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tv   Countdown  Bloomberg  June 4, 2015 1:00am-3:01am EDT

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mark: the global bond slump deepens as mario draghi tells investors to prepare for continued market volatility. don't worry, a deal is in sight. that is the message from greek prime minister tsipras as he leads yet another midnight meeting in brussels ahead of the imf payment on friday. blazer blows the whistle on football corruption. the newly unsealed guilty plea by the farmer fifa executive says top officials took kickbacks for almost two decades. even before sanctions on iran are lifted, the world's oil companies are negotiating
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conditions for their return to the country. bloomberg speaks exclusively to the islamic republic's oil minister and its would-be suitors. hello and welcome to "countdown ." i mark barton. also coming up today, live at the world economic forum in cape town. we will bring you a bloomberg first interview with barclays chief executive anthony jenkins. that is coming in just over one hour. at 8:00, we speak to the south african reserve bank governor, and the south african finance minister, and our coverage continues into the afternoon when we bring you a live panel on the future of trade in africa. donna edwards will be hosting a discussion with leaders of industry and government including the deputy director general of the wto and the
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former barclays chief executive. the global bonds slump has deepened further with a selloff erasing all of this year's gains. yesterday, mario draghi warned investors to be prepared for more volatility to come. that's head over to -- let's head over to hong kong and get the details from yvonne man. yvonne: we are seeing a lot of volatility this morning. that global bond row continuing spilling into the asia markets. let's look at those bond yields. all in the green. let's talk about australia. we have hit 3% in yields, up about that much. we are seeing this with a high this year already in those 10-year yields for australia. we got some horrible trade data from down under. they said this trade deficit widened to $3 billion. that is a record.
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retail sales coming out unexpectedly flat. bad news for australia. japan, you can't see it here but it has fallen four days straight. i want to go a little closer in japan. it has really hit that high on those bond yields that we haven't seen since november. for the month, we are seeing it up about 39% in those bond yields. we also heard from the boj governor this morning, talking about policy. he quoted no other than what peter pan? he said, the moment you doubt whether you can fly, you cease forever to be able to do it. he is talking about being able to convince the japanese people that we can get out of this deflationary mindset. they have to stay positive,
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according to the bank of japan governor. in the asia-pacific, we are seeing quite a bit of selloff. look at shanghai down close to 4%. the hang seng down about 1.6%. has it been too far, too fast? and, bill gross himself on twitter yesterday talking about the next short of a lifetime. no longer german bonds. the next trade he says, is chinese stocks among particularly the shenzhen shares. he said, not yet, but look out for it. back in april, he did talk about german bonds in the short of a lifetime. he got the timing a little wrong. hopefully he will get the timing right this time, mark. mark: thanks a lot. don't worry about friday's imf
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payment. that is the message from greek prime minister tsipras. he says a deal is in sight. all signs are leaving austerity measures behind. for more, let's bring in en in brussels and hans nichols in london. what is behind tsipras' conf idence today? hans: he says his proposal should be the basis for negotiations. the problem is, his creditors don't seem to be on the same page. here's what he had to say about the proposal handed to him last night. he said, ideas like cutting benefits for low income pensioners and raising rates for electricity by 10 percentage points can't be a basis for discussion. he did say they were close on this primary surplus idea. take a look at these numbers.
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this is what they expect to have in 2015. 1% in 2015. the old number was 3%. 2016, they want to percent. 4.5% was the goal. you do see the creditors coming down quite a bit. the question is, what do they do on labor reform? if mr. tsipras is saying, my proposal is the only realistic one, you get a sense why mr. schaeuble is pretty negative. they are not even talking about the same document. all that said, euro this morning was about 1.12. there is optimism in the market. athens was up yesterday. ian was up late last night. he may have more insight. mark: what was the eu trying to achieve by inviting tsipras the brussels? >> as hans said, the clock is ticking. greece has got to make a payment
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tomorrow. they've got to make 1.6 billion euros worth of payments this month. they are wasting no opportunity. they want to see exactly where the red lines are. the commission has said they want to act as a meteor -- a mediator between greece and countries like germany. they are going to waste no opportunity to really tell him where there is room to compromise. at the moment it doesn't look like there is much room to compromise at all. mark: how did the eu think the talks went between the two parties? ian: not as well as tsipras seems to think they went. they talked about progress being made. they talked about constructive dialogue. they talked about learning where each other's positions were. but these talks have been going on for four months. why are they just learning there
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each other's positions are now? they certainly didn't say that a deal is in sight. that's what tsipras said. if we are trying to work out what the european commission thanks, it is a long way from a deal still. mark: what happens next? ian: they say the talks will continue intensively. that means technical talks in brussels between finance experts. it means high-level talks like we saw this week between leaders. it means bringing tsipras back again. they are going to waste no opportunity. the next scheduled meeting of finance ministers is on june 18 and luxembourg. that's where it is all heading. that is the only opportunity to get them all around the table. i've been told privately that they think that is too late. they will try to force it
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through national parliament before the end of the month. they need something on paper that they can agree to next week. mark: thank you, ian wishar brussels, hans nichols to my right in london. just getting some breaking news on the china benchmark. the shanghai composite extended its drop to a fall of 5.3% today. don't forget, the index is up by 135% over the last 12 months. a week ago today, the index fell by 6.5%. this is a volatile market. that's the price right there 4.1% lower. 138% higher in the last 12 months. let's talk about the widening scandal surrounding the world's most popular sport. a new document has shed light on bribery and money-laundering allegations at fifa. former executive committee
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member chuck blazer has pleaded guilty in a new york court to taking bribes from bidders hoping to host the 1998 and 2010 world cup's. near a chat edge is here. what do we know about this? >> this involves chuck blazer, a former fifa official who held a post at the association for football in the caribbean as well. he gave a testimony back in 2013. this has now been made public. in it, he admits to using his position to enrich himself, arranging and agreeing to accept bribes, to influence voting for countries hoping to host the world cup in 1998 in 2010. he also accepted bribes from a firm that pays for marketing and media rights to regional tournaments and admitted he didn't pay income tax at wing
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2000 five and 2010. in total, he pleaded guilty to 10 crimes at the hearing. the most serious of which carries a maximum sentence of 20 years in prison. he couldn't be contacted for comment. mark: a lot of those details we already knew from when the indictment was revealed last week. what is new? what is a surprise? nejra: in this indictment last week, basically he's referring to a co-conspirator. people insinuated from that that he was talking about chuck blazer. it matches his position. it matches his title, his tenure. also, chuck blazer has already been named a whistleblower. there was a "new york daily news" report saying he was cooperating with the government in investigating this corruption.
