Steve mnuchin says he may had to beijing of trade talks arent productive. This as europes braces for u. S. Tariffs on 7 billion of goods and legal aircraft subsidies. Trading revenue will be the talking point for Goldman Sachs and jp morgan as they report quarter results. We will hear from the cfo, john shrewsbury. And buyers reprieve. The german companys legal payout over its second round up by 55 million by u. S. Judge. There are some harsh words in that case. He called their behavior reprehensible. Ant to talk about bitcoin everyone has harsh things to say about bitcoin, from President Trump to his treasury Steve Mnuchin, saying it is only backed by thin air. On can see it hit 12,000 friday and just dropped over the weekend, trading now a 10,700 between four dollars. One of the problems for bitcoin is that a lot of people have bad things to say about Facebooks Libra as well, even Maxine Waters is out against libra. But im not sure they should necessarily be making the connection between those two what it looks like investors are. Lets take a look at European Equity index futures, right now daxing up a mixed picture, futures up just slightly, as our cac futures. In asianlittle action equity indices overnight, very low volume to go along with low volatility. What do you see on the gmm . Picking up way less. Low volatility, lowvolume day in the asian markets. This is the picture. Chinese equity market under pressure, the japanese market considerably under pressure earlier and playing catchup. Bad andrea not doing so the fx side of things, the south korean making a few gains. Stateside, we will be looking at what the Bank Earnings story has to say. Jp morgan and Goldman Sachs will be reporting. We will also hear from Jerome Powell later on, and u. S. Retail sales, a headline grabber. As we look at the other side of the gmm, we are a little muted in terms of appetite but we seem to have an appetite for fixed income. Certainly we have some sovereign bonds on the right, australia and new zealand in particular. Lets just mention iron ore. Some of our colleagues are talking about how we may need to watch out for those mining stocks in london when they open up because of what we saw in production particularly on the dalian exchange. Rio tinto looks interesting. Lets get into the markets with mark cudmore, are bloomberg mliv managing editor in singapore. Mark, what are you focused on . Is it all about Bank Earnings this week, or are we still all looking at what Central Banks around the world are doing . Of peoples like a lot arent looking at anything to do with markets, theyve gone on holiday. This is the actually the third session, thirdmost stable session for futures this year. Bear in mind, one of the two quieter sessions was the morning of july 5, which coincides with july 4 in the u. S. It is almost all traders going on holiday, no one cares. Is it a coiled spring or the calm before the storm . Im not sure. As for the catalyst on the horizon, Bank Earnings are coming up next its a little bit worrying and people seem nervous after yesterdays results with citibank. That puts a slightly darker tone on jp morgan and Goldman Sachs. We have this theme of financials underperforming the dollar index its notable that the financial index of the s p 500 has not made new record highs in recent months despite the broader index doing so. It has not yet validated the move. Ok. We are watching the underlying earnings picture develop. Fore ourbrings to the question of the day. Can u. S. Equities rally keep going, even if Bank Earnings fail to impress . It might depend on how many people have gone to the beach already. Exactly. I think it will be hard for the broader index to sustain a rally of course financials dont have the same importance they had a decade ago theyve been demoted or surpassed by the technology sector. But i do think they will need to see financials cope with the imminent fed rate cut, will need to see them cope with a negative yield environment, and overall it will set the move for earnings season. We will need to see financials try to break through the previous high, not even record high from last year, with that broader index rally. That is what we are watching for today. I have a chart of the vix this is just a oneyear look. Weve come down basically to what looks like a relatively normal level of in five years do you expect this to go even lower or are people starting to bet against that . Of year not the time where you particularly want to buy volatility. We are getting into that summer lull season. It seems like a hard time to play for vix. Obviously if you have a directional view it seems a good time to express it, but we might be in this, range for a little longer, and we will probably grind a little bit higher i say that as a structural bear. But in a quiet environment it probably means more likely we will ride topside rather than down. Thanks very much. Mark cudmore joining us from singapore. Remember, you can joining the debate on the question of the day can the u. S. Equity rally keep going, even if Bank Earnings fail to impress . Reach out and give us your thoughts. You can talk to the tv team using the function i. B. Talk tv. Lets get the bloomberg first word news with debra mao. Europe is bracing for up to 7 billion of u. S. Tariffs. To bloc expects the wto give the u. S. The green light, this over the 14 year dispute over illegal aircraft subsidies. Washington says it could cause economic damage to the u. S. , and the wto could rule as soon as this summer. Theker nancy pelosi says house will vote on a resolution condemning President Trump, this for his attack on for female lawmakers that have been dubbed racist. Representative oconnor seo cortez says the