Transcripts For BLOOMBERG Bloomberg Surveillance 20170323

You have heard about that ongoing investigation. Police in london urging the media not to talk about the perpetrator because of the ongoing nature of what is happening. Tom what will the nation listen for from Prime Minister may . Guy stability. She is the right person in the right job. Her previous job was in the home office, its responsibility this kind of incident. She knows her way around these events. One thing people will be taken away from this is how did such an attack happen so close in central london. How did this man gain entry to the palace of westminster . That is a question that will need answering. Taylor we are starting with developments in londons worst terror attack in a decade. Detectives have been working through the night. During that time, we have searched 6 addresses and made seven arrests in birmingham, london, and other parts of the country. It is our belief that this attacker acted alone and was inspired by international terrorism. People were killed in the attack, including the attacker. 29 others were injured. It began when a car crashed into a fence at parliament after running down pedestrians at Westminster Bridge. U. S. , thek to the Republican House of the Intelligence Committee is offering support for trumps claim he was wiretapped. They nunes said that collected President Trump said he feels somewhat vindicated. The white house lobbied into the night to win passage of the Republican Health care bill. Lawmakers discuss lastminute changes to try to attract house conservatives. A vote is set for today, but republicans have delayed a key procedural step before the bill gets to the floor. Japans government denying allegations linking Prime Ministers shinzo abes wife to a real estate scandal. For weeks lawmakers have been discussing how a group was able to buy publicly owned land for a fraction of the value. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Tom thank you. This is the data out of the bloomberg. Then we will go to london. 114curve is flattening at basis points. Oil with a 47 handle, 47. 17. There is a weight to oil. Will join us on the equity markets. A cell, 19. 03. The peso, 19. 03. Guy any to think about how markets are set up. We have been talking about what is happening on the hill and how health care will affect the future of this administration. Waiting and watching, trying to get a clear idea. In terms of the cable rates, sales data will have a bigger effect beyond yesterdays terror attack. The muscle memory is you do not trade terror attacks. It did ripple possibly into what is happening in france. It is interesting how mr. Macron reacted. Tom heres the polls of the american confidence. The optimism of the 1990s, the Bloomberg Consumer comfort index. Here is the challenge, the great recovery, you wonder where this will be in three months or six months given the legislation and distraction the president faces in 10. Guy i want to talk about ireland. About iron or. Iron ore. Barclays is talking about this significantlyng broken, taking us down in the short term to 70 and possibly dropping to 50. Two things could be affected. Formining sector, look stocks like rios sent out to react significantly. The other is the aussie dollar which moved south. A attention to that one. Westminster, parliament returning to work after londons worst terror attack in a decade that left 4 people dead. Prime minister may is expected to speak at 10 30. Nejra we heard from the police. They have made seven arrests. They know that the attacker was influenced by international terrorism. Alone. Lieve he acted we heard from Michael Fallon speaking on bbc radio. He said we have no specific information about other possible attacks, and parliament is looking into security. It is business as usual, full parliament. Theresa may said that parliament would sit as normal. We are expecting her to address the house of commons as well. Guy the scottish are saying they will do for the vote on independence for a few days. That is something the think about as the situation is normal. How will this ripple into the political story in the u. K. . Is it really business as normal . Nejra on the south side of west in sturbridge, it doesnt feel like business as normal. Polices a stepped up presence. There are men and women on the street and police vans. I have seen three or four in the close vicinity. ,his attack came just one week exactly, before article 50 is due to be triggered on march 29. Questions may be raised as to how this could affect the brexit negotiations in terms of security. We have heard from the french president ial candidate already saying making comments about intelligence sharing between the u. K. And eu. Low priority shift . It comes at a difficult time for the u. K. , politically and economically. Wolftell me about the lone here this seems to be a reaction, this time is different. A lone wolf terrorist attack. How will that change your london . Nejra as you talk about the lone wolf, what we understand is that this attacker drove in a vehicle along this bridge behind me. Knocking in two pedestrians as he did so. The vehicle then rammed into a fence outside parliament. He managed to run through the gate, which was open because mps were going in and out to vote on a bill. The police are saying that this attacker acted alone. They are asking the media not to reveal his identity, though they do know who he is, while the investigation is ongoing. Guy thank you very much. Joining us from the south side of Westminster Bridge. Joining us now, good morning. Muscle memory for markets is short reaction and move on quickly. Does this change anything from an allocation point of view . Kindskind of tragic of tragic events from a market perspective are not very relevant. An awful event, but not something that will have a big impact on Financial Markets. Read,s there any kind of what kind of metrics are you looking for for the u. K. To determine how you position yourself . Andrew who knows. This is experience is not something that usually expect a Significant Impact on market data. A tragic event, but not something that will move markets. , you have pretty good economic underlying data and you have great uncertainty in terms of the outlook. T is an interesting case you have to be pretty humbled because no one is going to have Historical Data to guide in this term. So far, so good in terms of the data. Tom help me with the continent of europe. You have a wonderful heritage working with the United Kingdom and germany. Help the with the benefit of immigration and migration, the core of the debate in the french election. Terror attacks, we dont know. Is it a net benefit to Economic Prosperity for europe . Andrew yes. There is tons of data on this for europe, the u. S. , about the benefits from immigration. In financial services, the London Financial Services industry, International Industry not a u. K. One. You have distributional impacts. If you look at the pattern in the brexit vote, a very different pattern of london voting compared to other parts, the northern part of the u. K. I do not think that anyone is in that much doubt about the benefits from an economics