For wyoming, yellen and groggy take the podium. Kaplanson hole, robert defense inflation target saying it will be met. President trump will kick off the texaso overhaul next week. But how much can be achieved between a white house and congress . Hurricane harvey since gasoline surging as it heads to texas. Said to be the worst storm in more than a decade. We are less than half an hour away from the open of cash trading. I wonder how much it will move today at the open. Futures show almost no direction whatever. The euro stocks 50 almost unchanged. The ftse and backs unchanged and the backs dax unchanged. Could see a little rise at the open, but a very small one. A littlet bunds, moving yield today. Right now, up to 0. 382. Let me show you the threeday look. We have come down from 0. 4. If you look over the course of a month, we have come down from a little over. 5 . Bund yields continue to compress smaller and smaller, very interesting, as people seem to buy german debt. Manus will they run for the hills . In terms of rhetoric, as we go to wyoming. Full coverage from jackson hole throughout the day. Lets just check in with gmm. By 1. 47 . Ocks by a fairly flat view of the worlds currency. Will the job on really impact, will groggy try to job on the euro down . Jawbone they to euro down . With going up. L, all on the back of Hurricane Harvey, that is the momentum in the energy market. Gasoline up by 4 , oil trimming losses. That is the differential between a barrel of oil and the synthetic barrel of heating. The latest onoul our top headline in terms of samsung. Jay y. Lee sentenced to five years in prison, Rosalind Chin has been outside the courthouse following the very latest news lines as they come down. Rosalind, good morning. It looks like five years in prison on graft charges. His father was in this courthouse in 2008something of a Family History here. Not just Family History, many leaders have found themselves in front of the judge on different misdemeanors over the years. The key question is, he has been of the 12 years prosecutors looked for, he has been sentenced to five years in prison. He cant get a suspended sentence because three years or less is what modifies to get a suspended sentence. He does have to serve some jail time but most likely, his lawyers will appeal this verdict. He has been found guilty of embezzlement, perjury and bribery. R other samsung in executives in that court have been found guilty. Two got four years and others were suspended sentences. The court found him guilty of currying favor, giving money bribes in order to consolidate power in samsung. What they did find is that it wasnt so much to do with the money given to the foundation that was controlled by this close confidant of the president , it was was a tacit request for favors with regard for support for equestrian sports. This is a question of inexpensive horse given to the daughter of his confidant of the expresident who has come up again in this court his. Jay y. Lee looking at five years behind bars. We will see what else the court has to say about this decision situation. What effect is it expected to have on the stock on the company . What are the wider implications of this trial . Well, there is some reaction revenue. The markets just closing, so we may see more reaction on monday. If you look more broadly at five years isole, what the prosecutors looking for, but there is a message here that there is going to be an enforcement, and underlying change that the new president has been campaigning for. He campaigned on the promise he would loosen up these cozy ties theeen the cables and president. This could be the first reinforcement of his aim to do so. He has put in place key figures proreform, the head of the fed trade commission, he has been dubbed as the sniper for decades on activism to reform. Now, he will be watching the chattels as head of the commission to make sure they dont do anything out of line. The way inxample of which this new administration is trying to show they mean change, but what does it mean for jay y. Lee, well, as we mentioned, his father was in the courtroom. His father was convicted twice, and parted twice. That does tend to be a pardoned twice. Will this happen to jay y. Lee . Many critics of the system want to see go that go away. Being prosecuted and being convict, you should do time to send a message. Well have to see. Matt got it. Rosalind chin reporting to us live on jay y. Lees sentencing. Two fed officials offered opposing views on inflation debate. Esther george said another rate hike is feasible this year if u. S. Data holds up. Robert cap calls it a called for patience. Robert i havent lost faith it will get back to its 2 target. But you have to understand the historic cyclical forces and the models that would have suggested what the cyclical forces, the impact they should have. They are being offset by new forces, which you can understand mainly by looking at Interesting Companies and talking to ceos. I think those are having a meeting affect muting effect on inflation. Matt janet yellen and mario draghi are due to speak in