ecb decision which finished 20 minutes early today, clearly, summer has begun at the ecb.is the global management structure after marketing thating on the world cup heard second-quarter profits out of the world's biggest brewer it is trying to become more agile by shifting to six geographic regions from nine. the changes come as the maker of stella artois said earnings rose 7% and analyst estimated eight cents. the world cup campaign for budweiser which is its flagship beer began in may and the company ready to square off with carlsberg, who is the market leader in those russia. sales profitability gaining momentum and chief executive mark schneider responded to activist investors pressure to turn the company into a more agile, active consumer giant sales growing faster than expected in the first six months of the company forecast improvement. the second half as u.s. and china rebounding. it's been quite a year or so for plansyder, he announced to cut hundreds of jobs announced a $7.2 billion deal for market. and nestlÉ has revamped its board. nestlÉ up by 1.8%. we have th

to recap, the ecb rates remain unchanged.alt the asset plans through the end of december, and rates will remain unchanged through the summer of 2019. . the big thing with the reinvestments, they are looking to facilitate reinvestments as long as is needed. investing where, we do not know, but the twist is what we were assuming what happened. david: let's ask nandini ramakrishnan about that. this is how confident mario draghi is that job?s done his it is six years ago today -- did he do what it takes, and if he did, does that mean he does not have to worry about an operation flip? nandini: that is a great point -- how they achieved the goals they have set out to do? if you look at the continuous forecast they make in terms of gdp and growth, and actually consider that the stimulus have been working. europe has been growing very nicely over the last six years in particular versus its history. stomachsense, gdp why yes, inflation has not been hitting the 2% gdp target. core inflation is stubbornly around 1% in many economies in

jon: can the fed hike five more times without the ecb hiking want?>> absolutely not. >> i think they can. jon: ira jersey, krishna memani, -- iain stealey joining us from new york city for audiences worldwide, that does it for us. we will see you. from new york, this is bloomberg "real yield." ♪ phones have made our lives effortless. streaming "must see tv" has never been easier. paying for things is a breeze. and getting into new places is even simpler. with xfinity mobile saving money is effortless too. it's the only network that combines america's largest most reliable 4g lte with the most wifi hotspots and it can be included with xfinity internet. which could save you hundreds of dollars a year. it's a new kind of network designed to save you money. click, call or visit a store today. ♪ to the bloomberg first word news this afternoon. secretary of state's mike pompeo is now in north korea where he has a tough job. yes to make sure kim jong-un nuclear commitments are in line with president trump's promises. there have been reports that kim can wra

let's look at the fx markets here euro just slightly weaker against the greenback as we await the ecb meeting. the dollar slightly weaker against the japanese currency at 110.770. sterling at 1,3182, and the yuan at 6.7820. >>> an update from china, that beijing security bureau has come out with more details on the nature of the explosion outside the u.s. embassy sri jegarajah joins us from singapore with the latest developments there >> good morning. it's becoming clearer as to what happened here. there was a statement released by the chinese police and the u.s. embassy there was one individual who detonated a bomb, they say, at approximately 1:00 p.m. today in the public space outside the u.s. embassy it's important to recognize that there was no compromise of security there was no one who really penetrated the perimeter of the diplomatic area. it's also important to remember that a lot of people typically gather around here because they come to the u.s. embassy tovisas and the area of the embassy also houses a number of other diplomatic missions including the indian embassy and in

the ecb is going to stop buying corporate bonds at the end of the year.reas the high-yield market in europe, it doesn't have that impact. they have not been buying high-yield ons. it now trades at a wider spread to the u.s., that has a good opportunity over the next six months. jon: what do you make of that? krishna: with respect to leverage, yes. the leverage of u.s. hybrid market has gone up but that , coverage ratio is quite reasonable because of the high level of profitability. i disagree that reflects credit concerns in the market. it is a supply issue far more than anything else when you have a large m&a transactions coming into the system. market where flows into usual funds have been slow. the math is easy. jon: we are talking about a slow-motion credit crunch, the federal reserve, as we can debate, but -- let's assume they have. not by very much. my question, how are we going to get an ecb that can get away from negative rates when we are having a conversation right now about whether they moved by 10 basis points in september or december of next

