but possibly the european union, too. >> reporter: greece was actually considering leaving the eurozone? >> quite openly some of the ministers were advocating a return to the drachma, which means perhaps after greece there would be other countrieshat would follow and the euro would collapse. >> reporter: a domino effect. >> precisely. this would have bn very likely to have effects for the entire financial system of the world. >> reporter: it was a stalemate, with the average greek citizen in the middle, worried their life savings might be wiped out. at the height of the crisis, greeks were panicked they'd be kicked out of the eurozone, and started withdrawing their sangat an alarming rate. in ordeper to keanks from imploding, the government put limits on the amount of money people could withdraw: only 60 euros per da that's roughly $70. government gave in, agreeing to continue reforms and austerity measures in exchange for a final bailout. buit's been hard on the greek people who regularly take to the streets to protest. ons and other welfare payments have been cut up to 70%. the size o

in the eurozone perspective.will be consolidation, more a story quor beyond that the euro gains traction. time. e it higher at the it's an issue of looking at the parameters. trange for the third sector. we have a chronic negative yield structure in europe. it's approximated by deutsche macquarie bank rolling over. broken through to the can in euros, how long europe sustain negative yields recollects and support its financial system. me, that's a major second-half question. true, , it is, actually, that the financial sector in europe continues to have risks.ral as you say, some of the big bellwethers, in terms of stock scenarios struggle. reasons the ushe recovers faster and recovers the eurozone is lacklustre in that record. running risk parameters. over time, we'll so a structural improvement in the euro don. we'll see the fundamental story back into the dynamics in cab. of the yield and the negative yields diminishing over time. the e.c.b. is on the runway. qe by the end ded of the queer, and it's a matter of

like the small caps space within the eurozone. why do the two geographies differ?here is a big difference on the balance sheet. if you look of the balance sheet in the u.s., we see a strong balance sheet. this is a big difference with europe. -- we expect a stronger currency, stronger euro. that is supportive of the large cap in the u.s. to have a weaker u.s. dollar. overall, we continue to focus on european small caps and to avoid u.s. small caps. let's check in on first word news. >> trump has launched a broadside against iran and its president. he told rouhani to never threatened the u.s. or "you will likes ofnsequences the which few throughout history have suffered before." trump is taking aim at two targets in the u.s.. amazon and the washington post. both are controlled by jeff bezos. post isident says the an expensive lobbyist for amazon. shares of amazon are falling in trading today. homesof previously owned fell for a third month in a row. rising prices and a shortage of affordable listings are hurting demand. a new ceo of fiat chrysler has days to prepare

we will expand the conversation to the eurozone.ur position as an economist, starting to think about the possibility of europe without markle, what it does for the reform agenda, the coming together of the eurozone if there were to be no merkel, or is it too soon to have those talks? danae: what a week it has been for angela merkel. the german chancellor had very long meetings with other european leaders to reach an agreement on migration. fromad to face criticism some of the eastern european countries, and now criticism at home from coalition partners. she is no stranger to crisis. she has faced many crises over her career, notably over the financial crisis in the euro area. there are high chances this could be it for merkel. we will see today how the meeting goes with her coalition partners. there are various scenarios. we could see her governing in a minority government, we could see her government falling apart. we shall see that today. manus: it is great to see you this morning, thanks for joining us. it is amazing how we have

optimismur economic for the eurozone.indicators there is a clear sign the looming trade uncertainties have an impact. looking at the current earnings seasons, what makes you optimistic? second question would be on whether they are given the inflation rate being back up to target whether there is an increasing discussion in the governing council among members of course that is perhaps time monetaryse the stimulus in place. >> let me -- the best way to answer both questions is to give you a short account of our discussion today. first of all the governing council took note there hasn't in much of a change since last time. has not been a change in the assessment of outlook of the median term outlook and growth of inflation. it is now clear that it was before that the moderation and onwth depends essentially the pull back from unusually wereg growth rates, which ansed by predominately unusually strong asked for performance. pullback. the performance is much less. sluggishness in the first quarter is continuing in the second q

thinkd-looking, we look -- think eurozone growth is on a good footing.nannette hechler-fayd'herbe, head of strategy and research at credit suisse. we will talk more on trade with you, but joining us is bloomberg's annmarie hordern. we've got you back. great to see you. to theto go back comments from president trump to the u.k. media, most notably "the sun." what exactly did the president say? annmarie: let's start with the headline. "may has wrecked brexit. u.s. deal is off." trump was tweeting months ago saying it would be great and bring on jobs, now he is saying isce the soft brexit deal linking them closer to the eu, he would not want to do a trade deal. this could mean no coordinated chicken or agriculture coding -- coming in. in the article, he gives another double blow, saying boris johnson would make a great leader. he mentioned this before ,oarding air force one to nato saying he loves boris johnson, but what a blow to the prime minister as boris johnson left her government this week. it is looking likely to be a awkward meeting when they meet a

