guy: good morning, welcome to "bloomberg markets: european open." we are live from the biggest airshow of 2018. i'm guy johnson, alongside matt miller, who is back in berlin. matt: good monday morning. asian stocks decline as data shows the slowdown in china's economy and the second quarter. the cash trade is less than 30 minutes away. as trumpnd or foe, calls the european union and opponent, the president is in

finland for a crucial one-on-one with vladimir putin. we are live in helsinki. a brexit showdown in london. theresa may basis for party in a vote as talks restart in brussels. will her new seat fare better than the old one? and the world's two biggest playmakers prepared to do battle at the most important airshow of 2018. ceoill speak to the boeing and bring you the new airbus coo's first ever to the interview. looking forward to that coverage out of farnborough. let's take a look at how the indexes are trading in terms of futures. down across the board. it should not be surprising, as we saw asian markets down. japanese markets are closed for the marine day holiday, but

chinese markets which looked like they would briefly recover after the lunch break continued down in the afternoon session because of that disappointment on gdp. take a look at treasuries as well. we see treasuries in yield twong just a little bit, point 84% is the level. maybe investors are letting go of some of that paper, pushing the yield up a little bit. it has not changed much, and you can see the yield is far below where we were on thursday. take a look at the g nm screen to see the other asset classes. you get a clue as to whether or not we are going to see a risk on or risk off day. as i said, we see the treasury yield rising. the japanese nikkei are still in a friday trade. everything was open. australia, indonesia, south africa, all down.

as far as forex goes, there is not a lot of movement there. we do seek dollar strength against the yen, some dollar weakness against the euro and the pound this morning. we don't really have much of an indication as to how this session is going to go, with the exception of the red boxes we saw in futures. let's get out to hong kong for debra mao and the bloomberg first word news. debra: thanks, matt. the european union's president has called on donald trump to reform the world order rather than bring it down, warning that trade wars can lead to "hot conflicts." in beijing remarks came after the u.s. president said he considers the eu an opponent of america. trump made the comments as he heads to a summit with vladimir putin in finland. minister will say today that her plans for you

leaving the european union strengthens the positions of many factors and protects jobs. that as theresa may comes under --ssure i the euro aerospace my the euro aerospace center to maintain competitiveness. she revealed yesterday that u.s. president donald trump advised her to take the eu to court rather than to talk to them. >> he told me i should sue the eu. sue the eu. actually sue them. we are going into negotiations. but interestingly, the president also said this conflicts. was to walk away debra: china's economic expansion has slowed in line with expectations, outlining stable conflict. gross domestic product increased 6.7% in the second quarter from one year earlier. that was the slowest pace since 2016. and down slowly -- slightly from the previous quarter.

investment growth in june. global news 24 hours a day on air and tictoc on twitter, and powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt: debra, thanks for that. as president trump plans to meet vladimir putin today for a highly anticipated 90 minute one-on-one discussion, let's focus in on the future of the russian economy. over the last six years, the sovereign wealth fund has invested 1.3 trillion rubles in the country's economy.what would a successful summit look like ? let's go live now to moscow and talk to the ceo of the russian direct investment fund. your of all, thanks for time this morning, really appreciate it. such an important day. what would you view as a success from this meeting of president trump and president putin?

important it is very that the dialogue has started, because it was so difficult to start dialogue. there are mainly ideological differences between russia and the u.s., but also misunderstandings and miscalculations. direct dialogue between our leaders is a very important. i will point out the world cup just finished, and people were surprised how positive the attitude was in russia. they expected much worse. it shows that russia is a positive place, and lots of people miscalculate and misunderstand russia. and does that mean that you russian investors would like to see sanctions lifted sooner as a result of this meeting? kirill: i think there is no expectation that sanctions will be lifted soon. by the way, sanctions in many ways benefited sectors of the

russian economy. our agribusiness grew quite a bit. the expectation is that it is just normal to have dialogue between russia and the u.s. that is very important. we also shared problems we need to deal with such as terrorism and other issues. so we just expect that normalization of business dialogue, political dialogue, economic dialogue, because right now we have the worst possible relationship with the u.s. needs to be finished. we need to have a new beginning, and hopefully this meeting will open up opportunities. morning, it is guy johnson. the president of the united states has been tweeting recently about his concerns surrounding opec and the price of crude oil. do you think oil will be on the