perspective of immigration. Tom thank you so much. Andrew balls with pimco. We will continue from london. Ach coverage, including parliament that is open for business and working. We will perhaps hear from the Prime Minister of the United Kingdom. Kevin cirilli is with us twice join us. Ny dwyer will an update on the reticence about the great bull market. From london and new york, this is bloomberg. Guy flags flying at half mast. You are looking at a live shot from the south side of Westminster Bridge, the waterloo end, looking back at the parliament. The bridge is closed as they continue their investigations into what happened. Nine 30, retail sales data, 10 30 we will get theresa may making a statement to parliament. Global audience, we will do everything we can to keep you uptodate on these moving events in the United Kingdom. We need to go to an exceptionally busy washington. Kevin cirilli, thank you for joining us. I know that politicians are late into the night. What were they doing on health care at 10 00, 11 00, at midnight . The negotiations continued last night, and will continue this morning as President Trump and paul ryan are trying to lobby the House Freedom caucus, led by representative meadows and representative jordan. These are 2 conservatives who trump has singled out. They cannot lose any more than 21 house members. Right now they dont have the vote. You is this the same whip have seen for years and have read about in the history books, or is there something unique . Kevin this is different than operation in the past. Our sources tell us President Trump and speaker ryan have dangled everything from Committee Positions to political promises in an effort to get folks to back this bill. The negotiations at the white house will continue. House Freedom Caucus members will meet personally with President Trump. This will come down to the wire. Guy good morning. If they are struggling with this, how tough are the battles to come going to be . Kevin that is where this gets interesting. If they cannot pass a Health Care Reform in the house of representatives, and with the russia question continuing to be raised, a Bipartisan Committee focusing on that, that would significantly weaken this administration as it looks to accomplish other legislative items on its to do list. They could not get the tax reform unless they pass health care. The pitchrt of according to sources i am speaking with. Want to weaken this president on the first major legislative priority of his administration . Guy thank you. Ballsget back to andrew from pimco. If the president fails here, what about reflation trade . Andrew a lot of us talked about fiscal policy. You know they devoted a huge. Ffort to Health Care Health care is a quagmire. We have scaled back our expectations in terms of fiscal policy in the u. S. Reflecting and push back the timing reflecting this initial focus. A little about infrastructure spending, they have ambitions in we have taxes, but scaled down our expectations and pushed it back into the future. It is an issue when equities were priced at an optimistic interpretation. Guy what is that mean for the portfolio . There was a lot of good news priced and in the u. S. In terms of expectations, in terms of reflation. It seems likely you will have less fiscal policy. Balanced against that, we have too crazy oning the traits i. I put on the trade side. I think we have a slightly more on thetic view possibility of a trade war with china, for example. Developmentositive as well. The focus on health care is something that will make us scale back the broad fiscal package expectation. Investment,world of help me with the idea im supposed to own bonds. The textbooks say im supposed to own bonds, but rates are going up and prices of bonds are going down. Why should i own bonds . Andrew you say the textbook will show you the benefits of diversification in terms of your portfolio. For surprises is in bonds. Hopefully we will be on a better track in terms of the u. S. , equities current valuations have been underpinned. If you have a big surprise, an awful event in london yesterday, clearly, there are benefits in terms of diversification of the portfolio. We at pimco would argue in the current environment u. S. Bonds look attractive compared with the rest of the world. The higher level of fields in the u. S. When you compare it to the u. K. , europe, japan, you actually do have some real hedge in terms of your risk assets if you have the u. S. Fixed income. Tom thank you, so much, for being with us. It is a somber london. We will hear from Prime Minister may through the morning. Vicechairman, a professor and expert on regulation from harvard law. Hal scott will join us. Widely considered a candidate for the regulatory position under chair yellen. From new york and london, this is bloomberg. Guy johnson in london, tom keene in new york. We are joined in london by. Ndrew balls from pimco i want to talk about the wider picture. You were talking about the gravitational effect of the zero Interest Rate arena that we found ourselves and for so long. The fed, remarkably being successful in getting away from that. Andrew the u. S. Outlook looks pretty good, as long as it is looked at for a long time. The fed has gone away from zero bound expectations for rate year, maybe this for next year. Normalization there. Two big uncertainties. The rest of the world is not doing as well. How can the u. S. Normalize when the rest of the world is dragging them down . Then the trump administration, the impact in terms of the dollar and the u. S. Administration attitude towards the dollar. The natural way this happens, stronger u. S. , normalization, stronger dollar. Uncertainties in the rest of the World Holding the u. S. Back, and how the u. S. Administration would react. Have aalth me that we divergence in Interest Rates. Helped me that we have a divergence in Interest Rates. The great transatlantic diversion will continue . Andrew when you look at the european government bonds, look the spread is historic. The u. K. Has brexit uncertainty, but the growth path looks ok. Europe, by low european standards, is growing above trend. The ecb will want to go normalize. From our perspective, u. S. Interest rate risk looks attractive versus the rest of the world. You will see that reflected in our portfolios, long the u. S. Underweight everywhere else. Over time normalization policy in europe, possibly by the boj, another issue the Global Financial markets will have to deal with. Normalization of Monetary Policy conditions after seven years of or eight years of extraordinary support. Guy thank you for spending your precious time with us, andrew balls of pimco here and we will be talking stocks in deutsche bank. That conversation, coming up. Tom good morning from new york and a somber london. Tom keene in new york, guy johnson in london. If you go from parliament with Westminster Abbey on your left, you go to new scotland yard. They will have a moment of silence at 9 33 . Guy absolutely. They will be thinking about their fallen colleagues, thinking about what his and his familys loss. Taking about how security will work Going Forward from here. This is an emotional and personal experience. It is going to be something we will focus on a lot as we think about the story Going Forward, how parliament will react. About whatving event is happening in london as we wait for the minute of silence. We have u. K. Retail sales, the pound is moving on the back of this number. We have a beat on retail sales that have come through at a 1. 