This and the backlash of trumps handling of charlottesville, the riots. Is americas first ceo president losing . Government saying it wants an interim Customs Union with the eu for a period after it leaves the union. This has pivotal u. K. Inflation data hits later this morning. Matt less than an hour from the cash open. Lets look at where futures stand this morning after a rally in the u. S. Carried through to asia. We are seeing at least three nara green euros here. Those substantial moves, little change of the euro stoxx 50 and ftse 100. Little stronger gains for futures on the backs and cap futures. Take a look at bones, bunds, a threeday chart shows that the yield on the trade this morning really jumped up and is now coming down a little. , looks like a risk off day, or at least investors dont need to hide in the safety of government debt. Gmm,lets talk about the really fascinating stories this morning. Areas we dont normally talk about. Argentinas market hit a record high yesterday on the fact that mr. Macri did better in the weekend primaries than anticipated and markets absolutely loved back. Higher, up around 4 . The argentinian peso and what has happened with that story on the back end of the european session paying attention to. But im going to do is watch the game, down by. 7 . Something. Here, doesnt quite get hydrated, the s p. S p yesterday had its first 1 up move since april. As you how compressed this market has been. The lack of volatility. S p come all the way down here. But that is a huge move. Something to be ignored. This morning, what are we paying attention to . Steel continues to fall over here. Argentinian falling. Macro doing a little macri doing little better than anticipated. As juliette saly. Trump has called white supremacist for their role in the deadly violence over the weekend in charlottesville, virginia. The comments came as the white house sock to counter backlash against trumps initial failure to hold hate groups accountable directly. And those whovil cause violence in its name are criminals and thugs, including kkk, neonazis, white supremacist and other hate groups that are repugnant to everything we hold dear as americans. Juliette intels Brian Krzanich has become the third ceo to quit the council of his this Leaders Within 24 hours. That is as membership of the panel has become enmeshed in the volatile political fallout of the week confinement right in virginia weekend while riots in virginia. Kenneth frazier stepped down and under armours ceo. President trump has asked his top trade official to consider investigating how china handles intellectual property, especially the practice of forcing American Companies to transfer technological knowhow. Commerceministry of responded by saying any protectionist move would damage economic relations and hurt the business interests of companies in both countries. An extended growth spurt in the Second Quarter as gdp growth rose in april to june period. That is below the. 7 estimate, that will still be welcome news to Angela Merkel has she bids for a fourth term as chancellor. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Defense secretary james mattis ones it would be game if north korea fires missiles that hit the u. S. Or its territories, including the Pacific Island of guam. Happen,out what would mattis cautioned against portraying his world as a virtual declaration of war. This comes as the general reassured south korea a diplomatic solution was a priority for trump and kim jongun discussed funds for guam with his Commanding Officers mondayan inspection on as reported by staterun korean central news agencys. Joining us from hong kong to discuss this further is bloombergs jodie snyder how seriously should we take secretary mattis is remarks . Because it seems like markets are replaced shrugging this off and rallying on the idea that those threats have been lessened to some degree. Jodi thats right. There does seem to be dismissed off today this risk but the comments in last 24 hours by the defense secretary and north korea seem to be just referring reaffirming things said earlier about reprisals if there was military action taken against them and the u. S. Obviously looking at guam and the threat north korea had made today we have seen south korean president moon make some very specific comments about his desire to avoid war at any cost and take back control of this conversation for south korea, saying that south korea will defend itself and will decide what it does. Almost as a rebuke to some of the comments made by the trump administration, being very clear he does not want to go when he reports for and he wants to try and still seek a diplomatic solution. Guy we need to talk about japan, but let me ask you, the north korean comments relating to the fact that they are watching what the United States does next, is that a deliberate deescalation or simply rest recognition they are not ready yet to do anything else . Probably more of a recognition at this point. I think they realize the time hurt them will hurt them wont hurt them and there is nothing to be gained after affirming they could and will take action if the u. S. Doesnt back down the. There is only anything to be gained at this point for kim and the regime to kindly escalated. At this point, it is a pause button, if you will. Matt does the market expect anything to happen later on this week . Donald trump is fairly incalculable, so is kim jongun, what are you hearing from Market Participants . Jodi what we are seeing today is risk off, they are taking the breather. Obviously both mr. Kim and mr. Are impetuous and we dont know what they will do, but