agenda today? i think it could be, and we are very proud of the partnership we have built with saudi arabia. it is an example of the partnership russia has built with japan and saudi arabia, countries we have had difficult relationships with two or three years ago. we were able to stabilize oil markets. we believe oil prices might have been higher if interi -- if russia was not interested in high oil prices. we are interested in a solid oil price. and theve that russian saudi agreement is positive for the world economy because it gives stability for oil prices. matt: what do you take from the current trade debate? what would the russian view on this be? i am sure you thought donald tusk warning trump and others that hot conflicts can arise from trade issues like this. is for openia

trade, open investments. we believe that any kind of violation of that principle is that for the world economy. we understand the u.s. sees imbalances in the sum trade and is trying to -- in some trade and is trying to correct it. wheat reduce the dangers of trade wars. we believe trade wars have a negative effect for the world economy. guy: if you were to see sanctions lifted, and you were to see the opportunity for boris --to come in and invest more in russia, where you think you would see that investment? there is talk of u.s. business coming to russia. which areas with a focus in on? first of all, i wanted to point out that sanctions didn't work the way the obama administration wanted them to. they wanted to isolate russia. it didn't work.

so we will see, but we already see that u.s. investors actively invest in aggregate tech. we will announce a major inner tame it -- entertainment partnerships and. lots of partnerships going well, including retail. were around 50% of the offerings. while it is a myth that u.s. investors do not invest, they are, but they will invest in it more when there is less political pressure in doing so. matt: what about rates? do you see u.s. investors going into russian bonds because of the higher return they can get there? so, and lotslieve of people made very attractive returns last year, and lots of people are doing this trade investment. the russian government is going

to issue more this year. we will have more debt to invest in infrastructure. we believe that markets are attracted to the stability of russian currency. great talking to you this morning. , the ceo of the russian direct investment fund. what do we have coming up next from farnborough? we will speak to john harris. this is a company which has significant international exposure. we will find out what is next. this is bloomberg. ♪

matt: welcome back. just about 16 minutes away from the start of trading. you can see president donald trump walking in to his meeting. there is a lot of you trailing behind him -- there is melania trading behind him. . 90 minute meeting just got out of the beast. they bring their transportation with them wherever they go. we expect to have the meeting begins soon. you won't get headlines out of it until after, so a 90 minute meeting between president

trump and president putin. of course, we will want to know what president thinks about the u.s. indictments, but it is will bring their intelligence apparatus to the u.s. anytime soon. but get to the bloomberg business flash. for that, we go to debra mao. debra: goldman sachs reportedly plans to name president david solomon as its next ticket josh -- chief executive. the current ceo will stay on for an interim period. in march, solomon was named as the sole president under blankfein, declaring him as the front runner for the top job. a spokesman declined to comment. john's has put further distance between the pizza chain and its outspoken founder for using a racial slur. to removehas decided all ties rum john schnatter and

remove him from all marketing materials. he resigned as chairman but remains on the board and still owns about 30% of the company's shares. thank you very much. here now is john harris, the ceo of raytheon international, one of the world's largest defense companies. john, good morning. business iseon's international. the president is heading around the world at the moment. we have got the trade story bubbling up, we have him pushing others to spend more on defense. give us your view on what the world looks like right now from your business perspective. john: 37% of our business was international this year. we celebrated our 14th consecutive year in the international marketplace. we have seen significant

opportunities for continued growth. . in the u k, we have 1500 employees, some 1000 employees in germany working as part of supporting a number of employees we -- of endeavors we have. and the ability to grow business in other areas. after celebrating our 50th anniversary in saudi arabia, we announced a new company in saudi arabia. as well after celebrating our 30th anniversary of work in the united arab emirates, we formed a new company, raytheon emirates. that is about building capacity in those countries to design, develop, and deliver sustainability' our customers are looking fr. does the president make it easier or harder? john: it is great to have

advocacy of the united states. it is important to note that when we compete internationally, we don't just compete against companies, we compete against countries.. enjoying the support of a business friendly president and the advocacy is a very essential. guy: the president was here a couple of days ago. he was operating many other nato members. germany seems to have been a particular focus for not spending enough on defense. what comes out of that? do you expect defense budgets in europe to go up? will you pick up some of those business opportunities? germany is the one he said.now the president would like to see that 2%. he would like to see 4%. do we see defense budgets going up? ihn: what i would tell you is probably would like to leave the diplomacy to the diplomats. have seen said, we significant demands from our customers in europe for capabilities to protect their

sovereignty. notably, air missile defense and greater air missile defense. two new nations joined the patriot family this past year, whole and in romania. needing to cap abilities test keying ke -- needing capabilities. they are looking to build their that city in regards to air and missile defense. asy are looking for ways they spend more and focus more on defense to have the right kind of capabilities. our job is to invest in the technologies and provide solutions that help them to be successful. guy: i hate to go on the way diplomacy works, but i think it is part and parcel to the story. there is a debate that says the germans or any other country will say we want to buy europe because we are worried about how the president is going to put the future abilities of defense companies fourth.

