The 200 day moving average. Emma police say they are theing on the assumption gunman acted alone Authorities Say the attack was islamic inspired terrorism. Theresa may addressed parliament a short time ago. What i can confirm is that the man was britishborn and that some years ago, he was once reestigated by mi5 in extremism. Ligious killed,ur people were including the assailant and the Police Officer he stabbed. 29 others were injured. The republican head of the House Intelligence Committee is offering some support for President Trumps claims that he was wiretapped. It was during legal surveillance of foreign targets after the election. President trump says he feels somewhat vindicated. Trying to wine passage of the Republican Health care bill. Lastminute changes were made to attract house conservatives. Delayedans have already a key procedural step before the bill gets to the floor. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Alix for more on the Republican Health care bill, lets bring in Kevin Cirilli. What is the vote count . 21 votes is the amount of. Otes they can lose this will come down to the wire. Members of the House Freedom caucus are going to be at the white house later this morning with President Trump as he tries to wrangle and negotiate and get this bill passed. Right now, they dont have the votes. As a result, they cant get to anything else on President Trumps agenda. Alix what will we hear from President Trump . Kevin the chairman of the House Freedom caucus saying on fox news last night that potentially there could be some type of deal and they could work toward one. The aids im speaking with im speakingaides with privately, including aides for rand paul saying they are Holding Strong against this. Should President Trump and speaker rhine be able to get this passed tonight, this would. E a victory for them alix Kevin Cirilli joining us from washington. For more on health care, we are joined by torsten slok and Yianos Kontopoulos. Seems like the market is looking at the Health Care Bill as a referendum on trumps policy agenda. Is that a fair conclusion . Torsten absolutely. We have been waiting so long for any piece of evidence are we going to do trade . Then, we thought it was immigration. Then, Corporate Tax reform. Now, obamacare. Will this succeed . What about the rest of the agenda . Alix wheres the risk here . Yianos the asymmetric risk, i dont think that much is coming from the politics side. We are fairly well informed by now in terms of the difficulties of the process and indeed we will have a delay at some level or another. Most of the asymmetric risks are coming from the economics. Jon you have to make to judgment calls. Whether this will derail the agenda elsewhere. The second is whether the risk rally is dependent on what is about to happen in d. C. Forten confidence consumers and corporates have gone up since the election. The electionuse of outcome or because the stock market was going up . Now, the stock market is starting to wobble. This may be more uncertain. We will get more idea of whether this update it will do well or whether we will get some turnaround. Everything fed each other on its way up and could do the same on the way back down as well yianos there is certainly some reflexivity here. There are competing theories behind the move up in cyclical assets. Part of it related to a u. S. Led push, but theres also the support from china, the fact that global yields reached lows in the middle of last year. There are competing theories. You said it was less about politics and more about the ecodata. Will you see the survey data move down to the hard data . I think it is probably very likely that we see the peak on the survey data given the surprises. The remaining question is ier hard data will cut dont think we will get a substantial push here. We have to grapple with the idea that we are past peak momentum in terms of growth. That obviously will have implications in terms of what sort of returns we should expect from risky assets. Alix take you look at the atlanta fed gdp forecast. That has come down from 3. 4 to 0. 9. One very complicated issue is that the region why q1 his week is we had a significant drop in gdp. The seasonality from that specific quarter is still eight years overhanging the numbers we are getting from q1. We also look at this carefully yesterday. Growths a 1 drag on gdp in q1 of this year as a result of that residual seasonality. We dont think the economy is losing steam. We think the economy is still doing relatively well. What the soft data will do will be an important thing Going Forward for markets. Jon i want to understand the that when it will finally kick in when will we get the catch up with hard data versus soft . Employment numbers have been relatively strong. Beis true that you could skeptical, but that is why the political situation becomes a very important part. Jon i find it absolutely stunning that we sit here in march going into april after a couple months of an administration saying one vote tonight could derail the whole agenda. Is that a bit euphoric for some aspect . Three months in, its all over . It becomes important from a prioritization point. Maybe Corporate Tax reform is the next thing on the agenda. This isnd of the day, an important test for where we stand in terms of prioritization of policies. Alix how do you play this, then . You look at the ecodata and you are worried it is a referendum on President Trumps agenda. What do you do . Yianos you need to have a strong sense in terms of what is priced and effectively position accordingly. Look at the history of large fiscal