the Rocky Mountains resort and investors will be scouring comments for clues about the next moves. Jackson hole is kathleen hays, very early in the morning. Thank you for getting up for us. How start is the discord here among fed members on inflation . Kathleen let me start by saying i have not gotten up early, i have just stayed up later. It is an exciting time in jackson hole, the federal symposium draws not just central bankers from across the u. S. , but definitely from around the world. Frequently, the central bankers have taken the opportunity to send a message, or at least clarify their thinking on where they are and where they are going. In Janet Yellens case, what do you think about inflation . We look at what Esther George and Robert Kaplan said, it is not so much opposing views esther is more convinced it is trying to move that robert is saying lets be patient. Though down the road, he thinks inflation will rise. Where will janet yellen come on this in her opening remarks tomorrow morning just hours from now. A speech about financial stability, that doesnt necessarily entail talking about inflation and wages and all of that kind of thing, but if it talks about keeping rates below, too long and creating financial excesses that could create instability, i think people will start seeing not a new angle, but an angle that has not been in the center. The chairman of j. P. Morgan Chase International rates too low to long, you dont think you have inflation . What about asset prices . That is that argument. Alan blinder said he would not raise rates until he sees clear evidence that inflation is rising. Yellen, she janet has the opportunity to speak. Fed chairs often deliver messages were they feel they are at a juncture to clarify. A. B. Janet yellen is not there yet. They will start reducing the Balance Sheet in september, maybe she wants to keep inflation a chance to rise and see what it does by december. We know the majority would like to raise one more time this year. We will see what janet yellen says. If she starts linking financial the fed doeswhat on rates, that would have an impact. Manus that would be the jackson hole bingo. You would get three points, kathleen. You get three points if she mentions potential to move, baubles what am i talking about . Our story with jackson hole bingo. Go get some sleep. Thank you for staying up late in jackson hole. Lets see what it does for markets. Just a couple of lines coming through from samsung. Matt, rosalind and myself are talking about what might happen next. Go to top life go top live go. There is a lawyer for jay y. Lee that may appeal the verdict. He has been handed down a sentence of five years. So request was for 12 years, less than 50 of what they thought was going to come through. His lawyer is going to appeal that. The stock is down, this is the performance on the day. 23. 51, just over 1 . These are the moves you see on saintsaens. We were keen to get you this chart. 9444, matt miller will be happy we got that in as well. Over 1 . Tum of that is the latest on the jay y. Lee verdict. We are live to seoul with more news. This is numbered. Bloomberg. Welcome back to Bloomberg Markets, the european oh. 15 minutes to start of cash trading. Its get the business flash with Juliette Saly. Two Societe Generale bankers have been charged in new york. Theyre accused of ordering subordinates to submit fake u. S. Dollar rates so it would seem the bank was able to borrow at a lower Interest Rates. Socgen did not respond. To g no time responding to its the company said it will begin flashing prices on a broad Cross Section of both groceries on monday. The same day the takeover deal is set to close. The move will inflame a price war in u. S. Groceries. Fighting to unveil a new focus on delivering living room with a box that can stream video. According to people familiar, the data device will be revealed alongside new iphone and apple watch models at an event next month that is also testing an updated version of its tv app which launched last year that can aggregate programming from apps that will offer live streaming. That is your Bloomberg Business flash. We are focused on what is happening out of samsung jay y. Lee sentenced to five years in prison. Let me show you what samsung has done today in terms of its stock is. Down by 1 , the lowest in three weeks. Essentially, not that big a move and what you are seeing investors focus on is more what samsung is doing as a business. It unveiled its new note eight smartphone earlier this year and you can see that samsung, which really controls the majority beenof the overall has outperforming the index this year. Samsung has been trading your record highs. You can also see investors still seem to prefer these bigger companies, even though president moon in south korea is trying to break up these companies. The blue line is the Small Cap Index is listed on the cost be underperforming. A 1 drop in samsung today, probably not much impact at all to the market cap of the company. It has been trading ports these record highs. Investors and analysts, particularly on uber