unicredit is down.t was another bank mentioned by the report that says the ecb is concerned about bank exposures. we are seeing a lot of losers today, but some of the most notable ones are going to be connected to turkey are concerns, falling on concerned that they have strong connections to turkish markets. european markets down. clearly, the hit is because of what is going on in turkey. the lira plunges to new depths as turkey's relations with the u.s. continues to shower. probably, that is not the driver behind it. clearly, this was a market event spurred by a lack of interest rate hikes out of the central bank of turkey. this comes ahead of each is by both the turkish president and the country's finance minister to outline plans for a new economy was single-digit inflation in a move aimed at reassuring investors. that certainly hasn't worked. joining us from sydney is garfield. peter is here with me on set. you firstlet me ask for any reason that you can see, that you can determine behind this drop.

. >>> unicredit beats expectations despite posting a fall in second quarter net profit as costs and nprs improve. >>> intercontinental hotels trades lower despite raising dividends as revenue per room improves in the first half the ceo says china is a crucial market >> we saw amazing numbers of domestic chinese visits which drove rev in q1. >>> and the key witness in the mueller investigation, rick gates, admits to committing a crime with trump's former campaign manager as the investigation into links with russia deepens >>> all right. the top story today, commerzbank shares are trading off the lows after raising its full-year cost outlook to 7.1 billion euros germany's second largest lender did swing back to profit posting net profit of 272 million euros. the bank confirmed it would resume dividend payments at 20 cents per share this year. at one point the shares were trading down about 2.5%. we pared some of those losses. down about 1.8%. we have an expert on the show. thomas, you're joining us. we'll chat more about this i want to get your initial impressions on some of the numbers we

revenue and profit beat expectations, but unicredit shares up 2%.or pandora, the danish jewelry maker, the charm maker, the world's largest jewelry company. h-shares down as much as 20%, the biggest decline since 2011. pandora, standing out. let's get the first word news. sebastian: in the u.s., the administration has restored some sanctions on iran and reaffirmed plans to impose tougher penalties on oil sales in november. the measures were to take effect today restrict purchases of dollar. it bans imports of pistachios to the u.s.. he willresident says not talk while sanctions are in place. >> negotiations and sanctions at the same time is meaningless. if someone stands in front of his enemy and pushes a knife against their arm and seeks talks, the response is that he should put the knife in his pocket and come to the negotiating table and use logic. lira isn: the turkish perron losses after sinking to a new low. the currency and country's bonds tumbled over hiking concerns about a diplomatic spat. it fell as much as 6.3% while the rate on ten-year

these are your headlines >> unicredit, bnp paribas and bbva sell off after the ecb is looking at their to turkey >>> the turkish lira tests fresh lows against the dollar. a rout in the currency is also spreading to the bond market. >>> the ruble also falls the russian prime minister says moscow will consider it an economic war if u.s. economic sanctions target banks or currency access. >>> and novozymes trades at the bottom of the stoxx 60 after missing earnings the ceo said the forces at play are not what he expected >> we had a satisfactory first quarter. the mix of factors pulling on our business are slightly different than what is expected. we have weakness in household care, but the balance of that is >>> hello. welcome back to "street signs. we're getting gdp figures from the uk for the second quarter breaking here. for that second quarter we are looking at quarterly growth of 0.4% that is bang in line with the forecast for 0.4% on the quarter as well. on the year we're getting a figure of 1.3% that, too, is in line with forecasts. when it comes to some of the breakdown reports o

julie: it looks like unicredit has opened back up and italian trading.ooking at the bloomberg here. it is down about 5.5% after that halt that we saw earlier. definitely some broad pain among those european banks. thanks, taylor riggs. appreciate it with our stock of the hour. caroline? caroline: sticking with that theme because as the european close coming up. we will be chatting with mark barton and a look at how we see the lira affecting today. the dollar up almost 14% versus the lira, at a record low. the japanese yen is the only major currency up. it's the search for havens. the euro spawning -- responding to moves with concerns about the banks. really we are seeing a selloff across the board in europe. we are seeing the worst day in about a month since the stoxx 600 had $122 billion wiped off. this is bloomberg. ♪ mark: it is 11:00 a.m. in new york, 4:00 p.m. in london, and 11:00 p.m. in hong kong. from bloomberg's european headwaters, i'm mark barton. julie: i'm julie hyman. this is bloomberg markets, the european close. mark: here are the top sto

