and what the past 20 years can tell us about the ecb's monetary policy in the future the ecb's mandate is given by the treaty as price stability. in 1998 the governing council defined price stability as inflation within a range of zero to 2% over the medium term, which constitutes the ecb's objective. then in 2003, the governing council clarified that within this range it would aim at a focal point of below but close to 2%, which remains our medium term aim to this day this was a formulation that differed from the standard inflation targeting framework of the time which was typically based around a point target for inflation there were sound reasons why this definition was put in place. in common with central banks across the world, the ecb faced a macro economic environment before the crisis that was predominantly defined by low volatility and moderate shocks, with the distribution of shocks to inflation almost exclusively to the upside. in theeuro area, hicb energy prices rose by 80% between january 1999 and september of 2008 under these conditions establishing a strong reaction func

dovishness from ecb. francine: ecb is different from the fed.iven what he said today, which feels like the smaller cousin, what does it mean for the fed? yacov: it is too early to extrapolate. a general sense, nothing important, i.e. nothing critical, i.e. no cut this week, there is certainly room for the fed to signal intentions for the rest of the year. it feels like markets are getting over excited with regards to the trajectory of fed cuts for the rest of the year. perhaps, it is worth tempering enthusiasm. francine: you think they are over excited? markets thathe they will cut rate in july. if you look at global picture, it makes sense. yacov: how much of an insurance cut does the fed undertake? is there a move to take back the december hike, which in retrospect seemed too far? there is a move to do something. some of that discussion about three cuts over the course of the next few months may be premature. it is fair to say, it is starting to point in the direction of softening u.s. growth, but just starting. it still bears watching. trade

the ecb on the road.e joined in studio by peter schaffrik, globa macro strategist/analyst, rbc europe limited. what is your focus point to be from the ecb today? italy, one focused on the inflation expectations? peter: let's get monday and stuff out of the way. the details are missing. if you are in the weeds, you are closely watching this. how low will it go with the interest rates? it will be the same this time. for broader market sentiment, you heard from your colleague, any indication that the ecb might give that they are willing to contemplate looser monetary policy, that would be the big market mover. i do not think this time around they would openly endorse or indicate that they would be willing to do that. it seems a stretch too far. , the mlivh assets weston of the day, which assets do you expect to move the most around this meeting? typically when the ecb goes off-site, they give us more to chew on. last year and the year before, they give you a couple more headlines. they might as well since th

it basically preempted a cut from the ecb. central bank had more tools to use and will put them to use if the economic outlook does not pick up and quite frankly no one in the market does expected to pick up. he was pushed to do this because inflation expectations were so low. he listed the tools he had including forward guidance which is already using. renewal of quantitative easing which might be difficult, and cutting

how far does the ecb go? do they said a very low rate so that banks can then lend into the real economy at a slightly higher rate? they get a carry trade, and it sends them into additional lending. but there are countries where there just isn't loan demand. those are among the countries that needed the most, italy being a good example. it is not clear how much effect it would have come a but they need to give the details now and we will see how markets react. david: the real issue is whether they will create more growth in europe by doing this or just not discourage people because people expect it now. i don't know if this will help as opposed to not hurt. sarah: is there really anything much that they can do at this point? at this point in time, probably all they can do is acknowledge the fact that there are increasing risks to their guidance, and they have been pretty encouraging and set in stone with their hiking bias, that we will see a hike sometime in the future. now there are concerns that they could b

what we need is a joint statement of the current ecb leadership and the future ecb leadership to makedo not know the future ecb leadership yet. i do not know anything major will come out of the ecb before september. we have meetings in september. at that stage we will know who the successor is. guy: by that point, the ecb could have lost control of the situation. by then, the fed could have cut. the fed could have cut a number of times by then. does the ecb have the luxury of that much time at this point? christian: if something dramatic happens, the ecb can always act further. i think than the actions would determine how markets react. at the moment, we are at a stage where we think the fed is not going to cut because we think there is going to be a de-escalation of trade tensions. markets are doing well enough and the u.s. economic data is doing well enough and the ecb does have more time. the more general question for the ecb is whether or not they can act in the short-term. the general question is whether they are committed to 2% inflation or do they have the tools to do it and th

the ecb is in a world of trouble. how in the world can the ecb talk about anything other than cuts when the fed is saying the same thing? john: they clearly have started to discuss more qe. they think negative interest rates still work, but clearly they are monitoring that, and that is where the whole idea of tiering comes in. see.nk we will wait and i think they are keeping their options open, looking at the tools that are available, but clearly if you've got negative interest rates already, your space is somewhat more constricted. guy: john, thanks for coming by to see us. rd, investec's head of multi-asset income. let's get to a guest now from bloomberg'sed by annmarie hordern. arie: i am pleased to be joined by the socgen ceo. let's start with the ecb. it seems underwhelming for the market. do using the ecb is doing enough? think i think so, and i there was not any specific surprise in the comments. a relatively modest slow down, so probably the ecb will keep its rate as it stands currently. and financerprise, con

