Bloomberg speaks to the oven of the bank of england at 11 30 a. M. U. K. Time. The u. S. Stops short of man. G a laptop dan what does it mean for the European Airline sector . What is it mean or your next trip to the airport . A break for murdoch. He u. K. Governor is expected to give his decision on a bid to sky later today. We will discuss the options. Are less than half an hour away from the european open. A pleasure to be back in berlin to watch these markets. Such an amazing trade yesterday especially overnight in the u. S. S that we have not seen in months. Gaining. 5 of 1 apiece. You can see what has been going on while i was delayed overseas bond trade. You can see over the last three days how much these yields have come up from less than a quarter of a percent almost up 2. 4 of 1 . Real big gain in yields and we will see of that continues. Guy see what happens when you go away . Lets talk about what is happening around the gmm. The u. S. Bank story driving u. S. Equity markets on to the front. You can see that with the s p 500 area they are paying out big. That is one factor. Does that change the broader trajectory of u. S. Markets giving extra impetus . Markets will been today. I will show you the commodity. The aussie dollar rallying on the back of my id currencies doing well. The pound is well bid, up by. 3 of 1 . The euro continues to be well bid to matt was talking about the bund. Lets walk you through what is happening in the commodities space. Lets show you what is going on. Cap are up 1. 6 percent. Inr another 3. 3 . That momentum continues in this commodity story. Rippling back to other asset classes. Oft is there are plenty big stories. Lets get the bloomberg first word news update. Here is juliette saly. Juliette and the u. S. , the countrys big bank have announced larger than expected payouts in the wake of the stress test. And bank oftigroup, america led the way. It is the first time that every lender has cleared the key regulatory hurdle since it began in the wake of the 2008 financial crisis. Shares across the industry rallied in late trading. U. S. , the trump travel ban will come into effect at 8 00 p. M. Eastern time according to a person familiar with the matter. The us the restrictions will apply to migrants from six countries. The department of Homeland Security is imposing broad new demands on flights from america to other countries in an attempt ofcombat the threat terrorists hiding bombs and laptops. Chinese president has arrived in hong kong to mark the 20,000 anniversary of the british handover. He said china will continue to support hong kongs development and livelihood improvement. He reiterated that he will ensure the smooth the flotation of one country, two systems. The European Union is willing to give ground on its demand that its judges protect the future rights of eu citizens in the u. K. According to three eu officials, brussels could settle for an alternative to its original position and the European Court of justice must be the ultimate arbiter, putting the onus on the u. K. To increase the level of protection it is offering. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Much. Thanks for a lets talk about the carney confusion. A week after signaling near zero Interest Rates were appropriate the bank of England Governor Mark carney suggested yesterday the time is nearing for hike sending the pound higher. The euro hit a post u. S. Election high this week as comments from mario draghi bolstered the ecb is preparing to unwind stimulus. Maybe a rate rise. Take a listen of what we heard from central bankers this week. Monetary policy should not be overburdened i other tasks by other tasks. You cannot that, underestimate the importance of innovation, of productivity. Important in informing our Monetary Policy. Some removal of stimulus is likely to become necessary if that tradeoff continues to listen. You can see the chart and plot your view on where it is headed. As it lessens the policy decision becomes less conventional. We can be confident that our policies is working and its core effects on inflation will gradually materialized. But for that, our policy needs to be persistent, and we need to be prudent and how we adjust its parameters to improve economic conditions. Matt lets get to mark team ind from our mliv singapore. An incredible day in portugal for Central Banks. For the markets. Have we made a big turn here as far as what the Global Markets expect from central bankers around the world . Mark i think some people will be looking back on this week and saying it was a watershed moment in money market policy. To have so many Central Banks when the space of a few days to ,e saying almost the same thing moving toward a slightly tighter Monetary Policy is quite unusual. If you think back to when quantitative easing started, it became a train that everybody jumped onto. The fed seems to has set the path for people to move away from that create we have had the ecb, bank of canada am a bank of england, they are saying similar things and mario draghi as well. This could be look back on as being an important week in terms of the change toward a more normal Monetary Policy. Guy moore fed speakers coming up over the next few days, i will be fascinated to hear what they say. The fed has been left out of this process. What i think is interesting and you guys have highlighted this this morning is that the yield gap is starting to look a little bit stretched and you have this chart, the bloomberg dollar onex versus the yield story the peer group and the yield spread. That is the white line there. That is the real yield and the dollar index. This trade is lockstep but it is broadening out. Is the move against the dollar over done . Mark not necessarily. Joining this party where they are going to move away from highly negative rates, that is a significant change and it will take quite a bit of adjusting by investors in the market to get used to that. Youre talking about the second more most important Central Bank