It is still on. President trump insists a phase one trade agreement with china is fully intact. Peter navarro claims his earlier comments were taken out of context after suggesting the deal was over. The European Commission is more confrontational. E. U. Lash out at beijing over hong kongs autonomy, disinformation, and foreign investor meant foreign investment. We are in brussels. Hard times for softbank. The Company Sells part of its tmobile stake, creating 21 billion dollars to help offset record losses in its investment business. We will have the details for you briefly. Just under one hour away from the start of cash equity trading in europe. Lets take a look at futures this morning after we closed down yesterday in the u. S. And the u. S. Managed to eek out some gains. They are trading solidly higher. Dax futures are up. 6 percent. Ftse futures up about. 25 . What do you see on the gmm . Anna we have certainly been whipsawed by those comments by Peter Navarro on trade and the ability to cling to that phase one trade deal. The upside of see that. A little bit of positivity for asian equities. Up in thesianpacific trading session. U. S. Futures taking a little bit of a let down. 3 to. 4 on the major u. S. Futures market. Whipsawed just like many of the other markets were whipsawed by those comments with Peter Navarro. Trade, he saidof that was taken out of context. President trump said the talks are fully intact with a deal on phase one, fully intact. Interesting to see that trade between the u. S. And china still has the ability to whipsaw these markets in the way that it did in the Asian Session, whether that was equities and treasuries, fx, or the vix. It seems the virus and everything to do with the virus is really dominating market thinking. Tohave this reference back the trade conversation between china and the United States. Lets get out today on bloomberg first word news update. Lets bring you some of the top stories we are covering here at bloomberg. China and russia criticizing the u. S. For a stunt at yesterdays nuclear talks. The negotiator tweeted china is a noshow. Not been due to take part in the talks. The officer responded it was an obscene, adding how low can you go . Russia condemned the move. The European Union and china sparred as they held a video conference. Tensions have grown since the last summit. Leaders criticized chinas plan to curb chinas autonomy. They discussed beijings handling of coronavirus and curves on Foreign Investors. In the united kingdom, Boris Johnson is set to announce the next steps for lifting the coronavirus block down. The move is expected to give the green light for cinemas and new zealand. In new zealand. The trimester will announce the social distancing rule. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt the china trade deal is fully intact. The president said on twitter, ensure investors it was not finished. He roiled markets by telling fox news the deal was over. His words were taken wildly out of context, he says. Futures are rising across the board. Lets get into the markets with our bloomberg mliv asia editor. Some markets were roiled during in asias session. A little bit of a roller coaster ride there. What are we looking at for the european session . Europe, the regions may be able to look past their riskoff trend we have seen in asia earlier, looking at the euro stocks futures which are up almost 1 , outperforming u. S. Equity futures, which were marginally lower. President donald trump said the phase one trade deal with china is fully intact. We have seen quite a bit of swings in futures in the volatile trade during the Asian Session along with the aussie dollar and crude oil. They have since pared some of the earlier losses. The Risk Assessment has been dented already. It may not fully recover through at least for today. The key takeaway perhaps for from riskon and riskoff trades is that this kind of market activity is something that we would need to get used to this year. Looks like markets are still hypersensitive to any major riskoff headlines, especially given trade tensions along with uncertainties for the recovery. It will continue to linger across the board for the rest of the year. Anna good morning to you. When we never on an election footing, it would seem. What are we expecting when we look ahead to the european session . Euro area pmi breaking through the morning. Some people say it is all about the data. We have to track recovery that way. Kindare not made for these of extraordinary times. What do we expect . Sungwoo todays pmi data for europe and some large nations including germany could contribute to setting transport risk assets. Rebounddata shows a big with the services pmi doubling. This shows how quickly people wanted to lead in economic risk assets,nd the given australia is highly dependent on commodities. Barometer for the state of the real economy. We can expect something similar in europe. Bloomberg survey of economists, manufacturing and services pmi are likely to show quite a bit of improvements from the previous month, although they are yet to bounceback into expansionary territory for now. Bloomberg economics expects the pmi readings to return to expansionary territory in june because we are seeing clear signs that that activity is across the region as the government relaxed virus containment measures. Today,n the mliv blog your question of the day, what moves most . 16 trillion in stimulus. What are you hearing in terms of responses . Pretty much an anonymous amount of stimulus. We have not had that much reaction from leaders yet. It continues to grind higher. Stocks may look stretched but ofen this abundance liquidity, thanks to the fiscal stimulus around the globe, theres a bit of room for equities. One of this years main themes in the equities market is u. S. Stocks have been outperforming most global peers. It is largely driven by the tech rally. Investors will be keen to see if that is sustainable in the second half of the year as well. In this regard, perhaps, todays pmi data out of the u. S. Will be critical in order to gauge the state of the recovery. Gold is one asset class investors are increasingly optimistic about, especially in the longer term. It will eventually improve the appeal of the precious metal as an alternative investment. The massive stimulus will only increase the means for gold. Runaway inflation is the long way up. He brightening longterm outlook for gold can it will be around for some time uncertainties over how always second wave of covid19 will play out going forward. It could wait on risk assets from time to time. Gold has reached the sevenyear high, showing the potential to shake off the doldrums of late. A wobblewithstanding in march. The gold price quite impressive. Thank you very much for joining us, our asia editor. Up next on the program, the white house sends markets on a roller coaster ride. We will discuss that with sungwoo park. President trump travels to is still onade deal after Peter Navarros earlier remarks that it was over. This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are still 47 minutes away from the start of cash trading. Looking at futures that are up thans the board here, more three quarters of a percent in germany, more than two thirds in paris. Ftse futures gaining. 