Going to hear from Deutsche Banks ceo john cryan. Good less than half an hour away from the European Equity market open. That me take you to my bloomberg. We are going to see a little bit of negativity reflecting that selloff we saw yesterday in the United States yesterday. Not going to be down by much this morning. 1 . To around lets show you what is happening elsewhere around the world. The gmm function. A good place to start your day. What we are seeing here is a little bit of a pickup the new zealand dollar. The end is down. Trading north of 103. That has had a positive impact on equity markets in asia and particularly in tokyo. That is a story i hope to continue to watch out for. Also that boj decision as well. In terms of what we are watching elsewhere, quantities reasonably mixed. Bond markets reasonably mixed. A little bit of a buying spree in the back end of the japanese bond market, given the news we have seen of late, nothing to write home to. With theavid ingles first word news. David lots to talk about. A 1. 8 billion dollar property deal going to people familiar. The Investment Bank was the original winner of the sale before the transaction fell apart. That led blackstone to prevail with its deal. Worth around 450 million you dollars. Did not want to comment at this point. The cape Prime Minister marked the end of summer the uk Prime Minister mark the end of summer today. Theresa may and ministers have so far it chosen not to flush out public details about what they will be seeking in britain from the eu. They will soon face pressure from international colleagues, investors and executives to define what may means when she says brexit means brexit. Donald trump has said he will travel to mexico today for a meeting with the mexican president. The chump and Clintons Campaign means the trump and clinton resident. Eans for the trump is expected to deliver a speech today in arizona. Onwhether he is moderating this issue. Hillary clinton has been given 30 days provide written answers two to the five questions stemming from her use of a private email server during her time as u. S. Secretary of state. Among the questions, the nominee has been asked to explain under under old why and how the private email server was created. The list was drawn up by a watch dog group with permission of a federal judge. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. Bloomberg. Guy . Uy thank you, david as august draws to a close, so to me the u. S. Bond rally. Treasuries are heading through. He worst month increasingly more hawkish comments coming out of the federal reserve. While the data have improved, much pessimism has remained. Speaking to tom keene, Stanley Fischer i just this bloom fisher addressed this gloom. Employment is close to full employment. It is about growth and that problem is about productivity growth. Something which is very hard to control by policymakers. It depends enormously on what private individuals are doing in their companies. It is very slow at the moment. Guy Stanley Fischer talking to tom keene. August, what a difference a year makes. Particularly when it comes to volatility. Lets return to the uber can chose you and show you what happened a year ago. We highlighted it in red. You can see the huge spike in volatility. China largely responsible. That was a year ago. Where are we now . The markets are relatively becalmed despite equities pushing higher and bond prices doing the same. What happens when asset allocators return in september . Are we going to see similar story that we saw earlier this year in january . We saw equities selling off aggressively. Volatilenticipating a september . It has been very quiet in august. We expect september will be the same. Markets are up 2. 5 in local currency. It is hard to see markets trading significantly higher but it is also harder to see markets selling off. There seems to be a lot going on at the moment. Guy what would change that for you . We have talked about the fed and we have an ecb meeting for you. Central bankers seem to be providing some catalysts. I go back to january, im still scratching my head after what caused that, people came back and believed they were wrongly position. Mica could that not happen again . Yogesh it could. A lot of questions about u. S. Interest rates. Theres a petition we can seat rate cuts and europe and the u. K. Cuts in europe and the u. K. Japan is down by 11 year to date. Expected to see a whole range of stimulus be announced. The pension fund has about 52 billion, investing to make up for losses made between april and june. The yen is soft 5 overvalued. To see that weekend. Japan could be the wildcard that could stimulate activity in this very quiet market. Guy you talk in terms of ratio. Would that be on a top end of a historical basis . We have rates at historical lows , therefore the correlation doesnt really work. Talk about the cash location that many investors have cash allocation that many investors have. Yogesh a lot of investors are remaining quiet. U. S. Markets are about you to date. Respect to what is happening globally. You have a very strong u. S. Dollar. Youve got a lot of volatility around oil prices which seem to be at the top end of the range. It is hard for investors to get excited when we have seen such a strong rally in the u. S. Market at the moment after such a quiet summer. Volumes of very muted at the moment. Guy all of that true. Let me come back to something you said earlier on which was 2. 5 up, local currency. Somebody is going to have to make more money if they are going to make their expectations for the year. Yogesh if you look at u. S. 10 year at 1. 5 pushing higher, 2. 5 on local currency. The world is ok. It is nothing to get excited about. Bear in mind that volatility that we saw earlier this year. I would focus more on what is happening in japan and china and rate hike expectations in the u. S. And u. S. Elections will drive sentiment going forward. When you talk about valuation ratios, it is earnings that drive share prices share price depreciation. Is not chair political events it is not chair political events. It is earnings. 