i 2012 without treasury found treasury had moved away from that. the senior treasury officials in charge of implement the program told sigtarp this is not our program. this is their program. after two years at the height of the recession only 3% of the money had gone out to only 7% of homeowners whose program was estimated to help. treasury never took ownership of this program abroad accountability we made bread and butter ig practices recommendations for best practices that were often dismissed. some state agencies performed well, and for for low performance to agencies will be did is we did data analytics can we talk to homeowners, whistleblowers, housing counselors and others. we identified obstacles that could be removed. for example, in florida seniors a child with online applications. that's not surprising. or trouble getting documents for tax assessments per in georgia homeowners have trouble because they had to go to the irs and get a tax transcripts within 30 days which you can't do and which other state agencies don't require. after our r

the treasury department says since he isn't going to be cooperative i will ask you, the treasury department's off to recuperate the money that was misspent or wasted. is that acceptable from your point of view and why only 29%? >> it is not acceptable. we worked hard to look at this if we didn't substitute our own judgment. we applied the federal cost principles and there is a long history of playing the federal cost principles. this is just standard work. there is $2 billion remaining to be spent and the numbers he's talking about what is going on at the treasury but it's not unspent. thanks for the declarative answers i will yield back. >> i will take a few minutes to follow up with questions and then yield some time. in the release of the report i made the decision to repay a portion of those costs related primarily because we could have spent an inordinate amount of time debating back and forth whether it was allowed or not allowed to give advice and help us address any questions related to those expenses highlighted in the report. in addition to that we also revise the travel policies ba

treasury but the money has not been spent. when we investigate fraud and when we audit waste, those are only spent monies. there is $2 billion that is left unspent. >> so there is still $2 billion but there is 800 million left in treasury, i want to get that straight. >> for my purpose, whatever is sitting in treasury is safe and secure. whatever is out there and will be out there in the future which is $2 billion, that is what i have to watch out for. >> what responsibility think the treasury department has for ensuring that this money was spent to achieve the purpose to help families who were homeowners, keep their home? >> there are several measures taken to make sure they are spent -- >> i am asking you -- not a filibuster time. i want to know what responsibility does the department of treasury have when you oversee a program like this to make sure that in this case, administrative costs don't get out of hand. you have an oversight responsibility. >> certainly, from an administrative cost perspective we work with them to l

we apply treasury's contract criteria. in 2010 treasury's top lawyers said under appropriations lost, an expense must be necessary for congress to be authorized in tarp. if the homeowner could get the assistance without it, it wasn't necessary. but the federal cost principles, they say they are being talked about today and they start with what's necessary. that's reasonable, applicable to the program. and that top lawyer treasury warned if you open this up further, it's going to authorize an unlimited number of expenditures, rendering the law meaningless and that's what we found with the days at the zoo and gym memberships, lawyer fees, visa gift cards, custom shirts, building a customer center where most of the customers are not hit. moving to a luxury building, $20,000 severance package. every misused dollar will reduce the cost. we found there were no federal competition requirements that could save money and prevent fraud. we found the demolition rose 90% in michigan. 65% in ohio, 70% in indiana, army corps of engineer

treasury's. it looks like a 2% or 3% nominal yield actually looks worse than local currency yields. >> when does it start to look more attractive for the foreign investor? >> cross currency swaps have been negative since december or so, since the passage of the u.s. tax law. there is a lot of market plumbing that no one can predict or understand. >> everybody is sticking with me. coming up, the auction block. steve mnuchin and the u.s. treasury have a record-setting first quarter for borrowing. this is bloomberg real yield. ♪ ♪ jonathan: this is bloomberg "real yield." i want to head to the auction block. a record quarter for first quarter issuance from the treasury. the treasury borrowing $488 billion, the biggest quarterly amount of debt sold since 2008. the treasury said this week that it will boost the amount of long-term debt to $73 billion this quarter. may could be a strong month. it has been the largest month over the last three years with an average of $171 billion. down in south america

