Welcome to bloomberg daybreak europe. Manus we have a stacked lineup for you, a little bit of a nordic flavor and will kick it off. Anna nordic numbers coming through, the bank in stockholm sweden, and theyre waiting with the head or decision. More on that in just a moment. Well get to the secondquarter ofbers, above estimates 18. 8 . The Net Interest Income 1. 18 billion, below the estimate of 1. 21. This,ne was looking for will the domicile stay or go . They now say they will make the final decision in september about the domicile. Now saying it will be a little later. That sweden considered they will consider joint banking unit. Copenhagen also tutoring joining the Banking Union. Finish be a danish or destination . Us in about 15n minutes time. With battling it out oracle and elsewhere. 500 Million Euros is what youre getting with the Share Buyback. Forecast,f revenue they are raising the overall revenue forecast based on the foritional, the full year operating profit will be between six point 8 exploit 87,000,000,000 euros. You get a guidance which is uplifted and the backdrop to this, the balance between bring in on the cloud business. And to what extent the euro, and we will talk about this through the next hour and a half, the noneuro revenue business is only 55 of the business. To what extent is the ceo concerned about the value of the euro . You will have that conversation at 11 30 a. M. U. K. Time. Anna lets get to the risk radar in the asian session. Asian stocks up for the night day, all eyes on u. S. Stocks read no change in the doj, which is seen as broadlys 40. We put the aussie dollar in as well. We had seen us urge earlier on on the jobs were for but then it retreated a little bit away from that. Manus and the eurodollar just off highest levels. Its how much is invested in todays News Conference with mario draghi. The market is net long for the first time in three years. Speculators, if you dont get a older locks scenario, does he stay a little bit hawkish to keep september and play . Could see the market cascade back down. All eyes and years on mario draghi today. Anna secondquarter net income coming in below estimates. Lets get the bloomberg first word news with Juliette Saly. Donald trump associate republicans they should stay in washington until they repeal obamacare. The move sparked renewed negotiations todays after efforts to enact a new Health Care Law collapsed. A group of about 20 senators met last night to hash out possible steps forward, including a measure proposed by mitch mcconnell. U. S. Senator john mccain has been diagnosed with the type of rain cancer that was discovered when doctors remove a blood clot above his left eye. Glioblastomad a and he has been recuperating at home since the procedure to President Trump said his halted prayers are with mccain what president obama said he is an american hero. President trump has said that he would not have appointed attorney general Jeff Sessions if he had known that sessions would recuse himself from overseeing the Russian Election meddling investigation. He called the decision very unfair to the president. In interview with the new york times, trump accused Robert Mueller of running an office rife with conflicts of interest. China has agreed with the u. S. To start constructive cooperation to narrow its trade deficit. The statement from the Chinese Foreign ministry came after highlevel negotiations yesterday with the worlds two biggest economies unable to produce a joint tenant. The talks got off to a tense start as wilbur ross upgraded china over trade imbalance in both governments canceled their Closing Press conferences. The french finance minister has said the u. K. Must per estimate to the repayment of funds it does to the european union, citing 100 billion euros. Said we want our money back. He added that talks on the refund less form the basis of brexit negotiations. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Stories on there bloomberg at top. The rally continues on low levels of volatility in asia. Asian stocks up for the night consecutive session. We are seeing the msci asia the index at a level weve not seen since 2007. Cap ask of japan stood expected. The asx 200 looking at a good as well although the aussie dollar has clawed back a little as well. Unemployment picking up slightly to 5. 6 . Watching,tocks are still a lot of focus on the deal out of hong kong. Deal. Partner joined the Morgan Stanley saying the injection is very positive. Its up almost 16 . The Energy Producer looking good, the biggest jump in seven months on the upgraded output. Some weakness in some of the korean stop. On lcd panelnote prices coming under little bit of russia. The aussie dollar retreating, have a look at this chart. The aussie dollar trade weighted index remaining stubbornly high. It has risen 6. 5 since the start of june. Weve heard from the hsbc economist saying the Interest Rate hike usually as about 5 to the currency. Cash rate which is at a record low of 1. 5. But the stubbornly high aussie dollar creating headaches for the rba but not able to through the benchmark today. Manus thank you very much. Took no stepspan to dial back there aggressive monetary Stimulus Program even as the other banks around the world are looking for the exit. Anna it didnt acknowledge it was too optimistic on the 2 inflation target. Us tokyo. Ays joins very good to see you. They did it for the sixth time, so im not sure anyone was apprised. Someone say theyre more realistic on inflation. Maybe not yet realistic enough. What did the boj say today . Japan kept all of its policy tools in place, paddle to the metal on stimulus, unlike other Central Banks. You still insist it will hit the inflation target even if it takes longer than they would. As the date for when that will 2 target for the fiscal year starting in 2019, no sopranos just thought they would wait. Its a delicate issue for the bank of japan, finally acknowledging it will take longer. 1. 