Grows inchment drama washington as President Trump goes on the offensive. The u. S. President also says a trade deal with china could get done quote sooner than you think. Authorize u. S. To tariffs. And warnings from some of londons biggest names. Imperial, pearson, and ing cut guidance for the year. Good morning. Matt good morning, anna. Less than half an hour away from the european open. I am looking at treasuries after the big spike we saw yesterday. Backed up above 1. 7. Indeed, we hit 1. 74. Where coming down as investors by bonds. Buy bonds. We are also looking at risk off trade in terms of european futures. Dax,a look at where we see cac and ftse futures trade. Not a lot of movement at all. The arrows are already, but really, not a lot of movement. What are you seeing on gmm . Ic 30 year treasuries also seeing a retreat. Bit of buying in that department. Indian and indonesia does higher. China is down by. 5 , which is interesting. Have forhe picture we the fx markets. We saw a big move in the dollar yesterday and more colonists today. Ness tdayists calm today. White house has released details on the impeachment inquiry. President trump asked ukraines president to probe former Vice President joe biden. Democrats say it bolster their case but the president says it shows he did nothing wrong. Buthe witchhunt continues they are getting hit hard on this witchhunt. When you look at the information, it is a joke. Impeachment for that . When you have a wonderful phone conversation . Matt lets get more from bloombergs kathleen hunter. She covers all things washington for us from london. It looks like Donald Trumps witchhunt defense, which has worked in the past, may not work quite as well. Everyone is piling on as if a signal has been given. What is different this time . We are talking about a much clearer cut situation than what we had with the Robert Mueller investigation. Seeing it in black and white as we did yesterday, the fact that the president did explicitly ask the president of the ukraine to investigate his political he wouldand suggested enlist the help not just of his personal attorney but the attorney general of the united legal in doing that, questions aside of whether that violates some kind of law or campaignfinance law, for a lot of people, that is kind of feels like something the president should not be doing. Matt certainly for democrats. Certainly for democrats. Whereas the Robert Mueller investigation was very convoluted, this is clear. And it is worth noting that there were several republican senators who had misgivings about this conduct laid out in the summary. So the acting director of National Intelligence will testify on capitol hill. What should we watch out for . We know that democrats and members of congress have had a chance to look at the complaint. I think that is something we might get a bit of a taste of based on their questions. There already is a big push from Chuck Schumer to release the full details of the whistleblower complaint so that the public can review them. Another we know members of congress have seen them, taking a look at the types of questions that have been formulated, seeing what types of questions y have will may be in for informed the next Inflection Point in the strong. In this drama. Matt absolutely. Kathleen hunter, thank you very much. You will be covering this over the next week. Lets get over to mark cudmore, our mliv managing editor to talk a little bit more about the markets. One of the debates about this process has been how tradable is it . It is not really. Massive story will be talking about for weeks and possibly months but ultimately it is not really tradable, not at the moment. Discuss be remembered that impeachment is not just a legal but political process and there is a general view that until there are clear signs republicans will rebel against trump and follow the impeachment process, and it is unlikely to be anything more than a big gamble ahead of the election. That is the consensus view. That could change, but until it does, this is not really a market story. It may get people to distract from the big story, which is trade news. Many people think he might use the story to distract from impeachment. But in that way, they had to intertwine. To know whether the threats might feed into market stories. The tradetrouble with story is that we see headline after headline. It does not necessarily know the story of movement. We hear from President Trump we might get a deal, but the market remains skeptical until we see facts. Whether it is skeptical or optimistic, they are more optimistic than they should be. The trade situation has not changed for months. The trade war situation is something that will ebb and flow and has been doing so for the last 18 months and will continue to have moments where we get optimistic and negative, but ultimately we are going in a negative directory direction. Italy very hard to remove the tariffs in place. This is not include the chances for the interim bill that make it more purchases in exchange for