i think the ecb will buy their equities.f i want to do, improve sentiment, look at the right part of the capital stack that , is where the companies are having a tough time. jonathan: still with me to discuss is robert tipp, scott kimball, and krishna memani. krishna, your view on that suggestion? krishna: in this cycle you cannot rule out anything. having said that, if the ecb is buying stocks, we are basically at the end of the rope. that is what it would signal more than anything else. because everyone would have tried everything and basically even the germans are acquiescing to buying stocks at the central bank level. that would be something. jonathan: to someone with exposure to european markets, that would push you into de-risking? krishna: absolutely. that would signal to me that we are at the number world rather than things getting better. i think it would be a very big mistake on the part of the ecb. there are lots of things they can do in the interim before they get to that step. jonathan: what can i do in the inte

coming up, more on today's ecb scission -- ecb decision. this is bloomberg. ♪ ♪ is "bloomberg daybreak." internalrtedly held talks on selling its hbo europe network. times" says no formal discussions with potential buyers has taken place. at&t acquired hbo in a deal for time warner. now the company is trying to reduce debt. wealthy investors are paying big premiums to buy word stock on private markets, valued at about $16 billion in some sales, more than double the valuation of last year. 's lack is asked -- slack is expected to list shares in june or july. bloomberg learning as soon as tomorrow, investors could get their first look at detailed information about uber. this month the ride-hailing startup will kick off a road show. that is your bluebird business flash. alix: thank you so much -- you're bloomberg business flash. alix: thank you so much. who cares about profitability? [laughter] david: it would be a valuation of like $120 billion. alix: with that, who needs profitability? david: there was a report in the bloomberg that it may u

that is ultimately what the ecb is doing, supporting assets.na: they are not supporting assets. again, the purpose of quantitative easing is not to support asset prices. that is what the outcome is. the purpose of quantitative easing is to support credit growth. and there are lots of things that the ecb can and will do to support credit growth. jonathan: the result is financial repression, and you guys have to deal with it. scott, we hear a lot of people ask questions like, what is the bond market telling me, what can i infer from price? what is the signal at the moment? can you really take any signal from european assets given where the price is right now? >> i think european assets are experiencing an elongated playbook from what we see in the u.s., which is robert mentioned to you strangle the front end, force investors to extend their duration and take credit risk. they are doing that at an very extreme level. and the return on investment has become total return driven and less yield driven. investors sticking with the playbook, continuing

i think it would be a very big mistake on the part of the ecb.here are lots of things they can do in the interim before they get to that step. jonathan: what can i do in the interim? scott: as we are learning the u.s. policy signal can be equally important to policy implementation. a long story on that will be in that were to be put on play, the ecb coming in and playing with the structures on putting more capital into the banking system, there is a limited total rate of return from the ecb's perspective, the transmission mechanism will not be fantastic. they have to extend that facility, have to do it sooner than june. robert: i think that's right. we have a lot of experience with qe. when you look at japan, they have been doing this since the 1990's. when you think about the end game, you strangle your government bond market, basically make it unrewarding and almost unsafe for investors. then they move on to equities. what can happen in the long run is you make the equities unsafe. you make them less attractive, performance vehicle, more danger

let's pick up on where annetta just left us in terms of the ecb meeting today. there were hopes that we would get more on possible tiering from the ecb, but in the last weeks it seems like that's probably further away than the market had been hoping are you expecting to get any more concrete hints around this possibility at today's meeting >> in terms of the formal communication, probably no the main question is how does draghi respond to questions around that because it is, as you say, focal, and i think that what the market has run a little bit ahead of itself thinking that tiering is a mainstream tool that is being discussed to be deployed in the next few months, and actually, there's a lot of people in the market, and at some point this even became clear in the pricing that tiering is opening up the way for cuts, further cuts, into more negative territory. the ecb is looking for contingency plans, but all signs are actually showing that growth is picking up, and they won't need that kind of measure. >> so tiering is not a done deal it could be revoked and wh