treasury markets, we've got primary dealers.dea of a failed auction actually does not exist because every primary dealer has to put bids in there. i would define a failed auction is when the deal is significant, so when the initial market trades at a certain rate the , auction comes in five or seven basis points higher. that would be a pretty big shock to the treasury market. we have not seen any signs so far that these auctions are having trouble, but that is because the rest of the world is buying our debt. what worries me is if we are going into this trade war, does the dollar lose its reserve status? we have countries who say, why do we hold reserves in dollars? do you see any reduction in foreign demand? i think that can result in a big tail which can move rates higher. >> i think it is a fair assessment. what matters is the end customer buying of treasuries, and levels will ultimately adjust to that, even if there is in one given auction, not enough customer demand. primary dealers will set up well in that regard. what is

over here, this is the treasury department. men and women worked on the same machines printing money. down here is the government printing office and here are women working as stitchers, stitching pages into books. in clerical positions, many of the tasks that the government had hired women to do had been carved out for men's jobs. federal work at this time was not well structured. in a man could come in and copy one, a letter for two hours, then tabulate accounts. when women started coming in, some supervisors carved off jobs that did not require training and gave them to women. copying was the most common. women would copy letters into ledgers, or any kind of copying work. or they would be charged with comparing the copy work of others. but some tasks that were given to women -- women developed this prized expertise, respected inside and outside of the government. these women are an example of that kind of job. these women are counting notes, and at the same time, looking for counterfeits. women became prize counters. the sec

treasuries.looks like a 2% or 3% nominal yield, so a japanese investor looks worse than local currency yields. jonathan: when does it get more attractive for foreign investors? guy: december or so, there is a sot of market plumbing asset that no one can put up or understand. everybody is sticking with me. priya misra, td securities, .ichael purves, guy lebas coming up, the auction block. mnuchin has a record-setting first quarter for borrowing. more on that later. yousef: -- this is bloomberg real yield. ♪ ♪ jonathan: i'm jonathan ferro, this is "bloomberg real yield." block, ao the auction record first-quarter issuance from the treasury. the treasury borrowing $488 billion, the single biggest quarterly amount of debt sold since 2008. the treasury said it will boost the amount of long-term debt to $73 billion in the current quarter. in u.s. corporate's, may could be strong for issuance. it has been the largest month the last three years with an average of $171 billion and in south america, the ne

matter, can treasuries go it alone? that is spread between treasuries, it is even wider. >> it is disconnected from hikes. and the market has looked at weaker european leaders and pushed back the end of qe. ecb will end qe this year. they can't keep doing it forever so they might push back the hike. you may see upward movement. compresses, it is because the yield curve is rising not because ours is declining. the piece of the puzzle that is absent from a look at relative spreads is the cross currency has been deeply negative which makes it expensive for euro or japanese investors. yieldr 3% nominal actually looks worse than a local currency yields. >> when does it start to look more attractive? >> cross currency swaps have been negative. there is a lot of market plumbing that no one can predict or understand. >> sticking with me. everybody sticking with me. coming up, the auction block. steve mnuchin and the u.s. treasury have a record-setting first quarter. this is bloomberg real yield. ♪ >> this is bloomberg real yiel

i'm looking at every thing ten-yearhe prism of a treasury yield above 3% in his ten-year treasury yield his longer dollar. i want to ask about oil. we were just talking about repsol and them wanting a transition to cleaner energy. the oil price where it is now and how oil equities are trading, what does that tell you about investors perception? david: we have seen the lows in oil for the cycle and i think a ,ouple of key characteristics firstly u.s. shale will not ramp up as quickly as we thought it would. geopolitical concerns at the forefront there. dipping down a little bit by the end of the year but pretty much close to where we are today. be concerned if you saw oil really deep into the 80's because then we get out of the range we have been in which is frankly a comfort zone. for consumers and producers. nejra: what about how you invest around oil and gas stocks? we have had energy in different parts of our discretionary portfolios. oil majors have that huge dividend, over a year ago you could question sustainability. right now there is more than sustainable. income seeking investo

