Serious. As a result, risk off. Investors launch into haven assets, golden treasuries. Will we breach the record high on the u. S. Tenure 17 . President trump heads to texas as Tropical Storm harvey is set to make a second landfall. Both saying it is too early to assess damage for how high will outnumber be. That number will be. An hourss than half from the european open and what futures are pointing to, obviously we are seeing red arrows across the board with euro stoxx 50 futures dropping about two thirds of 1 , ftse futures also right there. Forre looking at the same futures across the entire european spectrum, at least the major equity indexes. Are fleeing to risk assets, i have been keeping my eye on the risk assets all morning long. Just to see how seriously the market takes this Missile Launch. It is very interesting to try and figure out how much of this is priced in already and how much concern the markets will show. Guy end of month, you have to factor that in. Ome window dressing going on there has been a Market Reaction, but i dont take it has been that substantial. Markets pricing in what is or hasng in north korea, already. Equity markets in asia are softer. Australian market down by about 1. 7 . Gold miners are recently well bid. Keeping an eye on poly metal, the russian ruble affecting its story. , up by. 3 n bid despite the fact the missile went over japan. Gold is probably turning out to be a better risk off asset. You can see that, gold up about. 6 , trading strongly this morning. Copper strongly bid, trading up by 1. 73. , yen, the usual story in terms of the risk off kind of trade. When i am watching today is to see where treasuries break, higher or if the bid pushes us below 2. 1 on the yield. Data coming out this week about the united states. Here is the bloomberg first word news update with juliette saly. Tropical storm harvey has drifted back into the gulf of mexico and is poised to recharge before crashing ashore again tomorrow on the texasthe louisiana border. Inundated yesterday and with an estimated 20 inches of rain still to come, predictions at the cost of the damage range as high as 100 billion. U. S. Gas prices are Holding Gains with as much as 30 of the refining power of the nation under threat of flooding. In the u. S. , donald trump addressed a proposal to build a hotel and condominium tower in moscow on three occasions with his companys lawyer. Told the House Intelligence Committee the Trump Organization weighed the trump tower moscow proposal from september 2015 to january 20 16. He also said he enough the press secretary for Vladimir Putin to ask for assistance on the project. The eu chief brexit negotiator has accused the u. K. Of not seeing serious about its withdrawal from the block and called on britain to be more clear about its position. Michel barner spoke as the two sides opened up a third round of talks in brussels. He announced pressing frustration at the progress so far the u. K. Leaders summit eight weeks away. To be honest, i am concerned. Time passes quickly. I welcome the u. K. Governments paper, and we have read them very carefully very carefully. Andwe need u. K. Positions to makeration issues significant progress. Juliette global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Juliette, thanks very much. North korea has fired a missile over japan, reigniting tensions after a war earlier this month between pyongyang and the united states. South korea has promised a show of force in response and japans Prime Minister shinzo abe spoke with President Trump by phone and described the launch has unprecedented. The government followed the missile from its launch and was completely aware of its trajectory. The safety of the people was our main concern. This act poses a serious threat to the peace and security of the region. We have launched a complaint with the north korean regime and have also asked the u. S. To convene an emergency meeting of the can Security Council to ask the International Community to put pressure on north korea to cease its publication. Provocation. Matt joining us, Mark Cranfield, mliv strategist with reaction. Brian, let me start with you. How have japans leaders reacted to this provocation and what is the mood light on the ground . How are worried are people waking up to a Missile Launch . Brian i think people have calmed down by now. There was a little nervousness in the morning, especially in hope haida where people were wakened by alarms and sirens at don. The government has solved to assure citizens that it is aware of the situation, it made a decision not to shoot the missile out of the sky because it determined it was not headed but ill bets point is it could have if it needed to. It is also trying to assure people we are on the same page with the u. S. And south korea, in touch with leaders. We had the meeting between mr. Trump, and the government has also stepped up pressure on china and russia to take a greater role in trying to tame north korea. We have talked about the Market Reaction and there is a little bit risk off vibe in the market. Shouldeless, the market have priced these kinds of events in at this point. We have seen a gradual escalation of the story, the fact they are fired a missile overland represents the next phase in this saga. Mark