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this transcript hasn't actually stated whether blazer was cooperating with the government. what is new is the detail. i'll read you a bit of the statement. "i knew that the funds involved or the proceeds of an unlawful bride, and i and others used e-mails and telephones to effectuate a mint of and conceal the nature of the bride." mark: thank you very much. the sanctions haven't been lifted yet but the arguments between iran and the oil companies have begun. ryan chilcote is at the opec seminar. what is it going to take to get the oil companies back in? ryan: we know they want in. yesterday, the ceo coming out of his meeting with the iranian oil minister. shell wants to get in as well. bp wants to get in.
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they need the sanctions to be removed. they also need a deal they can live with. that's got people talking about production sharing agreements. that's where a country awards an oil company the right to extract its resources. it can then use the revenue from extraction to cover its cost and share whatever is left of the prophet with a country that has awarded that contract. many are saying that's what they want in iran. have a listen. >> i think it would be a big step to go back to iran in an uncertain environment. ryan: psa's are good for oil companies. they have that insurance policy. but they are not always popular with governments. they don't appear to be very popular with the government of iran. have a listen to my conversation
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with the oil minister. >> when you form a contract -- not psa's -- ryan: you think it is unfair. >> it makes the situation more attractive for them. ryan: one of the alternatives in the region are called service contracts. you've got a lot of those in iraq. the problem with service contracts is effectively, you get paid a certain number of dollars per barrel for extraction. the country gets the rest. they are not always a good deal for the oil companies. this whole thing makes you
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wonder, whose got the upper hand? yesterday i was thinking if all the oil companies want into iran, surely the iranians get to drive the deal. they are in a position where they can dictate the conditions. i spoke with the ceo of luke oil. he has a long history in iran. he said it is not so simple. >> countries with large oil and gas reserves are beginning to compete with each other. mexico is opening up and has potential. there are big shale opportunities in the u.s. iran needs to create terms that are attractive to investors. it has to be something between a service contract and a psa. ryan: the deadline for talks between iran and the other countries over a nuclear arrangement is september 30.
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we get the sense that the negotiations between iran and the oil companies is going on for a lot longer. that might have an impact on exactly how quickly iran is able to bring a much larger amount of oil to the market. mark: ryan, good job. thank you. ryan chilcote in vienna today and tomorrow. the job stories on bloomberg. australia's trade deficit widened in april. that is the country's biggest trade gap since records began in 1971. australia had to close coal ports and limit shipments due to storms. dish network is in talks to merge with t-mobile u.s. according to "the wall street journal." the two sides are reportedly close to an agreement about what the company will look like. the chief executive of dsiish
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would become the chairman with the t-mobile had becoming chief executive. a military buildup by pro-russian rebels in eastern ukraine has investors taking another look at the sanctions risks. it escalates risks before any you meeting --an eu meeting. the ruble fell the most in six weeks after ukraine's military said separatists attacked a town in the donetsk region. you can find more on that story at this is where you will find me on twitter. do tell me what you are following today. the fifa story continues. the plot thickens after the revelations from chuck blazer. coming up tomorrow is the day that a payment comes due from greece to the imf. ♪
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mark: another day, another round of talks. so far, no resolution in the standoff between greece and its creditors. prime minister alexis tsipras rejects proposals that would facilitate the release of bailout funds. when asked about the payments due to the imf tomorrow, tsipras
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told reporters, don't worry. let's get the details on all this. the chief strategist and head of asset services at rell. hello, francois. don't worry, are you as we lack mr. tsipras seems to be? >> i believe that you need to be careful with germany. germany has strong demands from greece. i think tsipras thinking he can get rid of the idea of changing the benefits system in greece is going to far, too fast. the germans are very strong on the position and they want structural reform in greece. mark: will a compromise be reached? the first imf payment is due tomorrow. 1.6 billion euros is due in june of own. we have the bailout deadline at the end of june. a lot of deadlines. francois: but at the end of the
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day, when you look at the negotiation between greece and europe, you can see that time is not necessarily what matters. it is the spirit. you need to get to something which is a common spirit. mark: are we getting that? francois: on the primary surplus, i think that you have the first sign they are on agreement on something. little by little, they will get to the point where they will understand that they need to find a solution on the pension and benefits system in greece. as long as you are in the spirit, i think you can find a way to accommodate it. mark: the big move yesterday happened in the bond markets after mr. draghi said, get used to volatility. bond investors didn't like that. i think we've had the biggest two-day move in german bond yields since the birth of the common currency. mark: -- francois: may be a bubble in the
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fixed income market. this is a position that we've had for quite a long time. we considered in the last year that it was much too late to be invested in bonds. the 10-year bond was nearly at zero a few months ago. i believe this is just an adjustment to an environment that changed in the light of investors. the end of last year, everybody was speaking about deflation. then came the qe. over the last few days, especially when the cpi number came out in europe, we are not in a deflationary environment. inflation is turning around. we have liquidity injected in the system. at the end of the day, the environment has changed. we have growth. we have a turnaround in inflation. mark: the ecb says, get used to volatility. it doesn't want bond yields to
