About a hard brexit. The boj has to push back its inflation target one more year. Selling on the margin when it comes to the german 10 yield bund. Morning,ming up this 7 45, the important ecb Rate Decision followed by Mario DraghisNews Conference 45 minutes after that. Initial jobless claims and the fed survey. At 10 a. M. We will get the indicators. After the bell we will have fourthquarter results from microsoft. Now, lets get an update on headlines outside the business world. Emma a startling admission from the president about jeff sessions. The president tells the New York Times he would not have appointed sessions if he knew that he would recuse himself from the russia investigation. He called sessions decision unfair to the president. The president may take another shot at getting a Health Care Bill passed after the present parish republicans to stay in washington until they repeal obamacare. Republican senators met with the president. Mitch mcconnell still was to hold a vote on a repeal bill next week. Senator john mccain has been diagnosed with brain cancer. His office says he and his family are reviewing treatment options. The Arizona Republican is 80. President ial andidate and spent 5 years as prisoner for after his airplane was shot down. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. A main event for global markets. Mario draghis tone will be closely watched. He will attempt to balance optimism over a desire to move as slowly as possible when removing stimulus. Ecb has forecasted to keep rates unchanged amidst an improving backdrop. The bank has been examining options around asset urges says. Joining us is the Central Bank Team leader who runs our coverage in brussels. Layout the changes we could see in todays statement and in the News Conference as well. Probably the biggest focus will be if the ecb drops the easing bias on qe. It is a tricky one. At the moment they by 60 billion euros of debt through the end of the year. They said in the past they would go a long rate if needed. It sounds ready to increase the the or duration of purchases, monthly purchases, if the outlook deteriorates. They reserve the right to go from 60 billion to 80 billion if it wants to. If the ecb were to drop that and purchases,ide to its that would be taken as another step to the path on normalization. Everyone waits until september, but ahead of september we had a speech from of Central Bank President portugal. Does he have to clarify the message in that speech after some people apparently thought the market this touched it . Misjudged it. Nervousme are more about market reactions after what they saw in centra . Mario draghi intended to send a balance message as the economy grows at financial conditions loosen. You could pull back some stimulus in line and remain at the same level of accommodation, but you have to do that actually. He may send that same message today. Jonathan we did reporting that we understand they are preparing a plan to announce may be in september on what unwinding qe would look like. We have any idea of the plans they are looking at currently . Paul we know they are comprehensive. They include a straightforward tapering plan down to zero, or ad hoc announcements, or combinations of those and other methods. There are Different Things to look at. The experts within the ecb, that is not necessarily the ones at National Central banks, are analyzing their options. At some point that needs to be formulated into a proposal made by the executive board. That hasnt happened yet. That is something to look out for in september. Jonathan thank you for joining us. Joining us from london on the ecb is Michael SneedMichael Andrew wilson. Always good to catch up with you. I wonder how you add goldman are thinking about the situation. the balancing act the ecb is trying to do is to give some clarity that they will gradually ease policy without toting financial conditions tighten so much. It was a surprise to them when mario draghi announced this last month. The euro is up one point five percent and financial conditions are tightening. What we are looking for is to try to balance that to give some sense they are going to proceed with the taper. September will likely be more detailed. He will try to walk a fine line. He doesnt want to see the euro at 1. 16, hee are doesnt want to see it in a stronger. Alix the trifecta between inflation, deflation, and reflation. Mario draghi phil have to drive scenario,lationary not inflation. How do you think he will do that . We think he will be looking at a holding situation. The ecb has time on their side in the fact that they have the meeting in september and the deadline for giving an extension of the qe program not until october. Draghi to rush for set up the market too soon. David you said they have to be concerned about the euro, where it is. Will mario draghi admit that, at least in the q a . Will that in itself have an effect on the euro . Andrew he will reference the broad tightening taking place. They dont like to comment on Exchange Rates specifically, so i think it will be an oblique reference to the tightening, but he will be careful not to give a sound out that the euro is too strong or twoweek. I think it will be there that the tightening that has happened impacts theal and inflation forecast. The last inflation forecast come the eurocentric was 1. 