Im francine lacqua. Lets get straight to the bloomberg first word news with nejra cehic. Nejra frances foreign minister says there is total cooperation between his country and egypt after a plane flying from paris to cairo vanished over the mediterranean. The mystery surrounding the disappearance has deepened after greek authorities dismissed reports that debris from the aircraft and been found. Investigators say flight 804 made a series of terms before descending rapidly. 66 passengers and crew were on board. The pilots sent no distress signals. Aircraft washe approximately 10 to 15 miles inside egyptian airspace at an altitude of 37,000 feet, executed a turn 90 degrees left, then a turn of 360 degrees to what the right, dropping from 37,000 to 15,000 feet, and then the picture we had was lost at about 10,000 feet. Nejra new york fed president bill dudley says the Federal Reserve is moving closer to raising Interest Rates. His remarks echo sentiment in minutes at the fomcs april meeting published this week. June is definitely a live meeting. When we do depends on how the economy is going to evolve. Looking at the market expectations, it looks like june is roughly one in three, and the july meeting looks like about 60 . Nejra double iron n blackrock traderss time for bond to start pricing back in the Federal Reserve. Blackrock says fomc officials are like to wait until july to gauge the outcome and implications of britains Eu Referendum on june 23. The u. K. Economy has slowed and may require additional stimulus if it doesnt rebound quickly in the event of britain opting to stay in the European Union according to the bank of england. If additional stimulus is needed, both rate cuts and more quantitative easing should be on the table. He also says socalled helicopter money isnt consistent with the Central Banks mandate. Deutsche bank has halted bonus payments to a group of employees while examining whether they improperly traded. The company says it is reviewing a transaction that may have involved conflict of interest. Global news 24 hours a day powered by our 2400 journalists in more than 150 news euros around the world. Find more stories on the bloomberg at top. Francine thanks so much, nejra cehic. On to the markets. This is what european equities are doing. Seeing a little bit of a rebound. Financial markets in general showing signs of stabilizing after being zigzagged this week by a surge in expectation. This is a picture for the ftse, the dax, and the cac 40. I want to show you the price i dont know if we have gold, but brent crude at 49. That is also regaining a touch. The yuan headed for a third week of declines against the dollar. This is on the back of Dollar Strength, unaided speculations the u. S. Will raise Interest Rates. We will get back to the markets and currencies with jane foley in just a second. First, lets update you on the egyptair flight from paris to cairo which disappeared over the mediterranean sea. As a Search Mission enters its second day, greek authorities have dismissed reports of finding debris from the jet. Greg this cruise he is in paris. Arexpected, a lot of things contradiction. We dont really have anything concrete. What we know is that debris found was not that of the missing plane. That doesnt really change much. We know the plane went down because they couldnt see it on the radar. Whether they found debris doesnt change much. The debris would have been able to give clues as to what happened. We dont know what happened and that is what french government officials have in trying to stress. That is a standard line of the president and foreign minister when asked about it. All hypotheses are open, but none can be favored. Francine i guess it all depends on when we find that black box and how difficult that will be. Definitely. Theyve got to search for debris, search for the plane, and find the black box. This part of the aegean sea is not particularly deep. The air France Flight from rio that went down was in waters well over 4000 meters. Is a much morning closed area, so it should be an easier search been some previous crashes weve had. Francine greg, thanks so much for the update. Now, lets get back onto the markets and look at what the feds next move may be. Lets welcome our guest, jane foley, head of a fix strategy at Rabobank Group in this is quite you look atwhen fomc minutes and the meeting in japan today. The key message was, you are mispricing, the message from the fed to the markets, because they are ready to hike. Jane there was growth, inflation, and employment. You could argue that all three of those areas are beginning to be repaired. If the slowdown in q1 is just a areistical anomaly, we seeing predictions that q2 will bounce higher. Then we have the disappointment of the last payrolls raise. , we havee june fomc another payrolls report. That will be crucial. Weve had cbi this week. We all know that the feds favored measure is that pc number. Theres another factor. This might be interesting in determining whether july or june could the more favored. Some of the fomc members have mentioned brexit. Francine i keep on saying it would be fairly punchy to start normalizing again three or four days before brexit. Jane that is a risk and i think it would be. The biggest legacy of grexit isnt necessarily its impact on the u. K. Economy, but its impact on the eurozone, that he you. The eu. What will brexit do . Even a close vote. That is the legacy of brexit. Us a little bit of an indication of how seriously the fed might be considering this as a risk. Francine it is not just that they wanted to get the markets to reprice their expectations. If we look at expectations for growth in the u. S. , some of the predictions we have from the regional fence, if we look at inflation, cpi, Something Like 111 , he trended higher like 1. 