tous: you're welcome bloomberg markets, the european open. i am manus cranny alongside matt miller and here's what we are watching for you. man with the plan. president trump announces and open ended him to ending the war in afghanistan but warns his support is not a blank check. activist pressure. bhp billiton unveils plans to streamline the business with the sale of its u.s. shale asset.

in 30 minutesns time. 100 days of macron. four months after the french president prospector he, the initial market euphoria about his win has managed. just how likely is it that he is able to pass labor reforms? matt: we are less than half an hour away from the european open . i'm am looking at futures that signal we will see gains at the open. you see the same in u.s. futures and it is an interesting trade today after the trump speech yesterday. you see people selling bonds, selling gold, selling the yen against the dollar. bund trade. at the people selling the bund as well so getting out of the perceived safety of u.s. german -- of german government debt. d yield is miniscule at

0.408. manus: this is a carry through of the rhetoric you just used which is that we are risk on. theite pyongyang, warnings world that it would threaten the u.s. with merciless revenge. founder of the world's largest hedge fund is saying we are reducing risk because he is concerned about growing internal and external [inaudible] i have popped up there for you, you have the dollar-yen, corporate serve worried. the is the alarm bell for carpets but equities are higher. dollar. is on the move, dollars

being sold and bought. rocking itkets are out, the fastest rally in the most three years on the minors we had a conversation with the acucar gusto ceo and he was talking about electric vehicles. that was going to drive the demand in the market. you can catch that interview on the -- on bloomberg.com. more on that shortly. matt: let's get to the first word news right now. for that we go over to singapore and juliette saly. the yuki government will today published its third position paper in today's on how it sees its future relationship with the european union. the latest details focus on civil judicial cooperation ahead of a much-anticipated document tomorrow on the role of the eu court of justice. it is part of the attempts to force a conversation on a future trade deal much sooner than the

eu wants. ireland's minister said he remains confused and puzzled about the uk's global trading plans after brexit. he told bloomberg that britain seems to be suggesting it wants all the advantages of being in the eu but none of the responsibilities it costs -- and costs. >> it is not only leaving the eu, it is leaving those trade agreements that europe has made with countries like canada and japan and south korea. it is not yet clear to us what are these better deals that the british government wants from europe and other countries and some more clarity in that area would be helpful. a total solar eclipse has wowed parts of the u.s., i huge shadow cast by the moon as it passed in front of the sun and swept across the country from oregon to south carolina. millions watched the totality event, an event that has not happened in the continental u.s. since 1979 and has not covered such a rod sways of the country

in nearly a century. steven mnuchin said donald trump may keep the current tax rates for firms that create jobs while eliminating at four hedge fund managers. that is half the top rate for ordinary income for much of their income. as tapereled some publishers who are getting away with murder. house speaker paul ryan has said that donald trump messed up in his comments about the race violence in charlottesville, virginia. speaking during a town hall event, ryan said he needed to have done better with his response. >> he messed up on tuesday. he was right on monday and write an hour ago. he was wrong -- i think he messed up on tuesday. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.

this is bloomberg. manus: thank you. in the u.s., president trump has laid out his approach for dealing with america's longest running military engagement. in a primetime address he announced an open-ended approach to afghanistan that will commit over 4000 troops to 17 years. he was willing to place a timeline on america's involvement but insisted it was not prepared to put a timeline on america's involvement. he did say that it was not unlimited. president trump: america will work with the afghan government as long as we see determination and progress. however, our commitment is not unlimited. and our support is not a blank check. manus: no blank checks from the u.s. in afghanistan.

there has been a change in town. always great to get your interpretation. how does trump's statement yesterday compared to the campaign trail, to previous statements? trumpyou are looking at reversals and about-face is you would be getting dizzy because there have in so many of them but certainly during the campaign. insularout a much more foreign-policy vision than what this policy would suggest. this is a big shift for him. in terms of talking about a flying u.s. troops, talking about the uss needing to have a greater role in some kind of international conflict, that sort of thing that is definitely a shift away from the trump doctrine we saw him laying out on the campaign trail and in his inauguration speech, he talked about america first, all these

things. this is a shift away from that. coming at a time when he has had a lot of difficulty domestically in terms of his legislative agenda, support among republicans and handling the charlottesville incident was widely panned on both sides of the isle. this is a chance for him to talk about something different. he has been criticized for not laying out a coherent afghanistan strategy so that is what he is trying to do. his: what workers -- were articles goals for the speech and does it look like he achieved them? kathleen: he was trying to lay out a clear policy, shift the narrative away from his handling of charlottesville, the rush investigations, all these issues that have been plaguing him at home. in the short term, when you are talking about afghanistan and his speech, most of the day yesterday, the danger comes in

