In the industry, including the ceo of boeing. Majority, he claims an extraordinary victory. What does it mean for his ability to enact reforms. We are watching a developing story in london. A ban hit a group of people thought to be muslim worshipers leaving a mosque in the north of the city, killing at least one person. Mayor said the con showed this called this a horrific terrorist attack. Guy is in paris for the error show. I know its very hot, but so is the roster of guests you have coming up. What are you looking out for . Guy we are here for one day. We are going to speak to the ceo of boeing. Plane,nnouncing a new the next 10 . Also have the issue of qatar and back prices impacting future sales or current sales. Thats a big question we will figure out. We will speak to the ceo of Qatar Airways. Then we will talk to airbus a little bit later on. Mr. Macron is going to be here fresh from his election win. He will be having a conversation and we will try and find out what to discuss. We are less than an hour away from the cast trade here. Just a half hour to go until the open. Take a look at the futures. We are looking at gains across the board. 9 , stocks 50, futures up 19 of a up almost percent as well. Looking at a positive day for equities. Take a look at my screen. Some of the biggest movers away from their 30 day moving average, this is how we order them in standard deviations. As far as Equity Industries are concerned, it is obviously this was friday. We had the weekend there, they were not quite opened yet. New zealand, big gains there. We came off of a strong close to last week and it looks like we will kick it off strong again as well. At four x, you see the key weak dollar and the yen is what you want to keep an eye on. Weakness against the dollar is something we had seen earlier. 111. 06. Ee strength at take a look at commodities because oil has an incredible story to watch and we can see heating oil movers to the downside. You want to keep an eye on that as well as the bond trade today. This is all asia, with the exception of sweden. We kicked off the brexit negotiation and brussels. Lets get back over to hong kong and check with first work news with Juliette Saly. Juliette the u. K. Prime minister says the police are treating a van crash as a potential terrorist attack. One person has died and eight hitbeen injured after a van people. The driver has been arrested and taken to a hospital. No other suspects were identified or reported to police. The counterterrorism command is leading the investigation. Has declared three days of National Mourning after a forest fire triggered by thunderstorms killed more than 60 people. At least 30 people died in the vehicle with more bodies found on the side of the road. More than 800 firefighters were still working yesterday to contain the blaze, which erupted saturday and spread. Britain is to observe eight respect fornce as the credit felt tower disaster. Theresa may has said the response was not good enough. That comes as public criticism of her has mounted and police raise double debt told to at least 58. The u. K. Government has been asked it has canceled the queens speech to give lawmakers more time to get deal with brexit negotiations. The next Parliament Session is due to start this wednesday and is doubled in length to two years. Talks between the European Union about the divorce get underway today. Publicce, there was no celebration from Emmanuel Macron as his party client and historic majority in legislature. The public on the move is on track to win more seats in the national assembly. That would be the biggest majority in 15 years. The turnout of about 44 is the lowest ever for a french legislative election. Theu. S. Navy has identified seven sailors who died when the ship crashed with a container. Divers recovered the bodies after the severely damaged uss fitzgerald returned to the base in japan, aided by tugboat. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Here are just some of the highlights for the week ahead on this monday. As mentioned, the Paris Air Show gets underway today. State opening of u. K. Parliament is set for wednesday and that will be a to your parliament. On thursday, youre being Union Leaders start a summit where they discuss the relocation of eu agencies after brexit. Yours truly will be headed to brussels for that. In brussels, brexit talks begin today. We are watching out for appearances by the fed policymakers William Dudley and Charles Evans stateside. Lets get to our mliv team in singapore. What are we expecting from the very hawkish, surprisingly week . H fed last what are we expecting to hear from the governors this week . This will be an opportunity for officials to get the market and fed on the same page which they do not seem to be. There is a bunch of stuff happening in the trade market that you would associate with a period of cutting rates, but they are raising. We had fed president kashkari explaining why it he thought the fed should wait. He thought inflation was moving downward away from the fed target. So the fed and treasury market are not on the same page. To raise rates this year and the treasury market is signaling it will not happen. Those two have to come together somehow. Matt there was a lot of chatter after the decision not sweet about a fed error, probably referring to Janet Yellens tone. What are you hearing about the markets and what is the outlook for treasuries . Guest this talk of an error or policy mistake is cropping up in a bunch of weakened research. Askari y that as kashkari said, and he is the one that dissented from the decision to raise rates, the fed is raising rates in a. Period where they should maybe cause and breakeven rates are falling, showing inflation rates are showing. Slowing. If its right and its slowing inflation, then its all to the good for treasury bonds. Matt tech stocks are some of the biggest gainers. We had an amazing story going into the weekend with amazon depending on how you see that. Is the tech wreck over . Is the Viktor Troicki drop we saw, the big scare, done . Guest here in asia today, technology was the best performing part of the stock market. Gainers,couple of the samsung electronics. Wasby the way, some of that related to the idea that grant prices are rising. At the nasdaq index, certainly down from the