I think it is needed for the current condition of the market. Nejra and burning the midnight oil. European leaders pull another allnighter in the search for the next European Commission president. We are live in brussels. Manus a warm welcome to daybreak europe. Oil is higher this morning, brent is up by 1. 5 . There is word on the street below me about certainty, about a surety. Those are the words from the secretarygeneral. The consensus is building. Termsonths is offered in of an extension to the opec cuts. Putined bin salman and agreed this before the delegates arrived. Nejra, good morning. It is a gorgeous day. We will be chasing ministers, we will find out what a ninemonth extension for the current cuts could do for the market with trump and xi talking to one another. Nejra absolutely, and that is the key link. Good morning to you. Because we got that agreement that could be rubberstamped at the opec plus meeting over the g20 weekend. It is interesting how important the g20 has been to the oil markets. We have a truce, heavy on hope, light on detail. A line i saw earlier. Drop fore first weekly u. S. Equities, but futures are on the front foot. The 10 year yield moves higher, up to basis points. Having north of that handle. The focus for traders now turning to the jobs data in the u. S. At the end of the week. The cuts have not changed much off the back of the trade truce. It begs the question for how long the risk rally could go on. We have dropped below 1400 an ounce, dropping the most in more than a year. Lets check in on the markets in asia. Juliette saly has more for us. How is it looking today . On here asery risk well. That money coming out of safe havens like the yen helping to push out japanese equities. You see a huge rally coming through on chinese stocks as well, as you would expect. 5 going up by two a by 2. 5 . Lets play catch up to the rally tomorrow. You are seeing broadbased buying despite disappointing data out of the region. We had the survey in japan with estimates, we had south koreas experts falling for seven months in june, and we had the pmi data out of china over the weekend. And the number coming in at its lowest reading since january. All of these are due to the concerns over the trade dispute. But certainly the trade truce giving a boost to stocks. In this tech space, we see the most momentum. It was a bit of a surprise reprieve, and easing in terms of the huawei restrictions. We have seen rare earth players coming under pressure because that was one sector where it looks like china could use ass could use as momentum. Much. Thank you very iraniantures of the envoy for the opec meeting. Some lines coming through. The team is out on the streets. He says we should think about who benefits from the current tensions. Iran will reject. Hordern on theie ground speaking to him. Lets listen in. I dont think it is the time to discuss about this matter i opec shoulduse receive unity inside opec, and it is not acceptable to opec members fighting against some other opec numbers. As donald trump in the u. S. Push sanctions against the iranian economy, what is your message to the u. S. President . Is better if you wants to change something, they should respect the iranian nation, the government. With very important increasing the pressure. We dont change our position. It is better to respect iran, the leader, and the administration of iran. And the first acceptable step i believe is a necessity to leave the sanctions against iran, and then they would see many changes in the environment. [speaking foreign language] language]ng foreign thes that is zanganeh, minister of oil for iran. He is calling for respect in regards to iran, if the u. S. Wants change. He is demanding respect. Iran is not officially selling oil to europe, and he also says this is the European Response to the sanctions on iran. It is a vehicle the europeans are using. It will not work if we cannot sell our oil. A six orneh supports ninemonth extension in the packed. In the pact. Consensus is building. The question is, do we end up with a six or ninemonth extension . Live pictures from vienna. That is why we are here. Nejra totally worth it, great to have you there. The second reason we are seeing oil jump today as well is because of news of this trade truce from the g20. Stocks in asia climbing along with u. S. Futures in the u. N. After the u. S. In china declared a truce and china declared a truce. Trump said he would hold off on new tariffs and scale back on huawei. The white house Economics Council director says that trump is not giving the tech giant a pardon. This is not a general amnesty. They will remain on the list, and the National Security concerns will remain paramount. Nejra we are asking the question, how long will the post g20 rally in risk assets last . Reach out to us on your bloomberg. Joining us for the hour is jane foley. Great to have you with us. Ja we do have a trucene . We do have a truce. Doesnt this remind us of what else rs of buenos aires. Isnt this what you are bracing herself for . Jane most people in the markets see this. Also in recent months, the market has been focusing on other different issues. This is the word containment, which is coming up a lot, is particular with respect to both sides. Force tong china as a be reckoned with in terms of military, economic might. This is good news as far as we do have a truce. It could be worse. But i think this is very much in line with the consensus. This is what the market anticipated. Imagine over the next few months, even the next few be change oneill level or another. We will diganus into the fed in more detail shortly, but i am tempted toward the dollar. It is up 0. 