krishna: i think the ecb has an even more challenging case from the u.s.m a cyclical standpoint. growth outlook is decent. we are talking about 5%, 6% of nominal growth. that in ecb terms and in real terms is kind of rolling over. it is a really big challenge. it may indeed be that the fed stops tightening at some point, and the ecb does not get any opportunity whatsoever to raise rates in this go-around. jonathan: krishna memani, great to have you with us, from oppenheimer funds, alongside iain stealey and ira jersey from bloomberg intelligence. i want to get a check on where the market has been, treasuries, twos, tens, and 30s. two year yield up by a mild two basis points. there is your curve flattening. down three on a 10 year yield. down five on a 30 year. still ahead, the final spread. the week ahead featuring comments from mario draghi and the new numbers on u.s. inflation. much more on that. from new york, you are watching "bloomberg real yield." ♪ jonathan: i am jonathan ferro. this is "bloomberg real yield." it is time now for the final spread. co

-- told lawmakers was in line with the latest ecb policy decision.explained to them that the ecb will end asset purchases at the end of the year. that the ecb is planning to keep interest rates unchanged, at record lows, through the summer of next year. he said, inflation is on a sustained upward trend, so expressed confidence that the inflation rates will recover further, that they will move closer to the goal of just under 2%. and he said the economy is healthy enough come even though he did point to the risk of protectionist pressures. nejra: that is interesting, because over the weekend we also heard from the ecb executive board member, who actually struck perhaps a slightly hawkish tone. we have seen the euro rally on that, in terms of saying not to expect too much pressure on the eurozone because of these trade tensions. jana: yes, the ecb is very worried about the impact on growth of trade tensions. what they do not quite know is how those trade measures that have been announced or threatened, will have on inflation. pricesraise the tariffs, w

thinking about the ecb. the u.s.fiting from the sugar high generated by the tax story. it's probably going to elongate the cycle. let's say the cycle rolls over back end of 2019 into 2020. that is the point the ecb is probably going to be hiking rates or at least thinking about hiking rates. it will be some of the else's problem. that is probably what's going to be happening. how does the ecb stop at that stage. the euro going through the roof? lothar: it would be an issue. we will get a message tomorrow that the ecb, while being easy on the monetary side at the moment, is also on the path of tightening because they do want to get a little bit back under their belt. guy: how much can they do before the u.s. rolls over? lothar: it's going to come to the cycle at some point. but cycles do not die of old age. and of 2019, who knows. trump could kill it prematurely as well. this could carry on for quite a while. it's a bit uncomfortable for the ecb because they could not defend so well against a downturn across europe or

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. mark: are you comfortable with the data now? we had encouraging numbers from germany today, and from the european union yesterday, it was not grim. how do you read the overall data at the moment? david: it is hard to read too much into one month of german factory numbers. of all ofader trend the data out of the euro area, it is one of strength. the eu

so the ecb is doing it a little bit differently.hey are tapering first and then they are going to start raising rates. one of the things that happened that we've seen in the bond u.s., is that in the there many economic forecasters that are not looking for term premium to return. if you talk to the fed, many fed officials mention the return of term premium, so that would be higher rates at the longer end of the curve. this is an important thing for financing, it's important if you believe the signal from the inverted yield -- yield curve. i think european central bank would like to prevent that yield curve in version because of the way european insurance companies and banks have their investments may within other european country sovereign debt. ramy: does that mean it's a better way, and shouldn't the fed be doing that? constance: this is all uncharted territory. we've never had central bank balance sheets disclose. pox -- abruptly $60 trillion when we add it all up. ramy: let's talk about the biggest risk to the ecb. it seems like

the ecb. they are going to stop buying corporate bonds at the end of the year.hereas the high-yield market in europe, it doesn't have that impact. they have not been buying high-yield bonds. it has been a bit of an unloved market and now it trades at a wider spread to the u.s. that has a good opportunity over the next six months. jonathan: what do you make of that? krishna: with respect to leverage, yes. i think the leverage of u.s. hybrid market has gone up, but that coverage ratio is quite reasonable because of the high level of profitability. so i disagree that reflects credit concerns in the market. it is a supply issue far more than anything else when you have lots of large m&a transactions coming through the system, with into a market where flows into mutual funds have been pretty slow. the math is easy. jonathan: we are talking about a slow-motion credit crunch, the federal reserve, as we can debate whether they have gone neutral or not, but let's assume they have. not by very much. my question, how are we going to even get an ecb that can get away from n

