Markets. It is all about the fed, currency, and dollar. Dollar strengthening versus most of its peers. U. S. Treasuries repeating retreating. Stanley fisher will be speaking to us about two hours from now. That may provide clues on the timing of Interest Rate increases. Gainingsee the european. The volatility index at 12. 88. Lets get straight to bloomberg first word news with sebastian selleck. Sebastian the brazilian president has testified. She spoke about her torture and imprisonment during israels military dictatorship during brazils military dictatorship. If twol be removed thirds of Congress Finds her guilty. Apple is said to be facing a tax bill running into the billions of euros with an eu ruling as early as today. The European Commission is expected to say ireland provide them with illegal aid. Apple said it has nothing to add to previous statements rejecting previous statements. European Competition Commission is scheduled to hold a News Conference at 11 00 u. K. Time. Will bring you that here on bloomberg. German Foreign Policy , the u. K. Will have to pay into the eus budget. The missing britons aspects for lowcost emissions after the exit from eu. If someone once benefit from the European Union, they also have to conjugate to the coffers have to contribute to the coffers. [indiscernible] before the referendum, nobody talked about [indiscernible] sub just u. K. Jobseekers feeling the pressure of brexit. U. K. Jobseekers feeling the pressure of brexit. It says the average salary is down by 2. 4 from the end of july. Gene wilder has died at the age of 83. For hismembered by many lead role in willy wonka and the chocolate factory. Fills d classic classic films such as inference youngand such as frankenstein, blazing saddles. Global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. Francine forget september. That is the message from morgan stanley. Janet yellen says the case for increased rates have been strong. August payrolls present an obvious risk, we continue markets implies probability for a september rate hike will end at 0 not 100. James bevan. Thank you so much for joining us. What have we learned from the fed . Is clear from her remarks to gete sees more reason the u. S. The mystic economy to hike rates. James it is important to remain in the mode. I think we will have one hike this year. It will be after the u. S. President ial election. Maybe one hike next year. Hard if one looks at the scatter crosses that we will do anything much more substantial than that. Francine was she trying to repress the markets because there was a low probability of the markets being priced in . James she wanted to warn the markets that there will be a hike. However, she is a lowering expectations. Francine do you expect if we look at the end of 2017, where at the endng . James of 2017, no more than one percentage point. Francine a small hike . Point 25sis basis points this year and 25 basis points next year. Nothing more than that. Francine you think she is keeping the possibility of a september rate hike open depending on jobs . James what are the things we learned is never to give away all of your cards. A good central bank is those who said to the market i am going to be here to ensure there is an orderly market, that there is a sensible back draft of economic activity. I am not going to allow you to expect what is what happened well in advance. Francine do you think the markets are dictating to janet yellen what she is or is not doing . Markets toelling the get used to the idea of tighter policy, she is the mistreating that is in her mind. Francine what is the one thing you will be looking out for. We understand the outside risks. Despite exit sitting pretty normal. James i think the language is good to be critical. The way that ms. Yellen is interpreting the signals i think is the key consideration. Francine the dollar moving today but moving against their peers. How much is Janet Yellen James the dollar is doing a lot of tightening. We have the r b going down as a result of what is going on in china. We have the pound necessarily week because [indiscernible] therefore need to bring the money back in through the account. Europe, who would want to own the euro right now . More of a is much credible backdrop. Francine james, thank you so much for right now. He stays with us. Stay with bloomberg for more the fed in the oncoming jobs number. Today on surveillance will bring you a conversation with stanley fisher, at 6 30 a. M. In new york. This is bloomberg. Have 20. Ng up we we look at currencies, apple we have plenty. We look at currencies, apple. Google bring you that story next. The death of democracy. Brazils suspended president makes a plea two countries lawmakers. Eight months on and still of government as Prime Minister malloy Prime Minister rajoy this is bloomberg. Francine this is the pulse. Lets get to Bloomberg Business flash. Koreaian shares in south largest container line has been shifting and suspended from trading after pledging to the lowest level since 2009. That is after a News Agency Reports that a group it refused to provide loans. Koreas developing bank has said that hentgens Restructuring Plan it says it will do all he can for recovery. A Record Number of overseas investments were made of u. K. In the 2015 2016 financial year. Total projects funded by investment grows 11 . That figures making the countrys europes most popular external financiers. Away ayers has walked was rejected by the chocolate maitre chocolate maker. It sees no path toward an agreement. In june, her shes board unanimously rejected 107 per bid. Bed per share francine ireland provided ireland ireland provided apple with a legal aid. The decision could cost the iphone maker billions. Will spot well talk more with jones hayden. The reasoning here is it is unwanted tax. Irelands was too favorable. This has been