will there be a complete two—tier eurozone emerging? there is resista nce eurozone emerging?lan. i know that isn't a direction a number of eu states wa nt isn't a direction a number of eu states want to take. the eu is a bit like a tanker as we know. it does not turn around quickly. we are having a quick and negotiation in terms of the exit. i hope the exit ta kes terms of the exit. i hope the exit takes longer if we are going to do it well. they are separate conversations. i don't think they will have a significant impact. you are talking about conventions over a couple of years or whatever, that will not feed into a political process impacting on the negotiations. the commitment to the eu battle group, how do you feel about that? we are waiting for announcement from the uk on that. we said we would provide the headquarters for that in the immediate future. but what is important is certainly from a bilateral defence point of view, we have commitments, including from emmanuel macron in france that that should deepen. whether we progress with that to a european level remains t

he suggests he understands the idea of the eurozone budget, eurozone minister, and parliament will requireas well. reticence on the german side is the idea that france needs to get its own economy in shape before germany is willing to back it. president macron has said he will take a labour market reform or other economic reforms domestically first and foremost, before he goes to germany with these ideas and put them in force. so whether or not this will form part of the negotiations is the first thing to consider. and what timeline does macron and the eurozone imagine for these reforms? and the direction of travel if it goes down that route and i take your point, he has a big enoughjob trying to reform france in terms of labour reforms. will that be a good thing or a bad thing, do you think, for the uk as it's negotiating its exit? it's difficult to know because, of course, this is notjust a concern for the uk, it is a concern for all of it. it has been present for many of the smaller member states in the eu as well, the idea that the eu's final destination will be the eurozone. and what

avoids ahe imf now major restructuring of eurozone government planes on greece.s to be a major cloud on the horizon and needs to be addressed definitively. the constant delays are unacceptable, especially given that greece has outperformed on the primary surplus over the last year or so. vonnie: given what you are saying about greece and the debt burden is shouldering, is the 5.03% return on 10-year debt and accurate reflection of the risk you are taking? charles: one never quite knows whether the market prices on any given day aren't accurate reflection of the underlying risk. you have a really good question there. i think the fundamentals in greece are still very challenged. i think the decline of investment, the remaining high levels of unemployment, and many of the jobs that have been created over the last year or so are part-time jobs. that the reality is such that in order to really create the momentum for investment, this remaining debt burden needs to be addressed, needs to be addressed definitively. if that happens, you will actually see meaningful gains

all, i take issue with the fact the eurozone is fixed.e had a lot post macron that the eurozone is a miracle, walk on water, much like obama promised us he would walk on water. that is what macron is doing. clearly, the banking resolution last week was partly designed to convince the people of italy that sticking around is a good ring. i think we do have an italian election on the agenda and in that election, five-star and northern league made appear to be stronger than they currently are. that may impact where bond prices are, but also shake a little of this idea that the ourzone is going to be savior. we have been here before. the last time we talked about the eurozone fixing everything was 27 -- 2007. guy: bob points out we are underpricing the italian election, i wonder if we are the germanng election. if we end up with them in government with merkel, you have a very anti-european maybe taking the point too far, but you have a less pro-european stance potentially coming out of berlin. that allied with the italian election starts maybe

china, the eurozone andjapan tell us more? a slight bump upwards. the us and uk are expecting to cee loer rates mainly because of the weak first quarter. the imf says the weak first quarter. the imf says the uk will grow the weak first quarter. the imf says the uk willgrow1.7%, the weak first quarter. the imf says the uk will grow 1.7%, compared with the uk will grow 1.7%, compared with the previous 2% it was forecasting, but to be honest it doesn't clarify why. i've looked through the report and it doesn't say much more than that. the funds said meanwhile that the us would grow byjust1.2% in comparison to the 2.3% it previously forecast down to of course the fact that fiscal stimulus in the us isn't going the way everyone expected because the trump administration seems preoccupied, to be frank, at the moment. let's take a look at china. it got a slight bump up. growth rates in 2017 expected to come in at 6.7%. next year at 6.4%. both figures are slightly higher than what the imf previously forecast. as we have been talking ab

