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tv   Bloomberg Markets Middle East  Bloomberg  April 27, 2017 12:00am-1:01am EDT

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♪ anchor: next stop is the ecb. no policy changes, traders are watching for hints on a qe withdrawal. waiting president trump's tax proposal. details are sparse but there is a one-off levy absorbed. russianisters to meet
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counterparts to push for production curves the on june. 12 -- welcome to "bloomberg markets". a caution, not surprising as we talk about the boj. goe a look at the gmm function, you can see the mckay nikkai is consolidating. saying,eeing the and warning signals on the index. you are seeing chinese equity markets continue to fall. the declines, gdp data showing economic growth accelerating in the first quarter. being helped by a cheaper one, still on the market there
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pessimistic. crude it down .5% after two days of gains. in vectors weighing expanding crude reduction against easing bloated inventory. we do have treasuries falling animation trading. markets across asia remain a little bit mixed. it is all to do with president trump. expected, not much details when it comes to that tax reform plan. anchor: that is exactly right. the hypothesis worked in this case, he did telegraph he will announce something on taxes. orchids were disappointed we did not get more details. did,a look at how the u.s. the s&p 500 closed down a point and reached a record at one time and was knocked back by the tax plan unveiled. nasdaq composite unchanged,
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holding above 6000 barely. some of the headlines in currency markets off of the back of what happened, the mexican strongly but it is a rally in again after the white house denied reports that it was thinking about ending nafta. city southern depends a lot on mexico for business, down 4%. taking a look at whether or not it manages to reverse some of those losses when markets over the -- open later today. the emirates markets in dubai at you can see what happened yesterday, a mixed picture. dubai staying up .15%. doubled up be down .5% -- of who .5%the -- abu dhabi down
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upwards off the back of the merger rumors for two saudi banks. these would be the first potential mergers and 20 years. -- mergers in 20 years. ahn: let's get a first check of the moves -- the news with deborah mou -- mao. deborah: samsung regained the global lead in smartphones during while opponents benefited from strong demand. the company paying a dividend of yuan.- 7000 indicators plan to meet their russian counterparts. last week saudi arabia and supplement or eastern -- several middle eastern nations push
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beyond june. backing the decision, 24 nations that agreed will make a final decision in the and on may 25. 25.ienna may if oil producers do not extend their outputs, of without the investment authorities say the more on prices will disappear if they are not extended past june. saudi arabia is losing market share as a result of the cuts with iran and iraq. central bank unexpectedly lifted rates on wednesday trying to boost the lira and tame inflation. by 50iquidity window basis points, taking it to 12.25%. turkish lira jumps before turning its games. -- gains.
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global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, i am deborah , this is bloomberg. anchor: the bank of japan cutting its forecast while keeping policies unchanged. kathleen hays is in tokyo for the meeting. kathleen, tell us what you made of the latest announcements. i guess some people might have been hoping for a little bit more. he might have been hoping but i think what there his premise what they got. it wrapped up a two-day malecki -- policy meeting. yield curve control, nothing there on the amount of bonds they will continue to buy to keep that yield at zero. looking at the monetary policy
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report comes out every other meeting to give some sense of -- boj acknowledging acknowledging what are you going to do. by jumping a picture to bloomberg now. you can see where japan is on inflation and compare it to the 2% target. the top line on this chart is the national cbi year-over-year. it is running at 0.3%. that number is running at 0.2%. neither of those numbers matters very much and is near close. those numbers were negative. a couple of years ago, 2014 we had higher oil prices. those numbers were much higher. that's why the bank of japan said this is possible to achieve. shavedey did today is their inflation forecast for
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2017 by several points. it was 1.5%, it is reduced to 1.4%. -- 0.4%. i don't understand how they keep saying the targets will be reached by 2018. 2018 you will be around 1.7% now. a small concession for the bank of japan. they have a long way to go on inflation. as conference this afternoon, let's of reporters asking lots of questions. i'm sure will be asked about this and the target exchange rate. the bank of japan starts fiddling with the number of bonds to keep the tenure. anchor: i wonder if they are going to say they're going to need to delay that again. looking for it to the ecb. most people do not expect any change but the focus still remains one of mario draghi.
