Transcripts For BLOOMBERG Bloomberg Surveillance 20170523

And alongside mark barton in london. We are discussing the horrific attack in manchester. Mark at least 22 people were killed in this suicide bombing at a pop concert filled with children. 59 others have been injured in the attack carried out by one man who died after, detonating an explosive device. The blast happened at 10 35 p. M. Police are treating it as a terrorist attack and eyewitness accounts described shrapnel wounds consistent with a nail bomb. It is the worst attack on british soil since the london bombings in 2005. This comes two months after a lone assailant left five people dead outside the houses of parliament. Children were among the victims. The assault does come during the middle of a general Election Campaign. The parties say they will suspend activities. Right now, Prime Minister may is chairing ameeting of the governments emergency committee, which brings together ministers and security officials. We have heard some comments from various dignitaries abroad, Angela Merkel, the sister money is at the u. K. s who says germany is that the u. K. s side. The eu vows to work with the u. K. To fight terrorism and frances economy minister says we will fight and win against terrorism. We will continue to monitor the latest events. Francine thank you, mark. We are getting data out of the euro area. , instead ofg to 57 56. 5. To 56. 2, instead of the forecasted 56. 4. Servicesonger, where for a little lower. We also have a fallen german Business Confidence. It follows germanys busy factories bringing growth in five years. At the picture overall, germany is pretty strong and the euro area is Holding Steady with manufacturing a little better than expected. The eurodollar, 1. 1255. This is the chart of the day. A lot of this has to do with the underlying strength from the german economy, but a lot will have to do with price and negotiations, which is why we have a nice little resistance level of 1. 1450. Lets get straight to the bloomberg first word news. Reporter President Trump reportedly asked two of americas top intelligence officials to push back against an fbi investigation into possible coordination between his campaign and the russian government. The Washington Post says trump made the request to the director of National Intelligence and the director of National Security agency. Both men are said to have refused to comply. The u. S. President continues his tour of the middle east. He will cross into bethlehem later to meet the Palestinian Authority president mahmoud abbas. They see an unprecedented opportunity to achieve an elusive middle east Peace Agreement. As arab nations joined the jewish state to confront the main rival of iran. In brussels, the euro area finance ministers delayed the completion of a bailout and the subsequent payment of 8 billion in loans. Athens willie that much to pay the bills athens will need that much to pay the bills in july. The French Economy minister says he expects a deal will be done. We are confident that in three weeks time we will have an agreement and compromise between the Member States and the greek debt. Thatld like to emphasize today, the world we have made together was a very useful and reconstructive job. Reporter in south korea, the former president has appeared in court. She could be kept behind bars for life. She wore a jacket with her inmate number, 583, attached to it. Global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. This is bloomberg. Mark lets get more on our top story. 22 people have been killed at a pop concert packed with children in manchester. It is the largest incident of this kind on british soil since 2005. Political parties have suspended their campaigns and theresa may is chairing the governments Cobra Emergency Committee right now. This time it has been a particular attack on the most vulnerable in our society. The intention was to sow fear and to divide, but it will not succeed. Reporter before we are joined by the managing director for the , letsand Eurasia Group start with you kit juckes. It is getting repetitive now,. But in the event of last nights terrorist attack, and what we have seen in brussels, berlin, and variuous cities, markets have proved resilience. This is a fact of life, but is separate from Financial Market activity, the fight against terrorism goes on. It is a part of society, politics, and life and it does have an impact, but it is a way of the reality of what is happening with Monetary Policy, Economic Growth and the desire of investors to get returns. Francine francine from berlin. We dont want to minimize this, but do you think they will be ramifications from this terror attack, other terror attacks on brexit negotiations . Is this the heart of the problem that now has to be dealt with in europe . It is obviously not nice to say. I would not actually focus on brexit for now. I would say within the context of the Election Campaign, of course last nights events will back inesa may firmly control. Since the publication of the tory manifesto, we have seen her struggle, especially with her trademark narrative of strong and stable leadership. Her recenthink, struggles will be overtaken by these events. The campaign is likely to focus even more on leadership and that not leastthe tories, given the weakness of labor and jeremy corbyn. Though it is nice to say, if anything, i think yesterdays events, will help theresa may and the tories in the context of what was proving to be a difficult week since the publication of the manifesto. Mark is this a sharp reminder that britain will have to renegotiate security ties with other countries . Theresa may was criticized when she warned the u. K. Could withdraw from cooperation on security if she does not get the kind of terms she wants over brexit. Doesnt this return the focus to security and the need for cooperation between the u. K. And the eu partners . It does. I mean, it does on some level reduce the implicit threat, or the leverage theresa may was looking to signal to european capitals about the robustness of the u. K. s infrastructure to deal with such attacks and the need for cooperation with european peers. On some level, i think there is some implication, although i would not exaggerate that argument. Although, i think for brexit negotiations to succeed, the mood has to be constructive at the outset of the discussions. The government must signal a willingness to settle financial by abilities before discussions can move on to trade. You would have seen a large constructive reaction from european leaders, and not these people in brussels. I would not over exaggerate the impact on security, although i do accept the notion that it does make the governments implicit threat a little less credible. Francine and of course we cannot at this point, jump to conclusions. We dont have the details on the perpetrators nationality or identity, but is there anything europe can do to show more information to prevent attacks like this . There has been talk about more paneuropean cooperation to deal with these types of attacks , and of course the ones we have seen all over the European Union all over the last several years. Although this is a terrible atrocity, i dont see this moving the politics in a way that creates those kinds of institutions that allow the europeans to deal with this threat more effectively. That is the said reality. Operation at the european level, pulling more sovereignty, more effective, stable corporation is unlikely simply because of this one attack. Francine thank you, mij rahman and kit juckes stays with us. Stay with surveillance. Trump seeks peace in the middle east. We have the latest as the president s First International tour continues. A deal on greek debt relief breaks down. We are live in brussels with more from the meetings. This is bloomberg. Francine pictures there from donald trump, the president of the United States beginning his remarks in bethlehem. He started by saying his condolences on the u. K. Attack that happened in manchester over the night, calling the attackers evil losers. Donald trump it is an honor to join you in bethlehem, the city precious to people from all over the people. A precious city. As i discussed with president abbas in washington earlier this month, i am committed to achieving a Peace Agreement between the israelis and palestinians and i intend to do everything i can to help them achieve that goal. Me heent abbas assures is ready to work towards that goal in good faith and Prime Minister netanyahu has promised the same. I look forward to working with leaders, toward a lasting peace. I also look forward to working with president abbas on other important matters, such as unlocking the potential of the palestinian economy, which is having a very rough time, and building a very positive, counterterrorism effort. Several days ago in saudi arabia, i met with the leaders of the muslim world and arab nations from all across the region. It was an epic gathering. It was a historic event. King solomon of saudi arabia could not have been kinder and i will tell you, he is a very wise, wise man. These leaders and asked them to join in a partnership to drive terrorism from their midst. Francine the president there, speaking in bethlehem, in israel, starting his speech talking about the need to obliterate the terrorist ideology. He offered condolences to the u. K. , calling the attackers evil losers. The president then went on to talk about his commitment to the israelipalestinian peace deal, and talked about his trip to saudi arabia over the weekend. Lets get the latest from our chief white house correspondent, who is traveling with the president and will continue to do so all week. Kevin, tell us a little bit about the tone we heard there from the president. It seems to be very appropriate. He seems to be on script and on message. Keveinin yes, President Trump, saying he will not call the terrorists who carried out the attack in manchester monsters because they would like the term. Instead, he said they were losers. He also said this is an ideology that must be of litter rated. Franci must be obliterated. Francine, this has been a scripted portion. A quest, the events unfolding in manchester have been the first time this president has had to react to global events as they are unfolding on foreign soil. He struck a tone that was measured and aggressive. It comes during a day where he is anticipated to give a speech in which he will lay out his vision to combat terrorism. Earlier, his first stop in saudi arabia with king solomon. He stopped to speak with arab leaders to start and chart a new course. He then flew directly to israel to speak with Prime Minister netanyahu. As we speak, he is meeting with Palestinian Leaders. After this, he looks include in vatican city to meet with the pope. It is clear he is looking to reset the rhetoric of what was seen as abrasive campaign rhetoric. Francine kevin, tell us a little bit about the Washington Post story that President Trump asked officials to push back against the investigation into links with russia. Kevin there is no question that the controversy and the allegations surrounding his administration officials, as well as he himself, into just how he interacted with fbi officials is still very much in the background, and shadowing over this First International trip. I am told that several of the folks at the heart of this investigation have had to turn over documents to investigators as we speak within the last 24 to 48 hours. I am told that investigators from the u. S. Senate intelligence committee, francine, are beginning to have conversations to set of hearings for when folks might actually testified publicly, should they be asked to do so. Either way, former fbi director james comey, who was fired by President Trump several days ago, is going to testify publicly sometime after memorial day. The white house is very much trying to keep the focus on President Trumps busy schedule abroad, but he is facing these tough questions, not just from democrats, but from republicans within his own party. Francine kevin, thank you so much, traveling with the president. You will hear plenty more from kevin throughout the week. Lets get more with kit juckes. In jerusalem with the president. What kind of president is he at the moment question mark i have heard that he is a deal maker and is getting things done, or president. Educk that could impact policy. Lame duck is probably correct, at least in the mind of the overall president. Market, a little extreme. The fear is there is a list of things he wanted to get done that he cannot get done. View of the u. S. Economy is take, is or about as good as it gets. More he has difficulty controlling events in washington, the more it does not happen at all. I think we are repricing Global Markets to the idea of the u. S. Economy that trundles along at 2 for now, and possibly cannot sustain that for very long, and then rethinking from ther. From there. Mark where does that leave bond yields . The dollar has been drifting lower. 