1 , it trended higher. We had disappointment last month, but it is being repaired. You could put arguments together to say we are seeing the Movement Towards another fed rate interest hike. The interesting thing will be the dollar. If we look back to 2014 francine that has strengthened already a little bit. Jane exactly. If we look back to 2014, what the fed didnt anticipate was that huge move in the dollar in 2014. This year, weve had the treasury pushing back against currency wars, against Dollar Strength. But if we get the dollar beginning to correct higher into june and july as the market puts Interest Rate hikes back on the table, that could be Something Like a delay. Francine depending on how much they can stomach Dollar Strength. Thank you so much, jane foley. We will be talking about yen next. Coming up as g7 finance ministers and central bankers meet in japan. We will look at the danger that a stronger yen poses. Stocks in emerging markets are down with the chances of a fan dyke increasing. Of a fed hike increasing. And it is the Worlds Largest luxury brand. We will bring you our exclusive interview with lvmh. Francine welcome back. Lets get the Bloomberg Business flash with nejra cehic. Foreign minister says there is total cooperation between his country and egypt parisa plane flying from to cairo managed over the mediterranean. The mystery has deepened after greek authorities dismissed therts that debris from aircraft had been found. Investigators say flight 804 made a series of sudden turns before descending rapidly. 66 passengers and crew were on board. The pilot sent no distress signal. Richemont shares are lower after saying it doesnt expect the market for luxury goods to improve in the shortterm and sales plunged in april. The maker of cartier jewelry repeated earnings that missed estimates. Euros fell to 2. 6 billion , below the analyst estimate of 2. 29 billion euros. Aberdeen Asset Management ceos say theyve resisted offers to buy the company. To sell ther tried business, but we do get a lot of people wanting to buy us, which is nice. Francine europeans . Europeans from everywhere, around the world. Asset management is a great business because the return on capital is so high. Predictable,ble, so theres a lot of interest. Being independent is a massive benefit to us. Nejra you can see that entire interview tonight at 10 00 a. M. U. K. Time and throughout 10 00 p. M. U. K. Time and throughout the weekend on bloomberg tv. Goldman sachs holds its annual meeting. Tough markets hurt revenue across the business with First Quarter investing and lending revenue down on the same period in 2015. That helped drive overall revenue below consensus. That is the Bloomberg Business flash. Francine g7 finance ministers and central bankers are gathering in japan as they send mixed signals on how to boost a flagging recovery. The meeting takes place on the backdrop of increasing pressures to avoid weakening the yen. The u. S. Has warned that currency intervention wont boost global growth. Yvonne man is live with us for the very latest. Tensions at the g7 as usual and once again they are talking about one of the main risks being brexit for the next six months. Onne that certainly is the topic creeping into conversations here. Sources say that could be the ultimate risk on the horizon, particularly when it comes to Market Impact as well as u. K. Growth in general. Those issues have been singled out in some of these discussions. The u. S. Really sending out and adding much more pressure on fx policy in general. What they were saying, they did say that given a time when there is such slow global growth, any movement from a country on its currency would send the signal that it is trying to boost competitiveness and this would not help little growth. We kicked off the g7 with a local tradition in japan, the bashing of the stockade barrels. Some have made the metaphor, does this mean japan could be seeing a bashing of economic policies . Some say it is highly unlikely. The topic of yen intervention not high on the agenda. We did talk to governor kuroda. He avoided that issue altogether. Policy,alk about boj saying negative rates continue to show positive signs in the economy and they will take action if they see factors including Exchange Rates pose a risk. K francine thank you so much for the update. Lets get more with jane foley. I guess the problem is that for a long time, we talk about currency wars, but then it is difficult to point at someone if everyone is doing it. Jane if you look back over the had a lotears, japan of success in 2013, 2014, with a weak yen. Weve also got to point out that during the years when japan and the eurozone were successful ars, it in currency w was largely on the back of the dollar going up. The eurozone did very well. It was the dollar, the more passive player, that was taking the brunt. Yellen say to the senate, they didnt anticipate the dollar would be that strong. I think the pushback we have from the u. S. Treasury is being looked at why should we take the brunt of the currency wars . Youve done well out of it. We havent. We dont want that to happen again. Francine at the same time, you could argue that come february, march, when we saw a very dovish fed, janet was also playing currency wars. Francine jane you could also go back to 2009. We dont want anyone else to do it now. You could. I think weve got to a point where most people recognize that it is a zerosum game for the global economy. It isnt something we should be doing. Maybe it is why the ecb or draghi indicated that rates are not going down much further and they are looking at fiscal policy to promote domestic credit growth. I think this g7 meeting may give us a clear indication whether currency wars are considered to be a bad thing. Francine also i guess the more you do it in your neighbors