Alix even President Trump took to twitter to congratulate the team, versus a couple days ago, when one of the women said we are not going to the white house, and he said why dont you win first. Now apparently very proud. David it was a great game. The u. S. Was really taking it to the netherland for the first half, but they kept it up in the second half. Alix go team usa. In the markets, you have powell coming out in the next couple of days. Drive up Market Reaction for this week. Eurodollar lower by 1 10 of 1 . The dollar getting a little bit of steam in the last 20 minutes of trading. Crude also quiet. It is a quiet market with idiosyncratic events turkey, like Deutsche Bank. David what a nice word to use. Alix right . David idiosyncratic. Time now for the morning brief. Today, British Conservative Party members mail in their votes for the next Prime Minister, widely expected to be Boris Johnson. On tuesday, the Allen Company conference gets underway in sudden valley. We also get chinese cpi and ppi numbers. Wednesday, fed chairman jay powell begins two days of congressional testimony on fed policy and releases minutes from his most recent fomc meeting. Alix time now for bloomberg first take. We are joined by Gina Martin Adams and marty schenker. Our top story is Deutsche Bank and the restructuring there. A huge revamp, from cutting about 1 5 of its workforce, restructuring its business. Is this enough to save the bank . Gina its a good question. Analysts are naturally going to be quite skeptical. This is years of attempted changes at deutsches. There was a failed merger earlier this year. The long term outlook is slower roe growth than the rest of the sector, even with changes. I think analysts are naturally skeptical. What are we going to get out of this . How far is it going to go . Is searching for guilt, so cutting the dividend is also going to cut the outlook for this group that is still pretty depressed, so theres not a lot to be excited about. I think you have to see these changes implemented and see real results before analysts get on board. David they had no choice. They had to do something pretty dramatic, it was clear. The question is, will they make more money doing this . They will save money, but will they make more money . Think about it, this is back to boring banking. It is taking deposits and providing customer service. That is where Deutsche Bank is going. Is it highly profitable . No. Is it safer then where theyve been . For certain it is. But what kind of bank is it really going to be . Just a to domestic consumer bank, basically. Alix to this point, all of the analysts are saying shortterm, this is a good positive. David theres a lot of regulators that said that is what you should get back to. Alix and now they have the job cuts to come with it. Marty we just published a story that people getting their severance notices and leaving the london headquarters in tears , so theres a human toll to this, too. Alix so where did they go . What area of the banking world can absorb either the market share, the clients, the people who lost their jobs . Gina it is tough. Yields are suppressed around the world. Where is the growth . It is a huge question for the Financial Sector at large, but in financial terms it is clear there are stronger Growth Prospects in asia and the. U. S. Than europe. You cant say it is and the u. S. Than europe. You cant say it is extraordinarily strong, but at least there is growth. Theres much stronger topline growth than in europe. Thats one of the reasons why u. S. Financials have outperformed over time. Are you going to get superstrong job growth that absorbs all of this excess labor . It doesnt seem likely this late in the cycle. Thats where the human toll is going to be relatively high, provided that deutsches is successful at cutting as many jobs as they suggest. This is another question mark. How many jobs will they be able to cut, especially in germany . David theres one job back in the United States that appears to be on the line, and that is jay powells as president of the as chairman of the fed. Pres. Trump if we had a fed that would lower Interest Rates, we would be like a rocketship. But we are paying a lot of interest, and its unnecessary. But we dont have a fed that knows what they are doing, so it is one of those little things. David rumors continue that the president is really considering moving jay powell aside, something that has never been done. Marty no mind there is some question about the legality of doing that. The fed has made it clear through its spokesperson and jay powell himself that he intends to serve out his four years. I think that if donald trump were to try to do that, there would be a legal challenge to prevent him from doing it. David it hasnt made him hesitate so far on immigration control, on issue after issue. Hes got somebody lawsuits going, you cant even count them. Marty and this might be one of them. What hes really done is create an environment where if the economy stays strong and the stock market is high, he can take credit for it. If it doesnt, he can blame jay powell. Alix does he have a point . You saw good jobs growth friday, but wages remain stuck. Gina i think its a 5050 right now. Frankly, the s p 500 is a rocketship. If you look at last weeks gains, we are at alltime highs again. Part of the reason for that is the premise or notion that we are going to have much easier Monetary Policy going forward, with the consistent stability of economic