5 right now. Lets get the Bloomberg Business flash news, the top corporate stories from the bloomberg terminal. Softbank is selling part of its the 21 tmobile in billion deal. The sale is part of a broader push by the conglomerate to unload assets in order to finance buybacks and pay back debt. The company is dealing with steep losses in its vision fund after writing down the value of investments including we work and uber. Accounting scandal, wirecard explored a deal to enter the financial elite. Sources tell us the Payments Company considered a tie up with Deutsche Bank and even approach to the lender with the idea. Deutsche bank ended the preliminary talks while the bank had more than 1 trillion in assets. Its market value was less than that of wirecard as recently as april. Apple plans to sell Mac Computers with inhouse processors. The move signals an end to the 15 Year Alliance with intel. The change was announced at the Virtual Conference for software makers. Its all the most drastic changes to the iphone home screen since the products release. Similar to android, it will allow users to place which it that sit between the usual grid of apps. That is your Bloomberg Business flash. Anna . Anna lets talk about volatility in markets. It swept through markets. Trade advisor Peter Navarro saying to the china deal was over. It depends which part of the world you were in. Here in london, many the dollar surged and stocks fell sharply after these remarks from Peter Navarro. Sharps faced an equally recovery. Navarro walks back the comments, saying they had nothing to do with the phase i deal. President trump tweeted that the deal with china is fully intact. We are joined by the senior portfolio and our future portfolio manager. The treasury yield market that you focused on, that was moved just like many others, like s p futures, the vix, the yen, the dollar, soft commodities. All of these markets moving in tandem, reacting to a story around u. S. China trade. It is almost comforting, i suppose, that there are other narratives that will cut through the market thinking right now other than a second wave of the virus. It shows how sensitive the market is to headlines around u. S. China trade. The fact that trump walked back these comments so quickly illustrates that the u. S. Administration is trying to find a balance which is on the one hand, there is a partisan support for antichina rhetoric in the u. S. , but at the same time, we are coming out of a significant hit to growth, a meaningful recession. Be administration will trying to avoid any economic fallout that can result in a collapse of the phase i deal so it is quite a fine balance that trump and his administration are trying to walk at this point. Matt what do you think about treasuries down below 70 basis points . Jub the big discussion with the treasury much more related to the shape of the yield curve as opposed to the outright level in yields. The communication from the fed has been quite clear that policy rates will be at these levels for quite an extended period. Powell saying that the fomc are not even thinking about raising Interest Rates at this stage, and if we look at the dot plot, we have policy rates at the current level until the end of 2022, so there is extended Forward Guidance pinning the belly of the curve significantly and all of the action is in the backend, and that is where the discussion around the impact of the significant supply due to the fiscal expansion that we have had as a result of coronavirus, and possibly any very longterm inflationary impacts. That is what has been driving the backend. The big picture for developed market duration is we are in a low rate environment for an extended period and it difficult to see big moves in either direction. Do markets need to yield curve control or does talk of yield curve control almost achieve the same ends . Jub even talking about yield curve control does a lot of the work for the fomc. We think that if the fed was to adopt a yield curve control framework, it would be akin to what we have seen in australia, which is trying to pin the front end, to year to three year point, as opposed to what we have in japan. If we look at the way the curve apparently trades, you could argue that objective has already been achieved because you have five year treasury trading at only 30 basis points, so they are achieving a lot of the objectives the why cc would accomplish but without formally adopting that framework so it does beg the question of why the to would look to an extent tie their hands at this stage. Unless we see a significant deterioration in the growth outlook, in the macro outlook, and they want to really cement that Forward Guidance. Matt if you look at spreads to bunds, we are seeing a real tightening from where we were one year ago, two years ago, and that has taken a little bit of that has taken a little bit of the enticement out of Foreign Investors to buy the dollar, in order to get treasuries. We have seen may be the dollar coming down a little and weakening. Do you think we are going to see that continue . On a lot of that depends the speed of the recovery out of coronavirus. One of the key attractions for the dollar over the last couple of years has been the yield advantage that u. S. Assets have had that has eroded significantly. Now, its much more about Global Growth, which we know the dollar typically goes up when Global Growth declines and vice versa, and also risk aversion. Safe havenike a asset. We saw that in march that even other typical safe havens like the yen and treasuries were actually losing money at the same time as equities were going down. The dollar was really the only firm risk reducing through that period. With the banks trading close to 30, 35, theres a lot of risk aversion out there. Until that subsides, there is likely to be some continued support for the dollar. As the growth recovery broadens out as we come out of the q4, we couldq3, expect the dollar to have a gentle downside bias. Is related risk aversion likely to be in place at least in the short term. To talk aboutmore with you. Jub hurren from aviva investors stays on the program. Coming up later on bloomberg television, bloomberg invest his hosting some of the biggest names in finance, politics, and economics, starting from 6 00 p. M. London time, we will speak with the ceo of pimco, followed coceo, andle group finally, u. S. Treasury secretary Steve Mnuchin will be joining bloombergs David Rubenstein. Do not miss that later on bloomberg television. Matt welcome back to Bloomberg Markets european open. We are still 37 minutes away from cash trading across europe. But we do see markets which have really moved overnight in asia. Now, we are looking at futures that are higher in europe. Lets get back to jub hurren from aviva investors. Let me ask you first about this this visibility issue that we have had throughout the coronavirus. Its been really difficult for companies and investors to get any clarity to make forecasts and to make investments. Is that improving over the last few months . Jub i think visibility is improving but its at a very gradual pace. There is a wide range of distributions in terms of how the growth recovery can actually materialize. We are seeing a lot of progress being made in terms of some sectors looking to tentatively open up and we see that in some better data over the last couple of months. We look to see what we get from the pmis today in terms of science for a further recovery here in europe, but there are some sectors that are still left with some very Big Questions, particularly things like airlines, hospitality, other forms of travel, and any sectors that require a lot of people to congregate together in one place. Those are the sectors where there remain very Big Questions and returning to normality may require a vaccine which we think will be some time before that is available. Visibility is improving. That is one of the reasons why we have seen volatility come down in markets over the last couple of months. Obviously, we have also seen at least there is a process by which governments can tackle the virus, so lockdowns, getting case numbers