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rise too far, does it? francois: i totally agree, but it is much better than a normalization of the bond yield. you are below 1% on the 10-year. i believe what they want to do is normalize the conditions on markets. when you look at development on markets in the last 12 months currency volatility, bond volatility, down the road you will have equity volatility. i don't think global rally on equities is necessarily over. mark: what is going to end this bull rally? francois: i think you have two things. first, what happened in the u.s. everybody is thinking that after a poor first quarter, economic activity in the u.s. is going to
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accelerate again. i think this is a short-term risk. this would bring eps expectations to levels that are unsustainable. then you have development in china. you can see that people appreciate the idea that liquidity in china is going to produce renewed growth and the y will be able to manage the problem of leverage. you have those two elements that could bring a significant correction on the equity markets. and don't forget greece. don't forget the fact that you have geopolitical issues. ukraine is back in the forefront. it is not the end of the bull market. anna: -- mark: and the chinese bull market is stuttering. today, falling another 5%. how high does this market go? francois: it was fueled by the
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recent move by the bank of china , deciding to really decrease interest rates. it is a clear sign that they want to favor liquidity injection and participate in the business of quantitative easing or loose monetary policy. i believe we are due for a consolidation. since the beginning of the year in china, the rally extended. i believe this is time for some profit taking. it doesn't mean the china story is over necessarily. i wouldn't say it is the end. the fact that volatility is coming back makes me believe that investors are rethinking the way they look at china. you need to have some volatility in those markets for not fueling these bubbles. mark: thanks, francois. francois savary, chief strategist and head of asset services at rell. coming up, opec meetings
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continue in vienna. we are going to find out what it will take for bp to get back into iran. ♪
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mark: -- manus: welcome back to "countdown." all eyes will be on liquidity in the german government bond market when liquidity comes in. the biggest two-day move in german government bond yields since the birth of the euro. you haven't seen this kind of magnitude of move in the bond markets, in german government bonds since going back to 1998. here is euro-dollar this morning. coming back to just flat.
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when you look at the momentum you have to believe it is the greek government or the bond yields. the quote from mario draghi. we've had the euro with the biggest two-day move since 1999. those people that are betting against the euro are getting squeezed out of the market. alexis tsipras saying, don't worry. we will be able to make our payment on friday. and it is our negotiations, our propositions. that is critical to the resolution on greece. there is the movement on euro-dollar. we are back up above 1.12. over the past five days, you see a spike. that is inextricably linked to the german government bond yield. get used to it. that is what you are being told. the euro was higher overall but
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also euro-sterling. you got the pound down for a sixth day in a row. the euro rising for a sixth day in a row. as one or two people are saying, this overall move is perhaps almost overdone. this is the overall move. until we hit this point, when people suspect there may be a little bit of wavering in the u.k. story. keep an i on euro-sterling. the story of the day, the man who can trump everybody in foreign exchange markets, it is dollar-yen. yes, it was mr. yen. it is all about peter pan. kuroda, the central bank governor, saying we are in uncharted territory, but remember peter pan. the moment you doubt whether you can fly, you cease forever to
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the able to do it. go on, dollar-yen. save that economy. the dollar bullishness bloomberg says, good nonfarm payrolls number. you've heard it all. mark: top stories on bloomberg this hour, satellite broadcaster dish network in talks to merge with t-mobile u.s. according to "the wall street journal." they are reportedly in close agreement about what the combined company would look like. the dish chief executive would become the chairman, with the team old boss serving -- the t-mobile boss serving as chief executive. policy are trying to persuade investors that they will do what it takes to rein in consumer prices. brazil is the only country among the major economies boosting rates.
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nestle is facing its biggest crisis in india. its noodles are now banned in delhi for 15 days after a test showed led contents. shares of nestle in india are falling for a second straight day. nestle india says it has tested 1000 samples and all results showed the lead levels are within the limits specified by food regulation. jack ma's tv and film venture has joined the growing ranks of chinese companies tapping the market for cash. the unit plans to raise $1.6 billion by shelling shares and -- by selling shares in hong kong. the stock is down more than 7% following the share sale. china shanghai composite has extended its fault of 5.3%. the retreat was led by technology, consumer, and telecom shares.
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yvonne, what is going on? yvonne: volatility. aria draghi talked about it. down about 3.5 percent now. you mentioned the rally for the past 12 incredible. more than doubling those share prices. 134% up in the past 12 months. if you look at the past month, we've seen quite a bit of flirtation. it seems like we hit a wall every time we get close to that mark, which was a concern from many analysts. volumes-wise, more than double what we saw from the three-month average around this time. in the last six days, half of those days, we saw moves of above 4%. this rally might be going too fast. it might be a bubble.
