tv On the Move Bloomberg May 8, 2015 3:00am-4:01am EDT
just opening. we need to talk about equity markets we need to check in and see what the calls are. manus cranny is that the touchscreen. manus: equity markets are the focus. we are one second away from the opening train -- trade. the next issue for the equity markets is breaks that -- brexit could this bring back the nerves of 1992? michael o'sullivan it with here and he says this was beyond the dreams of this sitting minister, which is the prime minister. bt group up. you have a big move in the
currency markets, sterling is on a tear against the dollar. it is against the aussie. as i show you over the past five days, you understand the momentum that you have in sterling. we made it above the 155 level earlier. let's get these stocks and industry groups that may see a move. deals will get done. how many deals will get close today in london? the builders are going to benefit from this continuation of government. that is the theme, equity markets, the united kingdom, the strongest growing economy in the g7 will continue on the
policies. the banks have yet to open. will lloyd hit the top of a political agenda? will be chancellor go for a sale of more of lloyds this year? when will he do that? no opening prices as of yet for banks. utilities again, the whole point is under the labor proposition within the utility space was there was going to be priced caps on controls. that potential risk has dissipated somewhat. united utilities is up, seven trent is up. i want to show you volatility it comes to being a nerd about markets. that is the live volatility. this is historical nothing like
what you saw when rbs was nationalized. we actually take out similar to numbers in the scottish referendum. sterling down by over 4%. that whole risk of volatility in the currency market has dissipated. deutsche bank makes a point that the risk has already been done. black rock almost made the point that a lot of traders had not bought into this rally. the guilt market is also very much and focus in traders minds. ubs the unexpected disappearance of uncertainty is something that could bring foreign buyers act of the guilt market. the next issue will be about short-term interest -- interest rates.
and could the bank of england be left with the opportunity to raise rates more quickly than the market had anticipated. have a look at the sterling charts. this is where the interest will come in. it is indicating the rays will be around .9%. --raise will be around 9%. we are on a river in these markets. these equity markets are tearing ahead. we'll get more data. look at that nicholson up. let's see how the day. that is the state of play, back to you. anna: taking time to open up. it was a masterful effort, come back. manus, thank you very much.
guy: let's talk to the global market strategist at j.p. morgan. is that the best outcome? >> i think, absolutely. it is the end of uncertainty. you have a clearly pro-business government that is about to come in. however, when does the focus shift? guy: i am curious whether it is the best outcome? you talk about the fact that we have no coalitions actually delusions delivered, didn't it? david: i am talking short-term. surely at some point now we are going to get a referendum on the eu. we are going to get two years of uncertainty, two years of us talking about it endlessly on your program, which i look forward to.
that is going to exercise in people's minds. what does it mean for business? can you invest and get back? what does it mean for the future fiscally? shortly they will be tempted to frontload and fiscal transactions. you do this early in a five-year term, you get that done and campaign a fiscal reduction at the end. if they tighten hard in the next couple of budgets, the bank could push interest rate expectations back and sterling lower. anna: they were saying this government could be more eurosceptic. that is something that is unexpected. on guilt, i spoke to john, from the bank of england, he said it is not a big theme.
david: i said as a risk factor. i think they learned their lesson. too much austerity to quickly is partially self-defeating. the u.k. economy will bounce back from a slightly disappointing first-quarter. the labor market seems to be tightening up. i think it is still -- it will still happen, i don't think it will get anyway. guy: from a business point of view, today is a better day or worst day -- wors daye? the snp took an awful lot of seats in scotland. you mentioned the eu referendum. a lot of uncertainty seems to exist. net net, how much further
forward are we? david: i think it is a massive divide. small business is scared of labour snp. now they have a pro-business government. if you are a big business you're thinking, what does this mean for the eu? we have a large current account now. it is being funded not as much by fdi as it once was. we are playing with fire to a certain degree. to rely on foreign capital, a lot of that is tied to opposition in the eu. and: i said existential quite a few times this morning. in the context of big debates in scotland and europe, thank you david. guy: let's head to downing street, ryan chilcote is there.