look, at the end of the day, we had the fed, then the ecb, and the boj was lagging.o now we are actually falling into place. that basically makes the case for rates to be rising a little bit all around the world. jonathan: victoria, let's talk about a spread that has been super, super wide, bunds versus treasuries. it has widened through much of this week as well. i'm just wondering when qt starts to come through, when we could see that spread start to tighten a little bit. do you expect that spread to tighten? victoria: i think it will tighten. this whole quantitative tightening issue, we will see it globally throughout the next 12 months. look at the balance sheets you have. obviously, the fed is reducing their balance sheet. when you look at the boe, they are ending their bond buying program. i would expect their balance sheet to start to contract some next year. and we just spoke about the bank of japan, we see it there. it really, the pboc is the only one that has quite a bit of expansion going on with their balance sheet, but that should moderate as well. so ov

francine: what is your take on ecb?e are trying to figure out what the main fault line is for the ecb. you could argue that because we are in a different cycle, the normalizing, a recession hits, ecb is behind the curve. writes, that is the problem they have had for a long time. let's not forget they were late to the qe party when other banks stopped doing it. perhaps, they should have exited the policy earlier. that is too bad, we are where we are. but certainly, there is the risk of the synchronization. not think a slowdown in the european economy necessarily prevents tightening policy. francine: so what is preventing them? a looming trade war, bad figures from germany? peter: simple caution. banks have been loath to raise interest rates because they are concerned that even the smallest interest rates will cause the economy to slow down. i think they are being overly cautious. i simply think the central bank has gone into a mindset which says we have to wait and see. we are looking for that green light, you will not g

euro after stronger comments from ecb policymakers.0 spread, 28 basis points , coming further and further inwards. crude oil after inventories today saw a little built. as the pboc governor steps in and we have a stronger yuan, although at 6.63 it is weaker than it has been for a long time. let's take a look at top markets , because we have some sliding of stocks in emerging markets. the brazilian index down 9/10 of 1%. the ruble is strengthening. all of this talk of a summit is helping that currency. i want to point out copper is sliding 2.6% as tariffs are due to go into effect just after midnight. that is not helping develop emerging-market stocks. mark: sterling climbing earlier, hawkish comments from the boe governor mark carney. now it is flat. newestworries that may's proposal is unworkable. china warrants -- >> if implemented, the tariffs announced thus far will probably double the average bilateral tariff rate, and it could raise u.s. tariffs, which is at the heart of this issue, to rates not seen in over half a century. there

the fed then a ecb and the boj was lacking. for rates toe case be rising a little bit over run the world. >> let's talk about the spread that has been superwide. it has widened much of this week as well. could see that spread start to tighten. do you expect to tighten? >> i think it will tighten. this issue globally through the next 12 months. with the balance sheets that you have. obviously the thread is -- fed is tightening. we just spoke about bank of japan, you see it there. that should moderate as well. over the next 12 months if you look at the whole group of central banks, you have quantitative tightening going toward the end of 2019, that will make that spread come lower. i was speaking to clients of the conference this past week and we had a chart up that showed the otherr u.s. against the tenure sovereigns. there is a huge gap there. that gap is holding our long and down and that will have to narrow as quantitative tightening becomes part of anyone's. >> expectations are so low to the ecb. very little was priced in. w

theo draghi reaffirming ecb's ambitions to end the qe program this year. they have not discussed how to reinvest their expiring bond purchases. and also the ecb of course keeping and i own inflation, keeping an eye on trade. trade was brought up. sterling dipped after we discovered michel barnier give the thumbs down to theresa may's customs plan within that brexit paper, which she announced a couple weeks ago. less to focus on. a massive day -- lots to focus on. a massive differ earnings. we will speak to the ceos of several companies. let's get the first word news. juliette: u.s. president donald trump's former personal attorney is reportedly prepared still federal investigators that the president knew in advance about a june 2016 meeting where russians were expected to offer damaging information about hillary clinton. that is according to cnn citing unnamed sources. such testimony would contradict the testimony of public denials of the president, his son, and other campaign officials who have or could the president was not aware until more than a year l

