Before we get to leave for our threeday weekend, but some people are already gone already. We are seeing a drop in the averages. This is the tightest we have seen at least this year. s focus on once esther one sector where we are seeing considerable movements, and that is retail earnings. Deckers have been estimates. There are still continues to be some speculation about the company. Ceo duffy writing in a note saying that these forecast results could enhance caleres, owner of Famous Footwear being at beating numbers in estimates of its top and bottom lines as well. These estimates beating numbers uso include also beauty ta beauty and costco, up , the 5 , and big lots companys earnings per share coming in ahead of what analysts has been anticipating. What about the bad . Gamestop, that company predicting that the growth that we have seen from the nintendo switch, which asked by also benefited from yesterday, it will be difficult to predict and maybe not as consistent. Abercrombie and fitchs trading lower on its fallout from morgan stanley, saying that the Country Company is in structural decline. Maas prompted to look at on the bloomberg. What kind of deal flows have ns been seeing . Quite a lot. Your today, we have seen an update. Is julia julia President Trump made his debut at the g7 senate in sicily, italy. They are having dinner this hour at the italian president. Back home in washington, investigators are focusing on a series of meetings held between Jared Kushner, trumps in visor and soninlaw advisor and russianaw, and ambassadors in december. Met, lets start with you on this. Think the Prime Minister seems to have been pretty smart here to try and taylor the discussion hered the agreements rather than the disagreement, and that is to fight terrorism, but what else can we get from this meeting . Have an agreement to fight terrorism. They wrote a separate communique on that issue. The interesting thing there, especially from an investors perspective, is that these agreements are joined together to control the internet better. So control what people can post on social media sites, for example, or how people communicate with each other on the internet. Previously, there has been a fairly offlimits, american liberty perspective on the subject, but they will try to clamp down together at the g7. That is one of the big things, the main things they have actually accomplished here at this summit. Scarlet another point of contention between the u. S. And its european peers as russia and what to do about that . Trumps senior economic adviser on how the u. S. Intends to maintain the russian sanctions. Answering one of the many questions about how the u. S. Administration will approach russia . It was very interesting to hear gary cohen say they would not lower sanctions on russia, they would be more likely to raise sanctions on russia. We came into that summit with expectations for a discussion about russia because the italians really wanted to bring not really bring him back into the g7 necessarily, but create some second track where russia can communicate with these world leaders. That seems to have been shut out. One of the surprising things from this meeting. Another surprise was all that we did not expect any kind of agreement on Climate Change, it was very important for the germans and french. They have been talking to donald trump about it and we are now hearing that President Trump is openminded on the issue, and trying to learn to understand the european perspective. Gary says he is a balding on the issue, something that he would not expect to do her from President Trump on the campaign trail. Julia and i want to ask you about some of the horse play going on during the leaders. Between the leaders. Social media was alive about the handshake between Emmanuel Macron and President Trump. But the mood today seems to be more positive. Absolutely. This morning, it seems like it was going to be an incredibly awkward g six plus one meeting because of the predicament President Trump. Yesterday, president anote tong was talking to the president yesterday, maccallum was talking acron was speaking to trump only in french without a translator, but today they were speaking english, Angela Merkel laughed at one of trumps jokes, they are trying to make them you welcome. Julia russia troubles continue to intensify as his foreign trip wraps up. Jared kushner is front and center in the fbi investigation in the meddling in the u. S. Election. From oure joins us d. C. Bureau now. Great to have you on the show. Report on this suggests that Jared Kushner is being treated differently than others that are being investigated like michael flynn. What do they mean by that in and what is this mean for the administration Going Forward and jerods roll . Jareds role . Kent he is a member of President Trumps family. He is very different. But it is part of one big picture for me, that we have an administration that has not separated its business interests and assets from the governing process. There are usually traditions in the country of saying that when you are president , you should really not be concerned about is this interests business interests, but running the country. So the people are confident that you are looking out for them and not trying to help your own bottom line, and that is what this question is about kushner. If you talking to the russians about possible he was talking to the russians about loans are possible investments and also sanctions. F those are kind of things people would want to know about, obviously. Scarlet clearly this administration is all about breaking tradition when it comes to the law and what is allowed and what is not allowed. The bottom line is that the president does not or cant face conflict of interest