mark: real bad credit ratings from moody and the likes of looney credit -- unicredit.the bank side, is the analyst with the comfortable exposure of the likes of unicredit to turkish lenders? >> there is concern regarding the banks, particularly those that have exposure in turkey. for now, some of those are waiting to see what will happen. as far as the credit rating agencies, the agencies are scheduled to make reviews by september 7. that is causing concern within the italian government. you, thanksto see for filling us in all about italy. julie: let's check in on first word news. courtney donohoe has more. who led thegent investigation into russian interference in the election has been fired. the fbi director order peter struck fired over sending anti-trump text. has decided he should face only suspension and emotion. the president of turkey says the economy is under siege. he expects the contacts to continue. present erdogan spoke after the took steps to stop the record slide. they free up cash for banks but there was no mention of raising interest rates and the lira

most exposed to turkey with a third of its pretax profits derived from the country also italian unicredit is strongly impacted to a lesser extent dutch bank i n g h s b c in britain and to be m.p. back in fraps now for more cuts rope in the top khin maung from a.b.n. amro the institute about who released that study good to have you with us first tell us how worried should we be about in particular in terms of its impact on the european banks. well the numbers as you say quite large almost one hundred fifty billion and now that does seem on the surface like a pig headed line amount but for the european banks it is very little actually for especially considering the how strong and large turkey is the exposure by european banks has been very limited as you said b.v.a. is the most impacted but still it's only ten percent of total assets for the lender so it's going to be definitely a drag on profitability for a few lenders but not all of them all right so so no reason to panic just to get but nevertheless the situation isn't exactly good how to get out of this downward spiral and you haven't

and unicredit in milan is also losing heavily and so are all the basic market parameters that you have the docs here in germany is down. in france and u.k. and in switzerland the indices are down and having said that it's not quite as much damage as on friday it's far from a investors therefore are not panicking but they are worried and the banking shares are central banks are central to an economy and it's not to be ruled out the banks may get in trouble over their business in turkey at this present time and that depends on how everything is going to develop now we know that the government in turkey wants to tackle the problem the central bank saying they are ready to take all necessary measures why isn't that called investors. because the central bank is not ready to take all necessary measures that's the estimate that's the opinion that's the evaluation of the people here in the market the only remedy that the people now want to see as one that shows that the central bank is independent of turkey's president everyone and that is a rate hike and not just a rate hike but a major rate

italy's unicredit, the netherlands‘ ing, and france's bnp paribas are also on the hook.burak guven is from birkbeck university of london. first of all, tell me what you think is the main cause of what's going on in turkey right now. what is behind the financial turmoil that i think you summarise it fairly well. turkey has had a fairly unsustainable growth model for many years now based on high current—account deficits, consumption —based growth which made a very foreign capital to panic, and on top of that we have had some political strain in recent months. having said that, for a long time this was not an existential issue for turkey, the growth model itself, because turkey stuck to fiscal discipline, it had a very predictable policies that, in the international markets were flush with liquidity. all those preconditions have now fully shifted and that exposes turkey to all sorts of problems. that shift, how do you think we can re—calibrate things? what you of the potential medium—term measures for stabilisation and recovery of the turkish economy? i i think i policymake

the biggest exposure to that nation have come under intense pressure over the last couple of days unicreditp paribas and bvba all hitting six-week lows earlier this week which leads to the question about turkey. what is the bigger risk of contagion. let's bring in larry mcdonald from acg analytics, a cnbc cribber. what is the bigger risk of contagion? >> you laid it out in the last segment. it's important to realize gdp of greece versus turkey, turkey is three times bigger than grease three times bigger than greece back in 2010 so this is a much bigger corporate risk the corporate debt and government debt to gdp in turkey is 70% as you stated, a lot of that is denominated in euros and dollars. when the lira makes a 40%, 50%, 60% move lower, all these companies are wiped out. people have to understand there's a huge difference between greece and turkey. >> is. turkey is the 17th largest economy in the world, but we're trying to dig in and figure out the different connections. here's the difference. greece was a part of the eu fiscally, monetarily it got the backing of the german government h

