Some are coming in. 44 basis points, a big move this week. Sterling is a little bit weaker after the weaker confidence numbers. The vix is up 50 yesterday. Its the weakest quarterly average since 2006. Gold futures pretty much go nowhere. Is important Economic Data coming up at 830 a. M. Eastern. May, data is of being watched. Time, they are calling for little change to the preliminary estimate. At 1 00, investors will be watching the weekly recap. This is the longest uptrend in two months. Alix look at that. Ofy good Economic Data out europe today. A prudent call for approach to normalization. Thats a good sign. They want to see proof it it can be sustained. , we haverom london Michael Mckee from bloomberg. Do you see the reflation in the day that . Mike you do a little bit. Its hard to take anything out of one month. The Energy Prices are out of the european numbers. Inflation rose from the prior month. You can see it in the energy numbers. And only 4. 6 in may 1. 9 in june. You have an energy influenced number. Its not a huge change, but it does tell you there is some underlying thing going there. Joanathan does draghi likes what he sees this morning . I think we are at a reflection point in the eurozone. We doubted if it was debt a few weeks ago. Its coming back alive. It is in europe. Its not from commodities. It is from credit coming back to the economy. Banks are starting to lend again. Its very slowly from wage increases. Mornings to be done on that front in germany where wages are very low. I think the trend has become sustainable. You can see the leading indicator from bank lending, confidence at the business level. How quickly will we realize it for a few days ago the board will split. We have seen a more clear push toward recognizing this inflation trend. Alix its really interesting. When you have the ecb trying to walk act draghis comments, today we get some firming and the data. The euro is actually lower. What do you make of the move we saw in the euro this week . Alberto i think central bankers cannot unsay what they have said. Once you say there is a trend in inflation, the market was on prepared. You cant just walk back and say i was joking. Clearly, something is moving in the ecb board. The core countries are pushing toward normalization with Interest Rates. Nobody benefits. Banks lend less. You need to normalize a little bit the policy. Otherwise, you are pushing on the accelerator with the handbrake on the other. I think everybody wants that data. Smart and dong to it in a gradual weight. Alix ok. This is what janet yellen wanted to do. Are we going to learn something . What have they learned over the last to 72 hours . Michael you can set off a tantrum. Trade is going to change, you get this kind of reaction. Thats why they walked act of it. Its not that they dont want rates to rise, they would like to see them rise gradually in a prudent manner rather than all at once. They wereso much trying to send the wrong message, dont overreact. Thats what janet yellen has been trying to say. Anna we have that data out this morning. We are looking at what the markets have done. The euro may be higher. When you look at fiveyear fiveyear expectations of inflations, they are down 16 basis points. Does that reflect skepticism . Investors have been hurt on the reflation trend. Having said that, its the lowest part of the market to move. Expectations, we have seen already the euro going above 114 and we think that will continue. We are going back 50 basis points. Financial equities are pushing higher. There are two reasons why the ecb may continue on the hawkish trend. The situation across banks has become cleaner across europe. Political risk is much lower with mccrone and merkel working together. Favoring payments to periphery countries. The greek situation has been clarified as well. Get to the german elections, this opens the way for the ecb to normalize policy. Joanathan lets say we get to 120. That is significant timing. What does that mean for the ecb . Can they do much at all . Not, this is not a target we have in the next few weeks. We will recognize the european economy is growing much faster. The u. S. Economy is growing, and it acceleration has declined. The risk in europe is disappearing gradually as you see macron and merkel and some coalition. We think there is some detail. The move has already been very quick. Is a first. Today it will continue to move. Everyone has position until a few months ago. Ecb to raise the policy rates and change policy, normalization would be on the table. I know we have loans at the highest level since 2014. That is the stage in europe. Personal income and personal spending, that is still extraordinarily important. Michael we are looking at the components and what is driving it. Said ton took expect low numbers. Go back to the cell phone price wars. They have a major effect on cpi. Basically, the fed is saying dont look at the yearoveryear numbers so much as the components in which they are trending. You are seeing some pressures and other areas. Alix nothing to see here. Move along. You will be sticking with us. Come up later, we will discuss the Health Care Bill and what it could mean for hospitals, Health Insurers and providers, and more. Former ceo of mina health care will be joining us. This is bloomberg. ; shares of nike are rising in premarket trading. The Largest Sporting good maker has a uptick. Sales will rebound in north america. Securities and Exchange Commission could have a hedge funds handling hot ipo shares. Thatators are concerned the select few are getting access to profitable trades. Are up 16 d shares on the first day of trading. Berkshire hathaway will buy 700 million shares of bank of america. The prices over seven dollars a share. Will convert that into