We heard from jay powell. We will hear from him again today. The eurodollar, 1. 1278. There is a lot going on, not only about trade. Official taxes that france will vote on. There is a mood on what happened to euro depending on what we get from the ecb minutes that will be released after midday. We will watch for that and any movement on currency. Coming up, we speak with the sao paulo governor, he is joao doria. Plus we will speak to sheriff brown about u. S. Politics. Lets get to the work first word news. Deutsche bank is now being probed u. S. Justice department as an expanded investigation. The u. S. Is reportedly taking a closer look at a former Goldman Sachs executive who later worked at the german bank. Authorities havent accused which a bank of wrongdoing. Another federal probe, the u. S. Investigating frances plan to tax tax giants. Socalled 301 investigation is the same tool donald trump used to impose tariffs on china. Korear japan nor south has much political incentive to climb down on their trade complex. Last week it escalated when tokyo moved to curve the export of the vitals to south koreas tech center. Tomorrow the two sides plan to meet. Hedge funds have seen the best first half of the year in a decade. The average Multistrategy Fund has gained 6 . The stand at stand out, said adele. And ck simcity blackrocks obsidian returning. The switch is now more affordable. Nintendo is releasing a smaller version called the switch light. It will cost about 200, 100 less than the original. Last year nintendo sold 17 million. Amazon starting with 1 trillion valuation again after posting a seven day winning streak. This todays close seeing its market cap rose to 993 billion, a gain of less than 1 would push it above the 10 figure mark. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Much. Ne thank you so fed chair jay powell has made it clear he is preparing to cut rates for the first time in a decade. No sign of overheating in the jobs market at home. Here are some highlights of his congressional testimony. The overall economy is performing well but we see what we call crosscurrents, principally trade developments and concerns over Global Growth. E see those many participants saw those as weighing on the outlook and calling for possibly more accommodative policy. 3. 7 is in low is a low on up limit rate. To call something hot, we need to see some heat. We see a lot of reports of companies having a hard time finding qualified labor. Nonetheless, we dont see wages responding. I dont see that as a current issue. The bottom line for me is the uncertainties on Global Growth and trade continue to look at the outlook, and inflation continues to be muted. Those things are still in place it i said what i intended to say on the subject and what i have me ais the law gives fouryear term and i intend to serve it. Francine s p 500 above 3000 for the first time ever. Joining us is mark burgess. Columbia threadneedle has more than 459 billion in assets under his management. Mark, always great to have you on the program. Seems like a done deal for the fed. Are they bark stand by the market . Are they boxed in by the market . Mark inflation is pretty nonexistent. Growth is slowing globally. Trade talks weigh heavily. The irony is much of the trade of uncertainty. To usk that does lead going into lower Interest Rates. He is very concerned about the future. Yes, there is room for cutting rates. Francine he is using firepower to cut more than expected . How would you describe the economy right now . Is it the beginning of something ugly . Left from the language he has used, he has left himself opened to a 50 basis point cut. I dont think that is necessary. Francine let me bring you to the s p which is a great chart. We put in some of the averages and record highs. This comes five years after the how much higher can this go . Mark the u. S. Equity market looks fully valued. By some measures, it looks ok. Given theres a lot of Growth Stocks in the u. S. Equity market. I think the other thing we need to remember is youve got the trump running for president again for the second term. He is very focused on the economy. Having a strong u. S. Economy will underpin his bid for a second term. I think he will do what he can to make sure the economy isnt good shape and the stock market is in good shape. Chartne this is another looking at the june inflation. Report for jobs. Mean a policy mistake . Because we are not seeing that much inflation, it wouldnt do much . Do you worry that they need to reverse it . Mark all investors are keeping a very close eye on inflation. There really is no signs of an uptick. I dont know if that is due to technology or demographics but inflation is pretty nonexistent. Francine i have another chart. I am like on fire. I will bring it in a second. Where do you worry we will be badly surprised by . Mark we could get badly politicians are where we are most concerned. Policy mistake is the key risk for markets. Francine markets are struggling to miss price. The impact it has on the economy. This is a chart i want to show you. Looking at the disappointing economic reports in the u. S. And globally. Mark i dont think Monetary Policy is in a place where we will see a surprise. It is something that will fall down to the trade talks. Escalation between china and the u. S. Francine mark, thank you so much. He stays with us. Markets price in a rate cut from the fed. How will mario draghi respond. We will look ahead. The latest from the gulf as tensions rise between iran and the u. K. Later we will focus on south americas biggest economy, brazil. Domestic our interview with the governor of sao paulo, joao at 9 30 u. K. Time. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. I am Francine Lacqua. Lets get to Bloomberg Business flash in new york city. The ceo of Norwegian Air shuttle calling it quits just as a turnaround plans start to take whole. Stepke hold he wanted to down after leaving norwegians rapid expansion. The Airlines ReportedSecond Quarter earnings soared 6 . More news about the biggest ipo , avme year, agee and beth bear it is offering 1. 6 billion shares between 40 and 47 hong kong dollars, about 5. 1 t six u. S. Dollars apiece. That is the Bloomberg Business flash. Francine lets keep you uptodate with news from the middle east, the british navy has intervened to stop iran from carry oil the ship can as much as 1 million of one Million Barrels of oil. Track all of these vessels by using our bloomberg terminal. Riad hamade. The main source of information is from the british avernment which is saying three training vessels tried to impede the british tanker and that the royal navy shipped intervened and warned those vessels to get out of the way and they did. That is what we know. We also know the tanker is now through and as past. And has passed. Incident should be seen in the context of the spat between iran and britain over an Iranian Oil Tanker which was held by the British Authority in gibraltar on suspicion it is delivering oil to syria. Francine what are the wider implications . The wider implications is, it is another it is a complicating factor in that the iranian spat with the british which the british arguing should not be confused with the argument over the Nuclear Accord which was kind of dominant on the iranian minds. They are trying to say, ok, this argument of the iranian tanker is limited to sanctions on syria. The rains see it in the wider the iranians seated in the wider context. Prevent iran from selling its oil and hurting the iranian economy. They are showing and threatening in a way saying, if the u. S. Puts pressure on us and you are not willing to do anything to stop the american sanctions from having an impact on us, then we have our own way of retaliating. Francine thank you so much. Europe and on investors will scour todays minutes of the june meeting to see how strong was the push for more easing and how great are the chances for change this month . Aro draghi virtually gave the mario draghi virtually gave the game away. Mark burgess is still with us. First of all, the question is if the stimulus under president draghi, does it make a difference for markets . Mark i dont think it does. The key issue is what they actually do. For us, looking at the data, the interesting thing is European Growth is soft. It has been soft for a while. It doesnt appear to be deteriorating. I dont know if draghi has been seeing something that we havent seen. There has been an uptick to european industrials. I wonder if that is a signal he is focusing on. After that, nothing seems to be deteriorating. Francine this they were saying was partly policy, partly the trade concerns. How much is it the trade fault . Mark i think it is a range of issues. Trade with china is a big issue for many companies. , i dont think things have gotten worse. Francine what is the question you get most by clients . Is it about negative rates . Mark at think they have gotten used to negative rates. Clients are concerned about geopolitics, brexit. They want to know how we are going to navigate that. They want to understand what the means. Tions of trump francine does your mandate change at all . Mandatethink the doesnt change. The way you apply risk has to change because it is less for castable. Forecastable. You cannot predict it in the way you predict other things. Francine for the ecb, the markets keep on testing whether they have enough tools. You worry about the ecb if there is a downturn . We are not seeing it now. They dont have the firepower to deal with it. That if there is something would worry me, it would be the the sectors not Banking System in europe is key to lending into the real economy. It doesnt act like the u. S. Economy does. Funded. S in europe are if the Interest Rate environment positivityport bank i dont see how negative rates can help that. Francine i was going to say what is the solution for that question mark mark i dont know. For europe to move over we need to see a better Banking System. Everything we see is counter to that. Francine mark burgess stays with us. Deutsche bank confronts more essential problems. It now faces an investigation is a part of the u. S. Justice departments probe. More on that next. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua. Lets get the latest on the trouble facing germanys biggest bench. Deutsche bank is likely to face an investigation from the u. S. State department as a part of malaysias probe. Dr. Cut ties with Jeffrey Epstein as authorities were waiting to charge joining us is nicholas comforts. Why is Deutsche Bank now a part of this probe . One of the employees that came from goldman that went to deutsches that basically could have been a link. Precisely. The goldman employee that moved onto Deutsche Bank and also this business relationship continued with the 1mdb. It is important to note that either the bank nor the individual has been accused of wrongdoing at this stage but obviously the u. S. Will be interested in seeing whether Deutsche Bank did indeed do everything that needed to be done. Properly. Pervised Deutsche Bank says, look at the files he has already made public. They clearly state that Deutsche Bank was used by 1mdb on this. Is doj ishe boj looking to see if theres anything more to it. Francine we will have plenty more from nick and a connection. Comforts. Olas lets go back to mark burgess. The question we were trying to answer is are we going to have more consolidation . Is that a catalyst for solutions . Will it create more problems in the Banking Sector . Bank on thatto route unsuccessfully. There is so much uncertainty around the balance sheets. Sure what you are putting together. Investors were being nervous about bad bank and a bad bank coming together. Francine do you need to raise capital . Mark there is no question which needs more capital. At the moment investors, theres too much uncertainty. The questions facing Deutsche Bank are candy execute this restructuring . Can i get cost down at a faster rate . When they get to the point, does that business makes sense from a neck and three respect from an Equity Perspective . The investors do not believe that at the moment. Francine mark, thank you so much. He stays with us. South americas biggest economy struggles to get its growth back on track, the governor of sao paulo joins us here in london for an interview. That is coming up next. This is bloomberg. We will have plenty more on euro markets. Jay powell giving strong signals to the market about what he is doing. Looking in front of the other movers. The pound is moving. Dollar is weakening as treasuries rising and the rate cut fats rate cut fence are mounting. This is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Francine a sure thing. Jay powell signals a cut is coming this month as economic concerns mount. Rising tensions as britain intervenes to stop irans blocking of a tanker in the persian gulf. Deutsche bank in the crosshairs. Investigators probe the lenders involvement the latest 1mdb event. In morning everyone. Good afternoon if youre watching from asia. This is bloomberg surveillance. I am Francine Lacqua. Lets check in on what is moving in the markets. We are seeing u. K. Homebuilders doing well across the board. One of them is barrett, up 1. 3 . There are new homebuyers coming into the u. K. Market for the First Time Since 2016 even with the uncertainties. They are seeming more confident and more reliability and people buying homes. The Consumer Goods Company also railing this morning come up about 2. 6 . This is after they settled in opioid case. Shares rallying. The idea is doj overhang and they are settling for 1. 4 million. The swiss company, shares dropping 4 . They had downgrades saying it is not necessarily overall weakness. Momentum showing after the shares gained. The company has a lot of fx headwinds. Thank you so much, dani burger. Lets get to the bloomberg first word news. The Federal Reserve is getting ready to cut Interest Rates for the first time in a decade. It sees a cooling Global Economy and weak manufacturing around the world. Speaking in testimony to the u. S. Congress, Jerome Powell says the strong jobs report didnt change that you. The bottom line for me is the uncertainties around the Global Growth and trade continue to weigh on the outlook, in addition, inflation continues to be muted. Those things are still in place. The u. K. Confirming an incident with iran. It said three vessels tried to impede passage of a tanker. Causing intervention from the royal navy. Semi the night a confrontation. Is europeanne commission president. She has yet to win over a sizable number of socialist to get a majority. This roadblock highlighting the risk that parliament might veto this slate of nominations. Ryanair is warning extended grounding might hit its growth plans. Push for a specific date for the planned return to surface. He says boeing is indicating the max should fly again by the end of september. If it gets much beyond tember, staying with the aircraft story, we were able to speak with iag chief executive. He was optimistic about the max prospectsh sex for returning to the skies. When it comes back into service. Inspected i think the most inspected aircraft. I have no i. D. The have no the issues have been identified. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine lets focus on south americas fixed economy. Forecasters expect the brazil gdp to expand more than 1 this year after two years of weak growth. Government boost the economy and return brazil to its story . Story . Global he is known for hosting the brazilian version of the apprentice. Welcome to bloomberg. Im delighted to be joined by a former Central Bank President of brazil. Us onyou both for joining bloomberg surveillance. Mr. Doria, talk to me about the economy. We are expecting the economy to expand less than 1 after two years of weak growth. How did you get back on track . Joao working hard. Especially sao paulo. Probably 20 to 25 over the brazilian growth and sao paulo is the largest date of brazil. The largest economy of south america. Argentina, than chile and peru and colombia. We have the strongest position in south america and also are doing in Great Britain to convince investors to go to sao paulo and make new investments in our industry and our science and technology sector. Francine missed an array us when you look at the challenges of the brazilian economy, what are the main obstacles for growth . Today, Social Security. The good news here Social Security is being approved. Important point looking forward.