Fall to the lowest since late 2015 as Jerome Powell opens the door to a july rate cut but investors ask, will he cut by 50 basis points . Packed, governor kuroda due to speak imminently after keeping policy unchanged this morning. The yen holds it strongest level against the dollar any year. Economists expect the bank of england to strike a hawkish tone but hold steady on rates as the candidates for next Prime Minister are whittled down later today to two. Good morning. Matt we are less than half an hour from the european open and i want to show you a quick chart of gold. Ands a hike in your chart we are at the highest level we have been in half a decade. 4. 70 1340 dollars. When the fed cuts rates, treasuries look less attractive as a competitive asset to gold and that is why you get the lift in the price. Lets look at the futures. We are looking at games. Plea gains. We didnt have massive rallies in u. S. Stocks. He had rallies in bonds around the world. I see green boxes, but we do have now a lift in futures. Both european and u. S. Futures. Dax up. 5 . Ftse futures up. 4 . Now to the exciting gmm. Im sure it will be a green day. Anna green is the color. Todays Program Brought to you by the color green. The asian equity session moving higher more than 3 in china, up nearly 8 in hong kong. Reshuffledo with a but it was the fed. The fed fire that has been lit under equity markets in the Asian Session. Under risk assets, generally. Can not in the move mood to be patient anymore. The door is now open to rate cuts which sent emergingmarket currencies higher. On the currency side, weve got the dollar weaker and the yen going higher. No change in the boj. Stories Interest Rate at play and emergingmarket currencies, going higher. Interesting to see norwegian krone as we talk about rate differentials there. On the other side of the gmm, lingering on a green gmm because there is so much green to talk about. Appetite for sovereign bonds today. When you put that alongside stocks. I want to focus on commodities. Wti and brent crude have been lifted by the fed but also by the dwindling stockpiles. Keep an eye on iron ore and the valet story. Word newsa first update with debra mao in hong kong. Debra the Federal Reserve has dropped its patient approach to Monetary Policy. It signaled it is open to lower Interest Rates as early as next month. That would be the first cut since 2008. It cited increasing uncertainty around the trade war and its impact on the u. S. Economy. Officials are starkly divided on the path for rates with just eight of 17 penciling in cuts by the end of the year. Of policy show many participants believe some cut in the federal funds rate would be appropriate and a most likely scenario. Though some artisans wrote down policy cuts and others did not, our deliberations made clear the number who wrote down a flat rate cap agreed case for additional accommodation has strengthened since our may meeting. Debra the bank of england is seen leaving rates on hold today but governor mark carney made sure to repeat his warning that rate rises are needed to control inflation. It was at odds with investors and other major Central Banks. The boes forecast remained rooted in the assumption of a smooth brexit but many investors see a bumpy road ahead. The Trump Administration is reportedly telling lawmakers iran has links with al qaeda dating back after the 9 11 attacks. That is according to the new york times. There are concerns on capitol authorization would be used as legal cover for action against iran. It allows the use of force against those behind september 11. Global news 24 hours a day, onair and tictoc on twitter, powered by more than 2700 journalists and analysts in more. Han 120 countries this is bloomberg. Matt thanks very much, debra mao in hong kong with your first word news. Top names in advertising around the French Riviera of this week for the biggest annual gettogether. Is lapping up the sunshine and joined by one of the biggest advertisers in the world, unilever. Thats right. In thisy to be joined beautiful setting. Bonjour. You are here on a mission. Against theseght fake advertising, making empty promises and not taking any actions. This is something you call whitewashing. The real mission we are here on is to land the point that business can be a force for good in the world. Business and our brands can take meaningful action to address some big issues the world is facing and at a time when trust is breaking down in society, it that promises our brands make are backed up by real action we are taking in the world and the community. Caroline obviously, this theudes some brands within unilever growth. How much of your portfolio of brands actually have real purpose at the moment . Alan at the moment, weve pulled out 20 brands in our portfolio across multiple tontries taking action address an issue in society or the environment, and sharing that message with consumers. Those 28 brands are growing much faster than the rest of our portfolio so although this is good for the world, it is good for our business and driving 75 of our total growth. We are an important part of unilever and our portfolio. Caroline you were talking about a brand yous, obviously want to keeping your portfolio because you think it has got it is a model example of purpose. Ben intendi jerrys is a fantastic business. It is a brand that sits within and theyer unilever have championed some of the biggest social issues in the world. At the moment, they got an Interesting Campaign running around criminal justice and equality in the u. S. Criminal justice system. At a time when many states in the United States are legalizing cannabis, what they are discovering is it is the already rich people who are profiting from the legalization of cannabis while many in minority communities remain locked up for offenses. That is what they are campaigning for now. They are a great model. which caroline which brands would you divest . Something thatat does not have purpose . Alan the brands we are enjoying great growth on our black brands like dove which are taking action. The brands inll our portfolio a period of time to figure out how they can make a positive contribution to society, say a couple of years and at the end of it, some may have contributed positively and some may not. The ones that are not able to find a higher order role they complain may end up better owner by someone else. Trump will meet his chinese counterpart next week at the g20. Toyou think this is going bring down the trade war . How has unilever been affected . Alan one of our characteristics uncharacteristically diverse internationally. 