another argument as we will by the u.s. to pass by the president. give us your thoughts on how that works. john: one of the reasons we are here at farnborough is to take the time to connect directly with customers, to really understand directly from them what their care abouts our, and to but the solutions on the table. we have been in the u.k. for the better part of 100 years. that is far shorter in europe. we intend to remain here and be a meaningful part. , two thirdsour base of our international suppliers are here in europe. connecting with our suppliers and with our customers throughout the course of the next four to five days is part and parcel of why we are here, so we can understand what their key care abouts are and how we can help them. guy: 40% of the business is

international. what are you going to do to get that 2% number higher? john: absolutely. we intend to continue to grow internationally. our plan is to continue to focus on our capabilities, to treat our international countries as markets with multiple customers, and make sure we continue to make investments based on a keen understanding of where they want us to go. we see significant upside opportunity and growth. in europe, the middle east. guy: thank you for coming to see us. john harris, ceo of raytheon international. matt: thanks very much. very interesting stuff. we are minutes away from the open of european stock trading. next, we will take a look at the stocks you will be interested in this morning, including btg. a small german transportation

company, on news that morgan stanley is trying to take control of that rail logistics unit. this is bloomberg. the open just eight minutes away. ♪

matt:matt: minutes away from the open, let's get your stocks to watch. first, maria taddeo is looking at bgg -- looking at vtg in germany. maria: morgan stanley has

offered to buy a stake for 53 euros a share. that is a 10% premium from the friday closing price and would value the customer -- the company at 1.5 billion euros. morgan stanley has also secured a commitment in a company that owns a stake in vtg. is one to watch there. john patrick, what is the deal with it >> what a match with france bringing home the cup. it is a very positive impact from the world cup as they are trading -- very good for the shares, 1% in the market. matt: thanks very much. let's take a look at some live pics here of donald trump getting ready for -- we have a

soldier standing right in front of the camera. maybe they don't want these pictures broadcast. we will continue to follow that meeting for you. whether or not they let us see it live. this is bloomberg. ♪

minute awayhan a from the open of european stocks trading. let's look at the asset classes that will get us a clearer picture of what is going to happen at the open. for example, we can look at these four asset classes here. you see the pound rising and strength against the u.s. dollar. the same with the euro even though we do have dollar franc against the yen. oil is coming off, down $.62 a barrel. we saw chinese stocks fall into the close, although not didshing to poorly, and we

see on friday the s&p show some gains. friday was good for stocks, today could be bad. you see futures trade, euro stocks down slightly and ftse down less. maybe we will see turnaround at the open. stocks start trading in the europe and the u.k. right now. let's take a look as the markets open. we saw a brief green arrow on the ftse and the cac, as well. while we have had futures down low and asian markets coming off their lows, maybewe'll c a little bit of a pickup -- maybe we'll see a little bit of a pickup. you do see the ibex down a little bit today. on friday, we saw other markets of and the ibex down. the ibex up on thursday as other markets were down, kind of doing the opposite of everything else. very little movement.

let's take a look at the imap and see if we can spot any interesting trends out of the industrial trade there right now. you can see some red and green smatter throughout your picture, but we do see consumer staples taking one of the bigger hits. industrials taking a decent fit, as well -- hit, as well. more green than red. you will see more winners than losers on the stoxx 600. far 278 trading up and 178 trading down, a little bit of positive breadth of their. this is broken down by percentage change. you don't see many big gainers. 2%, but not about one of the biggest stocks. none of the big stocks moving

much at the top. as far as the losers are concerned, we don't see a lot of big stocks getting hit either and we don't see many excised moves. -- big sized moves. everything is not falling very far and these are very small stocks. you don't see a lot of movement in the stoxx 600 due to these movers. guy: matt, let's move on from the markets, though the market is definitely going to be focused on. president trump rounding out the second leg of the european to her while naming the eu a foe of the united states. inaking to his meeting helsinki with vladimir putin, he says he sees the eu as an enemy and russia and china as enemies. >> i think the european union is a foe, what they do to us in

trade. you wouldn't think of the european union, but they are a faux. russia is a foe in certain respects. china economically, they're a foe. but it doesn't mean they are bad or anything. it means they are competitors. guy: that wreps up the fabric of the transatlantic relationship. joining us is mark barton more from the -- mark cudmore from the mliv table. annmarie, let me start with you first of all. how does this meeting progress? we have the president meeting with vladimir putin the same time of the ongoing investigation in the united states, and these indictments in the last couple of days. talk to us about the different optics when you look at what is happening in the united states and with you in helsinki. annmarie: good morning.

