European banking and their struggles but a lot going on across the commodity space as well. I am stunned by the gloom among the pundits in the last few days. I honestly can say i have never seen it. Each of them has an interesting shade and color. We will have some optimistic push optimism to push against the gloom. Francine when you talk about gloom, i know in davos, any ceos were optimistic and there is a reshift. Lets get straight to the bloomberg first word news with vonnie quinn. Consumer prices in china keep rising although they are still below the governments target price. It is the Third Straight monthly increase. Food prices with a big reason. Investors want to know exactly what the and come and president does incoming president of the philippines will do. He was elected with 39 of the vote and campaigned on a platform of fighting crime. He has sustained Investor Confidence on an economy that grew an average of 6 a year in the last decade. North korea staged a massive parade. Kim jongun looked on at thousands of people marched across the main square in pyongyang. The number of officials linked to his fathers rule were hurt. Ministers wille come up with their greatest plan yet for greek debt relief. The plan calls for extra austerity measures for greece. Productions,budget they have said it is not possible. In the united kingdom, the trade will haves employees excessive working hours if they leave the union. Global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. Tom i do not want to get into brexit. I am seeing an inflammatory stuff from both sides. Vonnie just a few weeks left and have a campaigning. France in the to work 80 hours a week if brexit. She already work 80 hours a week. Currencies, commodities. Upures up 14, dow futures 115. There is a lot of interesting things going on in the Foreign Exchange commodities space. 43. 81, the dollar stronger. On to the next screen. The vix showing a priced to perfection market, 13. 94 and the yen or than anything pulling back. Right now up to weigh 109. Francine, a data board from zurich. Zuriche data board from. It is a lot of the banking stocks with Credit Suisse leaving the game. The yen is weakening, banks are gaining on the back of better than expected Credit Suisse figures. They still posted a loss but it was better than analysts had expected, a little bit of welcome news after the hard time they have had the last four months. Panic,is is sort of the not the panic but the worry that is out there for commodities. Lets go to iron ore in china. Here is this massive rebound. There is a little bit of a commodity top but you wonder in the last few days if it is over. Francine definitely contributing to a little really for. Tom iron or is the asian indicator of commodities. I have never seen so many intelligent reason notes that the world is coming to an end, from major activists like carl icahn, things are terrible. Doug cask was on yesterday and he is extremely net short. Neil dutta is net ohlone. E has been met baloney he is a begin of optimism. Take me all of the ledge right now, why are things not that bad . You have two very unusual futures right now at least in terms of Business Cycle dynamics. We are at full employment and typically when that happens the Housing Market is rolling over and fiscal policy is getting more tight. Contrast, this time around we are at full employment but the Housing Market is accelerating and residential investing has grown 10 to 15 for the last four five quarters. Fiscal policy is getting more accommodative so i find it interesting that youve had a lot of calls for more accommodative fiscal policy. You have had president ial candidates talking about significant infrastructure rebuilding. Ways. Ed in interesting i guess the real question is, do we need stronger fiscal policy to get u. S. Core inflation up to target . Probably not. Tam lets bring up the dut optimism index. This is the wage index that the pros use, and im sorry that redline is a massive improvement back to the nirvana of a previous generation. Vonnie, you are toooung to remember the glory in the early 2000s. Ises and adjusted inflation not too bad but the gloom grows says too Many Americans are not participating. Neil dont they always say that . Strongwth is not the enough, then the wages are not strong enough, and then they talk about income inequality. The fed is doing the best job it possibly can to combat income inequality. Tom should they lift in june . Neil no, but full employment is the most powerful tool to fight income inequality. Tom how can you say that with mr. Trump and mr. Sanders . Neil i think this is classic of the electorate, they top tech gloom and do. Tom lets bring in fancy makua. Francine lacqua. Lets get our umbrella out. Francine when you look at switzerland you like the umbrella . It is a Credit Suisse umbrella. Theyu look at switzerland, a strong frank, negative rates, and hearing you speak to neil, i am not sure what we are waiting for. You believe data is quite strong but the fed should not move in june. What is it waiting for, this global uncertainty or do you really want a significant Wage Inflation for them to actually increase rates . Neil i think the fed has begrudge them a moved into this role as being the backstop for the economy. You have to let the inflation in the u. S. Surge. I think the fed wants to let it run so strong that the yield curve ultimately stevens as they go into a move so inflation has to run higher to offset the. Nflation everywhere else i think that is what the Global Economy needs. It should not be a surprise to anyone. In have seen a relief rally emergingmarket currencies and equities and that is really what the fed is doing. I think this inflation target is symmetric and i think the fed is