4 number versus a point for expected. There is concern about what is going to happen. The pound continues to sink, or has stabilized. We will continue to watch this. Politics is front and center. Tom lets go back to our moments of silence with the economic data, the officer of the metropolitan police, overlooking they been as well overlooking big ben as well. Ladies and gentlemen, as we minute ofhave our silence. This morning, we gather to join our thoughts and prayers for all victims of yesterdays incident. We give thanks as we remember and honor of sites being held by the metropolitan police as they remember their fallen beinggue of silence held by the metropolitan police as they remember their fallen colleague. Active business, that is the message that needs to be sent. Tom it is a Different Police force. Back to 1899. We will continue a moment of silence in the house of commons. Order, order. The house of commons, the pageantry of a somber moment in london. We have seen moments of silence or the metropolitan police for the three dead and 29 when did, including their officer. Then to the house of commons, which i believe will hear from Prime Minister may this morning. Johnson, an extraordinarily different culture of policing in the United Kingdom. It is not new york, it is not paris, there is a unique culture of the Police Officers back to 1899 and robert peel. Guy largely an unarmed one. That will resonate. The officer that was killed was not armed. He died defending and securing the palace of westminster without a firearm on his hip or in his hand. That is something that will be taken seriously. The nature of the lone wolf attacks taking place in london, the basic but Little Nature of the attacks is some thing that the police will be thinking about carefully in how they secure the british capital and britain more largely throughout the nation as a result of likely have learned over the past 24 hours. More on the london attack, theng us on the phone professor and chair of International Relations focusing on at risk civilians and radicalization. Good morning. What lessons can we learn from yesterday . I think the most important one, which the Prime Minister spelled out outside downing street, the importance of returning to normality as quickly as possible. Housecorrect to put the into lockdown for a short time after the incident. It is correct we should respect those who lost their lives through a minute of silence, but we have to return to our normal lives, because we cannot allow those to be disrupted by lone individuals who are deranged or disturbed, and increasingly desperate. Guy you talk about the desperation. This is an attack at the heart of british democracy, at the center of it. The access that was obtained will leave people scratching their heads wondering if the British Security services is as good as people claim. In from theooking outside at the nature of this attack, is it just that this was something very familiar as a result of the attacks elsewhere, or was there Something Different because of the way access was gained . Use of vehicles in this way is becoming all too familiar since the attacks in nice and the german christmas market. The reality is that we all know that it is impossible to secure everyone at all places at all times. The only way that could be achieved is to turn our society into the kind of security states we do not wish from a free and open society. Anyone familiar with the layout outside parliament will know that it was quite possible to drive a car onto the pavement and plow through individuals. Were not going to start detecting pavements, because where will it end . There may be a review of the immediate security into how the individual gained access to new palace yards. That is a matter for intelligence officers. There is a bigger issue for society as a whole. Tom it is wonderful to have you on our program. You work with a joint chiefs of staff in america and singapore. Expert the worlds at warnings. You have tried to shift through the makeup, character, and quality of warnings. How does the metropolitan police, or any police force, discern and distinguish the character of terrorist warnings . Solely ak it is not matter for police and security services. I am in favor of having individuals whose job it is to protect us, because no one wants to sit next to a disturbed individual on a bus, but at the end of the day we have to recognize that a number of individuals concerned show it is problem. A security it is a social problem. Areall of the individuals so disconnected and disengage from society that they think nothing about acting in this way with impunity. The fact that their acts are so barbaric speaks to the fact that they have no connection to any moral community. What it means for the rest of us is more important. On the steps of downing street referredt, theresa may three times to protecting freedoms and freedom of speech. This is the same Prime Minister who as the home secretary introduced legislation to ban certain formsban of speech that could be. Ffensive or site terrorism free speech is not comfortable or easy. It is not freedom to say the obvious or the popular, it means defending people who say unpalatable things, challenging things. The advantage is that it Train Society to address and overcome those forms of expression. If we simply ban them we are creating greater problems for ourselves for the future. Guy we will leave it there. Thank you for your thoughts. Bill durodie. Lets look at the pound. Foreignexchange markets, like we have been discussing, what they are not looking through is the hard data points. Retail sales is one of those. It is a big upside. We have 1. 4 retail sales month on month. On an expected number. The british pound has rallied on the back of this. In semis you could argue a solid british economy should the something in some ways you could argue that a solid british economy should be something that could be against inflation. That could allow the central england, tonk of raise rates. The pound has rallied on the back of this. On a somber day, a resilient United Kingdom economy coming off of last year. Nejra cehic will join us later. Kevin cirilli in washington. We expect to hear from the Prime Minister of the United Kingdom in a speech at the house of commons. We will look for that within the hour. Coming up, we are certain that we have professor slaughter, the chief executive officer of new america at princeton university. Thoughts on our International Relations. This is bloomberg. Guy welcome back. I am guy johnson in london. Tom keene in new york. We continue to monitor events in london. Lets talk commodities. Iron ore could slump. I will show you the charts. That is the call from barclays. That spring in bloombergs managing editor for energy and commodities. Why the turn . Pointing to the chinese