put yourself in the room with mario draghi.er one question to give you clarity? >> aside from trying to understand their intention, i would want to know better through the summer means. iswhat degree that contingent on how the economy evolves, is that something they threw out as a way to make the market, down from their promise to end bond purchases towards the end of the year? to what extent are they able to continue to expand their balance sheet if the economy does turn south in 2019? that is an issue markets are not focused on at this point. at some point the ecb may need to extend, how might it do that? david: we talk about the fed not having very much ammunition. at least they have something to work with. >> there are bonds they can buy from the private market. alix: when they wind up hiking is it going to be 15 basis points, 25, how frequent? >> market consensus is anchored around 15. but, hey. it is an odd number. possibly they could go 25. 15 is the base case for most people. alix: -25 basis points is going to give a ni

draghi, what do you mean? three months might not seem a big deal but to people in the market that is a big deal. if they are pricing for the ecb to move at the and of the summer but mr. draghi means at the beginning, that could do a bit to the curve. the market does not seem to be racing in an increase until december of 2019 which is months past summer and also pass the time mario draghi retires from the big chair. is it possible that he leaves without raising rates? that has been the general assumption. people have been working on that that mario long time draghi does not want to be the man that raises rates, he wants to pass that on to someone else. it is possible that will change and we may hear about it today. then again, mr. draghi has been good at putting these things off and letting someone else discuss it later on. it will be an interesting day. matt: i'm slowly. thanks for your time. mark cranfield, bloomberg mliv strategist, you can follow his inside -- insights and the rest of the teams. we will sho

mariohappy anniversary draghi. years ago to the day when draghi pledged here in london just before the olympics in 2012 to do whatever it takes to save the euro. after that we have ecb meeting today, that was a shortened press conference, that of a nonevent. the ecb has to decide how to handle its maturing bonds once it starts buying or stopped my new assets. the ecb announced it didn't talk about that issue today. this isnteresting is what this chart tackle. the average maturity portfolio of the average maturity of a bond portfolio is declining and is inspected to do so over time. will that tempts the ecb to try something like operation twist which happened in the u.s., or the yield control policy in japan? the green light is the ecb announcing its increases in monthly bond purchases, the red line when they dropped its monthly purchases and the line the ecb announcing the end of qe. as you can see, the majority of the bond portfolio is shrinking. we are awaiting any news on this, and they didn't even discuss went

we may get some more clarity from mario draghi about this.cause if you look at the differences in the translations, the wording is slightly different in different languages, so it will be interesting to see what he says there. the bond is very much in focus, alessandro. what are we likely to hear about that? maybe not: well, much, because this is a discussion that the ecb is still only discussing, so it may be a few more weeks or months before they get to the conclusion. what is at stake here is what is the ecb stops buying new assets in december of this year? very unevenis is a profile, because in one month, you may have a lot of maturing bonds, so you have a lot of money to invest. so this may create volatility in the market. what the ecb will decide is whether it will just follow it willally, whether take a sort of a bit more active approach in the way that they can smooth out the process, smooth out the differences. asset yieldome an curve management, but of course the ecb for now is different from that. tom: alessandro, thank you so much

but it is something to keep an eye on, as mario draghi has said he is doing.thank you so much, david powell. our senior economist in london. vonnie: time to check in on the bloomberg first word news. here is court name. courtney: a move that increases british primet minister theresa may will face a challenge over her brexit policy. boris johnson has resigned from the cabinet. he was the face of the brexit campaign. his exit sends a message to those who voted to leave the european union that their decision is being betrayed. theresa may defended her policy in parliament today. >> it is a proposal that will take back control of our borders, money and our laws. but do so in a way that protects jobs, allows us to find new trade deals, and keep our people safe, and our union together. courtney: last night, brexit secretary david davis quit. he says the play from may puts the u.k. in a weak position. president trump making it clear where he stands on nato before the alliance's summit in brussels. he tweeted, "the u.s. is spending far more than any other country." he

mario draghi six years ago said mario draghi six years ago said whateveor where you trade,at yo, you'lly $4.95. t takes. fidelity. open an account today. >>> scott walker here's what's coming up on the halftime report. how many more tech stocks need a reset after facebook's plan. we debate where the high definition flying sector heads from here. >>> and call of the day comes from one of our own, jim leventhal. find out what the options market is telling them about stocks set to move, straight ahead, carl, about ten minutes away see you in a few >> sounds good, scott, thank you. >>> let's get over to the cme group and the santelli exchange. good morning, rick. >> good morning, carl. six years ago today was mario draghi's big day i remember quite clearly many believed it wasn't necessarily super scripted, maybe even a bit of it off the cuff but whatever it takes did work although there has to be an asterisk we'll get to that soon consider let's go back in time two year shots in europe was trading minus 05 you see that on the chart. that starts july 1st of 2012 it is currently trading minu