treasury. they are matured and unredeemed debt. i've asked this question of your predecessor, secretary lew, without satisfaction, but my question is related to the efforts by the treasury department to find the owners of those bonds and to remit them the money they are due. the law indicates that -- and pack practice was that they would go to states and states, in our case the state treasurer's office would try to pursue lost owners. the 17 states, in fact, have those laws in place and they try to find the original owners. it was treasury's long-standing policy that states would have to take title to the bonds through a valid state sheet process hour in 2015 the ogs published a final rule that attempts to block states from taking title and to reunite and return those redeemed bonds to their owners. that was a complete reversal of treasury department policy of 60 years. i wonder if your treasury department has a different policy and if you're taking efforts to find the owners or to allow the process to take place in which the bonds

treasury department. like me, he was there for about nine years in total, and served as our anti-shake in islamabad -- attache in islamabad. he left last summer, right? so he is relatively recently been at the treasury department, working on issues like this. so i think that is everyone, right? great. dave, iet started -- will start with you. i just want to lay down what happened and how treasury geared up to start working on sanctions back in 2014. if you could just do a quick introduction to familiarize your people with the story. >> thanks. so the initial basis for the sanctions with russian aggression in ukraine, at that there wereeated up, policy problems with the obama administration. when you look at the top end of the ladder, nuclear war is the top. -- we were quite aware that this could spin out of control, and that is where we could land. discussionsns evolved and it was clear that this would need to be a program like no other program we have had. we had never taken on sanctions and economy. rus

treasuries. looking flat on this trading day. markets, 6:30rg p.m. london time, we have an exclusive interview. james bullard. let's go to juliette. korea hasnorth threatened to walk away with the meeting from president donald trump, due to a "one-sided request" regarding nuclear weapons. the move undercuts the optimism after kim agreed to discuss his nuclear weapons program in a first of its kind meeting. economy shrank for the first time in two years during the first quarter of 2018. gdp shrank 0.6% during the previous three months. the contraction was more than expected due to fly private consumption and business spending. china's u.s. treasuries have risen to a five-month high. tes increasedd no to $1.9 billion. trade tensions between the two largest economies. its holdings dropped to the lowest level since october 2011. the leader of the anti-migrant league has been talking with the anti-establishment five-star movement in italy on a populist government. talks have ended the final stretch, b

today we're considering the budget for the treasury department including the irs, treasury central to our government stability and on going operations, help sustain our country's fiscal health and protect our national security. you have a vital and wide rafrning job from collecting taxes and processing over $3 trillion in federal payments annual through prosecuting financial crimes here in the united states and identifying and stopping individuals that finance and promote terror abroad. i'm pleased you requested an increase for the critical responsibility of enforcing sanctions. i want to discuss the adequacy of the resources. i'm concerned the very real and important work ur doing regarding north korea and iran not limit your ability to enforce other sanctions around the world. i am disappointed your budget proposes to eliminate altogether grants to community development financial institutions which support development and create jobs in underserved neighborhoods around our nation. it originated more than $5 billion in loans and investment, financed more than 12,000 businesses and de

treasury's, u.s.asury's really stand out on a global basis and so you wonder about how i can rates really go just in terms of relative value of flow of funds? think there's an opportunity to own treasuries versus bonds and play that compression trade overtime. jonathan: you agree with that? full in the idea you have some pretty heavy fx hedging costs. mr. rusnak: those are coming down a little with the dollar strength i do think right now, you are going to see more flows into the u.s. awaiting the risk right now is still that you haven't seen the ecb play out and they are probably going to start getting out of quantitative easing towards the end of this year and raising rates maybe next year. we have seen that movie before and we know how that plays out in a rather merely than late. jonathan: you think it's risk-free asset? mr. buchanan: yes. jonathan: we will wrap up this program and the themes in the final rate just week this week. would you short btp's or bonds into year-end? where does the perform

money market mutual funds have to buy 60-day and treasury bills and treasury securities.em perfectly from the mandate. david: are they at all concerned about the yield curve? as a practical matter, as they reduce the average tenor, that is having an effective -- and affect of planning the year for -- the yield curve. >> that's right. they have a lot to issue. when you look at supply-demand dynamics, the demand is still there for two-year and three have in your securities. because of that, that is a place -- at three-year securities. because of that, that is a place where they can do that. date as significantly less than a 10-year. times more risk issuing of billion dollars of a 10-year than $10 billion of a two-year. from a risk perspective, they are not at a summit market risk. shery: were you surprised that they did not move on tips? >> there was a big presentation with investors in primary dealers and corporations that advise the treasury what they should be issuing. there was a big report in february to the treasury department about the tips programs. i was expecting

