news het trump told nbc would have fired james comey even without recommendations from the justice department. is the u.s. on the right rate path? the market seems confident, but will consumers support the case? theill ask charles evans of chicago fed in an exclusive interview. to the program, everybody. we are less than half an hour to the european open. let us have a look at what is happening on european futures market. we will be a little bit starter at the start of trade. the ftse 100 could be a bit of a laggard this morning. m&a this morning and france. a little bit of oxide coming -- upside coming in from the cac and the dax. gmm function, in better perspective. we are standard deviations away from standard moves. we have the chinese market up by .6%. it dropped off the far left hand of your screen. that was a standout performer because as you can see from the index picture, which features a some of the asian equity session, the australian market, for example, the general move was down. negative risk-off session and a slight move higher in gold. as i said, china in that trend of moving higher this morning. let us get the bloomberg first word news. here is juliette saly. juliette: thank you. in the u.s., president trump has described former fbi director james comey as "a grand stander." his remarks departed from explanations given by several white house officials earlier in the week. he told nbc that the fbi has been in turmoil for months and comey was not the right person to help it recover. pres. trump: what i did was i was going to fire comey. my decision. >> you had made the decision before t they cam room? juliette: the u.s. has reached an agreement to provide greater access to american natural gas exporters to china as part of a broader effort to begin reshaping the trade relationship between the world's two largest economy through the agreement covers 10 areas where trade negotiators from the u.s. and china have reached consensus, including agricultural trade and market access for financial services to we will speaking with u.s. commerce secretary wilbur ross about that gilad: 30 p.m. u.k. time. is preparing to cement ties with president donald trump by committing to unprecedented investment in the u.s.. according to people familiar with the matter, a plan to spend as much as $40 billion on u.s. infrastructure may be announced next week when trump visits saudi arabia. an official confirmed the plans are in the works. a representative for the public investment fund declined to comment. electionk. general campaign takes shape, the opposing parties are taking increasingly barbed swipes at one another. the conservatives are warning working voters at the labour party has deserted them and jeremy corbyn is to launch an attack on may's foreign policy. another politician have called for a different approach to the election. >> the tone of this election must change. it is time to regain the people of wales, of the whole united kingdom, some hope. who is to say that britain must now struggle under the yoke of a one-party state that by theresa may? news, 24 hoursl a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. anna? manus: thank you very much -- anna: thank you very much, juliette. matt miller is on location in italy for the g-7 meeting, and he found his way back to the camera. he has been off in search of news. what have we found out so far? talkinghave just been with the italian finance minister and he tells me he's very happy that they are going to include the statement on inclusive growth that they included in g-20. it is code for trade. it is not on the track of the finance ministers, although normally they would discuss it because it is related to economics. they do not discuss it officially now and at the baden-baden. they want to include the u.s. as much as they can. steve mnuchin is just about to arrive, so they do not want to start any kind of wars of words as far as trade is concerned. arrival's ongoing. you are with us for the program of course. let us have a conversation about what has been happening in the united date. sales at macy's have fallen the 2008 at contagion spreads across the retail sector. they will look at u.s. sales to get the overall strength. figures will be closely watched. joining us now is mark cudmore, bloomberg mliv macro strategist. good morning to you. good afternoon. atherhe u.s. economy we higher interest rates when we see concerned about the consumer coming back to the fore. mark: i definitely think it cannot the moment. a short-term rise will not have too much of a detrimental impact. monetary conditions in the u.s. accommodative still. a small hike is definitely what we can cope with. whether we can cope with a sustained hiking cycle is another matter. it should be assumed the june height will go ahead and we will need a serious downturn in data to really derail that. inflation data will be watched today. no one should be pricing out june anytime soon. yellen isatt: janet here. we saw her come out of the hotel last night. it will be interesting to see if she sits with steve mnuchin, and how those two get along. do you expect the imagination to have any influence on said policy?i know they got guard their independence usually. mark: obviously, they are not meant to have any influence. i think that will be the official line. when of the big things that is adjusting thing about this last year was that trump was quite critical of janet yellen on the campaign trail, but that was more a political ploy. always said he wants low interest rates, even before he came to power. he has always been a fan of ebt, and hefan of d has come out since then saying he wants a weaker dollar. even if janet yellen does not continue on, they will probably go for someone who tends to be dovish in favor of lower rates, because it fits with the trump policy. chart onulled up this the bloomberg. u.s. households not expected to ramp up purchases. consumers are tightening their belts in the united states. to what extent is this seen as something that detracts from a strong equity picture? i spoke to an investor earlier on and he was bullish about stopped earlier on, saying the u.s. private sector is doing well. there are reasons to invest. should this concern about the consumer detracts from decent