mario draghi moved the euro. donald trump responding to that. we have a response from mario draghi. haveonger currency would caused the ecb a lot of concern. a massive move in the 10 year. now negative. we are just 16 points away from the all-time closing high to the s&p 500. we are up 1.4% on chip stocks. also, steel and copper. that is because things are looking more positive between the u.s. and china. sayingsident of china there would be a meeting of the g20. president trump tweeting the same thing. on the other side of the coin, yieldb -- the tenure moved up and now it is back down. it is all over the place. gold futures are rallying today also. havens are rallying as well as risk assets. facebook coming out with crypto currency today. let's talk about what is happening at the ecb. mario draghi keeping rate cuts on the table. seen what has happened with the german 10 year down into record territory. the french 10 year zero for the first time. this is what mario draghi had to say earlier. further cuts in policy interest rates. they remain part of our tools. let's go to portugal

matt, dear mario draghi nobody was doing -- matt, did mario draghi know when he made the speech? he knows what he is doing, but it is interesting the way the markets reacted. you had a new handle on the euro nds dropped, so really moving markets, and if you look at the five-year, you have a balance. they had come down substantially, and that was probably the stimulus that pushed mario draghi and the ecb to make that announcement here at sentra. the interesting thing is that donald trump's tweet followed and i don't think it is wrong to say that is was ridiculed among ,he central bankers, but now they say may be the move was designed to preempt the fomc eurocut to preempt the versus the dollar, and that would lead me to believe maybe this was the starting gun of the currency wars. vonnie: the president mentioning mario draghi, saying it may be euro lower, as in stronger, making it easier for them to compete against the u.s. mario draghi makes hundreds of speeches, but we think of the whatever it takes speech, and that is what it was like today, markets completely reactive, and we

but mike is saying is that it wasn't surprising given what mario draghi had outlined this morning. ke makes one of the most important points, which is if you heard what draghi said, he seemed to already be making arguments that he has the legal jurisdiction to change the rules on quantitative easing, on what key,can buy, the capital etc. i think you may be worried that they will be challenged if they do try and buy more bonds. mike made that point, and i think it is a very strong one. to move just continue the goal posts back further and further in terms of when they are going to raise rates next, and it really hasn't helped markets. the key here is to look at the five-year five-year forwards, and you see european inflation expectations dropping, and that is what has worried mario draghi sintra.ybody here at alix: you can say the same thing when it comes to the u.s. and japan, all rolling over or staying near zero. any word on that president trump tweet that basically through some -- basically threw some shade at mario draghi, saying he was manipulating the currency? matt: i haven't

tom: mario draghi, a bombshell this morning, moving markets. ver negative yields in europe. ae 10 year germany down to -.30. marcussen, what was the room like? what was the response as draghi spoke? what we heard this morning was in some ways very reassuring. it was the well-known draghi who told us the ecb has the ability that messagend came across incredibly clearly, as we also heard from the soundbites. there are a couple of important takeaways. draghi reminded us europe needs to complete its institutional structure with the banking union , with the capital markets union, and also reminded us that running fiscal policies at the national level may not give enough of a spillover, so in a nutshell, if we have the idea german a should run a massive fiscal stimulus, that may not be enough to support growth in the euro area. he emphasizes the need for europe to have a fiscal capacity , which is something i can strongly agree with. tom: there is a heritage of ofiety general going back mathematics. have you calculated out where the size of negative i

we turn now to mario draghi. draghi: the vice president and i are pleased to our press conference. for yourof the board hospitality and express our special gratitude to his staff for the excellent organization of today's meeting of the governing council. we will now report on the outcome of our meeting. based on a regular economic and monetary analysis, we have conducted a thorough assessment of the economic and inflation outlook. also taking into account the latest macro economic projections for the euro area as a result, the governing council took the following decisions in the pursuit of its price stability objective. we decided to keep the key ecb interest rates unchanged. we now expect them to remain at their present levels, at least through the first half of 2020. in any case, for as long as necessary to ensure the continued sustained convergence of inflation to levels below but close to 2% over the medium term. continue thend to principal payments for maturing securities purchased under the asset purchase program for an extended period of time passed the day when we start ra