common stock. Bloomberg this this flash. They are 1 higher on that news. Since they raise the dividend yesterday, it is higher than buffets payout. Berkshire will make money on common. Its kind of a nobrainer. That gives bigger dividends. What we sawe yesterday, a big selloff in the tech industry. There was money in financials on that. Take a look at the value versus growth index. It underperformed so far this year. The financial. In the back half of the year . Is tech leading the way . Alberto its going to be financials we think there is we are coming out of the zero rate balance. Price goes to infinity. Thats what happens with tech stocks. , youterest rates normalize go back to a value in the market. You go back to insurance and other sectors which benefit Interest Rates. When you look at the sector heavytion, we are still on the tech sector and utilities. Dividends are stable. What we need to go into is things that are linked to higher Interest Rates, where dividends can grow as Interest Rates go up. Thats a we have seen this week with the fed test on the u. S. Banks. Emma is the risk that trump under delivers on rate hikes . Alberto its probably the fed it. To some extent, i think central bankers are worried to build another downturn. Want to gon doesnt away and leave the fed with record low Interest Rates. You have a slowdown in very little buffer to Interest Rates. Surprise with the relatively weak inflation we see. You could see the market pricing. You can have a repricing and stocks. We dont know. Some sectors are very vulnerable. All of the plays of the equity plays where you can get stocks for yield. Bonds forbeen buying Capital Gains for years. Joanathan many people talk about that. Others of said the Tech Knowledge he play was about international growth. Its not a regional story. Getting that exposure to the Global Growth of the last six or seven months. His thats what is going on with tech . Alberto some part of the tech sector, you have that growth story. We do have to keep in mind that if the fed surprises, you have a stronger dollar. Your export channel suffers. Happens, if the fed surprises with a stronger dollar, stocks that are exporters in emerging markets get hurt. There are very few areas where you are ok. Just a follow this into the previous story, what we actually had was a structural post crisis in europe. That is changing. That is what has driven the last couple of months, people are starting to reallocate into europe. Is that a bigger theme for the second half . Alberto there is a theme of underinvestment in the eurozone. Until a few months ago, investors were afraid of the complexity. Elections, the french election, its too complex, im not going to invest in europe. Yields inery high some European Markets. , thee was trading equivalent of 9 in dollars. , wen american countries have other European Countries willing to restructure debt. The risk event is over and we have macron and merkel working together. Is putting frexit in context. The u. K. Has become a much more uncertain place. Of total reserves across Central Banks into the pound. That you think about it, is three times the weight of the u. K. Gdp globally. There is a structure of reallocation in the eurozone which will push europe higher. Alix group stocks. 22 , the bestned game we saw in the European Markets. All right. You are sticking with us. White andthe red blue. That leads us to july 4. Hopefully you are tuning in to watch myself and matt miller. We are going to cohost the boston pops fireworks spectacular. Tune in, watch it. This is bloomberg. Joanathan this is the first test of an alliance with the Northern Island unionist party. Oppositionof the push them to remain in the Single Market in your. Simonre, we are joined i kennedy. If anyone voted for the labour party and hope they would get a softer exit, did they get some bad news . Simon they got a bit of a wakeup call. Labor has had problems with us before. When you look at the constituency, a good number of those are from prebrexit areas where it areas. This has been a problem for the leadership. Last night, Jeremy Corbyn signaled he still favors a pretty hard exit red thats a wakeup too many who would have opposed the election results. It wouldve allowed him to softened his stance or did stance. Until the last couple of months, Consumer Credit was surging. The savings ratio was a record low. We are starting to see some cracks in signs that a squeeze has started to take place. Simon absolutely. Speeding away. The bank of england had some comments this week. Retail sales are down. There are signs that the economy is starting to slow. Its great to have you with us. The data is staggering. Its up 10. 3 year on year. Growth the highest rate since 2005. Emma weve got the chart of that. Lets discuss many topics,. Ncluding brexit weve got this chart thats euros this. This is the smallest portion of income sense 1963. Another indicator of how tough times lay had for u. K. Consumer. The ship is slowly sinking. Instead of trying to decelerate this decline, the economy is accelerated there was a. Linked to some of the News Associated with the brexit vote area boat. In reality, we see a weaker pound and the rising cost of imports. Linked to some of theinflation is rising. Now we see consumers starting to realize it. If you put his words into context, the bank of england knows inflation is rising. They know that a weaker pound is going to make things worse. They are trying to talk the pound up. There is limited room for them to hike rates. Consumer is so levered, you risk crashing the economy. The bank of england is really in a corner. Sterling strength over the last few days is something we would take. We dont think the bank of england will ever raise rates in the near future. Joanathan are there