3 . Haven currencies are offered, yuan and swiss. We are seeing those haven assets coming off in the dollar is stronger and that the dollar is stronger. I thought this might be the best opportunity to sell the dollar into these moments. What do you reckon . Has itse dollar functions, and i think it is interesting that you talk about havens and the dollar. Is the dollar a safe haven or not . For many investors, it is. But on the other hand, people are trading it with respect to the Federal Reserve and expectations. Some people over the weekend, we have got some sort of improvement with the trade issues. Does that mean the fed is under less pressure . That fact is coming through on the dollar as well. It is a very plain positioning. I think maybe the selloff in the dollar a couple weeks ago was a bit overdone too quickly. Some people are repositioning after that move as well. Nejra even though we have seen the yuan strengthening, the aussie has not been pulled up with it. It is ever so slightly weaker. We have a Rate Decision coming tomorrow. Bloomberg survey says we will have a cut of the benchmark rate, 1 . With the opposing forces, which is stronger, trade truce or outlook for Monetary Policy . Jane i think it is the outlook for Monetary Policy. If we go back six months, nine months, the outlook for australia has changed quite significantly. We have already had significant cuts from the aussies not long ago, in the market is exacting and the tomorrow market is expecting another one tomorrow. They have moved quick in decline in Interest Rates. The good news from that is it does appear to be adding a bit of support to the market. The marketigns that in australia is finally getting support. Australia is on the front line. The chinese economy is slowing in the market will be concerned that australia will slow and further Interest Rate cuts could be down the pipeline. If you look at aussieyen, it supports everything. 1 t takes me to the tencan. The soft data globally is rolling over. Bye we been a svengalid donald trump in xi jinping in terms of rhetoric . Svengali at work in the markets . Jane i would certainly agree. We are focusing on trade, it is good news that there has been some easing in the trade tensions. But if we take a step back and look at the data, we see bad news from china. Seen news from south korea, another poor export number. This is quite worrying. It does set that picture of slowing down in global growth. At the end of the day, this will be a cloud over emerging markets, overt risky sentiment. This is something the markets once they haveth gotten over the fact that the trade tensions have not worsened. The data is bad, and that is bad news for risky assets. Awe of no shock and trade. Great to have you with us this morning. A lot more to get to. Lets get your first word news. Annabelle jewelers is in hong kong. We saw with President Trump becoming the first u. S. Leader to set foot in north korea. He met kim jongun in the demille tries zone. The two leaders agreed to restart nuclear talks. He says stepping across the border was in honor. Was on honor. Was an honor. Angela merkel has endorsed a leftwinger, and got pushback from her colleagues. He is trying to shore up support for the appointment. Hsbc is reportedly lobbying to commence beijing it is not response over the arrest of huaweis ceo. Provideds hsbc information that helped u. S. Prosecutors build a case against her. She is under house arrest in vancouver after being arrested in december. Kong asotests in hong protesters clash with demonstrators. They mark the anniversary of the return from china. Guests were and moved indoors. It raises new questions over chinas stewardship of the financial hub. Global news 24 hours a day on air and tictoc on twitter, and powered by more than 2700 journalists and analysts in 120 countries. This is bloomberg. Drillers it e annabelle in hong kong. Signals cuts. We will have the latest from the oil minister as they gather in indiana. Manus this is bloomberg daybreak europe. Im manus cranny. Nejra im nejra cehic. Lets get a look at the markets. It is risk on after the trade truce between xi and trump at the g20. Green on the screen with asian equities. We see a stronger yuan, but citi seeing women it gains. Meanwhile after the first drop in four weeks, u. S. Equities last week, futures on the front foot. The attention turning to the data and jobs. Absolutely manus absolutely. If we get a sub 100,000 rating, what will that do to the best on three rate cuts . Are backing off on the 10 year government bonds. Nymex crude is flying high. Consensus is building between sixmonth and nine month extension to the cuts, which will expire. Futures eurostoxx futures, a sense of relief. Svengali or a worker reality in the markets. We have a fed put which is roaring. Good news for stocks, now it is about delivery. Lets get your business flash with annabelle. Deutsche bank may cut more than a fifth of its global workforce. It would be the lenders biggest shakeup in years. The chief executive may approve the loss of as many as 20,000 jobs. Week he wast last working on tough talks with commerzbank. Boeing is expanding. The u. S. Government has subpoenaed records related to the 787 dreamliner. The widening investigation adds to the pressure on boeing. It will also face a civil and congressional inquiry into the certification of its grounded 737 max. In a bloomberg scoop on boeing, the company outsourced software for the 737 max to