Unveils the conservative Party Election platform this morning. Should businesses be perturbed by some of her policies . This is bloomberg surveillance. Im mark barton in london. Check out what is happening to equities. Yesterday we saw the biggest drop on the stoxx 600 since september. Today the decline continues. Biggest twoday drop since november. We are down of further 0. 5 . Index is rising today. The first day of gains and seven after falling to a november low yesterday. The u. S. 10year yield unchanged at 2. 2 , dropping 10 basis points on wednesday to 2. 3 , the lowest since april 19. Ing. Is fall there is less of a flight to safety haven assets today. Its biggest gain yesterday since june 24. Lets get to first word news. Starting with the u. K. , Prime Minister theresa mays conservatives are expected to unveil their Party Manifesto today ahead of the u. K. s general election which takes place in three weeks. May will tell wealthier, elderly voters they will have to pay for promisen care and further controls at immigration by doubling the levy charge to businesses for hiring migrant workers. Meanwhile, launching the liberal democrat manifesto, the party le ader place to give the british people a second referendum after any brexit deal had been finalized. It is obvious when you think about it. Someone is going to have the final say over the final brexit deal. It could be the politicians or could be the people. I believe it must be the people. To japan where the economy expanded for a fifth straight quarter, its longest run of growth in a decade. Gdp increased at 2. 2 ending march 31, well ahead of the 1. 7 estimate. There is concern that spending may falter again with stronger wage gains needed to support households and allow retailers to raise prices. Brazil has plunged back into political crisis following reports that president temer was involved in a coverup scheme with a jailed former speaker of the lower house of congress. A newspaper has reported that a tape has been submitted to the Supreme Court of a secret approving a temer payment to the mastermind behind last years impeachment of former president dilma roussef. The president ial press Office Issued a statement denying the allegation. Ussia announcement to support the ninemonth extension of the output curbs is not seen as a game changer. But, speaking exclusively to bloomberg, former bp ceo john brown says he is optimistic about opecs ability to stabilize the market. Mr. Brown i think opec is still alive and well. Has been written many times but it is alive and well and it as tried to manage the market. And give the markets some stability. It can do it if its on the margin adjustments. But this is much more than the margin. News 24 hours a day powered by more than 2600 journalists and analysts in 120 countries. This is bloomberg. Volatility surging of stock markets declining. The white house trying to get a handle on this latest scandal. The u. S. Justice department has appointed Robert Mueller to oversee the investigation into russias alleged meddling into the 2016 election. As one of possible collusion by Trump Campaign associates. The s p 500 plunging by the most in 8 months. Asian and european markets following the down dirt the downward trend overnight. Lets get to stephanie baker. And were joined by the cohead of fx and rate strategy as ubs. These studyo concerns about the handling of the russian probe, the appointment of Robert Miller . Restores a measure of calm and stability in washington which had been gripped by a deepening crisis by revolution after revelation. Revelation after methylation. Revelation after revelation. Ller, 12 years under both george w. Bush as well as extended his term, president obama extended his term. E depoliticize is the process, the investigation. Mark he is not going to be daunted by the white house . No. Hanie this is both good and bad for the white house. I think it is good for the white house because he is considered a credible figure, a low profile figure. Someone who is unlikely to leak, but very thorough. So, this will bring the investigation out of the public eye bit. A bit. It is bad news for President Trump because he was this to be over very quickly but it is likely to drag on. Mark does it give the white house some scope to finally get back to the day job, to get back to pursuing the agenda . Stephanie yes. Because it takes it out of the public eye. Senatese, we have the and house intelligence committees continuing their investigation but, for instance, fbi director,ed was due to come back and testify. Not sure if that is going to happen, testify in front of the senate. He will be doing this investigation more behind the scenes, and that will allow trump to try to get back on message and pursue his legislative agenda, which i think, you see republicans sighing relief that they can at least go back to their constituents and say, this is in the hands of a special prosecutor. He is a very respected figure. He is going to get to the bottom of it. Mark lets look at a few charts which are relevant for the markets participants. This is three charts. Bond volatility, stock volatility and fx volatility. Have we seen the last of multi lows in volatility because of big upswings and political risks, specifically in washington in recent days . I would say that definitely there is a measure of uncertainty but it is also a very cyclical asset. It tends to decline quite a bit when the cicle is the cycle is improving. We have had a cyclical upswing. So the main question becomes, will the recent turmoil translate into some kind of into most of the confidence measures of the economy. We will have some readings and the next few weeks but what matters most, where this continues or normalizes is in the face of the cycle and how these developments. M apply. Mark how does it playoff into the fed and the june meeting . 