A lot of people will be relaxing lot more and gets into this complex mission. This is going to take six hours to get everything deployed into three different orbits. A very complex mission. Elon musk said it is the most complex mission that spacex has done so far. I cannot hear what you are saying from the sound of the rocket. I cant take my eyes off of it, it is mesmerizing. Talk to us about what this means for elon musk. This has been such a pet project of his. Spacex is performing incredibly well. This is more of the military side of things. They have this Successful Program to deliver payload to the International Space station. This is falcon heavy. Rockets attached toit taking people potentially mars missions. It has been used so many times before. It is an important step for the longerterm. I am sure elon musk will be hoping this mission goes incredibly well and they are able to successfully land the ande components factors take that falcon heavy for it the program. Manus good to have you with us talking us through this. They referred to this is one of the most difficult launches ever. Big bang military mission. Why is it being labeled . Ofit is complex for a number reasons. As you mentioned earlier, 24 different satellites onboard. It is falcon heavy. There are three different orbits area they are launching the satellites into four different [indiscernible] there is a lot going on with it. Theres a lot of focus on that and a lot of important missions. Manus thank you. Of big bang launch military mission. Rocket and 24vy satellites into space. Europe it for daybreak . We are handing it across to matt studio to is in our take you through the next hour and a half of markets. Good morning. Matt good morning to you. Watchingng to continue this falcon heavy mission. It is the first time they have launched a falcon heavy rocket at night. A. M. In Cape Canaveral where the iconic Apollo Missions were launched and it is the most powerful rocket in the world. With 5 Million Pounds of thrust, it is the most powerful rocket ever since the saturn five rocket that launched the Apollo Mission that put men on the moon. Interesting to see hope and so much thrust and if they can recover all the boosters, the idea behind spacex is that you want to reuse these incredibly expensive falcon nine boosters. The falcon heavy is made up of ofee of those with a total 27 engines and so far, they have managed to land a few and they are reusing two of those right now. This is the issue for elon musk. He will save money and make it more economically feasible to if he things into space can continue to reuse these rockets. Last time they launched the falcon heavy, they landed two of its boosters at Cape Canaveral and they landed one on their remote drone ship which is, i think it is called i still love you. That is the name of the ship. The drone ship was rocked by heavy seas that knocked the main booster back into the ocean and it was lost. It will be interesting to see if they can recover all three of those boosters from this falcon heavy launch and then reuse them on the next one area that is the idea. That is where the profit is made as opposed to elon musks competitors. He does have also a more powerful engine, a more powerful rocket than any of his competitors as well. Twice the power of the next guest competitor. 63 63,000 kilograms of payload into space with that much boost. He has a reusable shell that goes around the payload. They will drop that shall as well when they are done using it and try and recover it. They are using the shell that was recovered last time from the last launch. Last time the falcon heavy took one big satellite, a 6000 into space. Tellite this time they are taking a couple of dozen satellites into space for a number of institutions including universities. The first time they launched the falcon heavy rocket, they shot off elon musks red tesla roadster input it into orbit around the sun with a manikin sitting inside. I think it was called. This time they will start to beef up their commercial try to makestart to money from reusing these rocket boosters. We are looking at those 27 motors right now pushing this thing up into space. Matthew is still with us. How much money do you think they more efficient is a when you reuse the boosters or how much was wasted previously when you watch them disintegrate into the atmosphere or drop back down into the ocean . Matt it is a good question. About 60 million per falcon. The gives you an idea of magnitude of the cost. There is the speed of turnaround aspect. Spaceflight is getting a lot more routine. Some people are talking about creating this highway into space. Going to the moon and towards mars. The spacex program, they want to turn around rockets and somethings else to recover boosters and refuel them and let them back onto a rocket again. Anna good morning. Thanks for taking us through these pictures. Let me ask you about the valuation of spacex. A lot of excitement about the ability to reuse some of the technology that had been treated as fairly disposable in space missions. I understand spacex valuation it is a venture backed business. What do we understand about the valuations that could be attached to this kind of business . You worked for bloomberg intelligence. Matt we dont know a huge amount about the financials of spacex. Funding. ve equity those people