The broadbased losses. The dax is getting pushed punished, down 2 . Eurozone stocks down 1. 7 . Really broadbased losses and parts could be due to the stronger euro because we saw following the ecb Mario Draghis press conference, it hit an alltime high. We are up 0. 2 above the 1600 handle. We are seeing broadbased dollar weakness in the session playing through into other currencies in europe. The fixed income space, yield come down in at the core and periphery keeping a close eye on the peripheral spreads which i will get on in a moment. Look at the euro. A guest of the dollar, about 0. 2 higher. Sterling, ever so slightly higher, almost as he will. 1 almost a super. 1 after four day of losses. You are seeing Euro Weakness against the yen. We are down against the yen. Broadbased strength of the yen. Some divergence begs the question if the euro is due to the dollar weakness. If we look at what is happening with the germany spread, we saw it hit its lowest since 2015 after Mario Draghis press conference yesterday. One guest said the bond market wected like the adult and see that bounceback ever so slightly but below 100 basis points. Stoxx 600, i have attracted over five days, down almost 2 on the week, first weekly loss since june. Julie we are seeing losses in at the u. S. Among stocks largely by earnings disappointments we have seen as major averages higher lower. Some of the big dow components are down. Overall, the earnings season thus far has a relatively strong that helping propel games in stocks. Look at bloomberg, s p 500 and per sharenings estimates climbing higher and higher and higher. We will see what the balance of the season brings. In terms of big the clients, General Electric is one weve talked about big declines, General Electric is oneweb talked about with it a disappointing forecast and disappointing numbers is one we have talked about with a disappointing forecast and disappointing numbers. Higher. Heading according to the ceo, benefiting from an overall healthy economy and volume with that grew in every major regional. On the downside, call gate colgatepalmolive the removed language from his statement that predicted sequential sales improvement through the balance of the year. Ebay, which abigail just mentioned, that Company Coming out with lackluster forecast as well. Big earnings disappointing. Oil is not helping because of report that opec supply in june will be the highest this year and no indication opec members will do for the production cuts. Moment. Ower at the if we take a quick look at the bloomberg, a chart of the s p 500 versus the Energy Sector which has been lower this year and underperforming. That Energy Sector is not helping matters either. Nejra thank you so much, julie. , the impact of centralbank policy as the euro heads for weekly events. Joining us is european economist for citigroup. Guillaume menuet. We see the euro heading games after the twoyear high following Mario Draghis press conference yesterday, should mario draghi have said more about the currency, you think . No, because oft the central bank is not bound by the markets. It is a mistake investors are making thinking that the possible announcement of a tapering, a hard taper in 2018 will mean the ecb will hike Interest Rates and we think there will be a long lag in the next as that term in the first rate hike. Typically, investors try to price in the First Central Bank move, the fed through the last couple of years. I think that will be the same with the ecb. Nejra yeah, i get what you are saying, of course the fx market is not the ecbs mandate. But a difficult for mario draghi to ignore. I have a chart that shows of the levels andat preqe2 that does have an inflight impact on inflation. Do you see and concern of what youre looking got with a tightening of financial conditions . Lookaume menuet when we at financial conditions, we do the average in the Second Quarter which is a standard deviation above, which is very good, the highest since 2011. When we look at what happened in july, we lost two decibel points. Ecbs potential advice twice as fast. What you see in the euro is probably on the trade weight because it is on a tear. What we monitor is the trade weighted and is up 3 , 4 , 5 . 1 ofuld maybe shave off the 2018 and 2019. They will have inflation ballparks, the same as in june. By then, growth will have been revised up. The ecb is in a difficult position, they have to announce that qes extended but cannot know how to announce the realities. Where less in a situation things are good in terms of growth, a bit disappointing for inflation but surely it is comical. Nejra nobody knows better how to cross a narrative. And aare echoes of 2012 couple of years, do you agree . Guillaume menuet the ecb is not going to make a policy make they made in 2011. At the time, true, they were increasing tensions in the market. And the euro area this time, there are tensions in some labor markets but it is not high enough. They will announce in september they are going to buy in 2018 with a view of ending the program. It is a very cautious ecb and they need