09. It has put downward pressure. We wont see that and sale september, but they are conscious that a stronger euro puts downward for downward inflation. When this is the conversation were having about the ecb used a Central Banks thing heavily involved in the markets. We are at a Tipping Point. We are at a Tipping Point that when the fed, the ecb, will be moving back. How does that impact yields . German yields have doubled. Still, the market volatility makes our life more interesting and gives us opportunity. Jonathan what are the opportunities . Andrew in those relative moves. The divergence in Central Banks. Ecb will be doing quantitative easing or reducing next year, they will be doing it gradually. We are optimistic the fed will be raising Interest Rates. The ecb will not be raising Interest Rates next year. That craze opportunities on a relative value basis. Alix what about periphery old that . Peripheral debt . Long as the ecb is doing this gradually, they will say inflation is low and they are gradually easing, so i think al debt looks ok. Yields went lower. Could we see something similar happening in europe if the ecb moves too quickly . Andrew i think it is unlikely. Behind the taper tantrum and the rally and bond yields was the sense that inflation was never coming back. I think in europe inflation stays low. It might be up a little because go lower, but i think inflation stays relatively low. You are both going to be staying with us. 7 45 used in time, the ecb policy decision followed by Mario DraghisNews Conference 45minutes after that. From new york and london, this is bloomberg. David im david westin. Donald trump is six months into of his presidency. Here to give us a status report is our chief washington correspondent kevin cirilli. And the Bloomberg International economics correspondent michael mckee. Lets start with you. One thing the president wants to do is repeal and replace obamacare. Still no big developments on health care. The cbo scored the latest repeal bill. They say 32 million americans would lose coverage over the next decade. That it would lead to a billion dollar deficit reduction. It is unclear if the Senate Majority leaders position and assertion that he will bring this up for a floor vote, or try to next week, with pass. Behind the scenes, lawmakers are looking to move on to tax reform. The House Budget Committee laying in a markup the reconciliation process and setting the stage for the roles that they will need to follow, not only for the budget, but to pass tax reform and repealing parts of doddfrank. David that is the pesky congress the president has to deal with. When it comes to trade he doesnt have to deal with congress so much. The u. S. China negotiations, how did they work out . Everything we know, they failed. Nothing came out of yesterdays meetings. It appears that may have taken a step backwards. The harsh rhetoric, the cancellation of the News Conferences, the lack of statements, any specificity, suggest they did not make progress and actually have e have not lived in that direction. Wey still have steel, but dont know where they go from here. Toid it is fair enough President Trump that he hasnt done this job before. Is there any indication that he and his team are getting the hang of things and learning how to pull the levers in washington . Policy, iterms of spoke to several sources in the Treasury Department who says they are in daily negotiations and meetings with capitol hill to learn from the lessons from health care in regards to tax reform. They expect to release a plan by mid to late august. Trying to get everyone on the same page to avoid the differences on display with health care. That is a tall order for steve mnuchin. Yesterday, a full display of divisions between republicans on the border adjustment tax with several different republicans taking different positions. David thank you both, very much. Alix the clock is ticking when it comes to getting something done. Mohamed elerian writing that constitutes only Foundation Stones for the comprehensive policy effort needed to generate a high and sustainable rise and more inclusive Economic Growth. It names to be supplemented by further efforts to enhance needs to bet supplemented by further efforts to enhance productivity. To dealing with the expectation of something from d. C. , what will be your base case . You could argue that sentiment is still high and that is a positive. Michael the key thing we are looking at for the administration to be delivering over the next six months is the of changing tax reform. Sophia there has been very little attention put to this. So far there has been very little attention put it this. If we look at the earnings expectations, a lot of that was over expectations we would see earnings pick up as tax reform takes place. That hasnt come through. So far, earnings are doing well helping to support the elevated evaluations in equity markets. If we dont get tax reform, there is scope for equities to unwind. Alix by how much . Michael we like to look at u. S. Equities first. We think over the next six to 12 months we could see 15 outperformance of european equities. Alix we were talking about Central Banks in the last segment. Some officials baked some stimulus into their forecast. If they bake that out, what is it due to the june rate hike cycle . Andrew there is not a lot of optimism on Getting Health Care reform. It looks like it is on the back burner. Taxes, i dont think theres a ton of optimism. The 10 year bond yield, we went all the way to 260, now we are 2. 