For the week. Vonnie 1. 5 Million Dollars worth of savings will help contribute because this is an allcash deal. An exciting day for the industry, specifically when you consider that they have been trying to consolidate and there are so many unsolicited bids between companies, monsanto included, and now monsanto is on the receiving end. Jon and the potential of that deal is being reflected lets get you up to speed on markets. Futures where are we . Im not sure we are that saw on the dow. We will update you on that in a moment. S p futures down. That is one year and not intraday. Moves, theyraday are your oneyear moved spirit lets switch up the board very quickly. Hopefully they are intraday moves through they are one year moves once again with euro down. That is the reality today, down by 10 over the last year. Around thes go world and check in with our Bloomberg Team for indepth coverage of our top stories. Matt miller is in berlin on buyers push for monsanto. Enda curran is in hong kong. We have guy johnson in london on another morning as the u. K. Leaves the e. U. President erdogan tries to increase power. We being lets go to berlin and get the latest from matt miller right there in berlin. Huge deal,g day, a and what is the reaction in the german markets . Matt the reaction in the german markets, as far as the buyers are concerned, has been negative. At stock fell at one 3. 6 . It has gotten crushed this month, down by a fifth of its value. Investors do not like the way this deal looks. The ceo, as jonathan mentioned, has only been at the job in the leading role for a month, but before that he was a strategy chief he has been the cfo, has been at bayer since 1988. He has been offering the best possible deal. One of the investors we spoke as muchs this tops out as they can really pay. Anything more becomes less attractive. Is it going to be enough to convince monsanto . Listen to what he told tom keene this morning. We are totally convinced about the attractiveness of our offer. If you look at the fact that it is a 30 a 37 premium over the others share price, that is a strong testimony for monsanto shareholders. It is also in line with attempted transactions. We are fully convinced that that is a highly attractive offer for monsanto. Matt so he was actually the boss for m a for bayer before taking the ceo job, and he probably knows as well as you and i do that most first offers end up getting up to or dropped. Usually a company will not accept of first offer, that monsanto will say that does not value was highly enough, and they will have to offer more. Moree we will bring you of our interview with Warner Baughman in our next hour. Jon we go live to hong kong now where enda curran stands by. Great to have you with us on the program. They are not exactly explosive words between the u. S. And japan, but the fact that it was played a publicly is perhaps the story. Enda that is exactly right, jonathan. It is one of the starkest differences of opinion between the u. S. And japan in a number of years on Foreign Exchange policy. It comes down to an agreement on what kind of Market Conditions can justify a government to intervene in the Foreign Exchange market . The reason japan is making a stink over it is because the yen has risen 9 so far this year. O said overter as the weekend that he thinks the yen is onesided and speculative. A lot of heavy industry and exporters in japan are urging the government to do something about yen strength. For their part, jacob lew said it is hard to define what is happening in the form exchange market. Isthe very least, japan trying to drive currency lower it haso make clear that the option of going back in disagreement between the big governments, that governments can intervene when markets become disorderly. But it does not look like they will get any support from the u. S. Jon we have this fragile position at the moment. A weaker dollar is good for the likes of china and terrible for the other big economy in asia, japan. How is thisd, managed at a g7 level, if at all . Enda exactly right. Manage athat they can deal with the u. S. , but the fact that it keeps making the point and keeps repeating that he thinks the trading conditions in the unr disorderly, and the fact that the fed keeps agreeing with him, shows that there could be a significant difference over time. The the potential for dollar to rally, that takes pressure off japan. They are not explicitly saying they are going to intervene and they are talking about fiscal stimulus in the near term. If the yen continues to be strong a number of months from now, the pressure will be on japans government to act. Jon enda curran, great to have you on the program. One month away from the brexit vote, a new warning today. Leavek. , if it were to the European Union i want to go with guy johnson for the latest. The shortterm consequences of an exit from the e. U. It is from the u. K. Treasury, and it looks ugly. Guy this is the second report we have had from the u. K. Treasury through the first dealt with the longterm implications. This one deals with the next two years or lets just say the plus or minus on these numbers is fairly big. Very hard to pin down exactly what will happen. But they have had a stab at it. They were very nervous about their numbers. They have had a few people fact check it. Lets give you some of the biggest. This is what the treasury is saying. This is consistent with the aggressive project fear. We have kick this around on the radio. Under a shock scenario, the u. K. 3. 6. Ory would be over the severe shock scenario, it would be minus six. This is where it hits badly for the british because they love their house prices. 