the mandates and they need to be credible and they need to be flexible. Therefore, we are going to have a fairly long tapering exercise. What event how concerned should we be with some of the peripherals vonnie how concerned should we be with some of the peripherals . Eece is still almost untouchable by the ecb. Do we have further problems down the road . Guillaume menuet i think what of the market is doing is thinking about an increase in risk free trades but to these frets is not going but the going to bet particularly difficult for countries like portugal or italy. In the banking system, were still weak. To thextending Credit Private sector in the tune of 2 . Have had aggressive exercises as the later than others. It is coming down. Stable ass produced we look at it now. Itll be a case where it stays very low and a lot of relief. I think with ecb support and fiscal support largely neutral, were looking at it this year and pretty much the same story next year. Nejra thank you to guillaume menuet. Have your the progrowth. Bloomberg will have full coverage of the fed decision on wednesday with a jeff rosenberg, bill gross and former fed judgment former fed chairman and london and new york. Vonnie heres courtney donohoe. President onohoe trump is shaking up his legal counsel. John dowd will not be the lead. Dowd is denied reports that the president wants to highlight conflicts of interest in the special counsel. Dowd will replace marc kasowitz. Oil producers to meet to clear the global oil glut. There is little chance they will come up with a more aggressive schema. They are try to find a deal between Major Oil Producer producers. The fund says it has approved in new loan worth as much as 1. 8 billion dollars in conditioned on eurozone countries providing greece with the debt relief. In london, a judge rejected a request to file an 80 billion suit against mastercard. The group accused them of unfair charges. The judges ruling could limit britain as the location for classaction suits. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am courtney donohoe. This is bloomberg. Nejra thank you. Shares of a major german automaker falling after they held the decades of talks on Engine Technology that breached rules. This is bloomberg. Funny vonnie i am vonnie quinn. Nejra how to your down to the european close. Ismanys Auto Industry reacting to a new report about potential antitrust collusion, volkswagen and bmw and daimler shares tumbling. Decades of talks among the companies that make a breached car rules. Joining us now to discuss at the significance of the reports managing editor of Global Business for bloomberg news. Benedict, give us more detail, and in response from the cartel . A bit of a bombshell that dropped and the shares are quite are off quite sharply, bmw, dialer and volkswagen and we are seeing them drop drastically. Since the 1990s their vent talks, illegal talks among these car companies, a group of five about technology ranging from the technology of a convertible roof to what the goals into the engine and that is illegal. The carmakers have not confirmed that. All we know from the cartel authorities is they searched carmakers last year by the different probe into steel prices in might be a buy cash of that probe. This is something still being investigated. The carmaker so far not saying anything. Vonnie how does it relate to the emissions scandal . Benedikt it relates directly because it seems to be talks about the emissions standard and how to regulate emissions in at the engines. And also indirectly in the sense it could not come at a worse kind of time for the car industry. It will say every week, there is a difference scandal of some. Ype, they need to overcome at the start of this week, daimler doing a massive recall of cars and today, audi doing a similar recall and a massive volkswagen scandal awaited. This is really a massive damper on the industry and it feels like they cannot catch a break. Nejra benedikt, we have seen the reaction in the share prices, if it is confirmed, how much Financial Impact could we see . Benedikt very difficult to say. If true, we are talking about decades of collusion and they do not take these things lightly. One analyst we spoke with said it could run into the billions, which for a company for volkswagen come if you think about it already paid out volkswagen, if you think about it, it already paid a billions for the emissions cheating. This is something the industry does not need. Nejra thank you so much to editor ofmanaging Global Business for bloomberg. Sticking with germany and the rising tensions between germany and turkey as if the two nato allies argue over a series of issues including turkeys detention attention of a german human rights activists. Urging human rights people not to do business with turkey. Is no longer Legal Security and Even Companies entirely blameless companies are being associated with proximity to terrorism and there are examples of appropriation. I cannot see, we as a german government, can protect german investors because of arbitrary political motives are not just a