Fallout. Deutsche banks sweeping turnaround gets a thumbs down from investors but what will it exit from equities mean for other banks . Tech tensions. Japan says a resolution to the trade spat with south korea is dependent upon souls response. We should hear more about that this hour. Is the European Market open, 29 minutes ago until the start of the European Equity trading day. Bitres look a little sluggish. We are slipping around the Global Equity story. We were slipping on wall street yesterday, slipping in the asian section, slipping back on european futures, slipping and waiting to hear from fed officials, waiting to hear from the fed because the market is betting we will get a rate cut in july despite the strong data on friday and the markets will be looking to test that theory dayshe hypothesis in two of testimony from Jerome Powell. Lets show you where we are on equity markets. Is close to the markets right now, that is something we are watching and watching fed minutes on wednesday. Cpi data on thursday. We have the geopolitical tensions making themselves felt. Hong kong down once again. The hong kong dollar weaker. This is despite carrie lam saying that the extradition bill is dead. Slippingeas kospi because of trade tensions between south korea and japan. Australian assets a little weaker, the dollar down by. 3 of 1 . Down. 2 of 1 . We way for gdp data to come through tomorrow and the survey of economists does not look like a positive topline story. We are to show you selling equities, getting into fixed income. We see that in spain and germany and a quick note on some of these other volatile bright red commodity prices. Ubber down by 4. 4 concerned that maybe the chinese auto sales data is not as strong as it appeared on first blush. Something that Market Participants are talking about. Mark cudmore is joining us now from singapore. Great to have you with us. Let me ask you about the global picture for equities. You have been saying this morning good news and bad news economically could start being bad for stocks. Is this your bearish side to the fore, what is driving that thinking . We are in this cycle of the reaction function for stocks to data. What we have seen in the last month or so, we have seen bad news as being good for stocks and good data bad for stocks and we are in this environment where we are focused on easing. The Monetary Policy response is seen as the primary driver of stocks. Ways, it is to perceived the fed response, the policy response is sufficient to turn the economy around we get back into that world where policy is appropriate for the economy and good data is good for stocks and that data is bad for stocks. The problem is a we start realizing that policymakers are impotent to turn the Economic Cycle around, that the deterioration is too drastic. That is the camp i am in. If we are in that world, we get 2008to like we were in where we saw a dynamic that you have an asymmetric reaction function to data but it is skewed to the downside so bad data becomes bad news because it emphasis emphasizes policymakers are impotent and it does not support the environment. We might move to that world in the next few weeks. For most people, we need the data for the next three or four weeks to confirm which path were going down. From powellhear something dovish and that sends equities higher, you would ask whether that will be sustained. Mark i think very much so. We see despiteat the fact that markets are on hold ahead of powell, i dont think it will change the picture unless he comes up with the tariffs. Happened itever would betray between five basis points. He would never do 15 or take that away. Unwised be a surprise, pricing for a cut and he is not going to suddenly 150 basis points so we are on hold in case of the tail risk surprise and people are looking for guidance of what comes next. What comes after july. Powell will try to give guidance to keep his options open. I think overall, easing is priced cannot we know the easing is coming. It cannot support equities and we have on hundred percent chance of the cut coming in july. When that comes it will not support stocks from there. Data will be increasingly important. You aboutme ask question of the day. Availableeem to be now. What impact will the koreajapan trade spat have on Global Markets . We have been taking a Technology Look and i have pulled up the ectr function on my screen, showing exports to japan. Mark there are two elements, the one is overall emphasizes that trade tensions are not just u. S. And china and it is not just u. S. Eu and u. S. Centric. There are other countries that are getting more protectionist. That is worrying given we are in a vulnerable state. It is important that because korea is part of the Global Supply chain on the Technology Side so there is a risk of a knock on effect if it does not get resolved. The fact they will have more this is constructive but is a longrunning affair and the core issues that underlie these tensions go back decades. Thatare worried given voter the voter base have expressed support for the hardline, that could derail Technology Supply chains globally. From ae are hearing spokesman that they will raise this issue of japanese export curves at a wto meeting. Some headlines crossing the bloomberg. The u. K. Economy according to a survey, probably shrank for the first time in seven years we will get this data later on this week. That the pound is a little weaker today, down. 2 of 1 , that can the pound be moved or is it all about brexit . Mark i think brexit is the key ,tory and the political turmoil is it a hard brexit or