treasury anticipated. but just to use the vernacular, an utter freak out, in particular it was global and people in hong kong where the company is listed and all over the world were suddenly electrified by the effect of these things and then a sincere growing fear about where they could then go next. and i was expecting that there might have been this kaud rig of lawyers that would have showed their exposure more. >> interesting, so i want to get the audience here in a second. and i'm going ask sergey the last question, that will hopefully segue into the next session, but the two of you having worked at treasury on these issues, i'm interested and you both alluded to it in passing one way or another. but the process of how this is done and what extent treasury makes these decisions and to what extent it is working on state. i know generally about interagency coordination. but on this set of issues, how easy or difficult is it to get alignments? is it really an issue, either one of you. >> do you want to st

matt: i'll take treasuries. -- treasuries in the carry.han: have we seen the high on the 10 year yield for 2018? i like to recycle that question. we are right off the high is now. -- the high's now, given the rallies we have seen this week. have we seen the high on the 10-year yield? henry: no. lisa: the consensus is no. matt: no, but we close below it. jonathan: henry peabody, lisa abramowicz, and matt brill. great way to close out a week. thank you very much for your time. from new york city, that does it for us. see you next friday at 1 p.m. new york time, 6:00 p.m. in london. enjoy the three-day weekend if you get one. ♪ our phones are more than just phones. they're pocket-sized personal trainers. last-minute gift finders. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet. which can save you $400 or more a year. it's a new kind of network designed to save you money. click, call or visit a store today. nears 80. spread out. midland houston differential blows ou

treasury department. like me, he was there is for about nine years in total, served as our attache in islamabad at one point. he's done some interesting things as well. he left last summer, summer of 2017. so he's relatively recently been at the treasury department working on issues like this. so i think that is everyone, right? great. so let me get started by asking, actually, dave, i'll start with you. explain to us, i just want to lay down kinda what happened and how treasury geared up to start working on sanctions back in 2014. so if you could do a quick introduction to familiarize the people with the story. >> thanks, matt. the initial basis for the sanctions was russia's aggression in crimea and eastern ukraine. and as that situation heated up and it was a problem for the obama administration, you know, when you look at the top end of the escula tore ladders for russia and the united states, nuclear war is at the top end of that. and that's obviously a place that you don't want to go. we're quite aw

matt: i'll take treasuries in the carry. have we seen the high on the 10 year yield for 2018? i like to recycle that question. we are right off the high's now, given the rallies we have seen this week. have we seen the high on the 10-year yield? henry: no. lisa: the consensus is no. matt: no, but we close below it. jonathan: henry peabody, lisa abramowicz, and matt brill. great way to close out a week. thank you very much for your time. from new york city, that does it for us. see you next friday at 1 p.m. new york time, 6:00 p.m. in london. enjoy the three-day weekend if you get one. alix: oil nears 80. spread out. midland houston differential blows out as stockpiles build in the u.s. we hunt investment opportunities in the oil patch. revving into china. electric vehicle growth will help drive the adoption rate over the next two decades. a new report breaks down what company wins and when we hit peak oil demand. ♪ alix: i am alix steel, and welcome to "bloomberg commodities edge."

treasury yields breaking out to new highs. >> short-term, yields are going higher on a 10 year treasury. inflation is making a comeback in the u.s.. we will see positive surprises on inflation. it is seems inevitable with oil prices. yields have a doubled in a year-and-a-half. that traden is -- is over and how much capacity is it to move higher if we look at 3.25% on a 30 year? tois the room for yields move higher for inflation expectations that creep into the markets more? absolutely. is it out of control? i don't think so. up three fed goes times, that is 75 basis points, you have to ask yourself if the 10-year is going to go up that much over that time frame. if it doesn't come out will have an inverted yield curve this year or early in 2019. i do think it is crunch time for those. jonathan: joining me in new york is luke hickmore, senior investment manager at aberdeen. joe higgins, managing investment at tiaa-cref. diana amoa, portfolio manager at jp morgan. luke, welcome to new york. let's begin on treasuries. this is a debate about how far can we sustain. we blew through all of th

