Italy, there is a real risk aversion across these markets. That is the view coming through. Putin has moved to issuing a clear threat of retaliation. Markets in the ruble are set to trade lower. Towait for u. K. Industrial come out. The money out of equities is going into the short and of a protection zone. You see to your government bonds drop. Lets take you a little bit further to the 10 year government bond. Ou are seeing yields decline you are seeing move slower and 10 year. Yields follow up falling. It has to do with inflation is a different story. To discusse able that. Have a look at the eurodollar. You are seeing a ninemonth low against the dollar. Hisard fisher saying buddies one of them dissented. You have germany factory orders. Where does that leave the bank . An what will they do . The one thing is the eurodollar trade is getting lower. We are getting lower with andrew. Looking at those numbers, they are really bad. The Economy Ministry has said this is geoPolitical Risk. What is your take . In the raw numbers were seeing this is genuine weakness from europe. Rescuing are wrestling with is there is a multiplier affect that you cannot pick up in the raw numbers. Thats a challenge for guys like quantify. Like to this is genuine weakness. Is this a curveball for draghi . It a curveball. Curveball i think is currency, which is something we are watching closely. It is a huge problem for him. We see stocks lower in the u. S. Where is the rebound . You like instant gratification. I will give you an example. And 2012. , i am looking at the s p. All three in a row had a dip. All of them finished the year the dips arent anywhere near their. We have to have a little bit of patience. This is going to be a market of higher highs and higher lows. The path of least resistance is still up. Out see the numbers coming of the u. S. Economy very strong. To trend markets start lower. Is that where we are at . Those are always temporary. The good news is that means the fed is going to act earlier. Markets shouldnt kid themselves. They need to figure out that good news is good news and they want the economy to grow. Slow, steady growth. Not the kind of growth that is going to cause the Federal Reserve to react in a big way. Right now the debate about Monetary Policy is about timing. You think magnitude . We dont want to get in that debate. The problem is when the economy grows too fast you start to shift to a conversation about magnitude. Steady wins the race. I think the fed is behind the curve. They should be much closer to hiking Interest Rates than they are. Were going to drop that language. We are close. Absolutely. Why are we making this about time . Drop the language. When you look at a bunch of different metrics you can look at any combination of inflation or employment data, this is the first time in 30 or 40 years you see a major disconnect. The fed is probably behind the curve. Is it going to be the minutes this month . I think its the 20th of august. Then theres not much to go by. You will still see some weakness. There is a not a lot that will come by that gives an opportunity or an excuse to come in. It will be a little patchy. Just after that is jackson hall. Wage growth is still very weak. His janet yellen used to seeing low wage growth . I think it is a little bit of a mistake. Range ofd at a different employment metrics. There is no doubt the labor market is tightening. If you pinpoint your Monetary Policy on one thing youre going to make a mistake. She is. Its pretty solid. C is good. There is plenty to talk about. Here is a look at what else is coming up. Russian retaliation. And investors wait for putins response to International Sanctions. Tmobile ares with no more. We focus on what went wrong. Boris Johnsons International address in the next hour. Stay with us. In the meantime, you can follow me on twitter. This is on the move. Deutsche telekom is lower. Talks said to and two inch talks with tmobile to end talks with tmobile. There are pretty much no offers on the teeth on the table for tmobile. Down 3. 5 elekom is this morning. We are going to move off to russia. Vladimir putin has ordered retaliatory motions be prepared in response to eu sanctions. Concerns grow over troop buildup on ukraines eastern border. Lets get to ryan chilcote. What are they considering . They have to be very careful as he draws up these retaliatory measures. Keeping in mind Russian Consumers and reporters and not to hurt them. We dont know exactly what he is thinking. Yesterday morning one Government Official said that overflight rights could be one thing they actually do. What are overflight rights . If you want to go from western europe to asia, the simplest way is to go through russia across siberia. If you cant do that, if russia pulls these rights i get that is bad for us because we cannot sell those rights. Its also bad for western airlines because russia is the Biggest Country in the world. You got to fly around it. That means more fuel, other problems. Thats the reason we saw almost all airlines slump big time over the last five days, all of them down about five percent if you look at the last five trading days. We have seen some small measures the russians have done. He has banned the import of polish vegetables. Arerently polish vegetables not up to snuff. I have been watching russia for 24 years. Russia often bans the import of inngs like meat and dairy political context without blaming politics because they can say theres dont meet gastronomical requirements of russian regulators without spelling out what they really mean witches they want to hurt that countrys economy. We will have to wait. He did tell his they should be careful in what actual plant they draw up to make sure russian producers