ryan: yes, whether or not the prime minister party is an outright majority in parliament it is absolutely clear that he will remain prime minister of this country. he will remain here at 10 downing street. he arrived a short while ago. that is a symbolic move. he is in charge. obviously be conservative party delighted. some will say we told you so. i think i'll is all of the conservative are surprised at how well the dead. -- did. they did far better than they did in 2010. they will come back with more than mandate then in a good 30 years.
taking a look at ed miliband, a huge defeat for the labour party. will hear from miliband throughout the day talking more about that. will he conceived leadership of his party. some are suggesting that is something you should do. we have heard from nick clegg, he said it was a painful and cruel night for his party. will he conceived leadership? we know he will be speaking about leadership and his party later. when he spoke after winning, he was heckled by many in the crowd. one thing that is clear is the conservative have gotten a very solid and eight -- a very solid mandate. the votes are still being counted. and: ryan, --
anna: in the new election, perhaps they were suspecting coalition talks. how unequipped the coal -- how unequivocal victory is this? ryan: we don't have the full results. even though they will be delighted, they will recognize when it comes keeping the country together, you were saying existential issues labour defeats for example in scotland came at the rise of the nationalist. the leader and many scottish politicians have been saying just because they did it well, does not mean they want independence. clearly there will have to be evolution and that is something the prime minister will deal with. in addition, there is the
european union and the u.k. role in the eu. david cameron push forward and in out referendum. today he said he wanted that to happen by the end of twice 17. it will not be an easy five years in power if indeed they get those five years. anna: ryan, thank you very much. the tories, the conservative party have gained. mark reckless loses his seat. he won in a by election. it was one of only two that they held. so far in this vote, they have one, we are still waiting to hear about the other seats. guy: what is staggering is the share of the votes the ukip have
taken. anna: that is the night. guy: we are starting to get some of the numbers being posted. the market makers understandably having a morning trying to get some of these stocks right. more representative of the u.k. economy, there are lots of international companies in the 100. it is having a rippling effect, the impact some of these bigger stocks. some of the big house builders surging. sterling on the front. i am going to show you euro sterling. i want to strip out the effect of the payroll story later on that will muddy the waters.
the euro sterling rate down by two and a half percent this morning. the guilt market reacting. let's show you what is happening, this has been a clearer story, yields falling the 10 year. the shape of the curve flattening out a little bit. yields drops. one of the big stories going into this campaign, how much the banks would be taxed as you can see the market reacting clearly. rbs barclays all trading higher. anna: let's take a look at oil. guy: a big story for the scottish national party bp is trading up.
bg group is up as well. anna: big night for the conservatives and big night for the scottish nationalist. it was a historic election for the snp. let's go live to glasgow bloomberg tom mckenzie is with us. very big labour names going in this election. tom: a historic night here, not just for the scottish national party, but for scotland it self. the snp has taken power away from labour. we are in the center of glasgow, an area that has always been a labour stronghold. the first leader of the labour party came from scotland.