going to prove that as we go forward. I think Inflation Expectations go higher as the fed continues to pursue this policy of benign neglect. Tom neil dutta is far too optimistic for this show. We will continue this. Gold a little soggy and the last number of days. We will ask him about commodities and gold and his wonderful work on fundamentals. Jeffrey rosenberg from black rock join us, another perfect guests amid the punditry gloom. Stay with us. Tom good morning, everyone. From london, Francine Lacqua in zurich, switzerland. Easyjet,umpy skies for posting a first half loss. Attacks of terrorist and a uruguay capacity glut. Revenue receipts could drop 8 in the current quarter. The largest steel maker in germany is make is cutting its forecasts. The Company Posted firstquarter earnings down 20 from a year ago. Nokia came up short and its price Quarterly Report after combining with alcatel lucent. Heard by phone carrier spending less on wireless networks. That is our latest Bloomberg Business flash. Much. Ne thank you so we are not here for negative rates. We could be in zurich talking about that but we are here for Credit Suisse. The Second Biggest Bank in switzerland did a little bit better than expected although it did have a loss. Topoke for about 15 minutes the ceo and we talked about the fed and volatility and brexit. Concerned. Lways of course we spend a lot of time worrying about brexit and we have a brexit working group, and we will be ready whatever the outcome is. We have to prepare for it. There is still growth in our economy. I think europe is better than it was. I think the u. S. Is still growing. I think that the macro is ok. Of course a geopolitical risk a run oil, risk around oil, saudi arabia. Francine what is your plan b for brexit if it happens . We are not ready to discuss that publicly but we will cope. Francine after that warning in march, Credit Suisse was the worstperforming stock in europe but today scanning some 6 . Lets get straight to michael moore. Great to have you on the program. When i spoke to Tidjane Thiam he sounded very confident. He could not quite call the end of the sanguine market but he does feel a lot more comfortable. Is there anything that analysts should worry about in what we found out today . Michael i think the worry is that is going to be more of a slog. Hink they were protecting predicting confidence in their plan because they had to change the plan in march so i think they wanted to project that they are back on track, that it is just going to be more of the cutting story. Surprise better than a is what you got a couple of months ago. They arederstand spinning the span and they are doing a great job in zurich. Who will they end up merging with . Thatere a list of banks you guys talk about in london . Thiam said they will not be merging with Deutsche Bank when asked about that. The problem is, they are shrinking the Investment Bank. They are trying to build up and Wealth Management and they are having enough trouble getting their own ship in order. Do have a merger on top of that would certainly complicate things. They are more focused on showing some progress after a couple of missteps with their turnaround. Tom how are they linked to global and eu nominal gdp . Are they driven by the economy . When you look at the idea of 150,000,. Banks with 200,000 employees, we forget these are smaller and tutees smaller entities. How are they linked to the economy . Michael i think they are trying asiave to link more with and some of the emerging markets. They are trying to chase growth around the world. Asia is the business that is getting a lot of the capital coming out of these other trading businesses. They are obviously still tied to switzerland. I think they are trying to shift the geographic mix and capture some of that growth because europe, not much of a growth story at this point. Tom michael moore, thank you so much in london. , andon bloomberg the most interesting time in the markets, the gloom that is out there, the banking uncertainty to the june 15 meeting, Deutsche Bank on your need to participate in the equity markets. From zurich, london, and new york, bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance from new york. Francine lacqua in zurich, switzerland. Sweeties,of credit go Credit Suisse, go right, go left, and there is a wonderful bistro. Why is she in zurich . I do not get it. What is the mood . Francine what do you mean you do not get it . We came to speak to the ceo to see whether he is on track and for the first time, there is nothing to write home about that it is not as bad as it couldve been. Tom lets go to the morning wall street. Commodities the spike in early years microbubbles, the new word not a new trend toward dollar weakness or commodity strength, andr current credit monetary policies, the impact is contradictory and disinflationary, creating the risk that commodity price the kleins will impact asset prices commodity price declines what impact asset prices. Neil the Commodity Markets have repriced because global inflation has been priced out. Tom is it now stability within Commodity Prices for can foil drive lower . If you have real concerns about the Global Economy it will. Tom does it get us to a gdp run handle the u. S. Of a 2 or can we even be as optimistic 3 . 