president trump has arrived. he's having breakfast at this moment with his finish counterpart in helsinki. theou were alluding to, indictment of those 12 russian intelligence officers is overshadowing this meeting. going into the meeting, many people in trumps administration are telling back the importance of this meeting, saying it's not a summit, is a meeting. they are saying, don't expect too much in terms of deliverables. he's getting a lot of pressure from congress, including his own party, saying you need to confront vladimir putin head on about election meddling or cancel the summit in protest. clearly, if you look at media headlines, the extradition issue or question is overshadowed in the meeting, but obviously donald trump doesn't expect to get any extraditions

adam vladimir putin and vladimir putin isn't going to give him any. what are they really going to talk about? annmarie: that's a good point. there's no way vladimir putin is going to extradite any russian. citizens it's against the russian constitution . we do have a new start treaty expiring in three years, but that was under the obama administration, likely a negative for trump. they will probably discuss syria and iranian backed troops in the region. of course they will be discussing you came -- ukraine, crimea. when trump was asked about crimea, he said it was an interesting question and he's not sure what will happen. not sure if they will recognize the annexation of crimea or could this lead to a path of sanctions relief for russia? finally, they could be discussing the energy markets, oil supply and demand.

trump has been attacking opec, saying they are artificially raising prices and we are hearing putin is preparing for trump to bring up oil in the meeting. guy: let's pick up on that and talk to the mark cudmore from our mliv team. from the markets perspective, what is a good meeting and what is about meeting? is oil likely to be the epicenter of this story? mark:, i think from many angles it's not an obvious market story. it's hard for traders to prepare. they don't know what headlines they are looking for. they will be watching this for the random headlines. the main thing is the oil angle. that's the most chance of some relative tradable headline. there might be progress in terms of a one-off comment in terms of how trade is perceived and if it's political victory or political loss for trump. that would be relevant.

the longer-term sanctions story. there are several things are long-term. the only thing that won't be able to trade on the day are the oil headlines. matt: although a lot of people have made a big deal about president trump using the word foe in connection with the european union, it doesn't seem like markets are running for safe haven assets here. trump almostald threatening hot action comes from trade wars, nobody is buying the dollar in size, nobody is loading up on 10 years, is this a tempest in a teapot? mark: i think it is. there are three elements with all respect to mr. trump. his comments have lost the power to shock markets. most will take everything he says with a pinch of salt. he even qualified his remarks, saying they are a foe in trade.

he was not undermining the whole alliance. he was attacking brexit and saying brexit was great. again, this was another facet of him changing his story depending on who is talking to. people don't read much into it. not so much the trump angle, people are getting bored of the trade story. they started to realize that we've had trade tariffs and lamented. they -- implemented. the gdp is not slowing down that much. trade is about story, but not as bad as what they made out a few months ago. people are starting to adapt to that new situation. guy: you and i were kicking around this story on thursday. is there a danger we end up in a situation where the next leg will become part of the price? in a situation, the market goes i'm not going to price it.

i'm going to move on from there. mark: i think that's already the case. last week, china might have to move down the regulatory path and go away from trade tariffs because of the natural limits imposed and the importance of the u.s. that becomes much harder to price. this,you are good to flag traders want jump on it because it's hard to model. it will be overlooked. we will have to wait to see how it will be fed into the data. the north korean missile tests hasn't led to sudden panic. we don't get billions of dollars out of south korea. in fact, money comes pouring in again because it's so hard to model armageddon people don't even try. same with this trade war. people don't know how to model these non-tariffs variables. they don't know that china will add more bureaucracy. how do you take that into account?

what's that will do is hit real company owners, real business owners, and when business owners start complaining and pmi measures turned down, will we see the trade that turning down, that's what traders will react to. they were not able to price in an advance to clearly. matt: thanks very much, mark cudmore joining us from the mliv ball -- and my blog. annmarie hordern covering that summit for you. you can follow insights from mark and the rest of the team on the bloomberg terminal, mliv . we will kick coming back to amory throughout the day. we will bring you the stocks on the move, including airbus, which is said to be near $29 billion worth of deals with asian carriers, although it's not really helping the stock much in the early session. this is bloomberg. ♪

matt: welcome back to the european open. 13 minutes into the session, more summit news. a meeting between the eu and china. chinese and eu leaders agreed to boost free trade between each other, and they will resist protectionism and unilateralism. that seems to be kind of a mood decision there. they are going to cooperate on

solving market access issues and boost obor and eu initiatives. so some headlines out of the eu meeting from the state news agency. let's get our top stocks stories. for that we go to nejra cehic. nejra: it will be good to start with airbus, particularly according to bloomberg reporting, closing in on $29 billion of deals with asian carriers. some did expect stocks to move at the open by 1% to the upside, but it looks like not a lot of movement. if anything, it's edging lower, down .9%. something to keep an eye on with other aerospace and defense stocks. lagardere has been raised over rate morgan stanley, which pushed the stocks to a two-month high, one of the best performers in the stoxx 600.