2. 24, a faryear, cry from those 2. 6 levels. Givenllar yields, everything you just said, where next . We need to get back to, at the very least for example, some of the capital repatriation from american companies, we need to get something on tap to have anything near 3 . 2. 70 get back to the that we have seen. People like us have not changed the forecasts yet. The fed is still likely to raise rates in june, probably again later this year, a couple times next year. But the final terminal fed funds rate, it is not going to be 3 . It is going to be a good bit lower. Everything is coming down and people like me look at the markets. I cannot believe at the moment that i will get a 1 real yield. If i cannot get that, the dollar has peaked. That might not have peaked against every currency, but it has against the euro, and probably against the pound. It all becomes a little more of a mess. Were still not near the point where you think the next move in yields is 2 . We are more likely to be stuck in a range with investors saying, this is not too exciting, what is the big story . European central bank policy, and the hunt for yields. If i am ever going to get 3 in the u. S. Yes, francine . Francine we will talk about the ecb shortly because we have Angela Merkel comments. But going back to some of the reforms in the u. S. , psychologically, the more leaks there are on the Trump Administration and the possible this makeussia, does the president lose Political Capital . The question is, can he get them through congress . His ability to get things through congress is clearly not what he would have hoped. I am not sure that is getting easier for him now. It is getting slower. So, trying to corral Congress Becomes harder the longer the distraction goes on. In that sense, i think that eats away it does not mean he cannot get anything done, but the Shopping List of things he would like to get done looks over ambitious, i think, at this point. Trump lose all of his Political Capital in the capital in washington . How close are we to that point . He still seems to have a hold within his own party, within the gop, within the republican party. At what point does that start to break down, given we have got these stories, these leaks, on a daily basis . I think we need something more concrete and damaging and not unequivocal to change that. Remember, this is a president and its his party that controls the reins of power of rule. He is trying to corral his own people. A are learning the gop is very fractured party, which i think we knew, but why are we learning it over again . But i dont think you break that ability to get things done completely, unless you have something that is genuinely unequivocal. Mark stay with us, kit juckes, from societe generale. To reiterate the big story, it occurred last night at 10 35 u. K. Time. At least 22 people have died in a suicide bomb attack at a pop concert that was packed with children in manchester. 59 people were injured in the attack carried out by one man who died at the scene after detonating an explosive device. Mark, we have to keep an eye on that. It is very important for everyone to know we dont know the nationality of the perpetrator of the attack, but we are expecting, i imagine, everyone to be briefed by local police. They briefed the press about an hour and a half ago. We spoke to a couple of newsmakers today. President trump, also offering his condolences. I thought that it was very significant. He is in the middle east and in no way did he link this attack to the threat coming from islamic extremists. It seems the president , for the moment, is much more in control and president ial. Up next, eight hours of talks, but no deal. The failure to agree on greek debt. What this means for the future of the euroye area. 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. 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. Am Francine Lacqua. Mark barton is in london. We are watching the latest on the u. K. Terror attacks in manchester. Mark 22 People Killed at a terrorist attack at a concert packed with children in the northern english city of manchester, the worst incident on british soil since the london bombing in 2005. Political parties passes submitted their Election Campaigning and the Prime Minister is chairing a meeting at the Cobra Emergency Committee now. The u. K. Home secretary has announced the atrocity. It has been an attack on most vulnerable in our society. It and ticket was to fear and to divide. It will not succeed. Mark we have heard from the new French Economy minister who said we will fight and win against terrorism and the german chancellor said that germany is at the u. K. s side after the carnage. Francine thank you. Lets get to the bloomberg first word news. The president reportedly helped him push back against an fbi investigation between his campaign and the russian government. The Washington Post citing current and former officials said that he separately made the request to the director of National Intelligence and director of National Security agency. Those men are said to have refused to comply and said it was inappropriate. The u. S. President continues his tour of the middle east, he spoke in bethlehem today announced the manchester terror attack to denounce the manchester terror attack, yesterday and the israeli Prime Minister saw an unprecedented opportunity to find a Peace Agreement as arab nations joined the jewish state to confront their common rival, iran. Koreanmer south president has appeared in court to deny charges of extortion and abuse of power that could keep her behind bars for life. She arrived in handcuffs with her inmate number. She is accused of bribery, coercion, and leaking state secrets. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. This is bloomberg. Rancine thank you lets talk about the future of europe and the European Union former Vice President of the commission. Thank you for joining us. Y situation with the terror attacks in manchester yesterday, happen europe deal with these attacks that seem to happen quite a lot . The people and families showsd by this attack, it why in europe we have decided to build up our security and defense. Pooling of our defense capabilities and beefing creatingtside border, a cia and european prosecutor. And having a Better Exchange and application of the data available. We are working on it. These problems are international problems. It is only by pulling together our capacities and defending ourselves together that we can manage. Francine your concern that leaks and memos from the u. S. Administration, which have not been confirmed, make it less likely for intelligence sharing. What in would it have on terrorist threats . Intelligence sharing has a lot to do with confidence and you need to have people working. Ogether that is why i say we need the european cia. We did not think about creating that 10 years ago but thinking of it now. And also to pool our defense capability. Very often we were blocked by Great Britain, but now, with the new situation, the european continent is shortly going ahead. Francine how do you expect brexit negotiations to go . Will the animosity be tempered . Better a divorce that a bad marriage. Great britain has asked for the divorce, europe did not. We are waiting for Great Britain to move, we have to wait nine months for a twopage letter. We do not see how you can solve all of this terrible problems, which need to be solved. Great britain needs to go through thousands of pages of agreements. That is real work. Fix the have to conditions of the divorce before we can fix the conditions of the new living together. Francine do you expect brexit to happen without a deal, and more integration within the center of europe . I expect brexit to happen and once you are divorced you set conditions for the new partnership. Not the other way around. Francine youve expect more integration, with the election conditions for the new of macron . , more integration in europe we are working on cooling our defense capabilities. That is only possible without a Great Britain because they have always opposed this. There are many things i think we can do on the continent without Great Britain. We have to do them quickly. Francine i want to talk about greece. Finance ministers have failed to basson and pass on debt relief after almost eight hours of talks in brussels means delay in completing their bailout review and to the diverse mental disbursement of loans. Why wasnt there a deal . Good question. After almost eight hours of talks, no wrought agreement on this debt restructuring. Fairly upbeat comments from a lot of finance ministers. The reason as to why they did not get this deal, hard to 10 down but it is complicated and these talks are technical. There are so many different positions that need to be resolved and they did not get there last night. Francine down but it is can we a resolution soon . This is where the upbeat comes in. Everyone i have spoken to has pinpointed the next Euro Group Meeting in three weeks as the date where there will be a deal on debt relief for greece. I expect to the i spoke to the french finance minister, he said that. I spoke to the portugal finance minister and here is what he had to say to my question as to whether there was anything in the meeting that made him think there would not be a deal in three weeks. We are confident that an agreement will be reached. It was not yesterday night. Appraisala very good on the efforts of the greek authorities. Madee commitments they with the euro group. This advancement in negotiations was quite well received by all members all euro Group Members and we expect in three weeks time in luxembourg to reach the agreement. That optimism for a deal to be reached in three weeks was also shared by the cyprus finance minister who i spoke to earlier this morning. Greece needs this deal to get a disbursement so it can meet 7 billion euros of repayments it has to make by july. Everyone does not seem to think there is any chance greek can default on that but there is the bigger issue of the sticking points between the imf and germany in terms of debt sustainability but those talks are likely to continue, even if we get the deal we look for last night in three weeks. Francine thank you. We are back in the berlin studio. Are you disappointed that not agreeing on greece hates europe in a picture paints europe and a picture it takes too long to deal with crisis . An everlasting story and it will not finish this summer. Unfortunately, the solid structure reforms, like building of an administration, which can work, have