radio, saying they will take this in on theand focus more core company and that is the new smart phone that has come through. Overall markets, you are seeing a general pickup in large cap stocks in china today and a big relic coming through in Energy Players in hong kong. That is lit hang seng index by 1 . Japan closed higher by. 5 . Soul closing higher by. 1 . Having a little impact, but an overall positive session in asia. Matt thank you so much, Juliette Saly in hong kong singapore. Lets cross over to our mliv strategist mark cudmore in singapore. We want to talk about jackson hole here. Good draghi drop a bombshell today . How unlikely is that . Mark you know, markets have been in a funk, and we are all hoping for some excitement out of jackson hole. Unfortunately, we will probably not get anything exciting. It is important to know that he speaks after the European Market closes, suite will be late in the u. S. Afternoon. It wont even be that many people around to react. He probably will mention the currency, but he has to Say Something very strong to get a sustained lower and if he doesnt, you probably see a relief rally because some were expecting verbal intervention. To be awakenng from slumber, i think we will be disappointed. If you look at the risk reversals mark, you look at the one risk reversals. You have to admire fx ladies and gentlemen, they are not bothered about mario draghi, risk reversals on the up. They are not frightened of yellen. I always wonder if you going to battle and are not frightened, a bit of risk. Mark that is true, there is little price across assets. The machine short dated volatility like one week volatility is not really up much above the ones month volatility. Theally, friday you see options bit higher. This is just another friday, no one cares, and you are right, that level of complacency means risk of surprise. A words a move from draghi or yellen, there is a move on this. But i think we can keep of a vague eye on this. Matt we will relax playing our drinking game. Where do you expect markets to react, if there is reaction . It is friday night here. Mark eurodollar is the most important one and it opens on sunday evening. Even if there is delayed reaction, people think about the analysis of the weekend, that is not only where you will see the reaction in the new york session, but in the sunday evening session. Eurodollar is the first focus, but if there is anything controversial, treasuries will be interesting and it might spill over into other assets. In terms of jackson hole bingo, i think there are too many points being added for measures. Youve got to assume yellen will mention financial stability. Manus when was the last time you were at bingo . Mark probably 15 years ago and i was pretty useless. Manus a well, it is a rather irish tradition. It is a pint of guinness and a bingo card. Thank you, arc cudmore with the mliv strategy team. You can follow everything that mliv puts out on bloomberg. We are minutes from the last trading day of the week. We have been in a funk, as mark said. Will it take to shakeup . We will talk about our naivete 2017. Stock is called lower. It is bloomberg. Welcome back to Bloomberg Markets, the european open. Minutes from the start of trading. You are looking outside bloombergs offices. There is the famous brandenburg gate, to which any new government historically would march. To establish its legitimacy. That was back in the day. When back in the day. Currently, we are looking at s stock, opening down 1. 4 . Sees a recorde year, but the growth dynamic to change and we are hearing about , 2 million antitrust fine some issues in the gulf area. Also, Martin Schulz yesterday, challenger to Angela Merkel in the elections had some negative comments to make about golf players around germany. Manus yep, i suppose that is a reality check in regards to what is deliverable. Seconds from the start of the european trading day. At 0. 4 . A nip lower the rest of europe will be slightly better off. We will talk about jackson hole next. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Less than one minute to go before the start of the european trading day. London is down. 6 . U. S. Equity futures are all just a little bit stronger. There are some changes going on. A few different bits and pieces. I love this chart. You can see this. As the fed hikes, financial conditions continue to ease. Those are not regulation colors. Manus they are not. A look at these equity markets. They are not exactly a gray hue. They are desperately trying to find the green. Weight until we hear what mario draghi has got to say. Pace and autos lead the on the upside. Nejra cehic is standing by. Financial markets in really quiet. Eerily quiet. Almost 1. 06 on the gilt. Yields, fairlynd steady. 