dont get hit. Russian economy is already stagnant. The polish government is probably not too worried about those vegetable exports but worried about the buildup. They are more concerned about what the fed is going to do. The issue with troop the old up on the eastern side of the ukrainian russian border buildup on the eastern side of the ukrainian russian border has the attention of the polish minister saying russia intends with its troops they would tell you russia has 45,000 troops. Nato has 20,000 troops poised to go across the border. Hascally they say russia one or two plants. One is to pressure ukraine. I guess that is pretty obvious. He also reminded the world he thinks russia might be about to invade ukraine. The Ukrainian Military is surrounding this city. People. Ne million thats more people than frank ford. A big city would be a big battle. You have tens of thousands of troops on either side. Ukrainian troops surrounding it. There is a lot of speculation that should it get ugly the russian president may be compelled to send peacekeepers to protect russian speakers in that have chosen to remain. It is a speculative issue. We have the polish minister reminding everyone it could. Appen thanks for that. From the eu. Ctions russia, we talk about curveballs. Is this another one . Let me put it this way. When you implement sanctions on russia you have to take some pain yourself. Lets be clear. Russia has a long history of enduring pain. That can hearty people deal with pain much more than the u. S. Can and europe can. Understand Vladimir Putin is not going to back down right off the bat. Of what the conflict means, one reason markets have been relatively send queen send queen sanguine. Jpmorgan put together one guy put together an analysis. If you take all the wartorn countries and lumped them together, it amounts to three percent of global gdp. Of one percent of the cap. L stock market so far you can see why. This second level of increased sanctions israel. I have to go to moscow. A longto go through process of making sure none of the people are conflated with any of the people. It is real. It does have a real impact. It will slow down Global Growth and way on psychology. On psychology. It also account for a chunk of resources. We are getting close to winter. Vladimir putin has something a lot of politicians dont have. It is elliptical support at home. He got a strong hand. Has got a strong hand. We cannot underestimate the importance of that commodity linked. If i look back historically at where this geopolitical conflict have had significant macroeconomic implications, go back to the 70s during the israel war, and the u. S. Got involved, and the retaliation from the middle east was no more oil from you. Those are the things we worry about. The key issue is commodities. You are right. Putin has a lot of support at home. Theory, lets say oil prices spike, gas prices bike what is driving the ecb . Thats tough. It is so far out of his scope. I dont think he is in a right now. Its a good question. Itare going to look into with you. Always a pleasure. Thanks for joining us. About ae break we talk ceo under pressure. Standard chartered prepares to post another decline. We will discuss their next move. Thats next. We will be back into. It is roughly missing right fiscal labor market, more flexibility from the labor review the judiciary system, and this is what is needed. Poor. Tinue to be very that was the chief executive on what the Italian Government needs to do to revive the economy. We should shed more light on italy. The ceo spoke to bloomberg about the banks Second Quarter profit. It rose 12 , beating estimates. Tax charges. Ffset here is what he had to say. Big ovation off of last year. We had a big jump in capital. Liquidity is high. I dont want to anticipate too much, but i am confident about the process. Lets bring you up to speed. Sprint has reportedly ended talks to buy tmobile u. S. The regulatory concerns outweigh the potential benefits of a deal. To name theepared new ceo. With tmobile, it is said to be rejecting the 15 billion proposal. The move would put pressure on the French Telecom company. Possibleseeking profits to make an offer for a larger state. Chinas government is said to have excluded several apple cannots from those that be bought with public money. This includes the ipad, the macbook row pro. They were put on the list because of security concerns. This comes during escalating tensions between china and the u. S. Another company we are watching. Standard chartered. Reports another profit decline, they are under pressure after a disappointing first half. Are we going to get more disappointing numbers today . Hopefully its not going to be any more shocking than they have already suggested. Estimate is profitability is going to fall. It is going to be about the Investment Bank. Sbc saw their costs rising the Investment Bank is something were going to keep an eye on. I look back on intelligence staff stats, and this is important. They saw the revenue fall. If you look at what happened in , first half asian bad debt rose by 16 . Bad loans in china rose by 23 . Those are the risk points. The people side of this is the ceo. Came up with fantastic statistics about the return to shareholders under his tenure. It is certainly an outperformance to ones peers. Percent returns versus significant declines in the bank. On that story the sense i am getting is he is a builder of business. He is a taker of risk. He is an expansionary, visionary man who built 10 years of growth in standard chartered. Regulation is on top of every bank. . S he the right ceo is brady dougan the right ceo . Was appointed to reconstruct barclays. And the stock has been slammed. I think that have or to do with the fact that every time he says we are a better bank he plays welcome all. Everybody is calling for his resignation. About this. E clear about a succession plan. They say, we take it very seriously. Have the potential in might leave the u. K. We will talk about that after the break. Racket in two minutes. Welcome back to on the move. 30 minutes into your trading day and this is how things are shaping up. The dax down by almost 0. 