not been done in greece yet. The ball is still and always in the court of the greek government. The money will be this first on the conditions be dispersed on the conditions but it will not solve the problem which is deep structural and we will have this next year. Francine the more we delay, does it weaken the eurozone . And does it for put more countries at risk . It does not because it is linked fully to the greek situation. You see other countries that had been suffering because of the budget crisis, they have resolved their problems with the help of the European Union. And itdoes not manage will be an everlasting story. Francine when you look at politics in europe, Marine Le Pen had 38 of the popular vote in france and brexit and it will be an everlasting story. Happens, do you believe the commission and the eu and euro area need to be reformed to reconnect with the citizen on the road . Certainly, they do. Something is very interesting, before brexit, many people doubted the future of europe. After brexit, the positive image of the European Union has rocketed. Many people say we need to be together and to Work Together. We see how the world is evolving. Everybody is small in front of the United States, of china, and india, that does not do it. We need to Work Together. People like to have reform. Reforme anxious to see in security and defense. They cannot imagine that countries are going alone. The fact that there seems to be an agreement between germany and france, in order to go ahead for pooling the defense capacities, shows the right direction. Yes, europe has to reform and it is reforming. It will be in 10 years, not the same continent we know as it is now. There will be a part of europe that will be much more united and going to a political union. Francine thank you for joining us on bloomberg surveillance. That was the former Vice President of the European Commission. Coming up, the latest on the terror attack in manchester, the worst on british soil since 2005. This is bloomberg. Francine lacqua lets check in on the market. Mark today is dominated by the event in manchester last night were 22 people have died in the suicide bomb attack at the concert, which was packed with children, 59 people injured in the attack was carried out by one man who died at the scene after detonating the explosives device. Party and the Opposition Party they have suspended all their campaigning ahead of the election on june 8, just two months after a lone assailant left five people dead after the houses of parliament in london. Impliedseen a rise in volatility which game for a seventh day, longest stretch since january. Against the dollar, the red line is last night, just before 10 35 local time when the incident happened and sterling has moved down by roughly 1 10 of 1 , rising to a september hot of 130. 36 on friday. Sterling has moved but not greatly. This shows the yen against its. Ajor peers, all 16 earlier, all but one were falling against the yen but things are changing. The Australian Dollar and Swedish Krona are rising against the yen, not just events in manchester we are focusing on, another incident where concentrating on the Washington Post reports that donald trump asked intelligence jeeps to publicly did not any collusion between his campaign and russia. This is just below a record. It has not been affected by the events in manchester last night. Gold, money moving into the haven that was gold earlier and now gold with little change. And investors are able to shrug off the events like a terrible terrorist atrocity we saw in manchester last night. Francine lets get more on the u. K. Terror attack. Joining us now is the senior european analyst at control risks. 22 people were killed in the suicide bombing. We do not have details on the perpetrators nationality or identity. How would you rate security in the u. K. . Can dog the government to protect citizens from these kinds of attacks . Provisions atrity protected sites become harder and harder, terrorists are naturally going to look to softer elements of the security environment to make their attacks. Example, this was outside in an unprotected place outside the security area. I suspect that is largely what we will see. This is difficult to protect against, given the design of cities these days. We are expecting to have more news, a lot of the Police Working the case will probably brief the media in the of hours. E is it significant that the assault took place in the middle of an Election Campaign in the u. K. . Of it remains to be seen wher that is significant or not. My suspicion is that it is not up ridiculous significance. I do not think there is a political aim the perpetrator was favoring or opposed. Know, the motivation of the perpetrator is yet to be made clear. Anything further than that would be largely speculation. Make it will brexit more difficult for intelligence sharing among European Countries . This is one of the key questions that has come out in the last couple of months. The extent to which intelligence sharing may be damaged by this. Theelief is that, even if full these ills of the economy of trade of Free Movement easily, thendled likelihood is that all european states will recognize the Mutual Benefit of intelligence sharing and cooperative response to these kinds of things. My personal assessment is that i do not think the capabilities in this area are likely to be significantly damaged. I think selfinterest will take over on all sides. Francine give us a sense of what you will be looking at. We are expecting Greater Manchester police to brief us. There is an Ongoing Investigation on the ground. What would you be looking at . We need to understand who did this terrible act. Is there anything the government could have done to prevent this . Charge is theresa may, one of the most respected politicians when it comes to dealing with these kinds of threats because she was home secretary gorsuch a long time for such a long time. Theresa may was home secretary for a long time. The focus today will be on maintaining the secure perimeter in manchester. Later on in the day i think we will see some work going into the identification of the perpetrator. Threatments on the u. K. Level which may come later. I suspect, it this is an Ongoing Investigation with multiple accomplices, that may have moved already. Francine thank you, david lee. Up next, why the ubs Group Chairman believes it is time for the ecb to scale back its stimulus program. This is bloomberg. You are watching bloomberg surveillance. Lets get to the Bloomberg Business flash. Said thes chairman European Central bank should start getting back stimulus by the end of the year giving back stimulus by the end of the year and said conditions have changed considerably since the initial crisis. , as much as the policy we are on now was appropriate 10 years ago, on the 10th anniversary, that policy looks increasingly out of place. The negative Interest Rate i think will be removed over time. Departure from the European Union unlikely to go smoothly. According to someone who said part positions on both sides will make talks difficult. It does not look like a soft brexit, it looks like a hard brexit or very hard brexit and now is the time for the banks and the Market Participants to prepare. I believe that the brexit is manageable for banks. But i think we need a thorough preparation and we have to do this in a very efficient manner. Traderble commodity crisis deepened after the Global Rating went down. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. This is bloomberg. Our story of the day is that at least 22 People Killed in the suicide bombing at a pop concert packed with children in the northern u. K. City of manchester. The worst terror incident on british soil since the london bombing of 2005. Mark hearing some comments from the turkish president who said turkey stands with the u. K. Against terrorism. Francine whatever at, ebay deadric attack, 22 people at a terror attack at a concert. Theresa may chairs a meeting. Donald trump arrived in bethlehem for a meeting with the Palestinian Leader. He is seeking 3. 6 trillion back home for budget cuts. Talks over the greek bailout review extent thats extension failed extension failed. I am Francine Lacqua. Tom keene is in new york. The most important story of the day is the terrorist attack in manchester. We do not know the details on the nationality of the perpetrator, or identity, children were victims and 22 People Killed. We may expect an update from local police or from the Prime Minister. Tom i heard from President Trump a minute ago and the Prime Minister in a cobra meeting. End,ay, when does this whether the United Kingdom or france . Not to say it is a lone wolf but you wonder what the to do list is for Police Forces and government leaders. Francine what we know is that theresa may will chair a meeting with the government cobra emergency meeting which we understand started a half hour ago. We are expecting her or someone to brief us. The tragedy unfolded with two weeks to go before the june 8 election. 22 People Killed and 50 others injured after an explosion at which took place during a concert by u. S. Singer Ariana Grande and is the u. K. s worst terror incident since 2005. The Major Political parties have suspended campaigning and the Prime Minister is leading this meeting of cobra. Donald trump had this to say bethlehemving in early this morning. President trump so many young, beautiful, innocent people, living and enjoying their lives murdered by bethlehem early this evil losers in life. I will not call them monsters. Because they would like that term. They would think that is a great name. Them, from now on, losers. Francine joining us on the phone is the former u. K. Minister of state for security and counterterrorism. She was born in birmingham. Thank you for joining us. At least 22 People Killed in the suicide bombing. We do not know the identity or the details of the perpetrators nationality. What do you think . Anything that could have prevented this sort of attack . There will be an examination of what security precautions were and whether they could have been improved. My inclination is to think it wouldve have been difficult for entry security to have been done in any place other than where it was. There is perhaps an argument about exit security because the attack appears to have happened in the foray foyer. The further you push out the security perimeter, the more you get into the street and you get krause in the street where they are the target. These are difficult decisions. To me it is fairly clear that this is not a socalled lone wolf attack. Securitythink the agencies believe in lone wolf attacks and it usually turns out to be an Organization Behind it and this one smacks of organization. To build so difficult an improvised device but you have to know how to do it and have knowledge of how to make the explosives or obtain them. The likelihood of this being done by a single individual is remote. It is a bit different from the ones we have experienced recently, would you been much more which have been lower. Something it may Say Something about the background of the individuals concerned. Tom how close are we, after even after event, to saying throw the bums out . When does the dialogue shift . It will shift immensely. Whether thereat are further necessary security precautions. Unless the population is prepared to limit live in a prison, there is limits to what you can do with security. Returnees from syria you cannotg them, if find some evidence against them already, they must be targets of surveillance. In Community Solidarity and people being willing to come to the police when they see something suspicious. It is hard to organize these things without anybody knowing anything. It is multiple measures we have to