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today, we also got lines about china trying to clean up its debt problem. one brokerage suspending margin lending for smaller companies the small-cap stocks. you think this chart is volatile? talk about the small-cap stocks. more than 150 percent this year. i'm not talking about the past year. this is year-to-date. more than 150% up. also, high price-to-earnings ratios. there are reports of speculation that more brokerages could be doing the same thing. mark: thanks for the roundup of what is happening in china. as opec meetings in vienna continue, one of the key topics is what impact the lifting of iran sanctions would have on the market. iran has asked opec members to open space for increased output. its oil minister said the country could raise the
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direction -- raise production by one million barrels a day within six months of sanctions being lifted. he also turned old -- he also told bloomberg that this wouldn't be in the form of a production sharing agreement. >> when you form a contract, not psa. >> you think it is unfair? >> for their situation, it makes the situation more -- attractive, for them. mark: european oil majors are for the first time openly declaring interest in iran in anticipation of a possible end to sanctions over the nuclear program. we spoke to the bp chief executive about what it would take for his company to enter
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iran. >> i think everybody wants to get in just to get in. i think it has to be reasonable terms. it has to be competitive. ryan: there's a couple different ways you can get in. one is production sharing agreements. another is service contracts. would it take a psa to get you back into iran? >> it would be a big step to go back into iran in an uncertain environment. psa's would give us the most certainty. ryan: what kind of risk does going into iran present? >> it presents a lot of risks if you do it outside of a sanction regime. you have to make an assessment
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of, does the country really want foreign investment? does it create the right conditions? this is going to take, i think years. mark: they also spoke about the impact of iran and geopolitical risks on his business. >> we work in iraq. it is a long way from that. i think there would be shockwaves if baghdad got into trouble. although it feels close on the map, that would be a big signal of a heightened level of risk. right now, i can't predict that that would happen. ryan: you've been in the oil industry for a long time. have you ever seen so much geopolitical risk and so little concern about it in the oil price? >> it is interesting.
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i think it has happened before, but i think it was about the time i started in the oil industry. 1979-80, the iran crisis, the uncertainty there with oil prices moving up very fast, that was the last time that i've seen the levels of uncertainty i feel in 2015. ryan: are there any lessons that can be drawn from that? >> i think the lesson is, we are always going to operate in uncertain times. it wasn't just those two years. we are never going to have a certain world. mark: coming up, what should be on opec's to-do list? we will look ahead to tomorrow's big meeting. stay with us. ♪
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mark: let's turn our attention to oil. crude trading at its lowest price in almost a week. opec is likely to keep its out what target unchanged. that is according to analysis surveyed by bloomberg. our next guest published a preview paper on the meeting called "the top 10 things opec won't do this week w." loved your piece.
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thank you for coming in. let's start with the quota. it is not going to do anything, is it? >> it is likely they will remain at 30 million barrels a day. it is the safest option. it is the option that doesn't rock the boat. it helps them achieve the so-called impossible trinity of higher market share, higher revenues, and sustaining demand. that is where we think -- mark: will it be a decision that is backed by all members? the november decision wasn't backed. will this be unanimous? >> that is a great question. this time around, the comments seem on the hawkish side within opec. they have said, ok, things are working out.
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let's just aim for a higher price. there are some members calling for na $80 -- an $80 per barrel price. the important thing is although some hawkish ministers are calling for it, saudi arabia hasn't given a price of $80 per barrel. i think it is all about that impossible trinity. mark: why is it impossible? >> it is impossible because opec needs higher revenue. to get that higher revenue, you need a higher price. if you get a higher price, it means that demand grows. and also supply the third one non-opec supply which is being moderated, also increases if there is a high price. it is getting a balance between these three elements. that's where the current range helps. mark: that's about the right
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range for the price in the near term? >> in the near term, it helps demand. the global economy is not at its best. the consumer is driving oil demand. gasoline, jet fuel, those are driving it. the industrial side is actually week. diesel demand is weak. lower oil prices will help that. on the supply side as well, adjusting it. lower oil prices mean there will be a moderate supply coming from the u.s. bringing on efficiencies bringing on cost-cutting measures as well, it is a combination of all that. $60 to $65 a barrel doesn't rock the boat. mark: have you been surprised at the moves in oil since that november meeting that saudi arabia implemented this holding its market share policy? >> not really.
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it is almost a new price discovery process for oil. that floor was always there. the markets new that saudi's wood, and defend the market. the sharp fall that we've had to go through was part of that market price discovery process. the cost curve is widespread. i think the fact that we graduated -- gravitated towards $60-60 five dollars is telling -- $60 to $65 is telling. although it is not comfortable for most opec members, it is something that doesn't rock the boat. mark: on iran, if sanctions really happen, iran is allowed to flood more oil onto the market, how does that affect opec? >> that is one of our 10 things
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that opec won't do. i think that's something where they will deal with it when it comes through. a lot of the oil traders are looking for it as well. we will see how to factor in iranian oil. it is not expected to come online in greater quantities this year, if anything. if anything, we will see a sizable portion of that production come in 2016. mark: what about iraq? >> iraq is pushing ahead, 3.8 million barrels a day. despite what is happening domestically. again, the iraqis know that they've been constrained for a while now. the quotas don't apply to them.