it seems the market has figured that whatever immediate threat has passed, at least for now. Japan and the u. S. Have some military drills coming up so that is an interesting time in thet, and today, is anniversary celebrated in both north korea and south korea of the end of the Japanese Occupation of the korean peninsula. The timing is interesting but appears to not have provoked anything. It looks like everyone is taking a calming down, even though the rhetoric continues to be pretty heightened. Matt all right, thanks very much for your time this point. Bloombergs Jodi Schneider reporting for us on the relief of the markets behind crawlies that are global today. Are global ift you are a bloomberg customer, you can watch tv or the show using tv on your terminal. There are three panels on the tv function when you pull it up. You can seen interactive television, watch guy and myself or later on when we moved to radio, you can click the middle panel and any event coverage, for example the president holds a speech, you can click on event coverage and see that. Guy lets talk about what is coming up. Deputy Prime Minister gets caught up in confusion. We take you to sydney for the latest on that story. Us is bloomberg. Taylor welcome back. Matt im matt miller alongside guy johnson. Untile about 16 minutes the start of cash trading in europe. Lets go to hong kong for the business flash card for that, juliette saly. A stake in french yogurt maker danone, because it views the company is undervalued. In activist fund owns shares danone worth about 400 million. Stock rose on the news. Representatives declined to comment. The cofounder and chief Strategy Officer of airbnb has spoken to bloomberg about the companys reaction to the deadly riots in charlottesville. Banned whiteirbnb supremacist. When we became aware there it be a gathering at bnp airbnb by white supremacist, we took action to cancel those reservations and ban those users from the platform. We felt that was incompatible with our values and took a strong stance. Juliette a chinese businessman has taken control of English Premier Football Club southampton. The chairman of landis sports that he had agreed to take an 80 stake in the club. His daughter will also become a partner alongside existing swiss owner. Spacex has launched a rocket to the International Space station with a cargo of Scientific Research and ice cream. Takeoff was followed by the successful landing back at cape canaveral. Using the unmanned dragon capsule and is due to reach its destination tomorrow. That is your Bloomberg Business flash. Very much. You talking of rockets, lets get back to the markets. Asian equities extended gains, the yen under a bit of a share. This is the prospect of war between the u. S. And north korea seems to have receded for now. Had a 1 up. P lets get the latest from mark cudmore from our and wife team in singapore. Mliv team in singapore. A recalibration of the risk story surrounding north korea or is there more to this rally we saw yesterday . I have been reexamining my thesis this morning, i turned bearish last week and this rally would be expected. Risk aversion, i do think this rally has gone on farther than i expect. A little punchier than i thought it would be. The stocks were largest in nearly four months yesterday. However, were still in the middle of risk aversion, all the better factors are still there. Volatility is still picking up, even though the vix fell, the average moving higher than in three months and is set to climb for the rest of this week and that sustained move up as more important. Credit market showed fairly any improvement yesterday relative to the selloff of the past weekend that is where the court of the pain is. Were seeing the ball or dollar start to base. Plus, were seeing u. S. China trade tensions there are a lot of negative factors there that means most like a, bears still have the dominant hand for the rest of the week. Matt i wonder what you think about the vix over the next couple of days. Im sure you have seen this chart or some variation. It shows that historically rapid rises in the vix followed by pretty big drops as well. Basically about half of the gain is lost within the next month. Do you feel like that is going to happen here, as well . Will we get more complacent through the rest of the month of august . Mark diversity issues to look at. How would you play the vix and the role down. Theres a lot of carry structures that play the curbs and the vix kind of us with the vixtion versus a pure spot measured. I wouldnt be surprised if we get higher prices next month, but more important for broader markets is were seeing the moving average of the last 10 days, the overall period of volatility started to rise and that will reduce in exposure. That will force investors to reduce exposures. The bigger thing here is that vix average level is taking up and that is more important than what is happening. Live in fed is still december. I think the work function puts the probability of a hike at that point at around 33 . Who is wrong, the fed or the markets . I dont want to be conclusive about who is wrong, but i have sympathy with the markets suspicion of the fed hawkishness. Aar in mind, this has been team for a few years when the fed has guided for more hikes been delivered. This year, they have an a lot better at getting around to do hiking, but overall, it has been the market that has been right. I would emphasize this is one of the problems for markets at the moment, these hawkish markets from dudley came in the wake of a disappointing inflation report. They keep disappointing, which means we are getting this real