i am nejra cehic. this is bloomberg. francine: nejra cehic there.hree of uk's largest real estate funds -- in the wake of the vote to leave the eu. joining us is neil canavan. show also look up to the marie owens thomsen. thank you for joining us. neil, thank you as well we are talking contagion. three of the funds had to close because of reduction. >> panic spreading among retail investors because the reader cross on monday is it will not be sprang to us. yesterday, maybe we'll have to look again. 20% liquidity in the fund, it looks like -- we have been trying to get enough of the energy -- and energy on it 7%. owningey were doing is real estate shares. theirthe brexit vote cut ability rapidly. francine: how ugly can this get? people are afraid because if it go back before 2008, lehman's went down. neil: real estate is a function of the economy. the economy was in a recession, that is not good for values. foreign investors have been putting out which leaves a smaller amount of buyers for what comes on the market. it is going to have a reader cross

nejra cehic: i'm nejra cehic. lisa has more.examining the withdrawal from the european union. it says parliament should scrutinize informal discussions, withdrawal accord and negotiations on a new relationship. earlier today, john brown says the business is still coming to grips with brexit. sector isancial waiting to see what will happen to pass boring -- past board -- passporting. they will live with it until they realize they have to do the best they possibly can given the circumstances which of occurred. told thems hollande theresa may has a choice. immigration or lose access to the single market. in turkey, the president is already signaling that the newly imposed three-month state of emergency may not be long enough. he told reuters there is no optimal to extending emergency rule. as the government to detain suspects for longer times without trial, and issue degrees with the rule of law. turkey's news agency says more than 10,000 people have been arrested in the wake of the failed coup. russia,s from the u.s., and the u.n.

nejra: good day.onald trump has told supporters he is going all the way after securing the nomination. the tycoon's a son made the announcement at his home state of new york. trump supporters are looking to get the convention back on track after an opening day rocked by questions over whether melania trump plagiarized her speech. the turkish lira is close -- is trading to an all-time low as the purge of the country's institutions deepens concerns about the fallout from last week's failed to. appeared to visa central bank lowered its overnight lending rates by 25 basis points to 8.75% yesterday. pimco has named emanuel roman as its next chief executive. -- a plunge in assets at the firm. roman has been ceo of man group, publicld largest traded heads fund -- hedge fund. --n is restoring a return to iran's economy minister whose ministry is at the forefront spoke to bloomberg. >> right now, the groundwork for iranianbonds in various debt securities in international markets exists. the situation will impr

nejra: the u.k.aw a dramatic deterioration in the wake of the brexit vote as business activity shrank. that is according to a market survey. pmi data combining flash estimates of services and manufacturing slumped to the lowest since april 2009. the findings suggest britain risks falling into a recession. the economy on course to contract in the third quarter. vodafone is higher after it reported first-quarter service revenue that beat analyst estimates. the money it earns from customers' monthly phone bills and network usage not including handset sales rose 2.2% amid gradual improvement in european businesses and growth in developing markets. boeing expects to report a $2.1 billion after-tax accounting cost for the second quarter as it absorbs expenses from programs with well-publicized stumbles. the biggest losses related to the dreamliner. the company also reported hits jumbo and a8 refueling tanker for the u.s. air force. manus: thank you very much. vodafone has reported results and it says growt

nejra: i am nejra cehic. you're watching "bloomberg markets."t is time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. hasnior manager at hsbc been arrested in new york for his role in a conspiracy to rate currency benchmarks. thmarch off and as the first person to be charged in the justice department's three years investigation into foreign currency rating. igging. this is after five banks were found guilty. hsbc was not one of those banks. the unemployment rate in the u k has dipped below 5%. to british jobless rate fell the lowest since the third quarter of 2005. the number of people working rose to a record almost 32 million. that is your business flash. vonnie: let's head straight to the markets desk where julie hyman has the latest on some movers. julie: looking at some travel stocks right now. united continental is out with earnings, so we have been watching the shares. their hang onto a gain of 3% right now. second court of profits beating estimates. they saw a drop in operating cos

nejra: thank you for joining us.onnie: corny collins has more from our newsroom. -- courtney collins has more from our newsroom. courtney: christine lagarde will have to stand trial from her ase stemming from her time finance minister. hillary clinton may announce her running mate the a text message today. that is according to a person familiar with the plan. all eyes are on virginia senator tim kaine as a likely choice. the obama administration have been advocating for cain. he was also in the running in 2008. bill clinton is also said to have favored cane -- said to favor cane. is also seen as a top contender. donald trump vowed to steal off the border -- mexican president penn? is at the white house to speak with president obama. are expected to discuss border security along with trade and drug trafficking. they will be holding a news starting at 11:45 eastern time. -- poweredprinting by 2600 analysts and journalists in 120 countries. nejra: let's move to the pound now, which is falling for the fourth week against

