It is that we have a broken political system we are trying to understand. How did it get to this situation you have with the divided party and what are the repercussions in europe . We are just trying to figure out where it goes and what it means for us here in europe. Tom i totally agree and particularly nation to nation as may makes a visit to merkel today. Now to our first word news, heres taylor riggs. Taylor Donald Trumps son announced that he had the number of votes needed to win the republican nomination. His son says that as president , trump will not take no for an answer. I know that when people tell him and cannot be done, that is when he guarantees it can be done. When someone tells him something is impossible, that is what triggers him into action. Taylor the convention also nominated mike pence. There will not be any hard targeting when theresa may meets with Angela Merkel. Merkel has said there will be no concrete negotiations until the u. K. Triggers the clause. May and merkel will talk with reporters later today. The crackdown is widening in turkey. The government has dismissed 15,000 teachers and demanded that all University Deans resign. Some religious moment resort minorities wary they are being targeted. There is word the u. S. Government is on its way to launching one of the largest asset seizures ever. The papers says they will try to seize more than 1 billion worth of assets but with money allegedly misappropriated from the firm known as one and be one mdb. The president of taiwan is urging a structural overhaul to fix their slowing economy. He says the conventional policies have had limited impact. Has contractedy now for three quarters in a row. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Hans,ets go to equities, currencies, commodities bonds, currencies, commodities. It is endless with yields stable, yen was 1. 09 when i walked in the door and you can see the weakness. Oil most interesting will do that. Vix, 11. 71 is extraordinary showing the good news and the dow and 18,600. Sterling was a 1. 30 handle earlier. We have some dow strength. Guy it is because we have seen agents report, this is the equivalent of the beige book. Sharp slowdown in Economic Activity following the brexit vote. May use this a little bit more this time around in setting policy. Policy. As you can see the euro is [no audio] going to run pimco. He is going to run pimco in california. Tom when i noticed yesterday was wells fargo of america buying that building at 33 central down by our new art office we are building. What an extraordinary statement on the future of london to see wells fargo, in. Lets go to the surveillance wall. Guy johnson has got this tattooed on his left side. This is sterling zurich. Strength,gterm swiss the green line is the remain thrust before brexit. There is the vote circled. Sterling, andek we are into this entirely incredibly tight tenant trading range. Guy it is going to be interesting. Does it break on the upside of that wedge you have on the chart . Are talking about a bounce and whether or not the bank is limiting that at the moment as we await policy from the boe. Let me show you another chart we have here. Got, this is the Turkish Stock Exchange and what we are expecting according to guys, what we are looking at is a potential 18 decline in stocks. When the close goes below 200, that is what you tend to see and that is negative news for the turkish market. Lets get a broader approach. Lets bring in gilles moec. Up,ave the ecb coming brexit conversations happening today and tomorrow. Set the scene for me. European economy and how much of this political noise as frustrating where the economy is going . Gilles the economy was doing ok before the votes and will probably continue to do kind of ok. If you look at all indicators pertaining to domestic demand the eurozone is doing all right, surprisingly given the fact that the nation environment is not utterly supported. The euro has weakened a bit but not enough to change the picture. What is central i think to understand what is going on it innow is a lot of domestic demand can be traced back to fiscal relaxation. Upset the lack of traction we are getting from the outside. It is set to continue but as a dition, we need mustreadas a morning a little bit later in the program. It is true that at the moment when you look at the response of the private sector to the stimulus in europe, not much happening. If you look at the Financial Behavior of the corporate sector what is striking is that they continue to say more and invest less. Less. E more and invest i think the reason why they are doing that is because they are still traumatized by two episodes of credit crunch in 2008 and 2011. We are in a situation where Monetary Policy can help by making the fiscal relaxation acts on as it directly corporate behavior. Tom in the years of bloomberg surveillance, that subtlety of yours was absolutely brilliant. Lets go back and review. I guess i am mccains he and but then i am french. That is absolutely classic. Lets bring up a chart for the canzian from paris. That blue circle is were going to parity, everybody is on board. What happened . Why did we not go to parity months ago . Gilles it is hard to take a currency significantly weaker when you have an increasingly structural current account surplus. This is the situation we have in europe. We are not dependent on the rest of the world to fund ourselves. As long as you are not dependent on the rest of the world you can actually maintain a fairly stable or even a strong currency. Another issue i think is we kind of knew anyway where the ecb was going. There is no big news there. We know the ecb wanted to be accommodative and has given us formal proof. What has changed is the fed. Fed has happened is the been notoriously less hawkish than everyone expected so from a european point of view, not much has really changed. Tom gilles moec with us for the hour, thrilled to have him with us. Breaking news right now, vw with all the turmoil including the articles yesterday about senior officials being involved, vw with a little bit higher profit than what a lot of people were expecting. Many German Companies reporting half statistics. From new york and from london, this is bloomberg. Guy i am guy johnson with tom keene. Tom was mentioning before the break what is happening with vw, out with some news. Vw says profits higher than analysts had expected. They are guiding the stock higher and as you can see, vw in frankfurt trading up by 5. 