eurozone unemployment?”bodes well for its future, whereas initially falling unemployment was confined largely to germany but we are now seeing significant falling in spain and italy, so it is broadening and it is likely to be sustained, particularly giving that things are holding up well. what does this say about further rises of interest rates in the eurozone?” think interest rates increases are a long way off in the eurozone. the rate of inflation is still very low, just1.3%, rate of inflation is still very low, just 1.3%, the european central bank targets a rate of 2% over the medium term and if we take away the volatile energy and food components then the core rate of inflation is just 1.2% so it is a long way off before we will see the need for interest—rate hikes. eu countries have until today to submit their bids to host the european medicines agency and the european banking authority. both these bodies are currently based in london. but they're leaving because of brexit. there's been a fall in the nu

david: if the eurozone were to roll over. the eurozone is trending to around 2%.g some loss of momentum at the moment and we are seeing some recovery slightly above trend. that is enabled -- that has enabled spreads to come in. anna: the bumblebee reference on the chart and manus: five years ago when mario draghi discharge. manus: favors ago when mario draghi said when euro is like the bumblebee, the misty of nature is -- the mystery of nature is that it should fly but it does. with that in mind, you have something quarters of a hike. anna: you remembered whatever it takes but you forgot about the bumblebee. manus: this is the divine risk, isn't it? a strong euro which is written off -- which was written off and people were talking about the demise of it. david: aging population and we have italian elections come through in coming months. if the eurozone were to roll over, these problems would come back. not that we know the system is going to break up. it is not an optimal currency era. it is a bumblebee. it needs to grow. what we are seeing in the eurozone is im

political risk has diminished with the eurozone.your member what was said one itr ago after brexit, there a e was said that 2017 was supposed to be dangerous for the eurozone. we have seen the exactly the contrary. our recovery is solid because its domestic. there are political risks, but they are more at the global level, outside the eurozone. the brexit negotiation is a real challenge. there are uncertainties about the new american policies. what we have to do, and this is a very important stake of the g -20 summit happening now, to go along with international rules . these are the best solutions for global growth, and also, the best solution against any inequalities. villeroy.king with still with us, alan higgins. one phrase he kept returning to was to adapt the intensity of policy, this idea that you could pare back stimulus in a way that does not tighten financial conditions. so, have the you take that, -- how do you take that? they want to tighten financial conditions as they pare back stimulus. how does that translate in y ou

viraj: it has to be another layer of reflation pressures in the eurozone, potential recovery in the eurozonelly tax reform in the u.s. could be a game changer for the eurodollar. sides.een risks on both francine: are you looking for complete structural reform to decide what happens next to inflation? ores of the german elections or anything like that? all of those. core inflation should potentially edge up higher open becoming coming year as headline inflation comes down. we are still in this world that the eurozone needs a rebalancing and germany could obviously do more to help reflate the eurozone and we still need to see the longer-term integration. before we can get there, we need to see a lot more structural reforms elsewhere in the eurozone. what happens in france under macron, if progress can be made and naturally the next step for closer integration, all of these are important structural factors within the eurozone over the medium-term and a high potential growth rate. francine: thank you so much janet henry and viraj patel for joining us for the hour. we will be back to talk about b

the development of the eurozone. the french and german governments agreed a whole range of shared goals at the joint cabinet meeting. merkel also stressed the importance of reforms for france . and, macron made it clear that he's not criticizing germany for investing too little. >> i said in an interview that i would wish for increased private and public investment from germany. but, in the same interview, i also said that in our relationship, neither side lectures the other. reporter: germany and france agreed on a project of great symbolic and economic significance, after years of competing with one another in the arms industry, both countries now want to work together and build a fighter jet. up to now, france's aircraft arrival the euro fighter built by germany and three other european countries -- rivaled the euro fighter built by germany and three other european countries. brent: liu xiaobo died. the 61-year-old suffered from liver cancer. china ignored international pleas to allow liu to seek treatment abroad.

there's potentially some euro clearing into the eurozone.ns in place to mitigate that? nikhil: of course, we are monitoring the negotiations. we have the biggest pool of derivatives clearing liquidity in the world. we clear multiple different currencies in one place, generating huge deficiencies for our clients. we do not think it would be in anyone's interest to disrupt those efficiencies. tom: let me ask you about m&a. the deal did not come off in march. how does that change your strategy at all? how much have you set aside for potential buyouts? nikhil: the stock exchanges a strongly growing exchange market. we have continued to look for acquisitions. most recently we announced the acquisition of citigroup's fixed income and tax -- index business, which is now underway. with that, it takes are index business to pass that benchmark of $15 trillion. we ca continue to grow our business. tom: one of the biggest listings the saudi aramco. the london stock exchange is very much in the mix according to the people we have spoken to. how confident