unicredit also down. really, really look out for any kind of link to the euro.saw euro weakness, yen strength. quite a lot going on. and present erdogan speaks in two hours from now. we round up turkish news. this is bloomberg. ♪ ,rancine: president erdogan will it be all talk and no action? the lira plunges. other em currencies drop. european stocks follow asia into the red. on reports that its board is meeting with advisers next week. to recuseers ask musk himself? we talked about contagion. we are looking at what is happening having a ripple effect across the board. it is moving euro, bonds, currencies, yet. -- yen. in ino those just tuning north america, this is radically different from yesterday. we have been using the word idiosyncratic way too often. today is not idiosyncratic. francine: it touched a record low. it is very difficult when you look at market participants of whether president erdogan can stop the rash. bloomberg first word news. here in london is sebastian civic. plunging even further. there are concerns of runaway inflation and worse relati

andbas, unicredit, ing others that got hit.re is no reason to believe they will not be under more pressure because the turkish president has said nothing to calm the markets. i would not expect anyone -- i would expect anyone to look at the exposure they have with respect to turkey. automakers including fiat chrysler and insurers -- many ampanies that slowly built up presence in turkey and have done quite well. the banks were happy about their presence in turkey until recently and now they are paying a price. everyone should still be on watch for what happens there. matt: i think we are looking marketow at the istanbul opening up. they typically do five minutes before the european open. let us take a look at where we 30 bourzatanbul right now. it is down only 1%. you can see the turkish lira on top of the trading at 6.89 right now. price inhe u.s. dollar turkish lira. and then you see the turkish large-cap banks there. it looks little changed. what do you see as far as the turkish market open now? way, you would've expected the

and unicredit in the land is also losing heavily and so are all the basic market parameters that you have the dax here in germany is down. in france and u.k. and in switzerland the indices are down and having said that it's not quite as much damage as on friday it's far from it investors therefore are not panicking but they are worried and the banking shares are central banks are central to an economy and it's not to be ruled out the banks may get in trouble over their business in turkey at this present time and that depends on how everything is going to develop now we know that the government in turkey wants to tackle the problem the central bank saying they are ready to take all necessary measures why isn't that called investors. because the central bank is not ready to take all necessary measures that's the estimate that's the opinion that's the evaluation of the people here in the market the only remedy that the people now want to see is one that shows that the central bank is independent of turkey's president everyone and that is a rate hike and not just a rate hike but a major

unicredit continue to discuss a possible merger.k has to probe rothschild the delicate nature of these discussions. unicredit shares climbed in milan after that latest report. didi isty to showing -- suspending services after a woman was allegedly raped and murdered on friday. the company says it failed to respond to a complaint about the driver when day earlier. the killing comes three months after another murder was committed by a didi operative. abe putp, can shinzo scandal aside and win another term as party leader. we will be live in tokyo for the latest. this is bloomberg. ♪ yvonne: time in hong kong. ramy: i'm in new york. you are watching daybreak asia. haslinda: the european union faces a new threat with italy's saying it is prepared to veto budget of illegal immigrants. it will look at all measures considering the zynga market finances and oppose anything that isn't convenient -- the market finances and oppose anything that isn't convenient. the lira has fallen sharply this month, half as much again as the next worst-perfo

down unicredit and bear -- and b.n.p. paribas weaker in this session. might expect defensive groups, like health care, to be gaining. health care is the worst performer in the session. bayer seems to have a lot to do with that. in overlunged the most two years after monsanto was socked with $289 million in damages in the first trial over claims that the roundup weed killer causes cancer. let's have a quick check across assets. what is happening to turkish stocks, down 2.5%. head broad-based. we saw weakness in asia, the hang seng lower by 1.5%. as well, with hit the japanese banks leading losses again the cousin of exposure to turkey. in the fx space, i talked about the lira. the mexican peso has been hit as well. let's look at some of the other markets. i talked about impacting commodities. we see weekends -- weakness in the metals. that could be a knee-jerk reaction for now. in terms of what is happening in fixed income, the 10-year treasury yield fairly steady. some of those cds have been rising as well, right at the end of gmm. in russia, we have se