they are incredibly disheartened, they do not know where to start to rebuild the party from here. for the snp, they are on a level and they cannot wait to get into westminster. they have a certain number of demands they will be pushing through. they wanted to do some sort of deal with the labour party. the fact that they have taken those votes away from the labour , and the tories are back in power means they will not have as much clout, there are certain issues they will fight for austerity -- anti-austerity they want that out of scotland. those issues they will be taking to westminster and we will have to see how things pan out given the makeup over the next few days. guy: tom, just on that last point, last night some would
argue huge number of seats the power expected to come with it has not been delivered. tom: absolutely. that would've been the goldilocks moment for the snp being able to form a minority government. they were open to doing some kind of unofficial talk and that could have talked -- led to the snp having more clout. back to you. guy: thank you very much. anna: it looks like we will be hearing the results. it has been delayed, they were
destitute -- they demanded a recount. he has been a member of parliament since 2010, he was the shadow chancellor and has been under labour. we are listening to the numbers. the tories have gained, and bowled bolls has lost his seat in the house of commons. guy: a real surprise for many. a real blow to the labour party. putting this central team of has run in the labour party campaign in doubt at the moment. people questioning ed miliband's leadership. anna: we probably want to hear
from ed balls. david perhaps we could come to you and think about the way that the labour party approach the business community. was this something -- was this an election that you thought the labour party was speaking a language people in your position understood? david: on one hand they had a populous town. --tone. this is quite brilliant election strategy from the conservatives. i do not believe a labour government would have been antibusiness. the tories managed to build up a possibility of a labour government as a bogeyman. anna: the snp managed to paint
labour as tory light. david: indeed. the closest overlap was the conservatives and the labour party. that underscores the major parties that there is a deep fiscal conferences for a healthy, robust private sector for economic growth. if labour had been in power, i do not think it would've been bad for business. the message from conservatives is that it would have been. guy: when it comes to the labour party, the point where ed miliband denied his government overspent. that is closely to what happened with ed balls. slightly more apologetic tone coming from ed.
nevertheless, denying history to that degree did strike many as off-base. david: and the last 48 hours you heard that sound bite a lot. labour did not think they spent too much. i think that is a clean sound bite for the conservatives. it is a bad idea to try to defend your record in that way. deficits were too high and the 2000s when the times were good. guy: let's listen to ed balls. ed: it has been a long night. thank you all for staying on. let me start by saying to my political opponents in westminster -- westminster congratulations. in particular, i want to thank the other constituents.
you fought a decent campaign you did so in a good way. i know you will work hard to be a member of parliament and he will have the support of a constituency. thank you for the way in which you conducted this campaign. i would like to thank all of my campaign team who has worked seven days a week for five years. my agents, neil dawson, all of the team, thank you. i am sorry we could not quite do enough to repeat what we didn't 2010 -- what we did in 2010. i have found it a great privilege we have done important things to represent individuals in times of hardship , but also to it make -- to also make advances in westminster.
any personal disappointment i have is nothing compared to the sense of sorrow i have at the result that labour has achieved across the u.k. in scotland, but also england and wales. the sense of concern i have about the future. we will now face five years where questions will arise about the future of our union, about whether or not we can stay a member as the european union whether we can make sure we secure national health service at a time of public spending cuts. those are real concerns to me and many people across the united kingdom. even on this very difficult night i would like to say i am
proud to be a cooperative member of parliament. we have always been a party that has been internationalist, we believe we solve problems i working with other countries that solve them. we have always believed in the union because the sharing of risks underpins justice and fairness. we will do everything we can to secure the future of the national health service, even on this difficult night, i am sure the labour party will emerge in the coming weeks and months more to -- more united and determined. in the next few years i think more than ever we will need in parliament and across the country, a labour party absolutely determined to stand up for working people in this constituency and in our country. i am confident labour will be back. thank you very much. [applause]
guy: losing his seat. gracious in defeat. in the last few hours george osborne gone. ed balls, gone. a significant shift in the economic landscape. andanna: warmly congratulating his conservative rival saying he had a sense of sorrow. now we wait for the leaders to acknowledge the outcome. the latest forecast is that the conservatives will get 300.9 feet here -- 329 seats. let's talk to the global market strategist at j.p. morgan chase.