9.3% in may for the eurozone area.ing picture. dr marianna koli is the head of faculty & senior lecturer in economics, new college of the humanities. let's start off with the headline figure, 9.3% unchanged, what does it tell us about the eurozone economy? the fact it is unchanged is not too worrying. a month is a short time in an economy. if look at longer term trends like a year or several years, there has dropped for a long time. 0ne there has dropped for a long time. one month is nothing to be too worried about. the general direction of travel is exactly the right one, the one most people want to see. of travel is exactly the right one, the one most people want to seem we look at the breakdown of the figures, who are the winners and losers? who is doing well and who isn't? unemployment figures vary a lot based on systems of different countries. naturally, you will have differences between unemployment rates. the uk has traditionally an low unemployment rates because of much more relaxed labour regulations than most

we are seeing earnings growth has come through in the eurozone and in the u.s.burn multiple down quickly and for our part, where you may see degrees of bubbles forming, not the equity market, more inclined to point towards the bond market which is boosted by policies over the years and potentially some markets which have been tied to the story. mark: you would not have seen my last chart when i was down in front of the platform, my earnings revision chart, j.p. morgan chase chart that shows analysts have started trimming expectations for corporate earnings. what is going on? >> the trim and expectations after a strong run of outflows, we take a step back and look at the bigger picture, particularly in the eurozone, the earnings over the past few years have been one of a slope, predicting double-digit at the first of. and the year down the slope to a 0% growth. this is the first year without that pattern emerging, the predictions of the first of the year staying the same or raising. mark: is that pattern broken, bc elope pattern -- the sea slop pattern? john: it

that should feedback and better revenue opportunities for eurozone bank.ave to take more risks? the you have to go to italy as opposed to france? terry: we want to remain diversified. different economies are at different stages. the problem has been nonperforming loans. they have been great targets for bringing in nonperforming loans. we are seeing improvement in the banking sector specifically in europe. it's an opportunity. david: when you talk about small and medium enterprise lending, what will drive that? is reform likely to drive that? terry: one thing is sentiment. we have record high pmi's. at the same time general consumer demand is picking up. we expect that to be translating back to the top line revenue growth. simpson, a lot of excitement about what ecb might be with qe. what are they going to raise interest rates? terry: there are a lot of over excitement about ecb essentially raising interest rates. we don't see that happening this year. maybe 2018. they want to get to 2% and inflation is hovering a little over 1%. all we talk about the cycli

we see the eurozone at 1.1%. the bottom line if the differences are pretty significant.he u.s., where we think it is a transitory decline, we will start to see inflation push back europe, yout in have half the target and you were in a situation where you have a labor market that is very divergent. you have low inflation and unemployment in certain areas, and high unemployment and others. we expect that high unemployment to cause inflation to be low in europe and cause the ecb to be accommodative. >> i am struck when you are talking about how the ecb continues to be supportive of the weakest link. how long is that going to be politically plausible? not that long ago, we were talking about italiexit, frexit, and that all disappeared with macron, but will we continue to hear about this? >> i think you will see a rapid, over the course of the next two to three years, convergence around growth, unemployment, and inflation across the eurozone. you will have significant political problems. in the end, germany does not want to allow for their economy to inflate, and as a result,

rob: it is largely about the o,ropa, the eurozone -- eur the eurozone and how they are doing well afterrexit. all the stories are pretty much holding hand. it is not -- when you hear about brexit, there is a lot of negativity. but there is an upside. oliver: unison coming out of it at the end of the day. up next, brussels bureaucrats get a second wind. and how companies are using electronic dancing to reach young consumers in pakistan. this is bloomberg businessweek. ♪ ♪ oliver: welcome back to "bloomberg businessweek." you can catch is that business week.com. -- is leading to a bit of a rebirth in brussels. >> they are really two big reasons why brussels is suddenly back. one is brexit that fundamentally rather encouraging people to leave actually persuaded a lot of people to stay. the european union may have its faults, but god knows it is better than what is happening to the british. the second thing which is very important with the arrival of our annual macron -- emmanuel macron. m france reforms, maybe rs. merkel will be more climate. to some extent brussels seemed dead 18 months a