18 on house prices. People will say that they should Pay Attention to that because the british like talking about house prices. Diye is a warning about a recession. Im not sure they were like a diy recession, and that is what they are warning about. That is part of the political narrative going into this brexit. It has been about extremes, about frightening the british people on either side of the bench on this one. Jon i understand that the selfimposed government deadline campaigning is this friday, so the project fear becomes project whom. Project doom. What are the assumptions that this research is based on . Significant is the pushback . Guy the pushback these easier to it is much plan for the longterm because you can make all kinds of assumptions and extrapolate over a long period. This is based on a short scenario. If the u. K. Says we want to leave, some things do not change. Say europe will be in a negotiating. , but people make assumptions. The assumption is that the bank of england would have to respond to the reaction based on those assumptions. That is very hard. The details on the distribution of outcomes absolutely matter. Great to have you with us on the program. Discussing brexit. If it is a diy recession, i raised the question, why did they have the referendum in the first place, if they believe the consequences are this dire . Vonnie it might offset some of the impact. Jon kind of ironic with the bank of england wanted in the first place. Vonnie i am not sure what you are suggesting. Erdogan iselected its Prime Minister. What is a more powerful erdogan mean for turkeys economy . The transport minister is an extremely close ally of president as one he vowed to change the constitution and in effect change the constitution because the president ial system in effect it undercuts the Prime Ministers authority. President mething that erdogan desperately wants. Over the next few days we will find out who will be in his cabinet, and investors will be watching to see if the deputy Prime Minister is in or out. He has the trust of investors. If he is out, this could further hurt turkish assets. This month alone, there is a iss of 6 , and this temple the worst performing equity market around the world in dollar terms. Vonnie down 16 this month. Angela merkel is making her fifth trip in eight months to is vimplecom meeting erdogan. What is her goal here . What this you want to achieve . she is in istanbul attending the summit. Her main mission is to save the e. U. Turkey refugee deal. Turkey is unhappy because they say europe is dragged its feet. It also wants your to speed up delivery of the 6 billion euros in promised in the deal. But Angela Merkel says the tightening grip on the turkish economy and politics is problematic, and she is lifting ofbout his the immunity of kurdish lawmakers. Lets get an you p update on what is making headlines outside the business world. Shery ahn is here with first word news. A remotecontrolled submarine is being sent to egyptairr the missing jet. They will try to locate the voice and data recorders, which could be almost 10,000 feet below the surface. French investigators say the plane generated automatic radio messages about smoke and the kamman smoke in the cabin before disappearing. Iraq has launched an offensive to retake falluja. The Prime Minister says the iraqi forces are approaching a moment of great victory. Falluja is 40 miles west of baghdad. Islamic state has controlled it for two years. President obama has ended one of the last symbols of wartime animosity between vietnam and the u. S. He lifted the embargo on weapons sales to vietnam. President obama this will ensure that vietnam has access to what it needs to defend itself, and it removes a lingering vestige of the cold war and underscores the commitment of the United States for a fully normalized relationship with vietnam, including Strong Defense ties in this region for the longterm. Shery it is being driven by mutual concerns over china. Global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world, i am shery ahn. Program,ng up on this two days, no consensus. Talks between g7 finance ministers are marked by a growing divide between the japan and the u. S. Is is Bloomberg Dow futures are up by 22 points. S p 500 futures are down by the. 1 of 1 . Down three quarters of 1 on the dax. There is the potential for a deal throughout the next few hours on bloomberg. 1. 1212. Lar at dollaryen is down 7 10 of 1 . That is where i want to begin the discussion because friction between leaders from the u. S. And japan at this weekends g7 meeting are showing a growing divide between the two countries. Joining me is the Asset Management chief global strategist. Not exactly an explosive division between the u. S. And japan, but enough to get a sense of what was happening behind closed doors. It heightens the concern people have about a lack of cooperation between the two countries. It surprised me why the u. S. Is pushing japan so far, our largest ally in asia. Their economy is struggling, so it is pretty tough, the stance the u. S. Is taking. Vonnie are fx markets disorderly acca john suddenly the yens rapid strength after additional easing by the bank of japan was hard to understand in many ways. I think the japanese are scratching their heads about it, too. Toy desperately want the yen stop strengthening and they will probably do anything to have it stop, i think. Jon we will get you a headline right here, right now. Tribune publishing rejecting the proposed takeover, offering which will talks. The board says there he is no timetable for concluding those talks. But the headline is that Tribune Publishing has offered mutual talks. We will keep you updated throughout the program. To turn back to the g7, you look at the tension Going Forward in the fx market, and the dollar in the u. S. Is between a rock and a hard place. You just wonder, is there any middle ground where you can keep the fx market happy in china and japan . John i think there is. That keeps Foreign Exchange rates where they are right now, not to allow large swings. The Foreign Exchange rates are properly valued at the present level, and if they swung much more either way, it