600talked about the stoxx being up 1 10 of percent. That is what we see on the benchmark overall. This benchmark heading for a tiny weekly gain, unchanged overall on the week. Most of the groups are in the green. Energy stocks outperforming, which is also what we saw in asia. That is on the higher crude prices we have seen. Rebounding on the news of hurricane happy. This chart is showing utilities and financial stocks outperforming the euro stocks index as of the start of this year. A lot of strategists getting more positive on these utilities and financials. They get quite a lot of their , poised toestically outperform with the eurozone accelerating. As we talk about the stronger euro, these Companies Might be more shielded from those headwinds of a stronger euro. I am going to take a quick look at mov. A couple of interesting names on here. You have a company that yesterday got absolutely crushed, it was downgraded by an analyst. Yesterday it was off 7. 5 . Otherwise, not a lot of notable names among the gainers. As far as the losers, that is where i see the fascinating moves. You see the french supermarket operator, a casino here as well. All of these supermarket names look to be getting crushed because of amazons price costs price cuts at whole foods. They said, look, we are going to go to whole foods, known jokingly in the u. S. As whole paycheck, and we are going to be cutting prices. They are bringing their brand. We dont need to make a profit, so we destroy margins in the entire industry to supermarkets. That is affecting the supermarkets being traded in europe. Manus lets talk about our lead story. It is jackson hole. Janet yellen and the ecb president will speak in the Rocky Mountains later today. Investors are going to be scouring these comments, looking for clues about the next moves. Kathleen hays is standing by. Good to see you this morning. Kuroda, draghi, and yelling. And janet yellen. They all have it similar problem. Had a similar problem. Kathleen if you think about coming into jackson hole, we can see around the world, i am going to speak about growth. Persistently weak inflation and the Central Banks have this question of the ventral reduction. How are they going to go about it . We can put governor kuroda to one side. He has made it clear he doesnt want to talk about the exit. Japan is so far from its inflation target. Attending jackson hole every year. Lets take a look at janet yellen. At the beginning of the year, who would have thought the fed chair would have to be thinking twice about raising Interest Rates one more time this year . As inflation started falling away from target, it has put officials on the defensive. People would love to hear when she speaks her latest sense of inflation. Is the weakness transitory or is she giving it more weight and offense that maybe this would slow her down and a sense that maybe this would slow her down . They are going to start their Balance Sheet normalization. They made that clear, probably in september. She is going to speak about financial stability. We dont know what that speech is going to entail, but i spoke to a former head of the kansas city fed. Very focused on bank capital. He thinks its a topic that needs to be addressed. The chairman of jp morgan Chase International says too low to long can cause difficulties. Manus thank you so much. Kathleen hays for us in jackson hole. That is one of the anticipated market events on the calendar. It has been five years offense anything was really deliver that resembles what people would call a policy prescription. Take arg has decided to little bit of fun. This is a bingo card. What do you get for these various phrases if they are mentioned during jackson hole . Risk premium, you get two points. And then there is boring stuff, isnt there . Lets speak with john wynevans. Welcome to the show. Where would you put your stamp on the bingo card in terms of what you think she and he will go for . John i would say the big number will be the financial stability. Toont think they are going at thist about changes particular meeting. That set back to 2010, a strong run in asset markets to the rest through the rest of the year. Mario draghi was pushing on an open door at that point, talking about his using a policy. The euro was already weakening ahead of jackson hole that year. Those are the only two big things that have happened in jackson hole. In 2010, because that happened, people have been focused on it ever sense and waiting for a replay. Im not sure its the exact form forum for policy announcements. Even without mario draghi saying anything, we all see what is happening with the eurodollar strength. How much of a concern is that for the ecb . What are they going to do about it if it continues . It. they acknowledge mention was made of it in the last ecb meeting. Conversely, as you have shown your charts earlier on about the financial conditions easing in the u. S. , slightly tightening in europe because of the stronger want to derailt the recovery early. They have more capacity within your before they run into within europe before they run into wage pressure in germany is not that high at the moment. They still have very open labor markets. Column written by bloomberg, Central Banks keep feeding overpriced markets. You have the Balance Sheet in blue. You have the global aggregate credit can reddit return in yellow. Aggregate credit return in yellow. We are not stopping. Another 300 