a french franc is set to buy commerzbank's business. the deal completes the banks set up in europe's largest economy. futures are pointing positive. u.s. futures are positive but only just. here in europe, it looks like will rise .5%. a little bit of a benefit of what happened with merkel. lastsl see how long that as we approach october. withure you was happening the picture around the world. mexican assets under pressure. the ftse and the cac both trading lower. we of been flirting with 6.7 in dollar yuan. what we saw yesterday was u.s. markets coming back. the chinese have not responded to that. this is a trade story. another issue that markets need to deal with right now. are feeding into the metals and going to make a car. that's the fact the market is dealing with. let's get a first word news update. juliette: german chancellor angela merkel has halted the immediate threat of a government onakup, agreeing to a plan migration and keeping her sister party in the fold. holding centers will be set up at the german boarder for your refu

manus: we broke the news, you've got, is big, socgen -- commerzbank, socgen picking off the bits of commerzbankhat they want. is this the start of what we have all been talking about? which is much more considerable cross-border action. or is it a one-off? the sale for commerzbank will cut the cost base by 200 million by the end of 2020. saker: look, you have been saying this should happen for a long time. that is because it you are a logical and clever men. -- man. there are special issues about this. socgen has tried to consolidate itself. in theory this could be the -- in theory that is the way which the european banking sector can consolidate across borders, which is the way to survive in the future, so it should go that way. whether this is the start or not, i don't know. i have not seen the details yet except for what you announced. let's wait and see. like on the face of it a great deal for both, and you need something like this in the european market. you, saker anwar nusseibeh ceo of hermes fund managers. let's get the bloomberg first word news with juliette saly from singapore. u.k. p

. >>> a franco/german deal commerzbank agrees to sell its equity markets to societe generale in an effort to divest non-core assets. >>> glencore assets sink to the lowest levels in over a year. >>> and we are just a few moments away from my exclusive interview with bang of england mp michael saunders. >>> all right. just before we get things kicked off, let's look at how european markets are shaping up it is certainly a mood of more optimism and positivity in the air. we had a choppy session in asia. the picture as far as european markets is broadly positive across the board we have the german index leading the charge xetra dax is up 0.7% or about 90 points higher. this is after a last-minute deal was brokered between merkel and her sister party csu more on that later let's look at how foreign exchange is looking this morning. a bit of a bounce in euro/dollar, up 0.2% almost back to 1.17 again. sterling/dollar up to 1.3170 a bounce from 1.3150 dollar/yen is trading a bit firmer as well let's look at the picture in fixed income in light of the mood that we're seeing in equities, more posi

deutsche bank and commerzbank, the two biggest lenders in the country, are restructuring.her hand, many foreign lenders would like to be in that market. i want to remind you that the government, the german government, still has a stake in some point,so at there will be a process and i believe every european bank will look at this. this is not necessarily a disadvantage but i do not want to get too much into this guessing game. certainly, you should see it in the light of they want to increase their presence in germany and grow the etf business, which is still a stale game. foerster, goodk to see you. scarlet: let's check on the bloomberg first word news with courtney donohoe. courtney: time is running out for the iran nuclear deal. the iranian president is in switzerland, where he is pressing europe to deliver on its promise to shore up the 2015 deal, put deal by the u.s. pullout. >> as it has been said before, as long as our interest are respected in the framework of the nuclear deal, as long as we feel that we can enjoy the advantages given to iran as part of this agreem

peter dixon joins us from commerzbank. great to see you.ing an apocalypse when it comes to equity markets. does it concern you? peter: in a way it does. noise that sits around this particular problem, you would have thought you would see a little more softness. at least in the implied volatility numbers. we are not really seeing that. markets have been pretty illogical for the last decade. a lot of stuff has been thrown up there which is not come to fruition and i get the sense that markets are basing on that. the immediate risks to the small.are if this were to escalate as time goes on, there are risks out there. what would be the trigger? what would we have to see in this escalation that is the heart of a trade war between the u.s. and china to see a meaningful correction in equity markets? peter: i think it is a slow burn syndrome. iff war were to ratchet up, there would be a shock. if that impacts bond numbers, that is the point i would expect the markets to soften, but that could take six or 12 months. in that time the whole thing coul

from commerzbank's perspective, this is part of a restructuring, simplifying, stripping out costs. banks. ♪ >> dell has announced plans to trade publicly again. they will be buying out dbm t tracking stocks, reflecting a big deal. >> you were definitely not the only one who didn't understand the deal.this was very convoluted . surprising it does -- surprisingly, it does simplify their structure. what they are doing as they are buying their tracking stock for vmware. they are not buying vmware, which a lot of people expected them to do as part of this process. don't see how this full buyout of the tracking stocks also their problems. they were looking at these types of transactions because they have this hefty debt load from their buyout with silver lake. this doesn't necessarily solve that. the benefit of doing these series of transactions was to take advantage of vmware's balance sheets, and they are not doing that. ♪ results, a little bit short of the bar. tell us what you think could have been behind this slight earnings miss. inas management warned back april when they had a ca