december extent, you have to get used in effect at Missile Launches dont have a long impact on the market. That is partly why you dont see a huge reaction. The timing of this one just before the start of asian markets today did causing caused a bit more vulnerable. It popped the Foreign Exchange market essay asleep, dollaryen dropped a lot, the usual grab for gold in u. S. Treasuries. Unwound, itletely could be people are waiting to see what stance the United Nations take later in the day. Guy interesting to see how this ripples around. Brian, what do we know about the missile . Makes this one different, in the past, north korea has fired rockets over japan on several occasions and in those cases, they were always supposedly carrying satellites into orbit. In this case, you have a mid range Ballistic Missile designed to carry a nuclear payload. That is a first. We also believe it was fired from the town that has pyongyangs international airport. There is speculation it may have been launched from a mobile launcher, from a runway, it would mean north korea has the ability to fire missiles anywhere in the country if they loaded on the back of a truck. Thing, this missile was not lofted. It was a much lower out the dude. In recent Missile Launches, this theyhe 13th this year, have been lofted to avoid air space above the countries. This, they chose a different tack. A lot more per doc provocative memo we have seen. We do see a fairly muted reaction in markets and we havent really seen a reaction from the u. S. Government. But i cannot believe people have gotten used to this. Japan says it is an unprecedented situation, meanwhile you have got an incalculable president in the u. S. , dealing with an incalculable dictator in north korea. Why arent people more worried . You just put your finger on it. The peak thing that most concerns people in this part of the world is what the reaction will be from washington and believe me, we have been watching twitter feeds all day waiting for that 3 00 a. M. Moment of inspiration in the white house. And that is it yet what we are worried about. Everyone in this side of the world wants some sort of peaceful and calm response that at least leads to dialogue at some point. Maybe not right away. The first step is an emergency meeting by the u. N. Security council. Besides that, i think it is really just a wait and see how the white house does respond when it wakes up this morning. Mark, aside from President Trumps twitter feed, what other factors are u. S. Traders going to be looking at today . There is still a lot going on outside the issue from north korea. The notably, in america, inclement weather in houston. Absolutely, and also a couple key data points this week. The inflation, one of the feds favorite indicators, followed by the jobs report friday. A bit weak, plus china pmi. Plenty of major data to keep people on their toes. Weekse leaks leading up to labor day in the united states, a day when moves can get a little out of control because there was no one around to stop it. If the treasury market is going for the two point one handle, it may achieve it because the market is thinner than usual. Thatinteresting to watch one. A lot of data out this week. The employment data, going to be moreesting to see how the nearterm, shortterm indicators surrounded u. S. Employment are affected by what is happening in texas. We will wrap it up there. ,rian fowler and Mark Cranfield you can of course follow mark and the mliv team at mliv on your bloomberg. Still to come, macrons migration summit. What was agreed at the end of a meeting of African Leaders yesterday. That conversation next. This is bloomberg. Welcome back, lets look at what is happening in europe. France, germany, italy and spain have agreed to spend migration across the mediterranean. They met with libya and niger during the talks. Workountries would together to boost the fight against people Smuggling Networks according to macron. Say this to shortterm action plan we have immediate,he most efficient answer to what we have been witnessing the past few months, which is intolerable. The fact is, certain groups of traffickers, human smugglers, drug smugglers and groups linked to terrorism have turned africa into a cemetery and the sea into a sanction cemetery are the ones linked to guy terrorism. France, the estimates pretty in line. July consumer spending, rising 2. 1 versus a year ago. Starting to get some decent data coming through from france. A monthumer spending ago is up by. 7. Lets get back to the summit. , how kernan out of paris much of a breakthrough was this meeting in reality . Call it aouldnt breakthrough, because it was almost impossible to implicate migrants through grace, because the Libyan Government is very unstable and the eu leaders know that and in fact, macron in july talked about creating hotspots in libya to protect the refugees in protested this was impossible to do because of unstable conditions in libya and the very bad conditions in refugee camps in libya. Tried to doe ecb last night was create some framework and identify with an economic migrant and refugee even before they enter libya from niger and chad, for example. This is a first step. I wouldnt call it a breakthrough because it is unclear what the zones are going to look like