As trump touches down in saudi, iranian people voting on whether to continue International Engagement or take a harder line. We are live in iran. Matt we are less than a halfhour away from the open of cash trade. Lets take a look first at where futures are after the big drops we saw the last couple of days. Looks like investors are getting more optimistic in europe. Asian stocks turned around. We are seeing european futures rise fairly significantly. If you look at the bund trade here, we can see that investors are selling off debt. This is a preday chart. I will put it into a oneday chart of the german bund trade and zoom in on that for you. Investors are selling off the tot, pushing the yield up 0. 36 after it had retreated for a couple days. Guy more germany does this morning. We will talk about that later. Lets talk about what is happening right now around the world. Yesterday, a second day of negative trading for european equities. That is worth paying attention to. Looks like were going to see some stabilization today. The bloomberg dollar index down by 0. 1 . We are going to talk about emerging markets. The dollar traded pivotal to that. The dollar in hong kong, interesting. The aussie dollar up 0. 2 . Get the bloomberg first word news update. Heres Juliette Saly. Juliette thank you. President trump has denied trying to quash an fbi investigation of his former National Security adviser and says there was no collusion by his campaign with the russians. The entire thing has been a witchhunt and there is no collusion between certainly but i can my campaign only speak for myself and the russians, zero. Juliette at a white house News Conference yesterday, trump said it was totally ridiculous to think hes done anything that would amount to an impeachable offense, but the president said he respects the decision to appoint Robert Mueller as special counsel. Brazilian president michel temer has defied calls to step down, saying a Supreme Court investigation will clear him of an alleged coverup. Local media claims he approved harsh money for the House Speaker who drove the impeachment of dilma rousseff. The turmoil has seen stocks, bonds, and the real tumble. Steveneasury secretary mnuchin says breaking up the big. Anks would be a huge mistake testifying before a Senate Banking committee hearing, mnuchin said the u. S. Administration doesnt support splitting commercial and investment banking. It is a complicated question. Theres many aspects of it. The simple answer which we dont support is breaking up banks from investment banks. We think that would be a huge mistake. Juliette leaders of four u. K. Political parties have criticized theresa mays approached a brexit. With less than three weeks until the general election, the smaller parties made their cases in a tv debate that may and interbanks and labours Jeremy Corbyn refused to attend. You may be talk of scared to come here tonight, for your uturns to be highlighted, for your policies to be exposed. You want this election to be only about brexit. We can transform our Energy System to make it the cleanest and greenest. Love isecent britain i under threat. By nigelay, backed farage and Jeremy Corbyn, is going for an extreme brexit that will damage our futures for generations. Brexit would never happen if it wasnt for you cant. For ukip. Juliette two chinese fighter jets intercepted an American Military aircraft over the East China Sea on tuesday. A u. S. Spokesperson said the interaction was considered unprofessional due to the movements of the chinese pilots. The spokesperson said the air force is discussing the event with china. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much. The political brouhaha in washington looks unlikely to blow the Federal Reserve off course from raising Interest Rates this year. Starting with an increased next month and following with another later in the year, lets see where wirp is this morning. Take a look at that screen. 97. 5 are the chances of an increased rate in june. We are joined by mark cudmore from seoul. How resilient is the feds politics fed to politics . No agency can be fully independent of what is going on in washington. In terms of the june decision, they are extremely resilient. There are a few ways this can impact the market. One is, is that it is turning down yet . The data remains strong. The data is saying a june hike would be ok. Our markets getting hit badly . While the dramatic moves yesterday may seem like sharp deterioration, remember that u. S. Stocks were at a record monday. Overall, u. S. Assets are at skyhigh levels. Markets are showing no problem with the hike. Sorry, they are the main two points. Apologies. Matt i thought maybe we could talk further about the dollar. Theres been a roundtrip to some extent for the dollar index, mark, from when Donald Trump Took Office until now. We saw gains of almost 6 . Now were unchanged. Where do you see the dollar going from here . Im a structural bear on the dollar. I think the dollar got overvalued in the last couple years on expectation the u. S. Would start a rate hike cycle that would be aggressive and sustained. It has been very gradual. I do think the reason the dollar sold off are not particularly valid. I dont think the politics should affected too much. Shortterm, the dollar could strengthen. The bigger picture, still quite negative of the dollar. There are still negative real yields in the u. S. It is not particularly attractive in terms of assets. U. S. Equities look expensive. It is not a bad story either. The shortterm story might be ok because the dip this week seems unjustified. Guy ive enjoyed the pound around 1. 