mario draghi intent on testing the limits of ecb five.bloomberg radio and the london area. this is bloomberg. this is bloomberg. >> it is 7:16 a.m. in london. three minutes from the start of cash equity trading. we have seen a bump in global equities. fueled by trade optimism. could that take a pause? u.s. and european futures saying yes. we bounce higher today, up a base hits point. could powell say anything that drives that yield lower? what a drop we saw yesterday. year -- a fresh record low. market, a green. dubai flat. higher.ittle they might have said a date for that meeting. today, we are asking the question, what will it take to push benchmark yields below 2%. you can join the debate, reach out to us. in your bloomberg. there is talk of a big shakeup. since taking over a year ago, bloomberg german banks reporter joins us. good to have you with us. outline what exactly is going on here. deutsche bank has been in a difficult situation for a long time. the ceo came in just over a year ago and tried out a turnaround plan that did not

it seems we heard from vintage bazooka mario draghi quick recap of what he said. asset purchase program still has considerable headroom, negative rates are still an important tool in the euro area and all options have beenrt 1200tÑgo asss the interest rate were probably not going to beresolved soon.ñ also not theÑ political risk ao not be resolved soon that's why we will mosti] likely see the ecb restarting central pr thought andÑiperhaps even as sn the discussion has just started to remind you here on the ground in qintra, we wereq going to hr more from policymakers about inflation and how actually toq boosti] linflation. i get the general sense here that people don't want inflation to just be back to closÑ to 2c but they want to have an overshooting of inflation that over the median term they can say they reached their target. that's another part of the he ?r'flation in a symmetric y that means that also inflation now needs to overshoot in order medium term. with that, back to Ñiou.x >> the big quesin is people believe them when they say the target i

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

we can definitely see that bonds are priced for a selloff if mario draghi really starts to the the toolsf basket. commerzbank says draghi needs to act. a rate cut would be the best thing to do in response to a fed rate cut if it puts upward pressure on the euro according to commerzbank. from anht, we heard analyst from the peterson institute and he says the ecb does not have any more room to act in case of a run-of-the-mill recession. he says what europe needs it fiscal policy and even maybe concerted action among all of the different european governments. he also talked about high in the sky things like a european budget financed by european bonds. a long way offe but will be discussed here. nejra: while they fight the challenge of the collapsing inflation expectations as well. great to have you with us. let us check in on the markets around the world. great to have you with us. let us kick it off with you. indian equities look like they could snap their longest losing streak and more than a month. is this a turnaround or are we in wait and see mode ahead of the fed? reckon the ladder.

listen to the italian listening to mario draghi last week. the message was, i think, plentiful. the markets seem just believing of execution. -- disbelieving of execution. why? ecb oncea draghi's again has tried to get ahead of market expectations by shifting towards dovish buyers by suggesting current stimulus will be there for longer. the markets didn't expect that to happen for later until year -- into the year. but it also signals the consensus the governor's counsel appears to be resisting. that left markets underwhelmed and dipped inflation expectations, as you noted, lower. that's a concerning development. yes, global growth, growth in the eurozone and u.s. trends, but it is slowing down. momentum is there. we've had a global business cycle since the middle of last year. that means disinflation pressures are on the rise, led by china, so such a banks will have to react. i think the controversy here is while the market prices and four -- prices in four rate cuts, the eurozone is so much more vulnerable to global trade disruption, global risk, volatility in how yields -- man

i think mario draghi may be right. there is some ammunition and he can use it. bout the struggle between brussels and rome. how do you expect this to work out? draghi made a plea for more fiscal action. rome is trying to expand its spending, it's budget, but it can't because it has run up against the rules. saying theyconti will obey the rules but they need to be changed and i felt like there was a push on the ecb as well. guntram: mario draghi said countries that have fiscal room should act, not there ones -- not the ones with their backs against the wall. emphasized juncker that the rules are interpreted flexibility already. it is not the rules that limit italy, but market pressure. italy has through its confrontational stance, increased spreads by 100 basis points, which is bad for the italian economy, which is undermining their recovery and which is limiting italian fiscal space. italy has to send strong signals it wants to do the right thing. the structural reforms, and then they will have the fiscal space to act. wolff, theam director of bruegel. tom: matt

the end of mario draghi's tenure as ecb president is now insight. orm as head of the central bank, draghi pledged to use all of the tools at his disposal if the euro area economy takes a turn for the worst. >> in the absence of improvement such that the sustained return is threatened, additional stimulus will be required. we will enhance our forward guidance by adjusting its bias and conditionality to account for variations in the adjustment path. i just said a moment ago that we are ready to use all the instruments necessary to deal with this mandate. and we do not target the exchange rate. further cuts in policy interest rates and mitigating measures to contain any side effects. looking at a broad variety of indicators, we see the path of -- have to inflation is slower than expected. >> we will use all the flexibility in our mandate to fulfill our mandate. anna: that was mario draghi, speaking at the form. let's get to our guest, chief economist for ing germany. youcaught offguard where buy the extent of the dovish commentary? does it surprise you?