one factor driving this will be higher wage inflation in the eurozone.m our perspective, we think higher inflation is coming. part of the reason we think the yield curve will steepen, but strong stance of domestic demand in europe currently, we think things will look fairly rosy. at the 10 year, it is at 38 basis points. the spread, 76 the top, 26 the base. what gives you believe, gives are going tolds move higher and with sustainability? steven: this is the key question, and i will make it clear. our view of bnp paribas is not consensus. we will see bund yields rise higher in the second half of the year. our forecast is 1.1% in 10 year froms, which is a big move where we are. the two things that will drive this our domestic demand. we see domestic demand in the eurozone doing well, and secondly, we think things are really starting to pick up in the inflation front. we spoke about that with matt. growth in the eurozone is currently somewhat above trend and when you have a sustained level of growth above trend for some time, you certainly start to see wag

said there's quite a be in the eurozone.athleen: the three biggest central banks in the world we and the ecb's starting it out next week. they still see rate hikes off in the distance, and a little more andat on euro area growth more upbeat on inflation. his what he said earlier today. >> pressures are strengthening and broadening amid high levels of capacity utilization and tightening labor markets. quick specifically in spite of the mixed nature of the data recently, mario draghi sees that stroke -- showing the economy stabilizing, back in june he saw signs of weakness. the bottom line is now they are expected to end their bond purchases in the audit and by the in of summer or fall next year, start hiking rates. you can see this in our bloomberg library, showing you morgan stanley's estimated months to hiking the key rate in the eurozone. 15 months would take you to september of next year. as for trade, the ecb acknowledges there's a threat mariorotectionism, but draghi said he sees a rep hope in the meeting with president

the strong growth in eurozone, resilient growth in the eurozone, meaning so far what we have seen doesn'the recovery. francine: that was the ecb executive board member. zentner ands, ellen market shaft north -- marcus ashworth. and is getting the hue from the dollar. no one cares about the dollar, it's quite an amazing result this morning. you see that's what's driving things. the weakness of the dollar this month, that sounds the trade in some sense's hope for from trump, he wants a weaker dollar. he has the capacity to turn it on and off and we should see how he feeds through for the central bank concerned. everyone is warned about it but no one knows what it means. francine: david davis resigns and they put another brexit are as the bracket -- as the brexit secretary. he could have a lot of thought that means theresa may is powerful. he said yes to being in her cabinet. ifcus: the context is that the key brexiteers remain just that's likely david davis's department was being consumed sidelined. he said the chief civil servant on this was essentially driving the process and it wasn't da

. >>> eurozone growth coming in at 2.1%, that's just shy of consensus forecasts that we surveyed eurozonedp not a big miss but not coming in as strong as our number of 4.1. europe in their central bank quantitative easing cycle, a couple years behind us it looks like a couple years behind us in the recovery as well let's get the reaction now euro/dollar at 117.17. a mild reaction. these stocks were like that before the number came out let's turn our attention to asia the big news coming out of the bank of japan. policymakers keeping rates there unchanged. but signaling it would make its policy more flexible as you can see the asian markets are mixed. japan flat shanghai and korea up. hang seng is down. outside of stocks, here's global look at commodities. we're seeing the oil markets down a bit, 0.7% bitcoin is the big decliner. that's down over 1%. bitcoin has been moving either up 1%, down 1% nearly every day. been very, very volatile down 98 to 8,062 on the coin base exchange. gold not moving much as well >>> one of the biggest minds on wall street sounding off on what he thinks are th

get started on a new trading quarter, all eyes on the pace of growth in europe and pmis for the eurozone hitting the tape weaker. 54.9 is the final pmi. the flash handle was a tad higher at 55 it is an under wheming number saki saki sa taking us to a low below the flash estimate of 54.3 when it comes to new orders, component in the june numbers, they have come through just a fraction up. 53.2 down from 53.3. the numbers disappointing and you can see euro dollar reaction this morning down 116.37. >> a quick way we're shaping up. look at this stock trading 19.7%. not much green on the charts a bunch of issues as we start out the quarter. many stressing with the political situation in germany after a threat to buy the csu -- to resign. some concerned about the survival of the government in germany. also, you've got, of course, threats between europe and the united states on tariffs literally front and center investors weighing out multiple threats taking the trade low up. >> the dax closed out down .7 of a percent. you can see we're improving a fraction on these numbers. the italian market