on the downside in one of the worst performers, i'm looking at marine harvest, second quarter operational ebit numbers and they have been pushing the stocks down the most in two months, done more than 3% right now. matt, guy. guy: let's carry on with what's happening with the trade story. let's introduce our next guest for the next part of the show. joining us is the global head of rate strategy at the empty parable. good morning to you. the chinese some a they are trying to deescalate the trade war. the president is talking about how he sees the europeans as foes when it comes to trade. how do i price that in? do i keep buying u.s. assets at this point? is that the trade that carries on the market? pretty long, most of those he was assets, including the dollar. guest: in a way, you're right.

what would be the pricing of this assets were it not for all the noise around the trade war? what is the counterfactual as it were? if you look at the rates market between noel, like how five u.s. you -- how flat the u.s. yield curve is, even though we don't see day-to-day risk off move, at the same time, it looks like the pricing of assets already reflects some sort of a risk premium that otherwise would not be there. that's true in bonds and currencies and perhaps even stocks. i know the u.s. stock market looks high, but given the data, without this noise perhaps it would be higher yet. matt: you covered g10 rate strategy, but i wonder how important the u.s. curve is to your work, and also how much of the u.s. curve is shaped by investors here going over there.

guest: well, i think that you are right. obviously the u.s. is part of the global bond market and the global bond market has been dominated for literally years by quantitative easing and by the moment, where you see the biggest downward pressure on bond yields is here in europe, where although qe is set to taper off by the end of this year, there's a great shortage of paper, especially in the german curve, which has pulled yields down to the extraordinarily low levels, not just extraordinarily low in the context of qb, but extra ordinarily low in the context of the recovery that we are seeing in the eurozone economy and eurozone inflation. with yields that low in europe, similarly suppressed in japan obviously, i think the global effect is to keep yields low everywhere. if you try tond,

assess the effects on u.s. bond yields of qe, it turns out that global qe is a better explainer of u.s. bond yields than just u.s. domestic cutie. --qe> improving, butre is it your sense that the structural story around bunds is the shortages supply means that data is on was irrelevant? there's kind of a structural story that's more important when it comes to european bond markets. guest: the question is what can make bond yields go up? who is the marginal seller of european bonds? at the moment, there is no marginal seller. or it's a seasonal thing, at least a time varying thing. plumbing think about issuance and qe, yes it's going to go toy, globally and is going

increase, but it hasn't happened yet. summertime is a time, especially in europe, bond issuance declines both in government bonds and corporate bonds. there's not that much duration for sale. for now, it's been pretty plain to say that bond markets, in terms of yields staying low and prices staying high, the thing that will happen in the september is we will get a confluence of more negative events. issuance will the come back at a time when qe is going to diminish, but also we are going to have higher inflation prince again. we seen this at the beginning of the rise in inflation, but we will get inflation prints in the core. we will have more economic data on the upside, and i think therefore is in the beginning of autumn that we are going to see

markets face bond markets face a real challenge to keep low yields in place. matt: we're going to keep you with us. we have a lot to talk about. global head of rate strategy at bnp. want to take a look at the world map terminal to see how things are shaping up. not really a lot of movement and markets on this monday. we do see this spain rising of bit, as- spain rising a is germany. we see france off just a little bit, and not a lot of movement in the u.k. either. looking for some direction on this monday. this is bloomberg. ♪

guy: watching the european open. equities markets quite so far but political he will be turned up later as talks in the eu restart and brussels. theresa may's long-running battle with the conservative party is taking a dangerous turn as one of the former ministers starts assembling lawmakers against her brexit plan. theresa may will be here later on, highlighting the strength of the u.k. aerospace industry, but she will be back in london quickly after that.