threat but have already occurred. Nejra germany is turkeys largest trading partner with trades worth more than 36 billion last year. Joining us is chatted thomas. Thomas . Ad it has been bubbling below the surface between germany and turkey. I amweek, when germany, sorry, when turkey arrested this german human rights worker, that really got a strong reaction from the german governor with the chancellor, angela merkel, expressing her concerns. And this press conference we just saw with a German Foreign minister saying that basically it is time for reset in relationship with turkey. Ultimately, then, one of the other concerns that the germans have has to deal with the businesses and the german said they received a list from turkey of businesses where turkey made accusations against the german businesses about their operations in turkey. Germany said a there is nothing to the accusations and they were not concrete and declined to investigate. Ultimately, the turkish president came out and said, erdogan said that is a wooden stand up to germany and german businesses had nothing to worry about doing business in turkey. Vonnie it is fairly terrifying, what could be the followthrough, what is at risk for germans . Chad thomas there are 6800 german businesses present in turkey. They have a huge footprint there. Big manufacturers, volkswagen, daimler, they all have a footprint there. They see turkey as a place, a launchpad for the rest of the region. Ultimately, if things were to go sour but you have to wonder about their operations. We are a long ways from that point in now, but one of the warming warnings that came from germany to businesses. Nejra bloomberg has written a great story outlining the many businesses that could be impacted but who is most at risk . Chad thomas most at risk is it the Automobile Industry because they have significant manufacturing footprints in the country. Volkswagen, daimler and a lot of suppliers like robert bosch, the biggest auto parts supplier, the german company, they are the ones at risk because volkswagen, for example, they are one of their subsidiaries making the buses. There may manufacturing plant is in turkey. If there were to be a disruption of the service, that would eventually for them in terms of operation for delivering the buses they built. Nejra it all circles back to the automakers. In q2 chad thomas thank you to chad thomas. Shares of Credit Suisse under pressure as they lose 1 3 of equities session shares. Details are next. This is bloomberg. London, thefrom market close just a few minutes away. Vonnie live from new york i am vonnie quinn per a story getting a lot of hits. Credit suisse has withered under ceo Tidjane Thiam. Of itsost about 1 3 market share to competitors and that is a lot and there are a variety of reasons included a push into asian that happened it to backfire. And trading that did not go so well. The shares are down about 5 this year and swiss trading and we will get the report next week , earnings report. Some positives but at the equity market share down by1 3 have to hit more round hard. Talked about the earnings we are looking ahead to, the overall business is forecast to double profit in the Second Quarter and Tidjane Thiam has succeeded in areas like cutting cost and raising capital and to dealing with the bad assets. Let me take you to the chart. It shows Credit Suisses share price since Tidjane Thiam took over as the ceo and it has come of the share price has underperformed as a bloomberg banking index we havent against. It is something for investors to be aware of. Vonnie statement and theres another to your strategy. Competitors like Morgan Stanley and Goldman Sachs am a not that they had an amazing quarter but they did manage to stay flat or sachs, sex goldman they have not had an amazing quarter, but they did manage to stay flat or higher. Tidjane thiam will discuss Credit Suisses Second Quarter earnings and that is next week. The businessor flash. Some of the biggest stories in the news right now. From General Electric, it says it is trending towards the bottom end of its profit forecast this year. They face hurdles. It marked a disappointing end to tenure ceo 16 your year tenure. Blackstone group and cvc capital offering to buy a firm for 3 billion. There is but a more consolidation in the payment sector. And at that is your business flash. Looking ahead to the European Equity market close. Equities lower. This is bloomberg. Nejra this is the european close and im nejra cehic with the vonnie quinn. Lets take you through all of the Market Action today. It looks like we are heading, will closed the first weekly loss for european stocks since june. You see red, broadbased losses, the dax is down. The cac 40 down 1. 5 . Eurozone locks stocks down 1. 4 . Some could be due to the stronger euro at a near twoyear high. Was 16, 51. The euro strengthening a little bit. 116. 51. The euro strengthening due to the dollar weakness which is why we are seeing some of these other currencies gaining does the dollar. The fixed income of space, we see the yields calmed down and the core and periphery and keeping a close eye on the peripherys spreads periphery spreads. Down 1. 