billion a month being added. Are these Central Banks, they dont want this junket to end with a crash . John nobody wants this to end with a crash. That is clear. Manus we have seen people allowing things to crash before. I am not so sure that necessarily all central bankers understand risk. John if i look at the environment to create a crash, specifically in 2008, it it was the liquidity within the financial system. Companiesquality could no longer access liquidity at that point. That was an enormous lesson that Central Banks learned at that allowing ow to with how to allow banks to go bust. I dont think that will make that mistake again. We still have this financial crisis. Suddenly you have headlines coming out, is there another crash or financial crisis . That is too negative a reaction. At investecynevans is going to stay with us. Is going through this morning, even beyond jackson hole bingo. Up next, President Trump is about to launch his bid for reform. How much tax reform can he really get done . This is bloomberg. Matt welcome back to Bloomberg Markets european open. And what to get a quick check on the markets, 14 minutes into the trading day. We are seeing green arrows across the board. They are all gaining. One of the most interesting moves today is what we see happening in the supermarket sector. British supermarkets are always fascinating to me, but even beyond that, what you see going other larger supermarket chains in global distributors, all getting hit hard as amazon comes out on its first give approval for the whole foods takeover and says it is going to slash prices. This is a company that doesnt necessarily need to make massive profit margins. I have a chart here that shows the margins of amazon going back to 1997. Anything basically above the constant white line you see in this century, which is about. 5 is negative. Amazon a most never makes a very big profit margin, sometimes doesnt make any profit at all. Seem to feel the need to do any better. That is a problem for its competitors. President trump will kick off a campaign to overhaul tax policy next week with a visit to missouri. Trip is expected to be the first of several stops around the country. Trump is not expected to set forth his own plan or other specifics, as is his style. He supports a unified approach with congress instead. Still with us is john wynevans. We see this strategy. He doesnt present his own plan. He doesnt present any kind of details. He prefers a unified approach with congress, but then will criticize it harshly on twitter after the fact. A chance yougood think we really have of getting actual tax reform through in the u. S. . John eventually, probably is the answer, but not in the short term. The biggest mistake he made was going after Health Care Reform first, which is a more contentious issue. If he started with tax reform, he might have gotten an early win on that subject. That was the subject there was a reasonable amount of agreement on. On how hencertainty wants to carry out the tax reforms. He just knows he wants to make some reforms. Corporate taxes are planning to come down. There may be some opportunity to repatriate cash. Then there is the element of his taxation plans, which suggests it is the higher rate taxpayers that would do better, which goes against the grain. The support he had during the election. There are lots of contentious issues. And there is also the money he requires to build the famous mexican wall. That makes it more contentious to get it through congress. It is going to be difficult to do anything soon as far as his wish list is concerned. Obviously, everybody wants to hope that whatever tax reform he does might engender of growth trajectory towards 3 , but we have this ticker. If you look at that, which is the bigger output to get us to 3 . Personal taxes have been rising. Corporate taxes have been dropping. Where is the biggest bang for the u. S. Market book buck . John it has to be in consumption rather than investment. Cash repatriation, tax holiday, or some kind of incentive would be positive. The would be a big oneoff boost. If there were further tax incentives for capital investment, that could be a positive thing. Personalok at that income tax, the white line on the chart we were looking at, it is slightly misleading, because i think it is actually, if you look at the period, that was the recession after the tech bust. Flaty, it has been effectively since the mid1990s. To say it is rising, that is a cyclical factor thans rush rather than structural factor. Next, less than a halfhour into the trading session. We will bring you up to speed on what is moving in midcaps. Underl take a deeper look the hood, including looking at provident financial. This is bloomberg. Nejra cehic has your morning market movers. You are kicking off at provident financials. Nejra we are talking a lot about private financials this week. It is gaining for a third day. Chris gillespie has been appointed managing director of the home credit business. Moreshares are gaining than a percent, as you can see, but they are still down over 60 on the week. It had its biggest loss on record in the stock on tuesday after a profit morning, the ceo stepping down, and a probe. Still down on the week for provident financial, but gaining for a third day at the moment on news of the new head of the home credit business for this subprime wonder. , stada up. De that elliott was increasing its stake in the company. It over, buto take we have some headlines coming through about changes to the supervisory board. A number of people resigning, and those changes are due to the takeover. Up 1. 