What will the imf chief bring to the role . Treasury yields a slide to a low as bets on global using low. President trumps new nominee for the fed are likely to support rate cuts. Pimco says the rally in risk and haven assets has the scenarios priced to perfection. So how much longer can they coexist . Welcome to the program, this is the European Market open. 29 minutes ago until the start of the equity trading day. Lets check futures. In terms of u. S. Futures, they point to something a little weaker at the start of trading. Ftse futures seem to be pointing a little higher than the rest. Lets have a look at the gmm function to help us understand where we are in asia. Recommence weakness in asia and disappointing data in terms of the manufacturing sentiment numbers. Pmi coming through. The carney is talking aboutrecn widespread a slowdown in the Global Economy in the policy response that might be needed to tackle that. All of that is at the center of things for investors and calling for markets to readjust. That as a result, we see markets selling off equity. Lets have a look at the other side. You will see money coming out of equities and going into fixed income. Context of treasuries, we see yields coming down even further. And as part of those concerns about Global Growth. And from a european perspective, overlaying that with news of Christine Lagarde. What does that mean for quantitative easing . What does that mean for future dovish policy . See that the italian, german, and other european the bond markets catching a bid. Lets leave the markets there for now. Lets get a bloomberg first word news update. President trump has announced his latest nominations for the Federal Reserve board. Christopher wallers director of research at the st. Louis fed and was previously a professor of economics. Annwhile, judy shelton is informal adviser to the president and her unorthodox views could attract opposition. Struggling to recover after suffering its worst reaction to an opec meeting in more than four years. Concerns are overshadowing the decision to extend output cuts for nine months. Energy minister tells us opec and allies will respond to any disruption. The market can change very quickly, as can situation and shall production. Nobody would guarantee today that the supply could grow ough would be maintained the supply growth rate would be maintained. Tothe u. S. Has beat england secure a place in the World Cup Final. Withdfought 21 victory england missing a penalty less than 10 minutes from fulltime. The u. S. Will play the winner of todays semifinal between the netherlands and sweden. 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. Anna thank you. Set tone lagarde is succeed mario draghi as the president of the ecb. Shall be the first woman to take the job and the first politician, having being that having been frances finance minister before joining the imf. Here is what her colleagues had to say about her. I have known lagarde for many years and am absolutely sure that she will be a very independent president. Christine lagarde is someone who we know very well in ireland. She will continue the policies of mario draghi. We believe she has all the necessary skills to head the European Central bank. I do believe that christine the broads experience. She knows how to address issues and will be very competitive committed. Joining us is the group chief economist at unicredit to give us his thoughts. Good to see you this morning. We sit here with this news fairly recent. A surprise, because before monday, there have been very different names in the frame. How surprised were you . Eric i was very surprised. Her name had been on the outskirts of discussions for a while because it was well known she wanted to come back and get a european job in the other, they are looking for a woman. We have had no female governor to the European Central bank, so she was always there, but i was surprised. Are you concerned about her appointment and her lack of Monetary Policy experience . Brings with her and of outstanding experience in certain fields from a great communicator. Fields, a great communicator. What do you make of that . Jay powell also did not have that. Erik he spent five years on the board before becoming chairman. In daily life, she is very intelligent, huge experience than a fantastic communicator who has run big communications. She knows how to deal with leaders. In normal times, she would be fine, im sure. But it is not quite normal times. An incredibly unusual set of Monetary Policy on the table right now. And she is not known to have ever engaged in a Monetary Policy discussion at the g7 level. For a smaller country to do programs with, but not these big ones. And if or when a crisis comes, without her rely on own educational framework or experience to sort the issues . Right, pointing out the Jerome Powell was on the fed before he became the chair. But both have a legal background, is the point out is making. I was making. But some are saying this be a healthy shift of power. Maybe she would be more of a moderator, driving on philip laid and his experience. Would that be a positive shift . Erik could be. And in normal times. But in a crisis, you need leadership. Leaves,oit coeure depending who take that position there executive board will really only be one person with serious background, educational and experience come in Monetary Policy. And he has only been there for a few months. Come intold very well a situation like when the ecb started when the chief economist was immensely powerful. You have the duchess central had beeno was good but running a small central bank to copy bundesbank, to put it lightly. They became very powerful. Time whenime into the his successor took over and the chief economist juergen stark was not as prominent. Draghi became more prominent. So we could be back to a time where they become a very important person. Anna do you think she will do whatever it takes . Erik i certainly hope so, if needed. And she says