Live from bloombergs european headquarter. I am francine lacqua. A conservative Party Leader Theresa may repairs for government. To name her brexit we speak to black rocks Rupert Harrison pit we have some breaking news. Lets get straight to markets and see what oil is doing as the ia putting up reports saying there is records of oil supplies while the u. S. Output slumps. We had some rejection raise for how much demand for oil will factor in for the second half of the year. This is brent, 47. 74. This is just the latest from the oil markets. Overall, i wanted to talk to you about stocks and pound. The pound set for the longest rally in two months as theresa may takes office. We are seeing something strange. The european stoxx 600 seen a little bit of volatility. The stock has lost the momentum that it had in asia. Lets get to the bloomberg first word news with nejra cehic. Their mark carney begin twoweek pilot there today policy meet later. And are expected to cut that is the First Time Since 2009 according to a majority of economists. 30 of the 54 people pulled predict a 25 basis point cut to 0. 25 . Japans chief cabinet secretary has denied a report that officials are considering introducing helicopter money. That comes after the newspaper said the policy is being mode and a boost to the economy. Mode in a boost to the economy. The currency would weaken if japan took such a step. Japans biggest bank is quitting its role as one of the 22 binary deals dealers 22 primary dealers. It is the First Financial institution to withdraw since the central Bank Introduction of negative Interest Rates this year caused yields to tumble below zero. Saysse premier leader beijing can achieve its growth target of 6. 5 through continuous reform and innovation. He was speaking at the eu China Business summit. Sownid chinese economy has shown great resistance great resilience. He says that china greatly reformation. Global news, 24 hours a day, powered by 2600 journalists in more than 120 countries. This is bloomberg. Francine by the end of the day, the u. K. Will have a new Prime Minister, theresa may. David cameron offers his resignation this afternoon. Theresa may has a new important post to fill in order to negotiate the uks divorce from the eu. A Brexit Department is to be created headed up by a brexits are. A brexit czar. Good morning, francine. One of the first appointment that she will make as the new Prime Minister to be, brexit czar. Michael gove, could she thats could he be considered damaged could he be considered damaged . Worse johnson, lacking professionalism as some people have said. Boris johnson, lacking professionalism as some people have said. Led to believe that somebody from the brexit camp will be preferred for that kind of position. Watch out for david davis as well. George osborne has said that he wants to play a role in the brexit talks. We will see what is future has. We should watch out for some women to step up to the top table or to increase their level of standing. Francine . Francine the other big appointment is going to be chancellor. How much do we know about who she may pick . Anna that of course will be a crucial appointment. We should appointment which should come fairly soon. He has held a big office of state. Chief bankersbig Association Just yesterday. He was going to be the chief secretary to the treasury in 2010 but things are not workout. She is energy manager, but she has been mentioned as a home secretary. George osborne is in the role right now. People consider him the continuity candidate come already even though theresa may has already distanced herself. Theresabanker mays Campaign Manager from the brexit camp. A leader of the house of commons right now. All of those names meant names being mentioned. Lets remember we are not going to see a group in a great deal of hurry to take this as desk to take this to the next stage. To take this to the next stage. Francine the Labour Party Still in disarray. Were seeing more people wanting to run. A exactly, we know that we are heading toward that competition to see who is going to lead the labour party. Labor leader corbyn found out late into the evening yesterday that he was going to be automatically able to be on the ballot. He doesnt need to get the sport of 51 of the labor leaders. They couldve been a challenge for him. This could be crucial. If we do see a cn early see an early election here. What would the labor party to d to managed francine . Francine think he so much, anna edwards. And will be with us throughout the day. Anna will be with us throughout the day. My guest this morning says the prospect for high Growth Stocks has not been damaged by brexit votes. , thank you so much for joining us. When you look at the big challenges ahead for theresa may, i guess she needs to study steady the ship. She needs to make it clear that we need access to the Single Market . Ark you are right studying the ship is the name of the game could lets see who she puts into the cabinet. I think she has been fairly clear she is not going to rush into anything. It is likely parliament will have to debate to repeal the act of 1972 before we can trigger article 50. It may be the end of next year it may be the end of the year into next year. Going to be clear who hurt brexit czar is is going to be leading the discussion. Brexitd probably be a eer. It has to be someone she has to trust. The keyson will be the triangle. Guess a lot saw i of animosity, especially for certain people in brussels that took it really at heart, that how much of this is diplomacy . Mark there is a great deal that is going to be diplomacy. Here it matters. Can theresa may start a