30 on the cable rate. Your sense is it isnt going to last long. Walk me through wide. Mark last week i changed my call on sterling. Ive been bullish the last couple months on the theory the short positioning was too extreme. I thought it was too stretched for a longerterm story. Weve now had a clearing out. The fact remains that the longterm story is negative. Last week i turned negative on sterling. I thought the initial moves might be in sterlingyen. Weve had some unpredictable events. I think the next leg of the move is more in cable. Dollar weakened, probably unjustified, but sterling has a Slower Growth rate. It has a larger current account deficit. The negative yield is much larger in the u. K. Than it is in the u. S. All these factors point to sterling slowly depreciating against the dollar. Guy thank you very much indeed, mark cudmore. You want smart analysis throughout the day, mliv. Event blogsspecific that we run. You can find those as well. Mliv, fantastic throughout the day. The iranians are deciding between further engagement with the west or turning away. Were going to take you live to tehran next. This is bloomberg. Matt lets get the Bloomberg Business flash. For that we go to Juliette Saly in hong kong. Juliette thank you. Billionaire Hedge Fund Manager leon cooperman and his firm have agreed to settle a u. S. Securities and Exchange Commission insidertrading lawsuit. Cooperman will pay 4. 9 million to resolve claims he made money trading on inside information according to a court filing. Cooperman didnt admit any fault and wont face any bar or suspension from trading. Exchange operator euronext reported firstquarter net income declined 9 amid lower trading volumes. The company which operates markets in countries including the netherlands and france also said revenue was little changed at 127 million euros. Euronext planned to acquire a Clearing House earlier this year. Aston martin is said to be considering a london ipo as soon as next year. The british maker of james bond cars is seeking to capitalize on the success of ferraris listing. That is according to people familiar with the matter. At the same multiple as ferreri, aston martin would be valued at 3 billion. Ikea aims to double its sourcing from india to more than 650 million ahead of the opening of its first store. The company has Broken Ground on the outlet in mumbai and has a goal of 25 Stores Within eight years despite having trouble acquiring land. That is your Bloomberg Business flash. Guy thank you very much indeed. Iranians have begun voting in a president ial election that will either give Hassan Rouhanis second term or hand the nations top elected office to conservatives. It is happening the same day that President Trump makes his first overseas visit to saudi arabia. Lets join our man on the ground in tehran, yousef gamal eldin. Walk me through the lay of the land. We are trying to understand what is happening in iran. Walk me through why the candidates are so different in their approach to what happens next. It has been an incredible few hours. Just the amount of people coming to the polls, this particular polling station one of the more popular ones in downtown tehran. Turnout is going to be key and fundamental to what the government is trying to achieve, convincing people this is the way to either approve or disapprove of the government of the last few years. They are hoping for 72 . Last time around was 77 . The polls opened at 8 00 a. M. 55 million registered voters. Out of the four candidates, only two crystallized, a brain risa, the cleric, and Hassan Rouhani. Matt . Matt where do they stand now on relations with the u. S. . It has been a rocky road of late. Relations with the u. S. Is one of the key factors and key talking points of both candidates. This is something they are campaigning on, on quite different platforms. One is the more liberal reformer, trying to engage the west, trying to make the agreement work. For a lot of people that hasnt delivered the results the average iranian can feel. That is what a brain raisi raisi, hes going to be jumping on that opportunity. There is a broader point here. It is about resetting the iranian political pulse. This could also be about succession. The Supreme Leader is getting older. In the history of the Islamic Republic another president ultimately becomes the Supreme Leader. Guy yousef gamal eldin joining us as the iranians go to the polls in tehran. We are joined by ubs head of emergingmarket cross asset strategy. Is this important . From a longterm perspective, very important. If iran chooses to continue to engage with the west, that reduces geopolitical tensions in the middle east. From a nearterm perspective, i dont think it matters for the oil price. What is happening with shale is much more important. There isnt very much of a difference, which basically means there is ample supply and there is still downward pressure on the oil price. I dont think this election has an Immediate Impact on the markets. Should iran move away from the west, and the u. S. At this point is not in a mood to engage with iran, that increases geopolitical intentions. The fact that the president is visiting saudi arabia, there is symbolism out there. The lines are being drawn. This does increase middle east risk in the mediumterm. More generally, i think that does increase guy the saudi bonds have been incredibly well bid. There has been a more positive approach taken. We are waiting for the aramco ipo. Iran is not very far away from a geographical point of view. If we were to see the hardliners taking over, what it puts things like the aramco ipo in jeopardy . Markets downct the the gulf . Bhanu i dont believe the iran go the aramco ipo will change. Theres a broader theme. If you look at credit spreads, you see how bonds are trading, both mainstream and frontier markets. I think theres a broader theme out