the engineers. The playmaker relied on temporary workers to test and develop the programming. Some of boeings own engineers feel the code was not written correctly. That is your Bloomberg Business flash. Manus annabelle, thank you. Oil is jumping to a fiveweek high. Reachedabia and russia a deal on the sidelines of g20 to roll the production curves to six or nine months. They worked in vienna to courtney the strategy. Take a look at what the uaes oil minister said yesterday. I am for an extension. I think that is needed for the current condition of the market. Expecting an easier meeting, and hopefully we will see the meetings. My expectation on the numbers is also to be higher than 100 . Manus the Energy Minister for the uae. We just heard from the Iranian Oil Minister zanganeh talking about respect from the United States of america. Joining me is the director of geopolitics and energy for messy global advisors. Six months or nine months, what is best . Guest i think nine months. It gives us uncertainty going into 2020. There has been a lot of concern that we will see sick of get nonopec supply growth into the new year. Whether that is coming from the United States or we will see more oil from places like brazil or canada, for opec to extend this deal to 2020 gives us uncertainty going into next year with concerns about more supply coming to the market. Are opec and opecs plus teams more ominous by pushing that . Mohammad traditionally, it is effort to cut into the demand picture. We have seen concerns over data coming out of emerging markets. A weaker chinese pmi, et cetera. I think it is a positive they would cut into weaker demands. However, at the end of the year, they have to extend the cuts or deep in them, and that could be a challenge. Manus what would it take to deepen the cuts that we have in place at the moment . Mohammad i think it comes down to saudi arabia and russia. Is russia on board to continue to balance the market and what is necessary . I think we have seen over the past two and half years this cooperation continue on the political and economic level. However, are the russians prepared to do another year . Manus it suits the russians to do this because of the contaminated pipeline as we go into the cups of winter. It into the depths of winter. It is expedient for russia. Mohammad it comes from the top down. We saw in osaka where mbs and putin have a good relationship. I think putin announcing before the meeting takes a lot of certainty into vienna, and i think the market has priced that in. If you get a nine month extension, that is the cherry on top. Manus one argument is Mohammed Bin Salman has been preempting this meeting and it disemboweled the very essence of opec. Mohammad this is a bigger question and a more structural question over medium to longterm. Every time we have met in vienna over the last 2. 5 years, there are a lot of obituaries written about opec. But i think the market, certainly we have seen this year, it requires opec to continue these cuts and remains steadfast in their approach. Mohammad oil manus oil hit a fiveweek high this morning. We got this release that china and the u. S. Are talking again. Conversations are happening on global trade. What does that do to the price bandwidth . What is the upper level on this deal . Where does that take the markets . Mohammad i think there could be a risk relief rally for the next few weeks. I think in the near term, the market is wondering what is going to happen with demand. We started off the year with projections of demand anywhere 1. 3 millionon barrels to 1. 4 Million Barrels a day. Very near term, the market is concerned. Manus how quickly could that turn . And europet, japan come in the back half of the year for the negotiations. Mohammad that is true, but i think the market has an eye on 2020. The concern shifts away from demand and more on supply, hence why a ninemonth extension gives a bit of certainty coming into the new year that potentially both the russians and the saudis but continue this. Will continue this. Manus kuwait is busting the limits, and nigeria is looking for a new deal to me quotas. It is not all one happy family. Mohammad it really isnt. When you look at who is taking the bulk of these cuts, it has been predominantly saudi arabia. Manus should nigeria be given additional scope to produce . Mohammad that is a tough question. Some of the crew they have brought in, ive some of the crude they have brought in, i think that will be sold for a bigger quota. However, a lot of them may do not have the capacity. Manus it all comes down to the kind of stuff you bring and what youre doing with it. That is the latest from vienna. We just heard them talking about supporting a ninemonth deal. Rwazahst, mohammad da at medley global advisors. A little bit less hot here than dubai. I will take 25 every day of the week. Nejra you are looking fantastic, manus. Cool as a cucumber. Great to see you. It will be amazing if we do not get a ninemonth extension how much we will see in the market. Could up, deutsche flash slash jobs. This is bloomberg. Manus this is bloomberg daybreak europe. We heard about an agreement during the g20 between saudi and russia. Manus yes. Is apeople are saying this preemptive strike between mohammad bin salman and putin. Brent trading 66. 