are putting that kind of valuation on a speculative forecast about where the program could go. Anticipating a 34 billion price tag that will go towards that concept i talked about. Andng a routine commercial military missions going up almost on a daily basis. In the immediate tech arena, talk about lift and some of those private market valuations that are Gas Companies are developing into, this kind of maturity can end up being misleading. It could have been a relatively small amount of money. Raising up to the 30 or 40 billion valuation. We are watching now for the boosters to land safely. I assume it will be the same procedure as last time where to being back at Cape Canaveral and they land one on their remote drone. I still love you out in the ocean. This is the first spacex heavy launch not only at night it also to carry a military payload. They will have satellites going and am nasa, from noaa, number of universities. It is also a certification program. This is the program that the u. S. Military will use to jobs. Y spacex for further what kind of jobs does the military have for spacex and how many more satellites can we put up there . You assume that since we have been throwing them out of orbit since the 1960s, there are a lot of satellites flying around the earth at 10,000 miles an hour. Matt there is a lot of space debris. When you look at some of the projects, there are thousands and thousands of satellites going up creating a communications network. As you said, this is an important step for spacex to get certification from the u. S. Military to more missions like this. Donald trump has created this space force, there is a lot more focus from the major powers orationacex spacex and strategic defense. You could see spacex involved in some of that stuff into space also. The other aspect of this which is evolving is the crew program. That is their role in taking u. S. Astronauts back to the International Space station since they shut down the Space Shuttle program. Were has been relying on russia to put their astronauts up there. In november when spacex and boeing with the star liner will be looking to send astronauts from the u. S. Up into space and toward the space station for the first time in a couple of decades or more. Anna we are waiting to get clarifications whether the boosters have landed. That would be progress in this space mission. This is a launch that is serving a number of customers, number of partners from nasa to University Research projects, what is the payload like . Matt they have some interesting names. Arepsx cosmic 2, they experiments, testing concepts that the u. S. Military or u. S. Universities are working in conjunction with the met u. S. Military are testing. Advancedally positioning features helping her car navigate. Going on the new green rocket fuel they are testing. There is also to things going on. This is complex and that is why elon musk positioned this as big bang because there are so many things on their, midto longterm contributions aboard the u. S. Space program. We have seen confirmation from spacex they have landed boosters at landing sites one and two. The question i have is whether ,r not those landings have been have seen the boosters come down in tact and land well and whether or not we are going to lose one of them over the edge did lastat drone as we time. I am assuming we will get confirmation at any moment and we will bring it to you. Very interesting to launch that launch of the most powerful rocket in the world. Thanks for accompanying us on that journey and we will see if the profitability side of this if spacex was able to land and recover all three of those gigantic falcon nine boosters from this falcon heavy launch. Anna what elon musk described as his most difficult lunch. Lets move on to geopolitics and get back to markets. 7 44 a. M. In london. Reset the conversation about iran. To path ispath closed. Joining us now is bloombergs government reporter. Good to have you with us. How well the sanctions impact on iran . Reporter iran is on their heavy sanctions from the u. S. And all the Major Industries and sectors from banking sectors to auto energy, allomatic, these are under sanctions. Bands on additional senior officials including the theest authority in iran, ayatollah, will these impact the economy . Probably not. Symbolick at it from a perspective, it really has a lot of weight. It does raise questions with the iranian authorities as to whether the endgame is to promote diplomacy or start negotiations or is it by targeting the top officials, is it change the Trump Administration has in mind . Matt thanks for joining us. Talking to us about the increasing tensions in the middle east. She is Bloomberg Government reporter in terms of in coverage. U. S. Futures are down with european futures as traders reflect on the latest developments i in iran as trade. Havenase in safe assets pushed higher. The green arrow it is still down but 2 even. On thebeenthe green down to 1. 