mario draghi sees broad-based eurozone growth ahead. 8:00 a.m. inthat sydney. two hours away from the open here. ramy: and it's just past 6:00 p.m. here in new york. over the next hour we will look at how the action on wall street will play into your asia-pacific trading day. let's get straight to it, because it was definitely the tech story continuing along with earnings, after-hours about amazon as well as intel. rightn see those trading now. amazon is up by little more than 3% after the quarter profit beat estimates. but intel, even notes top and bottom lines of the, that is ahead is for a slowdown. let's take a look at what happened on the averages here. the dow up .4%, but it wasn't messy picture, all over the place here. , with no00 down .3% surprise, information technology being the biggest sector weighting that down. down, as youourse can see at the bottom of your screen, 19%. wiping away $120 billion in just this one trading session. also the biggest one-day deterioration in individual well as well. not a great way to make history there. take a look at

and draghi's confirmation.b may use today's decision to settle its qe exit timeline and clarify when it will next hike rates. .hat is at 12:45 p.m. u.k. time, welcome. we are talking about shell. adjusted net profit for $.69 billion, below the estimate, significantly below of five 18 7 billion. she'll say the conditions progress well and they are cutting their debt and the oil price positions. is subject to conditions. this is where the disappointment was, they did not give us a share buyback. it is there. there is a buyback. we have a $25 billion share 2018ck from shell in through 2020 subject to conditions. that is the key piece of news. there are 16 key integrated companies out there according to macquarrie. the cash flow, the profit misses but a buyback in lieu of competition. join us later to discuss all this but let me give you the anglo american numbers. that is below the market estimate of $1.29. that would be an escalation and trade wars, debt, $4 billion and tda $4.6 billion. there is approval in deve

be reduced this fall from thirty billion euros a month to only fifteen billion euro some months mr draghi also shared some general assessment about the european economy how it's doing let's have a listen to what he set. while uncertainty is notably related to the global trade environment remain prominent the information available since our last monetary policy meeting indicates that the you are economy is proceeding alone is so broad based growth. meyer draggy the financial guru how many call him here they are speaking he also found positive words about the tram yorker meeting last night in washington saying that this seems to lead in the right direction. done in frankfurt thank you plunging shares of wired to more than one hundred twenty billion dollars of facebook's market value they fell as much as twenty percent on thursday the most in its entire history marked marked the largest ever loss of value in one day for an american traded company one reason is facebook's weaker than expected growth probably due to the effect of a data privacy scandal the tech giant's costs also continue to r

we will hear from the ecb president's mario draghi and get a new reading on u.s. inflation.e have a rate decision in canada, u.s. bank earnings, and political meetings in europe including the one between president donald trump and the u.k. prime minister theresa may. , ira jersey, krishna memani, and iain stealey . just some final thoughts on the inflation story. to,yone i've spoken out front.en what do you see things going now? a cyclicalom standpoint, we are going there and we may overshoot the 2% target. the fed is being really smart and basically making up stories to make sure they do not use the data point to tighten policy aggressively. that is the right thing to do from a policy standpoint. otherwise, they wind up with policy mistakes. >> it is not like the market is telling you there is going to be runaway inflation. ,0-year inflation breakevens that is not runaway inflation. if you saw the break even curve of being very steep, thou be something to be concerned about where the fed would be fight -- i think more. the market is telling you that inflation is not really

what does that mean for inflation as we await mario draghi's press conference later today?e's been so many questions around what tariffs, ultimately seen as a tax on goods, means as inflationary pressures >> the tar ref iffs we're talkig about are so small compared with the overall size of the economy, i don't think they're going to have an impact on the overall inflation rate they may affect some relative prices goods become relatively more expensive than other goods, but they're too small an item into the basket that is used to calculate inflation. when they look at the agreement reached yesterday, though there's some uncertainty, don't take this as being ironclad yet, think more about what it will do to the real economy rather than what it will do to inflation if there's an impact on the exchange rate, it will be via the economy. that's where they should be concentrating. >> you're talking about a small fight here compared to what's going on at the moment between the u.s. and china, which is still unresolved how concerned are you about the global economic impact if we ge