and how much this will cost. Macron has embarked on a big diplomatic tour. What is he trying to achieve globally . Would say it is more than a diplomatic tour, it is almost a Tour De Force for the french president to promote french interests. He had a very short summer break , and since he came back last week, he decided to meet with as many as 12 european leaders in 10 days. Tried to tackle the issue of cheap labor. Said poland did labor dumping. You had germany, italy and spain and in the next few days, he is meeting with the dutch, the belgians, the luxembourg and the greek leaders. What macron is trying to achieve role on the diplomatic stage in europe at a time when you have german in three weeks and italian elections looming next year and he is also trying to reboot his popularity back home. He has lost 20 points over the summer, his populate a popularity is now 40 , less than what the former president had at needs a period, and he fresh start because he needs to pass this labor reform. We are to have the first details the first strike on september 12 and macron wants to pass this labor reform by the end of september before the next eu summit in october. Matt caroline, thanks very much. Caroline conan in paris talking about the big summit. Polands foreign minister saying the countrys judicial overhauls are consistent with eu standards. He adds the blocks criticism of the democratic track record amounts to harassment from brussels. This comes after the European Commission sent a warning letter last month. It says polands law compromises Judicial Independence and will take legal action. We are joined now on the line. What more can you tell us about this response . At least it was made by the deadline, right . It appears to admit the deadline, though some argued it should of them piled on saturday. Nevertheless, it is there and in brussels, and being analyzed as we speak. Probably no imminent response from brussels in the next days. What younteresting is mentioned already, semantics. Language from the foreign minister, brussel amounting to harassment. There is not much new in this conflict, meaning poland is not changing its position and appears to have believe that escalating the conflict is reaping political benefits. Thinks it isrnment getting benefits out of this. What is this question mark how does this get resolved, if at all . A trickyat is question, of course. As i said, government appears to believe that escalating the conflict is building a support for its power at home. Support isnteavy declining. In the you, the dispute as fundamental value because it is about a key member, the largest Eastern European nation and it concerns fundamental values. While sanctions arent really ill requirethey w consent from all eu members, including hungary, he is not going to subsiding anytime soon. It is about building european order on consent, and both sides seem to be quite determined to stick to their positions. The thank you very much for update. One to watch if you think about the compatibility of the various eu nations right now. Lets talk about the market open, safe haven actions assets catching a bit. We will look at those and the open. Plus, we will look at what is happening with the reinsurers, Tropical Storm harvey causing more devastation. Likely cause even more after that and we will look at the numbers for them. He opened his seven minutes away. This is bloomberg. Guy weve got four minutes to go until the european cash open. A bunch of stocks to talk about. Insurers saying it is too early to see the numbers around harvey. The hit u. S. Has taken. The weather continues to be inclement in texas. We will watch what the story is going to be. You have seen the hit over the last day or so, but that is probably not this. P keep an eye and easyjet, builders reporting they will take over the asset of air berlin. Polymetal has well. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. One minutes ago until cash open in europe. My ftse is back today, but looks like we will be seeing down as well. Matt, we have not seen in new high for the s p for three weeks now. We have not seen the euro going above 124 and a while. Some tradersred by a possible reversal point. Watch this. Typically, people grab for the dollar in the yen. Very interesting to watch as we go into the open. You can expect it to drop down a little south. Stock 600 expecting to be posting similar numbers. One of the credit of things critical things is the eurodollar through the 120 mark. Of what a question level will the euro again to impact the investment. You mentioned some of the insurers. Were just waiting for them to come through. We have a conversation with royal london and he was saying these are the second time this may have only seen it on comesump victory and it now very often. Aversion. Risk you can see we are off the highs of the year. December is the front month for the market. Ec u. S. Treasury futures hit a ninemonth high. He see this overall risk aversion. ,heres a lot that has changed even though dollaryen is nor near as it was earlier in the year. Question is whether we stand or go Rex Tillerson line down the discussion road. I know you will talk more about that. Thank you very much. A mixed bag in terms of in terms of the index point of view. Jumping on wealthy running through the markets. Let me take you to the other side. And gold is trading up holly metal is up with numbers. It is up by 1. 