i think president draghi fine-tunes the message, but they were already there in mid june. this is a reaffirmation of the ecb stands. it is a more collective view then central. mariol was basically draghi alone speaking. now he speaks on behalf of his government counsel. so it is not a change of direction, and i get this is why the market reaction is much less than it was at the time of the speech. do get that move for the ecb, what does that mean for the banking sector, which has been under pressure, as you can see from the gtb chart on the bloomberg. steadily underperforming the broader index since before the financial crisis. if you see the ecb move, and we have also heard from the ecb that they want to provide some relief for european banks. what needs to be done? relief is a way that the banks could make deposits at a slightly less negative rate, than the general deposit rate of the ecb. that will allay a bit of the pain, but you are right, there the be pain in terms of negative deposit rates from the ecb. that is bad for the bank for the profitability. even so, i thin

again, not what draghi would have wanted. thanks stocks have gone up because there was an expectation that next time we will see some structure.ring -- that is really worrying for the snb in switzerland. vonnie: let's get to some analysis of that. ecb president mario draghi sending a strong signal that stimulus will be set up after the summer break, with lower interest rates and renewed asset purchases on the table. have a listen. >> inflation expectations have been at historical lows for some time, so we have to consider admission, and i stress this, that we don't like this. vonnie: we are joined now by strategasnert, research partners chairman. did the ecb send a confusing message today? messaget is clearly a that is not resonating with investors. in the 1930's, there was the term that came about called pushing on the string. the idea that you're going to provide more stimulus to the european economy that is somehow going to work you have already $13 trillion worth of negative yielding sovereign debt seems very uninspiring

mario draghi said we will go lower.today but it was clear that will be the next move from the ecb. that statement also read is not just rates. we can look at anything. we can look at qe2. we can look at the tiering system, which many will tell you is a good thing, but it was a lacl

mario draghi has talked about it. we not done with mario draghi yet.this argument that if it had been a halt coming, mario draghi may have acted more aggressively before he leaves. with lagarde, does mario draghi have to do that? paul: i have not heard that argument but i find it quite compelling. i think draghi will be happy to set christine lagarde up for a spike or whatever the terminology to see it through if he does not do it himself. the chiefso empower economist who is a pretty dovish influence himself. it does feel like the shift in power in the governing council will be in favor of more dovish policy which could mean more qe. certainly that is what the market is pricing in. euro, it isst the the credit that the ecb will be able to buy, probably more spain , more portugal and those kinds of things. guy: what we make of the u.s. data today? number, we are still trading over 55, but that number is softening. how does that change my perception of what the fed will do and where i trade u.s. rates? isl: the market -- the fed going to do something an

draghi this morning.nversation with richard haass from the council on foreign relations, america's expert on ireland. this is bloomberg. ♪ ♪ mueller,ise after mr. yesterday was extraordinary on capitol hill, all sorts of opinion and analysis of the performance of mr. mueller and the republicans and the democrats. we will leave that to the pundits. francine: this is a performance in the house of commons. leader of the house of commons appointed. he is just addressing the house of commons. i think we are expecting boris johnson to address the house of commons and we will see if we have any idea on what clarity he will take to deliver brexit. tom: interesting to see these images of truly that changing the guard. mcmillan, to see such abrupt changes in the united kingdom. ,eremy stretch and simon french let's begin with the linkages of the ecb meeting to the fed on july 31. does chairman powell need to pay attention to the minutia we hear from draghi? simon: he probably did inevitably regardless of the action

asdid move a little higher mario draghi with speaking. idea is because they are not mulling stimulus, there are concerns that the german economy, the engine of europe, falls into a recession. when you have got those kind of concerns, it causes a risk-off kind of run to bund yields. nejra: it could be higher, matt. matt: maybe you could be correct in that thinking. on the other hand, you would think that as well if it is because of draghi, it has the same kind of move. it is definitely an interesting debate. you can see the timing of the schulz interview. i have got it surrounded in red. that is why i think that, you know, markets moved on the schulz interview. we did not speak until right after. nejra: matt and i are going to go for a drink and keep on talking about this. what u.s. second-quarter gdp number would traders need to keep a fed rate cut bet alive? kallum pickering has been patiently listening to me and matt sparring. let's talk about the u.s. we are looking ahead to this gdp number. in the context of everything we have had, wh

