Deutsche Bank Announcing 18,000 Job Cuts And Abandons Global Equity Trading; President Erdogan Removes His Central Bank Governor, Turkish Assets Stumble; Equal Pay For Equal Play As The Women's Football World Cup Champions Call For Action.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know. Drastic measures. Deutsche Bank announcing 18,000 job cuts and abandons global equity trading. You're fired. President Erdogan removes his Central Bank Governor, Turkish assets stumble. And equal pay for equal play. The women's football World Cup champions calling for action. It's Monday. Let's make a move. Welcome once again to FIRST MOVE this Monday. Really great to be back in action. I can't describe it enough. Congratulations, of course, too, to Team USA. Some incredibly fancy footwork from the women's team this weekend. Let's hope the Fed Chair Jay Powell has been taking note, of course, because we don't want any own goals when he testifies in front of Congress later this week. I'm going to have lots of analogies like that this show. Right now, we're looking like a softer open for U.S. equities this morning as we kick off a new trading week. It's probably some choppy trading, though, in the session on Friday after that strong jobs number. Clearly, it was good news for the U.S. economy here. But I think it's forcing a bit of a rethink for global investors about the justification here for rate cuts. It's simply going to come down to how Jay Powell frames the debate, perhaps no surprise, though, that Asian stocks fell in the session on Monday, too, but I do think there's a risk of overthinking this guy. Powell, I think will once again point out the longer term challenges here that he's been reiterating for months and months. Look at the statement that we got in the session on Friday, the latest report to Congress shows low inflation, trade uncertainty and manufacturing weakness, none of these risks right now have gone away. And as we keep saying on FIRST MOVE here, you know, I like this context is everything. It's just one jobs report. It's just one data point. And what we've got now is a market that's fully priced, if not slightly more for a rate cut come the end of July, not cutting if the Fed doesn't decide to cut rates that would create some kind of market volatility and something that Jay Powell is clearly trying to avoid here, too. It's not going to stop questions, though, about political interference, though. But on the bright side, at least Jay Powell has a job, unlike the Turkish Central Bank Governor of course that was ousted over the weekend, something like that could never happen here. All right, let's get to the drivers. Enough being naughty. Deutsche Bank announcing an $8 billion plus overhaul including 18,000 job cuts. Shares right now lower than more than three percent. Anna Stewart joins us now on this story. Anna, I think for anyone that's been watching this over the last decade and the struggles that this bank has faced, it comes as no surprise, but it's really tough reading, particularly as far as job losses are concerned. Talk me through it.</s>ANNA STEWART, CNN REPORTER: Yes, 18,000 is a really quite extraordinary number. It counts for nearly one in five Deutsche Bank jobs. And while the scale of this restructuring, which I'll get into has actually taken some analysts by surprise, the area in focus here has been investment banking. It was always going to be the case, wasn't it? We don't have a regional breakdown of those 18,000 jobs. But we understand that most of them are likely to be in the United States. The bank did tell us they were communicating redundancies to employees starting off across Asia early this morning. Plenty of media reports now about people leaving the London office with their boxes full of their belongings, all very sad. Now in addition to shrinking the investment bank, they are creating a bad bank of course, to wind down some $83 billion worth of assets. I mention that number because that is much bigger than many analysts had thought and they are also surprised that they are closing the entire equity sales and trading division even in Europe. That's another little nugget that took some people by surprise. But essentially, in many ways, this is making a return to what Deutsche Bank started off as a corporate bank. And I think many people are quite happy to see this, as JPMorgan put it, as resizing to where it came from.</s>CHATTERLEY: Yes, it's interesting, Anna. I mean, you mentioned all the key points here. The other thing for me that when I look at it is, you're not going to get a dividend as a shareholder for the next two years. A lot of the action that we're seeing is back loaded. The execution risk here after so many failed attempts to turn this around is a real problem as far as I'm concerned. If I were looking at this as a shareholder in particular. And the other thing of course, here, one of the key challenges is going to be going forward. What's the growth driver if we go back to the past and go back to being a corporate bank that's lending to small companies as important as that is? What the growth and the profitable driver here for the company going forward?