high and nobody would want that to happen, but if you look at the longterm chart, its close to what is happening. Its looking like the tech wreck is turning out to not be so bad. Mliv was goodman there, blog reporter. At mlivfollow insights. Know to only way i start my day. The first thing i fit on the bloomberg terminal. You can watch the Program Using tv. Check it out here, as well as the video stream of what we have on this program, you can follow our charts, get the buyout from our guests, see the functions we are using, then at the bottom of the screen you can ask our guests a question. They will give us any questions you want to include forever guests. You can become an interactive art of the show and you can also ideas here to bloomberg directly. We are like at the Paris Air Show where we will speak to some of the top names in aerospace engineering, including the ceo of boeing and airbus. This is bloomberg. The opening 18 minutes away. Matt you are looking at live pictures of north london where hours ago, a van hit people leaving a mosque, killing at least one person. We will keep you updated as this story developed, but theresa may said it will be approached by the u. K. Police as an act of terrorism. We are also getting headlines across the bloomberg terminal right now on michael gove as we enter into the brexit negotiations here in brussels. Attack,t the terrorist he said it is an unspeakable act of evil echoing what we have heard from a number of other u. K. Officials. An unspeakable act of evil according to u. K. s michael gove. We want to get the bloombergs business flash from Juliette Saly. Chinas high prices increase in fewer cities last month in the wake of calling measures in local authorities. New home prices gained from the previous month in 56 of 70 cities trashed by the government compared by 58 in april. Prices felt fell in nine cities. That often prices for the second time in three months. The slowdown may continue, thats according to randall, which said prices dropped since june, the biggest since 2010. Prices went to 4. 1 . Boeing has signaled its intent to offer a jet in almost four years. Get thehorse is set to goahead at the air show today. Its confident the plane can compete with rival airbusbigger model. That is your Bloomberg Business flash. Sincealmost a year britain voted to leave the European Union. There is confusion about what the u. K. Government wants from the divorce. The most obligated negotiation of all time starts at 10 00 a. M. U. K. Time, 11 00 on the clock net with theresa may on the back foot. The talks are being held in brussels, thats where bloomberg joins us. What issues are on top of the agenda this morning . Guest the eu wants to focus on the separation issues, thats the main thing for them. The u. K. Em for them is position is still in flux. After theresa mays election difficulty, the tories are still try to figure out what they will be doing. They go into these negotiations not knowing where the u. K. Is positioning itself. Theresa mays initial hard brexit position is going to soften, but how much . Is the u. K. Going to be bringing anything to the table here . Matt how will these talks be structured . Is the discussion of that going to be talked about . Guest it will be part of todays agenda for sure. They had a pulmonary idea that michelle bonnier and the maintenance of share is on each side will meet every four weeks is to face. Todays meeting in brussels is the first of that. Between those sessions every four weeks, their teams will be getting together and hashing out all of the details. This morning we have born gay thedavis and then we have first Group Meetings of their teams to get started with these things and then a press conference by them about 6 00 our time. Matt in addition to the election disaster that we had with theresa may a couple weeks ago, he faces other domestic problems in the u. K. What does it mean for how the brexit talks get along . Guest they are trying in brussels to say, this is the most important thing, we have to push forward on this. The matter isf things are still being worked out in london. They will try to focus on the initial things and then what the eu is calling the separation issues. That is the brexit bill and citizens of rights. They will probably be able to do citizens of rights fairly quickly. Expecto early to anything today, but early in negotiations, they will focus on Citizens Rights and brexit bills. At this point, they are still far apart in terms of initial positions, but that will be one of the main things early on as we go forward. Joes hated in brussels, im sure a very busy day for you. I appreciate your time. Show, guyis air johnson is there with the president and ceo of blowing thats coming up. Dont want to miss it. This is bloomberg. Matt we are showing you live pictures of north london where hours ago, a van hit muslims leaving a mosque, killing at least one person. Theresa may said the police will treat this as a terrorist attack and the mayor of london has said it is a horrible terrorist attack. We will keep you updated with any new details that come across this horrible tragedy. And one of now many that have unfolded in london and the u. K. In the last couple months. Lets go to the Paris Air Show right now. Johnson is standing by with a guest. Guy, taken away. Are joined by the ceo of boeing. Good morning. Guest good morning. Guy everything i read that we will not see much coming through. You said we will see a few surprises. The Financial Community is underestimating what we will see and what we can deliver . Guest there is upside this week. Trillion market over the next few years. We are expecting a book to build up about one and we have 57 commercial airplanes in backlog. That longterm backlog really gives strength to the marketplace, strength to our operations. Guy and this will deliver more as well . We will be week highlighting the macs family, we have the next nine flying but we expect to have some mac 10 as well. We are also seeing incremental wifi opportunities of it guy lets talk about it for a moment. We are waiting for the bell to be run on the arrival of the 10, which is the news you will deliver for us later on. Is,questions surrounding it they wanted the 10 for a wild. Why is it taking you so long to respond to a neothat has been flying out of the