yield tightening. The worst time for yields to rise when it inflation is going lower. The worst kind of real yield rise. Guy interesting that Research Done by the San Francisco fed about where arrow is in the states, were well below that. Interesting to see if the fed is sticking to that historical textbook kind of stuff. The q very much, mark joining us from our mliv team, smart analysis, mliv on your bloomberg. Lets go from singapore to sydney. Concerns over mounting household by the reserved bank of australia, even as the outlook for the nations economy has improved. That according to the mid minutes of this months meeting. The alert has taken a backseat to a brewing political story in australia. The deputy Prime Minister can be potentially barred from serving in parliament after becoming the latest lawmaker to be caught up in the confusion of dual nationality. We are joined from sydney, he plans to refer this to the high court, but give us a sense of the background here. , how do we end up in this mess and b, what does it mean for government . The background is in australia, you cant have dual citizenship and be elected to parliament. Two weeks ago, two senators born int they have been Foreign Countries and had citizenship from them. They were forced to resign. Not that long ago, a government minister in the upper house, also found out his mother had applied for him to have citizenship and they worked sir of the situation so that has been referred to the higher court. Now the deputy Prime Minister has found out that he is potentially likely a new the sealant is human citizenship because his fathers been new zealand and he automatically inherited that citizenship. It is sort of unfair on these people because it is not like any of them deliberately knew they had this, but the constitutions the constitution. The problem is is the government has a one seat majority in the lower house. That is where governments are formed basically. Barnaby, it lost becomes a minority government. That, let me just finish that the opposition is already saying that if easy a dual citizen, he should be voting now. They are questioning the legitimacy of bills that have gone through. It could get messy. Matt why cant these people just announce their citizenship denounced their citizenship . He has done it, he announced today he had renounced his citizenship but at the time of the election, he was a dual citizen. Bielecd have to have a tion as a australian citizen. We are all waiting to see how the high court defines it even these people didnt intend to do any of this. Guy who would have thought . Michael heath joining us out of sydney on this latest story which is genuinely fascinating when you yet into the minutia and granularity of it. The market is incredibly long aussie dollar at the moment. Up next, we will look at some in focus. Rs, danone activist investors building a stake in the sealver maker. I am stunned this read pagenaud gilbert jokes. The open is seven minutes away. This is bloomberg. Minutes until european stocks start trading. Danone want to watch out for. Called higher after news that it may be targeted by corvex management, the yogurt maker is significantly undervalued. See a series of these events in this space and danone just the latest. European markets called up about. 3 . This is bloomberg. Track your pack. Set a curfew, or two. Make dinnertime device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. Introducing xfinity xfi. Amazing speed, coverage and control. Change the way you wifi. Xfinity. The future of awesome. Guy welcome back. Minutes until cash opens in europe. Looks like positive momentum in stocks continues. S p had its first up 1 move since april. This morning, we continued the trend. The stoxx 50 called up by about. 3 . , it lookse on danone like it could shoot higher. Here that i a chart am going to be talking about the next couple of hours, maybe the next couple of days. This is a chart of the euro pound and one more of the worlds biggest banks calling for parity. Morgan stanley saying it sees 2 in poundsing to 10 by march. It is joining hps hsbc which sees a oneforone trade by the end of the year. This was a risky call to make but is becoming more mainstream so i will be asking a lot of our guests about this chart in the next couple of days. Bloom, the character involved in a story. Ftse 100, up. 1 . Lets see how markets start the day. We are accepting expecting. 4 out of some of these. Cac how a little bit. Interesting to see how danone performs. Dax trading up as well. Carrying on the rally we have spent seeing than seeing. Gain in thebig grand scheme. Lets see how it breaks up in industry groups. Onn you look at the imap bloomberg of the stoxx 600, many more reps are gaining than losing. Materials and energy are the only two lynches so far losers so far. Consumer staples and i. T. Leading the pack as far as the gainers, but eight out of 10 are gaining and two out of 10 are falling right now. Lets look at the move screen and see what is going on. Standard Life Aberdeen up by 2. 95, two companies that have come together recently. Is up, we thought it would be. We thought it would be 3 higher, that is what we are seeing this morning. The french yogurt maker trading up on activist interest. Be a Systems Trading to the upside, when you have a stock valued at the kinds of levels you can see here, that is the valuation, the individual share price of sp 1. 