take. Remain ahis will challenge to our society for the foreseeable future. I do not see terrorism going away. As of when we succeed in displacing them from syria, which i hope we do, and iraq, they will move to yemen or north africa. Continuous challenge to democratic societies. Francine what about intelligence sharing . Does more intelligent sharing need to happen between European Countries . Intelligence sharing has improved over five or six years. Since not just the u. K. But other countries became a target. Could there be more done . Enoughct, i am not close to know in detail what happens but both the mechanisms and he will have greatly improved. There are still things that can be taken further. People are now very conscious of what they need to do and are putting the measures in place. That is something one can be confident is happening. Interesting to see where and i am sure we will discover where this episode traces back to. And whether this is something that happened entirely in the United Kingdom or has links to continental europe. Francine thank you. Thank you. Francine the former u. K. Minister for counterterrorism. Is the assault took place in the middle of this Election Campaign . It means security will now become a focal point, whether one likes it or not. The tone will change significantly. It has been all about brexit and those left behind by globalization. Now it will be about security, written coming together Great Britain coming together, theresa may is on secure ground because she was home secretary for many years. Francine the conservative party and Opposition Party have said they are suspending all activities. Do we know how long that will be . We do not at the moment, usually it is 24 hours but it may be a bit longer. It will not affect the timing of the election. It will perhaps shift the tone of what has been so far a pretty robust Election Campaign. It may become more subdued from now on. Tom what is the difference between a lone wolf in france and a lone wolf in the United Kingdom . Or is there no difference . In terms of the impact, when you have dead children, the impact is pretty much the same. Politically, france has more of a history of extreme right Political Parties that we do not have in the u. K. When you saw the impact in france, a lot of people expected Marine Le Pen to gain traction because of the terror attacks which did not happen. There comes a point when common sense prevails and, at the moment what we heard, european , one word from the president of the u. S. , this is not a time to talk about tension but coming together and intelligence sharing, that especially will be at the forefront of this. Francine thank you. This is the picture for your european stocks right now, advancing a little bit on strong Economic Data we have from germany and france. This seems to signal the regions recovery is on track. U. K. Bonds showing resilience in the wake of the suicide bomb attack, the pound slipping a touch. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua and tom keene is in new york. British other orders are calling the deadly base closure and a terrorist attack explosion a terrorist attack or 22 people were killed and 59 wounded in a suicide bombing at a concert which have an outside an arena filled with young people attending a concert by american singer Ariana Grande. The worst incident in the u. K. s and the london bombing of 2005. Reacted to the Manchester Attack after meeting with the Palestinian Authority president. Donald trump said the attackers were evil losers and the president leaves israel and several hours and goes to rome. A report that the president asked two of his intelligence chiefs to help him push back against the fbi rush investigation, according to the Washington Post Company Present as the director of National Intelligence and the head of the National Security agency to deny there was any evidence of collusion between the Trump Campaign and moscow, the post says the intelligence chiefs refused. In south korea, the military says it fired warning shots after an unidentified object flew south from north korea but no other details. This comes two days after north korea tested a mediumrange missile and kim jongun has ordered the missile be massproduced. Global news 24 hours a day, powered by more than 2600 journalist and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Hsbcjoining us is the senior economic advisor. We will get to his wonderful new world in a bit. We will all that into our markets and economics and speak later of the terror attack in manchester. This is the mystery of economic iswth and folded into it culture and demographics, how grave is it for central bankers . A difficulty they have is working out how to get growth back to where it was before the Global Financial crisis. But we have seen over the last few years, growth rate below what we saw before the financial crisis, despite the fact that Interest Rates were low and we have lots of quantitative easing. Lots of experimental Monetary Policy. Everyone is relying on Central Banks. The right kinds of growth rates. The central bankers are discovering the weapons at their disposal are not working the way they had in the past. Tom there has been much said about the president s Foreign Policy vacuum, he wants to be isolationist which creates a vacuum with china can go into. Where our economic vacuums right now . The obvious one, the fact and Hillary Clinton would have done the same thing, a pullout of the transpacific partnership, which was an opportunity for the u. S. To set the rules of the game for the asiapacific area. Having pulled out of that, it raises the question of who fills the vacuum left behind. If you are china, you are looking at the vacuum as a great opportunity to reshape the world. And follow their particular agenda. You have a Regional Comprehensive Economic Partnership which is chinese, lukewarm version of tpp which the chinese will hope to push through with regard to the rest of asia. Francine go ahead. Under those circumstances, you have a situation where china is increasingly shaping that part of the world, both with the Shanghai Cooperation Organization and the Asian Infrastructure investment bank. Before you know it, you are shifting away from a close columbus world dominated by the u. K. And the u. S. , now dominated by gorsuch we have not thought about over the last couple of decades. Francine we will come back to your book, a fantastic read which goes through what would happen if this is the end of globalization and what it means for prosperity in the Global Economic order. Back to centralbank policy, do you believe that because of the memos coming out of the u. S. That the president feels or is a political lameduck president . Because he is losing Political Capital or because congress is not behind him, and what does that mean for fed policy . Difficult for me to comment on the future of donald trump. A lot of uncertainty. The working assumption i would use i think that is difficult to say. No one from germany is being charged so far. At some point, germany has to be in charge but the big issue is regard to the german relationship with the rest of europe. It depends not on Monetary Policy but fiscal policy. The president of france is talking about a unified fiscal arrangement for europe and i have simply with that view but the problem is that it means the germans are on the hook to bailout other pn other European Countries and whether germany would agree is a big debate. New world a grave which has rave reviews on the folding of history into our economics. I cannot say enough about this effort. He has Thomas Hobbes in it who was on the show a few weeks ago and we will come back with stephen king of hsbc. Ratner,p today, stephen we will makes in the discussion of the markets and our politics in washington. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua and tom keene is in your. That is in new york. And investors chase chinese lets getthat to the ubs Wealth Management chief investment officer. Before we get to china, i want to get your position on equities , you are now overweight in eurozone equities. You are overweight in u. S. Equities. We are overweight in european equities versus the United Kingdom equities. We have an overweight in Global Equities versus highgrade bonds in general. A moderately risk on position, reflecting some of the things you mentioned about china and the growth in europe and the United States continuing. Apologies, you closer overweight position in u. S. Equities, why did you do that . The earnings in the u. S. Were extremely strong. We see now this strength in europe continuing, giving the evaluations in the United States, we wanted to take a more balanced global approach in our overweight which does not mean the u. S. Cannot continue to perform but recognition that other regions can accelerate as well. Francine give me a sense of the volatility. We solve volatility last week, did that damage your clients portfolio . I do not think so. We see that the indexes are still near highs and over the weekend i had a fantastic opportunity to spend some time with some of our wealthiest and most influential clients in amsterdam. Some of the things they are degree,on our how, to a politicians around the world are more or less in line. The threat of populism has receded a bit. They see the synchronized Global Growth and recognize their corporate earnings are coming in strong. Central banks are still providing a great deal of stimulus into the economy. I think, after the french election, more clients are realizing that the perhaps the glass is halffull. Francine is that a concern that you have . Cansure whether macron govern and push the reforms through, and concerns bubbling over in spain. Are we crying victory too soon . As you know very well, the longerterm problem in europe have not been solved. There is probably another election cycle where europe has the chance to do that. These concerns will come back to the forefront. As you know, growth is a very important force that can you mail the rate some of the biggest you merel you, from your ubs headquarters in zurich. Coming, stephen king will continue on his grave new world and in the next hour, Stephen Roach of your university, always on china. Feel university, always on china, on President Trump and washington. Surveillance. Good morning. Right now, we need to go to jerusalem and our chief , kevinton correspondent cirilli, moving from saudi arabia to jerusalem. The backdrop suddenly moves to religion. Move from islam to the jewish faith to the ceremony at the vatican today. Why is the president doing this . I am in the middle east, and i have been told by white house officials that he is hoping to reset. ,t is being interpreted hopefully, as a way to reset the rhetoric from what is perceived as more abrasive in the campaign season. The first portion of this script has been largely the first portion of this trip has been largely scripted, but that changed after the terror attack in manchester. The president issued comments that these terrorists were evil losers that should be obliterated. Wererump repaired remarks he said peace talks cannot take place in a place where any terrorist violence is funded or supported. After his meeting with Palestinian Leaders, that is clearly a direct response to them. Hom the symbolism of riyad and jerusalem, the enemy or fear of iran, what is the relationship of the shiite in iran to the palestinian state . Kevin i consent you the administration is hoping, from a geopolitical perspective, to use the mistrust of iran to broker middle east peace talks. This comes several days after iran voted to reelect its president. But the saudis and israelis and leaders of several other states are against the iran deal brokered by previous president obama. Againsts spoken out that, which is why youre seeing the basis of these talks surrounding that mistrust of iran. From a business standpoint, part of that 4 billion worth of investment deals in saudi arabia coming on the basis of defense fromindustry companies in the ud states. In israel, there was some distaste for that meal deal, with the Energy Ministers speaking out with the Energy Minister speaking out. Tom kevin cirilli, thank you. The president ial party will move to the vatican later. First, we moved to our first word news on manchester. Here is taylor riggs. Taylor lawmakers have begun to look over trumps first budget proposal, and even some allies are calling it dead on arrival. It calls for 3. 