Parliament holds its final vote on Prime Minister mays legislative program. This is bloomberg surveillance. S happenay. Theyre rising for the first day in three. Investors shrugging off the prospect earlier of the prospect of higher Interest Rates. Stocks have inched lower in the last few minutes. The euro continuing its upward movement against the dollar. Draghi bolstering bets that the ecb is preparing to unwind. Sterling gaining for a sevenday. Best run since april 2015. Mark carney says the Monetary Policy committee may need to begin removing stimulus. Crude oil gaining for a sixday. U. S. Crude production easing pressure on opec led efforts to drain this global glut of oil. Lets get to the first word news. Banks haven announced larger than expected payouts for investors. Jpmorgan, citigroup and bank of america led the way and unveiling plans to boost stimulus and stock buybacks. It is the first time every lender has cleared the regulatory hurdle. Shares across the industry the trump travel ban will come into effect at 8 p. M. Eastern time. The restrictions will apply to refugees and migrants from six countries. The department of Homeland Security is imposing new demands for increased Airport Security on flights from other countries in an attempt to combat the threat of terrorists hiding bombs and laptops. South koreas new leader is due to meet President Donald Trump for the first time today. Their different approaches to wa with white house likely to press south korea on imbalances and cars and steel. The European Union is waiting on its demand that judges protect the rights of e. U. Citizens in the u. K. That will put the onus back on britain to increase the level of protection, which the eu. U. Sas is below existing rights theresa may will face a further test for minority government ahead of the final vote of the queens speech. As the labour opposition tables and amendment pushing for the rich to pay more tax and for britains key membership of they e. U. Customs union. Fulll ballot on the legislative program scheduled for later in the day. Global news powered by 2700 journalists and analysts in 106 countries, this is bloomberg. Mark the cost of borrowing is headed higher and markets had better get used to it. That is the message from the World Central Bank figures. Bank of England Governor Mark carney suggested the time is nearing for a rate increase. Canada indicating the same earlier this week. Janet yellen said her policy tightening is on track and even the possibility of an ecb hike has slowly grown. The euro strengthening against the dollar after mario draghi bolstered bets the ecb is preparing to unwind stimulus. Ian, thanks for joining us today. Is it a coincidence that draghi all turned hawkish in the space of 24 hours . Ian i am not sure that the banks compared notes before and. Before hand. It is suspicious we are getting similar noises, but im not expecting the bank of england to go hiking anytime soon. We will not see a drastic change in the ecb, but they do have to recognize things have changed. After all, the european economy has been way stronger than anybody expected. Big inflationany issues but we do have a stronger infirmary economy. So, that does require some recalibration. Mark but it proves the move and markets, especially on tuesday, that its going to be a difficult process recalibrating that. Ian what we dont have is the broad pick of core inflation which draghi wanted. In the u. K. ,. We do not have upward pressure on wages we dont have a second round affects. Enviat and five, ronment, the u. K. Economy unlike the eurozone is not strengthening. Its more likely to weaken. There are nuances everywhere. Mark carney, not being an unreliable boyfriend. I was throwing it out yesterday with a 2014, he was labeled an unreliable boyfriend. Is than an unfair is that an unfair lablel . Ian he has a split committee to start with. Own. E held in his chief economist called about in the opposite direction. He has to recognize that the labor market is tighter. He has directed nice inflation has been higher than expected but there is no forward pressure to keep it high up. So, hes got an uncertain Business Environment with brexit coming up. He is managing an economy and a committee. Him. D of feel sorry for mark some have tried to dig up the august can almost see the case for reversing the quarterpoint easing. At that time they were worried about the wky fal the sky falling. You can justify taking that 25 back out again but to go any further with the crazy. Id be surprised if they move in august but it is no longer a 991 shot against. Mark the odds have gone from 7 to 50 . Ian it is not long ago that markets were talking about 2019 for the first hike. I think that reflects the inflation picture has been significantly worse at the hea dline level that the bank of england expected. I cant see the wage markets saying, where is the u. K. Wage growth is accelerating. Mark yellen has been surpassed by carney. Theres a narrative and there is a less hawkish narrative than the fed is peddling. You say that is wrong. You say listen to the fed. Ian they are not kidding. They have hiked in december and june. They established a pattern. 4. 