30. Given the conversation i have just had, they expect a rate cut. It would suit everybody if we get this level of continuity. Those are the words being spoken on the streets here in vienna. We just caught up with it with the iranians. The questionecks how much a risk it would be to the market if we did not get that. Head of the opec meeting, the liberally scheduled after the g20. That is the other side of the coin. If we get further trade uncertainty, that is the downside risk, isnt it . Manus it is. You have got to read the analyst notes. I think who has not made it to this meeting, he wants to see delivery on the trumpxi talks. What would be the real grey swan, black swan . Trump and iran, you have seen him shake hands with kim jongun. There were discussions between the United States of america and iran . I leave that thought with you. Nejra we will come back throughout the show. Deutsche bank, a bit of a break last week. Now the bank is back in the spotlight with plans to cut as many as 20,000 jobs. That is more than a fifth of its global workforce. The german lender may exit the u. S. Equity business altogether. Is ang us from frankfurt Bloomberg News reporter. Great to have you with us. How positively could the market take this news given that it is dealing with costcutting, but not the challenge of revenue . That is the thing you always have when you have cutting on the one side but no vision about where you want to move the company and the bank. Im not sure how positive the market will take it. Something between a half percent and a percent in the premarket. I think it is a good sign for investors, waiting so long to get something significant here. They will take this as a positive step for sure. Manus hes going aggressively now. Is that what the market wants to hear . Im not sure that is what the market wants to hear. There are no other options right now. The merger talks with commerzbank failed. There are no other talks lined up, so they have to do something. The easiest ways to clean up the balance sheet, reduce the costs, and form a new bank and move along the way. I like very much the analyst last week who said Deutsche Bank right now reminds him of the swiss banks a couple of years ago. Deutsche bank might go down that path as well by cutting down Investment Banking and focusing on retail and wealth management. That is certainly the roadmap. Cuts, 3. 6 billion, and he was losing 2 billion swiss francs in the previous quarter. Deutsche bank has Just Announced double that number. Thank you very much. Bloombergatest on our scoop. Lets check with the rest of the markets this morning. Standing by in mumbai with niraj shah. In london, dani burger. Is there a nice rally for you in india . Not quite risk on. I would be surprised if there was a bigger rally. We are looking at numbers three days from now. I doubt there would be anything. We are participating in a muted sort of way. Half a percent higher. Measured, some people would argue both of these numbers have started coming down, they have not been very hunkydory. I doubt they will have a big impact. Back to you guys. Nejra thank you. Of dani, we are seeing a lot risk on with the g20 out of the way, but we have not gotten anything substantial. You could argue. Would you call this euphoria in the market, or just relief rally . From my view, what im looking at, which is always the wonky, the options, a lot of this is just hedges coming out of the market. I have s p foreign volatility looking at asset money option. You look at the first bar on my screen, the event risk priced in for the g20 meeting passes, so we no longer have this event priced in. You have the rest of the volatility picture, looks pretty benign until that next blue bar, which is the fomc meeting. That is not that large of a volatility premium. Nearly certain the fed will cut. Still, it looks like things are going to go back to normal. Not necessarily euphoria, but the low ball picture we have been seeing. We have also seen havens decline today. The dollaryen in the blue, and the latest survey shows there might be some upside risk to the yen. That is because they are forecasting the level at 109, but we are not there yet. The yen is starting to weaken today. When you think about a stronger dollar from a dovish fed, there is definitely a pain trade that could occur. In london andrger niraj shah in mumbai. Now lets get a bloomberg first word news update. We stay on trade in the u. S. And china, have agreed on a truce. This after talks on the sidelines of the g20 summit. President trump has said he will scale back restrictions on huawei. The president says the u. S. Is winning the trade war and he will hold off on additional tariffs. Continuing talks which have been interrupted for a while is a very big deal. I think that is the banner headline. I think everyone is going to be pleased. There are no promises, there is no deal made. There is no timetable. I want to emphasize that. President trump has become the first sitting u. S. Leader to set foot inside north korea. Agreed to restart nuclear talks. He said stepping across the border was a great honor. Opec and its allies are moving toward extending supply cuts into 2020. That is as they grapple with u. S. Shale output and weakening demand growth. The group outperforming for a seventh straight month as oil jumps to a fiveweek high. Fresh protests in hong kong as police clash with demonstrators. The city marking the anniversary of the return to china in 1997. Participants and guests moved indoors. The turmoil raises new questions over chinas stewardship. Global news, 24 hours a day on air and tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Manus thank you very much. Eu leaders have been meeting through the night. Seem to be gravitating toward a staunch socialist, but there has also been opposition from Angela