the global head of g10 rate strategy at bmp is still with us. for the time being, the prime minister appears to have the upper hand and the u.k. appears to be heading for a softer brexit. is that all the bank of england needs to give it the green light to raise rates in august? guest: i think it probably is, not so much because of the progress towards the eventual exit, the more because of the domestic economic data, which make these low interest rates look increasingly unattainable. we have got inflation prints, production data, growth data out this week. we think that these will probably show an uptick of inflation, and that should be enough to seal the deal on this rate hike. as long as the noise around brexit stays just as noise. matt: what do you expect on that front? every week, it seems to be

crunch week for brexit. we find out how theresa may sees her brexit plan shaping up. we never seem to get much closer as far as i can tell. do you have a real grip on what this brexit is going to look like? guest: i was trying to think before i came to speak to you about it, and analogy for brexit that would work, and you know how a swan is gliding serenely on the surface but underneath its paddling frantically? this is the other way up. we have lots of frantic activity, but the general drift towards the brexit date and indeed, the end of the transition period date, just keeps gradually moving downstream. so for markets, it's very difficult to react to every piece of news that comes out of this. and i think in a way, that's why we end up looking just at where

our rates? are they still going to be this low? and can the bank manage to edge them up a little bit away from zero? for the moment, they can. and the news flow washes over the market. guy: just a big you up on what happens next, we're in a situation where we are looking at august. but what happens after august? where do you think terminal rates are in the cycle, if we can call it a cycle? guest: we probably can't call it a cycle because if there's nothing else that will happen, the uncertainty around the eventual deal is certainly not going to go away. to even talk about the terminal rate for the u.k. is enormously ambitious. what happens is, the questions remain not only about the eternal u.k. the mystic political situation, but also

about the reaction of the eu to the proposals that come out of the u.k. that's going to take a while. matt: i have to jump in their. global head of g10 rate strategy. ♪

matt: 30 minutes into your trading day, here are the top headlines. friend or foe? trump calls the european union and opponent in trade. the u.s. president is in finland for a crucial one-on-one meeting with vladimir putin of russia. bloomberg is live in helsinki with annmarie hordern. brexit showdown in london. theresa may faces her party on a vote on the customs bill and talks restart and brussels. will her new team fare better than the old one? will we make any progress? will the world to biggest playmakers do battle at the most important airshow of 2018? we speak with the new boeing ceo

and bring you the airbus coo's first ever television interview with mike, host -- with my cohost, guy johnson. this is the european open. i'm matt miller here in berlin. guy is at the farnborough international airshow and is going to bring you some of those important injuries -- important interviews throughout the day. we are 30 minutes into trading. let's see how things are shaping up in terms of shaping -- in terms of individual stocks are concerned. i see a big move on top of the mrr screen that breaks down the individual members of the stoxx 600. video is up more than 25% right now after a court ruled that one of its competitors, dr. reddy in new jersey, cannot make a copy of film, which opioid

is, i guess you stick it on your skin and a gets the opiates straight to you. don't use those at home. you can see they are up by 5%. otherwise you see some of the smaller names putting up big gains. as far as the losers are concerned, you also don't see any really big names, at least not enough to push around the index, which is why you don't have big index moves today. let's get the bloomberg first word news with sebastian in london. sebastian: u.s. president donald trump is in helsinki as he me to vladimir putin. 90 minutes in which they meet one-on-one with only their translators. it comes as trump is under pressure to confront his russian counterparts in meddling in the 2016 election, and with concerns rising.

the u.k. prime minister says her plan for leaving the european union strengthens the fact of factories and jobs, after the aerospace sector delivers a brexit deal. may revealed yesterday donald trump advised her to take the eu to court rather than talk to them. >> he told me i should sue the eu. not go to negotiations, sue them. were going into negotiations with them. but with the president also said was don't walk away. sebastian: china's economic expansion slowed, signaling stable output as trade talks intensified. that was the slowest pace since 2016, down slightly from the 6.8% pace in the previous quarter. global news 24 hours a day on

air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy, matt? matt: thanks very much. is m&a monday. joining us is with david and christoph steiner, cohead of equity capital markets for europe, middle east, and africa for goldman sachs, top ranked advisor. ruth, take it away. ruth: thank you for joining us. let's start off. ipo's are what you have been spending so much time on. let's start with the biggest, siemens listing its health care unit, as well as deutsche bank listing it as it management business. these were party chunky deals. you see more of that come what is driving it? guest: thank you for having me. we've had about $25 billion

worth of corporate spinouts in europe. i think it's a thing that will stay. you can ask why our company is doing it, and i think there's basically three reasons. one, you have a change in the competitive environment. new regions, price competition. the second one is releasing a value. if you have a business in your company that has higher growth rate than the parent, you can get up to 10 premium points on your pe for the growth to generate. and twovate equity, thirds of the spinouts trade at a premium value with the parent. and finally, there is increasing shareholder engagement and management engagement. you know about activism being there, private equity paying premium prices for these assets. and management compensation is increasingly tied to total shale return.