of madrid unicredit of the lander b.n.p. parivar in paris and e.c.b. could provide some some help and also the national governments for individual banks for turkey itself. turkey is not in the euro zone and the e.u. had a tough time supporting greece remember when greece was in a crisis there was so-called trio there that came in the european commission the e.c.b. and the i.m.f. and they impose strict conditions and it doesn't look likely as of president everyone is going to accept conditions from anyone at the moment so that's unlikely i.m.f. basically same story and there you have the u.s. donald trump as the main factor behind i.m.f. funding that looks very unlikely either at present at least a difficult situation there now looking at the broader picture all the markets are recovering today and fresh data coming from germany is this enough to ease the fears. was really bright data. zero point five percent g.d.p. growth in the second quarter and that's more than expected and that's means that germany is steaming along one economist said it's a golden

among them, bbva, unicredit and bnp paribas.ets, including asian stocks, amid turkey's currency crisis. that's all the business news. i'll be back with more throughout the afternoon. a killer whale has stopped carrying her dead newborn calf, 17 days since she was first spotted off the coast of vancouver island. the mother, known as j35, covered 1,000 miles during this record breaking mourning period. killer whales have been known to carry their dead for a week. we've been hearing from richard sabin, principal curator of mammals at the natural history museum, who told us about the importance of the bond between a female killer whale and her child. we are finding out more and more about killer whales as the years go by. they are incredibly complicated in terms of their behaviour. genetically, they are different. across the ocean, they have different patterns of feeding, communication, the way that they transmit information from one generation to the next. we are learning things all the time about killer whales that, actually, some

particularly unicredit. and that raises the specter of, could this be another greece? could this bring down the banking system? most analysts i have read this morning say probably not, the numbers are relatively manageable, but the idea of it has everybody on edge again. the problem is turkey's financials are not good. the budget of us not bad, but they have a large account deficit and inflation is rocketing higher because they overstimulated. so the choices are not very good. and the president had suggested that he does not want any of them, so people are looking at a wall and saying we need a door. alix: to that point, bloomberg spoke with erdogan and he talked about the central bank relationship with the presidential office. here is what he had to say. areow, first of all, you the head of the state. when the people fall into difficulties because of monetary policies, who are they going to hold accountable? they will hold the president accountable. since they will ask the president about it, we have to give off the image of a president who is influential on monetary

the risk to the european banking system is that, as we know bbva and unicredit and others have largekes in turkish banks. they will not be able to collect on their loans in u.s. dollars. alix: we have a chart that shows the different types of loans the banks have. it raises the fundamental question for european banks, they were not getting any juice at home. european banks, but how much of this is overblown? alicia: i don't think this is overblown. this is the aftereffects of qe and global tightening. to know, investors went emerging markets to find yields. because there was so much liquidity in the world, what we're finding with the withdrawal of liquidity is there is risk out there and over the sector. in there is risk. david: there is always risk when you go to emerging markets. that comes with the territory. the question i have is about concentration of risk. va,saw in the chart is bb that is 15% of their outstanding loans. is that a failure of regulation? alicia: the european market is very different from the american market. they were very different in their demands to clean up

. ♪ emily: unicredit, italy's biggest bank, has stopped using facebook for advertising, alleging the has not acted ethically. the ceo added the company will not have any business relationships with facebook, because the bank maintains it has not acted properly. commerzbank suspended advertising on facebook in march, only to resume one month later after being satisfied with discussions with the social media company. deliveredaker twilio on results. to increasehought sales by courting larger corporate clients. they have expanded the sales team and bolstered the product portfolio, seeking better ways of engaging with customers. twilio customers currently include uber, air b&b and bigger corporate stalwarts like coca-cola. finally, the trump administration says the judge who approved the at&t takeover of time warner ignored common sense. the department of justice is trying to reverse the deal's approval. antitrust officials say the judge ignored the core argument time warner would have added bargaining power over rival pay-tv companies that pay for it s programming. that does it for this