3 , one of the best performers. African this country keller up 1. 1 . It has rejected allegations of dishonesty. The ceo is being investigated by german prosecutors, linked to possible accounting fraud. The company is saying substantial information is wrong or misleading. Shares up more than 1 . The messageistle is from boris johnson. Meetnfirms that we will our obligations on the brexit bill. The u. K. Foreign secretary speaking on the radio for the bbc. His message was clear, though whistle go whistle. We should pay what we think we legally have to pay, and that the brexit transition could be possibly three years. The crucial thing for business is certainty. Sebastian is standing by with your business flash. Bankers and france have been charged in new york with rigging. They are accused of ordering support its do smit fake u. S. Global rates. U. S. Global rates. Time for wasting no bringing its reputation for undercutting competitors to the grocery business. The company will begin slashing prices on monday, the same date the 13. 7 billion takeover deal is set to close. It will inflame and already raging price war in u. S. Groceries. That is your Bloomberg Business flash. Matt less than a month until germany has to the pulse. We will discuss the election with wolfgang fink. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Matt five years. Receives jay y. Lee receives a conviction. Janet yellen and mario draghi take to the podium at jackson hole. Taxing time. President trump will kick off its plan to overhaul the tax system next week, but how much can be achieved between the white house and congress . Hunkering down for Hurricane Harvey. The storm since gasoline prices surging as it heads to taxes, set to be the worst storm in more than a decade. Welcome to Bloomberg Markets european open pickup i am alongside manus cranny. Manus a very good day to you. European equity markets have just turned over ever so slightly. The stoxx 600 easing out the smallest of gains as we wait for the nuances of liquid over in jackson hole from mario draghi for the nuances of language over in jackson hole from mario draghi. The president of the United States tweeting yesterday a rebuke to the grand old party. You are seeing london hang on to some gains. We will wait to see the outcome on the commodity complex of Hurricane Harvey as it hits land in the United States. Tocks are just beginning prevaricate. Should we talk about germany . Matt lets do that. Less than a month until german voters cast their ballots with Angela Merkel leading the polls. Possiblethe range of ruling coalitions after the september vote is likely to be the broadest yet with merkels block ahead. Joining us now is an exclusive interview. Wolfgang fink, the coceo for germany at Goldman Sachs. You are involved in an event today with the chancellor. That is one of the reasons we. Anted to bring you on supporting the refugees for which she took so much flack initially, but seems now to be have result absorbed relatively well. Wolfgang it is an interesting enterprise we are partnering with that supports learning and education for refugees. Heavily involved in the integration of refugees. For this was a huge risk Angela Merkel as chancellor. Risks she hasther to look out for in this election , even as she is pulling ahead . Issues popping up, like the diesel issue. Wolfgang there are all whole host of issues that need to be addressed. Given that she has been very clear and vocal during her chancellorship, those are issues well rehearsed in the public. I wouldnt say they are new. It is about how you go after them, and its about how you build consensus among the population, would have to be done what has to be done. Matt she has been doing well on the global stage. She is seen as the leader of the western world right now. How important is it that she remain in place . How important is that consistency . Without being able to predict outcomes, the value is stability. The fact that germany displays an amazing level of stability throughout the years is something which is highly valued and highly and in high demand. Given that german elections seem to go into a direction where we can expect stability at the end of it, that is something which i think lots of people look at in value, particularly the financial market. Manus good morning to you. As i look at somebody like Angela Merkel, she reminds me a great deal of Margaret Thatcher in many ways. She wants to build her epitaph how she might be remembered. Do you think that is going to be around immigration and her role as the one that did the right