we will talk europe what is your sense at how quickly this euro question will dominate. how quickly will they push this through? they want this off the radar don't they? david: they have made it very clear that the legislation that permits a referendum is a core plank of their policy. they want to get that on the books. they want to get the referendum date set. guy: when? david: two years. i would say they will stick to the plan. you put the date in and go to brussels. the brits could leave. you hesitate when you say i want this i want that, to make the case to stay in the european
union. anna: avon, thank you very much for joining us. -- david, thank you very much for joining us. guy: for more on the u.k. relationship with the eu, let's go to ian. ian, how is the rest of the union likely to see this? how the politicians in berlin and brussels react? ian: to be honest, i think they will have mixed feelings. you spoke earlier it brings uncertainty, to the eu it bring certainty. the referendum will definitely happen. ever since cameron made his speech+++
now he is reelected, they know it will definitely happen. on the other side, i think they will be a bit disappointed that cameron's is there without the live dib/dems. another thing, i think they are uncomfortable about the victory with the snp. the last thing the eu wants is to send a message to other countries that pro-independence movements can be successful. anna: what can happen between now and a possible referendum? how will this work out? ian: it could start as early as the 25th of june. that is win cameron is due back in brussels for the next european summit. he has to try to convince the other leaders that he can renegotiate with them.
he can take powers back. he wants to change the rules about free movement of people about paying benefits to european migrants, but that will not be easy. the free movement principle is one of the founding principles of the european union. he has got a fight on his hands. guy: walking through this, do you think that 2017 -- there is enough time between now and 2017 to have that negotiation? say we were to have a twice 16 referendum, how much would that change the story do you think. how much would that make the whole thing easier or harder to negotiate? ian: it depends on what he wants to get. if he wants full-blown change, that could take years and years. nobody wants that.
i doubted cameron wants that. i think 2017 would be optimistic if he wanted to renegotiate been. if he just -- if he wants to renegotiate then. i think 2017 is the best bet. everyone i have spoken to in brussels seems to think that 2017 is the safest bet for a referendum. guy: thank you very much. anna: stocks and sterling surge after david cameron's win defies expectations. guy: the labour party hangs in the balance after a snp landslide in scotland. anna: danny alexander and ed
miliband lose their seats. guy: payrolls late, the election victory to deal with right now. manus cranny have the latest. manus: the agenda has moved on from the foreign exchange market to the equities. 10 billion pounds, 10 billion pounds into the trading day it has been added to the value of the u.k.. no price caps that is the news coming through lloyds. when will george osborne bring more of lloyds to the public in the united kingdom and at what price? recouping for the government. if you are outsourcing and you
want efficiencies where else would you go apart from capita? every election year since 1987 the ftse 250 is where you absolutely make your money. approximately 18% rally in each election year. ftse 250 is killed -- 10 billion pounds added the london market is 32 billion to the ftse 100. let's take you inside the u.k. biggest moves. persimmon, this is almost a record nearly 200 million pounds. it is all about building and no
rent controls. i mentioned to rbs up five point -- 5.30%. 4 billion pounds has been added to the value of lloyds. we are at levels we have not seen since 2008 on lloyd's. barclays is up 4.60%. the most shorted stocks going into election, circle labyrinths these were the institutions that were the most shorted. the tories will presumably due more outsourcing. there is still debate over pension relief.
aberdeen management having turnaround. let's take a look at some of the utilities. united utilities up. some of these numbers are quite colossal in terms of their momentum. from about 3:00 a.m., the momentum was all about the foreign exchange market. you are looking at a clean sweep. here is sterling, dollar sterling hits levels since you have not seen since 2008. live volatility is dropping. it is down over four and a half percent. over the past it is down 30% from the third of may. what do they like? guilt.
anna: manus, thank you very much. not only do we get a conservative government, but we got a whole lot less uncertainty. guy: some would argue more uncertainty potentially further down the road with what happened in scotland and the eu. let's go to hsbc. david bloom, give us your reaction. david: we saw the exit polls slamming once again. to-three elections in a row. -- 2-3 elections in a row. we have an eu referendum. the political uncertainty will nag. cable is up, no problem with that, from here we have seen the
bounds, now we are talking about payrolls. we have a majority conservative government. sterling is done for now. let's look at the payroll numbers. we have an eu referendum and that is poisonous for the currency. anna: you cannot change the subject so quickly. we get your point. what about the future of the u.k. what in your assessment does that look like for the pound? how should people exposed to the pound approach the next few years? david: you are right. we get a 10 billion service sector what are we going to do? we are going to have free access to european market? what about foreign direct investment?