but unicredit has some exposure.'m surprised that the spanish banks have been better lenders than this. if you think unicredit can bring down italy, the eu is going to bail that out. >> one thing we haven't mentioned the whole turkey story happened just as we tried to retest the january highs >> yes. >> now people are putting up charts island top, right, unfilled gaps for three days >> i know. >> bothered you were not >> look, the vix got really low, it didn't take much. the island top, we had so many islands it feels like i don't know it's like 1,000 islands. we didn't talk about the elections. a thousand islands so let's keep our heads cool understand that the market is going lower. try to find stocks that you really like. if you want to throw away stocks, throw away yourself. because it's not what you do here take a look, oh, home depot at 189 that's kind of interest. >>> tesla's board in damage control after elon musk's tweets not to mention the news on constellation and canopy growth. we'll get industrial produc

before it had an he said in commerzbank, the ceo of unicredit said it is him -- theto go, fact that its doing better than commerzbank is something i will keep an eye on. caroline: we will keep an eye on you keeping and i on the story. vonnie:u for your deed -- thank you indeed. -- the unit produces iced so, for tricks, milk, and on. potential for greater growth outside of the company. it is reported that goldman sachs has been hired to identify and evaluate options. up 1.3%. here is courtney donohoe. courtney: president trump tweeted that when it comes to iran, he is looking for world peace and nothing less. renewed u.s. sanctions on iran kicked in today, the first since the present withdrew from the 2015 nuclear agreement. president trump warned further sanctions would take effect in november in as the country doing doiness with iran will not business with the u.s. president trump considering to lift sanctions against north korea. -- thate tells fox and kim jong-un passes regime has been -- toward nuclear weapons. killedeign soldiers during the korean war, including those from south k

unicredit second-quarter profits beat job cuts and bank closures. commerzbank, not a good story. up by one points -- down by 1.7%. they beat the highest estimates for earnings but there were future warnings that are worrying markets. the fact that they were cutting overall outlook in terms of growth for the retail segment, they missed the capital ratio, saying they have to cut revenue forecast because some of their key clients are very international. think of where the bank is based in the german auto in particular come the affects all their clients are facing in terms of next week. pandora, a jewelry company, the biggest jewelry company in the world. trading down. 21% is the worst day we have pandora in european trading in seven years for use us -- seven years. losing faith some analysts say. let's look at other asset classes. in a day of dollar weakness we are seeing the kroner up, the euro rising higher. the euro interestingly up for tenths of 1% but the option straight is not buying it. that theexpecting euro's latest ranges -- range is unlikely to hold. hitting the euro bear

to have money in european banks, unicredit in italy, b.n.p. paribas in france. to me, the impact is more symbolic. people look at turkey and say, who is next? they right away look at argentina, which is vulnerable. it has a big history of poor economic -- even though the current president is doing a pretty good job. they look to south africa. pursuing economic orthodoxy, but pursuing jacob zuma. worried policies could go way. the rupee of india fell. we saw pressure on italy, with its new populist government, is worryr country people could get worse. risk off,isk on an and suddenly, the world is in a very risk off kind of mood. taylor: we talk about not only the volatility of the leaders, but then the strong dollar and ghs on emerging market countries, not only the turkeys itra, but turn -- internal -- turkey's internal economy. how was their economic situation right now? peter: one of the reasons turkey did hold up so well is its banks seem to be in fairly good shape. the gdp was growing at a good clip, over 7%. things werelot of going their way, but as we know

we're already seeing some big global banks unicredit, bnp paribas, those stock prices have taken hitshey're some of the biggest banks in their country if their capital goes down, one wonders if they will lend less which could spill over to their growth economies and this thing we talked about with tariffs watch the trade war. not a lot of heavy hitters in trade between the u.s. and turkey, but it's symbolic. five reasons why you need to watch and pay attention to the turkey story let's bring in james lew from clear n clearanomics when you look at your models, how closely are you paying attention to the story. >> we're watching the contagion effect all the investors are worried that turkey could spill over to emerging markets >> do you think it will? >> we think it will be contained. we seeing some contagion effects with fragile emerging market currencies, but the economic impact is limited. this is not greece or brexit we're not calling into question the solvency of eurozone players. this is not china like we had scares in 2015 we're not talking about the broader fragile five complex