10 year. Lets get to the Bloomberg Markets mliv came. For about what is going on. I wonder how much is the iran issue what we see weighing on markets . Is this more about iran todays and it is about china . Think in china today it had a pretty shocking day, chinese markets. Was the situation, that straw that roque the camels back when it came to risk assets more broadly. Chinese stocks open down. There have been a number of reasons building for that. The biggest trigger today seems have been concern of side some of chinas banks will be hit by penalties because of a court ruling in the u. S. On north korea sanctions. Big part of the main indexes in china. Them to Tech Companies also under pressure also lead to trade dispute concerns there with huawei and some of the other calls for trump to be tough on i. T. And the rest of it, china is having a bad day and the iran comments as they highlighted the way that the tensions there in the gulf are not going to go anywhere and a seems like every day brings small ratcheting up in concerns from the region that supplies so much of the worlds oil. That set off fresh rallies in haven assets. You are mentioning gold. Gold was doing well before the iranian comments came out. Anna let me ask you about the gold price. The question of the day, is the rally the real deal, is it a blip . What are commentators saying on the subject of gold . Is eld the gold rally has got its own buzz. Big part ofess is a that, especially the source of that dollar weakness and i think the relentless bid on where the fed is going to go, that takes away the yields advantage for the dollar and has everyone rewriting the dollar is a haven assets and gold as a traditional hedge against the potential for inflation to rise as we get a strong breakout in oil and also the fact that the lower u. S. Interest rates will go, the less it matters with gold. I think this rally has a fair [indiscernible] kiwiially as we saw the dollar gaining today which makes no sense in a risk off environment. That is all about the fed and Interest Rates. Central bank is scheduled to meet tomorrow and it is expected to leave rates on hold. That seems to be enough to set off gains for that. Aht is rising and so as the aussie dollar. The move in the currency markets to go into anything that is not going to have a rate cut and that is going to make europe, this cycle of rate cuts will get fueled, it will spiral. Also the fed cuts sets offset other other Central Banks. It limits the Exchange Rate channel impact of Interest Rates rate moves. Interest rate moves, you bring gold back into play. Absolutely. A lot of people focus on the nominal rates and if you are a dollar investor and you have to percent core cpi, the real yield is zero. If you are a foreign investor and you see dollar weakness ahead, you have to be worried as well. Thanks for joining us. You can join the debate on todays question of the day, is this rally in gold the real deal the real deal if youve got the mat 1200. Just reach out typing ib plus tv. We are minutes away from the opening. We will bring you the stocks to watch. This is bloomberg. Anna welcome back. Youre looking at live pictures iranian leader speaking. Ignoredhe u. S. Drone several warnings is his reason why iran shot down the drone. Tv. King live on state following donald trumps. Ecision lets talk about what is happening in the markets. 5. 5 minutes to go until the start of trade. Ande looking at gold miners tech giants covered. Lets come to you first. Gold is on a tear again, even those miners in south africa and it searches past 1425 an ounce. On, thist is the story makes me think of rockets as well but it has nothing to do with rockets. What is the story on gemini . It agreed to buy for 14 euros a share, 2 premium. Closing price [indiscernible] u. S. Shares jumped 65 and we will be watching today. Anna k p. M. . The ceo is weaving september 30. He has served for less than a year. Shares go lawyer lower. Anna we have the latest on equities. Markets seenties opening lower. This is bloomberg. A minute to go until the start of cash equities trading, this is how markets are positioned in the Asian Session, down a quarter of 1 on the msci asiapacific. Off is therisk sentiment in the Asian Session. Oil prices are a little bit weaker despite tensions coming through the middle east, and despite a lack of progress on opec and opec plus. Higher, theg question of the day is around the gold spot price its interesting to see money going into gold and the yen. Part of that is tensions between the u. S. And iran. We are looking at live pictures of the iranian president , speaking on state tv. He says the u. S. Is lying about wanting negotiations. He was also referencing the new sanctions, the supreme lawyer has been subject to sanctions. Sanctions are shameless and foolish. Thats the latest on the iranian story, very close to the market. The market is intensely watching oil trading and whats going on between the white house and to run. How close to the brink are they, and how quickly are they bringing it back . Lets have a look at the European Equity markets as we get trading started. It seems the trajectories are weaker at the start of trade, that risk off picture in the Asian Session very much in the minds of markets could be a holding pattern. Maybe investors are not seeing a reason to get out and buy ahead of the g20. Jerome powell will be speaking later on today over in new york. With all of that in mind, no surprise that we are opening weaker, down by. 4 on the csi 100. Lets have a look from a sector perspective at where we are. It looks as if we have many sectors in green. Information systems is one of those that is moving to the upside, but the rest of the sectors look to be a negative territory. Information systems could be to do with gemini and l trend. We are waiting for opening prices on those particular stocks to get a take on whats happening. Lets get into the individual movers. This is where we could see some interesting moves. The mov function on the bloomberg is telling me that we have the biggest gain or at enzo, some of those tech names moving a little higher. Onknow the upgrade to itv that particular stock is up by 1. 