Kongcurran is in hong wanting to know when the fed will raise Interest Rates. Matt miller is in berlin. Lets begin in greece. Finance ministers have reached an agreement that will allow aid to be released to ease the debt burden around the country. Marcus joins us live from athens. Aid disbursement means greece will not face a massive payment crunch to the ecb in the summer. Theres also some extra money that allows it to stopping down taxes are about to rise. Its not going to cause jubilation on the streets. They can expect a little bit of stability over the summer. Jonathan thank you. David are you wondering when the fed will next raise Interest Rates . Chinese officials will ask their u. S. Counterparts about the timing of the next increase. Curran in honga kong. When are they going to ask this question and where . Good morning. It shows how nervous chinas leadership is of the looming fed rate hike. Issuelan to raise this when diplomats meet as part of a strategic economic dialogue. A rate hike matters for china because it would put pressure on the yuan. It could Spark Capital outflows from china. It brings back all the problems we saw toward the end of next year. China wants reinsurance from the u. S. Official that they will Telegraph Well in advance any move that americans they are even going far as to say they would prefer a move in july rather than june. Vonnie despite a 62 billion dollar offer being rejected, they are still says it can get a still says it can get a deal done with monsanto. What can they afford . A number ofaring analysts put out numbers. Jeffries is saying they could afford 140. Another firm saying they could afford 145. Clearly shareholders were not sincewith the idea at all it started being talked about may 12. The stock has fallen considerably since then. David more job cuts coming at microsoft. They are trying to undo the last major acquisition. Selena long joins us from hong joins uselena wong from hong kong. This is microsofts latest to cut costs and it is not working. Last year they announced 7800 job cuts. Off itst week they sold future phone unit. Really downsizing this lagging part of the business. this is a strategic move to back off of cell phones. Rate. This is another move to pare back. Its a smaller part of the business that it has been in the works for a while. This has been a long time coming. Its another step. David thank you, selina wang. Session in bullish new york. Ook at the ftse up the dax pushing as well. German Business Confidence out today. Since 2016. Thats encouraging. It points to a market in journey germany as well. Let me show you whats happening with wti and brent crude. You see what it means for the fx market. Both pushing that little bit higher. Dollar cm y. Thesee it at the bottom of screen. Worried about a strengthening dollar, trying to get ahead of the curve just maybe. China is just going to ask the u. S. Trade, when are you hiking Interest Rates next . Lets check in with abigail doolittle. Apple received a setback in india. The government is requiring apple to source components locally if they want to open apple stores. In other news, Hp Enterprise shareholders woke up to find themselves wealthier by 8. 5 billion. All of the shares are sharply higher. Tiffanys shares are down sharply after the Company Store sales were down 9 . Sales in europe were even worse. Shares are unicredit higher. The ceo Federico Ghizzoni is being replaced. He is thought to be out of touch with shareholders. Time for first word news. In albuquerque, a protest outside a donald trump rally turned violent. Demonstrators burned tshirts. Police pepper sprayed and through smoke grenades. Protesters disrupted trump inside. Has arrived in japan. He will attend a summit of the g7 nations tomorrow. He will become the first sitting president to visit hiroshima, where the u. S. Dropped an atomic in 1945. A new report says a brexit could force the u. K. To extend austerity measures through the next decade. It says britain may face a budget deficit of 44 billion if the company leaves. That could lead to more spending cuts or i o borrowing. Higher borrowing. Coming up, yelling at yellen. Has the fed slowed growth . An economist reveals what yellen needs to do immediately. And later, wilbur ross joins us on set. Now he is putting money to work in two very beatendown areas of the market. More go coming up. Jonathan this is bloomberg. Im Jonathan Ferro. The dax is up. Futures positive in the United States. Eurodollar pretty much flat on the session. Look at the chinese currency. The weakest fix since 2011. Brent crude and wti pushing high. David the dollar strengthened to a twomonth high against the euro. And in macroeconomics founder Ian Shepherdson said it is time for the fed to raise rates and send the signal that the u. S. Economy is healing. He joins us now. Welcome to bloomberg go. We have heard the models are not predicting things accurately. You have a theory as to why that is. When the fed is so easy for so long and keeps telling us the economy is weak, it reinforces the signal that things are bad. That encourages people not to spend money. It encourages businesses not to spend money. You get lower Interest Rates for a long time and weaker growth. Banks willing to lend money credit growth is quite strong. It encourages people to inflate asset prices rather than make productive investments. The misallocation of capital means lower rates dont transmit into stronger growth. David if there were proper allocation of capital there would be more growth and more productivity. Is this why we are not seeing productivity growth . Allocating capital for things that are not very productive. We are doing more stock buybacks. Look at the price of vintage cars and fine lines. Money is free and has been for a long time. About the idea that we are not seeing any kind of inflation that is even remotely run away . Cpi is above 2 . The other thing thats important for the fed is wage growth was stuck at 2 for five years going nowhere and its now 2. 