Steel Industry. Profitability is likely to trail off. That means the chinese steel mills will buy lower quality grades. Tohave seen prices rally up 95 a ton, they will selloff. Guy we have the chart to show you where we are, the barclays call, the chinese stock price on my bloomberg. Dots are the 70 and the 50 or lets talk about who is exposed to the miners, the difference of opinion between rio and their competitors. Will the two giant australian miners who ship millions of tons, huge mines in western australia, to china. It has driven the rebound in those companies. The hp struck a cautious note, pointing to the fact that they see the value is fragile. Thinks theaid he chinese Steel Industry structurally will tend to using highquality iron ore, like he mines in australia. Tom give us an update on the greater commodity picture. We had a super cycle. The super cycle ended. I have no clue where we are. Are we going down, up, or is it china, china, china once more . Commodities is always china, china, china. People are seeing several commodities markets, a mismatch between sentiment in the futures market among Financial Investors and what is going on in physical markets. Oil, there has been a rally, but mobile inventories in the u. S. Build physical oil markets, tankers, traders, look pretty weak. Copper has been a run up. Theres plenty of physical copper. Youre seeing that the Financial Markets got a little ahead of where the physical markets are. We have seen some sort of pull back. The lets go away from speculators and hedge fundtypes trying to make money and copper. Help me with barrier to entry on the supply side. Are elastic with price. What about aluminum, iron or, are we still bringing in supplies . Copper it is difficult and people are worried about copper supply. There has been no new discoveries. Those minds that are working are producing lower quality ore. People think longterm there is going to be a shortage of copper. Barrier to new supply. Right now, there seems to be a decent supply of copper stockpiles. Guy this is the iron ore story. You have a drop. We have an amazing correlation between the aussie dollar and to really move. Australia is the epicenter of this . Will iron or exports has been a to real trillion economy for 20 years. Massively increased their export benefit to the australian economy for 20 years. Massively increased their exports. Interestingly, in oil, and a lot currenciesexporting have remained fairly immune from the fall back in oil. Maybe we will see that pattern reassess itself. Many keygo, so events. A fantastic function that allows to not only the video screens, but the charts we are highlighting and to get in touch with the team. Use it. A fantastic function. This is bloomberg. After the first televised debate, macron 26 ahead of Marine Le Pen with 25 . If they make it to the second pen willlls suggest le be beaten. Those numbers are fairly compelling. The french population still has not made up their mind. How impressive is that . It is a huge level of uncertainty less than five weeks away from an election. The Political Landscape has completely changed with the 2 frontrunners, neither from traditional parties. Traditional partisan biases have a harder time asserting themselves. Where we are in the french election. I asked this yesterday. We have 4 weeks to go, what does le pen due to get the marginal vote . Is she in paris, the middle of the country, the riviera . Where does she need to win . What she needs to do is to expand her face. It is not a geographical question as a psychological expand her base. It is not a geographical question as much as a psychological question. Le pen sought to reassure people bout her plans for the euro, i will do what you decide in a referendum. It was a 3. 5 hour debate. Askepast midnight. Instinct shows how she is coming up against a blockage. Quick tomacron was make reference to what happened in london. Can he stop the ground from shifting under him . No. We had an incident at the airport here last weekend. Are amongand security the top concerns of french voters, as voters in many countries. Showoal for macron has to that he has authority on those issues. Tom thank you, greatly appreciated this morning from paris. Heres what we will do in the next hour. We will give you an update from london, speak with kevins really in london kevin kevin in washington. An important day for speaker ryan. This is bloomberg. Tom parliament will work on this thursday. The Prime Minister space to the lower house. Authorities are suggesting that yesterdays attack was islamist related. They do not have a vote for trump care and conservatives and moderates deserve change. Big ben theoking at same again. Good morning. The guy johnson is in for francine this morning. Eu listen for from theresa may . When the u. K. Faces so much uncertainty, i expect the Prime Minister wants to deliver a message of certainty. Back to business. We are at parliament and across Westminster Bridge. It isnt business as usual outside where the attacks were made. Right. Word get a bloomberg first news. Taylor we are starting with that story. Police have made a number of arrests. The Police Commissioner briefed reporters today. After working through the night, during that time we have we have searched six addresses and made seven arrests. Searches are continuing. We do believe that this attacker acted alone and was inspired by international terrorism. Taylor the attacker killed three People Near Parliament and 29 other people were injured. Down pedestrians on a bridge before crashing into offense and jumping out with a knife. Thate u. S. , a report Trumps Campaign may have coordinated with russian operatives over the release of information damaging to Hillary Clintons campaign. Comeys partly what james was referring to when he told the Congress Agency he is investigating the trump campaign. Is trying tose find a way to get house conservatives on board with the health care bill. Administration officials worked into the night on changes that would attract support. Ablicans have postponed procedural effect before the bill could get to the floor. A possible north korean Federal Reserve according to people familiar with the matter. The money was stolen from the bangladesh account. The attack was similar to another attack in north korea. Global news, 24 hours a day. Powered by our more than 2600 journalists and analysts, in more than 120 countries. I am taylor riggs. This is bloomberg. Tom what we will do here is a data check and go to kevins are and then toshington parliament. Futures are up two points. Risk on after the tension yesterday. There was a reaction to the attacks but i will let guy discussed that. The mexican peso is holding firmly. Guy it has bounced a little bit this morning. This is a reaction to what is going on in terms of the data. Firm retail Sales Numbers out this morning prompting the idea that maybe the bank will be pushed towards a rate hike in the mediumterm and it is being priced in. That is the story. European stocks are going nowhere. Waiting for the news from washington. For most ofo london the hour. We hope toer, squeeze him in after the comments but first, to washington. Kevin