You on the open. Meeting and maralago. U. S. President trump is looking for a concrete outcome from his xiks with chinas premier jinping. Than an hourless and a half away from the cash trade. It will see a sea of red. Red across the board. Were looking at not massive losses but the ftse futures down 7 10 of 1 , the dax and cap futures down. 41 . Keep an eye and equity trade when it opens 28 minutes and 30 seconds from now. Take a look at declining in the bund yields. Very interesting. It is still off from where it was yesterday. Investors have gotten in and bought it looks like some kind of safe haven protection, pushing the yield down to 2. 5 4 . Over the first half hour of trade you can see we have, but little bit. Interesting to keep an eye on that bund yield. Guy the features futures are interesting. Keep an eye on that, we will talk about that as we work our way through the morning. U. S. Trade will be paid a great deal of attention to. The nikkei was down by 4. 1 . And parcel ofd that story. The Asian Session not exactly positive. The aussie is trading lower. That is the key takeaway. Were waiting for mario draghi, try to figure out what he is going to say. Draghi is likely to be super dovish today. We will take that speech for you. It will be an interesting one today to say the least. So much to think about with the fed and mario draghi. Lets get a first word news update. You. Tte thank the u. S. Has deported of former new york banker to russia who allegedly tried to recruit and ask advisor to president donald trump. He was convicted and imprisoned in 2016 for moscow. In 2013 news reported he targeted for recommend recruitment. President trump has said an apartment apparent gas attack that killed 70 people in syria has changed his thinking. This as the u. S. Acknowledge to could take action against the Syrian Government as well as targeting Islamic States stronghold. Trump has boosted special forces numbers to fight Islamic State but it is not clear how much further he will go even the Russian Military presence. President trump it across a lot of lines for me. When you kill innocent children, babiest babies, little with a chemical gas that is so lethal, people were shocked to hear what gas it was. That crosses many lines, beyond the red lines. Many, many lines. Juliette president has shaken up his National Security council removing she strategist steve bannon from a Key Committee and restoring roles of top defense officials. It increase the influence of h. R. Mcmaster. His public views sometimes at odds with those of bannon. The white house proclaimed that change as a progression rather than a demotion. Argentinas president says his isernment has no plans confident that he could slow inflation and stimulate growth ahead of key midterm elections in october. He was speaking exclusively to bloomberg. Thee are leaning toward predictable and reliable country. Are [inaudible] minutes of last months fed meeting show most officials support a policy change that would began shrinking the banks Balance Sheet this year. The minutes show most of the fomc continues to seek gradual rate hikes in the months to come. Conducted in what they call a passive and predictive manner. The minutes show a split over the prospect of inflation moving above the feds 2 goal. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Guy and matt. Matt thanks for a much. From the best day in three weeks that was the worst, the roller coaster investors road yesterday when the s p 500 index whipsawed late in the session in its biggest reversal of this kind in 14 months. Mark cudmore is in singapore. From looking through your blog this morning it seems you see this move as a very bearish move for equities, explain. Mark i think it is. It is the timing of how it happened, it is not where we are now. We have not broken the key ranges. , its not about where we are is how we got here. The point is that yesterday afternoon we were breaking higher. If theres i look like they were breaking up at u. S. Equities. There is a strong adp employment report. Which seemedsion it was finally ending. Were getting confident. We had a selection of issues. The fomc minutes took people by surprise. It seemed to worry people. They are focused enough. Also the ryan comments sending negative on the potential for tax reform. Those things together weighted stocks and we had a sharp reversal. We went from looking so bullish putoing lower that will bulls on the back foot and want bears make bears want to chase the slower. Futures, that is the monday low. If traders come in in the u. S. And we are below that level later on, what are we going to see . Mark that cause might cause a bit more of a panic. Much more important are the 10 year treasury yields. Mentioned u. S. D equities and their recent move is a worrying sign for equities but i do not think it is the fact that u. S. Equities go lower. It will pump risk aversion elsewhere. It is about that 10 year treasury yield. Theres a lot of positioning betting on the fact that we do not break that level in the 10year gilts. Again you will see knock on effects on other assets. The key asset to watch today. Do a break down to the bottom of the 2. 3 . Thank you. It will be a big day. We will try to get more smart analysis. With us now is the chief executive officer. Are you feeling good about the markets . I have reasons to be optimistic. 