Markets are now looking at pricing in three or four interest rate cuts by The Federal Reserve by the end of 2020 says Alex Edwards, currency analyst at OFX. He told Daybreak Europe's Caroline Hepker that it's an aggressive move and a change of tone. He also discussed worrying signs including the trade tensions, Trump's tweets and the inverted yield curve.

Bloomberg Daybreak Europe

Edwards: Aggressive Change in Tone From the Fed

Conservative lawmaker Sam Gyimah is the thirteenth candidate vying to replace Theresa May. The former Minister for Universities tells Bloomberg's Nejra Cehic and Caroline Hepker why he is campaigning for a fresh Brexit referendum as part of his pitch to become the next U.K. Prime Minister.

Gyimah: The "Underdog's Underdog" Bidding for Tory Leader

Investors should focus on volatility in dollar-yen and in emerging markets as majors like euro-dollar remain steady, says Marc Ostwald, global strategist and chief economist at ADM Investor Services. He told Daybreak Europe's Nejra Cehic that while sovereigns like bunds offer little to no returns, the current market backdrop means investors should hesitate before charging into equities and corporate debt.

Ostwald: Low Returns in Havens, Focus on Yen Volatility Instead

U.K. building societies are financially stable but are getting increasingly exposed to a downturn in the real estate market, according to Marc Ellsmore, director for U.K. financial institutions at Fitch Ratings. Speaking to Daybreak Europe’s Sandra Kilhof on Property Portfolio, Ellsmore explained why Fitch has a negative watch on long-term issuer default ratings and weighed in on the impact of Brexit. He added that a potential BOE rate hike in the event of a no-deal EU exit would be largely positive for the sector.

Fitch: Building Societies Stable, Exposed to Property Downturn

Both the U.S. and China are signalling that they can deal with a protracted trade war, albeit that might not be what they actually want, says Ranko Berich, head of market analysis at Monex Europe. He told Daybreak Europe's Yousef Gamal El-Din that the rare earth embargo risks being a miscalculation that could push the trade war into no-going-back territory. Weighing in on the yield curve, Berich argued that inversion is not necessarily sign of a recession, but that the market may make it a self-fulfilling prophecy.

Berich: Trade Posturing Risks Point of No Return

The worst-case outcome of a trade war could lead to stagflation suggests Paul Brain, head of fixed income at Newton Investment Management. Speaking to Daybreak Europe's Francine Lacqua and Caroline Hepker, he argued that the most radical impact from the trade war would mean a strong US TIPS market, but we aren't there yet.

Brain: Trade War at the Extreme Means Stagflation

There is a more positive Brexit outcome says Brendan Brown, senior fellow at Hudson Institute and publisher of Monetary Scenarios. If Merkel's coalition government collapses in Germany, a new pro-Brexit British Prime Minister like Boris Johnson could renegotiate a better exit deal. Brown also spoke to Daybreak Europe's Nejra Cehic and Caroline Hepker about how he sees the next global downturn arriving, and it is not on the back of a global trade war.

Brown: New UK Prime Minister Could Get Better Brexit Deal

Juan Perez, Senior FX Trader & Strategist at Tempus and Dr Simon Usherwood, Deputy Director at the U.K. in a Changing Europe think-tank discuss the departure of Theresa May and what the battle for Conservative Party leader will mean for Brexit, sterling and U.K. assets. They spoke to Daybreak Europe's Caroline Hepker and Matt Miller just ahead of May's announcement to quit on June 7th.

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The current market dislocation in the U.K. is providing very attractive buying opportunities, says Allan Lockhart, chief executive officer of NewRiver. He spoke exclusively to Daybreak Europe's Sandra Kilhof on Property Portfolio, as the London-listed REIT announced a joint venture with PIMCO. The deal includes buying four retail parks from Zurich Assurance for 60.5 million pounds and the aim is for the joint venture to grow to about 500 million pounds of assets.

Property Portfolio: NewRiver, PIMCO Bet on U.K. Retail Parks

We do see a fundamental reshaping in trade relationships thanks to the trade tensions between the U.S. and China, says Carsten Brzeski, chief economist at ING-Diba. Speaking to Daybreak Europe's Caroline Hepker, Brzeski says the underlying tension between the two nations will carry on through the next decade.

Brzeski: Global Trade is Fundamentally Reshaping

BP seems prepared to meet pressure from investors to set tougher targets to combat climate change says Bruce Duguid, head of stewardship for Hermes EOS. As one of the architects on new environmental shareholder proposals Duguid spoke to Daybreak Europe's Nejra Cehic and Caroline Hepker ahead of BP's annual meeting in Aberdeen.

Duguid: BP's Core Strategy Needs to Align with Paris Goals

The risk is for markets to be disappointed if the U.S. Federal Reserve stays put or even talks about tightening, according to Witold Bahrke, Chief Strategist at Nordea Wealth Management. Speaking to Daybreak Europe's Caroline Hepker and Matt Miller he also explains his call for being overweight European equities over the coming months with U.S.-China trade war.

Bahrke: Risks to Equities From Fed Staying Put

FirstGroup's CEO Matthew Gregory does not have the right experience to lead the transport operator, says Coast Capital chief investment officer James Rasteh. Speaking to Daybreak Europe's Anna Edwards and Matt Miller, Rasteh discusses the activist hedge fund's turnaround plan for FirstGroup. In response, FirstGroup says it "considers the views of all shareholders" and it will keep engaging with Coast Capital "having attempted to do so constructively for more than a year."

Coast CIO: FirstGroup CEO in Job 'A Year Too Long'

Austria's snap election is a huge gamble for Chancellor Kurz, who is hoping to gain a ruling majority, says Bloomberg’s Viktoria Dendrinou. Speaking with Daybreak Europe’s Caroline Hepker and Yousef Gamal El-Din she also discussed the upcoming European Union elections, saying populists stand to gain ground, but key will be how Italian, German and French MEP's perform.

Brussels Edition Podcast: Kurz's Election Gamble Key to EU Vote

The global economic slowdown is caused by the foreign exchange effects of trade war fears, says Charles Dumas, chief economist at TS Lombard. Speaking to Daybreak Europe's Caroline Hepker and Yousef Gamal El-Din, Dumas also says the Federal Reserve will need to cut rates mid-year because the global slowdown is spilling into the U.S.

Dumas: Trade War Threat Hurts Everyone, Not Just U.S. and China

Overnight on Wall Street is morning in Europe. Bloomberg Daybreak Europe is anchored live from London and New York tracking breaking news in Europe and around the world. Markets never sleep, and neither does Bloomberg News. Monitor your investments 24 hours a day, around the clock from around the globe. Hosted by Caroline Hepker and Markus Karlsson.

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