removing the measures on quality. On huawei. But any grand bargain seems unrealistic. But as i said, we should ignore the shortterm headlines if we can. Ultimately look at the bigger trajectory. Matt the mliv question of the day, will a december fed cup get priced out . Out . T get priced it is amazing what the reaction we have seen we did see that bounce and we do see unwinding of the extremist pricing. A bit ofy, there is divergence here for what the fed is saying and what traders think. If anything, the price will become a more definite as we get closer in the weeks ahead, but tradeat the whim of the optimism and that had of story is where we might see the fluctuations. Going full circle, what is important is that it is matt leadg to note with the treasury yields and we are basically back to where we were before the impeachment concept came up. It shows it will not impact markets overall. Anna thank you for your thoughts. Mark cudmore, mliv editor joining us from singapore. Remember, you can join the debate and get involved. Reach out to us and the mliv team. Bloomberg radio is live on your mobile device. They will have plenty more on the prospects or not for impeachment of the u. S. President as we go through the morning. This is bloomberg. The conversation has amped up materially. We do not have the right to exploit our earth. Time is running out for us to address Climate Change so i think it is right they hold our feet to the fire. I look at Climate Change as a huge economic issue. It is the carrot that has the ability to get us there. With have got to start thinking outside the box. To scale up what we are doing today, we should be working much more closely. The private sector and the Public Sector. Matt World Leaders from the private sector and the Public Sector talking about Climate Change at the Bloomberg Global business forum. Will bring you more about top interviews from that event throughout the program. Now, this European BankCentral Bank Board member has unexpectedly resigned more than two years before her term was due to end. The ecb gave no reason for her departure that she was one of the strongest opponents to resuming bond purchases and cutting rates, both of which mario draghi did. She will step down on october 31. Interesting timing, because so is he, its his last days office. She is the last german policymaker to quit early, echoing frustration of the. Avings oriented nation joining us is the chief economic isor at a credit us acreditus. What do you think of this . I was pretty shocked when i saw the headline. Im continuing to look for a reason and dont find one. This was a total surprise. I have not noted anything doubledip the kid that and this came as a surprise for everyone. Lets just say the timing is somewhat mysterious. Drahgi is leaving. They will probably expect that the policy thrust will be the same. But if you want to make an impact, you are better off inside than outside. The reasons that you can only believe it has to do with policy. If it was private reasons, it would be something we would probably know and the timing would be less conspicuous. There is a lot of talk about the series of germans resigning. More importantly, this was a symptom of widening risk in the governing council she is one of the most outspoken hawks who has been opposed to Monetary Policy. But the outspokenness of the resistance has become pretty extreme. It was unprecedented after the september decision that governors from the netherlands put out a Public Statement criticizing the decision. Frank there of the central bank which is not known as an outpost of resistance made it clear. Austria, germany, the representatives of more than gdp arguedopes publicly against the decision. So this will put lagarde in a very difficult position. And we are hearing the more and more huge figures on wall street saying that negative rates are downright dangerous for financial systems. Do you see it in the same way . These the this policy as a damaging . It is a damaging to banks which live off of trading rates. I would have to agree with draghi. The problems of the banks in interestave to do with rate environments and the homework issues they have not done. Y argument will be different my argument is that this is an him potent instrument. We had five years of negative rates. Core inflation has been bunched. The investment ratio in the eurozone remains low by historical standards. Clearly, this instrument is not achieving what it is meant to achieve. And if you lower rates by another 10 or 20 basis points, what difference is going to make . The problem is not the level of funding, it is that there is not enough growth or investment opportunities. For that, you need more governmental reform. I argue ecb policy is discouraging those reforms. Me nicely ontos what you wrote recently about helicopter money. You suggest that one positive of helicopter money is that it would not discovered vast discourage the reform agenda in the same way qe has. Were you surprised . Writing this positive peace of helicopter money. If someone 