3 and oil is weaker ahead of the opec meeting in st. Petersburg. Gold is higher on the week, in fact. Down at the end of the trading day and it is red, every Industry Group is down, industrials leading the losses. These are broad best losses broadbased losses, cross industry roots. Is the euro, this is the Bloomberg Euro index. What this chart is showing it is back at preqe levels. Talk about euro strength as some say yesterday was due to mario draghi not to doing enough to talk to the currency. How much of a currency of a problem with a stronger euro the if it continues to weigh on inflation . That is something he talked about we will talk about more this hour. And on Bloomberg Radio this morning, one guest was saying the blonde market behaved like the bond market behaved like the adults in the room. We saw the german spread tighten to its highest was still below 100 basis points in todays session. Vonnie you mentioned the currencies and it is one of the more interesting channels what what a monetary or fiscal policy work its way through. The dollar index and the yen is one of the beneficiaries. It is set a low this week but is stronger today. I thought i would point out the 12538, it is up from not too long ago. The reasons for todays move is retail sales came in at a strong and support to bank canadas view that the 25 basis point increase was invalid. The offshore your one, six point yuan, and it keeps getting ever stronger. Nejra thank you so much. I was talking about the euro, eyeing the 2015 hi and high and investors are taking bets. Joining me now for more is chief Strategy Officer salman ahmed. Great it to see you. I want to talk about this reaction, very different in the euro compared to what we saw in the bond market. Which of those markets got it right . Salman ahmed you are right, between markets and mr. Draghi, the portugal speech, clearcut dovish given by mr. Draghi isterday, the market appearing to take it on. We are getting a to the situation where the more the market pushes mr. Draghi, the more dovish he becomes. Careful and he mentioned that financial conditions are worrying him. I think the more were reading he will be he the more worried he will be he has to be dovish. Nejra despite of the overall dovish tone, which is what you to the weight, the euro continues to grind higher. To this chart. Hedge funds most bullish on the while the dollar is falling out of favor. In your view, you do sort of see tightening from the fed where you think theres no rush from the ecb. Doesnt this which around with the hedge funds it getting it wrong . Thisn ahmed right now at current level, some tapering is already and the price. , i think we extra are into preqe levels on the eurocrisis. That is an important the level because from here on, you would need hawkish to support for the rises. Further rises which i do not think will come through. I think mr. Draghi and his supporters of the council will take it very, very easy. Eddie tightening can be quite dangerous. Nejra what does it mean for bond markets . We were talking about spreads. Do you see spreads continue to tighten . Salman ahmed i think that natural gravity is toward spreads because in our review, the exit which will happen is going to be longer than the market thinks. And the reason is inflation is low. And the ecb is an inflation target are. Given extra liquidity to help the periphery and that is back towards levels. Nejra lets talk about equities. European equities, first weekly loss now since june. Your positive you are positive . Salman ahmed we stay positive on the basis of valuations. European equities over you as equities. Equities, eu as concern the fed is concerned about the valuation. In is some comment coming in on european equities. But also the currency going up is negative for the next quarter. That is another manifestation. Nejra i want to take you to another chart, we will be chart heavy but i know you love the charts. Trillionadding 10 this year while bond value has risen by 3 trillion. What about any rotation going on . Is there a rotation you see . How do you play off bonds of versus equities . Is a criticalthis question for us in this business cycle. Given the starting level is so low, it is difficult to justify in a bonds because even if something goes wrong, not that much to offset the capital gains. Theres always this preference for equities as long as growth is defined. The equity space, you are not as positive on the just europe but emerging markets and despite of the fact you see the fed tightening coming through . Salman ahmed i think the fed tightening, what was seen is emergency and access to fed slowed down. The valuation is more attractive and that gives resilience to emerging markets. Fedi think given that the will probably have to postpone , mrs. Yellen mentioned the low inflation dynamic which is in place in the u. S. , that gives breathing room for em further. Nejra what about the commodity effect on emerging markets . You see it not as strong . Salman ahmed this