Strong and his secretary disagrees. Oil slows its decline ahead a day of forecast. They are falling for a second week. Yousef it is 7 00 a. M. In easton pull istanbul. Shery i am in hong kong it has just gone midday. A little bit of a rainy picture when it comes to the markets as well. We did get positive sentiment out of wall street. That is faltering in asian trading. We are seeing the japanese yen falling back most of its losses. It was reported by treasury secretary mnuchin saying that a strong dollar is good in the longterm. That is not holding. The yen at 108 spot 93. On the dollar, 75 56. We got rba minutes, which are focused on a week aussie job market and a strong Housing MarketHousing Market. You are seeing rand continuing to decline falling for two consecutive sessions. Composite isnghai also extending its biggest loss in four months. It is below now a 50 day moving average. That is something to keep an eye on. China home prices will be rising in more cities since october. A lot of risks in the markets out there. , andw you are in istanbul a rainy day. What about the markets there . Before i get into the markets, just a quick line on some of the political developments. The referendum out come is still still beingcome is considered. There is contention on the ground. Acrosse seen reaction from the european mainland. United states Mainland Department says its concerns of the referendum the osce points out the unlevel playing field. They call it international standards. The National Security council, this is the second important are commendingey an extension of a state of emergency. This is something investors were watching carefully. Markets have been taking all of this. The turkish lira has had in advance on those gains. You take a look at where that is now, far away from that. We are seeing some interesting calls from Morgan Stanley late yesterday saying, we are sticking to our call. Lira against the u. S. Dollar. Schroeder saying their local bond, it is very cheap. The government here this is a bit of a more bullish take. They say it are on they say they have a take that will affect turkish assets. We are two hours away from the opening of the markets in the middle east. Dubai and abu dhabi start off. A lot of these earnings are still trickling in. You get the quite a bit of development on several fronts, specifically when it comes to thanks in saudi arabia. Also in abu dhabi, Abu Dhabi Bank leading those gains. Abu dhabi is the best performer in the region. Tell coal surging and saudi arabia. Shery lets get a check of the first word headlines from around the world. A 70 cities last month have rose. Cities inp from 56 february on a month by month basis. When compared with march after, home prices in beijing and shanghai are up around 20 . Policymakers are seeking to clear a glitch of unsold homes while enforcing kurds in Major Centers to prevent a housing bubble. President trump will target i. T. Outsourcing companies later with the h1b see visa programs. Administration official named and emphasis is examples of companies likely to have fewer visas approved under the changes. H1b Program Channels thousands of Foreign Workers to the u. S. Tech industry. A new survey suggests iranian president faces an uphill task to rent when a second term. Term has notfirst improved the economy, or the standard of living for average iranians. Or that one and a half thousand people have registered to run in the may 19 to vote. Be candidates will now screened by credible authority. Global news 24 hours a day powered by more than 2600 analyst and analyst in more than 120 countries. This is bloomberg. Shery more troubling Economic Data a day after voters handed new power to the president. According to bloomberg data, turkey posted its biggest budget deficit for the month of march, while joblessness in january rose to the highest in seven years. Yousef, this is some of the worst we have seen in years. It is remarkable. It shows you that this government has been pushing a more aggressive spending plan ahead of the referendum to keep the population relatively satisfied, and to inch forward a little bit in the referendum. The actual numbers, lets break this down. We put this on a chart and you can pull this up on your bloomberg. The budget deficit is the worst in years. Since at least 2006. Five point 3 billion, that is three times the shortfall from a year ago. Take the general unemployment figures that are up 13 . That is the highest in every of 2010. Other elements feeding into the story, if you think about that failed coup attempt, that weighed in on the government. That is reflected in those numbers. We talked a lot about the data, but what will happen on the political front . That is the other big question. We spoke about the state of emergency. What about early elections, what about the way forward for this government . We sat down with the deputy Prime Minister and asked him some of those critical questions. Take a listen. , nohere is a debate decision has been made. Were talking about with come consulting with the Prime Minister on the position. No decision has been made. Is made, theion people will decide. Lets not make decisions at this stage. , sort not been brought to of, agenda. Whether or not parliament would approve it is a second issue. Even if Parliament Approves it, whether or not people would approve it is a separate issue. And allowingurkey turkey to drift away, lets not overdo it. Is, younal question have always maintained an independent policymaker, regulator. Keeping that in mind, what was your initial reaction to expectations that there might be something in turkish policy immediately after the referendum now that some uncertainties are behind us . Not comment on molitor Monetary Policy. However, it is very clear that we have a bit of an inflation problem at time. Price stability is