we will speak to an ecb former chief economist.♪ the latest innovation from xfinity isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. alix: this is "bloomberg daybreak." i am alix steel. historical moves being made in the bond market. futures reacting to potentially more easing from the ecb as mario draghi says he has tools in his toolbox and ecb officials saying a rate cut as their primary tool. european bank stocks are actually up .2%. i would assume they would be totally hammered as we're seeing unbelievably moves in the gilt market. -32 basis points for germany. france at zero. sweden at zero as well. the curve continuing to flatten. off the lows, but still flattening is the word of the day. it seems like the currency market is somewhat more stable. we are in a two

it is not an official ecb meeting. more of a colloquium if you will that mario draghi holds here. has had aly come he real effect on markets. a couple of years ago he heralded re-inflation. we can definitely see that bonds are priced for a selloff if mario draghi really starts to the the tools out of basket. commerzbank says draghi needs to act. a rate cut would be the best thing to do in response to a fed rate cut if it puts upward pressure on the euro according to commerzbank. from anht, we heard analyst from the peterson institute and he says the ecb does not have any more room to act in case of a run-of-the-mill recession. he says what europe needs it fiscal policy and even maybe concerted action among all of the different european governments. he also talked about high in the sky things like a european budget financed by european bonds. a long way offe but will be discussed here. nejra: while they fight the challenge of the collapsing inflation expectations as well. great to have you with us. let us check in on th

the other big focus in the market is the ecb.he euro gaining against the dollar, despite coming against that ecb decision, keeping rates at record lows for longer. finally, all across the u.s. treasury curve, take a look at yields. two year yields down to basis points, the three year down three basis points, and the 10 year down 10 basis points. vonnie: thank you for that. still ahead, we are speaking rd's vice-chairman on regulations and his outlook for markets post ecb. this is bloomberg. ♪ ♪ vonnie: we are almost two hours into the session. week so far, green at looks to be that way so far today. a few components in the dow lower, but they remain higher. a fairly constructive environment today. well to addogle as to its cloud services is helping the nasdaq. it had been lower earlier, but is managing to grind backup. the vix is a little lower. the dollar is one to watch today. negotiations between the u.s. and mexico get back underway at 2:00 p.m. eastern in washington, d.c. the peso is certainly weaker today. guy: let's take a

they may trade that position for the head of the ecb.her question is, what about fiscal stimulus? they made a bigger call for it yesterday. any comments from juncker about fiscal stimulus and could we see some government shift toward that or changing the rules allowing mortgage from countries like italy, for example. there's a lot to talk about. i will speak with the head of finnish central bank and the portuguese central bank. that should be interesting, all this afternoon. nejra: so much to look forward to, i hope the weather holds up for you there in portugal. simon french is still with us as well. i mentioned the stunning drop in , arst renewals going below zero as well. hismario draghi going to in tenure with a cut? simon: i think he may well do. he would want to ensure the thatssion is done in a way isn't going to be disorderly for markets, that the markets could be softened by a cut, then he will -- i guess that's the best chance of achieving that. i will go back to comments around what is this trying to achieve. it is not clear t

the ecb also makes a rate decision.friday is the end -- that friday is the end of theresa may, the prime minister. she steps down as the leader of the u.k. conservative party. to.a: much to look forward joining us from mumbai is niraj shah. here in london is annmarie hordern. indian equities showing resilience despite president trump terminating india's designation as a developing nation. tell us what is going on. >> good morning. this did not have too much of an impact. the crude price fall is leading to what is happening in equity markets and money markets. while everybody was bracing themselves for some impact because of u.s. markets, we started about an hour and a half to two hours in trade. we are up 0.5% and holding, which is good. you see this impact in the money markets as well with the ease and the currency markets quite i saw the because of piece -- because of the crude price fall. the fall in the yields gives room to the reserve bank of india to come out with rate activity which could possibly be higher than

you still expect a rate hike from the ecb in 2020. i think you've got the first one coming through in september. the market is pricing in a 10 basis point cut by then. how convinced are you that the ecb is going to raise rates? anna: as part of our baseline at the moment, we do expect the first rate hike in 2020, but ,ompared to the market pricing our call is conditioned on european growth remaining solid. get muchescalations nastier than right now and we end up with a global growth slow down, in the euro zone, and core inflation fails to accelerate, it is very likely that ecb might have to. guy: let's talk in draghi speak now. does the risks lie to the downside? anna: that is part of our expectation for the meeting tomorrow. is going to update macroeconomic projections, and we expect them to maintain the rhetoric of downside risks. vonnie: who will be the next ecb president? anna: i think it is difficult to say at this point. we think that it is going to thend on the outcome of european summit in late june. essentially, we think the