going on for quite some time. We think the new commissioner will go hard on apple do you think the new commissioner will go hard on apple . Jones it seems that way. She has set herself up to go after these sweetheart deals. Not just ireland but other countries as well good apple is the Biggest Country that she is gone after as well. Apple is the Biggest Country that she is gone after it if you do the math, one of the tax deals that she is looking at so if you do the math on that, you could get 19 billion of the back taxes that could be due. We are heading that looks like she is going to focus on a 10 period. A 10 year we are looking at multibillion dollars of back taxes in the air. Francine run us through the timeline. It is the European Union. It usually takes time. What are we expecting from the commissioner . What happens next . Jones she will lay out her reasoning in the case. She will send it to apple and she will send it to ireland. Both apple and ireland have said they are going to appeal if the ruling goes against them. Apples ceo, tim cook says the note issue of taxes and and not tax paying enough tax, he has called a whole lot of crab crap. That will put it in the courts for years. It is hard to tell when we will get a resolution. Francine think you so much, jones hayden. Thank you so much, jones hayden. Lets get back to james bevan. When you look at apple, you like apple because it is undervalued. This could be huge because not only they have to pay up front 10 billion. Their tax arrangements in the future james the u. S. Authorities could have a long way to say about this. There are billions of dollars sitting offshore. The taxities say rules are, we tax what you tax because that is the Way Companies operate. There is a huge global issue as to what will happen if different Authorities Say we do business here, we want tax. ,tarbucks, all these players who are going to be finding a different route forward. Route,e a different that would be what . James it is hard to see why the u. S. Would agree. However, it is the case that europe was a level Playing Field within europe. The concept of the state aid bought into industries weve seen it in the banking segment when state aid led to a lot of figure wagging. I think that investors are going to be wary of marking down the asset price too far because we have some material news. Apple has a day of announcements. We are expecting a change of the watch and certainly the announcement of the apple seven. We have a cycle that will end up with revamped seven and eight within the next month. The fair value share price is 150 rather than 100. Francine is that how you would ask blame the fact that since we how you woulde explain the fact that since we have heard about the had we not if we had not expected this new announcement for september . James there is this issue of devaluation certainty versus uncertainty. What we know is the eu is going to you all was a lot more money. People will be saying at some point some of the money may be paid over. It may be distant. It is likely to end up in a compromise to deal. How does that compare with the fundamental cash flow generation. The full benefit of the cash flow that it is giving to its shareholders. Francine the sector as a whole . James i am hardly more bullish on amazon than apple. I think people who are in on telephone tax should be looking at samsung. When you look at the amount that samsung is spending on research as opposed to apple. I think samsung has every right. It is going to be a Great Company in the years ahead. There should be double benefits. Francine james, thank you so much for that. Stay with bloomberg for more on the apple story. European Competition Commissioner is scheduled to hold a News Conference in brussels at 11 a. M. U. K. Time. Well bring you that here on bloomberg. The death of democracy. Brazils suspended president makes an impassioned plea to the countrys lawmakers people talk brazil, e. M. And political risk. This is bloomberg. Francine in a session that lasted 14 hours, brazils suspended resident suspended president making a personal appeal to lawmakers. She said a removal what amount to a political death. E i came close to once when i was tortured, suffering aggressions that made me doubt humanity. When a serious and painful illness almost made my life shorter. Today i am afraid about the death of democracy. Francine lets get more with justin carrigan. Thank you so much for joining us. Is this the end of the road for her . Justin pretty much it would you heard yesterday in the small clip. She has focused her defense on personal elements. The take away from this is she did not really deduce anything new into the debate really introduce anything new into the debate. Whether she is guilty into the elegant desk guilty of the allegations. Guilty of the allegations. That could mean the end of her. Francine how are the markets likely to take this . It veryhave been taking well up to now. Andbrazilian stock market bond markets have been reacting favorably to the prospect that bruce f will be out that bruce f will be out. The markets are looking for clarity. They want an end to this process. As the nine months now. There might be a little bit of people looking again at whether the brazil story is strong. The brazil is in a very bad place. Markets like to see this income to an end. Francine justin carrigan, our emerging markets managing editor. Meon james, it is unclear to whether we are expecting the people in charge to push Structural Reforms which seem to be very slow. How much of this is a fed story . It is a big ask to get the brazilian economy moving. The bester have policy compass in brazil, but i am certainly on a mediumterm view. I would rather not pay the francine the good currency stocks that make a lot of their money abroad. James some of the greatest margins of the global