thing for europe . Wolfgang the rest of europe hasnt really, in regards to immigration, has it . The refugeethink crisis and immigration is ,omething which came to europe not that you wouldnt have seen it coming given the globalization and its effects and the stability and her way of tackling it is a courageous, ambitious. Europe will have to rally behind it and find a solution. The more time we have to get to a solution, the better. Having her in office for much longer would clearly help us getting there and building this consensus. There is much to be done in europe on various levels, policies, issues, topics. This could be a great additional to build europe further, which is necessary coming given what we are seeing on a global scale. Matt i have to ask you about sebastian. It almost has a populist feel, this campaign. What are his Biggest Challenges as the next austrian leader . Wolfgang again, it is getting to consensus to communities and electorates and tackling the issues. I dont think theyre that different from the issues we are facing here. And giving with the populist challenge in a constructive way, addressing concerns of people, looking at the geopolitical situation that austria is affected by a flow. And dealing with the more populous forces in austria, which are vocal. That is clearly something he will have to deal with, given he givene to commit his experience as a foreign secretary, which is equipped to deal with. Manus i want to talk about markets. Coceo in germany for Goldman Sachs. Talk to me how you see the european banking banking landscape. Are there going to be more moves within the German Market . Talk me through your thinking in terms of the changing german banking landscape. Wolfgang there is a lot to be done and there has a lot been done. When banks go about strengthening their balance ts on one hand to build a stronger european taking landscape is something which we would think would make a lot of sense. You obviously have to create the conditions for that to be achieved. That has to do with the Single Market for banking and with the Banking Union that has been talked about. Only if those conditions are in place, we will have more logical for combination and m a, and therefore strengthening of european banks, which on a global scale, certainly something that should happen and which make sense to happen, given what we are seeing in the u. S. And asia and its emerging financial groups. With the disquieted deutsche bank, with the hubris you see in the institutions, are you winning business in Goldman Sachs in germany . Have you one business as a result of the dislocation in the German Market, especially in those investment banks . Seen,ng i think we have over the years, and i am doing this now for close to 25 years, we have seen basis where the seen faces worth one with the other competitor has gone grown stronger weaker. Is a healthy level of competition in investment banking. We get our fair share of the market. Clearly, post financial crisis, the International Organizations have benefited from getting back into business and being in businesses some of our competitors have been slower or exited. These things ebb and flow. We see a healthy level from ,omestic competition in banking and you mentioned deutsche is a reputable competitor. I wouldnt say there is a secular trend you can observe, but rather. Iodstime but rather per of time. We see healthy competition. I want to talk about the preparedness that everyone is all of a sudden freaking out about. Do you think Goldman Sachs is going to be prepared by the january 23 deadline . Wolfgang people have had time to prepare. There is a lot to do and a very detailed process, preparations going on for a long time, so i would say we know what is something and we have been preparing for it and we are prepared for it. Matt what about your pricing model . We have seen such a wide range. I dont want to comment on specifics, but these things have been out there and looked at by numerous staff. I think we are ready to deal with them. Manus the one big event in our market lives is happening today at jackson hole where mario draghi and janet yellen will go. , do you look at markets think these markets have understood the risk from jb the risk Jacob Frenkel was worried about . Do you think there are risks in markets as we go to jackson hole today . Wolfgang clearly we have seen months,er the recent the global volatility environment is coming to an end. You have to look at the various markets. We see different reactions there. Depending of the market to look that,d having said jackson hole is expected and looked at very widely. People are very focused on it. The markets have been very focused on events on the geopolitical geopolitical level and the micro and macro level. A market time dealing with, the m a market, a lot of transactions this year are healthy activity, but the large transactions have been missing compared to other years. One of the reasons is a level of volatility as to the geopolitical agenda and the events there and the actions by regulars in the question by regulators and the question