71 . Tom guy johnson, thank you so much. Day two of the Republican National convention is over. Democrats when after it, republicans went after it. I like what the New York Times said about it. She is our presumptive person with no sleep, or tall of joins lev joins margaret ta us now. What does trump need to accomplish today . In its to build on the gains that he tentatively made yesterday and moving the bond the Melania Trump controversy. He will be introducing mike pence. I should say mike pence will be introducing himself but there will be this high of some loose ends. Ted cruz and marco rubio among those speaking and the question is, how far they willing to go . Tom i want to get a civics lesson for me right now. I with thunderstruck at how empty the arena wasi with thundw empty the arena was last [no audio] margaret it is really not, this is only been my third year of coverage and veterans were saying what is the deal . They were thunderstruck as well. It should not be in prime time there are empty seats and this is an organizational problem as well as a unity problem. Tom tell me about the attention of mr. Trump and mr. Pence. They are going to raise their arms way up in the air, high like i am doing right now. They really getting along . Margaret mike pence is trying to tread carefully and figure out what his role and his case is. As long as they continue to attack Hillary Clinton they are fine. As they get into the policy this has the potential to break down. Guy just talk a little bit about where this goes from here. ,nce all of the delegates exit go out into the world and try to figure out how they formulate policy,ow does the message change before to after . Margaret two things will happen. The Convention Action moves to the democrats and a few days and it will be Hillary Clintons week. Also we saw governor Chris Christie last night leaving the crowd in chance of guilty, helty, insinuating that committed criminal activity. The republicans need to calibrate how much is enough and how much is too much, and this will be a big challenge as they continue to grapple with their own unity before they can get to the policy questions. What is their attack, what is their approach . Tom margaret, i think you are dead on. That was viral last night, the idea of how much is enough. Thank you for staying up into the wee hours of cleveland. For more perspective, with all due respect, John Heilemann and Mark Halperin tonight. From london and from new york, this is bloomberg surveillance. Guy i am guy johnson in london with tom keene in new york. Lets talk about what is happening in europe. Theresa may takes brexit to berlin today. She travels to meet Angela Merkel for the first time after taking office. Merkel has said she will not begin any negotiations until the u. K. Has triggered article 50. Alan crawford covers the european government for Bloomberg News and joins us from berlin. He quite literally wrote the book on Angela Merkel. Onse two women should get absolutely spectacularly. They seem to share the same approach to life, i have similar background. How do you think it will go . Alan i think definitely the are both extremely experienced politicians, daughters of church ministers, they are both from the conservative wing in european terms. Merkel has a history of getting along fine with various political leaders. She was friends with george w. Bush, nicolas sarkozy. She gets along with Hillary Clinton and even managed to make friends with alexis tsipras. On a personal level i think that is not really the issue. The political substance could be a different matter. Guy lets talk about that. Brexit the umbrella under which everything happens. How much will we learn today about where the red lines are for both sides . Think we will essentially learn an awful lot today. I think this is very much about sizing each other up. Theresa may has a lot of explaining to do to Angela Merkel and the German Government who really do not understand what direction britain is going in. I think that they will agree to hold off in terms of any detailed discussion on policy. Tom this is a generational thing i would suggest. Conrad andg way from margaret thatcher. The sense that generational change . Is this a moment in International Relations or business as usual . Alan i think it is the latter. Merkel famously had a very Good Relationship with David Cameron who arguably is the next generation from theresa may, but as i said, i think they come from the same political family so they should in theory get along. There are fundamental differences in their outlook toward europe that i find it hard to see them reconciling that easily. Tom Alan Crawford from berlin this morning, thank you so much. Gilles moec with us in london. The distance between london and germany, there is a lot of different nations in between. How on the same page is chancellor merkel with the rest of