cirilli, i go to bed every night wondering what will happen tomorrow. What does speaker riordan need . Kevin he has to get them on board with his plan and Freedom Caucus members will be at the meet house later on to with trump as he makes a lastditch appeal. Tom what will he say . Will he give them a golf round at the maralago . What is the tip . That anhat im told is operation is in full force. State angle Committee Assignments and political promises. Is a lack of communicative strategy. And a lack of longterm strategy. If they dont get through health care than they cannot get through tax reform. Is i have no clue what going on within our intelligence debate. What does james comey want this morning . What do the directors of the fbi want to get back in control of the trumppressure investigation . Kevin the Intelligence Committee in the house of representatives is going to be much more political than james comey. Decisionsy has faced has faced criticism for being too political. From texasdemocrat and the chairman you miss will increasingly being facing more skepticism because he provided cover for trump on the wiretap allegations and he was at the white house yesterday. However, there are calls to have a separate Committee Investigating these separate allegations. Go back to where we stand on the tax legislation . Are these separate issues . Will the house and Senate Review what is happening with health or do these bleed into each other . We will have difficulties in hacks difficulties in tact. Kevin this is a political headache and nightmare. The way the rules are set up in the congress is that you cannot split these issues apart. They have to address Health Care Reform. This because of the procedural offer. Trumpshis could derail agenda. This is a white house who ran as a negotiator. It is time for him to negotiate. We will need this as we go on healthlet tonight care. We are awaiting the Prime Minister in 20 minutes as we report from london. Dwyer, we get an update this morning. Show me how to send a chart to tv and i forgot to do this and i go like this and like that and off we go. And there we go to tv. This is a bond chart. Flatterllover to a yield curve. Anthony if you look at where bank stocks traded from 199519, 19951990 eight, it was extraordinary. Tom so you dont link steepness to your wellbeing . Anthony the only time you want to get defensive is after the inversion of the curve. But i do want to make a point. Everybody looks at the 210 year spread. That is an inappropriate measure. We use the yield curve. Their money in two years. The fiveyear. Banks get a deposit rate. Tom Anthony Dwyer just put it in my place. Guy that isnt how i saw it, of course that isnt how i saw it. In terms ofquestion the near term . How are the markets feeling going into this vote today . I have noonestly, clue. If i had a clue, i would tell you. If i hadnt pulled back, we are headed to no mans land because it is unclear as to what will happen. I want to mention that the setup for investment posture, historically over the last 30 years, the only times we have had this kind of Long Duration without a 1 drop in a day was 1985 before the reagan legislation. Those times were filed terms. Aordinary 25 if you get weakness today, and something happens with the bill, there is a lot of good Global Economic data coming out. The guy do you Pay Attention to a 1 move . It used to be pretty normal. A one percent move field that much bigger . Anthony it is amazing to me how people keep coming on tv to talk about this with 1 . It really isnt that big of an issue. I think we are in no mans land. Tonyi will learn from dwyer. We have lots coming up in london including a speech from the Prime Minister to the house of commons. In this hour, professor howell. Cott he will discuss the vicechairman on the Federal Reserve. This is bloomberg. Guy flags are flying at half mast in westminster. We await a statement from the british Prime Minister. Keene isondon and tom in the United States. Theresa may will deliver an address following yesterdays attack and the death of a number of passersby and a Police Officer. In westminster, lets get the details. As you say, we are expecting theresa may to address parliament in 20 minutes time at 10 30 a. M. , london time. Thatll probably be followed by questions from mps. This follows a statement she made last night which had a defiant tone where she said that london would continue as normal. She urged people to continue with their lives as normal and in parliamentis would continue as normal. We are probably expecting her to try and take a tone to suggest stability. Tom it has become a national investigation. Commented on by the metropolitan police. Explain to me the size and scope. Explain to me the size . Arrestshave made seven and they know who the attacker is. But theyre not giving the actual name as the investigation continues. We do see an increased Police Presence and we were told to expect that. Where i am standing, there are police men and women all around. The actual Security Threat level has not been increased since it was raised to the second highest level. Tom thank you so much. Have complete and live coverage of that. Right now, a perfect time to speak with the governor of new jersey. Withs, thatll be 1990 governor whitman. She began her political career at one and nelson rockefeller. If this is very timely and it is about icebreakers . Whitman it is about the ice is melting at the United States is not keeping up with arctic nations. We are an arctic nation and the fact that we have a population move,s there that has to what do you do when you have to move a whole population . What goes first . What makes this timely is that is thetic in the alaska canary. In the republican coal mine. Tom that is to downgrade Climate Change to say the least. You have experience of this. What is your message to republicans with what you have learned so far about the arctic . Christie we have to take this seriously. Give up the argument of what is causing it that the environment is changing. Russia does continue to expand interests in this area. China is sending ships of their to look at fish migration. But we dont have the presence that we need up there and it is something that we should he concerned. It is the first port of entry into the United States. We one person knew checks anyone in, a customs officer but if he is not around, anyone could walk in. There was a report out over the past few days suggesting the number of power stations during the 2016 dropped by half. Are we winning on certain levels . Is there an agreement around the world that coal is bad . Is progress being made . Progress is definitely being made. And the United States, in many leading that. But there is an attitude in washington that we dont need to do anything. This is one of the reasons that this has become so important. It shows real time, happening now. This is something that you might not speculate on, it is happening now. We need to plan for this in the coastal United States and around the world. When you have to move an indigenous population, those are climate migrants. If you think what we are seeing now is bad, when you talk about the climate migrants around