82 move, not to be sniffed at. Matt interesting individual stories in this interesting market story. Lets talk about politics. President trump has taken the st steps towards shared not just by American Companies, a complaint we often hear from other chambers of commerce, european chambers of commerce, Inbound Investment in china isnt on a level playing field. When you going to china, you have to share with a joint venture, to knowledge he and that leads to all kinds of charges around intellectual property theft and copyright issues and piracy and other forms and breaches of trade and trading knowhow. Companies are losing as much as 225 billion a year, from all of this. China rejects these claims but it is a common complaint we hear from the American Companies and others that the investment field is not a level one. Guy do i need to draw lines between this issue and what is happening with north korea . What is chinas position on all of this . Do we get titfortat and how does that feed into the trade story and how does that feed into the geopolitical story . All part of the one mix, whether it should be are not, and President Trump has made clear he wants to do transactional diplomacy. The ministers in asian made clear they wont tolerate any kind of protection from the u. S. , they said they want trading relations between the two and would take all actions to protect their own right. It gives an indication of the states being high. You asked donald trump tariffs and chinese good, they would retaliate and i would impact trade and both economies. That is were north korea comes in. There is a. There is a theory that if north korea was to reach a diplomatic solution, talk trump might take the focus off china and even reward them. For now, this is his big stick. He needs china to respond to north korea and is threatening on the traits i didnt so and that seems to be the strategy he is pursuing. Guy thank you so much. On set, the chief Investment Officer at saxo bank. Of the emerging markets right now and the emerging markets story. When you look at what is happening, north korea, the trade story, are we reaching a pivot point . Hashe north korea story reached a point of no return in the sense that the capabilities of north korea to reach the u. S. Is changing the dynamics of the response needed from the u. S. That is really what is very clear to me. When you look at strategies involved, this is what is going on. People are basically saying that the north korean game keeps playing the irrational player and by being irrational, they become unpredictable. The worst thing they could do is become predictable as they did overnight by saying we will wait and see with guam, but the ball is basically with the u. S. They need to be seen as doing something because these sanctions are half measures. They wont change anything. Slowly turning up the fire isnt going to work for them. The market is celebrating that tension has eased, but the inevitable conclusion is the u. S. Will have to do something here and putting that in the context of china is very important and it seems to me that china and the u. S. Is opening up a wider gap between them in terms of resolving this together. They both will try to find an end a solution individually. Think about the rock consequences here. All of the technology, one of the u. S. Have, most of these companies cannot act in china and with this kind of tension happening, they will have less ability to navigate the chinese market. If you are saying the u. S. Has to do something about it, but china is looking less and less like it is going to be badte, that seems to news over the medium to longterm for the market and for global peace. I dont wante and to be the bearer of bad news, but i think we have been in this situation historically before. Maybe not the best analogy, but i will remember when chamberlain came back from munich in 1938, and he said to chamberlain, you have the choice is between dishonor and board. You were dishonored and you will get war. That is kind of the situation. When you negotiate with the counterpart which is irrational and wont sway or change, you end up in a situation where you have to put action behind the words. If you put that into the context of what is going on in u. S. Politics, he is losing people left right and center. He is changing communication policies, the generals are the only people in the administration right now that have the ears of mr. Trump and from a military standpoint, it is unacceptable that north korea can now attack the u. S. So yes, there will be another three months with back channels and whatever, but the odds of seeing some sort of increase in tension here is very large. Guy yet the dollar looks like it has turned. The dollar looks like it is bottoming out at this point, like it will rally. Steen technically did. As one who has been short dollar all year, i am nervous about the whole thing. Guy would you belong dollar now . Steen no, because we are one escalation from dollaryen breaking and you have another downside. Behind this, the economics is the data out of the u. S. Is pointing every single day. Inflation is not going anywhere despite the fact that yesterday, inflation will be back, i dont know which world these central bankers living, but technology, demographics, the uncertainty embedded in the market, all of this indicates lower inflation, not hire. All this talk about the curve is misplaced. When i talk to Business Leaders around the world, they tell me one thing for sure, were not going to increase fixed cost. I dont really think the phillips curve is relevant anymore. We have Central Banks pursuing this religiously as a way of predicting Federal Reserve rates. Danone jakobsen of saxo bank. Matt i want to remind viewers you can watch it on the bloomberg. Use tv on the bloomberg and you can follow along to not only the program, but all of our charts and functions. Everything you see her on the right side of the screen as well as the blue link in the bottom. You can click at, sending a question. If you have a question for world if you know which the central bankers are living in, maybe should us the answer. Become the blue link at the bottom of tv. Coming up, a boost for Angela Merkel as the German Economy extends its growth for gdp rose in the fourth quarter, helping the campaign as she bids for a fourth term in office. We will discuss that next. This is bloomberg. Guy welcome back, you are watching the european open. Quick look at where the markets said. The positive tone continues, the dax strongly performing today but the cac not looking too bad either. 