22 . The numbers were a little bit of a next. Im looking at the eurodollar which is fascinating on its own. First time we have seated cnet since 2014. It has obviously been a while and we have been waiting for this. Point ine reversal traders along the euro, they are short the dollar anyway. You would think that Something Like a korean Missile Launch would have them grabbed four grabbedyou grab four dollars an interesting move in this parenting it is really not just a pair. We see dollar weakness across the board. What is going on here with the greenback . The u. S. Dollar under severe stress across the board. If you look at the expectations, they continue to plummet so we are off around 10 the last month or so. Think that is probably a little too low. Maybe we need to new to see better data and i think it is the past path of least resistance. We have seen the euro make good gains at the backend. Now, at least the path of 120 or 4050. Nce is before we get to your reaction to the Missile Launch out of north korea which is a substantial event, why the strength in the euro . By theders encouraged united front being shown in brussels when it comes to negotiations and is and not disturbed by the challenge out of warsaw . Iscertainly the challenge put against some of the resilience of the euro, but now at least the path of least resistance is the euro game. We will look to see that aint further demonstrated later in the week. We k it is also a fact inflation is starting to continue to move higher. And will also vindicate push back to the idea of policy. G i think fundamentals are attractive. I think it is still the case the euro is getting benefit and i dont think necessarily theres a challenge. U. S. Tenurehe versus the european tenure. Had fundamentals got to do with what we are seeing . If we think about the fundamentals, and the u. S. , that has obviously been weighing on. S. Yields input, at theg same time and i think theres a case to be made and then were talking about rather earlier than expected, the removal of some of the negative rates think aat does play out having further appetite for compression and is very well supported. Misses the data we have appear. As you say, positioning looking fairly stretched on the upside. How flaky is that . I think that is a very good point. We see signs , that is a push back big psychological level. Isare getting close to what a fair value. Were not anywhere near their. , but we are getting closer to that. See. Were to , than some of those positions i think would be cleared up or profit would be taken. We are very close to that target. When you see those profit levels start to hit, then we could start to see as we move towards the quarter and. Obviously, a Missile Launch over japan is already serious, but as he searches the real escalation of concerns in north korea or anything of that, would you reach for the yen or have playbook beenn changed out . I think you look at those traditional metrics. Of course, one needs to be careful in the reaction to this little latest launch. It is not the first time missiles have gone over japan. It is the first time in years admittedly. Yes, the rhetoric has been ramped up. , think looking at these risk we have to remain mindful that those currencies would perform strongly. Being alked about 120 significant level. That and pushtake , give me the one that traders are watching. Youre right. I think it is looking across the range. At somewe need to look of these pairs. I think the fundamentals are providing some support for the euro. The question is, how much further to me go . We gettingn is, are to a relatively mature scenario . Say, the fed really. Iminishing that is causing investors to stand aside. , were going to discuss the possible german election outcomes. Point to a merkel when win. This is bloomberg. Welcome back to the european open. Youre looking at present of the European Commission giving a speech right now. You can watch the speech on life go. Juncker pushing for more emphasis on the dimension of the European Union and saying the european economy you definitely want to keep up, especially if youre looking at the latest currency developments that we continue to follow as 1e euro goes up since january 2015. Christ heading at the lowest since october, dropping the most june 2016. Were down more than 11 . The market reacting negatively to this company to my comparable to the prior year, but that no doubt playing into what we are seeing today. Almost 20 . This is dropping a lot more than the analyst would even suggest. This is after we got some thirdquarter revenue numbers. That toot not taking well as you can see from the reaction. This is not reacting as strongly come only about 5 10 of a percent. It wont, until the probe is complete. Thank you very much. You can see despite coming third, can just come back and address this issue. This is the euro strength rather than dollar weakness. Asked i think we are seeing elements on both sides of the equation. It is very difficult for both sides of the equation. Is treasures break lower from get down to those levels, where do you look for clues . You look for clues as to where that base is . We get there, is that it . If the fed doesnt pull the , if it turnscember of the market is right again, how much more the market is priced in so it strikes me as being asymmetric the only way to resolve this one is if the market is wrong and the fed is right. Absolutely. Going back to that probability of hike it seems to diminish. We dont think that fed will have the firepower or desire to also, the rated will be far lower so weve been need to see data that would be commensurate with the fed. The fed clinging onto a model welooks increasingly are growth so until we see signs of price pressure whether it be in earnings birds of Commodity Prices then the market will say of course that argument would then be invalidated. Yieldsre seeing u. S. Close to 2. 