that means if you create value, conversation goes up. it's a thing that's here to say and it's good for investors. they can make good money and siemens is a good example, both parent and a new company trading significantly since then. ruth: one of the things we've also seen though in the deals we just spoke about, companies start out with a certain target valuation and by the time they list, it's a good bit lower. what do you think is the reason for that? is that because we are in a biased market which people have spoken about? or is it that the advisors on these deals to try to get mandates have high, unrealistic valuations? guest: let's say two things about this, first, diagnosis. when you hear about publics being spun out, what is the value being floated? is it some of the parts value? is it a target price?

most companies would trade at a the -- value or breakup value. is not a new thing values are being advertised before things go public. i would say that this year in particular has been more a biased market than in the past. the reason for that is the general market hasn't delivered much value for people. investors are disciplined when they take on new stocks. ruth: interesting you talk about discipline, because the most meteoric rise this year was where the stock nearly doubled on the first day, and still up about 150%. what do you think was driving that on that one particularly? and will we see sort of may 2 tech listings of clients trying to take advantage of this?

guest: generally, i would say you see these type of price developments on ipo's. these are transactions where you can take a very different view on the growth rate and that will impact price significantly. oftentimes, this is by design. people want to see a strong performance. if it goes too much, you can ask, could it have been done differently? mostly it's by design. ruth: what is the ideal on the ipo? guest: we would expect 5-10%. the average in the u.s. in the past two years was 11%. europe, it was 8%. if you look at tech, the average was about 30-35%, both in the u.s. and europe. , one of the things they listed in their home market going to new york, are you

seeing cross-border listings klein? -- decline? which markets would be affected by that? guest: we definitely see them decline and the reason is obvious. money is global. in today's environment, most home markets will only take 20-30% of the offering. the rest comes internationally. it's declining. ruth: thank you so much for joining us this morning. guest: thank you very much. matt back to you. matt: we appreciate the time for both of you. i want to show you my stock of the hour. we'll be telling you more about it throughout the day because it's such a big move. vidior.video or. -- again of 25%. that is the screen in london. the screen next to me shows the same information, but a lot more of it.

for example, the massive jump in volume, 200% more volume than the last 30 days. this is because of the ruling in the u.s. friday night. can't sell suboxone patches, the box patches that help heroin and opioid addicts quit in sort of assisted medical way. this is a huge bump for vidior shares and they are up about a quarter of their value today. up next, we'll have more on the video story. nejra cehic will bring you that and some of the stocks to watch. 40 minutes into the session, this is bloomberg. ♪

matt: welcome back to bloomberg markets. this is the european open. 43 minutes into the trading day. let's get your mid-cap movers. for that we go to nejra cehic. nejra: stunning move with vidio r, erasing all of last week's losses. is moving today after a new jersey court willing to block sales of dr. reddy's opioid treatment. also the company says it's to provide an updated fully

guidance and no later than november 1. this is the best performer. the worst performer is micro focus international, down 5.3% after it was cut. and i'm also looking at admiral group, down 1.8%. it's generally following down a confused.com survey that shows premiums shows the annual -- the largest annual fall in the quarter. guy: thank you very much indeed. let's turn our attention to the farnborough international tradeshow 2018. barnier looking to china looking to give a lift to jet sales after it handed control of its biggest aircraft to airbus. we saw that big jetblue order. we are joined by the president of our bodies commercial aircraft for his first interview the day. good morning. i want to go into the studio to bring back bone barnier's share

price. up, one of the best performances within the sector. what have you guys got left in the tank to keep that kind of performance going? >> is pre-simple. -- it's pretty simple. the initial phase was de-risking the company and the business. we largely accomplish that. deleveraging is another phase, trying to support the business on a go forward basis. that five-year turnaround plan, we are in the middle of that and we are targeting 2022 to be the end of that plan. there is still more room to go but we are in good shape. guy: the market has priced in an awful lot. the market looks at it and goes, we will price that in. we'll discount working our way

forward. i guess that's what the question is. you put a plan out there. can you outperform that plan? guest: we've got a new program which is still in the early stages, entering the service coming up. guy: private jet. haslinda: -- guest: business craft, just like the c-series, now the eight to 20 is the best aircraft in its category. there's room to go. we're going to continue on this path. we are very disciplined. it's all about execution. we're proving every day we can achieve our success. guy: one of the major factors in de-risking the balance sheet is effectively taking the c-series out of your books and putting them into airbus' books. they branded them. how is that relationship going?