to low levels, then gradually reopening. Ae road to recovery has been gradual one so far. Matt but you have been able to shift your strategy to some extent, right . We spoke with you at the beginning of may, and you were mainly investing in investmentgrade credit, and now, you have been able to shift towards not only cyclical investments, but also, towards higheryielding investments, rather than Investment Grade going into high yields. Is that because visibility has improved, that you are now able to make these place these bets, lets say . Jub jub its partly visibility improving jub it is partly visibility improving. We will see a sequential recovery in coming quarters. Aere there has been significant improvement in visibilities has been on the Monetary Policy side, and we think that the extent of policies we now have in place with the fed and the ecb both directly behind the credit asset class. That does act as a material backstop for Credit Investors here and we have seen 80 billion year to date into credit markets and thats obviously after some pretty significant outflows in q1. If that technical picture where we can have much greater confidence and much greater visibility that is really helping to offset some of the more fundamental fears investors have at this point. Anna sorry, we have to go to break. Thank you for joining us, jub hurren, fixed income at aviva investors. This is bloomberg. Welcome back to the european open. 30 minutes away from the start of cash equity trading. Still green arrows in terms of futures. Could be a riskon morning after President Trump seemingly settled the deal in terms of the u. S. Trade relationship with china for now at least. Lets get a look at what is happening today. We will. London time get the eurozone preliminary pmi readings for june. Numbers for france and germany come at 8 15 and 8 30 a. M. Respectively. In the early afternoon, u. K. Prime minister Boris Johnson will announce lockdown easing plans, the relaxing of social distancing rules is expected to be the main point of discussion. A reading of u. S. Pmis for june will be out at 40 5 p. M. U. K. Time. 15 minutes later, we will be getting the latest new home sales figures as well. Then the bloomberg invest global summit continues all throughout the day. Tuesdays theme is a new world order, the implications of the massive stimulus deployed during the pandemic. Confusion over trade comments have roiled markets this morning. From stock Index Futures to the u. N. The comments were made by white house trade advisor Peter Navarro and sent u. S. Futures briefly tumbling. On theth details and recovery is dani burger. Dani i thick it is really important we dive into the charts and look at what happened. You can get a feel of how sensitive markets are to trade. I have basically running the gamut of different asset classes. 10year yields, u. S. Futures, and the yuan. They dipped one navarro gives comments to fox news regarding questions about the china trade deal saying, yes, it is over. He does walk back the comments in the wall street journal interview. Thebottom comes before comments from the wall street journal markets are taking trade comments with a grain of salt. I heard from Andrew Bremmer saying someone needs to muzzle this guy. That is his quote exactly. Because we know that china is participating in the trade deal. They are buying u. S. Agricultural goods. Still basically everything sold off. Even bitcoin, even volatility. You can see the vix spiking during the comments. Navarro gives the interview to the wall street journal, trump tweets saying that the trade deal is still very much intact. We get a leveling out. Yes, we do see big swings. Trade certainly continues to capture the imagination of markets. But if anything, the trade deal has been running for over a year now, so investors might be quick to react, but markets certainly have settled down. Matt, anna . Anna thanks very much. Incredible to see the sort of matching shape of all of those assets during that many tantrum we saw over the comments from Peter Navarro. Softbank cells a slice of tmobile. We discuss the Japanese Investments giants push to shut assets. More on that next. This is bloomberg. To theelcome back European Market open. 25 minutes to go until the start of the equity trading session. Futures are suggesting it will be up higher. As. Futures have been led on bit of a merry dance by Peter Navarros comments. Lets get a bloomberg first word news update. Here are some of the big stories we are covering. President donald trump says the phase one trade deal with china is fully intact. That follows confusion overnight after comments from his trade advisor Peter Navarro, who spoke to fox news indicating the deal was over. He quickly walked back the comments saying they had nothing to do with the phase one deal and were taken wildly out of context. U. S. Vice president mike pence is warning of more young people testing positive for coronavirus. He made the comments on a call with governors and the concerns echo those of Texas Governor greg abbott. The state may reverse its economic reopening if the pandemic continues to spread at what he calls an unacceptable rate. The European Union and china sparred yesterday as the two sides held a highlevel video conference. Tensions have grown since the last summit 15 months ago. Blocks leaders criticized chinese plans to curb at the hong kong economy and discussed beijings handling of coronavirus and curbs on Foreign Investors. Hajj will go on this year, according to saudi arabia. Work to encourage social distancing and hygiene during the event. The move to limit the event will have repercussions around the globe. Many wait years for visas and save up for the trip. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt . Matt lets bring you an exclusive interview from the bloomberg invest global conference. Says clients are not panicked by current market headwinds. To her surprise, they are more focused on investing for the long term. She spoke with alix steel. People are not panicked. The margin calls are happening at a very short window and we are running about 1008 day. Eople have the wherewithal you are seeing that in corporate financing. Very Small Companies know exactly what to do. Drawdidnt necessarily down unnecessarily. We are in a very calm period. People are looking to put money into liquid assets. They can think about those. Wealthier individuals around the world. They are ready and have enough liquidity that should we see Something Else and that Something Else may not come from anything anybody is looking at today. It may not come from covid or racial tensions, it may not come from china trade. It may come from something totally different. But the market is fragile and just that Little Something may cause a wobble people are not ready for and thus we continue to have the stimulus and provide that cushion. The smarter money is really ready to take advantage of that. That is why we are seeing so many inflows. So many inflows across our alternative platform. People saying, i want to have my money there and i want the professionals to be able to take advantage of it and im not showing signs of panic. Alix great, great insight. About a minute left. Im working from home. Jim is too. Mary, you are in the office. I wanted to get perspective. Are people coming back . What is the work from home like . Havep. Morgan chase, we 250,000 people around the world we quickly got to a work from home scenario. All the investments in technology we have made over the years made that quite simple and smooth. Of the entire global population within a work from home scenario. Certainly come different places around the world are going to return faster. Hong kong hit