64,don underperforming 73. The stoxx 600 up by. 4 . Lets talk about the German Economy. Focused on deutschland. It has extended its growth spurt in the Second Quarter, boosting Angela Merkels hopes as she seeks a fourth term. Gross domestic product rose by 0. 6 in the april to june period. Stay with us, the cio at saxo bank. A couple ofe had disappointing numbers, but most economists tried to look past these. We are going strong, how does it look to you right now . Steen i like the european story widely. I also like the rest of euro more than germany because to some extent, germany is losing its competitive edge, the agent bought itself by doing the euro initially. What we see right now is a europe, including europe germany, where production is being reshored back to germany, scandinavia, france, based on robotics. Europe will continue to outperform and it isnt unlikely europe will do better growth rates than the u. S. For the next 12 to 24 months, this is always led by the very strong export engine you see out of germany. But clearly, if you look at the auto sector, i would be slightly concerned. A massive shift towards electrification going on in the world led by a Smaller Player like volvo, but this is where the response comes. Germany will sail through, i am slightly concerned about the ofe a digest informed me polling better, but that will give her more votes because germany is not ready for that. Lets talk a little about germany. I know you are focused elsewhere, but i am curious to explore why. A nice chart looking at valuations. The euro is having a bigger it on the german story is a big trading nation but we are now getting back to blended pricetobook ratio we havent seen for some time or since the beginning of the year. Does that mean germany looks cheap, the dax looks cheap compared to other stocks, considering the comments about what could happen in short term in the dollar . Yes, to some extent because the u. S. Is such a significant market share for german corporations. The translation comes to that. But the fact is that car sales were really hurting germany and are down. If you look at used car sales in the u. S. , global car sales in the china, the u. K. And u. S. In terms of number, they are all simmering ad loa at low levels. Translation risk in terms of Foreign Exchange improvement. We are in the midst of seeing the rest of europe becoming more competitive relative to germany because in unit labor cost part of the equation is actually working in favor of countries that are competing with germany. In the past, we all had to live machine,erman export now we can compete in some areas. Not cars, but other areas. Germany will still to will and it is good story because germanys massive currentaccount in absolute that comes down slowly without hurting germany and its growth rate, which it can feasibly happen, the rest of europe will be more balanced and you will have the income macron suggested of europewide budget. The euro, thanks to the brexit is in the best position to negotiate and be supported by the economy. Matt i wonder what you think about the carmakers as a group. Do you sell this group, are you concerned . As we get into the campaign, it seems like the war of words a competition about who can be harder on the carmakers could build up between merkel and schulz. Is that going to hurt bmw, volkswagen and daimler . Steen i think the fragmentation we have seen in other industries, there will be winners and losers. The winners will be the ones that can change around the Business Model from gasoline driven cars towards electricity. Of is no doubt the governors germany, france, well all demand car producers have a different production set than they have today towards electrification. Whether that is right or wrong or economic or not, this is the political world. The short answer, yes. The long answer, some of these partners will be winners and some losers. The adaptability towards a new Business Model where everybody wants to lease and not on, think about how inefficiently used cars. Our cars are idle 90 of the time. Around the cities, you have cars you could just rent. Theres no reason to own a car if you are rational. Fortunately for the car industry, we are all irrational and want our own car. Guy it is strange carried dubai the car or divide the journey . Do you buy the car or two you buy the journey . Steen i am pretty sure that all in denmark, they cannot sell anything, but they can lease and rent everything they want to young people today. Guy plenty more still to come from steen jakobsen. We have just seen the cable rate touch a session low. The u. K. Unveiling a transition phase when it comes to the Customs Union. We will get a take on that and figure out where we set this morning. David davies doing around the interviews. Doing a round of interviews. This is bloomberg. Let me give you two contradictory things happening right now. Low andt a session