eurozone economy slows further as exports sputter. you see them coming back to the negotiating table with mnuchin. i think maybe the president's hard ball has led to some really positive results. what do you think? >> well i think the kochs and the president agree on the final objective. we want zero tariffs, zero subsidies. david: that would be great. >> zero non-tariff barriers. i think the kochs want that. i think president trump wants that. the question is the strategy. how do you go about actually achieving that? that is tough decision to make. trump has one procedure going about to bring them to the table, to negotiate. it looks like it works pretty well with the eu and juncker when he was here. david: sure does. >> bringing back china maybe. may be working with mexico. but you know the bottom line the kochs have been phenomenal for generations in this country supporting good, free market, pro-growth,. david: doing a lot of charity. i want to get to taxes and the plan to index capital gains and take inflation into account so you

thisnk she is leaving phase week and then are implications for eurozone reform. indications for what and nato.th trade i don't think she leaves this stronger. tom: for our european audience, toughight europe got words from president trump about nato. taylor: shares of glencore are taking a dive today. the biggest commodity trader said it's been subpoenaed by the justice department to hand over documents related to money laundering and corruption. the investigation is about the business in nigeria, congo, and venezuela. hasermany, angela merkel staved off the government breakup over migration. she came up with a plan that would tighten immigration and keep her party in the coalition. he will stay on it. the former prime minister of malaysia has been arrested in a graft investigation. the arrest was made by the task force looking into the corruption. recoup moneyng to from the fund. the u.s. is opened up another battle with china days before they are likely to impose paris -- tariffs on each other. prevent chinag to mobile from entering the telecommunications marke

we have had data out of the eurozone with services expanding at a faster pace than initially estimated, picking up in 55.2, theclimbing to blue line right there, from the 55 estimate and that 53.8 number we saw in may. survey shows is confidence climbed for the first time in four months and new orders, and employment also accelerating, helping push the compensate reading for output in the wider area to 54.9, that is the white line. higher again than the initial estimate. the average reading in the second quarter with the lowest since the end of 2016 still points to a growth rate in the eurozone of .5% in the second quarter. love this chart, speculation the ecb will introduce an operation twist after it ended with the purchase program turning the french yield curve on its head. bonds dropping to the lowest thel yesterday, reducing premium over five-year notes, bringing the chart to the lowest level since november 2016. had a report last week saying the ecb would reinvest proceeds from maturing bonds. full amid this shrinking of eligible debt, holding the german bonds close to the ecb's

union or the euro is an obscene to bailout the euro is an obscene to bailout the country, —— the eurozonery can avoid austerity and come back and seemingly prosper. it depends on the dynamics of your economy. people in ireland took significant amounts of austerity and yet they are bouncing back stop yet the portuguese authorities can point at 2.5% growth for 2018 cert ed appears to be working for them. from san francisco, the city looking at banning workplace cafeteria especially where the food is free for staff because they harm local restau ra nts a nd cafes. for staff because they harm local restaurants and cafes. they do have a point. reading the story i have been thinking about that it rather depends on where yourjob is. if you are ina depends on where yourjob is. if you are in a tech campus in the middle of nowhere and you have to spend an hour tried to get some way to get your lunch, this is not a convenient idea. if you are in the centre of town, and that is the proposition in san francisco, the fact that you have free and subsidised meals to keep it close to your desk and not won

is intended to stimulate the economy of eurozone states breached the city's monetary policy mandate has purchased government bonds worth two point three trillion euros. the european union representatives have been meeting with foreign ministers of six balkan states in london to discuss their prospects of joining the e.u. the countries include bosnia and herzegovina serbia kosovo and macedonia albania and montenegro by joining the e.u. they hope to generate greater wealth before the western balkans can hope to benefit from europe's economic strength they've got some homework to do. all in all the west balkans are quite a way along the path to membership according to sources in brussels they've made progress on the rule of law and the independence of the judiciary the legislative process is also being brought in line with the european union. but even membership also means integration in the common market business must be competitive and in many cases that's a long way off the most important yardstick for the economic strength of a country is its gross domestic product you know beanie and