good luck today and have fun at the ecb conference.ncredible system we have set up in frankfurt -- you should see it. have a backup to the backup to the backup. there are reporters all over the place. it is a major operation and exciting to watch. let's get a picture of the markets today. gains across the board. how bigteresting to see those gains are in frankfurt. bmw gain. this is bloomberg. ♪ >> facebook shares plunge as news breaks and revenue flows. it could be the biggest wipeout in stock market history. and the eurump avoided trade war, agreeing to defend new tariffs. for hints. mario draghi delivers the latest policy decision, six years since the whatever it takes speech. nejra:

had a report last week saying the ecb would reinvest proceeds from maturing bonds. full amid this shrinking of eligible debt, holding the german bonds close to the ecb's the-imposed 32% cap at central bank and likely to buy and 70 core and peripheral countries such as france, spain, italy, according to morgan stanley. talking about big matters in the global marketplace, the yuan has been that the center of the storm, though, rising for a second day today after the central bank stepped up its support yesterday. last times china currency sank as quickly as it has, panic ensued after that. you can see that in the 2015 devaluation. the latest response to the weakness in the yuan is proving decidedly more subdued in the marketplace. this is three-month risk reversal data. the offshore yuan three-month risk reversal is a gauge of trader willingness to bet the yuan has ticked higher as of late. still below the peaks we saw in 2015 in august and in early 2016. let's check in on first word news with a much andra. not: china says it will find itself in a trade war ended the r

is this the ecb floating balloons out there. of back to messaging to the market actually bringing afford a little bit? it very well could be and the discussions are very confidential. everything will depend on the economic situation at the time, but now it appears that september or october is possible. the timing is very important because this will set the tone for the ecb's exit from years of monetary stimulus. guy: we are a few months away, doesn't make that much of a difference if we are pressing september or december? does it actually have a material impact in terms of the way investors are thinking right now? >> i would imagine it does. the difference between december and september or october is quite a bit. they will be looking at that. there is another factor, too. september or october could beat mario draghi's last chance to raise rates before he leaves office at the end of october 2019. guy: that is an interesting tidbit there. let's talk about what is happening in your neck of the woods right now. we are getting some i

the ecb is uneasy and some see the rate hike as too late. the central bank move as soon as september of next year? we will bring you the latest. rover warns that a bad deal would risk investments. >> this is bloomberg daybreak europe. the numbers are coming through the german economy for the month of may and this is the year on year number. the estimate was for an increase in that factory order number comes in more strongly than anticipated and the manufacturing orders number rose. estimates rose and suggested a much-awaited pickup and it is something the markets may find very comforting. we will see how they react off of the better than expected journey. and theyle bit of news are doing a share buyback timeam and it comes at a with glencore under a new probe that came to light the other day youwiped out as much as could be slapped with, in terms nigeria and that was and venezuela and this is the collapse inwith the the share buyback. we are into the trading week and withe tell you about that a loss of over $5 billion worth in the past tradi

>> i think expectations are so low at the moment at the ecb, very little is priced in. do think we will start to see that play through a little more. i think the bar is so low that if we do see more fired guidance from the ecb and you start to see a little more of an investment from the ecb -- we still have to hear about their reinvestment policy, but we could start to see those spread and narrow. -- we could see more forward guidance. jonathan: my guests are staying with me. coming up on the program, the auction block. junk bonds continuing to outperform. that is up next. this is bloomberg real yield. ♪ ♪ jonathan: i'm jonathan ferro, this is "bloomberg real yield." it is time for the auction block. i want to begin with the treasury market, which issued $119 billion in debt through this week. first up, we focus on the $36 billion sale of five-year notes, which drew the highest bid to cover ratio since may of 2017. in russia, investors quickly moving past the threat of additional u.s. sanctions. the bulk of the notes is more than three times oversubscribed. in the u.s.,