a high of 39 of occupancy on friday. They are ready for this. They have lived through sars. They know how to prepare themselves. Masks are a normal part of daily life in most Public Transportation and the like. That seems to be working. Europe starts to open, some pieces have been open, offices have been open all the way through in terms of trading. We have milan, spain, geneva, paris, other places opening up next monday and the following money monday. Then the u. S. Where we have always had the branches , they are starting to open more of the ones, they are starting to have the more full teams in. Formost important thing j. P. Morgan chase is that it is safe and secure. Any kind of a leave or medical leave, reentry is a very stressful time period. We have to work through it slowly. Depending on how you transport yourself into and out of the office. We will take that stepbystep and make sure everybody feels comfortable. People crave interaction with other people. While zoom is a fabulous technology, zoom is not spontaneous. When you need that support from a colleague and you are trying to do very difficult spending to thens, it is just extent you can have some of it in person and i think life will change a lot for a lot of the way people work, but you still need some of that. I think that is what we will all be working through. I think you will see Corporate America adjust accordingly and you will be in a better race for it. Better place for it. That was the j. P. Morgan chase Wealth Asset Management ceo mary erdoes speaking. Softbank is unloading part of its tmobile space in a 21 billion deal. The Japanese Investment giant secured the state just this year after u. S. Regulators approved tmobiles takeover of sprint. Softbank is under pressure to shed assets in order to deal with the losses from its vision fund. Bloombergs Global Business editor joins us now from tokyo. That is the motivation here, is it . To sell these assets because of trouble elsewhere . Thats right. Looking to sell a total of 42 billion in assets to try to make up for losses at the ovation fund. That seems to be ticking along quite well. Softbank group shares have doubled since the low in march after the losses came clear. This is right along with that. This, ittake a look at is an impressive structure they have. It involves a handful of investment banks. Virtually all the Top Investment banks. They are all in on this. Offering. S a public executive and board member is going to be taking part of that stake, as well. Basically, it will leave softbank with about a third of the stake right now. They will be raising about 21 billion. Matt they actually raised 21 billion from this . You are right in pointing out his it is very complicated. They are essentially selling part of the stake to one of their own executives and it seems like they are funding that purchase, as well. Of smoke andot mirrors that make it difficult for me to understand how much money softbank actually comes away with in this transaction. Thats correct. When i say raised when 1 billion, there is some financing underwriters. Some were going to sell as many as 30 million of the common shares. Quite a transfer engineering marvel. Anything liken it, to be honest. Complex for this company. It has been trying to sell, trying to monetize and it is finally doing it. The structure is quite complex. It is far from certain that they will be collecting on 21 billion. Anna you say they are trying to sell this. What does this tell us about their broader strategy . It tells us that the Regulatory Approval was really hard for them to obtain. It was on again and off again for years, which made it hard for them to plan what they were going to do. Initially, the initial idea of them investing in sprint was that they would merge with tmobile. That was rejected by the regulators. They finally were going to make a deal happening decade later. It has been hard for them to try to monetize it. They expected to keep the asset and build on it, but it never really worked out, partly because they couldnt get the Regulatory Approval for the merger with tmobile. Now that it has happened, their whole profile has changed and they are much more oriented toward becoming an investment fund. That has required them to scramble and raise cash as quickly as possible. When i mentioned before that shares have doubled, they doubled over the period after which they said they were going to sell all these assets, including a big part of their Alibaba Group holding stake. They are also selling that as part of this. Sometimes, you just need to raise money. Dave, thanks for joining us. Bloombergs Global Business editor talking to us about this very complicated, but very big softbank deal to unload some tmobile. Unwind, shall we say, some of its tmobile stake. We are minutes away from the open. Accountingrecards scandal begins to deepen is the bank of China Threatens to withdraw its credit line. Has the stock already hit rock bottom . We will discuss coming up. Coming up, bloomberg investors hoping hosting some of the biggest names in finance, politics, and economics. We will be speaking with pimco ceo manny roman, followed by u. S. Treasury secretary Steve Mnuchin. He will be joining bloombergs David Rubenstein. This is bloomberg. Anna welcome back. 10 minutes to go before the start of cash equity trading. We could have volatility at the start of the trade. Lets get the Bloomberg Business flash for you now. As we just discussed with dave, softbank is selling part of its stake in tmobile in a 21 billion deal to make a broader push to unload assets. In order to finance the buyback and pay back debt, the company is dealing with steep losses in its vision fund after writing down the value of investment. The London Stock Exchange faces and eu probe into its plan 27 billion takeover. The European Commission is looking at potential issues, including the combined control of Financial Data and the effect it could have. Bloomberg lp competes with refinitiv to provide Financial News and data. Apple signals an end to its 15 Year Alliance with intel. The change was announced at the companys Virtual Conference for software makers. It also saw the most drastic changes to the iphone home screen since the products release. It will allow users to place widgets between the usual grid of apps. That is your Bloomberg Business flash. Matt . Matt lets get to wirecard. The multibilliondollar accounting scandal is getting more and more complex. Bloomberg has learned that the bank of china is discussing ending the Credit Facility to the company, writing off 90 million to cancel that credit line. That complicates the german companys fight for survival. The payment maker has wiped out almost 90 of its market value over the last three trading sessions alone. Joining us for more is our senior editor. About thatfirst topline. If china doesnt renew the credit line to wirecard, does that mean nobody else in this almost 2 billion group of creditors is going to renew . Because that is sort of the company upon last oh right now, isnt it . That is right. There is a risk that we will have a cascading effect, that if one bank pulls a credit line or denies additional funding that others will follow. What we are hearing is that the bank of china is discussing ending Credit Facility. It is a little bit complicated for a lot of the banks because they want to win a little bit of time to be able to discuss the fallout. They cant wait too long. If they do that, they could be delayered an insolvency and that is illegal in germany. They want to have a little bit of extra time to run the numbers, but not too long should wirecard really go down. I dont think they want to be caught up in that. Of bank of china does indeed