charges, but his staff can. Jared kushner apparently held meetings with russias ambassador and bakers in december. That was before he was on the governments payroll area so payroll. So is that what the fbi will be looking into . Kent with kushner and the other people in the Trump Campaign to the extent they were in contact, there were talking about what are we going to do when we come into office and welder whether that would be different from the previous policies and whether, in that conversation, they talked about some things they did for the Campaign Last year, something they could do in terms of financing, all of these other issues which should not really,. Come up. Kushner is subject to these rules, he is considered an employee. Those things would not come up, but they are coming up in the Trump Campaign and in the trump team and administration. Kent, thank you for your insights. I was just thinking about the g7. I do not think they are being quite so lively on social media. Lets check on the bloomberg first world news this news with emma chandra. ; President Trumps top economic emma r knowledges that President Trumps top economic that acknowledges the Election Campaign resumed in the u. K. Today with the polls today showing the Opposition LeaderParty Labour Party within five points of the conservatives. They laid out part of the labor agenda to bloomberg media. Our concern is protecting jobs, protecting the economy, protecting things like Financial Services. We will not, as theresa may has done, try to control immigration. Not to say that we should not have fair world migration. We work hard as an economy. That is why it will be different. Emma about 234 Million People registered to vote ahead of next. Onth election Hillary Clinton deliver the commencement address at her all mantra today, saying that she is doing ok after losing the election. A trillionrouded in dollar mathematical lie. Lets call it what it is. It is a con. They do not even try to hide it. Why does all of this matter . Matters because if it is it is our leaders lie about the problems we face, and we will never sold them. Emma the former secretary of state did not mention President Trump by name. Im emma chandras, this is bloomberg. Scarlet coming up, a bloomberg exclusive. Latestcutive on the adventure to boost their footprint in china. This is bloomberg. Julia this is bloomberg markets, i am julia chatterley with scarlet fu. Torlet china is on its way becoming the worlds biggest market for Package Delivery and ups once make sure it has fair share. The company Just Announced plans to renew their chinese operations through a joint venture. We spoke to them recently on the deal. Leadingpresses the China Express delivery company. They have done Amazing Things over the past few years, built up an incredible network, and are absolutely the type of company that we like to partner and network with. You have been in china since 1988. Why did you feel the need to joint venture with the Chinese Company to expand your presence there . We are always looking what is best at what is best for our customers. We are very proud of our operations, but if you take the mutual restraints of the two companies, it just increases the value in the eyes of our customers. So sf holdings has an incredible presence as far as 13,000 access channels too small or midsized chinese companies. You combine that with our incredible express network, where we deliver 19 million packages a day through 220 countries and territories, and one plus one equals a lot more than two in this case. I actually read in china daily about this deal. Deliveredr company over 12 million packages last year, which is pretty darn big. What will you be putting into this joint venture and what will they be putting into this joint venture . Equal joint be an venture, and we each put in about 5 million to the joint venture. That is phase one and we see where we go from there. The china market is so important to us. It is the Worlds Largest ecommerce market and is an Incredible Opportunity to provide customers with even more benefits. Shown in, should the report, this will focus on the transfer packages from china to the United States. What is phase two or three . How big this become for you . We look at this of the beer the verythis as beginning. This could be big to us but more to our customers. First is from china to the u. S. As impressed and looking forward to u. S. China, and then of course, china to the rest of the world and back. There is all kinds of potential here. This is a very big first step. We are very excited about it, but there is more to come, that is for sure. As you conceptualize this joint venture, will it be focused on businesstobusiness transportation, business to consumer, or a mix of them . Two, will be a mix of the and where we really believe we have additional benefit is to our small and midsize customers in china that really have not had access to our network in the way that they will now. It is beb and bc. Talk about smalland mediumsize customers. Beenhave really intertwined with alibaba. A lot of their success and a Remarkable Growth pattern has focusesm alibaba, which on those organizations. To what extent is this the way to do more business with alibaba for ups . Course, anytime you look at doing business in china, alibaba is a force to be reckoned with. They just have significant presence. We already have a Good Relationship with them and will. Ontinue , alibaba as having their first u. S. Conference with small and month, customers next alibaba is having their first u. S. Conference with small and mid wife customers. The ceo ofat was ups, speaking exclusively with our david westin. Julia we have a breaking story. Softbank is said to be considering raising its share in nvidia over time. They