Merkels colleagues in the center right. Maria tadeo, good to see you this morning. What a night of divisions, or is that what we should expect more of . Where do we stand at the moment . Germany versus the rest . Good morning. It has been a long summit. Ae clear front runner is dutch social democrat. It has been a very long night. We dont know whether any of this is official. What we do know is he is backed by Angela Merkel, also Emmanuel Macron. What is interesting is that resistance you mentioned between the christian democrats and Angela Merkel. Traditionally she is able to bring everyone in line. It seems this time she has actually struggled to get support within her own people who actually blasted Emmanuel Macron for doing everything he could to block. The christian democrats ultimately won the european election, should not be in a position where they should be able to what is interesting is the divide between Angela Merkel and her own christian democrats. Nejra i believe we could be awaiting a discussion imminently. What are the indications for the implications for the ecb . Agreed until all of it comes together, but we are being told the European Central bank is seen as something of indifferent to the rest of jobs available. The European Central bank is seen again. Leaders want to look at this separately. Apps actually, no decisions will be made until september. The question at that point are the chances if Angela Merkel is not able to get to a compromise . We get a more Northern Voice at the European Commission. Way fort leave the france to get to the central bank . Nejra great to have you with us. The eu topahead to what is your target for the euro over the next 12 months . Has to beestion connected to the u. S. Dollar as well. The focus most of this year has been on the dollar. What we saw a couple of weeks ago was the dollar weakening on the back of expectations. I think if we take a minute to really think about what that means for the euro, if the u. S. Economy is going to slow next june, we think it will, if there is a recession, and we think there could be where does that leave the euro zone economy . Im not confident about the euro zone economy. China, that is weak. That hasnt up occasions for german exports. German Employment Data as well. We are not that confident in terms of the euro. We think eurodollar could dip lower. The fed Interest Rate cycle might gather pace next year. Maybe about 115. Manus donald trump applauded by mario draghi and is policy versus jay powell. One thing we have not touched on much, there is a whole bank of trade negotiations to go on with europe. This is essentially the grey swan for europe in the back half . Jane it could be. German auto manufacturers have been on the frontline. If tariffs do come about between the u. S. And europe, that is another potential risk. The markets are really quite wary. Concern. A if you look at the euro zone data, it has increased. From that point of view, this is a perspective of the risk for tariffs, that would be another weakening asset in terms of the euro zone economy. Where do you stand on the risk of no deal brexit . It is significant, given that both contenders for the tory leadership hardened their positions with respect to brexit because of the success of the brexit party in elections. It has got to be a significant probability. The counterargument, surely parliament would stop that. Get to the question raised by Boris Johnson that he could prevent parliament from preventing no deal. It has to be a realistic probability. This is very difficult to predict. We know if there was a general election, the risk of brexit does decline. There are so many permutations. U. K. Businesses do have to take into consideration the very significant risk of a no deal brexit. Probably part of your job carney has mark indicated he may need to raise rates. I dont know whether there is going to be hard brexit. Nobody knows. Surely the bar is very high to possibly raising rates. How low is the bar to qe on hard brexit . Jane if hard brexit happens, there is a fairly chaotic impact for the u. K. Economy. Certainly, the first reactions that would be, yes, you have to do more than that. Did indicate he could cut Interest Rates on that outcome. Global slowdown, that would raise the prospect of that happening. Of an Interest Rate hike, the bank of england still has forward guidance. It could go either direction. If it were to go up, what we would have to see as a prerequisite is a move higher in expectations. We would have inflation going higher. The bank could potentially look through that as long as Inflation Expectations move through. If they did move higher, that is when the risk of a hike would come through. Stay with us. Jane foley, head of fx strategy at rabobank. Heres a look at what is on the agenda. Today, guess what . I am in vienna. At 4 00 p. M. , the scrum. Get pads on for that. The alliance moving toward expending extending their supply cut to 2020. Arguably the most prestigious tennis grand slam begins today. Tomorrow, policy decisions from the rba. If they cut rates at the last minute. Almost three year hiatus before they did that, expected to cut again. Nejra july 4, u. S. Markets will be closed. Make sure to turn into bloombergs special coverage that evening. After the fireworks have died down, friday, we get the jobs report for june. Markets turning to this after the trade truce. Payrolls expected to rebound. This is bloomberg. Nejra this is bloomberg daybreak europe. Lets get your Bloomberg Business flash. Deutsche bank may cut more than a fifth of its global workforce. The lenders biggest shakeup in years. The chief executive may approve the loss of as many as 20,000 jobs. Saying last month he was working on tough cutbacks after failed merger talks with commerzbank. A bloomberg scoop. 