Rate cuts to come. In london, President Trump does a three day visit to the u. K. As his trade policies feed to growth anxiety. Silicon valley is targeted over antitrust. We will bring you exclusive interviews from Influential Investment figures on the current challenges and opportunities. 10 years into an upcycle. So at some point, the music is going to stop. I dont think we will see a Major Chinese company go public in the u. S. For the foreseeable future. We are playing with a lot of little a risk which is often ethical to trade through. Juliette we sit down with the pboc governor ahead of his meeting with secretary of the treasury steven mnuchin. Yi gang our policy for further hikes in tariffs or the escalation of trade wars, our policy toolkit is ready. Juliette and an exclusive interview with dallas fed president Robert Kaplan, and why he says it is too early to make a judgment on a rate cut. Mr. Kaplan should we be adding stimulus to the economy . That is a question we are asking. I am openminded about it. I think the risk to the downside has increased. Juliette it is all straight ahead on bloomberg best. Juliette hello and welcome. I am juliette saly. This is bloomberg best, your weekly review of the most important Business News, analysis, and interviews from Bloomberg Television around the world. Lets start with a day by day look at the top headlines. The week began with china demanding respect. Beijing released a white paper on the trade war, calling the u. S. Greedy. Meanwhile, President Trump tripled down on tariffs, leaving china, india, and mexico to figure out their next move. Francine china says it is willing to work with the u. S. To end the trade war, but blamed President Trumps administration for a collapse in talks. The commerce minister says there was no backtracking on beijings part during the negotiations. It is just an agreement, there is no backtracking. During the negotiations, everybody often says the method is agreed until everything is agreed. Haslinda it does look like china is laying the blame on the u. S. And demanding respect. Tom absolutely, playing the blame game. As the u. S. Is as well. In this report, the white paper published on sunday, you rightly say, the chinese are taking a swipe at President Trump saying that his policy measures and the response from beijing would not, quote, make America Great again. They talk about the need for the removal of all tariffs. They say that the u. S. Should dial back its demands of chinese purchases of u. S. Goods. The gap between closing the deal or getting back to talks remains far apart. Francine if trump goes after mexico and says, i am ok with the tariffs if nothing changes, does it postpone almost automatically the truce with china . Well, he is clearly putting himself in a situation where there is a lot of pressure to solve really complicated things. Not only do we have mexico, we have china. He is not talking about iran. Three major sets of talks to be pursued by the administration, which is not particular good for negotiations. If he pursues this, and that is a big if, i think people think he will walk this back, in large part because there is so much pushback domestically. It ever at his attention from china. It is less likely we will see any deal in the short term with china even of the president is now fighting a tariff war on two or three fronts. David everyone is waiting for chairman jay powell to indicate anything about cuts. I have not sure he confirmed there would be. But he did not seem to discourage the markets. Look at what is happening on the 10 year. All is good now. Jay powell to the rescue. Hated not promise rate cuts. But in his speech, he said that the fed would act as appropriate to sustain the expansion, whatever happens. For those wanting a fed rate cut, they took that to mean exactly that, and the fed it doe does not know what is going to happen Going Forward. But just the reassurance of the fed understands what is happening in the markets was enough to turn investors sentiment, at least for today. Scarlet it is all on jay powell. Or a big chunk of it. Jay powell is a big thing. The conciliatory tone of mexico and perhaps some optimism that that will not spiral out of control helping the market. I think with powell, the key thing is not so much that he is signaling a rate cut, but that he is a tune somehow to the downside risk. He somehow managed to thread the needle of moving closer to the market view, while saying that everything is fine with the u. S. Economy. Essentially, if you hear whatever you want, there is a bullish message, whether you are bullish because using the economy is on track, or you are bullish because you think the rate cuts are coming to bail you out. Shery coming now on the impending tariffs on mexico. We just learned that talks ended without a deal. We are now seeing reaction in the markets. Futures falling a half of 1 . The president is not around, he is in europe at the moment. There were still High Expectations from the mexican side that they could come to an agreement. Josh yeah. I think part of the uncertainty we have, that no one really knows what the deadlines are, what the criteria are, and what to expect. The mexicans had hoped they could get a deal to avoid the 5 tariffs by monday. They still have time to do that. Todays meeting ended without a deal would not be fatal in that regard. We have mixed views as to whether that is possible, how serious donald trump is. The president tweeted that there was no bluff here, that he is willing to go through with the tariffs if they dont get something done with regards to mexico along the border. But a lot of analysts seem to be looking at the mexican comments, including at the president , saying that they are optimistic that they can get something done in time so the tariffs dont come in on monday. Jonathan the