10 years ago told you you would have this view, would that have surprise you . Totally things that have never happened before happen every day in Monetary Policy these days. I would preface this by saying there is no urgent need to go radical at this point. We have no risk of deflation. The growth is slowing, but we are in a low growth environment precisely because we dont have the reforms that would be required to bring the eurozone on a higher growth trend level. Matt what are the reforms . Moritz the usual litany. You have the labor markets, product markets, services making the economy more flexible. A lot has to be done in education. But you can observe. The moment Interest Rates went down after the crisis, the reform momentum has stopped. And it is understandable. For government, it is much easier to hope for lower Interest Rate that creates to spend the room for them to spend. Is, in my mind, would be worth investigating more. But in the sense you give money directly to the households, not the government. If you given directly to households you have a much clearer transmission mechanism. Even if people spend a quarter of the money they get until the target is reached itt up and it all upend all. Get Christine Lagarde europe to spend more . And what you think about the Corporate Tax cuts . Moritz the fiscal spending, it is a bit of a desperate move. The German Government is clearly dragging its feet. There are obvious opportunities in investment in digital and climate mitigation, etc. These things take a long time. We have a redhot Construction Market so theres not much capacity to bring money on the road. Its not that germany has to absorb square capacity. So there is reluctance to go down that route. Look at japan. Japan is a good example. Have tried this monetary strategy for much longer and much deeper. They have tried fiscal stimulus like no other country. These are structural issues. You cannot solve them through cyclical policies. Matt yesterday, almost told me heaxel weber thinks berlin should spend more now. , but thatey should should not spend more to save the euro area because the amounts would not be the enough they should invest because germany is losing competitiveness, not because there is a lot of investment in digital were germany is falling mistake. T make no autobahn because the is disintegrating and the airports are difficult to reach. Moritz i think they are pretty good. But if you have all of these investments happening, germany will become even more competitive compared to italy and other countries. The eurozone would, in the longer term, increase. So that is the charm of helicopter money. You dont let the government off the hook, the money is with the individuals and they will spend it on whatever they spend it on. This would have a better impulse on the real economy then just trying to lower Interest Rates. It has not worked and will not work. Matt thanks so much. Chief Economic Advisor at acreditus. We are minutes away from the open. We will get a look at your stocks to watch including ericsson. Company is putting aside 1 billion to settle a u. S. Corruption probe. This is bloomberg. Anna welcome back to the European Market open. Five minutes to go until the start of equities trading. , payingeye on ericsson 1 billion to cover u. S. Investigations into its Business Ethics. Heardro is also in focus focus. H. B. Fuller company guidance. Imperial, pearson, and iag could be on the move. All three of those guiding a little bit lower. We get the market open next. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Welcome back. Until thicko go cash equity session for this thursday morning and europe. We are flat on the asian session. A mixed picture coming through. European futures are pretty flat. There is concern around impeachment in the u. S. And then there is the trade story. The pound moved up yesterday after aggressive scenes in the house of commons. U. S. Es are flat for the this is being reflected in europe. We are looking for a flat to negative start to the european trading day. Could the market be taking a too optimistic view of all the Straight Lines trade lines . Stocks opening up fairly flat. We talked about the number of corporates here in london who. Ight take some time to open up on the back of a warning from a rival business in the u. S. Lets take a look at the sector breakdown. Not very conclusive. Health care looks to be negative. Staples looks to be mixed. A flat start for european equities. There might be some interesting movers based on somebodys pocket warnings we have seen. I want to show you that we have a little bit of breath to the upside. In terms of the movers that are , thelly moving the needle gainers that we see are the Oil Companies and the miners. Shell, these are the companies that are pulling the stock 600 just a little bit higher this morning. Pulling it back from less losses. We do see it down right now. Downside, bat is weighing on the stock 600. Unilever is down. We dont have all the stocks trading. There are 25 that need to start. European