1. This is a oneday trade in you 11 00 p. M. Tarts at im wondering how much of this drop in yields has to do with not the issues and create, but the issues in washington. The fact we can have a government shutdown. The fact made me to raise the debt ceiling again. How much of a problem is the administration and congress right now in washington for investors and then have to flock into treasuries . That onerather ironic we do get concerns, ironically investors do flee. There is that liquidity which is hugely important. I think there are various reasons as to why we are seeing concerns on the u. S. Side of the equation. Increasing and the ability to negotiate. The yield trajectory is there much towards the outside so we are going to have an increasing discussion about. And when consequently, it is going to keep pressure on the u. S. Dollar until there is some degree of resolution. Going to underline pressure in terms of the dollar. How much confidence do you have in this u. S. Administration and congress to be able to pass meaningful legislation before the midterm elections question mark mayor coming run with remarkable speed and i think questionhe interesting for republicans. Until there is degrees of movement, the ability to put forward with any meaningful reform looks very questionable. The question is, how close to the midterms do we have to get before republicans realize their own futures i think theyll be under we will see deadlocked negotiations and fairly intense and curse discussions. As we go to the early part of will startroximity relevant er relevant in that might be a signal it will be a little more easing and that might allow for some movement on the backdrop. Of course, that would provide some thank you very much indeed. He is going to join matt and i on Bloomberg Radio later on. Lets talk another story. A flooding that has crippled half of u. S. Energy production as well as displacing at least 30,000 residents. Just out of interest or what you need to know is that these kinds of events have been few and far between. We spoke at that point he was saying we have not seen many events thus far, but be prepared. Especially the second half of the year, no one more prone to a natural catastrophe. We are looking into Hurricane Season and the weather moretions are somewhat hurricanes sojor it could have been that we could see some of them index for months or so and then major losses would increase as expected, but that is our business. This is volatility we like and this is what we are here. He made the point pretty well. There is a possibility we silly we will see more and more these events. Bloomberg will give you see this track. You can see the kind of impact and where it will be going. You can see without map all of the hurricanes and Tropical Storms through the area. Really, the big insurers have not seen massively expensive catastrophes so far this year. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. North korea fires a Ballistic Missile over japan. Prime minister shinzo abe calls the act unprecedented, grave, and serious. Investors had for safe havens. But the euro bounces. The common currency breaks through 1. 20 for the first time in more than two and a half years. Is this euro strength, or is it dollar weakness . As trump heads for texas Tropical Storm harvey is set to make a second landfall. They say it is too early to assess damage, but how high will the number be . Good morning and welcome to Bloomberg Markets european open, im matt miller in berlin alongside guy johnson in london. Guy the big story of the morning is the breach of the 1. 20 level when it comes to the common currency versus the u. S. Dollar, just shy of the intraday high. I think positioning around here will be interesting. It will be interesting to see how the market is set up around this 1. 