and negatively. i get we get. that has to do with the possible formation of a government i can only hope that this will play a role in the election campaign and send a signal not populists on the left and right and the responsibility in government. and that was the is budget commissioner speaking exclusively to those statements really making waves there in italy where people do not like to be told how they should vote the reaction has been swift and it has been fierce hasn't barbara. this was really like throw a can of oil into camp fire that's already you sort of raging because acting as remarks were seen particularly as interference from germany and the populace have been sort of joking the fires of anti german sentiment here for some weeks already particularly the right wing extremists were talking about the euro being a cage that germany you made to keep italy imprisoned and stuff like that and so the fiercest of all directions came from salvini the leader of the league

italy, where in the head of the central bank has issued a severe warning. yuka: the bank governor said italy was a few steps away from losing international trust. he never specifically mention five star or the leak in his speech, but it was clear his criticism was directed at the populist party's spending plans, which could add to public debt. georgina robertson has more. georgina: the governor of italy's central bank issued a sharp warning. the nation is facing a crisis of confidence. thelso highlighted unreasonable gdp national debt -- national debt ratio. public borrowing stands at 132% of gross domestic product, as natural -- national debt stands at 2 trillion euros. cost ofl raise the borrowing. this, coupled with the bond sale triggered by political uncertainty, will create more difficulties. looming elections are being alked about as if they were referendum on europe. populist politicians in europe have been promising tax cuts. it is clear this could put italy into more debt. the markets are responding with volatility. too big to fail and too big to b

that's a vague calculation should it be even now development on bond markets the market value of banks. and italy's economy in general have darkened noticeably and negatively i get we think that that has to do with a possible government formation i can only hope that this will play a role in the election campaign and send a signal not to hand populist on the right and left any responsibility in government for playing a globally does it how do you believe that italy mirrors a trend in europe of populist becoming stronger and that both in italy and many other e.u. states attitudes to the e.u. are becoming more negative. and the. opinion polls have been showing at. toward europe rising and growing stronger. that has to do with airto one and trump and bricks and and with unstable neighboring regions like you want to people acknowledge that there's more clout to be had as part of the european team ireland portugal and others have put the worst behind them are moving forward and are grateful that europe has helped them in recent years even if it. doesn't it annoy you it for example when prime ministers l

wins has a heap of challenges ahead italy is two point three trillion euros in debt that's the equivalent of one hundred thirty two percent of its g.d.p. should the european central bank and its low interest rate policy italy would face higher interest payments which could lead to financial collapse unemployment is at around ten point two percent but in areas like calabria sicily and sardinia youth unemployment is over fifty percent. labor market reforms are only slowly being implemented and several governments have already proved unable to get a handle on the vast state debt. for the latest from frankfurt over to our financial correspondent caret booze and conrad three months of political uncertainty and we could have another three months ahead of us that's something that the markets just love only if you really love volatility if you really make your money with betting on you know heavy ups and downs swings but serious economists have become more concerned they predict that all this will have a negative impact on business sentiment in italy that italian companies will likely to spend less invest less in the upcoming months surance is by really the man who was appoin

now developments on bond markets the market value of banks and italy's economy in general have doc and noticeably and negatively. i get when they get. that has to do with the possible formation of a government i can only hope that this will play a role in the election campaign and send a signal not a time to populists on the left and right and the responsibility of government. but those comments did not go down well after all this fine apologizing and kalar fine what he meant to give the interview to ask what have people will move thing to you about his remarks. you know we moved in the mean time away from the president's palace where the waiting just drags on endlessly to a market in the center of rome and if you talk to people here of course they do not want any interference most people say this is undemocratic if we vote for somebody we then expect them to form a government now we know what happened to the latest attempt to do that but they really they're really quite angry about the situation and also on the other hand people are getting a bit nervous and they say we want a governm

the absolute exposure to italy no large bank has more than 1% of their ball an sheet exposed to ill italy contagion to the rest of europe, that's 1% of their balance sheets it could hurt 5 or 10% but it could help with u.s. banks gaining share in european banks. they could wind up ownin productivity in bank out there i'm tired of this drill, there is a scare out there, sell the banks when you have record capital, liquidity, stress test. and more capital in sight. >> a stock was down 5.5% it had nothing to to with anything you just said it was about a specific part of that business, transactional revenue i think is what was talking about. how do you look at what happened with morgan stanley yesterday and all the other banks that were already down because of italy. >> people have bias from the financial crisis every time there is a hiccup people think financial crisis. yeah, trading revenue might not be up as much as people expected maybe instead of being up a couple% it's flat. you are missing the forest through the trees. you have the strongest balance sheets in over a generation. for the