6 trillion for recent College Graduates and farmers. The way has been paved for opec and its allies to extend the deal on oil output cuts. Iraq has backed a proposal for a ninemonth extension. Iraq is opecs secondlargest producer and previously only supported a sixmonth extension. President th korean Park Geun Hye has denied any charges against her. In brazil, Political Uncertainty may hurt the countrys credit rating. It could be downgraded in the next three months. Last week, there were allegations that the president endorse the payment of hush money to a former legislative leader who is now in jail. Temer denied any wrongdoing. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Francine thank you. Killed andave been around 50 others injured after an explosion at Manchester Arena in northern england. It took place at a concert for Ariana Grande, the killed and worst terror incident in the u. K. Since 2005. Major Political Parties have suspended campaigning. Europeans now is the commissioner presented of richard kuehnel, and stephen king. Anything that the European Commission can do and needs to do to tackle threats better in European Countries . First of all, president offered histaly condolences, and i are going very much. There trying to reinforce cooperation when it comes to information exchange. We are fighting the issue of terrorism and the issue of radicalization in society. The du is doing its lot the e. U. Is doing its lot. Francine we were talking about how this has almost no relation to the market at the moment, because unfortunately, they are, and events they are common events. Is there anything policymakers can do to spur government into action . Stephen one of the difficulties that exist is there was unexpected assumption in the west that the western values would spread through the rest of the world. But everyone would believe what the west at about free markets and so on. But for a variety of different havens, different people different views as to how society should work. It is a terrible thing seen in manchester, but at the same assures people of how different societies work. Tom in your new book, you have pathutiful chapter on the of Thomas Hobbes to walk to montesque. Back to a state of nature are we back to a state of nature we cannot run from . A the people within commonwealth can collectively look after their security needs. One thing we have seen in the west increasingly with the fragmentation of views about globalization is a retreat into the hobbesian model of the safety and security of the nation state. As an economist, you would say there are lots of opportunities missed as a consequence of redirecting borders to make the world more secure. One would be economic consequences. I spoke about half an hour ago to the former Vice President of the European Commission. She was calling for a european wide cia. Does brexit make that more or less likely . Richard the idea that we have more cooperation between security is eminent. What we need is more cooperation between national centers. This on thet have european scale. We need to rethink how to reestablish a Strong National cooperation. Francine do we need more digital monitoring . We have to be careful because the release of the identity of the person, of the religion or identity of the nationality we have no idea who this person is. But with the commission say we need to increase the money spent on digital . Internationaled platforms to look at content on international platforms. To make them feel the ownership in this particular situation. In europe, we have strong data laws. Tion because we have the privacy of our citizens to protect and to find the right balance with laws. Interest of better monitoring is a constant work. Francine i do not want to be insensitive because britain is still reeling from last nights attack, but will this have an impact on brexit negotiations . Richard well, now we have to go through the process until the british elections. There is a stop in the campaign, and other one has to reassess where we stand. We have a lot of sympathy for the british and the british people, and with the sympathy, we will continue to be ready to negotiate professionally, constructively, because we have an interest, in the long run, to have a close relationship with the u. K. And its people. Francine richard kuehnel, the European Commission representative here in berlin. And stephen king, author of grave new world. Coming up today, a conversation with the former cia director at 9 45 a. M. In new york. This is bloomberg. Francine this is bloomberg surveillance. I picked this as my morning must listen from our interview with the ubs chairman. Asked him about you are euro strength. He says the ecb needs to start scaling back support by the end of this year. The ecb, as much as the policy we are on now was appropriate 10 years ago when the process started, that policy looks increasingly out of place. The negative Interest Rates will be removed overtime. Francine lets get back to richard kuehnel, the European Commission representative, and stephen king, hsbc senior economic adviser. Do you believe ecb stimulus is out of place . Washen part of the problem Interest Rates fell further and the ecb was more negative. Argue that the policy was not stimulative enough in the first place. Although we are seeing better industrial news from europe at the moment, it is still the case of the pace of Economic Activity is not particularly strong by historic european standards. The ecb forecast is that growth will slow down again during 2018. The riskreward of exiting current policies is considerable. The risk is you tighten policy prematurely, this cover there is something nasty in the exchange rate, and before you know it, the tentative recovery unwinds and the ecb gets blamed for it. The other difficulty is in the eurozone, there are big differences in experiences. Germany is doing perfectly well. Not in italy. Italys economy is still growing incredibly slowly. The gap between germany and italy is widening yearbyyear. That is a structural worry. Francine do you believe european citizens are behind the european project . Richard by and large, yes, but there are other questions. Questions about the pace of the changes in society. A lot of it is blamed on the e. U. , because it is the symbol of change. Is we needef for us to reconnect and explain europe is part of the answer, not part of the problem. If we are in this new world, only together are we Strong Enough to shape globalization. That is what europe is for an instrument. Tom good morning from new york city. All in america wonder who juncker speaks for. , who he speakser four. Who does mr. Juncker speak for . 500 million citizens. We have a system whereby the European Parliament is collected, and the European Parliament elects the European Commission president , as much as the Prime Ministers around the world are elected through their parliament. That is the democratic representation president juncker has. He represents the e. U. Tom relay that to an individual country like germany. How does juncker speak to merkel . Richard on friendly terms and very regularly. Basically, we are all sitting in the same boat in europe. Bye tasks have to be filled the Member States when we speak about reforms. Reforms have to be done by national governments. We can make recommendations, as we have done for all e. U. Member states. These recommendations have to be followed up on the level of national policy. It is a close and friendly interaction. We are there to service Member States. Francine thank you. We will have to get you back on, because one of the biggest concerns is 38 of people in andce voted for someone that you antie. U. That was richard kuehnel. Stephen king stays with us. We are expecting the Prime Minister, theresa may, to brief reporters. Still reeling from britains terror attack last night that killed 22 people. We will get the update from the Prime Minister shortly. This is bloomberg. Francine this is bloomberg surveillance. A live shot of number 10 downing street with that lectern, brought out about five or six minutes ago. We are expecting Prime Minister theresa may to talk to the press and World Leaders shortly. Britainreeling from reeling from last nights terror attack that killed 22 people at a concert by Ariana Grande in manchester. Middle ofso in the the election. Local police are keeping details close for now. Toexpect the Prime Minister possibly talk about the identity and nationality of the attacker. Right now, we celebrate the International Relations book of the summer. Stephen king is the author. This time, he gets it done. Grave new world is a fantastic linkage of our new world and the histories. Stephen king is in our london studios. At the end of your book, you take your grave new world and take it to our fear of fears, 1984. We are used to a world dominated by the u. S. As a superpower. Were three84, there superpowers. Just change those names to the u. S. , russia, and china. Reflection that china is so economically strong. And russia has become politically stronger and putin returns a 19thcentury imperial view of how the world works. The u. S. Has become smaller economically, less influential clinically, creating a room for rival versions of globalization. Tom a few summers ago, my book was dr. Kissingers new world order. Are we still looking back in nostalgia . There are still many people who believe globalization is an automatic process. My point is that ideas and institutions matter, and those are changing rapidly, partly because the west itself has fallen out of love with globalization. Josephus with joseph stiglers discontent. How discontented are we within our grave new world . Stephen part of the difficulty is there is an attack on the institutions that help govern globalization, like the imf and world bank. The imf and world bank do not have the global reach they need to have to make the world a better place. They have also lost track of the chaotic capital flows we have few the course of the last years. Put those together and you have a weakness at the heart of global governance. Chaotic. Becomes pretty so life becomes pretty chaotic. Francine are the markets recognizing this grave new world . Stephen i think the markets are still happy pills, because they are dependent on low Interest Rates, qe, and so on. What you have are valuations rich indeed. Force that will become more important in the years ahead. Francine what does that mean . That at some point the markets realize we have a correction, or do the markets just follow Monetary Policy . These are huge shifts. Stephen part of the issue is Earnings Growth for u. S. Companies. The other big issue is the u. S. Economy is now in a very long upswing. Long upswings tend to eventually come to an end. The question is what happens in the event of another recession . What is the political reaction to that persistent weakness . See stephen king, some class officers in banking and commerce will read your book and say why should i invest . What are your thoughts, hsbcs thoughts on the animal spirit, the guts, it takes to invest . 