i am here for the ecb forum.utes time, jean-claude juncker is going to come out and give a talk. we will bring you any of the highlights from that. afterwards, i will talk with the former chief economist of the central bank, and later on, i will be speaking with the head central-bank -- finnish central bank. he is still in the running from the bank of finland. next, it is "surveillance." ♪ francine: all or nothing, president trump and xi jinping say they will sit down for a meeting at g20. the u.s. places new sanctions on turkey. trump versus powell. the white house asks lawyers to look at the legality of firing the chairman, we get the fomc's latest decision this -- later today. and a vote of confidence, boeing receives an order for 200 max 37 -- 737s, iag's chairman william walsh says he would get on board one tomorrow. francine: welcome

in that sense, the ecb has been successful.e policy has been less inflation and generating long-term growth that we could call -- above the trendline. i will not give lessons to mario draghi. we have to adjust and when you think about banking and the stress it puts on the profitability of banks, from an asset manager perspective, we have clients that have long-term dated liabilities which have been discounted in the past at ave to 7% and when you assume long-term low interest rate environment, probably longer than we anticipated 12 months ago, it becomes increasingly difficult for asset owners and pension funds, for example, to generate the kind of long-term they seek and as an asset manager, we need to bring solutions to our clients which is how we are trying to adapt to the environment. nejra: tell me more about that, then. in an investing environment like that, where do you see the best opportunities? jean: we have to look at alternatives where you have a trade-off between liquidity and return or risk-adjusted return. we hav

in terms of this ecb conversation, how stimulative how soon do you expect the ecb to become and how?how is the much harder question, i think, because they have run out of bonds to buy. ms. estimation that free-floating bonds is less than 10% of the market -- there is estimation that free-floating bonds is less than 10% of the market. there will be questions about how much they can actually do and whether it will have much impact. yields are already negative. it is understandable that the ecb is talking more dovish we now. all central banks -- dovish ly now. all central banks are. anna: what type of shaped would be ammunition -- shape would the ammunition take? michael: what would they buy? it might mean that the ecb ends up buying equities. that sounds like a remarkable statement, but given that they haven't run out of sovereign bonds to buy, i don't see where else they don't. anna: matt, -- they don't. -- they go. anna: matt, jump in. matt: i just wanted to see what you think about about when they change that relate. the capital key will be trashed, no? the primary challenge they ha

there is a risk for the ecb.fed it does cut, you can see the euro strengthened, and that is the concern for an area that relies quite heavily on exports. anna: thanks, paul, great to get your insight. paul gordon, bloomberg's central banks editor. president mike pence once mexico that tariffs arns mexico that tariffs are coming. we get analysis. this is bloomberg. ♪ anna: welcome back to the european open, 48 minutes into the trading day. european markets up by .6%. one of the biggest drivers is the oil and gas sector, closely followed by technology and media. oil prices up by more than 2%. it has been a roller coaster of a week for oil prices. we have got a panel ongoing in st. petersburg, annmarie hordern is hosting. the saudis are suggesting they want to see oil prices higher than where they are now. ands leave prices there think about what could influence markets in the days to come and pivot to the trade war. says they still plan to impose tariffs on mexico after ending discussions without an agreement. talk

i am an edwards alongside matt miller who is in the ecb form. ist: the market say the end 94 risk assets, or is it? -- the most bearish in the latest bank of america surveyed. blackrock says the risk rally has room to run. the cash trade is less than 30 minutes away. ♪ anna: any hint of stimulus. mario draghi delivers a pitino's -- a keynote speech with investors scanning for close on policy. the fed begins its two day meeting. airbus gets a boost. american air is assessed to be in talks to buy 50 new alienfter they hand in 11 dollar deal. we are live at the paris air show. money as phils tronic cuts full-year sales forecasts. what looks to be less than expectedly sunny conference. is quite do me and gloomy here which i think is fitting. we look at treasuries, yielding almost 2% right now. winds yielding negative, 25 basis points. yesterday we had olivia saying basically that the ecb no longer has the tools it needs to confront if we were to say one, even a mild recession that governments need to be spending more money, fiscal policy needs to ta

notfact that the ecb is meeting its target is important.ative interest is there and the market knows they cannot one without damaging , this is a credible move. once you said you would do whatever it takes. what does the ecb need to see from you? salman: it was a nice setup. they gave the details when the situation deteriorated to give them some option value. the first shot has been fired by draghi. i think we need more credible discussion toward this. to do this nowe or even before he steps down. four -- i think when the front runner becomes clear, we need to have more of these discussions. anna: we have been saying all morning that we have a big focus on aviation. we are there in paris for the airshow. boeings crisis -- boeing's crisis threatens to overshadow its presence at the airshow. guy johnson is there for us. guy: thank you indeed. berg --dennis muilen uilenberg with us. dennis: we are very focused on safety. that is the paramount focus. the tone for the show. we are making progress on backup. the max working through the certificat

