Anna any hint of stimulus. Mario draghi delivers a pitinos a keynote speech with investors scanning for close on policy. The fed begins its two day meeting. Airbus gets a boost. American air is assessed to be in talks to buy 50 new alienfter they hand in 11 dollar deal. We are live at the Paris Air Show. Money as phils tronic cuts fullyear Sales Forecasts. What looks to be less than expectedly sunny conference. Is quite do me and gloomy here which i think is fitting. We look at treasuries, yielding almost 2 right now. Winds yielding negative, 25 basis points. Yesterday we had olivia saying basically that the ecb no longer has the tools it needs to confront if we were to say one, even a mild recession that governments need to be spending more money, fiscal policy needs to take center stage and that is unlikely to happen since the germans are the only one with any money and they famously do not like spending money. Everyone else has budget surpluses that are pushing up against the eu rules and those roles dont look to get changed anytime soon. Problem and that is why we see Inflation Expectations at alltime lows in europe. Problemanna while we wait fore conversations to get underway, this is what markets are pricing in. We are expecting to go weaker at the start of trade but not by much and we get a sense of waiting and watching what is going on, waiting and watching what comes from the fed a little bit later on this morning. Those are the futures. Lets have a look at the gmm. Hong kong once again outperforming, continuing to deliver to the upside of a 1. 1 . The gains in asia are modest. It underscores how things are not all risk on. The us trillion dollar down. 2 mover a bit of a standout as a result of comments about the likelihood of future rate moves. Lets show you the other side of what is going on with the gmm. The commodities market and focus. Opec him they cannot agree on a date to meet to discuss whether they will prolong the production cuts. And a focus on soft commodities. In the u. S. ,side talk about what the weather is doing to the crops here on soft commodities part of the conversation. Matt the biggest brains now at the worlds biggest money risk they think risk ask its risk assets still have room to run. They say the market is pricing diff urges from its patient policy stance. Joerg jpmorgan asset melenchon management begs to differ. I think credit will continue to do well because earnings are looking good,s to have the flow through of the fiscal risk tk stimulus and corporate earnings. The future looks pretty bleak. I want to start selling rallies. Through 400 basis points. Matt lets get into the markets with mark cudmore. Managing editor in singapore. I will start with the feds chance, the opportunity they have to manage Market Expectations. How do you expect they will do . Difficult to be manage. There is a lot priced into the market. Expectingkets are with the guts of three cuts. The fed will move somewhere more dovish than they have been signaling, it is about how far they will go. It is unlikely they will guarantee a rate cut and that will be disappointing for the markets, not just for equity markets but on markets. Wealthht see restructure. Yields andise in they say we are ready to act. It is not locked in and we see yields rise a little bit. Equities selloff a tiny bit and that would be seen as a success by the fed. Success lookswhat like. What would a dovish surprise look like for markets, is it possible for the fed to deliver a dovish surprise given the extent of dovish expectations priced into markets . It is a good question. There is scope for a shortterm dovish surprise. If they came out and said we are going to cut rates in july, we can see the economy is deteriorating. We are ready to cut in july and we are ready for further cuts as needed and the inflation justifies that. That would be edge dovish surprise. I think it is a good question. I dont think that rallies would sustain. We might the market will is priced into rates markets, this is not exciting. This is not anything extra. It is possible for the fed to give a dovish surprise but to sustain it beyond a few days. Let me ask you the question of the day and try and figure out what kind of responses you are getting. Would fed rate cuts be enough to the em rally that we have seen at the beginning of 2019 . Mark this was prompted by an interesting argument put forward bullishlleague who was it markets. A. M. Equities will have a good year. They have done ok. Willof the real threat fade in that proved right. The trade war is back in. Her argument now is we have evolved though trade war where it could potentially be a winwin for em assets. The idea is Central Banks are showing. They will pump in liquidity. We have been in this situation before. We know that Financial Assets do well even if the real economy stays sluggish. On the flipside, we could get peace in the trade war and that would see a massive risk on boost and return of animal spirits. Emergingmarket equities can do well either way. I am suspicious. It is an interesting argument. Anna one of the things that could dictate what em does is what happens to the dollar. I was reading in the last 12 hours or so, someone tell the fed fx market that it is about to ease. Do think the dollar is too strong at the moment . It has been a tough one. A lot of the fx market is turning into the camp of one to sell the dollar. I turned more bearish. I am not alone. That is part of the problem. We have this fx market that feels like the longerterm fundamentals are turning negative the dollar. Negatively. Ading one of the problems is it is not clear what everyone else wants to rush into. It is hard to necessarily by all the em currencies if we are going to have volatility over the next couple of weeks and it is not clear what the alternatives are. It does not look like sterling is brilliant. Everyone wants to sell the dollar but against what . Matt . Just in discussion. It will be interesting if the fed comes out with a rate cut, that puts upward pressure on the euro and the ecb needs to react. In a pretty negative