1984 back to the comparison is you have other parts of the world are trying to pick up the slack in leadership. We sought from president xi in davos. Things like that silk Road Initiative in china the silk Belt Initiative in china. Tom lord stern of the London School of economics says we must know our longer history, and stephen king delivers. This is an early candidate for book of the summer, particularly those frustrated by International Relations. Stephen king of hsbc, thank you. We will continue with the news from 10 downing street on the tragedy of the terror attack in manchester. Just horrific. We are waiting for Prime Minister may right now. We continue with Stephen Roach in our next hour. Tom again, a terror attack. Manchester in the United Kingdom reeling from an attack. End of and at the Ariana Grande concert, and now, 22 people dead, including children. The Prime Minister is due to speak at number 10 downing street shortly. The pope and the president , after islam and the western wall, the president traveling to the vatican. This is bloomberg surveillance , live from our World Headquarters in new york. Here now is the president with the Palestinian Leader in a bit. A bit chaotic here through all of the morning. I believe you said the president has spoken with the Prime Minister, is that true . Francine yes. We president , i believe, will see images of the president shortly. At the same time, we are expecting theresa may to brief us. Attack, localter police are keeping details close for now. The incident is a reminder that intelligence sharing is also going to be part of brexit negotiations. We know from sean spicer that trump spoke with the Prime Minister of the u. K. , theresa may. He offered his condolences and weighed in on the attacks from israel, calling the culprits evil losers. Tom so much going on. Prime minister may with comments in a moment. We have the president in israel, where he will visit a holocaust museum. Right now, we go to manchester of professortise clausen. At this terror attack, is a possibly a lone wolf . What a society do about loan lone wolves . I do not believe this is what we call a lone wolf. A lone wolf is usually someone who has gone the idea and carried it out all by him or herself. Vest was a suicide involved, filled with shrapnel. It takes expertise to put Something Like that together. And we have, in most cases, seen a lone attacker, but we should not really think of these things as lone wolf attacks. Tom what would be the best societal response . Kingdom,e the united france, the United States, what is the best response from good society . Prof. Klausen to these types of attacks . Atht now, we are looking thousands of people in europe and probably hundreds in do not knownd we how many in the United States, but certainly far fewer people who already have been radicalized to the point of being willing to carry out attacks. At this point in time, it is a matter of police response. These are people who have been radicalized three to five years ago, typically. You may see assistance from someone who has returned from islamic state, someone who has gone together, learned how to together a suicide vest of this kind. Is we need toonse and just be alert brace ourselves to get through this. Jytte, i think we have to remind our viewers that this for the hallmarks of a suicide bombing. We know children are dead. But we do not have the identity of the perpetrator yet. We are looking at live pictures from downing street. This is where theresa may is addressing. We discuss the details and response to the appalling events in manchester of last night. Our thoughts and prayers are with the victims and families and friends of all of those affected. It is now e. On doubt that the people of manchester it is now beyond doubt that the people of manchester have fallen victim to a callous terror attack, attack that targeted some of the youngest of our society with cold calculation. This is one of the worst terror incidents we have ever experienced in the United Kingdom. And although it is not the first time in just a has suffered in this way, it is the worst attack although it is not the first time manchester has suffered in this way, it is the worst attack the city has seen. The police and Security Forces are working at speed to establish the complete picture, but i want to tell you what i can at this stage. Night, police were called to reports of an Manchester Arena in Manchester City center near victoria train station. We now know that a single terrorist detonated his improvised explosive device near one of the exits of the venue, deliberately choosing the time and place to cause maximum carnage and to kill and injure indiscriminately. Coincided with the conclusion of a pop concert, attended by many young families and groups of children. Areacts of terrorism cowardly attacks on innocent people. But this attack stands out for its appalling, sickening cowardice. Deliberately targeting innocent, enselesse def children and young people, who should have been enjoying their lives. As things stand, in addition to the attacker, 22 people have died, and 59 people have been injured. Those who were injured are being treated at a different hospitals across Greater Manchester. Many are being treated for life threatening conditions. Those know that among killed and injured were many children and young people. We struggle to comprehend the warped and twisted mind as hes a room packed that sees a room packed with Young Children not as an opportunity to cherish but an opportunity for carnage. But we can resolve to take on and defeat the ideology that often fuels this violence. Out to be turns others responsible for this attack, to seek them out and bring them to justice. Police and Security Services believe the attack was carried out by one man, but they now need to know if he acted alone or as part of a wider group. It will take some time to theblish the attacks, and investigation will continue. Police and Security Services will be given all of the resources they need to complete that task. Servicese and security believe they know the identity of the perpetrator, but at this stage of their investigation, we cannot confirm his name. The police and emergency as always, acted with great courage. On behalf of the country, i want to express our gratitude to them. They acted in accordance with the plans we have in place and the exercises they conduct to test those plans, and they performed with the utmost professionalism. 400 Police Officers were involved in the operation overnight, and many paramedics, doctors, and nurses have worked traumatic seema to care for the wounded. Resources have been deployed to the investigation, and a continued to be patrols around manchester, which include the deployment and there patrols around manchester, including the deployment of armed officers. Victoria station is closed and will remain closed while a isailed forensic search underway. We know many friends and relatives of people caught up in the attack are still trying to find out what has happened to their children, brothers and sisters, parents, and loved ones. Please, think of those people experiencing unimaginable worry, and if you have any information at all relating to the attack, please contact Greater Manchester police. Severe. At level remains i mean to a terrorist attack remains highly likely. But the independent joint terrorism analysis center, which sets the threat level based on the intelligence available to them, will continue to assess this throughout today and the days ahead. Later today, i will meet the chief constable of greater mayor ofr police, the Greater Manchester, and the members of Emergency Services who have come to manchesters eight aid. The general Election Campaign has been suspended. I will chair another meeting of cobra later today. At terrible moments like these, it is customary for leaders, politicians, and others to condemn the perpetrators and a clear the terrorists will not win. But the fact that we have been here before and the fact that we need to be here again does not make it any less true. While we experience the worst of humanity in manchester last night, we also saw the best. The cowardice of the attacker met the bravery of Emergency Services and the people of manchester. Metattempt to divide us countless acts of kindness that brought people closer together. In the days ahead, those must be the things we remember, the images we hold in our mind. Those must be the things we are a. The images we hold in our mind must be those who had their own safety aside and rushed to help. To the men and women of Emergency Services, who tirelessly worked to save lives. Of the messages of solidarity and hope of all of those who opened their homes to the victims. They are the images that embody the spirit of manchester and the spirit of britain. A spirit that, through years of conflict and terrorism, has never been broken and will never be broken. There will be difficult days ahead. We offer our thoughts and prayers to the family and friends of those affected. We offer our full support to the authorities, the emergency and Security Services as they go about their work. And we all every single one of us stand with the people of manchester in this terrible time. And today, let us remember those who died and let us celebrate those who helped, safe in the knowledge that the terrorists will never win. And our values, our country, and our way of life will always prevail. Francine the u. K. Prime minister there, theresa may, number 10, speaking of this horrific Manchester Attack, saying she and we will defeat the ideology behind the attack. She says she is being briefed minute by minute. There is also a cobra meeting. She believes there was a single terrorist in the suicide bomb attack specifically targeting children. She says a lot of the dead and injured our children because they were attending a pop concert of Ariana Grande. She says police at this time believe they know the attackers identity but they will not confirm it. Lets bring in svenja odonnell. You have been following this closely from the start. We were listening to theresa may addressing and making that statement. What did you make of her talent tone . Svenja the important thing is she set out the facts. Many people will have woken up to the scene this morning. There has been a lot of speculation. One of the important point she be resources will for police and counterterrorism units to respond. Because this has been an issue in the last couple of years in the u. K. , that Police Budgets have been cut. That we did not quite have enough terror officers and police on the ground. It follows a statement by the chief of police this morning who said ensured there would be more police in manchester and london. There is a big soccer final coming up, that they will be out. That they will be at. Was reassuring, that we are in control. Francine we are a couple of weeks away from the u. K. Election. Theresa may saying campaigning was suspended. Other parties are following. You can say Prime Minister theresa may is the countrys most experienced politician when it comes to terrorism because she was home secretary. Svenja she was the longest longestserving home secretary. She has dealt with these kind of issues for many years. This is territory she knows. One of the biggest issues will be intelligence sharing, which has been a contentious point in brexit negotiations. This will be something to focus on. Is intelligence sharing going to continue . Will a special deal have to be struck . Will yesterdays events change the tone . Tom svenja odonnell, thank you. Joining us now, Stephen Roach of Yale University. This occurs as mr. Netanyahu and in trump attend ceremonies the Holocaust Memorial in israel. Controversyen some about the length of time the president will stay at the memorial, but certainly, a most serious