Shares in Germanys Thyssenkrupp surge after theyre set to buy them. They go wild for hasboros purchase of pep pa pig at a huge premium. And g7 leaders prepare to meet in france with the summit unlikely to end with a formal communique for the first time in its 44 year history fed chair Jerome Powell is set to address the group at jackson hole later on today. The fomc minutes released this week showed members remained divided over a decision to lower rates by a quarter percentage point but policy makers agreed that the move should not be seen as a signal that rates are on a preset course. Now this morning in europe were seeing stocks move higher as investors await this key speech from the Federal Reserve chairman at jackson hole we have the ftse 100 up 0. 6 the dax up a third of a percentage point and the cac and the italian index also moving higher and in italy were all watching Political Developments there. The president has given the Political Parties until tuesday to try to get together a coalition. Were a little bit in wait and see mode when it comes to italian politics lets look at european yields. At the margin more hawkish than the market expected. This has driven a move higher in yields german bund has risen to the higher level since the beginning of the month quite a move in the yield space. Now in terms of fresh comments from the Federal Reserve, the Kansas City Fed president and Philadelphia Fed president told cnbc they dont see the case for additional cuts. My sense was it wasnt required in my view. With the low Unemployment Rate and wages rising and the inflation rate staying close to the feds target were in a good place relative to the mandates that were asked to achieve. I didnt think it was appropriate necessarily but i went along with it to get to neutral but im on hold. My forecast is to hold where we are. One of the reasons is that we run the risk of creating too much leverage in the economy meanwhile the dallas fed president told cnbc he would like to steer clear of the cuts but would remain open minded. Part of this job is to be forward looking and theres a Risk Management part of the job and i want to take all the time between now and september to assess how the economy is acting and id like to avoid having to take further action. But im going to have an open mind about taking action over at least the next month of numbers if we need to and for me the global the global yield but particularly the u. S. Yield curve, im less obsessed with the 2 to 10 and movements back and forth and more focused on the fact that the whole curve has moved down over the last months and the Feds Fund Rate at 2. 25 is now above every rate along the curve which to me is a reality check that says its possible our Monetary Policy stays tighter than i would have thought three or four months ago. The dollar index was down you can see its now stronger. The euro there weaker against the dollar this morning and sterling losing some of the ground it gained yesterday on the back of the meetings between Boris Johnson and Angela Merkel and then emanuel macron in paris. Some of the more hawkish language may have given more investors hope when it came to the future of the European Banking sector. Thank you for painting the pictures of what were looking at in markets this morning thank you for joining us this morning. So a big day in jackson hole everybody is keeping a close eye on Jerome Powell hes in a pretty difficult position and he may not know what comes next for rates and likely wont want to say anything to lock himself in. So is there anything that he could say today thats going to be dovish enough for the markets to actually react well no. Sorry i should expand on that but its right its going to be very hard for powell to be as dovish as the market has been. The minutes clearly showed that it is a divided committee. We have heard those comments from hawkish members of the committee which have actually done powell a little bit of a favor in the run up. A little bit of the market taking the rate cuts and priced out of what he will be concerned about avoiding is a further inversion of the treasury yield curve. Thats something which clearly is a source of concern and referencing the flatness of the yield curve. But it suggests the fed shouldnt be on simple rate cuts major easing cycle hes in a very difficult position because the other thing he has on his back is President Trump and the pressure coming from trump is even louder. Hes been addiment that he is immune to the political pressure hes acting independently. I want to come back to the data. Yesterday we got fresh data on the manufacturing side of things the u. S. Manufacturing pmi showing a contraction for the first time in almost a decade on the Services Side of things which has been the robust part of the u. S. Economy in line with the strong u. S. Consumer nearly stalled we saw that come in above the 50 mark so it did come down and the growth is slowing in that part of the economy how worried are you about the fundamental strength of the u. S. Economy . Its more akin to 2015 and 16 where we again saw a slow down in Global Growth which was lead by manufacturing and at that time particularly the commodity sector thats important in the u. S. Especially if you look at retail sales and look at Household Finances were seeing an increase in Mortgage Rates has come down as well and putting money into household pockets clearly manufacturing globally including the u. S. Struggling against the backdrop of uncertainty slow in china and Global Growth but i dont think yet we should be ringing the alarm bells and this is