unicredit, ing and bnp paribas have had losses this week but are now enjoying a resurgence.are a turkish specialist i have found out thank you very much for joining us what is your take on this crisis i know your take it's a liquidity crisis, yeah? >> we started off 2018 thinking that the u.s. federal reserve was drawing quantitative easing. we have rate hikes there as well we have an oil price rising steadily throughout the year that means liquidity is shorter. so we're seeing, yes, it's a specific turkey problem at the moment when we look at it, you know, you had a relatively small economic catalyst initially. you had the sanctions against two-named individuals in the turkish government that's kind of snowballed to where we are granted, erdogan has done little to support the market or give the markets much confidence. really at its core it's a liquidity crisis >> erdogan says literally as of the last minute we have been taking necessary measures regarding the economy. it's important we keep a firm political stance on the first point, would you disagree they've been taking

that's correct marketing and choosing the right technology >> your bank was owned by unicredit.were involved in the deal to bring it back to polish hands. there's a movement in polish business which is taking businesses which may be foreign owned back into polish ownership. that's something the current government is keen on. do you think that's always a good idea? >> it's been the idea for five years. also the previous government was in favor we are just opportunist. the market is consolidating. many european banks came to the conclusion that operations are s subscale and creating a stronger entity our strategy works we are growing double digit, growing well in all channels including smes and cash loans, mortgages. the idea works what is also relevant given where we are in the global cycle. i remember from my washington times, in times of crises it's local banks that did not withdraw liquidity from local markets. from a stability point of view it's good to have the 50/50 in terms of foreign versus domestic ownership. >> i have another question about poland an eu judicial organiz

times" reporting that the european central bank is getting worried about ecb exposure to turkey unicreditnd bnp paribas among the biggest banks with operations in turkey both of those bank shares are down both off more than 3%. let's turn back to the u.s. markets and your money this is the one number you need to focus on today. that's the nasdaq. the nasdaq is up for eight straight sessions as we noted, the longest winning streak of the year ten stocks are up more than 11% in the last month. let's bring in jeff hirsh from probabilities fund management. what was the probability that the nasdaq was going to have this kind of -- everybody said tech is over rotate out how surprised are you? >> i'm a bit surprised it shows what's going on with trump, everybody is on the seasonal bandwagon how weak august is to expect more volatility. >> low volume, blah, blah, blah. >> didn't happen seasonality is not perfect sometime there's are other forces that trump the -- >> pun intended. >> pun intended. but if you look underneath nasdaq, the advance/decline line is dipping the broad strength is not ther

it happens to owe a bunch of money to european banks, unicredit in italy, b.n.p. paribas in france.o me, the impact is more symbolic. people look at turkey and say, who is next? they right away look at argentina, which is vulnerable. it has a big history of poor economic management, even though the current president has done a pretty good job. they look to south africa. ramaphosa is pursuing economic afteroxy, but he comes jacob zuma. people worry the good policies could go away. the rupee of india fell. we saw pressure on italy, with its new populist government, is another country people worry -- people are worried things could get worse. can are ok now but you imagine a downward spiral. you have risk on and risk off, and suddenly, the world is in a very risk off kind of mood. taylor: we talk about not only the volatility of the leaders, but then a strong dollar and how that weighs on emerging market countries and the pressure that is putting on, not only the lira but turkey's internal economy. how bad are things? how is their economic situation right now? peter: one of the reasons

this is -- there is a story about stockton unicredit. n unicredit.e interesting. we have great pride in our jackson hole coverage but also important, timely interviews with the -- where the elite of world economics gather. joining us from amherst pierpont securities. it is shocking how accurate he has been. out where the deer and the antelope play, not playing, deadly serious with interviews today are michael mckee. every year is different. of 2008ber the sweat and 2009. what are the themes this year. lot calmer mood. decided theyty fed should be looking ahead at israel's that are going to affect the markets going forward. they have settled on market competition and changing market structure. at things like changes in the way investors ande, high-speed trading the concentration of power in industries in the united states. say for example, amazon. sexy as what as the fed is going to do with its fourth rate move. we talked with the university of it iso and they say important that policymakers understand what is going on. just because amazon is big, doe