8673. In june from hike a week ago above 80 have come down to 62 . The probability of september has come down. Later in the year as well. Is this just a blip or is june looking most likely . There are two issues. The first one is the data. There should be a hike, which is what we are forecasting. The second we mention is what has been the best driver, predictor of fed shifts has been financial conditions. The fed takes advantage of easy financial conditions and hikes, equally for what financial conditions they cannot hike. What the market has done is if gthe sell of conditions, it may bring the fed and the more difficult position. And if the market stabilizes, it should me no issue with the fed hike. Mark im bombarding you with charts. This is the 10year. 659a. That is the trend that we have been in since november 2. 2 to 2. 6. Look at the headline, dropped below 2. 3. Suggest that 2 to be on the way. Do you agree . Only if there is a big question around the fiscal policy reform and the fiscal boost. President ay after trump was elected we put out a piece that we actually said that something of, 270 is a reasonable rate for the 10year with a reasonable assumption on fiscal stimulus. , you have to have a high probability that the fiscal economy mark thanks a lot. Stephanie baker, a Global Business reporter. Stay with surveillance. The streets after allegations of a coverup. We will have the latest on the countrys fresh scandal. Japans economy enjoys its longest streak of growth in more than a decade. How long can it last . This is bloomberg. Mark lets get to the Bloomberg Business flash. Nejra burberry has reported earnings that surpass estimates amid cost costs and improving trends in china. Cuts. D cost the incoming ceo will be seeking to grab a higher end of the market when he starts in july. Merck says profit will be little changed after faster than expected u. S. Approval for a new cancer drug. Earningspershare will be between 6. 15 euro. Hargreaves lansdown reported assets rose 10 to 77 billion pounds. The u. K. Asset manager also said chairman mike evans plans to step down once a successor is identified. On tuesday 8. 5 after vanguard said it would start a u. K. Online service. Been so, brazil has plunged back into political crisis after reports that michel temer was involved in a coverup scheme with the jailed speaker of the lower house of congress. Derail thes this reforms that temer is eagerly trying to push through . Justin well, it certainly threatens them, mark, because the market has been very favorable towards temer, seeing him as the man u has been driving this effort to push through the i Pension Reforms tot considered so important get the country fiscal house in order. Athis is the first stage of something that can turn very ugly but it is early days. What youre likely to see is when the markets open in brazil, a little bit of a selloff. Perhaps that is putting it to lightly but you will certainly feel a pullback on asset prices when the market opens hearing this could derail the pension process. Mark the view of investors in the last year since temer took over from roussef during the impeachment proceedings has been a thumbs up. Im looking at my the real rallying against all g10 currencies. Is that right, the perception of what he is achieving is deemed to be on the Positive Side . Justin thats right. Dont forget. Real was one of the best performers if not the best performer in emerging markets last year. Its also up this year. You have got a double benefit, if youre bought into the bristling stock market and the yields have fallen on bond substantially since temer has been at the reins. So, yes, this puts that at risk. And the markets do like him. Orthe street level, orton brazilians do not favor him quite so strongly because he is the man for austerity. Needs these reforms if youre looking at the hard data, the numbers. That is what the market is looking for. It is not all about temer. The emergingdden market confidence way very strong. Yes, he is essential part of that. Mark thanks a lot. Our managing editor for global emerging markets. Till others is our guest from still with us is our guest from ubs. G10st all of those currencies. All of them have fallen against the real. Even a big selloff today that could be 6 against the dollar. Thermos typically these events bring volatility but what i would caution is what underpins the real is not just the local political situation. You have a number of factors. First off, you have a cyclical rebound in the economy, which investors are trading. Have a broader wave towards emerging markets that has been triggered by stronger growth out of china. And pretty stable in the grand scheme of things in the u. S. , which is a very big driver for emerging market investment. And last but not least, the brazilian real is unique in the kind of kerry intends to offer. Speaking, beyond the shortterm volatility, it takes a lot of global push to make investors go against such big carries. Mark the upswing we have seen in emergingmarket assets since trumps election has been quite start. This is a charge showing the msci, emerging markets currency index is the white line. And the blue line measures equities. Is essentially where we started in november. We came down initially. Then, since then, youve seen a big rally of both asset classes. Volatility is the lower chart. That has come down. Does the emerging markets rally have legs . Thermos emergingmarket investors are favored emerging markets over the last few months. What i would say is to make your point Even Stronger is that the rally in emerging markets have happened despite the trump election victory bringing some concerns about trade and bringing u. S. Yields. Onethe reason for that, as of my colleagues has written, is that one of the least acknowledge factors is global reflation trade. Not getting as much attention as it deserves. And for commodity producing markets, this is a direct positive. That continues Going Forward or not depends on the pace of tightening in china. Strongereen a slightly base of tightening out of china that but we have also seen better growth performance. Since the beginning of the year, our forecast have been slightly revised to the upside. Nothing catastrophic there yet. Mark