does not negate what mario draghi's message was and is.er is just a couple months away, so to my mind, the global march toward lower rates continues. paul: thanks for joining us. still to come, alphabet rose in late trading. we look at the highlights and potential future acquisitions. this is bloomberg. ♪ paul: you are watching "daybreak australia." a tale of two earnings as amazon court reallyreport results and google's parent company jumped in after hours trading while amazon went in a different direction. let's take a look at those amazon results first. how important is growing at sales to their growth and outlook? >> that was one area that was actually pretty strong for them. we saw about a 37% year-over-year increase in terms of their other revenue category, which is basically their ad actually, that was even though the quarter was interpreted as being somewhat negative because they missed on the bottom line, that was actually part of the report that was actually very strong, so that is encouraging that they are continuing to garner m

draghi became more prominent.o we could be back to a time where they become a very important person. anna: do you think she will do whatever it takes? erik: i certainly hope so, if needed. and she says she will. but this is the crisis you could think about. what happens if a major country one day needs it. how do they deal with the ones of the board who are opposed? again, she has led the imf well. we will see over time how we feel about her program and other things. and she has experience, she speaks well. but as an economist, i think you would like somebody who had been trained in monetary policy. anna: thanks for your thoughts. nielsenlsen -- erik stays with us. money managers are caught between assets. and bloomberg is live on your mobile device or dab digital radio. we will be covering the appointment of christine lagarde. this is bloomberg. ♪ anna: welcome back to the european open. 17 minutes until the start of equity trading. futures are pointing tentatively higher. tentatively higher this morning. u.s. fu

and draghi's dovish limbo. just how low can he go? the market sees an 80% probability of a cut in september. david: welcome to "bloomberg daybreak" on this thursday, july 25. a lot of earnings coming out. raytheon coming out, beating on earnings-per-share. they took up their forecast for the rest of the year, moving up now any premarket, basically on missiles. alix: defense, exactly. david: dow also out. dow had a beat on earnings-per-share. they took their forecast down to $2 billion and warned about global growth softening, and specifically having caution because of trade concerns. we will talk with the ceo of dow in this half-hour, jim fitterling. alix: also looking at other names like 3m, surprisingly reaffirmed its growth organic sales. , sor names coming in weaker when you have companies like 3m , that is positive. boeing is extending cuts, help withthem to their pricing power. terrible news for airliners, and then all of a sudden better. david: exactly. in the meantime, we have an announcement out of the turkish central bank. m

draghi made that clear.t was a misunderstood statement saying it would be gloomy, when he didn't mean today as in yesterday, that caused confusion. matt: why did we see bundy yields rise -- bund yields rise after the schulz interview? it seemed investigators -- investors thought they could let go of their security blanket buns because it's not that bad. the finance minister isn't considering extra spending. mark: i think there was two parts. definitely the interview with the finance minister was a part of it. i do think he's optimistic, given the german pmi's, given the iphone. we've already seen forecasts of gdp drop 20% from around 2%. it's incredible collapse that keeps going. i think it's impressive how optimistic he is. he also says it will be fine once the man-made problems go away, man-made problems being brexit. i would like to know when those go away. i'm not sure anyone believes they will have a final resolution. and then of course, we have the u.s. china trade war. again, i agree with him. i'm a s

christine lagarde nominated as the replacement for mario draghi at the ecb.ould be the first woman to run euro area monetary policy. after 20 hours of meetings, the european council agrees on new leaders. the next challenge, parliamentary approval. we have a live update from brussels. stabilizing the crude market has become more elusive for opec as supply cuts failed to stop a price slide. quick check on the markets on this holiday week in north america, the markets not likely to see any real volume. lackluster performance. it should be noted the markets are off the lows of the session, also off the highs. we saw the markets move higher not necessarily in reaction to the word that christine lagarde was appointed, but the s&p tracking back to breakeven. energy, materials both weak spots for that market. we have to take a look at european stocks. they have been doing pretty well. we are talking about them doing their -- posting their best half of the years since 1998. european cyclicals gaining against defenses as well. bond yields continue to drop him and not