profits in the u.s.? mark: i think there is to bring things here. the concern about the consumers should be genuine. the consumer is what drives the u.s. economy, and it is very important. when you get indicator showing a clear downturn, you have to worry. many other measures in the u.s. are pointing towards a relatively healthy picture. the point is, there is abundant liquidity, access -- chasing limited returns. stillrporate sectors are very healthy. there are some other measures of the consumer that look relatively ok. the employment situation in the u.s. is looking ok. housing situation is looking ok. you do wonder whether some of the old measures of consumer behavior are slightly outdated. are they fully capturing all the transactions happening over the internet? in the new economy, etc.? as we move towards a services economy, the transactions online, are we really capturing those measures correctly? overall, the u.s. economy seems to be relatively healthy, and therefore watch these consumer indicators pointing to a downturn, but do not panic. anna: keep calm, do not panic. mark cudmore, bloomberg and live macrostrategist -- mliv strategist. you can follow the conversations with the mliv team. type mliv . ground atr is on the the g-7. thee are live pictures of great and good at the finance industry. mario draghi arriving at this financeing, gathering ministers and central bankers. christine the bar is there. --rch moscovici is there christine lagarde is there, ise masa vinci is -- there. there is more common ground on greece. we will speak to the federal reserve bank of chicago president at 3:30 p.m. u.k. time. we have you commissioner pierre's take on the election. the opening 20 minutes away. 20 minutes until the start of cash trading on european equities. this is bloomberg. ♪ matt: welcome back to the show. i am in italy right now. the g7 finance minister's meeting. we have seen the kuroda delegation arrived. wolfgang schaeuble has just gone into the castle where the finance ministers as well as their central bank heads will meet. we spoke with italian finance earlier.potte we have seen serge moscovici earlier as well as christine lagarde. a lot going on in italy. let us find out what is happening in the rest of the world. we go to juliette saly. juliette: thank you. forecast boosted its after it improved its operating performance and agreed to sell a brazilian steel plant. the company said interest excluding one-time items will be 1.8 billion euros in the fiscal year through september. germany's biggest dealmaker has made a broad array of changes in an effort to transform it into a diversified industrial group. online services provider united internet has agreed to take control of -- to 72l boost its stake point 7% in a multi step deal. the deal comes as it seeks to better compete with larger rivals deutsche telekom and vodafone. the company plans to take over and french advertising company in 3.9 billion euro deal , orchestrated by a billionaire, who control both businesses. the company has offered to 20 .illion euros, the combination will unite the media empires with marketing and advertising assets. jumped in netmarble trade as investors pursuing a high-growth alternative to traditional industry. it is the biggest debut in seven years. the company has a market value of about $12.4 billion, surpassing another electronic company. netmarble is a rare entrepreneur oil success -- entrepreneurial success. barclays ceo jes staley has responded to emails of an imposter. according to the financial times, they criticized the berkeley shareholder who thought to out daily at the general meeting on wednesday. with praise,nded citing his great and comparing his fearlessness to that of aircraft in -- of eric clapton. anna. anna: the skills of bankers. thank you very much for that. the u.s. has reached an agreement with china that will give china greater access to u.s. natural gas exports. commerce secretary wilbur ross said the deal is part of a broader effort to begin the trade relationship between the two countries. 28 heads of state, including russian president putin, are gathering in beijing or a summit on reviving old trade links. the one belt, one road third ofe covers one global gdp. credit suisse says china could pump $500 billion into the scheme, but in the reality match china's lofty ambitions? tom mackenzie is in beijing. tom, what does china need to do then to make this incredibly ambitious plan a success? anna, it is an incredibly ambitious plan. i should point out i am in front of the bird that stadium built for the olympics in 2008. an example of china's building prowess. all these leaders will be meeting over the next few days. china really needs, in terms of momentum and pushing the forward, to convince leaders around the stadium that this is not just about carving out political influence. a sphere of influence and beyond. it is not just about the economics. it is about opening up new markets, not just for china, but for other players. there are jubilant of all concerns mounting up around countries like india, that is concerned about china's work with pakistan and ha contested regions like cashmere. they are worried about pulling oil into china. there are examples to date, because it was launched in 2013, where some of these projects have gone awry, for example in myanmar, protests against the dam, and sri lanka, protests along environmental lines. in asia alone, $1.7 trillion needed every year according to the asian development bank, between now and 2030, so the need is there. it is how china implements it. the other question is the financing. they have their state lenders involved. there is a big need for them to get private investors involved because of the gap between the public investment and the private investment. mckenzie saying that is crucial. expecting to get more details on that over the next few days in beijing. about thistalk to us u.s.