her europe . Gilles it is hard to say because we do not know what kind of opening we have from the u. K. , we do not know what the strategy they are going to push through. It is tough for the europeans to forge their own strategy. If you look at what has been said by the various leaders, my guess is eastern europeans are going to be focused on free circulation of labor. They want to guarantee the rights are there. My guess is that germany is going to be interested in securing ok access to the they arearket and probably ok with a lenient treatment on the trade relationship. At the moment it is clearly trying to be on the offensive on ofing to get some chunks london towards paris. There are also the tactics that will play a big role. France is going to have an election in may. Brexit is actually a big issue now for france. We do not get a resolution on the french election, my guess is that harris will be very tough. Paris will be very tough. Important,is more the meeting with Angela Merkel or Francois Hollande . Gilles theres not much to say because as long as we do not exactly know what it is the british side wants guy does she take a different message to those leaders . Gilles with france, there are issues to discuss. France and the u. K. Are very close Strategic Partners and something that does not play a big role in the relationship with germany. If you look at military spending in europe, france and the u. K. Are the top spenders and are engaged in corporation in cooperation on military issues. Security council members, etc. We are going to talk about the surveillance. Up next, Simon Derrick joins us. The pound is on the move. We will talk about that story, and the chinese currency as well. Tom good morning, everyone. We are watching Foreign Exchange with stronger dollar, weaker euro. Fx is where the Market Action is. To our first word news. Taylor almost no one gave them a chance gave him a chance more than a year ago when he announced was running for president but donald trump is officially the nominee. His son made it official speaking from the convention floor. To be able to throw donald trump over the top in the delegate count tonight with 89 six fors, and another john kasich. Taylor the convention also nominated mike pence for governor vice president. Francois hollande has cautioned the france france do not give into panic. Growing criticism of his Counterterrorism Measures following the attack last week and nice. More fell out firm reports of widespread doping regarding russian athletes. The Olympic Committee will not admit any russian officials into next month plus games and will rule on whether any russian athletes can take part. Is headed for a constitutional crisis. The National Assembly has llenged the party of the the power of the party. The assembly is studying whether to appoint its own judges. President obama is promising to do more to protect police after a rash of fatal shootings. He published an open letter to law enforcement, trying to counter criticism he is to in different to the plight indifferent to the plight of police. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Guy thank you very much. President erdogan is meeting with his top officials since the failed coup last week. He has said he will make an important announcement afterwards. Joining us now from istanbul, how far will he go in this potential crackdown . That is the question that everybody is asking and i think these meetings today, it is the National Security council that he is meeting [no audio] announce. Hat he will all that we have from a source within his office saying it will be a good announcement to improve social cohesion in the country. At the same time, the purges are going on. A lot of people are losing their jobs and there have been a lot of arrest. Tom in the comparisons with mr. Putin, help us with this. How close is a comparison of mr. Erdogan with mr. Putin . Are making of people that comparison because president erdogan has made it clear he wants to move to a more president ial system. They switched jobs, Prime Minister, president , but in turkey, we are not there yet. Formally his position is still a ceremonial post but it is very clear, he is the dominant political power and people are wondering whether he is going to use this to push through those changes to turn it into a president ial system. Fascinating isd the speed of change over the last 72 hours. I know your head is spinning. What are you focused on this morning . Attributee turkish that you are most curious about . I am totally focused on these meetings today. We are really keen to know what is going to come out of it. Historically when the National Security council has met it has taken hours and hours so we could be in for a long night of waiting for that announcement. I think what comes out today will set the tone for this country in the years to come. Guy thank you very much indeed. We will watch the news later as it come. Lets focus on the fx now. What happens next with the turkish lira. We are joined by Simon Derrick, and gilles moec still with us. A wide dispersion of views of what is going on in turkey and the market. Simon the first thing you have to say is the Market Reaction within turkey and outside have been relatively mild. Move down and a turkish stock market on monday and further weakness yesterday but still near levels of june. I think the first thing you can say is the Market Reaction has been surprisingly modest. Is it simply about the fact that Central Banks globally are preparing to keep rates at relatively low levels . The interesting bit is perhaps some things are being disguised. What in particular i am interested in is the nature of the announcement that