but how hard would bit to fill draghi's shoes? president trump is nominating two members including one who is at least flirted with tying monetary policy to gold. and a charge your engines. the car maker who beats delivery estimates by the tesla by a mile and the stocks responds in kind. welcome to "bloomberg daybreak." i'm david west on in new york london. et fu in scarlet: it's yet another world cup final with the victory yesterday, this is team standoff's 11th straight win, surpassing norway which has strung together 10 straight victories. david: if they could get the pay equal to the americans we would have all -- would be all set. finals on sunday, right? scarlet: yes, it should be a great match. can't wait. david: neither can i. scarlet: looks like we're going to have a higher day on wall street, building on gains after the s&p set two record highs the last two days. a lot of data coming up over the next hour and a half. we've got factory orders, durable goods, i.s.m. services and euros, slightly firmer against the dollar. p

present draghi making the investors wait until september.he ecb teeing up extra stimulus, fueling inflows into every major bond sector. from high yield to emerging-market. we begin with the big issue. something in the data for both the hawks and the doves. >> the u.s. economy is doing very well. >> the u.s. consumer really dominates in terms of the overall gdp number. >> headline gdp growth is in line with what everyone expect it. >> wage growth, income growth has been relatively strong. >> government spending data, quite strong. >> there is some upside risk to the economy. >> the consumer side of things and the labor market side of things, but the manufacturing is under pressure. >> pretty significant dislocation between the industrial economy and the consumer economy. >> it is the composition of the data here that is worrying the fed. >> potential pockets of weakness. >> we do see a further deceleration in the u.s. economy going forward. >> ultimately, we are moving back towards a lousy trend. jonathan: joining me around the table here to

but then perhaps when draghi started talking or perhaps when better u.s. economic data came out, it sold off so did the ur euro, which has bounced back and stocks that have remained down one reason could be draghi was fairly down on the economic outlook. another could be the market wanted action now, not in september. melissa's shaking her head whatever the reason, one important impact fed fund futures raised the odds of a 25. not sure all of that is warranted. but that's what the market did and that's my best attempt to make some sense out of a really curious trade this morning >> you set it up as manufacturing is terrible. getting worse and worse and ended it by saying there's no reason to be gloomy. session risk isn't that bad. >> he says a low risk of rescissir rescissir recession but seemed to downgrade the third quarter. >> we saw a dip in the markets a couple of hours ago and art cashin made this commentary that maybe market participants war thinking that perhaps the fed wouldn't be as aggressive given the fact draghi refrained from cutting rates, w

and they have draghi, who is -- we should have draghi instead of our fed person.t week, he said lower interest rates, and we're going to stimulate the economy. they're going to put money into the economy. they're e going to force money into the economy because europe is doing, you know, okay, but they're not doing great. and with us, we have a fed that keeps raising interest rates. i mean, you explain that one. and this was not what i thought we had. so we have -- maria: look, if things are so great in the u.s. and the economy is doing as well as it is, hey, we're at a 51-year low at unemployment, 3.1 growth in the first quarter, why do we need interest rates to go lower? why do we need a cut in rates? >> for one thing, we have a lot of debt. i want to get it out, i want to pay it off. but what we really have, we have to stay even with these people. these people are devaluing their currency because they're not doing well against us, and so they devalue, and we can't, we are no longer on a level are playing field. when they stimulate their economy and we have, we h