-china trade deal. i am in party, -- in bari, italy. how significant is the china-u.s. trade deal that you are talking about, hearing about, looking at there? so the commerce secretary in the u.s., wilbur ross, heralded this as a herculean efforts after this hundred days since the presidency, president trump meeting in mar-a-lago, florida. i would say there are caveats to this. we have movement on things like beef, cooked poultry from china to the u.s., beef from the u.s. into china, the liquefied and natural gas from the u.s. into china, and the finance side of things. visa,nt, the set, amex, -- amex, mastercard. china does not give away things for free. it does not give away concessions easily. many of these things may well have been in the works for a while. wto had ruled against china in terms of financial payments, so they would have have to have made those moves in terms of allowing greater access. the beef imports were banned in 2003 as a result of a mad cow disease scare, so there was time about whether that was going to come on board anyway. that is a huge market for the beef industry. energy makes is interesting because if china can get their hands on this gas, that means they can diversify their energy mix. it looks like america's consumers are maybe getting a bite of some cooked poultry from china, maybe a bite of chicken nuggets, which may not be tear taste depending on where you stand on things. a debate here on the european market bloomberg's tom mackenzie joining us appropriately from in front of what was the bird's nest stadium in beijing. matt, very good time to be talking trade with the u.s. administration given all of that news flow. matt: that is right. a lot of people wonder why the trade discussions are not on the focus here at the finance track of the g7 or the g-20 meetings. the reason is of course that most countries have separate trade ministers. our secretary of commerce, wilbur ross, is that man. bloomberg television will be speaking with him in a few hours at 1:30 p.m. u.k. time on the america."aybreak that is something you will want to tune in for. i am here in bari, in italy, and sticking with that subject, i spoke with the e.u. commissioner, p or moscovici -- pierre. what does that mean for europe? >> good news for the e.u., we have a president who would have been not only far right, not only beautiful but, but also somebody enter european, in favor of frexit, france exiting europe as a whole, and especially the eurozone. the eurozone would have been damaged if not destroyed by that result, and the french massively said no to your of skepticism, young frenchave a president who is a dedicated pro-european, and who would be a driving force for proposals in the e.u. and to strengthen, to and monetaryropean union. i welcome that. the commission welcomes that as well. function, butin he would be fully president next sunday, and he will meet let's merkel. he will be in close contact with the commission, and work with staff. i would think we have one more a veryor europe and strong asset, because france is a core country, but there is still a lot of work to be done ,n order to reach what i expect a deepened economic and monetary union. i am just like macron, in favor of a finance minister for europe. i am in favor of these capacity for europe in order to advance our investment capacity and capacity to also fight unemployment. i am in favor of parliament for the eurozone. i think that the time has come one of thele with weaknesses of the eurozone, which is divergent views between -- divergencies. as well as risk sharing and the issues together that the french president is obviously a strong asset for the e.u. and all of us should welcome him as such. when he is in office -- matt: in the next election, martin schulz is obviously very pro-europe, in favor of deepening those financial ties, strengthening the european union. do you think you would be a good step for germany and europe? >> i am a frenchman, commissioner. i am not involved in other country's politics. i am also a social democrat. the energyappreciate of martin schulz, but also i am somebody who has worked a lot with medical. pierre: i admire -- with angela merkel. i admire pragmatism. whoever is the next german chancellor will be a strong leader, a dedicated poster p.m., and -- pro-european. the elections in germany are not a major worry. i see that the extreme right is in disarray, and well, let the best win. matt: i spoke with commissioner moscovici about greece. he was optimistic we would get a deal at the may 22 euro group meeting. that will be what ministers discuss a lot on the sidelines of this g7 meeting in bari. anna: that is going to be something that gets discussed. let us talk about the stocks that are going to be on the move today. we are minutes away from the start of european equity trading. keep an eye on vivendi.either companies we are watching closely today . the event a $.2 billion from the french advertising firm. assets put together by -- we will see what kind of reception that gets from investors. we have seen some very aggressive calls around havas this morning, between 7% and 10% . also keep an eye on the steel sector. cfo earlier on, asking if they are concerned about debt levels. there is plenty of time to bring them down. coming up on the program, the market open. will be aggesting we little bit stronger at the start of european equity trading. maybe a couple of percentage points. this is bloomberg. ♪ ♪ anna: welcome to the program everybody. minutes from the start of european equity trading. let me tell you what is happening in the futures market. we're expecting to see european .1%.ies higher by a brown the ftse up, dax up by a similar metric. i am standing here in italy where we just watched seven of the most powerful finance ministers in the world walk into a norman castle. they are getting ready to discuss a number of issues. trade not on the agenda, but they will talk about that a little bit. greece especially important as you are moscovici is confident they will have a discussion on greece and a debt relief package by or at the euro group meeting on may 22. anna? anna: let's look at what is happening on the european open. a little stronger open expected. the asian session has been weighed down by concerns on the u.s. consumer. the mliv team was concerned about what was happening on the u.s. consumer side of things. we will see how that lays out in the european open. it looks as if we are waiting to get the start of the trading day underway here in europe. are ons of where we these markets, it seems to be a little stronger across european equity markets. a little