More rate hikes this year . Amazon ascends. The stock topped 1000 a share in the u. S. Yesterday but how much more room do stocks have to run with the record rally . We are half an hour away from the european open, from the open of cash trade. Take a look at where futures are trading right now. We are seeing gains for most european indexes, a little bit of a loss for dax futures but the futurese in action. We have not seen the asian news carry through yet as far as Index Futures go. Theo see it if you click on gmm screen, you can see in the forex, the renminbi, the yuan getting a big move. Anytime you have a black oxen the middle of one of the panels on a gmm screen that means youre seeing a move that is more than three standard deviations away from the 30 day average. You see it here in the renminbi on and off shore if we take that and and pull out the bonds commodities, youre going to see china highlighted again here as far as the move with the sovereign bonds, the fiveyear dropping 5. 7 basis points as people buy into those bonds. You also see a big three standard deviation move on rubber. Interesting stuff on the gmm this morning, a lot more action than you see in your equity Index Futures. Lets go to bloomberg first word go to sophiet we kamaruddin in hong kong. Sophie in the u. K. , the pound slumped as anxiety surrounding the outcome of the general election tightened. Theresa Mays Conservative Party may lose its majority by 60 seats. A pollrperformed after in the times showed the tories may lose 20 seats at next months election while the main Opposition Labor Party could gain 28. Japans industrial output rebounded in april hitting the highest level since 2008. Industrial production increased 4 from march when it fell 1. 9 . That is as overseas demand continue to support the nations economic recovery. House trump White National security adviser Michael Flynn has agreed to turn over a limited number of documents sought by the Senate Intelligence committee for its investigation into russian interference in the 2016 election. According to a person with knowledge, he has agreed to produce documents the committee subpoenaed from his two companies, flint intel, llc and flynn intel incorporated. In afghanistan, suicide car bombing has killed or wounded 70 people near a diplomatic enclave. It is the worst attack in the capital since the raid on the countrys Largest Military hospital in march in which 50 people died. It comes during the first week of the holy month of ramadan. The u. S. Is the first ever test of its Defense System against an icbm was a success. After the interceptor shot down a mock weapon over the pacific ocean. The test comes amid mounting tension with north korea. Is u. S. Economic outlook looking worse because of its uncertainty over tax and infrastructure policies while europe is looking stronger s larryg to black rock fink. It is consistent to believe that or there is a belief in the marketplace that we are going to s the Second Quarter. When i what i hear from businesses is it is not happening. Sophie 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. Lets talk the rate path in the u. S. Softbrainard has said inflation could cause her to reassess the way forward for monetary policy. Between some tension signs that the economy is in the neighborhood of full employment and signs that the tentative progress on inflation may be slowing. If that tension between the progress on employment and the lack of progress on inflation process, it may lead me to reassess the expected path of policy in the future although it is premature to make that call today. Of inflation, we get figures out for the eurozone andy at 10 a. M. U. K. Time we have decent inflation figures for germany last night as well. For more, lets bring in Mark Cranfield from our mliv team in singapore. I want to go around the world with you because there has been a lot of action to discuss and a lot on the mliv blog this morning. Lets start off with brainerds comments. She is ghoulish dovish and combine that with larry finks , the porridge seems like it is a little bit cold. Mark that is true. People are very interested where this new level for mutual rates would be. We are used to 4 but it is going to be much lower than that in the future. From what she is saying she thinks is closer to where the inflation part is it might not be 2 , it might be below 2 but if that is the case the projections for fed funds in 2018 might be higher. Matt it is interesting because the charte a look at we still have an incredibly high price, let me change this to oi s. We still see an incredibly high probability for a hike in june and it seems to go out every month forward. You just see strong probability of a hike coming . Mark the market is still in june that way. As we have seen in the last couple of years, the market can change its fixings very quickly on where it sees the fed funds going. Peopleet other senior replicating what brainerd said talking about lower inflation, it can quickly translate into the futures market and all the rate hikes get priced out. Also what they are considering is the fact that the fiscal stimulus from the u. S. Government might not be coming this year at all. At the beginning of the year there are looking for stimulus and it is looking further away. The fed can focus on core inflation which is still very low. Met the fed does focus on core inflation, Important Message there. Lets talk about what to expect from the u. K. And the town. We see the possibility of a 10 Day Moving Average moving below the 20 date moving average, we talked about that with mark cudmore. When you at the tacticals to the new poll from the times and ugov it is possible that conservatives do not win majority. What does that mean for