in terms of the execution. none of his -- neither of his predecessors had a lot of success. the u.s. has not had success in terms of their military involvement and entanglement. the proof will be in the painting -- in the putting. we will see if this yields any success. he is trying to draw a distinction by saying the trouble with obama's approach is that obama put timetables on withdrawals and that led the taliban to believe they could outlast the u.s., all they had to do was wait the u.s. out and he is saying that is a differentiation with his approach and that is why the open-ended nature is significant and why it will work this time around. matt: what has the reception been like, i know last night it was at night a cut p.m. u.k. time, that is -- 2:00 a.m. u.k. time, but what has the reception

been this far? will be interesting to see how lawmakers respond in the coming days. more broad swath of responses from lawmakers, that will be interesting to see. it is significant in the short term there was some rumbling on the far right from places like breitbart news where trump's newly ousted senior adviser that is his, organization that they had a lot of concern about this. this far right that like that candidate trump who was talking about ending u.s. involvement overseas and focusing on a more globalist foreign policy. that faction of the party which his race constituted of support, it bears watching that there is some rumblings of unhappiness in those corners about this approach. manus: thank you.

if you are a bloomberg customer not only do you get the tv version, you get the tv function as well. we have more about the electric car market and what that will do. you can send questions that are difficult to matt and easy ones for me and wants to the guest. still to come, we drill into the mining sector. ftse,ive sector for the for the stoxx 600. you spoke to the executives. we will cover it all. this is bloomberg. ♪

matt: welcome back. looks like a risk on day. get said, the markets open and safe haven assets all. let's go to juliette saly. kkr is close to clinching a $3 billion commitment from new york city's pension system to invest in deals across the alternative asset managers platforms according to people with knowledge of the matter. the pledges the latest in a string of separately managed accounts over $1 billion that have been formed to invest pension money and multiple

strategies. representatives for kkr and the city declined to comment. a scam may have involved at least 11 bank employees beyond the executives that have been charged with crimes. the allegations from a prosecutor, as mark johnson, that level head of foreign exchange castrating in london is scheduled to go on trial next month in new york. he is accused of illegally using his knowledge to profit from a $3.5 billion currency transaction in 2011. a spokeswoman for hsbc declined to comment. and alley court has ordered johnson & johnson to pay $415 million to a 62-year-old woman who blames her over very cancer on talcum powder. five point 5000 claims and has lost previous verdicts. you can find more stories on top . let's check in on markets in asia. we have the nikkei closed but

some better moves coming in. they closed higher by .44%. have a look at hong kong in late trade, rallying up i 1.2%. the front runner as we see investors buy into a number of hong kong listed companies after strong corporate earnings. so iss are low and volatility. in terms of stocks in detail, bhp billiton of -- exiting its offshore assets after it came back in the black with a 6'7" billion underlying profit, it closed higher by 1%. china overseas land in hong kong doing well, this on a number of worker upgrades after yesterday but lenovo down and the hong kong session. atop analyst said -- a top analyst said it has 27% to fall. the indonesia rate decision, no change expected to the cash rate percent.

the u.s. dollar indonesia could have trouble trying to break through the seven-month trading range. cut if we do see a surprise coming through from the bank of indonesia. matt and manus. matt: juliette saly joining us with an excellent chart from the bloomberg out of singapore. ray dalio has reiterated his warnings against exposure to risk arguing that politics will probably play a greater role in affecting markets that we have experienced in any time before in our lifetimes. ceonew linkedin info earlier today. in there any bright spots this morning, in the risk that he sees? it is kind of depressing to read that this is a guy fighting

mentality for the u.s. government rather than doing everything in the best interest of the country. similar did make a warning two years ago. it is not like somewhere fresh out of nowhere. he said this two years ago and it did not come about then. his warning is generally valid. there are risks at the moment. we clearly are in a populist phase and it is worrying. we are trading ok today because it is quiet and call him. if markets can get through the end of august without a more severe it -- severe time of risk aversion. there is a risk of a serious move downward. skewed allrisks are over the place. i am thinking about mliv. there are other people driving the bus and that is always dangerous. struggle last week.