comments wont distract them from pursuing their agenda. The tweets have been widely condemned, including by u. K. Leadership contenders. If you were the leader of a great multiracial, multicultural cannot useu simply that kind of language about sending people back to where they came from. Decades andt decades ago, thank heavens for that. U. S. Treasury secretary Steve Mnuchin has expressed serious concerns about facebooks proposed cryptocurrency. Plans for libra have already drawn criticisms from President Trump and democratic lawmakers. But nguyen says it is a National Security issue, adding that the potential for Illicit Activity is high. The Treasury Department has expressed very serious concerns that libra could be misused by money launderers and terrorist financiers. The number of people suffering from hunger in 2018 to an eightyear high according to a United Nations report. Turmoil, civilc conflict, and climate shocks. An official says things are not improving at all. Global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thanks very much. Debra mao in hong kong with your first word news. Next, bayer shares called higher after a judge slashes damages on its round up verdict. But take a look at the shares over the past year. After losing three trials in california since the summer, they have dropped by almost 40 . And remember, Bloomberg Radio is live on your mobile device or on dab Digital Radio in the london area. This is bloomberg. Welcome back to bloomberg markets, this is the european open. We are 70 minutes away from the start of equity trading across europe and the u. K. At citigroup, foreign banking is in. Trading profits, not so much. Trading revenue fell more than analysts estimated, even after warnings from the ceo. Other major banks report as investors brace for more disappointments in trading here with the details as dani burger. 5 , morenumbers fell than estimated. But they cut costs 100 million more than what was expected, and that helped them beat on profits and it really underscores the need for banks to look beyond trading to get that profit. We saw it beat, and though they did also miss in net interest margins. For the big three others that are reporting today goldman, jp morgan that portends poorly for them, and already options are showing wider moves when they report today. But also the bar may have been set lower by what we saw from citigroup. We also saw bigger ones this wednesday and thursday. Thursday, Morgan Stanley may need there Money Management unit to help make up for any lapses. Hadou said before, the ceo warned against lower trading, as did all these banks it shows it is a trend in the broader industry. The blue bar is what we expected this year versus last year every bank up here is expecting a slump compared to last year. Vix,we look at the partially shows us how tough an environment it was. It never went above 25. The highest it went was 21 times in the second quarter, average 15. Still the blue index did pick up, but still city mixed. He also blamed the trade war influence on investor sentiment, and that is why it was so problematic. I just want to show you what the the weight is city, and how poorly they did this is traders starting to price in poor expectations, which could be telling us that investors expect a fourth quarterly decline for the trading business across wall street. Bloombergs dani burger, thank you. Lets get a Bloomberg Business flash in hong kong with debra mao. Finished with the scandal hit fund and is sent to pay investors a premium. They will pay a 50 basis point premium on holding for clients of the more than 7 billion absolute return fund. This helps to draw a line under a year of scandal. Ackmanaire investor bill has made about 700 million betting on burritos. The value of his stake in chipotle has surged as the chain hit a record high on monday, more than three years after the safety crisis battered the stock. It is returned about 48 on investments this year through july 9. And bad news for costco and walmart as amazon shoppers snatch up potato chips and toilet paper. Sales of consumable products during the first nine hours of amazons prime day were about triple what they are on a typical day. These results show the appeal stretches beyond electronics and other bigticket items. And thats your Bloomberg Business flash. Thanks so much. Debra mao in hong kong. Bayer has won a ruling slashing a jury verdict to 25 million from over 80 million over claims that the round of weedkiller causes cancer. This same judge to reduce the punitive damage request rejected the new trial. They have vowed to keep dissenting its popular weedkiller. Joining us from munich is tim low, who covers bayer. Reductions this new in the amount of punitive damages . The surface, it looks good. Than 80on is nicer million. But the real thing they were hoping for came on friday when the judge rejected a new trial. No they have to formally appeal the case, which will take quite a bit of time. This is the second of three trials that bayer has already lost, so i guess given fridays news this is a best Case Scenario. The judge called monsantos behavior reprehensible. While monsanto repeatedly includes it stands by the safety of its products this paints the picture of a company focused on attacking or undermining the people who raise concerns to the exclusion of being an objective arbiter of safety. Even though he is saying they dont have to pay as much money, he wasnt very positive about the company that bayer bought, monsanto. How do we expect shares to react, and how do we expect the ceo to hold his feet, given he staked his career on this acquisition . Thats a great point. Its a really messy situation. The judge used the word reprehensible, which