No trading in the u. S. Because of the Martin Luther king holiday. Global stocks, another record today, up by 24 . Multiyearcy market, highs for the euro, the pound, highest level since june 23, 2016. It has risen for four straight weeks. Cpi data, big brexit events. The eu withdrawal bill returns for debate in the Lower Chamber of the house of commons tuesday, wednesday, the europound, little changed. It has been stuck in a range of 87 to 90 since september. Check out the bond market. Yields tipping for the u. K. 10year, down by a couple basis points. A two month high on friday. 40 basis points since falling to an eightmonth low since june, 2017. Yields in germany rising up 59 basis points. From 29 basis points in the last month, Economic Data to watch out for this week, cgi data. On wednesday, expected to confirm inflation is remaining below the ecbs goal. Lets get to oil, remaining at the highest level in three years. Iraq echoing the call by the uae and other producers or opec, letting cuts continue despite recent gains. Crude, below 70 a barrel. Lets check on first world news. The feud between persian gulf monarchies has escalated. Jetsae says qatar fighter intercepted commercial flights. The uae is part of a saudiled and qatar denies allegations that it supports terrorism. Reporterstrump told he is the least racist person. This after vulgar comments about a. D. And african countries. He denies those remarks. 40 were injured on a casino shuttle boat that caught fire. It forced passengers and crew to jump into cold waters. Investigators are trying to figure out the cause. One of the biggest diamonds in history has been discovered in southern africa. It is 910 carats. It was found in a diamond mine. And 800 and 13 caret diamond found in 2015 sold for a record amount of money. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im emma chandra, this is bloomberg. Mark the once mighty u. K. Construction giant carillion has collapsed. It had government contracts from hospitals to highspeed rail, failing to get a government bailout. Carillion has 2 billion of debt. The share price has collapsed in the last year. It is so nice to play the blame game but lets play it. Who is to blame . The blame game is happening. Both sides deserving the blame. The government for presiding fragmented contracting market where price, the bottom line is everything. Not enough attention is paid to this supply chain. The other side will be carillion itself, to aggressively bidding for contracts with the incentives for the board, all about excessive growth. Mark should the government have awarded further contracts in the wake of the year where we saw three profit warnings and the share price plunged. What message does that send . It is a concerning one, it suggests maybe they do not know the full picture of the health of carillion or did know and are just hoping to put in the right contingency plan to avoid getting any embarrassing situations. If the government doesnt know the full health of one of the biggest contracts. Approach,nding the the only approach was to carry on. Lionel politics. If you show weakness, maybe your opponents will seize on it and dangerous is a financial problem at the heart of u. K. Industry and the government is trying to cover it up. Mark should the government have failed it out or not . It is tricky. I think the problem here is how private is this company . It is not purely private sector, it is doing government work. It probably shouldnt have been bailed out but it is still embarrassing for the government and still needs urgent addressing of the reform of the market. Mark how do you fix it . The procurement industry . Lionel the Companies Involved have to be bigger and stronger and more profitable. Maybe more m a, more consolidation. The government has to look at the market. Does it know what it is doing when it is pulling out tenders and deciding who to pick . Price or the best offer and chance of delivery for the taxpayer . Mark the chance of delivery is everything. Will this be orderly . Who is to say it will or wont be . Lionel we are starting to see financial hits. Some of the other contractors are agreeing to stump up the money to deliver the contracts. The whole supply chain will be affected. We will see rivals trying to pick up business and profit from the collapse. It should be straightforward Mark Jeremy Corbyn questioning this policy. Does he have a point . Lionel i dont know. I think this is about running things well. I dont think it is about saying there is problem with private enterprise and it should all be done inhouse. You can have a privatepublic model where you make sure everything goes well and the sensors are in line to get it delivered as opposed to trying to award the contract to the lowest. Mark was carillion a oneoff . Are there other companies that, as you say, the prices low, longterm it is not viable. Who else is playing this risky game . Lionel the market as a whole has relatively weak margins next to other markets. There are too many players. Even with awards to carillion, joint ventures, other companies, reliance on foreigns Companies Foreign companies. The whole market needs to be looked at. Services Business Association warned only one of the five largest Public Service providers made a commercial return in five years. That says it all . Price, leading to longterm costs. Wasel the report, which called paperclips, hinting, you cannot price every market. Mark my hand is getting in the way. Im spoiling the vibe. Im sorry, lionel. Find out more from lionel. Wonderful these today. Qatar taking a tumble after the uae accuses the country of intercepting passenger planes. Here are the big movers in the stoxx 600. Is 21 minutes away from. This is bloomberg. Mark breaking news, the ecb could and qe after september. Adjusting policy guidance before the summer, so says the councilmembers. The ecb shouldnt have any problems ending. Due to go on are at least until the end of september after they were cut to 30 billion euros per month. He judged the ecb current stance is roughly appropriate. He was