nejra: general motors is running on all cylinders.e automaker posting a record second-quarter profit of $2.9 billion, beating analyst estimates by a huge margin. it is also raising guidance saying it will make as much a six dollars per share. a stock is up on the news, 3.1%. cfo chuck stephens spoke about the result earlier on bloomberg. >> we had outstanding results in the second quarter. really driven by strong performance in north america. another record quarter for north america. 3.6 billion in profit. continued strength in china. continued strong net income margins. profitability in europe. nejra: for more on this let's go to bloomberg auto reporter keith norton. you heard the comments from the cfo, outstanding came up more than once. were these really outstanding results and why? keith: they were. absolute record for general motors. they have focused on profitability and that has helped them. they are doing very well in north america. that is where the bulk of these profits come from. they improved throughout the world. it very

nejra cehic is with me. nejra: good day, manus. turkey has imposed a state of emergency as the government pursues those responsible for a film to recoup. -- for a failed military coup. since the attempted coup collapsed on saturday, thousands of army officers, judges, and prosecutors have been detained. uk prime minister theresa may travels to paris today to meet france le monde. -- francoise lalonde. -- hollande/. theresa may says that won't happen until next year. >> i want to work with chancellor merkel and my colleagues in a constructive spirit to make a sensible and orderly departure. all of us need time to prepare for these negotiations and the united kingdom will not invoke article 50 until our objectives are clear. this will not happen before the end of this year. nejra: hsbc's global head of foreign exchange in london, mark johnson, has been released on bail after being arrested. u.s. authorities allege johnson was involved in a friend running scheme involving a $3.5 million currency transaction in 2011. his lawyers said t

let's get to the bloomberg first word news with nejra cehic. nejra.he international monetary urging china to deal with its corporate debt. the issue is manageable is -- if the country moves quickly. executiveank of japan director says the boj will need to reduce the pace of its -- as it approaches the limit of the bond market. the sequel -- the central bank is aware of it. still governor harry vito corleone says he will expand stimulus if needed to reach his target.tion the ubs workforce is the right size after thousands of job -- thousands of job cuts in recent years so says the division president. he spoke exclusively to bloomberg. >> at this point in time, i think we are exactly where we face the to environment that we have, to face the regulation that we have, to face the forces that we have. now, at this point, our challenge is to execute correctly when we have in front of us. the firm is very much focused on doing so. nejra: the euro group is missing calls to proper -- to public money to prop up banks. burdened by 306 million euros of nonperform

this is bloomberg. ♪ nejra: live from london and new cehic.'m nejra vonnie: s.a.p.orded that their second quarter beat analyst estimates, largely based on the company closing more software deals. shares were up earlier today and the ceo spoke to guy johnson and caroline hyde. companysked how the avoided -- avoided the negative effects of the brexit vote. >> we saw double-digit growth in our software sales and operating income. very pleasing and sap is position like no other in our space. we look at the real-time information on the pipeline, we a very robust and ever-increasing pipeline for our technology. what is interesting about exit specifically, just like the greek debt crisis or the china growth issue, our software 10 to be very resilient and choppy waters because business executives start thinking a lot about their customers, their channel strategy, their inventory levels and supply chains, their financials and real-time data to make smart decisions. architecture is right in the center of helping them solve those problems, which is why we tend to be resilient.

here is nejra cehic. nejra: we are seeing a lot of moves in italian banks.st performers are a telling banks. i have highlighted this one. last i checked, it was the best performer, up 3.8% at the moment, this after some news crossed the bloomberg that the italy finance undersecretary has told the media italy is considering boosting a fund. "la republica" reported that atlante is to be recapitalized with at least 4 billion euros.we are seeing a lot of moves and italian banks. in terms of other corporates,, noss group, -- corporates, temenos group, one of the best performers. it has a new contract with standard chartered. it's been selected for deployment in more than 30 markets, a specific wealth sweet -- suite. that is gaining off the back of that. jvc, some headlines crossing the bloomberg, notification of transfer to a premium listing in a packed with cerberus to extend 2018 and alsoto plans to refinance the facility before the existing maturity date. this also, one of the best performers. guy: let's talk about what is happening in south america. brazil is

here's nejra cehic.ra: -- after an outage that started at 11:38 a.m. local time. it was caused by duplicated trade confirmation messages. it is the least that's it is the second malfunction in the past year. it was a two hour destruct -- disruption. volkswagen's plans to recall cars in the week of the emissions scandal has hit a costly speedbump. california regulators have rejected the proposal to fix its bw, audi as "incomplete and ." thentially insufficient german company has already reached a $603 million settlement with 44 u.s. states. loss santa is looking for alternatives after rejecting a takeover from bayer. the company has revived talks with germany's bss about a possible -- no final decision has been made. that is the bloomberg business flash. mark: patrick carcass says the u.s. economy should not sustain much damage from the brexit vote. hikeid more than one rate may be warranted before the end of year. >> i believe inflation is true to target sometime next year. considering the projection, th

let's get straight to the bloomberg business flash with nejra cehic. nejra: u.k.akers face a post-brexit future. as a decision to leave the eu hits dealmaking and threatens the entire cost of moving staff. job cuts are likely this september if client activity does not pick up. that is according to multiple banking executives who asked not to be named. trading in itsd real estate fund. it is the strongest signal yet that the turmoil from the brexit vote will hit the property market. the suspension -- will be reviewed every 28 days just as the value of the underlying assets by 5% last week. trading of shares has been halted after falling 7%. they comes as the italian government is said to be considering injecting fresh capital into the troubled bank. according to a person with knowledge, they produced the -- ahead of stress test results. that is the bloomberg business flash. francine? francine: reports of the capital package comes after shares in the bank were suspended this morning. that is after they filed another 7%. let's continue the conversation -- also with u