faith.and losing sinking expectations and trade woes onto the ecb.ng council member tells bloomberg exclusively the central bank stands ready on the risks. if things somehow do not go how it is predicted, we will certainly act. there is no question. manus: you've got your equity futures marching higher. everybody is focused on the central bank and the possibility of rate cuts from the fed. the bank of japan governor using the right language in terms of more headroom. max headroom is global, that's for sure in terms of the equity market. of where themoment central banks are the heroes. rhetoric.he heroes of now they must deliver in terms of their actions. to the bond market, which is the defining prism of risk along with fx. farbond market has gone too too fast. bunds advance. comments again coming this morning. money is coming out of the bond market. commerzbank says mario draghi's take on inflation is nothing but wishful thinking. keep an eye on italian government bonds. there is a drag according to -- robeco.robe aco 10 year u.s. treasuries declini

it is heavily criticized in germany and as the race for the next ecb president heats up, the ecb willreful not to be seen to be playing politics here. did they do with italy? what did they do with the concerns we have seen on budget rules? is there anything they can and should do in the immediate term? andreas: they cannot do anything about italy. the commission is trying to step into look at the italian deficit. it is an italian political situation with political implications for the euro zone. it is not the ecb's job to deal with italy. read, marvin, jackson hole a few years ago, on the amplitude of negative interest rates. at thoseknow if we are levels, but what i know as a vector, it is not good for deutsche bank, et cetera. i am looking at a screen different than three weeks ago. record0 year, a new negative interest rate. how does mario draghi unfold this experiment besides hoping and waiting for economic growth? andreas: it is interesting. tom: no one knows. andreas: nobody knows is the answer. we may be in this for a long time and that may not be a bad thing. a lot of people t

vonnie: can i ask you about the tweet on mario draghi and ecb earlier, kevin?hat is washington saying? -- president trump trump taking on a new central bank? kevin: absolutely. party have really been pushing the president to go against for quite some time and this is the president pushing back against large-scale institutions, financial institutions, as well as more international trade agreements. we have seen that in the past, but this is the latest iteration of that. the fed chair jay powell may be breathing a sigh of relief. puts the fed chair in a really interesting position. not only has the president done some of -- work today, if you believe there is an antagonistic relationship when it comes to the currencies, but the fact he has talked about a meeting was the pressuree of off the fed the president has in some ways made life easier for j. powell, not harder. kevin: precisely, while the president has preferred to have bilateral trade negotiations, we have seen in recent weeks, embrace this multilateral response. he has said he is more in line with mexico

as you can see from the chart, all three of the ecb main inflation measures are at best ecb a percent away from the just below 2% inflation target, and they are not even flattening out. this is one thing he is concerned about. the other thing that came up in the conversation today, it started with donald trump. after mario draghi talk about adding more stimulus potentially, the euro weekend, and donald trump said what is going on? it looks like the ecb is taking a step to weaken the euro and unfairly compete on trade with the u.s., which provoke questions and responses from ecb economists that said they were surprised trump would have tweeted about something that the ecb does all the time. tradented out that tensions are contributing to the uncertainty. bottom line, in the midst of all this, the german ten-year bund reached a record low of -.29 basis points, and the french 10-year went to zero for the first time. the markets certainly paying attention. david: he didn't just limit the attack to the ecb, he also looked back home, nothing new. he looked at jay powell, and according to ou

i'm not sure i think the ecb may move in lag response to what the u.s.eard from draghi, while it may not be his call, later this week there's going to be a summit in europe where they'll decide who the next head of the european central bank is mario draghi is out by october if it's a german -- there's never been a german head of the ecb, that could go in a different direction. >> all this macro stuff we talk about, that's out there. what our viewers and what your clients want to know is what do i do >> i think there's a few things to consider. one is think about the healthcare sector. this is a sector that's lagged this year. it's reasonable from a valuation perspective that could really do well or relatively better in an environment of slowing overall growth of course healthcare is a more defensive sector it's also one that did well in the fourth quarter of last year when stocks fell sharply it was the second best performing sector. that's an area you can look to for defense in an environment that may be more difficult in the second half of the year. th