site with the serious trump family in attendance. Stephen roach with us. Once again, politics and International Relations in truth into our Global Economy. Talking to stephen king about this earlier, of hsbc. With your work with Morgan Stanley over the years and now yale, is the washington consensus being unraveled into something new . Stephen it is a fair question. The events in manchester are a grim reminder of the world spinning out of control politically, socially, and, i think, the economics of the World Economy are radically different post crisis than pre crisis. I heard some of the comments of stephen king, which i agree with. Whether it is political leaders or institutions, our ability to understand, to say nothing of the worldg politically, socially, and economically is in question. Back, as primens minister may addressed, the anarchists of another time and place. Anarchist issues were wrapped around our Global Economy. Why do we have a global subdued growth . Stephen the growth in the developed world is still running about one percentage point below its precrisis average. It is up a little bit, but it is still weak. Damage a lot of lasting from the crisis. The World Economy, as i wrote a few weeks ago, has been turned inside out in the aftermath of this crisis. The developing economies now account for 60 of world output. And the developed account for 40 . Precrisis, the numbers were reversed. Tom in terms of the length of wars, whether it is the war on religion, the wars of i look at the article in the new yorker on general mattis. In the middle of that article is the length of these wars of iraq and afghanistan. The economics you work on every day will be surrounded by perpetual war . Is that the norm . Stephen the norm is there is a lot of ongoing tension, and from political and social forces in the world. The Global Economy does not operate in a vacuum. One of the things we learned a long time ago as we cannot compartmentalize economics from social and clinical tensions. Yet, our models continue tend to do that. Tom Stephen Roach of Yale University with us on a day of news. Rdinary and tragic again, the president is expected to speak in israel. He will leave for rome and a meeting with the pope later this afternoon. Right now, a data check, very quickly. Futures up three. With Stephen Roach, stay with us. This is bloomberg. Francine this is bloomberg andeillance with francine tom from berlin and new york today. We just heard from Prime Minister theresa may, her statement following the attacks in manchester, saying many children are amongst the dead in manchester. She says the attack targeted children and families and said this is among the worst terrorist incidents we have experienced in the u. K. She will chair a segment cobra emergency meeting she will chair a second cobra emergency meeting, and then she will travel to manchester herself. Lets bring in gunther verheugen, a former European Union Vice President. This is a reminder that intelligence sharing is extremely important when it comes to brexit negotiations. Guenther it is a terrible even for terrorist parameters, is exceptionally evil. Belonginga feeling of to one community and family. It strengthens the argument that we need Close Corporation cooperation in order to meet the challenges of the 21st century. Terrorism is probably the worst challenge we have to deal with, and it requires a strong ability mutualerate, based on trust and confidence. I am confident we can prove this that it present state of play. Come togetherwe and form something Super National . Guenther that would be a solution, but we are far away from that. The present treaty would not allow such an institution. Of theow the level treaty, we can do a lot. We can create a kind of cooperation that fits the purpose. Francine how do you think the commission can streamline itself or reform itself, first of all together backing of the citizens, so they are stronger, but also to deal with these lone wolf attacks . Guenther it is not a matter of the commission. This is something that has to be decided by the leaders, the heads of state of government. I hope that our leaders, when they meet next time in the european council, will have it on the agenda and take it seriously. Francine will the commission and European Union Work Together with the u. S. Administration to eradicate terrorism . Guenther there is no choice. Whether we like it or not, whether we support everything the other side does or not, we have to cooperate. Whatever might be divisive, we are still the two regions in the which are leading. We have a close relationship. Most importantly, we are the two regions which share common values. We have to put those values together. Francine then we hear of these controversies, which we need to confirm, about memos and leaks. Europe lesst make likely to share information with u. S. Allies . Arether to be frank, there more sides of the atlantic. If you are speaking of leaks, there is no shortage of supply. We have to improve the situation on both sides. Tom right now, we go to israel and jerusalem. Here is the president. For hosting us for this moving wreathlaying ceremony. To honor the memory murdered in jews the holocaust. Two thirds of the jews in europe were sent to their death. Words can never describe the bottomless depth of that evil or the scope of the english anguish and distraction. It was the worlds darkest hour. Many millions of lives were extinguished as part of a systematic attempt to eliminate the jewish people. It was the most savage crime against god and his children. It is our solemn duty to remember, to mourn, to grieve, and to honor every single life that was so cruelly and viciously taken. As you leave these l as elie dead andid, for the the living, we must bear witness. The when we remember families who were torn apart from everyone they love, who suffer that terrible darkness and evil, who endured the unbearable horror of the holocaust, only then can we prevent this agony from ever repeating. Place and this entire nation are a testament to the unbreakable spirit of the jewish people. And the hope that light can shine a path beyond the darkness. Persecution, afresh and, oppression, death, and destruction, the jewish people have persevered. They have thrived. They have become so successful in so many places. And they have enlightened the world. The state of israel is a strong, enduring monument to the solemn pledge we repeat and affirm never again. From the the star of david waves proudly above this cherished th land. As long as we refuse to be silent in the face of evil, as long as we refuse to dim the light of truth in the midst of darkness, as long as we refuse to become bystanders to barbarity, then we know that goodness, peace, and justice will ultimately prevail. , the lives and dreams were stolen from this earth, with determination to always keep the memories of the victims alive, and to resolve to confront evil wherever it threatens. We ask god to give us the strength, wisdom, encourage to chart and courage to the righteous path. Thank you. God bless the memory of the perished. God bless the survivors. God bless the jewish people. And god bless the state of israel. Thank you for having me. Thank you. Tom the president of the United States with mr. Netanyahu in jerusalem with the ceremony and symbolism of the visit. Kevin cirilli is in jerusalem. In two hours, i believe you leave and the president rome. For room coul tell us about the distance traveled by the present. Kevin the president decided to take his First International trip to the middle east, deciding to visit saudi arabia, the heart of the arab and muslim world, and then fly directly to srael and jerusalem, where he just spoke. He looked to reset relations in the middle east hopefully really negotiate peace. Then it is off to the vatican city where he will meet with the pope. The first portion of his First International trip truly focusing on global religion, again trying to chart a new course as we heard him say to begin new negotiations of brokering a peace deal. With that said, there are many skeptics of this, particularly here in israel, as he has brought upon himself criticism, including from his time in saudi arabia. They were not necessarily all thrilled about that 400 billion deal he negotiated their here in israel, but they are satisfied for my reporting here on the ground with this trip. It has gone largely wellreceived in saudi arabia and here in israel. Tom you are with the president. Theh domestic issue has attention of the foreign travelers . Which part of the cacophony of washington is front and center for President Trump . The Washington Post bombshell report from overnight from the United States side regarding the nsa and whether or not President Trump had influence in their getting chatter among the White House Traveling press corps. I can tell you that this cacophony and badly of headlines is essentially on hold from White House Press secretary sean spicer, who has limited access in terms of being able to talk with Senior Administration officials. Reince priebus and steve bannon returned home. Next week, following the more i would day holiday, anticipate these headlines to resurface, particularly when now former fbi director james comey is set to testify. Tom six travels to the six travels t safe travels today. Return to Michael Rubin joining us on a budget that was presented may be quietly yesterday. Michael rubin, basically this budget is a political statement. Who on capitol hill wants to see this budget . Michael absolutely at this point no one does. There are a number of people across the partisan spectrum who basically will find things they very much dislike. In many ways, this is just the first warning shot that is being put out there to create a debate about the broader issue of government entitlements, of the social safety net, and whether success should be measured by terms of the number of people on the program or the people who get off the program. Tom lets look at a morning mustread from stan colander. You know him with his minute analysis and process on fiscal affairs. The trump 2018 fiscal budget is clearly designed to appeal to no one but the trump race. No budget resolution would prevent the use of the no filibuster reconciliation rules for tax reform. It may make a much more moderate budget resolution with far fewer , as an almost none, spending cuts the only way to move tax reform forward. Are we going to see a conventional budget, michael . Michael i do not think we will see a conventional budget. Look, the Trump Administration has thrown the traditional playbook out the window when it comes to the sort of thing. What we will have is a much broader, philosophical debate. Lets face it. Congressional republicans are not going to extend their loyalty to trump endlessly especially when he is so wounded on Security Issues and some of the scandals brewing and percolating right now. Tom the zeitgeist of the last three days is that these are bad people that need to go out and get job. We have got to get off this, get off that, and go get a job. How does that play in the washington of 2017 . Michael it may not play so well in the washington the 2017, but as you said, it is going to play among certain segments of trump space. And i in washington, d. C. Dont work in government. There is something to be said when government shuts down, no one works, and yet they end up getting paid at the end of the day fo. For those in the private sector, that sort of logic is infuriating. Its sort of like congress. Everyone hates congress broadly, but they want their congressman to support them. Everyone hatesfor those in the , that sort of logic is government programs, except for the ones they end up utilizing. Thats the sort of problem trump is going to face. Francine for our global audience, lets frame what we are talking about. We understand this proposal would dramatically reduce u. S. Governments role in society with 3. 