currently own a 9 stake in the company, looking to add to that. They did raise that fund for investment, so it looks like just the beginning. From new york, this is bloomberg. Julia this is bloomberg markets, im julia chatterley. Musket back in 2015, elon delivered the model s after years of delays. But the model x continues to navigate a bumpy road. Jan all has been tracking teslas pace for years, and joins us from san francisco. Are these selfinflicted wounds or something that has been conspiring against tesla . Tesla has not been model. Ming about the voestalpine wing doors were not easy to engineer, and i think note falcon wing doors were easy to engineer, but i think they have learned their lesson and will and will and that with the model three. Tesla is in this spot where the model s is their flagship, they have the model x, and now they have the model three, another sedan. Where does the x fit in this lineup and what is demand like Going Forward . Has pointed to this thetweeted we are making simplest model three first, like the s. We did not do that with the x because i was an idiot. Tesla has stressed over and over again on recent earnings calls that this model three is designed for manufacturing and will be simpler with fewer configurations. It is a massmarket car without all the bells and whistles of the model x. So i think the x have growing pains, but they learned a lot from it. Scarlet and there are plenty of critics out there, like jim chanos, who are concerned about where tesla stocks are trading. Dependent on be the model three, and all of the other nonsense notwithstanding, at the end of the day the what it isnot worth trading at today on its current business, and if you do not believe me, look at what elon quoting that quoted as saying today. Was not worth 50 billion. Scarlet she did press on to say that tesla actually did say that the market was being generous. But what about projections being too extended . What is interesting right now is that tesla is trying very hard to differentiate the model three from the model s, and there is some confusion in the marketplace about the car and how they differ. Today, elon musk tweeted a sidebyside comparison, showing the s versus the three, stressing that if you order the s now, you will get one in a month, but if you order the three you will have to wait for at least one year. We are seeing a bit of the osborne effect, which happens with every new vehicle launch. People are excited about the three, but is that tampering down demand for the s and x at all . We will not know that until we see sales figures for the next quarter, but there is a perception among some tumors some consumers that the three is a newer and greater car, and a smaller vehicle without all the features that tesla owners have come to know and love. Scarlet thank you so much. It reminds me of how people hold off on buying the latest iphone because they are waiting for the new generation. And it will be interesting to see how this affects the overseas markets as well. Bringing a lot of chinese buyers into the tesla. Still ahead, we have your commodities close. Recovering oil is following the decision to extend production top cuts. We will look more into what the new details are that agreement. Julia from bloomberg World Headquarters in midtown manhattan, this is bloomberg markets. Commodity markets are closing in new york. We will begin with oil. It is reverting after its biggest loss in three weeks after investors had a tense reaction to opecs decision to cut production for nine months. They are saying that the cuts are working and stockpile reductions will accelerate in the third quarter. We are trading just below 50 a barrel there. Lets take a look at the chart you can see here on the bloomberg. Attracts u. S. Production as a percent of opec production. That is what you are looking at in the white line there. You can see at the low point, u. S. Output was at 12 of opecs level, and that is down there at the bottom of the red line, and if we bring it forward to today, you can see that it has more than doubled to nearly 30 of output. Growingt shows the influence of u. S. Crude production on global oil prices. The question is how much longer will it continue for . Speaking of oil, the opec deal leaves lots of unanswered questions. We have more on that from vienna. Became, they talked we came, they talked, all of them, opec and nonopec. The agreement was 1. 8 Million Barrels. Ut this was not enough to do what ever it takes, the oil we deliver to the market is exactly what we arrived here with, 1. 8 Million Barrels being taken off the market. They wanted more, and the price of oil dropped like a stone yesterday. A small recovery today. What did they give us . It was that in a news conference, we will export less of our products to the United States over the next couple of months. They will review the data. These are the crumbs, we will do more. And that is why the market has shuttered. When it comes to an exit strategy,ew review the data, review the data. That is what the ministers said they would do and would be the continual process into we get to april of next year. They are prepared to do more, but they want to see more before we get to the end of the year. The assurances were simple, the market will rebalance by the end of 2017. But they are all on watch and it is a whole new love affair. Question forec, a the market. Cannot love affair indoor . That love affair endure . Scarlet lets get more insight from gina davis, who covers north American Energy and commodities for us here. Love affairhis between opec and russia. Can they last for the next nine would actually describe it as a shotgun wedding. They both need higher prices and oil in oil. They were forced into this arrangement and have made