markets are opening slightly down. Asian stocks traded mixed. U. S. Futures are down. Key executives and World Leaders at the is this forum weighed in on the trade war between the u. S. And china. Trade wars are not good for anyone. U. S. ,re not good for the china, emerging markets. Beenile globalization has great and trade has lifted hundreds of millions of people out of poverty, there is the other side of that around the protectionism of people who have lost jobs. We look at china in a different way. They are clearly trade related issues that need to be dealt with. But i look at it more as a glass halffull. The Chinese Government has more levers to rely upon the most governments do. The two countries have , as a result of false starts and a variety of other tactical stuff, are starting to decouple. Which is very dangerous. Trade has never been reciprocal. I hope we get there. Some interesting views coming from the Global Business forum. We have news entree to talk about this morning. Lets talk about the story around impeachment. Some people are saying this is nothing, we have to focus on trade. I think it is still a long shot that it happens. It will be there as distraction. Trump cannot have his focus everywhere. It will be a distraction. The s p is moving up and down. There is another suggestion. Either he takes his eye off the ball are he focuses more on trade. He is so oriented to instant gratification. When he focuses on something else, he does harm. If you just like at the creek resulted wants, he comes becomes dysfunctional. What do you think about the possibility of a trade deal . Is it important . So many people on both sides of the aisle have problems with the way these two nations operate. Is it important to get a trade deal for the u. S. Economy longerterm . Or would you prefer in a deal now for the sake of market pacification . I think you need a truce. That is what the market needs right now. Havedication that things gotten as bad as they are going to get. And the next move could be an improvement. You can get h rus. Progression. That is enough to stop the manufacturing declines that we have seen around the world. I want to bring everybody up to speed on some share price reactions. Imperial brand strapping 8 . Brands dropping 8 . We heard from jamie dimon in that clip. He talked about how he does not think a deal will come by the election in 2020. Out hope for a truce. Because trump needs it. He is fighting on too many other fronts right now. I think we will get that truce. The allencompassing deal is too far off. There are too many differences right now. Do you still like u. S. Stocks . They are still up your today. Do you take money off the table argue holdout hope for a truce. I like the laggards this year. Health care. There is Political Risk with that. They are growing faster than the s p 500. And they are trading at a discount. That is a growth in a value sector right now. We are putting most of our money to work in japan. We are getting a 5 yield. Japanese consumer has been resilient. Thank you very much. When we come back, a look at some of our movers this morning. The individual stories making their mark on these markets. Dutch prosecutors start an investigation. And we are looking at other businesses on the move. This is bloomberg. Welcome back. This is the picture for European Equity markets. To movingre not very fall at our at all. Thats get some of those movers for you this morning. There are so many to choose from. I am kicking off this first round with probe and profit warnings. A criminal investigation by the dutch public prosecutor. That stock will be focused. This has to do with some strikes that they face. They are the Parent Company for british airways. Plunging asnds well. They were out with a warning that there cutting their revenue guidance. They are seeing growth at 2 . They thought they would be seeing 4 . We are seeing a huge backlash with vaping in the u. S. That is also bringing down British American tobacco. Matt i wonder how many people are vaping less. Compared to how much it is in the headlines. I think it is a fascinating story. Lets get back to brexit. 35 days to go before the u. K. Hits its second deadline. The two biggest groceries are warning on threats of crashing out. The tesco ceo spoke with us. There is no change in consumer behavior. Do you worry about stockpiling . If you look at the october 31 deadline. We dont worry about it. We see no evidence about it. If there were to be a no deal brexit, the issue was around fresh food. We have been sharing our thoughts and insights. It is 30 years since the government had to control any custom activity. The scenesn behind helping them understand what is involved. Even and a no deal brexit, what is the actual detail . What will happen at the border . How much have you spent preparing for brexit . We spent some money in march that we did not need. We will spend some more money in the lead up to october. We cannot stockpile fresh food. What do you think is most at risk . The u. K. Imports most of its