strongerm let's have a look at earlier movers on this market are some of these games are coming from. the mov function on the stoxx 600. most of the ups -- moves to the upside from vivendi, by 4% this morning. some of the banking stocks pulling up. we will get a better take as the minutes ticked by on what is happening on the equities session. m&a has been a bit of a theme. vivendi has made a big for french appetizing firm and united internet has a deal to take and troll of the relation. spanishfer for its infrastructure. that is according to people familiar with the matter. as early asuld come today. still waiting for opening moves on some of these companies that are in play today. united internet, could they be doing a deal? we are waiting for opening prices there. with us, jonathan bell at stanhope capital. we are taken by the amount of mid-to small size m&a we have announced over the past 24 hours. good morning to you. does it sit well with what you are seeing? maybe it goes hand-in-hand with a stronger recovery in the eurozone? jonathan: it will be interesting to look through the deals and see what they are planning. my experience with m&a over the last year is it has been a lot about cost-cutting. there hasn't been revenue generation. how do they boost profit on the bottom line? it is, of course, through cost cutting and that being the major story. the difference now is that we are seeing revenue growth in europe. is this about not only cutting costs, but about waves of growing revenue? telecoms is clearly an industry still suffering, that is perhaps different than looking from -- at someone like appetizing. i wonder what you are thinking about the earnings season have seen so far and the narrative we have heard the last couple of weeks that european companies are investors better for in american companies right now? jonathan: there is a big difference between the u.s. and europe. if you look back at your -- earnings over the past five years, you have hardly seen earnings growth in europe whereas u.s. companies have been generating earnings growth. disappointing, but still reasonable earnings growth. the difference this year is we have had a first good quarter in the u.s.. looking at about 10%. europe, you are looking at a punchy growth number. perhaps something like 15% this year. first-quarter numbers have been good. there is a bit of a catch-up in europe and it can catch up much longer. this is not just about first-quarter numbers being good, we should see it go through this year and in the next year. there is a real advantage looking at european companies compared to the u.s.. looking at some of the share price reaction, m&a news, and relish -- as we watch some of the early trades in these companies come through, interestingly heard earlier in the week from lloyd lamenting the politics in europe and saying yes, without their france and italy, that we have other challenges ahead. every election has to go out. does that put you off the strong europe trade or not anymore? jonathan: i think there is only one election that concerns being europe and that is the italian election. sometime in the next 12 months, the others haven't concerned me. the german election doesn't concern me. italy -- i suspect will be fine. , with theis a chance five-star movement and the northern league do well enough to have some eu referendum -- that would clearly be bad news. --uspect it will be happen won't happen, but it is the one element -- overall, politics in europe is better than people think. and matt is in italy, so jump in. the issues we have been hearing about lately is the possibility that the german election will offer the largest, wealthiest contingent of europeans to place a bet on whether they think europeans union is going to strengthen, or if it will stay the same way as right now because obviously, we have a choice between a eurobonds, european finance minister position of martin schulz and a more steady conservative position of angela merkel. jonathan: yes, and we have seen that with macron being elected in france. you have someone keener on euro countries getting together and the main partner he will be discussing with his germany, because they will have to pay for it if you have a much closer eurozone. he isn't interesting discussion in terms of developments and the politics in europe. how much closer they get, already there is an element of some things being passed back to nations. it shouldn't be a major concern for markets. anna: i was talking in the last program to its global investors, and he was saying he is still concerned about whether we are going to skew failures in the banking sector in italy, perhaps even in germany, and that maybe that would concern investors this year, testing the resolution mechanisms we have in europe? does that come back to haunt us? jonathan: the banking sector, we are going back to financial crisis. who was able to write off nonperforming loans? the americans did it, raised the equity. the u.k. has done it now, and were bank lending started to increase last year. in europe, it has been a question mark. i think the news is getting better. unicredit having the race they had. seen investors in banks since the financial crisis. there are still risks, but it is on the cusp of beginning to get there and there are some areas -- higher risk investors should look at. anna: the unicredit numbers, companies shoring up the balance sheet. the sector is starting to improve, some with higher risk appetites might get involved. jonathan bell from stanhope capital stays with us here on the program. coming up, we speak to the reserve bank of chicago president. manus cranny is in dublin to conduct the interview at 3:30 u.k. time. plus,philip blake -- philip blake in 30 minutes time. that and more still to come on the european market open. this is bloomberg. ♪ ♪ welcome back, you are watching the european market open. european stocks sensibly higher. upon the stoxx 600, the ftse 100 and the dax and the cac up by about .1%. checking out what is on the rise. the biggest gainer on the stoxx internet around the consolidation story in german telecoms. vivendi doing well, up by 4.2%. numbers out of numberore come up that is down by 5% at this stage of the trading day. another stock trading weaker this morning in