it work so far, but compliance is over 100 of what was promised. How much longer that will last is uncertain. Inhad several projects russia due to come online in 2018, 2019. They are evil eagle eve early eager to see that oil come to market. Scarlet and they were talking about the compliance and saying it was over 100 , but that may not ask and to the next part of the agreement. Them tos easy for comply during the seasonal downturn in the winter, but it is a much harder prospect for them to do during the summer months when they have a lot higher demand at home. Compliance ates around 70 80 . Do you think that is just . Stiff . That is was no think the market longer impressed with opecs ability to deliver. If you think historically, opec has been about 60 compliance whatever it tries to do anything aggressive in terms of reduction quotas. Have obviously they have obviously surpassed that, but you now have a rise in product due to the u. S. Productions. They might decide it is time to defend market share. Elemento we have some of slippage in compliance, and jc worsens and jpmorgan head of Asset Management says they expect to see this by 2018. Do they need to be talking about an exit plan here . We only get to march. Tina we get to april 1, which was noted by several people at april fools day. What will be happening as of that date. Defense minister said they are looking at other options for when production, the production agreement ends. The saudis have made a lot of noise about this not being the end and they will continue to look as they go forward. Nothing is moving oil price that much in response to that because everyone has been nonplussed by the fact they did not do more or promise more beyond ninemonth. Julia what other options are there . Tina they could cut further. Or they could go to the shellback. Scarlet that seems like a tall order. Tina davis, a lot more to watch your from opec and russia. Julia now lets turn the debate over to steel imports and whether they impact u. S. National security. Here is what President Trump had to say in april. We will fight for American Workers and americanmade steel, and that is beginning immediately. Lostecades, americans have their jobs in factories to unfair foreign trade, and one steel mill after another has been shut down, abandoned, closed, and we will reverse that. Scarlet for a closer look at the state of the u. S. Steel industry, we are joined by joe. Since becoming president , donald trump has lamented the u. S. Steel industry, saying it has been taken over by chief foreign competitors and led to shutdowns and lost jobs. How does that actually effect that . It is accurate that we have seen the domestic Steel Industry years, 70for 50 years, and the same thing has been happening to the aluminum industry. Donald trump ran on a platform that looked at these bluecollar workers that were very familiar with steel jobs, coal jobs, everything else. He said listen, we will be more protectionist, bring jobs back to these industries. So now you are seeing this put in the policy right now. Scarlet which is section 232. Until april, nobody have anded at this since 2001 the bush administration, but it essentially points out that many in washington are trying to figure out, not only washington, but the industries as well, what is actually going to happen here. Julia i was going to say, what are the limitations here, because this seems like it has to slap tariffs on left, right, and center. One person said it seems to give the president a blank check , but also allows for him to work around wto agreements. Essentially this is the question. Is the Commerce Department investigating this for National Defense services to come up with some sort of remedy that the president can then say have to put into action regardless of our commitments on the wto . Julia were talking about this with national security, why you would use section 232. So according to this, this is less than 5 of total domestic steel consumption, less than 1 in aluminum, but they argue they use it in warships and such. A point out of the less than that aally pointed out high purity of aluminum used in defense, if we could expand capacity to supply ourselves even almost twice that. Twice the actual demand. There are huge question there and obviously it is a question of if you just going to focus on china or will he actually focus on some other trading partners . Julia great leverage in the making. Scarlet donald trump considers itself a dealmaker, so what kind of deal is he looking to strike your . So is donald trump using this as a front to talk to various trade partners . That might be the case. There were a couple of people saying in the report that that might be the best way of doing things, going out and taking some sort of action that sets a precedent that on an international level, looking at the wto, my defend many other trade partners and set new precedents we may not necessarily want. What happens behind closed doors , i am uncertain at this point. One of the last quotes on the story was the Trump Administration is now new using now using trade remedies and cases that have not been used in decades, since the reagan administration. So they have to find new things that may leave the market with a huge question mark. Thea we recommend you read report, it is actually quite interesting. Lets check on headlines with the first word news this hour with emma chandra. Secretary of state Rex Tillerson arranged a quick visit to luncheon london to apologize for leaks in the manchester bombing. We take full responsibility for that, and we obviously regret that that happened. In terms of hatteras how to fix the relationship between the u. S. And great written, this special relationship that exists between our two countries will