8. Ing outsourced the 737 max the playmaker relied on temporary workers to develop and test programming. The code was not being written correctly. That is your Bloomberg Business flash. Nejra the u. S. And china declared a truce this weekend heavy on hoopla, but light on details. President trump took the opportunity to take another pop at the fed, saying the central bank has hindered the u. S. Position in the trade war. Not. Trump the fed has been a help to us at all, and despite that, we are winning and winning big. We are second to none. Greatest economy in the world. Manus despite the truce it may take longer than it may take more than words to substantiate reduced bond traders that bets. The jobs report may provide evidence about the state of the american economy. Jane foley is our guest this morning. The dollar. N the market sees a rate cut in july is the beginning of an insurance cycle of cuts. Do you think there is a good jobs number on friday, it reduces us back from three cuts to two . Jane probably. That is what the market will think. Most people will anticipate the fed is prepared for a july Interest Rate cut. Prepared. Is it is likely to follow through. The question is, how much further they get, and how quickly . I think the market will be watching. The fed will be watching the next few months. Have saidthe past you the dollar is going to hold up because you have other Central Banks cutting as well. You have talked about australia. You think the ecb could cut Interest Rates. Does that mean even if the fed embarks on this cutting cycle, and you tell me how you see that panning out, we still will see a stronger dollar . Jane that is certainly a risk. When we look at the details, often with the exception of certainly they have increased their bias toward using this year. That is in the risk. The answer might lie with emerging markets. Up, it mayt holds remain softer. If we see emerging markets very vulnerable, it is very good reason to expect the dollar to hold up. That could be determined by the global growth. Itwe look at chinese data, is bad. The japanese data is bad. Full circle, we are talking about u. S. Data again. Nejra on the emerging markets, in terms of where they go, the dollar is a safe haven, is that dependent on your outlook for the yuan . Is not going to tell us . Is that its going to tell us . Jane it will be how the stresses and strains pan out with respect to china and the u. S. . We have not had anything substantial yet. China is a view on lot more than just trade and trade tariffs. There is concern about the rise of china as an economic and military center. Away,sions do not go trump gets into the white house again, there is every reason to expect pressure on the renminbi. Manus i am going to recycle yesterdays question for today. 1995, there was explicit strong dollar policy. Is that era coming to an end . Jane most governments in the , as you mentioned since 1995 trump makes it clear he does not. Rebalance the trade position. It is quite interesting, his attacks on the fed. Have the government really attacking the central bank. That is not something affecting the dollar right now. The Federal Reserve has extremely strong credibility. What he is doing by trying to attack the Federal Reserve is really to prepare them for taking the blame when the u. S. Goes into recession around the time of the u. S. Election. Us. A thank you for joining jane foley of rabobank. Stocks in asia surging. U. S. Futures higher as the worlds biggest economies declare a truce. How long can the osaka bounce last . This is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Nejra good morning from bloombergs european headquarters. Vienna for them opec plus meeting, this is bloomberg daybreak europe. These are todays top stories. Global stocks rise. The ua and jumps is the yuan jumps. The u. S. And china agreed to a trade truce. Noty kudlow says trump is offering general amnesty for huawei. Deutsche bank could slash as many as 20,000 jobs in the biggest overhaul in years. Surges to a fiveweek high as saudi arabia and russia pick up support for an extension of opec plus cuts. The oil minister has no problem with extending the cuts, and warned against interference. , itf opec wants to be alive should decide inside of that. Not receive instruction from outside. Burning the midnight oil. U. K. Leaders pull another allnighter to search for the next European Commission president. Is the momentum with the socialist . We are live in brussels. Manus warm welcome to daybreak europe. We have already spoken to the uae and the iranian delegation here. All seem to be building a consensus toward six to nine months, announced by mohammad bin salman, Vladimir Putin, and the g20. There seems to be this consensus. The question is, is everybody on board . The iranians said they have no objection to rollover. Do we roll into 2020 . Good morning. Nejra it is interesting how important the g20 has gotten. Keys the g20 that has been in todays session. Money moving out of treasuries. Begin out of old the yen out of gold. You are seeing futures jump. Had their first weekly drop in four last week. Looks like we are going to get abused to the riskon trade today. The question being, how long can that last given that trade meeting was heavy on hoopla, light on detail . The attention now turning to the data. U. S. Stocks at the end of the week. Jobs at the end of the week. Manus equities are higher, what is the dude the bond story . You see traders lighten up on their short position. Some kind of a haven. A rise in the dollar. What would a sub100,000 jobs number do to fed rate cuts . Is going to take more than the possibility of conversation between xi jinping and President Trump to deliver on the trade front. Youre seeing money move out of bonds that bonds today. That is the state of play. Check on theget a markets in asia. Juliette it is very risk on here following that trade truce. You see chinas market now up to. 7 on the csi 300. No one is exciting anything concrete. Surprise restriction on the huawei band. The taiex is up. , upnese stocks are higher 2 on the close. Australia up by 0. 