4 makes theom optimistic on growth. They see the economy expanding modest modestly. , they have to do that to buy the bonds to keep the 10 year note yield a zero. ,any people telling us today bank of japan officials and others, that even this is still optimistic. Lets listen to it former bank of japan member. Lets they have become a littt more realistic. Today i think the boj [indiscernible] is still we think that this unrealistic. The bank ofe sure japan governor will be peppered with all kinds of questions along these lines, are you still optimistic when the target is 2 and inflation is zero point do were. 4 0. 4 . Manus thank you very much, Kathleen Hays in tokyo. Lets get to our guest, chief economist at japans macro advisers. Thank you so much for joining us this morning. Target,in the inflation probably until march 2019. What does that do to the credibility . Time he would delay and extend and pretend. What do you make of this extension . I guess he must be regretting that he made the promise of a 2 inflation target in two years time. Having said that, the last four years, do believe the japanese economy is growing strong. There is a labor shortage everywhere. I have a sympathy to the governor on this point. Anna you point to the upside, but lets focus on the thing he has promised to achieve and has struggled to come and that is around inflation. What is the risk with the current strategy that after he starts to heaven adverse impact on the Government Bond market, that he is forced to change his policy . Right. There are a number of areas. Its pretty bad timing. I think it would be best if the government delayed it again. Another more important risk is ministerlity of prime abe. The Prime Minister and the government have been strongly backing the aggressive stance on inflation. But there goes the support for bank of japan. I think without the strong backing up the government, the bank of the payment start to feel it cannot maintain the current aggressive stance. That is the biggest risk. Manus theres another element of risk, the bank of japan may materially entry into the market just 10 days ago. It struck down on the tenure governor boniors of the market and went up the belly of the curve. Sending af japan is clear message, they are absolutely focused on the. 1 in terms of yields. Is at risk, giving the shifting global rate environment . Its absolutely the opposite. Its a great opportunity for boj. That betweenrate the yen and dollar euro will benefit the bank of japan because the yen will be obviously weakening. We could see reemergence of a carry trade for the Global Investor borrowing in and investing in interest yielding currencies here that could weaken the yen and get inflation. Thats also for the japanese stock market. Boj being the only central bank to keep one dated easing, that is a great opportunity for the bank of japan. Anna the other thing they are buying is etfs. With the booing see weve seen in global stock, a difficult is it becoming to explain the involvement of the central bank in the japanese stock market . I think the stance of bank of japan is very clear that buying thek is a part of conference of effort to raise the price. The more the bank of japan buys anything, the price should go up. We should take the stop per is purchases part of the company to plan for boj to keep printing notes and stock is just one of them. Manus lets go back to the dollar in come the possibility of another carry trade reemerging. If i look at the dollar weakness, is the yen risk that donald trump does not deliver ay second half of the year on fiscal plan and the dollar remains under pressure . That is the real risk, or part of the risk, isnt it . Takuji i wouldnt say that. Riskarry trade could cause if it becomes excessive too fast. But the bank of japans primary is to get things that are not above anything. Its great opportunity to let the end we can. Government can defend against other policymakers that they are doing Monetary Policy. I dont think it is a risk for the boj. I would emphasize its one of the last opportunities for the bank of japan to reflect the japanese economy in the next three years. Anna and you think it is still possible with the current plan . Estimate that the boj keeps pushing out further into the future, theyve moved the target six times in terms of when it will achieve it. I do you look at their inflation targets . But they are realistic estimate of where they think inflation will the or is it just a means to increase expectations in the market . Takuji i think it is becoming realistic. Yearsis given itself two to let the economy grow and let the inflation rise. Inflation, i2 think it is realistic. I do think you made a big 2 take 2013 to use the word in two years. I think that was unrealistic and as imply, it does hurt the credibility of the bank of japan. This. Balancing act is the growth story and the political story, you mentioned abe and the growth trajectory from the bank of japan. Is the economics at risk or could it materially change if there is a new Prime Minister . It depends on the next new Prime Minister. The common nation of expansion is structural reform, this standard Economic Policy to get any economy out of deflation. If we get a sensible Prime Minister, they will listen to economist, i hope, and when they choose the correct policy, i. Hink it will be very similar we will see it they are listening to the economists out there. Coming up on the program. Manus we havent earnings piece for you. We will speak to a ceo who gives us his first thoughts on the day. Thats coming up. This is bloomberg. Anna welcome back to bloomberg daybreak europe. To scandinavia. The bank missing the lowest analyst estimates. Casper joins us now from hong kong in his first interview of the day. A very good morning to you. We will start with a decision about the headquarters of the business and whether you decide to move that. Give us a bit more insight into what you will be considering in