sterling . Mark the shock for people investing in the u. K. In the Foreign Exchange market, where over one week to the u. K. Election and the only thing we should be discussing right now is how big will the conservative where questioning if there will be a majority. We have had to backtrack dramatically. If this fight carries on the way it did, by the time we get to next weeks general election the pound could be back at where it was when the election was called. This is not the scenario that people expected. Theresa may was supposed to win this election call this election because she was supposed to win it easily. Live marketn follow insights on the blog, there is so much there, i highly recommend checking it out. Mliv. Tom keene will bring you a conversation with dallas fed president Robert Catlin kaplan. That is on Bloomberg Television and radio. You can also check out tv or live go. We are live in rome for the latest on the italian markets prospect ofmerging early elections. We talked tech after amazon hit the 1000 mark yesterday. How much more room do stocks have to run . We will get of you from an investor. This is bloomberg. Matt this is bloomberg markets, the european open. I want to get to the Bloomberg Business flash. For that we go to hong kong and sophie kamaruddin. Thanks. Deutsche bank has agreed to pay 40 minelli dollars to settle allegations that its u. S. Operations failed to maintain adequate protection against Money Laundering. Operationsd the u. S. Fell short in complying with the Bank Secrecy Act which requires lenders to help federal agencies prevent illegal transactions. They imposed a ceaseanddesist order on the bank. Anthony levan gasquet, the executive at the center of a legal spat with of a bit was hired to lead the self driving program. Claim was levan gasquet ski stole tradeow secrets. Sellaying out a plan to 25 of the nationalized lender. Governor plans government. Lans to sell stake according to previous government estimates the sale may raise 3 billion euros. S for footballted season has not stopped the club from topping the list. It has not won since 2013. But the value has risen to 3. 1 billion euros. Clubsurveyed 32 leading with a combined value of almost 30 billion euros. One third of that comes from three teams, united, real madrid, and barcelona. That is your Bloomberg Business flash. Matt thanks for much. Italian markets shuddered at the prospect of early elections. All markets were affected by that yesterday but especially in italy where italians dump starks after matteo renzi signaled that a possibility of a vote in september or october. Bloomberg news brohm chief. What sparked concerns of an early election being called . Sayingdra as you are renzi signaled he would not be against it and also the fact that the major parties are starting to come to an agreement and that is what you need to go vote. And oncem is complex the parties agree on the lot there is nothing hindering them from going to early vote. Renzi is pushing hard to put go to the boat and that is making investors nervous. Index hadftsi stock it is today drop in more than five weeks. Is the possibility of the Fivestar Party coming in the biggest concern here . Alessandra absolutely. In general, markets do not like uncertainty and election is uncertainty. We do not know how, what kind of electoral they will agree on. It will be proportional law, that could result in a hung parliament. That makes investors very nervous because you will not , the economy could suffer and the fivestar, the italian populist antieurope party could win the election. They are neck and neck with renzis party. Lot. Ach, that is not a they have to form alliances. Very uncertain, very stressful situation but renzi said it could be even worse if we wait longer. He said lets hurry it up and do it even if the markets react badly and get it over with. If we wait until may or something along those lines in 2018, it could be worse. Matt let me draw your attention to spreads, periphery spreads we have a chart on the bloomberg. Italy spreadsand from germany. You can see it has gone up to almost a little more than two and recovered a little bit. A lot of this has to do with concerns on italian bank sheets. That would be in jeopardy if the elections go wrong. Pls shaping up, how is the banking crisis shaping up . Alessandra it is difficult to resolve. We are talking about 360 billion, there are different estimates going around. 306 2 billion euros area there is different banks concerned. Which caused mps all of this in some ways is going to be saved although it is not a Straight Path for the bank either. There are these two Smaller Banks and the eu is saying it is time for a bail in. They want the italian governorate is saying no bail in. The debate will be electoral. There is not going to be much room for negotiation and for being reasonable because you want to please electors. Thank you. South african president jacob zumas public Approval Rating has reached an alltime low and most embers of his ruling African Congress want him to resign according to an opinion poll released two days after he survived a second bid to oust him. Opposition has been on the rise ever since he fired the finance minister and made a number of other executive changes at the end of march. John asus now from burke. What has been the Market Reaction here . Rand comingeen the under pressure since jacobs amount survived that over the weekend to have him ousted as the partys president. The market was hoping for a friendly successor which could have been the deputy president. His campaign to be the next leader of the anc seems to be gaining steam. Six months ahead of the succession bid that will play out in december this year. His Approval Rating is at 66 from 53 just