we seem to have a clear path now from mario draghi and the ecb.onfident are you we can see rates increase and how important is this to your business? christian: this management focus now on the next 18 months. we have set ourselves clear goals for the next 18 months, for 2018 and 2019. we are saying we want to have a return on equity at 4% at the end of 2019 and that does not depend on a rate increase. hence we have to plan what we can actually influence. that is cost, that is capital, and that is what we are doing. of course, it would be nice to have a rate increase, however that is not in my hands and this is not an underlying driver of the next 18 months. to be honest, it is always hard to predict rate increases and therefore this is not part of the plan of the next 18 months. emma: coming up on "bloomberg best," more of the week's top business headlines, including a national vote in pakistan. and the business world bids farewell to a legend. fiat chrysler ceo passes away age 66. >> he referred to himself several times as the fixer and had quit

the week ahead featuring comments from mario draghi and the new numbers on u.s. inflation.h more in that. from new york, you are watching bloomberg "real yield." ♪ jon: i am jonathan ferro. this is bloomberg "real yield." it is time now for the final spread. coming up over the next week we , will hear from the ecb president mario draghi and get a new reading on u.s. inflation. plus, we have a rate decision in canada, u.s. bank earnings, and political meetings in europe including the one between president donald trump and the u.k. prime minister theresa may. still with me, ira jersey, krishna memani, and iain stealey. just some final thoughts on the inflation story. everyone i've spoken to, you have been out front. saying, we will not get out -- inflation in any aggressive way at all. what do you see things going now? krishna: from a cyclical standpoint, we are going there and we may overshoot the 2% target. i wouldn't be surprised. the fed is being really smart and wise and basically making up stories to make sure they do not use the data point to tighten policy aggressivel

mario draghi recently warned that they were underestimating the risk of tariffs. so he will certainly, if the tariffs did not materialize, he will be taking a sigh of relief and that will increase the probability of tightening in september of next year. vonnie: so what do the euro traders do in the meantime? is it possible the euro could continue to strengthen? david: the ecb is tightening, normally that is positive for currency. and the expectations for tightening have been moved up a little bit. the market was already leaning towards a small hike as soon as september of next year, but it had not been completely priced in. an thisd story has moved the market and those expectations have increased. that is likely to continue, those expectations likely to continue reacting as the market fine-tunes the expectations and we think that will be in september of next year. in all likelihood, it will be a mini hike of 15 basis points, because that will restore the corridor of 25 that has existed between the deposit rate, the main refinancing rate, and the ecb's third rate.

draghi: it only creates protectionism.ong, united european union can help reap the benefits of economic openness while protecting its citizens against unchecked globalization. draghi also called for the eu to "lead by example" in lowering trade barriers across the globe. once a provision written into the draft of this country's new constitution that would require a new presidential election before being implemented. the spokesman said the move should and bank speculation that beyonds to expand office 2022. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am kailey leinz. this is bloomberg. david: thanks so much. late last week, british prime minister theresa may thought but she finally brought people together to negotiate, but then david davis thought it over and decided he could not go along with the plan, so he quit. a few hours later, it was her or and secretary's turn, boris johnson, he quit as well. welcome emma ross thompson. thank

be reduced this fall from thirty billion euros a month to only fifteen billion euro some months mr draghi also shared some general assessment about the european economy how it's doing let's have a listen to what he said. while uncertainty is notably related to the global trade environment remain permanent the information available since our last monetary policy meeting indicates that the euro or economy is proceeding alone is solely be used groups. meyer draggy the financial guru how many call him here there speaking he also found positive words about the tram yorker meeting last night in washington saying that this seems to lead in the right direction. in frankfurt thank you. mentioned posted some pretty bad results today the german comic has said second quarter earnings were down twenty nine percent on the year even though the maker of must say he's been sold more cars and trucks than most that terrorists are partly to blame for the profit shortfall in europe dunn was also dealing with a major recall of diesel car. plunging shares have wiped more than one hundred twenty billion dollars

the week ahead featuring comments from mario draghi and the new numbers on u.s. inflation.more in that. from new york, you are watching "bloomberg real yield." ♪ omberg real yield." ♪ jonathan: i am jonathan ferro. this is "bloomberg real yield." it is time now for the final spread. coming up over the next week, we will hear from the ecb president mario draghi and get a new reading on u.s. inflation. plus we have a rate decision in canada, u.s. bank earnings, and political meetings in europe, including the one between president donald trump and the u.k.'s prime minister, theresa may. still with me around the table, ira jersey from bloomberg intelligence, krishna men money from oppenheimer funds, and iain stealey from j.p. morgan asset management. just some final thoughts on the inflation story. out of everyone i've spoken to, you have been out front, saying we will not get inflation, overshooting and to the upside in any kind of aggressive way at all. where do you see things going now? krishna: so from a cyclical standpoint, we are going there and we may actually overshoot