tomatoes. That would be one of the key areas we would be concerned about. People come to you and say what should i do about christmas , should they stockpile anything . Would be tothing carry on exactly as normal. Christmas is a completely separate thing. Most of those things are actually produced in the u. K. We are not constrained by the border for that. There has been quite a lot of talk amongst groceries. The u. K. Is a concentrated market. There are four large retailers that have nearly 80 of the market. A recent attempt to consolidate further was stopped by the cooperation authority. Talk to me about your expansion plans. Do you have any . We do. We have 10 markets around the world. Strong expansion plans in thailand. U. K. Sion in the they talked about other things than brexit but that was really fascinating. This is the third brexit deadline. Your thoughts on u. K. Assets . It is interesting to see what sterling has done. Things are getting really tense. The tone of the debate. Aggressive language being used. Through all of that, we see spikes up in sterling and then we see it drop back down again. After the Supreme Court ruling, it went up a little bit. But Boris Johnson has come back, do or die, whatever may come. I think sterling is going down a little bit on that. It is hard to determine what that means. The law seems to say that he has itask for the extension would lead you to believe he is going to get a deal done before that. He does not have the majority. The labour party saying they would not back a deal. On the whole they wouldnt. You may get some. But it is difficult to see how you get parliament to agree to a deal. He is not going to budge on anything significant. Nothing really will change. Do you take a position in sterling right now . Though it to 123 even looks like brexit will be delayed again. Does that mean we will see the pound rise . If we have a managed to withdraw agreement, i think the pound rises. I dont ticket gets past 130. If we have a managed withdraw, the pound rises. In a news of the referendum, i dont know how the odds of play out on that. It is still a prospect. I wouldnt be chasing it right now despite the fact that it looks like is value. Obviously we see this inverse relationship between stocks and the currency often. That has been the case through this brexit debate. Does that ever breakdown . You can see weakness in the pound and a lot of weakness in the ftse 250. And a weak sterling, you get a share Price Performance that goes up because the price of oil does not matter. The Largecap Companies are insulated. Would be away from the midcap and the cyclicals in the u. K. Right now. If i believed we were going to have a hard brexit on october 31, i would be shorting those companies. Thank you. It is time to get out of Growth Stocks . We will talk about portfolio construction and get his thoughts on the health care industry. This is bloomberg. Matt welcome back. The trading day and we have seen all the major equity indexes turnaround. My entire european board was read at the open. Now it is almost all green with the exception of spain. 1 . Ftse up a third of is the growth trade starting to look frothy . Trading atindex is two standard deviations above its 10 year average. Our guest says it is time to start buying. Lets talk portfolio picks with him. Growth is done. Does that mean value stocks are back in fashion . I think they are done to some extent as well. Utilities are extremely expensive. Proxies, there has been a lot of crowding and there. They are forced into equities. I Like Health Care companies. They come with a lot of risk. The three leading democrats will all be negative for Health Care Stocks of their policies are implemented. Going into an election, you talk big. Then you moderate your policies when you are in power. If we get a democratic president , there will be some negative policies for health care. It will not be as extreme as they say. You have a Republican Senate to a moderate them. You talk about Political Risk in the u. S. You still very much like gold. You get a real yield and treasuries. You have 30 year treasuries at 2 . Is you dove with gold not get a yield for it. If you are european investor, it is better than a negative yield. Gold is a great preserver of value. If the trade wars get worse, the war is aof trade currency war. China will have to devalue its currency. You need real assets. Banks will be incentivized to destroy the purchasing power of their currency. Certainly has not helped bitcoin. Not quite as real as we thought. It was down again today. On tuesday. G 12 thanks so much for joining us. Up next, the Credit Suisse spy drama continues to unfold. The scandal has exploded into a threat to the ceo. We will bring you that story next. This is bloomberg. Matt 30 minutes into the trading day, lets get your top headlines. The impeachment drama grows in washington as President Trump goes on the defensive about his phone call with the ukrainian president. He also says a trade deal with china could get done quote sooner than you think but the wto is set to authorize the u. S. Tariffs on 8 billion. And smacked down. Amro, and Imperial Brands get crushed. European stocks hold up on the top line. Good morning, and welcome to bloomberg markets. This is a european open. Met miller in berlin alongside anna edwards at our European Headquarters in london. Anna subtle use of language. The Broader Market picture looks pretty different to the smack down we referenced. In terms of where we are on the stoxx 600 we are up. 2 . A positive language out of the Chinese Commerce ministry at the start of trading. Around that time, we drifted further out of negative territory on u. S. Futures. Perhaps that is behind the move. This a in belgium up 5. 