let's get their first word news with nejra cehic. nejra, good morning.ejra: john kerry says the u.s. is awaiting a formal extradition request. state calledetary for evidence that would stand up in court and dismiss any accusation of u.s. involvement in the uprising as irresponsible. shares in arm holdings have soared after softbank has agreed to buy the company for 42.3 billion pounds. just connected devices in the home. it would be the biggest takeover for softbank which has become one of japan's most liquidity of companies. president obama has condemned the murder of three police officers and a shooting in baton rouge. a suspect has been killed but did not confirm the details. two weeks ago, baton rouge police killed and african-america man that set off -- african-america man that set off protests. global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. manus: the turkish lira is rebounding. it has recovered 50% of its losses. that triggered the currency's steepest -- since 2008. stocks have opened lower. our middle east ma

let's get to the bloomberg business flash with nejra cehic. nejra: u.k.ustrial producers are on course to post their first positive quarter in almost a year. that after output shrank by less than economists forecast in may. output at factories fell 0.5% following an upwardly divide in 2.1% surge in april. economists have predicted a 1% drop. for more u.k. property funds have frozen withdrawals as .nvestors seek to dump holdings henderson global investors, columbia threadneedle and canada life have suspended trading. aberdeen fund managers cut the value of a property portfolio by 70% and briefly halted -- by 17% and briefly halted production. on is set to buy whitewave foods. that represents a premium of 24% of whitewave 30 day closing price. targeted sales growth of more than 5% by 2020 with half of its business king on that skiing in on consumers. -- keying in on consumers. samsung -- bolstered by demand for his galaxy s6 smartphone. the world's largest maker of phones and memory chips made $6.9 billion. the results underscore how the south korean compan

nejra cehic is here. good day, nejra.ejra: in a rare public speech, melania says -- she -- says he is tough when he is to be. inspiration from a surprising source, michelle obama. her speech strongly echoed the first lady's own words at the 2008 democratic national convention. the trump campaign issued a statement. reelecteds newly prime minister and his cabinet have been sworn in and camera. he reshuffled his team after the the ftseection when 100 bull run is heading for a reality check. uk's benchmark will end the year down 7% according to the bank itch is the most bearish says the promise of central bank stimulus will give way to harsher economic realities after voters decided to leave the eu. a teenager armed with an ax and a knife injured four people on a train in southern germany for .eing shot by police authorities say the assailant was a 17-year-old afghan but the motive has not been established. global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. cehic.jra this is bloomberg. manus

let's get the first word news with nejra cehic. nejra. nejra: a peaceful demonstration in dallas, texas, turned into an ambush pierce clippers opened fire killing five officers and wounding others. arrested.le have been there are media reports that a fourth suspect who had exchange gunfire had killed himself. british prime minister david cameron heads to his first major summit since the country voted to leave the european union. in warsaw, he would make argument that britain is still relevant to its allies. he will pledge more than 3500 troops. some will be deployed in eastern europe. may says it issa time for her to make the case to the nation why she should be the next prime minister. she and andrea leadsom will face off in a battle to succeed cameron. ballot the second round nationwide. global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. i am nejra cehic this is bloomberg. tom: very good nejra. commodities, two days in a row, a great fragility on what is clearly a better day. a lot of this waiting for t

tom: let's go to nejra cehic. nejra: quarterly sales were better than expected at burberry .in the u k bought more trenchcoats in the final weeks of june. burberry shook up at you management ranks this week replacing the ceo. the fund that was once the biggest investor in volume -- in valeant has gotten out. has gotten out. that is the bloomberg business flash. francine: the french economy minister is keeping france busy. fenbywith us is jonathan and roush ruchir sharma. share -- ruchir sharma. jonathan, if he were to run for president when he win? jonathan: he would have a chance if he can get into the second round of the presidential election. he does not have a machine or a party behind him. he comes from the socialist government but is -- his most fervent opponents are in the socialist party so he has a long way to go. france has a habit of finding providential nights in white horses who look good and then fizzle out because they have not got the basic backing. francine: it goes to the heart .f what europe well be there was always the triumvirate of the u.k., germany, and

nejra: we're seeing european stocks retreat from a three week high.xx 600.th french stocks falling following that deadly attack in nice. let me show you how different industry groups are performing on the stoxx 600. keeping an eye on travel and leisure. they are some of the worst performers, down .9% at the moment. looking at individual stocks on our mrr function on the bloomberg we could see thomas cook down 3.8%. europe's biggest hotel company 3.3%. down. and easyjet down more than 3% as well. those travel stocks are seeing an impact from that attack. then, also, i wanted to look at swatch. there is concern over luxury sales slowing. that slowing being increased further after the deadly attack in nice. so, not a great day for swatch to say that first-half profit fell by half. the most in at least 15 years, as demand for his watches in hong kong, france and switzerland collapse. you can see this drop at the open. it stayed low. down 10%. the shares have hit their lowest since 2009, falling 13%. one analyst says shrugging proper literally -- shrinking