5 , on the back of that upgrade. Stocks see one of those that was glimpsed moving to the upside. They have had an upgrade and they also mined gold. Lets get to the downside. A little bit weaker this morning, and boo down by 2. 4 . The ceo resigned over at kpn effective at the end of december. So we are looking at European Markets right now, opening lower acrosstheboard, 2. 5 minutes into the session. Aat is as to run says that path to a diplomatic solution with washington has been closed, not temporarily, but for all of eternity. The president says the white houses actions were confused and senseless. The comments come after u. S. Imposed sanctions against irans Supreme Leader, the ayatollah, and other top officials. Head ofus as the European Equity strategy at barclays. I have to ask about this kind of geopolitical tension it is so hard to build this into your model. See this coming from months away but certainly from a few days what do you do when you get into the office after you hear the president has decided not to attack at the last minute iran or that he has put sanctions on the ayatollah . Largely focus on the activity backdrop and i think the backdrop for the market right now, we want a flowing Global Economic growth and that is something we have been hedging in our portfolio and risk allocation at the start of may. We advise more clients to have a balanced portfolio and we can have some hedging with theorists we lagged in sector which is a good hedge against escalation in the middle east. The market and some of the trade sensitive sectors weve lost portfolios based on fundamentals but all this geoPolitical Risk is getting more and more relevant to the Investment Case so we try to hedge. Good morning. Iran urginguhani of the u. S. To do the right thing with iran, as rouhani speaks on state tv over in iran. Let me ask a bit more about this oil boom. Findis a good play to cheap hedge against potential escalation. Does that mean you expect oil prices to go higher from here . We had this recent round of sanctions, the iranians are talking about this, yet oil prices are a little weaker this morning. You expect this to add upward pressure. The slowing economic environment, which could be provided capital, all of this to the economic activity. There isher hand supervised destruction and we think the ongoing tension will flow to the oil price. We think the oil sector is benefiting which is cash flow generated. There is ample room for the dividends, and it has a backdrop of a depressed Interest Rate which seeks dividend yield income within equity markets. They are hedging against Political Risk but overall income to investors. Scenario of aeme military crash which im sure Everyone Wants to avoid. Had annt trump antiinterventionist, Antiwar Campaign platform. But if we did see a military clash between the u. S. And iran which sectors do you want to own or do you want to be out of stocks entirely . Such an event, which looks quite extreme, i think would be negative for full risk asset, and i would believe that the lookal safe havens would at staples, health care, utilities, which are very domestic and defensive would do the job. We think there are many ways to scenarios, but definitely along with the oil sector it will come from the rising oil price. Towould provide hedging investors and a dull and negative market. Thats the sector perspective this takes back conversation and i have a chart that talks about the worrisome signals from the s p 500. We were just talking about new highs, a bullish story for stocks, but what does it mean Going Forward . This is the performance of small caps in transport and both of them have been deteriorating. Some suggest this reflects the many worries and suggests bad times ahead. I think the market is very misleading. There is extreme polarization between value and growth, economics at the start of the lastt the main reason month following the may banks,ion is for central which are forcing investors to andp the risk curve attempting the equity markets, economically sensitive areas. Market equities havent transportation and small caps have done fairly badly. They have performed quite poorly in the past couple weeks so even though the market is going up it has been a very defensive leadership. All right. You will stick with us. Equityd of european strategy at barclays, our guest cohost for the hour. Up next, a big tech tie up. Cap gemini buys all trend for 3. 6 billion euros to expand his engineering network. That stocks storing this morning, up more than 8 . We will speak to the ceo. When their this is bloomberg. Will come back to the European Market open. 11 minutes past 8 00 here this tuesday morning. Breaking news across the bloomberg and we have been following this story closely, six funds lost almost 8. 