5 percent and rising. They are going to stay ahead of the game. Jonathan what about the feedback loop globally . China will ask the United States on the timing of the next Interest Rate hike from the federal reserve. These Central Banks are supposedly independent. That is huge. Independent, but they talk. , highernas perspective Interest Rates are a type of policy for china. They have been trying to stimulate their economy for the last year. They are reportedly having a word to see what they can do. Vonnie maybe they consider this the next step in the shanghai understanding. From chinas perspective the slower the u. S. Raises rates the better. What tends to happen is that as inflation pressure the ability of the rest of the world diminishes. We tend to get to the point where we just have to squeeze the domestic economy. Your theory says why we are not getting the growth we need now. If all the Central Banks keep on the course it will get worse actually. We have a here to show. Why dont you explain exactly what this graph is showing . The Straight Line shows the standard view of the world. If you cut Interest Rates growth gets stronger. The more you cut the better it gets. The yellow line shows a different idea where actually thee you cut rates line starts to move down. You are actually doing more harm than good. Vonnie when should the fed have raised them . Two or three years ago. Vonnie why are we not seeing more pronounced affects . The counterfactual is impossible. No one knows what would have happened. Morei can tell you is that qe of course as well. What has happened over the last few years is that there he has been proved wrong. We have to work out why this didnt work because everything every in the world told us the more we do the better it will get. The markets have gotten quite used to this low Interest Rate environment. Dont you worry that there would be a really negative effect on this location of the markets . I have no doubt that it is going to be the modest expectations of what the fed is going to do our too low. Disturbance. Some it boosts productivity growth because we start signaling when things are getting better. Change andty has to its going to be awkward. That is Ian Shepherdson. Thank you for being with us. Vonnie up next, a relief package that greece will get. Coming up, wilbur ross joins on said. Find out if his multibilliondollar bet on greece is about to pay off. Thats next on go. Jonathan this is bloomberg. Im Jonathan Ferro. Greece will receive 11. 5 billion in aid after an agreement is reached in brussels. The 10 year yield dropping below 7 for the First Time Since november. Us forross is here with the next hour and we will start with European Banks. Welcome to the program. Lets start with greek banks. I think this is a very positive development. It diverts any danger of immediate default on the Greek National debt. Will eventually win its war and greece will get the kind of debt relief that it really needs. I think the imf has been right to hold out for that. Also the greek banks need to raise more capital because of the increasing mp do you think they have to raise more capital . Really dont think so. They raised more than they needed to the last time around. The prolongation of this agony, will there be the resolution. That has been holding back the economy. Its hard for a bank to operate when you have capital control. They have achieved sovereign debt relief putting in all these new austerity measures some of which will actually help the economy. They said a few billion dollars will go by october to repay overdue payables that the government has owned the private sector. Thats going to be big stimulus. It will help the liquidity of great companies. Been talkingf has about this for some time now. We had another instance where they had to back off. The germans so sure will back down . If i were a german voter, what i rather write a big check on my own or let imf of the check right part of the check . Greece cannot pay all that interest and principal back so its a charade. Vonnie are you putting more money in greek banks . We are invested in euro bank. The only reason the banks have a problem in greece as. Its not like ireland where the banks went nuts, they had best real estate loans all over. Ek banks got into a pole trouble because the government blew up. David are you looking to invest more in greek banks . Have have been looking to this thing resolved because if they were going to go into another default which they could have in july because of fairly or if theple government did not pass all these measures. Bipartisan support for these austerity measures passed. It must be 30 or 40 very difficult pieces of legislation. And the coalition held up. The little majority they have held up. You may consider investing more in greek banks . We will have to see where they trade. My guess is this has been very positive for the greek banks. Jonathan lets take a look at italy. 