nejra: data out of japan shows another lackluster month.trial output fell and retail sales and household spending stagnated and inflation fell 0.4% from a year before. manufacturers confidence health study, although the survey was almost wrapped up by the time brexit turmoil of merger china's manufacturing sector treaded water in june. the pmi fell to 50. the services sector, it continues to improve. the official grace rising to 53.7. the justice secretary michael toe is set to make his case be britain's next prime minister after he betrayed boris johnson who pulled out of the race yesterday. now his sites are second on the home secretary theresa may and three other candidates to head the conservative party and the country. global news 24 hours a day powered by more than 2600 journalists in 120 countries. this is bloomberg. francine: thank so much. -- thank you so much. let's head to mark barton for your asset check. mark: the three-day rally before today was 6.8%, the biggest three-day rally since 2011. the six day drop from friday his 4.5

nejra?ra: turning to the mornings ecb decision, mariota raw says he's ready to move in the -- mario draghi cities ready to to move.aid he' sready great to have you. no surprises from the meeting today, but what are you expecting now beyond today's meeting? awesomenk today was an kind of meeting, but september will be key. it brings into focus the end of the program in march 2017. it gives time to think about the changes are different parts available today once they come to september. there was a feeling that brexit, they push these things forward. i've got a chart here on the bloomberg, if you take a look. it's showing the german government bond market liquidity index. what you can see here is this line. this is right around the time of brexit. basically, the higher the index, the bigger the divergence from bond yields from their values expected to rise from bloomberg's fair value model. i want to get onto the theme of the scarcity of bonds available to the ecb. what are the best options for

there is nejra cehic.ries has agreed to buy nor tech, an american company that makes ventilation fans. 38% premium over nor tech's price yesterday. revised its smartphone business. now the south korean company may boost capital spending for its display and semiconductor units. samsung reports earnings tomorrow. shares were up 17% this year following the success of the galaxy s7 phone. the time high minister has agreed to a deal with a chinese group. berlusconi says the condition is that the buyers invest $444 million. that is the bloomberg business flash. thank you so much. american politics -- ian bremmer is with us on the latest follies. we all were riveted by james comey yesterday with the federal bureau of investigation with secretary clinton. does this derail a presumptive president? does it derail hillary clinton? it she probably would were running against a well and normal republican candidate. it probably does not against donald trump. if you do not like hillary because you find her in authentic, u

here is nejra cehic. nejra: in france, it is the seventh deadly attack in the last 18 months.eople were killed in nice when a truck loaded with weapons, including hand grenades, drove from one and a mile along the boulevard pact with bastille day revelers. in paris, francois hollande says his country is at war with terrorism. hollande: this attack has all the elements to be called a terrorist attack, once again of incredible violence. it is clear we have to do everything in our power to fight this terrorist plague. nejra: he has extended a state of emergency for another three months and will deploy 10,000 members of france's security forces. the attacker has been identified . world leaders expressing dismay, sadness, and solidarity with france over last night's bastille day attack -- president obama condemns what he called "what appears to be a horrific terrorist attack." china, germany, belgium, and india, among other nations condemning the violence. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries, i am nejra cehic. th

let's get to the bloomberg first word news with nejra cehic.heir mark carney begin two-week pilot -- there today policy meet later. and are expected to cut that is the first time since 2009 according to a majority of economists. 30 of the 54 people pulled predict a 25 basis point cut to 0.25%. japan's chief cabinet secretary has denied a report that officials are considering introducing helicopter money. that comes after the newspaper said the policy is being mode and a boost to the economy. -- mode in a boost to the economy. the currency would weaken if japan took such a step. japan's biggest bank is quitting its role as one of the 22 binary deals -- dealers -- 22 primary dealers. it is the first financial institution to withdraw since the central bank introduction of negative interest rates this year caused yields to tumble below zero. saysse premier leader beijing can achieve its growth target of 6.5% through continuous reform and innovation. he was speaking at the eu china business summit. sownid chinese economy has -- shown great resistanc

nejra: u.k. chancellor of the exchequer george osborne has set a goal of lowering the the corporate tax rate to 15%. he accepts the result of the e.u. referendum and wants to mitigate the economic impact of brexit. u.k. construction unexpectedly contracted at the fastest pace since 2009 in june. thepmi slid to 46 as impending vote on britain's european union membership stymied residential voting. standard & poor's estimate a 0.8% hit to eurozone gdp in 2017 and 2018 in the wake of the u.k. brexit vote. it also predicts that britain will barely escaped a fully fledged recession as it sees a 1% drag on gdp next year. this will mean the bank of england will have to restart its q.e. program. an increasing number of economist for the chinese banks will receive a government bailout within two years. standard charter and commonwealth bank are among nine of 15 respondents in a survey to say they expect the move. the majority of those asked believe the cost of recapitalization will exceed half $1 billion.