-- retail focused, particularly in the eurozone.see rates moving, if you don't see slightly steeper curves, bank stocks don't really make sense is a real basis for performance. for broader society, it basically tells us when you look at real estate, for example, in germany, you can see where the money is going. into not really going consumption. people are borrowing money to buy houses. i wouldn't call it a bubble, but it is really boiling at the moment. tom: thank you so much. this is a terrific briefing coming off of the sort of haphazard start the second half of this year. again, jobs day tomorrow. your job is to tune in at 12:00 noon. mr. scaramucci will stop by on how they communicate at the white house. rumor has it david westin will get a briefing on the new york mets, 14 gives behind. scaramucci will figure that out. this is bloomberg. ♪ this is "bloomberg surveillance." turmoil has deepened that hna group, the chinese conglomerate that has been selling billions of dollars in assets to stay afloat after its number two execut

there are so many krises out there be it the trade war against europe read the urgent reform of the eurozone. that means if germany affords itself another hear of paralyzes or of stays is that would really be costly it would involve an enormous amount of uncertainty not just for germany itself but for the entire european union and we are not in no situation to be able to afford that. a prospective new metals giant is taking on the flood of chinese cheap chinese steel germany's to cope and india's tata have agreed to merge their european still making operations after two years of talks regulatory approval is still to come along with job cuts. the joint venture comes in response to the problem of overcapacity on the global steel marcus the new firm which will be known as to some crop tata steel will become europe's second largest steelmaker. if this is really the key issue to move successfully for the. global existed as if he had also cost tremendous additional imports into europe imports into europe are an all time high level which have only increased the price pressure on that material. to t

budget the european monetary fund but not on the specifics and then also them there are many other eurozone member states who have their own interests and very different views i mean that is interesting you point today's other views the fact that some countries may not even be ready for example italy has got big issues to grapple with at the moment could we not potentially risking a two speed europe going on regarding reforms that might be a risk when it comes to the speed of reforms and the development of competitiveness and the debt situation but we can't have two speed europe in the sense of having two different kinds of rules you know this is this is a club and the rules should be the same for everyone and they should be they should be followed by a behavior one that's that's not something where the way can have deeper integration will lessen integration it has to be it has to be you know out for the how to be european union so then what reforms are needed in your mind what worries you where are the biggest risks one of the biggest wrists and also pertains to italy is the doomed loop be

european court of justice to decide whether the measure which was intended to stimulate the economy of eurozone states breached. on a matter of policy not that. that's all from a child of an update for you in the next hour and watching about. climate change. environmental projects. globalization. biodiversity species conservation exploitation. human rights displacement. the global and current local are. global three thousand next on d w. climate change. waist length. isn't it time for good. eco africa people and projects that are changing no one fireman for the better is up to us to make a difference let's inspire each other. going to be environment magazine. on d w. a who do you think is going to be no joke. who matches the scores. in eighteen soccer world cup on t w news. neko case in germany to learn german. published in the. why not learn with him online on the mobile and free to suffer from the w e learning course nikos fic. this week on global three thousand we head to the forests of said b.m. where happy pigs enjoy a healthy life and provides top quality organic meats come much longer. t

humphries spoke to michael board director of the think tank open europe about the biggest challenges for eurozone reform. one of the biggest risks and that also all pertains to italy is due to between banks. and government budgets so if there if these banks whole lots of government debt stubborn dead of their own country then once you have a banking crises and there's many non-performing loans in the talian banking system then this could lead to a national crisis that. we would have another bailout program perhaps for italy and italy might be too big to fail the point see the potential for a new bailout program one of the ideas actually put forward by the french president and that mack is in favor of is this european monetary fund to help countries in crisis could you imagine a fund whereby it was the funds automatically release are we going to go through something arduous what each national parliament needs to say yes this country can have this money it is a big question also of national sovereignty and you know no taxation without representation and should understand for example the german gove

she asked how a trade war will affect the central bank's policy in the eurozone's economy. ♪ is veryrtrong growth in the eurozone, meaning that so far what we have seen has the potential to end the recovery. >> can the ecb just sit back and watch this trade war happening? >> well, we're never sitting back and watching. we have to understand what's going on. but so far we believe the course is wit strong enough. >> have you already seen some companies holding back investment because of these protectionist policies? >> that may happen. we're not complacent on the possible risks. of trade war would be extremely bad for the world economy. u.s.irst victim would be jobs, u.s. workers, and we hope that doesn't happen. >> the ecb plans to execute me by the end of the year. look at derail the plan? >> that is clearly our anticipation, but with that said, as with everything we do, mid-july, we could change. ♪ >> with a growth rate of 3% or better in this quarter, the most recent quarter and this quarter as well, does that change your view of how many interest rate moves you need to make? >> it