</s>CHATTERLEY: Because this is what analysts are saying, too.</s>STEWART: This is absolutely at the heart of what we're seeing today because there was a small relief rally, I think, due to the absence of a capital raise on the announcement. Of course, a lot of it was baked in already. We've been expecting an announcement for days and days. But if you look at the share price, now, Julia, it was down last time I checked around four percent. It really came off that relief rally pretty quickly; over four percent now, and speaking to analysts, two main concerns here. Firstly, this is not a cheap plan, it's going to cost them $8 billion. That's a lot more than many people expected. Definitely at the higher end. And also some analysts I spoke to like Credit Suisse just question the bank's projections for, as you say, revenue growth, particularly in this new core bank, given the scale of these cost cuts, and also the fact that this is a very grand radical restructuring, but it is the umpteenth, they want to see it in execution.</s>CHATTERLEY: Yes, they do. And of course, Anna, to your point as well, hearts go out to those who are losing their jobs and lost them today in particular. Anna Stewart, thank you so much for that. All right. Let's move on to our next driver and the Turkish Lira losing some ground versus the U.S. dollar today. Tech bonds also under a bit of pressure. President Erdogan, sacking his Central Bank chief over the weekend, raising fresh concerns about the bank's independence. Matt Egan joins me now. A slight eyebrow raise on that, Matt. I'm not sure that this Central Bank have any ounce for credibility left, quite frankly, after recent months. But talk us through this decision and the replacement and what that will mean for the Central Bank now.</s>MATT EGAN, CNN BUSINESS LEAD WRITER: Julia, Erdogan who is really -- you know, he is playing a dangerous game here, because this could actually backfire in two different ways. One, it is already undermining the credibility and the independence of the Central Bank of Turkey, which is a big deal anywhere, but especially in emerging markets where you could have inflation flare up with little notice. The other problem is that as you mentioned, it's causing the Turkish Lira to lose ground, which could actually limit the ability of the Central Bank to do the rate cuts that Erdogan wants in the first place. So no official reason was given for the decision to oust the Central Bank Chief whose term wasn't set to expire until the end of 2020. But you know, it's important to think about the backstory here. Turkey's President has called himself the enemy of interest rates. He has this sort of fringe idea that high rates actually cause high inflation, and so he was very upset with the high interest rates in Turkey. Win Thin of Brown Brothers Harriman said in a recent report over the weekend, that you know, the only crime of the Central Bank Chief was the fact that he refused to cut interest rates. And that this move shows who is really pulling the strings at the Central Bank. Now, it's no surprise to see that the lira initially plunged by about four percent against the U.S. dollar, it has come back and cut those losses in about half. I think that is probably a reflection of the fact that Turkey's 10-year yield still is at about 16 percent, and so some investors are willing to gamble on it, because you've got negative rates in Germany and in France and the U.S. 10-year is just that two percent. So it's possible that, you know, all of the Central Bank policies elsewhere is actually -- they're actually masking the impact of the firing over the weekend.</s>CHATTERLEY: Oh, you make such a great point. In a world of zero rates, yes, you face risks with this country. But oh, boy, is there some degree of compensation relative to other countries right now. But I think to your point as well, investors got really furious with this Central Bank governor that he was too slow, to raise rates to try and stabilize some of the currency volatility that we saw in the selloff last summer. So we had his own President lambasting him for not cutting rates. Investors saying he was too slow to raise rates last year. It's a tough gig. But to your point, the politicization here of Central Banks, whether it's here in the United States and the risks of Jay Powell and the pressure he faces from President Trump or what we're seeing in Turkey -- a really fine line that you walk here with investors amid concerns of politicization and political interference here. It's a huge risk.