The states haven safe haven and you mentioned the dollar index up by. 3 and you have retail sales and potentially more support for the dollar in the next couple of hours. David its time for the morning brief and we will get the retail sales that alex referred to alix referred to. Nafta talks and Missile Defense talks get underway. Walmart reports secondquarter results. York, today wew have President Trumps returned to trump tower for the First Time Since his inauguration and the chief washington correspondent has come to new york with the president. Kevin cirilli joins us from midtown manhattan. Welcome to new york. Let me ask you, why is the president in new york today . What does he have on his agenda . Events. Ot much public later this afternoon, President Trump will be signing some sort of executive order and action regarding infrastructure. According to a white house official, he will be establishing discipline and accountability in the Environmental Review process. No other details regarding infrastructure will wrote were released. There has not been much talk on capitol hill of any type of broader economic stimulus bill in shortterm term. When lawmakers head back and return from august recess in september, they will have 12 legislative days to address the debt limit and pass a government funding bill. Talk has turned from health care to tax reform. Bigd in the meantime, the news yesterday was the president losing three different ceos from various is this councils. The ceo of merck, intel, and under armour. You can see merck and intel did just fine. Under armour has been struggling for some time. Does the president really care about losing these ceos . Does it matter to him . Joinedthese three ceos three additional ceos, elon musk, bob iger, and the former ceo of uber of resigning and cutting ties of this board in the administration. Following President Trumps remarks at the white house in which he denounced neonazis, kkk, and other hate groups, he then went onto tweet another criticism against ken frazier, the ceo of merck criticizing merck for essentially what he argued was sending jobs overseas and high drug prices. I would suggest these other ceos took a look at all of this the tone and the rhetoric coming out of 1600 pennsylvania avenue and ultimately decided it was best for their business and their own autumn line to cut political ties with this white house. David reporting from midtown manhattan outside trump tower. I think it bears some time to look at why these ceos did what they did. Lets start with ken frazier, the ceo of merck. Americas leaders must honor our values by rejecting expressions of hatred, bigotry, and Group Supremacy which run counter to the american idea that all people are created equally. He said this was a matter of conscious for him. Kevin other hand, we have plank of under armour that had a different approach to the whole thing. He said it was a matter of sports rather than politics. We are resolute in our potential ability to improve american manufacturing. However, under armour engages in innovation in sports and not politics. That doesnt sound quite so much a matter of conscience. This is about business for him and i think at the beginning of this, the ceos wanted to be on the council because it was a business decision. They wanted to be around the table part of the negotiations and now they feel it is a political decision whether you remain or go and for him, what was happening quickly was his brand is becoming associated with the movement he wanted no part of and before he knew it very clear that could spiral out of control and he had to take a step back. People people have some pictures have people wearing under armour products. It wound up having an impact on the pr front, different than pfizer for sure. David he has to think about his customers as well. Remember with Travis Kalanick when he had trouble after the travel ban and he had to back off because of social media. Alix the interesting part was what the stock didnt do yesterday. If you look at the terminal, it will traverse the trump impact on merck. Here is the sigh of relief that we will not hear debate over growth pricing, here is trump talking about drug pricing coming down and merck stock took a hit. This is where trump came out against the merck ceo and talked about drug pricing and moving jobs overseas and thus stock did nothing the stock did nothing. It was higher on the day. Andthan it is just words you saw that in the mexican peso and the fx market because words have remained just words and they havent developed into policy and you saw that in the drug case as well. Yes, get drug pricing down, but where is the policy . David the more words, the less effect. At some points the market say, i dont believe you anymore. Alix Anthony Scaramucci jonathan Anthony Scaramucci is the man that put together sky bridge. He was on the late show last night and had a few things to say about mr. Bannon and his future. Take a look at this. Who is leaking now . Is it steve bannon . I have said that. I have been pretty open about that. Is steve bannon a leaker . I said he was. I have no problem saying that. Is he going to be gone in a bit . What does the mucc think . Is not up to me. If it were up to me, he would be gone. Jonathan steve bannon could be on the ropes and if you think of the of the fallout, if bannon goes and the nationalistic core of the white house dissipate and diminishes, you wonder what that means for policy . Alix and is it a good thing . Can you get things done if you have all members of the administration on the same page . It is possible. David on the other hand you have to ask yourself if it is a matter of politics where the president would be concerned he would lose part of his base if he got rid of steve bannon or is it really what