europe, down by 3.1%. we have others trading up by 10 and half and 9.5% respectively. i am here. obviously, outside at the g7 meeting in barrio. finance ministers and central bankers, as well as european union commissioners. i spoke with economic and monetary affairs commissioner pierre moscovici. he says macron's victory in france is strong for europe. lookingnk germans are -- and whoever is the next german chancellor will be a strong, dedicated leader. matt: still with us is jonathan bell and we spoke about the possibilities for germany, what it means for europe. we're also talking a lot about greece and moscovici seemed optimistic about that. does that mean the euro looks a little undervalued versus the dollar here? course, foren of greece, europe was overvalued. about 20% lower than it is today. us,all, for the rest of because we have growth and for the first time we might be starting to think about what is happening to monetary policy in europe, we going to have an end to qe? and then, at what point do interest rates start going up? that is a change from u.s. interest rates rising in europe -- you will never see interest rates rise. that is the beginning of a narrowing, could be positive for the euro in the store term. -- short-term. anna: we have heard from wolfgang schaeuble are who seems convinced the ecb changes course in tightening policy. he is not holding his breath are waiting for that anytime soon. how quickly? jonathan: it is not quick. we saw how quick it was in the u.s.. there was a great wait until the next. up andpe, rates may go then it is probably a year after that we see the first rate hike. very slow, but the beginning of a move back to normalization. matt: when do you see that discussion starting? the next ecb meeting will be in estonia at the beginning of june . you think that is when mario draghi starts to join the discussion everyone else is having about policies? jonathan: he has already indicated that things are better and the risks to the downside aren't as much as they were. we have already got the beginnings of the conversation that at some point, we will have to look at things going higher. the problem at the moment is there is going to be no significant change in wording, but it is the gradual changing wording we will have to take note of and in december, have to see if qe comes to an end in europe and that will be another significant stage. anna: interesting to watch the signaling from the ecb, just as it was the bank of england yesterday. mark carney trying his best to sound more hawkish against the market. upside inrisk to the interest rates, but given the reaction in the pound and other assets, the market wasn't buying it. jonathan: his talk of, if we have a smooth brexit, seeing a smooth brexit at the moment is quite additional -- difficult thing to envision. difficult to take the government's central scenario as its scenario. i can see why he is saying that but -- >> and we have this slight change in growth forecast, the reduction to 1.9% and balancing that with the slight upticks next year and the year after. the issue is going to be for currency and vectors -- investors, how these negotiations transpired and whether we have a harder brexit that could push the pound back to 120 whether at some point, the deal is done. fall in sterling last year and now it is a question of where does it get its balance? it will be volatile both upside and downside and for here. matt: what does this mean for u.k. companies? is a beneficiary to companies who have so much riding on exports. jonathan: yes, and we saw the boost in the translation effect of u.k. companies and that is why the u.k. market did well last year on the translation of having seen sterling fall. what we haven't yet seen is the export boost that you would associate with a weaker currency. that takes longer to come through and it will be interesting to see as that develops, how that transpires rather than just the translation boost. clearly given that something like the ftse at 80% earnings come from outside the u.k., there is also -- always a big translation effect. sterling weakens, you can expect to see companies benefit. stays withhan bell, us. 8:17 in london. in italy. president trump says he plans to -- planned to fire director comey all along despite recommendations from the justice department. details on that next. this is bloomberg. ♪ ♪ matt: welcome back to "bloomberg markets: the european open." i am in italy for the g7 meeting where we are waiting for steve .nuchin to enter the palace when he does, he will meet with all of the most important finance ministers in europe. italian finance minister is inside as well as the german finance minister, the french finance minister and even the japanese finance minister kuroda. a number of other officials are in there. steveine lagarde, so mnuchin may be a little late to the party right now but we will pay when he comes. let's get the bloomberg business flash with juliette saly in hong kong. improved operating performance and agreed to sell a resilient still plant. the company said earnings before interest in taxes excluding one-time items will be 1.8 billion euros in the fiscal year through september. thyssenkrupp has made a broad array of changes in a attempt to turn it into an industrial group. online services provided united internet is -- has agreed to take in troll of another company. a 17% increase as the deal competes with larger rivals deutsche telephone and vodafone. vivendi plans to take over french advertising company in a 3.9 billion euro deal orchestrated by a billionaire who controls both businesses. 