Testimony move the markets later on . Matt, we are counting ourselves down to the ecb. Matt that is right. And and into the open of equity trading in europe just about half an hour to go. Equity Index Futures pointing slightly upwards right now. Important to point out that ahead of the ecb, ahead of the, testimony, ahead of everything that is happening today, investors have been a little bit cautious as far as going in and taking risks. They want to see the outcome of super thursday, if you want to call it that before they put anything on the table. A little bit less will i am could be expected today. That you have a busy day. The main event in many ways in terms of what is happening. U. K. Polls close at 10 p. M. I want to take you to the gmm. That is what is happening today. The yen is up by. 2 of 1 . Pay attention to that. Let me roll the board on and show you what is happening with the japanese 10 year. There seems to be the story that way howwill change the it communicates visavis how the theyre looking at an exit. That is some way into the future. Beyond where the ecb is but the fact that this is going to change and they will say what we are modeling internally what is going on is significant. Lets roll it onto the next one and show you what is happening. This is the japanese fiveyear. The japanese 10 year on the move. The color theyre indicating that this is an outside move. Pay attention to what is happening in japan. Lets get the bloomberg first word news update. Heres juliette saly. Juliette thank you. Polling stations in the u. K. Are open for the countrys second general election in two years. A total of 650 westminster mps will be elected with 46. 9 Million People registered to vote. Tune in for one hour special on the election at 10 p. M. U. K. Time where you will get instant analysis. Jamesu. S. Fbi director comey will say donald trump pressure him for loyalty and he sought forbearance for Michael Flynn and asked comey to lift a cloud of the Russian Investigation. We will bring you special coverage of that hearing from 2 40 p. M. U. K. Time on tv, radio, and twitter. Blumberg customers can follow live go. At on the concerns that cutters exacerbate will external vulnerabilities and could put pressure on its growth and metrics. Chinas overseas sit and shipments accelerated as local demand shows signs of picking up. Exports rose in may and dollar turn and imports increased 14 14. 8 percent leaving a trade surplus. North korea has launched a series of short range missiles that up for to be designed to attack ships. South koreas joint chiefs of staff said the rockets, probably cruise missiles, were fired from the eastern port and flew 200 kilometers. The defense minister in japan said they do not appear to be the type they can reach japan. U. S. Oil is trading near 46 about dollars a barrel since the biggest drop since march. Stockpiles rose for the first time in nine weeks. That sent crude down more than 5 yesterday. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you. We want to go live to singapore where mark cudmore, our mliv strategies joins us to talk about the markets today and the ecb. We saw yesterday the euro lose some ground for a moment after bloomberg broke the story that the ecb plans to lower its inflation forecast from now until 2019. What do you expect the market to to a change in the statement and perhaps a better growth forecast as well . Mark what is most interesting about yesterdays report is the euro did not for too long. But by the end of the day it was doing ok. That shows the positivity toward the euro. If you fight positioning is longer and it means the base to change it for driving up course. There is no reason to become much more hawkish. Growth is doing ok and he will say the Downside Risks will probably read be removed but there is no need to set a schedule for tapering. If we do not deliver that schedule for tapering the euro will come off of it after the meeting. Quick question on the euro move, could it be a little bit of the markets lowering its expectation for fed hikes as well . More than that it was the fact that the comey testimony are the initial statement we got leaked overnight helped the idea that there will not be anything much more profound than we have feared, there is no smoking gun which seems to imply giving a little bit of bid to risk. About thisconcerned might be the end of the cycle and that would be a negative signal. I do not have think expectations have changed too much in the last way for hours. Guy lets talk about what is happening in japan. Especially the story doing the rounds that the boj will start communicating that it is modeling internally how it would exit from its currently current policy starts. This is something into the future in terms of an exit but latchedets seem to have onto this. Can you explain why . Mark it is the fact they are thinking about what the exit process might be or how they might indicate that seems to be sending confused signals to the market. The boj is nowhere close to the target. The have not been close for a long while. It seems that a bizarre message that we know that we are getting close to victory in the year or so ahead and we need to think about how this will unwind. The market is surprised. The boj might be saying our qe think ainable and we think we need to think about and even though we have not achieved our inflation goals create it has taken the market by surprise but it is one of those events where it will be more clearly committee kidded that this is a longterm project and not to read too much into the signal that was read by the market today. Week maymeeting next be getting more interesting than we first imagined. Mark cudmore joining us, a macro strategist. Your a great function on bloomberg. Use it throughout the day. Get your launchpad and get it set up, it is worth constantly having throughout the session. Lets get more analysis