less talk about another central bank, the ecb.uestions over whether mario draghi can out of the market. dove the market. >> sentiment has been going around the market for a long time. not only do we have the changes markets,eing in global actually changes into much more of a -- economy. the european economy is china facing. the more china worries are out there the more europe seems to be getting the backlash from that. on top of that, we have got brexit. effect this incalculable on sentiment. when you think about innovation, when youth think about the economy itself, it will bottom out and you will be able to find companies you really like, particularly in the smaller companies space. manus: i am just noticing the story from barclays this morning. the most despised market in the world, that is the u.k. ftse, they are overweight versus european equities. so long as you hedge the currency, brexit uncertainty caps the pound for now. do you think that is a similar story? >> european markets are outward looking, but there is a lot of e

the ecb may try. president draghi has a forum next week.uld be the stage for some interesting announcements about what lies ahead for the ecb but the assumption we are making, it is the central bank that may have to do the heavy lifting here maybe the fed. we expect two rate cuts by the fed later in the year in response to some deterioration to growth outlook. potential further intensification in recent months forcing the fed to act. the boj, the ecb are very much at the rock bottom of their easing cycle. difficult to see them acting as aggressively as the fed. anna: we will talk more about the fed and the ecb this morning. i want your thoughts, back to the trade story and the risk that gives to investors. you are skeptical as to whether things can be resolved at the g20, i think, and therefore you are pretty bearish on the aussie dollar? valentin: it is the case and aussie has been one of the preferred ways to express a bearish view on the trade war. it is the case that from the trump administration's point of view, using the protectionist

investors are pricing in more rate cuts out of the snb than the ecb. it will be interesting to see whether or not the ecb's actions will have an impact on this decision making. one thing i would add, clearly a bit of disappointment in fx markets today, they have not changed their language i was looking at euro/swiss, it is trading about 0.2% firmer also swiss may want to bear in mind they have been eventually removed from the currency manipulation list from the u.s and the u.s., when they add countries to this list, they look at three possible criteria. one is a current account surplus of 3%. a bilateral trade surplus with the u.s. of more than 20 billion. and the third is aggressive fx

. >> the ecb have moved to a more dovish tact.ey will cut rates either in july or september. as draghi hinted, asset purchases are back on the agenda the key thing i took away from sintra is the rhetoric was stepped up in the ecb trying to pressurize governments to spend more, or those governments that can spend more on the fiscal side you are likely to see the ecb to try to continue to pressure the governments that can spend more to spend more in future meetings the ecb can only do a bit more of the same. >> that appears to be a pipe dream, we've been talking about that in the context of europe for years and years, yet the biggest offender is germany. still this year you see marginal fiscal spending. what do you expect to happen the next time there is a recession in the eurozone. do you need to stare at the abyss to get governments on board or perhaps by buying more time, the ecb buying more time, eventually they can convince governments to really buy into this project of more fiscal spending in the interest of the eurozone proje

yesterday the big focus, of course, here in europe was that ecb meeting. some really interesting trading around that. in the leadup to the ecb meeting, stocks were trading well but after the course of the afternoon, we did see them sell off. ending in negative territory in particular european banks slumped by 1.42% and were down nearly 3% at the low yesterday so the ecb meeting not very straight forward they did push ahead. they extended their forward guidance it underwhelmed the market and we saw a jump in the euro. investors looking ahead to the nonfarm payrolls coming out in the u.s. market today. let's look at markets. the dax up about 0.5% despite news on the data front on the industrial production side as well as from the bundesbank. the ft rse up 0.68%. oil and gas had been a strong performer this morning at the top of the board right now up 1.3% right alongside the oil price which has been gaining momentum we've got telecom and real estate overall a green picture. i want to get into the news from the bundesbank after a boom phase the german economy

gets in chargen of the ecb and we get someone at the bundesbank that is super dovish and thinks ecb policykish. it strikes me as a little too tooeal or two political -- political. they say it is not affected by politics. christopher: everything is affected by politics, but the ecb president, as powerful as they are, has to bring the rest of the board along with him. is very difficult for anyone, no matter how strong their views are, to move the course dramatically. also, you only have a certain number of tools and may be on the margin he doesn't use all the tools that mario draghi would have at the same time in the same moment, but i'm not sure he is going to turn around and say ok, we are done with omt and we will move backwards. based on my views as president of the bundesbank, we will change monetary policy dramatically. i don't see that happening. actually think a lot of the european growth story is dependent on the fiscal stance from here? christopher: entirely dependent on the fiscal stance. a revival of global trade, the only tools left are on the fiscal side. once we get your perso

shery: ecb president mario draghi climbs on board to lower rates.up, jay powell and the federal reserve. we will look at the timetable for central bankers. this is bloomberg. ♪ the march towards lower rates is alive and well as the european central bank says it's ready to take steps to boost the euro zone economy, and the federal reserve is expected to send a dovish message when it's meeting wraps up on wednesday. kathleen hays is here with mario draghi's comments the other day. his rhetoric was more aggressive than what it was before. what has changed? mario draghi, who just indicated something very strong, that if needed, the european central bank could add more stimulus. it could be more negative. it could start buying bonds, not just adding the targeted ink financing type loans. what he said today, that additional stimulus will be if these downside risks continue to materialize, this is what really got the markets attention. he was alluding to trade tension. external tension, global tension that are hurting the global economy and the euro area.