60 of our revenue comes from emerging markets. We are used to geopolitical uncertainty. It is something we manage every day. By and large, the more free trade there is, the better it is for economies so people benefit our trade as well as business. It is certainly better when there is liberalization of trade and we hope that would continue across all geographies. Caroline aluminum, for example, affected by steel tariffs . Alan that is an immaterial consideration for us. That is a nonissue. Caroline are you worried about the path brexit is taking . Same point i was making earlier. We are broadly diversified. Brexit is an issue we are managing. Our concern is to make sure britain is able to trade freely with europe and we will manage it. Caroline are you interested in the current race for Prime Minister . Alan of course. Caroline there has been a lot recentlysh in cannes against social media. How does a group Like Unilever deal with this backlash, hate speech on social media . Alan we have partnerships with tech platforms and if you spoke to them, they would say unilever has been one of the companies that the forefront of pushing them to raise their standards on and privacy, on fake ids, when we have push them, theyve taken action. , we this week in cannes announced the creation of an alliance for responsible media. The biggest advertisers in the world, the biggest agencies in the world and some of the tech platforms have come together to find common ground, to make sure these tech platforms keep their act as clean as they should be. Thank you very much. The unilever ceo live from the cannes festival. Anna thank you very much. The subject of central banking, which is moving markets in the last 24 hours. Jerome powell says he is ready to move on rates but not yet. We are asking the question on mliv how low can Central Bank Rates go . We will discuss that next with mark cudmore. Bloomberg radio is live on your mobile device or dab digital in the london area. This is bloomberg. The projections of appropriate policy show many participants believe some cut in the federal funds rate will be appropriate in the scenario they see as most likely. Policyrticipants wrote cuts and others did not, deliberations made clear the number that road town a flat rate cap agree the case for itional commendation accommodation has strengthened since may. Anna Jerome Powell speaking on the fed rate decision. Lets get to our markets conversation with mark cudmore, our bloomberg mliv and aging editor. We talked about whether it would be possible for the fed to produce a dovish surprise. It seems they did, judging by the gmm scream this morning screen this morning. Mark absolutely. Jerome powell has done a wonderful job in the immediate delivery. Every asset is doing well and he managed to get this movement in oversized reaction in equities. It is impressive getting the moderate line. Skew inted, there was a the short term for a positive surprise from equity markets from risk assets because it has been so positive at the moment, people want reasons to buy. Maysecondary action, which come in after a few days, well be negative. What has changed . They are open to appropriate action rather than being patient but they are behind with the bond Market Pricing which cut buta 25 basis point there might be more than 25 basis points. Spent time analyzing, they are not confirming what is priced. Overall, risk assets will ease off these gains in the days ahead. We had core cpi of 2 in the u. S. And everyone was complaining. 2 s gut growth of more than on an annual basis, unemployment at an alltime low. Why on earth with the fed be cutting by 50 basis points . Mark that is a great question. The reason is they are trying to be slightly proactive. We are seeing highfrequency data. A sharp deterioration from where we were in before. Even on the unemployment site side, both have been quite poor. The pmis turned down sharply. Trade numbers turned down sharply, manufacturing deteriorated. We are seeing a consensus that the highfrequency data is turning down. Everyone is clear we are getting a slowdown in growth but how much . Some in my camp say that unless there is a rapid change on the trade war, we are headed to a recession in the u. S. No one is debating that we will definitely have a slowdown in the second half of this year. Whether that warrants 50 basis points is debatable that no one can debate the fed will need to act this year. Anna trumpian uncertainties abound for Central Banks. In the yen, we see the yen strengthening. The same old line from the bank of japan in contrast with the dovish tones elsewhere, driving the japanese currency higher. Japans 10 year bond futures advanced to an alltime high. How strong do you think we get to the japanese currency from here . Mark overall, it can pick up momentum. The yen has been that a multiyear high on a trade weighted basis. People havent noticed how strong it is versus the dollar because it hasnt seemed so extreme. Now that we are turning to a more dollar bearish environment, we see dollaryen come down and that will get traders into the trade. The yen has the potential for a lot of strength over the next year. Tortterm it is impossible predict. I have no idea where it is going on the next 72 hours but over six months or so, dollaryen levels like 100 are not particularly ambitious. He could go below there over the next six months. Gold if you are asks about a viewer asks about gold. A decade high but where do you see it going . Blue . Mark his is the time for the gold trade. This is what you do at the start of the easing cycle. Weve seen this before and gold has broken that technical level. There is a lot of upside in the gold trade. Matt mark cudmore, bloomberg mliv managing editor joining us out of singapore. Tomorrow, we will speak with richard clarida, the vice chair of the fed. That is a conversation you dont want to miss at 11 30 a. M. London time. Minutes from the open and next, a look at your stocks to watch this morning. When you need to know to get prepared for the market open, including sap after the u. S. The rival Software Maker oracle reported a return to sales growth. What does that mean for the german Software Maker . This is bloomberg. Matt welcome back to this is bloomberg. Bloomberg markets the european open. Lets get stocks to watch around the bloomberg newsroom. Dani burger, paul jarvis, and , focusing onern miners. We see gold miners likely to open higher, surging past a 5. 