20 level. Will there be air pockets to the north of it, and if so, where are they . I. E. , could you see a gap higher as a result of Market Positioning, or could you see the market starting to hit some triggers and dragging that back down again . Remember as well that we are not at a year high when it comes to euroyen, another one of those pivotal pairs you need to Pay Attention to. Something to think about this morning. European equities are a little softer, a factor you need to think about. The main story that we have been highlighting is whats continuing in the united states, the flooding that has crippled the heart of the u. S. Energy production story, showing no signs of receding. It is pulling in more warmth and will crash in your the texaslouisiana border. Lets get more from the managing editor, tracy alloway, who joins us from abu dhabi. I understand we are focusing on the energy side of things. Block us through how the Energy Markets are reacting to the big spike in gasoline. Clearly the spread between brent and wti is widening because refineries are closing. What happens next . Is that spread going to remain wide . Tracy yeah. You mentioned gas. That has been the place where we are seeing the most action, gas prices up again this morning, the sixth straight session of rises, all down to that refinery outage. We have Something Like 12 of the u. S. s total Refining Capacity closed over the weekend, up to 30 that could be affected as the storm comes in for a second landing. When it comes to oil, you mentioned the wtibrent spread. Wti is up about . 60 per barrel this morning. That is different from monday, when we saw wti down about 1. 30, which pushed the discount to brent to the highest in two years. Would that is down to is, as we have these refinery outages, we see less demand for u. S. Crude to be converted to gasoline, which means as the wti gets knocked, we have u. S. Exports expected to be hit, which means that buyers of wti, particularly those in asia, are going to have to seek light gray alternatives elsewhere, which ends up forcing the brent price up a little bit. Brent is currently up about . 23. The spread between wti and brent narrowing, but still a pretty elevated levels. Matt its great to get that explanation, because i was wondering yesterday why we saw wti getting hit and brent rising. What does this mean for Oil Prices Going forward . What does this mean for oil prices in the coming weeks . Obviously important, given that we have a big opec meeting coming up in november. Tracy yeah. Its really interesting timing. First, let me just say that we still dont have a clear picture of the damage, particularly as the storm comes in for its second run at the coast. At a basic level, you might expect that a hit to u. S. Production and oil assets would be good news for opec, which has been trying to curb production. Aat might end up being simplistic excavation, and let me tell you why. First start, when you have these for a start, when you have catastrophic hits to production, they are not ways to boost oil prices and the longterm. Secondly, and this is probably more important, you are going to get a lot of noise in the u. S. Oil data coming out over the next few weeks. Eiaarticular, that weekly number about u. S. Stockpiles, the one that comes out every wednesday, the one the market has been focused on as it tries to evaluate whether the glut in Global Oil Supply is coming down. That could complicate opecs efforts to drum up support ahead of the opec meeting in november to potentially extend its Production Cut agreements. They could also lend another lifeline to shale producers, if you get the wti curve story moving higher, a tightening of the u. S. Oil supply that could end up being good news for shale producers, could end up hedging our production further out in the future. That is of course bad news for opec. Matt all right, tracy, thank you. Tracy alloway, managing producer joining us with that. I want to check back in on the euro, breaking through 1. 20 for the First Time Since january of 2015. You take a look at this chart, which we have for you on the you can seebrary, the euro, since its inception in 1999, the yellow dotted line is the average since then. Were headed right back up to that. With us from brussels is the managing director for europe. Carson, what do you make of this move through 1. 20, the First Time Since january 2015 . As you saw, back toward the longterm moving average. Is it euro strength or is it dollar weakness . Im not getting any sound guy sorry. Matt it looks like we have a little bit of a problem. These things happen. We can get that fixed quickly. Well we do that, i am hoping that carson doesnt say that on the one hand, euro strength, on the other hand, dollar weakness. Though to be fair to economists, that really is what we are seeing, as unsatisfying as the answer is. Guy i think Market Positioning will be fascinating, but i think political positioning will be interesting as well. When politics really has represented a significant worse in europe, it will be interesting to see, with the catalanlection, the story, with whats happening in poland. Whether Political Risk will reassert itself. Lets pull up another great function, tv. You can click into the interactive tv function, get the radio function as well. At the most look recommended videos that we have got here as well. Recognize this guy here . Lets click into that particular piece of video, as somebody was suggesting earlier on. Inonder where the kids are this particular video. We will be back. This is bloomberg. Guy its 8 40 in london. A quick look at the euro, we have broken through the 1. 