it makes me wonder how much it will allow inflation to pick up in the eurozone, which is supportive ofhe economy, and looking for a legitimate reason for the euro to get up, and also how much is the euro strength? simply, it is a dollar story. we have seen the dollar sank as prospects for the fiscal stimulus plan here has faded. >> i think it has been interesting to watch the euro strengthen dramatically in here as draghi has tried to take back some of his comments. but the market is certainly going the other direction. that will put some pressure on the euro economies. for lisa's point, that is actually positive for our economy and stock market. this is dynamic of what they are doing with their fixed income there sovereign market, and getting rid of this for a long amount of time and changing that scene, the focus on whether we will have negative rates in europe. it is a massive signal really for what is going to happen with monetary policy in different regimes. jonathan: mike, is this something to be nervous about? this is been elusive timing in history. -- the loosest tightening in

how inflation will behave in the coming months in the eurozone? >> we are actually of the view that inflation will drift quite a lot lower from the peak that we've seen at the beginning of the year clear lir because base effects that have inflation in the eurozone close to the ecb targets are temporary effects. so we think eurozone inflation will likely go towards the 1% area and what does that mean for the ecb? it means the ecb while draghi made great efforts to be positive about the outlook will have to tread very cautiously in the next two quarters. >> and markets are expecting that? >> yes and no. if you look at the selloff that we have seen in german government bonds in particular, the change of tone by the ecb has caught some invest are tore s by surprise, but we would be happy to take the other side of that argument.ors by surprise, but we would be happy to take the other side of that argument so while they may signal some reduction next year, which is just filed, the economy is better in europe, but if they don't have wage inflation, they

they're looking to deepen you integration and reform the eurozone. one topic addressed was the fate of so called posted workers. romeo that we want to accept the status quo we want to create an even stronger franco german solution to the problem that caused it like a space. that is to make sure that in any one of our countries the work will be paid the same wage for the same job on the minimum yasser. strength in the euro zone the french leader has proposed the creation of a finance minister a parliament and a budget for the single currency area. which would require changes to eu treaties. an idea angular merkel is open to. don't use a few nodding a european finance ministers something we can talk about. we have been talking about an economic government for a long time and how to do it. i think we should strengthen our cooperation in europe in order to finish projects swiftly executing for. german chancellor has stressed that major reforms would have to wait until after september elections in germany. which her center right christian democratic union

governments and more money for joint project in the eurozone.use is bullish in regard to reform by september without any protest on the street. holger: i didn't say that. manus: the euro currency is also in fine form. , ithat juncture, if at all could be a risk to mario draghi, how much of a risk is a strong euro to draghi? holger: it is not a serious risk. the higher it goes, the more we have to think about it. however, indicators of domestic demand are fairly strong. an externalhaving surplus. what were seen at the moment is that the rebound of the emerging markets, to some extent includes china, it more than offsets a little damage done by the exchange rate of the eurozone export outlook. anna: thank you for your time this morning. daimler is recalling more than 3 million mercedes-benz in your. anna: it could help the company avoid the massive penalties set for volkswagen. whos bring in chad thomas joins us now. what led to this recall that broke after trading hours last night? chad: this has been bubbling below the surface or daimler since e

some eurozone enthusiasm.f the weakest pace in six months and opec and partners meet to discuss the progress of cutting supply. saudi arabia says it would make deep cuts to august export. from new york city, good morning, good morning to our audience worldwide. this is "bloomberg daybreak." i am alongside alix steel in new york and david westin in washington, d.c. today let's get you up to speed on market action. futures down about .1% after three straight week of gains on a benchmark in the united states. the euro kicking off the week weaker following that data over in the eurozone. seven -- 1.1647. treasury is unchanged. alix:

it has revised up its growth projections for the eurozone, china and japan. >> global growth recoverys on track. the international monetary fund says its growth forecast for the world economy remains unchanged for 2017. 3.5 percent. the outlook for several eurozone economies is brighter than expected with spain and italy seeing the biggest revisions. the spanish economy is now forecast to grow by 3.1% this year, up from 2.6%. projections have risen overall. the eurozone is expected to grow by 1.9% in 2017 from 1.7% in what the imf said was evidence of stronger momentum in domestic demand. china's growth projections have also been revised up. beijing's economy has become too dependent on domestic credit. higher growth is also expected in japan. u.s. areand the forecast to grow more slowly than previously predicted. the american economy is expected to grow by 2.1% down from an earlier prediction of 2.3%. reflecting uncertainty about fiscal policy changes under president donald trump. britain's forecast was revised down from 2% to 1.7%. than expected activity in the first three months of

