Yields up by about three basis points, the vix little bit softer. Jpmorgan says you want to buy hedges against the pickup,. 5 jonathan . Jonathan Jonathan Garland im going to borrow. Whether you think the year has passed quickly or not depends whether you are a sterling fx trader. Its on one year since that vote. The british people have made a very clear decision to take a different path, and as such, i think the country requires fresh leadership to take it in this direction. Inevitably, there will be a period of uncertainty and adjustment following this results, but as the Prime Ministers of this morning, there will be no initial change in the way our people can travel and the way our goods can move or the way our services can be sold. We need a negotiation to start as soon as humanly possible and we need to start thinking globally about our future. The other thing i think the it is tohappen is become a National Bank holiday and we will call it independence day. How many im not sure of those individuals thought there would be working on the following day making the statements. Many of thoseow individual thought it would take this long for negotiations actually started. We hear from Prime Minister theresa may and eu leaders about the summit in brussels as negotiations started earlier this week. Joining us from brussels is bloombergs matt miller. The surprise is a lot of time. How much longer this whole process was going to take after that vote. What have we learned from brussels . Matt one of the things we learned is there is nearly enough time. The concern for the british especially, but also for the europeans is that trade will freeze, come to a halt at the end of this negotiating period. With 27ade deal countries, which essentially all have to ratify any deal that comes up in the u. K. Will be very difficult, something impossible to achieve in 21 months. Divorce theres a settlement, the socalled brexit bill, today and yesterday is really about immigration and solving that issue of the 3 million eu citizens that reside in the u. K. And what kind of rice they will get after brexit. What have we learned, whats been agreed, and we are the differences . Matt so far, theresa may has said those eu 27 citizens who lived in the u. K. And have lived there for five years before the cutoff date will be granted settlement status, which raise the get access to everything the uks citizen would have access to, from health care to pension plans. If you havent lived there for five years but you are still in before whatever day they decide to set, and they havent given it yet, we just know will be from march of this year to march of 2019, you will be allowed to clock up the fiveyear time in the life resettlement datas, anyone who gets and after the cutoff date before brexit will eriod of two grace pwerio years and be able to apply for more permanent residents. Those citizens wont necessarily be able to keep the eu rights they now have. They wont be able to be in the eu courts jurisdictions that they are now. And that is the Sticking Point at the europeans really have a problem with. Jonathan youve been in the European Council the last couple of days for the summit. Give me an idea of the tone of that meeting at the moment. Prime minister abe goes there and the only thing on top of her agenda is brexit discussions and brazen negotiations. 27, im thinking president macron, and they got other things in mind that they want to focus on and brexit is a side issue at this point . Of surprising. Nd i believe i was on air with you yesterday when Angela Merkel came in and she said we are going to focus on the eu 27 with other issues to deal with than brexit. Although we were all focused on theresa mays plan last night, it seems that Angela Merkels and Emmanuel Macron have really been thinking and talking and negotiating more about trade than they have about the u. K. Leaving. The interesting thing about this ,s a lot of european leaders Emmanuel Macron included, want to push and more protectionist agenda for the European Union as a whole because they are worried that other outside nations are taking jobs and taking away their most important companies. Interesting, given the push against protectionism whenever donald trump is over here for the g20 were g7 meeting that the eu leaders themselves are now thinking about putting into place more protectionist measures. Jonathan always great to catch up with you. We will catch up later as we expect Prime Minister theresa may to make that statement at the eu summit and we hear from several eu leaders as well. Shaun osborneg in and david owen. We talk about the kind of things we been surprised about one year later. One thing a lot of people are surprised about that maybe comparatively no one expected europe to be more stable stableally and more economically one year later. David there were so money risks going into this year and the eurozone was still struggling to recover. Now we have much more optimism that the recovery is broadening ,ut the ecb next year will try but Political Risk is being pushed into the background. We do have german elections later this year as well. The mood swing in europe is music in europe. Alix the day after brexit, it was panic in the fx market and now does it feel like we are headed for a briggs a reversal a brexit reversal . Investors are looking more on the evolution of the u. K. Economy. Particularly the twitching this we are starting to see at the bank of england on some parts of the mpc. The u. K. Economy is still struggling with