2, q3 lets see what happens in terms of q4. They are looking for Strong Revenue numbers going forward. If the u. S. Environment is doing as well as we suspect based on the hawkish comments we are from the fed, then u. S. The mystic markets could push higher then u. S. Domestic markets could push higher. Guy Balance Sheets have expanded but money is very cheap. Why cant equity markets push higher if we continue see buybacks being driven which is because rates are so low, companies can return that money . See an you need to environment where revenues at a corporate level increase. Earnings equal weve seen a lot of the earnings numbers being managed through cost control. Even see an environment where revenues improved significantly, that should help drive share Prices Higher in respect irrespective of your selections. Irrespective of u. S. Elections. Yogesh dewan is going to stay with us. What will be learned ahead of next weeks ecb meeting . Then it is the market open. Weve got earnings. We will break down those figures for you. The bonus disappearing act. 2. 5 billion dollars goes up in smoke as banking stocks continue the route. We are going to hear from john cryan in around 30 minutes time. An interesting story doing the rounds on deutsche this morning. This is bloomberg. Manus 8 43 in berlin. Looks like a lovely day and we are 60 minutes away from the market open up your we are expecting a softer story when equities get going. Lets get you caught up on what you need to know. This is ebf with david ingles. Ingles is ebf with david this is Bloomberg Business flash with david ingles. He the dam collapsed expects a judge to be asked by the end of this month to charge employees. The company says the ceo wont be getting his bonus following this disaster. He is paid an annual salary of 1 million. Minister Michael Noonan says apple has paid all of the tax due for its activities in the country. This comes after the european owed said that apple ireland back taxes. Apple has between 5000 and 6000 people employed. They have substantial Economic Activity there. On the profits generated by the activity in ireland. David Investment Bankers at europes biggest security firms are watching their bonuses melt, according to data compiled by bloomberg. This drop has widened. More than 2. 5 billion in value per share in value. Credit suisse, Deutsche Bank and ubs. That is your Bloomberg Business flash. Guy david, great stuff. French cpi breaking. Let me show you what is happening here. This is year on year number coming in, in line with expectation. The actual number in terms of the month on month is a little bit of a pickup. In lines with expectations. We are seeing some firming in the inflation expectation. A. 4. Ersus below the liney we would have to get to take get to keep the ecb comfortable. From the in terms of the total number. That is the number the ecb is going to be august on. Going to be focused on peter we get data coming out as we work our way through this morning. Draghi has not said anything for five weeks. We start to get data. It is going to be interesting to see the ecb meeting was takes place on september 8. Some suggesting inflation is going to be making a return. Are you in that camp . Yogesh it is hard to make that call. It is hard to see us get anywhere near 2 . This is all supportive of the ecb reducing rates perhaps by the end of the year. Manus more negative rates coming guy more negative rates coming through . Yogesh more probability for rate cuts by the end of year in europe. Brexit hasnt helped sentiment. It hasnt helped inflation numbers. Inflation in the system at the moment. Guy when it comes to what happened in the eurozone what caught my eye . Lets see if i can generate a chart. The fact that u. S. Banks over the last few days have started to go up. This is not the next dictation. They have been outperforming this is not an expectation. They have been outperforming on the next dictation that we are going to see a rate rise. Yogesh you want a strong Banking Sector and you wanted to deliver. You dont do what we are doing at the moment which is keeping rates very low. There are lots of ways system really growth. One is through fiscal spending. Andk lending argument u. S. If we start to see rates go up, that will help support that lending which will help growth. In europe, they are not taking out tax. They are more likely to go down a fiscal ors a fiscal stimulus route. This is not going to repair itself over the next three or six or 12 months. They have to recover from the events of exit vote. They will get there eventually. I will go back to earnings. Most European Companies with significant u. S. That will help the environment. In this environment, and tend to agree with you, lower rate strategy is not ideal for stimulating growth. It is not going to help the Banking Sector. Guy do not cut rates. What can be done tuesday really growth from a month what can be done to stimulate growth from a monetary perspective . We will like some fiscal help but Monetary Policy can still deliver. Weve heard that from the japanese. What else is in the toolkit back of the bank of england down the road in the toolkit . The bank of england is try to force into the real economy could it is trying to force real economy. What trying to force are we going to hear from draghi that could change in the game . Yogesh fiscal spending going forward. Let the currency remain quite weak. We are undervalued in relation to the dollar. 