</s>EGAN: That's right, Julia, you know, it is a tough job. They are walking a very fine line. And so the next big event in Turkey is when the Central Bank meets again in July 25th. Now, Rabobank said in a research report that they think that Turkey's new Central Bank Chief could actually cut rates by several percentage points at this meeting to appease the President of Turkey. Now, they say that that would actually be a big mistake because of the currency weakness. Now, as you mentioned, all of this is occurring in the backdrop of President Trump repeatedly attacking the U.S. Federal Reserve. So I don't know Julia, maybe we're entering a new world where politicians have greater say over Central Bank policy, but it's hard to see how that's going to turn out well.</s>CHATTERLEY: Yes, shipping Christine Lagarde. Unfortunately, she's already got the job with the ECB in Europe. Matt Egan, thank you so much for that. We'll see. Okay, let's move on to our next driver. U.S. women's football team of course making history this weekend with a fourth World Cup when they beat Netherlands in the final -- thrilling final -- two nil. CNN's sports analyst Christine Brennan. Great to have you with us, Christine. Huge win for women's football. Huge win I think global women's football and the challenge here, but it has turned into a bit of a political football here over equal pay. So talk me through the success this weekend and also the challenges I think that follow here.</s>CHRISTINE BRENNAN, CNN SPORTS ANALYST: Julia, if the U.S. team was trying to devise the best strategy possible to get to the bargaining table to fight for equal pay with the U.S. Soccer Federation, the national governing body for the sport, this would have been exactly it. This month-long march to victory, with Donald Trump chiming in and Megan Rapinoe going after Donald Trump and some of her teammates doing that as well. And obviously, look who won that one in the end. It looks like the women's soccer team certainly got the better of that, in terms of playing -- backing it up with their great play with the fact that U.S. jersey, the women's Jersey is the best-selling soccer jersey and United States ever according to Nike. With the fact that TV ratings not just in the U.S., but around the world were sky high. They figure a billion people watched. That's one out of eight people on the planet watching women's football. All these things thrown together, plus all the headlines. I was at CNN earlier today here in the D.C. Bureau and every single big newspaper, "New York Times," "Washington Post," "Wall Street Journal," "USA Today," front and center, the biggest picture, top of the page, A-1 women's soccer. I think this is a pretty good -- they have a pretty good argument now when they take that to the bargaining table.</s>CHATTERLEY: You know, I couldn't agree more with you. It's great to see the publicity that we're seeing. But if we bring it back to the numbers here, I mean, the prize and this is what they're arguing about for the 2018 Men's World Cup was $400 million. The female players get $30 million. So there is a huge disparity. But then if I look at the revenues generated by the Men's World Cup, $6 billion last year. We're talking $131 million for women's football. So yes, there's a pay gap. These are incredibly skilled athletes. But when you look at the kind of money that the sport itself is generating, there is a huge disparity. So how do you sort of square that circle or circle that square?</s>BRENNAN: That's the international conversation and you're right. I mean, FIFA has been dominated by men for generations. I think it's the most sexist organization I have ever seen in sports, in covering sports for over 35 years. And it's -- they've kept the women down. They haven't supported the women. I mean, how is it that England for generations did not allow women to play soccer? The nation that gave us soccer. Argentina? Where have you been for all these years with the women's game? Spain now of course is there. Netherlands obviously cares, but they didn't for generations and shame on FIFA for not throwing money and not demanding that every single governing body for these federations and in these various countries didn't do 10, 15, 20, 25 percent of its budget for women's football 30 to 20 years ago. That's that side of the argument. What we're talking about with this equal pay fight, Julia, is the United States. And there, it is about as crystal clear as can be. "The Wall Street Journal" reported that over the last three years, the U.S. women's team made more money, game revenue than the U.S. men's team. Obviously, the U.S. women's team is far superior to the men's team in terms of play, winning World Cups, winning Olympic gold medals. The U.S. men didn't even qualify for the last World Cup. So on all those measures within the United States, that's where the women have their argument, and that's where the battle will be joint.