It is a slow day because of the cars, brazil, and be a way. Boe. Tom that meeting was supposed to end last evening so forget about that, live right now in brazil their federal senates meeting on the future of president rousseff. That is important. Is 20 hours and counting of live debate. Lets get straight to nejra cecic. President Dilma Rousseff may be within hours of leaving office. The majority of the senate has voted to remain voted in favor of impeachment. Willice president well rise to power. And friends, president francois faces as government difficult vote in parliament after a controversial label reform. He ran the proposal through the lower house of the parliament and says it will make it easier for employers to make jobs. Samesexay it worse marriage has gotten private partial approval in parliament in an alloy. Italy is one of the last countries in the eu to approve samesex unions. And you study says air pollution is rising in the poorest city and increasing health risks. Global air perp andhe pollution rose there is a higher risk of lung disease. The poorest are most at risk. Is considering Newt Gingrich to be his Vice President candidate. The republican nominee has been giving an input to gingrich. Global news 2400 24 hours a day powered by our more than 2400 journalists and 150 news bureaus around the world. Tom we are watching the brazilian rail this morning. A modest strengthening, futures up eight. Everything wrapped up with that bank of england announcement and Governor Carney. On to the next screen if we could. Curvemportantly flattening in the United States again through 100. One of our themes. To join us in a few minutes. Adam sieminski will join us here in the next hour. Francine that will be a really important conversation. You have brent crude above 46 a barrel. Global equity is falling towards a low. The european stocks were down, now they are up a touch. I still want to show you the banks. We have seen reversals, and for good measure to show you pounds because it is boe day. A to 10this just spread. Spread. 0th , were at 100 basis points have a down as we have seen recently, and very quickly, you have twos and you have tens. They both go down together, they both go up together, or you get this. This is really important in a dynamic. That is what the bond strategists are looking at. The bet is on a rising 10 year and a lowering twoyear. Was that confusing enough . Francine that was fine. Cannot talkme as we in the morning but we are on the same page. Tom it is cosmic. Francine it is telepathy. I looked flat i looked at a benchmark. What this means is they are already the worlds most expensive bonds. This is the japanese jgb. They seem to suggest that locals actually want more, so u. S. Yield premiums over japan which is the white line is widening. The bond action result is the blue line. Tom what it is critical is that it is not normalized. Very powerful. Francine it really goes to show what bojs troubles, or the impact of negative rates. Lets welcome Alexander Friedman joining us as a guest host. I am very excited to have you on. This was meant to be the year of diverging Monetary Policy and there are so many more risks because policy has not really botched because of the risks they see out there, be at politics, china, brexit. How do you the markets right now, more volatility to come . Alexander i think we are in a sideways volatile. A sideways volatile period. It is basically resting on the equivalent of a threelegged stool and the three legs are Monetary Policy, fiscal policy, and economics or growth. The Monetary Policy leg has been bolstered as we have seen through every tool imaginable. We have run out of tools. A be helicopter money but probably not. Fiscal, that we are seeing a big. Uestion mark on a lot of dysfunctional politics so people look back to Monetary Policy but there are not many tools left. What are we left with . A shaky leg of economics. Becomee the wobble can a recessionary environment or not . Or is it just going to be kind of sluggish, low growth . Alexander i would choose the latter for now. I have heard a lot of commentators say every seven to eight years there is a recession. That is a simplistic way to put it. 1994, it fitsbout into these time frames but you have to ask yourself what causes recessions, and i would say we are more in a sideways model that a recession but the political story could derail things. Lets say you and i go out to dinner and i say i will give you a ride home afterwards but theres a 20 chance the cars going to crash and leave you badly hurt. Would you take the ride . Francine probably not. Alex, you have such an esteemed record linking our political into investments. Is this a point where we just shut down until the election . I usually do not link politics and elections but what we witnessed in america the last week is extraordinary. Speaker ryan meeting with mr. Trump today. Is it a point with brexit were the system just shuts down until we get through november . Alexander that is the 64,000 question. Lets start with how Monetary Policy looks at it. Monetary policy is not shut down that is reactive to the fiscal or political side, and that is quite worrisome. You see it with carneys comments in england. He says until i know the outcome of the referendum, Monetary Policy has to remain accommodative. Does that question whether Central Banks are independent . I think it does. In the United States i think it is a bigger issue. The u. S. Central bank is reactive toward what is happening in brazil and china. Tom i have been dying to ask this question all morning. Mr. Friedman, is this a dead meeting for the bank of england . Is it a dead meeting and not a live meeting . Alexander what is a dead meeting . Tom i do not know. I do not know what a live meeting is. Come on, francine. What, they