lower interest rates as mario draghi remains proactive. facebook dives into crypto teaming up with other big players. we will chart there cap to a digital currency. what it means for the dollar and for the crypto startup scene. here in the u.s. it was wide optimism that trade tensions could be the escalating. up 1%. 500 most indices gaining at least 1%. we had energy being a big gainer. there are expectations that opec and its allies will meet soon in order to decide on supply. we also had the ecb strengthening the case for potential action if needed. that sparking optimism among investors. the focus this week will be on what the fomc does. be looking at others deciding on policy this week. u.s. futures not doing much. let's look at how we are shaping up for the markets in asia. >> stocks could be heading for a higher open. nikkei futures have stalled in chicago. we will be watching reactions for the downgrade on apple's outlook. buy moreying it will components from asia. we have kiwi bonds and focus today. let's check in on first word new

mario draghi wakes up the market. yields plummeted record lows as the ecb president says rate cuts are still a tool if the outlook worsens. ceoill hear from the vimeo about what she is watching as federal regulators take of antitrust and privacy investigations. bloomberg releases its latest new energy outlook. what will the global energy sector look like as far as 2050? all that in the next 30 minutes. taylor riggs is with us halfway into an interesting trading day. we are paring gains. taylor: i will still think mario draghi or green on the screen. every major sector within the s&p 500 is in the green except for a few of the interest rate sectors. it is all about tech, industrials, health care, the more risky sectors leading the gain. speaking about tech, it is all about the chipmakers tracking of the trade fight, up 4% today. as we talk about big tech, i wanted to look at market cap versus people waited. ,arket cap within the s&p 500 clearly the upper former today. some of these large-cap companies are leading the g

the euro president, mario draghi saying that more stimulus there could be on the way.ederal reserve kicking off its two-day meeting today. we'll break down the big money impact on both these stories >>> later on, at&t's warner media closing in on a multimillion dollar deal with one of hollywood's most bankable directors. all the details when we come back applebee's new loaded chicken fajitas. now only $10.99. the first survivor of ais out there.sease and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum. in't easy. 12 hours? 20 dogs? where's your belly rubs? after a day of chasing dogs you shouldn't have to chase down payments. (vo) send invoices and accept payments to get paid twice as fast. (danny) it's time to get yours! (vo) quickbooks. backing you. >>> welcome

and economic reform and central bank risks are all on the agenda at the conference in frankfurt mario draghi speaking out in a few moments time and we'll hear from christine lagarde expected to start talking around 10:30 european central time. i think mr. draghi already started talking. >> we're getting a few flashes from mario draghi. he is speaking at the central europe eastern conference in frankfurt. he's saying that institutional quality is still below the euro area average and all central eastern european economies and they need to find a way and let's hear more from the man himself. >> the european union as a whole. but there has been a clear difference in the pace of convergence. countries that have joined the eu and which are hereafter reffed to the central and european economy reached capital levels of 70% of the eu average. within this group, the countries that have joined the euro area have grown even faster reaching at almost 80% of the eu average. in contrast, catching up has been in the economies outside the eu with income levels below 40% of the average of the 28 members of t

investors and economists are looking for a signal mario draghi will deliver a last burst of monetary support for his -- before his term ends. joining us is maria tadeo. great to have you with us. just how dovish is draghi likely to sound to? the question is whether he's going to amp up the market. >> exactly. given all the tensions we are seeing play out from trade, mario draghi will likely say the risks are to the downside. that warrants a dovish tone. the question is how and by how much. we will get a forecast for inflation and gdp. the market is not expecting big changes. i'm sure you remember the european central bank cut its productions at the start of the year. -- projections at the start of the year. when it comes to the technical cheap loansround of for banks. the market wants to see the pricing. the question is whether draghi will feel he has to be as generous this time. the forward guidance, the european central banks says we will not hike rates until the could that, but change until 2020? the market is already pricing that there will be no hike until 2021. manus: a fascinat