years a good example. E. M. , you blink an eye and oil going down. First look, it was seen as a more some apply site more supplyside issue. And also, the softer dollar helped offset some of the losses on the terms of trade. The less point is a lot of these emerging markets are becoming more balanced and the exposure to commodities themselves are reducing. Nejra a final question on volatility and will talk about low volatility will not everybody thinks it is phenomenal. I have the skew gauge at its highest in at least 27 years relative to the vix. I am sure you know what it shows well investors may not to be preparing for general volatility, there are quite prepared for a big shock. Do you see any of those coming . And if so, where from . Salman ahmed right now, as it stands, it is important to understand as it is happen with centralbank policy. The one that worries me is the fed because there talking about Financial Stability. Usually Central Banks do not talk about Financial Stability unless ends are glaringly obvious. That is something we need to be focused on at it is linked to valuations. Has to do with the geopolitics especially north korea issue. I was in asia recently, a bigger concern there than isis in europe because a bigger concern there than in europe because of the risk of something happening. The u. S. China relations become contaminated and that is something we need to take into account. As more and more is coming, china is not. Nejra salman ahmed, thank you so much. Vonnie lets check in with first word news and christie donohoe has more. Anthonyding to abc, scored which he scarmucci has accepted the White House Communications job. The Trump News Team in the news. Some of the president s lawyers are trying to undercut special Counsel Robert Mueller who is investigating ties between the Trump Administration and russia. John dowd is the president s lead attorney, he replaces longterm trump attorney marc kasowitz. The u. S. Government is banning citizens from traveling to north warrior, theuto american student who died after he had been imprisoned october warm beer otto warm bier, the american student who died after you been imprisoned there. Greekthquake struck a island of kos. Two people were killed. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries, i am courtney donohoe. This is bloomberg. Vonnie thank you. How are democrats reacting to the controversies surrounding President Donald Trump . Sen. Ron wyden joins us next. This is bloomberg. Nejra i am nejra cehic. Int a bank lots going on washington. Plenty of controversy with President Donald Trump. His political agenda coming into question. Kevin cirilli joins us in new york. And a key democratic senator. Kevin yes, we are joined by senator ron wyden, the top democrat on the tax reform committee. The fourth highest ranking democratic member. Thank you for being here. Sen. Ron wyden thank you. Andn the news of the day you are part of the Senate Intelligence committee, the deadline is today for whether or not holloman afford, and donald trump jr. Paul manafort and donald trump jr. Are going to committees request to appear. Do you think they should come . Do. Ron wyden i we need open hearings, we needed to use subpoena power and declassified documents. It is critical they appear. Kevin there has been reporting within the last 24 hours that special Counsel Robert Mueller has decided to expand the scope of the investigation into the president s business dealings. The president told the New York Times he does not been mr. Mueller should be doing that. If he fires mr. Mueller or attempts, what can congress do what i am sure you do not think that is the right decision he should make . Sen. Ron wyden i think the president is way off base to say bob mueller cannot get into Financial Issues and they are linked to the work we are set to do. Going back as far as 2008, the president s sunsetted much of their portfolio was linked to russian money and we do not have the president s tax returns and to do not know about borrowing money from russia. Bob mueller is appropriately thinking based on the news reports about these issues. If the president was to fire bob miller without cause, that would be an attack on the rule of law it would be an attack on our democratic institution. The congress has got to meet that with a very serious response. And i think the congress ought to look at all available options. Kevin what options would be available . Some republicans say theres too much conflict of interest with regard to the special counsel in order for there to be a transparent and unbiased investigation . sen. Ron wyden first of all, if you look at bob millers record bob muellers record, he is never been called on professional before. I think for the president to fire without cause would be met with a very negative reaction and frankly, in the senate, it would be bipartisan. With respect to what you would do, certainly, there would be some senators who would say a new law has to be passed to deal with these kinds of situations. I want to make it clear if the president of the United States fire