speaking in an interview with a german newspaper. He said there was a need for action in communication. There is the german tenyear yield, up 59 basis points. The euro at highest against the dollar since the end of 2014. It has been an interesting couple of weeks. It is the hawks within the ecb who seem to be the most vocal. The German Central Bank governor. Comments come after the account of governing, show policymakers, tweaking guidance to align with spurringgth economy, the rise in the euro at the end of last week. Betting the bond buying will end in september, this certainly adds to that discussion. A new chapter in the ongoing feud between qatar and its neighbors. Jetsae says qatar fighter intercepted commercial planes that were headed to bahrain. Qatar denies but qatari stocks fell. Joining us now is the managing editor for africa and the middle east. The fact that qatar is disputing what the uae is saying, what do we know is the truth or the halftruth here . Great question. Who knows . Itsou say, qatar is denying fighter jets intercepted the planes. The uae is standing by its assertion. We had a selloff in stocks today. The biggest since this kicked off last summer when saudi arabia, egypt and uae severed ties with qatar. Im not sure it matters, whether it is true or not. Hadhe sense that, we have relative calm in this conflict and suddenly it is kicking off in pretty bizarre ways. When the rhetoric heats up, the possibility for something going wrong, gets that much higher. That is why we saw such an abrupt selloff. The capital between of bahrain and the capital of qatar is 80 miles. Less than the length of long island to put it in perspective. When you have commercial airliners and jets and threats thing thrown around, it certainly gives the region and investors something to worry about and that is what we saw today. Mark is military confrontation in the region, entirely inconceivable . No. Isive here in dubaim which quite calm. Wars rage all over the place. Syria, yemen. It is certainly not inconceivable. You asked me whether the gcc could go there. It would seem unlikely. The u. S. Has bases here and both sides will be extremely careful about doing something that would tip the region. I dont think it is what either side wants. There are no formal talks taking place to end the crisis. No informal talks that we are hearing of. Heard of some recently. This is a sign in the wrong direction. When tensions rise, mistakes can happen. We will have to look and see in the coming days if moves are made to deescalate this. Tok the same could apply what is happening in turkey and syria. The turkish president accusing washington of establishing an army of terror along the turkish border. Are we looking at another faceoff between the president of turkey and the u. S. Exacerbating the already considerable strains that are testing that relationship . That relationship has been strained in many ways, politically, economically and now what we are seeing in syria is we are moving to a new phase in the conflict, for all intents and purposes, the Islamic State has been defeated. There are still pockets of it. There is a mad rush o now as people seek to capitalize as the war winds down. Assads troops are trying to make inroads. The kurdish rebel fighters who were among the most effective and backed by the u. S. Are doing similar. Is looking president at that. He considers them affiliates of turkish groups in turkey considered to be terrorist groups. We seen turkey go into syria before. These are not idle threats. This is a new phase. At his worderdogan there will be imminent action in syria by turkish forces. Mark andrew, thanks for joining us. News on carillion, which we have talked about today. The government spokesman, james black has been speaking to reporters. There have been questions asked about what the government knew when it awarded a various deals after warnings. The uks signed eight deals after the july warning. Carillion management shouldnt benefit from the failure, black says. Interesting developments on this carillion story. Announcing involuntary liquidation. Roughly 12omberg. Minutes until the end of the monday session. Mark live from london, im barton with the european close. Acceptance into the basket of currencies, the march of the yuan has slowed down. It is dropped to the sixth most used worldwide. Bloomberg, stephen engle, about the yuans standing. We had different balance sheets. I can only talk for our balance sheet. The middle of last year, we made the decision in the bundesbank, talk about i cannot the amount we will be investing and i cannot talk to about the technicalities, how we will be investing but we have been in touch with our colleagues from the peoples bank of china maybe half a year ago about this. The ecb goes first, the right way to do it. Other Central Banks have moved before the ecb, that is also fine. We thought that this would be also right, to be proud of the german currency reserves. Amount, but itor is something we decided on and we want to be part of so the fact that, that is included in the sdr basket, and the fact that European Central bank has factors. O, were both inclusion your probably have similar concerns the currency is not a freefloating currency. It has restrictions. There are capital controls in germany. Do you share these concerns . Yes we do. Nevertheless, we may have to say part of our money to the imf, we need accounts, we need to be able to fulfill our obligations as the fourthlargest member of the International Monetary fund. We are now, have made that decision. This is not as big news as you may think. It is a fact we have decided to go forward. Sometimes a journalist has to ask the obvious question. Why . It is nowid before, part of the sdr. We have to fulfill our quota. Because of the ecb also investing in Central Banks in the eurozone. Does it represent the growing financial clout that china has and the need for trade financing and the avenues that you want to have this currency in . As a central bank you have a currency, in your reserves, to the extent you need it. Neededot