European Central bank leaving is inflation forecast for 2021 unchanged. But mario draghi noting in his initial briefing that the council is standing ready to change that thinking. Mr. Draghi the governing council is determined should act in case of adverse contingencies and also stands ready to adjust all its instruments as appropriate to ensure that inflation continues to move towards the governing councils inflation and in a sustained manner. Guy the market is pricing in cuts by the ecb. Draghi did not deliver. Did he underdeliver today . I would argue that he was broadly online with what we expected, but clearly the market may have been looking for a little more. It is quite hard for the ecb to surprise to much, given the have limited room to maneuver. You get the sense they are trying to keep their powder somewhat dry for when they might actually need it. They are definitely looking at contingencies. Thinking about how they can ease, but i think it are reluctant to pull the trigger to quickly. Annemarie do you think the ecb is doing enough . Frederic i think so. I think there was not any specific surprise in the comments, the slowdown, the relatively modest slowdown. Probably, the ecb will keep its rates as they stand currently. No surprise, financial conditions remain exceptionally good. David we will find out later today where we are with jobs in the United States. Let us put up what we are expecting now. Although, this has been tempered a bit by the numbers. Michael the story here, not many jobs, not much which pressure, just 75,000 jobs created in may. March and april were revised down to 75,000. So no new jobs created, which means no wage pressure. Average Hourly Earnings up just. 2 . So the average pace of wage gains falls to 3. 1 . Unemployment unchanged to 6. 1 , although using just fall to 7. 1 . Nothing unusual in the numbers more people hired than losing , jobs. Labor big drops in the le force. Alix money floods in coupons, particularly on the front end, as yields drop. It feels like the overwhelming feeling is that we will have more cuts from the fed. The curve is still steepening, which is what you would expect if the market is trying to communicate its expectations for a fed rate cut sooner rather than later. Lets say the fed cut rates in june or july. Is that enough to save the economy . Anything that is a big question around that and i think there is a strong possibility that it is not enough. Vice president pence says the Administration Still plans to impose tariffs on mexico next week, with no agreement on halting the flow of migrants. Vp pence the tariffs will be imposed on monday. We have made that very clear to the mexican delegation. But discussions will continue in the days ahead. David we have the threatened tariffs being talked back and forth with mexico. What effect is that having already on mexico and markets . The u. S. M. C. A. Was a done deal. It is being reopened for none economic reasons. The Trump Administration is using tariffs as a weapon. So this is a big deal. It leaves a residual of uncertainty Going Forward on anything the Trump Administration says or does. I think markets are starting to come to grips with that right now. Juliette still ahead, the view from bloomberg invest. Interviews from Influential Investment figures on the current challenges and opportunities. Plus, we speak exquisitely to Dallas Federal Reserve president Robert Kaplan. And up next, more of the weeks top business headlines. The battle over big tex. The d. O. J. And f. T. C. Split up the job of monitoring tech giants. Of a breakup in regulation whipsawing stocks. This is bloomberg. Juliette this is bloomberg best. I am juliette saly. Lets continue our global tour of the weeks top business stories. U. S. Antitrust officials and lawmakers targeting silicon valleys biggest names for a drawn out fight with the government. Alphabet, facebook, apple, amazon even tumbling today after u. S. Antitrust probes after the u. S. Justice department and the federal trade Commission Team to be splitting up oversight of the technology giant. Apple is in some way anticompetitive . This in some way a shock to investors. It is viewed that apple they were not going to go after. This was at the exact time you did not need it, given the china worries as well as other demand issues that have been haunting apple stock. I think part of the problem apple is facing, as well as other tech players, is, what is the ballgame, and where other rules . Is this a baseball game where you start running in the first, or the third . I think that is the frustration in terms of what they do, in terms of strategic moves, do they try to keep it close to the vest . I dont think this will change their business models. But i dont think this was something even in cupertino they were expecting. I think the timing is surprising. Guy President Trump holding up the prospect of a big trade deal with the u. K. He did so during a joint press conference with the outgoing Prime Minister theresa may. That was a really wellbehaved press conference. We always hold our breath, we never quite know what will happen. No fireworks. He didnt really say anything that cross that line but people were looking to see whether he would cross the line. He was, if anything, extremely polite and gentle with the outgoing Prime Minister. He talked about one honor it had been to work beside her, how she he talked about what an honor it had been to work beside her, how she might not get as much credit as she deserves on brexit, which contradicts what he said only a matter of days ago. I think it was important to lead the final meeting between the two of them on a higher note and maybe some of the powder for later. There were a couple of things that got everyones attention. His saying that the National Health service should be part of a discussion on trade, everything