we heard from mario draghi this morning.dent trump responded this morning, claiming an unfair advantage because you keep your currency low by weakening your monetary policy repeatedly. that is pending out there. this is one of the overhangs we will have to deal with over the next two months. it is clear the trump administration is intent on focusing primarily on china and that will be the main front in their trade initiative once they get past usmca. i don't think there is nearly enough clarity regarding our relationship with europe and the auto tariffs. there is a belief within the administration that avoiding those tariffs would be positive, especially as we head into the election cycle. but there are hardliners who want to look at different components of the automobile as possibly being another outlet or expressing that defensive view. david: the thing that triggered thisdent trump to a tweet morning about europe was mario draghi, monetary policy. he would like us to have a lower interest rate, it is here to say. mindful

mario draghi was not willing to go there. david: thank you so much for reporting throughout the day from lithuania. now let's turn back to grade in g in paris. gre i want to ask you about iran. president trump raise the question with sanctions. the that come up and what did we learn? greg: i'm not sure whether the question of sanctions. there was a long discussion about iran in the bilateral between trump and macron. when they came out, both before and after, they were trying to show their agreement on iran. the french are not naive about iran. they do not want iran to have nuclear weapons, they do not like iran meddling in regional affairs. the question is can you tackle the issues better by being inside the jcpoa or do you tackle it better being outside the nuclear accord? that is the disagreement between trump and macron. they paper that over. there was talk about the shared objectives rather than the nuclear deal itself. i do not have much details about whether sanctions give up or not. david: let me ask you to play the a

'sthleen, mario draghi comments, what does it say for the fed? the question has to be why? kathleen: we know week before last, he already said, cop the markets attention -- caught the market's attention when he said there was more that he and the ecb could do by cutting further. even buying bonds. this stepped up what he had been saying. he has been talking about additional stimulus would be required if and as downside risk materializes. the kind of risk he was talking about is the risk from global trade tensions. in fact, how that will feed its way to the global economy right into the european economy. in terms of what he is looking at, let's take a look at one of our bloomberg library charts. a couple of things came out in his remarks today that were very important. first of all, what is he worried about? he's worried about inflation. as you can see from the chart, all three of the ecb main inflation measures are at best ecb a percent away from the just below 2% inflation target, and they are not even flattening out. this is one thing he is concerned about. the other thin

that most intrigued me today about trump's interview was his seemingly positive comments about mario draghi his pining for having a draghi-led fed. would mario draghi really delivery anything that trump really wants? i know we think of mario draghi as a dove, but the situation in europe that drove those policies are a lot different than the united states. >> that is true. europe has far lower interest rates, but a slower economy. findingway of trump another way to needle jay powell of the fed. caroline: calling him our fed person. >> he said he is acting childishly. it is very personal with trump. he tends to turn things into a personal conflict, where powell is doing what he can to drain the emotion out of the situation, unsuccessfully. romaine: have you seen any evidence in anything powell says -- and of course powell will say they are independent, then people suspect is this somehow undermine or make life difficult . i'm curious if you see any difference in the effect on fed policy at all? >> it is hard to know. what is the counterfactual. joe: that is the challenge. caroline: they have

anna: are the words from mario draghi dovish or not? words starting to lose their influence? policymaker,one the head of the lithuanian hetral-bank, saying that felt the reaction in the market was overly hawkish. that was a dovish statement from the ecb and a dovish conference from draghi in the market does not seem to have gotten that -- and the market does not seem to have gotten that. the ecb has never moved away from its crisis era measures or shrunk its balance sheets at all. so if it does have to act again, how much headroom does it have? add to that that mario draghi is near the end of his term. he steps down at the end of october that we do not know -- october. we do not know who his successors will be. an a third factor is that the governing council is changing. more than one third of 25 members are changing this year. it is getting quite hard to change -- to judge how the ecb will react. matt: you lead a team in westernt focused on european central banks, but i'm sure you discuss washington as well. if the market reacted overl