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so there isn't -- opec is not going to say, iraq, you need to restrain yourself. if you look at the increase of the last month, saudi arabia and iraq have pumped extra to boost the market. mark: so don't expect any big moves in price after the meeting? >> the price risks are currently skewed. the consensus is now gravitating towards. i think positioning is very important. the last 20 opec meetings, we have seen a squaring off of positions. this time, it seems like it is a more neutral position relative to 4-5 weeks ago, but the position hasn't changed much. there are investors still having outside exposure to oil prices
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going into the opec meeting. i think it is still baked in the price. the real surprise would be one if they change their communique. last time, they said 20 million barrels a day is our target, but we are not strictly say in words like "members should strictly comply." i think that's something to look out for. if they change the communique. but other than that, it is just -- [indiscernible] mark: good to see you. thanks a lot. coming up our favorite stories from bloomberg's digital output including nadal at the french open. ♪
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mark: pledges of commitment from the world's wealthiest people to donate to charitable causes. not everyone is giving as much as they said they would. let's get more with devon pendleton. what is the appeal for joining this pledge? devon: it is a really elite club. these are the world's wealthiest, most successful businesspeople. you are making a very magnanimous offer. you are saying, i'm going to
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give away half my fortune. mark: why sign on? devon: bill gates and buffett when they started this, they wanted to elevate the conversation. they wanted to say, let's talk about giving billions, really giving away our fortune. it was more of a dialogue rather than a legally binding thing. mark: are there tax complications arising from giving away more than half of your wealth? devon: sort of. a lot of times, this money comes after taxes. in the u.s., the estate tax is 40% of your estate after you die. that diminishes your wealth a lot. when you think, $4 billion, they give away $2 billion, it doesn't work out that way. it is a much smaller number. mark: gates, how much has he donated? devon: gates and buffett
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together are worth $156 billion. they have donated $46 billion. mark: incredible. thank you for joining us. let's talk about our picks from the bloomberg digital world. nejra joins me. nejra: this was my moms go to food when she was too tired to cook. basically causing a crisis for nestle in india. a routine test basically showed they have too much lead. about seven times permissible limits. this is a big deal. maggi noodles account for almost a quarter of nestle india's sales. morgan stanley says this is going to lead to a drop in sales over the quarter. we've already seen the share price react. basically, it is nestle india's biggest crisis to date.
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people are saying this could make or break the brand. mark: don't think i've ever had these noodles. what are they like? nejra: very salty. mark: more salty than other varieties? nejra: i wouldn't know. mark: rafa is no more. he was going for 10 titles. he lost. djokovic beat him yesterday. rafa hasn't had much form coming into the tournament. he was injured for the second part of last season with a wrist injury followed by an appendix operation. he came into this tournament lacking a victory for the first time in his career on clay. djokovic won the australian open. he's going for the four-part of a slam. the score was 7-5, 6-3 -- i'm getting happy. i was getting tired of rafa winning. and andy murray beat david ferrera.
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he will play djokovic in the semifinals. that will be a clash of the titans. "countdown" continues in the next hour. stay with us. ♪
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mark: global bonds sink deeper. mario draghi tells investors to prepare for market volatility. manus: chinese stocks plunge. the shanghai composite is down. gains have gone too far, too fast. mark: don't worry, a deal is insight. that is the message from greek prime minister suppress. -- alexis tsipras. laser blows the whistle on football corruption. the plea said officials took
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kickbacks for almost two decades. mark: welcome to "countdown," i am mark barton to read we will bring you a first interview with the barclays executive "countdown coming up on "countdown -- coming up on "countdown." in under an hour to read the coverage continues into the afternoon when we speak to and bring you a live panel on the future of trade in africa. anna edwards will be holding a discussion with leaders of industry and government. with former barclays chief executive bob diamond. manus: the bund market rise
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continues. the biggest two-day jump in yields. a decline since 1998? german government futures. down 86 points at the moment. translate that. there is the price action over the past five days. get ready for more volatility. have a look, that is your bund price action. bund prices falling. it shows you, back in april, more than 350 million -- $350 billion wiped out. if you look at the five day chart, you see a decline. it is all to play for today in
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terms of the euro reacting. we also have the currency trading a little lower. mark: shall we get to asia? let's see how markets are faring. how is it looking? reporter: we are seeing a bit of hearing of losses. now we are seeing close to 3% in the market. volumes in the hang seng up 80%. shanghai up 20% in volumes right now. what is going on is concerned about the rally. too far, too fast. at least one brokerage in china suspending financing in china. that was a big headline.
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more than 150% this year. high price to earnings ratio. there is speculation more brokerages could be doing the same. the 25 up nearly unchanged. after the bank of japan governor speaking today. quoting peter pan, neverland. he quotes a story saying, the moment you doubt whether you can fly, you cease forever to be able to do it. uncharted territory with the record stimulus. he is talking about getting the japanese people out of the deflationary mindset. he says you have to keep a positive attitude and conviction. let's talk about the shanghai market. we hit the 5000 level. every time we hit it, we hit a
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wall. this area right here. this is a concern many analysts were saying, this could be the bubble, the level you need to be careful off. we are seeing some of those losses in the tech consumer industries. let's and on bond. we talked about the global bonds spilling into asia. i want to talk about australia. 3% again, the high we saw for this year on bond yields. we got tree data. some people say it was horrible. the trade deficit widening two $3 billion. i want to talk about japan. we are seeing about 50 in the bond yields. it has fallen. prices down for four state
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raight days. manus: prime minister alexis tsipras says a deal with creditors is insight and all sides have agreed to leave austerity measures behind. he is not losing sleep over the imf payment due friday. >> how many days? >> 7.5 3 million. manus: if there was any doubt about payment schedules, i think we got the answer. let's bring in ian. and hans nichols. hans: that is -- hans, that swagger. hans: you can read the body language. you see mr. severus -- tsipris
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coming out full of swogger. he says they are close to a deal. he says his total is the only one that is realistic. the creditors are saying there's is the one they should be considering. ideas like cutting benefits for low income pensioners. that can't be the basis for discussion. manus: these are his redlines. hans: light red. there is the question, how red are the redlines? take a look at these numbers. this is according to a greek official, what the creditors have offered. they have come all the way down to 1%, 2%, 3%. you take a look at what was in the initial package. coming out of the meeting. there is a back and forth.