what can the ecb do? are there any bullets left at all?he problem is that the narrowness of the question, what can the ecb do? policy normally consists of fiscal policy supply-side stuff as well as monetary policy. the eurozone does not have the fiscal dimension. taylor: charles, the ecb announced the introduction of program.ii it can make the case, arguably some economists in the u.s. have qe 1, 2, 3 that were less effective. charles: for the most part, to simply preserves better liquidity already created by the earlier programs. it doesn't actually create new liquidity. in any case, what we are dealing with is a situation where there is weakness of demand, debt for buying, i should say, for loans, rather than a lack of supply. there is plenty of liquidity around the place. the problem is that exports have gone down the tubes particularly in germany, but generally in europe and world trade generally. is beginning to falter as well -- capex is beginning to falter as well. taylor: what does a shockingly 30 basis points on the german ten-yea

i love with citigroup said about the ecb, to fight back the ecb needs to out-dove the market.es that do to the german curve? there is a lot of discussion of where the curve goes yet. shiftat curve aggressively on an ecb response? john: i mean, they have already had a big benefit from low yield. you have a flattening from the curve which helps lending. i am not as convinced they need to do as much. they are not in the eye of the storm in the way that china and the u.s. are, and they are almost in a bit of a wait and see mode. obviously, they have had a weak euro so unless they saw a sharp reversal in the euro, they are not worried about the level, although they might be worried about the momentum they might get a bit more positive momentum but it is hard to see the yields looking that attractive in europe. we are not as convinced they need to take the action the u.s. does because they are not starting from the same position. does the ecb need to worry about a strong euro, weaker dollar? john: you would want to go quite a long way. i didn't think more and's comments made a lot o

. >>> and trump also blasts ecb president mario draghi and his stimulus plans that sent the euro lower against the dollar. >> there are risks mainly because of brexit, also because of the trade conflict. even the persistence of these risks are a risk in itself >>> president trump has increased pressure on the federal reserve to cut interest rates. bloomberg reported the white house in february examined the possibility that the administration could demote jerome powell from his role as fed chair. the news agency reported that the white house legal review had made a case to replace powell as fed chair but said the move would be open to a legal challenge. trump also hit out at the ecb after mario draghi hinted at further stimulus for the eurozone draghi's comments prompted the euro to slide against the dollar trump tweeted a soft euro made it unfairly easier for them to compete against the usa. the president also said that europe had been getting away with this for years. >>> here is how trump addressed those twin topics, the ecb and jerome powell's position in comments outside the white

very dovishng sounds from the ecb.rope, being long on rates, less compelling than being long of credit. we are most likely going to see a relaunch of the cs pc. credit spreads may be more of the story in the eurozone. the u.k. is very difficult to make a call. we are still currently waiting for a new tory leader. we will see what will happen with brexit. the uncertainty is so high. outcome.st a binary i'm glad i'm not a policy maker for the bank of england. interesting is that the u.k. is the alere in terms of inflation expectations if you compare it against europe and the u.s.. just a final question on the boj. we are expecting to hear from kuroda in the next few minutes. will they ease and if so how? ratess: i think touching is not their game. i think it's going to be qe focused. buyinging to be more more equities, potentially buying more bonds. firmly that they are committed to the qe path. i think that is probably the most likely pressure point that they will tap on. nejra: thank you so much for joining us. great t

the ecb as well. the level of global growth is not a set up that allows the dollar to weaken aggressively. we need stronger global growth for the dollar to strengthen more sustainably than current levels. 2% on a u.s.sub ten-year. how low does that go? >> it defends on the environment and -- it depends on the environment and the g20. in the downside scenario we could rally quite a bit between steepening and receiving. receivinge outright rather than steepening. a lot is in the front. a very long and model variation. vonnie: is the u.s. bond market, bond market, receiving or sending data? >> that is a good question. i think it is leading for sure developments and other markets. what we have recently also also becomes sometimes a binding condition policymakers. particularly at times when miscommunication can lead to the tightening of financial conditions. although it is reflecting risks, which are already out there and potentially the data of the future, at the moment it is one of the more forward-looki