are going to hike or cut rates six weeks before the referendum . No, they are not. Most important thing ive heard today is whether it is unanimous or whether one of the voters actually decides to vote on cutting rates, because that gives a political message to brexit in six weeks. I think we have to take a step back and remind ourselves whether it is cutting rates or raising rates, how much are we talking about . The tiniest amount. Am, you have seen this for long time. It used to be raise rates 100 basis points are more hear it now we are looking at a quarter of a point. Points or more. Now we are looking at a quarter of a point. Tom Robert Hormats and Adam Sieminski coming up. On the future of opec, stay with us. Francine i am Francine Lacqua in london, tom keene is in new york. Lets get to the Bloomberg Business flash. Nejra nissan is handing a life sought a lifeline to mitsubishi motors. It has agreed to take a 34 mitsubishi, who a keep fuel theted to french bank retail unit plunged 32 and trading revenue also fell. It will sell stakes and about three dozen regional banks to simplify its structure and reinforce capital. Americas egg crisis is over. Isis have fallen 75 since august. The biggest bird flu ever prices have fallen 75 sensed august. That is the Bloomberg Business flash. I do love an egg in the morning. Francine may 2. Brazilian president Dilma Rousseff may be on her way out as the majority of senators vote in favor of impeachment. The debate is ongoing and we have live pictures coming in. It is quite heated and you can see the emotion. Why is the vote taking so long . Quitet we were not expecting was that each of the senators would take 15 minutes to talk to walk through their position of ahead of the vote, so that has added a lot of time on to the session. However, we have just heard we are expecting the attorney , andal to stand up next that will sort of begin to signal the end of the process. I think in the next hour or so we will have an actual vote. It does seem like the result is a foregone conclusion. Francine what do we know about the rest of the day . President rousseff will talk at some point. John we have heard from local media that she has cleared her desk supposedly. That is an indication of where she thinks this is going. She is due to address the nation at 10 00 a. M. So she could resign or val to keep on fighting vow to keep on fighting. Handed a document and farming her that she is suspended as president and at some quite in some point michelle timer will become acting president. Brazil, brazil is brasilia is 2700 miles from rio. I assume the brazilian people are engaged in this debate. What will be the response when she exits . Is it hundreds of thousands of people cheering in the street . Is it a lead in silence . John we do not really know. We had tear gas fired at process protesters last night at pro rousseff protesters last night. Of peoplemillions coming out in the street on that famous sunday, protesting corruption. Having said that, it does feel like there is a certain amount of exhaustion in brazil. This has been going on for a long time. I think there is also a sense among the brazilian people that it is time to move on. , and onecurrency chart of my great miss calls years ago. Rally,en line is the low lula rally. This is the brazilian people. Do you just assume with stability we get a stronger rail . John that is what a lot of investors have been saying but i do think your chart is very interesting. This may be a historic day in recent brazilian history. It may be the day the Workers Party, 11 or 12 years they have been in charge, comes to an end. Over the weekend i was reading a book on global inequality, and there is a fantastic chart when he see just how much and a quality has declined in brazil over the last decade. Along with all the corruption, a decline in inequality is an important thing to know when we k at the tom in our next hour with further perspective on brazil and saudi arabia, maybe we will even look at his tax return, Robert Hormats, the undersecretary for secretary clinton in the Obama Administration. A perfect day to speak with him. Francine welcome back. London,ncine lacqua in tom keene is in new york. Shares in germanys largest power producer are rising the most this month. They beat estimates. Strong earnings from trading countered power prices. Withe on the phone bernhard guenther. When you go through the numbers and look at your adjusted cost for 2016, does it imply a lost for the last six months of the year . Bernhard it does. We did not adjust our full guidance for the year upward but we confirmed it with one exception, except for net debt. You are right, this means for the rest of the year on an adjusted net income basis we are expecting a slight loss. Francine this is tough. You are in a tough business, it is tough for your company. We were speaking to your competitor e. On yesterday. What needs to get better . What kind of catalyst can you hope for . Bernhard the Old Development is driven by the collapse of commodities and power prices in continental europe. What it takes to get us to a better situation overall again, would be either higher power prices which are the most likely driven by higher commodity coal, like oil, gas, and likegulatory intervention capacity markets for conventional power generation, which we have already seen introduced in the u k and france but not yet in germany. Tom what do you need from angela merkel, what do you need to spurs the animal spirit of germany . You are in the heart of it. How do you read jumpstart the rean spirit how do you jumpstart the german spirit . We need a solution on the nuclear exit discussions around the externalization of the provisions for the nuclear looms over, which the share price. The discussions are still ongoing so it is too early