there. The latter point, how gccs reaction occurs, and how the geoPolitical Risk between the sunni and shia faction in the middle east, both which have been at loggerheads for some time, how that evolves, that will change the geoPolitical Risk. Iran becomes a little more isolationist. How russia deals with syria, turkey, that changes. Matt does it strike you that the trend is for emerging markets, the political stability of emerging markets, to be recovering while the political stability of the western world seems to be getting shakier . Bhanu given yesterdays experience in brazil, i would have to say no. Risk is quitecal high everywhere. The markets have found it difficult to price Political Risk. Events and they market is not very good at pricing them in a probabilistic fashion. Risk is quite high. It is not clear that emergingmarket policymaking is becoming significantly more reformist. There have been some signs of that and brazil was the flag bearer there. There are some signs in india. If you think about turkey, south africa, mexico in june, Political Risk is quite high. I wouldnt say that emerging markets Political Risk is coming lower at the same time developed markets medical risk is rising. Political risk is rising in both places. Societies have become more unequal and that has mattered not for the markets as yet, but has mattered for Political Risk. T why dont we see more in brazil, obviously a lot of price action after political turmoil is reported on. In the western world, if you see price action, for example in brexit or in the case of italian elections, theres a quick recovery. In the u. S. , theres hardly any price reaction to political scandal. Why do we see it so muted in western markets . Bhanu because it hasnt had any material payoff on policy so far. You would have to agree that when you have Political Risk in terms of posturing, once candidates come to power, things are different. You saw that in greece a while back. People thought things would be very poor, and eventually they became more mainstream and lost popularity. The populists themselves lost popularity. This happened in brazil. Markets thought this was a massive shift leftward. China was growing at 12 at that time. There is a difference between the rhetoric and the reality when you see the real quality of actual governance. Many candidates tone down their rhetoric. The markets struggle with that because cause it is a binary event. They can only react to it when they have bought protection prior to the event. That has been a moneylosing proposition for them because the risks have not been manifest right there. It really is about the risk distribution. This is more a Risk Management point. I will give you one other example. Protectionism, for instance. How do you price protectionism. Nafta is probably going to take more than a year and a half to be renegotiated. It is difficult to price that today. Markets are probably going to react to that. The risks are going higher. Matt ubs head of emergingmarket cross asset strategy, bhanu baweja, stay with us. We are minutes away from the open. Up next, we look at the movers in todays trading, including euro next. This is bloomberg. Matt we are just minutes away from the open. Im matt miller in berlin alongside guy johnson in london. Want to get some stocks to watch. Euronext is one you want to keep an eye on after it comes out with earnings, firstquarter sorry, 127 million euros. , saido, Stephane Boujnah in a Bloomberg Television interview, that costs are going to rise and clearing will be fragmented postbrexit. The open is next. This is bloomberg. Matt welcome back. This is how the market opening will go to. The ftse 100 looks like it will go up iced therapist 6 . Go up by 0. 6 . The european futures are reasonably well, london looks like it will go up a touch. That might have something to do with the pound softening up. I will onemonth chart of the yen i am looking at. You can see that we have a lot of yen strength over the last week. Investors seem to be flocking to that trade. At one point we were down to a 110 handle. You can see that under the open bug. We recovered a little bit to 111, but still a lot of strength for the yen over the last week. Even as japanese stocks turned around and recovered. Guy matt, lets talk about the open in a little more detail. That is wednesday, the big related the trump selloff. That carries on into thursday morning. The books like the momentum will it looks like it the momentum will continue. That is what were saying at the moment. Many. Are not manus, what do you have . Dollaryen is the a little more about the risk. We are still saying money going to the yen, though not at the same aggressive rate. For me, the question is is it too early to call yesterdays move a oneoff moment. We get too preoccupied talking about 1 or 0. 5 moves. These are the basic resources. We are making sure it is there. The banks are up by 0. 2 . It is still a risk story. The question you need to ask yourself is when these moves will be a symptom of whats coming. Toociates will be talking one or two wires this morning. They say that a trump in peach met probability is around 10 . About 50 that trump does not make it to the end of his full term. You have a banging run on financials. We are basically saying that you want to cut your exposure to banks, and up your exposure to insurers. You have had the boom in the economy, the rise in yields fully priced. You have to take some money off the table. When Everything Else is wrong, look at the bond market, the equity market. The shanghai composite is down. There ratcheting higher the reference rate in terms of fixing on the yuan. Yuan want to keep the stable. They can afford to let the dog off the leash. If they let it go, it has grown gl