Surveillance. I am Francine Lacqua. These are your markets. A lot of these european stocks higher at the opening. Now they are down a touch. Lets call it flat. I am looking at oil. A lot of the picture is contingent surrounding iran so you see a little bit of a lift up for american crude. What is going on with these european markets and you are seeing it reflected in yen. Yen is the one story that is the haven. Any risk attitude is reflected on yen. European stocks, a lot of investors are looking at these amounting into political risks. Ifore getting some figures. The german index, 97. 4. We get up around we get the with hernan a cristerna. Lets get to the bloomberg first word news in new york city. The drumbeat for Federal Reserve rate cut is getting louder. Minneapolis fed president says he called for a reduction at last weeks meeting. These comments reinforcing expectations the central bank is on course to cut rates. Trump says he would be able to demote fed chairman if he wanted to even though he denied saying this. The president reiterated he is happy with powell passat actions. Actions. s trump says the economy is good enough. Boris johnson repeated his insistence the u. K. Must leave the eu by the end of october. He says the split will happen if he becomes Prime Minister. His campaign suffering a setback after police were called to his home amid reports of a heated argument with his partner. Johnson has refused to comment. Im learn issuing its third profit warning in a year. Facingpany blaming costs. Xtra fees of a euro amount the carmaker is investigate is facing investigations over excessive pollution. It sees this years profit being at a similar level to last year. El dorado resort is reportedly buying Caesars Entertainment. That is more than a 30 premium on fridays close. Thinking of moving to saudi arabia . Ae kingdom has just opened up residency program. It is designed to attract Foreign Investment. It is going to cost 213,000. The residencies will allow foreigners to buy properties. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. You. Ine, back to francine trump says the u. S. Will impose major sanctions on iran today. He abruptly called of airstrikes in retaliation for the downing of a navy drone. Its continued threats and acts of aggression against israel, our allies, in the arabian gulf and against u. S. Personnel and assets across the middle east are not signs of a nation seeking peace. On monday there will be a set of new sanctions. I am not going to go to war it if it is it will bleed will be obliteration like you have never seen. No preconditions. Francine go not month the trying to figure out what these sanctions look like given the are very few targets left. How is iran taking these threats . We have had one response from a Navy Commander saying iran is prepared to shoot down more u. S. Drones if they enter iranian airspace. Whate here are wondering else is there left for the u. S. Government to sanction. It is going to be important to see what the u. S. Statement guarding sanctions will contain. I think the iranians will respond accordingly but given what we have seen so far in the iranric, i cannot see welcoming any overture from the United States to talk while it is increasing pressure on irans economy at the same time. Francine what would it take to get iran at the talking table . The talking, if table existed it existed back in 2014 and 2013 the United States was present. From irans point of view, the Trump Administration helped to renegotiate help to the redefine. Putting a huge amount of pressure on iran and almost punishing iran for things that are outside the premises of the nuclear deal. Iran has said that if the Trump Administration rolls back these sanctions, if they reserves if they reverse their position before the deal, then iran will think about talks. They have also said it is a reversible situation that that will require the trump initiation going back to the deal that already exists. Iran would expect the American Government to compensate iran for damage done to their economy within the past year from those heavier sanctions that have been imposed. Francine golnar, thank you so much. Lets keep the conversation on geopolitics and the markets. Joining us now is Holger Schmieding. Thank you for joining us. Iranian economy is crippled by sanctions. What else can the Trump Administration do . It depends on what the officials find major. We could end up with an exhausted list of individuals and companies that they would put under sanctions and say these are major set of sanctions but because they have already inflicted damage on the economy, it will not do much. I would be interested in looking at what they can do if they will do anymore on banks because that is the week links for the economy and something the company the government has struggled to fix. This is an area that we need to be watching. Francine as far as i understand on iranian sanctions entities including banks and should and shipping sector. Is there anything else other than deeper sanctions on banks . , i am struggling to find struggling to think what else is out there. That is why dont allow the fact that they would add to this and say and describe this as sanctions when we look at it, we find is not adding much. Francine holder, what does this mean for the people which is extremely important . What does it mean for oil . Unless there is a hot or involving iran and saudi arabia, the impact on oil prices should remain modest. What i am watching most is whether sanctions would have a lot of third country impact. That is if say in europe or china anybody who has any links to iran would be defective punished by sanctions. That could be a significant one. Using the port of iran itself. Francine this is a great chart looking at some of the iranian wti on futures as compared to some of the sections we have had over the last six months. How do you stabilize allies for the region . The more the iranian hardliners are pushed to the edge, you expect to outcomes, one is saying we are going to talk. Two is, more and more of the limited but escalating attacks. That is unsettling. Governments, you talk to people across the board and they talk about his war coming . Francine what is the potential for war . This would be worrying on a number of reasons, but is it a 5 chance . 