. >> socgen is acquiring commerzbank exchange traded products and market making operations, part of an plan in europe's largest economy, the french bank taking over asset management businesses in london, paris, hong kong, and zÜrich. any surprise in this? >> not really. this was a well flagged deal. if you think about it, they have lexical, who is big in the etf space. so germany is a big market. we don't want -- we know it's a very small dent to capital. and from commerzbank's perspective, this is part of a 4.0 restructuring, simplifying, stripping out costs. no real surprises. it should be mildly beneficial to both banks. ♪ >> dell has announced plans to trade publicly again. this part of the deal, dell will be buying out dvmt trading stocks, reflecting a big deal. >> you were definitely not the only one who didn't understand the deal. this was very convoluted. surprisingly, it does simplify their structure. but like you said, what they are doing is they are buying the tracking stock, dd mt -- dvmt, for vmware. they are not buying vmware, which a lot of people expected them to do as

. >> socgen is acquiring commerzbank exchange traded products.nsion plan in europe's largest economy, the french bank taking over asset management businesses in london, paris, hong kong, and zurich. any surprise in this? >> not really. this was a well-flagged deal. they are big in the etf space, and also the investment bank for them was another underperformer. germany is a big market. we know it's a very small dent to capital. from commerzbank's perspective, this is part of a restructuring, simplifying, stripping out costs. no real surprises. should be mildly beneficial to both banks. >> dell has announced plans to trade publicly again. as part of the deal they will be buying out dbmt tracking stocks, reflecting a big deal. i don't understand the deal. >> you were definitely not the only one. it is very complicated, very convoluted. surprisingly, it does simplify their structure. what they are doing as they are buying their tracking stock for vmware. they are not buying vmware, which a lot of people expected them to do as part of this process. i

jen acquiring commerzbank's business.ina market.tering its to raise rates towards the end of the year. frenchith us is simon and gorman. is it time that we see the expression raising rates? it has been in lockstep with the ecb. >> i think the strength or burgeoning strength on inflation suggests there should be a tightening trajectory to the monetary policy. i take issue with what some of riksbanke isthe likely to be implemented. an economy like sweden with such with thenks eurozone area to out of step with the ecb, this is a problem. if it is tightening policy, it is much more of a q4 2019 problem. >> why would you go in front of the ecb? >> you would only go if you were concerned with domestic issues in the housing market. consistent with a lot of other central banks, are they going to use macro intervention as we saw with the rba statements overnight which don't necessarily you with the tools that address domestic housing problems in the economy's right now. athink you have to look whether the ecb q4 2019, that is prob

tom: commerzbank has lived negative interest rates.ative interest rates meant for broad society was in europe? max: i think it is particularly cumbersome for banks that are more retail focused compared to get early in the eurozone -- retail focused, particularly in the eurozone. if you don't see rates moving, if you don't see slightly steeper curves, bank stocks don't really make sense is a real basis for performance. for broader society, it basically tells us when you look at real estate, for example, in germany, you can see where the money is going. into not really going consumption. people are borrowing money to buy houses. i wouldn't call it a bubble, but it is really boiling at the moment. tom: thank you so much. this is a terrific briefing coming off of the sort of haphazard start the second half of this year. again, jobs day tomorrow. your job is to tune in at 12:00 noon. mr. scaramucci will stop by on how they communicate at the white house. rumor has it david westin will get a briefing on the new york mets, 14 gives behind. sc

commerzbank says the sale of the unit was in line with its current strategy, which invovles divestingpitalfor the firm's core banking franchise. facebook has another glitch. facebook has admitted a glitch in its network allowing people you blocked to temporarily be able to see your profile. the company said it would inform those affected — about 800,000 users — via a pop—up message. does that mean that you can see my profile? have you blocked me!? firms are running out of patience over the lack of progress in the brexit talks, according to a major business organisation. the british chambers of commerce has published a list of 23 "real—world" questions that it says urgently need answers. the list covers subjects including vat, tariffs, customs and regulations. just when you think you know somebody! blocked! the us has moved to block state—owned china mobile from entering america's domestic telecommunications market, citing national security concerns. it comes just days before the world's two largest economies are expected to impose trade tariffs worth billions of dollars on each other.

grace peters from jpmorgan and peter dixon from commerzbank.xt, italy has the distinction of having the worst loan ratio. so what can they do to turn around india's debt problem? we discuss that next, this is bloomberg. ♪ francine: economics, finance, and politics. this is "bloomberg surveillance." i'm francine lacqua here in london. india is closing in on italy for the biggest the sanction of having the biggest of bad loan ratio of the world's biggest economies. this as their biggest bank forecasts worsening debt problems. for the latest, our south asia editor joins us from mumbai. thank you for joining us, will italy's that loan ratio top italy to become the worst in the world? yeah, obviously, they don't want that to be the distinction. but looking at the numbers, 14.4% bad loans, india is at 11.6. they expect that next year, it will be a long 12.2. far a said that, so lovely bad loans have been from the steel industry, and our reporting shows us there is going to be a next wave of bad loans hitting indian banks. that will be from the power