8 . Orders,an factory terrible, much lower than everyone predicted. That deal with that geoPolitical Risk is it weakness in the eurozone . Ryan chilcote with a very special edition of three stocks to watch. Telekom, germanys Biggest Telecom company. A 67 stakeholder in tmobile. To biddoes not intend for tmobile. That has investors worried that Deutsche Telekom was overvalued. Offer, the time warner the takeover by Rupert Murdoch is over. The shares are up just a tad. Irelli the biggest tiremaker in italy, they are very expensive tires and selling better than expected. Calendar. Like the they are sticking to their guidance and that is something investors like to hear. I do not think i am the only guy who likes it. Vladimir putin has signaled he plans to retaliate against International Sanctions threatening russias economy. One measure could be a ban on trans siberian flights by european carriers. Shares fell in that report yesterday. Factory orders dropped by the most in 2. 5 years. Interesting the german Economy Ministry blames geoPolitical Risks for the drop, what the numbers point to a tim. 4 drop in orders from the eurozone a 10. 4 drop in johnson in orders from the eurozone. Johnson will introduce the report showing remaining in unreformed block would be worse for britain than pulling out. We will bring you that speech live on bloomberg in one hours time. Scotland votes on whether to accept the United Kingdom. The leaders of the proindependence and prounion campaigns debated in glasgow. Whether independent scotland would be able to keep the british pound. You said you want a Currency Union. Its like getting a divorce and keeping the same joint bank account. You have to get agreement. What is plan b . It is logical and desirable to have a Currency Union because england is scotlands biggest export market in scotland is englands secondbiggest export market. It is in the interest of the United Kingdom and scotland to have a Currency Union. We will keep the pound. Transaction costs are imposed because of the cost of independence. We sell 70 of what we do to england and they sell 10 to us. The pound belongs to the u. K. I will bring in alan crawford. Who is happiest with this performance . Certainly, that was the verdict on twitter last night among commentators. The newspapers and scotland are calling it for the former chancellor, yes. He was able to use his credibility as a former chancellor of the exchequer to pick about pick apart some arguments. On the currency of our future independent scotland. He hit on this point relentlessly. He took a beating, to be fair. To be a plan seem b. Was that the only highlight . There were several highlights. To be fair to the cottage the Scottish Press minister, the argument that there is no need for a plan b because the u. K. Government is bluffing. He described it as a Campaign Tactic intending to scare the people of scotland away from voting for independence. Are also highlights in terms of the north sea oil. Darling was tearing apart some arguments. S a more aspirational argument, arguing that this is scotlands moment and it is time to seize this. Not all of the papers called it for darling. The scotsman described it as a fiery debate, but said there was no clear winner. Very quickly, if this is just noise, does it make any different for the referendum . That is the Million Dollar question. The analysts are divided on that. Could increase the number of dont knows and that is the crucial group. Enough people say they have yet to decide to be able to sway the vote either way. Salmond had to appeal to these people last night and he seems to have failed to of done that. He has a couple of debate opportunities to do so. Thank you for joining us this morning. I will bring in the senior fx strategist. I talk about sterling and Political Risk and we have the possibility of a referendum for the u. K. Some people say the biggest curveball is scotland. A nonissue, to be honest. The only source of uncertainty they have never really scored a decisive majority. it will be overwhelmed by other things. I think it is a good conversation topic, especially when we are on the road and speaking to international investors. People are wondering what implications this vote will have for spain because this is more unilateral in nature. Lets talk about the eurozone. This certainly is an issue. The Economy Ministry says there is a slump because it is a geoPolitical Risk. Else which arrive you to think about. A good start to the quarter. Geopoliticals, risks, but also bearing in mind that there are structural issues. We are almost back to 2012 levels almost. When that happens, the market is a bit too bearish, right . We might start to see data pick up again relative to expectations. When he to be cautious about slamming the euro aggressively. Everybody in london and a u. S. Can paint this beautiful picture as to why the euro will decline. Your yearend call is one dollar 33 four the euro. 1. 