25. To there is room for upside surprises. It will also come back to the fundamentals and looking at the labor market. You have to balance the optimism over the potential tax cuts. Do not forget to keep an eye on the labor market. The Unemployment Rate is something the fed will be looking at closely. We have easy financial conditions, it is bizarre that they have raised rates three times and financial conditions have gotten easier and they have a tight labor market. It is hard to discount how much tax will impact growth. They will be looking at the labor market saying we need to tighten things up. We think the fed is moving there much on a tightening path this year and next year. Jonathan breakevens have rolled over. We talked about opportunities in europe. Talk about inflation in the United States and where the opportunities are. I think inflation will pick up. Would we look around the rest of the world there is not much inflationary pressures. The u. K. Excluded. Elsewhere, japan with the boj pushing out there inflation. I think that inflation could surprise, that is something we subscribe to and gives a chance for inflationlinked bonds. I think the market will be surprised about the amount of rate hikes that have to happen because of the inflationary pressures building. Market weree persuaded nothing could be done on taxes it could affect equity valuations. How subtle is the market in interpreting things . We are seeing washington backing off the fundamental tax reform, something more modest, nonetheless tax cuts, 16 corporate rate, it might be 20 . With that form of lesser tax cut, will that be enough . I think atmichael the moment the market isnt putting too much attention on detail. The market has seen the amounts of liquidity, what is happening with real rates, the message from yellen, and going into equities. I think around reforms, at the has not putmarket much on 15 or 20 . It is more the headline message that comes out of the administration. At the moment there is not really a headline message for the markets to digest. Alix and the asset classes, what is the biggest miss price . Treasury yields are too low. It should be close to 3 . I mentioned before we have been 60 a few months ago. If i said 3 then it wouldnt have been a surprise. Early part of next year. I think the trend will be pretty clear. And andrewel sneyd wilson. Both of your sticking with us. Coming up, erik nielsen will be joining us right before the ecb press conference. This is bloomberg. Jonathan emma the British Government needs a few more weeks before deciding to let 20th century fox takeover sky according to the culture secretary. She may refer the deal for investigation of murdochs media influence. The biggest maker of chips and mobile phones has a the klein and profits from revenue. Qualcomm says sales in the Licensing Division has fallen. Tmobile has raised its forecast for adding wireless subscribers in the u. S. Threempany expects to add. 6 million customers in 2017. It raised its profit outlook suggesting tmobiles promotion and giveaways are not hurting the bottom line. Here is how tmobile stock is performing in premarket, up over 3 . The ceo says tmobile has new m a options and that profit will rise this year. Good news for tmobile. American express down by over 1 . It offers more rewards to retain rivals for the premium cards. To 1. 3income is down billion. Heating up. Best of core, a utility based in and canadas hydro one making a bid for the company. That stock trading a little bit below that level. That brings the total u. S. Energy buying to 14 billion. Interestingindustry i find the Utility Industry interesting. It has gotten hit. Theyre so much natural gas in the business it has been hurting pricing across the board. That industry seeing a lot of tieups. Jonathan thank you. Will bring you the ecb policy decision followed by the president , Mario DraghisNews Conference 45 minutes later. Futures unchanged or become men in at all time highs at major benchmarks in the United States. 1. 15. Rodollar, sub you are watching bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Session. E into the on the nasdaqgh as well. Up about a half of 1 . That put the retail sales, but it is doing nothing for sterling. They should cross out the story. Lets get you some headlines. Sterling. Heres emma chandra. Russian lawyer. Wouldrity of americans pay higher gas taxes to fix crumbling roads and bridges. Today, Business Executives offer their views. Chama, emma chandra, this is bloomberg. Spoke in a message saying the following. We will try to minimize disruption, but inevitably, roles will need to be removed. We are down by about 2 10 of 1 . Zurich to help break the story. We havethrough of what seen and did not know yesterday. It is a straightforward story. Deutsche bank ceo was addressing employees. We are familiar with the content of that that the bank should get ready for brexit and the bank cannot wait until the final negotiation has been done with regards to brexit. This is a deal we dont know. This is why we need to prepare for a hard brexit. This includes establishing new jobs and also moving from london which is a big entities for Deutsche Bank. A lot of people who watch the story would have sat there and ght this is a ceo walk me third about what the others are saying and perhaps why frankfurt has become an attractive destination postbrexit. I dont want to lobby for frankfurt, but you have seen a lot of noneuropean i guess it comes down to regulatory map. Guess frankfurt is seen as a to oversee these big banks. The case is probably much more straightforward. Headquartered and it is a german bank. A tragedy announcement has made this clear. Reemphasize our german roots. Making Deutsche Bank more german again. I wont lobby for frankfurt either. And all metal lot better restaurants and hotels. Still with us to discuss market , have you th