certainly withstand this particular unfortunate event. Emma President Trump threatening to prosecute those responsible for the leak. President theresa Prime Minister theresa may met her french counterpart today for the first time at the g7 summit in italy. Although the countrys share a close relationship, the two disagreed over brexit negotiations. The United NationsSecurity Council is condemning the attack s carrying Coptic Christians in egypt. Hundreds 23 are dead, thousands more are wounded. This follows bombings at coptic churches on palm sunday that killed three dozen people. And the former greek Prime Minister is recuperating today from injuries offered when a bomb exploded inside his car in central athens. Officials say cap davis will thein in intensive care former Prime Minister will mean in intensive care, but his injuries are not life threatening. He served as Prime Minister for six months in 20112012, and is a formal debit former deputy member of the European Central bank. Emma chandra, this is bloomberg. Julia coming up, shares of amazons closing in on that 1000 a share price tag. Up next, what the company is doing to expand its business. From new york, this is bloomberg. Julia this is bloomberg markets, i am julia chatterley. Scarlet and i am scarlet fu. Lets check in on the markets. Are not seeing a lot of movement in stocks today, but we have seen him ever come out of , out of then air reflation trade. On the seen your spread u. S. Treasury in white and value is a ratio of growth in blue. We have seen that reflation trade, out. Another way to express that is to look at the leadership in stocks year to date. Here we are seeing technology meeting, so cyclical names have been leading stock gains this year. Tech companies are also in that and Energy Groups are also in top spots. And companies that continue. Contributed to gains we continue to see this year. Facebook, amazon, they are all about the same amount this year. The other two that we are watching have contributed the ast are microsoft, trading at record today, and alphabet, trading at another record in todays sessions. These are some stocks that have had a lot of momentum behind them going up, but what have they done for big investors or founders in these companies . If you look at the four wealthiest individuals in the world, bill gates associated with microsoft, and his oneyear increase in net worth is 6. 4 billion. Jeff bezos of amazon, 20 billion net worth over the past years. I many seo ortega of spain, and ren buffett amani ortega of spain and warren buffett. Julia we took a trip to check out the newest bookstore on the block. Kill storeelped chains, and now it is trying to become one. The company, since 2015, has been opening a handful of physical bookstores in places like seattle, san diego, and chicago. People are moving away from buying physical books. We wanted to give them a new way to discover books and the desire to find a book that you love. It is a desire that is very common. We felt like we could make it easier, make it more to life will to bring back customers into a physical space. Store of the books in the are bestsellers, or rated four stars and above by amazons online book buyers. There are large sections were books that people have added to wish lists, and you can scan the book covers to get a price on your amazon app. But amazon is also using its bookstores to get people to bring more amazon into their home. There is a big section for people to test drive the like the gadgets, kindle fire tv box. There are also kindle ereaders, amazons line of voiceactivated home speakers called leeco, and home electronics. Echo, and home electronics. How does the amazon user interact with ease things . What can i ask alexa . They want to see these things then ask experts about it. We have brought these into the store. It is still not exactly clear why amazon is bothering with physical stores at all. Its website is already the biggest bookseller in the world and the popularity of shopping for books and much more on amazon. Com has crushed store chains like barnes noble and borders, which went out of business a few years ago. It is not disclosed sales made in the stores, but it is probably a tiny fraction of the companys annual revenue. And the final load of irony here . Belly up, its went had a bookstore in the same all that is now home to amazon mall that is now home to amazon. Books or you readers . Scarlet books, because i cannot member anything i read in the ereader. I use kindles for vacations. Julia i am all about the ereader. I love books, but i like looking at books. Scarlet and the smell of books. Julia there is a coziness about real books. Scarlet lets take a look at the business flash, with some of the biggest business stories in the news right now. Ups moving over to china, hoping to boost commerce. This will offer customers more shipping capacity and storage options. Ups access toves sf Holdings Network of 30,000 customers, many of them small and midsize companies. Arecutters creditors prepping for talks to restructure a 4. 