where i think the market has got ahead of itself at least in terms of the United States and pricing in about 100 basis points of rate cuts between now and this time next year. You talk about the consumer one of the efforts put forward by Central Banks is when they revert to an easing cycle like they have over the last few months and certainly the language is trying to encourage investors to take on a bit more risk and yet, what we have seen is a lot of investors. Arguably the safest assets out there. How can Central Banks try to steer them away from that . Youre absolutely youre highlighting the dilemma part of the concern i have right now. Central banks are trying to force investors to take more risk and reduce the cost of capital without equity markets or in Credit Investors arent doing that. Theyre buying more and more duration which is driving yields down in order to actually hedge their growth sensitives risk assets and a key reason for that particularly in europe is investors are skeptical that more rate cuts and more qe is actually going to do the job governments need to spend more money and hey germany and hey netherlands. How could this go wrong for some of these investors that made these decisions for a long duration, do you think well, i think if we do, as i think we will get a stabilization in Global Growth obviously theres uncertainties around that particularly with u. S. Trade policy, in light of the easing that we already had that i think you can get some repricing of u. S. Rates and also of global bonds and it doesnt take weights and you see it move higher and if youre holding a bond thats yielding zero and its a ten year bund giving you minus 60 basis points theres no cushion there in terms of offsetting the losses that youre going to incur as a result of higher rates. Thank you very much david for weighing in. Stick around plenty more to chat about. David reilly, chief investment strategist well continue our coverage from jackson hole later today when our u. S. Colleagues speak to more fed president s as well as to the imf chief economists and bank of England Governor Mark carney the economist that first made the link between the yield curve inversion and recession could hit sooner than expected head online for the full story in Corporate News this morning, thys serks thyssenkrupp is in talks to buy kloeckner. The german industrial book is also working to sell its elevators business. Hasboro is to buy the u. K. Listed studio that produces the peppa pig franchise. Theyll pay 4 billion in cash at 5 pounds 60 pence a share u. S. Giant said the acquisition is part of the strategy to add new family brands that will help deliver higher toy sales and coming up on the show with one week to go before the new u. S. Tariffs on beijing kick in, well be live from chinas industrial south do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. A lot of folks ask me why their dishwasher doesnt get everything clean. I tell them, it may be your detergent. Thats why more dishwasher brands recommend cascade platinum. Its speciallydesigned with the soaking, scrubbing and rinsing built right in. Cascade platinums unique actionpacs dissolve quickly. To remove stuckon food. For sparklingclean dishes, the first time. Choose the detergent that lets your dishwasher do the dishes cascade platinum. The number one recommended brand in north america. Welcome back to the program. Huawei says revenues from its Smart Devices will take a 10 billion hit this year but the sales are much better than they initially feared they would be the chinese tech giant continues to battle the white house as part of the trade war with beijing and they announced the roll out of a new Artificial Intelligence chip called asend 910. It will be available in the u. K. President trumps top economic adviser claims the u. S. And china will still hold face to face trade talks next month despite washingtons plan to impose new tariffs on the first of September Larry kudlow cited a constructive Conference Call this week. He says he expects the chinese team will travel to the u. S. For further meetings now with a week to go before the new tariffs take effect, our colleague has been reporting on the supply chain impact and joins us now from chinas industrial south. Thanks so much. Well, you mentioned President Trump. President trump had said that American Companies have been pulling their supply chains out of china well, we found out that that is not as easy as you might think with new tariffs just days away American Business man is in china looking for suppliers anyway the truth is eunice, right now, there isnt another alternative for us. He helps run a michigan based start up that specializes in industrial lighting. The company was hit with 25 tariffs in may and expects more products to be struck on september 1st. That pushed him to explore other countries to source his goods but none could match china. Factories like this are the only ones and often times the entire supply chain of a product is here. Those advantages have helped this supplier shrug off the u. S. Tariffs. Singapore owned aztec has been manufacturing in china for 25 years. Any additional cost so thats a lot. So then you dont split the costs. We dont. Have your orders from the u. S. Gone down because of the tariffs . No. In fact, we see another increase. But that means he and his start up have to contend with the extra cost and uncertainty of the trade war the tariffs are concerning not only for the impact and the cost in pricing today but also in our planning going forward. Is there another tariff . Will there be more levels . How