a big factor in terms of every statement we got out from a eurozone come.t should turn around. a tailwind rather than a headwind. lothar: that is a real problem now that things are getting better. let's not forget china as well. china also had an impact on europe. china is still slowing on the construction side. also stabilizing. things could look up more on that side for europe. guy: the dollar has strengthened. china, much more stable. the european companies have an advantage if they look east ravens in west in terms -- rather than west in terms of stability stories. >> probably less risky but with china going through cycles up and down on the demand side and that is what hurt europe it was not the currency. it was china's slowing. a double whammy with the dollar strength initially weakening which hurt the companies. now those things are moving away. guy: does the ecb remain as a significant provider of stimulus across the horizon? tighteningy are of a but they will still be providing liquidity. globallying down and we are entering tightening. taking into

holdingmore going to be the eurozone together. he monetary union.y, thank you so much. geoffrey of u.b.s. private banking stays with us. coffee at a low. should you expect a cheaper cup? that's next. this is bloomberg. ♪ francine: this is bloomberg "surveillance". i'm francine lacqua in london. tom keene off for independence day. happy fourth of july to everyone watching us. as the brazilian football team awaits a quarterfinal with belgium this friday of course commodities tion's is sliding. how is the future looking for one of the world's top coffee brands since beginning life 120 years ago. they have embarked on a global expansion. they have six manufacturing plants from france to india and brazil. according to the company, 27 billion cup of its coffee are drunk annually. that is around 25,000 in the time it is taking me to introduce our guest. think about that for a second. joining me now is the vice chairman and geoffrey is still with us on the set from u.b.s. you a sponsor of wimbledon. better sponsor of wimbledon than the world cup given where

the ecb warning that trade escalation could mean a worsening of the economic scenario here for the eurozone i think now with that tentative agreement, people inside the ecb will be quite relieved they can stick to their more or let's overly optimistic outlook. that compares to economists and various investment banks who are more negative about the european economy than the ecb looking at haven't economrecent indicators, it depends on which ones you look at the pmi came in still in quite an expansionary mode even though it was contracting a bit. it's still in expansion mode that's key for the ecb so what to expect from today not an awful lot, i guess. i think the focus will be on the rate guidance, because that was pretty new when they stepped out and said, listen, we keep rates at this level we are seeing current currently. i think people want to know more about what that might mean for the first rate hike, and another big area investors are in the market for and interested in are the reinvestments. for now the ecb is saying they keep on reinvesting the proceeds from the balance sheet for a

their five-year bonds are the highest in the eurozone.fter greece syria russia is on track for its biggest bond issuance miss, they sold half of the money that wanted to borrow. that is the worst result since 2050. priya, bob miller, and mark okada. priya, i want to begin with you. basically just -- book your trade, book your products. i'm cynical for -- book your profits. i'm cynical for morgan stanley. whether you think we have seen the high of the u.s. 10 year? >> high for the next few months probably. not high for a while. we are in a to 6310 type range. at 285i think the pricing is in some of the wrist. the u.s. economy is still pretty robust. the fed chair said the economy is great. we heard the economy is great, -- i think the fed is going to continue the hike. 2% on the fund rate is not interest. financial conditions have not tighten that much. i think rates can continue to rise. get about 3% i think money comes out of other risk assets. that is what ultimately caps it. have we seen that theme park to emerge -- that theme start to

more signs of maybe we can data coming through from the eurozone.rief renaissance with that data in the pmi's. from carmignac gestion joins us. let's talk about u.k. assets. u.k. assets feel very difficult to judge right now. a lot of details on both sides, on bothks both -- tails sides, till risks on both sides -- tail risks on both sides politically. how do you judge where to put money to work in the u.k.? sandra: it is a very good question because we are quite polar the u.k.. we have some local domestic firms which are going to suffer in the slower growth environment -- this lower growth environment. some very strong multinational exporters, one of the reasons why the but he is up 30% since the -- ftse is up 30% since the announcement of brexit two years ago. recovered quite a deal of its loss from the announcement of brexit. i suppose it is relatively cheap here, but maybe one of the reasons for a rally overnight is because theresa may's government has lost some of the weak links. that is not. --there does not be any there does not appear to be

the backdrop is very strong growth in the eurozone, resilience growth.e so have seen has the potential to derail the recovery. >> can the ecb just sit back and watch this trade war happening? >> well, we're never sitting back and watching. we have to understand what's going on, but so far we believe growth is strong enough. to withstand the shop. >> have you already seen some companies holding back investment because of these protectionist policies? >> that may happen. we're not complacent on the possible risks. a full-fledged trade war would be extremely bad for the world economy. starting with the u.s., by the way. the first victim would be u.s. jobs, u.s. workers, and we hope that doesn't happen. >> the ecb plans to exit qe by the end of the year. what could derail the plan? >> that is clearly our anticipation, but with that said, that will be data dependent, as with everything we do. as we speak, mid july, i see no reason to change. >> with a growth rate of 3% or better in this quarter, the most recent quarter and this quarter as well, does that chan