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he came out and was positive. they are saying nice things. marx: compromise. hans: they want to see -- manus: we are seeing negative growth and they are presuming 3%. let's bring ian into the conversation. what was the eu trying to achieve by inviting him to brussels? was this an olive branch? ian: it was politics. it was not about and all of branch at this stage. they realized time is running out, patients. it would be wrong to suggest they summoned him here. they realized they don't want to waste any opportunity to speak to him and find out where his
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redlines are. the commission sees itself as a mediator between greece and the hardline eurozone countries like germany. they do not want to waste any opportunity to get alexis tsipras here. manus: there was a bit of a swagger from him as he was exiting, assuring the reporter. heidi to get went all around? ian: i was there. there deftly was a swagger from alexis tsipras. there was not from the other european leaders. they talked about progress being made, understanding each other's positions a bit more. you see where the difference is. they are saying progress is being made. talks need to intensify. if you ask the eu, they are not
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quite as optimistic as the greeks. mark: a former fifa executive has pleaded guilty in a new york court. change is here. we had an idea about this in last week's indictment. what is new? >> what is new is the testimony, the level of detail. the actual transcript has been made public. he admitted he used his position to enrich himself. agreeing to accept bribes influence voting for countries hoping to host the world cup.
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in total, he pleaded guilty to 10 crimes with the most a serious carrying a sentence of 20 years in prison. one of his attorneys declined to comment. i will give you a quote from the transcript. he said, i knew they were the proceeds of an unlawful broad. we used wires, e-mails, and telephone to conceal the nature of the brides. manus: let's talk about jerome. he denied he has authorized bribes. there is a line in the story, i don't understand what my role would be in a corruption case. nejra: that was in an interview. he said blatter's top lieutenant authorized a bride. -- bribe.
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they sickly, this comes after the indictment released last week described a high-ranking even official -- fifa official authorizing the transfer. and then we have -- mark: good to see you. thank you for running of the latest in news. the sanctions have not been lifted yet, but the argument between iran and the world's biggest oil companies has begun. ryan chilcote is in vienna as oil executives gather. you have been a busy man. i watched the e-mail flow. the oil companies, are they back in the production gigs? ryan: the oil companies, almost all of them, are keen to get
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into iran. to do that, they need to bang things. sanctions to be dropped. they need a deal they can live with. i was talking to bob dudley. he was talking about reduction sharing agreements, psa's. iran would allow an international company to come in, explore and a drill. they would be able to cover the cost with the revenue they generate from that and share the profit with iran. that is something that has worked in other countries in the past. russia had a bunch of them. it does not mean it is something iran is happy to do. i caught up with the iranian oil minister. >> iranian form of contract, not psa. ryan: you think it is unfair. >> it makes a tough situation
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more -- long-term but it is not psa. ryan: there is no doubt they are good for international oil companies in that they know costs will be covered. there you hear iran suggesting maybe they are not the best deal for them. they want to keep as much of the money as they can. service contracts are one of the things for example iraq has done. a company gets a certain number of dollars per barrel and the iraqi government gets the rest. a lot of companies say, those do not cut it. economically, they are not interesting enough. i caught up with the ceo of russia's largest independent oil company. he has done a lot of business in iraq.
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before the sanctions and iran. have a listen to him. >> countries with large oil and gas reserves are beginning to compete with each other. mexico is opening up and has potential. there are shale opportunities in the u.s. iran has to create terms of attractive to investors. something between a service contract and a psa. brian: as i was think about this yesterday, you would have thought iran is in a position to dictate conditions of the oil company's return. as he was explaining, there are other options around the world. even after the sanctions are lifted, if they are lifted after the verification process has happened, and the world community is convinced iran does
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not have or pose a nuclear threat, clearly the negotiations between iran and the international oil companies, where they are going to seek a fair deal that process is going to take some time as well. may not necessarily be a sweet deal for investors in the end. manus: how concerned are the oil companies that they will be an even playing field? in terms of the production scenario. when the sanctions are lifted if a deal is done. the difference between sanctions being lifted and the ability to produce is short. ryan: one of the things the oil companies seem to be particularly interested in is how quickly they will get in a political sense. you have the russians, the americans, the chinese.
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they all want to get in. well iran be more favorably disposed to the russians because they were less for the sanctions were unilaterally introduced? his example was iraq. u.s. troops were on the ground fighting the war there. that rate of saddam ridley government that came to power as a result of saddam being disposed did not hand out the contracts to u.s. companies. iran will have an interest politically in hedging itself against problems down the road. they will one a mixture of investors. perhaps we will not get an uneven playing field where the russians and europeans can get ahead of the americans. manus: thank you for that. ryan chilcote at the opec meeting. mark: join the conversation on twitter. tell us what you are following.