9.25 euross offered a share. it will combine vivendi's media 'advertisinghavas market. game maker net marble with a high growth alternative to the traditional injury -- industry. the company now has a market value of about $12.4 billion. surpassing lg electronics. founded 17 years ago, net marble is a rare entrepreneurial success in a nation dominated by politically connected manufacturing conglomerates. barclays ceo jes staley has responded to emails from an imposter pretending to be chairman john mcfarlane. according to the financial times , he criticized a shareholder who threaten to oust him at a meeting on wednesday. the ceo responded, weise -- we praise the mcfarlane's, guitar tohim on the eric clapton. that is your bloomberg business flash. anna: still a fantastic story, thank you. i am told if you are to be compared to anybody on the guitar, that is not a comparison -- bad comparison. and the fallout from firing director comey. nbc, trump offered a different account of events. was goingdid was, i to fire him. my decision. >> you had made the decision? >> i was going to fire comey. there is no good time to do it, by the way. he is a showboat, he is a .randstand are -- grandstander you take a look at the fbi a year ago, it was in virtual turmoil -- less than a year ago. it hasn't recovered from that. president trump also rejected claims he has involvement with russia. >> i have nothing to do with russia, i have no investments in russia, none whatsoever. i don't have property in russia. people thought i owned office buildings in moscow. i don't have property in russia. into -- total compliance in every way. jonathan bell, cio at stanhope capital is still with us. we learn all the time more about the way the white house is operating from these episodes and now investors -- that is what we need to learn from this, how we operate and how his agenda is. this something that could distract from the agenda investors want to see delivered around tax reform and other matters? jonathan: absolutely. what investors want is tax reform and there he needs the agreement of congress to get the package through. at the moment, his relations with congress aren't great. sacking james comey isn't going to make them any better. the problem we have had is with this trump reflation trade we had after the election, i still think he will get tax cuts through, but it is just pushing it back the whole time, and so that is a negative for the market in the short-term. matt: if we start to see more political turmoil, jonathan, that hasn't seemed to affect risk assets at all. but if we get problems with the administration in power, is that a very bad signal for u.s. stocks or can the markets shrugged it off? jonathan: i think the markets can shrug off quite a lot. the problem is, how do you get momentum going forward to carry on rising, rather than maintaining where we are? we are in a low growth environment, we are in a low interest rate environment and in one, you can suggest higher multiples to stocks. on thisg we are focused year is real growth -- growth coming through. it like about the first quarter in the u.s. wasn't just the earnings growth, but the revenue growth as well. it was topline growth rather than just bottom-line growth. what the market was hoping for is a better pickup from tax cuts, and a stimulus. if you don't get that stimulus, revenue growth slows, tax earning growth slows. the market can't go further forward. we talked about europe earlier. i think in europe, you still have good potential for a recovery in revenue and -- >> jonathan, thank you very much for your time this morning. at stanhopel, cio joining matt and i on the european open. coming up, we speak to the central bank of ireland's governor. this is bloomberg. ♪ ♪ matt: he's risk in the rearview mirror? the eu commissioner tells bloomberg the eu is on firm footing following the french election and will be fine the matter who wins in germany. is the euro project back on track? we are live at the g seven in italy. fbi fallout. president trump says he would have fired james comey even without recommendation from the justice department. his comments contrast from earlier assertions from the white house. flying high as vivendi offers $2.4 billion for the advertising firm. will the markets see the benefits? morning, welcome to "bloomberg markets." i am matt miller at the g7 in italy alongside and edwards at the european headquarters in london. anna: great work on the ground over there in bari. we are 30 minutes into the trading day in london. let's have a look at where we are on european equity markets. stoxx 600 up .2 percent. asian session weighed down by concerns on the u.s. consumer and the u.s. session to some concern. european markets seem to be in finer form this morning. a little m&a move keeping investors interested. u.s. futures suggested to be down at the start of the u.s. trading day. keep that in mind. i have pulled up the mov function on the stoxx 600 on my bloomberg terminal. we have united internet trading up by 9.4% on the back of the news around this business. some interest in m&a in that particular group. vivendi up with m&a in mind. if i look at the downside, mattelting to see trading down. down by 5.6%. those stocks trading a little weaker. richmore down by 5.2% on the back of numbers coming through from that luxury goods company. so, we are going to talk now about what is happening in ireland. are joined by manus cranny at the aci world congress in dublin and he has a special guest. manus: i have indeed. good morning. sorry i couldn't join you at 6:00. we are at the aci conference in london -- dublin. philip lane has taken time. ireland joins at us. i see the cranes are up, i see this momentum in town. how strong is ireland right now? philip: the irish economy is growing quite well. employment is the most important indicator, it has gone from 2% to 3% a year. down, currently to six and maybe five later this year. very robust recovery. 10 years since the crisis, the irish economy is doing quite well, driven mostly by domestic factors. recovery in domestic consumption, now investment as you have seen by the cranes. it is important to say this is a classic recovery from a financial crisis. we think it is a very solid recovery right now. manus: there are risks and you and i did a panel on brexit recently. i am paying my check tonight in pounds, effectively. the pound is down, visitor numbers are under pressure. brexit is already manifesting itself economically? philip: sure. when the sterling moves against the euro, that is a big deal even the extent of trade and tourism, and so on between you can ireland. in a situation where the irish economy has a very strong domestic, we can currently absorb a lot of that at the macro level. individual sectors, it is a big , but right now for the overall economy, there are a lot of other factors. frexit is definitely an end -- exit is definitely a negative, but it is not the dominant