we're off the highs but still holding on to gains despite the move in the eurozone currency.factor in the exporters, specifically in the auto sector. >> yeah. i was more concerned and surprised about the move in the euro itself. i think all of us covering mario draghi's statement and press conference yesterday, both trer p interpreted it as dovish he said he is willing to extend qe as long as it takes, maybe longer than it has been announced a discussion on when to start tapering was put off from september to october. he clearly seemed to me and to you folks as well to try to send a signal to the markets, dovish, don't worry, i won't unwind qe, but then the markets reacted the other direction. the euro went to two-year highs. when we talk to people in the markets, they say he wasn't dovish enough for them they go back to last month's speem speech in sintra where mario draghi claimed the end of deflation. i think the voices from draghi's mouth and market reaction were different. the markets are anticipating the end of qe and what that means for the euro tl dollar weakness hit

at the same time it makes me , wonder how much it will allow inflation to pick up in the eurozone, whichsupportive of the economy, and actually feeds into some legitimate reasons for the euro to get bid up and meanwhile, how much is the euro strength really a dollar story. we have seen the dollar just sink as prospects for a stimulus plan here have faded. --to you sure those views jonathan: do you share those views, mark? mark i think it has been : interesting to watch the euro strengthen dramatically in here as draghi has tried to take back some of his comments. but i think the market is certainly going the other direction. that is going to put pressure on euro economy. two lisa's it is actually pretty point, positive for our economy and our stock market. this dynamic of what they are doing with their fixed income market, there sovereign market, -- the sovereign market, and getting rid of this for a long amount of time and changing that -- that scene, that focus on whether we will have negative rates in europe. i think it is a massive signal, really, for what is going to happen with mon

eurozone. manus: we will carry those thoughts through very shortly.ing news coming from the swiss national bank. a profit of 1.2 billion swiss francs. francs, firsts half exchange rate profit of 1/10 of one billion swiss franc's. first half that results of .9 billion swiss francs. you are seeing a weakening in the swiss francs against the euro. there has been a chip in the movement. it is a profit for the smb in the first half. this is bloomberg. ♪ we check our phones 85 times a day. so it only made sense to create a network that keeps up. introducing xfinity mobile. it combines america's largest, most reliable 4g lte with the most wifi hotspots nationwide. saving you money wherever you check your phone. yeah, even there. see how much you can save when you choose by the gig or unlimited. call, or go to xfinitymobile.com. xfinity mobile. it's a new kind of network designed to save you money. just 2:30 in the afternoon, breaking news on the bloomberg terminal. this is the global drug company raising their outlook. they see business earnings, broadly sta

but it cuts prospects for the uk and the us, while china, japan and the eurozone gets a boost.me to world business report. i'm ben bland. also in the programme, we'll learn the success secrets of another ceo. but first, later on monday the uk's trade secretary liam fox will be in washington to discuss a preliminary trade deal ahead of britain's departure from the european union. a final trade agreement cannot be signed until the uk formally leaves the eu, but the two nations are keen to lay the foundations for what the us president expects to be "a very, very big deal". in an interview with the bbc, mr fox said that uk—us trade is currently worth nearly 220 billion dollars. but this could increase by as much as 52 billion dollars if trade barriers between the countries are removed. for now though, that process can't really begin because the uk is not allowed to hold formal trade talks with non—eu countries until it has left the european customs union. to complicate matters, the uk's trade secretary has welcomed the idea of a transition agreement with the eu which could potentia

come less crucial with china, japan, eurozone, and canada.ed assumptions from a boost of plans to cut taxes and raise in the structure spending. preparing for a transatlantic trade deal as soon as possible, even after leaving the european union. difficult a discussion. before making members of congress during a two day trip. done7 pounds, we have internal work but it could be worked over a 40 billion. a 20 30th we are able to remove the barriers, that will be a difficult discussion. to extent or another, we have group support from the united rates and as well as congress. two help push the agenda forward. the trump administration press secretary supports the current vision of its bill to sanction russia for the actions during the 2016 election. the comments from sarah huckabee sanders came after a democratic leader in the house each to a tentative deal to move ahead on a measure that, among other things, would prevent the president from acting unilaterally to remove sanctions on russia. chuck schumer has sent donald trump -- has called on cap