she will. But this is the crisis you could think about. What happens if a major country one day needs it. How do they deal with the ones of the board who are opposed . Again, she has led the imf well. We will see over time how we feel about her program and other things. And she has experience, she speaks well. But as an economist, i think you would like somebody who had been trained in Monetary Policy. Anna thanks for your thoughts. Nielsenlsen erik stays with us. Money managers are caught between assets. And bloomberg is live on your mobile device or dab digital radio. We will be covering the appointment of Christine Lagarde. This is bloomberg. Anna welcome back to the european open. 17 minutes until the start of equity trading. Futures are pointing tentatively higher. Tentatively higher this morning. U. S. Futures are flat to negative. We will be without the u. S. Later on today and tomorrow for independence day. Lets get a business flash for you. Deutsche bank is sounding out potential buyers for a wide range of unwanted assets. This as it lays the groundwork for its most dramatic overhaul in a recent history. It would be part of the german at lenders plan to cut unprofitable businesses. Tesla jumped in late trading after setting a new record for quarterly and deliveries. The carmaker handed over 95,000 cars to customers. That exceeds the previous bets said in the last quarter of 2018. It alleviates the worst fears about demand for teslas vehicles. That is your Bloomberg Business flash. Anna thanks so much. The u. S. And china may have reached a trade truce, but investors have plenty of others conflicts. Other pimco has word that markets are pricing the best and worst case scenarios. Or as they put it, heaven and hell. For heaven, a combination of policy the gives the business help, atra juice, for long trade war and impotent , atral bankers for hell long trade and impotent central bankers. Andre joined by mark kudlow unicredits group chief economist. Good to see you, mark. Lets come to you on this idea of assets at war. We talked about this for some time. There is very much this divided between which is right, equities and bonds. I think both assets can be right. It makes sense for bonds to price the recession earlier. Today,this great comment a traitor we are talking to was saying the look to the bonds or the equities . He said he looked to fx. You never ask a single trader, but as a group, they tend to get the right thing. I think that is probably right. Yen is at the low, dollar is turning over. I think that is the right to dynamic. I think we are going into a riskaverse scenario and that the dollar will start trading lower. Anna i dont know if you would put golden that camp with the fx crew. Lets bring this chart to your attention. This something you have been talking about for some time. The way stocks have been gaining human as we see manufacturing pmi falling. , it seemed an extent like stocks would follow pmi downward. Mark there are two great posts by my team rebutting me, saying pmi is little bit backwards. Anna he says they are never linked. Mark exactly. Unfair toing that is publicly rebuttal on tv without a chance to respond, it is not a binary index. I dont actually thinks it makes sense to do a correlation analysis on the linear input. So that is one thing. And the point has been made that labor markets are strong around the world but i would say they are a lagging indicator. We know that unemployment is one of the last to turn. Pmis still one of the best High Frequency inputs. And we have not seen a collapsing global manufacturing. It is something we did not even see and 2008 in 2008. Anna thats the thing. That is one of the things that makes people say it does not matter, because it has been going on for so long. Erik it is because of trump, right . Datadivide between hard and pmi is what we see with global clients all the time. If you asked how their books are and how is life, it is quite good. If you asked them about the future, they get worried. You see it when you break the pmi down into the present situation and the forwardlooking part. The forwardlooking part in expectations are even weaker. In this works on growth. Investment started to slow down so i am with you very much. Im not the guy who wrote wrote your who analysis. Anna i dont know if you describe it as bearish, but mark carney is raising a cautionary hand. This is what he had to say about Global Growth. Of tradetensification tensions have increased Downside Risk. To both u. K. And Global Growth. Way we conduct policy today is we have to deal with the impact of the uncertainty around those events and how they influence the behavior of households and businesses in financial markets. Anna mark carney sounding a little bit more dovish and then he has of late. Talking about what these banks can do in times of crisis. S raises question about questions about what banks can do to cushion themselves in crisis. Mark and i were having an interesting conversation with traders, some are suggesting the central bank state can save us. Erik Central Banks do run out of ammunition. But it is an illusion to think they have no more power. There are political restraints on how much you can do, but that moves with the crisis. More importantly, how effective are the instruments . What you are seeing now in negative territory and the tltros, even spain has negative lending growth. I think they have heard what howland draghi said, they are sounding more dovish than the forecast. The reason is they are late cycle and uncertain about trade. Anna their view of the world being challenged in a number of ways. Can the central bank save us, mark . Mark no, they cannot. And we saw this before in the last two cycles. The fed was positive powerless to cut the recession. Liquidity is not the problem, the problem is a complete lack of growth. I think that Central Banks are kind of powerless, is the issue. I think that is what Christine Lagarde might be an interesting thing. She will be out