treasury yields. want to pull up a chart that shows how the 10 year yields continue to rise and have been steepening their increase over the last several weeks. this is coming as we are seeing more and more treasury options. it,ave $99 billion worth of just this week, so that will be adding upward pressure on the yields. how disruptive might that be? brian: i do not think it will be that disruptive. you have still a strong appetite for treasury securities, whether it is from insurance companies, or banks for regulatory reasons. central banks still gobbling up the treasury securities to hold as reserve assets. with yields where they are, i think it is fairly attractive as an investment for those types of investors. for our investors, it is not necessarily offer a lot of value because i think you can do better by taking on a little bit more credit risk, so you can get better yields with less of the interest rate sensitivity, but a lot of the moves up we have seen in the 10 year treasuries were somewhat

henry: treasuries, but not an emphatic endorsement.a: i would think the markets position is towards bunds. matt: i'll take treasuries. jonathan: have we seen the high on the 10 year yield for 2018? i like to recycle that question. have we seen the high on the 10-year yield? henry: no. lisa: the consensus is no. matt: no. jonathan: henry peabody, lisa abramowicz, and matt brill. thank you very much for your time. from new york city, that does it for us. enjoy the three-day weekend if you get one. ♪ ♪ yousef: you're watching the best of "bloomberg: daybreak middle east" -- the united arab emirates announces reforms to encourage foreigners to stay and apply more investment into the nation. iran threatened with the strongest sanctions of history unless it complies with all of americans demands. and the saudi arabians reform programs are praised by the imf. but can the kingdom resist temptation to ramp up spending again?

or 10 yearr bonds treasuries through to your end, henry? treasuries but not emphatic. think the markets position is towards bonds. matt: i'll take treasuries. jon: how we see in high on the 10 year yield on 2018? i like to recycle that question. have we seen the high on the 10-year yield? lisa: know it henry: no. matt: no. jon: henry peabody, matt brill, romwicz. ab enjoy the three-day weekend, this is bloomberg real yield. ♪ our phones are more than just phones. they're pocket-sized personal trainers. last-minute gift finders. and discoverers of new places. it's the internet in your hand. that's why xfinity mobile can be included with xfinity internet. which can save you $400 or more a year. it's a new kind of network designed to save you money. click, call or visit a store today. >> bloomberg first word news this afternoon. president trump is pivoting again on the summit was north korea. the president said he could still meet with kim jong-un as originally scheduled on june 12. u.s. officials have resumed talks with north korea after he calls, "it's nice statement."

matt: i'll take treasuries in the carry.han: here is one for you: have we seen the high on the 10-year yield for 2018? i like to recycle that question. we are right off the high's now, given the rallies we have seen this week. have we seen the high on the 10-year yield? henry: no. lisa: the consensus is no. matt: no, but we close below it. jonathan: lisa, i think you are right on the consensus. henry peabody, lisa abramowicz, and matt brill. great way to close out a week. thank you very much for your time. from new york city, that does it for us. we will see you next friday at 1 p.m. new york time, 6:00 p.m. in london. enjoy the three-day weekend if you get one. this is bloomberg real yield. ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far cover

matt: i'll take treasuries in the carry.han: here is one for you: have we seen the high on the 10-year yield for 2018? i like to recycle that question. we are right off the high's now, given the rallies we have seen this week. have we seen the high on the 10-year yield? henry: no. lisa: the consensus is no. matt: no, but we close below it. jonathan: lisa, i think you are right on the consensus. henry peabody, lisa abramowicz, and matt brill. great way to close out a week. thank you very much for your time. from new york city, that does it for us. we will see you next friday at 1 p.m. new york time, 6:00 p.m. in london. enjoy the three-day weekend if you get one. this is bloomberg real yield. ♪ >> let's talk. russia says opec plus could cut cutsso why cuts -- supply as oil nears 80. spread out. midland houston differential blows out as stockpiles build in the u.s. we hunt investment opportunities in the oil patch. revving into china. electric vehicle growth will help drive the adoption rate over the next two decades. a new re