not, are we heading toward the general election. It was notable how bearish u. K. Investors were. A domestic bearish bias that was more extreme. The rest of the world has got bored of the u. K. No one but because cares anymore, no one wants to be involved. The fact is the u. K. Investors are and clearly worried and even though they do feel that all the negativity is priced there is no over linings to be seen anywhere. The people are biased for more downside but realize there will be the occasional squeeze. That is the context. It will not shocked if we get more bad data. It is hard to get a relief rally because people are looking to sell those rallies. Anna no offense taken, well keep calm and brexit on. You can join the debate on todays question of the day. Koreajapanwill the trade spat have on Global Markets question mark you look at the tech sector. Reach out to us and the markets live team on your bloomberg. Lets get a first word news update. Olivia carrie lam says her controversial bill that would allow extraditions to china is dead. If stopped short of saying she would withdraw the bill entirely. The announcement follows weeks of mass protests. Organizers say they will keep planning major new rallies. Lingering doubt about the governments sincerity or worries whether the government well we start the process and the Legislative Council. There is note here such plan. The bill is dead. New primeeeces minister has chosen the finance minister. One of the tasks is to renegotiate the relaxation of [inaudible] two free of taxes and other measures designed to boost economic growth. Jeffrey epstein is in held in a Correction Center in new york as he awaits ale. The charge encloses includes sex acts with girls as young as 14. Epsteinckstein pleaded not guilty. And taking another step toward opposing brexit. They agreed to start a second referendum. The Union Chiefs Say the policy must need to oppose the eu on any terms negotiated through the ruling conservative government. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna thank you. Next, Deutsche Bank dwindles, the stock closed down in yesterdays session 5 . Bloomberg radio is live on your mobile device or on dab digital area radio in the london area. The team putting out the broadcast this morning. This is bloomberg. Anna welcome back to the european open, 60 minutes to go until the start of cash equity trading. Waiting to hear more from Jerome Powell, always saying the same thing this time tomorrow. We will not hear from him until wednesday and thursday of this week. Deutsche banks overhaul received mixed reaction. Closing down more than 5 . Some are concerned about the focus on the competitive market and low margin financing. Joining us now, nicholas comfort and frankfurt. Good to have you with us. What is it that made investors lose faith in this turnaround so quickly. Is it a focus on the home market, a fear that fairweather what is the thinking . We see so many overalls in the recent couple of years. Its time they say they will pull out of businesses and the revenue losses are minimal and so when Deutsche Bank is saying, they say a conservative estimate to Revenue Growth among people add do you think you can revenues given all the retrenchment and the second pulling outs of equities and so people are pulling into question whether they can reach their profitability goals which are based on what Deutsche Bank calls conservative already revenue assumptions. Jobs story,bout the for anyone who has been working at Deutsche Bank, this has been a nervous time and no doubt many have received bad news. What do we know about how many of the people from equities are other parts that are being shared will able to find jobs internally . The there was a report a german magazine saying that 2000 cuts would be within the equities space. Whether people can find other thatwithin Deutsche Bank, is a tough one. If other areas are cutting it would be a hard internal market. We saw people leaving offices in london and sydney and elsewhere in asia with boxes and unload yesterday the job cuts have a gun. Including those who are not finding jobs. There may be in germany where they are trying to make it as palatable as possible. Evil could get moved around but there will not be that many internal jobs going. Limitedunds like openings. Thank you very much. Nicolas sarkozy comfort, our banking reporter in frankfurt. Here are images of employees leaving the post yesterday. Lets get a Bloomberg Business flash. Here is Olivia Howard in london. Olivia wall street has not been this pessimistic on apple for a long time. Rosenblatt downgraded the Company Bringing the total number of eris analysts to five, that is the highest number since 1997. Apple did not release the imac until year later and the ipod did not debut till 2001. Sweepy recession will not the economy according to henry mcveigh. Market over did it cutting by 50 basis points this month. The market got to dovish on the fed, the idea that they would do 50 basis points in terms of easing in july is too optimistic. Ultimately, the fed sees low inflation and i think they see slowing growth. The prudent thing to do is to do 25 basis points. Could Virgin Galactic become the first spate spaceflight company to go public. Planning to invest 800 Million Dollars in the company for a 49 stake. The company would be publicly listed. That is your Bloomberg Business flash. Anna here is a look at what you should be watching for. Appears Court Decides whether the orange ceo helped to cheat the french government out of 403 million euros. P. M. , and economist will answer questions live on