position already. Us out ofre joining singapore. You can join the debate on todays question of the day, would fed rate cuts be enough to revive 2019s em rally . Reach out to us, top ib tv. Lets get to the bloomberg first word news in dubai. Administration sent 1000 more american troops to the middle east. They will not give details on where the troops will be deployed or what their mission is. Tensions continued to rise. Washington accused to ran of thing behind attacks on two tankers in the gulf of oman but iran denied any involvement. Oil is Holding Losses as opec and its allies struggled to set a date for the next meeting. The key issue is discussing the future of supply cuts which are due to expire at the end of the month. Oil prices have been hit by growing u. S. Inventory and the trade war clouding the outlook for global demand. And time to make sure that we Work Together closely, not just bilaterally but with all our members of the coalition. And that the good work we have done over the last two and a and thers continued second half of 2019. Electedirst freely president of egypt has died suddenly. Media reports Mohamed Morsi suffered a heart attack and collapse while a cheering attending a court hearing. He was elected in 2012 but was toppled by current president of cc. He had languished in prison since 2013. Australias central bank is likely to lower Interest Rates again to drive increasing hiring and boost confidence that inflation will return to target. This comes from the minutes of its june policy meeting when at least the cash rate for the first time in almost three years. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna and matt. Anna thank you. Next, a leg up over rival boeing on the first day of the Paris Air Show. We will hear from the european playmakers ceo and we will be there for the second day of the paris a show air show. This is bloomberg. Anna welcome back to the european open. 15 minutes to go till the start of the cash trading day. Were waiting for the fed and the speech is taking place at the ecb event in portugal. We are not going anywhere in a hurry with the european futures which have been flat. Lets get back to the aviation sector. Airbus got a leg up on its rivals on the first day of the 2019 Paris Air Show, looking locking in 13 billion in debt as compared to zero for boeing. Bloomberg has learned that they could buy jets at the companys new midsized offering. To guy johnson. We will commercialize the plane, we started today. Moving forward. We believe it is a good value proposition. It is a longrange plane. This is offering a lot of opportunity for customers. We going to the market with it. We are going to the market with it. Max lets talk about the and the possibilities with those. Can you take an advantage of that . I expect he will say no because our older book is so full but is there nothing you can do . We think ising what right. When it comes to the single line , it was the case last year and this year. And the case next year. We are going from 60 planes a [indiscernible] and 63 by 2021. Strong plane. That is what is next. Guy are you being held back by the manufacturers . We had a difficult 2018. And 2019, we had the engines on time area that is a positive change compared to last year. We would like to have more engines moving forward in the next years. We are awaiting their commitments to go for higher numbers. Guy lets ask you about a tohing else, you had the 20. Are you not constrained by the problems you had with the a320 line, you could sell more of those. I am tried to figure out how you could take advantage of this. The airbus could sell a few more planes. Ramping up is a challenge. A situation on the eight to 20. On the 220, it is ramping up the production of good planes. These are alternatives, they are good challenges. Guy lets talk about china. We have a trade war. We dont know how it will be resolved between the u. S. And china. Do you get a sense that we are going to be seeing more orders coming for airbus aircraft out of china as result . Do you see any advantage . We have a strong relationship with china. Have reduced more than 400 planes. A very strong payment to china and the chinese market. We continue to grow to serve the needs of china and we have pursued a strong and loyal partner and that is where we want to go. Matt the ceo of airbus speaking with guy johnson. Parisl be back with in after the open when we will speak with the chief executive of saffron. Do not miss that interview. Lets get the Bloomberg Business flash in dubai. Titan patrick draw he is buying celebes. It is the first move into the luxury arena. This means the two leading auction houses will be controlled by french billionaires. And has ownedder christies since 1998. European car registrations rose for the first time in nine months. This was helped by a jump in deliveries in german sales and europes biggest economy surging over 9 . Ongoing pullback in the u. K. Puts brexit uncertainty customers off buying new vehicles. , hitting the shortsellers to the tune of half 1 billion adding to the rally that has added almost 600 to the stock price in an ipo last month. The company is kicking off sales of beyond beef that is meant to look like ground beef. That is your Bloomberg Business flash. Matt and anna. Anna thank you. We are minutes away from the start of the equity trading day. Our guestsed by sharing his top stock picks for europe and london wakes up this tuesday morning. This is bloomberg. Anna welcome back. Sex and a half minutes to go before the start of equity trading. Were waiting for the fed and other big picture cases falling into place. Let talk about the stocks our next guest likes. Lets talk about some of the stocks that are in focus for you. Some of the stocks that could be on the move this morning. We had Capital Raising and warning about sales and another. You like nokia and telecom equipment. Guests exactly. Different from the chip stocks which are gdp sensitive. We they have their own cycle so they have a more diversified approach and nokia is one of two players in the Network Equipment cycle. We had a pause post the 4g ban and thethe semiban of huawei, driving markets for nokia and ericsson. 