one of the best things that studying the treasury department is fdr's treasury secretary recorded all of his meetings. in this book i was able to use the treasury department own words and express their frustration. you can read the actual transcripts of what they are saying and at the end of december 1943 josiah, a lawyer treasury, and said mr. secretary, the only question we have in our minds, i think, are the bowl has to be taken by the horns in dealing with this jewish issue. get this thing out of the state department into some agencies hands that is willing to do with it frontally. for instance, take the complaint and whatever you do with the juice? we let them die because we don't know what to do with them. another staff member added we are speaking as citizens now. armed with their evidence the treasury department wrote a new report titling the report to the secretary on the acquiescence of this government in the murder of the jews. this is a dc town and a lot of us have read government and that is not generally the title of these reports but it began one of the greatest crimes

and "outfront" tonight, the treasury secretary, steve mnuchin r, the man in charge of u.s. sanctions, which are now un back up and running. secretary, thank you so much for your time tonight. you know,we just heard the president saying iran is lying. what exactly did iran do to break the deal? >> well, let me be clear. president trump has been very consistent since the campaign and since he came into office. that this deal was not a good deal. it didn't protect the american people. he didn't like the fact it didn't have a term. we want to make sure iran never has nuclear weapons. they don't have them now, in ten year, they don't ever have them and they continue to work on ballistic missiles, which can deliver nuclear weapons and support state terrorism. the president has been clear this is about protecting the american public and making sure we have a good deal. >> just trying to understand, he's saying before the deal, they were dishonest. that's what the prime minister said last week, but you know, you' yur on colleagues, the dni chief, secretary of state now, but at the

a slew of insurance coming through treasury markets.inutes from the fed and the ecb this week add another dimension for conversations. pompeo, talking tough when it comes to iran. we will see big voices in the energy markets at the forum tak ing to the stage, including vladimir putin. manus: breaking news coming through. sparees nbd said to buy unit -- turkish unit at $3.2 billion. emirates nbd finishing off a deal with the turkish assets. $3.2 billion. the consideration is under a mechanism. and will assume the debt see consideration a couple of other lines coming through to be serabank's turkish unit -- unit.rabank's turkish surging.ebt is borrowing costs are surging to the highest level since 2015. we understand what could be the plan from the new populist government. they could be sort of the bonds in the bond market under the bed. this is the spread we have for io, -- for you, the yield is now above their peers in indonesia. developed to mind market yields are higher than indonesian -- bond market yields are higher than indonesian

treasury yields move higher. tells bloomberg the fomc does not have the push -- to push so aggressively or the curve will invert. leaders agree to stick with the iran deal.

treasuries.anie: what you mentioned about inflation, we have had signs without commenting on the policy that they are willing to be the target for a certain amount of time and let the economy run. is that something you are relaxed about? stephanie: i think a little bit mr. mnuchin: -- mr. mnuchin: i think a little bit of inflation is a good thing. one of the aspects of the tax plan is we want wages to increase. the last eight years have not been great for the average worker and have not seen wages increase. a little bit of wage inflation is a good thing. energy prices have the potential to, as we become energy independent, i am not concerned about energy inflation, and there are lots of good signs on the horizon. stephanie: they authorized 65% i think since last summer. and we have is necessarily seen a big amount of u.s. supply. a lot of people thought it would win prices went up, that u.s. surprise would be upsetting. are you worried about that affecting working households in the u.s.? mr. mnuc

treasuries, u.s. treasury's stand out on a global basis.r how high rates can really go just in terms of relative value and flow of funds. we think there's an opportunity to own treasuries versus boones for instance, and play that compression trade overtime. jonathan: do you agree with that trade, george? you have to fold in the idea that you have some pretty fx hedging costs there, to them. george: you do. those are coming down with the dollar strength here. i do think that right now you're going to see some more flows into the u.s. i think the risk is still with developed market debt. we still have not seen the ecb play out. they will probably get out of quantitative easing this year, start raising rates next year. we have seen that movie before, and we know how that plays out. we would rather be early then late on it. jonathan: we'll wrap up this get a few more questions, we will put you in the box to wrap up the program. looking ahead to next week. the first question, would you short etp's or bonds into your and? outhere does the perform