if the ecb is going to keep monetary policy accommodative?e know they will be introducing in september. the trade, you want to be in the peripheries. you want to be in btps. we have seen spreads narrowed dramatically. end of last year, 300 basis points, now between 200 to 250. great debt, the lowest level it's been in over a decade. to me, it is basically a signal, the ecb being on hold is a signal to take on risk. jonathan: is that right, bob miller? big move on the periphery, do you expect it to stay lower? bob: i think they grind lower. i don't think the ecb is in a position to increase interest rates or pursue anything other than accommodative monetary policy or a very long printer of -- a very long period of time. jonathan: for the periphery, it matters whether they start trading like stocks again. i caught up with your colleague robert, who suggested maybe we are at an inflection point. he thinks they can start to trade like sovereigns. why does that make sense? bob: there are two things going on, the demand for yield, high quality sove

. -- the fed, the ecb.lds are ticking lower when it comes to the bond market. let's look ahead to the china open. we are waiting for those inflation numbers out of china, also credit data, but we are seeing futures slightly negative by a 10th of 1%. hang seng futures more in the green. your u.s. futures up 0.1%. those india election starting today as well. >> philippine trade numbers are out. the bottom of your screen. smaller trade deficit, exports down, imports up. more just ahead. givingn in the show, anz us insight on inflation data, telling us why things are looking up when it comes to the world's second-biggest economy. look at china's recent surge in stock buybacks and how they are greasing the wheels to keep the equity bulls running. this is bloomberg. ♪ ♪ the ecb and federal reserve are signaling a wary of approach to monetary policy as growth slows in europe and inflation remains below target in the u.s. the pboc is waiting to see if its stimulus is boosting prices. inflation in 15 minutes from no

let's talk ecb, let's go chronologically.t people i speak to do not expect any huge move decisions, discussions. there will be a lot to question. does the market leave that tltro three will get more details or tearing can meaningfully upset their rates of -- upset the rates? john: there has been some concerns around the eurozone. we think things are beginning to pick up. in terms of the supportive policies that ecb are talking about today, we say it is an insurance policy to make sure runs its course. there is no return to the distress we saw prior to this policy is coming in. it is not going to be something that gives growth a big additional impetus. it is more about reassurance. what is the consequence question mark we can speculate about what he would say, the path of least resistance seems to be on the downside. what will be the consequence of inm more benevolent draghi regards to the bank and tltro's for the bond market, the core european bond market? wherewe have talked about yields are in the bond market, down at zero

what is the problem the ecb apparently may have?aring from sources today that ecb officials having recent meetings with deutsche bank and commerzbank officials expressed concerns about this deal. what may be troubling for the two banks is that the concerns are not just over the capital that they might need to raise, but the logic of the deal itself. there is no formal plan that has been presented, so this is all very much preliminary, but those somerns certainly present worries for both of these banks. we are also hearing from labor leaders today who have come out very strongly to say that they oppose this deal. that opposition in and of itself isn't new, but they are now saying they are going to vote as one block to try and block this both on the deutsche bank and commerzbank side. people outside of germany, as a reminder, labor representatives seats on the supervisory boards of these banks. the opposition is a real worry for these banks if they plan to move forward with this deal. david: it was no secret if this deal went forward,

but globally, the ecb and the other central banks are keen on providing accommodation.f you listen to the fed speak this week, the feeling is that 2.5 is close to neutral, so they are pretty much happy keeping rates where they are for an extended period of time until they get an indication of moving policy either way. jonathan: what do you think, bob? bob: i think the fed has pivoted in a very durable fashion and will not go back to last year's game plan. instead of following the r-star methodology and trying to pin real neutral rates at some assumed level of neutral or tighter than neutral, they have clearly changed their reaction function to underwriting the expansion. they want the expansion to continue. they want to do something that most federal reserves have been unable to do, achieve a soft landing. most feds over the last three decades. i think they are dovish, will be dovish. they are sensitive to the low levels of inflation. inflation is underwhelming. i think that lowers the bar to them easing, as opposed to a high bar with them tightening. jonathan: michael