ahead of us isb decision, with andrew bosomworth. Which words will mario draghi drop today . Andrew we will see the words referring to Downside Risks on Economic Growth being removed, the circumstances, Economic Data have moved ahead of that sentence when it was formulated. I would expect also some tinkering on the wording around the policy reaction function so we may well see the word or lower referring to the policy rate being removed. We may see the word well that could happen out have an outside chance see a sentence referring to extending purchases as things get worse. That is the maximum we can see today. Matt why make the language changes when they are going to lower their inflation forecast . Isnt that the real concern . They cannot necessarily begin to taper if they do not expect to come close to their inflation target . Correct. Hat is we are not expecting any signal on tapering. On the head. Ail the ecb faces a dilemma if on the one hand it lowers its expectations for its forecast expectlation which we and as bloomberg broke the story yesterday it could be as low as 1. 5 for 2019. That suggest it will have to do more on quantitative easing. That is on the one hand. On the other hand it is running up against the limits of its exposure to government bonds. We think it will hit those 33 limits in the first half of next year. That would force it to taper. To how the ecb squares the circle will be key both to its credibility and four asset pricing in the eurozone markets. Way, how do you change the when it looks like none of the Central Banks around the world although they all want to normalize and remove stimulus achieve their targets . Compared toat say your expectations to a few months ago . Comes tohe notion that mind is hawkish mistakes. All the Central Banks globally are facing this problem of where is the inflation, how do they get inflation up and they are facing some Financial Stability inues or capacity issues terms of what else they can do and there monetary toolbox. We might be going into a situation globally, youre talking about japan before where Central Banks have to remove some of the stimulus from the economy at a time when inflation is not really a problem in terms of overshooting targets. That would speak to more deflationary risks. We would want to be in that environment pretty cautious on s that are dependent on strong Economic Growth to maintain relations. That could range from countries that have low growth piles and high debt riddens like italy and japan to highyield credits which need strong Economic Growth. To maintain the evaluate and the valuations. Guy do you sense any frustration at any of the Central Banks that the inflation target may not be the way to go or current my Monetary Policy is turning out not to deliver what was anticipated . Isan is the the doj modeling how it will exit. That exit probably is a long way away. The what about the idea that maybe they are going to the point of saying we need to rethink this, we need to go back to basics, we need to take a look at where we are and why we are here. Are we at the edges of sensing some of that frustration . There is pretty good work on this where if you look at the combination of real Economic Growth and inflate Consumer Price inflation out turns, for decades starting back in the last of in the last century. There is some form of positive correlation. We notice when there is stronger growth there is higher inflation. There is some longterm Secular Forces at play like demographics like productivity and regulation which might be Holding Back Growth and causing a problem in reachinggetting up and those inflation targets. If that is the case, Central Banks might have to rethink what precisely their target is, is Consumer Price inflation to narrow, should they be broadening that to incorporate other assets like real estate or Financial Markets, bubbles which obviously respond to this strong monetary stimulus. Or should they be more content with lower inflation outcome question mark if we are going into a world where real close growth is slow and Central Banks have to be with their foot on the pedal stability and to get 2 inflation that is a world where we could get bubbles. Guy lets talk about financial conditions to wrap up the conversation. Ins chart has got the u. S. Blue and the eurozone and white. The higher the line goes the easier financial conditions are. The fed is tightening but financial conditions are getting easier. That spread is widening out between the fed and the ecb. Fedmany more times can the tightened but not tighten . Conditions getting easier, not harder after the tighten . Answer the fed is moving in into the range on the fed funds rate where it is comfortably away from the zero line where they might start to swing the focus of their policy from the policy rate to the Balance Sheet. We might be going, entering a in which the pace of economic rate hikes starts to slow down. The fed starts doing something more on the Balance Sheet, on don sensing the Balance Sheet. That could potentially put more risk premium in terms of the term premium for Interest Rates into the market that could steepen the yield curve. How that precisely feeds into financial conditions depends on how you collaborate your indices but given that the mortgage arerest rates in the u. S. Run off the long bond yield, that could lead to a tightening of financial conditions there. That is going to have some impact on growth on the economy. This is the third longest expansion in the u. S. Since 1945. It is a mature business awareness of Financial Financial and conditions could be coming upon us. Matt thank you for joining us, we appreciate your time. Andrew bosomworth financial conditions could be coming upon us. There, the head of [inaudible] four pimco deutschland. Meg whitman said she supports some of Donald Trumps policies but not all of them. As you know i was on