7 . Daitive note by decile ssault systems. 15. 3 . s is down by they are a Publishing Business warning about their business in the u. S. Specifically. Will that have read through into u. S. Names later . In tobacco and other spaces is down by 9. 5 . Abn amro under investigation. Will get more on those stories shortly. Lets get first word news updates in london. Good morning. President trump urged ukraines leader to investigate joe biden recordingto a memo the u. S. President asking his counterpart to contact the attorney general and his personal lawyer regarding the matter. Trump says it is a rough transcript and reveals no pressure whatsoever but democrats say it justifies their impeachment probe. In the u. K. , Boris Johnson came out fighting in his first appearance back in the comments. Refused to resign or even apologize and says the Supreme Court was wrong. He challenges opponents to trigger an election, accusing them of cowardice for not doing so. Abn amro is falling the most in 3. 5 years after authorities opened a criminal probe into the bank and their antimoneylaundering laws. The prosecutor alleges the bank failed to report suspicious transactions and did not conduct sufficient checks on its clients. They say they are operating fully in the investigation. Imperial brands is plunging this morning. The Tobacco Companies has Earnings Growth round to a halt, a rising a backlash against ecigarettes and a continued decline in smoking. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thank you. Business leaders have weighed in with different views on the trade war. Jamie dimon says u. S. China trade needs to be fairer. Bob iger is striking a more optimistic note, saying he looks at china quite favorably. They spoke to Francine Lacqua in new york. We look at china and perhaps a different way but there are clearly issues that have to get dealt with. Serious trade related issues. I look at china more as a glass halffull can at least for our company. It is a market that was relatively inaccessible for a long time. It is now the second largest movie market in the world for us and we have built a huge the seem shanghai huge shanghai with government support, all at their expense. They welcomed us there. We have a Good Relationship with china and our access has actually increased over time. Should there be a level Playing Field . Absolutely. But are there other issues that have to get dealt with . Of course. But as ceo of the walt disney company, i look at china quite favorably. How much do you worry about the trade war impacting the World Economy . I agree with bob. The trade issue is serious and has to be dealt with. The method could be different. A lot has said tariffs are the only thing to try, but people should look at china a little bit differently. I say this out of respect. They dont have enough food, water, and energy. Their neighbors are really complicated. They have 500 Million People in poverty. They have a gdp per person of 10,000. America has all the food, water, and energy we need. We have wonderful neighbors. Theave gifts given to us by Founding Fathers which is led to the most innovative schools and companies. And even if we do a crappy job are gdp per person will be three times theres. And we have a common interest. We have a common interest in growth, peace, nuclear deep proliferation, antiterrorism. Environment. Environment. We should try and be friendly and understand their problems. What is the trade war actually about . Is it world supremacy . No, it is trade. They entered the wto years ago and clearly should have done more things. Fair means kind of reciprocal. Trade has never been reciprocal, but closer to reciprocal in a way that is fair to everybody. I hope we get there. Happen expect it to before the elections, but hope after that we have a fair trade deal. You have one of the most successful and known companies in the world. How are all countries different . To they expect Different Things from their leaders and employers . Well, i look at it from a cultural perspective. Because of technology, borders have broken down and Technology Enables us to bring our intellectual property globally with much more ease. But it can be misleading. The world is not homogenous. There is a lot of interest in local culture and respect. So as we look at the world with no two countries are the same, even