twitter. The markets live team out with an interesting piece on what fisting lagarde means for the strength and weakness of the euro. President trump will hold talks emir. Utters qatars well the longer be invited to that and this evening at eight, Boris Johnson and jeremy hunt will go headtohead for the first time in front of a live tv audience. We are minutes away from the open. Next we will take a look at your stocks to watch at the opening including danske bank after the lender cut its profit forecast. This is bloomberg. The welcome back to European Market open, eight cents go to the start of equity trading. Lets find out what stocks our team is watching today. Lets go first to francis who is looking at danske bank and basf and the fallout across the sector on that story and the latest on unicredit. What is the story . Good morning. The new ceo has cut the profit estimate by a billion krone. It comes as the danish bank faces tougher pressure on trading, income, and net interest income. As you know is facing a massive Money Laundering scandal. That is what has led to the change. To spares taking steps the bank with a future. Theyre planning several initiatives which they will announce later this year about how to handle the tough conditions. We will see. The share is indicated to fall a little bit, 3 to 4 . It is taking quite a beating in the last month. At yes, it has. Is a story that will have repercussions across the sector. Tom it is indeed. Its flashed its cut profit forecast and expect profit to fall as much as 30 . That is opposed to an earlier prediction of a slight increase. It is blaming the economic on wn worldwide aced based on trade conflicts. Are down in premarket indicators. Eye on thell keep an sector on the back of that story. You have been looking at the italian banks and what is the story . A couple things going on, we had headlines coming out of reuters that they hired advisers corporate structure. They sold the remaining stake. Unicredit called higher on that because this is improving their leverage ratio but look out, they are listed, called down as much as 5 . Anna thanks ray much. Thanks for joining us. You can get the latest stock stories from our Equities Team if you go to first go on your mobile app. D the we are focusing on a story out of south korea. Speaking minister is in seoul at any moment. We have these live pictures coming to us. Curbs ong japanese exports. Starts a story having its when a court in seoul made the decision about the japanese occupation. The japanese did not like that and imposed some curbs on south korean experts. We will keep across this tense story, something that has weighed on south korean assets and continues to do so. In terms of where we start the trading day, we are expected go to go lower. We are waiting for some weakness and waiting is what we are doing here, we are waiting and drifting lower as we wait for Jerome Powell to speak and he speaks a couple of times this week. Equities are expected to be weaker at the start of the trading day at saw that focuses on the German Market. Storyesult of that basf that tom just took us through. The open is next. This is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Trading. Lets see how the market is position, and andover from asia to the european session. It is negative but not much. Asiapacific. Sci we are expecting to lose a little ground. The pound is down against the u. S. Dollar. Gdp data out tomorrow. A debate between tory leadership hopefuls tonight. The u. S. 10 year yield, here we really are waiting for jerome andll to speak tomorrow thursday, his testimony in washington. We will get more details on his expectations and his level of dovishness despite the stronger jobs data. U. S. Futures point down, and european futures also point down. Chemicals sector very much at the heart of things. We have chemicals retreating all the German Market. European equity markets, the ftse 100 is open. The turkish market is open and bouncing a little bit after the losses from yesterday some of to theejerk reaction unexpected firing of the central bank governor. The spanish market giving us something more we expected to see. We are waiting for the German Market to get up and running. That is where we could see real weakness on the chemical story. Are putting trade tensions front and center. The pound is a touch weaker, the dollar fairly flat. Lets look at things from a sector perspective. We can see health care is weaker, materials weaker. Defensiveness or more risk assets. We have both on the rise. Financials looking mixed. Industrials retreating. In terms of the moved to the downside, 420 stocks moving lower this morning, 138 moving higher. You can see we have this real downside bias. We are seeing a lot of weakness at the start of the trading day. We are waiting for Chemical Companies to start trading. These stocks remain closed so far. Lets start with the upside. Aak is the biggest gainer by 1 . Ocard ocado up by 0. 8 . If we go to the downside, micro focus, did not change their guidance. The market has reassessed them. Randstad also down. Sector isthe chemical down by 3. 6 . We are seeing Chemical Companies opening. Of this on the back of European Equity markets opening lower. The German Market coming under pressure as a result of moves in chemical stocks. The asian stocks retreated. The u. S. Counterpart flipped for a second session. The trade tensions between japan and south korea are threatening samsung,ipmakers like after japan slapped restrictions on exports to korea for materials crucial to semiconductors. South koreas trade minister has just b