guy: we are quite done with mario draghi. in frankfurt. ,ince we have an ecb meeting five-year five years have gone down. the market does not believe draghi. does he now need to deliver another one of those we will do whatever it takes speeches? christian: he could try that. part of the reason why last week's message was drowned out is that mario draghi is only there until the end of october. what we need is a joint statement of the current ecb leadership and the future ecb leadership to make a difference. we do not know the future ecb leadership yet. i do not know anything major will come out of the ecb before september. we have meetings in september. at that stage we will know who the successor is. guy: by that point, the ecb could have lost control of the situation. by then, the fed could have cut. the fed could have cut a number of times by then. does the ecb have the luxury of that much time at this point? christian: if something dramatic happens, the ecb can always act further. i think than the actions would determine h

we are going to think are you -- thank mario draghi and jay powell. amanda: one of the reasons central banks can remain so dovish is because there is this expectation that inflation will do the same. we have not seen tons of inflation. take a look at this. we got a read on dpi data. every of the eight components taking higher. you can see a divergence between the u.s. and canada. we are at 2.4% from a. the u.s. in may was below 2% at one or nine. benign.still fairly it is enough to keep our central bank on its toes about how long it will stay on the sideline. one of the stories we are watching, trade remaining in focus. ist is a report that apple at its largest -- it has asked its largest suppliers to take a look at the cost involved in shipping 30% of the supply chain production out of china. in terms of how they trade tensions play out, we have a major player saying, maybe they do not want to deal with it. this may have been the excuse they were looking for to make the move out of china. taylor: the big question for me, we spoke with john butler. he

needs mario draghi instead of jerome powell.i quite like independence for the ecb and that would be something that would not please president trump so much. you don't have to take this question very seriously. can the fed learn anything from what the ecb is doing at this point? seems,: well, the ecb it mario draghi has kind of been able to surprise the market when they least expected it. the ecb has tended to act more aggressively. it is this recognition that one policy rates are at the lower -- being more aggressive preemptively in boosting policy and boosting stimulus is perhaps the way to go. that's one of the things that jerome powell has talked about. aboutis some debate whether the first fed cup would be 25 or 50 basis points. would be 25d cut or 50 basis points. see in terms you of the dollar euro rate this year? there has been some back and forth about the possibility of a currency war. we asked the question yesterday if the g20 would be the ideal place to kick off this currency war. clearly, each side would prefer to ha

with what struggling mario draghi is saying. a lift today on the back of payroll figures but it does look -- you believe pricing in the german 10 year. there is a belief that we are heading toward some sort of policy action from the ecb. theoretically, that should be negative for the euro. not turning out that way is it? interesting set of markets. vonnie: the dollar index is down. now.right the british pound is rallying today. we got word that the nomination process is now open. the conservative party side of things. we will see who formally nominates themselves. the s&p 500 up 1.4%. month average is now 151,000. it may be puts a cut on the table. maybe sooner rather than later and that has equities rallying. bond market rallying because does the signal a recession or a protected slow down? if you look at the bond market you would say yes. 10 year at 2.06%. /32conds of a game -- 16 of a game. the pb oc governor who says there are plenty of resources at the bank in call and hinted that seven may not be a line in the sand for the

in that respect they're more eager to learn what is going to be the successor to mario draghi when he leaves the office and october. above all come back to germany was against the budget for a long time now has given up resistance why it's it all turned politically from berlin and of course there are several aspects to it one is that merkel felt that she had to give something to president they can't just sit there and say no new and new to everything he comes up with also there was a realisation that of course not enough was done after the last big euro zone crisis after the financial crisis in 2008. in the reforms in the euro zone is moving was the pace of this nail on the value so what could you do in that situation at least they want to appear as move to move forwards and that is really behind this change in attitude and this whole fight last night in luxembourg was based on a french german paper and the 2 finance ministers and now going to appear together and try to defend me get results barbara in luxembourg and only in frankfurt thank you. and now to some of the other business s

happening with our economy or what's going on overseas, the slowdown with china, and now with mario draghi talking about to slow down the growth as well? >> definitely, the comments out of draghi brought rates down here because it's relative looking at our rates to their rates. but you know, i just scratch my head and think, what are they really going to do they're talking about maybe reducing ten basis points. they don't have a lot of room to go they don't really have anything that can be a game changer for them over there. whereas thankfully here, the fed has some more room to move we still don't think they will tomorrow they don't want to be seen as being weaponized in this trade war with china or with anyone, for that matter, that any time there's an announcement of a new tariff that markets start to expect a cut and realistically, what can they really do about the supply chain issue anyway dropping rates a quarter or a half percent certainly isability going to solve that problem. >> one wouldn't think so this is what happens when you leave washington we have to break for a moment, whe

mario draghi's speech will be scanned for any hint of stimulas.e wave of protests. the june meeting begins. good indications of too much change ring alarm bells? welcome to "bloomberg surveillance," i'm francine lacqua in london. overall, central banks.