nejra has the three top ones for you. nejra: thank, caroline.arting with one of the biggest gainers on the stoxx 600 today. roup finance g ministers meeting in brussels to discuss the italian banks. this is following a rally on friday after the company said on july 7 that it was working intently with authority to quickly resolve its bad loan burden. italy is in talks with the european commission on a plan to recapitalize montepaschi. that is gaining. irupp.aining, thyssenk there is a possible joint venture in europe. this is after reviewing vids obs the u.k. as a charter had been planning to sale. gaining onkrupp that. and one of the worst performance today is rolls-royce. it has agreed to purchase the stake it does not already owe for 720 million euros. this is to strengthen his position i -- this is to strengthen its position in the service market. caroline: thank you. the finance minister from france is talking about the italian banking deal we're looking to see in the new few days. the eu needs to show "solidarity." the bank aid rules need t

nejra: yes, that was one comment from an analyst. the analyst says it takes time to sell commercial property to meet withdrawals. the cash buffers are being eroded by investors heading for the door. as you said, this started on monday with standard life suspending trading in the commercial property fund. that was followed by aviva yesterday. these are funds that together, total my .1 billion bounds -- total 9.1 billion pounds, or almost $1 $12 billion. just to give you a bit of a sense of scale of that 9.1 billion pounds, according to the investment association, about 24.5 billion pounds is allocated for u.k. real estate funds. manus: beware people are beginning to use is systemic, and whether this has become a full-blown crisis. what is the difference between now and 2008? nejra: there certainly are echoes from 2008 and that is because during the financial crisis, real estate funds were forced to freeze operations when withdrawals surged. that contributed to a property market slump that thought values dropped 40% from their peak in

nejra: i wanted to start by show you the stocks ixx 600.ed now after this benchmark had its biggest rally since february. but let's have a look at how the individual stocks are performing because some of the best performance today are precious metals, miners. only assume is because of the rally that we are seeing in silver and gold. silver topped $21 for the first time in two years. it's outpaced gold this year. some see it continuing to outperform until the turmoil from brexit subsides. we're seeing gold up for a fourth day. assets in gold etf's at their highest since 2014. some of the worst performers are italian banks. down some 7%. we're seeing banco populare, well. san paulo down as it received a letter from the ecb on nonperforming loans. it was asked reduce these over three years. was asked to bring the npl ratio to 20% in 2018. it has to percent this ratio -- to present this plan by october 3. we are keeping a close eye on italian banks. also, keeping a close eye on the ftse 100. this is your today. this is where we had the plunge a

nejra: that is right.xtending, aberdeen into monday this freeze on assets to give investors more time to reconsider. the ceo said the feedback to the approach has been positive. aberdeen is one of seven u.k. property funds worth 18 billion pounds, $23 billion. those are frozen assets in the wake of brexit on concerns about commercial property. what aberdeen has done is that it cut the valley of a property fund by 17%. it did suspend those redemption so investors to ask with a moneyback have time to reconsider. that has been extended until monday. this is, of course, over the concerns of commercial property. commercial property values could fall by as much as 20% in the three years after the u.k. leaving the eu. was legal andhad general say that it was adjusting the value of the property fund by an additional 10%. that is the latest in terms of commercial property. we're keeping a close eye on any other asset freezes the might come after this. thathas happened here is it is temporarily halting the sale of i

gold is glistening, isn't it, nejra? nejra: all that glistens is gold, guy.chart showing that global gold e.t.f. holdings have topped 200,000 metric tons for the first time since july 2013. these are the bars that you see sing along with the gold price e.t.f. holdings have risen 37% this year. now this amount that we're looking at above 2,000 tons is larger than the gold reserves held by china which is the world's top consumer and also a consistent central bank buyer in recent months. a number of things have of course contributed into this gold. to we have a prospect of further fed rate hikes being pushed further and further out. for all of this as well, it seems to have led u.b.s. to have said that gold has likely entered the early stages of the next bull run. guy? caroline? guy: do you believe we're in the next bull run of gold? >> i've been long gold since q 3 last year when we saw we were going to go to negative interest rates. guy: price target? >> no price targets, as long as it is going up the policy remains the same. guy: ok. caroline: i want to have

nejra joins us. nejra: anna, yes the asian stock rally losing steam.u look at the pacific index, up just some 2/10 of 1%, heading for its smallest gain so far this week. this after rallies in the u.s. and europe stalled last session. now one area where we do have some certainty is of course in terms of u.k. politics. we know what a lot of the cabinet will look like, of course as you have been talking about the most controversial appointment being boris johnson as a foreign minister. we saw sterling fall left session, rebounding today. not only that, but i have this chart showing three months implied volatility on sterling. this is where it takes a seven-year high in the weeks before brexit, coming down since we are now near the lowest since march on this sterling volatility. and this of course ahead of the decision from the bank of england later as well. which we should also talk about at length. now investors as you say still waiting for details on japan's stimulus plan. the big issue is around the possibility of helicopter money. we still do not have