33 four the euro. We have seen a big move in july for the dollar already, but if you look at some of the are we seeing material shift in fed expectations . Not yet. Are they behaving like bona fide carry trade . Not yet. Pointing to the dollar is a great story. Term, thert combination of geopolitics, a bit of risk aversion driving the dollar higher. It is not dollar strengthening in the right way. Dollar yen, that is pretty vague. Pretty big. It is japans internal dynamics. This will prompt pressure on the boj to do more. The external situation, japan could face issues of the had as well. Barring the structural reforms, you need to have a stronger dollaryen. January. D this back in the bank of japan would do more in june. What pushes them over the line this time . For the most part, inflation has not fallen to levels to justify that. The markets did not have the right thresholds in mind. Their targets are completely different. One final question, mario draghi will be asked about russia. If gas prices go up, how does the ecb respond . Any inflation is good inflation. When Central Banks this gives them they will try to look past that. There we go. Thank you very much for joining us this morning. Boris johnson prepares to draw a line in the sand. Immediately following the speech, he will be a guest on the pulse. Welcome back. A big corporate this morning. Walgreens is pushing across the pond. They are said to be near a deal to buy alliance boots. It will not move its headquarters to take advantage of swiss Corporate Tax rates. I want to bring in matt campbell. Successfulpretty retailer. Boots is seen as a standout in the retail sector. That is the industrial logic. They already owned part of boots. This is not a huge surprise. For once, we are talking about strategic deals. Why wouldnt you want the lower tax rate . This is a pretty interesting development. Basically, in the last few months, this has become a political issue in washington. Looksent obama saying he he takes a dim view of these inversion deals. There have been efforts to get legislation through congress. That will probably not happen anytime soon. Nameeen being a household seems to have taken the view that they cannot afford to do this. Is there a risk that there is this retroactive law theyre trying to pass maybe these deals get unwound. That is an excellent question. It has been proposed that it would apply retroactively. Afterr it is legal to go transactions have already been completed. Any transaction that has not closed by the time a lot has passed would potentially be at risk. They are not going to get anything through, are they . Reform, taxon reform, budgetary plan. We have two parties that do not agree on very much. Everyone agrees there is a problem. The solutions are so far apart, there is no prospect of legislation anytime soon. Matt campbell, thank you for joining us. Here are some companies on the move. , 1. 3 billion. Electronic medical records company. Reported last month that siemens was looking to sell the unit to focus on its energy and industrial business. G posted a 19 rise in secondquarter profit. Earnings for the quarter beat analyst estimates. Samsung have struck a deal to wind down their battle. Samsung ofccused copying iphone designs while samsung has countered that. Happy theyrybody is are doing this. Boris on brexit. The man is in the house. He will be giving a speech a little later on. It is a big speech. He is looking at the economic story. Boris. Is about it is a lot about boris. The conservative party and their temptation to push the story even further. Is this something that is sensible . I think we need to go into that. Should i be worried about this . This issue is getting leverage for political gain. He is putting forth the london centric view of the world. London could be a singapore. Good britain be in offshore Financial Center . To extract, separate the two. The politics and the real arguments. For most of this guys life, and he wanted the top job. He went to university with david cameron. He is trying to get his name in the hat. If they do win the next election, there is a possibility. All kinds of rumors going around. Years stand in next election . Does he wait for 2020 . He has done something rather than running the spectator. He has run a very big city. Machinations behind the scenes. I am very excited about this. What time . X hes giving a speech at 9 30 a. M. Then he will make his way upstairs and we will talk to him after that. We will try to cross examine him about what he means. Coming up, a 75 billion change of plans. Rupert murdoch withdraws his unsolicited takeover offer for time warner. What is his next move . The offer that we made was not well received. Rupert must have determined that unless time warner was ready to engage, he would have a hard time accomplishing what he would accomplish. It is a tough thing to do under hostile circumstances. We will bring back ryan chilcote. Was this expected . I was asking myself this yesterday. Reneges on the offer for time warner and time warner had said there was no chance for matter . Does it i think the answer is yes. It matters because some people thought murdoch would continue to go for it. And spend a lot more money to do it. This was a sign of capitulation. Not only did he capitulate, but he threw a bone to fox investors. We will have a 6 billion share buyback. It was an interesting moment. A lot of people did not expect him to sweden the bid. Bitle might be a little more comforted by this because there has been a lot of talk about Rupert Murdoch. Maybe there is something here i dont know. If you look at time warner, shares were at 85. They plummeted 14 . Share. Are down to 72 a 73 per share. Fox shares went up 11 . Heartened that that bid is off the table and they get the share buyback. You can follow me on twitter. The london mayor says britain should not fear leaving the eu. He speaks this hour right here at bloomberg. He joins us for an indepth interview. Russia retaliates, Vladimir Putin may ban flights over siberia to punish western curious. Western carriers. M a. K day for collapse