Be as markets are giving us a lot, a lot of news, just in themselves. There is a lot overall. Oil is still sliding. Global stocks are retreating and you can see that clearly in europe with the stoxx 600 down 0. 7 . The yen strengthening. We see a risk off mode with crude oil tumbling into a risk off mood. That will persist. We also want to look at the shanghai equities, and the chinese domestic stocks. I will show you that shortly and then the pound, of course, it is the cleans speech it is the queens speech today. Lets construed to the bloomberg first word news. Reporter saudi Arabias Deputy CrownPrince Mohammed bin Salman Al Saud has replaced his son as heir to the throne. The shocking announcement sonsidates the sokings power. Algian shoulders have shot suspected assailant from brussels. Had allin station wit tarins haulted. The interior Affairs Ministry confirms that military staff had intervened to neutralize an individual. Chinese stocks will be added to the msci indexes. While announcement is a landmark step in the nations integration with the global system come it will have an affect on the amounts of foreign money flowing into chinas stock market. Domestic shares will comprise 0. 7 of the mscis Global Emerging Markets gauge. The inclusion begins in two steps, the first in may and the second in august. Karen handel has defeated a wellfunded opponent in a special election for a house seat in georgia. The result is a setback for democrats who hope Donald Trumps low Approval Ratings would help them win congressional ratings. The seed has been held by a has beence 1979 held by a republican since 1979. South africa must protect the independence of its central bank and must evaluate the recommendations to alter its mandate. That is according to the countrys finance minister, malusi gigaba, speaking exclusively with bloomberg. The independence of the south African Reserve, we must not seek any nature that will undermine the independence. Whatever decision we arrive at must not end it undermine the independence. Global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. Im Sebastian Salek. This is bloomberg. Francine theresa may will today published a program for her minority government that is expected to be heavy on brexit, but light on domestic under receive. The plans will be met out in parliament by the queen, unusually, this years queen speech will cover a two year program. Anna is in westchester. What are we likely to hear about brexit . Anna we are going to hear about brexit. It will depend on how much detail we get, or at least the level of interest of investors will depend on how much detail we get from the conservative party. We will probably get something on the great repeal bill, the piece of legislation needed to be brought forward in the commons to translate that eu law into u. K. Law. We will also hear perhaps come a little bit of a clue as to where the d. U. P. Talks are going. We heard from Philip Hammond yesterday about the length of the transition period he wants and the existing relationship he wants to see before we get to some postbrexit trade relationship with the rest of the eu. There is still a lot of uncertainty around the brexit agenda. We are likely to hear a little bit less on the domestic front than we would have done if the conservative party had managed to increase their majority. In terms of the controversial policies around education, social care and pension, perhaps even caps on energy crises, that might be given less time. As you say, the name is misleading. It is not written by the queen, but delivered by the queen. Francine a beautiful u. K. Quote. We still have no deal with the d. U. P. Of Northern Ireland. How concerning is that . Anna indeed. The conservative party has a minority government. They need the 10 members of the d. U. P. Who sit in the houses of parliament. They need their support to pass the most controversial legislation. The first test of that will be next week because the queens speeches delivered today. It is debated for a few days and then voted on wednesday and thursday of next week. That will be the first time if this confidence is being worked on by the tories and the d. U. P. Various media are reporting Different Things here. Sky says the d. U. P. Talks are not proceeding. The telegraph says the d. U. P. Threatens to move away. He bbc says the d. U. P. Wil will be announced by tomorrow. On the bbc this morning, the deputy Prime Minister did say there is still every possibility of a deal, and that they are regardingout matters more money into Northern Ireland. How far has the d. U. P. Reach gon e . Francine great work in westminster, anna edwards, joining us throughout the day. During yesterday, Geraldine Sundstrom, a managing director at pimco, and peter dixon from commerzbank. Geraldine, how do you see brexit . There seems to be a line in the market that says he will get a softer brexit or even know brexit. How realistic is that . The queens speech will give us a hint today. Yesterdays speech by Philip Hammond hinted towards a softer brexit. Today we will get a little bit more of a hint and of course, there is the majority, and may will have to navigate with a number of people in parliament trying to satisfy all sides. If anything, that might point more towards a softer brexit than not, but at this stage, the queen speech will give us the flavor. Francine peter, what do you see in the queens speech. So far, what have you learned . Basically, we have heard the likelihood is the speech will be oriented on brexit, which is slightly ironic because the Election