guy: we will get the ecb meeting later on this week. does the ecb need to do more? think while the u.s. is in ok shape, the europeans aren't. therefore, more policy action is needed. >> our general belief is the ecb has done what it can. the has constrained europe, austerity program they've had in termsof spending and in of reform in the banking sector. we would like them to do more on both of those, which would make a big difference in unlocking much more potential growth for those economies. there's only so much central banks can do. vonnie: pgim president and ceo, david hunt. thank you. david is speaking at the bloomberg invest summit as well. up, david rubenstein speaking with apollo global management ceo, leon black. why he says the next u.s. economic downturn won't likely come until after the presidential election. this is bloomberg. ♪ guy: from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is "bloomberg markets." david rubenstein spoke with apollo management ceo, leon black, this morning. he says he doesn't expect an economic slowdown

shrinking, ecb late to the party.nt point is japan just keeps on going with the stimulus mr. kuroda talking about. it is an original experience in japan. francine: i'll say. i have the exact same charts. tom, we are on the same wavelength. i changed it. -- i thinkto give us it is quite significant because u.k. manufacturing output fell the most in 17 years in april is a post from -- car produces in the u.k. went ahead with plant shutdowns. this had an effect on cable. it hasn't on euro pound. context.into turning back to trade, key leaders weighed in on global tensions of the g20 meeting. take a listen. >> we all hope that the trade tensions will vanish, especially because there is an agreement that could be reached between the united states and china. this would be very helpful. >> we are hopeful we can make progress of right now we don't have a path and this entire issue between the united states and china is something we hope will move afford. the --we use some of will depend on the situation, particularly economic

take the ecb, federal reserve for instance. take the ecb, it's not higher than zero over the next five years. to askstion you have yourself about the federal reserve's will the policy rate be higher than it is now in five years time with the fed? george: lower. -- colin: lower. jonathan: most people would say lower. what does that mean for the bond market in the here and now? colin: it means it could be more attractive than some might think. in defense of george, looking at duration, i don't have a problem with that whatsoever. especially with my view that not only will rates go lower, as we mentioned the fed moves and that there would be more moves than currently priced in the market. i think you would have movement within the five-year timeframe. one and 3/8 sounds like a decent central tendency for where it might be five years from now, and i know that is a long time to look. but i would also say we would have a point where we would go below 1% before it came back to somewhere like 1.25% or 1.5%. one other thing i would like

the ecb and brussels would agree. does our next guest agree?efo codogno is the economist and founder of lc macro advisors. nice to see you. what do you think of the idea? lorenzo: thank you. well, it is a pretty bad idea. clearly mr. draghi said it very clearly. it is forbidden by the treaty because in the euro zone, there is only the euro, or it is debt. so what is the point of issuing mini bonds? it doesn't make sense. the perception is that may be people in government think of it as a sort of spare tire, so preparing for something that could happen in the future. in other words, a kind of currency which is not really currency, but can easily become a currency if the situation deteriorates and italy needs another currency. is the perception of financial markets. you don't need it, so it must be something else. that is why the market is so focused on this issue right now. pushes rome too far, do you think the risk rises that this is the kind of direction that the government takes us? lorenzo: i think it is unlikely that the italian government

as ecb president this autumn.hough he is on the way out, he has not been holding back. >> in the absence of improvement such that the sustained return of inflation is threatened, additional stimulus will be required. we remain able to enhance our foreign guidance by adjusting its bias and conditionality to account for variations in the adjustment class -- half of inflation. -- path of inflation. i just said that we are ready to use all of the tools to fill the mandate and we do not target exchange rates. further cuts in policy and mitigating measures to maintain any side effects. we see that the path of conversion is moving more slowly than expected. >> will use all the flexibility within our mandate to fulfill our mandate. bloomberg's matt miller is in portugal where he is joined by guest. over to you. here with one of the founders of this european central bank. before we get to the successes you have achieved here, i want to ask about the things mario draghi said. first off, that he does not target the exchange

. >>> well coming up on this show, the ecb is in focus amid data weakness we'll preview the decision the first survivor of alzheimer's disease is out there. and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight. >>> welcome back to "street signs. i'm juliana tatelbaum. president trump arrives in normandy to join emmanuel macron and theresa may to commemorate the 75th anniversary of the d-day landings. >>> european equity markets move cautiously higher amid continued trade tensions president trump reiterating the threat to hit china with a further $300 billion in tariffs. >>> renault shares slide after fiat chrysler blamed the french political conditions for thwarting the deal which would have created the third largest automaker. >>> germany's ten year bund yield is hovering. >>> let's take a look at european markets and see how the stocks are faring this morning gains across the board perhaps most interesting the moves in the ftse up about 1% right now yesterday, it was the key underperformer as rising tensions