unicredit, for example,. guy: the turkish inflation data has just dropped, let me run you through. they are better than expectations, but still up in terms of direction. the actual number is bigger at 15.85%, up from 15.39. so not as high as the market was peddling in at 16.3. the numbers are not as strong as they could have been. the ppi number, the input cost story. this is a story of inflation tomorrow. a ppi story, the producer price is at 25%, higher than the market was anticipated and higher than the last time around. the turkish lira is gaining a little bit, as you can see. not that much, which is interesting. so you are not seeing the markets reacting overly strongly to this number. 5.08, and a 5.11 earlier. the 10 year, which is circling the 20% mark at the moment. now trading10-year at 19.34%. so, slightly better than expected. , and stillmargin racist significant problems for the turkish central bank. the target number is 5%. we are some way away from that. what will the turks do? needs to be drama

take a look at unicredit, trading down by 1%. italy remains a focus.loomberg first word update with juliette saly. juliette: the u.s. and mexico are poised to resolve their differences as soon as today. significant breakthroughs between the two countries came in the past several days on the issues of cars and energy. it creates an opening for canada to rejoin talks, covering $1.2 trillion in trade. china's central bank has strengthened the yuan's reference rate. that's as the people's bank of china limited declines in the currency as the fed raises rates. it's the 13th day in a row the reference rate has been stronger than expected, the longest run since boomer started publishing and fixing forecast in august of last year. north korea's main newspaper has accused the u.s. of staging military drills to prepare an invasion, while at the same time pursuing dialogue with a "smile on its face." they allegedly american troop movements in the region and said they threatened to derail the dialogue between the two countries. the pentagon call the accusation fet

and unicredit is strongly impacted and to a lesser extent a there is dutch and i n g h b c in britain and b. and b. in france now earlier i asked analyst tom kim months of dutch bank a.b.n. amro how worried we should be about ticky especially in terms of its potential impact on european banks the numbers as you say are quite large almost one hundred fifty billion and now that does seem on the surface like if we cared line amount but for the european banks it is very little actually for especially considering the how strong and large turkey is the exposure by european banks has been very limited as you said b.v.a. is the most impactive but still it's only ten percent of total assets for the lender so it's going to be definitely a dragon profitability for a few lenders but not all of them are so so no reason to panic just to get but nevertheless the situation isn't exactly good how to get out of this downward spiral do you haven't as as a gesture. there will from our side it's just very clear that we need to have some assurance that the independence of the central bank is there and assu

unicredit downe 23% for the year. there is renewed pressure. measure that into your italian rates. nejra: is this a doom loop that worries you? use has been of ignited with a change in the political agenda. not because of who they are but it has it means there will be no changes to the dynamics of the italian economy. the result strong export center but the rest of the economy is not performing. nejra: you have seen u.s. growth peaking, china is going to outperform. is it going to turn around? >> the valuation of european equities? has to sell the u.s.. is europe the right place? i would prefer the more risking emerging markets. as we have seen with maersk, they have less earnings. that is why the u.s. stock market has outperformed. much to theyou so cio of saxo bank. you will be continuing the conversation with us at 7:30 a.m. u.k. time. be sure to stay tuned. nejra: you can interact with any of the chart that we use here, she tv is the function. browse recent charts, use them in euro research. coming up, we will be spoken to the former u

we got a nice graphic that shows the level of exposure of assets, unicredit and for others, whether toy or russia. what is the nature of your concern about european banks? a seoul tradehave base purely upon attacking bit lira and turkish assets. individual banks are going to be exposed. there isthat restructuring and there will be. there is billions of dollars in debt for turkish corporate. you will get the fiscal response, monetary response and restructuring, whether they like it or not because they have no choice. the banks do account for this. this is what they do. they account for some of these problems. that is why they have capital. anna: it doesn't sound systemic? peter: it is not big enough to be systemic. of those wonderful things where everything is going well and everyone is happy, and slowly little things go off one by one. this is another example. manus: it is good to hear that it is not systemic. i suppose that is one of the things -- one or two notes came back and said we will reflect back and we will read this. what does it do to monetary policy? the probability of a hi