we had a guest on the 6:00 a.m. discussion and he said you have to take one ugly sister to the dance and sterling is that ugly sister. this is where you could get more bang for your walk and dollar-yen. currencies are where the biggest fa is in terms of the next two weeks. sterling remains vulnerable. it has a structural story. that realct disposable incomes are being squeezed. the consumer is being squeezed in the u.k. and there is no progress made in the brexit negotiations. ultimately that might turn out ok. or not as bad as people fear. i do not see what we will get positive headlines in the short-term given how fractious the negotiations are. there is a chance in terms of eurosterling, a risk that mario draghi will make some verbal

intervention, make some reference to how strong the euro has been. that might hit the euro a little bit, that is a risk to be aware of. the: what you think about end, what do you think about safe haven assets that are getting sold off today? beenis one that he has emphasizing a need for. others have piled into that. giving that same advice but not piled into the trade. we do not see it really rallying. quiet, there is not massive volumes going through on any assets so we are seeing risk rally and risk havens, safe havens selloff a little bit but there is no major moves or conviction. these could reverse quickly. the yen and the swiss franc are currencies which remain under longer-term pressure but in the next couple of weeks of the are likely to be supported as markets are on the back foot

higher thanhis average volatility over the last couple of weeks and the bears are clearly in control. the spreads are wider and credit markets and you look at the s&p and we are 1% before the volume weighted average the last two months. that implies the average transaction is 1% offside so people are nervous, they are on holiday, they are slightly down on their investments, they are more likely to cut risk than increase risk and that is the environment we are in for the next week or two. manus: thank you. are party and that is what makes a market. a bid and an offer and see if you are on the right side. thanks to you and your team. london.51 a.m. in we are minutes away from the start of your trading day. we will take a look at the movers and the shakers. decisionon and their

to retreat from u.s. shares, did they get there on their own or were they pushed by elliott? pulling back from potash. that is the debate. nine minutes to go until the trades hit the tape. this is bloomberg. ♪

manus: minutes to go to the start of the trading day. bhp billiton managed to rise during the session in australia.

higher.percent what are their share assets worth, the market likes what it sees. you have got a bond buyback coming through. they have been under pressure from the activist investor. you can pick up the interview on tv . everything mackenzie said earlier. this is the ceo that is bidding up the story in terms of the electric car market. how disruptive it could be and what it could do to the demand side of the equation. you have providence. matt: yeah, if you forecast a is one thing but if you cancel your dividend it is another. if your ceo steps down because of a failed strategy that is another. put all three together and s want to run hard from that stock. it has in a painful year for provident financial.

leavingpeter cook is and forecasting a wider loss and scrapping the company's dividend. we will see what happens with that company in live cash trading. the open is next. this is bloomberg. ♪

matt: jobs are set for a higher opening this morning. london, paris, frankfurt come all indicated higher. will be one ofn the protagonists for the rally. economists are now predicting a 6% rally in the euro stoxx 50. that will be before monday's close. you are looking at a potential higher opening. we have come off by more than 6% since than peak in may. i'ts going -- it's going to be a

miner's day. matt: for sure. the euro and the dollar movement is key. here's the euro. we've never seen a gain this much through august. on the other hand, you have the dollar with a record short position. manus? manus: absolutely. the question is, is it sustainable, in terms of pricing? said he was confident, in terms of the outlook for copper. london is up by 0.3%. 0.6%.anish market, up at of theou tell you in terms complexion of the big stop gains. bhp billiton, persimmons, and

rio tinto leading the u.k., up by 0.6%. we're just waiting for the rotation to come through. let's see how the british gilt market is opening. nejra cehic is standing by. nejra: the stocks are higher, gilt yields are higher as well. we are up, just about two basis points on the 10 year gilt yields. a lot of those yields have remained fairly t steady at this point. we are looking at the stoxx 600 rebounding after three days of losses. ever industry group is higher, as you can see on the imap. materials are leading the gains. you are talking about miners there. financials, also moving higher. perhaps some of that on

slightly higher yields, but overall come all industry groups in the green. utilities are underperforming, but still up by 0.3%. the strategists were changing their views on the equities. the euro stoxx 50 is showing the average year end strategist target. eurozone equities have been drifting lower since may. that a lot of that has been down to the stronger euro, and that effect will start to fade from here on in. we are expecting a rally strates were changing their views on the equities. the euro stoxx of, 6% 's close.y this is showing the euro stoxx 50 versus the euro-dollar. it is showing the highest inverse correlation since april of 2016. if we do see a weaker euro, that

could feed through to a strong bump for eurozone stocks. chart. is a great that shows you the euro-european stocks relationship. it's interesting, in one sense, but obvious in another. at the top, the big gainers. manus actually spoke with one ceo. bloomberg asia spoke with another. this is the percentage change. take a look at the index point leaders. you see them there, as well as other commodities producers. total, also a gainer there. bhp billiton, right there. one thing interesting, on the losing side use the defense stock at the top.