fact in the irish economy at the moment. manus: yesterday we had another governor of the bank of england, i am not modeling a hard brexit. are you modeling at the bank of ireland a hard brexit? philip: we have to look at every scenario, the difference for the bank of england, they have to make a policy decision. as part of the euro area, our policy decision in frankfurt at the governing council is for the euro area aggregate. our work is in forecasting the irish economy and thinking about financial stability risks. for financial stability's assessment -- assessment, we definitely do a look at hard brexit scenario. let's talk about the upside. and seey -- i come back the docs where we are downtown, it is growing. the number of institutions that could come here -- are you being overly cautious in your welcome? some people are saying, we had conversations, they are not that open. respond. philip: i don't think that is accurate whatsoever. what we say consistently is it is an eu single. whether you are looking to come to dublin or someone else in the eu, the regulatory regime will be the same. that is all we are saying, we will provide a consistent regulatory approach, which is going to be the consistent and european approach. the good news is that the eu -- my impression is the regulators across europe are probably trying to keep the same profile. it is a single financial system and a firm who needs to find where to go needs to think about locations, workforce, whether, taxes and so on. they don't need to think about regulation. it will be the same regulation across the eu. manus: let's talk about the ecb. we're withinonday reach of describing risks in europe as being broadly balanced. mr. gandhi says we are firming with a upswing. your assessment? after a prolonged period of the governing council emphasizing that if you like the risk, work the downside. that remains the case. the pay risk is fading. if you like the risk of deflation, that is fading. ands accurate to say -- what we said in the press statement a few weeks ago. still to the downside but the direction is moving more towards balance. that is a new off position, but it remains -- especially for inflation, which is our core in -- objective. inflation around the world, we have an issue of, how weekly will inflation recover? the real economy is recovering. what we have to see is how does that map into the recovery. at theeveryone picks nuances. despite the choreography of what comes next, for the whole of europe, is it possible it should change? the you see any propensity for movement in the choreography at all? providethe ecb tries to forward guidance. -- and itonsistence is important for markets to hear the consistent message. a lot of forward guidance in our monetary statements and that remains in place. the market has a lot of for guidance to deliver it. that the important consistency is maintained. in the coming months, more data will arrive. based on what we know now, the current guidance is in place. manus: you are the head of a task force, looking at the potential for sovereign bonds for they securities euro area. this must be one of the hardest jobs in europe because i can't see the germans giving you a hug. philip: this is a technical task force. we are working away. i think we are solving a lot of technical problems and later in the year, we will come back -- >> do think there is an appetite for that type of move, governor? philip: i'm not thinking too hard about the politics. of it. there are a lot of. -- there are a lot of technical aspects of it. from the future point, the european authority will have to take a look about -- look at theher this is something european system wants to advocate for. right now, it is a preliminary step of working out the feasibility -- the technical questions that arise. manus: governor lane, i wish you well at the conference today. mr. lane giving us some time today. we will have conversations. we have chief executives joining us. we will have a conversation later in the afternoon with mr. evans from the fed. these governors of federal -- central banks are hard to get to give you clarity, but the governor has helped us along the way. anna? anna: interesting conversation there with governor lane. manus cranny, thank you. coming from dublin and the conference underway. if you are a bloomberg customer, use the tv function. regulart just get the screen, you get the little extras on the side. all the charts we are using, summaries of what is being discussed on air. all of that is helpful. you can get in touch with the producers as well. you can ask a guest the question. up next, as german voters prepare to go to the polls in sunday's election, what could the outcome mean for chancellor merkel? this is bloomberg. ♪ ♪ matt: welcome back to "bloomberg markets." i'm matt miller in bari, italy. i want to get more with the bloomberg business flash with juliette saly. u.s. has reached an agreement that china should provide greater access to american natural gas exporters as part of a broader effort to begin reshaping the trade relationship between the worlds two largest economies. the agreement covers 10 areas where trade negotiated from the u.s. and china have reached consensus, including agricultural trade and markets for initial services. you will be speaking with wilbur ross about that deal at 1:30 p.m. u.k. time. in the u.s., president trump has fired -- described james comey as a grandstander and says he would have fired him no matter the recommendation. his remarks departed from explanations given by white house officials earlier in the week. he told nbc the fbi has been in turmoil for months and that comey was not the right person to help it recovery. was, i was going to fire comey. my decision. i was going to fire comey. there is no good time to do it, by the way. juliette: global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. matt? matt: thanks very much, juliette. make it a sense of the national mood when voters of the country's most popular state goes to the polls on sunday. her party is put one point ahead of her opponents come of the social democrats. the outcome of the regional election could give an indication of whether or not the electorate will give her a fourth term as chancellor in the national vote in september. bloomberg's germany government editor has more on this in berlin, with us now. tony, a very industrial state, traditionally an std stronghold. how does it look for this sunday? like merkel -- or her party in this case, since she is not running herself obviously, that the cdu could pull out a victory here. which would be a big upset. they have only done it once before in this state in 50 years. showing you how much of a social democratic stronghold it is. and the polls to suggest that the government that is in power now, which is led by the spd would not have the majority. would be voted out on sunday, if the numbers hold up. we will watch what happens on sunday and make the necessary read of the vote in december. -- september. gdp figures out this morning. 