pull this Credit Facility, it could become it could have a real knock on effect for others. Anna what about with the management of wirecard is saying . Im fascinated to know what kind of explanation they are giving for what is happening at the moment. We have not heard from him. Interim newave an ceo. There was a town hall yesterday, which i imagine was a gloomy affair in munich. The company tried to calm the waters a little bit and tried to explain the path forward. One possible path might be a wholesale sale of the business. There is potentially some value in the technology, maybe in some of the partnerships they still have. If the question of will they be able to hold some of that together or will it all unravel and the company will essentially become worthless . But they have hired external advisers to try to help them through this. As a muchght end up smaller wirecard or none at all because the company will be broken up. Matt thanks so much for joining us. Anna bloomberg editor joining us with the latest. Red headline across the bloomberg. I would be sells a 10 billion stake in the gas pipeline to a gip led group, a group of investors investing in these gas pipelines. I mentioned this because we are going to bring you a full interview later in the program. Minutes away from the start of the trading session. Futures point to the upside. This is bloomberg. Anna a minute to go until the start of cash equity trading this tuesday morning. It is still on. President trump insists the phase one trade agreement with china is fully intact. Advisor Peter Navarro claims his earlier comments were taken out of context after he seemed to suggest a that a deal was over. But the European Commission is more confrontational. Eu leaders lash out at beijing over hong kongs autonomy. Disinformation and foreign investment. We are live in the belgian capital. And hard times for softbank. The Company Sells part of its tmobile stake, raising 21 billion to help offset record losses in its investment business. Matt . Matt all right, lets take a look at futures. We arent and have been seeing gains all morning in the futures market. We will likely see a risk on open. The ftse just about to come out. Lets pick up the global macro movers screen. You can watch in the lefthand column of equity indexes open up with the first live trades. You see the ftse and the ibex both out up. The ibex gaining substantially more. Now the euro stocks a bluechip benchmark index has opened up at 0. 3 , just about as much as the ftse right now, gaining to about 6069. You can see the cap koran open up now. Open up about 0. 5 . Not 1 , notg gains, multiple percent gains, but we are seeing gains nonetheless after the drops we experienced yesterday and the see saw that we saw overnight due to the administration confusing markets. White house trade advisor Peter Navarro so to and spurred a temporary stocks long. It all started with this conversation on fox news. Do you think that the president sort of he obviously really wanted to hang onto this trade deal as much as possible and he wanted them to make good on the promises because there has been progress made on that trade deal. But given everything you happened, is that over . It is over, yes. U. S. Futures and the offshore yuan fell before navarro walked back his comments. You just saw that conversation. He says his comment that it was over was taken wildly out of context. President trump took to twitter to clarify. He wrote, the phase one trade deal with china is fully intact. Joining us now is jane foley, rabobank head of fx strategy. Context youwhat suspect Peter Navarro was thinking of, but how confident are you that this trade deal is still strong and stable . Think the reasons that markets reacted the way know we is because we have a lot of animosity between the u. S. And china. We know that there is bipartisan animosity really there. I think the markets have been suspicious about the tensions between the u. S. And china and this is why they reacted like that. If the backstop was different, i think they would have seen those comments in a different light. We are waiting for china to make more moves. I think the market is very suspicious, particularly in the runup to the election about what is going to happen with the trade relationship, whether or not there is going to be more tariffs . That is why we got the reaction that we did. The tensions and then the rolling back of those comments, certainly moving markets, where do you see the chinese currency heading . Where do you see the chinese yuan . How politicized is that as we head toward november . Jane it is politicized. We all know that. We are watching it very carefully. We can step back from that, as well. Economy thater any is weakening, it is normal for any exchangerate to suffer. If we were to have further trade tensions between the u. S. And china, if we were to have some other types of shock, then you the currency to weaken. If you look at some of the tensions in the Global Economy right now, if you look at the recessionary risk we are facing, in that context we can expect that the renminbi will falter. It will suffer. What is quite difficult to pull politicsat is how much the chinese will be able to avoid in doing so or whether or not it will be highly politicized. I think there will be some softening, but how political that will be, it is difficult to tell. Matt what effect has the stimulus had . Your mliv question of the day is about a broader question on assets, what moves the most on 16 trillion in stimulus . It leads me to wonder what effect the chinese stimulus has had. Certainly far less stimulus per capita than has been seen in europe and the u. S. On the you want. Yuan. Is it strengthening to the yuan that they havent printed and spent as much as washington and berlin . Jane i think this is really quite worrying. There are various different contexts in that question. If we come to a situation where there are more trade tensions, where china does need to rely more on the mastic demand to , if it has toowth do that more because the extra trade tensions, then that is an issue. In those sorts of circumstances, you can imagine that the authorities have come to the decision they have no options but to weaken the exchangerate, regardless of the political implications. There are various scenarios you can imagine whereby that remember the may have to become weaker. If you come back to the nuts and chinese the policy, politicians, it is to try to keep people in jobs. If they dont have people in jobs, they are worried about social unrest. The employment target is the most important target they have. If that meant that the renminbi has to weaken, i think that will happen. There are various scenarios by which the renminbi would have to potentially weaken in the foreseeable future. Aboutjane, let me ask you the particular context for my question today we see the comments from various guests around the saving rates in the United States recently and this is quite an impressive chart showing it in recent months. As a result of lack of opportunity to spend and maybe nervousness about the future. Our colleague is writing about things that will weigh on the dollar in the future and he suspects that the fed will try to keep Interest Rates low to try to encourage people to take that money out of Bank Accounts and spend it. What is the significance of this spike in the savings rate in the u. S. . The savingse in rate is a natural phenomenon at this point of the recession. It is not just the u. S. I think some of the points he mentioned that john spoke about are very similar to other economies. You have a spike in the savings rate in the u. K. Youve seen some Bank Account Data on australia to suggest that