we are taking a look at the biggest losers here. as far as index points, right 1.3%,at the top, down pernot ricard. investors are selling it off today. manus: let's get deeper into the mining sector. we have had earnings from bhp billiton. the ceo announced plans to shelve the shale assets. says the, antofagasta outlook is positive. with us now is max kettner. so, when you look at this, the ceo siw arning -- is warning the market's parting, and he is selling mining stocks. overdoneink we have

ourselves? >> i think not yet. when we look at the earnings picture and the commodities sector, it becomes clear that expectation has been high for andq2 and the revenue earnings side. but we still has an positive surprises, not as positive as the overall market, but commodity producers have still been able to surprise the market positively. from that perspective, i don't think we have partied too much y et. in terms of prices, that hinges on the china picture. i think our stance on the chinese economy so far and for the remainder of the 17 is we will be fine longer term. 2018, that is a different fiscal tendencies tightening. earlier on hiske

program this morning with the ceo of antofagata. the consumer economy is much more intensive and copper. and also, i think we are seeing a very significant change, or disruption, technology-wise. thoseon the other hand, seem like strong, underlying fundamentals. we have seen with these commodities, not just copper, iron-ore, coal, a number of others that help these companies make money, rises so quickly in price over such a short period of time. tell you need to be concerned about that? wouldn't that keep you up at night as an investor? >> i partly agree with you and i partly agree with him.

i would say that is the typical economist stance. i think what we can see is the fundamental picture is pretty good. that is what is clear, but the pace of price appreciation has been too drastic. there's an element of fundamental improvement in the copper picture, but there is an element of more speculation. so, it's a bit on both sides. guy: just before we continue this conversation, matt, you have been giving the details here. 44%,w a fall as much as the most on record. the ceo has stepped down. peter cook has stepped down with immediate effect, as matt was telling you at the start of the show. they now accept a pretty

about $103 loss, million to 120 million pounds. the full year dividend is unlikely due to deterioration in the trading performance for the company. the company is determined that the group must protect its capital base and financial electability, according to providence. -- according to provident. at 43% at theown moment, worth 4.5 billion pounds. last night it was worth double that. let's return to our top story in terms of metals and miners. max kettner is still with me. let's move the agenda along to the precious metals side. you lifted your precious metal

selection to overweight. is that about protecting my risk for the rest of this year, or is that about a particular nuance? >> that is more of a hedging strategy. dalio do we do what ray suggests, 5% to 10% of your portfolio in gold? >> 5% in commodities from a multi-asset perspective is a little bit too much, in my view. when we have a picture in the multi-asset complex, such as what we have right now, we go rather short treasuries and rather long bunds. overall in an environment where consensus is too skeptical about the state of the u.s. economy. but what if we're wrong?

what if there's a massive risk off environment? and that is where you want to be in gold. matt: we were talking about gold and the biggest names in the industry were recommending to get back to it. we have not seen it rally that much. and i am wondering if bitcoin is part of the reason why. the rally has been incredible come up about $4000. it dropped about 5% today, $200. is this asset one of the reasons gold has lost a little bit of its shine? is this something investors are using for defense? >> to be honest, i think the relationship between gold and bitcoin, idling that is the main reason. i think the main reason is that at the moment, we are faced with an environment of very little r isk. you look at equity volatility, part of fx volatility, it is

really suppressed across the board. on the other hand, you are faced with a huge level of uncertainty. be it political uncertainty or economic uncertainty. we have been faced with this environment for almost a year now. the problem is, we can't really price it. we cannot really price it. i have said this before on the show, we are used to pricing risk. we are not used to pricing uncertainty. as long as one of these uncertainties do not translate into material risk, be it tail risk or base case risk, that is capping the price. manus: matt is right, bitcoin is up 600%. he should know a thing or two, he lived on it. coming up, we are going to talk about the plans for afghanistan

president trump has outlined. is it a new approach for america's longest lasting conflict? the dtetails to come. this is bloomberg. ♪ matt: welcome back to "bloomberg

markets: european open." i'm matt miller, alongside manus cranny, turning me out of london. take a look across the continent and on the island as well to see

what stocks are doing. almost 14 minutes into the session. the stocks of hundred, gaining. the dax up 0.7%. we are seeing gains, really, across the board in european stocks. safe hveaven assets being sold off. guess, to somei extent, donald trump making everyone feel a little bit better. afghans responding to donald trump's announcement. earlier the president said he would keep american forces there as long as it takes to bring about political settlement with the taliban. donald trump: america will work with the afghan government as long as we see determination and progress. however, our commitment is not unlimited. and our support is not a blank check.