20 chance of something ugly happening . Officials that we have talked to put it at very low risk. Both sides are watching each other carefully. Both sides dont want to escalate. Both sides want war. There could be accidents and lets say, as we saw last week, when u. S. Forces were ready to would bean, and what the reaction . Daily in yemen sophisticated attacks, daily attacks by the yemen rebels targeting saudi oil, power plants. It is heading in that direction. Andcine alaa shaheen Holger Schmieding stay with us. Up next, a rebuke to president erdogan. That stories next. Story is next. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. I am Francine Lacqua. The lire has a just after the candidate in a rerun to Mayoral Elections. The march had been overturned lost. A party narrowly he spoke after the victory positioning his when is a win for democracy. You have protected the reputation of democracy in turkey for the whole world watching. You as a nation have protected our tradition of democracy that goes back 100 years. Thank you, he stumble thank you, istanbul. Francine joining us is alaa shahine. How weekend izzy by the mayoral ex election how weekend izzy by the Mayoral Election. He lost all the major cities including ankara so it is a significant point in a 16 year rule for the man to have lost. He is weekend because because it stumble is a turkish commercial hub. There is a network of patronage. It is too early to tell if this would have an impact on erdogans ability to stay in power for the selection or beyond. Francine he has consolidated so much power so it has shielded him. He is weekend domestically, can he bring back some of the power . It is too early to tell. This is someone who has hardly lost election in 16 years. This is one that he is lost not only once but twice. Look at the margin. 800,000. Sked for iran, this is a crack in his structure. It is a Mayoral Election, fine, but it is significant. Francine what does it mean for investors . It is a very encouraging sign. ,t is still sort of a democracy that turkey is not going down all the way toward putin. The institutions in turkey have weakened. Their yearning for the european lifestyle and political system is still there. That i find pretty encouraging. Francine he is meeting President Trump at the g20 because the u. S. Says it will impose sanctions because they bought a russian antimissile Defense System. That is the next thing coming because we see both nations have been at odds. No one is willing to compromise. Turks are saying no, the missiles are not coming. U. S. Tightenedhe was withs on turkey the arrest in turkey. The markets were on the verge of a crash. This is something that definitely erdogan is going to try and avert. Francine this is looking at emerging markets. How much does a how much of a break does turkey get . Turkey gets quite a break from fed policy. The financing is there, it just depends on turkey to make it attractive enough. With the election that we just had, turkey has lost a little step toward reestablishing credibility and confidence among investors. It depends how erdogan reacts. If he acts imprudently, we have a problem. Francine thank you both for joining us. Business falls from a mother prior. Germanys largest economy with this is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua. Lets focus on europes biggest economy. Business in germany drops with the ethernet index falling to 97. 4. Fuest. Us is clemens for. To me about the ee it doesnt mean the worst is not over. How do you see the German Economy develop . Clemens it could get worse. Maybe not much worse but we see the weakness in manufacturing continues but this is now spilling over to service. We see some industry related side effects. A weakening so this is happening having an impact. We also see the construction seems to have peaked. This is a sector that has been booming for a long time. Here, the index has declined a little. But a strong is trades so we have had wage increases and people are consuming. The rest of the economy is weak. Francine do you think the ecb should roll out fresh stimulus . Clemens it is justified to at least postpone any tightening of Monetary Policy. I dont think further easing will help very much. Mario draghi has pointed out that. The government needs to use other instruments. Germany should cut corporate taxes. I dont think Monetary Policy will save us. Francine if it were to restart qe, should the ecb need to lose on Government Bond purchases . Clemens that is not a technical question, can it maintain the purchase key should it by more at some point . We will have to do some restrictions, otherwise, it will not work. There is no hurry to return to quantitative easing. Candyne how quick Germany Economy bounce back . Clemens that depends on the world economy. We have some domestic issues. That dieselgate would be over at some point. That may not materialize and there are some policy issues in germany. We have uncertainty about Energy Prices and other challenges for the German Economy. It