even mario draghi before he leaves in october.is almost a done deal if it continues, if it takes a bigger bite out of growth. i think it is an interesting juxtaposition for donald trump to say, yes, of course i will get a deal with the chinese. this is the most important question, because what the fed does depends on the trademark. having that interesting interview with the former commerce minister from china's, saying this will hurt the u.s. the most, they can't take it, we can take the pain basically. he's not so pessimistic as jack ma. he thinks a deal will be reached because both sides have so much at stake. it's just -- who is going to give what? we don't know. how much is this blustering? how much on the surface do xi jinping and donald trump have to fight it out? donald trump faces reelection. xi jinping has to please his constituencies as well. he has to win the trade war. he has been firing up for people to take. the pain. we will see what happens at the g20. it is great that this happens on friday before the official pro

going after ecb chief mario draghi writing, quote, draghi announced more stimulus which could come, which dropped the euro against the dollar making it unfairly easier for them to compete against the usa. they have been getting away with this for years along with china and others he also wrote european markets rose on comments unfair to the u.s. made today by mario d i'm going to call him mario d from now on. look, it's not every day you get the president tweeting like this about central bank chiefs and currencies it sort of makes you wonder if the white house is going to use this as some sort of template to go after europe and others with tariffs for uncompetitive currency devaluations. i think it would be hard to do but don't put it past them we already know the commerce department is looking into this sort of thing about whether they can go harder than the treasury department has gone after currency devaluations. by all accounts, big mac index and valuation metrics, they are devalued but european market -- >> at some point you could see tariffs on german automobiles, for example, would

vonnie: does mario draghi's anything today that moves yields?erence is more about the european institutional or financials architecture. it would be interesting -- we can all be hopeful, anything on the fiscal side. on the monetary policy side, i think mario draghi will admit what the markets are showing, which is a five-year inflation has completely collapsed. will be interesting if he can talk about the willingness of nextcb to tie the into more dovish forward guidance and that could move the yield further down. vonnie: you are saying mario draghi could force a plan on the next president? you do not think the next president will do whatever he or she wants anyway? anupam: if mario draghi, given the current economic backdrop where manufacturing is slowing up,, services are holding but inflation is clearly not where the ecb would like it to be and given the threats around trade and the global economy, you would think the macro economic backdrop is such that no matter what it should be tilting dovish. the current president can certainly introduce

whether mario draghi will put some extra stimulus. our guests are still with us. ident draghi show the markets without meeting his successor is stuck with dovishness at the market launch? >> the big challenge is he does not want to tie the hands of whoever may follow him. the market is looking for two things. the first is the sense that the ecb is pushing back the tightening they have. the second thing that we may get some clarity on is the details refinancinground of operations and how generous they are. mostis the thing i suspect investors will be looking at. if you look at central banks around the world they sound more dovish, what can the ecb do? >> i think we have reached the limit of central-bank policy. there is lots more they can do. they can do more quantitative easing. the question is how effective it might be. there is lots of academic research and we know the most effective form of monetary positive --es from putting a big pressure on commercial banks in the eurozone. based with a weak backdrop in the macron economy i think we quickly move into a world

trump also hit out at the ecb after mario draghi hinted at further stimulus for the eurozone draghi's comments prompted the euro to slide against the dollar trump tweeted a soft euro made it unfairly easier for them to compete against the usa. the president also said that europe had been getting away with this for years. >>> here is how trump addressed those twin topics, the ecb and jerome powell's position in comments outside the white house yesterday. >> let's see what he does. i can tell you that draghi and the eu, if you look at what's going on with the euro, they have a much different stance than our folks do. as you know, we did something today that was very dramatic frankly it helped that part of the world. we'll see what happens they'll be making an announcement pretty soon we'll see what happens i want to be given a level playing field. and so far i haven't been. >> annette joins us live from sintra where she continues to talk to economists and central bankers. >> it's an interesting day here and was an interesting day yesterday with a lot of surprises coming from the ecb, wh