italy is the third biggest economy in the eurozone. its debt to gdp is 130% and its banks and european and global banks hold a lot of italy's sovereign debt. italy's bull market is the third largest in the world after europe and japan. this has led to banks globally selling off. there's some contagion with other european bond markets like spain, portugal and greece albeit much less than 2010 to 2012. all over this is an italian issue. europe's economies are far stronger than earlier this decade. could markets are overreacting? in the march elections both league and five star said they wouldn't rule together and they dialed back their anti-europe rhetoric. given their left/right divide almost like a bernie sanders and a donald trump, will their base really turn out again when a coalition now looks likely? markets today are saying yes. for "nightly business report," i'm wilfred frost. >>> so will the unrest in europe continue to weigh on the u.s. markets? and what should investors keep in mind when they revisit their investment strategies? joining us to talk about that is jack avalon, the chief investment officer at crescent wealth advisors

single currency that would mean quitting the euro they also want the european central bank to write off some of italy's debts with two hundred and fifty billion euros they also talk about russia and relations with the country between russia and the e.u. saying that they want to scrap the sanctions that are currently in place against russia and want to see russia as being a trading partner and not a threat and also quite crucially they want to revise the e.u. migration rules that currently exist which mean that migrants have to apply for permission to stay in the first country that they set foot on well we have had confirmation from the five star movement that this document is authentic but we've been told that it isn't all document and there have been revisions since that was dated on may fourteenth however we are aware they've told r.t. that there is a final agreement that's already been put in the new agreement on russia but we don't know the routing of that yet but one certainly to watch out for given the tensions between the european union and russia so why is there anxiety about these two parties

single currency that would mean quitting the euro they also want the european central bank to write off some of italy's debts with two hundred and fifty billion euros they also talk about russia and relations with the country between russia and the e.u. saying that they want to scrap the sanctions that are currently in place against russia and want to see russia as being a trading partner and not a threat and also quite crucially they want to revise the e.u. migration rules that currently exist which mean that migrants have to apply for permission to stay in the first country that they set foot on well we have had confirmation from the five star movement that this document is authentic but we've been told that it isn't all document and there have been revisions since that was dated on may fourteenth however we are aware they've told r.t. that there is a final agreement that's already been put in the new agreement on russia but we don't know the wording of that yet but one certainly to watch out for given the tensions between the european union and russia so why is there anxiety about these two parties

single currency that would mean quitting the euro they also want the european central bank to write off some of italy's debt with two hundred and fifty billion euros they also talk about russia and relations with the country between. russia and the e.u. saying that they want to scrap the sanctions that are currently in place against russia and want to see russia as being a trading partner and not a threat and also quite crucially they want to revise the e.u. migration rules that currently exist which means that migrants have to apply for permission to stay in the first country that they set foot on well we have had confirmation from the five star movement that this document is authentic but we've been told that it is an all document and there have been revisions since that was dated on may fourteenth however we are aware they've told r.t. that there is a final agreement that's already been put in the new agreement on russia but we don't know the wording of that yet but one certainly to watch out for given the tensions between the european union and russia so why is there anxiety about these two parties

single currency that would mean quitting the euro they also want the european central bank to write off some of italy's debts with two hundred and fifty billion euros they also talk about russia and relations with the country between russia and the e.u. saying that they want to scrap the sanctions that are currently in place against russia and want to see russia as being a trading partner and not a threat and also quite crucially they want to revise the e.u. migration rules that currently exist which mean that migrants have to apply for permission to stay in the first country that they set foot on well we have had confirmation from the five star movement that this document is authentic but we've been told that it isn't all document and there have been revisions since that was dated on may fourteenth however we are aware they've told r.t. that there is a final agreement that's already been put in the new agreement on russia but we don't know the wording of that yet but one certainly to watch out for given the tensions between the european union and russia so why is there anxiety about these two parties

