we will come back on mario draghi and ecb. who they pick next after mario draghi.>> unfortunately not. northerne will be european likely. tom: you say orthodox. >> that is the word i was looking for. it is important the proms are dealt with while he still is in place. tom: fabulous research by deutsche bank to get you ready for a busy autumn. coming up, charlie o shea on retail. he is with moody's. they are looking at credit quality and equity performance of retail. stay with us. this is bloomberg. ♪ >> this is "bloomberg surveillance." let's get the bloomberg business flash. shares of the at tying company that operated that collapsed bridge are being battered today, suffering its biggest loss in three decades as the italian government has begun revoking its toll road concession. at least 39 were killed in the disaster. that investigation into elon musk's tweet have reach a more serious stage. the carmaker has received a subpoena from the sec. musk exposed himself to legal risk by saying he had the funding to arrange a buyout. star board has nominated five director

replacing mario draghi.cations closed today for another top role that the central bank, one which could decide who will take over at -- as president of the ecb. nejra: we will bring you more from our interview with u.k.'s international trade secretary liam fox later in the show. this is bloomberg. ♪ >> 6:49 a.m. in london. six days of gains for the euro against the dollar. it is not managing to hit the 116 handle. in the session. let's talk about what's going on at the ecb and get the rates. mario draghi is more open than previously thought. a report that germany will not to become the next european central bank president. the ecb's next a big appointment could cast a long shadow over who will get the top job. applications to replace france's daniel closed today. front runners include -- it is the most powerful role whose candidate -- where candidates are selected by the ecb itself. whichever country takes over is probably out of the running for the top job. ours get the latest with financial supervision rep

i would love to hear your thoughts, first of all, what mario draghi meant when he said he would keepest rates at this level through the end of the summer? debate about what that means. is it a promise not to raise rates until september? anticipation on the basis of the decision by the european central bank and it's governing council. markets arethe reading the guidance of the european central bank correctly for the moment. in other words, even if the net asset purchase will be ended by the end of this year, at the payments principal will continue to be reinvested, and the monetary policy will stay expansionary. also anticipate policy rates by the ecb will stay at the present level through the summer . mindhis has been to my interpreted by the market, and i also hope by the citizens and businesses. matt: the market also expects reinvestment's for another two to three years after the finish of net purchases. i do not know the exact timing, but the governing council has stated and anticipates that the principal payments on maturing securities will be reinvested in the coming period as l

mario draghi is skipping this year's symposium.k says it is in no rush to raise rates, even if it means it is out of sync with the rest of the world. the governor of the central bank said he has not ruled out cutting banks if necessary to achieve the bank's inflation target. the kiwi extended declines after those comments. >> that puts us out of sync a little bit with the rest of the world, but that's fine. that will feed through the exchange rate and help support our economy, but we don't rule out a cut if we have to. our task is to use the full cut isf inflation and a certainly on the table. >> global news, 24 hours a day on air and @tictoc on twitter, powered by journalists and analysts in more than 120 countries. facing greatei pressure from beijing as its allies -- we will talk to the taiwan foreign minister, joseph wu. we will keep you updated on the political drama unfolding in australia. this is bloomberg. ♪ rishaad: welcome back to "bloomberg markets." i'm rishaad salamat in hong kong. haidi: and i'm haidi stroud-watts in

a huge percentage of its gdp, and you have a chairman of the bank there, mario draghi, who doing hisdo stop version of qe but announced he was going to hold rates constant for the next 12 months even though germany is growing rapidly, france is growing rapidly, france's doing well. it's hard to argue why rates should be negative. that case, he's right. whether or not the treasury does something like cell dollars is a whole other kettle of fish. yet, the downturn on the trade front is with europe, not china. do you think europe is a bigger issue for trump? >> it depends on how you want to look at it. he is looking at it from a narrow perspective of bilateral aspects. clearly, it is much more china. although, china is more, i would say, part of the u.s. supply chain ban the traditional trade model we got in school between -- between onees country or another. europe is a different situation. from a global standpoint, which part of the world is really sucking in capital. and not letting it back out again. hence, the demand for good, that's europe. when we talk about europe, we are really