though our stories tend to be universal in nature. We have to be extremely careful when we bring our global stories into markets that we do so with a degree of respect and relevance. Jpmorgans jamie dimon and Disneys Bob Iger talking to Francine Lacqua about the trade war in the Bloomberg Global business form in new york. The Credit Suisse ceo also weighed in on the trade war. It is a vital to acknowledge the negative effects of trade. Too often, those who are protrade said the benefits outweigh the downside, but that is insufficient as an answer. We need explicit insurance to the negative effects, not just saying the positive effects out with. That is really the central paint. Them, that is really the central point. Matt an investigation is reportedly underway at Credit Suisse to find out who hired detectives that followed a senior banker. They say it was to prevent him from poaching colleagues to bring to his new employer ubs. Joining us is nick comfort, bloombergs finance reporter. What is the latest in the saga . It was reported that this all khan got into an argument at thiams house. Andhat happened in january, whether it was become a nation of their souring relationship is one step along the way, we dont quite know. Camp are people in thiams who dismiss that argument as a personal matter. Over on the other team, i would say people are pointing to the fact that maybe he was threatened by his ambitions, that is the spin they are giving to the swiss media. The truth maybe somewhere in between. Thatir to say that, khan has been an ambitious man and that possibly resulted in a clash. Since then, it has soured to the point of khan leaving. At the latest stage, we are wondering what this means for thiam and other executives. Will the investigation have an effect on their careers . Can they even be losing their jobs . No ceo should rest on their laurels, but this is one of the moments in thiams career where he has felt most at risk. Anna indeed. This is turning into something of a tabloid scandal. How big a setback could this be for thiam . Well, it all depends on whether he did anything wrong or not and that is why the investigation is going on. Was he in any way involved in calling for those private detectives to follow khan and said that cross a line . We dont know yet, so dont want to judge him yet. But more broadly, this is a huge blow to him. He had successfully turned around Credit Suisse. He delivered on his threeyear strategy overhaul. Other bank ceos, thinking deutsche bank, did not manage to do the same thing. So it has been a very successful period for thiam. So this would be a real curveball at this stage what he was probably looking forward to the next phase of Credit Suisse. Matt thank you for joining us. Nicholas comfort, bloombergs finance reporter on the latest on this alleged spying scandal. Up next, we bring you some of the stock movers, including abn amro, falling the most in three years as it gets drawn into a Money Laundering scandal. An alleged moneylaundering scandal. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. Weve seen a real turn around and equity indexes ever since the chinese came out with an announcement to buy more soybeans. Now, we see the ftse up 28 points, the backs of 41 in frankfurt and the cap the cac gaining 21. Indices are higher but some of the biggest moves are to the downside. British American Tobacco is down 3 but being dragged down by imperial brand. They are saying sales will be somewhere around 2 were in may they thought it would be 4 . This is due to sales declining in the u. S. Ericsson is clawing its way back. It was much lower. The comes amid is one of costliest Corruption Cases on record, expected to pay about 1 billion to resolve an investigation into Business Ethics of breaches in six countries, including china. And pearson is plunging down 15 . They say the earnings will be at the low end and the blame this on the sales in u. S. Universities. Anna thanks very much. Thisy to choose from morning. Another big mover is abn amro after dutch authorities opened a Money Laundering probe. Prosecutors say they failed to report suspicious transactions and did not carry out sufficient checks on clients. Senior us is our analyst. We might beling about to ask a series of difficult questions. How serious is this . We see the share price giving a serious reaction. I agree. The main issue is we dont know. We saw what happened to dots danske so the potential is serious but we dont know any numbers in terms of how big it might be. But clearly, it is an escalation. Past, when we see these moneylaundering investigations, other banks are often drawn in. Do you expect that to be the case here as well . Philip its possible. Finead a nearly 1 billion last year for not having the proper checks in place for Money Laundering. Suit. Ro could follow banks looking and they could send it anywhere across europe. Anna this is pretty unexpected. You mentioned other finds that happened for other banks and there was a dutch example recently, but this sort of came out of