people are saving. This is normal. When people are worried about their jobs or if they have lost their jobs, they are likely to save in the near term. This is an international normal phenomenon. In terms of the fed keeping Interest Rates low to try to encourage people to spend, it is not going to be good either. That is going to be a normal situation for many different Central Banks. This is coming to the argument of negative Interest Rates. Negative Interest Rates should do just that. If you have negative Interest Rates, you are supposed to be spending more money. But actually, in japan, when they first took negative Interest Rates, there is a massive surge of people buying and putting money under the mattress instead. Doesntchology necessarily work. One thing i would say to that analysis is that that might be textbook analysis, but what we have to remember is all the other Central Banks are going to be doing the same sort of thing. Potentially on the currency markets, you have a zerosum game. Anna really interesting, the behavioral economics of negative Interest Rates. James foley stays with us on the program. Just want to bring you a breaking redhead line. China and india, the militaries of those countries agreeing to disengage. You remember that border conflict caused some friction geopolitically and some tension. We heard those reports of tension. These comments coming this morning or this news coming from the press trust of india. Inittle bit of a decrease the tensions on that border. Ing up [indiscernible] the single Biggest EnergyInfrastructure Investment in the world so far this year. Has been on forging new partnerships, driving growth and ensuring that we progress in a way where we create value, so im very delighted to have delivered on what is a huge achievement. Anna Global Infrastructure partners are among investors in abu dhabis gas pipeline deal. We will bring our full interview with the adnoc ceo later in the program. This is bloomberg. Bloomberg. Matt welcome back to the european open. We are just about 13 minutes into the trading day. We are still seeing gains across European Equity indexes. The dax gaining 0. 3 right now. 0. 33 . E up investors are watching european pmi data for june to see whether the worst is really over. Activity is likely to pick up across the region after governments further relaxed the stringency of containment measures. Brits will soon be able to go back to the welcome back to the European Market open. 20 minutes into your trading day. Numbers are pushing equity markets higher. Pushing the euro higher. The euro up to sense of a percent against the euro dollar. German numbers are coming in 10 minutes. National oil company has sold a 10 billion stake in its natural gas pipeline led by Global Infrastructure partners. Values the assets at more than 20 billion. The ceo spoke to manage granny. Manus cranny. Todays bid is the singular biggest Infrastructure Investment in the world so far this , our strategy has been focused on forging new , and ensuring that we progress in a way whereby we create value. So im very delighted to have on what is a huge achievement. 10 billion u. S. Dollars of strategic direct investment. So, it is a great endorsement of credibilityglobal and a highly trusted investment destination. Can i ask you about that 10 billion that is going to come in . Is that going to protect the Capital Expenditure of adnoc . How will it be deployed . Manus, we have taken huge strides in transforming our organization. Todays announcement is just another example of that transformation. It unlocks value from our portfolio of gas pipeline and it gives us a platform to drive growth and reinvest in our business while ensuring that we maintain sobriety over those assets. As a result of our ongoing transformation, we are far stronger and better positioned to manage the current Market Dynamics and price fluctuations. So, we are focused on what we can control and that is our costs. We will always look at optimizing costs to drive efficiency and to maximize profitability. As you know, im sure youve heard me say this before, our focus of course will not change. Regardless of the circumstance and regardless of the situation. Wasing it simply, our aim to always be one of the lowest cost producers in the world. So, we are focused on responsibly progressing our strategic projects and looking for opportunities to maximize profitability for our shareholders. You talk about the things that you can control and the things that obviously no chief executive can control, the demand, the demand for energy. Give me your perspective at the moment on how quickly we might return to see oil demand back at precovid levels . What are you seeing in the business . I dont think anyone is in a position to predict exactly what a recovery will look like or how going to be like over the next few months. Agree thatonomists the recovery will be more of a ushaped rather than a vshaped. Seener, we have actually the Oil Market Tightening in recent weeks. I can tell you that this view is very much shared by my colleagues across the industry. Week, weow, only last had the fifth ceo roundtable. That there consensus is cause for optimism and positivity. And why do i say that . China, we aren seeing a robust return of oil demand. Trend that is beginning to show in other parts of asia and europe, also in north america. It has clearly been boosted by the reopening of the National Economies and the recent continuation of the opecplus agreement. ,att that was the ceo of adnoc Sultan Ahmed Al jaber, speaking to manus cranny. Coming up, brussels spars with beijing. Eu leaders criticize china over hong kong, coronavirus disinformation, and the economy. Up next, we will discuss the growing tensions between europe and china amidst the tensions that we all see between the u. S. And china. How will this new world order shakeout . This is bloomberg. Matt welcome back to Bloomberg Markets, this is the european open. We are 30 minutes into the trading day. We are now getting pmis here in germany, as well. 45. 8. Looking at the German June Services pmi rises to 45. 8. Was 442. 3. It still is better than had been anticipated, but it doesnt look like the french pmi i say well above 50, it wasnt well above 50, but the fact that it was about 50 it all means it is expanding. Services french pmi was 50. 3. If you look at the manufacturing pmi in france, it was 52 point one. Both are expansionary numbers. The composite was 51. 3. The economy is back into growth. Lets take a look at the story so far for the broader benchmark stoxx 600 index. You should see it getting a little bit of strength into the session. Now up more than 1 . Screen onk at the grr the stoxx 600 to see how it breaks up in terms of the groups, the industry groups, and how they are ranking today. You can see the cyclical stocks doing quite well. We were talking earlier. Switching into investing in cyclical stocks toward higher yielding investments from ig credit. That has paid off in equities. You can see auto and auto parts makers are gaining. Banks are gaining. Industrial goods and services are gainers. The only loser it doesnt look like it is losing health 0. 