mario draghi's term ends next november and we are getting clues over who is in the running for the jobcolas comfort. of the banking supervisor, whoever it is, he or she, we might be able to gauge who the next ecb president is. let's start with who the might -- who might the next banking supervisor be, which is clearly one of the top jobs. nicholas: i would say it is more a question of who doesn't get .he job of the presidency let's face it, in europe there is a delicate balance between countries. the bankuntry gets job, it is hard to imagine that same country getting the presidency as well. if you had a german top banking supervisor, imagine how the italians and other countries would be annoyed if they got the presidency. it kind of rules out your country by moving for the smaller job, and maybe your country will be keeping that power dry and focusing on the bigger job. who gets it? there is a lot of qualified candidates. -- shannonlready doherty -- there are the italians. ngeloni really knows his stuff. maybe that speaks against the canada. the italians really know their stuff as it c

mostly deputies, the big central bankers, mario draghi, corona, not attending this year. the subject matter does not lend itself to discussions about their own economies, changing market structures, but the people from the emerging markets will be interesting to talk to because whatever the fed does has an outside effect on them, and the fed is going to take steps to run monetary policy for them, so they have to clean up their act. and they will be talking to fed officials keenly about what they think is going to be happening with the u.s. interest rates because it will affect their countries. >> david, just sticking with that idea about these banks outside of the u.s., what is the risk we are dealing with right now with those banks staying too close to zero? well, the european banks, the bank of japan? >> the ecb, bank of japan? david: yes. when the real economy starts to slow and monetary stimulus is necessary, it is a challenge for all of these banks to stimulate the economy. they will again rely on unconventional measures with their close to zero. but that is not the

everyone is thinking, who replaces mario draghi? that will have a huge influence on ecb policy and 2020, but no one is thinking about policy at the banks. we will potentially know the next governor by the end of this year, so that may influence market expectations beyond the next few months. vonnie: we are about to cross the 1.30 mark for sterling, but before that, the pound had been a lot stronger. where do you see the pound headed interesting? david: luckily, i am not a foreign exchange strategist. i really do not know. i have not spoken about brexit so far, but if it is a hard brexit, and negotiations break down, you could see sterling trading weaker than these levels. u.k. to adjust all the imbalances to brexit, to a lower rate of trading growth, and everything else, probably requires an exchange-rate. sterling has been brought the going sideways. it is a little weaker than in the may inflation report. obviously, i understand the focus on the dollar. a lot of this will revolve around brexit and in october and november, in terms

mario draghi.ing up at 6:30 a.m. in new york. this is "bloomberg." ♪ sebastian: this is bloomberg surveillance. let's get the business flash. pepsico has agreed to buy sodastream for $3.2 billion. that represents an 11% premium to friday possibly is closing price. pepsico points out that soda stream makes great tasting beverages while reducing the amount of waste generated. in italy, the government is moving ahead to revoke autostrada's highly concession after its role in the deadly bridge collapse. that is despite atlantia offering $5 billion in aid. italian authorities say they will still cancel the highway contract because the victims of the collapse deserve justice. elon musk sees no option but to keep working at his current pace. board members and investors are growing more concerned about his health. musk tweeted he had just gotten home from the tesla factory. he appears determined to lead the car company through the turmoil that erupted when he suggested taking it private. that is your bloom

he sounded like mario draghi. he will do whatever it take, right? if inflation shows its ugly head or the economy starts to slow down, that really brought the dollar back down. gradual interest rates increases. ashley: shocker there the french are on strike. who would have thunk that. >> hard to tell. how did you know? ashley: phil, thank you very much. appreciate it. kristina: i got to follow-up with phil, he brought up the fed. we have fresh comments from fed chair jerome powell, boosting stocks to new record highs today. powell defending the central bank policy of gradual rate hikes for the first time since facing criticism from president trump. we have edward lawrence live in wyoming with the latest. edward, what are you hearing? you're in the mix out in the bush what it looks like but tell me -- reporter: out in the middle, moose and all, out in the middle. federal research chairman jerome powell outlined strength of economy as reason they go forward with the gradual rate hike to get back to the neutral level. he said the economy is not overhea

with the major global central bankers, mario draghi of the european union, is jackson hole a disappointment? does it pack a punch? we bring in ward mccarthy along with traders at the new york stock exchange and cme group on a very big market day. ward, i see nothing else that would trigger such strength in the markets than what jerome powell said and didn't say. did it surprise you he didn't really take on president trump? he's just walking the path he feels is appropriate right now? >> he's letting other people take on donald trump george being one of them. he explained why the fed is raising rates gradually and described it as being risk management approach to policy that should avoid major policy mistakes and gave himself an a for what the fed has accomplished by saying that the dual mandate is maximum employment and stable inflation, and he said it himself. if most people who want a job can find one and inflation is stable right near target of 2%, so all is well at this point as far as powell is concerned and intends to continue to gradually raise rates. actually to neutrality, 100 basi