the u.k. has this enormous deficit. we want to say, maybe we don't want these current arrangements. that kind of uncertainty cannot be good for the pound. it cannot be good for direct investment and people who want open industry. let me tell you, we are hitting a bounce, cable is going up. we start getting towards the referendum and it dips lower. euphoria, yes, great, sterling up, midterm, not good news. guy: is there a discount to be applied to the euro? is there a discount that needs to be applied to the euro as a result of this?
david: it is the u.k., if one of the guest country wants to leave, it could create a messy scenario for others. let's see what happens to greece first. one of the biggest economies wanted to walk away, not good news. that is why we talk about sterling against the dollar, not the euro. you could get the euro falling against the dollar. if you want to try the euro, try it against the dollar. to try sterling on the downside, it is against the dollar. anna: give us your thoughts on the election. david: equities will do this and that.
all night people were trading now we are looking. these markets are gyrating everywhere. today we have payrolls, a week one. -- a weak one. you don't want to buy emerging markets, you want to buy developed. a big number in the u.s., interest rates. the u.k. exciting and everything and the currency is moving the united states of america is the heartbeat on capitalism. guy: what i want to know is which of these two elements are more and -- are more important did you not sleep all night, or
did you go over the numbers all night? david: we have been up all night waiting for the payroll. it is going to be an exciting day. financial markets are never ending. we are moving on to the next step in the currencies. anna: thank you so much. something of what normally goes in david's coffee, even more of it. guy: this could be an exception. anna: we do not want to get too close to you david. guy: elliott gotkine standing by in westminster. elliott, we are seeing a reaction to how the polls were so wrong. the bookies were a little more right. elliott: i spoke to the clinical
spokesman from labyrinth. let's start with labour. ed miliband, disappointing night. you bet five quit --quid. >> those who think you might survive through the night were in. the bookies are saying he does not have long left. elliott: you're saying it might not be all bad for the miliband family. on the list to replace them we have david miliband. >> quite low on the board. the two to hone in on are on the
board. elliott: looking ahead to a conservative majority government, eu referendum, conservatives say that will happen, what are the odds now that britain leaves the eu. we know they will definitely have this referendum in 2017, perhaps earlier, what are the odds on britain leaving the eu? >> i think would be close. i think that would be another great political that. -- bet. elliott: would you say 10-1? >> it is good when the odds are long and not people -- not many people bet.
you have gone from winning 100 pounds for a 10 pound steak, to winning less. elliott: the other referendum how likely is it that we get another referendum on scottish independence? >> 5-2 before the next election. if that was to happen scotland would be likely to break away from britain. if there is a referendum on scotland leaving there is a greater chance that they vote to leave then the prospect -- >>
obviously we think scotland is more likely to break away from britain. the odds will be skewed in favor of a breakaway. >> they said it was a cruel night for the party. >> the only leader we will take a bet on is ed miliband. nigel farage could also be gone. elliott: is there anything else with odds? >> yesterday be conservative majority would have been a crazy bet. i think and under -- in another election, the odds are low. at the moment, we think the eu
referendum will take place. elliott: political spokesperson from ladbroke's. if you want to place bets, do it now or do it later. anna: elliott, thank you very much. it has been an amazing night. jim murphy, the labour party entrusted him to fight -- guy: five months was not enough time. the big-name, ed balls. anna: and balls losing to the conservatives. the 20 euro politics student in scotland, that has got to hurt.