eurozone stocks down 1.7%. really broad-based losses and parts could be due to the stronger euro because we saw following the ecb mario draghi's press conference, it hit an all-time high. we are up 0.2% above the 1600 handle. we are seeing broad-based dollar weakness in the session playing through into other currencies in europe. the fixed income space, yield come down in at the core and periphery keeping a close eye on the peripheral spreads which i will get on in a moment. look at the euro. a guest of the dollar, about 0.2% higher. sterling, ever so slightly higher, almost as he will .1% -- almost a super .1% after four day of losses. you are seeing euro weakness against the yen. we are down against the yen. broad-based strength of the yen. some divergence begs the question if the euro is due to the dollar weakness. if we look at what is happening with the germany spread, we saw it hit its lowest since 2015 after mario draghi's press conference yesterday. one guest said the bond market wected like the adult a

wasbig data highlight eurozone manufacturing pmi services.rowth in the euro region economy started the third quarter at the weakest pace in six months. --s is the income passing this is the income passing -- the gdp is expanding. not bad at 6% in the quarter compared to .7% in the prior three months. 90 minutes into the session in the u.s. how is it looking over there? >> the nasdaq is turning into the red and even though the s&p is down the fifth of 1%, we are seeing stocks declining versus gaining at a ratio of 3-2. seeing downside today. some of its the follow-up to earnings the analysts are commenting like stocks and johnson & johnson and general electric lower. that seems to be what is causing pressure for stocks. we do have big movers that are on m&a that i want to point out. one of them is web m.d.. scherzer higher -- the shares are higher. cash.per share in its shares oft percent back in 2012. but that effort did not succeed. a lot of relief being felt in his shares today come in addition to the premiums. on the flip side, we are taki

buying a more positive story coming off of the eurozone.so buying the strengthening of the euro exchange rate. that is where they are positioned right now. in either move direction, i think this is something that markets are not really prepared for right now, and it is a move that central banks would not like to see. i think that the big central --ks, they would prefer it the euro-dollar exchange rate continue trading in this bandwidth we have now, around 0.1%. politics, according to mario draghi, has become a tailwind from a hit headwind. carsten: i think it is right now. when you look at populism or the risk of populism has disappeared for the time being in the eurozone. i think it is a tailwind. we see the euro for you -- the euphoria in the eurozone. what is the next big risk? the next big risk could be the italian election, but they will only be coming in spring 2018, and there we see support for the anti-european party has weekend in light of trump in the wake of the brexit negotiations. matt: if we start to see bunds climb toward 1%

was supposed to be a dangerous year for the eurozone, which much turmoil.te. our trade is solid because it is domestic trade. our policies are at risk, but more at a global level outside the eurozone. brexit negotiation is a real challenge. there are uncertainties about the new american policies. what we have to do, an important state of the g20 summit happening as we speak, is to go on with policy with international rules on financial regulation. these are the best solutions for global growth, and also the best solution against inequalities. ♪ anchor: coming up, we will get a exclusivee fed in an conversation with the dallas federal reserve president. plus, u.s. energy policy makes a green energy advocates see red. investors from around the globe link perspective of the markets. a heavy header says he sees no sign that credit is contracting. guest: when you take a look at the levels of activity, it really does not show it subsiding anytime soon. anchor: this is bloomberg. ♪ these days families want to be connected 24/7. that's why at comcast we're continui

political risk has diminished within the eurozone.er what was said one year ago after brexit, 2017 would be a dangerous year for the eurozone. much turmoil expected, which recovery, etc.. we have seen exactly the contrary. our recovery is solid. it is domestic driven. there are political risks. they are more the global level outside of the eurozone. the brexit negotiation is a real challenge. the uncertainties about the new american policies. what we have to do, this is a very important stake of the g20 summit in hamburg just happening now as we speak, to go on with multilateral policy with international groups. these are the best solutions for global growth, and the best solution against inequalities. nejra: coming up, we will get a read on the fed and an exclusive conversation with robert kaplan. u.s. energy policy makes green energy advocate tom steyer see red. he sat down with bloomberg. investors around the globe give perspective on the market, a heavy hitter sees no signs credit is contracting. >> take a look at the levels of ac

some eurozone enthusiasm. data shows that economy started the third quarter of the weakest pace in six months and opec and partners meet to discuss the progress of cutting supply. saudi arabia says it would make deep cuts to august export. from new york city, good morning, good morning to our audience worldwide. this is "bloomberg daybreak." i am alongside alix steel in new york and david westin in washington, d.c. today let's get you up to speed on market action. futures down about .1% after three straight week of gains on a benchmark in the united states. the euro kicking off the week weaker following that data over in the eurozone. seven -- 1.1647. treasury is unchanged. the long is really piling in weighing on the dax and automakers like volkswagen, daimler, and via -- bmw. against theeaker yen. dollar-yen down 3/10 of 1% and the vix up by 5%, but really we are looking at potential record closes below 10. that would be a very long winning -- losing -- below 10 streak for the vix. brent monitoring as well h