Going from a super easy policy possibly back to more normal policy. That is like watching a supertanker trying to change direction. It will take a long time in the market will go too far the other way before it realizes it needs to compensate itself so in the short term, i do nothing you will be help for the dollar it all. I do not think it will be help for the dollar at all. Matt the top central bankers are into medication often. The factink this was that we have all these hawkish statements from the big Central Bank Leaders . Mark it is probably not a coincidence that theyll met together this week and they are saying a similar kind of thing. What they are doing is they are supporting each other in the sense that the u. S. Had theirize they do not need easy policy. The others are coming to the same conclusion. Probably not all to the same extent that they are all going together and saying it is about time that we shifted in a similar direction. Matt thank you. Mliv blog. Rd for you can follow on mliv. ,ecommended in these volatile volatility coming back and risk on times. Definitely check out mliv. Guy lets talk about what we will have later. This man, we have been talking about him and we will talk to him. We have an exclusive interview with mark carney 11 30 a. M. U. K. Time. Francine lacqua. You can watch the show, all of our shows, what we are putting out on tv. You can use the video stream and it is amazing. You also get is the functionality that goes with it. You can break out the charts come a you can see the data that we are talking about, you can talk about the programming, what is coming up, what is the breaking headlines, whats functionality we are using, what charts were talking about, and you can use these on your bloomberg screens and you can it involved, the little button hidden down here. You can get in touch with the team. Interactive television. The i. B. Function available by that button down there. Fully and confidence. What will be we be talking about next . Considering cuts to the 34 billion enter infrastructure plan. We will cross to paris next to get an update to talk about what it means for the French Economy and the euro. That is next. This is bloomberg. Matt welcome back to the european open. 15 minutes until we see the start of cash trade across the you u. K. And the continent. Lets get the Bloomberg Business flash. Beingte staples is bought by sigma partners for 6. 9 billion. Sycamore is paying 10. 25 a share for what it called an iconic brand. It is one of the largest retail deals of choice 17 and caps more of a year of turmoil which was thwarted in an attempt to make its own acquisition in may 2016. Delivery hero. Completing the biggest tech crossing the public offering. For 25. 5 euros apiece. A market value of 4. 4 billion euros with trading due to start in frankfurt tomorrow. Murdoch is expected to find out whether he is 11. 7 gother his bid is likely to ahead. He come six years after a previous attempt was sunk by a phone hacking scandal. Karen bradley is expected to Tell Parliament what she intends to do about the takeover by between for century fox which already owns 39 of sky. That is your Bloomberg Business flash. Guy thank you. President Emmanuel Macron is freeing up frances labor market. Theirconsidering trimming infrastructure plan. Now, our guest. We have seen what has happened with the euro this week, part of that probably is what is going on with mr. Macron. Our expectations in Financial Markets too high for mr. Macron to deliver . That is the first big test for Emmanuel Macron. Difficult but we are confident that they can test this reform. He has a strong ability to listen and has had many meetings with unions. There is a feeling that the unions, the majority of the unions is [inaudible] to negotiate. Guy when will we know whether or not he will be successful . He said he wants to move fast. How quickly can he do this and when will it be able to score his success . That at the end of july we will have already the flavor of whether he will consider are not. He wants to speed up the process by limiting the amendment that [inaudible] can make. We will have the flavor by july. We have athe u. S. Saying, it is the economy, stupid, which means to voters, the public, the only really care about the economy when it comes down to it. The european economy and the French Economy have been in a real recovery. I have a bloomberg shot here of eurozone pmis, number 9230 on the bloomberg. The bottom line is if you look at the blue line, euros and deposit pmis putting up a real recovery. Is Emmanuel Macron really thisng a big boost from economic recovery as far as the voting public is concerned . Guest it seems that he has been lucky. If you look at Consumer Confidence indicators, there is a 10 year high in the eurozone and france. And france it is falling a little bit. Indicators real data we see, if anything, it is an improvement. We see some acceleration a private investment. That was not the case the last two years. Trade [indiscernible] and that is remarkable. Emmanuel macron is lucky and the momentum will help him. Help willat that help get his reforms through and will those reforms be business friendly enough to continue this recovery that we have seen . If background gets his wish, is that good for investors as well . It will be good for investors, yes. The first half of the question, can you repeat . Matt is it good for investors as well, are there reforms that macron wants to push through, if he has the ability to do that, are they going to continue this recovery that we have seen in the european economy . Guest yes, definitely. One thing we should underline. Government has passed a lot of structural reform in 2015 and 2016 and that the reforms even though they were not popular have an effect in terms of macro [inaudible] an positive impact in 2018. Macron will benefit from the reform. Trading ease are oats are trading [inaudible] is that the right price . In a very sharp tightening of spreads. Been, we