does that impact our positioning in the marketplace that is critical to us. And for many other American Businesses too it doesnt quite there yet comments made by the german chancellor Angela Merkel that suggested that britain could have until october 31st to find an alternative to the irish backstop on wednesday merkel told Boris Johnson the u. K. Could have just a month to resolve the issue but yesterday, merkel clarified that point and said it was intended to highlight the urgency of the situation. The comments followed french president emanuel macrons decision to take a tougher stance after his own talks with johnson in bar risk. And key elements are not just technical constraints but a genuine indepenceable guarantee to preserve stability in ireland. The integrity of the Single Market which is the foundation of the european project and this is an integral part of this agreement. Lets go on and do it. Chief investment manager and it turns out david that you quite like sterling these days why is that . Well, i really not liked sterling for a long time we had a short sterling across a number of our strategies in fact, since the eu and before the Eu Referendum its much less ase me trick than it was Parliament Matters more to some extent on these discussions happening in paris and berlin because we know what the eu position is where the parliament will force an early election or force the government to actually seek an extension. You road that short position throughout all the uncertainty but youre saying theres still so much uncertainty you want to get out of it. Just the valuation and the pricing and where sterling is now is such that its just not as attractive as an investment position to have we still do have a short guilt position and we actually think that was a better way of reflecting, you know, uncertainty, both domestic u. K. , domestic political as well as economic uncertainty. On the topic of guilt we have seen yields rise this morning across the curve to the highest levels since july in some cases and this of course comes in line with a rise in yields across europe over the last couple of days we had the ecb minutes yesterday or the accounts as they prefer to call them and you can argue that they were at the margin more hawkish than the market was hoping suggesting that there were nuisances expressed when it comes to the competition of an easing package to come in september. What do you think the markets need in order to really react well to an ecb policy package given how much theres already been put out there how much already disclosed about this what is it going to take to get markets going again on the back of a package. Its going to have to be a package. I think what the market considered to be hawkish from those accounts theres still on going debates so that both has implications for banks because further rate cuts is effectively going to be a tax on banks and we know that banks are in a difficult position within europe and also suggests that, you know, if thats the case, its perhaps less appetite for more aggressive rate cuts at the short end. I do think that this is going to be the last horrah i think hes going to deliver. I think were going to get qe. Were going to get away cuts i still think were going to get that as well whether thats really tough to move the dial, i think, is from a real economy perspective i think is certainly open to question it will help keep it very conscious as well. What do you think about investing in European Bank cocos. Theyre active long position in Credit Strategies and precisely for the reasons being highlighted which is credit fundamental perspective if you make the right direction then we do think theres some value where youre getting 6 or 7 yields on National Champions across europe. I think its part of that sort of story which is equity struggles in a sort of disinflationary low growth environment and grinds tighter and thats what were seeing in europe at the oment. Do you think its the kind of stimulus that weve heard central bankers call for for a long, long time at the moment, a and b, if it does come will that actually help with growth here. I do think is that it will help with growth europe has effectively had an austerity policy since the euro zone crisis in 2011, 2012. And although thats, you know, were seeing some modest easing over the last year, it really is, you know very modest the situation that europe finds itself in now is that it cant keep just relying on the ecb so they need to change the policy and that means more fiscal easing the first question which is a key one and much harder to answer is will it actually come . It was actually lead by Northern Europe and by germany than italy. Theres a debate going on. I think the direction of travel is clear but how soon do we get there . And do politicians basically wait until were in recession before they act . Thank you so much for joining us. Thank you. That was david, chief investment strategist. Now hong kong antigovernment protests are set to escalate again this weekend as demonstrators prepared to once more target the citys airports. One of the busiest in the world. And try to delay passengers and flights. Meanwhile they obtained an extension to an existing junction that has rotests at the airport. The court said the injunction will remain in place until the court orders otherwise elsewhere, the British Foreign office has released a statement that calls for further information on the detained british hong kong worker the Foreign Office says it has not been able to speak to him since his detention. Meanwhile, youtube disabled more than