the president believes. Is he there because that is really the president s worldview. . Jonathan what a week already just two days in. Lets think about how policy could involve if economic nationalists win the white house and begin to leave and the gary cohns of the world take the lead in a significant way. How would you think about that as far as markets and investments . I should mention i deal with innovation in sports and not politics. I think, generally speaking, if you are looking for a referendum on policy, you dont have to look further than a dollar. It is down 9 year to date, that is the broad dollar index and that reflects fiscal policy, trade policy, Monetary Policy and so on the first two, trade and fiscal, i think its fair to say those have been much less dollar positive than people thought coming into the beginning of the year and if the rest is Monetary Policy, these big divergences within the u. S. And europe and the u. S. And the rest of the world in terms of their policy stance, they are no longer moving in opposite directions like they were in 2014 and 2015. All the major Central Banks are moving in pretty much the same direction and they are all tightening to a certain degree and those divergences which drove Dollar Strength are no longer as pronounced. Jonathan lets focus on policy and get away from the d. C. Noise. What is your base case for help policy will evolve through 2017 into 2018 . Benjamin we have a fairly neutral view from the outside outset. I think there are risks to the upside and downside. Whether you think there will be whether that happens or not, its probably not going to happen this year. I think at a minimum, markets have deferred the extent to which those are being priced in. David you said you thought this cycle will continue for a while and we are still on a positive uptick. Is there anything that can happen in washington that would bring that to an end prematurely . Or at this point is it just baked in . Benjamin this is a long, benign, flat, business cycle. We are entering probably what looks like the late stage of the cycle, but that could take a year or two or maybe more to play out. Alix if we lived and died by trumps tweets over the last six months. Benjamin i would recommend that. Alix and we no longer do whether it comes to Political Risk or tax on companies, how do you then factor . Do you change allocation at all . Benjamin thats a great question. Bringing the question back not just to tail risk around policy, but around north korea, around other geopolitical events out there, i guess what i would say is that affects the size of your positions in your portfolio and not necessarily the direction. Your direction is based on the big macro factors like the cycle, economic growth, etc. If you are skeptical that the current environment will persist or there will be volatility from geopolitical factors, that means you size your factors a little bit lower all else equal, but you do not change the direction. Willhan Benjamin Mandel stick with us on the program. Countew york city as we you down to the market open about two hours and three minutes away, futures are positive up big gains yesterday. The sentiment continues to be solid in the United States and europe, too. You are watching bloomberg tv. Alix the dollar found support yesterday. The news hit around 2 00 p. M. Talked about Monetary Policy normalization of the dollar found support. The reason why i think you would want to continue to gradually remove Monetary Policy accommodation even with inflation somewhat below target is that Monetary Policy is still accommodative and financial conditions have been easing rather than tightening. Still with us is Benjamin Mandel of j. P. Morgan asset management. To stickpect the fed by the three hikes in 2018 and a hike in december . Benjamin i think they will hike in december, but inflation is the linchpin here and thats a function on the political economy. You have two factions with countervailing views. The one is behind the curve viewon, it is a hawkish that we are running into trouble by not raising rates and containing inflation and there is the show me the inflation faction which is the dovish counterpoint that needs to see it. These are tools used to forecast inflation like the phillips curve. I believe those tools are not working in the current environment for whatever reason and those two factions lined up at the end of last year and the xiaomi inflation voices were show me inflation voices were silent. I think the somewhat hawkish tone dudley took yesterday that hike will be possible if inflation does not show signs of rebound. If that is the linchpin, for sure. Alix do you think yellen or fisher would yield more toward benjamin i dont big it is a matter of any individual. Alix are they in the inflation camp or in the more hawkish camp . Benjamin i think they are somewhat in the middle and the center of the committee has been sort of not taking an extreme view on either of those. The committee will all align if inflation does that. Jonathan here is my take away. At the very beginning of the interview he says his outlook has not changed since the beginning of the year and i found that interesting because the Inflation Trajectory has kind of rolled away. It has rolled off. What do you make of that comment . Inflation is a puzzle, thats what i make of that. Nobody understands why we have had five months in the row where the cpi came in a disappointing matter manner. We moved on from there to it is noneconomic and maybe Health Care Prices or rent, things that are not very timely indication indicators of demand. None of those are individually sufficient to explain why inflation is weak and then you get a host of other factors, slower moving, structural explanations. Is it demographics . Is it globalization . The fact that there is some equivocation on race is the fact that we are really know what is driving inflation right now. Jonathan i cannot work out how much time we waste every week about which data matters and what is data dependent. How can you be dependent on something which isnt dependable . I think they have taken a couple of steps away from that and i think thats a good thing. Jonathan have they backed away from that . The data dependency . Benjamin in part, they have backed away from data dependency. The conversation on the Balance Sheet happened and now it is over and thats no longer a data dependence it to decision. They moved toward the Balance Sheet september or october wherever it is, the data dependency is now squarely placed on the path of the fed funds rate. All the negative news about the real economy and inflation is going to be absorbed in that path. David you gave a careful answer about december, but you didnt answer alex question about about 2018. Ion theres a big disagreement between the market and what the dot plot says, the fed says. Benjamin i think thats absolutely right. The Market Pricing of a hike in december is even 30 and that path is very different than in 2018 and that is realized inflation. We have seen that change in the past when the data pick up and the fed ultimately a line. Jonathan the wage growth will come and the jobs game will roll off little bit and we will reach full employment and things get tighter and things will play out in the way we always thought they will. Benjamin so we were told. Say dudley didnt even that. Thats what i found interesting about it. David Benjamin Mandel of j. P. Morgan will be staying with us. Coming up next hour, andrew sheets, the chief of cross asset strategists of Morgan Stanley. He will join us live from new york. This is bloomberg. German gdp growth was wrong, but not as much as economists expected. Or have been lags in the past couple of months in construction are the issues of Consumer Spending that held it back from the 0. 7 number we were looking for. We got 0. 6, that is relatively healthy and should be good for Angela Merkel although air for bankruptcyg in this is the kind of issue the chancellor pulley doesnt want to deal with. Jonathan is there a much bigger thing at play here . The air berlin issue is small although they have thousands of employees that will be out of jobs if they dont get taken over by lufthansa. It doesnt compare to the much bigger issue in germany, which is the diesel problem and obviously the automakers employ 800,000 germans and if this issue doesnt go away and merkel doesnt look like she is pushing it that hard, her challenger could really jump on it and make a bigger deal out of it. Jonathan a big deal out of this smooth sailing toward the fourth term for Angela Merkel although she faced some boos in western germany. Many people think it is smooth sailing and a oneway bet. How big is the opposition at this point and how significant is it that the immigration issue actually hasnt gone away and is still front and center . Matt keep in mind it she let in 1. 3 million refugees and although it has gone smoothly, there was an incident in cologne a year ago, a Sexual Harassment issue and the terrorist attack at the Christmas Market last december. Other than that, these immigrants have been absorbed fairly well. It was fairly surprising to a lot of us to see the afd polling so strongly. Thirdot 10 , at the Strongest Party and before the greens. The we havent thought of it as a concern, but there are 6 weeks to go before the election. Jonathan matt miller joining us from berlin. Still with us is Benjamin Mandel. If you want to put the optimism around europe and the pessimism nd the u. S. Close to 2017 highs right now. I look at the positioning around the u. S. Dollar. We have gone from aggressively long to aggressively short and you fold in the fed debate as well. When you look at the currency pair and the transatlantic divide that emerged over the last 6 months from now, do you change your views of where we go from now . Benjamin fundamentally, europe continues to outperform. Is an example of that. Stillndamental picture is there and we were talking earlier about policy convergence insofar relatively good Economic Data in europe has been pushing the implied policy stance up and has been pushing the euro up, so our favorite framework for organizer or quantifying that is the taylor rule where you take the Interest Rates and the Unemployment Rate and the inflation rate and you plug it in and it gives an implied policy stance for the central bank. If you were to do that for europe and the United States over the first half of the year, the u. S. Taylor rule did nothing because inflation was going down and the Unemployment Rate was going down as well. The implied stance in europe went up for 140 basis points. All the action was there. You can think about the euro move we saw in the beginning of the year as reconnecting with the fundamental drivers. Looking ahead, if we were to plug in what a reasonable forecast not even heroic ones in terms of inflation for the u. S. And europe, its a much closer race for the end of the year. There are some additional economic pressure on the euro to get stronger versus the dollar thingsbably some other risk sentiment in particular pushing the other direction. Its more of a balance view on the eurodollar pair. What we dont see as being a likely outcome is a big reversal and strengthen the dollar. Jonathan benjamin dan Benjamin Mandel is sticking with us. Coming up a little bit later,. Eborah leah from new york city counting down to the market open about two hours away, lets get you up to speed on market action. The biggest oneweek drop since march and dusted it we follow that up with the biggest oneday pop and yester