we seem to have a clear path from mario draghi and the ecb.re you that we could see rates increase and how important is to you? christian: you know, in particular, we focus on the next 18 months. we have set clear goals for the next 18 months. we are saying we want to have a , andn on equity's of 4% that does not depend on a rate increase. we have to plan what we can actually influence. that is cost, capital, and that is what we are doing. tocourse, it would be nice have a rate increase, but that is not in my hands. this is not an underlying driver for the next 18 months. to be honest, it is always hard to predict rate increases, and therefore, is not part of the plan. francine: that was christian sewing, the chief executive of deutsche bank. let's get straight to frankfurt to matt. great interview. he seemed quite optimistic, does he have a real reason to be optimistic, or is he just talking? the share price is muted, but i think the business reported its weakest second quarter since the financial crisis. right, so the reason he is optimistic

and mario draghi the new and departing directors of the european central bank sent a secret letter to bonus going to be exposed by the korean adela's newspaper. they remind him of the basic measures expected of italy. structural reform favoring competition and italian bonds including the full liberalization of local public services through large scale privatization. that secret letter. caused quite a backlash because the e.c.b. has no institutional jurisdiction to enforce policy making in an e.u. member state. it was judgment the judgment of the e.c.b. what was necessary in this absolutely dramatic circumstances where forty percent of the g.d.p. of the. attack one of. the berlusconi government implemented many of the measures proposed in that letter while at the same time secretly trying to introduce provisions to private eyes water. a proposal that italians had rejected in the referendum. the constitutional court intervened and said no you cannot reign should years. legal provisions been repealed as a result of. this calls to european commissioner olli rehn to write to mr berlusconi

mario draghi was constructive. he sees hope from that meeting yesterday.his meetingte of and one can say something general, it is a good sign. it's a good sign because in a sense, it shows that there is a willingness to discuss trade issues and a multilateral dream work again. >> two more big central-bank meetings to go. everyone will be keenly awaiting the policy statement might wish to see if they've gotten concerned about trade. that's the winner. the one that has everyone on the name -- on the edge of their seats. ramy: let's pick right up on that and bring in the sth founder and ceo. interestingthe most or concerning central-bank out there, would you agree it is japan? >> in the near term it is. they have the biggest footprint in their markets by far of the big three central banks. if you look at the amount of want purchases. people look at the magnitude of the change and it is like watching paint dry. i they going to come in at nine or 10. but the size is so massive. that is the last of the three mohicans to so to speak. moving toward normalization.

maybe that is why draghi is more cautious now., there's no plan to ofe rates for the summer next year. this is a simple chart showing inflation as the blue line. inflation did spy in 2008, which is why the ecb did raise rates in that year, but it is good to look back on history and see where we were and see where we are. volatility, this is something i was telling you about earlier, we are seeing big moves in the brexit due to economic data. sterling near a seven-month low but the auction market is carrying on as if little is happening because volatility on maturities beyond the month has barely changed. this is when your volatility and remains below your today levels among other recent averages. pretty much suggesting investors are not too concerned as of now about the potential outcome of talks between britain and the eu. keep an eye on that chart and shares of glencore. i will not talk too much because of what we will chat about in further detail in the second but 8% is where we are now. we were down by 13%, the most in march s

and european central bank president mario draghi joined the critics of u.s. treasury secretary steve menuhin on thursday druggy pointed pointedly suggested that the nugent's comments that a weak dollar is good for the u.s. economy was a violation of an agreement reached with washington in october to avoid.

and european central bank president mario draghi joined the critics of u.s. treasury secretary steve menuhin on thursday druggy pointed pointedly suggested that nugent's comments that a weak dollar is good for the u.s. economy was a violation of an agreement reached with washington in october to avoid competitive currency devaluations druggy went on to say several members of the e.c.b. governing council quote expressed concern that this was broader than simply the exchange rate it was about the overall status of international relations right now . in the us aid trump appointee is pushing a major change to the legal process for settling alleged labor law violations peter robb general counsel of the national labor relations board or n l r b outlined plans to affectively demote the regional directors who resolve about eighty five percent of n.l.r.b. cases by placing them in a new smaller tier of civil servants who could overrule the regional managers the changes expected to tilt the system toward ruling in favor of employers. all right let's head back now to dav