5g is coming. Anna matt is still with us in the equities conversation. It is interesting to bet on nokia and ericsson. Is this in part a play on the possibility to get people to stop using huawei . Guests it will benefit from that. The u. S. Themselves will benefit big business. And in a market where you have a duopoly of maine providers. Most operators like orange or vodafone will try to use two providers so you will be in most contracts and it is a call on how big 5g is going to be over the next three to five years and it is much more than a consumer led network. It will be for smart factories and secure networks. When people see it as a different transition from the lt and 4g cycle, it will be bigger. Anna thank you. Thoughts many more after the start of the European Equity session. It could be lackluster autolock but a lot to look forward this week. This is bloomberg. Anna a minute until the car start of cash trading this tuesday morning. Lets see how we are positioned for the start of the trading day. The session in asia, slightly positive. Hong kong continues to outperform. Oil prices a little weaker. Opec cant pick the next day to discuss production cuts. We see money going into the yen this morning. Even with modest gains in asia, there has been appetite for the japanese currency. Looking sluggish this morning and european futures look sluggish. It seems we are in a holding pattern. We are waiting for the fed, waiting to hear from the fed, what their outlook is for near Interest Rates and july for rate cuts. Is it possible to get a dovish surprise from the fed when expectations for rate cuts have run away with themselves . European equity markets opening up and we expect to be pretty flat. The session in asia was modestly positive. The japanese yen, catching a bid but euro stronger and the dollar a little weaker. We had a conversation with mark cudmore earlier on whether the dollar is overvalued and whether the fx market as a whole knows there could be a rate cut coming. There seems a disconnect between these asset classes. The spanish ibex down. 2 , the ftse up. 1 and broadly on equitypretty flat markets. From a sector perspective, it doesnt look like we are getting great clues as to where the session goes. In positiveector territory. Basic materials, bright green in positive territory. Health care, financial. Utilities and Health Care Getting a bid. A mixed picture coming through on these markets. Lets look to the mov function on the bloomberg. We have numbers from ashtead group, the Equipment Rental business out of the United States based in london but exposed to the u. S. And they put out numbers this morning. Up point 2. 5 . Others, a mixed bag. Some mining stocks, rio tinto, danon is there. Some upgrades and downgrades having an impact. Is weaker, exdividend. Telefonica also ex dividend. Amf, interesting to see it go weaker. Sc micro is a little on the weak side, down 1. 6 . We see weakness in chips. Please had money raised by infineon. Thats a look at markets as they opened down this morning, down. 1 . European markets, opening slightly to the downside. Matt it does look like we are falling a little bit this morning. As the feds policy meeting begins. A twoday policy meeting beginning today. Markets are expecting signals the fed is prepared to cut rates at some point. As always, we will act as appropriate to maintain the expansion with inflation near our symmetric 2 target. We are attuned to potential risk to the outlook and if we saw a Downside Risk to the outlook, that would be a factor that could call for a more accommodative policy. Im nervous about the low inflation rate, so even though we expect it is kind of temporary, that by itself could be a reason for more accommodation but we will have to look at how things are revolving. We see mixed signals around what is happening in china and europe and what is important for us from this is to keep an open mind and keep being data dependent. It is too soon to make a judgment as to where we might take an action. I would rather be patient and let events unfold more. The cio of latitude Investment Management is still with us. I wonder what your expectations are for the fed. It seems to be one of the most important issues for markets today the trade war looking so undecided. I agree. It is far and away the most important thing to centralbank policy and the fed in particular. Weve seen a pricing and of rate cuts this year from the market and easing of sentiment into the dovish quotes you heard. Im not sure they are going to cut that soon. I think if anything, we get a more hawkish surprise but not by design because they cant really be dovish enough given what markets are pricing in. I think theyll say we are going to continue to be accommodative and increasingly look at the slower sustainable inflation rate rather than temporary inflation rate below the 2 target and we will see easing. Whether that is enough to get a shock to Market Expectations, i doubt that we will see easing from the fed the next nine to 12 months. Anna easing, but to what extent . Where is the shock going to fall when we hear from the fed this week . Is it pointed out, possible for there to be a dovish surprise in this context . The Market Expectations seem to run away with themselves. Aparte every market from the dollar has priced in weaker fed moves. The dollar is high and that is one place we could get it. If they talk the dollar down, that will add more easing to the market and that could effectively be a dovish surprise to the market. Other than that, most markets ie pricing in the maximum expect them to so i cant see us shocked by more language. How does this change the way you invest . If you look at the fed cutting the market is pricing in four rate cuts in the next year and the ecb doesnt really have anywhere to go in that direction. Does that mean dollar weakness and a change in the way you look at your portfolio . Freddie i wrongly suggested it means dollar weakness for the predomin