with what struggling mario draghi is saying. the back of payroll figures but it does look -- you believe pricing in the german 10 year. there is a belief that we are heading toward some sort of policy action from the ecb. theoretically, that should be negative for the e

it was the dollar weaker day but the market wanted more from mario draghi. >> you could tell from thesive way he was going to talk what he was suggesting. there was a lot of room for him .o return to qe in the 1980's we went from whatever it takes to having max headroom, but people don't quite believe it. this time they are much more inclined to call him on it. if you take a look at inflation expectations, they are falling again quite rapidly the eurozone in a way that is very troublesome if you want to anchor expectations and move back up to 2%. you have much more of a problem there. expectations for less than 1% for the next 10 years in germany. joe: the various lovers and pumps and whatever mario draghi has to play with, it feels arcane to me and like the realm of theoretical physics. what are they going to do, nothing with the real world of the economy. is it impossible because what europe needs is not really what is on the ecb toolkit? >> you have got to bear in mind these political situations which make things difficult but i think the critical problem he has which is different

so if mario draghi is worried about those, i can guarantee jerome powell is, as well.econd thing about mario draghi, he's concerned about low inflation and falling break-even inflation in particular. again, that's very true here in the united states. the one thing that's changed materially since the may meeting is break-even inflation is lower. so draghi was dovish yesterday i think jerome powell is going to be dovish in his communication today. and i think especially the thing that watch for is how he talks about inflation. inflation has been falling, it's been too low i think ultimately, that's going to be the reason the fed will cut rates. and i think today they're going to lay the ground work for that with a focus on inflation. so that's the thing to focus on. >> 2.08% on the ten-year the dollar the other main one to watch, especially with everything that's happened already this week. it was down about a quarter of a point going into this. >> so, you know, what we think today is that ultimately, if the fed winds up with a dovish tilt, which is probably going to hap

mario draghi said, quote, there's considerable head room to ease. i just don't think that that's true at this stage but most importantly of all, the way in which last time this helped in europe a little bit. it wasn't a huge amount, it was a little bit but we're not in an environment where necessarily the euro gets that much weaker and on top of that whether trade's really going to pick up given the border trade wars that we're facing >> i think he just wanted to hear that by any means necessary, global growth is going to be intact they're going to aide to whatever it is and i think that's what the markets truly wanted to hear but if you're a shortseller, how do you short the market in the face of this you have trump and the fed you have the fed who has a number of rate cuts in their back pocket. trump has a number of positive trade headlines, which we saw one of them today. it's not even a positive headline it was a tweet it was basically, hey, this is what just happened there >> it's confirmation that they are actually going to meet at g20. >> it

mario draghi of all people knows that we cannot cut our way to get inflation. the flipside of that is to look at the economic data. is the data bad enough to warrant a 100 basis point cut like the market is pricing in? ken: in the u.s., i doubt it. the fed probably overdid it a little bit in inverting the yield curve. i believe it still gives us some leading indications of where the economy is going. but it is indicating a slow down not recession, in my view. to right size this, they have to take back one of the last few hikes. that is what we need now to get financing of inventories, bond portfolios to be positively sloped again, and not as difficult as it is with tightening liquidity. one thing i would add, i think the fed has given short thrift to changing their balance sheet activity more quickly. they had pushed forward the date they will stop shrieking the balance sheet, but the economy needs to grow 4% nominal gdp, 2% real. just stopping is still a tightening. you see it in the banking system where liquidity has tightened up excess reserves. i wonder, ra

and accused mario draghi of weakening their currency deliberately draghi hit back moments ago sayinghat he targeted the exchange rate. one of the big stock is deutsche bank also bloomberg saying and reporting this morning that the bank could replace its chief financial officer, as well a spokesperson declined to comment to cnbc on that topic, but reiterated that the bank is working to, quote, improve its sustainable profitability. shares of db now down around 9% this year. other movers, watch danish hospital and equipment company ambu which is down and watch si siltronic as well. shares taking a bit of a tumble after it issued its third profit warning this year-to-date in 20 2019 >>> let's get a news update. for that, we'll go to sue herrera over at hq >> good morning, carl. good morning, everyone here's what's happening at this hour iranian president hassan rouhani says his country is not seeking to wage war against anyone but at the same time, he stressed that it will withstand mounting u.s. pressure and emerge victorious. this during an event inaugurating a new terminal at imam kh