it was higher before the ecb president spoke.helped the european stocks that growth from earlier. you mentioned the sterling rate, we saw sterling depreciate a lot against the euro. under perform slightly but going back to the ecb, he reiterated the downside risks to growth. he reiterated downside risk but we have a handle on it don't worry about it and recession is not the possibility. what is the markets take it up on that? outsideink there were bets of more hawkish rhetoric coming from him. if you look at what bloomberg intelligence is saying for example, the data has not been bad enough to justify being completely dovish. i think that accounts for the weakness in the currency. also, with the other risk going on, she summed up the bricks it talks. there is uncertainty there. anymarket is very wary of kind of small incremental changes at the moment. gotk's >> the president negative interest rates and the negative effect of negative interest rate policy and he said the ecb hasn't got the pros and cons of mitigating tools. how im

nevertheless, the ecb moving in that direction. the european banking sector hasn't had that bad a day. just ao-dollar trading offsofter now, earlier 1.13, now trading just above it. the s&p 500 still up .1%. nasdaq up about .3%. we have 2.58 on the 10 year. united health after its conference calls really taking a tumble even though earnings seemed great, the outlook was great, but policy concerns continued to linger. on the conference call, unitedhealth said if there was to be a medicare for all or some sort of policy like that, it wouldn't be positive for earnings. bank of america with earnings now down 2.6%. guy: bank of america out with numbers, reporting record profit on the back of its consumer unit in revenue.drop stocks trading down around 2.5% right now. the fadingt margins, influence of the rate rises probably a factor behind this. let's get why the market is not feeling that point about -- buoyant about bank of america today. >> the markets are having an issue with bank of america not because of bad results -- you mention

this encapsulates the problem the ecb faces. a way of getting the wheels spinning when it comes to domestic economy in the eurozone. do notmoment, europeans feel they are confident enough about the economic situation to spend money. push this needs a fiscal to get this going and provide clarity to see there are jobs out there. ,f i was inheriting the ecb this would be one of the big charts i'm worried about. european consumers do not want credit despite the fact that a lot of it is available. vonnie: both of you guys would always be the leader board in battle of the chart contestants. it is a tough one. eric balchunas today. guy: i think that is more than deserved. rumored watch etf iq with eric balchunas. that is coming up 1:00 new york time, 6:00 london time, 1:00 a.m. hong kong time. coming up on balance of power, mark weinberger, ui chairman and steel inlix conversation with the huxley president and ceo, next. ♪ ♪ david: from bloomberg world headquarters in new york, i'm david westin. welcome to "balance of power," where the

if we get there, the ecb -- if we get to a scenario in which we growth, to potential the ecb is probablyiking at the end of the year. this is the base case forward guidance and where they have signaled they would like to be. they are keeping things and hoping to get this through. if we don't get stabilization, then we are in a different situation in the euro area. stuck in the scenario of at best around potential growth. inflation dynamics would look different, etc. probably need to think about how to help the economy and if you cannot stimulate the economy enough, you need to keep the current stimulus in place for longer. forward guidance would need to be extended for a substantial period of time. probably signaling that we won't see any rate hikes from the ecb in the current cycle. that is why it is getting increasingly binary. nejra: in terms of providing support to the economy and banks, with negative rates in place, the 10-year bund yield is in positive territory today for mario draghi is likely to be asked questions about this next week -- if the ecb introduces and talks about tear

the ecb is the more interesting one. the fed did not explain much. it is quite clear they could go either way. unlikely to move anywhere anytime soon. that should remove some of the cutting hope in the market. you tell for some, they took away the idea of cutting. the head will be on hold for many months to come. the ecb had a long discussion about the damage done at banks. they do need to change that. many have talked about that. it is long overdue we start discussing how do we provide the banking sector in europe? neither of them more profound, neither of them change the game, slightly more interesting. >> everybody has been focused on if not exit, the trade story. sightof people have lost of what is going on in india. voters.ion potential how important are these elections to markets, mark? >> the people are underestimating how important india is. last year was the year it became the fifth largest economy in the world. that will be the case. it is never looking back. they are the fifth largest economy. demographics showing it that way. it should co