17 total loans. The gdp is around 1 5. Are you looking at italian assets . Italy has a historic problem with the banks that is different from the greek problem. Foundations were really local political people. There lauren portfolios are peculiarly bad. Jonathan is it something you would touch . Carefully, gingerly. Vonnie you were in spain. You got out of iowa. Ireland. Im very interested in china. Thehey securitize distressed loans there with transparency and reasonable pricing that will be a very good help for the chinese. Your assessment of distressed loans in china how do you gauge what is distressed . You can see who is in trouble. Something like 10 of the loans are not covering their interest. Pretty easy to find out who is distressed. You have to figure out how to rehabilitate them. Jonathan wilbur ross is sticking with us. David coming up, how to put your money to work in the most beatendown sectors of the past year. Jonathan this is bloomberg. Im Jonathan Ferro. The dax is headed for its biggest today pop in april. Two day pop in april. The ruvell in russia advancing and the aussie dollar as well. We are on 50 watch once again. The thing im watching is what happens in china. Cn why fix overnight the weakest since 2011. Know thes want to feds next move. They are just going to ask the fed straight. David if only we could just called janet yellen and ask her the way chinese can. Tom that was such a good day to check. It was so good. David heres what you need to know at this hour. Says it is still monthent they can meet santos demands and get a deal done. As theft will cut jobs ceo pares back the companys ambitions in smartphones. Blow to apple. Indias finance minister has ratified a decision by wrap all to meet local sourcing rules if it wants to open its own stores in india. That could hamper its efforts to make india its next big market opportunity. A House Committee may vote today on a plan to deal with puerto ricos debt crisis. The measure would create a board to resolve the 70 billion in bed. Some say the bill does not do enough to protect Public Services from costs. House Speaker Paul Ryan says he is ready to end the standoff with donald trump. He may endorse trump for president as early as this week. Concerned about the split that has developed in the republican party. Tom keene is joining us from bloomberg surveillance radio and wilbur ross is still with us. Tom keene, sometimes a story comes out that you dont know whether to laugh or cry. The idea that china will just when u. S. S. Direct and chinese officials meet in the coming months, when are you going to hike next . Tom some of the silliness of this is beginning to percolate. Overweighted is but it shows the import of the ramifications if you do get a shift in fed policy. June july parlor games extremely fluid right now. Central bankers do talk. Maybe this is just sort of a followup. This is the idea of money is cheap. Ayer andback to b monsanto. It surprises me that they are talking about talking about it. These central bankers have been talking regularly back and forth. The chinesers government wants to let the world know they are concerned. Tom i think talking about talking is the start to talking so im in favor of it. I think its very tricky. I personally think its an overvalued currency, not undervalued. I disagree with my friend mr. Trump in that particular regard. If theyplicated because devalue the currency by 3 it would raise the interest bill that have a lot of dollardenominated debt by 26 billion a year. Thats a big number for those companies to afford. Thats one of the problems with lowering the currency and i wouldnt be surprised if it were one of the main reasons they have not let it go. Tom whats the firstorder effect of money for nothing . We have this gift that keeps on giving for x number of years. You have been advantaged by that. Are they going to finance that move from 110 or whatever up to 135 or higher by doing short paper at a negative Interest Rate . They will definitely finance it with some debt. Money almost cost nothing nowadays. You often wonder if companies would not be better shutting down their operations and just putting out all this negative Interest Rate. And it would be the 100 profit margin business. David that poses an enormous moral hazard because that encourages people to misallocated capital. Do you see that as you make investments . In general people are paying too much for everything. In the art market. The last few markets i have been under better on most everything. Where you bidding on in the u. K. . We dont talk about rumors. Theres a rumor that it is a rumor. Vonnie what a fair price be given steel prices . We do not talk about rumors of m a. We talk about them when we make a transaction. This lets talk about extended capacity for steelmaking globally. The u. S. Government has been talking quite some time to china saying you have too much capacity. Is there overcapacity in steel . There certainly is. China has over a billion tons a year. Domestic demand is about 700 million tons. Million tons looking for a home. 100 million of which they are putting out overseas. That is producing all these countervailing tariffs. They probably cost the eu 40,000 or 50,000 jobs. It has become a serious problem. Steel industry is both capital intensive and labor intensive. So what do you do with all those workers . And especially what do you do when theres the next problem coming down, shipbuilding in china. That is another huge laborintensive industry. Also a big consumer of steel. Chinese shipyards are over capacity already. Two thirds of their auto book runs out this year. Be a lot of new orders coming in as they are not heavily subsidized by the government. That could lead to a compounding of problems with layoffs in shipbuilding and steel. Recurring issue in china. At what point does it become social unrest . Tom i think the social unrest question is germane. Vonnie how long of an investment is the China Investment . You said distrust that you would be interested in. How long are you in china for . I dont know we are in china already. We have various Portfolio Companies at almost 20 factories doing one thing or another. We have a clean Energy Joint Venture with the Largest Electric utility in china. Jonathan that sounds like you withnvested in a situation a significant overcapacity, clean energy. Does it bother you . We are mostly in the people providing the technology. China really is the world leader in solar technology, wind technology. I think before long they may become the world leader in battery technology. Renewablesblem with is storage of electricity. Wind and solar are inherently intermittent activities. Call it something i a battery to store the power. Vonnie where else are you investing