still with us, max kettner, across asset strategist at commerzbank. max, first let me ask you about how much you can extract politics from your investment decision-making? dalio, we heard from ray it will become a much bigger part of the investment environment? do you try to take it out though, because it is so unpredictable? >> again, my answer is partly yes, partly no. i think what we can see at the moment is expectations have been january,in february and after the elections. expectations for the u.s. and what will see through in terms of fiscal stimulus, tax cuts and so on, the equitation's have been too high. -- the expectations have been too high. the problem now is we are in an environment that is to politicized.

both on the growth side, but also on the investment side. we do have an environment where we all must consistently look at what is donald trump tweeting, what is the administration going to do and who is going to resign? when we look at the reactions, the him is pretend li,ke, the trump tweets can change potential growth over the next 30 years. that is a bit too much, i think. i think we are getting to a stage where we will see an environment that is back to the fundamentals. manus: i don't think the bond market believes he has the ability to deliver the 3% growth, but that is a subjective point of view. we were bobbing around 2.2% last week. short divisions. 21%rest of 2000, it rally

at the end of july. mostare shorting, the short position since 2009. they don't believe america first. >> yeah, i think that is part of it. manus: i want to believe america first, from a market point of view. but even i have had my financial advisor in here saying, you have got to scale back. >> when we look at the so-called trump rally right after the election, part of it was due to the fiscal stimulus. but, when you look at the q4 reported season, corporate figures were much better. it was also, the big, big numbers coming through. shortingook at, we are as we have never done before on ically, that isas

a story very much linked to the u.s . dollar. that is not, do we believe in america first? that is a story, i am not going into small-caps. i am going to the large caps. manus: it's fair. >> i would never say you were wrong. manus: that is all right. i was just misguided. matt, jump in. matt: i have a u.s.-europe question. china is the driver behind the commodities we were talking about, and to some extent, the u.s. is the engine that has driven in the past a growth in europe, or at least had to work together with europe to grow the economy is on both sides of the electric. i-- of the atlantic. if the u.s. becomes a problem,

can europe take the lead? is that one of the reasons we have seen this rally for the european stock? >> i think that is not the case. it is unlikely we will see the developed market economies getting completely sort of out of sync. i think it is unlikely to say, if you have the u.s. running into danger in terms of economic growth that europe will take over. that is unlikely, i think. i think, from that perspective, in particular with what you said about china and the links to the u.s., for example, what we can see here is we have external demand holding up emerging market growth. particularly china's growth, but also asian growth. environment where the last couple of quarters were held up by external demand and exports that have been really dragging those numbers higher. now, the problem is, what happens when the high base fx

are the end of q3 and q4 kicking in, and you have less of a lift from external demand. so, that is not really spectacular. you have europe, but that is not that spectacular. so, i would rather argue for a normalization of growth, rather than being something extremely spectacular over the next year or so. manus: hold those thoughts because we have a little bit more to get through. next kettner stays with the team. if you are a bloomberg customer, you get it on your television, but online. is the function. will we invite max back for that correction? that is the question i have to ask myself.

that's it. we discuss more markets very shortly. ♪ matt: welcome back to

"bloomberg markets: european open." i'm matt miller in berlin. you are looking at a live shot of the brandenburg gate, on a day when it is not raining in

the german capital. let's call nejra cehic. nejra: the stock market might beginning, but provident financial is showing a stunning loss, a drop of more than 50%, the biggest drop on record, hitting the lowest levels since 2011. witheo has stepped down immediate effect, as the company forecasts a full year loss and scrapped the dividend. the plan to replace workers with technology has backfired. there is a deterioration in the trading performance. also, an investigation by the u.k. regulator. that is provident financial, showing stunning losses. on the downside as well, hikma pharmaceuticals, down 1.6%. it was downgraded to neutral from buy. from the upside, i looking at