Campaign focused on domestic issues and brexit was in on the back burner. I think my problem with the legislative program, which the government has likely set out, is to a large extent, it could talk what it likes. It will be important to determine what the eu granted. Wants,set out what it but it will not necessarily deliver unless the eu is willing to cooperate. Francine at the same time, how the president is it that we dont have a deal yet with the d. U. P. . And if they want a softer border with Northern Ireland, does that mean there will be a softer border with the rest of the u. K. . It would appear so. The logical solution to that problem would be for the u. K. To remain within the Customs Union, but i very much doubt that is what we will here today. You know, basically, the government is in a serious pickle. The very fact that we are talking about not having a majority government going into the queens speech is unprecedented within the last 40 years. Again, a lot of what we hear today may not be acted upon as we go through the period. Francine where do you see this playing out . The pound, or gilts . I have a chart tracking the u. S. 10 year, compared to the gilt yield . I suspect first it will be the pound. The gilt will be much more affected by the speech by mark carney yesterday. If they look through it, or if they decide to take action. So far, it looks like mark carney is holding the majority of the npc and is willing to look through fx. Ehe pound now is typically th peoples punch around given the news, and on the weaker side given the uncertainty and given the fact that this d. U. P. Has not been struck yet, though it would be in all the parties interest to decide on the deal by next week. Francine peter, there is so much uncertainty out there. If you had three questions you could get answered right away, what would they be . It is brexit. As you said, because what happens to negotiators will determine what happens to the bound. The question is, what sort of brexit do you want . Francine does that not depend on whether theresa may stays in power or not . I am assuming she will hang on that is a working assumption that she will stay in place until march 2019. What sort of brexit do you want . Thestrongly we defend interest of british citizens will be question number two, because that will have a big impact on financial markets. And i guess number three would be, where what sort of relationships do you really want with the eu . ,an we build a bridge to the eu which we have appeared to have failed to do . Francine i mean, this could take years to answer these questions. I mean, brexit we hope sooner, but politically, it is messy. Yes, first of all, the survival of theresa may is hanging, and we have the parties congress. Then we will learn more about that. Then, the german election also needs to happen to have some serious talks. Everything seems to be pushed. Now everybody wants the best deal, but this very night. Francine we will be back with Geraldine Sundstrom and peter dixon. Lets get straight to the Bloomberg Business flash. Reporter Travis Kalanick has resigned after a series of controversies that rocked the Worlds Largest article step he said he was largest start up. He wished to avoid another conflict. The company has been dogged by drama this year, amid allegations of Sexual Harassment. Aiming toaid it is reach a final agreement at a Shareholder Meeting on june the 28th. They want to close the deal by march to make up for losses within the nuclear operations. Chinass chairman said consumption will be the engine of development for the next 30 years. Jack added his company is not trying to compete with amazon in the u. S. Amazon is a great company. They did a fantastic job in america and the world, but they are an Ecommerce Company and we are not. We help others to become ecommerce. We believe every company can be. Reporter that is the Bloomberg Business flash. Francine now, you may think the reflation trade is dead, but perhaps it traveled across the bill isaac. Currency investors are coming to terms that the greenbacks best days are behind it. More and more, traders are counting on the euro twto take the dollars place. Lets get more with Geraldine Sundstrom and peter dixon. Thank you for sticking around. Let me bring you over to my compression chart, which shows treasury yields spreads narrowed since the recession that began in 2007. What does this tell you about what Bond Investors are expecting the world to look like in two years . Basically, it tells me that the bond market does not believe the fed, the Interest Rates will rise at a modest pace. I think it tells you there are increasing concerns, for perhaps, rising expectations, that this pick up inflation will not occur. We saw comments about that earlier this week. I think it is a steady as she goes kind of recovery. I dont think investors have a strong view about the economy per se. They dont expect a recession, but dont expect much of a pick up either. I think we are looking from direction from somewhere. Francine again, equities are doing one thing and bonds are doing the other. What does this tell you about the state of investors . I think one more thing we could add is the trump plan an d tax cuts and fiscal stimulus dont seem to be their either and gold prices are dampening expectations. The bond market sees that side. On equities, we had a pretty strong season in the First Quarter and i think this was not entirely expected. Markets have caught up with that. Now next is becoming a little bit more complicated. We will need a new catalyst to