growth. Frankly, i believe the fed is going to have to really balance for the july meeting pretty stable Economic Conditions in the later stages of an economic cycle. They would like to reserve some firepower for a true deterioration in economic growth. Then you have the president swooping in, trying to change their mind, which only incentivizes them to make sure they state their independence quite clearly. So it is a really questionable what is going to happen in the july meeting. Tothe interim, youre going see earnings come in for s p 500 companies in a pretty depressed state, which is going to increase the need for some sort of insurance cut in july. But it is a relatively tenuous relationship right now because the Economic Data is not horrible. Frankly, rates are still very low relative to history. Alix lets talk about the third story, which is turkish president erdogan firing the central bank chief. You can see what happened here. Lira knocked down. Equities knocked down. Actuallyly hire higher. Is this like President Trumps dream . Marty it may be his dream, but this hold notion of air to gone of erdoganian theory that high Interest Rates because inflation and low Interest Rates keep inflation down is rather unique. I dont know that donald trump has that kind of economic footing for his comments about powell, but certainly erdogan is not letting anything stand in his way of getting what he wants. David is this idiosyncratic, or does it read through to emerging markets more broadly . Gina i think it is more idiosyncratic. I think it is very specific to turkey. There doesnt seem to be this conflict between Global Leaders policymakers and Monetary Policy makers and the rest of the world. But you do tend to see when one emergingmarket struggles, you tend to see the feedback through emergingmarket assets. I wouldnt be surprised to see emerging markets take a step back. Broadly this is not a testament step back broadly. Theres intensive correlations between the groups within emerging markets to dismiss it altogether. Alix and you get fired now if you disagree with that Monetary Policy. Gina martin adams and marty schenker, thanks a lot. Great to see you. You can find all the charts we just used and more if you go to gtv on your terminal. Browse the features, check it out. Coming up, more on Deutsche Banks radical overhaul. This is bloomberg. Viviana this is bloomberg daybreak. The Saudi ArabianBudget Airline begin the first carrier to officially drop in order for boeings troubled 737 max 8. It reversed in order to buy as many as 50 of the jet. It will now fly only airbus planes. In march, the plane wasnt grounded was grounded after two fatal crashes. Broadcom secured funding for its acquisition of financi of finance tech. To china now, where the Venture Capital bloom shows signs of turning into a bust. The value of deals there plunged 75 in the second quarter. The venture boom began in 2014, when alibaba went public in the largest ever ipo. That year, chinese venture deals tripled. That is your Bloomberg Business flash. Alix thank you so much. The banking bombshell. Deutsche bank will undergo one of the most radical overhauls since the financial crisis in its latest turnaround plan. , andll cut 18,000 jobs quit its equity sales and trading business. We are taking the decision to retrench and step back from elements of our Global Markets franchise, and particular equity sales and trading. That is a significant step in rearranging the bank. Alix that is the cfo of Deutsche Bank speaking with bloomberg. Joining us is David Sowerby, anc ora managing director and sonja. Io manager, and is it going to be enough to grow revenue . Guest i think currently the, the question is not whether it is going to be enough. The Current Situation is that the measures are taking place from a position of a certain weakness in a backdrop of weakening Economic Activity and lower rate environment, so overall the circumstances probably will make it somewhat challenging. , the measures announced were needed to refocus businessesd focus on where Deutsche Bank does have strength. David it is clear from the announced changes that they are going to cut costs and save money that way. Is it clear in your analysis that they will be able to hold the top line . You cant make more money unless you keep revenue in, despite the fact you keep cutting costs. It depends a little bit. Obviously there are certain sections that will be exited, and presumably because they were less making, so it is not all about the revenues. It is also about profitability of the business. Bank perceivese that they do have certain core strength in which they want to invest, but i think at this point it is too early to see how Revenue Growth materializes. We do have an economic environment which is not really conducive to strong Revenue Growth, so it would be more about market share gains in some areas, and it remains to be seen how Customer Confidence is still there. Alix part of it is a sinner capital buffer is a thinner capital buffer. You think that is enough to make them not have to go back and raise capital in the market . ,onja from our understanding there are multiple factors happening simultaneously. On one side, the business divestitures are supposed to make the bank less risky. It should rely less on variable thenue streams, and overall Balance Sheet will shrink taylor will shrink. At the same time, it is our therstanding that restructuring unit in which the essence the assets are stored will be winding down. At the moment, it does not appear that there is a significant deterioration in capital levels, but nonetheless, it is something which very much depends on the way it is going to be executed, which we will be watching. David how much of this is Deutsche Bank, and how much is a broader issue with european banks . I have a chart here that shows the ratio. The blue line is average for european banks. The white line is Deutsche Bank, down under . 