7 billion debt. They say the meeting cons as the wary ofng retailers is a takeover bid by hudsons bay of canada. Blackberry says it will end up getting 940 million in royalties. An arbitrator ruled that the due to had overpaid license agreements. And that is your business update. Julia shares of nvidia are rising as japans off bank says to be considering increasing the stake in the u. S. Chipmaker. That is next. This is bloomberg. Julia im julia chatterley. Scarlet and im scarlet fu. Lets talk about that deal sending shares of nvidia higher, japans softbank continuing that considering raising its shares in the u. S. Chipmaker. This man has been softbank has been trying to broaden horizons. Why nvidia and why now . Nvidia fits with a lot of things that matter and that they have been talking about with machine intelligence, ai, and it is a chip company that has required a reputation for being the leader providing the guts of computing systems that we will need for these new computer workloads that are coming to cards and cars and other devices. Scarlet what is astounding is that over the past year, nvidia shares have gone from over 45 141. If you look at it over five years, it is pretty incredible. Over the past five years, it was 25 . We are clearly looking at an 80 billion plus company. Investment will struggle to take a bite as big as that. If we knew what the intentions were, as you saw in the story there is still some work to be done on our behalf to find out their intentions. Clearly, with our earlier story we first reported it, there were reports that they were at 4. 9 . That is a move for a stock that is just below the threshold, which by then you are hard by regulators to declare your intentions. Scarlet another turn of this story comes from microsoft, which uses those chips in its xbox, but can you give us the details of what could happen if they turn around and buy more . There is a History Lesson here. The current xbox does not use nvidia at all. Are made by athat rival to nvidia. Were talking about the first xbox, the big chunky thing with the green ask that you may or xt remember ask that you may or may not remember and required an nvidia chip. It was a really important part. Scarlet some important context here on softbank buying a stake in nvidia. Julia coming up, the new push massive ethics trading market. We will discuss this, next. It is 12 00 p. M. And and san francisco. Scarlet welcome to bloomberg markets. We are live following the top stories on the bloomberg and from around the world. In markets, china is stepping into curb volatility in the yuan. The intervention could undermine efforts to increase the role of Market Forces in asias largest economy. The softening dollar is sparking the biggest wave of Foreign Investment into u. S. Equities since january of 2013. And turning over a new leaf. Speaking to bloomberg about the voluntary standards to root out misconduct in the embattled currency market. This is becoming a Light Trading day. Traders are ready to go on vacation. Stocks have been bouncing between gains and losses. Lets take a look at volume. Telling us what we already know. This is azat. Theme is running 25 below 20 day average. On the bottom you have it to a check in the 15 minute increments and the blue line is volume running below where it typically does at this type of day. Softbank was interested in raising its stake into when the headline came out, shares of by 2 . We have seen continuing movement and retailers, on a later time scale than most of the rest of the industrys in the s p 500 and elsewhere. We have a mixed picture. Reporting a big boost to its comparable sales and online sales, the maker of uggs reporting numbers that beat estimates. Gamestop out with a cautionary malls were shot were higher yesterday after earnings beat estimates, especially best buy. The gains. Ing the low end of guidance. Were seeing the effect of store closures that were announced earlier and that will take effect area scarlet things we will keep an eye on. Theant to start with bloomberg scoop that china is changes to the way a tech the daily reference rate against the dollar. This comes at the same time that Foreign Investors are making their way back to the u. S. Equity markets in a big way. Covering the stories, bloomberg fx reporter george leigh and oliver renick. Plans to add what it calls countercyclical factors to its daily axing. What does that mean . Recs it is more like a black box, no one knows exactly what it means. There seems to be an emerging consensus that it would stabilize the dollar and Exchange Rate. Essentially what we would be seeing, is a period of repegging. is it trying to prevent a collapse . [indiscernible] it is within a narrow range. It is trading between 680 and 690. On the other hand if you look at the yuan rate versus other including the korean won and the japanese yen, the renminbi is signing according to that index post by the China ForeignExchange Trading system. Is this a temporary measure because they want stability heading into the meetings in the autumn, and in line with that, what does it mean for sdr inclusion because they make such a big deal about the liberalization and what message is that sitting out . And moodys mentioned the reason why they were willing after the downgrade to give them a stable outlook, was that because of capital controls because they said that would allow them to do the deleveraging. Tile this things together for me. That is a lot of questions. The first one, temporary or permanent, it would probably last for a while even after the party of congress. Back to the moodys question, one thing is they are placing all those carriers around capital outflows and they are working quite well. Just judging from the Exchange Rate and from the market sentiment, the market is no longer as panicky as it was likely last year. Fundamentals, balance of payment, the longerterm sentiment, most people think we should [indiscernible] from here. The market is pricing above seven or even longer from here. These measures would be in place until the fundamental expectation of the market shift in the medium to long term. In the shorter term everybody expected to be stable. We need a change. Scarle great to have your perspective. Did, we wrote about this, our teams combined a year ago, it was in june last year. It was a different scenario where china was selling off u. S. Equities, they were selling treasuries. They were dumping all this into the market. Part of it was related to the