a lot came off deutsche bank a lot of people are saying these banks own a lot of the debt. italy'set is the third largest. that debt is somewhere remember the central bank bailed them out there's a lot of talk, by the way, that italy wants to succeed. this is false talk. >> you mean from -- >> the euro. it's false talk because their bonds would be at 10% overnight. they may want to have a kind of discussion that said we hate the euro that's more we hate germany. we hate germany. they feel second fiddle to germany. but, you know, look, if you want to take our bank stocks and their bank stocks, remember there are many international companies that can choose who they want to bank with they're going to bank with us and not them deutsche bank is losing so much of its business in this country. to our own banks because of the cut backs they're making. >> yeah. they've withdrawn. >> yeah. remember how powerful they were. >> yeah. >> at the wrong times. >> at the wrong times. >> yeah, during the crisis [ opening bell ] the nasdaq and the indy 500 winner up ed carpenter are ringing the bell

single currency that would mean quitting the euro they also want the european central bank to write off some of italy's debts with two hundred and fifty billion euros they also talk about russia and relations with the country between russia and the e.u. saying that they want to scrap the sanctions that are currently in place against russia and want to see russia as being a trading partner and not a threat and also quite crucially they want to revise the e.u. migration rules that currently exist which mean that migrants have to apply for permission to stay in the first country that they set foot on well we have had confirmation from the five star movement that this document is authentic but we've been told that it isn't all document and there have been revisions since that was dated on may fourteenth however we are aware they've told r.t. that there is a final agreement that's already been put in the new agreement on russia but we don't know the routing of that yet but one certainly to watch out for given the tensions between the european union and russia so why is there anxiety about these two parties

bank officials are reported as saying the e.c.b. sees no reason to intervene for now with no signs of into bank stress among lenders the e.c.b. will susie's italy's crisis primarily as a political one. off financial correspondent sophie szymanski is in new york sophie how is all of this playing out on u.s. markets. yeah well it could not come as a surprise to learn about a wall street is back on the green correct we could see a turnaround in stock prices on wednesday and yet there was this moment of shock as opposed to reaction something that we have observed many times people when their political news that are not directly impacting american investors like the breakfast for example and then we see the markets recover out of quickly you must not forget then that it situations like these investors simply create their own buying opportunity by letting stocks drop and then they go back and participate in the rally or outward trend a quickly an exit in italy from the e.u. it's probably the worst case scenario but if and when this might happen is not bothering investors on wall street too much of these at the moment all right let's move on then look a

bank of america merrill lynch measure of the stress and the system. market risk. we have been seeing signs of risk go higher, particularly after italy yesterday. we are watching the canadian banks. capcentral bank of canada interest rates on hold for a third straight decision. ,owever, key language changes including an up beat assessment of the economy and removing cautious language. that indicates potential willingness to return to a future hiking cycle. u.s. dollar versus the canadian dollar, the canadian central bank made the decision. as we see the dollar weakness, oil is being assisted, higher for the first day in six just above $68 per barrel. concerns whether opec will change its production cuts in the second half of the year. also russia and other countries involved. oil up 2%. oil majors up and energy one of the best-performing groups today. mark: a successful bond auction in his life. -- in italy. the latest from rome. take away. -- take it away. market starting to bring down angst in the market, a strong demand. they call it not a disaster but not super spectacular. a litmus test. after yesterday, the model market doing better. all b

italy's place both in europe and internationally. the government will have to look on the issues of the european budget, the reform of the right of asylum, and the return of the banking that brussels deems too big to fail, because what happens on this man's watch could have been ramifications elsewhere. but for now, mr conte will have to prove he is a prime minister and is not a placeholder. caroline rigby, bbc news. more on that story in our news briefing. the media has had a lot to say about what is happening in italy at the moment. let's brief you on some of the other stories making the news. after venezuela expelled two top us diplomats on wednesday, the state department has now ordered two venezuelan officials to leave within 48 hours. president nicolas maduro had accused the american diplomats of conspiring against his government, after his controversial re—election. the state department has rejected the allegations. germany's foreign minister says there's little chance the united states will compromise in its approach to iran after deciding to exit the 2015 nuclear deal. heiko maas, who's on a visit to washington, has told us officials that berlin would do eve

italy's place both in europe and internationally. the government will have to look on the issues of the european budget, the reform of the right of asylum, and the return of the bankingountry that brussels deems too big to fail, because what happens on this man's watch could have been ramifications elsewhere. but for now, mr conte will have to prove he is a prime minister and is not a placeholder. caroline rigby, bbc news. stay with us on bbc news, still to come: surfing — but not as we know it. we'll tell you about foil—boarding, bringing aeroplane technology to the waves. this morning, an indian air force plane carrying mr gandhi's body landed in delhi. the president of india walked to the plane to solemnly witness mr gandhi's final return from the political battlefield. ireland has voted overwhelmingly in favour of gay marriage. in doing so, it's become the first country in the world to approve the change in a national referendum. it was a remarkable climax to what was surely the most extraordinary funeral ever given to a pop singer. it's been a peaceful funeral demonstration so far, but some of the police are tear—gassing the crowd — we don't yet know why. the pr