not happy with that what they want to avoid by all means is a taper tantrum scenario here in the eurozone. perhaps you can see that speech in sintra as a test case how sensitive the markets are. that was quite visible the day with yields spiking in the bond market, the euro jumping that's what they want to avoid today i think the focus will be on the balanced approach while staying on message that the economic recovery is surprisingly strong in the eurozone, and that inflation eventually will get there. another area of focus is the focus that we need to be persistent and at the same time prudent in order to avoid those volatility in the various markets. that will be the main area mario draghi will try to tackle in a press conference it comes with a tweak in language of course i think the most is that they're dropping the reference that due to potential enlargement of the qe program, it's another sign that we are getting closer to a real withdrawal of the monetary stimulus so it's baby stretchepsteps tow exit of the ecb, and then maybe more news on how the qe program might look like next y

has beenge growth elusive and a problem in the u.s., that we see in the eurozone.em -- unemployment rates and yet wages haven't risen like they have in the past. of the silent reserve come all of the people who don't show up in the employment state but come back into the market as the economy improves and that has been a factor at keeping wages low or rage growth low. if that were to change, that would change the outlook for inflation. might put pressure on the fed to move. judging by what janet yellen said, the fed is more concerned about the lack of more aggressive inflation dynamics. obviously, that is a concern for central bankers around the world. let's get back to mario draghi, you mentioned the ecb. risk of mario draghi getting maybe more hawkish than the markets expect, or is he stuck on the of mode? is he accommodative for the rest of his life? sonja: certainly compared to janet yellen, mario draghi is sometimes good for a surprise. the comments he made a few weeks ago caught the markets by surprise. the ecb did attempt afterwards to rein in the market to

what you're going to see on the back of that, the inflow back into the eurozone on market where domesticare talking about a higher domestic yield and abandoning treasuries and this is where the volatility will come. the imbalance between supply and demand of treasury kicks in and pushes the premium toward morneau mole levels. treasury yields could be 60 or 50 basis points and that is a reason to expect more volatility. anna: thank you for your thoughts. a lot coming out of russia this morning. manus: the central bank governor talking about the economy. shifting in terms of the economic development and that central banks are worried about growth remains unstable. , high debt and low inflation are a drag on the world's economy. central banks are worried about growth remains unstable and low but in regards to the russian economy, the russian economy is at the start of a new cycle. that is predicated on the price of oil. anna: just when we were talking about the willingness of the -- aal banks to talk about warning about asset bubbles. one central bank picking up on that theme. it is 7:18 a.

francine: i have a chartier here, looking at inflation in the eurozone. you can to the difference between core inflation, the white line, and the blue line, inflation overall. the main difference between the boj is first of all, the balance sheet, the percent of the gdp. has a much more structural problem when it comes to inflation. >> absolutely. that white line looks remarkably flat all the way to 2014. the ecb has been arguing that their program has worked and it has in easing the monetary beicy conditions and said to making it cheaper for countries to borrow. this is important for countries with a high level of dept. for example, when you look at the cleaner version of the core inflation, well actually, it is not moving much. trajectorywnward reflects the depreciation in 2014. there is not much in there. if the ecb hopes to get wage growth, we are still quite a long way aways before we do get there. certainly, they are far from meeting those expectations. francine: alaska as i can if the firsteds to taper, but of all, do we have a deflationary problem

a great place to start playing the eurozone growth curve. >> quiet confidence.ys no election this year, no one there thinks there will be an election this year. that is the big worry here. hesitate. >> from politics in europe to earnings in the u.s.. the numbers to watch for coming up from new york. this is bloomberg. ♪ >> this is bloomberg markets. >> earnings getting underway today when netflix kicks things off. mrs. subscriber growth. joining me is bloomberg intelligence media analysts in princeton. thati find interesting is compared to the first quarter we are going to see a drop off not just in pockets but sales. it all gets moved to the second quarter. >> absolutely. to the glee the second quarter is a seasonably week quarter. we saw them rearrange their content calendar a little bit. they profiled the -- they shifted their hit shows. as you pointed out, content cost is up as well. that is a concern in the international segment where they are trying to shift the narrative a little bit. they posted a profit for the first time in the country. because of the