won'tard member says it deter the ecb. he may comments in an exclusive interview with bloomberg. really important gauge is the impact on voter confidence, which so far has been limited. we see this escalation process. we start with skirmishes and skirmishes are made into caches and into a full-fledged war. that could be bad for business confidence. so far, the backdrop is strong for the eurozone. meaning that so far, what we've seen has the potential to have a recovery. >> can the ecb just sit back and watch this trade war happening? >> we're never sitting back and watching. we have to understand what is going on. so far, with a gold is strong enough to withstand it. >> heavy seen some companies holding back investments because of these policy risk? >> that may happen. we're not complacent on the possible risk. a full-fledged trade war would be bad for the economy. be u.s.t victim would jobs, u.s. workers, and we very much hope this doesn't happen. exit the eu by the end of the year. what are the plans? >> that's our x -- our anticipation. mid-july, i see no reason to change expe

the ecb executive board member, exclusiveus for an conversation with caroline connan. we will bring you that later. let's get the first word news update with juliette saly in singapore. the u.k. prime minister plunged into a crisis after cabinet embers quit. bakerdavis and steve resigned in a double blow to theresa may negotiating strategy. may has set a new brexit secretary would be announced today. ecb executive board member benoit coeure has said the central rank is alert to risks from trade tensions that are escalating. he made the comments in an exclusive interview with bloomberg. >> it would be extremely bad for the world economy. jobs, u.s. workers. juliette: mike pompeo has struggled off north korea's pessimistic appraisal of his talks, saying kim jong-un has not abandoned his commitment to wind up his nuclear program. pyongyang characterized the u.s. demands as gangster like. the american side said that statement was merely a negotiating tactic. the operation to free the thai soccer players and their coach is expected to resume in the next two hours. four have

the ecb talked about a soft patch.that we have not seen, the 2q data, it has been slightly stronger than what we saw in the first quarter. i think we will get germany in a couple of weeks, we will have a look at that. the bundesbank and german finance ministers saying that they should see a rebound. so what we see with the european data, into think you are right to highlight inflation, the core reading today was a beat. but itnly a little bit, is going in the right direction. he compared to what we saw in the first quarter and is slightly more buoyant and it will encourage the ecb, and i think that is what drove the euro a little bit higher today. vonnie: all of the polls, the fed portfolio is shrinking, so the other banks are not -- but does it add up to one whole, or are we seeing global tightening? richard: i think the fed is far down the path compared to what the ecb is planning, which is to year, by the end of the and japan is a very long process. we are nowhere near describing anything as tightening in japan, but

anticipationer on of tightening by the ecb. we will dig down into the details and prospects of ecb policy. this is bloomberg. ♪ ♪ julia: this is "bloomberg daybreak: americas." >> this is your bloomberg business flash. raer haved embe reached an agreement. an american company has agreed to sell european assets to japan for $5.9 billion. xair is trying to sooth antitrust concerns. a move that may reassure investors after the world's largest commodity trader said it was being investigated by the u.s. justice department. the justice department have demanded documents from glencore related to money laundering and corruption. david: the global economy is led by u.s. growth. concerns over trade wars in the background. today, mark carney said these concerns are starting to show up in the data. >> the tariffs announced thus far, if implemented, will probably double the average bilateral rates, and could raise u.s. tariffs to rates not seen in over half a century. earlyere are some tentative signs that this environment may be dampening

. >> i think expectations are so ,ow at the moment at the ecb very little is priced in.ee a little will more, i think the bar is so low that they could use some more forward guidance from the ecb. --sing a little adjustment we are seeing a little adjustment on the balance sheet, but also unknown. i think we could see some more forward guidance. are staying guests with me. coming up, the auction block. junk bonds continuing to outperform. that is up next. this is bloomberg real yield. ♪ ♪ bloomberg realis yield it is time for the auction block, i want to get to the treasury market, it issued $119 billion in debt through this week. first up, we focus on the $36 billion sale of five-year notes, the highest ratio since may of 2017. investors quickly moving past additional u.s. sanctions. is three times oversubscribed. lose thecontinues to junk-bond market, high yield is 20% lower than the same time last year, and the lowest since 2009. my guests.discuss is victoria, i want your view. what is really supporting triple see, the junkie is to of junk? >> you also see strong earni