dialogue with Angela Merkel your Angela Merkel . If merkel wants to set a tone that is positive about lets make something work, we are not good give britain anything they want i think the bureaucrats will get the tone and move forward. If they dont manage to generate a relationship, then i think something more difficult is going to be critical. Francine what will be the chancellors main role . Would that make the europeans mad . Mark we have a number of things that is going to be interesting. Mark carney is going to be critical here of the bank of england. He is provided the liquidity, stability. What theresa may said in a wasement earlier this week in terms of how she wants to set the agenda for economics, it was a much more inclusive strategy. I was thinking about promoting entrepreneur ship but it was trying to do it with Union Representatives on board. It was trying to be capping ceo pay. It was trying to think about a different type of conservatism. I suspect that is why you see a change at the chancellorship, simple because it is easy for a new person to come up with a new strategy. Idea that i think a steady hand Philip Hammond for example would do a sensible job. Hawkish in terms of finances, but the tone she set suggests that she is going to try for strategy or one nation strategy. In that regard, maybe not so much austerity. That is going to be key globally as we are looking at the markets. Slightly schizophrenic bond. Equity seems to be telling another. Francine that seems to be worldwide. Mark phelps, thank you for now. Pulse. Th the coming up, mass psychosis it so chriss psychosis. Worried. Should be the capability for a new premise osbornes george former chief of staff on what to expect. Brexit and the city. What will londons Financial Service sector look like after the u. K. Leaves the eu. This is bloomberg. Youre looking at live pictures of downing street. Whoever gets the job as brexit czar has probably to find that balance. Francine welcome back to the pulse. Lets get to the Bloomberg Business flash with nejra cehic. Nejra cutting output of the a3 80 in the face of dwindling orders for the worlds biggest passenger pain passenger plane. Only 193 delivered with wanted to 26 currently on its books with 126 currently on its books. Chain has agreed to a takeover. The deal comes after the third attempt by Steinhoff International to take control of the retailer. More than the Closing Price on june 13, before the shares surge on this speculation. Unicredit shares have risen. The italian lender is selling a 10 stake in poland bank. That is the Bloomberg Business flash. Francine. Francine mass psychosis is the. Iagnosis from jeff gulag buyers will feel the pain as the market finds the bottom and rates begin to rebound. That is what he warns. Theres something of a mass psychosis going on. The starvation for yields. Call me oldfashioned but i dont like investments were if youre right you do not make any money. Year as demand sags. Tumbled to lowes last month. Lets get more from mark phelps. Mark, he has a point, right echo right . Are we missed cut leading risks and if so, when will it be corrected . Mark the bond market is telling you a clerestory. There is little growth around the world and yields have been coming down to reflect the lack of growth and people are looking to for some looking for some degree of certainty. As jeffrey said, getting their money back is a priority. If you get a 50 year in switzerland goes negative, this is not normal. Theres something strange going on. There is a structure in the markets. There is a distortion in the market. When you look at the treasury, you look at 150 odds with 1. 5 return. For international investors, that doesnt look like such a bad thing compared to europe or japan. Francine if you look at all of ,he yield curves, negatives isnt that we also hate everything high we hit a record high for the s p 500. You have the crazy yields but then you have records for equities could what will correct first for equities. What will correct first . Mark we will see a combination of things. The equity market relative to bonds does look attractive. We are going to see more volatility, but you are going to see a market where the earning of four in the region against 150 on the bond yields good on that basis, equities give you better returns. The u. S. Economy is doing pretty well. Gdp growth not great. Unemployment at 5 . Wages in some sectors are picking up a little bit. There is not too much inflation up there. Jobs are rising wanted to 50,000 on a quarter by quarter basis. This feels ok. 150,000 on aising quarter by quarter basis. This feels ok. It is not the end of the world. Francine when . In the u. K. , sometimes i wonder. My concern is mark carney is keeping the ship going as it were. We may start to import inflation it when people realize that, then do Interest Rates go high very fast . Competition. Re the outlook does not look good. Mark you are absolutely right. Consumer demand is going to have an impact on the u. K. Mark carney is very sensible good what he will say to investors is we are going to see an inflationary pick up. I will look through that. It is a shortterm oneoff because of currently were going to look to that to try and make the problem work. I am going to be sensible and think about it, and you just have to listen to what i say. After that, we will see. The truth of it is no one quite flirtingyou go from with recession to something worse. Suggesting it are might but we dont quite know it sometimes the media has to play a role which is if we talk it down too much, it may become a self fulfilling prophecy. It is going to be a weaker economy. It