door . Guest if you look at the heart of the market, it continues to be there. In act lock 747s and because of that, we are ramping up a production rate 57 a month in 2019. The mac 10 will add to that. Even against this current rent up, we are oversold. The timing of the marketplace is good. Available inthe 10 2020 and that will at longterm values for our customers. I imagine the engineering challenge is not difficult. Do you think it may end up cannibalizing some of the nine . We will have some conversions, which is normal. But the key is, we have a family approach snap. Our customers can operate across the mac 7, 8. Nine, and 10. That maximizes your operations. Someone called it the 797. I heard seven and seven. I have heard mom. Sort of the replacement aircraft. A lot of people are talking about it. When dealing think you will have forward sign off on that . Guest right now we are in the phase of evaluating the market, talking to customers to gauge their interest in this middle of the market space. We see a need for an airplane that is larger than the 757 and longer range. Seats, rough order of magnitude. Potentially to end child solution. We are looking at different options satisfy it. Ourre focused on what customers are looking for, evaluating the market, making the Business Case work, but we see a potential market for 4000 aircraft. We will do our due diligence. Be 2024,this, it will 2025 entry into service, so we have time to do it right. If we do this development program, it will be on the backside of triple seven next. Guy lets talk politics. Qatar first of all. On defense. T cited do you think there is the potential for cancellations, deferrals . How closely are you monitoring that . Guest we are keeping a close eye on the situation. The United States and qatar relationship is important to us. Our customers in Qatar Airways are important to us. We have a backlog there. We are seeing stability there in the long run, that relationship will be worked out. Good sign post last month with the u. S. Signing the deal with f15s in qatar. The relationship is strong, there are issues to work through, but we are hoping the relationship will remain solid and we know we have an Important Role to play in that. We will continue to serve our customers. , you haveresident been quite close with the president so i him curious to get your take on it. Are we going to get deregulation . Reform,oing to get tax all the things that we are clamoring for . We havent seen much of it. What feedback are you getting . Guest we are seeing progress. Reale already seeing tangible progress. The great thing is that President Trump and the administration has a seat at the table. We have an open dialogue we are engaged. Tax reform, regulatory reform, still a lot of work to go, we are hopeful that tax reform will happen, but i am seeing progress. On the regulatory front, we are seeing tangible progress to make our business more efficient. Guy thank you for stopping by to see us. That was the ceo of boeing. We are going to speak to the vicechairman of the ge next. We will be speaking to qatar later. From airbus, back to you. Matt thats very much. Guy johnson at the Paris Air Show that is absolutely fascinating and also set to become a little bit more political than it typically is. We have just about 15 seconds until the cash trade in european stock market opens up. The futures are up across the board after a strong friday. Indicating we could get a positive open on this monday as well. Stocks are now kicking off. At guys chart. Ok the interesting thing is, you have thursday and fridays trade already there. You can see the jump up from thursday to friday and as we see when we open up on monday, the chart clients higher and higher were all the indexes that we have here. In white, the ftse 100, in blue the cac 40, in yellow the dax, and the yellow is the italian index, all of them climbing right now from the close on friday which client on that date from the close on thursday. Big, butins, well not real gains across the board. 5 is what we are seeing there. Lets go right now to anna for the open. What have you got here . Anna we have put some of the equity trade in context. I am struck by the divergent views we have heard in the first half of programming. Spoke to a couple guests and got really different perspectives on u. K. Assets where people think it will be a softer or harder or pragmatic or fake brexit. Very different views in the market about where that brexit conversation goes. Different views on the u. K. Economy, as well. There is a stagflation in the u. K. And a chart we showed was screaming stagflation. We have heard varying views. Addressto Mansion House and it will take place tomorrow. A few clues on the fiscal spending side. For the moment, here is the open on the gilt market. Yield sinking just a little bit higher on the u. K. 10year. Lets move on to the u. K. Equity pitcher. The markets are moving higher. Asian equities were strong in todays session. We are up by 6 10 of a percent. Some of the material stocks are doing well in the early minutes. Some of the material stocks are doing well in the early minutes. Before the european stocks have a strong day, once again we had a strong session coming through it europe. We saw a car stocks doing good. All of that was despite the fact we saw weakness in the u. S. Section, at least flat to negative in the u. S. Section. Its the transatlantic divide. Lets look at the shanghai market. This is the close. We are closing out in china. Interesting week for the chinese. Msci debating on whether to put asia in the global indices. The speculation we are hearing being talked about in shanghai. It seems to be one of the reasons we saw shanghai stocks pushing higher today. And its placees in the Global Trading basket, we will return to that seen later in the market. Matt and that is there with the markets look. I want to date deeper into the stoxx 600 with the mov function which breaks down the winners and the losers and shows you how they are moving or how much weight they have in moving the index, i should say. Here, ihe dropdown box am pulling up the index point. The big gainers, the reasons we are rising as far as the broader european stocks index is that we are seeing gains at novartis, philips, not to be confused with rcda. The banks are getting here