0.6%, what does that tell us about the state of the german economy and the broader euro zone economy? tony: i guess it tells you two things. germany is still the anchor of the eurozone, which is not much of a surprise. it also tells you something about miracle's -- the decline surrounding merkel's campaign for a fourth term, it is a feel-good economy. you can certainly say that voters are not always driven by the economy, but there is no sense of economic trouble in germany that would give you a move for change if you like. that is obviously a plus for merkel as well, and as we know and have reported many times, unemployment in germany has been a record low -- at record lows for months or even years now. so it is all adding up to a very good picture for the incumbent, i think that is safe to say as we head towards the election in september. tony, thank you so much, coming from berlin. live with the latest on the regional vote in germany. there has been m&a action overnight. vivendi has made a bid for the ,rench advertising firm havas united internet has been great to take control of drill it. offer for a purchase into structures. a bloombergd by reporter. what is driving this? what is driving this m&a news? >> some of it is better broad data and in france, for instance, even though the first quarter -- m&a was the most they had seen in 10 years -- there was a lot of leading up to the election because people wanted to make sure they weren't getting into a deal that was likely higher risk, so the outcome wasn't good. now that has gotten out of the way. there is more confidence in the eurozone with who we have in power in france now. companies are thinking, how do i consolidate? if you look at all three of the deals we have talked about this morning, they are all original european.- regional you are looking at skill within european market. matt: how are the buyers financing these deals? there a common thread here? ruth: a lot of these deals we are seeing are a mix of cash and shares. it is not that financing markets are flush. some of them, not a deal today, h&m,he chinese acquired they have financed all of that through debt from a bank. you are seeing some stock, some cash and then maybe they go to the markets and raise money through capital increases. it is not like risk appetite is totally gung ho, but it is a mix of both of these things. anna: we will see how shareholders come out on these deals on how supportive they are as we enter the coming days. ruth, thank you so much, joining us from bloomberg news deals reporting team. in the fight against u.s. shale, it might have to be lower for longer for opec. we look at the cartel's uphill battle. that is next in the european market. this is bloomberg. ♪ ♪ matt: welcome back to "bloomberg markets." i am matt miller at bari at the meeting of finance ministers. we are awaiting steve mnuchin. we are told he will be here in about 30 minutes time and we will bring you those pictures and any comments he makes live on bloomberg television. right now, we want to get to a story on oil because it has been such a huge mover lately and really, has the ability to swing these markets. anna: exactly. let's to you what is going on in the oil markets. oil set for its first weekly gain in a month after dia data shows u.s. inventories dropping the most this year. an unexpected surge in supplies set to derail opec's plans of phasing out its out cut -- output cutting regime. a war of attrition for u.s. shale. correspondent,y great to see you this morning. digging in, more cuts to understand -- to come. >> they are having conference calls and realization is opec has been surprised by this trend of u.s. shale. you look at last year in july when opec took a first look at how 2017 was going to look for shale and non-opec suppliers in general. they thought they would decline by $100,000 a day. this week, they it knowledge they will increase by a million barrels a day. hence, opec is preparing for a longer war against shale. what he 17, across but increasingly it looks like it will also be in 2018 next year. how low -- what kind of prices can u.s. shale bear? where is the profitability line? isthe main problem for opec that number has been falling down significantly over the last three years. -- weuld think that shale thought it was only going to be profitable around $75 or more three years ago. forit is around $50 reinvesting and some companies say once the investment is then, they tend pump oil at 20 dollars a barrel. that does not mean good news for shareholders, but companies can generate more and cover their spending. deficiency has increased significantly. anna: this chart shows u.s. oil production rebounding. >> probably continues, we have had 16 weeks of interrupt -- uninterrupted increases and at some point, -- that number rebounding is going to continue and at some point, mid next year probably, we're going to see that chart on the screen at $10 million a day -- day, that would be an all-time high. increasingly the focus of the market is not on the second half of 2017, but next year. anna: thank you very much. very exciting stuff on the oil markets. stay with us, "surveillance" is next. president trump: he is a showboat, he is a grandstand or. the fbi has been in turmoil. blastsesident trump james comey and said that he planned to fire him regardless. country's most popular state both this weekend in the last election in the warm-up for angela merkel. staley slips up. the barclays

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