6 trillion in spending cuts over the next 10 years. This budget would also claim to balance it within a decade. Who would benefit from that . It seems to me that it is trumps most to lose the the poor, recent College Graduates, and the farmers. Michael this is a certain irony of the whole trump issued. When it comes to who benefits, what trump is arguing as a businessman is that you have to have a balanced budget to survive in the long term, but youre absolutely right. Trump campaigned as a champion for the poor, and yet he is a billionaire. You have the sort of irony percolating through the system. That is why i say that the playbook is thrown out the window. Francine you can have a billionaire that still takes care of his base, but does this budget mean that his base will revolt or fall out of love with President Trump . Michael ultimately thats the question. I would suspect what trump is going to do is in a hypothetical world, this reform plan was actually implemented, this budget plan was actually implemented people love passion congress and trump might do that down the line, but when you have a fouryear presidency and youre presenting a 10 year budget, it is unrealistic at its face. Francine what he is also proposing is severe cuts to foreign aid. Does that weaken the u. S. Position in World Politics . Michael absolutely it could. Lets also face it. Foreign aid is something that should be examined. ,hen you have a lot of waste you want to go after it with a scalpel. You do not want to go after with an ax. That is what President Trump is going to be accused of. What people are going to ask is how can you have the implementation of all these foreign programs when you have not even appointed half the ambassadors you need to. Tom Dexter Filkins have that in his article last night on general mattis. Rubin, thank you with the American Enterprise institute. Stephen roach patiently waiting for us. You can use this bloomberg chart in your courses at Yale University. Ow about the percent of debt to gdp . Heres bush senior. Heres the clinton rather surplus. That we have got bush junior. Theres obama, up we go with a big increase up to 100 debt to gdp with mr. Trump. The constraints on the president are just enormous, arent they . Stephen as long as the Federal Reserve keeps Interest Rates extraordinarily low levels, the cost of servicing that debt is not problematic. If Interest Rates ever normalize, then we are in serious trouble. The trump plan, if you want to call it that, which i would not really venture to call this a plan in any way whatsoever, a rosyhe presumption of scenario returning to 3 average growth of in the next 10 years, which is close to impossible, he claims will balance the budget and bring the debt to gdp ratio down. That is not going to happen. Tom i saw two major houses yesterday or maybe over the last 48 hours capitulate to the Stephen Roach world. They took the rosy scenario of higher Interest Rates image is paired it back from what i think is the 1400 time. We just cant get to higher rates. Why cant we get back to normal rates . Stephen the economy is hoped on the drug hooked on the drug of excess liquidity provided by swollen centralbank balance sheets. An Interest Rates that are well below any semblance of the normality. Anytime you try to move the needle in getting rates tha back, the markets going to a funk and Central Banks are unwilling or unable to take on the markets. They have created a monster. It started with alan greenspan. We have an accent dependent, market dependent u. S. Economy. Its going to be very difficult to break that addiction. Francine stephen, talk to me a little about how the fed should look at the Trump Administration so far. We have the budget coming up. We see some of the tax reform and we have alace foreign trip that is also mired with these memos and leaks. How should the fed look at the economy Going Forward as shepherded by donald trump . Stephen the fed just goes into a standard drill of coming up with the baseline estimate of potential gdp growth, which it continues to believe the somewhere around 2 , which is a third slower than that which is built into the Trump Administration. It has to factor in some reasonable guesstimates on policy changes. The fed, i do not think, would be willing to buy the supplyside mumbojumbo of a tax cut that pays for itself. I think the fed would be looking for expanded budget deficits, which would be more stimulus coming from fiscal policy. That would make the fed more ratesed to lift interest back toward this ever elusive normalization trajectory. Tom Stephen Roach with us with the l university. Let me do a quick data check. Quite markets this morning. Sterling resilient to say the least, near 130. Crude oil taking a policy or. Pause here. From berlin and new york, this is bloomberg. Francine bloomberg surveillance with common francine. With tom and francine. Time for the morning mustread and this is from the ubs chairman. Take a listen to his view on the european economy. The ecb would be wise if by the end of this year they would start to scale back their support for the economy. The european economy is strong. You just saw the german data come out today. The european economy is doing well. I was in the netherlands where growth has been very strong, almost twice as strong as for many. I think the european economy is driven by consumption and sustainable developments and that is when you need to scale back Monetary Policy support. Francine lets get back to yale professor Stephen Roach. Do you believe that we should actually start normalizing Monetary Policy in europe and possibly the u. S. . Stephen i feel we should have been normalizing Monetary Policy a long time ago. The bottom line is we are getting growth in the developed still back to only 2 after over eight years of zero Interest Rates and record expansion of balance sheets. The traction in the real economy that was supposed to come from this unconventional monetary easing has not materialized. In Central Banks will tell you you shouldve seen how bad it would have been if we hadnt done that. Thats counterfactual i cannot be verified in any way whatsoever. What theyve done is that they allowed this excess liquidity to spill over into Financial Markets, boosting asset prices come which benefit primarily those on the upper end of the income distribution. The great irony of unconventional Monetary Policy is that it has become an instrument of mounting inequality in the global distribution. Tom if they raise rates, what happens to the markets . Stephen markets go down and they go down sharply for a while and then they find their bottom and then they begin to work their way back up, but under more normal configurations with respect to Interest Rates and centralbank balance sheets. You take the patient off the medicine. Tom a difficult withdrawal, but whats the alternative . You are always hooked on providing more drugs for the asset dependent economies. Francine stephen, thanks so much. Professor Stephen Roach of yell university. We did have some data earlier on from germany and france, signaling that the region here, europe, that recovery seems to be on track. U. K. Assets showing resilience in the wake of that suicide bomb in manchester. This is bloomberg. Francine we have a little bit of news from this terror attack that happened in manchester last night. We understand it killed 22 people at a concert by u. S. Iana grande. Eta we are being told the man has been arrested in connection with the terrorist attack. There is one suicide bomber tht died as the device was detonated. We understand a 23yearold male has been arrested in south manchester. That person was arrested in relation to the attack probe. We did hear from Prime Minister theresa may half an hour ago. She is the countrys most experienced politician when it comes to deal with terrorism. She suspended the campaign and said as the police understand, they have the identity of the possible suicide bomber, but its too early to release it. Tom we will be following this. We have seen this before to say the least. Francine lacqua in berlin and im tom keene in new york. We will try to get to esteemed mind to talk about the budget deficit. Lets bring up a chart that Michael Mckee knows and Stephen Roach knows as well. This is deficit to gdp come the basic idea of deficit for much of the last 30 to 40 years with the clinton surplus out there in the middle. Michael mckee, where is the optimal budget deficit . Michael ill think anyone knows where this. The government can run deficits as long as they are sustainable and continue to rise. The current debt to gdp ratio would rise to 89 over the next decade. Under the trump budget, it would fall to 56 , but that is because they will slash spending by so much. Stephen they will boost revenues by their hocuspocus on growth. Tom hocuspocus the cfa level four. [laughter] michael they are going to assume that congress will appropriate 500 some odd billion iraqrs to fight wars in and afghanistan and then assume the wars dont happen so they can count that money a savings. Tom im going to see if the cbo has scored the Health Care Plan yet. Does anybody score a budget . Does anybody score a trump proposal or rob portman proposal . Stephen thats a great question. Back in the 1970s, the Brookings Institution had a marvelous annual series called Setting National priorities written by Charlie Scholz and alice rivlin. We need more of this again. What this does is it cuts through all the various line items on the spending and revenue side and really comes at the core of what a budget is trying to accomplish in terms of establishing and setting the national priorities. You can look at this trump proposal through that lens and get a clear sense of the emphasis the president is placing on certain issues. And what he is overlooking in others. Thats the debate we need to have. Francine does the budget actually risk alienating trumps supporters . Stephen its hard to know what whatever alienate his base supporters. They dont seem to have a deep appreciation for a lot of the issues that we debate on shows like this or and Financial Markets. Its more about admiring the president for his disruptive ofp on the structure governance rather than on deeper issues. Tom we are going to come back and do more with Michael Mckee in the coming days on the budget as well. Stephen roach will continue with us on bloomberg rale radio. Let me do a Foreign Exchange report this morning. This is dollaryen. Im going to call a churning market all in all. I would note the erosion in the dxy over the last number of days. 199. 97. It is a grinding and weaker u. S. Dollar. Much of that against the euro and wrapped up with the spin of oil dynamics. Oil backup over 50 as well. I want you to stay with bloomberg across all of our media platformsmuch of today ase the president move from jerusalem to rome. We will continue the coverage of the terror attack in the United Kingdom. This is bloomberg. 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. 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. Jon a suicide bomber leaves 22 dead and 59 people injured. Has a trip to rome. A budget plan is unveiled with cuts over 10 years. Rises Business Confidence to the highest level since 1991. From new york city, our thoughts are with the people of manchester. I am Jonathan Ferro alongside david westin and alix steel. We will hear from the president of the United States, donald trump, from the israel museum. We turn to our top story. Britain is reeling from an attack last night, they killed 22 people at a concert. Children are among the dead. No one has claimed responsibility. We heard moments ago from theresa may