david davis, the u. K. Brexit secretary has said negotiations are going incredibly well. Quote, incredibly well. Steen . Steen it seems like it. It should is where be. It is all rhetoric and they are positioning and trying to do it. I think everyone today expects a for with the u. K. Pays access, but clearly, the problem right now for you must be that for eu must be the u. K. Doesnt have a strong view of what it is trying to achieve. Jordan rochester put the point well a note, basically do u. K. Is negotiating with itself. Not with the eu. David davis ishy saying brexit negotiations are going well. His relationship with philip hammond, i joke. Steen no, i think it is true. It is very confusing what the u. K. Is trying to achieve and what game plan they have. To me it seems like they dont have one. Respect, it could be going well in redefining with the u. K. Months and sterling to be going down because we dont as a clear indication of what is trying to be achieved. It is Pretty Simple what you want, why not state it . The deal camera is given before the referendum. For circle, waste of time and we will be there. I was showing a chart earlier, i will pull it up again. 2931 on the bloomberg. Euro pound. More big names are coming out and saying they believe parity is going to happen. Morgan stanley now says 102 march, hsbc says by year end. Is that good for the u. K. Economy . Steen tonight you are trying to get a small link to confirm it, as well . Matt one of our favorite names. Steen i think the opposite. Since the last ecb meeting, we are seeing financial conditions tighten by 40 basis points. Combined with what we just talked about with risk, i think draghi is almost forced to do one of his classic one step forward, two steps back. I expect draghi to be pretty dovish on the euro and say to much too quick and we move up too far, i dont see the euro side of the sterling doing it. Was going torling trade to parity, wouldnt it be right after the brexit referendum and turmoil . Cable has been one 30 plus or minus the past two months. I dont see any major move in there. You could argue disposable income is being heard, but look around the world. Itis exactly the same and goes to this inequality story we abouteeing popping up disposable income for major income earners and low income earners is purely flat in our world that still has a small amount of inflation. Guy draghi has an issue now. Just to reference back, you brushed on that story. European financial conditions, you can find this on your bloomberg. They have come down 40 basis points. That for europe. Geeking draghi uses jackson hole to talk currency down. Is an jackson hole academic meeting. I dont think it is jackson hole at large, he is going to celebrate his own success, but nearly he must be concerned about the speed of which the euro is now rising into the market. Especially because it is deteriorating the overall impact on earnings and underlying growth. The fact is, if you look at the recent chart and data, which is highly correlated to growth in europe, it has been dismal. It has been coming up quite significant. Industrial production, retail sales coming up. I think the external impulse is going down, he is concerned, yes. Guy plenty more to come. This is bloomberg. Career. Calmer stocks rally as p on yang steps back from its aggressive rhetoric. Quit the ceo to president S Business Council the backlash of Donald Trumps handling of the charlottesville violence. Plus, customizing brexit. The u. K. Government says it wants and interim customs an interim Customs Union. Does it matter if europe does not care . Welcome to Bloomberg Markets the european open. I am matt miller. Let us talk about how we are shaping up 30 minutes into the trading day. A solid session yesterday. The s p, up 1 since april. We faded earlier in the rally but not by much. The ftse is underperforming and softer dragging the ftse a little lower. Relative to its peer group. Up 0. 3 . 600, is one fact that wall street will be thinking about this morning is what is happening in washington. President trump has lost the support of three ceos. Including under armour and intel. All three have stepped down from the white house business group. Mentionedovertly fraser let us bring in bloombergs Global Business executive. , why have these gentlemen made the decision . Beingms of the pressures applied to them and them thinking about how their businesses interact with social media and interact with their customers. Walk me through the decisionmaking process. Ken frazier, one of the few prominent ceos was the first to stick out his neck and say i am out. In retaliation to the lack of response of the weekend violence. The others are interesting. Some ofrs ceo the protesters were spotted in under armour apparel and that started a social media frenzy. Then, he said he was out. And again, intel ceo was paroled by ceo by social was trolled by social media. You cannot underestimate the impact of social media in this whole reaction mix. Matt is there anyone else that is getting pressured on social media . I cannot believe it took kevin plank that long. His own athletes including steph curry was questioning that move as well. The year, heer in came under pressure for saying that donald trump was probusiness. Or why did it take them so long . You could ask the same of the others. They are reacting to social pressures. It will be interesting to see the barrage of tweeting and trolling from their consumers and customers in the next few days. At the end of the day, it is about reputation and business matters. They will be reacting to their own constituencies. As well as a fact that they have