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what are you expecting him to say? well, it is interesting because after the french election results markets did not go crazy. cron against l epen -- le pen. maybe mario draghi and his opponents can think about their exit strategy, when they will start buying fewer bonds and move toward normalization. they don't seem to be an agreement that that is about to happen. is a rent paying over this election in europe and around the world. this is not the time to make such a move. mario draghi the longest time jumping into bloomberg again. you can see is gdp in the euro area, a stair step up. you could see inflation has been rising.
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back a bets. the target of inflation is just under 2%. now it is just under 2% again. do you say with that kind of number in place and as much uncertainty hanging over europe, is this really a time to hinder the markets -- give the markets willingness to head toward the quantitative easing door? forecast mario draghi will say something like that later today. of a markete a bit mover. we will see what happens to the euro when we get the statement and mario draghi's press conference. anchor: our guests later in the hour thinks that. lower inflation and the eurozone in a march will be a slow -- still -- showstopper. , thankn hays joining us
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you so much. later in the show we hear from the jet maker trying to bring back supersonic air travel. the cofounder and ceo. up next we are going to take an in-depth look at president trumps tax plan with bank of america's claudia perrone. this is bloomberg. ♪
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tracy: i'm tracy alloway. trumpshn: present economic team says they want to reduce corporate tax rates from 35-15% as well as cutting personal taxes. the director of the white house national economic council urges republicans and democrats to support those changes.
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>> it once in a generation opportunity to do something really big. president trump has made tax reform a priority. we have are public and congress that wants to get it done. hope theomething i democrats would support because it is good for the american people. mnuchin says the tax proposal will bring back trillions of dollars currently held offshore. nuchin: our objective is to make u.s. businesses the most competitive in the world. right now we have a 35% corporate rate on a worldwide income in a deferral. it is the most complicated and uncompetitive business right in the world. buddies makee that trillions of dollars offshore.
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-- companies make trillions of dollars offshore. anchor: thank you so much for joining us today. the fx reaction has been pretty pronounced. the difficulty is disaggregating what is happening with nafta. u.s.d a report that the might consider pulling out altogether and then you have the administration deny that report this morning. disaggregating that from what is happening with the tax or postal, -- tax proposal, how are you viewing these things? commonality between nafta and the tax reform issue is that trump is very much on the offense of -- offensive. trying to negotiate very hard. in that regard we get very little in terms of detail but a lot in terms of headline. the marketuffett around. the overall medium term positioning we have had in the market, particularly from a couple of weeks ago when u.s. rates were so low.
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the market was too pessimistic on pushing the reform on tax and get to the summer recess we will have trump very much trying to push through and come out with a more aggressive negotiation stance on fiscal which should ultimately in the second half of this year lead to higher rates and a stronger dollar. anchor: i wanted to press you on the dollar because you said in early april you have this -- it all depends on u.s. tax reform. are you sticking with that long dollar now? has nothing change for you? >> not from necessarily yesterday but what i would say is we have done from the second quarter, look for stronger agent -- asian currencies. our expectation around the press
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-- progress, there is a bird they -- a birthday going on. anchor: we are a happy family at bloomberg. let's talk about the bloomberg dollar index and the euro. take a look at the charts on the bloomberg. you can see the dollar has been stagnating. its 200 day moving average is not great. when it comes to the euro, it has been pretty strong. it has surpassed those two technical levels. buy-me forby me -- the euro? have you play this in the short-term and long-term? >> the key issue is the mix between monetary and fiscal. the problem has been everything has been about monetary policy differential and the whole burden of policy has been on monetary policy.