the ecbs mario draghi signaling futures ahead.0 points on the dow the busiest day of earnings season so far. tesla shares are down double digits after posting a wider than expected loss on dispointing revenues on the opposite side, 3m leading the dow reiterating it's outlook for 2019 and facebook, better than expected results after getting hit with that record ftc fine, but warning a growth slowdown is ahead. guys, interesting the agree to which stocks are moving on the print. i mean, you are getting routine 5 to 10% moves in some of these names. >> i went into 3m to see if there are any signs of improvement in the outlook that's an industrial bellwether. i think shares were hit so hard coming into the print. sales were still down 2.6% it was still mediocre growth organic sales down 3.9%. the only category that actually saw growth was health care seas consumer down. automotive, electronics a headwind if you are looking for a reason to celebrate in terms of what it's going to mean for the global economy, didn't necessarily get any

to draghi coming in. would say she is more qualified than he was when he .ook the job she knows all of the challenges the european banks face which are pretty significant. shery: as we were speaking, this news breaking on the bloomberg. president trump saying he will be nominating christopher waller to the fed board. we have seen the president really not too successful in those nominations for the fed board. what can we expect in terms of fed policy as we see the rest of the central banks around the world following suit and easing policy? just to elaborate more on the breaking news -- president trump tweeting "i'm pleased to announce it is my intention to nominate waller, phd, executive vp of the federal reserve bank of thing lewis to be on the fort of the federal reserve. " chris: this of course following on the news, the recent news that he had looked at james bullard, the president of the st. louis fed and bullard declined. shery: as dovish as they get. chris: and happy with his job. i think this is a

she will continue the policies of mario draghi.lle believe that she has the necessary skills in order to head the european central bank. >> i do believe that christine lagarde has the enormous broad experience. she knows how to cautiously address the issues. she will be very committed and engaged. francine: let's get another take on what madame lagarde will need for euro area of monetary policy. we are pleased to be joined by the former vice president of the ecb, vito constantia. and hans redeker still with us. always a pleasure to have you. is it an issue that madame lagarde is not a trained economist given that central banks have to become more creative? vito: she has been heading the imf since 2011 where, of course, .he got a lot of experience she is very experienced in leading these institutions, which is very important. she is respected by the financial sector. she is a good communicator. and she knows all the european problems. the imf has been engaged in europe in several programs and herself was participating in clubmeeting

draghi getting set to announce more easing.ould investors be looking out for in the rest of the year? our guest is with us for an exclusive conversation. we were talking about pe. a lot of chief executives are going ahead to their plans and maybe rationalizing more. what do you think will be the catalyst for the spending you are talking about? something needs to happen on the markets. i don't know whether it is a correction or the confidence to get back in. >> i think they are spending already. the biggest buyers of the assets have been -- if you look at skincare, it was a pe purchase. same with unilever. they are deploying there currency to work in partaking in all of these spinoffs, etc. we talking about what companies are right for managing things better and they're casting their eye over the entire landscape of potential. francine: where do you want to grow jpmorgan? viswas: for us, organically some where maybetle gaps we can do better asset class by asset class. we placed a lot of emphasis on organic tweeps. as i said earl

draghi can pull out a magic trick. let's talk about foreign exchange even though we were talking about dollar weakness earlier on in the show, today the dollar is trading stronger we're seeing euro is trading softer versus the dollar we're trading at 1.1130. we had that weaker german ifo numbers coming up. cable is trading below 1.25. not a lot of movement in the last 24 hours as boris johnson got confirmed as prime minister and has announced a cabinet reshuffle. you could say a lot of risk premium is priced in something to monitor over the coming weeks >>> let's talk about the u.s. markets. yesterday we had yet again record highs for the s&p and nasdaq today the indices are seen slightly mixed s&p one-point higher the dow 22 points higher we're still in the heart of earnings season. lots more to come today including alphabet and amazon. >>> republicans and democrats claimed victory after robert mueller testified before congress for six hours on wednesday. mueller answered questions about his investigation into russian