has an impact on europe. U. S. Slightly less affected by that. U. S. Economy is doing fine. This is to 4000 question in europe is are just the 60 4000 question in europe is if we are moving from austerity . They should be a move from the bond market to saying maybe something else. Francine mark, thank you so much. Later on the pulse, as the ukip prepares for a new premise or, we ask George Osbornes former chief of staff if he expects theresa may to make a pick. This is bloomberg. Francine eu leaders have told a china that overcapacity is a serious problem for europe. The two are working to secure trade deals in beijing. It comes as the u. K. Prepares for life after brexit. How much has the issue of brexit overshadowed the talk . The european delegation told me that the brexit discussion did not change their agenda. It didnt change the list of topics they were bringing to discuss here in beijing. Of course it was something that the chinese and are concerned about and did want more clarity and we finished about an hour ago. President l jeanclaude uecker and donald tusk were pounded with questions about brexit. The chinese are concerned about stability in the largest Trading Market which is the European Union. It would take some relief from the fact that britain is moving closer. Today they are getting the new Prime Minister speeding things up. The chinese are believed about that. They want to see negotiations moving smoothly but they want to get clarity from the european colleagues on this. They want to make sure things are stable. That is what was being discussed. Also seen as a big ally for the chinese. Now his future is in doubt. And big question for china when they think about brexit. Francine. Francine tom, thank you so much. Lets get more from mark phelps. We look the various trade deals. The u. K. Was depending on china. Is china still it interested in investing in the u. K. . Mark the chinese will look at their self interest. I think youll see quite a lot of chinese buying property in london because there is very good value. The first month of this year, we panicked the last three months it has devalued more. China is clearly growing. Regard, they are going for us tortunities send this to them and for them to send goods to us. Francine mark, thank you so much for joining us. Mark phelps. Coming up, by the end of today, theresa may will be the uks Prime Minister. Well ask George Osbornes former chief of staff who she should have on a top team. This is bloomberg. The picture for pound rising for a second day but stocks overall a little bit jittery. Get ready for the rio Olympic Games by switching to xfinity x1. Show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Francine welcome to the pulse. In london i am francine lacqua. Lets get to the bloomberg first word news. Mark carney and his bank of england colleagues begin their today policy meeting ahead of a rate decision. They are expected to cut for the First Time Since 2009. According to a majority of the economist. They predict a 25 basis point cut to 2. 0 . Japans chief cabinet secretary has designed denied a report they are considering introducing helicopter money. Warnsief currency analyst that the endss credibility would be adversely affected and the currency weekend if japan took such a set. Japans lead bank is quitting its role as one of the primary it is the First Financial institution to withdraw since the Central Banks introduction of negative Interest Rates cause the yield to tumble below zero. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. I am nejra cehic. This is bloomberg. Francine markets a little bit shy this morning. Lets head to the bloomberg with mark barton. Mark Stocks Holding on to their gains by the smallest of margins, up by point 02 . The stoxx 600 has risen by 5. 6 . Onll 2. 8 below the close june 23. Have a look at the msci going back to the beginning of the year, recouping its post brexit losses on tuesday. 27 it was june sitting on a two day 7 drop and that is what happened from to there and we have rebounded, the index has rebounded since falling to a threeyear low in february. They have recouped all of their post brexit losses. The pound has not but is rising for a fourth day against the dollar, the longest winning stretch since may 19 this year. By all 31 ofrisen its major. And has rebounded from its 30 year low. Earlier on june 24 at rose as high as 1. 5018. Stirling is still down by 10. 6 against the dollar. Lets call this the cameron index since it is David Camerons last day as Prime Minister. We have gauged the performance of all of the u. K. Assets since he became Prime Minister in may 2010. , the u. K. Line sovereign bond index has risen 35 . Bonds are the bestperforming asset class. The light blue line is the ftse 100 which has risen roughly 25 . Sterling as fascinating because up until june the 23rd, at was flat. We know what happened june the 24th. Sterling is down in a matter of days by 11 . For most of camerons tenure sterling was flat against the dollar but because of brexit it is the underperforming asset. Francine i like that, mark. Mark barton. The uks new Prime Minister will need to make a decision on a new , the man or woman charged with unpacking the countrys eu membership. Im pleased to welcome Herbert Harrison who until recently was chief of staff to George Osborne and is now chief macro strategist at blackrock. I really want to ask you about who she should pick but lets focus on yields. Lets focus on what mr. Good ach callingdl psychosis. Rupert i think the stars have concluded people have a couple of things, the u. S. Economy is not going into recession, and the Central Banks will carry on