push further. Are we going to enter a new tech cycle with the iphone 8 . As they fed keep hiking say and disregard the fact that inflation is not there and that there are some signs the economy is plateauing, or even slowing down somewhat . What will happen in china . There are so many open questions at the moment that it is a wait and see attitude. And as far as the diversified portfolio duration, it looks attractive, even at this level. It is not a screaming buy, but by waiting, risk onrisk off at those levels, it still remains a safe asset. Francine geraldine, you were just talking about china. Chinese stocks are about to be added to the mscis benchmark. This punctuates an external period in which china enters the mainstream of finance, while maintaining a semblance of control over its markets. Peter, does that make a difference on how you view china at all . We have seen a little of an increase within chinese shares, but not much. It does not change my view much. Chairman mao francine he is not quoted much on the show. There is a lot more to come. I think it is an indication that china is becoming integrated into the globalfinancial system. In overtime, more shares will be added to that in next. Who knows . In five to 10 years, we could be talking about more International Investments in china. Francine geraldine . That will take some time. Right now it is just 3 4 of 1 of the index, it is very little. It is not much when you compare it to the daily turnover of the stock market, but in five to 10 years, it will be 40 of the msci, or Something Like that. Also, a large part of the global msci index. Probably a sigh of relief from , finally, they will be passive and active inflow that will help this capital outflow we see relentlessly month after month. Though the size is probably in the order of 10 billion to 15 billion, over a longer period, we are talking about several hundreds of billions, which will offset the outflows. That will help with the greater stability of the renminbi. Francine thank you, peter dixon and Geraldine Sundstrom. Up next, ubers ceo quits. Travis kalanick resigns. We talk about the future of the Worlds Largest arstart up. Francine you are watching bloomberg surveillance and im Francine Lacqua. Ubers ceo has quit. Travis kalanicks resignation caps the series of controversies. App has faced a series of scandals, including Sexual Harassment and the use of software to purchase regulators. Matt, great to have you here. First of all, who pushed him out . Matt well, as the New York Times reported, there was a letter from five uber investors led by benchmark capital, a very respected venture firm in california, saying, look, travis, it is time to go. Travis kalanick was already taking a leave of absence from his role at uber. This makes official something which a lot of people expected would happen eventually. Francine would it have happened differently if it was a Public Company . That is interesting. Uber is the largest venture backed startup, worth Something Like 70 billion at last count. Were it a Public Company come it would have more scrutiny and these scandals would have had a significant effect on it share price, might have had a different board structure. This could have happened earlier. In any case, even Venture Investors have only so much patience. Francine will this hurt uber . The company is still growing. Lyft does not operate outside the u. S. , which is where all the growth for uber is. Clearly, they have a dominant market position. It is practically a verb, like xerox, at this point. It is an enormously powerful company. Whether it will have the same rate of Growth Without the charismatic founder remains to be seen. Francine matt, thank you so much. We are back with peter dixon and Geraldine Sundstrom. Peter when you look at the tech space, there is something about the culture. Is there something what is the translation across the industry . Is it just within the valuation, or can be one of culture . There are a number of issues here. From my perspective, uber has jumped into the space and created a new market. It is not following any Business Model we have seen from other industries. I mean, what tends to happen in the tech space, the company is, they do well, and sometimes they do well. If they survive, they do well. We have the Big Five Tech Companies in the u. S. Sitting on huge piles of cash. They are being criticized for not using that cash for better purposes and uber is not at that kind of level. It is at a different level in terms of what is happening right now. Francine geraldine, what is your take on tech valuation . I think when i look at the gap valuation of the growth of the market versus tech, tech has profoundly changed the amount of Free Cash Flow that these companies are generating, at least the larger part of them. And the Earnings Growth in the sector, i would say validate to a great extent the level of valuations, within the context of the broad market being on the richer side of things. I think also when i look at earnings expectations, they are not widely optimistic. So, if anything, for this market to continue growing up, tech is one of the catalysts to look forward to and one that is the most likely to happen when you see commodity prices, certainly this area is not very boy ayount then you look at the sector and the curves have flattened. Then you look at the consumer side of things and it is a bit steady as shee goes. Francine Geraldine Sundstrom and peter dixon, thank you. Up next, Robert Kaplan says 10 year yields suggest expectations were sluggish Economic Gro