. -- my sense isch that when mario draghi's tenure comes to an end, it will probably come with one rateike under the belt. that rate hike will not -- is not priced into the market now. it is not a hawkish scenario. it will allow president draghi the ability to manage the narrative at the beginning of the tightening cycle that will manage market expectations. it is above the slope of the yield curve. this is where the ecb power is. . yes manus: think you very much. managing director at g plus economics stays with anna and myself. it was the first public appearance since the summer recess. angela merkel has said in german television she expects faster adoption of electric vehicles, which could limit climate change. she added the eu would do better to meet existing emissions targets rather than set new ones. meanwhile, tesla faces possible bumps in the road after elon musk did an abrupt turn and dumped his plan to go private. let's have a conversation about the tesla story. with our reporter on this story. this is a bizarre and to this saga. late night, take it public, take it private -- w

matt: that has been the question for mario draghi, but is the ecb -- you don't have to bring it in yourculations for the foreseeable future? ralf: i wouldn't go that far. what is the ecb? as such, it does not exist. a bunch of individuals collectively come up with a decision on a regular basis. not all those individuals have the same views. we have fairly strong comments in the last week or so. from that perspective, i think the back and forth between the hawks and the doves on the governing council will come back at some point. -- data doesn't worry to it warranted, but if we have a stabilization of 2% in headline, the remainder of the year may see some rebound in the underlying macro picture. i would be surprised if the hawks don't try to reopen the debate of what the semantic definition of summer of 2019 is. there is too little priced in to though iean front-end, don't see why the ecb should changing stance at all. at the was in riga meeting and clearly through the summer of 2019 means until the end of the summer. just in case anyone has questions about that. they can't raise rates u

mario draghi is not coming, neither is mark carney, so it is kind of all about the fed. we may have some talk about emerging markets, but not really a global issue right now. and the fed has to worry about america first, coin a phrase, and he will be looking at what is happening in the emerging markets around the world in terms of its effects on the u.s. economy, not in terms of the fed's effects on those emerging markets. caroline: are you expecting anything from jay powell's speech, with mentioning the emerging markets, or the further concerned about the chinese and u.s. relationship unlikely to see a breakthrough in the next few days -- what do we think of terms in response to how it will affect the u.s. economy? mike: i do not think, and most people on wall street would say that they do not think he will go into any detail. you could mention those things as factors the fed must consider, without making a judgment on them one way or another. because in this case, given where we are with the economy, and given where the fed is right now with the monetary policy strateg

. >> it seems like we now have better guidance from mario draghi and the ecb, and women could see a potentialte hike. how much of a risk will this be for your business? it is an additional revenue with no cost. beyond that element, which is important, and the growth its fundamental to success in terms of our business model. we are investing today because we know the way people are already changing. there are investments in i.t., digital technology, 1.5 million clients. we will probably meet a 2 million target one year in advance. very positive in the transformation of the business model going forward, a better rate environment. announcing you are selling one unit and you just agreed to sell your belgian private banking business to abn amro. how much does this represent? frederic: as we have said, we are competing on the activities where we think we have effectively the critical size to compete in the long-term. the level of seniority with the rest of the keeping thejustify business, and as you mentioned, we've announced three proposals in central and eastern europe and the private banking bus

is already there and moving on, but mario draghi has promised that they will not raise rates until the of summer 2019, but people take that as a promise they will raise rates at the end of summer 2019. that, think they can meet the ecb can meet that target, or might they have to push it back as well if they don't meet inflation targets? kokou: this is important, because it also ties into the yield curve. the clear view is that this is a business cycle, which is ending in late 2019, early 2020. as a result, global growth and where the u.s. is, it does not leave a lot of room for central banks to normalize policy. on the flipside, the central banks need to normalize policy as fast as possible so they had ammunition to cut rates when the cycle ends. that's why you have a bit of a conundrum between a flat yield curve that is essentially showing that the fed obviously owns a lot of treasury and they need to sell at some point, but then the marketers will say, within two years, the end of the business cycle, the short-term rates are too high. this is clearly a good question. my personal view