let's check on the details with nejra. nejra: yesterday we saw green across the board on this imap.ng at a little bit of a mixed picture with the industry groups, a bit of softness coming into equity markets in europe after the risk appetite in the asian session. and u.s. consumer discretionary, leading. and leading the losses, we have telecoms down .3% and financials down .2%. let's take a look at how the gilt market is opening up. we do check this every morning. we are at 0.79% on that 10 year yield. i don't know why britain is there twice, just to emphasize the point, i think. it looks like we are up six basis points on the 10 year yield here at the open. then, let's take a look at the three stocks we are watching today. there is a lot to watch today. i have just pick three. this is not a comprehensive look at the market. have numbers coming in -- we had numbers coming in earlier this morning. margin remainsth unchanged. it is maintaining its program of reinvestment. it is indeed opening higher come up 3.8%. it was alsothen, being called higher. it looks like it is slightly up th

nejra has the very latest. we look at the msci asian-pacific index, troubling to call this again because we losses as0 of 1%, much as 2/10 of 1%, so little fluctuation in the markets. the overall theme is some risk aversion. we're continuing to see the brexit fallout, four more property funds freezing withdrawals. celestica look at the same havens. yen rising against the dollar for third day, we are at 100 .89 on dollar-yen. all this is about money moving into the safe haven, but it is also about dollar weakness following the fed minutes. and effect one thing to do are saying is that the treasury yields are actually the biggest driver of this dollar yen trade. and we know the 10 year has hit record lows this week. and we are looking at another state haven, gold. the prices of two-year high, above $1000 and outs. but also gold holdings and also topped 2000 tons for the first time since july 2013. 30%,olden's have risen gold has likely entered the early stages of the next bull run. and finally i want to just look

let's check in with nejra cehic. nejra: the u.k. has its first brexit czar, david davis.e more formally known as the secretary of state for .xiting the european union he was one of theresa may's first appointments. he is the former minister of state for europe and is a prominent eurosceptic. or missing to take whatever measures needed to shore up the british economy. hammond said the number one challenge is to send signals of confidence to the market, businesses, and international markets. in japan, shares of a printing company rose after reports they want to advocate. japan uses an imperial calendar. it is called the 28th year of -- 28th year of the reign. news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. nejra cehic, this is bloomberg. tom: we thank you for the comments in the quality of our those guestsne of has been olivier blanchard, formally with the lagarde international monetary fund, now with the peterson institute. on the markets, richard turnill has been wonderful. we appreciate your attendance. we have to talk a

nejra: in the u.k.he conservative party takes the next step toward electing the next prime minister. all 330 parliament party members will vote on one of five contenders. energy minister andrea leadsom is in the lead. grassroots conservatives will pick the leader once the field has been whittled down. been rocked bys three terrorist attacks in one day. a suicide bomber blew himself up near the prophet mosque. five security people were killed , and there was another attack near a shiite mosque and one near the u.s. consulate. the death toll has risen from the deadly truck bombing. at least 157 people were killed and almost 200 wounded. islamic state claimed responsibility in the most deadly attack in iraq in more than a decade. prime minister mark in turn so is billt ill -- shorten's labor operation. a have just started to count more than a million mailed ballots. leadry clinton's national against donald trump has narrowed accord to the desk according to the usa today. she leads 46-40. a dayly as 24 hour

vonnie: nejra, what do you have?ooking at arm holding after the deal of the day, hitting a record high, jumping the most on record after softbank agreed to acquire it for $32 billion. look at this. arm was the seventh most shorted stock on the stoxx 600 last week before the deal was announced. short interest as a percentage ofthe free flow, at the end the chart there, was close to a six year high. short sellers cannot be too pleased with this move. i looked at the relative strength index, where it is somewhere at 91 on arm holdings. 70 and above means it could be time to sell, that the stock is overbought. so will the short sellers turn out to be right? vonnie: all i can say is ouch. i will make an executive decision and it will be a tide today. -- a tie today. later today, tom keene will sit down with imf managing director christine lagarde in an exclusive conversation at 1:00 p.m. ♪ ♪ >> this is "bloomberg markets." breaking news. fiat chrysler is under by thegation for fraud u.s. justice department. prosecutors ar

here's nejra cehic with details.starting with the danish company that provides telecom solutions, one of the best performers on the stoxx 600 this morning, up 7% at the moment. this is after we had some headlines crossing the bloomberg saying that a firm is and thatd in buy, is possibly way we are seeing the shares gaining. one ofmonte paschi is the best performers of the stoxx 600. we know it is working with authorities on a solution for its bad loans. only heard today, and this is in a report in an italian newspaper, it aims to sell 10 million euros in a dea npl's. the plan was discussed on thursday and is to involve the new bank fund. we are keeping a close eye on that. airfrance klm. a few things will come out for them today; i suspect the stop loss could be down to the cfo resigning. he will continue in the job until november. what we also got from air france was total passenger traffic numbers up one sent, but then also i talked about the pilot strike in june, and that impact was about 40 million euros. guy: th

let's get the details with nejra.: we can definitely see a firmer footing than we were looking yesterday at the open. just looking at the industry groups on the stoxx 600, we can see green across the board. energy stocks are leading, up 1%. crude oil is rebounding from a two month low. telecoms, following, up nine .9%. we are still seeing them up, but they are lagging a little bit there. it is green across the board. risk appetite is coming back into these markets. when we look at the 10 year yield on the u.k. gilts, we have overseas markets opening up. a are, it looks like, moving little bit higher on that, on the u.k. 10 year yield. at theat 78 basis points moment. and then, let's take a look at the stocks we are watching. these are the three we are watching always at the open. i am starting with a couple of u.k. stocks. this company said that for ur year of hurting profits are ahead of the estimation. hays said the fx is the reason for the difference and actual growth. so, that is up 5% at the moment. it is called