not only draghi.b it is part ofies, the institutional memory of the ecb right now, which explains why they would rather keep interest rates too low for slightly too long within starting a rate hike far too early because they do not want to repeat the 2008 102011 mistake. mark: could we see the ecb wellening policy may be the fed, if it is the back end of next year coming to the end or has ended its tightening policy, how unusual that the? carsten: at least -- how unusual would that be? in six: i would say months to nine months, it would not be uncommon. if the u.s. really was to slow down and stop the tightening cycle, we would get a discussion on decoupling of the eurozone from the u.s.. normally, six months to nine months it be the window of opportunity when they could hike interest rates, and then we will realize the eurozone could not decouple from the u.s. and the ecb will stop the hiking cycle. that is for sure the cycle of the ecb would stop much earlier and at the lower rate level than the fed

biggest thing moving the dollar overnight was mario draghi. he again was dovish. the aussie dollar was one of the biggest losers overnight. the aussie and yuan has been moving together more strongly and ever in recent days. are eachen -- they driving the other, as it were. there are internal chinese reasons driving the yuan down, and the australian dollar is reflecting global risk on and off trends. witht he yuann -- with the yuan today, we have trade tensions. money market rates have gone down significantly in recent times in china. that puts pressure on the yuan to fall. it also makes it really cheap to short the yuan. you are almost getting paid to do it. this caravan is going to go on until the pboc gives the signal that it has had enough. as goldman and others have pointed out, since that weaker yuan helps china in the trade space, there is no reason for them to seriously halt it. rishaad: a little excitement about the yield curve in japan, and ear control the 10 year approaching 1/10 of an percent. tell us why this is important. garfield: at least until earl

starts and mario draghi to some extent is joining.blem is if you look at where we were in qe as we started to do our taper, those levels are about the same levels we are today between bank of japan and other central banks, they've made up the difference the point of that is kind of hard to tell nothing really has happened yet. and the biggest issue of all may be europe and japan. with respect to europe, mario draghi understands that you have to take these things slowly but the problem with slowly is if there's a bad market signal, if we come to a point where there's an area like the taper tantrum and it isn't done or big percentage done, that's where it starts to get complicated, and bank of japan is a race. they're way in the distance. another thing that occurred today that is significant, we had the second quarter unemployment costs index a lot of things don't splash across on the headlines i cover. one in particular is private wage and salary growth was at a 2.9 year over year clip. that's a good clip because it is the best since t

and mario draghi the new and departing directors of the european central bank sent a secret letter to bonus going to be exposed by the korean newspaper. they remind him of the basic measures expected of italy. structural reform favoring competition and italian bonds including the full liberalization of local public services. through large scale privatization. that secret letter caused quite a backlash because the e.c.b. has no institutional jurisdiction to enforce policy making in an e.u. member state. it was judgment the judgment of the e.c.b. what was necessary in this absolutely dramatic circumstances where forty percent of the g.d.p. of the. attack went to. the berlusconi government implemented many of the measures proposed in that letter while at the same time secretly trying to introduce provisions to private eyes water. a proposal that italians had rejected in the referendum. courts intervened and said no you cannot rachid years. legal provisions to repeal as a result of. this caused the european commissioner olli rehn to write to mr berlusconi again asking for clarification. j

worried that the market misunderstood mario draghi. how tight can it get? with unemployment as low as it has been in 17 years, tomorrow's willarms payroll report show 195,000 jobs added. the question is will wages pick up as well. steel is off today. it was quite a show yesterday. i won't swear a state of the whole time, but look at this. this is amazing. it was spectacular. julia: i watched it this morning. the beauty of bloomberg is you can go back and watch it. david: that is terrific. it is not the only spectacular thing that happened. you were skeptical about your own country. julia: i know. david: they beat columbia. julia: i changed my mind. david: theresa may is boycotting it. of all the ones to boycott. julia: do we get to the finals? i am still cautious. more optimistic than i was earlier this week. let's look at the european markets. we have the auto sector outperforming. we had reports the u.s. and europe are discussing the possibility of a sero-tariff regime for imports. that dialogue is a good thing. european markets higher. for s&p futures, .