scrapping restructuring plans of the world's oldest bank monti passkey is still unstable despite an eight billion euro state rescue last year its size makes it the biggest threat to italy's financial system the possibility of ending measures aimed at nursing the bank back to health have made investors very nervous. the euro's under pressure to the new government also promised tax cuts and increased public spending implementing the plans would cost billions of euros but italy has the highest debt levels in the e.u. after greece the economic plans combined with the two parties euro skepticism could set rome on a collision course with brussels. and donal cope is following this for a stunner it looks like italian markets are creaking under the pressure. yes they are under pressure is another crash that we are seeing but yes you can clearly see that investors over there in italy are very nervous what this new government is going to bring the country because of this nervousness we are seeing a lot of full tilt volatility there at the stock exchange during the trading day this is actually very interesting because usually the trading day there is not very volatile or something l

chief economist of barrow bank who wrote in his report today that the eurozone growth would likely be falling below its trend rate of one point five percent if the italy crisis were to escalate the banks of course would be the first to get to feel this and as a result today the two large bags of the german share index stacks bank and spank are the biggest losers both share prices have fallen significantly and both are below ten euro's again very subdued. there is symbolic outs and as you mentioned a lot of it to do with what's been happening in italy lately what's how is that affecting the bond market risk premium on the italian debt what's it going. well we're bonds are traded the yield on the ten year italian government bond which is a bit of a benchmark for the credit worthiness of italy has steeply risen today for the first time in four years this ten year government bond yield in italy is above three percent and at the same time the german ten year government bond has fallen below zero point three percent the spread the difference between those two government bonds and the fact that it is widening is an indicator for how much of a potential for d

so many alleged geniuses, and i use that word lightly, could conflate the problems of italy's banking system and i heard it all day all day. there is one similarity, they both involve capital most italian banks and european banks are under capitalized. our banks are over capitalized our regulators until president trump wouldn't even know what a club is. so let's understand something. someone on twitter yesterday said i looked tired during last night's show tired. tired. >> what a joke >> nah, i wasn't tired i was just exacerbated bottom line, the bears will freak you out of your stocks every time today proof positive that selling everything und-- pleaser not to forget the next time we get slammed, has nothing to do with the united states not italy, italy is the boot it looks like the boot we sell boots in this country. they are expensive brandon in pennsylvania. >> caller: hey, jim, how are you? >> i'm fine. >> caller: hey, i wanted to call in and ask you what the, about the company chronos group, what the intend legalization of cannabis in canada next thursday, how should we be looki

and the return of the banking union. italyve been ramifications elsewhere. but for now, giuseppe conte will have to prove he is a prime minister and is not a placeholder. carolann rigby, bbc news. —— caroline rigby. a new yorkjudge has ruled that president trump may not "block" 0ur north america technology reporter dave lee explains. the president is famous for using twitter to share his views on policy, the media, and anything else that appears to arrive in his head, ofan that appears to arrive in his head, of an early in the morning. people that have disagreed openly with the president by sending tweets to him are president by sending tweets to him a re often president by sending tweets to him are often blocked. but a judge has now said he could no longer do that. users that are blocked on twitter can't see the tweets sent by the account that has blocked them. they also can't reply directly to them. this was an infringement of the first amendment rights of free speech, thejudge said. the jays did say that the president and o

in italy, populist parties have reached an agreement on a coalition government. and matteo cellini talks.after days of one is an overhaul of italy's bankingtem. the parties have not agreed on a prima nasser. british long -- prime minister. --tish lawmakers have not cambridge analytica has agreed to appear before a u.k. committee. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ david: the united states is in the process of to curtail nuclear weapons. one with north korea and one with iran. we welcome now a lawmaker with oversight responsibilities for both of these, republican congressman mo brooks from alabama. he joins us now. the houseer of caucus. good to have you here. into what theight u.s. policy is toward these north korean negotiations. over the weekend, we heard john bolton be pretty tough on what the north koreans had to do libya.-- parallel with -- the white house seems to be packed cuddling. -- the white house seems to be backpedaling . >> technically, we are still at war with north korea. there is a te