the world, it is huge. It will be a threat to National Security and around the world. Something that is just speculation. You can measure this now. There are resources underneath there and the United States is not part of the United Convention of the sea. So we dont have the ability to stake our claim. Guy what is your assessment of where we are with innovation and the ability to solve these problems . Christie there is a lot going on, it is exciting. A lot has to do with carbon storage, capture and storage. Technologieslear going on. Salt reactors that you see being developed. And then you have people breaking through and getting to the point when it is clearly scalable. Tom the hospital in new jersey, transitionmedical and pharmaceutical transition what do you need from the president to get to a Health Care System that christie agreement would be beneficial. Tom are there any Christie Todd whitmans in congress . Christie there are but they are frustrated. There are now 20 republicans and 20 democrats who have agreed among themselves. Artisanship isnt the issue tom mr. President , i know you are watching. You need to get Christie Whitman on the golf course. Cambridge,o massachusetts. Excuse me, he is in washington, d. C. Wonderful to have you with us. I believe you are being vetted for a job in washington that no one has ever held . Vice president of the Federal Reserve system. The answer is, regulation is important. What do we need out of the Federal Reserve system on regulation . We need to reexamine what we have done after the crisis. The two most important things are capital of requirements and liquidity. Thing we doortant is the socalled stress test that the fed conducts but i think it is done in a nontransparent way. With respect to liquidity, we need to examine what the impact banks forsuading making loans because we require them to call government securities. Tom there are many ways to go with the questioning this morning but with the politics we have seen in the last few days, there is a certitude to this administration. Where is the level of compromise that this level of Administration Needs on regulation . What kind of compromises would be be be reaching . Tom yes. What is the point of compromise that trump needs to affect on regulation . Regulation is done in a large part by agencies, particularly the Federal Reserve. Therefore, this isnt caught up in othern the politics parts of the government. The key thing for trump is getting the right people into the regulatory slots. Because a lot of this can be done without any change or others. Guy good morning from london. The bank of englands down the road from here. They have done a good job. Is this something that fits nicely together . Do you think the problem is a monetary regulation . Hal the key thing for the United States to reexamine is the approach to capital liquidity. On the capital side, because it is a stress test issue, this is a subject to International Agreement. Is true ofing liquidity. The important parts of our regulation have been determined the United States International Agreement so even framework, the United States has a lot of latitude to go out to make necessary reform. A statementead you that came through from the g20 finance ministers . Finalizing the framework do you support this framework . Is this on the right track . Hal well, you know, in terms of having international accord, i do support that. But there are controversial elements with the amount of capital and whether we are over capitalizing or over requiring capital for that. There are still a lot of issues outstanding and i think it has to be reexamined. Tom hal scott, thank you so much. The washington studios this morning. Guy johnson, it will be interesting the Prime Minister facing the First Security issue and will speak to the house of commons. Westminster bridge is painted green. And lambert bridge is painted red. And that is the color of the leather in the house of commons and lords. We will be back with theresa may scheduled to begin in four minutes. She does it with a stronger british pound this morning. Comments before the Prime Minister speaks. This is bloomberg. Guy live from london. Pictures from inside and outside the palace of westminster as we erase a statement as we await a statement from theresa may on the incident that took place a few meters from where she will be standing. Around sea palace of westminster in lockdown. Many roads are closed as the Police Continue their investigation. A packed house as the british Prime Minister prepares to brief parliamentarians on what happened yesterday. The Prime Minister looking to. End a clear note , thereime minister may has never been a moment like this. Betainly, her comments will carefully phrased to the nation. This will be with the continued investigation this morning. We need an update. Here is the first word news. Is a report that Trumps Campaign may have coordinated with russian operatives over the release of information damaging Hillary Clintons campaign. That is partly what james comey was referring to when he told congress the agency is investigating the trump campaign. Neither the fbi or white house is commenting. The white house is trying to be out of way to get conservatives on board with the health care bill. They worked late into the night on lastminute changes. The vote is set for today. Republicans have postponed a key procedural step the for the bill can get to the floor. The u. S. Is investigating a north korean connection to the theft of money at the new york Federal Reserve. That is according to people familiar with the matter. The money was stolen from a Bangladesh Central Bank account at the new york fed. Cyber Security Experts have concluded the hack was similar to another one blamed on north korea. Global news, 24 hours a day. Powered by our more than 2600 journalists and analysts, in more than 120 countries. I am taylor riggs. This is bloomberg. Tom thank you. We welcome you worldwide. This is Bloomberg Television and Bloomberg Radio, so much going on in london and we await the comments and speech by theresa may on the house of commons. Again atue as we wait parliament. We are thrilled to have with this Anthony Dwyer. I want to bring us into the spirit of june last year. Doom the big events when sets in. We sought inflation with good retail sales. How do you, as an investor, not deal with a terror attack, but the news flow and the gloom that can be out there . Thingy it is an awful that happened. Our thoughts and prayers go to the people in the u. K. Anytime you get a selloff on an event outside of recession, you want to buy it. Dramaticbit of a more decline. Credit markets would totally shut down. Wide, credit markets are open. Think of the oil price collapse. Cycle thathas been a if you had to shut down the yield curve in the u. S. It is this one. Of what happened in europe, we just had details coming through from the ecb, this is the largest targeted operation the ecb has used to fire money into the financial system. Actually, theresa may is standing up so lets have a listen to what she is saying. Theresa may today, we meet as normal. As generations have done before us and as future generations will