to some percent. Siemens is gaining as well. Oche. Y a broad r a broad group of gainers this morning. As far as losers, there arent many. Those that are weighing down on the index points are names that you dont typically see moving in any one direction or the other. Not really heavily weighted names. Italiane. Not really names that move the index much, which is a sign that most of the stoxx 600 are winners. You can see it broken down here. For 98 gainers, only 50 losers on the stoxx 600. Lets head back to the Paris Air Show where guy johnson is joined by an important guest. Guy . Guy im not sure how you got to burn the other day, but if you are implying swiss, frank chroma, the president of commercial aircraft joins us now here in paris. Good morning. Guest good morning, how are you . Guy im good. It seems to be coming from the customer base, which is important. Is that going to have an impact on the ability to sell the plane . People are listening to that. Absolutely, and that is the position we wanted to be in. To get the hands into our customers and the offers are going exceptionally well. Talk aboutarting to the inservice experience, not just from a customer standpoint but because the features are incredible, but the operational reliabilities is the best we had ever seen for a new program and the reputation of the airplane is starting to build itself among our industry. Thats where we wanted to be. There is a buzz around the aircraft because of that and its positive. Guy when are we going to see the big order for it . We havent seen one in 15 months. When do we start to see that positive feedback we are talking about . Internally we see it because the conversations we are having our accelerating and in all regions around the world. That part of it is fantastic. Guy so soon . Guest soon. The milestone we are looking for is korean airlines, which will thishich will expose airline to in other region. We are going to see that c s 100 and a very challenging airport that can carry more passengers further than any other airplane. Here we are in paris, we can feel it. We are going to see that c s 100 and a very challengingpeople ars program. Down is itl 2017, 2018 . Guest we will see more activity by the end of this year. Guy you are also ramping up production. Thats a tricky thing to do. Getting it in. Thats where you make your money. How is that process going . Guest youre right. Its a supply chain. We are in the early stages of production. We have 14 planes that are delivered. Our production plant is to wrap up in the back half of the year and we see nothing that will stop us from continuing to get the airplanes in the hands of our customers. Its challenging in its early days. We are focused on 2020, when we get to full production 120 aircraft per year. Guy one flight in the ointment is that boeing has launched a trade spat with you. And i am curious to know what this is anding on whether that is causing customers to hold off a little bit. Its actually the opposite. The attention this aircraft is getting is quite positive and a competitive response, we view it as trying to slow down the innovation that this airplane brings in our market, which is 250 seats, a market that boeing does not compete in. We think this airplane appeals to customers around the world. Its not just built for the u. S. Guy white you think they get it . Guest its a fantastic airplane. 20 lower fuel burned. Its a fantastic aircraft and the customer features are outstanding. The competitive response is because be challenging this airplane and this program is something to take note of. Guy what is happening with the jet market . Tebow charts are fantastic. Do people want turbo props when the prices are newer to 45 . Guest they are for specific niche applications. This plan provides performance capability that is not available in any other turbo prop. There is discussion of the next one, is there room for a 90 feet turboprop . Get there. Ady we have seen lots of interest and we announced in order for additional aircraft and we will talk about that during the show. We are very happy about where we are with the q4 hundred. On the regional side, so much focus on america because thats where the regional started. Its a challenge with the scope clause. A challenge for additional opportunities in north america specifically, but we feel very good about where we are with the program because it meets all of the scope caused requirements today. Thats not the case with the emaar j. Those Aircraft Programs need the scope clause to operate in the u. S. Market with those customers. The see rj program is fantastic, so we updating the cabin have larger overhead bins so passengers can carry their overhead on board. Everybody will appreciate that. And modern feel of the aircraft. There is a lot of good things to come on the program. Guy thank you for stopping by. Joining us from lombardi eight. Matt miller, back to you. Matt a lot going on there. Geithner will continue to cover it for us throughout the day. I want to bring you some headlines out of france. A team of analysts have put out danone is a likely m a target and the probability of a deal is about 20 right now. They list a few suitors that could possibly go after danone. Pepsico, cocacola, names you may have guessed. But its interesting and you see danone shares up. The cap is up along with the european index. I will leave you with life pictures of north london where, in the early hours of the morning, a van hit a group of people leaving a mosque, killing at least one person. This is a continuing story that develops throughout the day. Theresa may called a meeting for the security council. We will keep you updated. This is bloomberg. Matt welcome back to Bloomberg Markets the european open. I am matt miller. Guy johnson reports on the Paris Air Show. Lets check in on the markets. We have gains across the board in the major equity indexes. The stoxx 600 is up eight tenths of a percent as is the ftse and the dax. , that actually opened with lower gates, is now the strongest, a gain of more than 1 . Britain year after voted to leave the European Union come up talks will finally begin in brussels today at 10 00 a. M. U. K. Time. Davis described it as the most complicated of alltime. Following theresa mays election disaster, it fueled doubt within her conservative party about the kind of brexit it should seek. We are joined now. We had a lot of debate with what kind of brexit we will see. What the u. K. Boat meant. With theter brexit now weekend u. K. Negotiating position . Guest i do think there is a weakened negotiating position. We could get a softer brexit. But we dont have much time left for negotiations. Anye dont have negotiations, it will be a hard brexit. Having a hard brexit is probably harder than it was before because you could fall into a hard brexit. Are there brexit. 