what draghi move before the fed? chris: that's the key point. i think draghi would prefer.is coming up to his last couple of press conferences before he steps down. therefore he's going to want to go out with a bang. today, whatates will that allow him to do in september? i think it's probably likely that he will differ. he won't make a decision to cut today. nejra: in terms of the bond yield, european sovereign bond yields falling further below the global debt market. we got to -38 on the bund yield yesterday. yieldly, the 10-year bcp closing below 150. where is the bottom for european yields? do you see is getting to a bottom anytime soon? chris: it's hard to judge. if we had said 10 years ago that yields in any bond market, particularly a huge one like the bund market, were going to get negative, we would've laughed. there has to come a point where people are not prepared to receive such negative funding from lending to the german government. it's difficult to say where it is at this point. what i look at more is when the italian bond yield is trading 50 points inside th

i don't think it is going to happen under draghi's leadership.hey havecussions, two policy tools that they are looking at. three actually pared forward guidance, rates, and qe. they can pull the lever on either one of those. for them to have a bazooka would be to have a quantum difference in the qe and this is where buying equities would hope and a whole new universe. the problem for the ecb is while the swiss national bank and the bank of japan and others do this, they are quite concerned about the politics and the optics of going into the equity markets. there is this all -- there is all this discussion about income inequality and who you are benefiting. in my earlier conversations, it seemed to be in the hypothetical. i do not think this ecb under mario draghi will take that step. in the future, maybe lagarde will consider something like that, but not this or the next meeting. close to 0% chance. shery: we had deutsche bank earnings this morning and the picture is worsening for banks across europe. cuts will not help. what are we expecting in

we have an ecb aggressively steered by druggie -- mario draghi, and the chinese are all leaving. we also have fiscal policy as well. we've gone quickly into a world of what i call qe plus, you -- plus, easing on the monetary and fiscal side. guy: what is the right investment if you're headed back into that world? if we had back into the qe playbook of negative interest rates, what is the trade around that? jonathan: it depends on how much balance there is from fiscal. that is the unknown quantity. enter bangs are there to protect against instability -- central banks are there to protect against instability and price stability. they have never been there to generate upside risk on growth. that is where fiscal comes in. we have a world that has been quickly dominated by the monetary side. that is why we are seeing bids,st rates, while treasuries below 2% gain. supportedgrowth is nominal growth at a reasonable level, despite the headlines. equities are an asset class that will benefit, and the yield pickup into equities, providing there is a minimal level of nominal growth to pay di

strengthens the case of mario draghi's stimulus.here for draghi and president lagarde's accommodation. it is stunning, the mathematical nominations of gdp. that is a stunning statistic. it is unbelievably tepid. francine: it is. to put this into context, we nominatedtine lagarde as ecb president. the question is whether mario draghi does stimulus before she takes over to make her life easier or not. the other question is because we have an incoming commission, if you go back to brexit, it will be difficult to go back to brussels and get an answer back. people forget the 31st of october deadline seems like it is around the corner as you need to give brussels time to get the new people in place. the new commission takes over after the deadline. the question is, if there were another extension, which people indeed, it would force the new commission. tom: i have an important question. let's wring this up. charts the most important on twitter. this is the chart of what will happen in parliament. there are all of these options. this is br

rishaad: how different would lagarde beta mario draghi?hat skill sets does she bring to the table? she has no central bank experience. she has other skills, which she can bring to bear in this role. yes she has been french finance minister. brought thethe imf, imf back from the brink of the dsk affair. she is a former top corporate baker and mckinsey. it seems like central banking is the only thing she has not done. party wise, from what she said and what the imf has advocated, she is very much in the mainstream of monetary policy. i do not see a lot of daylight between her and mario draghi. in some ways, her familiarity it with the fiscal and polarity -- and political players could be a benefit for shaping consensus for how this euro project most forward. much, ournk you so bloomberg opinion columnist. saxol with us, eleanor market strategist. central banks around the world , not coolg cash anymore. it was cool two years ago. how do you respond to that narrative? you don't get as much anymore by putting your money in cash at the moment. e