008 . Actually up Health Care Even though there is a little red arrow is not down. It is a good day for up. Absolutely. A good day to be up. Lets get a bloomberg first word news updates. Top corporate stories and global news stories we need to follow this morning. President donald trump said the phase i trade deal with china is fully intact. That followed confusion overnight after comments from his trade advisor Peter Navarro, who spoke to fox news indicating the deal was over. He quickly walked back the comments saying they had nothing to do with the phase one deal and were taken wildly out of context. In the u. K. , Prime MinisterBoris Johnson is set to announce the next steps for lifting the coronavirus lockdown. The move is expected to give the green light for cinemas and museums to open doors from july 4. The Prime Minister will also cutting thehe is social distancing rule. China and russia are criticizing the u. S. For a stunt at the nuclear arms control. Beijing had not been due to take part in the talks and its chief armscontrol official responded it was an odd scene responding, how low can you go . Russia also condemned it. Saudi arabia says it will allow the annual pilgrimage to go ahead this year, but only for a limited number of muslims already in the kingdom. State media says it will work to ensure safety, hygiene, and social distancing during the annual event. The move will have repercussions all around the globe. Many wait years to secure visas and save up for the trip. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Matt . Matt all right, the European Union and china have sparred over geopolitics and Business Practices. Helprs from the eu bloc videoconferences with chinese leaders, the president and the premier. Lets get more details on that toplevel meeting with our reporter in brussels, maria tadeo. The summit ended without a joint communique. Was aw last year there very positive and productive summit that did have a great statement. What is the significance of that . Good yes, that is a very point. We know the summit was happening. The head of the European Commission was in it. She was also in the call at one point. But there was no joint conclusion, no joint statement, which is rare. It is not a good signal. It means that the two sides were very far apart. Is even more striking if you compare it to a year ago. Statement very much hailed as progress during the European Union and china and it signaled almost a positive turn in the relationship. But this does is it really showcases what we have talked about another show many times. The tone or the dynamic has really changed. The europeans are concerned about some of the Business Practices that we see from china, whether you are looking at subsidies from chinese backed companies, whether you are looking at dumping in europe. The commission does believe some of the behavior is actually predatory on european companies. Then you have the politics, the demonstrations in hong kong, the european parliament, which is not politically binding, but it does send a strong signal. They do believe china is actively trying to diminish the one nation, two systems. It has been very forceful when you look at the political intervention in some of those demonstrations. Overall, it shows that there were too many differences to even come up with a joint statement. Once again, it is that pushback we are seeing from brussels almost saying, hang on a minute, we need to recalibrate the relationship, it is not business as usual. Anna on to Something Else. Weve done some work at bloomberg news, our colleagues have, into what happened to the amount of money that has been promised by various european governments. Specifically the funds made available by governments via banks as loan guarantees for business. It is interesting to see what a small proportion, just 15 of that available guarantee, has been used. What does this tell us about the the business and the backstops coming from european governments . Maria thats right. We all remember that at the start of the corona crisis, we had governments all over europe coming out with loan guarantees saying, we want to keep the smes alive, that they have liquidity and can continue to do business. But they are only 15 of the total amount that have been used. There are a number of stories here. You do see huge differences between countries. When you look at germany, they promised 1. 3 trillion euros. Only 30 trillion have been used. Only 50 billion pounds have been used. Clearly, there is a huge lag between the amount promised and the amount that has been able to be paid out to companies. The flipside is when you look at spain, they said, we will give you 100 million euros. We asked the experts, what are the reasons for it . It is very difficult for governments to come up with a precise figure. This is an unprecedented situation. It is difficult to put a price tag to it. Issue of at is the lot of redtape, difficulties when you put the money from the government level to passing it on to the banks and then the banks passing it on to clients and businesses. To see that only 15 of that amount of money, which was huge at the beginning of the crisis, has been used, and it has been now weeks. Tot it is not always easy spend huge amounts of cash. You probably dont remember brewsters millions, but it is a fantastic film with the late Richard Pryor about that subject. Maria tadeo in brussels. Issues that europe is having. Those are better. Not being able to spend money you have been needing to spend money you dont have. The recovery will come by yearend according to pershing squares bill ackman. Sloppysnt stopped by a reopening process. We will hear more from that interview next. This is bloomberg. Anna welcome back to the European Market open. We are 40 minutes into a trading day that shows decent gains for european equities. Up by just over 1 . The ftse 100, a bit of a lagger. Lets get a Bloomberg Business flash for you now, some of the top corporate stories we are following. Softbank is selling part of its stake in tmobile in a 21 billion dollars deal. The sale is part of a broader push by the conglomerate to unload assets in order to finance buybacks and pay down debt. The company is dealing with seat losses in its vision fund after writing down the value of investment in wework and uber. Sources tell us wire card considered a tie up with Deutsche Bank and even approach the lender with the idea, but Deutsche Bank quickly into the per luminary talks. While the bank has more than 1 trillion in assets, it market value was less than wire card as recently as april. Abril apple plans to sell Mac Computers with inhouse processors, signaling an end to its 15euro alliance with intel. The change was announced at the Virtual Conference for software makers. It also saw the most drastic change to the iphone home screen since the product possible lease. It will now allow users to place widgets that sit between the usual grid of apps. That is your Bloomberg Business flash. Matt . Right, pershing squares bill ackman says the recovery in the u. S. Economy could begin by yearend, but the reopening process will be sloppy. He also says the outcome of the coming u. S. Elections wont impact his investing strategy. He spoke with David Rubenstein at the bloomberg invest global summit. Going tohink we are begin a recovery certainly by yearend. I dont think we will be back to anything close to a normal economy until probably the second half of 2021. I think if we have an early pfizer has been talking about a potentially distributable vaccine by the fall and that will make an enormous difference. I thing if we can reduce the treatment of the virus to one test you can take it home to get an accurate result in 15 minutes and it is telemedicine to your doctor to say you need a prescription for remdesivir in an inhaler format and you can stay home for two weeks and be fine, those things will make a fairly significant positive impact. But we have had kind of a sloppy closure of the country for the virus and we are having a bit of a sloppy reopening, so you are not going to have Business Confidence return and Consumer Confidence return until people feel safe, truly safe. If i had to guess, i really would say the second half of next year. Beginning in q4, q1, q2 of