six months ago when the first bid to oust president jacob xoma was set before the ancs executive committee. Matt what are the possibilities in that he will be called to step down . A lot of people would assume it would end in his ouster but it seems to be he is the teflon don here. He has definitely survived. The most motions to have him ousted as president. The Credit Rating downgrades the country suffered after his onprise Cabinet Reshuffle march 31 seem to have mounted the pressure on him from within the ancs ranks to have him removed as president. Were expectedings to release a ratings review on the countrys growth prospects. That is something that could be a Pressure Point in terms of whether the country will see more downgrades. How growth fares in 2017 as well as the Market Reaction to this president going forward. Matt thanks for a much tomorrow very much. We are minutes away from the open. S Deutsche Bank. Agrees to pay 41 million for Money Laundering lapses. Deutsche bank is paying fines for bad behavior. We will take a look at the stocks to watch. This is bloomberg. Matt welcome back to bloomberg markets, european open. I am matt miller. Lets get the stocks to watch, just about six minutes to go until the cash trade opens. Here and across the continent. Deutsche bank in frankfurt, looks Like Deutsche Bank is once this time itfines, is only 41 million but it is to settle allegations with the fed that it has failed to maintain adequate controls against Money Laundering. The interesting thing i think is that this is over billions of dollars that were laundered so it is possible Deutsche Bank made more money on the laundering issues that i has to pay in the fines. Very interesting stuff there. Also interesting to look at metro, another german stock coming out with earnings. Metro and its media business, saturn has a loss before special items of 4 Million Euros them sales wereks like unchanged at 5. 2 6 billion euros. Carry. Etro, cash and metro media saturn, metro stock germany, it could come down at the open. Finally, watch cellnet. We germany, had headlines thatn tower is looking to explore and ask is and acquisition of cellnex. Crown castle is another buyer. We could see a bidding war buildup over sell cellnex. It is up 24 . A few stocks to watch their. Formats until the market open. If you take a look at futures you can see that little change on the equity indexes but slight gains on the euro stocks eurostoxx index up. Coming up it is the market open. This is bloomberg. Matt welcome back to bloomberg markets. The european open just about to kick off. The live cash trade. Futures have been relatively mixed here in europe. This is what are we looking at there . The intraday trade. It looks like these the the the futures that we are looking at. They are gaining now. You had seen dax futures down. Cac futures unchanged. We have the first day back from u. S. Markets since the memorial day holiday. The first day back for london since the bank holiday and all of those major indexes were down. Do we see a little bit of a bounce today i guess is the question. European markets opening in just 12 seconds. For that, lets go over to manus cranny. Manus . Manus were struggling to get clear direction. May 31. The stoxx 600 has rallied. 8 this month. Up from four months in a row. This is the longest winning streak on the sox 600 since 2013. In average in may we add about 1. 5 in value. On average in june over the past four years, we have lost nearly 40 . Is our run almost done . 90 billion euros worth of equity value has been added. Larry fink says it will grow faster than the United States of america if not faster. Consumer staples up. 8 . Youre seeing a little bit of a mixed intonation of n the market. The pound is down. The pound is having problem. This is the bloomberg pound index. The chart you want to go to. Down 2. 3 overall this month. The skew on the pound is one to the downside as we get the types called this morning showing that the conservatives could lose as much as 20 seats in the general election. Labor could garner 28 additional seats. Macquarie are scathing of this poll. We have pluses and minuses in terms of belief on the poll today. Twoweek volatility rising over the past couple of weeks. That momentum is going to continue. Mark barton has a chart for you in terms of the pound. Two days off. Not one but two. They come back and take the market higher. We had the chinese manufacturing data this morning. Ll is good in the world. The story from china is back under the microscope again. Index remains at 51. 2 for the second straight month. Deleveraging, the balancing act, what the pdoc can do on rates versus the deleveraging story. Matt, over to you. Matt manus, thanks very much. We take a look at the market moves, broken down into index Industry Groups. We see a big loss for the metals and miners. You can see rio tinto, glencore, b. H. P. Tch shell, billiton all down. Not a surprise, we see w. T. I. Crude down. Brent crude. 75 as well. Socgen the bigs losers as far as index points. The biggest gainer is British American tobacco and then you see eriksson coming in at number two. Then you see some other banks actually gaining today. Hsbc is one of those as well as some of the drug companies. The pound slumped as anxiety surrounding the outcome of the general election heightened after a poll showed Mays Conservative Party my may lose its majority by 16 seats. Sterling underperformed literally all of its g10 pierce after a poll and the times show the torreys may lose 20 seats in next months election and the Main Opposition Party could gain 28. Interesting pollin deed. There is a wide margin of error there. Andrew perry is with us. Head of equities at Hermes Investment management. As the ele