today's action largely driven by what we got out of the ecb and out of mario draghi. it did have an effect on the market a little earlier on. on this chart here, the white line is the stoxx 600. this is the reaction as soon as draghi starts speaking. stocks go lower, and they stay down. the dax bouncing off its 50 day moving average, and that provide a little bit of a reason for that resistance level. the euro picked up a little bit, but you have to remember that the market is pricing cuts already from the ecb. draghi didn't go there today. he hinted at it, but he didn't go there today, as a result of which we did see that euro strengthening. there were certain members on the governing council that did talk about the idea of cuts being appropriate and starting qe. stocks down, euro a little bit higher. vonnie: of course, that euro higher has the dollar index actually below 97 today. we are at $96 90 four cents right now. let's have a look in the s&p 500 . -- it isto tens of 1% up to tenths of 1% -- it is up 2/10 of 1%. 77% sincellied december, and morgan stanley says

mario draghi mated statement early this week. vonnie: does that compare the fed chair to be even more dovish than he might've been if mario draghi was out of the picture this week? so.: i don't think statement was perhaps the most significant of tenure.ear -- of his the markets were surprised that he indicated that ecb would not be constrained by the limits, the governing council had put on itself in terms of the thatntage of bond issues, it could buy, so mario was in essence saying whatever it takes all over again. i don't think the fed has any intention of matching that sort of rhetoric right now because they are not even convinced that we are headed towards recessionary conditions. powell making a clear he has every intention of serving his full four years. will that happen? benn: i would be extremely surprised if president trump were to push this beyond the level of rhetoric. there is really nothing in it for him. i don't believe he has the legal authority to remove chairman powell. i think chairman powell's reaction has been

tariffs and trade are what moves things here's mario draghi at 4:30 in the morning our time talking about more stimulus potentially coming markets up 15 points here's president trump saying he's going to meet with president xi this is 15 points, another 15 points that's how you move up trade and tariffs and anything from the federal reserve we had emerging market etfs all up here. china, south africa, brazil, turkey, all up nicely. here in the united states, trade-related names. i'm talking about semi-conductor stocks like micron, example, all the steel names, ak steel, all up rather noticeably dovish central banks is the big story, and it's not just draghi. draghi was saying those asset purchases they did a few years ago, they have considerable head room, they're going to buy more stuff. that's what draghi is basically saying australia's central bank cut a while ago, they said more likely than not they're going to cut more central banks are dovish, not just ours. speaking of ours, they have to thread a fine needle at the federal reserve tomorrow are they going to get ahead of what they p

you had trump treating to mario draghi about not weakening the to mario draghi about not weakening the euro. guy: we will wait to see what f the central bank low signal, will it be a willingness to cut rates, maybe not today, maybe the next few days? mas,ing us is charles du chief economist at ts lombard. what do things are chance is the fed comes out in signals that the market is right, we need to lower significantly and get on board with this idea. a big fed rate cut is on the way? generally, we: see that the two year yield is the best forecast of where the fed funds rate is going. there is every reason to expect that there will be cuts to that amount. that weent position is think it is one cut in july and one in september, but i would not be surprised by 50 basis points in july. best fedious fade cut= cuts have started in july with 25 points. what are the chances of it being a big bank 50 basis points first up? trials fish i think it is more or less 50-50, and even chance of both. charles, can we cut our way into inflation? will it work? charles: no, i think efficient targets are a

president trump says he'd rather have mario draghi running things than jay powell.ole of politics and economics in the fed's rate decisions next with austan goolsbee. live from new york, this is bloomberg. ♪ david: you're watching balance of power. i'm david westin. fed watchers had plenty to decipher yesterday. jerome powell and james bullard oath made headlines, striking different tones in what they said. >> so much of what happened happened in the few weeks before the last minute. act preemptively and not let a downturn gather steam. >> i don't think the situation really calls for that but i would be willing to go 25 sitting here today. david: here to take us through it all is austan goolsbee. an economics professor at the chicago booth school of business. talk about what we just heard from jay powell before we get to mr. bullard. rushys we are in no big but we need to be preemptive. by definition, aren't you preemptive only if you move early? >> yes and no. the first thing is we should start with what chairman powell said. chairman matters way more than any regi