4 billion euros on friday. Allegra funds declined by more than 300 Million Euros on friday, so this is some handle on the extent of the declines in the asset managements we saw, part of the affiliates. Vocalthey offered very support to the measures being announced by its embattled affiliate, as well as reiterating its business model, trying to ride out this particular storm that has knocked the share price off the chart. Separate to this we are also getting breaking news on a white house related story in asia. Exactly. A bloomberg scoop, that President Trump has been talking to people close to him about pulling out of the 60yearold u. S. Japan military treaty. President trump thanks, according to people familiar with the situation declining to be identified, that the treaty is unfair to the u. S. , because it promises onesided aid payments from the u. S. To japan in case of a military issue. Japans official response is that the u. S. Japanese military packed is not under review, which would make sense, because according to the bloomberg story the president has only discussed this, he is mulling it with a few confidants, not that he has officially called for a seed to that treaty, but japan still responding but as far as they know it is not under review. Dani burger has the individual movers for us. A lot on the move, kpn is falling today, down nearly 3 . Reportedly he is going to comcast, and will maybe run their italian pay unit. He has only been at kpn for yes the new year, shares taking a hit on that. Dansk bank, another scandal emerging, this time over overcharging clients. They lost one of their most experienced executives out of the top 10 executives. He had been at the company for the longest period of time. To switch things up, heres a stock moving to the upside over m a news, buying all trend and a 3. 6 billion euro deal, helping them expand into software networking. Analysts is a to potentially transformative deal. Thanks very much for that. Lets pick up where you just left off. On the phone from paris to we have the ceo of cap gemini, very good to have you with us. Could you clarify some of the benefits of why were doing this deal . The stock is up by 5. 9 . Against whom will you be better able to compete now . Good morning. While bc is what we call what we see is what we call digital, the eruption of i. T. Information technology and everything in our life. We spoke of marketing the way manufacturingis that goes beyond manufacturing and all industrial process. Its a specialist of Product Development improvements. Y are together will serve an example of 5g. We would have worked before the transaction on Data Architecture on the network integration. They would work on the Product Development leverage that will enable realtime transmission between devices. Together it would be a pioneer of that digital manufacturing. Good morning, paul. Matt miller in frankfurt. Is the u. S. China trade war making it more difficult for all trend to work with some chinese clients, for example with huawei . Absolutely. I would say 5g is very sensitive because 5g will be the real disruption Going Forward in manufacturing. Will the chinau. S. Management,hold ip mainly in europe and u. S. . Our main frontier is the united arees and its company we looking at a list of occurrence so until we see microsoft we become very active on the new Software Engineering front. This is the biggest deal you have done since the year 2000, i think. Does that throw up any questions for you, any difficulties in terms of the size of the task that lies ahead . I was instrumental in early acquisition. That one proved very difficult because it was a private partnership. The people they say are running the company it is far closer. Its a good company originated in france. We share the culture of technology. I regard that as really easier, and i think that will be integrated in a very few quarters. This questionsk when an executive has just on a major deal because i know you want to focus on the work in front of you, but it always raises the question anyway where else do you want to expand . Thinkother areas do you they need to add capacity . I would say asia. Japan is not that open for Foreign Investment in china is very tricky. Autopport german manufacturers and u. S. Manufacturing in china, and we become the Automotive EnergyReference Point in china before we require something significant. Ok. Thanks very much for joining us. The ceo of gemini, speaking to us on the occasion of their deal to buy all trend. We are keeping an eye on both of those shares, certain shares moving higher. Coming up, we will be speaking to the hsbc ceo, an exclusive conversation, one of a range of topics in our emerging and frontier for, which takes place today. This is bloomberg. Welcome back to Bloomberg Markets, this is the european open. I am matt miller alongside anna edwards. We are about 25 minutes into the trading day right now. We are looking at drops across European Equity indices and we are also looking at futures that are down in the u. S. Emerging markets are where i want to focus, it represents the dominant share of the Global Economy and population, yet received marginal investments from Global Asset Managers into businesses. The msci emerging market indexes have a value of 14 trillion, while Frontier Markets only makeup 324 billion. Dani burger is here to tell us why investors should be paying emerging markets and Frontier Markets for attention. I have those numbers you just