that is exactly why the ecb today is a financial regulator.nt to be confident that they can say this is not going to be a problem. they don't want to or three years down the road for a problem to emerge and everyone point fingers at the ecb and tell them you failed your job. problems inof the germany's consumer market -- what are the problems in germany's consumer market this would address anyway? steven: the german retail market is extremely competitive. people like to say it is over banked. there are thousands of banks in germany. few turn a real profit. the hope is that by combining those banks, they would gain scale in that market. they would gain clients, obviously. the hope would then be that the synergy would be big enough to boost profitability to a level that would be adequate. vonnie: mario draghi wouldn't weigh in on cross-border mergers and whether that is a good idea when he was asked yesterday, but what other options would be on the table if this falls apart? steven: i think that is a good question. we've had financial analysts l

suppose,is, i convergence towards the blend on the ecb -- bund on the ecb backstop.this trade done? or is there more to come? the european economy can grow, then there's more to come. this is a very directional lever trade that feeds strongly into a correlation we draw between spreads and growth. that is the transition mechanism right there. it's all about growth. our view is that growth is going to recover and those spreads can compress. if we look at the dollar, one of the things that concerns us slightly is you mentioned easier monetary conditions around the world, the ecb. we can talk about that separately. the dollar is perhaps telling us that the main driver of global financial conditions in the u.s., which is the fed, is not as easy as everyone thinks. that's a risk point. everyone is focused on this nice, cuddly fed. manus: why do you think that the fed is not as easy or cuddly as perhaps the market assumes? william: just the data. we always look at what the fed does a rather than what it's saying, and the recovery that was taking place. they took growth from

we will talk the ecb, brexit, trade, and more.ine: the european central bank its pledge to keep interest rates at record lows. mario draghi spoke earlier today on the balance of risks. >> the risk around the new era tintedth outlooks remain to the outside, on account of uncertainties related to geopolitical factors, the fret of protectionism, and vulnerabilities in emerging markets. caroline: the brexit battle in the background, cooling growth, and the u.s.-eu trade tensions, who better to have as a guest than valdis dombrovskis. thank you very much. how worried are you about the european slowdown? mr. dombrovskis: first of all, economy tohe eu's continue to grow. our forecast is on growth this year of 1.46%. we still expect economic growth in all 28 eu member states. there has been some slowdown and we have revised our forecast numbers compared with previous forecasts. but, in any case, we also see strong signs of the european economy. employment is at record high levels. unemployment is down to precrisis levels. of thestrong dem

does fed, ecb move more hawkish or maintain easing policy until then? francine: ecb next.t, pressures on the turkish economy intensify and we talk about the president. this is bloomberg. ♪ w?w?uhió'ñó francine: economics, finance, politics. let's get straight to bloomberg first word news with viviana hurtado. viviana: oil is extending gains .fter iran waivers mike pompeo says any nation that continues to buy crude from the gulf nation will face american sanctions. in response, the islamic republic threatened to shut the traffic heavy a straight -- traffic heavy strata vermouth -- straight of vermouth. churches and luxury hotels were on easter by seven suicide bombers that targeted tourists and christians. president trump dropped his plan to put herman cain on the federal reserve board amid opposition from his own party. the mcreynolds are urging republicans to block the other picks even more. urgingcrats are republicans to block the other picks even more. of planes bursting on social media. a white car bearing the tesla logo was a meeting smoke before catching fire. the te

that could mean a german at the ecb. it would be germany's term.ebody with views generally aligned to germany's more hawkish stance. guy: the question is which germany? frederico: we will wait and see. eurasia group senior analyst for europe joining us to give us a sense of what the lay of the land looks postelection in spain. look at the european markets and get a sense of how we settle down. a little bit of a dip lower during the auction process but not by much. all of the main indices finishing in positive territory. if you want to carry on with the analysis, you can tune in. you can do so on your dab digital radio in the london area. the cable show will be taking place at the top of the hour. jonathan ferro will be anchoring from new york, i will be anchoring from london and you can also find us on all of your bloomberg devices. this is bloomberg. ♪ guy: live from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on bloomberg markets. let's get back to los angeles. erik schatzker is there with the key

i do not think the ecb can relax yet. to figure out what the german numbers look like. talking of germany, i want to connect that with china. the official data today showing weakness. the market has taken it as a glass half full scenario because it confirms the chinese authorities will need to continue the stimulus. is that the right reaction? janet: sort of. today's data is not that bad. guy: still above 50. janet: it still shows civilization. you cannot be focused on monthly volatility. if you look at the breakdown of the components, the new expert order -- export order started to pick up. there are signs of recovery. i would not dismiss the report is totally negative. if the report turned out to be strong, i think the market will be thinking the pboc has to refrain from further stimulus. this report is kind of positive to market because then markets will think we are not seeing more evidence of recovery, we have to wait a bit and the central bank will have to wait more to turn the policy status. vonnie: can we read anything into yuan moves. today we are trading at 6.

