As well and have a look at what is going on with these indices. Hong kongs Property Index down. 8 . Homeserage value of new in 70 major cities in china, excluding governmentsubsidized heading, up. 71 in may according to data from the office. That is greater than the increase we saw in april, which was about. 6 and less from what we saw in march as well. Robust april as well. It is not helping these Property Companies which are currently moving to the downside. Have gotll you who we coming up at this hour. We will be speaking to achieve equity strategist and peter hammero will speak to us about the prospects of two therein. Su keenan has the first word news. Su we start with the iran earthquake. , iran says it will breach the 2013 nuclear deal on iranian stockpiles within days ease therope helps pressure. Tehran says it will exceed the caps on lowgrade uranium mergers on june 27th. Enrichment beyond the level intended to prevent the making of weapons grade material. Europe is urging iran to stick with the agreedupon yawl despite u. S. Pressure. A gauge of factory output in new york fell last month by the most on record, adding to signs that trumps tariffs are hurting manufacturers in the wider economy. To then index fell lowest level since october 2016. Respondents feel Business Conditions are worsening. Earthquake, at least 11 people have died and more than 100 are injured following an earthquake in chinas province. Emergency crews worked through the night to search for survivors after the quake struck late on monday. The epicenter was 20 commenters from the city. Damage to houses was reported as far as 200 kilometers away from the nearest city. Chinas holdings of u. S. Treasuries fell to a 14 year low in april, extending declines from the previous two months. Billion toby 7. 5 1. 1 billion trillion, i should say. The lowest level since june 2005 and it makes up 7 of total u. S. Government that. Chinas ownership of treasuries peaked at 14 in july 2011. The members were collected be portrayed talks collapsed back in may. Global news, 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. This is bloomberg. Rishaad a major week for global Central Banks. We have the fed decision on wednesday in the u. S. And early thursday in asia. Joining us is the equity strategist, tim. We have the bank of england, bank of japan. Also in this neck of the philippines, indonesia, and taiwan as well. Think we will start with that because they are saying they are doe likely to ease than anything else in the forthcoming few months. Ofuppose that is it for all these Central Banks right now. Where is the pressure coming from right now . Global activity indicators, growth and real economy, really had a rolled over collectively in the past couple of months. We saw a nice rebound after the downturn in 2018 and the First Quarter of this year, but all are allcators we have rolling over, and i think that suggests they need a prophylactic move on the part of Central Banks to underpin growth. Paul i am going to leave things here because we will get it set up from kathleen hays. Of course, the fed, will they change the narrative . Will the verbiage alter . Thatwill be the key thing people are looking for, i am guessing. Are primed forts it. Clearly, it is the logical thing for the fed to do because reducing tilts to the downside. At the very least, were not going to see an open door to any rate hikes, but how aggressive can they get . Just when you are ready for the set to open the door to the next move being a rate cut, what do you get . Sales decent retail report last friday. If you look at this bloomberg chart with me, you can see that this is just one indicator. Still not quite as strong as it was, but will showing that there is not the downward trend in consumption. Fed officials and many economists were downplaying what the consumer is spending and jobs are growing. If you are a data dependent said, you may be saying we may open it a wider crack and we can come about that when jay powell is at the meeting. We are not ready to move through. On the other hand, to reports in the u. S. Today, pretty striking. The National Association of home builders, their survey which they talked to real homebuilders actually came up with an indication that tariffs are ofting homebuilders because the prices of building materials. I think that goes to show you how the trade war concern is spreading and the new york fed puts out an Empire State Manufacturing index. It had its largest onemonth drop since they had been putting it together. Again, uncertainty. In rest or uncertainty, trade war uncertainty. All this showing up in this data. At the end, most people are saying it is way too early. Cut the rate. To in terms of signaling a rate cut, it will couch it in terms of being data dependent. Jay powell has a lot of questions on the press conference. Many said officials have signaled that it is a big, red flag and that is another thing they will have to answer to. Tim exactly ask that question. What that of data, if they are data dependent, would point to the Federal Reserve and say we got to cut rates and soon. Tim i am not sure there is one data point that would tip them. I think it would be an obligation of evidence. Paul you see quite a robust rishaad you see quite a robust thing. Tim the survey had a record decline in the last month, albeit that was probably reflective of concerns over mexican paris, which have not been implemented and we have seen some other softness in other activity indicators as well. We put them all together in terms of our indicator, tracking u. S. Gdp growth equivalent, and that has come down from the 3 level in the First Quarter two bouncing around. 1. 6 to 1. 