some fairly significant challenges on a number of different fronts. For investors, shocks have been on the political front. Thats been confined to a broad and stable range of this point i think we are waiting for the next shoe to drop, waiting to see how the economy performs and with the bank of englands story is Going Forward and how these brazen negotiations really unfold. Alix i try to wrap my mind around the fact is a stronger European Union is better Economic Data good for theresa may . Or does it make her job harder . Of the dayhe end come it strengthens the position for eu 27, but i wouldnt wish to stress too much on that point. We know the clock is ticking and we know that we wont be able to in the timeline available, it assuming they dont extend 2015,e 50 beyond march theyre not unable to come out with a new trading arrangement with the eu and the u. K. , so they have to move other to the transitional phase or if they wish to, go for a very hard brexit, which is negotiated. Its going to be tough and theresa may has a minority government that can be a vote of noconfidence in some point. The risks are still very high. Jonathan for some people it is still hard to reconcile the dire economic move with the actual hard data points. I didnt guess the the year later we would have political chaos and Jeremy Corbyn would be ahead of the Prime Minister, and the Unemployment Rate is 4. 6 , david. Its hard to match that with the mood. It is, but the u. K. Has lost some momentum in q1 gdp. Real wages are being squeezed. As global uncertainty in the system and i think its going to be the next few weeks and we see whether theresa mays government is challenged. We have a vote of noconfidence in the u. K. , that would be a iny major hit the sentiments markets. The economy of the u. K. Has recovered over the years, its done quite well. The wheels have been showing signs of coming off. Jonathan when we start dealing with the real stuff, trade negotiations and the issues over euro clearing the dominate the city of london . Waltc questions about what there are questions about what wall street plans need to be. A lot of the banks are dealing with this and making the key decisions well ahead of time. I think most institutions plan for london is already well in hand. When he gets a significant challenge for the city Going Forward i think it is something that mainland europe has long wanted to gain a bit more control over. Essentially euro clearing and that sort of thing. Its a pretty significant challenge for the u. K. Going forward. Alix Shaun Osborne and david owens, its good to see you. I cant believe its been a year. Remember looking every halfhour with the pound was doing. Some of those forecasts were predicated that we would go to brussels and trigger article 50 immediately and negotiations with start. Think people out of which a guy mustve trigger article 50 and then we get a snap election and then we wouldnt maybe know who the Prime Minister was going to be for the next two years to these negotiations. Alix we would maybe see a split boe on whether or not to hike. Coming up, its the special coverage of brexit one year finlandsinues with former finance minister and adam posen of the peterson institute. Live from new york and london, this is bloomberg. Alix Senate Republicans unveiled their Health Care Bill and Senate Majority leader Mitch Mcconnell tries to stay positive about the next steps. Week we expect the Congressional Budget Office to release the score and after that we will proceed with a robust debate and an open amendment process here on the senate floor. A process i would encourage you to our hundred senators to participate in. Alix participation already underway, the bill under attack with joakim up gop members coming up against it like rand paul and Lisa Murkowski. Us is as you john. Canmany of these senators republicans afford to lose to get this bill through . They can only move three. The need 50 votes plus mike pence is the tiebreaker and now it seems they are down to 48, the republican senators who came out against it, senators and i haveski, concerns. There will sort of 50 votes right now. All interested in Different Things. Rand paul is on the right end of the spectrum, Lisa Murkowski is opposing a because of planned parenthood and portman is opposing it because of the Opioid Crisis. What can mcdowell mcconnell giveaway . Arit one clear goal might be to get more Opioid Funding in. For states that are suffering from the Opioid Crisis who need more funding, to be able to go home and say there were 2 billion in this bill and i brought it up to 10 billion, thats a concrete goal. Send a rand paul, is never going to get to yes. Canes not really much you do for them and their senators like ted cruz who wanted to move further to the right and close to real repeal. Murkowski who wants planning for funding for planned parenthood. Sweetard as they were the spot, it depends on how long it takes to get there. Jonathan lets about the Opioid Crisis. An absolutely staggering stat that sets many people back. 2 billion, lets talk about how they are going to tackle this crisis. Are they giving away 2 billion and up into to 4 billion, and hoping thats enough to quiet the senators . Arit what weve seen as the Medicaid Expansion has helped a lot of these states that expanded medicaid, and a lot of that money has been going towards funding treatment for people. For lowincome families. Well hear a lot of democrats a little bit to help people, but the real help is coming from the Medicaid