said on the board, you can see that Frontier Markets are relatively minuscule compared to developed and emerging markets. Frontier participation is definitely less than the rest of the world from Foreign Investors and there are some restrictions that make it more difficult for some investors to get in. But now just might be the time to be investing in these markets because when you look at volatile times it can be a good move for your portfolio as risk diversifiers during periods of searching volatility. Over the past two years, much of the frontier market assets have been left volatile, more subdued, partially because theres less correlation, more idiosyncratic issues that take place. While adjusted returns may look better for Frontier Markets if you strip out the volatility and look on a total return basis they have underperformed in the past for calendar years but just at the end of that chart you can see they have edged a bit higher with a lot of different factors driving these returns but we have economic shifts driven by the trade war and uncertainty in oil markets as well. Bloomberg, wen have a number of interviews with top newsmakers and executives from around the world as part of our emerging and Frontier Forum in london. That includes the Renaissance Capital chairman as well as indonesias finance minister. Thank you very much. Dani burger with the latest on emerging markets. Emerging markets have been buffeted by global trade tensions and unstable oil prices. Lets talk about em with the head of european equities strategy who is with us on that. As danny was going through the emerging markets, very much in focus, is that something you think supports emerging markets or does the trade tension override that . Em is facing opposite forces at the moment. Dollar to weaker support some part of the emerging markets, and we have seen inflows coming back to emerging market debt. Hoping for new emerging markets which is attracting investments. Marketsrt of emerging and it is not benefiting, because it is constrained by weaker chinese economic backdrop. I guess heading into the g20 summit we have a risk for em equities so that if we have some deescalation in the u. S. And china, that could give some Business Market equities but of course we are looking at allocations. Dont federate cuts help emerging Market Companies . Its not just about the currency but also about the fact that a lot of these companies and economies have dollardenominated debt that they can sell. Now, we i would say for think that the weaker dollar is coming from fed policy, hence part of the emerging markets space. Ecb will ease policy as well heading into september and the rate differential between the u. S. And the rest of the world even in the short we are kind of anticipating a shift in fed expectations, at this em fixed income. We have seen emergingmarket currencies stabilizing in the last couple weeks. I would add that a number of Central Banks and emerging markets will be in position to cut Interest Rates. We will have that kind of economy. No doubt that will be talked about in the forum taking place. Thank you very much. The head of European Equity strategies at barclays sticks with us. Coming up, we speak to the mayor of london, later on this morning. This is bloomberg. Matt top headlines for you off the bloomberg terminal. Iran crackdown. Trump put sanctions on the countrys Supreme Leader. The path to a diplomatic solution is shut forever. Gold settlements to a sixyear high. Risks mount ahead of this weeks g20 meeting. Tech tieup. Both stocks are soaring in todays trade. Good morning. Welcome to Bloomberg Markets. This is the European Market open. Im matt miller in frankfurt today. Hime re for im here for a conference on e. T. F. s. Anna 30 minutes into the trading day. 436 stocks on the stoxx 600 are trading weaker this morning. Talking about risk off moves in the market. On the german bond markets, the german 10year bond yield has fall on the minus 0. 33. Money coming out of stocks, going into fixed incomes. That trade continues. This is upside on European Equity markets. The m. O. V. Screen showing you where the gains are coming from. Some of these coming from one of the stories in our headlines. 5. 4 to i shares up by even the purchase here. Their share price is going igher. That stock up the most in two years, over 6 . This is a gold mining business amongst other things and that stock had an upgrade. Gold prices goings higher. Highest since 2013. That adds to the upside. Lets look at the downside on the m. O. V. Screen. We have iliad. Downgrade to iliad. Downgrade to royal mail. From various brokers around europe. K. P. N. Down 2. 5 . That is because the c. E. O. Stepped away from that business. 