10isagree that it is the year yields, it is the s p 500. It does not take much to knock it off track. Yesterdays hawkish if you want to call them an exit for from qe4 the fed, a month ago, that would have been positive and today we are looking at the. Arkets i think it is a fragile place where the stock market, it is not take much to change sentiment. A controversial view that the expectation was that they would go even center. Economic data supports it and they are leaving it too late. Strong,dp numbers are pmi numbers are strong, usually a robust economy. All the more reason to normalize Interest Rates. Guy does a strong payroll number, how with the market take a strong payroll number . It was a moderate a positive sign that there was a u. S. Recovery. Perhaps to think about the minutes from the federal , do not they did note worry, financial markets, we will tell you how it is going to happen and went and we will give you a former Forward Guidance and when the time comes they will continue to publish that. The market will have plenty of opportunity to assess whether that means whether it is the market or the wider economy. Matt youre saying watch the s p today shorterterm rather than treasuries longerterm. How does this affect the treasury market if it they reduce the Balance Sheet and go after more hikes by the end of the year . Guest i think the treasuries market has been impacted by the qe program because the Federal Reserve has been a marginal buyer. As they are looking to exit that the question is who is going to be the marginal buyer . Downwill take this program and slow down the reinvestment pace. Interest rates probably because of the economy and it is going to be a more free market, Interest Rates grind higher in the long and. M how do you see the curve, do you see it steepening . Guess you can see the curve drift higher because of these weonger economic foundations have been discussing. The Federal Reserve will hike rates. That has been priced in. Unless there a dust there is a big knock for a path to its recovery. It willerm rising shift up. Matt thank you. Our guests will guest will stay with us through what will prove to be an interesting morning. Very likely as far as markets as well with futures pointing lower across the board and substantially lower at that. Coming up on the show, meeting in maralago. A preview of the big summit between President Trump and xi today. Deliverill draghi question mark after months of mixed messages, will mario draghi offer any clarity on the road ahead for rates and quantitative easing . We will hear from him in the 8 00 a. M. Hour. This is bloomberg. Guy youre looking at a live shot, we are awaiting the arrival of mario draghi in this room. He will be speaking later on. Where watching the watchers. We will be back with mario draghi later. How dovish will he be . Those are the conversations we are having ahead of his speech. Here is juliette saly. Juliette unilever plans to buy back 5 billion euros of stock boostreads business to its share price after fending off a takeover bid. They said the dividend will be increased by 12 . The move is the result of a risk a Strategic Review the company took after the unsolicited heinz offer. We will be speaking to unilevers ceo for comments. Deutsche bank is poised to receive orders for almost all of the a billion euros of stock on offer to investors. S the sale draws to a close investors are pledged by more than 95 of the stock of sale and the offer which ends today. 80 ofson said about existing investors decided to participate in the Capital Increase which some opting to boost their exposure and new investors buying at risk. Yum china soared in trade after boosted results. The results signal a strong start to the company after its spinoff from yum brands. Over the last year things have improved quite a lot in china. You are seeing good consumer demand as well as good infrastructure buildup and substantial possibilities of building new restaurants. We saw you see a lot of possibilities. That is your Bloomberg Business flash. Matt thank you. And donaldsident xi trump will meet tomorrow facetoface and pump beach, florida. The meeting represents an opportunity to establish a personal rapport and stave off a trade war that threatens to make chinas economic slowdown much more painful. T groupon emerging marke mark mobius said trump needs a positive outcome. Failure with the the health bill in congress. I think theyre going to come to something that will be positive for trump. Trump has to announce something positive. The chinese have to give something that he can bring to his constituents. I am reasonably optimistic. The chief investment with hammers. In what would be a good outcome from this meeting . Guest the top of the agenda will be two main issues. North korea is one of the other is trade. Trump made a lot of signals about the trade deficit with china. What we have seen in the latest figures in the trade data between the u. S. And china, that has come down. There is some move in a positive direction. It has come down by 26 . There has been a big move in trade relations. Theres a bit of give and take. Trade is a big issue for trump. China is not as reliant on trade. Maybe the Infrastructure Program that plump trump has pledged. Matt it is still a couple hundred billion dollars year that trade deficit with china. How difficult is that for the u. S. Economy to endure, is it a problem, do you think . Stands, it is a major issue because it has the political angle in terms of the impact on jobs. To give you some context of the chinese exports, its biggest trading block is not the u. S. Anymore. It is the eu. Reliantll become less on the u. S. In the coming years. That could be part of the gift, to say we will ease off on what we are exporting but in return we want to invest in the programs. We have seen the Railway Investment in los angeles. Population that they have come out on top of this. Needthe chinese do not this to be a disaster. They need their president to come out looking strong and to have a high level meeting with United States and the president and for it to go smoothly. Trump does not seem to approach things in that way the chinese have their eyes on the big political events, they do not want upsets. That is a big expectation gap. Guest youre right. Insofar as the chinese like to have a immaculately manicured summit were they like to control all the messaging and you have trump who likes a surprise, the showman who likes to take the market. At what happened with angela merkel. Can we extrapolate