20 level. Some great functionality on the terminal that will effectively tell you that we are back for the longterm average. I think it tells you a lot about how depressed the single currency may have been. We take a look at the pvp function, you can see it coming through quite clearly. That is was happening in the currency market. Lets find out about the equities. Nejra cehic, over to you. Nejra i wonder how much that euro strength is feeding into losses in the equity market, as well as adding to the general risk off sentiment. Every Industry Group lower on the stoxx 600, but if you dig deeper, you will see that gold producers are rising. We have asentimen, higher gold price on the bid, above 1300 per ounce. Randgold outperforming among gold producers, up 3. 5 right now, hitting its highest since october 2016. Looking at poly metal, a Precious Metals miner, it will report numbers today. First half revenue missed estimates, as did the first half adjustment. It says it remains on track to meet gold equivalent guidance. We are seeing shares react positively, up 2. 4 . Much of that is due to the general. On the downside, i am looking at rlt. Rlt. Tl. It is cutting its guidance in 2017 to flat year on year. The previous guidance was for growth. Of course we had goldman rerating it, cutting it to neutral from buy. This is having an impact on the european broadcaster space. This is one of the worst performers of the stoxx 600, down more than 8 , getting its lowest since 2013 and dropping the most since 2013. Matt thank you very much, indeed. Here sebastian salek. Has fired north korea an unidentified Ballistic Missile over japan, as the allies way a response to the latest propagation. The missile landed 1200 miles off the coast of hokkaido. The japanese Prime Minister says he wants to increase pressure on north korea following a 40 minute phone call. [speaking japanese] japans position completely matches that of the united states. North koreas Missile Launch poses a serious and grave threat on an unprecedented level. Im in complete agreement with President Trump that we must convene an emergency u. N. Meeting and increase pressure on north korea. Sebastian donald trump discusses a proposal to build a hotel and condominium tower in moscow on three occasions. The attorney told the House Intelligence Committee that the itmp organization weighed through january, 2016. He also said he emailed the press secretary of Vladimir Putin to ask for assistance on the project. Global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much, sebastian. I want to check back in on the euro. The euro broker 1. 20 for the First Time Since january 15. It has been two and a half years. I have a great chart showing long positions on the euro, the highest level since 2011. You can access this on the bloomberg. You can see the long positions in the white bar chart, the euro spot price in blue. Carson, let me get back to the question i wanted to ask you earlier before we were so rudely cut off. Is this euro strength that we are seeing or is it to dollar weakness . If i take the Political Risk perspective, it is fairly clear that of course the focus on Political Risk in the u. S. Is increasing with all the uncertainty surrounding the administration. There can be no doubt about that, relative to europe where the economy is fairly well, where we are coming to the end of an Election Year where the outcomes were not that bad. I think thats very clear. But if i take a look back and look at europe, euro strength and so on, expectations when it comes to the ecb, all of that is very clear. What we have to keep in mind is that the room for maneuver to centrist parties, to do what is necessary, i think that is extremely constrained, remains extremely constrained at the end of the Election Year. Its important to remain vigilant. Matt when you look at the u. S. Situation, carson i am looking at the wirp screen, the midpoint of fed funds futures you can also take oif, i always forget which one is in vogue. It doesnt matter because they are all under 50 going out until august of next year. The chances of a rate hike are very unlikely. Do you buy treasuries now, given that we see, because of this weakness in washington, a continue to drop in yields . Toits up to the markets decide, ultimately. Im not going to make a market call here. But i think what is clear is that this continued uncertainty that emanates from this administration of course has its effect. What we are seeing here is that there is probably a longer story. Uncertainty, the only certainty during these four years. Matt carson, walk me through the risks that we are likely to see for the story coming for. How much attention do i need to pay to the polish story, the standoff with brussels . Do i need to worry about the catalan referendum . What about the possibility of a merkel allianz coalition . What would that mean for europe as well . I think these are examples of the stories we need to keep an eye on. Its assuming, almost in the background, the long run stories, no signs of abating when it comes to the standoff between the polish government and brussels. The cabinet story continues with a strong domestic dimension, this effort to keep this very diverse, independent movement in catalonia, which is difficult if you look at it closely. And if we see the formation of a christian liberal coalition in germany, that further narrows the space merkel has when it comes to eurozone buildout. These are exactly the kind of risks i was pointing to. Nothing as immediate as a Marine Le Pen election, but something that maintains the positive space of centrist parties. Matt