4 well keep an eye on that. Further headlines on the extent of what you saw from h 20 during fridays session. President trump has imposed sanctions on irans Supreme Leader. He said the penalties would deny the access to financial resources. Trump claiming irans Supreme Leader is ultimately responsible for the hostile conduct of the regime. President rouhani speaking in the last hour saying this shows the u. S. Is lying about wanting talks with iran. The president has held the door open to real negotiations. To completely and verifiably eliminate Irans Nuclear weapons program. Its pursuit of bullistic missile systems. All that iran needs to do is to walk through that open door. There are cost of ensuring middle east Oil Shipments is soaring. After Tensions Mount in a region that is responsible for about 1 3 of all sea born petroleum. It can cost upwards of 500,000. Earlier this year, the same insurance would have cost less than 1 10 of that amount. Dallas fed president has sounded caution about cutting Interest Rates. He said easing policy could add to economic and market imbalances and it could be painful to imagine. He said his best case is for solid Economic Growth this year but that Downside Risks to the outlook have increased. Spacex launch its falcon heavy rockets to the u. S. Military. It was a nighttime liftoff that elon musk called the most difficult ever. It launched at 2 30 a. M. Local time. It carried 24 satellites to nasa and the department of defense and others. Global news 24 hours a day. Powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thank you. Lets get the final thoughts of our guest, head of European Equity strategy at barclays. I want to get your thoughts on the equity space then and the extent to which it is unloved by investors . Do you think the market has got it right . They are facing many risks. Olitics. However, yesterday, the market European Market is bearishness and the lack of positioning from investors. We think there is a little bit of a disconnect. E think there could be some happening in europe along with the risk of trade and politics. We have seen some investors could come back to europe and look for pokets. Possibilities. Matt in terms of very cheap opportunities, i think instantly of the bank that you can see behind me here. And other european banks in terms of unloved assets. Would you go as far as dipping a toe into frnls or are they unloved for a reason . They are unloved for a reason. Were not advising our clients to come to banks. The allocation earlier this year, were seeing the backdrop f dovish low Interest Rates. Ere seeing lot of negativity. The bull market reflects a lot of concerns as well. We think it could be interesting. Priced higher. Not yet the banks. Anna you talk about stabilization in yields. E yield falling to minus. 033 . Not exactly stabilizing. U. K. Stocks. What do you make of u. K. Stocks at the moment . Clearly a lot of politics at play but then there is the exposure to commodities. It is by far the most everaged commodity sector. Large add that the cap in the market. The u. K. , ftse 100 type of thing. Which currency that supports the u. K. Equity market and the e commodities, anna healthcare. We very high something find rare. Matt brexit doesnt make a difference to that forecast . Whats your expectation for brexit . Will we see the u. K. Leave in october . We think so. There is negotiation. We still believe a soft brexit is likely. Again, as an investor, you probably have to edge against different outcomes. Not all of them are market friendly, i would say. I believe an extension is a possibility. The lack of clarity and ftse inty would keep 100. Matt thanks very much. Head of European Equity strategy at barclays joining us as our guest cohost. Now tehran says the path to a diplomatic solution with washington has closed forever. As the u. S. Imposed sanctions against irans Supreme Leader and other top officials. President rouhani says this shows the u. S. Was lying about wanting negotiations with iran. Joining us now is bloombergs government reporter in charge of our iran coverage. Let me start with the first question i had this morning, when i saw the president was going to put sanctions on the ai tolla. How. What does he have that President Trump can reach out and touch outside of iran . Well, i think we have to see whether this move is going to be impactful. It is questionable because iran under heavy sanctions from the energy and shipping to Metal Industry and aviation and you name it. What this really is is significant. Youre talking about the highest authority in the republic. This person is now targeted by u. S. Sanctions. It is really rubbing the iranians the wrong way. The iranian authorities because what they have saying now is if trump after negotiations and talks and wants to open the door to diplomacy and have the irans on the table why are you targeting the top officials in the country . The suspicions they had before, perhaps the Trump Administration was seeking regime change in iran, that really is being with the latest measures taken. Anna i the u. S. Would point the finger at the downing of the drone. What has the reaction been from tehran . What we think since last night, the ambassador to the u. N. Saying that we think we cannot open dialogue if youre threatening and intimidating iran. We also have the Foreign Ministry just this morning saying that you know, this maximum pressure truly is in fact causing the closing the path to diplomacy forever. The president had very strong comments along the same lines saying that the Trump Administration is lying. This is not diplomacy that they are after. Matt what about the response of other countries in other regions. We know mike pompeo has gone on tour in the middle east to try and scare up the coalition against iran and we also know that other countries outside of the region like china have kind of weighed in on this. What are the responses outside of iran . U know, there has been they have reacted one