other Credit Opportunities out there. U. K. Mortgages are being offloaded. They thought it was going to be a big downturn for the consumer. Thats not what you would want to buy. Are there other opportunities in u. K. Credit . Alberto we are very concerned about spending. We think there is more squeeze on the consumer. We would be cautious and we would be hedging. On the other hand, we have sectors with companies that recover bad credit. The debt collectors, we think there is going to be a credit crunch. Joanathan its great to have you with us. You are watching bloomberg tv. Jonathan from new york city for our viewers worldwide, in jonathan ferro. And 21 seconds from the cache open, futures are up a corner of 1 . If you want some sign that the tech rent stabilization, look to your. The outperformance coming from tech stocks if you look from sector to sector. Reasuries on a firmer footing stabilization in the european bond market as well. 2. 26 on the 10year. Eurodollar. By a third of 1 . 410. For the euro on the quarter, what a quarter its been, potentially the biggest since 2010 for the single currency. Lets get you uptodate on what is making headlines outside the business world. Emma President Trump wants republican senators to pass at least something when it comes to their own obamacare replacement bill. In a tweet this morning, the president wrote Republican Leaders put off a vote on Health Care Bill because of a lack of support for the measure. The u. K. , Consumer Confidence has not been this bad since the brexit vote. Those surveyed were less confident about the economy and personal finances. Germany has joined other European Union nations in legalizing gay marriage. Lawmakers approved the measure after chancellor Angela Merkel unexpectedly dropped her parties stance on samesex unions. Global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. Im emma chandra. This is bloomberg. Alix President Trump tweeting, saying of course, he is talking about the Health Care Bill. Kevin cirilli is with us now. What is the rhetoric in washington about the Health Care Bill . I cannot imagine the feel and nothing will sit well with his there is so much frustration right now amongst the republican party. Republican senators in particular about the latest distraction coming from 1600 pennsylvania avenue. Of course im talking about President Trumps tweet about aping the reporters face. We talk about the rhetoric and how it influences policy, but i want to pull up a tweet from lisa murkowski, republican from alaska, the key person that the president needs in order to get on board with health care. She tweeted collins, aan republican as well, another moderate centrist voice saying to reporters yesterday that the president s rhetoric was beneath the dignity of the office. All of this comes as the president is trying to whip votes and unify republicans to get policy. From the sources on talking to, the field in washington, it is hard to fit into something they can get done when the president is bullying a female reporter. Jonathan an exclusive this morning about trade policy within the white house and administration, much of his cabinet does not want a protectionist regime but three of them do, and one of them is donald trump. What is the direction of trade policy now, when are we likely to see some hard policy detail on things like steel, tariffs . Kevin in terms of a division amongst the protectionist and versus thealism isolationists, that will continue. In terms of where the policy is headed, we have seen it in the last month. With regards to the president s policies and how he is negotiating with europe, also how he is negotiating with cuba. What youre seeing with the south korea policy, in terms of forth,ls report, put trying to negotiate bilateral trade agreements. This is where it will really get interesting. The next day hearings are set to begin in midaugust on capitol hill. The white house is yet to release any firm details on how they plan to specifically renegotiate nafta other than to say that that is what they are doing. Alix whats interesting is the trade work and not only hit china, but mexico, china, germany, and the u. K. Socalled energy week, the president announcing a pipeline to mexico, even joking that you would have to build underneath the wall. How do we square these two messages . Kevin great question. I spoke with several sources last week about that. I think there is a push from the Energy Community to essentially say, look, manufacturing jobs that this white house wants maybe are not going to be able want,as large as he would given where automation is headed. As a result, manufacturing jobs potentially not being able to come back in states like michigan, wisconsin, pennsylvania, maybe they will have to pivot toward energy policy. That is the place where the Energy Sector is hoping this conversation goes to. Alix an unbelievable week we have seen in d. C. Energy exports will be a big part of President Trumps plan to change d. C. And the trade balance, but oil is getting whacked so far this quarter. Quarterly average for oil for the past few years. You can see down 10 in the Second Quarter. The worst quarter since the end of 2015. Still joining us is Alberto Gallo of algebras. How do you understand oil right now, then we hit the low, is there more downside to go . Alberto there is more downside. The issue of the growth model of the Oil Exporting Countries is changing dramatically. If you look at middle eastern countries, they are in conflict with each other, going from an environment of 0 public debt to gdp to an environment where they will have to borrow or sell assets from sovereign wealth funds. They are trying to adapt to a old growth model but they have a workforce that has largely been unemployed there is n