the press conference afterwards, mario draghi is going to get so many questions on that front.impact on trade, and move ahead with stimulus while the trade war may continue? >> we still need clarity on some statements from the last meeting. depending on the language, it seems like it shows a different description there. we will see how things go, kathleen hays, thank you. to abandon a $24 billion bid unless china make a last-minute move to approve the deal. telling bloomberg does not think beijing will give the blessing which isthe deadline just now four hours away. let's go to the senior international editor and all, saying look, the silence from beijing, we will be a dead deal? >> the ceo doesn't see any region -- reason to change the timing. forces beyond their control were at work here. it was 20 months and negotiation and they will have to pay a big bankruptcy is well that they would by $30 billion of stocks. it is costly but it looks like it will be ending. this deal, these companies have religious become a pond in this u.s. china spat? >> the timing is interesting right?

a decision from the ecb and mario draghi.his is "bloomberg real yield." ♪ jonathan: i'm jonathan ferro. this is "bloomberg real yield." we are live from jp morgan asset management. time now for the final spread. we get a decision from european central bank. we have a g20 weekend meeting of finance ministers. another round of earnings that include tech and european banks and gdp in the u.s. here is quick final thoughts. i am joined by bob michele. want to go over your for convictions. do you believe the federal reserve will raise former times -- for more times and then close? bob: absolutely. that brings the fund rate to two and three quarters to 3% depending where inflation is. that is a real yield of about 0.5% to 1%. that is still generous by historic fed terms, but not overly accommodative. they will have raised rates for 3.5 years. why not step back and see what the other central banks are doing and also see how the economy is doing? jonathan: that takes me to the second conviction. short duration. yields.are bearish on a

do you share the view of mario draghi? john: yes, by and large we do.tive is to continue on this very slow and careful path toward exiting maximum policy accommodation, and in the. time, tried to reverse some of the emergency measures in terms of negative rates that have been in place for it while -- for a while. things are evolving broadly as expected. the first quarter a bit weaker than expected, but things seem to be picking up. as long as activity stays on track, inflation should continue to evolve much in line with ecb's expectation. anna: yes, and the broader growth story for the euro. we saw data around germany coming in above estimates. clouds things -- dark might be gathering on the trade horizon, at least in the rearview mirror do you see things looking more solid the second quarter -- in the second quarter? john: yes. the concerns about the first quarter have largely been alleviated. clearly the issue around trade tariffs, it all depends how much that escalates. with are still pretty sanguine that what we have seen is about as bad as things a

that was something draghi mentioned last week.re being conducted within an existing multilateral framework. nejra: super thursday, the rate hike is priced in by the markets. but we look ahead to forecasts as well. the boe -- publishing new forecasts. mark carney mentions this. he says it is important to have. relatively clear messages. now they have to be accurate. should people in the country be oriented that rates are more likely to go up without not? yes, they should, because that is more likely, but not at a more rapid pace. i am already getting lost. we will also hear from the neutral rate. jill: very interesting decision. at the end of the day, we are getting you forecasts. there is a rate rise coming for not typically positive reasons. the potential growth rate of the economy is now just 1.5%. growth this year is expected to be 1.4%. that is still generating inflationary concerns. it could give some indication as to where policymakers see interest rates settling, what this new normal is post crisis. that could give househol

guy: how does draghi handle all of this? it out and given us an idea of what the timeline looks like. the fed is coming out later and it will be interesting to understand how the fed is thinking about the trade story. i love to know how draghi is thinking about that and how does the ecb staff factor this into their models? tim: it's difficult. it is going to be his job to figure out the ultimate steps that need to be taken. as with all things european, they will try to cobble together a solution and strategy that works for the next nine months. but the longer reaching issues that are to do with integration and the demographic factors that keep inflation low, there's not a lot they can do unless the get help from politicians. guy: he's been begging that drum for a long time. let's talk about where the markets are. wm on your bloomberg generates the world map. 1.5%, londonn outperforming significantly, down .5%. what we are seeing is the rest of the continental markets trading significantly softer. i'm watching the fair v

draghi need to do?e reviews does he need to take a more aggressive approach to normalize? >> we need to start talking .bout draghi the man he cannot look beyond 12 months for the simple reason that he will be impinging on the next president of the ecb's tenure. very politically, will be controversial. i want to go back to the textbooks you are reading it we need to go back to a start if we are talking about positive nominal yield, then we need to talk about debt cancellation. what should we look at? $235 trillion globally of debt. if that starts to be canceled of ofturned to a period the nominative positive interest rates, i think we are so far from that on a structural basis that we need to be looking at very different instruments at which this cancellation said top of the list. guy: thank you. to be there, the most important thing happening in sweden today is what is happening later today. coming up on bloomberg, stephen engle under his joining us. standard chartered bank. that conversation at 9:00 a.