a critical objective of my government. Central bank has responded to rising inflation by tightening Monetary Policy significantly. They have made it clear that they will take further steps to tighten policy if needed. Lets just be very clear that, my government believes in price stability. The reason why growth is higher is because we have had inflation of two single digits. Admittedly and high single turkey had remember three to four decades of triple digit inflation experience. Dropped, that unstable economic backdrop was the main reason for poor macro performance. Turkish economy is resilient to theecause, thanks economic policy, but also high stability, as well as instruction reform. And turkey will achieve stability and the administration. Had 65 governments and 94 years. That is behind us. That is a deputy Prime Minister their speaking to bloomberg television. Nextremember that the policy meeting for the central bank is coming up. That will be another key milestone as the country moves forward. Shery lots more to come on todays edition of Bloomberg Markets middle east. Later in the show we will hear from the ceo about the bank for their firstquarter estimates. More on the fallout from turkeys referendum. Markets have reacted favorably. This is bloomberg. You up tots get speed with the two Key Companies listed on the Dubai Financial markets. Starting off with arab tech, news that it will be halted from 11 00 a. M. Onwards for the General Assembly meeting. Has beenlot of concern voiced by investors around the stock. O trading days ago was down almost 2 . We will be waiting for additional news as to how that meeting goes. Dubaillwether of the market saying that he has resigned from the board. We are not aware of why, but that is a Key Development here. Shery lets now turn our attention to the fed in the u. S. Economy. Federal reserve vicechairman is saying he does not see a replay of the taper tantrum of 2013 as the bank prepares to review its Balance Sheet or take a listen. Less likely to face market disturbances than we did in the case of a taper tantrum. Learn asourse, as you you are in the imf, and you make any favorable prediction, we have to recognize complacency must be avoided. That is to say, as we continued to discuss and implement policies to reduce our Balance Sheet, we will have to continue to monitor market developments and expectations. Carefully. Fishersts discuss remark and the potential Market Reaction from this. Economist and shortages. Thank you so much for joining us. Future of seeing the a fed rate hike in june coming down from two weeks ago when it was over 60 . We are now seeing even odds. Are you worried that we could see a taper tantrum again at the fed does not prepare the markets accordingly . Marketar, a think the has seen a push that is preparing the market for any kind of event, especially normalization. I think that is what happened in march that has been a success with the fed, because it was clearly a reaction from the market. I think the taper tantrum remains at this stage for a set of reasons. I think the fed is in full command of setting market. Xpectations also because, i think inflation gives a maneuver for fed policymakers to remain in those stands. To the u. S. It comes dollar, there does not seem to be a lot of conviction that if tightening will leave the dollar higher. If you take a look at the bloomberg, you can see the bloomberg dollar index is reaching its moving average. That would be the redline over there. Also a treasury yields just continuing to decline. I am not surprised, given the weaker u. S. Inflation numbers for march are weaker than expected. What is your call when it comes to the dollar and treasury yields, in particular . Dollar, it is a long story, the u. S. Dollar is coming to a net. We may expect it further because depending on what is going to happen to the u. S. Economy and inending on the need to tie more or less tie and more or less quickly. For trumps president and it is a bit too strong at the state week as there is too much conviction ineffective the u. S. Economic policy would be a discuss a success, that is an indication that there is no appetite to push it higher than it is right now. For the yields, i think the the fact that Risk Appetite will go backandforth. The yield will continue to be relatively stable. Let me jump in on the yield question. Patrick is saying, the fact that the market is pushing those 10 year yields closer to the 2 mark will be better third strike. Bond market has been right wrong twice in the last 18 months. We should be a little bit cautious. And the complacency fact that inflation is low and will continue to remain low. The fact that the fed will continue to keep a cautious dance. We should keep in mind that labor Market Conditions have significantly improved. At some point in time, i think that we should see strengthening in terms of wages. Keen to normalize military policy. The main order for the fed is inflation. I think that is clearly something that push down recently the yields on the november curve. What the fed does or does not do sends shockwaves around the world. If you look at what happened with the last taper tantrum, turkey was especially vulnerable. This economic structure of the country and how it depends on capital inflows. How vulnerable is turkey this time around . Xavier i think turkey remains quite formidable, when you look turkeycits, clearly remains one of the weak links among emerging markets. Been beneficiary to turkey so far is the fact that the u. S. Dollar has really been on the downside since the beginning of the year. Also the fact that markerts the prospect of emerging markets they could really turn down, really feeley could the pain. Not necessarily in the shortterm, but with inflation running up around 10 . Could bethat the bank in danger by some political