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for the first time since the global financial crisis the debate is moving away from monetary to fiscal. ron coming through and the debate around spending leader tendsat the to be loser on the fiscal side. could lend support to the euro. we have the risk on anticipation and we have the ambiguity of whether we will get best tax reform coming through. -- this tax reform coming through. i think the euro has the dollar.e over the we've gone past the euro risk. i think it would be premature to think that today's meeting, we necessarily get a shift in guidance. we may have to wait until june for that. i want to pivot away
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from the developed market and toward market currencies. will -- wu. >> i think that is the concern particular a big because -- particularly because we feel they will start to roll over because we have had this gradual a stick monetary policy tightening in china. the interior ration in the credit cycle, we expect that to weigh on china. significant lift in exports. june-july perio d we'll get pressure on in the taiwan dollar.
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those are the third and perhaps for the best performing em currencies year to date. inrone thing i would say is are likely to do relatively well for the next month or two given the yield attraction they have which provides them with some buffer. shery ahn: touching the strongest level since august 2015, i went to be hong kong currency. this is another one that is making a big move to the dollar. you can see this incredible fall, the fastest pace in 14 months. where's the currency headed now that we are seeing the u.s. rate continue to move higher? >> that is the clear outlier. the only asian currency depreciating has been the hong kong dollar. hong kong currency board
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is a paid to u.s. monetary policy -- peg to us monetary policy. not only a diversions in interest-rate but in liquidity. there is still a plus amount of liquidity in the interbank market compared to the u.s. where ultimately we will get shrinkage in the fed balance sheet. that will continue to drive the dollar in the coming 6-12 months. shery ahn: 7.85, we have not seen that in some time. that would be the lower end of the trading. think he so much for joining us. how a potential merger in saudi arabia could create the bank big topgh to challenge the
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including hsbc in just a moment.
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tr you're watching bloomberg. avy: -- tracy: you're watching bloomberg. shery ahn: operating profit came in at $340 million. 100 million below forecast. a walking 220 million lower than the year earlier. sales were ahead of expectations. kia announced plans to build a fourth production plant in india. $1.1 billion facility. the chinese right hailing have is close to raising $6 billion in a deal that would make it the most valuable in the
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country. by the phoneeach maker. it would make it the most valuable startup in the world after it over -- uber. after china merchants bank. cards for citizens and foreigners -- regular says it is to prevent the use of cars for terrorist attacks. foreigners make up more than one third of the population and are now limited to two premade -- repaid simms. -- sims. we are going to stick with saudi because the potential merger of saudi bridgette bank -- saudi bank would be the biggest. 40% owned by the royal bank of
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scotland, similarly owned by hsbc. joining us for a look at how the markets are taking this news is fully paid for such a -- believe day -- phillipe. take a look at the screen behind me. if we did put these two banks together that would be the white line at the very bottom. it would create the seven biggest banks by market value. taking it pretty close to a few others, for instance i would be andit are -- abu dhabi qatar. what are people saying about the merger? what are you hearing from the markets about this particular deal? realis is a very important -- deal in saudi arabia. what is interesting to hear is that a lot of people see this -- it is a very important moment for saudi.
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there are some anything thinks happening internally in the markets. ofs could be the first several similar deals going forward and not just in the banking industry. big mergers and the petro chem sector. this would be the first of a series of big mergers in the saudi market. ,his is a very important bank hsbc has been in the saudi market for a while. they played a very important role in some of the biggest deals we have seen out of the country including the make a bond sale last year. year.a bond sale last shery ahn: do you expect the market reaction to cool down? >> yes. a lot of people are expecting -- we saw 8% yesterday in the past trading session.
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nobody expected to be at that level for a week or longer than that. shery ahn: we are going to have to leave it there. we are talking opec and oil. this is bloomberg. ♪
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♪ debrah: the white house has make it is opened it this has made its opening bid for the highest corporate tax rate in history. is a one-time levy on approximately $1.26 trillion in cash that u.s. companies have passed overseas. there was no mention on how the plan would be paid for. the canadian dollar and mexican peso have strengthened after the white house and president trump not abandon nafta. top advisers said to be in fierce debate on how to act.