growing sector that are available to investors. Francine in a crowded market . Hans absolutely not. James absolutely not. Sustainable creation of new shares of value. That is one of the few sectors that will deliver well over the next five years. It will be more to the fight by deflation. Francine if you look at emerging markets away from brazil, how much of the fed exercising and telegraphing the markets that they are ready to hike is going to leak into the emerging markets . James it is an interesting question, isnt it . The question that we have to put to ourselves is how much of local market that is denominated in u. S. Dollars. What extent is the pain of corporate level on overseas borrowings . They were dealt a big chunk of foreign debt challenge, therefore [indiscernible] asianpacific emerging economy. Francine james bevan, think he so much. He stays with us. Up next, eight months on and still no government. As the Prime Minister rajoy 62 avoid a third election. Well ask what next for spain echo this is your markets. tuning. Investors still awaiting more comments from the federal wee vice chairman, hope that Stanley Fischer will provide clues on the timing of Interest Rate increases. Level stocks you can see are rising for the first time in a week. This is a look at the ftse, pretty much flat. We are seeing other gains across the board. Cap getting from 0. 8 . The 10 year yield treasuries are retreating. They did rally in the last session. Some of the benchmark stock gauges. If we have those up. ve got volatility stock gauges in europe advancing. S p 500 Index Futures are little changed. Crude hovering above 47 a barrel. Copper holding to a twomonth low. Well have extra data checks. We will talk about the fed, political risks in europe. You can see gorgeous st. Pauls cathedral where it is sunny. This is bloomberg. Francine welcome to the pulse. Live from bloombergs European Headquarters i am Francine Lacqua. Sebastian brazils president has testified at her impeachment trial. Dilma rousseff spoke about her torture and imprisonment during brazils military dictatorship, saying the charges she faces are politically motivated. She will be permanently removed if two thirds of Congress Finds her guilty. The volkswagen ceo says it will take two to three years for the company to bear fruit. They are working on about 60 projects to overhaul the company. That is as europes largest carmaker seeks to recover from a diesel cheating scandal. German Foreign Policy spokesperson to Angela Merkel says the u. K. Will have to pay into the eus budget if they want Single Market advantages. Benefitmeone wants to from the European Union within the market structures, he also has to contribute to the cost of that. Paying into the process. Britain before the referendum, nobody talks about that kind of thing. U. K. Jobseekers are starting to feel the impact of brexit. The average advertised salary is down 2. 4 in the year from july. Global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. Thank you so much sebastian. Shorttermomething but keep an eye on that. We are also getting u. K. Mortgage approval ratings, hitting an 18 month low. The approval rate for july, the month right after brexit fell to 60,000, 912. Slumpinggage approvals to an 18 year low in july following the brexit vote. That it isar to me because some of the mortgages were not allowed or if people just held off asking for mortgages. Loans did get even cheaper this month when the boe cut its benchmark rate. This is the picture for the pound. We are showing you poundeuro. We will get plenty more on brexit in a couple of minutes but first, spanish lawmakers hold a confidence debate attempting to end a political dead mark deadlock with a have had no official government. Us on set is antonio bevan still with us. Us is bens stills. Then we are finally going to get a government in spain this week. Antonio i think it is very joy gets that ra through this vote. He is a handful of votes short but those who have signed up to back him are pretty adamant they are going to vote against him both tomorrow and in the followup vote on friday. Probably what we see today is the start of the phase of wrangling with a try to cut some kind of deal to avert this third election. The chance of getting a government in this week are pretty slim. Francine why is it so hard to reach a compromise . Ben for me it comes down to corruption. The spanish system has been accounto hold the pp to for a wrath of can option corruption allegations against them. The traditional part is toxic arrivals so in policy turns, a socialist could do a deal with the pp tomorrow and continue Economic Reforms however with allegations against them, socialists are refusing to get into bed with them. You have these two divisions and because of that it is a potential lineup. Francine how is the Economy Holding up with this political delay . Ben it is doing pretty well, to be honest. We keep hearing fear mongering from politicians who are trying to kind of jockey their arrivals saying, this is all threatening the recovery but so far the economy has been taking along nicely, growing more quickly than a lot of the big european economies. There are probably some major investment positions being held up but so far the economy is growing at a two and a half percent to 3 annual pace. Francine ben sills, thank you so much. Joining us from the dread. Lets continue the conversation with Antonio Barroso and james bevan. When you look at spanish politics, this was quite unfair seen just maybe 12 to 18 months maybe 12ite unforeseen to 18 months ago. Is it up to the markets to put more pressure so we get a deal . Antonio i think there is very little that people can do. Spain is going through an unprecedented period of political change. Political leaders are scared. They think the next government will be a weak one, that you can