may be lagarde achieving what mario draghi did not?ink we will see a reiteration of that. thepress conferences have iteration. we will see a continuation of that. whether it is successful or not life more in the hands of brussels -- lies more in the hands of brussels. they can only advise and call for that action to be taken. in short, i do not see any changes for the ecb under sort of a mrs. lagarde held. -- helm. we will see these political forces conflicting with the we are with ecb policies and limited firepower qe.erms of easing and it means there's limited headroom. nejra: i was surprised to see futures in the green in europe given they are flat in the u.s. and we had in some read on the screen in asia. that's an cac 40 future -- dax and cap 40 futures flat. if you look at -- cac 40 futures flat. we are actually seeing the 10 year yield study along with the 10-year bund yields steady in today's session. thedrop we saw in bcp's and two-year yield falling below zero, is that to do with italy and the shift it made on the budget defi

is it a surprise that lagarde is going to be replacing draghi? maria: some will tell you it is a surprise, but it is not entirely unexpected. the french were pushing to get a frenchwoman to the european central bank. what is interesting is her background. she's not an economist by and she is not a central banker. but european leaders here will actually tell you they have that in her and confidence she has a track record at the imf where she praised mario draghi, said that he had taken the right measures at the height of the sovereign debt crisis, and there is continuity of that draghi legacy. as one official put it to me to gay, it is -- put it to me today, it is not about who christine lagarde is, it is what she is not. she is not a dove or a hawk. let's talk about another person moving into a senior position in brussels, ursula von der leyen. can she clearly confirmation process? lagarde looks like a lock. i'm not sure about von der leyen. brutalthere has been trading for days. you would think that european leaders would not put this to a vote

you referred to the fact that mario draghi had taken steps and indicated steps.et's put a chart up where the markets are now and pricing in future rate cuts by the ecb. what this shows, the purple line shows that by september the markets think there will be at least one cut of 10 basis points. more is what they are pricing in. by year from now there will be two. does this hem in christine lagarde and she takes her the ecb? there is a lot of room for disappointment if she is not aggressive in easing monetary policy. jacob: basically, in the same way you can argue ben bernanke teed it up for janet yellen and she for jay powell sets the ecb on a further monetary stimulus path. at the end of the day, a credible central bank does not do a major policy u-turn after just a few months. when a president changes, it takes longer than that. i think, clearly, christine lagarde's path is late for her, but it is also a path she will willingly tread. -- as a continuity take continuity pick in terms of her monetary policy relative to mario draghi. david: if the path is set out,

we had mario draghi signal they are willing to cut further.here are reports from bloomberg that people at the ecb are saying not july or maybe september. i will put up a chart that shows where the market is. the purple line indicates that right now people think we are looking at 1.7 times attend basis point cut on october of 2019. if you go for 12 months, it is over two 10 point cuts. is that justified by what you see in the economy in europe today? lorenzo: the global economy is slowing fast. clearly the eurozone is no exception. i have to say that in recent , the deterioration is coming from the u.s. more than the eurozone. however the eurozone is more vulnerable, given there is not much policy, there are not many policy instruments that can be activated to support the economy. on the monetary side, what the ecb can do is limited despite mario draghi having tried to convince people that the ecb has plenty of tools that can be used if there is a need for that. ratesling is that cutting is not going to be particularly effective, keeping in min

draghi that he was conscious this was a challenge for the banking sector from an investor perspective, will this argument hold water? >> i think what it says is you're not going to make as much money from net interest income anymore. the idea would be banks could be more profitable if they moved to a fee-based model. in various european banking systems, they're overbanked. there's a strong argument for more consolidation that's difficult given labor rules in various european countries. it just makes it difficult for these guys to perform well or certainly to perform any time soon can we come back to the currency again? all of these challenges that you have been talking about there on the peripheral of europe, italy and spain in particular, do they matter for the euro? is it all about the ecb? >> it's pretty much all about the ecb. i think that certainly on the political side we've seen all manner of manifestations of political risk in the last ten years, peripherals with spain, greece, et cetera. any impact in euro has been negligible in a broad sense. we have not seen long-lasting ef