attempt. Cause some kind of pullback on turkish assets. Shery pain is already being felt in the lira which has given back gains, down to 10 sub 1 down to 10 sub 1 . Stick around we want to talk europe. Coming up, after brexit and trump shock, investors are taking no chances with the french election. This is bloomberg. Yousef you are watching bloomberg. Shery i am shery ahn in hong kong. For a check of the latest business headlines. Laying off hundreds of engineers in Washington State and mail them in a more jobs laid later later. The latest cuts take of it take effect in june. A cause of more than 1800 workers who agreed to leave earlier this year. Boeing is the largest u. S. Exporter. The second biggest on the dow at 2 . United airline ceo is assuring wall street that the carrier will rebound from the attention of a passenger. Shares close to an sent up, snapping three days of losses. The ceo says it will be a watershed moment for the united and they are determined to put customers first. Uniteds First QuarterFinancial Performance heat expectations. Shery chinas domestically designed airline a remain a flight after completing a highspeed taxi. They are expected to announce approving a flight of the scene 919. C 91 nine is built to challenge boeings 747 box 320. Flights have been delayed by production product production problem since 2014. Catching youre breath from the results of the turkish referendum. We have the french president ial election just a week away. Of course we are looking ahead and looking forward to that. There are several banks in several resource houses that are coming out with research of how to train scenarios for that. Me run youhs, let through those, they are recommending selling french debt in the two round election on sunday, and on may 7. Lets discuss that tactic. He is still with us of course. What do you make of all of this. What is your base case for what is likely to be a nailbiting time. . Xavier i think a base case would be, some kind of tightening. I think it is running at over 70 basis point. It seems high, and this is a little high. Outcome we do think the should not be a big surprise for the market. The yields will continue to come down. Seeing his rising in the polls. The euro is doing fine, but there is another chart i want to go through that shows a different story. That would be the onemonth eurodollar volatility. It is actually spiking quite a bit, almost nearing that level after the brexit vote. What is this telling us . Xavier there is some edging investorshey can buy to euro assets. The risk iss why approaching a placebo decision that is increasing. U. S. Happened on the dollar, this is why euro has remained relatively stable over the past few months, despite the increase in despite of what could happen in the elections. Shery it is highly unlikely that we might see le pen. It is highly unlikely she will take france out of the euro. Shall we be buying the debt going into the election . Xavier it is something that could be applied, for sure. It is always a risky bet when you try to build up your investment depending on the political outcome. What will happen, whatever the outcome of the president francen, the fact that will be part of the European Union and will remain top. There are a list of political insist thatder to opinion. Euros are on strong support. Shery thank you for joining us. Coming up, Oil Continues to slip from this years longest rally. We will speak to a bullish investor next. This is bloomberg. It 7 30 a. M. In istanbul these are the first word headlines from around the world. More troubleported Economic Data a day after president erdogan one and referendum giving him new powers. The finance Ministry Posted its biggest deficit from march since 2006. Highest ino the seven years. The figures reflecting economic fallout from last years failed coup and increased Government Spending ahead of the referendum. The former korean president has been formally charged for the bribery and abuse of power. She is also accused of Colbert Shannon and leaking state secrets in an investigation into links between the presidency and big business. The chairman has also been charged with funneling more than 6 million. Saudi arabia will develop 30 new wind wind solar and rodgers over the next 10 years. It is part of a 50 billion oilram to reduce consumption. The Saudi Energy Minister says the kingdom will produce 10 of power from renewable by 2023. Gains after hours despite force First Quarter growth of just under 5 million. Those numbers were hurt by the lack of a big drawing show, it quadrupled. Netflix warned that shows in the Second Quarter may reverse that. The ceos of the potential market is still back. Global news, 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg or it bloomberg. Shery we are seeing some markets in asia firmly in the green, but it is not enough to boost the regional green mark which is down 4 10 of 1 . Its get the detail of how the markets are trading. Right, youhat is have seen some upside in it. Investors are a little less cautious. The fact that you have big markets in australia, down by over 1 and hong kong down by over 1 is waiting on that overall picture. We have hong kong markets resuming trade after that long weekend. That three and a half percent fall you see coming through in iron and oil ways on the aussie market. T currency market, yen is not showed here but it is significantly stronger. Lly weighing weaker lifting japanese stocks that are not being shown on the board at the moment. You are seeing a retreat coming through in the yen. This is about Dollar Strength or it weakness coming through from others. Declining ass been well. A quick look at some of the stuff we have been watching in the region. China property prices coming through. They were better than what was expected and much better with 62 out of the 70 city seei