continue to do. To deliver a simple message. We are not afraid. Waverr result will never in the face of terrorism. And we meet here in the oldest of all parliaments. Ande know that democracy the values it entails will always prevail. Values, free speech, liberty, human rights and the they are embodied here in this place. They are shared by free people around the world. To the placeame where people of all nationalities and cultures gather to celebrate what it means to be free. And he took out his rage indiscriminately against innocent men, women and children. Mr. Speaker, this was an attack on free people everywhere. The britishf of people, i would like to thank friends and allies around the world who made it clear that they stand with us at this time. Happened on the streets of westminster yesterday afternoon sickened us all. While there is an Ongoing Police investigation, the house will understand that there are limits to what i can say. By having been updated police and security officials, let me set out what i can say to the house. Two 40 p. M. Yesterday, a single attacker drove his vehicle at speed into innocent pedestrians crossing Westminster Bridge killing two people and injuring 40 more. In addition to 12 britons administered to hospital, we know the victims include three french children, it does cover romanians, oneh irish, one chinese, when italian, one american and two greeks. And we are in close contact with the governments of the countries of all those affected. The injured also included three Police Officers who were returning from an event to recognize their bravery. The three remain in serious condition. Mr. Speaker, the attacker left the vehicle and approached a Police Officer at carriage gates, attacking that officer with a large knife, before he was shot dead. Tragically, as the house knows, the 48yearold officer was killed. Devoted his life to the service of his country. Yet been a member of parliamentary and diplomatic Protection Command for 15 years and a soldier in the Royal Artillery before that. He was a husband and a father, killed doing a job he loved. He was every inch a hero and his actions will never be forgotten. I know the whole house will join me in sending our deepest condolences to the family and to the families of all of those who had been hurt or killed in yesterdays attack. I know the house wishes to thank all of those who acted with speed and professionalism yesterday to secure this place and enjoy that we are able to meet as we are doing today. At 7 30 last night, i chaired a meeting at the governments Emergency Committee and i will have further meetings and briefings today. The threat level to the u. K. Has meaning at severe, attack is highly likely at some time. The second highest level. The highest level, critical, means there is information that an attack is imminent. As there is no such information, we have decided that the threat level will not change in the light of yesterdays attack. The whole country will want to know who was responsible for this atrocity. And the measures we are taking to strengthen our security, including here at westminster. A full counterterrorism investigation is underway. Hundreds of officers have been working through the night to establish Everything Possible about the attack, including the separation, motivation and whether their Work Associates involved in the planning. There remain limits on what i can say at this stage, i can confirm that overnight, the police have searched six addresses and made eight eightss and made arrests. It is still believe that this attacker acted alone. The police have no reason to believe there are imminent further attacks on the public. His identity is known to the police and mi5. And he will be publicly identified. Confirm is that the man was britishborn and that, some years ago, he was investigated by mi5 in relation to concerns about violent extremism. He was a peripheral figure. The case is historic. He was not part of the current intelligence picture. There was no prior intelligence of his intent or of the plot. Investigations continue. As acting Deputy Commissioner confirmed last night, our working assumption is that he was inspired by radical islamist ideology. We know the threat from terrorism is real, but while the public should remain utterly vigilant, they should not and will not be cowered by this threat. As acting Deputy Commissioner has made clear, we are stepping up policing to protect communities across the country and to reassure the public. This will mean increasing the number of patrols in cities across the country, with more police on the streets. June 2013, upper police and Security Intelligence agencies have successfully to 13 separate terrorist plots in britain. Following the 2015 strategic defense review, we protected the budgets for out of terrorism and increase the spending on counterterrorism by 30 in real terms over the course of this parliament. Over the next five years, we will invest 2. 5 billion pounds glowing in growing the intelligence network, including additional staff at mi5, mi six ourmore than doubling Global Network of counterterrorism experts, working with priority countries across europe, the middle east, africa and asia. Mr. Speaker, in terms of security here in westminster, we should be clear that an attacker attempted to break into parliament and was shot dead within 20 yards of the gate. Gains intention was to access to this building, we should be clear that he did not succeed. The police heroically did their job. But, as is routine, the police with the house authorities are reviewing the securities of the parliamentary estate, coordinated with the Cabinet Office who have securities in place around the secure zone. All of us in this house have a responsibility to the security and safety of the staff and advice is available for members who need it. Worst of, we saw the humanity but we will remember the best. We will remember the extraordinary effort that saved palmer. Of pc including the members of the east. Thewe will remember exceptional bravery of our police, security and emergency again, ranho once towards the danger as they encouraged others to move away. Of the whole country, i want to pay tribute to them for the work they have been doing to reassure the public, treat the injured and bring security back to the streets of our capital city. They lost one of their own in yesterdays attack and it only makes their call mess and professionalism more remarkable. Mr. Speaker, a lot has been said londonerror struck yesterday. Much more will be said in the coming days. But the greatest response lies not in the words of politicians but in the everyday actions of ordinary people. Today, inse walls scenes repeated in towns and cities across the country, millions of people are going about their days and getting on with their lives. The streets are as busy and offices are full and coffee shops rustling. Walking toll be trains and airplanes to travel london and to see the greatest city on earth. It is in these actions that millions of acts of normality that we find the best response to terrorism. Oursponse that denies enemies their victory. That refuses to let the wind. Sameponse driven by the