6 . Buying in india today. Disappointing data coming through out of the region. Trade tensions are still biting. Pmi out of china and south korean exports falling. Lets have a look at that move into currencies. We have seen the offshore and onshore renminbi rise. With thetoday helping offshore, up by 0. 3 . It has been rising quite strongly. In six weeks. Vel i mentioned weakness in the japanese yen. Money coming out of safe havens. We have seen the korean won from a two month high, weaker by 0. 4 against the dollar. We see this riskon move down, but also affected by that drop coming through in exports from korea. You stocks in europe are set to follow asia higher after the u. S. And china declared a truce in the trade war. Trump said he will hold off on tariffs and scale back restrictions on huawei. Fox trump istold not giving the tech giant a pardon. This is not general amnesty. They will remain on the list. The National Security concerns will remain paramount. Manus how long will the postg20 rally actually last . Joined the debate. We are all standing by. It has certainly got legs. You look at the halfway mark of the year, markets in context for you, lets get to our guest this morning. She joins me in the london studio. The head of ishares for blackrock. Great to see you this morning. The s p 500 is rocking it out. Highyield bonds. Pretty good runs. Continues to happen to that kind of rally . Or can we continue that just on a trade truce alone . We think risk assets can push higher, not necessarily on the back of trade truce alone. Now that we have g20 out of the way, we also had largely is expected as expected outcomes. It goes from trade toward fundamentals. Fundamentals are still reasonably ok. Slowing, but still growing. We think risk assets can push higher now that g20 is out of the way. About in terms of fixed income . Last time we spoke to you, seeing inflows. Do you expect that to continue . We do. That is also because of the structural change in fixed income, the flows we are talking about our fixed income etf flows. Still very low versus the underlying market. Shoulductural adoption see greater demand for fixed income going forward. Context ofy in the markets, we have seen a lot of inflows into fixed income so far versus commodity, almost disproportionately. , there is not a lot of inflows. Maybe going forward, it becomes a bit more robust, we see a balance into fixed income, equities across the board. This is one of the debates. We talk about flows. For 2019. Ed something the second have could be driven by fomo. In the u. S. , 41 billion flowed out. Europe, 71 billion. Dump not exactly a love rally. It is not fully engaged. Pictures insimilar the etf space as well. There is still a lot of cash on the sidelines. As sentiment becomes more positive, this rally has not been participated in as much as one would like to. Fomo could be one of the catalysts driving flows higher, another reason behind our constructive view in terms of flow for the remainder of the year. Risk assets pushing higher. Investors will want to participate. Less liquidity. They would like to allocate ahead of that. They were saying the trump put was into action. Attention turning to the fed put. The pricing has not changed that much in terms of bond markets. Fed rate cuts are still expecting four rate cuts by the end of next year. July is still fully priced in. What does that mean for gold . The safebeen acting as haven on geopolitical risk. We have a significant fallback today. The biggest drop in a year. Are you expecting large inflows into gold to continue . Wei we have seen large inflows into gold. Price pushing higher the last few weeks or so with rates pushing lower. It demand for gold. The case to be made a portfolio should have gold as part of that. But to see price levels pushing higher, we need to see risk sentiment to be a bit more negative. We also need to see rates pushing lower, which is unlikely, given where things are at the moment. From strengthush to strength, but we argue for a place firs a place for gold in your per folio. Portfolio. Worried about a sub6 growth. Take a look at this. This is the northern shift. We have seen 6 billion go back into chinese equity markets. We have had back to back months falling. What needs to come out of negotiations to perpetuate this momentum . The biggest we have seen in four months. Wei in terms of demand for chinese assets, the tactical flows drive part of it, but the structural demand is also in place. You think about china having the secondbiggest equity market globally and the Foreign Ownership is only 2 . I think over a longer period of it is definitely in place. Expecting headline easing somewhat. Data in response to weaker , it could catalyze some of that sentiment. Know it istant to not likely going to