of the box and is not a conventional economist. She knows the political open tos and might be doing something extraordinary that might be quite useful. Anna being called upon to do extraordinary things. Eric is worried about what economists will do if they are not needed. Erik [laughter] groupthanks to erik, chief and unicredit and mark cudmore, our managing life editor. Live editor. Reach out to us and the markets live team. Are minutes away from the European Market open this wednesday morning. Up next, well take a look at stocks to watch. Sales at the u. K. Supermarket fell since its failed deal to buy asda. This is bloomberg. Anna welcome back, 7 54 in london. Lets get your stocks to watch from around the newsroom. Covering sainsbury and dani burger is focusing on cybersecurity stocks. Paul, lets go to you. Sainsburys firstquarter results really illustrate why the shares have performed so poorly, falling 25 . The retail sales figures are down 1. 6 . ,ll of the main divisions grocery, general merchandise, they are all weaker. Key is going, the to be the Capital Market in september when they will need to set out a convincing strategy following the collapse of talks to buy asda. I could mention one positive, jd sports. They are saying their figures will be at least in line with estimates. Those words at least will add something to the share price. Mark thanks anna thanks, paul. Dani burger, m a in cybersecurity . Dani broadcom is looking to buy and expanded to software and cybersecurity. This shows how rife right the industry is for m a. At others, all called higher by at least 3 today. Mark anna thanks very much. Bayersth mentioning, pay up for round of could be less than previously anticipated. European equity markets in general are expected to go a little bit higher at the start of the day. U. S. Features are flat to negative. This is bloomberg. Were the slowskys. We like drip coffee, layovers and waiting on hold. What we dont like is relying on fancy technology for help. Snail mail we were invited to a y2k party. Uh, didnt that happen, like, 20 years ago . Oh, look, karolyn, weve got a mathematician on our hands check it out now you can schedule a callback or reschedule an appointment, even on nights and weekends. Todays xfinity service. Simple. Easy. Awesome. Id rather not. Anna they minutes ago go until the start of cash equities trading. Beenandover from asia has negative, down by. 4 . A lot of week data coming through. Pmi numbers certainly a feature. Mark carney raising the flag. , we seeces go higher haven securing a bid whether it is bunds continue to hit record lows. Thomas moment and fx markets. We see some money going into the yen. You just saw the downward move we have seen in u. S. Yields, 1. 94 on the u. S. Tenure right now. All of that adding up to a nervous session in the asian market, and a risk off session. Opean futures elsewhere in terms of individual names, plenty to go on with the weakness in the data. With the pmi manufacturing story, we build on that story to the european session. We will get three or four readings across europe. We will add to that narrative and on the weakness in the economy. Euro stocks fairly flat. Spanish ibex not doing badly. A little weakness in the pound this morning, and the end is a touch stronger. In the equity markets from a perspective on equities, where we are heading and sentiment in the markets. Financials seen mixed this morning. Energy stocks seem in negative territory. Industrials look mixed. Things that mixed overall. 332 stocks on the upside domestic on the stoxx 600. Lets look at the individual movers and what is moving these markets. We are seeing movement, oil prices a touch stronger but not much. Johnson talking about a tax on sugar and salt. Sports is making gains, up by 1. 4 . To the downside, we have a few exdividends coming through. And Electronics Business in the u. K. Put out a statement, stock down by 3 . Hayes down by 2. 6 . It is not a day for many individual movers. We will start with the big picture and the ecb. Christine lagarde is set to succeed mario draghi. She will be the first person to take the job without being a career banker. Joining us now from brussels is maria tadeo who is tracking the twists and turns, the horse trading between the european leaders as they struggle to andnate an ecb President European Commission president. What type of central bank will Christine Lagarde b, what is the consensus . Maria in terms of Christine Lagarde, this is not a central banker, not an economist. Something that has been her business, not your traditional european banker. Is difficult to say before you start the job, but if you look at her track record, she has been supportive of mario draghi and praised the action he took during the crisis. She could use fiscal room to create growth. In reference to germany with a huge surplus, she has always the key priority for the european union, they should do more to integrate economies. That we dois reading not get the clean break from mario draghi. It is more of a continuation. The some people are making point it is not what she is that what she is not. She sets herself up to be different from him. Let me ask you about the bigger picture. Looking at the european commission, merkel locking horns with macron. Who has come out as the winner . Merkel, this is an unprecedented situation for a german to get the top job, but she did pay a hefty price. She had to abstain in the vote. It couldoncerned unleash tensions with coalition partners. In germany it is a shaky picture for angela merkel. At emmanuelk macron, it is a different story, he did not like this idea. He managed to get a french woman at the European Central bank. Everyone speaks french, that is something he mentioned. At thea close ally european council. It is a good night for emmanuel macron. Anna thank you very much, maria tadeo in brussels. A shock to some economists and commentators. Some of them blindsided by this appointment. Erik f. Nielsen mark ivor phelps joins