spirit that drove a husband and father to put himself between us and our attacker and to pay the ultimate price. A response that says, to the men and women who propagate the hate and evil, he will not defeat us. This be the let message from this house and nation today. Our values will prevail. And i commend this statement to the house. Here, here, here. Colleagues, i am advised that we have been joined today i the , who wasreign minister accompanied by a number of his colleagues and by the Deputy Foreign secretary. Presenceppreciate your and your fitting display of solidarity with us. Here, here mr. Jeremy corbyn. Thank you. I join you in welcoming our colleagues from france and i would like to associate myself with the Prime Ministers remarks that she made. What happened yesterday, within meters of where we sit now was an appalling atrocity. The police are still pc together what took place and what lay behind it. It behooves us all not to rush to judgment but to wait for the police to establish the facts. To stay united in our communities and not allow fear or the voices of hatred to divide or cower us. Are united by our humanity and by our democratic values. Of by that human impulse solidarity. To stand together in times of darkness and the diversity. Speaker, i express my condolences to the family and Police Officer palmer who gave his life yesterday in defense of the public and democracy. We thank the police and security personnel who keep us safe every day on this estate. We especially pay tribute to the action of those who took to stop the perpetrator of yesterdays assault. The police and security staff lost a colleague yesterday and continue to fulfill their duties, despite their shock and grief for their fallen colleague, which many expressed to me late last night when i was talking to them. We see the police and security every day. They are our colleagues, friends and neighbors. As the Prime Minister said, when dangerous incidences take place, we instinctively run away from them for our safety but police and Emergency Services run towards them. We are grateful for the public service, yesterday, today and every day that they put on their uniforms to protect us all. I also want to express our admiration to the honorable members of bournemouth east whose actions deserve commendation. Innocent people were killed yesterday, walking across Westminster Bridge. That is Jeremy Corbyn speaking. Before that, the Prime Minister. What i noticed was the listing of the nations around big ben. Three french children, four romanians, when irish, when chinese, when italian, one american and two greeks. And with the french in attendance at the house of commons. Guy absolutely. Theresa may talked about london being the greatest city in earth and she reinforces the nature that city. The fallen a pc who died at the hands of a perpetrator. The perpetrator was britishborn and had previously been on the radar. But wasnt currently at the center of that. So we heard from theresa may, making clear that the british people will not be afraid and that our values will prevail. This is bloomberg. Tom the Prime Minister showed the International Character of the tragedy in london. We do a Foreign Exchange report. A sterling resilient this morning as guy johnson mentioned. Off of a boy and retail sales report. 1. 25. We will continue on economics, finance and investment wellbeing ever mindful of the headlines. Anthony dwyer, let me bring up the single best chart. You and others have said stay in this market, the unloved bull market. The great move of the pullman off the leave and lows. 2015. E not very slow in notony Global Economic trump. I dont believe it is. When i talked to ceos, they dont think ok, i get my taxes lowered and i have less regulation. They are just thrilled that they know there will not be new regulation or new higher taxes. So it is the nonnegative that has driven this. Small business options. Tom what you just heard from Anthony Dwyer is a brilliant assessment. The nonnegative is a big deal. Anthony a really big deal. If you talk to the ceo of suspended spenders, for eight heres they got increased regulation and taxes and they didnt know what was coming next but now they know what is not coming next. So for them, they have raised cash for years. And issuance has been at a record level through the cycle. We have increased productivity and increased earnings and margins. Guy will they hire more people, do you think . Anthony i dont know how they will, they have to find them first. There is nobody available to higher. A custom stair manufacturer i know in jersey, their biggest problem is trying to find workers who will build the stairs. So i think there will be a challenge, which creates labor inflation and creates greater incomes. They will find people but they will have to pay them more. Which will initially be a good thing for income and spending in the u. S. Guy given that and the desire to create more jobs but the jobs being hard to fill, it is as a sense of where you think the investment is going to go and we they will make it work . Talk about investment in technology and robotics where is the money going to flow into . Im trying to get the derivative of this and building my investment around that . Anthony technology. Artificial intelligence. Higher Productivity Technology coming into play. And you have other Capital Spending needs. In retailers and banks, where you have to improve productivity. Of then of coming out correction is that we are a neutral market and a neutral sector right now because we are expecting a correction. Coming out of that, we want to buy financials, industrials and health care. Areas that will be subject to increased Capital Spending. Tom Anthony Dwyer, thank you for your attendance today. We continue with tony on radio. We will be at the. Otelco, not a bad place to be. Guy johnson, the Prime Minister was speaking. And Jeremy Corbyn as well. What did you listen for within the comments . I code details about what happened yesterday. Also a sense that the Prime Minister believes we will carry on and that is what they are doing right now. Business as usual in the british parliament. Tom there we are. We will have more coverage. Stay with us on Bloomberg Radio and bloomberg print. Moments ago on the Prime Minister comments. What i heard out of theresa may was the International Nature of this event and, as guy johnson mentioned, a lone wolf seems to be the theme but we dont know who the attacker was, other than the fact that he was britishborn. Stay with us through the day. This is bloomberg. Twisted and violent ideologies of the broken stones that we enter through on a basis every day. Jon the politics of bc dominate d. C. Dominate market sentiment. Little price action across asset classes. Capital its back to work. Parliament resumes after a terror attack in london leaves for people that. Is bloomberg daybreak. Lets get you up to speed. Futures this morning set like this. A little firmer on the s p 500. 3 . Stoxx 600 up very little price action across asset classes. Alix dollaryen, longest losing streaks in 2011. Unicredit downgrading its forecast, still 15 undervalued. Sterling also rising against the dollar