bob miller without cause bob miller with mueller without cause, all options are on the table. Kevin it is a hyper partisan time. The Senate Finance committee. Tax reform is something republicans want. Is there any type of lowering of the Corporate Tax rate that will come by the end of the year or the First Quarter of next . First of all, this administration has indicated and Mitch Mcconnell to lookingey are not at a bipartisan approach. Mitch mcconnell said he will use something called reconciliation, which is in effect, our way or the highway partisan approach. I have written 2 full comprehensive tax reform bills with 2 republican senators who have been close to Mitch Mcconnell over the years. We have made it very clear that we think the tax system is it to focuse want on the middle class, getting more money in the pockets of the arele class, both wages flat and driving 70 of the economic activity. We want at the focus to be there down. Kevin will the same it happened with tax reform happen with health care which is nothing . There is no Common Ground that can be made . Sen. Ron wyden i just described, ground. I justd, the brown described Common Ground. I wrote 2 bills who were key lieutenants with Mitch Mcconnell over the years. What is striking other tax issue is we have seen republicans and of the house, not even able to agree on their budget because they have different opinions with respect to how it handles taxes. Thatt to say once again the democrats, if the republicans will set aside reconciliation, as the partisan only approach, where anxious to work with our colleagues. Cap event will be interesting to see. House releasing a set of principles with regard with a nafta. What do you think about that this . There are some faction of the Democratic Party who would agree with the president rhetoric . The campaignn rhetoric and what is being discussed by this administration so far is very different. The president did not like the Transpacific Partnership or nafta. Basically what he is doing is taking existing trade a lot and pointed a new coat of paint on it. I was asked by your colleagues with respect this was all affected by the mexican they seemed to say the big consideration is the timing of when the mexican votes and workingclass people were not hold in the last campaign that the real issue about a considerate of the mexicans and the timing of their elections. What we told was there would be more red, white and blue jobs and were not seeing that. Kevin you are absolutely right. Sen. Ron wyden the top democrat on the senate taxwriting committee and we thank you. Thank you for making the time. Sen. Ron wyden thank you for having me. Vonnie thank you to kevin cirilli. Nejra a great interview. Battle of the charge of time. A gold session in honor of the open championship. Who hit the green and who will end up in the rough . I decided. This is bloomberg. Nejra time for global battle of the charts were we look at some of the charts of the day it went they mean for investors. You can access it them by running the function at the bottom of your screen. Kicking things off is vonnie. Vonnie in honor of the birds, the british open, the second round. There is a tie at the top of the leaderboard. He is really and Jordan Spieth tied for first pretty lets move on to the chart. Under we golf is think golf has dropped. It is below 20 million players playing more rounds. The number of people employed at the golf clubs and country clubs, the growth is on the decline. It is not a negative, not anymore at least. It has been a very volatile. Right now, barely seeing growth. A lot of overbuilding of clubs and country clubs and so forth like a there was in retail and youre seeing some of that come off. A small sector but very important one for those 20 Million People who play. You can see that chart. Nejra nice. What do you have, emma . Emma i must confess i know very little about golf except it looks like a nice, long walk. In outsidenow is activities, especially one as that happens in britain like the british open requires excellent weather. I decided to take a look at what happens across the pond. This is my chart. Shows his average rainfall and temperature since 1990. At the end, almost unheard of nomenon, temperature high the uks havent what is the best moments in recent decades. As we head into the final days of the open, it is looking like it is almost perfect weather. One caveat in this chart shows averages for the whole of britain. If you look at stockport, it is currently overcast and a chance of rain. Nejra [laughter] emma, you brought good news. Vonnie, your chart was a little miserable. The winner is vonnie. Yeare breaking news per sean spicer has resigned. It is confirmed. Breaking news, sean spicer has resigned. This is according to the New York Times. This is bloomberg. Jonathan from new york city, this is jonathan ferro. This is bloomberg real yield. Coming up, president draghi his words fall on deaf ears elsewhere. To ion trade juggles struggles to fly find buyers, and counting down to the feds decision. We begin with a big issue, a dovish draghi