111, 112vering around amid a lot of volatility. The euro is undervalued at the moment versus the dollar. There is room for currency to have an impact on earnings and investment. If draghi supports that, that will also help the environment going forward. The euro has been caught in a very tight range. In a very tight rein. Guy you can see the euro is marginally up and undervalued on a ppp basis. If you look at it last month, you can see the euro is trapped in a very tight rein. The euro is barely moving. Yogesh that is been a consequent thats consequent of a much lower rate environment. Consequence of a much lower rate environment. It is going to be difficult for them to stimulate growth in this environment. Behind all of that, you got this profit slowing growth in china which is a Major Trading partner for europe. Oil prices have not helped europe as helped europe either. Guy yogesh dewan is going to stay with us. We are going to take a closer look at the stock and potential movers in todays trading. Guy 7 53 in london and we are minutes away from the organ open. John cryan is a spot from the market open. John cryan is about to be in focus. There is a markets magazine story suggesting they are having an internal discussion at deutsche about the possibility of a thomas bank merger unsourced and to a certain extent reasonably speculative. The fact that maybe this discussion has taken place tells you how extreme the situation is starting to become. Maybe the kind of solutions that john cryan has been looking at in the german Banking Sector. To deputy ceos two w ceos coming in. The top line is a bit of a mess. 888 another stock, the boating business. Pretty confident but heading for your numbers. Yogi, talk to me about what john cryan is going to do. Due to bad to make a good . Beds make a good . Yogesh a lowinterest rate environment is not good for earnings going forward. The m a environment has not been as lucrative as they hoped. Trading volumes are much lighter. They are still recovering from uncertainty around the brexit. We touched on this earlier could i wonder how the average u. S. Investor is thinking about investing in europe at the moment . Why would they want to take the risk when they have a domestic economy that is doing reasonably well . To negative snow make a positive. Just because if something looks cheap doesnt mean this is a good time to go invest in the Banking System. Theres a massive amount of uncertainty in european banks. Guy youngest, think you very much indeed. The market open his next. Guy david good morning. You are watching on the move. We are moments away from the start of european trading. Here is your morning brief. Summer, apparently is over. The markets are coming back to life. Sell we due a september of . Ppi numbers out of europe this morning. And a disappearing act. Y 2. 5s bankers sa billion of bonuses have vanished. We will be hearing from the Deutsche Banks ceo, john cryan. We are 15 seconds away from the market open and we are expecting a mildly negative open. Lets run you through what we have got in terms of the market numbers. Expecting a mildly negative open. Dip a little bit of a coming through. The ftse, unchanged. And a similar story for the cac, and the dax as well. Lets show you what is happening with the stoxx 600. This is the imap. As you can see, in terms of where we are seeing underperformance, it looks like pretty much everything is in the red this morning, very few market outperforming. The nordics, bringing up the rear this morning. They are down more than most. Lets find out the details with caroline hyde. She will be anchoring bloomberg little bit later. Caroline what is opening right now . U. K. Treasuries. Basin hem down three we saw them down three basis points yesterday. The reversal option, they had to pay a price to get the bid to cover overall, guy. Therefore, we saw a rally in u. K. 10 year. 0. 5634 . Ching higher, lets have a look at how we are opening on the stoxx 600 in terms of the industry breakdown. Miners has seen the pain and metals are falling. Materials are up by 0. 5 . Energy and oil are playing into this. In the green, the people who have been losing their bonuses, the european bankers, but financials are up. 2 , not really making up for the significant the year. The financials are the performers this morning . Will that be led by commerzbank . A fascinating story coming out, according to merger magazine, we could be seeing overall in germany. Deutsche bank and commerzbank potentially with a merger. Not really telling us where they got their information from, but it is at a very early stage. Commerzbank is up 1. 5 . Still, could it be considered the Deutsche Bank will be restructuring the business and bolstering profitability by eyeing up commerzbank . This is the French Telecom and indeed, conglomerate. They are a Building Company as well. Ar up 1. 8 with first half revenue slightly slowing. Nevertheless, they stand by their outlook and have named two entity chief executive to help support the ceo. Lets have a little click on the next key player. This is number four. The french phone carrier is increasing first half earnings. Guy lets stay with france. A bid willeculation be launched to replace president francois hollande. We are at the middle of a conference near versailles in france. Over to you. By pierre. Am joined the business represents 700,000 french companies. Departurekels yesterday, was it bad news are good news for business . I would say it is good news. Macronbusiness. He comes from the business. He is a Truly International guy. He speaks perfect english. Are interesting assets for a political person. We would like this. Reporter are you disappointed with what the government has achieved in the last four years . I think it has moved in the right direction, in any case. To decrease the tax burden on the companys by 41 billion euros. Things are moving in the right direction. That is important for fronts. But we will have to go further and stronger, and quicker in those directions. I think, we are in the middle of the river. We have to go to the edge. Reporter is that mean you would like to go to a different edge in 2017, meaning a change of governments, a change of majority . I would like to see what the candidates can propose to the business community. First of all, i am sure we have to have people who understand the business. And we have to put in place the business friendly legislation, can have a global objective. That would be a stron