september. We understand that neither denmark or sweden will have made a Firm Decision by september. How are you able to say that will come in timber . Casper will come in september . Casper we decided to not make the decision yesterday. In anot a simple decision think we are getting ready to make that decision. It is an important thing. Bank andmultinational the four markets are all part of the single market. And fairredictable regulatory environment. Importantg union is element here and we need to assess that. Anna if the decision by the danish and swedish government is that you dont know the interest of timber, i guess your by september, i guess your takuji i think weve come far no to make that decision. Think its right to take these extra few months and then make a decision but i think we are ready to make the decision in early september. Manus when you see what happened in spain and italy in the debateesolution, of issues in the spirit of the law and the actual law, the risk of a nordic lindner becoming part of the banking unit, does that fit comfortably with you . I think when you look at the spanish case, i think that was handle in line with the new regime that is put in place. About bailoutst but theyll ins. When we go forward, it is important to have a level Playing Field for everybody is think thisd i provides a. Manus theres a proposition out there that you are thinking about this. Critics would say you are andntially hedging yourself using your weight and heft to extract perhaps better terms in the best possible deal. Thats potentially what your critics and some people would say. How do you relate to the charges from your critics that youre just swinging around your size and scale you are arbitrage . Casper im calling for a level Playing Field and being treated the same as my european peers. Im calling for everyone to be treated the same and not arbitrage. That is both an assumption in accusation which is plain wrong. Anna on the subject of the headquarters, we talked about the banking unit and that is clearly part of the story. What else do you see need to see movement on to convince you to stay in sweden . Casper i dont want to start speculating on what will happen between now and then. We have come a long way in our assessment and im confident we are in a position to make that final decision in september. Manus lets get to the nittygritty of the business. The headline is you missed the lowest estimate, 700 40 million. The numbers, the market will question the numbers. Give us a sense of what is going on behind the business. I should we interpret this . Casper we had a stable or in the second order it would not our best order. There are some specific Second Quarter issues there but we are in line with us year. When we look at the first half of this year we are ahead of last year but percent. We have a Strong Commission line and what is characterizing the order is our cause. We predicted we would have high costs in the second order in the first half of 2017. So that actually comes as planned. The reason is going through a tremendous transformation program. We have always said that. Cause scorethe coming down in the second half of 2017 and we still maintain that is what is highlighted second order, according to what we had expected as well. The you had talked about need for investment, tell me about the margins you are able to generate at the moment and how the competitive it environment influences those margins. Is there less competition out there at the moment . Casper our lending margins have been stable. On our deposit margins, that is also positive, so we both and it will hold those margin and they have been improving. Of course we will work hard to continue that trend. Outlookn terms of the for the economy, looking at some of the gdp has, we seem to have turned a little bit of a corner there. Give us your assessment of the economy terms of what is going on, how is the corporate environment . Give me your perspective. Inper for the first time six or seven years that ive been with the bank, the ceo more aligned, synchronized picture in the nordic region, growing in a healthy way. It is not really been seen yet in loan demand, but overall, the economic backdrop for the future foreseeable future is expect that i would to also be seen in the business down the road. Anna thank you for your time and we look forward to speaking to you in september orbit for. Thank you very much, the first interview of the day. Early or ar too glass of cognac. They are confirming their guidance. Cointreau confirms their 8 dance saying sales rose beating the street. They are confirming the fullyear outlook. Montreal is mad. Anna we have a read headlines crossing the bloomberg about for your net profit and the estimates for that. Originally it was 1719,000,000,000 dollars coming in, they raised their fullyear outlook. Theres a number of warnings out there from the central bank, so to speak. Are you seeing what is going on . They see positive development and horizon lending. Fixed income commodities in currencies was a key area. 5. 60 9 billion is a little bit below the estimate we have out billion. Ch was 5. 70 5 they have done incredibly well. He spoke to the ceo last time around and said they are the power health terms of fixed income commodities. We will have another conversation with the ceo joins us, total income of 11. 74. From the numbers french advertising giant under a new ceo at his business. Organic growth coming in again sent estimate of. 5 . Commentary about the rest of year coming from the ceo, he says it is too soon to speak about 2018 targets. He said that the ceo specs improvement in organic growth to continue in the third order. Last month he succeeded worries levy maurice levy and made it into the world are you advertising agency. 45 minutes of conversation, they will announce the Monetary Policy decision. Caroline, our reporter in frankfurt. Thank you for joining us. , heook three weeks ago lit a torch paper of