the report out that unicredit had hired an advisor for a possible merger.mored two years ago. seems like it happened a lot of the european banks, david. consolidations, we always talk about it, but we never see it. julie: that is a good point, and a stocks are not trading like they had been, but they are perking up a little bit and european trading, so something to continue to watch as we get to the end of earnings season in the u.s. he will turn to michael mckee -- we will turn to michael mckee live in jackson hole. he has been there all morning long and will bring a lot of interviews, as well as james bullard who is president of the st. louis fed. michael: good morning. we would like to welcome everyone who is listening to us on radio and watching us. we want to welcome james bullard. james: thank you for having me. you have to pretend you like it. there is a lot of focus on the chairman's speech. the minutes suggest that the fed is locked in for september, so even if you disagree with that rate pass, is there a reason to think he will say anything market

unicredit, losses in the mid 5% range. >> they have significant operations in turkey so the degree you'reried about turkey, you're going to be worried about whether or not the banks will take a hit to their earnings i don't see that those banks are trading away what should be fundamentally worried about something systemic but, obviously, if they're going to take a loss in a big country like that, you know, it's going to hurt your bottom line. >> there's a european financials etf that trades actively it's down at the open around 3%. people are definitely taking some off of these in terms of earnings expectations. you know how it goes, right. the conversation will immediately turn toward what does it mean for the ecb and now they have to potentially plug another hole is it going to change the idea they're going to gradually move off their easing pattern >> yeah. >> if you're going to europe, though, $1.14 and change looks better than it has for awhile. >> i've got one even better. russia russia is so cheap now and getting cheaper today. >> you just went. >> i just went five people go out to

unicredit has written cause productions to a second-quarter profit that beat estimates.ven as the italian bonds holds took a hit. lower costs and provisions for bout -- the bank also expects to reach a target ahead of schedule. softbank is considering a valuation of $90 billion to acquire japanese wireless in a public offering. bloomberg has learned it is speaking to advisors. the company shares rose the most in almost a month. a representative for softbank did not comment. facebook shares jump to the most that it is offering customer service the of the messenger chat application. that could boost user involvement. the social media giant has tried for years to make messenger a national communication destination. racism aboutspread the security of private data. that is the bloomberg business flash. francine: on the first round of puttingctions on iran, president rouhani under increasing political pressure. the sanctions are intended to stop the republic -- in a televised address, returning said they are open to talks with the u.s., but such dialogue would be pointless whi

unicredit shares climbed in milan after the report.at airlines getting a bit of tailwind. >> certainly a tailwind. air china are among the best performers. easternuthern and china gaining ground after the pboc signaled support for the currency. f also have guangzhou are an -- guangzhou r&f. is eying over it $10 billion in annual profit. really it'slight china gaining over 11%, its biggest gain since 2011. upgraded at hsbc. and leslie were to take a look at peace stocks. they are reporting that the government is reevaluating plans for an inter-korean liaison office to be established indicating a possible delay due to recent developments such as the cancellation of the visit to pyongyang which was scheduled for this monday. >> for breaking news wherever you are, bloomberg and twitter have launched tictoc by bloomberg, the first global news network design for social media. this is bloomberg. ♪ haidi: it is that time of day, time for our battle of the charts. chartsll pit their best against each other, our guests. you can play at home usin

times" reporting that the european central bank is getting worried about ecb exposure to turkey unicredit and bnp paribas among the biggest banks with operations in turkey both of those bank shares are down the euro falling against the dollar after that ft report. the fear is that you could see contagion. at least that's the worry this morning as we look at turkey >> not necessarily contagion with these other currencies? they're not related? iran, the ruble? kind of weird. we have three, four different currency situations happening. can makes you think maybe it is related or at least not totally separate a lot of times the end of the world, when we start worrying about it, it starts with weird currencies >> is that your explanation for the futures? >> yeah. not down much. we had an unbelievable run back to 25,600, 25,700 we would be high weroer withoute tariffs. s&p near an all-time high. we had a good run. we wouldn't think the lira would cause the united states nasdaq to go down >> big corporate story of the morning that we're following, the story of tesla the company planning to meet w