and eurozone will even out. recently, we have been seeing dollar strength.continue in the short term. we think, a little bit of dollar strength is possible. anna: great to see you, thank you for seeing us. deputy head of the u.k. investment office at ubs. we saw markets in negative territory, and then they bounced above 1%. coming back a little bit. european futures, a little weaker than an hour ago. market open next. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. good morning, welcome to bloomberg markets >>. we are live from our european headquarters. i am guy johnson. >> the city that never sleeps. asian markets have staged a dramatic turnaround. the cash trade less than 30

scott: my view is economic growth in the eurozone will continue to grow. u.s.onomic activity at the same time is very strong, and policy reaction has been relatively methodical. you have to say, what is the relative economic growth of the two regions, and going forward, what would that be? briefly on the inflation front, what about europe? i don't think the inflation story is one for this year. growth picksonomic up, inflation will pick up. anna: -- manus: stay with us. coming up, we bring you our with a ceo. you are tuned into bloomberg. ♪ six: 30 a.m. in london, 2:30 in the afternoon in tokyo. the dollar-yen, bottom of your screen. it keeps doing strange things on global trade tension. the question you have to ask yourself, very simply, if trade tensions ease, do you want to be long? yes, that's the question. let's get more breaking news. nejra cehic is standing by. >> second-quarter revenue coming in at 12.1 billion euros. just beating by a whisker on second-quarter revenue. the number beating the highest estimate out of the range. the net debt number for th

guy: does a weaker euro tech the eurozone? -- protect the eurozone? tim: it does to a degree. certainly help. guy: all of the ceo's we spoke to, they were all talking about the fact they were getting hurt but a stronger euro. tim: for them to get some advantages, we need to see for the week this. the buffer created thus far has helped. i would say it does need to go further to be a boost. euro-dollar has fallen. a lot more em then people appreciate or acknowledge. it's not that much. it's weaker, no question. that will be the goose that will drive the corporate sector forward. he doesn't have that advantage because e.m. has weakened. guy: what does my portfolio look like right now? i'm a medium-term risk taker. what am i looking at? focus,e longer-term given the re-prices we've seen, emerging-market valuations look relatively attractive. they probably look more so now, but you have to weather the storm. it probablyut, doesn't matter taking the risk in that corner of the market. even with the volatility we are seeing, the valleys are there. for the next couple of months, you ha

activity in the eurozone slowed in june. and by slightly more than previously reported. confidence among japan's manufacturer's weakened for t second straight quarter, amid concerns about the potential impact from the global tra fight. and a private gain showed growth in ina'sanufacturing sector slowed in june. >> as expected the department said today the u.s. is going to reimpose sanctions on iran. the first wave to begin in august will target trade, gold and the automotive sector. and include the goal of eliminating imports on iranian gold around theworld. >> our goal is to get as many countries as possible that import iranian crude down to zero as soon as possible. to ensure market stability. >> add to that the suspension of oil exports from libya and questions about saudi arabia's production and you have a tug of war right now in the oil market. jackie deangelis has more o at part of the story for us. >> in a tweet this weekend on toil, president trump sai prices were too high. he said he spoke to kingalman of saudi arabia and explained the turmoil was causing him to

he also singled out the eu and the eurozone.ty clear they have not been manipulating their currency. and china has been letting it fall. they haven't been taking active measures to weaken it. doy are letting the market what it wants to do, which is what people have wanted to see over the years, and the market is taking it weaker. they're certainly not discouraging it. does this market under shift? i don't know because it has to be followed up by for the rhetoric from trump. all of these tweets, as we alluded to, they're having less of an impact and they are focused on actions. matt: let's talk about what you expect across the board on currency. the euro, first of all. the last time it made any real news, the ecb all but promised to raise rates in september. obviously they are not manipulating the currency to the downside. what is the outlook for the euro? tim: the euro is in a challenging situation because trump can threaten to slap tariffs on exporters, which is your negative -- euro negative. the exports sector would be hit an

we think yields are headed higher because things are normalizing in the eurozone.ere are worries about italian politics and other issues which could cost -- cause --, we don't think they will be serious enough to crystallize. there is a large short base, yes. anna: john, thank you very much. thank you for your time this morning, we really appreciate it. john wraith will be continuing his conversation with us on bloomberg radio at 7:30 u.k. time. you can stay tuned in for that. let's talk about what we are watching for today. we get a london time slew of data out of the u.k., including for the first time monthly gdp. not the quarterly when we are used to, but the monthly gdp figure. mark carney and the bank of england say they will still have whenh data to move forward they have to make a right decision in august -- rate decision in august. londonmike pompeo is in -- brussels. he is a secretary of state and left pyongyang without any clear achievements. it is going to be a fascinating political second half of the year, with vladimir putin meeting trump, and what wil