of how you can handicap that. A very active how the of midsize transactions. Healthy midsize transactions. We probably wont hear much from mario draghi on the strength of the eurodollar, which has been an amazing run. How is that affecting german business . Silver far, german business is very strong. We saw some of the numbers in the morning, and the financial conditions have been favorable. We see some shifts there, but the magnitude we look at, it is still something that is quite digestible given the strength of these businesses. Obviously, if the interest environment changes materially on the one hand and grow stronger and will have effects it hasp ls, but so far been observed very well. In general, it has been very healthy. Which,s there a level at for german business, is there a level at which the strength of the euro becomes a problem . Tofgang i think it is hard handicap that. You know are we have been in recent years. The economy has been able to absorb it. To effects of that will lead a review of p l, cost structures, positions on manufacturing, distribution. You will be some change, but in general, the industry is very strong as very strong and has been able to deal with much tougher levels in the past. In general, i think the current level is something the corporate can do it. Matt wolfgang, thank you so much. I know you have a busy schedule. Wolfgang fink is the coceo of germany at Goldman Sachs. Up next, we bring you our interview with Robert Kaplan. Tience andled for pa injured the inflation target. This is bloomberg. Lets get over to nejra cehic. She has your stocks to watch. A bit of pressure in these retailers. What a move. Asra price cuts are coming amazon takes over whole foods. Adidas also down. This is a separate story. Record growth this year can be sustained going forward. The stock is lower 1. 4 . Upgraded. Zalando manus thank you very much. You have all of the retailers under pressure. Tesco down 1. 8 . Lets get the other side of what is going on around the world. Sebastian Global Markets affected today on speeches from mario draghi and janet yellen. The two speakers have taken opposite sides of the debate over inflation. There willly probably be another chance to raise Interest Rates again. Robert kaplan said was more cautious. I havent lost faith inflation will get back to its 2 target. Forces and theal models that would have suggested what the cyclical forces, the impact they should have are being offset by new forces, which you can understand mainly by looking at interest is an talking to ceos. Looking at industries and talking to ceos. Lee has beeny y. Convicted of bribery and sentenced to five years in prison. Nation. L transfixed the the 49er old lawyer says he will appeal the verdict. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you very much. Theng up, we will discuss cover of the latest edition of business week magazine, plus some of the stories inside. Its an interesting addition. Check it out next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. The cover story of this edition is how democracy survived. Thisng us now to discuss is david rocks. Off, how democracy survives. What is the verdict of this one . Will the u. S. Survive President Trump . David it might. The story, its a nice essay that looks at the cases of italy and argentina. It shows that the press, the judiciary, they can recover after encountering an authoritarian leader for several years. Not maybe all that bad. There are a lot of other stories evene magazine that i find more fascinating, no offense to the editors who chose this is the cover story. Story. Is vuitton they are not just going to be about backs anymore. Bags anymore. They have been doing it for more than a decade, maybe 20 years, but it is a growing part of the business. Their ceo told us its the fastestgrowing part of the business. They are also losing money on it. They are losing about 100 Million Euros a year on 450 million in sales every year. 5 of theirs up total overall sales. What is the point, u. S. . You ask . In an has a side job ad with a bag. Manus i am more subtle than that. Lets talk about the rest of the magazine. Let me tell you something. In my part of the world, they say welcome whispers, money screens. I tend to whisper. Newsrms of the rest of the flow you have for us, what stands out . Matt it wasnt sean connery who did that ad. I was confusing him with manus. German housing story that is fascinating. Been agermany has renters market. Five to seven years, it has been shifting towards the buyers market part buyers market. That has given heise prices up. That has driven house prices up. In mood it, they have double. In munich, they have doubled. Matt david rocks. Manus, it is the been it has been a pleasure. Up next is surveillance. I will be a bloomberg radio. 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. Francine this samsung vice chairmans jailed for five years for bribery. We are watching wyoming as the financial world stands by. Robert kaplan says he wasnt hasnt lost faith in inflation. Las vegas prepares to host mayweather versus mcgregor in a showdown