blips we had in their currency as the country is taking efforts to shore that up. The opposite is happening. Not to the same extent. In 2016 china liquidated half of its u. S. Holdings. Is pretty interesting. This was in june of last year. 50 . Were down at as you can see, if we get closer over the past year or so, the line has moved up. Were seeing a slight easing back in to that market where chinese are interested in holding u. S. Equities. Maybe it is a valuation thing or softening of the dollar. Of the different picture sustained efforts they are making to strengthen the currency. We have seen that from a broader scale. Where you look at over the course of the past 10 months in which foreign holders of u. S. Equities were removing their positions getting shorter and shorter u. S. Equities and that has hit a full point. The readings we have gone from u. S. Treasury are indicating there have been some money coming back into the u. S. That is a better entry point to some extent where you have the dollar right now. Scarlet thank you so much. Lets get a check on the headlines. She is not ready. Now lets get a check on the headlines. Will maintainrump obama era sanctions against russia and strengthened them. His top economic advisers set the remarks made by gary cohn are the strongest nation in that [indiscernible] until moscow hes an international the court to resolve the conflict. Forthe g7 is a lonely place donald trump. The leaders made it clear they want the u. S. To live up to its previous commitments to the paris agreement. The president declined saying he would not rush into a decision. He called Climate Change a hoax during the Election Campaign. New airport screening agreement has been tested that could make the laptop and tablet been nothing thing of the past. For companies of working on machine that would give screeners a three look into baggage and electronic devices. Congress has not allocated money to buy the new agreement. Gave theident pence commencement address at the u. S. Naval academy. He assured the 1000 graduates they will have and i lie in their white house. As you prepare to assume your duties i want to say to the officers and your families, President Donald Trump is the best friend the armed forces of the United States will ever have. He said we will rebuild the military and restore the democracy. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is number. Hing in. Weig man chatear from the tasked with chairing the committee. This is bloomberg. Scarlet this is bloomberg markets. Julia it is time for the bloomberg is his flash, a look at the biggest business stories in the news now. The sedan has racked up thousands of orders but the Utility Vehicle has not met the ceos expectations. Andvers heavy to keep pace u. S. Registrations of the model have slipped last few quarters. Musk blames the struggle on making the vehicle to complicated. British airways and iberia will impose a 10 booking fee on november 1. The levy will not apply to sales at the groups irish unit airline guess. And trust Financial Services surged after a lifeline from its see sweet family. They agreed to inject 300 million for new you new shares in a private placement. It will help to stabilize the company that has seen its market by half. That is your business flash update. Scarlet foreignExchange Trading might get a chance at redemption. The fx global code exists. These efforts come in the wake of the rate rigging scandal which has led to 10 billion in fines. Helped of cls group steer this effort and he is speaking here. At the core of putting code wasthe fx global bringing together what i believe is the most significant Publicprivate Partnership in markets that has existed. We had 45 private sector participants from every corner of the market from korea to china from andy a and brazil, and all Major Centers alongside with the leading Central Banks of the world. Heads of markets for each of those Central Banks. Our input was quite significant. At the end of the day, we believe we received over 10,000 comments on the work we were doing. This to your process was allencompassing in what we did. We covered all of the issues that affect the marketplace today. Voluntary, is tougher rules of enforcement might be a better solution, some would say. What do you say to that . The question i was asked more is most often was how do you get a market to adhere to a voluntary set of principles . These principles guide best practice in the market. Is arguably the Worlds Largest, most liquid, and most important financial market. Most participants want that market to function more all know,y but as we no principles, no rules, no regulations, no laws. Someone who wants to act dishonorably or break those laws. We are counting on the market to adopt these principles and get behind them because it does lead to a stronger marketplace. Pressure mightr be part of this, is a pressure enough . It seems to me. My expectation and we have seen the entirety that of the Market Participants, this includes big firms, they buy side firms, asset managers, corporations have indicated they are willing to get behind the code, sign the statement of commitment, and put these principles impact practice. Is more managerial pressure. You want to see her manager acting in the most ethical way possible. He is responsible for your bonus and saying new targets. It is hard to act very ethically and on the other hand if your manager is not, youre not going to, right . The town from the top in any business is critical. What we have seen over the last several years following the financial crisis and the trust that was broken in Financial Markets and as you highlighted, some significant incidents in the foreignexchange market has changed the burden back to Market Participants to say we