25 on the dollar. David s it is a story of lower lows on a secular basis. What you bank the last five years has compounded 22 to investors. Not to take it to the home turf, but this index is barometer the last five years. I am starting to nudge up bank holdings, but it is domestic. It is jp morgan, citizens financial, and to get very territorial, allied financial used to be mostly autos, but they are moving into nonauto banking. They are growing their deposits. Great loan portfolio, right type of growth on the digital business. I think you want to be upping your banks on the domestic side. Alix how do you do that when the 210 spread is still at 16 basis points . David s i could forever not want to own the banks because of the basis on the yield curve, but if i look at the margin, the economy will get a little bit better on the lower Interest Rates. I think banks hopefully have still more sensibility when it comes to the Regulatory Environment. Is the valuations on a spread basis are so compelling that it makes you want to nudge up your financial waiting. For the beleaguered Value Investor in the last five years, it is starting to become a much more compelling story. David w interesting. Sonja forster, thank you for joining us. David sowerby will be staying with us. Coming up come turkish lira weakens after president erdogan surprises with the ouster of the central bank chief. More next. This is bloomberg. David w turkish president erdogan stunned markets over the weekend by firing the head of the central bank because he had not cut Interest Rates in accordance with government policy. We welcome now bloombergs riad hamade. Weve been hearing about his displeasure with Interest Rates. Why now . Why did he move now . Reporter i suspect he wanted to wait until after the election, which ultimately he lost, so there is a new mayor of istanbul from the opposition. Expeditionere is that the central bank would cut rates. The inflation rate has been coming down, so since the central bank stood its ground ,nd decided not to cut rates that seems to have really annoyed president erdogan, and he decided to make a move to put somebody in place that he believes will, as you mentioned earlier, told the line of government policy. David w putting aside for a thent the independence of central bank, is it possible that president erdogan is right . I will put up chart that shows a spike in real rates. Point in thea sense that real rates are at the highest in the world, and inflation has come down. Has beenous governor criticized for moving too late, so he had to increase Interest Rates more than possibly would have been necessary had he moved earlier. Theink the governor took decision to wait a bit longer and get more evidence of inflation slowing, and to give the lira more opportunity to recover some of the losses its had. The lira had been doing quite well so far this year. Now you have president here making this move, which makes it really hard for the new governor when he will lower Interest Rates, as everyone had expected anyway, to argue he is doing that because of policy reasons rather than because hes giving into pressure from president erdogan. David w thank you so much. Thats our colleague riad hamade from dubai. Thestors have been hit by turkish moves, but also by the chance of a rate cut. With us still is David Sowerby of ancora. How do you look at this . There is a place for emergingmarket stocks, a ratio to u. S. I think emerging markets have the potential to outperform u. S. Markets by 1 to 2 . You just have to stomach the volatility that comes along with it. On a valuation and growth basis, emerging markets deserve a place in our portfolios. Im not so sure about developed markets outside the u. S. Alix where in e. M. . David s that i think is the tougher question. In the case of turkey, 14 1. 5 toment rate, gdp 2 . It is simple to say asia, china, far east. Thats the places where the growth rates are favorable. Countries made start seeing a turnaround in fiscal policies that could be pockets of south america. Alix coming up, the market sees a smaller fed cut in july after fridays blowout jobs number. We are going to discuss expectations with prime bridge investment with pine bridge investments chief economist. Gain was 22 basis points, a lot of nothing. Markets softer, but not a whole lot of movement. We are really waiting for fed chair jay powell to testify before the house and senate this week. This is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Alix this is bloomberg daybreak. If you like most markets are taking a pause today, except for idiosyncratic factors filtering through. European stocks trying to eke out a game, but not looking successful. European banks down by 3 10 of 1 . Still more questions about Capital Raising for Deutsche Bank. In other Asset Classes, it was a weaker dollar story, now a mixed dollar story. The big movers in emerging markets with the lira, the dollar up by over 1. 5 . Some saying it could have been worse as president erdogan removes