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hardliners favorite ebola before the 100 day in office. approach.t a measured nafta on sixdump months notice. national security leaders are emphasizing sanctions between north korea to drop the nuclear program. region, assets in the north korea showed pictures of kim jong-un marking his countries largest ever fire drill. it coincided with wargames between south korean and u.s. forces. pyongyang says it is a prelude to invasion. the chinese president has called for better financial security saying it is the foundation of a stable time -- stable, healthy economy. the president said authorities will conduct a comprehensive review of the financial markets. iterated that china's risks are
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controllable. global news 24 hours a day powered by more than 2600 journalists and analysts in more , i endeavorntries mao,- i am deborah this is bloomberg. shery ahn: nothing really much coming out of that. no wonder the japanese yen is at similar levels to before the announcement about an hour ago. it is falling .2%. the japanese equity markets are still in it the red. a mixed victory across markets. flushing all of the south, what is going on? sophie: one of the drivers here, and assessment of trumps tax plan, one page after all of the buildup. one of the only bright spots in asia along with shared in
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wellington. chinese equities resuming their slide, set to erase the 2017 games. indonesia on a downturn. we are seeing the canadian loonie and the mexican peso gain after trump said nafta will not be terminated. that is certainly a big move. take a look at equity movers in asia saying the earnings this thursday, a china telecom posting its results at $775 million. following the most in three years after forecast below estimates. it is sliding in the prospects of australia, exports unchanged
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so far. tokyo resuming trade. it is not reached an agreement on a restructuring scheme just yet. rewards are to be had that carry trade and we have high interest rates from russia to brazil beckoning here, emerging equities are set for the best annual start in nearly a decade. trading at the highest level in almost two years and outperforming the space. the valuation of emerging equities at a discount at 10 percentage points over the ten-year average. : we are getting breaking live. we are hearing from paul elliott, about samsung, and any gnostic but he is saying there is room for more progress with
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samsung. a samsung electronic said it will not convert into a holding company, resisting a push by elliott zynga. they say adopting such a structure is undesirable for samsung's competitiveness. there is room for more progress with samsung, although, it is encouraged by samsung canceling shares. we are carried again from samsung electronics. if the stock is still up more than 2%. >> interesting lines coming out there. we will stay with that story if we hear more. -- a topicto a chart close to our hearts. i am talking about oil because opec members, saudi arabia, and that is what will try to convince russia to get on with an extension for the output curve ahead of the matrix of meeting to make a final decision. goldman sachs chemical will head of commodity research, jeff carried told bloomberg the cuts
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will probably be maintained. impatience in the market the probability is relatively high. >> you could create a significant selloff given that technical the week, market is wearing thin on patients. if they are trying to gauge the market there is a higher probability of that happening. scorecard, at the patients needed to be maintained. you're going to see the draws in the u.s.. the big one is global demand. u.s., weven in the have had very strong survey data. doesn't turn into better hard data? consensus is 1%. we think it will come in at 1.4%. in terms of the global demand indicators, china had gang buster data. we don't see the weakness in the grand there. russia came out, hit their target.
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compliance looks good. the third issue is u.s. response. outexpectations take 850,000 barrels per year. that is not there in the market. when we think about the big draws, it is a two-to story. we are only in april. theyr: do we run the risk look at global inventories, they say we need to stand the test. the demand cover is right around the five-year average. >> they do this every time. they run out of patience. where are the inventory draws? they did this and 98, 99, they did this again in 08, nine. you start to see the big draws. it is too much too late and they start chasing the market higher. in terms of thinking about why
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are we not seeing it? you are seeing it outside of the u.s.. you are seeing it in products. u.s. crude, all the world's storage. contract, it will be the last place in the world you see us. this is a point of where you are looking. i will not deny the market is wearing thin on patients. that was the global head of a lot of these research. let's continue with the commodity story now. joining us is mark matthews, head of research for julius baer baer. -- howg we have oil would that feed into inflation at the moment? about what isked going to happen to the reflation trade. would clearly suppress inflation because of
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oil prices being low. that lowers transportation costs and energy costs and all kinds of inputs. the pertinent number four inflation is also unemployment. the unemployment rate in the united states, 4.5%. not is lower than the feds accelerating rates of unemployment. in other words, full employment. >> when the actual unemployment rate has gone beyond the full implement rate which it has, the fed raised rates. >> you sound positive on the u.s. economy. let me see if i can change your mind. this shows money managers position on copper. copper is used as an indicator the strength of the global economy. prices have been time -- coming down.