how would you guy what do you think the most likely outcome of the german election is . I think the base case at this point remains a coalition. If you look at the polls as they uptick by twos an or three percentage points. I think it is fair to say that they have bottomed out right now. Nextis the thing to watch sunday. Attack, as io think that story is done, but to speak to his own supporters and see whether he can get this 2 or 3 uptick he needs to stay in government. Matt its interesting, because we have a story out today saying that, behind the lines behind the scenes, the spd bigwigs are saying maybe this time it is better if we go into the opposition. We dont need to be a junior partner in grand coalition. What impact, carson, be more helpful to them in the long run in terms of building up some impetus to finally win an election in this country . That is the story of merkels chancellorship, her centrism is deadly for her coalition partners. There has been this argument over the last 12 years, wouldnt it be better to go into opposition . If you look at the second merkel government, it didnt fare much better at the end of those four years. I think centrism is a fundamental problem, and keep in mind that german voters value consensus and responsibility. Striking down an offer from merkel, it goes against everything going on in europe. I dont know whether it would go down so well with german voters. Guy how does diesel play into this, and a possible alliance with the greens . The point about the fact that going into the coalition with merkel has generally been disastrous for the other party, or other parties, involved, does that mean that if they were to accept a coalition with her that they should demand a higher price . I am trying to work out the mechanics of government forming here. Yeah, absolutely. And i think that is an evolution we have seen, demanding ever higher prices. Theytime, four years ago, were running the whole Coalition Agreement their membership ballot. Thatriving up the price, is already from the perspective of the greens in the context of diesel, with the greens positioning themselves against this technology. Then you have the sister party in the very who was in the bavaria. You see an issue that could make a corporation with the greens even more difficult that it has been, even against the backdrop of migration. On balance, it makes a coalition more likely. Guy thank you very much. Great to see you. Carsten nickel, managing director for teddy oh intelligence. Up, the common currency breaking through 1. 20 for the first time in more than two and a half years. We will get back to the markets team. We will be joining Richard Jones to get his take on what this move means and how the market is positioned around this level. Thats next. This is bloomberg. Guymatt welcome back. I want to check in on the euro right now, really the top story for sure. Breaking through 1. 20 for the first time is january 2015. What ive got here, this chart you can access is btv 438. It goes back to the life of the euro, to 1999. The yellow dotted line is the average since that time, 1. 22. Were getting back to that, close to it at least. Joining us now is the mliv fx strategist Richard Jones, here in berlin. Dod, let me ask first you think this is euro strength that we are seeing . Normally people would reach for a dollar as a safe haven but they did not today. Richard the euro is becoming more and more of a haven as time goes on, and given that the european economy is doing reasonably well, that the political situation is stabilizing, you can see how that would be the case. I also think today, in addition to the flight for havens, we have also had a really decent Consumer Confidence number. It is almost a perfect storm. Guy richard, people are coming back from holiday, looking at the level. How is the market set up around 1. 20 . It is one of those things no real pushback from mario draghi. We are looking ahead to the ecb meeting. Are these levels going to be problematic for the euro . Given that we are near the average over the course of the history of the euro, maybe not, but i think it is the pace of the ascent that is the problem. We look forward to the ecb meeting next month, and i think that will be the next driver for the euro. Matt where are we as far as the valuation of the euro . Parityrchasing price still slightly undervalue, depending on what you look at. Richard i would say on a longterm basis, we are still undervalue. Matt thanks very much for joining us. Richard jones is our bloomberg mliv currency strategist. You can check out his work by into your guide. Very interesting. Huge story with the missile over japan, the continued flooding, and the euro breakthrough. Guy matt, euro up, stocks down. Thats one of the stories the to focus on. European stocks sinking as the euro rises. This is bloomberg. Francine on the unprecedented grave and serious threat, japans Prime Minister slams north korea for firing a missile over its nation. Gold gains as investors goes resolve risk off. ,he euro climbs above 1. 20 will that help merkels Reelection Campaign . To get tells britain serious. He airs his growing frustration as the gloves come off in the printed negotiations. This is surveillance, i am Francine Lacqua in london. Like a lot of news