sameer: the tricky part will be you have political risk, think italy, and mario draghi, whose term will next year -- sometimes next year. so that determines who will take the helm at the ecb. it is also what they will do around raising interest rates, and the currency has been weak. we would say there are some positives, but they are unset i some uncertainties. we would be more neutral there. lisa: really interesting, sameer samana, thank you very much. still ahead, the chief executive of credit suisse is shrugging off the trade war. we will bring you his exclusive comments, next. this is bloomberg. ♪ lisa: this is bloomberg markets. i'm lisa abramowicz. caroline: and i'm caroline hyde. time for our bloomberg was it. isse's ceo is speaking about issues in turkey and argentina in the longer term. >> well-managed economies are safe. is no emerging -- there is no such thing as emerging markets. the economies [inaudible] finances their public in order and have significant reserves. the market, when people fear contagion, there is no contagion from poor managed economies to well-managed econ

. >> mario draghi, whatever it takes. >> there are things that could be said. >> i will not get my hopesthank you. we will check in later. fates are delivering the of president trump's former campaign chairman for third. live outside the courthouse for the latest in the paul manafort trial. this is bloomberg. ♪ scarlet: this is bloomberg markets. lisa: a jury in virginia is living the fate -- deliberating the fate of paul manafort for a third day. he faces decades in prison if convicted of charges. he lied to banks to get loans, millions of dollars hidden offshore from the irs. joining us now, andrew, what is to date? andrew: good afternoon from alexandria, virginia. a quiet day. no notes, no indicators. almost nothing. we are midway through day three of the deliberations. paul manafort's fate in their hands. the judge held court briefly over what sections of the transcript will be made public will not bp most tantalizing is a reference to an ongoing investigation as yet not a -- not concluded. the judge told us he will release most of what is under seal right now at the end of trial but

we do not expect mario draghi here either.rs from other countries are from the smaller emerging markets and some of the secondary level people from the ecb. it will not the as internationally focused as it usually is. but they do have jay powell here, and that is all markets will care about. david: that is mike mckee on location in jackson hole. tomorrow, live from jackson hole, we will talk to james bullard, st. louis fed president , as well as the dallas fed president and the atlanta fed president. julie: it will be busy. do not forget to watch "commodities edge" at 1:00 p.m. eastern. david: this is bloomberg. ♪ >> from new york city, i'm jonathan ferro. this is the countdown to the open. coming up, the united states and china imposing tariffs on each other's goods just as trade talks resume in washington. federal reserve preparing to raise interest rates again. the internal debate over hikes intensifying. saudi aramco's ipo delayed. remaining just there. well out of reach. in the markets, 30 minutes away from the opening be

but that scaling issue where the yields actually are in relationship to the entire is something mario draghive to pay close attention to. we look at what it going on in china. it's the same story almost day after day. their currency keeps moving lower. we have to monitor to see how they deal with capital outflows they've had on other occasions when this has occurred as you see on the chart, historically we started out comping august and july and now may of 2017. dollar index a big day for the dollar index followed by several big days if we look at it it's up a third of a cent now as you can see on the one week chart. it's been moving steadily higher as a matter of fact, they close at the 95 and higher levels. this could be the best close since july of 2017 carl, jim, david, back to you. >> rick, see you in awhile >>> still to come, reaction to ind indra nooyi stepping down as ceo of pepsico dow is down 55 points. "squawk on the street" is back in a moment. hi, i'm joan lunden with a place for mom, the nation's largest senior-living referral service. for the past five years, i've spoken with

on with russia and sanctions it's going to making fed's job and to a larger extent europe and mario draghi'sdifficult. >> yes at both ends, u.s., eu, ecb, if there's just a lot of disruption going on that makes it very difficult for those banks and other central banks to adhere to the stated policies. >> now, jerry, once the dust settles, do you, indeed, think that the tariffs on their own will be inflationary it seems like supply chains have gotten so sophisticated that in many ways they can mitigate the pressure of tariffs? >> yes rick, as you know, i've been inflation hawk all my life but this time i don't see it right now. and my concern is the fed believes against reality that we're going to have higher inflation. so keep hiking rates and i don't think it will stop until it causes a recession >> i got you jerry, a difficult situation in traded in the '70s and '80s and inflation can be a scary thing but we haven't seen it on our door step yet. thank you for your time. >>> now send it over to john ford what's happening on "squawk alley" >> galaxy note nine 9 from atg.un th's coming up on