that would be a big shock to the treasury market.e have not seen any signs so far that these auctions are having any trouble, but that is because the rest of the world is buying our debt very happily. when it worries me longer-term is that if you were going into this trade war world, you have companies say -- country's sake why do we hold our reserves in dollars? ,ny reduction in foreign demand that could essentially move rates higher. jonathan: guy? guy: i think that is a fair assessment. the levels will ultimately adjust even if there is in one given action not enough customer demand. amusing from a ,onger-term perspective is two three years ago we were read about a shortage of safe haven assets, now we are basically drowning from them. in both cases somewhere in between so there will be good to demand for the treasury curve, maybe five basis points -- jonathan: people have to be boring are the same ones who said the medassets government should widen the fiscal position and take advantage -- michael purvis, do you see a market that

let's begin on treasuries. bit to close out the week, but kicking through some key levels through the week so far. luke: and this is a debate about how far above 3% can we sustain? we blew through all of the levels and we hit 3.05%, 3.10%. it is a bit irrelevant in a way what the level is. a bid for the end of the week, it may be a little more about italy and the u.s. being a safe haven, right? the spread versus germany is still out really high levels, really, really high levels, and it will get higher yet. jonathan: to luke's point, we took out the 2018 high. we took out the 2014 high, and i wonder, when you look at the spread over germany when the bund treasury goes beyond 300 basis points, how much wider can it get and can the united states and the treasury market really decouple from the rest of the world? diana: it can certainly get wider. i think what is important to keep an eye on is what is going on with underlying european growth and inflation outlook. this quarter, we had disappointing growth out of e

scarlet: we talked about the selloff in stocks and treasuries -- our treasuries falling in as a classding the way here? brian: treasuries have a mind of their own. there is a lot of talk about supply and the fed. the combination of those two and america'smeans for interest costs and budgets down the line, i think that is happening. between the tug-of-war stocks and bonds, but it was more of a treasury story than anything else. the dollar 50 backed off of piggybackecdd. scarlet: we will keep you postedscarlet: on the next important lines that we will be tossing. what would you like to call it -- important lines. joe: yellow line. scarlet: john garamendi discusses why he thinks trump move on his eta is questionable. scarlet: president trump wants to allow phone maker zte to conduct business with american companies but congress is not cooperating. a democrat from california spoke to our kevin cirilli on capitol hill. john: we absolutely must keep restrictions on the products this company sells. there is clear evidence that these products, these cell phones and other products, our direct

treasury notes. the broader market picture, the macro side of things, oil prices are pulling back just slightly so far today after a run up over the last couple of weeks wti crude, $70.92. ice brent crude, $77.72, off by 1% on the currency side of things, we are seeing weakness on dollar/yen a bit of weakness as well in terms of the overall picture for the euro the pound, 1.34 the last trade there. on the european side, those markets have just opened up. just in the last couple of hours. the dax just about flat. the cac in france, same situation. the ftse 100 in the uk there as well stability, that same theme in europe and asia. the japanese economy shrinking for the first time in eight quarters gdp falling 0.6% in that first quarter. back over to you, seema. >> north korea canceling its meeting with south korea and is now threatening to skip the summit with the u.s. eunice yoon joins us now with more details >> reporter: thank you very much north korea dramatically changed its tone towards washingto

the treasury market, it just sort of ads to the supply issue.s to upper pressure on yield. in the mortgage market we think it's an even bigger deal. alix: at one point does the fed get themselves into to tougher spot? the curve will continue to flat and flatter. ira: a report that we wrote about two weeks ago looked at , is the curve gets flat that the policy mistake that the fed makes that they continue to hike after the curve is flat. we don't have a lot of history of this, only three or four hiking cycles that you can actually analyze. fed that'ske the perhaps a policy they should consider when yield curves get to zero maybe the fed should stop. i could be sooner rather than later. that could be in the next 12 months. chairman.new . new fed in place ira: i think they're watching it at the us of the day the change in the fed is meaningful. they generally are suggesting they will be going along a similar path. at the end of the day we believe the fed's outlook driven. the idea that the curve itself is a forecasting tool i think is more the mark