next year. You said sloppy opening. You mean there are a lot of cases in texas and florida and it doesnt seem like it has disappeared. Are you worried that this could keep going on for all of 2021 . Happen think what will the Health Care System is Getting Better and better at treating the virus. They are learning when to put people on a ventilator and when not to. They are learning which drugs can have a positive effect and learning about what doses and went to get the medication. Testing is improving. I think all of these things are positives and will improve. Onfidence and reduce risk things will be a lot better in a few months. You will have some states with a lot more cases because people have not been careful in those states will have to moderate Economic Activity and maybe go to a mode of protecting more aggressively people at risk and being more cautious. Again, all the things which will temper the economic recovery. But i do see kind of a gradual improvement on all fronts as the Global Healthcare system is working on solving one problem and a lot of resources going into it. I think by the fall we will feel a lot better. If we can take death off the table, if we can take severe illness off the table, i think that is certainly possible this calendar year, people can feel a lot better about going out and living a more normal life. If jay powell called you tomorrow and said, should i do more . And if secretary of the treasury said, should i pass another bill working with congress . What would you tell both of them . Would you say we need more help or we have had enough . Tol look, i think we have protect the most Vulnerable People economically during this period of time. Know when to these programs precisely run out . You need to design programs we made a lot of investments in the Restaurant Industry where some of the benefits are at a level where they are better than 15 per hour, sort of the minimum entry points for many private businesses and it discourages people. You dont want to reduce economic incentives to return to work, but you have to have them large enough to protect people during one of the more challenging times, particularly people at the lower economic scale. Lets say i told you today, no doubt about it, absolute certainty, that the next president of the United States would be donald trump. Would you short the market . Would you go along the market . What would you do . Bill it really wouldnt change anything we are doing. Our strategy is to buy super high quality, dominant companies that can withstand a pandemic or a Dramatic Movement in Interest Rates. We are not particularly exposed to the economy. Who the president is is not something we would make a bet one way or the other. The same thing would be true abide in. If i told you for certain he would be president , you wouldnt change your views . Bill no. Politics itfrom the would seem, bill ackman at the invest global summit. Looking ahead, here are some more of our biggest interviews. Starting from 6 00 p. M. London time, we will be speaking with the pimco ceo, manny roman. Treasuryly, u. S. Secretary Steve Mnuchin will be joining David Rubenstein. Still to come on this program, trade miscommunications. The european pmi recovery and the outlook for oil. We will take a look at what markets look like. This is bloomberg. Matt welcome back to the european open. We are 50 minutes into the session. Looking at 2 gains for the dac. Gaining 0. 77 . European markets starting the day higher after President Trump took to twitter to reassure investors that the u. S. China trade deal was still intact. But the slump in risk assets before hand prompted by Peter Navarros comments show how vulnerable markets still are to negative news on the trade front. Lets get into the markets with laura cooper, our bloomberg mliv macro strategist. What do you think about navarros comments . He thinks they were taken wildly out of context. What do you think about the state of the trade deal now . I think it really just indicates that u. S. China trade tensions are going to continue to be a source of market stress. They are ultimately just prompting absent flows and not really a catalyst at this stage to spark a selloff. I think it is really more logical for the u. S. To continue of they the benefits preliminary trade deal for it potentially escalates things further as we get closer to the november election. At this stage it is a keep calm and carry on kind of scenario. Anna good morning to you, laura. What about the state of play in terms of European Data . We have the pmi numbers out. The french number looked pretty strong rebounding into the expansion territory. This has been well received by mark its it seems. Laura absolutely. We are seeing these headlines across Manufacturing Services is why we are seeing european equities this morning. That is already when they were positioned for some catch up on the back of the u. S. Session. I think really digging a little bit deeper beneath the headline print and the recovery is ongoing. Also demand conditions remain relatively subdued. We are seeing leading indicators of new export orders continue to fall. Firms are still signaling that they are cutting back on staff. Yes, the Business Outlook is positive. We are seeing the sentiment improve on the back of this, but it is encouraging, but i think it is too soon to signal the all clear on recovery efforts, just because there are these risks around lifting of lockdowns and whether we will see a spike in infections that could prompt kind of renewed restrictions further down the line. Matt what do you expect us to see with the dollar here . We have had more and more people say that it is going to continue a week streak. Laura i think that is the case. I think certainly what we are seeing is if we see kind of these risks within the u. S. And pockets of second wave in some areas and we see more encouraging signs of growth improvement outside the u. S. , notably in europe, that is going to kind of propel this rotation in assets away from the u. S. , not to mention just the fundamentals within the u. S. If we look at the Interest Rate differentials or the carriage rate, it has collapsed in the u. S. Relative to the g10. Then we overlay that with the potential for political friction to escalate in the u. S. Leading into the november election. The ballooning fiscal deficit this renewed concerns about deficits. I think ultimately that is going to come back and all of those together really do put pressure on the dollar going forward. Even if we do see kind of bouts of demand on risk off sentiment on infection cases. I think ultimately the signal is for a weaker dollar. Anna thanks very much. Laura cooper, Bloomberg Markets live macro strategist. Joining us in london for an update on what we see on these equity markets. That is it for the European Market open. Surveillance is next. They will be taking you further through the euro zone pmi story. We have numbers from france and germany. France back into expansion territory. Low 50s. Above 50 is something. German numbers also beating estimates. That sets the stage for the eurozone numbers as a whole. That is coming at the top of this hour. We are off to bloomberg radio. Catch us there. This is bloomberg. Francine its still on. President trump insists the phase one trade agreement with china is fully intact. Peter navarro claims his earlier comments were taken out of context after suggesting the deal was over. The u. K. Is reopening. Prime minister Boris Johnson will announce the latest stages in easing the lockdown today. The two meter rule is expected to become one meter. Global coronavirus cases reach a record, fueled by latin america. The Texas Governor says contagion is accelerating