to show their own moral reaction to the weekend events. Guy where does this leave the interface between the white corporations of america . Level when you have this of response from ceos first it was climate change, then it was immigration. Now, it is racist protests. Diminishing returns. It does not look great. Some are questioning the value of these councils. Do you have a voice if you cannot have a voice . Things are in balance with the of thesee and weight councils and their real value. Guy thank you very much indeed. Jackie simmons joining us on the walkouts we have seen in the president S Business Council. How will this feature in the investment landscape . Steen i think it is increasingly hard to see donald trump is a businessman. The companiesom that want to disassociate themselves from donald trump is increasing. He understands this is negative. He is also moving away from those that were traditionally his base. I think the political could be out in the next couple of weeks. And i think he has to readjust his own strategy. I think he started by appointing jim kelly as chief of staff. I think you see a different tone coming from the president. Whether that will be good or bad, i think he is at least will tone it down. He is calculating the cost. As business, it is another example on how rudderless the whole strategy is for the administration. I think it is less likely to get a strong tax plan and an increase in red tape. Does that weigh on the u. S. Dollar . Congress and this administration has been unable to pass any major legislation plus, donald trump comes close to waging nuclear war with a madman in north korea and now, it takes him 48 hours to realize that aree supremacists and nazis a bad thing for the u. S. Is that good for stocks . They can sell their goods cheaper overseas . Steen the last part i do not think that clearly, the reason we have seen a week dollar is partly because of trumps indecisiveness and everything he stands for is a devaluation of by giving the competitive edge. Rates, thehiding dollar sells off as well. The dollar technically is oversold right now. To some extent, you could see a stronger dollar, what not based on this story. But based on the fact that we are at 80 the are at a very low territory. Guy if steve bannon goes, he is the strategist. They do have a close relationship. A foxhole mentality. Depart, where with the leadership come from . Steen the generals. Guy these are military generals. Where does tax go . Infrastructure go . Would kelly had the same view on the highways . Would there be a thought leadership vacuum in the white house . Vacuum so abhors a what will fill it . Steen it is not that they are not intellectuals. But every administration should have a vision. That is what drives the process and then you fill in the gaps. What donald trump has done is clean out what is not working and replace it with practicality and logistics but they have lost the vision. They have a better functioning white house in the short term. Coming,l need a second going into the midterm. They need to redefine the strategy, especially if they get rid of steve ran and. Sources around the white house say that steve bannon has not been around donald trump for a long time. Rumor says he has been behind the leaks. Clearly, we will see another shift. Thethat probably leaves dollar with limited ability to strengthen from here based on the u. S. Situation. Guy great to see you this morning. We are not quite done with you yet. Steen will join us on bloomberg radio. Daybreak coming up on the top of the hour. You can listen to that on the tv function and on london dab digital. Matt germany accelerates. We will talk about gdp and we will look at how much europes largest economy grew in the last quarter and what that means for the upcoming election. Is a good gdp number good for all the voters . We will talk about that next. This is bloomberg. 9 43 a. M. In berlin. Let us get a bloomberg first word update. Donald trump has called out White Supremacists for their role in the deadly violence in charlottesville, virginia. The white house is countering the backlash against donald trump for not holding the protesters accountable. Racism is evil. Intels ceo has become the third ceo to quit the council of Business Leaders. Membership in the panel has become enmeshed in the political fallout. Donald trump has asked his top trade officials to investigate how china handles intellectual property, especially the practice of forcing American Companies to give up their knowhow. Any protectionist move would damage the relationship and hurt the business interests of the companies in both countries. Global news 24 hours a day powered by our 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you very much. Extended itsonomy growth spurt in the Second Quarter which could play in the hands of Angela Merkel as she bids for a fourth term as german chancellor. Isning us now to discuss carson, the chief economist. Thank you for your time. The reason we say this could be this could play in her hands is the old adage is the economy stupid. If the people are doing better, they will vote for the status quo. Does this increase in gdp play through to the voters . Are they doing better . They are. Wages are increasing. The broader public is clearly benefiting and this is why it is playing into Angela Merkels hands. The Junior Coalition partner is also responsible for the economic reform. The voters see Angela Merkel as the mother of this current economic strength. Matt yesterday, i was speaking with a friend of mine in berlin that owns a small motorcycle business. They are not having a great summer. Y talk