cairn energy. we are up just 1% with reported net income at $340 million. -- $314 million. dividends receivable up to $5 million are fully impaired. days sinces 100 emmanuel macron came into the zeitgeist that he would be president of france. we analyze the 100 days of macron. his vision, ambition, and ambition for change in the market. we take you through this chart. the french come back. the market was rocked earlier as it looked like marine le pen would rattle the markets. macron succeeded through the

polls. ♪

matt: president trump announces a in open-ended commitment to ending the war in afghanistan. he warns his support is not a blank check. pressure, unveiling plans to streamline business with a sale of u.s. shale assets. macron. of four months after the victory, the initial market euphoria about his win has vanished. how likely is it that he is able to pass the labor reforms? here alongside manus cranny at

bloomberg's european headquarters. let's see how things are shaping up area equity markets are definitely pushing through on the upside despite the protestations from pyongyang. there has been this year term by donald trump focusing on afghanistan. lay the groundwork interminable optimistic vision forward. basic resources and technology with resources of 1.19%. have a look at this. , thatnction on your visa is going through this morning. world.who of the mining we are 100 days into emmanuel macron's first presidency.

while his tenure may have been relatively uneventful on the political front the market euphoria follows victory in the first round in april has vanished. back to where it stood before the election. investors are waiting to see him succeed in reforms starting this week with the labor ministry set to unveil the outcome of months of talks with the union and company representatives. a very good morning to you. the 100d you sum up days for macron? >> there are two ways to evaluate this. any political performance, what has been deliver it in the stance of policy results -- deliberate in terms of policy results and popularity. i don't think anyone expected france into anm

economic tiger overnight. part of the reason in the beginning is removed or what we were dealing with the prospect of marine le pen. in a sense it was a relief rally. deliverables, hard policy deliverables, it is a question of watch this base. labor market reform which you have mentioned, budget cuts, spending cuts and that sort of thing. i think the next few months will be critical for that. in terms of popularity, i think it is a more mixed bag. macron came on very strong at the beginning with his foreign-policy performance but has disappointed the french with a few minor screw ups in july. his overall performances -- he is down in the polls.

matt: the german government has been looking forward to working with his reform. deepening ofrd to the ties between the european superpowers. is he going to be able to make that happen?\ >> -- happen? rest for germany and the of the world micron's ability rests on his ability to deliver the labor market reform. we will see how successful he is at that in the next months. for germany in particular, what he does on the budget. does he mean to the european meet 3% deficit limit -- the european union 3% deficit limit? visit spending cuts that are going to help micron ==-- macron deliver on the budget. both the sings we will see in the next -- both of those things

we will see in the next x weeks. manus: the first 100 days -- the next six weeks. the first 100 days of micron's presidency. do you believe micron cantilever deliver? can do you doubt macron? >> i don't doubt him but i agree that hopes at the beginning art too much is -- too much. from the market perspective we did not really expect france to be transformed within the first 100 days. therells have suggested is going to be drastic change quite quickly. i think that is part of the disappointment. i think there will be incremental change. always in politics it will be incremental and it will

ultimately disappoint some. with regard to the market perspective, european markets have come off. >> i got that in before you corrected me. >> there are two sides to the story. one side is disappointment in micron. less of reforms coming through and less quickly than we had hoped for. part of it is also that the french equity market and the german equity market tend to be the most negatively correlated with europe. with the euro strength you have the french equity market. how much of it really is -- in the u.s. you see donald trump comes into the white house with a republican majority in the house and senate and still manages to achieve absolutely nothing legislatively eight months into it. u.s. indexes are at all-time

highs. how come we don't see the same kind of rally or hope or performance in france and how would you compare the two presidencies? story, that is only one side. there is only the euro strength. when we look at european equities and we are quite bullish on european equities, particularly the eurozone. we were just saying that the year is getting thin for here. if you're playing european equities at the moment, you have got -- you have to have a view on europe area if you have a view that europe is going towards 1.25, 1.30, it does not matter if macron will deliver or not. you look at earnings revisions at the moment area between these earnings, the euro has come up

quite drastically. manus: overnight, they have boosted the forecast for the european markets by about 6% on the stocks. this is a personification of what you just said. this is the correlation between the euro and the stoxx 50. someone say that has run its course. that is the point you're making. aput it to you that there is risk, and inherent risk, that is mario draghi in terms of currency. that is the risk reward that you deal with in the short term. is he comes out in saying how does the market react with tapering? what would happen with it centrist -- with a centrist speech. obviously we have seen a big selloff there. we're back to .47%.