and we hear from the ecb. mario draghi's executive paints a positive picture and we learn about the plan to hike rates. this is bloomberg. ♪ nejra: economics, finance, and politics. this is "bloomberg surveillance." let's get the bloomberg business flash. here is taylor riggs in new york. taylor: as we mentioned, facebook shares have slumped after the social network reported second-quarter sales and user growth that fell short of analysts production. the company also told wall street the numbers won't get any better this year. >> this is a critical year for facebook. we may progress preventing abuse, forged ahead with new innovation, and are adapting our services to the new trends. they have finally given investors the share buybacks they had been demanding. the anglo dutch energy producers says they are starting a $25 billion share repurchase around, two billions in stock. but even there estimates fell short of even the lowest and -- analyst estimates. >> a commitment to divest $30 billion worth of assets. pa

we've seen it in emerging markets, with the ecb, with the bank of england. i would say these comments have been digested by the markets, but there's a stronger narrative in the markets at the moment, that's the u.s. economic growth. >> that's the dollar the other side of this equation, the yuan there are indications that the chinese are doing this on purpose, in terms of weakening their currency what's your take on that cross, that pair in the weeks ahead >> we've been bearish on the chinese renminbi i think we're seeing a classical case of policy divergence. the chinese are doing some form of quantitative easing, where the rest of the world is doing quantitative tightening. there are concerns around the credit worthiness in china we think the pressure persists on the renminbi going forward. we concede some of those gains in dollar china may have run their course >> do you think the uncertainty will weaken the level of interest in the euro >> i think it's sporadic the focus we always had is euro swiss. that's the bellwether for regional political risks we he

nejra: thank you so much, to bloomberg's ecb reporter caroline -- carolynn.oliday week, but with fed data out of today, the u.s. economy is still taking center stage. investors keep an eye out for what officials discussed at last month's fomc meeting, including the risks of trade tensions, stronger dollar, and a flattening yield curve. what does this mean for markets? --ll with us is mark's michael and will say go -- wo lfango. are investors getting the central bank divergence story right? if you look at euro-dollar. michael: we do not think so. but this is more driven by the outlook on the european side than the u.s. side. our sense is investors are under appreciating the growth potential in europe and that the ecb, if anything, would be moving earlier than what seems to be in the market. they have practically been priced out until the third quarter of next year. we would be more optimistic about european growth and the ecb moving a little earlier. we see thee have is euro strengthening as a consequence of that, and one of our less conflicted views is that y

now the ecb says we're on track, 2% inflation growth is okay the story for the ecb is sometime next yearl start to raise interest rates that will be big but that time is not now >> it will be bigley if we get a 5% gdp number. >> it will be a big number, but the question is how do you trade it here's the story i'm trying to talk to the white house on this one. they don't listen to me, which is fine. president starts talking about numbers, 3%, 4%, 5%, 6% frotgroh if his policies can raise the underlying growth rate from 2% to 2.5% or 2.75%, and i mean not just a quarter or two, but to have an upward shift in -- >> yes >> that's a huge success i'm not sure why they -- i know why they do it, politically these big numbers are big, but 2.5% on a $19 trillion economy versus 2 means more jobs, more wealth it's a huge victory. i would like to see that happen. i would not be disappointed if it's not 3 and not 4 those are the wrong ways to think about it. >> joe kernen is not back tomorrow, is he? >> why do you ask? >> he may call back in to "squawk box. >> we should all "squawk" about it >> we sho

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

inflation, wages, what the ecb chooses to do. the recession will follow the inversion possibly by nine to 15 months. lisa: we will be talking about the yield curve for a lot longer. anyone who is a skeptic, good but. everyone is staying with me, andna aronov, matt toms, joe. there is buzz in the bond market. greece is back. lisa: i am lisa abramowicz. this is bloomberg real yield. u.s. treasury department auctioned off nearly $200 billion this week. first we focus on the $33 billion sale of three-your notes , the smallest bid to cover ratio since 2009. primary dealers also took the greatest share since 2014. $22 billion were sold in the 10-year sale with 2.89% with a bid to cover ratio at the lowest level since may. primary dealers have the smallest share since january. in greece, investors are warming up to the prospect of a return to debt markets. the nation's biggest corporate borrower attracted more than 1.8 billion euros of investor orders there does still seem to be very much a shirt for yield. there was a story that caught