-- the 20-year-old politics student in scotland, that has got to hurt. guy: david cameron, let's go to downing street. any details ryan? ryan: from downing street, we understand the prime minister will go to buckingham palace to see the queen at 12:30. that is where he will assert his right to form a government in the country. it is a symbolic step in the process of forming a government. he has been here at 10 downing street for about an hour now. his arrival at 10 downing street, where he lives, but had not been throughout the night is in itself symbolic.
if you are at 10 downing street that means you are prime minister. he is reasserting he is prime minister. so far the conservatives have avoided acting triumphantly and rubbing this in anyone's face as they wait for the boat -- vote to be counted. nonetheless, they are very confident and happy. the forecast are that the conservatives may get a majority government, more than half of the seats in parliament. that is something some members of the conservative party would tell you, i told you so, the reality is not even they saw it coming. david cameron is going to buckingham palace to see the queen and that is when he will announce his intention to form a government.
a government that for the first time in five years will not be coalition. it will be one of the conservatives can form on their own. anna: ryan chilcote joining us from downing street. guy: it has been a busy morning for the markets. the u.k. voting in what looks like a conservative majority in the markets certainly seems to be influencing that. the ftse 250 more representative of the economy. the ftse is a much better indicator. some of those property companies are searching today and they are represented in the 250. some of those big u.k. stocks also represented. anna: i am surprised how strong
some of the moves are in the ftse 100. on the ftse 100 we have seen some big moves on the fly. lloyd moving differently. on the banking side rbs barclays, lloyds, all of those on the move. here we have got another range. guy: the non-downs are not packing their bags. anna: if they did, you could hear them starting their jets. guy: maybe they have their suitcases under the bed, you never know. the tax story will be removed for the time being at least until the property companies come up. one of the areas we need to focus on will be the property
companies. the hbc recently said they were date -- considering headquarters and the timing is rather political. i: a lot of soft stories we need to reference this morning. it will be interesting to watch as the eu referendum angle gets more aggressively priced into some of those businesses. it will be interesting to see how the ftse 100 and ftse 250 compare. anna: let's have a look at the map you see that the scottish part is gone. 56 out of the possible 59 possible scottish seats are going to the snp overnight. a terrible performance for the liberal democrats. we have had 612 of a 650
constituencies returning their vote so far. we still have 38 seats left to declare. the forecast is that we will see conservatives edging up with a majority. pa of the bbc suggesting that. we will take a short break. guy: it will be interesting to see what that map would look like under a proportional system. ♪
anna: welcome back to "bloomberg politics." guy: let's talk about what is happening of the last few hours. we have yet to hear whether nigel farage has his seat. ukip must be seething. a huge chunk of the votes, very few seats. snp small number of votes, huge number of seats. >> they will be carrying on about that over the next couple of years. the big question is does nigel farage hold onto his seat?
it looks likely he will not. he has said he will step down as leader of ukip if he loses. does this take the wind out of the sails for you cap. -- for ukip. it looks like if he does not douglas carr so will take over. he does not have the same kind of charisma that nigel farage has. so much of the success of ukip has been on the back of the roche -- farage. anna: does it depend on nigel farage being there? from a charisma point of view, will that push it through? >> i think the question will be
raised and debated extensively regardless of whether or not nigel farage keeps his seat. douglas is considered a heavyweight. i think it is unlikely a conservative government would contemplate electoral reform that would hand power more seats to you cap -- ukip. anna: thank you. guy: let's take a look at what has been happening. plenty of stocks have been up. anna: also singe into -- also syngenta. it is up 14.9%.
guy: you are watching "bloomberg politics." i'm guy johnson. coming up this hour, we have got plenty of coverage. let me tell you what we are going to be doing. we have got an amazing overnight story. welcome to "bloomberg politics." let's run you through the details. there you go. stocks surge. david cameron's conservative party driving in the u.k. the move led utilities to surge higher this morning. the pound also jumping against the euro and the dollar. yields falling sharply this morning. david