would be harmful to the global economy. Vonnie yet we are seeing huge moves into jgbs why is this . John it is negative Interest Rate. It is hard to believe anyone would want to buy it. It does not make a lot of sense. Negative inflation on a total basis, core inflation is still positive year on year, so it is a mystery to me why people want to jump in. Some people are forced buyers. We have to realize that. Vonnie the consumption tax is going to go ahead next year the matter what the situation. Is that a wise thing to be saying . John i think it is still under consideration what will happen with that. It is important because before the dat is hiked and the economy surges to beat the hike, and then slumps afterwards, it is very important for a macro decisionmaking to decide whether it goes ahead or not. Jon john vail, sticking with us. Was onecoming up, it year ago yesterday the dow hit a record high. But it has struggled to Gain Momentum since. Track do not forget to stay with us for our 8 00 a. M. Hour. We will be joined by Steve Rattner and davids herbal zervos. D an 365 days ago the dow hit alltime high, but the market little changed since. Still with us is john bell. John vail. Was about 52igh weeks ago. What does that tell you about the world . John it tells you things are in consolidation mode, that the u. S. Had a massive regrading a massive rerating and it is struggling to get above that. Especially with the Oil Price Decline and the strong dollar. The markets are getting accustomed to that, and it seemed like friday was a big day where people are increasingly ,ricing in a june or july hike yet the stock went up anyway. It is a pretty strong indicator. Vonnie it does feel like the bond market is hanging on the feds every word, but the equities market is the verge. It does not seem to be as fed driven as it used to be. John i think everybody is concerned about what the fed will do, and maybe the stock market is sort of hiding it or discounted that. It is hard to know exactly what the stock market is thinking, but the bond market is also reacting to global bond yields, and the fact that mobile bond yields are pinned very low by centralbank actions in japan and europe exhibit difference for the europe bond market. Jon if i rewind back to january and february, it was not just the fed but china in there, too. Do you think the market, the sweet spot, is the one to two kind of thing . John i think stock Market Investors are. I think the stock market can handle that, and it is a sign that the economy, the fed has confidence in the economy. In the end, it is corporate earnings that drive the stock market and not bond yields. For them to start rising people are expecting them to for them to start rising like people expect them to, that is a powerful thing. Bowls,e are not massive not massive theres we are positive about japan, but the u. S. Should do fine, especially what you can do with a bank deposit. Why are you positive on japan versus the u. S. . John the yen, japanese earnings are following a bit, but generally it is a very are falling a bit. The p e ratio is well below that in the states. It is still a very competitive economy globally, and corporate Profit Margins are at record highs but we still think abenomics has room to grow, and there will be further reforms. Jon 16 times forward earnings . Is that just the intro . John i thought we had 14. 5 or 15. Some people are more cautious on earnings than we are. Jon john vail, great to have you on the program. Bayer has made an unsolicited 62 billion all cash out offer for monsanto, making it potentially the biggest takeover ever by a German Company. We spoke with the ceo right here. We will bring you that interview next. Julie on jon this is a snapshot of the market. 62 billion dollar offer for monsanto. There is an equity share sale in there and the stock has been weighted heavily. Also the japanese yen is much stronger. Of gseven heels division. The japanese yen strength is potentially disorderly. On this map is wti down by one percentage point. The brent contract is lower and the state oil company of iran is in the headlines saying they want no part in and out put free deal. Vonnie we are about two hours away from the opening bell on wall street. Ers offering 62 billion to buy man sent a witches leaving investor concern that its stretching its finances. We will bring you an interview with the ceo in a few minutes. Tribune publishing is rejecting the takeover by gannett. Also receiving a 70. 5 million Capital Investment from nanca capital. A warning from the u. K. Treasury the says the u. K. Faces a yearlong recession if it leaves the European Union. Lets go to first word news. Sherry lawmakers in greece have cleared more loans. There are calling for higher taxes in the sale of ad loans to distressed funds. Thats one of the last things greece has to do to unlock the next round of loans from the european daylight. The u. S. Drone flight killed the leader of the teleband. President obama killed called the killing an important milestone in the effort to bring these and posterity to that peace and prosperity to afghanistan. Congress are warning there could be a shakeup at the tsa of something is not done about the long airport lines. Adam says and edward royce says there may be need for Management Changes at the agencies. Its taking 90 minutes or more to get through security at u. S. Airports. Jon bayers deal could be the biggest deal ever for a German Company comes less than one month after the new ceo has been on the job. Talked to us earlier and is convinced the deal is value creating. We see that this is a great opportunity to drive our science and innovation Business ModelGoing Forward. Convinced thath this is a Value Proposition for the monsanto shareholders and where also convinced and committed to this action. Its said this will take your debt out to 40 billion euros and investors do not see return on capital doing