so we are keeping a close eye on that, the fed, the ecb, etc but here in the uk, ourown fed, the ecb,tical story is getting more and more dramatic by the day, by the moment and sterling is remaining at a new six month low versus the dollar. yes, closest to its lowest levels of the year, around the 125 mark. i think the whole outcome of the tory leadership election, who will be the next prime minister, are we going to have no—deal brexit on october the 31st? it is like the sword of damocles hanging over the pound and it is ha rd to hanging over the pound and it is hard to see the pound rallying. the dollar is a really strong currency at the moment. the ecb has obviously taken the wind out of the sails of the euro and i think the pound is likely going to stay in the position it has for the last three years. likely going to stay in the position it has for the last three yearslj wonder it has for the last three years.” wonder what trump will make of that, a weak euro, a weak pound. he won't like it but not even he can do anything for the $4 trillion a day effect market. thank you, we will

there is speculation that the ecb will do qe and will be forced to cut rates again.einbergolleague carl is the one who covers the ecb, and basically, he has them on hold indefinitely. the european economy still looks very weak and inflation is running below target. he is not anticipating any new easing, but there is no tightening anytime soon as well. vonnie: jim, it is always wonderful to have you in the studio. we are going to speak to proterra, one of the largest electric companies. we will talk to the ceo about the electric vehicle trajectory and what demand looks like, mainly focused on the united states. he is coming up next. this is bloomberg. ♪ ♪ hour22 minutes past the and the house judiciary committee announced anti-trust investigations into companies with commerce platforms. our etf analyst joins us now with the tech rough start to the week. >> we saw $2 billion coming out of tech etf's this past week through yesterday, so this has sparked some concern among investors. half of that outflow accounted for the qs. this to takesing out some of their funds. von

backstop.y have that it is called the ecb. have a look at this.is staggering. 850 euros worth in the market. six german pieces of paper above zero. last week, aberdeen standard said it was a laughing fit. do we go below zero in germany? if so, when? >> that has been the direction of travel. --have people calling ringing a metaphorical bell and calling for the end of the rally in the german bond market. fundamentally, what is going on here is that you have a market which is shrinking, a share of gdp in nominal terms, and you have a central bank which is desperately trying to inject more stimulus. there is just less and less left over for private investors. the repeated argument in europe that we need a safe haven asset at the euro zone level and we don't have that, we get this incredible supply squeeze. think that reason to underlying dynamic will continue. nejra: the statement we got out of the ecb was huge. we were talking about inflation expectations. we saw expectations in europe last week. we've still got a long way to go to truly inflect, but

this is the problem for the ecb. trade tensions could hurt it even more.ssident trump tweeted out soon as mario draghi said those words, that this is making it up fairly easier for the euro area to compete against the u.s., followed by marks from the former chief economist who says, he is surprised that president trump would between eating out on normal think that the ecb would say, and he kind of pointed out to donald trump, look, you are one of the reasons we are having issues in the economy. trade war and trade tensions. he did not say that to president trump, but let's listen to what he did say. uncertainty on the external side. you should not put the blame on ecb. it is also related to uncertainties related to trade. kathleen: very interesting. the german, the 10 year benchmark at a record low -0.29, and the french 10 year benchmark hit zero for the first time. just saying,rs are we don't know what will happen. we don't know if the ecb will have to cut its key rate or what jay powell will do. but for now we are buying bonds because the central banks a

eventually we should blow all that rain away from the south—east of england and ecb as you can see, it see, it works its way up into northern england, into the midlands, wales and the south west. a key wind without rain. mild overnight, temperatures not dropping much from daytime highs. the main focus of the weather continues tomorrow and the next day probably. not moving very far at all. the winds will be stronger though and that rents continue on and off gci’oss that rents continue on and off across northern england, across wales. it should move away from much of the south west of england. north midlands catching rain as well. as it brightens further southeast, we get sunshine. there may well be some heavy thunder he showers up underneath that rain with the wind and strengthening as well. everybody will feel cold. 12 degrees at this time of the year is quite unusual. further northern west, scotland could have some fewer showers. into wednesday the rain is still there. maybe not exactly in this position but you get the idea it is granted toa but you get the idea it is granted to a hal

sara is having a look at trump's reaction to the ecb. julia boorstin has a look into crypto let's start with the market and the tweet from president trump this morning that sparked the rally. the president tweeting had a very good telephone conversation with president xi of china we will be having an extended meeting next week in japan we will begin talks prior to that meeting bob? >> reporter: federal and central banks moved early on with draghi's comments. steve's right, it's an absolute lay-up you see oil up $2. chevron's up all the big oil stocks, some of the smaller oil services, all up 3, 4% on the day that's a nice move, we haven't seen that in a while the metal stocks are all up on the president's tweets these are trade-related names. one sector that hasn't been moving is generally those big financial service names like mastercard, visa, western union. and that's because of that facebook proposal on crypto currency guys, back to you. >> all right, bob, thank you chip stocks also seeing a big pop today. bertha coombs at the nasdaq