Surveillance. Goodning orbit more afternoon or good morning. We saw a bit of a lift in asian stocks. Now, the stocks europe 600 down. 27 . It always honest President Trump and xi jinping can find a solution. They will sit down and we will see if we have something at the g20. The u. S. 10 year yield, the story of the day, actually, the year. The nymex at 54. 12. We understand opec may have found a date with a could meet, the first of july. Coming up, we have an allstar guest lineup. At 930, we have an excuse of interview exclusive talking luxury and the chinese of watching. At 11 30, we are joined by blackstones chief executive Steve Schwarzman. And later on, we speak to the facebook coo sheryl sandberg. But first, lets get straight to bloomberg first word news. A bloomberg scoop. President donald trump asked white house lawyers to explore his options for removing Federal Reserve chairman Jerome Powell. Happened earlier in the year, less than two months after trump discussed firing him. Lawyers examine the legality of stripping powell of his chairmanship, leaving him as just a governor. It would beed questionable to fire the chairman without cause. May impose sanctions on turkey for buying a Russian Missile defense system. The administration is considering three sanctions packages. The idea with the most support is to target several Turkish Defense companies. Is turkish president erdogan likely to ask trump to back down at g20. Boris johnson extending his lead in the race to become the uks next Prime Minister. He looks poised to pick up more votes as the hardest brexiteer in the contest has now been eliminated. The next two days will see the field whittled down. Those candidates will be voted on by Party Members to determine the winner. To japan, where exports fell for a sixth consecutive month, adding to concern of the impact of a prolonged trade war. The value of shipments fell 7. 8 from a year earlier, less than forecast, amidst a trade deficit of 8. 9 billion. Men iseuropes richest just joining the exclusive senti billionaires club. Chief executive sits alongside jeff bezos and bill gates as the only people in the world worth more than 100 billion. , ishis fortune, just his now equal to more than 3 of frances economy. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. This isre bloomberg. Francine . Francine thank you, the anna. Viviana. Jinpingt trump and xi will meet at g20 for what they call extent talks. To say what trump had about it as kicked off his Reelection Campaign in orlando. I spoke to president xi, terrific president , a great leader of china. Spoke to him this morning at length, and we will see what happens. We will have a good deal and a fair deal or not have a deal at all, and that is ok. Francine meanwhile, the u. S. May impose sanctions on turkey for buying a russian selfdefense. The administration is considering three sanctions packages. The idea with the most support is the target of several Turkish Defense of these companies. The turkish president erdogan is likely to ask trump to back down at g20. So lets keep it on global trade and g20. Joining us is our guest. Thank you for coming on. Trumpt know if president is planning multiple fronts or if it is just tweeting by storm for his election campaign. I think it is both, nothing particularly new. There is plenty on the agenda coming. He is launching his campaign, we might see more of this, i suspect. Francine might see more of this translating into policy . If you look at turkey today what do you sell the lira because they have sanctions or do you dismiss it as a mexico with president said were going to fight hard and then they find an agreement . Wolfango the sanctions on turkey are coming. This is not a process just by the white house, but by congress. This is a mistake they are making him a believing they can reach a deal with trump over this sanctions process related to the acquisition of the s 400. The moment in a rise in turkey, turkey will face sanctions. The president has to choose five out of the remaining 12. Can a mixture between strong and self, but that is basically the baseline at this point. Francine what does that mean for global trade . Does this get worse or better quickly . Wolfango the sanctions, they are obviously a big deal. A nato country sanctioning another nato country is a big deal in terms of bilateral relationships. But terms of global impact, i dont think it will have much of an impact whatsoever. It is a very specific issue. 400, the u. S. Has already sanctions china and nobody has noticed. Francine what does it mean for global trade . I ask every time if it will get fixed or get worse. Wolfango . Yeah. Yeah. It is not just global trade. It is not just about the trade deficit, it is much more than that. It is the u. S. Asking china to reinvent its economic model, which is not going to happen yet. So in terms of the shortterm, we know they will meet next week. Best Case Scenario will be a restart of the trade talks. Nothing more than that. It is still early. There is pressure on both sides because the economy is slowing down. We have seen the u. S. Payroll, we have seen data from china. Politics was in the driving seat, maybe the economy would apply more of a role, but there is no would play more of a role, but there is no easy solution. Francine looking at centralbank policy about does the world need more stimulus where are we just creating another problem . Wolfango anything that central bankers can do would not fix the challenges that we have. We need a buffer to soften the impact. And even that buffer is incrementally becoming thinner and thinner. But the Central Banks cannot even fix the fiscal issue. Certainly, they cannot fix the much bigger issues in the global agenda. Francine what do you worry about in the global agenda . When you look at supply chains, are they really being tested or is it just tough talk . Wolfango i think there is a mix of the two. We have already seen decoupling. Google is now producing u. S. Bound motherboards in taiwan. Foxconn is producing more and more iphones outside of china. Companies are adapting themselves to the new reality. ,ts challenging, its costly but i think it has been signaled for a very long time. This trend will continue for the foreseeable future. Francine how much do you worry about the middle east . The region seems much more unstable now and that could have a huge impact on oil prices. Wolfango we dont believe in a conflict between iran and the u. S. Chances of that are very low. People are talking about an accidental war, wars do not happen accident, to my knowledge. Sanctions will continue. Maintain ae the u. S. More active role in patrolling the streets of hormuz, but nothing more than that at the end of the day. Francine thank you. Wolfango from teneo intelligence stays with us. Has weighedump legality of pushing Jerome Powell out of the fed chair. Later, we bring you the fomcs latest policy decision followed by powells news conference. Thats coming up, this is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. But get straight to the Bloomberg Business flash. Boeing and coming back with a showstopper of a deal at the paris air show. British airways owner iag signed a letter of intent for 200 of the grounded next jets. Billions. S, values at it gives boeing the opportunity to turn around the narrative of the biggest source of profit. Walshchairman william personally vouch for the planes, saying he would get on board tomorrow. Christian sewing is planning sweeping changes to deutsche ,anks top management considering replacing the chief of finance and the Investment Banking head. He may takened control of the Investment Bank on an interim basis while the lender searches for a permanent successor. Plan for a new cryptocurrency faces angry pushback from lawmakers. The u. S. House Financial ServicesCommittee ChairwomanMaxine Waters urged the company to Halt Development of the token. Some are questioning if the coin called libra would have sufficient oversight. Francine today marks the end of the ecb form and portugal, following the end of Mario Draghis tenure as ecb president this autumn. Though he is on the way out, he has not been holding back. In the absence of improvement such that the sustained return of inflation is threatened, additional stimulus will be required. We remain able to enhance our foreign guidance by adjusting its bias and conditionality to account for variations in the adjustment class half of inflation. Path of inflation. I just said that we are ready to use all of the tools to fill the mandate and we do not target Exchange Rates. Further cuts in policy and mitigating measures to maintain any side effects. We see that the path of conversion is moving more slowly than expected. Will use all the flexibility within our mandate to fulfill our mandate. Bloombergs matt miller is in portugal where he is joined by guest. Over to you. Here with one of the founders of this European Central bank. Before we get to the successes you have achieved here, i want to ask about the things mario draghi said. First off, that he does not target the Exchange Rate. We take him at his word, but it must be important as an economist to think about the value of your currency. Our approach was always that the Exchange Rate is one of the most important variables in the an open especially in economy, as the euro area is. It as an exotic this element or try to influence ementhis is exogenous el or try to influence it, this is different. I spoke to peter pratt, who was also chief economist. He said trump started with this trade war that started this trade war, we are dealing with these issues because of the trade war. Do you agree . Trump is extending it is not a trade war, it might be. But these trade tensions to the currency field, another field for battle. I think this is very bad. If a a big difference central bank is manipulated the Exchange Rate, like the chinese did. They intervened heavily, buying dollars, keeping the Exchange Rate down. Or Exchange Rate changes which are the consequence of modern policy. This makes a different big difference. The ecbs 20 Year Anniversary can be considered a success. We all treat of the central bank as if it was normal and has always been there, of course, it hasnt, and you know that well because you started. What do you think about it now . Does mario draghi have the tools and credibility to reinflate this economy . He has proven he has the ability to do that. But we would like to point to the fact that this is still the youngest central bank in the world. When we started in january, 1999, this was a big success. There was so much skepticism about the start of this institution. And if you look at the data and inflation expectations, nothing happened. Such a tremendous regime shift in the world of central banking, especially in europe, and the euro arrived extremely smoothly. I think this is a Great Success which could not be forecast. Francine is it possible matt is it possible to be repeated . We have a story on bloomberg which is that facebook is starting to start their own currency. It sounds farfetched, but they have 2 billion users. And you helped to start this Euro Currency which we all use today in 27 countries. I would not put crypto on the same level. This is competition, this is market driven. Cryptocurrencies, etc. We have still to see how they compete with currencies issued by Central Banks. What you need for a currency to be a success as credibility, trust in the longterm existence , and the stability of the currency. I think cryptocurrencies have still to prove