deutsche bank spoke to shareholders about a possible merger with rival commerzbank.scheyou look bank. you don't own any deutsche bank. what would it take for you to go in and buy some? jpmorganports about looking to buy some, would that make you take a second look at the bank? david: not really. there are a couple of problems with deutsche bank from our viewpoint. we need better transparency financials. so many of their profits from the global market business are not so strong. they have a widespread of global markets businesses, but there are other strong players, credit suisse, ubs, morgan stanley. in their home baking markets, in germany, it is very difficult for companies to make money in retail banking. their core business should be should beeir core retail banking, and they cannot make money there. nobody can make money in germany's retail banking. this?ne: what should, look for businesses, and we know quite its release is -- credit suisse is growing, a reformulated global markets business trading at 7.5 to eight times normal earnings. why look at deutsche bank

tom: where does commerzbank think there is any potential alpha in the fall? now, we heard about the japanese yen. we are looking at the boj meeting next week. this is something that could be very interesting as the japanese yen is still seen as a big safe haven and now there are some it is possible that the boj will try to find further ways to ease monetary policy. this might be something that the market is not prepared for. tom: within that, what is your call for the yen then? see downside risks to the japanese yen because it should be clear that it will be very difficult for the bank of japan although there is no room for the bank of japan to reduce easing. however, the big obstacle will be whether they succeed with their communication. they clearly do not want to reduce the degree of monetary policy extension however they went to reduce the negative impact of this ultra-easy mode -- monetary policy. if they do not get this perfectly right, there is a risk of a temporary move of the yen. francine: looking at the japanese yield curve -- a pretty dramatic day

in, fxlet me bring you strategist at commerzbank.the event that we get this in no deal scenario, could you see cable falling to 1.2 or even lower? >> yes, i could. the reason being i could imagine that market reaction, at least at this point, would be even greater than it was with the brexit referendum. looking at options markets, for example, i think the market is still underestimating the risk becausedeal situation yes, heading prices have increased in the last couple of days due to the political developments we have seen. but they are nowhere near the levels we saw prior to the referendum, and that tells me the market is not prepared for a no deal situation. what point if sterling falls do you see a buying opportunity? what is your entry point? point, muchthis depends on the political developments and also on monetary policy. actually, i would be quite reserved about pound drops at the moment. despite the political developments, i think uncertainty over monetary policy outlook is relatively high in the short-term. we are still wai

the commerzbank unit generated about $406 million in revenue last year.oomberg business flash. julia: thank you very much. the ipo market is open for business. initial public offerings in 2018 are at their busiest in years with biotech leading the way and even more companies expected to go public. for more on the ipo market, we are joined by kathleen smith, renaissance capital -- also still with us is burns mckinney of allianz global investors. great to have you with us. kathleen: thank you. julia: 75% of the ideas we have seen so far are tech or biotech. this is a blossoming industry. kathleen: the technology ipos are up to the 2% on average, so and therns are the fuel returns and at the markets have .een very strong for thes it just a grab new issues because that would be my one concern, talking about that level of performance. something wrong in the pricing to see that level of optimism. kathleen: that is a good question. we often track how the ipo is priced relative to the range. on average, it has been within the range and then we track the first-day

tom hallett: we looked at the merger with commerzbank. it makes financial sense.lack of strategic overlap, which leads to limitation challenges. we do the timing of merger talks, they are premature, they are in the midst of restructuring. deutsche bank, limited cash regeneration, execution risk. used for theuld be shift in revenue composition and a mining the network. -- streamlining the network. much more medium to longer term. tom: give us an insight into the future of revenue. permeating their presentation is the battle over revenue, lessening, stability and the hope of revenue growth. i do not buy it for a minute. 90 days out -- how do they stabilize revenue? tom hallett: a lot of it depends on the industry. tom: agreed. tom hallett: low volatility, it is summer, there is a seasonal slowdown. the main part is to do with, retention, morale, what they can do with the front office workforce. you can see that in the increase. they have had to pay out a lot to staff to retain them. they have increased the variable comp going forward in order to keep that staff. i s

commerzbank has a real easternof a study of europe.hat is the state of the eastern european economy? we are only 54 miles from estonia across the baltic see. poland,m estonia and what is the vibrancy of the economy if these -- as these two leaders meet? max: that is interesting particularly to em as a whole. 2017, everyone thought this would be a spectacular rebound. speaking of russia for example but also brazil. those are the economies we were thinking what come out of patchion or out of a soft and rebound in 2018 and help us with globally synchronized recovery. that is not happening. that is the story of russia. in a more regional context, if you look at the ce three hungary andoland, the czech republic -- what we downee there is the slow in the data in germany that the other countries are also taking a hit there. , as a cross about us aboutategist, tell currency as a litmus paper for continental europe. not so much euro-dollar or eurosterling but if you look at euro versus the polish zloty or the russian ruble -- what do they tell