isnt good, given that there are 13,000 other plaintiffs who sued them. These are not friendly environments where the trials are taking place. A lot in california and st. Louis, which is seen as a friendly environment for the plaintiff side. That sentiment is not a good signal. Is themillion figure maximum the judge deemed allowable under the president , so while it is a nice cut, they still kind of maxed it out. Keeping his job its a messy situation. The massive overhang on the stock and this litigation is such a huge cloud. Who have new investors been hinting at a desire to break up the company. I think a lot of people think that changing the leadership right now, almost in the middle of a big war it would just create even more drama and tension. The best Case Scenario is you have to start winning some trials, and you are able one way or another to see your longterm vision. But man, is that a road riddled with question marks. Certainly seems this business will be seeing further inside the courtroom. Away from the open of the European Equity trading for this tuesday morning. Up next, the stocks we are watching at the open. We are going to focus on burberry after they eat estimates on new designs. We will bring you that story and a couple others. This is bloomberg. We are just about six minutes and change away from the start of trading across europe and the u. K. Lets get your stocks to watch. Dani burger is focused on an irish cement company. Joe easton is covering burberry. And we are looking at all stremme list. Lets start with you on the winemaker. Thats a weird story. Yesterday we learned ams is making a counteroffer at 38. 5 euros per share. Later, wehours learned that they have pulled the offer, saying there is potential ground for proceeding. We dont know whats behind it but it is pretty weird. It is probably reversing those gains this morning. We look for a drop there, weird is the word. Whats going on at burberry . From the update fashion house. Burberry reported costly sales around 4 , compared with the estimate of 2 . Notably they say china sales it isn the mid teens, but not all positive. Morgan stanley says some of the commentary sounds quite prudent and perhaps a little bit held back, and that is despite this really Strong Performance from the new product line. Thatn stanley does note perhaps they are predicting volatility in the coming quarters. It is quite strong but it is not clear how the rest of the year will go. That said they are expecting shares to rise somewhat this morning. We are expecting shares for this arent we . The irish cement maker who knew cement could be so exciting . Blackstone making a bid for their European Distribution arm. People told bloomberg a deal could be expected as soon as this week. It could be as much as 1. 7 billion euros, so expect shares to rise as part of a sweeping overhaul to get cash for more acquisitions. Thanks for joining us. You can get all the stock stories you need to know on the mobile app. We are watching for a fallen , hayes alsongs could be under pressure. More subdued trading but no change in guidance without a range of negative commentary coming up. Coming up, the start of European Equity trading. We will get you started for your tuesday inequities. 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 welcome back to the program. One minute to go until we see the start of the cash equity session for this tuesday morning. On the markets, we expect a little positivity at the start of trade. The futures looking pretty flat to me. The msci asiapacific, also pretty flat. A pretty lackluster session in asia. A few headlines around trade, around the possibility of restarting the conversation, but really we look ahead to the earnings season, retail sales data and the u. S. Later on. U. S. Futures look fairly flat right now. A slight move to the upside, but nothing dramatic. The yield on the u. S. 10year, 2. 09 . Glimpse, but Little Movement in fx. Dani talked about low volatility hurting the banks, and fx markets have been part of that. U. S. Futures flat to negative, at the start of the trading day. Not expecting any big moves. Waiting and watching the earnings season develop. Andbers out of citi, Goldman Sachs and jp morgan reporting later on today. The banking story at the heart of things around trading, in that lower volatility environment. The costcutting moves banks are having to make in the absence of topline drivers, also part of the story as well. Ftse 100, slightly downward. See the gray on the screen, were not making giant leaps in any directions or the dutch market down 0. 2 . The dollar fairly flat this morning, the yen a little weakness, british pound a little weakness as we continue to watch the leadership race between Boris Johnson, jeremy hunt, which is due to come to an end next week. Well certainly cover that. Back to the markets, a look at what is going on from a sector perspective. Nothing convincing in either direction, the short way to describe it. Green,als, healthcare in suggesting the riskaversion in the markets, but utilities fairly mixed. Unsure its quite so simple. And some financials just turning green behind me. Pretty mixed picture. What do you see in individual movers . Matt i see more losers than gainers. Gaining right now. On the plus side, pharma companies, the Biggest Companies on the stoxx 600. Roche, astrazeneca, glaxosmithkline, sanofi adding to the index. On the downside, nestle on top, but takingbout 0. 6 , a lot points off the index. Then metals, miners, oil companies. Total, royal, dutch shell all down, pulling the index down about 0. 2 . European markets opening marginally lower, as asian stocks traded with thin liquidity ahead of earnings of three major u. S.