do it, it is diminishing returns. We will talk about yen in just a minute. Overall, do you think they will have to intervene . Need inflation and it cant go through higher yen. Jane if we look at g7 communications, they have tended to say that market should set currencies and not Central Banks. Ifwould be very frowned upon we consider what the u. S. Treasury has done this year, changed its trading act japan, china, on a list. We know that the u. S. Treasury would the deeply unhappy if japan were to intervene. Japan has been given back a little credibility now because the dollar has been rising, allowing dollaryen to go up. No doubt the japanese can say, negative Interest Rate are working. The yen is weakening. This is because the dollar has been going up. Similarly, the ecb, happy days. Eurodollar is going down, allowing them a little stimulus. The u. S. Treasury do have to manage this. Francine jane, thank you so much for now. Jane foley, head of fx strategy at radel bank. Up next, more on the yen. Traders think the currencies tumble could be shortlived. Francine welcome back. Top of the agenda, g7 meeting, is how to revitalize global growth. Growth,ars of sluggish perhaps an appropriate topic. I want to sell you something which illustrates show you something which illustrates negative Interest Rate. Savings are still rising faster than loans in japan. April saw deposit sexy borrowing by 217 trillion saw deposits trillionrrowing by 217 yen. Jane foley, we are talking a little bit about yen strength and i guess yen gets a little relief from fed policy, as does mario draghi. When you look at the fundamentals underlying abenomics, is it to zeus soon to call it a failure . Jane you can look at japan for 25 years and say where are the successes. This is a big problem that carries on. Theres been lots of disappointments with abenomics. It is about slow growth in much of the developed world. Term,k for japan, nearer i think a lot of the questions will find their answers in china. Japans largest trading partner and for the yen, i think china is going to be crucially important. The dollar has gotten a little stronger recently. Mechanically, we get a left. A sign of relief maps to the authorities. I think we also need to be looking at the levels of the andinbi relative to the yen the levels of the renminbi overall. Not only that, weve got to be considering confidence in china, global growth, and the fact that the yen is a safe haven currency. Francine what happens to renminbi. Weve convinced ourselves they wont devalue. Soon perhaps we were too in assuming that. That comes in ap one when the dollar was weakening. Wherego back to a period the dollar is strengthening, that is good for dollaryen, for european authorities, but it isnt happy news for the e chinese authorities. Strengthens, their currency is dragged higher. It is better news perhaps for the japanese and europeans, but theyre going to get to a point where if they want their Exchange Rate to hold steady, they have to allow the renminbi to devalue more against the u. S. Dollar. Francine i guess it all depends on Dollar Strength. Jane it very much depends on Dollar Strength. If it holds steady, we get the countdown. In chinese growth, they are allowing debt to accumulate too francine quickly. We know that cant go on forever. Francine jane, thank you for coming in. Up next, we talk emerging markets. They are down more than 7 in the past month as markets price in the chance of another fahrenheit. We look at Political Uncertainty surrounding turkey. Francine welcome to the pulse live from bloombergs European Headquarters in london. Lets get straight to the bloomberg first word news with nejra cehic. Nejra frances foreign minister says theres total cooperation between his country and egypt after a plane flying to cairo vanished over the mediterranean. The mystery has deepened after greek authorities dismissed reports that debris from the airport had been found. Investigators say flight 804 made a series of sudden turns before descending rapidly. 66 passengers and crew were on board. The pilots send no distress signal. Aircraft washe approximately 10 to 15 miles inside egyptian airspace and add in all to do of 37,000 feet executed a turn 90 degrees left, then a turn of 360 degrees to the right, dropping from 37,000 to 15,000 feet, and then the picture we had was lost at about 10,000 feet. Nejra new york fed president bill dudley says the Federal Reserve is moving closer to raising Interest Rates. His remarks echoed sentiment in the minutes of the fomc april meeting published this week. June is definitely a live meeting. What we do depends on how the economy is going to evolve. Looking at market expectations, it looks like june is roughly one in three. Through the july meeting, looks like about 60 . Nejra double iron capital and blackrock say it is time for bond traders to start pricing back in the Federal Reserve. Blackrock says fomc officials are likely to wait until july to gauge the outcome and implications of britains Eu Referendum on june 23. The u. K. Economy has slowed and may require additional stimulus if it doesnt rebound quickly in the event of britain opting to stay. That is according to bank of member. S mpc he says both rate cuts and more quantitative easing should be on the table. He also said socalled helicopter money isnt consistent with the Central Banks mandate. Deutsche bank has halted bonus embodiment bonus payments to a group of employees while the review a transaction that may have involved conflict of interest. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. You can find more stories on the bloomberg at top. Francine thanks so much, nejra cehic. European stocks are higher this morning as crude and Commodity Prices recovered. The fed will normalize. Lets head to the bloomberg with mark barton. Mark Luxury