to say what we will come out with. The more important aspect on a macro level is, as i said before, a reasonable market design for the German Electricity market. Conventional power plants, which are still needed and will be needed quite a while as a backup for renewable generation, which is wind and solar in germany and we know that it is not always available, these power plants cannot make a living anymore on the meager power prices we see. We need some clever market design as in other european countries. Guenther, thank you so much. Hour, oilin our next with another leg up. You wonder can brent make 50 a barrel. Adam sieminski is a detailed spreadsheet on Global Oil Supply and demand, on the future of saudi arabia, on the future of opec. Adam sieminski on supply and ondemand. Coming up as we look at a beautiful, truly warm new york city. Good morning. Tom good morning on a bank of england today and all of you in the. Francine lacqua and i am tom keene in new york. Here is nejra cehic. Nejra as bad as the terror attacks in brussels where, they could have been worse. Look and solid police work in the days before the attack lessened the impact. The investigation found disarray inside of the terror cells. 32 people died in the attack. The Obama Administration unveiled new rules aimed at methane gas from oil wells. According to people familiar with the matter it will require Energy Companies to do a better job of plugging leaks. It is 84 more powerful than Carbon Dioxide when it comes to warming the atmosphere. Donald trump will meet with speaker ryan today. Ryan is downplaying the breakthrough at the meeting saying that unifying the party around the likely nominee could be difficult. Global news, 24hours a day, powered by our 2400 journalists, in 150 news bureaus around the world. I am nejra cehic. Francine thank you. Lets get back to our guest host for the hour. It is alex friedman. I picked up something that he wrote earlier. It was well written and engaging. I picked it out as our morning mustread. Aresaid in this world there only two tragedies. You are quoting oscar wilde. He said one is not getting what one wants, the other is getting it. You said the fed is not only looking at domestic demands, but they have become the central banker to the world. Is that a mistake . Alex the fed has a dual mandate. One is full employment, the other is price stability or an inflation target. The fed has met both of those mandates. We have 5 unemployment in the United States and core cpi in the right target zone. Essentially, they should raise rates, but they are not. You have to be careful what you ask war, or as oscar wilde said, that you might get what you want. The factd not stomach that they could be on a 4 rate cycle. The fed has to look at the rest of the world. The question, is this an independent domestic body or not . Or do they have a different mandate, i would argue they do. Francine the Brazilian Senate debate of the more than 21 hours has started here theyre voting on whether to impeach president rousseff or not. It is ongoing. We will see a vote in the next couple of minutes. If you look at brazil, i know it is contained and a political risk, at the end of the day it is about economic this management. Economic mismanagement if the market is pricing a possible fed Interest Rate hike in june, what does it mean for the emerging market . Alex they have benefited from the dollar weakness. Down 6. 8 . That is because stories have been better, china etc. If we go to brazil, there are two dimensions. The expectations that there will be an impeachment and the Vice President will become president and the former head of the central bank will be the financial minister and we will see a trajectory for reform. If that does not happen, there is significant risk for the markets. We will find out today. Tom part of it is the diversions whether it is commodities in brazil or the transatlantic diversions between a bank of england today and the fed on june 15. No one looks at this better than Michael Mckee. Was all the rage three months ago . From oscar went wilde to Albert Einstein in the idea of holding 2 opposing views. At what is happening in the economy of the United States and great britain, you can see the economic surprise index from citigroup shows both are showing disappointing economic data. We are talking about the Federal Reserve raising Interest Rates and the possibility of the bank of england cutting Interest Rates. It is no wonder investors are having a tough time figuring out what to do. Thiswe will go to momentous announcement from brazil. Janet yellen has to worry about brazil at the end of the day . Just worry about everywhere, francine sorry to a draft. We have the final vote. 55 are in favor of impeaching president rousseff. She will not be going back to her office today. There has been a majority of brazilian senators saying they are backing impeachment. That vote has been placed. They needed a simple majority of 41. We have 55 senators saying they voted for the rousseff impeachment. This paves the way or Vice President mr. Temer to take power. We know that they have to bring toetter to madame rousseff inform her, and she will give a fact later. How do you manage to brazilian had he managed the brazilian economy . You need economic reforms. That is what the market is believing, that the next person botch it more than president rousseff. Alex the issue is that brazil has a deep economic recession and you cannot turn the dial quickly. It is around 17 that the central bank will have room to cut rates given that we should see an improving overall story. The most important step has been taken. Withinat is interesting roselle and something we have studied, Brendan Greeley is very good on this and john freire, is that this Vice President is more of the same. It