2 which theresa may have to stick . She wasing the drumming getting in the last election, it looks like a lot of people who would have voted to stay, did not bother to vote in the referendum and are now kind of showing that change of heart with their votes not for the conservative party. Guest i think immigration is going to be a big one. She will have a hard time pulling back from that. The other thing is this divorce payment. The eu is saying you have to write a check for that amount. It will be difficult in the 60 billion range. Either of those will be difficult for her to change very much. In other areas, i think she has worked freedom to make adjustments. Matt what does the difficulty main in increased uncertainty . Although there was already a lot of uncertainty around brexit meeting for the pound . The pound gold see down another 1015 . People are waiting to see what happens, that the pound is probably undervalued and you will probably want to buy it. But it seems so politically driven at the moment. The other asset class benefiting from this is u. K. Guilt. U. K. Guilt are much lower given where inflation is and thats people looking for an asset in case of a hard brexit or what will happen with the negotiation. 179, pound trading is penetrating at one. 04. Where does the gilt yields go . It will stay where we are. We will be around 1 until we have more clarity on what the brexit negotiation will give us. If its a soft brexit and its quite clear that its done properly, we could see yields right. Yields rise. But if its a hard brexit, it will get lower. But we need a definitive outcome. Head of european fixed income is going to stick with us. Up next, guy johnson is joined exclusively by ges david joyce at the Paris Air Show. And interview you do not want to miss. He has a slew of interviews you do not want to miss. You can follow us at bloomberg. Com. Now, we are showing you hear life pictures of north london where hours ago, a van hit a group of people leaving a mask mosque, killing at least one person, although the situation is developing. Theresa may, who said police are investigating this as an act of terrorism is now calling a meeting of her security council, the cobra security council. We will keep you updated as the story develops. Matt welcome back to the johnson is in guy paris interviewing some important guests throughout the day that you do not want to miss. The Bloomberg Business flash with Juliette Saly in hong kong. Juliette u. K. Prime minister theresa may is declaring an emergency meeting of the Security Response team this morning. Police are investigating a terror attack after a band plowed into pedestrians outside eight north London Mosque at least one person died and eight were injured after a vehicle drove into a crowd in pittsburgh park. Innas high prices increase the wake of measures of local authorities. They gained from the previous month and 56 of 73. This compared with 58 in april. Classes fell. Cut asking prices for the second time in three months and they buy interests and the slowdown may continue. Dropped 2. 4 in june the biggest since 2014. Nationally, asking prices went 4. 1 , the weakest since 2014. That is your Bloomberg Business flash. Matt lets get back to guy johnson at the Paris Air Show. He is with another highprofile test. We have come over to cge this morning. I am joined by david joyce. Hes the vice chair at the ge. Congratulations on the new gate. New gig. Is that going to make a difference with your business . John, he is not a rookie at ge. I have known him for 20 years. Supportern incredible of the aviation business. He invested in us and understood the proposition of a dying for aviation as part of the portfolio. We could not have been happier to have him in the role. John will be just the same. We are thrilled john got the job. These transitions occur, now is a good time and we are excited. We look forward to having john come in and help us with all the execution. Guy you have a lot going on right now. You have released engines coming through . It quite quiet. Is the next generation we are talking about having is close to 500 this year . Are you comfortable with that number still . Guest let me give you perspective. We produce more this quarter than all of last year. We are 500 around this year, we have 1200 around 2018. We are comfortable with the 500 number this year but we are looking beyond that. We have to get ready for 1200 in 2018. Our monthly rate has to be proven that we can run that fast for december. So for the next two years, just getting our subs up to the rate of summer between 19 and 2100 a year, is really do challenge. Is how fast the change occurs. Guy the rate of change. Guest as few and i were talking about earlier, if you look at all the commercial agents that have been built, we represent 60 . We are comfortable with these rates. Getting everybody in that delta to do the transition is what we are focusing on the next few years. Imo am happy with our supply chain. We have done a lot of redundancy managements. In the event that something happens with one cannot we can assure ourselves that one can supply. Each one has been challenged to run at twice the rate. We do that on a regular basis. Every time we cut in a rate of change, six must later, we can run there. We know where the weak links are, we can fix them. Guy i asked because the Financial Markets are rating Engine Companies pretty highly at the moment. Guest and we like that. Guy but it raises a challenge. You have to deliver. Guest if i could tell you, there have been times in this industry where the challenge is finding the next great product on a big scale. There are times where the challenge is execution. If you take a look at the commercial portfolio, we are in a big execution phase, whether it be league grant, nymex, which