economy and eurozone inflation.elds that low in europe, similarly suppressed in japan obviously, i think the global effect is to keep yields low everywhere. if you try tond, assess the effects on u.s. bond yields of qe, it turns out that global qe is a better explainer of u.s. bond yields than just u.s. domestic cutie. --qe> improving, butre is it your sense that the structural story around bunds is the shortages supply means that data is on was irrelevant? there's kind of a structural story that's more important when it comes to european bond markets. guest: the question is what can make bond yields go up? who is the marginal seller of european bonds? at the moment, there is no marginal seller. or it's a seasonal thing, at least a time varying thing. plumbing think about issuance and qe, yes it's going to go toy, globally and is going increase, but it hasn't happened yet. summertime is a time, especially in europe, bond issuance declines both in government bonds and corporate bonds. there's not that much duration f

ands talk about the pmi's but we see from the factory floors the eurozone. have this chart that shows the pmi details for the euro area. we are coming off of a strong place come en suite -- place, aren't we? saker: the problem that europe has now is this uncertainty of a trade war which is going to hurt everybody. on my china who is also , whoenced -- unlike china is also influenced by the trade war, it is an open market. you have a trade war looming and an uncertainty of how you will push forward politically. so you are right, there is political uncertainty. manus: with that political uncertainty do you expect more euro weakness? we have dollar strength and we can talk about that, but the euro is down 3% against the basket of g10 so far this year. 's political instability and infighting between working your -- lead to a weaker europe? the discount is a discount to the future. it is about the performance of european big companies. i used to say this a long time ago, companies now are globalized. typically speaking they are spread around the world in terms of

mario draghi is likely to confirm that the eurozone is back to relatively strong economic health.oday's policy meeting predicts will endning council their purchasing in december and clarify when they will next hike. what are you expecting to hear in terms of rate hikes? the question will be asked, i'm sure. alberto: the question is what "through the summer" means. nejra: exactly. alberto: it is the first time they will start normalizing the negative. economic data has been weak in europe. there is stabilization and an uptick in economic surprises, but the situation remains uncertain. at what will happen in september, italy will go into the national budget. a lot of disagreement on how much to spend. and some periphery spreads remain wide. so i think the ecb will remain dovish overall. they have not had the fiscal stimulus that the fed has when the fed started qe. the u.s. was spending at a deficit of -10%. they have kept their markets tight. biggerket is now much than the fed percentage of gdp, but they have a tougher job. they do not have any support from the fiscal policy of the

. >> new economic data showing a slowdown in the growth of eurozone. >> it zame in at 0.3% for the three months between april and june. that's the lowest level it's been in two years. in spain, growth was the slowest it's been in four years at.6%. while in italy it was .2% growth for the last quarter. if the trade tensions were to erupt again with the united states, it's woworrying economists. claire: how is that going in the markets today? >> we have the european markets trading pretty flat. the summer recess is swinging in for traders as well. no great reaction to those figures. shares in oil company b.p. up about.9%. a surge in profits earlier. claire: here in france, hotel owners are taking steps to fight back against negative comments online. >> it's one of those things we have come used to. before we book something we tend to look at re news onlynn and perhaps the bad one can can put you off booking. the problem s. those are marked when they are published online are not verified and they can do huge damage to businesses. most is one of the prestigious hotels, but she said business

even with the yield on 5-year bond's, there are the highest in the eurozone.sia, the country is on track for its biggest bond issuance in years. it sold half of the seven billion dollars it wanted to borrow this quarter. that is the worst result since still with me around the table, 2015. priya misra, bob miller, and joining us from dallas, texas, is mark okada. let's get to the story of treasuries so far this year. we have seen the call from goldman sachs, which is basically -- fold the big long, book your trade, book your profit. i have seen a call from a morgan stanley, which effectively issued a high on the u.s. 10 year. it takes me back to a question i will ask continuously, whether you think we have seen the high of the u.s. 10 year. priya: high for the next few months, probably. i am not sure if it is for a while. at 2.85, i think we are pricing in some of the risks. the u.s. economy is still pretty robust. when was the last time the fed chair said the economy was great? jonathan: it has been a while. priya: we have heard the economy is great, personal