7 currently. We have seen a softness. A veryg against that is low level of unemployment. The fact that the absolute level of growth is tracking more or less in trend, so it does not seem to be an immediate reason to go and have a fed cut. That is when a market is pricing in 20 chance of a cut. At goldman sachs, 10 subjective estimate of a cut. Rishaad every meeting is live. Tim the market is expecting a cut in july and another one further into the year. Market is pricing to cuts. We think that is a bit much but the way that is going to track out will be a function of how the data pans out between now and then. Rishaad they say do not that against the said but is the the fed, but is it being bullied into this . Tim jay powell says the fed mandate will be driven really by what the evidence suggests is best for this economy. Rishaad what difference does 25 basis points or 50 basis points make with perhaps many people questioning the efficacy of Monetary Policy . Great andis a involved topic. We are getting down to the level of in actual terms of Interest Rates where you are approaching zero balance. We are there in europe and japan and have some room to cut in the United States. But it does get a symphonic as asymptomatice as you get to the zero bound. Animalerved to catalyze spirits and be a little bit more supportive of Consumer Sentiment as well as investor sentiment, but clearly, there is an interplay of forces, not least of which is the outlook of geopolitics in terms of u. S. And china trade. Rishaad i am going to get back to kathleen hays, our Global Policy editor. Kathleen, we are just discussing the fed, but as i said at the beginning of the introduction to of, we have a whole slew options. You have taiwan, indonesia, and the philippines. Kathleen i am in centralbank heaven. The reserve bank of australia minutes just fell. We got that hint and it is still likely to be another cut. The bank of japan meeting, this was interesting. When i spoke to governor kuroda at the end of the g20 meeting, he basically said i do not expect to do anything but i can do whatever is necessary to boost growth, boost inflation. Lets look at a chart. It is a great chart. They do not just show japan inflation, which is the white line at 0. 9, barely halfway to target. It is ecb inflation, too. That is the other line, the 1. 5 percent. T excuse me, 1. 2 . Their target is just under 2 . The fed is the turquoise line. The sameall facing problem. It is not just the bank of japan and governor kuroda. Governor kuroda speaking to parliament tonight or this morning and he said risks are on the downside for the global economy. The boj will discuss that when they meet. Are maybe going to talk the talk but not walk the walk yet. Mario draghi speaking for the European Central bank and policymakers. Only or so ago, he said we can cut rates again and by more bonds saying the same kind of things, and the bank of england kind of going the other direction. In a more hawkish direction. Hawkishlly going to be when they meet on thursday and issue the meeting minutes. They are waiting to see if the recent slowdown in gdp was transitory, so a different conclusion for what they made to next, but the same kind of thing, we are going to talk. Across asia, the big thing is if nest, itignals dovish gets these Central Banks more room to be that way as well. Rishaad lots of food for thought. Kathleen hays in new york. Investors piling and the Chinese Consumer stocks. Asking him if he is fine that argument. Iron ore prices surging on the back of chinas renewed effort to boost the economy. Peter hamra sees sustained demand ahead. Rishaad looking over markets, still with us, equity strategist tim. We heard from kathleen. She was talking about Central Banks. More wiggle room to regional Central Banks here as well to loosen Monetary Policy even further. Doesnt not . Does it not . Tim absolutely. Our forecast Interest Rates, policy rates, and the various economies, at the beginning of this year and where they stand. At the beginning of the year, we were looking for some moderate degree of hikes across the board, and now we are looking for cuts of various degrees of magnitude. You have had a softening Global Growth as we were mentioning a few moments ago and that suggests Central Banks have room to ease, particularly given inflation. Rishaad what the market implications for growth . We will see that when the Second Quarter earnings season kicks in next month. That again perhaps utilizes it and banks in where we are bakes in where we are with equity markets. Tim the way we are characterizing things, it is really a tugofwar going on. Bottom line, it is likely to be bound zone. Ange on the negative side, you have the trade uncertainty and the slowing growth. On the supportive side, you have forr to the towards lower longer Interest Rates which is very good for asset market and markets already correct somewhat in taking out valuation buildup. When we look at investment positioning, it is quite light across the board. The intersection of those two forces probably spells choppy range bound markets. Rishaad historically speaking, andave the borrowing, renting money. It has been so cheap for so long. People say it is that sugar high have been on, but you keep that sugar going and you do not get a , there aree diminishing returns when you have Monetary Policy like this, so what is the impact now and what else needs to be done on the fiscal side and not just the monetary . Tim also and has to questions. Clearly, were getting to the zone with qe, having had a decade of this and being at the the zero bound that you are in the proverbial pushing on a string zone in terms of Monetary Policy and we are seeing in Central Bank Balance sheets increase substantially in the past decade but that has not been translated into as much money supply creation through the intermediation of credit creation. So i guess how do you get to push that into real Kinetic Energy in the economy . As need the fiscal policies, you mentioned, to engender immediate demand and that is why there does need to be some sort of a fiscal aspects. Rishaad we barely touched the trade war. We said we were going to talk about how people have been piling into consumer staples. Is that the strategy with your own recommendations . Tim generally, yes. There has been a bit of a nuance in chinese consumption. The auto sector, there was some auto sector specific negatives, which we have been quite vocal about in terms of a couple years ago. Theres some structural changes taking place, etc. Within the market in china. Madead indigenously vehicles. 