kneejerk growth to recover. Rather just stabilizing it from where we are now. Onra how positive are you emerging market assets in the second half . We are reasonably constructive. Fromse of the dovish pivot Central Banks, not only by the fed, but Central Banks globally. There is a case to be made in terms of which part of the emerging markets to own because you can paint emerging markets with a broad brush. Price, we want to be more selective in that regard. When it comes to emerging market debt, there is a case to be made the income is very attractive. Dida that certainly perform very well. Thank you so much for joining us. Great to have you with us on the show. Deutsche bank could cut as many as 20,000 jobs in a massive overhaul of the company. A new business file includes a possible exit from u. S. Equities. Here with more is russell ward in tokyo. Great to have you with us. Effortsus about how the to turn this bank around because this is addressing the costcutting, but not so much the revenue. Certainly the biggest under theng plan sitting era. Remember, he came in about a year ago promising cuts, but this is on a scale much bigger than he initially made. He has not actually managed to turn around profitability to the degree you would have liked. Over the pastbs year. This is a much bigger scale than that. One interesting difference from the past, from this case, we are hearing a lot of these cuts will be u. S. And asia, whereas going toy, he was remain committed in those areas. Here in asia, theres going to be drastic cuts. Manus the question is, where does he go in america . People are perhaps most focused on equity business and the size over all of the investment bank. As a going to be the equity business they focus mostly . Absolutely. What we are hearing is half of the equity staff globally are going to be cut. That could include the head of Investment Banking, whose background is in equities. Has been losing money for Deutsche Bank. They are going to bear the brunt of these cuts. They move away from the more volatile business, focusing on Transaction Banking and wealth management. They have said the bank is going to hire 300 people in wealth management. You can see the bank is pivoting areas to lossmaking more stable business. Equities are going to bear the brunt of that. Great to have you with us. Richard clara is speaking at a conference on Monetary Policy hosted by the bank of finland in helsinki area we have headlines through saying inflation is running close to the 2 objective. Maximum economy is at him employment. They are not commenting on the outlook for Monetary Policy in the near term. We got back a trade to let the g20. A trade deal at the g20. Right. You are trade troops. An amazing run. Level not stay below that for very long. We are seeing a traders cut the short position. Lets get a little bit of a pause for thought. We are going to bring you the latest on opec from vienna and the strategy. There you go. This is bloomberg. Manus oil is on a tear this morning. I am in vienna. My guest is the Vice President for financial services. Will is a presumption it extend for six or nine months. If we get an extension, what is that worth to this market . Is it another 10 . Another 15 . Ori do not think it is 10 15 at this stage. It is more like five dollars. You would need to see fundamentals change in have better demand data. A better sense of what iran is going to do or not. Also, to carry the trail further. Is iran still able to sell the china . The official sales are very low. Believe oil is also leaking from iran. Manus what about russia . Why did Vladimir Putin preannounced what he wants . We have seen an interesting shift. We are in a situation where russia is barely removing any barrels, but is a disciplinarian. Nothing happens without russia. Manus do you think that will be uncomfortable for opec members here . Something uncomfortable about russias power . Roger for the moment, it is not creating a lot of trouble. Over time, that could be overbearing. Manus continuity, the language is about delivering continuity and visibility to this market. Is that what a ninemonth extension does . There were a lot of fears about trade. To and saudi in particular they are significantly below their quota. They are really managing heavily themselves. Manus do you think theres going to be more pressure on , to combine more fully . There they will try, but is no incentive to cut. Manus what about nigeria . They want to renegotiation. Roger sooner or later they will produce it. Manus thank you very much for being with me. We will see what the scrum brings later today. That is my guest this morning in vienna. For theetting ready scrum, cant be as bad as the one we had in jeddah. We caught up with the iranians this morning. He supports a 69month extension. Extension. Onth month extension. What does it take to move this market higher and shifted island sentiment . Nejra how disappointing could it be if we dont get nine months given we have been talking about so much . Great to have you in vienna. Unrest continues in hong kong. Fresh protests as crowds gather march. Annual july 1 protesters have tried to break into the legislature building, banging into its glass walls with a metal cart. We will stay on that story. We will stay on the trade troops at the g20. U. S. Futures the trade truths truce. This is bloomberg. Anna good morning. Welcome to numbered markets the european open. Markets theg european open. A slump in exports. The cash trade is less than 30 minutes away. Back on track. Stocks bounce after donald trump and xi j