leave at some point and it is a bit like the ecb president.hort term, there would not be that much difference. they would be presented with the same set of political issues. it would be difficult to know that without knowing who it could be. it willo know is that probably take a backseat. james, jumped in because we are getting breaking news deutsche bank and commerzbank. as was reported by bloomberg earlier. deutsche bank and commerzbank announced they are ending merger talks. banking coverage for bloomberg intelligence, they are saying this is good news. but a lot of people were saying that this was more of an acquisition than a merger. have been big news for deutsche bank and commerzbank because they would have been able to cut costs. the big concern for deutsche bank is that they haven't been able to cut costs as they wanted to. this is partly due to what happens in germany with labor laws and unions. deutsche bank and commerzbank have decided to stop talks. i know we don't cover the banking sector. we hear mario draghi talking about negat

when we are talking about the ecb losing money, how much does it matter? think about mmt? seems like it is a great descriptor of what is happening. megan: i think mmt works as a series of accounting identities, the problem i have is that the argument is as long as you can print your own money, you don't have to worry about issuing debt. until you get inflation, and that is where the rubber hits the road. if we wanted inflation, we could do it, and one way would be to print a load of money. i am with the establishment, i don't think it works in practice. and if the debate is happening in the u.s., particularly on the left side, try this experiment in the biggest global economy is incredibly risky. much,thank you very global chief economist at many life -- manulife. tune into bloomberg radio. up next, some of the other --cks on the move is coming falling amidst new investigations. more on that next, this is bloomberg. ♪ the: welcome back, this is european open, 44 minutes into the trading day. .3%re seeing the ftse down as is in the long. the continental ind

we got a huge change in structure at the ecb. inflation would print lou are -- would print lower. it is now going to pick back up in april. the ecb may not be as accommodative in the second have of this year. david: we've been a negative interest rates there for some time. at what point does that cause sustainable damage because they they ared by it to -- hurting basic structure? --id: they need to do's david o: they need to do something with negative rates. if they think they need more stimulus come june, they will take it further. there's going to be another tltro affected in september. it is really not known, and it will wait until june to decide what to do. o.e, if david is right. right andd o. is becomes more hawkish, how much would you have to trade on that? we think second get highlights this year, but our view right now is who in from global synchronized tightening to global synchronized easing, to a re-acceleration. in terms of the fed, i think you would have a real credibility over the course of a couple of months. seei

guy: is the ecb responsible for this?right now over tiered interest rates and whether the ecb is responsible for the lack of profitability of european banks. what is your sense of what is happening here? i just wonder whether it is as much to do with the ecb as it is about the fact that europe just doesn't have a banking union, and capital markets union. it doesn't have the pieces in place that u.s. markets do. ian: it is certainly true they do not have those political capabilities, but in terms of whether it has to do with ecb rates, i am turning to fred because i am not an economist on that. fred: they have to hold all these mortgages on their balance sheets, unlike the u.s. the second thing is zero interest rates just mean it is very tough to make any money, just like in japan. ian, all of the bright guys like fred and the others say you got to go cross-border merger. but there is a massive cultural issue in europe about this. describe for our audience the tension of unicredit/commerzbank versus an international bank.