course wetest, and of are doing a lot of work on the middle of the market. Guy thank you very much. We are talking about that at bloomberg. People are calling it a name. 797. The monk aircraft. Thats what were calling it. We will see what we end up calling it. Other manufacturers are talking. Are you . Guest any time we start looking at a new engine, its exciting. Thats what this industry is built on. New airplane, new engine. I feel good about where we are positioned with the technology because of the portfolio we have been on for the next 10 years. Including the nymex. We are excited about it. We have been working with boeing to determine a rating what our offer would be. The big thing is that we like the Business Case. Markets are looking at us, they have expectations on our performance, so the evaluation will be technically, come up with the right engine, and violate the Business Case and make short we like it before we commit. We spent a lot of time talking about commercial. Lets talk about defense. Being see opportunity now significant lead different two or three years ago . Has trump made a difference . You have moved into the fed to capture that. Fort we are under contract 1 billion a month which is a third string or new technology we are working on for agent six combat engine. Between that and the next additionn engine, in to the work we are finishing up, we have a lot of opportunity in military. Its always been a Growth Business for us. Its growing every year. There is an Inflection Point coming when these programs go into production. Ourove 760 engineers from commercial portfolio into our military portfolio. Not only are we ready on technology, we have great technologists to go ahead and execute effectively and productively. Guy thank you for inviting us. Thank you very much indeed. David joyce, the ceo of ge innovations. Matt, we have a bunch of guests still to talk about. We will be talking to mr. Akbar a little later. We will also be talking to tom mendez. Back to you. Guy johnson their life in his element, standing in front of a jet engine at the Paris Air Show. To quickly recap some headlines from the horrifying attack overnight, once again and attack in london. Commissioner has just spoken about the incident where a van has run into a group of people believed to be leaving a mosque, saying at least two of those people are very seriously injured and it was a lone attacker at this time. This investigation is obviously ongoing, but they have arrested the man, i am assuming its the driver, on suspicion of attempted murder. They have the suspect in custody but its too early to say if the death was the result of the attack. The commissioner is saying there ongoing,he attack was there was a man being treated on the ground. Its too early to say if its breaking, but this is news developing story that will continue to follow for you. Onfrance, macrons republic the move and its allies have one 350 seat in the national assembly, the biggest majority in 15 years. But sundays turnout of voters was less than 43 , the lowest ever for the french legislative elections. Majority . Strong is that what we were looking for . Is that what we were looking for . How does that relate to the historically low level of participation . Clearly out of 577, he will be able to pass reforms in the parliament. However, its not as big as we expected. Just a week ago we were talking about more than 400, 450 seats. Races ine very tight some of the constituencies, especially against republicans who are not over yet. They have 137 seats in parliament so they will be able to make their voices heard in parliament. You also have the leader of the National Parks marine le pen, elected for the third time. She managed to get one last night. They also elected for the First Time Ever in masse. 57 , the highest ever, not a good news for the democracy or debate in parliament. It also parts additional pressure on the majority of Emmanuel Macron to deliver. Was good newsn for the extremes that it meant a general strike of the french people. What does this result mean for macron and his ability to get through reform policies that that is proeuropean seemed so excited about . I think the Prime Minister something up last night. He said the governor and the majority has an obligation to deliver. Up thiss tension come majority that is relative, he has an obligation to deliver now. The first test will be labor reform. We are expecting details from the government on the 28th of june, so very soon. We will have to see how much demonstration we are seeing in the streets. Today, some unions have called to protest in the streets in different cities across france. Impact onhave an Emmanuel Macron. He is planning to use some executive decrees in order to invoke some debate in parliament. He will need the support of his majority in order to use these decrees and he will need the majority to ratify the reform. Its not going to be an easy task for Emmanuel Macron. With this majority in the shortterm, at least he can say he has managed to win what nobody thought would be possible just a month ago. Matt based very much. Covering the Election Results from paris. The head of european fixed income is with us in the studio in london. You dont think the majority that macron one was such a strong mandate for his policies . Guest there are two things. One is that his party is basically made up from people from the center. When you get some of the reforms, it may be quite contentious. Some major away. Its not a huge majority. Second, the low turnout from voters. It doesnt show that a lot of people voted for him this round in parliament, but many who didnt come to the polls are fatigue or the didnt like the people in the polls. One thing turned line is that people from other parties didnt feel they had a reason to show up because their parties were not motivating them. Guest that could be part of the case but the major issue i see is that macron has to deliver reform that. More partiesre are waiting in the wings for the next election and the population is not feeling supported by the government and they will look for the other more populous artist. Pull up the oag gloom spread. Recoverysee a real here, not back to the lows from 2016, but the market just no longer worried about political tail risk in france. I agree with that. It