. >> it seems like we have a better guidance from mario draghi and when we could see a potential hikew much of a boost will this be? >> very positive, by definition. it is an additional revenue with no cost. beyond that elements, which is which might come from the pickup of inflation and growth, what is very fundamental is the success in the transformation of our business model. we are investing today because we know the way our clients will accept banking services is changing. francine: that was bloomberg's reporter speaking with the societe general president. let's keep our focus on the banks. our next guest is from a financial service from italy. the company announced is creating a new, fully digital bank. a man with an extensive background in business and politics. he was previously the italian economy minister. welcome to the program. >> thanks for inviting. francine: talk to me about facts. in january. >> it was just an idea. francine: now it is a reality. how much did you raise? >> roughly 600 million. we hired a dream team. we started warming up on the markets. so everything i

the race to succeed mario draghi --the european central bank -- won't replace them have cast doubt over role. the new appointment could cast a long shadow on who could get the top job. applications to replace the head of banking supervision closed today. powerful role, but whatever candidate takes over is probably out of the running to replace draghi. let's get to nicholas comfort. run us through the candidates and who could be most likely to get this position. you mentioned two in the running. ireland --ery from she has built her kudos, developed in terms of nonperforming loan problem. then you have the other candidate who would be the obvious choice. she lives for banking alreadyion, but she is in a high position in the ecb had it rolls her out unless he resigns from that she has done. i would be doubtful about her. there are other names you hear. a high-profile former politician. has the political skills going for her, and then three italian who are exceedingly competent, well-respected, but they are male and that is a big problem if you want to be closing in on the job. nick, how im

regions like the eurozone i think the next 12-18 months is going to be incredibly difficult for mario draghiy from qe and move toward hiking rates without being a disturbing for the emerging markets. i still think we are in a volatile environment. i think central bank purchases from the recovery, but i would equities.favor u.s. nejra: in the next six months to a year, does it lend support to the bull run continuing? the second corner over 4% -- there is no growth over 3% well supported by private. earnings per share estimates have been going up. you would think if the economy slows now, we do know that equity performance and growth doesn't always go hand-in-hand. there are now people trying to find new reasons depending on how the midterm elections go. could trump consider further tax cuts, etc.. james., i'm with it is difficult to see where we get extra momentum from here. i don't disagree that maybe there are tariffs, but i see more downside risk than upside risk. nejra: a lot of people have been saying to me that the growth we see now is coming up the price of future growth. are the gains

if emerging market volatility makes central banks very nervous, imagine when the big economies, mario draghink of japan actually have a giant mountain they need to climb. it's going to send shock waves in every direction, so it's just going to take a long, long time. and i did confirm corporate profits were confirmed to be up 2.4. >> bitcoin maybe, santoli, bitcoin. then you don't have to worry about the dollar. >> is that too heavy to flip a bitcoin? >> he mentioned sonic the hedgehog i love all those coins you pick up as you're going along are those bitcoins have those been bitcoins all along? >> they're made of bits, they're computer code. >> do you remember it? >> i vaguely remember. >> i've played recently. there's all these gold coins and you pick them up and it makes a nice sound and it feels so good. >> i just know it from getting the charges from the apple store and candy crush. >> now i realize i think those were bitcoin all along. >>> let's get reaction to the gdp -- thanks, rick. so i don't know, he doesn't think the dollar is going to collapse randy anderson, chief economist of

both with respect to mario draghi with a little bit longer lag, occkuroda at the bank of japan. and it be understood because there are ramifications throughout the world on this operation. >> on that note, we've seen a sharp selloff in the turkish le lira the chinese yuan as well is there risk picking up in those economies? >> especially with respect to turkey and of course argentina, i think these are policies that these countries have to get right themselves there's nothing that's difficult here that a good policy would not be able to fix the decisions coming up for turkey are really very important right now. china's is a little different. they've moved to a situation where the rate has been able to move more. that is the exchange rate. but as you know, there's been a lot of discussion the last few days about what they're actually doing. but i think if the rest of the world begins to understand clearly what the fed is up to, the better off we will be. those central banks will be able to adjust more smoothly and result in a more successful world economy. again, the progress of