necessarily we in order to fulfill our obligations as a central bank. But also a matter of fact, we want to have the accounts in this currency, we want to understand the markets of government bonds etc. We share the concerns, the imf has. Yesses. Nswer is two you said you had these negotiations for the last six months. Is there a clear indication that china is literal is in Bloomberg Markets the european close it is their decision. It depends how quickly they want to do this. It was much more used than it was before. There are obstacles. Sometimes interventions. Predictable what regular changes you have. In order to make it more used, more needs to be done. It does not have an anchor currency status. Obstacle wouldst be these restrictions on trading and the capital controls . The International Use is increasing. The trade links with china will intensify. Foreign ownership has been liberalized in china. You can own up to 51 of a financial institution. Moref this will make a internationally used currency. Is is a plan being put forward or starting as of now . The bundesbank will start accumulating . Wont talk about time or amounts to we have made that decision and we will execute our plans in the way we think fit and closely coordinated with the peoples bank of china. Mark on the sidelines of the Asian Financial form in hong kong. The close is next. This is bloomberg. Mark that is the view from the new bloomberg headquarters in london. Queen victoria street, next to mansion house. The close is next. Im mark barton. Stocks finishing up the day in european trading. Nine seconds until the end of the session. Is closed in the u. S. Because of the Martin Luther king day holiday. The perfect opportunity, as expressed, to check out the gmm function. Global macro movers. It is a wonderful function. Split into asset classes, vertically, equities, currencies, bonds. Down for the second day in three after rising for a second week, the best run since november 3. 4 stoxx 600 is roughly below the record set in august, 2015. I will talk about the euro in a second. The third column, bonds, mixed day, down in yields. Yields up elsewhere. The focus on the ecb. Adding hawkish sentiment from the ecb this year, leading to speculation the ecb will and bond purchasing programs in september. The final column, i want to talk about the euro. Going from strength to strength, rising for the fourth day, biggest weekly jump last week since september. Week with thelast prospects of a new german government. Open to tweaking, policy guidance. The dollar and crude oil . Will it passed 70 just for us . We closed above 70 on friday. 69. 99, oil trading the highest in three years. Iraq echoing for opec cuts to continue despite recent price gains. At 70, could be fresh stimulus to shale drillers, so says the International Energy agency. 69. 99. Is at hea President Trump says doesnt believe democrats want to make a deal on the young documented immigrants facing deportation. The bill that is needed to reverse a government shutdown, and exchange the president wants money to build a wall on the mexican border. In hawaii, stated and a federal officials are investigating a false alarm. Hawaiian residents were sent into a panic when a mobile alert sent that a Ballistic Missile was inbound and people should take shelter. Pushed the wrong button. A walkway in the indonesian Stock Market Holding collapsed. This was after the afternoon trading session. China is stepping up crackdowns on cryptocurrency tradings. According to people familiar, the government is targeting Online Platforms and mobile apps that offer exchanges for services. Bitcoin and other Digital Currencies over the past few months. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Mark thank you. Over the last week there has been a shakeup in the local bond market the global bond market. It is left most investors being nonbelievers in a bear market. This will be a jacket. Period. It is not much about china selling treasuries, much more about inflation in the u. S. The risk that keeps most participants awake at night. For the treasury market, it is more important, what the actions are coming out of europe and japan. You have the fed unwinding the balance sheet, the ecb slowing purchases. The boj this week, making changes, if we extrapolate, slower purchases. Up theed to take a thumb scale and it is poised to stop manipulating the most important price in the world, the tenyear treasury. That is a meaningful change. 14 trillion worth of bonds bought by Central Banks in the past five years. That appears to be close to an end. The bond market is not dead, it is dealing in a bearish trend that a lot of people have not seen before. They have to learn how to do it. We have put in a structural yield, to say that we are in a bond bear market is premature. Mark lets bring in jim. I think it is a bear market for yields. I look back at the summer of 16. The in aggregate across bond markets was less than. 5 . Astonishing. We are 1. 2 today. We have been in an uneven escalation of yields for some time. The classic bear market is defined by returns. Despite that rise in yields, we have had positive returns in highquality bonds in 2016 and 2017. It is hard to think we are in a bear market. Mark are you disagreeing with your colleagues . No. Seeing, inat you are a low volatility world definitions are important. Which is bear market, what bill gross was referring to, tenure treasuries, 270. That is a fairly small increase. 3 , we are still 1 . Ng returns of 0 to it is quite mild. That is the key. Often the definition is getting in the way of are we in a bear market or not . Mark what do we need to really get a bear market going . None of this mild stuff. A true bear market, lets define it now, a yield rise of 100 basis points or more, what you would need is one of three things. First of all, credit creation is the missing ingredient across this whole cycle. The credit mechanism where you get lending, just not happening. There is too much debt in the world and you have seen that depressed, the credit creation element. Abo