Expansion in the aca, and thats where you should work with us to improve this bill. Alix thank you for joining us. Friday they are going to try to hold a vote . Good luck with that. Everyone keeps saying tax reform, when his tax reform coming . They said august. Now, base case is Something Like 2018. Alix First Quarter 2018. Joining us from washington the stefanie miller. Jonathan Senior Analyst for highsecurity. Lets start with tax reform. Tax reform from here, just give me a timeline for how long this is going to take to solve the Health Care Issue . We can move things on to whats next in the agenda. Stefanie first of all, thank you for having me. Investors, one of the overwhelming reasons they care so much about health care is what it could mean for tax reform. Passink health care can both chambers and be signed by President Trump by the august recess. By the end of next month, which would then allow the senate and house to fully pivot to tax reform during the latter two quarters of the current year, create a way for them to pass something by may of next year. Your point about the early months of next year being what youre hearing is very similar to our view. Jonathan is that actually your base case, may of 2018 . A lot of people were hoping the summer of this year. Is it that difficult to get done . Stefanie i think Health Care Gets done by august, i was talking tax reform. Were hoping People Health care can be done by february. And that would have allowed them to turn to the complicated decisions around tax reform in those debates, which are as, if not more complex than the health care debate, which require additional months to litigate some of these most contentious issues. The same thing we will soothe tax reform. I know there many for the reasons why they would want to get it done as quickly as possible, but the reality is that they need to deal with some pretty contentious issues. Without a true forcing mechanism for them to vote on anything, because he bleeding into the First Quarter of next year. Alix the point becomes whats baked into the market and what is not . A look at Health Care Stocks and we see the Health Care Sector really outperform the s p on a normalized basis over the last year. Was this new Health Care Bill from the senate enough to still galvanize performance of the Health Care Sector . Stefanie yeah, there was sort of a rally among Health Care Management companies and Drug Companies yesterday. I think the initial reaction to the senate bill was sort of in part that looked a little meister than the house bill a little bit nicer than the house bill. Theres this issue that investors want to see the republicans are actually policymaking. Ofpart, theres a lot confidence issues baked in, in my opinion. The reality is with the health care what the health care likely placeis downward pressure on a number of sectors within the health care industry. Theres a little bit of a disconnect in how these industries are reacting. Alix is it going to be the insurers exposed to medicaid or hospitals perform up . Or pharma . Stefanie pharma shouldnt be impacted significantly by this bill. Hospitals did hit the hardest, because their fundamental largest great that they are standing on. Any loss in coverage for their patients makes it harder for them to receive compensation for care. Stefanie miller of highsecurity is, thank you. Coming up, the former ambassador to china weighs in on the Health Care Issue and when will we get tax reform. From new york city and viewers worldwide, you are watching bloomberg tv. Alix emma this is bloomberg daybreak. Theanks have cleared minimum thresholds in their abilities to withstand economic shock. Morgan stanley did trail fears peers. Results from the second round of testing are due wednesday. Toshibas shares have been promoted to the second section of the tokyo stock exchange. They asked for an extension to submit its earnings report. In newlders equity smith territory. Its been rocked by losses. Tesla music wants to go along with its cars. They are in talks with record labels about starting its own music streaming service. The carmakers already offers spotify in europe, hong kong, and australia. Tesla works with slacker in u. S. And canada. At your Bloomberg Business flash. Alix you just brought up the stress test and i want to take a look at how he banks are performed today. Wells fargo and bank of america up slightly in the premarket. Where 25 drop in home prices everyone sailed through. Morgan stanley trailed its peers in fundamental leverage ratio. And what that payout can actually get you, Bed Bath Beyond getting hit in premarket down by almost 9 . Dropping,ales earnings missed by . 13. The company declined to update its outlook, never taken as a good sign by the market. If you have traffic in stores and malls fallen, but you Online Stores moving higher. He came with the cost, much higher marketing costs. Therein lies the rub. Blackberry getting hit down by a, this company is in essence Software Company and Software Sales came up short. , and they 8 light announced a 31 million Share Buyback program. It had a huge run so far over the past year, with a huge turnaround for the company. Jonathan coming up on this program, we talk oil, heading for a fifth weekly decline. We get behind that would add oor. With ed m futures a little softer, the s p 500 on the week for the much debt and futures are unchanged as well. The story elsewhere, treasuries on the session yields high by a single basis point, to 60 minute 10year and weaker dollar