how is it working for you guys? are they doing all the heavy lifting on the sales side? are you guys involved in that process? guest: this isn't just accounting. this is to give the c-series the opportunity it deserves, to be much bigger by way of the partnership. in terms of the partnership, we're ahead of where we said we would be. we close the transaction much earlier and we hit the ground running with the jetblue earlier -- jetblue order, another great airline. i would say we're off to a great start with the partnership. we're there to support the partnership. we're very interested and excited about it. guy: that move, a lot of people in this industry and you saw boeing scrambling to catch up. one of the things they're doing is doing a deal with cromer now. you now have boeing with

embraer. how does that change the landscape? guest: there is a long road from announcing a deal to transacting a deal. we're in a great position to compete going forward. the a220 is the best airbus in its class and that will give it a great opportunity. for bomboardier, we have an amazing aircraft. the third-largest and most successful aerospace program in history. with got a great installed base. we're ready to compete, ready to launch a cabin, which is game changing. something airlines and passengers will truly enjoy. we'll bring that comfort and to the c-series program. we're excited about the opportunity. we see a lot of market opportunity and we're here to

come -- out,you take the c-series do those businesses have a critical mass they need? guest: absolutely. it's over 5000 aircraft, over $200 billion of revenue opportunities in the next 20 years. on the see rj, the regional jets, that's 3000 aircrafts. tremendous opportunity and we're well-positioned to advance. guy: you're focused around the world that china is a big market going forward. does what the president doing right now frighten you? you are looking to get exposure to a market that is now at the epicenter of a potential trade war, and aerospace is going to be part of that. is the president making your life difficult? guest: we'll see how it turns out. the one thing we can count on is

year-over-year traffic growth, and that amounts to aircraft needed for that growth. china is a high-growth region and our program is already certified in china. we have a great customer with china express, demonstrating the value of that jet and what it can do to connect intra-china. that's what it's built for. we have a tremendous opportunity and that's with a focuses, just because of the growth opportunity. guy: thank you very much. thank you for seeing us. fred cromer,. commercial aircraft matt miller,. back to you matt: i want to show you some live pictures of helsinki, where president trump is going to meet with president putin of russia later on. they will have a 90 minute meeting. we have an recorder and there on the ground to report live from helsinki. battle of the charts.

nejra is going to play maria. this is bloomberg. ♪

matt: welcome back to bloomberg markets. this is the european omen. it's time -- this is the european open. it's time for the battle of the charts. here's nejra cehic. nejra: dollar-yen trading at a six-year high and if you are asking yourself why this is

happening, and where dollar-yen goes from here, the mliv log provides an interesting answer. he points out it's not about yet we this, it's about dollar strength. even though you see it weaken about 5% its march, the exchange rate is only down 1%. what he says his funds have been rotating adam e.m. equities into u.s. equities. the blue line is showing u.s. equities against the yen emerging markets index. as they have in making the rotation, the dollar has been strengthening. to see what dollar-yen goes from here, all you have to keep an eye on is how much u.s. equities, the s&p 500 is outperforming the markets index. you can see the correlation toward the end of the chart. matt: always interesting to see whether it slows rather than a safe than.

maria, what have you got? trump today is all about and putin in helsinki. when you look at the markets, what you see is de-escalation. that's the white line i want to show you. ais is russia's five-year, brush default. what you see is the lowest it's been since april. that's when the latest round of sanctions kicked in, and that's the lowest since 2016. what you get is trump promising to get tough, but markets seeing the opposite. de-escalation is being reflected in russian markets. matt: i'm going to give this 1 -- i love the flows versus the safe haven bid chart, but i'm going to give this one to maria because it's so topical and fascinating. we've been talking to fund managers about sanctions being

lifted and the possibilities of outside investors getting back into russia. i think the default risk dropping down is a very important to what is going on in today's markets. congratulations maria taddeo. you can see all the charts on your bloomberg program by just running gtv on your bloomberg terminal. you can feel free to use those in your work, as well, or save them and share them with friends and family. let's go back to guy johnson at the farnborough airshow. why is this show so important? becauses so important this is an industry really exposed to the tray story. we talk about the trade narrative. these are companies directly exposed into this. will going be excluded from china? will airbus benefit from that? this time, it's a big focus on the trade narrative and how it's going to affect this industry. we're going to talk to the ceo

--bloomberg did sorely. ariba shortly. ♪

>> summit in helsinki. the form. we are live in the finnish capital with extensive coverage. we get earnings from bank of america and black box. and may's flightpath. funding for the aviation industry as it braces for brexit . we are live at the airsh