nowhere. Philip the prosecution has. Charges. Has taken two they are increasing client costs and looking in detail at all of your customers. But now, something might have gone wrong in might be a case to look at. Element of an you know, are investors seeing are investors tying of seeing this happen to all of the banks or will they just keep shutting the banks they keep getting drawn into these scandals . Philip there is no doubt that regulators are stepping down on cases quite seriously. All of the banks are being looked at in a lot more detail. It does not feel like this is a case that is about to go way. It seems like there is much more. Anna thanks very much. Philip richards, Senior Bank Analyst at Bloomberg Intelligence joining us. There was not a great deal of detail given around abn amro. Up next, we stick with our top corporate stories and the impacts of a decline in vaping prospects is hurting big tobacco. You can see the fallout from this revelation on Imperial Brands this morning, that stock is down 9. 6 . This is bloomberg. Regulation and innovation are not friends. And listen to what we are big theanies and we will have dialogue and abide by regulation on a global basis. When the rules are clear we will follow those rules. But i do think that the startups of the world, the businesses that are building the exciting new ideas, whatever regulation there is, we would want there to be room for innovation at the much lower scale so that you can who have some sandbox to innovate in to take they in at a size at which are not a fundamental change to society. And once they get to a certain size they have got to regulate this like everyone else. Ubers was movers ceo making the case for relaxing global regulation. But lets turn to big tobacco. Imperial brands and its competitor p. A. T. Are slumping. Slumping after imperial issued a profit warning. Scarerd has this health hit Tobacco Companies around the world . This has been a big surprise as we can see by the share price reaction. Imperial following about 10 . They have downgraded aps guidance which is virtually all based on the vaping clampdown. Predictinge still around 50 growth in nextgeneration products. Tobaccoives to standard , that will rise about 50 . So you can see how much growth was priced into the stock. A huge amount of expectations going in to todays update which is why weve seen the shares come off. Anna concern around vapingrelated pulmonary injury. This must raise questions about regulation. There is a consumer reaction and then at the regulatory side. It will keep getting stricter, from what we hear. And is not just of the vaping side, but other products being looked at, but not as much as the flavored vaping by juul. But obviously, imperial is saying that all of their products are being looked at most only going to get stricter. Us, is that the Philip Morris product . Yes. That is where Philip Morris has done really well. It feels that this area for themselves where is the other companies have focused more on imperial does not have its own niche in the products which is where the regulation has gotten stricter and is starting to bite the Earnings Guidance now. Matt thanks very much for joining us on this story. One that is developing and we will continue to cover. Joe easton from our Equities Team in london. Atants to take a quick look what is going on in terms of sectors on the move this morning. Here andtoxx 600 index i have pulled up a grr screen. Breaks down the stoxx 600 into 19 separate industrial groups. The biggest gainers are technology and Industrial Services as well as automakers and auto parts. That is fascinating because you would think investors are concerned, today of all days, about the possibility of more tariffs coming for european automakers after the eu and the in. Continue to trade shots this airbus spat. But auto parts are doing quite well. The downside is banks and Household Goods as well as travel and leisure. Anna interesting. Our colleague made the point earlier that maybe it is the and perhapsading have jumped on that positive line from President Trump, lifting stocks such as the auto sector. But we have those news lines which could have pointed things in a different direction. Thats it for the european open. Stay with bloomberg. Surveillance will be keeping an eye on the European Market. U. S. Futures are really drifting amidst these conflicting trade headlines. This is bloomberg. I think the best companies succeed as a team, and our shirts from custom ink help bring us together. We just upload our logo, and if we have any questions, Customer Service is there to help. [male] custom ink has hundreds of products to help you look and feel like a team. Get started today at customink. Com. Nejra trump dismisses allegations as a hoax but democrats bolster their case. Boris johnson refuses to apologize for suspending parliament, demanding his opponents call an election and an ecb board member unexpectedly resigns. Was this a vote of noconfidence in Mario Draghis stimulus plan . Nejra lets get a check on the markets