8 or three point neil i think generally speaking u. S. Growth is around 2 to two and a half percent. Francine the impact of china on the u. S. Is not as drastic as other forecasters are saying . Neil i do not think so. If you think about the dollar, that was a hot topic for the past year and a half. Despite the strength in the dollar, u. S. Core inflation accelerated last year so as the dollar core inflation in the u. S. Has room to move higher. Francine when will the fed hike . Neil above their target for a period of time. To the extent they will come back to target, they will let the next recession take care of that. I think september is a reasonable baseline. One of the things we are seeing is the idea of theory and hand. His orthodox phillips curve theory working . Or is it every economist for themselves . Neil the Unemployment Rate is down and rates are picking up. It seems the phillips curve is working. I agree it is flat but once you are at these low levels of unemployment, then the curve tom you are not concerned about a bimodal to americas . Matt king at citigroup has that ,reat chart showing the poor the waiters, the busboys are doing great and people like vonnie quinn are doing great. It is everybody else in the middle. Neil this has been a theme for quite some time. There was an article recently in the wall street journal talking about the significant increase in knowledge workers, for example. I think a lot of the, we are going to lose our jobs to robots and automation, this is the socalled lump of labor fallacy. You have productivity which increases labor to do other things. You i happen to agree with on the road barth frenzy. Robot frenzy. Neil labor power is picking up. Tom from mail data of Macro Economic research. In our next hour, ricky leavy. [ soft music ] e. T. Phone home. When you find something you love, you can never get enough of it. Change the way you experience tv with xfinity x1. Rancine this is surveillance european stocks rising, oil climbing to around 44 a barrel. Base metals clawing back some of the losses we saw yesterday. The yen sinking as we expect the boj to do more. I am in zurich as we spoke to Credit Suisse, a little bit better than expected. Driving Credit Suisse higher and pulling up some of the banking stocks. I am Francine Lacqua in zurich, tom keene in new york. Vonnie police say a knife attack at a german train station was probably politically motivated. The attacker killed one person and wounded three others. Police arrested a 27 euro german. Witness reports that attacker yelled god is great in arabic. Ofcanada, 90 of the city Fort Mcmurray survived the wildfire at about 2400 structures were destroyed. Fled and will not be allowed back until police two weeks. Lawmakers and brazil trying to impeach Dilma Rousseff are trying to get the process back on track. Chief of the Brazilian Senate says he will go ahead with hearings. Recess is charged with illegally using state ranks to plug a hole in the budget. The u. S. Could bail out puerto rico by july 1, according to the National Resource committee chairman. Debt. Ill restructure its islands Development Bank default did on 370 billion Million Dollars last week. A rainy and snowy winter has eased the states fiveyear drought. Global news 24 hours a day powered by 2400 journalists and more than 150 news bureaus around the world. Tom adam kohls joins us live from london. There is no other phrase, where is the dollar. Strong dollar or weak dollar in the coming quarters. I think range bound dollar. I would probably be a buyer around these levels but with no greater ambition than to playing it toward the top of the range. I think longterm trends are hard to find at the moment. One of the trends that has been established as if you take the bundled Courtesy Group of asia and japan, the adx why that at some point we will see within the currency war a depreciation of aged currencies, and within that asian currencies and within that a stronger dollar. I think it needs some dollar direction behind that to get it moving and in particular, i think it needs some direction from dollaryen. It may have made a shortterm bottom but to get some real momentum to drag the rest of asia along, it needs a broadly stronger dollar and i think that is becoming increasingly the story for next year. Chart,ere is the kuroda inc. Of a pan bank of japan first option in january. What they got was a stronger yen. It is hard to have a strong dollar with yen strength like that as well. Adam, the other idea is going back to europe, the battle for parity. What a consensus that is a weaker euro they have been confounded . Is this because of a real Interest Rate game or because of capital flows . I think capital flows and broad dollar ratios are the big story. There really is not a strong ration reason to be out wide outright negative on the euro. A gain, the Bigger Picture to get eurodollar lower it needs a broadly stronger dollar and the Market Pricing in a much more proactive fed. The hurdle for that seems to be high so i think we play eurodollar at a broad range. Sellers probably averted again with not much more ambition toward a move toward the bottom of the range. Francine given what you have just said, what happens to yen . The finance minister is saying, we cannot intervene. Governor kuroda has disappointed the markets and likes the surprise. Adam i do not think we are as close to intervention as the authorities would like to have us believe. The problem is, i think selling an intervention when the yen still on most measures undervalued will be very difficult unless they can make a case that the markets have become outright disorderly and need management from that perspective. I do not see an awful lot standing in the way of dollaryen possibly taking a stand to 100 or briefly through that level unless we can see the broad dollar digging it back up from here. Not i do not think is a longterm trend im ready to back at the moment. Francine you are saying they will not intervene . We spoke to a strategist this morning who was saying the problem with the japanese authorities is that they might look like the boy who always cried wolf without ever doing anything. Risk andhink that is a i think if anything, th