out of that meeting which was a fairly testy affair and go to what happens with the chinese . World is watching. This is the most important summit with respect to all the leaders. They need to strike it right. It is in both of their interests for it to work. We will see how far trump pushes it. Happens after starts me as being just as important. What if they come out and start being a bit more bellicose, talking about currency manipulation that will pull the rug out from everything quickly. When you think about what happens on a sunday talk programs or what happens monday through wednesday. Guest this is all about building a relationship, having and i to i contact, having some kind of dialogue. They are not going to announce any deals or any major announcements around trade. That will take place in the days, weeks, and months after that. That is the key thing for both of them. Are minutes away from the market open. Unilever announcing a Share Buyback for raising its dividend. The open is seven minutes away. This is bloomberg. Matt welcome back to the European Market open. We are minutes away from the start of cash trade. Lets get to some of the stocks you want to keep at your eye on. First up is unilever. So much news out of this company this morning after fending off an unsolicited takeover from kraftheinz. The new ceo announcing changes including an effort to do best the spreads business, a Share Buyback of 5 billion euros, boosting the dividend to 12 , a higher cost savings target, 6 billion euros from 4 billion euros, and unbelievable amount of news. Weew plan from the ceo and will talk to him later this morning and get more details on that. At theking a look markets, we will be softer this morning. Futures are pointing down. We have firmed over the last few minutes. It looks like we will be down. 6 of 1 in london,. 4 in paris and. 2 of 1 on the dax. The market open is next. Mario draghi is coming up shortly. It is a lovely day in london despite the market action. The open four minutes away. Guy a negative start to the session today. London underperforming yesterday. To watch out for. Keep an eye on that as well. Sixbelly is softening by cents. A reasonably soft open later on. Take that off and i can show you what is happening. The pictures you can see, there is the monday low. That is where we are now. Keep an eye on one of those levels. Mario draghi giving his speech at the center for financial studies in frankfurt. We will see if he is more dovish today than usual. Lets talk at the open. We are expecting these to go for myself. You can see the back end of yesterdays session, there goes the london market. It is trading low already. 23 points 23. Fairly soft this morning. It is trading down. 2 . We are expecting more from both of those areas interesting to see how unilever opens. Lets see what happens in asia. Anna the shanghai market closing up there. Session in the United States yesterday was a weak one. Is the shanghai closer over the last two days. Today putting in a positive performance. Japan, we saw the move and again. That was the expectation, based on the futures. That seems to be the case. Down by. 6 . Sheets talk. Nce paul ryan talking about the difficulties that could be faced in terms of legislation through capitol hill in terms of taxation. That takes the edge off markets yesterday. Something to pick up on the european session as well. Self it looks like in terms of yields toward 1 . After gilt want higher yesterday in yesterdays session. The first data couple of our guests talk about it, what will that mean for the trump reflation trade. Old overnight from Goldman Sachs talking about where he sees gilt yields going. Rally a bit of 2017 into the start of next year. The broader picture about equities this thursday in europe. You can pull this off. This talks about relative valuation for the s p 500 versus global equity. At this up because they do this to my attention. The fed was talking about stock levels. Interesting the fed said stock levels are quite high relative to standard evaluation measures. The u. S. Might be 11 more expensive than the rest of the world. Matt awaiting a speech from mario draghi. We are getting the lines from that text. The ecb needs more inflation to change its stance. He will be speaking in just a moment. We will take this fold speech live. He is saying interestingly the outlook for the economy is there is a need to deviate from the wording of former guidance. The policy is working. We expect him to be reading from his own book. Is interested ecb seems to get more dovish as the fed yesterday sounded hawkish in its meeting minutes. Draghi about to speak and maybe, move and a after the show you on the s p 500 cash trade after a big drop in futures overnight. Futures,rade initially chief investment officer, do you to calm markets after they were set off by paul ryan yesterday . The ecb is focused on what is happening globally. Perhaps one figure they are looking at to drive the tone on whether it is hawkish or dovish and german inflation. Took a bigation plunge recently. Lets take a breather. Lets wait until this Program Actually has its full impact before we withdraw the program and normalize Interest Rates. He is going to be very much focused on the part of Interest Rates for europe rather than what is happening. 7543, the money Market Pricing for april 2018. Obviously expectations have come way down. We heard a couple of ecb Board Members talking about the possibility of raising rates before the end of qe. Is that now dead in the water . It is alive and kicking. Bit of recenta data out of europe. 2019 and of qe program. As the data continues to improve one of the major surprises this year could be a 2017 move in Interest Rates. That would surprise markets. It is trending in that direction. Blip along the path of normalization for all Central Banks including the ecb. Guy as we expected and you seemsd to, a dovish tone reflected in eurodollar. Going soft on the