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moves in the german bond the market. biggest move since the birth of the euro. that is where you will find us. manus: coming up, our next guest says markets are pricing in the chance of a greek exit from the euro. ♪
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first verse, it will be hard to do a deal.
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he himself is extraordinary popular. he might think i can carry this. i will have less to lose. i will go right to the wire. manus: do you agree with that? gabriel: he has a difficult position to sell a deal or default. the greek people, in some ways they lose because the eurozone is the dream of a generation. on economic grounds, i think they will be in the long run better off leaving. whether citrus -- alexis tsipras survives or not is another thing. they will have a difficult thing. they will have to accept a lot of losses. the possibility that the eurozone is irrevocable under
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all circumstances. if anybody has been overplaying the hand, it is probably the eurozone. that is going to be tested it over the next few days. manus: unintended consequences for lehman were unknown. for europe, with the grexit, what is the worst case scenario? gabriel: the ecb has enough instruments to contain the immediate aftermath. to me, the worst case scenario runs through the political narrative of the rise of populism. fiscal deficits getting bigger. that would be the worst case scenario. by no means the most likely. market: the question of what has been happening in bond markets.
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draghi says, get used to volatility. we have seen some of that. gabriel: when you see a route, you say, they need to go higher to where i think equilibrium is. where the future path of short rates would imply for long-term bond yields, it is funny. the big risk from china is still there. where is the money going to find a home? it ultimately leaves yields too low. manus: thank you for joining us. the head of global macro research at oxford economics. mark: the bank announces its decision later today. it's impact on boj policymakers. manus: we are both on twitter.
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he has put in earlier to me to day. it has been a source of discontent. phone calls at 3:00 this morning. i was in neverland. mark: see you in a minute. ♪
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manus: welcome back to "countdown." 7:30. foreign-exchange markets. what you do, german government bond yields rising in a two day ramp in yields. government bond yields rising in germany. quit program -- quid pro quo
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same impact on the euro? it took the euro back above 112. that is the biggest two-day rally since 2009. what is going on? are the short traders being squeezed out? we have reasserted ourselves on the downward move. and then things began to turn around. short positions are being squeezed out. do you want to go home with a big substantial position on a day by day basis as greece vacillates between staying in the eurozone and falling out of it? we're down and ate right now. certainly -- 1/8 right now. euro sterling trade sterling
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coming off its strength. the euro reasserting itself. the euro going up and sterling coming down. that overall trend began to spike higher. the services industry we are flatlining at the moment. 7350 is where we are on sterling. dollar yen, you are seeing the dollar higher. if it is a strong number, i have bloomberg saying you can retest. the dollar is getting long. the moment you doubt whether you can fly, you cease for ever to be able to do it. that applies to many things in life. dollar yen what he is focused on. mark: the biggest crisis to date in india.
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the noodles are banned in delhi for 15 days after tests founder led. nestlé india says they have tested 1000 samples and all showed lead levels within limits. berlin's airports are bracing for an influx of 25,000 football fans in coming days. the final between barcelona is likely to put extra strain on the city. the air capacity will see an extra 370 commercial flights between thursday and sunday. alibaba pictures group has joined the groups of chinese companies looking for cash. they are selling shares in hong
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kong to finance potential acquisitions. the stock is down 7% following these share sale. manus: economists expect the key rate to be kept at a record low. joining us for more is generally in. -- jen ryan. that is not what we are focused on. we heard carney referred to the european situation in the past and the concerns that may have for the u.k.. jen: this is one of the headwinds the u.k. economy is facing. election was just coming up. why would you move policy right before the decision? similar thely, why make a big decision?
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the state of play is being worked out. you do not know how quickly the oil price increase wealth -- will feed through. the forecasts are for inflation to stay low, but we don't know how quickly the economy will rebound from the low rate of growth. that might argue for an increase sooner than market six act. manus: the currency has been strong. services were weaker than the currency anticipated. people said, growth might not be what we thought it was going to be. jen: the signs now look more disappointing. what we have been looking at is there are positive signs. consumers are in a good position
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with wages picking up and inflation below zero. that spending can provide a lift to the economy well we look for the prospect of improving exports and getting our ducks in order. mark: inflation, where are we? a long way away? jen: it is not close. we are seeing the impact of the oil price drop. as that gets kicked out of calculations, inflation is meant to be picking up. markets are looking for a rate increase. some economists say it could come this year. mark: something is special in the bank of england. there was a dry run this month? jen: they are changing their format for interest rate decisions. it is part of a move to increase
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transparency. they are going to publish the decision the rationale, the minutes and possibly the new forecast on a quarterly basis. this changes the meeting schedule. mark: that will be super thursday, when we get all three. manus: there is going to be lots of them. locked in there. they might take us back into the bank of england? jen: we might take you. manus: think you very much, jen ryan. mark: join a conversation on twitter. he has been in zürich. they are trying to get rid of us. there he is. no tv at the end of his. you are on twitter, what is your handle?