i am nejra cehic.th the new slow we have seen, there is no question the paper of the moment is by james bullard of the st. louis fed. each prison we have spoken to come including the former chairman is riveted by the paper, some harshly critical, some less so. no one has carried this debate forward within the media then our michael mckee, the chief regime change correspondent. plot nextou have the. to you. when that came out after the last meeting, everybody's eyes were riveted by the dots at the bottom of the screen. someone was predicting that would be no change into history, that someone is our guest, jim bullard. he has gone from a converging model where employment growth and conversion -- inflation meat. -- meet. we would like to ask him to help explain that to the average viewer. three key fundamentals, productivity, real rates, and the state of the business cycle. explain how they fit together and how they have you predicting a sickly nothing happening for the fed funds rate in the future. james

let's go over to nejra.jra: market called it dramatic duration -- deterioration in the weeks following brexit. you can see it here, the composite pmii -- dropping to a low. it was worse than expected. no surprise at all that we have seen sterling sliding. on sterling.32 was this just a temporary post brexit blip? or, will the signs of weakness persist? the economy is on track to contract this quarter. they are predicting a mild recession this year. lasthan: the mpc over the couple of weeks is split was sterling to emerge between those that want to act right away and those that are waiting. is this the data gluing these guys together? nejra: it could be. most of them are saying that action is required at the next meeting. investors are pricing and 80% chance of the bank of england is going to cut on august 4. 100, despite the initial loss it has been reconvening. could this be of an indication of the market perhaps expecting some more stimulus? one thing, there was a bright f newin markets, an index o manufac

nejra cehic, you have been analyzing how the chart has been doing the last couple of decades.we have been talking a lot about the ftse 100 bouncing back over the last couple weeks but since the birth of the eu in 1993, it has underperformed some non-eu peers. indexg at norway's obx and purple, and in blue you have the stocks 50 index. the ftse 100 right at the bottom in what. in doll -- in white. in dollar terms, the ftse 100 has been underperforming since 1993 and it is up 85% since then compared to a 350% jump for the smi and a more than 400% rally in the kobe x. those -- inrencies the obx. currencies, though stocks have searched twice as u.k.or more than the index. guy: why is the ftse 100 on default? >> first and foremost, we had a devil of a banking crisis in 2007 and lost a couple major constituencies. secondly, the ftse is a very defensive index. it has miners and it and oil in it. of theabout a fifth index. staples and health care together make up around one third of the index. over the long haul, there have been sectors which do not necessarily provide that much excit

♪ nejra: these are our top stories.ne of the most high profile brexitheir exit -- pro has resigned. nigel farage says he has done his bit and wants his life back. construction contracted since 2009 as the impending brexit though held back --. economists in a survey predicted a reading of 50.7. has set ahancellor goal of lowering britain's corporate tax rate. it is an effort to keep businesses investing. osborne said he expects the results of the eu referendum and want to mitigate the economic impact of brexit. c and china investment securities are in talks of a possible merger. the firms have around $20 billion of assets. has declined to comment. there is no response from cis. global news 24 hours a day, let's take a check in on the markets, starting with european stocks. we can see how they are performing. of steam.st a bit i want to get the ftse 100 up. it is close to entering able market. it is up 19% from a february low. commodity producers are the best performers on the stoxx 600. heading lower. italian banks in pa

let's bring in nejra cehic on softbank in the deal it is about to go through with arm. what is the stock price reaction? nejra: you can see it tracking on this chart, the holds jumping , up 43% at the moment. there was a 43% premium to friday's close, a $32 billion takeover by softbank of arm, cash.ence per share in this will happen quickly, and you can see how quick the reaction happened as well. let me give you some context because this share price move today is the most on record for arm. i have taken us all the way back to 1998. short interest in arm holdings -- it was close to a six-year high at the end of less week. people short on this stock are not looking very smart at the moment. jon: with arm you get every mobile computing device on the planet, the chips that go into those devices. the other thing to get the deal through is low execution risk. onarly the market is trading a price that they consider to be low risk. they minister may says would move away from what she called a soft touch on one of the big deals. how do politics play into this deal? nejra: we ac

nejra: five dallas police officers have been killed and six wounded by snipers during a demonstrationing shootings by officers in minnesota and louisiana. four suspects coordinated the attack with rifles and positioned themselves in triangulated locations near the end of the route the protesters plan to do take. three people are in custody and a fourth suspect who is in a standoff with police has killed himself. britain's decision to leave the e.u. had an immediate impact on the u.k. high street. according to bdo. like for like sales amid market retailers fell 3.6% last month. tata steel has halted the afterf its u.k. assets investors pulled out in the wake of brexit. tata is keen to sell the business and will hold a board meeting this morning to discuss what to do next. air farance klm has announced is cfo has resigned. he will remain at the airline until november 4 while his successor is found. the company said the pilot strike will have an estimated impact on its june operating result of 40 million euros. shares trading lower this morning. that is the bloomberg business flash. fran