ecb really have left?ey do not want to do qe again have their -- after having just ended it. fiscal policy is really what would be the most effective way to deal with a downturn. and there are some countries that have done something. we have summers bonds to the protests in france. -- we have some response to the protests in france. so he is not coordinated, has less impact on confidence. that is the missed opportunity here. talk to me a little about brexit. if there is a no deal brexit -- i do not know if that is a 20% --nce or lower in your eyes move hard brexit would markets dramatically. i do not think there is any doubt about that. the probability of people attached to that event is low. it is not priced at this point. the bigger question is whether the brexit process would have broader systemic issues to the euro zone. the experience we saw after the vote was a good example. funny four hours of panic. we had a very outsized move in u.k. assets, including sterling. but we did not have anything that lo

you have the ecb meeting this week. >> let's get the ecb meeting out of the way.feel this week there's going to be anything in it. we have policy announcements. i do nothing we get any details. i think this one is one that can easily be skipped. having said that, if you take a step back and you take what i just said about the labor market, our general view is going into q2, into q4, into q3, excuse me, we will very likely see a cyclical rebound of economic activity. we think most of the major bond markets will start seeing a rise in yields again. , the eus -- for bunds has anchored firmly. any rise will probably go above the four. it is difficult to see a substantial rise. nejra: how would you advise to invest around the yield curve in the u.s. and europe? >> first and foremost, in our mind, is whether or not the implied inflation expectations can rise again. if you look anywhere outside of the u.k., the breakevens have been falling quite rapidly. we think there is a rebound do here. that would favor inflation linked bonds. if that is the case, though, if the brea

. >> i would add that is not technically not what the fed's mandate is >>> ecb president mario draghipressed concern over the fed's independence he said this hinges on central bank autonomy. >> we have 19 governments we deal with and our independence is enshrined in our constitutional treaty, which is not the case with the other central banks in the world and it couldn't be different if you think because 19 countries to deal with, you either create something that's truly independent or people would view this as being subject to this country one day and another country another day. so i am not worried about that, but i am certainly worried about central bank independency in other countries, especially as in the most important jurisdiction in the world. >> i was at the press conference as well and asked draghi about the tradeoff between resuming asset purchases and cutting interest rates after the ecb said it was ready to use all available instruments at last week's meeting. >> clearly, the choice in different instruments would depend on different contingencies, so that is the -- we wil

you mentioned the ecb as well. how much is spain benefiting from ecb policy?y markets, does not look like we're going to get a raise anytime soon. >> loosening financial conditions have been a tailwind that benefit spain, cup mind with lower oil price until now. -- combined with lower oil price until now. the ecb looks to be taking a lower for longer stance. that will be how growth in the short term keeps span -- keeps spain outperforming. nejra: to the euro this week has hit an almost two-year low. data out ofidence germany and france. for a see prospects second half of the year? >> given the way the fed in the u.s. is looking a lot more dovish and the way perceptions are changing, we can stall for the euro a bit. it does not look like the euro has room to go a lot higher. the prospects are weak in terms of growth and inflation. you mentioned you are expecting this lower for longer. tros about your take on tl and tiering? have been announced. we need to see how much banks take it. i think there is still a lot of discussion. there is a lot of debate. i'm not c

the euro took a large step lower in the ecb press conference where mario draghi stressed that the ecbstand ready to use all instruments. later in the day the euro recovered, and now it's four basis points higher just below that 113 mark. sterling in focus. right now trading down about 16 basis points around 130.68 overall very range-bound despite the relative break-through in brexit finally let's take a look at u.s. futures. according to reuters, the lawyers say in a document that the latest arrest, which is the fourth arrest of the disgraced nissan motor boss has been illegal. it was a violation of the constitution and designed to halt the defense preparations. again, this is according to documents seen by reuters prepared by carlos ghosn's defense lawyers. it goes on to say that ghosn suffers from high cholesterol and a side effect of the treatment also suffering from chronic kidney failure, and that he has not been given his medication again, there are a couple of details in here. he was forced to undress in front of a female investigators when taking a shower he was subjected to m

coming up, mario draghi winds down his term as ecb president.ins us next for what i'm watching. this is bloomberg. ♪ david: here's who i'm watching today, mario draghi. stepping down as ecb president come this fall, there's a piece on the bloomberg right now saying that it will be hard to fill his shoes. joining us is rick rieder, blackrock's cio of global fixed income. this piece says if you really look back at what he's done, the whatever it takes remarks that may be cap the union together, and how statesmanlike he's been, he's done quite a job. rick: i'm a big fan. i think he's been incredible. i think it is the hardest job in the world. you think about the demographic dynamic, the leverage dynamic. you've got 19 countries all going in different directions. i've got a chart that showed the temperature in the euro zone against the leverage of growth. you have this incredibly different dynamics. only one engine that is coordinated, and like you said, he's done a really good job of managing it, being innovative in terms of different ideas. prett