5 year high this morning. Miners could go higher in the sense we have iron ore prices up more than 100 a ton. Rio tinto, saying they have to cut their outlook but on the other hand, we have valet coming back on or online. Anna lets talk about the retail space. Paul, weve got some car phone talking. We have two things. The good and the battle retail. On the bad side, dixons car phone seeing significant losses the changing mobile market where people are renewing on a different contract. Dixons car phone say this will at least breakeven within two years, however the shortterm impact is going to weigh very heavy on the share price which is already down 35 in last year. Dulelm is the opposite. They have seen good trading. They are upgrading their profit estimates and as a result, shares will perform very well. They could become the Top Performing stock in the ftse 100 in the coming year. Matt dani, take us out on sap. Likely to rally today. Its usp or oracle returned to sales growth. Oracle shares, up 4. 5 overnight. Anna thanks, everybody. To geto on bloomberg those stories. The european open is next. This is bloomberg. This is bloomberg. Anna welcome back. One minutes until the start of trading this thursday morning. Futures are positive, the handover from asia is positive. Chinese stocks, up substantially this morning. Losing, very much a standout moved to the downside in todays markets in the Asian Session and the european session. Against the. 4 greenback. The yen gains against currency. Focus on the twoyear and a big drop in yields. The 10year dropped below 2 yesterday. Gold prices on a tear. Strength in the prices, it seems the opportunity comes for these assets decreases as we talk about rate cuts. Futures look like into the european session and it looks positive at the start. Of the trading day. Dax futures up. 7. Ftse and cac up shy of a percent. Will we see that materialize . Standout fx moves will be in focus. The strength in the pound, we know what that doesnt u. K. For equity markets at this story is different because of the fed fuel under equity markets globally. The euro is up. 4 , the yen stronger and dollar is a standout faller today. The ftse 100 up. 4 out of the gate. The spanish that up. 5 . Again, looking for risk on assets to benefit at this time when the fed is opening the door to Interest Rate cuts. We dont know by how much but will find out into july. From a sector perspective, weve got little in the red. That is the topline story. Financials in the green, utilities, telecoms utilities in the green the telecoms a slight area of red. Consumer discretionary is the same, industrial, health care. This rising tide is lifting all boats. Matt up 504 winners. Screen on the stoxx 600, only 77 are down. Sap is up there. Oracles earnings come possibly lifting sap. We talked about the miners doing well. Bhp billiton is rising up today in we talk about oil rising terms of brand and wti. Total is helping add to the stoxx 600. On the losing side of the ledger, youll see novo nordisk, down 1 this morning. Otherwise, you dont see a lot of bigger movers. Novo nordisk was downgraded to a hold at deutsche bank. 25 but because it is such a big stock and i have this arranged in points, that is why you see it is the second spot. In terms of dividend spots, car for, lyle, eight stocks trading ex dividend this day but not a huge weight on the index. Anna lets talk about the markets more broadly the morning after the fed. European markets opening broadly higher. Asian stocks climbed and treasuries extended gains after the fed struck a dovish tone in its latest policy statement. Joining us now in studio is the head of bearings investment institute. Good to have you with us. Nice to see you. Rate cutss open to but there is a great deal of uncertainty on the political front. What kind of rate expectations do you have . Clearly rates are headed lower but it is apparently a greedy bond market asking for more. From my perspective, if you look at the data we have seen lately, there has been softer data but still a pretty resilient u. S. Consumer driving the overall growth in the economy. That is why the fed is no risk of recession soon. All eyes are going to be on osaka next week and whether or not the trade war starts moving to a lower volume of background static or something broader and more troubling. Anna he what is your expectation for the fed . One in july, september . Think one hike is baked in. Im sorry, one cut. You got me confused. I think one cut is baked in. If we do live in a world where they have to cut two more times between now and the end of the year, they will be a pretty ugly environment. That is not my base case. Matt maybe we are getting confused because it doesnt make sense. We all saw the canadian Inflation Numbers yesterday and that will likely carry through, so we will have two plus Percent Inflation in the u. S. Two plus percent growth in the u. S. , unemployment that is 3 , basically now. Why on earth with the fed cut rates . Why wouldnt you just continue to hike and normalize policy . I think im probably closer to your side than what the market is saying that the case is you have seen some headwinds to inflationary numbers. The fed has a growth mandate and price stability mandate. Prices meeting