m there's no rate cut predicted for this time around >> there's a 30% view that mario draghi will act as soon as today. but others think it will be september because they will have more evidence of the cooling down of the economy and what it does for inflation expectations. mario draghi was so outspoken at the annual gathering comparable to joel, this happens in sintra, portugal, the likelihood for him to preempt a fed move is not zero we can expect at least some fireworks today from the ecb the minimum we should get is a very strong signaling towards the big package in september, but there is the outside chance of a rate cut as soon as today in order to really convince the markets that the ecb is a credible institution and that they have enough fire power to actually combat the very slow inflation environment currently in the eurozone. >> annette, the policy is one thing. the policy is driven by people as well. so what can we expect from possibly christine lagarde after she takes over as european central bank president different than what mario draghi is putting on the table right no

traders assess if draghi was dovish enough. lira giving back some gains after rising on the rate cut with traders focusing on the currency's yield appeal. nissan in the spotlight as pay worsens and plans to cut 12,500 jobs. it is set to cut production by 10% as well. rut,n staying stuck in a as leadership is in question eight months after carlos ghosn's exit. selena ling, head of treasury research and strategy, gives us her outlook as global central banks march towards lower rates. the market open, next. this is bloomberg. ♪ i don't know why i didn't get screened a long time ago. i kept putting it off... what was i thinking? ok, mr. jones... we're all done. i told you it was easy. with life line screening, getting screened for unknown health conditions is so quick, painless and affordable, you'll wonder why you hadn't done it before. so if you're over age 50, call now and schedule an appointment near you. for just $149- a savings of over 50%- you'll receive a package of five screenings that go beyond your doctor's annual check-

gershon: draghi is the master of keeping his options open. that chairman powell should harold hamm maybe to do -- should hire him maybe to do the press conferences. maybe as a consultant. [laughter] we are going to sit here and say, we are not sure what he said, because he is really good at that. but i think lisa is exactly right. the issue is, whether they cut the near term or not, are they going to have the wherewithal to if we show signs we are going through a recession, do they have enough firepower left, enough tools at their disposal to make an impact? jonathan: here is a question for you. if they cut interest rates, if they tee up another round of qe, the objective is to get inflation expectations up, it is ultimately to shake you out of those 10 year bunds in germany. are yields going lower on 10 year bunds, or higher if qe restarts and rates could cut? gershon: that will be dependent on how risk markets react. if we see a big global selloff in equities, it will go lower. what is the reason we went from zero to where we are now? it is

gershon: draghi is the master of keeping his options open.hairman powell should hire him as a consultant. over the years -- we are going to sit here and say, we are not sure what he said, because he is really good at that. lisa is right. the issue is, whether they cut the near term or not, will they have the wherewithal, if we are going into recession, do they have enough buyer power left, enough tools at their disposal to make an impact? jonathan: if they cut interest rates, if they tee up another round of qe, the objective is to get inflation expectations up and ultimately to shake you out of those 10 year bond in germany. our yields -- are yields going lower on 10 year bunds, or higher if qe starts and rates could cut? gershon: that will be dependent on how risk markets act. if you see a global selloff in equities, you will go lower. the past few months, there's been a lot more fear in the marketplace. that will be the determinant, more so whether it should or not. jonathan: how do you think this market would respond, bunds specifically, t

think it is it is policy is a policy for the euro area as a whole and i think this is what mario draghi has done and if the euro area prosper it's good for all member states and so i think it's not good idea to do favor to specific economies but overall it's the euro area is an entity and i think doing something that's good for the euro is before them. the euro area is also extremely factitious at the moment just just laugh lastly how do you think she'll do at pulling together these very different economies well i think this is really a difficult job if you look at what's going on italy and i think this is where you need some some genius like mario draghi with his board very takes thing and could she emulate him i think she could i think it's very difficult because my drug is a genius and he has done a much better job than his predecessors but i think she has a quality to do the same thing i thank you very much for coming in today refute it . now to some other business stories making headlines inequality and exploitation the nonprofit group oxfam says the conditions of many supermarkets