way or another. What were really seeing is the concern that the tensions are being fueled and perhaps it is not the right way to go. When we have been seeing european officials commenting and saying for example, maximum pressure from the Trump Administration may yield results but only if it is matched by maximum diplomacy pment otherwise it may just take us to more confrontation and be absolutely fruitless. So we have really seeing this concern among even allies of the u. S. But also the allies or countries that have from a economic or political perspective, such as china or russia that you named and here in the region, speaking from the i think there is also that this concern is also very much being felt here, that trying to ing to prps bring th better results and toning down on the confrontation side. Anna thank you very much. China saying the maximum pressure may not help in iran. Bloombergs government reporter in chargor iranian coverage. Up next, some of the stocks on the move this morning. More outflows during fridays session from h 20 funds. This is bloomberg. Matt dont miss the boston pops fireworks spectacular live on Bloomberg Television at 8 00 p. M. Eastern time on the fourth of july. If you havent experienced the positive energy patriotism of the fourth of july in america or the brilliance over the boston pops orchestra or the firing of the howitzer 100 millimeter canon in a safe environment, i recommend you check it out in person one day. It is an incredible event. Danny, dani, what have you got . I wish ith more fireworks to give you here. Sentiment is about the gold and ld miners say it is near a sixyear high. This is trading at about a fourmonth high. We are seeing some other gold ove to the upside as well. The italian bank denied it is mergeing with carriage. That is sending shares down 1. 5 . Finally, we have been looking at this story today. Fund. With the h 2 o 0 we got numbers from friday. Outflows 1. 4 billion on friday. That is giving the share some downward pressure this morning. Anna thank you very much for that. Were joined by bloombergs european credit reporter on the set with me in london. Good to have you with us. We heard about the extent of the outflows from h 20 on friday. Is that the normal amount of transparency were getting . How are they doing it, stemming the outflows . We get to the outflow numbers in about one working day. We just have fridays. Well probably get yesterdays later today. Or early tomorrow. The mutual funds that they run. They have daily liquidity and regular disclosures. Anna how have they been handling this . We heard they are doubling down on their commitment to the business model. This story is about a week old. Riginally h 20 were dismissive of this. On friday, and then over the weekend, they responded more aggressively. They have marked down the value f particular problem assets. They said they sold a large portion of those. They have acted aggressively in the last few days. What remains to be seen is if that is enough to calm investors. Anna from a big picture perspective, this is another example of the classic mismatch between the ability of investors to withdraw money from a fund and the lack of ability for the fund to sell the asset and find the money. It is kind of groundhog day. This is the third time Something Like this has happened in less than a year. We had from july 2018, the problem assets in the portfolio folio have still not been sold year later. Stocks rather than debt securities. A similar story, liquidity was very much in doubt. Investors started to panic. What they are trying to do is avoid the fate of gam and woodford. Anna thanks very much. Bloombergs european credit reporter. Up next, it is a battle. Stay with bloomberg for that. Anna welcome back to the european open. 55 minutes into your trading day. Time now for battle of the charts. Why dont you kick things off . Gold again today. What is so interesting, the Inventory Data moves in tandem with the gold spot stock price are actually diverging. There is a drawdown here which is going add more fuel to the price were seeing. Anna ok. That is the gold story. Dani, what have you got . Im looking at how wild this bond market rally has been. Im looking at swiss debt. In order to hold half a century of swiss risk you are getting paid basically nothing. Three basis points at one point was absolutely flat zero. Just showing you how wild it is and what investors are doing with a Duration Risk when it comes to the bond market. Anna im going to go with anne maries chart. See the mining one of few performing well. Im going to go with you on this one. I like the gold story. Also like the bond story dani. I was looking at a great chart yesterday, the various bond products in germany. How soon are they going to end up in negative territory . We will wonder. What is going on in italy . Wont be ey sanctioned by the e. U. This is bloomberg. Risk off the table, tehran says new u. S. Tensions close the diplomatic path forever. Stocks take lower ahead of the g20. Cut caution. Robert kaplan says hes concerned rate cuts could fuel imbalances. Jay powell speaks today. The emerging in Frontier Forum kicks off. We are live at the event, where we hear from john flint in around 20 minutes. Welcome to bloomberg surveillance. Francine lacqua is at the emerging and Frontier Forum here at our london headquarters