should be on the table. And he sent pretty clear signaling to mexico back home. But if anything, with may, he was restrained and for more far more courteous than we have often seen him be. Guy theresa may has resigned effectively as conservative party leader today, marking an end to a tumultuous three years. I suspect whatever is the successor to mrs. May will have a pretty shortlived from your premiership. Why . Because the conservative party has found it unable to agree on the brexit results. In terms of the support within the conservative party from brexit and certainly those who will choose the next conservative leader, it remains strong, that the parliament cant get there and the clock is ticking. The french president does not want to extend beyond october 31. That means the risk of a Nodeal Brexit has gone up. And we have seen the conservative Party Candidates actually campaigning on a Nodeal Brexit. The talk of dissolving it in order to just fall over the cliff. Markets dont think that will happen, but i think the next few months will be pretty bumpy, and that means to me a new general election here in the u. K. Caroline Oil Prices Tumbling today. Take a look at this, we are off the lows, we saw brent crude fall below 60 a barrel for the First Time Since january. Steel prices trading at their lowest since the beginning of the year. Grewpetroleum stockpiles by some 22 Million Barrels last in nearly 30t years. We also saw u. S. Crude production hit a record. All that sparked a selloff but has seen wti tape into a bear market. We are looking at a chart from the recent high set just a few weeks ago in april, down more than 20 since then. The price action in oil today was brutal, essentially ending in a bear market. 22 from this april high levels. And it is thus scale. When you look at total petroleum inventory, it is not just crude oil, it is also refined products. So, gasoline as well, claiming 22 billion barrels last week. The data goes back to 1990, this is the most ever. It is not just the stockpile. When you look at the u. S. Production, it also hit a record. We also saw imports from other areas of the globe rise as well. It comes back to the fact that , if you were already worried about the demand picture, especially as it relates to u. S. China trade, now, we could be facing a supply issue in the u. S. As well. Not that there isnt enough, but that there may be too much. Fiat chrysler has confirmed it is withdrawing a proposed merger with renault, a deal that nissan was firmly against. The french carmaker wrapped up a Board Meeting with, again, no decision. That prompted fiat to walk away. It is the dream of this particular grand alliance dead . Stephen it is looking clear that this is dead. Im not going to say that final, but we are getting signs that this is definitely not a good process towards a deal. In china, you say, tie guay luh, too expensive, walk away. As a negotiating tactic, walking away in this sense could be the final nail in a deal which , which perhaps a few days ago seems like it was heading toward a preliminary agreement at the renault Board Meeting. But they had two latenight sessions at the renault Board Meeting that did not end with a vote on either case. And we are seeing now that the Fiat Chrysler executive team pointing the finger for all this falling apart on the french state government. This is a statement it has become clear that the political conditions in france do not currently exist for such a combination to proceed successfully. Fiat chrysler saying, no, the deal is done. Francine looking at the dday commemorations, 75 years since dday. With President Trump addressing the crowd scattered there. To put it into perspective, the sacrifice. 75 years of european freedom and prosperity. Tom the two president s walking down to the cliffs above omaha beach. Truly extraordinary. What is so amazing is those of us with a collective memory of Ronald Reagan in 1984, and our time has moved on, over 40 years. Truly extraordinary. As the two president s try to understand the sacrifice that was given. Juliette you are watching bloomberg best. I am juliette saly. Fed officials descended on chicago this week with investors looking for signals of possible rate cuts. We sat down exclusively with dallas fed president Robert Kaplan at the conference. He told us the fed is on high alert as a result of trade tensions. Mr. Kaplan i think it is really to make a judgment on that. We are going to be very vigilant about understanding these heightened trade tensions, see if they see through to the economy, most important they, see if they persist. And so i think it is too soon, though, to make a judgment as to whether we might or might not taken action. I would rather be patient and let events unfold a little more. Michael investors have priced in three rate cuts. Wall street economists over the weekend recently joined the consensus that you are going to cut rates. You have been in the watchandwait camp. What would tip the balance for you . When would you think that you need to make a decision . Mr. Kaplan i would need to see some evidence that there is a further deceleration of the economy. We expected that growth would slow from 20182019, what we are still growing above trend, we still see a tightening in the labor market. And our dallas term mean, which is our measure of core inflation, is now at 2 . So i would need to see some evidence that there is a worsening in those trends. We may well see it. I am on watch as to whether we see a further deceleration. But that is what i am watching for. Michael but the data are lagged. Costbenefit, what is worse . Cutting too early, or waiting too long . Mr. Kaplan so it depends on where you are in the cycle and what your stance is. My own assessment of our stance is we are in the neighborhood of neutral right now. If we were to c