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it seems like investors are's starting to turn negative sense trump's election. when you look at this chart, the recent rash we have seen in iron or, does it make you nervous? >> the short answer is no. an interesting chart. i would think that half of that was trump. a trillion dollars in infrastructure. i don't think the infrastructure is dead by any means. it is going to take time to push through and it will not be a trillion dollars. half of that was the idea that there will be all kinds of new highways and airports and bridges in the united states. now we realize it is not as easy for him to do things as he said it would be. i think half of that is also something going on elsewhere in the world. i can't really put my finger on it but we are seeing a very strong recovery coming out of asia. i believe the origin is probably
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china. korea announced the first quarter gdp was up .9% coupon to -- q on q. all the export numbers in asia are beating forecasts by 100%. something else is going on. a strong powerful recovery out of a show which probably explains half of that. why are we seeing or expecting u.s. gdp to come in at the end of this week? the weakest growth in a year. this disappointing tax reform plan from president trump, are we going to see data conversion >ith hard data >> even within the federal reserve's forecasts for the first quarter gdp. i think you are referring to the which is a hybrid of all
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sorts of high-frequency data. you to theo refer new york fed forecast which is 2.7. --re was a big storm storm snowstorm. i personally am not at all concerned. i think the u.s. economy looks quite robust. could it be hindered by what happens in congress? we are expecting reform plans to be discussed. how likely is it we will see a government shutdown? >> we have had those in the past and they were never a big deal. it will be an extremely temporary phenomenon. the important issue is this tax bill. there are 10 democratic senators
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who face reelection next year. they are from states that voted for trump. four fiscally conservative republican senators who soft and recently. if they get that tax plan through that will be a -- the u.s. stock market, economy. shery ahn: thank you so much for joining us outside of june -- of dubai. the numbers when it comes to apple that earnings. we take a closer look at google's parent company and what to expect from its upcoming results. this is bloomberg. ♪
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♪ you are watching bloomberg. shery ahn: shares of twitter gaining more than 7% on addressing its biggest
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challenge, attracting new users. a 6% rise in average monthly active users in the first quarter compared with the same last year. twitterth comes as posts a drop in quarterly revenue. tracy: some investors stand to make big gains on that search in the stock price especially twitters third-biggest shareholder. kingdom holding was one of the early investors in twitter you aght recall but it has been rough right. twitter shares have fallen more than 10% in the last 12 months. butn't know if you remember last november he said he was about to break even on his investment and twitter shares were at $19. he is probably not yet above water. if you take a look at the very very cool function on the
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it tracksterminal, all of the fortunes being lost and it made by well-known billionaires, based on yesterday's twitter price it looks like the prince made $138.9 million. not that money if you can guess is. shery ahn: he said it needs more time. getting the business going. let's stick with technology right now because the earnings report we are looking ahead to his google's parent company of the best. it closed at a record high wednesday. this quarter saw a youtube advertising controversy over --ense of it videos offensive videos. the company this past quarter
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was hit by a youtube advertising controversy as johnson and johnson halted spending citing concerns as would run alongside offensive videos. any threat to advertising is a big deal for of the best. google division dominates the digital ad industry along with facebook. the two of them own -- google owns 40% of the market but together the two own 60%. advertises up to 60% of alphabet revenue. you can see advertising, the white line above -- licensing the order -- the orange line and other at the blue line. havebe's and google search played a major role in the rise of digital advertising. bar, tv the blue advertising right there going
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forward. including out. -- now. increasing conservation from cloud services could continue to support growth. the other revenue growth, a group has seen a surge over the past two years. don't be surprised at earnings because each year since 2012 we found alphabet has missed consensus sales estimates in the first quarter. analysts don't expect the recent controversy to expect results. they will be watching for comments on how executives are solving the issue. earningse watching when they are released after the u.s. closing bell. a playmaker is announcing a bid to bring back supersonic air travel. ceo how the founder and much interest he hasn't seen in