better—than—expected growth in japan, the eurozone, the us and still have good growth in the us.s that the central banks were about to normalise policy but actually, if you go back to the start of the year, people have had to pull back some of their expectations. some central banks such as australia and new zealand probably aren't going to do anything this year. that in the uk, many would argue, why are they poised to raise rates in august when oui’ poised to raise rates in august when our economy is flagging and there are signs we are struggling? they are signs we are struggling? they are in certain sectors. the retail sector for example. if you are in certain sectors. the retail sectorfor example. if you look overall and the gdp, it looks as if it is ok. first quarter, yes. a smidgen. that data was probably why the bank of england didn't hike the rates in may. many of the central banks want to normalise. they want to ta ke banks want to normalise. they want to take us out of those really extraordinary conditions that they put in place. it is so hard to the bank of england to ma

we came on this programme for years during the eurozone crisis, and everything was always the same evenone was always kicking the can further down the road. whatever happens in the eu negotiations, the fundamental facts remain. until the tory party gets its act together and strengthens the hand of theresa may to go and negotiate with certainty on things like the irish border, we are going to be in the same position over and again. the irish border was specifically mentioned as a key sticking point. jean—claude juncker did say this week, others in brussels cannot deal with a divided cabinet. that is why there is all this focus on the big cabinet meeting at the country retreat of the prime minister and that fact cannot be escaped, can it? people position for domestic purposes. people in the uk position for domestic politics not thinking squabbling assists the other side in a negotiation we are conducting. not thinking that the europeans read our press. they do so avidly. they love this kind of stuff. i can say it is a fact and therefore because i get to win, apparently, if i'd talk for te

even end of it break up of the in you or you may not quite concerning isn't it because a week and a eurozone have the time when such big economic issues are on the table internationally the european union and the u.s. on the brink of a trade war so what would you say all the main challenges facing the german economy right now internationally yeah the trade was certainly a very very big topic because we are a very open economy half of our g.d.p. goes into experts so we really have to prevent and treat war try to prevent of trade war with with the u.s. and other countries of course and for that we need to other emu countries because or e.u. countries because custom custom policy is basically a common policy and so nope no country can do it on its own and then of course we have other topics like that if you tell ization or relax awful skilled workers which is a very important topic for germany so we have to go on on that as the fields as well so one of the questions these issues are at stake by this political turmoil in but then at the moment when we look at the issue on the table that's cause

shoulder with the united states in standing up to putin and helped rescue the global economy and the eurozone taking in all these refugees, showing what the true meaning, i think of western values are by welcoming people into germany, to have now an american president literally attacking an american ambassador who is actively trying to undermine her, she deserves far better than this. this is a woman who has been with us, and i think the rest of the world will look at this and say can we trust america anymore? if this is how they treat their friend, the people that have stood by their side, can we trust them? >> president trump himself has made the 2% of gdp for the nato budget a hallmark. we have a nato summit coming up next week. he's obviously going to put that on the table again and it started under president obama in 2016 and here in the uk, in fact, do you fear. is there a fear that the united states might, under trump, pull out of nato or abandon article 5. he did reinforce it last summit last year, but have things changed? >> i think they have. he reaffirmed it, but he seemed to be dr

negative impact on the german economy in particular given that germany is the powerhouse of the eurozone powerhouse of the european union but the problem is for mr younker is that. rules mr yoker was to actually look to cut the tariffs on u.s. goods being imported into the us and have to do the same for all the countries around the world that also has agreements in place with so in a way mr trump is inviting me over to have a conversation about an issue he knows we can't really get instant results from so i suspect mr young is going to play the charm cared for and i should say that the tough talker if you look at some of what's been spoken about trump plumbing huge part of some foreign cars twenty five percent by some accounts he's in for a tough meeting younker if he's going to get anything out of this what does he want what could he actually get here. well ideally mr mr wouldn't give much away and hopefully talk with a child from actually going down that route a one hand it is quite positive for the e.u. that mr younger is going to the white house. looks good for president trump is on

leadership there's so many crisis out there be it the trade war against europe the urgent reform of the eurozone and that means if germany force itself another here of paralyzes or of stays is that would really be costly it would involve an enormous amount of uncertainty not just for germany itself but for the entire european union and we are in no situation to be able to afford that. and let's get the take from call my boos in our financial correspondent in frankfurt comrades is it all that dramatic i mean germany is in a very strong economic position. that's true ben germany's economy is strong but germany's economy is also one of the most interconnected in europe which means that it's really depending on smooth easy relationships with its neighboring countries. the countries that germany does most of its business with notwithstanding the fact that we are exporting so many goods and services also to other places in the world that's why it's so such an important dispute for businesses to follow and that's and i can tell you that if you talk to people here that don't really like to talk about po