inflation, wages, what the ecb chooses to do. recession will follow the inversion possibly by nine to 15 months. could be a while. lisa: we will be talking about the yield curve for a lot longer. anyone who is a skeptic, good luck. everyone is sticking with me. oksana aronov, matt toms, and joe higgins. coming up, the auction block. there is buzz in the bond market. greece is back. this is bloomberg "real yield." ♪ lisa: i am lisa abramowicz. this is bloomberg "real yield." i want to head to the auction block, the u.s. treasury department auctioned off nearly $200 billion this week. first we focus on the $33 billion sale of three-year notes, which drew the smallest bid to cover ratio since 2009. primary dealers also took the greatest share since 2014. in the 10-year sales, $22 billion were sold with a yield of 2.859% with a bid to cover ratio at the lowest level since may. primary dealers have the smallest share since january. over in greece, investors are warming up to the prospect of a return to debt markets. an example is the

i do think the end of corporate bond buying by the ecb is in the price. we've had a significant repricing of european credit by anchoring the short end, having a steep curve, it's made european credit quite attractive to fx-hedged asian investors we think there will be a strong marginal bid coming in from there. it's more about the rates than it is per se about the end of qe and as you said, you know, we're not going to get a rate hike until september, october of next year at the earliest >> so buy and hold >> exactly yes. >> thank you for joining us on "street signs. >> thank you >>> all right. so let's switch and talk about some uk news the european union's chief brexit negotiator, michel barnier, poured cold water over britain's customs proposal he criticized the offer to collect duties on behalf of the eu he added that while the eu respected britain's desire to take back control, the uk should also respect the eu's laws and borders. speaking in brussels, barnier highlighted what he saw as problems with the new customs plans. >> the eu cannot and the e

francine: that was the ecb executive board member.ft north -- marcus ashworth. and is getting the hue from the dollar. no one cares about the dollar, it's quite an amazing result this morning. you see that's what's driving things. the weakness of the dollar this month, that sounds the trade in some sense's hope for from trump, he wants a weaker dollar. he has the capacity to turn it on and off and we should see how he feeds through for the central bank concerned. everyone is warned about it but no one knows what it means. francine: david davis resigns and they put another brexit are as the bracket -- as the brexit secretary. he could have a lot of thought that means theresa may is powerful. he said yes to being in her cabinet. ifcus: the context is that the key brexiteers remain just that's likely david davis's department was being consumed sidelined. he said the chief civil servant on this was essentially driving the process and it wasn't david davis anyways. they spent the whole last year coming up with a plan that has been good lat

so yes, i -- the chairman or former ecb board member.im about now that trade war seems to have moved from a war of words to real actions, how he felt that europe should have supported president trump on trying to make trade fairer with china take a listen. >> if you want to get to a system which is fairer and freer, you don't start by raising barriers you start by talking i think the -- have a way of putting it when you want something or when your counterpart wants something, you ask wa they want and you kind of find a balance of what you also want in exchange you don't start by taking away things i think this strategy in the end will hurt everything starting from the u.s >> so yes on the principal but not on the method? >> yes i think the method is wrong. it's clear that the chinese have to -- they have been integrated as an emerging economy or i would say under developed economy. now they're the largest economy in the world nearly and largest exporter so we need to adapt the rules of the game i think they're ready for that we just need

this is bloomberg. ♪ rishaad: ecb meeting today. looking at that and the boj.he global market -- strategist .t j.p. morgan, jasslyn yeo we have a yield curve that is flattening. that is normally an indication that a recession is looming, but is it different this time? jasslyn: well, slightly different this time. what is similar this time is you still see the curve flattening whenever the fed hikes but what is different is the longer end of the bond yield curve is being held lower by quantitative easing. inversion as a signal of the recession, you have to see the curve inverted more to make a clearer case for when the recession will come up next. that is a key. , you could seem potentially some steepening if a backup in term premiums, but in general, the trend is for flattening on the yield curve. rishaad: very quickly, is that the way you think the federal reserve looks at? -- at it? they don'tthink really put too much emphasis on the yield curve, but i think in general, markets are still watching the yield curve. that is still very important an indicator of wh