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the idea. airline on the planet that is not excited to have something better to offer their passengers. today airlines compete with the same airplanes, flame between the same places. is hard to differentiate. in the back kevin it is all about cost. imagine having something like let's get you there in half the time. >> have you been able to secure further assurances or interests from the carriers? we will have more specifically to say about that later this year. >> how do you expect those talks to go? >> everyone is excited for this. aremiddle eastern airlines the far and away the best. the best travel experiences anywhere, they are based here. the receptionist or medicine positive. anchor: what about the date of
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delivery, the timeline? we have the case of the boeing dreamliner. history theviation promise versus the actual delivery of new technology can be different things. youran you be sure that technology is so experimental. >> we take a lot of information which has happened in spacex. how can he started company and build a rocket and they have done things quickly with a smaller team then the big players could. there is a place for a new company that is more nimble and can't move faster. from a technology perspective there is no technology on this airplane that is not already flying on a different one. 787, area next, that was a bear to get done because everything was new. the capability of this airplane is completely different, the fundamental technology is well understood which makes it lower
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costs and faster to get to market. guy: a critical part of this argument, supersonic technology is not new. the issue becomes and it appears to me is the policy grounds as well. the environment itself is not been conducive to make a lot of progress. how are you going to cut through regulatory take? >> we do not have to cut through any to get to market. we are focused on routes overwater where the band does not apply. of york to london instead seven hours, three hours and 15. that said, in a world where you can get from san francisco to tokyo and less time from symphysis go to d.c., a lot of people will go what? the rules wouldn't change very quickly and we would have
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supersonic travel on every routes. shery ahn: a preview of the ecb meeting later today. this is bloomberg. ♪
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♪ what is in focus today across the middle east, we are still in the middle of earning season here and qatar is in focus. we have the telecoms company released its first quarter numbers this morning. income came in at 584 million versus 879 the same time last year. last year's quarter benefited from 380 million. that stock currently has a target of 115.54. at 105.3.sed other stocks today including more from qatar. first bank first releasing numbers after the market closed
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yesterday. front, we on the fx are watching the u.s. dollar ahead of president donald trumps 100 days in office milestone. that happens tomorrow and local markets will of course be closed for that. you can expect we will be talking about that on sundays show. shery ahn: we are keeping and i on the euro holding steady at 1.09 ahead of the ecb. let's head to anna edwards in london. consensus not much change expected but we are still focusing on what mario draghi say.
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other factors. edging up on inflation. stand toecb be able to the wedding -- the wording they have given in the past? time we get decisions from them. the presstime we get conference. anchor: you are watching from some important earnings yes? anna: deutsche bank later on today, will they manage to return the business to profit soon. ? we have already had numbers from them to focus on costs. we are going to get number from bayer. deutsche bank, we will hear from them and talk to the company and speaking to management there as well as a host of others. time is too short to mention them. shery ahn: thank you so much.
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it sounds like you have a busy day ahead of you. that is it for this edition of bloomberg markets middle east. daybreak europe is next. euro-yen ahead of the ecb. ♪
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tax and trade. the u.s. president will not terminate nafta but pledges to renegotiate the deal with mexico and canada as the white house delivers its tax plan. keep: bank of japan stimulus unchanged and lowers its inflation forecast. the ecb is expected to maintain rates later today. anna: after a strong earnings season from the u.s., a slew of european results this hour. we will break down first-quarter numbers from deutsche bank to .oach -- roche ♪


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