they can do that. Att let me ask you about the next moves you expect from mario draghi. It seems the market is already pricing in a rate cut. Will he bring back quantitative easing . Will he change the rules if he needs to . You could observe from his that a change in , wedirection of commitment will see what the council will deliver. Matt thank you for your time. G, one of the founders of this institution, celebrating its 20th anniversary. Francine thank you so much, matt miller at the ecb forum in sintra, portugal. Lets get back to Wolfango Piccoli from teneo intelligence. Haveis the concern you from either the way to ecb is set up for the eurozone . We finally need a Banking Union or Capital Markets union . Wolfango my concern, coming from the political side of the story, is the more mario draghi does, the less are the chances all the things you just mentioned, which are badly needed, a Banking Union, eurozone budget, whatever fiscal capacity, will come. We have seen this in 2012. In the sense that you take off the pressure by intervening in and some politicians get distracted, lets put it that way. The drive, the impetus to push forward, which is already a difficult impetus given how difficult politics are in multiple countries, but the moment you believe the pressure, the chances to get progress are basically close to zero. Francine peggy so much. Wolfango piccoli from teneo intelligence thank you so much. Wolfango piccoli from teneo intelligence stays with us. Bloomberg has learned President Trump explored how to remove the federal chairman. We bring you that story next. This is bloomberg. Francine as the fed meets today , markets have conviction it will cut rates this year. Investors are refreshing their portfolios for a return to global dovishness. With the details is bloombergs dani burger. Dani the qe trade is back on, given rocket fuel ecb yesterday about saying they would cut rates as the first line for added stimulus. So as we look into what people are doing, we are seeing a lot of the qe favorites. That includes debt from spain, italy, and france. We had a french 10 year bonds hit zero, even though yields are coming back. But curve flatness, that tends to be how these take shape. We are also seeing the return of tina. We are seeing equities do well, but especially u. S. Credit. Finally, playing defense. We are seeing the u. S. Dollar do well and bets that the dollar can survive the latest cut cycle. That means gold is doing better as well as defensive sectors, francine. Francine thanks so much, dani burger with the latest on what we could see. Where are getting some big news at of nikkei out of nikkei. Thinking about shifting 1530 of output from china. This is because of possible supply train supply chain concerns. Up next, a roller coaster ride for investors. We talk luxury. This is bloomberg. Xi will sitump and down. The u. S. Ways new sanctions on turkey. Asks lawyers about. Willieof confidence, walsh says he gets on board a max tomorrow. 2 . Ation rates falling to a little anxiousness on the markets. As expected, it is coming in at 2 . On whothat will depend becomes the next Prime Minister. Yesterday we had the debate with the tory candidates left. Fromt breaking news nikkei. Citing several unidentified people, apple is asking suppliers to evaluate the cost implications of shifting 15 to 30 of its production from china to southeast asia. Lets get back to the director of research. We understand this is because of trade tensions between the u. S. And china. They are worried they would escalate. This has not been confirmed. Majoryou assume any company with a presence in china would do the same . It is already happening. We were discussing it before the news came out. Ofgle is moving production motherboards in taiwan. It is not just about trump. Are on china. This will not disappear. Companies have to factor that in. If china is on the losing side, who wins . Going to do better on this front. It is positioned to profit out of that. Thailand, the demography is not great. The philippines, not a match because the environment is not the Business Environment is not great. Shifting 15 ,e, 30 away from china, do i bring them in because the spaces lower . You plan for worst, but can you ring them back if you need to . Wolfango it depends industry to industry. The companies have realized the issue of trade is salient, it will remain on the agenda for the future. They cannot take that risk. You move it elsewhere and you will see it later on, depending on sector on sector. Not taking action now is somewhat foolish. Francine you would look at alternatives or do you think they should be doing it . Wolfango they need to do both depending on where they are, which items we are talking about. Not everything has been sanctioned. Options is a for must. Secondly, you might need to act if you are in the sanctioned list. Francine thank you. Wolfango stays with us. The past year has been a roller coaster ride with escalating trade tensions and uncertain demand picture in china. Against the trend, a Company Continues to manufacture its range exclusively in italy. Asia has been a key driver of sales, accounting for 40 of revenue. I am delighted to be joined by the chief executive of salvatori ferragamo. Give me a sense about how much you worry about the trade concerns. Does it hurt the demand for Luxury Products . Do you have to look at your supply chain and how you move things in and out of countries . For giving me the opportunity of touching this point. This is a peculiar moment for the industry in general and the as heavydustry as much tension between the market. Lucky enough, considering 100 of our supply change is based in italy. For the time being, we have not been affected. There is an interest from the who areconsumer delivering a cer