observed very stable sovereign growth. There has been some tightening. The ecb has been downgrading its forecast. They delete the postponement of tapering. Vote is [indiscernible] [indiscernible] and voters will pay claymore in the market. We have to consider that jet to gdp ratio in france is around 100 . While it is 70 in germany. We have a gap in terms of the between france and germany and spain and germany. This has to be applied by the market. The spread is too low for france. Guy has the market overreacted to with the ecb has been saying over the last 48 hours, has the market misread mario draghi or do you think the market has got it right . Guest i do not think so. Exit. B is looking for an they have to diminish to reduce their accommodation. They have to prepare the market. This has to be done gradually. Ecb willtely think the be able to reduce its policy measures in 2018. Thing we monitor is [indiscernible] this is still very low in the eurozone. But we think and we are showing we areging signals and the acceleration of coefficient in europe. This will allow the ecb to exit gradually. Inexpect a sharp reduction 2018. I do not think that was an overreaction by the market. Guy that is really interesting. Thank you for student spending time with us. Joining us from paris. Matt murdochs fox, we will find out whether his 11. 7 billion pound bid to buy the rest of sky will go ahead. Karen bradley is expected to Tell Parliament at 10 30 a. M. London time what she intends to do about foxs takeover prospects. Analystg Intelligence Joins us. What should we expect and how likely is it the deal will go through . Approval with remedies or a markets to the authority or a rejection of the deal. After somewhat weakened government following the election, they have an issues, there is a higher chance that the culture secretary will refer the case to cma. It will take another six months for the deal to be revealed. Guy is the phone hacking scandal still an issue . I do not think so. Even at that time it was not an issue. They conducted a test for sky some criticismth of james murdoch. Politics was making it difficult. Absolutely. There is the political background but the whole process needs to be away from projects and unbiased. There is the chance that there is an approval eventually. How important is this for fox that he goes through, putting the murdoch interests aside, how much does it matter to the company . It is an interesting sale. If the deal is referred to cma and they find it to be revealed, fox needs to pay 100 72 Million Pounds to sky shareholders. There is that cost. If the deal is approved what fox will get is a Distribution Platform in europe which allows the company to be a Global Entertainment and distributing business. Guy we will look forward to that decision later on and bring you that to you. With plenty of analysis. Open,an equities will asian trading has been positive. It can see that we are about to throw out on the board. This is bloomberg. Guy morning. Welcome back. Market open, one minute to do. It is going to be a positive session. We will continue the momentum into your. Thats what the fair value circulation looks like. We have seen iron ore prices well bid. That could ripple. U. S. Banks strongly bit yesterday. How much has that changed the story . Lots to think about. Especially currencies as well. Im taking a look at the pound over the last three days of trading. You can see declines we have had up to the high point so far the session, 129. 79. Ant obviously tends to be indicator of which way the ftse will go. The pound is up, the ftse comes down. The pound is down, the ftse goes up. It looks like it will be a ftse, andpen for the gains for the pound. Something fairly unusual. Guy let us show you that open. Ftse come through, already positive. Climbing up. 3 . We are expecting more than that. The 74 handle could be a run the corner. A similar performance elsewhere in europe. It will be interesting to see what the market does on the back of the stronger pound. The Market Makers have a lot to think about. The minors will be interesting. Keep an eye on sky. There is the aex, opening up. 4 . The stoxx 600,. 5 . Bunds selling off already. You have seen a ripple in the treasury market. Gilts opening up. Manus cranny. Manus look at these financials. We are storming it up p or, up. 7 . To get toven years where you can buy back 64 billion worth of u. S. Equity. How long will it take for european banks to be in the same kind of thing glorious position vainglorious position . Under 7 stocks are up on the year. Technology up 15 . Financial services up 15 . We are going to the halfway mark. That is the kind of momentum. Global stocks that had the best start of the year since 1998. How much money has float into europe . Is there more velocity to come . Those financials are strong despite two of the italian banks getting knocked together. I love this. Is dancing. It is doing the draghi to step. There isa belief that a shift in gear, tone, sentiment, from four out of the five major central bankers. Is that the case or are they saying that you have had it so good for so long that we need to begin that substantial conversation about normalization . Despite that, you see the euro rise again. Is that a dollars off the story . Softness story . It is driving the euro higher as we see the discussion on the ecbs choreography coming into place. Orders at 114. 10. When it comes to sterling, matt mentioned it. What you have got is a real velocity coming back to sterling , and i suppose, to a certain extent, you can debate this. You know, is carney unreliable or saying i want to see more data . If i am wrong, i will join the fray . I will join the side of potentially raising rates . Is that this is your u. S. Government bond spread. I guess the gilt spread is just off the high, record high. What next for the spread for the differential between the two . That is the question. Can the fed stay the pace with what they are doing versus what the market expects f