e.m. at these prices particularly. jonathan: ok. en i hear, as krishna said, that there is still positive sentiment around e.m., i struggle to understand what sort of price appreciation can you get from a better pricing of 290 basis points over treasuries? so, fundamentals are strong in many parts of the market, we don't argue with that. it is just hard to understand where that price appreciation will come from as the fed continues to tighten and do all it is just hard to understand the things it is doing, and protectionism continues to roll around the world. and my final point on that is we have not yet seen technicals really hurt that part of the market. we have not seen a significant amount of outflows. the things it is doing, and protectionism continues to roll technicals can do very bad things to the market, as we learned with high-yield in 2015 and early 2016, where fundamentals were really limited to just the energy part of the market, but everything fell out of bed. that has not happened yet. jonathan: krishna, really quickly

jonathan: world cup winner. e.m. or dm? jim: not the united states. oksana: do i really have to? than: indulge me. oksana: i will go with e.m. krishna: e.m. jonathan: trying to ask americans about football. jim keenan, krishna memani, oksana aronov. i'm not doing that again. that does it for us from new york. we will see you next friday at 1:00 p.m. new york time. 6:00 p.m. in london. this was "bloomberg real yield." this is bloomberg tv. ♪ what's a gig of data? well, it's a whole day's worth of love songs. 300 minutes of baby videos. or, it's a million chat messages. a gig goes a long way. that's why xfinity mobile lets you pay for data one gig at a time. and with millions of wifi hotspots included, you'll pay less for data. it's a new kind of network designed to save you money. click, call or visit a store today. alix: this upcoming program was recorded earlier this week. we hope you enjoy the show. opec debates how much output should increase, it is russia versus iran the saudi's in the middle. trade battles dragged down caterpillar, one of the best-performing stocks over the l

jonathan: world cup winner. e.m. or dm? jim: not the united states. oksana: do i really have to? indulge me. oksana: i will go with the e.m.. krishna: e.m. jonathan: trying to ask americans about football. jim keenan, krishna memani, oksana aronov. i'm not doing that again. that does it for us from new york. we will see you next friday at 1:00 p.m. new york time. this was "bloomberg real yield." this is bloomberg tv. ♪ two, down, back up! our phones are more than just phones. they're pocket-sized personal trainers. last minute gift finders. [phone voice] destination ahead. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet which could save you $400 or more a year. it's a new kind of network designed to save you money. click, call, or visit a store today. ♪ manus: you're watching "best of bloomberg daybreak: middle east." the major stories driving the headlines from the region this week. opec on a knife edge, speculation about output cuts swirled as ministers gathered for the crucial meeting in vienna. welc

jonathan: world cup winner. e.m. or dm? jim: not the united states. oksana: do i really have to? than: indulge me. oksana: i will go with the e.m.. trying to ask americans about football. jim keenan, krishna memani, oksana aronov. i'm not doing that again. trying to ask americans aboutsee you next fri. this was "bloomberg real yield." this is bloomberg tv. ♪ >> i'm mark crumpton with first word news. paul manafort's request to dismiss a money-laundering charge has been rejected by a federal judge in washington. manafort is also charged with conspiracy, making false statements, obstruction of justice, and failing to register as an agent of ukraine. his bail was revoked last week and after prosecutors claimed he tried to tamper with witnesses. his trial is scheduled for july 25 in virginia and september 17 in washington. diplomats say israel is following the lead of the u.s. in pulling back from the u.n. human rights council. israel has not completely withdrawn from the body but has her or they reduced its participation. the country has had a tense relationship with the council, acc

jonathan: that is a good point. you have attacked on two fronts in e.m. right now.ou have cash as an asset class in the united states competing elsewhere. you have treasuries more competing for capital elsewhere and a more attractive yield. that attraction to u.s. assets and that competition for capital from elsewhere, is e.m. a loser or can e.m. still do well here? jay: we have gone neutral on e.m. and we think this downdraft in growth is set to slow in second half of the year. but it is the tension which will make returns more challenging. the u.s. is going to continue to look more attractive over the rest of the year. if we are right and get three more hikes, we will get two-year yields over 3%. jonathan: kathy, in the united states, yields are up by 3% in the united states on a front end of a two year yield. if i say 3% on a two-year, do you say inversion? kathy: i think we get close to it. i think two more hikes this year is probably more realistic than three. you know, we are already seeing the global growth picture, it is in a turnover, and i don't see the im

." ♪ jonathan: coming up, it is a breakdown on international diplomacy. enough to derail global growth? the central bank of e.mis in a world of pain, asking the fed for help. and the ecb refusing to be held hostage and planning to discuss the end of qe. we begin with a big issue, emerging markets asking the fed for help. >> the fed is always clear they are making policy for america. but even if you do consider the rest of the world, you are not making policy to bail out countries that are running their economies badly. >> the fed is guided mostly by u.s. factors and it would take a massive global crisis to change the fed's behavior.

e.m. several months ago because valuations were too high. as the fed tightens, this is what happens. risk premium starts to expand and it is where we are. jonathando you see signs of contagion? mohammed talked about technical factors. are you starting to see the technical bleed through? >> it was crowded at the start of the year and you have the own elect scenario and you could justify it. now technicals are turning and investor greed has really driven it. jonathan: jay, it is interesting that they were asking for a basic call that the federal reserve balance sheet in the treasury boosting issuance at the moment because of the fiscal stimulus is overwhelming dollar liquidity. it is taking away from emerging markets. they complained on the way up and are complaining on the way down down. how does the federal reserve respond? jay: this is coming front and center right now. late last year and the beginning of this year, we were in an upswing of growth. it helped miss the point of the fed tightening but now the growth has decelerated in the euro and japan. the u.s. is going alone well above trend. it is coming out to the forefront. with labor market

." ♪ jonathan: coming up, it is a breakdown on international diplomacy. enough to derail global growth? the central bank of e.mworld of pain, asking the fed for help. and the ecb refusing to be held hostage and planning to discuss the end of qe. we begin with a big issue, emerging markets asking the fed for help. >> the fed is always clear they are making policy for america. but even if you do consider the rest of the world, you are

e.m.'s before the trade side of things intensified, due to the rising dollar and rates, is the momentum going against emerging market currencies to scary right now to be opportunistic? jonathan: there certainly are issues when it comes to places like argentina, but when you carve out asia from an e.m. point of view, relatively speaking, the macro environment is quite sound and attractive. of course, when a move away from china and look at philippines, they are technically in bear markets. look at where philippines has been trading in the past few years, ce close to 18 or 19 times, investors should not be surprised, they should expect to see for volatility going into the end of the year. ramy: human nature forces us to blame someone. i am looking for someone to blame. do i points to donald trump for the trade tensions? jay powell?me what is the real reason we are seeing this? catherine: i will take it one step further, should we start blaming europe? something has to give in this environment. the initial blip we saw in a downturn in february, did not last for long. what is key, is looking at the earnings sustainability. certain earnings, will be impacted by the trade issues,