that is down to -- done. say, there has been a selloff but that has come off quite quickly. the big thing here and the big thing to watch out for until the end of the year, with expectations so high. when you look at growth expectations, you look at what breaks even. you look at expectations for inflation in the eurozone that are relatively stable. basically you're in an environment where you say the further positive surprises on the inflation side is really thin. kinde getting to where any of surprises might be on the negative side and i think the market is not prepared for that. with multi---ver long positions and you're in an environment where they can very quickly say i am out. draghi revertee

or continue to push back any talk of tapering, even to 2018 because you have got continued euro strength, do you see that trade in trouble? max: i think so. towards-dollar traded 1.25 and higher, that is overblown. we cannot rule out that it is temporarily going towards 1.20 or maybe higher, but they should up another test balloon and say in the press conference, as long as financing conditions are all right we don't care. we cannot rule that out. from a fundamental perspective, i would rather be at this range where we were between january 2015 until very recently. i will be at the top of this range probably. thank you very much for joining matt miller and myself.

daybreak euros life -- europe live after this show. that is where you normally see me. normally i am tucked away. coming up on this show we will dig deeper into the mining sector. focus on earnings. take a look at the results. this is bloomberg.

♪ welcome back, the european open. we get the first word news with sebastian. sebastian: the afghan taliban has responded to donald trumps open-ended commitment to the country. continuing to fight the u.s. until it leaves afghanistan. he said he would keep american forces there as long as it takes to -- as long as it takes. only grudgingly acknowledged the need for the presence in afghanistan and promised to skew military entanglement abroad to focus resources of at home -- at home. how it sees its future relationship with the european union. the latest details focused on civil judicial corporations ahead of a much-anticipated document tomorrow on the role of the eu justice. theresa may's attempts to force a conversation on a trade deal sooner than the eu wants.

ireland's prime minister remains confused and puzzled about the uk's global trading plans after brexit. britain seems to be suggesting it wants all of the advantages of being in the eu but none of the responsibilities>> and costs. when britain leaves -- and costs. >> it is -- when britain leaves it is leaving agreements with japan, south korea. it is not clear to us these deals from other countries. i think more clarity in that area would be very helpful. the solar eclipse have wowed --reporter: the solar it clips has allowed -- eclipse has wowed. broad not covered such a us way of the country in nearly one century. providence financial has a by

most on record this morning. the ceo steps down with a immediate effect at the forecast a full-year loss and dividends. after the company's planned to replace workers with technology. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. manus? manus: thank you very much. bhp four profit at $6.7 billion. it mixed the -- mr. the expectations. in apparent concession. minerrld's biggest announced plans to sell its u.s. shale assets. the canadian potash project. bhp's ceo andrew mackenzie sat down with bloomberg to talk about his plans on the exit of shell. >> a prepare strategy is a small number. we are keeping the other options there. so that we can proceed with a

reasonable pace. for now we think a trade sale would work best. manus: the senior research analyst at sanford. he joins matt and myself. we just heard from the ceo. my question to you is simple. elliott,manager involved in billy's stock. it do you think mckenzie made these decisions voluntarily or it was elliott going go on? >> i don't think there can be doubt that elliott played an absolute pivotal role in capitalizing these decisions. if you look at the link prior to the involvement in the company, it was very different. it was much more offensive. this seems to be responding to the criticisms put forward but not just elliott. catalyst. a they bring other shareholders also. over this sort of super cycle. we need a new strategy going forward. absolutely critical role there.

i think both in terms of the exit from the u.s. assets but also the project. this is a multibillion-dollar investment that is being proposed at a point when the potash price is at a week level. to we really need week -- new capacity? really, yes, elliott has played a crucial role. does it concern you that elliott has to come in there and speak up in order for mckenzie to make the right decisions? you have not perform on the you put and outperform on the stock. paul: really on the back of the change in management coming in. the belief that he would heave at some of the costs elliott has been making. in a certain sense it is disappointing that it takes an activist shareholder to force or

capitalize these changes. on the other hand, if we take the asset management industry as a whole, we are talking about the rise of index asian. what we needed to see is in active shareholder community making active recognitions about how value can be maximized from the assets they own. ongoingis in part of an conversation taking place. as far as this argument -- i'm sorry, i am just messaging with manus as we speak. this passive versus active investment has taken a big role in this argument. it has gotten pretty ferocious. some people see passive investment as a communist played that will destroy society. do you think it is a problem though?t really -- it has changed the climate. kids are putting money in

betterment through their cell phones and passive funds and not taking an active art in the investment of -- not only their money but also the steerage of these companies. last year i was involved with a note with our strategists where he put out a note entitled why -- responsible in some way for making that analogy. our point is at least under communism you have some attempt at active management of capital and direction of resources, hopefully to some good or other. the whole point about having active management of shares more generally is there is that a location and that active intervention by shareholders by the allocation of capital. issoon as your passive that once the -- responsibility is to where the they think their money off to go.