bank down 6%, unicredit down 9% by the close in italy. extraordinary moves there in the banks, unicredit most important bank in italy, of course what's it doneelds outside of italy rising a little bit, but the biggest move in safe haven bonds is in the opposite direction here's the german 10-year for you over the course of the last one month, and you see how yields wednesday from 0.6% to now below 0.3%, and, again, the pace of yields moving lower in safe haven bonds, opposite direction in italy picked up pace over the last couple sessions that's spread across to the u.s. 10-year, and, again, yields moving sharply over the course of the last couple weeks, as you can see, 10-year moving down, affecting the u.s. banks today, whether you talk pure investment banks or the big universal banks like jp morgan chase and bank of america down sharply, too, and looking at sector performance, clearly, banks worst performer today, but other interest rates sensitive sectors like utilities and real estate moving in the opposite direction, in fact, green for the first time today we got reality up 0.3% seema joining me now, four minutes left of trade, and see

we talked to the ceo of one of the key banks in italy, saying no this is not a debt crisis once again. kevin: so far it isn't a debt crisis. there is turmoil in the market, but a lot of people are trying to calm things down. they had of unicredit was on bloomberg tv today and he said the markets are being driven by fear, not by fundamentals. if calling words that some people are trying to issue. on the other hand, investors are zynga at markets are being driven by political uncertainty. vonnie: if the markets are being driven by political uncertainty, what are they saying? i they saying they want fresh elections soon? do they want to be rid of cargo color to rally -- carlo cardarelli who should technically be well able to handle this? four are they saying something else? kevin: they want stability. they see these elections as happily the populist parties may gain support. there's the issue of the a china president. for decades he was seen as the figure of stability, and soda who makes -- somebody who makes things run on an even keel. he will be challenged by street demonstrations. tha

wins has a heap of challenges ahead italy is two point three trillion euros in debt that's the equivalent of one hundred thirty two percent of its g.d.p. . should the european central bank and its low interest rate policy italy would face higher interest payments that could lead to financial collapse unemployment is at around ten point two percent but in areas like calabria sicily and sardinia youth unemployment is over fifty percent in spite of the alarming situation in italy european leaders are trying to remain upbeat at the global solutions summit on monday german chancellor angela merkel said that the eurozone has a lot of experience when it comes to economic crisis. and when there were elections in greece and alexis tsipras was made premier there were many questions on the table and at the end of the day we worked together we spoke with each other over many many nights but together we achieved something i have to take on that task since italy is an important member of the e.u. and the. new. labor market reforms are only slowly being implemented and several previous a talian administrations have been unable to find a solution for italy's gargantuan state debt. well

italy, populist parties have reached an agreement on a coalition government. the anti-immigrant league chief agreed on a policy program after days of talks. one provision has been an overhaul of italy's bankingystem. the parties have not agreed still on a prime minister. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. caroline: the amazon affect continues. how can they managed to get back some of that share with the commerce? they're trying it and we will discuss that next. this is labor. -- this is bloomberg. ♪ vonnie: jcpenney down more than 10% and it is part of a wider story of u.s. retail. the second largest in the united states announcing a partnership with british online grocer this morning. it will take a stake and become the exclusive user of automated distribution technology. let's look at what it means for retail spacesoth or jennifer is a bloomberg intelligence senior analyst. deal, is it as much scale as amazon? >> what the deal should do is give a competitive scale. it is not just about where they can reach customers. it is about how quickly and ef

of rome. is it right to be concerned about the banks, italy and elsewhere? s market reaction appropriate? chiara: absolutely, the banks of the most vulnerable part. brunt of abe the crisis. that would be on the financial markets. we know that the crisis a couple of years ago in italy was particularly well managed by the current government. so the concern of a change in policy would definitely spook banking and other sectors. amanda: thank you so much for that. still ahead, canada gets a pipeline. the $3.5 billion investment comes with controversy. more on that,. --next. this is bloomberg. ♪ shery: this is "bloomberg markets." i'm shery ahn in new york. amanda: and i'm amanda lang in toronto. buyda has agreed to pipeline for $3.5 billion. our reporter is here with us. we knew there was a deadline. they said if it wasn't resolved, they were pulling out. are we shocked that the government is nationalizing it and buying it from a publicly traded company? josh: for now, they are nationalizing. this is farther than they wanted to go in the first place. they started