shows us macron will execute flawlessly and there will not be hiccups along the road. I think thats probably wrong. There will be continued hiccups. We do not actually own french government bonds in every european gas because we do not feel they offer any value. They should be trading with spain as opposed to germany. Matt that sounds like an Investment Opportunity here. Guest absolutely. We have been using our french government bonds to by other governments in europe because we do not feel risk return is attractive. Matt the strength of the eu, the trend recently has been for investors to appreciate the strength of europe and discount what they previously thought would be strength coming out of the u. S. How do you feel about that sort of flipflop we have seen in terms of the market darlings . Guest European Growth is doing fantastic, growing as fast as it possibly can. Its stupendous for europe. But inflation continues to undershooting and ecb has come out and said their inflation cuts are being brought down not up, which means they have to accommodate. While they see growth as good, they have to see inflation come up. We will have no rate hikes for a long time as well as to be continuing to go forward. Matt i was in estonia and draghi was saying its running better than our previous forecast, so we will raise those, but inflation is not even close to our targets. We will lower our inflation target. Talking about policy normalization, but it does not seem possible if you continue with your stimulus in 2018 how hard you think that will go . Guest i think it will go even through 2018 at a lower level. I would not expect them to do anything with hiking in interest rates. Suddenly draghi will be hiking rates. From that backdrop, its really quite supportive trump bond markets in europe that we could say down with these low yield levels and trading and different government markets to add value for our clients. Matt we have had a couple guest saying we see eurodollar at 1. 20. By year end. Do you think thats a possibility given your outlook for the ecb . Guest is a possibility because growth is doing well and you could see the euro appreciate, but the paradox is, the more you see the euro go up, the more accommodating the ecb has to be to get inflation to go up. A stronger euro will reduce your inflation forecast going forward. Matt thank you for joining us, davids on, head of european fixed income. If you are a bloomberg customer, you can watch using tv. Stream the video obviously on tv , you also get on the righthand column, a number of things, including the charts we show, functions we use, bios of the guests, and from the base page of tv , you can click in to radio and get bloomberg radio. Often better insight we offer on television. And if that coverage as well. That will give you anything by the coming up. For example, wilbur ross we will be speaking to. You can see that online or tv at 1 30 p. M. U. K. Time. Price pressures, inflation minister says inflation is his number one challenge. That exquisite interview next. This is bloomberg. Matt welcome back to Bloomberg Markets the european open, im in that miller in london while guy johnson is covering the Paris Air Show on the ground. But go to hong kong for first word news with Juliette Saly. Juliette u. K. Prime minister theresa may is acquiring an emergency meeting of the countries Emergency Response team. Police are investigating a terrorist attack after a band plowed into pedestrians outside eight north London Mosque. At least one person died and eight were injured after a vehicle was driven into very park. Declared three days of National Mourning after a forest fire triggered by storms in the north of the country killed more than 60 people at least 30 people died in their vehicles with more bodies found on the side of the road. Than 800 firefighters were still working yesterday to contain the place which erupted saturday and spread 40 degrees celsius temperatures. Burton is to observe a minutes silence as the market respect for all those affected by the tower disaster. Theresa may has conceded that the response of the victims was not good enough. That comes as public criticism of her has mounted and police raise the death toll to 58. The u. K. Government has announced that it has canceled 2018 to give lawmakers more time to deal with brexit legislation. Leader of the comments said the next parliamentary session was on wednesday and being doubled to two years. The announcement comes as talks between britain and the European Union over the divorce get underway today. In france, there was no public celebration from Emmanuel Macrons government last night as his party claims and historic geordie in legislature. Macrons party on the move and theallies one 350 out of 577. That gives them the biggest majority in 15 years that turnout of less than 43 was the lowest ever. For a french legislative election. The u. S. Navy has identified the seven sailors who died when their destroyer collided with a container ship off the coast of japan. The crewmembers had been unaccounted for. Divers recovered the bodies after this really damaged uss fitzgerald returned to the navy base in japan aided by tugboat. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much. Lets get back to guide right now, out at the Paris Air Show joined by the ceo. Guy john heresy joins us now. This is one of the companies that has positioned itself globally. Significantt portion of its sales internationally. Others are more domestically focused. Lets talk about what is going on. Good morning. Politics clearly is an important part of where you are going right now. Its clear for all to see. Lets deal with what is happening in europe. Guy there is a clear pressure to spend more on defense. Is that starting to have an effect that europe needs to spend more . Guest one of the things i will tell you is that we have seen an uptick in our interest capabilities. We are a world leader in defense and the type of Security Training and infrastructure production, security, precision guided ammunition. We are seeing demand for that in new york. Most notably a demand for capabilities that we have been providing for many years. Ofhave announced an award 600 million. Its a shipbased Missile Defense air breathing system. Capability to the netherlands in europe. As well as to