9. 4 up. Tim true, but in aggregate, we have seen softness in demand and we have seen in structural shifts in terms of online to consumption, so theres a number of flight motifs within the consumption sector itself. We think the underlying consumer demand dorian china is robust and certainly, in a world where you are concerned about external tradeoriented geopolitical negative factors, domestic demand in china is the area of strength and what we would look to. Rishaad how is the whole strategy evolving . It is difficult. Tim it is very difficult, difficult for our investors. There is a huge amount of interest. Rishaad we have the long sectors for june. Consumers staples. For everyones edification, this is our estimate of where we are going to see the most instructive earnings revisions in june and a negative sectors of those where we think there is the most earnings risk. One of the areas of strength has been iron ore, and that is something which we think is reflective of chinas efforts on the fiscal side to stimulate Infrastructure Spending as well as some supply discipline, so those would be areas we think there is probably going to be better earnings revisions strength and on the negative side, areas where we are a little bit more earned, which would still be tech hardware, which have their own longer cycle issues, particularly in dram as well as energy. We will probably see some downward revisions. Rishaad energy and utilities, these are your traditional values stocks, are they not . Tim correct, but in terms of where we think the most immediate momentum will be in terms of earnings revisions, and that is one of the key drivers in the shortterm, this is where we think there is the most risk of earnings downgrades. Thank you so much, tim. Rishaad thank you so much, tim. Tim moe. Airbus striking deals, nothing you jets in harris. Announcing new jet in paris. This is bloomberg. Rishaad lets have a look at the latest business flash headlines. Airbus taking a big lead on the first day of the paris air show, locking and orders for new jets. The announcement includes an 11 billion order. Xlr, which is capable of crossing get antic and is raising the pressure on rival, boeing. Virgin atlantic wants Qatar Airways expected to announce a stake as part of a plan to boost revenue abroad during the saudi arabialed aplomatic standoff bit of deal would add to the existing interest for the owner of british airways. The leading open toays it is dropping the max branding for the troubled 737 plane as it tries to regain the trust of airlines and travelers after two fatal crashes. Dennis muilenburg says he sees the max back in the air by the end of the year. We are very focused on safety. That is our paramount focus. That is the tone for the entire show. We are making good, solid progress on bringing the max back up, working to the certification, simulation flights this week. We hope to schedule the flight test, the certification flight shortly, and get the airplanes that up in the air, but all of this is being done through the lens of safety and we will take whatever time is necessarily to make sure the plane is safe. Rishaad 2019, 2020 . It is something we expect before the end of this year. To give you a specific timetable. We will take the time necessary. We expect it to happen this year. Are the regulators going deeper than you anticipated . Is this a more thorough examination of the aircraft . Encourage it. We are working with regulators around the world. The faa, the chinese authorities, brazil, canada. About two weeks ago, the faa us in ballast. It is important we do this in a very thorough you keep emphasizing thorough. Are the regulators going further in than you would have expected initially . Dennis i think we are going even deeper than normal and i think that is good. We encourage that. We are looking at every dimension of the max, the Software Update that we are making. Not only the airplane itself, but also the training and education materials and the overall endtoend design and certification process so it is a very holistic process. Are the regulators on the same page . Dennis they are all aligned. I see growing convergence among the regulators said a lot of the telework on the certification, and we are encouraged by the collaboration between the regulators and we are seeing growing convergence between them. Aircraft think the will fly first in the u. S. And europe, or do you think that will happen at the same time . Having they are meaningful discussions as we work through certification. We will support whatever the regulators want to do in terms of bringing it came back up. Guy they are getting closer together and not further apart . Is there a gap between where the faa is an the other is . And the other is . Dennis the trend is that they are converging and that alignment adds strength. Guy where other chinese regulators in all of this . Dennis i see convergence across the entire group. Progressuraged by that and our focus will remain steadily on safety. To dennishanks muilenburg at the paris air show. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. 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