but it cuts prospects for the uk and the us, while china and the eurozone gets a boost.me to bbc news. donald trump senior adviser and son—in—law jared kushner will today face the student from senate intelligence committee is investigations into russian interference moves a step closer. from washington laura bicker reports. jared kushner... jared kushner. .. jared jared kushner... jared kushner is not being centrestage, is one of double trumps close as advisers he has been silent on his side seem rarely heard he has done some talking with russians. first with the russian ambassador. and even with this man, he is the head of a russian bank tied to the investigation. when asked about that meeting, sergey gorkov sergey gorkov said ask the white house. his father—in—law did not seem to please. jarrod has now become much more famous than me. laughter i am a little bit upset about that. mr kushner was also part of a meeting with the russian lawyer arranged by donald trump junior. he's with the russian lawyer arranged by donald trumpjunior. he's bound to be asked about it in co

obviously in the eurozone as well, inflation remains dampened due to temporary factors >> you mean oil prices >> the oil prices have a huge impact if you look at impact of energy on core inflation, that's helping to haul it down. for the time being, central bankers have suggested they're happy it look through that look through the fundamentals and the rest of the data for the time being we're comfortable with where it is >> who takes the leadership when it comes to the bond selloff and spike in yields. last mu triggered by hawkish comments, this week it seems treasuries have sold off the ten-year back above 2.3% the two-year at the highest level in eight years, precisely on the back of better data, and we expect a fairly strong print when it comes to the jobs number on friday. do you think the u.s. could take the leadership >> i think the market can focus on one thing at a time last week it was about the ecb now that the tension has shifted again, and it's on the u.s. again, it's quiet markets at the moment given the holidays in the u.s. and canada. >> are you saying we shouldn't read

by a buoyant eurozone economy. data place? , a way of eu on steroids to play the eu game with more leverage anbang for your box. -- your buck. emerging markets tend to underperform when things are going south, so it is all in timing as you know. scarlet: the central banks for these countries are pursuing different paths. the czech republic central bank ,et to raise interest rates bank of america sees the first rate hike in august, where as hungry will probably -- the will add moreulu stimulus. when does it come back to focusing on what the central banks are doing? >> growth of 2.5 percent, 3%, very strong, so it is surprising that hungary is still adding stimulus. hungary still stimulus, pollen on hold, but a dovish hold -- poland on hold, but dovish. , we are coming out of abnormally low interest rates, a crisis with us or 10 years. i think country should be out of these zero rate emergency settings. we are seeing more countries come around in emerging markets and developed markets. we may get some hands of have t

. >> the store is more largely about the eurozone and how they were doing well after brexit.ou can see the flag but all of the stories are about holding kumbaya. some by a -- there is a degree of unison coming out of it at the end of the day. up next, the bureaucrats get a second win. how companies are using raids and electronic dancing to reach consumers and pakistan. this is bloomberg businessweek. ♪ ♪ oliver: welcome back to bloomberg businessweek, i am oliver renick. section, john micklethwait talks about how brexit and the menu macron -- emmanuel macron are leading to a new -- >> god knows, it is the best with the british. that was part one. the second thing that is very important is the arrival of emmanuel macron. that began that process. what if france reforms, what if this is -- >> he said that he wanted to do these reforms. >> that is the problem, brussels and now it-- dead seems strangely alive. the elements of life are partly brexit. power also shows how much is left in it. the british are running into this, having pontificated. they have arrived to negotiate in br

are now less crucial with china, eurozone, and canada play more rules. the u.k.rade secretary will meet with his u.s. counterpart in washington today area person seeks to -- today. they translating deal is possible after leaving the european union. it will be a difficult discussion and is expected to hold talks with robert rosshizer and wilbur before meeting members of congress during a two-day trip. >> about 167 billion pounds. we've done internal work that could be worked over another 40 billion by 2030. if we are able to remove the barriers to trade that we have. that will be a difficult escutcheon. -- discussion. report from the united states and the demonstration as well as congress to push the agenda forward. anna: the trump administration -- juliette: he press secretary says it supports a bill to sanction russia for its actions during the 2016 election. become from sarah huckabee -- the comment from sarah huckabee sanders reached a tentative deal on the bill that would prevent the president from removing sanctions on russia. in poland, mass protests across