japan, korea, and australia. We see an uptick in that demand. Tosee interest in continuing upgrade to systems that they have, most notably here in germany. Where the germans are asking to upgrade patriot. In addition to that, we are seeing countries have renewed interest in eric and abilities in Missile Defense. Sweden and romania are asking for information about african ability. Guy part of that is pressure from washington and part of that is from moscow and all these factors coming together. Guest our job is making sure we provide meaningful Cost Effective situations that meet their needs. The understanding from our customers, its about demand. Its about threats. They need the ability to did defend their sovereign ability. Its fastening to watch them rerate the defense sector. There is an exultation that defense will be a more interesting is to put your money to work. Part of that comes about from the pressure we have seen and part of that has come across them the numbers you have seen. There is also the story in the United States. The president made it clear that he is focused on spending money in the defense give me a sense of what that means on the ground in terms of what you are actually doing, where are you are seeing an effect of that. Is the president going to deliver on that . Guest is clear from the president priorities that they need capabilities with respect to protecting the homeland, defeating isis, improving the infrastructure and protection from cyberattacks. Those demands align completely with our core capabilities as a company. We see significant upside potential for us, not only domestically, but internationally. As you remarked, we see the same kinds of demands in the global marketplace. Alone,lk about cyber many people know the fact that we are a world leader in Missile Defense. We are also a leader in sever defense. We are the largest sever solutions provider. One of the points of that domestically, with a respect to demand, is an award we got on domino, which is a separate considered contract to protect. Gov, support 100 agencies and governments. Its worth 1 billion. We see similar demands in europe. Opportunityre is an to not only grow in the defense sector, it also in the commercial market. Guy how big could that market become . In the u. K. We just experienced outages guest . Guest the more we are connected come the more we are born of. The fact is, everything is at risk and we are taking the time to provide solutions that not only protect and defend networks, but also protect and defend products. We look at things that are already currently deployed, do assessments around vulnerability, and put in Place Solutions and the common nations of products and capabilities to protect them and make this systems and networks resilient. Guy how the Financial Markets will rate you, they have a high rating on you and your competitors. You think they are underestimating the part of the business that cyber can deliver . Andcan only look around appreciate the connectivity that exists and you have had a series of shocks. There are plenty of that. Again come up, you think we are underestimating the potential the business can deliver on . Positive withvery respect to outlook and growth. We are focused on growth and we have been doing the hard work internationally and domestically we see opportunities for growth in evercore partners, Missile Defense, cybersecurity, precision guided ammunitions. All those keep abilities our customers are looking for. Guy im wondering where does it end. Where is the biggest portion coming from . Strategically at your business, we have to be , thats something we can understand. But have you got your minds around how big the separate site of things is going to be . That seems to be the capability of massiveness. Guest our sever business is probably the Fastest Growing part of our portfolio, doubledigit growth. We see the potential for even faster growth and the more people become aware of the vulnerabilities of the network and the products they have, the more they see our advice and counsel. Our job is fundamentally to get together the capabilities we have along with the demands our customers have. We are optimistic about the potential for continued growth, not only in our defense markets, but sever space. Commercial sector and defense. Guy thank you for stopping by to see us. Harris, ceo of raytheon international. From the johnson life Paris Air Show. Bring you anto extensive interview with facebook coo, Sheryl Sandberg at 10 00 p. M. U. K. Time. Thats the night. This is bloomberg. Matt welcome back to Bloomberg Markets the european open, im matt miller in london. Guy johnson covers the european airshow on the ground. We are almost an hour into the trading day. Lets see how things are shaping up right now. We have gains across the board with the broader stocks europe 600 up 7 10 of 1 . Threeo have the ftse up quarters of 1 and we have the dax gaining and the cac 40 gaining about 1 each right now. We are seeing also some news on moodys,n ranks out of cutting its ratings on for big australian ranks. From aacutting ratings three to aa to at four big to australian banks. You will want to watch that trade. But it has nothing to do with whats going on in europe. I have an imap here showing the breakdown of the stoxx 600 and what you can see by this. Everything is up right now. Its one of those days where you have materials and industrials leading, telecoms and real estate are gaining as well. If you look at the move screen, we have five o seven gainers and only 84 hour down. We continue to follow the breaking story in london right now, developing story. A van hit a group of people thought to be leading a mosque. One person died, its unclear why that person died after the van struck or before he was apparently being given first eight as the van ran into others, injury to seriously. We will keep you updated as the story develops. This is bloomberg. Francine brexit talks begin in brussels. What kind of brexit does britain want . Macrons majority. The french president s party sweeps the elections. What will he do with his check . A van hits a group of muslim a mosquers leaving in the north of the city of london, killing one person. Prime minister may holds an Emergency Security meeting this morning. Good morning. This is bloomberg surveillance