the other side. As a lifelong republican i endorsed Hillary Clinton but won, i saidnt trump to our employees, we need to give them the benefit of the doubt. So we are. When we think there is something that is not in our best interest or the countrys best interest, i will speak out so i said i thought we ought to stay in the paris climate accord. The next generation of industries around clean energy and others is an important thing for the u. S. It does not impact our relationship. We happen to disagree on this issue. Emily pimco tells me he thinks the president decided wrong on paris but is keeping an important dialogue because it is a important for the country and strategy and company. Mag we are in favor of tax reform. We think the ability to repatriate cash overseas at a much lower tax rate is important. We think a lower Corporate Tax rate would spur growth in the u. S. We are not for the border adjustment tax. That is called for companies that import high degree of their costs and work on relatively low margins. The retailers, a lot of the technology companies, i think that is not in our best interest and and the interest of the u. S. We just make it clear where we stand on issues, very respectful, civil discussion and that is what this country was built on, the ability for civil discourse and disagree without being angry. From that was meg whitman hewlettpackard talking to emily chang. Lets get the bloomberg is this flash. Juliette airbus may be thrown a lifeline for its struggling superjumbo. Emirates is said to be in talks about buying 20 more planes as they discuss cutting production. Emirates is the biggest a 380 operator in the world. People familiar with the discussion say the carrier has not decided exactly how many airplanes they want. Credit suisse investors will buy more than 99 of a rights offering. Raising money for the turnaround plan. This is the second share issue since the ceo took over two years ago. Funds raised will be used to complete the business overhaul and explant expand wealth management. That is your Bloomberg Business flash. Guy and matt. Guy thank you. We are minutes away from the open. Could airbus see that order having an impact on its share price today . Will tim clark announced such an order . U. K. , theypen in the opened 50 minutes ago at seven and they will close at 10 00 p. M. This is bloomberg. Guy welcome back. It is thursday in the u. K. In case you have not noticed. Lets take a look. I set this up by the stoxx 600. Vodafone goes ex dividend as does wpp. Be aware that they will go ex div. You need to set up the index and make a few changes. Airbus is another stock to watch in the open. Tim clark may want some more three 80s, emirates model is based on the 380. They have a lot of the big triple sevens. He has been a big buyer of this aircraft and he apparently may want some more although he would rather have a real engine and gined version. You have Better Weather at the air show. Does rain a lot. Little bitng here, a chilly but i am excited nonetheless because the ecb is expecting to change the language in its statement no longer saying that risks are tilted to the downside but rather balanced. Also touring its inflation point 5 . O one that should be a disappointment to anybody rooting for the economy. They will push up their growth forecast create investors are in wait and see mode. Not really making a lot of risky purchases and the euro is flat against the dollar. We can expect some excitement when the statement comes out today. At 12 45 p. M. U. K. Time. It is fun whenk they are on the road. It adds another element to watching when i was think is one of the best events of the month when it comes to Financial Markets. You get a ringside seat in the dry which will be nice. In terms of the story what we can expect from equities, this is what we are looking at. This is the picture on our bloomberg, the market going nowhere in a hurry. A sideways move for this is the fair value calculation. Not really some big moves out there. We will drift sideways. Event in the next 24, 48 hours and that is what the market is positioned for. The open is next. This is bloomberg. Guy welcome back. Minutes to go until european equities cash opens. I would like to do a drum roll, but i do not think it is appropriate. We await 10 00 p. M. Tonight when u. K. Pulls close. Close. S it will be a fascinating day, but for the moment, the market is sitting tight, as you can see. But, matt, the ecb is kind of the main event. Matt yeah, it is. Interesting for me because i have been to so many ecb meetings now, where they do not change the statement at all. I am excited to hear a change in wording and kind of look for a change in facial expressions as the ecb gets closer. Maybe some normalizing policy p it on the other hand, they do not expect their Inflation Forecasts to get anywhere near their target until 2019. Who knows if they will get more hawkish or dovish . Guy it is the facial expressions i am really looking forward to as well. The markets are open. That sums it up. A little affirming bit, but not by much. You will see a similar reaction across the other markets as well. We are waiting. We are going to drift sideways and not deliver much in terms of a sense of direction today. 7474 is where the ftse 100 is trading. Manus cranny. Manus there is the exporters of the world delivering on mliv blog, a superstorm delivery. Imports rising as well. That is the bedrock of the economy in terms of how china is doing. Oil took a battering. Dollaryen. On the european onsantander story trading the most read story briefs this morning. Really reflecting in terms of taking a big hit on that real estate. Thecapital rate will be balancer. As you get into the china numbers, iron ore imports into china rose by 7. 9 or 67 in terms of value. That is what is reflected. These are the numbers. You talked about them more as you go through programming.