</s>CHATTERLEY: Yes, go the girls. Christine Brennan, great to have you with us. Thank you so much for that. All right, take you up to speed now, with some of the other stories that we are following around the world. Greece's new center-right Prime Minister has been sworn in following a landslide win in snap elections this weekend. The party Kyriakos Mitsotakis won 39.6 percent of the vote on a pledge to reignite the country's recovering economy. He said his priority now is to boost investment while slashing taxes and regulations. Donald Trump has lash back at the British Ambassador who described him as quote, "incompetent and insecure." The U.S. President said Kim Darroch has not served the U.S. well in his role as Ambassador to Washington. His comments about President Trump was supposed to be confidential, but came to light when diplomatic cables were leaked.</s>CHATTERLEY: Iran has announced it has breached its uranium enrichment limit set in the landmark 2015 nuclear deal. Tehran had warned it would do so unless sanctions on its banking and all sectors were eased. It follows Donald Trump's decision last year to pull out of the nuclear deal. Nic Robertson joins us now live. Nic, we are expecting U.S. Secretary of State Mike Pompeo to speak any moment. The question is, what will he say if indeed he says something about this, but just talk us through what we saw and heard from the Iranians at the weekend because this is expressly what a few months ago, Mike Pompeo said would not happen that the Iranians would not do this, as a result of the U.S. withdrawal.</s>NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The Iranians have been very explicit in laying out an exact timeline and timeframe for when they would breach the terms of the JPOA, that international joint nuclear agreement that the United States pulled out over a year ago. It was 60 days ago yesterday that they said that they would announce on July 7th, their changes to how they would meet or not meet the terms of that agreement. And they had indicated back then that they may enrich uranium above the maximum threshold that they're allowed to enrich it to. They announced today that they were now enriching it to 4.5 percent, which is above the 3.67 percent threshold they were allowed. And that was something that they had said that they were going to consider that they would announce it on that date. They announced it on that day. And today, they laid down a further warning, if you will, saying in a further 60 days, they will announce -- potentially announce another way that they're breaking the terms of that agreement. So at the moment, there are two ways that they're breaking the agreement, one by having over the allowed amount of low-enriched uranium, 300 kilograms. They've said they've gone up on that level. They've gone now above the percentage of low enriched uranium that they are allowed --</s>CHATTERLEY: Actually, Nic, I am just going to get in there because Mike Pompei has actually began speaking. Let's listen in to what he has to say.</s>MIKE POMPEO, U.S. SECRETARY OF STATE: I made clear that the Trump administration has embarked on a foreign policy that takes seriously the founders' ideas of individual liberty and constitutional government. Those principles have long played a prominent role in our country's foreign policy, and rightly so. But as that great admirer of the American experiment, Alex de Tocqueville noted, democracies have a tendency to lose sight of the big picture in the hurly-burly of everyday affairs. Every once in a while, we need to step back and reflect seriously on where we are, where we've been, and whether we're headed in the right direction, and that's why I'm pleased to announce today the formation of a Commission on Unalienable Rights. The commission is composed of human rights experts, philosophers, and activists, Republicans, Democrats, and Independents of varied background and beliefs, who will provide me with advice on human rights grounded in our nation's founding principles and the principles of the 1948 Universal Declaration of Human Rights. An American commitment to uphold human rights played a major role in transforming the moral landscape of the international relations after World War II, something all Americans can rightly be proud of. Under the leadership of Eleanor Roosevelt, the 1948 Universal Declaration on Human Rights ended forever the notion that nations could abuse their citizens without attracting notice or repercussions. With the indispensable support of President Ronald Reagan, a human rights revolution toppled the totalitarian regimes of the former Soviet Union.</s>CHATTERLEY: Okay, that was the U.S. Secretary of State Mike Pompeo there. If he mentions anything about Iran, we will bring that to you and update you probably a bit later on in the show, but for now, we're going to take a quick break here on FIRST MOVE. Coming up though, June's strong jobs report here in the United States may be a boost for the economy, but it's a challenge for markets right now. Do they get the cuts they want? We'll be talking about that. And Boeing can't seem to get a lift off. What Saudis deal with the Airbus spells for embattled old airliner? When we return, stay with us.