think that is the million-dollar question for the ecb. i say this because we have seen significant downgrades in growth forecasts, so they are acknowledging there's some downside risks in inflation over the next couple of years. the big question is what the ecb has in their artillery to be able to push back against the deterioration inflation. the reality is they don't really have that much. we are already at negative rates. they have done the quantitative easing they pretty much signaled. this is not our central scenario. the good thing is we have started seeing wage growth picking up, and we should eventually start seeing some of that filtering in two inflation. vonnie: what about the u.s. dollar? will we see continued strengthening? guest: well, in reality the dollar has pretty much gone nowhere over the past two or three months. i have to say, these past two or three months have been one of the most boring for the fx market, especially after the decline in dollar-yen, then the recovery. over the past two months, we've seen virtually n

it's not the first suspension hales has faced, last year the ecb handed down a punishment following aof bristol. the nhl, the philadelphia 76ers are leading 411—26 at toronto in the second quarter. it is level at one — one. until next time, i buy. ——by by. hello there. over the next few days the warmest weather is likely to be across more eastern parts of the uk, where we see the best of the sunshine. there was more cloud around yesterday across the south—east of england and east anglia. it was fairly thin. that has certainly broken up and we've got some clearer skies right now. further west we're goin to find this weather front sneaking in, it's going to bring some patchy rain and drizzle, but it is moving very slowly eastwards, into that area of high pressure. so for many parts it is still dry by the morning. temperatures in the clearer skies dipping away to 3—5. we have some sunshine or northern scotland. patchy rain coming into the father west of scotland. for england and wales, we are yet to see any rain crossing the sea, some mist and fog patches crossing eastern england, we sho

the other thing is on the ecb. the ecb has told us they are not hiking until the end of the year.ve done the tltro program. they are going to help the periphery. what they are trying to do is extend the cycle as much as they can in europe. european growth is weak. there are big structural issues with europe. if there is a reach for yield in europe, where do you go? in are at zero e and -- zero bunds. you want to go into the periphery. i think the periphery spreads will continue to tighten. gershon: we tend to do with the extremes. it is sovereign or all risk, but in reality it is somewhere in between. there are idiosyncratic examples. italy, a lot of populism. there are debt problems. all of these economies are susceptible to the region in general. you have to pay attention to both. this will be a systematic component that goes along with how the european economy goes. there will be idiosyncratic components about how the individual countries work out their issues. victoria: you and i have spoken before when it comes to europe, how we feel there are a lot of things going on particu

ecb minutes confirm they may be shifting their bias.hey could be given their whole stimulus and rates lower for longer. regardless of what the fed does. quest that was our policy editor, kathleen hays in new york. >> that was our policy editor, kathleen hays in new york. how did we get here, selena? going from talking about hikes to cuts? lena: the fed has been trying to manage expectations. we are looking at a hike in 2020 and possibly something beyond that as well. talkings have been about the possibility of being on pause for now. i think if you look at the global prospects, they have softened quite significantly. going forward, inflation is not picking up. although everyone is waiting for the numbers to come out, i don't get the sense that we will see a very strong, commencing pickup in which there is inflation. at the, if you look whole macro picture, the system will have feted by then. everybody is probably leaning toward mutual instead of accommodative. there is a lot of pressure on the fed. -- of this talk from the fed about the

you've got that ecb meeting tomorrow. so why would it be higher? a little bit of buying on the blackened. blackrock says the market -- on the backend. tookrock says the market is confident. the question for me is where do we from here. it feels like there is no strong direction being taken. i wonder what that catalyst is going to be in terms of the overall market. you come in and see the airbus news and think air will be down. note. not the case. now it is time for bloomberg first take. we are joined by bloomberg cross-ice at reporters. --cross-ice at reporters cross asset reporters. this case has been in litigation 14 years, and the time has come for action. when the eu ends these harmful subsidies, the u.s. duties proposed in response can be lifted. what possible effect could this have on businesses and markets? >> these have been pending for quite some time. markets just clearly shrug it off. as it relates to businesses, we will have to see what the tariffs actually look like. how will that affect u.s. businesses and european businesses? what i