also depends on how Economic Policy behaves. Francine it was very clear that draghi said ecb was ready to act. How much leeway do they have . Clemens they would have a lot of leeway. The central bank can do a lot with its own money. It might even buy equities. We are not in a situation that is close to the point of if worse came to worse. It will open up the way for potential easing. Say you get the next meeting that they would keep rates low at current or lower levels for longer. I dont think in july they will have to do some easing. Quickly, clemens fuest, when you look at concerns over germany. His president job and president if President Trump and president xi meet at g20, does it make a difference . Tariffs and trade conditions are one burden on the economy. Agreement toe return to more reliable rules and more longtime rules. Francine thank you so much. Coming up, 80 of a 10 billion m a deal has been in the u. S. But where next for global mergers and acquisitions . 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. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Francine washingtons warning to iran. U. S. Prepares to slap new sanctions on to run after President Trump calls off airstrikes. Pompeo heads to the middle east. Election shock in a stumble. President erdogan is dealt a stunning blow. Unlucky. E it is a bumpy ride for daimlers new chief executive is the good morning, everyone. This is a bloomberg surveillance. I am Francine Lacqua. Lets check in on what is moving the market. I am going to pick it up where you left off. Daimler is down more 4. 5 . This is a third profit warning for the year over at over emissions issues. Lets do a read across across the markets. That section, autos and suppliers, are the biggest losers. Attack they cyber faced in early june which affected their Information System across a number of countries. Materially impacted financial results. To the upside, or stead, one of the biggest gainers. It is one of the worlds biggest suppliers of wind energy. Buildinggoing to be this off the Atlantic Coast close to atlantic city. Francine Annmarie Hordern there with some of the major stock movers. Lets get to first word news. The u. S. Plans to announce major new sanctions against iran. This just days after trump called off airstrikes at the last minute after the Islamic Republic shot down a navy drone. The president says he is willing to negotiate with tehran to ensure the nation never acquires nuclear weapons. I am not looking for war and itthere is, it will billy will be obliteration like you have never seen before. You cannot have a nuclear weapon. If you want to talk, good. No preconditions. A stunning blow for president erdogan his party lost rerun of it stumbles of it stumbles mayoral race. It is a stinging indictment of after the president refusal to at to accept a defeat. The reserve bank of india governor resigning. Bank he isntral unable to continue his role at he cites unavoidable personal circumstances. He loves he is leaving the Monetary Department at he joined the r. B. I. In january of 2017. Daimler issued its third profit warning in a year. It is blaming the regulatory scrutiny. It is facing extra fees. The german carmaker is facing investigations in europe and the u. S. Altar allegedly expensive pollution. It sees its it is seeing this years profit at a level similar to last year. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine . Francine lets focus on mobile m a. My next guest says architect been driven by transformational deals in north america. He says they are 25 deals worth more than 25 billion. What deals can we expect for the rest of 2019 . , he leads thea team around the world focusing on m a he joins me this morning. Always great to have you. When you look at exactly what is going on in the m a deal, is it because people are worried about where revenue comes from so they think bigger is better . Companies that can find synergy and value . Hernan m a remains the future of the markets. The dialup with their clients are very good. Our clients want to do deals. We look at the levels of activity in the market, i think it is very good. The market is down 12 or so. The first half of last year was the best in m a markets. The market then decelerated last year, something that by the end of the year, we are coming pretty close in terms of activity to 2018. What is interesting to break down the activity, where what we find is essentially volumes in north america are flat. The volumes in europe and asia are down 30 . Furthermore, francine how do you explain that . If you look at overall deal counts, whether it is north america or the rest of the world down 25 , the issue is there is been a vintage of transformational deals. With values greater than 10 billion which has been dominated the u. S. So far this year, 25 deals rated value. 5 billion in francine what does it mean . M a that you do for the bad regions and m a that you do for the good reasons. If you look at geopolitics, does it further them into more m a or less . Hurco the critical difference is the regulatory challenges to m a are significant. The reason why we see so many deals in the u. S. Because the challenges francine because of the supply chain . Hernan industrial policy, trade wars, the overall Regulatory Environment is very complex to do over the border deals. Francine how are they funded . These record low Interest Rates and the fact we had another bout of central bank the viciousness, does it help m a . Hernan what i would say is another key aspect supporting market is it will prices are very full. If you look at deals that can be funded using stock currency, that compensates for market prices. It