programs. Have a sense of how that and intes to growth terms of additional financing costs. Indicated that we are roughly in the middle of the range of what is feasible in this case. I dont think we will be faced with a significant surprise over the next couple of days. The market will give the benefit of the doubt for a little more while. One last factor that makes a difference here is the fact that we still have relatively high yields in the u. S. Would provide a cushion, even if the hard data doesnt kick in automatically. That is why the market is not really taking an extreme views here. We discussed the terror attacks of yesterday with nick burns. That is coming up next. City, you are watching bloomberg. Jon theresa may addressed parliament after the london attacks of yesterday. The investigation is still ongoing. The assailant was britishborn. For more, were joined by nick burns in boston. He served as under secretary of state state for Political Affairs under president bush. Ministerfrom the pie with the attacker was the Prime Minister, the attacker was britishborn. Atwn as a french character this point. However important are the details we have learned in the last hour . Nick it shows how difficult this is for the British Police and authorities to track down not only the accomplices of the thatker it is important the attacks yesterday took place one year to the day after the deadly attacks in brussels that killed more than 30 people. That gives you a superficial indication that there may have been some contact or relationship between the attacker and the Islamic State or other International Terrorism groups. Smartitish have been very not to release the name of the attacker to not give any accomplices undo notice. They are already making arrests and pursuing this. What does it say about the Security Services at this point that he was known to mi5 but considered a fringe character . It is very difficult to make a judgment. The job of protecting the people who may berorists underground for a long time is a store nearly difficult. Extraordinarily difficult. He had not been a mainline suspect in the past. It is too early to judge the authorities. They seem to be working extraordinarily hard and effectively and Law Enforcement has an impossible job. The british have a lot of experience in fighting ira terrorism in the past. You need police and intelligence and judicial cooperation. Whether the European Countries can be helpful here or the United States the british will be looking everywhere for these suspects. Eu describe the cross Corporation Security cooperation that exists. Prof. Burns the Cooperation Among the eu countries is extraordinaire lee strong extraordinarily strong because of the repeated attacks. They are working every day to compare notes and give each other heads up when they think the suspects are traveling across national borders. When the british begin to negotiate their departure from the eu, retaining the type of Police Judicial intelligence cooperation will be could call for britain and the other countries will be critical for britain and the other countries. Cooperationtates has been critical to our country and the brits. Really highlight the struggle we are seeing all across the globe in terms of politics. You fight hard when it comes to economic borders but you need the internal cooperation when it comes to national security. Does this soft in the conversation at all soften the conversation at all . Prof. Burns it reminds everyone, especially as they look at these negotiations, that retaining links between britain and the eu will be critical in this realm. What we know about terrorism these days, these are single individuals or just a few individuals, they do cross borders. The only way to defeat terrorism is to have profound international cooperation. That has to be on the mind of the europeans want to cut britain off who want to cut britain off. Jon you and i have had this discussion many times the character of the threat has changed. This individual being britishborn do you think the way they secure london will change after this . Many of the police are unarmed. Do you think the secretive forces will have to change their approach . Forces will have to change their approach . , i wasurns i must say in london last week, i have watched the british for a number of years, the professionalism of the British Police and their services is quite impressive. Carrying on as usual was the best answer to the terrorists. I greatly admire what the british have done. Alix really great to get your perspective. Partner atkey barclays will join us on his latest call on global equities. We will break it down. This is bloomberg. Emma googles advertising practice has gone global. Big markets have halted spending on googles display network. Google is trying to head off the problem by implementing new tools and policies. Toshiba says the board of its nuclear unit will decide whether to file for bankruptcy. There have been construction delays at westinghouse. Is considering selling a controlling stake in westinghouse. Retail sales in the u. K. Rose more than expected last month. Purchases in stores and online were up 1. 