for me, it is the last resort for the ecb. something that they would really only deploy if they are also willing to acknowledge that rates will not rise for the next couple of years. nejra: all right, so if you think it is the last resort and it will come coupled with forward guidance on lower for longer, does that mean you expect a deposit rate hike for the ecb later this year or early next year? the: economists still have rate hike penciled in for the end of the year -- nejra: the market is not, though. ralf: the market does not care similar to the pessimism around the della reese, because they have -- dollar rates, because they have it based on germany, based on the fact that autos are is, the labor market slow, and i am sure we will come back to china later. recoveryan underlying story that you can tell, and if that comes through, then growth should be back above potential in that scenario. a rate hike is not that far-fetched, given that the ecb, i think, is so desperate to get out of this negative rates wrap. nejra: does

that's talk about the ecb -- 6/10 of 1%. let's talk about the ecb.in the toolbox? matthew: we do think you will see a rebound and you are seeing early evidence of that. we get the next data point on thursday with the pmi's, but outside of the german manufacturing sector, we are seeing evidence of bottoming out and an invention oh rebound, china being an important story globally to lift manufacturing. the data has been coming in ahead of expectations already, so you will see a bottoming out in a rebound. on the ecb, the most important news recently is opening up to further depot rate cuts. there was an assumption that qed was the next port -- qed was the next port -- qe was the next port of call. tom: banc of america out with earnings, pretty much sender -- bank of america out with earnings, pretty much sender tendency. -- center tendency. bank of america a domestic effort versus the international flow of citigroup and j.p. morgan. guy: i want to see whether or not the net interest story will improve. might get a flat curve in america. that is somethi

it is about the ecb and adding stimulus.k that markets just need to get away from this addiction. to central-bank support. so where is the top line coming from from the banks? where is the revenue growth coming from? where is demand? where his investment growth? has answered that question and that is what is frustrating at times. tom: unanswered questions. is hereom union bank with us as well. peter, i look at the dollar, the strength, ifllar you will. can we talk about a dollar breakout confounding? question is not just a of being able to, but we have to, really. the dollar index, we are breaking towards pretty important levels. what is interesting is that the dollar really went through the roof when rates were going lower. the dollar rallied against the g10 and em currencies. we have not seen any followthrough today, but if we do get through the punchy levels of the dollar index, investors will have to jump on this. question will be one of positioning and whether or not investors really follow the dollar moves at this poin

we have the ecb meeting and the fed minutes and then the emergency e.u. where we will look to answer the question hopefully around the length of an extension we may get for brexit but it remains a big, open question uncertainty is still the name of the game when it comes to brexit let's take a look at u.s. futures there. we're looking at a slightly weaker trade to start. the s&p down, the dow, the nasdaq all coming lower. this comes back on a solid jobs report on friday also a solid week yaefr all for u.s. equities led by materials jomana. >> thanks again. switching to the middle east now. israeli prime minister benjamin netanyahu has pledged to annex jewish settlements if he is re-elected speaking in a tv interview he added that his government will extend israeli sovereignty to the entire area and defend a palestinian state. those settlements are considered illegal in terms of law. israel will hold general elections tomorrow with polls suggesting a tight race. >>> arab countries should help israel overcome the security concerns we're joined from aman it'

we welcome the ecb and the fed's recent decisions.n growth picks up, went -- when they are delivered, they have to look at the balance sheets and start dealing with it. >> how dangerous is this monkeying around, for lack of a better word, with the fed? >> international banks have to cooperate on the issuance of data. they have a mandate which was given to them constitutionally or by laws made in other countries. their mandate is going to be either price stability and unemployment, price stability only, generally around 2%. but they have to rely on data, on numbers, on hard data that they collect with enterprises, corporate, households, in order to find out what will be best to deliver on that mandate. i think it is a healthy, almost sanitized approach that will give them credibility, and that will help all economic agents anticipate what will happen and as a result, what they can do. how they can invest, how they can organize themselves. abigail: coming up next on "bloomberg best," more compelling conversations. mark gilbert of standa