3 . T promise its dropping fast. We had a period of softness and some of the data which im convinced might in the three payroll reports between now and september fomc, when the market thinks they will not do anything, we could see a real swing and sentiment. Mark at the end of your notes he said the unwinding may prove painful and is likely to start very soon. Is that the Market Reaction . Did we get a taste of it this week . It was by draghi. It was by the other guy. Are we getting a taste of it . Ian absolutely. Mark sentiment has become externally finetune. When you see a shift in the data, you can see positions swinging very quickly. The market right now is looking feda 50 50 chance of the raising rates and after that they are done. If markets begin to get a sniff of the idea that maybe the fed is serious about this and the data are moving back to support that action, youd have to unwind and expectation wishes the long way short of what the fed is promising. I think it is going to be a very long and hot and volatile summer. Mark stay tuned to bloomberg. Weve got an exclusive interview with mark carney 11 30. Do not miss it. Stick with surveillance. Plenty coming up, including labour seeking to exploit the tory division of brexit in another test for Prime Minister may. We look ahead to todays crucial. Clean speech vote why u. S. Letters of announced windfalls for shareholders. This is bloomberg. Mark lets get the Bloomberg Business flash. The u. K. Has opened up an investigation into pricewaterhousecooper. Review will cover fiscal year ending march 2015 through 2017 and is designed to investigate and sanctioned requirements. Rupert murdoch should find out today whether his own 11. 7 pound bid for buy skye is likely to go ahead. It comes six years after a previous attempted the u. K. Culture secretary is expected to Tell Parliament what she intends to do about the takeover. H m says it will be to markdown clothing prices after a 2017 surge in inventory as firsthalf sales missed expectations. Pretax profit rose to 7. 71 swedish krona. The company says it plans markdowns with the aim of giving the autumn season the best possible start. Mark Prime Minister theresa may will face of further testify minority ministration as labour seeks to introduce elements of its own manifesto. Pushing for britain to keep the benefits of the e. U. Single market and Customs Union but falling short of calling to retain membership of both. The amendment comes ahead of the final vote of mays queen speech scheduled for later in the day. Cant speak today, is with us as well. Simon, thanks for joining us. She has overcome one hurdle. Will she overcome more as well . Smimon she has a suspected working majority of 13 with the dup. That should be enough to squeeze her through. Mark there has been not a rebuilding within the ranks but signaling seemingly a difference of opinion whether it is the transition period or expected pay rises. Simon the government forced to say that nothing had changed regarding public pay. One of the indications of the election result is increased irritation that the pay cut the Public Service workers faced for some years and might spill over into the broader economy. Some suggest the private sector pay is related to Public Sector pay. There are some irritation there. Yes, on brexit, met with secretary hammond on monday and tuesday. The long transition and david davis, the brexit secretary, suggesting otherwise. It all suggest that theresa mays iron grip which as recently as april was imposed on all areas of government has loosened in the wake of the election. Mark we know some member of the tory party think that austerity play a big part of the election result. What does that mean for austerity Going Forward . Simon less of it. Theres a weariness in the country after seven years of this. It is selfdefeating. I its not the only part of the story but i think it is significant. People were promised another five years. Given 12 years of austerity. And they think there is a general feeling that enough is enough. And mays authority has diminished enormously on this front. The voices within the conservative party have become on easy about austerity and are willing to push harder to change things. Mark is the narrative being driven by the labour party . Who wouldve said this even six months ago let alone a year ago. Is labour driving the narrative now . Simon the new look conservative party is still driving the need for theresa may to keep alive previouslyshe pushed aside the rise of the soft brexit fans in her own ranks. Labour has momentum behind them. Jeremy corbyn has been transformed from a figure that people rolled their eyes, to actually he has a bit of a hand. Labour, signs that the party has some strength it did not previously. Mark does jeremy corbyn, ian, have Prime Ministerial credentials economically, or not . Ian it depends. From a micro perspective, a lot of thing he was suggesting are just normal and excessive. Publicly owned railways and utilities. In europe, everybody says, what is the big deal . In the u. K. , it is presented as radicalism which are probably isnt. Right now is not the question. He is the guy with momentum. He came second. But the momentum is with them. The tories are deeply fractured. Who knows . Or 18 months we could be going to an election where he could become Prime Minister. Mark in regards to the European Court of justice, are we getting a mini climbdown from the e. U. . Simon the question is if they will get that the on brexit. Bloomberg reporting yesterday that the signs of the e. U. Going to give ground on that. Their original demands is that e. U. Must have some role in policing beyond brexit. The british of said that is a red line. Russell said they might be open to a compromise, one, being david davis they have a new body, a new arbitration body set up. Yes, some welcome ground being given by the e. U. Mark thanks a lot. Simon kennedy. And Ian Shepherdson stays with us. Post financial crisis first as every u. S. Bank passes the stress test. How shareholders are set to benefit. This is bloomberg. Mark you are watching bloomberg surveillance. Americas big banks announce a larger than expected payouts to investors in the wake of the feds annual stress test. The first time every lender has cleared the regulatory hurdle since the 2008 financial crisis. Shares rallying in late trading. Lets get more with our managing editor. Milestone . Assive i think it is. The First Time Since 2008. It really sort of december 5 the u. S. Rent modod music the banks face compared to european banks. European banks are on course to embrace 27 billion to replenish capital to show how far behind they are to their u. S. Peers. Mark are they credible . Every time we have a stress tests results, you get that question, given that everyone past. Wells fargo was in doubt. Are they deemed credible . I think so. Obviously, the Economic Conditions are different from what we are having in europe. It wasnt a huge surprise but what it is leading to his massive payouts now with some bansk on average paying in the order of 100 of earnings back to shareholders which is mark compare u. S. Banks to european banks with regards to Capital Safety stress tests. Right. You have got the european banks are still raising capital, bolstering their books. Economicgot yo conditions you have got brexit that will feature in the stress tests here. You have got frothiness in the credit consumer market. The bank of a limit question higher offers in relation to that. In europe we have got the italian banks that are still cleaning out in a burden with hundreds of billions of bad loans. And spain is also still finishing up the cleanup that resulted from the bust in the real estate market. So, you have got a lot of cleaning up to be happening in europe. Mark are we closer to getting to where the u. S. Is with the european Banking Industry . Ian in the long haul. The mechanism to do it isnt there the turnaround in u. S. Banks is absolutely remarkable from the wreckage of 2008 to today where you could argue that some of the bigger banks are over capitalized. The bigger payouts are more than overdue. Mark does that mean a lighter touch Regulatory Environment in the u. S. . These stress test results. I know the change in personnel on the fed might be the more business friendly rather than regulatory hardened approach. It appears that way. The regulatory tailwind as opposed to headwind, which im not sure the europeans are seeing this poinside of the pon. Potentially more activities. Banks have not been engaging in it heavily, which tend to be the more profitable business. Theyve sort of had been holding back on, because of the greater capital demands. Mark thanks for joining us today. Right. Up next, how should the world deal with north korea . Well focus on the agenda ahead of the white house meeting later today. This is bloomberg. Mark you are watching bloomberg surveillance. Lets get the bloomberg first word news. Estian americans big banks have announced a larger than expected payout in the wake of stress tests. Jpmorgan and bank of america boost dividends. The first time every lender has cleared the regulatory hurdle says the reviews began in the wake of the 2008 financial crisis. Shares rally in late trading. Thet rump travel ban will the trump travel ban will come into effect at 8 p. M. Eastern time. The researchers will apply to refugees and migrants from six countries. The department of Homeland Security is imposing new demands for increased Airport Security on flights to america from other countries in an attempt to combat the threat of terrorist hiding bombs and laptops. The European Union is willing to give ground on its demand that is judges protect the future rights of e. U. Citizens in the u. K. Officials,o they could settle for an alternative to the original position that the European Court of justice must be the ultimate arbiter. That will put the onus back on britain to increase its level of protection. Facehile, theresa may will a further test of her minority government today ahead of the final vote of the queens speech. Labour opposition tables and amendment pushing for the richard to pay more tax and for britain to keep the benefits but not membership of the e. U. Single market and Customs Union. The vote will take place with a ballot on the full legislative program scheduled for later in the day. Global news 24 hours a day, powered by 2700 journalists and analysts in 120 countries,. And this is bloomberg. Mark south koreas new leader moon jaein will bring a different view on north korea when he meets President Trump at the white house today. While americas longstanding ally prefers dialogue, trump faces pressure to get tough following the recent death of the 22 year old u. S. Student released from prison in the north. Lets get more with our bureau chief. Peter, what are the expectations of an agreement on how to deal with north korea . Peter well, the expectations here at least in south korea is not much. Not likely to be any substantial agreement mainly because both moon and trump are basically walking in seychelles. Both of them egg shells. They do not want to appear contentious. They want to give a good appearance of solidarity mainly because they do not want to play into the hands of north korea which has been trying to put a wedge between the two countries. So, i, the expectation is that the u. S. And south korea will least emphasize their agreement that north korea should stop developing a nuclear weapon. As to the details on how to stop them, that will go to another summit. Mark on the other focus of bes summit, will moon able to convince trump not to alter the bilateral trade agreement . Peter they have put in all stop effort to do so. Top has taken 52 of the executives of the major conglomerates here. Last night, they announced in pledged billion investments in the u. S. Moon will is that yes, to trump and say, there could be some updatings and modification but the trade agreement has benefited both countries. So, we should not look to make some big changes to the bilateral trade agreement. Mark thanks a lot. Thank you for joining us today. Lets bring in our next next, the global head of strategy at schroders. The other big event is the result of the stress tests. If it does lead to regulation that is lighter in touch and the u. S. , could that in danger the safety and the soundness of the u. S. System . No, im not sure that is the case. I think those stress tests were a great vote that u. S. Banks were in good health. I thought the recent mnuchin report was far more thoughtful. If you go through the entire 149 pages, it is very thoughtful. What i found b