thank you very much. He stays with us. Up next, exports lead to the best growth japan has seen in a decade. Economists warn it may not last. We will discuss it. Thats next. This is bloomberg. Mark japans economy extending or expanding for the fifth straight quarter, its longest run of growth and a ticket. A competitive currency credited for the gains. Stronger wage gains may be needed to support households to allow retailers to raise prices. Our guest with us from ubs. There it is. Remember, 2006 . Those were the days 10 years ago. We have not seen such a run of gains since then. Is it sustainable, or not . There are elements in this that are showing that even on the domestic front, japan is doing quite a bit thabetter. If you look at labor markets, if you look at minute parts of the economy, there is evidence of a broadening recovery and strength. Part of the reason the uptick here has also been the fact that they had been benefiting a lot and disproportionally visavis the china recovery. If the cycle continues, given the domestic trends in japan, it should be a positive catalyst . Mark this is the dollaryen. Whats more likely 120 or 100 . He said it would be better if you put the 10year yield on there as well. I did that. There you go, the blue line. The white line they move quite closely together. Basically anchored their policy in terms of targeting a certain yield. This means you give up basically but you have a lot of volatility in your currency be delivered by what the u. S. Does. The dollar size of things. Which means that what the dollaryen has done has been reflection of what the 10year treasury will be doing. In normal circumstances, and assuming that were not going to get a huge political backlash in the u. S. , you are probably at the lower end of the range. So, more likely than not, things will stabilize slightly higher from here. But not a huge amount of movement in either direction they change their policy. Mark thanks for joining us. Wage growth in the u. K. Turns negative. Hows the Retail Sector holding up . We will bring in the latest the data as it breaks. This is bloomberg. Ive spent my life planting a sizesix, nonslip shoe into that door. On this side, i want my customers to relax and enjoy themselves. But these days its phones before forks. They want wifi out here. But behind that door, i need a private connection for my business. Wifi pro from comcast business. Public wifi for your customers. Private wifi for your business. Strong and secure. Good for a door. And a network. Comcast business. Built for security. Built for business. The shlike a bald penguin. How do i look . [ laughing ] show me the Billboard Music awards. Show me top artist. Show me the top hot 100 artist. They give awards for being hot and 100 years old . Well take 2 [ laughing ] xfinity x1 gives you exclusive access to the best of the Billboard Music awards just by using your voice. The Billboard Music awards. Sunday, may 21st eight seven central only on abc. Mark lets get to the Deutsche Bank taking place right now. The chairman is speaking. Hes been making some interesting comments. Hes the Supervisory Board chairman. He said some former members of the Management Board will pay for past bank failures. The board expects in the coming months there will be an arrangement that ensures the individuals involved make is a substantial contribution. He says the Supervisory Board has been Holding Discussions about whether personal or collective responsibility for minced out at for misconduct is borne by management. No definitive conclusion has been reached yet. We will continue to dipped and it out of that Deutsche Bank now. Ng taking place right closer to home, we are getting data across the bloomberg terminal. Gaining morehere than expected, and april. Nice weather prompting britons to splurge. The volume sold in stores and , after acrease 2. 3 drop in march. Economist expected a 1. 1 gain. Suggest that spending, which has been mainstay of growth, is holding up in the face of rapidly increasing food and fuel costs. Retail sales have declined for the First Quarter in the three months through much. Through march. We saw inflation rising and we saw a real pay falling for the first time in two years. Lots of factors at play here but april, ates in least, rising more than expected. Lets get to the first word news. Nejra start with the u. K. Areesa mays conservatives expected to unveil their Party Manifesto today ahead of the u. K. s election that takes place in three weeks. May will tell wealthier, elderly voters they will have to pay for their own care and promise further controls on immigration by doubling the levy charged to businesses for hiring migrant workers. The economy expanded for a fifth straight quarter, its longest run of growth in a decade thanks to continued strike in exports. Well ahead of2. 2 the estimates. However, there is concern that spending may falter again with stronger wage gains needed to support households and allow retailers to raise prices. Plunged back into political crisis following reports that president michel temer was involved in a coverup scheme with a jailed former speaker of the lower house of congress. A newspaper has reported that a tape has been submitted to the Supreme Court of a secret recording of te mer approving a payment to the mastermind behind last years impeachment of former president dilma roussef. The press office has issued a statement denying the allegations. Global news 20 for hours a day powered by 2600 journalists and analysts in 120 countries. This is bloomberg. Mark exactly three weeks to go until the u. K. Election here. Lets focus on the country. Our guest is the european rate strategist at j. P. Morgan. Interesting retail sales data, given what we heard this week. Retail Sales Beat Estimates in the last month following a big decline. It has been quite a week, with inflation rising to its highest since 2013. What can we take away from these pieces of data . You just said it. The data has been all over the place. What we need to do is look at the big picture an