let's get to the bloomberg first word news with nejra cehic. nejra: francine, exactly as you say, the race to succeed david cameron is narrowed to two candidates today. theresa may and andrea leadsom are the favorites. conservative party lawmakers vote in the second round today. the two contenders will face the parties wider membership. the new leader will be selected by september 9. germany's chancellor angela merkel says there can be no sustainable security in europe but without russia. germany and its partners the -- agree -- an offer to have a dialogue. merkel told lawmakers she plans to boost defense spending by more than $2 billion next year. in australia, prime minister to -- toting leads form a majority in parliament according to an estonian tv projection, he has one with 82% of the vote counted. a three-day truce and serious civil war appears to be holding. still fighting continues between syrian troops and islamic state forces. the justice department has made noofficial, there will be criminal charges against hillary clinton over her

nejra: theresa may now has just two days to build a team to rescue the u.k.rom its worst political crisis in a generation . she is going to replace david cameron by tomorrow night and will need to decide fast who will be in charge of negotiation's to leave the eu and will lead to elect someone to steer the economy. in japan, the prime minister's government is keeping people guessing on a stimulus passage -- package. he says he will spend money on transportation and told ben bernanke today that he wants to accelerate japan's exit from deflation. manila, hundreds of demonstrators gathered outside china's embassy to protest the claims over the south china sea. the philippines is waiting for a u.n. tribunal to roll on a lawsuit and they want it to end its -- evaluate all of bernie sanders will appear with hillary clinton, raising speculation he will endorse her for president. he has not officially ended his run for the democratic nomination. goes to dallas to make with families of five white police officers killed last week by a black man, and .ill meet at a memo

nejra cehic joins us. good morning.: we are seeing that risk appetite continue in equity markets. the msci pacific index, gaining for a fourth day out of five since brexit. if we look at the yen, we can see there is more of that move out of the safe haven. yes, it is gaining, snapping a three-day drop. household spending also declined. it's actually set for its sharpest weekly drop since may, the yen. it soared to its highest since november 2013 last week after the brexit vote, but it has paired half of that surge. checking on sterling, it's pretty much unchanged. comments, alluding to a potential rate cut. this currency has recovered somewhat after dropping to that 31-year post-brexit low. interesting to look at the forecasts. only 30 out of 63 have changed their forecast for the year end. they say the currency will drop to $1.26 by the end of the year. the median forecast is for the pound to appreciate. we will see if that changes in the coming days. taking a look at oil, rising today after it had a 26% gain in the se

nejra: this is your global business o report. who sources say have the best chance for the yahoo!. vonnie: the second time is no charm for bayer. the company is open to further conversations. will look at indonesia's shrinking rain forest. indonesia is already the world leader and forced lost -- in forests lost with the dry conditions from el niÑo making the situation more dire. nnie: the winning bidder for yahoo! may be made in a week. so far, yahoo! ceo marissa mayer is being tightlipped on the process. >> or boards independent strategic review committee, leaving a well-run and robust process continues to manage this effort and we are making great progress. while we have no announcement today, i can see that we're deep in the process of evaluating proposals and alternatives and will update shareholders as soon .s is it is prudent nejra: johnson & johnson updating its forecast with results driven by growth in the pharmaceutical division. shares of johnson & johnson have almost doubled since the start of 2010 and the company has topped earnings estimates every period since 2010. m

nejra: unilever reporting second-quarter sales growth that beat analyst estimates.ant and hair care products. revenue rose or .7%, gains coming from higher prices for its good. the ceo said the company is pairing for a tough year. >> if you look at the economic data, you see less job openings and the effects are starting to ripple through and a reduced estimate for the u.k. economy. when they have a high level of uncertainty, investment stays away. what is this hates is uncertainty. nejra: a big takeover in the mining equipment business with, to agreeing to buy joy global for 2.9 billion dollars, a 20% premium to their closing price yesterday. joy global is the largest independent maker of underground mining equipment. two believes a commodities rebound will continue. employees at three of wall street has a guest investment banks may get a much smaller bonus this year. jpmorgan, goldman sachs -- wall street firms have been cutting costs and stiffer regulations are hurting revenue. vonnie: time now for our bloomberg quick take where we provide context on issues of in

nejra: it is interesting what the next step will be, because logically the next step would be for the. to trigger article 50 and excellence start those negotiations on leaving the eu. actually, other governments in europe are not expecting david cameron to do that when he needs other eu leaders on a meeting and tuesday. what he wants is some kind of plan for what happens next. john: this is understandable. the will of the voters is to be respected. i don't see this where it is essentially the calamity that many are saying it will be. mark: the parliamentary labour party, widened the no-confidence vote for jeremy corbyn. it was a resounding defeat, 172 votes to 40. there were no-confidence in the labor leader from within the parliamentary labour party. michael: i am running in his leadership conference for one reason. one reason alone. i want the state i love, which has given me so much, to have this opportunity for change, conviction. theresa: i have invited you here today to announce my candidacy to become leader of the conservative party, and prime minister of the united kingdom. ni