about seeing more income inequality in berlin. Than they have in the past. Couple that with the rise in immigration and Angela Merkel leading in the refugees. There should be a momentum for a populist wave here. That is true. The potential is there. Issueis an inequality playing out. There has been an influx in immigration. And there has been inequality in wealth but somehow, Angela Merkel and the strong growth is paralyzing everything. If you look at the populist even they have so many inhouse problems, they are imploding and they are unable to get any more votes. Guy let us talk about who will be the Coalition Partner next time. As you say, afd, 10 . Greenserals, 9 and the 7 . How does Angela Merkel form the next coalition . And what kind of role does the Junior Coalition partner play . Do willerkel will manage. And the race will be the most exciting. Meansut the afd which merkel will be left with the liberals, the greens, or, if she does not have enough for a majority, she will have to go for the grand coalition. The Junior Coalition partner will matter. Not so much for the domestic economy. But the june the Junior Coalition partner will matter for the future of the eurozone. The range is why in terms of the liberal parties saying no bailout should be allowed. That is one side of the spectrum. The other side would be the social democrats who are clearly in favor of a eurozone finance minister and eurozone solidarity. Guy would you sell greek debt . If the numbers of the liberals start rising . I would not. I would still trust merkel. And i believe that greece will remain in the eurozone. Some kind of debt relief is in the cards. Out one wayill come or the other, it be kicked out at some of the liberal parties have advocated, i do not see that happening. Angela merkelas wins, no matter what the coalition looks like, does show scheuble stay in government . That is a tricky question, but i think he will. The uksing up, as seeks to smooth the brexit, we will focus on the move by the u. K. Government to remain in the Customs Union after 2019. This is bloomberg. The u. K. Government has said it wants to maintain tariff trade withcracy like the European Union for a time after brexit and perhaps permanently. Britain is fleshing out its ambitions. Its ambitious. Ambitions. Anit possible to have such arrangement . It is possible although there is a big change coming from the british government. The question will be whether the European Parliament will agree. But it is possible and needed because the idea of brexit, means we will get a harsh and in 2019. To get a transitional agreement clearly make sense. Matt how key is it for the eu . You can see why the u. K. Would want a transitional deal. For the eu as well to keep the u. K. A viable trading partner . Key for the eu to have more of a gradual transition. The interests of the u. K. And the second interest would be for the eu. But having a smooth exit would be helpful. Us talk about mario draghi and what he will say at jackson hole. What do you expect from the ecb president . I expect him to prepare tapering. To say that the economy is doing much better than expected. That he will shift away from inflation. He will focus on the economy. And he will say that a stronger economy could do without less monetary accommodation. I think that will be there line to watch for and it will be repeated in september. Matt inflation has been a problem for Central Banks around the world. We just heard from dudley yesterday do not worry, it will come back. Frome have been hearing central bank for a long time. Does the ecb have any chance of achieving its inflation goals . Central bankers could never admit that they failed in achieving their goals. That would be the first point. And there are global factors, globalization. Lower wage costs. Putting downward pressure on prices. In europe, we have aging which is also putting downward pressure on cost. The ecb is finding structural changes. They know they do not have a big chance to reach the 2 level again. But, they can create growth and with growth we will gradually move towards the 2 . Are it is clear that they doing that here in germany, at least looking at their gdp numbers. Economicu judge the situation in france, especially in light of what macron has been doing in the first few months . The first waking up after the fantastic macron paradise. He is implementing reforms. The german lessons from 10 years ago shows us that implementing Structural Reforms will always come with a slowdown of economic growth, initially. It will take a couple of years before the French Economy can take off again. But the French Economy has been much more resistant and solid in the last few years than the stories we heard about it would make us believe. Matt there is some internal concern about his popularity in france. Last week. I wonder if you think he still has the momentum to carry through the european restructuring that everyone expects from him and merkel . I think he does. Aswas voted in and came in the savior. It is normal to get some disappointment in the first month after. I still think he has the momentum to implement the reforms. He has a Strong Majority in parliament. He has the goodwill of the german government. Once he delivers reforms in france, he could continue with implementing more reforms in the eurozone in europe. Matt thank you very much. Arsten, thank you for joining us to talk all things your. Up next, it is bloomberg surveillance. That quitsst letter the white house counsel. It creep closer to 2 mark . And negative thinking as the growth of a looming recession. Is bloomberg this surveillance. A pretty packed day