4 in february. That is your Bloomberg Business flash. Jon a big upside surprise on u. K. Retail sales. The pound higher. A 125 handle on the pound against the dollar. To discuss, torsten slok and Yianos Kontopoulos still with us. The numbers in the u k, classic e. M. Dilemma. Upside risk inflation, Downside Risk to growth. They arent materializing in the way people thought they would. Torsten the issue is the u. K. Has been helped by europe having a stronger recovery and the u. S. Having a strong recovery. The u. K. Is not an island. It is a classic die lemma dilemma of an uptrend in inflation. That should be quite worrying for the bank of england. Jon i did a navigate this dilemma how do they navigate this dilemma . Yianos it is a primary risk for them. That is what the markets fail to understand initially. You are in a sweet spot of benefits of the week are bound and those are tapering off in the next few months. They needs to keep patience, keep along the lines of having the option audi to provide some additional assistance option ality to provide some additional assistance. A more hawkish stance serves them well. Switching strategies aggressively makes sense. Jon in the markets, we talk about the price setting the narrative. 2223, i was told that if the u. K. Voted to leave the european union, the economy would roll over. That didnt happen. Now, the consensus view is we havent started negotiations yet. Once they do start, things will roll over. The narrative shifted as the data points came out ok. Are waitingestors ite macro economics that continues, we will be good against the political difficulties in quantifying what is the scenario for brexit, who will do what and when. What will be the reaction from the germans . It is difficult to quantify this political issue. , it alwaystries how long will the pound continue to decline . The u. K. Economy will continue to benefit. The export sector will do very well. With that, you will get more inflation. Alix and Pricing Power in wages increasing at the same time. , the pain trade has been if you are short sterling over the last few months, when will that trade Start Playing out . You always have to be careful in terms of what you are paring it against. One makes an argument about the u. K. And sterling in particular, you really need to be looking against the euro. That is the starting point. At the end of the day, what is in our mind, a quintessential macro trade in the sense of the weakening of the pound over the next 12 years, one has to be patient. I would like to present the opposite view here. More hawkishness out of the central bank and better data. Look what happened to the pound against the euro. Not much. Jon great to have you on the program. Torsten slok and Yianos Kontopoulos of ubs. , aorrow, 11 30 eastern time program dedicated to fixed income. Youre watching bloomberg. Jon from new york city, this is bloomberg daybreak. Two hours away from the cash open in new york. Futures a little firmer, up. 1 . The s p 500 up. 2 . This is how the stage is set ahead of the key vote tonight on the Health Care Bill. Yields up a single basis point. A squeeze on the cable rate at 125 handle. Upside surprise for u. K. Retail sales. The man behind londons worst terror attack in more than a decade is described as britishborn and was once investigated over concerns of extremism. Theresa may described the governments response today. Protecte going to communities across the country to reassure the public. This will mean increasing the number of patrols across the country with more armed police on the streets. Emma they believe the attacker acted alone. Still, eight suspects have been arrested. What are people died in yesterdays attack, including the assailant and the Police Officer he stabbed. Thats four people died. The white house trying to get house conservatives on board with the Health Care Bill. They worked late into the night on lastminute changes that would attract support. Republicans have postponed a key procedural step. In asia, japans government is denying allegations linking Prime Minister shinzo abes wife to a banking scandal. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im emma chandra. This is bloomberg. Alix here in the u. S. , lots of fed speak today. At 8 45 eastern. Ashkari and Robert Kaplan later today. Still with us, torsten slok of Deutsche Bank and Yianos Kontopoulos of ubs. Does this delay the path . Torsten i would not say so. The communication today from yellen, she will say lets not rock the boat here. Lets continue with this idea that things are moving the right direction. Theres a lot of uncertainty from the administration. Theres uncertainty about the exchange rate. Back and saying lets see what the data is coming in and lets be data dependent. Jon still the data dependent story. Alix neel says lets keep going. Then we compare the data. Nominal Interest Rates may remain substantially below the averages of the last halfcentury. Policymakers are more accommodative and seek inflation near 3 . It was a fascinating read. Torsten that paper is very important. Its written by someone at the fed, which tells you it has pretty significant weight. Critical, itsry as we will stay at zero 40 of the time in the future. If you are a rates investor and you read that paper, you should conclude that long rates will stay relatively low for a very long period until this demographic issue has been resolved. Lets raise the inflation target, there is a lot of problems with that. With this issue that weve gotten so close to zero. Alix you could see Interest Rates around zero 40 of the time. That seems to kill the bond bears. How do you rethink how you invest . Yianos you need to keep an open mind, truly. At the end of the day, we do know that the process to higher inflation will take time. The additional piece of information we have, sustainable inflation at the level that is desirable for most policymakers, you first need to see growth and then you get inflation. We are in a situation that i would still qualify as does this mean the fed needs to err mostly on the accommodative s