can oversee this market. The foreignexchange market has no central regulatory body. The principles are not intended to replace regulation. They are meant to supplement. Vanguards head of accept of ethics trading said he would like to see that gotten rid of. Complexbook is a fairly practice that is used throughout the market. Like any practice if used appropriately helps add to the liquidity and smooth functioning of the market. If abused of course it will turn the market in a bad direction. What we have been able to do is provide some guidelines about how last look can be used effectively and it relies on manyas it does principles in the code on transparency and how Market Participants share information. It may go away in the next three for a five years, we believe that last look is an important part of the market today and helps that market operate more smoothly. There are examples here, you give the example of just take shouldrket participants do so fairly and with transparency and to give an example but i can see fx traders out there saying is not how the market works so how are we supposed to make a monday our money . We make it clear that if prehedging is done with transparency and done in the best interest of the client it helps the client execute in order more effectively. Right rigging scandal severely damaged trust in the industry. This code, is it representative of a last chance saloon to the fx industry . I would like to look at it as a new era. For twobeen at this years now. With the broadest set of Market Participants possible. This is a very strong opportunity for the market to demonstrate how it can operate most effectively and how it can buy sideoth for the and the sell side. It is critical to note this code was not written solely for so side participants. It was written to help participate in the market in a way that is more effective tomorrow then maybe was done in the past. Scarlet sears announcing its first quarterly profit since 2015. As you look look at the market reaction, exuberance seems to be fading. We have one traders strategy for getting into the x and action coming up. This is bloomberg. Juliet this is bloomberg markets. They cboening me from the cboe. It did not take long for us to ull circle and make records for the major averages. No slowing of momentum. Is there any sign your sing in the Options Market . It is not over until it is over with this market. Likethursday it looked tough was in and everyone was getting nervous. Things have completely reversed themselves, we have seen this before. We have the fix back below 10. Looking to attack that recent low. My target is still nine from the sideways channel. Slowed and some of the other option markets. Intact. Are in stocks higher, the vix lower. Potential catalysts coming up. We of the jobs report and the fed meeting coming up later in june. Is there any uptick in activity surrounding any of these types of catalysts . There is potential for some unknown that those are factored in. There is an 80 chance we will raise rates. Sometimes you get a little bit of volatility after the fundamentals do not keep paying the tape every morning. We will have to wait and see. Momentum is an extremely powerful force. We are closing in on 20 . Not get in front of the freight train. It is important to see how it reacts, not necessarily acts on anyone given day. Juliet the trade has to do with sears which had quite a surprise in its latest report with its unexpected profit. Sales went down in a big way but profitability is improving. It looks like you might be interested in owning sears through an options play. Retail rot,king at that has brought these markets down and sears have been trading between six and 14. If you can look at this from a probability standpoint, if you want to buy the stock and buy it at a lower level you can put it at a limit down below. Or you can get paid not to. What we are to do is sell the seven dollar put for june so it is a time to play. You are selling a seven dollar put and taking in that premium which lowers the basis to 660. You are either getting a 6 return on risk or you are buying a stock that you want 15 lower. It is a winwin situation if you are interested in getting in long sears. This is a strategy that is going to benefit your probability play. Is sears a stock you want to fundamental perspective, is sears a stock you want to end up with . I am not making a fundamental call on it. What i am looking for is a probability play. Bere is a 75 chance it will above the breakeven. I am using this increased fear in this stock, im taking advantage by selling it, i am prepared to own the stock at a lower level. It is a single digit stock. If i am longterm success see, what is the downside . Julie have a Great Holiday weekend. Back to you. Juliet we will speak with the head of emerging markets at Brown Brothers harriman. Stay with us. From new york, this is bluebird. Bloomberg. , lets get to first word news. The manchester train station damaged monday will remain the foreseeable future. It suffered structural damage that needs to be properly assessed and repaired. The station links the Manchester Arena where a suicide bomber killed 22 and wounded scores of others. Have agreed to a global statement. They agree to Work Together on multiple fronts to battle extremism. The statement included a show of support for the u. K. Following the manchester bombing. Prime minister theresa may expressed her appreciation. Everybody sitting around this table for the support you have shown to the United Kingdom in the face of this horrific attack that took place. I think it is important that as late as we have shown our fierce determination to ensure that we every tool available to us to fight against terrorism and protect our people. , the fight has