elliott is undoubtedly on the right side of that debate. manus: the other conversation this morning, i like the analogy between marxism, communism -- i'm a simple irish man. we had even ari got up this ceo -- he we had the was very very constructive in terms of the copper market and the demand side from the revolution that is coming in the form of electric cars. we have got electric cars. we have got this whole move going forward in terms of revolutionizing the motor travel we use. that, he would suggest, changes profilend side of the for copper. it certainly does. if we talk about copper, what does it possess? it's inherent quality is the electrical conductivity. tothing that speaks

efficiency, to electrification, a green future, really doesn't speak towards copper as being a metal that has to play a significant role. if you look at an electric vehicle, there is more copper in the battery and in the motor of that car than there is in your conventional standard internal combustion engine. that is only the start. you're also talking about the investment in the grid and infrastructure in terms of power distribution and a generation who will be required to support that. when we talk about the charging, a critical aspect in the demand profile for copper. that is a bang on point. manus: bang on point. you see this flow of supply. we have seen this before. the whole market goes well, after -- absolutely off again. there we go. they ruin their own markets. t thing is ans

overabundance of exuberance of the chief executive. manus: i would not say he was over exuberance. paul: caution has to be the watchword. we have seen that. ladenburg -- even -- every time you put in the market has a cannibalizing affect on what you have in the market. discipline, capital restraint. let the demand side do the heavy lifting. there will be growth and supply. do not get carried away. that was the damage of the last cycle. hopefully we have learned lessons from that and hopefully going forward we will see mining companies keep them dry. have a more disciplined allocation of capital. to someone like elliott, they have been instrumental in and leading the charge on highlighting the returns for investors that they want to see. like the idea of how important these commodities are going to be even as we get away

from the internal combustion cars. and go to electric you need a grand prix at you need more commodities in order to make that work. especially in a country like china. what is your take on china and its drive behind -- not just the recent gains, but for the future. the near-term future. how important is china going to be in demand? lyul: rough of the -- rough half the demand. what we saw over the last year, the decline we saw in the course of 2014, 2015. we had a hard landing in the a chinese economy. ignore the headlines. the ground is a harder landing than the headline number would suggest. that had a significant impact on the commodity debts. what we saw was china reengaged. talking about supply-side

reform, yes talking about environmental sustainability. at the same time needing to deliver a positive growth number. the economy is predicated on heavy industry, that is going to require some support for the industry. that of course is what has been capitalized through commodities. new chinese demand growth will be over the next few years. we still see that leading to a positive number. albeit, not the kind of 10, 12% growth that we saw during the growth of the super cycle. a modestly positive number on the side. we will see the rest of developing asia, the developing markets continue to grow and we will see a number that sees demand. positive demand growth for any number of these commodities. if you put that against a more disciplined supply-side, they can be well supported. chinese and the structure is exciting even with

accelerating growth to it makes me think of another more depressing and the structure story in the u.s.. chance we are going to get a real bump in infrastructure investment in a country that is so wealthy and badly needs it but does not look like it is moving in that direction? paul: if you look at the reasons tour card's --recent scorecards, they got a d-on these kind of lines. one the most exciting things for of the trump manifesto was his commitment to double down on investment in the u.s.. some of the reverses we have seen in terms of domestic policy infar, almost up the ante terms of things that could actually be deliverable. the u.s. is not the kind of powerhouse that it once was in terms of commodities. that mental has clearly been taken by china. the u.s. is still important and i think we see the u.s.

infrastructure spending will have a meaningful uplifting playing into the positive price story. manus: thank you so much for being with us in a full conference of discussion area surveillance is next. ♪

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open-ended commitment in about turn from his campaign rhetoric. ireland's prime minister tells us he is confused and puzzled about britain's plans. the world's top miner finally caves in to months of pressure. this is "bloomberg surveillance" and i'm francine lacqua in london. there is a lot to get through and we need to bring you be data and stories. the region wealth