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@jenryanews with one n. manus: we are going to bring you the first interview. he is the ceo of barclays. he is with anna edwards in south africa. she gets all the good gigs. mark: we get zero, she gets cape town. ♪
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mark: the african continent is blessed with the world's youngest demographic. our very own and edwards is
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there for us. good morning, anna. anna: you said i get all the good gigs. it was raining all day yesterday. but thank you. the forum is taking place in cape town. i am pleased to say our first guest is the ceo of barclays. my colleague is running through the opportunities. let's start with some of the big pictures. what is worrying you at the moment? many saying it is contained. how do you feel? guest: we are in a time of -- global growth is 2.5%-three .5% career that has profound
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indications for governments businesses, and individuals. there is clearly a process of negotiation. past experience shows there is generally a solution found at the end of the room. my money would be on that happening still. anna: what about the grexit? guest: we don't have -- that is good business planning. anna: is there a need for interest rates?
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guest: when you are in a low growth environment globally, policymakers have to be extremely careful. our expectations are when they rise, it will be slowly. it will be a long time before we are back to the levels we are used to. anna: how is investment banking doing compared to the second quarter? test: we have had to adapt to the environment of a lower growth and more regulation. barclays is on a clear path to do that. we had a strong first quarter. we expect the rest of the year to be more of the same. anna: have we seen all the
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trimming we are going to see in investment banking? antony: we are making good progress against the plan. as with all business over time we might do more of that and of other things. anna: doing all about the headwinds in barclays? -- headcounts? anna: that is the plan we are executing. what is barclays wanting from africa? what does africa give to barclays? antony: we have been here a long time. what we think is it provides access to hire growing parts of
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the world. 5% compared to what we have globally. it is coming off a lower base than the rest of the world. there is a phenomenal opportunity for emerging middle classes. the ability to use technology to serve people. and of course to circulate all of our great products and a knowledge. it may come from africa to the u.k.. there is great opportunity for shareholders. anna: does it make sense that africa is part of the business? it has been a part of the business for a long time. when this is a business that is about credit cards, investment banking. personal and corporate inking. -- banking. does it make sense for the fourth pillar to be africa?
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antony: if you look at our business in africa and the u.k. it is very similar. wealth management, credit cards. the trick is to create synergies. for shareholders, they like the exposure a higher growth part of the world. it is up to us to deliver the economic benefit that provides. anna: do you worry about compliance concerns? things that were you about doing business in the continent? anottony: it is important we do business in the right way. the prescription. in less developed parts of the world, we have to be careful. there are -- on the other hand, those are manageable problems. problems which we think do not
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impede the strategic attractiveness of the opportunity. anna: you have to spend more of your time dealing with compliance concerns on a global level then you would have liked. in south africa, can i ask you about a specific issue? the commission says they see collusion in fixing the rate of the south african rand. antony: we are cooperating with authorities on the matter. anna: has there been a whistleblower? anottony: i cannot comment further. anna: would you be surprised if there was manipulation of foreign exchange. antony: i am sorry to be
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boring but i refer you to my previous answer. anna: we keep hearing about further investigations, more rigging of the benchmark. how long is this going to take? antony: it is often talked about in terms of wrongdoing. that is not the only reason why culture is important. it is driven by the performance of the organization. when it comes to the prevention of wrongdoing, culture is important.
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there are circumstances where individuals don't. that is why you have a legal system and police force. you need colts are paired with a strong compliance function that has the right surveillance protective and detective controls. in my opinion, we also need a criminal offense market. when you put those together, you have a system that is going to prevent these problems we have had in the past. no system is perfect. we can move forward with those elements in place. at barclays, we have -- anna: other banks have said they are looking into anything went wrong with internal procedures.
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antony: there have been no allegations of wrongdoing by banks. we will cooperate fully on these matters. anna: have a very good economic forum. back to you guys. mark: anna, great interview. up next, the bart chart. stay tuned. ♪
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mark: time for today toss bart chart -- today's bart chart. down 4% after being as much as 2.3% in mid april. i have been looking at the bond indexes to see if there have been pockets of gains. the top chart, not a single
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sovereign bond market has posted positive return. the biggest are with the belgian market followed by a drop in the portuguese market. best part is greece which has a negative return. the best-performing part of the global bond market according to -- is the serbian local bond market. a positive return of 2.7%. that is the top chart. over the last three months only two sovereign indexes -- it has posted declines. the worst performer posting a
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drop. the treasury market dropping as well. to find the best-performing global bond market, we have headed to the emerging markets. this time, it is russia. the russia local market. let's finish her with measuring the performance of global markets here today. we have a sprinkling of gains. switzerland, new zealand, and hong kong. the biggest gain of 2015. treasury market down. the worst performing sovereign market a drop of 2.2%. the best-performing market is russia's local market. again, with a rise of 21%. i have chosen the second-best read that in -- second-best.
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the dominican republic. which has also risen this year. there you have it, we have had winners. russia clearly is the biggest winner. manus: well done on that. stay tuned. second-best. the dominican republic. which has also risen this year. there you have it, we have had winners. russia clearly is the biggest winner. manus: well done on that. stay tuned. "on the move" is next. that is a good bart chart. ♪
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jonathan: we are here in london, just moments away from trading. for now, let's head straight to be morning brief print a turbulent day for chinese stocks. concerns games have gone too far too fast. global bond routes, the biggest today jump in german yields since 1998. mario draghi says get used to
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behind in volatility. a deal is in sight, according to alexis tsipras. he says don't worry about the payment. coming up in this show from the world economic forum we will catch up with the south african central bank governor. at 8:00, you can watch that. i am looking at futures. dax futures up by 45 points. european markets just opening up. manus cranny has that for you. manus: this is day three of the decline in the european equity market. let's take you inside. we have a couple of big calls. london is down. volatility, if you look through


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